---
title: "Lenny's Podcast — 2024 Q2 合集"
date: "2024-01-01"
source: "Lenny's Podcast"
url: "https://www.lennysnewsletter.com/"
---

<div v-pre>


# Lenny's Podcast - 2024 Q2 (21 episodes)

This file contains 21 articles/episodes.

---

## [1/21] Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO)

**Dharmesh Shah** (00:00:00):
Some of the best startup advice I've heard is startups should focus on one thing and be really, really exceptionally world-class at that one thing. And one of our early zigs is we are going to do exactly the opposite of that.

**Lenny** (00:00:11):
You have no direct reports and I don't believe you've ever had direct reports at HubSpot?

**Dharmesh Shah** (00:00:16):
I could become passively okay at management with some training, with some coaching. I don't want to spend any years of my life becoming passively okay at something.

**Lenny** (00:00:23):
What was that process like to define the culture?

**Dharmesh Shah** (00:00:26):
My co-founder and I were having one of our founders meetings and he said, "Oh, Dharmesh, I hear this culture thing is really important. By the way, can you go do that?" I'm like, "Okay. Brian, of all the people in all the company, is like, I am the worst possible person." It's not that I don't like people, I just don't like being around them a whole lot.

**Lenny** (00:00:40):
Something that's really unique and interesting about you is you're obsessed with comedy and keynote prep.

**Dharmesh Shah** (00:00:44):
It comes down to this metric that stand-up comedians use called LPM laughs per minute. I have custom software that I've written that will say, "Okay, here are the points at which the audience laugh."

**Lenny** (00:00:57):
Today my guest is Dharmesh Shah. Dharmesh is the co-founder and CTO of HubSpot and also one of the most fascinating and first principled thinkers I've ever met. In our conversation, we cover a lot of ground. Dharmesh's hilarious and ingenious approach to putting together a talk, including measuring laughs per minute, his biggest lessons from being a public company exec for over 10 years now, especially while being a startup guy at heart, how he approached creating and scaling the culture of HubSpot, which you'll find both hilarious and inspiring.

**Dharmesh Shah** (00:04:15):
Thanks for having me, Lenny. It's an honor.

**Lenny** (00:04:16):
It's my honor, and thank you for joining me. You are a wildly fascinating human and so I thought it'd be fun to start with just a bunch of fun facts that I found about you online. And what I'm thinking is I'll just walk through them. Tell me if they're true as I walk through them, and then this is going to lead to a bunch of different topics that I want to talk about. How does that sound?

**Dharmesh Shah** (00:04:34):
Sounds great.

**Lenny** (00:04:35):
Okay, here we go. So one, you have no direct reports and I don't believe you've ever had direct reports at HubSpot.

**Dharmesh Shah** (00:04:42):
That is correct. 7,000 plus employees? Exactly zero direct reports from time, T equals zero.

**Lenny** (00:04:47):
Okay, we're going to talk about that. You also don't do one-on-one meetings as a result. You don't have reports to have one-on-one meetings with?

**Dharmesh Shah** (00:04:54):
That's correct.

**Lenny** (00:04:55):
You built many side projects while at HubSpot, including a product called Wordplay, which at one point made $90,000 per month and had 16 million users.

**Dharmesh Shah** (00:05:06):
That is correct.

**Lenny** (00:05:06):
You also bought chat.com for $10 million and then you sold it two months later for more money than you bought it for?

**Dharmesh Shah** (00:05:13):
It was actually 15 plus million dollars, but I had kind of stated eight figures, but... well, yes.

**Lenny** (00:05:22):
Ooh. Is this breaking news?

**Dharmesh Shah** (00:05:23):
It's breaking news, yeah.

**Lenny** (00:05:24):
Wow. So that's not what you bought it for?

**Dharmesh Shah** (00:05:27):
Yes.

**Lenny** (00:05:27):
Okay, and you sold it still for an undisclosed amount, is that right?

**Dharmesh Shah** (00:05:30):
Undisclosed amount, yeah. And more than that, I'll just say that.

**Lenny** (00:05:33):
Yeah, there was a profit, and I know you gave some money to charity and there's some promises you made where people commented on your LinkedIn post and you gave more money away, so it was awesome. Okay. Also, you're a billionaire?

**Dharmesh Shah** (00:05:42):
That is once again true. It's still true.

**Lenny** (00:05:45):
Great. Also, you were born in a village in India that had no paved streets, no traffic lights, no hospitals.

**Dharmesh Shah** (00:05:52):
That is correct.

**Lenny** (00:05:53):
Okay. Before HubSpot, you founded two companies, but I think the more important fact there is you promised your wife you would not start another company before you started HubSpot and then you ended up and went on and started HubSpot.

**Dharmesh Shah** (00:06:05):
Yes. I had promised her that I would not do start... I had to hang up the proverbial entrepreneurial hat. Best laid plans and all that. I met my co-founder in grad school, which is that I was going to... The plan was, "Oh, I'll go back to grad school and go find myself." And then the plan was to go eventually teach, not do another startup. But then I met my co-founder there and one thing led to another as these things go.

**Lenny** (00:06:27):
I hope she's forgiven you.

**Dharmesh Shah** (00:06:29):
I do too.

**Lenny** (00:06:31):
Okay. Final fact. So Kipp, is that how you pronounce his name? Kipp, your CMO?

**Dharmesh Shah** (00:06:36):
Mm-hmm.

**Lenny** (00:06:37):
Okay, great. So I asked him what to ask you, and he tells me something that's really unique and interesting about you is you're obsessed with copywriting and comedy and keynote prep. That you have a very unique approach to preparing for a talk and how you think about humor and slide design and story arc.

**Dharmesh Shah** (00:06:52):
That's very true. Public speaking is not something that comes naturally to me. So we're going to start there. We can talk a little bit about the copywriting, other things that are sort of related. And one of the... and I try to not do things that I'm not good at and don't enjoy. One of the rare exceptions that has snuck through is the need for me to get on stages as founder when we have our annual HubSpot event, our conference, which at the time when we did our first one, it was, like, 150 people at the Marriott. And then it's steadily grown since then, and so now it'll be like, 10,000 people in the live audience and hundreds of thousands online.

**Dharmesh Shah** (00:07:33):
But as I came to this realization that I was not going to be able to talk my way out of it, and I saw where this was headed, I'm like, "Okay, this is something I'm going to have to actually learn, because I can't delegate it, can't talk my way out of it." And so I'm a big believer in this talent versus skill. So we all understand talent. It's like if someone has a talent for music, someone has a talent for athletics, whatever it happens to be. And that's true. That exists, but the way I think about it is talent basically controls the slope of the curve, but most things are actually acquirable skills. So for instance, if you have a talent for music, let's say, you might learn music faster than someone else and your ceiling may be higher, but does not mean that other people can't learn music, right?

**Dharmesh Shah** (00:08:18):
It's like an acquirable skill. That's lesson number one. And lesson number two is that there is a process, and this is the engineer in me of just kind of functional decomposition of a problem to say, " Okay, in order for me to be a pretty good public speaker, what are the underlying sub-skills required in order to accomplish that? Okay, skill number one, you have to be able to stand up on stage and not pass out." That's kind the bare minimum. And so what I did over the years is to say, "Okay, I'm going to functionally decompose this skill of public speaking in front of," what I call high-stakes speaking. I've got to actually hold the audience's attention. That's part of success. So it doesn't matter what the message is, nothing else will matter if I lose their attention, which is increasingly easy to do now in kind of short attention span society.

**Dharmesh Shah** (00:09:06):
And every year I will pick a different part of the public speaking skill set and say, "Oh, I want to learn about slide design and visual expression," Not the actual design. I'm not a designer. But then the one thing that I came up that has had the most impact is humor. Then you break that skill down just like the engineer would do. It's like, okay, well there's humor writing, there's humor, execution on stage, whatever. There's standup comedy. There's like, okay, so how do you put all these pieces together? And along that journey, I came up with this... and I've always had this, I'm a very data-driven, quant based person. It's like, "Okay, well, how will I know whether something is actually funny enough or not, whether I'm losing the attention or not?" And so in preparation for one of these high stakes keynotes that I do every year, I will have my talk, I will do practice runs.

**Dharmesh Shah** (00:09:57):
I will have increasingly larger actual live audiences that I will practice it in front of. I will record those talks, everything so far. Nothing unusual yet. I will have the talks transcribed. I have custom software that I've written that will say, "Okay, here are the points at which the audience laughed." Actually audibly laughed. That's the only way it counts. And this actually... and it comes down to this metric that standup comedians use called LPM laughs per minute. And there's actually a benchmark that you can say, "Oh, well..." And standup comedians have a very, very high LPM. Business talks have a very, very low LPM. The most popular Ted talks there's a high strong correlation between the most popular Ted talks and high. So I have a goal, look, I'm going to have a minimum I want to improve. And so I have software that will calculate the laughs per minute.

**Dharmesh Shah** (00:10:48):
And so then you learn these little kind of tools of the tricks of the trades. It's like, okay, if you're solving literally for that ratio of laughs per minute, there are two ways to improve it. One is to add more laughs. Two is to decrease the number of words between laughs, right? So one of the things a software measures, it gives me a visual map. It's like, here's the entire talk broken down with little square per minute of talk, or 30 seconds, and it's like, here's what they like. It's like, "Oh, here I went one minute and 17 seconds and nobody laughed." So I have to do one of two things. Shorten that segment if there's nothing funny that can be said without being overt about it, or I have to say, "Okay, I'm going to find something funny to try to inject into this and kind of break it up."

**Dharmesh Shah** (00:11:29):
Anyway. And that's a long way of saying if I can get up on a public stage and learn that particular skill, anyone can learn just about anything. It just comes down to practice and measurement and just getting incrementally better over time.

**Lenny** (00:11:45):
Wow. I feel like I've just learned so much about you and how you think just from that question and how you approach this problem. On this humor piece, I'm curious, any lessons to share on how to be funny?

**Dharmesh Shah** (00:11:56):
One of the kind of tricks of the trade in humor, and you learned this particularly in stand-up comedy, but just any comedy. And I just hadn't thought of it this way, is that... and this is very tactical, but it works and it's a very easy thing to apply. So let's say you're looking at... and most of us, we're not stand-up comedians. We're not going to tell jokes in a classic sense.

**Dharmesh Shah** (00:12:14):
And even stand-up comedians don't tell jokes. They actually have stories and they happen to have a punchline or two. So, two tactical pieces of advice. One is when you're telling the story, whatever the funny bit is, those have to literally be the last words of that particular segment. So once you deliver it, then you have to stop talking. And the reason you have to stop talking is the audience needs about a half a second to react, and then they want the permission to laugh. And if you're continuing to say words, it's going to make them feel awkward and it's going to be less funny. So even if moving a phrase in the sentence that you're about to say, it's like, "Well, that sounds kind weird to put those set of words at the end of the thing." Do it anyway even though it's awkward because it will actually work better.

**Dharmesh Shah** (00:13:00):
That's kind of tip number one. Tip number two on LPM generally is that having stories such that you can spend the time setting up the story, but then have multiple funny bits, multiple punchlines, because you've already made the investment. I've said 75 words in order to set up this context, say something funny that's amusing, that's whatever. Say some more things. You already have the... and you'll see the stand-up comedians do this all the time. And then say something else that's funny because a laugh is a laugh. Doesn't really matter that it was still the same story. So leverage the investment you've already made in establishing context and scene, and then just squeeze more humor into the end of it in punctuated fashion.

**Lenny** (00:13:37):
I feel like the entire podcast could just be this one thread, but I need to move on to other topics.

**Lenny** (00:13:42):
One quick question. So you said ideal laughs for a minute is two to three-ish? Is that what you said?

**Dharmesh Shah** (00:13:46):
Yeah, two plus is hard for a business talk because stand-up comedians, the reason they can do it is that's all they're really solving for is LPM. In business talks, you actually have another agenda other than just being entertaining. You actually have a message. You're trying to promote something. Promote an idea, promote a product. So anyway, in my mind, for most normal circumstance, even if you can get above a one, 1.2, 25, you're in the top decile in terms of top, generally given by non-professionals.

**Lenny** (00:14:19):
Wow, this is incredible. So after every talk, you run this transcript and audio through your program to see how you did.

**Dharmesh Shah** (00:14:25):
Yes, yes.

**Lenny** (00:14:26):
And are you ever going to publish and release this program? Because that sounds really cool.

**Dharmesh Shah** (00:14:30):
I have this notion of what I call SoloWare. And SoloWare is exactly what it sounds like. It's software built for exactly one person, and in my case, that one person is me. And so I've been doing this thing for 30 years right now. I just build things that I would myself find useful. And the nice thing about Solo, one of the many nice things about it is that the UI is only for one person. You don't have to do a whole lot of testing because it only needs to work for one person. And the most important thing is that because it's only for one person, if it stops bringing utility, you can just turn it off. You can just stop using it. Versus if you have users, even 10 users, and you put it out there and then people would be disappointed if you took it down for whatever reason, that's kind of hard.

**Dharmesh Shah** (00:15:10):
So anyway, that's the calculus I go through, "Is this useful enough to enough people where it's worth the calories of making it non-solo ware, making it even micro-ware?" I just made that up, but yeah.

**Lenny** (00:15:22):
Wow. Okay. Let's see how the YouTube comments react and how many people would want this and slash pay for it.

**Lenny** (00:15:28):
Let me go in a slightly different direction. We talked about how you have no direct reports, you've never had any direct reports? I know that's somewhat related to a piece of advice you often share, which is to lean into your strengths and to not do things that you're not amazing yet. So can you just talk about why this is the case? Why don't you have any reports? And then I think this idea of just strengths and the importance focusing on strengths.

**Dharmesh Shah** (00:15:52):
Yeah. I'll tell you the quick story as to how this came about. My co-founder and I had the founding meeting for HubSpot. This is the week where we've decided we're going to do this, and then we have this list of questions or topics for the founders discussion. One of them, and I think I've published a list, these are the questions all co-founders should ask each other in that kind of early period. One of the ones it's like, okay, well who's going to be CEO? This was an easy one because I had been CEO twice before and had figured out I'm not that good at it. I actually suck at that. And one of the reasons I suck at that is that part of the CEO role is being good at managing people. It's not just about leading and having a vision or whatever. Actually have to do the management as a craft. And so, that part I already had in my head.

**Dharmesh Shah** (00:16:40):
I think Brian, my co-founder, already had in his head that with... That's how this... that was a very quick conversation. And in the moment, as soon as I had that win behind me, it's like, "Okay, well I don't want to be CEO." Brian wanted to be CEO because he'd never done it before. I'm like, "okay, that was easy." And then I said, "Oh, and by the way, I don't want to have any direct reports." It just popped into my head as an idea. I had not pre-planned it or anything, and I sprung it on him.

**Dharmesh Shah** (00:17:04):
He's like, "Okay, well..." And the reason is because I have learned that I suck at management. I'm a reasonably smart person. I think I could become passively okay at management with some training, with some coaching or whatever. I don't want to spend any years of my life becoming passively okay at something. I would rather take those same calories and take the things that I'm good at that I actually enjoy. And those things are highly correlated. You tend to be good at the things you enjoy. You tend to enjoy the things you're good at. And Brian was like, "Yeah, sure." And then I'm like, "No, no, Brian, you don't understand." Because then I was like, "There's going to be a time in the company." He was like, "Oh, our VP of engineering just quit. Just be interim with something or whatever and have this team report to you until we find.." It's like, "We're going to have those things and you're going to have to promise to me we're not going to do that. We're going to..." It's like I am not going to have direct reports.

**Dharmesh Shah** (00:17:53):
And we had that kind of heart to heart conversation, and it was one of the best decisions I've made both for myself and for HubSpot. Had I not made that decision, I'm a startup guy, I don't know that I would've survived at a company at HubSpot scale. And right now I can honestly say I'm having a better time at HubSpot now at 7,000 people than I was having at 70 people. And the reason is, I get all the upside of scale, which is I can make big bets. So we can have long-term things and plans, whatever, and plan for global domination without the downsides of scale, which is, "Oh, you're having to manage all these people and all the kind of mechanics." And that's hard. It's a hard skill to have.

**Dharmesh Shah** (00:18:33):
I appreciate other people that have it. I don't. And so I get all the upside with very little of the downside of scale, and that's what kind of keeps me engaged and energized and happy at HubSpot. So I think it's been both productive for HubSpot and good for me.

**Lenny** (00:18:46):
I love that this is an example of how you can build a company the way that you want to build it. You don't have to do it the way everybody else has done. I imagine there's a lot of challenges to this too, but I think it's inspiring to just like, "Hey, I'm going to design a company the way I want to build it."

**Dharmesh Shah** (00:18:59):
Yeah, it's amazing what you can get away with in terms of shaping the universe to your liking. I think people automatically assume that things have to go a certain way, especially founders and first time founders.

It's like, you should at least try it. It's like, "Okay, well I want to do it..." First of, I'll give you another tactical example. Both my co-founder and I are night people, not morning people. Just happens... I didn't pick him because of that. We learned that later. And so we made it just from the early days of HubSpot in the early years at least, we're like, "No meetings before 11 A.M. Period." That was it. And then we adjusted it, I think maybe three or four years and we're like, "All right, we could have meetings before 11:00 AM. You just can't invite one of the co-founders to it. So you're welcome to meet amongst yourselves if you choose to do so." But anyway, yeah, it's little things.

**Lenny** (00:19:50):
That's an amazing rule. I have a personal rule where I have no meetings before 3:00 P.M. because I don't work anywhere. I can more so create my schedule, but the idea is I create this deep work time in the beginnings of the day.

**Dharmesh Shah** (00:20:01):
I love that. Yeah.

**Lenny** (00:20:02):
Okay. So you talked about you're a startup guy. At the same time HubSpot is approaching its 10 years of being a public company and I think 18 years since founding.

**Dharmesh Shah** (00:20:13):
Yup.

**Lenny** (00:20:13):
I'm curious what lessons you've taken from that experience being someone that's clearly startuppy person, being an exec at a very fast growing and large company. And I'm thinking from the perspective of a founder who's maybe thinking about starting a company or starting company, what advice you might have to share for them? And also for people in the exact role today?

**Dharmesh Shah** (00:20:34):
A couple of things. One, since we are publicly traded down, this doesn't get talked about enough. I'm going to go and get this out there and use this as a platform to get this message out, which is I think too many founders, once they get to a... They are very apprehensive of going public and going through the IPO process and being a publicly traded company because they think... I mean, that's like the beginning of the end. "It's going to change everything and my life is going to suck."

**Dharmesh Shah** (00:20:58):
And I think they're over indexing on what they think it's like to be a publicly traded company. In my own personal experience, and Brian, my co-founder would attest to this. And yes, there's certainly a tax or things we have to do now as a publicly traded company that we didn't have to do as a privately traded company. But there are actually benefits. For instance, if you kind of venture back in private, let's say, you're sort of at a little bit the whim of the market and how VCs perceive your category and all these things or whatever. And you get, every now and then, when you're out raising a round of capital, you sort of get marked to market. Now here's sort of what the valuation is based on what someone's willing to kind of fund the company at. One of the nicest things, and this is underappreciated, is that we know right now what the market values HubSpot at. I can tell you that any business day of the week. And there's a niceness to that. And that's the other thing I tell folks within the company is that the valuation, which is we're in a relatively efficient market. The public stock market is a relatively efficient by the economic definition of the term, in efficient market. So, the valuation will oscillate around the value.

**Dharmesh Shah** (00:22:04):
So, if you focus on creating values, here's what we're actually building, valuation will sometimes be higher than you deserve, sometimes will be lower than you deserve, but over the fullness of time, those two things will move in lockstep, right? That's been demonstrated. That's what happens. That's almost a definition of an efficient market is that information moves essentially, and then the valuation catches up with the actual value.

**Dharmesh Shah** (00:22:25):
But here's the other social reason why I think founders should go public, which is... So in HubSpot, and I hadn't thought about this so I'm not going to take credit for being this generous, magnanimous person, is that in our first pre-public years, I think we were eight years old when we went public, we had created roughly a billion dollars in market cap, give or take. We hadn't been a unicorn. So it was slightly below when we went public. So HubSpot was never a unicorn because that's private privately held company, over a billion.

**Dharmesh Shah** (00:22:55):
In the subsequent years, we went from a billion dollars in market cap to 30 billion, which is roughly what it is now. That first billion of market cap creation, a very small number of people got to participate in. The rest of the $29 billion in market cap, everyone, every public investor got a chance to participate in. And so I like the idea of, okay, well you believe in your company. There's lots of people that believed in HubSpot. It's nice to let them kind of participate. Our customers, our partners, our well-wishers, and they can sort of now have the upside. And you don't get that in the private markets because it's a very closed... you can't just buy shares in every private company you like. I wish that existed, but it doesn't. So, it's a way to let the market at large participate in your growth earlier.

**Lenny** (00:23:42):
What about from the perspective of just staying excited and motivated and finding things to take on, is there any lessons there for founders that are, I don't know, at a larger company and just, "Okay, this is going to help me stay excited about what I'm doing"?

**Dharmesh Shah** (00:23:57):
Yeah, I think this is... and Bezos exemplifies this, I think the best, which is, just because you're a public company does not mandate that you do certain things. All that's necessary is the kind of transparency that says, "Here's what the company is doing, here's what we're about, here's what we're solving." And he had this with his very first annual shareholders letter, which he obviously writes every year, which is, "This is what Amazon is about, we're solving for the long term or whatever." And he didn't say this in a snarky way. If you reread the letter, but if you read between the lines, it's like, if you don't agree with this approach, you should not buy Amazon shares. It's like, it's a completely optional thing. "You don't have to buy it, but this is the way we're going to run the business."

**Dharmesh Shah** (00:24:39):
And he stayed true to that. And you can continue to do that. I'll tell you one quick story. This is once again, the anti-dissuade founders that might be reluctant to go public. So one of the core values at HubSpot that's been part of the culture from the early early days, literally days, is transparency. And so, one of our mechanisms by which we implement transparency is we've had this thing that says all information within HubSpot is equally shared with everyone in the company, period.

**Dharmesh Shah** (00:25:11):
Everything. So our balance sheet, what we raised capital at, whether we're going to be able to meet payroll in six weeks, all those things, everything was transparent all the time. And with two exceptions. One is if it was illegal for us to share, let's say if we were looking at some acquisition or whatever and we had non-disclosure or the information was ours, not completely ours to share. And one example of that was salaries. So, we feel that salaries are co-owned both by the company and by that individual. And it's not up to us to share someone's salary if they don't want to do that. Okay. All right.

**Dharmesh Shah** (00:25:45):
So, we had that transparency and then as we go public, we have this meeting with our investment bankers and our lawyers. This is in the IPO prep process, and they sit down and as part of this all day meeting, one of the questions is like, "Okay, so who are your designated insiders?"

**Dharmesh Shah** (00:26:00):
So who are your designated insiders? Brian nor I had ever taken the company public before, we're like, "We don't know what that is." It's like, "Oh, it's this group of people that will have access to all the financials and will know." And we're like, "Oh, okay, so how long is that list?" And they're like, "Five or six." And so then Brian says, "Seven? Seven?" And they're like, "Yeah, you can do seven." And I say, "Eight? Could you do eight?" And so we discovered through that mathematical induction process, is like, "If it's true for N, is it true for N plus one?" Is that there's no actual legal limit to how many insiders a company can have.

**Dharmesh Shah** (00:26:38):
And so we ended up doing, literally the day we went public, is we designated every single employee to be a designated insider. So that allowed us to maintain the transparency thing because there was no rule that said you could only have 5, 6, 10, and there was hundreds of people. And we did not make it optional. We didn't say, "Oh," because there are downsides to being an insider. There's windows within which you can't trade, there's stuff. But we're like, "Okay, well, we believe in transparency. Everyone's going to have access to it, and it's not an opt in kind of thing. You're like, "This is it. We're all in it together."" And we still do this to this day, even at 7,000 people, everybody's an insider, so we can still share all the financials with everyone all the time.

**Lenny** (00:27:18):
You have many contrarian opinions is what I'm getting from this conversation already. And the way you're pushing the envelope on, "Can we have 10, can we have 1,000?" I'm curious if there's anything else there of just contrarian ways of running a company. I know there's probably many, but what comes to mind?

**Dharmesh Shah** (00:27:36):
So one of the phrases we like to use in our industry overall is this notion of first principles. I don't know who popularized it, but it's used a lot. I'm not going to say something snarky, but I think most of the time first principles is used, it's actually used incorrectly. Because the way first principles is supposed to work, as Elon would probably describe it, is that it's not first principles like first principles of what we believe, these are our core first principles in the company, it's the first principles of the universe. It's not what you believe is true, it's what do we all collectively know to be true to the best of our knowledge? It's science. That's physics. Like the first and second law of thermodynamics, those are first principles. All the layers on top of that are things that you think are true, are your assumptions or the decisions you made, and that's fine. You may have made some decisions.

**Dharmesh Shah** (00:28:23):
For instance, transparency is not a first principle, it's a founding principle. It's not everyone should do this, it's a completely core thing. And so yes, I can be a contrarian, but you have to limit the dimensions. So the number of things that you're a contrarian on has to be greater than zero, but not too high. So what I think of is high conviction, low consensus bets. So high conviction is, "We really, really believe this," and low consensus is that most other people don't. And there are other people have phrased this differently. I think Peter Thiel actually says it more simply and elegantly, which is, "You need to be right about something that other people think you're wrong about for a very long time." And you just have to be right.

**Dharmesh Shah** (00:29:09):
So one of the early high-conviction decisions we made at HubSpot was that we were going to focus on SMB as our target market. And I'll make a case both for SMB and for having a high conviction bet. It doesn't have to be your target market, but something. Once you make that bet, because it's low consensus, it's going to be hard and necessary for you to have the conviction because everyone disagrees, including your board, including your investors, including potential investors. So we have that for literally all 18 years of HubSpot's history. We have always had the... All during the IPO roadshow, it's like, "Yes, we get that you've on SMB, but so what's the path to the enterprise?" No, you don't understand. This is not a go-to market strategy. This is not like, "Oh, we're going to conquer SMB first," this is not Bowling Pin, this is not Geoffrey Moore, this is a, "We are here for SMB." That's what we're doing.

**Dharmesh Shah** (00:29:58):
And so we maintain that conviction for a very long time, and that helps you make other bets that are secondary. But you don't want to reinvent everything. So I'll give you an example of something that we had in the early years of HubSpot that we kind of forwent. So in the early years of HubSpot, we're like, "Okay, we believe in a flat organization." One of the manifestations of that flat organization is we had no titles in the company. Nobody had a title. So even though you had business cards, whatever, we had no titles. If you introduce yourself in a meeting, and we had this up to hundreds of people, when you introduce yourself like, "Oh, I work in product, I work in engineering," whatever, it's not like, "I'm director of X or VP of Y," because that, as a thing, didn't exist.

**Dharmesh Shah** (00:30:41):
Then as we scaled, we came to the realization that there's actual value that people ascribe to titles. And the reason they ascribe value to titles is because there are rumors that there's life beyond HubSpot. I couldn't believe it. "What? There's a life out there outside of HubSpot?" It's like, " Yeah, looks like." And then when we go to the Thanksgiving dinner or whatever, and I talk to my aunt, I need some shorthand. It's like, "Oh yeah, I got promoted to director. I got..." Just to show some progression because it's a signaling device.

**Dharmesh Shah** (00:31:11):
And in this life beyond HubSpot and outside of HubSpot, it's like, other people are also going to want to know where I was in... It's like, "Okay," and this was the winning argument. I love this argument. Because we had a daylong meeting on talking about this one topic. And the winning argument was, "Dharmesh and Brian, I recognize why we don't have titles. I recognize this." And so they made the case of, "Yeah, there's value. And by virtue of you not giving us titles, that means you're having to compensate us in an economic sense in other ways. So you're losing out because it's like, is that value high enough to not do that?" That's a strong case.

**Dharmesh Shah** (00:31:50):
And then we had it down to three choices. We're like, "Okay, well," we could have chosen to just stay firm with still no titles. We could have said, "Okay, we're going to have classic titles." Then I had the option on the table of, "Make up your own title." You can be grand poobah of X, and that can be your... And then we ended up making the decision to go with classic titles because that actually served the need of, there's a benchmark, there's a standard, otherwise it doesn't mean anything. So having made-up titles is pretty much the equivalent of having no titles because they lack any meaning anyway. But that's one of those things that, okay, you iterate, you change things as they go.

**Lenny** (00:32:25):
Yeah. I think there's so much to this, "Let's just try things differently. Okay, that didn't work. Okay. It's fine. We're just going to do what everyone else is doing here." And then often you discover a thing that, "Okay, this is actually better."

**Dharmesh Shah** (00:32:36):
Yeah.

**Lenny** (00:32:36):
Just to understand, when people have no titles, so someone say as a product manager, do you call them a product manager, or just like, "I'm an employee at HubSpot, I have literally no title"?

**Dharmesh Shah** (00:32:45):
At the time, it was no title. And now we have classic titles, so we have levels of things and-

**Lenny** (00:32:50):
Yeah. But back then it's like, "You're just here-"

**Dharmesh Shah** (00:32:50):
No title. Literally no title.

**Lenny** (00:32:50):
"... we don't know exactly."

**Dharmesh Shah** (00:32:51):
No title.

**Lenny** (00:32:55):
I saw somewhere that you paid everyone $5,000 monthly as their salary at the beginning of HubSpot, including yourselves for a long time.

**Dharmesh Shah** (00:33:00):
Yes.

**Lenny** (00:33:01):
Is that right? Okay.

**Dharmesh Shah** (00:33:02):
Yep.

**Lenny** (00:33:02):
Another fun fact. How long did that last, by the way?

**Dharmesh Shah** (00:33:04):
I'm trying to think back. It's a long time ago. I want to say probably the first year, year and a half.

**Lenny** (00:33:11):
Amazing.

**Dharmesh Shah** (00:33:13):
One of the things that, and this is one of the core... And not everything that we... Obviously not everything was right, but not everything is applicable to other companies. But there are some things that I think are, and one of the things that I think are applicable is just this need to solve for simplicity. It's like the simpler you can make things in the early years, the better off you generally are. And this is going to sound weird, so how we wound up with transparency is not because of some moral, it's like, "Oh, everyone deserved to have this," and this is the truth, so it's not some moral position. It was a, when we hired the first employee, and both Brian and I [inaudible 00:33:54], when we hired the first employee, we had to make the decision, it's like, "Oh, so what files do we give them access to and what..." And so Brian is just like, "All of it. Nothing to hide. Why would we do that?"

**Dharmesh Shah** (00:34:09):
And so then we thought out... And then the output of that was like, "Okay, well, A, binary decisions are much easier than non-binary decisions." It's like, "Okay, everything or nothing is much, much simpler." And then it's like, "Okay, well, if it works for Employee Number Three in the company, why wouldn't it work at Four? Why wouldn't it work at Five? Why wouldn't it work at 50?" And we just kept doing it because it's like, "Okay, well, until it breaks, we'll just keep doing that." And this applies to so many different aspects of HubSpot, but as we try to start with the simplest possible thing that might work, and then, if necessary, add the complexity, add the things or whatever. Even our original, this is actually the tactical thing that everyone should take away, especially early-stage startups, very first HubSpot office has exactly four tables because aspirations for growth, because we were in a co-working space, so, we lived in WeWork back in the day, here in Cambridge, Massachusetts.

**Dharmesh Shah** (00:35:04):
And so we had four chairs, and the only distinguishing characteristic of the four chairs, there were two chairs that were by the window, two chairs, not by the window. Okay, great. Hire that first employee. Other decision we have to make is like, "Okay, well where do people sit?" And so this one is like, "Well, it feels unfair to us that we would just get the window seats or whatever." It's like, "Okay, we believe in a flat organization, why?" And so what we did is we said, "Oh, we'll just do a lottery." And it's not like, "Oh, whoever pulls the thing gets the window seat." Whoever pulls gets to choose from the remaining seats, because different people ascribe different utility to different seats. It's like maybe you don't want a window seat. Maybe you like the darker corner, whatever it is.

**Dharmesh Shah** (00:35:42):
And so we did that with employee number one. Then we did that with employee number two, and we did it every time we hired a new employee, we would do a seat shuffle. We're going to do the lottery, we're going to go down the sequence, and of all the seats, that was the algorithm. And our investors were like, "Oh, that's cute and that's funny. It's not going to work at 15, 20 people. It's not going to work at 50." It worked at 25 worked at 50, worked at 100, worked at 200. We updated the algorithm, we did some local optimizations, which we said, "Oh, there are some groups that should not be next to other groups because engineers like quiet time and salespeople don't, and so we're going to try to optimize a little bit." So it's not completely random anymore. Now it's like within this part of... Well, we still would do it. Then we said, "Okay, we're not going to do it for every hire, we're going to do it every quarter." And that stood, by the way, for hundreds of people, that mechanism still worked. It's like it's... Yeah.

**Lenny** (00:36:37):
Oh my God.

**Dharmesh Shah** (00:36:38):
So the moral of the story is, that one decision of simplifying, can you imagine the amount of politics we avoided? In corporate America, the amount of calories spent is like, "Well, your office is bigger than my office. Your desk is one inch higher or one..." Like, "No." It's like all of that just went away by virtue of that one decision. And we don't even know, it's incalculable, honestly, how much grief that saved us. And then there's all other side benefits to it in terms of people getting to know each other better, better chemistry, there's lots of good upside, but just the simplicity is almost always a better answer.

**Lenny** (00:37:13):
I love that everything often comes back to some algorithm you've developed or this N-plus-one approach of, "Let's just keep going until something goes wrong." This is amazing. I'm excited for many more of these hilarious, amazing examples of how you did things differently. You've been talking about simplicity. The opposite extreme is, you could say, entropy, and someone told me that you have this concept that every leader in every business is fighting the second law of thermodynamics, which I believe is entropy.

**Dharmesh Shah** (00:37:42):
Yeah. Well, the actual law is within a closed system, entropy increases over time.

**Lenny** (00:37:47):
Okay.

**Dharmesh Shah** (00:37:48):
Yeah.

**Lenny** (00:37:48):
Okay.

**Dharmesh Shah** (00:37:49):
We don't have to get into the [inaudible 00:37:50] of this.

**Lenny** (00:37:50):
No, I love this.

**Dharmesh Shah** (00:37:50):
I'm not a physics guy.

**Lenny** (00:37:51):
No, we're getting to the first principles of everything. Talk about that. What does that mean when you... And what does that look like when you're running a business?

**Dharmesh Shah** (00:37:59):
Okay, so in lay person's terms, the second law of thermodynamics, I'm paraphrasing here, is that, "Over time, unless you intervene, everything goes to crap." I'm paraphrasing. Which is, essentially, the amount of disorder and randomness in a system is going to increase over time. You see this like when you break an egg, the molecules don't come together and form an egg. That doesn't happen. It's always the other way around becomes disorderly and more random. That's the second law of thermodynamics. And this happens in companies as well, and it happens in code, almost every level of abstraction, you will see some variation of this. And so the way I think about this is that in the early stages of a company, you're essentially fighting to survive. Just trying not to die. That's the thing. Okay, priority one, don't die. In the second phase of a company, you're trying not to stagnate. But it's like you still want to be able to drive growth and be able to do things like, "Okay, we managed not to die, because stagnation is essentially death, so we're still trying not to die."

**Dharmesh Shah** (00:38:58):
But then the third stage is you're fighting complexity. And that's the thing that you will crumble under your own weight over time, absent some external intervention. And you see this happen all the time, and it shows up and manifests in different ways, which is, everything gets more complicated. You need more layers of management, more headcount, more this, more that, more everything. Everything becomes harder. Margins go... It's like just bad things start to happen, you become slower. And that's the eventual... It's a slower death, because you're at more scale now, but it's still eventual death. Complexity does kill companies. Maybe not as quickly as other things, but much more reliably than other things.

**Dharmesh Shah** (00:39:38):
And so this is why it's never too early to plant the seeds of simplicity, put them in there, make that part of the culture of the organization. And we have a thing that are part of our culture and guiding principles around what I call "fight for simplicity." It's literally those three words. And the message we're trying to convey is, "Simplicity is worth fighting for." That's thing number one, it's important, but the other one is that it requires fighting for. It does not happen, and it will be a fight, because the universe is working against you. And it will take calories to fight for that simplicity, because everything, even well-intentioned people, will introduce complexity because that's the natural way of the world. We want more tiers in our pricing, we want these knobs and dials in the product, we want these more... It's like all of it tends towards the second law and entropy increases. So anyway.

**Lenny** (00:40:28):
I love this. The algorithm for seating is a good example of this. Is there any other examples, either in the product or strategy, where you pushed for simplicity and that ended up being right?

**Dharmesh Shah** (00:40:39):
Yeah. So on the product side, in the early years, and Brian gets credit for the actual implementation of this. So we had a relatively broad product, and we can talk about that, pros and cons of that even in the early years, but we were solving for simplicity, and we got this from Apple, we can talk a little bit more about genesis of this, but we had a rule in the HubSpot product as the product grew in those early years that every time you added what we thought of as a knob or dial, called a feature, you had to take one out somewhere else. That's a net amount of... And this is a very coarse measurement. It's like, "Okay, well, not every radio button, checkbox, drop-down, whatever menu item that you put in your nav is necessarily equivalent, but it's better than nothing. It's better than having no constraints.

**Dharmesh Shah** (00:41:27):
And so once again, this goes to the binary thing, it's like it just at least forces you to think about it, versus the... The other mistake I think people make in product all the time is that we measure the cost of a feature based on the, usually, or even a new product, based on the cost of implementation. That's the first-order thinking, it's like, "Oh, it's going to take six months to develop, it's going to be Y engineers and Z designers or whatever." Second-order thinking is thinking through the maintenance of that feature. It's like, "Oh, it's not just the first version that goes out, it's like now we have this code base and we have to support and improve or whatever." I get that. The third-order thinking, which I think is the most nuanced, and it turns out to be the most important, is the other costs that complexity adds.

**Dharmesh Shah** (00:42:12):
Okay, we'll come back to this. So when you go from product number one to product number two, it's like, "Okay, product number two is going to cost us this much to develop, it's going to have this risk associated with whether it's successful or not, all these things. So there's going to be this carrying cost for product number two." What companies don't think through is that that is... And the maintenance of that, it's like, "Oh, we're going to need a team to maintain that new product." No, what actually happens is that now when you go from product one to two, you have added dimensional complexity to your business.

**Dharmesh Shah** (00:42:43):
What I mean by that, it's not an incremental increase like, "Oh, we went from one to two," it's like, now every decision you make has to be made through the lens of, "Now we have two products. We just hired an engineer, do they work on product number one or product number two? We're going to launch a marketing campaign. Do we spend five minutes talking about product number one and two minutes talking about product number two? How do we do anything?" Every chart you look at in terms of the growth, revenue per whatever, it's all of it. Now, every chart that you ever had now has to be sliced by product one and product two in order to really capture that precision.

And so now you have this new dimensional complexity that you just hadn't planned on. And this applies, once again, every level of abstraction. So everything you do in your business should factor in the long-term cost of that complexity. And it should be worth it. Of course, you need, and I can make the case that you need to build product number two and product number N, N plus one over time, but you should be mindful about the cost of that complexity. [inaudible 00:43:39].

**Lenny** (00:43:39):
Is there something you've done to help operationalize that? Because I imagine everyone's like, "Yes, this is great. Don't do too many things. Simplify." Hard to do when you're like, "Oh, we got to drive growth. We have this awesome idea, we have this opportunity, we have a competitor." I know that this is part of the culture, so maybe that's the answer, but how do you keep people to actually this principle?

**Dharmesh Shah** (00:44:01):
So it's really hard, I'll say that. And things that have made it easier, it's a little bit idiosyncratic to HubSpot, so part of what has made it easier for us to keep things simple is the early constraints we impose. And we didn't know this at the time. So because we're building for SMB, we have a freemium product. All right, well, when you're doing that, there is literally a limit to how much complexity you can add, because we don't have an army of people that are going to spend in 18 months implementing something. We have to be able to support a product that's free. That's hard to do. It has to be simple enough that someone can get value from this thing. And so there's these self-imposed things.

So the lesson I would carry away is come up with systematic ways and mechanisms, as Amazon would call them, of putting guardrails and constraints in to the degree that you can. Because you can put words on a page and try to infuse it in the culture, it's like, "Oh, we believe in simplicity, we fight for this," and you can have meetings and you can get up in all-hands meetings and reinforce that, which I encourage you to do, but a really, even a reasonably well done system will outbeat any other mechanism that you can try to put it [inaudible 00:45:14]. Those things deteriorate over time. It's hard to scale them. So I'm a big believer in systems and imposed constraints versus-

**Lenny** (00:45:22):
I can't help but talk about this SMB piece, because I do a lot of angel investing, and classically, companies that focus on small businesses are very challenging, because getting to small businesses at scale is very hard. They're often more old school, not early adopters. You sell one and that's just one small customer, and they're not going to upgrade and roll it out to this large group, and they're not going to increase spend very quickly. For founders that are exploring SMB or trying to win something SMB, any advice other than just, maybe the advice is, "Probably don't do it, it's very hard"?

**Dharmesh Shah** (00:45:58):
No, my advice is absolutely do it.

**Lenny** (00:46:00):
Amazing. Great.

**Dharmesh Shah** (00:46:02):
A, because it's hard, and we'll talk about that, but B, okay, so I'll tell you this quick story in terms of how we chose SMB. And so my co-founder and I met in grad school, and he had done software, he was on the sales and marketing side, I was on the product engineering side, didn't know each other before grad school, and we met there. But one of the things, as we were canoodling on possible ideas of working together on the startup, we said, "Oh," we had done both an enterprise software before, the opposite of opposite of SMB. And there are definitely challenges with enterprise software. One of the biggest one is that life as an enterprise software company sucks as a startup. Sales cycles are super long, feedback loops are super long, you have to have sale, there's all this kind of... You have revenue concentration, which means you don't completely own your product roadmap anymore because whoever's writing the biggest check will ask for these three things and it's really hard to say no, especially as a startup, all these things that go along with that.

**Dharmesh Shah** (00:47:03):
It's like, "Okay, we sort of know that game." At the other end of the spectrum, you have consumer startups. It's like, "Okay." The problem with consumer startups is they have very bi-modal outcomes. It's like either you can be super successful, the next Meta, the next Google, the next whatever, or it's going to be to zero. It is very rare that you have, "Oh, you made a few million bucks or whatever." Because either worked, because this is a massive market. The case for SMB is you have almost the best of both worlds. You have the nicety of enterprise, which is, "Oh, I can solve a product and people pay me money for it. I don't have to be advertising subsidized, I don't have this bi-modal outcome. I can build an incrementally more valuable business that's measurable."

**Dharmesh Shah** (00:47:43):
So we're "Oh," we went from a 100K in ARR to a million ARR, to 2 million ARR because we're a business software company. But it has the benefit of consumer because there's millions of them out there to sell to, and there is no revenue concentration. You do control your roadmap. You have very short feedback loops. You can try pretty much anything that you want because there's... Like, "Oh, we have 50 customers. If we do this and screw it up, it's like there's 5 million more." Don't intentionally screw it up, but you can experiment, you can take on risks. And by the way, when HubSpot started SMB, it was literally a hundred times harder to succeed in SMB. And we could not raise capital. It was so hard because the common argument was there literally is exactly one company in the history of software that's made a global brand, billions of dollars of market that was into it. No one else had ever created SMB-focused software company before.

**Dharmesh Shah** (00:48:37):
And we're like, "Yeah." It's like, "We know." But the nice thing about it is once you figure the physics of it out, because it's so hard to do, you end up, and this has played out, now there's lots more proof points. There's Shopify, there's a bunch of companies that have succeeded in SMB. But one of the things about SMB is that in the software market... By the way, all I know is software. That's the scope of my experience, is that in software, there's what I call reverse gravity. That over time, the market will always pull you up. Because what ends up happening is that smart founders and smart management teams will look at the numbers and say, "Oh, well, as it turns out, our bigger customers stay with us longer, pay us more, often have higher NP, all these things."

**Dharmesh Shah** (00:49:27):
And so if you allow yourself to be led by that, which seems like a reasonable, smart thing to do, you will get pulled up in the market. And because of this reverse gravity, almost every company winds up being, every successful software company, ends up being an enterprise software company over the full list of time. That's what you see. The byproduct of that reverse gravity is that every software company ends up being an enterprise software company, so you end up competing with literally everyone. In the SMB world, you're only competing with the people stupid enough to stay focused on SMB, or try to do that. It's a harder thing to accomplish, but once you figure out the physics of it and make it work, it's a much more sustainable, much more fun model. So I encourage, particularly startups, and maybe you fight reverse gravity for some period of time, and maybe... But at least start there, try to make it work, until it gets really, really, really painful, and then try some more. It's like there's just so much value in SMB. It's that idea.

**Lenny** (00:50:29):
Okay, so this theme has come up a bunch already in our conversation. I asked Chris Miller, previous podcast guest, what you're amazing at and what I should talk to you about. And he said that you're very good at zigging when other people are zagging, and zagging when other people are zigging. And I think that's already come across in our conversation. I guess, is there anything else along those lines that you think might be helpful to people, in terms of how you think about that, or examples of that in action?

**Dharmesh Shah** (00:50:52):
So this comes down to high-conviction, low-consensus bets. And so we had like three things that we were zigging... And by the way, it's not just me. My co-founder and I both have that zig versus zag. And we ask ourselves this to this day, it's like, "Okay, well we understand this is the way the world moves, this is the way it's normally done, but have we considered this completely? And I'm not saying we should do it, but have we considered this alternate path?" So I would encourage you, at any stage of the company, you don't necessarily have to do the zig versus zag, but you should at least know what the zig would've been and have talked it through. So that's thing number one.

**Dharmesh Shah** (00:51:29):
Some of the best startup advice I've heard and I've ever given is, "Startups should focus on one thing and be really, really exceptionally world-class better than anyone else at that one thing." And one of our early zigs is, "We are going to do exactly the opposite of that." So from year one, HubSpot decided to build an SEO tool, web analytics, blogging tool, content management, all of it. And every one of those categories that we were building a product in, literally this is year one, had great products with great companies behind them. And so it's like, "Okay, well, why would you do that?" And-

**Dharmesh Shah** (00:52:00):
And so it's like, okay, well why would you do that? And the reason is that the one thing we wanted to be good at was solving for the actual customer problem that existed, and the customer problem that existed was not a dearth of tools, lots of great SEO blogging, everything, all the tools existed, but SMB specifically did not have the wherewithal to put all those pieces together. So you and I, it's like, "Oh, I can throw a website up. I can put Google Analytics on it. I can put a Wufoo Typeform format. I can do all these things. I can wire doc. No big deal. Why is this so hard?" But for most people, most SMBs, that's a science project, and so we said, okay, in order for us to solve the actual customer problem, we have to solve the actual customer problem, even if it's uncomfortable, even though it's contrarian and every instinct and every advice we've heard or given says we should not do this. We should not go that broad.

**Dharmesh Shah** (00:52:53):
But once we make that decision so that the other lesson learned, it's like, and we said this in the early years and it's gotten better since, let's say you do this, and this is the all-in-one approach, we're going to have this broad-based product. It's like, "Okay, we're going to be many miles wide and only so inches deep." One of these, and this goes back to our very systematic thinking, is like, "Okay, we're going to measure each of those individual product categories that we're now playing in. Are we in the top three in the market in that category? If the answer is yes, that means we invested too much in that category." We should not be in the top three because our value proposition is not that we are the top three blogging tools or one of the top three web analytics tools. We have the top three, whatever, our value proposition is that everything works so well together that that being in the top three and having those right features or whatever doesn't matter.

**Dharmesh Shah** (00:53:41):
Doesn't matter as much as the all-in-one. And that means we over-index on one individual category by virtue. That was one of our heuristics for being able to tell that we were over-indexed on one particular aspect of it.

**Lenny** (00:53:51):
That is hilarious. Rarely do I hear we're in the top three and we're doing the wrong thing. We are too good at this.

**Dharmesh Shah** (00:54:00):
And by the way, and we changed that over time in the startup world, and now I would argue that most of the categories we play in, we are, as the surveys would tell you that we're in the top three in each of those categories now, but at the time when we are very, very resource constrained, we were trying to be disciplined and focused.

**Lenny** (00:54:17):
We're just racking up all these very contrarian approaches to company building. I imagine people listening to this might feel like, "Okay, cool, I'm just going to build a bunch of stuff. This is great. I worked for HubSpot." Do you have any heuristics for when it makes sense to go wide and not deep that you share with founders? When do you think it makes sense versus now you should actually follow the common advice here?

**Dharmesh Shah** (00:54:37):
Yeah, so it comes down to what problem you're solving. So I think one of the mistakes I think founders make is that, especially product oriented founders, is that we fall in love with the solution instead of falling in love with the actual problem, and you need to fall in love with the problem and putting that constraint on yourself forces you to understand and at least label and define what problem you're solving because oftentimes we can describe our product or whatever, but we struggle sometimes as founders to describe the actual problem. So if you can make the case, which HubSpot did, it's like, okay, it's not like we immediately jump to that like, "Oh, we have this epiphany. We're going to build the all-in-one, do all the things kind of thing." We're like, "Oh, in actually talking to customers", we considered doing it like, "Oh, we'll just do this marketing piece."

**Dharmesh Shah** (00:55:27):
We'll just do this or whatever. It's like, no, that's not their issue, their issues it's not that these things don't exist, so if you, as a result of talking to customers and understanding the problem deeply, you come to the conclusion that you need to do more than just one thing, but then you should force yourself to have a discipline that we did, which is, here's why we're going to go a little bit broad, and here's how we're going to make sure that that broadness doesn't kill us. You have to have the self-imposed constraint. You can't have the best of both worlds. You can't say, " We're going to be all in one, and oh, by the way, we're going to be the best." No, you can't be the best. You can say, we solve this particular problem the best, but we're not going to have the best product along any of those dimensions.

**Lenny** (00:56:11):
Amazing. I love this advice.

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**Lenny** (00:57:33):
Okay, I'm going to go in a totally different direction for now and see where this takes us. I want to talk about flash tags.

**Dharmesh Shah** (00:57:38):
Sure.

**Lenny** (00:57:38):
So this is something that you came up with that came from a problem of you're founder, people come to you for feedback, you give them some random thought, and they treat that as gospel and they go do it and spending months fixing something that you're like, oh, it's just a thought. Talk about flash tags.

**Dharmesh Shah** (00:57:55):
And this is exactly the problem. It's not just, once again, most things exist at every level of abstraction. So anyone that manages people, anyone that leaves has this exact same issue. It's the megaphone issue. Someone will pass you in the hall when we had offices in halls, they'll ask you a question, and as it turns out, this is particularly true of founders. I have an opinion on everything, literally everything. So if you ask me a question I will have, it won't be thought out, it won't be right, but I will have one, right? And so the challenge is people will take that and over-index on what was an opinion, and because it's inefficient to qualify every time someone asks you something, every time you put an email out there and say, "Oh, by the way", this is just my opinion, you can put IMHO or something like that every now and then, but then people say, "Oh, that's just politeness", or something like that, right?

**Dharmesh Shah** (00:58:43):
Okay, so here's what flash tags are literally, and I live most of my life through email, but I do this in other media as well. It's like the hashtag that we all know, but it's a discrete set of them, an escalating set of what I call the dying on the hill spectrum. So here's how it goes. The bottom hashtag is hashtag FYI, and the definition of the FYI is, "I came across this interesting blog post", or "I found this news, or whatever, just letting you know, no response expected", fine, go on with your life. Next level up is hashtag suggestion. "I have this thought that came into my head because I listened to the episode on Lenny's podcast with Sam from Microsoft or whatever, and this feels like it'd be a good thing to explore, but hashtag suggestion means I still don't expect a response."

**Dharmesh Shah** (00:59:36):
"You don't have to do the thing I'm asking, but it is something that I would do if I were you, or at least I would consider if I were you." Okay, next level up is hashtag recommendation. Hashtag recommendation is, "I've thought about this a lot. I've done some research, I've done some digging, I've done some soul-searching. I would do this." It's still not a, "You have to do this, but if you decide not to do this, I would appreciate a response in terms of why you don't want to do this, what you learned in the process of exploring this particular thing, other alternatives or something." So it's like a response expected, but still not a mandate. And then the last one is hashtag plea. "I beg of you, we don't have mandates at HubSpot. I have thought about this so much to my core, in my soul, I believe this is the thing we should be doing. I'm going to plea with you to please just do this."

**Dharmesh Shah** (01:00:34):
Still not a mandate, by the way, and so now it's commonly accepted. It's on the Wiki, and I use this multiple times every day. Other people at HubSpot use it. It is remarkably effective because self-descriptive hashtags are searchable, but you can go back, and it's like, "Oh, I want to know the last five hashtag recommendations that I made, how those turn out?" There's just so much goodness that comes out of it. It's not hard to understand or describe.

**Lenny** (01:01:04):
It's really interesting that none of them are just do it. You say that there's no concept of there's no mandates, essentially. Why is that? And do you feel like people just treat plea as, "Okay, I actually just really have to do this?"

**Dharmesh Shah** (01:01:16):
So we've always had, as part of early manifestation of HubSpot culture, we believe in autonomy. Lots of companies believe in autonomy, and we try to carry that idea as far as we can, and for the most part we do that and that, and we hashtag plea as part of that. This is like we trust our people. We try to hire the best. We expect them to learn, and we still want them to have the discretion to be able to make hard decisions, and we call them DRIs. We didn't invent that term directly responsible individual. And we'll talk more about, we should talk about more about decisions and how decisions get made but the reason I do hashtag plea is that it's a soft way of a mandate without being a mandate. It's like, okay, and by the way, the number of times that happens is I can count on the fingers of one hand and still have fingers left over.

**Dharmesh Shah** (01:02:09):
That almost never gets to that because either I talk myself out of it. It's like, okay, and this goes to the, is this a hill I'm willing to die on? Right? It's like, okay, I get it. I may disagree. Is it the end of the world? Is it really going to do that much harm? And is the cost of imposing that founder card go do this? It does happen just not that often.

**Lenny** (01:02:34):
Awesome. And we'll link to that. There's a post you wrote about how to use these.

**Dharmesh Shah** (01:02:37):
It's flashtag.org If you want a quick way just to get to that blog post. I believe in domain names and shortcuts because I believe in simplicity.

**Lenny** (01:02:44):
You mentioned decision making. There's something interesting there. Talk about how you make decisions at HubSpot.

**Dharmesh Shah** (01:02:49):
Like most organizations, HubSpot historically has made decisions poorly. It is just all a spectrum. I think decisions that were the hardest things because it's hard to strike the balance, and we've evolved it over. I think we're much better than we were in our earlier years. The things we get wrong, most people get wrong, and so I'll tell you the things we get right now is that, so we're very data oriented. We like to make data informed decisions, but data doesn't make decisions, people do. So that's like thing number one. It's like you have lots of geeky founding companies or whatever. It's like, "Oh, we have a chart that says this, so we should go do that". That doesn't work, doesn't work outside, data's awesome, and we also have one position that we designate to make the decision, and that is not necessarily the executive over that team.

**Dharmesh Shah** (01:03:41):
It's like, okay, well, and they literally own that. And we didn't invent this idea either. This existed long before HubSpot, but it actually works. It's like you have to decide who's going to make a decision, and that is almost the number one decision to make, and it's like, okay, don't pick people you don't trust to make the decision, and so that's kind of thing number two. And the biggest mistake, and we used to make this much more than we make now, is, and Amazon has stated this really well, theirs is called disagree and commit. We have a slight twist on, I'll tell you why we twist it a little bit. Ours is debate, decide, unite. That's our kind of phrase that we use in HubSpot culture, but the idea here, the core premise of it is that once you make a decision, getting alignment around that decision, because there will always be at any amount of scale, people that disagree with that decision because they were debating the other side, they would of picked option A and we ended up picking option B.

**Dharmesh Shah** (01:04:42):
But it's extremely important that even when a decision gets made and we decided to do something that's contrary to the thing that you believe and would've debated for and did debate for, you lost on that particular one, fine. Hard to do, but so important, so valuable, and I'll tell you why we tweaked the Amazon one. So the disagree and commit sounds a little bit harsher than we like, which is out. It's fine for you, disagree, but then F and commit, right? It's like, okay, I get that. I'm biased. So the debate is, okay, so let's have open debate. Let's get all the options on the table. Let's actually make the decision, and then it's unite around that decision, not just, it's like, okay, let's come together around that, and that sounds more Hubspotty so anyway.

**Lenny** (01:05:33):
It is a lot more friendly. I was thinking that as you were talking, debate, decide, unite versus disagree and commit, and then there's have backbone in that one.

**Dharmesh Shah** (01:05:42):
The other thing I'll tell you, this is partly HubSpot thing with partly a me thing, and this will not surprise you at all, is I like to think systematically around decisions, and so I'll give you an example. The question I ask myself when faced with a decision or a thing that I'm trying to do is, "Okay, if I could write Python code of Python function to come up with an answer to this, what would be variables or the coefficients", okay, let's say you're not, if you were making Excel spreadsheet to make this decision, what would the columns be? All right, you don't have to decide the weights, but at least decide the factors. Then the next step is like, okay, here are the factors that I think matter in the making of this decision. I'm going to decide between these seven options. Here are the things I'm going to look at.

**Dharmesh Shah** (01:06:33):
You would do this for picking a school to go to, or it works and you don't have to take it to the nth degree, but the exercise of going through it's like, "Okay, well step one, if I can just identify the factors that I think should impact this decision, that's an 80% win right there." Not because it's just in head. If the team works collectively to say, "Okay, here are all the factors that I think should contribute to the making of this decision." Then number two is, okay, we can't assign exact weights, so we can't write the Excel formula just yet or the Python code, but can we at least stack-rate the factors? This factor is more important than that factor. Now you get a closer sense of approximation. You're still not going to use the spreadsheet to make the decision, but the human making a decision has much better information they had than pre-going through that exercise.

**Dharmesh Shah** (01:07:21):
One of the mistakes people make around decisions, and Amazon has written about this, I'll give you my take on it, is that the calories you spend on a decision should be proportional to the consequences of that decision, pure and simple. He calls them one-way doors versus two-way doors, which is a binary heuristic, which is, I love the elegance and simplicity of that. I'm taking it one level further, which is, it literally should be proportional. It's like, okay, if you have a really, really big decision that's going to be expensive to change, really, really, but a lot of calories making that decision, you may still get it wrong, but it's worth it. And it's not just around decisions, around activities and bests and things that you're going to do is that the calories you spend should be proportional to the outcomes and what you're seeking and the value of it.

**Dharmesh Shah** (01:08:06):
And that's one of the things I try to apply to my life. It's like, okay, my geeky nature wants me to go nine miles deep and start writing code and do this thing or whatever, but I found that that one simple thing is like, okay, is this a first-order approximation where I can just identify the factors or it can, and the other thing that helps by the way is, and we'll talk about this. So one is my default position on most things, and I don't mean this in a negative way, is, no. It's like, "Oh, shiny object. Should I go do this?" "No." And then I have to force myself like, "Okay, I need reasons to say yes." I have to force myself because it's easy to say I love new things, I love new people, I love all of that. So I have a, sorry, but no post on my blog that life-changing for me.

**Dharmesh Shah** (01:08:57):
And so the idea there is that this goes back to other first principles is time is with a few constants. So every time you say yes to something, by definition you're saying no to something else, and so this goes back to the product heuristic we were using in the earlier years of our class. Like, oh, when you put something in, you have to take something out because we want to keep the complexity roughly constant if we can. Same thing, so it's okay to say yes to things, but then you have to force yourself, based on the calories that you're committing to say, "Okay, well, what am I going to take out of my schedule, out of my life, in order for me to be able to make room for this thing?" Because as it turns out time, I have not been able to, despite my best attempts, bend the laws of space and time. So how do I make room for this new thing that I want to say yes to?

**Lenny** (01:09:44):
I love the way your mind works. I'm excited to talk about culture and how this connects and the way you think about culture and through all these frameworks and lenses. Before we do that, you hinted at this idea of how you pick what to work on. And I know you have kind of an interesting framework for how to decide what ideas are good and what ideas are worth investing in. I think both as a founder and a product leader, how do you think about deciding what is worth investing in?

**Dharmesh Shah** (01:10:08):
So imagine the Excel spreadsheet again. So let's say you're a value and idea for a startup, for a new product, a new feature, whatever happens to be, I think this applies. So the first thing you should look at is, and I measure things on a scale of zero to 10 because I like quantifiable things. I like to be able to multiply X by Y. I don't like letter grades, pet peeve of mine, but anyway, so put a number on it. It's like, okay, if this thing were successful, so let's say we're just picking a new startup idea. I'm considering starting this new business. If it were successful, what could it be? What's the magnet to the outcome? However you decide, it could be impact, it could be revenue, it could be market cap, it could be portfolio, whatever it is, it doesn't matter. I mean, it matters, but not relevant for this discussion.

**Dharmesh Shah** (01:10:48):
So that's the potential. Thing number two is probability of success. And now I'm going to pause here and tell you the most common mistake people make is they think through the probability first without actually forcing themselves to think through the potential, and here's what happens is if they apply a filter that says, "Oh, I only have a one in 10 chance to pull this off, there's only a 10% success rate or whatever", not going to do that. Well, if it's a one in 10%, one in 10 chance at 10 billion, it might be worth it. It might be maybe not. Sometimes it's based on stage of life and things like that in terms of risks you can afford, but for instance, so by the way, and when I say probability, that's the biggie side. I mean, you can do it multiple ways. You can say, "Oh, here's the X percent chance you can do in statistics as an event entry."

**Dharmesh Shah** (01:11:37):
It's like, oh, here's path A, there's a Y percent chance that happens, and here's what the outcome would be, Z percent chance or X. Anyway, here are the popular things, and you come up with what's called the expected value. Anyway, so let's say we just look at two branches like, "Oh, there's a fifty-fifty chance that I'm going to make 10 million." It won't tickle one branch just to keep this shorter. So the expected value of that is $5 million. That's literally the expected value. It's like, oh, you got a fifty-fifty chance at a 10 million outcome, and let's say you have a 10% chance at a hundred million dollar outcome or 500, whatever it is. So mathematically, it's like, okay, well, you should at least consider that other one, even though the chances are lower because the expected value is higher. Okay? So that's thing number one. Anyway, we'll get through the rest.

**Dharmesh Shah** (01:12:22):
So start with the potential outcome, then look at probability not the other way around because then you're going to apply that mental filter and throw out ideas that may not have been worth throwing out. The third thing is what I think of is either passion or proximity. Do you care about this actual thing that you can actually bring to bear? And then the fourth is, since I need a P word, it's like prowess. Do you have some assets? Something that makes you uniquely positioned? Either if you're building a new product, you have existing lines of code that you can reuse, you have a market that you already have access to, there's something about this particular idea that you have an unfair advantage pursuing, and that impacts your probability of success, and this is the other reason. You need to look at all those things, and once again, no one thing is the deciding factor.

**Dharmesh Shah** (01:13:15):
You're not going to just pick the thing that has the high expected value to take the potential times, whatever. It's like you have to sort of look at all of them and look at your own situation, but it helps to think through that, to have the discipline to say, "Oh, how big could it be? What are the chances? How much do I care about solving this problem? Is this something I can work on for two years, 10 years, 20 years?" And finally, "Why me? Why me? Why my company? Why would we succeed at this? Why it's our chance of success, even low, higher than the rest of the world?" Like why?

**Lenny** (01:13:48):
Okay, so I'm already picturing the spreadsheet here. For every idea you have, you basically have a column, potential probability of success.

**Dharmesh Shah** (01:13:55):
Yes.

**Lenny** (01:13:56):
Proximity, you said? Just like how...

**Dharmesh Shah** (01:13:57):
Particular passion.

**Lenny** (01:13:58):
Okay, passion.

**Dharmesh Shah** (01:14:00):
Yeah. I started with passion, and I have an issue with passion as a word because it's ambiguous, because we talk within startup circles. It's like, "Oh, pursue your passion." Sure, but it's like, you know what? Most of the companies that exist today that are even successful ones with awesome founders, they didn't necessarily pursue their passion. It's like they maybe are baffled in their scenario, particular problem, or a market segment or something like that, but it's like it's okay to become passionate about something as you dig into it or whatever. That's fine too.

**Lenny** (01:14:38):
Yeah, one of my favorite startups that I've invested in, it's called Zip. It's a procurement platform. The founders were not passionate about procurement when they got into the space, they just saw a huge opportunity. They thought they could build a much better product, and they got passionate about it once they started working on it and finding products.

**Dharmesh Shah** (01:14:54):
This is the thing. So yes, if you can find your true calling and this is what you were meant to do in the world, and you have the opportunity to do it, great. That's a tiny, small fraction of people. It doesn't happen. You may not even know what your passion be, especially if you're a first time founder. It's like, okay, well, I haven't seen the world. I don't know.

**Lenny** (01:15:15):
Okay. So just for people, if they're creating a spreadsheet for all their ideas, for startups, it's potential, probability of success, passion, prowess.

**Dharmesh Shah** (01:15:24):
Yes.

**Lenny** (01:15:25):
Okay. Amazing. Okay, let's talk about culture. I know you spent a lot of your time on helping build HubSpot's culture, create the original culture. You created this epic culture code deck. I think it's 128 pages. So maybe just to dive into it, what was that process like to define the culture of a company and maintain the culture over time?

**Dharmesh Shah** (01:15:48):
I'll say awful. No, the beginning of it. Okay, so I'll give you the very quick story because my co-founder and I, having one of our founders meetings or founders dinners as we do, and he had been meeting with this CEO group, and he said, "Oh, Dharmesh, I hear this culture thing is really important." By the way, the word culture had never been mentioned prior to this conversation, the halls of HubSpot ever. And this was how many years in? This is, I want to say three or four years in. I can check the records because by the way, even Brian and I, even back when people work on offices, most of our communication was over email and Async. We've always been big believers in that written form, but anyway, so I can tell you whether you know where cultural was used or not, and it was not.

**Dharmesh Shah** (01:16:36):
And he's like, "Oh, I've heard", because talking to us, "Culture is super important. Dharmesh, can you go do that?" I'm like, "Okay, Brian, all the people in all the companies, I am literally the bottom decile, if not the worst possible person. It's not that I don't like people, I just don't like being around them a whole lot, and from what little I know of culture, it sort of involves people. I don't know, but it seems like I'd be the wrong person." But anyway, I'm a team player. I'm like, okay, it does feel like it would be important, and so I took on the task and I didn't really know because when he said, "Dharmesh, can you go do that?" What does that mean? And so when I took it to mean, it's like, okay, well culture actually already exists. We have a culture. It's like whatever it is, and it's working pretty well, companies doing well, people seem happy.

**Dharmesh Shah** (01:17:32):
And so I said, "Okay, well, what I'm really trying to do is kind of describe the culture that's there." So it's not creating culture, it's articulating the culture, so we know what it is, and so then this is the side of me showing up again. So the question I asked myself is I literally asked myself this question, which is, "If I could write a Python function that would measure the probability of success of a new person coming into HubSpot, what would the factors be?" What are the things that if I could measure, if I knew I had a true function that says, "Oh, on a scale of zero to 10..."

**Dharmesh Shah** (01:18:00):
If I knew, if I had a truth function that says, "Oh, on a scale of 0 to 10, here's how they rank on this, and this, and this, and this, and this, and this," I could approximate how successful and how good they're going to be for HubSpot. That's my exercise.

**Dharmesh Shah** (01:18:13):
Okay. So I did an internal survey, and I'll tell you why this was such an awful experience in the beginning, because this is also a good story. So once I took on this task, I sent an email to the company. It's like, "Hey, everyone. I'm just going to be digging into culture, so I'm going to send this survey out. I just want to get an understanding so I can..." Great. And the negativity and the visceral response to that one email was literally up until that point, it still ranks in top three, worst things I've ever...

**Dharmesh Shah** (01:18:47):
People felt so negatively and so strongly, and I was not expecting it, right? And I'll tell you, the one line that really just was gut-wrenching was like, "Dharmesh, here we're talking about culture. Next, we're going to have like posters up on the wall about excellence. HubSpot is not the company that I thought I joined." Like oh. It is just like the deep part of me is like I just did not know how overloaded that idea of culture was, right? And so then when you dig into it, it's like, oh, because so many companies had done it so poorly and just didn't walk the walk or whatever, this is why. There was a reason why there was this kind of negative response.

**Dharmesh Shah** (01:19:30):
So anyway. So I went back to my thing. It's like, "I get it. So I'm going to try to describe what we have, and I'm going to write this truth function." So I wrote the slide deck, which had exactly 16 slides, and that answered this one question, which is, if I could write a Python code, what are the factors, so what are the attributes that we would look for in humans. And the reason I came up with that particular question is that when I did the survey, I did the NPS survey, which everyone knows that you would send to customers. It's like, "Oh, on a field of 0 to 10, how likely are you to recommend HubSpot as a place to work?" and the other NPS question is like, "Why did you give that answer?"

**Dharmesh Shah** (01:20:12):
As it turns out, here's the thing that I've learned which was troubling, everyone was happy, and the reason they were happy is because of the other people at HubSpot. That was the number one reason, which is both good and bad. It's like okay, well, that's awesome, but that doesn't tell me anything, right? It's like, okay, well, that's a self-reinforcing kind of recursive loop. And so that's when I was like, "Okay, well, what makes the people at HubSpot the people that are at HubSpot? Let's come up with the attributes that define what it means to be one of these people that makes other people happy."

**Dharmesh Shah** (01:20:44):
And so we came up with the original set of things that were embodied in that slide deck, and I called that slide deck the Culture Code deck, and the reason I called it the Culture Code deck is not because it was a code of conduct, or a moral code, or, "This is how companies should be run." It was because if I could write code to kind of define the culture of HubSpot, this is what the code would look like. And since that point, it's like the question I keep asking myself is, if we could have an operating system that ran the company, just the geeky part of me, not that you could do that, but what would that look like, right?

**Dharmesh Shah** (01:21:17):
There are very few original ideas I've had that are any good. One of them is this thing that culture is a product, period, and that every company builds two products, one is the product they build for their customers, and the other is a product they build for their team. That's what culture is, it's the product you build for your team. And let's say we stipulate that that just happens to be true. Just humor me for a minute. If you assume that's true, then a bunch of things kind of follow from that postulate, that hypothesis, which is, "Oh, well, just like we would never build a product without talking to customers, we would never build a culture without talking to the customers of the product," which are the people. So we do a repeat of that original NPS survey we've been doing every quarter now forever to figure out what the NPS of that product is, our culture product.

**Dharmesh Shah** (01:22:15):
The other thing is like, okay, well there's no product person in the history of humankind that would've said, "Oh, I built this product. It's awesome. I'm done." No one would ever say that, and this is the number one mistake, I think, I'm biased, I think founders make, is that they say, "Oh, we have an awesome culture, and my job is to preserve the culture." That is not the job because the needs of your customers change, the needs of the employees change, right? The culture exists to help the great people do great things for the company. That's why the culture is there, and the things they need later as the company scales are different. And so just like you would never freeze the lines of code of a product, you would never freeze the lines of code of a culture. Culture should be iterated on just like you iterate on product.

**Dharmesh Shah** (01:23:07):
And there's so many other things that kind of fall. So just like in a product, you will get feedback from the customers like, "Oh, here are the bugs," and we actually call them bugs. It's like, "Oh, here are the bugs in the culture." At the all-hands meeting, so we have this survey that comes back. Once again, transparency notion. Every single survey response, it's anonymous in terms of who submitted it, we publish it, right? The quant score of the subjective thing, everything, then we will categorize it, and then at the next all-hands meeting, we call them all-minds... Anyway, a little-

**Lenny** (01:23:37):
I love that, all-minds.

**Dharmesh Shah** (01:23:39):
All-minds.

**Dharmesh Shah** (01:23:41):
And it's like, "Okay, so here are the things that we heard." Just like we would do for a product meeting, it's like, "Oh, the customers, here's what we're hearing back." It's like, "Here's the bug that you've identified. Here's the ones we're going to fix." And when we're going to fix some, we're going to commit like, "Oh, you said this was broken. Okay, we're going to do something about that." Here are the things that like, "Yeah, I know you don't like it that way, but it works as design," which we do in product all the time, right? And you should have the right to do that. It's like, yep, some people are going to disagree, and there may be any number of reasons why we think that needs to stay the way, we're not saying necessarily forever, but as it stands, we are not prioritizing this, we are not fixing that thing that you think needs fixing for whatever reason.

**Dharmesh Shah** (01:24:21):
So the one lesson here is, very few things I've learned that I think are universally applicable, that one, I think, is right, and just so much greatness and goodness falls out of that, is if you think of the people as customers and if you think of the culture as product, it takes away this kind of abstract nature of working on culture and then takes away this thing that I heard this back in the early commentary from the HubSpot team, is like, oh, well, culture is not something you really build because that seems fake, that seems inauthentic that you just go, it's like, "Oh, we're going to craft this culture." No, we craft in the same way. I'm not saying we're going to impose it, like we're going to do this often in isolation, but we're going to work on it, and it's something you actually do manifest, and it's not just up to the founders.

**Lenny** (01:25:07):
Wow, what an amazing story. You're definitely getting laughs per minute for me, and I think there's at least one laugh per minute so far in this podcast. That's amazing. And I think this point you just made about your job is not to preserve the culture as a leader, I think that's really profound, because I think most people don't think that. They think their job is, "We need to maintain our culture as we grow." It's all fading away, our culture's changing, but your point is that that's good and that's great.

**Dharmesh Shah** (01:25:31):
Bringing it back to product, I think this is an important thing. This is the second order lesson learned after you start with the culture is product, is that one of the challenges almost everyone will deal with is that you have these things... And so by the way, just because culture is product does not mean there's not a sense of having what some might label as core values, right? Because we have this in product as well. There are core values that the product believes in, like we believe in our product, that we're going to hold constant through it, right? Like, "Oh, we're building for SMB. Want it to be easy to use." There's constraints that we put on ourselves that are intentional that even though we iterate, we're not going to iterate away from these things, kind of that high conviction bet thing again.

**Dharmesh Shah** (01:26:10):
But not everything that's part of your product is a core value, right? So not everything that was part of your culture in the early years. So transparency is one that has endured over a long time, right? It's part of our core value, and we preserved it even though it was troublesome through the IPO. I shared that story. And then there are things that we changed that were part of like, oh, we believe this meritocracy thing in a flat organization, but the manifestation of that was a bud with lack of titles, right? And so we changed that. It's like, "Okay, well, there are things..."

**Dharmesh Shah** (01:26:38):
And here's the other thing. It's a mixed metaphor problem because I haven't been able to come up with a good metaphor yet, but there'll be things that you have that are kind of core... And the way I describe it right now, I'm just going to put it out there, I'm kicking myself for not coming up with a better metaphor, is like federal versus state law. So there are federal laws we have here in the United States that says, "Okay, here are the things, and these are the inalienable rights of all citizens of the United States. These are the things that are core." But then we have state things, right? It's like, "Oh, for this particular state on these particular aspects, they can optimize for their particular state." It's like, "Yes, we understand this is the corollary, but for our state, we're going to do this."

**Dharmesh Shah** (01:27:21):
So we have something similar at HubSpot. We have a core set of things that are part of the culture, part of the thing that's like, "Okay, here's what we believe," and then there are things that the individual groups, so our head of engineering could come back, it's like, "Yeah, I know our overall, like the founder's leaning is X, but for my particular group, that doesn't really make sense. We're going to do this."

**Dharmesh Shah** (01:27:40):
So I'll give you an example. So one of the core things from the early years of HubSpot is like we don't care about what hours you work, like from what time to what time. It's like it doesn't matter, like literally does not matter. We didn't track it, we don't care. But then over time, it's like, "Well, we have a support organization," and that organization, as it turns out, does matter to our customers, right? Like we need to have coverage and things like that. It's like, "Okay, well, that sort of makes sense," right?

**Dharmesh Shah** (01:28:04):
But then you sort of have to, A, pick your battles, but then fight back. For instance, transparency, there have been times where individual org leader's like, "Okay, Dharmesh, I know you believe in this transparency thing and Brian believes in this transparency thing, but it's inefficient for someone that is a SDR in the sales organization to have access to the high-order financials. It's a waste of time. It's a distraction." That was the argument. It's like, "You may be right, but the binary decision, the fact that we value transparency so much, we're going to..." Yes, maybe it is a distraction, fine. And the other one is like, "Oh, I don't want my team to have it because I just don't..." You know, we were hiring so fast and it's like, once again, that's a lot of trust to put into people or whatever. It's like yeah, but then one of the other lessons is cultures over time become self-fulfilling prophecies.

**Dharmesh Shah** (01:28:57):
So in the early setup, big lesson learned. So when I put the first version, the public-facing version of the Culture Code out there, and I got feedback from the team and like, "Dharmesh, you say this in the Culture Code deck, and it's just not true." It was not true enough for us to kind of state that as a thing. And so the thing that I did is in the deck, I have what I call these little liner notes. It's like stuff going on. It's like, "Oh, this is not really true yet, so it's more of an aspiration. This is how we want it to be, but we're not walking the walk yet on this thing."

**Dharmesh Shah** (01:29:32):
So I didn't take it out because I wanted it to be an aspiration, and here's the thing that I had not thought it through. I cannot take credit for it. What happened over the fullness of time is that those things that were aspirations became increasingly true by virtue of being in the deck because as people join, it's like, "Oh, that's something we aspire to, so I'm going to pretend that's actually the culture of HubSpot," which is exactly what we want. So it's okay to say things that are aspirational. Just call them out. Don't present things that are not true, but they'll back off of the things that you would like to be true.

**Lenny** (01:30:04):
Wow. There's so many lessons there. It reminds me of Airbnb, actually. I was there when they created the original, there's these six core values of Airbnb. One of them was simplify, it turns out. And then, I don't know, some number of years later, the founders realized, "We're not actually good at this," and values should reflect who you are not aspire to be, and I like this middle ground you found of like, "I'm going to put in here, but I'll note this isn't necessarily who we are." We didn't do that. That would've been a smart move. So they removed that core value. They're like, "We're not actually this," and going from six to four. There's another one they removed. So I was really impressed because we're like, "Okay, wait." Because it comes up in meetings. They're like, "Simplify. No, this is actually really complicated."

**Lenny** (01:30:46):
Okay, so what I'm going to do, I have one more question about AI, and to make this work timing-wise, I'm going to cut the lightning round, so hope that's okay.

**Dharmesh Shah** (01:30:55):
Totally fine.

**Lenny** (01:30:56):
Okay. I know AI is very top of mind for you.

**Dharmesh Shah** (01:30:58):
By the way, this is my diabolical plan to have to skip the lightning round because that's the thing I'm not good at, like I'm not [inaudible 01:31:05]. Anyway, you know I was dreading the most.

**Lenny** (01:31:07):
Playing 4D chess here. You knew exactly the timing and you're like, "I will take this long for all these answers so it'll perfectly play out."

**Lenny** (01:31:16):
So I know you're spending a lot of time on AI. It's on many people's minds these days. You built this product called ChatSpot. Is it still called ChatSpot? Is that the product you changed the name for or that's still ChatSpot?

**Dharmesh Shah** (01:31:26):
It's still ChatSpot.

**Lenny** (01:31:28):
Still ChatSpot. And I know that you've handed that off now to a team actually that's working on this.

**Dharmesh Shah** (01:31:28):
Yep.

**Lenny** (01:31:31):
It's not like just the entire mesh project anymore.

**Dharmesh Shah** (01:31:33):
Yep.

**Lenny** (01:31:34):
So I don't know exactly where to go with this, but just why is AI so top of mind? And where do you think people should be spending time? Where do you think things are heading? What comes to mind around AI?

**Dharmesh Shah** (01:31:46):
Yeah. Obviously, I'm not alone in my excitement, but I will say this. So I'm about to hit the 30-year anniversary of my working in commercial software, right? So I've been at this for a long, long time, and that's all I've ever known, that's all I've ever done. And the last time I was this excited was when the web first came along in the mid to late-'90s, and I'm like, "Oh, this literally changed everything," right? It's like relevant to everything. It's like literally everything is going to be impacted by this thing called the internet. And I was in my early twenties, right?

**Dharmesh Shah** (01:32:27):
I've been here for mobile, I've been here for social, I've seen lots of things that people got really excited about, but nothing to me has hit the Richter scale to the degree that AI does, and the reason is, okay, so if you think about early computers, PCs, that kind of gave us compute at scale, which was awesome. The internet effectively gave us distribution at scale. It allowed us to take information, products, whatever, and get them out at scale because everything was now connected, where before it was not. What AI gives us now is cognition at scale, the ability to literally amplify the human brain, right? That's never been done before. Look, not that we haven't been trying, but now we have demonstrable evidence and products that actually work. We've used ChatGPT and products like it. And so it's life-changing, right? And so for the product people out there, which is a lot of you, AI...

**Dharmesh Shah** (01:33:28):
By the way, the internet unlocked a massive opportunity because, especially for startups, it's like, "Oh, we can just reimagine the world with this new thing called the internet that was not possible a year ago and now is. What can we now unlock?" and lots of great companies were created. I think something similar will happen here.

**Dharmesh Shah** (01:33:45):
And there's a couple of things just tactically that I think are possible vectors that can satisfy my spreadsheet of if I were going to choose ideas, and these apply across industries, is that, so as software companies and product builders, most of us have always called our products like, "Oh, we build intuitive products." We say that, right? As it turns out, it's just not true because as a user of X product, whatever it happens to be, it's like, okay, I've got this mental model, the thing I'm trying to accomplish, and then I have to translate that into a series of clicks, drags, touches, and swipes in order to accomplish the thing that I want in the software product that I'm using, and what varies is the degree to which that translation needs to occur.

**Dharmesh Shah** (01:34:31):
But there is this impedance mismatch, right? There's a translation that has to happen from what's in my head, like, "I want to remove this background in Photoshop," "I want to create this report in HubSpot." And so the opportunity now is that we're going from what was an imperative model, this is what engineers would call like a step-by-step, you give instructions to the computer like, "Do this, do this, do this, do this," and then hopefully you get the output you're looking for, to what engineers would call a declarative model. A declarative model is you describe the outcome you want, not the steps to get there, and the closest analogy that most people are familiar with is SQL, the querying language, right?

**Dharmesh Shah** (01:35:08):
So before SQL, if you wanted to get data out of a system, you wrote code that says, "Okay, loop over all my customer records, then filter out the ones that have less than a million dollars in revenue, and then give me the result," and SQL said, "No, just put a where clause on it. Describe the data you want, and what columns you want, and how you want to order it, and what filters you want to apply," and it figures out if the database figures out how to get you the thing that you're looking for.

**Dharmesh Shah** (01:35:31):
Now we have the ability to do that for interfaces for software, right? So instead of saying, "Click here, drag here," it's like, "I want you to generate a report that's all my customers in Europe that we signed up last quarter that were more than 100K in ARR." And you just literally take the thing that's in your head and express it in whatever medium you choose, text, voice, doesn't matter, and the software now can actually... So now the technology exists to pull that off. Did not exist before, and now it exists.

**Dharmesh Shah** (01:35:59):
I know it didn't exist before because six and a half years ago, I built this product called GrowthBot. That was a chatbot for HubSpot software and business software generally for marketing and salespeople. It's essentially what ChatSpot is now. Amazing product, GrowthBot, and it had just one teeny tiny small problem, which is it didn't work. Really well-conceived, really brilliant idea. It just didn't work and the technology wasn't there. You just couldn't do it with any degree of fidelity because AI hadn't... And now you can. And that's what caused me to go prove out my theory, is like I had a chip on my shoulder, particularly with that idea, right? But I think, and I'm not suggesting that web and mobile interfaces are going to go away, but there are a class of use cases across pretty much all software where we can make things easier for the human by not forcing that translation layer and just make it truly intuitive. Yeah.

So thank you for coming to my TED Talk or my [inaudible 01:37:01] podcast.

**Lenny** (01:37:03):
So what's great about watching you, because you kind of build in public with this AI stuff, that you're doing it, like your approach to learning about this is building and doing. When you launch ChatSpot, you tweeted that it took you many, many late nights of work.

**Lenny** (01:37:17):
For people that want to understand what's going on, get ahead of where things are going, build the skills to be relevant in the future, do you have any advice? Is it just build stuff and do it, or is there anything else you'd recommend for people that want to understand what the hell is going on?

**Dharmesh Shah** (01:37:34):
Yeah, and this is very simple practical advice, and this is the same thing for engineers in software as well, is don't try to go learn something because you think it's worth learning. Find an actual problem that you care about and go try to solve it with that new thing, right? If you have something tangible that you're trying to do, so for instance, going back to the talk around public speaking, it's like, okay, if I had said, "Oh, I want to learn about humor and stand-up comedy," I don't think I would've accomplished a thing. But I had a goal in mind, which is like, "Hey, I need to be able to get up on a stage and a hold of a thing and I have this measurable thing."

**Dharmesh Shah** (01:38:13):
So whatever it is, whatever line of business you're in, whatever you do as a professional, I guarantee you there are ways AI can help you, even with the tools that we have out there right now. So either use the tools, build tools on top of the APIs that exist, very easily accessible right now, very cheap to start. Yeah, just do it and iterate. And I'm a big believer also in learning in public as well. That's why the Culture Code is out there. It's like, okay, well, if you accept the fact that culture is a product, we're going to learn about things much better, like instead of just getting feedback from the employees at HubSpot, why don't we put it out to the world? Because the internet is exceptionally good at telling you why you're an idiot, right? It's like it's one of its core strengths. So I would recommend, have a goal in mind, write about it. I'm a big believer in writing generally, but yeah, do it in public.

**Lenny** (01:39:07):
I love that advice.

**Lenny** (01:39:09):
Is there anything else that you wanted to share, or touch on, or leave listeners with before we wrap up?

**Dharmesh Shah** (01:39:17):
We covered a lot of territory.

**Lenny** (01:39:19):
Yeah, we did. Yeah, we did.

**Dharmesh Shah** (01:39:20):
I might do the quit while I'm ahead thing. I'll leave it with this. So I have my definition of success I came up with years ago that I kind of still stand by and that HubSpot actually stands by, is success is making the people who believed in you look brilliant. That's it. What I like about that is it's not like an inward-facing thing. This is the kind of, like customer folks, like all the employees that join your company when you're a founder that were kind of silly enough to, "Could I join you on this thing?" whatever, like customers that believed in the early product that completely sucked, investors that believed, like all of that, do what you can to like when they reflect back on it, it's like, "Oh, boy was I smart to having believed in Lenny and what he's doing." So yeah, I think...

**Lenny** (01:40:07):
That is really beautiful. Dharmesh, you are wonderful. Thank you so much for doing this.

**Dharmesh Shah** (01:40:14):
This has been a lot of fun. I'm glad we were able to put it together.

**Lenny** (01:40:16):
Same. We covered so much ground. We got through everything that I was hoping to get through and more. Where can folks find you online if they want to follow what you're up to and maybe reach out if they have questions? And then how can listeners be useful to you?

**Dharmesh Shah** (01:40:27):
Sure. So I'm Dharmesh, D-H-A- R-M-E-S-H, everywhere. I'm not only findable, I'm unavoidable on the internet as it turns out. And follow me on social media. Tell me where I'm being an idiot and what I can learn. Here's the thing, leave a YouTube comment and tell me which Lenny episodes were your favorite so I can go back, because I've been binge-watching anyway. I'd love to know.

**Lenny** (01:40:54):
And then speaking of that view, I know you have websites of your content, you have your YouTube channel. Where can folks find those things?

**Dharmesh Shah** (01:41:02):
Yeah, if you just go to dharmesh.com, that'll have links to the other places. I'm probably most often on LinkedIn as it turns out, which is a whole topic for a whole other day, but...

**Lenny** (01:41:13):
Yeah. Awesome. All right. I'll let you go. Dharmesh, thank you so much for being here.

**Dharmesh Shah** (01:41:17):
Thank you. Bye, everyone.

**Lenny** (01:41:21):
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.

---

## [2/21] Bending the universe in your favor | Claire Vo (LaunchDarkly, Color, Optimizely, ChatPRD)

**Claire Vo** (00:00:00):
People often think that I get hired into later stage companies because I'm supposed to teach them how to operate like a big company, and in fact, I say I'm hired to remind them they can operate like a startup.

**Lenny** (00:00:11):
Everybody wants this. Everyone's like, "Yes, move fast, amazing quality." What's an example of that for you?

**Claire Vo** (00:00:16):
I communicate to my leaders that my expectation is they bring in the clock speed one click faster. If you think something needs to be done this year, it needs to be done this half.

**Lenny** (00:00:24):
There may be a trend happening here of combining engineering product.

**Claire Vo** (00:00:27):
I'm using CPTO for short code of running product and engineering design functionally together. There should be no debates over what's best for product or what's best for engineering, what's best for design speed. What is best for the organization?

**Lenny** (00:00:38):
You built a tool called ChatPRD. My guess is it's the single most popular AI PM-specific tool out there.

**Claire Vo** (00:00:44):
Is it going to eliminate PMs next year? Probably not. Are the skills required going to shift? Yes. Could they shift much faster than we all anticipate? Probably.

**Lenny** (00:00:56):
Today, my guest is Claire Vo. Claire is a longtime chief product officer at Color, Optimizely, and currently chief product officer at LaunchDarkly. She's also been a two-time founder, engineer, designer, and a marketer. She's also the creator of ChatPRD, which I suspect is the most used PM-specific AI product out there, which she builds on nights and weekends.

**Lenny** (00:01:19):
In our conversation, we dig into what PM skills AI will complement and potentially replace in the future, the story behind ChatPRD, and Claire's advice for how to stay ahead of the curve on AI within the PM role, the importance of feeling agency over your career, and how to bend the arc of the universe to achieve the things that you want to achieve, insights into what it takes to be a successful woman in tech, especially as an exec, how she creates a fast pace within larger companies while also keeping the bar very high, the rise of the CPTO role, combining product and engineering under one leader plus a ton of career advice both for early career people and senior leaders, and so much more.

**Claire Vo** (00:04:20):
Oh, thank you for having me. I'm excited to be here.

**Lenny** (00:04:22):
I'm even more excited. You're someone that, to me, has always felt inevitable would be on this podcast and that we'd be doing an episode together. Do you feel the same way, or not? And it's okay if you don't.

**Claire Vo** (00:04:32):
It's a privilege and a pleasure, and I'm glad I'm here. I've been so impressed with your guests and your content. It's been so exciting to see just the wide range of product leaders and thinkers in this space. And if I can be on a list of product leaders and thinkers in this space, then I'm doing something good. Thanks for having me.

**Lenny** (00:04:51):
It's absolutely my pleasure.

**Lenny** (00:04:53):
I want to start by talking about career advice. I was perusing your LinkedIn, and your career path is basically what most PMs probably dream of in their career. Just to summarize, you went from associate product manager to product manager to senior product manager to director to senior director to VP to SVP to chief product officer, and now you've been chief product officer of three different companies. And along the way, you're a founder, you're a designer, you're an engineer.

**Lenny** (00:05:22):
Here's my question. If you had to boil down what you think your secret sauce has been to progressing so far and so quickly throughout your PM career, what might that be?

**Claire Vo** (00:05:33):
Yeah, so when you list it all out, you can probably guess underneath it all is a relentlessly curious, impatient, eager to build person at their core. I just like building stuff and I find a lot of fun, and I think if you find a career or a craft that's fun, it's easy to accelerate your growth in that career. One thing, I just love what I do.

**Claire Vo** (00:05:56):
But when it comes to career growth and that progression from, I actually started as a copywriter of all things, copywriter all the way up to a CPO or CPTO that runs an engineering organization, it boils down to something really simple, which is know what you want out of your career, be clear and ask for it, and then make it easy for your boss or whoever can support or champion you to get you from here to there.

**Claire Vo** (00:06:20):
And so I'll take a really specific example from earlier in my career, where I had been in management for design and product management, so a senior manager level over product and design at an e-commerce company, and worked very closely with growth and marketing. We were just two sides of the same coin and worked very closely. And the head of marketing left and there was this big to-do pretty quickly of, "Well, what are we going to do with marketing? And do we need to hire somebody?"

**Claire Vo** (00:06:49):
And I sat for about a half a day and I thought, I think I can help here, drew out an org chart, put my name on the top, walked into my boss's office and said, "This is one potential solve of your marketing organization question, is we'll bring product and marketing growth together. I can be in this position. Here's how I'd change the management structure underneath this. Not just where do you put me, but where do you put everybody else? And I think this could work for the company, and this is how I'd suggest we roll it out and this would be my JD." And I got that job. I think when people ask me about career advice, they want to hear, "What can I do?" Really, what do you want? And how do you make it as easy as possible to make the case to your boss to get you here to there?

**Claire Vo** (00:07:33):
The other thing that I give people advice about is know what you want out of your current role and know exactly what you want your next role to be. And I even know this, and I even say this to my boss. When I was VP of product at Optimizely, I said to my boss, "I want to be a chief product officer. Here's how I'm going to get us here to there, and I want you to partner with me on it." And even coming into this role when I was interviewing at LaunchDarkly, my boss, Dan, the CEO of LaunchDarkly asked me, "What do you want out of this role?" And I said, "I want my next role to be a CEO role, so I want this role to fill in my gaps, learn, help me elevate my experience to get me to that next step."

**Claire Vo** (00:08:14):
And so I always know what that next role is going to be and I'm always clear about it. Now, I think there's a fine balance here. There's one thing to be very clear about your goals. It's another to suck the oxygen out of the air about only talking about getting promoted. These are probably 0.005% of my interactions with my boss are about my career growth and my path. It's very small. "Am I clear? Are we on the same page? And am I communicating as I'm making progress against those goals?"

**Claire Vo** (00:08:44):
High-slip people I think get promoted basically as fast as the org can support. I've almost never wished I promoted somebody earlier. I've seen managers or folks promote a little too early, and so as somebody that's managing their own career, you have to be a balance of ambitious and assertive and take care of yourself and advocate for yourself, and the work needs to speak for itself at the end of the day, and that's what's going to drive for your career growth. And so know what you want but do the work and produce the results, and you can have a career like mine.

**Lenny** (00:09:24):
Maybe first to summarize, some of the core advice you're sharing is know what you actually want because you're not going to progress towards this amazing future career if you don't actually know where you're going. Otherwise, you'll be pushed in directions that you're not necessarily interested in going.

**Lenny** (00:09:38):
I have a sense of where you want to go to tell people and ask for it. "Here's what I want to be doing in the future. Help me get there." And I love the other point you made of just, don't over-focus on that. There's many people that spend a lot of their energy on, "I need to get promoted. How do I get to the next level? I deserve the next level." And I guess maybe along those lines, is there any other advice you could share of just how to avoid being that person that's just constantly obsessed with promotion? Any more advice of just how to find that balance?

**Claire Vo** (00:10:06):
Yeah. One, you've got to lock to the norms, the talent norms of your organization. You should know how those things work, and they can work very casually if you're a very small startup and they can work more formally if you're at a very large company. And one, understanding how promotions operationally happen inside an organization can help you have those conversations at the right time in the right moment with the right context. That's one thing I advise. We're a slightly larger organization. We do promotion cycles. We have times during which we promote people. And so if you're talking to me four months before a promo cycle, maybe it's top of mind, maybe it's not. I sometimes functionally cannot promote people inside larger organizations whenever I want.

**Claire Vo** (00:10:52):
One is, I think, understanding the talent calendar of your team, especially at a larger organization. I think the second thing is really the conversation needs to be about what you being in a different position does for the company and why the company needs it. Often the conversation is, "I want to be promoted because I want to be a director of PM, because I want to become a manager, because I need direct reports." Instead of saying, "Look, your span of control, you have nine direct reports, you need leverage here. I have a lot of credibility with this side of the product organization. I think we could be doing more if this position existed. And I think I'm good for this position because of what I've proven A, B and C."

That's solving a problem for the company. That's not solving a career growth issue for an individual. And I think people who want to be promoted need to think in that orientation versus the other, because honestly, especially now, let's say [inaudible 00:12:01]. There are not just these wrote every 12 months we're going to give comp increases and merit increases and you get to be promoted. We really have to be thoughtful about the structure and size and organization of teams. Product teams are naturally pretty small.

**Claire Vo** (00:12:19):
So, there aren't just management and director and senior director roles to go around. And if you want to get into a management, for example, you have to prove that you're good at organization design. I think really focus on why a role is good for a company or necessary for a company and then why you are the best for that role, rather than, "I want to get promoted."

**Lenny** (00:12:41):
That is such good advice and such important advice that focus on how do you solve problems for your manager and the business, not, "Hey, here's what I need for my career. This sucks. My career is stagnating." I love that. And I love so much of your message is empowerment. It's not just, here, there's the place you're in and there's not a lot you can do about it. Look for opportunities to help your manager, help your business. "Here's what I can do to move things further."

**Lenny** (00:13:06):
And I think there's an element of timing that you touched on. Propose this at a time when something could happen. You shared this example of there was a marketing gap.

**Claire Vo** (00:13:15):
Yep, exactly.

**Lenny** (00:13:17):
Is there another example where you did this sort of thing where you presented, "Here's how I can help the org," and that helped another promotion? If not, that's good.

**Claire Vo** (00:13:25):
It's honestly how I expanded into leading engineering teams in the technology organization. I was at Color and there was a real need to up-level our engineering organization, and I knew exactly what to do. I had high confidence I had the skills, both technical and organizational, to scale the engineering organization in a way that was really critical to the business, both from a architecture perspective and from a team and talent perspective. And so that was one where I knew there was a problem to solve. I knew that problem was important. I knew we had to solve it fast, and I was confident I knew I could do it. I had confidence that I could help there.

**Claire Vo** (00:14:06):
And so I'm still doing it today. And at Color, I came in as product. I very quickly began leading the engineering organization, which was fabulous, and then I actually took on some of our non-clinical operations as well where we had a pretty operational leader. We had some high-scale challenges to deal with, and it fit my talent set and I knew I could help the company pretty quickly.

**Claire Vo** (00:14:32):
And this is the other advice I might give particular to PMs. PM is such a generalist role, it's okay to go a little left and a little right to go up. I took this marketing growth role. That was actually my first director role. It wasn't only for product, it was for marketing. And I had to learn marketing and I had to develop skills there, but it was a foundation on which I could build a broader leadership career. And so I do think also looking left and right outside of your scope of product can be a really effective way to find growth opportunities.

**Lenny** (00:15:08):
I love that advice, and it leads to so many unexpected opportunities. One of the, I think, big questions with PMs, and coming back to your original advice of know where you want to go, there's so many directions a PM can go. You can eventually become a founder, become a GM, become a CO, something else. And trying these sorts of things often helps you understand, "Here's what I'm actually excited about. Maybe I want to move into design."

**Claire Vo** (00:15:31):
Yeah, and one of the other things that I think people don't understand, and maybe I experienced this as a founder and I really feel it inside companies, is the universe is bendable to your will. And what I mean is in most, at least in the stage I operate in in startups and growth stage companies and late stage startups, organizations are very fluid and I like to organize around talented motivated individuals.

**Claire Vo** (00:15:58):
And so just because we're organized in a particular way now, just because these organizations are separate or these are different, together, doesn't mean that's necessarily the way they have to be, and so you should think about your career growth in the existing structure of the organization. But as an org design thinker, it's a very important job that I have to do. You also have to think of this system as a living, breathing entity that can shift over time in particular around highly motivated, highly talented people.

**Lenny** (00:16:30):
And I think along the same lines, referencing this advice you've already shared of just thinking from the perspective of what is my manager and folks above, what are they struggling with and how can I propose, "Here's a solution that happens to also have me move into a more interesting role?"

**Claire Vo** (00:16:46):
Yep, exactly.

**Lenny** (00:16:48):
There's a direction I wasn't planning to go into, but I think it's really important and interesting is people like you that are incredibly good and successful end up taking on a lot, and that often ends up not being what they want.

**Claire Vo** (00:16:58):
SOS.

**Lenny** (00:17:00):
Exactly. Any advice on the classic, be careful what you're good at advice? Any advice on just how to not end up with everything?

**Claire Vo** (00:17:08):
I really believe operating in your zone of genius. I really believe in leaning into strengths. And if you are in a position in which you're good at things and you've been giving a lot of responsibility, but you have tremendous growth edges and you're spending more time on the things you need to level up than the things you are exceptional at, I think that's not fair for the organization. I think that's not fair for you.

**Claire Vo** (00:17:32):
I truly believe defining and understanding your zone of genius, where you are exceptional, where no one else can step into the job and do just as good of a job as you can, and where you derive tremendous intellectual emotional joy out of the work is what makes it sustainable over time. And so I don't actually think it's about the volume or breadth of the work. It's about sustainability of the work. And can you show up every day energized and engaged and excited about what you do?

**Claire Vo** (00:18:04):
And I think being very aware if you are operating the space or if you're not. And this might go back to, I think, I have never regretted promoting somebody too slowly, I have regretted promoting somebody too quickly. High-slope individuals in particular areas want to get more responsibility, want to have more scope, and I've seen less experienced managers or directors or even people at my level want to give opportunities that put people in a position where they're neither effective nor happy. And so I think being self-aware of that is really important, and then I also think as a manager, being cognizant of that is really important.

**Claire Vo** (00:18:50):
Individually, I do do a lot, but I do feel like I'm in my zone of genius and I also know that part of staying in my personal zone of genius is having this breadth of responsibility but preserving builder time. And what I mean from time is I have to have time to produce real work that comes from me as an individual, and that means that calendar management is quite important. Time management.

**Lenny** (00:19:21):
We're going to talk about some of the things that you built.

In terms of finding your zone of genius, any advice for someone that's trying to figure out what it is that is in that zone of genius? I know there's a Ted Talk of here's how to think about the zone of genius specifically [inaudible 00:19:33].

**Claire Vo** (00:19:32):
Yeah. I'm not going to relay it in precision, but one of the tactics that I've seen out there is basically go through your calendar for the last month or quarter, whatever it is, write everything down, and basically group them into, I hated doing this, I didn't love doing it but it was fine, I love doing this, and then I love doing this, and if I could spend all my time on this, I would be the happiest person in the whole world. And literally categorize the way you're spending your time into those buckets, and then put the bottom buckets away. Just focus on that top bucket and go, "How can I be here more?" And often, that is a true guide to where your passion is, where your special expertise is, and where you're going to add a lot of value because you're highly engaged.

**Claire Vo** (00:20:26):
I think the other thing is really asking yourself, and this maybe goes back to the career advice perspective, really asking yourself, "What do I do that no one else in this organization can do?" There are lots of things that I do that other people in the organization can do, but what are the things that I do that are... You think about a differentiated product that are hard to replicate, and knowing what that is and leaning into that can drive a lot of exceptional career growth but also just make you quite happy.

**Lenny** (00:20:58):
What's an example of that for you?

**Claire Vo** (00:21:00):
I think I'm actually quite good at traversing across and up and down. What I mean is I am fluent across product engineering, design, data and operations, and candidly revenue in a way that vertical or functional leaders maybe are less so. I feel like I have a high level of fluency broadly and can bring conversations between functions together against a business objective pretty easily. It's just the way I'm wired. I was a founder. It's second nature.

**Claire Vo** (00:21:31):
And the other thing that I think I can do pretty well that I find very joyous is traverse elevation. And so, yes, I love to be up here and think about strategy and vision, but I also like to drop into the details to move things forward. And I think that operating horizontally and then being able to spend some time in the vertical up and down, wherever that vertical up and down happens makes me quite happy. I think I'm pretty good at it.

**Lenny** (00:21:58):
Amazing. We're going to touch on some of these things you just mentioned actually, but real quick, you mentioned this idea of essentially an energy audit. There's actually a really good guide that I'll point to in the show notes by Matt Mochary that walks you through how to do this. And we talk about this a bunch on this podcast actually, this whole idea of just find things that give you energy, do more of that. Find things that zap you of energy, do less of that. Easier said than done when you have a job and you have to do stuff that people are paying you to do, but it's still really helpful if nothing else to help you point you where you want to be going in your career long-term.

**Lenny** (00:22:29):
Okay, so you mentioned you're a founder, and it feels like you're a founder at heart, but you've been working at larger companies for a while now. And I hear that you're really good at setting a fast pace within larger companies and maintaining that startup focus while also having a very high bar for quality and product. Everybody wants this. Everyone's like, "Yes, move fast, amazing quality." Why would we not want that? I'm curious just what you actually put into practice concretely that allow for you to build teams that move really fast and maintain a high bar. Are there processes you find helpful, values, ways of working?

**Claire Vo** (00:23:06):
Yeah, it's really funny, people often think that I get hired into the roles that I get hired into in later stage companies because I'm supposed to teach them how to operate like a big company. And in fact, I say I'm hired to remind them they can operate like a startup. And so I think about it completely differently.

**Claire Vo** (00:23:23):
And there are two things I think about in terms of pace and high bar. From a pace, it's know what your internal pace is, and essentially don't let it degrade to the pace of your recurring meetings. I often find that pace of organization locks to pace of the calendar, and so I am really thoughtful that reoccurring meetings do not drive next steps. It's a very tactical thing, but when somebody says, "Oh, we'll discuss this or we'll decide this in the next meeting," it's, "No, we should discuss this now. We should decide this tomorrow."

**Claire Vo** (00:23:58):
The other thing that I think about is setting one click faster pace expectations inside an organization. I tend to come in and love this, hate it, it's what I do, which is if I look at an organization that is operating at a lower pace than I would expect, I communicate to my leaders that my expectation is they bring in the clock speed one click faster, which means if you think something needs to be done this year, it needs to be done this half. If you think it needs to be done this half, it needs to be done this quarter. This quarter, this month. This week, today. End of day, in this meeting. And actually setting an expectation that your natural pace is going to be slower than your ambition and being explicit about pulling things in I think can change the way expectations are set and honestly change the energy and momentum in the organization.

**Claire Vo** (00:24:51):
The third thing on pace is personal SLA. I never want to be a bottleneck for the organization. This is one of the more challenging things about being in my role, is you are often a point of decision-making, tie-breaking, next steps, approvals, socialization. And if my personal SLA is slow, then the rest of my organization cannot be as fast as possible. I try to be fairly responsive. I try to say, "Do both very high rate," and also very quickly. It's really hard, sometimes it's not totally possible, but it's a goal I have.

**Lenny** (00:25:27):
I love this clock speed concept of just let's move one iteration faster than we would normally move. How do you actually do that? Is this just you doing it and then everyone trickles down from the way you're approaching it? Is this a principle on a team? Is there a phrase you use?

**Claire Vo** (00:25:41):
Yeah, it's a phrase I use and something I asked our leadership teams to do. It started at, one, I'm going to do this, and two, my expectation is you look for opportunities to do this. And the reason I think this is effective, it's very tangible and it's very tactical. It just is one of those things that a moment when you're about to say a due date, you check yourself and you go, "Is this right or do I need to pull it in by an iteration?" And so it's a very tactical piece of advice and expectation I give to my leadership team. If they can show up that way, then the expected pace of the organization goes up, and then people tend to rise to the occasion.

**Lenny** (00:26:26):
And then it connects very directly to your first piece of advice, is not rely on the meeting cadence to determine your action cadence. I imagine that's a similar situation where you tell people, "Here's how I want to operate," and then you actually work that way and that starts to filter through.

**Claire Vo** (00:26:41):
Yeah, I just think there's this anti-pattern of, "We'll make the decision in the next meeting," or, "We'll follow up on this in the next meeting." That is an artificial timeline introduced by Google Calendar or whatever calendar you use. It's not a real thing, and so I want to put us on real timelines. When can we make the decision? How much information do we need? And that doesn't mean that every decision is made now, today, tomorrow, but it does mean we don't snap to artificial cadences to make our product move forward.

**Lenny** (00:27:12):
Awesome. Let's talk about quality. What are some lessons there?

**Claire Vo** (00:27:17):
Yeah, I think in terms of high bar, there's probably two things that I think about as a leader. There's the talent bar being exceptionally high, and then there's the product bar being high.

**Claire Vo** (00:27:28):
I'll start with talent, which is, on the talent side I think you have to define the bar. You have to be really specific, and that means you have to think about pretty deeply what are your leadership principles? If your leadership principle is bring the clock speed up one iteration, be explicit that that's what you expect to see, and then articulate that and hold people accountable to it.

**Claire Vo** (00:27:51):
And so I do think it's really important to have a specific and measurable career ladder, especially at the senior levels. I often find that they're very soft. They're hires and manages multiple departments or takes in cross-functional stakeholder feedback. Those are just not tractable, specific things. And so I think, PMs, put on your product definition or OKR hat or whatever and define some real goals for these levels and be specific in a way that you can look at people and say, definitively, "Yes. Measurably, yes, they're meaning this bar measurably. No, they're not meeting that bar." And so I think that's very important.

**Claire Vo** (00:28:39):
The second thing I think is you have to normalize feedback. And Brené Brown, fellow Texan, love her, "Clear is kind," I think conflict-avoidant, feedback-avoidant cultures degrade the talent bar. They just do, because the expectations are not stated and you're not holding accountability. And I do not think that's kind. That is not setting up people for success in their careers. That is not helping them become the best teammate that they can become.

**Claire Vo** (00:29:08):
I really like to normalize feedback and, as I say, take the temperature out of the room when it comes to open and candid feedback. And that means being very clear when people are not meeting expectations, making it very clear that questioning ideas is not questioning innate talent. And I think that has something that people need to hear to normalize feedback. But I think feedback is quite important.

**Claire Vo** (00:29:30):
And I think the third thing is unfortunately when you're working to build a high talent bar and high talent density, then when folks aren't a fit and it's not working, moving against that quickly is part of the job. And it's a hard part of the job and it's part of the job that most managers really avoid, but I think it's important because it keeps your overall team operating in a really healthy, effective, performant way that makes everybody happier, including people that probably weren't a great fit for the work of the role at the time.

**Lenny** (00:30:02):
Is there an example of you being surprisingly candid to someone or giving feedback, hard feedback, to someone about quality, something that's just like, "Oh wow, that's what I should be doing?"

**Claire Vo** (00:30:16):
There were two leaders in my organization, I won't say which ones and I won't say when, but two leaders in the organization, partners across product and engineering, and they could not get it together. They could not work together. They were having misalignments and priorities strategy. They could not communicate. They were having conflict in front of the team.

And the managers that had managed them were taking this very soft pedal approach of, "You need to work on your [inaudible 00:30:47] functional stakeholder, and here am I expecting all this performance management stuff to happen." And I called both of them individually and I said, "The way you are operating is not meeting our leadership expectations. If you do not change, you cannot be part of this organization anymore. I believe you can operate differently. I do." And I did. I believe these are very talented people who could operate. "I believe you can operate differently, but it is your responsibility to do so, and I need to see change starting tomorrow."

**Claire Vo** (00:31:20):
I wanted them to succeed. And in fact, they did. It snapped in, they got it, and one of the... Turned into one of the most influential effective managers in our team over the course of probably the next six to nine months. And I think just clearly saying, "You are not meeting expectations. You will not be successful here if you continue on this path. I believe you can get here, but it is your responsibility." That is the conversation that is clear and kind and honestly very effective in most instances.

**Lenny** (00:31:55):
That's an amazing example. Clear is kind, as you said. It reminds me of Kim Scott, who's on the podcast, shared this story about Bob. I don't know if you remember that story at all of just this guy at their company who was just doing a bad job and everyone knew he was doing a bad job, and then they had to fire him. When they're firing him, he's just like, "Why didn't you tell me? Why didn't anyone tell me that nobody thought I was doing a great job?"

**Claire Vo** (00:32:16):
And I honestly think saying, "You are not doing a good job," is much kinder than, "I think you can improve on this aspect or that aspect." Or, "I've gotten some feedback that you could be better at..." That's not kind because it doesn't set somebody else up for success either in your organization or somewhere else.

**Lenny** (00:32:36):
Okay, let's go in a different direction. Let's talk about being a woman in tech.

**Claire Vo** (00:32:40):
Oh yeah.

**Lenny** (00:32:41):
This doesn't get talked about a ton on podcasts like this. I know you have a lot of thoughts. Obviously, you've been through a lot. You've had a lot of experiences. There's probably a lot of stories you haven't shared in other places, so I just want to give you a chance to share what you've been through, what you've seen, and any advice you may have.

**Claire Vo** (00:32:58):
Yeah, and I'm happy to talk about this. I know a lot of people don't want to be defined or consistently asked about being a woman or a mom in a C-level leadership role. Let's not have women in tech panels anymore. But I've been reflecting a bit on this lately because I just came from a few years in healthcare, which, from my experience, it's a lot more women in leadership roles. I was a little spoiled, even in our technology organization. And now, I'm back in startups and tech, where the ratios are completely opposite, especially in roles like engineering, which is a team that I run.

**Claire Vo** (00:33:30):
And look, this is just, it's math. I think Carta said that 13-something percent of founders last year were women. It's declining year over year. FEMA led founded teams, or at least 2% of venture capital, women hold 30% of senior leadership org roles. Women are 30% of software engineering teams. This is just math. We're just facts. We're not in the room in the equal proportions. And as somebody who has, despite the numbers, had a fairly successful career so far in technology, I feel like I owe it to the industry to say it hasn't been easy and it's still not easy, even at my level.

**Claire Vo** (00:34:09):
And what I want to be clear about, because it gets talked about a lot in forms like this, this is not about imposter syndrome. How could I have any right to imposter syndrome? I've proven myself. I've been a founder, I've raised venture capital, I've had a successful exit. I've been, as you said, a CPO across increasing large teams. I get to invest in red companies. I'm on boards. I get to be on this podcast. I'm a TikTok influencer. This is not about feeling like an imposter. It's really about, it is hard and it is different, and the numbers pencil out in a way that is not favorable to women.

**Claire Vo** (00:34:47):
And as you said, there's been a lot of stuff in the past that you look at me now and you say, "Oh, she did associate and all the way up," but I had to fight for my all-girls school to carry computer science at the same rate that the all-boys school had it naturally. I grew up in teeny tiny startups in the early aughts. I saw some nonsense. I had VCs tell me, "Don't get pregnant," when I was... These things happened. And yet here I am, and it's fine.

**Claire Vo** (00:35:21):
And I'm not complaining. I just think what people also don't understand is that stuff still happens. I don't need to litigate who it happens with, where it happens. It still happens. I have arrived and it still happens. And the reason I bring this up is I think it should be a point of reflection for industry, and I think it can be a really effective point of reflection for women who want to get into leadership roles.

**Claire Vo** (00:35:46):
And the way I approach it is I'm just very curious. I wonder what is structural about technology that creates these things happen? What is cultural? What is external? What has happened to me or happens around me? What is internal? What do I bring into the room that doesn't serve me? And so I try to stay very curious. And then constant product thinker, what are the points of leverage I can use to move things not just forward for me, but for the industry broadly? How can I influence thinking? Where can I not? Where can I walk away from things?

**Claire Vo** (00:36:24):
And then as for the internal aspect of it, I think this is also a very powerful thing, which is I try to stay in an empowered space. I know my value. I have no time for imposter syndrome. It's not a constructive thing for me, but I do think knowing that, as I said earlier, the universe is bendable to your will. There are things we can change. I don't think these numbers are not tractable. And so my recommendation and what I'd love to say to the industry generally, to women in particular, is curiosity and empowerment have been my path to joy in this sometimes complicated industry. And I think there's a lot better we can do. There's a little bit of ways to go.

**Lenny** (00:37:10):
Is there a story that you could share if you're comfortable of just something you've gone through or been through that maybe people are like, "Oh, wow, I see what stuff she's dealing with or other women are dealing with that I had no sense of?"

**Claire Vo** (00:37:21):
I've been trying to wrap my head around this one, which is I consistently get asked if I'm technical enough. Not even if I'm technical enough. Let's put enough aside. If I'm technical. And it's fascinating to me because as a technical co-founder of my startup, I wrote code for the first 12 months solo. I led the engineering team there. That code is still in production in very large environments. I have run multi-hundred people, engineering teams for many years, and I spend my Saturdays and Sundays shipping code. This is what I do. And truly, the first question most people ask me is, "Oh, well you're not technical though. You're a product person."

**Claire Vo** (00:38:11):
And I've been really trying to unpack where that is coming from. It's hard for me to imagine somebody else that looks different, that has a different name, that has a different gender getting that question with my background. And so that's one of those things that has really been spinning my head. Again, it's not about imposter syndrome. I don't have anything to prove to people, but I am quite curious where that orientation comes from. And if it comes to somebody like me, who has really had some proven success, I know it's happening to other people, and I'm hoping that I can do something from my position to turn that a little bit.

**Lenny** (00:38:50):
And this connects to what you shared, the advice you had of just try to get curious about why it's happening, which is exactly what you just said. Is that just mostly to help you not get upset and frustrated? Let me just understand, why is this happening again and again?

**Claire Vo** (00:39:02):
One, I do think sitting in your power is very effective. And so curiosity means that I'm in control, and I do think I'm in control more than I'm not. That's one part of it is, I think. And the other thing is I think a lot of this is it's complicated. It's structural, it's cultural. It's what you see and what you don't see, not just in the workplace. It's what you see and don't see in media. Am I reading my 7-year-old and my 4-year-old books of, "My grandma's a software engineer?"

**Claire Vo** (00:39:35):
Books called the Mom Test, which I actually think is a great book, but it has this underlying presumption of who is technical, who's not, who understands things, who doesn't. And that all bubbles up into how individuals experience an industry that's driving tremendous economic growth here, where at the end of the day, it's about economic participation. It can be about individuals and aspirations, but it is also about economic participation.

**Claire Vo** (00:40:00):
The reason I'm curious about it is I do think it's complicated and I do think you can be successful, but I don't think we're being successful at the rates I would love to see. And I think we're missing a lot of innovation and a lot of economic growth by not having incredible, technical, capable women start companies and lead organizations. And so I think we're all missing out for that, and I'd love to see more of it.

**Lenny** (00:40:25):
And is there an answer to how do we do this better? Anything you think, hey, you've seen work to help get us past this?

**Claire Vo** (00:40:34):
I think normalize seeing it, so thanks for bringing me on this podcast, but I do think normalize seeing it is one of the simplest ways. If you close your eyes and imagine a software engineer, my dream is you imagine a diverse set of folks. You don't imagine a very specific art type. And so I do think you can't believe it unless you see it, and so the more that you can provide platforms for diverse voices to talk about their journey in technology, expose that there are leaders out there that come from different backgrounds, technically, culturally, all those things, the more the industry can imagine different types of leaders in different types of roles.

**Claire Vo** (00:41:17):
And so I just want to see it more. I want to invest more and raise the voices of female founders. I want to call out their amazing female CTOs out there, all those things. And I think if you can see it, you can start to unlock these very embedded concepts of who is and is not a technology leader who is and is not technical.

**Lenny** (00:41:40):
Awesome. I love that advice. It's something I try really hard to do with this podcast.

**Claire Vo** (00:42:45):
Yeah, this was a fun one. Again, this is the universe is bendable to your will and lean into your power, which is, I had been running Experiment Engine, which was a platform for enterprises to run high scale experimentation programs. Not necessarily the underlying A/B testing technology, but all the stuff around hypothesis gathering, insights, aggregation, operations, keeping things on track. Because I really know, as you do, that high scale experimentation programs can be very impactful to businesses.

**Claire Vo** (00:43:19):
That being said, it was like a niche inside in industry, as opposed to a large TAM problem. And so I think we just fundamentally hit a TAM ceiling here. We had a great product for a great market that was very narrow. And three years, four years into running the company, I knew that to be true and I knew that we would be better served by being part of a larger organization, and one of those organizations could be a large testing company. And so I remember that was noodling on my mind, but we were also really trying to sell to enterprises.

**Claire Vo** (00:43:52):
And I heard that Microsoft, who was one of our biggest customers, was doing a experimentation day with Optimizely, and I knew Optimizely was a natural acquirer. And I knew I had to get into that room, so I called Microsoft and I said, "Hey, friend of Microsoft, I'm going to be up in Seattle seeing our other customer, very large Seattle company, this week, week of experimentation day. Could we stop by?" And they're like, "Oh yeah, sure." Well, then I went to other big Seattle companies and said, "Hey, other big Seattle company, I'm going to be up Microsoft at their experimentation day. Would you be..."

**Claire Vo** (00:44:34):
I got these two meetings to manifest against each other, and then I walked into that experimentation day and I eyeballed the CFO of Optimizely and I sat in front of him and started pulling up the product and coding at the same time. I was just like, "I'm going to sit in front of him in the row and I'm going to do this and we're going to have my screens." And then I went up and did a demo. And I'm not saying that's the thing that made it happen, but I will say very quickly after that, we became very close partners and ultimately they acquired me.

**Claire Vo** (00:45:06):
And I give this advice to founders because one of the things that, and founders and PMs, one of the things that I really hire for is scrappiness. I think you have to be able to do a lot with a little, and I think you have to know where you're getting and, come hell or high water, figure out a way to get there. And this was a very fun example of working my way into the right room, setting myself up for the success that I wanted, and having the backing, the good job, the great product, the outcomes to earn it. But you also have to get yourself in the room.

**Lenny** (00:45:39):
And how many months pregnant were you?

**Claire Vo** (00:45:44):
I was extremely pregnant. A ticking time bomb of a belly is a really good negotiation tactic in a deal. I think I remember when we were negotiating the final term sheet, I was 34 weeks pregnant, something like that, and they said, "Can you fly out to San Francisco?" I was in Austin at the time. And I said, "Literally, you can fly me out today and back tomorrow, and then I'm not allowed on planes." And that's how. It was very fun. It was fun, and what a happy acquisition. I can talk all day about how that was great. Great experience.

**Lenny** (00:46:11):
And I love it's another example of the phrase you've been coming back to of bending, I don't know if it's bending the world to your will.

**Claire Vo** (00:46:17):
Bending the universe towards your will.

**Lenny** (00:46:19):
The universe? Even bigger. I love it. It feels like a recurring theme here, is to take agency and control where your career and life is going. And that's such a good example of just finding a way into this room that would be very hard for someone to get into.

**Lenny** (00:46:33):
You've touched on the CTPO role that I haven't heard much about. And I know that this is a big topic for you, and I feel like there might be a trend happening here of combining engineering product. Can you just talk about this role and why you think it might be emerging?

**Claire Vo** (00:46:51):
Yeah, I get asked about it a lot because it's not super rare, but it's not super common either, and I think it could potentially be rising. And I'm using CPTO for short code of running product and engineering design functionally together. It's very different. I've done both. It's very different than a pure product or a VP product role.

**Claire Vo** (00:47:13):
And so first, I talked a little bit about how I got into this role. I do think you have to be technical to do a role like this. I think a lot of people look at my professional background and think that I use my broad leadership skills and leverage of a great SVP to keep engineering team going. But no, actually I spent quite a bit of time on the engineering side, because as somebody who is responsible for the business outcomes of the product, one of the best ways to drive value is having a highly performant engineering team that works on a scalable platform.

**Claire Vo** (00:47:45):
And so I spend a lot of time making sure that we're building the right architectural decisions, that our infrastructure meets the needs of our team, that our edge team is operating in a way that drives velocity. And I just don't think you can do that job if you don't understand how software gets built on a technical level. So I'm the kind of person that when we're doing a product review, I have the PRD up and GitHub up and I'm comparing both, because I think both sides matter.

**Claire Vo** (00:48:10):
I think the other thing that's different about this role is it's quite operational, and so you really have to know about operations and organization design. Edge teams are by nature much larger than product organizations. You just think about the classic ratios, there are more people in engineering than there are in product. And the talent challenges are significantly different in engineering, whether it's the high volume of recruiting, culture-shaped challenges are different. You have to really think about org design. And so you have to have a different level of mindset around organization design and operations when you're in a CPTO role.

You're on pager duty. You're getting paged at 1:00 AM if a service, if there's a Sub-Zero and it goes down. That is not what it's like to be a product leader. So you got to know what you're getting into and you have to be technical. And then the thing I would be remiss to say about this role is the P and the T get a lot of air time. Product and engineering get a lot of air time. Design data, these are such functional, very important organizations, and why these roles get... That's what the role is and how you could be good at it or whether it would be a fit for your skills.

**Claire Vo** (00:49:24):
The question of why have this kind of role, and I think there's two reasons. There's the obvious strategic reason of, they're all the same thing. They're all building capital P product, they're all builders, they're the same types of folks, they're all builders, and bringing them under one house allows you to optimize for the whole, as opposed to optimize for the function. And if you can find a leader that is effective at that, I think you can get a lot of value added. And honestly, the second thing is it provides a tremendous amount of leverage to the CEO in many ways. At the end of the day, R&D is a very expensive and complicated investment the company is making, and having a single person responsible for R&D investment at the executive level is quite important, especially when you're candidly spending a lot there.

**Claire Vo** (00:50:21):
And so I think it's those two things. It's, these are one team. There should be be no debates over what's best for product or what's best for engineering, what's best for design. It should be what is best for the organization at whole. What do our customers need and what do our business needs? And then it's the accountability candidly of this quite meaningful investment against business objectives and having a singularly responsible individual to care for that investment.

**Lenny** (00:50:46):
It sounds wonderful, having one person to deal with across all these functions.

**Claire Vo** (00:50:50):
It is and isn't. I'll just say, I've done both. I've been a CPO next to an SVP of Eng. I've run both together. Founders can play this role. And again, this is why I say you have to optimize around talent in your organization. If your CEO has the skills, bandwidth, et cetera, to do this, they can do this. You can keep the organization separate. They can hold that. If they have a different area of expertise, if they've never done that before, if it's just not working operationally, they have broader areas of focus, then bring it together under someone. I don't think there's a perfect organization structure. This has just been one that's worked well in the shape of organizations that need someone like me.

**Lenny** (00:51:33):
And along the same lines, designing an org around the person, I imagine there's not many very engineering background experience people that are also really good at product and can do design. I guess how deep do you need to be in each of these functions to be successful in this role? Because it feels really rare.

**Claire Vo** (00:51:51):
Start a company and then you have to do it, in some ways. I've worked for both and they've told me, I've worked for two, they go, "I'm not a founder, but I'm the CEO." And I go, "That's fine. I'm an operator, but I'm going to bring a founder mindset."

**Claire Vo** (00:52:08):
And so I think as a founder, especially early stage, you do all of this. You see how all of this is one person, because honestly sometimes it is one person, and sometimes that person is you. And so I do think working in a very small startup gives you the opportunity to experience a breadth of functional skills and develop a breadth of functional skills that can set you up for this kind of role much further down the line. I do think early stage startup experience is one of those shortcuts to getting visibility here.

**Claire Vo** (00:52:46):
I think the other thing is, again, I said this earlier, so many people get siloed into, "I'm a product manager, and so my job is this, but it's not that. And I can only do this, and if designs are needed, I am blocked and I will just wait." And I just give permission for people to make... We have a leadership principle inside our team that's like, "There are no lanes." Our lanes are dotted. They're not solid in that you can shift over and pencil out a design, an engineer can write a spec. All those things are fine. They're natural, they're normal, and I actually think they're quite healthy. And it's that kind of thinking that probably is going to breed the type of leaders that could do this type of role.

**Lenny** (00:53:29):
Awesome. It reminds me at GitLab. I just interviewed their head of product, or CPO, and they have a core value of, "Short toes." Don't worry about stepping on people's toes. Have short toes. Don't worry about people getting into your stuff. It's all good.

**Claire Vo** (00:53:43):
Yep.

**Lenny** (00:53:43):
Okay. You mentioned AI. Amazing segue to my next topic that I want to spend some time on. You built a tool called ChatPRD. My guess is it's the single most popular AI PM-specific tool out there, other than some big company's tool like, I don't know, Sprague or Figma or something like that. First of all, just what is ChatPRD, and then why did you build it?

**Claire Vo** (00:54:06):
Yeah. ChatPRD comes out of, again, pace setting. And I'll actually tell you the real genesis of ChatPRD, which is at a previous company we had a quite technical product we needed to build. We're scrappy and resource-constrained, and our platform PMs were working on something very important, but this was critical and we needed to get it done. And we didn't really have a platform technical PM to spec this thing out. And it was quite complicated.

**Claire Vo** (00:54:35):
And I raised my hand and I said, "I'll IC this. I think I know what we need." And between the beginning of the meeting and the end of the meeting, I had used ChatGPT and a prompt to come up with a very serviceable PRD spec for this very technical product. And I took that prompt and that long-running ChatGPT thread and crafted the Claire version of a product leader or product person that could, with really solid consistency, output product specs, give good feedback, build out plans, build out tracking mechanisms and goals.

**Claire Vo** (00:55:20):
And so while I say, "She may just be a prompt, but she is prompt," this was lovingly crafted over several months. And so when the GPT Store came out, for my team I just said, "Hey, you all know I've been writing PRDs with ChatGPT." I created a GPT and just gave it to my team. I was like, "Here, you can use this if you want it." And they really liked it, and other people started asking about it and I eventually ran into the monetization and access wall that is the GPT Store right now. And so I've also been having a lot of fun coding again, and so I thought, this is easy. We're just going to stand up a standalone app and wrap, come on, it's a wrapper, it started as wrapper, wrap some of these capabilities and just publish it and put a fairly reasonable price tag on it and see what happens.

**Claire Vo** (00:56:12):
And now, I have thousands of people using ChatPRD. Every day, people are creating dozens of specs and PRDs every month. It's everything from, "I'm an engineer on a team with too few PMs and I get blocked, so I'm going to build my own requirements," to, "I'm a solo founder and I need to put some structure on my thought for my team," to, "I'm a PM and this has saved me truly hours of work to get the basics of my product requirements done so I can spend time on the details." And then I've added on more functions and capabilities than the standalone app. It is my personal product copilot that I've released for the world.

**Lenny** (00:56:49):
Okay. First of all, where can people check this out? Is it chatprd.com?

**Claire Vo** (00:56:53):
.ai. Come on.

**Lenny** (00:56:54):
.ai, of course.

**Claire Vo** (00:56:54):
Yeah, chatprd.ai.

**Lenny** (00:56:58):
I saw some stuff about the country that has .ai is just making so much bank right now.

**Claire Vo** (00:57:01):
So much money.

**Lenny** (00:57:02):
All these domains.

**Lenny** (00:57:04):
Then in terms of the stack, just to be clear, so it started as a ChatGPT prompt, custom prompt, you evolved, then it became a GPT, a custom GPT, and now it's your own app that is using the OpenAI APIs behind-

**Claire Vo** (00:57:17):
It is, yeah. It's using the assistance APIs. And what's different about the standalone app versus the GPT is every person that uses the standalone app gets a customized assistant. It learns from their specific content. It learns from their role. It learns from their company. If you use the GPT version, you're not getting that customization. When you use the standalone app, you are getting that customization. And then I've layered on a couple of different capabilities. In addition to having the chat format, it will actually create the document for you and iterate on the actual doc for you, and then working on some additional tools and integrations in the future.

**Lenny** (00:57:55):
Okay, great. What are the most common use cases again? Just so people can get a sense of, "Oh, let me use this for these things."

**Claire Vo** (00:58:00):
Yeah, about 60% of people use it to put in an idea and get a PRD out. Just get the specs of what are my objectives and user goals, what are user stories, what is out of scope, walk through the UX. In our standard template, I have what's called a narrative, which is, how do you pitch this product? Which I feel like is a thing product managers miss a lot, which is how to position and pitch it, sequencing and milestones, measurements and goals, all those sorts of things.

**Claire Vo** (00:58:33):
Now, that's the out-of-the-box template. As I said, you can actually customize what your PRD template is in ChatPRD if you do something different or want something different for your company. About 60% of people are using it for that. 30% of people, I would say, are using it to put in a spec or a PRD or a strategy doc or a roadmap and improve it. And then the rest are using it to brainstorm ideas, internal PM work. How do I come up with a good agenda for X, Y, and Z? That kind of stuff.

**Lenny** (00:59:02):
Amazing. Okay, so I wrote a post recently sharing a bunch of examples of how people are using different GPT specifically at work, and I think it's spurred a lot of people to experiment with this stuff. If there's one tip that you could share for someone that's trying to build a GPT or their own custom app using APIs, any advice?

**Claire Vo** (00:59:24):
Prompt matters. We went through this whole cycle of prompt engineering is a thing, it's not really a thing, fine-tuning is... Prompt really does matter, and a good PM, I do competitive analysis. I use the same input and look at different GPT or ChatGPT. I look at the GPT Store version, I look at other PM tools that do this and I look at mine. I think mine is actually better.

**Claire Vo** (00:59:50):
And then I'm getting into a mode now where I may do some model experimentation and tuning behind the scenes, so it might not be OpenAI, it may be other things, but it matters. The instructions matter, the context matters for the quality of the output is something that I would say when building these kinds of products. I think the other thing is there is no solution right now for monetization. Knock on wood, open it and we'll figure it out. If I had more time, maybe I would create a platform out of what I've created for ChatGPT to let other people monetize their GPTs and add on capabilities. But it's not out of the box yet for folks. There's a lot of work that I had to do to get it from here to there.

**Lenny** (01:00:31):
Are you making real money with this thing? And is it an idea that this becomes the thing you do someday maybe long term?

**Claire Vo** (01:00:38):
My original goal, and I said this out on X, my original goal is I just want to buy a nice glass of wine a week. That was my goal. I could buy cases of wine now. This is very exciting for me. It's making what I would consider real money. Is it a venture scale thing? No. Does it need to be? No. I have a goal around my kids' education expenses. I would love for this to cover a little bit. I have a ambitious but not audacious goal for ChatPRD.

**Claire Vo** (01:01:13):
The other goal that I have, which is, let's put monetization aside, is this is my joy space, zone of genius joy space. And my goal with ChatPRD is it has to be a hundred percent fun for me. This is my hobby, so I'm not doing anything that makes it not fun. It is a pure bliss space for me. I get to code on the weekends, I get to do customer support at night, and I get to build things that I would use. I get to learn new technologies. I want to keep it in that space because it provides a lot of joy for me. Put money aside, I just want it to be fun.

**Lenny** (01:01:51):
Love that. Okay, so some people listening to this, especially PMs, may be like, "Claire, what the hell are you doing? Are you going to replace product managers in a year or two?" This connects to something I've just generally been thinking about and that's come up a bunch, is just over time, which skills and jobs of a product manager will be greatly enhanced by AI and which will be completely replaced by AI, if any, so that people can understand which skills they should be investing in and which maybe are less important.

**Lenny** (01:02:22):
I guess just broadly, do you have a sense of just here's skills that are going to continue to be incredibly important and AI will not take these skills and jobs off your plate? Versus, these are going to be the less important, AI will do these?

**Claire Vo** (01:02:36):
At the highest level, I tend to be very short-term pessimistic, although I'll frame that short-term pessimistic and very long-term optimistic. I am a big believer that technology has made society generally much more affluent, wealthier, happier, healthier. I am a big believer in technology and I am optimistic about its impact on the human race. There are lots of things that are not going well, but I really do believe that innovation and technology, I'm excited for my kid's future. I'm not afraid of it.

**Claire Vo** (01:03:11):
Now, that being said, I am of the mind excitedly that this is going to change stuff in companies incredibly quickly. And part of building ChatPRD is I hold myself to the bar as a technology leader, I need to be leading the league on understanding what this can disrupt, using these tools to make a better team, and actually shifting the size and shape of my organization in response to the technology around us. Is it going to eliminate PMs next year? Probably not. Are the ratios between PMs and other teams going to shift over time? Yes. Are the skills required going to shift? Yes. Could they shift much faster than we all anticipate? Probably. I think there's a lot of change coming and I want to be prepared for it.

**Claire Vo** (01:04:00):
Now, what do I think this replaces and what does it not replace? I was reflecting on this question and communication, lowercase C, I feel like is one of the places that's going to be replaced. And I call it lowercase C. It's the functional trading of information that allows other people to do jobs. I think that these language models and these tools are really good synthesizing information, putting together communication, and can coordinate who that communication goes to and get it out in many modalities of content.

**Claire Vo** (01:04:41):
And so I'm really thinking about the PM as the keeper of cross-functional relationships and communication is really, I think, potentially going to change. Now, but capital C communication of are you influential? Are you convincing? Are you bold? Can you get this system of humans to follow you down a path? That's, I think, going to be much harder to replace, and so I'm thinking about the edges of communication and where they'll change and what they won't.

**Lenny** (01:05:15):
That's really interesting. I did a little poll on Twitter asking people of between communication, execution, strategy, and product sense, which skills are most likely to be basically taken over by AI. And communication was number one, by far. I have a contrarian perspective. And strategy was the least voted. I feel like, so strategy work is essentially, "Here's everything we know about the world and competitors and the market and our advantages. Here's a plan to win in the market essentially." I feel like that's what AI is incredibly good at.

**Claire Vo** (01:05:49):
I agree with you. I totally agree with you. I think, and again this comes to synthesis, good decision-making, and communication, if you can synthesize, distill it into a plan and communicate that plan, I found these tools exceptional. Use ChatPRD and give it a try.

**Claire Vo** (01:06:09):
Now, I think it's the human aspect though of boldness, seeing the future in a way that a thing trained on priors cannot. Those things I still think, and then charisma and attracting all those things to actually make the thing happen are pretty hard to replicate, which is why I love using ChatPRD. I'm not going to come up with the most genius way to do data export for Snowflake for some... That is a solved area that we should just scaffold up. I should customize it to what we do, and then we should ship it. That is not a place where my magic skills as a human are going to impact.

**Claire Vo** (01:06:54):
But I don't think a lot of PMs see it that way. I think there's this real identity shift that's going to happen where PMs think that their value is coming from their ideas that they manifest into the world and how they individually manifest them. And I think we're going to shift to, are you building the right stuff? Are you building it quickly? And is it delivering? No matter what the tool chain is.

**Lenny** (01:07:19):
Yeah. I think your point about getting buy-in and getting everyone aligned, I don't know how an AI bot does that unless everybody's got their own little bot and they're all talking to each other.

**Claire Vo** (01:07:29):
They all just get along.

**Lenny** (01:07:30):
We're in. I'll [inaudible 01:07:32] this a little higher.

**Claire Vo** (01:07:32):
Yeah.

**Lenny** (01:07:33):
I actually made this list. I feel like this could be the entire podcast, but I made it a quick list of, "Here's the jobs of a PM." And it's interesting. I don't know if this is really a question, but it's just interesting to think about which of these will some ChatPRD maybe do in the future. What does the job feel? You're writing PRDS, you're setting goals, proposing a roadmap, aligning a team behind a roadmap, developing a strategy, developing a vision, communicating timelines, finding blockers, and unblocking people, getting buy-in from up on high, getting budget resources for your team, giving feedback on product and design. Those are just some of the day-to-day jobs. I'm so curious just which of these AI can actually just do and not have to worry about it.

**Claire Vo** (01:08:17):
I think a lot of them AI can do. And so the question is, which of them do you want to hand the keys to an AI tool? And which of them are going to be much more valuable as a tool that an individual or a team's intellect can use to do a better, faster, higher impact job?

**Claire Vo** (01:08:38):
Again, I believe in technology and I think this stuff, what's interesting about this moment right now is every week I see something that I would not have in a million years thought was possible three years ago. Every week, something new comes out where it just changes my mind of what's possible. I believe all of those are 80% good functionally tractable. The question is, is 80% good functionally tractable the best way to do that? Or can we take a certain type of person with a certain skill set backed by a purpose-built toolkit and make it 3X better, 4X better, 10X better? I think that's the more interesting question.

**Lenny** (01:09:16):
I think on the point of amazing things are happening every day, we had SpaceX launched the Starship and it was barely mentioned anywhere. We have the spaceship that could take us to Mars and, "Meh, we don't need to talk about that."

**Claire Vo** (01:09:31):
We get the kids up and stream it on YouTube.

**Lenny** (01:09:32):
Oh, that's awesome.

**Claire Vo** (01:09:33):
It's magic. We live in this magic time. I think it's so fascinating. But I agree, we're getting spoiled by innovation.

**Lenny** (01:09:41):
You said that there's this ratio that might shift with product managers, engineers. I'm curious which ratio, because engineers are also getting more efficient, and so it's interesting if the ratios will be consistent as engineers become more efficient, PMs get it more efficient.

**Claire Vo** (01:09:53):
I wonder if whole roles get eliminated and replaced, and then ratios aren't even the right way to think about things. There's the ratio of this PM role to this many, one PM to seven to 10 engineers or one EM to... There's those ratios.

**Claire Vo** (01:10:12):
I also think there's going to be this interesting shift of as a manager, as a leader, how you allocate budget against tools and people I also think is going to shift. And I saw something where somebody said that every role that they got asked to open, the team had to spend a week trying to automate it before they were allowed to open the JD. It's just this very interesting... In my mind people, think that's scary and it's going to reduce jobs. Yes, and I do think there's also potentially other jobs that open up that can become very interesting.

**Claire Vo** (01:10:45):
And so I don't know how it's going to pencil out. I really don't. What I do know is things are going to change and I, as a leader and a person that cares for people's long-term careers, want to be much more forward-thinking than close my eyes to what the possible maybe dramatic changes are in our industry. I'm thinking about it, I'm experimenting with things, and I'm hoping that in our team in LaunchDarkly we're leading from the front here as opposed to on our back foot.

**Lenny** (01:11:17):
I'm thinking many people listening here are like, "Okay, I need to get on top of this. I need to stay ahead. I want to follow Claire's lead." Is your advice simply create GPTs, play with ChatGPT? Is there anything else there to help people?

**Claire Vo** (01:11:29):
I also think PMs need to be thinking about building product skills particularly around these non-deterministic products. It's been [inaudible 01:11:40]. Part of why I built ChatPRD is not just to stress test how these sorts of things are going to change the product function. It's literally, this is a new type of product built by a new type of technology and it's moving very fast. And learning how to build these kinds of products, if you can do that, I just think back to when mobile happened, if you're a PM that jumped on mobile, you had the pick of the litter when it came to jobs in very interesting startups.

**Claire Vo** (01:12:11):
And so I think we're in the same moment here where, if you can ratchet down and specialize and learn a new technology, you actually can get into very interesting positions. Those are both of my motivations on ChatPRD, is understand how it impacts the function that I lead, but also understand how to build a great product with these underlying technologies that are just much different than the technologies that I personally built on before.

**Lenny** (01:12:37):
And so for someone, let's say, not super engineering-oriented, I guess how do you recommend people on your team explore this sort of thing? Is it [inaudible 01:12:46]?

**Claire Vo** (01:12:45):
Yeah. I do think studying products that are out there is quite interesting. I love this idea of doing outside-in product tear-downs. What is good about this? What is bad about this? How would I have written the PRD here? What would I be measuring? How would I think about error states? How would I think about if this is a great product, a good product, or an okay product? I do think doing that sort of crit on an external product can be a really accessible way to start to stress test your own skills around this and figure out where there are gaps.

**Claire Vo** (01:13:20):
That's one thing I think you can do. Two, I think there's a lot of no-code, low-code stuff you can play with. Even if you can't put your hands on keyboard and write code, you can certainly stitch together things and try some no-code tools. That's another way to do it. The other thing is find where it's fun. I think how fun is Midjourney? How fun are some of these more creative tools? And so find where there's something fun and build art out of it as a mechanism for learning. It doesn't always have to be commercially driven. It doesn't have to be part of work. It can just be find a space that you're personally interested in and play with what's out there.

**Lenny** (01:14:00):
Awesome. One last question about ChatPRD. With Copilot, there's all these stats. It's making engineers 50% more efficient, whatever percentage. Do you have any sense of efficiency gains so far with ChatPRD?

**Claire Vo** (01:14:14):
I have qualitative feedback from product managers who have used ChatPRD, who have said, "This has saved me dozens of hours I would've spent on writing documents." And another person said, "I am a single PM on a team that's growing and I don't think we're going to have to hire another PM now." There's the people, there's both the individual aspect and the hours aspect, which is it's helping individuals PMs get higher leverage across a broad engineering or building team, and that it's helping them spend their time more effectively.

**Lenny** (01:14:57):
Many people don't want to hear that they don't need to hire a PM. There's many people looking for jobs right now.

**Claire Vo** (01:14:59):
It's true, but we can't... I think we saw this in the last couple of years. Inefficiently hiring and building unsustainable costs into a company leads no one to success. And if that's a lesson that I can teach anybody, it's sustainability in organizations is the responsibility of a leader. Yes, I would love to give everybody positions. There are not positions to have. And the best I can do for the people in the team is be really responsible and really thoughtful about that because that helps me grow their careers and helps me sustain their careers long-term.

It's incredibly complicated, but also on the flip side, this is a very small startup. They can't afford another PM and they're extending their runway to build something transformational by not growing the team. And so, yes, people [inaudible 01:15:57] their teams and have these jobs and startups can't afford it, and they still have great things to do in the world.

**Lenny** (01:16:04):
Great answer. To start to wrap up our conversation, I have these two segments, Failure Corner and Contrarian Corner, and we can pick which corner you want to head to. Would you like to share a story of your career where you failed and something you learned from that? Or something you believe that most people don't believe? Which corner sounds more interesting?

**Claire Vo** (01:16:24):
I'll take Contrarian Corner.

**Lenny** (01:16:26):
Let's go for there.

**Claire Vo** (01:16:27):
Yep.

**Lenny** (01:16:28):
I need some sound effects for these corners. Do share.

**Claire Vo** (01:16:33):
I'm sharing this because you just released your podcast with Marty again. And I'm a sales-led product apologist unabashedly, which is, I think that it is okay to listen to the market and to be commercially oriented in products in ways that probably would make some folks in some types of product organizations squirm a little bit. And the reason why I believe this is I think there are tremendous businesses built on sales-led motions. And I disagree with the fact that that means you do not care for the craft or the experience of users. I think it can be the best of both worlds.

**Claire Vo** (01:17:19):
I love sales. I say if I was not in this role, put me on a quota and make me enterprise West. I love to sell, but I think product teams, this opposition we have industry-wide with sales-led I'm not convinced is healthy in every organization. And I was listening to the podcast and I think you all were talking about, you said, "SAP is like this. And who wants to be SAP?" Man alive. There are a lot of companies out there that would love to be SAP, now with a better product, with better experience, with more love from the industry maybe. But what a powerhouse company. And I think we as PMs turn our nose up to powerhouse companies too often because we want companies to be product-led, not sales-led.

**Lenny** (01:18:07):
Amazing. I'm going to not go deeper into this topic because I don't want to be speaking on behalf of Marty's perspective, but there's so much debate that came out of that episode and I love that it trickles to more opinions being shared about ways product can work.

**Lenny** (01:18:20):
I guess, just to understand your takeaway here, is sales-led companies can be awesome. They can build amazing businesses, and it can be great to be a PM at a company like that.

**Claire Vo** (01:18:27):
Yeah, and they can build great products.

**Lenny** (01:18:30):
Great. Claire, is there anything else that you want to share or leave listeners with before we get to our very exciting lightning round?

**Claire Vo** (01:18:39):
I will say, because we've been talking a lot about AI and replacing PMs, I love to sell. I love to help people get jobs, so if there are ways that I can help people find great fit companies, it's one of the things that I get a lot of energy out of. I just want to say that in the world. It's something that sparks a lot of joy. I get a lot of it inbound, "Can you help me get in here? Can you help me get there?" But if there is a tractable way that I can help you get to a connected to a company or a role that you think is great for you, that's fun for me and I'm totally open to it.

**Lenny** (01:19:09):
How would people reach out to you to try to help you get them [inaudible 01:19:13]?

**Claire Vo** (01:19:15):
I am, of course, on LinkedIn. I'm on X at ClaireVo, all one word. And then if you really want to go into the archives, I have a very fabulous TikTok where I'm ChiefProductOfficer. It's all one word.

**Lenny** (01:19:27):
Amazing. We'll link to all these in the show notes. And we will refresh these two facts at the end of the podcast anyway, because I always ask this anyway. Before we do that, welcome to our very exciting lightning round. Are you ready?

**Claire Vo** (01:19:28):
I am so ready.

**Lenny** (01:19:41):
Okay. First question, what are two or three books that you've recommended most to other people?

**Claire Vo** (01:19:46):
High Growth Handbook I love, and I like Scaling People. These are two books that the reason why I recommend them to people is because they have solid playbook answers to 80%, 90% of everyday leadership scaling people questions. And so they're just great reference books for what I think great leadership inside startups can look like, and they solve some of the things that you don't need to solve novel-ly. And then one on the fiction side that I've been recommending is Circe, which is a retelling of Circe's story from her perspective. It's a great read, and everybody I've recommended it to really loves it.

**Lenny** (01:20:28):
From Game of Thrones?

**Claire Vo** (01:20:31):
No, Circe from the Odyssey. Odysseus [inaudible 01:20:34]. She turns men into pigs.

**Lenny** (01:20:36):
[inaudible 01:20:36] lack of culture.

**Claire Vo** (01:20:37):
It's great. My kids are very into Greek mythology, so this is me meeting them on my side.

**Lenny** (01:20:42):
Amazing. The first two books are both Straight Press. Shout out to Straight Press.

**Claire Vo** (01:20:46):
Yeah, Straight Press.

**Lenny** (01:20:47):
And I have both books in the back there, and my laptop's actually sitting on Scaling People.

**Lenny** (01:20:52):
Next question. What is a favorite recent movie or TV show you've really enjoyed?

**Claire Vo** (01:20:57):
I have kids, so I don't get to go see movies. Movies are, that's an adventure. It's basically a vacation. I saw Poor Things, which if you like capital W weird capital A art, highly recommend Poor Things. The show that I recommend to people, I love Mythic Quest. Everybody references Silicon Valley, but Mythic Quest gets at some of, I was in gaming once, gets at some of my experiences in the technology organizations. It's got a technical female lead and think it's quite funny. I like Mythic Quest.

**Lenny** (01:21:31):
Do you have a favorite interview question that you like to ask candidates?

**Claire Vo** (01:21:31):
I like to ask candidates how they would improve our business model. I think so many PMs come in with a point of view of the product and the target market but don't actually understand the underlying mechanisms of how we make money and what our unit economics are and how that could be improved. And the candidates that do come in and have a strong point of view on business model often are pretty successful in our organization.

**Lenny** (01:21:55):
And what do you look for in a good answer that's, "Oh wow, this candidate's great?"

**Claire Vo** (01:21:59):
It's thinking along the chain of value from how do we identify people in the market? What does our pricing model look like? What could they hypothesize our underlying unit economics or cogs are? And then where are their points of leverage along that whole funnel? It's really, do they have a mental model for thinking about a business model? Have they thought at all about how we make money, either top line or margin? And then can they identify places where they might improve it?

**Lenny** (01:22:28):
Awesome. Basically understanding the business really well. Great.

**Lenny** (01:22:30):
Do you have a favorite product that you've recently discovered that you really like?

**Claire Vo** (01:22:36):
Okay, I'm going to make you laugh because you've gotten all these cars, right?

**Lenny** (01:22:40):
Yeah, I have such expensive cars.

**Claire Vo** (01:22:42):
You've got expensive cars. It's not new, I love my minivan. I am a big fan of my minivan. As my friend says, "It's like driving around your living room." And when you have two kids, you know what I want to do? I just want to drive around my living room, Bluey included. And so no Rivian, no Mercedes-Benz, but I really love my Pacifica.

**Lenny** (01:23:06):
Pacifica? Okay, I was going to ask.

**Claire Vo** (01:23:07):
But the actual car product that I really love, I love Waymo. We're in San Francisco, we've got these autonomous vehicles. It is, top to bottom, just a lovely product experience from the app to when it shows up, the sound design is great, the cars are comfortable, the displays in the car are great. It is, now every time a tourist comes in, a friend comes in to visit San Francisco, I make them take a round-trip ride in a robot car. And then even I've had a customer service experience with the Waymo team where my friend left an iPhone and [inaudible 01:23:44] and customer experience was great, 24-hour service. Top to bottom, great product design, great service design.

**Lenny** (01:23:53):
I just got into Waymo actually in the wait list, and so I'm excited to actually try it. I was actually treated as press early on to ride in a Waymo with a person from the company, just to experience it. And then I never got access to it after. Now, I finally can try it.

**Claire Vo** (01:24:08):
Enjoy. It's so nice. It's my preferred mode of travel.

**Lenny** (01:24:12):
The future. We've talked about a lot of ways the world is changing. That's another great example.

**Lenny** (01:24:18):
Two questions to go. Do you have a favorite life motto that you often come back to, share with friends or family they find useful in work or in life?

**Claire Vo** (01:24:26):
Fast beats right. Every time when debating between, do I noodle this for a thousand years and try to come to the perfect solution or do I make a decision and get executing and direction I have conviction on, I consistently see and believe that fast at the end of the day, wins. Fast beats right.

**Lenny** (01:24:51):
Final question. You mentioned TikTok. You put a bunch of awesome content out on TikTok. Any advice, slash is there a tip you could share with someone that is trying to be successful on TikTok from your experience?

**Claire Vo** (01:25:03):
I've been neglecting my TikTok for a little bit with new job and winter with sick kids. This is my advice, and I think you know this, consistency drives audience growth, which is, when I was on TikTok posting every day, you would get followers and engagement and the algorithm would bless you. And when you don't, you don't. I think consistency in almost all things wins.

**Claire Vo** (01:25:27):
The other thing that I think is a really good advice for any quote-unquote creator of whatever scale, of whatever ambition, is I think thinking about content creation as documentation, not creative generation is really helpful. I just like to talk about what I think about at work and I like to, an interesting meeting or interesting interaction, document why I thought that was interesting or what could be done better. And that becomes the basis of a very natural flow of content for me. It's a tactic that's worked really well for me and helps me do stuff in my free time.

**Lenny** (01:26:00):
Amazing. It might be time to start exploring Instagram also with all this TikTok news.

**Claire Vo** (01:26:05):
I know. Yep.

**Lenny** (01:26:06):
Claire, before we started this podcast, I asked you what your goal for this was, and it was to be helpful to people. I think we've 100% done that in so many different ways. Thank you again so much for being here.

**Lenny** (01:26:16):
Two final questions. We already covered these, but just to refresh people's memories, where can people find you online if they want to reach out? And then how can listeners be useful to you?

**Claire Vo** (01:26:24):
LinkedIn, X, I'm ClaireVo, all one word. And then on TikTok, get me back into it. Give me a follow, maybe I'll start posting some of my excellent content. But it's @ChiefProductOfficer.

**Lenny** (01:26:37):
Awesome. And then how can people be useful to you?

**Claire Vo** (01:26:41):
Help each other. That's what I want the most, which is I do really see, it is a tough time in tech right now and there are a lot of people looking for jobs. One, I think help each other. And then the other thing that I really, if I could ask your audience anything, is if you have a job where your job is typing into an internet box to create products out of nothing, really acknowledge the privilege and joy of that job and try to have some fun because a lot of people want to sit where you're sitting. Have fun. Appreciate what you have. Enjoy it. Enjoy each other.

**Lenny** (01:27:13):
Great and important advice to leave people with. Claire, thank you so much for being here.

**Claire Vo** (01:27:13):
Thank you.

**Lenny** (01:27:18):
Bye, everyone.

**Lenny** (01:27:21):
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.

---

## [3/21] A framework for finding product-market fit | Todd Jackson (First Round Capital)

**Todd Jackson** (00:00:00):
Finding product-market fit is the single most important thing that your startup does in the first three years, and it's just underexplored and it's just underexplained as a topic.

**Lenny Rachitsky** (00:00:08):
You've been working on a product-market fit framework.

**Todd Jackson** (00:00:11):
We've published dozens of articles on the First Round Review, and we have found a very consistent set of patterns, demand satisfaction, and efficiency. But the interesting thing is that you don't go for all three of them from the very beginning.

**Lenny Rachitsky** (00:00:22):
There's essentially four levels of product-market fit: nascent, developing, strong, extreme.

**Todd Jackson** (00:00:27):
Roughly, 60% are never going to get past L2.

**Lenny Rachitsky** (00:00:29):
These four Ps is essentially what you should try to change if you're stuck.

**Todd Jackson** (00:00:34):
You've got the persona, the problem, the promise, and the product. Lattice kept the first one but changed the others. Vanta changed all four.

**Lenny Rachitsky** (00:00:41):
Hearing level three tells me level two is basically your pivot from: I'm just grinding, selling, pitching.

**Todd Jackson** (00:00:47):
This is where it starts to get fun.

**Lenny Rachitsky** (00:00:53):
Today my guest is Todd Jackson. Todd is a partner at the legendary VC firm, First Round Capital. I rarely have VCs on this podcast, but as Todd shares at the top of this episode, Todd is a very special VC. Prior to moving into venture, he was product lead for Gmail for four years. He was product manager of Facebook's newsfeed, photos and groups, including leading a major redesign of the newsfeed. He's also a director of product management at Twitter and VP of product and design at Dropbox.

**Lenny Rachitsky** (00:01:21):
He's also a founder and sold his company to Twitter. This episode is a very different and special kind of episode. Todd and the team at First Round have spent the last year looking at all of their data and the journeys of the hundreds of startups that they've worked with over the years. And through that, have put together a very practical and very actionable framework to help founders find product-market fit. They're turning this framework into a three-month program for founders, and in this conversation, Todd shares an exclusive peek into the program, in particular, the stages of product-market fit.

**Todd Jackson** (00:04:56):
Lenny, I'm excited to be here. Thank you for having me.

**Lenny Rachitsky** (00:04:58):
So first of all, just to mention you're a VC, which is very rare for this podcast. But you're a very special VC, you have a deep background in product, and I thought it might be helpful just to give a little bit of context on your product background, your product bona fides so people will get a real sense of just how legit you are as a product thinker.

**Todd Jackson** (00:05:17):
Yeah, you got it. So I am a VC. I'm a partner at First Round Capital now, and I've been at First Round for four years. But I was not a VC before First Round. So I started a company in 2013 called Cover, and that was actually funded by First Round 11 years ago. That's how I got to know First Round. And before that, I had worked on Gmail as the product lead in the early days, early 2000s and at Facebook.

**Todd Jackson** (00:05:39):
And then I started Cover, and we ended up selling Cover to Twitter in 2014. And I worked on a bunch of different products at Twitter. And then I was the VP of product and design at Dropbox. That was 2015 to 2018. So I have always loved product, and that's actually the reason now that I love being a seed stage VC because I love investing at the early stage founders who are pre-product-market fit and then helping them get there. And I just love doing that over and over again.

**Lenny Rachitsky** (00:06:07):
I feel like we could have a whole other podcast episode on why you decided to move into venture versus staying in product.

**Todd Jackson** (00:06:12):
We can do it.

**Lenny Rachitsky** (00:06:13):
But we're going to stay focused. So the reason we're here is that for over a year, you've been working on a product-market fit framework, essentially, a framework to help founders and product teams find product-market fit, which we should talk about this. But this is the most important thing you've got to get right as a founder in a product team is finding product-market fit. I got a peek at this framework. I love it. I love the way you've structured it, the way you're thinking about it.

**Lenny Rachitsky** (00:06:36):
So what we're going to do today is walk through this framework in depth. First, I just want to spend a few minutes on setting a little context just so people understand who this is for and how to think about this. So maybe a first question is just why do you believe people need a framework for finding product-market fit? And just also, if you want to touch on why is product-market fit so important? Why is that something people should even be thinking about?

**Todd Jackson** (00:06:57):
The thing about product-market fit is that I find it's mysterious to a lot of people, and people tend to think about it purely as an art rather than a science. And all the advice that you find out there on the internet is very general when it comes to product-market fit. You'll know it when you see it, you'll know it when you have it. It's not specific. And there's so many other startup topics where there is good content on the internet like hiring your first salesperson, running board meetings, stuff that is specific and tactical. But there isn't that much content around product-market fit that is that specific.

**Todd Jackson** (00:07:33):
And so I think that's actually why Rahul from Superhuman is well-known for his approach to finding product-market fit. That was published on the First Round Review in 2018, and it was immediately popular and interesting to people. And I think the reason is because it was specific and because it was tactical and it brought a little bit of the science to something that people thought was just an art. And I think it's why your content is really popular too, Lenny.

**Todd Jackson** (00:07:57):
You and I worked on this product validation article together a little while back, and the seven part series that you did on B2B SaaS companies and the PMF benchmarking data that you had, I think it was how long it took to get to a product and a customer and to product-market fit, that was super well-read. And there just isn't that much good specific content about this. But like you said, product-market fit is the single most important thing that your startup does in the first three years and it's just underexplored, it's underexplained as a topic.

**Todd Jackson** (00:08:28):
So we felt this was a very important thing to do, something worth focusing on. And I've personally talked to hundreds of founders about this topic. We've published dozens of articles on the First Round Review. We call this our Paths to Product-Market Fit Series where we interview founders about the early days. And I'm just always interested in what are the patterns. If you talk to enough successful founders, and in this case, it can be enterprise founders, and you ask them, "What did you do in the first six to nine months of running your company, of starting your company? What patterns emerged from that?" And we have found a very consistent set of patterns, and that's what we decided to base our framework around.

**Lenny Rachitsky** (00:09:07):
Amazing. And I think you're at such an interesting Venn diagram of exposure to develop something like this. One, you have a deep product background, you started a company, you see tons of startups going through the journey, many succeeding, many not. So I get why one, you wanted to do this and why I think this is going to be so valuable to a lot of people. You talked briefly about why product-market fit is so important, and maybe it might be helpful just to share a little bit more just why is this something people should be so obsessed with and why did you spend so much time developing this?

**Todd Jackson** (00:09:40):
I think as a founder, there are so many things you have to do. You have to pick a market, you have to find a co-founder, you have to hire a team, you have to raise funding, you have to build a product, you have to sell a product. And so sometimes it gets lost that actually, the only thing that matters in the first couple years is finding product-market fit and actually, what we define as extreme product-market fit, and I'll go into that. Because if you find extreme product-market fit, the momentum just carries you, and the market pulls you along. And it's easy to know what to build because you're building the thing that your customers want and it's motivating as a team. It's easy to hire people, everything becomes easier if you find product-market fit, it is the thing that propels the company.

**Todd Jackson** (00:10:25):
And so we are a seed stage venture firm. We tend to work with very early founders who are pre-product-market fit. And the hard truth about it is that most of them don't get past the first couple levels of it. The majority of startups do not get past, what we call, level one product-market fit or level two product-market fit. And I'll go through and define all that stuff. They get stuck at one of those first couple levels. And if they can unlock the right product and the right way to explain it to a customer and make a customer deeply satisfied, and there's enough customers out there like that, it just pulls the whole thing along.

**Lenny Rachitsky** (00:11:02):
Who is this framework for specifically? And for people that are listening, how do they know if this is for them or not?

**Todd Jackson** (00:11:07):
This is for early B2B founders, and specifically founders who are doing something that is more sales-led than bottom-up. I think bottom-up is its own world. It's closer to consumer product development in my mind. And I have done consumer products. Consumer product, I think there is a little bit more alchemy involved. It's about having great taste and finding the right thing at the right time and it's like catching lightning in a bottle.

**Todd Jackson** (00:11:36):
I think the good thing about enterprise, and specifically sales-led B2B, is that there is more science to it. And so it is for sales-led B2B founders who are in, let's call it, the first six to nine months of starting their company and want to set the foundation for product-market fit right from the beginning.

**Lenny Rachitsky** (00:11:53):
Awesome. Okay. So B2B founders, sales-led in the first six to nine months of their journey. Awesome.

**Todd Jackson** (00:11:59):
That's right. Yes.

**Lenny Rachitsky** (00:12:00):
You talked about the science of this. I imagine you don't want to overpromise this is going to help you find product-market fit, step one, two, three profit. How do you think about just what the benefits of this are and how people should think about the chance that they will find product-market fit at the end of this journey following this framework?

**Todd Jackson** (00:12:16):
We can't guarantee success here. I just want to contextualize that finding extreme product-market fit is very, very hard. And what we are trying to do is increase your odds, increase the odds, reduce the role of luck, give you a framework and way of thinking about the things that you need to do. And I think that that can increase the odds. Like I said earlier, the majority of startups are getting stuck at these first couple levels. I think if you know what the path looks like and you know what the levers are at your disposal and you know what you need to aim for, I think we can get more of these companies to level three and level four product-market fit, which is where you really want to be and where you have a very valuable company.

**Lenny Rachitsky** (00:12:54):
Perfect. Okay, final question. You launched a whole program for founders to go through and learn all of this in depth, many week kind of program. We're going to be covering a lot of it here for folks that want to go a lot deeper and actually go through this program. Talk about how they find this and how this program works.

**Todd Jackson** (00:13:11):
So we launched a new program, and we call it Product-Market Fit Method. It is designed, like I said, to help early B2B founders increase the odds of finding product-market fit. It's totally free, it's a very intensive program. You can see all the details at pmf.firstround.com, and the application deadline is May 7th. The program starts on May 29th. And we actually ran a beta version, a test version of this late last year with 11 founders, I think probably some you know, Lenny, from Stripe and Plaid and Airbnb and Twitter. And the feedback, it was great. It made me feel very good.

**Todd Jackson** (00:13:47):
One of the founders was like, "I feel like these 14 weeks saved me two years of time in what would've been wandering through the desert." And so there's eight sessions in the full program, and the first one is the one we're going to do today. So the first session is on what we call the levels of product-market fit. The second one is on customer discovery, and we actually refer to it as dollar-driven discovery. We get very specific about not just the normal way of doing customer conversations and customer discovery, but how do you find that a customer is willing to pay money for this thing and a lot of money?

**Todd Jackson** (00:14:22):
We talk about market validation, product positioning. We do a section on design partners because I think a lot of founders have questions about that. How do I find the right design partners? What's the right way to structure an agreement with them? How do I convert them to paying customers? All that stuff. We talk about product iteration and pivots, and I refer to this stage as the grind, the grind of product iteration. And then we spend a ton of time on founder-led sales.

**Todd Jackson** (00:14:47):
And the reason that we do that is we really like working with very technical founders, builders, people that are either engineering background, product design, data science, people who are builders. So that's the program in a nutshell. And like I said, any founder working on a new B2B SaaS company, welcome to apply. And then bonus points if you are technical, like I said, if you have a clear product idea or a hypothesis, but that you're less than six to 12 months into building the company.

**Lenny Rachitsky** (00:15:19):
I love how incentives are so aligned here. You help companies find product-market fit. If First Round does great, everyone does great. It makes so much sense to build something like this. One thing I can't help but mention or ask about is you said it's an intensive program. How do you find founders have time to do something like this and also be building their company? I know this helps them build, but how do you just think about they have so much to do, they have time to do a program like this?

