---
title: "Lenny's Podcast — 2024 Q3 合集"
date: "2024-01-01"
source: "Lenny's Podcast"
url: "https://www.lennysnewsletter.com/"
---

<div v-pre>


# Lenny's Podcast - 2024 Q3 (16 episodes)

This file contains 16 articles/episodes.

---

## [1/16] Pattern Breakers: How to find a breakthrough startup idea | Mike Maples, Jr. (Founding Partner at Floodgate, ex-Product at Silicon Graphics)

**Lenny Rachitsky** (00:00:00):
You found that there's basically three elements of most breakthrough startup ideas.

**Mike Maples, Jr.** (00:00:04):
The three are inflections, insights and then the founder future fit. Business is never a fair fight. What inflections let the founder do is wage asymmetric warfare on the present.

**Lenny Rachitsky** (00:00:15):
You reference this term that you use occasionally, the term secret.

**Mike Maples, Jr.** (00:00:18):
The way inventions happen is people get their hands dirty, being awake to the possibility that secrets are there. If you're living in the future and you notice what's missing, your intuition about what to build is far more likely to be right.

**Lenny Rachitsky** (00:00:30):
This connects with that stat that you shared, that 80% of your biggest returning investments came from a pivot.

**Mike Maples, Jr.** (00:00:35):
So startup never beats a big company by executing better. The way startups win is because it proposes a radically different future. Disorients the incumbent and chaotically moves people to that different future. The rock is the inflection, the slingshot is the insight that David shoots at Goliath. We're looking to create the conditions where we're going to get to play an unfair game by unfair rules that favor us.

**Lenny Rachitsky** (00:01:00):
Today, my guest is Mike Maples Jr. Mike is a legendary early stage startup investor and with his firm, Floodgate, which was founded over 20 years ago, was one of the earliest pioneers of seed stage investing as a category. He's made early bets on transformative companies like Twitter, Lyft, Twitch, Okta, Rappi and Applied Intuition and has been on the Forbes Midas list eight times. More recently, he's been spending a lot of his time researching where great startup ideas come from and what separates the startups and founders that break through and change the world from those that don't go anywhere. After spending years reviewing his notes and decks from the thousands of startups that he's met with over the past two decades, he's uncovered three ways that breakthrough founders think differently and act differently. In our conversation, Mike shares what he's uncovered along with the pitfalls that he's seen many founders and startups fall into, how to apply these pattern breaking principles to large companies and so much more.

**Mike Maples, Jr.** (00:02:47):
Lenny, thanks for having me. It is absolutely an honor.

**Lenny Rachitsky** (00:02:50):
It's my honor. What we're going to be talking about in our conversation today is how to come up with a startup idea and how to take the first few steps to make that idea real. You have a book coming out that is exactly this, helping people understand how to do this. It's called Pattern Breakers: Why Some Start-Ups Change the Future. Let me just ask a broad question. You're very busy, very successful investor, why did you decide to write a book?

**Mike Maples, Jr.** (00:03:19):
Yeah, a lot of things in life. It was kind of an outgrowth of an accident and a outgrowth of being down a certain rabbit hole. So about 10 years ago, Twitch was acquired by Amazon for 970 million and we made something like 85 times our money. And normally, you'd think that's a really good thing, it was a good thing, but I had forgotten that I was even a shareholder of Twitch. So I had to go to my LPs and I had to explain to them, "Hey, I'm sorry I don't have this in my financial statements, but do you want me to restate them?" And they were all like, "Nope, we're good. Just send us the money." And some of them even sent me bottles of champagne and stuff and the good kind. Then I started to kind of feel a little bit unsettled.

**Lenny Rachitsky** (00:04:05):
So how was I shareholder and Twitch? I'd invested in a company called Justin.tv that had morphed into two companies, Socialcam and Twitch, and then Socialcam got bought. And so I just thought that was the company. I'd been investing for about 10 years and I noticed that 80% of my exit profits had gone from pivot. And I also noticed that all the ones that had seemed to do well didn't necessarily follow the best practices that everybody talked about. I didn't see the Twitter guys doing the business model canvas, for example. And I didn't see the Justin.tv Team even as they morphed into Twitch being who I would hold up as the most functioning management team I ever saw. A lot of it was pretty crazy and wild and random. And at the same time, I was helping founders shut down their companies and they had seemed to do all the right things.

**Lenny Rachitsky** (00:05:01):
They'd done the business model canvas, they'd done customer development, they'd done all the things you're supposed to do, hired well, they would've been a Harvard Business School case study except for the fact that they failed. And so the genesis of this project was really like, "Okay, should I just retire before I get exposed? Is this just all random? Am I just lucky or is there something else worth understanding?" And as I started to develop conviction about what those things were, I started to talk to people about it. A lot of people said, "Oh, you should write a book. Founders ought to see this. It'd be really valuable for their thought process in coming up with their startup ideas."

**Lenny Rachitsky** (00:05:39):
**Mike Maples, Jr.** (00:08:24):
Yeah, so there's a movie that came out a few years ago called Trainspotting, right? And there's these guys, these dorky old British guys in anorak coats who chart the comings and goings of trains like it's the most interesting thing in the world. They'd put it in their journals and everything. I'm that way when it comes to startups. I have a database of any startup where you would've made more than a hundred acts on your first check. And what I want to do is I want to get a time capsule for those startups. I want to understand what did it look like not after it succeeded, but what did it look like at precisely the time you would've needed to decide whether it was an interesting opportunity. So I have the original pitch deck for what was at the time called Air Bed and Breakfast, which I foolishly passed on, and you seem to have made a good career decision in joining.

**Lenny Rachitsky** (00:09:17):
Later, but yeah.

**Mike Maples, Jr.** (00:09:18):
I have the pitch deck for Pinterest. I have the pitch deck for all of these that we either passed on or said yes to. And the reason I want to do that is it's easy to misremember how things really happened. And what I find is even the founders themselves, we have a tendency to remember knowing more than we really did at the time. And so I really wanted to do the best job I could of understanding exactly what it was like, what was the origin story of this idea? How did they come up with it? If they pivoted, what caused them to pivot? When did they first start to encounter success? What was the reason for that? All those things.

**Lenny Rachitsky** (00:10:00):
And I had to be really careful in the questions that I asked because for example, you don't ask, "Why were you successful?" Because then they'll offer their reasons they thought they were successful. What you want to do is you want to say, "Okay, I noticed here's the seed pitch deck and you called the product X, but now the product's called Y. When did you make that change? Why did that happen?" And so you're trying to do the very best you can of asking a very non-judgmental set of questions that are going to give you a non-judgmental set of answers so that you can kind of be like a detective and kind of get to the root cause of why these things took off.

**Lenny Rachitsky** (00:10:38):
Incredible. And I think what's also important is you have access to more data and more unique data than most other people because you invest so early stage.

**Mike Maples, Jr.** (00:10:46):
Yeah, I think the other thing is I just have a pretty simpatico relationship with founders usually, and so I can kind of push for the real, and they're not... I'm like, "Look, I won't share anything you don't want me to share. I'm just trying to understand." And so when you have these informal relationships... that's the other thing I learned is you try not to show up in a conference room interviewing them like a normal interview. You try to glean these facts over time with informal discussions and in the midst of talking about other things as well. And so I think that that was part of what was really valuable about the exercise was sort of the opportunity to get the unvarnished wild story of what really happened.

**Lenny Rachitsky** (00:11:33):
Amazing. Okay, so let's get into it. Your book's basically broken up into two parts, how to come up with an idea and then the actions you need to get right to move forward an idea, and you have a really cool way of framing how to do this and then we'll get into it. But maybe frame these two parts real quick.

**Mike Maples, Jr.** (00:11:52):
So I'll give it my best shot. I mean, the main thing is that business is never a fair fight. So the incumbents start out with an advantage, and the default is they will maintain their advantage. And so the startup has to decide that it wants to fight unfair. And so how does a startup fight unfair? It has to harness a different set of powers than are obvious to most people. For example, better doesn't matter when you're a startup, because better is an extension of the present. Better is when you think the future will resemble the present, but only be slightly different. The way startups win is by being radically different. A startup wins by avoiding the comparison trap entirely. So like when Lyft launched ride-sharing and then Uber closely followed with UberX, nobody after riding a ride-share said, "Oh, how's that different from taxis?"

**Lenny Rachitsky** (00:12:53):
It was just self-evident how different it was. And so that's what we mean by forcing a choice and not a comparison. So the startup capitalist, it turns out, is a different type of capitalist. A corporate capitalist makes money by persistently compounding, makes money by extending their advantage, makes money by having a moat, makes money by doing things well over and over again in a compounding way. Startup has none of those things. There's nothing to compound. And so the way a startup wins is they just change the subject. They deny the premise of the rules and propose something completely different. And that was the original notion behind pattern breaking was you want to have an idea that just radically breaks the pattern that can't be compared to anything that's come before, and that's when the startup has a chance to play offense.

**Lenny Rachitsky** (00:13:48):
So coming back to the two parts are coming up with the idea and the actions that you got to take. So let's dive into coming up with an idea, and this is where I want to spend most of the time because I think this is where most people get it wrong or everything starts with the idea. So I think there's a lot of meat here. And what I love about your book is you have a very succinct limited number of things that you've uncovered that are elements across successful companies, pattern breaking companies. So within the idea bucket, you found that there's basically three elements of most breakthrough startup ideas. Can you share the three and then let's talk about each one.

**Mike Maples, Jr.** (00:14:24):
Yeah. The three are inflections, insights and then what I call founder future fit. Or another way I phrase it is, "Is this from the future." But those are the main three things that I've observed tend to suggest breakthrough potential. And here's an important thing. You'll notice I didn't say the implementation. So one of the things that I learned is that if you have the right insight, and we'll get to some of this, you have a first mover advantage into the future. And so a lot of times your first implementation won't be right, but if your insight is correct, you can navigate the implementation to the right implementation to get product market fit. But what we need to understand is there need to be these underlying forces underneath the idea to give it the power to escape the gravitational pull of the present. That's what we want. We want a set of powers that we could observe that make it worth pursuing and make it worth navigating the product to the ultimate place.

**Lenny Rachitsky** (00:15:25):
So let's talk about the first power. You call it inflections. What is an inflection? Why does it matter? What does an inflection look like?

**Mike Maples, Jr.** (00:15:32):
An inflection is an external event that creates the potential for radical change in how people think, feel, and act. Inflections happen external to any startup or any company for that matter. So we've brought up Lyft a little bit ago, so maybe we'll use them as an example. So the inflection that enabled Lyft was the iPhone 4s shipped with a GPS locator chip. And one of the things that that illustrates is, for example, Moore's law is not an inflection, an improvement curve is not an inflection. An inflection, I'm a little persnickety about, it's a turning point. And so in math, it's a turning point on a curve where the slope changes.

**Lenny Rachitsky** (00:16:16):
But in tech startups, it's a point in time where something new gets introduced that creates new empowerment for the first time possible. And so people talk about timing and why now? Inflections for me were the unlock. You could have had the idea for ride-sharing before the iPhone 4s, but it wouldn't have mattered because the riders and the drivers wouldn't have been able to locate each other well enough. If you'd waited too long after the iPhone 4s, it would've been obvious. And so there was this window of time, this magical moment when a new type of empowerment was possible for the first time ever. And the companies that the founders who understood that were in a position to offer that kind of empowerment in the form of a radical product that changed the future.

**Lenny Rachitsky** (00:17:04):
To make it even more real for people. What are some other examples of inflections either in the past, in the present?

**Mike Maples, Jr.** (00:17:10):
Another example would be the cameras getting better on the smartphones, which enabled Instagram. So Instagram was at the convergence of a few inflections. First of all, there were smartphone adoptions. There were just more of them. And so they crossed like 10 million smartphones, but then you had the cameras getting a lot better. You had more of them connected on Wi-Fi. You had the networks having better upload speed for smartphones. So all those factors converged and made it possible for Instagram to offer a product that was good enough to take most of your photos with. You didn't start to think, "Oh, I need a digital camera separate from my smartphone. Now I can just use my smartphone everywhere I go." But Instagram could have come out in 2008.

**Lenny Rachitsky** (00:17:59):
It probably wouldn't have worked it probably, or it wouldn't have worked to the extent that it did. Its window of timing was just right. What are some other examples? The locator chips in the smartphones powered other companies as well, it powered DoorDash, Instacart. They had different insights which we'll get to, but there were lots of different ways to harness that power. One thing I love about inflections, and this kind of goes really old school, is just because you have a power doesn't mean you know how to use it, right? So the wheel was mounted horizontally for 500 years before somebody mounted it vertically. So originally people used the wheel to make pots, and that was a good innovation because it accelerated making pots, but then somebody decides to mount it vertically, and now you're propelling wagons and you just change transportation entirely.

**Lenny Rachitsky** (00:18:58):
And so most people don't realize that the thing that's underneath us or the thing that's in our hands or the thing that's in our pocket might have a power that when unleashed could change the future. And it's one of the very special things about founders that are great is they recognize, they notice things that we don't know. All of us tend to just follow the patterns we've always followed because most of us tend to assume that tomorrow will be similar to yesterday, but sometimes the founder will notice an inflection. And I find that kind of inspiring because inflections are all around us all the time, but most of us just don't bother to look. Most of us are so busy going about our day to day that we don't notice the emergence of a new empowering thing right under our nose or right in our pockets, but some founders do.

**Lenny Rachitsky** (00:19:49):
It makes me think about ChatGPT when it came out, it was sitting on top of an existing model and it just gave people a new interface to use it, and all of a sudden, everyone crazy, they're like, "Oh my God, that's the future." But it was already there. You couldn't chat with it the way that people wanted to chat.

**Mike Maples, Jr.** (00:20:05):
Like Michael Saylor, once I was talking to him and he said, the Romans could have invented the printing press a lot earlier. They had sandals that would make marks in the mud. You could have, in theory, drawn the connection between those marks in the mud and the ability to have movable type and letterpress, but nobody did. And so quite often these inflections, they'll just go unrecognized for a while, but they're always there. They're always there. They're there right now. In the ambient atmosphere, there's somebody about to harness an inflection that most of us would just walk right by and never see.

**Lenny Rachitsky** (00:20:44):
Wow, my mind is racing, what's out there right now. Obviously AI is top of mind for a lot of people. I know you're stickler for what is an inflection, what does not? Do you consider AI an inflection?

**Mike Maples, Jr.** (00:20:55):
I would say that I would probably be a little more specific about it. So I might say that certain large language models are an inflection because when I think about an inflection, and one of the things I emphasize in the book is stress tests. So it's funny, founders never really come to me and say, "Hey, can you help me come up with a good idea?" They would think they're weak sauce if they had to do that, right? So usually what's the more common occurrence is they'll say, "I've got this idea, what do you think about it?" And so what I can say to them is, "It's not my place to have an opinion, but let me just ask you, does it embody one or more inflections?"

**Lenny Rachitsky** (00:21:32):
And if it does, there's a few we could stress test that we can say, "What is the specific new thing that was just introduced? How does it empower people? How does it specifically empower specific people in specific ways? And under what conditions might that empowerment be realized? And under what conditions might it not be?" Because nuclear power has existed for a long, long time, but we haven't built any new nuclear power plants in 50 years. And so just because you have a power doesn't mean it's going to get used. It could get regulated out of existence. Customers could decide they don't want it. And so we want to answer all three things. What's the specific new thing? What is the specific form of empowerment it offers and to who?

**Lenny Rachitsky** (00:22:17):
And under what are the empowerment conditions? So like with the selection for Lyft, the inflection was the new thing was the iPhone 4s with the GPS chip, the empowerment was you can locate anyone within one meter accuracy with an algorithm, and that's going to be pretty much anybody with a smartphone. And that's a lot of people. And in order for this to be met, people are going to have to want to share their location information with applications. The government's going to have to not outlaw GPS chips and phones. Apple's going to have to keep wanting to ship GPS chips and phones. And we felt like those were pretty reasonable bets. We felt like it's pretty likely those empowerment condition will be met.

**Lenny Rachitsky** (00:22:58):
Amazing. I was just going to ask for an example. You already provided one. What about in terms of Twitch? What was the inflection there?

**Mike Maples, Jr.** (00:23:05):
I think there were a couple. The first was the shift towards user generated content and sort of internet celebrities. Justin Kan wanted to be an influencer before there was a term to describe it, right? He was really building the product that he wanted for himself. But right before Twitch or right before Justin.tv, which was the original company, Time's person of the year had been you, and they had YouTube on the cover of the magazine. And so you had, that was a major turning point in how entertainment was happening. But simultaneously, broadband penetration had reached critical mass. The CDNs were getting really good, we thought that they would get better. And so you were in a situation where the conditions to live stream video for the first time broadly over the internet were being met. Whereas you could have done that even two years before. In fact, Kyle Vought had to invent some pretty miraculous stuff to even make it work when they did. But you could see how, okay, once video starts streaming on the internet in real time, that could be a thing. You could just see how that would be a thing if it worked. And so I'd say those are the inflections. Airbnb, company close to both of our hearts for different reasons. They benefited, I think from a couple things. One was the proliferation of customer reviews online and people's trust of reviews as a substitute for trusting the brand of a hotel. But then also Facebook Connect made it possible to pass people's profile information. And so the guest and the host didn't quite seem like as much of a stranger as they might've. And so there were a few things that happened at the same time, and then the great financial crisis. And so you had people upside down on their houses needing to find some way to generate income. So all of those things came together at the same time to help Airbnb.

**Lenny Rachitsky** (00:25:00):
The examples you shared are a good reminder that the inflection doesn't have to be technological. You shared a few of the categories of types of inflections. Can you just do that again?

**Mike Maples, Jr.** (00:25:08):
I love that question, and I'm glad you reminded me because here's a really recent example. When the laws were changed because of shelter-in-place for telemedicine visits, it used to be illegal to do a telemedicine visit across state lines. But now all of a sudden with COVID and shelter-at-place, not only was it made legal, but it could even be reimbursed by the healthcare system. And so that's an inflection because it empowers patients to access more doctors, and it empowers doctors to access more patients, and it also changes the delivery mechanism in an empowering way.

**Lenny Rachitsky** (00:25:47):
In no event was that a technology change, that was a regulatory change that allowed technology to be empowering in new ways, but it was a specific new thing that meets that condition. It empowered specific people in specific ways, and there was a new set of empowerment conditions that ended up being made. And one of the things that we would ask at the time was, once COVID and shelter-at-place goes away, are they going to revert back to the old laws? And if they did, that would've been a problem. And so that would be the empowerment condition, but it's a fairly robust way of stress testing any inflection, right? Is to ask those three or four questions.

**Lenny Rachitsky** (00:26:27):
So there's regulatory inflections, big changes in regulation, there's technological, there's also, I think you implied an attitude, like the way people see [inaudible 00:26:35]

**Mike Maples, Jr.** (00:26:34):
Yeah, there can be a belief inflection.

**Lenny Rachitsky** (00:26:36):
Belief.

**Mike Maples, Jr.** (00:26:37):
So for example, during COVID, the amount of telemedicine visits exploded. And so as a result, there was a permanent change in people's belief about whether they would want to do a telemedicine visit. Before that, the technology was there, but a lot of people just didn't do it. The doctors didn't want to or decide to, or the patients didn't want to decide to. But now all of a sudden people were doing it, they're like, "This is much better. I'd much rather do it this way than go visit the doctor and wait in line and all that stuff." And the doctor's like, "I'd much rather do this than have these people backed up in my office." I would argue that here we are doing a podcast on a video platform, even though it's not Zoom, I would say that Zoom was another example. The idea of people working from home a reasonable number of days a week is a permanent condition, I think is another inflection that happened with COVID.

**Lenny Rachitsky** (00:27:32):
And so are those the three, regulatory, technological, and belief?

**Mike Maples, Jr.** (00:27:35):
Those are the main ones. And I would say that in many ways you could say that from a macro point of view, it's two things. It's technology changing enablement, and it's people socially changing their beliefs and their patterns of behavior. And either one of those changes can be an inflection because either one of those changes can represent a turning point in one's capacity to change the future.

**Lenny Rachitsky** (00:28:03):
Amazing. Okay.

**Mike Maples, Jr.** (00:28:00):
... point in one's capacity to change the future.

**Lenny Rachitsky** (00:28:03):
Amazing, okay, so we've talked about inflection, the next bucket is, in the next element of breakthrough companies that you found is an insight. Talk about that.

**Mike Maples, Jr.** (00:28:11):
Yeah, so unlike an inflection, an insight does come from the founders. An insight, I like to say, is a non-obvious truth about how one or more inflections can be harnessed to change people's behavior. So in the example that we gave earlier with Lyft, the inflection was the iPhone 4S, insight was, oh, that means you could do Airbnb for cars. And so, you had to have some type of a creative insight to see that. Now, what was non-obvious about it, or non-consensus about it, who's going to want to get in a stranger's car? That's crazy, right? And thank God ... I mean, if there's one piece of goodness about us passing on air bed and breakfast design, Anne and I were like, man, nobody's going to want to stay in a stranger's house, that's crazy. And at the time, air bed and breakfast, the host of the guest stayed in the house at the same time, and the host would feed Pop-Tarts or something like that to the guest the next morning.

**Lenny Rachitsky** (00:29:15):
This is right around the time of the Craigslist killings and stuff, where this is just scary and kind of crazy, couchsurfing as a service. But by the time we saw what was Zimride at the time, what became Lyft, Anne and I were much more prepared to believe that insight than we would've been because we'd foolishly passed on Airbnb. So that's a really important aspect of insights. So the insight needs to leverage inflections, but this is the subtle part, it needs to be non-consensus and right, not just right. So in the world of opportunities, if you're right and consensus, you still don't do that well. And an idea that is right but consensus has a couple problems to it. One is, if it's consensus, it's probably not radical enough.

**Lenny Rachitsky** (00:30:09):
Because when you think about it, human beings are conditioned to like things, and so, if everybody likes your startup idea, it means it's too similar to what they already know, what they're familiar with, which means it's probably too similar to the consensus, it's too similar to the incumbents, and so, the best startup ideas have this trait where most people don't like it or are even hostile to it, or just kind of meh about it. But some subset of people are just like, where have you been all my life? This is amazing, I love this. They fall irrationally in love with the idea.

**Lenny Rachitsky** (00:30:45):
And so, most of the great startups that I've seen have that attribute to them, and the reason is that a great startup, unlike a conventional company that proposes the future as an extension of the present, so that ... Normal companies forecast, they say, I'm going to look forward from the present and forward project what the future will be. Great founders, pattern breakers back cast, they say, it's a given that the future has to be radically different for me to be a big winner, and so, I'm going to look for radically different futures and work backwards from those radically different futures.

**Lenny Rachitsky** (00:31:23):
And so, the radically different future comes from that thinking different, thinking non-consensus. And then, it's the different actions that get you to say, okay, now I'm out in this different future, but right now, I'm all alone in this different future. I have to get people to come join me in that different future, and I have to find people who are ready to move with me to that different future. And that's where the pattern breaking actions come in.

**Lenny Rachitsky** (00:31:47):
And not everybody's going to move at first, and so, I can't waste my time with people who won't move, I can't waste any URGs of energy on anybody other than those ready to move or are about to move. And then, I need to co-create the future with those early believers. And so, great startups happen when a subset of people in this world buy into the founder's insight, and then move with them to co-create that future. And then, eventually, what was a heresy becomes the conventional wisdom as more and more people start to realize the advantage of it.

**Lenny Rachitsky** (00:32:19):
There's so many threads I want to follow here, one is the Airbnb story. Interestingly enough, I had Jessica Livingston on the podcast recently, and you probably know this, but Paula Graham and her did not like the Airbnb idea. They all were like, this is a terrible idea, we are going to assume they will change the idea, but we love the founders, we're going to take a bet on them.

**Mike Maples, Jr.** (00:32:35):
So I was introduced to the guys by Michael Seibel, who was one of the co-founders of Justin.tv Twitch, and Michael introduced me to Brian Chesky before they applied to Y Combinator. So Michael's like, they're not even close to ready to apply to YC, but he thought that I maybe would think that it was the right kind of crazy. I get pitched by a lot of ... I'm not very off put by crazy ideas.

**Lenny Rachitsky** (00:33:03):
I could see why.

**Mike Maples, Jr.** (00:33:03):
And the meeting was totally discombobulated, so room full of cereal boxes, I'm like, what's up with this? Why is there cereal here? And then, he can't get the product to work, and I'm like, okay, that's okay, let's just look at the slides. And he goes, well, Michael Seibel told me that you don't slides, you like demos. And I was like, that's true, but it's not working. So we're like, 20 minutes into this meeting in a room full of cereal boxes just looking at each other. And you can't win them all, right? You win some, you lose some.

**Lenny Rachitsky** (00:33:34):
I wouldn't blame myself if I were you, [inaudible 00:33:37].

**Mike Maples, Jr.** (00:33:37):
Here's the other thing that's hilarious about Airbnb, so they do this thing because they can't pay their rent. They put up this WordPress site to pay for their rent because there's a design conference in San Francisco. In the meantime, they're brainstorming startup ideas, so they wanted to do a startup together, but it never occurred to them at first that air bed and breakfast was the startup idea. They're like, we just need to use that to make money so we can go do a real startup. And so, that's the irony, too, is that, you look back on it and almost smile at the fact that they didn't know what they even had at first, it was almost an accident.

**Lenny Rachitsky** (00:34:13):
There's a lesson there of, you find something that works, and even if you don't think it's a big idea, don't take that for granted.

**Mike Maples, Jr.** (00:34:21):
Oh, I very agree. And the other great lesson is, you don't want your initial startup bets to be too big to fail. You want ideas that are small enough to fail a lot because you don't want to be attached to success, you want to be able to just try things and play with stuff and tinker with things because you don't really know where the fractal of new insight is going to reveal itself. And so, there is a little bit of play to this that I think is pretty important.

**Lenny Rachitsky** (00:34:53):
Do you remember some of the ideas they were brainstorming, by the way?

**Mike Maples, Jr.** (00:34:56):
I don't. I wonder if even they do.

**Lenny Rachitsky** (00:35:00):
Yeah, probably not, probably not.

**Mike Maples, Jr.** (00:35:00):
It's probably in The Airbnb Story, their book.

**Lenny Rachitsky** (00:35:04):
I feel like them failing in your demo helped prepare them for YC, and that's what helped them get in, so I think that you're a big part of their story.

**Mike Maples, Jr.** (00:35:10):
And to make it even more painful, I'm in the book. Somebody called my wife Julie the other day and said, is that your husband in the Airbnb story? And we get the book, and there's a chapter, and it talks about how hard it was to raise money. And they weren't dissing on me as a dumb VC, they were like, look how bad we were at presenting this at first. It was just a complete catastrophe presentation. But that's another good lesson for me, too, I learned a very permanent lesson from that, which is, just because the presentation's good or bad, it has nothing to do with whether you should necessarily invest or not. Sometimes you have to be awake to the possibility of what it's going to be regardless of how messed up the presentation is.

**Lenny Rachitsky** (00:35:55):
What was their evaluation at that point?

**Mike Maples, Jr.** (00:35:57):
Oh, this hurts to ... I think he offered me a chance to invest it at $1.5 million valuation.

**Lenny Rachitsky** (00:36:09):
But now they're a $100 billion business, I believe.

**Mike Maples, Jr.** (00:36:09):
Oh, yeah, I would've made like, 6,000 times more money or something like that.

**Lenny Rachitsky** (00:36:10):
Okay, great, [inaudible 00:36:14].

**Mike Maples, Jr.** (00:36:13):
Thank God I said yes to Twitter and Justin.tv, and we said yes to Lyft and Okta, because if we'd seen all of those and passed on all of them, I'd be apoplectic.

**Lenny Rachitsky** (00:36:29):
I think that's what's interesting about your stage of investing is, you just need a couple to work out for you to win.

**Mike Maples, Jr.** (00:36:35):
Yeah, that's right. And by the way, it's true when you're a founder, too, if you do this right, you only have to be right once. And so, that's really important.

**Lenny Rachitsky** (00:36:45):
Coming back to the insights lesson, one thing that you brought up when we were chatting about this is the importance of being surprised and the power of surprises. Can you talk a bit about that?

**Mike Maples, Jr.** (00:36:56):
Yeah, so there's a couple of things about insights that I think are really important, and this is one of them. I believe that there can't be a recipe for breakthrough. And why is that? Well, recipes exist for things that have already been discovered, so if I give you a recipe for making a cake, somebody has probably made that cake before, the exact way they're defining it. And so, breakthroughs, though, by definition, haven't happened yet, they haven't been discovered. The general theory of relativity had to be discovered by Einstein, and the idea for ride-sharing had to be discovered by the ride-sharing companies, or Airbnb, by Chesky and Nate and those guys. And so, what you want to adopt is the right mindset. And how do you adopt the right mindset? You interact with new technologies at the cutting edge, but you actively savor surprises.

**Lenny Rachitsky** (00:37:52):
And when you think about it through the lens of a breakthrough and what we just said, it makes sense, because if you want to find a breakthrough, you want to be surprised, you want to discover the undiscovered, you want to know something you didn't know before. Because if all you do is an experiment that proves, that validates what you think, you didn't really learn anything, when you think about it, you just doubled down on your existing understanding or opinion. I learned this lesson from Scott Cook, who was the founder of Intuit. Whenever he would be presented a new product, people would present the idea to him, and he would say, what were your three biggest surprises as you were coming up with this plan? And what he would find is, quite often, they couldn't name any. And he felt like when people can't name the surprises they came up with, they're too brain locked on what they want. They have the agenda they have, they want validation, rather than truth seeking.

And so, if you're an authentic truth seeker, you're always hoping to be surprised, and you think of surprise as a gift, because you think, wow, maybe I encountered that surprise before anybody ever has. And so, that's kind of what we mean. And you want to construct your experiments so that you're in a position to be surprised. So a good example would've been what the guys at Chegg did. So Chegg was wanting to see if people would do textbook rentals, so they created a fake site called Textbook [inaudible 00:39:21]. But here's where Osman and Aayush were very savvy. Rather than just test whether people would rent a $100 dollar textbook for $35, they tested an arbitrary set of prices, all the way up to $75. And so, they had the demand preference curve at different prices. And Textbook [inaudible 00:39:42] wasn't a real site, so you'd get to the shopping cart and it would give you a 404 error.

**Lenny Rachitsky** (00:39:46):
But we could tell that people wanted to rent textbooks, and the surprise was that they would rent them for more than we thought. We thought we need to get at least 35, but some students were willing to pay 75. And so, that understanding was huge, if we'd only done an experiment to validate the hypothesis of, yes, will they rent it for 35, our pricing model would've been totally different from, oh, wow. And when you think about it, it makes sense, the student didn't want to keep the textbook. Econ 101, I'm going to give it back anyway, so 75 bucks is less than 100, I can buy beer with the extra money. So that would be an example of the surprise.

**Lenny Rachitsky** (00:40:22):
But most of the startups that have had great outcomes, I find, there was a kind of surprise like that. Being non-consensus is not the same as being contrarian. Being contrarian is another form of conformity because it's still relative to somebody else. Most of the great founders I see, they almost feel guilty that they found this secret, but they earned the secret by tinkering with the future and noticing surprises, and having their noticing filter tuned to volume 11, where most of us wouldn't notice it, most of us would just pass the secret right by because we're looking to validate what we think is already true.

**Lenny Rachitsky** (00:41:03):
You referenced this term that is also one I love that you use occasionally, this earned secret. Can you talk a bit about that? It's basically the same idea that you uncovered something by trying things that no one else has seen yet. Is that the general idea?

**Mike Maples, Jr.** (00:41:15):
So to me, secrets are earned. A lot of people, I think, have the wrong idea of what vision is. A lot of people tend to think visionaries as like, they have a special pair of binoculars, and they can look out farther than the rest of us can. But in my experience, that's not how inventions really happen, the way inventions happen is, people get their hands dirty and they learn about what's missing in the future because they're getting their hands dirty with what's new about it. And so, they earn the secret by going down this rabbit hole of exploring something at the cutting edge for its own sake.

And just like I'm a trained spotter for startups, they become a trained spotter for this new thing that they're excited about. And they frustrate the people around them, they'll be at a party, and everybody's talking about the basketball game, the Celtics against the Mavs, and somehow that reminds them of the fact that they want to test prices for textbook [inaudible 00:42:17]. But they're that interested, it's the last thing they think about when they go to bed, the first thing they think about when they wake up. And so, that's where I find most of the really great earned secrets come from, they're earned in the sense that you earn them by getting your hands dirty, and you earn them by being awake to the possibility that secrets are there or that just most people aren't looking.

**Lenny Rachitsky** (00:42:40):
This connects with that stat that you shared, that 80% of your biggest returning investments came from a pivot. It all connects, where you're just trying stuff, you're learning, seeing things people haven't tried.

**Mike Maples, Jr.** (00:42:49):
That's right, and in the early days of product market fit, I like to say we want to answer a very simple but profound question. What can we uniquely offer that people are desperate for? And if we have an insight, that makes us unique. Now, if a customer doesn't like your idea, a couple of things could be true. One is, your insight could be wrong. If your insight's wrong, you don't have a startup, you should just stop. The other thing, though, that could be true is, your implementation is wrong. So you had the right insight. So like Okta, at first, they wanted to do cloud systems management, they thought that they needed to do problem resolution, but when they showed it to customers, they were kind of meh about it. And they said, well, why are you meh about this? And they said, well, it's not a top priority. And they said, what is your top priority? And they said, identity management.

**Lenny Rachitsky** (00:43:40):
So they had the right insight, which was, customers would struggle to manage cloud services, but they had the wrong implementation of the insight, so then they came back with identity management, and it worked. So if somebody doesn't like your idea, if they're not desperate for it, either the insight's wrong, the implementation's wrong, or you could be talking to the wrong customer. Some people that Okta talked to wanted to integrate it with on-prem software. And in that case, their opinion's irrelevant because they're not an innovative customer, they're not living in the future, they're not going to give you product requirement ideas that are additive to your strategy. And so, you want to be, right insight, right inflections, right implementation, right early believers that you're talking to, as you iterate towards product market fit. And if you're not succeeding at product market fit, then one or more of those variables isn't working yet.

**Lenny Rachitsky** (00:44:37):
I think this might be a good time to remind people that you don't need to have every one of these for your business to potentially be a huge success. It's more that, the more you have, the more likely it is that you will find something massive. Is that right?

**Mike Maples, Jr.** (00:44:50):
That's right. And this is the hard part about being non-consensus and right is, you don't know for sure that you're right at first, you only know that you're non-consensus. And so, you have to be willing to risk being wrong to be spectacularly right. And so, what you're trying to do, though, is pursue opportunities where the odds are massively in your favor. And so, I kind of return back to, business is never a fair fight. And so, if I'm a founder, there's a universe of ideas I can pursue. The mistake that a lot of founders make, and it's very understandable, they say, I want to go after big market opportunities. So they analyze big markets, they find unserved customers with unmet needs in under-addressed markets, so then they go build a product to go solve that problem.

**Lenny Rachitsky** (00:45:38):
And that's very appealing, because it seems obvious, and the dots connect forward in an obvious way. But unwittingly, it buys into a context, it buys into the current definition of the market, which was already set by the incumbents. And so, what you instead want to do is pursue a slightly more ambiguous opportunity, but one that harnesses these powers. Ones where you look at the inflection and you say, wow, that's really powerful, you look at the insight, and you say, yeah, I know that this is going to be, in the future, I know that this is where things are going to be radically different someday. I would rather have those things present and be willing to pivot the product than not have those things and have a much clearer idea of what the product should be.

**Lenny Rachitsky** (00:46:23):
Funny enough, one of my biggest investment successes that exactly what you're saying you shouldn't do, which is, they looked at a huge market with a bad incumbent and built something better, and it's working. But I think, again, it's not that you can't win that way, your point and your research shows that your chances are a lot higher doing something totally different.

**Mike Maples, Jr.** (00:46:42):
That's right, and I would bet that this company ... I don't know enough about it, I don't know what it is, but it wouldn't surprise me if they harnessed inflections in some way that was disorienting to the incumbent. It wouldn't surprise me if they found a way to use inflections to fight an unfair fight. What I try to do with the insights is, I realized there was a theory behind it. A theory is not a recipe, it's an explanation. And what inflections let the founder do is wage asymmetric warfare on [inaudible 00:47:11]. And the insight is the vessel that they use, right? It's kind of like, the rock is the inflection, the slingshot is the insight that David shoots at Goliath. And so, that's what we're looking for, we're looking to create the conditions where we're going to get to play an unfair game by unfair rule to favor us.

**Lenny Rachitsky** (00:47:32):
Great segue to the third bucket and the third element of Breakthrough Company's Future-Founder Fit. What is that?

**Mike Maples, Jr.** (00:47:39):
Yeah, so this is one of my favorites. So a lot of times, people will say, what makes a great founder? And there are some common traits, passion for the idea, persistence, resilience, all these things that people talk about, passion for the users. But what I find is that there's no canonical best founder. So Marc Andreessen started Netscape as a programmer making minimum wage at the University of Illinois. And everybody thought the digital highway at the time was going to come from Time Warner or from Microsoft Network or from the US government, nobody thought that some kid was going to do it from the bottoms up. But it turns out that Marc was tinkering with a set of inflections around the World Wide Web. And right around that time, Microsoft introduced a better version of Windows, and right around that time, the Pentium processor came out, so there were more and more people [inaudible 00:48:36] graphical user interface computers at the very time that browsing started to happen.

**Lenny Rachitsky** (00:48:41):
But let's take another company more recent, Applied Intuition, makes simulation software for autonomous vehicles. If you're going to sell a giant contract to the CEO of a car company, he needs to look at you across the table and think, these guys can do the job. So Qasar and Peter, they'd grown up in Detroit in Michigan, they had worked at car companies in the past, in the big three, and then, they worked inside of Google at Waymo and Google Maps. And they'd had a successful startup before, and so if you looked, what is a team from Central Casting to do this, it would be them.

**Lenny Rachitsky** (00:49:22):
And so, what I mean by Founder-Future Fit is, there's a set of traits that a founder can have that make them ideally suited to a certain type of future. Sometimes they're really young first-time founders, Mark Zuckerberg, Bill Gates, Paul Allen, we just gave the example of Marc Andreessen. In that case, usually they're at the cutting edge of a new technology and they have a beginner's mind, and they aren't even encumbered by the old way of looking things. It's like, the entire world lives in Cartesian coordinates and they discover polar coordinates, and they don't even have to translate between the two because they never understood Cartesian coordinates.

**Lenny Rachitsky** (00:50:01):
And so, in that case, their knowledge about the future is more valuable to success than their knowledge as business people. But in the case of Applied Intuition, if you're selling very large contracts to enterprise customers, they need to believe that you could do the job. If you're Okta and you're doing identity management for cloud customers, they're going to trust Todd McKinnon from Salesforce way before they're going to trust a college dropout to do that job. And so, I like to say Founder-Future Fit is, who knows the most about this future? Who has the most intrinsic motivation to pursue it? Who has the best network and keeps the best company in that ecosystem of the future? Those are the types of things that ... Founders that show up differently on those dimensions usually do better because they're more likely to understand what to build in the first place, and they're more likely to convince early believers to believe in their ideas in the first place.

**Lenny Rachitsky** (00:51:05):
So it's not that these people have some vision of the future that is more accurate or more incredible than everyone else, it's that their background, and even the way they look, matches the problem that they're going after. So in this Applied Intuition case, you're saying the founders look like people that a CEO of GM would be like, I trust these people to build this thing for me.

**Mike Maples, Jr.** (00:51:25):
Yeah, Louis Pasteur once said, chance favors the prepared mind. And when I started working on this book, for the first time, I really understood what he meant. Chance favors the prepared mind because a prepared mind attracts luck. A prepared mind is better positioned to notice a breakthrough than other minds. And a prepared mind sees the breakthrough, sees around the corner, because they're thinking about the subject all the time. And so, most people think that the way you come up with good startup ideas is to try to think of a startup. And I like to say, no, that's exactly wrong, what you do to come up with great startup ideas is, you live in the future, and you notice what's missing in the future. And it's axiomatic, if you're living in the future, there will be unbuilt, missing things, because if it was all built, you'd be living in the present. And so, if you're living in the future and you notice what's missing, your intuition about what to build is far more likely to be right.

**Lenny Rachitsky** (00:52:32):
So Andreessen didn't do the Mosaic browser because he thought there was a market for browsers. He didn't even know about a digital highway, he was trying to make the internet immediately more useful for him and his team. And his intuition about what to build was very good because he was building the thing he wanted that was missing in the world. In the case of Okta, they knew all the early Salesforce customers, but the principle still applies, those customers weren't equal, they were lighthouse customers. It was kind of like when I was at Silicon Graphics, I didn't spend time with normal movie studios, I spent time with industrial Light & Magic, because I thought, if we solve their problem, they're going to take us to the Promised Land. All the stuff we build for Industrial Light & Magic will be the stuff that everybody wants someday. And so, not all customers are equal, you want to find customers that live in the future.

**Lenny Rachitsky** (00:53:24):
I love this point. Justin.tv is another great example of this, where he just assumed the future, everyone's going to be watching each other's reality show, so he built his own backpack with a camera [inaudible 00:53:34] just to stream himself.

**Mike Maples, Jr.** (00:53:34):
Yeah, and the Justin.tv example is a great one, too, because in Justin.tv, he built the thing that he wished he had, even though it was a terrible idea. But it embodied attributes, it embodied these inflections of these insights that led them ultimately to Twitch. Ironically, Justin's second company, Atrium, most people thought that that made sense, automating legal tasks. And Justin's a great founder, but Justin just didn't like the legal field, he had no passion for it. When he started Atrium, his passion was to be a higher status founder. And I've got a podcast with him recently where he talks about this, where he's like, I wanted to be as big as Patrick Collison and Brian Chesky and Drew Houston. But it turns out, that's not a very good reason to start a company. Founder-Future Fit is ultimately about authenticity, and it's about, who is the most authentically matched for that different radical future? And whoever that team is has a really big head start at getting product market fit. And product market fit is the game, whoever gets it first wins.

**Lenny Rachitsky** (00:54:43):
**Mike Maples, Jr.** (00:55:52):
The number one thing I like to say is, get out of the present. And so, people talk about getting out of the building, and of course, we should, but getting out of the-

**Mike Maples, Jr.** (00:56:00):
And of course we should, but getting out of the present is a little bit more subtle than that, right? So William Gibson was right when he said, "The future is already here. It's just not evenly distributed." So most great startup ideas come from a future that exists right now today. And so what I like to say to people, and this is a question that I always ask when I'm pitched, "Is this from the future?" And then some people will say to me like, "Hey, I have a mental health startup. Mental health is a huge problem. It needs to be solved." And I'll say, "Why is your idea from the future?" "Well in the future I believe mental health needs to be solved." I'm like, "That's not what I'm asking. I'm asking what part of the future have you been living in that gives you the right to have an opinion about the future?"

**Lenny Rachitsky** (00:56:52):
So I like to say, "If you're not living in the future, your opinion about it isn't valid." It's like saying, "I think a customer will do X." And you've never talked to a customer. I'm like, "Okay, your opinion's interesting but irrelevant." And so the only relevant opinions about the future come from people who are living in it and coming from people who understand what's new about it in a very visceral way. And there are people who do a good job of this, like Maddie Hall who started Living Carbon. She was working at Zenefit and at first she tried to think of a startup and she had ideas that weren't that good. She had a laser tag idea and a few other things. But then she decided to go follow Sam Altman for a year to be his chief of staff.