**Todd Jackson** (00:15:41):
The way that we think about it is that the program roughly takes about 10 hours a week for each founder, and it's 10 hours of work that you were going to be doing anyway. It is literally you're talking to customers, you're improving your positioning, you're doing critical thinking about your market and what you should be building. And so the way I think about it, and the way I've heard from the 11 founders that went through it is it just added structure to what I was doing anyway and it actually made me more efficient.

**Lenny Rachitsky** (00:16:10):
Last question, you mentioned that it's free. How does that work? How does that work for everyone?

**Todd Jackson** (00:16:14):
So it's 100% free and literally, it costs you $0. We give you $0, we own 0% of your company. And it's pretty different than I think a lot of other programs out there. And this is just something we do. Over the years, we've run First Round Angel Track, which I know you were in, Lenny. We've run the First Round Review for 10 years. We make these things free and our belief is that you have to create value in the ecosystem.

**Todd Jackson** (00:16:36):
You have to put stuff out in the world that is useful, and if you can create that value, create enough value with the audience, then you'll be able to capture that value at some point. And so we think there's a win-win here. We get an inside look at some of tomorrow's great companies and they get an inside look at First Round.

**Lenny Rachitsky** (00:16:49):
Got it. So companies don't have to take money from you guys to be a part of this program.

**Todd Jackson** (00:16:53):
That's right.

**Lenny Rachitsky** (00:16:54):
Okay, let's get into it. Let's talk about this framework. Maybe just as a broad strokes overview, how does this framework work? How do companies find product-market fit?

**Todd Jackson** (00:17:03):
So the framework starts with a very simple idea that is product-market fit is not a one-size-fits-all thing, and it doesn't just happen overnight. And for B2B companies, specifically, it does tend to follow a repeatable pattern. And so we start with defining the ultimate goal. The ultimate goal is to get to extreme product-market fit. And we have a precise definition for this. Let me read it to you. So extreme product-market fit is a state of widespread demand for a product that satisfies a critical need and crucially can be delivered repeatably and efficiently to each customer.

And so there's three key ideas in there: demand, satisfaction and efficiency. And I think efficiency is worth highlighting because that's what most people would leave out of their definition. You talk about like, "Oh, it's a product, people like it. That's good, that's product-market fit." But if you look, there's products out there. I was a big fan of WeWork, as a customer of WeWork. And I'm a fan of Casper and these other products. Those products managed to achieve customer satisfaction and demand, but they never got the efficiency right, and so the whole business just never worked at scale.

**Todd Jackson** (00:18:18):
And my partner, Brett Berson, at First Round, he gives this example of the $100 vending machine, and I really like this example, which is imagine I built a vending machine and I stuck it in the middle of San Francisco. And you walk up to this vending machine and you put a dollar in and $100 bill comes out. And that's the product. That would have insane demand. There would be a line at that vending machine. I think people would be extremely satisfied. They'd be like, "This is awesome." The retention would be very good. I'm sure they would come back tomorrow. But the whole thing is it's ridiculous. The whole metaphor is ridiculous because it's just not viable to do something like that.

**Todd Jackson** (00:18:59):
And yet you see a lot of startups kind of do this. They're basically with their products, giving away $2 for $1 and it gets them pretty far. But that's not real product-market fit. And so that's one of the reasons that we think efficiency and how you think about the economic model of what you're doing is very important. And then this other aspect that I like, which is we have this concept that we call the marginal customer, and the next incremental customer you're going to get for your company, for your product. And if you have product-market fit, and as you are progressing along this journey, the marginal customer should be getting easier and easier and easier to get, easier to acquire them, easier to give them good service with a good product.

And that means your efficiency is increasing along the way and your product-market fit is strengthening. So you've got to have all three of those things: demand, satisfaction, efficiency. But the interesting thing is that you don't go for all three of them at once from the very beginning. And so product-market fit, it happens in the sequence of levels, it happens over multiple years. And for the best enterprise companies, I would say they tend to reach extreme product-market fit in roughly four to six years. There's some variance, but roughly four to six years. And so we label these four levels. We say level one product-market fit is nascent product-market fit. Level two is developing, level three is strong, and level four is extreme. And that's where you want to get.

And along the way, you're trading off these three dimensions: satisfaction, demand, and efficiency because they're intertwined. You could spend a bunch of money on marketing, and that's going to increase your demand, but you're decreasing your efficiency if you do that. You can invest a bunch in efficiency and automating a whole bunch of stuff, but that actually might harm the customer experience and you're reducing satisfaction. So that's an interesting thing, I think, is you're actually making trade-offs at each level and what you should optimize for at each level is different. And so we talk about all these signs, whether you're getting stuck at a given level, how do you get unstuck and how do you progress along this path.

**Lenny Rachitsky** (00:21:01):
Amazing. And we're going to go through each of these. And the idea, as a listener, what I'm thinking is you're probably in one of these buckets. What we're trying to do is help you out of that bucket and help you move further up the ladder to the next level. So just to summarize, I have my notes here. So there's essentially four levels of product-market fit, basically, the strength of product-market fit that you have: nascent, developing, strong, extreme.

**Todd Jackson** (00:21:24):
Yes.

**Lenny Rachitsky** (00:21:25):
Okay. And then you have three dimensions within each of these levels: satisfaction, demand, and efficiency. We're going to talk about what all these mean and how you use these. Let's talk about level one, nascent product-market fit. What does that look like? What do you do when you're there if you're stuck? And what are some examples of companies that felt nascent product-market fit?

**Todd Jackson** (00:21:44):
Yeah. Okay, level one, nascent. So at this point, you're probably like a pre-seed or seed stage company. You've got less than 10 people on your team. And at level one, your job is to find three to five customers that have a particular problem that is worth solving and to deliver them a satisfying solution. And you got to pick a problem that is both important and urgent to them.

**Todd Jackson** (00:22:08):
And the solution that you deliver needs to satisfy some kind of promise that they care deeply about. So of the three dimensions that you just recapped, Lenny, it's satisfaction first, demand second, efficiency last when you're at level one. It's actually okay to be inefficient at this stage if it helps you uncover something that delivers an insanely good customer satisfaction. And so I think that one of the best examples I can think of that is this company called Vanta.

**Lenny Rachitsky** (00:22:37):
Love Vanta. Also, a happy sponsor and I'm an investor. What a great example.

**Todd Jackson** (00:22:42):
What a great example. So Vanta was founded in 2016 by Christina Cacioppo, and she had come from Dropbox and we got to work at Dropbox together, which was awesome. She was the PM of Dropbox Paper at that time. And so Vanta, it's a company that does compliance automation, continuous monitoring. And most startups think of Vanta is how you get a SOC 2, but they didn't do that at first.

**Todd Jackson** (00:23:03):
And I remember in 2018, Christina and I went on a walk around the South Park neighborhood in San Francisco. And this was the first time I heard the idea of Vanta. And she had actually, in 2016, 2017, tried a few other ideas. She had this smart speaker that would record meetings and it would send meeting summaries over Slack.

**Lenny Rachitsky** (00:23:24):
B2B Alexa is what she called it. I remember.

**Todd Jackson** (00:23:25):
B2B Alexa. And she had this other idea, something about dropshipping, but she didn't know anything about dropshipping. And she had just been in this mode of like, "We're building stuff and then we're seeing if anybody wants it." And then she realized that wasn't working and she changed what she was doing. And she started talking to potential customers, and she was very interested in the idea of security and why a lot of startups didn't use any security products.

**Todd Jackson** (00:23:48):
And she was talking to security engineers and CISOs and just CTOs and startups. And she would ask them, "What is the thing you hate most about your job as it relates to security?" And over and over and over they would say, "I hate filling out the security questionnaires. I hate doing the compliance audits. It's so much grungy manual work. I'm in there filling out spreadsheets and taking screenshots of my AWS account. And the whole thing just doesn't make sense." And she had actually felt this herself when she was on Dropbox Paper and the experience of getting a SOC 2 was onerous.

**Todd Jackson** (00:24:26):
And the reason that she needed to get it is because we wanted to start selling Dropbox Paper into enterprise. And so she said to me, "There's this pain out there, I think I can solve it, and I think there might be a revenue unlock." And I was like, "What do you mean by that?" And she was like, "Well, I've got these first few customers or design partner, pseudo customers. It's Segment and Front and Figma." And this is 2017, '18. So these companies were smaller at the time, not the big companies they are now. And she was like, "Yeah, they're trying to sell into Fortune 500 companies. One of them is actually trying to land a Fortune 10 right now. And they said the thing that's holding them back is they don't have compliance certification, they don't have a SOC 2.

**Todd Jackson** (00:25:08):
"And I told them, 'Hey, what if I do that for you?' And they were like, 'Oh, you can just do that?'" And she was like, "Yeah." And she did it, and they landed the deal. And it's one of the clearest examples to me of a product that satisfies a promise, but this product is going to unlock revenue for you. You are going to be able to land this enterprise deal. And so I think they just did a phenomenal job of that. And that's what you're looking for when you're at level one, a problem that really matters to three to five customers.

**Lenny Rachitsky** (00:25:41):
That specific example, I think she delivered a spreadsheet. There was no product, she just manually filled out a spreadsheet and gave it to them.

**Todd Jackson** (00:25:49):
Completely manual. She was the one behind the email address posing as the AI, but doing it herself. And I think that's revealing of it's okay to be inefficient at level one, as long as you are delivering incredible satisfaction.

**Lenny Rachitsky** (00:26:03):
Yeah, I was just going to say that. This is the ultimate example of efficiency is not important, which I love, is what you're pointing out at this step. I know you're going to share another example, but just to summarize what this stage feels like from earlier when you talked about, essentially, of less than 10 people, you're trying to find three to five customers. I think that's so important. You're not trying to find tens or hundreds, you're just like, "Three to five people." And the customer element, I imagine, you're implying they're paying you money.

**Todd Jackson** (00:26:29):
Yes, they're paying you money and you're delivering a product that solves a problem for them.

**Lenny Rachitsky** (00:26:33):
And the product could be potentially a spreadsheet or super Wizard of Oz at this point even.

**Todd Jackson** (00:26:37):
Yeah, that's okay at this level.

**Lenny Rachitsky** (00:26:39):
I know RAMP actually had barely a product when they started selling. Initially, they had someone just updating things behind the scenes on these dashboards. And then you talked about the problem needs to be important and urgent, which connects to people paying attention to a startup that they don't trust or know anything about because the problem is that important and urgent. And you also mentioned it has to satisfy a promise you're giving them, "We'll solve SOC 2 for you," and then you actually accomplish that.

**Todd Jackson** (00:27:03):
That's right.

**Lenny Rachitsky** (00:27:03):
Is there anything else maybe as a benchmark that tells you you're at this step of product-market fit?

**Todd Jackson** (00:27:10):
Yeah. So like I said, you're pre-seed less than 10 people. Probably, your demand source at this stage is mostly people you know. It's friends and family, it's your network, maybe it's VCs. You haven't probably done a lot of cold outreach at this point, and it's hard to find customers. You're trying to get three to five. It probably takes you 20 warm intros to get one, something along those lines. So maybe to get to three to five, it's at least 50 conversations. That's very normal at this stage because you're just trying to find the right problem and find customers who have it. You're probably in the $0 to 500K ARR, somewhere in that zone. I would say that you're at level one.

**Todd Jackson** (00:27:48):
And then there are metrics to track efficiency, things like burn multiple, gross margin, NRR all of these things. All of them are just not applicable at this stage. It's too early and you shouldn't be worrying about that stuff. And so you want to be feeling this sense of progress that there are customers who need what you are building and the thing you're building works. And so conversely, the signs that we see a lot of founders get stuck, and this is a very common level to get stuck. And so if you're hanging out here for six months, nine months, 12 months, and there's yellow flags that are appearing, you're starting to feel stuck.

**Todd Jackson** (00:28:24):
And so the yellow flags are something like, let's say, your product disappeared overnight, your customers wouldn't be super disappointed. Let's say you have a handful of happy customers. Let's say you've got four or five customers, but the most important feature is actually different for each one of them. That starts to look a little bit more like a consulting business than a product business. Or it just feels incredibly hard to find the marginal customer, the next new customer. Or your usage is low. The product is in their hands, but the usage is low, it's not growing that much. It lasts for six months.

**Todd Jackson** (00:28:55):
And I think, there's a really good example, Jack Altman, who's the founder of Lattice, he founded Lattice in 2015. We've talked to him a bunch on the First Round Paths to Product-Market Fit and other things. So for those who don't know, Lattice is a people management platform, but it didn't start that way. And most people don't know about this, Lattice actually started as an OKR tool back in 2015.

**Lenny Rachitsky** (00:29:15):
Oh, didn't know.

**Todd Jackson** (00:29:16):
Yeah. And so Jack had just seen this at other companies. He's like, "Okay, companies are doing OKRs, but they're not very good at it and it causes a lot of arguments among the executive team and employees are noncompliant. They think the whole thing's dumb. So I can fix that with software." And so the original version of Lattice was for managing OKRs. And he was able to sell it. And so his buyer was the head of HR, and they said, "Okay, yeah, we'll give this a shot." And he had a couple companies using it, and they would use it for one quarter. And then the next quarter would come around, and they were like, "Didn't go that well last time. I don't know, the employees don't seem to like it. I don't know."

**Todd Jackson** (00:29:59):
And then the quarter after that, they were like, "No, we're not buying this, we're not using this." And so Jack pulled off the pivot to people management. And the way that he did it was he actually kept the persona. And so this gets into the ideas of the four Ps, and I'll talk about this a little bit more. This is our version of the four Ps. You've got the persona, the problem, the promise, and the product. And all four of these things have to line up. Your product has to deliver a promise that solves the problem of your persona. And so Jack actually kept the persona. He was like, "I've gotten to know these heads of HR really well over the last six to nine months. I text with them, I go out to coffee with them, I'm friends with them, I know them really well. This OKR thing just doesn't seem to be a big deal for them, but they've got other problems that I could look at solving."

**Todd Jackson** (00:30:53):
And the interesting thing was that timing, it was mid-2010s, performance management had started to come back in favor. It was like this pendulum. There was a period of time where performance management was really important, and then all these companies were like, "We're not doing this anymore." And then the pendulum swung back, and around 2015, 2016 was that time. And so Jack literally showed them Figma mock-ups. There was no product, but he's like, "What if I could solve performance management for you in a way that is much more modern and much more employee-friendly and manager-friendly and the whole thing's just going to work better?"

**Todd Jackson** (00:31:25):
And the response was off the charts. And people wanted this thing. And I believe he sold his first five or 10 customers with Figma mock-ups. Before, he hadn't built anything really. And so that, I think, is an interesting example of he was stuck in the zone of people didn't love what he was doing. He kept the persona, but he changed the problem that he was solving and the promise he was delivering through the product. And we do a whole section on pivots and when to pivot and how to pivot. And I think this is actually the best framework for this, is the four Ps. Lattice kept the first one but changed the others. Vanta changed all four.

**Todd Jackson** (00:32:08):
There are other products like Plaid that actually kept elements of the product they were doing. So I don't know if you know the story of Plaid, but Zach Perret was building... Plaid started out not as like a API for bank accounts. It started out as a consumer budgeting app. It was a consumer app. And it just was supposed to help you save money and budget and stuff. And it just wasn't that popular. And the founders were frustrated, but they had built this part of the product that enabled the app to connect to your bank accounts, and had solved all the nitty-gritty issues with that. And then they found that their friends wanted to license it from them.

**Todd Jackson** (00:32:46):
So Zach had a friend at Venmo who wanted to license this, and they got Robinhood at some point, they got Coinbase at some point. So that's an example of they actually kept a lot of the code that they had written. They kept the product, but they completely changed the other three Ps. Instead of solving for consumers who have a problem with budgeting, we are going to solve for developers at fintech companies who have a problem connecting to bank accounts. And it was a total flip of the four Ps. But that's why I really like this framework because I think it really helps founders think in a structured way about this.

**Lenny Rachitsky** (00:33:15):
Todd, this is amazing. I'm so happy we're doing this. I think this is going to help a lot of people. I want to move on to level two, but first let me try to summarize some of these key elements. So these four Ps is essentially what you should try to change if you're stuck in this level or any level. And just to summarize, you can change who you're targeting, the persona, you can change the problem you're solving, you could change the way you're pitching it, which is the promise is how you describe it, basically positioning. And then you could also just change your product. You mentioned Vanta changed all four, some companies change just one. Any advice for how to know which of these to change? What points you to change this versus change that? Is there anything that you've seen?

**Todd Jackson** (00:33:55):
I think different founders approach this differently. And I've seen a lot of founders who are build first and then sell, and I've seen a lot of founders who are sell first and then build. And they can both work. I tend to gravitate towards the, "I want to sell it before I build it," because I really want the signal from customers and I want that to be the guide and the oxygen that drives what I'm building. I find that very motivating. I also find it easier, honestly.

**Todd Jackson** (00:34:25):
Rather than guessing like, "Oh, I'm going to write 50,000 lines of code and then see if somebody wants this thing," I think it's better to talk to a bunch of customers, know that, "Hey, if I had this thing, if I could build this thing, I know it would sell. I know these people want this thing." So I tend to approach it from that point of view and therefore, I focus on the persona and the problem and the promise. What is the promise that is really going to click for that buyer, for that persona? And then the product's job is to satisfy those first three Ps really.

**Lenny Rachitsky** (00:34:55):
And obviously, those are much easier to change and play with versus rebuilding your product. So if nothing else, you should probably start there. I actually have a post with a bunch of awesome examples of changing the positioning, changing the persona, and so we'll link to that in show notes if people want more examples. Finally, let me try to summarize the stage. So I think it's important to note at this nascent stage, it's not roaring product-market fit. It's, as you described, very nascent. You're getting customers, but it's hard. You said it's 20 introductions to one sale, but you're getting them.

**Lenny Rachitsky** (00:35:25):
I know Retool has a great quote. David has this quote of, "Every customer he got early on, he felt it was the last customer he was ever going to get. No more people want this thing and it's always a struggle." So I think that's very normal, is what you're describing. The beginnings are rarely off and to the right. And it's okay if this takes a while. You said that if you spent 12 months at this stage, you're probably stuck in the stage, and signs that you're stuck in this nascent stage versus this is actually normal. Signs you mentioned are if you ask people if this went away and they wouldn't be disappointed, they'd be like, "Nah, all right. It's cool."

**Lenny Rachitsky** (00:36:01):
You have many customers, but they're using different features of the product. So to you, the way you described it, essentially, you're professional services for them. You're not actually building a product. You consult a lot of people. And then they're actually not using it often. They're buying, they're paying for it, like the last example, but they're not necessarily using it and they're going to churn pretty quickly.

**Todd Jackson** (00:36:19):
That's right.

**Lenny Rachitsky** (00:36:20):
Anything else you wanted to touch on there before we get to level two?

**Todd Jackson** (00:36:23):
The last thing that I'd add at level one is there's this founder from a company called Persona, his name is Rick Song. He's super awesome. Persona is a First Round company. They do identity verification. And Rick's analogy, I just love it for level one, is you don't want to get friend-zoned by your customers, where your customers like you, but they don't love you and they don't need you. And he was super paranoid about this in the early days of Persona. And his technique for doing this, which I really like, is super simple, was he was very close with his first five or 10 customers.

And he would go to them and sit them down one-on-one and say, "I need your help. It is very important to me that this company succeeds and does not fail. So I don't want you to be nice to me. I want you to tell me is Persona a necessity for your company? If we went away, how painful would that be? If a competitor came along that charged half as much as us, would you switch to them?" And he's really trying to get to the essence of: is Persona critical for you or am I in the friend zone? And I just think that's a really great way of thinking about this.

**Lenny Rachitsky** (00:37:35):
I love that story. It's like in a relationship, it's the talk.

**Todd Jackson** (00:37:37):
It's the talk.

**Lenny Rachitsky** (00:37:38):
**Todd Jackson** (00:39:19):
Yeah. So level two is developing product-market fit, and your job at level two is now you've got to go from five satisfied customers to 25 satisfied customers. And so now you've got to start thinking about demand in addition to satisfaction. Because it is very hard to just grind your way all the way to 25 customers with sheer willpower, but you can do that to five, maybe 10. And we see some founders who just have phenomenal willpower and grit and grind their way to five or 10 customers. To get to 25 and to get beyond 25, the product has to be doing a lot of the heavy lifting for you. And so that is the essence of this level.

**Todd Jackson** (00:39:58):
So if you're at this level, now you're seed or Series A style company, maybe you've got up to 20 people at the company. And you're starting to work on this demand source where you have the early signs of a scalable channel, and it's not just warm intros from your VCs or from your friends. You're maybe investing in cold outreach and getting that tuned and humming. You might be investing in content, you might be doing community events, but the whole idea is you're trying to scale the demand source. It's still not easy. A benchmark, we would say, is that your sales conversion without a warm intro is still probably 10%, something like that.

**Todd Jackson** (00:40:38):
First call to close one is around 10%. If you get higher than that, that's great, but that sort of benchmark for this level. You're in anywhere from the 500K to five million ARR zone, that's a hallmark of level two. And you're actually starting to think about efficiency metrics and sales metrics. You might starting to be thinking about magic number, which is a new ARR that you take in in a period divided by the CAC you spend in that period, so something in the 0.5 to 0.75 range. You want to get higher eventually, but that's pretty reasonable for this level.

**Todd Jackson** (00:41:10):
You're just starting to think about retention. You've been around for a year, so you've got renewals and you want those renewals renewing. Maybe something like 10%, 20% regretted churn is okay. You don't want to be higher than that, and you want your NRR to be at least 100%. And then things like gross margin and burn multiple, they're still not the focus. Those are the classic efficiency metrics. They're not the focus right now.

**Todd Jackson** (00:41:30):
But we would say you want your gross margin to be not worse than 50%, and you'd want your burn multiple to be not worse than five X. Your burn multiple, by the way, is just how much you burn in a current period versus how much new ARR comes in. So if you burn $5 million and you take in one, then you've got to burn multiple of five. And you don't want to be worse than that at this stage.

**Lenny Rachitsky** (00:41:51):
Amazing. There's a lot of these benchmarks which I love. I imagine not everyone's going to hit each of them exactly. These are just rough guidelines of like, "You're probably in this stage if you're in this level," right?

**Todd Jackson** (00:42:03):
Yeah, exactly. There's some wide bars around these metrics. It's just representative of, generally, the stage of five to 25 customers.

**Lenny Rachitsky** (00:42:10):
I love it. And it's so interesting that people think of product-market fit, as you said, as this binary, "I have it or I don't." And the way you're talking about this is in this level to developing product-market fit, a company has 25 satisfied customers, they're over five million in ARR, a lot of cases they have 20 employees.

**Todd Jackson** (00:42:28):
Between 500K and five million. Yeah.

**Lenny Rachitsky** (00:42:31):
500K and five million. They have 20 employees. In theory, you would think this is a roaring success. They're killing it, they have all these customers, they're growing. But it's still just level two of product-market fit. So I think this has a really interesting insight, and it reminds me of when I did a bunch of research on product-market fit.

**Lenny Rachitsky** (00:42:49):
So many founders are like, "I never felt that product-market fit. I didn't have it. It was always, 'I don't know, maybe when we get to 100 million ARR, I'll really feel like we got this.'" So I think this is a really good reminder that a lot of times you're not actually going to feel so confident this will last, and you're going to get to lasting durable product-market fit. So I think that's a really great insight here.

**Todd Jackson** (00:43:12):
Yeah. And the thing that's really, I think, the hallmark of level two is you've got a product that a handful of people like. It's satisfying a critical need for them. Now you've got to open the demand floodgates so that we can get to 25 customers and beyond. And different companies do this in very different ways. It's much easier said than done. Looker is an example. So Looker is a First Round company founded in 2012 by Lloyd Tabb. They do business intelligence. And Looker is interesting because they spent actually a long time at level one, but then flew through level two. And the reason is because Lloyd, the founder, the first five customers of Looker, he was basically going in and doing consulting for them.

**Todd Jackson** (00:43:59):
And the reason is because of the nature of the product. People don't get Looker until they see their own data in it, and their data is modeled and they see the dashboards and they're like, "Oh, my God. Wow, I didn't realize these insights." So Lloyd understood Looker is not a product you could sell with Figma mock-ups. And so what happened was Lloyd would go into these customers, spend 20, 30, 40 hours before they were even a customer, modeling their data, teaching them how to use it, showing more people within the organization the power of the data and the dashboards.

**Todd Jackson** (00:44:32):
And later, they called this their forward deploy process. This is how they figured out sales. And so it actually took them a long time in level one to get this right, but then they were able to do this repeatably. And so they went from five to 25 fairly quickly, and a lot of amazing... 75% close rate because they were only selling customers who were already using it. There was zero churn. And Lloyd explains once he got to 20 customers, he's like, "I know I'm onto something. And I think I figured out a model."

**Todd Jackson** (00:45:03):
And the model stayed the same until they ended up selling to Google. And so they did these other things too. They started focusing on demand channels. They got a couple SDRs who were prospecting. I think they did some partner marketing with AWS Redshift. They did these look-and-tell customer events in San Francisco where they got Looker customers together to talk about what they were doing in Looker and how they built the product. But really, the groundwork was set at level one and then they moved really quickly through level two.

**Lenny Rachitsky** (00:45:32):
So again, the way to think about this phase, is this is when you're starting to scale a way to drive demand. You're not just grinding sales, cold outreach. There's a way you're starting to bring in customers that are more efficient. And in Looker's case, they just started coming because I imagine there's word of mouth and people started to talk about it.

**Todd Jackson** (00:45:50):
Yeah. Let me do another example. A really different example is a company called Ironclad. Ironclad, it's legal. It's a legal tech company founded in 2015. Jason Jason Boehmig is the founder. AI-powered contract management software. So this was interesting because Jason, he started out calling this an AI legal assistant. And in 2024, people are like, "Oh, AI legal assistant. Yeah, that's awesome." But in 2014, people were like, "What?" And he found it really hard to sell. No one was looking for an AI legal assistant. And so he told us this story.

**Todd Jackson** (00:46:29):
There was an email address on the Ironclad homepage, hello@ironclad.com. This is in 2015. And he doesn't get very much email, but Jason is checking the email. And one day he gets this one line email, and he almost archives it because he doesn't know who it's from and it's one line. But he sees that it's from a person at a publicly-traded company, and so he's like, "Oh, maybe there's something here." And the one line email is just, "Are you a CLM?" And he was like, "What is a CLM?" And he Googles for it. A CLM is a contract lifecycle management platform. And he's reading up about CLMs, and he's like, "Oh, we do that. Yeah."

**Todd Jackson** (00:47:08):
And so he replies to the email, "Yes, we are a CLM." And the customer gets them on the phone. And the customer says, "Oh, I'm in the market for a CLM. I'm looking at 10 or 12 different vendors, but you guys look pretty cool because there's some automation and some AI stuff going on. Can I check this out?" And Jason's like, "Of course." So he and his co-founder take the train from San Francisco down to San Jose. And on the train, Jason is telling his co-founder, Cai, "Hey, I need you to code this up right now to make it look like what this customer is expecting."

**Todd Jackson** (00:47:42):
And they get to the meeting, and they do the demo. And the customer has no idea that they just made this demo on the train, and they're a very small company. And they win the contract against these 10 or 12 other established bases, because Ironclad, it's more modern, it's automated, it's got this AI stuff. It's just a better product, or the demo looks like it's going to be a better product. And so Jason reflects on this and he's like, "Yeah, the thing for us is we had been trying to create this new category of AI legal assistant, and it was just a slog.

**Todd Jackson** (00:48:10):
"And instead, when we changed our positioning to play in an existing category of CLM, but a much better CLM, but customers are already looking for a CLM, they're already looking to spend money on a CLM, and just expand the definition of what that category is, things just started to click." And that's how they got through that zone of 10, 20, 30 customers. And even if you look at the Ironclad website today, it says AI-Powered Contract Management Software. That really is the key idea still.

**Lenny Rachitsky** (00:48:38):
Awesome. So this is an awesome example of positioning/promise is the lever they pull here. I love the point about category design. That's one of the ongoing debates on this podcast, whether you should try to create a category.

**Todd Jackson** (00:48:50):
I know, it's a hot topic.

**Lenny Rachitsky** (00:48:51):
Hot topic. Sounds like you're in the boat of probably better not to create your own category.

**Todd Jackson** (00:48:56):
I think it's hard to create a category. It certainly works in some cases, but if you actually have a really interesting spin on an existing category, there's already buyers spending money on that thing. They're already looking for something to buy. So if you can do it, I do actually think that way is easier.

**Lenny Rachitsky** (00:49:13):
Before we get to level three, what are signs that you're maybe stuck at level two, and what should one do about that?

**Todd Jackson** (00:49:21):
Yeah. So the whole idea of level two is this thing that the marginal customer is getting easier. And so you've got to be focusing on demand and the repeatability of demand while you maintain satisfaction. So the yellow flags are things that are the opposite of that. Your current customers are pretty happy, but you're just having trouble opening the floodgates. As you're getting to the top end of level two, you should start to hear some startups know who you are like, "Oh, you need a SOC 2, you're a startup. Oh, Vanta." "Oh, you need AI-powered contract management software. Oh, Ironclad." You start to get known for a thing.

**Todd Jackson** (00:49:59):
And so if you're having trouble opening those floodgates, and you're sitting there for, I don't know, 12 months, 18 months, that's a problem. Or you have things like your regretted churn is greater than 20%. That's a satisfaction warning sign. And again, you have to maintain the satisfaction as you work on these other things. Every level just gets more things you have to do. Or you could be finding that the sales cycle's taking too long, you're losing deals late in the funnel, you're losing the competitors. You're just not feeling the urgency from customers or you're struggling to hit the price point that you want.

And the way that customers will say this to you because customers are nice, right? They'll say, "Oh, we don't have the budget." Or, "Oh, it's just not the right time for us. We'd love to talk again next year." That means no, when you're hearing that from customers. You want customers who are like, "Oh, of course. Yeah, this is expensive, but I'm going to make this work because I need this." And so if you're seeing any of those signs, those are the signs that you maybe are stuck or plateauing at this level. And I really think it's important to think about the four Ps and think about: how am I going to pivot my way out of this? Jack Altman, who I mentioned earlier from Lattice, he's got a great quote on this.

**Todd Jackson** (00:51:14):
It's up in a video on the website. What did he say? He said, "Most founders do a 10% pivot, and what they need to be doing is a 200% pivot." Jack didn't say this, but I think part of my interpretation of this is it's psychologically hard as a founder. You've gotten to this many customers, you're starting to plateau, but you're like, "I don't want to throw this whole thing away." But you have to be willing to let go and really focus on nailing the four Ps at this point.

**Lenny Rachitsky** (00:51:46):
And in your experience, do you find, essentially, pivoting is the answer if you're stuck?

**Todd Jackson** (00:51:52):
I think sometimes it's nice when it's the Ironclad thing, right?

**Lenny Rachitsky** (00:51:56):
Yeah.

**Todd Jackson** (00:51:57):
It's nicest when it's the Looker thing of you don't have to change anything. It just starts working and basically, the whole thing works the whole time. That's not common. It's nice when it's the Ironclad thing when you just change one of them, or maybe two of them. Starting over with all four of these is hard at level two, but oftentimes, it's what's required. I was mentioning earlier, level two is the second most common level to get stuck.

**Todd Jackson** (00:52:20):
A big chunk of companies are going to get stuck at level one, and the second biggest is at level two. So sometimes it's hard. I think the trap is not doing enough to realize that you're actually not progressing to product-market fit in the way that you need to and just starting to burn money and not make progress. And you've seen many startups struggle with this. I think it's the hardest part of it.

**Lenny Rachitsky** (00:52:42):
Yeah. Especially once they're a million, two million, three million ARR and they're like, "Look, we're making all this money." And they don't necessarily realize that they've been stuck at this stage for so long. So just to summarize flags that something is wrong and that you should probably think about changing your persona, your problem, your promise or your product, is it's been 12 to 18 months at this stage of product-market fit. You are churning about 20% of customers. And these are logo churn, I imagine, just like businesses stop using you.

**Todd Jackson** (00:53:14):
Yep.

**Lenny Rachitsky** (00:53:14):
Your sales cycles are really slow. Is there a sense of what slow means? Just a rough heuristic. What should it...

**Todd Jackson** (00:53:20):
Well, some sales cycles are slow. If you're selling to companies that are big, you're selling to government, that type of thing. I don't know. Rough rule of thumb is... There's different ACVs also. If you're the kind of product that is 20K, 30K annual contracts, that was Looker, right? But they were able to do the sales cycle very repeatedly because they closed so often. There are some contracts that are 100K, 200K, six figure contracts. Those can take a long time. Those can take three to six months. You can't basically be in the worst of both worlds where you've got a slow sales cycle and a low ACV. That is the quadrant of death basically.

**Lenny Rachitsky** (00:53:57):
Awesome. Okay. And then the other sign is just you're not finding demand starting to come to you. You're not finding a channel to drive demand. And is a big part of this inbound? You're supposed to start seeing more inbound coming at you? Or is it more just sales becomes easier?

**Todd Jackson** (00:54:12):
It's both. So sales becomes easier, but I think if you are starting to get to level three, which is where we're getting to next, you've probably got 10%, 20% of your inbound coming or completely organic inbound.

**Lenny Rachitsky** (00:54:25):
Awesome. Okay. So again, if you're stuck at this stage, and these are signs that are like, "Oh, man, this sounds familiar," your advice is find one of these things to shift the person you're going after, the problem you're solving, the way you position it and/or your product if you have to.

**Todd Jackson** (00:54:41):
Yeah. And probably just look for something that is a lot more of a burning pain. It's usually that the problem is not significant enough, important enough to people, or the promise is not valuable enough. It's usually one of those [inaudible 00:54:54] assuming you have a reasonable persona.

**Lenny Rachitsky** (00:54:56):
Awesome. And the reason I am spending so much time here, as you said, most companies get stuck here, like B2B SaaS companies. So I think it's really important to make sure people have something to go with. And in the course and in the post you put out, there's more examples of companies going through this and what they did. Let's talk about level three. What does level three look like? What should you be focusing on there?

**Todd Jackson** (00:55:16):
Yeah. So level three is strong product-market fit. This is where I think it starts to get fun. This is where all the product-market fit adages come in, "The fish are jumping into the boat. The rock is rolling down the hill and I'm trying to chase it instead of pushing it up the hill." And keep in mind, for most enterprise founders, we're now three, four or five years into the company, so it's not easy to get here. And to get to L3 here, you are looking for repeatability. The marginal customer has become much easier.

**Todd Jackson** (00:55:48):
And so you mentioned, Lenny, this quote from David Hsu from Retool, which I love too, and I'll read it again. He said, "We talked to someone who said that finding product-market fit was so visceral, you immediately felt it like a geyser." And we honestly never felt that in the first couple years. At Retool, every customer we got, whether that was number four or number 14, felt like the last customer we were ever going to find. It felt like rolling the stone uphill, and if you stop pushing, it's going to roll back on you and crush you.

**Todd Jackson** (00:56:15):
And that's how it felt until we had a few million in ARR. That's when the boulder went down the other side and we had to chase it to keep up. And you mentioned earlier, founders were like, "I'm not sure I ever felt product-market fit." This is when you start to feel it. And Jack Altman, again, from Lattice said, "The biggest shift was in the ease of getting leads." I remember thinking, "I don't even know where these leads are coming from, just more and more of them are showing up each month."

**Todd Jackson** (00:56:43):
But that is a great feeling. That is a great feeling. Filip Kaliszan from Verkada, he's in some of the videos on our website too. His quote, I'll read it, was, "After our first year of sales in 2018, those next two years were crazy. We were barely keeping up with production. We had to scale all the systems. A lot of things had to happen in the span of 12 to 18 months in order to deliver on everything that customers were hoping the solution was going to do for them. And that in itself was a very formative and tricky part of the journey."

**Todd Jackson** (00:57:11):
So the benchmarks when you are at level three are now you're probably 30 to 100 people inside your company. You're probably at Series B-ish territory in terms of venture, maybe late Series A, maybe early Series C, but probably around Series B. You've really cracked a demand channel. You've cracked marketing and sales. You've got at least one channel that is very scalable. And probably 10% or more of your inbound is coming from just referrals and word of mouth and you're getting known, like we talked about.

**Todd Jackson** (00:57:45):
ACV ranges are very high. Very wide, I should say. I'd say where you want to get to with level three is 100 customers. And so if you're approaching 100 customers and maybe you have 75K average ACV, that would be strong. You're in this wide zone of five million, all the way up to 25 million ARR. That is very level three. And you're actually starting now to think about some of these efficiency metrics. Remember, we've been punting efficiency. We were saying it shouldn't be worse than a certain number, but it's not a focus. Now, it's got to come into focus.

**Todd Jackson** (00:58:20):
Because the way that we get to level four is we keep ripping on the satisfaction and the demand, and we tune this thing to get very efficient. So we're talking about our gross margin needs to be above 60%, hopefully above 70%. Our burn multiple is now below three. Ideally, we're close to one. Burn multiple in the one to three zone is where we want to be at level three. Regretted churn's less than 10%, NRR is greater than 110%. These are good benchmarks for this level.

**Lenny Rachitsky** (00:58:50):
Hearing level three again tells me level two is basically your pivot from: I'm just grinding customers, selling, pitching, constantly trying to find new people, to level three, where it's coming at you and basically, it's the way you always hear about it, as you described. It's rolling downhill. Fish are jumping in the boat. I haven't heard that one before, but I love this.

**Lenny Rachitsky** (00:59:11):
So essentially, you found a demand channel. You found a way to get people to come to you. A lot of them are just hearing about you from other people, you don't even know where they're coming from. 10% you said are coming from referrals and you're getting to 100 customers. I actually have another quote from David Hsu at Retool, and he actually said even at 100 customers, he still felt like every customer he was getting was the last one.

**Todd Jackson** (00:59:33):
Oh, wow.

**Lenny Rachitsky** (00:59:33):
He's like, "I can't believe we got DoorDash. That's incredible. Okay. I think there's no more. That's it."

**Todd Jackson** (00:59:39):
He is a critical person and critical of himself, but a very high expectations person, let's say.

**Lenny Rachitsky** (00:59:43):
Yeah. Actually, another quote from Ali Ghodsi from Databricks actually said even at 100 million, he wasn't sure they had product-market fit.

**Todd Jackson** (00:59:50):
I mean, come on.

**Lenny Rachitsky** (00:59:54):
Because he's like, "I don't know." I don't know. He felt like, "This is it. Okay, we're done. We're going to cap out here." And I get that.

**Todd Jackson** (00:59:58):
I think if you told many, many pre-seed founders that they'd be able to get to 100 million and not know whether they had product-market fit, they'd probably take that.

**Lenny Rachitsky** (01:00:05):
But I think that's maybe an interesting insight. It's often good to be really paranoid and not feel like, "Okay, we're on our way. Let's start pouring in money. Let's do it."

**Todd Jackson** (01:00:13):
I think that's what makes a lot of the best founders the best.

**Lenny Rachitsky** (01:00:16):
Indeed. Okay, so level three, anything else that would be useful here? Maybe what are signs that you're struggling at level three, you're stuck?

**Todd Jackson** (01:00:25):
Yeah. So level three problems. And again, it's hard to get to level three, so awesome work for getting here. But the problems that might start to emerge are you've got a leaky bucket, your NRR is below 90%, or your regretted churn's greater than 10%. Maybe growth is just slowing down. You grew three X each of the prior two years, but you're struggling to do a two X this year. At level three, or five years into the company or so, there's probably a lot of competition. If you've gotten here, you've got something that's working, and people are starting to notice and there's going to be competitors.

**Todd Jackson** (01:01:01):
And they could be the big competitors, they could be the new startups, but you're going to have to figure out how to navigate probably a tougher market than you entered five years ago. And so maybe you found your first scalable channel, but it's getting saturated, you got to find a new channel. These are the level three problems. Or you're growing, but like I said, with efficiency, you're spending too much money to grow. So you feel like, "Okay, yeah, we can grow at three X year over year, two X year over year, but that's going to push our burn multiple above three again." And that's a little bit of a pickle to be in when you have to trade off growth and spend like that.

**Lenny Rachitsky** (01:01:37):
You make it sound like life's great, level three people are coming at us. I think it's important to note never is it easy, never is it like, "Okay, we're good. Let's just ride this wave. Life's going to get so much easier from now on." It's never easy. As you said, there's all these things, you're always still juggling, you still aren't sure it's going to keep going.

**Todd Jackson** (01:01:55):
No, I agree. It's like you're spinning plates, and the higher levels you get, there's more plates. You have to keep spinning. And so at level three and getting to level four, we've got to maintain satisfaction and demand. We cannot let them regress in a market that's getting harder, and we have to really start focusing on efficiency. And the companies that can maintain satisfaction and demand and continue to grow and become really efficient, now we're at level four.

**Lenny Rachitsky** (01:02:21):
Let's talk about level four. What does that look like? What are some problems people run into there?

**Todd Jackson** (01:02:26):
So first of all, congrats. If you get to level four, you have a valuable company. You are probably already a unicorn, and you're starting to think about, "Can I become a decacorn?" And so you've reached the highest levels of satisfaction, demand, and efficiency. And so the benchmarks at level four are like, "Okay, now your team is probably bigger than 100 people, you're Series C, Series D or beyond. You've got more than 100 customers and you're starting to figure out, 'How do I get to 200, 300, eventually 1,000 customers?'" You're beyond 25 million in ARR, so 25 million and up, I think in ARR, it qualifies as level four. And your other metrics are looking really good too. Your sales conversion first call to close one is probably better than 15%, your magic number is greater than one, your tax payback is less than 12 months.

**Todd Jackson** (01:03:13):
All these things are super awesome. And finally, now you've got your gross margin above 80%. Your burn multiple's ideally less than one at this point, you've got less than 10% churn. You've got greater than 120% NRR. And so now the whole thing is like, "Well, how do I keep growing?" This thing's gotten pretty big. And this is generally when we get to 100 million, especially and beyond, the stage that founders are thinking about, "How do I keep growing by expanding TAM, by expanding total addressable market?" And to expand TAM, I can usually take my product and bring it into new markets, or I start to think about multiple products as a way to expand TAM.

**Todd Jackson** (01:03:55):
And so this is where you see all the truly great companies, the legendary companies are all able to do that. Vanta has begun to do this. They have the Vanta trust management platform, they've got security questionnaires, they've got vendor risk management. So they're starting to do this. You think of Verkada, who I mentioned before. They started with cloud security cameras, now they do alarms, now they do smoke detectors, now they do badge readers. Stripe has classic Stripe, but they've got Stripe Radar, Stripe Atlas. Square has the Square Stand, Cash App, Square Checking, Square Loans. All the companies that are tens of billions of dollars of value have figured out a way to do this. And it's like the never-ending journey that you said before, Lenny. Like, "Congrats, you got to level four."

**Todd Jackson** (01:04:40):
But there's just this endless thirst for continued growth. And the interesting thing about that is that it requires finding product-market fit over and over again. Just because you got to level four on your main product doesn't mean product-market fit is free on all these new products. And you've been inside Airbnb and I've been inside Dropbox and Twitter. Getting new products to be successful is hard and it requires this mindset of like, "Yeah, we've got a little bit of advantage because people know who we are, and we have a customer set that hopefully we can layer on new products to. But it's not easy." You have to get into this mindset of product-market fit is never easy, and if we want to continue to grow, we got to find it again and again and maintain that mindset.

**Lenny Rachitsky** (01:05:22):
Casey Winters has this great point also that expectations of customers ever increase. And so you have product-market fit today, but there's going to be better products coming out, they're changing, the world changes. And so not only do you have to worry about competitors, there's just expectations continue to rise. So it's a never-ending battle. To give people a little bit of a broader sense here, what percentage of companies do you find make it through each of these stages in your experience, what are rough numbers you may have in your head?

**Todd Jackson** (01:05:52):
The majority of companies, so greater than 50%, probably closer to 60 or 70%, are going to get stuck at L1 or L2. And so that leaves, roughly, let's say, 30% make it to L3 or L4 just in our experience looking broadly. And that's our entire goal. Because again, once you get to L3, you've got a real shot, you've got a real shot at building an awesome company. And so if we get that number, help founders get that number above 30%, imagine if that was 50/50 and half the companies that we were working with at seed were able to get to level three strong product-market fit. I think that would be epic. And I think our founders would... There'd be incredible benefits to the ecosystem from that.

**Lenny Rachitsky** (01:06:36):
Okay. So essentially, 60% ish of companies don't make it past L2. And I love the way you're framing it of just, "If we can just get a few more companies further, that makes a massive dent both in the world and the lives of founders and people that want to use products." Another question I wanted to talk about briefly is just again, the timelines of each of these levels. Just in your rough experience, how long do each of these levels roughly take so people can get a sense of like, "Oh, it's taken a lot longer. Maybe there's a problem"?

**Todd Jackson** (01:07:10):
So again, this whole thing probably takes four to six years, and so let's just pick five years as the number to get to level four. I think the way this works, ideally, is you probably take 12 to 18 months to do level one, because that is the most important level, honestly, in my mind because that's where you're really choosing the right persona and the right problem to focus on. And I think just that choice is one of the most important choices that founders make. And the interesting thing, my partner, Josh Kopelman, talks about this all the time, is that founders spend 99% of their time building because that's what they've done.

**Todd Jackson** (01:07:53):
And they spend 1% of their time picking, in picking the market, picking the problem, picking the customer. And in reality, it's that pick that determines the constraints and the boundaries of where you're going to be working for the next, hopefully, 10 years of your life. So there's a real imbalance there. And I actually think that that pick is the most important thing. So I would actually like to spend, let's say, somewhere 12 to 18 months in level one, just really figuring that out and figuring out my four Ps. And then, hopefully, I move very quickly. It takes me a while to get to my first five satisfied customers, but they love it.

**Todd Jackson** (01:08:28):
And then I go quickly through L2, maybe that takes about a year. This is like the Looker path, the happy path. And then L3 is long just because we're going all the way from five million in revenue up to 25, and that might take a year or two, probably two years even in a good case. And then getting from 25 to 100 million is hard, obviously very hard. And then that probably takes a couple years. And then you're figuring out all of these things.

**Todd Jackson** (01:08:53):
You're growing your team and your company's got a lot more moving parts and functions, and there's a demand generation side of the house and sales and there's engineering and the whole thing just gets more complicated with a lot more people. But I think that if you set the foundation really nicely at level one and level two that hopefully the whole thing... The boulder is rolling down the hill and it's carrying you forward and you don't just feel like you're pushing this rock uphill for five years. That's not a fun place to be.

**Lenny Rachitsky** (01:09:22):
There's a lot of founders in that place and I know a few, so this is really interesting. So you're roughly saying that maybe spend a year, year and a half on level one, which is you're just grinding, cold emailing, reaching out, selling customers, and maybe getting to five customers in the first year and a half. That's at the extreme, but that's a good outcome. And then maybe another year trying to get to... What was it? 20? 25 customers.

**Todd Jackson** (01:09:45):
Going from five to 25 quickly. Yeah, if I see a company go from five customers to 25 in a year, that is almost always a sign that there's some pretty strong product-market fit there.

**Lenny Rachitsky** (01:09:56):
Awesome. So many companies don't go through that, and they have the funding to keep iterating, exploring, trying to figure things out. I don't know if you have the answer here, but just what's your advice of if it's been four years and demand is not starting to come to them, they don't have 25 customers? Is it, "Wait until you run out of money, just give it a shot"? Or is it, "Let's just give the money back and move on to something else"?

**Todd Jackson** (01:10:21):
Well, that's a personal decision for founders. I do think if you've been going at it for four to five years and you haven't started to find anything that you're really feeling pull from the market on, I don't know, you've done it for four to five years, what are the chances that you're going to magically find something? I think there are probably a handful of startups that do it that figure it out and get back on an amazing growth curve, but that's the exception rather than the rule.

**Todd Jackson** (01:10:46):
So if a founder wants to return the money to investors, if a founder wants to look for a soft landing, there's no shame in that. Product-market fit is very, very hard. That's why we're doing this. It's why we're trying to increase the odds. And we're also trying to make it clear what it looks like and what it doesn't look like. And everybody knows when they do a startup that the odds are that you will not get there. So there's no shame in that, and I would completely be supportive of any founder who wants to take that path.

**Lenny Rachitsky** (01:11:18):
I love that advice. I think that was a really important point to make. Let's quickly summarize the levels and then I want to also summarize the four Ps again, because I think that's the thing you can actually do. And so I think I just want to reinforce, "Here's the four things you should play with if things aren't going in the direction." So first of all, let's summarize the levels, what it looks like and what you should be focusing on there.

**Todd Jackson** (01:11:38):
Okay. So level one, nascent product-market fit. You're just trying to get three to five customers and you're focused on satisfaction first and foremost. Level two is developing. This is where you're going from five to 25 customers, and you're really starting to focus on demand. Level three is strong product-market fit. You're going from 25 customers up to 100 or more, and you've got to start thinking about efficiency at that scale. And then level four is extreme, you're more than 100 customers, your company's awesome. You got to keep doing all three of those things well, and you have to start looking for ways to expand your total addressable market.

**Lenny Rachitsky** (01:12:14):
Okay, perfect. And then let's come back to the four Ps. I have the draft. I have your post up here, so I have the detailed version of each of these things. But could you just talk through these four things? What is it you should be thinking about changing if things aren't working, the four Ps basically?

**Todd Jackson** (01:12:30):
Yeah. So the four Ps again are: persona, problem, promise, and product. And the persona is interesting because in some ways, it's synonymous with the market. A lot of people think of the market in this macroeconomic way where it's like, "Oh, it's this category of ERP software or whatever." I think it's much more tangible for a founder to think of the market as a collection of people. Jack Altman was thinking about his market as all of the HR leaders out there, and he was thinking about how many of them are there and what are the problems they have and how much money are they willing to spend on solving those problems.

**Todd Jackson** (01:13:12):
It's a collection of people who have money to pay for a product or pay for a service. And so that's really the first piece, find the persona and really try to get into the mind of the persona. That's another thing I was amazed about spending time with Zach from Plaid, and Lloyd from Looker, and Jack from Lattice. They had all of these people, they were text messaging with all of their customers and they're meeting them on the weekends and stuff. They really, really knew their customer well. They were friends with their customers.

And so you've got to get so deep into the mind of the persona and: what are their challenges? What are their goals? How do you help them succeed at their job? That's the stuff that earns you the right to get the rest of the Ps right. And so the problem, obviously, comes next. And I think about this, and I can actually get into, Lenny, a little bit if you want to get into some of the customer discovery stuff because that's the second session.

**Lenny Rachitsky** (01:14:13):
Perfect segue.

**Todd Jackson** (01:14:14):
And I was talking a little bit about we think of it as dollar-driven customer discovery. And I think a lot of founders are familiar with customer discovery. I think they at least talk to customers, which is good. I don't think most of them do it in the highest signal way because again, the customers, they're people, they're nice, they're going to be polite. They're also not good at predicting things that they will use or buy or want.

**Todd Jackson** (01:14:41):
They're very good at talking about their problems, but they're not necessarily good at predicting their own behavior. So we think about it in terms of dollar-driven discovery, which is how do you test the dollar potential of a hypothesis? And this is a whole two-hour session, but I'll try to do it briefly here just to give you a sense of it.

**Lenny Rachitsky** (01:15:00):
No, let's get into it. Let's keep going. I'm just joking.

**Todd Jackson** (01:15:02):
So you've got to identify extreme value. This is independent of what I'm building, Lenny. I want to hear about your problems and your challenges and what is most important to you. And so I need to do it in this non-leading way and I need to avoid the trap that we call happy years. Because I found a lot of founders, "I want to build this thing, I want you to like my thing." And so I look for the things that you say that support what I'm doing. That's the trap. And so I could just try it on you, Lenny. Yeah, I might say...

**Lenny Rachitsky** (01:15:35):
Let's do it.

**Todd Jackson** (01:15:36):
Okay, Lenny, so you're doing Lenny's Newsletter and you're building Lenny's Podcasts. When you think about we're sitting here in April, over the next three months, let's say, what are your top three goals for Lenny's Newsletter and Lenny's Podcast?

**Lenny Rachitsky** (01:15:53):
Oh, wow, interesting. I'm trying to find a more scalable way to do this newsletter long-term. It's basically something I have to do for the rest of my life, in theory. I don't know if there's an exit path for this newsletter career, so I'm trying to find ways to scale this over time. That's one. Two is just up-leveling the quality of each podcast episode in terms of visuals and audio and trailers and things like that. And then three is make the community more valuable to everyone that listens that's in the newsletter community. Those are top of mind.

**Todd Jackson** (01:16:26):
Okay, awesome. And so what's hard about those three things? You said you want to scale the newsletter, you want to increase quality, you want to make the community awesome. What's hard about those things? Or what's standing in your way of doing those?

**Lenny Rachitsky** (01:16:39):
I don't have the answer yet, I guess is the answer. I don't know exactly how to do this yet.

**Todd Jackson** (01:16:44):
You don't know how to do it. Okay. It's probably a service in this case, not a product. What if I was able to give you a service that said, "Lenny, you're going to be able to scale this podcast. We are going to help you find the 500 best guests in the world that are really excellent. We're going to guarantee they show up. You're going to have endless content on your podcast, in your newsletter"? What do you think about that? What do you think about that idea?

**Lenny Rachitsky** (01:17:16):
I'd pay a lot of money for that.

**Todd Jackson** (01:17:18):
Okay. So that's an example of a wow statement. And you probably had in the back of your mind, "How are you going to do that? Is that actually going to work?"

**Lenny Rachitsky** (01:17:27):
That's right.

**Todd Jackson** (01:17:28):
In my experience, that's a good thing and an exciting thing. If I'm pitching a product idea to somebody and they are like, "Wow, does that really work? And if that thing works, I'd sign up for the wait list today." That to me is like, "Okay, now I got to figure out how to build that thing, but I know if I am able to build it and deliver on that promise, they are going to want it." Or you would maybe say signs like you would demonstrate a behavior that shows that you're interested in. You'd be like, "Oh, Todd, can we meet again next week to talk about this?" Or like, "Hey Todd, I actually would love to show this to the people I work with. Can you send me the deck?"

**Todd Jackson** (01:18:06):
Those are the signs that I'm looking for. If you had reacted like, "Yeah, that sounds kind of interesting," that's a no, right? That is a no. The word interesting is a polite way of saying no, right? And so I'm either looking for wow statements or I'm looking for demonstrated behavior that shows interest. I then would probably, if I want to keep going with this, and this is all in the identifying extreme value, I'd ask you, "Well, what stands out as valuable here to you?" And I want to hear you answer quickly. You mentioned it's either going to make my products so much better, it's going to drive success for my business, or it's going to save me a bunch of money or something. Save me a bunch of risk." But something where you would very quickly be able to identify why that's valuable to you.

So that part one is extreme value. Then I got to figure out ability to pay and willingness to pay. And for you, this is easy because you're not a 5,000 person company and you're the boss. So this is probably pretty streamlined. There's no procurement function at Lenny's Newsletter. So let's say I'm going after a bigger company. The questions I'd ask on confirming the ability to pay are: are you currently looking for a product like this? Or are you building something internally?

**Todd Jackson** (01:19:24):
This is the Ironclad thing where Jason was like, "Oh, you're looking for a CLM already." Another way I think about it is if a customer has a problem, and I really think they have a problem, and they know they have the problem and they're looking for a solution for the problem. Or they've even tried to build their own solution to it and failed, that's the best customer. They want this thing badly. They've demonstrated that and they've actually failed at building it because they underestimated how hard it was. So are you currently looking for building a solution here?

**Lenny Rachitsky** (01:19:57):
Essentially, there's a budget. You're looking for, "Is there money to go towards this problem"?

**Todd Jackson** (01:20:01):
That's the next question I was going to say is where would a budget for this come from? And the best answer is that there's an existing budget. Either we already spend money in some way for a competing tool, or something that can be displaced by you, or we're spending, we put five engineers together to help build this thing. There's some source of budget that I can get. Then the question is, "Well, how does your team make decisions on third-party tools to bring on?" And you're never going to get the cleanest answer here. In larger companies, you might get semi-clean answers, but it's something like, "Okay, this manager can approve it directly up to a certain dollar amount. If not, it goes to this next level up of manager. And if we're going to spend more than 50K on it, we actually have to compare three different alternatives."

**Todd Jackson** (01:20:47):
But whatever, there's some known process. That's what I'm looking for rather than just a bunch of ambiguity. So that's ability to pay. And then I'm going into willingness to pay. I don't want to try to quantify that. That's where I go, "What's your budget for solving this? What are you paying for this other tool? Let me show you mine. You think that you'd pay less for that or you'd pay more for that? Can you replace this other thing with the thing I have?" And then I love this question. I think you've had Madhavan Ramanujam on the show, right?

**Lenny Rachitsky** (01:21:16):
Mm-hmm.

**Todd Jackson** (01:21:17):
He has this question, he's from Simon-Kucher. I love his thing of like, "Lenny, what is a fair price you would pay for this thing that I just described to you?" And then you say your thing. And then I go, "Okay. Well, what would be an expensive price?" And then I say, "Okay, what would be a prohibitively expensive price?" And you ask those three questions. And generally, when people tell you the fair price, it's a little bit of like they're trying to get a deal. And if the product's good, the expensive price is the one that they would actually pay.

**Todd Jackson** (01:21:47):
Where they're saying it feels expensive, but you put it in front of them, and you say, "It costs this much," and if it's really good, they want it. And the prohibitively expensive one is the one that's too expensive and they'd have to just, "I just can't do that." So I love these style of questions. I think they're just a lot more specific than what I see most founders doing, which is just chatting with customers. You really want to try to put them to some questions where you know they're going to answer honestly because you're asking them questions. You're not asking them to speculate and you're asking them fairly concrete stuff.

**Todd Jackson** (01:22:18):
Oh, and the thing I should say is it's a two-hour session, like I mentioned. It's one thing to explain this stuff, but it's another thing to see it. And so we show tons of Zoom recordings from founders who have gone through the program, and we actually do this thing where all the founders who are going through the program, they recorded all their videos, their customer discovery videos, and then our team watches all of the videos and creates highlight reels.

**Todd Jackson** (01:22:45):
And we sit around in a room and watch them together and we say like, "Oh, look at these questions that Lenny asked. And did you see how the customer responded? Wow, that's an eyes-light-up moment." Or, "Todd asked these questions, he's leading the witness a little bit and the customer didn't seem that interested." So the thing that's interesting is as a founder, you never see anybody else's version of this. You only have your own experience. And so just seeing how other founders do this in a real live setting is super. People love it.

**Lenny Rachitsky** (01:23:13):
And it's always easy to hear these things. It's much harder to be the person asking these questions to a potential customer you're trying to sell. And it's just asking, "How much would you pay for this?" So I love that you kind of force people through the actual practice of it. Todd, you're going to get a lot of applicants for this program. This sounds amazing. I know you're giving a peek at the stuff that we haven't really talked about. On this point you just shared, which is essentially trying to get real skin in the game insight into how big of a problem this is, I love that you just basically shared a bunch of questions.

Someone could just rewind right now and just write down all these questions that you shared and use them when you're talking to customers. Obviously, the classic problem is they tell you they're going to buy it but they don't. And all the stuff you shared is, "Here's ways to get at: will they actually buy it before they have the actual product?" Is there anything else you want to say on that? Just tips for not being tricked and people just saying, "Oh, yeah, I love this thing"? I know you talked through a lot of this, but anything else?

**Todd Jackson** (01:24:06):
Yeah, I think there's a couple of things. One is you have to know what to show people when you're actually showing them something. Lattice is the kind of product I mentioned that could be sold with Figma mock-ups. Looker couldn't be sold that way. Looker, you actually had to do a demo with their real data. So it required a lot more work to do that. Vanta was neither like a demo or a mock-up, it was actually doing the work. And Pilot was like that. There's a bunch of companies like that. So you have to figure out what is my product and how does it solve the problem? And therefore, what fidelity does my early product or early demo have to be at in order to land the sale?

**Todd Jackson** (01:24:44):
And then I think you have to know when you've talked to enough people. It takes time to talk to people. And the rule of thumb is if you talk to enough people and you can predict 70 to 80% of what the next person is going to say to you, because you've just talked to so many people and you've heard the pattern so clearly, that's when you've talked to enough people. But these are all things you got to learn. And that's why doing it experientially in the way that we do the program we think was best.

**Lenny Rachitsky** (01:25:10):
Is there anything that we haven't covered that you wanted to touch on before we let you go?

**Todd Jackson** (01:25:15):
No. If you're listening, if you're a B2B founder in those early days of starting your company, or you know anyone who fits that description, and you have an appreciation for just how hard it is to find product-market fit and you don't want to go it alone, then please apply to this program or share the application. Like we promise, we will review every single application. And I'm just really looking forward to working with a group of 20 or so amazing founders, and helping them navigate these early days of product-market fit finding. It's what I love to do.

**Lenny Rachitsky** (01:25:43):
So just to make sure the right people apply, remind people who is a great fit. So it's B2B founders, and you said they've been at it for six to nine months, something like that?

**Todd Jackson** (01:25:52):
Yeah, something in that zone or earlier. You have an idea of what your product is. You have a hypothesis about what it is and who it's for, but you probably haven't started writing any code yet.

**Lenny Rachitsky** (01:26:01):
And if they've been at it for four years and haven't found success, this is not a fit.

**Todd Jackson** (01:26:07):
I could try to help them one-on-one, but no, that's not a fit for this program.

**Lenny Rachitsky** (01:26:10):
And then how do they apply and when are their applications due?

**Todd Jackson** (01:26:13):
Yeah. So you go to pmf.firstround.com. Applications are open. They're going to go till May 7th, and then the program starts on May 29th. And if you want to reach out to me specifically, you can find me on Twitter. I'm @tjack, T-J-A-C-K. You can follow me, DM me. And yeah, I'm looking forward to working with some amazing founders that I know are listening right now.

**Lenny Rachitsky** (01:26:34):
Amazing. I'm so happy we did this. I feel like this conversation is going to help a ton of founders, and they're going to come back to it again and again. Todd, thank you so much for being here.

**Todd Jackson** (01:26:43):
Lenny, it's been a pleasure.

**Lenny Rachitsky** (01:26:44):
It's been my pleasure. 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.

---

## [4/21] Lessons from 1,000+ YC startups: Resilience, tar pit ideas, pivoting, more | Dalton Caldwell (Y Combinator, Managing Director)

**Dalton Caldwell** (00:00:00):
Seeing everything people apply to YC with. People all have the same idea.

**Lenny Rachitsky** (00:00:04):
One of these themes is simple, pragmatic advice. Sell shit, make money.

**Dalton Caldwell** (00:00:07):
One of my mantras is just don't die. Being coached and being reminded of the fundamentals and basics puts you in the right mindset.

**Lenny Rachitsky** (00:00:15):
You have this concept of tarpit ideas.

**Dalton Caldwell** (00:00:17):
Seems like an unsolved problem. You'll get all this positive feedback from the world and people have been starting that startup since the '90s.

**Lenny Rachitsky** (00:00:23):
Recently you put out a request for startups, 20 categories of ideas and the YC wants to fund.

**Dalton Caldwell** (00:00:28):
We're trying to mix up some of the information diet about what kind of ideas people might be contemplating they are currently.

**Lenny Rachitsky** (00:00:33):
A lot of people say you're the king of the pivot.

**Dalton Caldwell** (00:00:36):
A good pivot is like going home. It's warmer, it's closer to something that you're an expert at.

**Lenny Rachitsky** (00:00:41):
Are there other patterns you find across startups that do well?

**Dalton Caldwell** (00:00:43):
There's a lot of founders that come this close to it, all being over and through sheer will just keep it going.

**Lenny Rachitsky** (00:00:54):
Today my guest is Dalton Caldwell. Dalton is managing director and group partner at Y Combinator where he's worked for over 10 years across 21 different YC batches, including working closely in the earliest days of Instacart, Retool, Brex, Deal, DoorDash, Webflow, Replit, Amplitude, Whatnot, Razorpay and 20 other Unicorns. Prior to Y Combinator, Dalton was the co-founder and CEO of imeem, which was acquired by Myspace, and Co-founder and CEO of App.net, which was an early ads-free competitor to Twitter. Dalton has seen and worked with more startups than nearly any human alive and in our conversation we get incredibly tactical and deep on the startup journey. Why it all comes down to simply not losing hope and not letting your startup die. What to do when your startup is struggling and how to know when it is time to give up. What makes a great pivot and signs it's time to pivot. How to actually talk to customers.

**Dalton Caldwell** (00:04:45):
Yeah. Thanks so much, Lenny. I'm really excited to talk to you today. It's been great.

**Lenny Rachitsky** (00:04:48):
So to prep for this podcast interview, I asked a bunch of founders that worked with you during YC what advice you shared with them along the journey that was most transformative to the way they think about product, the way they think about building their startup, the way they operate. And there's a bunch of themes that emerged and I'm going to touch on a number of these themes. One of these themes is just how often you get to very simple pragmatic advice and how much of your message is just sell shit, make money, don't run out of money. Why do you think founders need to hear this advice, which is seemingly simple and obvious?

**Dalton Caldwell** (00:05:22):
Have you ever seen in NBA basketball or college basketball where they have the coach mic'd up and it shows what they're actually saying in the huddle? You ever listen to what they actually are saying? They're like, "Okay, we need to really focus and get the ball and win this game." If you actually listen to what the greatest, smartest, most successful athletes are talking about, if you listen to what Tiger Woods is saying to his caddy, it all sounds like pretty mundane stuff. It's not like what Tiger Woods is talking about with his caddy is some impossible to decipher jargon. It's like, "Yeah, you really need to keep your head down on this one." It's things like that. And I think the reason this is true is that even if you're in the best in the world, being coached and being reminded of the fundamentals and basics is what puts you in the right mindset and that you already know everything, right? You're at the top of your game if you make it to the elite levels of being a startup founder or basically doing anything that's really hard psychologically.

**Dalton Caldwell** (00:06:33):
And so yeah, one of my mantras is just don't die. Just keep your startup going. Just keep going. And I say that over and over again and honestly, that is often what people tell me is the most impactful thing I said. It's not that I said some Ninja 5D chess mood that they never would've thought of before. It's just the constant affirmation that continuing to keep going and doing high quality reps is the game.

**Lenny Rachitsky** (00:07:04):
I know that you'd give a talk that's exactly called that, How Not To Die. Just to pull on this thread a little bit more, what is the general advice you share there for people that also don't want to die?

**Dalton Caldwell** (00:07:14):
The way to summarize that is if you look at all the startup stories that we have at YC and all the companies we funded over all the years, the underlying theme is that rationally the founder should have given up at some point. And so again, let's talk about Airbnb, obviously something you know a lot about. They probably should have shut down three or four times before they got into YC. It objectively wasn't working. They were basically ruining their lives, they were disappointing their parents, everything was wrong and it was a purely irrational act for the founders of Airbnb to keep working on their goofy startup. And again, that's just one story. If you look across the portfolio of YC and non-YC companies, there has to be this irrational intention to keep going even when the world tells you it's not working and you feel completely defeated. And you likely have to go through this many times and have these near-death experiences. And then you get lucky and then you look like an overnight success. Right?

**Dalton Caldwell** (00:08:26):
And so that is the theme that is a summary and I provide lots of data and lots of stories there, but this is one of those things that the longer I have this job, the more I really, really believe this is true.

**Lenny Rachitsky** (00:08:39):
What's your advice on the flip side of that where there's a lot of startups, especially these days that are just super struggling, have been added for a while, there are mental health challenges, they'd be very sad if they had to shut this thing down, but often it's probably the right move? What's your advice to folks on deciding, okay, actually does make sense to give up in this case?

**Dalton Caldwell** (00:09:01):
I think this is a nuanced question and it's hard for me to say something on a podcast that'll actually be useful to people, but here's a couple of thoughts. One, are you still having fun? Do you still enjoy doing what you're doing? Do you enjoy spending time with your co-founders? Is this actually a fun thing you're doing? And if the answer there is yes, I would tend to lean on the keep going. And then if it's more of, wow, this is actually profoundly affecting me a negative way and my relationships with people in my life and I don't really want to work with my co-founder anymore and things like that, then I would lean on the probably don't do it anymore. Something that a lot of the folks that turn it around have in common is they actually do love their customers and they love their product.

**Dalton Caldwell** (00:09:51):
And again, in the Airbnb story, again, you know it really well, but they really liked Airbnb and they liked working with each other and they liked the first host that they met and they knew all their names. You know what I'm saying? They loved their startup even though it was going bad. And so that's to me a signal to keep going is that you really, really love what you're doing and the people you're doing it with and you love your customers and you love the problem. Versus where you're just like, "Yeah, I could care less about any of those things. I'm just having a bad time." Harder to be encouraging in that situation. And this is a fixable situation. You can make it more like the thing you love, can't you?

**Lenny Rachitsky** (00:10:34):
Yeah. This is actually very practical and great advice. This is something people can sense, "Okay, am I actually enjoying this? Do I want to keep doing this?" Versus, "Man, such a drag that I have to keep running this startup." Is there anything you could say to folks that are just like, "I can't stop because it'll feel like I failed"?

**Dalton Caldwell** (00:10:50):
If it's really going poorly or if you're having a really bad time, it's no big deal. No one will remember that you shut down your company probably in 10 years or 20 years time. As long as you have integrity, as long as you're an honest person, as long as you handle yourself well through good times and bad, people will remember you fondly. We have such a short life. There's only so many years we get to have our careers, doing something that makes you miserable and the only reason you're doing it is to avoid losing face and you know in your heart is not going to work, I don't know, that seems like a pretty big opportunity cost on literally your life. Right?

**Lenny Rachitsky** (00:11:30):
Yeah, that's exactly what I tell founders all the time. Life is short. There's no need to force yourself to work on this. And I really like your point of just, is it still enjoyable? Do you like working with your founders? Following this thread of the struggle training a little bit more, one of the founders that worked with you during YC, his name is Danny Alberson, shared a story how during one of the batches of YC, one of the founders raised his hand and asked you, "What is wrong with our batch? Everyone is struggling, nobody is doing well. What have we done wrong?" And you shared a story about Brex that made everyone feel a little better. Does that ring a bell and if so, can you share that?

**Dalton Caldwell** (00:12:08):
That definitely happened and I think the story is the story of the Winter-17 batch. And in the Winter-17 batch, I funded something like, I don't know, 35, 40 companies in my group. So we subset them into groups. So it wasn't a lot of companies and I knew all of them really well. And founders can't help but compare themselves with other founders all the time about who's doing well and who's not doing well. And there was this one company in my group, this batch, it was called Vyond, that was their name at the time and it was a VR headset thing from these Stanford dropouts. And they basically showed up to group office hours and were just ashamed and they're like, "Our idea is horrible. We might want to shut our company down. This is really embarrassing." I had to beg them to not give up basically. And if you would've asked people in the batch what the worst company was, I think they would've said this one. Again, not because they were bad people but the founders themselves seemed despondent about how it was going.

**Dalton Caldwell** (00:13:13):
And then funnily enough, this is in the story too, there was another startup also in my group called Cashew, which was this P2P Venmo, excuse me, in the UK and it was going really poorly also and not growing. And so if you just took this snapshot in time in the middle of the batch of who is definitely not doing well, it would clearly have been this Vyond company and this Cashew company. And so to cut to the chase, Vyond changed their idea and got really excited about it and renamed to Brex and this was Brex, which is like a decacorn. And Cashew changed their idea and renamed to something called Retool. And so out of my 35 companies, the ones that objectively seemed the worst in terms of everything is going bad, were by far, in retrospect, the most successful companies in that group.

**Lenny Rachitsky** (00:14:08):
Wow. Wait, so you're saying Brex was a VR headset company?

**Dalton Caldwell** (00:14:14):
They thought it was really high-tech. They want to do a really high-tech startup, and so they're like, "We're going to build a new VR headset." And yeah, they were good programmers, but they just didn't know anything about optics or the things you might want to be an expert in to build a headset.

**Lenny Rachitsky** (00:14:26):
Wow, that's an amazing story. It's a great segue to just another theme that emerged from talking to founders about advice that you've shared. A lot of people tell me you are the king of the pivot of helping people figure out how to pivot. I'm curious just what you've seen makes a good pivot.

**Dalton Caldwell** (00:14:45):
Usually a successful pivot gets warmer instead of colder from what you're an expert at and somehow builds on what you learned on the prior idea. Right? And so in the case of Brex, it was they had worked on a FinTech company in Brazil when they were younger, and so I'm like, "You need to work more on the thing all about and not the thing nothing about." And that was what worked for them. In the case of Retool, it was the same thing. They had built similar internal tools both at their internships as well as for Cashew. They had all these dashboards they built to operate their Venmo competitor. And so they knew a lot about what to build in the case of postprod, pivoting and through idea, they knew a lot about analytics and had strong opinions about it. And so it was much closer than what the original idea is.

**Dalton Caldwell** (00:15:41):
In the case of Zip, Rujul knows a lot about a lot of things and he knew a lot about the crazy picture and process at Airbnb because he worked there. A good pivot is like going home. It's warmer, it's closer to something that you... And it never occurred to you that this thing you know all about would be a good idea or maybe you consciously are like, "I don't want to work on this because burnt out on it." Sometimes someone has to get over this barrier they have on why they don't want to work on a certain idea.

**Lenny Rachitsky** (00:16:18):
These are amazing. I like how modest you are. I'm like, "Oh, here's a big idea." And then you just give very tactical items to look for. So essentially a good pivot in your experience is you're getting closer, warmer towards something you have actual experience in, and two, it builds on something you've done. Can be essentially the core idea of a pivot, right? Where you're...

**Dalton Caldwell** (00:16:38):
In the example of Segment, which is obviously a really big successful company, they started with something to tell your professor you were confused in class. It was software that they sold to universities. And then they ended up pivoting to something like a mixed panel competitor after two years and it's because they learned about how analytics works running their first idea, okay? And then no one wanted to adopt their mixed panel competitor. And so they were like, "We should make this JavaScript thing that you embed on your website that can send events to multiple endpoints at the same time so that way people would be willing to try our mixed panel competitor side by side with mixed panels to show that it's better." And then they were like, "Oh yeah, no one actually wants that. They just want this JavaScript to send events to different locations." And so there's no way those founders could have started with the final idea. You get what I mean?

**Dalton Caldwell** (00:17:30):
There was no universe where they would've made up the idea for Segment because they didn't know anything about how analytics worked, but because they were grinding for multiple years and became experts on these things is a side effect of their earlier ideas. They ended up with really good unique insights.

**Lenny Rachitsky** (00:17:45):
I think that's a really important point there is you don't need to necessarily have that experience before you start the company, could come from trying to build the company.

**Dalton Caldwell** (00:17:51):
Exactly.

**Lenny Rachitsky** (00:17:53):
A big question people are always wondering is, should I pivot? Is this the time to pivot? Should I keep trying this idea? What's your advice there of just, okay, now you should really be thinking about something else?

**Dalton Caldwell** (00:18:02):
Again, this is one of those where I like to give very bespoke nuanced advice on a case by case basis to the folks in YC. But again, just to give you a preview of how I would think about it, I would look at how many more ideas the founder has on how to make it grow. If it's not going well and you're out of ideas, that is usually a good time to pivot. But when you have half a dozen or a dozen really good growth ideas that you haven't tried yet, try them. Right? Hey, give it a shot. Again, in the Airbnb story, right? They tried all sorts of stuff including cereal and conventions. They had a bunch of zany ideas on growth and they didn't run out of them. And so I think when there's still gas in the tank on an idea that might be a reason to stay the course. And when literally the founder is like, "Yeah, I don't know, I guess maybe we should pay influencers or something." When that's the kind of ideas they're coming up with, that might be a better sign to pivot.

**Lenny Rachitsky** (00:19:03):
That is incredibly helpful. Coming back to Zip real quick, they went through I think six different pivots before they landed on this idea that is now a billion-dollar business. Is there anything from that specific journey that you found really interesting? Because they went in so many different directions like accounting, marketplaces and-

**Dalton Caldwell** (00:19:18):
Yeah. I think in the example of the Zip founders, they were both such great experts and I knew Rujul really well. He actually worked with me at YC as a visiting partner. And so I was really close to Rujul and he had done this marketplace called FlightCar when he was younger, which was raised a series B, it didn't work out, but it was a really cool company. And I had a lot of confidence in his competence on running a business and executing fast and just having great instincts. He really knows the fundamentals and the problem was they weren't as clear on what market to go into, is still with me. And so I actually suggested to do something in their case, again, this is very bespoke, but my suggestion was to start by looking at what companies are publicly traded and/or owned by private equity that are large and that also are hated by their customers, and to try to intentionally find where there's a knowable big market within incumbent combined with the software is horrible.

**Dalton Caldwell** (00:20:29):
And they did that. They basically found out about all this procurement software and what the state of the art was and that was the prompt. Again, maybe he told you this, that was basically the process.

**Lenny Rachitsky** (00:20:41):
He did tell me that. I love that example and piece of advice so much. I don't know why more people don't do this. Basically find a large incumbent with very low NPS and try to disrupt them. So straightforward.

**Dalton Caldwell** (00:20:54):
Yeah, I mean, I can't promise that works for everyone, but again, in the very bespoke situation with Rujul, it worked really well because he actually knew exactly once he locked in on that prompt, oh man, he ran a masterclass. They did an A-plus job, was really good.

**Lenny Rachitsky** (00:21:12):
Also Lou, his co-founder, credit to him too.

**Dalton Caldwell** (00:21:14):
Of course. Sorry. Yeah. We got to give Lou the shout-out. Lou did an amazing job. I just didn't know Lou as well before he did YC. But you're right, we got to give Lou the credit.

**Lenny Rachitsky** (00:21:22):
I was watching your chat with Michael Seibel talking about pivots and either you or he used this phrase of you want to move towards the mountains in the desert to find the gold of a new startup idea versus the middle of the city. You're unlikely to find gold in the middle of San Francisco. Is there anything along those lines that you can share?

**Dalton Caldwell** (00:21:41):
Yeah, I think maybe this pertains into what we see from applications and interviews, which is from where I sit seeing everything people apply to YC with and what they interview with and whatnot. People all have the same idea. Basically imagine this, imagine your information consumption where you're listening to the same podcast, wink, wink, you're reading the same people on Twitter, you're reading the same blog post. Basically you have the same information diet of all these other founders and you're friends with all the same people. Does it seem surprising then that you would all end up with similar startup ideas or similar philosophies on what makes a good startup idea? Of course you are. So this is the metaphor on cities is that if you just are following the same principles and have the same information flow into your brain, you're going to come up with the same ideas with everybody else.

**Dalton Caldwell** (00:22:37):
And so the prompt here is to try to go more off the beaten path either from your personal experience, like in the case of Brex and Retool or Whatnot. There was no one else trying to build marketplaces for Funko Pops. Go deeper in your own personal interests or experience to find something that just your exact peer wouldn't come up with in exactly the same way. And again, the Zip example, I don't think other people were trying to build wonky procurement software. That was not an idea that we saw much of. And so again, the prompt to people is try to mix up what your information diet is or what areas of expertise you have and mine that well, versus just having all the same thoughts as everybody else. And so again, let me give you one more example.

**Dalton Caldwell** (00:23:24):
A few years ago, startups around trucking were super new and fresh because no one was doing them and they worked really well and then it became completely conventional wisdom to do trucking related startups. I'm not trying to diss anyone, but you'll see things that become fashionable really quickly because someone found success in this unfashionable space and then it becomes fashionable.

**Lenny Rachitsky** (00:23:45):
This is a good segue to something I definitely want to spend time on, which is you have this concept of tarpit ideas, which are essentially ideas people all gravitate towards and get stuck in and either pivot into and then can't pivot out of or try to pivot out of. And essentially it's just consistently bad startup ideas that people continue to try to start. Can you just talk about this and then what is examples of just bad startup ideas that people should stop trying to start?

**Dalton Caldwell** (00:24:10):
For people that are familiar with this terminology from us, sometimes they get defensive and don't get what we were saying. By definition it is only a tarpit if it seems like it's not. If it's just a regular idea that is hard, that is not a tarpit. The weird aspect of what we call a tarpit idea is an idea that a lot of people come up with and then it seems like an unsolved problem and you get lots of positive feedback for. Right? And you have a really good set of arguments that it's a really good startup idea. And that's different than a bad startup idea. Do you get what I'm trying to say? A bad startup idea is, I don't know, something that is obviously bad or something where you just can't get any positive feedback on. But some of the most common tarpit would be something like building an app to coordinate with your friends to decide where to go out at night or where to meet up with people, which is really, it's coming from a good place. It's a good idea.

**Dalton Caldwell** (00:25:10):
If you ask your friends, "Hey, would you like an app for us to coordinate to hang out more so we can be friends?" They're like, "Yeah, I would love that." You'll get all this positive feedback from the world. And man, people have been starting that startup since the '90s and so you can validate it. Part of being a true tarpit is that you can get good initial validation. Do you get what I mean? And so anyway. And honestly I worked on tarpit ideas myself as a founder, which is a music discovery. This is something I did in my first startup. Music startups are hard and trying to be like, "Oh, we're going to fix music discovery." This was classic things where you can get lots of positive feedback and even get users to work on those things, but there are aspects of it that make it a very hard idea. So does that make sense?

**Lenny Rachitsky** (00:25:59):
Absolutely. I'm also guilty of this. I had this startup called Localmind that allowed you to talk to people, check-in in various locations around the city, on Foursquare and Google back in the day and asked them, "How's it going?" And everyone when they used it, they're like, "Holy shit, this is the most incredible thing I've ever seen. I could see what's happening at this bar that I'm about to go to." And then they never use it again.

**Dalton Caldwell** (00:26:19):
Do you remember when Foursquare clones was all anyone worked on for-

**Lenny Rachitsky** (00:26:21):
Yeah.

**Dalton Caldwell** (00:26:21):
Years?

**Lenny Rachitsky** (00:26:22):
They told us Foursquare is going to own this. There's no way this idea you're building is going to be its own thing. And now, yeah, Foursquare is a B2B business.

**Dalton Caldwell** (00:26:30):
Yeah. And all the Foursquare clones, if they didn't pivot out of doing what they're doing, wouldn't have worked. So anyway, that's a tarpit, is just something that's super appealing and a lot of people do it. And then you can get validation and that's why is a tarpit, is it draws you in and you get stuck because it seems like it's a good idea and you get all this positive feedback.

**Lenny Rachitsky** (00:26:50):
Along these lines, I was talking to a founder recently and she's asking me, "What causes an investor to say no to you when you're trying to raise money from them?" And I know every investor has a very different perspective on what turns them off to a startup, but is there anything that you find is just like, here, if you do these things, investors will say no.

**Dalton Caldwell** (00:27:09):
Maybe my best advice here is for founders to put themselves in the shoes of investors and just imagine what their life is like and how if you are in their shoes you would make decisions. And so given this framework, a lot of investors just don't make that many investments and as per what we talked about earlier, life is short. And so there's lots of things that an investor that in their hearts thinks it is pretty good and they're like, "Oh, I like this person and I like their pitch, but I only am going to do a few investments. And so even though I really like a lot about this, I'm going to say no." And I often think that founders think that there's some secret truth that's being held from them on why someone says no or they want more feedback. "I need feedback." That's like, well, the feedback is we didn't want to invest and it really is just that.

**Dalton Caldwell** (00:28:05):
And so I think if you put yourself in the shoes of an investor of like, "Hey, I only could do a few of these a year, I have very limited budget." They're really just trying to pick the things that they're either personally most excited about or things that they think can be truly phenomenally big in some way. Or again, I know you do investments too, so it's that you only get so many shots as an investor. And so anything that doesn't seem like this is the one, this is the one I want to do is a no. And that that's actually why they're saying no versus, "Oh, you had a bad zoom setup or something. Oh, we didn't like what color your shirt was. We said no." I don't think that's how this actually works.

**Lenny Rachitsky** (00:28:50):
I think that's such a good piece of advice that it's not necessarily they don't believe in what you're doing, it's they have better options and they're waiting for something that hits the higher bar because they have a lot of options.

**Dalton Caldwell** (00:29:00):
Yeah. Because again, if you ask someone or put yourself in the investor's shoes, wouldn't you be making decisions the same way? Usually founders are like, "Yeah." If you do that exercise, a lot of this starts to make way more sense.

**Lenny Rachitsky** (00:29:14):
Specifically when you're evaluating startups. I wasn't going to go into this, but I think it might be interesting, is market size. How do you think about the importance of large TAM as an investor YC?

**Dalton Caldwell** (00:29:25):
I think it really depends on what stage you're investing at and it's absolutely critical the later stage you get. Right? If you're going to invest in a very high valuation, it is really important. The earlier you go, the less it matters. And some of the most phenomenally good startups, if you were really pedantic about it, the TAM would be tiny. The TAM of Uber would be nothing, right? The TAM of Airbnb would've been nothing. TI funded Razorpay, which is I think the largest payment processor in India, and the TAM of that was tiny because no one was using credit cards in 2015 in India. So you had to believe that the size of the credit card industry in India would 100X. Well, guess what happened? You know what I'm saying? So I'm not saying that having a large market someday doesn't matter, of course it does eventually. But trying to be super pedantic about market size when it's a pre-seed company or someone applying to YC, it's just not something I'd put a lot of thought.

**Dalton Caldwell** (00:30:34):
And again, Whatnot. What's the TAM of the collectible Funko Pop industry? I don't know. I don't think it's that big, man. I don't know if you did that analysis when you invested, but I think is pretty small, but I wasn't worried about it. That was the last thing I was worried about.

**Lenny Rachitsky** (00:30:49):
It makes so much sense that at YC you don't think about it that much because of, as you said, many startups pivot anyway. So if you like the team-

**Dalton Caldwell** (00:30:57):
Yeah. And I'm not saying it's not important, it's not... And the things I'm worried about is like, hey, how do you get users? Hey, how do you grow? Things like that. Are you making something people want? Those are the things I'm really worried about as opposed to, ooh, I ran an Excel model and I'm worried this might not be a big enough TAM. That's not the top of my list.

**Lenny Rachitsky** (00:31:15):
I think it's important to acknowledge that a lot of investors are very... YC I think is unique in a lot of ways where you invest very early and you help people through this journey. A lot of investors are very focused on TAM, so you may find you're getting turned down because they don't think there's a big enough market for you to build a big business, right?

**Dalton Caldwell** (00:31:32):
Yeah. Or that you're asking them to believe a crazy leap of faith that, again, they could say, "Well, it's theoretically possible you'll be able to sell more than Funko Pops, and I understand that that is your pitch, but I have other opportunities that are less risky." You know what I'm saying? A lot of founders make the argument that the TAM is big, and you can say, "Wow, that's a really interesting argument and I'm not going to argue with you about it, but no, I'm not going to..." And so again, it's hard to get someone to engage in a debate about TAM even if you have some proof points. Ultimately, a lot of investors just don't like that risk. Fair enough.

**Lenny Rachitsky** (00:32:15):
Fair enough. Going in a slightly different direction. So someone else that worked with you, another Lenny, Lenny Bogdonoff who started a company called Milk, and then he was head of growth at OpenAI for a bit. He asked me to ask you about things product leaders and startups should watch out for. Does that ring a bell?

**Dalton Caldwell** (00:32:35):
I don't remember the specific office hours, but I understand the question and I of course remember Lenny. I think that the advice that he's referencing here is just how important it is to not overdelegate and for the founders to stay close to things, as well as watch out for the trap of hiring super senior people with fancy resumes, really early in a startup. I think that's what he's referencing there. And again, this is definitely one of those very basic things that we find ourselves repeating a lot where they're like, "Yeah, yeah, I get it. Don't overdelegate. We get it, Dalton." And then two years later they're like, "Wow, we overdelegated. We need to go clean that up." So that is probably the best product advice. And the folks that are really great at product, the founders that are always deeply in the weeds on product and still care a lot and are still talking to customers, no matter how late stage it gets, again, I'm sure you experienced this in Airbnb culture, but you can't delegate caring about your users and you can't delegate caring that the product is great. That is so critical.

**Lenny Rachitsky** (00:33:36):
To make this even more real, what is it that you see them do? It's they hire a PM too early, they hire a senior salesperson too early, what are the-

**Dalton Caldwell** (00:33:43):
Yeah, I think that you get pushed often by investors to hire executives or to scale the team or you raise all this money, you got to spend it, you got to show you're serious about growth and building a world-class organization, whatever, stuff like that. And so you end up with super nice people with super shiny resumes from big tech companies. "Oh wow, they did this amazing thing at Google." And then they hire them and then you wake up one day and you're like, "Oh wow, everything went wrong." It's not really anyone's fault, it's just that you took your eye off the ball and this is what happens to first-time founders a lot.

**Lenny Rachitsky** (00:34:24):
How do you as a founder then have time to do all these things? Is there any guidance you give just like don't overdelegate, don't over hire? But also, you have 24 hours in a day? Is it just find the time, prioritize well, or is there more to it?

**Dalton Caldwell** (00:34:39):
I think if you just care a lot about your customers and you care a lot about the product, your instincts are pretty good on what to spend time on. And so for example, spending tons and tons of time hanging out with investors and networking, it's probably the thing that I would be cutting. You know what I'm saying? It's what we talked about earlier. If you really love what you're doing, no one needs to tell you how to reprioritize your time. Your intuition will be correct on what you should be spending all your time on, which is being obsessed with product.

**Lenny Rachitsky** (00:35:12):
**Dalton Caldwell** (00:36:54):
Oh, Cool. Okay. I don't know if I can feed with that. All right.

**Lenny Rachitsky** (00:36:56):
I think you can. So I asked him what is often the most common reason a startup fails? And his answer was they don't talk to customers, they don't find product market fit. They nothing else matters if they can't do that. And so his advice is talk to customers more often. So two questions here. First of all, just is there anything else you would add to why do startups fail? I know we talked about some of these already, but just what comes to mind there?

**Dalton Caldwell** (00:37:23):
I completely agree with what Gustav said, but to look at this from a different frame, I think is that the founders lose hope. And when you and your heart is like, "Yeah, we're failing." I can see it when I'm meeting with a founder, when they resign themselves that they're failing versus. First is when like, "We got one more move in us. We got one more try." You can see in their eyes when they feel like there's more ideas or there's some last ditch Hail Mary thing. It doesn't always work, but it's almost like you have to not accept that you're going to fail. And as long as you don't accept that that's going to happen, there's usually a lot more moves you can try to save the company. Maybe it's to get profitable, maybe it's to do some other zany thing, maybe it's to launch a new product.

**Dalton Caldwell** (00:38:17):
And so it's pretty rare, I would argue, that the cause of death is that they had lots of firepower and they were feeling really positive and they just ran out of money. That's actually more rare than founders think. It's much more common that they still have some money left. I'm not saying a lot, but some money and they're just like, "Yeah, I'm done. I'm out of ideas. I don't want to do this anymore." And again, fair enough. But do you get what I'm saying? I think founders are afraid that they're going to run out of money and that's why they're going to shut down. And it's way more common that their idea doesn't work and they have a big fight with their co-founder, and then they can't agree on what to work on, and then they just like, "I don't want to do this anymore." And they shut down. That is the most common cause of death, is something that sounds like that story.

**Lenny Rachitsky** (00:38:59):
That is so interesting. And again, this comes back to your core advice. Don't die. Just don't die. We talked about this already of just sometimes it's actually okay to die. And I guess just to refresh that lesson is if you're not having fun anymore, maybe it's okay-

**Dalton Caldwell** (00:39:16):
Yeah, you're out of ideas. You're like, "I'm done." If in your heart that you're done, you don't have to keep going through the motions. No one benefits.

**Lenny Rachitsky** (00:39:23):
And you've also seen enough cases now, you've shared a few of these where all hope was potentially lost, but they kept going and then they turned into a huge success story. And I think most people don't see those examples. I guess is there anything you can share just how often that happens, how often you see that turn around?

**Dalton Caldwell** (00:39:41):
I would argue that if we define it as the company had a near death experience where it was going poorly and the founders seriously wondered if it was all going to be over, a hundred percent of the time people go through that where the founder's like, "Yeah, I guess we're done. I guess we should pack it in." And at least you feel that way at some point in your startup journey, man, everyone goes through that. And again, there's gradations, people that actually truly got down to very, very hard situations. It's still a high percentage, maybe 50%. I mean, you can ask founders, there's a lot of founders that come this close to it all being over and through sheer will just keep it going.

**Lenny Rachitsky** (00:40:21):
That is really empowering, I imagine, for many founders hearing this of just knowing every single founder goes through, okay, I think it's actually over. Following on this real quick, the advice that Gustav shared, which is about talking to customers. I'm just going to keep trying to pull wisdom out of your head. Do you have any advice for just how to effectively talk to customers? We're always hearing, "Talk to customers. Build things they want." Easier said than done. You get a lot of asks. You get one customer asking for a lot of stuff. There's a big company that's like, "Build this thing, we'll pay a million dollars." Just do you have general guidance of just what to pay attention to and what to build versus avoid?

**Dalton Caldwell** (00:40:57):
Yeah, I think when I talked to aspiring founders about this a lot, they're like, "Yeah, yeah, yeah, I talked to customers. We get it. Cool." And I'm like, "Cool. Well, how many customers do you talk to?" And they're like, "Well." And they get really quiet. And so I think this is one of those things like, hey, you should have a healthy diet and exercise every day or whatever, where people know it and that doesn't mean they do it. And so I think to start with, you have to get out in the world and talk to people in person. And you can't just hide behind your keyboard and call that talking to customers. Right? I think a lot of folks, the inclinations are to build a landing page and buy some Instagram ads and try to get people to sign up for something. And again, maybe that's something, but I think a lot of the reason people do that is they're just shy and they don't want to put themselves out there because it's a little awkward to go talk to people.

**Dalton Caldwell** (00:41:49):
And you have to set yourself up to go out in the physical world, get people to meet with you, get them to take you seriously, show them a product you're building. And so again, it'd be very tactical here. You can do a self-assessment. In the past month, how many in-person physical meetings have I had with potential customers? Maybe you've done a lot, I don't know, listener, maybe you have, but it's shocking how many companies I talk to, they're like, "Well, we're focused on raising our pre-seed round before we talk to customers." Things like that. And again, I think the core, core thing going on is just social anxiety and looking stupid. And I think you just got to get past that. You just got to start doing it until it doesn't feel bad anymore. Think about how stupid the Airbnb founders must have felt. They were like, "Hey, you should rent out your house and I'm going to come and sleep in your house, and here's an airbag."

**Dalton Caldwell** (00:42:51):
The whole thing is a little awkward, right? So you got power through the awkwardness of talking to people, and once you start doing it's actually fun. And so once you get used to overcoming this awkwardness, I think people do much better at talking to customers.

**Lenny Rachitsky** (00:43:08):
When someone does this self-evaluation, is there a heuristic that tells you this is enough? What do you look for? Is there a number? How many per week? How many per month?

**Dalton Caldwell** (00:43:17):
Yeah, I don't know if I know a good number. I think it's look at your calendar and there should be 20 or 30% of your time that the calendar says something like customer meeting, customer call, meeting with who, meeting with this person. And when the calendar is not that or it's all... Again, what you're actually doing is just buying ads to try to validate your idea, I don't think that's talking to customers. I think that's something else.

**Lenny Rachitsky** (00:43:46):
That's an awesome heuristic. So roughly fifth of your time at least should be talking to customers.

**Dalton Caldwell** (00:43:51):
Yeah. And again, it depends on the idea space you're working on. Some are more, some are less. So yeah, it should be a fair amount of time. And nothing substitutes for an actual conversation versus just staring at analytics dashboards.

**Lenny Rachitsky** (00:44:02):
Makes so much sense. So the Airbnb is a classic example of they went to New York and talked to their host and things like that. Is there another startup that comes to mind that did this really well, that found just a really cool way and hustle to talk to customers?

**Dalton Caldwell** (00:44:14):
Well, again, some of the companies we talked about, I mean, for Brex, they were just talking to other people in their batch and that worked extremely well. Same with Retool is they just sold it inside of the YC network. I think with Zip, they were just beasts at getting companies on calls with them to ask them about procurement. And I think they had way more than 20% of their time. When you looked at their calendars, oh man, they were talking to customers a lot to build their first product and pre-selling it before they built it. Same with PostHog I guess that's a different go to market. They launched this open source thing to start with and their calendars are filled with people that were trying to implement the first open source version of PostHog or were so excited about it.

**Dalton Caldwell** (00:44:59):
And people on Hacker News were excited about it and they had this huge influx of people that were excited that PostHog existed and had lots of feedback and web reports. It wasn't always positive, but they never lacked for people that wanted to talk to them once they launched that, which was very helpful.

**Lenny Rachitsky** (00:45:17):
On Zip, I actually have a lot of their story in one of my series on how to build a B2B startup. And what they did actually, as you know, is they just called, DMed people on LinkedIn and ask them for advice on, "Hey, we're trying to understand how you enjoy your current procurement products." And then they ended up being early beta testers. And I think they did hundreds of these. They just-

**Dalton Caldwell** (00:45:38):
Oh, yeah, no, it was a numbers game. They were just grinding at this. And so yeah, that was very good.

**Lenny Rachitsky** (00:45:43):
The other classic YC stories, the Collison Collision, I think it's called or the-

**Dalton Caldwell** (00:45:47):
Collison Install.

**Lenny Rachitsky** (00:45:49):
Oh, Collison Install. Okay. Can you tell that story briefly?

**Dalton Caldwell** (00:45:53):
The Collison Install is what often happens with customers, is that they say, "Yes, I want you buy your product." And then they do not implement it, they just go quiet. There's no implementation and this is very bad if you're selling software to someone. If they never implement it, they're going to churn. You basically failed on the one yard line, okay? And so they developed this tactic to be like, "Oh, well, I'm at the neighborhood, I'll drop by your office to help you implement Stripe and just create..." Again, it was a little awkward like we talked about earlier, but you would be like, "Yeah. I'm in the neighborhood. How about I drop by?" And then they would show up and they'd be like, "Cool, cool. Can pull up your text editor?" "Oh yeah, cool. All right." "Hey, can I drive? Can I have the keyboard?"

**Dalton Caldwell** (00:46:43):
And they would just install Stripe into the customer's website, smiling, being charming guys. And they'd be like, "Oh, that's cool. Okay. Well, can we roll out the website now?" And they basically would not go away until you finish the implementation of Stripe. And again, it was actually helpful because they were doing all this white glove service to get it implemented. That was very effective. And I think the takeaway from that story is even when you get a yes, you're not actually done with sales. You have to finish the last mile to get the thing implemented. And they were very good at that.

**Lenny Rachitsky** (00:47:18):
That was an incredible story. And now they're, I don't know, a hundred billion in business and that's how it all begins.

**Dalton Caldwell** (00:47:24):
Yeah. I was an early Stripe customer at my startup and yeah, Patrick would... We used Google Talk at the time. Patrick would be sending me messages on a weekly basis just checking in. And so again, it's funny how successful these folks get, but yeah, Patrick was very hands-on with all of his customers and was extremely available. I can say that because I was one of them. Yeah.

**Lenny Rachitsky** (00:47:47):
And I'm sure he had social anxiety going through all that. That wasn't a comfortable thing to do, just keep pushing people to install your software and deploy.

**Dalton Caldwell** (00:47:54):
Oh, surely not. If you want your startup to work, this is just what you got to do. Comes with the territory.

**Lenny Rachitsky** (00:48:01):
This is going to be just a way broad question and I don't know if you'll have an answer, but just are there other just patterns you find across startups that do well? This is maybe the $64 million question of just founders and what they do that ends up leading to success.

**Dalton Caldwell** (00:48:15):
I don't think personality types matter as much. I've seen very quiet people, very extroverted people. You name it. I've seen all sorts of personality types. So for me personally, I don't think there's a personality type that people should copy and be like, "I need to be like this person. I need to be Steve Jobs. I need to be Elon." I don't really believe in that because there's just so much variation. Tony from DoorDash is so different than a lot of folks, and Rujul is so different and Grant from Whatnot. These are all very, very different people. Patrick is a different kind of person. Ryan from Flexport. These are just very different personality types. But the thing that I would argue folks that build really big companies have in common is they just really want it and they really believe in themselves and they really believe they can make it work. And that they're somehow deep in their internal psyche, there's something that's like, "I'm the one and I won't accept this not working."

**Dalton Caldwell** (00:49:26):
And even though objectively there's all this data coming in, this isn't working, this is bad. My employees want to quit, my executives want to quit. Whatever it is. Somewhere deep down in there, they're like, "Oh yeah, I'm going to make this work. This company is going to be big." And they just believe. And it's almost like that internal gravitational force inside of them is so large, it warps the world to bend to that will. And people start to believe it because they believe it so much and they convince their employees to believe in and they convince everyone around them that this is going to happen for them. And so again, this is not a personality trait. I'm arguing this is a core belief.

**Lenny Rachitsky** (00:50:10):
So interesting. And it connects so much to what we've been talking about. Just don't die. Don't lose hope in what you're working on. A founder hearing this might feel like, "Man, I don't know if I'm so convinced this is going to work." In your experience, how much of this is internally, they're so certain and convinced versus externally, they need to show this confidence?

**Dalton Caldwell** (00:50:31):
Well, I think it's internally they're convinced. Yeah, I'm not sure it's external. But, and this is the big but, no one has this at the early stages when they don't have a good idea and they don't have customers and it's objectively not working. And so again, I know a lot of founders are like, "Well, I don't feel that way. Oh no, maybe I'm an imposter and I shouldn't do a startup." Well, of course you don't feel that way if you haven't talked to any customers and haven't built a product. But what usually happens is you pivot to a good idea where you start with a good idea that you care about and customers you care about and you launch it. And the better the product does, the more obsessed you get with your own company.

**Dalton Caldwell** (00:51:12):
I think in the case of Stripe, I don't want to tell Patrick's story for him, but I recall him saying at some point he wasn't as sure that Stripe was going to work until they were a year or two in. And then once it started working and then they really believed in it. But it wasn't like he woke up one day and like, "Stripe is the thing. It's going to work." I think you build conviction and you have this network effect virtual cycle where you get work conviction. The more customers reflect back to you and data reflects back to you that you're on the right track.

**Lenny Rachitsky** (00:51:45):
This is exactly what Scott Belsky shared in our episode when I asked him when to pivot is, do you have more conviction this is going to work or less conviction over time? And so I like that connection we just made there. Okay, so we've talked about all these way startups fail, bad ideas, tarpit ideas. I want to go to the flip side and talk about good startup ideas. So recently you put out a request for startups, which is essentially 20 categories of ideas that you want to fund, that YC wants to fund. Can you share some of these ideas that you're excited about? And basically you're looking to fund and looking for founders to work on.

**Dalton Caldwell** (00:52:21):
Yeah. And so we put out the request for startups just to inspire people to maybe apply with ideas that aren't the ones that we always see. It's not prescriptive like we will only fund ideas on this list. It is not that at all. Remember what I talked about earlier with information diet? We're trying to mix up some of the information diet about what kind of ideas people might be contemplating. There aren't currently. And so a couple of the ones that we put out there, I made one about ERPs which is enterprise resource planning software. And I did that because I get so few applications on that and they're usually pretty good. And I just would love to see more people look at that and learn about what the ERPs are, just because it's so rare that people apply with that. And now I have a feeling we're going to see a lot more applications working on that. And so it worked as intended, which is to introduce this idea space to founders that didn't even know what an ERP was. Now they'll go learn about it.

**Dalton Caldwell** (00:53:16):
Another one is we'd like to fund open source companies. And so that's one of the RFSs where if more people apply to YC with open ideas, I think we'd be pretty excited about that. Maybe founders didn't realize that that would be something we want to fund. Same with space companies. Yeah, we've had a lot of success with space companies. Several of the folks that are actually going to space right now that aren't SpaceX or YC companies. And so I think sometimes founders feel like those ideas are too bold and ambitious, but no, I'd love if more people apply with space companies. And so think about it that way, where we're trying to put out of idea spaces that perhaps someone subconsciously filtered out as what might be a good startup idea. And hopefully that creates a new set of startup ideation for the person.

**Lenny Rachitsky** (00:54:08):
And we're going to link to this page in the show notes for folks that want to explore. I'll give a couple more real quick. A way to end cancer, no big deal. Spatial computing, new defense technology, bringing manufacturing back to America. So a lot of hard science, deep tech stuff, which is maybe a new... I don't know. I imagine you guys have invested this in the past, but it feels like trend.

**Dalton Caldwell** (00:54:30):
We totally have, right? So these aren't like, "Oh, we've never invested in these before." It's more of like, "Hey, it'd be cool if we saw more applications along these lines." It would be nice because it currently feels a little bit under... There could be more startups working on this stuff.

**Lenny Rachitsky** (00:54:46):
Yeah, instead of the tarpit ideas. A couple more real quick, better enterprise glue.

**Dalton Caldwell** (00:54:51):
Yeah, I like that idea.

**Lenny Rachitsky** (00:54:53):
Say more about that. What does that look like?

**Dalton Caldwell** (00:54:55):
The software to connect all these business systems is usually pretty brittle and janky, and there's been lots of good startups founded to solve this problem. I think there's still a lot more room for improvement and likely LLMs will improve. We'll probably be able to create better and better glue so all sorts of software systems can talk to each other. And so again, very broad idea. But yeah, I think we'll see a lot of very successful companies where that's the kernel of the idea they start with.

**Lenny Rachitsky** (00:55:20):
Awesome. One last one. Small fine tune models as an alternative to gigantic generic ones. Yeah. Sweet. And so we'll include this link in the show notes and folks can click on each of these and there's a lot more explanation of what it is you're thinking about there. Awesome. Okay, just a couple more questions.

**Dalton Caldwell** (00:55:37):
Yeah.

**Lenny Rachitsky** (00:55:39):
One is just your background. So from what I've read, in the early 2000s, you were basically hanging out with some of the biggest success stories of today. Folks like Zuck and Reid Hoffman, Sam Altman, Elon, Sean Parker. This is before they really became anyone and they all became very successful. I'm curious just looking back at that, what you've noticed is consistent across these folks that ended up being really successful over time.

**Dalton Caldwell** (00:56:06):
Back in 2003, being in Silicon Valley and being interested in startups, it was a really small space. There just weren't that many people that were into this stuff. And so I remember I cold emailed Reid Hoffman when LinkedIn was 12 employees and he just responded and he's like, "Oh, let's have lunch." He was just a guy and everyone else that was doing, I guess you could call it social networking, that was the people that I knew. There was a few conferences you would go to and there'd be 30 people there. It reminds me of stories about the Homebrew Computer Club. I'm not saying this is as cool. But when I read stories about what it was like when the Homebrew Computer Club existed, it was a very small number of people that all knew each other that were real weirdo outsiders that were into this stuff, okay? And so that's what in the post.com boom Bay Area startup scene, that's legitimately what it felt like.

**Dalton Caldwell** (00:57:03):
And so I didn't think a lot about the personality traits of these people. Again, they were all pretty different people, but what they had in common is the folks that are now the really big names just had a lot of staying power. Right? So when I met Sam, he had dropped out of Stanford to work on Loot, which is hilariously a way to find people around you to hang out with. An interesting theme here, huh? He was cool. He was this really young guy and he just did that. It wasn't huge. And then he got into other stuff and ended up working at YC, ended up getting involved in hard tech and has now reinvented himself as the big mind behind AI, which again, awesome. But if I think about who he was back in the day, yeah, he was a 23-year-old working on a thing for feature phones to find friends in your neighborhood.

**Dalton Caldwell** (00:57:58):
Their customer was Boost Mobile. I bet you could go find the commercials for Loot that Boost Mobile put out on YouTube. Those are actually pretty funny. Have you seen those commercials?

**Lenny Rachitsky** (00:58:06):
No, but I'm going to go check them out.

**Dalton Caldwell** (00:58:07):
Anyway, it's pretty funny. So yeah, that's the real story. And then, yeah, I remember I was in downtown Palo Alto at the time, and some of the folks I was friends with were friends with Sean Parker, and this was actually before Sean Parker went to Facebook. He was part of Napster. And so one of my friends was like, "Oh, we need to get my friend a ride to the airport." And so I ended up giving Sean Parker a ride to the Oakland Airport. And again, what was he like? I don't know. He just basically sat in the back seat on the phone the whole time. But again, my point is I wasn't like, "Wow, these are going to be really big successful people that one day will be important in the world." It just felt like a bunch of nerds that really liked the internet and computers, doing things that they were interested in and were just obsessed with this.

**Dalton Caldwell** (00:58:57):
They weren't like, "Gee, should I move to New York?" Or, "Maybe I should go to law school." It was people that were very bought in to staying working on internet companies. And so you'll see these folks just reinvent themselves multiple eras, right? Okay, like Reid Hoffman, he worked at PayPal, right? And then he did LinkedIn and then he was a VC. He's had all these different eras where it's the same person, but it's almost like a different figure, right?

**Lenny Rachitsky** (00:59:28):
There's a lot of interesting lessons there. One is that your career is long and you'll have the opportunity to do many things and you can continue to shift. In my example, this is my fourth career, I realized. I was an engineer, then a founder, then a product manager, now whatever this job is. And I think that's really common. I think the other, again, is the personality types point, which I didn't comment on, but I think it's so important that you can be super introverted and be super successful. You can be super extroverted and be very successful. And I think the key there is use your skills and strengths to achieve the same things. You don't have to be the amazing presenter on Steve Jobs type stage. You can do the same thing in a different way. And then the other point there is, again, coming back to you just need to be really excited and enjoy the work you're doing because that'll drive you forward and make you be successful. So I like that the story is a summary of so many of the things you've shared so far.

**Lenny Rachitsky** (01:00:21):
There's other two other fun stories, maybe pick one. The other one is you sold your startup to MySpace and your job was basically to save MySpace. And then the other is you're the reason Andreessen Horowitz missed out on Instagram and couldn't invest. So which of those would you want to share?

**Dalton Caldwell** (01:00:41):
Well, it's the same story. And the way that it's the same story is my second company... Basically, I sold my first company to MySpace. It was the music company that I worked on. And they recruited a new CEO who was formerly the COO of Facebook called Owen Van Natta. So again, hilariously part of the same little circle of people. And Owen was like, "Okay, we need to fix MySpace. Rupert Murdoch's got the juice. He wants me to fix it. We're going to do it. So come up with some ideas." And the best idea that I could come up with at the time was doing something around mobile photo sharing, something like Twitter, but for photos. And I figured with MySpace's user base, that would work pretty well. This was in 2010, so it was right as the App Store was getting big, and I had a lot of success in the App Store with imeem. It was one of the top downloaded music apps. And so I was like, "Wow, the App Store was really good." And I was really into apps being the thing.

**Dalton Caldwell** (01:01:40):
And at this time, Facebook was a little early on. They were trying to do cross-platform mobile apps, if you recall. And their apps were not great. This was, again, ancient history. So that was my plan. And then immediately Owen Van Natta was fired, and so I didn't even really get onboarded. And so I just left. I think I worked in MySpace for a month because the person that acquired my company got fired and I think the whole word chart got fired. I didn't even know who to talk to. It was really great. It was a great experience. You know what I'm saying? I wasn't really sure who my point of contact was at that point. I don't think they knew either. It was just a mess.

**Lenny Rachitsky** (01:02:16):
Just message Tom.

**Dalton Caldwell** (01:02:19):
No, no. He was long gone. Seriously. I know you're kidding. But no, literally, I don't know who was left at that point. Tom was long gone. And so I was like, "Well, I should just do a new startup and I should work on something like what I was thinking about." And I ended up starting the company and quickly was able to raise an angel around because people remembered my company from the first one. And the major investor we had was Andreessen Horowitz. This is one of their first board seat investments, like Marc Andreessen was on my board. And again, I have my own set of stories about that, but it was interesting experience and we launched it in... I think we got half a million or a million users. You can go find tech print articles about it. We launched on Android and iOS and it was mobile photo sharing, and actually it was growing pretty well. Okay?

**Dalton Caldwell** (01:03:11):
And then what happened is there was another portfolio company called Bourbon, which was originally a ForceWare clone that was built by these two guys. And they decided to pivot out of that and into what... Which was pretty similar to my thing. Again, fair enough, that's just how this works. And they did something smart. Again, this is just me talking, I don't know what their version of the story is. But what I think they did that was smart is if you looked on the paid app store charts, the number one app was Hipstamatic and Hipstamatic cost money. And what do we know about what people want? They want things that are free that cost money, right? And so they basically built a pretty legitimate knockoff of the Hipstamatic filters, combining it with a social graph, and they launched it and it pretty quickly took off. So of course this is Instagram, right? And so it took off really quickly and that was a wild experience for me to be like, "Oh, this seems familiar."

**Dalton Caldwell** (01:04:07):
And basically because Andreessen Horowitz had invested in my company, was on the board, even though they were investors in Instagram, that was a conflict and they didn't do the deal. And then for whatever reason, this became a big source of Silicon Valley gossip, which was like, "Wow, I can't believe this happened." And so it was just a really weird experience for me as a founder to be right in the middle of something that became culturally so important.

**Lenny Rachitsky** (01:04:37):
I imagine there's a bullseye in your back from a16z for a little bit.

**Dalton Caldwell** (01:04:42):
Oh, I don't actually think they care. I don't think they held it against me because what did I do wrong?

**Lenny Rachitsky** (01:04:50):
It's true.

**Dalton Caldwell** (01:04:50):
I started a company. You know what I'm saying? Obviously there was some frustration, but I was guy who had a company that they invested in. I don't know. I didn't feel didn't much higher for them. I think this is just how life works.

**Lenny Rachitsky** (01:05:06):
Yeah. I wonder if they changed their conflict policies after that at all.

**Dalton Caldwell** (01:05:10):
I don't think so. I think this has happened multiple other times, but those aren't my stories to tell.

**Lenny Rachitsky** (01:05:17):
And by the way, I don't know if you mentioned the name of your startup, it was called PicPlz, right?

**Dalton Caldwell** (01:05:21):
Yeah, it's called PicPlz. Yeah.

**Lenny Rachitsky** (01:05:21):
Great. Okay. So for the final phase before we get to very exciting lighting round, I have these two segments, recurring segments. I have failure corner and contrarian corner. We can do both or we can pick one or the other. Failure corner, share a story of a time in your career where you failed and when you learned from that experience. Contrarian corner, what's something you believe that most other people don't believe?

**Dalton Caldwell** (01:05:45):
Yeah, I think for contrarian corner, I know where I would start and I think it's relevant for your listener. I think this is relevant to this and you could argue this isn't contrary, but here's what I think. I think growth and growth hacking and doing all this analytics, A/B testing stuff, is a total waste of time for very early startups. And that one of the weird things about having lots of startup advice on the internet, again, this is one of the reasons we started making videos at YC, is a lot of the advice was catered towards later stage companies. Like, "Oh, here's how you set up your board and here's how you motivate your sales team." It was all aimed at series A, series B founders, and not for seed stage founders. The problem was seed stage founders would consume all the later stage advice and get really confused.

**Dalton Caldwell** (01:06:35):
And so the anti-pattern I see is there are lots of founders that are very familiar with your awesome work, which again, I really recommend, I like it. But when you have no customers and you're reading Lenny's guides on how to set up split testing and how you did growth at Airbnb, oh man, that is so dumb. That is so not helpful. And so you see this inclination away from getting a first customer, getting one customer and talking to that person, and instead they have all this really complex growth hacking theory. I think this also happens if you worked in big tech where your product already has scale. And so if you work at Facebook and your job is to launch new little features, yeah, of course you should make heavy use of analytics and A/B testing and split testing and feature flags. Yeah, yeah, yeah, makes sense. But when you have no users, what are you doing? So do you think that's contrary? What do you think? I'm just trying to argue this advice applied to a startup that's too early is actively not helpful.

**Lenny Rachitsky** (01:07:38):
I think it's contrarian for many people. 100%. I also 100% agree with it. It makes me feel like I need to, at the top of my post, share here's who this is for. If you're earlier than this, ignore it. If you're later than this, ignore it.

**Dalton Caldwell** (01:07:49):
I mean, again, I'm not saying you do anything wrong, but imagine if the OG Airbnb founders took all of your current advice and applied it when they had four users and they knew their names and they were trying to run complicated growth hacking split testings.

**Lenny Rachitsky** (01:08:03):
Yeah. Maybe just to clarify when you talk about growth hacking. So obviously when you're starting something, say a consumer app, you need to get a bunch of users somehow. What's your sense of just when you say don't do this sort of thing, but this is okay? What falls in those buckets?

**Dalton Caldwell** (01:08:20):
I think it depends on the idea. I think in the case of Whatnot, it was consumer app and they needed to get users. But they were very intellectually honest on the metrics for how you get a marketplace off the ground. And they didn't just go dump all their money into Instagram ads. They effectively knew they needed to focus on buyers and on the buy side and build momentum on the buy side. They really understood marketplaces. And so for consumer, I think it's having a sophisticated view of how you get the consumer company off the ground. I think if you look at the Facebook story, them getting a hundred percent penetration on the Harvard campus first instead of launching overall. Again, good strategy, would recommend that strategy. So again, the way to extrapolate that is know what your comps are of what companies you... Or type is, and then look at what they did on the zero to one and ignore what they do today. Right?

**Dalton Caldwell** (01:09:20):
Don't pay attention to what Facebook does today if you're a brand new startup founder, pay attention to Facebook when they were getting their first thousand users. What were those tactics?

**Lenny Rachitsky** (01:09:28):
I feel like this should be its own episode where we just go into how to get your first thousand users. I know there's a video actually we'll link to that Gustav made with YC's advice on how to get your users. Did you want to visit failure corner or not? Or shall we move on?

**Dalton Caldwell** (01:09:43):
I failed at tons of stuff. As an investor, I make lots of bad investments as well as good ones. I think in my startups I pivoted a lot and a lot of things I did didn't work out. And so again, I just gave you a specific story with PicPlz, right? You just heard a specific story there. I guess what I learned is that you just can't let it get to you too much and you got to keep going. And that if you keep going, no one really remembers those as much and it doesn't really define you. Fear of failure shouldn't dominate all of your thoughts. And instead you should use your energy and positivity to keep trying to do good work, right? Because back in the day, if I would've been like, "Well, I guess startups aren't for me, I guess tech isn't for me." I wouldn't have had a career doing any of this stuff. I wouldn't be working at YC, I wouldn't be advising companies, right?

**Dalton Caldwell** (01:10:36):
So I always had to have in my life a lot of optimism and energy and use that energy and motor to keep me going. And it served me really well, right? Even if lots of stuff I tried didn't work and continue to not work. Again, obvious stuff I know, but yeah, that doesn't mean it's not true, even though it's obvious.

**Lenny Rachitsky** (01:10:58):
I feel like that's a recurring theme here and I love that it's another version of just how not to die. There's the startup itself that shouldn't die, and then there's your just drive and motivation to keep going and try new things when things don't work out. I love all the recurring themes and messages for people here. Dalton, is there anything else you want to leave listeners with before we get to a very exciting lightning round?

**Dalton Caldwell** (01:11:20):
Yeah, I guess the final thought is if someone wants to do a startup and doesn't know where to start, just to give you permission to talk to potential customers and try to pre-sell something before you write code and have those conversations. I think so many folks don't know where to begin on starting a startup, and my tactical advice is start doing customer validation first versus building a PowerPoint deck, versus trying to raise money versus all these other things. I think a lot of people don't use that strategy, and basically if you find people that are really excited and you do line up customers, that is a great green light that it is time to do a startup, right? That can get you down the path. So yeah, I think that's my final advice.

**Lenny Rachitsky** (01:12:09):
And then with that, when does the building come in? Is it build it while you're talking, build it before you... It depends on basically-

**Dalton Caldwell** (01:12:15):
Build it once you have some conviction and then you're like, "Oh, I think I would have a customer. I think that at least one person would use this thing I want to build. At least one."

**Lenny Rachitsky** (01:12:23):
I love it. I love the simplicity and pragmatism of all of your advice. Dalton, welcome to the very exciting lightning round. I've got six questions for you. Are you ready?

**Dalton Caldwell** (01:12:33):
Let's do it.

**Lenny Rachitsky** (01:12:34):
What are two or three books that you recommend most to other people?

**Dalton Caldwell** (01:12:38):
I think a lot of founders are afraid of doing sales and they don't know how to do sales, and they think they need these really experienced sales coaches and they need all this training, and I'll be like, "Well, go on to Amazon and find the most popular sales books like Getting to Yes that everyone reads, and just read those and that'll get you 80% of the way there." You know what I'm saying? They want to hire someone for millions of dollars to give them sales coaching. I'm like, "Well, have you read these really basic sales books?" And they're like, "No." And so I think that's a low cost way to go on Amazon, Getting to Yes and a few other of the top sellers, I forget the names, and just read those, and that is your crash course on how to be great at sales.

**Lenny Rachitsky** (01:13:16):
Awesome. There's also this book called Founding Sales that I imagine you're familiar with. Pete Kazanjy was on the podcast talking about that and that's something I always recommend because it's just like, "How founders can do sales."

**Dalton Caldwell** (01:13:26):
Start there.

**Lenny Rachitsky** (01:13:26):
Start there. Great. We'll link to that. Do you have a favorite recent movie or TV show that you really enjoyed?

**Dalton Caldwell** (01:13:33):
This may be warping what you're asking for, but I like to watch old shows a lot, and so I keep rewatching The Sopranos and the Wire, and it always is different to me every time and things like that. I think here's a silly answer. I've been really enjoying watching old episodes of Columbo, which was a television show from the '70s and '80s. I don't know why, I don't even know if this is destructive, but for some reason, I'm really into that right now. It's very old episodes of Columbo.

**Lenny Rachitsky** (01:13:59):
You're an old soul, Dalton.

**Dalton Caldwell** (01:14:01):
I guess. I don't know. It just feels like a time machine to a different time when I watch these things.

**Lenny Rachitsky** (01:14:06):
Definitely, maybe one of the most unique answers yet.

**Dalton Caldwell** (01:14:10):
Fair enough.

**Lenny Rachitsky** (01:14:11):
Columbo.

**Dalton Caldwell** (01:14:12):
Well, again, I guess I'm not trying to give you an answer where I sound super clever-

**Lenny Rachitsky** (01:14:15):
No, I love this.

**Dalton Caldwell** (01:14:16):
I'm telling you the real answer. So that's actually what I'm watching.

**Lenny Rachitsky** (01:14:19):
It does actually sound very sophisticated and clever. Do you have a favorite interview question that you like to ask, I guess founders in this context?

**Dalton Caldwell** (01:14:28):
I don't really believe in trick questions, and I think I just start with, "Hey, so tell me about what you're working on." Or, "What have you learned since you started?" Again, none of these are trick questions, but I think you can get the most honest and interesting answers by asking the most straightforward basic things and having that be a blank slate for their answers to draw on. You know what I'm saying? So I like the most simple prompts and let them take the conversation where they want to go.

**Lenny Rachitsky** (01:14:56):
I know this probably is a very big question, but just what do you look for in their answer that gives you a sense of this is a good or bad answer?

**Dalton Caldwell** (01:15:05):
For YC interviews?

**Lenny Rachitsky** (01:15:05):
Yeah. And I know this is its own podcast episode.

**Dalton Caldwell** (01:15:08):
I think evidence that they actually have thought about it. As per I said earlier, that they've done research, that they have opinions, that they care about it. Right? Sometimes when people answer questions, you can just tell that it's really superficial, and they haven't put much care or soul into their answers.

**Lenny Rachitsky** (01:15:31):
Awesome. Do you have a favorite product that you've recently discovered that you really like?

**Dalton Caldwell** (01:15:35):
I like my Oura ring and my Apple Watch and all that good stuff. I've been a fan. There's a YC clinic called SiPhox, S-I-P-H-O-X, I just sign up for, and they do at-home blood testing. And basically I'm trying to sync that at-home blood testing thing into all my other devices. I don't know. I really enjoy all the stuff that Apple and other startups are working on and YC companies are working on around personal health. And so yeah, those are products I'm into.

**Lenny Rachitsky** (01:16:05):
SiPhox. Okay. And wait, then you do a needle and stuff and you take your own blood?

**Dalton Caldwell** (01:16:09):
It's this little tiny needle. It doesn't hurt at all. It takes a few drops of blood and you do it at home and you mail it in and then it has all these blood tests. It's actually really cool. Yeah. It was one of those cases where I saw it and then I later was like, "Oh, wait, that's a YC company." Basically, I became a customer and was pleasantly surprised that it's a YC company.

**Lenny Rachitsky** (01:16:35):
And I think I found it. So it's S-I-P-H-O-X health dot com.

**Dalton Caldwell** (01:16:38):
Yeah, it really rolls off the tongue, right? Yeah, that's the name of it.

**Lenny Rachitsky** (01:16:41):
Very cool. Okay, I see the little needle. Okay, great. Go SiPhox. Okay, two more questions. Do you have a favorite life motto that you often come back to, find useful in work or in life, share with friends?

**Dalton Caldwell** (01:16:55):
Just check in with yourself that you're having fun and that you enjoy what you're doing. And if you don't, you should probably make a change, whatever that is. And again, if you're a founder, you're in control, right? You can change your own company. But I think a lot of people go through life and they don't ask themselves this question, am I having fun? Am I enjoying? Do I value what I'm spending my time on? And I think that you just can go back to this over and over and over again as a good prompt on how to decide what to do with your life.

**Lenny Rachitsky** (01:17:29):
Easier said than done to change that in many cases, but it always starts with realizing, okay, this isn't actually what I-

**Dalton Caldwell** (01:17:35):
Yeah, and bidding to yourself. Yeah, I'm not really enjoying this, and then trying to be like, "Well, how can I fix it?" Having that conversation with yourself.

**Lenny Rachitsky** (01:17:42):
Yeah. It reminds me of a Steve Jobs quote where you wake up day after day, it's okay to wake up some days being like, "I don't want to be doing this." But if it's every day and continues to happen, then that's a sign you should change it.

**Dalton Caldwell** (01:17:53):
Exactly.

**Lenny Rachitsky** (01:17:54):
Final question. You and Michael Seibel have been doing this incredible podcast together. If somebody wanted to check out the podcast and dive in, is there an episode that you love most that you think they could start with?

**Dalton Caldwell** (01:18:05):
It depends. Some of the episodes are more for folks that already have a startup and they're dealing with problems. I don't know. Some of the episodes about investors or things like that. It's very clear that the audience for those is current startup founders. And there's a lot that are just more life advice, how to make decisions and think about. And those have strangely become very popular and gotten a lot of views with non-startup founders, which is a pleasant surprise. And so I'd recommend those for folks in the audience that are not currently startup founders. I don't know. Life tips from top founders, I think is a good-

**Lenny Rachitsky** (01:18:41):
Oh, from billionaires? Is it that one?

**Dalton Caldwell** (01:18:43):
Yeah, yeah. I think that was pretty popular. So what I'd be looking for is diagnose, am I a current founder and I have founder problems? Or am I just looking for general philosophy type questions? And I really like those philosophy ones. We have one for high school students, the audience is, here's advice for high school students that are interested in startups. Here's some tips that you should be thinking about. Again, pretty narrow target audience, but I love that episode because we're really trying to speak directly to that audience and I think it's pretty good advice.

**Lenny Rachitsky** (01:19:13):
Dalton, you are wonderful. Thank you for sharing so much wisdom. This is action packed. I'm really excited for founders to listen to this. I think it's going to make a big dent in a lot of people's lives. Two final questions. Where can folks find you online if they want to reach out and follow up on some of this? And how can listeners be useful to you?

**Dalton Caldwell** (01:19:27):
I am on Twitter/X.com and Dalton.C is my username. And also my LinkedIn is pretty good. It's pretty popular. I don't know. Just search for my name on LinkedIn. And yeah, I'd love to see you all there. And then how can folks be helpful? I mean, honestly, it's just great when folks want to apply to YC and do a startup. And so feel free to dive into other videos and apply to YC. And something that's really special about my job is I get the privilege of getting to fund companies that they already know me from videos and they're shocked that I'm exactly the same as... Effectively, they're like, "Wow, you're just that guy from the videos I've been watching, and it's so cool that you're just exactly like you seem in the videos." And so basically, yeah, if people like what I have to say and they like the videos and apply to YC, I would love to fund their companies.

**Lenny Rachitsky** (01:20:21):
Dalton, thank you so much for being here.

**Dalton Caldwell** (01:20:24):
Sure thing. Thanks so much, Lenny. Appreciate it.

**Lenny Rachitsky** (01:20:26):
Bye everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at Lennyspodcast.com. See you in the next episode.

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## [5/21] Vision, conviction, and hype: How to build 0 to 1 inside a company | Mihika Kapoor (Product at Figma)

**Lenny Rachitsky** (00:00:00):
I asked on Twitter, "Who's the best product manager you've worked with?" You were the most mentioned.

**Mihika Kapoor** (00:00:04):
My take is that your scope is the world. Nothing should ever perceive as being out of bounds.

**Lenny Rachitsky** (00:00:10):
VP of product at Figma told me, "Mahika is really great at creating a vision and getting people to see what she sees."

**Mihika Kapoor** (00:00:16):
We lean heavily into designing and prototyping even before a project gets a green light. If you and your team do your job correctly, what does the world look like?

**Lenny Rachitsky** (00:00:26):
Say somebody wants to make their culture more entrepreneurial, what does it take?

**Mihika Kapoor** (00:00:31):
We have this concept called Maker Week, which is our internal hackathon, giving people the breathing space to see ahead into the horizon and be wildly ambitious.

**Lenny Rachitsky** (00:00:43):
Today, my guest is Mahika Kapoor. Mahika is a design engineering PM hybrid at Figma, where she was an early PM on FigJam, and is now spearheading development of a new product that the company's going to launch in June. She's known as the go-to person at Figma for leading new zero-to-one products. And as you'll hear in our conversation, is beloved by everybody that works with her. Prior to Figma, Mahika founded Design Nation, a national nonprofit that democratizes undergraduate student access to a design education, and led several products and launches at Meta, focused on commerce and creators.

**Lenny Rachitsky** (00:01:16):
On this podcast, I bring on a lot of amazing senior product leaders, but there's so much we can learn from stellar on-the-ground product managers like Mahika. In our conversation, we drill into many of the skills that Mahika has cultivated that have contributed to her success, including how to develop a compelling vision, get buy-in for your ideas, how to develop conviction, empathy, the importance of culture, and how to create a culture on your team and within the company, and also how to deal with the constant change that happens within successful organizations.

**Lenny Rachitsky** (00:01:47):
**Lenny Rachitsky** (00:02:29):
**Lenny Rachitsky** (00:03:33):
**Lenny Rachitsky** (00:04:29):
Mahika, thank you so much for being here and welcome to the podcast.

**Mihika Kapoor** (00:04:33):
Thank you for having me, Lenny. I am a huge fan of the podcast and really excited to be chatting today.

**Lenny Rachitsky** (00:04:39):
Just to set expectations, this is going to be a Mahika love-fest podcast. And what I want to try to do with our time here is have an archeology of Mahika to understand what you've learned about product and building product, in particular because you are thriving at Figma, which is one of the most interesting and successful tech companies in the world with one of the best product teams in the world. So, basically, I just want to learn as much as I can from what you've learned and what you've done in order to create more Mahikas in the world. That's kind of my goal here because I feel like that would [inaudible 00:05:11].

**Mihika Kapoor** (00:05:11):
Mildly frightening.

**Lenny Rachitsky** (00:05:14):
In a very cool way, not in a creepy way. So, what I did to prep for this conversation is I, as I said, reached out to a bunch of your colleagues at Figma to ask what you're especially strong at. And what I want to do is kind of go through some of these key skills, and they're essentially the core attributes of great product managers and learn from you, learn from what you learned about how doing these things well, and just what you do to be successful at these things. How does that sound?

**Mihika Kapoor** (00:05:40):
That sounds good. One thing to call out is that I think when I think about my own PM style, it's definitely not a tick-all-the-boxes style. There are plenty of things that I'm very bad at that PMs are traditionally supposed to be great at, so happy to chat about what makes sense.

**Lenny Rachitsky** (00:05:59):
Okay, that's actually really cool. So, let's save that for the end, the things you think you're bad at. The way I see this is a reverse performance review. Here's all the things you're amazing at, let's just go spend all our time on that. But I think that's going to be really important. But just along those lines, what I'm hearing is there's a sense of do the things you are good at really well. This is a trend on the podcast, is lean into your strengths. Is that the way you see it? Do you have thoughts along those lines of just the fact that you've been successful, knowing you have these things you're not amazing at? Then we'll talk.

**Mihika Kapoor** (00:06:27):
It's important to have two things. One is of course lean into your strengths. I think that PMing is traditionally a sort of generalist role and people fall into it in a number of ways. But most often than not, I hear people fall into it by trying a bunch of other things and then realizing that, "Oh, hey, maybe this PM thing makes more sense for me." So, for me personally, it was I have always been a very left brain, right brain kind of a person. I majored in CS and minored in visual arts. And when I worked as a software engineer, I really missed the design side, and when I worked as a designer, I missed the technical. And moving into product was a really great way to kind of straddle both and have more touch points across the product development cycle. And so, I think that based on how you fell into it, you might have different spikes and different strengths and leaning into those is really important. But for the other things, it's also of course important to have a growth mindset and to constantly be conquering what comes next.

**Lenny Rachitsky** (00:07:32):
Okay, cool. Okay, so I'll save the stuff you think you're bad at for later. Let's start with the stuff you're basic at. Okay. So, the first is vision. So, Sho Kuwamoto, VP of product at Figma told me that, "Mahika is really great at creating a vision and getting people to see what she sees. She's working on a new project now and put together one of the best pitches I've ever seen internally at what it could become, why it'd be differentiated, et cetera. And like every new project, this had up and downs, but she's incredibly driven to keep the flame alive throughout these ups and downs." Can you just talk about what you've learned about doing this well, creating a compelling vision, getting people excited, getting buy-in for big ideas?

**Mihika Kapoor** (00:08:12):
Yeah, absolutely. So, my take is that vision is everything. It is really important to create a vision that you believe in, that your team believes in and that your company believes in. Because the reality of the product development cycle is that it's so messy, it's so chaotic. You're going to have extreme highs and extreme lows. You're going to march in a certain direction only to hear from your users that it might just be the wrong direction, and totally pivot. And in order to ensure that moments that are not discouraging, but rather, learning opportunities for your team team, it's so important to be anchored on that singular vision because then any step along the way feels like forward progress.

**Mihika Kapoor** (00:09:03):
So, first, just want to underscore the importance of having that vision and that perspective on if you and your team do your job correctly what does the world look like? In terms of crafting a compelling vision, I think that there's sort of a few aspects. The first is that you cannot go into a vacuum and come out with a compelling vision that does not exist. You have to be fundamentally inseparable from your users, and also, fundamentally inseparable from your team. And so, I think that there is sort of this important cross-pollination of functions that is really important in crafting a compelling vision. You want to always ensure that there are research insights that help you feel what a user is feeling. You want to ensure that there are beautiful designs and prototypes that help communicate what this future world looks like, and you also want to root it in engineering and feasibility. And you want to be constantly, even in the vision phase, assuring that what you're marching after is something that is achievable and something that you can work towards.

**Mihika Kapoor** (00:10:21):
And so, I think a lot of folks when they think about visioning, they kind of think about, "Okay, how do we start from scratch and learn about the user and then translate that into designs and then translate that into engineering?" And it becomes this very almost linear process. And I think that to the extent that you can have this cross-pollination of ideas and people working together, that leads to a really strong vision. And there's this book that I love called The Medici Effect, which basically talks about how when people come from different places and you have that confluence of ideas, that leads to innovation at the end of the day.

**Mihika Kapoor** (00:10:56):
The second piece is, okay, once you have your vision, once you have talked to your users and built up your perspective and things like that, it's like how do you communicate it internally and how do you help everyone around you see what you're seeing? And I think something that's really unique about Figma is that it is a fundamentally very, very detail-oriented culture. And it's also a company that very much practices what it preaches in terms of the future being visual communication. And so, I've found that words will only get you so far. So, when I put together a vision with my team at Figma, it's all about not just your traditional, "Okay, here are pain points. And then, here are solutions. And then, here is the timeline and costing." But rather how can you bring all of those things together and how can a vision pitch effectively be pain point, solution, proof point, pain point solution proof point?

**Mihika Kapoor** (00:11:58):
Because at the end of the day, simply describing a product idea in words is not as compelling as seeing a testimonial from a user on top of a prototype or a mock, and really feeling the pain points.

**Lenny Rachitsky** (00:12:12):
Is there an example that we could talk about? I know you can't talk about the product you're working on yet, but from the past of a vision that you crafted maybe to share what the vision was or how you came to that to make this even more real?

**Mihika Kapoor** (00:12:24):
So, before I was working on the new product, I was working on the FigJam team, and I was an early member of the FigJam team. And whiteboarding was something that really took off during the pandemic because it was the first time that people were not together in office, couldn't jam together, couldn't just throw up a whiteboard behind them physically. And so, there was kind of this question of, okay, how do you combat these disparate teammates and pull them together into a common space? And I think that when we think about FigJam and what success might look like for FigJam, a part of it that I was really invested in was the meetings experience. And specifically, what the world would look like if we were successful at bringing people together into a common space?

**Mihika Kapoor** (00:13:23):
And one of the early insights was, okay, what is the most common meeting that takes place in a FigJam file? It's a brainstorm, right? It's like you have a bunch of people, you've coming together and they're dropping a bunch of stickies and stuff like that. And so, you have this proof point of an activity that works really well inside of a FigJam file. But then, at the same time, something that's really interesting about FigJam, people often ask, "Oh, you guys are Figma. How do you guys use Figma as a company?" And it's kind of interesting because I feel like we use Figma the way that everyone uses Figma, but we use FigJam on steroids. Every single activity in this company is done in FigJam. Our product reviews are in there, our Gantt charts are in there, our bug bashes are in there. Every single thing is in FigJam.

**Mihika Kapoor** (00:14:10):
And there was this gap between the way that we were using FigJam as a company and the way that the rest of the world was using it, but brainstorms were working. And so, you kind of think, "Okay, what's unique about a brainstorm?" And you talk to your users and you're like, "Why does a brainstorm make so much more sense in a FigJam file than anything else?" And what it comes down to is brainstorms are this incredibly democratizing process. It's this process where ideas can come from anywhere, where it's not the loudest or the most important person in the room who's doing the talking, but it's everyone altogether. And you're able to elicit reactions from people who are more quiet in a meeting or people who may prefer to ideate on their own before coming out to everyone and things like that.

**Mihika Kapoor** (00:14:53):
And so, we started with the seed of brainstorms being this highly democratic process. And what you see is that in most other scenarios, meetings are very one way. You have one person talking, and everyone else reacting. This is true of a team kickoff. This is true of an all-hands. This is true of basically every sort of scenario. And so, what we fundamentally started marching towards was how can we create this world where the generative nature of a brainstorm is basically the norm in other kinds of meetings. Where a team kickoff is not just a PM and a designer handing mocks to an engineer, but it's everyone leaving stickies and everyone commenting at the same time, or everyone leaving...

**Mihika Kapoor** (00:15:44):
We have this ritual called Kudos Boards inside of FigJam, where everyone will shower each other with love and just kind call out their teammates for what they've done over the last week or so. And so how can we ensure that those kind of rituals are in our templates and that we're teaching people how to take any meeting and make it more democratic? And then, you anchor on this vision around, okay, what does a more democratic workplace look like and how can we get people to anchor around that and how can we get people to get into the flow? So, then we started launching features like music, like voting, that really help you get into flow when you're in that pile together.

**Lenny Rachitsky** (00:16:22):
That is such a cool example. I'm trying to be this archeologist studying what you're describing and breaking it apart. So, what I'm hearing essentially is there's this insight that you find of, "Oh, here's a way we should think about the way future of work. It should be more democratic," building on this idea of brainstorming, which is one of the most inspiring ways of working where it's not just someone sitting in a silo. And then, you take that and create kind of a, "Here's what the world could look like if we could make everything this feel this way, very democratic." And then there's this pitch that you eventually make of, "Here's the product." And you talked about how the way you pitch it is, "Here's a pain, here's a solution, and here's a proof point of that solution," could be a testimonial or some data, I imagine.

**Mihika Kapoor** (00:17:06):
Definitely. I think that when you're actually presenting a vision, one of the most important things is that there is a single artifact that the team is creating together. So, I think a common occurrence is to have the research readout, followed by the design crit, followed by the product review. And that's fine, that works in a lot of instances, but then you have every team member thinking that their own deliverable is what they need to pour all their energy into. And what you actually want is for everyone to feel incredible ownership and incredible passion about this combined deliverable, so that it's a unified team who believes a singular set of insights.

**Lenny Rachitsky** (00:17:52):
So, what's an example of that? Is it like a deck in Figma?

**Mihika Kapoor** (00:17:54):
Yeah, exactly. So, we often make our decks in Figma, and I think that we lean heavily into designing and prototyping even before a project gets a green light. So, I think that's something that's really unique about Figma is normally you will talk about the market space or the opportunity of the sizing, and then decide to invest. Versus Figma is very much a see to believe and see to feel that emotional pull towards this is something worth investing in.

**Lenny Rachitsky** (00:18:25):
Got it. So, that's what I was trying to get to is how do you actually deliver a vision? So, a lot of people, " Here, I need to create a vision. I'm going to write out a paragraph or a memo describing it." You can create mock-ups. The way you're describing it, essentially, is make it as real as possible, not just mocks, but actual prototypes potentially. Many people don't have design skills or designers on their team or engineering skills to build a prototype. Is there anything you can share for how to do this where you don't have those skills?

**Mihika Kapoor** (00:18:54):
Yeah. Well, the good thing is that with AI, it's getting way easier. So-

**Lenny Rachitsky** (00:18:59):
True.

**Mihika Kapoor** (00:19:00):
A couple of weeks ago, Cognition launched, which for those who don't know, is a startup that made this AI agent called Devin, which can code anything for you, supposedly. It definitely took Twitter by storm and got me super stoked. And so, I think something that's interesting about the current AI revolution is that it's very much lowering the floor to starting out and to building something. And so, recently, I was doing a chat with David Huang from Replit, and he's the head of marketing and design at Replit. And he was basically talking about how if Replit does their job right, you start seeing it as your technical co-founder. And I think, conversely at Figma we kind of think about if we're doing our job, maybe in the future people will think about Figma as their designer co-founder, where you can go in and use it to start bringing things into existence.

**Mihika Kapoor** (00:20:03):
So, I think one is, yeah, I do think that we're just trending in a direction, and this was not true a year ago, where the floor to building something is just so much lower. So, that's one piece. I think the second piece is just go around and ask people. And so, for example, for the project that I'm currently working on, I used a hackathon to pitch it. And basically, I built conviction in the idea many months before the hackathon, and I was verbally pitching it. And it was kind of like, "Oh yeah, maybe at some point in the future we would make an investment like this."

**Mihika Kapoor** (00:20:43):
But what actually ended up happening was we have this concept called Maker Week, which is our internal hackathon, where the entire company goes on pause for a week. And I think that most people think that, "Oh, hackathons are only a time for engineers to build." And I think that that's one of the biggest mistakes ever. I think that anyone can have an idea and can... Literally, what I did was walk around the New York office asking every single person, "Will you work on this thing with me?" And eventually, someone says yes, and then you can use that to build momentum, grow the team, and build something great. But I think that never letting your own skills stop you from going out there making a pitch and then turning that into reality is really important.

**Lenny Rachitsky** (00:21:27):
I love both of these points and pieces of advice. I feel like I always say that if a PM has a designer partner that can just help them with a deck or help them with ideas, that you're such a superpower, everything just looks so much more interesting when you have a designer helping you craft your idea. And the way you describe it is pretty simple. Just go ask people for help because you're probably going to find someone that's going to help you out.

**Lenny Rachitsky** (00:21:48):
You mentioned conviction, so that's a great segue to else where I wanted to go next. So, I asked Yuhki, chief product officer at Figma, about your strengths. And he told me that you get extremely strong conviction extremely quickly. He said that this strong conviction allows you to navigate the messy journey from zero to one and rally your team in a really powerful way. He actually wanted me to ask you this very question, how do you get to this strong conviction? And how much of it is to true deep conviction, versus there's an inkling of instinct that this is going to work and then you profit on the sense of conviction to get people rallying behind you and to kind of take this leap of faith?

**Mihika Kapoor** (00:22:31):
I think that one of the most important things for a PM to create for their team is momentum. You have to constantly be creating forward progress, probably towards that vision that we were just talking about. But I'm a huge proponent of Jeff Bezos's one-way doors, two-way doors framework. And I think that especially in a software company, most things are two-way doors. You can come back. And so, it's so important to have an opinion and use that opinion to anchor people around and have people react to. So, I used to work at Meta before I worked at Figma, and Meta basically distilled the product role into two core capabilities. One was product sense and one was execution. And when you think about product sense, it's like, okay, what is product sense? It's like a really abstract term. And at the end of the day, I think product sense is just having good intuition.

**Mihika Kapoor** (00:23:34):
And so, there's this question about, okay, how do you build up intuition? And I think that it's just by having this insatiable curiosity and talking to users at every chance you get. So, I would go to dinners and grill the people around me on how they use Figma and how they use FigJam. And I think when you have a conversation with someone, it's so much more powerful in terms of getting those anecdotes to stick in your head. And what actually happens is once you start having enough conversations, let's say you start with conversations ABC, then you progress to conversations DEF, over time you build this almost repository or library of conversations that you can draw from as you're making product decisions. And so, I think that that's a really powerful thing to lean into as you're thinking about, "Okay, which path do we go down?"

**Mihika Kapoor** (00:24:23):
Now, there's the question of in the absence of any external signal, what can you do? And I think that a very common thing, especially for PMs who are younger in their career, is to think that your opinion isn't right or might not be reflective of what the user thinks. So, you think, "Okay, I believe this," and at the end of the day, everyone has an opinion, right? So, "I think this, but what do I know compared to these people who've been in my company for 10 years?" Or, "What do I know compared to my users who are using the product?" And so, then I think what might happen in those instances is you kind of start from nothing, you start from zero and you're like, "Okay, I'm going to build up from zero and gather all of these insights to get to a good place."

**Mihika Kapoor** (00:25:11):
And I think my take is that putting out an idea, even if it's totally wrong, is a much better catalyst for getting to a good solution because people are much more likely to react to an idea than to nothing. So, if it's the right idea, then they'll be like, "Oh my God, yes, let's totally do that." And if it's wrong, then it's like, okay, then they will take you in a different direction and you end up with something that's probably much more opinionated than if you hadn't put anything out there. And so, it was funny, one piece of advice that I got from Yuhki when I was working on my vision sprint was like, "Okay, when you go into research, you want to go in with something that's at least an A- idea, or you think is at least an A- idea. Because if you talk to users and you learn something about it, that's awesome. Get to an A+. If not, at least you're not at a B." And so, I think that having-

**Mihika Kapoor** (00:26:03):
If not, at least you're not at a B. And so I think that having that early conviction, being willing to communicate it, being willing to get feedback from other folks in your team, have them react to it, then get users to react to it, is so important, but then also something that's equally important when you have "high conviction", quote, unquote, is to be willing to kill your darlings if you hear something that tells you otherwise. You need to be so sort of strong opinions weekly held. And if you get external signal that's telling you something different, you should be ready to pivot and have that agility to do so.

**Lenny Rachitsky** (00:26:37):
There's a lot of PMs that kind of worry about having too strong of an opinion and being like, "Here's what we're doing," because then there's this like, "Oh, okay, they just want us to do the thing they want us to do, and we don't have a voice. We don't have a chance to influence." It seems like you find a really magical balance of strong opinion of like, "Here's what we should be doing," but people still love working with you and don't feel like... I haven't heard like, "Oh, she just tells us what to bill." What advice do you have there of just finding that balance and making it clear? It's just my idea. We can change it.

**Mihika Kapoor** (00:27:07):
I would say that speaking about weaknesses, having such strong conviction absolutely has downsides. In particular, it's possible that it doesn't have the desired effect. So for example, my designer who I work with, his name is Kean, he's so talented. We work like this. Literally for most of last year, we had an hour long one- on-one every single day and still that wasn't enough-

**Lenny Rachitsky** (00:27:32):
Everyday?

**Mihika Kapoor** (00:27:32):
... meeting time. Yes. We basically work together like this, but he also told me that when I joined the company, he was like, "Who is this girl and why does she have so many opinions?" And so I think that something that I have learned to do over time, and I think that's something that's a good sort of thing to lean into if you are a PM who has strong opinions, is to be very direct about how much you care about your opinions. So now, I'll do this thing where I'll be like, "Oh, I think we should do this, but I feel like medium confidence on it." So if you feel stronger like, "I defer to you," and always being very, very, very explicit about like, "I feel really strongly about this," or, "This is my hypothesis," or, "I do not have an opinion here. I defer to you."

**Mihika Kapoor** (00:28:21):
I think the second thing that I would mention that is really important in order to do this correctly is... So I have a very direct communication style. I will never sugarcoat anything. I'll never say I like something if I don't like something. If I'm in a meeting and someone tells me they don't agree with me, I will tell them I don't agree with them back. In return, I really like it when people are very direct with me. And so I think that whenever I join a team or whenever I start working with a new person, I always let them know. I'm always like, :I am very direct and if you disagree with me, I want to know that."

**Mihika Kapoor** (00:28:55):
Because I think sometimes what can happen is really strongly minded PMs can go into a conversation and can be like, "Oh, I think we should do X," even though they actually feel medium confidence about X. And then the rest of the room is like, "Oh, my God. That PM feels so strongly about doing X that I'm not going to say anything because they clearly have so much conviction in X." And what you actually want is for everyone to feel comfortable speaking up. And so creating that culture where everyone feels comfortable giving their opinion and communicating their level of confidence is really important.

**Lenny Rachitsky** (00:29:27):
So this direct communication point you made, somebody shared this quote, Alice Ching, who I think your EM said this about you that she's in awe of how direct you are, especially how you can make it not personal and help people focus on the matter at hand. Any other advice you have there for people to, one, either be more direct and successful in that being directness? Or is there an example you can share where, because I think people hear this, they're like, "Oh yeah, I'm going to be direct. I'm going to be so direct, it's going to be great," and then it's so hard to actually do, so is there maybe an example that comes to mind of here's something you did recently of like, "Oh, wow. Okay, I see what she's talking about"?

**Mihika Kapoor** (00:30:07):
So I think that directness only works if it's two-way. If it is one person being really direct with another person and then the other person being afraid to talk, you will end up in probably a not great relationship where communication is only going one way and both people will be in their own head. The person being direct will be like, "Why is the other person not responding to my feedback?" And then the other person will be like, "Why am I the only one getting so much feedback?" Meta, where I used to work, had this phrase, "Feedback as a gift," and I so deeply believe in this. And in order to really lean into that phrase and really embody it, I think it's really important that feedback is this constantly flowing thing, not something that happens once or twice a year when you have an official feedback cycle.

**Mihika Kapoor** (00:30:57):
And the way that I try and create this culture of constant direct communication, constant feedback is if you have feedback to give someone else, I think you can start by asking, "Hey, do you have feedback from me?" And kind of taking the feedback first so then that person feels like, "Okay, maybe I have my way of seeing this situation. Let me communicate that and get off my chest." And then when you give your feedback, it's sort of even. And then feedback in my opinion is something that you should always act on. So then to the extent that you can as soon as possible put that into effect and be like, "Okay, I'm hearing this. I'm going to do XYZ in order to combat that." I think then that incentivizes the other person to do the same.

**Lenny Rachitsky** (00:31:43):
Okay, let me quickly summarize what we've gone through so far in our archaeological study, and then I'm going to drill into a specific trait. So one is just having a really powerful vision that people get really excited about. And the way you described it is kind of find an insight about how you think people could be, in this example, how people could be working maybe through this brainstorm approach and then kind of expanding that into something where this is what would happen if we achieve this in the future, and this is what the world could look like, and that's something people get really excited about.

**Lenny Rachitsky** (00:32:11):
So kind of creating compelling vision, being able to communicate it with, and in your experience, communicating with prototypes and mocks is the way that you find it to be most effective. Also, just getting to strong conviction, whether it's real or not, but it sounds like it's actually very genuine about an idea and making it clear. You're very excited about this and here's how it's going to be amazing for the business and the company, and here's why you should be excited about it. Also, you talked about being very direct and being very honest and basically radical candor as some people describe it. First of all, is there anything else I missed specifically before I drill into one of these?

**Mihika Kapoor** (00:32:47):
That sounds right.

**Lenny Rachitsky** (00:32:48):
Okay, cool. So kind of along these lines, something else that came up a bunch of in my emails with folks that you work with is how you build hype really effectively, and you talked about this a bit of just creating momentum about an idea. So you got this idea, get everyone pitch it, get everyone excited, and then it just continues to build hype and momentum. So a quote from Karl Jiang, who is on your team maybe, he said, "I feel no PM has ever got me so hyped about a feature." And Yuhki said that you overcome people's doubts by building hype and hacking hype is the way described it. Talk about this and why do you think it's important and how you actually go about doing this.

**Mihika Kapoor** (00:33:31):
When you are spearheading an idea or a product, it's really on you to have a pulse on how everyone else is feeling about that product. And different products need different levels of excitement to make it out the door. If there is something that leadership has really strong conviction in, it's important for leadership to amp the whole company up behind that vision. On the flip side, if you yourself are pushing a zero to one idea from the bottoms up, the onus is even more on you to make sure that that project and that product is constantly propped up and that people are excited about it to make it out the door. And so one example is we've been talking about this product that I'm working on. And coming out of winter break this year, there's this sense, or at least I always suspect, that there's this sense of over winter break, everyone forgets what happened last year. It goes at the door because you were hopefully doing something that took your mind off work.

**Mihika Kapoor** (00:34:43):
And so at the same time, there's this sense of how do you create forward momentum inside of a company in January when people are slowly coming back into office, everyone's trickling back in at different dates because everyone to click slightly different PTO, how do you rally people in a certain direction? And so we have this thing at Figma called SKO or Sales Kickoff, which is every year the sales team comes together, and we have a keynote and a set of fireside chats and stuff like that, and we talk about what's coming for the year. And at this point, our product, it existed, but it was absolutely barely built. It was rough around the edges. It had bugs every day. Maybe 10 people in the company were using it and something like that outside of the team.

**Mihika Kapoor** (00:35:37):
Yeah, it was so important to me that this product got visibility in this forum because this was the first company-wide forum of the year where we were declaring priorities for the year. And so it was so important to me that this product had some sort of a moment, or speaking of show, don't tell, a demo in the context of this keynote. And so Kris, our CTO and Yuhki, our CPO, were giving this keynote on what does our year look like? And I really, really deeply insisted that we should include a demo. And I think what ended up happening is something like that, a demo that wasn't meant to be a demo or that people weren't expecting does so much in terms of driving that sense of hype and helping people see what you yourself see in the future. And what's really interesting is I think that hype is something that... You can't really create hype for something you don't believe in my opinion. The only way to create hype is to get people to see what you see.

**Mihika Kapoor** (00:36:50):
And so I think that it's incredibly important to leverage very large forums like that Maker Week, like Sales Kickoff. We have CONFIG, which is our annual showcase to the world of what we're working on in order to get everyone to see what you're seeing and to be really scrappy about it and to really be the person who's pushing your product to its limits in the right moments. And I think what you find is that if you push your product to get visibility, maybe even beyond what the current stage of product development merits is that you have really incredible learnings because the more that you can put your product in front of people and get them to use it, the more signal you get on how it's trending. And so what ended up happening was something that could have originally been perceived as a distraction to the team actually ended up being something that added so much fuel to the fire in terms of, one, giving us product insights to inform our next steps. And two, getting the entire company to feel truly, deeply feel excited about getting this thing out the door.

**Lenny Rachitsky** (00:37:58):
And this pitch and product you're describing is the one that's going to be launching this mysterious new product, right?

**Mihika Kapoor** (00:38:03):
Yes.

**Lenny Rachitsky** (00:38:04):
I feel like we're going to build so much hype for this thing when it ever comes out. I'm so excited to learn what it is. Coming back to the point, so what I'm hearing essentially is you find it's important to take responsibility for this thing to become a thing at a company. A lot of people have an idea, they build a prototype, they build a hackathon project, and then they're like, "God, no one's ever doing anything with it. It's not going anywhere. Nothing ever happens." What I'm hearing is it's on you to get people excited about it and find these opportunities to get people excited about it. And there's also this, what I'm feeling is the feels is really important. It's like you have all the data probably. There's probably a logical case for this that you've made across the company, but what you're describing here is you need to get people hyped about it in a emotional, visceral way and basically find opportunities to do that is kind of a lesson here.

**Mihika Kapoor** (00:38:52):
In my mind, there is internal hype, which is how do you get buy-in and everyone inside of the company to be fanging their fist on the table for a product to get built, but there's also external hype, which is like how do you get your users hyped about your product? How do you get them to really be so stoked when there are milestone occasions for your product or milestone launches and for them to be celebrating with you? And one of the things that I loved the most when I joined the company was Figma and design Twitter have had this very symbiotic relationship where each has grown with the other over time. And what really happens is anytime we launch something, you have all of design Twitter celebrating with us.

**Mihika Kapoor** (00:39:38):
And one other moment when I thought it was very fun to drive hype was when I worked on FigJam in 2022. It was the one year FigJam anniversary in April, and project anniversaries or product anniversaries are quite an exciting milestone within the company. You bring everyone together, maybe you pop a bottle of champagne, you kind of celebrate how far you've come and what all you've learned since the launch. But we were really thinking like, "Okay, FigJam is awesome, but FigJam isn't just any product. Figjam has a personality. FigJam is cheeky. FigJam is fun. FigJam has this cute skeuomorphism going on where you feel like it's your friend. And so okay, how would you celebrate that moment for a friend?" You wouldn't really have an anniversary party. You would throw it a full on birthday party.

**Mihika Kapoor** (00:40:34):
And so what we basically did was at the one year anniversary of FigJam, I worked with the marketing team and our engineering team in order to basically kick off a mini launch inside of the product of a bunch of new features. And what we did was we Easter egged them through the product and each sort of product that we were releasing inside of FigJam was hidden under this little birthday present. And throughout the day, we sent all of our users on an Easter egg hunt of presents inside of FigJam. And so not only was a FigJam getting the presents, but it was our users getting the presents. I think that hype as well is really tied to emotion. So to the extent that a person using a product can feel like, "Oh, this thing that is built in the product was built for me not to advance the company's goals or anything like that, but to make me feel special, to make me feel happy."

**Mihika Kapoor** (00:41:34):
I think that's a really key instrument in driving hype as well. And I think that something that's quite interesting about hype and getting your users to feel strongly about your product is that every product has their own brand of delight or excitement or energy. So hype for FigJam is incredibly different than hype from Figma, where hype for Figma might be this really, really niche design capability that unlocks this pain point that designers have been having for years and years. And then hype for Apple might be like the world's best unboxing experience or something like that. And so leaning into a product's brand in order to figure out what is the optimal way to generate hype with your audience and form that connection is something that's really important.

**Lenny Rachitsky** (00:42:19):
I love that example. Something else I'm finding as a thread throughout all of the lessons and stories he shares is just an immersion in your user base and truly knowing what they're excited about, what problems they have, and you talk about having strong conviction and painting a grand vision. It's one thing if someone that doesn't do that does that, it's just like, why would I believe them? Versus someone that like you, where you're just constantly talking to users and actually understand what they need. So I guess the question here is just what advice would you share with folks to build that, to be immersed with users? What do you actually do? How do you actually do that? Are you just organizing meetings, events? Are you scheduling chats? How do you do this?

**Mihika Kapoor** (00:43:03):
Yeah, so I think it honestly depends on the product. So when I worked at Meta, it was so easy. Everyone and their mom had opinion about the product, which was really great because it meant that anyone you met, you could kind of ask them what they liked, what they didn't like. You can relay that through the company, et cetera. Now at Figma, we have a slightly more niche audience. I think that hopefully, ultimately we get to everyone. We started with design teams, now we're thinking about the entire product development cycle and how we can build for that, and then who knows, beyond that could be anything. But I think that constantly immersing yourself in those circles where your users are is really important. So for me, it's like anytime that I'm catching up with a friend, who mildly works in tech or a tech adjacent field, I will generally be asking them about Figma. And I think what's really great is that as a company scales over time, their user base gets broader and broader. And so when we grew from a single product company with Figma into now a multi product company with FigJam, dev mode, etc, our audience exploded. And we already saw latent behavior inside of Figma, but now it's even more clear how wide reaching the product is. And so something that I find incredibly useful is to not just ask users of your product what they think about your product, but to ask non-users about your product, why they're not using your product. And actually I think that those are the most insightful conversations because I think that having a product shine and having a product do well and have great adoption isn't just about the product being great. It's also about the marketing and the perceptions that surround the product and potentially the hype that surrounds that, right?

**Mihika Kapoor** (00:45:01):
And so having those conversations about... I remember having an early conversation with folks from my previous team about, "Hey, are you guys using FigJam?" And they would be like, "Maybe sometimes." And I'd be like, "Well, why aren't you using FigJam? It's literally built for you." And then that led to a series of product insights that led us to invest in a set of features that would make it much easier for a non-designer to get started out on the canvas. So we launched this kind of placeholder experience that rather than traditional templates, really let people see the various use cases and preview the various use cases on the canvas. And so that was incredibly important. And then Figma, of course, is kind of like it's in this pro-sumer space where it's like you talk to anyone in tech and maybe they're your top total addressable market.

**Mihika Kapoor** (00:45:48):
But then there are some products I know that people work on which are very removed from the average person, you have infra products, security products and things like that, where you can't just walk up to someone and have a conversation with them about why aren't they using your product because that conversation might not make any sense. And so in those instances, I think that what's really important is it depends on the stage of company that you're at. If you're at an early stage company, you need to be the one going out there and having conversations with your users and just literally looking up your users through whatever channels necessary and figuring out how you can connect with them. I think this is also why founder market fit at startups is so important is because to the extent that you can use yourself as a limits test for what user needs there are, that helps you move really fast in the product development cycle.

**Mihika Kapoor** (00:46:40):
And then if you're on the larger side, I think that having a really tight relationship with your sales team is really important. And basically, just being on sales calls because you want to be in a situation where the customer pain points on sales calls are cross pollinating into the product roadmap, and you also want to ensure that your sales team has visibility into what might be coming and are constantly informing that. And so I think really leaning into that, building that relationship between these traditionally more siloed orgs and hopping on those calls is something that I'd really recommend.

**Lenny Rachitsky** (00:47:16):
Awesome. Let's go actually one layer deeper here. So you're talking to people all the time about FigJam, "Aren't you using FigJam? What do you think of Figma? What do think of this?" You're hopping on sales calls. What do you do with what you hear? Is there kind of an operational approach where you... Do you just put in your head and sticks in your head and rolls around and comes up, things emerge? Do you have a place you put these insights, you're learning? Are you putting post-its in FigJam, for example. And then on the sales side, do you have a cadence where I'm going to join a sales call once a week, here's a person I love in sales, I'm going to try to join all the calls. How do you actually operationalize these things?

**Mihika Kapoor** (00:47:50):
The insights get operationalized in a number of ways. So first is... So yeah, let's continue using FigJam as an example. I think, like I mentioned, Figma as a company uses FigJam for everything. Multiple FigJam files are made per day, per meeting, et cetera. We had this initial situation where people outside of the company were mostly using FigJam for brainstorms. And so as we were scaling our FigJam sales team, I sort of set up a recurring cadence with the folks in our sales team in order to understand like, "Okay, what are you guys hearing?" And then I would share what was coming, and then I would use their input as signal as to what should be prioritized or deprioritized on the roadmap. And they would use my signal to understand what were the various use cases that they could be pushing with the customers.

**Mihika Kapoor** (00:48:45):
And one thing that happened during one of the meetings was I literally walked them through, this meeting, this is how I use FigJam. In this meeting, this is how I use FigJam. In this meeting, this is how I use FigJam, blah, blah, blah. And what that resulted in was I actually made a Loom video walking through my weekend FigJam, that our sales team later distributed to a bunch of companies to inspire them as to like, "Hey, not only can you use FigJam for this, you can use Fig Jam for X, Y, Z. You can use it for your team pickups. You can use it for your retros. You can use it for planning your mom's birthday party. You can use it for planning your all hands. You can use it for sketching out the contents of what's going to go into your next deck," so on and so forth. And so it basically manifests in two way, the first is having it inform the prioritization of your product roadmap.

**Mihika Kapoor** (00:49:35):
And then the second is what ideally creating artifacts that the sales team can use to evangelize the things that you are seeing and the stepping stones to that vision that you creating. And then the last thing is that sometimes the conversations aren't immediately actionable, right? Sometimes the sales team has an insight or has a request that is just objectively not feasible because the team has too much on its plate. Conversely, sometimes the team might have a suggestion for something that might be pitched to sales folks that's too early given the stage of the conversation. And for that, we basically have... We store it in Asana basically. We have this integration, which many companies might have, which is like Slack integration, where you can react with an Asana emoji, and then any piece of feedback that comes in from sales or from the rest of the company gets turned into a task in your backlog, and then you do a weekly grooming of that.

**Lenny Rachitsky** (00:50:33):
Amazing. Cool. Very tactical and useful.

**Lenny Rachitsky** (00:50:36):
**Lenny Rachitsky** (00:51:28):
Another thread that I've noticed, and I wasn't planning to go in this direction, but you just care so deeply about the things you work on. You actually really, really love it and want it to be incredibly successful and feels like you're just always thinking about it. Reminding me of this quote from your colleague Karl, they shared that, "It feels like you care deeply, which makes me care deeply. Who wants to be led by someone who doesn't care about what they're building?" It feels like that's an important part of the way you work and think. Is there anything you want to say about that?

**Mihika Kapoor** (00:52:01):
When I started out my product career, I actually-

**Lenny Rachitsky** (00:52:03):
... About that.

**Mihika Kapoor** (00:52:03):
When I started out my product career, I actually joined as a RPM, or rotational product manager, at Meta, which was effectively a program that brought together new grad PMs, so people who had zero PM experience and taught them how to be PMs. And, in the beginning of this program, we had a series of conversations with leaders across the company. And, one particularly notable conversation was with Julie Zhu, who was the first ever intern at Meta and the VP of design. And, she was giving us feedback and advice about how to draft compelling product strategy, etc. And, something she said that has stuck with me throughout my entire product career is that when two people disagree about product strategy, it is because they have different assumptions. Because, if you have the same assumptions, there is no reason why a person should think, "We should do X versus we should do Y." And so, it's like, "Okay, how does this relate to what you were just asking about feeling deeply and caring about what you're building?"