**Lenny Rachitsky** (00:57:36):
And Sam Altman visits the future multiple times a day with people. And so that's what led her to this idea that for Living Carbon, which does genetically modified trees. I mean, it couldn't be farther away from Zenefit, right? But she saw Microsoft was about to spend a lot of money, a bunch of other companies about to spend a lot of money on carbon takeout. She saw that the genetic engineering technology was getting good enough that you could engineer these trees. She married the inflections with the need and then off she went. But she was basically sampling a lot of different futures until she found one that she liked.

**Lenny Rachitsky** (00:58:15):
I love that example because it makes it very real what living in the future looks like. So one is spend time with people that are very far along on some edge of technology or the way people behave. Another you shared is a work with a company, say that you work with a silicon graphics industrial related magic...

**Mike Maples, Jr.** (00:58:34):
[inaudible 00:58:34] magic.

**Lenny Rachitsky** (00:58:34):
Yeah.

**Mike Maples, Jr.** (00:58:35):
Yeah. So McCracken had a term for it that I've always liked lighthouse customers. And so the lighthouse has this light that shines out and obscures the fog. And not all customers are equal and some customers are living in the future and those customers are gold. And those customers will, if you solve their needs, take you to the promise land. So yeah, you can build what's missing for yourself like Andreessen did or Zuckerberg or Steve Wozniak or Bill Gates, or you can build something for lighthouse customers you have a good relationship with. Or if you can do neither of those things, the number one question I get asked is, "Hey, that's great if you live in a supercomputer lab or if you were selling to Industrial Light or Magic or all the Salesforce customer. I'm not one of those. I'm a second year student at Stanford Business School. I'm a product manager at company X, I'm whatever the case may be. That's where the Maddie Hall example is really powerful. Because Maddie proactively got out of the present in a very intentional way. So I love her example as a case study.

**Lenny Rachitsky** (00:59:48):
What signs tell you that a company is one of these lighthouse companies living in the future or a person is just like, you just feel it, they're so far ahead of everyone else.

**Mike Maples, Jr.** (00:59:55):
Usually it has to do with how tech forward they are. There was a time when a lot of people didn't think the cloud was going to be a thing because it was insecure. And I'm not going to host my important data and let somebody else have it. But there were a set of customers who really excited about the cloud and they tended to adopt certain kinds of products. When I used to work in client server startups, you knew that the early adopters were people who were using relational database servers and scalable front end programming interfaces and things like that, were trying to have distributed apps that they would roll out. You could tell who was trying to play offense with the new trends.

**Lenny Rachitsky** (01:00:38):
Awesome. Okay, before we move on into actions, is there anything else you think might be useful to share in terms of helping people come up with an idea, find a great idea?

**Mike Maples, Jr.** (01:00:48):
The number one thing about the ideas goes back to the not playing the comparison game. So the thing that I see people underestimate when they come up with ideas is the threshold of desperation required in the customer. So we want to solve problems for desperate people and it's like if we have powerful inflections that really empower and we have something unique, there should be somebody who is irresistibly drawn to that empowerment. They should say, "Oh my God, this is incredible. This is a game changer. I can't unsee that." Why is that important? I like to say that if a customer has the ability to do something other than what you do to solve their problem, they won't be crazy enough to do business with a startup. So customer has to be so desperate that when they see what you have, they're like, "I've got to have it."

**Lenny Rachitsky** (01:01:47):
And so I like to say, "You want to force a choice and not a comparison." If everybody's selling apples, I can't be a 10 times better Apple. I want to be the world's first banana. And I want to say to people, " You may not want bananas, you may not like them, you may not value the advantage of bananas, but if you value banana-ness, I'm the only person that's got it." It's like, "Come to papa." And so that's like an insight feels like that. And in the early days, don't spend any of your time with people who love apples because you're not going to convince them and they're going to waste your time. What you want to do is find everybody in the world that values the advantages of bananas as soon as possible, not wasting any time on the people who don't. And so I'd say that that kind of wraps up the idea of insights is it like we want to force a choice and not a comparison. Nobody looks at the Tesla cyber truck and says, oh yeah, well how does that compare to Ford F-150? And you may hate the cyber truck, you may think it's stupid, but nobody's neutral about the cyber truck. You want to have a product that people can't be neutral about, but that the people who magnetize positively to it just can't imagine a world without.

**Lenny Rachitsky** (01:03:03):
I love that. And going back to your banana example, you want just a few people to be just like, "I need that banana." No matter how much you're charging.

**Mike Maples, Jr.** (01:03:10):
That's right. And even if it's halfway ripe, because that's the other thing, they need to be willing to tolerate the fact that you can't execute very well because how could a startup execute really well? They have no resources. And so the only chance for a startup to win is to win on a playing field where better doesn't matter where execution isn't as important as, "Got to have that thing. I'll take any version of it you give me because I am desperate for it."

**Lenny Rachitsky** (01:03:42):
Speaking of execution, good segue to the second part of the chat, which is basically you looked into what do the most successful companies and founders do differently? And you also found three core things that they all do and many of them do. Movements, storytelling, disagreeableness. Let's talk about each one, pick whichever one you want to start with.

**Mike Maples, Jr.** (01:04:04):
Yeah, so we've talked about thinking different, but it's like the problem though is that asking people to abandon the familiar for an uncertain tomorrow is a provocative act. All startups are fundamentally disagreeable. There are disagreement with how things are done, there are disagreement with the pattern of what is. And so we need as founders to persuade others to change their habits with our pattern breaking actions. And so what the pattern breaking founder does is they create a stark dichotomy between the world that is and the world that could be. And they create an irresistible desire on the part of early believers to move to that different future with them. And so I like to say there are three aspects to acting different, right? One is the other storytelling and the other is disagreeableness.

**Lenny Rachitsky** (01:04:59):
And so the movement piece is the front and centerpiece because most people when they think of movements, they think of it as more like social movements like Civil Rights Movement and Martin Luther King, or they think of there's artistic movements like Cubism and Picasso. But fundamentally, a movement is a different way of developing a market than how most marketing people think about developing the market. Most people when they think about marketing, they think, "Okay, I've got a set of targets, I've got a set of programs. I've got inbound and outbound. I've got these things I need to do." What a movement does is it leverages a grievance of a minority against the tyranny of a majority. And it takes that and animates it in a way that those early believers are emotionally committed to moving.

**Lenny Rachitsky** (01:05:50):
So early customers are not animated by pragmatism, they're animated by belief. Early customers, early employees, early investors don't decide to go into business with you because of the practical reasons that you unlock. They do it for aesthetic reasons. They do it because they believe what you believe. And so a movement is basically a set of people with the same belief moving together to a different future. And when you think about it's equally the same, right, for the civil rights movement. And a movement is a way to crystallize the choice. If you believe in civil rights, you can't be half in on that. You either believe that it should be about the content of people's character, not their skin color. You can't be sort of not racist. You either believe or you don't believe.

**Lenny Rachitsky** (01:06:46):
The people who followed Martin Luther King bought into the aesthetically better future that his movement promised. And it turns out, and I don't mean to equate, that was a pretty important movement, right? It's like some movements are more frivolous. I say an artistic movement. But the notion is similar in that there's a set of early believers who believe they've been enlightened about something that the rest of the world doesn't get yet. And they think that the startup founder is sort of like the prime mover of that movement. And then what happens is that startup markets happen because the movements accumulate and accelerate and more and more people join them. And what was once heresy becomes the accepted conventional wisdom and now the company's no longer a startup, it's a company, and now all of a sudden it is a valid market and all of a sudden they're the status quo and they got to watch out for the next set of disruptor. So the movement is the first key thing I think in all of this.

**Lenny Rachitsky** (01:07:45):
Is there an example? Lyft obviously comes to mind with the pink mustaches just as the future.

**Mike Maples, Jr.** (01:07:50):
Ride-sharing was a movement. In my early days starting Floodgate with Anne, we thought that seed investing was a movement. And so we thought that there was going to be a day where seed funds would be a permanent feature of the venture landscape, but people didn't believe that in the late 2000s. And so we're like not enough that we just succeed and invest in good companies. We need to get the best LPs in the world to buy into this. We need to get Phil Horsley and Horsley Bridge and Dave Swenson at Yale and people who are respected in the ecosystem to say, "Yeah, I buy into that." And so it was really important to us to get the right early believers in our movement. Judith Elsea at Weathergage, who had just started a new firm.

**Lenny Rachitsky** (01:08:40):
One of my favorite examples is actually an old one, Clarence Bird's eye. So you go into the supermarket and there's frozen food aisle. Well, Clarence Bird's eye discovered how to flash freeze food when he was up in the Arctic looking at Eskimos, and they were flash freezing their fish and he wondered, could you do it for other things? And he found out you could fruit and vegetables, but it wasn't enough to just flash freeze the fish or the fruits or the vegetables. You had to convince the trains to have a refrigerated car. You had to convince the supermarket to have a refrigerated aisle. And so he had to start a movement where a whole lot of people simultaneously believed in this idea of being able to eat food in a more convenient way, not always in season, not always grown locally from where you were. And so all movements have that characteristic where you kind of start with a higher purpose and then you move people to that different future.

**Lenny Rachitsky** (01:09:35):
I'm trying to think about what are current movements that are happening. One that might be a movement is with LLMs just this bet that transformers are the future of how this is going to work, that just more compute is the answer versus trying to find something else. Does that sound right?

**Mike Maples, Jr.** (01:09:50):
Another one that I really like is Tesla. So Tesla's mission says, "Accelerate the world's transition to sustainable energy." They don't even say they're a car company. So Tesla doesn't say, "Here's why we're better than Ford and Toyota." And this is really important, right? Because the great movements do appeal to a higher purpose. They don't say, "I'm better than company X. I'm Avis, I try harder than her." They appeal to a more aesthetically higher purpose future. And then they show that this startup is the vehicle for that movement to be actualized, which is kind of a good segue to storytelling.

**Lenny Rachitsky** (01:10:32):
One other quick example I'm thinking about linear is kind of pushing this movement of craft and design and experience matters in B2B software. And you shouldn't settle for something that you don't love.

**Mike Maples, Jr.** (01:10:42):
Very much so. And you know what, Chesky, I don't think he even knew he was fully doing this at the time, but Chesky did this brilliantly with Airbnb. So he created a movement around living like a local. And so the other thing that a movement does is it turns the greatest strength of the status quo into its biggest weakness. And so Brian never said, "Hotels suck. Death to the Four Season." He just said, "Hey, look, when you go to Paris, you have a choice. You can hang out in the Four Seasons and it's going to be just like the Four Seasons everywhere else in the world. It'll be in the middle of the town, or you can live in Paris like a Parisian." And he's like, "I don't have to say that the Four Seasons is bad for you to decide to choose me. And oh, by the way, if you want to stay in the same kind of hotel everywhere you go, I'm not for you."

**Lenny Rachitsky** (01:11:31):
But so now let's say you're four seasons, your whole business is predicated on doing a good job of having a common experience that people could accept and that they're used to and that they expect. And so now you've taken all of the stuff that you invested decades in and turned it into something you have to apologize for all of a sudden. And so the great startups, they create movements not so much by criticizing the incumbent, but by showing the weakness in the strength of the incumbent. And then just saying to the customer, "Hey, look, you decide it's not up to me to decide what's bad about Four Seasons. It's up to you to decide whether you value my difference or not."

**Lenny Rachitsky** (01:12:11):
It reminds me of counter positioning from Hamilton Helmer's Seven Powers book.

**Mike Maples, Jr.** (01:12:15):
A hundred percent.

**Lenny Rachitsky** (01:12:18):
So to make it even more practical for people that are like, "Oh, I need to come up with a movement for my startup. That's why things aren't working." It sounds like it's kind of here's how we want the future to look and why we're doing this. And then it's a combination of marketing, positioning, messaging, repeating it, social media, imagine is that roughly how to think about?

**Mike Maples, Jr.** (01:12:37):
But I would also say that it's about storytelling. And so storytelling, there is a science to storytelling. And so for example, the hero's journey, you have somebody in the world that is the hero, let's say Luke Skywalker on Tatooine, dusty planet, he's bored out of his mind. And then a mentor shows up and offers them a call to adventure, Obi-Wan Kenobi. And at first they resist the call, but then something bad happens in this case, Luke's like, "Hey, I can't come with you. I got chores to do for Aunt Beru and Uncle Owen." But then he comes back to his place and it's all burned down the storm troopers killed his aunt and uncle. So then he accepts the call. The mentor has a tool and a magic. In this case, it was the lightsaber was the tool and the magic was the force.

And they need those things because the hero has to have a reason to credibly believe that they can beat the bad guy. And so then what happens is you find co-conspirators along the way, Han Solo, Chewy, ultimately the princess. You rescue her, you blow up the death star, you beat the empire, and then emerge, transform. They even get medals at the end of the movie, right? Now, it turns out that the exact same thing applies for startups. So if we take the Lyft example, let's just say I'm a rider. In the past, the world that is taxi suck in [inaudible 01:14:10]. I can't even get one. And when I get one, it's gross and it smells bad and it's late, and they won't take my credit cards. I have to have cash. They can't rely on them to get me there. I guess my alternatives to park, you can't ever get parking people break into your car. That's the world that is.

**Lenny Rachitsky** (01:14:28):
Logan and John would engage in a call to adventure, "Try this ride-sharing app. It shows cars on map, you know where they're all the time, they come within five minutes, fist bumped the driver." Now, this was where the genius of the pink mustache came in. So the pink mustache honored the fact that a lot of times people resist the call. It's scary to get into stranger's car. So the pink mustache made it seem a little bit less scary. When you see these cars driving around in San Francisco, you're like, "Hmm, what's up with that pink mustache?" And you're talking to your friend and they say, "Oh, it's this new thing called Lyft. It's pretty cool. It's an app if you've seen it." And so Logan and John did, among the best I've ever seen at honoring the fact that people might resist the call.

**Lenny Rachitsky** (01:15:13):
But then part of the story is languaging. This was the genius of Twitter. They didn't call it Microblogs, Inc., right? They created a metaphor around tweeting birds. The Tesla was this way, right? It wouldn't have survived a comparison with a Porsche of 9/11. The seats weren't as good, the radio wasn't as good, but Elon was telling a story about a different future. And when you bought the Tesla Roadster, you weren't buying it for practical reasons. You were buying it for aesthetic reasons. You were buying it because you thought that that future was something you wanted to be part of. So the storytelling primitive ends up working spectacularly well for startups, right? We need to describe the world that is, we need to describe the world that could be, which is that different future. We need to understand, and this is important that your job as the founder is to be Obi-Wan, not Luke.

**Lenny Rachitsky** (01:16:04):
So the founders sometimes make the mistake of thinking that they're the hero, but they're not. The early believers are the heroes, and it's the job of the founder to tell a story that emotes early believers to want to move with them and co-create the future with them. And the story you tell an employee is different from the story you tell an investor is different from the story you tell a customer because all of them have a different idea of what their hero's journey. If you're an investor, maybe your idea of being a hero is to make a hundred times your money and be on some fancy list and make money for your LPs. If you're an early customer, maybe you're a hero by solving an important business problem and getting recognized for it in your company. If you're an early employee, maybe it's you want to work on something you're excited about with really awesome people that don't waste your time with politics and bureaucracy, all of those are different journeys. All of those are different transformational ways to self-actualize. And we have to meet those people where they are and give them a reason to want to come with us to the world to be.

**Lenny Rachitsky** (01:17:10):
I had Nancy Duarte on the podcast. She is one of the most famous presentation designers, and she had exactly the same advice. When you're trying to tell a story, you basically bounce back between the world that is, the world that could be. What is, what could be. What is, what could be, and just keep going back and forth.

**Mike Maples, Jr.** (01:17:25):
A hundred percent. In fact, Nancy is the person who helped me understand this better than any single person. So Nancy would show me how Steve Jobs's iPhone launch speech. She'd be like, "Okay, well now notice what he does. He shows how bad phone suck now. They have styluses, they have keyboards." And then he talks about what could be, you could combine an internet communicator, you could combine an iPod, and he goes back and forth between how bad the current state of things is, how it should be, how bad it is, how it should be. Introducing the iPhone, how bad it was, how awesome it's going to be, how awesome it is. When you look at his speech, he's masterful at toggling. And by the way, the same is true. Abe Lincoln with the Gettysburg Address, "Four score and seven years ago, new nation, now we're in a civil war. We need to preserve what we stand for as a country. We need to go win this war." But he kind of goes back and forth drawing a tension between what has happened in the world that was, and the world that could be.

**Lenny Rachitsky** (01:18:33):
Something that I was thinking as you were talking was, I've seen too many founders spend so much time crafting this amazing story and vision of their product, and they have this really cool blog post and big idea, but nobody really cares about their product yet. Do you have any advice of just make sure you're building something people want above all else. And the story is a layer on top of that.

**Mike Maples, Jr.** (01:18:55):
So many startups I see the first slide is like, "We're Acme AI software. We're located in San Francisco, we're funded by X and Y VCs." That's not storytelling because you're talking about yourself, right? And if you're trying to make the person in the audience the hero, they don't care about you yet. They care about how you're going to make them a hero. And so when you kind of say, 'Okay, if I'm pitching VCs, what I really need to do is help them understand why they'll be a hero if they invest in my company according to what makes them feel heroic." What you present is different, but what a lot of startup presentations do is they take their sales pitch and they rehost it for every other audience. They rehost it for the press, for investors and for employees and all that. And that's wrong because what you're doing is you're talking about yourself to different people, but what you want to do is describe the world that could be, the stakes that are involved, and then each of those individual audiences, you want to meet them where they live in the world that is, and show them how they can engage in a transformational journey to the world it could be.

**Lenny Rachitsky** (01:20:12):
And also share your amazing stats and backgrounds and market size and all that stuff.

**Mike Maples, Jr.** (01:20:19):
Yeah. Although it's funny, I've found that investors are the same. Investors, ultimately they believe or they don't believe. A lot of times, this is the other thing I see happen, is the poor founder will get advice from 20 different people about their pitch deck. And a lot of the people giving them advice are not believers in that different future. They're giving generic startup advice or they'll go pitch a bunch of firms and they didn't consider who's prepared to possibly believe, who isn't. And so then they get objections to their pitch from people who aren't going to believe anyway, and then they try to have a slide to meet that objection. And before you know it, you have what I call a Franken deck. And so you have this huge, gigantic presentation trying to anticipate every objection, and the person who was ready to believe you in the first place doesn't know what you were trying to say because you obscured it with all this other stuff. And so I find that just like with an insight, it's okay if most investors don't like your idea, what you want to find is the ones who are prepared to move with you and make sure they absolutely know why they should. To me, that's the ideal pitch deck.

**Lenny Rachitsky** (01:21:28):
I love this advice. And just to be clear, this is like seed and pre-seed before there's a lot of traction, a lot of data and like that.

**Mike Maples, Jr.** (01:21:35):
Exactly, exactly.

**Lenny Rachitsky** (01:21:36):
So what's your advice to a founder that's trying to iterate on their deck is it's just like, "Don't show it to too many people." Is it, "Stick to your guns."

**Mike Maples, Jr.** (01:21:43):
Okay, here would be my succinct advice. And other than that, there's about a million details. Slide one, you say what you do as if I literally know nothing. So it's not, "We're Airbnb, we're a marketplace for unused residential housing space." Bad. But you'll get advice that says to do that because VCs think marketplaces are hot, residential real estate's big. What you should instead say is something like, "We're Airbnb, we let you rent an extra room in your house." Because now as the VC, I'm like, ah, I know what you do. And there are a lot of pitches, I'm 10, 15 minutes in and I'm trying to understand what they do, but I don't know. So you just say, "Here's what we do."

And then the second thing that I say to people is, I think your second slide ought to be, here's the thing we know that's not obvious. So when I was raising fund one for Floodgate, I would go to an LP and say, "We believe that there's a gap between Angels and VCs. VCs are writing $5 million checks. Angels $250,000 checks. We believe that 500,000 is the new 5 million because of Lean Startups. We believe that there will be a new type of category funds called seed funds. Now, if you don't believe that, nothing else I'm about to say is going to make any sense to you, I can just give you your time back." [inaudible 01:23:06]. But then once, if they did believe that or they were in a position to lean forward, now when they start mentioning my competitors, I say, "Okay, well, recall Peter Fenton works at Benchmark, he's not going to compete with me because why would Peter Fenton leave Benchmark to start Seed Fund doesn't make sense. The only people who are going to try to compete with me from the big funds are the people who aren't performing."

**Lenny Rachitsky** (01:23:26):
But if you set the context of what your insight is, you can always come back to it. When they bring up competitors, you can always come back to it when they bring up objections and you can say, "Hey, remember I'm just telling you we need to agree on this insight for this to have a chance of being great." So what do we do? What's our insight? And then slide three is what, if any, proof points do we have? We have any customers? Do we have great founders? Is there something happened already that should cause you to believe that my insight is vowed?

**Lenny Rachitsky** (01:24:02):
I love this. I love this tangent we went on...

**Mike Maples, Jr.** (01:24:00):
... site is out.

**Lenny Rachitsky** (01:24:02):
Love this. I love this tangent we went on. Let me come back to the actions that you found the most successful startups end up taking. We've talked about movements, we've talked about storytelling. The third is my favorite, I'm excited to hear you talk about it, which is disagreeableness. What is that about?

**Mike Maples, Jr.** (01:24:19):
Earlier, I'd mentioned that you want to escape the comparison trap when you have your insight and when you have your idea, in creating movements and telling stories, you want to break free from the conformity trap. We always are under pressure to conform in this world, and people use the pressure of conformity to prevent us from exploring things outside of our limits. There's a book that I love called Jonathan Livingston Seagull, where there's a seagull who wants to fly at infinite speed, and all the other seagulls are like, "Look, we're just destined to eat crap off the surface of the ocean. That's just what we are. We're seagulls." He ends up getting banished from the flock because everybody thinks he's crazy. To me, the great founders are kind of like Jonathan Livingston Seagull. They're willing to pursue something that they're obsessed with, that they think has to happen in this world, and they're willing to sacrifice their status in the socioeconomic sometimes dominance hierarchy because fulfilling the mission is ultimately more important to them than fitting in.

**Lenny Rachitsky** (01:25:31):
You can't stand out if you always fit in. The only people who are different can really make a difference. That's kind of the mindset. I like to say a startup is a fundamentally disagreeable act in the first place, and there's going to be times you need to be disagreeable. I've seen this time and again. I hear people say to me, "I want to work with a founder who's coachable." I'm like, "I'm not really sure." Sometimes I used to joke that when I would meet with Ev Williams, my whole job was to give him advice that he ignored. I would say to him, "Hey, Ev. I don't think you should raise that much money, because I think you'll spend whatever you raise in 18 months, no matter how much you raise." He said, "Man, so you mean that startups almost always spend their money in 18 months regardless of the amount?" I said, "Yeah. I call it Mike's Law. It almost always happens, because once you have the money, all the pressure is on you to spend it."

**Lenny Rachitsky** (01:26:26):
He is like, "Man, that is a really good advice. I'd never thought of it that way before. That sounds right to me." Well, he proceeds to go raise a shitload of money, but he did stuff that I didn't think he should do, but it worked. I liked that in him. A lot of people would say, "Well, doesn't it bother you that he didn't listen to you that much?" No, because he was disagreeable, and he was the right kind of disagreeable. He didn't say, "Pound the sand. I'm not listening to you. La-la-la, I'm covering my ears." He listened and he understood what I thought the truth was. He just believed a different truth than I did, and that's fine. My job as the investor is to just help them see what my perception of the truth is, honestly. If they decide to go in a different direction, that's great. They're the founder, they're the genius.

**Lenny Rachitsky** (01:27:22):
All of them, not all of them, but a whole lot of them are more disagreeable than history lets on. My dad worked for Bill Gates when he was at Microsoft. Bill Gates is not a warm and fuzzy dude. He was tough. He was a hard ass. But great people are inspired by hard asses, as long as the hard ass makes ... You meld the steel in the heat of the flame of high standards. Sometimes people can't work for Elon Musk for very long, but almost everybody I know who's worked for him really respects him, because he has high standards, and he's not trying to win friends and influence people. He's trying to land on Mars, and if you're going to land on Mars, you got to be disagreeable some of the time. I just find that that is a trait that is under-appreciated in these great founders quite often.

**Lenny Rachitsky** (01:28:19):
What you just shared reminds me of a recent podcast episode of Jeffrey Pfeffer, which I know you listened to, where he talks about the rules of power, how people acquire power, and the last rule is, "Understand that once you have acquired power, what you did to get it will be forgiven, forgotten, or both." Your Bill Gates example, I think, is a good one where people look at him as such a nice dude when, as you said, he was not so nice a lot of the time.

**Mike Maples, Jr.** (01:28:43):
Here's the other thing, and by the way, I listened to that episode from beginning to the end, and I thought it was fantastic, because the next thing I want to do is go to Professor Pfeffer and say, "Can we cast these seven principles through a pattern breaking lens?" Let's assume you're a startup capitalist, you're not at a company, because changing the future requires you to acquire a different form of power than you would, say, in an organization. But as I was listening to it, I was like, "These principles all apply to pattern breakers, all of them, every single one." The other one is that I think that he said, "Not everybody's going to like you. If you want to be liked, get a dog. But if you want power, there's certain things you're going to have to do and reconcile yourself with."

**Lenny Rachitsky** (01:29:36):
Acquisition of power has this notion of you've got to wield the carrot and the stick. If all you do is wield the carrot, you won't create enough activation energy for people to move to that different future. Sometimes you do have to use the stick, and sometimes you have to realize that people are going to use your desire to fit in against you. They're going to say, "Oh, you can't do that. That's illegal," or, "You can't do that, that's unethical," or, "You can't do that. You're being some tech bro, bad guy." A lot of what I find with the founders I work with, ironically, before they win, they have to have the courage to be disliked because people don't like their idea. They think it's stupid, lonely.

**Lenny Rachitsky** (01:30:20):
But then after they win, it's even worse, because everybody says you cheated or you're a bad guy or you broke the rules or you're too powerful, or, "Who gave you the right to decide what the future should be?" They get criticized unfairly in the other direction after they succeed, but in the end, it comes with the territory. It's part of the job description, unfortunately.

**Lenny Rachitsky** (01:30:43):
Yeah. Elon goes through a lot of that. Something I saw you tweet recently along these same lines is that most successful companies, there's tons of chaos internally, and everyone working at these companies is like, "This place a mess. How is this even working?" But your finding is that that's very common and normal.

**Mike Maples, Jr.** (01:31:00):
Especially in startups. There have been times when I've said things like, "Execution doesn't matter," and people can misinterpret that. When I mean execution doesn't matter, I don't mean people shouldn't get things done or people shouldn't say, "What did you do this week?" But when I think of execution in a corporate sense, corporations in theory should always win. They have big management team, they have more experienced people, they have customers, suppliers, partners, brand, so a startup never beats a big company by executing better than the big company. Startup wins over the big company because it proposes a radically different future, disorients the incumbent, and sort of chaotically moves people to that different future.

**Lenny Rachitsky** (01:31:46):
But like every startup I've ever seen, on the inside was wild. It was like a capitalist mutation. It was trying to find a beaked finch in the Galapagos Islands that's never been discovered before, and it's all ambiguous all the time, and people are arguing about what the right direction is all the time. It's just messy, but movements are messy. That's what comes with the territory. A friend of mine, Robin Roberts, once said, "Make your mess your message." It's so true.

**Lenny Rachitsky** (01:32:24):
Oh, man. That's so funny. I love it. I have a couple more questions before we wrap up. Before we leave the actions categories, is there anything else you think is important to share, any other lessons that we haven't touched on?

**Mike Maples, Jr.** (01:32:37):
I think, Lenny, I don't know if you've consciously tried to do this or not, but on some level you've created a movement. No one has ever engaged people with product management sensibilities the way you have. I go to your site, and you even have merch for product managers. I'm like, "What?" I imagine the early posts that you wrote, it probably felt kind of lonely. It's probably, "I wonder if anybody's even reading this stuff," but it starts to accumulate. More people start to read it, more people start to tell their friends about it, and now all of a sudden, it kind of becomes a thing. In many ways, Lenny's podcast and Lenny's blog and Lenny's newsletter are all examples of facets of this movement that you're creating.

**Lenny Rachitsky** (01:33:26):
But your movement is not just about the stories you tell or the guests you have or the podcasts or the write-ups you have. You have a point of view about the centrality of a product manager in companies and in businesses and in the future, and honoring that the way Nike honors athletes. The point of view is the movement, just like the point of view is the company when it's a startup. This point of view is the story. It's the place that people want to go that got animated by the beliefs that you share.

**Lenny Rachitsky** (01:34:06):
Fascinating and flattered. I have no intention of starting a movement. I could see what you're saying. That sounds like a lot of stress, but I guess-

**Mike Maples, Jr.** (01:34:14):
I think you already have, whether you met to or not, I think you have.

**Lenny Rachitsky** (01:34:17):
All right. Well, I do have swag, and if you're on YouTube, this is our best-selling item, a hat that just says "Product Manager." People love it. I have it in the background. [inaudible 01:34:26]

**Mike Maples, Jr.** (01:34:25):
Can I wear one if I'm still not one?

**Lenny Rachitsky** (01:34:28):
Absolutely. You've been one, and so forever product manager. I'll send you a hat.

**Mike Maples, Jr.** (01:34:33):
Hopefully, I can get grandfathered in for my past.

**Lenny Rachitsky** (01:34:35):
Forever. Forever PM Mike. Okay. I just have one more question, and this is around your last chapter, which I think is going to be useful to a lot of people. Your last chapter is about how to apply a lot of these principles to working at a company. Say you're not a founder, a lot of these principles still apply. What advice can you share for people, say, a PM, instead of large company to help them find pattern-breaking ideas, big ideas within the company?

**Mike Maples, Jr.** (01:34:58):
The first thing I think is important to understand is that everything about a value delivery system when you're doing a pattern-breaking idea is different from a normal idea. The mistake that most companies make is they say, "I've got this new pattern-breaking idea. It needs to be a third of my business in 24 months or three years or whatever." Bad strategy. Let's take a company like, say, Apple, when they did the iPhone. The iPhone was a whole new thing. It was driven by, in this case, Steve Jobs the founder. You couldn't reconcile it with the original business of the Mac and not really even the iPod. You had to treat it as a totally different thing, and that's really hard for companies. Companies make the mistake of engaging in a pattern-breaking product, but they make it too visible or it's a career-limiting move if it fails. Pattern-breaking products have different types of leadership, different types of go-to-market motion as we've described, different types of ideas, different risk profiles. Instead of saying this company or this business is too big to fail, I need to make small bets that can fail a lot. The same is true with mergers and acquisitions. If I buy a company, I need to ask, am I buying a pattern-breaking company to break the pattern of my business and go in a radically new direction, or am I buying a company that's an extension of my current business? Neither is wrong per se, but the way you think about risk varies enormously.

**Lenny Rachitsky** (01:36:43):
Some examples that I have in the book of good examples are the iPhone, Steve Jobs, AWS, but some people objected. They said, "Okay, that's easy for the founders to do because they're founders of the company, and that's Steve Jobs and Jeff Bezos." The other example I like is Skunkworks with Lockheed. When they created a fighter plane in a very short amount of time, and that's how they did it, they had an organization totally separate from the main organization, somebody with absolute power, and tried to make it not visible, tried to make it be separate. Because when you make it visible, you start to drift it back into the tractor beam of acting like a pattern-matching corporation. Another good example back in the day was Don Estridge at IBM when they did the IBM PC, but it's almost always an autonomous business headed by a maverick, and you're trying to do something discreetly different rather than a better version of what you've already.

**Lenny Rachitsky** (01:37:45):
This aligns very well with, we had two recent podcast episodes talking to PMs at companies that are doing zero-to-one stuff, Mihika and Tanguy. Tanguy had a really interesting tidbit along the lines you just talked about where he set up his team in a totally different time zone so that people that wanted to bug them just were sleeping during that time, and they weren't even online so that they could just focus on the work they were doing, and it worked out.

**Mike Maples, Jr.** (01:38:09):
I'm mostly through that episode, and everything that I've listened to so far, I'm like, "Okay, that totally jives with what I've seen." The other person has an interesting take on this is Vinod Kochblok. Vinod basically thinks that what companies should do is take some portion of their profits, let's say 10% of your profits, and invest it in projects likely to fail, but with wildly asymmetric upside if they succeed, and then make them not visible to the mothership in the early inning. It's your willingness to fail that lets you have breakthrough success.

**Lenny Rachitsky** (01:38:49):
Any coin that says can't lose bad on one side of it might as well say, can't win big on the other side. It's your willingness to fail, and it comes back to departing from the consensus, right? It's your willingness to fail that enables success, and every time you depart from the consensus, there's a chance you'll be wrong, you'll underperform the consensus, but it's your willingness to do that that lets you outperform it. But there's no shortcuts, right? The coin that says can't lose, says can't win on the other side, and lose big says, win big on the other side.

**Lenny Rachitsky** (01:39:26):
Mike, this episode is so full of nuggets, tactical advice, amazing stories, everything I was hoping it would be. Before we get to our very exciting lightening round, is there anything else that you think might be useful to share with folks that are trying to start a company or are already along with a company?

**Mike Maples, Jr.** (01:39:45):
Yeah. The one thing I would say is that it's a lonely existence, and it's okay if most people don't like your idea. It doesn't mean you're right, but it sure as heck doesn't mean you're wrong either. There's not enough people in this world willing to stick their neck out for things that they believe that they see before the rest of us. Just for what it's worth, if anybody in your audience is one of those people, you have just my utmost respect and affection. I hope that in those times when it's tempting to not believe, it comes with the territory every great founder has faced, and it doesn't make you wrong.

**Lenny Rachitsky** (01:40:34):
Amazing. What an empowering, inspiring way to end it. Mike, with that, we've reached our very exciting lightning round. Are you ready?

**Mike Maples, Jr.** (01:40:34):
Okay, here we go.

**Lenny Rachitsky** (01:40:44):
Here we go. First question, what are two or three books that you've recommended most to other people?

**Mike Maples, Jr.** (01:40:50):
A book called The Five Regrets of the Dying, Top Five Regrets of the Dying by Bronnie Ware. She was a hospice nurse, and she would talk to people in the last 90 days of their lives, and she would find out the things that they'd wish that they had done in their lives that they hadn't. I always thought that that was a good book, because it reminds you about what's important, and it reminds you that it isn't going to last forever. Someday, it'll be the last day.

**Lenny Rachitsky** (01:41:20):
There's another book that I really like called Chase, Chance, and Creativity by a guy named James Austin, and I think that it's a good book because it talks about how certain people tend to attract luck more than others and actually that luck is created, you do make luck. I am just fascinated by this idea of luck and how it can be harnessed. I'd say those two. There's a whole bunch of them. I've always liked all of Clay Christensen's books. The other one that I kind of liked that I read recently is by Robert Greene, The Laws of Human Nature. I liked that one a lot as well. Then Nancy Duarte's book, Resonate, we talked about Nancy earlier, I like that book a lot.

**Lenny Rachitsky** (01:42:13):
I'm buying that first one immediately. That sounds incredible. I need that book. Regrets of the Dying. I found it on Amazon as you were talking, and I'm buying it. Good pick there. Okay, next question. Is there a favorite recent movie or TV show that you've really enjoyed?

**Mike Maples, Jr.** (01:42:26):
I really liked the movie about Enzo Ferrari, and I have this huge affinity for 1960s cars, and the way that they replicated these 1960s Ferraris I just thought was magical. I thought that the guys that did the special effects and just the attention to detail I thought was just extraordinary.

**Lenny Rachitsky** (01:42:50):
I have not seen it. Quick aside, as I was buying this book, your book was recommended on Amazon for me, so good job.

**Mike Maples, Jr.** (01:42:50):
Oh, good. Okay. Here we go.

**Lenny Rachitsky** (01:42:58):
Good job, Amazon. I will point people to where to find it at the end of this series of questions, but next question, is there a favorite product that you have recently discovered that you really like?

**Mike Maples, Jr.** (01:43:08):
When I was young, before I got into computers, I had a job as a professional calligrapher, and so I really like using calligraphy pens. Not long ago I sort of discovered the world, it had been a long time since I'd reconnected with that hobby, I discovered the world of vintage fountain pens. My favorite product of recent times, everybody will be like that sounds esoteric, but it's a Mont Blanc 149 first generation celluloid pen. It was right after World War II, and it was the Germans coming back saying, "We've still got it." It was just a product for the ages. It has a flexible nib. Fountain pens don't work the way they used to. They used make flexible nibs so that you could write the way scribes wrote in the 1800s and stuff. But then people in the modern world break those nibs, and they use ballpoint pens anyway. But when I use these old flexible pens from 1900 to the 1940s, they're just magical. There's just nothing like it. Nobody's ever been able to equal that experience in modern times.

**Lenny Rachitsky** (01:44:25):
Wow. I got to try one of these pens.

**Mike Maples, Jr.** (01:44:28):
Yeah. I'll give you one of them so you can at least get a feel for it.

**Lenny Rachitsky** (01:44:33):
Wow. I'll give you a product management hat, I'll get a pen, a beautiful pen. I think I win in this exchange. Two more questions. Do you have a favorite life motto that you often repeat to yourself, share with folks that you find useful to come back to?

**Mike Maples, Jr.** (01:44:47):
I learned it from my dad. It sounds simple, but it's kind of profound, "Do your best." What he meant by that is he didn't mean be the best, he meant that life is a gift. You don't know how much time you're going to have. Every day is the gift of your time, and the best way to honor the gift of your time is to do your best. There'll be times you won't be the best, but if all you did was the best, that's all you could do. I remember one time, so I was a senior in high school, I'd already gotten into Stanford, I'm totally psyched, I'm going to go. Last week of the semester of senior year, and I have a test the next day in English.

**Lenny Rachitsky** (01:45:29):
My dad's like, "Hey, how are you feeling about the test?" I said, "It doesn't really matter. I get to drop it, and I'm going to get an A in the class, because I've got the goods, so I don't need to do well on it." He looked so disappointed at me, and he was like, "It doesn't sound like you're doing your best." What he was kind of getting at was that the people who achieve greatness, they think everything counts. I always got a lot from that with him. There'd be other times where I wouldn't do so well on something, and he would say, "Well, sometimes you make a careless mistake, but you did your best. That's all you could have done."

**Lenny Rachitsky** (01:46:15):
The idea of doing your best I find to be very profound, and it causes you to realize that the best way to show up in the world is to be your best self. There's only one you in this world, and the more that you can show up as your best self, you'll be impossible to compete with, you won't feel the need to copy other folks, you won't feel the need to compare yourself to other people. You'll compare yourself instead to the idea of perfection itself and whatever that means in terms of your own ability to do your best. To me, that's probably the most important life lesson I've learned.

**Lenny Rachitsky** (01:46:52):
Wow. As you said, very simple but very powerful.

**Mike Maples, Jr.** (01:46:56):
It's powerful when you truly internalize it, right? When you take it beyond an aphorism, it's very powerful.

**Lenny Rachitsky** (01:47:03):
It reminds me of your partner, Anne Marie Coe's advice that she got from her dad, which is I think maybe the opposite that she shared on Tim Ferris' podcast of just always do a world-class job at everything you do. You're doing a world-class job.

**Mike Maples, Jr.** (01:47:18):
Yep.

**Lenny Rachitsky** (01:47:19):
Amazing. Okay, I'm going to skip the last question just to end on that, because that was way too beautiful to Sully with another question. Just to give folks a chance to figure out where to buy your book, when it's available, how to find it, what they should know, do share.

**Mike Maples, Jr.** (01:47:36):
I guess there's two main ways, right? Well, we've got a Substack. Not everybody's got to buy books, right, so there's patternbreakers.substack.com. Then I have a site, patternbreakers.com, but you can also get the book on Amazon or anywhere. It's already available for pre-order, I think.

**Lenny Rachitsky** (01:47:54):
Amazing. I usually ask people how listeners can be useful to you. I imagine it's check out the book, share what you've learned.

**Mike Maples, Jr.** (01:47:59):
My main goal is for the ideas to spread and to help people. Hopefully, it will have achieved that goal. But just anything that people can do to help spread the ideas. Co-conspirators wanted.

**Lenny Rachitsky** (01:48:15):
I love these episodes where somebody like you spends hundreds of thousands of hours analyzing data and history and startups and talking to founders and just synthesizing all the things you've learned into a couple of hours. I love this. Thank you, Mike, so much for being here and for sharing all this wisdom with us.

**Mike Maples, Jr.** (01:48:32):
Hey. Well, thanks, Lenny. It was an honor to be on your show, and it's been fun to see you do so well.

**Lenny Rachitsky** (01:48:37):
Thanks, Mike. It's an honor to have you on the show. Again, the book is called Pattern Breakers: Why Some Start-Ups Change the Future. Mike, thank you so much for being here.

**Mike Maples, Jr.** (01:48:45):
Okay. See you, Lenny. Thanks.

**Lenny Rachitsky** (01:48:47):
Bye, everyone.

**Lenny Rachitsky** (01:48:50):
Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [2/16] Building product at Stripe: craft, metrics, and customer obsession | Jeff Weinstein (Product lead)

**Lenny Rachitsky** (00:00:00):
Watching you operate on Twitter, you're just breaking this wall between the PM and the customer.

**Jeff Weinstein** (00:00:04):
The moment the customer felt compelled enough to go out of their way to talk about some problem, that's a unbelievable gift. I will leave a meeting to just get one message back to them. If you're text message friendly with five or 10 of those, you are going to have so much direct signal that is infectious.

**Lenny Rachitsky** (00:00:22):
Many people told me I need to ask you about picking metrics.

**Jeff Weinstein** (00:00:24):
Well, what was the value that we're trying to produce for the customer and can we measure it from their perspective? And okay, how do you know you have product market fit? Charts that showcase things are going up into the right on one hand and then tweets on the other.

**Lenny Rachitsky** (00:00:36):
You started at Stripe something called study groups.

**Jeff Weinstein** (00:00:39):
We show up four to eight people total pretend to be some company with some outcome problem. Rule one is you do not work at Stripe and rule two is we're not here to solve any problems. This is just about practicing empathy for the customer.

**Lenny Rachitsky** (00:00:57):
Today my guest is Jeff Weinstein. Over the course of his six plus years at Stripe, Jeff was the product lead for Stripe's payment infrastructure teams. We helped scale Stripe payments to hundreds of billions of dollars in volume a year. He also led PMs and Teams on a number of zero to one bets at Stripe, and most recently took on the scaling of Stripe Atlas, which as of the day this podcast launches allows you to incorporate a new company in a single day, including handling 83B elections, incorporation documents, getting your EIN, share purchases, and all the things that used to take weeks or months before a company could begin operating. At this point, one in six new Delaware corporations are started on Stripe Atlas, which blows my mind. This episode ended up being the longest in my podcast history because I wanted to basically do an archeology of an incredibly effective and admired product leader.

**Jeff Weinstein** (00:02:50):
Thank you Lenny of Lenny's Podcast. I knew what to expect, but it's fun to see the first name and the podcast all line up. I really appreciate you asking.

**Lenny Rachitsky** (00:02:59):
So I wanted to start with a quote that I found from you that I think gives a little perspective into how you think and how you approach the world. So here's the quote. "Very frequently I would do poorly on tests in school and then the professor would say very reasonably, 'Hey, I think you should bump down a level to the previous semester's pace,'" and you said, "I actually know that, that's why I'm in this class. I want to be in the class that I'm potentially the worst at." This isn't how most people think. This isn't how most people operate. Usually people want to get good grades, they want to be at the top of their class. Clearly you have a different approach and a different mindset. Where did this come from for you and how did this shape the way you think about product and the work that you do?