**Mihika Kapoor** (00:53:11):
I think that it's really important to not just build a roadmap because it's handed to you, or not just build an idea because it's handed to you. I think that you need to understand in the event that it's a top-down strategy, what are the assumptions that led to folks believing that that is the right idea? And then, if it is you pushing something bottoms up, you need to be able to ensure that everyone else has the same assumptions that you have in your head that leads them to believe deeply or not believe deeply. And I think what's really important is that people can, to Carl's point, gauge someone is about a project. And, my take is that, the more you believe in an idea, the more natural it is to be passionate about it.

**Lenny Rachitsky** (00:54:02):
I imagine people listening to this will feel like, "Oh shit, I don't really love what I'm working on. I don't work at Figma. I don't have the best of most amazing products." Maybe it's hard to get excited about stuff. Is there anything you could share there? Just say you're working on something that you're not so passionate about, is it a fine thing, keep searching, or is it just figure out something you're excited about? Any advice there for someone in that boat?

**Mihika Kapoor** (00:54:25):
My first piece of advice would be to not just think about the scope of what you are working on as the thing that happens to be in flight at any given moment. But, if you're working in a company, take a step back, understand the vision of that company, and understand your users, and understand if there's anything in that space that you are passionate about. I think it's quite easy to believe that the project that you're working on is your scope. My take is that your scope is the world, and to the extent that you can figure out does the idea that you're passionate about fall within your company, versus fall outside of your company, that should guide the next steps in your career. And so, I think that potentially common misconception is that founding something is just for capital F founders, but I think that anyone can found something. You can found something inside of an existing company, you can found something from scratch. And, there are different reasons why you would do each, right?

**Mihika Kapoor** (00:55:43):
The reasons why you would found inside of an existing company is if you think that there is a distribution advantage that you want to take advantage of, if there is a technical or platform advantage that you want to take advantage of. Or, there's also a reality which is it's slightly less risk. So, depending on what your risk tolerance is, you can figure out what makes sense. There are things that are harder inside of an existing company, right? It's harder to take an executive decision. You actually cannot take an executive decision. You need to receive buy-in on every single decision that you make. Sometimes it's harder to move faster. And then sometimes, there are things that are just different when you're starting inside of an existing company, versus starting something outright.

**Mihika Kapoor** (00:56:27):
So the things that are different is building a team is quite different. The way that you recruit and the set of folks that you can recruit from, that composition is quite different. And then, the way that you pitch and who you are pitching to is quite different. And so, I think that sometimes, yeah, it makes sense to found inside of a company and to use that to make your flame burn, right? Sometimes it makes sense to found outright. But I think that the first key to being passionate about what you're working on is to find an idea that you're passionate about.

**Lenny Rachitsky** (00:57:01):
I love this as a metaphor of the flame where it applies both to you as a person at a company and keeping that flame going and building it. And then also the idea and a project that accompanies little flame that you're growing over time, building momentum around. So you've hinted at this whole idea of starting zero to one and building new products within larger companies, which I want to get to. We've gone really deep on a bunch of awesome stuff and I'm really happy we did. There's four more skills of things you're amazing at. So here's an idea, let me share the four. How about you pick two that you're most passionate about that you think you have the most advice to share, and then we'll just do those, and then we'll go to what you've learned about building something completely new at a larger company? How does that sound?

**Mihika Kapoor** (00:57:40):
Perfect.

**Lenny Rachitsky** (00:57:42):
Okay. So, from folks that you work with, the four other skills, things you're amazing at, and I still want to hear the things you think you're not amazing at. One is creativity, that you have really creative solutions to problems. Two is empathy. You're really strong at empathizing with users and using that to build amazing products. Three is culture. Sho tells me you're the culture carrier at Figma, which is amazing, because the culture there from what I hear is amazing. And then, four is dealing with change. You're amazing at just like, "Okay, cool. Priorities are changing. Great, let's go. Here we go." Which of those two feel most interesting to you?

**Mihika Kapoor** (00:58:21):
Maybe we can do the latter two, because they're a little bit different than the other things we've been discussing. Yeah.

**Lenny Rachitsky** (00:58:27):
Sounds great. So, I guess culture. Let me start there. Okay, so yeah, Sho called you the culture carrier Figma. I hear there's some fun things you all do there. There's something called the hot seat, there's something called the Figgies. First of all, can you maybe explain these two things? And then just broadly, what you find is important about focusing on culture as a PM?

**Mihika Kapoor** (00:58:49):
Yeah, I can definitely talk about those two things. So, hot seat is actually a tradition I started at our first PM offsite post-pandemic. So this was March of 2022. The PM team was sub-15 people at that point, and we all fit around a dinner table, which is no longer true today. And, it was really important to me that we all got to know each other in a context that was outside of work. I think that PMing is a highly collaborative function. And, to the extent that you have great relationships with all the teams that you're interfacing with, one is it goes a long way in terms of the product, but two, speaking about passion, it makes your day-to-day so much more fun if you feel like you're working with your friends, and if you are working with your friends.

**Mihika Kapoor** (00:59:39):
And so, we were coming out of a long intense day session, and I was thinking about, "Okay, how do we break the ice?" And, hot seat is this game where you go around the table and each person gets two minutes on the clock and everyone else at the table can ask them anything. And if they want to, they can decline to answer. But we try and keep it, generally speaking, quite friendly and comfortable for folks. And so, we kicked off this game. And, what was really interesting was earlier that day we had done a personality test, as a side note, our PM team is obsessed with personality tests.

**Lenny Rachitsky** (01:00:17):
Which personality test, by the way?

**Mihika Kapoor** (01:00:19):
We to this day say the best one was the one that we did at this offsite, which is the Strengths Finder test. And, what had basically happened was over the course of that morning, we had all dug into... We were saying, "What are our strengths? What are our weaknesses?" Etc. And we had this really fun foundation to build on during the game of hot seat, where it was like, we were digging into like, "What about people's backgrounds made them think the way that they do today? And, what random anecdote at age seven of playing catch with their dad in the field led to how they thought about auto layout? Blah, blah, blah, blah." And, I think that being able to understand what motivates a person is so important when you're working with them, and also just in building a connection with them. And so, that was this moment that really brought the whole team together.

**Mihika Kapoor** (01:01:09):
Something that I was really gratified to hear after is that, since then, hot seat has become a tradition within the company. And so, all the PMs went on to play it with their own teams. Yuki and Sho went on to play it with the exec team, so on and so forth. And so, it's become this thing that now anytime that someone joins the team, okay, you put them in the hot seat. And then, if you're meeting someone's significant other, you put them in the hot seat. And it's this thing that is just totally spread, but it's a really fun way to just get to know folks and what drives them. So, that's one of my favorites. I highly recommend.

**Mihika Kapoor** (01:01:42):
The second thing that you asked about, which was the Figgies. And, this is basically an Oscar style awards ceremony that was hacked together. And so, where the Figgies was inspired from was actually every year we have... I was mentioning like SKO, our sales kickoff. And, on the last night of SKO, there's this award ceremony, where they appreciate all of the incredible work that has taken place in the sales and marketing org. And I saw this and I was like, "This is incredible. We should absolutely be celebrating the product team as well when we're together." And so, what I did was I basically took our Figma boardroom, which is called Bigma, and worked with another PM Elan to deck it out, and a red carpet, gold curtains, etc. And we bought little Oscar trophies for everyone, and got their names written on it, and voted people in for all of these absurd categories, like most likely to name their child Figma, most likely to go their career without writing a PRD. Blah, blah, blah.

**Mihika Kapoor** (01:02:55):
And, of course, forced everyone to give some acceptance speech. But, I think that making people feel appreciated for even just the quirks and the energy that they bring to the team is something that's incredibly important. And celebrating that diversity together is something that I think goes a long way in terms of making people feel close, and also making people understand maybe someone who they don't know that well on the PM team, because then you learn, "Okay, beyond them having this Zoom background, this is what's cheeky about them. Or this is what's interesting or unique about them." And so, I think that culture is so important. Figma has this core value called play, which I love, which really emphasizes just that everyone should be having fun at all times, and work should be fun, and gathering should be fun. And I think that I personally am a huge believer in this remote first role that we live in, you also want to take advantage of those times when you're able to get together and do things that make the team feel geographically close, even when they're geographically spread out.

**Lenny Rachitsky** (01:04:09):
Oh man, it's so fun. And I love that it's just like, you did this, right? It's not like Dylan is adding all these rituals to the team. It's very bottom up. And, in theory, any PM on the team could have done this.

**Mihika Kapoor** (01:04:21):
It's interesting, something that I had heard, Vishal Shah, who was the former head of product at Instagram say, is that, often in companies culture is set top down, and then the innovation that comes out of that is bottoms up. And so, I think in the first place, having a value like play does a lot in order to make folks feel like these things are celebrated and time should be carved out for them.

**Lenny Rachitsky** (01:04:49):
To come back to your original point of just culture is everything, a lot of PMs are like, "I have so much work to do. I have so many things to do. I'm just working all day every day." What can you tell them about why this is so important and worth putting some time into? And should everybody? Or is it just like, "If you're excited about this, do it. If not, don't worry"?

**Mihika Kapoor** (01:05:06):
I think culture is important in that it establishes trust between groups of people. And so, I think that actually earlier you were asking about passion and what makes someone feel passionate about work. And I think realistically, that passion breaks down into two things. One is, are you passionate about the vision that you're building towards? Which we spoke about. But the second thing is, are you passionate about the people who you work with?

**Mihika Kapoor** (01:05:35):
And, I think that roadmaps change, products change, but feeling a connection to the folks that you're working with make you much more durable as a team. It means that when times get tough, which they will, your gut instinct is to rally together and collaborate together to find a solution, rather than to jump ship or something. I think personally, I'm in love with my team. They give me so much joy and happiness on a daily basis. I was telling them the other day that when they post prototypes in our Slack channel, sometimes I get little flutters in my chest like when you have a crush on someone. And, I think that having that emotional connection to your team is fun. And I think that emotional connection comes from investing in culture.

**Lenny Rachitsky** (01:06:26):
And again, it's like, you did it. You made it happen, right? It's not like, "Oh, this sucks. My team's no fun." It's like, you can make it more fun. And I think the two examples you shared are awesome, because one is a high-end version where there's a lot of work. And the hot seat, it's just a quick idea that takes no work, just an idea, and then you just ask to do it, and it's there.

**Mihika Kapoor** (01:06:44):
Okay, so actually, I want to combat the perception that the Figgy's was a high production, high cost thing. It was very low cost. I ordered everything on Amazon and assembled it in an hour. And so, there are ways to be scrappy in making things come together. And so, I would say, don't be intimidated by any idea of being too large to take on. Just go for it.

**Lenny Rachitsky** (01:07:08):
That's an awesome correction. Okay, final trait you're great at. Somebody shared that you pivot with grace and enthusiasm when things change and priorities change, projects are killed, projects are spun up. There's something that a lot of people at companies just get so sad about, "Oh my God, things keep changing. My project's killed. Oh, this priority changed." It feels like you've learned to make that a superpower. What can you share about what you've learned there and how to leverage that into doing great and being successful?

**Mihika Kapoor** (01:07:40):
For this one, I could actually maybe give an example that preceded my product career, which was, when I was in college, I actually founded a national design conference for students across the country. And the way that this came about was when I was in college, design was very much having a watershed moment in tech. So, companies like Airbnb and Pinterest were leading an industry and they were leading not just because they built technology and made it accessible, but because they were really using the interface layer to differentiate. So there was this point where software had reached a certain level of saturation, where things that were not possible were now suddenly possible, and now suddenly possible in multiple companies. And design became this differentiator, which is really exciting. But at the same time, none of this was reflected in most schools across the country.

**Mihika Kapoor** (01:08:39):
And so, I went to Princeton and there was nothing that resembled product design in our curriculum. And this was baffling to me, because I was like, "There is such clear momentum..." Speaking about momentum in industry about this being a profession that is so important and so influential in building the next generation of companies. Yet, the groundwork to make that happen wasn't really there. And then, I interned at Facebook, and I realized that my entire class of 25 interns had very similar experiences, where they too were self-taught product designers. And so, that summer, I actually watched a documentary that was coincidentally produced by Envision that featured folks like John Maeda, amongst others, and was talking about how design changed the world that we lived in, and was going to rewrite the future, which I really believed in. And so, I was incentivized to found this conference called Design Nation that would democratize access to a design education and bring together top students from across the country with industry leaders.

**Mihika Kapoor** (01:09:43):
And originally, my plan was to build this within an organization that already existed at Princeton, because they had the funding, they had the resources, they had the expertise in order to make this a reality. And then, what actually ended up happening was they too were skeptical of the business value of design and didn't think it would be possible for something like this to be funded. And so, I went from building something in a situation where I thought finances, expenditures, connections, et cetera, were totally taken care of, to having none of that and needing to build it from the ground up.

**Mihika Kapoor** (01:10:18):
And, it was funny, one of the best pieces of advice I got in college was, don't underestimate the power for .edu email address. And I just went on a spree, cold emailing so many people, so many executives about this problem that I was trying to solve. And, what actually ended up happening was people would hop on the phone with me, and a lot of the folks who I spoke to, designers who I really admire, like Daniel Burke, Jamie [inaudible 01:10:46], et cetera, were folks who would be like, "Oh my God, this was such a problem when I was in college. Of course I'll help you solve it. I can't believe it hasn't been solved yet."

**Mihika Kapoor** (01:10:56):
And so, ultimately, it grew into this conference that lasted many years, brought together folks from originally around the country, then more recently around the world. And ultimately, did live under that broader organization. But I think, having the ability to, in the absence of formal backing or something, still chase after something and maybe pivot the way that you're thinking about it, or pivot the way that you are allocating your own time. Maybe suddenly speakers is not the most important thing, fundraising is the most important thing. Or, building a hype landing page so that you seem more legit than a very scrappy few-person student organization is the most important thing. And just being quite adaptable when it comes to resourcing, I think is very important.

**Lenny Rachitsky** (01:11:48):
That's an awesome example. It shows another trait, Mahika, in our archeological study, which has come up a bunch, and I'm just putting my finger on it, is just high agency. It feels like you're just consistently just like, "I'll make this happen myself. This problem exists. We need more product designers in school. I will solve that problem." And I love that. And by the way, Design Nation for folks that want to explore that, how do they find that? And it's still going, right?

**Mihika Kapoor** (01:12:19):
Yeah. So, you can Google Design Nation.

**Lenny Rachitsky** (01:12:24):
Okay.

**Mihika Kapoor** (01:12:24):
And, we have a Instagram page amongst other things. And, yeah, last year we had folks like Stuart Weitzman and Joe Gebbia, who's one of the co-founders of Airbnb come and speak, which was super exciting.

**Lenny Rachitsky** (01:12:37):
Awesome. And then, who is it for? It's for students? People in college that want to learn to be designers?

**Mihika Kapoor** (01:12:41):
Yeah, it's for design-driven college students. I think one thing to call out is that one of my focuses in the early years was to ensure that this is for, not just capital D designers, but design driven students. So, we also took engineers who are very design minded and marketers who are very design minded, et cetera, because of that core belief that the most innovative solutions will come out of people that are operating at this intersectionality.

**Lenny Rachitsky** (01:13:13):
Okay. So we've talked about all kinds of things you're amazing at. Before we transition to what you've learned about just building new stuff at larger companies, which you're very good at, can you just bullet point the skills you find you're not good at? I said we would come to this. What do you think you're not good at? And we won't go too deep here, unless you want.

**Mihika Kapoor** (01:13:34):
So it's interesting, because I think that there are many things that we talked about that are actually a double-edged sword in practice. So, let's start with the conviction piece. I think that the good thing about being high conviction is that you're able to sell forward and to get people to feel strongly about something and a next step in the future. I think the downside of that is if there is less of a history of working together, there might be skepticism about like, "Oh, are you just pushing something because you believe in it? Or are you pushing something because our users actually needed it?" And so, in those moments, it becomes really important to constantly be highlighting user proof points.

**Mihika Kapoor** (01:14:17):
I think, the second is scrappiness. So, I think I have a very high ability to thrive in ambiguity and to pull things together last minute. So, for example, it's very common that I am editing a product review deck minutes before we are about to present, or that I haven't started until the night before and stay up until 3:00 AM to do it. And this is somewhat fine. But then, I think that other people don't always love it, because they're like, "Hey, maybe let's start earlier next time." I get that. The third piece would be I get very consumed by the details of something. And I think in a lot of instances, this is great. Also, at a certain point, sometimes you want to defer those decisions. And so, that's also an important skill to learn.

**Lenny Rachitsky** (01:15:11):
Awesome. Thanks for sharing all that. This touches on something that came up in a previous podcast episode. Nikhil from Meta had this really interesting metaphor, where every superpower has a shadow. Basically, everything you're amazing at, there's something that'll be a problem, a liability basically for you. And so, I think, what you're pointing out is you're amazing at some of these things, but there's downsides. And I think that's really important for people to know. And we already talked about just something you believe that I also believe, it's just, you'll have things you're not good at, focus on things you're amazing at, and just getting better at those things, and use that to achieve, because it ends up being a lot more.

**Mihika Kapoor** (01:15:48):
Also, building off of that is as you scale your team, it's really important to be self-aware of what those blind spots are and to hire for that. Because, you want individuals to be spiky and you want team to be well-rounded.

**Lenny Rachitsky** (01:16:06):
That's a great segue to talking about building completely new things at large companies. So, what I hear is you're the go-to person for zero-to-one stuff at Figma, which is incredible. Figma is one of the most admired, successful tech companies in the world. And, you're the person people look to build completely new stuff. So, first of all, why are you so passionate about this stuff? Why do you want to be working on brand new stuff like this? And why is it important for companies to be good at this?

**Mihika Kapoor** (01:16:37):
In order for a company to stay competitive, a company needs to stay entrepreneurial. If you are not constantly thinking about what's next, defining the industry standard, seeing around the corner from your competitors, you will get taken over. That is a reality. And so, consequently, I personally love to screen for very entrepreneurial companies and companies that have that culture. And so, Figma has this huge run with it culture, where run with it is also one of our core values, and it's really encouraged that people can just sprint off in a direction that is seen not as a distraction, but rather a manifestation of the company's values.

**Mihika Kapoor** (01:17:22):
And so, at the company, some of our most monumental launches have come out of hackathons and have come out of bottoms up projects. So recently, this week we had a launch of Multi-edit, which was a long clamored for a feature where folks can edit things across multiple frames at the same time. That was a multi-year, multi-product long initiative. We have things like Jambot, which is an AI plugin inside of FigJam that has come out of an AI hackathon that we had last year. Our entire widgets platform was originally a hackathon project. And so, there's this culture of celebrating things-

**Mihika Kapoor** (01:18:03):
... project. And so there's this culture of celebrating things that have been pushed bottoms up. And so constantly thinking about how can people within the company be entrepreneurial, both in terms of getting new products up to users and in terms of improving internal processes, is just a culture that you constantly want to be facilitating and leading into.

**Lenny Rachitsky** (01:18:20):
Awesome. And clearly, Figma is very good at this. Let's dive a little deeper. Say, somebody wants to make their culture more entrepreneurial or wants to become better at this individually, maybe just broadly, what does it take to do this well, to go from idea to, "Okay, that's a huge new product for a business"? What have you learned just broadly, what are kind of the steps or the important elements of that, well?

**Mihika Kapoor** (01:18:46):
I think that there's this interesting metaphor that you were calling out earlier about a zero-to-one project being like a flame. And flames are interesting, because they're sort of destined to die at the end of the day. And I think about the person who is pushing a zero-to-one idea as kind of being the keeper of the flame.

**Mihika Kapoor** (01:19:13):
And in particular, there's this metaphor that really sticks with me, which is in Greek mythology, all the gods sit on Mount Olympus, and there's this Goddess Hestia who is the keeper of the hearth, and it is her job to always keep the hearth burning, even when all the gods peace out to go on their various quests. And I kind of think about the person or the team or the group of people who are pushing a zero-to-one idea as being the Hestias or the keepers of the hearth. And it is your job to stoke the flames and the embers if they are at risk of dying out. And it is also your job to ensure that the idea can spread like wildfire and can build that level of hype you need for an entire company or an entire set of people to be clamoring for something to get built.

**Mihika Kapoor** (01:20:04):
And so more concretely, I think that there are three things you need to do in order to be successful at bringing an idea into existence. The first is you need to have the right idea, right? And that's the empathy piece. That's the piece that you will get from having conversations day in, day out with your users. The second is you need to secure buy-in for that idea. So that's the vision piece. You need to be able to rally an entire set of folks, but honestly, most importantly, your leadership and your team behind an idea. And then, the third is you need to be able to make it spread like that wildfire. You need to get it to a point where someone joins the company and they're like, "Oh, what is that flame burning there? And how can I learn more about that?"

**Lenny Rachitsky** (01:20:50):
Coming up with a great idea, getting buy-in for your idea, and then spreading it within the organization, what have you learned about how to actually come up with an idea that is actually a good idea?

**Mihika Kapoor** (01:20:59):
So it's funny because the current product that I'm working on actually came out of a conversation or a set of conversations where I was pitching FigJam to people. And so kind of speaking about constantly having these user conversations, I think in order to have the right idea, there are two key elements. The first is you need to have that user empathy. You need to be constantly having conversations with your users, diving into what are their pain points, not only about the product that you're working on, but general perceptions about your company and also general perceptions about the other tools or products that they might be using on a daily basis. It's not enough to have a perspective on how well you are competing in the market, but you also need to know, like understand a person's full end-to-end tooling usage.

**Mihika Kapoor** (01:21:48):
And then, the second thing is you need to ensure that what you're kind of working towards ladders into a company goal. And so something that's very top of mind at Figma or something that has been very top of mind at Figma has been how do we go from building for designers to covering the entire product development cycle and expanding to non-designers in particular. And non-designers is kind of this bucket term that we use for PMs and developers and marketers and so on and so forth, but how can we ensure that our tooling suite is reflective of all the different stakeholders that make the product development process what it is, and so I think that, yeah, just constantly having the conversation with the users and also constantly being anchored around not what are you currently working on, but what is the broader company goal is something that will help you come up with the right idea.

**Lenny Rachitsky** (01:22:48):
Such an important point, basically understanding the business, not just, "Here's my feature, here's my product, or here's what feels like a great cool thing to build." Okay, so that's the idea getting buy-in. What have you learned about how to do that? Well, clearly, you've been very successful, because we've talked about a lot of these things, building hype, creating a big vision. What else there that we haven't talked about that you think is really important?

**Mihika Kapoor** (01:23:12):
I think the key to being successful at zero-to-one is to honestly have optimism that borders on delusion. You need to have insane, almost like reality distortion field where you don't hear the word no, or at the very least, you translate it into a not yet. And so I think that in terms of pitching, I'll be honest, my first few pitches of this idea were not successful. What basically happened was kind of like both conviction, the idea by talking to users, and then I would have ad hoc conversations with folks around the company, and I would be like, "We should do this." And they would be like, "Maybe." And I would be like, "Okay, what am I seeing? What are they not seeing?" And then, what basically happened was we had a PM off-site where we were talking about strategy for the next year. And I, again, pitch this, and it got kind of momentum there, but not really.

**Mihika Kapoor** (01:24:15):
And then, I think the third time when it actually stuck was at the Maker Week hackathon. And this was kind of an insane experience for me, because I was actually hosting our hackathon. So I was kind of working with our VP of design, Noah, in order to spread the word about like, "Hey, everyone pitch your ideas." And to constantly, hackathons are interesting when they're virtual, right? Because you don't really know what people not in your office are doing, right? So you're constantly thinking about like, "Okay, how can you hype up the whole company, right? How can you hype up the SF office with what people are building in New York? And how can you ensure that London stays included even though there's a limited time zone overlap," and things like that. And so I was simultaneously thinking about, "Okay, how do we keep the momentum of this hackathon running? And then, also, how do I push this idea bottoms up?"

**Mihika Kapoor** (01:25:05):
And I think that something that's really important when you're making a pitch is to not be daunted by the scale of your pitch. So, for example, in this instance, the proposal was basically to introduce a new product. And building a product in a week is for all intents and purposes kind of crazy, but this is I think where the scrappiness piece comes in. You need to be willing to be very clear about where you're willing to take the hit on quality or believability and where you need to push in order to make your thing feel believable. So one example of something that we did was we literally, in order to make this new product feel more real, and this was maybe a two line change in code, was we swapped out the FigJam icon in our file browser to this new icon.

**Mihika Kapoor** (01:26:00):
And adding a whole new entry point is a lot of work, and you can't do that. But just swapping something and taking about what exists and changing the minor things in order to communicate what is different about your idea versus what exists today is something that you really want to lean into. And what basically happened was that at the end of the week, we had this demo day, and I was going between introducing each of the demos to doing the demo and did a little wardrobe change in between. And I think that what ended up being really great about presenting an idea like this in a company-wide forum, which I highly recommend, is that at that point, it becomes not just you evangelizing the idea, but your teammates and your colleagues and your peers evangelizing the idea. And that sense of momentum carries a lot of weight, I think.

**Lenny Rachitsky** (01:26:48):
And this kind of leads into the next bullet point you shared of spreading the idea across the company. It feels like this is part of it just getting it spread in a big powerful way initially. But what else have you learned about just getting this to spread across the company? It gets kind of like this flame spreading throughout the organization.

**Mihika Kapoor** (01:27:05):
I think something that's very unique about Figma as compared to other companies is we have a multi-month plus long staging or dogfooding process. And so something that was really interesting to me was... One of the first projects that I worked on at the company was we were building sections inside of FigJam. And we had a problem. We built it. We put something on staging, and I was kind of like, "Okay, cool, it's been on staging a week, now we can launch, right?" And I was greeted with like, "No, we can't launch."

**Mihika Kapoor** (01:27:41):
And I think that leaning into that willingness to being vulnerable about your product and this acknowledgement that feedback is a gift, and that bits and pieces of feedback from across the company will help your product mature and get to a place where it's ready to go out the door is really important. And what's really interesting is this helps the team who's working on the product, because you're getting feedback, and that's the most direct benefit of putting something on staging early.

**Mihika Kapoor** (01:28:11):
But the other benefit about putting something on staging early is that it makes people invested in your product. So if you think about why are betas so valuable and why are alphas so valuable, it's because when someone gives you feedback, and then the team in charge implements that change, you see that and you're like, "I shaped that part of the product." Right? And to the extent that you can get as many people in the company feeling like they shaped X, Y, Z parts of the product, I think that's really powerful, because, then, you kind of are ensuring that there's this constant feedback loop, and there's this constant investment in thinking about how can we collectively drive towards success, because at the end of the day, product development is a team sport, right? It takes everyone to make something successful. And so I just think about putting things early on staging and getting people involved in the cycle as opening up the doors to the product development process, and hopefully, that just elevates the quality of the product.

**Lenny Rachitsky** (01:29:15):
Is there anything else you want to touch on or share or leave listeners with before we get to a very exciting lightning round?

**Mihika Kapoor** (01:29:22):
If you have an insight that only you have, I think on one hand, you can kind of believe, "Oh, other people aren't thinking similar to me. Therefore, maybe, I'm wrong," but I would actually flip that, because I think if you have an insight that other people are not seeing, it is even more on you to get people onto the same page. And so to the extent that you can shout from the rooftops about all the insights that you're learning, I think that, in and of itself, creates a more entrepreneurial culture within the company, because chances are other people will see you doing that. They'll be inspired to contribute in the same way as well.

**Mihika Kapoor** (01:29:58):
I think the last thing that I would say is, which is maybe an aspect that we did not touch on, is that understanding motivations is, in my opinion, one of the keys to running a team successfully and driving an idea forward. So, for example, if you think about the composition of a product team, you have engineers, you have designers, you have researchers, data scientists, et cetera, and different people want to be involved in the kind of product visioning phase to a different extent. There's some people who do want a solution handed to them, because for them, the most exciting part of the process is to find the technical solution in the code. On the other hand, there are other people who find it really hard to feel passionately about a thing that they have not contributed to. And so I think to the extent that you can understand these motivations of your team, of your leadership, of your peers, and constantly ensure that you are catering to the individual, as opposed to the average, that is what, in my opinion, leads to one of the highest-functioning teams.

**Lenny Rachitsky** (01:31:11):
Such a cool point. It comes back to the personality tests that you spoke of earlier. Is that the best way to figure this out? Is it more just watch people and try to guess at what they're most excited about [inaudible 01:31:21]-

**Mihika Kapoor** (01:31:21):
Oh, I think you have to directly ask them. So anytime someone joins my team, especially on the engineering side, because I think this is where there's the greatest variance, I will literally ask, " How much do you like being involved in product decisions?" And to the extent that you can take decisions in the open, that is excellent. And even if the decision is something along the lines of like, "Okay, we have four options," and you can go in with a leading point of view, but giving everyone the opportunity to voice their perspective and push back, if they want to, I think that that's very powerful.

**Lenny Rachitsky** (01:32:03):
Such a good tip. I feel like I could ask you questions for at least two more hours, but we're not going to do that. Maybe, we'll have round two some day. With that, we've reached our very exciting lightning round. Are you ready?

**Mihika Kapoor** (01:32:14):
I am ready.

**Lenny Rachitsky** (01:32:16):
Mihika, first question, what are two or three books that you recommended most to other people?

**Mihika Kapoor** (01:32:21):
Yeah, I'll start by saying that I am immediately skeptical of anyone who has not read Harry Potter. So, if you're one of those people, go read Harry Potter. Maybe, it contributes to creativity. I don't know.

**Lenny Rachitsky** (01:32:35):
Now, we're talking about every book in the series, or at least the one book?

**Mihika Kapoor** (01:32:38):
No, no. You have to read the entire series, and you have to read it in order. It's actually funny, when I was in kindergarten, my mom bought the fifth book, and then the person at the bookstore was like, "No, no." Like, "No, no." We were like, "Okay, got it." And then, the others that I would recommend are from a fiction perspective. I think Pachinko by Min Jin Lee is incredibly beautiful and powerful. It's like a multi-generational Korean saga. I think I'm personally just motivated and moved by large scale things. So to see a single story traverse so many generations was very fascinating to me.

**Mihika Kapoor** (01:33:17):
And then, from a more businessy book perspective, which is maybe more what you're getting at, I think that I honestly pseudo steer clear of how-to books, but one that has had a particularly large impact on me is Creativity Inc. by Ed Catmull. And this is about the founding story and scaling of Pixar. And what was so interesting to me about this book was it basically talks about how you create a process around cultivating creativity. And it's interesting, because creativity is so unencumbered and process is the opposite, so that's very fascinating.

**Lenny Rachitsky** (01:33:50):
My favorite lesson from that book is that it sticks with me as the ugly baby metaphor, which feels like so tied to the way you think and operate. And I won't get into it. By the way, have you read The Overstory?

**Mihika Kapoor** (01:34:01):
I have not. I'll add that to my list.

**Lenny Rachitsky** (01:34:04):
I feel like, based on the way you described Pachinko, this is a book for you. It's a multi-generational family story that I did not actually finish. It's very long, but I feel like you were there.

**Mihika Kapoor** (01:34:16):
Okay.

**Lenny Rachitsky** (01:34:16):
There you go.

**Mihika Kapoor** (01:34:16):
I'll go order it.

**Lenny Rachitsky** (01:34:19):
Okay. Favorite recent movie or TV show?

**Mihika Kapoor** (01:34:22):
Favorite recent TV show would definitely be Severance.

**Lenny Rachitsky** (01:34:28):
Movie, or shall we move on?

**Mihika Kapoor** (01:34:29):
Oh, movie, I recently watched Dune 2 and Dune 1 in the span of a week. It was really fun. I watched Dune 2, because someone asked me to co-host a premiere of Dune 2 with them, and I was like, "Okay, sounds good, sounds cool, but I need to watch Dune 1."

**Lenny Rachitsky** (01:34:44):
Good choice. I just watched Dune 2. I don't know if a more epic movie can be made. I was just gripped.

**Mihika Kapoor** (01:34:50):
The visuals were stunning.

**Lenny Rachitsky** (01:34:52):
Like not breathing.

**Mihika Kapoor** (01:34:52):
Yeah.

**Lenny Rachitsky** (01:34:53):
It's out of control. I watched it IMAX. I think that was a good call, but it was stressful. Favorite interview question they like to ask folks when you're hiring.

**Mihika Kapoor** (01:35:02):
I like to ask people what motivates them, but also, people often ask me, what is my favorite hot seat question, which I think is kind of similar. And my answer to that is that it's highly dependent on the person, and there's no go-to hot seat question. And I almost feel the same way about interview questions.

**Lenny Rachitsky** (01:35:19):
Favorite product you recently discovered that you love?

**Mihika Kapoor** (01:35:23):
Speaking about hype, I am kind of obsessed with the browser company, Arc onboarding flow, specifically the onboarding flow. I think that they do such a good job of amping you up for not only the larger change that they're trying to make in terms of personal operating system, but of showing you to what extent their team thinks about the details of the product, where a lot of other products might cut corners. And I think their ability to communicate the ethos of their product through that is really powerful. So that's one.

**Mihika Kapoor** (01:36:01):
And then I think the second is in the AI space. I'm really excited by Pika, which is video generation, video editing software. I think that, in my mind, one of the biggest shortcomings of AI, the way that a lot of people are building it today is that it's optimized for the demo or optimized for the tweet, right? And it's basically this situation where I think about it as, in my mind, one of the biggest goals of AI right now is the black boxification of AI, because it's not really useful to enter a prompt and get an output that you can't interact with, because then it's like, if something's a little bit off, what are you going to do? You're kind of stuck. But I think Pika is doing a really great job of not just investing in the foundational video models, but also giving you the ability to manipulate the output. And so I'm excited about that approach, and I hope that more companies take you from that.

**Lenny Rachitsky** (01:36:55):
Awesome, good choices on Arc. Whenever anyone ask me for a great onboarding follow, that's the one I point people to. And we had Josh Miller on the podcast in the past, and I was proud that he pinned our interview as top of his Twitter feed for a year, which made me really happy. Do you have a favorite life motto that you often come back to or share with friends or family that you find useful in life or in work?

**Mihika Kapoor** (01:37:19):
Yeah, "Life is a game of expectations." And so speaking of books and movies and things like that, I will never ever watch a movie trailer or read the back cover of a book, because I think it means that you're going into it with too many expectations. It either tells you all the punchlines, or it tells you the foundational backstory or something like that. And I think that, to the extent, that you go in either with no expectations or low expectations, that's the key to enjoying life.

**Lenny Rachitsky** (01:37:48):
I love that tip. I recently learned the same piece of advice from Kevin Kelly's recent book where it's just a book of little tidbits of advice that he's learned over his life, and one of them is like never watch the trailer if you're going to watch the movie, and I've been doing that ever since. I think that's an awesome piece of advice. Final question. We talked about the Figgy's. You mentioned there's an award for PM least likely to write a PRD. Was that you won the award for chance?

**Mihika Kapoor** (01:38:10):
I think it was me and Sho tied.

**Lenny Rachitsky** (01:38:15):
Okay, great. I guessed correctly. Amazing. Mihika, you're... Everything, I hope you'd be on this podcast, I feel like, we could have talked for, I keep saying this, but at least two more hours maybe, we'll have a follow-up.

**Mihika Kapoor** (01:38:25):
I'd love that.

**Lenny Rachitsky** (01:38:25):
Thank you so much for being here and for making time. Two final questions. Where can folks find you if they want to reach out and follow up on anything? And how can listeners be useful to you?

**Mihika Kapoor** (01:38:33):
Yeah, you can find me on Twitter. I'm @mihikapoor. It's kind of my first name and last name smushed together. And in terms of how users can be useful to me, so one is come to Config, we will be announcing both this new product, but also so many cool things that the company is working on. A lot of very exciting AI launches and more. And I think that having the community come together is a very special moment. So hope to see you there. Cough, cough, try the new product when it comes out. And I don't know, I'm always on the lookout for cool new products. I like to be someone who tries things out early, so to the extent that you see things, send them my way.

**Lenny Rachitsky** (01:39:14):
There's going to be so many people anticipating this new product.

**Mihika Kapoor** (01:39:17):
Oh, no, yeah.

**Lenny Rachitsky** (01:39:17):
There's going to be like-

**Mihika Kapoor** (01:39:17):
We should-

**Lenny Rachitsky** (01:39:17):
... holy moly.

**Mihika Kapoor** (01:39:19):
Please have low expectations.

**Lenny Rachitsky** (01:39:22):
Okay. And the way we'll know is are you pitching and presenting it, or how do we know this is going to be your product once we see it?

**Mihika Kapoor** (01:39:28):
It'll probably be in the opening keynote, which is done by Dylan, but I'll probably give a Config talk on it as well. So that's how you will know, and I'll probably tweet about it. What I was actually going to do is to release the original vision deck when it launches, so you can look out for that.

**Lenny Rachitsky** (01:39:50):
We'll be watching. I will be at Config.

**Mihika Kapoor** (01:39:52):
Can't wait to see you there.

**Lenny Rachitsky** (01:39:54):
Potentially on stage. Can't reveal yet what's happening exactly, but I think it's going to be awesome. Anyway, Mihika, thank you again so much for being here.

**Mihika Kapoor** (01:40:02):
Thank you for having me, Lenny. This was such a fun conversation. It was such an honor and a privilege to be on the podcast. So, really, thank you so much for having me.

**Lenny Rachitsky** (01:40:11):
The honor was mine. Bye, everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [6/21] How to build deeper, more robust relationships | Carole Robin (Stanford GSB professor, “Touchy Feely”)

**Lenny Rachitsky** (00:00:00):
Many people told you your class at Stanford made them feel like their entire college tuition was worth it.

**Carole Robin** (00:00:05):
Even more rewarding for me are the, "I'm pretty sure your class just saved my marriage."

**Lenny Rachitsky** (00:00:11):
I want to talk about how to give feedback well.

**Carole Robin** (00:00:12):
I feel that you don't care and I feel you're being insensitive are not feelings, and that's where we make our biggest mistakes when it comes to feedback.

**Lenny Rachitsky** (00:00:19):
How do you avoid people getting defensive?

**Carole Robin** (00:00:22):
Questions that start with what, when, where, how. Stay away from why.

**Lenny Rachitsky** (00:00:25):
I think it might be helpful to talk about this concept that you call the three realities.

**Carole Robin** (00:00:28):
We don't understand that we are only privy to two out of the three, so I know what's going on for me and I know what I did. I have no idea what happened on your end.

**Lenny Rachitsky** (00:00:37):
That's a really profound point that anger is a secondary emotion. Really what's going on is you're afraid or you're hurt.

**Carole Robin** (00:00:43):
What a disservice to not help people understand that anger is a distancing emotion and there are other emotions that are connecting.

**Lenny Rachitsky** (00:00:54):
Today my guest is Carole Robin. For over 20 years, Carole taught the legendary course at Stanford's Graduate School of Business, nicknamed Touchy Feely technically called Interpersonal Dynamics, which helps people learn how to build strong relationships and become much more effective leaders. She then went on to start a non-profit called Leaders in Tech, which brings these same lessons to leaders of high-tech growth companies, and she also wrote an incredibly impactful book called Connect, which distills all the key insights and lessons from her decades running this course. I've had so many friends go through the Stanford course or the Leaders in Tech program, and every single one of them was transformed in terms of how they relate to other people, how they communicate, and how they lead. In my conversation with Carole, we talk about why we're often trapped in mental models that we formed when we were younger and how they now limit us and limit our potential and our ways of seeing world.

**Carole Robin** (00:05:19):
Thank you so much for having me, Lenny. I'm delighted to be here.

**Lenny Rachitsky** (00:05:22):
I've heard from so many people over the years how much you and your course have impacted their life, both friends of mine, and also people when I shared on Twitter that you were coming on the podcast, so many people left comments just like, "Oh my God, that course and Carole's changed my life in so many ways." So I am really excited to have you here. I'm really honored to have you here.

**Carole Robin** (00:05:23):
Thank you.

**Lenny Rachitsky** (00:05:43):
I wanted to start with when we were preparing for this podcast, you shared this quote with me. You told me that "I was put on this planet to help people learn that it's possible to learn how to build and develop robust, meaningful relationships." What are robust, meaningful relationships and why are they important to you? Why are they important to people?

**Carole Robin** (00:06:05):
I think that most people experience a richer, fuller, more meaningful life when they have at least some high quality relationships or maybe put the other way. If you have none, it's unlikely you're going to experience quite as rich and full a life. So I often talk about relationships exist on a continuum. At one end of the continuum is contact and no connection, or we could also say dysfunction. And by the way, contact no connection. Those are thousands of Facebook friends. Those are not relationships and those are not friends in my vocabulary. At the other end of the continuum is what my co-author David Bradford and I came to call exceptional, and exceptional relationships have a particular set of characteristics that I can get into if you want to. But before I even do that, we're not suggesting, and I'm not suggesting that everybody needs to turn every one of their relationships into something exceptional.

**Carole Robin** (00:07:05):
That would be, first of all, impractical, second of all, unnecessary. But it turns out that the skills you need to move along that continuum actually take you from contact and no connection and dysfunction to at least functional and robust. And then once you've acquired those skills, then you can decide whether or not you want to take a few of those relationships a lot farther, take them all the way to exceptional, but at least you've gained what you need to know in order to get to functional and robust. And I believe if we had a critical mass of human beings on this planet who had those skills and knew how to get to at least robust and functional, we wouldn't just have more functional teams and organizations, we'd have stronger communities, we'd have more functional schools. We might, in my wildest dreams, even have a more functional government. And so that's my life's mission.

**Lenny Rachitsky** (00:08:03):
Hopefully this episode is going to actually do exactly that, help people build from-

**Carole Robin** (00:08:07):
From your mouth to God's ears.

**Lenny Rachitsky** (00:08:10):
To give people a little more motivation to really dig in and pay deep attention to this. What are some of the benefits you've seen from people moving further along the spectrum, building more robust relationships and more exceptional relationships?

**Carole Robin** (00:08:23):
Obviously, I taught a course for many, many years at Stanford Business School, and it was the Stanford Business School, by the way. It wasn't hidden away somewhere in the psychology department. And that's because the premise of the course is that people do business with people not ideas, not products, not machines, not tactics, strategies, not even money, they do business with people. So you better get the people part right if you really want to succeed. And that interpersonal competence is a determinant of both personal and professional success. So, to your question, I've lost track of how many hundreds of emails and calls and visits I've had from former students who come to tell me I just became a CEO. I'm pretty sure I owe it all to you. I just raised my third round. I'm pretty sure I owe it all to you.

**Carole Robin** (00:09:20):
I just figured out how my co-founder and I are going to navigate this very difficult situation we're in. Thank you for everything you taught me, and those are exceedingly satisfying. And I'll tell you, even more rewarding for me are the, "I'm pretty sure your class just saved my marriage." I just reconciled my relationship with my brother who I hadn't talked to for two years because he voted for X and I voted for Y. We don't need to get into who X and Y are. And now I get thank you for finally writing a book because my VP of product didn't go to Stanford and doesn't understand what I'm talking about. So at least I bought them a book and now I've got more and more folks sending people to Leaders in Tech, which we can talk about later, which is the nonprofit I started after I left Stanford, so that more and more people can learn this from more than just a book.

**Lenny Rachitsky** (00:10:19):
Amazing. And I think what I love, you also shared this point that many people told you that that one class at Stanford Business School at GSB was made them feel like their entire college tuition was worth it from that one class, which is so surprising because it's called Touchy Feely, it has nothing to do specifically with business.

**Carole Robin** (00:10:38):
Except of course it has everything to do with business.

**Lenny Rachitsky** (00:10:41):
So to follow that thread, can you just talk about what this class is trying to do, what the goal of this class is and what actually goes on in this class? And again, people call this class Touchy Feely. I think it's technically called Interpersonal Dynamics.

**Carole Robin** (00:10:57):
That's correct.

**Lenny Rachitsky** (00:10:58):
Okay.

**Carole Robin** (00:10:58):
That's correct. Yeah.

**Lenny Rachitsky** (00:11:00):
Yeah. What is this class all about? Help people understand what goes on here.

**Carole Robin** (00:11:03):
Well, first of all, it's a quarter long class at a really fundamental level we've already really talked about what goes on there. People learn how to be more interpersonally competent or how to connect with other people in more functional ways. And what I mean by connect is learn how I need to show up in order for you to trust me, in order for you to feel closer to me, in order for you to want to spend more time with me in a leadership. By the way, this is part of the leadership curriculum I taught, in a leadership sense that makes you more likely to want to follow me because in the end, that's the question leaders should ask themselves, "Why should somebody follow me?" And you know what? You could study other leaders. Why did somebody follow Steve Jobs? Why did somebody follow Ursula at Xerox? Why did some people follow Sheryl Sandberg or why should somebody follow me? Because I'm not any of those people. So the question I ask my students to sit in and now my Leaders in Tech participants to sit in is why should somebody follow you?

**Carole Robin** (00:12:18):
Now, there are lots of reasons why people might follow you. You've got a great vision that's very inspiring. You have a product that they want to bring into the world. They think they may make a lot of money if they hitch their wagon to you. Those are all good reasons. But if you want to build a sustainable long-term legacy, then you probably want to think about showing up in a way that other people come to see you as a referent figure, somebody in their life that they say, "When I grow up, I want to be more like that." And that is a form of power. There's a lot of research that supports this, referent power. You're a referent figure, and then people are much likely to be open to your influence, and open to working harder, and open to doing some of the things that you believe are going to make you great as a whole organization.

**Lenny Rachitsky** (00:13:27):
The class is quite unusual in that there's not just a bunch of lectures and talks, there's a lot of experiential pieces where you have to do quite uncomfortable things in order to learn how to do this well. Can you share an example or two of some of the things you put people through, whatever you're able to share?

**Carole Robin** (00:13:45):
Sure. I mean, I think that we don't learn to be... And I don't learn how to connect with you by reading about it in a book, which by the way is why it took us four years to write our book because at the end of every chapter there's a, here are things you can go do with what you just learned in the reading. And likewise in the class, the lectures are scaffolding on which you can hang your experience. But most of the learning happens in these small groups called T groups. The T stands for training, not therapy. And sometimes people think they sound like therapy, and they sometimes even experience them as feeling a little bit like therapy, but that's not what they are. We call them training groups. And what happens in that group is that there's 12 participants and two facilitators, and they are, for example, given a task, I might pair two students up and say, okay, you've got 10 minutes.

**Carole Robin** (00:14:51):
Allow the other person to get to know you. And that's the only instruction I give. Okay, so now you and I look at each other and we're like, "I don't know what the heck that's supposed to mean." And then maybe I share something about myself or maybe I ask you a question or who knows what I do with that, and then who knows what you do with that? So after 10 minutes, then I stop them and I say, okay, so take a moment and recognize that you just had a bunch of choices that you actually probably never even think about. You had a choice whether you began by sharing something or you waited for the other person to be in. You had a choice whether you began with a question, which was a nice, safe place to be, or whether you began with a disclosure.

**Carole Robin** (00:15:40):
Then you had choices with regard to how you responded to what your partner did. And the whole course is about having interactions and then having the guidance and the space and the time and the focus to unpack what just happened. So now do you want to have a more conversation with this person or less? Are you intrigued or are you like, "Can I just get paired up with somebody else?" But now we get to talk about it. And then I put them into a second conversation and I say, okay, now having learned that, by the way, one of the ways we build relationships is through disclosure, through allowing ourselves to become more known. So that's a little mini lecture. And then I say, okay, now go back into your pair and see whether or not you want to make some new choices.

**Carole Robin** (00:16:33):
And then of course, that's all I always say, confidentiality is a very important aspect of all this work. So in the pair conversations, in the group conversations, I call them the Vegas Rule. What happens if Vegas stays in Vegas. And so I don't ask for any specifics, but I'll ask them for, was there a qualitative difference between the first and second conversation? And they inevitably say, "Oh my God. The first conversation is the conversation I have in the bar all the time with somebody." And the second conversation was a little more uncomfortable, but I sure feel a lot more known, and I think I know my partner a little bit more and now they've had a little taste of what it's going to be like.

**Lenny Rachitsky** (00:17:18):
Amazing example. So what I want to do with the rest of our chat is basically go through many of the lessons and insights and lectures that you give in this course. Obviously, they're not going to be able to practice the way they would practice in a class. But before we get in there, let's actually talk about, so there's this course at Stanford, and you also now have a program called Leaders in Tech where anyone can participate. They don't have to be going to Stanford Business School. Talk about what this is and how people can participate if they want to go deeper on the stuff we're going to talk about.

**Carole Robin** (00:17:47):
So Leaders in Tech is a nonprofit that two of my co-founders and I started, I guess in January of 2018. We started it with a program called The Fellows Program, which is a 10-month program that starts with a four-day retreat that's like Touchy Feely on steroids because Touchy Feely is a quarter long class, and then it continues on a monthly basis for a day or half a day a month to get the rest of what we might call Carole Robin curriculum because I also taught a course called High Performance Leadership. I also called Taught Leadership Coaching and Mentoring. So there were other things besides Touchy Feely. Then what happened was that our fellows who went through our first couple of cohorts said, because the Fellows Program is open to founders, either current or previous founders or co-founders of a company that has not gone public.

**Carole Robin** (00:18:51):
And what we're trying to do is we're trying to influence the cultures of the future of Facebook's and Google's of the world, not the current ones. And so that program has a more limited number of people that can apply to it. However, one of the things that happened was we got a lot of people who said, but I'm not a founder and I still want that. And we also had fellows who went through the program that said, what about my people, my chief people officer, my VP of engineering? So then we'd started just a four-day version of the Touchy Feely, which anybody could apply to. I mean, actually not anybody. You do have to be a manager of some kind, and you do have to be in tech for now.

**Carole Robin** (00:19:37):
So that's where people get the real on the ground experience. They all get a copy of the book, and of course, if you don't want to go through the program or it's not the right time or you want to start somewhere else, you can start with the book. But if you just buy the book and you read it and you put it back on your shelf, you're not going to learn anything. Don't waste your money. If you're going to buy the book, buy at least one other copy and give it to somebody with whom you actually want to develop a stronger relationship and read it together and do the activities at the end of every book, and then you start to get a taste of what it's like to go through the course.

**Lenny Rachitsky** (00:20:18):
So just to close the loop there, how do people learn more and apply and join this program?

**Carole Robin** (00:20:21):
Www.leadersintech.org.

**Lenny Rachitsky** (00:20:25):
Awesome. And around the time this episode comes out, there's a deadline roughly around that time?

**Carole Robin** (00:20:31):
There is. Around when this episode comes out. So we do these four-day retreats all year, so there's no deadline to apply for that, but if you're interested in the ten-month program that starts with the four-day retreat and then has all that additional stuff, then deadline for that is May one. Actually, it might even how many days? It might be April. I don't remember how many days there are in April, but it's either the last day of April or May one.

**Lenny Rachitsky** (00:21:00):
April 30th.

**Carole Robin** (00:21:01):
Yeah, there you go. So it's probably April 30th. So check it out. You have to be nominated in order to apply. Don't let that stop you. If you look at it all and you decide you want to apply, just apply and say, Carole, I listened to Carole Robin on this podcast, you told me to apply.

**Lenny Rachitsky** (00:21:23):
Okay, great.

**Carole Robin** (00:21:25):
Don't waste time trying to find somebody to nominate you.

**Lenny Rachitsky** (00:21:27):
How amazing. Okay. Or you're going to be flooded with applications.

**Carole Robin** (00:21:31):
Again, from your mouth to God's ears.

**Lenny Rachitsky** (00:21:35):
Okay, so let's get into a lot of the stuff that you teach. So you mentioned progressive disclosure, so that might be a good place to start. What's the lesson there? What is it that people get wrong? Why is that important?

**Carole Robin** (00:21:46):
So first of all, when we disclose, we make ourselves more vulnerable, and vulnerability and disclosure tend to be reciprocal. If I hold my cards really close, you're going to hold your cards even closer. So one of the things to learn to do is to experiment. And what works with one person isn't going to work without somebody else necessarily because every relationship is its own fabulously interesting and always unfolding dynamic is to experiment with allowing myself to be a little bit more known, and then seeing what happens and whether or not you reciprocate. Now, a really important concept we teach that you and I have talked about before is called the 15% rule. And what that is that we all have a comfort zone. Imagine a circle in the middle called the comfort zone, this picture's in the book, and that we don't think twice about what we say, and then there is a danger zone, which is a circle way on the outside.

**Carole Robin** (00:22:57):
So these are concentric circles if you're not watching the video, and I never in a million years say that or tell you that, but there's this really important circle in the middle, which is called the learning zone. In academia, they have to have fancy words for very easy concepts, it's called the zone of proximal development. But basically it means that's where you learn. And you have to step outside your comfort zone in order to learn anything, and especially in order to create a deeper connection with somebody. However, my students used to say, "But Carole, the minute I step outside my comfort zone, how do I know I'm not in my danger zone?" I hear this learning zone, but how do I know I didn't go too far? So we came up with the 15% rule. So step a little bit outside your comfort zone. If you step a little bit outside your comfort zone, you're very unlikely to freak yourself or the other person out.

**Carole Robin** (00:23:53):
But you'll know, you'll feel it a little bit, you'll be like, okay, I feel just a little uncomfortable saying this, but I think I'm going to try. And then depending on how you respond, then we settle into a new comfort zone, a slightly larger circle, which is our comfort zone with each other. Then we can go 15% beyond that, and that's how we learn and grow and deepen our relationship. The same thing by the way applies to feedback when we get into that later. So we have to step outside our comfort zone in order to deepen and strengthen relationships.

**Lenny Rachitsky** (00:24:27):
What are some examples of stepping outside your comfort zone, disclosing what is it that you find people maybe aren't disclosing enough of or areas they should disclose? Is it challenges they're having in their life?

**Carole Robin** (00:24:38):
Well, of course, context matters. It depends on who I'm talking to. And by the way, disclosure, I want to underscore a concept that we also very much teach, which is appropriate disclosure. If I'm the VP of marketing and I get up in front of the troops and I say, "Well, third month in a row we've lost share and I have no idea what's happening or why or what to do about it, and I'm feeling pretty crappy about myself, I'm not even sure I should be your VP of marketing." That might be vulnerable and disclosure, but it is not appropriate Vulnerability and that it's not what we're talking about. The flip side of that is that I get up in front of the troops and I pretend nothing is happening. That doesn't build my credibility either. So I can get up and say, okay, probably no secret to most of you, that's the third month in a row, we've lost share.

**Carole Robin** (00:25:39):
And man, I wish I could stand up here and tell you I know exactly what's happening and I know exactly what we should do about it, but I don't, and I have never needed you all more. Now, who would you rather follow? So I think in business, and for a very long time, leaders were socialized to, first of all, leave all feelings in the parking lot. I've got an anecdote I often tell about my very first job, which I'm happy to tell you if you want. And there's no place for vulnerability or for sharing feelings. Are you kidding, feelings in the workplace? Now, I ask you, how do you inspire anybody with no feelings? How do you motivate anybody with no feelings? How do you become seen as a real person with no feelings? Why should somebody who is a robot who is robotic follow you? And the answer to that sometimes in the valley especially is because they're going to follow you for a while because you've got a really great idea. And the minute they've got another choice, man, they are out of there.

**Lenny Rachitsky** (00:26:50):
And so a lot of this connects to this broad piece of advice you always give people is just and focus on vulnerability. You spend a lot of time teaching people just the power vulnerability, which is not intuitive. A lot of people try to move away from showing vulnerability. There's this quote I saw somewhere that "A willingness to be vulnerable makes you not less influential as a leader." Can you just talk about why that is?

**Carole Robin** (00:27:15):
Yeah, you asked me whether or not I held any contrarian views and I said, yeah, that's one of them. I actually think that a leader who is willing to be appropriately vulnerable is a stronger leader. And so I'll give you this short example of what happened to me because it encompasses a lot of what we've been talking about. So in 1975, I went to work for the largest industrial automation company in the world as the first woman in a non-clerical job. I was a sales engineer, and yes, I am old, but the dinosaurs were not roaming the earth. And the first thing I learned was you leave feelings in the parking lot, whatever you do, you never talk about your feelings or express feelings in the workplace. It's unprofessional. I was like, okay. I got pretty good at it. In fact, I got very good at it.

**Carole Robin** (00:28:13):
Ironic, given that I eventually became known as the queen of putty-feely at Stanford. But at the time, I got very good at it. I'm not a career academic. I've had six different careers. And 10 years later I'm at an off-site and I've been promoted many times, I'm now running a $50 million region. I've got a half a dozen guys that work for me. And yes, ladies, if you're listening, I did finally fix that, but at that point, I still hadn't quite fixed it. And we're sitting there and I had an idea, it doesn't matter what it was, but I got a little excited about it and I got crickets and I got a little more excited and I got crickets. I was like, "Come on you guys, this could be really cool. Why can't you see how cool this could be?" And one of my guys leans in, looks at me and says, "Carole, is that like water in the corner of your eye? Oh my God, are you going to cry?" And then he says, "Are you human after all?"

**Carole Robin** (00:29:09):
Are you human after all? And then I burst out crying and I tore up our agenda and I said, "You don't think I'm human?" I don't think there is anything more important for us to spend our off-site talking about than that. And we spent the next two days talking about who we were, why we were there, what we wanted, what was important to us, how we could help each other. To this day, I believe that was the day I became a leader. To this day I know for a fact any of them would follow me anywhere.

**Lenny Rachitsky** (00:29:40):
To help people build this muscle and start to practice this to try 15% disclosure, try to be a little more vulnerable. Is there any other examples or just tidbits you can share of like, here's something you should start doing more and more?

**Carole Robin** (00:29:54):
Let's start with you can start admitting mistakes, especially when everybody knows you made one, you actually lose a lot more credibility by ignoring it. And you can start again 15% by experimenting with sharing what's going on for you, particularly with regard to feelings a little bit more often. So there's a recent course is called Touchy-Feely emphasis on the feely and not the touchy. And that's because so much of our ability to develop this competence comes down to the appropriate use of feelings. That's why a vocabulary of feelings, how sad is it? We had to develop a vocabulary feelings because that's how hard it is for people to even access what they're feeling. So there's a vocabulary feelings in the syllabus, in the course, in the appendix of the book. Every member, every person who ever goes through a leaders in tech program gets it. And it starts with allowing yourself to be known, not just in terms of facts and... Feelings give meaning to facts.

**Carole Robin** (00:31:12):
Let me give you another example. If I tell you I went ziplining, well, that's interesting. Maybe you learned something about me. Maybe you start to make up all sorts of interesting stories about me. But if I tell you I went ziplining and I was terrified, but I went because I felt coerced by my family and I didn't want to be left alone back and then miss out. Well, you learned a lot more about me, didn't you? One of my most satisfying moments at the very first Leaders in Tech retreat we ever did was of a former student of mine who had taken Touchy Feely 15 years before, and who said, based on everything I learned 15 years ago from Carole, I couldn't imagine what I would learn if I came back. So I'm back. And he said, but Carole or no Carole, I will not sit around for four days talking about how we're all crushing it. I will leave.

**Carole Robin** (00:32:15):
I was like, "Oh," I was so proud. And now there are times when a leader does have to stand up and say, yeah, we're crushing it. So another really, really important thing that people don't understand is that all of this is very nuanced and very context dependent, and most people unanswered Tell me what to do when X happens. Well, did X happen with this person or this person? What relationship do you have with them in the first place? Are there 20 people in the room of 250? Is this being recorded? There's just so many different things. Who's going to have access to it? There's so many things that you have to consider, and especially today, I know I'm old and this will sound predictable, but I am not a social media fan. I think it has done more to destroy strong relationships and to destroy people's ability to even learn or think about what it takes to have a great relationship.

**Carole Robin** (00:33:26):
Anyway, we could do a whole podcast on that. I have a former Leaders in Tech fellow who sent me this fantastic, here's another great example, sent me an email and maybe he called me, I don't remember. It doesn't matter. He said, "So I had my all-hands meetings are every Monday morning, on Friday, I found out we had missed a major deadline on a product release, and I spent the entire weekend just furious, pissed off, wanting to fire a lot of them," and he said, "And then on Sunday afternoon, I remembered part of what you taught us was that anger is often a secondary emotion and often under anger is either fear or hurt. And then I realized, oh yeah, I'm actually feeling pretty scared here, that nobody is as worried about this as I am."

**Carole Robin** (00:34:24):
And so he said, "So on Monday morning, instead of getting up and blasting them all as I was prepared to do, I got up and I said, so, gang, I am deeply worried and afraid that I'm the only person here who is as concerned about this missed deadline as I am and what it's going to mean to our customers." And he said, "I have never had my troops rally to fix something faster." So appropriate use of feelings is something most people don't know how to do. They don't even know how to access the feeling. I told this particular anecdote about anger being a secondary emotion at a very big workshop a number of months ago, and a woman walked up to me and said, "Wow, thank you so much. I've never understood that my husband Carries so much fear and so much hurt because he only ever leads with anger. It never even occurred to me something else might be going on." And anger is a distancing emotion, whereas hurt, fear, sadness, loneliness, happiness, joy are all connecting emotions. So those are kinds of things people learn when they come through our programs.

**Lenny Rachitsky** (00:35:47):
Oh, man, you're blowing my mind already. I can see why marriages are saved by a lot of these things you teach. That's a really profound point you're just making there that anger is a secondary emotion. Really what's going on is you're afraid or you're hurt. Is there anything more you can add there because this feels very important?

**Carole Robin** (00:36:06):
That is normally what's going on, except we've all been socialized not to be vulnerable, especially in business and naming any of those other things makes us feel vulnerable. So somehow being angry doesn't make us feel vulnerable. That's the okay emotion, as long as you express it in an appropriate way, but it's a distancing emotion. What a disservice to everybody in business. What a disservice to professional learning, to not help people understand that anger is a distancing emotion and that there are other emotions that are appropriate and that are connecting.

**Lenny Rachitsky** (00:36:46):
This connects so beautifully to your first point we talked about of being vulnerable and disclosing more and how I completely see how if you were just to share, I'm afraid of this, how that brings people closer to you and feels like they will trust you more versus you not sharing that.

**Carole Robin** (00:37:03):
Right. It connects to something else. You and I talked about one of the biggest gifts I think people get out of taking Touchy Feely or going through the Leaders in Tech program or even reading the book is that they learn that they hold some mental models, some beliefs and assumptions. If I do this, that will happen, or if I don't do this, this will happen. And those are beliefs and assumptions that we develop very early in our careers like I did. Whatever you do, you leave your feelings in the parking lot. And it served me really well initially. If I'd burst out crying two months into the job, I'd have never ended up running a $50 million region and then it over served me, and then it cost me because I never had a reason to update it.

**Carole Robin** (00:37:56):
Because I never realized I was paying a cost for continuing to hold that belief that drove my behaviors. And mental models, then we developed them very early and they're grooved and we need new experiences in order to even believe that they're maybe subject to testing. Gee, I will forever be grateful to this fellow who said, "Oh my God, are you human after all?" I was like, how did this ever happen that I became seen as not human? Again, we go back to some of the stuff we talked about earlier, which is that leaders, if a leader doesn't show up with a willingness to update their mental models and their beliefs, they're certainly not going to inspire anybody else to do that.

**Lenny Rachitsky** (00:38:59):
I'm glad you got here because this is exactly where I was going to go next, is this mental model challenge we run into where we develop these mental models early on and then they end up hurting us later in life. Are there common mental models people have that hurt them as they grow? Or is it very particular independent on people's experience?

**Carole Robin** (00:39:17):
I mean, there are some that are pretty tried and true. I mean, the first one is, if I tell you more about me, you'll take advantage of me. Or if I am vulnerable with you or disclosing, you'll think I'm weak. And inevitably, somebody has had a time in their life where that has been true, and maybe it was true a lot, but then they decide that's the only outcome that's ever possible as opposed to part of growing up and becoming more mature is differentiating and being more discretionary in who we open up to and how we open up to them. It's like I have a colleague who often says, we have to think about these things as dials, not switches. It's not an all or I don't tell you everything or nothing. I don't share every single feeling I've got or none. It's a dial and you move it at 15% rate.

**Carole Robin** (00:40:22):
Another mental model people hold, and this becomes a huge learning for people who go through our programs, is people think if I give you feedback, it's going to ruin the relationship. It's going to weaken the relationship. Whoa, that's really common. Even though everybody's always wanting, I want more feedback, I want to know how it can be better, but everybody believes that giving feedback is going to create a problem. And that's because most people have in fact been on the receiving end of feedback poorly given or they've given feedback in a not very good way. They've stepped in piles of doodoo, yes. And it does not mean feedback ruins relationships. It means feedback the way you've always seen it done or done. It ruins relationships pretty important. And then one of the things that we arm people with, I think one of the most powerful pieces of learning that people get is learning how to give feedback in a way that is going to build relationships as opposed to, and it's going to build a relationship.

**Carole Robin** (00:41:29):
If you see that my reason for wanting to give it to you is that I'm invested in you and in us it's similarly, we hold mental models about expressing what we call pinches, which are just those little things that people do. Then we're just like, eh, I'm not going to make a big deal out of it. I'm not going to say anything, but mental model is, eh, it's a small thing. The problem is, if I'm doing something that's mildly irritating and you don't tell me, then what am I going to do?

**Lenny Rachitsky** (00:42:01):
You're doing it.

**Carole Robin** (00:42:01):
And then are you going to get less irritated or more irritated?

**Lenny Rachitsky** (00:42:02):
More irritated.

**Carole Robin** (00:42:04):
Yeah. Now, if I get less irritated or it doesn't change, then you're right. I shouldn't say anything. But if I have the wherewithal to notice, this is why we talk about two antenna, which I'll come back to notice that I'm getting more and more activated, more and more irritated, then it's really important for me to say something. And by the way, address it while it's still small and then it won't get big. That's why we call it talk about a pinch before it becomes a crunch, and then it becomes a much bigger deal. But most of the time we say it's not worth it. So I always tell students, okay, substitute the pronoun, substitute the word it for I, you, we. I'm not worth it, you're not worth it. We're not worth it. And then ask yourself again whether it's worth raising.

**Lenny Rachitsky** (00:42:56):
**Carole Robin** (00:44:00):
Yeah. And in fact, it is fundamental to giving feedback.

**Lenny Rachitsky** (00:44:03):
Well, awesome.

**Carole Robin** (00:44:04):
So they're very related. You were right on the money. And you know what, let me just take a moment and talk. I mentioned the two antennae, and this is in the book, but we're all equipped with two antennae. One is tracking what's going on for me, my internal antenna. The other one is trying to pick up signals on what might be going on for you. And first of all, recognizing those two antennae exist. Second of all, learning how to hone our ability to pick up subtler and subtler signals make us more interpersonally competent. That's also why I'm a big believer in meditation and awareness. So, anyway, if we now fast-forward to your question about how to give feedback well, which has to do with understanding the three realities. It starts with in any exchange between two people, there are three realities. There is my intent, how I see the world, my background, my history, there is what I do or say or don't do, verbal or nonverbal.

**Carole Robin** (00:45:09):
So my reality is reality number one, my behavior, verbal or nonverbal is reality number two. And whatever happens on your end is reality. Number three, the impact of what I've said or done, how you see things, your background. So there's these three distinct realities. And the trouble we get into when we don't recognize that those three realities exist is we don't understand that we are only privy to two out of the three. So I know what's going on for me, and I know what I did. I have no idea what happened on your end. You know what I did and how it impacted you. So your two are... The only one we share is the one in the middle in common, the behaviors right now, we draw a metaphorical net between reality number one and reality number two to help people understand. And anybody who's ever taken Touchy Feely in no matter which context knows the saying, "Stay on your side of the net."

**Carole Robin** (00:46:28):
Meaning stick with the two realities you know because we get in trouble the minute we start thinking we know the other person's reality. Right? So I've told this anecdote many times, it might even be in the book, but I come home... I'm sorry, my husband comes home after a very long day in the valley. He was an executive. I've got two little kids, infant and a 2-year-old. I've been waiting for him to come home. I come running into the front room. In those days, by the way, we still had newspapers. He's reading the newspaper and I say, "Oh my God. Oh my God, you're home. I can't wait until I tell you what happened tonight. I can't believe what happened. Why are we living in Palo Alto, Jesus Christ? I don't want to raise kids in Palo Alto. It's a terrible town. I wish that new nursery school, it hasn't even opened. It's already closed. Oh my God."

**Carole Robin** (00:47:18):
And then he says, "mm-hmm, great. "So then I say, you're not listening. And by the way, people have been taught iMessages, I feel that you're not listening is exactly the same thing, it doesn't have a single feeling word in it. I don't know whether he was listening or not. I'm over the net. I'm in his court unless I'm in his head. I don't know whether he was listening or not. But then he says, yeah, I was listening. You're all worked up. You went to that new nursery school. Actually it's more like this. Yeah, you're all worked up and you went to that new nursery school hasn't even opened. You're all worked up. Now I get a little bit more activated and I say, "How can you not care?" First of all, he didn't say, I don't care, did he? I don't know whether he cares or not. And by the way, "How can you be so insensitive?"

**Carole Robin** (00:48:13):
And I feel that you don't care and I feel you're being insensitive are not feelings. They're attributions and imputed motives, and that's where we make our biggest mistakes when it comes to feedback. And what that does is it makes the other person defensive. So calling my husband insensitive is the most insensitive thing in the world because he's one of the most sensitive people on the planet. So it wasn't until I learned to stay on my side of the net and say, so when I speak and I'm all worked up about something and the only thing I get back from you are either a grunt or an affectless repetition of what I just said, that's reality number two, anybody watching the video would say, that's what happened, I don't feel heard. He can't say, yeah, you do. And when I don't feel heard, I feel hurt and I feel distanced.

**Carole Robin** (00:49:11):
And the reason I'm telling you that is because I can't be here for you in the way I want to be when I feel that way. So the formula is when you do insert behavior, I feel pull out the vocabulary of feelings and I'm telling you this because, or I'm hoping the outcome of you knowing this is. And so then what happened is he said, "Well, if you want my undivided attention, then you've got to give me some time to unwind when I get home." What a reasonable request. I said, "Well, how much time do you need?" He said, "I don't know, half an hour." "I was like, half an hour?" I've been counting the minutes. How about five minutes? We settled on 15. And by the way, that is the purpose of feedback. When it's constructive feedback, move into a problem-solving conversation, don't change the other person. Move into behaviors that will work better for both of you.

**Lenny Rachitsky** (00:50:14):
Amazing. And this structure, so the structure you just shared, and this is similar to nonviolent communication structure?

**Carole Robin** (00:50:14):
Yes.

**Lenny Rachitsky** (00:50:21):
Okay, cool.

**Carole Robin** (00:50:21):
It is.

**Lenny Rachitsky** (00:50:22):
So there's books people can read on this-

**Carole Robin** (00:50:23):
Right. Ours came before, but that's okay.

**Lenny Rachitsky** (00:50:26):
Oh, wow. Okay. Good to know.

**Carole Robin** (00:50:30):
I will say anything that spreads the word and anything that helps people learn how to engage with each other in ways that build relationship, I'm all for.

**Lenny Rachitsky** (00:50:42):
I love that attitude. Okay, so the structure again is just when you do some behavior, I feel an emotion. By the way, is there a flyer or handout? I think the book has these of just emotions. Okay, cool. And feelings.

**Carole Robin** (00:50:58):
The vocabulary of feelings is an appendix in the book.

**Lenny Rachitsky** (00:51:01):
Okay, great.

**Carole Robin** (00:51:02):
As is the formula.

**Lenny Rachitsky** (00:51:04):
Amazing. Okay, great. So by the book, if you want to get really good at this stuff, is there anything online we can point people to, or?

**Carole Robin** (00:51:10):
We got a picture of the... I'll send you a couple of slides.

**Lenny Rachitsky** (00:51:14):
Perfect.

**Carole Robin** (00:51:16):
And then you can just say, here are the slides.

**Lenny Rachitsky** (00:51:17):
Amazing. So we'll link to that in the show notes. And as you talk through all of these lessons and pieces of advice, it makes so much sense why this is something you need to do. Because I imagine what's happening in the class here is you do this with someone and then you hear the reality and it often surprises you. Right?

**Carole Robin** (00:51:36):
Exactly. Because often we say it takes two to know one, I don't know what impact I'm having on you until you tell me. And I have to be willing to be a little vulnerable to ask. And if we go back to that first activity that you asked me to describe way at the beginning, then we put them back in pairs and we say, okay, now that you've learned a little bit about feedback, tell your partner what they did that made it easier for you to disclose more and be more willing to be more vulnerable and/or what they did that made it a little harder. And right there in the moment, you learned something about yourself that you might never have known. Somebody says, you looked away as I was talking, you might not have even known you did that. You looked at your watch. And I love this.

**Carole Robin** (00:52:34):
One of my greatest moments when I was teaching was that I asked a question. I was teaching in a big lecture hall at the law school, and they didn't have any clocks on the wall. And I asked a question and a student began answering, and I just glanced at my watch just because I was trying to figure out where I was in terms of when I had to wrap up. And he walked up to me after class and he said, "Professor, I felt disrespected when you looked at your watch while I was answering," I hugged him. Well, first I asked him if it was okay, "Is it okay if I hug you?" And then I hugged him.

**Lenny Rachitsky** (00:53:12):
And I love how so much of this is like, we never get this feedback in real life. No one ever tells us this thing you did is distracting them, annoying them, making them feel like they're not being heard.

**Carole Robin** (00:53:22):
And then guess what? Then he leaves and then somebody says, how was that? He says, oh, she's really disrespectful. And then pretty soon nobody's ever even been there. But my reputation is that I don't respect students. That's how stuff gets out of control.

**Lenny Rachitsky** (00:53:36):
Yeah. And you wish people would tell you, right? Everybody wants this, but it's so hard and uncomfortable to tell anyone negative feedback.

**Carole Robin** (00:53:45):
Which by the way, I never used the word negative when it comes to feedback.

**Lenny Rachitsky** (00:53:48):
Okay. Okay.

**Carole Robin** (00:53:50):
So feedback is either constructive or complimentary. Constructive feedback is there's something you're doing that is problematic, and the purpose of it is let's move to a problem solving conversation like with Andy and me. The purpose of complimentary feedback is, wow, that's the third time you've handed in that report early and completely, and you even went above and beyond and did this and this. I can't tell you how much I appreciate that, how lucky I feel that you work for me. And if I'm telling you this, because if there's ever something that you want that we're not giving you, I want to make sure you know that I want to talk about it. By the way, same formula. Now compare that to nice job, thanks, right? All feedback is data. So all feedback is positive. More data is always better than less data.

**Lenny Rachitsky** (00:54:46):
I agree. That's a great lesson there. To maybe make this even more practical for listeners that are maybe working on a product and say they have to give feedback in a product design or to a colleague who did something wrong. Is there an example that you could share of just in the workplace.

**Carole Robin** (00:55:03):
I'm glad you asked that, because first of all, we're not talking about performance feedback and we're not necessarily talking about feedback on a task. What we're talking about is interpersonal feedback. And the reason it's so important is that if you don't take care of that, then that other feedback becomes unresolved. When you leave the interpersonal stuff unresolved, then the other feedback doesn't go well because the real problem is that I'm still pissed off that you never answered my phone call. So now I'm going to make it all about how this feature really is never going to work. Here's an example. Somebody walks into... A manager or a team leader or whatever, walks into a room meeting, starts a meeting by say, so I want to make sure we hear from everybody. I want to make sure that we have a very full conversation.

**Carole Robin** (00:55:58):
I want to talk about X. And now let's say that I start to say something and before I have finished, he says, yeah, and the other thing we should talk about is blah, blah. And then a little later a similar thing happens. I start to suggest that there's another way to look at this and he turns back to somebody else, what somebody else had said and never says anything in response to what I just said. And I'm being very specific here, very behaviorally specific. And then after a while, what happens to me is I feel less and less inclined to offer up anything. Now, maybe he doesn't care, but if he cares because he started by think he wanted to hear from everybody, then I'm not being very caring if I don't tell him what the impact was of his behavior. So I don't call him out in the middle of the meeting because I don't want to embarrass him, but I might go to his office later and say, "So, John, do you have a few minutes?" I have an observation.

**Carole Robin** (00:57:07):
I've got something that I experienced that you might want to know. "Sure, Carole." So when I started to say x, you did y. When I started to say z, you did it. I said, and when that you started the meeting by saying you want to hear from everybody. When that happened, I felt less and less... I felt shut down, and I felt less and less inclined to offer up my opinion. Maybe that's okay, but I wondered whether you knew that that was the impact. And I'm telling you, because as far as I am concerned, in that meeting, you did not accomplish your stated desire. Your desired outcome was to hear from everybody. And after a while, I just gave up trying to give you my...

**Lenny Rachitsky** (00:57:52):
Well, it's like you need to solve these pinches as you described early, because all of this comes back to these are relationships, they matter because that's the way we get everything done. And if you just ignore these things, your relationship's going to be hurt. You're not going to be able to accomplish the things you want to accomplish. It's almost like something you need to do even though it feels hard.

**Carole Robin** (00:58:14):
Absolutely. And that's why I say that feedback builds relationships because by the way, if I'm doing something that I'm, I wish I hadn't done, it's not that I'm going to be like, "Oh yeah, I'm so glad I did that." But if I recognize that it would've been easier for you not to say anything because it would've been more comfortable, but because you cared about me, you actually said something to me, that talk about something that builds relationship.

**Lenny Rachitsky** (00:58:45):
Coming back to the antenna as you described feels like one of the most important skills you teach people is to build this antenna both of yourself, which is you could to think is easier, but maybe often not, but also understanding how the other person feels. And you have this concept of the art of inquiry and how powerful that is. Can you just talk about what that is?

**Carole Robin** (00:59:06):
Oh, yeah. I'm glad you brought that up, because inquiry is a fundamental component of strong interpersonal relationships for a couple of reasons. And first of all, let's stop and note, inquiry comes the root of the word inquiry is quest. Quest means to be in search of and not knowing what you're going to find, not the way most people think about questions and inquiries. Most of the time people ask a question to confirm a hypothesis. "Don't you think you're just trying to discredit John by doing that?" That's not inquiry. "Don't you think you'd just be better off letting that go?" That's not inquiry. And by the way, another thing to note in artful inquiry, first of all, you have to suspend judgment. You cannot be curious if you've already decided you know what's going on someone else. You can always go back to being judgmental, but you got to suspend it long enough to see if there's something for you to learn.

**Carole Robin** (01:00:12):
And then the way you ask the question matters, questions that can be answered with yes or no are typically limiting questions and aren't going to be very productive. Questions that start with why, why did you do that? Are going to make me defensive? Or worse, why are you crying? Well, is that going to make me want to tell you more about why I am upset or why are you upset? Right away I'm going to go into, "Oh no, I'm not upset. It's not a big deal." Or I'm going to go into a place that's not necessarily very productive because this reminds me of how my mother always scolded me. Neither one is going to be very productive. So questions that start with what? What's this about? What's going on? Where is this manifesting? When did you see this happen last? How might we go about unpacking what's going on? Where is this happening most? When, where, how, stay away from why. And it's a whole art.

**Lenny Rachitsky** (01:01:14):
Something else you teach people and you're big on is that people can actually change themselves. I think a lot of people might feel like, I'm just not good at this. I'm not good at giving feedback. I'm not good at maybe asking questions. I'm just like, I don't know. Talk about what you found about the change people see and why it's actually possible and how.

**Carole Robin** (01:01:35):
Well, for starters, to any of your listeners, one of my very favorite authors is Carol Dweck who wrote a book called Mindset and you put a word yet at the end of any of those, I don't know how yet, I'm not like that yet, changes the meaning of the whole thing. And by the way, talk about updating a mental model, instant update of a mental model. And the other thing that I'll say is we are all capable of changing our behavior. We cannot change our personality. We are born wired with personalities. I am very outgoing and extroverted as might come as a shock to all of you. And you know what? When I overdo it, I suck all the oxygen out of the room and one of the behaviors I had to learn, and it takes discipline to engage in was zipping it a little more so that others could speak up more.

**Carole Robin** (01:02:40):
And my incentive was that I actually really wanted to learn more about what was going on for them and I wasn't going to learn anything unless I shut up long enough for them to tell me. So behavior is something we all have control over. Now when I give somebody feedback and they tell me, well, I can't do that. If I've asked them to change a behavior, then I'll say, I'm sorry, I don't think I can accept I can't. I will accept I don't want to or I don't have it, but I don't have to accept I can't. So I'd just like you to own the fact that it's a choice that you're making.

**Lenny Rachitsky** (01:03:25):
Kind of along those lines, something, I don't know if this is from your book, but I saw somewhere you said that it's possible to say almost anything to almost anyone if you have the necessary skills. How do people build these skills? I know we talked about a lot of this through the structure focusing on your side of the net, but just how do you avoid people getting defensive?

**Carole Robin** (01:03:43):
First of all, let's make sure that we point out that what we're doing here is we're shifting probabilities of success, we're not guaranteeing anything. And let's say that you do your best and you stay on your side of the net and you give somebody feedback and they go bonkers and they call you all kinds of names and they write... Now there's an opportunity to learn something else that everybody learns in these programs, which is called repair. How do you repair when something goes sideways? Because no matter how good you are, no matter how skilled you get, no matter what your intent was, sometimes it won't work. And then you've got to know how to repair. And that's why, remember I told you that our facilitators have a unique set of skills? And that's because they have to allow messes to happen otherwise nobody's going to learn how to repair. And repair often goes back to some of what we've already talked about. Let's start with I come in the kitchen, my husband's struggling. I say to him, "Can I help you with that?" He says, "Don't tell me what to do."

**Carole Robin** (01:05:04):
I'm sure none of your listeners can relate to this story. And I say, instead of, "I wasn't trying to tell you what to do, I was just trying to be helpful. What a kind of way to respond to my offering help is that?" I say, "What did you hear me say?" One of the most powerful things you can do when somebody responds in a way that feels very unexpected and out of whack with what you just said is go back to, "What did you hear me say?" Because nine times out of 10 what they heard is not what you said. He said, "I heard you say I didn't know what I was doing." Now, by the way, it didn't matter. That's not what I said. And I didn't say, that's not what I said. I said, "Wow, really glad I asked, because now that I understand that that's what you heard, I understand why you reacted the way you did." And I said, "Let me try it again."

**Carole Robin** (01:06:04):
One of the ways that I show somebody that I love them is I offer to help and what would you like me to do if in a situation like this when I see you struggling? He says, "Wait for me to ask." And that was 25 years ago, and that has served us very well because we've been married 37 years, 39 years. And if we go back to feedback, you give somebody feedback, they get super defensive. By the way, net jumping invites net jumping, so they're likely to net jump too. And by the way, the minute you label somebody or you're over the net. In fact you sent me something that was really interesting that I wanted to find here because you said "Nobody is born with genes for being rude or self-involved." Well, guess what?

**Carole Robin** (01:06:56):
Rude and self-involved are labels that is not behaviorally specific. So calling somebody rude or self-involved is just going to make them defensive. But saying, I was interrupted three times, and I'm telling you this because you said you wanted to hear my opinion and I just thought you should know that I was put off by being interrupted, much less likely to incite defensiveness.

**Lenny Rachitsky** (01:07:34):
Absolutely. Just hearing what actually happened, staying on your side of the net.

**Carole Robin** (01:07:38):
Exactly.

**Lenny Rachitsky** (01:07:39):
So again, this always comes back to I could see this being so effective doing this in a class versus just listening to us and like, okay, I'm going to start staying in my side of the net and I'm going to prepare relationships. Are there any other examples of exercises you do in the class that might be helpful to people just to hear how you learn some of these things?

**Carole Robin** (01:07:57):
Every chapter in the book has a section at the end called Deepen Your Learning and those deep in your learning sections, every single one of them has a suggested activity, something you can go do, and some of those come from some of the things we do in the classroom. So that's one place to start in terms of trying to find very tactical and practical ways of applying some of this. The other thing that we often do, I often do in leaders in Tech, I used to do this less at Stanford because they did a lot of this in their T groups and they were actually in real time with each other putting everything they were learning to use. But sometimes with my execs in Leaders in Tech, I will, for example, put them in a trio and I will say to you, so Lenny, I want you to think of somebody who you would like to give feedback to and I want you to tell me what's the behavior they're engaging in?

**Carole Robin** (01:09:04):
How does it make you feel? What would be behind you wanting to tell them? What would be your desired outcome to the conversation? Then I become you, you become your difficult person because you know them and I don't, and we role play because you've now told me what you need, what you want, what's going on for you, and then you have to play your difficult person as well as you can. The third person's usually the observer who pinch hits and says, "Carole, I think that was over the net." "Carole, I don't think that was a behavior." And by the way, we say, I feel insert feeling, nine times out of 10 people say, I feel that, or I feel like, I feel that you don't care is not a feeling.

**Carole Robin** (01:09:56):
I feel like it doesn't matter, is not a feeling. I feel that you're not committed is not a feeling. In fact, they're all over the net. You're almost guaranteed to be over the net when you start I feel and put in like or that, guaranteed. Very easy hack. I feel pull up vocabulary feeling, you can't say grammatically correctly. I feel that sad or I feel that angry, or I feel that irritated or I feel like disappointed, doesn't work.

**Lenny Rachitsky** (01:10:28):
This is amazing marriage advice going to, I need to remember these things.

**Carole Robin** (01:10:34):
Yeah. Many married couples have bought the book together and read it together actually, which is cool.

**Lenny Rachitsky** (01:10:41):
There's a few other things I want to touch on that I love. One is a tip that you share. You call it advise hinders relationships.

**Carole Robin** (01:10:49):
Oh, I'm really glad you asked me about that because two things, a couple of things. First of all, leaders often believe this is another mental model that they have to have all the answers, and that is actually a pretty, it's not a very productive mental model or belief because first of all, puts a huge amount of pressure on the leader. Now suddenly I always have to know and what happens when I don't know. Second of all, I believe a leader's job is to ensure the best answer is found. It doesn't matter whether it comes from me or anywhere else in the organization. It also allows for the possibility that somebody else may have a better answer than me. And a really, really good solution has been squelched and never surfaced because people are afraid to say, well, I see it a little differently. What if we did this?

**Carole Robin** (01:11:50):
We had a or disaster as a result of that. The other thing about advice is that it creates even bigger power differentials between people. So if you're the leader or you're in the higher power position to start with, then giving me advice is only going to make me feel even lower power as opposed to, well, let's think about this together. Let's be thought partners. Often when we give advice, it's a good thing to stop yourself and ask yourself, "Who am I doing this for? Am I doing this for me so that I can puff myself up with everything I know or am I doing it for you because this is really going to help you and make you better?"

**Carole Robin** (01:12:34):
Nine times out of 10, being a thought partner as you explore the various options and coming to your own solution is both going to help you develop more, and then you're not going to have to come ask me again if the only time you ever learn is when you come ask me and you don't go through any of the work or figuring out how I got to that answer, well, then I've just made more work for myself.

**Lenny Rachitsky** (01:13:03):
**Carole Robin** (01:13:09):
Yes.

**Lenny Rachitsky** (01:13:09):
Yeah. Where basically as a manager, people are always trying to put monkeys on your back to have you solve their problem, and your job as a manager is to keep the monkeys on their own backs and help them.

**Carole Robin** (01:13:19):
Yes, and I'm glad you brought that up because people then have become so used to the quick shortcut is you'll just give me the answer. First of all, you have enabled powerlessness. You certainly haven't helped them learn and grow. If you at all think your job as a manager is to at least sometimes do that, and sometimes people will say, "Can't you just give me the answer?" And then I always just say, I could and here's why I'm not going to because I don't think that'll serve you because that's not my job. My job isn't just to give you the answers. My job is to turn you into somebody who eventually will just know what the right answer is.

**Lenny Rachitsky** (01:14:03):
But just give me the answer. Does this apply to friendships also? I know often people come to you as a friend, I need some advice on this. Does this apply as well? Often try not to give advice, or is it a different dynamic there?

**Carole Robin** (01:14:20):
Well, some of the same power differential can happen. I think chapter four in the book is about two guys who were good friends and one of them is always trying to give advice to the other one. First of all, it can be annoying if you didn't ask for it. So I certainly wouldn't give advice unless somebody asked for it, and I might not immediately jump to the advice, I might want to explore. What have you already thought about? How have you already approached it? Where are you stuck? I might ask more questions before I immediately go into advice because by the way, nine times out of 10, you end up giving advice on something that's not really what the person was worried about or wondering about. So first go to inquiry. You can always come back to advice.

**Lenny Rachitsky** (01:15:21):
I find that every time I try to resist or I make myself resist giving advice and instead ask more questions, every single time, I realized, okay, I had no idea what they were actually looking for or what was going on, but it's hard to do. I'm just like, here, I just want to tell you, here's the thing.

**Carole Robin** (01:15:39):
Totally. Because you know what? It's another mental model. I serve you best by just giving you advice when you ask for it, that's the loving, caring thing to do. Well, it's a mental model. Try testing it and seeing whether or not it really turns out to still be valid.

**Lenny Rachitsky** (01:15:58):
And so maybe the more correct mental model is how would you describe it that it's often better to help the person figure it out, or is it that you just often don't actually understand what's going on?

**Carole Robin** (01:16:09):
The best thing to do first go to inquiry. Because by the way, I also, as you might imagine, I tend to err very much on the side of transparency, and so I'll say, man, I got all kinds of things going on in my head about what I think would be great for you to do, and I'm going to resist that because I, first of all may or may not hit the mark, so I'd really like to understand more. And second of all, I wonder if in the end be even more fruitful if we explore different things together.

**Lenny Rachitsky** (01:16:46):
Just a few more questions. One is, so we have this segment on the podcast that I call Failure Corner, where people share failure in their career and what they learn from it, and you have a really constructive way of thinking about failure with this great acronym. Can you talk about that?

**Carole Robin** (01:17:02):
The acronym is A-F-O-G, another F-ing... I don't know your audience well enough. Don't want to offend anybody.

**Lenny Rachitsky** (01:17:11):
Go for it. If you feel like-

**Carole Robin** (01:17:12):
Another Fucking Opportunity for Growth. Every student who ever took a class from me, every client who I have ever coached, every participant who's ever gone through Leaders in Tech knows that acronym because my question, when something has gone wrong or a person has experienced a failure, my first question is always, so what did you learn? Because there's always a lesson, and then usually what follows is, yeah, you just had an AFOG. And as a person who's had a lot of AFOGs throughout my life, it puts it in perspective. I like the perspective that it offers, so it's not the end of the world. Sometimes AFOGs are more painful than others. Some AFOGs take longer to recover from than others. Most of the time they're recoverable, particularly if I've invested the energy in really unpacking what there was for me to be to learn.

**Lenny Rachitsky** (01:18:27):
Yeah. So the advice here is when something goes wrong, when you fail, think of it as another fucking opportunity for growth, AFOG.

**Carole Robin** (01:18:27):
Exactly.

**Lenny Rachitsky** (01:18:27):
Okay.

**Carole Robin** (01:18:35):
That's exactly right.

**Lenny Rachitsky** (01:18:37):
To even go full circle to where we started building exceptional relationships, building robust relationships. In the book, you have this checklist of just how to build an exceptional relationship. I know you don't have all this in your head, whatever.

**Carole Robin** (01:18:49):
Actually I probably do.

**Lenny Rachitsky** (01:18:50):
You probably do. What's on this list of just things you can do to build exceptional relationships?

**Carole Robin** (01:18:57):
Well, you can go back to the fact that there are six characteristics of exceptional relationships, and actually those are the characteristics that are present as a relationship is moving down this continuum that we've talked about. And the more each of these exists, the farther down the continuum you are. So the first one is I'm better known by you, and of course there's skills involved in how do I allow myself to be known. The second one is, I know you better and there's skills involved in getting to know you better. We've talked about many of them. The third one is we trust that our disclosures won't be used against us. The fourth one is we can be honest with each other. That's where all the feedback comes in. The fifth one is we know how to resolve conflict productively, and the sixth one is we are committed to each other's learning and growth. And when all six of those are present to varying degrees, you've moved farther down the continuum.

**Lenny Rachitsky** (01:20:00):
You wrote somewhere that you know your relationship has become exceptional when you and the other person don't have to hide important parts of yourself and can deal with major issues even if it feels scary.

**Carole Robin** (01:20:10):
Yep. I did write that somewhere and I stand by that.

**Lenny Rachitsky** (01:20:15):
If you zoom out from all of your work and teachings, are there any overarching themes that continue to come up that you think are important for people to take away from this conversation?

**Carole Robin** (01:20:28):
Well, for starters, we're all works in progress, which means every relationship in your life is a work in progress. Because if I'm a work in progress and you're a work in progress, then by default so is our relationship. And so remembering that what worked with you two years ago may or may not work for you now because we're different people. So I think that's a biggie. I think stopping and becoming aware of what are the mental models that are driving these choices that I'm making, every behavior has in front of it a choice. If we stop long enough to become aware of it and in front of every choice, there's some belief. So I try to march myself back from the result to the behavior, to the choice, to the mental model that drove it or the skill or lack of skill.

**Lenny Rachitsky** (01:21:36):
Something that we didn't talk about at the beginning of this because it might distract people, but you've been dealing with Long COVID for almost two years at this point. Where are you at with it? How are things going and is there anything you've learned from this unexpected part of your life?

**Carole Robin** (01:21:54):
It's given me an opportunity to live a lot of what I teach. So I always taught in my leadership classes that the worst thing a leader can do is make an organization too dependent on them. If you care about building a sustainable long-term organization and a legacy, then it behooves you not to make the organization very dependent on you. So over the last 20 months, I have slowly and surely given more and more of my responsibilities to more and more members of the team to the point where hot off the press, I'm about to become only an advisor and step out of really all of my operational duties probably by the end of this year. Now, there was a point at which I was like, and oh my God, what happens if I get better suddenly? Because people do get better, and one of my very wise children said, "Mom, I'm pretty sure that if you suddenly get a lot better, they'll be happy to give you lots of stuff to do." So, anyway, that's one of probably the biggest lessons, and also it goes with a lesson around acceptance and accept.

**Carole Robin** (01:23:25):
I wrote a LinkedIn, I think a LinkedIn, not a blog paper, one of those LinkedIn things. If you go to my website, you can look at things I've written, I think it was called Long COVID and Acceptance or something like that. But it's about how acceptance is not resignation, and it's about having an opportunity to rethink a lot of things and reframe beliefs. And I think the last thing I'll say about it is that it has made me a much more empathetic person, and I think one of the really interesting and important things to learn and have always continued to learn in doing the interpersonal dynamics work we do is you never know what's going on for someone else.

**Carole Robin** (01:24:26):
And one of the worst things we can do is assume we know what's going on for someone else, and it's really easy to get really... I think I said this before we even got online, which is in the absence of data, people make shit up. So if you don't want people to make shit up about you, you're better off disclosing more because then you'll have more control over your self-definition, not less. People like to make sense of things. They will connect dots however way they want to unless you help them connect them the way you want them to. Another case for self-disclosure.

**Lenny Rachitsky** (01:25:04):
Well, Carole, I'm incredibly thankful that you made time for this. I know it's not the easiest thing to do these things.

**Carole Robin** (01:25:10):
Thank you.

**Lenny Rachitsky** (01:25:11):
To remind people where to find Leaders in Tech and how to apply, tell them the website and who it's for specifically, so the right people go there. And then finally, just how can listeners be useful to you as a final question?

**Carole Robin** (01:25:23):
I'm on LinkedIn. You won't be able to just connect with me. I've got one of those things where you can't just connect. You need my email address so you can put my email address in the notes. Anybody's more than welcome... But if you connect with me, please don't try to sell me anything. The only reason it's set up that way is that too many people were trying to sell me too many things and I got exasperated. That's the only reason they wanted to connect. So I'm just going to trust that you'll reach out to me because you want to connect with me because you're interested in my work and that you'll also know and be sensitive to the fact that I have Long COVID. So my capacity to respond to messages and emails is definitely impacted. I used to be one of those you could count on me to always respond. By the way, another learning. It turns out everybody didn't write me off just because I couldn't respond to them right away.

**Lenny Rachitsky** (01:26:14):
That is a really great learning. Okay. And then the website for people that may want to apply and the applications are still open basically by the time this is leadersintech.org?

**Carole Robin** (01:26:23):
Right.

**Lenny Rachitsky** (01:26:24):
Amazing. Carole, you are wonderful. Thank you so much for making time for this. Thank you for being here.

**Carole Robin** (01:26:32):
Thank you.

**Lenny Rachitsky** (01:26:33):
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.

---

## [7/21] Twitter’s former Head of Product opens up: being fired, meeting Elon, changing stagnant culture, building consumer product, more | Kayvon Beykpour

**Kayvon Beykpour** (00:00:00):
The first time I ever met Elon was over FaceTime. He was just like, "Do you want to just come hang out? You can swipe left or swipe right."

**Lenny Rachitsky** (00:00:05):
You're known for at Twitter someone that turned the culture of the product team and Twitter in general from a very stagnant, nothing-is-changing product to shipping all the time.

**Kayvon Beykpour** (00:00:15):
We wanted to change the lack of ambition, the lack of creativity, the lack of customers feeling that the product had changed at all.

**Lenny Rachitsky** (00:00:21):
Here's a list of stuff that your team shipped while you were there, Super Follows, Communities, newsletters, topics, Fleets, testing reactions, edge-to-edge photos, Twitter Blue, Spaces, and obviously, live video.

**Kayvon Beykpour** (00:00:31):
The sacred cows are like their own roadmap. What are all the things that you think we're not allowed to change? Let's start there.

**Lenny Rachitsky** (00:00:37):
This was all relatively quickly.

**Kayvon Beykpour** (00:00:39):
I was like, "I might flame out completely, but Hell if I don't try."

**Lenny Rachitsky** (00:00:46):
Today, my guest is Kayvon Beykpour. Kayvon was the beloved and longest-tenured head of product at Twitter and also GM of the consumer business at Twitter up until the day that it was sold to Elon Musk. He landed at Twitter through an acquisition of his company, Periscope, which was the world's largest live-streaming platform, which ended up inspiring Instagram Live, TikTok Live, Facebook Live, and basically every other social network getting into live video. He sold the company to Twitter in 2015, continued leading Periscope for a number of years, and then moved into leading product and then the entire consumer business.

**Lenny Rachitsky** (00:01:19):
In our wide-ranging conversation, Kayvon shares what it was like getting Elon up to speed at Twitter, what it was like to be fired from Twitter, which actually happened during his pat leave. He also shares all kinds of lessons and stories from transforming Twitter's internal culture from a risk-averse, stagnant, product org to one that was shipping major features regularly. We talk about how they used acquihires and up-and-coming hungry product leaders to lead new initiatives and break through many of their sacred cows.

**Kayvon Beykpour** (00:04:35):
Thanks so much for having me, Lenny. Great to meet you finally.

**Lenny Rachitsky** (00:04:38):
It's amazing to meet you. I think this is going to be quite a unique and interesting podcast. A big thank you to Scott Belsky, illustrious former podcast guest for introducing us. When he introduced us, the one thing that he told me is that "Hopefully, Kayvon will share the story about our time getting Elon up to speed at Twitter." I would love to hear that story. I bet other people would too. Are you able to share that story?

**Kayvon Beykpour** (00:05:03):
When all the drama went down with Twitter and Elon ended up buying the company and after the eight months saga of legal back and forth ended up actually taking control of the company, there was that first two-day period where it was complete chaos at Twitter with the sink and Elon spreading his tentacles trying to find out who are the people that he wants to keep and what are the projects that are interesting. In the midst of all that, Scott ended up getting contacted and being asked, "Who should Elon talk to?" Scott recommended that Elon chat with me.

**Kayvon Beykpour** (00:05:42):
So, the first time I ever met Elon was over at FaceTime where Elon was just very curious to ask, "Hey, you were at Twitter for a while. You seem to have done some things. What should I be digging into, and who I be talking to?" At the end of that conversation, we ended up arranging an in-person meeting where Scott and I went to Twitter HQ to actually meet Elon. I think this was day two of Elon having brought the sink in. So, we had this really bizarre, wild, but really fun experience of walking into Twitter HQ, and in my case, walking back to Twitter HQ for the first time after having been fired, which was a very strange experience for me, and we walked into the building.

**Kayvon Beykpour** (00:06:29):
I was scurried through the back door because I didn't want to make a scene and make it ... There was a lot of rumors around is Kayvon coming back, and I just wanted to avoid all of that. So, it was just a very weird experience of being scurried through the elevator and through the back door and go to this massive conference room, which we had on the second floor of the 110th building.

**Kayvon Beykpour** (00:06:53):
In that massive conference room, it was me, Scott, Elon, and then at the very, very end of the room, Walter Isaacson, who by the way, I had a hard time. I knew I recognized. I'd never met Walter in person, but I was like, "Is that Walter Isaacson?" But he said nothing the entire time, and we had probably a two-hour conversation talking about the past, the future of Twitter, the good, the bad, the ugly. At the very end of the conversation, Walter came up and introduced himself and was like, "Hi, I'm Walter. Can I get your information just in case I need to ask any follow-up questions?" And I was like, "Oh, shit. I guess that whole conversation was on the record. I don't know."

**Kayvon Beykpour** (00:07:31):
So, it was a very surreal experience for a bunch of reasons, including just being weird for me since I was very conflicted about coming back to Twitter, even physically in the office. But I must say it was really fun. It was fun talking to someone. Obviously Elon, I'd never met him before, and he's one of the most successful entrepreneurs of our time. So, that was exciting to go into that meeting. Also, I had been spending so much time dreaming about Twitter and trying to mold Twitter in a direction that I thought was compelling and working with a team of people to do that, and to meet someone who also had a similar ambition, but obviously, in different ways ... He had his own dream for Twitter ... but it was really bizarre and unique and surreal seeing that glimmer in someone else who was like, "Yeah, I also just bought this thing, so I can actually do whatever the Hell I want. And by the way, here's some crazy dreams I have for doing it."

**Kayvon Beykpour** (00:08:35):
It was just a really ... As someone who had had their own dreams for the product, witnessing that it was really unusual and cool. I think that's probably what Scott meant when he said, "You should ask Kayvon about that," was that I think we both kind of recognized that something's about to happen here. Obviously, you have this very public spectacle of someone essentially having a takeover of a public company, but all of that stuff aside, also, you could tell Elon was scheming and cooking up, "What am I going to do with this?" It was cool to see that.

**Lenny Rachitsky** (00:09:12):
That's an amazing story. I love the Walter Isaacson component of it. Do you feel like you made a dent on his approach and way of thinking? Obviously, he made a lot of big radical changes. Do you feel like you made a dent in his view of where Twitter should go?

**Kayvon Beykpour** (00:09:26):
I don't know. I certainly don't think I've made any impression on how he should run the company. I think that's Elon's going to Elon in his way, and I think he certainly has had some radical moves in terms of how he's running the company, the decisions he made, how many people he let go, how the company is structured, the culture, and all that stuff is like ... We didn't even talk about that stuff.

**Kayvon Beykpour** (00:09:49):
I think what we spent time talking about is I shared my perspective with him of people I thought who were exceptional, who were at the company, and if I was in his shoes, who I would spend time with and embrace. Most of the people that I mentioned are still there, which is awesome, and they seem to be A, empowered, which is great, and B, having fun, which is awesome. So, hopefully, that stuff is useful.

**Kayvon Beykpour** (00:10:16):
We spent a bunch of time brainstorming products, and I had my set of projects that I was very passionate about because we'd given birth to them. I think a bunch of those projects, it seems like Twitter's still investing in and putting a lot of energy behind like Community Notes, which at the time was called Birdwatch. But I always felt really bullish on that being the future of essentially how content is moderated on Twitter, just because it was very clear that the way we were handling content moderation among many other flaws just wasn't scalable.

**Kayvon Beykpour** (00:10:55):
Spaces and Communities and the Creator Program of helping people make money on the platform, those are projects that we started over the year-ish prior to Elon taking over. My hope, having left the company and having had a new leader come in, was that those things would be given more oxygen. It's been awesome to see that those have been continuing to grow and be molded in different directions. Yeah, I think in that sense, I hope that our brainstorm was useful, but for all I know he doesn't even remember the conversation.

**Lenny Rachitsky** (00:11:31):
I freaking love Community Notes. It's such an amazing product. Let me ask two more dramatic-oriented Elon Twitter questions just to get these out of the way. The first is you said you were fired. I don't know if you've shared that publicly. People always wondered, I think, what happened. I know you tweeted during your pat leave, "I'm leaving Twitter," and no one really knows the story as far as I know. What actually went on there?

**Kayvon Beykpour** (00:11:53):
It was weird, to say the least. Honestly, it took me some time to come to peace with it because it was frustrating and surprising. I guess the story of what happened starts with Jack resigning. Jack resigned in ... It was like November of 2021 at the end of the year. The board chose Parag to be the CEO of the company, and I've had a long relationship with Parag. I respect him, but I had mixed feelings about that.

**Kayvon Beykpour** (00:12:23):
To his credit, Parag very quickly addressed one of the biggest things that I was really frustrated about in the last three years essentially of my time at Twitter. One of my biggest points of feedback and points of consternation was the structure of the company in that we had a functional organizational model, meaning we had a head of consumer product, me, we had a head of revenue product, Bruce, we had a head of engineering, we had a head of design, we had head research. It was a functionally run organization.

**Kayvon Beykpour** (00:12:52):
And the combination of that model and the type of leader that Jack was wasn't working in my view. I think if you're going to have a functional organization, you need to have a GM or a CEO who's extremely leaned-in to tiebreak and resolve conflict and make sure the team is moving quickly. And Jack, for all of his amazing qualities, just wasn't operating that way, and so you had a group of highly opinionated people that often disagreed and would create either the need for consensus or deadlock. That just was driving a lot of people crazy, including me, and I think it really held us back from living up to Twitter's potential.

**Kayvon Beykpour** (00:13:29):
Anyway, all of that was super frustrating for me, and the combination of that and a dramatic change in leadership with Jack leaving and Parag coming in, I wasn't feeling too stoked. Parag to his credit, when he became CEO, quickly changed that and shifted the company to be a GM structure. And he promoted me to being the GM of consumers. So, for the prior three-ish years, having been responsible for growing Twitter's consumer product, I was only responsible for the product management team. I didn't have engineering or design, and that honestly was difficult. It's very difficult to change culture with one hand tied behind your back.

**Kayvon Beykpour** (00:14:10):
Still no regrets. Had a lot of fun. I think we had some impact, but it was frustrating. So, Parag changed that. The irony of this, by the way, is he was one of the biggest proponents of the functional structure. When he became a CEO, he changed the structure, promoted me to be the GM of consumer, and I was, at that point, one month ... This is one month before I went on pat leave because my daughter was due.

**Kayvon Beykpour** (00:14:35):
So, I went into my paternity leave being like, "All right, I'm going to give this a shot. We'll see. We'll see how this goes," as Parag addressed the biggest frustration that I had with the company and how it was being run. So, I had some trepidations but went into my pat leave feeling optimistic. Mind you, this was all before Elon was even part of the picture. He had not become a board member. There was no news about him having beef with the executive team or for that matter, trying to buy the company.

**Kayvon Beykpour** (00:15:06):
So, I went on pat leave maybe a week and a half before our daughter's due date. Three weeks goes by. In that three weeks, Elon joins the board, leaves the board, makes an offer, has a short dramatic feud about whether that goes through. And also during that time, my daughter was born. Some drama at the hospital for us, but a week afterwards, we come home. Mom's healthy. Daughter's healthy.

**Kayvon Beykpour** (00:15:35):
The day after we get home from the hospital, Parag called me and said that he was letting me go and that he was taking the team in a different direction. That night, Twitter signed a term sheet with Elon to sell the company. So, a lot happened in a very short period of time, and the reason that Parag gave is exactly what I shared publicly, which was that he wanted to take the team in a different direction. The only other thing he said is that given that new direction, he thinks that the things that I'm good at, Twitter doesn't need anymore. And the things that Twitter needs are not particularly in my skill set or in my interest.

**Kayvon Beykpour** (00:16:14):
He wasn't particularly expressive about what that direction was, but that was the reason he gave me. That was a huge bummer for me for a bunch of reasons. One, I love the company. I love the product, and also it just sucks to leave not on your own terms. And two, I was just confused. The timing was very frustrating and confusing for me, not least of which because I had just come home from the hospital while on paternity leave. But also because at that time, especially the fact that Elon was buying the company was ...

**Kayvon Beykpour** (00:16:48):
Well, I was conflicted, honestly. I was very excited because Elon is someone that I looked up to immensely, and you just look at the things that he's achieved in the world and you can't help but be inspired by that. And two, Twitter for all of, I think, the impact and progress that we had made, had a lot of challenges associated with its governance and the fact that it was constantly vulnerable as a public company. So, there's just always this drama associated with Twitter as a public company, even a private company before that, that made it extremely hard as a builder to get shit done and have the product live up to its potential.

**Kayvon Beykpour** (00:17:27):
One of the benefits of this particular takeover was that Elon offered a path towards solving all of that. It was like, "Oh, cool, now you've got one owner who happens to be, by the way, extremely opinionated about the product and a voracious consumer and creator of the product." I think there was an incredible opportunity in that that now you have this organization and this product and this incredible ecosystem that can be devoid of all the political bullshit associated with being a public company. Now, it has this conduit to just living up to its potential.

**Kayvon Beykpour** (00:17:59):
So, it was a bummer to be removed from that, I suppose, without having any agency myself. That was very a long-winded answer to your question, but that's what happened towards the end there. Like I said at the beginning, it took me a while to come to terms with it and to be at peace with it. I did eventually. Listen, there's a huge silver lining of I spent the first year of my daughter's life with her and my family. My wife Sarah had left Twitter eight months prior to me leaving, and so when's the next time we could all be together and have time and space to just enjoy each other and our new family, and frankly, to avoid a lot of the drama that ended up ensuing that not a lot of people could have predicted? The deal was on. The deal was off. It is just a whole lot of drama that I got to miss, which is the silver lining.

**Kayvon Beykpour** (00:18:53):
Then it was confusing there for a bit because when Elon did end up buying the company, in that conversation that I had with him, it was definitely ... I was conflicted about do I want to maybe spend some time working on this still? Elon was very cool about ... He actually used this phrase at the end of our conversation, which I still find hilarious. He was just like, "Do you want to just come? You seem like you care about the product, and you don't have dumb ideas. Do you want to come hang out?" And I was like, "What would my job be?" And he was like, "Don't know, just hang out, and you can swipe left or swipe right." He used the swipe right, swipe left Tinder metaphor, and I thought that was hilarious coming from him.

**Lenny Rachitsky** (00:19:38):
For ideas that come up just like, "Here, I have this idea [inaudible 00:19:41]?

**Kayvon Beykpour** (00:19:40):
No, like swipe right on whether you want to be here or swipe ... He's like, "We don't have to make this a thing. Just do you want to hang out and work on the product with us?"

**Lenny Rachitsky** (00:19:40):
That's so funny.

**Kayvon Beykpour** (00:19:51):
So, I ended up deciding that actually, I'm just ready. I'm ready to move on. I spent enough time at this company, at this product trying to shape it into something that I was passionate about. I think it's someone else's turn, and especially Elon. If you buy it's your turn. You can do whatever you want with it.

**Kayvon Beykpour** (00:20:13):
So, that was conflicting for a bit, but I would say towards the end of the year, it was pretty clear in my mind that I was ready to move on and start thinking about other problems.

**Lenny Rachitsky** (00:20:23):
What I think about is there's always this tension being a PM at a company with a very strong-minded, product-oriented founder, and I feel like you would've been in the epitome worst possible situation there, where you're a product leader between Elon and the rest of org. So, I think it probably would not have worked out.

**Kayvon Beykpour** (00:20:40):
I'm not sure I would've been able to articulate it as succinctly as you did just now, but I think that is the feeling that I had that it's not my place anymore. I don't have a canvas to try and exert my dreams on this place. I think Elon took that mantle, and I'm excited to see what he going to do with it is the feeling I had.

**Lenny Rachitsky** (00:21:07):
Yeah. You've touched on this. You're known for at Twitter someone that turned the culture of the product team and Twitter in general from a very stagnant, nothing-is-changing product to shipping all the time, all kinds of stuff. So, here's a list of stuff that I've gathered your team shipped while you were there. Twitter Blue, which is I think called Premium now, Spaces, Super Follows, Communities, newsletters, topics, fleets, being able to see Instagram photos in line, testing reactions, edge-to-edge photos, tons of UX improvements, and obviously, live video. What did you learn about how to change a product culture from a company that's very risk-averse and essentially just not shipping a lot to taking big, bold bets and becoming a lot more open to new stuff?

**Kayvon Beykpour** (00:21:53):
Trying to drive culture change is both one of the most challenging things and rewarding things. For the first year of my role ... There was a chapter of my time at Twitter, maybe just to backup, that was just leading Periscope. In that first chapter of maybe two years, I was not really involved with Twitter stuff all that much. That started to change when we really tried integrating Periscope with Twitter, but chapter two of my time at Twitter was when I became the head of product. That first year of being the head of product was one of the most difficult of my career not because the work was difficult, but because it was so politically and bureaucratically exhausting to try and change culture in a way that just there wasn't alignment around.

**Kayvon Beykpour** (00:22:40):
It comes back to the point I was making earlier around the organization of the company was functional, and so it is one thing for me to have some ideas and a plan and a strategy that I felt compelling. But when you have to essentially drive consensus amongst your peers across the other functions, that's a different game. That's not execution. That's politics and consensus building. I both can't stand that stuff, but I think ... This is going to sound like I'm tooting my own horn, but good enough at it and I have enough patience at it that I invested the time and the energy. I think a less patient person wouldn't have bothered and would've thrown their hands up.

**Kayvon Beykpour** (00:23:25):
I think honestly, a lot of it just comes down to I had practice. At my first company that I started in college with one of my best friends, Joe, who I ended up co-founding Periscope with, we got acquired by a big, public, ad tech company called Blackboard, and we were 19 at the time. We got thrown into a public ... I was a senior executive at a public company that was not your quintessential tech company. It was even more difficult to get things done. So, through the four years I spent there, I learned a lot about how to navigate that type of environment.

**Kayvon Beykpour** (00:23:56):
It all came coming back when I was given the product role at Twitter. That first year of changing culture was like-

**Kayvon Beykpour** (00:24:00):
... product role at Twitter. That first year of changing culture was like walking through mud, and it was really difficult. But I think when we started building that alignment and building excitement that like, oh, actually maybe we should be taking some bigger swings, and when we started seeing through the execution against some of those plans, I think it ended up, it got easier and easier. It becomes addicting. I think people end up feeling like, oh wow, maybe these sacred cows we had didn't need to be so sacred.

**Kayvon Beykpour** (00:24:37):
And so I think after that first year, it became a lot more fun. It was still difficult, but it felt like we were all swimming in the same direction a lot more. But I think my takeaway there is you can't change culture without having alignment from the top. It's difficult to change culture when you have a pocket of a company trying to advocate for change.

So I think we got there in the end. We didn't move as much urgency as I think we drove. We were not fast enough, we were not bold enough. I was consistently dissatisfied with what I was achieving and what our team was achieving. But I think we did make a change. Twitter was an organization that had a lot of sacred cows and became very [inaudible 00:25:24] in its ways. Literally the first two years I was at the company, the stated product strategy for Twitter was refine the core. It was like, we're not making any big bets here, team. Our goal is to keep turning the knobs that are working.

**Kayvon Beykpour** (00:25:42):
And listen, as much as I was kind of throwing stones from the sidelines through that period when I was in Periscope land in our separate office a few blocks away from the mothership, that focus actually did help the company for some period. The reason why Twitter went from stagnant to declining DAU growth to growing DAU again is because they refined the core. This is when they went from the reverse chronological timeline to the ranked timeline, and the year after that was a lot of knob turning. It was like, how do we make these recommendations better? How do we make our push notifications more relevant?

**Kayvon Beykpour** (00:26:16):
Now, that is not an inspiring product strategy. That does not result in the product feeling materially different or adding new capabilities, but it did return the company to user growth. And I think that the fact that it did actually calcified the organization's reticence to take any risky bets even more. So it was a very interesting predicament because when I got into the role, the goal wasn't to change that progress. We wanted to continue reaping the benefits of refining the things about the product that were working really well. What we wanted to change was a lack of ambition, the lack of creativity, the lack of customers feeling that the product was changed at all.

**Kayvon Beykpour** (00:26:58):
Because you would hear people, I mean, one of the beautiful things about working on Twitter as a product is that you have literally customers being injected into your veins. Every single day, whatever you change about a product or whatever you don't change, they're telling you what they love and what they hate. And it is both exhausting and exhilarating. It is one of the most ridiculous luxuries of product development, is working on a product that many people use and therefore you get that much feedback around.

**Kayvon Beykpour** (00:27:25):
And it was a very common thing for us to hear people say, "What are you all doing over there? The product hasn't changed in eight years." And that was horrible to hear, and I felt it too, as a critic on the sidelines, as a user who wasn't an employee who eventually became an employee, I had the same feedback. And so that was my mission. I was like, I am somehow ridiculously in this fortunate position that I've been entrusted some responsibility here. I might flame out completely, but hell if I don't try. And so that was both fun and exhausting, like I said.

**Kayvon Beykpour** (00:28:00):
But it was as simple as starting with we are voracious users of the product ourselves, and if we aren't, by the way, that's its own problem. I think that in order to build something wonderful, you have to be a customer of the product. And sure, I'm sure you could point to businesses and products where that's not the case, and I'm sure there's a flaw in that philosophy somewhere, but I've always believed that one of the best ways to build products is to be a customer yourself and to find your own pain points and to build a product that you want to use. And so that's actually not that hard to do if you're a user of Twitter and you can think critically. It was ripe with opportunity. And so it was actually really fun and amazing to be able to craft a plan that started to take a swing at some of these things.

**Kayvon Beykpour** (00:28:50):
And the other thing I'll add to this is that there were so many sacred cows at Twitter that the sacred cows are their own roadmap. It's like a built-in free roadmap of like, all right, what are all the things that you think we're not allowed to change? Let's start there. Everything from moving from reverse chron to a ranked feed, that was a sacred cow. Text and 140 characters, that's a sacred cow. Not letting anyone control any tweets that they see on the platform. The notion of Lenny owning his reply space was anathema at Twitter.

It's just like if a tweet gets, if you get an at mention and you don't like it or it's abusive, we're not touching that. We can't annotate tweets with [inaudible 00:29:30], all that stuff, those are all sacred cows. And the process of starting to address those one by one reveals a lot of the cultural hesitations that existed.

**Kayvon Beykpour** (00:29:43):
So yeah, I'll never forget one of the first features, and this is such a tiny feature that we worked on after I started the role, we were building this feature called hide replies. It still exists in the product today. If someone replies to one of your tweets, in the tweet details area as a reply to one of your conversations, before you had no ability, the only way you could address unwanted content was reporting it. So that was like Twitter acting as policemen and policewoman, completely unscalable and challenging, especially in the context of someone replying to one of your tweets.

**Kayvon Beykpour** (00:30:18):
And so we wanted to add a feature that let you hide a reply to one of your tweets, and it's not impacting what people say. It's not impacting free speech in the sense of you can still broadcast whatever you want, but if you're going to come into my reply space and say some shit that I don't want to see in my feed, I should be able to hide that. Tweet what you want, but don't at mention. You can't scream in my face basically.

**Kayvon Beykpour** (00:30:40):
And I remember we had a PM on our team who was leading this feature who a few weeks into this project mentioned to me that she had had a conversation with someone on the engineering team that told them, "Don't work on this feature. This is bad for your career. This is not going to launch, and you don't want to work on this. You don't want to be seen as having worked on this." Because it was so kind of anathema to we can't let people hide replies to their tweets. And I just remember hearing that and my blood was boiling. That is the most, it was such an interesting representation of the culture, not just hesitation to try new things, which by the way, that product might've failed. And that's fine, but it doesn't mean you shouldn't try.

**Kayvon Beykpour** (00:31:27):
But to go so far as to dissuade someone else who was excited about experimenting with a hypothesis to see if it could help customers on the platform and telling them, "Don't work on this. It's bad for your career." As a microcosm for some of the cultural challenge we had around trying big, bold bets, which by the way, this wasn't even a big, bold bet. It was such an innocuous thing to try. But there was a lot of that and it made it very difficult without some sheer force of will and also just a lot of effort. So there was a lot of that.

**Lenny Rachitsky** (00:32:01):
Kayvon, there's fractals of stories that I could infinitely follow. There's so much interesting stuff here. One that just stands out is this idea of the sacred cows become your future roadmap. It's like flipping it from here's the thing that we're all afraid of. No, this is not what we should be doing. I think that's really interesting and could be a lesson to people.

**Lenny Rachitsky** (00:32:20):
The other is just, I love this point you made about the growth was most accelerant when you're just focusing on the core, that's what actually ... Like optimize, people bash on optimizing the existing experience and just micro-optimizing, improving, versus trying to take all these big, bold bets and experiments. Obviously, that's also valuable. But I think it's really interesting that that's what reignited growth and was responsible for growth for a while.

**Kayvon Beykpour** (00:32:44):
And continue to be, by the way. One of the lines that we had to maneuver was creating a portfolio of bets where some of them were not speculative at all. We knew that if we continue to invest in ML and getting better with recommendations in the main feed and through notifications and things like improving the onboarding flow, it was rife with opportunity.

**Kayvon Beykpour** (00:33:12):
You'd have really dumb things happen. We would learn. There was one just bizarre and incredible meeting we had where we finally had got more rigorous around instrumenting our onboarding flow. And we found that in a couple countries, like we had a bug with our SMS verification flow where we wanted to verify users who were signing up with a phone number and our telco integration to send SMS verification cards just wasn't working. And so a huge percentage of people signing up in the UAE and other countries just couldn't use Twitter.

**Kayvon Beykpour** (00:33:46):
And so of course at the scale that we were operating in with hundreds of millions of users, you need to be able to refine the basic building blocks of the product, and that's going to lead to reliable growth. But we wanted to balance that with a portfolio of other bets and product improvements that would materially add new capabilities. And that was a balance that I don't think existed. And by the way, I don't think we nailed it either under my tenure, but it was the driving force of what I wanted to achieve, was to create a better balance that would result in evolving the product and introducing new capabilities. And so that's what we tried to do.

**Lenny Rachitsky** (00:34:28):
In terms of what actually helped turn things around, things that I kind of gathered from what you shared so far, one is just building a little momentum, having some quick wins of new products that people start to get excited about. So creating more excitement down the, oh wow, we can actually try new things. There's also, it felt like there's a sense of trust that you built with Jack and execs of just like, okay, we can actually trust this team.

Also, it feels like because growth started up, there's probably a sense of like, okay, we can try some new crazy ideas. It feels like another part of your strategy was [inaudible 00:34:56] hires and bringing in these entrepreneurial folks to take the lead on some of these big ideas. Can you talk about that? Was that something you actively thought about and was that a big part of the impact there?

**Kayvon Beykpour** (00:35:07):
Totally. Yeah. So I think a couple things. One, the only thing I'd add to what you said in terms of the ingredients, it was also just storytelling and just repetitive storytelling around this is the vision, these are the bets we're making. Here's why. And you can't just tell that story once. I'm talking internally, by the way. There's a whole other component of this, which is externally how do you tell, especially for a product like Twitter where it's a consumer product that hundreds of millions of people are using, and you have many constituents, you have users, you have advertisers. And so it was very important for us to tell the story of here's what we're doing and why. Here's why you should believe in us. And by the way, give us all your constructive criticism too, because we're listening and we're going to build that into ... So that storytelling was really, really important.

**Kayvon Beykpour** (00:35:51):
And this is oversimplifying the world, but there's two types of internal team members. There are people who hear that story, who have been a part of the organization who's been slow, or maybe they've been outside the company as a user of Twitter, and they're like, I'd never really want to work there because it doesn't seem like a particularly ambitious product company. And one of two things happens when you hear that story. Either you're inspired and you're like, yeah, we can finally take a swing at making this product better. And maybe I wasn't interested in working in this company before, but I mean, this is an iconic product, and to have an opportunity to reshape it is really exciting. Or again, oversimplified world, but there are people who are very pessimistic and maybe aren't excited by that vision. Let's just stick to what we know works. We're not going to take any big swings. That's a waste of time.

**Kayvon Beykpour** (00:36:35):
I think one of the really important things about driving cultural change at the leadership level is you've got to identify whether someone's on the wagon or off the wagon and either quickly convince them to get on the wagon or if they're not on the wagon, they shouldn't be there. And that's something that we were terrible at, and we didn't have the organizational structure to be able to enact that.

**Lenny Rachitsky** (00:36:59):
The wagon is they're excited and bought into this vision and want this to happen?

**Kayvon Beykpour** (00:37:03):
Correct, and contribute towards it. And off the wagon is like you're not at the company. And we didn't have an organizational structure that could allow for that, nor frankly, the fortitude. I include myself in this. I feel like I've learned a lot about how to make that determination. So I think we were terrible at that. And Elon is the whatever, if that's a spectrum, Elon is the opposite spectrum of that. His tolerance for people who are not aligned and his tolerance for low performance is famously extremely low. And I think it's one of the things that when I say A/B test, it's very interesting to see the extreme to which he has operated.

**Kayvon Beykpour** (00:37:37):
And I think I've learned a ton around, we didn't have the organizational structure nor the fortitude to be swifter, and that made cultural change way slower. We still were able to change the culture, not as much as we should have, and certainly not as quickly as we should have or efficiently as we should have. Because by the way, a lot of high performers who are aligned with that desire to change and build, they don't have the, there's not like an equal distribution of patients. If you're extremely talented and you're dealing with organizational shit, you're going to go find someplace else that lets you do your craft and have impact. So it's very difficult.

**Kayvon Beykpour** (00:38:16):
But anyway, going to your question, one of the things we found that was a really effective way of accelerating cultural change and also helping drive some of these product initiatives that were particularly speculative was doing small acquires. And really the benefit of that was, A, you bring in a founder type who is an entrepreneur, who drives urgency, who has ambition, who's ideally savvy enough to also work in the context of a large organization, which sometimes is a totally different skillset. I mean, it is a totally different skillset. And a lot of our most ambitious bets that were the riskiest and most misaligned with how the product worked or there was no easy staff to build on top of, a lot of those bets were driven by founders who we basically acquired and said, "Here, you are going to run this."

**Kayvon Beykpour** (00:39:13):
And they believed in it. They were able to rally a team around them, and it's all the attributes of a startup, but with the canvas of a product that hundreds of millions of people use and more resources. So Spaces, Communities, Community Notes, called Birdwatch back then, these were all projects driven by ... Fleets, as well. These were all projects that were run by small teams led by entrepreneurs who we acquired, like Keith Coleman runs Community Notes, last Birdwatch. He actually was my predecessor. We acquired his company so that he could be the head of product. And then when he moved on from that role, he was extremely passionate about this idea of crowdsource moderation and letting people annotate misleading content on the platform without Twitter acting as a policeman.

**Kayvon Beykpour** (00:40:03):
And that was a very speculative bet that by the way, a lot of people thought, most people thought was a terrible idea. We gave Keith a little silo to go build this vision, and then it was our job to make sure that bet didn't get suffocated in the context of a big organization that would otherwise have not had patience for it.

**Kayvon Beykpour** (00:40:26):
All of the community effort or the creator efforts started with Super Follows and tipping, and all these things were led by Esther Crawford, whose company we acquired and who had her own couple of viral moments with the Elon acquisition. But she's a phenomenal leader who, again, is a perfect example of balancing that entrepreneurial startup muscle with the savviness to be able to get things done at a large organization. Fleets was run by Mo Oladam, who's an entrepreneur, and Communities has gone through a few iterations obviously and still is in the product, but John Barnett and a team of people who we acquired from Chroma Labs.

**Kayvon Beykpour** (00:41:02):
So I think that that story of acquiring hungry, ambitious founders and giving them responsibility and latitude is a success story of Twitter's. I mean, I'm a beneficiary of such a bet as well. My company Periscope was acquired, and I was given the responsibility to eventually lead the product team. So I feel like that we ended up realizing, both through the company's history and through learning, that this is actually a very effective way to drive cultural change and to deliver impact because you need a special type of person to be able to both operate within the existing structure and change the structure, to know when to use the system and to know when to fuck the system.

**Kayvon Beykpour** (00:41:52):
And I feel like my whole life has benefited from other people taking bets on me like that, to the point that even I was like, "Really? You sure you want to?" And so I think I've enjoyed trying to pass the buck and do that for other people, and I've never regretted it. You always, taking a bet on people and especially throwing them in a deep end, which on paper they may be unqualified for, I think is one of the best ways of driving change. And by the way, supporting growth, you've learned so much more when you're thrown into the deep end than in other contexts. And so I think it's fantastic, it's an expensive strategy if you're going to go buy a bunch of companies, but it's a great strategy for the situation that we found ourselves in at Twitter.

**Lenny Rachitsky** (00:42:40):
It feels like every big bet was one of these companies from the list that you just shared, and I'm glad you shared Periscope, obviously. That's a great example, too. I guess maybe just a follow-up question here, is there anything you learned about how to do this well? I know you talked about maybe creating a little silo for the team, because so many companies acquire and acquihire and they just go nowhere.

**Lenny Rachitsky** (00:42:59):
So I guess just a two-part question, just like what are some tips for how to do this well at a company? And then, two, you also, we were talking offline about this previously and I think it's a really interesting point, that a lot of companies staff based on who's available versus who is right for the role, and let's wait until that person is there for us to bet on this. Can you just talk about lessons there?

**Kayvon Beykpour** (00:43:19):
That last one is a huge pet peeve of mine that I feel like we learned the hard way, and particularly it's a common pattern I think in highly functional organizations where you have different people making decisions on how to staff projects, and there's nothing inherently wrong with that. But I think in the situations, in the situation we found ourselves in where we had this sort of cultural evolution that we were going through where some people just didn't agree with the things that we were prioritizing, they were begrudgingly going along with it, but you would end up in a situation where the combination of that sort of cultural shift and strategy and the fact that the way teams were being staffed was not, there's ultimately no single decision maker other than the CEO and Jack is not going to get in the weeds and debate a staffing decision on the team, resulted in a situation where oftentimes we'd have projects, like the one I mentioned about hiding replies, where there wasn't even an agreement on the team about whether this was a good idea and whether this is worth trying or how to do it.

**Kayvon Beykpour** (00:44:22):
And imagine, it's hard enough to build something from nothing. It's even harder if the team doesn't believe in it. This is to the point of just being toxic. The startup would never succeed if all the people who are working on that startup aren't to the point of being perhaps irrational obsessed with that idea. And still willing to see truth, you need to be able to see whether the thing is working or not, but if you don't believe it in the first place, I'm not betting on that succeeding.

**Kayvon Beykpour** (00:44:50):
And so this was common, and sometimes not as extreme as the examples that I mentioned, but I think one of the lessons I learned, and it's quite intuitive actually, is you need to staff projects with the team of people that are well equipped from a skillset standpoint, but more importantly have an obsession with the idea they want to pursue. It's going to make them work harder, it's going to make them be more creative. It's going to make them have the sufficient level of ambition and desire to will this thing into existence. Because every project, whether big or small, there is an element of you need to will this thing into existence because it's hard. The only way you're going to get through that pain is by having that desire, and I think a very easy cheat code for an organization to employ is to say, if you're going to work on something, especially if it's speculative or risky, staff it with a set of people who believe in it and really want to learn whether this solves a customer problem or not. Because if you don't have that ingredient, it's going to drag everyone down and it's just not going to be as successful.

**Lenny Rachitsky** (00:45:55):
**Kayvon Beykpour** (00:47:31):
I've only seen one interview on your show that covers this. Sriram was particularly spicy when he talked about jobs-to-be-done, which is unsurprising because. I spent a lot of time talking to Sriram about jobs-to-be-done. I mean, I guess I'll just start by saying I was not a fan of how we leveraged jobs-to-be-done at Twitter. I thought it was exhausting and not particularly helpful, and so it's a particularly sore subject for me because I was sort of charged with defending it and rolling it out. It's hard to do that when you don't really believe in something. But...

**Kayvon Beykpour** (00:48:00):
It's hard to do that when you don't really believe in something, but to me the critique is less about Jobs-to-be-Done though there are many critiques of it and more about every framework at its limit is followed to such a religious extent it's just unhelpful. You need to have nuance in how you leverage these frameworks. Otherwise, you lose the forest through the trees and you end up following a process for the sake of following a process. And that's what happened with Jobs-to-be-Done. So I think that's my real critique of it. It's not the... I mean listen, the premise of Jobs-to-be-Done and my most charitable take on Jobs-to-be-Done, which is actually useful is that it forces you to look at things through the lens of customers and understanding what their needs are and understanding what their true alternatives are outside of the narrow lens of your product.

**Kayvon Beykpour** (00:48:47):
And I think that's just healthy product thinking. You don't need a framework called Jobs-to-be-Done. You don't need to think about milkshakes in order to be able to do that. It's like you could employ common sense or you could leverage something like Jobs-to-be-Done, to be able to force your mind to think of things through that lens. So I think that's my charitable view on what Jobs-to-be-Done can help you do, but as a framework into and of itself as a sole governing principle of what to build, it's just not useful.

**Kayvon Beykpour** (00:49:14):
By the way, in the same way as, and I think Twitter had this problem as well prior to our detour around Jobs-to-be-Done, if the only way the organization is trained to think about what to build and what not to build is OKRs, it's equally unhelpful at the limit because sure, you can have a good sense of what you should build to drive metrics, but by the way, you might be focusing on the wrong metrics or that might not help you have the right balance of things to build. That might not help you see when the things that you're building are actually hostile to customers.

**Kayvon Beykpour** (00:49:47):
So just as an interesting example, the thing that I remember about your interview with Shriram, if I'm not mistaken, I think he mentioned, and I love Shriram, I'd be happy to debate him about this on his podcast, but he mentioned one of the examples I think was the Amazon. When you get order confirmation from Amazon, they intentionally bury the order details. You have to click the link and authenticate to go see what you ordered. I don't give two shits what metrics that drive for Amazon. That is one of the most customer hostile things I experience in my daily life. I order a lot of things from Amazon. I hate the fact that I can't search my email to see what I ordered. And so I think the problem with these frameworks is that you lose nuance and ultimately, and this is where I agree with Shriram, he actually mentioned this on your podcast as well, you need to be able to make trade-off decisions that balance what's right for the organization and what's right for the customer.

**Kayvon Beykpour** (00:50:43):
And sometimes based on how you devise your frameworks, your metrics aren't actually aligned with the customer's benefit. Like the Amazon example, and we had many famous examples in Twitter's history, which were the same. One of our key metrics that we always optimized Shriram growing was DAU and we had obviously the rank timeline did wonders for growing DAU and it was a great experience for many customers, but we often had features that would not lead to a good customer experience and the team would just be blind towards leaving hostile customer experiences in place because it was good for metrics and aggregate. And the famous example of this is we had this toggle, which we called Swish very affectionately, but it was like a sparkle icon.

**Kayvon Beykpour** (00:51:26):
Before you could switch between the rank timeline and the following, that reverse chronological timeline, which is still in the product right now, it was just the toggle. You would press a button and it would turn your feed reverse chron, which very few people use as a percentage of our users. But you had power users who really cared about having a reverse chronological timeline and we took so many baby steps on the evolution of this product. The very first baby step was you press the toggle, it turns you to reverse chron and then we would pull the rug out from underneath you and make the experience go back to the rank timeline after, I don't know, 24 hours or something like that.

**Lenny Rachitsky** (00:52:02):
Oh, wow.

**Kayvon Beykpour** (00:52:03):
And the reason that the team felt strongly about keeping it this way is it was better for metrics. Why? Even if Lenny wants a reverse chron feed, we knew that he would spend more time in the app if we put them in the rank timeline and this was the number of debates that we had about this because the team understandably was like, "This is good for metrics", but at the same time you'd have customers being like, "I fucking hate this experience. I'm telling you I want reverse chron. Stop randomly changing it for me."

**Kayvon Beykpour** (00:52:34):
Instagram has I think gone through their own struggles with this as well. They tiptoed their way towards ultimately giving people control and the difficulty in making product decisions comes down ultimately to making these trade-off decisions and you have to look at things through the lens of the customer. You have to balance that with what's driving the right business outcomes. And sometimes those things are aligned and sometimes they're not, and the answer isn't any one framework. Sometimes it's just good old-fashioned judgment and product taste. And so that's where my take is different. I don't think the issue is Jobs-to-be-Done, although I'm not the biggest fan of Jobs-to-be-Done. The issue is just having the right nuance and ultimately the right leadership to be able to weigh these things and see when your frameworks are not actually helping you make the right decisions.

**Lenny Rachitsky** (00:53:20):
I think that's really important advice and I love hearing the details if I actually think about this stuff. Actually finding this balance is very hard in practice. I'm curious if there's something you could recommend or have learned about how to know when you've gone too far with a framework like signs like you have implemented this to religiously and maybe you should be thinking a little more broadly.

**Kayvon Beykpour** (00:53:41):
There's two, I think, simple and obvious ones. One is if the result of your framework is that subjectively bad decisions are being made, then something's got to change. Assuming the person who's making this assessment has good product taste, which is in of itself subjective obviously, but my personal view on this would be in the role that I had, if I saw that our organization was being incentivized to make decisions that to some non-trivial degree of the time were just bad decisions that I don't like as a user, I can't stand by as a user or builder, then something's got to change. Either bad judgment was made in following the process or the process was wrong, or if that framework, it didn't even lead to the right debates, then that's how you know. Either you have an incentive problem but the team did what they were incentivized to do or that there was bad judgment and that's a different problem obviously.

**Kayvon Beykpour** (00:54:38):
But I think in the situation we found ourselves in where the team was again understandably hyper focused on driving DAU because that was the strategy for so long. It left so little room for even taking ambitious bets that in the short term wouldn't drive DAU, like some of our bets that I still to this day believe in hurt DAU in the short term, but you had to squint and believe over time would improve some metric DAU or otherwise, like a product like Spaces. In order for Spaces to be actually used, you needed to make sure that when Lenny starts a Space that people would join. And how do you get people to join Lenny space when they're used to having an asynchronous feed of tweets? Well, you can send push notifications, you can occupy really trying real estate at the top of the app that lets people know, "Hey, Lenny's live right now. He's in a space, there's people here, come join."

**Kayvon Beykpour** (00:55:31):
Guess what happens when you put a bar at the top of the app that tells people when they're live? You move tweets down, you move ads down, DAU goes down, revenue goes down. And so if you have an organization that's just hyper focused on the thing that matters is driving DAU quarter over quarter, then that doesn't leave enough room for nuance to accommodate new speculative bets that might hurt one metric, but over time have other consequences that are positive and beneficial, like enabling an entire new vector of content creation and conversation on the platform. I guess the other answer to your question in terms of how do you know when the framework's not serving you right? When you start imagining and planning for a bunch of bets that the organization then sees is disincentivized to make successful, then something's got to change.

**Kayvon Beykpour** (00:56:17):
Either your strategy is just not the right strategy because it doesn't abide by the frameworks or the framework needs to accommodate the fact that actually we're going to try some things that in the short term either might not show up as blips on our DAU radar or are going to help some other metric that's important. And so that took us some time to get, and we tried a variety of schemes to make that work. Community Notes, the project that I was mentioning Keith started, we intentionally structured that like a startup. It was literally like we made a seed bet on Keith and his team and we were like, don't worry about the OKRs. We're not going to judge you on the basis of your OKRs.

**Kayvon Beykpour** (00:56:57):
And there's some pros and cons to that. A lot of our projects worked that way. Fleets started that way. Community Notes started that way and some other projects started more part of the core organization because they were so intertwined with how we were the nature of the product that it just made sense to... Separating it was going to do more harm than good. So you just have to figure out based on how execution is going, whether you've got the right framework and you've got to be willing to make adjustments when it's not working.

**Lenny Rachitsky** (00:57:29):
That's actually really helpful. The two that I'm taking away here is how often are you feeling bad about the features you're shipping? Like they're bad for users and you think they're bad for you as a user potentially. And the other is it keeping you from taking big bold bets that don't necessarily drive the metrics you're focusing on. Okay, so before I let you go, I want to spend some time on Periscope. I don't know if everybody knows the history and story of Periscope. Basically it was the biggest live video streaming platform in the world and I imagine inspired basically every other social network to build a live-streaming platform, Instagram live, Facebook, TikTok, obviously Twitter. So I want to spend a little time here and see what you learned and also just broadly consumer products, but first of all, I hear there's a story with Kobe Bryant and Periscope about him using it in some form. Can you share that story?

**Kayvon Beykpour** (00:58:18):
Before Periscope launched publicly, which it was in March of 2015, I want to say, we had a small beta that grew to maybe 500 people in total before we actually released the app publicly. And in that time while we were still in beta, I was trying to personally onboard every single user and I had a shtick that I did, which was we'd get them in the app and I would start a broadcast. We had a feature called Private Broadcasting that we basically built for this use case, which is someone joins, I'm going to go live and they're going to join and I'm going to show them how the app works. And we were spending a lot of time in our office, so Kobe, Chris Saka actually invited Kobe to the beta.

And so Chris connected us and I did a private broadcast and Kobe joins and I was like, it was like 10:00 PM in the office and my routine was like, let me just walk around the office talking through the mechanics of Periscope through the lens of this demo of like, "Hey, let me show you around the office and here's how the chat works and you can tap the screen to send hearts and if you want me to do something, go to the room over there, just type it in the chat and it'll come up."

**Kayvon Beykpour** (00:59:22):
And sort of showed one of the things that was unique about Periscope was it was a one to many broadcasts, but still low latency enough that it felt like a FaceTime so you could have the bidirectional communication between multiple viewers and a broadcaster. And so I was teaching him how to use the chat and showing him the office and he was playing with it and at one point through the end of the demo he posts a comment that was like, "Why the fuck would anyone want to watch someone else stream live?" And I remember my heart sank and I started fumbling through like, "Well, we think it's cool."

**Kayvon Beykpour** (01:00:03):
And before I could even get the words out, he posted like, "I'm just fucking with you, bro. This is incredible." And I just remember it was just such a surreal moment that has, I'll never forget, I mean Kobe's a legend obviously, but to have him essentially troll me while also putting a point on what was cool about the experience and that was bidirectional and something he commented on to cause the broadcaster to change their behavior or change the experience, it was a really ironic full circle of showing off how the product works. But yeah, it's one of my favorite early Periscope stories.

**Lenny Rachitsky** (01:00:41):
Oh man, if I kept doing that, the manual onboarding, I'd be like, "Who's coming?" Just always worried that someone else fancy is going to join. You never know who Chris Saka is getting, who he's talking to. That's amazing. Okay, so it's been about 10 years, I believe, since you sold Periscope and about six years ish since you stopped running at as CEO, something like that. Now as I shared, every single platform basically is doing this. They added live video streaming. I'm curious if there's anything you learned about just competing with these major platforms.

**Kayvon Beykpour** (01:01:14):
Well, there's a few reasons why Periscope failed ultimately and why we shut down the app. Obviously Periscope, the technology and the mechanics still lives on because you can go live on Twitter, you can watch live broadcasts on Twitter, you can do audio conversations on Twitter and all of that is the Periscope stack. Still there, which is awesome that the legacy lives on in a different form factor. The reason that the Periscope app failed, it really comes down to a few things. One, we did not address the core problem that retention wasn't good. Our poor retention was mapped by just an incredible surge in top-line user growth. And for Periscope, it was interesting because every month or two we would blow up in a new market that would just bring along an incredible surge in usage.

**Kayvon Beykpour** (01:02:02):
We blew up in the US, we then blew up in France. We then blew up in Turkey. We then blew up in the Middle East and you had these incredible surges, but underneath that surge, the core product had retention issues and we ultimately just did not, we didn't spend enough time prioritizing, addressing those. And in fact, we shipped product changes that made those retention issues worse. Compounding that was the fact that one of the theses behind our acquisition, the Twitter acquisition, was that we would leverage the scale and the community and the product mechanics of Twitter to make the product grow faster and also become more durable. And I think that's connects to one of the reasons why I feel like one of my learnings and one of the things that we knew but just failed to execute on was that I still am very skeptical that there can be a consumer product that is just focused on live video, like a generalized synchronous live video application for short form video I don't think can be durable on its own. I think you have to surround that product with enough features and capabilities to allow a community and an ecosystem of users to be able to stay in touch with one another asynchronously and synchronously. This is why a lot of the other products that you mentioned that incorporate live capabilities and we're shameless about copying. What was working about Periscope, they're surrounded by a scaffolding that lets people also stay in touch with each other. Asynchronously Instagram, it's an asynchronous product that has synchronous features like live. Same with TikTok obviously. And I think we were in this position where it was a live only product.

**Kayvon Beykpour** (01:03:39):
You are connecting with your audience and having a great time when you're broadcasting live, but you're not using the product to keep in touch with that community when you're not broadcasting. How often throughout the day would you broadcast live from your phone? And mind you, this is different for products that are live. There are live consumer products that focus on a specific vertical like whatnot for selling or Twitch for gaming that have very different properties that make it more durable as a standalone live product. But Periscope was really in this consumer generalized live-streaming from a phone land, and I think it was just not durable to have the product be live only. And the time it took us to integrate with Twitter was way too long. And there was reasons for that that come down to just how distracted Twitter was with its own roadmap and refining the core and they just had other fish to fry basically.

And all of that leads us to competition because at some point Facebook woke up and decided this is cool and we need to go build this. And I obviously wasn't there on the inside, but legend has it, Mark says, "Hey, you 300 people, stop what you're doing. Go basically make live exist in our product as a first [inaudible 01:04:56] experience."

**Lenny Rachitsky** (01:04:56):
Oh, wow. I didn't know that.

**Kayvon Beykpour** (01:04:57):
And if you have that level of organizational effort put on building something that by the way, you don't have to spend any time wondering what the product looks like, just go copy these features basically and make them work. And they did a lot of other savvy things too from a partnership standpoint. We had a lot of prominent streamers that ranged from influencer or just creative people that became known on Periscopes, all the way up to celebrities like Kevin Hart and others who were prolific Periscopers that Facebook just went and bought out.

**Kayvon Beykpour** (01:05:30):
They were just like, "Cool, we're going to pay you a bunch of money to stream exclusively with us." So they hit us from all sides. They had the entire company put their effort towards building live in a way that was cohesive in the core product first with Facebook and then Instagram and then also attacked it from the creator as well. And we were too slow and it was very painful to think about because it was like many other insights that Twitter had early. Twitter had the right insight, but botched the follow through. I'm not pointing fingers, I blame myself for that just as much, but there's a pattern where Twitter is really great at spotting meaningful consumer behavior changes. They spotted Vine and acquired Vine, botched it, spotted Periscope, botched it, spotted Instagram by the way, before Facebook tried to buy Instagram, Twitter was trying to buy Instagram, and there are other reasons why that didn't fall through, but it's interesting to me, it's one of the interesting aspects of Twitter's history.

**Kayvon Beykpour** (01:06:35):
They were phenomenal at spotting meaningful changes in consumer social behavior, and actually putting their money where their mouth is in terms of trying to follow through on bringing those bets in-house, but then botching the execution. And so that was one of the things that was really motivating for me when I was in my role leading product of Twitter was I didn't want to make that mistake and we didn't end as up buying anything like Vine or Periscope and keeping the product. We obviously bought lots of small acquirers, but we did obviously have a bit of a story with Clubhouse that ended up with us building Spaces and competing with them. But anyway, that was a long, rambly story. Hopefully that answered your question.

**Lenny Rachitsky** (01:07:25):
Yeah, there's so many. Again, it's all these fractals of thought threads I want to follow and ask you about. Real quick on the Vine and Periscope point, I was going to ask this. Twitter, as you said, had the opportunity to win in video in so many ways. Vine was amazing, killing everyone, loved it, and then it's fades away. I guess, you already shared a lot of challenges Twitter had with executing, shipping, Secret Cows, things like that. Is there anything specific with video? Was it just like, oh, this is not actually a huge priority and we're just going to ride it for now and that's why it didn't work out? Or is there anything more that?

**Kayvon Beykpour** (01:07:53):
No, it's even more like pathetic than that 'cause I think Twitter did believe in video, but it made this classical mistake that we also unfortunately recreated with Periscope, which was they had the insight around short-run video, they bought Vine. They then competed with Vine internally. So Vine was a separate organization within Twitter, separate office obviously in New York and then Twitter rather than integrated holistically into the product and pour gasoline on it, they built a native Twitter video feature that was a different stack, different team. It became what you think of as Twitter video now. It's like the most simple active uploading video and all the professional video tools called Media Studio that let publishers like ESPN put content. All of that was basically built as a separate team, separate organization, separate product that was competing with Vine. You had two visions for short form video that were manifesting, and that's the quickest way for things to get messy.

**Kayvon Beykpour** (01:08:58):
And of course the separate startup team is going to get, you're not going to be able to make good on the vision of buying the company and integrating it in all the right ways if you compete with it internally. And we had a similar thing happen with Periscope. We were very focused on Periscope with separate organizations, separate structures, separate app. Periscope at the time primarily was focused on UGC live video. So user-generated content being streamed from a phone. Twitter then decided to get in the premium live video business very famously with acquiring rights to Thursday night football, the NFL. Guess what happened? We competed internally rather than have a cohesive technical and product vision for how to embrace live video across the spectrum of UGC and premium live video, Twitter put a separate team in charge of premium with a separate product, separate technology stack. And so you had two ways to manifest live video on the product. It was like UGC live video, which was awkwardly not even really implemented well with Twitter at the time. And then premium live video, which had totally different UX, total different team, totally different architecture. And by the way, the company put a tremendous amount of energy and investment in talking about Twitter being a place to watch the NFL. And meanwhile you had this burgeoning UGC ecosystem, so this was like we're making the same mistake all over again. Now, luckily in the Periscope case with a lot of persistence and impatience and table pounding, we eventually fixed that mistake, but we wasted a tremendous amount of time. It was just a lot of headbutting in politics and eventually it took us a lot of time to technically reintegrate things together and now it's clean and awesome, right?

**Kayvon Beykpour** (01:10:48):
ESPN can go live with behind the scenes content at Wimbledon and it's the same technology stack and the same user experience, the powers, Lenny going live from his iPhone. But I think that was one of the reasons why it was an example of failed execution that ended up wasting time, resources and just leading to a subpar product experience that other companies I think have avoided making such mistakes. Facebook being a prime example, as frustrated, I am with them as a competitor for having really taken over the use case for live video. Got to hand it to them, brilliant execution, have a lot of respect for them. So we made sure to not make that mistake moving forward.

**Lenny Rachitsky** (01:11:33):
I imagine there was reason for that. Partly I imagine this calcification of just like, we can't get you done, we just need to start a new team and do this thing. I imagine it always comes from like, oh, this makes sense. And then you realize, okay, this was a terrible idea down the road.

**Kayvon Beykpour** (01:11:47):
Yeah, it's that and also leadership. When you don't have unified leadership around these things, you end up making decisions that are in conflict with one another. They're just need a highly opinionated person at the top that avoids that kind of messiness from a.

**Kayvon Beykpour** (01:12:01):
That kind of messiness from a product and engineering standpoint.

**Lenny Rachitsky** (01:12:05):
You mentioned Clubhouse, so I think what's interesting is one, many people copy Periscope as a product. I don't know if you'll describe it as copying, but it feels like spaces very inspired by Clubhouse. Do you have just a current philosophy on when it makes sense to be super inspired by another product and build it into your existing product versus like, no, you should not do this?

**Kayvon Beykpour** (01:12:30):
I think it's always about doing the right thing for the customer. Everyone has always been shameless to be shamelessly inspired by other people's ideas. I don't think there's anything wrong with that. I think copying ideas can be done in poor taste and can be done with taste. I think some of the people who copied Periscope did so in poor taste, can't blame them. I wouldn't have done it the same way, but it worked. So you can't say it's the wrong thing. I think that it's possible to take ideas in good taste and take ideas in poor taste.

**Kayvon Beykpour** (01:13:07):
And I think with Clubhouse, we actually had been working on audio. Audio was one of those bets I mentioned that we structured very separately with a team of people, many of which were the former Periscope team, that when we wound down Periscope, I felt very strongly that there was still something to the idea of synchronous conversations. Because one of the famous things that I think we botched with Periscope is that we always... Our dream and our vision for Periscope and how we talked about it was was a mechanism for teleportation. You could see through someone else's eyes and be teleported somewhere else. It was like that was the story we told ourselves. That was the thing that inspired Periscope. And to a certain extent, a lot of people did use the product for that way. You could go see what it was like someplace in the world where it was something amazing happening or civil unrest happening or some important moment happening with breaking news or otherwise.

**Kayvon Beykpour** (01:13:58):
But it turns out the vast majority of our users were not using Periscope that way. It wasn't a rear-facing camera experience where you were showing someone the world, the vast majority of people were using it to just talk to other people. They were bored or they were lonely and they wanted to just have a conversation with other people. And it turns out video and audio is a very interesting way of doing that that allows for more nuance, more long-form conversation, more in-depth conversation, especially in contracts to Twitter, which has mechanics to really incentivize quick, snappy broadcasts that don't lead to much depth. And so when we shut down Periscope, we were like, man, we really need to enable a new form of conversation on Twitter that has some of those properties. And so we had a team that was working on a project that we sort of code named Hydra. Hydra because there were multiple heads on this monster and those heads are participants in a conversation.

**Kayvon Beykpour** (01:14:54):
And so well before Clubhouse was on the map, we had many different iterations of both video and audio only experiences that just didn't feel right, weren't working right, but we felt like we were onto something. And when Clubhouse came on the map, it really re-centered, it put into focus a user experience that felt a lot more right and now give them complete credit for that. Paul and Rohan and that team did an exceptional job crafting an experience that really enabled that mechanic and that premise of enabling these longer form conversations to shine. And so we did shamelessly seek inspiration from what they had done and what had worked and we put our own spin on it. The execution of Spaces within Twitter I think has some similarities, but also really took advantage of the mechanics that you had available to you in Twitter. It's a different product. And so we took the ideas that we felt were shortcuts to making the experience work and then we put our own spin on it. And so I have no problems with what we did there.

**Kayvon Beykpour** (01:15:55):
And having had experienced the pain of not moving quickly enough with Vine from the outside and Periscope having lived that experience, we were not willing to not be the winner with this use case. It is one of the projects I'm most proud of that we worked on at Twitter because we were very radical in our execution. Hydra went from this tiny project that six people were working on that no one knew or care about to, we made Spaces as the number one priority of the company literally above any other project period. And we put a bunch of people on accelerating that product and making it come to life within Twitter. And a lot of that was having felt the pain and burn of fucking this up with Vine and Periscope. And so I'm really proud of our execution. And it was also really energizing. I hope for the company to see that, wow, we pulled that off. So yeah, it was good. It was nice to have that full circle experience and also nice that, personally, I love that aspects of Periscope continue living on within Twitter.

**Lenny Rachitsky** (01:17:15):
I did not know that. That is extremely interesting. Speaking full circle, when I joined Clubhouse the first time, Paul was there introducing me to Clubhouse and exactly the way you described Periscope, so I feel like he drew some inspiration from you one step back.

**Kayvon Beykpour** (01:17:30):
Paul's amazing. I feel like we're kindred spirits and I could see... It was one of the things I love about that team is just you could just feel how palpable their excitement was and their passion was for what they were building. Another universe we could have worked together more closely, but I think what they built was incredible and we took inspiration from it for sure. Yeah.

**Lenny Rachitsky** (01:17:58):
So you've built some of the most successful, most beloved, most used consumer products. You continue to help other founders with their product. I'm curious just if you have any advice for how to get better at building consumer products in terms of maybe craft a product, product sense. What have you learned about what it takes to build a successful consumer product?

**Kayvon Beykpour** (01:18:19):
The best cheat codes for getting better at building products is just being a voracious user of products. And just trying new things, feeling out what works well, what doesn't, what you like, what you don't like. There's just no replacement for that. It's such an effective way of honing your own taste and seeing what's superficial but not useful, what's ugly but useful, what's beautiful and useful. And you hone that by having practice and building muscle memory. And so I think there's not a lot of science to it, I think. I mean obviously science can help you become more effective at lots of things. But I feel like I've just always been very curious about trying new things. I'm a very hungry consumer of new things that people are building and I'm not quick to judge. I'll try it even if it seems dumb because sometimes things that seem dumb at the beginning become very meaningful.

**Kayvon Beykpour** (01:19:20):
And so it's always been a very helpful cheat code for me. And it's also just personally interesting. Every tool, even the silly ones, people put their heart and soul into it and it's like an expression of themselves and it's always interesting to see that, to see people's creations and to learn from them and see what you like, what you don't like and how you might create something of your own that borrows from that. So if I could give people any advice through the lens of what's worked for me, it's that.

**Lenny Rachitsky** (01:19:51):
Speaking of trying new things, what are you up to these days?

**Kayvon Beykpour** (01:19:55):
I'm building something in the consumer space. I started the company with a couple of co-founders late last year. We're not quite ready to talk about it yet, but hopefully you'll be hearing from us pretty soon. But it's really nice to be back building something again, particularly building something with a small team again after seeing the opposite extreme with a really large company. We've just talked about lots of large company things. But yeah, hopefully you'll be hearing about it soon.

**Lenny Rachitsky** (01:20:26):
Oh man, I think this is breaking news. So mysterious and exciting. Kayvon, is there anything else you wanted to share or leave listeners with before we get to our very exciting lightning round?

**Kayvon Beykpour** (01:20:38):
No, no, I think we've covered quite a bit.

**Lenny Rachitsky** (01:20:42):
We have. We have indeed. With that, we've reached our very exciting lightning round. Are you ready?

**Kayvon Beykpour** (01:20:46):
I'm going to take a sip of water and then I'll be ready.

**Lenny Rachitsky** (01:20:49):
Okay, here we go. First question, what are two or three books that you've recommended most to other people?

**Kayvon Beykpour** (01:20:54):
I love reading sci-fi. I just feel like sci-fi and mystery books are so healthy for jogging the imagination. And so some of my favorite books are by Neal Stephenson, I love Cryptonomicon. I love Reamde. I love a book called Name of the Wind by Patrick Rothfuss, which is more like a fantasy book, but I just love escaping reality and thinking about sci-fi, thinking about fantasy is just, it's helpful for the soul and helpful for the imagination. So those are some of my favorite reads because it helps me. I feel like in some weird circular or wandering way, it helps me be more creative and imaginative. And by the way, that's true outside of reading as well. Some of the content that has shaped me, I feel like and help motivate my curiosity and a lot of things I built is sci-fi TV, right? Star Trek is incredible. We used to use as a metaphor for what Periscope was, we would think about Star Trek. It'd be really cool to be able to teleport or get beamed somewhere else in the world and we're not smart enough to go build that device, but what's the closest approximation to that that we can realize through software? Live streaming. So I think that kind of literature or content has always been inspirational for me and I think getting that through books is really healthy.

**Lenny Rachitsky** (01:22:30):
On that note, is there a favorite recent movie or TV show that's inspired you in addition to Star Trek back in the day?

**Kayvon Beykpour** (01:22:37):
I mean the most recent movie I saw in theaters was Dune Two, and it was incredible.

**Lenny Rachitsky** (01:22:41):
I just saw that.

**Kayvon Beykpour** (01:22:41):
It's insane. I also thought Oppenheimer was... I'm a huge Nolan fan. Oppenheimer was captivating. To have that level of high octane in a biopic consistently for two and a half hours is so hard to pull off. And I thought it was exceptional. TV shows we're watching Tokyo Vice right now, which I really like. I think one of the best TV shows I've watched recently, I mean Succession was amazing, but maybe I'll pull a less popular one, which is Devs also in the sci-fi realm. I think it was a Hulu show. But if you're interested in tech and AI and you want great acting in Nick Offerman, Devs is a pretty amazing show.

**Lenny Rachitsky** (01:23:28):
I haven't heard of that. Have you seen 3 Body Problem yet, by the way? It feels like it's squarely in your wheelhouse.

**Kayvon Beykpour** (01:23:33):
I haven't seen it yet.

**Lenny Rachitsky** (01:23:35):
Okay.

**Kayvon Beykpour** (01:23:35):
And it's funny, some content people are talking about it so much that I kind of want to not watch it now because I feel like it's really hard for shows to live up to the hype when you're mid-hype cycle. So I haven't gone around to it yet, but it's definitely on my list. I know it's the type of show that I would love, but I just haven't gone.

**Lenny Rachitsky** (01:23:54):
Okay, great. Do you have a favorite interview question that you like to ask candidates you're hiring?

**Kayvon Beykpour** (01:23:58):
The thing that I find is both very illustrative and helpful is just asking people to talk about something they worked on that failed and talk about something they built that succeeded as well. But I think you just learn a lot about self-reflection and their passions. But particularly their self-reflection. If they talk through something that they really cared deeply about that didn't work and why didn't it work? What were the takeaways? What did you learn from it? I think it teaches you about how willing people are to take risks. It tells you have they experienced failure, what they learned from failure. And so I think it's always, you just get to know someone really well. It ends up in a well-rounded understanding of a person, if you can dig into that.

**Lenny Rachitsky** (01:24:48):
Is there a favorite product you recently discovered that you really like?

**Kayvon Beykpour** (01:24:51):
I love Proplexity. It's really interesting to me how Proplexity is a product that fits in your life and replaces a product that is so ingrained in people's behavior, which is using Google search for some set of use cases. And it's just really incredible to me how quickly Proplexity took that over. It is very hard actually to rewire your muscle memory if you're used to using Google for searching for 15, 20 years or whatever. It was just amazing to me how quickly my go-to became Proplexity. And frankly, it's one of the only non-development tool AI products that actually has retained. A lot of people try and consumer AI products that just aren't really, haven't retained. But Proplexity is one that it's a daily driver for me. It's on my home screen and I love it. I'm very impressed by it.

**Lenny Rachitsky** (01:25:45):
Also a huge fan.

**Kayvon Beykpour** (01:25:46):
Yeah. Here's a bias one, my wife is actually working on a startup called Particle, and they're the news experience with AI. And what I love about what they're doing is that for the first time they're like they've rethought what the form factor and the unit of content for news stories should be. Articles are a failed format, is my belief, and certainly their belief. And so they've really come up with an elegant and engaging experience for understanding what's happening in the world in a way that's purely powered by AI. And it's awesome. Again, hashtag biased husband, but it's amazing. It's in beta right now. You can sign up on the wait list. The URL is particlenews.ai. They're letting people in on beta. If you sign up, use coupon code hashtag #KayvonLenny. That's not a real code. But yeah, so that's amazing. So that would be my second pick.

**Lenny Rachitsky** (01:27:00):
I have not.

**Kayvon Beykpour** (01:27:01):
So Crokinole is Canadian. I think it's a Canadian board game and it's amazing to me because I've never seen a game be captivating to all age ranges. I love it. I play with my friends. My parents over Christmas were obsessed with this game. My daughter loves. It's a physical game. You flick a puck, like shuffleboard style, but miniaturized with a totally different set of mechanics. And it was just like seeing this game captivate, people of all age ranges was mind-blowing to me and it's really fun. So maybe a curveball answer for you there, but I think those are some of the products that I've been really enjoying and appreciating lately.

**Lenny Rachitsky** (01:27:48):
These are awesome answers. What's the name of that game again? I'm going to-

**Kayvon Beykpour** (01:27:48):
Crokinole.

**Lenny Rachitsky** (01:27:53):
Okay. I don't don't know how to spell it, but I'm sure Google will help me figure it out. We'll link to it in the show notes.

**Kayvon Beykpour** (01:27:56):
C-R-O-K-I-N-O-L-E.

**Lenny Rachitsky** (01:27:59):
Great. I love the K in there. That makes it really fun. And by the way, I think it's also Particle.news looking at it. It's so cool. It's basically bullet points of news items and then it links to all the articles that have written about it. So it just summarizes, here's the things you need to know and it's beautiful.

**Kayvon Beykpour** (01:28:13):
Yeah, basically they consume and aggregate everything that's happening in the world by among other things, ingesting articles and then crafting these story modules through them that are summarized by AI. And then they let you actually interrogate the news and ask questions. So leveraging LLMs and tool calls, it's able to actually help you understand what's happening in the world. And they also are building a social layer as well. So it was very cool. I'll definitely get you in the beta.

**Lenny Rachitsky** (01:28:39):
This is actually amazing timing, because I was a huge fan of Artifact, the news app, and they're going away, so this is the next news app, so thanks for sharing that. Okay, two more questions. Do you have a favorite life motto that you often come back to or share with people that you find useful in work or in life?

**Kayvon Beykpour** (01:28:57):
Something that definitely shaped my work ethic and how I work that came from my first boss actually. When I was 14, I had a summer job basically replacing and doing maintenance on fire extinguishers. So I would drive into San Francisco, my boss would pick me up in his truck, we'd go to big commercial buildings, hospitals, high rises, and we would take all the fire extinguishers in the building, hundreds of them to the garage, empty them, fill them, tag them, inspect them. And that was my first job. And I don't even remember if I was getting paid. I was probably getting paid very small amount, but it was just first work experience. And I remember there was this moment that I had finished dealing with my extinguishers and I was just sitting in his truck twiddling my thumbs doing nothing. And my boss came up to me and was like, when you've got nothing to do, sweep never sit around.

**Kayvon Beykpour** (01:29:57):
And it was so funny, it was just very tiny moment, but I've never ever forgotten that. When you got nothing to do sweep. And it had such a profound impact on my work ethic of there's always something you can be doing to move the ball forward and being productive and being impactful. And I'm so grateful that Fred, my boss, had that moment with me. It was like, I don't even think he understands how impactful that was, but it felt so much a life motto, but it definitely stuck with me and shaped how I work.

**Lenny Rachitsky** (01:30:35):
I love that you shared that story. I found that quote and story in GQ Magazine turns out is where you talked about this and I was going to ask about it and I didn't and I'm glad you shared it because I love it.

**Lenny Rachitsky** (01:30:47):
Final question, we're going to go full circle. Scott Belsky, you're friends with him. What's something people would be surprised about or don't know about Scott, that might be interesting?

**Kayvon Beykpour** (01:30:58):
Well, I'll tell you one funny story and then I'll first tell you something I love about Scott. Scott is a great example of someone who I think has driven immense cultural change at a massive, legendary company in Adobe obviously. But the number of transformations that Scott oversaw and led and contributed to at Adobe are incredible. And I'm sure having a fraction of this experience at Twitter, I can appreciate how difficult and challenging and rewarding that was, right? Going from package software to cloud, going from non-AI to AI, going from discrete tools to an integrated suite that worked really elegantly together. I think Scott oversaw a lot of this stuff and it's pretty incredible to see that transformation have been so successful at Adobe. So I love that.

**Kayvon Beykpour** (01:31:55):
I guess a funny story about Scott that people might not know, I consider him to have been the first Periscoper. So Scott believed in Periscope before it was Periscope, before we had turned it into live video, we had a previous version of our beta that was static photo sharing, same vision, same concept, but the product was called Bounty. And it was like you put a pin somewhere in the world like the Tokyo fish market and someone would respond with a photo of what it looked like there.

**Lenny Rachitsky** (01:32:25):
I didn't know that.

**Kayvon Beykpour** (01:32:26):
Our vision was still to help you see through someone else's eyes, but the first manifestation was really static and had this marketplace dynamic, and it took us a while to get to the point where we were like, press a button, go live and have it be live video because by definition it's real time rather than static.

**Kayvon Beykpour** (01:32:42):
Anyways, before we built any of that, when we were playing with the idea and Scott was encouraging us to go in this direction, I remember probably the second time I ever met Scott, we did it FaceTime and he was at the TED conference, I want to say it was in Vancouver, and just to illustrate how cool it would be when he accepted the FaceTime and he's like, "Cool, and I'm going to take you on a Periscope." And he flipped this camera and started walking around the TED conference and basically pretending like he was prototyping the product, but using FaceTime. And it was such an amazing experience because having an investor essentially encourage you down a product direction by showing rather than telling, it was such a great encapsulation of how supportive Scott was and inspiring Scott was as one of our cheerleaders. And I respect him so much for everything he did to help Periscope make happen, and also for betting on us, because he was one of the first people who said yes to investing. He didn't know us, he just believed in us. And that helped everything else come together. And yeah, he's amazing.

**Lenny Rachitsky** (01:33:48):
What a mensch.

**Kayvon Beykpour** (01:33:48):
What a mensch.

**Lenny Rachitsky** (01:33:49):
We've got to get him back on the podcast. The story reminds me of your Elon's story, where he FaceTimed you, and it also makes me think about your lesson of building consumer products, just using it, being obsessed with it, Scott, just like, here's what it could look like. And actually using the product, not just talking about.

**Kayvon Beykpour** (01:34:04):
Yeah, he's a great example of that as well. He's definitely a gracious user of all tools and products, and that's why he has really great, really great product sense.

**Lenny Rachitsky** (01:34:15):
Kayvon, you're amazing. This was so freaking fascinating. There's so many nuggets here. Can't wait for folks to hear this.

**Lenny Rachitsky** (01:34:20):
Two final questions. Where can folks find you if they want to reach out and learn more and maybe follow up on anything if there's things you want to follow up on potentially? And then, how can listeners be useful to you?

**Kayvon Beykpour** (01:34:30):
People can find me on Twitter/X/whatever we're calling it these days. My handle is @kayvz, K-A-Y-V-Z. And yeah, if you're of this podcast and you're working on something cool and you need some help or advice or you're looking for an angel investor, don't hesitate to reach out and would love to try what you're building.

**Lenny Rachitsky** (01:34:51):
Amazing. And also check out Particle.news.

**Kayvon Beykpour** (01:34:53):
There you go.

**Lenny Rachitsky** (01:34:54):
Support the wife.

**Kayvon Beykpour** (01:34:55):
Exactly.

**Lenny Rachitsky** (01:34:56):
Amazing. All right, Kayvon, thank you so much for being here.

**Kayvon Beykpour** (01:34:59):
Thanks Lenny. Great to meet you.

**Lenny Rachitsky** (01:35:00):
Bye everyone.

**Lenny Rachitsky** (01:35:03):
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.

---

## [8/21] This will make you a better decision-maker | Annie Duke (author of “Thinking in Bets” and “Quit,” former pro poker player)

**Annie Duke** (00:00:00):
It's so incredibly necessary in improving decision quality to take what's implicit and make it explicit. It's not that intuition is crap, your intuition is sometimes right. If you don't make it explicit, then you don't get to find out when it's wrong.

**Lenny Rachitsky** (00:00:12):
When you look at companies that have read your book, what do you find are the brainwashing tactics that really stick?

**Annie Duke** (00:00:16):
People generally think the purpose of a meeting is for three things, discover, discuss, decide. The only thing that's ever supposed to happen in a meeting is the discussion part.

**Lenny Rachitsky** (00:00:25):
Something that comes up in product a lot is this idea of pre-mortems.

**Annie Duke** (00:00:28):
So a pre-mortem, it's great only if you set up kill criteria. Commit to actions that you're going to take if you see those signals.

**Lenny Rachitsky** (00:00:35):
You have a very interesting framework for how to think about decision quality when the outcome is very long-term.

**Annie Duke** (00:00:40):
There is no such thing as a long feedback loop. And the way you choose to shorten the feedback loop is to say, what are the things that are correlated with the outcome that I eventually desire?

**Lenny Rachitsky** (00:00:53):
Today, my guest is Annie Duke. Annie is the author of the bestselling book Thinking in Bets, and also her more recent book Quit: The Power of Knowing When to Walk Away. She's also a special partner at First Round Capital, which we spent some time on and is incredibly fascinating. Prior to this part of her career, she was a professional poker player. She's won over $4 million in tournaments, including winning a World Series of Poker Bracelet, and she's the only woman who's won the World Series of Poker Tournament of Champions and the National Poker Heads-Up Championship. Currently, she spends her time helping companies make better decisions. In our conversation, we cover the many lessons that she's learned from her friend Daniel Kahneman, who recently passed away. What simple change she's found has the most impact in a company's ability to make better decisions, how to make better quick decisions when the feedback loop is very long, and also why she doesn't actually believe in long feedback loops, how she changed the way that the partners at First Round Capital make decisions, which is incredibly interesting.

**Annie Duke** (00:03:58):
Thank you so much for having me.

**Lenny Rachitsky** (00:03:59):
It's my pleasure. I was telling a bunch of people that you were coming on this podcast and every single one of them was so excited that we were doing this, so I'm quite excited that this is happening. I want to start with a question about Daniel Kahneman. I know you two were very close. You did a podcast together. I know you grew to be good friends over the past few years. Sadly, he passed away about a week ago at this point.

**Annie Duke** (00:04:21):
Yeah.

**Lenny Rachitsky** (00:04:21):
I'm curious, what are some lasting lessons that you took away from your time with him? Maybe one or two things that stick with you and you think will stick with you?

**Annie Duke** (00:04:31):
It's hard for me to describe properly how humble this man was, and it seems so impossible because his influence was so huge and his intellect was so huge and his insight was so change-making in the areas that he worked. But he was so humble, he really wanted to hear what you thought. He said, "I don't know a lot", he would change his mind. It's funny, I got asked in a class that I was teaching about thinking fast and slow and someone was talking about how there's a lot of studies in there that didn't end up replicating.

**Annie Duke** (00:05:19):
And what I've seen from a lot of other people in the field who really where their work is defined by some line of work that didn't replicate, where they're really arguing against the fact that it doesn't replicate. Just trying to justify or say, "But no", or this and that. This real lack of open-mindedness to the idea that you know what? Maybe it turns out not to be true and that should be okay. But the thing about Danny was when you talked about it, he was the first one to tell you, "I wish priming wasn't in the book. It doesn't replicate." He was just so open-minded to the idea that he knows what he knows now, but he knows that he doesn't know everything.

**Annie Duke** (00:06:06):
Another thing that people don't know about him outside of academics I think are that he was one of the pioneers in something called an adversarial collaboration. So one of his favorite things, and he in some ways invented it, was find someone who really disagrees with you and then write a paper with them and try to figure out with them what's the study that would resolve the issue. So an example of that was Danny did work on happiness as it relates to wealth. Kahneman and a collaborator, Angus Deaton, they published a result that got a lot of press about the relationship between money and happiness, and the idea was money doesn't buy happiness beyond $75,000. So that got published in 2010. I'm sure if you ran that exact same study, it would be more than $75,000 now because it would adjust for inflation. But it was like the idea being once your basic needs are met and you're not that worried about paying rent and so on and so forth, it's not going to have that big of an effect.

**Annie Duke** (00:07:09):
But then a decade later, Matthew Killingsworth said, "That's not true that actually money and happiness are correlated through all the income levels. The more money you have, the more happy you tend to be." Okay, so this is a classic example where people will tear each other down sometimes and that guy's wrong and whatever. And instead, it was Kahneman's like, "All right, let's do it together." And they joined forces along with Barb Mellers to basically try to resolve that issue. He was just always seeking out, it was just like everything was like, why am I wrong? And he was eager and he was excited and he wanted to...

**Annie Duke** (00:07:56):
I remember having a lunch with him where I realized after the lunch that the whole lunch was him asking me questions about my work. Why is he asking me questions about my work? Right? He's Danny Kahneman. But he was just so curious about other people and he just made time for everybody. He just loved the people around him so much. And I think that in the end, it's hard to believe, but I just think that that dwarfs his body of work, which is spectacular. But he as a human being was just so spectacular. And I do think you hear all the time about people who are so incredibly brilliant. It's the brilliant but asshole thing, and it was just so the opposite with him. He was so kind.

**Lenny Rachitsky** (00:08:51):
That's amazing. And it feels like there's probably a strong correlation between people that are curious, always looking for how they're wrong, and finding time to spend it with people to debate and discuss and ask. Feels like there's going to be a strong correlation with that and finding really interesting insights uncovering new things.

**Annie Duke** (00:09:10):
Yeah, yeah, yeah. [inaudible 00:09:12].

**Lenny Rachitsky** (00:09:11):
Well, thank you. Thank you for sharing all that. I wish I had known him. Let's talk about decision-making. So there's two areas I want to spend time on. As one would not be surprised, decision-making and quitting. And I know that you've been on a lot of podcasts. I imagine many listeners have read your book or have heard a lot about the stuff that you teach. I'm going to try to come at this from a bunch of different directions and do it a little differently. First of all, I know you're a parent. As last I heard, you have four kids. I just had a kid, he's almost 10 months now.

**Annie Duke** (00:09:43):
Oh, congratulations.

**Lenny Rachitsky** (00:09:44):
Thank you. I'm curious, what your frameworks you find most helpful in parenting and in raising your kids that have stuck with you there?

**Annie Duke** (00:09:53):
Well, let me just first off say I get a lot of people who are pregnant who come and ask me for my advice about parenting. And I'll tell you the two pieces of advice I give people. The first is this, there's all sorts of parenting books, there's all sorts of styles. A book needs to sell, so they need to sell you something new or different or whatever, okay. But the only thing that matters really is that your kids know you love them, really know deep in their bones, know you love them.

And we can argue breastfeeding versus not breastfeeding or co-sleeping versus not co-sleeping or attachment parenting or sleep training, we can talk about all that stuff, right? Do you homeschool? Do you send them to private school? Do you send them [inaudible 00:10:49]? We can have lots of [inaudible 00:10:51], but it all dwarfs in comparison to your children know that you would lay down in the street in the front of a bus if it meant that they would be alive and happy. That's the number one thing I say. Number two is at some point, you will drop your baby on its head. So I bet this has happened to you already.

**Lenny Rachitsky** (00:11:18):
Well, yeah. Sort of. Okay.

**Annie Duke** (00:11:18):
Sort of, right.

**Lenny Rachitsky** (00:11:18):
Keep coming.

**Annie Duke** (00:11:20):
So here's the thing about babies, is babies can't move. And so you get very used to as a mom or a dad or you're sitting on the couch and you're folding laundry and your baby is right here next to you and your baby can't move. And then one day without warning, your baby can roll over. And you think it's fine because you put a pillow there or something, but you turn your back for a second because you're like whatever and then your baby falls on its head. It happened with every single one of my children. And they don't fall that far and whatever, but they're totally fine and you're not a bad parent. And it's just this, there are things you don't know and stuff's going to happen and it's not going to be perfect. And every little thing isn't going to have some lasting impression on your child because at some point, you will drop your baby on its head and you will not mean to, you didn't intend to.

**Annie Duke** (00:12:21):
But in my case, it was always like, oh my gosh, my baby can roll over. I did not think that was going to happen today. And gosh, by the time I got to the fourth one, it's like I'm chasing after one baby to try to get the diaper on and this and that, so then the other baby hits its head. So I think there's just a lesson in that which is like it's a small thing, don't sweat it and don't get mad at yourself because you made a mistake. It's like the mistake would be, oh, I realize my baby could roll over now. So now you should make sure that you're taking extra precautions about your baby rolling over off the couch. But it's really just a funny way for me to say your baby's going to hit its head or walk into a coffee table or get cut or whatever. It's like they're very resilient and you didn't do anything wrong as a parent, so don't beat yourself up about that. And then I do actually have one other thing I say.

**Lenny Rachitsky** (00:13:20):
Yeah, go for it.

**Annie Duke** (00:13:21):
Be having four, you have very little, you have no influence whatsoever basically on what your child's personality is. What you can do as a parent is make sure they say please and thank you. So what I find with parents of one is particularly if that one is very well-behaved, they think they're a great parent and they may be. That would be resulting. They may be, but once you have four, what you realize is like, oh, my parenting really didn't have anything to do with it. But my children do say please and thank you.

**Lenny Rachitsky** (00:14:01):
This is really valuable, good advice. I need to hear this. My wife is going to need to hear this, too. She's always worried about the soft spot on our kid's head and getting hit into some things.

**Annie Duke** (00:14:09):
No, it'll be fine.

**Lenny Rachitsky** (00:14:10):
Okay, great.

**Annie Duke** (00:14:11):
It's actually it's part of why it's there. Really, your baby will be fine. I mean, that's the thing. We used to cart babies around in the wilderness, we were living in case. We're fine, we're built for it. We're built for a much rougher world than the world that babies actually grow up in now. I will say my oldest child when she was in high school, just for whatever reason, she had no interest whatsoever in alcohol or drugs or anything like that. And I remember just feeling so smug about how well I had raised this child and how great she was, and oh, these other parents who clearly weren't doing a good job. I mean, I didn't really but because it's hard not to. And then my next child went through high school and I was like, [inaudible 00:15:02]. That's just a temperament thing.

**Lenny Rachitsky** (00:14:11):
It's a good example of resulting in action.

**Annie Duke** (00:15:08):
It is a good example of resulting, but all my kids have turned out fine and they're all very different, but yeah. But as far as decision-making is concerned, which is a totally different thing, I'll actually quote Danny Kahneman on this one. Nothing is as important as it seems when you're thinking about it, that's a really important one. One of the things that I used to try to do with my kids all the time was mental time travel, which is actually a very good decision tool. So they would be really upset about something and it could be something that happened at school or it could be like they were grounded for something or whatever.

**Annie Duke** (00:15:46):
And the thing is when you're in the moment, it just feels like so big. And the thing that I used to say and they say all the time now is this is going to be so great for you when you're 40 at Thanksgiving. You're going to be able to tell these stories to your children and it's going to be the best, like you should be thanking me so that you can talk about your crazy mother at the Thanksgiving table. And it allowed them to get some time and space from it to realize this is going to be funny at some point.

**Annie Duke** (00:16:19):
At some point, it's going to be a hilarious story that you tell people. No matter how horrible it seems now, it's going to be a hilarious story at some point when you're older. And it sounds like a fun thing I was doing with them, but it's actually a really good decision-making tool for us in general, right? Look, there are absolutely things that 20 years from now are going to matter, for sure. But most things, no. If you think about most things that ever happen to you, like you're 21 and your girlfriend breaks up with you or whatever and you just think it's the end of the world and you're never going to recover and all these things, but if you could get yourself like, well, how do I really think I'm going to think about this in 10 years? Am I still going to be heartbroken in 10 years?

**Annie Duke** (00:17:03):
Probably not. And I think that we need to get that perspective of time so that we can get out of the moment because in the moment it just feels so important and the feelings are so big. And it's like the focusing effect on this second and the feelings you're feeling right now are so huge that we forget the scope of time. And I think that that's absolutely one of the best things you can do with your kids, and you can do it in small ways too, right? You can choose to play this video game or you can choose to study for your task. A week from now when you get that test back, how do you think you're going to feel about those two choices? Right?

**Annie Duke** (00:17:43):
So that was a tool that I used a ton and it's just generally an amazing decision-making tool, just generally for people. It's one that I happen to use with my kids all the time. And then I would say that the other one was using the word nevertheless, which is this is a great leadership skill, the word nevertheless. So let's say my child got caught doing something wrong. I don't know, I found a bag of red solo cups in my backyard that they forgot to throw out after a weekend that I was away. That's hypothetical. So I'm grounding them and it's a lot of argument back, right? So they think this is a debate and they're giving me all of their input and their opinions on why it's unfair and all the other kids do it and the other parents don't get mad and whatever, whatever the argument is. You have to have the balance between them feeling heard, which I think is incredibly important that your children feel heard, and following through on what you know or believe is right.

**Annie Duke** (00:18:56):
So it's I hear you. Nevertheless, you're grounded for two weeks. I hear what you're saying and I understand. Nevertheless, this is what's going to happen. And obviously, the words that you can use for that might be different. You have so much more authority obviously over your children than you do in other places. But in the workplace, this is very good because employees gripe all the time at decisions that you make in leadership because they think they're right and they want their way. And to have the ability to say, I heard you and your input, trust me, was incorporated into the decision, nevertheless, this is the path we're going to take. Right or wrong, that's what we're going to do. So I think there's a lot of things that basically you can say. These are good things to do with kids, but they're actually just generally really good decision strategies.

**Lenny Rachitsky** (00:19:47):
I'm taking notes on all these things. These are going to be extremely useful.

**Annie Duke** (00:19:51):
Nevertheless is a really good one with children.

**Lenny Rachitsky** (00:19:53):
It connects to something Dr. Becky teaches, if you know her, of telling someone, "I believe you." When your kid says something and they're upset about something, start with I believe you.

**Annie Duke** (00:20:03):
Nevertheless.

**Lenny Rachitsky** (00:20:03):
And here's nevertheless, exactly. Fair enough. I think we're going to start having to pivot this podcast to a parenting podcast because there's so much stuff here, but I'm going to try to resist. So we've been talking about decision-making and frameworks and things like that. Something I wanted to ask you is how much better can someone get at making better decisions? So for example, say someone listens to all of your podcasts, reads your book, studies it intensely. What's the delta you find in somebody being able to make a better decision? And where [inaudible 00:20:35] comes from is Daniel Kahneman of all people. People ask him, "Do you just live such a optimal life now that you know all of these biases we have and all these mental errors we make?" And he's like, "No, I can't..." I think he said famously, "I don't, actually. I can't use these in practice. This is just stuff that I have learned, but it doesn't actually impact my day to day." So I'm curious just how much better can someone get? What kind of delta have you found in terms of making decisions?

**Annie Duke** (00:20:59):
Okay, so it depends on whether you actually do the things. I mean, I think that that's what the issue is. I think Kahneman did some work way back that started him on this journey. That was basically work on hiring and it was taking it from completely unstructured Lenny, saying, "I just know a great product manager when I see one", whatever that means, to me going to Lenny and saying, "Okay, I understand that you think that you see a great product manager you know one when you see one", but can you explain to me what that means? In the abstract, what are the things that you're looking for in someone that you want to fill that role? And we can then excavate that, right? And make what is implicit because you're applying some implicit model to how you're thinking about the person that you're interviewing and how they map onto the role that they're going to be, but let's make that explicit.

**Annie Duke** (00:22:04):
So we can make that explicit, we can turn it into a decision rubric, we can create a structured interview process out of that. And then what he found was after you've gone through that process, if you then use your intuition after having done that, not before, that then you actually can really drastically improve your hit rate on hiring. And in that case, it was from about a 50% hit rate to 65. So that's pretty huge, so that's a really big difference. The problem is nobody does it. So I can tell you that most of the conversations that I had with Danny that were about my work in particular were just him saying, "How do you get anybody to do it?" Now that's not to say that I would be better at that than him, it's that he didn't do my job, right? So he was an academic doing research and so on and so forth, I'm living in companies embedding for years.

**Annie Duke** (00:23:02):
I've been with one client for five years, one client for four years, one client for four years also, almost four years, three and a half years. And then I just took on a new client who I've been with for six months, and that's my whole client roster because I stay with them so long. So if you do it, the answer is quite a bit. Like at least in terms of Danny's work in relation to something pretty noisy like hiring, you went from 50% hit rate to 65% hit rate, which is huge. It's enormous. The problem is that the way that you can make decisions in order to be better at them is not supernatural to the way that humans make decisions.

**Annie Duke** (00:23:47):
I think we think a lot more highly of our intuition than we really ought to. We think very highly of our ability to notice things in the moment and act rationally toward them in a way that really we ought not to. We tend to think that we have insight that other people don't have when actually the other people probably have more insight into our situation than we do. So I think the answer is a lot with a big if, with an if you can get people to do it. And I think that's where the issue comes in. Now, the good news is that you can then reverse that and say if I'm willing to do it, think about what an edge I'm going to have over people who aren't willing to do it, right?

**Annie Duke** (00:24:36):
So we can think there's people who don't know about it, there's people who do know about it but don't do it, and then there's people who do know about it, but do do it. And it's that last group that's so tiny. So the answer is I think a lot, but nobody does it.

**Lenny Rachitsky** (00:24:54):
So maybe following that thread, when you look at companies that you've worked with or companies that have read your book and really dove in and started to implement some of your piece of advice to make better decisions, if you could look back at the ones that had an impact, what do you find are the mental models or frameworks or tactics that really stick that most often have an impact and the biggest impact?

**Annie Duke** (00:25:18):
I think the one that's easiest to implement is this. And it's so easy, and I just wish more people would do it. The best way to get somebody's opinion is independently of other people's opinions, independently asynchronously. So the way that I put is I want people to stop talking to each other so much. When we think about what did people generally think the purpose of a meeting is, they think it's for three things. Discovery, which is I want to discover what your opinions are, what your judgments are of something, right? So I want to find out what you think about something. So for example, if we're in product development and we're trying to figure out a timeline, we're trying to develop a product roadmap and we're trying to figure out how long it's going to take to release certain features or something like that, we all come into a room and we start yelling it out together.

**Annie Duke** (00:26:29):
It's so bad for decision-making, I can't even tell you. There's cross influence, the loudest person in the room tends to then have an outsized influence on the decision, the most confident person in the room tends to have an outsized influence on the decision. And that's great if the most confident person is also right, but the problem is that's not always so. And so that's the discovery piece, right? And we tend to do that in a group. And then there's discussion, which is I've now discovered the way that Lenny is modeling this problem or what his judgments are about certain things or his forecasts are, his estimates are. And now, we're going to discuss those ideas and we're going to discuss your ideas in comparison to my ideas, and that's going to happen in the group setting. And then there's also now, we're going to decide in the group setting. So we're going to make some set of decisions about say what the roadmap is going to look like.

**Annie Duke** (00:27:26):
Here's the thing that I think is the easiest to change, is to realize the only thing that's ever supposed to happen in a meeting is the discussion part. So we should absolutely be coming together as human beings to discuss everybody's judgments and opinions and the way they're modeling the problem and their forecasts. In particular, it's really good to come in and discuss the places where people are different. So you've been in many meetings, I'm sure about 80% of the time is double clicking. Oh, I agree. And I want to now we've literally just used different words to say the exact same thing because I'm in agreement.

**Annie Duke** (00:28:07):
If we can focus the discussion on places that people disagree, we're much better off. But so now we can take this, discover, discuss, decide. So I'm saying discuss is only supposed to happen in the meeting, that's the only thing that's supposed to happen in the meeting. So what's happening with the other stuff, the discover and the decide? Well, and this is the thing that I think I actually have been able to get people to do is discover what people think before you get in a room independently of each other. So how would you do that? Well, let's imagine that you're going to have a meeting about the product roadmap.

**Annie Duke** (00:28:43):
So you would say to yourself in this meeting, what are the opinions that I need to get from the people in the room? It could be a brainstorm. What are all the different features that we could develop? So it could be a brainstorm. Fine. Write to them independently and say, "Hey, free for off. Just come up with all the different features that you think would be reasonable for us to consider developing and then give me a forced rank from best to worst of your own ideas with some three to five sentence rationale as to why you have these things in this order." And so I could do that, but maybe we already have a list. I can send that out for a forced rank to everybody. Okay, so here's the final list of things we're really considering. Prioritize those for me, just force rank them. And then again, give me a rationale.

**Annie Duke** (00:29:32):
Give me a little bit of free writing as to why you think this should be, that you have these things in this order. Maybe we've decided now on what our top five priorities are. Great. I could, before the meeting, send the top five priorities out. "Hey, we've decided on this stuff." For each thing, I'd like to understand what you think a reasonable timeline is, how many sprints it's going to take, so on, so forth, right? So we can ask for that type of information so that we can start making estimates because that's going to affect budget and what we're going back to the board with and so on so forth. But regardless, just figure out what is the thing that we're going to be discussing in this meeting? And I'm going to send it out to everybody independently and I'm going to say, "Don't reply all, just send it back to me independently."

**Annie Duke** (00:30:14):
If it's a repeated decision, you can actually create a rubric that lives on Airtable or Coda or Google Sheets or whatever, I don't really care. And people can input their decisions there where they can't see anybody else's decision. So with Google, you can use Google Forms in order to do it, and then it dumps into a spreadsheet that only you can see. That's a great way to do it. So anyway, so you do that and now you can now see everybody's opinions that you then now send out to the group and say, "Everybody, look this over before we come in and discuss." So notice you're still working as a group, but you're working as a group where you're not in the same room together and talking at the same time. And there's a word for that, which is nominal group. So it's a group that at that moment is working independently and asynchronously of each other.

**Annie Duke** (00:31:03):
So if you can get people to do that, and I do have companies where I don't consult with them, but I've just come in and talked to them briefly or whatever that do actually implement that piece of it. That is a huge piece of it, that's ginormous. And then you do the same thing for deciding. So the decision should not be made in a room, it's made either. I love the one decision maker model, but not everybody's down with that. But you can have a vote forum where people go vote in private about the way they're leaning.

**Annie Duke** (00:31:39):
You can do a variety of things with that, but just don't do it. Don't do it in the meeting. And then just the last thing that I'll add, which is a muscle that you really have to exercise, is I think it's really important to understand that the word alignment in terms of we're all aligned as a group, right? The word alignment is stupid and it shouldn't be used. And I know I'm saying that very harshly, but it's true. It's dumb because it doesn't exist. You have 10 people in a room and they're all really different people with different opinions, and they're never going to come out of the room agreeing with each other. And it's really bad if the expectation is that they're supposed to, and it's really bad for a few reasons. One is it isn't reality, and that I don't like coming out of things without reality actually kicking.

**Annie Duke** (00:32:38):
So it's not reality. People don't actually agree, they're not actually aligned on the decision. That's just the thing that makes you feel better, right? So I think that that's problem number one. But problem number two is that if the goal is alignment, if the goal is agreement, then the meeting becomes coercive and you never want that. So the way that I'm supposed to talk about my ideas is to convey why I believe what I do, not to convince anybody that I'm right because if I'm working to convince people that I'm right, it becomes coercive and that's horrible. So you have to get comfortable with walking out of the room. This is the nevertheless. Walking out of the room understanding that once you have that discussion, it's not that Lenny, your opinion might change. It could, right? I could say my thing and it could be just so damn brilliant that you change your mind somewhat, right?

**Annie Duke** (00:33:37):
So you come maybe you're like, "Oh, I'm thinking about this differently and actually", but maybe you don't and you still believe a thing that's very different than me. And leadership has to say, "That's fine. I've heard both of you and I know that this isn't going Annie's way. Nevertheless, trying to think about what all of our goals are, this is what the decision is going to be and it's totally fine that you ended up not agreeing with each other because it's reality. And what it allows me to do is get a better sense of what the space of decisions is." So those things I have been able to get people to do and they're actually quite impactful.

**Lenny Rachitsky** (00:34:17):
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**Lenny Rachitsky** (00:35:14):
Audiences on LinkedIn have two times the buying power of the average web audience, and you'll work with a partner who respects the B2B world you operate in. Make B2B marketing everything it can be and get $100 credit on your next campaign. Just go to linkedin.com/podlenny to claim your credit. That's linkedin.com/podlenny. Terms and conditions apply. There's an implication here you touched on a bit that there's a DRI essentially, there's one decision maker. Sometimes people start to feel like, "Oh, my voice isn't heard. I don't have a lot of say, I can't be part of this decision." And you talked a bunch about just how to make people feel included, you get feedback along the way. But any advice there if you try to move to this model of making people feel like, "Okay, I actually have impact on where this goes"?

**Annie Duke** (00:35:58):
Yeah. So here's the really wonderful thing about moving from a coercive model to really, I guess you could say a model of curiosity, right? You want to be curious, not coercive, which means that the way that people in the meeting are talking about what their opinions are is in the mode of conveying information, not trying to convince anybody. So once we move away from that coercive model, and when I say coercive, I'm not saying anybody is purposely trying to set up a culture of coercion. Sometimes that's true, but for the most part, everybody's trying to do a good job and nobody's trying to set up a culture of coercion. But as soon as you say, "Are we all in agreement? Are we all in alignment?" And as soon as you're allowing people, and I'm sure you've been in these meetings, right? If you allow people to interrupt, if you allow people to say this, "I think you're wrong", "I disagree", "Here's why", those are all very coercive things to have happen.

**Annie Duke** (00:37:12):
Interrupting someone is silencing them. Saying, "You're wrong", well now, you become tribal and people aren't going to be open-minded and they're going to stake their ground and it's all really bad. So let's move away from that. Number one, that's already going to help. But when we think about the way that meetings normally happen, again, there's all this crosstalk and some people aren't speaking and some people are and so on, so forth. And then of course, not everybody feels equally heard. But when you work as a nominal group, let's talk about something as simple as we're going to make a forecast of how long it's going to take to launch this product feature. Okay. So I'm going to send out to everybody, what's your point estimate? What's your lower bound? What's your upper bound in terms of timeline?

**Annie Duke** (00:38:02):
And you could do it in some way, like how many sprints do you think is going to take whatever language you want to use? Now, everybody independently now gives their forecast with a rationale for why they believe that. And then you come into the room and you run a discussion where everybody's getting to say what their estimate was and why they believe that, and people are getting to ask questions. "I have a question" always is a clarification, it's just I don't understand. And as the leadership, the way that you would do it is, let me give you an example from a real one because that'll be easy. I did one of these discussions for a question about remote work, like what did the company want in terms of remote versus hybrid and that kind of thing. And so there was a lot of disagreement about whether whatever the policy was, it should be consistent across functions. Lots of disagreement.

**Annie Duke** (00:39:01):
So let's take somebody who was on the, no, it shouldn't be consistent across functions. So they now say why they believe it shouldn't be consistent across functions and they say things like, "Well, different functions have different requirements, right?" So there's some functions that have to be in the office, like if you're IT as an example, but there's other functions which are more collaborative and creative and whatnot where it makes sense for people to be in the office, whereas engineers doesn't really matter, right? So there's different needs of different functions in terms of how much they need to be in the same space. So I'm not agreeing or disagreeing with this, I'm just saying what somebody said. So now as a facilitator, I never say, "Oh, I agree." What I say is I just want to make sure I understood what you said and I reflect it back.

**Annie Duke** (00:39:57):
So I say, "So what I heard you say is that not all functions are created equal in terms of how well they work remotely or how well they work in person or what the flexibility might be. So what you're saying is there're functions that have to be in person. Period. And then other functions where that collaborative element being in the same office would be more important versus some functions where being remote is totally fine. Is that what you meant?" And then they have the ability to say, "Yes, that is what I meant" or, "Actually, I meant something slightly different. Let me say what that is", and then I reflect that back. Okay, so literally you're just going around, you're calling on people to do that, and then you're reflecting back what they say without offering your own opinion. I don't know, Lenny. Tell me how someone doesn't feel heard in that situation.

**Lenny Rachitsky** (00:40:48):
Yeah. Absolutely. I would feel so good if somebody just clarified and made it clear they know exactly what I'm saying, even if the decision doesn't end up the way I want.

**Annie Duke** (00:40:57):
Right, so that's the thing. And then what actually ends up happening is that the people in the room feel more, the psychological term would be endowed, more endowed to the decision. In other words, they feel like they have ownership over the decision. And whatever the decision is, they generally will see their selves reflected in it because they were heard. And they also will generally understand that nobody, no one really ends up with exactly every single thing that they wanted to see in the decision because they also get to see the true spread of opinions on the team. And what you see in that situation is that there's lots and lots and lots and lots of disagreement, which you don't see if you talk in a group. It narrows the space, right?

**Annie Duke** (00:41:48):
So for example, particularly if you're senior, if you say, "I think this is going to take three months to launch" and I was thinking four weeks, you're never going to hear four weeks from me, ever. But if we get those opinions independently, you will actually hear that I think it's going to take four weeks. You may tend to be more right there being more senior, but I may have something interesting to say. You should hear what I have to say. And this also allows me to learn from you, too. But because I haven't heard your opinion first, then I'm not going to conform my opinion to yours. So it actually spreads the surface area of disagreement that you see on the team, which then makes people feel much better about the decision not being exactly what they want because they recognize like, "Oh, this is actually a hard problem. People really disagree on this stuff."

**Lenny Rachitsky** (00:42:41):
Amazing. I think this is going to be really helpful to a lot of people. Just to close the thread on this little summary maybe is core advice here is brainstorm separately. So I guess first, there's discover, discuss, decide. To discover ideas completely independently, basically brainstorms. You're a big advocate of brainstorming independently, sitting on your own, thinking through ideas. And then bringing people together to discuss all the things they've come up with and especially where they disagree. And then ideally having one person that makes a decision once she or he has taken all the input.

**Annie Duke** (00:43:12):
Yeah, you can have one person. I mean, I work with people where it's like a partnership and there's six people who are going to vote, but they still do it independently. They go to a forum. So I don't know what your vote is. And all six people don't have to agree. I mean, I just think it's really important that once you get above an end of one, you shouldn't necessarily expect the people to agree, which I think is just really important. And this is good for more than just brainstorming. It's for forecasting, any kind of project planning, budgeting. Yeah, I mean, we do this, for example, at First Round, we have a structured forum for evaluating a company in terms of whether you should invest in it because there are facts and then there are the way that you model those facts in. So it's a lot, what are the investor's opinion of the founder and the product and that kind of thing.

**Annie Duke** (00:44:06):
And we just have structure around how we're eliciting those opinions, which is really helpful. The other thing that I'll just add to what you said is that you can actually be in the same room together and still discover information independently. So this will happen on the fly all the time where people are talking and they start talking. Something comes up, like someone suggests some new feature or something like that, and then people start saying, "Yeah, but that's going to take..." And you go, "Stop. Okay, everybody take out a piece of paper." So you can still get that same independence on the fly as well as doing it in advance. But yes, that was a very nice summary.

**Lenny Rachitsky** (00:44:49):
If this is just the one thing people take away from this conversation already, I think that could have a big impact. Speaking of First Round, one, we actually just had Todd Jackson on the podcast talking about-

**Annie Duke** (00:44:59):
Love Todd.

**Lenny Rachitsky** (00:44:59):
... love Todd, talking about product market fit. That episode will have come out before this episode. Also, so I asked Brett Berson, your colleague at First Round, what to ask you.

**Annie Duke** (00:45:00):
Oh, okay.

**Lenny Rachitsky** (00:45:08):
Yeah, yeah. By the way, your title of First Round is amazing, special partner. I've never seen that before.

**Annie Duke** (00:45:15):
I am. It's a title just for me.

**Lenny Rachitsky** (00:45:17):
Oh, my God.

**Annie Duke** (00:45:17):
I adore Brett Berson.

**Lenny Rachitsky** (00:45:19):
Me, too.

**Annie Duke** (00:45:19):
So I'm interested, I'm interested in what he said you should ask me.

**Lenny Rachitsky** (00:45:23):
Nothing too spicy, it's along the lines of what you talked about. So you said that you have a very interesting framework for how to think about decision quality in the short term when the outcome is very long term. For example, investing. Also, many decisions we make in business, things you need to decide now that you only find out years from now. Can you talk about your advice there and your insights here?

**Annie Duke** (00:45:43):
Oh my gosh, I'm so happy that that's the question that he asked.

**Lenny Rachitsky** (00:45:45):
Yep, I see.

**Annie Duke** (00:45:47):
Okay, so can I give a tiny bit of background to this?

**Lenny Rachitsky** (00:45:49):
Absolutely.

**Annie Duke** (00:45:50):
So prior to talking to First Round, I have another client too who, they're amazing, Renegade Partners at Roseanne Wincek and Renata Quintini. They're incredible. Before finally hooking up with them, and they work at different stages, First Round is C, obviously. Renegade is more like A B, tiny bit of dabble in C. But before running into them, I talked to quite a few venture firms who are interested in talking to me post-Thinking in Bets having come out, so this would be 2018. And there was a theme, there was a theme across them all. The first one was, well, the kind of decision-making you're talking about we don't need to do because we just know a good founder when we see one. So that is a sentence that came out of many people's mouths. And as I just said to you, okay, I have no doubt, but don't you want [inaudible 00:46:52] make that explicit?

**Annie Duke** (00:46:53):
There's all sorts of great things that come from making it explicit, not just in terms of the increase in decision quality in the moment, but it actually allows you to close feedback loops much better. So that was one thing that I found quite surprising. But the one that I really found very interesting was being told, "Well, what you're talking about doesn't apply because our feedback loops are a decade." And in poker, you got an answer right away. You won or lost the hand right away. So the way that you're thinking about decision-making doesn't really apply, until I met First Round and then Renegade where they actually heard what I had to say because I gave the same answer to everybody. So we'll just put aside that wouldn't you want to make that explicit. The first thing that I would say is, oh, poker is much noisier than you think because when I win a hand, I have no idea why.

**Annie Duke** (00:47:50):
So I do actually have to wait a long time because I have to play many, many, many hands before I actually know, do I actually have an edge? Because I actually don't know very much. On one hand, for one thing, I almost never see my opponent's card, so I'm left in a dust of uncertainty. But separately from that, the main thing that I said was, how could you possibly think that the feedback loop is 10 years? And this is what I think really caught First Round's eye because when I was talking to Josh Kopelman about it, he said, "Well, what do you mean? We don't get an exit for 10 years." And I said, "Oh, I'm sorry, do you invest? And then you go to sleep like Rip Van Winkle? And then you wake up 10 years later and you go, 'Hey, how'd that go?' Or are there all sorts of things that happen in between?" The simplest thing, the simplest thing is does it fund at Series A?

**Annie Duke** (00:48:46):
And the little pushback that I would get there is, but we're not investing for Series A. And I say, "Well, I know that", but have you ever had a company that exited for more than a billion dollars that did not fund at Series A? And the answer is no. And I'm like, okay. So it sounds like that's necessary. Might not be sufficient, but it's necessary. And it's certainly a signal that is actually more highly correlated with exiting out well than the investment at C. And then, oh, right, you have series B. And that's separate from all the other things that you can look at, like what you talked to Todd Jackson about. Is it achieving product market fit? We know that eventually for it to be successful, it's going to have to achieve product market fit, right? So you can look at what's happening with that, just general things about traction, what's happening with net new ARR, ability to retain top talent churn.

**Annie Duke** (00:49:55):
I mean, there's so many different things that you can look at, all of which are things that you know must happen in order for the big thing to happen. Okay, so what that means is that this is the big, I'm going to make a bold statement here. There is no such thing as a long feedback loop. You can make a decision about how long the feedback loop is. That is your choice to live in a long feedback loop, and you can choose to shorten the feedback loop. And the way you choose to shorten the feedback loop is to say, what are the things that are necessary but not sufficient? That's one thing, for getting a good exit, or what are the things that are correlated with the outcome that I eventually desire? And what that means is that when you're at the decision point, right? Like in First Round's case, I'm going to invest in a company.

**Annie Duke** (00:50:51):
What you have to understand is that you are making a prediction about how the world is going to unfold, how the future is going to unfold. And those things that you're predicting. You can track, and you can track them back to the decision and you can do it pretty darn fast, mind you. I mean, think about being in 2021. There were companies that were raising in A six months after seed. Today, it's a little more 16 months-ish. But even so, let's just say that that was the only thing that you decided to do. I'm going to forecast the probability that this company's going to fund at Series A. And then obviously, those companies start to fund or not fund at Series A and you're finding that out in 16 months. Here's my question for you, Lenny. Is 16 months shorter than 10 years?

**Annie Duke** (00:51:38):
So it's probably why he said to ask me that question because I just really do. I mean, I have a very strong opinion about this. The feedback loop is as long as you choose it to be. And if I take that back to some of the things that I heard early on when I was talking to people, what I would say is that I think that there is a certain amount of psychological safety in allowing the feedback loop to stay long because really of two main factors. One is that, look, if I was early into Uber and now I'm a celebrity investor or something, I don't really want to know if I'm good or not. Do I? Right? I don't really want the world to know that. I mean, if I'm good, that's great. But it feels like they already believe that I'm good because I happen to be early into Uber.

**Annie Duke** (00:52:47):
So since people already think I'm good, I'm just losing to that decision, psychologically speaking. Not investment quality speaking, but psychologically speaking. Okay, so here's the problem though. Why was I early into Uber? Did I have an insight into a real pain point in a developing market, blah, blah, blah? Or did my buddy start Uber and I was like, "Sure, I'll give you some money?" Right? I mean, obviously, I'm talking about the extremes here, but we don't actually know what the decision quality was, right? All we know is that you had a good result and given that you had a good result and people think very highly of you, what are you going to gain? Right? So it's so nice to just let that feedback loop sit there and allow people to have the opinion of you. That is really nice, feels good, right? And not actually find out the answer because why would I want to?

**Annie Duke** (00:53:51):
Unless you're really super focused on decision quality, then you would want to do that. So that's part of the psychological safety. And what that goes to is, the real core of it is that it's very, very difficult for human beings to deal with feeling wrong in the moment, even if it helps them in the long run. It's just hard. And the tighter the feedback loop, the more that you risk finding out you are wrong in the short run. Now that helps you to learn and improve your decision-making if you're focused on it and you're good at it, right? That's going to help you. And then in the long run, you're actually going to do better. But human beings are notoriously good at trading off the long run just to feel good in the short run. That's why we're all eating chocolate and cupcakes and stuff that we know is bad for us because it feels good.

**Annie Duke** (00:54:45):
And so much of our decision-making is trying to advance this positive self-narrative and the idea that yeah, we're going to have a more positive narrative ourselves in five years if we do some stuff. Most of us are like, "No, I don't really want to make that trade. I'd rather just feel good now", and I can use the fact that we are living in power law, under the influence of power law. I can use that to just confirm a lot of things that I wish to believe that are true of me. And if you take that away from me and you take the uncertainty away from me, it's going to be really hard. And I will tell you that's what I love about both Renegade and First Round is that they're just like, I want to know. It would be such a horror for me to think that I was making good decisions when I actually wasn't. And that's what really matters to me and I think that it's just so special.

**Lenny Rachitsky** (00:55:47):
Hearing all this makes me want to be an LP in First Round. Not that they would let me in there, but just knowing that you're in there futzing with everything and the way they're thinking is really inspiring. I'm curious if you could share an example of anything that they tweaked as a result of this analysis that you did and how they evaluate.

**Annie Duke** (00:56:05):
Well, first of all, let me just say they didn't really record a lot about their decisions when I first came in. They voted and they had a record of the vote so they knew who said yes and who said no, but they didn't have a lot of other information. So the first thing that happened was just that. Okay, what do we really think is the way that you would model whether you should invest or not invest in? Very broadly, you would say you're reading the market, the team, the founder, the product broadly. We're going to make sure that those opinions aren't just like it's good or it's bad, but it's on a scale of one to seven so that we can actually get some precision and some spread among the partners in terms of, say, strength of market. We're going to make sure that we have shared definitions of those things, which you'd be surprised people don't.

**Annie Duke** (00:57:00):
So when I am thinking about market and market quality, I might be thinking about something very different than you. So we want to make sure that we have a shared definition of that, and that's reflected in something that we would call mediating judgments, which are judgments that you make related to market prior to actually judging what you think of the market in general. So you could think of something like competitive landscape, so you would judge that. So that turns into what these mediating judgments are, which is basically an implied definition.

**Annie Duke** (00:57:30):
So you create that, and then you also think about what are the forecasts that are important. One thing that you already know is you're going to forecast the probability the company funds at Series A. So that was a huge change, just a very different way of making decisions. What we've been able to do with that now because I've been there for five years is we now can actually look, say the partnership as a whole, and look at these ratings that they're making of the component pieces of parts of how they're modeling, like what makes a good investment, these forecasts that they're making.

**Annie Duke** (00:58:03):
And we actually know how these companies have now unfolded. So in the simplest sense, we know whether hundreds of companies have funded at Series A or not. And now, we can actually look and say, how good are the partners at actually forecasting this thing? Right? Are they random? Are they better than random? And we actually know that and we can feed that back to them so that they can understand their own accuracy around these pieces of the decision because the fact is that whatever a seed investor says to you, whether that company is going to fund at Series A is part of their decision. It's included in the decision. So they're making that forecast whether they make the forecast explicitly or not. So what we're saying over at First Round is let's make it explicit because you're doing it implicitly anyway, and then we can actually start to look at your accuracy.

**Annie Duke** (00:58:58):
We can now feed that back to you and let you know how accurate you are, which will then help you to become more accurate, right? We can also look, because we know in any given vintage what are the best companies or what are the worst companies. Remember, we're having people do these ratings on a scale of one to seven of say the quality of the market, and we can look across the partnership and say, "Look, Lenny, when you think the market is great, how does that map onto how well the company is doing in the future? When you say the market is terrible, how well does that map onto how that company is doing, how that company ends up doing in the future?" And I can come to you and I can say, "Oh, Lenny, by the way, your judgments about market are amazing."

**Annie Duke** (00:59:47):
You know a good market when you see one and it's really mapping on in a great way onto how that company unfolds, but you're not so great with founder, or maybe you're great across the board, or maybe you're not. So we can now start to give people, we can give the partners insight into their own decision-making, not only to allow them to improve the decision-making, but also to allow them to understand not to over index on certain things that maybe aren't as predictive as an example for them. We also can change the rubric based on the evidence now.

**Annie Duke** (01:00:22):
So the first version of the rubric is always taking the intuitions of the partners and making those explicit, but then we can start to loop those back together and understand, well, maybe this thing that the partners thought was important actually isn't predictive across any partner. For example, we can start to develop the rubric based on the data. These were all things that weren't possible because prior to that, if I had come in and said, "Well, let's look at decision quality", how would I do that? I mean, I have no idea why people were... I just know whether they said yes or no. And so it's very difficult to them to start to do some really serious refining of the decisions if I don't have that information.

**Lenny Rachitsky** (01:01:08):
I desperately want to know which partner it makes the best decisions. I know you're not going to share them.

**Annie Duke** (01:01:13):
No, I'm not going to. The partnership as a whole is excellent as we know. And this is what I will tell you is that all partners have strengths and all partners have weaknesses, and they're not perfectly overlapping, which is wonderful, right? I mean, that's one of the things. It's like what's really wonderful, and I think it shows the power of why would you have more than one person having input into a decision, is some people are very strong on rating a particular aspect of market, or some people are very strong on rating a particular aspect of the founder. There's overlap and then there's things where Todd is uniquely great at something, or Josh is uniquely great at something, or Bill is uniquely great at something. So that's a wonderful thing about it is that everybody has strengths and everybody has weaknesses and they're not perfectly overlapping. So this is where you can see getting that spread of opinions and really understanding, breaking that decision down into its component parts really shows you the value of diverse opinions as input into a decision.

**Lenny Rachitsky** (01:02:21):
I could talk about this thread forever. Maybe let me just ask one more question just because I'm super curious. Is there anything surprising that stands out, that came out of this analysis so far? Just like, oh wow, maybe market isn't as important as we thought or this person is amazing at-

**Annie Duke** (01:02:34):
Yes. So I think just generally speaking, when you're creating the initial decision rubric, there are things that people are really pounding the table about that they think is especially important in making a decision. And one of the things that we found is that sometimes their intuition was absolutely right. The thing that they were pounding the table about is incredibly predictive, not just for them but other partners. But sometimes it's not at all predictive, and these are equal table-pounding situations. So let's say you're pounding the table about something, sometimes the thing you're pounding at the table about is predictive for you and for all the other partners that it's actually quite predictive about how the company does. But sometimes when you're really pounding the table about something, it's not just that it's not predictive for the other partners, it's not predictive for you.

**Annie Duke** (01:03:33):
And I think that what's really important to understand about this, and this is why it's so incredibly necessary in improving decision quality to take what's implicit and make it explicit, is that our intuition is sometimes right and sometimes wrong. It's not that intuition is crap and your intuition is just completely wrong, I mean obviously, that can't be true. We would die, right? So your intuition is sometimes right, but it's also sometimes wrong. And if you don't make it explicit, then you don't get to find out when it's wrong.

**Annie Duke** (01:04:07):
You don't get to find out when it's off base, and that's a disaster. So that's the thing that I think is really interesting is that you have equal vehement and confidence that this particular factor is really important. And sometimes it is and sometimes it isn't. And it's so surprising because we're talking about people who are true experts who are great, and I think that we all just have intuition about intuition, right? You just intuit that if they're so amazing, clearly their intuition about what's important would have to be good, but not necessarily. That's the thing, not necessarily. Yeah, I think that was probably the most exciting thing.

**Lenny Rachitsky** (01:04:56):
Keeping it mysterious, but I still appreciate you sharing.

**Annie Duke** (01:04:59):
Well, I have to keep it mysterious.

**Lenny Rachitsky** (01:05:02):
Yes, I understand.

**Annie Duke** (01:05:03):
I can't give away the trade secrets.

**Lenny Rachitsky** (01:05:06):
I wanted to touch on a different framework that I've heard a lot of companies actually using, and something that comes up in product a lot is this idea of pre-mortems, which is essentially think ahead of time what might go wrong. Can you talk about this? Because I think that it's something that's easy to implement, really powerful, and a lot of people are actually doing this.

**Annie Duke** (01:05:25):
Yes, okay. So a pre-mortem is great, but only if you attach a pre-commitment with it. So I just want to be super clear about that. What you find with pre-mortems, this actually work. I actually did this work with Maurice Schweitzer and Linnea Gandhi, who are both at Penn. Then when you have people do pre-mortems, it generally doesn't actually change their plan very much or it changed their behavior. So I think that we have the feeling that if you do a pre-mortem and you think what are the ways that things might go wrong, that that's going to change your plan, but probably not unless you're specifically using it for that purpose and you say, "Okay, we're going to do this, but let's think about how we might change our plan in light of this information." But I think what's actually more important than that is what a pre-mortem allows you to do is to set up kill criteria.

**Annie Duke** (01:06:18):
So kill criteria are just a set of signals that you might see that would tell you that it's time to pivot or stop because once we actually launch something, we're very, very slow to decide to quit. I'm sure that everybody has felt that way before. Things go on way too long, even like they're over budget and you've blown the timeline. And when you finally shut it down, you realize you should have done it a lot earlier. And this is true across the board because of a variety of biases. The most well-known, and probably the biggest influence is something called sunk cost, which is that feeling, but then I'll have wasted all the time and effort that I've put into this already. So it's taking into account what you've put in in the past and deciding whether to continue on in the future. So what we want to do is actually just get better at that thing. So understanding that when you've gotten to the pre-mortem process, you probably are going to launch it, like it's probably going to be the case.

**Annie Duke** (01:07:22):
Use the pre-mortem to set up kill criteria. So I'll give you an example from a sales team that I worked with. Basically, I sent them out a prompt, all the IC is a prompt that was, imagine that you got a lead through an RFP or RFI and you worked on it for six months. And now, it's six months later and the deal is dead. Looking back, you realized they were early signals that that was going to be the case, what were they. So this is a pre-mortem. What are the things that you saw that would tell you that this was going to go south? And they came up with all sorts of ideas. Notice this doesn't mean they're not going to start off pursuing the lead, right? But they saw, they came up with all sorts of signals. So I'll just give you three of them.

**Annie Duke** (01:08:12):
The RFP RFI was clearly written with a competitor in mind, so they felt that was a very bad signal that was probably going to go badly. Another one was the customer didn't want to demo, they only wanted to talk about price. Obviously, that's quite bad. And another one was after the first few meetings, they couldn't get a decision maker in the room, right? So it was a much longer list than this, but those are three. So for each of those, that now becomes a kill criteria if I see this thing and now you attach an action with it. So in the case of price, they actually just said, "We should kill it." If they literally don't want to demo and they're only asking about price, they're just trying to beat up somebody else on price like we're a box-checking exercise. So there, they just said, "We're going to kill it. We're not going to pursue the deal anymore."

**Annie Duke** (01:08:59):
So this is great because salespeople will pursue deals forever and leadership is like, "Well, why did you stop pursuing that deal?" And they get in trouble for it. So this is going to help with that problem, right? In the case of the RFP RFI was written with a competitor in mind, they have an action associated with that as well, which is ask them directly if they're working with a competitor and how far down the road they are, depending on the answer you would kill or pursue. In the case of we couldn't get a decision maker in the room, offer up executive alignment at the next meeting. And if they say sure, great. And if they say no, kill.

**Annie Duke** (01:09:35):
So that's actually what I feel is the best use of a pre-mortem is to say, I'm going to try to figure out what those signals are along the way that things are going badly. And now instead of just hoping that when I see those signals, I actually act rationally, which is a hope that it will not come true. That's why there's many people who climb Everest in the middle of a blizzard, even though they shouldn't be doing that. Use the pre-mortem to now create structure around those signals that you've spotted and commit to actions that you're going to take if you see those signals. And I think that's the best use of a pre-mortem.

**Lenny Rachitsky** (01:10:15):
That's really helpful. And it's interesting how many of your examples come back to just of a framework that you often talk about, which is make it explicit what is implicit. There's another example that the First Round example is a great example of that where it's just, here's all our assumptions, they just make them actually explicit and just shows how much [inaudible 01:10:32].

**Annie Duke** (01:10:32):
Right, then you can examine them. You can examine them, people can discuss them, you can figure out if they're wrong or right or whatever. It's like, I want to be very clear, I'm not anti your gut or your intuition. I think it's probably sometimes pretty good. I just want you to make it explicit, that's all.

**Lenny Rachitsky** (01:10:55):
Okay. So we didn't have time to get into quitting, which is your more recent book. Maybe we'll do a follow-up episode specifically thinking about quitting, but let me just ask-

**Annie Duke** (01:11:03):
It's my fault because my answers are long.

**Lenny Rachitsky** (01:11:05):
It's my fault.

**Annie Duke** (01:11:06):
I apologize to everybody.

**Lenny Rachitsky** (01:11:06):
No apology is necessary. We'll have plenty of time in the future, hopefully. Well, let me just ask one question. I found this one quote from you where you said you should assume that if you're thinking about quitting, it's already probably past the time that you should have quit. Do you still believe that? Is that generally a good rule of thumb? And just any takeaway, tip, lesson on quitting as our one question on quitting?

**Annie Duke** (01:11:29):
So the data is pretty strong that by the time you quit, it's probably long after the [inaudible 01:11:37]. And it's really just because, look, when we start things, we're starting things under difficult circumstances, which come from the uncertainty of the decision to start something. So when we start something, luck is going to have an influence on the outcome, which obviously, we have no control over because luck isn't in our control. And then there's also hidden information. So what happens is that after the fact, we know that we're going to learn new information and it can make it very hard to start things because we want to be more sure than we actually need to be. It's why Bezos has the 70% role to try to roll people back and be willing to accept that uncertainty in the starting decision. Now the good news is that when you learn that new stuff and the new stuff that you learn is, "Ooh, if I had known this, I wouldn't have started it", you have the option to quit generally.

**Annie Duke** (01:12:28):
So that's the good news. The bad news is that the same difficulties that apply to the decision to start apply to the decision to stop. In other words, we're making that decision under uncertainty as well. So we're not going to know for sure whether it would've turned out well or poorly unless we continue to do the thing that we already started. And we don't like to walk away from things unless we know for sure. So as Richard Thaler put it, most people won't quit until it actually isn't a decision. In other words, the whole thing is blown up, the startup has no money, or you're up on Everest and the blizzard is literally upon you and you're stuck in it. Or I think as he said, until you've fallen in the crevasse already, then you'll make the decision to quit because then you know how it was really bad. So people generally, for example, don't quit their jobs until they feel they have no other choice or relationships or projects or products that they're developing, it all applies because we want to know for sure.

**Annie Duke** (01:13:35):
And then on top of that is the fact that there is this issue of sunk cost, which is when we walk away, we feel like we'll have wasted everything that we've already put into what we're doing. But of course, waste is a prospective problem, not a retrospective one, even if we treat it like a retrospective one because it's the prospective one. Well, if you wouldn't start this today, then that means that everything that you're putting into this going forward is the actual waste, right? But we do that all the time. We go forward with things that we ought not to be going forward with because we're trying to protect the resources that we've already sunk into it in the past. Then there's other issues that have to do with, for example, endowment, the ownership over the things that we've built. This is particularly bad in product because we're building things.

**Annie Duke** (01:14:18):
And once we build things, we own them. And once we own them, we don't want to give them up and we actually value them more highly than identical things that we don't own. And then there's issues of internal and external validity, which is really just a fancy way to say your identity. How do other people view you? How do you view yourself? Do you feel like you failed? And what that means is that by the time, there's so many biases against stopping that by the time you're actually even thinking about quitting, it's probably already past the time that you ought to have quit. But we'll still continue on until we know for sure we didn't have any choice because here's the thing. When you walk away from something and someone's like, "Hey, why'd you stop that?" And you're like, "Oh, I had no choice" and you tell them everything that went wrong and, nobody's going to question you.

**Annie Duke** (01:15:04):
They're going to be like, "Oh, well, it sounds like you put in your best effort." But if you walk away early, people are like, "What?" So just quickly, I'll tell you I think just one of the best stories of this that I've got in my pocket here. Let me pull it out before the end. So Stewart Butterfield creating a product called Glitch, and Glitch is a massive multiplayer online world-building cooperative game. Releases it, this is in the aughts, and it's like a huge hit with the critics. It's Monty Python meets Dr. Seuss, it's an incredible whatever. They're getting tons and tons of great word of mouth and PR not doing any paid marketing. They have incredible investors in Andreessen Horowitz and Accel, they have $6 million in the bank and they 5,000 have diehard users, meaning users who use the game who play over 20 hours a week.

**Annie Duke** (01:16:04):
The issue is that customer acquisition was a beast that for every one person who was playing over 20 hours a week, there were between 95 and 99 people who came for five minutes and left. So obviously, this is a customer acquisition problem, which everybody knows. So they make an agreement in 2012 that they're going to do paid marketing, which they do for six weeks. And during that six weeks, their acquisition of new users, it's growing like six to 7% week over week, which is amazing. And at the end of that six weeks, this is November of 2012, at the end of that six weeks, that Monday morning, Stewart Butterfield writes a note to his investors and co-founders and says, "I woke up this morning with the dead certainty that Glitch was over."

**Annie Duke** (01:16:58):
Now notice nobody would do this in this case, right? But this is what happened is that the issue is that you really have to see is this worthwhile or not? Would I start this today? That's a forecast of the future, right? And what he did was some back-of-the-envelope math, and he said, "Look, if we continue to acquire customers at the weight that we've been acquiring them at the cost that we've been acquiring them, it's going to be 31 weeks until we break even." But that's an absurd assumption because customer acquisition costs, it's going to go up. Cap has to rise because we're going to saturate the core gaming market, so it's got to rise. So what he realized at that point was that this was not a venture scale business, and he was in this for a venture scale business. So even though nobody else saw that he was supposed to shut it down, he saw he was supposed to shut it down.

**Annie Duke** (01:17:45):
And not only that, he saw that he was supposed to shut it down for his employees who were working for equity, and he had now realized that the equity wasn't worth their time and that it wasn't fair to them to keep going with it. So he shuts it down. Obviously, that feels... Who does that? Right? And he will actually tell you that he knows he should have shut it down before the marketing push, but he needed the marketing push to prove it to himself that he was seeing the future clearly. Now, the code to this story just quickly is two days later, he's like, "Well, I'm a startup guy. I want to start something", and he's got this internal communication tool that his team is using in order to develop this product that everybody loves. And he says, "Actually, they really like that. Maybe that should be the next product."

**Annie Duke** (01:18:29):
So he goes and talks to the investors, they roll their money over into that. And that thing, which had no name at the time, now gets a name which is searchable log of all company knowledge, which is Slack. And so I think this is the important thing to realize is that we get so focused on, "But what about everything that I've put into it?" When what we forget is that when you're doing something, there's not just the cost of doing something that's not worthwhile that's direct, but there's also the cost of not being able to devote your attention to other opportunities that might be available to you. And as smart as Stewart Butterfield is, he couldn't see Slack until he quit Glitch. And that is a true cost that he would've born of continuing with Glitch. If he had continued with Glitch, Slack would not be something that we're all using today.

**Lenny Rachitsky** (01:19:21):
That is an incredibly beautiful way to end our conversation. I feel like I have at least a billion more questions to ask you and on the other hand, I feel like we've also helped a lot of people make much better decisions through this chat so I'm really thankful that you made time for this. Two last questions. Where can folks find you online if they want to learn about the stuff you're up to in case they want to work with you? And how can listeners be useful to you?

**Annie Duke** (01:19:43):
You can find me at annieduke.com if you're interested in working with me. I have a Substack, Thinking in Bets. Please go check that out. I teach a class on maven.com twice a year on effective decision-making. So if you're interested in that, you can go to Maven and check it out. My next cohort at the moment is in September, although I might do one in May. I'm not sure. But in terms of people can help me, I co-founded an organization called The Alliance for Decision Education. We're trying to bring the kinds of knowledge that we have about improving human decision-making in adults to K through 12 education to make the world a better place. So I would love it if people could go look at that. If you're interested in it, get the word out.

**Lenny Rachitsky** (01:20:26):
Amazing. So we'll link to all those things in the show notes. Annie, again, thank you so much for being here.

**Annie Duke** (01:20:32):
Thank you. Thank you so much, this was so fun.

**Lenny Rachitsky** (01:20:35):
Same. 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.

---

## [9/21] Business strategy with Hamilton Helmer (author of 7 Powers)

**Hamilton Helmer** (00:00:00):
Warren Buffett famously said, in business.

**Audio** (00:00:02):
I look for economic castles protected by unbreachable moats.

**Hamilton Helmer** (00:00:04):
Power requires a benefit and a barrier, so he's taking care of the benefit part by saying a castle, you have to have a pretty good understanding of why it's a castle and not a shack.

**Lenny Rachitsky** (00:00:15):
So in a lot of decks it's like, "Oh, we have the most amazing team. We move the fastest." You mention how rarely is that actually a power?

**Hamilton Helmer** (00:00:20):
You're on a treadmill and if you stop running on that treadmill, you get creamed, but it's not power. The things that drive operational excellence can be mimicked.

**Lenny Rachitsky** (00:00:30):
Let's actually talk about achieving these powers.

**Hamilton Helmer** (00:00:32):
There's a thing called power progression. There are times when certain types of power are available. The path to power is where the rubber meets the road.

**Lenny Rachitsky** (00:00:44):
Today my guest is Hamilton Helmer. Hamilton is a legend in the world of strategy. He's the author of 7 Powers, which outlines a framework for identifying and developing sustainable competitive advantage. It is widely considered to be the best book on strategy and people like Patrick Carlson, Peter Thiel, Reed Hastings, Daniel Eck, and so many more leaders credit the book and Hamilton's teachings for helping them build durable lasting companies. In our conversation, Hamilton shares what sources of power startups can start developing early, which types of power companies often think they have but they don't, how power relates to strategy and moats, when to start thinking about power as a startup and also what individual product managers and non-leaders can do about these insights about power. Also, how Hamilton sees AI impacting various entry and the sources of power. He also gives a preview of his new book that he's working on currently and so much more.

**Hamilton Helmer** (00:04:12):
Hi Lenny, a pleasure to be here.

**Lenny Rachitsky** (00:04:14):
It's even more my pleasure. I want to start by talking about when power becomes important. When do you recommend founders start thinking about power in terms of pre-product market fit, post-product market fit? Is it worth spending time thinking about power early? Obviously it's good to think about a little bit, but how much and how seriously should founders be thinking about it before they found something that people actually want?

**Hamilton Helmer** (00:04:38):
One of the things that has really surprised me in the last five years has been that my understanding of the answer to that question has changed. And before I thought it was you do product market fit and then you do strategy, and if you try and put strategy before product market fit, it is not much you can do with it. That's wrong. Actually, I mentioned before one of the great pleasures for me in my work is being able to talk to company founders and one of the things that has surprised me is that conversations with them, even at an early stage about strategic matters have a richness and relevance to me that was unexpected.

**Hamilton Helmer** (00:05:41):
And founders are practical people. I mean it's very hard to do what they're doing and they have to be extremely focused and choose what's worthwhile spending time on. And so in observing their reactions and that dialogue, I could see that there was something going on that was meaningful to them. And this second book we're working on, we'll tease out why that's so more, but the answer to your question is when should you thinking about this? The answer is always. And that's an odd answer. And so even before you have product-market fit, it's worth thinking about strategy. Now it's not strategy in the sense of this fully articulated strategic planning, we're going to do this, these are going to be the competitors, this is how we're going to answer them. This is how we'll price. Not like that at all. At the earlier stage, you can imagine wildly more degrees of freedom and the questions are of the business propositions that you're thinking of in trying to get to product-market fit, what are the underlying characteristics that might tilt them towards the availability of power or not?

**Hamilton Helmer** (00:07:10):
And those actually are meaningful conversations and certainly by no means certain. You're tilting probabilities, you're not creating a determinative things. And then later on, once you've already have product-market fit, then you have to understand your source of power to understand what competitive position is because then you have to establish that. And then later on in a more stable phase when you're in a stability phase of business, you have to know what your source of power is if you have one, because you have to know how to defend it. And then also it is also the foundational knowledge that you need for if there's another step. Because another thing that's quite surprising about iconic businesses is they often have a second act or a third act or fourth act. I mean think of AWS or Intel going into CPUs or Apple going into iPhones, all not the origin of business. And that's actually common, not unusual, and that's starting the process all over again.

**Lenny Rachitsky** (00:08:24):
Awesome. You mentioned this word strategy. I want to set a little foundation here. How does strategy relate to power when people are thinking about these two concepts? And then do you have just a nice definition of what strategy is? Everyone's always just like, "What the heck do you mean when you're talking about the strategy?"

**Hamilton Helmer** (00:08:41):
As I said, I'm a concept person and so when you develop concepts, you have to be very highly constrained by their usefulness. I'm a great fan of the great mathematician, John von Neumann, and he had a view which really irritated a lot of mathematicians, which is that if mathematics wasn't guided by what was useful, it would become, I think the word he used was aesthetic to aesthetic. And so any concept developments like that, it needs to be guided by usefulness. And so in dealing with strategy, the question is what domain of things do you want to include in that conversation? Because the term is ubiquitous in business. I mean do a Google search sometime. I've done one recently on Google Scholar for the word strategy and you'll get a million, I'm not exaggerating, a million hits. And so strategy for some people might mean everything that gets to the pile, it gets to the top of a pile in terms of what you have to do that year.

Everything is... And that's a perfectly legitimate definition, but what I have found is that there is a very important narrowing that makes it much more useful. So that's coming back to what I was saying [inaudible 00:10:17] makes it much more useful to the business. So my view is that you want to focus, it's very useful for a business to focus on the fundamental determinants of business value and that's an arbitrary choice. It could be something else, but I can tell you from decades of business experience that that narrowing is very useful. And then so once you make that... Once you reach that understanding, it tells you some important things. So if you understand what drives business value, I mean if you do the math of it right, it's NPV of cash flow, right? Expected cash flow. And what that tells you is that strategy is a long time concept. You're looking far out in the future.

**Hamilton Helmer** (00:11:10):
So think of Pearl Harbor, Pearl Harbor for the Japanese was this enormous tactical success. They just destroyed the US ability, naval ability in the Pacific Ocean and the worst possible strategic move because it completely solved Franklin Delano Roosevelt's problem of how he could get the US citizens on board to attacking Hitler. The strategy of it was US's industrial might would eventually win the war and population. And the difference there is time constant, tactical short, strategy long. And so if you focus on value that narrows what you think about and allows you to get rather concise and offer up advice to founders about what they need to pay attention to.

**Lenny Rachitsky** (00:12:09):
So then how specifically is power informing strategies? Like the way you think about it, focus on your power and that will inform your strategy?

**Hamilton Helmer** (00:12:17):
Earlier I talked about these economic structures that provide durability of return in terms of refuge from withering arbitrage of everybody who wants to eat your lunch. And so that's what power is. So you have to understand what is an economics? You're asking me questions that get pretty deep into theory or I hope you don't, this is too conceptual. But you have to say, you have to understand how competition takes place and say what is it that creates some kind of refuge? And what it is is there's something in what you do that gives you either a cost or price advantage over others. So let's say you're lower cost and that's the benefit. And the barrier side is that there's something that is durable about that that makes it over time that you can't, the competitors can't take away from you. So benefit and a barrier, we call it the to be or not to be test. And if you have that, you can think of that immediately translating into a value because that will give you good margins out into the foreseeable future, which is what you're after.

**Hamilton Helmer** (00:13:44):
I don't know if that's... We're getting into the weeds here, but that's what it's about. And so power is those structures. Let me give you a quick example. So one I use in the book. So Netflix with scale economies, they have more subscribers. The cost of their content is a very large fixed cost, about 50% of their cost structure every year. They can take that fixed cost and spread it over more subscribers so their cost per subscriber is less versus somebody with fewer subscribers. So if they face the same prices for subscriptions as their competitors, they will be more profitable. And that's a scale economy and that's an example of a type of power and a common one I'd say. But these things are hard to achieve, right? Because there's the holy grail.

**Lenny Rachitsky** (00:14:47):
So let's actually talk about achieving these powers. Essentially the argument here is your power informs everything you do because this is the thing that'll allow you to stay durable and competitive and last. There's seven powers. We're not going to talk about all of them. If you want to go understand each of them, go read the book.

**Hamilton Helmer** (00:15:07):
Yeah. Let's not. That conversation always goes too long.

**Lenny Rachitsky** (00:15:08):
Yeah, exactly. So what I'm wondering is, okay, so say you're looking at this list of seven powers and you're a specific type of startup, do you have a heuristic that tells you here's most likely the power and set of subsets that will most likely be an option for you? Like B2B SaaS companies, is there a smaller subset? Probably one of these has to be one of your options versus B2C.

**Hamilton Helmer** (00:15:32):
That's a great question Lenny, because I think the path to power is where the rubber meets the road and it's very complicated and nuanced. But I'll give you a few thoughts along it and frankly our next book, the Second Invention, that's what it's about. It's about power, the entire book.

**Lenny Rachitsky** (00:15:56):
**[Inaudible 00**:
15:56] I'll try to read it.

**Hamilton Helmer** (00:15:58):
So in a book there's a thing called power progression, which says there are... It tells over the cycle of a business, there are times when certain types of power are available and the converse of that is times when they're not available. And so there's some that only are really available in when you reach a stability phase of a business pretty far out there.

**Hamilton Helmer** (00:16:25):
And so if you're starting a company, take those off the table. So those two are branding and process power. So often I find that there's a confusion about this because brand recognition for a startup may be incredibly important, but you can get brand recognition by buying an ad in the Super Bowl. That's not power, that you paid for it. So take branding and process power and process power is really operational excellence on steroids and usually is imitable, so it's usually not.

**Hamilton Helmer** (00:17:05):
So take those off the table and then a resource type of power, which is you have something that is of value that if you transferred it to somebody else it would be of value to them, but you own the rights. So the barrier is law for example, or lack of knowledge from others. And there are classes of businesses that are like that. So prescription pharmaceuticals, if you are the first person to come up with Viagra, that's worth a lot of money. If you took that license and gave it to somebody else, it'd be worth a lot of money to them. But that's a different class and it's usually not the types of things that I'm dealing with and it's obvious to everybody. So the key challenge there is can you invent a pharmaceutical that's effective for a large market. So you can take those three off the table and that then leaves counter positioning, scale economies, switching costs and network economies.

**Hamilton Helmer** (00:18:13):
And the important thing to keep in mind there is that they're sequenced. So almost every startup that you want to deal with starts with counter positioning because remember what product market fit is primarily is a substitution. You are coming up with a way to satisfy a more or less existing need in a novel way that creates more value. Now sometimes you tap into entirely new needs, but it's not so often. I mean Amazon was up against brick and mortar stores, Google was up against Yahoo and so on, and so you're usually substituting and that substitution, so your competition at that point is functional competition.

**Hamilton Helmer** (00:19:19):
And if you don't have counter positioning at that point you're pretty high risk from an incumbent who already has the capabilities necessary to do that. They just have to extend their product or do this or that, but counter positioning is the refuge from that. And then you go into the other three types of power scale economies, switching costs and network economies, and those depend on your scale relative to competitors. This is pretty cursory, but that's what I'd say. I'll focus on those four and I would recommend that you think pretty hard about whether you think you have counter positioning to start.

**Lenny Rachitsky** (00:20:08):
Awesome. I actually want to double down on that thread, but just to summarize, I have the list here. Basically you're saying if you're an early stage startup, the four to really that are actually potential powers for you at least early on, counter positioning, which your point is you could just start with that. That's essentially positioning and business model design, which happens at the beginning and then you can start to think about network economy, scale economy, switching costs as powers.

**Hamilton Helmer** (00:20:33):
Right. And you've done the right thing by not having me go through and define each of those. But your listeners will need to go back to my book and see what those things are to get... We're going through the shorthand as we should, but all of what we've said won't be completely obvious to them.

**Lenny Rachitsky** (00:20:54):
Yeah, I think a simple Google search I find just gives you a very simple definition of these.

**Hamilton Helmer** (00:20:58):
Yeah, that's right. There's some people who have done some really good summaries of this.

**Lenny Rachitsky** (00:21:02):
Or ChatGPT, even better in a lot of cases.

**Hamilton Helmer** (00:21:05):
ChatGPT if they get it right sometimes I find they hallucinate.

**Lenny Rachitsky** (00:21:12):
Hallucinate an eighth power. You mentioned how some companies think they have a certain power or it's common to think you have a certain power. If you look at every startup deck, there's always like, "Here's our moat, here's the way we're going to have barriers to entry." I'm guessing in almost every case they're delusional about the power that they actually have and the power they think they'll have. Do you also find that to be true that often founders are wrong about how much barrier they've actually created and is there a power you often find most wrong and mistaken?

**Hamilton Helmer** (00:21:43):
Yeah, so I agree with your observation, but I don't want to be unkind. So I mean there are two things to keep in mind here in terms of making people feel better about that incorrect slide in the deck. One is that founders have to be optimistic. I think it's an important quality that they maybe understate the risk a little bit, but they're so committed to I'm going to do this thing that they go through that and that may give them an advantage over a large corporation trying to do the same thing. The other is that despite the name 7 Powers, which makes it sound like, oh, you can sort this out. Actually understanding whether or not there is a type of power in place is hard. I mean I did it with my colleagues here at Strategy Capital and we're looking at a well-known company, it might take us weeks to answer that question for a single company.

**Hamilton Helmer** (00:22:47):
And it comes down to the hard part is industry economics is what really are the economic relationships and it's very hard. So with those caveats that... Give them some courtesy, I'll say some of the obvious ones are I mentioned before, people sometimes think they have branding power, but another one that I think I've heard you mention is people often think that they get scale economies through data. And I'd say that that's possible, but it's rare. And the reason it's rare is not because there aren't scale economies in data, but rather that the range of scale that the existing competitors have are often large enough to be able to put them in shouting distance of each so that the differences in their cost per unit is not that great.

**Hamilton Helmer** (00:23:50):
The curve flattens in other words, which is typical of any, because the most common scale economy is you've got a big fixed cost and you prorate that. And as you get more and more scale, the percentage cost advantage of a fixed cost advantage like that goes down and that often. So that's a pretty frequent one that we see. We laugh whenever we hear somebody say they have a flywheel, which gives you the idea of network economies. There are often flywheels, the ones that really are material, are rare. The key thing here is materiality, not whether the flywheel exists, but whether the effect is strong enough to really tilt returns.

**Lenny Rachitsky** (00:24:39):
I was actually going to ask about that one because in software and social consumer products, network effects is always the pitch. Once we get big enough, we create this huge barrier. You mentioned just now you often find that's not actually true. It's rarely something that'll become a barrier. Is there anything else you find with network? And I know your power is called network economies, not network effect. I guess just to be clear, are these the same thing in your mind with different words?

**Hamilton Helmer** (00:25:02):
Yeah, kind of. I mean I have called it a type of power. So for me it's only those things which clear the significance barrier, hurdle rather that they're a large material. And so there are lots of things that I would say have network effects but not network economies.

**Lenny Rachitsky** (00:25:26):
Oh, interesting. Wait, can you speak to that? So there is a difference between these terms, network economies?

**Hamilton Helmer** (00:25:30):
Yeah. So for me the difference is materiality is that whether the value benefit is large enough to engender a price delta significant enough to give you materially different margins into the future.

**Lenny Rachitsky** (00:25:50):
Basically, does that network effect have an actual impact on your business and your ability to price?

**Hamilton Helmer** (00:25:55):
Yeah, it's not an impact, it's a material impact. So it could have... If it's a penny to your bottom line, that's one thing if it's a billion dollars or something else.

**Lenny Rachitsky** (00:26:06):
Wow, that's actually really interesting. Is there an example of a company that comes to mind, they had network effects but not network economies as a power?

**Hamilton Helmer** (00:26:12):
I think you could turn almost anywhere and get some modest network effects and any platform business would probably likely have some modest network effects. You asked me earlier and you sent me about Uber and Lyft, I'd say that they probably have network effects involved but not network economies.

**Lenny Rachitsky** (00:26:40):
Wow, that's interesting. And the reason you're saying they don't have network economies is because they're still so competitive they still have to spend so much money to stay ahead and so the network is not-

**Hamilton Helmer** (00:26:51):
Yeah. Right. The advantage that they get, it's not material. Right.

**Lenny Rachitsky** (00:26:59):
Wow, that's so interesting. Along those lines, it's so interesting to see Uber and Lyft these days. In theory they both had some sort of strong network effect. I was just looking, so Lyft is 5% the market cap of Uber. Is there a lesson from just what it is that allowed Uber to just win and kind of run away with the market essentially?

**Hamilton Helmer** (00:27:25):
I'm not entirely sure, I'll take a guess, but take it as a unformed guess. I haven't really studied it carefully. I think that over time there, if I had to guess, I'd say they're probably modest scale economies in the business. And over time Uber has just very successfully played a war of attrition. And that's both been in how they run their... They made one initial misstep, which is they misdefined their business. They said it was international transportation and it's not. That business is extremely geographically specific.

**Hamilton Helmer** (00:28:14):
If you have a great position in the Bay Area, it doesn't help you in London. And so their forays into China and everything really didn't make, but they pulled back on that, focused down on understanding their source of power, which was a geographically specific scale economy. And then they've done interesting things like Uber Eats where they've tried to utilize the platform that they have to get other opportunities for the one side of their platform, the drivers. And so if I had to guess, I'd say it was a well-played war of attrition with modest scale economies.

**Lenny Rachitsky** (00:29:02):
And is that attrition coming from a source of power or is that just like a broader, more strict?

**Hamilton Helmer** (00:29:06):
Yeah, it only works because there are modest scale economies. If there weren't any then if they did all this stuff, they'd still have a global and see.

**Lenny Rachitsky** (00:29:16):
Got it. Let me go in a slightly different direction. We've talked about power, we've talked about strategy. There's also, there's this word moat that comes up a lot. Everyone's always trying to build a moat. In your mind, is a moat equivalent to a power? Is there a difference when people talk about these two?

**Hamilton Helmer** (00:29:30):
Power requires a benefit and a barrier, you have to have something that you do that gives you a better outcome than your competitors, lower cost or higher price, and then something that makes it impossible for somebody else to mimic that. So moat is the second. So it's not synonymous with power because you can have a moat around a very undesirable piece of property and wouldn't get you far. But I think it is pretty synonymous with barrier. I think Warren Buffett, Charlie Munger, I admire enormously. I think I get credit for popularizing those concepts and I think the way they think about it is good. I'd say that 7 Powers is probably more systematic and comprehensive in saying that. I don't think. This is wonderful. I don't know if you've read any of the Microsoft antitrust literature that came out of their-

**Lenny Rachitsky** (00:30:42):
No.

**Hamilton Helmer** (00:30:42):
...lawsuit, but there was a communication between Bill Gates and Warren Buffett where Warren Buffett was saying why he couldn't invest in Microsoft. He just didn't understand it. And so that meant the idea of network economies and what the moat was there he didn't understand. But I think the concept of a moat is a good one. The idea that you have something that gives you a refuge from competing forces.

**Lenny Rachitsky** (00:31:14):
In terms of Warren Buffett, I found the quote about moats. Warren Buffett famously said, "In business, I look for economic castles protected by unreachable moats."

**Hamilton Helmer** (00:31:22):
Right. And so he's taking care of the benefit part by saying a castle.

**Lenny Rachitsky** (00:31:27):
Right. He's got it covered.

**Hamilton Helmer** (00:31:29):
But one of the tricks to understanding power is you have to have a pretty good understanding of why it's a castle and not a shack. So I'll give you a Netflix example. So a company I admire a lot, and I think if some of the things that they had to do to develop their business were so important for their business that don't guarantee a castle. So for example, UI development, it's been an enormous amount of resources on trying to get just the very best UI, I mean a zillion AB tests, all kinds of things. Their recommendation engine, everybody's knows the story about how that went, their interface with the content world and all this. So those things are important. They're things they have to spend a lot of time and resources on, but they can largely be mimicked.

**Hamilton Helmer** (00:32:31):
So when Netflix in an earlier phase was fighting Blockbuster, when Blockbuster finally threw in the towel, said, "Well, we done. Well, better do a mail or a DVD business." If you look at the Blockbuster site, their UI site, you couldn't tell it different from Netflix. They just copied it. And so all that thoughtfulness about which things you put first and how you structure it and all that to make this suitable was mimicable. So that's an understanding of looking at the properties you have and trying to figure out if they're a castle or a shack.

**Lenny Rachitsky** (00:33:06):
**Hamilton Helmer** (00:34:41):
I'd say they're a few and it's a little bit different. I'm not a great fan of the strategically driven organization because that idea, because it fuzzes over how this knowledge is useful at different stages in the business. And so for somebody in that position, say a product manager in an existing successful business. So it is important in terms of just understanding their business to know what their source of power is because they... And that can inform them about what it is that they're working for. And also they may see things since they're down in the weeds, they may see things that are important to that that they need to bring to other people's attention. Because they're the ones that really have the knowledge of what the heck's going on. There's another aspect I mentioned before, this idea of transforming, of starting up entirely new things. And usually... I wouldn't say, usually I say it's not uncommon for ideas about that to bubble up from down below.

**Hamilton Helmer** (00:36:03):
And so that's another source. So let's separate a business into three phases, origination, takeoff, and stability. So the answers I've given are more in the stability phase. In the takeoff phase, let's say you've launched a product, you've gotten customer traction, now you're in a phase where there's just very rapid growth, probably other entrants like you, what are you facing? What you're facing is remember that underneath all of this is a change in technology. That's what made the product market fit possible in the first place. But that doesn't just stop. That if you're in a technology wave, often there are all kinds of offshoots both for you and the compliments to your business and everything else going on at the same time.

**Hamilton Helmer** (00:36:59):
And to win at that stability phase, which is really a market share win, you have to be aware of those and understand, okay, we have to incorporate this new feature. Or maybe now things have gotten to the point where this new market segment is, our product is attractive before it wasn't. This is meat and potato stuff for somebody at that level and it may well be the decisive element in terms of whether you win that market share battle with the other contenders. And so you have a very, very important role at that point. And so I'd say the first thing to do with your question is to make sure you think about the different phases of this and then ask what those responsibilities are.

**Lenny Rachitsky** (00:37:51):
What about for people that are just trying to get better at being strategic, thinking strategically something every product leader is always encouraged to do, become a better strategic thinker, build as muscle of strategy, what do you often advise to people just get better at the stuff? Obviously read your book.

**Hamilton Helmer** (00:38:09):
Read the book, and then have conversations with your colleagues about the topic because as you internalize what that means and how, have conversations with them about do we really have this kind of power? What's going on here? What's important? What isn't. Those conversations tend to allow you to get a better grip on things. I mean in the case of Netflix, Reed actually had me come in and train the top a hundred people in Netflix and strategy. We actually ran classes in the company, but that's unusual I'd say. And I didn't have the book yet. And so I think the book gets people pretty far down that path already.

**Lenny Rachitsky** (00:38:55):
And you don't do that anymore, I imagine if someone wanted to do that today, not an option.

**Hamilton Helmer** (00:38:59):
I sadly don't have the time. I mean I do often do fireside chats at company meetings and that kind of thing, but not a full-blown course and I'm not teaching at Stanford anymore either. And so I don't. I enjoyed that immensely wonderful people to work with. But sadly I don't have the time.

**Lenny Rachitsky** (00:39:23):
You're about to get a lot of requests for fireside chats. I hope you're ready. You mentioned AI at some point in our chat. I'm curious how you think AI is going to change your 7 Powers framework. Do you think defensibility goes down in general? Will certain forms of power become more important or harder to achieve? How do you think about AI?

**Hamilton Helmer** (00:39:44):
Yeah, it's a great question. I mean we're all in this phase of wondering exactly how generative AI is going to play out. My own view, currently I don't see any change in seven powers from it in terms of an eighth power or something. But the issues that it brings up, like scale economies, I mean think of scale economies. If you have a fixed cost of trying to develop a model of a billion dollars or something or network effects, will AI models develop so that they learn in a way that for one user's interaction helps another user's interaction? That would be a powerful network economy. Or if it learns, if you think of if it learns about you and becomes a better psychiatrist or something, then that's a switching cost. So all these things are relevant to which business models will work and I find that useful.

**Hamilton Helmer** (00:40:51):
But I think in general, the way I think about it is it's a standard form of potentially very powerful technology that is being introduced into the business world and just asking how that plays out. I currently tend to think of that there's three types of plays. There's the company that's the technology play itself. So if you think of microprocessors, it would be Intel. There's the companies that wouldn't exist without the technology. So for semiconductors it would be Microsoft. And then there are the companies that utilize the technology, but it had existed before and after. So for semiconductors it would be automobiles. They used a ton of chips, but there were still cars before, after.

**Hamilton Helmer** (00:41:48):
And so I'm of the view, I'm very much uncertain at this point that generative AI, its biggest impact will be that tertiary class. It will be used in a lot of things that existed before and exist after, but are made better by it like semiconductors and automobiles. And so it reminds me, if you think of really big technology shifts like this, it reminds me of electricity. When electricity came, you could completely reconfigure a factory floor. You no longer had to have... You could have the power source essentially at the operating unit of an operator. But that took a lot of redesign, incorporation, investment, learning, complements, all kinds of stuff. I tend to think this will be more like that. There will be some pure cases. People will want to have them write their term paper with ChatGPT or something. But if you think of businesses, it's hard for me to think of a single functional area in a business that with redesign couldn't benefit. So accounting, HR, R&D all have uses of this but requires incorporation, which is always troublesome.

**Hamilton Helmer** (00:43:30):
And so that's my view. But there certainly will be businesses that couldn't exist without it. And there's some that are coming up and some of those are in fact the businesses that empower the tertiary need, they're the ones that bring in. But if you go back, this will date me, but if you go back into business history, back in, I guess it was the 90s, there was this thing called business process re-engineering, the idea that you could take a computer sensibility into business processes, redesign them and get these monstrous cost savings. And it was a gigantic consulting opportunity for people. Whole companies got developed based on that and it feels more like that to me, but it's very interesting. I could be wrong, but it feels different than crypto. It feels like there's more of a real ultimate use case. I mean, if it really is true what they say that a 50% improvement in programming efficacy is not uncommon, just that proposition alone is worth an awful lot of money if you think how many programmers are in the world.

**Lenny Rachitsky** (00:44:56):
No question. You mentioned eighth power. I just want to check, is there an emerging eighth power you wish you maybe would've included or maybe added in the future that's like, "Oh, maybe this is on the edge," or it's like, "Nope, we got these seven?"

**Hamilton Helmer** (00:45:15):
It's a great question. I'm always looking for it because if you find it it probably means it's so obscure there, it'll also be a great investment opportunity. We're looking all the time, but so far, no. So far I'm pretty satisfied that seven is an exhaustive set, but never say never. That's an empirical seven, not a theoretical seven.

**Lenny Rachitsky** (00:45:37):
If we start seeing you making incredible returns, you've clearly found an eighth power [inaudible 00:45:41]-

**Hamilton Helmer** (00:45:41):
That's right.

**Lenny Rachitsky** (00:45:43):
I want to close one thread on a power that you mentioned that is often a pitfall, which is around process power and basically execution. A lot of people think so in a lot of decks it's like, oh, we have the most amazing team, we move the fastest, we're earliest. You mentioned how rarely is that actually a power actually being able to execute and create a process that is an actual barrier? Can you just talk a bit more about that to help people understand okay, it's probably not our power?

**Hamilton Helmer** (00:46:09):
One of the great thinkers in strategy was this Harvard professor Michael Porter, and he in probably 40 years ago, made the very controversial statement that operational excellence is not strategy. He got a lot of people of the Harvard Business School faculty really mad at him because that's what their careers were about and it sounded like he was dissing them. But the point he was making was when you get to this end state, if you already have power that things that drive operational excellence can be mimicked because you can hire a consulting firm who has best practices, knowledges that come in and get you up to snuff. You can hire people from your competitors who know how to do it better. And that's true, but it's also true in this takeoff phase in a business that we talked about before, when you're trying to attain competitive position, operational excellence is everything.

**Hamilton Helmer** (00:47:14):
And so if you think of strategy, not statically endpoints like Professor Porter was, but if you look at dynamically how you get there, operational excellence is essential for a strategy. So think of those things I mentioned before about Netflix, about their UI and recommendation engine and so on, or international rollout, all those things. They were in a battle to get more subscribers than other people and those were critical for that. But in themselves, they're critical in attaining competitive position, but in themselves, they're not sources of power typically, unless there's some very tight considerations here or very demanding considerations for the... Unless if they have to be material, but they also have to be opaque or some way people can't easily imitate them. Either they don't understand what's going on or they might be opaque. So for example, think of TSMC. So when they put up the latest fab and get that operational, are there a lot of steps in doing that?

**Hamilton Helmer** (00:48:43):
They know how to do with their staff is trained to do it, but it's not documented necessarily and you can't imitate it. Then maybe they have it. I don't know if they have process power or not, but it takes that level of complexity. In my book, I use the example of Toyota and a car manufacturing is complex enough that you can have this opacity in terms of material steps, but it's not common. So if you're in a stability phase of business, you're stuck with this funny thing, which is most of your day is on those issues and it should be because if you don't do it, a competitor can and they can end up better than you. And so you're on a treadmill and that's the way business is. That's fine. And if you stop running that treadmill, you get creamed. So you got to do it, it's most of your day, but it's not power. And there are those rare cases where it's so material and so inimitable that it can be power, but they're rare.

**Lenny Rachitsky** (00:50:02):
I like the heuristic that if you haven't written it down or you can't describe it, that might be a sign that maybe process power is a power of yours.

**Hamilton Helmer** (00:50:13):
Yeah. And there isn't a consulting firm that offers to bring you up to speed on that.

**Lenny Rachitsky** (00:50:20):
They'll make you more like Amazon as a service. Kind of along these same lines, you talk about how the only things that create value in a company are power, market size and operational excellence. And I think hearing that will blow a lot of people's minds because they think there's so many things that contribute to the value of a company and you whittle it down to these three things. What can you say about that insight?

**Hamilton Helmer** (00:50:47):
So I'd say they're right and I'm right. They're right because there are this incredible... I mean business is really hard and there are just a multitude of things you have to pay attention for. I'm right because all those things fall into those three categories. So it's an exhaustive set and it simply comes out of the math. So we're both right I'd say.

**Lenny Rachitsky** (00:51:16):
Final question, the intent of a lot of your work is to empower founders. I'm curious if you've noticed any broad economic trends or shifts that you think will make life easier or harder for founders in the coming years?

**Hamilton Helmer** (00:51:32):
Personally, I am very, very concerned about the debt trajectory of the United States and of many countries around the world, but I'll pick on the United States, but it's a trend going on everywhere. We're on a trajectory for this extremely high indebtedness. And so if you think about the last 30 years, right? There's been a crisis about once every 10 years. So there's the dot-com bust, there's the financial crisis, there was COVID. Nothing makes me think that the frequency will be a lot less. I don't know what, who knows? These are all uncertain events. But imagine if we got to one of those and we had no dry powder and dry powder for us is the ability to heavily deficit spend take on debt. And fortunately our government did that in both the financial crisis and in COVID. And because that people had jobs. My own view about the financial crisis is that if we hadn't done that, plus having Ben Bernanke as the head of the Fed, we would've gone into another great depression.

**Hamilton Helmer** (00:52:52):
It was that ugly. So this current debt trajectory, you don't know how long it will take exactly when, but eventually that will mean we will not have dry powder. People will not respect the credit worthiness of this country. So that worries me a lot. And it utterly will affect the idea of company founding because if you get into a crisis like that, the capital markets lock up and it gets very difficult to do anything. And to really stretch my credibility here, I'll opine on just how hard a problem this is to solve. The reason this is so difficult for this country to solve and other countries is that it is right at the crux of the delicate dance between capitalism and democracy. So if you think about the problem, of course that's driving all this is entitlements. There's discretionary spending, certain recovery programs and stuff, but those can go away. The underlying trend that people just can't get their arms around is entitlements. And anybody who looks at the numbers can see that. Every economist knows that. But that's not an easy fix.

**Hamilton Helmer** (00:54:18):
And the reason it's not an easy fix is there are two opposing views of what's going on, and there's no way to resolve those two views. One is that capitalism is rapacious and results in more and more inequality and the government has to do something about it. And the other is that the government is on a path that is creeping socialism that will undermine our freedom and economic sufficiency. And the poster child for the rapacious capitalism. One is, I don't know if you've seen the recent analysis of inequality in the United States just came out, much more robust analysis. And it said that basically inequality in the last 60 years of the United States is unchanged, but that's post-transfer, post-tax inequality, which basically says the amount of taxing and transferring going on was about right. So it says that the amount we're spending is about right from that perspective, that it compensates for the other inequities and we should be spending that much so we should tax more.

**Hamilton Helmer** (00:55:30):
And the poster child for the other point of view of the dangers of government is the steadily increasing without interruption percentage of the economy that is government. And to levels that 75 years ago, people would've thought absolutely impossible. So there are these two views about what's going on. One is that we're compensating for the normal inequities of capitalism, and the other is that we're headed down a path to socialism and ruin. And that leads to a deadlock, which is you don't tax anymore and you don't cut spending and that leaves deficits. So anyway, a long, long rant, sorry but that trend is extremely politically difficult to deal with and extremely threatening and that concerns me immensely.

**Lenny Rachitsky** (00:56:32):
Not to leave listeners with a very sad state of affairs.

**Hamilton Helmer** (00:56:36):
Yeah, sorry.

**Lenny Rachitsky** (00:56:37):
No, no. I think this is important. I think it's important people think about this and know these things. Is there anything that gives you hope? Is there anything that gets you excited about either for founders or anyone in general, just to leave folks with maybe on a happy?

**Hamilton Helmer** (00:56:50):
Yeah, I mean, I am an optimist really in a way, and I do. There's a famous Austrian and eventually American economist named Joseph Schumpeter who wrote this wonderful book Theory of Economic Development way back when over a hundred years ago, where he took the unusual view of saying that the vitality of an economy depended on entrepreneurs. And I ascribe to that. I think that creativity and action are the ways society and people advance. And I think the US's and a free society has huge advantages in that. And I think that I feel very lucky to be in a place I'm in Silicon Valley, but to be in a place in a country where that is vital and active and I think that's ground zero for me. And so I think you see that alive and well, I think. And there are people that are very Enthusiastic about that as I am.

**Lenny Rachitsky** (00:58:12):
Beautiful way to close out our chat. Is there anything else you want to share before we get to our very exciting lightning round? Is there anything you want to leave listeners with or any last tidbit of advice?

**Hamilton Helmer** (00:58:22):
I alluded to it before, but just that remember, action is the first principle of business. You do stuff and my book is very oriented towards that. The idea was not to tell you what to do, but to give you guideposts while you're on that journey. People that are enthused about it, I encourage you to do stuff. That's where it all starts and I can think about it and maybe help a little bit, but it's mostly doing stuff.

**Lenny Rachitsky** (00:58:59):
I love that point so much. It was something I was going to touch on but I didn't get to is just there's so many people that just sit around and theorize about a strategy of their business, especially in their early stage. Here's our grand master plan, here's an amazing strategy or just read about startup ideas and don't actually try it. I love this final note of just try it. Just do it. Don't just sit there and-

**Hamilton Helmer** (00:59:18):
Yeah, yeah, just do it. And life is full of surprises. You'll end up in a place you didn't expect.

**Lenny Rachitsky** (00:59:24):
Amazing. Speaking of ending up in a place you didn't expect, it's time for our very exciting lightning round. Are you ready?

**Hamilton Helmer** (00:59:32):
Oh, sure. I'll do my best here. I'm not very good on lightning.

**Lenny Rachitsky** (00:59:37):
First question, what are two or three books that you've recommended most to other people?

**Hamilton Helmer** (00:59:42):
One book that is extremely wonky, and I can only take it in very small doses, but is magnificent, is one called The Road to Reality by Roger Penrose, who's this brilliant mathematician. And it will be very daunting for anybody unless you're a deep math person, but his brilliance in erudition just shines through in this thing. And it's an amazing book. I would say there's another book, boy, I wish I could remember the name. Maybe you can get the name of the author called Gene by this geneticist. And I think he's a Harvard Medical School professor that's about the history of genetics and he is an absolutely luminous writer. I mean, it puts me to shame. I'm embarrassed when I read it because I think how pedestrian my writing is and incredibly knowledgeable about the history of genetics and I think that's such an important topic. So those are two that I would recommend highly, fairly wonky, but I like them both.

**Lenny Rachitsky** (01:00:56):
I love them. The author, I just looked him up. Siddhartha Mukherjee.

**Hamilton Helmer** (01:01:01):
Yes. Just amazing. You read it and you go, "How did he think of that phrasing?" I mean, it's just, he's amazing.

**Lenny Rachitsky** (01:01:10):
Do you have a favorite recent movie or TV show you really enjoyed?

**Hamilton Helmer** (01:01:14):
I'm a huge movie fan and have been all my life, and I'm particularly keen on animated films. But the movie that I've recently seen that I liked particularly it was American Fiction. I thought that was... It didn't make any of the easy choices in a movie and as a result was just incredibly interesting and thoughtful I thought.

**Lenny Rachitsky** (01:01:39):
Do you have a favorite product you recently discovered that you really love?

**Hamilton Helmer** (01:01:43):
In my office, just this last week, we actually put a Persian rug in our entry room, and this is what's called a Farahan Sarouk rug and it's 150 years old. And it had an effect in me that I didn't expect, which is it is a work of great beauty. And it was before, it was all hand-done before machines. You get all this wonderful variation of the actual icons in the rug and the different dye colors. And I find that every morning when I walk in, I go, "That's really beautiful," and it's uplifting and it shows you the importance of, or the value of the quality of art. I mean, just blows my mind actually. So that's probably not the usual product discussion that you get.

**Lenny Rachitsky** (01:02:50):
No, I love that answer. Recently we've had some really unique choices. One is a very nice Mercedes and a Rivian and a minivan recently. We've got a lot of very nice things.

**Hamilton Helmer** (01:03:00):
Oh, that's great. I'm a car guy too, so I didn't answer on the car question.

**Lenny Rachitsky** (01:03:05):
Oh man, I love that. We have Rory Sutherland coming on the podcast soon. He is one of the leaders of Ogilvy and he has a whole thing about how buying a home is the best value of art to buy art if you live in a home that makes you feel inspired and is beautiful.

**Hamilton Helmer** (01:03:20):
Yeah, I'm a big believer in that. I mean, I think that your place and how you connect to it has an important grounding effect. And then before I talked earlier about creativity and I think surrounding yourself in an environment that stimulates that is really important. And so I couldn't agree with him more.

**Lenny Rachitsky** (01:03:51):
Two more questions. Do you have a favorite life motto that you often think about, come back to share with friends or family?

**Hamilton Helmer** (01:03:58):
One is what Clint Eastwood's advice to actors, which is don't just do something, stand there. And so there are a lot of things that are long-termish with low signal to noise. And you can often just do a lot of stuff that you think makes a difference, but it really doesn't. And so that's one. The other one which is somewhat more profound I think was one that I had a famous Sri Lankan journalist was a mentor of mine and very dear friend, and he had a favorite expression that I adhere to all the time, which is everything is always about something else.

**Lenny Rachitsky** (01:04:49):
Wow. Deep.

**Hamilton Helmer** (01:04:53):
And that's so true if you're dealing with this power stuff when if you really dig down, everything is always about something else.

**Lenny Rachitsky** (01:04:58):
Speaking of power, final question. People that have a lot of power are leaders in the world. I'm curious, do you have a favorite historical leader?

**Hamilton Helmer** (01:05:07):
So yeah. I have some that I admire a great deal. I'm a tremendous fan of Winston Churchill's. Most really great people are quirky and he qualified. There are things you could say about him that you might not have liked that so much, but he was a genius and had great fortitude, human sense. He understood things long before other people. I've give him high marks. Some of the great artists I admire enormously. I'm reading a book right now on the last 20 years of Michelangelo, which wonderful book actually, and which is a very interesting period because in his first 70 years he finished up all that, he wasn't going to do sculpture anymore. He just finished The Last Judgment, which was the wall of the Sistine Chapel.

**Hamilton Helmer** (01:06:08):
And I think the last major fresco he did. And a lot of his friends at that time, he was exiled from Florence and living in Rome and he had this Roman community and a lot of his close friends that had recently died or had difficulties. So he's at this inflection point in his life at 70, which in those days was very old, and yet he went on to do some of the most remarkable architecture in the history of the world. And so you've got to admire that. I mean, just doing that, which is that rare second act. But I think for world leaders, Winston Churchill is very high. I'm a fan of Teddy Roosevelt, I must say too, in this country.

**Lenny Rachitsky** (01:07:00):
I love that. Hamilton, you are wonderful. I feel like we have helped a lot of people up-level their ability to think about strategy and moats and power. Thank you so much for being here. Two final questions. Where can folks find more online if they want to dig in further, and how can listeners be useful to you?

**Hamilton Helmer** (01:07:15):
Yeah, so as I say, I'm an idea person and I'm about trying to empower company founders, and so only thing I can say is read the book, spread the ideas, start your own company. Those are the things that would make me happy.

**Lenny Rachitsky** (01:07:37):
Amazing. Hamilton, Thank you so much for being here.

**Hamilton Helmer** (01:07:40):
Great. My pleasure, Lenny.

**Lenny Rachitsky** (01:07:42):
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'sPodcasts.com. See you in the next episode.

---

## [10/21] A framework for PM skill development | Vikrama Dhiman (Gojek)

**Lenny Rachitsky** (00:00:00):
Your name has come up more times than almost any other product person when I ask people for their favorite product leaders in Asia.

**Vikrama Dhiman** (00:00:07):
I created a career growth framework for product managers, which comprises of three things. What you produce, what you bring to the table, and what's your operating model.

**Lenny Rachitsky** (00:00:18):
Your advice is early in your career, focus on just getting stuff out and done.

**Vikrama Dhiman** (00:00:22):
Can you show me your last PRD? Can you show me the last product note that you sent? Can you show me the product strategy doc? You must have that impact through the artifacts that you work on.

**Lenny Rachitsky** (00:00:32):
I'm curious what you found most impedes people's career growth.

**Vikrama Dhiman** (00:00:37):
How you view change, whether you are focusing on things you control, and third is how you see yourself. The moment you are able to correct those stories, you may be back on the growth path again.

**Lenny Rachitsky** (00:00:52):
**Vikrama Dhiman** (00:04:00):
Thank you for inviting me, Lenny. I'm very excited to be here.

**Lenny Rachitsky** (00:04:03):
So as you know and hopefully as listeners know, I'm on this quest to meet the most insightful product leaders from all over the world and your name has come up more times than almost any other product person when I ask people for their favorite product leaders in Asia. And you're also the third guest from Gojek, so there's definitely something in the water over there and I want to talk about that. To just dive right in, you have a very strong reputation for building incredibly strong product talent and also design talent, and also helping people transition from other roles into product management, which a lot of people listening to this podcast dream to do. So I'm going to ask a bunch of questions around this area. How does that sound?

**Vikrama Dhiman** (00:04:47):
Sounds good.

**Lenny Rachitsky** (00:04:48):
Okay. First question is just when you think back to the people that have done best in the product management role and have had a rapid career rise, what are some of the most common traits or behaviors or habits that you find in these people?

**Vikrama Dhiman** (00:05:05):
Over the last decade and a half, I've had the opportunity to work with some really strong product managers, learn from strong product managers, and some of them have had rapid career growth. When I was younger and I was starting off, I used to think it's all about the product. If you've got a really cool product to work on, your growth's guaranteed. And if you got really a product which no one cares about or a stream which no one cares about, then your growth is going to be slightly slower. But as I started seeing more and more product managers at their craft, I saw that working on a cool product area is not the only thing. In fact, sometimes some product managers would come back and complain that despite their product doing really well, they've not really grown.

**Vikrama Dhiman** (00:05:51):
And while some other product managers whose product didn't have the impact really grew. And as I started looking at it and as I started making notes, as I started talking to other product leaders, what I discovered was that the really strong product managers who were also growing in their careers did some things differently. And based on that, I created a career growth framework for product managers, which comprises of three things, and I call it three W's. So what you produce, what you bring to the table, and what's your operating model? The really strong product managers are good at usually two of the three things. The ones who rise and when they are rising, they are performing well on all the three access. So if you would like, let's talk a little bit more about each one of these W's.

**Lenny Rachitsky** (00:06:49):
Yeah, I would love to. I love that you put the word what at the top and that makes it the three W's, which is clever because I find even if the acronym is not necessary, it's really helpful to help people remember so I totally respect what you did there. So the three is what you produce, what you bring to the table and what your operating model is. Is that right?

**Vikrama Dhiman** (00:07:09):
Yes, absolute.

**Lenny Rachitsky** (00:07:09):
Okay, cool. Yeah, let's talk about these.

**Vikrama Dhiman** (00:07:11):
So what you produce, a lot of people index on the impact while and they start thinking about goals, they start thinking about direction and they start thinking about strategy. While it is important to know at what stage of the career you are and what kind of a product that you are working on, the very first thing that anyone, when you're starting off, produces is outputs, okay? The output can be launching a product, it can be analyzing and running an experiment, and it could even be just being a part of the team and contributing to a go-to market strategy. So focus on that output significantly. As you get comfortable with output and you start getting comfortable with working with different stakeholders, you start controlling what outputs are necessary, which is when you move to the outcomes. Outcomes are product areas, goals that you can own and or collaborate with other stakeholders on.

**Vikrama Dhiman** (00:08:14):
And when you start figuring out which outcomes are necessary, that is when you move to the leadership and directional areas. The mistake that I see a lot of product managers make is they start operating in either output or outcomes. And when you are transitioning to outcomes, it's very important that you continue to still hone your craft on outputs. For instance, do you just give up on the go-to-market strategy or do you start making product nodes which are then picked up by marketing people and are able to be used to create that go-to-market strategy? You always, always have to have the output and outcome even when you're moving up the so-called career management ladder. So that is very, very critical that as you are producing, even when you are at the senior most levels, don't forget your IC roots, don't forget the IC component. And sometimes it is necessary to just pull up your sleeves and go back and keep working on those things. That also gives you a lot of creds with others in the team as well.

**Lenny Rachitsky** (00:09:20):
So highlighting one insight here is that a lot of advice you hear about how to do well in your career, which you pointed out at the beginning here, is it's not just not immediately drive impact. That's not necessarily what you need to obsess over, which is actually what I recommend to people is just find ways to have impact. So this is really interesting. Your advice is early in your career, focus on just getting stuff out and done. Don't so obsess with the impact. Can you talk more about just what, when you say output, what are you describing there? Is it just ship products and be helpful and produce something?

**Vikrama Dhiman** (00:09:51):
Absolutely. So outputs is shipping products, but it also comes in smaller things. For instance, if you are sourcing content for your homepage, what are the different avenues that you can source content from? What is the easiest to source? What is the most difficult to source? Just ranking it all in that order goes a long way. And one of the product managers actually did that yesterday and I went, wow, it just made my life so much simpler. And not just my life but so many other people's lives so much simpler, and we were able to take that specific output and use it as part of our overall strategy. If that PM would have obsessed about the overall content strategy, overall how we are going to do it versus just how we are going to be sourcing it, they would have indexed on something bigger and maybe would have not even been able to make that impact. But now, they were able to show something which was a small part, which was an output, but it fell into the overall outcome.

**Lenny Rachitsky** (00:10:54):
The way I think about what you're describing, which I actually 100% agree with, is when you're starting out in your careers, execution is where you need to deliver. People just want you to get stuff done when you're just starting out. It's not like help us define our strategy and vision for the next three years. We just have stuff we need done. Can you help us get it done? Well, yes. And then essentially the advice is as you get more senior, you'll have more opportunity to think about strategy and what to build versus just how to build it and actually execute on it.

**Vikrama Dhiman** (00:11:25):
Absolutely. So focus on outputs at the start of your careers and don't forget outputs even when you grow in your career.

**Lenny Rachitsky** (00:11:33):
So along those lines, just to close the thread on this idea, it's still helpful if you work on something that does have impact that matters, right? How important is that? And you said that you've seen successful product managers work on things that aren't as impactful and still do really well, but I guess would your advice be tried [inaudible 00:11:52] be in a place that is going to drive more impact versus it's not actually that important in the early career?

**Vikrama Dhiman** (00:11:58):
So I'll give you my example. In one of my previous roles, there were two product areas that were important for the organization. My product area ended up being the center and focus of the organization, yet the product manager who was chosen to lead the area when it became big wasn't me. It was someone else. At that time, I really felt very bad that okay, why did that happen? But now when I look back, I can see why that happened because that product manager was so much better at the overall craft of output, yet when they were focusing on outcome, we're not forgetting the output as well. So they were just better at me on launching products, they were better at me on working with design, in producing design artwork, and they were definitely better than me in running the experiments as well.

**Lenny Rachitsky** (00:12:49):
I love that. Yeah, basically when you're just starting out, just execute well, execute smoothly, ship things on time. I'm going to say a few things, but I'm curious what else comes to mind here of just what does good output look like? Is it do things that are helpful to your team and manager, ship things on time, bug-free, have a clean road map, everyone's aligned behind, [inaudible 00:13:11] deadlines, things like that. I guess what else along those lines should people be like, "Okay, here's what I should be doing to have good outputs?"

**Vikrama Dhiman** (00:13:16):
Some of the things that I think are useful. So first, what's output? Output is something which is very tangibly defined, which doesn't take too much of your time, effort, and energy to visualize and think and strategize over and you are able to quickly get moving on. Go and ask your product leader, go and ask other leaders on what are the areas they are blocked on. Sometimes they will be blocked on, "Hey, I need to prepare this brief for this particular summit", "I need to prepare this particular slide for a leadership review", "I need to prepare a review, I need to prepare a review which has to be done with the legal." You can volunteer and definitely own and deliver the first drafts of those even if the final draft is not something that you own. That's a simple example of an output, which I feel a lot of people miss because they want to be focusing on the bigger strategic pieces.

**Lenny Rachitsky** (00:14:16):
It's basically be useful. That's the way I always like to talk about this, just like your job as a PM is be useful, make your team more effective, help your company be more successful. Just find ways to be useful to everyone around you.

**Vikrama Dhiman** (00:14:27):
Absolutely. And be useful in doing the small things which make an impact and also contribute to your learning versus being useful in areas which you think the mini CEO should be working on.

**Lenny Rachitsky** (00:14:44):
Right. There's all this talk about being an empowered product manager, building empowered product teams. I think there's an important nuance. When you're just starting out, you haven't earned the right to inform strategy and vision people. Why would people follow you at this point? We just need to get stuff done, so that comes over time.

**Vikrama Dhiman** (00:15:01):
Absolutely. And it's not just when you are starting off or when you are young. Even with if you are senior and you're starting off with a new team, even if you're starting with a new company, you need to have that mindset. And sometimes you will not know the best. And we'll talk more about how to, what is your operating model, which is how you work with others. It's a very, very important thing for you to know that you are one part of the cog wheel, you're not the entire wheel yourself. And a lot of the folklore around product managers can make you confused, especially when you're starting off in your career.

**Lenny Rachitsky** (00:15:40):
I love it. Okay, let's keep going. Number two.

**Vikrama Dhiman** (00:15:43):
Number two is what you bring to the table. Now, I think how I describe that is what is your impact on impact? So the first access is impact, but you also need to have an impact on impact. And this is what I had missed a lot in my early career, that you put the coolest product areas, your product area is successful and that automatically guarantees your growth. It doesn't. You have to also show that yes, you were a useful contributor to having that particular impact. The simplest thing on this is that is your PRD quality good enough? Are you writing that the draft notes that go and circulate to the care teams, to the marketing teams and so on? Are you making sure that you are deriving from the strategy that has been shaped or you're constantly just pushing back on the strategy? Similarly, you also how you are drafting the north stars, how you are working on the experiments, how you're working on the data, how you're working on the metrics.

**Vikrama Dhiman** (00:16:43):
All these things take time, effort, and energy. And I know there is some literature and there are some operating models where people are working only at strategy levels while all of these execution of these artifacts is being done by some other people. I don't think, especially when you are starting off, that's a very, very good thing. Even when you are mid-senior, I don't think that's a very, very good thing. You have to have to be able to produce these artifacts which are product artifacts. Even if there are people in strategy creating their artifacts, even if design is coming up with a design brief, you need to have a cohesive product strategy or product PRD and work backwards from PRD and product knows yourself. These things are important to show you are progressing on four pillars, which is data and metrics, design and research, technology skills, and strategy.

**Vikrama Dhiman** (00:17:41):
Product managers constantly are evaluated on this when you interview, but you also have to demonstrate these on the jobs. And the best way to demonstrate these is through the artifacts, through the notes that you are sending. So you must have that impact to impact through the artifacts that you work on. For a lot of product managers, when I ask, "Hey, I was working on this very impactful area. I'm not able to have the impact on my career, what is missing?" And when I go and ask, "Can you show me your last PRD? Can you show me the last product note that you sent? Can you show me the product strategy doc that you have or collaborated on? Can you show me the brief that you sent to the design team on the problems and the ranking of those problems?" Usually, you'll find something or the other missing.

**Vikrama Dhiman** (00:18:31):
In cases that those are bad, you will find that the pre-iteration planning, pre-sprint plannings are not running properly. You will find that the Jira storyboards are very empty and there's just a title in the subject and nothing gets described and so on. So you'll miss all these pieces. So these are the things which you bring to the table and it's very, very important that you work on these aspects as well. Finally, we have what's your operating model, which I feel is the most important thing which you have to have to focus if you are going from mid-senior to senior level. This is essentially about communication, collaboration, organizational skills and community skills.

**Vikrama Dhiman** (00:19:16):
And across product managers, again, because of the folklore of mini CEO and others, I see that a lot of people get carried away in the way they operate as product managers with other stakeholders. There are three tenets that I define in working well as a product manager with others. Number one is raise difficult issues without being difficult to work with. Bring out important topics without drawing importance to yourself. And finally, you are in charge of getting the decisions made and not making all the decisions yourself. I think as long as you follow these three tenets, you will have a successful relationship across stakeholders. These three tenets are easy to say, but they become very, very hard to embody and display on a day-to-day basis. But this is essentially going to be your struggle no matter at what level of product management you are operating at in your career or within your company.

**Lenny Rachitsky** (00:20:28):
First of all, can you just repeat them? Because I think this is... Essentially, it's like a mantra that PMs can think back to of, "Am I doing these things?"

**Vikrama Dhiman** (00:20:36):
So the three things which are very important for product managers to work with others and other stakeholders are raise difficult issues without being difficult to work with, bring out important topics without drawing importance to yourself, and be able to get decisions made without having to make all the decisions yourself.

**Lenny Rachitsky** (00:21:02):
I like this list a lot. It reminds me, there's this product leader I worked with who their team got pushed to do a bunch of stupid stuff. And he realized later that, "Hey, it's actually my job to have pushed back on doing this stuff." He was the head of product for this business unit and he realized, "Oh, I see. That's actually what I should be doing now that I'm in this role." And you sometimes forget that one, you have that influence. And two, that's something you should be doing.

**Vikrama Dhiman** (00:21:33):
Absolutely, absolutely. It's always within your control and it's always the things that are within your control that you should be controlling rather than focusing on the things that are not within your control and obsessing about those.

**Lenny Rachitsky** (00:21:49):
I'm so aligned with the way you think about all these things. Coming back to the second actually, just to give people something they can do with this trait. So the way I think about what you described, and correct me if I'm misinterpreting it, is there's a detail-oriented-ness, high quality-ness to the way that you should be crafting all the documents/artifacts you're creating, your one-pagers/PRDs, your roadmaps, your strategy docs, just like they should be really high quality. So along those lines, if you're an ICPM trying to get better at this stuff, how have you found is the best way to level up in these things? Is it working with your manager and getting feedback? Is it peers? What helps somebody get better at the quality and yeah, the quality of these documents?

**Vikrama Dhiman** (00:22:34):
What you bring to the table is one of the most misunderstood attributes and aspects of product management. On one end, you could get around and say, "Here is my PRD, here is my JIRA board, here are my stories, here is my pre-sprint planning or pre-iteration planning document" and go. It's not just about the spread and the width of the things that you're doing, but it's also about the depth of those things as well. Some product managers, what they bring to the table is arguments, what they bring to the table are debates, what they bring to the table are pushbacks, while others are able to channelize the questions, channelize the inputs, channelize the direction and convert that into strategic choices which can then shape discussions, which can then shape direction. Be the latter and you will rise faster in your career.

**Lenny Rachitsky** (00:23:26):
So you have these three buckets of what you produce, what you bring to the table, and what your operating model is, the three W's. So let try to summarize and see what I missed and then we'll move on. So one is just focus on executing, getting things done that are helpful to your team, your company, your manager, and focus on just getting stuff out. Not so much in necessarily in strategy. Even when you're a manager and a leader and a VP, just like you're still responsible for producing things, not just telling people and being wise. Two, what you bring to the table, my takeaway here is produce high quality artifacts that raise the bar.

**Lenny Rachitsky** (00:24:05):
The way I think about this is as a PM, you want to have this aura of I got this. People put something on your plate, you want to feel like Lenny's got this, I'm not going to have to worry. It's going to be forgotten and I know it's going to be done well. And then the third piece is this idea of an operating model. Basically just make sure decisions are being made. It's not about you that you're pushing back on bad ideas. Is there anything else I missed before we move on?

**Vikrama Dhiman** (00:24:31):
No. I think the art of pushback is another important factor because if you're pushing back a lot and the way you are pushing back matters a lot as well. Just don't be someone who's seen as an obstacle and a hindrance and as someone who's just very difficult to work with, but rather see as someone who's able to actually add value to whatever your leader, your stakeholders, your product area demands and you are able to advance the product and the direction and execution forward. Once you do that, I think keeping that as the intent and ensuring that your team is getting unblocked and not getting to do work on anything which is stupid or is likely to be changed, then you've really got it.

**Lenny Rachitsky** (00:25:23):
Do you have any advice for how to pushback in a way, the way you describe it is not to be difficult to work with or without seeking importance? I guess is there words or phrases or approaches you found are effective for pushing back against ideas that you disagree with?

**Vikrama Dhiman** (00:25:38):
What I've seen that people who do pushback very successfully and are still considered not difficult to work with, they are also able to bring the tempo of the conversation to a more logical space from an emotional space. I think that's such a useful skill and I sometimes am guilty of operating on a slightly emotional note, which is useful. Sometimes you need a war cry, you need a high pitch, you need execution on war footing. All that is fine, but it's only fine in some cases. In other cases, it's always very important that you're able to bring it down to the logical space so that a logical and a little more equal footing of the discussion can happen. And a lot of this is something that leaders need to ensure is happening, but product managers and product leaders who are working with executives who are able to bring this tempo down and bring it to a little more logical space will also do far better in their careers and they'll also have a lot more rapid career growth.

**Lenny Rachitsky** (00:26:55):
So let's talk about the flip side of rapid career growth, which is career growth that stalls. And I'm curious what you've found most impedes people's career growth. What do PMs do that shoot themselves in the foot and slow their career? Any pitfalls do you find are important to try to watch out for?

**Vikrama Dhiman** (00:27:15):
I think part of it is on a lot of us in product leadership space. We've not done a very good job in defining rubrics, growth frameworks and so on. But even in places where growth frameworks exist, like three W's, what I've seen is that clean mindset shifts and changes can enable faster growth, but those mindset and changes also can hinder your growth, right? So the first thing is whether you are focusing on things you control or whether you're focusing on things that are beyond your control. Second, what's your relationship with change? And third is how you see yourself. The third is very, very powerful and we'll talk about that as well. The first is what you control. If you drew an access of what you control and what you cannot control, as you're starting your career, most of the work that you're doing is in what you control, right?

**Vikrama Dhiman** (00:28:15):
You are very obsessed with feedback, you're very obsessed with, "Okay, can I do this?" "Can I do this?" "Okay, I'll probably not do this. I'll probably do this", and so on. You're not worrying about the overall corporate strategy, you're not looking at what the competitors are doing, what is their market cap and all those things. You're focused a lot on your craft, you're focused on a lot on your output and you're focused on how you are growing. As you start becoming mid-senior, I see the conversation shifts from what can I do, how am I learning, how am I growing, to why is the organization not doing this for me? Why can that stakeholder not change this thing about themselves? Why do I not get to work on projects like this? Things which start going outside your control. And it is very, very important that you keep your focus no matter what stage of career you get into what you can control.

**Vikrama Dhiman** (00:29:16):
And again, it's easy to say that everything in universe should be in your control. It doesn't happen like that, but a large number of things that impact your career are within your control. And go back to the three W's that we spoke about, what you work on, what you produce or what do you bring to the table, and what's your operating model? And there is tons to do on data, tons to do on technology, tons to do on communication, collaboration, design and research, strategy and community. And you can spend years and years and years crafting those things. Focus on those things, growth will happen at every single stage. The second aspect of it is your relationship with change. Again, when you are younger, when you're starting off, rate of change is crazy. You are growing almost every six months. You are picking up skills and experimentation, you're picking up skills in how to analyze.

**Vikrama Dhiman** (00:30:15):
You're picking up skills in how to work with different kind of stakeholders. And since the rate of change of your skills is high, your rate of growth is also high. Again, as you start becoming mid-senior, I start seeing conversations on, "Okay, maybe I should not do that. Maybe I should not take on this product. I don't know what it means for my career. I don't know what it means for my growth" and so on. So your rate of change slows down. So it's very important that as you get to mid-senior level, you are constantly checking on what you can do to keep increasing your rate of change. And one of the simplest things that you can do is if you think you are four on data, figure out who. And you may be four on data out of five in data. Within your organization, start benchmarking yourself with the best in the industry.

**Vikrama Dhiman** (00:31:13):
You'll automatically see that your scale drops and as your scale drops, you start seeing what you need to improve and do. If you start seeing that on communication and collaboration, you're reaching four out of five within the PMR, start mapping yourself to other stakeholders in other functions. Again, your score will fall in your eyes and you will start figuring out what are the things that you can do as well. So keep your focus on rate of change and rate of growth will automatically take care of itself. Sometimes it also involves changing your team or even changing your company, but those should be the last results. There are significant things that you can do within that as well. One of the final things that I see which limits you, especially as you start growing in your career and you reach mid-senior levels is how you see yourself.

**Vikrama Dhiman** (00:32:04):
I see a lot of product... And I've been guilty of that. When I see that a lot of product managers, that's included me at some stage, doing these things, people will come back and say, "Oh, I am a very high agency PM" or, "I'm a very collaborative PM." Earlier on, I used to think that okay, I need to give this kind of work to these product managers. I need to fit them with these kind of team, these kind of work areas, these kind of opportunities. But then I started understanding these things are not just signaling, they are also anti-signaling. They are like, "Oh, I'm high agency. So it's sometimes okay if I'm little brash, if I cut corners somewhere, if I sometimes come across as a little rude to some people" and so on, right?

**Vikrama Dhiman** (00:32:55):
Similarly, if I'm seen as a hyper-collaborative person, so it's okay if sometimes I'm not very decisive, if I'm not moving fast and so on because I'm this kind of a PM. So it's very important that you check for what are the stories that you're telling yourself because those stories are defining you at a basic level, which is then very hard to correct through frameworks and structures. So figure out what is the story that you are telling yourself. If you are not able to figure that out, talk to the people you trust so that they can tell you that as well, and then correct those stories. And the moment you are able to correct those stories, you may be back on the growth path again.

**Lenny Rachitsky** (00:33:39):
Wow, there's so much meat and wisdom in what you just shared. I want to go in so many different directions. Maybe just to follow on this last thread, did you go through something like that yourself where you have this sense of yourself that hindered you? Okay, awesome. You're nodding your head, if you're not on YouTube. Can you share that?

**Vikrama Dhiman** (00:33:57):
Yeah. So I'll give an example of when I joined Gojek. The very first thing that I learned in my career was SQL and Oracle. And I was very proud of the fact that my data skills are awesome and I know several frameworks and I know several tools and so on. And when I joined Gojek and I saw one of your guests, Crystal, and I saw the work that she was doing and her team was doing and I just immediately was like, "Yeah, no, this is not... I'm nowhere near", right? And similarly, I also thought that my communication skills are really good and my product strategy skills are very good, but then I worked with people like Dito and people like Sidu who was so good at their craft that it challenged me to see that okay, what is it that I am missing? What is it that I am doing wrong?

**Vikrama Dhiman** (00:34:57):
And it auto-calibrated me in my eyes on where it was, but that also created a hunger in me that this is what I need to fix. And I immediately corrected my assessment of myself that I'm not the strongest product manager on data. I'm not the one who knows all the strategy pieces or even strategy frameworks or how to bring everything to a strategy point of view or communicate it from an effective perspective. And then I started framing I'm still in a learning phase. When I see that I'm not in that phase now, I try and make myself humble by interacting with people who are far smarter than me on different scale or reading different books, or watching podcasts like yourselves. And that keeps you grounded on the fact that okay, you are always learning. And I also found that seeing yourself as someone who's a learner is an enabling story to tell yourself, okay?

**Vikrama Dhiman** (00:35:58):
It may not be the most exciting story, it may not be the most memorable story about yourself, but it is definitely one of the enabling stories as well. Similarly, I think one other thing that I used to say about myself was more that I'm very high agency PM. But as I started working more in Southeast Asia, I learned that mindfulness is also very, very important, that not every team, not every culture will work with you in a very hyper aggressive style. But you still need to get the work done. And I'm still learning on that and therefore, I've started using a word, I don't want to be a high agency person, I want to be a mindful agency person. And so these terms are very important because these are the stories that you keep telling yourself and these also then start shaping your behavior. I do feel that I have a lot to do, I have a lot to learn on these skills, but these things definitely keep you grounded and you keep coming back to the learning phase again.

**Lenny Rachitsky** (00:37:09):
It's interesting that when you saw Crystal being incredibly good at working with data, you just realized, "Hey, maybe I'm actually not very good at this." And your reaction wasn't, "God damn it, I'm really screwed and this is really depressing me", it's, "No, instead I'm going to try to get better at this." And that reminds me some of the feedback I get with this podcast, those people are like, "Man, these people are so good, I'm never going to be this good. It discourages me from thinking I will ever be super successful in this career." Clearly, you have a different approach. Do you have advice or guidance to folks that are sometimes discouraged seeing people being so incredible and helping them actually continue to level up in this rate of change you talked about versus just like, "Nope, I'm never going to be that good?"

**Vikrama Dhiman** (00:37:54):
I think as product managers it becomes difficult because a lot of your growth is being determined because of feedback of others. And because product management is so ambiguous and still not defined, the stakeholders can also give feedback on variety of dimensions. Some of them may not even be important enough to give feedback on, but they are important enough for them and so therefore, they give you feedback. And therefore, you have to shape that feedback in. But you also have to consider that there are these eight access that we spoke about, the data access, the design and research access, the technology access, the strategy access, communication access, collaboration access, organizational skills access, and the community access. You need to channelize feedback into okay, is this an area that you are targeting for growth or not?

**Vikrama Dhiman** (00:38:51):
And one of the most important things that I learned was that when I joined Gojek or even earlier, there would be so many different areas that I needed to improve on and still need to improve on. You can't improve on every single area. That's what overwhelms you. You need to pick which is the area which is the maximum leverage for you and improve on that particular aspect and then move on to the next area, then move on to the next area and so on. Obviously, if you are floundering in something, if you're really negative in something, then you fix that first because that will give you the highest leverage. But if you are picking up data and design and strategy and technology all at the same time, that's when you'll overwhelm you.

**Lenny Rachitsky** (00:39:33):
So to summarize the advice there is one, be actually very open to feedback you're getting. It's easy to say that, it's hard to actually listen to people criticizing you and act on it. So I think that's an important takeaway here is just actually, feedback is a gift and actually understand that and try to act on it. I have a great interview with Jules Walter who's a PM at Google now, and he has this awesome quote about how whenever people give him hard feedback, it's like internally he's just melting, but that's externally he's like, "Thank you so much for that feedback, I really appreciate it. It's very valuable."

**Lenny Rachitsky** (00:40:10):
And so that's a good way to get people to keep giving feedback. Okay. And then the other piece of advice you just shared there is pick a focus area. Like say you're getting all this feedback, your strategy isn't amazing, your PRDs aren't great, just find one thing to focus on. And I don't know, do you try to do somewhat quarter? Somewhat year? Do you have a heuristic of how long to spend on one thing?

**Vikrama Dhiman** (00:40:31):
So different skills take different time and how you are progressing also depends a lot as well. For skills which are softer in nature like communication and collaboration and community, those are skills that you will work on all your life. You'll never achieve anywhere near two or five on five on those ever. There'll always be something that you will miss, there will always be a new context, there'll always be a new set of stakeholders, new company cultures that you have to adapt to. For others, you have to see that what gives you the maximum leverage in your career. When you're starting off, my recommendation is that you pick between data and tech one, and definitely one on design and research and strategy.

**Vikrama Dhiman** (00:41:18):
So usually, that's the combo that I recommend. My advice is if you're coming from design and research background, then you pick data or tech. If you're coming from a data or tech background, then you pick design and research, and that gives you the maximum leverage because that's a skill that you will necessarily not have developed over the years. Once you've demonstrated on two of these three, between data, tech and design and research, then you start focusing on strategy. We've had great success at Gojek in transitioning a lot of product managers, especially in Indonesia, using this framework. And it's produced a lot of good product managers for us.

**Lenny Rachitsky** (00:41:59):
Well, let's actually follow that thread. That's really interesting. And so the approach is you have this access of skillsets and you pick, for this person moving from say customer service to product, here's the two things you need to focus on. Can you talk more about that?

**Vikrama Dhiman** (00:42:15):
Yeah. For instance, we recently had two PMs, one who came from a growth background. This is actually [inaudible 00:42:24]'s team. And one from a research background. And with both of them, we use very different tactics. So we gave one of finding driver redesign, which was very much a very design-focused product, but we still had them leverage their data skills because we were able to create a PRD with incredible amount of data on exactly what different segments of customers we're doing. And that then we worked with designers on what the designs and the framework for that will be. And even now, Lenny, if you will come and see our finding driver redesign next time you are in Asia, it's a piece of art. And if you would see that that was worked on by a product manager who actually came from a growth and data background, that makes it even more special.

**Vikrama Dhiman** (00:43:13):
Similarly, the PM who transitioned from research, I kept giving feedback on technology and data skills are the ones that we need to check. And I need to hear from engineers that yes, they're able to work with her very strongly. And once she was able to do that, she's recently turned a very heated question on one of the features that we were doing into a full-blown solution with designs, with trade-offs and everything, and able to now convert it into a question for leadership on how we should be approaching this particular product and direction. So I think that's proven successful as well. Similarly, there's another person who took risk who was originally from research and again, worked a lot on our products, including our enterprise product. And she's doing an amazing job as well. Again, going through that path of okay, these are the things that you need to leverage.

**Vikrama Dhiman** (00:44:14):
The only watch-out is that it doesn't work out always. In some cases, some PMs will pick these things up fast, and it also makes a big difference if you are transitioning when you are slightly younger in your career. If you are already senior in a function and then you are transitioning, sometimes it can take a lot of time in transitioning and picking up those skills. But it's definitely doable if you get a very strong product leader working with you who's able to shape those skills for you. So it's sometimes okay to go a little slow when you're transitioning so that you're able to go faster later rather than getting faster somewhere and then being stuck there for a while.

**Lenny Rachitsky** (00:45:00):
**Vikrama Dhiman** (00:46:56):
I think we've been in technology product for several decades now, but we are still figuring out what an exact definition of product management is. And even the strongest definitions are slightly principled and philosophical in nature, they're not very concrete, and that also means that every and different technology companies have gone through different journeys and they've defined the roles very, very differently. And even within a very large company, you will see that different teams, different divisions are approaching the roles very, very differently as well.

**Vikrama Dhiman** (00:47:34):
And on top of that, what that does is that not only internally the product managers are figuring this out, their managers, their leaders are figuring these things out for them, but the other stakeholders who have to work with these product managers are also confused and they don't know what to expect. And the number one question I get from stakeholders is, is a product manager expected to do this? Because they also don't know, okay, is this expected from a product manager or not? And my general answer to that is, if this is something which is blocking the progress on the product, then yes, the product manager should work on that.

**Lenny Rachitsky** (00:48:09):
Love that.

**Vikrama Dhiman** (00:48:09):
But that works if the product managers have had some training and they have had some training in working with different stakeholders and they have had something on the job. What I've figured out is that there are certain functions and there are certain disciplines which you can't define, but you can only become better at with practice. For instance, what is an actor or what is a dancer? Right? So these are things that you will get better at as you become skilled at it. And earlier, these things used to be looked at as something which is very artistic, only the people who are talented or only specific kind of people can do it. But now, each one of those has become [inaudible 00:48:57] and frameworks as well. So there are courses on filmmaking, there are courses on acting, there are courses on dancing and so on. And similarly, product management is that space as well.

**Vikrama Dhiman** (00:49:08):
So you have to understand there's an art to it and there's a science to it, but you can use the science to figure out the art. So that's the philosophical side of it. The second side of it is what we spoke about earlier that instead of figuring out what is product management, figure out what's your contribution, what's your output and figure out are you contributing on these access on data, on design, on technology and on strategy. And one of my favorite things is that if you created these four circles of strategy, of technology, of design and of data, and you created a product management circle which encircles each one of these, so you are the only discipline, which is the co-collaborator for all of these disciplines and tying all these things out.

So it's not about you standing alone, it's you always collaborating and pairing with someone else. But you are the only one who's pairing with everyone else and therefore, you have that unique insight which no one else in the team will have. That role can be played by someone else, it doesn't necessarily need to be called a product manager. But if you are being called a product manager, you figure out the [inaudible 00:50:24] the time piece that you are. And when you are added to the team, you must dream the team's overall contribution, overall energy and overall output up and not down.

**Lenny Rachitsky** (00:50:37):
I love that. Something I always tell people is the PM doesn't necessarily have the magical skills other team members don't have, it's that they don't also have another job. Engineers may do a great job at being the PM, they just also have to build and code. And they don't have time to do all the things that a PM has to do, and a designer is in the same way, a researcher or data person. And so oftentimes, that's just like there's this person that has the time to do all these glue, work things between teams. And the great PMs also are very good at these skills that help you do these things, but it doesn't mean other people can't do them.

**Vikrama Dhiman** (00:51:19):
You see yourself as playing a role and not your title and not your function, and that just clarifies a lot of things for people. And different people will play different roles. And depending on the kind of a PM you are, are you in a specific domain or you are slightly generalist, the role that you will be playing in different teams can be different and the variety of roles that you can play makes you a better product manager.

**Lenny Rachitsky** (00:51:47):
I love that. You've mentioned these four access attributes of great product managers, overall product managers. Let's just spend a little time here. So you say basically the things you need to be doing and good at, data, design/research technology, strategy, and then you also mentioned collaboration and communication. Maybe you're-

**Vikrama Dhiman** (00:52:08):
Yeah, organizational skills and community. I think those are very, very important because one of the things and one of the things which one of the product managers works with me continues to say, and I really plus on that a lot, is that product manager is the all community enabler in the team, in the organization. And that community is the software aspect which ties everyone together towards a common mission of delivering an output. And that I think is a very, very important goal in today's context, especially for teams which are becoming more remote or teams where people are not co-located or they're distributed. That community aspect becomes a very, very important part that product managers need to focus on and bring and channelize as well.

**Lenny Rachitsky** (00:53:05):
So let's just quickly describe each of these attributes. I imagine people might be thinking, "Okay, what should I get better at as a PM?" And this is an awesome list. Each company has their own career ladders and attributes and things like that, but not a lot of companies don't. So I think for people that are trying to figure out where do I need to get better, I think this is a really cool list. Can you just maybe just a sentence explanation of each of these attributes and skillsets that a PM needs?

**Vikrama Dhiman** (00:53:31):
So each one of those skills, like the most growth ladders, what they will do, is they will have say for data, they will have level one, exhibits these traits. Level two, exhibits this trait. Level three, exhibits this trait. Level four and level five and so on. That's how they'll describe it. But five is absolute ninja level data quality, like you could probably do a data startup of your own.

**Lenny Rachitsky** (00:53:55):
Like Crystal basically?

**Vikrama Dhiman** (00:53:57):
Crystal. And level zero is someone who cannot even basically define the basic metrics for this particular product and won't be able to figure out is this particular thing impacting orders or users or revenue. And so you'll really not be able to figure even that piece out. Similarly, on design and research, for product managers, we focus a lot more on problems and are you able to identify problems from a user's perspective. That's at level zero. And level five will be somebody who's able to define the user problems but is also able to tie them to business roles as well. So that makes it the holistic. Similarly, on technology, it's one of the skills which is relatively easier to define where you don't have any tech understanding. If somebody asked you what is HTTP or API or internet and you'll be like, "Okay, I don't know what it is."

**Vikrama Dhiman** (00:54:55):
And while on the other end, you are able to have deep debates and could probably write technology design documents yourself as well. I think sometimes people get confused between data science. And in different organizations, I see data science bucketed either in data or in technology. Either is fine as long as you are clear on what your organization's framework is. Similarly then, there is strategy. Strategy is I think another area in product management which gets very confusing because there is obviously corporate strategy, there is business strategy, there's pricing strategy, there's strategy everywhere. Product strategy for me is where you are able to define that while somebody defines that this is the mountain that you're going to climb, but okay, how are you going to climb that mountain is basically the product strategy piece.

**Vikrama Dhiman** (00:55:47):
So you are not in charge of okay, are you focused on growth? Are you focused on revenue? Are you focused on profitability? That's someone's choice. Are you going to pick this country? Are you going to pick that country? But once that is picked, what are the user segments that you're going to focus on? What are the needs of those user segments? How are we going to figure out what the right product for them will be? What is the order in which we are going to work on that? That whole piece of product strategy is with the product managers. And again, in the first case, you are basically going to rely on everyone to tell you, do this, do this, do this. In second and in the level five cases, you are able to articulate a very coherent product strategy at a broad level as well.

**Lenny Rachitsky** (00:56:33):
Amazing, thanks for sharing that. I think for people that are trying to craft career ladder for product managers, this could help inform the way they think about this. By the way, when we mentioned Crystal, for folks that have no idea who we're talking about, she was a early head of growth at Gojek back in the day. She was a previous guest on the podcast. I always forget how to pronounce her last name exactly, but I think it's Widjaja, Crystal Widjaja.

**Vikrama Dhiman** (00:56:33):
Widjaja.

**Lenny Rachitsky** (00:56:54):
Widjaja? Okay, okay. Great. Going in a different direction, we're going to move to contrarian corner. I'm curious if there's anything that you believe that other people wouldn't agree with or generally just don't believe?

**Vikrama Dhiman** (00:57:12):
I used to think intent is the most important thing, right? And when I was starting off, that used to be the advice that as long as your intent is right, even if some of your words are not landing, even if some of the comms are not landing, that will work out. What I've seen is that it's not enough. Your actions, your behavior, and the way you communicate, the way you collaborate, that also has to communicate and show who you are as well. So intent is not enough. And that's a thing which I think a lot of people in my age group just don't get, but people who are slightly starting off their career, it resonates well with them. Second thing I think where I feel that it's become, I don't know, is it contrarian or it's become politically incorrect, is that you still need to put in the effort and our number of hours is effort.

**Vikrama Dhiman** (00:58:23):
And I think that's one thing which has become very politically incorrect to say over the years when I was younger, it was the norm that yes, you will have to put in the effort, you will have to put in the hours to grow and improve your skills. And it's not even about your growth in the company, it's just your own growth. You have to spend the time, effort, and energy into growing. I think a lot of that is getting lost in the debates between complete workaholism and just being not very serious about your growth at all. So I think those are the two that I find myself having to explain myself again and again and why I feel this way.

**Lenny Rachitsky** (00:59:14):
I completely agree with that. I find a hugely strong correlation between hours you put into the work you do and success. And I think there's been a return to okay, working hard is really important and you shouldn't be afraid of promoting working really hard. So we've actually gone through everything that I wanted to ask you. Before we get to our very exciting lightning round, is there anything else you wanted to share or is there anything you want to leave listeners with?

**Vikrama Dhiman** (00:59:41):
No, I think it has been great talking to. I hope it was useful to people. I've tried to keep it real, but also in takeaway format. And if there are any questions that you have that I feel I have not answered, I'm happy to answer them.

**Lenny Rachitsky** (01:00:01):
Okay, amazing. Well, we'll have people post in the comments if there's anything else they would love to ask you. With that, we've reached our very exciting lightning round. Are you ready?

**Vikrama Dhiman** (01:00:12):
Yes.

**Lenny Rachitsky** (01:00:14):
First question, what are two or three books that you've recommended most to other people?

**Vikrama Dhiman** (01:00:19):
The first book is a book which I feel is not quoted enough in product management community, is a book called Small Data by Martin Lindstrom. This is a person who was an advertiser or marketeer who would go and make campaigns for big brands in different countries, and so would have usually very short time to get the pulse of that space and design a campaign around it. And how he got insights very quickly from, and what are some of the takeaways that are there for people working in product space, not just product managers, but designers, researchers, strategy people, anyone really, I can't recommend that book more. And I've cited that book a lot internally.

**Vikrama Dhiman** (01:01:09):
The second book that I recommend is Adam Grant's Originals. I think it's a very important book. It changed a lot of things. When I spoke about that I was going through this crisis of, oh, I'm behind so many things after joining Gojek, Originals was one book that I read which really, really helped me think about my growth and how I see myself. And anyone who is stuck or anyone who feels they are superstars, they are the innovators of the century kind of a thing, it's a book that gives you a very good reality check. And the third book that I recommend is definitely Daniel Kahneman's Thinking, Fast and Slow. I think especially the thinking slow part becomes very, very important piece as well.

**Vikrama Dhiman** (01:02:11):
And the reason why change is hard, the reason why feedback is hard is because we are used to thinking fast and we are not used to thinking slow. While if you actually think slow, you'll actually welcome change and growth.

**Lenny Rachitsky** (01:02:26):
Amazing. That book's come up a bunch actually recently on the podcast and it is always sitting under my laptop, holding up my laptop for these interviews. So I fully agree. Next question, do you have a favorite recent movie or TV show that you've really enjoyed?

**Vikrama Dhiman** (01:02:41):
I haven't seen a lot of movies recently, I think. But while I was on the flight back from Dubai, I saw Miss Congeniality again and I really, really enjoyed it. I thought it's a very fun movie, but also had a pretty good message. I know it's probably not the movie which anyone would want to cited, but I think it's sometimes good to just watch good entertainment.

**Lenny Rachitsky** (01:03:18):
That's quite the contrarian pick. Yeah, nobody has cited this movie, Miss Congeniality. This is a first, but I love it. It's way out there. I would never would've expected this.

**Vikrama Dhiman** (01:03:27):
In terms of TV shows, I think the show that I really go back to all the time is Schitt's Creek. I think it's a show which operates at so many different levels without taking itself that seriously, and it just lands. And especially as a product manager and as a leader who obsesses a lot about diversity, I think it did a fantastic job in showing different sides of motherhood, of the LGBTQIA communities, and also teenage girls figuring themselves out as well. I think it did a fantastic job.

**Lenny Rachitsky** (01:04:07):
Do you have a favorite interview question that you like to ask candidates when you're hiring product managers especially?

**Vikrama Dhiman** (01:04:13):
So it's not really one question, but what I like to do with them is to brainstorm choices on an actual product. And I'll typically pick up a product that they use most often and then I will be like, "Okay, what if this product were to do this? Then what do you think, it makes sense? Don't think it makes sense? What about this? Okay, how would it evolve in six months? What would happen in 12 months and so on?" I think it gives you a far better insight into how would it be on working with them on a real case. And you also keep... And what I like about it is that you can keep going back deeper into it and develop it together. So I typically try and pick product that I will also not have very strong opinions on so that it can become a two-way conversation.

**Lenny Rachitsky** (01:05:14):
What do you actually look for in an answer that tells you, "Okay, this candidate is amazing" versus flags that are like, "Hmm, maybe not?"

**Vikrama Dhiman** (01:05:21):
There are some obvious check marks that are they able to first abstract out and figure out what the overall goals for the product are, who the users for that product are, what would they be focusing on right now, whether this will align with that or not. And then a reason backwards that okay, maybe this may not work, but something on these lines. Are you obsessed about this feature or are you obsessed about okay, what this enables you to do? So if this is what it enables you to do, then are you okay with considering some other options and so on? So I think that's the direction which usually goes in the right way.

**Lenny Rachitsky** (01:06:04):
Is there a favorite product you've recently discovered that you really love?

**Vikrama Dhiman** (01:06:08):
So the reason why I've not watched a lot of drama or TV recently is because I've discovered these short video apps through Instagram and all of these apps, they dub Chinese TV serials into English or there will be subtitles in English and they are delivered in TikTok style two-minute videos. And it's a masterstroke in how the series are constructed. The first few episodes, which is like 10 episodes which is about 10 to 15 minutes, sets up the story in such a way that you have to unlock the next 10.

**Vikrama Dhiman** (01:06:47):
And these videos are quite expensive. They end up, one series takes more than the entire cost of monthly cost of Netflix to view. But it's just amazing how the whole product has been put, how all these products have been put together on unlocking the lamification aspects of it, the storytelling aspects of it, the content cutting part of it, and even the selection of the stories part of it. And what I'm told is that once I've learned about it, I've also been reading about it, they're actually companies which are able to give you tools of where you can construct this app yourself. And multiple people, two-people, three-people companies are churning these out and earning a lot of profit from it as well.

**Lenny Rachitsky** (01:07:41):
What is this called for people that want to check this out?

**Vikrama Dhiman** (01:07:43):
So you can start with DramaBox, you can start with [inaudible 01:07:47] Reels and so on. And there are multiple of these. And those of you who are very familiar with TikTok, you would've seen that some of these show you the first 10 episodes on TikTok and then they take you to their app to view the rest.

**Lenny Rachitsky** (01:08:01):
Wow. I love so many unusual contrarian pieces of advice here, I love it. Two more questions. Do you have a favorite life motto that you often come back to, share with friends or family, either in work or in life?

**Vikrama Dhiman** (01:08:15):
For me, the most important thing has been that I started my career very late in tech. I was already 25. For the first several years, I worked in a small [inaudible 01:08:32] town in India. I came to Delhi only in 2013, and I joined Gojek in 2018. I think I've done reasonably well for myself. And it's never late to do or what do you want to do and what do you want to be. I think that's the thing that I really, really believe in and I also advise in. Especially as the world is aging and a lot of people are thinking about it, I would say that it's not too late ever. You can be and do what you want right now.

**Lenny Rachitsky** (01:09:17):
So good. It's not too late. I really, really like that advice. My wife is an illustrator designer. She has a book she put out called Am I Overthinking This? It's in my background somewhere there. And she has a chart that communicates that exact message in a really cute way, and we'll try to link to it in the show notes. Final question. You live in Singapore, I know you travel a lot. But if someone were to come to Singapore, is there a food that you think they need to try that's unique to Singapore?

**Vikrama Dhiman** (01:09:45):
Singapore? There are multiple. So Singapore is a melting pot of different cultures. There are four official languages. And the only thing I will advise is depending on your taste buds, whatever you want to do, you should go and visit a Hawker Center. And it's an amazing experience in itself. And those of you who've seen Crazy Rich Asians, the first thing they do when they land in Singapore is go to the Hawker Center. So it's an experience of its kind. And if you are looking for a specific recommendation, go to Lau Pa Sat. If you are a fan of Indian, you'll get that. If you're a fan of Malay cuisine, you'll get that. If you're a fan of Singaporean Chinese, you'll get that. So you pick what works for you.

**Lenny Rachitsky** (01:10:36):
I love that. Vikrama, I feel like we've produced both a lot of output and we're going to have really great outcomes from our conversation. 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 any of the stuff we talked about? And how can listeners be useful to you?

**Vikrama Dhiman** (01:10:53):
Thank you, Lenny. It's been great talking to you as well. Hopefully, this turns out well. You can reach out to me either on LinkedIn, Vikrama Dhiman, or you can reach out on Twitter. Twitter works better. And the listeners can be useful to me by, well, just sharing whatever they feel. And I continuously follow a lot of people, a lot of people who are not yet famous. Just tell me what your story is, just tell me what you are working on. And as long as you are passionate about it, I will try and find time. Maybe I cannot talk to everyone, but I'll definitely try and find to chat with you and listen out and support or connect you to someone who can help support you.

**Lenny Rachitsky** (01:11:44):
That's a very generous offer, I think a lot of people are going to take you up on that. Vikrama, thank you so much for being here.

**Vikrama Dhiman** (01:11:51):
Thank you so much, Lenny.

**Lenny Rachitsky** (01:11:53):
Bye, everyone.

**Lenny Rachitsky** (01:11:55):
Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [11/21] Be fundamentally different, not incrementally better | Jag Duggal (Nubank, Facebook, Google, Quantcast)

**Lenny Rachitsky** (00:00:00):
NewBank is bigger than Coinbase, Robinhood, Affirm, SoFi, and Lemonade combined. 80% to 90% of NewBank's growth is through word of mouth.

**Jag Duggal** (00:00:10):
We're not trying to be incrementally better, we are trying to be fundamentally different. We want our customers to love us fanatically.

**Lenny Rachitsky** (00:00:18):
It feels like NewBank is one of the historically most successful companies that launching new business lines.

**Jag Duggal** (00:00:22):
We built a lending product, we built an investment product, we built an insurance product, we built a series of small business products. We rarely scale a project until we know the Sean Ellis score hit a threshold that we find really compelling.

**Lenny Rachitsky** (00:00:35):
I want to talk about strategy.

**Jag Duggal** (00:00:36):
Kevin Systrom in the early days of Instagram, I heard him say it at a conference. We may not be right, but at least we are clear. Even if your strategy isn't right, you have a very clear idea of what was supposed to be happening.

**Lenny Rachitsky** (00:00:49):
Where do you think all this goes in the future?

**Jag Duggal** (00:00:51):
Why not have the company that reinvents banking come out of Sao Paulo, Mexico City, Bogota?

**Lenny Rachitsky** (00:01:01):
Today my guest is Jag Dougal. Jag is chief product Officer at NewBank, which is one of the most under-the-radar monster businesses that you'll ever come across with a fanatical user base, and a really unique approach to building product. Before NewBank Jag was director of product management at Facebook, leading monetization of video and third-party content, including news, gaming, and influencer content. Prior to Facebook, he was senior vice president of product and strategy at Quantcast, and group product manager and head of strategy for Display ads at Google, which was Google's second-largest business at the time.

**Jag Duggal** (00:04:38):
Lenny, I'm honored to be here. I'm a big fan of the show, and look forward to the conversation, so thanks for having me.

**Lenny Rachitsky** (00:04:44):
I'm even more honored. Thank you for being here. I want to start by sharing just some facts about NewBank that I think are going to blow people's minds. I think a lot of people in the US especially are sleeping on NewBank, and I think this is going to help people that are listening pay even more attention to the stuff we're going to talk about and the lessons we're going to share.

**Lenny Rachitsky** (00:05:02):
So one, NewBank is bigger than Coinbase, Robinhood, Affirm, SoFi, and Lemonade combined. 80% to 90% of new Bank's growth is through word of mouth. Three, NewBank has more customers than Bank of America, which is one of the four big banks in the US, while also only operating in three countries in Latin America.

**Jag Duggal** (00:05:29):
That's right.

**Lenny Rachitsky** (00:05:30):
And then also, you guys held the Guinness world record for the world's largest simultaneous unboxing for a credit card that you launched at some point. Although I think somebody beat that record, is that accurate?

**Jag Duggal** (00:05:42):
I believe that is correct. We've recently set a new world record for the first underwater credit card transaction, so we're always looking for some fun things to do there.

**Lenny Rachitsky** (00:05:54):
I like that that's a record no one can break because it was the first one. That's a sneaky way to get a record. That's hilarious. So my sense is the reason that NewBank thrived and made it is, there's this obsession with building a product that customers are fanatical about. The stat that I shared of 80% to 90% of growth is word of mouth. And this idea of growing through word of mouth in this way is the dream of every company, whether you're consumer business, B2B, a bank especially, very unlikely that you grow at this rate through word of mouth.

**Lenny Rachitsky** (00:06:24):
So I want to try to help people learn from what you guys have figured out about how to drive such massive word of mouth growth. And maybe just to start from the product perspective, how do you build a product team and a product development process that enables you to build a product that people get fanatical about. And just want to tell all their friends about?

**Jag Duggal** (00:06:44):
Yeah, I think there are a few things that are the fundamentals of making that happen. And to be clear, a lot of this predates my joining the company a little short of five years ago, but I think is an incredible story and is part of what inspired me to join. But first I would say, really think hard and tap into a very deep pain point. The large incumbent Brazilian banks were amongst the most profitable in the world, they were also amongst the most hated in the world.

**Jag Duggal** (00:07:20):
And my personal experience with that is early in my career, 20 years earlier in the late '90s, I had done a consulting project in Sao Paulo. And I remember walking to lunch one day with the client, who's a friend of mine, and we were going to Classic Churrasque Korea in Sao Paulo. And we were walking by his bank branch, and we were at a stoplight, and he basically said, that's my bank and I hate them. It was 1997.

**Jag Duggal** (00:07:50):
And it always stuck in my head. It stuck in my head for 20 years later when David first reached out to me. So we were tapping into a deep pain point, we can go into exactly why. But that was one thing. The second thing that I would say, and this is very intentional from David, and Ed, and Chris, our founders, is we have a culture at NewBank, which is the most alive in our employees' minds that I've ever experienced. Having worked at Google, and Facebook, and other places like that, I would bet that probably 80% to 90% of our employees could recite the five values to you if you stop them in the hall.

**Jag Duggal** (00:08:29):
It's not just on the wall somewhere. And the first of those values is a very peculiar phrase, set of words strung together. We want our customers to love us fanatically. And I remember when I interviewed at NewBank for the first time, and actually flew down to Sao Paulo, I remember seeing that phrase and thinking, "These are my guys. These guys are taking this seriously." And a lot of my interview process from my side was really vetting if that was real, or if that was a sign on the wall. So you start with the intent that you are going to make your customers love you.

**Jag Duggal** (00:09:10):
And there are a million reasons, operational, convenience, short-term financial viability, which is a real thing when you're a venture-funded startup. Any number of reasons why you can compromise those things on the edges, and in a decision day to day, minute to minute, "We can cut the edges, cut the corner here on that." And look, I don't think we have been perfect on that, but we try very hard. And when there are hard decisions to be made, we bias in favor of the customer. The customer's love, will they want to tell their friends, and neighbors, and family about it? And so I think that's the heart of it.

**Jag Duggal** (00:09:56):
Once you get those things right, the deep pain point, and a culture that is maniacal about making your customers fanatical, then you start to do the trade craft of product development. You make sure that you focus on customer discovery before you start building. You make sure that that discovery is focused not simply on asking the customer, but on innovating on their behalf. You make sure that you take techniques from all over the place, from Procter and Gamble, to Google, to you name it, of maybe you can't ask the customer to tell you what massive new innovation they would love. You've got to observe them, and find their pain points even when they aren't noticing it.

**Jag Duggal** (00:10:49):
And then as you build, you commit to measuring whether they in fact love the product, not fooling yourself about that. And iterating like crazy over and over and over again until you get it just right. So those are some of the principles, but I think the trade craft follows the focus on finding a real deeply held, emotionally held pain point, and a culture that says, that's your North Star.

**Lenny Rachitsky** (00:11:23):
Amazing. There's so many threads there I'm going to follow, first of all, I want to go back to the values. So you said there's five, you mentioned one. Can you just quickly share the rest?

**Jag Duggal** (00:11:31):
The five, I'll mention them in the order that most resonate with me. First, we want our customers to love us fanatically. Second, we are hungry and we challenge the status quo. Third, we build strong and diverse teams. Fourth, we pursue smart efficiency. And one that is in many ways underlying all of it is, we think and act like owners, not renters. We do what is right even when no one is telling us to do it. And we have many instances of our employees taking that degree of extreme ownership as they build products and get them launched.

**Lenny Rachitsky** (00:12:16):
Okay. And then going back to this idea of building products people love fanatically, you talked about how there's this the number one principle, and it's going to be on everyone's minds when they're building is build product people love fanatically. Talked about, you index towards if you had to make a decision, we're going to do something people love. Is there anything more you could share about just how you operationalize this? For example, is there design reviews where just you come in, or your head of design comes in like, "Is this helping customers love us fanatically?" What's in the systems and processes of how you operate that allows you to build that other than just cool, everyone has to remember this, this is what we're trying to do.

**Jag Duggal** (00:12:52):
Yeah, we do a few things. And again, I don't want to also overstate that we've achieved some nirvana. We honor many of these things in the breach sometimes, but we have a series of techniques that we've begged, borrowed, stolen from other places, some of which we've invented on our own. But some examples, we love the Amazon mock press release technique. Explain to me before we've put a single engineer on the project, not explain to me actually, explain to the intended customer why they should care. Because if you can't tell me in two paragraphs why the customer you're building this for should care, then there's still work to do. So that's one technique.

**Jag Duggal** (00:13:41):
We do have product and design reviews several times a week where we're asking ourselves that question, why is this great for the customer? Why is this fundamentally different for the customer? How does this redefine the category that we are thinking about on the dimensions of quality, on the dimensions of complexity, on the dimensions of price, and usually on the dimensions of all three of those at the same time? And breaking some of the trade-off constraints that you often wrestle with, and seeing if that's possible, which isn't always possible, but we frequently reach for that and sometimes find it.

**Jag Duggal** (00:14:26):
And then there are other things you do after you've built and launched a product, whether it's alpha, beta, or a later stage. The measurement stuff. And some of your previous guests have talked about product market fit and how do you measure? Actually, it's strange. I was sitting here in Silicon Valley for well over a decade, I landed in Sao Paulo when I first joined Newbank. And the small product team at the time is telling me about this thing called Sean Ellis score. And we recently had Sean visit us in Sao Paulo and talk to all of the product managers and designers. But we are amongst the most fanatical followers of his methodology anywhere in the world. We rarely scale a project, a product we've launched, until we know the Sean Ellis score and we know that it's hit a threshold that we find really compelling.

**Lenny Rachitsky** (00:15:22):
Can you describe the actual score and the approach?

**Jag Duggal** (00:15:24):
Yeah, the Sean Ellis score is a really simple methodology used by lots and lots of companies that a gentleman named Sean Ellis popularized well over a decade ago. Which basically asks your customers at each stage, and at each stage you have a small number of customers, then a larger group, and growing over time. But at each stage you ask them, how disappointed would you be if this product went away? And what Sean has said is that if at least 40% of your customers are not very disappointed, not just a little disappointed, but very disappointed, he has essentially a three point scale. Not disappointed, somewhat disappointed, very disappointed.

**Jag Duggal** (00:16:09):
If at least 40% are not very disappointed, you haven't reached product market fit. Now we've had to do some things in NewBank, Brazilians are a culturally happier group than the global average. So for us, our threshold isn't 40%, we've generally moved it up to 50%. I don't believe we have product market fit unless 50% of Brazilians are telling us they would be very disappointed, because Brazilians are inherently polite. And more polite and more optimistic than average, so we make our own little tweaks and adjustments.

**Jag Duggal** (00:16:41):
But we find that to be very helpful. As a company, this extends beyond product, we are addicted to our NPS score. And we reach for world beating net promoter scores as a company, and product vertical by product vertical as well. And we are maniacal about tracking how we do. And again, we compensate for some cultural biases, and we make sure that we hold ourselves to a high bar. But there have been, for example, in Mexico, we've recorded an NPS when we launched the first couple of years of 94-95.

**Lenny Rachitsky** (00:17:22):
That's absurd. I've never heard of that.

**Jag Duggal** (00:17:24):
Yeah. Which is way better than we got in Brazil, but our NPS scores skew in the 70s, 80s, and occasionally 90s. And when they dip down even one or two points, that's a reason for alarm. And we try to figure out why and we try to make sure that we make the iterations. So those are the things we build in. Those are the things we build in.

**Lenny Rachitsky** (00:17:45):
I'm glad you got into this, I was going to get into how you measure this stuff. So what it sounds like is the Sean Ellis survey is used as you iterate and launch towards launch. And then NPS is maybe post-launch to see how people like the product.

**Jag Duggal** (00:18:01):
NPS is post-launch. We also look at metrics like churn to make sure that we're not building a leaky bucket, and that's part of this viral customer acquisition loop that we've built. We want to make sure we're building products that are great enough that our customers will tell their friends, and we don't have to invest as much in marketing to drive our growth. And that only works if the customers you get you retain. I have built earlier in my career products that have leaky buckets, and that's a very frustrating treadmill to be on. So I am personally maniacal about making sure that the bucket doesn't have a hole in the bottom.

**Lenny Rachitsky** (00:18:42):
So in this Sean Ellis piece, which is really interesting because I think it's something a lot of people can adopt if they're trying to build products people love, and also that succeed. Is this a goal for every project? And I don't know the strategy, or the one pager. Or is it just implied, "Okay, we're not going to move past this gate if 50%, less than 50% of people are not very disappointed." Is that how it's operationalized?

**Jag Duggal** (00:19:04):
Yeah, we basically operationalize it. We don't have it as a hard and fast rule that is in black and white, but essentially that's the question people know they're going to get in any product review that's a post-launch, post data product review is what's the Sean Ellis score? How do you know that customers love it? Not just like it, but love it to the degree that they're going to tell their friends about it. That's pretty baked in culturally at this point.

**Lenny Rachitsky** (00:19:29):
This is an incredible insight, and I think it explains a lot of the success you guys have had. Because that's a very high bar. Many people run the survey, and getting to past 20% is very hard. You have to be very disappointed if there's a new product they've never used goes away, that's a high bar. Most people are like, "Ah, whatever. I don't need this thing." And you're saying you look for 50% of people feeling very disappointed if this new thing they've never used before goes away.

**Jag Duggal** (00:19:58):
Yeah, that's right. There are several on the newer side of products that we're launching now we're at borderline 50, and my push to the team is what are the three, four, five things you need to build to really get decisively beyond 50? And what are the segments or cohorts where it is above 50, and what is that telling us versus the cohorts where it's lower than that? So we put a lot of analytical effort, and a lot of depth of thinking. We were in a product review several years ago, and our lead designer, whose ex Google and ex-Facebook, we were in a review together and the team was saying, "We think this is good enough for launch."

**Jag Duggal** (00:20:44):
And he used the phrase, which both Chris and Kara, one of our co-founders and I have now adopted, which is, "Good enough, isn't good enough. Is it great enough?" Is it great enough? Because that's the bar, particularly for some of our ten-pole products, but we try to apply it largely across the board. A lot of companies, not just in Brazil or Latam, but everywhere, spend a ton of money on marketing. Their VC budgets, VC funding basically goes to Google and Facebook. And I've spent a lot of my career taking that money on board for Google and Facebook. But it is a much better scenario if that's a small portion of what you're doing, and the main portion of what you're doing is actually investing in making the product great that you don't have to do that.

**Lenny Rachitsky** (00:21:27):
Is there an example of a project that comes to mind that was below that bar and then you pushed it above where you're like, "Here's the thing we were missing."?

**Jag Duggal** (00:21:35):
Yeah, I'll give you one that we're wrestling with right now. We have a product called Assistente de Pagamentos, payments assistant. It's right now only launched in Brazil, we haven't yet launched it in Mexico and Colombia. Paying bills in Brazil is quite complex. There are four different ways, four different payment rails that different payments use. From the mobile payment system that has exploded in Brazil the last three years called PIX, that's become fairly world famous in the FinTech world, to more standard and some more archaic rails as well.

**Jag Duggal** (00:22:16):
So if you're a customer, you've got to keep track of your bills like we all do. You've got to keep track of which rail, you got to collect your bills, you got to make sure that you pay them. And some of the rails actually aren't that reliable. So you've paid it, it doesn't go through. And the consequences for not paying a bill is getting reported to the credit bureau and becoming what is called negativado, having a negative mark on your credit report. And that can be a big deal for the average customer. And so this was a real deep pain point.

**Jag Duggal** (00:22:49):
And as we launched the product in a Reid Hoffman style, if you are not embarrassed by V1 you've waited too long. As we've done that last year, we found that a very interesting pattern. We had a decent Sean Ellis score, borderline 40%, I forget the exact number, but basically in that ballpark. But we found that there was a small cohort of a customer base who had more than four plus commitments registered. And even more so within that small cohort an even smaller bullseye cohort who had more than four commitments on at least two of the four rails. And their Sean Ellis score hit 70% and we're like, "Okay, the key is we need to across these rails, not have them one by one. And we need to make it easy for customers to onboard multiple bills across multiple rails." And then the automation takes over and people see the real, benefit because there are ways ...