**Jeff Weinstein** (00:03:37):
Some of it was just the fact that I wasn't particularly good at the class and had to rationalize it for myself in some form. So in retrospect that sounds highfalutin, but at the time I just wasn't particularly good at the classes I was in. But I think it comes from growing up. I went to a pretty hippy-dippy K through 12 school in Baltimore, Maryland where we were really asked to think about why we were in school and to pick any of the courses that were of interest to us outside of AP programs or grades or any particular requirements. You really got to choose your own path. And I recall one particular class in high school, which was somewhat a science class, but it was called the History of Science, and we actually walked through and studied all of the, at the time, best understood ways the world worked in science, but then later were turned out to be wrong, right?

**Jeff Weinstein** (00:04:40):
In the 1500s we believed X, Y, and Z. In the 1600s we believed A, B and C. just very confidently. In 1500s we thought something and then the 1600s we thought something very different. And so this class was quite impactful on me where we spent an entire year studying things that are not true. It was fascinating. That particular teacher employed another trick on us during that class, which was it took the tuition fee of our school and divided it by the number of hours and wrote the cost on a ticket and then handed us in the beginning of the year. Tickets for every single one of the classes and he would stand at the door and you would have to give him a ticket at the end of the class that he thought it was worth it. And just like that practice of deep intellectual understanding of how people evaluated something at the time and choosing for yourself to spend the time on it by just the physical act of handing that ticket to the teacher.

**Jeff Weinstein** (00:05:44):
That really clicked for me. And so when I got to college and it was a real college university, people are coming from often quite more rigorous backgrounds of things that were true. I was a bit unprepared and I remember actually taking a microeconomics class that was quite advanced and had a close friend and we studied exactly the same information. We sat and looked at the same cheat sheets, we practiced the same quizzes, we read the same books, and he got the top grade in the class and I got the bottom and that's from where that quote came from where the professor said, I think you should bump, potentially bump down. I was like, "I already know that stuff. I'm interested in this topic. I'm going to try to improve, but look just because I'm significantly worse than the other kids in the class that has little to do with if I should leave." And he was particularly cool with it.

**Lenny Rachitsky** (00:06:32):
**Jeff Weinstein** (00:09:27):
It did take a change though because I started in... English was my selected major in school, but then I kept playing with computers and I kept liking math and I looked at the roles of the backgrounds of the people who were running the types of companies I loved. At the time Facebook was getting super phenomenally successful. Apple was already on their up and up again and everyone who was leading those places had technical backgrounds and I liked computers a lot, so I added computer science as an engineering degree midway through school. So I had to take the real science classes with the pre-med kids and the rest of it, and I did similarly poorly, but I did end up with a computer science degree and a liberal arts degree. So it was a journey, but I had to make a pretty big switch in the middle to get on that path.

**Lenny Rachitsky** (00:10:16):
I asked you if there was one thing that you'd love to get across in this podcast. I asked you what would it be and here's what you said. Here's the first item on this list that you sent me, "Go, go, go ASAP plus optimistic comma, long-term compounding approach." Can you just talk about what you mean by that?

**Jeff Weinstein** (00:10:36):
Yeah, there's two things going on here. So I see the world as immediately we have just such opportunity to take action in front of us. We can be optimistic and go, go, go as soon as possible. I think that a lot of life is you get as much furniture as you've room in the house. We will do the work the night before it's due, so let's just make it due tomorrow. Can we turn tomorrow into today? So just optimistically seeing if we can just inject energy to go, go, go has produced surprising results and I think it ignites in other people that same interest and then it feeds off each other. And that's I think really in my bones from growing up. And then I added over time, had to learn this longer term, compounding, more strategic mindset where some of the things we want to accomplish, be it at my startups in the past or at Stripe, they can't be solved in an afternoon.

**Jeff Weinstein** (00:11:41):
They're going to require layers of infrastructure and services and applications and UI and partnerships that really look like that iceberg drawing you see where you just see the top, but then there's the whole thing underneath and I've had to learn over time to pair my instinct of like, "Let's get it done today, let's move forward, let's see what we can get done. Let's make some mistakes, let's try it out." With, "Where are we going? What needs to be true over time? Where can we always invest? What will we never regret spending time in?" We'll never regret spending time making the latency of our payments APIs at Stripe faster. We'll never regret making it more reliable to send 83B election mails to the IRS. Like we'll never regret those things. So let's just always compound those capabilities over time. Then the trick is how do you mix this go, go, go attitude with a long-term compounding? That's something I still struggle with, but I try to purposely balance it more than I used to.

**Lenny Rachitsky** (00:12:44):
It's such a good way of summarizing just how to be successful in a lot of things. Go, go, go ASAP, stay optimistic. Focus on long-term compounding growth. Is there an example of that in action? I know we're going to talk about Atlas a bunch, but I guess is there an example of that working for you or a product you worked on?

**Jeff Weinstein** (00:13:03):
I work at Stripe, which is a infrastructure company. We build things that help businesses do online commerce in various forms, and I've had a few roles at Stripe. I'm in our beautiful office here in South San Francisco, one of which was the product person that helped us decide how we were going to go global and how we were going to offer multiple ways for people to pay. It turns out there's more than just credit cards in the world. There's small hundreds of ways that people will naturally want to pay for things online and as a business you're going to, of course, just want to accept whatever it is people want to pay with. And for the first seven or eight years of Stripe, well prior to my being here, the incremental country ads and the incremental new payment methods was relatively flat over time and that was surprising to all of us who worked here because the world wanted it and we had a lot of people working on it and we were working very hard, but it wasn't producing returns in the way that we wanted.

**Jeff Weinstein** (00:14:11):
And so actually the optimistic as soon as possible go-go attitude was not working. No matter how much energy we poured into building Thailand payment methods or UK bank transfers or an in-person payment system in Latin America, we just couldn't rack up points and get it done. So we had to step back and say, "Well, what is the world going to look like in 10 years? What was going to need to be true and how can we start to go there now?" Which meant going a lot slower, building internal platforms, sending people around the world to start to build these payment methods, uproot their lives, pay for their apartments, get them on airplanes, start using these payment methods actually in the world. And so it really our line flat line for a while and we're like, "Okay, is this strategy working? Is it not working?" But then over time we start to see it switch to nonlinear again and go from whatever it was, 10 payment methods at the time.

**Jeff Weinstein** (00:15:03):
And now Stripe accepts over 100. So we got to 50 really quickly and then skyrocketed to 100. And I remember there being a meeting where we said, "Well, maybe we should just lock everyone in the basement and see if we can get from 10 to 50." That would be the intensity startup go attitude. But we looked at the individual components of what it meant to get this done and how long we wanted this to be true for and we had to go a lot slower. That was a very formative decision where you had to mix the go, go, go with the long-term compounding.

**Lenny Rachitsky** (00:15:39):
Awesome. Okay, so let's start to delve deeper into some of the specific seals that I hear you're incredible at and that I've seen you be incredible at on Twitter and LinkedIn and things like that. So the first is craft, craft and quality. I'm told by many people that you have a very strong obsession with craft and user experience and quality and even more so I'm told that you teach people at Stripe how to be obsessed with craft and quality and user experience in a very systematic way. I feel like this is something a lot of people are starting to realize is really important and or are trying to get better at, either personally or at their company. So first of all, let me just ask why is this so important to you? Why do you think craft and experience and quality is so important? Why do you put so much emphasis on it yourself?

**Jeff Weinstein** (00:16:25):
I think I'm really working backwards from failures in the past and avoiding them. And so maybe just a quick story. I started a company several years ago based on just a personal pet peeve of mine, which was I was a SQL analyst. Many you listening might have written SQL in the past, maybe the robots write the SQL for you now, but you still need to write SQL yourself. And every single time I wrote a SQL query, I wanted to run the same subsequent analysis. I wanted great version control, I wanted all the cool stuff that GitHub had for code but for writing data code. And so my friends and I built a little Python tool which basically let you run our style queries. It lets you draw charts and pivot tables quickly and sharing all this modern SaaS application stuff. But applied to SQL a few years ago and we turned that into a company.

**Jeff Weinstein** (00:17:29):
We got some progress, but then there was this moment one day where we had maybe a couple 100 customers and we had an error where we basically by accidentally shut down the service and it was bricked for 10 or 20 minutes. And at the time we were hustling in our little dinky office to get the application back online. And we really were proud of ourselves about how reasonably quickly we did and people went back to using it. It wasn't a super long outage and we didn't lose any data. We were just high-fiving each other. And we went about our day and about a year later I realized that that was a...

**Jeff Weinstein** (00:18:11):
I missed a huge moment that I should have pounced on, which is that during those 20 minutes, our customers weren't furious. They weren't emailing us like crazy, they weren't texting us, they weren't trying to find us on Google Maps and knock on our door and say, "Hey, I need this thing back online immediately." We heard a couple comments from them, it was little murmurs. And I didn't realize at the time that was the signal that we did not have product market fit. And I ended up wasting many more years on that project. And wasting is a big word. We built amazing software, people liked it, we were able to sell the company.

**Jeff Weinstein** (00:18:55):
It helped many of us learn how to really build software. But I'm really trying to avoid that situation again. And I think craft is a dessert that you get after the meal of does your thing solve a real problem in the world and are people clamoring, needing it badly? And that's really my obsession is in finding problems in which people will pause their entire day to solve. They will leap through the computer to be like, "Oh my God, I have that problem. Do you have a solution?"

**Jeff Weinstein** (00:19:32):
And if you focus on that style of product development and we can get into just how do you listen for that and then turn that into product. Later, you might get the opportunity to really provide craft and beauty and touches and moments and delight. But certainly there is no amount of craft, there is no amount of beauty, there's no amount delight or touches you can add to a thing that will solve the problem we had at our startup, which is that people didn't really need this. And that's the biggest error is picking something in which people don't really need it. And then going through these practices of trying to make it great when maybe it shouldn't exist in the first place.

**Lenny Rachitsky** (00:20:16):
I think a lot of people see all these tweets and messages about just obsessed with the craft of what you're building and you can easily lose sight of... Nobody even cares about what you're building. It could be the most incredible experience ever designed, but if it's not something anyone ever wants, it doesn't really matter.

**Jeff Weinstein** (00:20:34):
People don't really get out of bed for their second problem. They get out of bed for their first problem. And you have to carefully listen and not pitch your customer or your prospective customer as you're trying to figure this out. And I think this advice, not even advice just style applies to small companies, big companies, anyone which is people don't want to be pitched. I'm sometimes on a UXR call with a very well-meaning person or a founder who has a new product that they want advice on or they want to find customers. And the first thing that they start talking about when we get on the call is, "Hi, I'm the CEO of X, Y, and Z company. We do one, two, and three. I want to show you a demo." It's like, "Hold up, I'm a customer. I have..." What a wasted opportunity you've just done here.

**Lenny Rachitsky** (00:24:15):
So I love where we're going with this. This is where I was going to actually talk about next is just your ability to talk to customers and user research. It feels very unique, watching you operate on Twitter, you're just sharing your email constantly, getting on calls with people constantly. There's this, you're breaking this wall between... That a lot of people imagine there is between the PM and the lead of a team and the customer. You're not relying easy research. You're not waiting for someone else to do this work for you. Talk about just why and how you do this. I think there's so much to learn from just how you operate in finding opportunities, picking problems to solve by talking to customers.

**Jeff Weinstein** (00:24:53):
It's where the business comes from is customers. It is not a long shot hypothesis about why to talk to them. It's like if they love your stuff, they will tell their friends and pay fair prices for the product. We're so fortunate through the internet that people announced themselves as being interested in a topic. Sometimes they're interested in it by posting on Reddit a long thread or a screenshot of a customer service interaction that bugged them or hopeful that from their dorm room in country X, someone else in the world has solved the same problem. And the internet has given us all this absolutely magical forum that you can just yell out the window and then billions of people could actually listen to what you said out the window. Now, that's not all the time true for all people in all situations, but dramatically more true now than ever before in human history.

**Jeff Weinstein** (00:26:05):
And so the fact that people wouldn't be listening to their customers and really jumping through the computer to talk to them surprises me. It's like I always sometimes think, "Do they have some other strategy? Are they so confident in what they're building that they don't need to hear directly from the people who will be using it?" And I think some of it is my own fear that I'm going to make the same mistake I've made in the past, which is build something that people like they're using but isn't solving a burning enough problem such that they're going to stop their day, they're going to tell their friends, we're going to be able to sustain the company economically over a long period of time. And that really just comes from hearing people's most burning problems and then just jumping through the computer and talking to them takes a little bit of nervous gumption, like walking up to a person at a bar or cocktail party and saying, "Hi, my name is Jeff."

**Jeff Weinstein** (00:27:08):
It can be a little awkward, but then you get it. It's a rush once it starts to work. And once you get the iterative loop that they're excited to talk to you, they have problems, they see you as a trusted, not salesy, not pitching, not narrow-minded to just my product and my position, but I'm here to hear about all of your problems and see where we can help. Not promising we can help solve everything, but let's listen. That is infectious, both between the customers and internally. And so I'm able to bring more people into that practice. At Stripe, I'm able to quickly grab an engineer and hop on a call. I can forward a message over to a Slack group. And they know that because the customer's speaking directly, it somewhat trumps everything that's happening during the day. We could go to our meeting where we're going to guess what the customer wants or we could talk to them directly.

**Jeff Weinstein** (00:28:08):
And you have to use a little bit of art to decide which customers you want to listen the closest to. But even at Stripe's scale, where we're dealing with many millions of businesses and many hundreds of millions of consumers on the other end of those businesses, you can pattern match relatively quickly. What are the styles of customers that represent where the world is going, the most ambitious, the most technical, the fastest growing, the most detailed. And you don't need 10,000 of those people to talk to. If you're text message friendly with five or 10 of those, you are going to have so much direct signal about where to go that you forget how you did it in the past.

**Lenny Rachitsky** (00:28:57):
I love these. So I'd love to learn more about these tactics that you've found helpful. So you've shared this idea of silence, talking to someone and just being silent, and I forget the phrase you used, but just like ideas emerge, like your whole road map can emerge from that silence. So let me share a few of the things you shared so far and I'm curious what else. Two is tweeting just like, "Hey, I'm looking to improve Atlas right now. What bugs do you have? Here's my email address." You talked about text messaging, just like, "Hey, can I get your number? And I'll just text you when I have questions." If there's anything else to add to these, that'd be awesome. And then what else have you found? Just ways to actually get to a customer and find opportunities that are important.

**Jeff Weinstein** (00:29:34):
Speed is an important one, which is just reducing the time between the moment the customer felt compelled enough to go out of their way to talk about some problem. They're busy, there are snacks to eat, they have families, they have other things to do. There's a lot going on in the world, a lot. Your dumb product, it's amazing that they would spend any of their time discussing it at all. I mean, most of the time if you don't like something, you just move along. You just apathetically, silently move forward in the world. And so the fact that someone took their finite time to succinctly with curiosity, communicate to the world or you about your product, that's a unbelievable gift.

**Jeff Weinstein** (00:30:27):
That should be P-zero alert level intensity. And so I will leave a meeting, I will change what I'm doing to just get one message back to them. Even if it's, "Hey, I got this. I'm about to go to dinner. Can I hit you up tomorrow?" They're like, "Oh yeah, thank you. Awesome. I can't even believe you responded." That puts us in the camp of on the right trajectory where they're going to feel that they have a almost secret portal between this big brand of a company and another human who's just actually curious...

**Jeff Weinstein** (00:31:03):
... brand of a company and another human who's just actually curious what's going on, that's night and day. And it's also, fun fact, tip, when people are really hot on an issue and it could blow up on social or they're going to start becoming a detractor, we make mistakes, we have SLA breaches, we have errors, you're going to want to get on that stuff fast. And in those situations, my bar for how we will respond to those folks is not to just solve the problem, but it is to turn them into a promoter, and most of the time we're able to, even if there was a pretty relevant issue.

**Jeff Weinstein** (00:31:40):
I remember one time at Atlas, we had this bug in which for a handful of our legal docs, they were handing out let's say, 25 shares rather than 25% of the shares. We dropped the percentage sign, and thankfully a founder noticed this in the docs and tweeted about it. My heart paused and I was like, "Oh no, this could be a really serious issue." And we were able to fix it and regenerate the documents relatively quickly for everyone that was impacted. And I was thinking to myself, "Wow, we really let this person down. We have one job to do, which is to get their company right and we didn't."

**Jeff Weinstein** (00:32:20):
And that person was incredibly gracious about the situation and said, "Anytime you want me to just read your docs, I'd be happy to. I have a law degree. I care about this topic. I want to brainstorm with you about ways that Atlas could do more document creations." I was like, "Wow, I can't believe I was in this sort of defense position, and now we've gained a friend in the world who can be eyes and ears and brainstorm with us." And the team maintains a really close relationship with that person as they do with many, many founders who use Atlas.

**Jeff Weinstein** (00:32:53):
And so, just again, we're so quick to put the outside world in this other camp where we need to touch it with kid gloves and treat it as a big blob and a cohort and a statistic, when it is a human with a problem who likes snacks, who is busy, and it's fun to do and it turns out to be an incredibly easy, fast way to figure out what to build.

**Lenny Rachitsky** (00:33:20):
There's a bunch of stuff I want to follow up here. One is, people may be hearing this and like, "Oh my God, I'd be overwhelmed with feedback and people to fix problems for and bugs and texting of people." They're just like, "There's so many people that potentially I'd have to be interacting with." How do you try to narrow that down? I know Atlas is a very highly adopted product. There's a ton of people, there's probably bugs, often people sending you feedback. How do you pick the people to zero in on?

**Jeff Weinstein** (00:33:47):
I think there are two parts to this. One, what a problem to have. Of all the problems in the world, "I'm overwhelmed by customer interest," is on the top list of problems I want to have. I think most entrepreneurs would purchase that problem as a state. And so, if you're in it, I think, take a deep breath and look at the sunrise or sunset and just enjoy the fact that you've built something that is meaningful enough that people would spend their time. Again, there are amazing snacks that they could be spending the time on otherwise, so that's a huge deal. And then two, you need the art. There's an art and science to picking where to go deep. I will happily respond to folks with, "I really appreciate that. Do you mind sending me a screenshot or a video?" And some of them don't. Okay, that's fine.

**Jeff Weinstein** (00:34:45):
You kind of get a sense of quickly looking at how they wrote about it or just pattern matching how detailed they were, or how much they seem that they want to engage and kind of balance it that way. Otherwise, you can tell folks, "This is really awesome. Do you mind sending me an email with three to five bullet points about the details of how you got to this issue?" And that's not a 30-minute meeting. You don't need to blow up your whole life to get on the phone with them. It's not a huge homework assignment to them, but it's enough structure that it will self-select those who want to go deep, and then from there, you really do owe it to them to follow up if they're going to be that detailed. And at that point, you really have made a product friend for life and you'll kind of continuously go back to them. So you have to kind of tune it.

**Jeff Weinstein** (00:35:48):
I also will bound some of these efforts, so I'll just completely make up one day a program. So, "Hi, Stripe's doing a bug-finder program." I made that up as I was driving to work one morning, tweeted it, was curious if anyone would send anything. "We'll be taking videos for the next three days to go super deep." And people are like, "Oh my goodness, I would love to be part of the Stripe bug-finder program. May I apply?" I'm like, "Oh, it's very selective. But yes, of course for you." It's just giving people permission through a program, even if it is deeply arbitrary, I find helps with bounding it, and then later I can follow up with the world, "Hey, we ran our first program, we got 65 videos," which we did. "We found dozens of issues," which we did. It was an incredibly valuable use of our time and it really came from just a single tweet.

**Lenny Rachitsky** (00:36:53):
Something I saw you mention somewhere is that you only pay attention to feedback from people that are paying customers and ignore everything else. Can you talk about that?

**Jeff Weinstein** (00:37:00):
People who build things for people tend to be empathetic and interested and curious folks who have friends, and then those friends want to use your stuff because they know you and they like you and they'll have good feedback. But you need to figure out, is that actually your customer, or is that your friend trying it? Who is actually your target customer exactly? Not a company or a segment, not digital natives that are X big. I'm talking about Sarah in this department, who has these tabs open and just faced this problem and needs to solve it by 4:00 PM. That level of specificity. If that's your customer, and I'm talking mostly about B2B, which is where I spend a lot of my time as the social network, B2C stuff I have less intuition on, they're very willing to exchange money for solving their problems, incredibly so. Oftentimes, if you listen with enough silence, they might even say, "I'll pay you money to solve, blah." If you sit there long enough in silence.

**Jeff Weinstein** (00:38:17):
And so, you could listen to your friendly friend who you got to play with your beta version and they'll say they liked it and they will click around. But that is extremely different from Sarah, who has the actual problem and is willing to pay. And it is so tempting to go down the first path with the friend group that I sort of needed a rule, which was like, "Okay, rather than..." I was like, "Well, don't pay attention to that quite as much. Really pay attention to, who is your target customer and are you in a fast iteration cycle for them and are they telling their friends?"

**Jeff Weinstein** (00:38:51):
But that wasn't enough, because people are so drawn, myself included, drawn to the friendliness that I just set a rule, which is, "We discount all of that feedback from our friends to zero." That is not of interest to us. We don't even write it down. It's just not part of what we're talking about at all. We are only interested in Sarah, our target customer, and can we get her to solve whatever the problem is as quickly as possible, as jangly as possible and go from there?

**Jeff Weinstein** (00:39:26):
And then the paying part is a forcing function because again, even with Sarah, because you're paying attention to her and solving her problem a bit, she'll say, "Of course, oh, this is great. I want feature X, Y and Z. Can it do one, two, and three?" Naturally, she would say that. But if you said, "And by the way, this thing is $10,000. We'll happily refund your money 100% the second you don't like it," she might say, "Whoa, whoa, wait a second. Yeah, I like this thing, but not $10, 000. For $10,000, it would need to solve X." And you're like, "Oh, there it is." That was actually what the thing that was of value, and we were all kind of dancing around this. It's useful, we're on the right track, and because I've fallen down that path myself so many times, I just set a rule.