**Jag Duggal** (00:24:00):
Patient takes over and people see the real benefit because there are ways. On the surface if you said to the average person anywhere, any sort of developed country, we're going to have a bill auto-pay, that's on the face of it not necessarily exciting, but if you build it right, it is actually a fundamentally different experience rather than incrementally better experience. And that's what we've done. We've systematically made dozens of iterations on the product to allow customers to in one go do multiple bills across multiple rails and make that tiny bullseye cohort that we had, segment that we had a larger and larger proportion of the customers who are trying, and by the way, that's a journey still underway. We have a whole road map for the next year of lots of small quality adjustments that we're going to make and we're seeing some great feedback. We're now over 10 million monthly actives on that product when we were struggling in the hundreds of thousands about 15 months ago.

**Lenny Rachitsky** (00:25:08):
That is a really interesting insight there of just using the score and survey to narrow in on who actually loves this the most and see if there's something there. Is that something that you generally do or is that just like, oh wow that came up in this exam?

**Jag Duggal** (00:25:20):
We do that fairly frequently. When we did our, we have a high income rewards credit card. It's called Ultravioleta. We went through a similar process where at launch there were many different customer segments, but there was one that really loved the product and it was not surprising. There were the ones where the customer spent enough each month that they got the fee waiver and then all of the other benefits that we had built in really resonated. Whereas if you're paying the monthly fee, those other benefits were not quite as exciting or didn't quite compensate. So we've done this several times and we've started recently combining it with trying to get very agile in getting that feedback from that bullseye segment. So we've told many of our product managers and designers over the last two years, don't worry about serving 1000 customers, taking three weeks, serving 1000 customers, getting a bunch of cross tabs. Even at the end of which it's very hard to read the real fine grain customer feedback.

**Jag Duggal** (00:26:27):
So we just tell them, call 10 of them. Pick up the phone yourself. Don't ask a researcher to come up with a plan to go do the research to then summarize it, to then bring it to you, which has so many degrees of distance built in. You pick up the phone, call 10 of them and nine times out of 10, by the time you've made your fifth call, you could predict what's customer six, seven, eight, nine and 10 are going to tell you. And then you know what it is that is the gap or what it is that is truly resonating that you want to double down on. So we're constantly trying to iterate in small ways the ways to get really that voice of the customer straight lined in to the people who are building the product.

**Lenny Rachitsky** (00:27:11):
I love this advice. I imagine as a PM that is extremely scary to go call a customer. Most people don't do that. By the way, do you actually operationally, is it actually a call or do you recommend the email? What do you actually recommend they do because,-

**Jag Duggal** (00:27:23):
We literally pick up the phone.

**Lenny Rachitsky** (00:27:26):
Okay.

**Jag Duggal** (00:27:26):
Pick up the phone.

**Lenny Rachitsky** (00:27:27):
Okay. Great.

**Jag Duggal** (00:27:28):
Because you can get tone of voice. Brazilians and Mexicans are incredibly expressive. There is a degree of real fine grain sense that the statistics never tell you.

**Lenny Rachitsky** (00:27:43):
Yeah.

**Jag Duggal** (00:27:44):
And it's very aligned with design thinking and there's a lot of literature around how this works well, and I wouldn't say we're doing it especially to the best practice scientific. We're just like, just make the call. Make it as simple, as unobtrusive with as little overhead as possible to make sure the voice of the customer is coming directly into the teams that are building.

**Lenny Rachitsky** (00:28:09):
Jeff Bezos had this quote on his Lex Friedman podcast where if you have data and you have an anecdote, usually the anecdote is right.

**Jag Duggal** (00:28:17):
I love that. That sounds exactly right to me.

**Lenny Rachitsky** (00:28:20):
To make it even more tactical for the surveys you run, is there any tool you find? How do you actually collect this data? Is there anything interesting that you could share of just how to operationalize collecting this data?

**Jag Duggal** (00:28:30):
We've used a series of tools, many of the main survey vendor tools, we still use many of them, but we don't standardize or find one that dramatically changes our life beyond the mindset of we are going to make sure that this product has product market fit before we scale it. One of the things I've seen throughout my career as a product manager and CPO, we live with it today at Nubank every month is the pressure on the line product manager to scale the product that the entire company, the entire executive team, the entire management chain has been counting on. We're launching this thing [foreign language 00:29:16]. We all wanted to scale. We all are very excited about it. We had the product review six months ago and we thought this is going to be amazing. And the pressure on that product manager to scale a product is immense and the job of the product manager in many instances is to say no.

**Jag Duggal** (00:29:35):
And one of the things I try to say frequently within the walls of Nubank is we are not going to take a small problem and scale it because if we do that, we end up with a big mess. Something isn't working at small scale, no problem, especially if we have a strong hypothesis and a lot of ways of getting good customer feedback. We iterate, we iterate, we get it right and then once we get it right, scaling if you do it right in many cases takes care of itself because the customer is now excitedly telling their friends.

**Jag Duggal** (00:30:08):
Whereas you can pour a lot of money and a lot of effort and when you have a big app like Nubank or places like Google and Facebook, you can make any product look great for months if not years because you have such a large customer base that you can always get them to try it with all sorts of basic techniques, but you're bouncing a dead cat. And then you've got a real big mess to untangle when the thing is much, much larger. So we try to be pretty disciplined about that. And that's a lot of what the Sean Ellis does is it bring science to some of that art of making that judgment call.

**Lenny Rachitsky** (00:30:42):
This point you made about it's the PMs job to push back and stop bad things from happening I think is such an important one. A lot of PMs are just told here, build this thing and they kind of know this is not going to work, this is a bad idea, but either they don't think they should be pushing back or they are not good at it. From the PMs you've worked with that are good at convincing and pushing back, like we should not do this yet, do you have any tactics or ways of communicating that you found effective for pushing back to, like you said, all this pressure that's coming down on them?

**Jag Duggal** (00:31:14):
One of the things I've learned relatively later in my career, I wish I'd learned it decade earlier, decades earlier even is how important culture is. And we talked about the five cultural tenets, but this idea of we are owners, not renters. You're an owner of that product as the product manager or the lead engineer or the lead designer or in fact anyone on the team. If you really don't think it's going to work, don't tell me what I want to hear. It's incumbent on you, it's expected of you as an owner to tell me the bad news and tell it to me early, even when it's convenient, even when there's a promotion at stake, these dynamics get very real very quickly then look, I don't think it's going to work and here's why, or it's not working and here's why, or we should kill it and here's why.

**Jag Duggal** (00:32:05):
The second thing I would say is senior leaders at companies that have gone, especially startups that have scaled well, you usually have people who have been in that boat who have seen products that weren't working who have killed them or who have pivoted them pretty dramatically. And there's a lot of respect for someone who has a real clarity of thought and brings a high bar and is not simply going with the flow. So I think that's the main thing, is bringing that ownership mindset. And the second is bringing clarity and bringing data and understanding that most senior executives in whichever company are strong-willed and bring strong opinions. That's part of the job description. That's okay. It is your job whether product or design or engineering or whatever function as a leader to if you think you are practicing for one of those senior jobs, it's sort of let's say a mid-level, it doesn't come miraculously when you get a C-suite title, it's something that's going to be practiced. And it's something that is expected and I think that's not just a Nubank thing.

**Jag Duggal** (00:33:27):
Certain cultures promote it better than others, but I think it's pretty universally important. And so I would just encourage people to try it, understand the trade-offs, understand the challenge, articulate the other side, but if you genuinely believe it's not yet ready to scale your products, at the end of the day, the big mess is a thing you're still going to owe and we're all going to forget that we told you to scale the thing. We're all going to still blame you at the end of the day. So you might as well bite the bullet earlier, pivot it when it's easier to do and it'll work out better in the end.

**Lenny Rachitsky** (00:34:10):
I want to come back to one more thread and then I'm going to go in a different direction. You talked a bit about talking to customers, finding innovative ideas, not just listening to what they're telling you. There's this whole skill of user research and interviewing customers and finding the pain point, figuring out what to build. Do you have any just, I don't know, tips or tactics or lessons you've learned about just how to do this well, how to uncover the pain point and then figure out what to actually build when you're interviewing customers?

**Jag Duggal** (00:34:40):
I'll share a couple of thoughts, but I will tell you as a preface that it is arguably the area right now that I still wrestle with. I still think I, and we are not doing it as well. I've never seen it done quite as consistently great as it could be, and I think it's an area for where design thinking and a lot of the design function can help us, but it's very, very, it's one of the areas of greatest inconsistency that I see in product development. Having said that, a couple of things that I see that we sometimes do really well at Nubank and other times we miss on one dimension or the other. First off, per your Jeff Bezos anecdote, the anecdote usually trumps the data. And there are many times when I see teams that are doing very sophisticated analysis and they've sort of forgotten what the question is or what the conclusion they can draw from it truly is. So never lose sight of the value of the customer's words and the anecdote. That's one.

**Jag Duggal** (00:35:56):
The second one that I believe very, very strongly in is I think teams often skip the step of clearly, very, very clearly working very hard to be super crisp in articulating their hypothesis. If you don't have a hypothesis, you're going to spend a lot of time researching, you're going to get a lot of data back, qualitative, anecdotal or quantitative and you're not going to know what to make of it because it's not either validating or invalidating your hypothesis because there isn't a hypothesis. So it just becomes an interesting conversation.

**Jag Duggal** (00:36:34):
The third one is, I've got a hypothesis, I've got it really crisp and now the pitfall is I've fallen in love with my hypothesis. I'm a lawyer for my hypothesis. I'm not a judge of whether the hypothesis is right or not right. So I think that's another common pitfall. I've fallen into that one too many times to count. And then the last thing I would highlight is even when you have a strong hypothesis and you're actually in the mode of doing the research, observe more than ask questions if you can, ask indirect questions more than direct questions. Would you love this product? Right. Excited product manager has been working for two months on a design. You're searching for the problem more than the solution. You're looking indirectly and asking from multiple directions the same question rather than trying to find a yes, they love the thing you've been thinking about and swaying on for a long time. And if you can, observing is better than asking, although that's a tricky skill. Those are the things that I look for.

**Lenny Rachitsky** (00:37:53):
With the hypothesis point, just to make sure people understand, your suggestion there is before you start talking to customers, doing your easy researches as a PM or just anyone on the team, essentially have a perspective on what you think is going to be true. Is that how you think about it?

**Jag Duggal** (00:38:07):
Exactly. Have a point of view on what you think the customer will say that will lead them to be really excited about your product. That way you will get very clearly eh or yes, bang the table excitement and you will know when you're getting that reaction.

**Lenny Rachitsky** (00:38:26):
Is there an example of that just to make it even more concrete? Because I imagine many PMs are kind of feeling like they have to be unbiased and just like, let's see. Let's see if this is something we should do and I don't want to bias anyone against it. Is there a quick example of a hypothesis?

**Jag Duggal** (00:38:42):
One of the famous examples that's somewhat hypothesis related and somewhat observation related is the invention of the Swiffer from Procter & Gamble. Right. The people hate mopping and they will do it and they won't even realize how painful an experience it is because they've just developed the work arounds and they just deal with the burden. But if you observe very granularly what the problems are, then you can see where the problems are. And so if you bring a strong hypothesis to, that this is a real problem, even if customers aren't telling you it's a problem because they've just sort of gotten used to it. So that's one.

**Jag Duggal** (00:39:23):
We have a hypothesis at Nubank. I'll give you one that's live. We have a hypothesis at Nubank that the joint bank account, I was doing some research on this just last week. The joint bank account was invented in the early, it's actually hard to say, but it was invented, depending on what source you believe, in the late 19th or early 20th century. And it was basically invented coincident with the social movement, sort of the women's liberation social movements before women in the US were legally allowed to vote, where women were not allowed to open a bank account without their husbands prior approval. That is the era from which the joint bank account that we still live with today came from. It's 120 to 150 years old.

**Jag Duggal** (00:40:17):
I don't think it's surprising. Our hypothesis is it's not surprising that that artifact, that that product is not made for the modern customer, that it is easier for me to share a Spotify playlist with my wife or my daughter than it is for me to share a savings goal just mechanically. So we're going into a product development cycle that says there is a new social banking arrangement that is not about tweeting and it's not about social very broadly defined. It is about our financial lives are inherently social. And it is very hard to share with my spouse, with my kids, with my parents who might be helping me pay for my child's education as an example, use case. It's a very strong hypothesis.

**Jag Duggal** (00:41:18):
But when you go into the research with the customer, you don't try to sell them. You try to see if they're experiencing pain points. And it becomes very hard when you're in and they say even something a little bit in the direction of what you hope they would say to not be like, jump in with a lot of excitement and then get into more of a sell mode with them and almost try to sell against your idea, push back against your idea, make the customer sell you in the interaction. And you play the devil's advocate. So those are the kinds of things we search for as we build products.

**Lenny Rachitsky** (00:42:01):
**Jag Duggal** (00:43:35):
I will readily admit, I bring a bias. I spent almost a decade at the beginning of my career right after college working in a strategy consulting firm. Right. So I bring a bias, which is to some degree, certainly for the length of time I did it, an unusual background for a product manager. When I first showed up at Google, it took me a couple of years to realize my job was not to produce a nice PowerPoint, it was to ship code. And I was doing a poor job of that for at least the first 12 to 18 months. But I think there is almost a countervailing dogma in Silicon Valley or in tech companies more generally, that strategy is easy and execution is everything. And I think that's probably because there are a small number of companies that get the strategy right, but the legendary companies that we all know about not only got the strategy right, but then executed it really crisply. What we don't hear about are the companies that got the strategy wrong, never got even into the conversation and all of their great execution was multiplied by zero.

**Jag Duggal** (00:44:46):
Great execution multiplied by a poor strategy is a waste of everyone's time. And because the strategy isn't clear, you can waste a lot of time executing years and years against something that was destined never to work. One of my favorite quotes from the Valley, from Kevin Systrom in the early days of Instagram, I heard him say it at a conference, this is pre the Facebook acquisition. And he was like, I don't know how old. He had just left Google. He was probably, I don't know, 20 some years old. He said, "We may not be right, but at least we are clear." And what I love about that is even if your strategy isn't right, and it will never be exactly right because no plan ever is, you will have a clearer read on if you are going off course because you have a very clear idea of what was supposed to be happening.

**Jag Duggal** (00:45:41):
And so I think being very clear in your strategy is really important. You've had some great guests on the podcast. Richard Rumelt is one of my absolute favorites. He's written a couple of books, one called Good Strategy Bad Strategy, another more recent one called The Crux, where he does a great service to the world by even more than describing what strategy is, focusing at the beginning about what strategy isn't. Strategy isn't an ambitious goal, it's not an aspiration, it's not a set of financial outcomes. It is a coherent plan for how you going to apply your strengths in a leveraged way against a core important problem. And that's a very, very rough paraphrase of the way he thinks about the world. And I find that we often confuse strategy with a vision, a broad idea, a very, very broad, vague aspiration. Nubank strategy isn't we want to be the world's largest neo bank. We do, but that's not an interesting way to dimensionalize the problem.

**Jag Duggal** (00:46:55):
In 2014, we had millennial, middle-class, urban Brazilians who hated paying credit card fees and were not able to get credit in the first place because they were too young and without a credit history. And we could offer them not just a lower-priced credit card, but a no-fee credit card, which was an emotional thing. That fee got people angry and we could do that because we were branchless and digital. Now that is a coherent description of a very specific problem for a very specific set of customers with a very specific solution based on a very specific advantage. By the way, all of this predated my, this has got nothing to do with me. I wasn't there. But that's what I mean. Strategy is very specific, it's very detailed, it's very locked in. And working backwards from that I think is really, really important. And if you get that strategy right, it informs the minimal set of activities you need to do to get...

**Jag Duggal** (00:48:00):
... minimal set of activities you need to do to get traction and to win, whereas if you don't have that degree of coherence, you're trying to serve all the customers. Maybe we should go to Mexico prematurely. All sorts of things happen and your execution gets very diffuse, and you can't even tell why you're not getting traction across the company, whereas strategy allows focus and it allows a much more rapid read of whether your focused bets, your concentrated bets, are actually working.

**Jag Duggal** (00:48:36):
You've had some investors on your podcast over the years, and they will tell you that concentration is what builds wealth, diversification is what preserves wealth. And you're a startup. You're not trying to preserve anything. You're trying to build something. It requires concentrated bets, not hedging. And because you're concentrating bets, those bets are high stakes. You need to be very, very clear on what bets you're making and why you think it's going to succeed.

**Lenny Rachitsky** (00:49:05):
When you work with PMs on your team in the past that are trying to get better at this muscle and following this advice that you're sharing of strategy, what do you find most helps them build this muscle? Is it just doing it over and over and over and over? Is it reading good strategy, bad strategy, practicing it? What do you find is most helpful in helping you build this muscle?

**Jag Duggal** (00:49:25):
One is taking it seriously. It's a little bit like what we talked about with Nubank's culture. First, you got to want the customer to love you fanatically as something that you value. After that, I think frameworks really help, whether it's Good Strategy, Bad Strategy, whether it's Play to Win from a relatively recent guest of yours, Christopher Lochhead, who I really admire, whether it's Where to Play and How to Win from Roger Martin, which is a phenomenal book about-

**Lenny Rachitsky** (00:49:53):
He's coming on the podcast in a few weeks.

**Jag Duggal** (00:49:55):
Is he? He's fantastic. And having those frameworks, all of which in many ways, if you synthesize them, are getting at the same thing around focus, around a clear understanding of the customer, around not trying to be in the words that we literally have on Nubank coffee mugs, "We're not trying to be incrementally better. We are trying to be fundamentally different." These are all very similar ideas expressed in slightly different ways.

**Jag Duggal** (00:50:26):
Once you understand the frameworks and you distill them, then it's about practicing them and practicing them is scary. Hedging is appealing. Hedging means you don't have to make choices. Hedging sounds smart. Concentrating all your bets is the thing that desperate people do, and startups are desperate entities because they're burning cash in almost every instance. But successful startups, the ones that become profitable... I'm very wary, given the places I've worked, of the successful company with one or two monster products, and Nubank is now in that fortunate position, that starts to get conservative, that starts to forget that focus, concentration, customer obsession are every bit as important, that even though the company won't go bankrupt if products three, four, five and six don't succeed because products one and two are monster cashflow drivers, that's a slow path to death.

**Jag Duggal** (00:51:37):
And so practicing that discipline and having, and I use this word very intentionally, having the courage to make those hard choices and to concentrate the bets, which goes against, by the way, a lot of what's taught in business school and a lot of MBAs is really important, and then it's a matter of you get better the more you do it and you get more practiced and more grooved and more principled in how you get to a methodology the more you do it.

**Lenny Rachitsky** (00:52:16):
Did you say the mugs at Nubank say, "Be fundamentally different"?

**Jag Duggal** (00:52:22):
The product team, a little over a year ago we put together some schwag, which was fundamentally ... I have a mantra within the company since roughly the time I joined, which is, "We're in the business of being fundamentally different, not incrementally better." Again, it goes back to only fundamentally different, gets customers to tell their friends. Incrementally better.

**Jag Duggal** (00:52:46):
And by the way, there are certain features ... I don't want to overstate the case ... There are certain features where you're in the incrementally better business. Not every single thing of the hundred things you launch in a year can be fundamentally different, but we're searching for those anchors that are going to be fundamentally different all the time around which you build some sustaining innovation as well, but we are in the fundamentally different business, not the incrementally better business.

**Lenny Rachitsky** (00:53:10):
I love that, and that's a great segue to where I wanted to go, which is I know you're a big fan of category design. You mentioned Christopher Lochhead, former guest. This is actually one of the more common debates on this podcast of do people believe in we should be creating our own category or should we not? Is that a terrible idea? Is it a good idea? It feels like you're in the camp of this is actually very good and important. I'd love to hear your perspective and also just how Nubank did this.

**Jag Duggal** (00:53:36):
You know Lenny, literally earlier in this week, I was listening to your podcast with I believe it was Todd Jackson, ex Gmail product leader and now venture capitalist, and you guys had a very interesting discussion about it, and I think he took largely the other side of the argument that you go in a category where customers are already spending money. And it's hard to argue with that fairly robust logic.

**Jag Duggal** (00:54:03):
I will tell you how I think about it. It forced me to think about where are the nuances in how I believe. I think overall, particularly at a company level, successful companies are typically in the fundamentally different business. They're in the new category business. Google was in the new category business. Netflix, Airbnb, you can go down the long list, Salesforce, et cetera, et cetera. That's really important.

**Jag Duggal** (00:54:31):
In Nubank's case, we were the first, and actually, it's not that important that we were the first, but we were very intentionally trying to build a branchless bank based on the rise of the smartphone in Brazil and Latin America at that time, the sort of rapid inflection, and a branchless bank that could bring, as David likes to say, put a bank branch in your pocket, where at the time access was the big problem, and that you could do that on a digital cost structure that allowed you to essentially disruptively price across the board was the thing that led to the massive wave of success, multiplied by, unlike almost everywhere else in the world, including in the US where the answer was, "We're going to do the bank account first." Nubank's answer was, "No, we're going to do credit first and credit is 10 times harder and 100 times more risky," because you get credit wrong as a young company that doesn't know how to do it yet, you've blown everything up. The money's never coming back. Those two, again, concentrated bets, defining a new category, were I think the key to our success.

**Jag Duggal** (00:55:56):
Now, there are times when you're trying to go into an adjacent market. We've recently gone into a market called Consignado in Brazil, which is secured lending for government employees. Very stable job, easier to underwrite against their salary at a much lower interest rate. That's a market that's existed for a couple of decades in Brazil, and our job was to go in there, and we believe we built something that is fundamentally different. It wasn't digital. It went through middlemen. We built it D to C, and we've been able to undercut the pricing pretty dramatically.

**Jag Duggal** (00:56:38):
So even within an established category, we've tried to build a fundamentally different experience, but there are also times when, look, it's not quite me too, but the differentiation's a bit more incremental. But at the company level, I think it's absolutely imperative to be designing your own category so you can then dominate it and defining your own category. And even when you're entering a place where customers are spending money, I think going in with a mindset that says, "This is going to be a bit better," and I think Todd would probably agree with this, given the way he described it, you should try to be reinventing that category, even if you're not inventing that category.

**Lenny Rachitsky** (00:57:19):
Amazing. I like this battle we're forming here of people on two sides of this debate, and I'm excited to see where it goes over time. It feels like the do not create a category side is winning so far in terms of volume, but there's a lot of passion from this other side.

**Jag Duggal** (00:57:35):
I'm happy to be on the contrarian side.

**Lenny Rachitsky** (00:57:37):
Okay, there's a few more things I want to touch on before we wrap up. It feels like Nubank is one of the historically most successful companies launching new business lines. I think you guys are maybe like 10 years old, and how many products slash business lines are there at this point?

**Jag Duggal** (00:57:53):
It depends on how you categorize it, but I would say we have roughly a dozen to 20 core product lines.

**Lenny Rachitsky** (00:58:01):
Okay, that's wild.

**Jag Duggal** (00:58:05):
Our story started as, we were a Brazilian credit card monoliner in an app and all the rest of it. Around the time, slightly before, but around the time I joined the phase two of the company, the mandate of what we were trying to do, which has really been the story of the last five years, was we were going to go from a Brazilian credit card company to a full solution Latin American bank, which meant we launched five new products. We launched a bank account, which allowed us to go from being a secondary banking relationship to increasingly a primary banking relationship. About half of our 90 plus million customers, we are the primary relationship. We built a lending product, we built an investments product, we built an insurance product, we built a series of small business products.

**Jag Duggal** (00:58:53):
While we were doing that, we were also making the leap to prove, despite a lot of skepticism, that our business model was exportable and not a unique Brazilian phenomenon. So we launched into Mexico and launched into Colombia and now we are starting to take the full suite of products and go beyond credit card in Mexico and Colombia as well.

**Jag Duggal** (00:59:16):
So depending on how you look at that matrix, we are a dozen plus products and we're working on the phase three of our products, which is moving beyond financial services. We've launched an e-commerce marketplace within our app, which is perhaps a bit counterintuitive if you're coming from the US. And we're also envisioning a world where banking is, again, to use the phrase that we love at Nubank, fundamentally different than it has been in the last 100 years. And we believe that social technology, self-driving and AI technologies can build a just completely different experience, where we're not building a bank branch and putting it in your pocket. We're building a personal banker, which today, I don't know, 10 million people around the world have access to and you got to have a lot of money to do it.

**Jag Duggal** (01:00:13):
We believe that job can be democratized ultimately to all eight billion people on the planet, and we believe it can be done better for those eight billion even than the 10 million are getting today. But that's a lot of work, and that's, to use Christopher Lochhead and his co-author's language, that's the new category that we are trying to define over on a global basis.

**Lenny Rachitsky** (01:00:41):
It's going to be a tiny little banker to fit in your pocket, tiny little person.

**Jag Duggal** (01:00:45):
That's it.

**Lenny Rachitsky** (01:00:46):
I want to follow on this thread, but before we get there, so in terms of adding new product lines and business units, watching how Nubank has done this, is there something you've learned about just how to do this well? I'm imagining there's a spreadsheet where, "Here's all the things we're going to do in the future. Here's how we're thinking about all the factors of all the new businesses we can launch." Is there anything there you've seen of just like, wow, that's a really smart way of thinking about the sequencing slash where to expand next that you think other folks can learn from?

**Jag Duggal** (01:01:17):
I wish I could tell you that there was this predestined master plan that was so scientific. The reality is smart people around the table with a culture of robust debate and real candor about the pros and cons is how we went about it, and a constant re-examination of how things are going, what's going well, what's not going well, what's taking off, what's not yet taking off, what are the principles by which we're making these decisions has been important.

**Jag Duggal** (01:01:51):
Some of these things are obvious. If you're running a bank, a bank account is probably a good product at some stage, but a lot of it in terms of sequencing and when we invest where, some of it's obvious, what's the TAM and where's the customer paying, but a lot of it is art and a lot of that resolution of the art and the debate. It comes from a fairly robust debate, so I'm avoiding your question. I have no good answer.

**Lenny Rachitsky** (01:02:24):
Just a lot of complicated decision making, but I think what's interesting is, coming back to your very early lesson, is using the gate of is this hitting this 50% of people be very disappointed before launching feels like a key.

**Jag Duggal** (01:02:36):
Yeah. That's the one thing is we try not to scale big problems, and so we try to solve our problems when things are small. Our ultra violetta are higher income, rewards-based credit card. We launched, it happened to be, I think it was July 4th, 2021 was the launch date, so it's easy for me to remember. We started scaling it two to two and a half years later.

**Jag Duggal** (01:03:04):
In the meantime, we were in the lab figuring out where's the product market fit? Why is it not resonating? Oh, it's resonating with these guys. What do they particularly love it? Let's iterate there. And now we're at a point in the last six to nine months where we can start scaling aggressively, learning some of the credit dynamics that are different and reinventing some of those methodologies, and there's a second phase of scaling that will come. But yeah, one form of distraction we don't get into is fixing massive problems that we've overscaled before they were ready. That's a bit of an overstatement, but nothing's quite that clean, but generally true.

**Lenny Rachitsky** (01:03:46):
Coming back to your thoughts on the future of FinTech and in LATAM especially, you talked about how the vision is essentially a banker in everyone's pocket. Is there anything more there? Just where do you think all this goes in the future in terms of FinTech banking for people in LATAM and then globally?

**Jag Duggal** (01:04:05):
Yeah, there are a handful of principles, call them hypotheses, that we believe, and there are, I should be super clear, unproven hypotheses that will take years for us to prove out, and I'm sure there will be pivots along the way as we learn that things aren't quite the way we would've hoped at the beginning. But first off, the idea that banking should be holistic, that we need to provide a full solution across what we call the five or six financial seasons of someone's life, right? We spend, we save, we invest, we borrow, we protect, et cetera. And that's a lot of what we've been working on for the last handful of years.

**Jag Duggal** (01:04:52):
So one is we want to be a full solution bank. Second, something we have started, we have had some real success in on the business side, we've made some mistakes on the technical side that we are iterating through is, we are trying to build, and some might argue I'm overstating a bit, but just to be clear, we are trying to build what we believe is the first global bank on a single code base.

**Jag Duggal** (01:05:22):
I come from a world places like Google and Facebook, Google, my first product management experience. I was not allowed to launch unless my product was ready for 40 countries and 40 languages. I believe language number 40 was Finnish, so we were always making sure the thing worked in Finnish. And there are good reasons why ADVA, global online advertising, worked that way. It was a great principle by Google.

**Jag Duggal** (01:05:50):
When you get into FinTech and into banking where the regulations are very local, where the stakes are much higher, that you serve the right 300 by 250 ad, there is a lot of pushback on that kind of, "We're just going to scale this everywhere," sort of mindset. And so how do you marry those two things? There are global banks like Citi or Santander, a lot of them have been built up through acquisition. A lot of them are on distinct code bases and technology infrastructures. We believe there's a lot of leverage if you can build a global bank on a single code base. That's another principle that we are trying to make real.

**Jag Duggal** (01:06:34):
The third is that social mechanics around your financial life, not in general, not another WhatsApp, not another Twitter, and self-driving automation. Why do I have to remember to pay this bill every month? Why do I have to remember to save for my child's university education every month? Why can't I keep my life goals really well-organized? Which is almost impossible to do. My wife and I open up different bank accounts at different banks just to try to do that job, which is, talk about customer workarounds. How do we make the life life cycle of managing your financial life exponentially easier, leveraging these technologies and then using AI, which is an overhyped term right now, but AI to turbo-boost these tasks?

**Jag Duggal** (01:07:40):
We have a phrase we've started using at Nubank, which I really like. David first introduced it. Customers everywhere around the world live harshly unoptimized financial lives. I think that's true regardless of income level, regardless of geography, regardless of sort of life stage of where people are at. If you have a young child, it is very hard to keep track of all the things you should be doing. You should be opening a savings account of a specific kind that stacks advantage in this way.

**Jag Duggal** (01:08:16):
These are problems that should be solved and should be solved soon and can be automated and where insights can be brought to bear for customers who are not super sophisticated in their level of financial education, which by the way is almost all of us. Some of the people who think they're the most sophisticated are the ones who burn the most money in casinos that they call the stock market.

**Jag Duggal** (01:08:42):
And so these are some of the principles around which we are the next phase. What if there were someone right next to you who could tell you what the smart move was to make today at this life stage? You've just had a child, you've just gotten married, you've just bought a house, you just want to remodel, whatever it might be. We think the technology is there or thereabouts to be able to do that. Why not have the company that reinvents banking come out of Sao Paulo, Mexico City, Bogota? Why does it have to come out of San Francisco, New York or London? We see no reason why it can't be us, so we're going to give it a whirl.

**Lenny Rachitsky** (01:09:23):
Amazing. I love all of this. I can't wait for this to be real. You mentioned AI, so I just have a couple more questions. You mentioned AI. We have a recurring segment on this podcast called AI Corner, so let's walk over to AI Corner.

**Jag Duggal** (01:09:35):
All right.

**Lenny Rachitsky** (01:09:36):
Usually I ask how you use AI in your day-to-day and your team, just like what are the tools and things you find useful to help your team operate with AI and tooling, but I'm also curious just how you're integrating AI into the product. You touched on this a little bit, but just how AI is going to supercharge the stuff that you're building.

**Jag Duggal** (01:09:52):
We use some of the tools that everyone is using these days. Our ringfenced version of Chat GPT and some of the standard tools, we're using them in some of the obvious initial wave ways. How can we improve our customer experience? If you're fanatical about customers, you're fanatical about customer experience, and Nubank has always been that way. How can we make it even better while we're also making it more efficient? So we're doing all of those things as part of our coming up the learning curve in the last 18 or so months.

**Jag Duggal** (01:10:35):
And then we're starting to think about what are the ways in which we can build AI native products. And I will not pretend to you that we've cracked that code, but a former boss of mine spoke a while ago, Fidji Simo, who's now the CEO of Instacart, but she was talking about the evolution when she was the product lead for Facebook Ads back when the big migration from the desktop to mobile was happening, and she talked about we needed to become mobile native.

**Jag Duggal** (01:11:12):
And by analogy, companies today need to figure out what does AI native mean, not how do we append AI at the corners of the product, but how do we build it at the heart? What would you design if these tools existed from the start? I mean, Facebook's migration to mobile is a phenomenal example of that pivot. And they like to joke, and I wasn't there at Facebook at the time, but they liked to joke at Facebook, even seven, eight years later when I joined, about the company had IPO'd and needed to find a business model and Fidji was responsible for making that happen. And the core of it was bringing this mobile native mindset. So we are trying to think through what is an AI native mindset? In financial services, what would that look like? And that requires ...

**Jag Duggal** (01:12:00):
... services. What would that look like? And that requires analysis as much as analogy, and we are very much in the middle of that process and we don't know all of the answers. The metaphor of a what if everyone in the world, regardless of their income or wealth, had a private banker sat next to them that they could turn to whenever they needed to is a good metaphor. And so we are using that metaphor and seeing where it takes us.

**Lenny Rachitsky** (01:12:34):
Let's now move on to a different corner, failure corner. This is another recurring segment on the podcast. Is there a story you could share of a time in your career where you failed, where something went wrong, ideally really wrong, and how that impacted and helped you in your career? Kind of a lesson you learned from that experience?

**Jag Duggal** (01:12:55):
There's a pretty seminal story from my career that ultimately ended in failure and that I had to sort of rebuild from. I had done strategy consulting for just shy of 10 years. I decided I was going to go to grad school. I was going to pivot my career into public policy and politics. I was at the Kennedy School of Government at Harvard and a year into that a friend of mine had, the startup he was working at Get acquired by Google I this company was premised on the idea that you could bring AdWords/AdSense style advertising to the terrestrial radio market and one of Google's, perhaps the biggest diversification bet Google was working on at the time beyond search and display, which were up and running, was let's go disrupt TV, radio, and print. It was 2006.

**Jag Duggal** (01:13:59):
My friend convinced me to drop out of grad school, both the Kennedy school and business school. I had done a year of the Kennedy school. I was one credit short and in business school I had done a week of and move out here to California and join Google. First off, the premise of the hypothesis proved to be wrong or at least harder than we thought, and in the following way, terrestrial radio or for that matter, TV advertising, broadcast media advertising works very differently. It serves actually a different market. It serves brand advertising, top of funnel kinds of goals as opposed to the bottom funnel that Google really knew well.

**Lenny Rachitsky** (01:14:52):
Back then.

**Jag Duggal** (01:14:54):
So that was one piece. There were all sorts of technical methodologies like reach and frequency that are really important that we simply didn't know about. We were determined to run an auction. We have patents to our name to this day that were how do we bring auction methodologies to work in a broadcast medium? Some very interesting technology. At the end of the day, one of the things that you really needed was a surplus of inventory, ad inventory, which there actually isn't that much of relatively speaking compared to online. The other thing that is true is the people who control that inventory are not nearly as fragmented, so when you're negotiating with NBC or CBS or Clear Channel, they have much more leverage than in the online world of bloggers and small websites. The fragmentation wasn't there, the methodology was different, it was going to be a tougher slog. And in the meantime, Google made actually a very smart bet and this was a pivot on Google's part based on a lot of learnings from the failure on the one side and some of the success happening on the side of YouTube.

**Jag Duggal** (01:16:14):
In the meantime, Google had acquired YouTube and somewhere along the way, and this was over multiple years, Susan Wojcicki and the leadership team of Google and Google Ads in particular came to the conclusion that rather than Google chasing TV, let's have TV come to Google, I.e YouTube. And we've seen what's happened in the ensuing 15 years where cord cutting and all of the rest and now the online digital ad methodologies that Google is best in the world at can be applied in a much more straightforward way. But I was collateral. Me and some of the teams I was a part of, we were collateral damage in that evolution. There was a point where Google did a small layoff and it was largely concentrated in my group of this acquisition.

**Jag Duggal** (01:17:12):
Along the way, Google acquired YouTube, Google also acquired Double Click and Double Click served all of the brand advertising online. And a couple of years later... Well firstly at the time I was within weeks of being laid off, having dropped out of two grad schools and moved 3000 miles west. That felt really crappy. There's a great song from around that time, which is a mashup from Coldplay and Jay-Z. Lost. You should listen to the lyrics. Just because I'm losing doesn't mean I've lost is literally the first line and I would have that on repeat at that time within a couple of years, within a year, probably year and a half maybe that was around the time I was married. So it was a lot going on. It turns out that within a year, sort of post the Double Click deal, Google decided look with YouTube as an anchor asset and some other things and the Double Click acquisition, there was a technology now pretty well established 15 years later called Real-Time Bidding, and we were going to bring the search auction methodology across the entire web for all of display advertising and we were going to use that core underlying infra to be able to build not just a spot market, direct response advertising, but a futures market which could apply to brand advertising and we are going to use that disruptive vector, something fundamentally different, not just incrementally better, to essentially dislodge Yahoo from owning brand advertising online. And I ended up getting that mandate because I had learned a lot about how brand advertising worked, 12/18 months earlier. So that was a fairly spectacular failure.

**Jag Duggal** (01:19:06):
The acquisition, by the way, ended up in arbitration, big lawsuits, depositions, and it was messy from all sorts of angles. We all worked our way through that and then in the end we ended up building what is even still today, I believe Google's second largest business, which is the display advertising business. But that transition was messy, excruciatingly difficult from a strategy perspective as we talked about earlier, but from a emotional as well and figuring out your way. Given I was new to product management, I was new to Silicon Valley, I was new to Google, I was new to advertising and I had no idea whether I was ever going to be good at it or not.

**Lenny Rachitsky** (01:19:55):
Do you think the lesson there is basically that song just because you're losing doesn't mean you've lost or that you're a loser and just keep going?

**Jag Duggal** (01:20:02):
Yeah, bloody-mindedness is a dramatically underrated quality as we over-intellectualize from strategy to execution and all the other things. Sometimes persistence is key and persistence while still being clear-eyed about what the odds of success are is also key.

**Lenny Rachitsky** (01:20:24):
Jag, we've covered everything I was hoping to cover and more. Before we get to your very exciting lightning round, is there anything that you'd love to leave listeners with or share as a last tidbit?

**Jag Duggal** (01:20:36):
I would just summarize a couple of core points. I think the idea of perseverance and being very clear about what you're trying to achieve and how much it is worth to you and how much you're willing to fight for it, while also being very open and transparent to feedback that you're getting from people, from the market about whether what's working and what's not and knowing what parts to let go and what to hold onto really tightly is an important lesson.

**Jag Duggal** (01:21:13):
I think the other thing that I would just emphasize again is, and this goes a little bit back to the debate you're trying to frame up on new category or existing category, I think within that debate there's really a synthesis that says, and I think most people would agree, if you're trying to break through as an insurgent, you cannot fight on the ground that the incumbents stand firm. You have got to find a disruptive vector and that means searching hard for what is fundamentally different so that it breaks through the noise and the volume of the noise has just gone up so much in the last 15 years that I think that's even growing in importance. Incrementally better doesn't get you there. It doesn't get you there unless you have that hook.

**Lenny Rachitsky** (01:22:11):
I love that you summarized your key takeaways. It's something I've been wanting to do and I might ask every guest to try to summarize what they've shared because that is incredibly helpful. With that, we've reached our very exciting lightning round. Are you ready?

**Jag Duggal** (01:22:26):
I am ready. Let's do it.

**Lenny Rachitsky** (01:22:27):
First question, what are two or three books that you recommend most to other people?

**Jag Duggal** (01:22:31):
The business books, one is Play to Win. I think that is a great modern strategy book that takes a lot of what's happened in the digital world and summarizes it really well. Second one that I would highlight, which I think is a really good non-digital world summary and really distillation of the essence of strategy and as you mentioned earlier, he's coming on your podcast soon from Roger Martin is Where to Play and How to Win, which I think is a classic.

**Jag Duggal** (01:23:06):
And as I mentioned, I went to study public policy and politics back 15 years ago. One of the ultimate startups and one of the ultimate startup stories in my mind is the story of Singapore and there's a autobiography of the founding prime minister of Singapore from 1965 till he retired, he passed away a couple of years ago. Lee Kuan Yew. His book about the story of being kicked out. Singapore being kicked out of Malaysia as a tiny in business terms, sub-scale, little country with no natural resources is I think inspiring. His book is called From Third World to First, and I think it's a great story that in many ways is a parallel to what startups try to do, which is essentially go from third class to first and it's a very tricky ride and requires a ruthless honesty about where you stand and what it'll take to succeed. And it usually gets prettified up when told in retrospect, but it is messy every step of the way and I think it's an awesome, unapologetic summary of what it takes to achieve greatness in a very different sphere than we're used to talking to.

**Lenny Rachitsky** (01:24:38):
I love that. I definitely want to read that now. Next question, do you have a favorite recent movie or TV show you've really enjoyed?

**Jag Duggal** (01:24:46):
There's the great series that my wife and I watched fairly recently on HBO called the Gilded Age, which really shines a very interesting light on how technology, this is from the late 1800s, 19th century, how the technological changes disrupts both the economic world and the world of wealth, but also the social dynamics in a society. And it's fascinating because we're living through a new Gilded age right now and we're seeing a lot of those dynamics, but turbocharged on social media, so extra, extra exciting.

**Lenny Rachitsky** (01:25:32):
Good times. Do you have a favorite product that you have recently discovered that you really like? Either an app, some physical, anything that's bringing you joy? I

**Jag Duggal** (01:25:44):
Was listening to your podcast with Christopher Lockett and it was on the treadmill when I was doing it and in the middle of it he mentioned a product around the idea of category design. I think I forget what question you asked him and he mentioned the Lomi.

**Jag Duggal** (01:25:59):
Which is your kitchen countertop composter and my 13-year-old daughter who is very idealistic and has been on us to do composting for over a year now, and we bought a Lomi and we just did our fifth batch of soil last night and it works exactly as advertised and it is fantastic and I get a great amount of joy, as does the whole family actually in doing the right thing, in doing it in a modern way, in doing it in this accelerated timeframe overnight. And it's really a new category of product, of a kitchen appliance that I remember Christopher talking about that creating countertop space is a precious asset and we are happy we did it. That's a very recent last three-week story.

**Lenny Rachitsky** (01:27:08):
This makes me so happy. I also think, Chris, this is going to be his favorite episode of all my podcasts. A lot of love for him. That's incredible. I got to get me one of those. Two more questions. Do you have a favorite life motto that you often think about, come back to, share with friends or family that's been useful in work or in life?

**Jag Duggal** (01:27:28):
In work, in the very narrow confines of work, I've used it at probably at least a dozen times in this podcast, which is about par for me for an hour and a half at work. We're in the business of fundamentally different, not incrementally better. I think that's the core motto and I think it works in a slightly modified way for life as well. You live, you build the life you want to build and it's not going to be checking the boxes that everyone wants you to check. There was a time when I was at a consulting firm and I was a partner and I dropped out to go back to grad school and people thought I was crazy. Then there was a time when I dropped out to the horror of my parents, I dropped out of Harvard like what the hell was I thinking?

**Jag Duggal** (01:28:29):
To come out to Silicon Valley and that went, as we talked about pear-shaped within weeks. There was a time when I left Facebook to not that long ago, four years ago, to go join this crazy Sao Paulo-based bank. What did I know about banking? What the hell did I know about Brazil really? If you are not clear on what it is you are trying to do, A, and B, if you are not willing to tolerate failure, then you're just checking the boxes of someone else's expectations. And so fundamentally different is important now it's a luxury good. It's easy for some of us who live in the Bay Area and in Silicon Valley too. And so I'm very conscious of that, that it's a privilege and it's a luxury good, but I think everyone should strive for their version of it.

**Lenny Rachitsky** (01:29:24):
I love that you extend that idea not to just business but also your life. I didn't even think that it goes that far. Final question, I know you have to run really soon, but I can't not ask about this. Apparently you were convicted of smuggling mangoes at some point in your life. Can you share that story?

**Jag Duggal** (01:29:44):
Yes. As I mentioned, I grew up in Trinidad in the Caribbean and outside my brother and my bedroom was a mango tree that was abundant and spectacular quality set of mangoes. And here in the US, and I can speak very definitively for California, the mangoes are subpar. Forget about incrementally better. They are simply subpar. And Americans, I don't think realize what a good mango actually is and what a joy it is to behold.

**Jag Duggal** (01:30:21):
Every time I would go home, I would try to bring mangoes back. And one time coming through Miami International Airport from the Caribbean, I had a dozen mangoes wrapped in newspaper, slipped in between my clothes. And I hadn't counted on the fact that this was several months before 9/11, but I hadn't counted on the fact that the US Department of Agriculture had got smart to the fact that if people are coming from the Caribbean, they are bringing in food. That is a given. And they're going to try to smuggle it by. So they ran the entire plane through agricultural inspection. The guy looked through the X-ray machine and said, "You've got 11 mangoes in your bag, sir." At which point I knew I was caught. And I said, "Well, you've missed that one." I could see the picture. I was like, "You missed that one. It's actually 12."

**Jag Duggal** (01:31:16):
I ended up on a agricultural watch list, but then nine 11 happened and there were three or four years where as a management consultant, I was at an airport twice a week. You used to get on your ticket SSSS, which they said was random. Every flight for three years, I was flagged for a special screening because of my love of mangoes. It was worth it. Mangoes are a misunderstood, underappreciated fruit. So if you grow up in the Caribbean, you can't, it's hard to go without top quality mangoes. And so I still struggle here in Cali.

**Lenny Rachitsky** (01:32:02):
I hope you've been rehabilitated from your life of crime at this point.

**Jag Duggal** (01:32:05):
I have been rehabilitated and one of the great things about working with the Brazilian companies, the quality of mangoes in Brazil are top-notch. So I get to partake fairly regularly these days.

**Lenny Rachitsky** (01:32:15):
It's unfair. I am going to ask you for your some mango recommendations. Jag, I've kept you long enough. I feel like this podcast episode was definitely not incrementally better. It was certainly fundamentally different. Thank you so much for being here. Two final questions. Where can folks find you if they want to reach out and maybe follow up on stuff and how can listeners be useful to you?

**Jag Duggal** (01:32:34):
Thank you, Lenny. I really enjoyed it. I appreciate it. Very kind words. Best place to find me is probably on LinkedIn, Jag Duggal, a relatively unique name, fairly easy to spot and find there. And I am always looking for stories and for opportunities. I'm always looking for stories of fundamentally different. I would love to hear those, especially when they're done against the odds or when there's a more convenient or easy choice. And we are in the business of building the world's first social and self-driving AI-powered bank, which sounds like a lot of NBA gobbledygook I know, but Silicon Valley buzzwords, but we mean it. And so anyone who wants to join what we call the purple revolution, our brand color is purple, love to hear from you wherever you are in the world. We have people everywhere.

**Lenny Rachitsky** (01:33:42):
And if they're interested, is it like newbank.com/careers?

**Jag Duggal** (01:33:46):
I believe that's right. Yes.

**Lenny Rachitsky** (01:33:47):
Amazing. By the way, do you have a color, a name for your purple brand color?

**Jag Duggal** (01:33:52):
We call, not we, our customers call the little purple credit card, the [foreign language 00:22:00 Hoshinyo Hosho] in Portuguese means purple. [foreign language 00:22:03 Hoshinyo] basically means little purple card. And there was actually a moment, a point when there was a risk because of some regulatory issues that were happening in Brazil in 2016 where there was a chance that NewBank would have to shut down. And it turns out the Central Bank, our customers called the Central Bank and said, "You cannot let this happen." And from that day, one of the engineers said when it was just a hundred or so people, "The future is purple," and we have T-shirts all over NewBank saying the future is purple, so that's part of our origin story.

**Lenny Rachitsky** (01:34:42):
I'll let you go. Jag, you're awesome. I feel like this is going to help a lot of people. Thank you so much for being here.

**Jag Duggal** (01:34:49):
Lenny. Enjoyed it so much. Thanks a lot. Great to chat.

**Lenny Rachitsky** (01:34:52):
Bye everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at Lennyspodcast.com. See you in the next episode.

---

## [12/21] Why not asking for what you want is holding you back | Kenneth Berger (exec coach, first PM at Slack)

**Lenny Rachitsky** (00:00:00):
You were famously the first PM at Slack and then you ended up transitioning into executive coaching.

**Kenneth Berger** (00:00:05):
For me, the impact was about making this work sustainable so that we're not burning out or selling out, but actually able to pursue these hard goals that we have in startups.

**Lenny Rachitsky** (00:00:14):
What we're going to be talking about today is your personal magnum opus, the output of 10 plus years as a founder and operator and seven plus years as a coach.

**Kenneth Berger** (00:00:23):
The core idea is ask for what you want. Turns out when you actually ask for what you want out loud, you're much more likely to get it.

**Speaker 3** (00:00:30):
You're hired.

**Lenny Rachitsky** (00:00:32):
How do you know that this is something you need to be working on?

**Kenneth Berger** (00:00:34):
If you're more in the people pleasing camp, maybe you're used to not asking at all. You're hoping that people are reading your mind. And if you're sort of more in the control freak camp, maybe you're used to ordering people around and saying, "Go do this now."

**Lenny Rachitsky** (00:00:44):
How do you know what you want?

**Kenneth Berger** (00:00:46):
Complaints are great inspiration. Every complaint implies a dream. Let me envision a better future. Let me think about what's an effective way to actually move towards that. See what it's like to not be sort of living in fear all the time.

**Lenny Rachitsky** (00:01:01):
Today, my guest is Kenneth Berger. Kenneth coaches startup leaders to help them avoid burnout and live the life that they want. He was the first product manager at Slack and spent over 10 years in tech before transitioning into coaching. His core focus with leaders is to help them learn how to ask for what they want. This sounds really simple, but as you'll hear in our chat, this one skill is at the core of so many of the struggles that people have in their career and in their life.

**Lenny Rachitsky** (00:01:28):
Kenneth shares a ton of very tactical advice to help you figure out what it is you want, how to overcome the resistance that comes with asking for what you want, how to actually ask for what you want effectively, why the most important step is hearing the response that you get when you ask for what you want and all of the things that will change in your life if you get better at this one skill.

**Kenneth Berger** (00:04:23):
Yay. thanks for having me.

**Lenny Rachitsky** (00:04:30):
I love that, yay. That should be a tradition that everyone goes with. I love that. So we originally met when I was doing a post on being a first product manager at a company. You were famously the first PM at Slack, and then you ended up transitioning into executive coaching, which is what you do now. What we're going to be talking about today is something that you described to me as, quote, your personal magnum opus, the output of 10 plus years as a founder and operator, and seven plus years as a coach to startup leaders.

**Lenny Rachitsky** (00:04:59):
And the core idea is simply asking for what you want, which sounds really simple. So let me just start broadly just why have you found that this skill, this one idea is so core to so many of the challenges that people run into in work and in life?

**Kenneth Berger** (00:05:19):
If I had to answer in one word, it would be integrity. I think that it's one of these funny things where everyone thinks they already know how to ask for what they want. We all ask for what we want. We order our coffee in the morning and we all think we have integrity. No one walks around thinking, "I'm lying to myself all the time or lying to others certainly." And yet we tend to fool ourselves a little bit. When it comes to are we really pursuing the things that we want in life? And I think to me, the flip side of that is sort of the reason that the stakes around asking for what you want are so high because we can't guarantee we're going to get what we want.

**Kenneth Berger** (00:05:59):
But if we're asking for it regularly, if we're listening to the response, we're expecting the nose we get from the world, then we can get the sense of, "Yeah, I'm honoring what's important to me. I'm honoring the world's response and I'm moving forward towards what I want." And if we don't do that, "Well, then we're fooling ourselves that we're actually moving towards of what we want." There tends to be all these unexpected secondary and tertiary effects that come out of that of stress and frustration, and unhappiness because of course, asking for what we want, pursuing what's important to us in life is just one of the most important things of fulfillment, of what's important in achieving our purpose.

**Lenny Rachitsky** (00:06:37):
What are just some challenges that people have in their life and career that are just rooted in doing this badly? Not asking for what you want, not knowing what you want.

**Kenneth Berger** (00:06:47):
For me with clients, I think what I'm often looking for are just kind of this sense of being stuck because everybody has got frustrations. Everybody gets nervous at work sometimes. But if we're in the same stuck place week after week after week in our coaching sessions, probably you're trying the same thing and not getting any different results. It's that definition of insanity thing.

**Kenneth Berger** (00:07:11):
So really I look at that and say, "Okay. Maybe you're asking for what you want." Maybe. Although often people aren't. But even if you are, you're probably not achieving it. You're not getting the results that you want. So why are we not learning from that? Why are we not moving forward getting new data, trying something new, actually treating it as a sort of iterative development discovery process?

**Kenneth Berger** (00:07:32):
So I think that stuckness is one thing. And I think the other thing I look for is interpersonal conflict, right? Because I think that one mode of not asking for what you want well is holding back and not really saying it out loud. I think another really common mode is coming with a lot of entitlement of, "You know what? You better do what I say. I'm your boss. You're my report. You better obey or agree," or whatever it is. And of course the danger of that is interpersonal conflict. Even if you are their boss, that's a really disrespectful way to come into the conversation and it's an obvious source for a lot of issues.

**Lenny Rachitsky** (00:08:09):
Before we get into how to learn to do this better and more of why this is so important, is there an example from your career where you did this really badly or you didn't ask what you want?

**Kenneth Berger** (00:08:19):
There's so many examples. I think we will eventually get into the story of how I was fired from Slack. But I think for me, the thing that always came up was just being attached to being right. And I think a lot of us get into this boat. We enter into a meeting and we're sure from the first moment, "I'm right and they're wrong." And I think that especially in product management, we're supposed to be the holders of this vision for what the product should be. And so it's easy to come in with a lot of conviction and not really a lot of openness to other ideas.

**Kenneth Berger** (00:08:51):
Often what I try to introduce people to, and I've learned all this stuff the hard way, believe me, is it's fundamentally disrespectful to go into a meeting already deciding that you're right and the other person is wrong because you can't know that for sure. There's always a new perspective, new data that could come in. And so you want that conversation to really be a back and forth. And if you're coming in with this really ingrained sense of righteousness, you can't do that. There's no way to have that conversation.

**Lenny Rachitsky** (00:09:17):
I think you may have already answered this question, but I think it's really important is how do you know that this is something you need to be working on? How do you know like, "I really need to pay attention to what Kenneth is about to tell me?" You said one is you feel you're stuck in your career, something you're just not making progress, and this could be the answer. Or you said there's interpersonal conflict and you're just having a lot of conflict with people. Are those the two answers? Are there more?

**Kenneth Berger** (00:09:37):
I think those are great things to look for. I think it's also good to look for a sense of things being high stakes, because I think part of what can create a lot of conflict and difficulty in these situations is a sense of this is life or death. And that was certainly how it was when I was a founder of, "Okay, normally..." When I was at Adobe, it's a big company, they're going to be fine either way, no matter what I do. Right? I can be easy going. Let someone else have their way in the meeting. But when it was my company, when it was my vision on the line, I didn't feel especially flexible. The stakes seemed really, really high.

**Kenneth Berger** (00:10:12):
This is the success of my idea, of my vision, my reputation is on the line. And so I think often when the stakes feel high, we're kind of focused more on the fear of what we don't want to happen than on actually achieving what we do want. And that's a really critical distinction because if we're running away from our fears, it doesn't necessarily mean we're getting anywhere meaningful for what our desires are. And so that sense of high stakes that often we can get, whether it's in interpersonal conflict or being afraid of asking for what we want, that can get us really focused on the fears rather than focused on the goals.

**Lenny Rachitsky** (00:10:48):
There's a question I was going to save for later, but it's something that's very top of mind for me is knowing what you want. How do you know what you want? There's basically knowing what you want and then asking for what you want. I like equanimity in my life, and so I often don't ask for what I want or push down maybe what I want, or I don't think about what I want. I just want other people to be happy.

**Lenny Rachitsky** (00:11:15):
I'm curious what people can do and what I can do to get better at knowing here's what actually want, here's what would make me happy and fulfilled? What are some skills there I could work on and other people can work on?

**Kenneth Berger** (00:11:27):
Well, first of all, I'd say you're very far from alone there. I mean, I think the people pleaser coping strategy is one of the sort of most classic, and it is effective, right? In the short term like, "Oh, you can feel safe and calm when other people are generally happy with you." And the cost tends to be long term in terms of am I really pursuing the things that are important to me?

**Kenneth Berger** (00:11:48):
So one of my favorite techniques here is this concept they call dream behind the complaint. Because you're right that we tend to not be that great always at really dreaming and envisioning and saying, "This is my dream of what I want out of life." That can sound really scary for people, but we're very good at complaining. Usually people are very good at saying, "Oh my God, there's this thing happening at work, it's so annoying. Or there's this person that really bothers me so much, why are they always like this?"

**Kenneth Berger** (00:12:17):
So the magic of that complaining is that every complaint implies a dream. It implies a better world where that complaint is resolved. And so often that's the tool that I'll take people to first to say, "All right, great. Let's complain. Right? It feels so fun and good and releasing to complain, and let's look at what that implied world is behind that complaint." What is this vision? And then to really check, "Okay. Let's imagine you get that. That's the world of the future that you get. How does that feel? Is that big enough or is it kind of meh?"

**Kenneth Berger** (00:12:50):
Are we like, "Oh, my dream is that I get to speak up a little more in meetings?" It's like, "Well, that's probably not a hundred percent of your dream. What's really behind that?" And so I think that check can help you sort of level up to say, "Is this really an inspiring dream for me that's going to motivate me more than those fears that might be hiding in the background?"

**Kenneth Berger** (00:13:13):
And on the flip side, with entitled people, you can also get really unrealistic dreams where I might say, "Okay. So it sounds like what I'm hearing is that your dream is that everyone obeys you and automatically agrees with you no matter what." And they sort of say, "Ah, I don't know if that's quite my dream." And so if your dream is so embarrassing to say out loud, you can't even really own it, maybe that's not the right dream. And so that checking whether it actually feels inspiring, but also sort of credible and possible is a good way to find that middle ground where, "Yeah, this dream is hard. I don't know that I'm going to get it, but, damn, it's worth trying. I want to go for it."

**Lenny Rachitsky** (00:13:54):
I love that for someone that wants to try this on their own and help themselves get better at this without you being there, what is it that you do? Is it you dream about what would make you happiest? Is it complain and see what's at the root of it? Is it just imagine a world where you're really happy and see what emerges.

**Kenneth Berger** (00:14:11):
Specifically for articulating what you want because that's the first step of the asking for what you want process. It really is as simple as that of let's start with what you have consciously in terms of what you want. And if you have trouble, then we can try looking at complaints and starting to articulate a vision out of that.

**Kenneth Berger** (00:14:29):
But to me, really what's interesting about asking for what you want is that on the surface it's very simple, right? I mean, the steps I outline are articulate what you want, ask for what you want intentionally and accept the response and then try again. Because it's an iterative process. We're learning from the response and what it tells us because the response is usually no. So really what tends to be hard there, I mean, that's a straightforward process. It's not rocket science. What's hard there is the resistance.

**Kenneth Berger** (00:14:58):
The parts of us that are not so excited about that, that thinks asking for what we want is scary and articulating a big dream that we might not get is really scary. Because god, what if I don't get it? What does that mean about me? Am I a failure? Or what does it mean if I respect the no? What if I ask for my big dream and someone tells me I'm not going to get it? What does that mean? How am I going to feel?

**Kenneth Berger** (00:15:19):
So working through all that resistance is really a lot of what tends to be tricky about asking for what you want because otherwise it's articulate, ask, accept.

**Lenny Rachitsky** (00:15:28):
Okay. You're getting into where we're going to go. Before we get there. Final question. This idea of dealing with, no, I think this is the other big blocker for people is like, "Oh, that's so scary to ask for something I really want or ask for something big that is really important to you." What is it that you advise there of just getting over this fear of just asking for what you want?

**Kenneth Berger** (00:15:49):
So I have a more expansive definition of no than most people, I think, because for me it's not a yes unless it's a hell yes. Because you really want enthusiastic consent. Not just, "Maybe, kinda. I'll try. We'll see. But yeah, absolutely, let's do this." And I think that often it's so tempting to settle for something less than that to say, "Oh, well, okay, we'll give that a try." And that often comes to bite us later on because we accept this thing that short of a hell yes. And then we realized later on, "Oh yeah, they weren't really in."

**Kenneth Berger** (00:16:26):
They didn't show up to the party or they didn't deliver on time because my CTO said, "Yeah, I think maybe we can deliver by May 1st." And then May 1st comes and surprise, surprise, your milestone is not done because you didn't go for that hell yes. And so I think part of what I encourage people to do is, one, to really hear anything short of a hell yes as a no. So it's not a bad thing. Mostly the world tells us it's actually really great data. It helps us figure out what are we going to try next? What are we going to try next, try next, try next? Because that's going to help us learn how to actually get to that hell yes.

**Kenneth Berger** (00:17:03):
And part of that asking process is of not settling for it, but actually asking and saying, "Hey, I'm hearing maybe you're lukewarm on May 1st as a date. What would be a hell yes day for you where you could say, absolutely, we can deliver on that?" And that way we're not making them wrong for saying no. We're saying, "Of course you get to say no. Everybody gets to say no whenever they want. But let's get to a hell yes. What would it take for us to get there?"

**Lenny Rachitsky** (00:17:29):
That's a really helpful framework and phrase to use is just what would it take to get to hell yes? Not just what would it take to get to you feeling comfortable with this? What would it take for you to just agree to this? It's more a hell yes. And your point there is hell yes is when they actually fully agree. Oftentimes people kind of like, "Yeah, yeah, yeah, yeah." And then they don't actually follow through.

**Kenneth Berger** (00:17:49):
Some people call this a whole body yes because sometimes your head is saying yes, but your heart is saying no or your gut is saying no. And so I think you can really feel in your body when you've got a hell yes, when all of you is fully in and ready to do this.

**Lenny Rachitsky** (00:18:06):
And this applies to, you're giving examples here of just getting like aligning a deadline. I imagine the same skill applies to everything in relationship questions and friends and family and work.

**Kenneth Berger** (00:18:19):
It does. And it is something universal, but I do think of it as being particularly relevant to my work with startups because I work primarily with startup founders. Because with startups you know that mostly they fail. We all know the numbers on that. And so to me, there's a perspective you have to take if you're going to operate in the startup world of being okay with not knowing that you're going to get the outcome you want. A lot of people, we operate in a safer world where we're more clear exactly what the outcomes are going to be, but if you're a startup founder, you've got to be okay with, "I'm just going to go for this, and I know I probably won't get it. But it's so meaningful to me, I'm going to go for it anyway."

**Kenneth Berger** (00:19:00):
And so to me, that's not just about the big picture of running a startup, it's about really anything you might want in life, because that's such a useful perspective to say, "I know I'm not going to get it. I know I'm not guaranteed to get it. I'm not going to be attached to that. I know people aren't obligated to tell me yes, but I'm going to go forward anyway because I want it and that's enough."

**Lenny Rachitsky** (00:19:20):
So let's actually get into the skill of learning how to actually ask for what you want more effectively. You already described three steps, so maybe just describe them again and let's just walk through them.

**Kenneth Berger** (00:19:32):
The first step is articulating what you want. And we've gone into this a little bit, but to me, I think that the key places that people tend to have missteps here, or one in this phrase, it's fine. I think of the "it's fine" cartoon with the flames and the dog, I think it is. But I think a lot of us fall into that trap of saying, "You know what? I'm fine. I actually, I don't need anything. I'm good."

**Kenneth Berger** (00:19:59):
And again, this is tempting, right? Because it's so nice to have this idea that I'm fine, I don't need anything. And in a certain way, that's a nice attitude because yeah, we're not guaranteed anything, so it's nice to be okay with the status quo. But for those folks, often what I'm encouraging that do is to really tune into the parts of them that maybe aren't so fine like, "Gosh, I'd prefer it a little bit if things were this way or yeah, I'm a little bit bothered by this, or I'm a little bit nervous about this."

**Kenneth Berger** (00:20:26):
And so kind of tuning more into those subtle emotions that are pointing them towards, "Sure, I'm okay with the status quo, but I want something more." And so helping them articulate that in a clearer way where they can want something without being attached to having to get it. The other extreme of this is people who articulate these sort of wildly unrealistic goals. So this is the founder that just wants everyone to agree with him all the time and to obey him immediately.

**Kenneth Berger** (00:20:56):
So for those folks, it really tends to be more about saying it out loud. Once you say it out loud, it is clearer. That's not really what it's about. And so for those folks, I tend to ask them to go deeper to say, "Yeah, I know you're not a control freak. You don't want everyone to think exactly what you think. What's it really about? What does that get you?" And so often it goes from being this more kind of objective external goal to being a more kind of social emotional goal of, "You know what, I just want to have a team that feels really aligned around me and we're just ready to go for it and we've got each other's backs."

**Kenneth Berger** (00:21:35):
That doesn't mean we agree with each other all the time or that we're a hundred percent aligned in everything, but it doesn't mean there's a certain feeling that I have when I go into work. Even though I don't know that we're going to get what we want or that everyone is going to agree.

**Lenny Rachitsky** (00:21:47):
Do you have any examples from your time you could share of someone articulating what they want and figuring out how they articulate, how to articulate what they want just to make it even more real?

**Kenneth Berger** (00:21:58):
To me a lot of the classic examples are around feedback. Because I work with a lot of founders who are not the sort of classic control freaks. They're super nice and their teams love them and they love their teams. So for them, it can be really hard to deliver hard feedback, to deliver negative feedback and even more to actually create consequences. Because the thing about accepting other people's no is that, "Sure, they can always say no. Everybody gets to say no whenever they want, but there are consequences." And so the classic thing I see with the nice founders is they're really afraid to actually create consequences when people are not living up to their expectations. Right?

**Kenneth Berger** (00:22:40):
When they're not aligned with the culture, they're not delivering in the way that the CEO wants them to be delivering because it doesn't seem that nice. They're like, "Oh, I think of myself as nice and of being so kind and of people loving me." And it's like, "Well, that doesn't mean that there aren't consequences for their actions."

**Kenneth Berger** (00:22:56):
Part of really respecting them is respecting that they can make the choices they want and they're grownups enough that they can deal with the consequences of those choices."

**Lenny Rachitsky** (00:23:05):
Can you even get more concrete there? Is it we need to hit this date, or are there going to be big problems? Or is it like, "I need you to hire this large of a team?" I don't know. What is it that they're not articulating that they later realize, "Oh, here's what I need to articulate."

**Kenneth Berger** (00:23:20):
So I think sometimes it is about alignment, the disagree and commit. So I see that a lot of founders saying, "Hey, I'm super respectful of your differing opinion here, and I totally validate you and I appreciate you. Thank you so much for sharing that." But they're not willing to go that extra step and say, "Yeah, but this is the call and I need you to actually follow through with that. I understand that might be disappointing or frustrating or what have you, but part of the expectation for this role is that you can roll with disagree and commit sometimes when that's necessary."

**Lenny Rachitsky** (00:23:52):
That's an awesome example. I fully get that and I could see how scary that is to a lot of people. One is just coming to terms with, "This is what I actually want to be doing, but I just don't feel like I can because it's going to, I think, upset people." Okay. So what else can you suggest people do to help identify what it is they want and articulate what they want? So you talked about pay attention to just like, "Oh, this would be better. If this changed, I'd be happier." Or things would probably run better. That's a really cool example of how to think do that because easy, just like, "Oh yeah, if we actually can make a decision in this meeting, that'd be really cool." Maybe we should try to do that and ask for that. Is there any other tips and approaches to helping you figure out what you want?

**Kenneth Berger** (00:24:40):
It always comes back to integrity. And a great way to do an integrity check is to just look have I fully expressed myself? And so I think we've talked a little bit about charting your feelings as a piece of that of like, "Yeah, am I really tuning into how annoyed I am or how frustrated I am or how nervous I am?" Because if I haven't fully owned those feelings and expressed those in whatever way is appropriate, then probably I'm not fully in integrity.

**Kenneth Berger** (00:25:09):
I think saying what you have to say is a piece of that too. "Gosh, is there something that I keep thinking about and I'm just like three or four days, I'm just like, man, I really want to say this to this person." At this point, you're probably out of integrity because there's something deep in you that really needs to say this, right? And so to me, articulating what you want is really about mindfulness is about checking for all these things.

**Kenneth Berger** (00:25:35):
What is the part of me that's not fully expressed? Because it doesn't mean I'm going to get what I want or that people are going to give me all my dreams immediately, but it feels so much better to have it out. That sort of suffering that fear usually comes from holding it in and saying, "Oh, having these stories of I'm not allowed to say that. It's not appropriate to express that I'm bored in this meeting." Versus saying, "Probably a lot of people would be grateful if we said out loud, 'I'm bored in this meeting.' Let's move things along."

**Lenny Rachitsky** (00:26:04):
**Kenneth Berger** (00:27:12):
So for asking what you want, I think the really important tweak here is asking intentionally because I think a lot of us are stuck on a certain track that's comfortable for us when we ask. And so if you're more in the people-pleasing camp, maybe you're used to not asking at all. You're hoping that people are reading your mind and just magically knowing what you want.

**Kenneth Berger** (00:27:34):
And if you're more in the control-free camp, maybe you're used to ordering people around and saying, "Go do this now." And so for both of those folks, it's not about... I think if you ask any of them, "Is this working for you?" They'd say no. Of course, it's obvious from an effectiveness standpoint, it's not working well, but they more just haven't embraced that you can do it a different way that they only really see one way of doing it.

**Kenneth Berger** (00:28:00):
So part of asking for what you want effectively is really just recognizing the rut that you get stuck in and working through all those narratives that make us resist asking it a different way. Because often the people who don't want to ask have a story that says, "This is too risky. Or it's not worth it. They're going to say no anyway, so why even bother?"

**Kenneth Berger** (00:28:24):
So these are all very common things that people go through, but then they end up not actually asking for what they want. Now, actually expressing who they are and what they stand for in the world. And that has a really serious cost. I think that we tend to tell ourselves the story, "Oh, this is fine. I'll be fine." Versus owning, "I'm going to be living my life not asking for what I want." Do I really want to be at my funeral and have people say, "Oh, Kenneth played it safe. He didn't really go for his dreams, but he was nice. No one was ever mad at him." That's not what we want people to say at our eulogies.

**Lenny Rachitsky** (00:29:01):
No. That's good motivation. Okay. So say in this example you gave of like, "I need us to make a decision. I know I'm trying to keep everyone happy, but we need to make a decision." Do you have advice for maybe phrases of how to approach. You talked about making intentional. How do you actually go about doing that? Is it the way you communicate it? Is it something else? How do you actually do this without pissing people off and also just risking too much?

**Kenneth Berger** (00:29:33):
Even implicit in that question, to me that's that question of, "Oh, how do I do it without being any risk of ever pissing anyone off?" That's a piece of the resistance right there. And so this is a great example of the type of work that we have to do, right? Because in theory, asking is easy, "Oh, you just try some way and maybe people are pissed off and maybe they're not." But probably it's going to be fine and you'll have the chance to try again and iterate and work from it.

**Kenneth Berger** (00:30:00):
But often we get stuck so we don't get to go through those levels of iteration because we want to make sure we're going to get the outcome. We say, "Oh, well, I'm not willing to ever piss anyone off ever. And so I'm just going to be stuck at this step because I haven't figured out what's going to guarantee me." And of course, there's no guarantee. We can never guarantee that people are going to feel a particular way.

**Kenneth Berger** (00:30:22):
So part of asking for what you want effectively is actually bringing some compassion for yourself. Of course, we all want to be sure that the way we ask is going to be effective and no one is going to be mad at us and we're going to get all of our dreams come true. But we don't get that. I wish we did. That would be nice. But is that worth not pursuing your dreams in life?

**Lenny Rachitsky** (00:30:45):
Such a good point about what you identified and the way... I think a lot of people that think about it, it's just like, "I'd always do this without causing anyone any pain or risking anything going wrong." I think that's, to your point, part of it. So you talk a lot about founders. You work with a lot of founders, a lot of listeners here are not founders, they're product managers, ICs on teams, other functions that don't have "power". Is there anything that you suggest these folks do differently or think about this differently or is it kind of the same thing? In the end everyone has power in some way. How would you think about this if you're just, say, a product manager, individual contributor?

**Kenneth Berger** (00:31:23):
I think one of the most important balances in terms of the asking step is both asking clearly, but asking with great humility. And this actually works whether you're in a position of power or not because I think a lot of folks will go so far to the end of humility. They say, "Well, I'm not going to say this out loud at all." But in fact, if you're willing to say, I really disagree with this product decision and I would really prefer that we make this different decision. I know it's not my call and I'm just one opinion and a lot of people are going to see things differently and that's fine, but it's important to me that you know that. So what do you think? Are you willing to reconsider this?"

**Lenny Rachitsky** (00:32:00):
That's such a great approach. It's very not scary to say that. It also, I think, highlights something I wanted to touch on is I think people have a lot more influence and power than they think they do. Say a PM on a team disagrees with a plan for a product. People actually care about your opinion and you could actually change things. But just telling them, "I think this is a bad idea." And you often don't. Is that what you find, that people have a lot more influence than they think they do? Anything along those lines that comes up?

**Kenneth Berger** (00:32:35):
You're giving me deep goosebumps because I think this is a really underappreciated thing in terms of asking for what we want because especially in the PM world, we're trained to look for data. We're not just going to state an opinion. We're going to say, "Oh, the AB test said this. Or 30% of our users do this, or the ROI on this is X." And data is great. We love data for a reason of course. And I think people forget about exactly what you're highlighting, that your relationships matter, and that just your opinion because you believe something or because you want something often that's enough.

**Kenneth Berger** (00:33:13):
Because guess what? You're in a relationship with these people you work with. They care about you. You have some sort of leverage with them. And I think that often people go the other way and say, "Oh, I've got power. I'm going to try and leverage it." But actually, if you go the other direction and you're humble and you say, "I know I can't make you do anything, it's not my call to make. But man, this is really what I want. I'm just going to put it out there and ask." That I think it feels really vulnerable and uncomfortable to not lean on data as a sort of way of saying, "No, no, I'm right, so you should believe what I believe." But just say, "Actually, I don't know that I'm right. This is just what I think and I hope that's enough on its own."

**Lenny Rachitsky** (00:33:50):
Do you find that that's actually a crutch a lot of times to people not saying anything is they don't have that data? They don't have evidence and they just, "I shouldn't say anything. If someone asks for why I don't have a great answer, I just think this is what should be."

**Kenneth Berger** (00:34:03):
Totally. And I think there's a balance there as with anything. Is ignoring data and going in gut all the time, great? Probably not, right? We use data for a reason, but I think there are all these moments when we are making a gut decision and having all the data there means having the opinion set out loud. I think often the dangers of people saying, "Oh, I don't have data to back this up. It's just what I think. And I'm not sure people are going to agree with me, so I'm just not going to say it."

**Kenneth Berger** (00:34:35):
So we don't have the data of all those gut opinions of these subject matter experts in the room, even though that gut information to me is just as important as anything we could get from the SQL database or whatever.

**Lenny Rachitsky** (00:34:48):
Before we move on to step three, you talked about the opposite of asking for what you want. This was just step two is just complaining and being angry later like, "I knew this project was going to fail. I knew this was a terrible deadline. I knew this design was not great." Anything more you want to say along those lines of just like, "If you're not asking for what you want, complaining is often a sign that you should be doing that more"?

**Kenneth Berger** (00:35:11):
To me, complaints are great inspiration. To me, I love radical candor, for example, where I try to go a step further than radical candor is to not just say, "Hey, here's my feedback. Just wanted you to know." But to say, "And I want something. I would like to see an outcome." And so I think that to me it's all about the effective framing that the complaint is probably not going to be an effective way to do it, but it can be great inspiration to say, "Gosh, that complaining means I'm frustrated. What am I frustrated about? Let me envision that better future. Let me think about what's an effective way to actually move towards that. What's an effective way to communicate that desire that's actually likely to get me towards a yes?"

**Kenneth Berger** (00:35:58):
And so when we actually embrace that sort of frustration, annoying, complaining thing and follow that thread down and think about how to be effective that way, we can actually get something really compelling and useful, but it requires actually embracing that part of ourselves that sometimes we're a little bit ashamed of like, "Oh, I don't like that whiny part of myself. I'm just going to push that one down versus actually taking what it has to say as important data."

**Lenny Rachitsky** (00:36:24):
That's a really good point. I think that's actually another blocker for a lot of people is just, "I don't want to be a complaining person. I just want to be like, let's do this. I'm in, let's go. I don't want to be seen as a squeaky wheel." Is there anything you say there about as a resistance point for people?

**Kenneth Berger** (00:36:40):
Well, I'm a big fan of internal family systems, which is this sort of psychotherapy technique that really talks about parts and the sort of parts of ourselves and the ways in which they don't always agree with each other. Part of why I love this approach is, A, because we already use this language. We say, "Part of me thinks this, a part of me thinks that." And really when I talk about how to work through resistance, really it's about embracing and validating all of our parts.

**Kenneth Berger** (00:37:07):
Because often we're really comfortable with one part of ourselves that we think is, "Oh, this part is virtuous and good and great, and this part is whiny and bad, and not great, and I don't respect that part of me as much." So really to sort of ask effectively, we generally need to embrace all these parts and really bring in all the information they're bringing in because if we ignore the part that's really scared to ask, well, then we're going to stay stuck.

**Kenneth Berger** (00:37:32):
Versus if we come in and say, "Hey, buddy, why are you scared? You seem terrified. What's going on? Oh, well man, you think your whole professional reputation has staked on this and you're an imposter and they're going to find out, and then you'll never work again? Well, of course you'd be scared. That makes a ton of sense." And by embracing that, instead of ignoring that and being ashamed of that, that is often how we soften those fears and say, "I know that's scary, but we also know that's not really true. You're not an imposter, right? You're an experienced professional."

**Lenny Rachitsky** (00:38:01):
Man, there's so many threads we can't follow here. This whole line of internal family systems, right?

**Kenneth Berger** (00:38:06):
Mm-hmm.

**Lenny Rachitsky** (00:38:07):
That's its own podcast episode potentially. And then imposter syndrome, we've touched a bunch of different podcast episodes, but I'll avoid going in that direction. Something you reminded me of is we just had Carole Robin on the podcast who taught this class touchy-feely at Stanford for a long time, which is all about helping people learn how to deal with other people, which we never learned in life. It's like a class, how to learn to work with other people.

**Kenneth Berger** (00:38:29):
I took one of Stanford's T-Group Weekends, summer of 2020, I think a month after George Floyd was murdered and was facilitated by a black woman. And it was one of the most profound transformative weekends of my life. Because T-groups already people rave about them. But having it at that point in history with those people in the room, oof.

**Lenny Rachitsky** (00:38:53):
A lot of tears, I imagine.

**Kenneth Berger** (00:38:54):
It was crazy. I mean, it was really wild.

**Lenny Rachitsky** (00:38:58):
I feel like every single person that has gone through, I think it's called Leaders in Tech is the broader umbrella term. And Carole talked about it. Everyone that has gone through it, 100% have told me that it's a transformative life experience for them. And you had a bonus transformational piece. So anyway, if people want to check out that episode, I will include it in the show notes. But the reason I brought it up is Carole shared this framework for how to actually give feedback in a way where people can receive it that I'll just highlight here. I have it here.

**Lenny Rachitsky** (00:39:26):
And it's somewhat related to nonviolent communication, which is what you touched on. And she told me, actually, she taught this way before nonviolent communication came out with their whole philosophy. And it's basically when you want to give someone feedback, the template is when you do a behavior, I feel a feeling, and she's big on like say actual feeling word not like, "I feel like, or I feel that," blah, blah, blah. And step three is, "I'm telling you this because..." and then what you want them to change. Do you find that sort of approach helpful?

**Kenneth Berger** (00:40:01):
I do. I teach the same thing. I think sort of Carole's approach and nonviolent communication, DBT teaches a similar approach. They call dear man.

**Lenny Rachitsky** (00:40:12):
To me, what's DBT?

**Kenneth Berger** (00:40:14):
It's a dialectical behavioral therapy. It's related to CBT. So there's kind of rough consensus in the sort of personal development world of how to ask. And really what they have in common is around staying really factual because I think that what can we know factually well? We can know our thoughts, we can know our feelings because no one else can know that better than us. Maybe we can trust our eyes. What would a video camera have recorded? And that's about it.

**Kenneth Berger** (00:40:44):
So I think often we get really distracted by all these stories we have about the data, but when we bring it back to that fundamental core of this is what I think, this is what I feel, this is what I've observed in the world, it tends to make the ask a lot clearer versus these stories like you mentioned of, "I feel like you're an asshole." It's like, "Well, that's a story. That's not a fact."

**Lenny Rachitsky** (00:41:07):
Yeah. I feel that is not the right way to say I feel. What do you actually feel? No. Okay, so let's move to step three. We've been going on this whole tangent of therapy and stuff, which is amazing, but let's make sure we cover all three steps. So step one again was articulate what you want. Step two is ask for what you want. What's step three?

**Kenneth Berger** (00:41:28):
So to me step three is actually the trickiest for most people.

**Lenny Rachitsky** (00:41:32):
So far, they're all tricky to me.

**Kenneth Berger** (00:41:34):
Oh yeah, they're all tricky, for sure.

**Lenny Rachitsky** (00:41:36):
The most tricky.

**Kenneth Berger** (00:41:38):
But step three is accept the response. And it might seem so simple, but it actually is kind of subtle. And so one reason is that idea of sort of the whole body yes or the hell yes. Because I think often we really want a yes. And so we're very, very biased to look for a yes versus accepting no, "That was a no." If someone made this face, that's a no. It doesn't matter what comes out of their mouth. And so the challenge of accepting the response is often that of hearing the no, but not over accepting or under accepting it.

**Kenneth Berger** (00:42:18):
Because I think sometimes what people who are really afraid to ask will do is they say, oh, well, that was a no. So it's no forever and I should never ask again. My dream is dead and nothing is ever going to happen for me again." And that's because they get so scared. But actually no, that's over accepting. The no is just from this person right now in the way that you asked, which doesn't necessarily mean anything about the next time you ask to a different person in a different way, in a different time.

**Kenneth Berger** (00:42:44):
And on the flip side, in that sort of more control freak mode, I think for them they'll often skip over the response say, "Well, they said no, but they don't know what they're talking about." Or they're my direct report, so they have to do what I say. So these are all fundamentally disrespectful ways to operate in this relationship. When we're talking about asking for what we want, we're talking about influence. So you need to have good relationships. You can't be influential with a bad relationship.

**Kenneth Berger** (00:43:13):
So really accepting the response is about, yes, I'm going to be genuine about what I want, but I'm also going to genuinely care about you and have deep respect for your ability to consent or not consent to whatever the ask is. Because I think the counterintuitive thing is that often when we really respect people's no's, it can actually be more influential, more motivating. If someone says, "Okay. I'm not ready to deliver this on time." Be like, "Okay. Well, I'm going to give the project to another person."

**Kenneth Berger** (00:43:46):
I'm taking your no at face value. And they say, "Oh gosh, well, I didn't realize that was going to be the consequence. Maybe I can get it done by that time." And so that way you're not forcing them and you're not coercing them, right? You're just saying, "No, you said no? So that your no is no, and I accept that."

**Lenny Rachitsky** (00:44:01):
So it feels like part of the skill here is preparing, is knowing. Some people just say no and that's okay. That's part of the experience. Part of it is if there's this not yet component... We had Mihika Kapoor on the podcast. She has a PM at Figma and she had this really great approach to building new things within companies is just like everything to her is not yet and no is a not yet. And the way you phrased it is it could just be the way you asked. It could be, maybe they'll agree if you can figure out a better way to pitch the thing. Is there anything more you can add there about just this idea of it's not no forever?

**Kenneth Berger** (00:44:36):
Acceptance of the response is primarily an emotional regulation issue because once we get our emotions intact, it's just, is it yes or is it no? And if it's no, which it probably is, most of the time the world tells us no, then the question is, "All right, what can I learn from this? What am I going to try next?" And so when we're able to emotionally regulate, it's all very cut and dry, right? It's like, "Okay. Here's data to tell me what to try next."

**Kenneth Berger** (00:45:02):
And so really, 99% of the challenge tends to be all the feelings that come up for us when we hear no. Because We hate hearing no. It's so uncomfortable. And so part of the practice of getting good at asking for what we want is recognizing you're going to hear no all the time, and that's completely normal and fine, and it doesn't need to be something so scary or awful.

**Lenny Rachitsky** (00:45:23):
Easier said than done in real life. Is there an example of either a client of yours... I know you can't actually share specific details, but I'm just curious if there's an example that comes up of someone dealing with this and getting better at it, or your own career.

**Kenneth Berger** (00:45:38):
I gave a talk about this sort of right after it happened, but I was fired from Slack three different times, which I feel like has to be some kind of startup record. I don't know who would be the record-keeping body for this. But now 10 years on, I have different perspective, of course. And so this was almost exactly 10 years ago, spring of 2014 and I just gotten the job as the first PM at Slack. It was already the hottest thing out there. It was only a couple dozen employees.

**Kenneth Berger** (00:46:03):
I came in excited, but also a little insecure because I had just come off my breakup with my co-founder. I just wanted to put my head down and do a good job. I was engaged at the time, so Slack already knew I was going to be going away on a bachelor or backpacking trip. I have a wedding and honeymoon in the fall. And so I came in naive and overconfident of, "I've been a founder. I've worked on iconic products. I know how to do this. I'm a pro. I'm just going to go in and do the work."

**Kenneth Berger** (00:46:32):
So instead of getting really clear on what does success look like here or what's your culture or what are your expectations of me, I just went in and made my best guess and went for it. And lo and behold, turns out what I came in with, that supreme overconfidence was not what they wanted at all. They'd kind of been in the trenches reinventing from the game to Slack. They'd been through layoffs, really hard times together. So they wanted someone to come in humble and to earn their trust of this kind of core team that had been together for years.

**Kenneth Berger** (00:47:07):
I just didn't get any of that. I wasn't hearing that feedback. I wasn't hearing those nos, and I wasn't articulating what I wanted. What I wanted was really very basic. I just wanted to figure out how to do a good job, and I wanted to have a good relationship with the CEO because I was working for him. And you need to have a good relationship with your boss. But the problem was in the first firing anyway was I had not articulated those goals.

**Kenneth Berger** (00:47:36):
And so I shouldn't have been surprised when six weeks into my tenure at Slack, I came back from my backpacking trip with my bachelor buddies, and I had an email in my inbox saying, "Hey, you're fired. It seems like it's not working out. Let me know how you want to wrap it up." So as you can imagine, I freaked out. I loved this job, I love this company, so I profusely apologized. I said, "I'll do whatever it takes. I'm so sorry. I'm going to be committed to turn this around."

**Kenneth Berger** (00:48:07):
And so early stage startup turns out firing doesn't always stick. Monday morning, I had my job back. But obviously things were not the same as they'd been before because in the second era, what I wanted was sort of better articulated more clear, but all of a sudden that fear that had been under the surface, that insecurity was now very, very present every day because I was terrified of was I going to get fired? Was I going to not make the most of this opportunity? And so I went fully into people pleaser mode. And so that meant that even though what I desperately wanted was to have this good relationship was to be successful, build a great product. I had a year of one-on-ones with the CEO.

**Kenneth Berger** (00:48:52):
I never, never ever asked for what I wanted. I never said it out loud because I was scared. I was scared of what the consequences were. I knew there were a hundred PMs standing behind me ready to take my job if the CEO is ever a moment unhappy with me. I said, "No, I'm not going to take the risk. I'm too scared of what the consequences might be." And so I held all that fear and all those desires of, "I just want to do a great job. I want us to be awesome partners and build this amazing industry changing product."

**Kenneth Berger** (00:49:22):
I never said any of that stuff out loud. I just put my head down and I tried to obey. And so as you can imagine, this didn't work very well. I was feeling horrible day to day. I was terrified of this guy I was working for. And so again, I shouldn't have been surprised, but I was, when I got fired for the second time. It wasn't quite firing. But this time I'd come back from my honeymoon and I had a phone call on Monday that said, "Seems like product management is not working out for Slack. We're actually just going to get rid of product. You're going to be user research. It's going to be fine."

**Kenneth Berger** (00:49:56):
And for me, I love user research, but that was the beginning of my career. I was not interested in going back to that. What was fascinating was at that point, I was actually able to articulate what I wanted there and was willing to say it out loud. Because what I wanted was, "No, let's keep me in product. I've got an idea for how we can run it." So I wrote a proposal, I sent it around to the management team. Turns out, when you actually ask for what you want out loud, you're much more likely to get it.

**Kenneth Berger** (00:50:21):
And so within a week, this new plan had traction with the management team team and I had my old job back again. Everything was fine except of course it wasn't fine because now I was scared, but the stakes seemed really high, and this is where that deep imposter syndrome sit in. I was like, "Am I even any good at this? Should I even be in product management? Am I ever going to work in this industry again? Is this going to be my dark secret that I take to the grave that Stewart Butterfield fired me three times?"

**Kenneth Berger** (00:50:58):
I think what I couldn't be with in that moment was the no's, because I was getting no after no after no after no from Stewart and the rest of the management team saying, "What you're doing is not working for us, right? Your ask are not landing. You're not being effective in the way that you want to be effective." And because I wasn't able to hear those no's again, because to that emotional regulation standpoint, I couldn't handle the feelings of like, "Ugh, maybe what I'm doing is not good enough."

**Kenneth Berger** (00:51:26):
So instead of pointing the finger at myself, I pointed the finger at him. I said, "You know what? Actually this guy, he's not such a great manager. He's not so good at product. I'm the one who was on the ground with the users. I know what's right." Against all evidence to the contrary, by the way, is this product luminary, visionary, famous person.

**Kenneth Berger** (00:51:45):
So clearly not based on any facts, but it was an emotional issue of I couldn't deal with the reality of what I was doing was not working. And so again, because I was not articulating what I wanted, I was not asking for it and I certainly was not listening to the no's. I shouldn't have been surprised when finally the third time it came down, and this time it was serious because we had HR.

**Kenneth Berger** (00:52:09):
So it turns out once you hire HR, the firings are final. And so I only made it to a year at Slack and it was a year of just utter torture because I spent that year being fully out of integrity with myself. Never saying what I really wanted, how I really felt because it didn't feel safe. I was too scared. I kept it all inside. And it took me six months or a year even after that to really feel safe and okay again. It was a serious decompression time.

**Kenneth Berger** (00:52:39):
My wife and I had a baby during that time. I was on zero sleep. It was a rough, rough period. But the irony is that when I actually came out of that experience, the reality of it was extremely simple. I hadn't articulated what I wanted. I hadn't asked for what I wanted. I had not listened to the no's in response to my non-ask.

**Kenneth Berger** (00:53:02):
And so of course I was unhappy with the result. Why would I have expected anything different? I wasn't the victim. Stewart wasn't the villain. It was just ineffective asking. And so to me, especially because I was already on that path towards coaching, that lesson hit really hard in terms of how do we make this work more sustainable?

**Kenneth Berger** (00:53:24):
We stay in integrity with ourselves even when it's hard, even when it's scary, even when we don't know exactly what the outcome is going to be. And so that's really the story of how I became a coach, of seeing exactly how much I'd screwed up at Slack and seeing how much I had suffered and how much a lot of people suffer in these similar circumstances. All you have to do to turn it around is ask for what you want.

**Kenneth Berger** (00:53:45):
So this is why I'm so passionate about this stuff because it can sound so fluffy to say, "Oh, focus on integrity. Honor your desires. No, it's real life stuff of a year of suffering, of pain, of fear." I don't want other people to be going through that and that's why I'm so passionate about this stuff.

**Lenny Rachitsky** (00:54:08):
Wow, what a story. I love that it's kind of a microcosm of everything we've talked about. You've did all the things that you teach people to avoid.

**Kenneth Berger** (00:54:18):
Exactly.

**Lenny Rachitsky** (00:54:18):
And I think what's interesting is you went through these three phases. Interestingly, at the beginning, your first phase was you were not hearing the no's, but it was rooted in this confidence that you're a founder, you're awesome. They're so lucky to have you. I know what I'm doing, get out of my way. And then the third phase, you also, the issue there was you weren't hearing the no's, but it was more from fear of being fired again. And so it's interesting that there's these different reasons you're not hearing what people are actually saying.

**Kenneth Berger** (00:54:46):
Totally. Well, and to me, the first one is about articulation as well because I think that if in the beginning it articulated that, "Yeah, I'm confident, but actually I want to do a really good job and I want to have good relationships. So let me think about intentionally, how do I create those outcomes?" But because I hadn't articulated that's what I wanted, it didn't even occur to me like, "Oh yeah, I need to do some intentional relationship building, figure out some metrics for success."

**Kenneth Berger** (00:55:11):
It was an early stage startup. There wasn't a ton of sort of process or structure in place, suffice to say. And so if I wanted that, I needed to create it myself, but because I hadn't articulated that any of that was important to me, I just flew by the seat of my pants and it took failing to get some data to say, "Ooh, yeah, maybe I need to look at this more closely."

**Lenny Rachitsky** (00:55:31):
I imagine you've gone through this exercise many times, but say you were to do it again, what would you do differently and what do you think would've happened? Do you think you would've stayed there for many, many years, had a product at Slack at this point? Just imagining that reality, what would you have done differently? And then what would you have imagined have turned out?

**Kenneth Berger** (00:55:49):
Well, I mean obviously broadly, I would've asked for what I wanted and what I wanted was I wanted to do the best work of our life. I wanted to have a deep professional partner in the CEO and the rest of the product and management team. And I wanted to produce great work that people loved. And that was part of why I was attracted to the culture and the mission and the company. And so this is what's tricky is of course, that's what I would've done. Now, do I know what the outcome would've been?

**Kenneth Berger** (00:56:16):
No, I might've been fired even sooner. They might've said, "No, this is not working out. Let's just be done here." So that's what's tricky about this is it really isn't about the outcome. Of course, asking for what you want makes you more likely to get the outcome you want, but you don't do it for guarantee of a certain outcome because no one can promise you that. You do it so you can stay in integrity with yourself and not suffer through all this. Because at least then I would've said, "You know what? It didn't work out. At least I'm not sitting here suffering. I can get another job at another startup. It's not the end of the world."

**Kenneth Berger** (00:56:51):
And I think that the mistake we make is pretending that it is of saying, going into fight or flight and saying, "This is a severe existential threat to who I am and my safety in the world," versus being like, "I'm disappointed. I wish it had worked out, but it didn't."

**Lenny Rachitsky** (00:57:07):
That's a really profound point that this practice isn't necessarily to just have everything work out beautifully and to get the things you're looking for. It's to feel like you did, which you could have and to feel integrity with yourself that you did what you needed to do and you're not going to regret something down the road.

**Kenneth Berger** (00:57:29):
Indeed.

**Lenny Rachitsky** (00:57:31):
I'm going to take a quick tangent down the being the first PM route real quick. There's a lot of people that think about being the first PM at a startup join as the first PM. I imagine you work with people asking for advice along these lines. It's classically a very challenging role. Many people don't last. Many people follow your trajectory where it's like, "Oh, shit. What have I done?" Any advice for people that are a first PM at a company or startup or thinking about that role?" What can you tell them to help them be successful or at least not suffer?

**Kenneth Berger** (00:58:05):
To me, it really is about the relationship with the CEO or with the founders because that's the root of a lot of the issues that come out of that scenario because it's not always you. In my story, I think it was primarily about me, but I also work with a lot of founders who are going through really tough things. My clue to people who report to a founder is to say, "Imagine if you're confused about how your founder is behaving. Imagine that they're terrified all the time, and see if that makes their behavior more clear."

**Kenneth Berger** (00:58:38):
Because it is scary to be a founder. Everything is on your shoulders. And I think a lot of people do feel that sense of high stakes all the time. And so I think being real about that of what is the state that the person or the people you're working for are in and sort of working within that versus sort of pretending that it's something else or wishing that it were something else is the path to having a healthy relationship. Because if you don't have a healthy relationship with the person you're working for, you're not going to get anything done. You're not going to succeed in any meaningful way.

**Lenny Rachitsky** (00:59:10):
I love that framework of how to think about why a founder is behaving in a certain way. Just maybe a last following thread there is just what should people look for to help them understand if the founder and them are a good fit, if they're going to have a good time working with that founder? Is there anything just like questions they might ask or ways of operating that are useful to understand like, "Okay, I think I'll be okay with this founder in this company as the first PM or not.

**Kenneth Berger** (00:59:34):
I think it's a hard thing to generalize about, but to me it really is about understanding expectations. I guess this is a predictable coming from me, "But what do you really want? Because I think that often the founders put together a job description, but then they're faced with a real human being who has real human subtleties and things they're good at or not so good at." And so being very, very clear about expectations and of figuring out collaboratively a way to work together that's effective to me is there's no guarantees of course, but it gives you a more sure path to having a productive relationship.

**Kenneth Berger** (01:00:13):
It's actually something that I recommend to a lot of founders for maybe their first 10 or 15, or 20 employees of just have a relationship design conversation with each of them when they're first hired. Because I think a lot of us come in naive the way I did, assuming, "Oh yeah, I'm just going to come in and do my thing the way I've always done it. It's going to be fine." Versus coming in and saying, "I actually don't know how I'm going to operate at this company. I have range like anyone has range, and I don't know what this company needs and who else is here and sort of what my role and what my place is going to be within these other people. And so by really understanding that intentionally and not from a place of performance management, you're already doing this poorly, you're in big trouble. But what is the best way to work together given who we have now and what we want and what we need? Let's figure it out.

**Lenny Rachitsky** (01:01:01):
Coming back to our core topic, is there anything that we didn't cover, anything that I should have asked you about the skill, the art of asking for what you want? Anything else you want to leave listeners with?

**Kenneth Berger** (01:01:12):
I do want to mention something that I hear a lot from founders when I talk about the piece of working through resistance because I think a lot of them say, "Oh, you want me to let go of fear and focus on what I want? Well, I mean, I've been running from fear my whole career. That's how I'm so hard-working and I'm so smart is I'm always afraid I'm not good enough."

**Kenneth Berger** (01:01:34):
Am I going to be able to do this job without fear hounding me every step of the way? I just remember the first time I heard this, it broke my heart, and now I've heard it dozens of times I'd say. So I mean, it really is. I think it's a belief that sits deep in the hearts of a lot of us high achieving Silicon Valley tech types of, "My fear of not being good enough is what drives me to be great."

**Kenneth Berger** (01:02:00):
And I just want to come out here and say there's other ways to motivate. You can motivate based on joy, based on vision, based on your inspiration in this vision of what you want. I think a lot of folks I talk to are skeptical understandably because operated a different way their whole life and all I can really say is try it. Try following an inspiring vision that's really meaningful to you and just see what it's like to not be living in fear all the time because it is a big difference and it's really meaningful. It matters a lot.

**Lenny Rachitsky** (01:02:35):
So is the fear there that if they ask for what they want, they'll get what they want and they let go of this drive to prove themselves? And is that the fear? How is it that they move away from that need to prove themselves?

**Kenneth Berger** (01:02:51):
Well, I mean that's a longer story. I would say managing our own fear as a sort of lifelong practice. I'm not going to claim I'm anywhere near done with it. But I guess I'd just say that I think part of the big shift I see in personal development for people I work with is from saying, "Oh, no, my fear is good. I need it. It's keeping me safe."

**Kenneth Berger** (01:03:16):
To saying, "Fear is for when there's a tiger chasing you and there's no tiger chasing me." I'm sitting in my office in a desk chair on a zoom call. There's no real danger here. And so fear is not particularly functional. And so when they start realizing that, the practice becomes, "Oh yeah, I'm feeling afraid." But I'm reminding myself there's not a tiger in the room. If I really want to get things done, achieve my goals, I need to focus on vision on what I want to achieve in the world, not on avoiding all these fears. So that's the short of it.

**Lenny Rachitsky** (01:03:49):
Amazing. It reminds me, we have a chat... I had a chat with Matt Mochari, and we spent a bunch of time on dealing with fear and overcoming fear. So folks want to dig deeper there. They could check out that episode. Just maybe one more question before we get to our very exciting lightning round. I want to take us to Contrarian Corner, classic contrarian corner. I'm curious if there's anything that you have a contrarian opinion about, something that you believe that most other people don't.

**Kenneth Berger** (01:04:16):
For me, I'm not a big believer in discipline that I think some folks come to coaching looking for a drill sergeant and say, "All right. Shout at me and tell me to do better." And I start to say, "That's not how I operate." Because it's not the discipline doesn't work, but it's like people-pleasing. It's a short-term coping strategy. Discipline will get you in the gym for a week, but it's not going to get you in the gym for a year. The people who are in the gym for a year are doing it because they want to.

**Kenneth Berger** (01:04:49):
There's actually something that's motivating for them in that. It's not just, "Oh, I hate this, but I'm going to go anyway." And so I try to be really clear with people about that, that I'm not going to be the drill sergeant because it's unsustainable. Someone shouting at you is not going to get you moving towards what you want in life over multiple years. It's days or weeks or even hours thing. And so I really look for a higher bar to say, "Let's look for true long-term sustainable motivation," which means relying on vision, pursuing what you want.

**Lenny Rachitsky** (01:05:25):
I love that it all ties back to knowing what you want, asking for what you want, and then dealing with the answers that you get.

**Kenneth Berger** (01:05:30):
I am a broken record admittedly.

**Lenny Rachitsky** (01:05:33):
Amazing. Kenneth, is there anything else you wanted to share or leave listeners with before we get to our very exciting lightning round?

**Kenneth Berger** (01:05:40):
No, but just thank you for letting me share this stuff. It really is my life's work and I'm very passionate about it and I hope it's helpful for people. I'm going to be writing more about it on LinkedIn.

**Lenny Rachitsky** (01:05:51):
Okay, amazing. We'll point people there. With that, we've reached our very exciting lightning round. Are you ready?

**Kenneth Berger** (01:05:57):
I'm ready. Let's do it.

**Lenny Rachitsky** (01:05:58):
First question, what are two or three books that you've recommended most to other people?

**Kenneth Berger** (01:06:03):
Well, I already mentioned Radical Candor. I think that is for sure a modern classic and I think that whole idea of challenging directly, but caring personally is very much aligned with what I'm talking about, right? Because you need the relationships and you need to actually speak your truth. So I love Kim Scott's writing on that stuff.

**Lenny Rachitsky** (01:06:25):
We had a Kim Scott on the podcast. Folks want to dig deeper there. We'll link to that episode. I'll let you keep going. Sorry for the interruption.

**Kenneth Berger** (01:06:31):
Yeah. I mean I mentioned before, but I actually took Jonny Miller's Nervous System Mastery course. I just wrapped up. So you've had lots of great personal professional development thinkers on the podcast, so thank you for introducing me to them.

**Lenny Rachitsky** (01:06:47):
I'm so happy to hear that. We'll link to that episode as well. I love that. What a circle of life we've got here, guests following other guests, taking their courses, joining the podcast. What a happy world.

**Kenneth Berger** (01:06:58):
Yeah, indeed.

**Lenny Rachitsky** (01:07:00):
Okay. Any other books before we move on?

**Kenneth Berger** (01:07:02):
I also love the 15 Commitments of Conscious Leadership, so I'm pretty sure other guests have mentioned that as well. But to me, part of why I like that is that I think a lot of personal development books are not very directive. They say, "Oh, just dig deeply and find your truth." And while there is value to that, of course, I think sometimes it's nice to have some direction of, "Here's 15 things that generally your life's going to be better if you do them." And so to me, it's a nice balance of embracing the really deep stuff of how to live a good life and be effective in the world and be really directive. Try this stuff. It works.

**Lenny Rachitsky** (01:07:38):
Do you have a favorite recent movie or TV show you've really enjoyed?

**Kenneth Berger** (01:07:43):
I'm a recent tennis fanatic, so it was one of the things I picked up during the pandemic, so I really enjoyed Netflix's Breakpoint because it's a documentary on the best tennis players in the world. I just find it so... I don't know. It is just beautiful seeing how everyone is the same because all these people, they all know all the strokes perfectly. They're technically perfect in pretty much every way. And so it really is mental.

**Kenneth Berger** (01:08:10):
For those folks, it is about working through resistance as well. When they have a that says, "Oh, I'm behind. The other person is better. I'm not going to be able to do this." Are they believing that or are they working through that resistance and saying, "That's just a story I have. I actually don't know what's going to happen, but I'm going to try to win."

**Lenny Rachitsky** (01:08:29):
I love that you see coaching opportunities in everything even entertainment.

**Kenneth Berger** (01:08:34):
I mean actually speaking of that, I mean, it's almost too on the nose, but there's this movie living from a couple of years ago. This British actor is this sort of tough, old sort of stodgy government office manager, and he gets diagnosed with cancer. And he has this real transformation where he thinks about, "God, I've just been sitting in an office filing papers my whole life. What do I actually want to do with the last months of my life?" And he builds this playground for children, and that's actually his legacy. Sorry, actually, spoiler alert. Whoops, should've.

**Lenny Rachitsky** (01:09:12):
You mentioned tennis and you mentioned British people. I will actually be at Wimbledon this year in London with my dad in July and we're going to host a meetup there while I'm there just for anyone listening right now, just to give you a heads up.

**Kenneth Berger** (01:09:26):
Awesome.

**Lenny Rachitsky** (01:09:27):
How fun is that going to be? Okay, next question. Do you have a favorite product you've recently discovered that you really love?

**Kenneth Berger** (01:09:33):
Well, it's funny. I used to be a big wine aficionado, and I think as with many of us, I am discovering I feel better with less alcohol in my life. And so one of the things I've been picking up is oolong tea. I've got a little cup of Taiwanese [foreign language 01:09:51] in front of me, and I feel like it's all the nerdery that I put into wine of regions, and varietals, and history and processing, but it's actually good for me. It's like full of antioxidants and makes me more focused and I can drink it during the day. I've been totally going down a nerdy tea rabbit hole, and I recommend it. Taiwanese mountain teas especially.

**Lenny Rachitsky** (01:10:16):
I got to give me some of that. I always have tea here when I'm doing these podcasts. I'm a less sophisticated tea drinker. I just go with Earl Grey, but a really nice Earl Grey, and so I'm going to have to buy some of this. Do you have a place in a brand you recommend most?

**Kenneth Berger** (01:10:30):
There's lots of great stores online. You can check out teafromtaiwan.com. That's a good one.

**Lenny Rachitsky** (01:10:36):
They're going to get a bunch of traffic. They're like, "What the hell just happened?" Teafromtaiwan.com amazing. Do you have a favorite life motto that you often come back to, find useful, share with friends or family and work around life?

**Kenneth Berger** (01:10:52):
I mean, I'm pretty sure you can guess, Lenny.

**Lenny Rachitsky** (01:10:54):
I wonder what it might be. I wonder what it might be.

**Kenneth Berger** (01:11:00):
So this is actually part of why I started writing this book, is because my friends were probably annoyed with me telling them, "Have you asked for what you wanted? Ask for what you want." Because yeah, it's best advice I have is to ask for what you want.

**Lenny Rachitsky** (01:11:15):
It all just comes back to that final question. We've been talking a lot about asking for what you want. Kenneth Berger, what do you want?

**Kenneth Berger** (01:11:25):
Ooh. All right. Well, I think for me, Lenny, you are already an industry luminary with thousands of followers. I am interested in sharing more of these ideas. So if y'all would come follow me on LinkedIn and subscribe to my newsletter, I'm going to be exploring these ideas and sharing more of this stuff because I just am so passionate about it. I'd love if you'd come and join me in that journey, bring questions and ideas, and I'd love to talk about this stuff because I just find it endlessly interesting.

**Lenny Rachitsky** (01:12:00):
But you're working on a book along these lines at some point that will come out, right?

**Kenneth Berger** (01:12:03):
That's right, that's right. I am working on it in book form, but part of what I've been doing is I realize I want to work on it in community. Speaking of asking for what you want, I mean, for me, it's not just about my vision and my framing, but I'm a coach. I'm not just about big ideas. I'm about making a difference for my clients. And so I realize, if I really want to make a difference with people, I need... It's like a product, I need to get out in the world and test out these ideas and see what lands with people and what's effective for them and what works, and hear the stories and really get into it. So that's kind of why I've been putting myself more out there.

**Lenny Rachitsky** (01:12:39):
Amazing. So along those lines, two last questions. Where can folks actually find you online and follow the stuff that you're writing and how can listeners be useful to you?

**Kenneth Berger** (01:12:47):
So you can find me on LinkedIn. I'm Kenneth Berger, B-E-R-G-E-R. So please follow me there. Subscribe to the Ask for What You Want newsletter. And you can check out my website, kberger.com, K-B-E-R-G-E-R.

**Lenny Rachitsky** (01:13:01):
Kberger.com. Kenneth, you're amazing. Thank you so much for sharing so much wisdom with us. I think we've helped a lot of people. Thank you for being here.

**Kenneth Berger** (01:13:09):
Thank you.

**Lenny Rachitsky** (01:13:10):
Bye, everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcast, Spotify or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcasts.com. See you in the next episode.

---

## [13/21] Unorthodox frameworks for growing your product, career, and impact | Bangaly Kaba (YouTube, Instagram, Facebook, Instacart)

**Lenny Rachitsky** (00:00:00):
You're early growth PM at Facebook. You're head of growth at Instagram, you're VP of product at Instacart. You're now director of product management at YouTube and I've heard that you've had a lot of impact on a lot of different cultures.

**Bangaly Kaba** (00:00:10):
I found this framework travels with me. It's got these five components to it, vision, skills, incentives, resources, action plan, and you need all of those to have change. And then within those buckets you've got to figure out what are the right levers that you need to pull? What are the things that are missing?

**Lenny Rachitsky** (00:00:26):
You're really big on something you call understand work?

**Bangaly Kaba** (00:00:29):
What I call the anti-paren of what we want to do. Someone says, "Hey, you know what? This would be great to build." And you go pull data to go justify why that would be great to build. Call that identify, justify, execute. First you have to really understand from first principles what is actually going on. So understand, identify, execute.

**Lenny Rachitsky** (00:00:45):
You wrote this legendary blog post called How to Choose Where to Work and What to work on.

**Bangaly Kaba** (00:00:50):
There's impact that you're really trying to drop and the impact is only achievable by looking at set of variables related to the environment, the set of variables related to your skills.

**Lenny Rachitsky** (00:01:02):
Today's guest is Bengaly Kaba. Bengaly was an early growth PM at Facebook where he was responsible for how people make friends on Facebook. He was Head of Growth at Instagram where he helped scale a platform to over 1 billion users. He was also VP of product at Instacart. He's also worked with tons of amazing startups as a Growth Advisor, including Twitter. He's now Director of Product Management at YouTube where from what I hear, he's already made a huge dent. This conversation went long because there was so much gold to be extracted from Bengaly's head and I could not stop myself from learning everything I could in our time together. This episode is for anyone looking to level up their product and growth chops or also just do better in your career.

**Lenny Rachitsky** (00:01:42):
We dig into his framework for how to choose where to work and what to work on. The importance of spending time on something he calls understand work, his adjacent user theory and how it can help you drive growth. A bunch of advice for coaching product managers and managers of managers, tons of lessons and stories from his time at Instagram, Facebook and YouTube and so much more.

**Bangaly Kaba** (00:02:22):
Thanks for having me. Excited to be here.

**Lenny Rachitsky** (00:02:24):
So many previous guests have recommended that I get you on this podcast, which I already knew. Funny story, when I first launched this podcast, I asked you to be on it. You're like, "Sure." And I included you on my launch poster of all the guests that are going to be on the podcast, and then you decided to take on a very hard work and jobs that kept you from having time, and so I'm really excited that we're finally doing this.

**Bangaly Kaba** (00:02:47):
I'm glad we're finally making a reality. Sorry about that, Lenny.

**Lenny Rachitsky** (00:02:50):
No sweat. You actually mentioned to me that somebody came up to you in Zurich and was like, "I'm excited for you on Lenny's podcast."

**Bangaly Kaba** (00:02:57):
Yeah, it was crazy. I was visiting a team that I managed there about to get back on a plane to go back to SFO and just standing there doing some work, minding my business and I get on the plane, I'm talking to a colleague and someone comes up to me, I don't think I've ever seen them before, and said, "Hey, sorry to interrupt you. I'm so excited for your podcast with Lenny. I can't wait for it." And then just walks away and I was like, "What is going on right now? Lenny is a big deal. I don't even know how this person knows me." And that's how I knew Lenny, that I had to reschedule with you because I was like, if people are coming up to me and telling me that they're excited, I was like, there is a lot of anticipation. And Lenny, the power of your reach now is legit.

**Lenny Rachitsky** (00:03:37):
That is hilarious. That's a new strategy for me to get people on the podcast just say they're going to be on the podcast and then the pressure will start.

**Bangaly Kaba** (00:03:46):
Oh yeah, I mean, totally.

**Lenny Rachitsky** (00:03:46):
Okay, so there's two broad topics that I want to spend our time on today. I want to talk about career advice and growth advice and they're both essentially growth oriented, one's career growth, one is product growth. How does that sound?

**Bangaly Kaba** (00:03:57):
Sounds perfect.

**Lenny Rachitsky** (00:03:58):
**Bangaly Kaba** (00:07:18):
Yeah, that blog post that you're referring to actually came out of a personal struggle that I had when I was at Facebook and trying to decide what my next move should be. I felt like I was kind of stuck. I felt like I was working harder but not seeing incremental benefit to the work that I was doing. And I knew that I needed a change, but emotionally I understood that, but I couldn't really have an objective way of thinking about it. And so I really pushed myself to figure out what is actually going on with my situation and how do I create a way that I can rely on objectively to understand what's actually going on? And so I looked at that situation and I wrote that post and the framework is really that there's impact that you're really trying to drive and that is the thing that is the most important. And the impact is only achievable by looking at two sets of variables, a set of variables related to the environment, a set of variables related to your skills, and really breaking down each and understanding what's happening in the environment bit by bit and what's happening with your skills and where are you hindered structurally within the environment? Where are your skills kind of lacking and what do you have control over? And using that whole kind of output, that framework to decide what makes the most sense.

**Lenny Rachitsky** (00:08:40):
Why is impact the key output of this equation? I think for a lot of people that isn't necessarily the intuitive variable that they think is important to focus on. Why is that so important in your experience?

**Bangaly Kaba** (00:08:51):
Yeah, I mean I didn't really know how to think about what the right thing to optimize for was initially, and I realized that it's not compensation. Compensation is a reflection of the input, the impact that you're having, and you're leveling how [inaudible 00:09:12] you are, how much scope you have is a derivative of how much impact you're driving. The more impact you're driving at your company, the more people feel like you can operate independently, you can drive real results the more that scope they'll give you. So really impact became the thing to optimize for. It is the import and compensation becomes an output based on that.

**Lenny Rachitsky** (00:09:32):
I think this is a really important point that is easy to miss and this is what I always tell people when they're looking for ways to get promoted and do well in companies, just find ways to have more impact. Can you maybe make it even more concrete? What does impact mean to you when you talk about impact?

**Bangaly Kaba** (00:09:46):
Yeah, I mean, so impact can be a lot of things, but I think for a product manager for example, it's really one, helping to drive extreme clarity about where the problems with the product, where there's opportunities and what is the right focus and prioritization? That is actually a form of impact. Just creating the clarity that people need to understand and believe in the investment. The reason why I name this and it feels a little counterintuitive is that the more senior you get, the more there are questions of are we even investing in the right place, right? Is this area, is this team, is this org the right investment? And so being able to even create the clarity that there is opportunity, it is the right thing to do, it is strategically and structurally important, is a form of impact. And then actually delivering on that impact, showing that you can make progress quickly, that you can deliver fast lane wins as Casey Winters would say, or medium and slow wins and then actually showing that you can do this again and again is how you actually validate the impact that you can see where the opportunity is and what's going on.

**Lenny Rachitsky** (00:10:53):
Awesome. Okay. So this equation is impact equals environment type skills. Can you talk a bit about how to work on these two elements?

**Bangaly Kaba** (00:11:01):
So the environment was the one to me, that I think is most people overlook and I overlooked when I was first thinking about this. Environment in this case, I think I kind of discreetly named a few things. One is your manager, then there's the resources. So what kind of team do you have? Is your team staffed appropriately? Do you have the right P&L, whatever budget to get the things done that you need? Then there's a scope, what is in your remit versus not in your remit? Because if you don't have enough scope, then you can't actually focus on the things that are most important. The team itself, the skills, relative skills of the team, your compensation in some ways is part of the environment because if you're not compensated fairly, you don't believe you are, then it's hard to feel like the work that you're doing is meaningful.

**Bangaly Kaba** (00:11:47):
And then there is the last part is the company culture. So to what extent is the culture a place where you feel supported, included, you feel like you can do your best work? And so you are really looking at each one of these variables, and I look at this every year and I say, "How is my manager doing?" How do I think about my manager? How do I think about the resources I have, the scope, the team, the conversation, the company culture and to what extent? And I score them, I score them as a 1 means it's kind of neutral. A 2 means that I'm greatly benefiting from this situation and something even closer to zero is I'm not in a good place. So I assign a score in quarter point increments, 0.25, 0.5, 0.751 up to 2 every year. And I really ask myself, what is the state of each one of these and to what extent do I believe that they can and will change?

**Lenny Rachitsky** (00:12:40):
Wow, I love this. So there's this formula, impact equals environment times skills. Within environment there's these five variables and they add up to 10?

**Bangaly Kaba** (00:12:49):
Yeah.

**Lenny Rachitsky** (00:12:50):
If they each give you two points. That's so cool. Okay, so the five, just to be clear, your manager, the resources you have, is teams number three?

**Bangaly Kaba** (00:12:58):
Mm-hmm.

**Lenny Rachitsky** (00:12:59):
Compensation and then the culture of the team?

**Bangaly Kaba** (00:13:02):
And then your scope as well.

**Lenny Rachitsky** (00:13:03):
And then scope. Okay, got it.

**Bangaly Kaba** (00:13:04):
It's actually six, yeah.

**Lenny Rachitsky** (00:13:05):
Oh, there's six. Okay, got it. So it's up to 12. So the idea here is you score each of these of how you're feeling, how the environment is contributing to the impact that you're delivering. And if one of these is not a great score, that's an opportunity to improve your impact, which will improve your career?

**Bangaly Kaba** (00:13:26):
That's right, and you have to really be honest. I think part of what makes this framework so powerful for me at least, is that it helps you to be honest around what are the things that are limiting your ability to have impact and for your skills to really land? And to what extent do you believe that you can help to change or try to influence the change in the environment? Because no one wants to be in a place where there's a bad culture and the culture is a bad fit for you, but if you're not really thinking about it objectively and naming that, or maybe it's the culture of the team that is not the right place for you, so it really forces you to evaluate what's going on around you that's limiting your impact.

**Lenny Rachitsky** (00:14:05):
Is there an example from your career you could share where one of these was not where it needed to be and either helped change it or realize you had to get out of there?

**Bangaly Kaba** (00:14:14):
When I was actually at Facebook, I was running the team that does all the people recommendations and it was a great team. I actually had a massive, massive team. I had 30 engineers I was working with, 15 machine learning engineers and 15 front end and back end engineers. And so great team, incredible team, lot of resources, ton of scope. In some ways it was too much scope and to me that was problematic because I really needed to build out, I felt like multiple teams to support the work that we were doing or to break it up; because it was, I mean the pace, the velocity you can imagine at Facebook was incredible. And I felt like between all of the work that we needed to do, the amount of engineering capacity that we had and the amount that was on the table, I felt like I wasn't resourced in a way where I felt like I could actually deliver on all of the things that were necessary without burning myself out. And I felt like I was burning myself out and I couldn't really see the forest through the trees because there was so much to do.

**Bangaly Kaba** (00:15:20):
And so that was a situation that I didn't really understand how to navigate at that point in my career. And there were two or three manager changes concurrently, and so I didn't have a manager to lean on that I felt like I had a relationship with to help me to navigate that space. And I felt like the scope was actually too much for what needed to be done, and so I needed to find a better kind of fit for me. There was nothing wrong with the team, it was a great learning environment, but it was the confluence of scope and manager and all happening at once just wasn't a good fit for me.

**Lenny Rachitsky** (00:15:53):
A lot of people are in these situations where they'd say they go through this score, they identify I have way too little scope, way too much scope like you described, and there's always this question of can I actually make a change or is this just not, am I not in a position? Especially, I see product managers, there's just always a lot of, I can't actually change anything. What do you often tell people around this that just feel like there's nothing I can do here and my manager sucks, what am I going to do?

**Bangaly Kaba** (00:16:17):
Well, I do think one of the things that I recognize is your manager. Not all of these variables is created equal and the manager is the most important variable in the environment, because a great manager who is empathetic, who is aware of what's going on, who is a great communicator, has the ability to move the chess pieces around and to fix some of these for you either immediately or in time. There's no one other than your manager who can really help to increase your scope or to help make sure that the team has the right pieces in place, or dial in some of the issues that you might see in culture.

**Bangaly Kaba** (00:16:56):
And so that is why people say they don't leave a job, they leave a manager because the manager is the one that has a lot of the power to fix a lot of these variables. And so really the question becomes like to what extent have you been able to clearly articulate what are the... And dispassionately articulate, what are the challenges that you're having, you're seeing across some of these variables with your manager? Help them to tie it back to how it's impacting your work and see if they can help you to create a plan to alleviate some of these things.

**Lenny Rachitsky** (00:17:28):
That's super interesting. Then your experience with the manager is kind of the core of a lot of these variables. Is there anything you recommend to people if their managers is not someone they like, is it just try to find a new manager or potentially leave?

**Bangaly Kaba** (00:17:39):
You're never going to always like your manager, right? That's not the... The goal isn't to like your manager. Ideally, you respect them and they respect you, you feel like there's things that you can learn from them. Finding a new manager is always an option, but I guess sometimes the real question is, is actually spending time to try to understand what is your manager optimizing? A lot of times I think there is a big disconnect between an IC focusing on their discrete area and try to optimize for local maxima, versus understanding, okay, my manager's thinking about these things and this is how I fit in, and understanding maybe they have a gap to understanding why your area is important. Or maybe there's stuff that's on your manager's plate that is actually adjacent to your remit that if you understood that they were optimizing for, you can take that on and you would find more synergies with what they're trying to do.

**Lenny Rachitsky** (00:18:28):
I love that advice. Let's talk about the other side of this equation. We've talked about environment, let's talk about skills. What do you advise there for folks that want to improve their skills?

**Bangaly Kaba** (00:18:37):
The skills part is really, really big and it's something that requires I think, consistent evolution of your own abilities. And so I broke it out in that blog post kind of communication, your ability to influence your leadership, strategic thinking and then execution, actually getting things done. The communication above these, again, not all of these are created equal. I think communication is the one that tends to be the most impactful. And you see this in a lot of ways. You see this for people who are poor executors but incredible communicators and they seem to continue to rise and rise because they can tell a great story, but when you look under the covers, there's nothing there. There's no substance there.

**Bangaly Kaba** (00:19:17):
So communication for better or worse is one of the most important things. But building out your skills I think is really just kind of a, it is an interesting time to be in product and to be in tech right now because you have so many more ways to build out your skills than what previously existed. Just so many incredible blog posts like your podcasts and blogs, there's so many incredible people who've come on here who tell you things like how to go to market, how to think about B2B SaaS and metrics. And so listening to you, reading Ben Thompson, understanding his mental models, if you go to look at Elena Verner or whoever, there's so many thought leaders who are out there.

**Bangaly Kaba** (00:19:56):
So I think being a voracious reader is really, really critical because it helps to build your toolkit and you need arrows in your quiver to really understand how to think about the right framework and the right mentor at the right time.

**Bangaly Kaba** (00:20:09):
One thing I also tell people is people think about mentorship as like, I have a mentor, Lenny is my mentor, or John is my mentor. I tell them, it's actually better to have a stable of mentors. You want to have three or four. And ideally, what you do is you meet with each one of them once a month on a different Friday of the month. And so you might have three or four people on every Friday you're meeting with someone different. And the reason why this is so important is because if you, Lenny, are a mentor to me and you're busy one Friday and we only meet once a month now I don't have anyone to talk to for two months. And you're going through a lot of things and you're not really able to bounce ideas, or build skills or learn how influence others, but if you have three or four mentors, you have someone different to talk to every week. And if one or two of them cancel, you still have two people to talk to that month and you still can continue to grow and to build your thinking.

**Bangaly Kaba** (00:21:01):
So that's something I always recommend. And then the last thing I actually talk about is, when it comes to execution, I think people don't, especially product managers, don't do enough of watching and learning from others. There's an art and a science to product management. And in a lot of ways I come from a background of education and in a lot of ways in product management, it's very similar. You want to watch how well the people hone their craft, how they deliver, how they lead teams and kind of steal things from them. Figure out, well, wow, Lenny did this really, really well when he was at Airbnb. It was really incredible. I'm going to take that. I'm going to take how he runs that team, or how he landed that framework, or how he communicated this message and note it and use it in my own toolkit later on. And so if you're really a student of product, you can't just be a student of theory, you've got to be a student of practice too, meaning you're going and you're looking, it's like, "Hey, I'd love to sit in your team meetings. Can I come watch? Or your PM meetings or your leadership meetings." And you are really like doing that for the sake of learning is really, really incredible. And that's some of the ways I talk about building skills.

**Lenny Rachitsky** (00:22:05):
Is there an example of that latter lesson that you learned from someone that comes to mind of watching someone and like, oh, I'm going to do that.

**Bangaly Kaba** (00:22:13):
Earlier in my career, when I first got to Instagram, I wasn't the first Growth PM, but I was one of the first and a guy who was there before me, his name was Georgia Lee, he actually stood up the growth team and ended up leaving six months right after I joined. But I watched, George was a really good listener. He had just a really incredible ability to be in a room and hear what was going on, to recast it back and make sure that everyone felt good about where we were and what was being said and the path forward, and really crystallizing the action items and also how people felt about what the next steps were. And walking out of that meeting, it felt like he always had buy-in and clarity and was helpful to build trust. You can see him almost winning trust in every moment of that meeting. And that was something that I really admired, and learned, and kind sought to emulate later on in my career.

**Lenny Rachitsky** (00:23:15):
That's an awesome example. It comes back to the skill of communication that you talked about, just the power becoming really good at that. And this is such a simple skill you just described, is just recapping, here's what we talked about. Here's what we're going to do. Here's the decisions we made. Here's action items. It's not actually difficult, it's just-

**Bangaly Kaba** (00:23:30):
It's not, actually. But what was magical about the way he did it. It's like he would name people and their contributions and show how all of this came together into what is the path forward.

**Lenny Rachitsky** (00:23:41):
That is amazing.

**Bangaly Kaba** (00:23:41):
And it's the communication, but it's also the other side. It's the other coin, the side of communication, which is eliciting to figure out how you communicate back to others.

**Lenny Rachitsky** (00:23:49):
So good. Following up on something else you talked about, which is mentors. Anytime someone talks about finding mentors, everyone's always, how do I find a mentor? What advice do you share with folks of how to find a mentor to help? You say once a week or once a month?

**Bangaly Kaba** (00:24:03):
Where I see people find the most success is they ask. They tell people what they're working on or what challenges they have and they say, "Do you know someone who I might be able to learn from who has done this or has good thinking about this recently?" So instead of just going to someone saying, "Hey, can you be a mentor?" Coming to me and say, "Hey, Bengaly, I'm actually trying to figure out how do I change the way this team operates because we need to go from this model to that model, but here's some of the challenges. So do you know someone who's actually really good at changing the way teams work or really good at communicating a new vision that I can talk to?"

**Bangaly Kaba** (00:24:40):
And so that I think is really important because what you do is you're creating a seed, and the seed is there's a triad and you have the person who's looking for the mentor. You have the recommender, the recommender, and then you have the potential mentor. And the recommender is basically saying, "Here, there's common purpose between the two of you and I can see it, and I think this is important, so I want you all to come together." And that triad in that moment creates a higher affinity, highly likelihood that the person who needs the help and the person who you're connecting them with are going to see mutual benefit from one another. And I think I find that just doing that and seeding that and being really focused on what the opportunity or the challenge is, tends to lead to better connections as opposed to just reaching out and saying, "Hey, I like your style. Will you be my mentor?"

**Lenny Rachitsky** (00:25:30):
So essentially share with folks you trust, here's what I'm working on. See if they recommend someone that could help you with that specific skill versus assuming that there's this person that can help you with this skill?

**Bangaly Kaba** (00:25:40):
That's right.

**Lenny Rachitsky** (00:25:41):
I love it. Going back to your advice on career, something that you wrote about in your post plus folks have told me you're really big on, is this something you call understand work? Does that ring a bell?

**Bangaly Kaba** (00:25:53):
Yes, it does.

**Lenny Rachitsky** (00:25:53):
Okay. Talk about that and why that's important?

**Bangaly Kaba** (00:25:56):
I certainly cannot take credit for understand work. This is part of an old Facebook framework of understand, identify, execute. What I-

**Bangaly Kaba** (00:26:00):
Facebook framework of understand, identify, execute. What I probably will say is I guess I've been the shepherd for understand work in other companies. I've taken it from my time at Facebook and Relink Institute or rigorously at Instagram, then at Instacart and when I helped with Twitter, now at YouTube. The way I like to talk about it with my teams is that first I tell a story actually, and the story is we've all had a moment where we have worked on something with a team, super excited, finally it launches and we go out to dinner and we celebrate. And we're celebrating, everyone's juiced. It's great night. You go back to the office the next day and you look at the metrics and the metrics are flat and everyone's a little bummed. Why did this happen? Right. Why are the metrics flat? What happened? We worked so hard.

**Bangaly Kaba** (00:26:49):
And ultimately when you unpack it, you realize that you built something that you thought was going to be a good idea, but you really didn't understand a lot of key components of what people really needed, what pain points really existed, or what were the alternatives and what the real value of those alternatives were in the market, or exactly how the product needed to work, what the flywheel or what the experience needed to be. And so that is what I call the anti-pattern of what we want to do and I call that identify, justify, execute. Right. Where you identify something, someone says, "Hey, you know what? This would be great to build." And you identify that, then you go pull data to go justify why that would be great to build and then you sink an ungodly amount of time working on it in order to make it work, but it ultimately doesn't succeed.

**Bangaly Kaba** (00:27:36):
And that is the anti-pattern to what is kind of like the Facebook kind of way of thinking, which is understand, identify, execute, right? So first you have to really understand from first principles what is actually going on. So when we talk about understand work, there's a few ways to think about it. One is, it is an intentional affordance in your execution to do the work that helps you to de-risk a project and to learn what's going on. When I say an intentional affordance, meaning you put it down like Lenny is going to work on this thing. Right. Lenny as a product manager is going to write a strategy. Janice as a designer is going to design a prototype, whatever the thing is, and you put it down as actual an item as opposed to assuming it's going to happen in the background. We don't make an affordance for understand work, then the work doesn't get done and everyone's just sprinting on execution.

**Bangaly Kaba** (00:28:27):
And so it's a planned intentional time to the team's bandwidth to figure out what is it that we need to do to understand what's happening. And so for example at Instagram we did a lot of understand work of what makes for a good connection? Right. How do we want to think about that? How do we want to make sure that we're actually growing a graph, a social graph that makes sense? And so I might work with data science to do understand work, to pull a funnel and look at the different types of connections for different types of users and make it make sense. Right. And engineering might do understand work to instrument logging to make sure that we have the data that we need in order to tell the story. And so you're doing this understand work to basically better understand the gaps in knowledge. What's also really interesting is that understand work helps you to clarify what is a root cause, or what is a job to be done, or what is the right use case?

**Bangaly Kaba** (00:29:25):
And because the team adopts this mentality, it becomes this forcing function for execution. So when someone says, "You know what we should build? We should build this." You have a team that's enabled and empowered to say, "That's a good idea, but we don't actually understand these three things before we start working on that. So maybe we should do understand work to make sure that that is actually the right idea." Right. And so what you end up getting by embracing this concept is two things. You get parallel paths of work. So every sprint, let's say you do a three-week sprint or a three-month roadmap, you're executing on the things that you have a lot of conviction around and you're also doing understand work in parallel. And so at the end of the sprint you have learnings from what you executed. Wow, that test or that launch worked really well. We should double down. Or Wow, that test or launch didn't work. Here's how we should pivot. And you have insights from the understand work and you use both of those to plan the next sprints or roadmap. Right.

**Bangaly Kaba** (00:30:29):
And so because you have this parallel path, you end up getting this velocity multiplier over time. Right. So the next sprint, and the third sprint, and the fourth sprint, every subsequent sprint you de-risk new ideas, you've gotten more clarity. And so you do more execution, you do better execution and you move faster and the things you ship, you have a higher win rate on the things you ship, right? And your shipping, I remember when I left Instagram, this is many years ago, but we had 15 teams and we might've been running 12 to 20 experiments a quarter a team, and I would say probably 60 to 70% of them were positive and shippable, which is incredible. I mean, you think about and multiple and the magnitude of that and it was because we were so effective at de-risking and understanding what was going on.

**Lenny Rachitsky** (00:31:18):
This is really interesting. I imagine many people listening here are like, we put time into understanding, we run experiments, we write strategy docs, we use research. What is it that you think people are, where do you think they're missing? Is it that you dedicate people's actual time, like you're just doing understand work instead of building a new thing. For this next sprint, you're just going to be telling us what the problem here or opportunity is. How do you actually operationalize this versus just what people probably already do, which is user research, data dives?

**Bangaly Kaba** (00:31:47):
What I found is a couple things. One is when your team does not fully understand a problem space, the balance of work tends to be higher. I think when I started at YouTube we were doing 60% execution, 40% understand work. Right. And over time, as we understand more and more, the mix shifts. Now my teams are probably doing 80% execution, 20 to or 85% and 20 to 15% understand work.

**Bangaly Kaba** (00:32:18):
And so it's not just about writing a strategy, it's about saying, okay, if we have these themes of stuff that we want to work on, what do we know with confidence because the data tells us and what do we need to understand because we don't have the data, we don't have the research, we don't have the insights? And really being honest with yourselves around what are the things that are low to medium effort but high likelihood of being impactful because you have the data and what are the things that you are interested in perhaps doing, but because you're missing something, you're missing research or feedback from users or data or some insights or strategy. You should actually say, I'm going to go do this before I do something else. Right.

**Bangaly Kaba** (00:33:03):
An example of this is one of my teams ships paid virtual goods in the live experience on YouTube. And that's a really, really important and hard problem space. And when I joined, we didn't really fully understand the whole live ecosystem, like how we lived in that live ecosystem, how our products worked, where the biggest opportunity was. So the first and most important piece of understand work was instead of shipping iterations to the current product, we needed to actually get the funnel of what was happening. Right. Like what's happening with how many people are watching live every day, how many people are clicking through, how many people are seeing our experience, how many people actually buying it? We didn't really fully have the experience mapped out and to understand where were the gaps and where are the problem space is in, where should we be focusing?

**Bangaly Kaba** (00:33:52):
And so we had to do that. And that was understand work for multiple people, for multiple teams. We had to do on the engineering side, we needed data science as analysis. We needed the PM to go and dog through the experience to figure out what was broken. All of that was intentional and an affordance on our roadmaps.

**Lenny Rachitsky** (00:34:08):
What's interesting about this is that this is very counterintuitive to how people would probably approach, hey, we need to speed up execution, we need to speed up growth, we need to ship more, execute, go faster, do more. And what you're saying is you find the impact comes from actually slow down how much we're doing and spend more time understanding to execute more intelligently.

**Bangaly Kaba** (00:34:32):
That's right. Slow down and speed up.

**Lenny Rachitsky** (00:34:33):
Fascinating. Because it's interesting, I have a bunch of questions that emerged out of folks that you've worked with and many of them are around how you turn a culture around, speed things up, and drive growth in a really meaningful way. And it sounds like this is one of your key strategies, is get people to spend more time understanding before diving into a bunch of stuff.

**Bangaly Kaba** (00:34:54):
It does sound counterintuitive, but if you actually think about it, what is a better outcome? Is it a better outcome to just ship more faster now, but most of the things aren't unimpactful? Right. Or is it a better outcome to ship fewer things but really work on making sure that you're shipping them in the best way and de-risking a lot of other things so that a year later your win rate's higher and your velocity is higher?

**Lenny Rachitsky** (00:35:19):
Yeah, I think counterintuitive is the wrong word. I think it makes sense. I think it's just no one does this. Usually everyone's like, move faster, we need more and ship more experiments.

**Bangaly Kaba** (00:35:28):
Well, I mean this is the irony of growth, is people think growth is overnight success and it's not. Right. It is a lot of short wins and short-term execution for a longer-term gain and really understanding you have a lot of short terms towards the longer-term outcomes.

**Lenny Rachitsky** (00:35:48):
So that people can take away this lesson, can you help people understand just when you say understand work, like what does that look like generally? Is it just a dedicated time to dive into data and answer a bunch of questions you've sent them? Is it running experiments to test hypotheses? What does that usually look like when you're, here let's do 40% understand work?

**Bangaly Kaba** (00:36:10):
The understand work sometimes comes from me, but most often comes from the teams themselves. And every function can do and should be doing understand work at some point. Right. And so it really depends on what the function is. So for an engineer, it could be looking at the code and saying, okay, we want to improve this. I need to do understand work to understand do we need to refactor this code and how scalable is it and what do we need to do to make sure that we can execute fast and make sure that we're not going to have a lot of start and stop? That could be understand work. It could be actually instrumenting the data and making sure that we actually have full visibility into what's going on. Data science, like we work a lot with data science doing activation metrics and understanding proxy metrics. Right. That's understand work because it helps us to figure out what we need to build and where to focus.

**Bangaly Kaba** (00:37:05):
For product management, sometimes understand work is figuring out the partnership strategy ahead of actually launching the product because you need to go figure out how the pieces are going to come together. Right. And so it really just depends on what the function is. But when I say it should be coming from the bottoms up, what I mean is I encourage the team when we plan a sprint or plan a roadmap, to ask a question to identify the key themes that they need to work on. And when they ask a question on a key theme, also ask what else do we need to understand to make this happen? And in that planning session, to make sure that you are including cross-functional partners. So it's not just product design and data science and Inge, you also include go to market, you also include marketing because if you're not inclusive, then you don't really understand what the issues are.

**Lenny Rachitsky** (00:37:55):
My PM brain is afraid of creating too much understand work and nothing getting done. How do you find that balance of we're going to be understanding for hours and days and weeks and months and not shipping much? How do you do some,-

**Bangaly Kaba** (00:38:11):
I tell them, you have to ship. I mean, you always have to ship, right? Sometimes I give them, sometimes it's helpful, especially early on because it takes a while for people to get their head around why this is so critical. I say, we should choose, sometimes I'll give them guidance. We should choose three to four understand projects that are going to really help this roadmap and figure out what they are. Right. So choose your top three or four and then let's talk about it. And I'll give them guidance. Or I would say figure out... There should always be some execution. So initially you're looking for low effort, high impact things to execute against. Right.

**Bangaly Kaba** (00:38:53):
And so build a portfolio of work to do every sprint or every roadmap, some of which should be low effort, high impact, some of which should be medium effort, high impact. And sometimes understand work actually looks like doing a cheap test, doing a test that's going to help us to learn as fast as possible that we think is a good enough experience that can inform us. Right. And so identifying ways to do that. And so it's really about just managing expectations and helping people to be clear that the goal is to ship the product, but you want to ship the things that you have more confidence and understanding versus not.

**Lenny Rachitsky** (00:39:29):
So I think a big takeaway here is if you want to have more impact, move faster, try to spend a little more time understanding the problems you're going after in the opportunity space.

**Bangaly Kaba** (00:39:40):
That's right. Right. I'll give you a very tactical example is when I joined Instagram in January 2016, believe it or not, the onboarding, the sign-up flow at Instagram had literally no logging to it. It had logging of how many people started and how many people ended. Right. And I joined in January and it was like we had to write a roadmap. And so the roadmap looked like this. Okay, we know this amount at the top of the funnel and this amount at the bottom end of the funnel. And there was eight steps in the funnel and we don't know what is going on. Right. So the first bit of understand work was we needed to do the instrumentation of that funnel as fast as possible to get the data to figure out where the drops were happening and what to fix. But because we knew of what was happening at the top of the funnel and the bottom of the funnel, we can go and play around with the experience and see what was broken.

**Bangaly Kaba** (00:40:32):
So we ran a bunch of tests of stuff that was obviously broken to see what would improve. Right. And so it was like a mix. And so what we did was we set up time where we did, the beginning of like the first couple of weeks, add the logging, ship it to code, re-evaluate in the middle of the quarter, look at the full funnel and then add more things that we can do later on once we got that. But in order to get that done, that involved understand work with growth marketing to figure out what was the schemas for the instrumentation, right, the engineering to actually do that logging. Right. Data science to like pull together funnels and dashboard it, all of that had to come together all at one time.

**Lenny Rachitsky** (00:41:08):
I really like just this concept of calling it understand work. I think that alone is a powerful tool because we're going to spend more time on understand work.

**Bangaly Kaba** (00:41:15):
It feels like it gives meaning to stuff that otherwise people would brush aside.

**Lenny Rachitsky** (00:41:18):
Right. Where it's just like, no, no, let's just ship stuff. Let's just try stuff. Let's just test the step. We'll see what happens.

**Bangaly Kaba** (00:41:25):
That's right.

**Lenny Rachitsky** (00:41:26):
Is there anything else you have seen and often do to help a team you join move faster and grow bigger? And I've heard that you've had a lot of impact on a lot of different cultures, so I'm curious if there's anything else that is really effective.

**Bangaly Kaba** (00:41:42):
I've found myself in a bunch of interesting situations where I had to come in and help improve cultures or change cultures around teams. I found this framework, I don't even actually remember where I got it from, but it travels from computer to computer with me and team to team, and it's called managing complex change. I actually think I got it from business school or something. And it's really interesting. It's got these five components to it. There's vision, skills, incentives, resources, action plan, and you need all of those to have change. Right. Team needs to have vision, they need to have the skills, they need to have the right incentives. Sometimes some teams are incentivized to do some things versus others. You need to have the right resources in the right places and you need to have a clear action plan. And what I love about this framework is if you can visualize it and maybe you can share it with your podcast.

**Lenny Rachitsky** (00:42:34):
Yeah. We'll put it up on the screen on YouTube so folks can see what you're talking about.

**Bangaly Kaba** (00:42:38):
Basically what it does is it shows where if you're missing any one component, you get different outcomes. Right. So if you're missing the vision component, you end up in a state of confusion or if you're missing the incentives, you end up in a state of resistance because people aren't incentivized to do the right work. Or if you're missing an action plan, you end up in a state of false starts. So I use this, and I think about this a lot actually, because when you come in as a leader, as someone who's supposed to influence change, you have to really observe what's happening and figure out what are the challenges anecdotally and what are you observing? And then I figure out where I can plug in and what I can do to make the teams better. And what I tend to find is moving from the right side to the left side of this, like action plans are easier to institute. Right.

**Bangaly Kaba** (00:43:27):
So if I see a team that's struggling to execute, I wonder do they have the right type of PRD framework or are they communicating well? Do they have the right type of team meeting structures? Those are kind of lower hanging fruit. It's a lot harder to change vision and skills. It will come in time. But what I also have done over the course of my career is I've built this deck that comes with me of different skills that matter. Right. What are different skills, what are different frameworks, how do we think about it, to help level teams fast? Right. Because I find that sometimes you walk in and not everyone is grounded in the same mental models or concepts.

**Bangaly Kaba** (00:44:07):
One example of this I talk about a lot is Instagram. Instagram had just this fantastic culture of thinking about how do we ship high, high quality product, right, and what does product craft mean? And so that is something that I came to YouTube and my teams particularly, they didn't have a mental model for product craft. So I found myself talking into an echo chamber in some way. So I had to build a deck that showed, okay, here's how I think about product craft. Here's a framework for it. Here's how I think about all of these different things. And so now we have a shared language, shared communication for, and a repository of skills that we're going to build.

**Lenny Rachitsky** (00:44:47):
So I'm looking at this image that we'll have up. So in this case, their skills weren't necessarily there, which in this framework leads to anxiety. And so what I'm hearing, essentially you come into a team, you're like, what am I feeling? Is it confusion, frustration, the wrong thing? And that kind of tells you which of these buckets to spend time on.

**Bangaly Kaba** (00:45:06):
That's right. And then within those buckets, you've got to figure out what are the right levers that you need to pull? What are the things that are missing? How do you really focus and where do you kind of spend your time?

**Lenny Rachitsky** (00:45:16):
So interesting. I love that this image is just like this very grainy,-

**Bangaly Kaba** (00:45:20):
So old.

**Lenny Rachitsky** (00:45:21):
Screenshot from some old McKinsey deck or something.

**Bangaly Kaba** (00:45:24):
Yeah. It's from like 2006 PC or something.

**Lenny Rachitsky** (00:45:26):
I love it. So you have this thing, you have this deck. You just come in with all these tools in your tool belt. Is there anything else in that list of things that you bring with you to help change culture and help teams,-

**Bangaly Kaba** (00:45:37):
Yeah. I think one thing I think about a bunch is I come from, my background's a little bit different than a traditional tech executive. There was actually three phases to my career. I was in education for six years, taught in inner city DC and then was a dean of a boarding school in Switzerland, which is a little bit of a plot twist.

**Lenny Rachitsky** (00:45:38):
Oh, wow.

**Bangaly Kaba** (00:45:58):
I went to business school and I worked on Wall Street for a bit, and then I left my job on Wall Street, quit and started a startup. Startup was a glorious failure as many startups are, but it was like a very non-traditional path towards tech. And I think a lot of my time in these other industries actually shapes the way I think about products and product management and actually changing teams and building teams. And what I mean by that is I think there's a lot of similarities between education and product management believe it or not.

**Bangaly Kaba** (00:46:31):
When I was interviewing for my first set of jobs in tech, recruiters would say to me, "How does your background relate? I don't really see it." And I would tell them, "When I was in education, I would walk into a classroom of 24, seven-year olds, and these kids owed me nothing. And the only way I could be successful or impactful is I needed to be able to be a strong communicator. I needed to be able to have a clear vision of what was going on. I needed to be able to influence them in a believable way such that they would get on board with what needed to be done for 270 days of the year." It's like when you walk into a room as a product manager, engineers, designers, researchers go to market. Nobody owes you anything. And the only thing that you're going to do in order to be successful is you need to be a strong communicator. You have a clear vision of what's going on and you need to be able to influence them to do the things together of what matters, right? It's very similar skillset, just different domain expertise.

**Bangaly Kaba** (00:47:29):
And so because of that, right, I've really adopted a mindset of how do I coach my teams? How do I enable them? Because it's really about the sum of the parts versus me being a top down leader saying, you have to do this and you have to do that. And so I think a lot about that in both approach and the processes that we create. And to give you a couple of classic typical examples of this, there's two things I want to call out. One is there's this, actually this education framework, it's called Bloom's Taxonomy. I think it's changed over time, but when I learned it, it was basically a pyramid and the pyramid was, Bloom Taxonomy describes what's the different levels or order of critical thinking you need in order to be a master of something? And at the bottom of the pyramid was knowledge, and then it's comprehension, and then application, analysis, synthesis, and evaluation. Right.

**Bangaly Kaba** (00:48:26):
And so going up the pyramid, it means it's higher order thinking. And I think about that a lot and trying to understand where are my teams struggling? Do they have the core knowledge that they need? Do they understand it but they can't apply it or they apply it, but they're not able to analyze it across different business segments? Right. And you can use this framework not only with the ICPMs and the teams themselves, but also for your managers, like what is breaking down? And in using that and attaching that to the skills that we want to build to figure out how do you fill in those gaps? Right. And it really is a grounding for me, a grounding mental model for how do you build teams that are actually affect them? How do you meet people where they are as opposed to just saying, hey, you need to figure this out? Right. I find that too often in tech and also in product, people are ask to figure things out but not given the support to get there, and there's no way to really connect the dots for them.

**Lenny Rachitsky** (00:49:21):
Amazing. I'm pulling up the Bloom's Taxonomy. So essentially if you see a PM struggling, which you try to do is figure out which of these things do they not have? How are you not supporting them? How can you support them better? So it could be they don't have the skills, they don't have the understanding. What are some of the other things that often you find that maybe hinder a product manager's success?

**Bangaly Kaba** (00:49:42):
A lot of times they might have the understanding, but they haven't had a chance to apply it to a variety of different scenarios or haven't seen it applied to multiple scenarios. Right. So oftentimes you might understand a concept like machine learning, but you haven't actually worked on it in against multiple scenarios. So you maybe have one way of doing it that doesn't make sense and you need to have two or three, and you don't even know that two or three ways of doing it exists. Right. That is often a common failure point. Right. Or it's maybe you know how to apply it, but you can't synthesize why this thing that you're doing actually matters for the business context. Right. Oftentimes that becomes a challenge with managers. It's like they know what to do, but they don't understand how to tie it back to the business context and the overall strategy needs and so where to prioritize. Right.

**Bangaly Kaba** (00:50:31):
And so what I find is that when you're trying to manage managers, you're really trying to live at the top of the pyramid. You are responsible, managers responsible for basically owning that pyramid for all of the areas that they operate, but they need to be able to live at the top of the pyramid across all of them. They need to be able to synthesize and evaluate what's happening for each product team that they own in order to kind of make the bigger picture connections.

**Lenny Rachitsky** (00:50:56):
By the way, I loved your metaphor of product manager, like this group of seven-year-olds where you have to learn how to manage, influence, communicate.

**Bangaly Kaba** (00:50:56):
Yeah.

**Lenny Rachitsky** (00:50:56):
It's great.

**Bangaly Kaba** (00:51:05):
Yeah. I mean, they're not like a group of seven-year-olds,-

**Lenny Rachitsky** (00:51:07):
It's the skills.

**Bangaly Kaba** (00:51:07):
But I think it's actually, it's,-

**Lenny Rachitsky** (00:51:08):
Yeah, the same skills.

**Bangaly Kaba** (00:51:08):
Huh?

**Lenny Rachitsky** (00:51:09):
The same skills you,-

**Bangaly Kaba** (00:51:10):
Same skills.

**Lenny Rachitsky** (00:51:11):
Yeah.

**Bangaly Kaba** (00:51:12):
I mean, I think it's true. I found it actually significantly harder for me to get 24 seven-year-olds to believe in what I was doing then to walk into a room with Kevin Systrom and Mike Krieger and explain to them what's the strategy for growing the next 100 million users on Instagram? These are very logical adults who can reason with you, and you got a classroom of kids. It's not quite the same. So those skills are really critical.

**Lenny Rachitsky** (00:51:36):
I love that. I definitely want to ask about your Instagram days. Is there anything else in this bucket of wisdom of, you kind of talked about things you've learned about how to manage product managers and managers of managers. Is there anything else there that might be helpful to folks that you've learned?

**Bangaly Kaba** (00:51:50):
One thing that I also think about a lot, and I don't know if this is just a me thing, but I think about PM as a team sport. Right. Leading product teams is really about...

**Bangaly Kaba** (00:52:01):
Leading product teams is really about being the coach and helping other people to see what their role is on the team and to maximize them. People talk a lot about product as you're the CEO, and I don't actually fully believe that analogy. If you think about it as a team sport, there's a few things that shake out. One is not everyone's going to be a star player. But not everyone needs to be a LeBron James or Kobe Bryant. You need role players. You need really strong role players. You need people who feel valued in their role, and you need to understand how to groom those role players and how to make sure that they have the right seat at the table and the right place. So I think it's, yes, you're the conductor of the orchestra, but you're really more than that. You're really the coach of the team.

**Bangaly Kaba** (00:52:46):
Another thing I think about a lot is I have a good friend who's a college basketball coach, and he taught me about this idea of your coaching tree. This is a really important concept, especially in college basketball. You, as a head coach, you take a lot of pride in who are your assistants. Who is your first assistant, second assistant, and third assistant? And where do they go on to be head coaches? And what legacy do they have because you were able to instill a bit in them? The coaching tree of a Mike Mike Krzyzewski, the coaching tree of a John Calipari, these esteemed coaches, not only because of what they've done, but because of the tree that they've built.

**Bangaly Kaba** (00:53:26):
And I like to think about this as well, because I think it's really important for product leaders, think about what is their leadership tree. Who have you helped to build up and help to grow and help to get to their next wall? And so I think about this a lot. I have people who I've worked with who are running growth at Stripe or the CPO at Chief or now running stories at Instagram that were on my team in the earlier days. And their success is my success, and I'm proud for them, and I'm happy for them. And I think it kind of reinforces this mentality that it's your responsibility to coach people up to greatness.

**Lenny Rachitsky** (00:54:04):
So what I'm hearing is you put a lot of value in your team on them coaching folks, whether they're managers or even ICs is helping them understand that it's important to coach folks on their team and help them develop, that it's part of your job, essentially.

**Bangaly Kaba** (00:54:21):
That's part of your job. You are trying to build a repository of skills and repository of knowledge and of team velocity. And the only way you can do that is everyone is... So rising tide has to lift all boats.

**Lenny Rachitsky** (00:54:33):
Amazing. And interestingly, that probably teaches you how to do your job better because you're in teaching, you actually learn things a lot better.

**Bangaly Kaba** (00:54:40):
That's right. That's right. And it forces you to figure out how can you get things off of your plate so that you can go work on bigger things.

**Lenny Rachitsky** (00:54:46):
Yeah, and how good does it feel when folks that you used to manage go on to do bigger and better things.

**Bangaly Kaba** (00:54:51):
That's right. That's great.

**Lenny Rachitsky** (00:54:52):
I want to talk a little bit about growth within YouTube. I heard that you haven't been there for that long, and apparently you've already... Two extra, three extra more, something important within YouTube. I don't know exactly the details, and people are very impressed with the impact you've already had. And apparently a lot of the success there and other places is how you think about growth through flywheels. You always look for the flywheel that helps drive growth. Can you just talk about either at YouTube, ideally YouTube, whatever you can share, because that's pretty impressive, especially for a company that scale that you're making so much impact, or other places, just how you think about flywheels and growth.

**Bangaly Kaba** (00:55:29):
Well, it's very generous of you. I wouldn't say, look, we've done some really good work, some good work so far at YouTube, and it's been a journey. I do think a lot about flywheels. I think it's actually a lot of growth is really understanding what is the value profit, all of the different points of the experience, especially if you have a multi-sided marketplace. A multi-sided marketplace for YouTube is like the creator and what the creator is trying to achieve both from an engagement perspective, but also for me for a monetization perspective. And then for the viewer or the purchaser, where is their hat? What are they trying to do, and where are they missing the opportunity?

**Bangaly Kaba** (00:56:13):
I can't really go into specifics a bunch with YouTube, but what I would say is this is that one thing that I always do when I come in is I try to push my teams to really dog food products in their adjacent user state, if you will. And what I mean by that is often, a product that you and I use that we've been using for years isn't actually the product that we're building for other people. Like a power user who's using a product has... There's so much history and there's so much informed knowledge on how that product... for that product to actually create a great experience for you that if you were to go and create a new Gmail account and look at YouTube today, I guarantee you it's a completely different and significantly worse experience.

**Bangaly Kaba** (00:57:03):
And there's a lot of obvious opportunities missed, especially with what is the flywheel and why things are working or not working if you don't actually go and use things in a new state. And an example of this when we talk about YouTube is a lot of the YouTube graph for searching stuff is based on what have you watched in the past? So if you go and search and you search history, it's going to be about like, well, what have you watched in the past or what have you searched for, and what can we show you that's going to be what we can better predict?

**Bangaly Kaba** (00:57:33):
But if you don't have a line of search history, then they're not going to do as good of a job. And so that's not a direct translation for what we were doing. But for me, I work on freedom monetization, and there are really important flywheels around what does it take for a creator to make content that can help them to monetize? How do we get that content to people and where to what extent are we getting that content to people, and how do we make sure that people feel good about what they're receiving, the people who are paying. And all of those flywheels have to work.

**Bangaly Kaba** (00:58:02):
And so part of what I've been able to do is really think about how do we connect the dots in a story that the teams can uniquely understand, can help them to lean in even more and have clarity and purpose of work. Sometimes, what's super important about the flywheels actually is enabling for your teams to know what to work on and what not to work on. And then it also helps us to understand what do we know and what do we not know about creators and viewers and monetization operations so that we can do the understand work to improve the velocity and to prove the impact.

**Bangaly Kaba** (00:58:35):
And that's really where we've been focused. And so I did a lot of this in YouTube, but I also did this in Instacart, really thinking about when I joined Instacart, one of the big questions I had was like, how will people in their daily lives... How's their daily life actually reflecting in the purchase experience? Are we making it easy for them? Because when you buy groceries, you're not going to going grocery shopping because you want beautiful ingredients in your fridge. You're going grocery shopping because you actually have a meal to put together. So are we actually reflecting the real job to be done, which is I want to buy tacos, I want to make Taco Tuesday. Can we make it easier for people to find the ingredients for tacos, as opposed to having them sort for tortillas and tomatoes and avocado? And so it's really thinking about what is the job and then what is the flywheel to make that happen, and how do we make this come to life?

**Lenny Rachitsky** (00:59:25):
There's so many things that I want to follow up on here. First of all, I realize that all of the things you worked on, I am a daily active user of or weekly active user. Twitter, YouTube, Instagram, Instacart about weekly active user, I think that might be. Yeah. Wow, nice job. You got me. You got me in the flywheels of all your flywheels.

**Bangaly Kaba** (00:59:45):
I was not intentional, but I'm glad my efforts had improved joy, just a little bit,

**Lenny Rachitsky** (00:59:48):
Nice work.

**Bangaly Kaba** (00:59:49):
... ideally.

**Lenny Rachitsky** (00:59:51):
Okay, so a couple takeaways here. One is you think about the value prop at every interaction of both sides, if it's a multi-sided marketplace or if it's just like, "Why would I be doing this?" So it's like, "Why would I send an invite to my friend? Why would I share this photo? Why would I open up Instacart?" And then you think about the jobs to be done during the day of a potential user and how can we flow into that versus not connect to their actual day-to-day experience?

**Bangaly Kaba** (01:00:17):
And is the product actually working? As I'm doing this, I'm looking and saying, "Is the product actually set up to deliver these things? Do we actually see it work or not?" I think there's a lot of assumptions that the product works, but a lot of times teams will surprisingly build the pieces of a flow but not actually build the experience, the output. They don't design it in a way where you're getting the real output that you need.

**Lenny Rachitsky** (01:00:39):
That's such a easy to miss point you're making here, which is you just think about, "Hey, I have Taco Tuesday. I'm actually as a product manager on Instacart. I'm going to open up the app, and use it in this use case and see how it goes."

**Bangaly Kaba** (01:00:51):
That's right.

**Lenny Rachitsky** (01:00:52):
And most people don't do that is what you realized.

**Bangaly Kaba** (01:00:55):
Most people don't do that. Another example of this, this was years ago, but at Instacart, Instacart made it really hard to reorder stuff, super hard to reorder. And it was shocking to me, because when I thought about it, when I go to the grocery store, 90% of the time I'm getting the same stuff. It's like maybe not every trip, but over the course of a month or two, you've got a list of things that are part of your staple, and then occasionally holiday time I went some peppermint bark chocolate or something. There's random snacks you're going to throw in, but there's... And so when we looked at the data, it turns out, after five times when you go to Instacart, 90% of your order was the same. But when you wanted to reorder, at least back then, you couldn't go and reorder easily. You had to dig and find it like seven or eight clicks.

**Bangaly Kaba** (01:01:46):
And when you did reorder, you had to reorder the whole thing. You couldn't take pieces, you couldn't take, I want to take the milk and the blueberries. And so you think about growth, you think about what does it mean to grow an Instacart? What does it mean to actually drive better retention? Well, it's actually really important to make it easy for people to make the next order. And so the product wasn't really built for that, though people have the best intentions in mind.

**Lenny Rachitsky** (01:02:10):
The adjacent order.

**Bangaly Kaba** (01:02:12):
Yeah, exactly.

**Lenny Rachitsky** (01:02:13):
I imagine that was maybe one of the biggest growth wins in Instacart history is just the reorder the same thing, because I do that all the time.

**Bangaly Kaba** (01:02:20):
Yeah, you would be surprised.

**Lenny Rachitsky** (01:02:22):
**Bangaly Kaba** (01:03:29):
This was something that came out of actually my time at Instagram. It was a framework that we came up with because Instagram really was, at that time, we grew so fast that the people who were using Instagram in February were completely different than people who were using it the following October and then the next January. I think when I joined, we were at like 440 million monthly actives. January 2016, at the end of that year we were at 636 million, grew like 47% that year. And so when we talk to users, first half of 2016, when we talk to women in the US in their 30, they're like, "Why would I have an Instagram? I have a Facebook account." Literally people said that, it was that long ago. And then a year later it's like, "Of course I use Instagram. Instagram is my everything." The world changed so fast.

**Bangaly Kaba** (01:04:21):
And so when you're in a hypergrowth product, it's really, really important to understand who your users are today and the persona of the user, what motivates them, why they're using it, but then also to understand who is the next user? Who is the user who could be using this product, but for some reason it doesn't work for them, and understanding who that adjacent user is and when you are actually starting to see that adjacent user adopt the product. And one of the ways you start to see the adjacent users starting to adopt the product, especially with the data, is you start seeing cohort curves decline. You start seeing the people who sign up today, three or six months from now, they're signing up and they're doing a worse job. Nothing's changing the product, but just the understanding of how the product should work is different.

**Bangaly Kaba** (01:05:12):
They might be less tech savvy. On a scale of an early adopter versus late majority, they might be closer to the late majority. And so we saw this at Instagram. We always knew working on our registration flow, and at one point we were converting at some insanely high percent, and then three months later it would go down by 15%, not because anything was broken, but just because we'd broken into new markets. You bring on people in India or you bring on people in the Philippines, and their understanding of how it works, the phones they use, et cetera are all different. So really, the core of their adjacent news was a few things. One is like you have to understand who's using your product today and why. And when you're growing at some really strong pace, 30, 40, 50% or more per year, you've got to be on top of who you believe the next user is and why.

**Bangaly Kaba** (01:06:02):
And then you also have to be the adjacent exactly, use the product like them and see how it's working, what's broken with it. And so at an Instacart, the adjacent user, the original user might've been like an office admin who is going to buy this thing every week because of during happy hours and team staff. But then the next adjacent user might've been the mom of three or four or the dad of three or four who's home with the kids and they need to depend on Instacart, versus later on it might be they're a single person in New York who does this out of convenience. But what they're optimizing for, how they use the product all changes, and the functionality and the abilities are fundamentally different. So you have to be them, you have to watch how they use the product, you have to talk to them, and then have to visit them and literally see what they're doing in real time in order to make sure that you're enabling the right jobs for them.

**Lenny Rachitsky** (01:06:57):
I love just the visualization of the adjacent user. Basically your growth is going to come from non-existing users. It's the users right outside that circle of...

**Bangaly Kaba** (01:07:05):
That's right.

**Lenny Rachitsky** (01:07:05):
... pre-users are today, and you need to think about what do they need that existing users maybe don't need. You said that this is most powerful for hypergrowth companies. Is this something you think people like all companies should be thinking about or is it a lot less important if you're not a hypergrowth business?

**Bangaly Kaba** (01:07:21):
So it's a great question. I think it's essential. It's mandatory for hypergrowth. I think it's very helpful if you have a product or a company that is not growing what you want it to be. And so you are focused on capturing more share of wallet instead of expanding your audience. And so sometimes you can imagine a cosmetics company, for example, that's like digitally enabled. You can imagine that they've hit a ceiling in terms of the growth of their users, and they're really just trying to get people to buy more product, but maybe the people who want to use their product are missing something from your current product. Maybe you're missing different skin tone shades, or maybe you're missing certain types of tools. So really talking to who is just outside of your current user base, who's coming to your product and looking around and not buying and understanding what are their needs and figuring out how do you enable for them, how do you build the right experience for them in order to become adopters of your product?

**Lenny Rachitsky** (01:08:21):
So what I'm hearing is spend some understand work to figure out who your potential users are,

**Bangaly Kaba** (01:08:25):
That's right.

**Lenny Rachitsky** (01:08:26):
... and then use the product as them and see what is missing. I imagine user research goes into this. You're not actually going to understand necessarily all the things they need. So it's probably fine folks in that cohort and see how they use the product. Awesome.

**Bangaly Kaba** (01:08:41):
Yeah.

**Lenny Rachitsky** (01:08:42):
The question I had on my mind as you're talking, you've come into so many companies and helped them with growth. Where do you find most of the opportunities often lie? Is it like onboarding, activation? Is there a trend like that you're like, "Here's probably there's going to be opportunity here," or is it super mixed bag?

**Bangaly Kaba** (01:08:58):
Usually it's somewhere in the onboarding to habit-building experience. What does it take for someone to actually understand the value, that first moment, that first aha moment in the product? And a lot of teams, it's shocking how many teams don't really understand what that moment is for them. And then also how do you get them to build habit around the product. Oftentimes, a lot of people equate growth to top of funnel, and that is also critical. I think having the right top of funnel motion is really critical and building on that. So I think there's one part of, it's like once you have the right top of funnel motion to get people to come in, how do you help to make sure of the defining value and the building habit and their routine? Because that's the thing that helps you to compound over time. If you're bringing a lot of people but they're not staying around, then you just have a leaky bucket and it doesn't matter how big your top funnel is. So making sure that that first-month and two-month, three-month experience is great.

And then the other part is really figuring out how do you build compounding growth loops where it's not just one way of acquiring people, but you're building two and three and four ways that layer onto each other that help you to really supercharge your engine of acquiring people. So at Instagram, if you kind of look at where Instagram is and how I [inaudible 01:10:28] and grew, there's a lot that goes into it, but if you actually unpack the top of funnel for what worked at Instagram, there's certainly a component of it, which was our core component, which was invitations, where people inviting you and making sure that those invitations work and they work well and that people, their friends are coming on, you get notified.

**Bangaly Kaba** (01:10:48):
But another part that goes unspoken, still critical to this day was the celebrity partnerships was critical, because basically they had this wonderful partnerships team that basically took Instagram and taught celebrities how to use it, how to make it work for them, how to tell their own story and be their own brand, and that was a critical growth funnel because with that, you had the ability for them to create these celebrities and celebrity creators to set the norm for how the platform gets used, but they also were getting picked up by the news and the media for all the stuff that's happening in the celebrity world, which then added onto this other growth level, which was SEO.