**Lenny Rachitsky** (00:40:25):
This is great. I was actually going to ask. This technique of using silence, to help people actually practice it, you just shared this quote of, "For you to pay $10,000 it would've to do X." That's a really cool line to use. Is there any other advice there of just how to practice this idea of creating silence to help a potential customer share what they actually need?

**Jeff Weinstein** (00:40:45):
I encourage people to take an improv training class or two, just to get people out of their skin a bit. By the way, this advice applies to big companies also, not just small ones. And we have issues, and I hear other larger companies have issues where a big company will say, "Hey, we're an enterprise and we're going to pay you this big contract. All you need to do is build features one, two, three, four, five, six, seven, eight, nine, and go through security steps, A, B, C, D, E, F, G." And this siren song of the big three-year contract of your first enterprise buyer, even when you're already big, you can go from Fortune 1000 to Fortune 500 to Fortune 10 to Fortune 1. There's always more. There are so many stories of the rug being pulled in the middle and they never actually use it and the contract never lands.

**Jeff Weinstein** (00:41:38):
Same in partnerships. And so, I would say the same thing, which is, "If we're super serious about this, send us $1 million. Wire us $1 million. We'll happily wire it back anytime you need it, but let's actually put some stake in the ground about the value." And I find that in the cases in which they're like, "Whoa, wait a second, no, absolutely not. We can't commit here." That's really a good signal because you're about to spend a huge amount of time building something that might not ever be used, and that's the majority case I hear. Or you might get the opposite, which is, "Sounds great. Let's make sure our teams are trained on it faster. How can we get you to our office to explain it? We need it to really work with this system we haven't talked about yet. And now that we're paying, we want it even faster."

**Jeff Weinstein** (00:42:32):
And so, I find that it puts a fork in the road towards faster success or avoiding the non-success case. And even at Stripe scale, I've heard our founders somewhat push this methodology on us, where one from the outside might think, "Well, it's a 8,000 person company. Surely they have just regular ways of building things for larger customers, and we too need these style of commitments if we're going to go off roadmap."

**Lenny Rachitsky** (00:43:04):
So a big lesson you're sharing here is essentially, make sure people are ready to pay for something that they're asking for. That is the ultimate sign that they-

**Jeff Weinstein** (00:43:13):
And by the way, ready to pay is different than paying. Significantly different, significantly different. I've also thought of, "Well, as long as they're ready to pay and they said they would pay and they look at the contract, we should feel good." That is not the same as paying. Paying is an independent group of people saying, "My problem is burning enough that I'm willing to exchange something I have that has value for the promise of what you're going to do." And now it's a real commitment. That is extremely different than ready to. So I will often be on the phone or video, whatever with a founder and I will have them practice charging me. I'll just say, "Hey, I'm just a friend. I'm trying to help you out. It's a little bit self-serving because I work at Stripe and I want to get feedback on our products."

**Jeff Weinstein** (00:44:09):
I'll say, "Feel free to sign up for any invoicing or payment service. I don't really care which one. You're welcome to choose Stripe if it's easy enough for you, I'd love to hear your two cents, and send me an invoice or a payment link for $1 right now, right now. That way, when it comes time to actually charge your first customer, it won't be your first time. It won't feel weird. You'll have already done this, you already have a dollar in your account, you already have your logo on the top right of the invoice. It'll feel great." And I probably could go through my email inbox and just see $1 receipts to random people because I'm just so convinced that the difference between paying and willing, ready, I thought they would pay is night and day different.

**Lenny Rachitsky** (00:44:57):
Yeah, there's this term, willingness to pay that I feel like it should change, as you're saying, to just cross that willingness to even just-

**Jeff Weinstein** (00:45:05):
Paying.

**Lenny Rachitsky** (00:45:06):
Paying, exactly.

**Jeff Weinstein** (00:45:07):
Yeah. And we can refund the money. There's no issue at all. Just other tricks on how to get people going is, ask them about their regular life as a human, "What did you do yesterday?" And they'll be like, "Oh, at work?" I'm like, "Or not. Whatever." And people, they'll start to spill, they'll just start to spill and eventually they'll get to their biggest problem pretty quickly.

**Lenny Rachitsky** (00:45:33):
Let's talk about metrics, going in a different direction. Many people told me I need to ask you about picking metrics and the importance of metrics and how you think about metrics. So let me just maybe start with a question of, just why do you think picking the right metric and why are metrics so important in building successful products?

**Jeff Weinstein** (00:45:52):
I somewhat walk around with the belief that the product manager's responsibility is to produce product market fit. And okay, how do you know you have product market fit? Charts that showcase things are going up into the right on one hand, and then tweets on the other. So metrics like quantitative and qualitative, and I really see them as deep siblings and equals, you really need both. It's not oh, OKRs versus something. There are some things you want the texture of the person on video showing how complicated a thing was. And then also, we're trying to make an economically viable system that we can run at large scale and you can't keep all that stuff in your head and need to measure it. And so, I think metrics at their best are a numerical representation of the value we're providing for the customer.

**Jeff Weinstein** (00:46:59):
One could measure anything. You can just start counting events and log lines. We've made it incredibly cheap to count stuff. And so, now we have this big privilege of choosing what to measure. And I really just try to map it all the way back to, "Well, what was actually the value that we're trying to produce for the customer and can we measure it from their perspective?" Whereas I think it's natural, both because when you work inside of a company, you're just thinking internally, but also the way that the metrics are collected inside your application to be more internal-oriented. How many people logged in? Okay, that's a fine measure, but how many people accomplished what they were trying to do after they logged in, is not just necessarily sitting there as a single event in your database. You have to think about it a bit. Another reason why I spend a lot of time crafting a small number of these metrics is, they force trade-offs and decisions.

**Jeff Weinstein** (00:47:56):
So we could all sit around all day and say, "Hey, I heard all these customer problems, we should build X, Y, and Z." And another person could absolutely reasonably say, "Well, I heard from these customers, we should build one, two and three." And they're all true. We could have a lot of success in both, but the majority case is that we don't build either and we sit around and argue and bicker and we go slowly. "What are we going to do to naturally, organically every day, orient a larger group of people in the right direction and see if our tactics are generating progress over time for a customer from their perspective?" And metrics on the left and a series of tweets on the right is a pretty great combo.

**Jeff Weinstein** (00:48:42):
Here's an example. A couple years ago I had been working in our payments group at Stripe for a bit, and then I started working on some of our banking and incorporation services. In Atlas, when I started working on it, it had had some success. It had already existed for four or five years prior to me spending time on it. But when I started to look at the support tickets, people were pretty unhappy frequently. They had a DocuSign stuck in their email box. They needed a co-founder's address, but they didn't know their co-founder's address. They couldn't log into the dashboard to figure out their 83(b) manual filing instructions. And we saw this basically in the first week of spending time on Atlas. I was just like, "Just show me all the support tickets. Are they happy support tickets? People writing in being like, 'Oh, I love this service, it's absolutely fantastic. Can you just do A, B, C more for me?' Or are they sad support tickets?" And they're like, "Oh my God, they're all sad support tickets."

**Jeff Weinstein** (00:49:45):
And so, we're just asking ourselves, "Well, why would someone recommend Atlas to a friend?" I was like, "Well, it would have to accomplish A, B and C activities for them. It would have to get their company, it would have to handle getting their tax ID from the IRS. It'd have to handle all the downstream administrivia." But surely, if they had a bunch of support tickets at the end, they're not going to go tell their friends to use this thing. We could measure all of the intermediate parts, we could measure the success rate and the frequency of incorporation services and we do all those things, but if you looked at the support tickets, there's just no way if you had a support ticket, you would recommend it to a friend. And so, we suggested this metric to ourselves, companies that have no support tickets through the incorporation service.

**Jeff Weinstein** (00:50:36):
The whole process, from the moment you start the application open, actually the first page load at the very beginning, all the way through the process waiting for the government, waiting for the IRS, and we give you two more weeks to write into support. We give an extra buffer two weeks. And if you get through that whole thing with no support tickets, that's a yes. If you have any number of support tickets, that's a no. And we just looked at the percentage of founders that were going through the service with zero support tickets, which is very different than looking at an average, right? You could have the average as 0.3, but that doesn't necessarily mean that they're getting to 0.2 is going to cause them to tell their friends more. And we looked, and only 15% of founders were getting through Atlas with zero support tickets through that metric.

**Jeff Weinstein** (00:51:31):
And I just thought, "Okay, well let's just drive that number way up, and let's look at the support tickets aside what people are needing and we'll bake it into the product, and presumably it'll fix it. People will like that more and then tell their friends." And over about 18 months, we took that number from 15% to 85. We basically just flipped it. And you can look at the market share plotted on the same timeframe and it's the same shape. And I think you have to find a measure by which it speaks directly to what the customer wanted, and that if you accidentally leaked your dashboard to them, your customer would be ecstatic to learn that that's what you were measuring the whole time. If we were to showcase the internal Atlas metrics, which we often just screenshot and publish, I think they'd be pretty happy to hear that we were spending all of our time making sure that none of them had support tickets.

**Jeff Weinstein** (00:52:33):
And it was incredibly encouraging and motivating to the engineers on the team because we could just assign them a topic. "Hey, look at all these support tickets. Why don't you come up with the product spec, the scope, the solution? Oh, want to learn more? Just reply to the support ticket email, figure out what they need." And so, we kind of turned all of the engineers on the team into PMs to go and one issue at a time, figure out what needed to change and build products for it. And that's where we pushed forward on 83(b) elections, automating it, sending in the mail for folks. We built our own signing service.

**Jeff Weinstein** (00:53:17):
We turned everything into a click. We did just did sort of the obvious things we saw in the tickets, but as the PM, I was able to just sort of, not on autopilot, but really sit back and have content full conversations with engineers who were bringing solutions and ideas for product, rather than one person going through all of the potential ideas, scoping them and assigning them. And because it was based in what people were saying and wanted, it was very motivating for everyone on the team. So somewhat long answer, but figuring out something in which every day we can wake up and look at the same metric and with some confidence know what to do, is so much better than, "Let's figure out what to do each month, and starting from scratch."

**Lenny Rachitsky** (00:54:08):
I think this is amazing and important advice, just the power of a single metric that everyone on the team can understand, rally around and use to prioritize the work they're doing. I've seen exactly the same sort of impact. Funny enough, Airbnb, one of the teams actually had a metric sort of like this, basically reducing the people contacting Airbnb with support issues. But what ended up happening is, their team started just making it harder to contact support because they're like, "Maybe they don't need to contact support about all these trivial issues, so maybe let's encourage them to figure it out themselves." Is there anything you've learned about to try to avoid these kind of second order effects that are of perverse incentives of a metric?

**Jeff Weinstein** (00:54:47):
We look at multiple metrics, but we will optimize around one and you have to use your own judgment to look at some of these countermeasures and pick them. We would also, that would sort of be our overarching metric for a year, but then we would pick specific tactical metrics about how we would accomplish it. So just an example that both is how we solved a problem, but also it's just a style of metric that was useful to us. Of course, some of these support tickets included things like, "I'm waiting to hear back from Atlas about, if they're going to approve my application because Stripe is required for very good reasons to evaluate certain business types, or sanctions, lists and the worldwide products." So there is some, should be incredibly quick, but there is a bit of a review process, and of course if you were not hearing back from us, you would be upset because you're trying to make your company immediately, "This is ridiculous. Let's get back to us quickly."

**Jeff Weinstein** (00:55:59):
And so, we knew that one of the reasons that people were writing to support was like, "Hey, what's up with my review? What's going on?" And we knew that our tactic was just to drive up how quickly we got to a final decision on folks and to reduce the number of overturned rejections, where someone writes back in saying, "Hi, come on, I'm totally just making something reasonable. What's up? Why did you reject me?" And so, we would pick these overarching single metric, which was the companies with zero support tickets, but then we would have a specific KR that was owned by an engineer, which is the tactic that we're going to do. And so, we would not allow ourselves the perverse tactics to sort of just casually exist. We would choose which tactics we're going to do and then set a metric for it.

**Jeff Weinstein** (00:56:49):
And the other reason I love this metric is, it's a cohort metric by which you're trying to drive something up into the left. Sometimes people will get excited about a chart that goes up into the right, it's kind of a meme, "Oh, that's going up to the right." I'm really excited about charts that go up into the left. So you have to figure out some optimization that you're trying to maximize. And so, in this particular case of this risk review, we would look at, "Hey, for the cohort of customers that started last month, how quickly did we get them to their final risk review by number of days since they submitted?" And so, you want a chart that looks a lot like, "Here we go, right up to the top." Because you want 100% of your customers to get their final decision as quickly as possible.

**Jeff Weinstein** (00:57:44):
Wouldn't you know it, when we looked at the chart, it was doing this. And so, each month we would just make it a little better, a little better, a little up and to the left, up and to the left, up and to the left. And now basically 100-ish percent of people get their risk review within an hour, from a long tail taking a long time. And so, we would constrain the tactic through a metric and then watch it through an optimization function. And then when we got to a point where we were happy with the target, we could put down the tactic. That's another really useful thing about metrics, you can decide when to stop a tactic because you get to some level of success that you're comfortable with and you can always choose to pick it back up later.

**Lenny Rachitsky** (00:58:23):
So there's some really cool lessons here of just how to pick a good metric. Just to kind of maybe summarize what I'm hearing is, you kind of worked backwards from essentially NPS, like, "Why aren't people recommending Atlas?" You found, "Okay, well people that are complaining and having issues with support and running into problems, most likely are going to be detractors, not going to want to recommend Atlas, so let's have those really ambitious goals. Eventually nobody has a support ticket/let's just track how many people have zero issues." And then you identify, "Okay, what's driving a lot of these support tickets? It looks like this risk timeline till they get to this certain milestone, let's make that our goal for the next quarter or whatever, and let's focus there and then make an impact." And then I imagine move on to other levers within this bucket of zero context.

**Jeff Weinstein** (00:59:08):
You have to pick the right metric for your audience in... I wouldn't wouldn't fully export that metric to everyone. That was not a terrible one to export, but in the founders choosing where to get started mindset, again, this isn't just deeply spending time listening to your customers. They all ask their friends, "Hey, how did you start your company?" They want to talk to an older sibling of sorts about how it went. And so, we decided that our go-to-market strategy would be to delight our current customers such that they would tell their friends. And other businesses, that's always somewhat useful, but you can also reach people with billboards and Google ads and other types of upsells. That's very difficult in the moment that someone is starting a company that's sort of a National Geographic, can you get the picture of the bird at exactly the right time?

**Jeff Weinstein** (01:00:10):
How are you even supposed to go find people who are about to start companies? Thankfully, they have this practice of just asking their friends. And so, if their friends loved it, they're going to just recommend it. And that has the metric and the tactic and the go-to-market all lined up, rather than sometimes in cases you might hear someone say, "Well, let's make the product quality better." Well, we all make the product quality better, but why? Why is this actually going to move what our customers want, and the business board? And when you can line them all up, it can be quite beautiful, especially when you can see it month-over-month for a long period of time. One other metric I think that I would export to anybody, is if you are unsure what to measure, we have this, I don't know if we stole it from somebody else or if we came up with internally, whatever, is just users having a bad day, where we will just emit a log line anytime we think that a user bumped into a problem.

**Jeff Weinstein** (01:01:14):
So maybe they hit a 404, or maybe their payout was one day after the ETA, or they had more than 10 payment declines, you can kind of brainstorm again or just listen to customers, what would cause you to personally have a bad day, and then just emit an event when that occurs. And then you could just make a stacked bar chart of all the bad day reasons and the frequency by which they're happening, and it's eye-opening to see those frequencies. And it's kind of a metric I hadn't thought about until Stripe's scale, in which you just don't know what's happening until you emit the log line and count it. The frequencies could be...

**Jeff Weinstein** (01:02:03):
... emit the log line and count it. The frequencies could be kind of mind-blowing. And I think for almost any scale business, if you are bored one day and you're not sure what to measure, just make a user having a bad day chart, emit a log line and count it as a bar chart and then anybody else can add their own bar chart on top of it. And so, it's become a way for teams to scale their understanding of users through metrics by just saying, "Hey, look, anytime anybody has an idea about why a customer is having a bad day, just emit a log line, put it on this chart, and then we can choose over time which bad day reasons we want to burn down and hopefully just eradicate them, not just minimize them.

**Jeff Weinstein** (01:02:41):
But it gave us kind of a background noise counting system for where there are problems and anytime there's an incident or some customer issue, the first thing I think is, "Ooh, I wonder if we have a bad day reason for this." And if we do, I actually feel okay. I'm like, "Oh yeah, it is a bad day for this customer." I wish I didn't have it, but at least we're aware and we can evaluate it against other bad days that we want to burn down. What does sometimes a little bit grind my gears or gives us an opportunity is like when we didn't know about that bad day. And it's a surprise to us too, that is for me is immediate action. It's like, okay, cool. We have to figure out a way to count this bad day. We got to get it on the chart. That way we can make an informed decision about when to invest improving it.

**Lenny Rachitsky** (01:03:35):
And I love this idea. I haven't heard this before. So the idea is just make a list of what happens to a potential customer that would cause them to have a bad day. What are some examples for Striper Atlas that you guys have?

**Jeff Weinstein** (01:03:45):
Are you a Stripe customer, Lenny?

**Lenny Rachitsky** (01:03:47):
I am with my newsletters. The payments go through Stripe. I check my dashboard every day.

**Jeff Weinstein** (01:03:52):
Cool. So what would be a bad day for you?

**Lenny Rachitsky** (01:03:53):
Oh, I see some silence happening here. It not loading. The numbers taking a long time to show up. Something being completely off in there, not being able to log in. The silence is good. I just want to keep going.

**Jeff Weinstein** (01:04:19):
The question is how much to the audience is how much of the silence will we edit out before it goes live? But this is what I'm talking about, right, is I could guess them, right? And as you were saying those, I know the URL of those charts. I know the login one because I feel that too. So I play with Stripe all the time and then you get a two FA too frequently and come on, I had the same cookie. I was just here yesterday. So we count all that stuff and try to make it better over time. But I'm so excited when someone brings me a new bad day I hadn't thought about yet because that's like product cabinet.

**Lenny Rachitsky** (01:05:00):
I love it. And your advice here is this doesn't necessarily have to be your goal or metric. It's just watching this thing that could lead to a lot of interesting ways of operating.

**Jeff Weinstein** (01:05:10):
A couple other just like quick metrics things because it's a bit of a... I don't know, some people like cycling or something. I guess, I like metrics. People get a really nice bike. I want a really great metric. Picking metric titles that make you feel something. So we could have called that measure of companies, number of companies that do not send a support ticket over X period and Y period with min... You sometimes see these charts where the metric itself named itself. This is just companies with zero support, that's it. And the brevity and the focus and the customer mindset built into the chart name can become currency inside the company. It's like, oh, I'm working on making this chart go up and it feels good to just say the name out loud rather than some complicated underscores and mins and maxes and the database field name is still in the chart title.

**Jeff Weinstein** (01:06:26):
These are aesthetic choices, but I think make dramatic differences in the cultural willingness for people to buy in and get excited about it and reduce the need of a product person to just remind everyone every day why they're doing it. It's like the metric is motivating us because it's a motivating thing to talk about. And then lastly on metrics is there's just good hygiene that people should bring to their measures. Percentages shouldn't have 41 significant digits if only two of the digits are relevant. You should keep all the measures of your dashboard on the same X-axis. These are just stylistic things that increase the frequency that people want to just wake up every day and open the dashboard and look at it. And that is so powerful if your whole team is looking at the same set of information that has the heartbeat of the customer every single day.

**Jeff Weinstein** (01:07:26):
In fact, we can measure at Stripe the usage of our dashboards by team, and so we can see which teams are themselves looking at their own metrics and that is an incredibly useful predictor of how on the same page they are and how customer obsessed they are. So I just think it's not an area that's sort of behind the scenes, bean counting reliability is the machine hot. You can make metrics that mean something to the customer and you would be proud if they were to be screenshot and put on the internet and be like, "Wow, I feel like that company is taking their promise to me seriously. And I can see myself on those metrics as a customer." That's where we're really shooting for.

**Lenny Rachitsky** (01:08:18):
So [inaudible 01:08:19] back what you just said there, which I think is a subtle point potentially, is just making the dashboard look nice, like the hygiene of the naming conventions and the decimal points and the chart. In your experience, you find that really powerful and important.

**Jeff Weinstein** (01:08:34):
A couple of years ago, Stripe did internal work to make an internal metrics kind of dashboard system. And we have a special place called Go Metrics. Many people use a go/service where you can just quickly go to a URL. And again, I have to sometimes do a rule rather than a policy. My rule is if it's not on Go Metrics, I'm not going to look at it. So if people can send me one-off queries or charts or screenshots or presentations or emails of charts and data, but that is in the wind, we can't interrogate the query metrics are almost always wrong. For many weeks, we didn't quite get the definition correctly. You have to live in the metric for quite a while before you really believe in it. And so, if you're always looking at some one-off version, it's just very difficult for it to rise up to the level of importance that is a thing we should trust to help us decide what to do. That's an incredibly high bar. And so, I just find you have to look at it frequently enough.

**Jeff Weinstein** (01:09:46):
And if you're going to look at it frequently enough, it means it needs to be in a discoverable place. You almost go through a couple stages of grief about it because we'll kind of put a metric up in a place and everyone initially is like, "Wow, this is great. I was so excited to finally see this." And then a couple of days later, "I don't quite understand it. What does it actually mean? I saw this other metric from this other angle that kind of makes it feel counterintuitive that it's like this." And then you kind of look into it, "Wait a second, we've been counting it wrong the whole time. Oh, no." And then you look at it the third week and it's a completely different version and then you hope that we forget about it and maybe we'll go onto something else and nope, we're not going to forget about it. Week four comes around, you're like, "Wait a second. Okay, this is..." Then the team meeting starts, "Hey, just a reminder, let's just bring up the metric again, not a screenshot of it. Go to the URL."