**Bangaly Kaba** (01:11:36):
And so every time a news article came out, they would link to the creators or the celebrities Instagram account or that particular post. And so you have this whole SEO engine that worked. And the SEO engine was because you have both web, which we launched at Instagram, which created the canonical SEO tables, and then you had all of these inbound links from these celebrity sites and news media, but then what you also had is you had embeds for Instagram and all of these different sites, like a news article, whatever, the posts, Lenny's podcast, Instagram account, and those embeds help with SEO juice.

**Bangaly Kaba** (01:12:15):
And so you have not just the invites, but now you have the celebrities, now you have the SEO component. And then we would do a bunch of paid media on top of that using a lot of those signals. And then we have our own content. And so you would have all of these different growth engines compounding each other. So every time the invitations got better, every time we've got more celebrities, every time SEO gets better, it's like magnifying the top of funnel, and at the bottom of the funnel or mid-funnel, making sure that people are retaining and getting value and staying around over the long term.

**Lenny Rachitsky** (01:12:47):
That is so interesting. I had no idea this was such a core part of the early growth strategy. Everyone's always talking about reality and word of mouth, all these things. And you're saying partnerships was a key part of the early growth strategy.

**Bangaly Kaba** (01:12:59):
Huge. It's huge.

**Lenny Rachitsky** (01:12:59):
That's so funny. Never something people talk about in growth, this partnership. It's always is like, "Oh, there's a couple of companies that really had success from partnerships in BD." How early was this a big part of the strategy? How early in the history of,

**Bangaly Kaba** (01:13:13):
I mean the partnerships team was there before I joined. It was a very savvy and astute thing that Kevin and Mikey set up. The partnerships team drove a lot of the word of mouth around Instagram, but it was the partnership's work in combination with the product work that actually helped to allow a lot of that to land. It was our ability to think outside the box and understand that we needed to have a web presence because it was critical for international growth and it also helped with SEO. And so the idea of launching web really drove and actually increased Instagram's growth by 10% the minute we launched it. And it was something that George Wang, who was there before me, had the idea around. It wasn't really something that Kevin and Mikey believed in initially, but we had to prove to them that it was really impactful and one should launch.

**Bangaly Kaba** (01:14:03):
Then they understood why it was impactful and all of the effect of it. But web was really critical for driving so much SEO, which helped support a lot of the celebrity work and the partnerships work, because now every time creator or celebrity did something on Instagram, every news media article picked it up and it just helped to drive searches in Google searches, which helped to make Instagram part of the cultural zeitgeist.

**Lenny Rachitsky** (01:14:29):
This is so interesting, because everyone imagines Instagram, virality, word of mouth, like SEO and partnerships sounds like a core part of Instagram's early growth, which I don't think anyone ever talks about.

**Bangaly Kaba** (01:14:39):
No, that's huge.

**Lenny Rachitsky** (01:14:39):
Wow.

**Bangaly Kaba** (01:14:40):
I mean it was part of Facebook's growth too, but I think a little bit differently. It's not as much partnership, but when you Google someone now, you Google someone's name, oftentimes, Instagram is one of the first five things that comes up for the average person,

**Lenny Rachitsky** (01:14:40):
Yeah, right.

**Bangaly Kaba** (01:14:40):
... now, by design.

**Lenny Rachitsky** (01:14:53):
LinkedIn, Instagram, Twitter.

**Bangaly Kaba** (01:14:54):
That's right.

**Lenny Rachitsky** (01:14:55):
Do you ever see the video of Alex Jiu talking about TikTok's growth strategy of this whole... He had this metaphor, and he was trying to grow off of Instagram, so his metaphor was Instagram is like you're in Europe and you're killing it. If you're in Europe and you're king, you don't ever want to go to America. There's no reason for you to give it up. And America is TikTok in this case. He's like, "How do we convince people to come to America and try moving everything there?" He's like, "We need to go after the people that are not doing well in Europe, who want to be the king, and we're going to help you become that king in America, or the President."

**Bangaly Kaba** (01:15:28):
So he used the adjacent... Used that theory on us, basically, is what you're saying.

**Lenny Rachitsky** (01:15:33):
That's right. He did. Drink up your shake.

**Bangaly Kaba** (01:15:40):
Yeah.

**Lenny Rachitsky** (01:15:40):
Yeah. And I think the reason that strategy worked differently is there was already a place, so they couldn't execute what you did because there's already celebrities already there, and it's not like, "Come here." There's no point. I already have a huge following.

**Bangaly Kaba** (01:15:51):
So you make your own celebrities.

**Lenny Rachitsky** (01:15:53):
Make your own celebrities. Exactly. And they went after the B-list, C-list people. So it's interesting that people look at Instagram, like, cool, we're going to do partnerships, SEO. But I think it's important to realize things change when the market is a different dynamic. You can't just do the same thing.

**Bangaly Kaba** (01:15:53):
That's right.

**Lenny Rachitsky** (01:16:07):
It won't work as well. Is there anything else from the Instagram early days that maybe people wouldn't know or would be interesting to share? Because you were there quite early, and now it's maybe the most thriving social network in the world.

**Bangaly Kaba** (01:16:17):
One thing that's actually, I think, interesting, as an interesting story that doesn't get talked about a lot is I think the early Instagram was built where... it was built in a way where every follow was created equal. And what I mean by that is if I followed you, Lenny, or if I followed Kim Kardashian, I followed Selena Gomez, all follows were treated like they were equally important. And this is actually a really important fact. It was a really important factor for a couple of reasons. One, early celebrities who were adopting Instagram obviously benefited from that, because a celebrity is going to get a follow before an average person does. It doesn't mean that their followers weren't meaningful. It's just that when you have a machine learning that's just optimized for a click through a follow, then that matters.

**Bangaly Kaba** (01:17:15):
But what ended up happening is we ended up looking at the data, and I can't take credit for this. My colleague at the time, Rob Andrews, had identified this. He was the head of growth marketing. He was a peer of mine that basically, this is 2016-ish days, the average person would come on Instagram and retain, but then leave after 7, 8, 9 months. We'd see a flattening in a retention curve, but then we would see it dip again, which was very weird. And we're like, why is this happening? And it turned out that what was happening anecdotally is that people were revving up Instagram, following a bunch of people, following a lot of celebrities, actually, because the celebrities were being shown, and then when they actually went to make their first post, a few months later-

**Bangaly Kaba** (01:18:00):
... being shown. And then when they actually went to make their first post a few months later, none of their friends were following them. And so there was posting into an echo chamber and anecdotally people would stop using the product because they felt bad. We hypothesized that no one was liking or following or commenting on their posts. And so we had to do this thing. We called it the connections pivot, right in like 2016 ... Actually, 2017, where we had to convince Kevin and Mikey that it was actually not the right thing to do to prioritize celebrities to everybody because we were basically biting bite your nose to spank your face, whatever that is, because the regular person wasn't having a great experience.

**Bangaly Kaba** (01:18:44):
And so it doesn't mean that we shouldn't recommend celebrities, but Jeff recommended celebrities to people who are already on there. They already have their graph. And the most important thing to do is actually get regular human-to-human connections in the first whatever, when people first sign up so that when you let me actually go make your first post, your friends would see it and you would be validated and you would feel like, okay, this is a police for me. I have a community here.

**Bangaly Kaba** (01:19:11):
And so that connection pivot was critical. It changed ... Literally, angle-changed the retention on Instagram. And so if you about Instagram's growth, there was a TechCrunch article about Instagram's growth at I think 2017, 2018 when we were going 40, 50% year over year. And obviously, there was a lot that went into that skyrocket. People think that stories was the sole reason why we grew and story brought us a lot of people, but we literally, our attention doubled over the course of a year and a half. If you could imagine, imagine if your bank account, the interest rate doubles every month, you know what I mean? It was incredible. This shift in making sure that people got connected with their friends early on changed the way that people perceive the value. And so a lot of the top-of-funnel work that we did, a lot of the activation work that we did really paid off in spades ultimately.

**Lenny Rachitsky** (01:20:05):
Wow. I'm curious, what's the most impactful thing you've shipped/led to in terms of impact and experiment launch?

**Bangaly Kaba** (01:20:14):
At Instagram, we saw this big problem where people were logging out and not being able to get back into their account. It was crazy. Hundreds of thousands of people a day could not get back into their account. It was because ... And when I say could not get back into the account, I mean they literally would try and 28 days later, we would never see them again. And we thought it was a problem because they didn't remember where their email was, which email they signed up with or what their actual handle was or what their password was. We were losing 10, 12 million people a year from what we called account access churn. So we worked on this problem and we had spent a lot of time in South Asia and Southeast Asia trying to understand how to grow the product. And from that time we realized that it's important actually for people to be able to log out.

**Bangaly Kaba** (01:21:14):
We don't want to restrict people's ability to log out because there are many people in the world who don't want to use background data because they're on prepaid phone plans or they don't have a lot of money and they want to share their phone with a sibling and so they log out. And so it's really important. And so we don't want to take away that behavior, but we did have to do a better job of helping them get back in.

**Bangaly Kaba** (01:21:40):
So we did two things. One was there used to be a time, and you can probably find it on Google if you did an archive search where if you wanted to log into your Instagram account, there would be a tab for your email and then there would be a tab for your handle. And we didn't really make it easy for you to log in with your phone number either. You had to get to the right tab and the right place to get the right thing. And so we did this omnibox experience where it was just like email, phone handle, put it all in one place and we made it super simple for you. And the second time, if you tried it twice and it didn't work, if we knew that you were on a trusted device, we would just send you a text message and say, Hey, are you trying to log in? That solved half the problem.

**Bangaly Kaba** (01:22:23):
And then the other half, what we did, and this still exists today on Instagram. When you log out we say, Hey Lenny, it looks like you're going to log out, do you want us to save your credentials on your advice so you don't have to worry about your password? And then we later added an ability to have a password. And that's all basically the other half.

**Bangaly Kaba** (01:22:40):
And so just being really thoughtful around what is actually the core job that people are trying to do because a bad experience would've been like, Hey, let's make it really hard for people to walk out. And then how do we ... One or two experiments really help people to get back into the experience. And so what was interesting was that we were able to solve this ... And this actually helped drive public 15, 20 million extra month active users a year, but what was also super interesting was that it helped us to realize that getting people back into their account more drove more account content creation on incident in ways that we didn't expect. And so because we were getting people back into the account, people getting into the second account and getting into the third account and they were going into their finsta account and creating content more. And so that actually led to the creation of a multiple accounts team, which is what has made it easy for you to navigate between accounts on Instagram today.

And so that was understandable actually coming to life. It was, Hey, we're going to do the understand work to figure out how to solve account access issues and we're going to solve it. And solving it, when we looked at the data, we're like, Hey, why is all this account, why is all this content creation happening? That was not what we were expecting and where is it happening? And it was happening from second and third accounts. And so that made us realize that oh, people were not only getting locked out of their first accounts, but they were actually creating a lot on the second and third accounts. How can we make it easy for them to get and navigate between their first account, whether it's your account and a business account or your account and [inaudible 01:24:19] account or a bakery account, you know what I mean? And so that created a multiple accounts team, which I ended up owning and that ended up even becoming a bigger effort after I left.

**Bangaly Kaba** (01:24:26):
So that's an example of understand work, solve a real problem, real-solve and solving massive solution, massive impact, creating new data that you didn't expect that drives new understand work, which creates a whole new team to allow you to move around your Instagram account more seamlessly. And you can see this now when you go to post, you can decide, okay, I want to post as Lenny, I want to post as this other thing, or when I want to write a story, you can change anywhere. And that was all an effort that originally came out of this realization.

**Lenny Rachitsky** (01:24:55):
I love how many of these huge impact stories are just such straightforward, simple things like just let people log in more easily, help them log out more effectively, fine, show them their friends versus celebrities. So many of these stories are often just really simple ideas that lead to such profound change. The log-out example is interesting. At Airbnb, we found the log-out was actually causing a lot of churn also, but they went ... Initially, they went with a simple solution of just extend the session, log-out link instead of a week, make it two weeks or three weeks or four weeks. You pointed out with Instagram, people actually wanted to log out. They're like, let's leave that alone. Start with making it easier to log back in.

**Bangaly Kaba** (01:25:35):
That's right.

**Lenny Rachitsky** (01:25:36):
Amazing. Man, you're so full of amazing stories. I'm curious with Facebook, maybe just as I wrap up here, is there anything there? Because you were an early growth PM at Facebook. You worked a lot on friends and helping people discover their friends. Is there anything in there that would be interesting to share?

**Bangaly Kaba** (01:25:51):
In my time, so I joined Instagram or Facebook in 2014 and I was responsible for people recommendations globally. And at the time, Facebook was at scale and big and dominated North America. And so really the focus area at the time was South Asia and Southeast Asia. And we noticed a lot of really interesting things, especially in India. Facebook seemed to be broken from a people graph perspective. The data was telling us people didn't have as many friends in common. In the US, it might've been on just making up a number. On average, we saw 22 friends in common when you make a friendship connection. But in India, it was like seven, right? And then there was a lot of friending and messaging or friending and unfriending. We're like, what's going on here? So we had some hypotheses from the data, we ran a bunch of tests. Nothing seemed to work and be a breakthrough.

**Bangaly Kaba** (01:26:44):
So actually, at that time, I had to propose and they agreed to do this. We needed to do understand work. So we were literally on the ground in India every three months took a team of engineers with me. I'm talking like we're in Delhi in people's homes and Mumbai, and we went to go investigate what was going on, watch people make friends, watch them use people you may know and really understand what was happening and see what was going on because we felt like there was context that we were missing.

**Bangaly Kaba** (01:27:14):
There was a lot of things that we learned. It was mind-blowing. But one of the most interesting things, Lenny, was that we watched people try to make friends and we said, "Hey wait, that's their profile page. Why aren't you looking at it?" And they would say, "Well, that doesn't have any relevant information for me, so I need to go look in the pictures." They're like, "Well, why doesn't the profile page have relevant information for you? That's where the information's supposed to be." And they're like, "Listen, this guy's named Amit Kumar. I have 10 friends named Amit Kumar. What is this page going to tell me?" And they would scroll down, they'd be like, "All of these fields are not relevant to me." And so you look at it, Facebook at the time, it was very Western-centric. It's probably still is, it was like name, it was like school you went to, job title, affiliations, that kind of stuff. That's all Western paradigms. Some of these people are like, my friends sell jeans at a market. None of this is relevant. You don't even know the name of the school. Sometimes it might be a number or something. And so all of the descriptors that we take for granted were not relevant and the names were very common.

**Bangaly Kaba** (01:28:24):
This was really illuminating. So what they would do is go look at pictures and say, is this my friend's car or is this my friend's ... Can I see my friend's animal and what's available? And it was interesting because the understand work, at least the more realization. So we went back to Menlo Park with the data, turned out ... We said, okay, let's look at the data in a different way. What are the most common names on Facebook? And we looked at, and the top 10 common names are Indian names. And the most common name was Amit Kumar. And there was like 250,000 people a month who used Amit Kumar who were real people. So imagine you're in Bangalore and you're trying to find your buddy named Amit Kumar. It's probably 5,000 that we could possibly recommend. So super interesting was like the cultural context was so different. So we had to get creative, find creative ways to figure out how to solve it.

**Lenny Rachitsky** (01:29:12):
The power of understand work shines again. We have a recurring segment on this podcast called Fail Corner where ask guests to share a time they failed in their career and what they learned from that experience because a lot of people look at your career and your story and just like, holy shit, what a journey. I will never be able to achieve this. Is there a time when things didn't go well and something that you took away from that experience?

**Bangaly Kaba** (01:29:36):
Probably for me, I think my time at Instacart was probably not my best time. I think I went to Instacart with a vision of what I felt the product could be or should be. And it was I think a big story that I deeply believed, but I was not, I think aware or in tune with what the DNA of the company was at the time, which was it was like a company that was really great at operations because that was the core of what they did. And they were really building out a lot of their product experience and a lot of what the new function. And so I think what they needed at the time was a much more tactical in the weeds, get your hands dirty, do, do, do because they hadn't really seen that before. And what I wanted to deliver in that experience was more building the right systems, the right people, the right processes so that we can figure out how to institutionalize the work.

**Bangaly Kaba** (01:30:46):
And I think for me that was probably my biggest oversight is that I think they needed more tactical and I was more ... I don't want to say in the clouds, but more thinking about where do we want to go with the experience that we need to build versus let me get deep in the funnel data. It felt like it became loggerheads where I didn't feel like I was probably either delivering what they wanted or being supported in the way that I wanted to be supported.

**Lenny Rachitsky** (01:31:13):
Is the lesson there to spend more time and understand work before you take a job to make sure you're aligned with what they're looking for?

**Bangaly Kaba** (01:31:20):
That is actually the lesson. And I think it's part of that is it's doing that. One of my takeaways is do that not only with the people there but with the people who've left it to, but the people who've left the company will give you a perspective that is raw and different and much more I think aligned with what you want to hear. And it may or may not be the same, but I think the people ... This isn't specific to Instacart. Whenever you talk to people who are at the company, they're always try to tell you the best version of the company. The people who left will tell you what the worst version or their version and it's on you to triangulate that information, but you need both sides.

**Lenny Rachitsky** (01:31:57):
Love that lesson. Bangaly, is there anything else that you want to share or leave listeners with before we get to our very exciting lightning round?

**Bangaly Kaba** (01:32:06):
No, I think we've got a lot.

**Lenny Rachitsky** (01:32:07):
We have. With that, we've reached our very exciting lightning round. I've got six questions for you. Are you ready?

**Bangaly Kaba** (01:32:14):
I am ready to go.

**Lenny Rachitsky** (01:32:15):
First question, what are two or three books that you've recommended most to other people?

**Bangaly Kaba** (01:32:20):
Few I've recommended most of them are Over My Shoulder, actually Range by David Epstein. I think are really critical PM work really being able to be a master of a lot of different things or somewhat deep in a lot of different things. Deep Work, Cal Newport, kind of clearing space to be focused and do the things thinking about the most important work in a deep and undisturbed way. And then Start At The End by Matt Waller, who's a behavioral scientist buddy of mine. Really thoughtful book, helps you really think about what you're building, but in a way that's more holistic.

**Lenny Rachitsky** (01:32:49):
Do you have a favorite interview question that you like to ask candidates when you're interviewing them?

**Bangaly Kaba** (01:32:55):
I've got a relatively new one that I love. This works exceptionally well I believe for more senior hires, whether they're like group product managers, directors, or even kind of senior ICs. I go through and I think about what are the four, usually five skills that are really critical for someone to have in this job. And I think about them myself and I think about the archetypes of what is the ratio I want of these? But then I ask them, I say, Hey, take out a piece of paper or take out your laptop. I'm going to give you five skills and I want you to stack-rank them for me. One to five. So one being the one you're strongest at and five being the one you're relatively weakest at.

**Bangaly Kaba** (01:33:41):
So it's way better than saying give me your strengths and weaknesses. It also forces them to contextualize it against the skills that you're looking for, but it also helps you have a meaningful conversation around how they think about themselves and their self-awareness and to what extent they're ranking these skills based on the context they're in versus their own ability.

**Bangaly Kaba** (01:34:02):
Sometimes you rank something a five because something you would just weak at because you haven't had to do because there's a strong function at that company. And so when they stack-rank it and then people are like ... I've asked this probably four or five times on a recent role. I hire people like, Ooh, this is really hard. But really good question. I usually will dig into what is number two and what's number four and number five, and why? And it really helps me to one, calibrate am I looking for the right person? And two, are their skills actually a match for what we need at this time?

**Lenny Rachitsky** (01:34:33):
I love when I hear a question I've never heard before. That is genius. Next question, do you have a favorite product you've recently discovered that you really like?

**Bangaly Kaba** (01:34:41):
I think one that I enjoy quite a lot ... Actually, it's really kind of ... It's really simple, but amazing is this app called Flighty. You heard of it? F-L-I-G-H-T-Y.

**Lenny Rachitsky** (01:34:52):
No.

**Bangaly Kaba** (01:34:52):
It is a travel app and it manages all of your flight itineraries and your friends' itineraries. But the reason why I love it is it goes two or three clicks deeper than the average travel app or your airline app and it tells you when your inbound plane is running late, it helps you to understand where the gates on. My wife was just in Madrid last week. And she texted me saying, "Hey, I'm at the airport but no gate is announced." I looked at Flighty, I'm like, "Your gate is E67. It's actually been assigned but it hasn't been announced." And this happens a lot in Europe. You'll be there and they won't tell you the gate until an hour beforehand.

**Bangaly Kaba** (01:35:28):
So it gives you so much information right before. It's actually publicly announced, which is really helpful, especially if you really need to be somewhere because oftentimes I know if my plane's going to be late and if I need to rebook before anyone else does, which helps you, gives you a better chance of getting somewhere. Or I will be able to get to a gate, I get to SFO and it might not be on the board at SFO, but I know exactly where it gave you this. So really a great app. Can't say enough about it.

**Lenny Rachitsky** (01:35:53):
I'm downloading it right now. It's got a bazillion reviews, five stars. Thank you for the recommendation. Incredibly useful.

**Bangaly Kaba** (01:36:00):
Of course.

**Lenny Rachitsky** (01:36:01):
I'm trying out a new question. You've joined a bunch of different companies. What's one thing that you've done in the first 90 days at the job that has made a big impact?

**Bangaly Kaba** (01:36:11):
I go and I sit in team meetings and see how they operate. I just listen. I talk to not only the PMs but the content designer and everyone, and I try to get to know them by both name and story. And what I mean by that, it's like oftentimes people, execs come in and they're like, what are we doing? What are we prioritizing? Why does it matter? And they don't really take the time to actually learn who the people are, what the story is, what they care about, what they're passionate about, both professionally and personally and really try to understand how the team is working from that person's perspective.

**Bangaly Kaba** (01:36:52):
And what I find is actually when I do that, people are way more willing to hear ... When it is time for me to share my thoughts, they're way more invested because they believe I'm invested in that.

**Lenny Rachitsky** (01:37:05):
I love that. Two more questions. Do you have a favorite life motto that you really like and find useful and often share with friends or family in work or in life?

**Bangaly Kaba** (01:37:17):
I'm not big on mottos. There's one that I've actually been repeating. I don't remember. I got it done ... It might have been like Adam Grant or someone on Instagram, but it was ... It's one, I said it to a colleague of mine, he's like, "Wow, that really hit differently." I think it goes something like this. People and teams don't really reach ... They don't actually reach their goals. They fall to the level of their systems.

**Bangaly Kaba** (01:37:43):
And that to me was really powerful because I struggle a lot with just being balanced in life, working out the way I want to and getting the right rest and making sure that I'm spending time in all the right places. And that's really like ... It's a goal of mine. But the problem is that I don't ... My system for that specifically, I tend to ... I'm not rigorous with it is when I need to be.

**Bangaly Kaba** (01:38:06):
But on the other hand, at work, I'm very rigorous in the systems and processes. So really that saying to me really hits because it is both applicable to your life and how you want to live your life but also how you want to run your teams.

**Lenny Rachitsky** (01:38:19):
Final question. You mentioned that you were a dean at a school, a boarding school. Is there something that you take away from that experience that's going to sticks with you? I know you mentioned one thing about treat PM's skills are similar to teacher skills. There anything else there?

**Bangaly Kaba** (01:38:34):
Actually, so I was a dean of a boarding school in Switzerland, which was actually one of the most fun and interesting times of my life. It was an American school in Switzerland just outside of Lugano, Switzerland, the Italian-speaking section. I learned a lot about myself during the time. I learned a lot about just relationships and people. I actually had a call with one of my old students this morning. She's like in her thirties now. This was like 20 years ago. So I still keep in touch with them. And I think that's the comment I made about knowing people by name and story matters a lot. It says a lot that 20 years later I'm still talking to some of these students who are their own adults running their own businesses. But also I think the human challenges and human connection, human problems, very universal.

**Bangaly Kaba** (01:39:24):
This was a really interesting place when you had kids coming from a variety of different walks of life, some who lived in Azerbaijan or Kosovo and felt like ... The families felt like they couldn't be safe there, so they wanted to send the kids somewhere else. So some kids whose parents worked at the US Embassy and just were kind of there for a little bit of time. And what I found to be true is that just spending time with people and understanding their own story and family life really led to a lot of shared interests and passions. And it helped really me to see that the world can be very similar in so many ways and it is very much reflected to me in my day-to-day life in tech because as you know in the Bay Area, there's so many people who come from so many walks of life who end up in this journey building these products and companies and just help me to value so many different voices.

**Bangaly Kaba** (01:40:15):
If you want to build world-class products, if you want to build product that can scale around the world, if you want to build product that's be hypergrowth, you have to be inclusive of so many voices. And so you have to build that skill to be able to acknowledge and learn from and to live in tension with different voices.

**Lenny Rachitsky** (01:40:32):
That is beautiful. I love that we're ending there. Bangaly, I feel like we've done a lot of understand work and I think we've helped a lot of people with a lot of things we talked about so much. Two final questions. Where can folks find you online if they want to follow what you're up to, and how can listeners be useful to you?

**Bangaly Kaba** (01:40:47):
For as much as I've worked at social companies, I actually don't use my social products that much. I'm on Instagram. If you look @iambangaly, I-A-M-B-A-N-G-A-L-Y, Google that. All of my socials handles all have the same kind of link including LinkedIn. So hit me up whenever. And then what can people do useful for me? I don't know. I don't have a short list. I would say I love to hear people's stories. I love to give advice. Obviously, my time is a little bit limited occasionally, but I think if people can share with me things that they're learning or things that they see in the market, or if they have questions, I always love to hear it. And so I think for me, just hearing other people's stories and learning what other people are doing is probably the most rewarding for me.

**Lenny Rachitsky** (01:41:35):
Bangaly, thank you so much for being here.

**Bangaly Kaba** (01:41:38):
Thank you. This is amazing. I really appreciate you, Lenny.

**Lenny Rachitsky** (01:41:40):
Bye, everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app.

**Lenny Rachitsky** (01:41:49):
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.

---

## [14/21] The surprising truth about what closes deals: Insights from 2.5m sales conversations | Matt Dixon (author of The Challenger Sale and The JOLT Effect)

**Matt Dixon** (00:00:00):
We collected two and a half million sales calls and studied them with a machine learning platform at scale.

**Lenny Rachitsky** (00:00:05):
The big insight is that you're losing most of your sales deals, not to competition, but to indecision.

**Matt Dixon** (00:00:12):
And that indecision stems from their fear of failure. Dialing up the FOMO backfires 87% of the time. They're not afraid of missing out, they're afraid of messing up.

**Lenny Rachitsky** (00:00:20):
You just talk about how to actually leverage these insights to improve your sales process. You have something, I think you call it the JOLT method?

**Matt Dixon** (00:00:25):
Yeah, JOLT them forward. The first thing is we've got to judge their level of indecision. The second thing is we've got to offer a recommendation. The third thing is we've got to get them to start trusting us and we call it limit the exploration, and the T is we've got to de-risk the deal. We've got to take some risk off the table. 

**Lenny Rachitsky** (00:00:38):
Great segue to The Challenger Sale, which is basically this on steroids. 

**Matt Dixon** (00:00:41):
Most salespeople are trying to figure out what's keeping the customer up at night. The challenger approach is about showing the customer what should be keeping them up at night. What's a risk that they don't know about but you do. 

**Lenny Rachitsky** (00:00:51):
Holy moly, this is going to be the most action-packed, high-density podcast episode we've done. Today, my guest is Matt Dixon. Matt is one of the world's foremost experts in sales, known for his groundbreaking research into what makes the best salespeople different from everyone else. His first book, The Challenger Sale, was a number one Wall Street Journal bestseller and has sold over a million copies worldwide. His most recent book, The JOLT Effect, builds on his lessons and insights and will change how you do sales. 

**Lenny Rachitsky** (00:01:23):
In our conversation, Matt breaks down what you're probably doing wrong in your sales process based on research, into millions of sales conversations, and then how to tweak your process to be a lot more successful. This episode is for anyone that wants to improve their sales skills or improve the rate at which they close deals. 

**Lenny Rachitsky** (00:01:40):
With that, I bring you Matt Dixon and if you enjoy this podcast, don't forget to subscribe and follow it in your favorite podcasting app or YouTube. It's the best way to avoid missing future episodes and it helps the podcast tremendously. Matt, thank you so much for being here. Welcome to the podcast.

**Matt Dixon** (00:01:59):
It's great to be here. Thank you for the invitation, Lenny.

**Lenny Rachitsky** (00:02:01):
It's great to have you here. First of all, a huge thank you to April Dunford for connecting us. She's a huge fan of your work. She mentioned you a number of times on the podcast episode that she did. She's great. 

**Matt Dixon** (00:02:11):
Yeah, she's very nice. 

**Lenny Rachitsky** (00:02:12):
She's amazing. You basically spend your time researching salespeople and digging into what makes the best salespeople different from all the rest, and then synthesizing these lessons into these really actionable pieces of advice so that anyone can become better at sales, which to me feels like a dream come true even if I'm not a salesperson, even though many of us do sales part-time, but especially if you're a salesperson. 

**Lenny Rachitsky** (00:02:40):
First of all, just to give people a sense of the work that you do, could you just talk a bit about the research that went into the books that we're going to talk about, we're going to be focusing on The Challenger Sale and The JOLT Effect. What is the research they did?

**Matt Dixon** (00:02:53):
Yeah, sure. Just start with The Challenger, because that chronologically came first. We actually started that research study in, I think it was in late 2008 actually, and we published the initial results to, at the time I was working for a company called CEB, which was acquired by Gartner Group in 2017, a research organization, and then I was running the group that served heads of sales, business, business heads of sales around the world. We had five or 600 clients around the world, and we launched that study in '08. 

**Matt Dixon** (00:03:24):
We published the initial results for our clients in '09. We kept collecting some data and then we published the book in 2011. The book was published off a data set of 6,000 salespeople, so we did an in-depth survey with 6,000 salespeople, as well as collected performance data on those 6,000 sellers. It was a global, cross industry, different types of companies as well, product companies, services companies, large, small, slow growth, fast growth, you name it.

**Matt Dixon** (00:03:50):
Overtime, though, that research has been ongoing, so we've collected data. I think to date, on roughly a quarter million salespeople around the world that we continue to go back and not just validate the original findings, but look at how things are changing and do cuts of the data now that the data set's so big. That was a survey based piece of research we did. 

**Matt Dixon** (00:04:11):
The JOLT Effect, we started that research in 2020, actually. It was actually in March of 2020, which I think is a time that everybody remembers with probably mixed emotions, most of them bad. I think though, you remember March was a time when people were getting into Tiger King and baking sourdough bread. A few months later, that got really old, but in the beginning it was kind of surprising and weird and this whole pandemic thing, but we actually thought because we're huge nerds, that this would be an interesting time to do a sales research project.

**Matt Dixon** (00:04:44):
We had always been fascinated by what Professor Neil Rackham did back in the '70s and '80s and spin selling, and he and his research team sat in on 30 something thousand sales calls, physically sat in on these meetings and took notes. They're a team of psychologists to produce the research that went into spin selling, and so we always kind of aspire to get, if you will, at the coal face or where the rubber hits the road in sales, which is the sales conversation when that salesperson is sitting across from the customer. 

**Matt Dixon** (00:05:11):
The problem with that is it's really hard to get people to pay for that kind of research, that kind of undertaking, and then let alone, getting invited into those meetings because a lot of the really critical sales meetings took place, of course, in the client's office. Until March of 2020 when that all changed and the entire sales process for every company on Earth went to Zoom and Teams and Webex and other virtual platforms.

**Matt Dixon** (00:05:34):
We recruited several dozen companies across industry and around the world into a large global study, and we collected two and a half million sales calls and studied them with a machine learning platform at scale. That was a very different kind of research project and honestly, it's fun just as a researcher to look back on Challenger and the manual survey-based approach and the interviews and all this stuff to fast forward to today, being able to take advantage of large data sets and advance technology to study millions of sales conversations is pretty cool.

**Lenny Rachitsky** (00:06:07):
Amazing. Okay, so the second book, the most recent book, The JOLT Effect is based on these two and a half million sales conversations. 

**Matt Dixon** (00:06:13):
Mm-hmm. That's right.

**Lenny Rachitsky** (00:06:14):
I love insights that come from tons of data, so this is most excellent. This episode is brought to you by Enterpret. Enterpret unifies all of your customer interactions from Gong calls, to Zendesk tickets, to Twitter threads, to app store reviews, and makes it available for your product team. It's used by leading product orgs like Canva, Notion, Loom, Linear, and Descript, to accurately integrate the voice of the customer into your product development process, helping you build best in class products. 

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**Lenny Rachitsky** (00:08:05):
Let's dive into the insights from The JOLT Effect. The way that I understand is the big insight is that you're losing most of your sales deals not to competition, but to indecision. Basically, customers preferring to do nothing versus choosing something because they are afraid of making a mistake.

**Matt Dixon** (00:08:24):
Good summary. Yeah, [inaudible 00:08:25], if you're busy, you said it more succinctly. I've been doing this for a while now and you said it way more succinctly than I can. Just to back up for a little bit, I think one of the data points I always start with when I present the research on The JOLT Effect is that our analysis showed that anywhere between 40 and 60% of the average salesperson's qualified pipelines, these aren't just leads, sometimes bad leads that are thrown over to us by marketing, these are qualified opportunities. 

**Matt Dixon** (00:08:53):
These are people we've met with, customers we've pursued, we've engaged, they're in the sales process, 40 to 60% of them will be ultimately marked as closed loss, no decision. That's actually, I think that number is actually on the rise, especially in places like SaaS and the broader tech sector over the past year and a half, but that's a really painful thing. 

**Matt Dixon** (00:09:13):
If you think about as a salesperson, that for 46% of your deals, you're going to spend a lot of time, energy, resources, a lot of your company's money and their time and resources pursuing these opportunities where you eventually just get ghosted and you don't really know what happened, just like the customer, the opportunity evaporated on you, they ghosted you, they want radio silent. You don't really know what happened there. 

**Matt Dixon** (00:09:35):
We decided to take this two and a half million sales call dataset, which you could have used to answer lots of different questions, but we were really fascinated by this question, maybe two, two questions. One is why do customers make no decision? Because you understand it's frustrating as a salesperson, but it's also puzzling for customers to do that. They go through the entire process to evaluate a solution, and many of those customers say, "Yeah, I want to buy," and then they ghost to the salesperson and it's so puzzling. 

**Matt Dixon** (00:10:02):
Why would they waste their own time evaluating a solution than doing nothing? Then, the more important question is probably what are the very best salespeople do differently? What have they figured out to avoid that outcome? 

**Lenny Rachitsky** (00:10:13):
Cool, and we're going to talk about that latter part to help people understand why, because it sounds like, okay, I guess this happens, but help people understand why this happens. Why are people nervous to make a mistake and not make a decision at all?

**Matt Dixon** (00:10:24):
Let me maybe take us a step back, Lenny. There was a reason we actually even asked that question that you just asked, and the reason was this, when we looked at sales calls, if you think of the typical sales process or buying journey, it kind of moves through three phases. Phase number one, is the customer in their status quo. It's what they do today. They use your competitor's product. Maybe they do use a homegrown solution, maybe they never saw a need for a solution like yours, but that's their current state. 

**Matt Dixon** (00:10:51):
Step two is we've got to get them to agree that the current state is no longer acceptable and they've got to move forward in a new and different way. We call that agreement on a vision. We've got to get their intent to move forward and to change, and that step number three is you got to get them to buy something. That's the action step where they execute the docuSign, they sign on the line that is dotted and they send the contract back. 

**Matt Dixon** (00:11:11):
It's a simple three step process, and what we found in our analysis is one of the big places where a lot of deals fall out of that process is between intent and action. It's after the point where the customer says, "Yeah, Lenny, this sounds great. I'm sold. Let's talk." But before the point where that actually deal gets sold, a lot of deals kind of go sideways in that moment and the way this comes across in sales calls is that customers start, if you will, relitigating concerns that they had asked and you thought you'd address much earlier, like what might go wrong and is this really the right answer for us? 

**Matt Dixon** (00:11:45):
These are things that are puzzling to salespeople because it feels like this thing is slipping through my fingers right before my eyes. I thought we had this closed. I thought you said you want to move forward and now you're asking questions that we addressed three months ago, what's going on? 

**Matt Dixon** (00:11:58):
What salespeople tend to do, because they've grown up in a world where they've been told, the only reason the customer hesitates is because you haven't put to bed their status quo bias. We all know, we're all human beings, not just customers, but perhaps especially customers, are guilty of status quo bias, meaning we are prone to laziness and doing nothing because it's easier, it's inertia. It's easier to just keep doing more of the same than to change behavior. 

**Matt Dixon** (00:12:23):
Change is really hard and salespeople have been taught that the status quo is their biggest competitor, and if the customer is starting to get cold feet, it's because they still think either what they're doing today is good enough, what you are proposing is not a compelling enough reason to change, or maybe it's just not a top priority for them or their organization. It's got to be one of those reasons. 

**Matt Dixon** (00:12:43):
What salespeople have been armed to do is go out and dial up the FOMO and make the customer sweat a little bit. The first thing they do is they say, "Lenny, remember the demos and the proof of concept trial, how excited you were and those benefits, you got to pay for it. You're not going to get all those great benefits for your organization unless you sign the agreement." 

**Matt Dixon** (00:13:03):
If that doesn't work, I'll try to kind of scare you into action by dialing up the fear, uncertainty and doubt and saying, "Lenny, you told me about these problems in your business. You guys are really struggling right now. By the way, did I mentioned, we're working with all of your competitors and they're seeing tremendous benefits from our product and you're going to be left in the dust and those problems you brought up with me, they're not going to solve themselves." 

**Matt Dixon** (00:13:22):
I'm trying to create that burning platform a little bit for the customer and get them to realize the cost of their inaction. There is a cost of doing nothing, and if those two things don't work, what most salespeople go to is the 10% discount that's only good this quarter. It's like the price driven urgency. Maybe this will be the thing you need to just get you over the finish line. 

**Matt Dixon** (00:13:43):
What we were so surprised by which led us to the question you asked, Lenny, was that 87% of the time when salespeople do that dial up the FOMO in those moments, especially with a customer who says that they're ready to move forward, but they start to backpedal and waffle and waiver and become hesitant dialing up the FOMO backfires 87% of the time. In other words, it increases the odds, the deal will be lost to no decision.

**Matt Dixon** (00:14:06):
If it weren't for that finding, we never would've even bothered asking the question about why do people end up, why do we lose deals to no decision, why do customers make no decision, but this was really puzzling because it flew in the face of everything we talked about, including in Challenger, to be totally candid. We talked about how challengers are exceptional at breaking the customer's status quo bias by showing them the pain of same is worse than the pain of change. 

**Matt Dixon** (00:14:29):
Again, overcoming that inertia, that not just individuals but organizations suffer from. Challengers are really good at that. Here, we see that the tactics that you might associate with challenging actually kind of backfire, which was, as the author of The Challenger, still a little bit troubling to me, but we'll come back to that, but I think what we realized was we got it right, but we got it kind of half right.

**Matt Dixon** (00:14:50):
We went into the data and we asked a slightly different question, which is why are deals lost in no decision? What drives that? We found that actually, there are a lot of deals that are lost because the customer does actually prefer their status quo. That is status quo bias. They believe what they're going to say is good enough, what you're talking about, it's not a compelling enough reason to change or this is not a top priority. 

**Matt Dixon** (00:15:11):
Those are all status quo preference reasons, but it turns out those are only 44% of the no decision losses, 56% of no decision losses are customers who want to buy but can't buy because they're stuck in this no man's land of indecision, and that indecision itself stems from their fear of failure, which you put your finger on earlier, and this is the part I found so fascinating, so we dug into the psych research. We read probably 30 years of cognitive psychology journal articles, many of them from Dutch universities, which I find very interesting, but a fairly very big into this stuff. 

**Matt Dixon** (00:15:49):
A lot of the Kahneman and Tversky work around loss aversion and prospect theory, et cetera, and one of the big findings we came across is that there's actually a more powerful human bias, even more powerful than status quo bias that rears its ugly head and causes indecision, and that is called the omission bias. 

**Matt Dixon** (00:16:06):
The omission bias is, if you get down to it, is the fact that people don't want to be blamed for making decisions that lead to a loss. In the human mind, there are two types of loss that we think about. We all like to avoid loss, but not all loss is created equal. There are losses that happen when we do nothing, and then there are losses that happened because we did something. 

**Matt Dixon** (00:16:25):
We made a decision, we picked a vendor, we executed a contract, and then something bad happened. It turns out that in the human mind, people are okay with missing out. They are not okay with messing up and being blamed, and this is really powerful. It's even more powerful than status quo bias, as I said. 

**Matt Dixon** (00:16:44):
The shorthand for salespeople is this, dialing up the FOMO can be very effective to overcome status quo bias, but knowing that every human being, including all of your customers, who I include in that definition of human beings are definitely afraid of being personally blamed if things go wrong. The FOMU actually matters more than the FOMO. The FOMU is the fear of messing up or in the not safe for work version of your podcast, I'd say FOFU, but your listeners can figure out what that stands for on their own, but this is really powerful for salespeople, right to understand. 

**Matt Dixon** (00:17:16):
Look, if you are trying to scare your customer into action, you're going to miss out on these benefits. You're going to miss out on solving these problems. You're just going to pay more later if you don't say yes now. What you're really doing is using scare tactics, but you're trying to scare somebody who's already afraid. The problem is they're not afraid of the thing you think they're afraid of. They're not afraid of missing out, they're afraid of messing up. 

**Matt Dixon** (00:17:36):
We've got to address that as salespeople. We've got to help instill the confidence in the customer that you're making a great decision. I've got your back. You're going to look like a hero, not like a fool and that's really what The JOLT Effect is about. It's about how the very best salespeople execute that. It wasn't that we're wrong with Challenger, it's just the story was kind of incomplete. 

**Matt Dixon** (00:17:55):
You got to break status quo bias. If you don't do that, you're never going to have an indecision problem, but even once you overcome the customer's indifference and their status quo bias, you got to second battle you've got to fight, which is you've got to instill the confidence and make them feel good about this. Frankly, leap of faith they're about to take and their fear, you got to deal with the fear that if something goes wrong, they're worried that they're going to be blamed for it.

**Lenny Rachitsky** (00:18:16):
We're going to talk about this method you developed for how to actually do all the things you're talking about, but first, to make this even more real, what I'm thinking about is an example. Is a good example, maybe a CRM, like a better CRM product, say someone has Salesforce installed and now they're like, maybe there's probably something better out there we should probably evaluate. 

**Lenny Rachitsky** (00:18:34):
Then, I'm thinking from the perspective of a startup trying to build a better CRM. There's always this advice, you have to be 10 times better for anyone to pay any attention. I think that feeds into exactly what you're showing is it needs to be so much better that this fear is reduced. Can you just talk about maybe an example, whether it's that one or a different one to make this more concrete?

**Matt Dixon** (00:18:52):
We encountered a ton of examples. It's so interesting you mentioned startups and I think sometimes, I was actually with a big enterprise software company and I think when, and I presented this research to some of their sales leaders and one of the folks in the room said, "I'm really glad we are who we are, that we are the 800-pound gorilla, especially in a market like we're in right now," because as the old adage goes, it wasn't IBM, but the old adage is that nobody ever got fired for buying from IBM, right? 

**Matt Dixon** (00:19:21):
This company is like the IBM of their space. They're the 800-pound gorilla. They've got the brand strength, the reputation, they're the safe choice. This team felt kind of comfortable or comforted, I should say by that fact, especially in a tight environment where it's a battle for deals and for mindshare and for wins out there in the market right now, especially in tech.

**Matt Dixon** (00:19:42):
What I said is you've got to remember though, that may be true, and I would argue, and I think you're right, that for a startup, yeah, you've got to be 10 times better to get that mind share. It may be even better than that to get somebody to take a leap of faith with you. There is inherent risk in going with the unproven player, but I cautioned these folks and I said, "Now, remember, what are the things that drive fear of failure and indecision?" 

**Matt Dixon** (00:20:08):
It turns out there are three big ones. The first one is have I made the right choice? I know I want to work with this vendor, but did I configure the solution of the proposal the right way, the right contract length, the right implementation, the right used cases, the right integrations, all that professional services or DIY, all those big questions.

**Matt Dixon** (00:20:26):
The second thing that customers worry about in their second fear of failure is that they're going to learn something after the contract is signed that's going to make the decision look like not such a great decision. I'll give you a really specific example about this. I spoke to a tech company not too long ago, maybe a month ago, and they landed their biggest deal of their existence. It was an early stage company, seven-figure deal, game changer for this organization. Then, they beat out some big established competitors. This is a huge win. 

**Matt Dixon** (00:20:54):
They went out. They celebrated. It was just totally amazing, their first big enterprise win and their first seven-figure deal and their first victory against some of these incumbents. Unfortunately, about two weeks after they won this deal, the new Gartner Magic Quadrant on their space came out and they were shown to be kind of, eh, right? They weren't the leader, but they were sort of middle of the pack.

**Matt Dixon** (00:21:16):
All of a sudden, the client who signed the agreement, the CTO just got crap rained from everybody saying, "Did you see the Gartner Magic Quadrant? It looks like the company we just plunked down seven figures with was kind of seen as so-so by the Gartner analyst? Have we talked to these guys and those guys and why aren't we going with the leaders," and blah, blah, blah? 

**Matt Dixon** (00:21:36):
They ended up backing out of the contract because the CTO said, "I'm spending every day talking to all the other key stakeholders trying to convince them that yes, we did all of our due diligence, but life is too short and we're probably going to end up going with one of the big players. We're sorry. I mean, that's such a painful story, but that's the customer is like they're going to keep doing research because they don't want to be surprised when some new piece of information comes to light. It's the second big fear of failure driver or failure driver. 

**Matt Dixon** (00:22:03):
The third one is that the customers are worried they're just not going to see the ROI. They're not going to get the full benefits. You might project for them a 5X improvement in sales productivity. What if it comes in at two or three X and my name's on the agreement and the CFO comes asking why we didn't get the benefits we thought? In today's environment, that's not just egg on your face, you could get fired for that stuff. 

**Matt Dixon** (00:22:26):
This is the client who's really looking for that vendor to have their back and to assure them that they're going to see the benefits that are being projected and promised through the sale. What I said to this big enterprise tech company was, "Look, you guys, yes, it's tough to be a startup right now, early stage company, there's a lot of risks there, but who's offering more choices, them or you guys? You guys have a partner ecosystem. You have 20 different cloud products. You bought seven companies in the past three years. You have a cornucopia of options, which adds to the buyer's anxiety that they haven't chosen the right thing. 

**Matt Dixon** (00:22:59):
Second, do you think there's more written about you guys or about them? You could fill a football stadium with all the coverage on you guys. I mean, everybody's got an opinion about you because you are the 800-pound gorilla and everybody's worked with you before and they have opinions, good and bad, and people want to leave no stone unturned. 

**Matt Dixon** (00:23:17):
Then, lastly, it turns out you guys are a lot more expensive because you're trying to move from selling simple products like these ankle biters out there, these startups into selling big enterprise solutions. You guys are selling not seven-figure deals, eight-figure deals, nine-figure deals to your customers. That increases the customer's anxiety that I really have to see return on this. 

**Matt Dixon** (00:23:36):
You, in many respects, are getting whipsawed by these factors in a way that the startups are not because they don't have as many choices. There's not as much coverage about that. The investment is lower, and so there's a little bit less risk for the customer. You guys aren't immune just because you're the big brand."

**Lenny Rachitsky** (00:23:53):
You're doing a great job making it clear why it's so nerve-racking to buying new software. There's just so many things that could hurt you as a person at a company. April Dunford, I think this is barred from your language that she talks about how it's actually more stressful these days to buy software than to sell software because of all these things you've talked about.

**Matt Dixon** (00:24:13):
Yeah, I think she's on point on that one. I mean, your customers are, yeah, they're really, really afraid of this not panning out. It was so interesting, and salespeople can think of so many different occasions where the purchase buying your product, just made all the sense in the world for the customer, it would make things so much better. It would solve such big problems for them. 

**Matt Dixon** (00:24:37):
They're so dissatisfied with their current approach. It's just a no-brainer, and the customer will look at that and they will agree with you and they still won't make a decision because of the what-ifs, right?

**Lenny Rachitsky** (00:24:47):
Yeah. This is got to be very frustrating for founders to listen to and be like, "Come on, our product is so much better. What are you doing?" But I think this explains a lot of the challenges they're probably having. 

**Lenny Rachitsky** (00:24:58):
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**Lenny Rachitsky** (00:26:02):
It's a great segue to talking about how to actually leverage these insights to improve your sales process. You have something, I think you call it the JOLT method?

**Matt Dixon** (00:26:10):
Yes. Yeah.

**Lenny Rachitsky** (00:26:11):
Awesome. Let's get into it.

**Matt Dixon** (00:26:12):
The JOLT, it's an acronym. It just so happened it worked out that way, but I like it because it's memorable, but it also speaks to what's happening. Our customers' stuck in their indecisive state. They want to buy from us, but they just can't because worried about what might go wrong. You got to JOLT them forward. We got to JOLT them into action.

**Lenny Rachitsky** (00:26:12):
Beautiful. 

**Matt Dixon** (00:26:30):
How do we do it? The first thing is we've got to judge their level of indecision, we've got to figure out what we're dealing with. The second thing is we've got to offer a recommendation. The third thing is we've got to get them to stop doing endless research and start trusting us and limiting, we call limit the exploration, and the T is we've got to the derisk the deal. We've got to take some risk off the table, and we establish that safety net for the customer so they feel like we've got their back. 

**Matt Dixon** (00:26:49):
Maybe we talk about each of those. I'll start with the J because it's first, but also I think the way, while it's kind of linear, I would encourage listeners don't think about this as a process where it's like I do step one, two, three, four, J-O-L-T. Think of it as it starts with the J, and the J tells you what the next step is. Is it the T? Is it the L? Is it the O? Is it the O, and then we got to deal with the T. Then, we got to go back to the O because it comes up again. 

**Matt Dixon** (00:27:14):
Think of it as sort of the dividing rod. How do we figure out what's got the customer nervous? This is a really, really, really tricky thing because, and I've likened indecision to the carbon monoxide poisoning of sales. It's everywhere, but it's odorless, it's tasteless, but you need a carbon monoxide detector, and that's what the J is. 

**Matt Dixon** (00:27:37):
How do we get fear of failure on the table? The problem with this is that, and I think most of your listeners will be familiar with this, everybody, especially customers suffers and senior executives especially, especially, suffer from what's called the Dunning-Kruger effect, which is they think they're better at things than they really are and decisiveness is one of those things that buyers will think they will say they think they're decisive. 

**Matt Dixon** (00:28:00):
In fact, if you surveyed your customers, not that they recommend this, and you add 100 of them, if they consider themselves to be decisive folks, like 99 out of 100 will say, "Absolutely, yes, I make the tough calls. I manage from the gut. I live on the edge as an executive making those big calls," but the research tells a very different story. It turns out that 87% of buyers in our two and a half million sales calls we studied, either showed moderate or high levels of indecision. 

**Matt Dixon** (00:28:25):
The folks who are not worried about fear or failure were 13%. Yeah, those people do exist. By the way, if you find one of those people, you should sell them everything as soon as possible because they're making the decision quite literally on the dollars and cents and the ROI and whether it makes sense for their business. It's a rational decision for them, but for the rest, they're dealing with a lot of emotion, and that emotion is all wrapped up with fear of failure. 

**Matt Dixon** (00:28:48):
What's so tough about this is that it's not just Dunning-Kruger like we think we're more decisive than we really are, even if your customer knows that they're indecisive or they're worried about failing or how their boss is going to perceive them, if this purchase doesn't pan out, they don't like talking about it because it's embarrassing. They don't want to talk about like, "God, I got to tell you this better pay off because if it doesn't, I'm already on thin ice with my boss. She doesn't like me already. This is going to be the last straw." Nobody's going to say that stuff. 

**Matt Dixon** (00:29:17):
How do we get on the table? One of the things we don't think works particularly well are classic open-ended questions like, "Lenny, do you find when you go to the Cheesecake factory, do you leave satisfied or hungry because you can't decide what to order?" I guess, it's not great approaches with customers, you'll end the sale pretty quickly because again, your customers find that kind of offensive. They'd like to think of themselves as decisive people. 

**Matt Dixon** (00:29:39):
We found a technique, this is actually not in the book, we found it after we wrote the book, called pings and echoes that high performers use. Think of the way a surface ship might detect a submarine in the water using sonar. They send a ping out into the water and they're listening, if you will, using sonar for the reflection back and the reflection tells them, is it a friendly submarine, an enemy submarine? Is it just a whale? Is it heading towards us? Away from us? At what speed are they about to torpedo us? All that good stuff. 

**Matt Dixon** (00:30:08):
We want to do the same thing in sales. The way this works is that a salesperson will try to articulate but in a non, not to out the customer, but to get confirmation or refutation, if you will, that what they've articulated is actually a concern for their buyer. 

**Matt Dixon** (00:30:25):
Hypothetically, let's imagine we're talking about a purchase and we've had a lot of great conversations. I've shown you a lot of demos. You guys have liked everything we've shown. We showed you partner options. We showed you different configurations. We did POC over here. We did a pilot over there. You guys are just eating it all up, but I'm kind of getting the sneaking feeling that you guys actually don't know what you want and we've shown you a lot and we've probably made that problem worse. 

**Matt Dixon** (00:30:49):
What I might say to you is, "Lenny, I'm just curious if we could calibrate here for just a moment, and there's a reason I'm asking this, which is a lot of the customers at this point in our process of working together, they get almost overwhelmed with all the options, and look, I probably made this worse. We're very proud of what we do. I want to show you, paint the art of the possible, but I also know if we're going to do business together, you told me right away budgets are limited and you can't have it all. You've got to decide what's nice to happen and what's need to happen. I'm just curious, are you and your team clear on what would be in and out of the proposal?" 

**Matt Dixon** (00:31:25):
What's going to happen is one of two things, one you might say, or a few things, you might say, "You know what? No, we don't know and we have liked everything you've shown us, but as you said, we can't have it all. So, we'd be really curious to know what do other companies like us start with? How do we get going? What are the things we can do without and we can maybe add later on down the road," or you might get the customer says, "No, no, no, we were just being polite. There's a lot of stuff you showed us that we're not actually that interested in. It's cool, but it's just not for us. We are very clear on what we want. 

**Matt Dixon** (00:31:55):
So, let me share that with you now. However, what I'm really concerned about is once we get this kind of specked out and configured and priced, I'm going to take it to the CFO because I've got to get her approval on this and I can't build our business case on the claim you guys make about improving sales productivity by 10% because she'll laugh me out of her office. Help me get grounded in what's a believable outcome for us so that I can sell it and I can be confident we're going to actually hit it." 

**Matt Dixon** (00:32:25):
Again, it's not designed to embarrass the customer, it's designed to get this on the table so it can be recognized and dealt with and contextualized. You're totally normal. Everybody struggles with this. There's a lot of stuff we throw in front of people and it ends up doing some harm. They don't know what to pick. Let me be of service and value to you. 

**Matt Dixon** (00:32:42):
That's the first thing that we point to and that's going to tell us, okay, is it a choice problem? They're overwhelmed. They don't know what to choose, like that example we just used. Is it that they're just doing endless research and they feel like they haven't really come down the learning curve yet around this purchase or is it, no, I don't actually know that we're going to get what we're paying for here and we screw this stuff up every day of the week at twice a Sunday and I don't think it's going to be any different and then I'm going to get blamed, so help me manage the downside risk, but it tells us kind of where to go next on that journey, if that makes sense.

**Lenny Rachitsky** (00:33:12):
Yeah. Awesome. The advice there is basically get a sense of how clear they are internally on knowing exactly what they want that'll help them make a decision. There's kind of this moment of, okay, let's just help me understand the question, the way you phrased it, are you and your team clear on what would be in or out of this proposal?

**Matt Dixon** (00:33:31):
Yeah. That's just a one example. That's if I hypothesize that you're really struggling with what to choose. Now, my hypothesis might be, you know what you want. You've done plenty of research, but you're really worried about the ROI and you're just worried you just aren't going to be able to accomplish that. 

**Matt Dixon** (00:33:47):
That ping might sound very different. It might be we've been having a discussion about, you've been asking for multiple terms of the ROI calculation and changing parameters and really trying to make it bulletproof, but a lot of customers struggle with that a little bit because that's a big thing. You're putting your name against that. Maybe we should have a conversation about whether that's a concern for you. Is there a believability gap? Is there an execution gap you're worried about on your side or on our side? 

**Matt Dixon** (00:34:15):
Let's have a conversation about that so I can set the proper expectations so you feel really confident going to the CFO and lobbying for investment here. That ping could go in, but it's based on what I think is holding you up.

**Lenny Rachitsky** (00:34:28):
Got it. It's just like at this point, many customers have this question... 

**Matt Dixon** (00:34:32):
Yes. Yeah.

**Lenny Rachitsky** (00:34:33):
... and that maybe comes from the thing that you think is probably blocking them. 

**Matt Dixon** (00:34:36):
Yeah, I think that's perfect language. At this point, most customers like you, are thinking about this or they're worried about that, or they're getting a little anxious about this. Let's have a conversation about it.

**Lenny Rachitsky** (00:34:46):
Awesome. Okay, cool. Let's go to step two, offering your recommendation.

**Matt Dixon** (00:34:50):
Sure. Oh yeah. This was right with that example we talked about before. Options are really a double-edged sword. What we know from the research is that options are great early on. If you're meeting at the trade show and the customer's swinging by your booth or you're doing a first demo or first, let a thousand flowers bloom, but if you want the customer to actually make a decision, you've got to get the weed whacker out and call it down to a manageable set of choices. 

**Matt Dixon** (00:35:17):
The science is very clear on this, that too many choices at some point will overwhelm the customer and it leads to a lot of bad outcomes. It leads to the customer not making a decision at all because they don't want to make the wrong decision. I don't want to work with you, but you put so many options in front of us. I don't want to be blamed if I choose the wrong one and it leads to things like post-decision dysfunction, which is, I thought I made the right decisions, but now I'm learning more and people are asking hard questions and maybe I need to go revisit this. Hey, Lenny, we're going to have to scrap that agreement and start over because I don't think we can figure this right way. 

**Matt Dixon** (00:35:49):
We have to, there's a time and place to offer options, and there's a time and place to narrow choices up. The simple guidance here for salespeople is that you've got to shift your posture from asking the customer what they want and just diagnosing their needs, to actually recommending to them what they should do. Salespeople get a little bit anxious about this, I find, because they don't want to be seen as like, I told you to do A, but you're like, I don't want to do that. I want to do B and now I feel like we're at odds. 

**Matt Dixon** (00:36:16):
They worry about that. Salespeople have grown up in this world that it's the customer's choice. The customers always right, let me just guide them, but they're the ones should make this decision, but sometimes the customer can't and they don't know enough about these decisions. We know the stuff because we eat, sleep, and breathe it every day as salespeople. We work in this industry, they don't. 

**Matt Dixon** (00:36:35):
We are in a much better position to be able to guide them toward, you know what? You don't really need X, Y, and Z. You can leave that out of the proposal. Companies like you, they get started in this way. Let me put three options in front of you. I would go with the middle one because I really think that's going to be the best for you in the first year, and then we can expand from there.

**Matt Dixon** (00:36:54):
Here's an analogy, I'll often tell people to think about the last time they went to a fancy restaurant and they looked at a menu with some expensive entrees and everything looked delicious, but they didn't know what to order, so you asked the wait person what they recommend. How helpful is it if that wait person says to you, "Well, what are you in the mood to eat tonight?" It's no help at all, right? You're no closer to a decision. They basically just dump the problem back on your lap.

**Matt Dixon** (00:37:17):
But what a great way people do is they say, "If you want my opinion, I love this dish and I'd probably say it's our most popular. We sell out of it every night. We've still got it. So you're in luck. It's a lot of food though, it's a big portion. If you're in the mood for something lighter, there's a vegetarian option. It doesn't get as much play on Yelp, but I love this one. It's absolutely delicious. It's one of our kind of dark horse favorites, if you will, but remember, everything we make here is delicious. If you don't like those choices, you're not going to go wrong with any of them, but those are just my favorites." 

**Matt Dixon** (00:37:46):
Now, what happens in that moment is what psychologists call the delegation effect, which is rather than the burden of a bad decision being solely on the shoulders of the decider, that burden is now shared. Now, think about it, if you order the dish the wait person recommended and you don't like it, whose fault is it? Well, technically it's your fault because you ordered it, but it's also kind of their fault because they recommended it. 

**Matt Dixon** (00:38:07):
You feel like there's some safety in getting that recommendation, that endorsement. It's a really simple example, but it works in complex sales as well. Customers are looking for somebody to share in the risk and the burden of making a bad decision and having that partner who's guiding them toward what they should care about and what they shouldn't care about, what they should consider and what they should take out of the proposal, is actually very reassuring and comforting them and it increases the odds of getting some kind of decision from them.

**Lenny Rachitsky** (00:38:35):
Amazing. This is a great segue to The Challenger Sale, which we're going to talk about, but let's get through the last two steps and then we'll talk about The Challenger Sale, which is basically this on steroids, this idea on steroids.

**Matt Dixon** (00:38:45):
The last two, so L is about this customer who's doing endless amounts of research. Every salesperson has seen this customer, they're never happy with the number of reference calls or the amount of research they've done. They want to talk to more and more people. They're just in information overload mode and/or what we might call analysis paralysis mode because at some point, they're never satisfied with, they always feel like all the answers will be in the next white paper they read or the next reference call they do, or the next person on LinkedIn they talk to. 

**Matt Dixon** (00:39:15):
What salespeople need to do to stop that, you got to understand I think why customers do that. They don't want to be surprised. That is the main reason, but they also don't trust the salesperson to be forthcoming. They believe the salesperson is paid to sell them more than they need, to put one over on them, hide the dirty laundry, only talk about the things that work in the platform, not the things that don't work. 

**Matt Dixon** (00:39:37):
You're not going to get introduce any of the customers who hate you. You're only going to introduce the customers who love you, and we know we're going to say great things about us. That's what the customer thinks. That is what is in the customer's mind. You've got to actually shift, get the customer to stop trying to be an expert and start trusting you as an expert. There are two keys to that. 

**Matt Dixon** (00:39:57):
The first one is you've got to establish some trust. I know that sounds like a platitude, but we found in the analysis, there are specific things that great salespeople do very early on. They are brutally transparent with customers about like, "Hey, I know you were interested in this capability. I got to be honest, we get mixed reviews on that. It's kind of an early capability for us. We're still trying to iron out the kinks," or "I know you are interested in this used case, but I have to be honest, we're actually not the best in the market at that. Our competitors much better at that than we are." 

**Matt Dixon** (00:40:26):
These kinds of moments show the customer that you're not here to put one over on them. You're here to get them to a great decision. It kind of makes no difference to the salesperson, whether the customer buys from them, doesn't buy from them, it buys from a competitor. You just want to help them get to a great decision. That's step number one is building that trust. 

**Matt Dixon** (00:40:42):
Step number two is you got to demonstrate some expertise. What we see in so many sales interactions, especially in tech, is that salespeople will show up with the clown car of experts, the subject matter experts, the solutions engineers, the product people, the executive sponsors, and then they will just punt to these people. 

**Matt Dixon** (00:41:00):
What happens in that moment is dangerous for the salesperson. The customer, it sounds like they're loving it, right? They're loving that. I'm talking to the people who really know their stuff, but what's also happening in that moment is the salesperson is actively getting delegated down to the person they sound like. If they don't sound like any more than a glorified emcee or a coordinator, then that's kind of all the customer will perceive them as. 

**Matt Dixon** (00:41:21):
What right or ability would you have to guide the customer on what to choose if you've offered no value or expertise? You don't have to be as deep as the product people. You're not going to be, you're a salesperson, you're not a product person, but you do have to be deeper on than the customer, and you do have to demonstrate that expertise. Those are the keys, again, the customer to stop trying to be an expert and start trusting you as their expert.

**Matt Dixon** (00:41:43):
Then, the T is taking risk off the table. Two keys to doing that, I think the first one happens really early actually, and that is resetting the customer's expectations. Average salespeople love when they get an inbound lead from a customer who says, "Hey, I saw that case study on your website of the customer who got the 10X improvement in sales productivity, and we want that. That sounds great." That company's in our industry, amazing. That's a slam dunk business case for us. 

**Matt Dixon** (00:42:09):
The average salesperson's thinking like, "If you're excited about that, I'm not going to talk you out of it because that means you're going to be excited to take in the CFO and excited to sign the agreement and get going." 

**Matt Dixon** (00:42:16):
What great salespeople do though is they know that while they'll stand by those claims, those case studies, those proof points, they try to kind of under-promise and over-deliver and they might say something along the lines of, "You know Lenny, absolutely, that is a great case. I was involved in that sale, but what we also need to understand is everything went perfectly. They resourced it to the hilt. They had no integration issues, no hiccups. It was beautiful and seamless. I don't think you and I can think of many technology implementations that happened that way. 

**Matt Dixon** (00:42:45):
What I'd rather we do is build your business case around a 5X improvement in sales productivity because we see that at least that, in 100% of our implementations. Then, let's set up to over-deliver against that because I think we're going to do better than that based on what I know about your organization, easily 6, 7, 8, 9%, maybe even 10, but we don't want you to just walking in and promising 10X improvement sales productivity. If we finish the year and we're at 7X, if the CFO is now asking her questions when in absolute terms, she should be thrilled with 7X, right? Let's make sure we set ourselves up for success." 

**Matt Dixon** (00:43:18):
The other thing you've got to do though is establish some safety net options. There are lots of different shapes and forms. These can take everything from before the deal is closed, pulling the implementation team onto the call, or the customer success team or the account management team so we can start roadmapping, "Hey, as soon as we get signature, here's how we're going to spend our next six months together to make sure you guys are getting all the value you expect, if not more. Here's what we got to do. Here are the stage gates, here are the owners, here are the metrics we're going to monitor. Here's how often we're going to connect with each other." 

**Matt Dixon** (00:43:48):
Instills a lot of confidence with the customer because it feels like, "Oh, you guys have done this before, right? You've been there, you've done that. You've helped other customers like me get value." Everything from that kind of stuff to adding in professional services support, especially like you think about a tech purchase. I'm not saying give it away for free, but you will find that high-performing salespeople will also add on professional services, but it is not just because selling more, which they are because they're high-performing salespeople. It's the way they position that.

**Matt Dixon** (00:44:13):
They usually position it as an insurance policy. "Hey, I know you guys want to DIY this. This is one of the great things about our solution. You totally can. You got all the training support, all the videos, you got all the enablement content you need, but I know this is a big priority for you, and I think it would be really smart to carve out a slug of professional services hours that way our A team is lined up in case anything slips and if it does, we get you back up on track because the last thing we want is for you guys to be upset that you're losing ground and you're not going to deliver on the outcomes that you promised to your boss. So, let's set that up." 

**Matt Dixon** (00:44:44):
There's lots of different ways we can create those opt out clauses in some industries are an option. Not very common in B2B, but in some cases, you can offer those or specialized contract carve outs for instance. There's lots of different things we can do to create that safety net where the customer doesn't feel like they're jumping out of an airplane by themselves, but you are the tandem skydiving instructor that's going to guide them safely to the ground.

**Lenny Rachitsky** (00:45:05):
Amazing. All of this, especially this last step, is coming from, they're probably not going to decide on anything that that's what you're fighting is help them...

**Matt Dixon** (00:45:13):
That's right. That's right. 

**Lenny Rachitsky** (00:45:13):
... be less worried about messing up.

**Matt Dixon** (00:45:15):
Yeah, that's right. 

**Lenny Rachitsky** (00:45:16):
I especially love this point about under promising and over delivering because so much of, and most of this is B2B SaaS software that you're working with, right? Like B2B SaaS companies?

**Matt Dixon** (00:45:26):
Our dataset cut across, I think that it might just be that SaaS is the place where we're seeing the most indecision these days, but it's not suggest it's kind of an easy target, but it is rife within indecision these days, and unfortunately I think it's also rife with a lot of these missteps that salespeople make that actually make things worse, but we had data from manufacturing firms, services businesses that cut across. This was prevalent and consistent across industries.

**Lenny Rachitsky** (00:45:57):
With the under promising and over delivering, I think that's especially powerful for where most companies want to get to is net revenue retention being higher than 100% where you can expand larger within the org and it makes sense to help them set up base, feel like, wow, this is so much better than we even thought it was going to be, versus...

**Matt Dixon** (00:45:57):
Absolutely. Yeah.

**Lenny Rachitsky** (00:46:15):
... it's not delivering what we thought. Amazing. Okay. Any last piece of wisdom to leave listeners with around The JOLT Effect before we move on to The Challenger Sale?

**Matt Dixon** (00:46:25):
The only thing I would suggest is that for anybody, I mean, I think just do it is this, is that you should hit the pause button when the customer, because the customers, we all know, are going to get cold feet, often late stage, and it can be very frustrating. The knee jerk reaction for almost every salesperson out there, this happened in our analysis, 75% of salespeople we studied, would immediately go out to dialing up the FOMO. 

**Matt Dixon** (00:46:47):
Go back to doing that. You're not going to get these benefits. You're going to be stuck in this terrible state of affairs you're in right now. Dial up the cost of inaction, or let's try to use some price base or other delivery window-based urgency driver to get the customer to move forward. But just remember that if the customer's already convinced that the status quo is suboptimal, and you've already got the intent that basically again, you're using fear on top of a customer, selling into a customer who's already afraid and you're actually making it worse. 

**Matt Dixon** (00:47:17):
Hitting the pause button and just reflecting a little bit on what's really going on here. Is it that they're indifferent or is it that they're indecisive? Those are actually two very different things.

**Lenny Rachitsky** (00:47:26):
Amazing. I know you have a meeting in 10 minutes, so this is going to be the most action-packed, high-density podcast episode we've done. We've got 10 minutes talk about Challenger Sale. 

**Matt Dixon** (00:47:33):
Sure.

**Lenny Rachitsky** (00:47:33):
First of all, how many copies of this book have you sold at this point?

**Matt Dixon** (00:47:37):
I think it's about a million. 

**Lenny Rachitsky** (00:47:39):
Holy moly. 

**Matt Dixon** (00:47:39):
Yeah. 

**Lenny Rachitsky** (00:47:39):
That's insane.

**Matt Dixon** (00:47:39):
That's a lot, yeah.

**Lenny Rachitsky** (00:47:42):
Okay, so it's a legendary book in the world of sales. I imagine many people have heard of it, at least some people know the teachings. Let's spend a little time there. If I were to summarize the big insight of the book, basically it's the best salespeople challenge their prospects thinking and teach them about the market and what they should be doing versus just helping them get what they want.

**Matt Dixon** (00:47:59):
Yeah, very well said. I think one of, just like the FOMO, FOMU kind of shorthand, here's a shorthand I'd give to salespeople is most salespeople are trying to figure out what's keeping the customer up at night, right? It's classic solution selling needs, diagnosis, et cetera. 

**Matt Dixon** (00:48:15):
The Challenger approach is about showing the customer what should be keeping them up at night. What is the thing you know that they need to know? What is the way that other customers are using your solution to generate returns and benefit for their organization? What's the risk that they don't know about but you do because by the way, you're going to talk to 10 times more customers, or I say you're going to talk to 10 of that customer in a week or 10 times more than a week than they will all year. 

**Matt Dixon** (00:48:42):
You are a window into the outside world for them, and that's what challengers really understand. It's not free consulting though, because if you remember from the Challenger Sale, it's not just about bringing these provocative ideas that reframe the customer's understanding of the world. It's about leading to your unique benefits. What you're really trying to do is create a fire and then be the only person in town who sells the fire extinguisher that'll put it out.

**Lenny Rachitsky** (00:49:05):
Is there an example you could share of a Challenger sale type of sale?

**Matt Dixon** (00:49:08):
Yeah, we wrote a sequel to The Challenger Sale called The Challenger Customer. In that book, we talk about a case from a company called Dentsply. Dentsply, as the name would suggest, manufactures or produces dental supplies, right? They sell equipment and product into dental practices and dental offices. 

**Matt Dixon** (00:49:27):
Years ago, Dentsply had developed, we all know, I think your listeners can all relate to this, when you go to the dentist and the hygienist is polishing your teeth or they're using the water pick, or unfortunately, maybe the dentist is using the drill. That wand has a very heavy power cord that's attached to it and it's attached to this power base and that it feeds water through there and electrical current and all those things. 

**Matt Dixon** (00:49:51):
Dentsply had developed the world's first lightweight, ergonomic, cordless wand that drill bits could be attached to cleaning, implements, et cetera and it was a total breakthrough. Actually, when they unveiled it was pretty interesting, they gave, you remember the scene in Pulp Fiction where they opened the briefcase and then it emanates like a light emits from it. They gave all their salespeople like this little aluminum briefcase thing with this eggshell foam and a wand in there. 

**Matt Dixon** (00:50:19):
I can't remember what it's called. Let's call it the XP-9000 Wand, but it had one demo wand in there and they would go around to dental offices and be like, "Ah." It was lit, literally, it had blue lighting inside... 

**Lenny Rachitsky** (00:50:30):
Wow.

**Matt Dixon** (00:50:30):
... and it was really cool, the reveal and they'd take it out and they give it to the dentist or the head of the dental office and they would hold it and be like, "What? It's so much lighter and it's ergonomic and this thing is cordless? It's amazing. It's a revolution." Then, the first thing they would ask is, "How much is it?"

**Matt Dixon** (00:50:47):
When they told them it costs like three times more than the current old-fashioned wands they're using with the heavy cord, they would gently put it back in the briefcase, close the briefcase, say, "Can you give me a price on new drill bits or new like polishing attachments?" They couldn't get anybody to want to pay for this thing that was much more expensive than the old one. 

**Matt Dixon** (00:51:06):
They did a lot of work and they figured out, they knew that this was unique. They knew this was a unique product. Nobody else in the market made this. They're the only supplier who had figured this out, total innovation, but they hadn't given the customer reason to want to pay a premium for that innovation until they figured out the connection between the equipment that hygienists use and absenteeism and workers' comp. 

**Matt Dixon** (00:51:32):
It turns out that one of the biggest professions that where you get carpal tunnel syndrome, shoulder and neck and lower back injuries is being a dental hygienist. The reason is that they're standing, holding that heavy wand being dragged down by that heavy cord at an awkward angle all day long. That's why dental offices really struggle to keep hygienists showing up, not calling in sick, not out for months at a time for reconstructive shoulder surgery, not with exorbitant health benefits claims and workers' comp claims. 

**Matt Dixon** (00:52:08):
They came in and they revised their sales pitch. Now, when they come into the dental office, they sit down, they say, "I'd like to talk to you about your hygienist workforce. Are you guys seeing higher turnover? Have you seen any absenteeism due to carpal or lower back or neck or shoulder injuries? What are you guys doing about that? What's the cost to your business?" 

**Matt Dixon** (00:52:26):
They get the dentist talking and the way they start talking about, "It is not just the insurance and workers' comp costs, it's stuff like when my hygienists get injured, and it's a repetitive motion business and job, when they get injured and they call in sick, I've got to reschedule all these cleanings and all these appointments, and that's a bunch of upset customers who end up then going to the practice down the street or saying bad things about me on Google reviews or what have you." 

**Matt Dixon** (00:52:52):
There's all kinds of ripple effects for the dentist. The cost of losing a hygienist is massive and the market for hiring them is very, very tight. What Dentsply does is start the conversation there, and then they say, "One of the things that we figured out is that, based on our own independent research, one of the primary drivers of all these bad outcomes, absenteeism, repetitive motion injuries, is related to the equipment that hygienists use. It's because they're holding that old fashioned heavy wand, attached to that big heavy power cable at an awkward angle doing repetitive motion all day, but what if you could solve for that? What if that was no longer a problem?" 

**Matt Dixon** (00:53:33):
The dentist says, "Well, how would you solve for that? There's no other technology." "That's what we got. We've had the same equipment for 30 years. Let me show you the new XP-9000. We're world's first cordless, lightweight, ergonomic drill. We can show you that it is far preferred by hygienists because they don't get injured as often because it's much easier to hold and it doesn't put stress on the joints and pinch points, if you will, where hygienists tend to experience these injuries." 

**Matt Dixon** (00:53:58):
It's just a simple example, but you see, again, they're still selling a fancy wand, but before, they were leading with it. Let me show you this and talk about the features, benefits, and that led to how much does it cost. Now, they're leading to it. They're starting with an insight and giving the customer a reason to care about solving this business problem, and it turns out the only way to solve it is buying this XP-9000 drill from Dentsply.

**Lenny Rachitsky** (00:54:22):
The key lesson from this book, and I know we don't have a ton of time to dig into it, is start with an insight they may not be aware of. Give them a sense of where the things are going. Help them learn something about the future and the problems that they need to know about that they may not be aware of, and then transition to here is how we can solve that for you.

**Matt Dixon** (00:54:40):
Yeah, that's exactly right. Make sure those connections are really tight, right? Getting this right starts with answering the question, why should the customer buy from you instead of your competitor? It's not because you're more customer-centric or more innovative and possible to prove your competitors claim the same thing. It's not that you're the leading global solution provider of whatever you sell. 

**Matt Dixon** (00:54:59):
It starts with the product or the way you deliver the product or something about your service delivery that only your company does you are only capable of. Nobody else can touch with the barge pole. Then, the second question is, what would have to be true for the customer to want to pay us for that, to pay a premium ideally? That's the core components, if you will, of a challenge or a conversation.

**Lenny Rachitsky** (00:55:21):
Amazing. Matt, I promised I let you out here in time. Final questions, where can folks find your books if they want to dig in further and how can listeners be useful to you?

**Matt Dixon** (00:55:32):
Well, thank you for the offer. I love being connected with folks who heard me on shows like this one. If you heard me on the podcast, "Hey, I heard you on Lenny's Show," shoot me a LinkedIn invite. I'm pretty active there, love being connected with folks, so please reach out to me. 

**Matt Dixon** (00:55:45):
If you want to learn more about JOLT Effect, so we do a lot of workshops and training around that methodology, visit jolteffect.com. There's a ton of, there's also a lot of free tools on there that you can download that help you put some of these concepts into practice with your sales teams or if you're an individual seller. Then, of course, the books are available everywhere. Good books are sold, which I think is on the internet these days. 

**Lenny Rachitsky** (00:56:10):
Amazing. Matt, thank you so much for being here.

**Matt Dixon** (00:56:11):
Thanks, Lenny. It was a blast. Thank you.

**Lenny Rachitsky** (00:56:14):
Bye everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [15/21] Inside Canva: Coaches not managers, giving away your Legos, and running profitably | Cameron Adams (co-founder and CPO)

**Lenny Rachitsky** (00:00:00):
Canva is bigger than Figma and Miro and Webflow combined. You guys are generating $2.3 billion in ARR and you're profitable. You're also growing 60% year over year and it's accelerating.

**Cameron Adams** (00:00:12):
I run everyone through the culture of Canva. One of those sections is on giving away your Lego, finding joy in the other things of building a team, passing on your experience, helping other people do great writing or great product building or great engineering.

**Lenny Rachitsky** (00:00:25):
When is this coaching concept? I've never heard of this.

**Cameron Adams** (00:00:27):
We don't really have managers, but everyone at Canva has a coach. They're constantly working with you to look at your skills, but also when it might be time to move on to the next level.

**Lenny Rachitsky** (00:00:37):
I'm curious just how you think about product management.

**Cameron Adams** (00:00:39):
I didn't want to do product management like they did at Google, and that's because of the different cultures. I have seen product managers at other companies who are very independent of teams and that seems very weird to me. For us, product managers are really connected.

**Lenny Rachitsky** (00:00:50):
It feels like Canva has just been this non-stop up into the right all win, all success. In reality, that's never actually the case.

**Cameron Adams** (00:00:56):
How many failure stories do you want? We got plenty.

**Lenny Rachitsky** (00:01:03):
Today, my guest is Cameron Adams. Cameron is the co-founder and chief product officer at Canva, which is a truly incredible business and company. At the top of the episode, I share a bunch of stats. They'll probably surprise you about the scale that Canva has reached these days.

**Lenny Rachitsky** (00:01:19):
In our conversation, we cover a ton of ground including how Canva stays product obsessed, their freemium strategy, lessons about building MVPs, how Cam and the product team think about AI within their product, also peek into their unique team culture, their SEO and growth strategy, and also peek into some of the stuff they just launched.

**Cameron Adams** (00:02:04):
It is so great to be here, Lenny. I'm very excited.

**Lenny Rachitsky** (00:02:07):
I'm even more excited. I have at least a billion questions for you. I'm hoping I get through at least half a billion. There's so much I want to talk to you about, but I want to start with a warm and fuzzy question. Do you ever just take a moment to reflect on the insane success of this business that you've built? And before you answer that, I'm going to share some stats about Canva that I think are going to blow people's minds. So think about the answer.

**Lenny Rachitsky** (00:02:30):
So I was researching Canva, all of this was just... I didn't know any of this actually, and I think it'll surprise a lot of people just the scale that Canva has reached at this point. Okay. So Canva is bigger than Figma and Miro and Webflow combined both in terms of valuation and in terms of revenue. You guys are generating $2.3 billion in ARR per year and you're profitable. You've been profitable for about seven years at this point. You're also growing 60% year over year and it's accelerating, faster than last year. I think this is all quite unheard of at this scale. Do you ever just reflect back on this and, like, "Okay, I've done well."?

**Cameron Adams** (00:03:11):
When you say it all like that, it sounds pretty amazing. I don't think every day you're cognizant of that growth and that achievement, but there are particular moments where you get to really reflect, and for me, it's most of the time when we bring the team together. Obviously now we're in a pretty virtual world, hybrid in some best cases. But when the team all get together and we celebrate is when we finally have those moments where you get to step out of yourself, look at this huge sea of people and realize what you've achieved together.

**Cameron Adams** (00:03:48):
Probably the most recent moment we got to do that was for our 10th birthday last year. So Canva is largely centered in Australia. We've got lots of offices around the world, but we had a big birthday celebration in Sydney right on the harbor there in front of the water and we had thousands of people there, and we just got to look back on everything we've achieved over the previous 10 years, and that was the pretty amazing moment.

**Lenny Rachitsky** (00:04:11):
What about just personally, you basically went from a designer on Google Wave to a co-founder of one of the most generational successful startups in the past decade. How does that feel?

**Cameron Adams** (00:04:24):
I still think I'm constantly growing, I'm constantly learning stuff. I don't feel like I've achieved a ceiling or being a massive smash hit. We're always changing how we're doing things. We're always doing things we've never done before and we feel totally like a fish out of water. So yeah, I've achieved a few things personally, but I still feel like there's so much more to go.

**Lenny Rachitsky** (00:04:50):
That sounds right. I want to talk about the flip side from the outside, like I described, it feels like Canva has just been this non-stop up into the right all win, all success, just killing it all the time. In reality, that's never actually the case. It's often really helpful for people to hear a story of, okay, there's actually this moment of this may be all falling apart or a struggle for yourself. Is there a moment that comes to mind of just like, "Oh, man, this was really scary and hard for me."?

**Cameron Adams** (00:05:17):
I think there's probably a few different stories that would resonate with your audience because there's like business kind of stories of how the actual company's tracking. There's product stories of stuff we launched that didn't go anywhere. There's team stories where you're dealing with people and all the different quirks that entails. I think I'll choose a business story. There was a moment around our 100 million valuation mark where we were putting together around... We had a lot of existing investors who were really keen to invest. This is probably our third or our fourth round by this stage, and it was all looking good. There was a particular investor who was really to lead out. We were fine with that. They were doing due diligence, got to the stage where every other investor in the round had signed on. They were super excited. They'd wired the money into our bank accounts already. They'd signed all the long docs but lead investor.

**Cameron Adams** (00:06:15):
And about two days before they were due to sign and get all the money into our account, they came back and said, "Look, business is going great, but essentially we think we can get a better deal, so we're going to cut your valuation by 50%." It was a huge surprise and totally screwed up the entire round. All the other investors were like, "What the hell are you doing?" My co-founders, Mel and Cliff, pretty much jumped on a plane that night to go to Silicon Valley, rallied around a whole bunch of other investors, found a new lead investor, took them about a week. This was the week right before Christmas. It was incredibly stressful, incredibly tumultuous.

**Cameron Adams** (00:07:05):
We eventually came out of it better. We actually got better terms on the deal that we came up with. That investor has fallen to the wayside now and it was a real learning moment for us in terms of how to approach fundraising and also how to be totally independent, and that's one of the reasons why we've focused on profitability for so long now. We've been profitable to spend the seven years and one of the reasons is that we never want to be put in the situation where we have to go to someone for money to ensure the survival of the business, and being profitable means that we never have to do that. We can always do it on our own terms and in our own time.

**Lenny Rachitsky** (00:07:49):
**Cameron Adams** (00:10:32):
I think one key thing is that we don't know it's very rare. We approach a board meeting just like we do anything, we craft the experience about how we think it should be and how we think it's going to be useful. So just like our board meetings or our product meetings or the way that we do launches, we have shaped that in the image that we want it to be and in the way that we think it's going to be most effective. We've always been an incredibly product-led company. We always think first and foremost about the product. That was the whole genesis of Canva itself, having a product that we thought people would love to use and desperately needed to get out into the world and that's the lens that we approach everything through.

**Cameron Adams** (00:11:13):
In terms of board meetings, I think it's been very helpful that our financials and our growth have been amazing for so many years that we don't need to focus on it and we can just have that one slide with the graph going up and to the right. We've also attracted investors who believe in us and who understand that us driving product and getting as much product value out to our customers is probably the most important thing we can be doing. So that's why the board meetings do focus on that because what we are launching in the product, what's ahead is really determining the success of the company. Obviously, financials are important and you can do a bunch of lever pulling and thinking about margins and all that kind of stuff, but product is at the end of the day the most important thing to Canva and the thing that's going to help us stand out and continue to have success.

**Lenny Rachitsky** (00:12:02):
I really like this point you made about how you didn't know any better almost, and it reminds me of something else I heard about Canva. It took you guys a long time to hire outside execs. Almost all your leaders are homegrown and it took you a long time to even hire outside of Australia. Its even higher in the US. Can you just talk about why that's been so important and just the impact that has come out of hiring people internally and helping people be promoted internally?

**Cameron Adams** (00:12:26):
One thing really focused on is team and culture. I think you can probably bring in the world's best person at X, Y, and Z, but if they're not fitting into your team and understanding your culture and have the same passion and vision that you do, they're not going to succeed. So it's super important that we have people along with us for the ride and that might mean everyone at Canva is awesome. They mightn't be the number one person in the world for that particular thing, but they get more done than the number one person could because they've built that trust and that safety with their team. They know how to communicate their ideas, they know how to bring other people along with them and lay out a vision in the way that we understand it at Canva, and that is a critical thing to building a great company, I think, is having that alignment across everyone, across your product teams, across your marketing teams, across your customer happiness.

**Cameron Adams** (00:13:21):
They all need to be aligned and we all need to be rowing in the same direction. We have brought in leaders, and some of them have been incredibly successful. We have brought in leaders, and they've exited the company after a few months just because there wasn't that fit and they didn't manage to figure out or understand what Canva was and how to work within this big ecosystem. Now we've got 4,500 employees now and it's not just a matter of you coming in and bringing all your ideas. You also need to work together with all the other leaders that we have and the team that's surrounding you.

**Lenny Rachitsky** (00:13:56):
As a lens into what is important. Canva, when you say that they didn't understand what Canva is, what's something that doesn't click for people a lot of times that forces them to be exited potentially? What is it that's so maybe unique or important to the way you all think about stuff?

**Cameron Adams** (00:14:12):
I have this theory that the type of product you're building very much influences the way that you think, and this stemmed out of a chat I was having with one of the product leaders at Spotify. And they said that at Spotify they do an incredible amount of talking about problems. They'll have a meeting, they'll talk about this new product feature and they'll just hash it out through conversation. And I imagined that that was because Spotify is a very auditory product. Everyone there thinks about music, sound, podcasts, that is their mindset. At Canva, we're all about visual communications. It's pitch decks, it's social media posts, it's video, it's t-shirts that you can make, and that's how we think about things in a very visual manner.

**Cameron Adams** (00:15:01):
So one of the things that's very particular about Canva is really setting visions. And I'm in visions, not just in the sense of looking forward two, three years, but also visions in the very visual sense. We need to be able to see it. We need mock-ups. We need prototypes. You need to get that idea out of your head and present it to someone in a visual form that helps you talk about and communicate about it. That's one aspect of why some people I think don't land on their feet at Canva because they aren't necessarily visual thinkers and they don't end up communicating what they want to do in a visual way to the rest of people at Canva.

**Cameron Adams** (00:15:38):
Another way is that the way that we've grown, the way that we've built product has been quite idiosyncratic over the years. And as I said, we've learned so much just through doing and established our own processes. And I think in any system, if someone comes up from the outside with preconceived notions or this idea that they're an expert and tries to bring that in, it's going to be rejected. So you really need to work together and I think the advice that I can give to people coming to Canva is just listen for a couple of months, figure out what is really working at Canva and why it works before you try and change it. We're very open to change and to new ideas, but just coming in wholesale and totally changing the process, just because that's what you've done somewhere else isn't going to get you the most level of success.

**Lenny Rachitsky** (00:16:31):
That makes so much sense. We're talking about cultural elements and so I have one more question around culture. I saw a video interview you did once about how you love this concept of giving away your Legos, that's part of your culture and the culture at Canva broadly potentially, and this was originally popularized by Molly Graham in this first round review article. That's something you still believe in and if so, can you just describe that concept briefly because a lot of people haven't actually heard about this?

**Cameron Adams** (00:17:00):
Yeah, Molly wrote a great article, which I actually refer everyone who joins Canva to in the cultural onboarding session, which I give them. So I run everyone through the culture at Canva and what they can expect over the next few years as they work here, and one of those sections is on giving away your Lego, and it's really important to us because part of being in a startup is scaling, when you're scaling from zero users to a million to a hundred million, and when you're scaling from three founders to 10 employees to 100 employees to 4,000 employees. You're scaling everything from the product to the internal processes you have, the finance team paying people how you deal with user feedback. Everything's just constantly growing, growing, growing. And I think this is slightly different to a traditional job where you get good at the thing that you always do and you try and turn that into a process that just continually works all the time.

**Cameron Adams** (00:17:58):
As a startup, you just have to be changing and we want people who are flexible, you can bring new ideas, you can go to that next level. You can think about not just a million people, but 10 million people, 100 million people, a billion people using the product, and to constantly ratchet up that multiplier, you need to change yourself, which means that you probably need to give away some of the stuff that you're doing now in order to get to that next level. If you're the first email copywriter at Canva, you can get away from writing all the emails for the first year maybe, but when you're writing emails for 100 million people in 190 different countries, in 100 different languages, all at different stages of their journey through using Canva from beginners to intermediates to experts, that just massively multiplies the complexity of the job that you have to do. And if you're trying to write every single one of those emails, you have no chance of scaling.

**Cameron Adams** (00:18:56):
So you need to think about who you're going to bring in to help you, what systems you're going to introduce, what are the processes needed to get 100 different languages translated every time you send out an email and that requires you to hand off that stuff. You need to maybe stop writing every single email, give that to someone else, be comfortable with doing that because you often build up a lot of self-identity and doing that and you get a lot of joy out of it. That's why you're a writer in the first place. But finding joy in the other things of building a team, passing on your experience, helping other people do great writing or great product building or great engineering is really what giving away your Lego is about. And we still encourage everyone to do that, to think about those moments where they need to level up in their impact, how they can bring their team along with them, how they can pass on their experience and help everyone really have a tremendous impact with the skills that they have.

**Lenny Rachitsky** (00:19:51):
I think a lot of people and a lot of companies struggle with this idea, and I'm curious if there's something you've learned about how to actually implement this. Is it just like, "Hey, go read this article and then I might bring it up sometimes when things are changing and there's a reorg."? Or is there anything even deeper of just this is a cultural element of we are constantly giving up our Lego's giving things that we own?

**Cameron Adams** (00:20:10):
Probably the deeper thing I think is giving people opportunity so you can talk about growth than just say, "Please grow." That's not going to be terribly effective, but giving them the opportunity and the support to do so is super important. We have a system we call coaching at Canva where you have a coach and they're constantly working with you to look at your skills, how you can improve each of those individual skills, but also what it is that you're actually doing and when it might be the time to move on to the next level. Say you are just doing a product role in this particular product and now you need to be a coach of other product managers and help build products. Understanding those pivot points is really important and our coaches help everyone at Canva. Everyone at Canva has a coach that is constantly thinking about this aspect of their personal growth.

**Cameron Adams** (00:21:00):
And finding those opportunities where you can push someone to do something that they haven't done before or to expand upon an idea that they've had and give them ownership of that idea is super important. So when people do come to us with an amazing product idea or a feature that they want to build or an entire team that they think should be spun up, we really listen to them, and if it makes sense, we say, "Go and do that. Go and build that part of the product, grab a couple of people and start building video at Canva. Do that thing that you're talking about." And I think if you give them the opportunity and a little push to go beyond what they think they're comfortable with right now, that is the best way to drive growth in your team.

**Lenny Rachitsky** (00:21:44):
Okay. There's two things I want to follow up on there. One is this coaching concept. I've never heard of this. So how does that work? Do they have a manager and they have coach, and who is this coach?

**Cameron Adams** (00:21:54):
We don't really have managers. So your coach is the person who thinks about you in a specialty sense. So we have specialties, engineering, product design, we got tens of different specialties across Canva, and your coach really helps.. Your coach is a similar specialty leads, so if you're a product manager, they're a product manager, so they know the skills that you have to use. They know the trajectory that you could possibly grow into. They know the structures that are around Canva that you could slot into when you want to go to the next level. And your coach constantly checks in with you, has sessions, might help you with the strategy doc, might have a one-on-one with you. They just constantly thinking about those ways that you can grow and improve at Canva.

**Cameron Adams** (00:22:42):
And then we have probably more of a, I would say, collegiate managerial circle of colleagues who help you who do 360 feedback, all that kind of stuff. So that's the structure that we've arrived on and it's worked pretty well for us and it was driven actually by a formative coaching experience that we had as founders quite a few years ago from an external coach and we decided to bring that into Canva as a whole philosophy.

**Lenny Rachitsky** (00:23:10):
And these coaches, are they professional coaches or they're people in the company that are like, "I will be a coach for this function."?

**Cameron Adams** (00:23:15):
They're people in the company. So we've got probably close to 800 or 1,000 coaches now at Canva.

**Lenny Rachitsky** (00:23:22):
Wow.

**Cameron Adams** (00:23:23):
We do have very specific coaches who are just coaches and they can drop into any situation. They're not product managers, they're not designers, but they're relatively few. I think, we've got probably five of those type of coaches and they just work in very special situations, but what we're focused on is enabling the broader circle of coaches, so those 800 people to understand what it is to be a coach and have the skills of coaching. So we focus a lot on teaching them the skills of coaching, how to build a growth mindset in their coaches, all the skills that you need. So yeah, it's a massive part of Canva.

**Lenny Rachitsky** (00:24:02):
And so there's a product management coach and this person helps all the PMs become better at the craft of product management.

**Cameron Adams** (00:24:09):
Yeah.

**Lenny Rachitsky** (00:24:09):
Wow, so interesting. Okay, and then the performance review piece, how does that work?

**Cameron Adams** (00:24:13):
Yeah. So your coach feeds into that, but we also do 360 feedback from all the people that you work with and we do that on regular cycles. As with everything at Canva, the cadence of those cycles has changed over the years, but now we do that every six months.

**Lenny Rachitsky** (00:24:29):
We talked about product for a little bit. I want to spend a little time on product management. I'm curious just how you think about product management. There's this constant debate across tech companies about the value of PMs. Are we better with more PMs? Are there too many PMs? What do PMs do for you? You're a chief product officer. Where do you find product managers bring the most value to Canva? And then do you just have thought on the future of the field of product management?

**Cameron Adams** (00:24:54):
I don't know. It's one of those things that I don't want to quantify. I don't want to put it in a box and say this is product management. Because I've worked at a few places now. I've actually only had one real job, which was at Google where I got to experience product managers the Google way. And the way that they do product management is totally different to the way that we do it at Canva, and that's partially by design because I didn't want to do product management like they did at Google, and that's because of the different cultures that they have. Google's a fantastically engineering-driven culture and the way that they think about product management is mostly in the technical sense of like, "Here's a piece of technology, what can that technology do, how do we scale it?" At Canva, we focus a lot on experience and as I said before, it's a very visual experience, so we require a different product management process, but also a different product management mindset.

**Cameron Adams** (00:25:51):
I think we probably did that more from the ground up than a lot of other startups just because Mel and Cliff were a lot less, I think, inculcated into how product management has done other places. I had a bit of experience from Google but was still fairly independent in my thinking, so we almost went back to first principles on how product management should be done, and to be honest, we didn't want to have the term product manager for a long, long time. It wasn't until about year '06 or '07 where we actually had product managers, we decided to cave just because it was easier to explain to people.

**Cameron Adams** (00:26:30):
But it also took us four or five years before we even had another product owner who wasn't us. Part of that was us giving up our Lego, and I think we took a little too long to give up our Lego on that one, but the other part of it was us figuring out exactly what we wanted and how we built product and how to communicate that to someone else and get them to do it in a similar way and work with the teams in the way that we did.

**Cameron Adams** (00:27:00):
For us, product managers are really connectives. They connect the team, ideas, data, a whole bunch of different things, and it's very messy. There's no exact recipe for how to do it, but connecting these disparate areas and moving the team and the technology and our customers to a new place, a new vision is essentially what product managers do, and it's going to involve compromise, it's going to involve changes in the feature scope, it's going to involve timelines of like, "Okay, we can't ship it in May, it's going to have to be July. Let's figure out what we can do with marketing to make that work." This constant movement and connection and reorienting around the constraints that have suddenly arisen in the last week, and that's where we see great product managers operating in Canva.

**Lenny Rachitsky** (00:27:56):
You mentioned Mel and Cliff. For folks that don't know, they're the other two co-founders of Canva and they were dating when they were starting Canva, I think it was called Fusion Books back in the day before Canva. Now, they're married. What's it like working with a married couple as the other two co-founders, and is there something they did well that didn't make you feel like this third wheel person that isn't married to them?

**Cameron Adams** (00:28:22):
It is always tricky working with a couple because they're on it 24/7. When you leave the office and they head home, they're still talking about product, business strategy, all the things. I think they've done a really good job of evolving those ideas overnight through the conversations they have and over dinner and walking, but then bringing that back the next day and being transparent about that and that's super important. If you are working in that kind of dynamic. There are definitely moments where I have missed out on a memo and stuff has rapidly proceeded, and I think I've just gotten used to that and gotten used to catching up really quickly, having a word with them on the side to clarify what the motivation is here and just constantly maintaining that alignment.

**Cameron Adams** (00:29:11):
And I think it happens in any partnership or team. There's moments where there's small alignments, there's more tectonic stuff that happens over months or years, and you need to realign at some stage. I think it happens with friendships, it happens with my wife, it happens with our product teams. There's always these moments where you need to re-communicate things and relay the land of it. And I think we've been great at doing that as co-founders even for the small things and also for the more tectonic things.

**Lenny Rachitsky** (00:29:44):
**Cameron Adams** (00:30:59):
Yeah, so when we launched or when we were building the Lean Startup book came out, so that was all anyone talked to us about investors, other people building products, trying to give us advice. They were like, "Just get something out the door, as crappy as it is just to get in front of users." I think, for us, the product is the experience and giving people a great experience is an intrinsic part of the product. It's also an intrinsic part of how we've grown. People having a good experience of being enthusiastic about it has been how we've spread the word of Canva and organic word-of-mouth growth was the biggest driver of Canva's growth for many years and probably still is, I think. People just telling someone else to jump on this amazing product, I don't think we would've had that if we just put our pretty crappy product that people didn't have joy in using. Sure, it might've got the job done, but if they weren't excited about using it the next day, then that wasn't a bar that we wanted to hit.

**Cameron Adams** (00:32:08):
So we did hold off on launching the product for a long time and investors did ask us many, many times, "When are you launching? Can you just get this thing out the door?" But we had done enough research, we knew the problem space, we knew what people wanted from the product. Part of that was due to the work that Mel and Cliff did on Fusion Books in a very constrained area. They had looked at school yearbooks, they had built an experience for that, and they had observed what worked didn't work and how they might scale that into a bigger product. It also worked for me who'd worked in a lot of creative tools and built a lot of creative tools over the previous 15 years. So I had a lot of understanding of how people interacted with these systems and the experience that we wanted to build.

**Cameron Adams** (00:32:57):
So we did hold off and the product we launched launched, we obviously weren't happy with. You have to launch something that you're not completely happy with, all the rough edges, but you're releasing it knowing that the rough edges are going to be outweighed by the joyful experience. We still did a ton of user testing, right? It's not like we just launched this thing blind and said, "We hope people like it." We did a ton of user testing. We did a ton of user research into the features that people wanted, and we built that up over time. And one year to me actually seems like short time, a lot of people think it's a long time, but one year was just enough for us to scrape in with an experience that people did truly love when we launched, and particularly the market that we went after when we launched really loved it.

**Lenny Rachitsky** (00:33:49):
I'm curious just what advice you share with founders when they're asking you how joyous does this first version have to be? How awesome does my MVP need to be? One thread I picked up as you were describing your experiences, you all had deep experience in this space, so you knew what you wanted to build. It wasn't like this dark forest of exploration is like we know what we want generally. Do you have advice you share with founders of how awesome their MVP should be and when it's worth spending a year or two or three building it?

**Cameron Adams** (00:34:20):
There's a couple of points in there. First is that even today we build for ourselves, and I think this is advice that probably a lot of product people wouldn't give you is that you shouldn't build for yourself, you should build for your customer. But I think we're fortunate that we are our customer and that the problems we experience are the problems that hundreds of millions, billions of people experience. I think that is maybe a fortunate part of just the problem area that we're interested in, but it has enabled us to move really quickly on the product because we can quickly know what's working in the product, whether this feature is useful, whether it's reached that bar of a great experience.

**Cameron Adams** (00:35:03):
So that's one aspect of it and I think that is also about being passionate, you entering an area that you are extremely passionate about. I often hear people are like, "I want to do a tech startup. What is the best area I should focus on to build a product in?" And to me, that is totally the wrong way to go about building a company that you're going to spend the next 10, 20 years in because if you're in an area that you are particularly passionate about but you see the opportunity to make a bit of money or have some external measure of success, that is a terrible way to go about being a founder because you're going to hit these rock bottom dark places and if the passion isn't driving you through that, you're going to have an incredibly hard time getting to the next step. So that's probably the first area I talk about in terms of knowing when a product is amazing.

**Cameron Adams** (00:35:58):
The second one is that it really needs to spark, joy, and delight in people and just pure excitement. It can't just be like, "Oh, yeah, this is a useful tool for me." It needs to light up their eyes. They need to be like, "How do I sign up for this thing tomorrow? How do I get it? How do I pay for it?" And they need to want to talk to other people about it because in the early days of your startup, you don't have marketing dollars, you don't have channels which you can go to immediately get access to a million people. You need to really foster the first people that are going to use your product and they're going to be the ones that are going to spread it and they're going to set the foundations for your growth.

**Lenny Rachitsky** (00:36:41):
Interesting. So piece of advice number one is work on something you really want yourself that you're excited to work on. Two is get it to a place where it lights up people's eyes. They're just so excited with this thing. For that second bar, what was it for Canva? Was it just that it was impossible to do this design in a browser?

**Cameron Adams** (00:37:00):
It was 2012, 2013 when we launched and visual content was still in its infancy. Instagram had only been out a couple of years. Pinterest was on the rise. People were just getting used to creating visuals and it was hived off to a very select few because to create those visuals you needed to afford some expensive software, know how to use that expensive software, nowhere to go to get fonts and photos and illustrations, know how to put that together into something that looked decent and then ship that off. It was something that only 1% of the world could do and democratizing design, empowering the world to design is Canva's entire mission, and we saw this sweet spot at the time in social media. It wasn't what we set out to go after. We set out to democratize design to bring design to literally everyone in the world and to everything that they're doing.

**Cameron Adams** (00:37:59):
But through the user testing that we did, through the levels of excitement that we saw from different people, social media managers really came to the fore at that time. So we knew that they really fit what we could ship right now. We didn't ship a presentation product or a T-shirt builder in our very first version. We shipped a thing that could make square landscape and portrait graphics and blog post graphics, and that got a particular segment of society excited. We added on all the things afterwards because that was part of vision and ultimately what we wanted to build. But with a team of 10 people in the space of a year, building something that really got social media managers excited was what we could pull off. And that's something we realized in the last six months of that launch year. We didn't quite know who our audience was going to be. We knew it was a tool that anyone could use, but in that last six months of user testing and refining is when we really identified that first target market and we just leant into it.

**Lenny Rachitsky** (00:39:08):
There's so many things you all nailed early on. One of them is the focus persona/ICP, which is you said social media managers. Just to take the lesson from that, you basically saw that segment getting the most excited about the product and that told you, let's focus on this group. Is that right?

**Cameron Adams** (00:39:27):
Exactly.

**Lenny Rachitsky** (00:39:29):
And was it like an order magnitude more excited? What do people look for there that tells them, "This is the one."? What did you see there other than just more excitement?

**Cameron Adams** (00:39:39):
It was just incredibly emotive language, like sheer joy. Particularly coming into the product, we worked a lot on the onboarding process in the last couple of months of launch and that was really pivotal because the product features were there. You could add text, you could add images, you can change the color of things, you can move stuff around the page. It was a simple but powerful product, but there was this thing holding people back from actually using it and understanding what Canva could do for them. And when user tested the onboarding of Canva a ton, actually usertesting.com had just launched them, which really unlocked us because we didn't have to do these big formal labs or anything like that. We could just go online and get results in the space of half an hour. So that was like a pivotal unlock for our product process and that's something we still employ today.

**Cameron Adams** (00:40:39):
And through that, we tailored the onboarding process to get people excited and to understand the deeper goal with Canva and the deeper impact it could let them have. It wasn't just about letting them put a pretty picture on the page, it really unlocked their ideas and let them do things they couldn't do before. And we shaped the onboarding to do that and it resonated the most with social media managers because they had this massive content need that they couldn't really service. And in the first minute of Canva with the right onboarding, it just unlocked the whole realm of productivity and impact that they didn't have before and that's why they got super excited.

**Lenny Rachitsky** (00:41:23):
We talk a lot on this podcast about the power of onboarding and the impact that can have on retention and everything down funnel. Do you remember what the unlock was in terms of and getting more people activated? Is there anything that's something that other people can learn from?

**Cameron Adams** (00:41:38):
For us, it was taking that first step, particularly with Canva and any I think creative tool. There's a real fear of the blank page. So prior to any onboarding thought from us, we had a blank page. We had a few coach marks that said, "Here's where you do this, here's where you do this." And then they'd be left on this blank page and people would freak out. So what we really focused on was just taking that first step and then the next step and then the next step. And before they knew it, they built a design. And the way that we did that was to encourage a really simple step. So the first one was click on this search box and search for a monkey. It literally said that.

**Cameron Adams** (00:42:18):
Searching for a monkey is something you probably don't do in most tools. So it was a little surprising, which was a good inroad, but it was still super easy. Anyone can type monkey. And then you type that in, it comes up with this whole sway the monkey images, which look hilarious, and just dragging one of those out onto a page is another simple step. And we just got people to walk through that keeping their interest up, keeping the bar of effort quite low, but within three or four steps, they'd built up something that they'd never been able to do before, and it surprised them. The words that we literally got out of years at testing were, I didn't know I could be a designer. And that was what we managed to do through several rounds of refinement on the onboarding process. It is lowering the barriers to entry and also increasing the amount of delight, and I think those two things are what you should be aiming for with your onboarding.

**Lenny Rachitsky** (00:43:16):
That's an incredible insight. Is there a video of that original onboarding out there or is the current one still similar?

**Cameron Adams** (00:43:22):
The current one isn't similar. We have constantly gone back to it because it performs really well. We do actually apply the same approach of little steps building up into bigger accomplishments, and that's actually rolled out through our last round of launches for the last couple of years through something we call learn and play. So with every launch that we do now, we think about how to teach people about that feature and how to get them really involved in it. We have a whole series of learn and plays where when we launch AI photo editing, they can try it out right then and there. They've got some great content that they can immediately operate on, and it's a super simple step for them to type in a prompt and see the result of that.

**Lenny Rachitsky** (00:44:05):
I think an interesting and really important takeaway here is you built a very delightful, incredible, innovative product, but it still didn't work until you figured out the onboarding and that you needed to figure out the persona to focus on. All those things end up being incredibly important, it's not just build something amazing and delightful.

**Cameron Adams** (00:44:25):
Definitely.

**Lenny Rachitsky** (00:44:26):
Staying within this realm of growth, you've grown in large part thanks to this incredibly SEO template strategy. You mentioned in interview there's this guy, Andre that came on early and helped you figure this stuff out. Is that true? And if so, what was the key insight that he had that led to such a great success in terms of growth for you all?

**Cameron Adams** (00:44:49):
Andre is an amazing guy. He's actually been in and out of Canva three or four times now.

**Lenny Rachitsky** (00:44:54):
Keep pulling him back.

**Cameron Adams** (00:44:56):
Yeah, keep pulling him back. We originally found him, he came from a startup that was going under here in Sydney. We had thought about SEO. We knew it was this thing that you could use, and I think in a couple of our pitch decks, we had SEO as a whole growth channel that we were going to execute upon in order for investors to make a ton of money, but we pretty much knew nothing about it. And it was sitting away in our backlog of things to do in the first couple of years of Canva. And we came across Andre and he just really crystallized what SEO was and how it would actually help us grow. So we brought him on, he rolled out his strategy and it was fantastically effective. It was also incredibly cheap, and it was super easy for us to do ourselves.

**Cameron Adams** (00:45:51):
He set up a whole team of people who looked at people's motivations and the top jobs to be done that Canva could service. He then mapped that through the entire experience of going into Google, typing a search query, getting that search query, seeing that it was a great result, firstly getting to the top result, but then also the experience after they landed on Canva. So if they searched for want to make a Halloween poster, the top Google result would be Canva. They'd click on it, they'd land on the Halloween poster landing page. It would tell them how they were going to do, it show you how the product was going to do that, have a button there that immediately took them into a Halloween poster template, went through a fantastic onboarding of customizing that poster really simply, and then they would hit done, download the image, and they had a fantastic experience and he thought through that whole end-to-end flow from first landing on Google and typing into the search box through to that magic moment where they're like, "Canva just helped me do something amazing and I want to do it again."

**Lenny Rachitsky** (00:46:58):
Amazing. Okay. So a few things I'm hearing there. One is figure out the jobs to be done of potential users, figuring out where their search volume, figure out ones you can actually solve for them, like say a Halloween poster, and then think about that experience end to end from search to landing. And obviously, you have to deliver on that promise. You have to actually show them a really cool Halloween poster that they can create, right?

**Cameron Adams** (00:47:19):
Yeah. Again, it's like product led truly means product led because you can't just SEO the hell out of something that is a terrible experience. So tying that experience at the end of the SEO journey is just as important as the technicalities of SEO itself, and Andre really harnessed the whole spectrum of that to produce the end experience, which ultimately ended up with an active user having a delightful experience.

**Lenny Rachitsky** (00:47:47):
Is there anything else along those lines that was really surprising to you or really, wow, that worked a lot better than I thought because it's probably one of the most well executed, most successful SEO strategies in history. And I'm so curious, just if there's anything else there that's just like, "Oh, wow, that was really effective and I didn't expect that."

**Cameron Adams** (00:48:05):
There's a ton in the SEO realm that Andre drove that can get quite technical. But I think one of the other pivotal growth moments for us was internationalization. I think as an Australian company, we're fortunate in that Australia isn't a great market to focus on. We've got 25 million people here. It's okay, but it's not sizeable. It's not going to make you a huge success. Whereas probably a startup that starts in the US will tend to focus on the US because it's a huge monetizable market, and you can entirely create a great company that just services the US. But from Australia, we needed to think about the world. And that meant that we very quickly got into internationalization.

**Cameron Adams** (00:48:52):
We started localizing and internationalizing our products three years after launch, which is quite early compared to a lot of other companies. And we tackled it with real vigor. We had a goal of being in five different languages within the first year of localization, and we actually hit eight in that first year. And then we set ourselves a goal of being in 100 different languages the next year. And the internationalization team smashed that goal by the end of 2017. And it has drastically changed Canva's growth trajectory because being in other languages, offering a localized experience, something that people in Brazil or Indonesia or Spain or Poland can authentically feel like they're using a product that's made for them has totally changed who our market is, how quickly we can grow. And the way the product's used internationalizing into Brazilian Portuguese meant that we had to focus a ton more on the Android mobile experience, which was really different for us because we focused a lot on the desktop experience for the first four years.

**Cameron Adams** (00:49:58):
People also in Brazil run entire businesses from their mobile phone and the types of content they're creating to interact with their audience is totally different. So it's actually shaped our product and changed our product trajectory as a result of thinking about internationalization. And it has just fueled tremendous growth. Brazil, India, Indonesia, they're all in our top five markets and they grow way faster than the US does.

**Lenny Rachitsky** (00:50:25):
I know you went international in your four, something like that, which is really early for a company. It also makes sense for SEO plus internationalization. Makes tons of sense.

**Cameron Adams** (00:50:35):
Totally.

**Lenny Rachitsky** (00:50:36):
It's a lot more surface area. Okay. I'm going to have two more questions. One is around your freemium strategy. Another a thing you all nailed. There's just this, you're both seeing incredible growth and incredible monetization. I'm curious what your philosophy is on what to include in the free plan versus what people should pay for because it's clearly worked out great.

**Cameron Adams** (00:50:59):
Freemium for us wasn't so much a growth strategy or a monetization strategy as much as it spoke to our core mission of empowering the world to design. We truly want to democratize design, which means we want to get design into the hands of as many people as we can because we think that the world is a better place when more people can create really rich visual content. So freemium just made sense to us because we could get the tool into billions of people's hands and they wouldn't necessarily have to pay for it. And much of the world can't pay for products because they just don't have access to that level of income.

**Cameron Adams** (00:51:36):
So providing that equality was really important to us. But also you need to build a viable business because you can't help the world design if you can't afford to keep the lights on. So freemium just really hit this sweet spot for us between philosophy and business building, so it was always part of our plan since day one. We initially had element sales as our business models. So when we first went to pitch Canva, it was all about create a design. Anything you use in that design will cost you a dollar. So if you dragged in a monkey and you wanted to export that whole design, you'd have to pay a dollar for the money.

**Lenny Rachitsky** (00:52:14):
Yeah, I've done that many times.

**Cameron Adams** (00:52:15):
Yes. It was really exciting to investors at the time. It was also really exciting to the content creators who were giving us the monkeys to put into our product. It was a totally new business model. It unlocked, I think, an area that a lot of people were unfamiliar with, which was stock photography. Most people had not paid 100, $500 for photo, and that really held them back from being visual content creators. So it was a really unique innovation for us. And for the first two years of Canva's life, that was how we derived our revenue. It grew pretty well. It was still like, I don't know, 30% month-on-month growth in terms of revenue. But you can do that in the early stages of a startup. It wasn't until we introduced our first subscription product that we saw really hockey stick growth in our revenue. And that was always the plan to launch a subscription product.

**Cameron Adams** (00:53:09):
But as with many things, it was a vision that we didn't quite have meat around the bones. So we knew we wanted to put in a subscription what exactly that subscription would look like. We didn't quite know. And through the first couple of years of Canva, we started noticing what people were asking for, what they would be more likely to pay in a subscription for. And that formed the first few features that became what was then called Canva for Work, which is now called Canva Pro. And we launched our first subscription, I think about three years after we launched the first product, and we just rapidly saw the revenue from the subscription start overtaking the $1 image payments.

**Cameron Adams** (00:53:53):
So much so that three or four years later we made image element payments part of the subscription. And again, that was like a second hockey stick in gross in terms of the revenue from the subscription because all you can eat images inside the Canva Pro subscription with just amazing value add for people. And I don't even know if we get any revenue from image element sales now. It's all about just going into this subscription.

**Lenny Rachitsky** (00:54:24):
Amazing. Just hockey stick after hockey sticks. Speaking of another hockey stick, I want to talk about AI.

**Cameron Adams** (00:54:29):
Oh, a whole hockey team of hockey sticks.

**Lenny Rachitsky** (00:54:32):
Just need to acquire hockey teams. I want to talk about AI, something on the top of everyone's minds these days. It's another area you guys have nailed. You're doing amazing work with AI. It's providing actual value and business impact. I hear you have an amazing internal AI ops team. Is there anything that you've learned so far that you can share about just how to integrate AI successfully and effectively into a product?

**Cameron Adams** (00:54:58):
As a technology company, you always just need to be constantly evolving and using the best technology. And when we started that was mobile phones and cloud computing. They were the innovations that came in that really unlocked Canva. AI is the next decade I think of innovation. It's the next pivotal piece of technology that helps you build better products, but it also can't just be the basis for your product. You can't just be a product that's purely built on AI on being a rapper around an LLM or something like that. You still need to think about what it is that people want to do and how you build a product that actually meets that need. It isn't just about slapping a chatbot on something that already existed. It's about deeply thinking about how AI can help them get to that goal even faster. And we view AI as the next way of democratizing design and empowering the world to design, helping more people design, helping more people design quicker, helping more people design quicker with better quality. And that's how we approach every aspect of including AI in the Canva platform.

**Cameron Adams** (00:56:04):
We've had a team of machine learning engineers for probably seven years now. I think their work has become a lot more visual now and more customer facing way back when they were just doing recommendation engines inside our emails and our homepage and suggesting templates to you. But now they get to work with some really cool technology, which lets them produce images for people and create designs and summarize text and translate to a hundred different languages like it's really stuff that you can put directly in front of customers now, and that's super exciting. And over the last couple of years, we've built up more and more visual AI experts inside Canva, and we approach AI inside the product through three pillars.

**Cameron Adams** (00:56:53):
First of these is that we need to build some of our own AI tech, and we focus on building the AI tech that we have the biggest advantage in that we have the most data that we can put into it, the most insights, the most criticality to our product and our business. So we have teams building our own AI models around design and images and that stuff. Second pillar is just finding the world's best AI people to partner with. And there's a whole bunch of stuff that you don't need to internalize in your company. You don't need to create an LLM because it's a commodity thing now. And there's a bunch of providers who can do it way better and have way more resources to do it with than you do. So finding a great partner like OpenAI, and we partnered with RunwayML to do video generation, finding the world's best and bringing them into your product with a great integration, the second pillar.

**Cameron Adams** (00:57:48):
And for us, the third pillar is our app ecosystem. So we're fortunate now we've got 170 million people using the product every single month. We have quite an audience that people want access to. And through our app developer ecosystem, they can build apps which directly integrate with the Canva product to give them access to those hundreds of millions of people when people are quite eager to do that. Now, we've seen huge uptake in that from AI developers who have included stuff in Canva from music generators to virtual avatars that can present your presentation to you to a whole slew of things. And those three pillars have, I think, allowed us to create a really coherent experience and one that still keeps a focus on what people want to do, how to help them reach their big goals in a way that doesn't just push technology in the face in a way that just is part of the experience and is a natural way of getting them to where they want to go.

**Lenny Rachitsky** (00:58:49):
I was also looking at the GPT story of the fifth most popular custom GPT where people can generate logos using it. So maybe that's driving some growth too. I know you wanted to share something that you guys are launching or have launched by the time this episode comes out. Is that true?

**Cameron Adams** (00:59:08):
Yeah, so we've got a big event in Los Angeles in a couple of months. It's our Canva create, which is an evolution of the season openness that we used to do. So season openers are no longer just inside Canva now. We actually invite our whole community in, and we're going to have probably about 4,000 people in the theater in LA and a couple of million online. And we're really going to be pulling the covers off pretty much the next decade of Canva. We've focused for the first decade of Canva on unlocking individuals and small businesses, giving them the tools that they need to design and to express themselves and create visual content. And as Canva has grown and people have gotten used to creating this stuff, they've invited their teams in, they now collaborate with people on presentations, on Canva videos, on swag T-shirts that they need to make for their event next week.

**Cameron Adams** (01:00:06):
And as more and more people are using Canva together, it's picking up a lot of steam. We've got 95% of the Fortune 500 using Canva. We've got huge teams of thousands of people using Canva. And this has really opened our eyes to not only the enterprise opportunity, but also just the way to redesign the way people work. And that is what the event at the end of May is about. It's really redesigning work for a whole number of different verticals, from marketing to sales to HR to IT to creatives that work inside large teams, large organizations, large enterprises. We've redesigned Canva for this collaborative enterprise age, so we'll be pulling the covers off that alongside work kits, which are a whole verticalized experiences for people inside marketing and sales and HR that want to use Canva, as well as a bunch of improvements to our AI products and an actual enterprise skew that we're launching as well.

**Cameron Adams** (01:01:13):
So through this growth and through getting to understand the needs of CIOs and heads of security at enterprises, we've realized that there pretty much needs to be a new enterprise product of Canva that meets the needs of hugely scaled teams, which has been quite different for us because we have scaled from those individuals just using the product all by themselves and organically growing the teams. And now looking at it from a top-down lens and building that enterprise products is what we've been focused on for the last couple of years. So we'll be pulling the covers off that as well in LA.

**Lenny Rachitsky** (01:01:50):
I see another hockey stick approaching. I'm excited of all these things you're launching. What a business you've built. I feel like it's still way too under the radar, even though it's this juggernaut. Nice work, Cameron and team. Two more questions I ask everyone, where can folks find you online and how can listeners be useful to you?

**Cameron Adams** (01:02:06):
They can find me online at themaninblue.com, which is my blog that's been around for 24 years now. What was the other question? How can you-

**Lenny Rachitsky** (01:02:15):
Yeah. How can listeners be useful to you?

**Cameron Adams** (01:02:18):
I love their design stories, how design has helped unlock something for them, whether it's starting their first business or helping a nonprofit that they volunteer at. I just love bumping into someone in the street and seeing the joy of design right up in their eyes. So please do that whenever you see me.

**Lenny Rachitsky** (01:02:36):
Beautiful. Cam, you're awesome. Canva is awesome. Go check out canva.com. Easy to find. Thanks for being here.

**Cameron Adams** (01:02:42):
Thanks, Lenny. See you soon.

**Lenny Rachitsky** (01:02:43):
All right. Bye, everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcast, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [16/21] Lessons from a two-time unicorn builder, 50-time startup advisor, and 20-time company board member | Uri Levine (co-founder of Waze)

**Lenny Rachitsky** (00:00:00):
You've co-founded 10 different companies. You've been on the board of 20. You've also built two unicorns including Waze. The biggest startup lesson you seem to have taken out of that is to-

**Uri Levine** (00:00:09):
Fall in love, fall in love, fall in love, fall in love with the problem, and then actually what you're trying to do is engage everyone else to fall in love with the same problem, to go into this journey, into this path and follow your leadership there.

**Lenny Rachitsky** (00:00:20):
Anything you wanted to share around hiring and firing?

**Uri Levine** (00:00:23):
Every time that you hire someone new, mark your calendars for 30 days down the road and ask yourself one question, knowing what I know today, would I hire this person? If the answer is no, fire them immediately.

**Lenny Rachitsky** (00:00:36):
Let's actually talk about fundraising.

**Uri Levine** (00:00:37):
Most people are missing the most important slide of their presentation is the first slide. This slide is going to be presented for the longest period of time. This is the place that you're going to put your strongest point. Now the second most important slide is the last one.

**Lenny Rachitsky** (00:00:56):
Today my guest is Uri Levine. Uri is the co-founder of Waze and nine other companies. He sold two companies for over a billion dollars. He's also been on 20 different startup boards, including a dozen he's still currently on. He's also advised over 50 founders and startups over his career. More recently, he wrote a book that summarizes all of his advice for founders called Fall in Love with the Problem, Not the Solution, A Handbook for Entrepreneurs. In the foreword to the book, Steve Wozniak said, "This book will change your life and become your Bible if you are an entrepreneur," and I cannot disagree with that. This book is very tactical with amazing stories and walks you through the ideation phase all the way to exiting your company.

**Uri Levine** (00:02:17):
Thank you. Happy to be here.

**Lenny Rachitsky** (00:02:18):
Okay, so here's what I've gathered about your career, and let me know if I've missed anything. You've co-founded 10 different companies, including four you're still operating. You've been on the board of 20 companies. You've advised 50, maybe more, companies. You've also built two unicorns, including Waze, which you sold for over a billion dollars, which back then was an astronomical amount of money. It still is. So does that all sound right? Is there anything big I missed about your career?

**Uri Levine** (00:02:48):
That sounds about right.

**Lenny Rachitsky** (00:02:49):
I think what's really interesting to me is that from all of that experience, the biggest startup lesson you seem to have taken out of that is to fall in love with the problem. It's what your book is called. You have a T-shirt that you're wearing right now that you wear on every podcast that says that exactly. Clearly this lesson has struck a big chord with you. I'm curious if there's a moment where you realize that that's the core and that's something that every founder needs to get right. Is there an aha moment or is it kind of this progressive like, "Oh, wow, maybe this is the secret."

**Uri Levine** (00:03:19):
I'm not sure that this is a certain moment. I think that that was evolving over time and realizing that, look, at the end of the day, the entrepreneurship journey is about value creation. The simplest way to create value is solve a problem. That's the simplest way. And in my background, I'm an engineer always looking for the simplest way, and solve a problem is the simplest way, and so this is where fall in love with the problem coming from, and people occasionally would confuse the T-shirt with the book, and now the T-shirt is about 10 or even more years old and the book is only two years old, and so I was wearing those T-shirts for a long while before I wrote the book and when I wrote the book that was obvious that this is going to be the name of the book, but they are way more into that, right?

**Uri Levine** (00:04:06):
So when you fall in love with the problem, then what happened is that the problem is going to serve as the North Star of your journey, and when you have a North Star, you're going to make less deviation from the course and you are way more likely to become successful. But also the story that you are about to tell is way more compelling. Just imagine that we will be here in 2007, just before I started Waze, and I will tell you I'm going to build an AI crowd-source based navigation system and you're going to say, "Oh, yeah, very interesting," but you don't care. If I will tell you I'm going to help you to avoid traffic jams, then you do care, and when your customer cares, they want you to be successful, and when they want you to be successful, they are going to help you to become successful.

**Uri Levine** (00:04:56):
And so in that sense, fall in love with the problem is really a key to increase the likelihood of being successful. So in general, all of my startups start with a problem. Think of a problem, a big problem, something that it's worth solving, something that the world will become a better place if you solve that and then ask yourself, so who has this problem? If you happen to be the only person on the planet with this problem, I can recommend you a therapist. Don't build a startup. It's way more expensive and takes way longer period of time to build a startup. But if a lot of people actually have this problem, what you really want to do next is go and speak with those people and understand their perception of the problem and only then start to build the solution. If you follow this path and your solution works, it's guaranteed that you're creating value.

**Uri Levine** (00:05:47):
If you start with a solution, you might be building something that no one cares and that's really frustrating. So fall in love with the problem. This is where you want to start. Now this is really hard because I am getting tons of emails every week from entrepreneurs and they all start with what we are doing and I don't really care what you're doing. What I really care about is why you are doing that, and this is the problem that you solve or the value that you create or the value that you create for me. This is what really matters, right? And so if you start your story with, "Our company is," or, "Our system is," and in the recent year everything is, "Our AI system is," or, "Our AI company is." But generally speaking, if you start your story with that, you focus on your solution. If you start with the story with, "The problem we are solving is," Then you focus on the problem. If your story start with, "The value that we create for you is," then you focus on the user. The last two are way better than focus on the solution.

**Lenny Rachitsky** (00:06:59):
**Uri Levine** (00:09:30):
So people ask me, "So you send me to speak with users. How many?" And I will tell them a hundred. You don't need a hundred, but the hundred basically say you need to get out of your comfort zone. It's not just your close friends and family that you need to discuss that. You need to discuss that with people that you don't know. And usually what happen is, and the validation is in most cases is really clear, right? If you tell someone, "This is the problem I'm going to address," and they will tell you, "Oh, I know someone that has this problem," it's not a real problem. If they will tell you, "No, no, no, no, no. This is not the problem. The problem is," and they will give you their description of the problem. This is something that you really want to follow. So if you speak with a hundred people, but if you actually speak with 20 people that you don't know, you will get validated whether or not this problem is real or not.

**Uri Levine** (00:10:23):
And look, it's not the only way to become successful, right? You look at one of the most successful products in the world, the iPhone, right? And you ask yourself, what was exactly the problem when they started? And the answer is that there was no problem when they started. There were smartphones and people were actually very happy with them. And so occasionally we need to invent something completely new, but solving a problem is simply the simplest way to create value.

**Lenny Rachitsky** (00:10:53):
Another element of picking a problem to work on, so you say you fall in love with a problem. Is being excited to work on this problem. There's oftentimes problems you find that aren't that exciting to you or you're not excited to work on real estate software, but you find there's a big problem. How important is it that you're personally passionate and excited to work on this thing versus like, "Oh, wow. This is a huge business opportunity. I got to go after it. It doesn't matter if I'm not that passionate about it."

**Uri Levine** (00:11:20):
Fall in love, right? This is really passionate. Really, really passionate. Look, the journey is really hard and complex and long and so you have to be in love in order to go into this journey because otherwise it's not going to be successful. You really want to be passionate. If you're not passionate about the problem, even though that the problem might be real and big and significant, there is not enough drive, there is not enough internal drive to take you through the hardship of the journey, and so you need to be passionate. You need to fall in love. You personally need to fall in love with the problem. And then actually what you're trying to do is engage everyone else to fall in love with the same problem, to go into this journey, into this path and follow your leadership there.

**Lenny Rachitsky** (00:12:05):
Is there an example of a pivot that you maybe went through where you realized the problem was not as big as you thought or you realized there's a bigger problem?

**Uri Levine** (00:12:13):
So actually there are many, right? So Oversee deals with maybe biggest secret in travel industry. What happened to airfare after you booked your flight? Now you have no idea because you never compare prices after you met the reservation. But you know that airfare is going up and down all the time. It's going up and down before you are making the reservation and keep on going up and down after you're making the reservation. So if this is the price that you paid and this is cancellation fees, if the price drops here, you can rebook the same flight at the cheaper price.

**Lenny Rachitsky** (00:12:48):
Genius.

**Uri Levine** (00:12:49):
If you would only keep on comparing prices after that, right? So we started this company that is actually monitoring your own itinerary and we realized that this is going to be huge benefits to travelers and we started that as a B2C company, direct to consumers, and we realized that even though the people really care, they are not willing to take the action that is required, and we ended up with doing that for corporates, and in corporates there are very simple ways for them to engage that automatically, so automatic rebooking and so forth, and we can save corporates about 10% of the travel budget that goes directly to bottom line. So we started that as a B2C and then we realized that this is way harder than we think it is, and we ended up with converting that into B2B, which turns out to be very successful for us. And so occasionally there are companies that you start your journey with one perception and you change that and that will happen multiple times.

**Lenny Rachitsky** (00:14:00):
That's an awesome example. I want to, before I move on to, I'm kind of thinking about this in the phases of starting a company. So we're talking right now about coming up with the idea that you want to commit to. A lot of people that want to start companies are not sure how to find a great idea, so the core advice you're sharing is find something, find a problem, and fall in love with solving that problem in whatever way you can. Do you have any other advice for helping somebody find a problem and finding a startup idea? Where do you find startup ideas? What do you find? What does work for you mostly?

**Uri Levine** (00:14:30):
So for me, it's usually personal frustration that leads me to start to think about it, whether or not we can change it. I hate traffic jams, right? I hate leaving money on the table, right? So there are many things that I ran into and I get frustrated and I tell myself, "No, no, no. There must be a different way to do that." But in general, look, the problem itself needs to start from you, right? Something that really bothers you, something that you care about, and then it's the validations of the problem that you speak with many people, try to realize. Now if you'll tell me, oh, this is a B2B, then speak with many businesses, right? Speak with those that you believe actually do have this problem and I understand their perception.

**Uri Levine** (00:15:13):
Once you validate that, then there are few things that you need to realize. One is about the journey itself. This is going to be a multi-dimensional journey. It's going to be at least three dimensions and maybe fourth, right? So the three dimensions, one of them is it's going to be a roller coaster journey with ups and downs and ups and downs. And look, if you'll tell me that all the businesses in the world have ups and downs, I agree, but the frequency of those when you are building a startup? Way higher. I think that I heard the best quote on that from Ben Horowitz, Ben Horowitz from Andreessen Horowitz venture capital firm, and before that he used to be a CEO of a startup and he was asked whether or not he was sleeping well at night and he said, "Oh, yeah, I slept like a baby. I woke up every two hours and cried." And that's really the reality of that. The frequency of the differences are so dramatic that there is nothing compared to that, a roller coaster journey.

**Uri Levine** (00:16:17):
It's also a journey of failures. Look, we are trying to build something new that no one did before, and even though that we think that we know exactly what we are doing, we don't. So we try. We try one thing and it doesn't work. We try another thing and it doesn't work. Or if we keep on trying different things until we find one thing that does work. Now, if you realize that this is going to be a journey of failures, then there are two immediate conclusions. The first one is that if you're afraid to fail, then in reality you already failed because you are not going to try. Albert Einstein used to say that if you haven't failed, that because you haven't tried new things before. If you're going to try new things, you will fail. Michael Jordan used to say that, "I've failed over and over and over and over again and this is what made me successful." And so this is the first conclusion.

**Uri Levine** (00:17:07):
The second conclusion is that you really want to fail fast. Just think about it, right? If you fail fast, you still have plenty of time to try another attempt and build another version of the product. Try another go-to-market approach. Try a different business model so you still have plenty of time to make more and more and more attempts, and the more attempts that you have, you simply increase the likelihood of being successful. Just think that you play basketball, right, and you try to score from half court. If you have one shot and you are not Steph Curry, you are very likely to miss. But if you actually have a lot of shots, one of them you're going to make. That's it. Just think about it. The biggest enemy of good enough is perfect. You don't need to be perfect. You need to be good enough in order to win the market, and the way that you are going to become good enough, by the way, is really simple. You start with not good enough and you iterate and iterate and iterate until you become good enough and then you'll win.

**Uri Levine** (00:18:10):
The third dimension is that this is going to be long journey. Very long. Way longer than you think it is. And the longest part of it is until you figure out product market fit, and product market fit goes into the different phases of building a company. To a certain extent, I would say, look, the difference between a corporate and a startup is that a corporate knows this is our value proposition, this is the product that we are selling, this is the pricing of this product that we are selling, this is the target audience, this is how we are going to sell them, this is how we going to the market, and all we have to do is keep on executing and hopefully nothing will change over the period of time. When you start as a startup, you don't have a product. You don't know what's the business model. You don't know what people are going to pay you for. You don't know how to grow your business, and you need to figure out all of those, and this is going to be a long journey.

**Uri Levine** (00:19:11):
Now, the longest part is usually figuring out product market fit and product market fit is really simple. That means that you create value to your customers. If you do not figure out product market fit, you will die. As simple as that. You never heard of a company that did not figure out product market fit. They simply died. That's it. Now, once they do, and for a second I want you to think of, with all the applications that you're using every day, right? From searching Google, using Waze, WhatsApp, Facebook, Netflix, Uber, whatever it is, and ask yourself what is the difference between any of those today and the first time that you have used that? And the answer is that there is no difference. We are searching Google today the same way that we searched Google for the first time in our life. We're using Waze today the same way that we used Waze for the first time in their life. So once a company figure out product market fit, they don't change their product anymore because this is the value that they created to the customers and you don't want to change that.

**Uri Levine** (00:20:14):
What we don't know is how long did it take them to get to this point, right? Beforehand we never heard of them and after that they don't change that anymore. It's a matter of years. For Waze, it was four years. For Microsoft, it was five years. For Netflix, it was 10 years. Now if you'll tell me, "Oh, today is very different. ChatGPT just started a year ago." No, they're seven years old. It took them six years until you heard about them for the first time in your life. So it does take time to create value and this is something that is really significant. Now, at the end of the day, product market fit have one metric. One metric. That's it. Retention. That's really simple. If you create value, they will come back. If they're not coming back, that means that you are not creating value. Now think about your episodes, right, of this podcast, right? Most of your listeners are returning, right? Because you create value for them and they are coming back. That's it.

**Lenny Rachitsky** (00:21:24):
100%. Every single one, every episode.

**Uri Levine** (00:21:29):
Occasionally there are new one, right?

**Lenny Rachitsky** (00:21:30):
And there's new ones coming in all the time.

**Uri Levine** (00:21:32):
[inaudible 00:21:32]. By the way, this is one thing that some businesses don't realize, whether or not their customers are going to be new customers or returning customers, and in many cases they simply fail to realize that upfront and the result is that they are not building the right go-to-market strategy.

**Lenny Rachitsky** (00:21:56):
We covered a lot of ground there. That was amazing. I'm going to follow a number of threads of things you just touched on. You talked about product market fit briefly. What was the moment you felt product market fit with Waze? I don't know if I've ever heard that story.

**Uri Levine** (00:22:09):
We started in Israel and Israel is a small place and we ended up with being very successful in Israel and then we said, "Wait a minute. Waze crowdsource all the data, right?" Not just the traffic information and speed cams and so forth, but also the map data itself, so we can start from a blank page. And the users while they drive, they create the map and they create traffic information and so forth. And so we figure out that we can start anywhere and we made Waze global at the end of 2009 and we expect that to work the same way that it did in Israel, but it didn't. It was not good enough. It was not good enough in the U.S. It was not good enough in Western Europe. It was not good enough in Latin America, it was not good enough in Asia. It was not good enough anywhere that matters, right?

**Uri Levine** (00:22:57):
It was actually good enough in about four places. In the Czech Republic, in Slovakia, in Latvia and Ecuador, and that's about it. Rest of the world not good enough. So what we did is we spoke with the drivers. Look, they wanted us to be successful. We basically said the drivers are going to fight traffic jams together, so common enemy, togetherness, all goodness. Everyone wanted that to work, right? So people downloaded the app and it simply was not good enough. So they churned, right, because if it's not good enough, you're not coming back. We spoke with them. We asked them what didn't work for them. They told us because they wanted it to work, and we built the next version addressing everything that they've told us, and we know that this is it, and it's not. So we doing it all over again. We speak with the drivers. We ask them what didn't work for them, they tell us. Now we build the next version and now we have the conviction that it's going to work and it's not. Journey of failures.

**Uri Levine** (00:23:58):
Iteration after iteration after iteration after iteration. More than a year of iterations until beginning of 2011 that we actually started to see that working, and then it's in multiple places. In the U.S., one metropolitan after the other, right? Los Angeles first and then San Francisco and then Washington D.C. and Chicago and New York and Atlanta and so forth. In Europe, one country after the other. Italy first and then France and Netherlands and Sweden and Spain and one country after the other. In Latin America, one country after the other. Colombia first and then Chile and then Brazil and then Mexico and then rest of Latin America. In Asia, multiple countries one after the other. Not all of them, by the way. Not all of them. Japan is a very good example where it didn't work and it will never work. Waze crowdsourced the information, right? Which basically says that as soon as we get to the level of good enough, then we are good enough.

**Uri Levine** (00:25:01):
House numbering plan. In the U.S., it's really simple, right? Every block is a hundreth numbers, right? And so if I have the map, I can actually count the number of blocks and take you to approximate the right location even if I don't have exactly all the house numbers there. Most of the western world, it's a geographical order. So in Israel, this is going to be sequential order, odd number on one side of the street, even number on the other side of the street starting from one until the end of the street and so forth, so it's enough that I will have few house numbers that I can actually take you to the right place.

**Uri Levine** (00:25:38):
In the UK, house number starts on one side off the street and then on the other side they are coming back, right? And so there is an order. In Japan, it's chronological order. The oldest house in the neighborhood is house number one.

**Lenny Rachitsky** (00:25:54):
Oh, wow.

**Uri Levine** (00:25:56):
And then the house number two can be miles away, but it's the second oldest house in the neighborhood and so you have to have all the house numbers unless... Until then you are not good enough. And crowdsource is, if you need perfect information, crowdsource may not be the right way to do that.

**Lenny Rachitsky** (00:26:17):
Just to close the loop on this question, when you were launching these markets and it wasn't working, were you actually looking at retention at that point, and if so, was there a number you were looking for? Or was it more qualitative like it's just taken off off into the right. Like where were you actually watching back in the early days?

**Uri Levine** (00:26:32):
That was easier for us because we tried to compare everything to Israel, so we looked at the frequency of use or when our people are coming back. How long does it take them until the next try and until the next try. And in generally speaking, if you look at something that have high frequency of use, then you will be looking at three-month retentions of 30, 40, 50% is actually pretty good indication. But usually what would happen is that you would know when they convert and that's going to be after the third or the fourth time, and if they're not getting to the fourth time, then they are basically saying, "Okay. We gave it a try. We really like this story. We gave it another try, and it's not good enough."

**Lenny Rachitsky** (00:27:20):
That's a cool heuristic. Do you find that that is useful for other startups, consumer-type startups or is that just something you think specific to Waze at that point, this idea of coming back for the third time?

**Uri Levine** (00:27:29):
It's really depending on the frequency of use, right? If I will tell you that I have a startup that helps you to file your tax returns in three minutes, then okay, that's absolutely amazing, but you are only going to do that, next time is next year. By the way, we did have a startup that was doing that. It's still a little bit up and running, but that was really frustrating because the tax authority shut us down.

**Lenny Rachitsky** (00:27:58):
You got to fall in with the problem. You got to power through that. Just change the government. Just kidding. The story you told of Waze and iterating is a really good example of falling in love with the problem. You're really passionate about. I want to solve traffic, I hate traffic. By the way, what it made me think about a little bit is Elon, when he hated traffic, he built the boring company and built tunnels underground, and your solution to hate traffic is I'm going to build Waze in a soft wrap.

**Uri Levine** (00:28:29):
We start Waze with the vision that we are going to help people to avoid traffic jams. Now the reality is that there are more traffic jams today than there were in 2007. Obviously, number one, I'm not done. And number two, if you ask people what is the value of Waze, then it's not about avoiding traffic. It's about creating certainty and certainty is way higher value than saving time. So you know exactly when you're going to get there and this is a way higher value. And by the way, we learned that in the U.S. market when we spoke with people. They told us, "If I am living in Cupertino and I need to drive up to San Francisco and I can take 101 or 280, I don't really want to change my route unless there is something dramatic, but what I really want to know is how long it's going to take me. So I'm going to stay on the 101. I'm not going to get into service road. I'm not going to take El Camino Real. I'm not going to try something else. I'm going to stay on the 101. Just let me know how long it's going to take." So certainty creates way more value than saving time.

**Lenny Rachitsky** (00:29:44):
I want to talk through a couple other of the chapters in your book. So chapter four is around the different phases of a startup journey and your core advice is that it's important to focus on one thing at a time in each of these phases, and the first phase, you call it the all over the place phase, I think, or yeah, the all over phase, and the idea is you need to get out of that as soon as you can and then focus. Can you just kind of talk through these different phases and what you think people do wrong along the phases? Maybe they get them wrong or they focus on the wrong things in each phase.

**Uri Levine** (00:30:17):
So initially you think about your new idea from multiple perspective, right? This is the problem. This is how this solution is going to look like. This is what I'm going to do next year. This is my 10 years vision. This is my business model and so forth. So you think about everything, but you actually need to execute only one thing. Now this one thing is figuring out product market fit. It's not one thing, right? Wait a minute. You also need to build an organization and you want that organization to be something that you really like and so there are a lot of operational stuff, but you need to figure out product market fit. As we said earlier, if you don't figure out product market fit, you will die. If you do, then you get to live and die another day and the other day is whether or not you're going to figure out how to grow your business and whether or not you're going to figure out your business model.

**Uri Levine** (00:31:11):
Now the good news is that I will tell you that if you create value, you will figure out a business model, at least for the people that you create value for them. They are most likely willing to pay. Now in general, I'm not saying that this is the only business model that is viable, but if you create value, you will figure out a business model. But figuring out a business model is a journey by itself, and guess what? It's going to be a long roller coaster journey of failures. When we started Waze, we thought that we're going to sell map data and traffic information and we ended up with doing advertisement. Very different business model. Because we realized that it's not for us. It's too long sales cycles. We were very mobile internet dynamic company and selling to government is not exactly what we wanted to do, and so we ended up with a different business model, but with a lot of reasoning why this is the right business model for us.

**Uri Levine** (00:32:14):
And figuring out growth, look, if I would ask a hundred people on the street, how did you hear about Waze? They, 95 of them, if not 99 of them, will tell me, "Someone told me." Word-of-mouth, right? So everyone wants to have word-of-mouth. Word-of-mouth you can only have if you have high frequency of use. If you're doing tax returns once a year, even if you really like the experience, then once a year you're going to tell someone else. If you're using Waze every day, then every day you have an opportunity to tell someone else. So word-of-mouth, even though that everyone would like that, it's only going to happen if you have high frequency of use.

**Uri Levine** (00:33:01):
So those phases requires different focus of the company, right? Initially if you focus on product market fit, then you don't need sales. You have no product to sell. You don't need business development. You don't need even marketing. You need product. You need developers and you need product lead to define the product and lead through the iterations of the product until we get to the level that it's good enough. Once you get there, you shift gears. If the product doesn't change, if we search Google the same way that we searched Google for the first time in our life, then the product development is now not going to be focused about value creation. It's going to be focused about either figuring out business model or figuring out scale, and the entire company shift gears and move to a different phase.

**Uri Levine** (00:33:54):
Now, this is really hard. Just think about it. If up until now the product development group was the only things that matters, all of a sudden we think about marketing now because we are now in the go-to-market phase that this is the most important thing of the company. Occasionally I found companies that have challenging and shifting gears so they didn't figure out where the clutch is and you have to because otherwise you're stuck in the previous phase that you kind of finished that journey. This journey is nearly done and you need to shift gears, and if you don't do that, then you get stuck. If you do that, if you try to do multiple things at the same time, you will fail. Focus is not about what we are doing, it's about what we are not doing. These are the hard decisions.

**Lenny Rachitsky** (00:34:50):
I like that. So the four phases, just to briefly summarize, it's kind of like come up with the idea, find product market fit, then it's a question of should you keep focusing on growth or should you figure out the business model before focusing heavily on growth? In your advice, it sounds like if it's high frequency, word-of-mouth driven, focus on growth and then you figure out business model later. If not, figure out how you're going to make money and then figure out growth.

**Uri Levine** (00:35:14):
Exactly. Because if you have high frequency of use, you will end up with growth coming by itself, right, for word-of-mouth, and therefore you should do that at the beginning. If you don't have high frequency of use, you are sentenced to acquire users or customers all of your lifetime. If this is the case, then you really want to figure out the business model before you start and go and do that.

**Lenny Rachitsky** (00:35:41):
That's really helpful. I think actually a counter example to your point about how frequency of use is necessary for word-of-mouth growth is Airbnb. Something like 70% of Airbnb growth is word-of-mouth and frequency of use is actually really low. It's like once or twice a year. I wonder if it's because the experience is so unique and special that it still works and enough people travel enough times, slash if it was a higher frequency, it would've grown even faster, I imagine.

**Uri Levine** (00:36:09):
High frequency of use is the simplest way for word-of-mouth. The other thing is coolness. If it's really cool, then you'll tell more people, and Airbnb was really cool at the beginning of the journey, so now everyone knows about Airbnb, but when they started that was way cheaper and really unique experience than hotels.

**Lenny Rachitsky** (00:36:36):
It's still actually mostly word-of-mouth. I think it was probably higher initially, but it's still almost 70, 80% driven by word-of-mouth. So it's still cool enough. Good for them. You have a couple of quotes that I wanted to share, which are along the lines of things you shared. One is just, you have this kind of, what's the most important stage at a company? They all are, but one at a time. I love that line. The other is the main thing is to keep the main thing the main thing. The same advice you just shared. Just like focus. So you're in the PM, product market fit phase. Focus on that. Don't think about growth yet. Don't think about business model yet necessarily. I know investors are going to push you to figure these things out and you'll have to have some story of like, "Here's how it might make money. Here's how we think we're going to grow." Right? You need to think about that a little bit, but maybe don't make that the focus.

**Uri Levine** (00:37:22):
So this is one of the areas that investors don't like to hear the truth, right? The truth is that I don't know how I'm going to bring the users. I will figure that out once I get there, but the reality is that right now I don't know, but they don't want to hear that. What they want to hear is that, "Oh, I know exactly how I'm going to bring them." And what I will say is that I know exactly where I'm going to start my experiments, but most of the investors would like to see a coherent story that makes sense, right? This is our business model. This is how we going to make money. This is what we're going to sell. This is how much they're going to pay. This is why it's a simple business model and these are the comparable to this business model.

**Lenny Rachitsky** (00:38:03):
Yeah. But investors have the final word, unfortunately. They decide if they want to invest or not, and so if your story is not compelling, they're going to be like, "All right. We'll find someone else."

**Uri Levine** (00:38:13):
You know, it's seasonality, right? There are periods of time that raising capital is easier and then many of the entrepreneurs will be choosers are not beggars, and there are periods of time that is that way around, and most of the entrepreneurs will be beggars and not choosers.

**Lenny Rachitsky** (00:38:33):
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**Lenny Rachitsky** (00:39:52):
Let's actually talk about fundraising as a topic I wanted to spend a little time on. How much money have you raised for the companies that you've started total, roughly?

**Uri Levine** (00:40:02):
So Waze raised about $50 million throughout the entire journey. We started by raising 12. That was the first investment round, and then we raised the 30, and then there was the last round that we raised actually not a lot.

**Lenny Rachitsky** (00:40:23):
That's a surprising small amount of money to raise for the outcome.

**Uri Levine** (00:40:28):
In general, I would say Israeli startups are leaner than American startups, so you can raise less money.

**Lenny Rachitsky** (00:40:36):
Yeah, that's amazing.

**Uri Levine** (00:40:37):
At way lower valuation, unfortunately, and end up with pretty successful results.

**Lenny Rachitsky** (00:40:44):
That's amazing.

**Uri Levine** (00:40:45):
Raising capital, it's a journey by itself and different from the other journeys that you need only once. Raising capital is going to happen multiple times. And if we say that building a startup is a roller coaster journey, then I will say raising capital is a roller coaster journey in the dark.

**Lenny Rachitsky** (00:41:07):
It's like Space Mountain.

**Uri Levine** (00:41:09):
Yeah, sort of. And one of the reason is that this is a different ballgame and you don't know how to play at the beginning. I would say a few things about raising capital for the first time. Number one, I spoke with many investors and one of the conversations that I had that they really, really resonate with me was when I spoke with one of the leading VC in Israel and asked their partner, "How long does it take you to decide if you like the entrepreneur or not?" And he asked me, "Do you want the right answer or the real answer?" Say, "You know, I heard the right answer so many times, give me the real answer." And we were sitting in a small meeting room, so the guy is looking at me and then looking at the door and looking at me again and say, "It's before they sit down." Say, "Oh, no, no, no. Say that again, right?"

**Uri Levine** (00:42:02):
That's the first impression. Now we all have first impression. How long does it take you to decide if you like a candidate or not? Second, you go on a date. How long does it take you to decide if you like the date? Seconds. And then maybe there are a few more minutes that you allow yourself to either change your mind or let that first impression solidifies. Now if this is the case and you're looking to raise capital, start with the strongest point at the beginning. Whatever it is, and I don't care if this is the size of the problem. This is the faction that you have. This is the team that you have built. I don't care what it is, start with that, because by the time you'll get there, they might be already setting up their mind. Then start with the strongest point at the beginning. And by the way, finish with that as well.

**Uri Levine** (00:42:53):
So this is the first conclusion. The second conclusion is that I spoke with early stage investors, those that invest the first money in. So company has a story to tell. That's about it, right? No traction, nothing yet is built and so forth, and I asked him, "Why did you decide to invest in this company and this company and this company?" And I spoke with many investors, and what I heard was actually pretty consistent. I like the CEO. I like the story. That's it. I like the CEO. I like the story. Now if this is the case, then there are two immediate conclusions. The first one is that the CEO goes alone to the meeting. I need the headlight on me. I don't need any distractions. I don't need my team members. I don't need anything else in the room, just me. Because if I bring other people, then at the end of the day they might say, "Yeah, I like the team, but the CEO was not specific, right? Was not unique. Was not jumping out of the pages." So CEO goes along and tell the story.

**Uri Levine** (00:44:02):
The other part is that they need to tell a good story, and good story is not about facts. It's about creating emotional engagement. It's about creating the sense that the listener would like to be part of this story. And for investor, it's two things. Number one is that they want to believe that this is usable, and number two, they want to believe that you can build it and this is the story that you need to tell. Now, I would say always start with the problem, right? Because guess what? Investors are also users. If they don't think that they're going to use it, so it's relevant for them, and they don't think that they're going to use it? They will basically dismiss that. They will basically say the market is not there.

**Uri Levine** (00:44:52):
So these are two main things. The third thing is it's a different ball game, right? So if you have product and you tell the story to potential customers, the right order of magnitude is that about one third of the listeners will buy. So in a more mature company, their pipeline is going to be three eggs in order to sell at the end of the year one eggs. One third are going to say yes. In investors, it's 1%. Not one third, 1%. So you're going to hear a hundred times no until you hear one yes. And that a hundred times no is something that you need to understand from the beginning because that's really discouraging, right? You go and speak with investors and they tell you... I call that they open up the big book of excuses why not. But in general, they are not going to invest, right?

**Uri Levine** (00:45:54):
Now you look at it from the other side, a venture capital partner is likely to see between a hundred and 200 companies a year and invest in one or two. 1%. That's it. So if this is the case, then it's going to be the same case for you. One out of a hundred. If you want to increase the likelihood, learn how to tell a good story, start at the strongest point at the beginning, remember that they are users, too, so their emotional engagement is going to come through the usage, the use case, and not through how big the business is.

**Lenny Rachitsky** (00:46:34):
I love the summary at the end. I love that you summarized your points, because I try to do that. You did my job. I love this phrase you have in your book, "The dance of 100 nos."

**Uri Levine** (00:46:44):
At the beginning you look at it and you say, "Okay, they say they decided not to invest because of X, Y, Z," right? Whatever it is, right? Google can do that in no time or the market is not big enough or the market is complex or whatever it is, and then you try to argue, and you don't know that it's useless, right? It's like you go on a date and she said no, and you try to argue, right? No, there is nothing to argue anymore, right? That's no.

**Lenny Rachitsky** (00:47:16):
Yeah. I look at a lot of startups too. I do a bunch of angel investing, and yeah, if it's not going to be a fit, it's just not going to work, and I could spend all this time trying to explain it to you, but nothing's going to change. And because there's other startups out there is a big part of it, right? You just want to pick the things you can that are the best, not necessarily things that are good ideas. I really like this idea of starting with your strongest point. That's such an important tactical piece of advice. To your point, investors make decisions really quickly, and so starting with something that really catches their attention, it makes so much sense because once you feel like, "Oh, wow, maybe this is a thing," your whole brain is starting to look at it from a, oh, yeah, okay, like you have a positive bend on everything you're hearing versus like, "No, no, no, this is never going to work and everything is already biased."

**Uri Levine** (00:48:00):
So I would add here another very strong advice. Most people are missing the most important slide of their presentation. The most important slide of your presentation is the first slide, not the one that you think about it. The first slide. The one that says Company XYZ intro. This slide is going to be presented for the longest period of time.

**Lenny Rachitsky** (00:48:29):
Wow, that's a good point.

**Uri Levine** (00:48:31):
The longest period of time in the presentation, this slide is going to be presented on the screen and you didn't say anything there. This is the place that you're going to put your strongest point.

**Lenny Rachitsky** (00:48:45):
I love that. Is there an example of someone that did that or did you do that, one of your startups? What do you put there?

**Uri Levine** (00:48:51):
I do that all the time.

**Lenny Rachitsky** (00:48:52):
What's an example of something you put on that slide that's such a good idea?

**Uri Levine** (00:48:56):
Maybe size of the market. Maybe description of the problem. Whatever it is, right, the strongest point is there. Now the second most important slide is the last one. Not the summary. The one that says thank you. That's the time to repeat that. So most of their presentations will end up with thank you and my email, right, and this is going to be the last slide, right? Which makes sense. You just missed the opportunity. This is going to be the second-longest displayed slide of the presentation. Maybe the first.

**Lenny Rachitsky** (00:49:39):
Yeah. Everyone's sitting there chatting, asking you questions. That's so smart. Are there any more of these tips sitting in your head to share, because these are awesome.

**Uri Levine** (00:49:48):
I do a lot of public speaking and usually my last slide says one more story and I decide on the story based on the audience and the dialogue so far and so forth. But I have many of stories, many last stories that I would like to tell. The important part is that no one is going to cut you off the stage if you have just one more story, and so this is where you can recap everything. This is where you can do whatever you want, right? Because no one is going to tell you, "Okay, time is up."

**Lenny Rachitsky** (00:50:26):
Right, and they're not impatient because they're like, "Okay, it's almost over. Let's just let him finish."

**Uri Levine** (00:50:30):
Exactly.

**Lenny Rachitsky** (00:50:31):
Yeah. I love that. Speaking of stories, what's the wildest fundraising story that you've been through? Is there one that comes to mind of like, "Holy shit. I can't believe that happened," or, "I can't believe that worked out"?

**Uri Levine** (00:50:43):
One of the earlier startups that I was guiding was about, eventually rolled into gift cards, but in Israel, when you return something to the store, you don't get your money back. What you get is a gift card for that particular store, right, and obviously if you return something, then it's not necessarily that you have something to buy in the store and you ended up with having a gift card that is never being used, and so why not sell this gift card? What happened is that I heard the story of the CEO and I thought that the story is not good enough, and I told him, "Look, you have to tell a better story," and asked, "Can you give me an example?" And I said, "Yeah, just imagine that," and then there was a long story about the microwave stuff working, and I bought a new one and really long, long, long story about with the details, right? How do you make a story make believe? With details. Right? The more details people think that this is real. Right?

**Uri Levine** (00:51:48):
If there are no details, then this is not real. So I told him this story that was like five minutes explaining, trying to fit the microwave into the closet and it didn't fit in into the cabinet, and it didn't fit in, and I had to return it to the box and so forth and whole story. And then I spoke with an investor in Israel and I told him about this new company that I'm going to invest, and I told him the same story about this microwave, right, and he said, "This is interesting. I would like to meet the CEO." Then he met the CO and CEO told him exactly the same story about the microwave. When I tell that, this is my microwave, right?This is personal. This has happened to me. And so he told me, the investor called me up later, he said, "He told me exactly the same story." So that was really funny.

**Uri Levine** (00:52:44):
But at the end of the day, one of the things that makes story authentic is details, because otherwise it's not, right? If you're going to tell me, okay, this is the use case of the product and you end up with explaining a use case in three lines, this is not authentic. If you watch your real users, then what happens is that you actually, and you speak with them, then you have the audacity to tell a good story. Really, really critical. If you want to tell user story, these needs to be, real or you have to learn how to tell a story with many details.

**Lenny Rachitsky** (00:53:29):
But interestingly, it sounds like the story itself doesn't have to have happened to you in real life. It could be a made-up story, but with a lot of details is the lesson there. Interesting.

**Uri Levine** (00:53:38):
Yep. If you tell it very briefly, then it doesn't sound right.

**Lenny Rachitsky** (00:53:46):
Amazing. Any other advice along those lines? I want to talk about two more chapters before we wrap up. Is there anything else around fundraising that you think is important for people to know?

**Uri Levine** (00:53:54):
So I will tell you which chapters I would like to speak about.

**Lenny Rachitsky** (00:53:57):
Let's do it. I wonder what they are. I wonder if they're the same.

**Uri Levine** (00:54:02):
Understanding users and firing and hiring.

**Lenny Rachitsky** (00:54:04):
Okay, firing and hiring. That was on my list. Okay. Let's start there and then understanding users wasn't, but I'm excited to hear what you have to say there.

**Uri Levine** (00:54:14):
So I send the book proposal to many publisher, and there is one chapter that says firing and hiring, and many of them came back and say, "Oh, it should be hiring and firing." And I said, "No. Firing is hard decision. Hiring is easy decisions." You have to first of all learn how to make the hard decisions. Now, the inspirations for this chapter came from many dialogues that I had with entrepreneurs that their startup failed, and I asked them, "Why, what happened?" And about half told me the team was not right, and I kept on asking, "Okay, what do you mean the team was not right?" And what I heard the most is, "We had this guy not good enough and this guy not good enough." So this is what I heard the most.

**Uri Levine** (00:54:58):
Another thing that I heard quite often is that we had communication issues, right? Something that I actually called ego management issues. And then asked them the most interesting question, "When did you know that the team is not right?" Now the answer was actually rather scary. All of them told me within the first month. Then you said, "Wait a minute. If you knew within the first month that the team is not right and you didn't do anything, the problem was not that the team was not right. The problem was that the CEO did not make hard decision." Making hard decisions is hard. Making easy decisions. This is why no one likes to make the hard decisions, because you need to live with the consequences. In a small place like a startup, the hard decisions will always go to the top. Now, if the CEO does not make that hard decisions, the result is always the same. The top performing people would leave. Now, they would leave because they don't want to be in a place that is unable to make hard decisions and they have a choice.

**Uri Levine** (00:56:02):
The nature of the beast is different. Startup is a small organization. Just imagine that you are a small organization, like could be a team, whatever it is, right? 10, 20, 30 people, and there is someone that shouldn't be there, and I don't care if that someone shouldn't be there because they are way underperforming or because they are assholes. I don't really care. They shouldn't be there. Everyone knows. Everyone knows and the CEO doesn't do anything. That's the nature of the beast and this is why top performing people would leave. Now, building a startup is really, really hard, right? It's hard if you have the right team, but if you have people that shouldn't be there that are still there and the top performing people are leaving, then it's going to be mission impossible. The conclusion of this chapter is really, really interesting. If everyone knows within a month and every time that you hire someone new, what I really want you to do is mark your calendars for 30 days down the road and ask yourself one question, "Knowing what I know today, would I hire this person?"

**Uri Levine** (00:57:16):
At the end of the day, I'd like to nail that into yes or no, right? Because this is where decisions are being made easily. If you ask yourself that question, if the answer is yes, then go to this person and tell them that you are really excited that they've joined, they are exceeding your expectations, and give them more equity, and you buy their loyalty for life. If the answer is no, fire them immediately. They're already set on a trajectory of not being successful and they're creating damage to you, to the rest of the team and to themselves, right? They deserve to be successful, but it's not going to happen here. They deserve to find someplace else that they can be successful, but it's not going to happen here, and that decision is really, really dramatic.

**Uri Levine** (00:58:08):
Now, in many cases with hard decisions, we know what is the right decisions. We are looking for confirmation. If you look for confirmation, then go and speak with the top performing people and tell them, ask them the following, right? "Assuming XYZ person is going to leave, how sore are you going to feel?" And you will be surprised that they are going to tell you, "Oh, it's not a big deal." This is your confirmation.

**Lenny Rachitsky** (00:58:40):
Yeah. We had Elizabeth Stone from Netflix, the CTO of Netflix on, and she talked about this thing they called a keeper test, which is exactly that, where every manager is always asking themselves, "If this person were to leave tomorrow and tell me they're leaving, would I fight to keep them? And if not, I should just, I need to let them go," and that's always top of mind for managers there.

**Uri Levine** (00:58:59):
You know, one of my companies had a pretty good year and they decided to have an annual bonuses by and large to nearly all of the employees. And then I asked the CEO, "So how did you end up with the list?" And he said, "Okay. We had these people that getting twice as much the others, and then the others, and then there are four people that are not going to get anything." And I asked them, "Are they still here?" They shouldn't be here, right? If they are so much underperforming, then they shouldn't be here. But generally you need the time to ask yourself the tough questions because only then you can answer them, right? If you don't ask the tough questions, then you don't answer them.

**Lenny Rachitsky** (00:59:49):
Yeah. I really love this very tactical piece of advice, which I was definitely going to touch on, of putting a calendar entry into your calendar when you hire someone 30 days in to remind yourself, asking yourself, "Would I hire this person knowing what I know now? And if not, you should probably let them go."

**Uri Levine** (01:00:06):
By the way, I can tell you that for everything in your life, right? Everything in your life, ask yourself, "Knowing what you know today, would you do something different?"

**Lenny Rachitsky** (01:00:16):
Wow.

**Uri Levine** (01:00:17):
If the answer is yes, then do something different today. Today is the first day of the rest of your life.

**Lenny Rachitsky** (01:00:23):
That is powerful advice. So what I'm thinking there is if I bought something, maybe return it. What else have you applied that to in your life?

**Uri Levine** (01:00:31):
Relationship in general. Directions that you're going, right? Do you still like that? I have five children and they're all in their twenties and beginning of thirties and they struggle with their career path, and I basically tell them, "Look, if you are going to work in a place and you don't like it, then what I want you to do is ask yourself why you are not liking it and whether or not there is something that you can change, and I'm going to ask you the same question in 90 days from now, and if this still is the case, then quit."

**Lenny Rachitsky** (01:01:14):
It's interestingly you make that 90 days, which it kind of applies some decisions. You need to wait a little bit more. You need more data. You need more time than necessarily 30 days, but set some kind of timeline.

**Uri Levine** (01:01:24):
If you don't set a timeline, it'll never happen.

**Lenny Rachitsky** (01:01:28):
I think the other really interesting implication here is most decisions are a two-way door. Most decisions, you can change your mind. You can quit. You can leave a relationship. I was thinking you were going to say with your five kids 30 days after they're born, "Do I still want this kid 30 days with knowing what I know now?" I'm glad you didn't go there.

**Uri Levine** (01:01:52):
No, this is different, right? You go into this journey of having children with the understanding that this is long journey. Go into this journey of building a startup with the understanding that this is a long journey, right? The fact that it's going to be hard? Okay, so it's hard. It is hard, by the way. But yeah, the decisions that obviously they need to be relative to their duration, right? So yeah, raising kids is a long journey.

**Lenny Rachitsky** (01:02:29):
And a one-way door, also. Is there anything else you wanted to say around the hiring and firing concept? Clearly firing is the main lesson here, is get really good at firing, firing quickly and decisively.

**Uri Levine** (01:02:41):
You know, there are tons of advices in the book and eventually I will tell, even in the hiring process, right, most of us are going to interview candidates and then decide that they like or dislike the candidate, but they don't know. Then speak with someone that does know. Speak with the reference.

**Lenny Rachitsky** (01:03:02):
Do you have a favorite question you like to ask references? Is there something that you find is really helpful to tell you? Give you honest insight?

**Uri Levine** (01:03:09):
For reference?

**Lenny Rachitsky** (01:03:10):
Yeah.

**Uri Levine** (01:03:11):
That's really simple. Would you hire him? Or would you hire her, right? So essentially at the end of the day you want to nail it into yes or no.

**Lenny Rachitsky** (01:03:26):
Yeah. And hope that they're being honest. That's sometimes a challenge.

**Uri Levine** (01:03:31):
No, if they will tell me yes, then I would ask them, "Why didn't you?" Someone asked me for a reference on someone that I really enjoyed working with. I really think highly of them, and he asked me if they can schedule a call for half an hour and I said, "Look, I'm traveling. I don't really have time. But if you want an email in one word, take the guy." And then he was trying to outsmart and ask me back, "Can I have that in two words?" And I said, "Yeah, take the guy fast." When you know, you know. That's it.

**Lenny Rachitsky** (01:04:07):
I like that. That's what you want to be looking for. Okay. Amazing. So let's do one more chapter. The one I was going to pick, you choose what you're more excited about, is selling a company. Your last chapter exit. The one you were thinking about going to is talking to users. I imagine that's much more applicable to more people, so that's probably the better choice, but your choice.

**Uri Levine** (01:04:28):
Okay, then let's stick with understanding users. Steve Wozniak, co-founder of Apple, wrote the foreword to my book and he called it the Bible for entrepreneurs, and when I sent him the first chapter, he said, "Wow, I wish I had that When I started." I met Steve Wozniak for the first time about 10 years ago. We spoke at the same conference in Guatemala, and look, when I grew up, Steve Wozniak was my technological guru, right so he was the most important person in the technology space in my mind. And then we spoke at the same conference and we had dinner the night before, and the only thing that actually was really important for me is to have a selfie with my idol, right? And so I took up my iPhone and with the iPhone you can take pictures by clicking here on the screen or using the volume button on the side, right?

**Uri Levine** (01:05:34):
And so I took a selfie with him holding the phone like that and clicking on the volume button and he said, "Finally." And I said, "Finally what?" "Finally someone using it the way that I meant it to be." Now you realize that there is no right or wrong. There are different people that are using different products in different ways, and occasionally if I would have large audience, then I would ask the people, "Okay, how do you use Waze?" Right? "So you go to your destination and you enter destination, and then Waze guides you through the screen with the display of the maneuvers that needs to be made or with the audio guidance of turn right, turn left and so forth. If you are watching the screen, raise your hand." And then I would have about 70% of the people raise their hand." Then I ask people to watch around them and see those people. Then I ask, "If you are listening to the audio prompt, raise your hand." Then I have about 20 or 30 more percent of the people raising their hand. And again, I send people to watch around and see those hands.

**Uri Levine** (01:06:41):
There is no right or wrong. Different people are using it differently. Now, if you are using Waze in a certain way, up until this moment, you didn't know that there are other people that are using it differently, and to be frank, you don't care. You getting your own value the way that you get it, then you don't really care that there are other people that are getting it differently. But if you are building a product and you don't know that, then you are building the wrong product. You don't know that there are other people that are not like you, and you think that you're building the product for yourself, then you're making a big mistake. And the way to figure it out is, by the way, two things. Number one, watch new users. Simply watch users and see what they're doing. And number two, if they're not doing what you expect them to do, then ask them why, because this why is the one that is going to make your product successful. You understand the why and the next version you're going to address that.

**Uri Levine** (01:07:42):
Now, this is in particular when it comes to understanding users. Obviously there are a lot of users, but we can group them into several groups of their ability to adapt something new, and something new is not necessarily new technology. We think about it as a new technology, but it's not necessarily about technology. It's about new behavior, right? And then we look at the entire population and every time that we look into large numbers, they will have normal distribution, right? So the bell curve of the distribution, and then we will have about 2% of the populations that they're the innovatives. The innovatives are going to use something new because it's new. That's it. They care about this subject and they going to be the first one to hear about it and they're going to try that out because it's new. The second group is usually what we will get to see as the first users are the early adapters. As soon as they realize that there is value, they're going to give it a try. And if there is value, then they will keep on using it, and if there is no value, then they will quit. Right?

**Uri Levine** (01:08:55):
The third group is the most important group. This is where market leaders are, right? This is called the early majority. This is about one third of the population, and the one that wins the early majority wins the market. The challenge with this group, with the people in this group, is that they're afraid of change. So their state of mind is, don't rock the boat. Whatever I'm currently doing is good enough for me. So if you have Salesforce.com, which is absolutely amazing, their reaction is going to be, "What's wrong with Excel?" And because they're afraid of change, they are not going to try something new. Now the reason is that at the end of the day, they're afraid that this is going to be too complex for them and they will not get it, and they don't want to be embarrassed and they don't want to feel like idiots. And guess what? People don't like to feel like idiots, and so they are not going to try. And you need to see those people to understand their barriers for starting to use your service.

And by the way, the solution is always the same. Simplicity. Leonardo da Vinci said that simplicity is the ultimate sophistication. If you want to make it simple, in your journey of building a product, we basically say this is iteration to iteration to iteration. In many of those you add features and you add features and you add features until you all of a sudden you add the features that people are using. What you really want to do next is remove the rest of the features that people are not using because they're adding complexity. Now, most of the product owners, they're either innovators or early adopters. You cannot understand an early majority person. If you belong to one group, you cannot understand a person from that group unless you watch them and [inaudible 01:10:57]. So the most important part of understanding users is actually seeing those users. And they are not wrong. This is how they behave.

**Lenny Rachitsky** (01:11:09):
So a couple of threads there I'll pull out. One is look for surprising uses of your product because, as you said, you'll realize, "Oh, some people are using this in a way that I didn't expect," and it'll remind you people are not the way you are and don't assume that they're going to want exactly what you're building, so pay attention to things that surprise you. We had Jeffrey Moore on the podcast and he talked through a lot of this stuff, and one of the lessons there to help you bridge that gap from, to the, what is it, the third group? How did you describe it? The late majority?

**Uri Levine** (01:11:42):
The early majority.

**Lenny Rachitsky** (01:11:42):
The early majority.

**Uri Levine** (01:11:44):
Late majority will never use the product. They will use your product only if they have to.

**Lenny Rachitsky** (01:11:45):
Yeah. The laggards, I think he calls it. They look for basically references. People telling them, "Hey, you really need to use this." A lot of people, just like basically word-of-mouth is the way you described it.

**Uri Levine** (01:11:58):
No, not just word-of-mouth. Even occasionally someone to show them how to use it.

**Lenny Rachitsky** (01:12:03):
Yeah. That makes sense. Just like, "Here, check out Waze. Here's how it works." Yeah, that makes a lot of sense. Okay. Amazing. Is there anything else along those lines as you're talking to customers and understanding what you're looking for that you want to share?

**Uri Levine** (01:12:17):
Occasionally what happens is that we speak with the wrong customers. So just imagine that we have what I call funnel of use, right? So on top of the funnel, we have people that are download the app, let's say, or have entered their website, and then the next phase is that they registered and the next phase that they're trying to use it for the first time and then the next phase is that they're getting the value and they're coming back, right? In this funnel, what we usually try to do is speak with the users at the bottom of the funnels, those that were successful. But in order to improve, we need to speak with those that fail, those that were unsuccessful, those that did not register, or they did register and did not use, or they did use and did not come back, because they know something that we really need to know. Why? This why is what makes a great product.

**Lenny Rachitsky** (01:13:19):
Interesting. I imagine you could also fall into danger there if people that just aren't a fit for your product, there's just no point wasting your time on people that are just not going to be a fit. So is the idea there find people that are really far down the funnel but still bounced and churned?

**Uri Levine** (01:13:34):
Yep.

**Lenny Rachitsky** (01:13:34):
Awesome. Amazing. Okay. So we've gone through all the chapters I was hoping to go through, plus the ones you were excited about. Final thing before we get to our very exciting lightning round, we have a segment on this podcast called Fail Corner, where I ask a guest to share a time they failed in their career and what they learned from that experience, and I'm curious if there is a story that comes to mind of a time that you failed either in a startup or as you were an employee somewhere and how that was important to you.

**Uri Levine** (01:14:05):
So number one, I reserve the right for my biggest failure yet to come. And look, I keep on trying new things. I keep on doing things, and so eventually I will fail as much as... Maybe I'm more successful statistically than others, but I will fail, and this is very, very important part to realize. Don't be afraid to fail, right? In your journey, you're going to fail multiple times, and when you fail and get up, you get up stronger. This is maybe something that I will tell all the parents in the world. The biggest advice that I can give you is teach your children to fail. Because when they get up, they get up stronger, and when they know that they will get out of their comfort zone and they will eventually discover what makes them happy. At the end of the day, as parents, there's only one thing that we really like. We want our kids to be happy in their own way. We don't know what it is. They don't know what it is. We want them to explore, and they will only explore if they are not afraid to fail.

**Lenny Rachitsky** (01:15:18):
Yeah. This is a very timely advice for me because our kid is always falling down and it's always this balance between helping them not fall and letting them figure things out.

**Uri Levine** (01:15:27):
Let them fall. There is a Japanese saying, fall seven times and get up eight.

**Lenny Rachitsky** (01:15:36):
Uri, is there anything else that you wanted to share or leave listeners with before we get to our very exciting lightning round?

**Uri Levine** (01:15:43):
No, I think that was actually, I really enjoyed it.

**Lenny Rachitsky** (01:15:45):
Amazing. Well, we're not done yet. We've reached our very exciting lightning round. Are you ready?

**Uri Levine** (01:15:50):
Yep.

**Lenny Rachitsky** (01:15:51):
All right. First question, what are two or three books that you recommended most to other people other than your own book?

**Uri Levine** (01:15:58):
Mark Randolph of Netflix. That Will Never Work, right? And by the way, it's funny. Mark Randolph wrote endorsement to my book and I reached out to him because I read someplace that he's answering all of his emails, and I reached, I sent him an email and said, "Look, we have at least three things in common. Number one, I do answer all of my emails as well. Number two, I'm using your product, you are using mine. And number three, I heard more time that will never work than you did." And I think that understanding this journey is really, really important, so this is definitely a book that I would recommend. Atomic Habits. Getting habits and improving them, measuring and improving, is really, really important.

**Lenny Rachitsky** (01:16:55):
Very cool choices. Do you have a favorite recent movie or TV show that you've really enjoyed?

**Uri Levine** (01:17:02):
I don't watch a lot.

**Lenny Rachitsky** (01:17:05):
Easy, then. Do you have a favorite product that you've recently discovered that you really love?

**Uri Levine** (01:17:11):
So I can bet that most of the people say the ChatGPT, but actually no. I recently downloaded the Chess App and I returned to play chess with the computer or something that I haven't done for so many years, and I really enjoy that.

**Lenny Rachitsky** (01:17:30):
Amazing. It's actually, I don't think ChatGPT has ever been recommended. Recent choices have been a beautiful Persian rug, a Rivian, a very nice Mercedes, and I think recently it was a course on nervous system regulation.

**Uri Levine** (01:17:48):
Cool.

**Lenny Rachitsky** (01:17:49):
All over the place. Two final questions. Do you have a favorite life motto that you find really useful in work, your own life? It may be the one on your shirt, but is there any other that you come back to often and find useful?

**Uri Levine** (01:18:03):
Don't be afraid to fail. I think that in many cases we need to accept the fact that we don't know.

**Lenny Rachitsky** (01:18:10):
Important words. Final question, is there a problem you're starting to fall in love with more recently, maybe tinkering with a new startup idea? Or are you done with starting companies?

**Uri Levine** (01:18:21):
I probably will never be done. I have 10 different startups in multiple areas. One of them, Pontera helps people to retire richer, which is one of the biggest challenges in the world in general, but also in the U.S. If I would ask a hundred people on the street that have 401k plans, "What is your 401k plan invested at?" 95% of them will tell me, "I don't know." I do know, by the way. In the default. Whatever was the default when they joined, right? Now obviously if you didn't do anything and you think it's right, no, it's not right. It's probably simply not enough. So this is a big problem. I have one in the medical space that is trying to create, I would call that the AI of the medical knowledge, so trying to improve doctors, and in particular in clinical decisions. That is going to change the world.

**Uri Levine** (01:19:27):
But if you would ask me, then I will give you some examples, right? So mobility is still a problem, right? You look at many areas in our lifetime and mobility is still, every year it's, instead of getting better, it's getting lesser. So mobility is still a problem. And medical services, right? U.S. medical services are five to 10 times more expensive than they are in Germany. Now, it's not that they're better. They're simply more expensive. So obviously you ask yourself, "Okay, where is this inefficiency? Where is it?" Right? A lot of places of inefficiency in the medical services if they're so expensive. Education. Okay. Anything that I will tell you that we are still doing the same way that our parents did is probably something that we need to revisit.

**Lenny Rachitsky** (01:20:22):
I feel like I nerd sniped you with falling in love with problems. Clearly fall in love with a lot of problems. You want to solve them all. You're addicted to startups.

**Uri Levine** (01:20:29):
The good news is that there are a lot of problems and the bad news that there are lots of problems.

**Lenny Rachitsky** (01:20:34):
And you're there to solve it. I love it. Uri, your book is amazing. It's incredibly practical, full of tons of advice that every founder should read, and it goes from idea all the way to exit. So basically, no matter where you're on the journey, the book is going to be useful to you. Tell people where to find it and where they can follow you for more stuff that you share over time, and then how can listeners be useful to you?

**Uri Levine** (01:20:56):
So obviously this is the book. Amazon, Barnes & Noble, basically places that you can find it. You can follow me on LinkedIn. This is pretty much the only network that I'm actually engaged. If you read the book, then you will find my email in the book and then you can email me, as well. And I do answer all of my emails. I want you to read the book. I don't want you to buy the book. I want you to read the book. And the reason is that I have a purpose in life and this is creating value, and I believe that this book is going to be the best return on investment that you ever made. Not the $20 or $30 that it costs, but the time that you're going to spend on reading it, and therefore, I can be valuable for you, and if I can be valuable for you, then I serve my purpose.

**Lenny Rachitsky** (01:21:53):
Amazing. If you weren't on YouTube watching this, the book is called Fall in Love with the Problem, Not the Solution, if you're trying to Google it and find that on Amazon. And Uri, thank you so much for being here.

**Uri Levine** (01:22:05):
Thank you.

**Lenny Rachitsky** (01:22:06):
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.

---

## [17/21] The paths to power: How to grow your influence and advance your career | Jeffrey Pfeffer (author of 7 Rules of Power, professor at Stanford GSB)

**Lenny Rachitsky** (00:00:00):
We're going to be talking about how to grow your power.

**Jeffrey Pfeffer** (00:00:02):
The reason why you should pay attention to this is because it leads to a lot of good things, salary, getting promoted, being happy in your career, being less stressed.

**Lenny Rachitsky** (00:00:11):
You're not describing how the world should work. This is just how it is.

**Jeffrey Pfeffer** (00:00:15):
Not only is, but how it was and how it will be.

**Lenny Rachitsky** (00:00:20):
The Seven Rules of Power, get out of your own way, break the rules, show up in a powerful fashion, create a powerful brand, network relentlessly, use your power, and understand that once you've acquired power, what you did to get there will be forgiven, forgotten, or both.

**Jeffrey Pfeffer** (00:00:32):
This is not about personality. These are skills they can be mastered.

**Lenny Rachitsky** (00:00:35):
People might be hearing this and they're like, "I don't want to be this person."

**Jeffrey Pfeffer** (00:00:38):
Well, you already have done a fabulous job of illustrating principle one. That is one way to get in our own way. If I think power is dirty, the first thing that's going to happen is I'm not going to do what I need to do to be successful in my career.

**Lenny Rachitsky** (00:00:52):
The opening quote to your book that I have here, if you want power to be used for good, more good people need to have power.

**Jeffrey Pfeffer** (00:00:58):
That's exactly right.

**Lenny Rachitsky** (00:01:03):
Today, my guest is Jeffrey Pfeffer. Jeffrey is a Professor of Organizational Behavior at Stanford's graduate School of Business, and teaches one of the two most popular and oversubscribed courses in all of the MBA program, called the Paths to Power. The other class, by the way, is Touchy-Feely, which we dove into last month. In his class and in his recent book, the Seven Rules of Power, Jeffrey teaches the things that you can do in your life and in your work to build your power, and through that get things done and advance in your career. As one student described the class, it's the cod liver oil of the Graduate School of Business. You know it's good for you, but you feel a little nervous about it. In our conversation, we dig into each of the seven powers, why it's important to build these skills even if you feel uncomfortable.

**Jeffrey Pfeffer** (00:02:36):
Thank you, Lenny. I am honored that you invited me on.

**Lenny Rachitsky** (00:02:40):
I'm even more honored that you decided to come on. We're going to be talking about something that makes a lot of people uncomfortable. I think it's going to make me uncomfortable. We're going to be talking about how to grow your power in life and in business. Let me just start by asking why does this stuff make people uncomfortable, and why is it still important for people to learn how to do this well?

**Jeffrey Pfeffer** (00:03:02):
Well, it's important because a guy named Gerald Ferris developed a scale of political skill. And he and a bunch of his colleagues over the years did a lot of empirical research that demonstrates that political skill is associated with a lot of positive outcomes, salary, getting promoted, being happy in your career, being happy in your job, being less stressed. So the reason why you should pay attention to this is because it leads to a lot of good things. The reason why it makes people uncomfortable. You said it made you uncomfortable. Maybe I should ask you the question, why does it make you uncomfortable?

**Lenny Rachitsky** (00:03:44):
There's a lot of things here that are probably not how people want to live their life necessarily, or want other people to act.

**Jeffrey Pfeffer** (00:03:51):
Yeah, so I think it makes people uncomfortable because the realities of what it takes to get power bear almost no resemblance to what you're taught in Sunday school or the mosque or wherever, how your parents raised you. They bear almost no resemblance to how we think the world ought to be. They bear a little resemblance to our aspirations. And I think we look around the world and we see people who have acquired enormous amounts of power and have used it for bad. But I tell people, I see people with hammers hitting other people on the head. That does not mean that a hammer is not a useful tool. You can take a screwdriver and stab it into somebody's belly. I have a very dear friend who we'll probably talk about later in the podcast. Laura Esserman is a breast cancer surgeon, and I tell people, Laura has a knife. She uses it to cure cancer. Muggers have knives. They use it to rob people. So I think we've confused the tool for how it has been used.

**Lenny Rachitsky** (00:04:56):
You also have this quote that the people who need to understand power and build their power skills are people who come from backgrounds or characteristics who would normally put them at a disadvantage.

**Jeffrey Pfeffer** (00:05:04):
I think that's exactly right. I will go this Sunday to Nashville Tennessee to talk to a bunch of people of color in the NFL who are trying to rise up the ranks. Stanford runs a program because the NFL is serious, I think, about trying to make more opportunity for people, underrepresented minorities. But these are folks who will not succeed unless they learn power skills, because the world is stacked against them in lots of ways.

**Lenny Rachitsky** (00:05:41):
**Jeffrey Pfeffer** (00:08:07):
The class is extremely popular. I have a long waiting list. It's kind of mythical. And because of the principle of social influence, we are influenced by what other people do. We're influenced in our choices of restaurants, we're influenced in our choices of music. I'm not sure I like Taylor Swift, but I certainly want to go see Taylor Swift because everybody else is. And many people sign up for the class. And one year in particular, there were some people who sat in about the third row up, directly in front of me, and they looked every day like they were having some terrible thing put up some horrible orifice or something. They looked literally in pain, and so I decided, and of course they learned nothing. If you come to the class and you're in that much psychological discomfort, you're not going to learn anything.

**Jeffrey Pfeffer** (00:08:55):
And so what I try to do is tell people that in order to benefit from this class, you have to be open to learning the material. And if you're not, and by the way, this would be true for any class. If you go to physics and you say, I don't like physics, I hate physics, I don't believe in physics, I don't believe in the theory of physics, whatever, you're not going to learn anything. And so I'm trying to get the class, given those huge waiting lists, I'm trying to get the class to have people in it who are in fact going to benefit from it rather than sit there and look like they're in pain. And the judgmental thing, if Matthew 7, "Judge not that ye be not judged." The Koran says, "Only Allah can judge people." The American poet, Walt Whitman said, "Be curious, not judgmental."

**Jeffrey Pfeffer** (00:09:46):
Mother Teresa said, "If you judge people, you have no time to love them." Judgment, if I need to build a positive relationship with Lenny because you are on my critical path in my job, and jobs necessarily entail a reasonable amount of interdependence, I get things done through and with other people. If I decide that Lenny is whatever set of bad adjectives you want to use, dumb, incompetent, immoral, whatever, my ability to build a positive relationship with you, and you remain on my critical path, becomes almost zero unless you're a better actor or I'm a better actor than I think most people are.

**Jeffrey Pfeffer** (00:10:32):
So therefore, you should suspend judgment in the sense that if somebody is on your critical path, the only judgment you should make is they're on my critical path. If I want to get something done, I need their collaboration and cooperation, and the fact that I may not like them is in fact irrelevant. And as I have taught senior executives over the years, it is absolutely clear to me that one of the skills that they have mastered is they have a skill that you cannot tell what they think of you. And that's important because I need your collaboration, I need your cooperation. And if I leak out in ways that say I don't respect you or I don't like you, I don't admire you, whatever, my odds of getting you to work productively with me goes essentially to zero. So that's a judgmental story. Does that make sense?

**Lenny Rachitsky** (00:11:21):
Absolutely. And I have a quote from your syllabus along these lines, "Not everyone we encounter in Paths to Power is someone you're going to want to emulate. This is a class about how to get things done, how to build and wield influence, and there are multiple ways to accomplish these objectives." So I've had two friends actually go through the course. One I asked about the course of the impact it had on her. She's actually a founder now. And she told me that your class was her single most favorite class at all of Stanford Business School, because it was realistic and applicable to life as a founder. Because it didn't sugarcoat business, didn't sugarcoat life. It told her how the world really works and it is helping her succeed with her startup right now.

**Jeffrey Pfeffer** (00:12:00):
Thank you. There's no higher praise than that. I actually don't read, I shouldn't probably say this on the public, but I don't actually read my course evaluations because the impact I want to have is not to have people like me, but to have that kind of impact. To make people more successful, more effective in their lives.

**Lenny Rachitsky** (00:12:22):
That is a good segue to one of your rules of power. So let's just talk about your Seven Rules of Power. I actually have your book right here and if folks want to learn more, here it is, Seven Rules of Power. This is your fourth book about power, and this is your best book about power, because it basically summarizes everything you've learned in a really cohesive way. So let me first share the Seven Rules of Power and then I'm going to dive into a few of them. Does that sound good?

**Jeffrey Pfeffer** (00:12:44):
That sounds perfect.

**Lenny Rachitsky** (00:12:45):
Okay, so the seven rules, one, get out of your own way. Two, break the rules. Three, appear powerful. Four, build a powerful brand. Network relentlessly. Use your power, and success excuses almost...

**Jeffrey Pfeffer** (00:13:01):
Everything, correct.

**Lenny Rachitsky** (00:13:02):
Okay, success excuses everything almost. Got it. Okay. So let me start with power four, which is around personal brand. And the reason I want to start here is I have a friend that's actually in your class right now, Ralph, and I saw that he started a podcast. And he told me that he did it because it was part of the homework that you give students. You call it Doing Power. Is that the name of the homework assignments?

**Jeffrey Pfeffer** (00:13:25):
Yeah, I have. So we give them a bunch of assignments throughout the class, which are self-reflective assignments, but their big thing for the class is they have to do power. They have to do something during the quarter to take the principles of the class, and what they're learning, and put them into practice. And that is because everything I do, I do for a reason. That is because if you don't use what you learn, the learning will disappear. So if you go to a French class and you learn French, and you never speak French, in about a relatively short period of time you'll forget everything you learn. And so I want the learning to stick with them, so I try to get them to do something with it.

**Lenny Rachitsky** (00:14:06):
While we're on this tangent, I wanted to talk about this whole, you have a book, the Doing Knowing Gap.

**Jeffrey Pfeffer** (00:14:10):
Knowing-Doing Gap.

**Lenny Rachitsky** (00:14:11):
The Knowing-Doing Gap. So let's just spend a little time there. I think that's really important. What are some examples of things that have come out of people doing these homework assignments, things that maybe led to something interesting?

**Jeffrey Pfeffer** (00:14:22):
Let me take my most extreme example. My most extreme example is probably Derek Kan, K-A-N. And Derek Kan was a little bit older when he went through the MBA program. And in 2012, his Doing Power project was to get appointed to be Mitt Romney's, it was Mitt Romney was running for president, to be head of economic policy for the Romney campaign. Believe it or not, he was offered the job. Believe it or not, he turned it down for reasons which we could go into if you want, but aren't that interesting. He wound up relatively soon thereafter as number three in the transportation department, working for Elaine Chao. And I have a picture of him when he comes to the class, I introduce him. I tell students, I give them a trigger warning and I introduce him. He wound up, at the end of the Trump administration, as the deputy director of the Office of Management and Budget. And since typical of the Trump administration, by that time there was no director. He essentially ran the $6 trillion US budget. This is six years out of business school.

**Lenny Rachitsky** (00:15:35):
I was thinking whether he got that during his class. Amazing. Okay, so this is a success story of Doing Power. Let's talk about this first power of building brand, and I think this is where people start to feel uncomfortable. They're going to be like, oh no, I don't want to be doing this. This doesn't feel good to me.

**Jeffrey Pfeffer** (00:15:51):
Why?

**Lenny Rachitsky** (00:15:52):
So let's talk about it.

**Jeffrey Pfeffer** (00:15:53):
Okay.

**Lenny Rachitsky** (00:15:54):
Let's see. So talk about this power of building a personal brand.

**Jeffrey Pfeffer** (00:15:58):
There are by definition fewer positions at the top than at the bottom. The world, we might not like this, and I know people, the late Tony Hsieh, the Zappos tried to do holacracy or whatever, but the world is essentially hierarchical. The animal kingdom is hierarchical. It is better to be at the top than at the bottom for a number of reasons. Okay. If that is true, if there are fewer positions at the top and then at the bottom, then your job to advance your career is to figure out how to get promoted. There are many ways to get promoted, but I will guarantee you one thing, no one is going to promote Lenny if they don't know who the hell you are. So it is not sufficient for them to know who you are. They have to know that you're smart and personable and have whatever skills you've got, but they have to know you.

**Jeffrey Pfeffer** (00:16:52):
If they don't know you, you cannot choose what is not in your head. You know that better than I do. So therefore you have to do something to differentiate yourself. You have to build a brand. So when I think of Lenny in your podcast, I think of something. Not just 25 billion podcasts. When I think of somebody in McKinsey or Bay or BCG, one of the consulting firms, a gazillion people start off as front-line consultants. What are you going to do so that somebody knows who you are? What are you going to do that creates value for the firm and for you? So my friend Keith Ferazzi, when he started at Deloitte Consulting, did not do the spreadsheet stuff that he was, by the way, not very good at and didn't like. He started the Lincoln Quality Award. He decided to try to take Deloitte's brand recognition from about one or 2% to 30%.

**Jeffrey Pfeffer** (00:17:54):
He was appointed, though he left before he actually took the job, to the position of partner and the first chief marketing officer at Deloitte. I have another friend, Tristan Walker, who wanted to get hired at Foursquare. He sent emails to the founder. The founder ignored him. So Tristan Walker did something I think very bold. Tristan Walker began signing up partnerships. So one day the founder says, holy God, he signed up Starbucks. Maybe I ought to hire this guy. So you have to do something that causes people to know who you are, and that is what building a brand is about.

**Lenny Rachitsky** (00:18:36):
It sounds very benign put that way. When people hear, I need to build a personal brand, it sounds like I need to post on LinkedIn, I need to post on Twitter, start a newsletter, start a podcast, which I know is kind of a part of it. But what are some examples you've seen of ways to build a personal brand that are effective?

**Jeffrey Pfeffer** (00:18:50):
So I have a friend who I bring to the class, a lovely tall Asian woman named Laura Chau, who made partner at a venture capital firm after four years, which is fast. Laura works for Canaan Partners, C-A-N-A-A-N. Laura said, I do not work for Andreessen Horowitz, I do not work for Sequoia, I don't work for Greylock, I don't work for any of these very visible large VC firms. So if I am going to get deals in the consumer space, that's her domain of expertise is consumer and consumer tech, somebody is going to have to know who Laura Chau is. Because again, you're not going to get the deal if nobody knows who you are. And so she basically did everything you talked about. She did writing. She started a podcast in which she invited influential people on. She contributed to a book. She helped people out.

**Jeffrey Pfeffer** (00:19:55):
She did networking dinners. She did everything she could so that people would recognize and know Laura Chau. And one of the things she did was she's tall. In general, Asian women are not tall. She decided to play up the fact that she was, in the words of some people, the tallest Asian woman they'd ever seen. She wears heels. In her heels she's six feet one inches tall. She also, when she comes to my class, many people come to my class with hoodies, God knows what. She has style and it's a unique style. So she thinks about very strategically, how am I going to dress? How am I going to look? How am I going to show up? How am I going to do what I need to do so that people know who I am? Obviously there's substance. If you have visibility without substance, people will know you're useless. But if you have substance without visibility, no one will know the substance that you got.

**Lenny Rachitsky** (00:20:56):
You also talk about how you can reframe this idea of not being self-promotional, but it's amplifying the impact of the team that I work with, or it's me scaling myself by sharing things I know and pointing people to it.

**Jeffrey Pfeffer** (00:21:11):
Absolutely, absolutely.

**Lenny Rachitsky** (00:21:11):
Awesome. Okay, let's move on to a different power. Let's talk about power one, which is getting out of your own way. Talk about what that means and how someone can work on that.

**Jeffrey Pfeffer** (00:21:20):
Well, you already have done a fabulous job of illustrating principle one by talking about how this is the topic that makes people uncomfortable. And when something makes people uncomfortable, in general, they're going to shy away from it. So if I think power is dirty, if I think power is evil, if I think power is something I want nothing to do with, the first thing that's going to happen is I'm not going to do what I need to do to be successful in my career. So that is one way in which we get in our own way. Another way in which we get in our own way, many people suffer from what is called in the psychology literature, imposter syndrome. They believe that they were the admissions mistake at Stanford. They were the hiring mistake in whatever company they're working for. That somehow they got to this job, but they don't really deserve to be there because they're surrounded by people who are smarter and better than them, and therefore they will do things.

**Jeffrey Pfeffer** (00:22:18):
I can't even believe that this goes on. So I will have students, not many, but a few. Now raise their hand, I'll call them, and the first things out of their mouth will be, I don't know if this comment is going to be useful. This is called pre-emptory apology. If the comment is not going to be useful, don't say it. That's number one, but number two, don't apologize. Pardon me for interrupting. Pardon me for taking up your time. Stop all this apologizing. If you got the job you're in, you probably are not only qualified, you're probably overqualified. So don't use descriptors of yourself that disempower you. Don't think of yourself as not deserving of the job that you hold, because that attitude will leak out and other people will say, if Lenny doesn't think he deserved the job, then maybe I shouldn't think he deserves the job either.

**Lenny Rachitsky** (00:23:19):
So basically the first power is you're shooting yourself in the foot by worrying too much about whether people like you. This friend of mine who's now the founder that I read some quotes from, she said her number one takeaway from your class is if you want to be liked, get a dog.

**Jeffrey Pfeffer** (00:23:32):
That's correct. That is a quote from my dear friend Gary Loveman, who for many years ran Harrah's, which then became Caesars, the casino company.

**Lenny Rachitsky** (00:23:43):
You also talk about this. Yeah, there's this quote I have. "Acknowledge that others are often no better than you, because that makes you feel better about the story." So for people that actually want to be liked, I like being liked. I don't know if it's a flaw in my upbringing. Is the lesson you're capped on your power if you worry about if you want to be liked?

**Jeffrey Pfeffer** (00:24:05):
At the end of the day, you don't want to be intentionally disliked. You don't want to violate my dear friend Bob Sutton's book The No Asshole Rule and gratuitously be an asshole. But you are hired to get a job done. It's interesting. I unfortunately am now too old. In the words of my chiropractor, I'm suffering from too many birthdays. So I have a lot of doctors who are doing a great job. Trust me, when I choose a doctor, I have a, unfortunately he retired, a neurosurgeon who did two surgeries on my spine. He's considered to be one of the top 20 in the country. If you go on Yelp, you read about his personality and his office furniture. As I said to somebody, he's doing microsurgery on my spine, I can wind up permanently paralyzed. I really don't care about his personality. I don't care about his office furniture.

**Jeffrey Pfeffer** (00:25:01):
That's an extreme example, but it makes the point. When you are put in a role, you are put in a role because presumably you are supposed to perform in that role. If you get appointed to be a head coach, if we make you a quarterback on an NFL team, or we make you center on a National Basketball Association team, you did not get that job because people thought you had a cute personality. You got that job because you have the skills to make your organization successful. And if you do not use those skills because you're worried about what everybody else is thinking, you are not only harming yourself, but you're harming them because you are not doing what you were hired to do.

**Lenny Rachitsky** (00:25:46):
So a simple way of thinking about this, which makes me feel better about. As we talk through this, I'm becoming less uncomfortable with these, which is a good sign. It's don't actively try to be disliked. Don't prioritize being liked, prioritize competence and respect.

**Jeffrey Pfeffer** (00:25:59):
Correct, absolutely.

**Lenny Rachitsky** (00:26:01):
And doing the thing that needs to be done.

**Jeffrey Pfeffer** (00:26:03):
Absolutely.

**Lenny Rachitsky** (00:26:04):
Okay, great. Let's talk about rule number two, which is break the rules. So basically again, these powers are ways to grow power, and you're saying that if you break the rules, you get more power. Talk about why that's the case, what that looks like.

**Jeffrey Pfeffer** (00:26:18):
Well, for many reasons, number one, when you break the rules, you stand out. You become memorable when you do something that's unexpected. And being memorable is of course important, as we've already discussed. That's number one. Number two, the rules were made mostly by the people who are favored by the rules in place. So if we were talking about business strategy, we would talk about a word that is probably now overused. We would talk about being a disruptor. That you would disrupt an industry. And how do you disrupt an industry? By doing something that is different from the other industry incumbents. In Southwest Airlines, you don't do hub and spoke. At Amazon, you provide an incredible level of customer service. Whole Foods, you don't optimize on the cost of the stuff in your store, but you optimize on fitting local taste, whatever. You would be a disruptor, you would do things that are different.

**Jeffrey Pfeffer** (00:27:14):
The same principle holds for you, that if you are going to be successful, you have to do what number one, plays to your strengths, to use the title of a Gallup book. Number two, you have to do things again that cause you to stand out, and you have to do things that basically will make you more successful. One of the conventional wisdoms that people I think adhere to way too much, is don't ask. Don't ask, don't ask for help. You need to show self-sufficiency. So my colleague, Frances Flynn, Frank Flynn, wrote an article with Vanessa Lake entitled, If You Need Help, Just Ask. And it turns out people overestimate how many people they're going to have to ask to get help, and it turns out that asking for help makes people uncomfortable.

**Jeffrey Pfeffer** (00:28:03):
I was married, if you read the acknowledgments in Seven Rules of Power. For more than 35 years I was married to Kathleen Francis Fowler, who I could send you a picture. She looked literally like a supermodel and I never have been any particularly better looking than I am now. So somebody said to me, how'd you get her to go out with you? And the answer of course is, I asked. I asked, I asked, I asked. No one, well, maybe not no one. But few people are going to go out with you if you don't ask them out. Few people are going to marry you if you don't ask them to marry. Few people are going to do anything if you don't ask. And what is the worst that could happen? If you ask and they say, no, you are no worse off than had you not asked in the first place. If you don't ask, you're not going to get it. If you ask and they say, no, you're not going to get it. Get over your ego, ask.

**Lenny Rachitsky** (00:28:59):
Is there another example that comes to mind of someone breaking the rules say in business, that ended up being really successful as a result, or just someone that is really good at this in business?

**Jeffrey Pfeffer** (00:29:07):
I can give you many examples. One of my favorite examples would be Jason Calacanis. I don't know if you know Jason.

**Lenny Rachitsky** (00:29:14):
Oh yeah, I know you did a case study on him. I know him well. Yeah.

**Jeffrey Pfeffer** (00:29:18):
So I think Jason, I think consistently breaks all kinds of rules. First of all, when he comes to my class, nobody likes him, but that's okay. Almost nobody likes him. But...

**Lenny Rachitsky** (00:29:30):
That's power number one. He's not worried about.

**Jeffrey Pfeffer** (00:29:33):
Yeah, that's number one. But also I think there's a conventional wisdom in the venture capital industry which he defies almost completely. He makes a lot of little bets, not a few big bets. He runs a very lean operation. He doesn't have a lot of partners. He doesn't have actually any partners, so he can't be fired by his partners. He began his career in journalism, which is interesting. Being a journalist is a wonderful job because you get to ask people all kinds of questions. And if you ask smart people questions, and you have some reasonable level of intelligence yourself, at the end of that process, you're going to wind up incredibly smart and incredibly insightful. And he wound up incredibly smart and insightful around aspects of the internet industry.

**Lenny Rachitsky** (00:30:23):
And he definitely has a lot of power. I think I am going to link to the case study in our show notes where you basically walk through how he went from nothing to a very powerful person.

**Jeffrey Pfeffer** (00:30:31):
And by the way, a very rich person as well.

**Lenny Rachitsky** (00:30:34):
Let's talk about another power, power five, networking relentlessly. What does that look like and how do you get better at this?

**Jeffrey Pfeffer** (00:30:42):
Well, I think there's research that shows that many people find networking dirty, and that's because I think they think about it in the wrong way. My friend John Levy, who has written a fabulous book, You're Invited. Which is a book about how to put on events that people want to come to. Is a fabulous human being. Will tell you that the first principle of networking is in fact generosity. It's generosity. What can I do for you? How can I be helpful? Who can I introduce you to? Either a company or a product or a person who can be helpful to you in your career.

**Jeffrey Pfeffer** (00:31:20):
But in order to be able to introduce you to someone who's going to be useful to you, I have to know people. If I don't know anybody, I can't introduce you to anybody. And the more people I know, the more likely it will be that if you say, I need to know somebody in X, I will know that person. So the broader your social network, the more people and the more things you will know. If knowledge is power, networking is a fabulous way to get knowledge about people and about ideas.

**Lenny Rachitsky** (00:31:53):
It's funny to hear this where it's like, yes, obviously this is right, but connecting it to if you want to become more powerful, more successful, you need to do this. I think that is a powerful point that we're all making here, is just like this actually is necessary if you want to acquire more power.

**Jeffrey Pfeffer** (00:32:10):
Of course. I have a funny story about networking. So we have a thing in Stanford called View From The Top, in which these fancy people come in and give a talk. And one of the people came in and give a talk and made my class instantly popular, because he's an extraordinarily wealthy person. His name is Omid Kordestani, and so I reached out to him and I said, "Omid, let's have breakfast." So I can understand because during the thing, when somebody asked them what class was the most important in his success, he said mine. So I said, "Tell me your story." He said, "Well, I graduated from Stanford. I'm Persian in background, immigrant background. An engineer, HP, all the things that would make you kind of a nerd or something." He said, "I went to work for a couple of startups that didn't do well. Then I found myself in the mid-nineties at Netscape." The browser company, big deal. Anyway, Marc Andreessen.

**Lenny Rachitsky** (00:33:07):
Oh yeah.

**Jeffrey Pfeffer** (00:33:08):
Okay. "So I found myself in Netscape in marketing and business development. I was not making any progress. One day I decided to take your class to an extreme. I decided to stop doing my job." So I said, "When people gave you projects to do or assignments or tasks and you didn't do them?" He said, "It turns out that I spent my time, not obviously at the bar, but in networking first with people inside of Netscape. And it turns out if you're well-connected to the senior leaders, they don't really care if you do your job or not. That's number one. Number two," he said, "oftentimes I can find other people to do the work I was doing. So instead of basically spending time doing my job, I networked first within Netscape." But Netscape was not that big of a company. So after a while he decided to go through, which is by the way, his job anyway, in marketing and business, he decided to basically drive through the Silicon Valley talking to people. And this is the rest of the browsers are just beginning.

**Jeffrey Pfeffer** (00:34:14):
Nobody knows what a browser is, nobody knows what the internet is going to become. So he's having all these fabulous conversations. All right, so he now knows basically everybody. It's 1998 and a little tiny company decides 10 engineers, typical Silicon Valley company. 10 engineers, all engineers. I have a friend who went to work for a company, run a company that had 26 people. He didn't have one sales and marketing person. Anyway, the company now has 10 engineers. They decide they need to hire their first business person. Being an analytically oriented company, they say, we're going to do this very analytically. We are basically going to ask everybody we can think of, and a few people we can't. Give us a list of the best technically oriented business people that you know. And there is of course one name that appears on every list. It is Omid Kordestani who becomes employee number 11 at Google and makes two and a half billion dollars.

**Lenny Rachitsky** (00:35:13):
Great success from networking. Well done. When people hear about networking, it just feels like you said, very cringe. I don't want to go to these networking events and try to pretend to talk and care about people. Do you have any advice for just how to make networking feel less cringy?

**Jeffrey Pfeffer** (00:35:28):
One of the exercises I give my students is I say, write a list of 10 people who, if you knew them and if they knew you, would be important for whatever you're trying to accomplish in your career. So maybe you're trying to get into biotech, you need to know 10 executives in biotech or whatever. Make a list of 10 people. Then for each person figure out how you are going to meet them. By the way, not necessarily in a network event. Maybe you want to do what John Levy does, which is hold dinners. In which by the way, the guests do the cooking, which is a very interesting idea. That of course taps into the IKEA effect. You always like something better if you participate in creating it. Maybe you want to hold dinners, maybe you want to try to reach out to them at lunch.

**Jeffrey Pfeffer** (00:36:21):
Maybe you want to reach out to them and say, here's an article I think you'd be interested in. Here is somebody who I think you'd benefit from meeting. So recently, I'm not a particularly good networker, though I'm better I guess than some people. I recently met Esther Wojcicki, I'm sure I killed her name. She's considered the grandmother of Silicon Valley. She's Susan Wojcicki's mother. And she is interested in depression, particularly depression among teenagers. And I said, you should know Leanne Williams, who's in the Psychiatry and Behavioral Science Department, who has done probably 300 articles on depression and has invented something which is called Precision Psychiatry. So I connected them to each other. Just send an email. I think you ought to know each other. They got together. I get credit for knowing people and connecting them, but I also benefit them. Leanne needs to raise money. Esther's got money. Esther needs to understand the cutting edge research in depression and biomarkers of depression, which is what Leanne's specialty is, so they benefit. So this is not some icky thing. This is connecting people who benefit from being connected.

**Lenny Rachitsky** (00:37:38):
That touches on something you teach in the book is, in your networking you want to become a broker, you want to be central. That's kind of what you want to work on. Can you talk a bit about what that means?

**Jeffrey Pfeffer** (00:37:47):
Well, that means you want to connect people. So many people with benefits, and many groups with benefits for being connected, and they're not connected. What does a venture capitalist do? Connects people with ideas to people with money, and takes a fee for doing it. What does an investment banker do? Connects people trying to sell businesses or raise capital with people trying to buy businesses or who have capital. What's a real estate agent do? Connects buyers and sellers of houses. There are all kinds of examples where the person's entire job is connecting people. But even for the people whose job it isn't, you benefit from knowing people. The more people you know, the more things you know. As I sometimes say in my class, if leadership management, call it what you will, is getting things done through other people, it seems like common sense that the more other people you know, the more you'll be able to get done.

**Lenny Rachitsky** (00:38:45):
As someone that has become central to a lot of things in the product world, and has built a large network as a result of this podcast newsletter, I can tell you a thousand percent. This creates a lot of opportunity and power, you could say in quotes. So I've seen it happen.

**Jeffrey Pfeffer** (00:39:00):
Of course.

**Lenny Rachitsky** (00:39:03):
**Jeffrey Pfeffer** (00:40:14):
Well, the people to whom you are strongly tied, your family, your spouse, significant other, your friends, the people who work with you at work will probably, because they are close to you, know the same things and the same people that you do. So to the extent that you build ties with people who are more different from you in every dimension, you are more likely to learn non-redundant information, and come in contact with people that you don't already know. This again seems common sense. There's a lot of research behind it. Mark Granovetter, a sociologist who still teaches at Stanford, wrote a book entitled The Strength of Weak Ties.

**Jeffrey Pfeffer** (00:40:59):
And basically, no, actually, pardon me. He wrote an article called The Strength of Weak Ties. His book was called Getting a Job. And he did a study, I guess it was at that time in Boston. He did a study of job seekers in Massachusetts, and he looked at people who got jobs through applying to ads, through more formal means. And then he looked at people who got jobs through referrals from their network. And it turns out, of course, the jobs that you get through your network referrals are much better jobs. And oftentimes the best jobs that people got were referred to them by people that were not particularly close to them. Because they had a view, that's the word I was looking for, a view into the ecosystem of the Boston labor market, that the other people didn't have because they weren't in the same place as the other people.

**Lenny Rachitsky** (00:42:00):
I love that lesson. Let's talk about another power, which is using your power. So when people think of using your power builds more power, that's not intuitive. You talk about how it creates this self-perpetuating growth of power the more you practice power. Can you talk a bit about that?

**Jeffrey Pfeffer** (00:42:16):
Sure. So when you are given, it's interesting, my friend Deborah Gruenfeld, who wrote a book called Acting with Power, talks a lot about people's ambivalence to power. So sometimes people are put in a job. Herminia Ibarra who teaches now at London Business School, at one point taught in Seattle, at one point taught at Harvard, has an article in the Harvard Business Review in which she talks about a woman in a drug company who gets a promotion, and says to her colleagues, to whom she's now overseeing, that she's not sure why she got the job. She's not sure she deserves the job. Needless to say, she didn't do very well in this job because she got in her own way. But part of this is you are put in a position of power. You're put in a position of authority in order to make things happen. So to the extent you mobilize your resources and get things to happen, you'll get more resources.

**Jeffrey Pfeffer** (00:43:14):
People want to be associated with success. To the extent that you become successful, more people will want to work with you. To the extent that you get more stuff done, you'll get more promotions, more opportunities. Nobody's going to give you a job to do if the last five jobs like that they gave you, you couldn't get done. So the more you are able to do, which oftentimes of course requires power and influence, the more you're able to do, the more you'll be asked to do. But better yet, the more resources you'll be given to help you get things done.

**Lenny Rachitsky** (00:43:48):
And I think there's interestingly you teach that just showing that you have power creates more power. People see that you have this power and they start to follow your lead more, right? That's a part of this.

**Jeffrey Pfeffer** (00:43:57):
Yep. I just saw over the weekend the movie, the latest movie in the franchise of the Planet of the Apes. When Jim Collins left Stanford, he gave me a book called Chimpanzee Politics, which is of course not based on the Planet of the Apes, but it's based upon the study of chimpanzees. We are the same. People are attracted to power, you know that. By the way, that will account for a lot of what is going to happen in the presidential election.

**Lenny Rachitsky** (00:44:26):
Let's save that for the end, because I think that's an interesting piece of your book, of the connection to Trump. So let's save that for a bit. I think that'll be really interesting. Kind of along the same lines of the area we're just talking about. And another rule of power is to show up in a powerful fashion. So look powerful, talk about what that looks like.

**Jeffrey Pfeffer** (00:44:43):
So my colleague at Berkeley, Dana Carney, C-A-R-N-E-Y, is writing a book called Tell, which is about the importance of body language and how to master body language. There is some evidence that suggests we respond mostly to how people look, secondarily to how they sound, and by far the least important to the content of what they say. You can see this by turning on your TV and turning off the sound. Watch the presidential debates with the sound off. They'll be much better. I have another colleague in marketing by the name of Baba Shiv, who talks about people's freaky mind, or the idea that we are in fact descended from primates, and that we are controlled in lots of ways by our emotions. And so we respond affectively to other people. We respond to how they look. There's evidence in economics that suggests tall people earn more salaries, control, earn more money, controlling for lots of things, attractive people.

**Jeffrey Pfeffer** (00:45:46):
As long as you're not too attractive, you earn more money. Optimal level of attractiveness because people respond subconsciously to how people look, how they sound, how they show up, how they present themselves. In my class, I take the example of Tony Hayward of BP, the Macondo oil spill, and Lloyd Blankfein who was accused of shorting the securities that he was selling, which by the way, Goldman did. And before I let them hear Tony or Lloyd, we show about 60 seconds. And Lloyd's case 34 seconds with no sound. And even if you did not know who these people were and I asked you to make a bet, who's going to keep their job and who's going to lose it? You would know just from their physical appearance.

**Lenny Rachitsky** (00:46:37):
I love that.

**Jeffrey Pfeffer** (00:46:39):
And by the way, what Dana Carney will tell you, and what common sense will tell you, is that these are skills that can be mastered. Robert de Niro was not born Robert de Niro, in the sense of acting skills are learned. How you show up, how you command the room. There's a guy named Regis McKenna who is older than God, who's famous for running a very, very, very fancy public relations firm in the Silicon Valley. And his biggest contribution to life, as well as by the way to his personal wealth, is that he made Steve Jobs Steve Jobs. When Steve Jobs began, Steve Jobs couldn't convince you to buy water if you were dying of thirst. He could not give a presentation to save his life. And Regis McKenna and his team took Steve Jobs under their wing and created Steve Jobs, a man who could sell anything to anybody. These are skills. This is not about personality. This is not about undergoing some kind of cosmetic surgery or whatever. These are skills, everything we've talked about, networking, showing up, all these things. These are skills that can be learned.

**Lenny Rachitsky** (00:47:55):
I have a list of some of the stuff you actually recommend for looking and appearing powerful. So I'll read a few and I'm curious what else comes to mind. So do not read from notes. Make eye contact. Keep it brief. You say that anger can be a signal of power because it's outside the norm. It's kind of breaking the rules. Don't apologize. It's kind of the opposite. More gestures, which is interesting. Open body posture. Louder voice. Okay, I'm going to speak louder now. I like this. Okay, what else comes to mind as ways to appear powerful?

**Jeffrey Pfeffer** (00:48:26):
Invading people's personal space. So gentle touching, standing close to someone. We're not talking about sexual touching, we're talking touch on the arm or the shoulder, shaking people's hands. That's a way of I think being more powerful. But you've covered the main ones. Eye contact. One of the problems with Tony Hayward of BP is that he's been given a statement to read. You cannot read something in front of you and make eye contact at the same time. So he looks like he's scripted. He looks like he's insincere. Jack Valenti, who I had the privilege of knowing, who for 38 years was the head of the Motion Picture Association of America, and typically rated one of the number one or number two most effective lobbyists in Washington DC, said to my class when he came to my class, which he did, "I never appeared before Congress with notes. I wanted them to believe, which was by the way, true, that I was in complete control and complete mastery of the material, and that I did not need notes or a bunch of assistants around me to help me.

**Jeffrey Pfeffer** (00:49:40):
That I, as the head of the MPAA, understood the motion picture industry." And then he would give you a little aside about how it was the one industry that consistently had a budget surplus in trade. He would talk about how many jobs he created and he had all this stuff at his fingertips. But basically his command of the material made him more powerful. It's interesting, Jack Valenti was five foot two inches tall and he came, talked to my class, and the next class I said to people, "What are your reactions? What are your thoughts?" And a woman raised her hand and said, "He feels taller than he is." And I thought that was an assessment that was both true and insightful. When the five-foot-two Jack Valenti appeared, because of his presence, because of his body language, because of his Texas drawl, because of how he moved on the stage, he felt bigger. You would not say he did not feel five-foot-two.

**Lenny Rachitsky** (00:50:54):
Let me read a couple more because this is a good example of stuff he did. Other ways to appear more powerful is more speaking time, longer gazing time, more disinhibited laughs. Is that just you laughing and feeling like you're just...

**Jeffrey Pfeffer** (00:51:08):
Well, humor. Humor. The famous author, Salman Rushdie said, and I quote Salman Rushdie, it's a fabulous quote. "If you can get people to laugh, you can tell them anything."

**Lenny Rachitsky** (00:51:20):
Yeah, stand-up comedy is a great example that. So again, I think here people might be hearing this and they're like, I don't want to be this person. I don't want to be talking all the time. I don't want to be pretending like open posture. Is the advice here just you don't need to do all these things. Just know this makes people more powerful. Don't necessarily judge people, do some of these things maybe because it'll add to your power? How do you think about just people that are turned off by this sort of thing?

**Jeffrey Pfeffer** (00:51:45):
That's a wonderful question. So I say to my class, on the very first day of class, that we will go through four stages. We'll go through the stage of denial. It doesn't work in my culture, it doesn't work in my organization, doesn't work for me, it doesn't work in my religion, whatever. Then we'll go through anger. When they get angry at me, how can you teach us this stuff? Then they'll go into sadness. I actually believe this and I'm depressed. And if we're successful, they will go through acceptance. And the process I have, again, I do not have the most popular class at Stanford Business School because I am good-looking, because I'm the smartest person at Stanford or anything else. I am strategic about thinking about if I have someone who's going to come into this class, I have to get them from denial to acceptance in 10 weeks.

**Jeffrey Pfeffer** (00:52:38):
And how are we going to do that? The easiest way to do that, if I said, Lenny, I want you to become a better tennis player, or a better roller blader, or a better ice skater, whatever, a better piano player in 10 weeks, what would we do? If we have practice and coaching. And that's what I do in the class, practice and coaching. I have executive coaches who work with the class and I give them assignments that ask them to practice what they're learning. And therefore, by the end of the class, most people have made this transition because it is true. If you've never... I had a dinner the other night, this Israeli woman who's like, I've done amazing stuff. Amazing. Which is fabulous. And she said at the dinner, she said, "I would've never done this before taking your class." And the way you get them to do this is I don't say, Lenny, you're going to swim the English Channel tomorrow.

**Jeffrey Pfeffer** (00:53:38):
If I want you to swim the English Channel, we're going to start by swimming in pools and make every day a little bit more challenging. That's what we do. I don't start by saying, you're going to network like Keith Ferrazzi or John Levy, or you're not going to be as bold as Jason Calacanis, who trust me is extraordinarily bold. You're not going to necessarily do what I did. You're going to begin where you can begin, and push yourself out of your comfort zone. Because, and again, this is common sense.

**Jeffrey Pfeffer** (00:54:13):
There's also a ton of research behind it. If you always stay in your comfort zone, you'll never do anything different or better than what you're currently doing. This is true. If I said to you, I want you to, at the end of 10 weeks, lift a hundred pounds, I can't do that by on the last day saying lift a hundred pounds. We have to work up to it. And that is, it's the same principle here. So don't do something that looks so off the wall or so out of character for you that you can't conceive doing it. Push yourself a little, push yourself a little.

**Lenny Rachitsky** (00:54:49):
There's an interesting connection here too. What some say is kind of the opposite of your class at Stanford, which is Touchy-Feely. We had Carole Robin on the podcast and she has a framework, the 15% rule where you push yourself 15% beyond your comfort zone. Where it's just a little bit, but it's not too far, and it feels like you try to do a similar thing.

**Jeffrey Pfeffer** (00:55:07):
Yeah, absolutely. So you begin by doing what you don't think you can do.

**Lenny Rachitsky** (00:55:12):
Let's spend a little more time here around the homework assignments, and this kind of Knowing-Doing Gap that you talked about. So you shared a couple of homework assignments you give already, find 10 people, think of 10 people you want to meet that'll help you with your career and then try to meet them. And then there's this, I guess my friend started a podcast, I don't know which homework it was. What other homework assignments do you give?

**Jeffrey Pfeffer** (00:55:30):
So we begin, there's a literature on goal setting that says if you set goals, you're more likely to achieve them. This is, again, not some huge insight, but there's an enormous scientific literature about this. And so I begin the very first homework assignment is, which is by the way, on the very first day of class, why are you here? Why are you here? It is now the end of this class. What would success look like to you? What would you like to accomplish in our 10 weeks together? Second assignment, I give them a reading from the Power book, which is the book before Seven Rules, which talks about the seven attributes of power. Go out and get people to rate you on these or rate yourself. Set for yourself a development plan, energy, focus, being willing to tolerate conflict, all these qualities. What are you strong on? What are you weak on? What do you want to build during our time together, and how are you going to do it?

**Jeffrey Pfeffer** (00:56:35):
So we begin with goal setting. One of the assignments I give them, which is the class that Jason comes to, what resources can you create? You're at Stanford Business School, elite, fancy Stanford. What can you do in your 10 weeks here? I have people who created awards. A woman who created an award gave it to Karlie Kloss, the model. Got in trouble with the school. It turns out it's easier to ask forgiveness than permission. So what can you do to create resources that will give you some leverage? That would be a third assignment. The networking is a fourth assignment. The acting with power. I show them the videos and I tell them in advance of the class, and I tell them they need to become Tony Hayward. They need to do a better job, which is, by the way, a low bar, representing BP. And give me a 60 to 90 second video and then share it with colleagues and get feedback on it. And then we're going to call on people in the class.

**Jeffrey Pfeffer** (00:57:47):
In other words, for every idea, I try to think of something. And this is all, by the way, this is all front-loaded. And by the end of the class we're not doing this so much. But I try to give them an exercise that causes them to actually take that idea and implement it. Find people, oh, for branding. Write a personal brand statement, get some feedback on it, then write it again. How do you want to be known? Which is by the way, useful to you because you're a second-year MBA, you're going to go in the job market. What do you want people to think about you? How do you want people to respond to you? How do you want to be known? So I basically take for every topic and have them do it. And then the coach, their person, their coach, who is responsible for 23 of these people, give them feedback on this.

**Lenny Rachitsky** (00:58:44):
I could see how this makes a big impact on someone's life.

**Jeffrey Pfeffer** (00:58:49):
Yeah. And so at the end, I had a student a couple years ago said to me, "It is not that I got more feedback and more useful feedback from your class than I did in any other class. I got more useful feedback in your class than I did on every other class I took combined."

**Lenny Rachitsky** (00:59:09):
I can see why. Let's talk about the last power. So we've talked through six already. We have only one more to go, which is maybe the one that probably upsets people most, which is that once you have power, people will forget what you did to get there. Talk about what that looks like and is that a power or is it more just like this is what you should know about.

**Jeffrey Pfeffer** (00:59:28):
And I put in rule seven for the following reason. In spite of everything that you and I have been talking about, many people in a stage of, I don't know, denial or something, say, I'm worried that if I do this, at the end... People believe that the world is homeostatic. It is not. That it's going to adjust, but whatever. At the end I will be brought low. They have the myth of Icarus in their head. You fly too close to the sun, your wings are going to melt, you're going to be brought down. And so I try to convince them, partly through a lecture and partly through rule seven. And some of the principles that I talk about in rule seven. That, in fact, life is not homeostatic at all. That life is actually self-fulfilling. If I believe you're powerful, you will become more powerful.

**Jeffrey Pfeffer** (01:00:26):
If I believe you have no power, you will wind up with almost no power, and that therefore it is all forgotten and forgiven. And I begin, I believe I begin. But if not, I could begin with the story of the South Carolina Senator who says nasty things about Trump, and then Lindsey Graham, and becomes Trump's biggest acolyte. And the New York Times, of course, is fascinated by this. How can you say all these horrible things about Trump and now be his, basically have your lips affixed to some part of his anatomy? And Lindsey's answer is, I want to be relevant. He's the President of the United States. This goes back to the judgment. I like him, this, that, the other thing. He's the president. If I want to get legislation passed, he, by the way, has taken over the Republican Party.

**Jeffrey Pfeffer** (01:01:22):
If I want to get stuff done, I need to have him on my side. And like many narcissists and egomaniacs, it is not a good way to get them on your side by saying nasty things about them. So this is the pragmatics. People forget that Bill Gates stole the code on which Microsoft has built. People forget that Jeffrey Epstein, after being convicted of sex offenses, was still having dinners with members of the royal family and members of the New York media elite. People forget that Martha Stewart, who served time in jail, has a brand that's never been more valuable. People forget all this stuff.

**Jeffrey Pfeffer** (01:02:19):
I still remember sitting in the office of someone whose name I won't use, but I'll use enough that if somebody wanted to search it out, you could. So I am sitting in this guy's office and he's, by the way, a Jewish man. He's got pictures of him with the Pope, he's got pictures of him with Ronald Reagan. He's got pictures with him, with all these people. What is his secret? He, by the way, took a company into bankruptcy. People lost literally billions of dollars. He was fined. He lost money, but he walked away with about $700 million. It turns out, $700 million makes you a big deal. Lives at the biggest house in Los Angeles or one of the biggest houses in Los Angeles. I can't keep up with the construction of the big houses. People want to be close to money, power, and success, and they will overlook your flaws to be close to you.

**Lenny Rachitsky** (01:03:18):
And again, you talk about this in the book. You're not describing how the world should work. This is just how it is, and this is how you can be successful in the world that we live in.

**Jeffrey Pfeffer** (01:03:28):
And by the way, this is how the world not only is, but how it was and how it will be. Because these ideas are not something that I sat down one day and made up or something. These ideas, everything that I talk about, including this last one, has social science and logic behind it. So you can explain not only what is, but why it is.

**Lenny Rachitsky** (01:03:58):
So, let's talk about Trump for a bit. At the beginning of your book, you say that basically you were going to write a book about why Trump is so successful and what he's done so well. And your realization is no one's going to pay attention if here's how to be like Trump. And essentially, if you think about all these rules, it's clear he is very good at all of these things.

**Jeffrey Pfeffer** (01:04:16):
That's correct. By the way, not because he read the book, but because he does it through trial and error or something.

**Lenny Rachitsky** (01:04:22):
So when people hear that, they're like, I don't want to be Trump. I don't like how Trump is. I don't want to be seen that way. Do you have any thoughts on just how to make people feel comfortable following some of these powers and building power, knowing that, oh wow, maybe he's the epitome of some of this stuff?

**Jeffrey Pfeffer** (01:04:38):
I will tell you a story. In 1993, a woman named Laura Esserman, who's a doctor, took my class. She claims publicly that this is the only class at Stanford for which she did all the reading. By the way, while she was getting her MBA at Stanford, she was having her first child and practicing medicine full time. Laura Esserman said to me one day, "You have a case. You have cases on all these people doing evil things. Why don't you ever write a case about somebody doing good things?" And of course, I wrote a case about her. So she comes to the class. Case was published in probably 2003, 2004.

**Jeffrey Pfeffer** (01:05:31):
She comes to the class and the students are, what is the right word? Hard on her? That would be a modest thing. The students eviscerate her because she is incredibly smart, incredibly well-intentioned, but she will not network. She says, "I don't have time for schmoozing." She will not do almost any of the stuff that we talk about today. So she and her husband, Michael Endicott, two of my closest friends in the world, and I go out to lunch afterwards. And smoke is coming out of her ears and she is pissed off. And this is a very accomplished woman and a very smart woman. And she's pissed. I said to her, "Laura, you have boundless energy and boundless intelligence. You're a force of nature. Let me discuss something from the past subject of physics.

**Jeffrey Pfeffer** (01:06:39):
You are creating friction. With enough force you can overcome the friction. If you reduce the friction, just think how much more you could accomplish." And she looked at me and changed. And I will tell you, and I've said this publicly, because I get to introduce her for all the awards she's won, and she's now won a ton of them. Including Time Magazine 2016 list of a hundred most influential people in the world. And I say to people, and I say it with pride, that of all the things I've done in my life, the thing I'm most proud of and most proud of is creating Laura Esserman.

**Lenny Rachitsky** (01:07:20):
That is an awesome story and a really good way of thinking about this from a different angle.

**Jeffrey Pfeffer** (01:07:24):
Yeah, no, and I said to Laura, I said, "You want to make profound changes in the drug development process. You want to make profound changes in whether or not we learn from the treatments that are being given to people. You want to make profound changes in the connection between research and teaching, research and practice. You want to do all these things. If you are going to accomplish any of these things, you need to cross the bridge." And she hasn't crossed the bridge completely and she and I joke about it. But she crossed the bridge a lot and she has accomplished incredible things. She's won every cancer award that can be given. And by the way, she's won all these awards for the American Cancer Society, who she fought with. She's won these awards from the Susan Cohen Foundation, who she fought with.

**Lenny Rachitsky** (01:08:20):
This is an incredible example of the opening quote to your book that I have here. "If you want power to be used for good, more good people need to have power."

**Jeffrey Pfeffer** (01:08:28):
That's exactly right.

**Lenny Rachitsky** (01:08:30):
And I like the, it's like a quote attributed to me, is how you...

**Jeffrey Pfeffer** (01:08:34):
Yeah. Well, I don't remember saying it, but somebody said, I said it. I'll take credit for it. I said to Laura, "You want to change medicine? Medicine is not going to change without the application of power and influence." If change was going to happen, it would've happened already. You have to take on entrenched interests. She has a whole thing, which we need not go into because it's pretty technical, on screening. She said, everybody's getting a mammogram every year beyond a certain age, which is stupid for a variety of reasons. You can read, she was on the PBS NewsHour about this. This is what got her in trouble with the radiologists. The radiologists, of course, are selling screening. She said, there's some people that need to be screened every month, and there's some people that need to be screened never because of their genetics. She wants custom tailored screening or precision screening. Anyway, she fights everybody.

**Jeffrey Pfeffer** (01:09:29):
Richard Blum, Dianne Feinstein's husband, both Dianne and Richard Blum are now deceased, was at a thing where she launched the Athena Project. The Athena Project, she's now, with her collaborators, collecting data on the diagnosis and treatment and outcome for 150,000 patients in the University of California Healthcare System. So I'm supposed to give some opening talk to provide entertainment. And Dick Blum is there. Dick Blum, of course is wealthy. He's Dianne Feinstein's husband. I said to him, "Dick, how did Laura get you here?" And I still remember, I think this is a quote in one of the books I wrote. He said to me, he said, "Look." He said, "I've learned that at the end of the day when Laura asks you to do something, you may say no, but at the end of the day, you're going to do it anyway. Save yourself the aggravation."

**Lenny Rachitsky** (01:10:20):
Oh man, I feel like you're just endlessly full of good stories that we could just keep going on and on. Let me try to summarize the rules of power real quick and see if anything else emerges. And then have just a couple more questions. So the Seven Rules of Power, get out of your own way, break the rules, show up in a powerful fashion, create a powerful brand, network relentlessly, use your power, and understand that once you've acquired power, that what you did to get there will be forgiven, forgotten, or both. Let me ask you a question, maybe half in jest. You teach people how to acquire power. Why aren't you the most powerful man in the world?

**Jeffrey Pfeffer** (01:10:57):
Ah, that's a very good question. To which I have a very good answer. I have a colleague who's unfortunately now deceased, by the name of James G. March, who was a very, very distinguished scholar. And James March said to me many, many years ago, something which is completely true. You can have power or you can have autonomy, but you cannot have both. And I have chosen to live a life of freedom, autonomy. I could tell you stories that would bring tears to your eyes. I'll tell you one. We had a dean of the Business School whose wife was dying of cancer, and she was projected to die in the fall. So the Business School goes to him and says, we'll give you the fall off to be with your wife. She lives until June. It's now winter.

**Jeffrey Pfeffer** (01:11:46):
You have responsibilities as the Dean of the Business School. You have to meet with alumni. You have to go around and raise money. You have to show up at events, university events. I do not necessarily think that is how he wanted to spend the winter and spring quarters, but that's what you have to do. When I wanted Jack Valenti to come to my class, I did not call Jack Valenti. I called Judy Dickey. Judy Dickey was his assistant. Judy Dickey controlled his schedule. I meet Jack on such and such a day. He can't make it on that day. Fine. I can adjust the schedule. Can he make it on this day?

**Jeffrey Pfeffer** (01:12:24):
When I wanted my friend Gary Loveman, who ran Harrah's and Caesars and then was the number two executive at Aetna, I want him to come to my class. I called Reggie Kirk. I didn't call Gary Loveman. And that's all you need to know. I do not have an assistant who controls my schedule. I control my schedule. You will not find my Outlook calendar on any website, on any computer. I want autonomy. If I said to you, "Lenny, I will give you $1 billion, or for that matter, $10 billion if you can buy-"

**Lenny Rachitsky** (01:13:01):
Yes.

**Jeffrey Pfeffer** (01:13:02):
Wait, if you can have last week again. You can't. You can't. Time goes in only one direction. I want control of my time. It is much more important to me, being a Dean or an Associate Dean, a job that I was asked to do. I took one academic administrative job. I'm actually memorialized, believe it or not, in the Stanford Record, as having led, and this is according to my expenses, the Nobel Prize winner who was Dean at the time, that I led the biggest and most successful transformation in the history of higher education. I did it. I did it once. I didn't like it. Life is too short. I want to do what I like.

**Lenny Rachitsky** (01:13:52):
That's a really profound point that I think people don't think about, is there's always this drive to acquire power. And your point is that there's a big downside, which is a lack of autonomy. Yeah. You think about the, as I was trying to get Satya Nadella on the podcast, and I talked to his comms people, and they're like, every hour for the next three months is booked already. We know what he's doing. He's extremely booked. And you think about the president, obviously at Elon. I totally get what you're saying.

**Jeffrey Pfeffer** (01:14:17):
It is true, and I don't want to do that. And by the way, power also comes with enormous visibility. Donald Trump has done, for 40 years, what he's now being accused of doing, the tax stuff, all this stuff. He's been a grifter all his life. But when you become President, people are going to look at things that in the past they would not have looked at. You become president of a university, you're going to have scrutiny as the President of Harvard Law and the President of Stanford Law, when they both had to resign, in one case because of plagiarism, in another case because of research misconduct.

**Jeffrey Pfeffer** (01:14:55):
Power comes. You're going to be put under a microscope. People are going to look at what car you drive. They're going to look at who you go out with. They're going to look at how you spend your time. They're going to look at how you associate with, you'll have no privacy. You'll have very little control over your life. Everybody will feel completely free to dissect you in public, in private, whatever. And you'll face the trust dilemma. When you are rich and powerful the question will be, are people praising you, are people associating with you because of you or because of the position you hold?

**Lenny Rachitsky** (01:15:41):
Yeah. Do you spend any time, just to follow this thread in your class, convincing people stop being so obsessed with power, stop being so obsessed with becoming the top of everything? Is that a part of the class?

**Jeffrey Pfeffer** (01:15:52):
No.

**Lenny Rachitsky** (01:15:52):
Or is it just...

**Jeffrey Pfeffer** (01:15:53):
No. I teach them, they see we have a class on the price of power. I bring out Rudy Crew. Rudy Crew was the New York School's Chancellor under Rudy Giuliani. By the way, he tells many interesting stories about Rudy Giuliani, who did not just become the joke that he is overnight. He's worked hard to become that. But in any event, he tells. And one year, one year, because his daughter at that time was living in the Bay Area, when I asked him about the effect of the positions he held, Head of Miami Dade County Schools, Head of New York City schools.

**Jeffrey Pfeffer** (01:16:29):
Had Hillary ever won, he would've been Secretary of Education. Literally. There's Lauren in the room. And he said to the class, Jeffrey asked me the question, "Why don't we let Lauren answer it?" By the time she was finished, there was not a dry eye in the room. What is it like to be the child? What is it like to be the significant other of these people? And you know the answer to that because you can see the suicides, the divorce rates. There is a price that not only you pay, but a price that your family pays.

**Lenny Rachitsky** (01:17:09):
I think that's a really good balance to the entire conversation. Maybe just as a last question, what if we give the audience a homework assignment to work on these power rules? What's something that you'd recommend someone try to do? I know it's probably dependent on what they're good at, not good at. What's something that they could do to start moving towards one of these rules?

**Jeffrey Pfeffer** (01:17:28):
So what I would say, and it comes from something that you talked about in our conversation at several times, which is this is uncomfortable. Okay. So if I want you to do something uncomfortable, I could say, "Lenny, go do this uncomfortable thing on your own." Or I can say, "Lenny, I want you to do this with help, with social support." And so the first thing I would say to someone is, if you think this is uncomfortable, or if you think you're not skilled at this, get coaching. Get a coach.

**Jeffrey Pfeffer** (01:18:03):
I send out regularly the list of the coaches who work with my online and on-campus classes. Happy to do it. And they're happy to have the business. Get a coach. Get a personal board of directors like they talk about in the Wall Street Journal. In other words, get people who will give you advice, give you social support, and hold you accountable. That's the very first thing I would tell people to do. It's hard to do anything on your own. If I said to you, "Lenny, I want you to start an extraordinarily successful podcast and I want you to do it without any help." You would not be where you are today. So that simple principle, get help.

**Lenny Rachitsky** (01:18:48):
It feels like a part of rule number one. Get out of your own way. Ask for help. Jeffrey, I was nervous for this podcast because I thought this was going to be super uncomfortable stuff. It turns out all of this makes so much sense, and there's a really nice way of framing all of these rules, and there's so much reason to actually invest in these skills. So I really appreciate you putting in the time being here, sharing all these stories and insights. Is there anything else you want to share as a kind of a final note or something to leave listeners with before we wrap up? We did it. We covered everything?

**Jeffrey Pfeffer** (01:19:19):
No, I'm happy. I'm happy you're a very good interviewer, which is why your podcast is so successful.

**Lenny Rachitsky** (01:19:24):
I appreciate that.

**Jeffrey Pfeffer** (01:19:25):
I'm happy to spend the time with you, and I hope whoever listens to this will, I hope, first of all, there'll be a lot of listeners, but I also hope that they will find it useful.

**Lenny Rachitsky** (01:19:32):
I know they will. Two final questions. Where can folks find you online if they, or find your book, I guess, if they want to learn more? And then how can listeners be useful to you?

**Jeffrey Pfeffer** (01:19:41):
So you can find my book anywhere where books are sold. Don't look at a physical bookstore because nobody carries it, including actually Stanford bookstore, where they run out of it if people... And you can find it on Amazon. Seven Rules of Power. So that's how you can find the book. By the way, at the end of the book I talk about, I have a personal website, jeffreypfeffer.com. If you go to that website, you can find my course outline. So you can take the course on your own if you want, or get somebody or take it in a group of people.

**Jeffrey Pfeffer** (01:20:13):
You can find research, you can find articles, you can find columns. You can follow me on LinkedIn or I don't do Twitter anymore, but you can follow me on LinkedIn. So there are a lot of resources available for this. A company was once thinking of hiring me to give a talk in their organization, and the woman who wound up hiring me said, "When I was discussing you and arguing that we should hire you for this presentation, one of the people in the committee said, is he a good presenter?" And her answer, I love this. I remember this. Her answer was, "He's a fabulous educator." My job is to educate. That is why I have done what I have done for now more than 50 years.

**Lenny Rachitsky** (01:21:03):
Holy moly. I didn't even realize that.

**Jeffrey Pfeffer** (01:21:06):
For more than 50 years, I have been in the business of education. Not just about power, but about many other things as well. But I'm in the education business, so I'm happy to provide people with the resources, with the readings. The Seven Rules of Power is well footnoted. It talks at the end about we could reach out for the coaches. You can go to the website and get the book. But I think consistent with what you and I have talked about, if all you do is read, you're not going to make very much progress. You have to do it. You cannot learn tennis by reading about tennis, or by watching a movie about Serena or Venus Williams. You have to actually get out on the court and do it.

**Lenny Rachitsky** (01:21:51):
Which is a good plug for your other book, the Knowing-Doing Gap, which actually helps you with the skill, which you can also find all your finer retailers. Jeffrey Pfeffer, thank you so much for being here.

**Jeffrey Pfeffer** (01:22:04):
Thank you for having me on your show.

**Lenny Rachitsky** (01:22:06):
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.

---

## [18/21] Hard-won lessons building 0 to 1 inside Atlassian | Tanguy Crusson (Head of Jira Product Discovery)

**Tanguy Crusson** (00:00:00):
Been in the product management team at Atlassian for roughly 10 years now. I worked on HipChat and Stride, and more recently I started Jira Product Discovery.

**Lenny Rachitsky** (00:00:09):
Why is it so hard to start new products, go zero to one within large companies?

**Tanguy Crusson** (00:00:13):
The company has a tendency to over-invest. Startups have the benefit of starving, and so you need to create scarcity. What we try to do is remind everyone things are going to fail, let's not drag the rest of the company into it.

**Lenny Rachitsky** (00:00:24):
Sounds like one of the biggest lessons is super silo sort of team.

**Tanguy Crusson** (00:00:28):
I needed the rest of the company to go away so we could get the autonomy to test the things that we needed, but it's not going to scale. That is not going to respect all design guidelines.

**Lenny Rachitsky** (00:00:35):
The biggest challenge I think a lot of companies have is just, it's been six months, no one wants this, we're going to kill it. How do you protect that?

**Tanguy Crusson** (00:00:41):
Be very clear about what we're testing, doing that with data, doing that with personal customer stories, give people a sense of velocity and speed. No one wants to fuck with a high-speed train.

**Lenny Rachitsky** (00:00:54):
Today, my guest is Tanguy Crusson. This is a really unique and important episode because we get into something you don't hear much on podcasts like this, the real talk challenges of trying to innovate and build zero to one at a large company like Atlassian. Tanguy has been at Atlassian for over 10 years and has worked on a bunch of internal big bets, some that have worked and some that have not, including products like HipChat, which I was a huge fan of back in the day, also a product called Status Page, and most recently Jira Product Discovery, which is one of the fastest growing products in Atlassian history that Tanguy led from idea to launch. We go through each of these stories, and Tanguy shares what went wrong, what went right, and everything that he's learned about creating space for innovation within a larger org, including how they structured their internal incubation program called Point A.

**Tanguy Crusson** (00:02:21):
Thank you very much for welcoming me here, Lenny. I'm actually super proud to be on this podcast. I've been a huge fan. Whenever I get the chance, I listen to you when I drive somewhere so yeah.

**Lenny Rachitsky** (00:02:31):
What we're going to be talking about in this episode is we're going to be talking about building new products and going zero to one within larger companies, and in particular, the pain and the challenges that come along with that, but also the lessons that you've learned from doing this many times and seeing it done many times. You've seen a lot of this happening at Atlassian, you've been there for over 10 years at this point, and Atlassian has, I don't know, over a dozen different product lines at this point, something like that. I know a lot of people come to you asking for advice on how to build zero to one within a large company. So let me just start with a general question of just could you just share a bit about your history of building zero to one and just seeing zero to one happening within Atlassian?

**Tanguy Crusson** (00:03:14):
Yeah, so like you said, I've been in the product management team at Atlassian for roughly 10 years now, and I've been working mainly on bootstrapping new things. Initially, I joined to start the cloud developer ecosystem so developers can build apps on top of the Atlassian platform and sell them on the Atlassian marketplace. I worked on HipChat and Stride. HipChat was well-known, Stride less so. We were trying to win the enterprise communications market before Slack and Microsoft Teams came about. I did lead a business case to invest more in IT operations, got nowhere with it than we acquired Statuspage, Opsgenie, and something I tried to do with didn't quite get off the ground. More recently I started Jira Project Discovery, which was part of our internal incubator for two to three years, and came out of the incubator and generally available a year ago.

**Tanguy Crusson** (00:04:13):
My track record at Atlassian has been 50/50 at best. Jira Project Discovery is actually my first, what I would call big success here. That one worked, but it was hard and all the ones that I worked on before were really hard to, and that's the kind of stuff that really bothered me for a super long time. The good thing is working on a product for product managers, I got to talk to a lot of product managers and across all sorts of industries in the past three to four years, and I realize that 50/50 is actually not that bad.

**Lenny Rachitsky** (00:04:46):
Awesome, and I know there's going to be a lot of real talk in this conversation. I'm excited to share and hear all these stories.

**Tanguy Crusson** (00:07:14):
Yeah, so on the opportunity side, so Atlassian, 300,000 customers. We play in a whole bunch of different markets, everything in the collaboration space. We have a lot of markets that we play in, which means that we've got a lot of competitors. But basically when we look at the areas we could go in, there's an endless list of areas that we could go in, play and have a decent chance to win. Much harder to do if you're a startup. The breadth that we've got makes it easier to try find areas where we could expand into. We're not starving like a smaller company, so we can actually afford to try to play somewhere, to do some bets, to have some of them fail and some of them succeed, so that's amazing. Now our customers, I said 300,000. The thing that I admire the most about the Atlassian business model is it's very broad. It's across small and medium-sized companies. We have startups using our products, and we've got also enterprises and very large enterprises using the same products, which means that there's a lot of areas where we could find a niche and go after it and expand progressively into all these areas so there's a massive distribution potential that comes with that. When I worked on Jira Product Discovery, I didn't start with, okay, I'm going to need to start finding product managers and it's going to be how to find them. No, they were already all using Jira. Atlassian is a company that has a relatively deep organization hierarchy but relatively flat decision making. So it's more like a, imagine a network of key decision makers across the organization. It doesn't really matter the job title or whether you are a manager of people or not. The decisions are made by people who drive change.

**Tanguy Crusson** (00:09:02):
So there's a lot of empowerment that comes from that, but also it's a mix of top-down, bottom-up happiness I'd say. And so it can feel really chaotic at first, but once you know how to navigate it, it's actually pretty easy to try to go after something that you care about. And of course, we're a big company, so there's lots of ways we can get help. Corporate development, research analysts that we can talk to whenever we want to explore something, thousands of customers that I just have to put something in the addressable community group and get hundreds of people applying to talk to me from one day to the next. So that's amazing, any startup would want that.

**Lenny Rachitsky** (00:09:45):
This sounds like how can anything not work when you launch a new product? You have 300,000 potential customers to launch it to. You have all the resources to build it. It sounds like decision making is efficient relatively, it's flat. You have all these different customer segments that use all these different version product lines of Atlassian. It's just like all of the opportunity possible to launch new products and still, many things do not work out, so I think this is a really important point and I think many big companies are in this. We have so much opportunity. Everything we're going to build is going to, it's going to grow like crazy because we have everything we need, but still it doesn't work out. And that's why I think we're going to talk about, it's going to be so important.

**Tanguy Crusson** (00:10:27):
It's going to be a little bit of therapy for me. Hopefully some people out there could go, "Okay, it's not just me having a hard time." It can happen in companies like Atlassian too.

**Lenny Rachitsky** (00:10:38):
Amazing.

**Tanguy Crusson** (00:10:38):
So yeah, let's talk about the challenges.

**Lenny Rachitsky** (00:10:40):
Let's do it.

**Tanguy Crusson** (00:10:41):
Yeah, for that. So you want to start a new thing. This thing is going to take time, and you need to be able to have that time for the time it takes until you can prove whether there is a thing or not. The thing inside Atlassian is that the path for success is super high for a new bet. If you come in and you create a product and it's got 100 customers, it's going to look cute. Remember, we serve startups and enterprises, we have self-service and sales, we've got all these motions that are in place for our bigger products. A $100 million business is a good start basically. In most companies out there, $100 million business is a home run. For us, it's not like that. We're trying to build businesses that grow really big and keep growing big over time.

**Tanguy Crusson** (00:11:36):
Now, evaluating success can look very different between early stage and established products. For a long time at Atlassian, we were treating everything a little bit equally in that the metrics success for the same. For example, things like monthly active users is the way that you, for a long time we looked at you go, is that product being successful on it? And what if you are building an "internal startup," your monthly active user number should look very low for quite some time up until you know that your product is ready to serve the vast majority of the customers that you want to put it in front of, so that they don't just look at it and go, "It's not ready for me."

**Tanguy Crusson** (00:12:20):
They're going to try it and then they're going to churn and it's going to take forever to claim them back, so that makes it pretty challenging to try and start new things unless we've got the right metrics and processes and everything internally that can give room and breathing space for the bets to succeed internally. And for many years, we were not there. We started getting there more recently with the start of Point A, which was our internal incubator program, which is one of my latest that was successful. The ones before didn't have that, and I really struggled from that, and I see many companies struggling with that exact aspect.

**Lenny Rachitsky** (00:12:58):
Amazing. Let's dive into an actual story. There's three that I want to talk about. There's HipChat, which you mentioned. There's Status Page and then there's the product you're working on now, Jira Product Discovery. So with HipChat, funny story, I loved HipChat. I was a huge user of HipChat at my startup back in the day. I can never forget the billboard that you all put out promoting HipChat where there's this little stick figure meme guy and it just said, "Why use HipChat?" And I thought that was the funniest thing, and the product was so delightful. There's just all these little emojis in there, and the idea with HipChat for Atlassian was basically to become the Slack killer, that was the vision.

**Tanguy Crusson** (00:13:39):
You just killed me. We were way before Slack.

**Lenny Rachitsky** (00:13:43):
Okay, so first mover advantage, amazing product.

**Tanguy Crusson** (00:13:47):
It works, yeah.

**Lenny Rachitsky** (00:13:47):
And it was an acquisition for Atlassian.

**Tanguy Crusson** (00:13:48):
It was an acquisition.

**Lenny Rachitsky** (00:13:50):
Awesome. So let's talk about what went wrong with HipChat. What did you learn?

**Tanguy Crusson** (00:13:53):
All know Atlassian as company, as the tool that could almost have a, okay. [inaudible 00:13:57].

**Lenny Rachitsky** (00:13:57):
Yeah, this is the therapy. The therapy session begins.

**Tanguy Crusson** (00:14:03):
Yeah, it's going to start right there. Me and everyone else from the HipChat team I can tell you. Okay, so yes, HipChat was an acquisition, team of 20 people or so. It was Slack before Slack was there. Great traction and lot of, it was a darling with startups. It was a new way to collaborate back then. There were a few of these smaller apps that were trying to do this thing. I remember actually joining Atlassian. Before that, I was working with financial services, banks and stuff like that, and we were big meeting to talk about stuff, or going to someone's desk to talk about stuff. I joined this company where my colleagues who sit on the same floor as me and on the same table, we talk over the computer via chat. I often felt weird at first looking over my shoulder to the person I'm currently talking to and we're having an argument, but we're doing it over text. Anyway, it might seem a bit cute to the people who had been born in the Slack world, but it was a major change back then.

**Lenny Rachitsky** (00:15:03):
Yeah, I remember that. I remember that, I was in the same office with my team and we're using HipChat to chat and it felt strange. Now it's completely normal.

**Tanguy Crusson** (00:15:10):
It's just normal, and Hipchat was one of the first to move there. Slack came out of nowhere. Company actually initially was focused more on gaming and they really took the market by storm. The growth numbers were dizzying when we're looking at them. And so at some point, Hipchat was left relatively alone for a while inside Atlassian. You're doing something good, so keep going after it. But with Slack, we now had to try to go bigger, so we started this thing called HipChat Go Big, the team, they recruited-

**Lenny Rachitsky** (00:15:44):
That was the name of the project? HipChat Go Big?

**Tanguy Crusson** (00:15:46):
Yeah, HipChat Go Big. And then it was HipChat Next Gen, there was a few different. Anyway, yeah.

**Lenny Rachitsky** (00:15:51):
Very clear. HipChat Go Big, I love it.

**Tanguy Crusson** (00:15:55):
Go big. But it was really a go big, lots of new developers, lots of new product managers, designers, the full company behind this product kind of thing. We tried to grow it very aggressively for a product that did not change that fast before it had reached good product market fit already, hundreds of thousands of users on a daily basis, and all of a sudden that you get a lot of people who want to make changes to it, to compete against this new threat. The platform is not so ready for so many people to work on it. And so we got to the inevitable, okay, it's too much tech, we can't do much about it so we made the decision to rewrite it. There's lots of literature around there around should you do rewrite? Should you not do rewrite? You ask me now, I tell you never. Trust me.

**Lenny Rachitsky** (00:16:44):
That's what most of the advice is, never do a rewrite, and people still do it.

**Tanguy Crusson** (00:16:46):
Never do a rewrite, and there's good reasons for that. But basically we did that and out of it came up actually a new product called Stride, which was initially "HipChat next gen." The problem is that the product was great, but by the time we were done, Slack was just miles ahead of us. At that point, Microsoft launched Teams. I don't know if you remember this moment where Slack put an ad in the, I think it was The New York Times, copying the Apple versus Microsoft thing from ages before going, "Welcome to the game, welcome to the party, we'll welcome you competitors," and stuff like that and Slack got pretty much destroyed by Teams. We started coming because it was like Microsoft distribution advantage. Everyone in Office is going to get it. They're giving it for free as part of Office, it was unbundled I think a few months ago.

**Lenny Rachitsky** (00:17:38):
Which is ironic because in theory, Atlassian also has that same advantage, right? You have all these products, you could bundle it.

**Tanguy Crusson** (00:17:46):
We are going to talk about that actually in a minute.

**Lenny Rachitsky** (00:17:50):
Okay, great.

**Tanguy Crusson** (00:17:51):
Because that was what helped us, how we thought we would win, and it was how I think we lost.

**Lenny Rachitsky** (00:17:59):
Amazing. Let's get in.

**Tanguy Crusson** (00:18:00):
So anyway, this all happened, and in the end we executed the market. We sold HipChat and Stride to Slack and basically exited the enterprise communications market.

**Lenny Rachitsky** (00:18:10):
Just to double down that, but you sold that to Slack and now Salesforce basically, that's the word ended. I don't know if people know that.

**Tanguy Crusson** (00:18:19):
Yeah, actually, it was noticed by the market in that as soon as we did that, our stock price went up. I think it was $60 back then and it went up to 70. I mean, that really sucked for us, the team working on it. First, no one tells you, but failure, everyone tells you failure is great because you learn so many things, but failure to start with really sucks. None of us here were really happy about this on the team because we had spent years, on my part, it was three years, but the people who were before that on HipChat was longer than that. Obsessing over it, obsessing over every detail, every customer conversation, every solution, should we rewrite, should we this, should we do that?

**Tanguy Crusson** (00:19:07):
So many intense conversations, and from one day to the next, it didn't matter anymore. We had worked on something and that's it, that's the end. I'm sure many startups have been through that before. For me it was the first time it felt that personal, and the market the next day went, "Oh, you're stopping doing what you're doing? Awesome. Yes, 10 more dollars to your stock price." So yeah, there's a personal side to all the stories. For us, there was a bit like the seven stages of grief after we shut down HipChat.

**Lenny Rachitsky** (00:19:38):
How long was that period of mourning and stages for you and the team?

**Tanguy Crusson** (00:19:42):
It lasted a few months. I was not part of the decision making team for shutting down HipChat. I was one of the product managers on the team leading one of the three pillars. I got brought in, I think it was a month or two, a month before it was announced for the team to go, "Hey, Tanguy, by the way, just so you know, HipChat is no more, and now your mission is to find a new mission for the team after that."

**Tanguy Crusson** (00:20:11):
We basically spend the next two, three months trying to make sure that the squads were created to fully own what they do there, to make sure that they're the ones talking to the customers, they're the other ones trying to come up with strategies, trying to come up with solutions and everything in that area. As long as it was people interacting with Atlassian products on other surfaces, everything was fair game, and so there was a lot of ups and downs and everything. I think it took about two, three months before we got back to a new rhythm. And some people, when we talk about it, were still scarred by it basically.

**Lenny Rachitsky** (00:20:49):
What are some lessons from that experience?

**Tanguy Crusson** (00:20:51):
Yeah, so the main one that I personally got from this, and it's back to the hypothesis that you talked about, which we have all these successful products, we can expand into this one which is, and I quote it, but it's just myself, don't eat your own bullshit, which is a mix of two things. We've got a company value that says open company, no bullshit. So we need to be able to talk about the things like they are, and we don't try to make things sound smarter than they are. We don't try to hide the truth, we go after that truth, and we don't hide stuff from each other. We share with everyone, we are open by default. So that's one of the values and we do a lot of dogfooding, so eat your own dog food. We do test our own software a lot.

**Tanguy Crusson** (00:21:36):
I've noticed that sometimes there are things that we do while we tend to believe stuff because it's worked for us before, and we have this assumption that it's going to keep working for us forever. The founders keep telling us what took us here won't take us there. That's a thing we keep hearing over and over again. But it's very easy for teams when they see success of something to think that it's successful because of X, but X is not validated. That's where we go back to the topic we've got today, which is why is doing this in a successful company harder sometimes. Well, Atlassian was successful with the playbook, and the playbook was we've got people in developers or tech or IT. They choose Atlassian apps, they love them. They start to recommend them to people in the business, and we start to see adoption, bottom-up adoption across the company before people decide to standardize on Atlassian.

**Tanguy Crusson** (00:22:43):
We made the bet that we can apply this playbook to this market, which is basically we can, from people to use Jira, introduce HipChat, and then people will go into HipChat first in tech teams, and then it will expand into business teams, and it'll go world to world basically from that. The thing is we didn't, in my opinion, do enough to validate that assumption early enough. We did a lot of work, a lot of work even on other things, even when faced with signals that this might not work. I do remember talking with a lot of customers who were like, "Well, we've got, the IT is on HipChat, but the business prefer Slack." And then we started to see those businesses choosing Slack, which is the, initially it was like the developers try things and they like it and then everyone starts to adopt. In that case, the Slack managed to create a very strong fund base in roles that were not tech and IT.

**Tanguy Crusson** (00:23:48):
It was the moment where the consumerization of apps, that trend was starting to get really high. Slack really rode that and they focused everything in their experience to catch that. They gamified onboarding, they focused a lot more on the look and feel. They try to make it pleasant, modern, functional to use. There's a lot of stuff that we learned since then from what they did, we had missed that part. The part that I took personally from that is that there's a lot of assumptions in what made us successful, it doesn't mean that it's going to work.

**Lenny Rachitsky** (00:24:23):
Just I understand what you're saying, which is really interesting that Atlassian was really successful selling basically to the buyer within the org, the IT team because they had everything they needed. They checked all the checkboxes, but it turned out in the Slack case, it was the users that ended up having the most influence over what tool they'd opted.

**Tanguy Crusson** (00:24:42):
I'd actually phrase it more as both were going after the users. Atlassian was going after the users in tech teams, Slack was going after the users in business teams. And in both cases, what happened was a bottom-up adoption. The people on the other side, the business would prefer Slack, the developers, they prefer the HipChat. We did a lot of work in the streams I was working on. We're integrating with every developer tooling out there to make sure that every tool that they use goes into HipChat and from HipChat back to those tools. And basically, they can do a lot of work by seeing an activity stream in HipChat. Business? Eh, not so excited by this. Emojis, a lot of other things that may at some point I remember we were thinking those things were trivial. No, they were not trivial. It was just a different approach for using the tool by a different set of users that we did not talk enough to.

**Lenny Rachitsky** (00:25:36):
So is the lesson here, don't underestimate the challenge you'll have convincing a new segment to buy your thing. You may think they're close or similar, but they're probably not.

**Tanguy Crusson** (00:25:46):
Yeah, that's one of them. The other one is what took you here is not going to take you there. And so go back and try to explain why you are successful today, and then if you think you can use the same thing on the next thing, find ways to validate it, find ways to test it. Don't just go and build on those assumptions. That's the main thing I got out of this ordeal basically for the stuff I did after.

**Lenny Rachitsky** (00:26:15):
How would you do that? How would you go about and test it? Is it use research? Is it the PMs talking to potential users? What would you have done there?

**Tanguy Crusson** (00:26:22):
For example, when we started Jira for the Discovery, which is, so maybe I should introduce this for a second. It's a product for product managers, which is mainly used for prioritization and roadmap. People use Jira to plan and track work when it's committed. We wanted to create a space before that so people debate priorities with everyone that should be involved in that prioritization process, whether it be the developers, designers, so people in the product team or people outside of it, customer success, salespeople, support, leadership and so on and so forth. When we started, that we thought, okay, the product managers are already in Jira. You know what? We can reach them. So we create the tool, and then we'll distribute it from Jira. We could have gone down the path of building that and then started to start to distribute it.

**Tanguy Crusson** (00:27:15):
Instead, we did things like before we brought a single line of code, put an ad inside a Jira newsletter going, "Hey, we've got this thing for product managers coming up." And then we had a website that before we had any line of code written that said, "Hey, product managers, your job is hard. We want to help, put your name here if you want to join us on the journey," that kind of thing. And that's when we saw, I think it was in two weeks, we got more than 3000 signups to that waitlist. We're like, "Okay, cool. Validation of demand." We are talking to people who are interested and we can reach them. That's one examples of the things that I tried later, just to make sure that we validate the hypothesis that we've got much earlier on in the game basically, and not once it's too late.

**Lenny Rachitsky** (00:28:06):
Awesome. That's an awesome, very tactical example.

**Tanguy Crusson** (00:28:09):
Yeah, most of those are, none of what I'm going to talk about today is revolutionary. A lot of it is just trying to apply, asking the right question at the right time, and trying to go by whatever means to answer it really.

**Lenny Rachitsky** (00:28:22):
Any other lessons from the HipChat experience before we shift to a different product?

**Tanguy Crusson** (00:28:26):
I've got two, I'm going to do them quickly. The first one is competitive myopia, don't fall for it. At some point, the Slack was really gaining round and gaining round and capturing more of the mindshare. And everyone on Twitter was always loving them. Even when they had outrages, they were getting congratulated. I was like, "This is working mad." But the love was so strong, and the way we tended to revert back is to our functional side of the brain going, okay, we just need this one more feature. We just need this one more feature, we just need this one more feature. And we ended up reacting to whatever.

**Tanguy Crusson** (00:29:00):
... more feature. We just need this one more feature. And we ended up reacting to whatever the competitor was doing, which I think is really, really bad because that's when we lost basically what made HipChat successful so far, which is to serve some users really well. And instead we ended up fast following based on what the competitor was doing, which is super bad because your competitor, if you think of what they do as an iceberg, the top side, what comes out of the water is what they've shipped in terms of features, but it's based on all this stuff that they've built in terms of research and understanding of their customer base and everything else. And so you're just seeing the manifestation of what they were thinking maybe a year ago, based on what they're shipping now. But we got there.

**Tanguy Crusson** (00:29:44):
And now whenever I work, I tend to try and ignore competition other than watching every three months or so, seeing what came out, if there's anything we should be worried about, afraid of, stuff like that. But really just try to disconnect all the creative process and the research process from what competitors do, because you can't compare. The market is huge. There are hundreds of thousands of companies out there. Not everyone has the same needs. We serve a particular set of segments. We would do better learning from them to then expand to the others than watching what competition is doing.

**Lenny Rachitsky** (00:30:21):
And this is advice you give to your teams, just ignore the competition, maybe pay attention at big announcements and things like that?

**Tanguy Crusson** (00:30:26):
We always see in the Slack Channels team sharing, okay, they just did this with AI, they just did that. So it keeps coming up, and so we often have discussions to go back, to okay, let's watch again the user interviews that we did over the past three weeks. Let's watch them all together now and remember who we are building this for. So there's a lot of trying to anchor back on what we know and how, basically building our own journey on it. And I think it's much richer for everyone to be involved.

**Lenny Rachitsky** (00:30:58):
I love that. So you're finding that when there's a big announcement and everyone's like, "Oh my God, look what Slack's doing," or "Look what this company's doing." It's like, "Okay, now let's spend a little time reminding ourselves what our customers have been asking us to do and let's watch a couple of user interviews."

**Tanguy Crusson** (00:31:11):
And even when there is something that competitors do that is right, remember, we're playing the long run and we don't always need to be first and shinier. We need to make sure that people have a problem, we solve this problem. They tell us, we solve this problem for them. They are delighted when we solve these problems for them. And so that's the stuff we should be obsessing about.

**Lenny Rachitsky** (00:31:32):
I love that. And you said you had one more lesson from this experience.

**Tanguy Crusson** (00:31:37):
Yeah, the last one, startups have the benefit of starving. Right? We're a big company, we can throw a lot of resources at something that we're excited about. So this notion of we rebuild the HipChat, was coupled with we rebuild the HipChat and we'll do this on a new platform, which is microservices and everything that we built can be reused across all the other products. So the chat text box that you've got, it's an editor that can be open full screen and it's a Confluence editor with everything that you can do there. It's built as a platform component, which is amazing when the platform is there when you start building the product. Where it's really difficult is when you try to do the two at the same time. So I think that part, if I were to work on HipChat again and say I was leading that thing, that's the part I would go, okay, we need to win the problem space first, and if the platform is there, let's use it. If it's not there, we'll hack it, test it, iterate on it with customers, and then whatever is good there, let's platformize it later.

**Tanguy Crusson** (00:32:44):
But that's where you see what makes us super powerful as a bigger company, can also slow us down and make us focus on the wrong assumptions. So in that case, I think we thought we will win. Interestingly, I think we were convinced that we had a great shot at this market. And at the same time we thought that we could tackle the rewrite and we could tackle the platformization. All these things were necessary, but all of them at the same time was probably a bit too much to bite. Now I'm saying that, but today the editor you see in Confluence started with what we did in HipChat back then. So I would say that in terms of code, purely in terms of code, 70% of what we wrote for HipChat is probably still in the Atlassian platform today. But for a new bet, local Optima, that was really bad.

**Lenny Rachitsky** (00:33:37):
Yeah. Just thinking about the fact that Atlassian could have had this $30 billion business if this worked out, and I could see why people would be frustrated that it didn't work out. So thank you for sharing that story. Let's talk about Statuspage, another journey that you were a part of, that also didn't quite work out the way folks had hoped. Our therapy session continues. Talk about what that product was and what happened there.

**Tanguy Crusson** (00:34:04):
Yeah, so this one is actually a success story, but became a success story after I was gone [inaudible 00:34:08]

**Lenny Rachitsky** (00:34:10):
Okay.

**Tanguy Crusson** (00:34:10):
That's more like a story of big companies can play the long run and for you individually inside that process, it might look like a loss and you might feel like you're going nowhere, yet the company stays on the opportunity for long enough to make it happen. So what we're going to talk about here are my own challenges working through it for something that ended up being very successful in the end, but I felt as a failure personally back then. So Statuspage at some point... So Jira is used by developers, right? And back then, I think it was back in 2016 or even before that, 2015, everyone was moving to the cloud, everyone was adopting DevOps, you build it, you run it. So basically developers would implement the software and then they would put it to production. And after they put it to production, they don't throw it over the wall to operations people. It's the same developers who operate the software in production. They go on call, yada yada.

So back then I did market research to see whether Atlassian should play there, whether we had a crack at going after all the jobs around IT operations. So Jira was basically Jira software to build software. Could we have Jira for operations? So for operating this software. And so I did market research, found a few companies that were doing super interesting things there, like [inaudible 00:35:37], Opsgenie, New Relic. BigPanda was a small startup doing lots of cool stuff there, and Statuspage. Now I discovered Statuspage and found their offering super interesting, in that Atlassian is not an operations... We don't really build super deep operations tooling, what we focus on a lot is the collaborative aspects around everything. And when I was watching teams in incidents, I realized that there's a lot of chicken without a head syndrome, headless chicken, people running around like bunch of headless chicken.

**Tanguy Crusson** (00:36:14):
Shit hits the fan, and then what you see is teams just scrambling and everything gets mixed up all together in trying to fix the problem straight away, but at the same time questioning what happened, arguing over why we got there. Your boss is pinging you to go, "Hey, what's going on? I've been hearing that the app is down. We're losing money." Customers are emailing you and asking you what's going... Your support channels get blown up. Sales people are worried because their customers are calling them. So basically, it ends up being a super stressful experience for everyone.

**Tanguy Crusson** (00:36:48):
And what Statuspage was offering is something seemingly super simple, which is, well, what you should have is a status page for your services and you tell your customers about it and you can subscribe to your status page. Over there, you've got your services, and for those services you can publish an incident whenever there is one, and your customers will be notified, which means that they're not going to get in touch with support because they know you're on it. It's going to build trust with them because basically you are open in your communication with them. They're more likely to empathize with your position and be supportive as opposed to, "Oh, that stuff is done again." So there was just so many benefits of that.

**Lenny Rachitsky** (00:37:31):
I'm going to share a quick story while you're on this topic.

**Tanguy Crusson** (00:37:34):
Yeah, of course.

**Lenny Rachitsky** (00:37:35):
Funny enough, a decade ago, I used to work at a website performance monitoring company and I started a blog called Transparent Uptime. And my whole blog was about the power of being transparent about being down, telling people the status of things are broken right now, here's when things are going to return. It was a whole thing I was really obsessed with, and I was deep into this space. So when I saw Statuspage back in the day and Atlassian working, I was like, "I love this." And I actually chatted with the founders a bit, because they were fans of that work I was doing back in the day. Completely unrelated to anything else I've done in my life. But I was really passionate about this very strange topic and I love that companies are embracing it.

**Tanguy Crusson** (00:38:21):
I really loved diving deep into it for a few years, it's an amazing topic. And so anyway, there's so many fascinating things about this particular domain, but back then... So find Statuspage and we invited a few of those companies to work with us for a week to go, hey, so we're at Atlassian, we're basically the collaboration hub for everything that happens for developing teams. What would an experience look like that puts everything together and where [inaudible 00:38:48] could actually help you get the right information to the right team so they can act on it?

**Tanguy Crusson** (00:38:52):
And so we did a week of hackathon in San Francisco all together. So people from New Relic, Statuspage and a few other companies. And out of that came really interesting concepts and there was really something there and I was like, "Okay, I should start to work on a business case for Atlassian for basically IT tool/operations." Now, big companies like Atlassian, we've got money. So in every strategy that we've got, we've got cash in the bank, we always look at should we build, should we buy, should we partner? Acquisitions can be really powerful to accelerate you. We've got quite a few success stories there. Can't remember how many we did, but Trello is one of the good examples of that, for example. So we decided to buy Statuspage and I was running the integration of the Statuspage business inside the Atlassian business.

**Lenny Rachitsky** (00:39:49):
Thanks for sharing all that context. What are some of the things that you learned from going through this experience? It sounds like basically it was really painful when you were a part of it and then it ended up being really successful. What are some lessons from the pain?

**Tanguy Crusson** (00:40:02):
My learnings from it were on the acquisition side. So big company, we've got cash, we can buy a company, it will make us go faster, is not always the case. In my case, there were quite a few things that were not as easy as I would've thought. The first one is the culture shock of a startup that joins your company. So imagine you're a startup, you've got, I don't know, 20, 30 staff or something and things are going well, and you are in full control of your destiny. And then a company buys you to accelerate you, but then you stop owning all the decisions. So the CEO, maybe you become a product person. The person who was running GTM but was also doing a bunch of product stuff, and was also doing a bunch of maybe engineering stuff, all of a sudden is just working in marketing.

**Tanguy Crusson** (00:40:52):
There are decisions that are made above your head. For example, portfolio fit, which should be part of your product, which is things that should be used from the platform that we've got. So there's a lot of decisions that we're able to make on the day-to-day basis, that start to escape you. Big companies look much further out in the future. So Atlassian would look at the long game. And so I remember with Statuspage when they first joined, we asked about the roadmaps and they were like, well, for the next three months we're working on that and for the following three months we're thinking about potentially X, Y or Z. And so when we're like, "Okay, so what's the three-year plan?" They're like, "What do you mean the three-year plan? I don't know, we'll survive, I guess." Which is what startups do. And they were very penciled ideas about the future, but not to the extent of what a big company would expect. And so that's a really big culture shock.

**Tanguy Crusson** (00:41:53):
And what you end up with as well, and that's for companies who are looking to get acquired out there or buying other companies, before, you had a startup and everyone was one team, depending on how the buying company is organized, you might land with silos from within your team. So the way Atlassian is organized is like many Atlassian companies, we've got a product organization, we've got an engineering organization, we've got a marketing organization, design organization, and they each roll up to a different leader which may then roll up to the same person, but still by and large different organizations that are then assembled into squads and those squads operate together. But there are rituals that are part of the squad and there are rituals that ladder up to where you are in terms of craft. So I do remember how daunting it was for the Statuspage team when they joined, to understand how to navigate that.

**Tanguy Crusson** (00:42:47):
If I want to hire a new designer, I'm not talking to the Statuspage CEO anymore, I need to talk to the head of design for this area, which has pretty much nothing to do with the Statuspage business up until the acquisition. So that is the things that people told me when I started working on the integration, which is, hey, remember, you don't know yet, but integrations are mostly about people. They're not about technology as much or product vision. All of that stuff is the easy stuff. The hard part is the people. And I didn't quite understand at first and then I really got it by the end of it.

**Tanguy Crusson** (00:43:27):
Because what we tell those companies is we can accelerate by buying, but in reality they are going to be faced with more internal processes around how they manage staff, performance reviews, this concept of engineering allocation, revenue forecasts, OKRs, long-term roadmaps, all that stuff comes in very new to them. So one part of the company top-down says, we bought you because you are successful, keep doing what you're doing. While many other teams without meaning to, basically end up constantly interacting so that the right processes are followed, so that the right things are done.

**Lenny Rachitsky** (00:44:03):
That's a really interesting point, that one group is keep doing what you're doing. We're going to leave you alone, you're the experts. And then other people that are on the ground actually building it are like, "Hey, build with this component. Hey, we need this process, we need this document."

**Tanguy Crusson** (00:44:15):
And it's the things that you used to be able to focus 90% of your time working on your product, and all of a sudden all of that stuff may seem parasitical but comes in and interrupts you all the time. And often the new joiners, they don't know that they basically are not only being acquired, they've been hired by the company. So they basically are joining a different company with different sets of rituals, with a different culture. All of that is very different, basically. It's not going to be the same for every acquisition. Like I said, we had some acquisitions that were great. Statuspage ended up being a huge success inside Atlassian, but when I was there, I basically worked through the difficult parts of it, where I was like, "It's not as simple as people may think." So one warning, if you're planning to do acquisitions, make sure you factor all of that in and think about the integration plans to compensate for these aspects. So you don't expect the business to join and keep running at exactly the same pace, because going to be a big slowdown before it accelerates again.

**Lenny Rachitsky** (00:45:17):
So maybe as a last question here, is just say you were to do an acquisition again and I don't know if you've gone through more, what's one thing you would change? What's one thing you'd recommend of let's make sure to do this thing very differently?

**Tanguy Crusson** (00:45:27):
One aspect that I'm going to talk about to then go there, but one aspect we didn't talk about which is we bought a product, how does that product fit with the rest? And so we had different types of acquisitions that we did. One is we buy the company and we keep the product running and then we try to integrate it with our tech stack. And then the other acquisition is we buy the company and then we kind of rebuild on our platform, or we buy with this huge synergy with our platform. And so we call that the frankenstack, otherwise. Which is, you get one tech stack here, one tech stack there and they can't quite talk to each other, identity is different, integrating is different. And so it looks like a patchwork of products and that's not what our customers want from us.

**Tanguy Crusson** (00:46:09):
So the next time I try personally, I would treat it like hiring over treating it like buying business only. So there would be a huge component which is to both educate and tease out what it means to actually hire the team inside the company. At the same time I'm saying that because I don't want to do a big one. The next one I want to do is relatively small. Find a company that has amazing product that we can bring in as a tech-in, shut down the product, rebuild it on our platform and so it's basically the equivalent of an acqui-hire, because basically what we'll be buying is the acceleration of our roadmap.

**Tanguy Crusson** (00:46:51):
We could try and form a team to do what they did, but they've been successful so they know what they're doing. We could probably get there one year faster. What does that mean for our revenue at the scale of Atlassian, if we can enter a market one year earlier? It's probably going to pay the acquisition back on its own. So my learnings from it were basically that it needs to be treated like hiring and what I would like to do next time is more doing it like that, basically.

**Lenny Rachitsky** (00:47:24):
What about in the case of HipChat, where it feels like it was a mistake to rebuild a thing. Is there for this kind of startup, don't rebuild for this kind of startup? Start again. Do you have a thought of how you separate those two?

**Tanguy Crusson** (00:47:36):
There's actually a big difference. There's a big difference. Which is in one case what you try to do is.... So when you rebuild, you've got a successful business, you've got hundreds of thousands of customers, for example, and you're trying to rebuild the same thing or a different thing, but for the same customers that have got expectations about your current product. In the other one is you buy a company that's got some traction, not too much, so you can shut down the business and then rebuild on your platform to reach your customer base. So it's not the same as trying to rebuild the plane mid flight, it's delaying takeoff. It's like, "Yeah, we did a trial run, the plane landed. Okay, cool. Switch to another plane, takeoff again."

**Lenny Rachitsky** (00:48:17):
Got it. I love that. Any other key insights and lessons from this experience before we get to your product discovery?

**Tanguy Crusson** (00:48:25):
One last one and then I'm going to stop with the therapy session, thank you very much for offering.

**Lenny Rachitsky** (00:48:30):
No, no, we got to keep it going. I got to rack up the bill on this therapy session.

**Tanguy Crusson** (00:48:35):
Which is, remember I mentioned I was working on a business case for... Basically going bigger in IT operations. And so there was as Statuspage as part of it, but there was a lot of stuff that I wanted to be able to do inside Jira and a whole bunch of other products to basically go big in that area, IT operations, before Jira service management, which is a very successful product we've got around that. Before it was really entering that part of the market. Everyone was excited. It was before we had an incubator internally. And so I was trying to pitch it like let's build a new product that's centered around that thing. It's on Jira and it integrates with these tools that we discussed and we can put in Statuspage there and that's actually how we could accelerate them as well, and so on and so forth. Everyone was excited, thought it made sense, lots of encouragement. I pitched it to every level of the organization from business leaders, to the CTO that we had at the time, to the CEOs. No one said no, no one said yes. For months.

**Tanguy Crusson** (00:49:44):
For months, I was in this limbo of, I think everyone's excited about this, everyone wants this to happen, but it's not happening. And so I remember talking with my boss at the time going, what's going on? When do I stop pushing? Because at some point I'm sure I'm going to start pissing people off. And he was like, "Well, basically when you lose the passion for it. Keep going up until you feel like it's not worth pushing anymore." And I remember looking at this advice and going, wow, that was not helpful at all, based on the situation that I was in. But basically at some point I basically gave up. What happens though, and I understood that after because the company ended up going there just a year later, was that I misread the appetite and sense of urgency around that topic and the fact that Atlassian being Atlassian, we invest in so many markets, we have many opportunities like this that sit on a shelf.

Someone did the analysis, someone created a business case, that thing makes sense. There may not be a trigger for the why now. So we need a very strong trigger for why now to go after it. And I did not do a good enough job at articulating this. Why now? Why do we have to do this now versus in a year's time, in two years time? And the next team that came in afterwards did a much better job at that. But for me, that was a great learning, which is great work can get parked and [inaudible 00:51:20]. And yeah, that's just what happens, which is because we have so many opportunities and there's many companies out there that are probably faced with that, doesn't mean that we have to go after all of them. But it does make sense to explore them, and then decide when to pull the trigger, and that rationale for the sense of urgency needs to be there. It needs to be beautiful to the business days.

**Lenny Rachitsky** (00:51:42):
This reminds me of my chat with Mihika, who does similar work at Figma where she works a lot of zero to one stuff. And she described it as your job is to keep the flame alive and help it spread throughout the entire business if you're trying to get everyone on board with a new idea. And I like this very tactical piece of advice you're sharing here of how to do that, is make it clear why this is.... I think of it as why is it perishable? Why is this opportunity perishable? Why is it going to disappear if we don't act on it now? And you could think of it as why do we have to do this now? It's not just like "This is a huge opportunity." But we also need to do it right now to give people motivation.

**Tanguy Crusson** (00:52:15):
Yeah, that was a huge learning for me. I wasted months on it, but like with every failure, learnings came out of it in the painful way. So product managers are often biased towards action, or at least that's my case. I want to go and do stuff and build stuff, and try stuff with customers. And so being idle, waiting for a confirmation is not a great spot to be, but sometimes you need to recognize when you're there and it's good to step back.

**Lenny Rachitsky** (00:52:40):
**Tanguy Crusson** (00:55:12):
No, that seems like a good one. The main one I'm getting also out of this, is if you try to start new things, it's going to be coming from your drive and your passion, and that's what pushes stuff forward. So don't give up. Because I try really hard before getting to one that worked. So I guess that's probably a testament for it's possible.

**Lenny Rachitsky** (00:55:36):
And a testament to your grit and desire to make something work. So on that note, let's talk about your product discovery. I know this is a success at this point. I know there was also a lot of pain that went into this and things that didn't work. So I'd love to hear both sides of it, just like what was hard about getting this off the ground and then also just what worked, what allowed you to make this work? So start wherever you want to start.

**Tanguy Crusson** (00:56:00):
Yeah, cool. So let's start with the good stuff before we go back into therapy. Some of the good stuff here is Atlassian at that point had recognized we are innovating in our big successful products all by doing acquisitions, we have to correct that and start building new products ourselves as well. And so there was a huge push from the founders to go, "Hey, we need to restart that." Out of it came Point A, which was an internal incubator program that was meant to fix that. And the way they framed it was that innovation is like a muscle. Unless you exercise it, it becomes weak, and what we have to do now is to work on it again. And so out of that thing, Point A and Jira Product Discovery was one of the... I think it was one of the 100 pitches that went through that innovation program. There were 100 pitches and out of it came out three products that basically went through all the different stages of it. And so it started with Jira Product Discovery was actually made possible because of that and because we're inside Atlassian. So we started with a lot of, I could take time to focus on this stuff with nothing else to do it. It was a full-time job, because of this incubator. I was able to form a team easier because there was budget allocated. I was able to form a team that was not worried about losing their job because the program was made so that technically speaking, you would borrow people from other departments. If that thing doesn't work out, they go back to your department. So there's no fear of losing your job, basically.

**Tanguy Crusson** (00:57:34):
We were able to tap into all the research that was done by our research and insights team internally. We were able to have the corporate development team working with us. I met with probably 20 companies that played in things around product management before forming a view that, hey, maybe we should play there. And all those teams are willing to talk to us because Atlassian is a big player in this market. And so there's always the opportunity of integrating, being bought, partnering that can...

**Tanguy Crusson** (00:58:00):
The opportunity of integrating, being bought, partnering, that kind of stuff. I was able to meet with analysts to say, "Hey, so what do you think about the product management market?"

**Lenny Rachitsky** (00:58:11):
This was all part of the Point A structure?

**Tanguy Crusson** (00:58:14):
So the Point A structure, not all of it was formalized in Point A, remember Point A back then was created alongside the first bets that went through it, and ours was one bet as part of that. So we forged the path for all the ones that came afterwards. But basically, it gave us the crags to go in and ask for help from everyone, and everyone knew it was important. Because everyone knew the company priorities and the new products were top company priority. And so Atlassian, playing the long game, had decided that it was okay to invest in these bets and to reassess them into every three to six months to understand whether we should put more chips in it.

**Tanguy Crusson** (00:58:52):
And so the psychological safety of everyone's job was safe, coupled with access to all the resources from the company. That part was just invaluable to the success of what JPD is today.

**Tanguy Crusson** (00:59:03):
So to give you a bit of context, Jira Product Discovery started four years ago with some research. I was alone back then, and then we were three. The first line of code was written three years before we launched officially, as generally available. Which means that for three years we were dogfooding alpha or beta and able to do that with the full support of the company. So when I mention the long game, I mean it. It's something that's very hard to get in most companies out there.

**Tanguy Crusson** (00:59:36):
And when people ask me about how to stop incubators, it's like think about it with when you're going to get your dollars back and forget about it for a while. What you need to see is how the teams are answering the right questions that they ask along the way, and seeing whether you are still excited about the bets as they do that.

Anyway, so we launched a year ago. Fast-forward to today, we've got 8,000 customers, amazing CSAT, great traction. It's one of the fastest growing products in Atlassian history, which is great. So what was hard though, the first one was reminding everyone that failure is the most likely outcome. And I will die on that hill to explain to people when they want to stop things internally, frame it like that, remind everyone. There's a [inaudible 01:00:28] 70% chance, [inaudible 01:00:30] completely pulled out of thin air that whatever you're working on is not going to exist in six months.

**Tanguy Crusson** (01:00:35):
We're trying to launch a new product, enter a new market. Our goal is to get to $100 million businesses. So there's not that many of them out there. We have tried and we have failed. And a few of them are Atlassian. And so remember that, and it's super important to remember that because otherwise the company has a tendency to over invest, not the company top-down, parts of the company have the tendency to come and try to help.

**Tanguy Crusson** (01:01:07):
So for example, "Here, we want to build this." "Oh, if you want we could change this service to be able to XYZ for you." "No, we are a bet, which is seven people. Let's not drag the rest of the company into it. The appetite that the company has right now is these seven people. We'll see what we can do with these seven people," was what I was telling everyone.

**Tanguy Crusson** (01:01:26):
The reason I was saying that is that, otherwise, yes, you get the help, but the help always comes with condition and the condition is usually things slow down. So what we try to do is remind everyone, things are going to fail, so that we could basically buy the opportunity to hack shit together that is not going to scale, that is not going to respect our design guidelines, that is not going to fit with the JIRA target architecture. But we're going to test this with customers and see if the concepts make sense, if the prototypes make sense, whether they get value out of those before we tell you, "Hey, you know what? That thing is a thing and by the way, now we're a proper business. We should build that thing into the platform."

**Lenny Rachitsky** (01:02:08):
This is really interesting because it's counterintuitive to think that you should position your new bets as, this is most likely going to fail. This is just the thing we're trying, don't worry, don't commit too much this yet, don't worry about giving us all these resources. Why do you think that's so important? Because I don't think most companies position new incubations that way. Why do you think that's so effective and more effective?

**Tanguy Crusson** (01:02:29):
Yeah. So the thing that we're trying to do when starting new products is to basically emulate a startup in an environment that is not hungry, is not starving. And so you need to create scarcity. What I wanted with my team is to make sure that they feel the urgency. That thing needs to move. I also needed the rest of the company to go away, so we could get the autonomy to test the things that we needed to know whether this thing is even going to work or not.

**Tanguy Crusson** (01:02:57):
We could not go into a planning session for the next six months to negotiate something with a platform service so we can build a feature to then test with users. I said, "Now, we're rebuilding this component and we're testing this with customers next week. It's not perfect. It's not perfect." And so that helped us a lot, but otherwise there's always this tendency of the process that works for everything else is going to work for this and we do need to keep reminding them, "Hey, we might not exist in six months. Do you really care that much about this process right now? The product might not exist anymore." The process goes away usually.

**Lenny Rachitsky** (01:03:29):
So it's basically a trick to keep everyone else within the org away and not worry about what you're building? Because you just tell them, "Don't worry, this is not going to work out. We're just going to try this thing just to see." So it's not for your team to feel like, "This is probably not going to work out." I imagine the team is like, "Oh, we got to make this work. It's such a good idea." It's more as a trick to keep the org from swallowing you up and pushing you around?

**Tanguy Crusson** (01:03:52):
So there's a part of that, but there's also really a need from... We need to respect Atlassian's dollars here, and if we don't know whether this thing is going to work... I do not want to drag a team of 50 people into this. I want to know that this thing is worth the investment of a team of 50 people. So it's a bit of both, actually. Now, it's of course, easier said than done. And so that's where, again, Point A helped. We had four stages called Wonder, Explore, Make and Impact, where in the first stage it was all about proving that there was a problem area we could go into, there was a market.

We could answer very clearly, articulate why Atlassian should move there. We could articulate why now that stuff that [inaudible 01:04:35] struggled with before, and have enough data to validate all those claims. Explore was about exploring solutions, which doesn't mean build it and throw it out there and see what sticks. It's about if you get a bunch of customers raising a problem, can you get them to play back to the solution, [inaudible 01:04:53] address that problem?

**Tanguy Crusson** (01:04:54):
And so in the case of Jira Product Discovery, because we were not building, we didn't need any new technology, it was mainly new UX and new workflows, we basically validated a lot of that with Figma in dozens of Zooms. But it's basically coming back saying, "Here's how those companies are framing it. Here's their problems, here's how this thing would be solving it for them."

So that's part of Explore, which is validating that it's worth investing in in terms of solution. We don't only have the right problem, we've got the right solutions. Then Make is about making it happen in stages, starting with an alpha, then a beta, and then going out there. And Impact is that stuff is actually ready to go [inaudible 01:05:37]. And now let's see the impact it has on Atlassian's business and keep monitoring it from there.

And it turns into a real business from that point onwards. But everyone at Atlassian knew these four stages, Wonder, Explore, Make, Impact. Whenever we were talking with teams, we were telling them we're currently in Explore. And we started doing that with the full bet itself. Then we started doing that to talk about the different features that we were working on or problem areas we were going after. Which means that now every time we go into conversation with other teams and we'll mention, "We're in Wonder," or, "We're in Explore," they know what to expect. When we go to someone in the leadership team and we say, "We want to go from Explore to Make," they know they're going to [inaudible 01:06:22] because they need developers now.

**Tanguy Crusson** (01:06:23):
So all that vocabulary and clear expectations set for every stage of the process really helped us to facilitate all the conversations that we had with everyone in the organization. And really protected us again from all those, basically, teams that felt like they had to chime in. Now, we're in Explore, we don't have anything ready that's been validated. Let's not have opinions about how the architecture is done before we have validated that customers want something.

**Lenny Rachitsky** (01:06:52):
This is super cool. I feel like we could do a whole podcast just on the structure of Point A and how you all do this. But just one question, what does the gate look like when you move from Explore to Make, Make to Impact? Is there a group of people that sit in a room and decide thumbs up, thumbs down? How does that decision work?

**Tanguy Crusson** (01:07:08):
So we basically write a six pager that looks at all the different aspects of all the questions that we're going to answer. And then we are in a meeting with the Point A stakeholders and the founders of Atlassian. And everyone reads that page for about 15 minutes and then question, answers, comments, and [inaudible 01:07:31] of that, by the end of this meeting, we know whether we are clear to go to the next stage.

**Tanguy Crusson** (01:07:35):
We got booted back one time when we were like, "Hey, we're ready to go anywhere from alpha to beta as part of Make." And they're like, "No, you're not." And I was like, "No, we're not." And so we stayed and we basically got more time than what was initially allocated to us. But basically, the founders and the leadership of Point A as well as heads from the different lines of businesses at Atlassian were participating in those sessions, which-

**Lenny Rachitsky** (01:08:01):
That is super cool.

**Tanguy Crusson** (01:08:02):
Basically, visibility all the way up.

**Lenny Rachitsky** (01:08:05):
And they might also just decide, "Let's kill this thing, it's not working," at one of these meetings.

**Tanguy Crusson** (01:08:10):
So it might be, "Let's kill this thing," which happened to a number of bets that we did, or it might be, "Let's roll this thing into something else." So for example, our new whiteboards product. I say product, whiteboards feature part of Confluence initially came out of Point A. And was eventually rolled into Confluence instead because [inaudible 01:08:32] made more sense there.

**Lenny Rachitsky** (01:08:33):
That's so interesting. So you said there's 100 projects that went through Point A. So there's this funnel. Is there a meeting for all 100 of these that the founders go to for all these incubations or did they come join later down the funnel?

**Tanguy Crusson** (01:08:46):
Not the full 100 of them.

**Lenny Rachitsky** (01:08:47):
Okay, good.

**Tanguy Crusson** (01:08:50):
And I'm saying 100, it's over a few different quarters of teams coming in and [inaudible 01:08:53], but not for the initial stage of entering Point A.

**Lenny Rachitsky** (01:08:50):
I see.

**Tanguy Crusson** (01:08:58):
It's usually when they've been accepted.

**Lenny Rachitsky** (01:09:01):
I interrupted you and took us on a tangent, you were sharing essentially the things that went well and how this all came together.

**Tanguy Crusson** (01:09:08):
So failure as the most likely outcome. It's the one thing I would stand behind in everything because I've seen before what happens when we get too complacent with it's going to work. Lessons from the previous things I was talking about. So this one really key. Second one, this one is much harder, which is if you're starting something like this, your teams will need to break a lot of rules that are established. But they need to be able to do that without breaking the trust of everyone in the organization.

**Tanguy Crusson** (01:09:39):
The rules were created to support the business at the stage where it was successful, and it just so happens that they might not work for new bets. So the trick here for me has been to... The way I pictured it is, I've got a bunch of chips. Since I joined my class, I've been accumulating chips and those chips are-

**Lenny Rachitsky** (01:10:03):
Like social capital.

**Tanguy Crusson** (01:10:04):
Yeah. It's like trust I've built with the founders, with the different business leaders, with succeeding on stuff or failing and explaining why and trying to do better next time. And all that stuff gave me, like you said capital. I've got these chips and I decided on this bet, "You know what, I'm going to go all in." So I always said, "If it works, it works. If it doesn't work, I'm probably out of here, but I'm going to go all in."

**Tanguy Crusson** (01:10:27):
So if I see something that's not going to work, I'm going to say it. We're not going to do it. And so I knew I was going to put myself in tough conversations because people are here to protect things that need to be protected. They just don't make sense for the stuff I was working on. So one example, breaking rules without breaking trust where it was tricky.

**Tanguy Crusson** (01:10:48):
We have a lot of rules in a company like Atlassian, and this is how it works in engineering. I mean, engineers are the biggest part of our workforce. Basically, shit gets done because engineers work on it. And what I needed was to be able to hire the right team, only principal levels, people who have a lot of internal credits so that they can commit to any team's repo, no questions asked. People who are not looking for the next promotion, but they want to make a splash. And when that's not possible, I wanted to be able to hire contractors to fill in the gaps and stuff like that. And I was like, "A lot of the rules that I need to be able to break is basically in engineering." So I decided not to have an engineering leader in the team, and to do it myself.

**Tanguy Crusson** (01:11:36):
So I was the product leader and the engineering leader. I was technical enough to be able to have these conversations, but mainly I was just working with amazing engineers who just could self-drive themselves. So they were able to make changes in areas that were not owned by them. They were able to do changes that do not respect any of our standards. They were able to hack their way around rebuilding services and whatnot. We are now not in the position where we need to do stuff like that, but at that time I needed to take a position like that so we could actually go and move fast with basically the equivalent of being a startup inside Atlassian.

That's not comfortable to do stuff like that. And I would not recommend that in many environments. Atlassian was very forgiving throughout the whole thing. It doesn't mean that I didn't [inaudible 01:12:27] on that.

**Tanguy Crusson** (01:12:28):
That was not simple. For example, one of the rules is, at that time we didn't want to have a footprint in Europe back then for more engineering teams. It's different today, but back then it was like that. I was like, "Shit. I'm based in France, I'm trying to start this stuff. I don't want to move to the US or move back to Australia just for this right now." So I hired contractors, lots of contractors when we started, or not lots because we're not a big team, but contractors to build this stuff.

And again, contractors, they don't fall into the same rules as the rest of engineering staff. So basically, all the rules around you need to contribute to... For example, the engineering team could say, "[inaudible 01:13:10] to the next, leadership could say, "You need to invest 15% of your time in reliability."

And for us it's like, "We're not there yet. We don't even have a prototype out." Yeah. But that's the company rule, all right. Again, no engineering manager and contractors, boom, none of these rules applied. So it was people who were looking at it from the outside who were like, "Wow, dude, are you sure you're okay with all this?" And it felt super uncomfortable, but we have the support of leadership from it. It's just a tough transition for Atlassian from the, "We only invest in the big ones for acquisitions," to "Let's invest in [inaudible 01:13:46]."

**Lenny Rachitsky** (01:13:45):
This is a crazy story you're telling me. So you're leading this team, you hired a team of contractors to build this product. You're in a whole different country from the rest of Atlassian, basically. And the whole idea here was just to do stuff that wouldn't be necessarily allowed at Atlassian. They wouldn't let you work this way. And you found that to make the thing you needed to make, the thing that you were betting your career on, it sounded like, you're just going to be this pirate working on this thing in France and it worked out?

**Tanguy Crusson** (01:14:18):
So the Point A emoji and Atlassian is a [inaudible 01:14:24]. I was not the only one. There were quite a few of us working on new bets, basically operating like that. Each questioning different rules. The end goal was not to question the rules, the end goal was to get to the stuff that we needed to do, which is we just need to clean this space, to work with users to test prototypes up until it works and progressively get to, as I said, a product that's going to be enough to launch. So we never intended to break the rules, which is the things that we were going to choose the ones that were going to work to support us on this mission and say no to the others.

**Tanguy Crusson** (01:14:58):
You mentioned Europe. At the time, a lot of other Point A founders were struggling with the fact that they were operating from their mothership in Sydney because they're still with everyone else. You were talking about doing all this stuff, but remember that we've got this OKR thing, we've got this vision for GR that we're building, you need to participate in all this. And so I was in Europe going, "Fine, schedule it at your time."

**Tanguy Crusson** (01:15:28):
And I think a lot of teams were like, "We don't care enough about this test. They're telling us it's not going to exist in six months. I don't care enough about this to stay up late or wake up super early every day to disagree with them." And so there was a lot of the early success that we had in being able to move super fast that came from being so far, that people just did not engage to stop us.

**Tanguy Crusson** (01:15:58):
And that's why we were initially the group with the fastest speed. Then it was possible to institutionalize those things into Point A to then make it possible to do it from within Atlassian. But at first, we just needed to blaze our way through. So that's what we did.

**Lenny Rachitsky** (01:16:16):
So it sounds like one of the biggest lessons and things that work well for something like this is a super silo sort of team, as much as you can disconnect from the core business and let them just do what you think you need to do?

**Tanguy Crusson** (01:16:30):
You've interviewed Megan on the show before.

**Lenny Rachitsky** (01:16:30):
Yeah.

**Tanguy Crusson** (01:16:33):
And I listened again to the way she pitched Point A, and yes, that's exactly what came out of what she was saying. Which is, we gave the space for those teams to be able to do this with a lot of autonomy. And that was the outcome of all that work, basically, which is the program was then set up so new teams could do it and fitting within the mothership, basically.

**Lenny Rachitsky** (01:16:55):
And I think people hear that, like yeah, okay, of course. [inaudible 01:16:59] incubations, silo, separate, they do their own thing. People hear and they try to do that, but I imagine it's not actually what they need to do. And what I'm hearing is you went to a pretty far extreme of making that happen, not basically breaking the rules to allow for a silo to actually exist. And I love that. What else was key to the success of making this work out?

**Tanguy Crusson** (01:17:22):
So the one that I'm most passionate about is how we work with customers is very different in a super early stage bet versus to what you do in a very established product like Jira. So the first part is, how can we innovate in a way that doesn't fuck up existing customers? Jira, 120,000 customers, Atlassian, 300,000 customers. We can't just go in there, start experimenting, breaking a whole bunch of shit that millions of people experience and go, "What are you doing, Atlassian?" So what we needed is to create this area where we could experiment that's away from Jira while being inside Jira.

**Tanguy Crusson** (01:18:06):
That part was a bit tough. It's possible to do. In fact, I came across an article from Ben Weiss. No, sorry, Noah Weiss, it's from many years ago now. Where he was basically talking about innovating in a successful material product and talked about three stages of incubate, iterate, integrate. And as part of that he gave the examples of Instagram, Twitter, and Foursquare. Where basically he was explaining, at the beginning, for example, Instagram was a feed that was chronological. And then the team started to experiment with a popular tab that was on the side that was not integrated into the core of the product that everyone uses.

**Tanguy Crusson** (01:18:47):
They iterated on that for a while. That became the explore tab and then the explore tab became the main feed. The feed is not chronological anymore, it's based on your interests. And that part really resonated with me where I was like, "You know what? We're going to try to apply that to Jira, which is we're going to build it in Jira, but we're going to extract ourselves from a lot of the core components of the core base to rebuild the UX that would work for the audience we're going after."

**Tanguy Crusson** (01:19:17):
Our audience is product managers. They have no patience for spinners, things need to be visual. They need to be able to quickly move things around to visualize the potential options they've got on their roadmaps and stuff like that. It needs to be snappy, it needs to get out of the way, but also something that they can feel proud to present to their stakeholders to have discussions around that.

It can be bogged down into the details. It can go to very, very deep [inaudible 01:19:43]. It needs to be an area, a space where you feel like you can breathe and have creative conversations. And Jira's UI was not exactly known for that. And in fact, most of the product managers I talked to were like, "I don't want to do this in Jira. It's too strict, there's too many workflows, it's owned by IT," yada, yada. And so we said, "That's fine. We're going to experiment with an experience that's going to be detached from Jira still on the same platform."

**Tanguy Crusson** (01:20:09):
And that's what we did, basically. And so this concept of incubate by working on something on the site, iterate until you've got it right and then integrate it back into the main product is something I would definitely do again. We're currently in the middle of the integration phase for Jira product discovery.

**Lenny Rachitsky** (01:20:28):
So the lesson there is don't force yourself to be a part of the broader product, initially. First, figure out what it could be if it's its own thing, and then eventually you can integrate?

**Tanguy Crusson** (01:20:40):
It depends who you're doing it for and the programs that they've got. Don't feel limited by your platform to answer the core things that are necessary for your product to work, basically. So if the platform is good enough for us, if the UX was good enough for the product managers, we would not have done that. And we would've had a hard time justifying it, but because it was not, we basically gave ourselves the stamp to be able to do it. So still in don't fuck existing customers, something I read from a site, from Reforge that talk about the Safety Funnel.

**Tanguy Crusson** (01:21:16):
So they have this thing where the typical growth funnel goes from acquisition all the way to revenue and there's a whole bunch of different stages in between. Your goal is to maximize the number of people who go through this funnel successfully.

**Tanguy Crusson** (01:21:29):
And I was trying to explain to people what we were trying to do with Jira Product Discovery, and I was struggling to put a name on it. And it was we're going to work with a few, small number of customers up until it's right for them and then we're going to expose it to progressively more people. And I know it's very common sense, but that's basically what we decided to do instead of the Atlassian way, which was more, "Hey, we measure our success based on..." For example, at that time, I think it was still before all those projects, "... monthly active users." If that was a measure of success, we would've been pushed very quickly to go and expose it to as many people as we could. We didn't want to do that because if they would have a bad experience, it would've been very hard to claim them back afterwards.

**Tanguy Crusson** (01:22:11):
So someone in Reforge put the name on Safety Funnel. So the Safety Funnel is amazing. People don't understand that. You basically put a hard stop and you limit the number of people who had bad experiences. And you do that for a while, up until you can prove it's amazing and then you invite more people. So we did a lot of that. So we basically created that pocket away from Jira to reimagine what Jira could be for product managers. And we only exposed that to a very small number of customers at first. So that's don't fuck existing customers' first principle.

**Lenny Rachitsky** (01:22:45):
And the reason that's important, just to put a point there, is the business will start to get upset if you're making many customers upset.

**Tanguy Crusson** (01:22:53):
That would've been it if we had triggered an incident that brought down Jira for millions of users. And first time might have been okay. I mean, by the third time we would've been asked to pack up and go home, I think.

**Lenny Rachitsky** (01:23:05):
Got it. So the advice there is just limit how many people get exposed to your very early product, even if it's going to hurt your numbers. You don't want to cause people to be like, "What the hell are you doing over there, man? [inaudible 01:23:17]."

**Tanguy Crusson** (01:23:16):
So [inaudible 01:23:17] your numbers is now the interesting one. So how do you frame success and how do you define metrics when your goal is basically to work with a small number of customers for a super long time? So that's what I ended up defining for this, is based on a term that was used at Atlassian that I tried to formalize it into something that everyone could refer to, which is the Lighthouse Users Program. And so the principle for it is it's a program, so it's an official thing. We have hundreds of thousands of customers at Atlassian, but we would only build the experience for a small number of them. And so there are stages to it.

**Tanguy Crusson** (01:23:56):
The first stage is we work with 10 and we prove that the problems that they had are the things that we solved and where we spend most of the time for the first 10 Lighthouse Users is to explain why they are the Lighthouse Users.

**Tanguy Crusson** (01:24:13):
Everything that explains why we believe they are a proxy for every customer that we serve afterwards. We then have this stage from 10 to 100 where we recruit more customers, but we're still not in the fully self-service, don't need a lot of onboarding stuff. We're still testing out the value, but we're testing the different variations in the scenarios that people face to make sure that the core solution that we've got can cater for those. So there's a lot of different options and different security needs. There's a lot of subtleties that you catch between 10 and 100.

**Tanguy Crusson** (01:24:44):
Then we get to a stage where we're like, "You know what? It's good. It solves people's problems, but it's not self-service. We just need to explain stuff. We need to work with people on Slack. We need to work with them and answer a lot of support tickets or do a lot of Zoom calls to explain stuff."

**Tanguy Crusson** (01:24:58):
Now we need to get from 100 to 1,000, and by getting there we basically need to solve all of that and after that we graduate. So basically by detailing that and explaining all the success criteria in between, it helps to define success in that in the make phase, we've got 10, 100, 1,000, and then people can understand exactly where we're at there, and the types of questions we're trying to answer. In the 10, we're answering every question with a user, snippet of a video call with them, either talking about their problem and solution but showing the product and how they solve with it.

**Tanguy Crusson** (01:25:34):
That's how we wanted our stakeholders to view it, which is it's very qualitative, but have it felt from the user's perspective. It's different when we go from 10 to 100, from 100 to 1,000, but for each of those there's a playbook for how you go from one to the other. That helped us because we could then clean the space to do the right thing and we will not ask to hit, for example, a multi-active user's number or number of customers' number or percentage of users who use this number. Because it's very qualitative still when we're at that stage.

**Lenny Rachitsky** (01:26:09):
That is super cool and super interesting. And it's along the lines of the gates. It aligns with, at each gate, here's how many users we're looking for. Basically, it sets expectations for what success is, keeps you from having to scale things too early. It's such a cool idea. And you call it Lighthouse Users, like the Lighthouse Users Program?

**Tanguy Crusson** (01:26:25):
Lighthouse Users, and there's two sides to it. We just talked about the stakeholder facing side. The one I love is the team facing side of this, which is I've seen a lot of teams, Atlassian and other companies as the products grow, you tend to leverage a lot more user research, formal user research or CSAT service. And the way I call it, it's hiding behind research and not being close enough to the ground with customers. And what I want to do in the teams I work with is to create a direct feedback loop with customers, but not like someone gives you feedback and you do it. We talk...

**Tanguy Crusson** (01:27:00):
... with customers, but not like someone gives you feedback and you do it. We talk to those customers, we build stuff for them. So there's something I've seen which is climate change. It's a thing. Everyone knows it's a thing. We all read reports about it. We're all like ... Every time we read an IPCC report we're like, "Shit." Do we change anything? Not enough.

**Tanguy Crusson** (01:27:23):
What makes people want to change and actually gives them a trigger to change? I've seen is a lot more empathizing with individual people's experience. If I know someone that's impacted by climate change, it's going to make me relate a lot more strongly to the concept of climate change and want to change myself. Sorry for the power note here. I'm-

**Lenny Rachitsky** (01:27:48):
No, that's such a good example. Such a good way of making that point very clear of just the power of talking to a small number of users versus thinking that the more data you have, looking at data, CSAT scores, NPS retention will tell you what you need.

**Tanguy Crusson** (01:28:02):
So what we do with that is we recruit 10 people and we put these people in front of the whole team, not just the PMs, PM, designer, engineering. We meet on Zoom, we chat, we work with the same ones over months to build a product. They are with us on Slack. We have regular things.

**Tanguy Crusson** (01:28:20):
What we've seen, what I've seen going fast is that the engineers would go into a planning meeting and the PM would say, "So we should work on X," and the engineer will go, "Wait a minute. We've had a talk with this customer and they struggle with this so I think we should work on that instead and fix that part of the experience," and so on and so forth.

**Tanguy Crusson** (01:28:35):
So all of a sudden you're not talking about a product manager, you're talking about a product team with product engineers. So there was this thing at Atlassian where we called some engineers were more like system engineers, some were more product engineers.

**Tanguy Crusson** (01:28:49):
In my opinion everyone can be a product engineer. They just need to be exposed to the right user context. The right user context, what is it? It's 10 customers you know by name, you know their context, you know their problems. You can empathize with it. This empathy makes you want to act to change your product to solve their problem and you get really huge pride coming back out of it. 

**Tanguy Crusson** (01:29:11):
It can seem counterintuitive in a company like Atlassian. 300,000 customers, right? We should build for them. Well, you can't, right? We're limited in our ability to make changes that will work for the vast majority so might as well embrace that. Embrace that we are indeed biased, that we are indeed reacting based on feelings, like wanting to help or not wanting to help or reacting strongly to what you've seen, but we are embracing that to try and build the best product possible. I've actually seen that the outcome is, so far on this product it's worked.

**Lenny Rachitsky** (01:29:51):
If you actually think about this from the perspective of how would a startup approach this? This is exactly how a company that's just starting out would approach it. So it makes tons of sense to think of it this way. It's just people don't actually do this. It's hard to do.

**Lenny Rachitsky** (01:30:04):
This is a segue to a question I wanted to ask. So it took probably a long time for you to show real success, real progress, real like, "This is going to work." First of all how long was that period of just like, "This is probably not going to work too. Oh wow, maybe this is going to work"? And along the same lines, how does Atlassian slash ... What have you learned about how to protect this, Pixar people call it an ugly baby? When an idea is new they call this an ugly baby. People don't want it. It's just like, "Get rid of this thing."

**Lenny Rachitsky** (01:30:36):
Man, that sounds mean to say, but that's the way they talk about it. That's the term in creativity.

**Tanguy Crusson** (01:30:44):
That's a good one.

**Lenny Rachitsky** (01:30:46):
How do you protect that because that's the biggest challenge I think a lot of companies have is just like, "It's been six months. No one wants this. We're going to kill it." How do you protect it? So how long did it take for it to show success and what have you learned about how to protect?

**Tanguy Crusson** (01:30:58):
Yeah. So basically, internal comms is everything there. The way I saw my job as, a large part as being very clear on where we were, on what we were learning on, how fast we were learning, how fast we were moving. Being super honest every step of the way, not try to make shit up and try to make it bigger than it is, more successful than it is.

**Tanguy Crusson** (01:31:18):
On the contrary, be very clear about what we're testing, where we're testing it. Doing that with data, doing that with personal customer stories because we all can constantly relate to the heart and to the mind. So that's what I always try to weave into comms that I then send weekly.

**Tanguy Crusson** (01:31:36):
So we've got this product internally called Atlas, which have a project on Atlas. People can subscribe to this project and then weekly you send a tweet-sized update about your project. I was using that as a platform to communicate internally about this product and there were actually hundreds of people who ended up subscribing to this thing.

**Tanguy Crusson** (01:31:54):
Every week when we were at the stage where we were trying to get the first version out to customers it was a weekly demo of the product and everything that we built. Show the momentum as much as possible. I was even saving features for one week to the next just to ... When I knew we were going to be on vacation, for example, just to have something to show this train that keeps moving, it keeps moving. You don't want to get in front of it.

**Tanguy Crusson** (01:32:17):
But then what I needed to do is to balance that out with all the customer side of things. So when we started to put it in front of customers then it was snippets from customer conversations. No one is going to read a research report that takes 30 minutes to read. Everyone is happy to watch a three-minute snippet with four customers talking about something. So I was using that a lot every week by posting those out there and then sharing them widely on Slack to go, "This is what we learned. This is what this customer is facing in terms of problem with Jira. This is how we're solving it. This is them talking about it," that kind of stuff.

**Tanguy Crusson** (01:32:48):
So I was publishing that there and then sending that everywhere on Slack. Those kinds of things are what give people a sense of velocity and speed, and no one wants to fuck with a high-speed train. You don't get in front of it. That doesn't help and you're going to look bad by doing that. So basically that ended up buying us the time that we needed to get out of this, I don't know how you call it, the ugly baby phase.

**Lenny Rachitsky** (01:33:13):
An ugly baby phase.

**Tanguy Crusson** (01:33:16):
So basically it helped us get out of this phase where we don't have anything to show for yet because what we're showing is based on the learnings we're trying to get and we're trying to do that with, "Here's some numbers, here's some demos, here's some user snippets." Doing that every week because people can consume bite-sized content every week. They just struggle with the stuff where you come in three, four months later and go, "This is what we have to show for."

**Lenny Rachitsky** (01:33:43):
Right. How long was that period before it got out of this ugly baby phase for you? When did people start to get like, "Oh wow, this might work"?

**Tanguy Crusson** (01:33:49):
Honestly, we had something dogfooding within two months, in the hands of the first lighthouse user within five months. We iterated on the alpha for maybe six months. We then entered a beta that lasted close to a year.

**Tanguy Crusson** (01:34:06):
So I think at every step of the way people could see us going somewhere, and I think initially they judged, not the outcome. They judged the team a lot more than the outcome.

**Tanguy Crusson** (01:34:22):
So there's all this talk of founder market fit and I think really that's what you need to be teasing out, which is, is it the right thing, going after the right problems? Then if they can answer yes in ways that you haven't thought about asking consistently week over week, it's enough. I think that's where we were up until the stage where we were able to give something to customers, but the first lighthouse user was five months in. So it didn't even matter whether it looked good or not because people could see, "Okay, that's what ... Oh, there's something there," right?

**Tanguy Crusson** (01:34:51):
So I'm not sure if there's one precise moment where it happened. However, there was this one moment where we were like, "Okay, that's it. We're ready to go GA." One of the founders, Mike went, "No, you're not. That thing is ugly. I do not want to look at it. It needs to level up with the rest of the Atlassian design standards. Our customers have expectations from us on that front. Your stuff is functional, but it's way too early."

**Tanguy Crusson** (01:35:19):
So we went and fixed it. Took us two, three months and then we were okay to go. But yeah, no, because we had point A, because we had this expectation set that it would take a while to get there and because we were able to show progress every week, we basically didn't really feel that moment where we don't know what to do with this because it's too early.

**Lenny Rachitsky** (01:35:42):
This design improvement phase, what I'm visualizing is you're this pirate that is invited to a nice dinner and you have to start cleaning up. You have to start looking good and become inter-society. It makes a lot of sense. 

**Lenny Rachitsky** (01:35:54):
Also, what you're describing makes me think again of this concept of, it's your job to keep the flame alive and help it spread within the organization. So you have this idea and you're just like, keep momentum going, keep the flame growing by sharing constant updates, sharing progress, make it very easy to consume with little snippets and videos. So there's a lot of great advice here.

**Lenny Rachitsky** (01:36:13):
So timeline-wise, interestingly what I'm hearing is it basically took a year from idea to alpha, something like that. Is that roughly right?

**Tanguy Crusson** (01:36:21):
Just like seven months ... No, five months to first alpha1 customer.

**Lenny Rachitsky** (01:36:26):
Okay.

**Tanguy Crusson** (01:36:27):
We stayed in alpha for six months.

**Lenny Rachitsky** (01:36:30):
Okay, got it. So through alpha about a year total. Many people are hearing this. On the one hand it would be like, "Of course, Atlassian has all these resources. They're going to spend a year on this idea that who knows is going to work out. It's so easy for them."

**Lenny Rachitsky** (01:36:43):
I imagine there was much pain and suffering and challenge along the way that happened that makes it not so easy. Is there something you could share by just the struggle to actually make this real just as a way to wrap up conversation, go back to therapy if there's anything you want to share?

**Tanguy Crusson** (01:36:58):
Yeah. Basically, it's pretty much what we talked about earlier with lots of processes that were not changed yet because we're at the very beginning of point A, and people still wanting us to chime in on the things that were important for their part of the organization where we would play a part later if we become successful.

**Tanguy Crusson** (01:37:19):
So none of that stuff was just solved once and for all. It was just a constant process to play with that, but I think we managed to get out of these things pretty gracefully in the end and I think we gained some level of admiration for some teams from that and some found it a bit ... It's always interesting to see someone breaking the rules and getting away with it. I think it inspired some of the other founders to try and do that, which was pretty cool to see.

**Tanguy Crusson** (01:37:46):
It's actually something I'd love to see more, hearing back from the customers I've been talking to about this in their company, rather than feel suffocated by the current processes and they don't feel like they can break the chains. So I'm hoping it inspires a few more teams to give it a go, really.

**Lenny Rachitsky** (01:38:09):
There's clearly more I want to learn about point A and how other companies do this incubation stuff. So this is a really good inspiration to dig deeper into those sorts of programs.

**Lenny Rachitsky** (01:38:18):
We've covered a lot of ground. We've talked about things that have worked and haven't worked, all kinds of therapy and pain, but also things that help you succeed and build amazing products. Is there anything else you want to share or leave listeners with before we get to a very exciting lightning round?

**Tanguy Crusson** (01:38:32):
Yeah. I would try to balance the point I just gave, which is it's hard so someone has to try. Always feel like you can push. I'd like to balance that a bit with be careful for yourself as well and make sure that you're doing this in an environment that's ready to welcome it.

**Tanguy Crusson** (01:38:54):
So as I mentioned, I worked at Atlassian now for the past 10 years. Before that I used to work in banks, in heavily regulated industries, in a whole bunch of different areas where that kind of stuff was not okay. I could have tried to push, it would have not gone well at all. 

**Tanguy Crusson** (01:39:15):
So I think I'm deeply convinced by the fact that we don't need so much top-down leadership. What we need is a lot of autonomous leaders, regardless of their position within the org, able to push for change, fighting for the right things, but you need to do that in an environment that's safe for you to do so. If it's not, I think it's okay to consider alternatives.

**Tanguy Crusson** (01:39:37):
So in other words, don't feel like you're trapped. Right? You only have one work life. Do it in places where you really believe you can do amazing work and surrounded by people that you're excited to work with. Otherwise, I've been there before where it's possible to become cynical by the weight of the things that are not possible and ending up doubting your own ability to do stuff really. So it's a bit of a balance of push for the right things, but also watch after yourself and if the environment is not right, it's okay to change.

**Lenny Rachitsky** (01:40:09):
This is a really hot topic and common question in product management and I imagine other functions in product of just how much can actually change as an IC at a company. I hear all this advice about making change, changing culture, incubating stuff, innovating. How much can you actually make an impact versus, "Nothing's going to change. I should go work somewhere else"? Do you have any advice there? It sounds like basically you're saying there's oftentimes you have no impact on how the business and culture's going to work and you probably should go find a company like Atlassian that does learn how to incubate and innovate and think differently.

**Tanguy Crusson** (01:40:44):
Yeah. This one is a ... I'm not sure how to answer that really because I've worked with, consulted, worked for close to 50 companies. Atlassian is the first company I joined where I was at home from day one, challenged in the right way, but fuck, I can really choose my battles and go after them. Things are hard, but it's okay.

So I joined Atlassian. [inaudible 01:41:13] found the trampoline like that, but yeah, I would just go, not settle for status quo because you cannot be the only sane person in a room. At some point you will go insane. The environment will permeate on you. You are not this entity that is absolutely permeable to everything that happens around you. Everything around you will affect you and will change you as a person. I really believe that.

**Tanguy Crusson** (01:41:36):
So you need to surround yourself with people and environments that can help bring out the best in you, otherwise you can turn bad. I myself have been cynical in the past working in environments that were cynical and I then decided it's not me. I do not want it to be me. It was me back then. I do not want it to be me.

**Tanguy Crusson** (01:41:55):
So yeah, that's my only advice, which is have the courage to ask yourselves those questions because otherwise it might change you in ways you don't want to.

**Lenny Rachitsky** (01:42:07):
Amazing advice. Really important advice. With that we've reached our very exciting lightning round. Are you ready?

**Tanguy Crusson** (01:42:15):
I am, looking forward to it.

**Lenny Rachitsky** (01:42:17):
All right, here we go. First question, what are two or three books that you've recommended most to other people?

**Tanguy Crusson** (01:42:23):
Yeah, the first one was a book that was recommended to me by Scott Farquhar, founder of Atlassian co-founder. Who: A Method for Hiring is basically a book about how to do the thing that I for a while was really bad at, which is try to interview to understand who's going to be a good person, not a good person to join your team.

**Tanguy Crusson** (01:42:44):
Second one, so that's one book about work. Two other books that are not about work. Highly recommend reading Hakim's Odyssey. It's the story of a Syrian refugee moving out of Syria, trying to move into Europe. We hear a lot of these stats and numbers about people trying to cross the Med Sea or basically become refugees in other countries and it's very easy to look at it complacently up until you meet a personal story. This personal story of Hakim that was told very beautifully by this illustrator is well worth a read on that front.

**Tanguy Crusson** (01:43:19):
The last one is a book that I'm not sure has been translated from French. It's called Vivre avec la Terre, To Live with the Earth and it's about how we could build a different agricultural system to the one that we have today that might have better ways to feed us into the future that doesn't require large monoculture of vegetables that may not be as sustainable.

**Tanguy Crusson** (01:43:47):
They managed to create a really efficient structure on very small parcels of land with a lot of species working together to control and not need the use of any pesticides and stuff like that. They've been always surrounded by teams of researchers from the, I think it's called the Inria. It's one of the French research centers, have got really amazing results, but I don't think many know that this stuff exists and that it could actually be used out there and I think that's a shame.

**Lenny Rachitsky** (01:44:14):
I think it's the first book that sounds recommended that's only in a different language, but may not be translated.

**Tanguy Crusson** (01:44:20):
It might be translated. I hope it is. It's pretty thick though and it's very technical. So I've read the principles bit and I would get lost in all the technical aspects of growing food, to be honest.

**Lenny Rachitsky** (01:44:26):
Okay, love it. So let's ask you your favorite interview question. What's your favorite interview question?

**Tanguy Crusson** (01:44:32):
Yeah. So I struggled a lot with interviewing and I've read all the standard interview questions there is out there and I've heard them in your podcast as well. There is one that came from this book that Scott Farquhar also told me was working really well for him is when people describe an experience, you ask them the name of the person that they worked with back then. And you ask them, "So when I call this person after our call, what do you think they're going to say about that?"

**Tanguy Crusson** (01:45:02):
Apparently this does something and I've seen it happen where people are unable to project and invent on the spot something from the lens of another person talking about them. So they might be able to talk about, "I did this, I did that, I did that. So when I talk ... "Who was your boss? My boss was ... So when I ask this person, what do you think they're going to say?" It's like, "Ah, well actually, I was only leading a part of it and maybe you shouldn't call them because XYZ."

**Tanguy Crusson** (01:45:33):
That part makes people all of a sudden go out of this scripted version they give of themselves and become more real for a second. You get a bit of the authenticity coming out, which often is very hard to get to for me in interview questions. I've seen it happen. I find that very funny to do now because people get really uneasy for a second and then you get to something real.

**Lenny Rachitsky** (01:45:57):
That is genius. Makes so much sense. Makes me wonder how I can integrate this tip into my podcast interviews. Really good tip. Next question, do you have a favorite product you've recently discovered that you really love?

**Tanguy Crusson** (01:46:08):
Yeah, it's got nothing with tech, nothing to do with tech. I'm kite surfing a lot at the moment and I came across hydrofoils, which is basically these things where there's an airplane underneath you on a mast which is connected to a board. You're on the board with your kite and you basically just fly over the water.

**Tanguy Crusson** (01:46:32):
That invention is just brilliant. It's relatively easy to learn and I can spend basically, parts of my weekend flying over water in as much as a breeze of wind because there's absolutely zero friction between the board and the water. So that's, technically speaking I think is genius the way they created that and inspiring themselves from airplanes.

**Lenny Rachitsky** (01:46:52):
Is that the thing that Zuck was riding with his sunscreen with the flag or is that something else? I don't know if you saw that photo. Don't worry about it.

**Tanguy Crusson** (01:47:00):
No, I didn't see that.

**Lenny Rachitsky** (01:47:01):
I like that you say it's relatively easy to learn even though there's a kite on you pulling you in the water on this thing that's above the water. I don't know if I believe you.

**Tanguy Crusson** (01:47:11):
Yeah. I mean, there's sports and crafts that are difficult to learn. This one you can get comfortable in 18 months to two years, which is really, really short. It could be a sport that you would have done before.

**Lenny Rachitsky** (01:47:24):
Just a couple of years. Okay. I like your bar for ... I'm going to ask a question along these lines, but before we get there, do you have a favorite life motto that you often come back to, find useful in work or in life, maybe share with friends and family?

**Tanguy Crusson** (01:47:37):
I've got two, one for work and one for everything in life. The one for work is initially a quote from Obama. I can't remember the exact quote. I'm going to paraphrase, but let's keep it about the work. So there's going to be moments in your career where you don't feel valued and you wonder, "Am I doing the right thing? Am I being recognized? Am I valued? Am I at the right place?" Whenever that happens, a lot of parasitic thoughts may come in. You may face imposter syndrome and stuff like that. Happens to me super regularly. 

**Tanguy Crusson** (01:48:09):
Whenever that happens, what I do is I remind myself, "Keep it about the work," because as long as you make it about the work there's always work to be done and there's always a path that emerges from that work. It's a bit of the same of this, you've got this thing in yoga where once you're committed good things will happen. Well, that's exactly what I've seen and that's helped me every time. I reread this quote whenever I'm in these moments of turmoil around me.

**Tanguy Crusson** (01:48:37):
Now when I face those moments I also remind myself of the other one, which I invented, but I don't think I'm the only one who has invented that one, which is, "Remember that in 100 years we'll all be dead and forgotten. So don't take yourself too seriously. You're not that important. You're probably not that important, as important as you think for the people that you are arguing with."

**Tanguy Crusson** (01:49:01):
That's also the beauty in all things, which is it has an end. In the end it probably doesn't matter so might as well give it your best shot. That's what the existentialists back in France many generations ago were talking about. This point is close to Albert Camus' thesis, right? "If it doesn't make sense might as well go for it."

**Lenny Rachitsky** (01:49:24):
Really good points, really good lessons, really good mottos. Final question, you were ranked number four worldwide in a form of free diving. First of all, can you briefly describe what is free diving and then can you share one thing that might surprise someone about the sport and the skill?

**Tanguy Crusson** (01:49:43):
Yeah. So yes, that's my claim to fame. I was ranked number four in basically, the distance you can swim in a swimming pool without fins with 167 meters, which is 550 feet.

**Lenny Rachitsky** (01:49:57):
And underwater?

**Tanguy Crusson** (01:49:59):
Underwater breaststroke. I went further with the monofin, the thing you see back there, but breaststroke was one meter away from the French record and ranking number four worldwide that year. The one I'm most proud of is I actually went to 300 feet underwater deep, came back in one piece and I really enjoyed the whole thing.

**Lenny Rachitsky** (01:50:20):
300 feet. That's like-

**Tanguy Crusson** (01:50:23):
92 meters.

**Lenny Rachitsky** (01:50:25):
Oh, geez. I'm trying to imagine what that is like compared to a Statue of Liberty or something like that, but I'll look that up later.

**Tanguy Crusson** (01:50:38):
I look at buildings one. Buildings can be as little as 20, 30 meters and can go super higher, but 90 meters is pretty high, yeah. Last time I looked at a building like that, I can't remember which one it was, but it's pretty high. So it's take one breath, go down, touch the bottom plate on the rope and then come back up.

**Tanguy Crusson** (01:50:54):
One thing that may surprise people with this is that everyone is much more gifted at it than they think. So I used to give courses on the weekend for free diving and most people when I ask them, "Hey, how long do you think you can be underwater?" And they tell me something like 30 seconds, maybe a minute. "How deep you think can you go? Ah, maybe five meters."

**Tanguy Crusson** (01:51:15):
At the end of the weekend most people were able to hold their breath for two to three minutes and to go to 20 meters deep. So it's one of those things where it looks absolutely impressive and crazy and amazing and in fact we're naturally gifted to it. There's a lot of physiological changes that happen when we dive that make it possible, but I think it's fascinating how little we know about our bodies.

**Lenny Rachitsky** (01:51:38):
I'm looking up what is 300 feet compared to real-life objects on perplexity. So what is 300 feet compared to real-life objects? Here we go, 300 feet. The length of a football field. Okay, yeah. I should have realized that. Close to the length of a Boeing 737.

**Tanguy Crusson** (01:52:00):
Yeah. You need to look at it this way to get some perspective. 

**Lenny Rachitsky** (01:52:01):
Yeah, and a football field-

**Tanguy Crusson** (01:52:01):
You go underwater in that-

**Lenny Rachitsky** (01:52:10):
... Jesus Christ. Oh, my God. But I love your advice that people can do much better at the skill than they think.

**Tanguy Crusson** (01:52:14):
Yeah. Everyone from kids to adults are really amazing at it actually.

**Lenny Rachitsky** (01:52:20):
Tanguy, we've covered so much ground. I think this is going to help a lot of people that are trying to get better at free diving, but also at building zero to one within large companies. I am so thankful that you made time for this and that you shared some into this real talk and as you called it, therapy.

**Lenny Rachitsky** (01:52:37):
Two final questions. Where can folks find you online if they want to reach out, maybe follow up on some of the stuff you talked about and how can listeners be useful to you?

**Tanguy Crusson** (01:52:44):
Yeah, so you can find me on LinkedIn if you know how to ... You don't need to know how to pronounce my name. You just need to know how to write it. I'm not super active on social media to be honest. I'm very much in the trenches building this product so I don't do much in terms of networking to be fair, but if you are using this product for example, and you have ideas for how we can improve it for you or you'd like to share some stories about how that's helped you or how it's not helping you, I'd love to connect because I spend a large part of my days talking to users, responding to support tickets and stuff like that. So, yeah.

**Lenny Rachitsky** (01:53:20):
Amazing. Tanguy, thank you so much for being here.

**Tanguy Crusson** (01:53:24):
Thank you, Lenny. Honestly, it's been amazing and I hope some of my gibberish is useful to people.

**Lenny Rachitsky** (01:53:31):
Definitely not gibberish. I think it's going to help a lot of people. With that, I'll let you go. Bye, everyone.

**Tanguy Crusson** (01:53:37):
Bye-bye.

**Lenny Rachitsky** (01:53:39):
Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [19/21] Making an impact through authenticity and curiosity | Ami Vora (CPO at Faire, ex-WhatsApp, FB, IG)

**Lenny Rachitsky** (00:00:00):
Boz, the CTO of Meta, said something about you. "Working with Ami, she could have the most profound disagreement in the world and she would respond, fascinating, you have to tell me more why you think that."

**Ami Vora** (00:00:09):
I really enjoy being right and then it turns out in the working world, that did not serve me so great. I think the hard part is sublimating your ego a little bit and saying it's more important to get to the outcome than to be right.

**Lenny Rachitsky** (00:00:19):
I love this very tactical piece of advice when you're trying to come up with a metaphor or analogy, think about what you want your users to feel when you're using the product.

**Ami Vora** (00:00:27):
If we all agree that the feeling of something should be, I'm sitting in Dolores Park with my friends on a sunny Saturday, then people will just naturally build something that feels more consistent.

**Lenny Rachitsky** (00:00:36):
There's also this metaphor about the hill climb.

**Ami Vora** (00:00:38):
For me, the hill climb is all about the difference between a local optimum and a global optimum. You're standing on top of the hill, you're looking down, you can see rolling hills, the sheep, the grass, whatever, but then, way off in the distance you can see a mountain. And the thing that gets me through the valley is remembering what the summit feels like.