**Jeff Weinstein** (01:10:39):
And just that level of frequency and specificity and ritual around it is what brings it into the decision-making culture. And again, we treat it the exact same as we do tweets. It's the quantitative and qualitative right next to each other. And because you're putting that amount of attention to it, you can't have a 1,000 metrics. We just don't physically have time the day to bring that level of care and understanding to so many things. So then it forces you to know so many things you could care about down to a small number of things that you really must care about. And again, that practice goes back to do you really understand what your customer wants? And so, for all these tactics, it's about finding out what your customer wants and then different versions of how do we sort of know it's true over time and our tactics improving?

**Lenny Rachitsky** (01:11:32):
**Jeff Weinstein** (01:13:19):
Okay, let's imagine we understand our customer, we've understand their burning problem. We've built a solution that's in their hands, they're using, it's hopefully better than their alternatives and they're starting to use it and we have some real traction. You could still measure the success, you could still look at the tweets and then, of course, you go to pick it up yourself and you're like, "Wait a second, this thing is horrible. How did it get so bad?" Anyone who's built a product that has gone over the horizon of it's actually in production and being used for a year or more as you go to iterate on it, especially when you're in a larger company and there's multiple teams and multiple products going on, there's just some entropy in the world that causes these things to go bad. I actually have a hard time naturally explaining it.

**Jeff Weinstein** (01:14:13):
You kind of think to yourself, well, it's code. It just must be running the same every day. But somehow you do enough things in a row. And what was once a smooth end-to-end flow for accomplishing a test or a customer is all of a sudden some Byzantine complicated broken mall where all the doors are busted and you have to know exactly the way to get through the dashboard to solve your problem. "Wait a second, I thought this was great just a second ago." And many of us have experienced that. Now, okay, what are we going to do about it? Well, one is it is really difficult to take time during the day to allow yourself to even know that this is true. Because if you're working on one particular team, you're going to have some next thing you're shipping, you're going to have your customers, you're going to be doing great product work.

**Jeff Weinstein** (01:15:14):
Meanwhile, your current thing kind of starts to rot in the world and decrease all the trust you've earned to build what you're building now. It is actually difficult to decide, well, what hours during the week am I going to block off from my future progress to see it from the customer's perspective today? And there are various techniques to try to incentivize or to structure a group of people to do that. Stripe has a thing called friction logs as well, which is a single individual will pretend to be a customer and go through a product experience end-to-end and write it down. And that has been quite successful at Stripe for very motivated people who can block off the time and have the wide enough context to do a complicated thing end-to-end and have the time to write it up and the position the company to send it out as a critique potentially to not just your own team but in a whole organization.

**Jeff Weinstein** (01:16:31):
So that's actually a pretty high bar to crossover. So I was kind of brainstorming what could we do to make this more fun and have the frequency which we're looking at our own products dramatically increase? And we kind of iterated few through ideas. And I landed on this thing called Study Group, which is basically a random group of people inside the company. They might not work on any particular team. They might not all be PMs, just like literally anyone who wants to sign up, a support person, a sales person, someone who's on our events team, an engineer and our infrastructure stack. Anybody can sign up for a Study Group. We show up maybe four to eight people total. We pretend to be some company with some outcome problem. Maybe we want to accept money in person at an upcoming farmer's market, or we want to run a multi-country global business where we have software that another business would use to run their business. If it was something quite complicated.

**Jeff Weinstein** (01:17:38):
We could pick any motivating goal. And there are two rules to Study Group rule one is you do no longer work at Stripe. You do not work at Stripe, not pretend, don't work at Stripe, not try to forget you do not work at Stripe, you've never worked at Stripe. You work at... And we make up a name of the company, Dolphin Aquarium Industries, and we will pick a CEO of the company from the group amongst us. And okay, Jenny is the CEO. "Hey, Jenny, what do you want to do today?" "Well, I want to sell in-person tickets to the Dolphin Aquarium." It's like, "Cool, where would just start?" So we actually embody the customer. We will not break character, it's a little bit of the improv thing and as the kind of maestro of Study Group, I will firmly but kindly, if I hear you use any internal Stripe knowledge, which is natural to do, because, well, you worked on a team and you know where that button really is.

**Jeff Weinstein** (01:18:41):
And the docs link goes a little bit to the wrong place, but if you click the other link, you'll get to it. If I can see you use any internal Stripe knowledge, I'll just pause and say, "Hey, let's redo the sentence or redo what we did with no Stripe knowledge. As a reminder, you don't work at Stripe." And it takes us a couple of times, but people really get into it and all of a sudden we'll start making up characters and the CEO will be like, "Oh, Tim, you're our designer. Where are we going to get the color palette?" All of a sudden there's a person who's not a designer in real life is now all of a sudden having to practice the empathy to be in a customer's position. And because we're going to be doing it for an hour, hour and a half at a time, you actually start to believe that you don't work at Stripe and you work at Dolphin Aquarium Industries and you start to really feel it.

**Jeff Weinstein** (01:19:34):
So that's rule one. You don't work at Stripe. And rule two is we're not here to solve any problems. We're not here to critique, we're not here to solution or suggest, we're not here to file bugs. All of those things is recorded. We can do that later, whatever. This is just about practicing empathy for the customer and going through the product. And we have done more than 25 of these at Stripe thus far in just this year, last few months of 2024, more than 250 people have participated in the Study Group. And it is deeply eyeopening for those involved. The responses are sort of business emotional, not super emotional, but just, "Wow, I can't believe how hard it was to accomplish X, Y and Z. I thought we were amazing at blah." It's like, "Well, we actually are still pretty good, but we need to get back towards amazing" or Wow, "I didn't even know that internally people wouldn't know that our products did 1, 2, and 3."

**Jeff Weinstein** (01:20:45):
And this has become so internally popular that teams have adopted for themselves. And so, we've kind of franchised Study Group internally already where different teams will run it. But I think we're going to continue it because I think a little bit is coming out of the pandemic. People just want more group activities. I think some of it is the slowness by which we do it. We're not rushing through it. Which another reason I appreciate your podcast as well is let's really get into the details and not be rushed for time. You forget that you have a meeting at the end kind of amount of time. No one is to blame or defensive because it's not your product at all. It's a random group of people. We don't even introduce ourselves about what team we worked on. We're just all here as participants to embody the customer. And then I think lastly, a reason why it's worked, and these are many of these just been actually super surprising to me.

**Jeff Weinstein** (01:21:39):
I wouldn't have been able to prick ahead of time, is it's just fun. People want to make up the name of the company. They're excited about what Dolphin Industries would sell. A person who's not a CTO in real life gets to pretend to be a CTO and there's little theatrics to it, but it has been different enough from our other approaches for a company like Stripe, which is already pretty focused on this topic, that we think that there's enough legs here that we're going to keep it and kind invest in groups pretending to be the customer and going through it painstakingly slowly rather than only demos or only writing, which has other benefits, but misses the participation of a larger group and more fresh eyes. So it's been fun and we named it Study Group. I guess, I named it Study Group because I wasn't sure it would be initially. So I just came up with something that sounded cutesy, but gave me enough leeway that we could kind of adjust it over time. And this is where we've landed.

**Lenny Rachitsky** (01:22:56):
It's fascinating that there's so much theatrics and ceremony necessary for a product team and a company to find out these things about their product. You would think people are like, "Oh, we know how onboarding looks. We know all these things," but basically what you're saying is you don't, and you need to do these sorts of things in order to really know what your product is like these days.

**Jeff Weinstein** (01:23:20):
The customer does not live in our walls. They aren't. They're not here. They don't know our lingo. And it is just so natural for our internal mindset and lingo to flow into the application over time. And you need some counterbalance to get there. And I think it has to be an unnatural counterbalance. It used to frustrate me actually more like, "Wow, why aren't we doing this?" Well, we're actually doing great work to move something forward and we have our local optimizations. It'd be difficult to get to this level of specialization that multi-product companies are trying to do without that level of focus on a per team basis, but then you need something unnatural to help us bring it back.

**Jeff Weinstein** (01:24:12):
And so, I'm constantly looking for non-punitive fun ways objectively to get more perspectives from the outside in. If it's breaking the fourth wall to get on the phone on Twitter, if it's looking at a metric of users having a bad day, which is just like counting what's happening, you can't argue with that. Or a random group of people just kind of scratching their head trying to find a button, those are truths in the world that we're trying to make sure are inputs to all of our teams. And if you don't have those inputs, I can totally naturally see where the entropy of the world leads you to have Frankenstein bad products, even when all the individual parts are well oiled and run by great people. So you need something unnatural.

**Lenny Rachitsky** (01:25:06):
There's an interesting trend and thread through our talk so far broadly, there's just an obsession with making something great and awesome. And then a layer below is just an obsession with the user experience being as great as possible. And for a lot of PMs, there's not a direct line between make the experience as amazing as possible to growth and revenue and success and things like that. And it feels like for you and for Stripe broadly, there's this innate implication. If we're making the experience better and better and better, we will grow. You're nodding your head a little sideways a little bit, so I'd love to hear just your thoughts on just this obsession with experience and user issues. But we also have to go to the business. What are the metrics are moving?

**Jeff Weinstein** (01:25:51):
If someone else has a strategy for moving revenue that isn't getting it from customers, I want to know about it because it's so hard to get it from customers. If there's some faster path, please tweet me and tell me about it because this is very hard, a lot of work to do. So if there's something else, I want it on the table, but I often find it's part of the product experience. So maybe it's internal sales tools. We can do a Study Group about our internal sales tools process and our deal desk and our margin structure. We can do a friction log on our third party vendor process or a migration service or the way an ecosystem partner helps deploy our services into a big enterprise. Nothing is sort of off limits from product. In fact, I was chatting with a friend who runs the company and they were small company on the verge of product market fit starting to feel, customers starting to pull and they're like, "Oh, but our self-service funnel, it's so leaky and we have all this support coming through self-service."

**Jeff Weinstein** (01:27:03):
First of all, congratulations, unbelievable that they're going through your product, even attempting self-service and contacting you. The majority case would be no one tries or they try and fail and don't contact you. So again, what a problem to have. And two, they wanted to minimize the support. In that particular case, it's like, "Well, what's actually in those support tickets? What's in those sales? Those are really sales contacts." They're like, "Oh, they want to learn more about how they get started." They want to know the expertise about... This is a particular company, it's a healthcare related company. They wanted to know the healthcare choices available. They wanted to know how to migrate from some old system they had to it.

I was like, "That's the product. The thing you're talking about is the product." Turn those moments during your self-serve process into not self-serve and make the product experience be let's get you on the phone. And now when they get on the phone, they know the first name of the person they're talking to because they have it from the onboarding forum and all of a sudden it feels like you are still in the product, but it's not software. Now it's a person, but it's a person backed by internal software, which knows as much as they can about the customer and what they want. And I was really inspired by Fidelity, which is a big financial institution where many people listening might have switched jobs and had to move their 401(k) or something like this from job A to job B. Maybe in some universe it'll be three clicks, but not today or certainly not when I tried a couple of years ago. You got a call and go on a phone tree and all the shenanigans, and then I got on the line with someone from Fidelity. They're like, "Hi, Jeff. They knew about the old company. They confirmed my address." They said, "By the way, this is not a digital process yet. We're going to FedEx you an envelope and inside it is going to be the thing for you to sign. Here's going to be exactly where to sign. Here's a picture we're going to sign. We've put another envelope inside that envelope ready to go. And so, you just take the papers from envelope one, sign them where it says and put them in envelope two and put it back to the [inaudible 01:29:16]."

**Jeff Weinstein** (01:29:15):
It's like, "Wow, that is product." That is a product experience where I think some people would say, "Oh look, the product experience has to only be in software." So I feel when people think, oh, product quality and craft has some limit towards business value, there's some asymptote that you have to be like, well, kind of product plate time quality is over. We need to talk about business. It's like, let's figure out exactly what is causing the business to happen and make a product, even if it doesn't look naturally the same as our SaaS, software, browser, mobile, whatever versions. I think we can see the entire experience as it. And from there, I include the sales process, I include the support process, I include tools that help with compliance and everything else. And again, if people have a way to make all those things bad and lead to great increasing revenue over time in sustainable ways, I want to know about that because that sounds so much easier than the version that we're trying.

**Lenny Rachitsky** (01:30:23):
I love that and clearly it's worked for Stripe. Just one last question. I want to talk about Atlas and dive into just like what is Atlas and how is it doing and things like that. I know there's some new stuff coming that you're going to share, but one last question about Study Groups. How do you decide what product you're going to pick to do a Study Group on? And then what is the expectation with the result? I imagine there's a PM sitting around like, "Oh my God, I just got this 10 page report on all the problems."

**Jeff Weinstein** (01:30:48):
So initially, I just made up a list of stuff that I thought would be fun to Study Group to kind of kick it off. And now, because it has a bit of an internal brand and it's exciting, and people who have gone to a Study Group say nice things about Study Group there, they actually proactively say, "Hey, we should Study Group blah," or "We're launching something next week. We should Study Group it before it goes out the door." Or now I actually just have a huge backlog of things to Study Group based on what people want. And now we're again franchising it. So we're going to have Study Group captains and people run their own Study Groups, and so we can really scale this behavior. But we did our first Study Group of an internal tool recently. And so, that I think is going to catch on just anything at all can be Study Group. It just takes about an hour and a couple of people and you open up the Zoom and that's it.

**Jeff Weinstein** (01:31:37):
And then for expectation wise, look, it is so tempting to put more regulation on something. Okay, well, everything coming out of this program needs to be scored and rubricked and have SLAs. That is extremely reasonable. As some of these next steps, we do notice things that are of serious issues and we have some formal processes inside of Stripe for elevating bugs to certain priority levels that get tagged and have SLAs for teams to acknowledge and review. And so we kind of funnel the outputs of a Study Group into our already existing formal processes rather than having some new special thing that's going to bother a particular team. I will say though that it is difficult to watch one of these Study Groups and if you are the team involved in some piece of it and not want to act on it, because seeing your fellow teammates struggle to use your thing in some way is more motivating than the customer because you can kind of always say to the customer, " Well, they didn't really know," or "They have some special setup."

**Jeff Weinstein** (01:33:03):
Well, they didn't really know or they have some special setup. You probably shouldn't say those things, but you can kind of rationalize it, whereas a group of people incentivized to have actually accomplished it, who got together to do so painstakingly slowly not being able to do so if that's not what excites you as a product person to want to solve, this thing's not for you. But then again, you have your own organization system, you have your own things you need to ship and study group doesn't have a mandate that comes from it. We have our own. It's more of a cultural piece of information that is very high signal and then people tend to use that high signal for good prioritization. I will say though, that we have added the SLAs to certain bug levels that begin to match a bit of our incident process.

**Jeff Weinstein** (01:34:01):
So in an incident strike, like in many companies, pencils down, fix the problem, severity levels, non-negotiable Slack rooms happen, war rooms, all that stuff. You don't want to do that with every single bug, but we have a rubric of craft related tags for our bug system. And if it is a sort of a P0 bug, which is not an incident, right, it doesn't mean to put down your pencils. You do need to acknowledge it at Stripe within seven days. And even if it doesn't mean to fix it, it's like a person looks at it and says, "Hey, we're going to do it or not do it." That's a still pretty strong bar for a non-incident related craft issue.

**Lenny Rachitsky** (01:34:45):
It feels just at Stripe, there's this cultural focus on we want to make the product great, we want to make the experience as great as possible. A lot of companies, it's just teams. We have this goal. We're not going to do anything that isn't driving this metric and goal that we have. And I think for teams like that, it's hard to hear just like, oh, someone's going to send you all of these problems that you experience. There's the negative version where the founders goes through the product like a CO of a larger company, just, oh my God, look at all these problems. You need to fix these immediately. And a lot of times it's completely distracting from the things they need to do, the goals they're trying to drive, things that really, really matter that the CO may not be thinking about. And it feels like you're trying to find this balance of here's problems that exist. You don't need to fix them. You probably should. Here's the most important stuff. But also there's often you find a correlation between make the experience better, you're going to do better.

**Jeff Weinstein** (01:35:37):
There's a huge amount of trust here involved in your colleagues, which is we want to provide teams great information and the best teams welcome that information. It doesn't mean that it comes with a auteur opinion from the outside world that says you must do X. We have a rubric on some of the craft related bugs, but again, we let the teams relabel them. And so maybe it's actually not a P0 from their eyes and that's the trust we put in the teams. I think that the failure mode is when you don't look. And so we need unnatural, safe, fun lore that gets us out of our chair and into the customer's mindset. Best is if it's you and you're your own customer, okay. Second best would be sitting right next to the customer in the outside world and then like, okay, fine, I'll take a third best, which is pantomime the customer and enforcing you don't use any internal knowledge. If you have practices in those three categories, I'm comfortable with the failure modes.

**Lenny Rachitsky** (01:36:56):
I love that. This is definitely going to be the longest episode I've ever done, which is exactly what I expected and I'm happy that we're doing this.

**Jeff Weinstein** (01:37:04):
Everyone go 1.75X or something.

**Lenny Rachitsky** (01:37:07):
I like when people are like, oh, this episode is really good. I had to slow down to 1.75 or something. How are you even listening at that speed? No, it's 1.0 speed. That's what this episode needs to be. There's two more areas I want to spend some time on. One is Atlas. We've talked a lot about on the surface of Atlas. I want to help people understand what the hell it is and the stuff that's happening there. And two, I want to talk about getting stuff done at a big company, something that you've done at Stripe and I hear you have a lot of good advice on. So first of all, what is Atlas? We've talked a bit about it. What's the best way to understand what Atlas is and who it's for?

**Jeff Weinstein** (01:37:42):
In 2016, a bunch of Stripes were traveling the world, Stripes is what we call teammates here, and they're just hearing stories from entrepreneurs around the world. And you would hear this unbelievable story from incredible entrepreneurs who have a laptop, which is that they'd have to fly to the United States on an airplane to make a US company in order to get access to use financial system, to raise money from US or global investors, often to take USD or to charge US customers. And you could have sat around and said, huh, is that illegal? They don't live in the US. Can they have a US company? Absolutely. The US loves this. It is incredibly encouraged for people from around the world to make a US company and many people do.

**Jeff Weinstein** (01:38:38):
Now, why did it require an airplane, right? And so you start to hear that kind of thing at a coffee shop amongst someone with a laptop who has access to the whole internet. And that is a burning problem. Right. That is not a tier three issue. I am not able to run my business without getting on an airplane should be sending alerts off in your whole psyche that you have discovered something important. And so I wasn't at Stripe at the time, but I'm very thankful that, I was running my own startup at the time. I was very thankful that the people at Stripe decided to try to tackle that problem. And so Atlas is a way to start a company in a few clicks, and we think that's an incredibly big deal because while there are smart humans across the whole planet, the opportunity that they have is not uniform. But it's a little strange because it's all the same MacBooks and it's a little strange because it's all the same IP addresses and we all have plenty of bandwidth and smarts.

**Jeff Weinstein** (01:39:49):
And so what can we do to dramatically lower the barrier to great people solving problems? And we've found over and over again that increasing the ease and simplicity and decreasing the cost and complexity tends to lead to just more of that thing. And we have a fundamental belief that there should be more startups and they're not finite. And that belief comes from both just a core hope because there are so many problems in the world that don't seem to be being solved fast enough by our current institutions and larger companies that we think will actually, we need entrepreneurial energy to tackle them. And then it's also comes from experience of seeing it happened. Instacart signed up for Stripe with a Gmail address and then Covid happened and they delivered critical food to everyone when people were reasonably not allowed to go to the grocery store easily.

**Jeff Weinstein** (01:40:53):
So you just don't know what the next Gmail address is going to do. And so in Atlas, we radically try to simplify the process of getting a company started and that mission has taken us to just solve more of the problem over time. And so over the last few years, for those who have either used Atlas or have started a company or maybe follow along on Twitter a bit, you might've seen just a progression of complexity that used to exist being automated. And so a big one that we did about a year ago was this 83(b) election, which is this absolutely Byzantine silliness system by which you have 30 calendar days to send a one-page document to the IRS that could radically change the economics of how you are incentivized as a founder. And this is not one of these greedy loophole. The IRS in the 1980s made this IRS rule in order to spur more entrepreneurship.

**Jeff Weinstein** (01:42:07):
They want this. And the only issue is they made it extremely difficult to accomplish. You have to send a snail mail in to an IRS address in a particular format, in a particular way with no verification that it happened at all. And if you do it 31 calendar days, there's no redo. Okay. Now again, if you're a product person, you hear the founders terrified all day long about this same issue, just alarm bells in your head whole time. And so I had experienced it for myself as a founder several times, and I also just heard story after story and I just put on my to-do list for the team, we are going to solve this 83(b) election thing. And there are very good reasons not to do it because it comes with potential huge liability. Don't want to screw it up, it's snail mail.

**Jeff Weinstein** (01:42:54):
You're really going to monetize this. It's a competitive advantage to do it. You can kind of argue yourself not to do it in a million ways. But again, back to the mission of just taking all of this complexity and turning into a single click. It was obvious to us and we got started on it. Infrastructurally, we've been automating these steps and when this podcast airs, I guess today, it will be true that when you go to start a company on Atlas, it will just be a single click.

You go to type in your friend's names, what the name of the company will be, it'll tell you if it's available automatically or not. You can split the company up 50, 50 or whatever you want to do, fill out a few things and you click go and then like a burrito coming to you, like a pizza tracker, we will just handle all of the downstream activities that used to be, hey, remember to come back in and purchase your shares. Why am I purchasing my shares? I'm just getting started. Why am I writing a check for $10 and putting into a bank account that I can't even open yet? And then I have to wait for that to be done to get the 83(b) [inaudible 01:44:09]. All of those steps are now just handled in the background so that we can get you ready for business in a day or two.

**Jeff Weinstein** (01:44:17):
And so this is our vision. So you can quit your job on a Sunday night, get the Sunday scaries, I'm done with this thing, and on Monday morning fill out this form and the next day be able to run a billion-dollar business because we will have automatically handled getting you access to banking systems, to payment systems, to handling all the equity paperwork, filing your 83(b) election where you can just shift from having worrying about the company starting process to just building and shipping.