**Lenny Rachitsky** (00:00:59):
Today, my guest is Ami Vora. Ami is Chief Product Officer at Faire, which connects independent retailers and brands around the world, and I believe is the most successful and biggest B2B marketplace startup out there. Prior to Faire, Ami was employee 150 at Facebook, where she launched the first Facebook developer platform and was later head of product for the $55 billion global Facebook ads business. She also oversaw the introduction of ads on the Instagram platform and most recently, she led product and design for the largest messaging app in the world, WhatsApp.

**Ami Vora** (00:02:06):
Oh, thank you. I'm so happy to be here.

**Lenny Rachitsky** (00:02:08):
So, when I asked you about your goal for our conversation today, you said the most amazing thing, which I love. You said that your goal is to be as authentic as possible and to show that people can be pretty messy and imperfect at times, yet still be very successful. I love that so much. Let's definitely try to do this. Is there anything else you want to add on that?

**Ami Vora** (00:02:28):
Yeah, I mean, maybe I'll just say a couple more words on that. Actually, I feel like when I was coming up, when I looked at people who were successful, they seemed to have everything figured out, especially the women. They were all super women, where they respond to every email in 10 seconds, they didn't seem to sleep, they always wore high heels. They were just perfect and I was just like, oh, I guess I'm never going to be successful. That is not me. I love to sleep, I waste time doing absurd things all the time.

**Ami Vora** (00:03:00):
And I'll tell you how glamorous my lifestyle is, I'm currently working out of my bathroom. I'm talking to you from my bathroom, which is where I work from because I love my house, it's a great house, wasn't meant for work from home, three kids, two parents remote work, and it was just the place with the most closing doors between me and my children when the pandemic started. And so it just took me a while to realize that actually, it's all fine. No one's got it fully figured out, you never know how someone else is living. Most of us are winging it and learning as we're going and learning through trial and error and it's all normal. It's all fine and I can do it and you can do it, and everyone.

**Lenny Rachitsky** (00:03:43):
I so love hearing this. This is something people often want to hear more of on this podcast, because there's all these stories of here's all these successes, here's all these things I did and everything, it just always seems to work out. And we try to, we have this failure corner on the podcast where people share story failure. So I love just setting that frame for this conversation of just super being real and being clear that there's a lot of things that go wrong behind the scenes that people often don't hear about.

**Ami Vora** (00:04:08):
I for a long time felt like I was held back because I don't have a plan, but I realized that probably the most important thing is to just acknowledge that that is true for me. That I'm not going to be a person with a plan, and actually the thing that has consistently served me is to do the thing that feels right, go to the place that feels like home, work with the people who feel like my friends. Just work where when I put on the code of the job, I feel like, oh, this is a place where I could really be lucky, I could be creative, I'm in the right spot, as opposed to feeling like, oh, there is an end state that I know of and I'm just going to have to work my way to that end state. Whenever I get in that zone of, there's only one outcome and I just have to get there, I'm not my best. I'm not bringing the creativity and the luck and the excitement in the same way.

**Lenny Rachitsky** (00:05:03):
**Ami Vora** (00:08:14):
I mean, I think a lot of us are just like, you have a spreadsheet in your head of the axes and certainly when you're choosing between jobs, for me it feels like, oh man, the rest of my career hangs in the balance of making the exact right decision and getting the exact right job. And you work through all of this spreadsheet mass of, if I took this job, here's what it would do for me, here's where I'd be in five years, etc. And I have that engine in my head also, but what I try to do is work through the spreadsheets and then tear it up because none of that stuff is actually going to determine how good I am at the job. The thing that'll determine... In my track record, the thing that has determined it is when I walk through the doors, do I feel like I'm lucky to be there?

**Ami Vora** (00:09:03):
So for me, it's actually a lot more emotional. I try to just put on the coat of the job. When I wake up in the morning, I'm like, what would it be like if I were doing this job? What would I think about on my commute? Who would I have lunch with? Do I like them? What problems am I going to solve today? And that gives me an emotional response, which is just much more telling than the spreadsheets of, here's where I'm going to be in five years.

**Ami Vora** (00:09:31):
And for me, the thing that has led me to the places where I do my best work is a feeling of being at home, which is all about trust and trust with the people around me. Can I walk through and feel like these people are going to have my back, they're going to let me take risks, I'm going to enjoy spending time with them? And that's where I feel like I've always just been able to try more things and do better because a big, trust is a big unlock for me.

**Lenny Rachitsky** (00:09:56):
I love this metaphor of putting on the coat of the job, of just feeling out what it would be to work there. I imagine that was something that you did before you joined Faire, which I want to talk about, but let me transition a bit to talking about Meta and specifically, Boz. The CTO of Meta was on this podcast a few months ago and he said something about you that I want to read.

**Ami Vora** (00:10:17):
Oh, kind.

**Lenny Rachitsky** (00:10:18):
Okay, so you've heard what he said about you?

**Ami Vora** (00:10:21):
[inaudible 00:10:21].

**Lenny Rachitsky** (00:10:20):
Okay, cool. So let me read this and then I want to learn from you how to do this. So here's what he said. "Working with Ami, it was like watching an alien because she could have the most profound disagreement in the world with somebody and they would say something that she thought was not just wrong, but crazy wrong, and she would respond, 'Fascinating, you have to tell me more why you think that.' And she meant it from the core of her being. She saw this schism and rather than reacting as if it was a threat, she reacted with the most genuine and profound curiosity. I just watched it absolutely tear down walls between points of view. Embracing curiosity in those moments of challenges completely changed my life and I owe that to Ami Vora."

**Ami Vora** (00:10:58):
Oh man, I love Boz, what a great guy, and so kind of him to say that. I mean, I will say that this did not come naturally to me. I really enjoy being right, I love to be right. I think most of us love being right, and at least in my childhood, part of my identity was built on being the person who was right and being the person who knew everything.

**Ami Vora** (00:11:22):
And then it turns out that in the working world, that did not serve me so great, it wasn't great to walk into things and be like, all y'all are wrong, I am the only answer, everyone please to listen to me and stop talking. And what really happened was that someone pointed out to me that not only... One of my old managers pointed out to me that not only was I spending a lot of energy trying to think through every possible thing by myself so I could be totally right, I was often not really coming to the right answer. Other people have a bunch of information that I do not have. And so I'm just ignoring that, I was letting my ego overtake my desire to get to the best outcome, which is just, that's a silly trade off and an unnecessary one.

**Ami Vora** (00:12:12):
The thing that changed there is me just saying it's more important for us to get to the outcome and I very selfishly just like to learn more things. And so by deciding that I already knew everything, I was cutting myself off from learning the things that other people were really good at and it's so easy to just open the door instead and say like, hey, you seem to know something that I don't know yet. Why not tell me about it? I'm going to get better. We'll probably come to the right outcome. Maybe you'll have a better time. Why not?

**Ami Vora** (00:12:45):
And so it was a little bit just accidental evolution in that direction. But it's made work and life so much more interesting to just be like, hey, what does this person know that I don't know yet? It means that every meeting you walk into, you're probably not going to get bored and I get bored a lot, but if you assume that every person there knows something that you don't know, then it's not just wait to get to the right answer, it's like, discover the thing that they know that you don't know and it becomes just a little bit of uncovering.

**Lenny Rachitsky** (00:13:18):
For people that want to learn to be good at this the way you are, a couple things that I take away from the historian and the way you're talking about this is, one is there's an enthusiasm of, I disagree with you, but I want you to know I really care about what you think. So there's an energy of like, please tell me what I'm missing. There's also this assumption that a lot of disagreement is rooted in, we just have different information, so tell me what I'm missing. Can you talk a bit about just how to, what you've learned about actually do this well?

**Ami Vora** (00:13:45):
Yeah, I mean, I think the hard part is just sublimating your ego a little bit and saying it's more important to get to the outcome than to be right. And I think all of growth is a battle with yourself, but this is one of the hardest ones because we all want to be right, we all want to protect ourselves and it served us, many of us for so long to be right. I just try to think about the feedback loop of, I think all of life is feedback loops, so I just started to think about the feedback loop I'm creating of like, I was curious about something. I learned something new, we got for a better outcome. Probably the other person felt better as well as I felt better. It's all positive feedback and you do that a couple of times and the positive feedback far outweighs the desire to be right because now we're more right, we're more right together. And so just building that as a practice of just noticing how much better things can get when you can be open to them, has been really fun.

**Lenny Rachitsky** (00:14:43):
What do you think of this phrase that he used that he remembers? Is that a phrase that you find useful? Just fascinating, you have to tell me more why you think that.

**Ami Vora** (00:14:52):
I do think that is a word that I say a lot. I do say that a lot, because it's true, it's fascinating that someone to look at the same movie that I was looking at and come away with a totally different understanding of the plot. I could sit in the same meeting as other people and they would leave with just a different retelling of what happened, and that to me is fascinating. Isn't that surprising, that we can all see the same, what we think are the same facts and walk away with a totally different narrative? And when you really go deep into that and you just understand how people see the world, and that is helpful. I'm curious about things, I like to know more things, and so that just helps me know more things.

**Lenny Rachitsky** (00:15:36):
I feel like the hardest part of this for people is you hear someone say something, say, okay, so our mutual friend, Dan Hockenmaier, he's in a meeting and he just says something that you are just like, no, because he's got influence. He's a big deal at Faire. Most people have this visceral reaction of like, oh no, I really don't think that's a good idea. Is there something you've learned about controlling that bodily reaction of like, oh, and then just being positive about it?

**Ami Vora** (00:16:00):
Yeah, I do think it is just that feedback loop. It's not like I don't have the visceral reaction, it's just that instead of interpreting it as this is a visceral reaction, I got to shut something down, it's like, this is a visceral reaction and it's a chance to learn more. Just reinterpreting some of the feelings in ways that are more about opening than about closing stuff down.

**Lenny Rachitsky** (00:16:23):
Got it, so it's kind of like a thinking you do of like, okay, hey, let me frame this and think about this [inaudible 00:16:28].

**Ami Vora** (00:16:28):
For me the most important thing is just taking a pause. I think when you just take a pause, your body calms down, your mind gets a chance to breathe a little bit, and then your response is going to be better, but you got to take the pause because the immediate visceral reaction, is not always... It's going to be primal, it's going to be protective. It's just when you take a pause you're like, this is all fine, let's just learn.

**Lenny Rachitsky** (00:16:52):
I feel like more people are going to start using this phrase, fascinating.

**Ami Vora** (00:16:55):
Fascinating.

**Lenny Rachitsky** (00:16:56):
When they hear something [inaudible 00:16:58].

**Ami Vora** (00:16:57):
It's kind of my tagline. There were a few years where I had to be careful about not saying it because whenever I said it, people would be like, she disagrees. So I've had to use a thesaurus and expand my words I use.

**Lenny Rachitsky** (00:17:12):
No, that's such a good word. Maybe we'll make that the title of this episode.

**Ami Vora** (00:17:12):
Totally.

**Lenny Rachitsky** (00:17:16):
What a great title that would be. So we've been talking a bit about the bodily reaction to stuff and our lizard brain almost, reacting to things. It reminds me of this metaphor that you called the dinosaur brain and how it applies to product reviews. Talk about what that is.

**Ami Vora** (00:17:31):
Okay, so a lot of people on my team, they're coming in to do product reviews and they're worried about it. They're stressed out, they don't exactly know what to show, and the normal temptation is just to show as much information as possible because that way you come in and you think, hey, the people in this room are super smart. I'll show them the information, they will come to the right conclusions. They'll probably make a better decision than I'm going to make. So my job is to catalog the information and present it.

**Ami Vora** (00:17:59):
And one of the first things that I talk to people about is, okay, for the purposes of this conversation, I'm going to put myself in the capitally executive bucket because that makes what I'm about to say less offensive. Assume that executives have a little tiny dinosaur brain. We all have a little brontosaurus brain and we can really only hold three facts at the same time. We will never be able to go deep in the way that you are able to do on everything that crosses our desk. And so the best service you can do is actually do the work of making a recommendation. That's the way we're going to be complimentary. The breadth that I normally have to look across means that I'm going to be better at things like pattern matching or giving you more context or telling you stuff that's happening in the company or the industry. But what I'm not going to be better at is looking at all the information that you looked at and coming up with a meaningful outcome. That's what you're going to do and my little dinosaur brain is going to be like, okay, that sounds like a very reasonable pattern, I've seen other patterns that look like this. Okay, that sounds like an outcome, however, it conflicts with this outcome over here. I can tell you about that. Does that make sense?

**Lenny Rachitsky** (00:19:17):
Yeah, and I love that you put yourself in that bucket. You have a dinosaur brain also, it's not other people.

**Ami Vora** (00:19:22):
It's a pretty bad, bad look, but it's really true. As you get more breadth, you are less and less able to go deep on everything that deserves going deep and you just end up doing a different service than the people on your team, and recognizing that as complimentary has been really helpful.

**Lenny Rachitsky** (00:19:38):
You have this phrase, my manager owns context, I own the recommendation. Kind of along the same lines?

**Ami Vora** (00:19:42):
Exactly, very similar. And I think the thing that was helpful for me there is that really unlocked what I was looking for from my managers because otherwise I wanted them to be exactly like me. If I assume that I need to bring them information and then they would come to the same conclusion that I would come to, that's very narrow. They have to be able to look at the exact same information and process it in the same way and come out with the same idea. Whereas if what they're doing is complimentary to me, then I can learn from everyone. They're going to just have a different view, they're going to have new information that I don't have, and it gives me a lot more space to take accountability.

**Lenny Rachitsky** (00:20:20):
Is there any other advice that you could share along these lines of just product reviews? So, the big takeaway here is just keep it simple and have a recommendation.

**Ami Vora** (00:20:30):
Keep it simple, have a recommendation. I also think that, I think we misuse product reviews sometimes as ways to get decisions and actually, they should be ways to calibrate on principles. So what you don't want is to come to a product review for every single that you want to make. Instead, what you want is to come to a product review with one decision, but the goal of that decision is to walk out with principles about how to make these decisions in the future so that you don't have to come to product review, but you still have this consistent and coherent product that you're building.

**Ami Vora** (00:21:04):
And so I think when you flip the frame of reviews to being less about, okay, I'm going to bring this information to an exec, my manager, whoever, and they're going to decide every piece, you're not actually building that much more capacity in the system. You're getting fast decision making, but you're not changing who can make really good decisions. And I think you always want to change the org to constantly make better decisions, and a way to do that is when you bring these sorts of questions, what you talk about is, why did you make this decision? What are the trade-offs you have in mind? Who are you optimizing for? What timeline are you thinking about? What's the risk level we're willing to tolerate? And then you don't have to come back. You have enough information that you can take those principles and run with them.

**Lenny Rachitsky** (00:21:51):
Is there a framework or a process you use for product reviews that might be helpful for people to hear? Just like a agenda or a way of thinking about just how to set up a product review for success? Because a lot of people are trying to set these up at their companies and they're like, I don't know if we're doing this optimally.

**Ami Vora** (00:22:05):
Yeah, I think everyone's got... I think there's so many different takes on frameworks. I don't have a single system. I mean, actually I think Boz has written about a bunch of this, and I probably most agree with him. Where there's different kinds of product reviews, it's like, what are you trying to solve? What's the timeline on which you're thinking about for these? Is it a philosophy? Is it a strategic shift? Is it a day-to-day product decision? And then keeping it extremely short and pointed and then making sure you walk away with principles, not answers.

**Lenny Rachitsky** (00:22:36):
I think there's a lot of nuance and importance there of what you just said, which is start with the problem you're solving. What are we trying to do here? And the timeline, I think that's also really useful and important for people to hear.

**Ami Vora** (00:22:47):
I think the temptation is always to err toward writing more, and what I always really recommend people do is write whatever you need to write and then cut out almost all of it. What you really want to bring to any forum, whether it's a product review or a written inform or anything else, is the minimal amount of information that you need to make a clean recommendation because then you are forced to be opinionated. Otherwise, the opinion can get lost in all of this information. You can hide behind, well, all of these analyses seem to suggest, and instead you should probably just say, looked at all the data, there's three analyses that suggest this. There's one that suggests that, we think that one is inaccurate or worth taking the risk on. Let's go. Any objections? Let me know. Any new context? Let me know. That really forces you to deeply understand and take an opinion on the material.

**Lenny Rachitsky** (00:23:43):
Final question, who do you like to invite to these product reviews and your thoughts, rules, policy?

**Ami Vora** (00:23:50):
Yeah, I mean I do think that usually fewer people is better. It leads to a sense of being informal and that is really useful because it lowers the bar on how complete or strong these conversations are and I'd rather have a less formal conversation faster than a formal conversation and lose three weeks in the process when we could have been building. I think it needs to be cross-functional. I think one of the things you want is cross-functional accountability. So we want it cross-functional at the leadership level and cross-functional at the team presenting level. And I think those are normally the groups.

**Ami Vora** (00:24:25):
I think the thing that gets hard is you often cut out the middle, where if it's a working team presenting to the senior leaders on something important, it's really hard because it means people's managers are not in the room and can't help the conversation or other things. And so in order to do that, you have to really have a bunch of implicit trust inside the team that everyone will get the context later, that everyone's going to be kind to everyone else and you don't need a ton of air cover, and that the managers trust their team to present in the best possible way.

**Lenny Rachitsky** (00:25:02):
That is always a stressful place for a manager to be, where their success is riding in that meeting and they're not there and they-

**Ami Vora** (00:25:07):
It's so stressful, it's so stressful. I think anything you do to make it less stressful is useful. But then there've also been times in my career where I would keep the room itself small, but because we were all trying to calibrate on specific principles, I would record or broadcast the reading to anyone who wanted to see it, just so they could all see the principles by which we were decision-making and get calibrated on that.

**Lenny Rachitsky** (00:25:32):
So through your career you've transitioned from being the person pitching the products and being reviewed to the person reviewing and being on the other side. Is there anything being on this side of it that you think is helpful for people earlier in their career to know about that experience, from your angle now?

**Ami Vora** (00:25:53):
I mean, I think for what it's worth, I think I still do a fair amount of product pitching in the past few years because there's always someone else to convince.

**Lenny Rachitsky** (00:25:59):
That's true.

**Ami Vora** (00:26:01):
Especially if you want to do something dramatically different. Really, I think the biggest service for people who are starting out a little earlier is that point around bringing the recommendation, really having the opinion and standing behind it with conviction and doing what they need to do to build that conviction for themselves.

**Lenny Rachitsky** (00:26:22):
Awesome. You've done this a number of times already in this conversation, and so I want to spend a little time here, which is using metaphors and imagery to make your point and get people to understand what you're trying to say. So you have this code of putting on the coat of the job and this dinosaur brain, and so someone told me that this is just a skill you have where you use metaphor and imagery to rally a team, get your point across, get people to understand what you're trying to say. There's also this metaphor, someone told me I need to ask you about the hill climb metaphor. Does that ring a bell?

**Ami Vora** (00:26:52):
Yeah.

**Lenny Rachitsky** (00:26:53):
Okay, what is that all about?

**Ami Vora** (00:26:55):
For me, the hill climb is all about the difference between the local optimum and a global optimum. That sounds very abstract, but I think a lot of the time when we're doing our job, when we're doing life stuff, whatever you're doing, you try to just get better and better and you optimize your current system and then you feel really good about it, and that is great. You're standing on top of the hill, you're looking down, you can see the, I don't know, rolling hills, the sheep, the grass, whatever. But then way off from the distance you can see a mountain, one that's even higher than you can't even see the top of it, and you have to decide, are you going to take the risk of climbing down your hill, crossing an unknown chasm, and then climbing back up, just to get to the same level you started at with more climbing to do to get to that summit? And that is really hard.

**Ami Vora** (00:27:51):
I'm thinking of things like, maybe the first time I saw this was like a lot of companies were really good at desktop and you could see the mobile mountain way out over there, but to get there you had to really make a lot of trade-offs in your core desktop business that you were not totally sure were going to pay off when you made it to the mobile mountain, and you had to do a ton of work. You had to fundamentally rewire a lot of what you're doing without a guarantee that you're going to get there. I mean, you can see it in life when you think about new jobs or new moves or new relationships, anything that you think about. You are giving up something that is working pretty well without knowing whether you're going to make it to the top of that next mountain. And that's been really helpful to me just to place where I am on different things, where you get the inkling that there is a much better way to do this, there really is.

**Ami Vora** (00:28:48):
Is it going to be worth going down into the valley, climbing up, keeping climbing? Is that going to be worth it? Most of the time the answer is yes, but it's helpful for me to know, boy, this feels like a slog. It is supposed to? Because I'm still in the valley and the thing that gets me through the valley is remembering what the summit feels like. When you're on top of it and you're like, this is great, it was absolutely worth it. My life is better in these ways, we're able to solve these problems in these ways. It was worth it.

**Lenny Rachitsky** (00:29:19):
I love that. It feels like a big value of the metaphor, which I love is that to set expectations, it's going to be really hard for a little bit or we will slow down what we're trying to do now, but the idea is there's a bigger hill and a bigger mountain.

**Ami Vora** (00:29:32):
It's a bigger hill and it's worth it.

**Lenny Rachitsky** (00:29:34):
On this kind of broader idea of metaphors and imagery, is there something there that you've learned of just like, this works really well, I'm going to invest in becoming better at this, or is this something that's come natural to you? Anything you can share about that skill and approach?

**Ami Vora** (00:29:46):
I think this one came from, I worked for a manager, his name was Eric Antino, and he was just a master of the metaphor and analogies. And so whenever I would bring him something, he would be like, how is this product going to make you feel, and when is the last time that you felt this way? And you can say, oh, I felt this way when I was hanging with my friends in Dolores Park and he'd be like, cool, tell me what it feels like, why that's the analogy, what ramifications come out of that?

**Ami Vora** (00:30:18):
And one thing I like to do is try to build an emulator for different people in my head, because I've just had the good fortune of working with an amazing number of very different leaders, and so he's one of the people I tried to build an emulator for where I'd be like, okay, I see this thing. I don't know how to solve this problem. How would Eric describe this? I've tried to build one for Boz, which is all about principle of decision making and principle of trade-offs. There's a few other people where I'm like, I don't know how to solve this problem. Can I load this other person into my head and how would they approach it? And that gives me a fresh lens on it.

**Ami Vora** (00:30:55):
And I really like metaphors and analogies because I think especially as you scale a team, narrative becomes increasingly important. Narrative can carry so much weight and water where otherwise it's similar to the product review point, where either you can tell everybody exactly what to do at every point or you can create a story that we all agree on. And when we all agree on that story, people just know better what to do. If we all agree that the feeling of something should be, I'm sitting in Dolores Park with my friends on a sunny Saturday. You know what the iconography, the designers know what iconography should look like. You know what the communication and join pattern should look like. You're not going to build something cold and corporate, you're not going to build something strobe light, you're not going to build something flashy, but you don't have to go and make all those individual decisions. You can buy into the same story and then people will just naturally build something that feels more consistent.

**Lenny Rachitsky** (00:31:56):
This is such a powerful and important skill. Is there an example that comes to mind where you did this really well, say at WhatsApp or Facebook of the story that carried a lot of water for you and the team?

**Ami Vora** (00:32:08):
Yeah, I mean I think the product metaphor we arrived at for WhatsApp was face-to-face communication. Our goal there was to make it so that every person in the world could feel connected to the people they cared most about, even when they were separate, even they're distant geographically for whatever reason, we were always going to be apart from the people you cared about. And we really had to build something that would work for literally everyone in the world. People who are carrying these high-end devices in western markets who are very tech comfortable and savvy, and people in the low end markets who were carrying these low end devices, they weren't that familiar with technology, it was maybe their first time online. We had to build something that worked for everyone.

**Ami Vora** (00:32:57):
And the most universal form of communication is face-to-face. When you talk to someone face-to-face, you're not thinking, how do I present? What tool do I have to learn? You just open your mouth and words come out, and that's the feeling that we wanted to create. And that involved a lot of the app stepping back from communication, creating spaces that felt really intimate so people wouldn't have to think to themselves, what kind of space am I in? They could immediately map where they were in the app to the, okay, I'm sitting around in my kitchen table and people are joining and leaving calls just like they're walking in and out of my living room, but it is a family space and the family is there. Or, in one-on-one disappearing messages, you're like, cool, this is my close friend. We don't need to keep track of everything that we're saying. We're here for a little bit of banter, a little bit of relationship, a little bit of quick, what's your wifi password and stuff, and whatever's really important, that's what we'll hold onto and the rest is just day-to-day, normal intimacy.

**Lenny Rachitsky** (00:33:58):
That is super interesting. WhatsApp, one of the main differentiators and benefits is it's super fast. And I see completely how it connects this idea of you're just like, ideas, we want you to feel like you're talking to someone.

**Ami Vora** (00:34:09):
And it's all really a small thing. It's like a typing indicator is like someone who's about to take a breath, give them a second to talk, the two check marks lighting up or someone's face lighting up when they hear you, it's just a recognition of being heard. These are all super small things, but I think they add up to a feeling of being there.

**Lenny Rachitsky** (00:34:29):
That is super interesting. So I love this very tactical piece of advice that you just shared of just when you're trying to come up with a metaphor or analogy, think about what you want your users to feel when you're using the product and when else have they felt that same feeling? So interesting. And then this other point you made of making this emulator of a person in your head.

**Ami Vora** (00:34:49):
I mean, it sounds a little wild now that I think about it.

**Lenny Rachitsky** (00:34:51):
No.

**Ami Vora** (00:34:51):
That's robotic.

**Lenny Rachitsky** (00:34:52):
It makes total sense.

**Ami Vora** (00:34:55):
I get very bored a lot. It's another way to make sure meetings are really interesting where you're like, okay, let me see what that person is going to say next. Let me put myself in their shoes. Let me think about what they're reacting to and why they're going to think that and how they're going to see the world. And again, it just gives me more toolkits because it means when I'm stumped on something, I can be like, what would Rob Goldman say? He'd say, look at the dashboard. Have I looked at the dashboard? No. Okay, let me go look at the dashboard. You can load up these different skillsets that people have been so generous with sharing with me.

**Lenny Rachitsky** (00:35:28):
What would be the Ami emulator? What are people thinking when they loaded it?

**Ami Vora** (00:35:33):
Fascinating.

**Lenny Rachitsky** (00:35:33):
Fascinating?

**Ami Vora** (00:35:35):
Fascinating, probably the number one, no joke.

**Lenny Rachitsky** (00:35:37):
Is there an emulator you most often come back to that you find most useful in just in your day-to-day? Who's the person that like, oh yeah-

**Ami Vora** (00:35:44):
I think those are the three. I think it is like Antino's story. Story, metaphor, analogy creation. I think it's like Boz's, if we played this out, what principles are we using? And if we kept on using those principles, what would happen? And it is Rob Goldman, who's an amazing metrics growth product leader being like, look at the dashboard. I mean, look at the dashboard, which is a great central rooting part of my life.

**Lenny Rachitsky** (00:36:16):
This was so fascinating, fascinating.

**Ami Vora** (00:36:19):
It revs up.

**Lenny Rachitsky** (00:36:20):
I love this topic of just metaphors and stories and visions and things like that. It's something that a lot of people are wanting to get better at. Is there another example, per chance, that you could share of maybe using a metaphor to rally team, get things done?

**Ami Vora** (00:36:34):
I mean, I think taking a sub part of WhatsApp or when we talk about video calling. I really, one the metaphors was sitting around in your family room when you think about how to make calls work, where when you're sitting in a family room, you're not scheduling it, you're not, I don't know, having this cold corporate feeling, the way you do with a conference where there's heavyweight interactions, and instead there's just, you can join and leave. It feels lightweight, it feels like the space exists even when you're not there. And so just creating things like joinable calls, like that feeling of people popping in and just paying attention to whoever's there and letting them leave, but the call can flow on without a super heavyweight action that everyone needs to take. I think that was another one where we were just able to agree on the feeling and then you know what to build.

**Lenny Rachitsky** (00:37:27):
I was just using WhatsApp to do video call with my mom. They were traveling to Italy and so-

**Ami Vora** (00:37:30):
That's great, that's exactly [inaudible 00:37:33].

**Lenny Rachitsky** (00:37:32):
I experienced it, it felt great.

**Lenny Rachitsky** (00:37:35):
Let me go in a slightly different direction. One of my favorite posts of yours is called execution beats strategy every time, and I think another way you phrase it is, execution eats strategy for breakfast. I think you put that somewhere. I'd love to hear about this because I completely agree. I think a lot of people obsess with strategy and vision and got to get this right and forget that most of the work is execution. So yeah, I'd love to hear just your take and insight here.

**Ami Vora** (00:37:58):
Yeah, I don't know if I coined execution eats strategy for breakfast, I think a lot of things eat other things for breakfast, but I'm a believer. I do think execution eats strategy for breakfast and that's something we used to say a lot at Meta. It was just the most important part and I was well-trained in that. That was one of the key lessons that I learned there, and it's because when you have... Look, strategy is super fun. You get to think about all this pie in the sky stuff. You get to think about if the world operated in rational patterns and you could predict the future, what is going to be the second and third order effect? You get to use your brain in a really fun, philosophical way, but customers don't care. Customers don't care about your fancy strategies and your five-year plan. They care about the product that's in their hands. And so anything that distracts you from thinking about the product in your hands I think, or maybe worse, takes you away from solving customer's problems today, I think is a distraction.

**Ami Vora** (00:39:03):
And I think one of the things that you learn is if you have great strategy, perfect strategy but poor execution, you don't win because your strategy never makes it to the market. And what's even worse is that you have learned nothing. You don't know whether it was your strategy that was wrong or whether it was your execution that was wrong, all you know is you didn't win. Whereas when you have a pretty good strategy, a good enough strategy, you're in the right direction and you have perfect execution, you still don't win immediately, but you know your execution was great. So then you learn, what do you need to do to improve your strategy? You've got the execution machine, you go back, you update your strategy, you relaunch, and you keep on doing it until your strategy is perfect and then you do win. And that's the lesson I repeatedly learned.

**Lenny Rachitsky** (00:39:50):
Is this advice a reaction to what you said, where people, PMs let's say, are just like, I want to work on strategy, we got to spend all this time, get the strategy nailed, and it's just like, okay, we also need to execute and that's maybe even more important.

**Ami Vora** (00:40:02):
Yeah, I do think it's very glamorous to work on strategy. It's so fun. It's so fun to have the word strategy in your [inaudible 00:40:11]. I don't know, we've built a mythology around strategy being the most important thing. And execution is not glamorous, it is not like white-boarding by yourself and pointing to things and coming out with the grand vision. It is the nuts and bolts and sometimes boring, sometimes grind it out work of like, you got to bring the donuts, you got to look at the dashboards, you got to rewrite the spec. You got to just do a bunch of the grinding, but that is what leads to the customer's outcomes. That is what the customer is eventually going to feel. They're never going to see the whiteboard, they're going to see that someone took the time to fix this bug.

**Lenny Rachitsky** (00:40:53):
**Ami Vora** (00:41:57):
Yeah, I think about it a little bit in terms of proportion of time you should expect to spend. So I mean, there's no point next being on that strategy, you can't have a bad strategy. So you should spend some time, maybe it's like 20% of your time, but the bulk of your time should be confirming that strategy actually makes sense for the customers. Getting it out there, building the machine to constantly make it better, as opposed to a perfect strategy. You go away, you build it for a year, you ship it, the market has changed. Customers have changed, their needs have changed, competition, just the whole landscape has changed and you probably could have solved those problems more easily had you headed in the right direction, but done it with more ongoing customer feedback.

**Lenny Rachitsky** (00:42:39):
In terms of this proportion, I imagine what you see is as you get more senior, more of your time spent on strategy, less time on execution, right?

**Ami Vora** (00:42:46):
I don't 100% know that that's true. I think again, even at high levels, maybe the strategic directions become more important to get mostly right, but I think still most of your time is making sure they can make it to market. I think you should still be spending your time understanding what's slowing people down and unblocking it. Understanding, how is the market changing? Understanding what the broad customer feedback is, just constantly improving the system that you are building. I think that's, I mean, how much time can you spend thinking about the future, as opposed to actually trying to create it.

**Lenny Rachitsky** (00:43:29):
That is really interesting advice because I think most people imagine as you get more senior, I'm going to have more time thinking about vision and strategy, not have to be in the weeds building things. And I love this point you're making of even as a senior exec, you're still, it's executing in a different way, but it's still execution.

**Ami Vora** (00:43:44):
A different way, yeah. You're focusing on the execution of the system a little bit more, but you got to stay connected, I think, to the customer and to what you're bringing to them.

**Lenny Rachitsky** (00:43:54):
I love that. Obviously, strategy is also very important. You have this great quote that I'm going to read here. "For strategy to be useful, it actually has to change our behavior as a team to create better customer outcomes." Can you talk about that?

**Ami Vora** (00:44:08):
Yeah. I mean, I think again, some of the joy of strategy is the philosophy and excitement of thinking about all the long-term stuff that will happen, but I try to always come back to, what's going to change for the customer? If we have all of these conversations and we come out with this shiny five-year plan, but then we change nothing about the products that we're building or how we are building, what was the point of that exercise? It made us feel good, and there's something to making us feel good. That is good, it's important for teams to feel good and connected and this is a good exercise for that, but it's so much more powerful when it's an exercise that translates into us doing something differently, whether that's prioritizing different products, whether that's changing our portfolio allocation, like moving people to the things we think are most important now versus things that are going to be less important right now. What's the change, or coming out with a strategy that'll align people because we have the story, we have the narrative, we have the sequence. What's going to change for our customers as a result of this strategy exercise?

**Lenny Rachitsky** (00:45:12):
Many people want to get better at strategy. Often their performance feedback is become more strategic, think better about strategy. What has helped you become a better strategic thinker? Is it just doing it? Is it a person that influenced you heavily? Is it a book? What has helped you and what do you often recommend to people to get better at this skill?

**Ami Vora** (00:45:30):
I think I got that same feedback quite a lot, actually, of needing to think bigger and be more visionary, etc. And I still do, frankly, actually, there's moments where I retrench way too far into execution and worry a little less about long-term strategy. So it's definitely my bias still.

**Ami Vora** (00:45:49):
The biggest thing that held me back from talking about strategy was I didn't feel confident that I knew enough to declare a strategy. It was actually almost like a self-confidence, imposter syndrome thing, where there were people who could just say, I know how the world is going to develop in the next five years, and let me tell you, here's where we're going to be, this is the dot on the map. And I was always like, how could anything could happen? Who would I be to say I know how the world's going to develop and here's where we're heading?

**Ami Vora** (00:46:21):
And so for me, a lot of it was actually learning the things that made me feel confident in my own opinion. And there's a bunch of things that do make me feel confident in my opinion. When I talk to specific customers and I feel like I can build an emulator for them, like a customer on my shoulder where I can say, oh, I talked to this person working in this job, here's what they would say if I showed them this product or this strategy. So, I think talking to customers is a big unlock for me and feeling like I have unique knowledge of the customer. I think working through different product iterations of, if we thought this was the right outcome, what would it really look like from a product perspective or a product portfolio in three to five years? And which of those seems right or rational or it will go the way I think the world goes. I think asking for other opinions. Sometimes I run surveys to the leadership team where I'm just like, what percentage of our revenue is going to come from small businesses versus big businesses in three years? And if we all agree on that topic, we should just take it as the truth and we should just fill it. If we disagree, then we should talk about it and we should talk about the strategic ramifications if we chose one path or the other path.

**Ami Vora** (00:47:35):
So for me, it was getting more comfortable having an opinion, honestly, about how the world was going to go, and also feeling comfortable that we would be able to change it when we learned that maybe that wasn't exactly right. We would have the machine, the execution machine behind it to try it out and then change and iterate and improve with customer feedback.

**Lenny Rachitsky** (00:47:59):
At which point in your career was this overcoming this fear and uncertainty? Was it sometime within Facebook?

**Ami Vora** (00:48:07):
It was sometime within Facebook. It was really when I was stepping into the bigger ads jobs, getting to be Head of Product for Facebook ads. I got feedback, I got a lot of feedback over the course of my career and some of the stacking of feedback was basically like, you could be the smartest person in the room, but it doesn't matter if people don't like you, which is very complicated feedback and I wouldn't give that feedback to anyone else, but I took it very seriously. It was coming from so many different places, it was coming from people I'm really trusted. And so I went out of my way to be more likable, which for me ended up being shrinking myself a little bit and not being so aggressive and not being so opinionated, being more unobjectionable.

**Ami Vora** (00:49:07):
And the weird part is that it worked for a long time. People were more likely to work with me, they were more likely to say nice things. I mean, I take this to extremes. I wore earth tones for two years because I was just like, I got to fade back a little bit. And then at some point I actually had to do a leadership job and my team was like, well, what do you think? What's your opinion? And I was like, you've been telling me not to have an opinion for so long. And so it took a little bit of work to get back to, oh yeah, I have a lot of opinions, I have a lot of thoughts. It is okay for me to express. It is needed, my team needs me to have these opinions and thoughts and be a leader who can take ownership and be visible.

**Lenny Rachitsky** (00:49:52):
Thanks for sharing that. Do you think that was the right approach, going and indexing far to the other end and then realizing that maybe that's too far, or do you think you would've done things differently looking back?

**Ami Vora** (00:50:05):
Yeah, it's one of my Roman empires. I think about this every so often, way too much, I think. Especially because I talked to other senior women who received similar feedback and chose not to act on it or did act on it, and what happened to their paths were different. I think where I landed is I wouldn't give that feedback to someone else. And the way I do give that feedback, actually, because I think there is a lot of really useful information in that. The way I do give that feedback is, you do need to be able to work with a broader range of people and the way to do that is to expand your tool sets. You're not going to make yourself smaller, you're not going to be any less of who you are, but you are going to build new tools, new keys to unlock new different kinds of doors. And that is only going to make you bigger and more powerful and more expansive. But the end outcome is the same, is that you can work with more different styles of people, more different styles of problems.

**Lenny Rachitsky** (00:51:08):
I love that framing. There's an episode that's going to come out before this episode with this professor from Stanford, Jeffrey Pfeffer, who teaches a class called The Path to Power, which is how to become powerful in the world. And he actually has a big lesson that many people hate hearing, which is, you don't need to be authentic in the workplace, what you're trying to achieve, you're trying to achieve stuff and you can do... You need to use tools that you need to use to achieve the thing you want to achieve. So sometimes don't be exactly who you are and act in a slightly different way, which is basically what you're describing.

**Ami Vora** (00:51:42):
More tools. I think that's a theme that's coming up, is just like, I'm all about more lenses, more keys, more tools in general because why not? Why not have access to more different styles of things?

**Lenny Rachitsky** (00:51:54):
Something that you were talking about subtly is the being a woman in tech and being a female leader. I imagine you've gone through some stuff that isn't what something men would've gone through. Is there anything there that you want to share or anything you've learned about just being really successful as a woman in tech?

**Ami Vora** (00:52:13):
I think we've talked through some of them. I think one, you get a different style of feedback and a lot of the ways to interpret that feedback. I think to this day, I get feedback that is about walking a very narrow tightrope where not only do you have to change a bunch of things and do a bunch of things that are important, you have to make people feel a certain way about how you do them and the ways that they want you to make you feel are diametrically opposite. Some people are going to be like, be more directive so that way everyone knows your thing. Some people are going to say be less directive so people can come to their own conclusions. Some people are going to say move faster because there's always more you can do. Some people are going to say move less fast because otherwise you're going to end up steamrolling people.

**Ami Vora** (00:52:57):
And a lot of it is personal, there's a bunch research about how women get a lot more personal feedback that is less about the content of their role and more about their style, I think that is still true and there's often a kernel of truth in it. For me, this is forever work. I do have biases toward execution and being directive and things like that, but I think learning how to interpret and respond to feedback has been a really important point for me and making my choices of, just because I'm getting feedback doesn't mean I immediately need to respond to all of it. There's a step in between where I can choose, is this feedback I want to take action on in this exact way? Am I going to look for more themes, take action in a different way, or am I going to say this is who I am and I understand the trade-offs, I'm going to do a better job of giving people context on the decisions I'm making and why I'm choosing these trade-offs. But actually this is part of how I want to operate and I'm going to keep on operating.

**Ami Vora** (00:54:01):
And then I think we just give women weird advice. Here's a hot take. I think we tell women things like, you need to find a mentor and you need to find a sponsor, and that's just another set of hoops that we have that we tell women to jump through that I don't think we tell other parts of the population to jump through. I think we tell women to unlock your future success, you've got to find somebody who has made all the same life decisions you have and who you look up to and relate to, but who also had an hour every month to be an oracle to tell you all the things you do in your life. And it feels like yet another burden where you're like, I don't know how to do that.

**Ami Vora** (00:54:45):
I had the extreme generosity of so many wonderful leaders who helped me on my way, but I didn't feel like I had this mentor and for a while it was just like, oh man, if I only had a mentor, I would know how to do all of this stuff and it felt like another weight that I needed to carry, which I didn't. I had everything I needed, people were so kind and generous, but I didn't recognize it that way because we talk about it differently.

**Lenny Rachitsky** (00:55:09):
Thank you for sharing all that. I wasn't planning on going in this direction, but this is such important advice for say, young women that are just getting started in the same product. Is there any advice you'd want to share to help them get to be the next Ami?

**Ami Vora** (00:55:23):
Oh, I mean number one, no next Ami, they're going to be their next themselves. That is maybe the most important thing, is everyone will only tell you their own story. That's all anyone can do, but the thing that I tell people is, don't dampen who you are and your strengths, just continue expanding. Whenever you run into a problem, just add more to the things that you can do, the tools that you have, the way you can express yourself. Just keep on adding and growing and don't shrink yourself, ever.

**Lenny Rachitsky** (00:55:57):
I love that. I want to move to a different topic. There's a few things I definitely wanted to touch on while we had our time together. One is that I hear, now this is going to be a total tangent, but I think it's really important and I'm excited to talk about it. I hear you're really good at setting goals and aligning incentives really well for teams. One of your colleagues told me you're best in class at building product orgs and figuring out how product orgs can best work with other teams. I'm curious if there's any tricks or lessons you can share here about what you've learned about how to do this well.

**Ami Vora** (00:56:27):
Yeah, I mean I think one thing is to try to decouple all the things we're trying to do. Sometimes when you give people direction, you're like, okay, everybody just go get revenue or everybody just go get GMV. And it seems obvious because that's the thing you have to do as a company, but there's only a few places where you are guaranteed to get that and it's measurable and you can do it. And that leads to what I call toddler soccer, where everybody just runs to the same surface or the same customer set or the same exact product where you can do this and it's measurable and you end up, everyone's tripping on each other, everyone's trying, nobody really gets contact on the ball, there's no coordination. I have three kids, I've watched a lot of toddlers play soccer. [inaudible 00:57:18], it's a very fresh, very fresh metaphor.

**Ami Vora** (00:57:20):
And instead, one of the things I like to do is just detangle, okay, as a company, let's think about our customers. Let's think about all the things they're going to need in their journey. Let's think about how we will know how we will match our own metrics to customer success. Let's play the entire field. What would it look like if we could detangle it so that every team we had internally had a different goal that ladders into a goal framework that's actually the thing that we need to do to solve the full customer impact? And then you don't have the same swim lanes problem. You have plenty of room for people to make progress on their lanes. They all know how they fit into the bigger picture, and it just opens up a lot more growth for every team and it makes sure that we're solving the customer problem end to end.

**Lenny Rachitsky** (00:58:11):
Is there an example that you could share to make this even more concrete from say, WhatsApp or Facebook or Instagram or anything like that, where you can share some of these goals that you've like, oh, this worked out really well? I know it's probably private information and partly-

**Ami Vora** (00:58:25):
It might be trickier. I mean, maybe going back to the GMV example. Maybe instead of motivating everyone on GMV, you motivate them on GMV per surface and you divide up the surfaces, or maybe you motivate them on actually different goals that underlie. When you think about GMV, what are all the various engagements, customer engagements that lead to GMV? Can you goal on those input metrics, can you goal on number of people who visit, number of people who convert, number of people who reorder, number, etc? Rather than going strictly on the output.

**Lenny Rachitsky** (00:58:59):
So the core advice here is each team should have different goals that are part of this metrics tree that ladder up to revenue, GMV, something like that?

**Ami Vora** (00:59:07):
Whatever, yeah. The thing that best matches the overall customer outcome that mirrors the company outcome as well.

**Lenny Rachitsky** (00:59:14):
Got it. And there's always this balance between it's actually the best metric versus it's something they can move and understand and it's easy to watch and it's movable and things like that, right?

**Ami Vora** (00:59:24):
Yeah, and you have to have faith that it is actually connected to that output metric. You don't want to create a metric that's disconnected just to make a team feel good. It really does need to solve the customer problem and that's reflected in company's performance, but you can usually break it down into smaller pieces and I think that breaking down into smaller pieces and assigning those out to teams, that's really helpful.

**Lenny Rachitsky** (00:59:46):
Is there anything else along these lines of things you've learned about helping teams work together and not play toddler soccer, beyond having different goals that all ladder up to the one that really matters?

**Ami Vora** (00:59:58):
I think there's value in also acknowledging that teams are going to have different incentives. Even inside a team like cross-functional teams on the same pod or whatever, are going to have different incentives, they're going to come in with different information, they're going to have disagreements. And certainly, different teams inside a company or different pillars inside a company, different products inside, they're all going to have different incentives, and I think sometimes that feels like something is going wrong when people disagree, but actually, that's just a sign of healthy tension and knowledge.

**Ami Vora** (01:00:34):
I think the thing that makes tension healthy is one, when you can acknowledge it and say, yeah, of course there's tension. You're bringing different information than I'm bringing. We should be disagreeing. No one's a bad person, no one is coming in with poor intent. Everyone's doing the thing they are supposed to do and that is a useful thing to do. And then you have to agree on an outcome that you're aiming for. If you disagree on what the company outcome is or what the customer outcome is, then you've got some structural stuff you need to work out and normally you just have to escalate it, but if you agree on like, we're all trying to move this metric by changing this customer experience, then all you're doing is having a conversation about the best way to do that using the different information that everyone is bringing. And I think that's super important to just have as a rational, open, explicit discussion, as opposed to trying to hide it or pocket vetoing or something else. Because you assume that when someone disagrees with you that, I don't know, there's something emotional or wrong about it.

**Lenny Rachitsky** (01:01:37):
But it's fascinating.

**Ami Vora** (01:01:40):
Exactly.

**Lenny Rachitsky** (01:01:41):
There's a piece of advice I once heard from the Head of Product at Airbnb once where we were trying to find, reorg the business and try to figure out the best org and his advice and something he realized is, there's never the best org, there's just the best idea we have at the time with the here's the things we know are not going to be optimal about it and let's build processes around that.

**Ami Vora** (01:01:59):
I think that's my take on leadership in general. Especially as you get more senior, you can only make bad decisions. At some point someone can bring you a problem, you can recognize a problem and you can solve it, and there's so much happiness in solving that and tying a bow around it. But as you get senior, the only problems you'll see are ones that are fundamentally unsolvable because otherwise, someone would've solved it before they got to you. And so all you're doing is choosing which branch of suboptimal you're going to put your name on and describing the principles you're using and the context and the fact that it's suboptimal, but it's still the best thing. I think that's a really hard thing, is just to recognize and acknowledge that increasingly people only see you do, make suboptimal decisions and from a distance they're just like, why is that person only making bad decisions? And it's because those are your only options. All you can do is choose the least bad, the best possible for the time, for the problem that's consistent that makes sense with the framework, and that's been a tough thing to learn too.

**Lenny Rachitsky** (01:03:10):
You said somewhere that as you get more senior, you get worse at everything because the problems get harder.

**Ami Vora** (01:03:14):
Yes, exactly. I mean, it's a kind of dark view of leadership where yeah, you can't fully solve problems, you have to say no a lot people are unhappy with you. I thought as you get more senior, everyone listens to you and they like you and you could just say a thing and then it happens and that is not at all accurate. It really is, most of the decisions you make are not going to be perfect.

**Ami Vora** (01:03:42):
And I think I'm all about just normalizing and acknowledging those hard truths because otherwise, I feel like I'm failing. And if I just know that something is normal that it's part of the job, then it's not me. It's just like, okay, this is a fact of the job that I have to get accustomed to if I want to have this kind of impact. And there's something about having the impact, being able to serve the customer, being able to be part of this team, there's something about it that is so worthwhile that it's worth being terrible at everything and being visibly terrible at everything because that is the best way that I have to have that kind of impact in the world.

**Lenny Rachitsky** (01:04:21):
I think this is really important for early ICPMs to hear because they see their CPO and founders making all these decisions and they're like, what the hell? That's a terrible idea, why are they doing this? What you're saying is just like it's the best... Options are limited and then-

**Ami Vora** (01:04:38):
[inaudible 01:04:38].

**Lenny Rachitsky** (01:04:38):
... nothing's going to be optimal.

**Ami Vora** (01:04:39):
Yeah, no org is optimal. It's definitely not. You can optimize for the people you have and you can optimize for the products you have, can optimize for the customers you have and you can optimize for the technology you have. Those are the options that you have, and in every one of those you trade off everything else. And so you just have to know, there's not going to be a perfect where all of it works and that's okay. That is part of the fun of it. That's part of getting to do this work, is continuing to improve, but it's hard. It's hard when people, it's hard, especially when you want everyone to think you're so great at everything.

**Lenny Rachitsky** (01:05:12):
This idea you mentioned of as a senior person solving people's problems, feeling really good, reminds me. Rolling to this, there's this Harvard Business Review article from the '70s or '80s or something about monkeys on your back. Have you read this or heard of this?

**Ami Vora** (01:05:24):
Oh yeah, yeah, I did.

**Lenny Rachitsky** (01:05:26):
Where it's basically like as a manager, [inaudible 01:05:28]-

**Ami Vora** (01:05:28):
You're trying to get monkey off of your back on people's backs?

**Lenny Rachitsky** (01:05:28):
Exactly.

**Ami Vora** (01:05:28):
Right, right, right.

**Lenny Rachitsky** (01:05:32):
People come to you, Ami, here's my monkey, please take it for me and feed it for me and take care of it. And your job as a leader is to keep the monkeys on people's backs and help them figure out how to feed this monkey themself.

**Ami Vora** (01:05:43):
It's a weird one.

**Lenny Rachitsky** (01:05:43):
To get it off their back. It's very visceral. I want to talk about Faire and your current role as a final section of our chat. First of all, what was it like starting something completely new after 15 years at Meta at the various properties of Meta?

**Ami Vora** (01:06:00):
Yeah, I mean, I was so lucky. I had such an amazing run at Meta. I got to work with amazing leaders, truly great products. And I came to Faire for the same reason that I've been anywhere, because I believe in the people and I believe in the mission. A lot of my family in India is in wholesale and local retail, which is what Faire does, and so it was also a very personal thing for me too. I felt like I knew those customers. I'm a huge fan of small businesses, I got to work with a bunch of them in previous jobs as well.

**Ami Vora** (01:06:30):
I would say coming to Faire, I mean, one of the things I always think about is that especially as you are more senior, ramping on anywhere feels terrible because you expect to be as good at your new job as you were when you left your last job, but you forget that at your last job, you were there for years, you had years to build up the vocabulary and the cultural context and the network and the product knowledge, and then you're stepping in somewhere where you know none of that, but you have the same expectations of yourself of being able to have an impact and improve things and help your team. And so I always just try to remind myself, it's going to take time and what's most important is not for me to try to come in and change everything immediately, but to learn enough to be able to change things like 60 or 90 or 120 days in the future. And so that breathing helps a little bit.

**Ami Vora** (01:07:29):
It was also really interesting because Faire was entirely new to me. It was a new business model, it was a whole new set of people. It was a whole new set of customer problems. And so every interaction I just had to learn so much. I had to learn, who is this person? How do they see the world? What's the problem they're talking to me about? What's the customer impact, I think? So it was just a dramatic learning curve, which I always really love.

**Ami Vora** (01:07:54):
Maybe the last thing I'd say is, again, I was super lucky at Meta. I think I always had this maybe deep-seated insecurity that maybe I was only good at Meta. Maybe there was something about that network of people and how great they were and how well I knew those products, and maybe I wouldn't be that successful somewhere without that scaffolding. And so leaving and being able to go somewhere else and lead through change and a new place, a new customer set, a new business model, that's also been really, really affirming for me, honestly.

**Lenny Rachitsky** (01:08:34):
Well, you have a lot of fans at Faire from the people I know there.

**Ami Vora** (01:08:36):
[inaudible 01:08:36].

**Lenny Rachitsky** (01:08:36):
And so clearly, things are going well, at least as far as I can tell. Something that I think is, Faire definitely has, and a lot of companies have, is a very product minded visionary founder. And CPOs classically last a year or two, and then they're like, ah, this sucks. The founder just tells me what to do and what's the point of this role? And it's so frustrating. I'm curious just what you've learned about, at least so far, about working with someone like that as a CPO and not just being this middle person between what the founder wants to do with the team, this building.

**Ami Vora** (01:09:09):
Yeah, I mean, this is going to sound so naive, but I literally didn't know how important it was for me to have such a great relationship with the CEO, because I always had great relation, I was lucky, I had great relationships with a lot of people at my previous jobs. I was like, oh, of course it's going to be fine, everyone's going to let me do what I want, whatever. And I think I just got really lucky because Max is an amazing CEO, who's also super growth mindset and super open to talking over ideas, even when they involve a lot of change.

**Ami Vora** (01:09:42):
So when I was onboarding, one of the things I always like to do is write a list of observations. I go out and talk to, I have one-on-ones with a lot of people, and I write, here's the themes that I'm hearing. Here's what's going well, here's what's not going well. And that's a way for me to both share what I'm seeing and build some credibility and trust that way, but also for people to give me feedback and be like, oh, you're wrong about this, just so I can correct my starting point of knowledge.

**Ami Vora** (01:10:10):
And with Max, I also wrote a parallel document of hot takes. So once a quarter or so for the first year, I'd write a document that was just like, hey, for sake of provocation, if we wanted to fundamentally change a few things, here's ideas on what we could fundamentally change. And Max, very, very well could have just been like, hey, can you please just run product? That's you're job, can you please do that? And instead, he and the entire rest of the executive team were like, yeah, let's step through these. Let's talk about which of these we should try, let's talk about maybe context you don't have for why these don't make sense or why we don't do these. And that was such a gift because I was able to build such a great relationship, a trusting and complimentary relationship with Max and the rest of the exec team, and also that he took seriously things that he really didn't have to that I have so much respect for that, and I think I got really lucky in just finding a great CEO and exec team.

**Lenny Rachitsky** (01:11:18):
Is there anything you learned about this vetting process? Say you're a founder looking for a head of product, A CPO, any advice for how they might vet this person to make sure they are good fit and will last?

**Ami Vora** (01:11:32):
What I'd say to everyone else is, make sure you just have a mind meld with a CEO. Before you decide to take the job, spend a day together, understand how they think and how they operate, and whether you're going to work together in a way that feels really high fidelity and high trust and you're going to have room. I mean, I'm not a founder by any stretch and so when founders ask me what should I look for in a head of product or CPO, I say something a little bit different, which is, make sure that you really need the level of seniority that you are hiring. I think that a lot of founders think, I need a CPO, I need a VP of product, I need someone who's really senior, when often the founder has a bunch of the vision and knowledge, and what they really need is somebody to build the product. They don't need somebody who's going to scale the team or build systems like they've got enough of that. And so that to me is part of building that complimentary relationship where the founder and CEO know what they need and on the CPO side, they know that they can mind meld enough with the CEO to actually have an impact.

**Lenny Rachitsky** (01:12:41):
Last question. You started as an intern in the PR department, I think, at Meta?

**Ami Vora** (01:12:47):
Oh, I started as a temp, actually.

**Lenny Rachitsky** (01:12:51):
At temp, okay, amazing. And then you ended up leading Facebook ads and then WhatsApp and many other things. Can you share that story of just how you joined and how that happened?

**Ami Vora** (01:12:59):
Well, I had quit my last job. I knew that what I wanted to do was be involved in all the wild stuff happening in Silicon Valley in the mid 2000s. So I'd quit my last job, I was traveling around the world a little bit. I was living in New York, an extremely blissful lifestyle. I was unemployed, I was doing whatever I wanted. It was some of the best time I've had in my life, and eventually I needed a job, like you do. But it was 2007 and the only place I wanted to work was Facebook. You could hear the way people talked about these products. People would say Facebook is more important than than my car. It's like how I connect with the world. It was such a magical product, and you could hear that.

**Ami Vora** (01:13:51):
And I knew some people at the company and I convinced one of them to introduce me to everyone at the office. I'd made a trade, I said, I'll buy you a fancy coffee at Coupa Cafe in downtown Palo Alto, and in exchange just introduced me to everyone, everyone you know, take me around the office. So everyone I met, I said, "Hey, I'm Ami, I really want to work here. I'll do whatever you need." And the only call I got back was from the Head of PR, Brandy Barker, who said, "Look, we can't hire you. We didn't interview you. We don't have headcount. You're not really qualified." It was just like 10 reasons. I was like, okay, thank you for calling me. And she said, "But we need a temp to review our press releases, so if you want to come join a temp agency, we'll tell them to send you here." And that's what I did, I moved out to California and I slept on people's couches and eventually they hired me full time and I didn't look back.

**Lenny Rachitsky** (01:14:50):
And now you're on Lenny's podcast, what a run. It's interesting, this reminds me of another path to power rule from the Jeffrey PFeffer podcast, of networking is one of the best ways to acquire power in the world. So it's interesting that now that seed has planted in my head. Anyway, just A plug for that other episode also.

**Lenny Rachitsky** (01:15:06):
Ami, is there anything else that you wanted to share or leave listeners with before we get to a very exciting lightning round?

**Ami Vora** (01:15:13):
Sometimes people ask me who are working in product, what's the one thing they should do to be successful at product? And maybe the thing I would say is, especially as an org scale or a company scales, there's just a lot of distractions that get between you and the customer. And so the one thing that I would just advise everyone to do is just think about the customer, talk to the customer, be an advocate for them. It's such a shortcut to everything else you need to do in order to be successful, but it's so easy for that to get lost when you're thinking about, okay, how do I get alignment on my team? How do I figure out my roadmap? How do I convince people to join the company? There's all these different things, but fundamentally, we're here to create value for the customer. And the closer you can get to that, I always found myself the happiest because I'm building that feedback loop with the customer, but also more successful.

**Lenny Rachitsky** (01:16:09):
Well, let me actually follow up on this because this is really important and interesting. There's a PM part of my brain of like, okay, but we also got to move some metrics and sometimes that metric isn't going to be moved by, we need to do something specifically for the customer, but it's something that will help the business. Is there anything there of just that balance of like, we need to move over this conversion metric, versus, let's focus fully on what does the customer want and need? Any thoughts there?

**Ami Vora** (01:16:34):
Yeah, I think we often make things adversarial that are not actually adversarial. It is very rare for customer value to be different than a company value on a long enough time horizon. There might be short-term divergences, but really, to solve, to create value for the customer, you got to be around as a business, otherwise you are creating zero value for the customer. And so I think really, just starting with the, what are the end goals and where does stuff diverge in the very short term versus the medium term versus in the long term? It shouldn't, and really thinking about where you are in the journey and how to place that. That always helps me because our metrics should absolutely be about long-term customer impact. It's very rare if those aren't, and then you're still able to be successful.

**Lenny Rachitsky** (01:17:26):
It comes back to our chat about metrics and how to do those well.

**Lenny Rachitsky** (01:17:29):
With that, we've reached our very exciting lightning round.

**Ami Vora** (01:17:32):
Cool, I'm ready.

**Lenny Rachitsky** (01:17:34):
Here we go. First question, what are two or three books that you've recommended most to other people?

**Ami Vora** (01:17:39):
The Year of Yes, by Shonda Rhimes. I almost never read nonfiction. I love Shonda Rhimes, made an exception for this one. It's about just saying yes to things and finding your voice when you do feel like you're sometimes the first or the only or the different, and what that feels like. And it was very life-changing for me, actually.

**Lenny Rachitsky** (01:18:00):
That's an awesome pick. No one has recommended that one yet. Reminds me of an episode of Matthew Dicks, who has a Ted Talk about saying yes to everything.

**Ami Vora** (01:18:00):
Really?

**Lenny Rachitsky** (01:18:07):
He just says, Chris, to say yes to everything and his life is incredibly interesting as a result. Next question, do you have a favorite recent movie or TV show you really enjoyed?

**Ami Vora** (01:18:17):
I watch a lot of witty workplace comedies from the mid 2000s. So I watch a lot of The Office or 30 Rock reruns. Things are just very comfortable that I already know everything, there's no surprises. I'm not great with new stuff right now.

**Lenny Rachitsky** (01:18:33):
I heard they're bringing back The Office. There's a reboot happening.

**Ami Vora** (01:18:36):
Oh really? Let's see.

**Lenny Rachitsky** (01:18:38):
Yeah, exactly. Is there a favorite product you've recently discovered that you love, either digital, physical, anything?

**Ami Vora** (01:18:47):
Maybe a physical product that I really like. I drink a lot of coffee and tea through the day and it's just, I don't know, a calming ritual. And so I have a Fellow's electric kettle, that was my big work from home upgrade. So I have this life for kettle, I have a pour over kit. I have these lovely colorful mugs that I like, that has actually just made my day-to-day a lot better, is just a little feeling of luxury.

**Lenny Rachitsky** (01:19:16):
I love that. I think we have that same kettle. I also drink tea during every episode I have here.

**Ami Vora** (01:19:19):
Oh, yeah. You know it.

**Lenny Rachitsky** (01:19:21):
So we're on the same page. Next question. Do you have a favorite life motto that you often think about, come back to, share with friends or family, in work or in life?

**Ami Vora** (01:19:30):
It is definitely not a motto. I feel like I know people have mottos and I'm so impressed. I'm like, you know what you are, you know what you need. I am not that person, but I have a piece of advice that someone gave me very early in my career. Actually, it was Chamath, he said, "You can either have more energy or less ambition." And I was like, oh, that's a little harsh, but also really true. And I think about that, it's another of my Roman empires. I think about it all the time where I'm like, okay, if I want to have this kind of impact, I'm going to have to do the work, I'm going to have to try new things, I'm going to have to feel uncomfortable, and sometimes I don't want to do those things. I don't want to do all of that work, and then I can't be mad if I'm not having the impact. Those two just have to go together. I also have to get lucky in all these different ways, but the two have to go together and that's been just a good governor, a little bit, of how I think about what I'm putting in.

**Lenny Rachitsky** (01:20:26):
I love that quote. By the way, if people don't know what you're talking about when you talk about the Roman Empires, there's a meme on TikTok where somebody said that every man thinks about the Roman Empire at least once a week. Right?

**Ami Vora** (01:20:39):
It's made me think about, what are all the things I think about repeatedly without really having trigger or reason? And there's still a lot. I don't think about the Roman Empire though. That is not one of them.

**Lenny Rachitsky** (01:20:49):
I also don't think about the Roman Empires, something's wrong with me. Okay, final question. You can blame your colleague Barr for this question. He tells me that you are very good at jokes, you tell very good jokes. Do you have a joke that you want to share by any chance?

**Ami Vora** (01:21:06):
I love jokes. There was a year at Facebook where I posted a joke of the week to the company and they're all terrible.

**Lenny Rachitsky** (01:21:15):
To the company.

**Ami Vora** (01:21:19):
Yeah, exactly. All right. Here's my favorite joke.

**Lenny Rachitsky** (01:21:22):
Great.

**Ami Vora** (01:21:24):
Why don't sharks eat clowns?

**Lenny Rachitsky** (01:21:26):
Why?

**Ami Vora** (01:21:27):
Because they taste funny. I'll tell you one more and you can choose one, you can choose which one. All right.

**Lenny Rachitsky** (01:21:33):
No, we're not cutting anything.

**Ami Vora** (01:21:36):
What did the zero say to the eight?

**Lenny Rachitsky** (01:21:38):
What did the zero say to the eight? Something like us. Okay, no, I don't know.

**Ami Vora** (01:21:43):
Nice belt.

**Lenny Rachitsky** (01:21:44):
Nice what?

**Ami Vora** (01:21:45):
Belt.

**Lenny Rachitsky** (01:21:46):
Belt. Oh, I got it.

**Ami Vora** (01:21:51):
[inaudible 01:21:51].

**Lenny Rachitsky** (01:21:53):
I get it, I get it. I'm going to tell you a joke. I just heard a standup share. How do you turn an egg into a vegetable?

**Ami Vora** (01:22:02):
I feel like if you put a letter on it'll turn into a vegetable name, but I can't think of the letter.

**Lenny Rachitsky** (01:22:06):
I love that you're really trying to analyze it and get there because I don't know if it's ever possible to actually get the answer. Okay, so how do you turn an egg into a vegetable? Squash.

**Ami Vora** (01:22:17):
That is definitely my level of joke, definitely.

**Lenny Rachitsky** (01:22:20):
They're like, this is for your kid. Go home and do this joke.

**Lenny Rachitsky** (01:22:24):
Ami, this was everything I hoped it would be. I'm going to read again the goal you had for this podcast, I 100% think we achieved it. To be as authentic as possible and show that people can be pretty messy and imperfect at times, yet still be very successful. I think exactly what this podcast ended up being. Thank you so much for being here.

**Lenny Rachitsky** (01:22:40):
Two final questions. Where can folks find you online if they want to reach out and learn more, and how can listeners be useful to you?

**Ami Vora** (01:22:46):
Oh, thank you, Lenny. It's been such a pleasure. I write a blog on Substack at amiboard@substack.com. It's called The Hard Parts of Growth, it's just about how even when you're working in great places with great people at great companies, sometimes things are hard and that's normal. And so you can find me there. I do the same, I crosspost to LinkedIn so you can find me there. And how can people be helpful to me? I don't know, just by being great, by being kind and nice and making the world slightly better. Yeah, I think that's what we can all do.

**Lenny Rachitsky** (01:23:17):
I love that, and I will link to your Substack in the show notes, so if where people want to check it out, and I'll recommend it. I haven't done it yet, but I'm going to recommend it for my Substack.

**Ami Vora** (01:23:25):
Thank you, Lenny, so much. This was such a fun conversation. I've really enjoyed it.

**Lenny Rachitsky** (01:23:29):
I loved it. Ami, thank you so much for being here. Bye, everyone.

**Ami Vora** (01:23:33):
Bye.

**Lenny Rachitsky** (01:23:35):
Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show lennyspodcast.com. See you in the next episode.

---

## [20/21] The social radar: Y Combinator’s secret weapon | Jessica Livingston (co-founder of Y Combinator, author, podcast host)

**Lenny Rachitsky** (00:00:00):
I want to start with a quote by someone you may know, Paul Graham, "Much of what's novel about YC is due to Jessica Livingston. If you don't know her, you don't understand YC."

**Jessica Livingston** (00:00:10):
My three co-founders were deeply technical, but I would look at other things about founders. All these little social cues.

**Lenny Rachitsky** (00:00:17):
Your nickname was the Social Radar. Every interview, everyone always turned to you and they're like, "Jessica, what does their social radar say?"

**Jessica Livingston** (00:00:24):
I would look at, do the co-founders get along? Are these people committed? And if a founder would get defensive, that was always a bad sign.

**Lenny Rachitsky** (00:00:33):
Is there anything else along the Airbnb story that would be interesting to share?

**Jessica Livingston** (00:00:36):
He hated their idea, and Paul tried to get Brian and Joe and Nate to change it. But I remember specifically Joe brought out the cereal boxes, the Obama O's and Cap'n McCain's, and I just thought, oh my God, they're going to work hard to do whatever they can to make this company succeed.

**Lenny Rachitsky** (00:00:52):
You just talk a bit about this idea of just making shit happen, showing signs of being hustlers.

**Jessica Livingston** (00:00:56):
Do you sort of need that desperation. You have to burn the boat.

**Lenny Rachitsky** (00:01:03):
Today, my guest is Jessica Livingston. Jessica is the co-founder of Y Combinator, the first and most famous startup accelerator, which since 2005 has funded over 5,000 companies, including over 200 unicorns now worth over a billion dollars, including companies like Airbnb, Stripe, DoorDash, Coinbase, Dropbox, Instacart, Reddit, the list goes on. Jessica is also the author of one of the bestselling books about startups, Founders at Work, and hosts the Social Radars Podcast. She lives in England with her husband, who you may know, and her two sons. In our conversation, we dive deep into Jessica's superpower of being the Social Radar. She got this nickname in the early days of YC because she can read people incredibly well. This becomes a huge unfair advantage when you're evaluating and investing in early stage startups and founders, but also becomes useful in every part of your life. There's actually a quiz that I'm going to link to in the show notes called Reading the Mind in the Eyes that I suggest you take to see how you do, and it'll give you a sense of how well you are at reading people.

**Jessica Livingston** (00:02:50):
Thanks, Lenny. I'm glad to be here.

**Lenny Rachitsky** (00:02:52):
I want to start with a quote by someone you may know, Paul Graham. So he wrote, "A few months ago an article about Y Combinator said that early on it had been a one-man show. It's sadly common to read that sort of thing, but the problem with that description is not just that it's unfair, it's also misleading. Much of what's novel about YC is due to Jessica Livingston. If you don't know her, you don't understand YC." I'm hoping with this conversation we help a lot more people understand you. Kind of an implication of this quote that I wanted to ask you about is that there's an implication that you've never gotten the credit that you deserve for starting YC, for helping YC become what it's become. I'm just curious what that's been like for you.

**Jessica Livingston** (00:03:41):
It's sort of a hard question. It is true, I was one of the co-founders of Y Combinator, and yet I'm often sort of left out of news articles, Wikipedia people want to take my entry off of Wikipedia all the time. I'm not as notable and I'm sort of like, "Gosh, I'm a founder of Y Combinator, author of a best-selling book on startups. What does a girl have to do?" But it is what it is. It's the external views, and it doesn't matter to me. Do you know what I mean? People within YC know what I've done, the Y Combinator alumni know what I've done, my friends and family and people I respect in the Silicon Valley community know what I've done, most of them do. So that's fine.

**Jessica Livingston** (00:04:35):
But it is true, I've often been sort of erased, and in some cases it's annoying because it's a lot of people who have a certain narrative about Y Combinator that don't want me to exist, I'm maybe making that up a little bit, or the people that don't want me to be part of the narrative are the ones that think that Y Combinator, it's run by white men, only invests in white men. And gosh, if there was a woman on the founding team making choices of who to fund, that would undermine their narrative. So I think sometimes that's what happens too.

**Lenny Rachitsky** (00:05:15):
Fascinating. Just a convenient story to tell sometimes.

**Jessica Livingston** (00:08:13):
I will try Lenny, I will try. I don't talk much about it because it's hard to talk about. I don't understand. It's hard to put into words exactly what it is about me, but it's true that my nickname at Y Combinator was the Social Radar. And I think it was because my three co-founders were deeply technical people, and I was not. But I would look at other things about founders. When we'd have these 10-minute interviews, I would look at, do the co-founders get along? Are these people committed? Do they really know about their product? Do they care? Are they going to quit their job? Or are they telling us that they are going to quit their job, but really aren't? All these little social cues that I'd try to pick up on.

**Jessica Livingston** (00:09:10):
And in a lot of cases, red flags about them that I'd add to the decision-making process. And so that's why they called me the Social Radar, and it just sort of stuck. And it's because I love people and the dynamics and understanding what's motivating people. I just love it and I love founder psychology, founders personalities. I am absolutely fascinated with it.

**Lenny Rachitsky** (00:09:38):
I love it. Okay, so we're going to try to unpack as much as we can with the context that you're not exactly sure if you're able to articulate exactly how this power of yours works.

**Jessica Livingston** (00:09:46):
Yes.

**Lenny Rachitsky** (00:09:48):
There's this line you wrote somewhere, and Paul's written this, and other people, that every interview that you all did early on at YC, everyone always turned to you and they're like, "Jessica, what do you think? What does their social radar say?" Can you just talk a bit about that role that you played in the early days of YC of kind of seeing that side of candidates?

**Jessica Livingston** (00:10:06):
Well, in the early days, especially before I knew a lot, as much as I know now, about startups and founders, early on, I was learning a lot in the first few years. And in the first few years, it was just the four of us. So I would be in charge of going out telling people, "Wait here while we do the interview, come on in." I'd be in charge of the stopwatch that would time us. And I'd say, "Okay, our time's up." And it was very administrative, and I would observe. Paul, Robert and Trevor, my co-founders would be asking them all sorts of questions about their product and their technology and blah, blah, blah, blah, blah. I would occasionally ask questions, but I'd usually remain pretty silent. And so I don't think people even really noticed me. But I would be just watching them and sort of trying to observe as much as I could, not understanding sometimes even the technology that they were talking about. I let my co-founders do that.

**Jessica Livingston** (00:11:06):
And then after, we'd be talking, they'd look at me and they'd be like, "Should we fund them? Jessica, should we fund them?" And sometimes I could tell based on the conversation whether they thought that the technology was good or how they felt, and sometimes I'd say, "Absolutely we should." Or sometimes I'd say, "Guys, I'm a little nervous. Did you see how that founder interrupted the other founder and wouldn't let the other founder talk?" Because my three co-founders sometimes wouldn't notice this.

**Jessica Livingston** (00:11:39):
They'd be so caught up in the conversation they were having about the technology, especially Paul. Paul would get really into things. And sometimes I always tease Paul, because one of his defining qualities is that sometimes someone would have an idea that he'd get so excited about that by the end of the interview he'd be giving them ideas about how to grow their product and what they could become. And they'd sit there saying, "Yeah, yeah, that's a great idea." And then he'd say, "Fund them." And I'd say, "Whoa, whoa, whoa, Paul, you can't just fund this because you love the idea. Let's take a step back and let's look. Like these two founders are working at Google and they don't say they're going to quit. That's not good." And I'd point out these things that I had observed. But I mean, we always agreed. It was very rare that we wouldn't agree on funding something. We were usually on the same page.

**Lenny Rachitsky** (00:12:33):
I see. It's interesting that you talk about these behaviors, co-founders interrupting each other, or being kind of aggressive here and there. Some people believe that's okay for founders to be like this. A lot of successful founders, Elon, for example, Steve Jobs, who are kind of assholes a lot of times, I imagine, and I've read part of the reason you thought about just the type of person is you're trying to build a specific culture in the early days of YC and you're going to be around these people. So maybe can you talk a bit about just why those elements were important to you and why'd you look for those?

**Jessica Livingston** (00:13:08):
I've definitely heard that Steve Jobs could be an. I've heard stories. But I think I would've funded him because he's so incredible and he was so smart and so interested in the product and knew... I'm very persuaded by people who know what they're talking about and love their product and are domain experts. But I did consciously, especially early on, less so later on, early on, I did sometimes tend to say, "I really think this person's an asshole, I do not want to fund them." And we often wouldn't. And very early on when we were just funding 10, 20, 30 startups a batch, sometimes I have been known to say, "I don't know if I can have dinner with them every week." It was that point. And I don't think we've ever regretted any of those. It didn't happen all the time, that was rare. But life's too short, and I wanted to be able to work with these founders.

**Jessica Livingston** (00:14:16):
And as it turns out, it was sort of important early on in weeding out explicit assholes because that was the basis of our Y Combinator community, which is now thousands of founders. Now, of course, all the founders aren't all running their company anymore, but I would say most all of the founders bring something useful and valuable to the table. So if you ask a question on Bookface, on our forum for founders, someone is going to be there to help you. And it's amazing. And that all started very early on, there was this culture of older batch mates helping newer ones, and this pay-it-forward mentality where everyone helped one another and rooted for one another and made introductions for each other. And I think it's a big part of our Y Combinator community now.

**Lenny Rachitsky** (00:15:12):
So I wrote down a few of the things that you mentioned you look for, and you looked for in the early days. So let me just share a few of them and let's spend a little more time here. So you looked for, did the founders get along? Are they committed to the idea? Are they ready to quit their job? Are there any red flags? So is there anything else that you remember you spent a lot of time thinking about or looking for then or even now?

**Jessica Livingston** (00:15:36):
There's looking for in the application and then there's looking for in the interview, and now we have software that looks for all of the red flags in the application that I used to do by hand. In the application, I'd look for just weird things, like was there a huge gap in the equity allocation? Did one founder have 99% and one founder have 1%? That's weird. I'd want to dig in on that. That doesn't feel right. Are they going to quit their job? Are they going to move to Silicon Valley? What are their current shareholders? Is like 90% of their company already owned by someone else? There all these weird things that we like to just flag. And we wouldn't necessarily not fund someone because of them, but it's just more data. So that was in the application that I'd look through all of those.

**Jessica Livingston** (00:16:33):
But in the interview I definitely was sort of, one thing I remember I would always look for was, when you'd have a conversation with us, a lot of times, Paul especially, but Robert and Trevor, would really be getting right into the idea and questioning you, and how do you know this? And what about this? And if a founder would get defensive, that was always a bad sign, always a bad sign. The best founders would say, "Gosh, I have thought about it and here's what I figured out." Or, they just have this almost a tennis match and a conversation rather than closing up and feeling like, oh, this person's interrogating me. You could just sort of, the open-mindedness, the flexible-mindedness of people was really important. I'd get really excited about domain expertise. Like my co-founders, we all loved that. If someone was fixing their own problem in a broken industry, we loved that.

**Jessica Livingston** (00:17:39):
Definitely, I'd look for co-founder relationships. And again, I'm not saying I was always right, but you could tell if... One founder, I'll give a story, one founder, once we asked a question and one person started to respond and the other founder put his arm in front of him and said, "I'll answer that question." And it was just so weird that he wouldn't let his co-founder speak. We'd have situations where we'd call people like hackers in a cage, where it's kind of obvious there'd be a business founder, business person, who had clearly convinced a programmer to join the team. They were given, the programmer was given, very little equity and just we called them programmers in a cage, like hackers in a cage. And sometimes that works out, I'm not saying it doesn't. But I'd always try to observe, okay, does this hacker in a cage have any say in the company, the direction of the product? That sort of thing. Because the programmer needs to have opinions.

**Lenny Rachitsky** (00:18:50):
It's so funny. I love this metaphor. And I totally get what you mean. I want to unpack a couple of these, because this is exactly where I was hoping we'd go. So this idea of looking for defensiveness and being open to change and being flexible, why do you think that was so important to successful founders? Why did you look for that? Why was that a predictor of success?

**Jessica Livingston** (00:19:10):
Several things. First of all, being defensive is really bad, if you're a startup founder, because you're always going to get people who question you. And it's your job to educate them, if it's a new area, you're doing something presumably pretty new, you're always going to have people who question it or say, "That product's already out there, why is yours better?" You have to educate them. You don't want to be defensive about it. Also, a lot of times, the first idea isn't bang right on, the right idea, and you have to be open-minded and maybe adjust it in a certain direction. The famous PayPal story, how it started off being the PalmPilot, or money transfer. And money transfer between the PalmPilots or whatever. And then all the customers were using a janky version on the web, and they were begging for this to be on the web. And finally, the founder said, "Oh, I see what most people want this for." You have to be open-minded to see what direction really is what your users want. And so if you find someone is defensive, usually they're not open-minded.

**Jessica Livingston** (00:20:26):
The other thing is that the best founders will want to learn from other people and listen to other people. You talk to the Collison brothers and say something, they ask you a question, they're listening to your answer. So many founders think, oh, I can't learn from anyone. But the best founders are always listening and having spirited debates about things. I mean, that's part of the process. And so I think when someone's defensive, it's just a bad sign. So I would look for that.

**Jessica Livingston** (00:21:01):
I loved when I'd find someone sort of showcase that they'd make something happen no matter what; they're scrappy, they're hustlers. I remember... Can I tell the story about the Airbnb interview?

**Lenny Rachitsky** (00:21:17):
Please.

**Jessica Livingston** (00:21:17):
Okay, because that was definitely one I'll never forget. That was one that was clear the founders were really good. The market had just crashed basically with all the banks going out of business and everything. And so we were only funding startups that we felt had really scrappy founders and could be cockroaches, meaning could live off of very little amounts of money, or could charge customers and make money. And we didn't fund that many people in that winter '09 batch. So we're being very strict with ourselves, very disciplined about things. And the Airbnb guys came in, and I just remember they had a contagious amount of energy. They just had an energy about them the way that they talked about their product, which was crazy at the time, staying in someone's bed or airbed. In fact, it's a famous part of the story, we hated their idea and Paul tried to get Brian and Joe and Nate to change it. So we didn't even like the idea. But I remember specifically they brought, at the end, Joe brought out these, the cereal boxes, the Obama O's and Cap'n Crunch's or Cap'n McCain's or whatever.

**Lenny Rachitsky** (00:22:33):
Cap'n McCain's, yeah.

**Jessica Livingston** (00:22:34):
Yeah, Cap'n McCain's. They were saying that they went to some Costco or something and bought off-brand Cheerios and off-brand Cap'n Crunch's, took them out of the box, put them in this new box, glue-gunned it shut. And I just thought, oh my God, these guys are really going to great lengths for this. And for some reason, it was silly, but it really appealed to me. They're going to work hard to do whatever they can to make this company succeed. And even though we were skeptical about the idea, I think we definitely made the right bet on the founders, and it was just very clear in that interview.

**Lenny Rachitsky** (00:23:17):
I'm so happy you shared that story, I was definitely going to ask about it. It's so funny because I've heard that story at least a hundred times working at Airbnb, they tell the beginning of Airbnb every chance they get at every all-hands. It's like a recurring theme. And it's great to hear that basically it went exactly the way they describe. Oftentimes, there's a myth around what happened, but that's exactly how they describe it.

**Jessica Livingston** (00:23:41):
No, it was definitely a whole crazy story and how Paul called them to accept them, and they were on the 280 or something or the 101 and the reception went down. And so he didn't hear if they were accepted or not. Did he tell that part?

**Lenny Rachitsky** (00:23:58):
No, I haven't heard that part.

**Jessica Livingston** (00:23:58):
Oh yeah, that's part of the story. And they had to keep driving to get to talk to Paul again and find out that they were accepted. Oh, yeah. It was just a crazy interview.

**Lenny Rachitsky** (00:24:09):
The element of the story I'm also curious about is, the way Joe tells it, is he had the box in his backpack. And as they were walking out, Paul or you is like, "Hey, what's that? What's that cereal box doing there?" Is that how it went, or is it more like, "Hey, we have this cereal thing."?

**Jessica Livingston** (00:24:24):
I don't think Paul and I looked in his backpack and asked. I think there was definitely some pressure on Joe not to show us the cereal boxes. I think Nate was really down on that, especially. And I think they were walking out the door and they're like, "Hey, we just brought you a little something." I think Joe did pull it out, and we had an extra minute or so around the cereal boxes. That's how I heard about the glue gun story and everything. But I think Joe had been reluctant, but he did it at the end and I think it was a good call.

**Lenny Rachitsky** (00:25:00):
That's so funny. And after that meeting, what was that conversation like between you and Paul? Was it just like everyone's like, "We definitely got to do this."? Or was it like you being like, "Hey, these guys are really interesting."?

**Jessica Livingston** (00:25:10):
No, I think we all liked them. We all liked them. But I remember saying, "We have got to..." I just remember being like, "We've got to fund these guys. I don't know about the idea. Maybe they'll change their idea, who knows? But they seem really great." Again, the energy level and the passion with which they spoke about their experience hosting, because they'd been around struggling, but had been a company with an idea for a little while before they applied to YC. We were there basically their Hail Mary, their last resort for them. And so they could tell us about their story about how they hosted the people at a conference, and there was definitely some magic to it, which was convincing.

**Lenny Rachitsky** (00:25:57):
Is there anything else along the Airbnb story that would be interesting to share while we're on that topic?

**Jessica Livingston** (00:26:01):
I mean, the only interesting thing as it relates to being the social radar is that there were just some interviews that I remember because I just thought, this is great. These founders are so good. I'm totally convinced. What they're working on might not work, but I feel like it's so worth the bet based on these founders. And that happened. There were definitely a couple other of our most successful companies that I clearly felt that way about. You just feel like they know what they're talking about, they thought about the problem. They're not solving this problem because it's sort of the problem du jour or fun and exciting. Some are very unsexy problems like when Parker Conrad applied with Zenefits, unsexy HR stuff, benefits stuff. But he knew how broken it was and was trying to fix it. And I love stories like that. There was one story in terms of... The one time I did sort of persuade the rest of the group to fund someone was, do you know the company GOAT, the sneaker?

**Lenny Rachitsky** (00:27:13):
Absolutely.

**Jessica Livingston** (00:27:13):
Okay. When Eddie and Daishin applied, they were not doing the sneaker company, they were doing this group sort of book-a-group-dinner at a restaurant with people you don't know as a way to meet new people. And for some reason, I loved the idea because I thought maybe it could be a secret dating, like a Trojan Horse for a dating sort of site. But I really loved the two founders. And one of the reasons, again, they had this passion about their idea, but they had had this cream puff company before that they had run, and they just told these stories about how hard it was and all this stuff. And I, for some reason, just thought, these are hustlers. These guys are scrappy. They're going to make this succeed. And they didn't make that company succeed, but they pivoted and made GOAT succeed and it's doing really, really well. And I remember that one I definitely had to convince... I mean, not that Paul, Robert and Trevor didn't like them, but I think they really didn't think the idea was that great or just sort of were meh. I was like, "We have to fund them."

**Lenny Rachitsky** (00:28:24):
I love sharing these stories. If you have more to share, please keep throwing them out there.

**Lenny Rachitsky** (00:28:27):
So a few things I've noted so far, of things that you look for, and I think it's important to note this is very early stage evaluation where the founder and the team is, it's incredibly important, because the idea often shifts.

**Jessica Livingston** (00:28:42):
Oh, yeah. This is as early as it gets, Lenny.

**Lenny Rachitsky** (00:28:43):
Yeah. Oftentimes, just an idea, I imagine.

**Jessica Livingston** (00:28:47):
Yes.

**Lenny Rachitsky** (00:28:48):
So a few things, so far, things that you found to be really valuable to look for. One is this idea of just making shit happen, showing signs of being hustlers, just getting shit done, Obama O's, things like that. And then I think along the same lines, just passion for this idea and just like almost charisma. Is that how you think about it? Or is it just like...

**Jessica Livingston** (00:29:11):
I hate using the word charisma because there are a lot of charismatic people who are full of baloney, and are just doing a startup because it's a cool thing to do now. And I wouldn't want anyone to get fooled by charisma. There has to be some substance behind that charisma. Of course, we all love talking to more charismatic people than less, and I've certainly talked to my fair share of totally uncharismatic people, but sometimes they're really good founders too. If they know what they're doing and care about the user and are fixing a problem that they have a deep connection to. So I don't want to say someone who's charismatic, but it definitely helps because, as you know, as a founder, you have to do a lot of sales and you have to recruit people and you have to convince investors to fund you and you have to convince users to use your product and all of this stuff. So it does help being charismatic, definitely.

**Lenny Rachitsky** (00:30:19):
Okay. So there's being super hustler, making shit happen. Domain expertise, something you've mentioned a few times. Just like having deep domain expertise in an area, and I think that's probably where they probably don't pivot oftentimes, where they've actually have experience in that specific problem.

**Jessica Livingston** (00:30:33):
They might pivot a little bit, they might pivot a little in terms of the actual solution. They might be trying to solve a problem and the first attempt doesn't really work. I haven't mentioned earnestness though.

**Lenny Rachitsky** (00:30:45):
Oh, do tell.

**Jessica Livingston** (00:30:47):
Earnestness is one of the most important because earnest, sort of to me, is bucketed with authenticity. And to be a successful startup founder, you have to care so much about the problem you're trying to solve, the users you're serving and being earnest about it is so key to success. There are so many wannabe founders, so many people doing it because it's cool or they think this idea is cool, but they don't really, deep down, have what it takes. And I think we always try to fund earnest people.

**Lenny Rachitsky** (00:31:30):
What does earnest look like in practice? And how does that come across?

**Jessica Livingston** (00:31:33):
I think it means being sort of humble about... And if you get asked a question in the interview and you don't know the answer, they say, "I don't know the answer to that. I'd have to think about it." Or, "I don't know the answer. I've given it some thought and here's what I have come up with." And they're just honest about things, and they're not trying to do the whole smoke and mirrors thing, which we've definitely gotten people like that, that avoid the question or are doing it for the wrong reasons.

**Jessica Livingston** (00:32:08):
I remember there was one group that were 45-year-old men and they were building an app for teenagers in fashion. And I remember just thinking, we were asking them, "Why have you chosen teenagers in fashion?" And it was so clear that they thought they could make easy money, and it wasn't because they cared about fashion. It wasn't because, "Oh, I have a daughter who's really into fashion and I've seen this need." It was just like, they made up the idea. And that is not earnest, that is not authentic to me.

**Lenny Rachitsky** (00:32:47):
You talked about it, so there's this earnestness you look for, also not being defensive. There's this also spectrum of confidence and people believing in what they're doing. Do you have any thoughts on just how to find that? What does that look like when they're too defensive versus they're just confident and then they know what they're talking about?

**Jessica Livingston** (00:33:03):
Confidence is good. You definitely want confidence. It's hard to... I think you can see it when you experience it. Like someone who's confident in answering your questions but isn't defensive, there's definitely a difference. And I don't know, this is why I'm saying it's sort of hard to articulate these things, but confidence means you can say, "I've thought about that and I don't know the answer." That's confidence. And they'll say, "But here's what I do to try to figure it out. Here are my plans to address that." Confidence, I should have put that upfront because that's very important, especially when it comes to fundraising, you cannot go into an investor meeting lacking confidence. You can come into YC's interview lacking confidence, but we will then help you in the next three months to gain more confidence.

**Lenny Rachitsky** (00:34:43):
Awesome. A couple other things you mentioned earlier, just to unpack a little bit. So being committed, something you look for, and co-founders getting along. In terms of committed, I imagine, these are very practical things. How are they actually going to stick to this? Are they actually excited to work on this? Maybe talk about that a little bit.

**Jessica Livingston** (00:35:00):
We all know how hard startups are, but I think you don't really know how hard it is until you actually do it. A lot of people would start a startup still having a job at Google or wherever, and they do it on the side. I do recommend, if people are just getting started and don't want to raise money yet, starting it on the side is a great way to get going, but at some point you have to commit, you have to burn the boat, because we found that founders who were still getting a paycheck and health insurance, once the going got tough, they did not quit their job. And you sort of need that desperation like, "I have to make this startup succeed because it's my job." Not like, "Oh, I'll just stay at Google." You need that. And we found that founders who weren't leaving their jobs, it was just not working out. Or that co-founder would always wind up leaving the company because they didn't want to actually leave their job.

**Jessica Livingston** (00:36:01):
And that's fine, there are people that can't leave their jobs for financial reasons. That's fine. You just shouldn't be starting a startup if you're not going to be prepared to leave your job. So that's the leaving of the job thing. And the co-founders getting along, oh my. I spent a lot of my time at Y Combinator when I was there all the time, full time, mediating co-founder disputes. And so many startups died or had near-death experiences because the co-founders didn't get along or broke up. It just happens all the time. And so that's why I think, during interviews, I was desperately trying to search for any clues that the co-founders didn't get along, or if they blatantly contradicted each other. But you could also tell if they were answering, finishing each other's sentences.

**Jessica Livingston** (00:36:59):
I love co-founders that have a history together; either they went to school together, they went to college together, work together, maybe they're siblings. Because when you have a long-term relationship, you trust each other and you know each other's weaknesses, and you're usually on the same page with your aspirations and everything. It's really scary when two founders get together just to start the startup and don't have any history. Massive red flag. Sometimes it works out like in the case of Dropbox, Drew and Arash both went to MIT, but I think they didn't know each other before they started Dropbox, and it worked out. But most of the time it doesn't.

**Lenny Rachitsky** (00:37:46):
So we've talked about co-founders getting along, looking for defensiveness, domain expertise, the sign of making shit happen, earnestness. Is there anything else that we've missed that you look for in the founders that tell you maybe we should, maybe we shouldn't?

**Jessica Livingston** (00:38:02):
Relentlessly resourceful. Paul wrote a whole essay on that. Every founder is different, I never try to say, "Oh, this person doesn't have this. I'm not going to fund them." You always have to... Everyone's different. But I mean, you're an investor. I'm curious, do any of these things surprise you or do you care about these things too?

**Lenny Rachitsky** (00:38:24):
No, absolutely not. Absolutely. And I actually try to avoid pre-seed and early stage because I'm not amazing at it, maybe. This is why I want to learn how to build my social radar skill.

**Jessica Livingston** (00:38:37):
Oh gosh, okay.

**Lenny Rachitsky** (00:38:38):
Yeah. Tough. It's so tough. It's like so few things actually work out.

**Jessica Livingston** (00:38:42):
Well, it's because you don't have a lot of data. If someone is just applying with an idea, you have very little data. You can look at where they went to college, what have they built in the past, that's always a great predictor of their ability. And so on the YC's application, we ask them, "What project have you worked on before?" Or whatever. But it's really hard to tell when you're the first investor.

**Lenny Rachitsky** (00:39:07):
**Jessica Livingston** (00:40:08):
Paul used to always call me Detective Livingston. Before I was a social radar, I was Detective Livingston. I cannot help myself noticing weird things, just dumb things, like if Paul had on a yellow T-shirt and then an hour later came in with a blue T-shirt, I'd be like, "Why do you have a blue T-shirt on?" I have to understand what happened in that hour where that T-shirt is different. Or people's what, their relationships, what drives them? I was always like this, and I think it goes back to my childhood.

**Jessica Livingston** (00:40:44):
I spent hours and hours on the phone with people, with my girlfriends, dissecting situations, and then all through high school, and college, I mean the amount of time we wasted discussing social matters with people, and boys, and things like that. It was just frightening how much time I wasted, but I just was genuinely interested in it. And what drives people and why did this happen? I don't know if I ever noticed I did this, but it was just, my point is, it's always been a part of me. And I definitely notice and having an aversion to phony people. I always have. I've never been one to fall for someone who's super phony and tried to have them as a friend or anything. I just can tell, and ugh, I hate it.

**Lenny Rachitsky** (00:41:34):
Do you feel like it's almost all genetic or do you think there was something in your childhood that pushed you to be good at this?

**Jessica Livingston** (00:41:42):
I don't know. I really don't know. So this is why I think I'm going to be a bad guest, because I can't give a practical understanding. I mean, I don't really think... I can't say other people in my family are like that, and I can't say that it was part of my upbringing. I just notice these things. I don't know. I should be paying attention to other things, but I'm not, but I'm paying attention to this. I'll give you an example with you.

**Lenny Rachitsky** (00:41:42):
Please.

**Jessica Livingston** (00:42:13):
So I looked up your bio to read a little bit about you, and I loved the Dalton Caldwell Podcast. I listened to that.

**Lenny Rachitsky** (00:42:23):
Fourth most popular of all time.

**Jessica Livingston** (00:42:26):
Dalton's was?

**Lenny Rachitsky** (00:42:27):
Yes.

**Jessica Livingston** (00:42:28):
Oh, go Dalton. That's awesome. Yeah, it was really good. I learned a lot from it. I love listening to Dalton. But what I really want to know about you is, on the release that you sent, or on the instructions for this podcast, you said, "There might be some edge cases where your podcast isn't good enough to go out. We just want to warn you." And all I could think of is, what prompted that? There has to be a story of what prompted that. No one else would pay attention to that, but I'm just so curious. It's so weird. I'm just a weird person like this.

**Lenny Rachitsky** (00:43:07):
Yes, I did add that. There's a story, basically, it was just an episode that wasn't amazing and we didn't have that caveat in the prep beforehand, and it felt bad to tell the person.

**Jessica Livingston** (00:43:19):
See, I knew it. I knew that that had happened.

**Lenny Rachitsky** (00:43:23):
That's exactly right. Is there kind of a way you've thought about honing this skill over time? Once you kind of got a sense, "Hey, people keep telling me I'm really good at this." Is there something you've done to help strengthen it?

**Jessica Livingston** (00:43:35):
No, but one of the things I do try to do is sort of reinforce. Sometimes I'll have a feeling about someone, maybe we fund them, maybe we don't. I'd sort of like to know what happens a few years later. I like to follow up. There definitely have been some situations where I haven't liked someone that we funded and it's taken 5 to 10 years before they failed. And in some cases, for a bad reason. Where I'll say, "Oh, thank God, I was right about that. I did have this feeling." Or, "I knew they'd be successful." Like the GOAT guys who I was saying before, there was definitely a period when Grubwithus, their first startup wasn't doing well, and they were starting, that maybe some people would've given up on them. And now I can say, "I was right about them. That feeling was right."

**Jessica Livingston** (00:44:35):
So I do try to sort of follow up with some of the really strong gut instincts that I had, to see if I was right. Often, when I have a gut instinct, it's like a negative thing. So we wind up not funding someone. So I really need to know if that person went on to be super successful. And I will answer your question right now, there's no one that I had a strong dislike for that I sort of said, "We should not fund them," that has gone on to be a super success. Thank God.

**Lenny Rachitsky** (00:45:10):
Wow, interesting.

**Jessica Livingston** (00:45:12):
I mean, it doesn't happen all the time that I really put my foot down, but sometimes I have.

**Lenny Rachitsky** (00:45:18):
And this feeling, is it like a visceral body thing for you? Or is it like intellectually, you notice, "Hey, this guy's interrupting her and this person doesn't..."?

**Jessica Livingston** (00:45:26):
More intellectual. But it does come from inside. I don't know how to hone it. It has to come naturally. You have to have a natural interest in people. And so I'm sometimes not listening to all the words and I'm sort of just observing them, I don't know.

**Lenny Rachitsky** (00:45:45):
Have you ever been tricked by someone where you didn't see something you should have seen? Is there anything there?

**Jessica Livingston** (00:45:52):
Oh, yeah, for sure. I can't really talk about the times I have been tricked just because I don't want to say anything really negative about people, but... Well, there was one example that I do feel comfortable sharing. Ilya Lichtenstein of MixRank. Do you know the guy that stole billions of dollars in Bitcoin from a crypto wallet? Do you not know this crazy, crazy story?

**Lenny Rachitsky** (00:45:52):
Please share.

**Jessica Livingston** (00:46:21):
I think he's in the joint now. He was definitely convicted of this, and his wife, and they stole billions of dollars. And I definitely don't remember thinking anything bad about him or thinking he could be that kind of person. So that definitely, there've been some doozies like that, where, did not see that one coming.

**Lenny Rachitsky** (00:46:48):
Oh my God. I think what's extraordinary about the fact that that happens rarely is that your interviews are 10 minutes long, and so you have very little time to actually find all these things. And plus, the actual product and the idea and growth strategy and all these things.

**Jessica Livingston** (00:47:04):
Well, you find a lot can come in reading the application. That's a lot of legwork at the beginning. You read the application. But then the 10 minutes is kind of as long as you need, in most cases. Because we found when they were longer, like 20 minutes, you'd know in 10 minutes and be twiddling your thumbs trying to get through the interview for the next 10 minutes. So we kept them short so we could interview more people. But there have definitely been cases where we've interviewed people, accepted them, and then very soon afterward, we're sort of like, crestfallen like, "Oh, these people are very limp. What were we thinking?" Definitely, we've been tricked in that respect all the time. Or, "Oh gosh, they seem so impressive in the interview and now they're just posers who can't really do anything." Definitely, I'm tricked all the time in little ways. Or, I didn't notice two founders didn't get along and then one co-founder goes missing a week into the program or something crazy. There's all sorts of crazy stuff like that that happen.

**Lenny Rachitsky** (00:48:14):
I think in the game you're playing, I would expect some things to slip through.

**Jessica Livingston** (00:48:21):
Yeah.

**Lenny Rachitsky** (00:48:21):
You said that there's been kind of an operationalization of some of the things you used to look for in founders, now that you're not actually in the process. Is there a Jessica-as-a-service sort of thing? What kind of stuff have they built that looks for the sorts of things you used to look for in the interview process?

**Jessica Livingston** (00:48:38):
No, it's all just stuff in application that automatically flags certain things. I actually don't remember all of them, but it's just, all it is, is a, "Please pay attention to this, reader of the application." It's not, "This disqualifies anyone." It's, "Just please pay attention." And those are things like I mentioned, a really crazy equity structure, founders not quitting their job, things like that, that it's important that someone is voting on them and then interviewing them knows. Because I would often, some of the questions I'd ask at the end of the interview, I'd say, "It looks like you have 90% of the stock and your co-founder only has one. Can you tell us why that's the case?" And maybe they could make a case for it, who knows? But at least I'd ask. So the flags just say, "Pay attention to it."

**Lenny Rachitsky** (00:49:37):
Amazing. So if we were to zoom out, in early stage investing, the main thing you need to get right and evaluate as the founder, the social radar skill that you've had from childhood is such an incredible advantage in doing this well, and you could basically say YC is what it is because of this unfair advantage that you all had in the early days. I'm guessing many people listening to this are like, "We need a Jessica on our team. We need to build this skill ourselves. We need to figure out how to integrate social radar into our process." I know you're going to hate this question, but just, do you have any advice for people that want to try to build the skill, get better at this, notice some of these things?

**Jessica Livingston** (00:50:20):
I really think that our advantage was that my three co-founders were deeply technical people. And I think a lot of investors back then weren't, didn't have that background. And I think that that background really helped YC choose good founders. So I don't want to make it sound like it was that big of a deal, but advice? Advice for how to hone... I mean, I think just try to pay attention to subtle cues. If you really feel like, gosh, I'm so clueless about these things, try to just tell yourself, "Okay, I'm going in to evaluate these founders, evaluate this investment opportunity. I know I'm bad at these kind of judgments. I'm going to remember, do they seem like they get along?" Because there are no trick questions. I don't have any trick questions that you could ask, or it's just paying attention. Have a conversation.

**Jessica Livingston** (00:51:26):
Do they understand their product well? Are they defensive? Maybe have your own little checklist that you think about. You don't have to have it written down, but you think about, and then afterward, you spend some time thinking, were they defensive? When I asked them why this is better than the competitor, how did that go? Or ask them, maybe do have some questions, if you don't know how long they've known each other, ask them that question. "How did you two meet? Have you ever worked together before? How's it going?" Just be a little bit more conscious about asking these types of questions to reveal some key information for your investment decision.

**Lenny Rachitsky** (00:52:09):
That was an awesome summary of a lot of the stuff we talked about. If anyone ever doubts that you are very good at this, Paul tweeted this quiz, the Reading the Mind in the Eyes quiz, that I took, it's incredibly hard. You basically see a bunch of eyes and you're supposed to judge their emotion, and it's really hard. And you got 36 out of 36, which blows my mind.

**Jessica Livingston** (00:52:33):
I did nail it. I do have to tell a funny story about this.

**Lenny Rachitsky** (00:52:33):
Please.

**Jessica Livingston** (00:52:36):
So Paul, sort of late at night, and he emailed me, because I had gone to bed, but I had my thing, and he emailed me. He's like, "Check out this quiz. I got 25 out of 36. What can you get?" So I got my computer out because I was like, I have to beat Paul. And I did it, and it was really hard. They'd only show the eyes and then it would say, what is this person thinking? Are they happy, sad? But some of them were really hard to distinguish. Are they irritated or are they angry? It's kind of hard to tell the difference between irritated and angry. And I remember looking into these people's eyes saying, "What are they trying to communicate to me? Are they irritated with me or are they mad at me?" Kind of thing.

**Jessica Livingston** (00:53:24):
And as I went through, it would tell you if you got it correct. As I almost got to the end, I was like, "Oh my God, this is going to be a near-perfect score. I have to nail this." And when I got 36 out of 36, I was like, "Yes." And I told Paul, he tweeted it. We then, a week later, had this YC event in London, and I swear to God, about 10 people came up to me to talk about this eye quiz and how they had not done well, and what was my secret? It was very amusing. I never thought that anyone would think it was that interesting.

**Lenny Rachitsky** (00:53:59):
I love that there's this thing that totally shows this skill you have that is better than everyone else. I took it, all my friends have taken it after that tweet, and the highest we've gotten is 31 of all the people I know.

**Jessica Livingston** (00:54:11):
Really?

**Lenny Rachitsky** (00:54:12):
And I think when people take it, we'll link to it, they're going to be like, "How can you get 36 out of 36? Impossible."

**Jessica Livingston** (00:54:19):
You have to look into their eyes and say, "What are they trying to tell me?" I hope you're not trying to tell me you're full of shit with your eyes.

**Lenny Rachitsky** (00:54:28):
I'm feeling despondent. Just kidding. That's one of the options. I'm like, "What does that even mean?"

**Jessica Livingston** (00:54:32):
I know. Well, that's the other thing I told Paul, also the challenge is, you really have to understand what each feeling, what that word means. He's like, "Oh, that didn't even occur to me." Because he's such a word person and knows the exact definition of every single word. But I thought some people will struggle understanding the complexities of the emotion.

**Lenny Rachitsky** (00:54:55):
With the words, I almost felt like I had to do what you did where just like, "What does this word feel like when I'm reading it? Despondent, let's see if these eyes are despondent." I love that trick you shared. So basically you looked at the eyes and you're like, "What is this person trying to tell me?"

**Jessica Livingston** (00:55:09):
Yeah, that's the best I could do.

**Lenny Rachitsky** (00:55:12):
Amazing. So we're going to link to that quiz. I'm curious what people, if you take it, please leave your score in the comments, see if anyone can get anywhere near Jessica's score. Okay. So speaking of social radar-ing, you have a podcast called The Social Radars.

**Jessica Livingston** (00:55:12):
Yes.

**Lenny Rachitsky** (00:55:12):
Let's talk about it.

**Jessica Livingston** (00:55:27):
Yes, okay.

**Lenny Rachitsky** (00:55:28):
First of all, just why did you decide to start a podcast? There's a lot of podcasts in the world. What made you decide to start one?

**Jessica Livingston** (00:55:32):
Well, I'm really excited that you're asking that question because no one has ever asked me about The Social Radars. Yes, I mean, it's pretty new, but we launched last year. I decided to start The Social Radars because I live off in the English countryside, not really as connected as I'd like to be with Silicon Valley, partly by choice, but I do miss it a lot. And I was finding that as I was catching up with YC alumni that would come visit or I'd see, I just loved the conversations we were having, and I missed that. I missed that connection with these people, and sort of sharing their stories of triumph and failure in some cases, but mostly triumph. At the same time, I became obsessed with this podcast called SmartLess. Have you ever heard of it?

**Lenny Rachitsky** (00:56:20):
I've heard of it, haven't listened.

**Jessica Livingston** (00:56:21):
Okay. So just for the listeners, it is a podcast hosted by three actors; Jason Bateman, Will Arnett and Sean Hayes. And they invite Hollywood people, actors, directors, musicians, sometimes athletes, on the show. And the thing is, one person, one of the hosts invites the guests, the other two don't know. So there's no preparation, and it's the most fascinating thing. I love movies and I love television, and I can tell you another weird eccentric gift of mine is I remember every name in Hollywood and know all their children and all this stuff because I've been reading People Magazine since I was 13. So I loved, you'd learn so much about the actors as people because they weren't talking from a script or their media messages for promoting a movie. It was like just genuine conversations. Most of the time these actors knew the people and were friends, and I just found it fascinating. I could not stop.

**Jessica Livingston** (00:57:25):
And I thought there should be a really informal conversation like this with startup founders so people could understand the people behind the startups. And it's not too scripted and not too, maybe, I don't want to say professional, because I hope it's professional sounding, but it's very conversational and authentic. I was trying to mimic that a little bit. I convinced my colleague and friend, Carolynn Levy, who of course has a full-time job being one of the amazing lawyers within YC, and she's super busy. I convinced her to do it with me so I could have a partner in crime. And then we just started and I said, "We'll do a few episodes, see how it goes, and we'll keep going if it's fun." And I have had so much fun catching up with all the people I've interviewed. At this point, I forget how many podcasts I've even done, but maybe-

**Lenny Rachitsky** (00:58:24):
I think about 27-ish.

**Jessica Livingston** (00:58:26):
27 that have launched yet, and there's a few coming out. Season three, we're still in the middle of that, and still editing some and doing some. But it's been so much fun and I love it, and I hope that people enjoy listening. I hope I'm not just working this really small corner of the room. I hope people enjoy unstructured conversations. But people open up to me though, because what I copied from SmartLess that I liked, they'd say, "Hey, remember when we were at that Oscars party and this happened..." Because they had that relationship with the people they're interviewing, in a lot of cases, I feel like I've had that with a lot of people I'm interviewing and I could say, "Hey, Brian, remember when you interviewed and brought the cereal boxes?" And he could tell, he shared that story. I don't think I knew it before then that they were on the 101 and the phone went out, the reception went out before Paul said that they were accepted. So I learn a lot, and it's really just fascinating to me.

**Lenny Rachitsky** (00:59:27):
Well, it's an awesome podcast, I've been listening. I'm going to just read some of the guests that you've had on, just so people get a sense of who you're interviewing. So you actually just had Paul Graham on the podcast. He does very few podcast episodes. So that's an unfair advantage you have there. Patrick and John Collison, Brian Chesky, you mentioned Brian Armstrong, Emmett Shear, Tony Xu, like epic people.

**Jessica Livingston** (00:59:48):
Emmett Shear, by the way, the week after he was named OpenAI CEO for like 72 hours, that one launched. I was like, I could not have planned that timing better.

**Lenny Rachitsky** (00:59:58):
Is there an episode you'd recommend people start with if they were start to explore your podcast and get into it?

**Jessica Livingston** (01:00:04):
Honestly, I truly believe this, I'm not BS-ing you, I think they're all really, really good, and there's so many interesting takeaways from every single one. If I were coming to it for the first time, I'd probably choose, I'd look at the guests and say, "Who am I interested in? Have I stayed at an Airbnb and I want to learn more about that?" Or, "Do I use Reddit?" Just see who the guests are and start with someone you're kind of interested in, and I guarantee you'll learn more about this person.

**Lenny Rachitsky** (01:00:34):
So across the podcast episodes you've done, I hate when people ask me this question, but I'm going to ask you this question. Is there any big lessons you've learned, any stories that have stuck with you? Any takeaways so far from interviewing all these incredibly successful founders and people?

**Jessica Livingston** (01:00:48):
My God, I love that question. I don't hate that question.

**Lenny Rachitsky** (01:00:48):
Okay, I'm glad.

**Jessica Livingston** (01:00:52):
I could talk for an hour just on... I want to learn from you as an expert podcaster, because I'm still a noob here. What I've learned the hard way, and you probably will nod your head when I say this, is that I talk way too much. I'm a huge windbag and I hate... I don't notice it now when I'm just talking to you and going off and talking, talking, talking. But when I'm editing the podcast and I'm listening to myself ask a question in 20 sentences when I could ask it in two. So I've really had to train myself to keep things short. You want regular short dialogue, you know this, but you also have to interrupt guests if they're going off too much. So the talking of the hosts should be frequent but short. That's the lesson that I've learned.

**Lenny Rachitsky** (01:00:52):
Totally agree.

**Jessica Livingston** (01:01:46):
In terms of content, every single episode is a gem in its own right, and there aren't massive lessons because they're all sort of specific to that person, and I never know exactly which direction we're going to go in when we get into things. But it was interesting. There were definitely some themes with Adora Cheung and Tony Xu of DoorDash where they said they really made a mistake early on scaling into different cities before they had nailed the original city. And that's an important lesson. There's lessons for everyone, I think. In addition to really getting to know these founders, their personal side of their personality, there's some great lessons that they all tell.

**Lenny Rachitsky** (01:02:36):
I love these lessons. Is there anything else you've learned about interviewing? That's something I'm always trying to get better at. I love this point you made. I say the same thing to every podcaster. You talk too much as a host, you should let the guest talk. Just ask the question and let them talk. Is there anything else that you've learned about just how to interview more effectively?

**Jessica Livingston** (01:02:54):
Remember, I've been interviewing people since YC started because I was working on Founders at Work simultaneously when we started YC, and so that was a collection of interviews. And back then, I can't say I was that good at it. I've gotten much better. And then I've since gone, I used to do a lot of interviews at startup school on stage with people, and now the podcast. I think one thing that is that the guests trust me. They trust that I'm not going to try to have a gotcha moment. I'm not trying to lure them into saying anything controversial. Do I love it when they say something that hasn't been said before? Yes. But I'm not trying to trick them.

**Jessica Livingston** (01:03:37):
And just like you, I tell them, "You will have a chance to review this before it goes public." And I think that disarms people and they say, "Okay, I can open up because I know if I regret saying something, it's not like talking to a reporter who's going to publish it." I care about them. I care about making them look good, and I'd never want to betray their trust, and they know that. So that's part of it too. For me, with the podcast, I have some questions that I do ahead of time just so I have something down, but I also just let the conversation go where it's going, and we get into some random tangents that I find are really fascinating.

**Lenny Rachitsky** (01:04:26):
Is there a story that stand out to you just that sticks with you from the interviews that just like, "Wow, that was such an incredible story someone shared with me," or, "a lesson learnt."?

**Jessica Livingston** (01:04:29):
The podcast that really sticks with me is the Parker Conrad episode, of Rippling, but we spent a lot of time on Zenefits because if you didn't follow that story years ago, the press annihilated him. And in talking to him, I learned why. There was a smear campaign paid for by someone still at Zenefits. There were legal threats made to force him to sign this legal document that would allow them to have a non-compete in California so that he couldn't another company, basically making his life miserable, disparaging him. Stories planted in the press. And I had him come on and I had him tell what really happened.

**Jessica Livingston** (01:05:29):
And even I, who have seen so much shit behind the scenes with startups in Silicon Valley over the years, stuff you just couldn't believe. This was unbelievable. And the thing that really sticks with me is that no reporter ever, maybe no reporters listened to it, but no one said, "Hey, I got that wrong years ago. I shouldn't have written that. That wasn't true. Let me set the record straight." So he doesn't care. Parker's moved on, he's successful with Rippling, he doesn't think about this stuff. But I do. I care about justice. And it was a horrible thing that was done to him and it affected his health, it affected his life, and I just am glad to have sort of been a conduit to set the record straight.

**Lenny Rachitsky** (01:06:24):
That's an awesome episode maybe for people to start with if they want to check out the podcast. And then generally, I just love this rise of ways for tech people to share their story without this drive to create clicks and create gotcha moments and things like that. Just this, I think people call it techno optimism, this idea of just like tech is great, technology is doing great things for us, let's just tell these stories in a really positive way versus look at all the harm they're causing, technology stop, slow it down.

**Jessica Livingston** (01:06:50):
And I just want to have conversations that I personally find interesting. I'm very selfish about it, Lenny. As long as I have an interesting conversation, I tell Carolyn this all the time, as long as we have 20 listeners, that's all I need. 20 really interested listeners, we'll keep doing it.

**Lenny Rachitsky** (01:07:10):
I love that attitude. I wish I had that same feeling. What I look for is, is it growing? That's the thing. I'm like, is it growing at least? If it's growing, no matter what it is, I'm feeling good.

**Jessica Livingston** (01:07:20):
I need to be a little bit more like that. I don't know any of my statistics. What statistic, you tell me as an experience podcaster, what statistics should I have taped up to my mirror every day and track?

**Lenny Rachitsky** (01:07:34):
There's the correct one and there's a simple one that I look at, which is just downloads of the episode. It's the most basic one you see everywhere. And downloads is a weird one because they might download and not listen to it, but that's just the one that podcast platforms tell you how many people have downloaded it. And that's the one that just tells you generally, are people listening? Are people continuing to listen? Did they remove it from their phone? In theory, you should be looking at retention like how many people are finishing the podcast episode?

**Jessica Livingston** (01:08:02):
Can you tell that though? I thought these platforms don't share that with you.

**Lenny Rachitsky** (01:08:06):
Some do, some do. Spotify gives you some of that. Apple, gives you. The worst part about podcasting is the analytics are extremely bad and inconsistent, but there are some of those stats. The other one, okay, here's one to pay attention to, is number of subscribers on the different platforms, people that follow you. That actually is a really important metric to watch.

**Jessica Livingston** (01:08:26):
Number of subscribers, okay. One thing I also, this is just my personality, I can't bring myself to do what I want to, is ask people if you like The Social Radars, please subscribe and leave a rating and a review. I would do anything to have people leave rating and reviews.

**Lenny Rachitsky** (01:08:46):
If you're listening and you either checking out the podcast or you're already a listener, please leave a rating and a review and subscribe and follow.

**Jessica Livingston** (01:08:54):
Thank you. Can I ask you a question about podcasting really quickly?

**Lenny Rachitsky** (01:08:58):
Sure, let's do it.

**Jessica Livingston** (01:08:59):
When you do a podcast, after you hang up with a person, can you tell, do you have a gut instinct like, "Oh, that was a really great "?

**Lenny Rachitsky** (01:09:07):
What's interesting is, the ones that I sometimes think, holy moly, that was incredible, don't do as well as I would think. And sometimes ones I think didn't go amazing, actually do a lot better than I think. And I think there's a difference between the energy and the fun of it versus the content and the interesting value of the actual conversation. And so sometimes you feel like that was so fun, so good, I loved it, but people are like, "Nah, I didn't learn anything." So those are interesting. That's something I've learned.

**Jessica Livingston** (01:09:37):
Okay. Yeah, because people come to yours expecting to learn things. Now I'm a little nervous, I'm going to get axed because I'm not teaching them anything valuable.

**Lenny Rachitsky** (01:09:46):
You're so modest. This was incredible. I think we've taught people a lot of really important and really actionable things and I know you don't think you did, but you did. And with that, we've covered a ton of ground. We've talked through every single thing that I was hoping we talked through. Is there anything else you wanted to share or maybe leave listeners with before we get to our very exciting lightning round?

**Jessica Livingston** (01:10:08):
No, I mean, honestly I can't think of... I think I windbagged enough.

**Lenny Rachitsky** (01:10:14):
This was incredible. You talked exactly the right amount of time. With that, we've reached our very exciting lightning round. I've got six questions for you. Are you ready?

**Jessica Livingston** (01:10:24):
Ready as I'll ever be.

**Lenny Rachitsky** (01:10:26):
Okay. First question, what are two or three books that you recommended most to other people?

**Jessica Livingston** (01:10:31):
Well, I definitely would recommend my first, second and third books would all be P.G. Wodehouse books. Do you know him as an author?

**Lenny Rachitsky** (01:10:40):
No.

**Jessica Livingston** (01:10:41):
Ask Jeeves. Okay, so he was an old school author and he wrote the Ask Jeeves books about the Butler and Bertie Wooster.

**Lenny Rachitsky** (01:10:52):
Not the search engine.

**Jessica Livingston** (01:10:54):
They're so funny and fabulously written. His use of words makes me laugh so hard. And so I would specifically recommend the starter books that... He wrote tons of books and he lived till he was like a hundred. Start with Very Good, Jeeves or Right ho, Jeeves, Carry On, Jeeves. Those three are really good books. And then I tend to read, so Paul's the big reader in the family, he reads riveting books on Roman grains and anything that has to do with medieval history. I tend to read biographies of people, especially musicians, especially English musicians, strangely. And so I've recommended, to a lot of people, if you really want a good autobiography, because I sometimes hate autobiographies because I feel like people hold back and don't really share everything. Keith Richards, his autobiography called Life, is really good if you're a fan of the Rolling Stones at all. That was really good.

**Jessica Livingston** (01:12:04):
And then I recently read Barbra Streisand's biography called, I think it's called, My Name is Barbra something, and I kept thinking as I was reading this, every female founder should read this book. And you're looking at me like that's so random, but it's because she was such a success within this totally male-dominated world of Hollywood and just treated like garbage and dismissed and called a diva when she was very particular about something. Whereas, a man would be called a great director and she was called a diva, and I felt like every woman should just read this to inspire them. It was such a great book. Long, but very good.

**Lenny Rachitsky** (01:12:52):
Incredible recommendations. Next question, do you have a favorite recent movie or TV show?

**Jessica Livingston** (01:12:57):
**Lenny Rachitsky** (01:13:12):
Nope.

**Jessica Livingston** (01:13:13):
Jeremy Clarkson, he's in the show called Top Gear. I don't watch that. But he lives out in the English countryside. He has a farm, and he decided that he'd farm it. And the whole show is about him getting into this business that he knows nothing about, everything goes wrong, but it is hysterical and heartbreaking at the same time. I've learned so much about England and about where I live and the crops that are grown, and how hard it is for farmers. He's really shone a light on the difficulty of being a farmer these days and it's fabulous. Clarkson's Farm. And it has some bad language in it, but I do recommend that kids watch it, because it's just a good show to watch as a family if you can deal with a little foul language. The Brits drop a lot of F-bombs.

**Lenny Rachitsky** (01:14:09):
Do you have a favorite life motto that you often come back to, share with people, find useful in work or in life?

**Jessica Livingston** (01:14:16):
It's so boring, but I always try to treat people the way I'd like to be treated myself, really, is fundamental life lesson.

**Lenny Rachitsky** (01:14:26):
It's like boring but so powerful and important. And I try to live that same way. And I think it's a good reminder to people, sometimes the most, I think it was Michael Pollan had said that, "Cliches are cliches because they're so true." They're so true, we're tired of hearing it. Sometimes it's important to be reminded of them. Who's most influenced you in your career? Who do you think of when you're like, this person's really had the most influence on me?

**Jessica Livingston** (01:14:51):
In my career, I definitely have to say my husband, Paul Graham. I've just learned so much from him over the years, and he's such a good person and I think people who know him, all know that he is. It's just, he has such a big online personality either through Twitter or through his essays. And so he has a lot of people that don't like him, because he also speaks what he believes. And he is not afraid to say anything if he believes it's true and needs to be said. Whereas, I'm the exact opposite. I'm like, "Oh, I'm not going near that. I'm not touching that with a ten-foot pole. I don't even want to get in someone's crosshairs or fight with someone." And I admire that so much. There's so much that he's done with Y Combinator and just in our personal life that is just so admirable and I've really learned a lot from him.

**Jessica Livingston** (01:15:53):
It's such a boring thing to learn from your husband, but at the same time, I'm going to extend this, I'm going to windbag a little bit longer. I have learned so much from the founders that we funded. Some of them are just incredible people and have been through so much and survived so much and built these amazing companies that I couldn't have even imagined when we funded them, that these companies would be as successful as they are, and they're all, so many of them, are just great people. And they now teach me things, honestly. Like Brian Chesky teaches me things. The student has become the master. He knows so much more about me and running a business, and I often will go to him for advice. And so I'm really lucky to be surrounded by so many smart people in the startup world, because as a startup nerd, I could talk about startups and think about them all the time, and it's so great to have all these people around sort of lifting me up.

**Lenny Rachitsky** (01:16:58):
Would you believe that a cereal experience led to a 92 billion business today? I just looked it up, how big they've gotten.

**Jessica Livingston** (01:17:09):
Honestly, I wouldn't. I wish I could say, "Oh, I knew they'd be this big." But the truth is, with all of the super successful startups, yeah you can remember feeling very positively about them and certainly feeling like, as they went along in the first few years, like they're doing really well, they're really determined, they're doing a great job, but you just never really think. They themselves, probably didn't realize that they'd ever be that big. Let's face it. That's just the way startups are.

**Lenny Rachitsky** (01:17:43):
Okay. Here's the actual final question. Is there a fun story of early days YC, whether it's with Airbnb founders or Paul or anything that comes to mind as just like, wow, what a different time that was, or what a surprising thing that happened then?

**Jessica Livingston** (01:17:58):
It's funny you ask, because actually one of my ideas I've had lately is that I want to start thinking about writing sort of a YC biography kind of book. I don't know when the time is, but the point is, I have to remember things because it's hard. When it's been 20 years to go way back, you have to remember specific things that happened. YC, I just remember the early days being so magical and so pure. When we started, no one knew about us, no one was bothering us. We just did what we were doing with no distractions. We were helping, albeit a very small group of founders, eight in that first summer, we were just doing what we loved doing and growing organically. And no one was scrutinizing us or blaming us for things or writing negative news stories about us. The negative stories in the press, because I'm a people-person and I'm very sensitive, Paul's not as sensitive as me, and so he doesn't care if there's a negative story in the press that's not true.

**Jessica Livingston** (01:19:09):
I do. It really affected me, and I hated when we got big enough that people would lie about us and say bad things. So I look back fondly when we first started of it was the most fun time of my life, the most productive time of my life, didn't have kids then, and I could just help the founders and learn about all these exciting things that happened in the startup world, because it was new to me then, the startup world was new when we started Y Combinator, so I had a lot of learning to do. And I met all these cool people, and it was just very authentic, no one was doing it to be cool.

**Lenny Rachitsky** (01:19:48):
Okay. Well, let me ask maybe one other question. Was there a moment when you felt like YC was working? When it felt like, wow, maybe this is going to make it?

**Jessica Livingston** (01:19:56):
There were sort of two moments that I remember I felt like YC was working, because remember, we started Y Combinator as 100% like an experiment. Could we fund younger founders with small amounts of money? That was it. Then that summer we created this batch investment idea, and then that became the idea of funding them in batches. And that was the first aha moment was after that first summer when we invited people to participate in the Summer Founders Program, which is what it was called. And remember, that first summer had Sam Altman, Emmett Shear, Justin Kan, Alexis and Steve of Reddit, they were in the first batch. And the batch thing worked really well because they all became friends. We could have dinner every week, and bring in guest speakers and then introduce them to investors at demo day, and that whole batch-investing thing was an aha moment and we said, "Oh my gosh, let's keep doing this. This really works." And so that was a moment where we knew we were onto something, and that's when we then did it in California in the winter.

**Jessica Livingston** (01:21:11):
But the second big moment was probably, I remember it was like a year later, and no reporter would write about us, investors really didn't think that much of us, but I remember when Reddit got bought by Condé Nast in 2006. It was that, and then at the same time, I think it was like Charles River Ventures or one of these Boston, maybe it wasn't even Boston, but it was a VC firm, did the seed program where they invested maybe a 100K in startups, and the press loved that. They wrote all about this $100,000 investment, and they'd sort of mentioned Y Combinator as doing small investments. And then that, coupled with the Reddit press, sort of made us feel like, oh my gosh, we are sort of legitimate, and the eyes of outsiders became sort of aware of who we were. And I sort of felt like we've arrived, we've been in the press, people are finally paying attention.

**Lenny Rachitsky** (01:22:17):
That's amazing. And it's funny that Reddit just went public, it's kind of the other side of that coin.

**Jessica Livingston** (01:22:21):
I know. Pretty impressive. Definitely didn't necessarily think that was going to be happening.

**Lenny Rachitsky** (01:22:27):
I know you have to run, but I can't help but ask around what you just talked about where you decided to invest in batches. You wrote this really interesting point that none of us had any experience angel investing, and that's where the idea of funding startups and batches came from. We decided to fund a bunch of startups at once during the summer so that we could learn how to invest. And I love that your inexperience in doing it, created this structure. That unique weakness/strength is what led to the way YC operates, and I think that's really interesting.

**Jessica Livingston** (01:22:59):
Yeah, we definitely wanted to learn more about how to be investors, so that's when we decided to do this summer founders program where we could invest in a whole bunch at once, and then the plan was to go to asynchronous investing like normal investors, but we realized that there was something magical about this batch thing. So sometimes, I always say we love domain experts, but sometimes maybe ignorance is sort of bliss and you just discover new things.

**Lenny Rachitsky** (01:23:27):
Jessica, this was everything I hoped it would be. We covered so much ground. I think people are going to love it no matter what you think.

**Jessica Livingston** (01:23:33):
Oh, good. Good, good, good.

**Lenny Rachitsky** (01:23:35):
Two final questions. Where can folks check out The Social Radars and anything else you want people to know about? And how can listeners be useful to you?

**Jessica Livingston** (01:23:41):
Well, you check out The Social Radars on all the podcast platforms; Apple, Spotify, Amazon, all of those. And then there's a website, socialradars.com. And they can be helpful by just listening to it and spreading the word because I don't do any marketing for it besides posting on Twitter, just because it's expensive doing a podcast and stuff. So I don't do any marketing. So if it resonates with you, if you find an episode interesting, please spread the word and write a review and rating.

**Lenny Rachitsky** (01:24:21):
I was just going to add that, I'm glad you threw that in there. Jessica, thank you so much for being here.

**Jessica Livingston** (01:24:25):
Thank you so much, Lenny. It was a lot of fun.

**Lenny Rachitsky** (01:24:28):
Same for me. Bye, everyone.

**Jessica Livingston** (01:24:30):
Bye.

**Lenny Rachitsky** (01:24:32):
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.

---

## [21/21] Dylan Field live at Config: Intuition, simplicity, and the future of design

**Lenny Rachitsky** (00:00:02):
Today I am excited to bring you a very special episode, which was recorded live at Figma Config with Figma CEO and co-founder, Dylan Field, in front of a live audience at the Moscone Center in San Francisco. This is the first ever live recording of this podcast and it was so much fun. If you watch this on YouTube, you can see the epic stage that they built specifically for us to recreate my podcast studio. I could not be more thankful to the Config team for making this happen.

**Lenny Rachitsky** (00:00:28):
In my conversation with Dylan, we dig into how he builds and refines his product taste and intuition, how intuition is a hypothesis generator, the future of product management. How Dylan attempts to operationalize keeping Figma simple and to continue simplifying the experience. A bunch of stories from the early days of Figma that I've never heard before. Also, he shares his favorite AI tool called websim, which is wild. And if you wait till the very end, you can see a very young child actor Dylan Field in a clip that I found online that was hilarious.

**Lenny Rachitsky** (00:01:00):
If you enjoy this podcast, don't forget to subscribe and follow it in your favorite podcasting app or YouTube. It's the best way to avoid missing future episodes and it helps the podcast tremendously. With that, I bring you Dylan Field.

**Lenny Rachitsky** (00:01:12):
Dylan, thank you so much for joining me and welcome to the podcast.

**Dylan Field** (00:01:16):
Thank you, Lenny.

**Lenny Rachitsky** (00:01:18):
Hi all.

**Dylan Field** (00:01:22):
Is this your first live podcast?

**Lenny Rachitsky** (00:01:24):
This is my first ever live podcast. Also, a big thank you to the Config team who set up this crazy studio. I had no idea this was going to happen. I feel like I'm in my studio here with a thousand people watching us. It's very impressive. I very much dig the background and also the mics that may or may not be wired.

**Dylan Field** (00:01:40):
That's right. Don't say that. Don't tell people.

**Lenny Rachitsky** (00:01:42):
Oh, sorry.

**Dylan Field** (00:01:44):
There's no wires coming out of them.

**Lenny Rachitsky** (00:01:45):
There's no one behind the curtain either. Okay, so Dylan, I want to start by just checking in on how you're doing. So Config is about to wrap up. We've been at it for two days now. I know how much lift goes into doing these sorts of things. I imagine you've been thinking about this for a long time now. I'm just curious how you're doing, any surprises, any highlights, any low lights?

**Dylan Field** (00:02:06):
The highlight is the community and just the incredible, incredible people here at Config. Y'all are awesome. I don't know why I keep talking in the mic like this. It's instinctual. But seriously, it's just the most amazing community to be part of and I feel so lucky. And then in terms of how I'm doing at this exact moment, exhausted, but riding on caffeine and whatever this really cool probiotic drink is.

**Lenny Rachitsky** (00:02:36):
Any surprises from the past couple of days? Anything that's like, "Oh wow, that went a lot better than I thought, maybe less well."

**Dylan Field** (00:02:44):
Demo, definitely things I would've improved. But also Emil and Mihika were phenomenal, and it was just so awesome to see them do their demos and present materials. I was just really pleased with the conversation, I think, that's getting started at Config around AI. I was looking online on social media and I think people are already zeroing in the right conversation, which is, okay, in a world of more software being created by AI, what does that mean and the impact on craft and the impact on quality and the need to have more unique design and how design is a differentiator.

**Dylan Field** (00:03:37):
And I think some people are saying, "I agree with that." Some people are saying, "That I disagree with that", and that's exactly the bounds of what the conversation I imagined would emerge from yesterday. It was funny, the make design feature, I think that I said on the keynote, I was like, "This is going to give you the most obvious thing in the most obvious form possible." And then people online are like, "It's just going to give you some obvious thing." I agree.

**Lenny Rachitsky** (00:04:10):
This episode is brought to you by WorkOS. If you're building a SaaS app, at some point your customers will start asking for enterprise features like SAML authentication and skim provisioning. That's where WorkOS comes in, making it fast and painless to add enterprise features to your app. Their APIs are easy to understand so that you can ship quickly and get back to building other features. Today, hundreds of companies are already powered by WorkOS, including ones you probably know like Versal, Webflow and Loom. WorkOS also recently acquired Warrant, the fine-grained authorization service. Warrant's product is based on a groundbreaking authorization system called Zanzibar, which was originally designed for Google to power Google Docs and YouTube. This enables fast authorization checks at enormous scale while maintaining a flexible model that can be adapted to even the most complex use cases. If you're currently looking to build role-based access control or other enterprise features like single sign-on, skim or user management, you should consider WorkOS. It's a drop-in replacement for Auth0 and supports up to one million monthly active users for free. Check it out at workos.com to learn more. That's workos.com.

**Lenny Rachitsky** (00:05:28):
This episode is brought to you by Anvil. Their Document SDK helps product teams build and launch software for documents fast. Companies like Carta and Vouch Insurance use Anvil to accelerate the development of their document workflows. Getting to market fast is a top priority for product teams and the last thing that you or your developers want is to build document workflows from scratch. It's time-consuming, expensive and distracts from core work. You could stitch together multiple tools and manage those integrations or you can use an all-in-one Document SDK.

**Lenny Rachitsky** (00:06:03):
Most product managers will tell you paperwork sucks. Anvil's Document SDK helps teams get to market fast, incorporate your brand style and give you back time to focus on your company's core differentiated features. For your users, paperwork often starts with an AI powered Webform styled and embedded in your application. From there, you can route data to your backend systems and to the correct fields in your PDFs via API. Complete the process with a white labeled e-signature. The best part about Anvil is the level of customization their SDK provides. Non-technical folks love Anvil's Drag and Drop builder and developers love their flexible APIs and easy to understand documentation. Build documents software fast with Anvil. That's useanvil.com/lenny to learn more or start a free trial. That's use-A-N-V-I-L.com/lenny.

**Lenny Rachitsky** (00:06:58):
Let's keep talking about design. You once said that the definition of design is art applied to problem solving. Can you just add a bit more to that? What do you mean by that? Because that's an amazing line.

**Dylan Field** (00:07:09):
Well, I don't think it's my original line. I think someone else said it, but there's a lot of definitions of design out there too. There's also 'design is dialogue' or 'design is problem solving'. You just go straight there. I could go with 10 more. But I like art applied to problem solving because I think that design is often... There is some component of creativity to it and unique expression that you're trying to provide and create and put out into the world. But you are also trying to do it and match it to a user need, a problem that needs to be solved. And I think that it's not pure art, but if you lose the art and you're just solving the problem, it's totally utilitarian and it lacks soul. And so the combination of those two things is to me really beautiful.

**Lenny Rachitsky** (00:08:03):
I'm going to pivot to a very hard hitting question. I hope your PR people don't kill me for asking this. Many people asked me to ask you this question. Very important. Please explain a Figma tradition called raccoon feet and muffin hands.

**Dylan Field** (00:08:21):
I should probably just leave this interview now. So this is a conversation, I'm not sure exactly where it started, but it started in early Figma. And basically we had these lunch tables at Figma where we would just all gather and have very long, interesting meandering conversations before we got back to work. And one of the questions that, was a 'would you rather', was would you rather have raccoons for feet or muffins for hands? And I think this is a deeply philosophical question. I have pondered it since I've heard it. I still don't have one answer. If you've got an answer, I'm curious what it is.

**Lenny Rachitsky** (00:09:02):
I've got follow up questions. Can you control where the raccoon take you or are they just deciding on their own what's happening?

**Dylan Field** (00:09:09):
I think that raccoons probably wouldn't even agree with each other where to go.

**Lenny Rachitsky** (00:09:14):
Okay, that's complicated.

**Dylan Field** (00:09:16):
If you had raccoons for feet right now, do you think that it would interfere with this podcast?

**Lenny Rachitsky** (00:09:21):
But muffin hands would also interfere with my newsletter and I feel like I'd be out of work.

**Dylan Field** (00:09:25):
I don't know if you can type.

**Lenny Rachitsky** (00:09:26):
I'd need a special keyboard. This is very difficult.

**Dylan Field** (00:09:29):
You haven't even thought about the upsides of this yet.

**Lenny Rachitsky** (00:09:33):
What are the upsides?

**Dylan Field** (00:09:34):
We can get there, it's all-

**Lenny Rachitsky** (00:09:36):
Maybe I could eat some of the muffins.

**Dylan Field** (00:09:36):
It's the case for optimism.

**Lenny Rachitsky** (00:09:37):
Cupcakes?

**Dylan Field** (00:09:38):
If you have muffins for hands, maybe if you're hungry...

**Lenny Rachitsky** (00:09:41):
Do they regenerate as you you eat them?

**Dylan Field** (00:09:43):
That's a good question. There's no answers here, just questions. Do your nails grow?

**Lenny Rachitsky** (00:09:49):
Yes.

**Dylan Field** (00:09:50):
Oh, okay. Interesting. It's deeper than you might think.

**Lenny Rachitsky** (00:09:58):
I'm going to play a short clip with Rick Rubin and then I have a question about it. So we'll see if that plays.

**Speaker 3** (00:10:06):
But exactly what he does and how is difficult to describe. Do you play instruments?

**Rick Rubin** (00:10:12):
Barely.

**Speaker 3** (00:10:13):
Do you know how to work a soundboard?

**Rick Rubin** (00:10:15):
No. I have no technical ability and I know nothing about music.

**Speaker 3** (00:10:21):
Then you must know something.

**Rick Rubin** (00:10:22):
Well, I know what I like and what I don't like. And I'm decisive about what I like and what I don't like.

**Speaker 3** (00:10:29):
So what are you being paid for?

**Rick Rubin** (00:10:31):
The confidence that I have in my taste and my ability to express what I feel has proven helpful for artists.

**Lenny Rachitsky** (00:10:45):
So I'm not going to say this is you. You need to grow the beard. But I think this is a little bit you because what I've heard from a number of your colleagues is that one of your superpowers is intuition and product taste. And someone said that you have the sixth sense for what's going to work, when you're designing Figma and you're making decisions in the product. So I'm curious how you've built and refined your intuition and product taste when it comes to Figma and then even broadly.

**Dylan Field** (00:11:13):
That's a lot kinder than I thought you were going to be. I thought you're going to be like, "You don't know how to code and you don't know how to design."

**Lenny Rachitsky** (00:11:17):
No.

**Dylan Field** (00:11:19):
But no, here's my framework for it. I think intuition is like a hypothesis generator and you're constantly generating these hypotheses and others are generating hypotheses as well. And you then take these hypotheses and you put them forward and you debate them and you try to find data to support them or negate them. And then you winnow it down into what is our working hypothesis? And from that you move forward.

**Lenny Rachitsky** (00:11:48):
I heard that you read every tweet that mentions Figma and share them with folks. There's a Slack channel where you paste them. I imagine that is a part of this where you're just constantly watching what people are saying about Figma, what people are complaining about.

**Dylan Field** (00:12:00):
I definitely look everywhere trying to constantly ingest information about Figma, and it's not just Twitter/X, whatever that's called now, but anywhere on the internet, support channels, et cetera. And I'm always trying to understand. I also ask a lot of questions and I try to get to root problems and understand where people are coming from and what are they actually trying to solve. Sometimes people are saying, "Hey, I need X", but they really want Y or Z. And trying to do that myself and engage and dive deeper there, but also to encourage our team to do that, I think leads to really good outcomes in terms of what we ship.

**Lenny Rachitsky** (00:12:51):
Is there something you've changed your mind about, building on that, either based on customer feedback or some employee just making a case and like, "Okay, you're right." Is there something that comes to mind of something you've changed your mind about recently? Somebody said Flides.

**Dylan Field** (00:13:09):
For when we started out Flides. I have not. It's Figma Slides. Well, it's not recent, but one good example of me changing my mind is that you all have Pages in Figma, you're welcome. But I think I have deep skepticism of Pages still. I'm not sure they're... If you could freeze time and I could just go in with my team, work on Figma for a very long time, I'm not sure we'd come to the same implementation of Pages that we are at today. I just don't think it's the most elegant solution in the context of the entire system of product design that you could create. The world told me and our team that that did not matter and they needed Pages. And don't worry, we're not shipping Pages. But I am still very skeptical of them and I think that in general, probably my team would tell you that I don't always change my mind, but I also build trust with people in deep ways.

**Dylan Field** (00:14:22):
And I think across our organization, if things are not going to be fatal, then if I hear from someone, "Hey, I really think we should do X", then I'll say, "Okay, just go with it. And here's my feedback, here's what I'm skeptical of, let's see what happens." And then sometimes they come back to me and they're like, "See I was right." But usually they're pretty polite about it.

**Lenny Rachitsky** (00:14:49):
Just to build on that, something a lot of people try to work on is being good at influencing leadership execs, CEOs. What do you find works to change your mind? What do people come to you with that helps you like, "Okay, you're actually right?"

**Dylan Field** (00:15:05):
I think the more concrete an artifact is or the more you can debate something, the better. I ask for examples a lot, I try to ask follow up questions about things and make sure I fully understand it. And I think where I get stuck sometimes is if I ask follow up questions and we don't have answers yet, and then my response might be, "Let's go find the answer to these questions and then let's go back to this conversation", if I think it's something that's really important. And I think for some people they might go, "Okay, this is actually really obvious. I can't believe you're so dense and you don't get it yet." And sometimes they're right and they come back and they're like, "Okay, here's the data now, can we move on?" And we do, we move on and they're right. And I just think that it's important though to just really understand something from first principles for a lot of decisions. And maybe it's just a perfectionist quality repeated over time, I think it leads to good outcomes as long as you make sure it's not bottle-necking the organization.

**Lenny Rachitsky** (00:16:15):
So following up on that, let's talk about product management. So last year you had Brian Chesky here, I think maybe on this stage, maybe a bigger stage. And he said that they got rid of product management at Airbnb and everyone cheered and all the PMs were very sad. And he didn't actually mean they got rid of product management, they changed the function and evolved it. I'm curious just to get your take.

**Dylan Field** (00:16:38):
It's funny. This year we have you here Lenny, so that's your answer. No...

**Lenny Rachitsky** (00:16:43):
I had him on the-

**Dylan Field** (00:16:45):
Before and after, all. Surprise.

**Lenny Rachitsky** (00:16:45):
We're still here. We're still here. I want to get your take on product management. You all have amazing product managers at Figma. I've had three of them on the podcast already. I'm curious just what value you find the best product managers bring to Figma?

**Dylan Field** (00:17:00):
It was really funny last year after that interview, so Yuhki, our chief product officer, had invited me to a dinner for our PM team. And it took a while to get out of Config at the end of the day, and I eventually made the dinner but I was 40 minutes late. And I walk in and Mihika who was on stage yesterday, presenting Figma Slides, Flides, she was standing up and doing a mock Brian Chesky impersonation. And she's standing up in front of the entire product team and she goes, "And then Brian Chesky's like, 'There don't need to be any PMs.' And Dylan's like... Ooh." And I'm like, "Hi, Mihika." And I'd never seen her so red. And then I gave a quick, "Hey PM team, I believe in you. Thank you for your hard work."

**Dylan Field** (00:18:08):
Seriously, I think that if you zoom out, it's always tricky whenever you're asked to formally define, what is the separation between a product manager, a designer, and an engineer? It's always hard to actually create those clear lines. And I think in many organizations they're blurry. But at the end of the day, a PM and designer, they need to have some technical expertise or at least understand how some systems work to probably create the best things they can possibly make. A designer, engineer, they should probably have some sense of the business objectives. They should have some sense of what users want. An engineer and a product manager, they should have taste and craft and some sense of the option space, and some desire to care about the visual implementation.

**Dylan Field** (00:19:08):
And I think you can include research in there too, if you want to make it four legs of the stool rather than the trio. And you can talk about all three probably should have exposure to users and be talking in dialogue with users. So I think that if you think about that group holistically, each is important. If you think about a team, there's all these qualities that you have to have to make a great product. And that said, I think for product managers and the product function... I think sometimes when you see people that fall down in that function is because they treat it too much like process. Which is very important too, don't me wrong. Good process can help support good outcomes. But I think that you can't lose sight of the problems that you're solving. You have to go talk to users and you have to actually have a strategy. And if you're really good, you should have a point of view. And some point of views are going to lead to good outcomes and some point of views aren't. And there's some tense sense of taste.

**Dylan Field** (00:20:16):
And you also have to bring everyone together and make sure that they get to the objective, that it's celebrated, and that at the end of the project or when you complete a milestone, everyone's stoked. Otherwise, it's not going to be a team that gels, you're not going to get to the next outcome. Even if you get to an outcome and it's a milestone, but if everyone's unhappy, you failed. And so somehow good product people are able to do all this and they're able to create great frameworks that bring everyone along with them. And so everyone's able to have a shared head space around what it is they're trying to get to.

**Lenny Rachitsky** (00:20:54):
Someone once said that if PMs disappeared or if a PM goes on vacation, everything's okay for a week or two or three and then things start to crumble a little bit because they glue everything together. Do you find that sort of thing? Let me actually ask a different question along those lines, are you bearish or bullish on the future of product management? Do you think PMs will continue the way they are? Do you think PMs will dwindle any sense of the future of product management?

**Dylan Field** (00:21:23):
I think probably everyone's learning to do a bit more of everyone else's job in this current moment. That said, I definitely think there's still immense value in product, immense value in design, immense value in engineering. And so I think those roles will continue to exist.

**Lenny Rachitsky** (00:21:43):
So maybe I just want to come back to the question of just, with the best PMs that you work with, do you find, what value do they most bring? I guess is there anything that's like, "Here's what would be gone if we didn't have these PMs"?

**Dylan Field** (00:21:57):
The best PMs, I think again, create those frameworks that bring everyone else along and those frameworks also have a point of view and a strategy associated with them. So you're able to take the strategy, take the point of view, wrap it all up in a framework, and then make it so that everyone knows what the destination is and how to get there.

**Lenny Rachitsky** (00:22:20):
So along these lines, something I've heard you're really big on is simplification. Somebody told me that when you're in a designer view and things just feel too complex to you, quote, "You furrow your brow and insist there must be something simpler." Why is simplification so top of mind for you, why is it so important for you and just why is it so hard to do?

**Dylan Field** (00:22:41):
Oh, gosh. Well, I think probably anyone here who's worked on product knows how hard it is. I think the more that you add, the harder it is to create something that's coherent. One essay that Evan, my co-founder, introduced me to early on in famous history, I think from Stevie's [inaudible 00:23:06] grants or something like that, contains the term irreducible complexity. And it's basically this idea that one plus one does not equal three, it sometimes equals one and a half. And the more that you add and the more that you continue to put in something, the more complex it gets and the worse it gets. And I think this is definitely true for tools.

**Dylan Field** (00:23:28):
So in the context of Figma, we can make it more powerful, but to do that in a way that's not making it more complex at the same time is extremely hard. And we have to always be paying attention to how complex or how simple things are because if we don't, it just becomes a monstrosity really fast. And there's parts of our product that, I don't want to dive into that part of the conversation, the self-critique, but definitely as I'm in conversation with a bunch of our product leaders at Figma, there's parts where it's like, "Okay, this thing is too complex as a system and we made all the right local decisions and yet together they're too complex and they're not working anymore. And let's go revisit the system now."

**Lenny Rachitsky** (00:24:14):
This episode is brought to you by UserTesting. Transform how you build products and experiences with UserTesting. Get fast feedback throughout the development process so that you can build the right thing the first time. Make better decisions that lead to better business outcomes. Companies are being asked to do more with less. They need to move quickly to build experiences that meet changing customer expectations and do so faster than ever, all while minimizing risk and costly rework. With UserTesting, you have a trusted partner in experience research. They empower user research product and design teams to make higher confidence decisions with human insights. Learn more today at usertesting.com/lenny.

**Lenny Rachitsky** (00:24:59):
I know you just redesigned Figma. I imagine part of that came from things are just getting too complicated, not as simple as we want. Is there anything that's been bugging you in the old Figma but like, "Oh, this is way too complicated, I really want to simplify this thing"?

**Dylan Field** (00:25:09):
Yes.

**Lenny Rachitsky** (00:25:11):
What's that?

**Dylan Field** (00:25:12):
We'll move on, but many things.

**Lenny Rachitsky** (00:25:18):
Sounds good. And in terms of how to keep things simple, so I had Dharmesh Shah on the podcast, he's the co-founder of HubSpot, and the way he described it is that you're always fighting the second loft through more dynamics of entropy, just the product getting more complicated. And he sees himself as part of the solution, of top down, you have to be on top of that. Is that the way you see it? That's your role, to keep things simple. Do you think people further down the ladder can do that?

**Dylan Field** (00:25:46):
Absolutely, everyone's responsible for simplicity. And I think another quote that is not mine but is a really a good one is "Keep the simple things simple. Make the complex things possible." And I think that's a really important principle to hold as you're designing tools. And I'd say that it's really easy to make the simple things complex, unfortunately.

**Lenny Rachitsky** (00:26:10):
I want to pivot to talking about early days Figma. So I don't know how many people know this, but it took three and a half years to launch Figma from when you were beginning to work on it.

**Dylan Field** (00:26:19):
Way too long, don't do that.

**Lenny Rachitsky** (00:26:22):
This is my question. So it took three and a half years to launch and then five years to get your first customer. Dylan, what the hell were you doing all that time?

**Dylan Field** (00:26:28):
I don't think it took five years for a first... Well okay-

**Lenny Rachitsky** (00:26:32):
Paying.

**Dylan Field** (00:26:33):
First paying customer, sure. Okay, fine. Slightly less but approximately five years, it gets to be round up. I think that if I had been probably better at hiring and recruiting... I see Nadia in the audience, making eye contact with her the entire time, for some reason. She's our chief people officer. If she had been at Figma from day one, we would've hired probably faster and we would've gotten to market faster. But I think that it was a hard product to build and to get everything to come together with. I also see Sho. And I think for... Sho's joined us as a director of engineering. He's a VP of product now. Again, people can wear many hats. And he was someone that joined Figma and said, "Hey, y'all need to ship this thing, you're really close." And he really helped catalyze us to ship in that moment. And I think, in week one, he gave a presentation. It was like, "Here's what we got to do, here's the gap. Everyone agrees on it. Let's go."

**Lenny Rachitsky** (00:27:45):
You already said that you wish you shipped earlier. Is there any advice there for just people building something today of-

**Dylan Field** (00:27:49):
Get it out as fast as you possibly can. Everything they tell you about making sure that you get a product out really quickly is totally true. The faster you get it out, the more feedback you get. That is a positive thing. And now I index on that when we try to build. And FigJam's a great example of that, we shipped it incredibly fast and it helped us get to market and get feedback faster. Figma Slides, great example of that too. Dev Mode, for what it's worth, it took us longer. We just had to keep iterating and building it and building it again. Certain directions we tried didn't work out and we really had to get to a place where we were able to really believe that we were adding value and really understood the developer's user, and it just didn't happen for a long time. So it's interesting because I think people look at Dev Mode and sometimes they go, "Oh, this is quite simple", to the point about simplicity.

**Dylan Field** (00:28:53):
Figma, is this simpler than FigJam? And the reality was it took at least three times as long.

**Lenny Rachitsky** (00:29:04):
So your advice is ship quickly. There's also this push the-

**Dylan Field** (00:29:09):
I'd hold the bar, for sure.

**Lenny Rachitsky** (00:29:11):
That's the question I have, is there's also a lot of talk of just the bar has risen. You need, especially B2B software, craft is really important. Linear talks a lot about this, just the bar is very high for people to switch from something out there. Is there anything... I don't think you'll have, "Here's the answer. When you're ready to ship...", but just any advice of just like, "Here's good enough" versus "No, you should probably wait."

**Dylan Field** (00:29:32):
Well, another thing that Evan taught me was that for a new launch, you got quality, features, deadline, choose two. And I think that the beautiful thing about software is you can keep iterating on it. So it's not like a physical product where you have to always have quality in there, otherwise it's never going to have quality. You can ship it with features and deadline and then improve it iteratively over time. I'm not saying you should always do that. Sometimes you need to at least have a minimum bar of quality for the things you have and you're going to ship less features maybe.

**Dylan Field** (00:30:04):
So you choose quality and deadline and sometimes you say, "Actually here's the minimum feature set and we're going to have this quality bar and you're willing to push it out." But I think you have to know when you're introducing a new thing, what it's going to take and then to make that minimally awesome product. But also I think that when you're iteratively improving it, you shouldn't just be focused on the features, you have to focus on the quality too.

**Lenny Rachitsky** (00:30:33):
I like this term you use, 'minimally awesome product'. Love it. So the way you got your early users for Figma is quite fascinating. I don't know how many people know this story, but you basically wrote a script to scrape Twitter and create a graph of the most influential designers on Twitter, and then you made it your mission to convince them to use Figma and make them evangelists. Is there anything more to the story there? And then I have a question along those lines.

**Dylan Field** (00:31:01):
You can't do this anymore, first of all, because the Twitter API doesn't exist anymore. Rest in peace, Twitter API. But look, I was an intern at LinkedIn and when I was there I saw some really cool work people had done with Gephi, which was a network visualization tool. And based on that I thought it'd be interesting to try to, like you said, look at who the design network was, who the central nodes were, which you can just run [inaudible 00:31:31] on and see. And you could do that for other communities too, which I have done in the past just because I'm curious about social network dynamics and social network analysis.

**Dylan Field** (00:31:42):
And you could just do those things back in 2012, 2013 when Figma started. So I constructed this list of, "Here are the most central designers in the graph", but also then I looked at their work. And the ones that I was really inspired by as a total fanboy, and someone who wanted to learn as much as I could about design, was inspired by these folks, the ones I was inspired by I reached out to and said, "Hey, can I buy you a coffee?" And most of them are really kind. The design community is amazing. And they said yes and then from there was able to learn from them, show them Figma, get their feedback. And I think it started honestly more as me fanboy and me getting feedback.

One example is Tim Van Damme. I saw him on Dribble. Max [inaudible 00:32:35], I'm like, "Oh, my God, this guy is just genius. These icons are incredible." I think the first time I met Tim was at Dropbox and think I had this total fanboy moment. I'm like, "I've been tracing your icons." He's like, "Hi."

**Dylan Field** (00:32:54):
And I had been working on vector networks with a team, and my test cases were a lot of his icons. Because they were just beautiful and I liked looking at them and studying them. And to now have Tim on the team and have him doing the icons for UI 3 is such an honor, and privileged to work with someone of that craft. So reaching out to your hero sometimes works.

**Lenny Rachitsky** (00:33:24):
It's interesting because when people hear that story, when I've heard that story many times, it was always like, "Here's a growth hack. Find the most influential people in your field, go try to convince them to use your product." And the way you're describing it is you were using it more as feedback. "I just want to show you the product, get your feedback, make this better", and then it ended up working. They're like, "Oh, I love Figma, I'm going to use it."

**Dylan Field** (00:33:43):
Well, I think it especially works for designers that way, because designers are really good at giving feedback. It turns out that not everyone is good at giving feedback, but designers are awesome at that. So we're really lucky. And literally early on in Figma's existence, folks... I think Payam [inaudible 00:34:00] is here somewhere. I'm not sure if he's in this room, but I was hoping to see him before the end of Config. Payam wrote a very long doc for us about all the things that he wanted to see in Figma after we did a user research study with him. With a bottle of wine because our text editing didn't work very well then. So I ran him through the user study, I knew we'd need a bottle of wine to finish and it took hours. The type of sentence in Figma was so slow.

**Lenny Rachitsky** (00:34:27):
That reminds me of a story I've heard where... One of your first customers was Coda, sponsor I think of Config. It used to be called Krypton. And there's a story where you installed Figma, you helped them get set up, you drove home and then they called you like, "Hey, Figma is not working anymore." And you drove back yourself to help fix them and it ended up their wifi was down or there was a wifi issue. Is that the story?

**Dylan Field** (00:34:53):
I don't remember what the solution was, but-

**Lenny Rachitsky** (00:34:54):
That's what I heard.

**Dylan Field** (00:34:56):
... we were halfway home and somehow I saw... I'm sure I was not looking at my email while driving, definitely is not something anyone here should do. But somehow found out that they had an issue and we turned the car around. Shishir is amazing by the way, and has been a mentor for a long time to me and many people on our team. And he, I think, at the time did not know he was the first customer.

**Dylan Field** (00:35:27):
And later on he came over to Figma's office and I introduced him without really thinking about that. And I was like, "This is Shishir, he's team was really the first user of Figma as a team." And he goes, "Wait a second, I am?"

**Lenny Rachitsky** (00:35:48):
I want to talk about something totally different. Something I've noticed you are good at is you spot trends ahead of other people. So obviously WebGL you were on early and that's what allowed Figma to exist, to link it in the browser. I saw you tweeting about CryptoPunks way before they were worth millions of dollars. You're just like, "Look, CryptoPunks. Look, I got a few, they're really cool. They're super cool, little pipe." I'm curious if there's anything these days you're really excited about that might become bigger in the future?

**Dylan Field** (00:36:15):
Well, we talked about websim. We were just talking about them backstage and I think before this conversation too.

**Lenny Rachitsky** (00:36:23):
Talk about websim.

**Dylan Field** (00:36:24):
And that's an example of something where it's so interesting because there's a generative UI component and yet it's not what we're going for, for Figma, it's totally different. So we actually invested in websim with Figma Ventures.

**Lenny Rachitsky** (00:36:39):
Maybe explain what websim is for folks.

**Dylan Field** (00:36:41):
Websim is a hallucinated internet basically. If you go to websim.ai, you can use different models like Claude or GPT-4o, and you can do that either through their defaults or you can use open router to get a bigger context window. And the more that you use it, the more you construct this context window of this almost universe that you're building up in websim. And as you do it, it's almost like you're world building. And I just have gone deep and geeked out on this when I've had time, and they've evolved the platform a lot.

**Dylan Field** (00:37:21):
So we were back there and they were showing me some new functionality that's really cool too. But I think it's so interesting to see it as this almost lean forward entertainment tool using the internet.

**Lenny Rachitsky** (00:37:36):
So I thought you would answer this and so we're going to have a picture come up here, that I tried websim and played around with it. And hopefully a photo comes up somewhere. So all I typed here was gmail.com/dylanfield. So this is in an invented Gmail. Just came up with this using AI of what your inbox should look like and it looks pretty accurate. There's Adobe stuff-

**Dylan Field** (00:38:00):
DOJ, not FTC.

**Lenny Rachitsky** (00:38:02):
... financial. This is not actual information. Nobody buy stock based on this. So it's pretty-

**Dylan Field** (00:38:09):
No comment on 75% year over year.

**Lenny Rachitsky** (00:38:13):
So the way it work-

**Dylan Field** (00:38:14):
I hadn't ever tried Gmail before. Did you try you? What was your inbox?

**Lenny Rachitsky** (00:38:18):
I didn't do me. I don't think it would have anything. It'd be like, if it does-

**Dylan Field** (00:38:21):
Who are you?

**Lenny Rachitsky** (00:38:22):
So the way it works is just you type a URL or a prompt in the URL field and it'll just invent what that website looks like. It's hilarious.

**Dylan Field** (00:38:29):
It's awesome.

**Lenny Rachitsky** (00:38:30):
It's awesome. So I think they're going to get a lot of traffic right now.

**Dylan Field** (00:38:32):
One time someone posted in our random channel on Slack, they said, "I had a dream last night." It's always a good start for the random channel. "I had a dream last night that I was working on FigJam, but it wasn't FigJam, it was Frog Jam.

**Dylan Field** (00:38:52):
And websim was like figma.com/frogjam and it came up with a whole marketing website complete with toad puns for Frog Jam. The sticky notes were lily pads and you were supposed to... It had this whole metaphor of hopping from lily pad to lily pad to generate new ideas.

**Lenny Rachitsky** (00:39:17):
This is genius. Interestingly, before Figma, your only other job was an intern at three different companies and now you're leading this juggernaut of a business, a thousand plus people. I imagine there's a lot you've had to learn over this time. So I'm not going to ask you what you've learned because I think it's probably a lot. I'm curious just what has most helped you scale and learn? Is it exec coaches, is it co friends? Is it hiring execs? What's most helped you scale with the business and become the leader you are today?

**Dylan Field** (00:39:51):
I think all the above. And also just having a mindset of, you have to constantly adapt and grow and change and adapt. But I would say that mentors can come from anywhere. It can come from the community, all of you. Mentorship can come from the people you hire. It can come from folks that you actively seek out as investors or explicit mentorship and mentors. It can come from people that call themselves coaches. And what's interesting too is it can come from people you mentor as well. There have been plenty of people where they ask me a question at some point and I give them an answer and they think it's insightful for whatever reason. And then years later where we're talking again and I ask them a question and they're like, "Well, years ago you told me..." And they repeat back what I told them like, "That's a really good point."

**Dylan Field** (00:40:45):
Or they've grown and they've changed and they've learned and they tell me something completely different. They give me a new framework. And so I think that when you're... A lot of times when I talk with new founders, they teach me things that are totally things that I've just never thought about. Or interns at Figma have been mentors to me, in many ways. So you really have to have a ready mindset and just always be ready to absorb new information, I think.

**Lenny Rachitsky** (00:41:09):
When you were just tinkering around with Figma 12 years ago, I think at this point, did you ever imagine you'd be running a thousand person company and audience just spell bound by what you're building? There's people lining up to take photos with your logo in the lobby. That doesn't happen. That's very rare. Just to give you a chance to reflect on just how it feels to have built that over time, how does that feel? I'm sitting here right now.

**Dylan Field** (00:41:32):
I feel very, very lucky, but also very humbled by just the community that is around Figma. I mentioned in the keynote, but just the people that are in the Figma community are the people that are shaping the world's technology. And the chance to serve them and to make software for them and hopefully improve their life in some little way is such a privilege. It's a responsibility and one I don't take lightly, but also I try not to carry that as a weight, but rather as pump me up and get me excited to go build for them.

**Lenny Rachitsky** (00:42:10):
When we were talking about this idea earlier... The first thing you said is it's a responsibility, which I didn't expect. Is there anything more there just like, "Wow, I really have to help make..."?

**Dylan Field** (00:42:19):
Well, again, going back to the simplification point, it's very important that we continue to make Figma more and more simple. We make Figma as powerful as we can for the people that are in our community. That we figure out what people's needs truly are and that we advance the state of the craft, make it so that we do that in a responsible way. And that we champion design and champion quality. So we're trying to do all those things. We sometimes mess up, but people have been very patient with us and we're very thankful for that. And thankful for the support of just everyone here and in our community that are giving us a chance to make this impact.

**Lenny Rachitsky** (00:43:06):
Is there anything else you want to... Oh, there's some applause. Love that.

**Dylan Field** (00:43:11):
Thank you.

**Lenny Rachitsky** (00:43:15):
Applause break. Is there anything else you want to share? Anything else you want to leave listeners with before we get to a very quick lightning round?

**Dylan Field** (00:43:24):
Well, no, one thing I'll share is I think we're so early on this journey of computing in general. And in our lifetimes, we're going to have the chance to just build such incredible technology and incredible products. And I'm really excited to see what everyone in this room builds, but also everyone on the internet that [inaudible 00:43:48] maybe also builds and send me cool stuff. If you build something cool, message me somewhere and share it with me.

**Lenny Rachitsky** (00:43:56):
What's the best way to message you?

**Dylan Field** (00:43:59):
Email's good. You can probably figure out my email if you-

**Lenny Rachitsky** (00:43:59):
Just use websim.

**Dylan Field** (00:44:03):
... [inaudible 00:44:03] for five seconds or use websim. Twitter/X is good. Those are two places at least you can find me.

**Lenny Rachitsky** (00:44:12):
Dylan, with that, we've reached our very exciting lightning round. We only have a couple of minutes left. It's a very short one. Do you have a favorite product that you've recently discovered that you really love other than websim?

**Dylan Field** (00:44:28):
Well, I'll say that, and it's not like a favorite product, but I will say that if you get... Hesitate if I should say this or not.

**Lenny Rachitsky** (00:44:45):
We'll cut it out in post, don't worry about it.

**Dylan Field** (00:44:52):
I'll say this, it's so fascinating to look at all the different LMs out there right now and what each one is uniquely good at. And it's really fun if you can hack them the right way and get them in the right mood, what they'll do. That's what I'll say.

**Lenny Rachitsky** (00:45:07):
Whoa, what does that mean?

**Dylan Field** (00:45:11):
It's my diplomatic answer.

**Lenny Rachitsky** (00:45:13):
Interesting. Do you have a favorite life motto that you come back to, repeat to yourself, share with friends or family, that you find really useful?

**Dylan Field** (00:45:22):
I don't know if I've got a life motto, but one piece of advice I've always appreciated is when people give you advice, they're not giving you advice, they're giving themselves advice in your shoes. I think that's an interesting one. So if I gave you advice here, I'm giving myself advice in your shoes.

**Lenny Rachitsky** (00:45:41):
Final question. Not many people know this, but you were a child actor when you were five years old. Do you think you made the right career move? Do you feel like you sometimes regret acting?

**Dylan Field** (00:45:54):
Yes, definitely. That's my mom. My mom's in the audience and she says yes. No. We've been talking about product. If you're an actor, you're a product in some way. And that's not to disparage actors, actors are awesome. Acting is awesome. I loved it. But my differentiators when I was five, five and a half I think, was that I could read and I could sit still and I was decently cute. And I hit puberty and those things were no longer differentiators. And then it was like, let's do some computer science.

**Lenny Rachitsky** (00:46:38):
So to close, we're going to play a... Oh, applause. We're going to play a clip, something I found on YouTube to close and enjoy. 30 seconds clip.

**Speaker 5** (00:47:09):
Where will you find a world of ideas for your child? Only at eToys. From Barbie to Brio to SwimWays. eToys, where great ideas come to you.

**Dylan Field** (00:47:22):
That was a good find. Thank you.

**Speaker 5** (00:47:27):
Dylan, thank you so much for doing this.

**Dylan Field** (00:47:28):
Thank you. Can I make one comment about that commercial?

**Lenny Rachitsky** (00:47:31):
Okay, one comment.

**Dylan Field** (00:47:32):
One comment before we end. That commercial made that company go bankrupt. Thank you all for joining. Thank you for having me, Lenny.

**Lenny Rachitsky** (00:47:40):
Good luck. Thanks Dylan. Bye everyone.

**Lenny Rachitsky** (00:47:44):
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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