**Jeff Weinstein** (01:44:52):
And you'll just get kind updates in the background. Cool, the IRS is giving you a tax ID. Cool, your 83(b) election is filed. Cool, all the founders have their equity and you're ready to go on the cap table. And we've done this by deeply integrating with the governments and deeply integrating with banking partners where we can get you access to the financial system before the IRS and the other governments come back with their sort of official yeses because we take care of the problem in the background by which we're faxing, phone calling, filling out forms on your behalf. And so we just want to take all that complexity and just erase it so that you get the same thing the YC group gets when they start, that checklist that they go through. We just have the robot do exactly the same thing.

**Jeff Weinstein** (01:45:45):
And so in some ways it is a really big deal in a big ship because it completely automates the company starting process. But in other ways it's an incredibly incremental step that it's taken us three years to get to where we had to systematically automate the internal steps, each one and now we've done the work to wrap it all up into one button. And you can just watch how your company's doing in the dashboard.

**Lenny Rachitsky** (01:46:16):
Well, first of all, congrats Jeff and the Atlas team on shipping this. I know this is a big milestone and it's been a long time coming.

**Jeff Weinstein** (01:46:21):
Yeah, Atlas was actually a little reasonable before we decided to do all this work. It's like why do this next step of completely automating it when it was actually fairly straightforward before. Atlas has above 80 NPS, which is quite high. Apple is in the low 60s, AirPods is 75. I love my AirPods. So Atlas in the 80s with almost 50% response rate is quite high. And so we still chose to do another year of work to automate all of this work behind the scenes because we see that companies are charging their customers sooner when they go through this automated process versus waiting. And it's a little strange. You just started your company. Well, what does it really matter to wait an extra seven days or 20 days before you can really get going on business? Those are really fragile days which you're building. And to some of our conversation earlier, that amazing feeling of getting your first customer and being in it with them and money actually exchanging hands and getting that relationship.

**Jeff Weinstein** (01:47:34):
If we can slide that forward in the world by a couple of days or weeks, which we're seeing, like half the time it takes to get to your first customer, just shave a whole week off of your company and you can kind of see GDP being born sooner. And went my whole life knowing that okay, GDP is not finite and it can grow, but I've never really seen it and now I've actually seen it grow faster, sooner. And I think anything we could do to just move that forward is going to inspire and lower the bar for more people to be an entrepreneur because they'll see how satisfying that can be.

**Jeff Weinstein** (01:48:21):
And another stat, which really was interesting to me recently is that we have seen since doing much of this automation work, that more solo founders are using Atlas than ever before. And I think it's because you can just do a lot more on the internet as a founder with no-code tools and everything else and get going. Very cool to see that bringing the best of the internet and making it available worldwide can be correlated with more people becoming entrepreneurs. And I think we should just keep doing that.

**Lenny Rachitsky** (01:48:55):
It's incredibly inspiring and I think this is going to be a huge deal. It's hard to think about how many, what sorts of changes in tech could transform how many companies are started and how many companies not just started but actually happen because to your point, you may start and they're like, nah, nevermind a few days later if it's still stuck in some queue.

**Jeff Weinstein** (01:49:13):
Totally. And then you don't know where these things are going to go. We have the sort of cohort of 2024 startups in Atlas got to $50 million in revenue twice as quickly as the cohort in 2023. And so we kind of also think sometimes, oh, it was the pandemic that pushed everything online. Those are our best years. It's like we're seeing the earliest cohort charts of new startups just cracking up into the right. And that's very exciting because you also hear sometimes, well the funding market is down and valuations and this and that and the other. That is much more of a point in time capital analysis and much less business, like just how businesses are working day to day. It's really in the revenue that is representative of their futures and that looks amazingly bright.

**Jeff Weinstein** (01:50:05):
And then of course these companies go off to do pretty wild things. Companies that have started through Atlas, there's been 55,000 of them to date are doing $5 billion a year in revenue. I think it actually resets their expectations of what other tools will be in the future. It's like, well, if it was so easy for me to get my company started, well why is it so hard to do banking? Well, thankfully there are some great services for it, but I think if we can push people towards expectations higher, then they will want to make their companies better and we'll just all benefit from that.

**Lenny Rachitsky** (01:50:38):
How much of this is based on you guys sending faxes and sending mail yourself, like I don't know how much you can talk about the behind the scenes, but is there a lot of, through this ops element to automating some of this?

**Jeff Weinstein** (01:50:51):
Atlas is in total 10 people, which is I think a relatively small group for the role that it plays in the wider startup ecosystem. And we just don't pick up work we can't automate because we know that we need the leverage. And so we're not going to put ourselves in situations in which we have to compete to be the best. We're going to put ourselves in situations where we can automate it and be the only, and that's a different mindset. So in terms of why we picked up 83(b) election as a topic, when we made that decision, we made a commitment that we're going to do this forever. We're going to do this forever. This is a piece of infrastructure for the rest of the internet. That is a very high bar to set as the thing you're going to do.

**Jeff Weinstein** (01:51:50):
And so we're happy to take our time. This is part, versus like go-go-go versus the long-term compounding. Go-go-go was when we assigned one engineer, hey, it's your job today to send one piece of paper to the office with this third party mail service. Why? Doesn't matter. Today, just send a single piece of paper to the office and an incredible engineer, and she went on to lead all of 83(b) election work. She sent it. And the proof of just receiving the piece of paper at the office that we had just sent yesterday is incredible proof. Right. We're like, well look. I mean, the 83(b) election is just sending this piece of paper to the IRS, like we just did it. Right.

**Jeff Weinstein** (01:52:37):
That go-go-go as soon as possible was extremely useful because it's just like, look, this exists. We can do it. Come on. On the long-term compounding part, we were extremely serious about how we picked our third party vendors, and backup vendors, and what promises, and SLAs, and reporting systems, and alerts, and playbooks, and backup processes, like it's in a very intense amount of internal structure we use. But again, we have to look at where the value is. The value is in making sure it happens. Does it need to be us sending the mail? Does it need to be us talking to government? Not necessarily. And we have chosen to work with third parties and many backup third parties as well because one, there's expertise in the world of physically printing and sending mail that the 10 of us are not going to today become experts in. And two, I think it also causes us to build better software in that we now need to evaluate if something's actually working because it's happening externally.

**Jeff Weinstein** (01:53:39):
Whereas when you build it yourself, again, you have this natural feeling, well, we built it. It must be working. Oh, later we'll add alerts. Later when there problems, we'll figure out playbooks. Well look, when it's a third party building it, you're like, wait a second. What happens if they screw up? Like cool, we better figure that out. We better OCR all the results. We better do all these check sums, we better... And it would be awesome if we could always treat our internal work that way, but because it was external, it forced us to be more rigid where we needed to be rigid and create interfaces and kind of commitments. And again, we work with a bunch of great third parties and back up third parties to execute this. And each year we write a document called Should We Do This Ourselves? And we look at the other nine of us around the room and go, of course we shouldn't. Let's go on to something else. So again, we're just really stitching it together, but ensuring that it happens.

**Lenny Rachitsky** (01:54:31):
Awesome. Okay. I was imagining fax machines just,-

**Jeff Weinstein** (01:54:34):
There are fax machines occurring. There are fax machines occurring,-

**Lenny Rachitsky** (01:54:37):
Not in the Stripe [inaudible 01:54:38].

**Jeff Weinstein** (01:54:38):
And there are phone calls being made and there are robots waiting on phones on hold as well.

**Lenny Rachitsky** (01:54:44):
Oh, amazing.

**Jeff Weinstein** (01:54:45):
There's quite a lot going on.

**Lenny Rachitsky** (01:54:47):
AI is here. I saw a stat that one in six new Delaware corporations are now started on Stripe Atlas. That's absurd.

**Jeff Weinstein** (01:54:54):
Yep. I'm very excited to tell you when it's one in five, but it is not today.

**Lenny Rachitsky** (01:54:59):
Okay, sounds like we're close.

**Jeff Weinstein** (01:55:01):
We're on our way.

**Lenny Rachitsky** (01:55:02):
Sounds like we're close. The other stat I have here is that the fastest growing cities for startups. Here's what I have, I don't know if you know this, but Boulder, Shenzhen, and Las Vegas.

**Jeff Weinstein** (01:55:13):
They're everywhere. One of the, it's like stat we kind of came up with a little bit last year that I'm just personally deeply obsessed with is founding teams in which the co-founders are in multiple countries. So we kind of nickname this. Again, it's like giving things a good title, headlines. Cross-Border Founders. Wow. More than 20% of multi-founder teams have at least one founder from another country. That is astounding to me, that the internet could bring people together like that. And I think that's going to provide more perspectives, more solutions will be local and global. Just all perspectives are great. And again, I think the Atlas team itself represents this. We were very intentional of how we built the Atlas team. It's majority women and we have more diversity to hire, but we're just very intentional to make it a team that had diverse perspectives. You've been on teams that don't have diverse perspectives of any type. They are so much worse. There's no real science necessary here. We just enforce that. We had the opportunity to build this team that way.

**Jeff Weinstein** (01:56:36):
And it was really important to me that it represented a world we wanted things to look like and to represent. And it just had to be very intentional about it because I've made mistakes in my career previously where my startup was all men when we sold to box one of them. And on each hire it was harder and harder and harder to hire someone of a different background. Just naturally folks didn't want to join that type of team. And that was the last time I've ever going to make that mistake, which is that early the candidate poll must match where you want the team to go. It's not a down funnel problem, it is an up funnel problem. And where you have to just make sure that for each role you're comfortable with the distribution of people and backgrounds in your candidate pool and go from there. And I think that is one of the reasons why that 10 person group is so effective, is it has just a lot of diversity and perspective.

**Lenny Rachitsky** (01:57:38):
Another skill Jeff Weinstein is incredible at that I wasn't even aware of. We're going to add them to the list and I actually saw a photo of the team and I noticed that. And so great work. Is there anything else on Atlas that you wanted to share before I get into how you actually made Atlas happen at a company like Stripe that has a billion things to do?

**Jeff Weinstein** (01:57:55):
We just want to hear about what's hard for you. If you look back in your emails and if you started a company recently, you're starting a company right now, the whole world is counting on you to pick a customer, solve their problem 10 times better than their alternative, get it to them, charge for it, become economically viable and build a great business that provides great services. We are not counting on you to become experts at this silliness of administratively running your company. Imagine life without Google Docs where you'd have to hire an IT person to run your IT back end on employee three. You'd have an IT person or imagine the world without AWS for EC2 or S3 or any of these cloud services and you're racking computers yourself.

**Jeff Weinstein** (01:58:46):
You're just absolutely not going to try as many things. We just see the company structure, the structure, bringing people together to be like that, and we want to automate more and more and more of it and turn it into software. So we're looking for the next things to work on. We have a couple ideas, but we expect to turn more of groups of people working together, that administration into software. And I think it's just going to unlock huge amount more people choosing to do it.

**Lenny Rachitsky** (01:59:16):
Interesting. I'm so curious what that ends up being. If you really think about what you're doing here, if you believe that entrepreneurship and innovation and technology make the world better, you're creating such an unlock to allow more of that. And like I said, I think it's hard to imagine and think of other examples that could be as transformative and impactful as just making this process.

**Jeff Weinstein** (01:59:35):
It's funny because I go back to again, I also hear from founders, entrepreneurs like, oh, I can't think of an idea. Like, ah, I need a startup idea. And yet everything in the world is broken. And I also recall my first startup early 2010, 2012 ish, I joined a friend's company. That was started at the same time that the Stripe founders started Stripe. And that is, I think about that a lot because with the same information, knowing how hard it was to accept online payments, I chose to work on something else where they didn't. They worked on making it easy in seven lines of code to accept payments online, which turned out to be really useful.

**Jeff Weinstein** (02:00:29):
So I really encourage people to be very sensitive to the problems that they see and just not let any little hiccup go unnoticed. And I think Atlas is really a manifestation of that, which is, let's actually look at every single thing. You went from hobby to economically successful operation and which of any moment along the way you shouldn't have had to do. And we think those things are a fair game to play with in any topic. I think that there are many more gigantic businesses, important things to be solved sitting in plain sight. I can't see them always, but when you hear, if you sit in enough silence and you hear the same people complain about problems, you too might find something as big as online payments are hard, which was sitting right in front of all of us.

**Lenny Rachitsky** (02:01:24):
And I think it's important to note, it doesn't necessarily have to be a venture-backed, venture scale company. Right. There are many, most businesses in the world are non venture-backed, venture scale billion-dollar companies. You can build a profitable company.

**Jeff Weinstein** (02:01:36):
It's kind of funny. We've all put this badge of honor of giving away a lot of your company. People really love owning a lot of their company and being successful. So you just got to pick the right capital structure for your business.

**Lenny Rachitsky** (02:01:57):
And again, the amount of money that has been generated of the companies that started through Atlas, you said $5 billion, basically that's the GDP of Atlas. That Atlas is,-

**Jeff Weinstein** (02:02:07):
And that's like revenue per year and that's growing,-

**Lenny Rachitsky** (02:02:09):
Per year.

**Jeff Weinstein** (02:02:10):
Yeah.

**Lenny Rachitsky** (02:02:10):
Yeah. And obviously a lot of it would've happened anyway, but still it accelerated. It's probably growing faster. A lot of it probably never would've happened otherwise. Yeah.

**Jeff Weinstein** (02:02:19):
We ran a survey a little bit ago, we need to rerun this, where we just asked people would they have started their business without Atlas. And about 20% of people said they wouldn't have or wouldn't had then. And again, these things are fragile. Right. And it's not all Google employees leaving their job to the build something. It's people from every possible background, every possible role, every possible job, every possible age group who see problems and can solve it. So it's dramatically more fragile than people think.

**Lenny Rachitsky** (02:02:56):
Well, great work, Jeff, and team Atlas and Stripe in general.

**Jeff Weinstein** (02:03:00):
Fun.

**Lenny Rachitsky** (02:03:01):
Let's talk about one last thing. There's so many more things I still want to talk about. Maybe we'll have a,-

**Jeff Weinstein** (02:03:06):
We can go quick. Yeah, we can [inaudible 02:03:08].

**Lenny Rachitsky** (02:03:08):
Make it 2X speed. So Atlas is basically a zero to one product. I know you didn't start initially, it was there, but you took it from, I don't know, maybe you took it from 0.5 or something to one in 100 now, and a lot of people struggle with starting things like this within larger companies. Like Stripe's a large company, right? It's like a very innovative, well run company, but it's also a large company. And clearly you made shit happen, you and your team. What kind of things have you learned? Actually, let me read a quote. Here's a quote that kind of describes you being good at this from one of your former colleagues who will go unnamed. "Jeff is really good at cutting through the BS. You hear so much about frameworks and all this complicated stuff that people talk about, NPM circles, one of the most straightforward, obvious things probably right. I get so annoyed after calls with Jeff sometimes because I know he's right about something. I banged my head against the wall for months." And so talk about just what you've done, what you've learned about getting stuff done.

**Lenny Rachitsky** (02:04:03):
Talk about what you've done, what you've learned about getting stuff done at a large company. What do you need to do?

**Jeff Weinstein** (02:04:07):
Not having things be your idea I think is really powerful. I just talked to 50 customers who all yelled the same thing. Here they are in varieties of quotes and forms and the rest of it, and you put some three bullet points of strategy around why it's important, it's going to help you win more market share, and the rest of it and how you can do it well. Cool. What else could we want to do? Maybe somebody has something where 51 people have the same burning thing, but the majority failure mode is we do nothing. That's the majority failure mode. So one, aligning people with deep customer stories story boarding some solution visually with a Sharpie and not a pencil, not Figma initially, not high or low fidelity. I can never remember which one is the detailed one, but Sharpie. What is the unconstrained perfect solution to this burning problem?

**Jeff Weinstein** (02:05:18):
That's Pixar-style storyboard. You don't need to be a designer. You can just draw stick figures on a piece of paper or whimsical or whatever you want to do. And with those things, if you're not asking for the sun and the moon on headcount and team size to make some forward progress, who could stop you? Let's get some first version working. It was very motivating to get that single piece of paper in the mail, which was blank, to kick us off on the 83(b) election. Again, by the time this podcast airs, we'll have crossed 10,000 83(b) elections filed, and we will have done them all 100.00% on time. With the burning use case, why customers are going to need it, why we can do it cheaply, effectively, safely over a long period of time, and here's the way to get tangible, forward progress quickly against the stick figure vision, but with something in the browser or one version of it. Let's just get one thing working one time.

**Jeff Weinstein** (02:06:31):
I find proof of existence to be an incredibly powerful proof, rather than proof by theory or proof by debate. It's like, "Look, we did it one time. Hey, I'm holding the piece of paper." Pretty motivating. If we just printed out the right information, we'd be done. You're like, "Okay, actually there's a lot to do other than just that," but it really pushed us forward. Cutting through a little bit of the red tape is about momentum and making each step not such a big deal and asking for less permission. Then of course, once you have a little bit of that under your belt, you're going to naturally be trusted with taking more of those kinds of bets.

**Jeff Weinstein** (02:07:24):
Paired with some of the things we talked about earlier of everyone's looking at the same place about the metrics, everyone can watch the success. We don't need to do big, internal updates with long-winded PowerPoint presentations and scrambles the night before. You can just go to the metrics page and see how we're doing. That brings so much trust to the group that people start going from, "Why do we have this Atlas thing that doesn't really produce so much money. It's charging companies when they don't have money. We're a big payments business. How do you even compare these things?" To "Wow, look at the progress that they're making against the mission, and look at its impact on the curves." And you start to root for it more.

I think that's how we got it there. I will say one other thing, which is that making something economically viable is extremely important. I am probably the fourth person to run Atlas, and it's quite a pantheon of people prior to me, including the founder of Mozi, which is a compliance startup, Watershed, which is this amazing climate reporting tool, also led Atlas, Patrick McKenzie, patio11, for many folks who [inaudible 02:08:46]

**Lenny Rachitsky** (02:08:46):
Wow, what an alumni group, this collection.

**Jeff Weinstein** (02:08:48):
We owe ourselves a dinner. We owe ourselves a dinner. Quite a group. And now we have a new person. I technically no longer lead Atlas, so we've hired up a whole team, which is really exciting. And Hayley Halvarsson, who's joined us about a year or two ago, she leads Atlas now and you can find her on Twitter. She's fantastic. We swap jobs over a course of a year, just one month at a time, the roles. And so she worked for me, then I worked for her, and she's gone off to hire some amazing people to run Atlas. So it's really quite a privilege to have these people lead it over time.

**Jeff Weinstein** (02:09:22):
But it was really important for us to communicate why we were going to run this in an economically viable way, and I think that applies to all products and all businesses. It's like, "Look, if you're a customer acquisition-style product, showcase why this is the best customer acquisition for the dollar for the company. If you are a margin-generating, moat-creating, ecosystem-growing portion of the business, then your metrics have to show it." So you can't just have half the story of just the product quality and the tweets. You have to have the economics. Who else is going to put this much energy into this style of product and that gives us confidence that we should invest it in the long term? Because alternatives can come and go, and I super encourage there to be more Atlas alternatives. That'd be great for founders, but I think over the long term, it'll be difficult to do so because of the business model.

**Lenny Rachitsky** (02:10:19):
There actually was an alternative at one point, AngelList, and then they're like, "No, Stripe is killing it. Let's just send everyone to Atlas."

**Jeff Weinstein** (02:10:26):
I had worked on Stripe payments for a while, and I had just started on Atlas, and I think that same month AngelList announced that they were doing incorporation and banking and cap table all together, which was exactly what I wanted to do. I was like, "Oh shoot, did I sign up for the wrong thing? AngelList is such a smart group of people, so customer-oriented, great brand, I love many of the people that work there, they work with some of the best legal minds, and they have the RUV setup. There's so much awesomeness here." I was like, " Should we really compete? What should we do here?" And we thought about it more and more like, "Look, in the very long term, this company-starting process is going to become a efficiency cost problem, and there's so much long tail complexity with dealing with multiple financial institutions, multiple government processes, all of this legal complexity, and it's difficult to charge a lot of money for it because it's hard to charge people money when they haven't even started the business yet."

**Jeff Weinstein** (02:11:36):
We looked at it and said, "Look, we're going to keep this long-term, compounding approach because we think that this is where it's going to go." And it was a zero interest rate environment at the time. AngelList built a phenomenal product. I looked at it with nothing but admiration and happiness, but it also smarted and hurt. We kept building, kept building, kept building, and I got a phone call one night, on my wife's birthday before we sat down for dinner, and it was Dan at AngelList, I hope he'd be comfortable telling the story, who I love. Incredible product mind and he led product over AngelList for startups. He said, "We're going to get out of incorporation. This is not going to be our focus going forward. Do you want the business?"

**Jeff Weinstein** (02:12:28):
That was like a year and a half after they had really gone out, or maybe two years after they'd gone out, or something like this. I was like, "Wow." We had kept such an open relationship with them. We had paired with them on legal constructs. We had discussed 83(b) election openly. A lot of people were like, "I can't believe you're talking to the competitor." Look, we all share the same mission here. Yes, we're competing, but are we really all better off from treating each other at arm's distance? We had a shared Slack channel. We discussed when the Delaware was slow on incorporation. One time is because they were playing softball and they had an afternoon off. That's a real story, and we've discussed it. AngelList was incredible in how they evaluated it. We're evaluating different partners, but because of our working relationship and the quality of your product, and they saw we were going with 83(b) election and the intensity of that, they just put up a webpage that said to get started with AngelList, if you need a company, go right over to Atlas.

**Jeff Weinstein** (02:13:36):
That was a really amazing moment because I respected them so much and I looked up to them so much that they would mutually beneficially choose to do that. And everybody was excited and happy, and customers are happy, and it's been an incredible relationship since, in which you can start on AngelList, go through Atlas, and then all of your information is automatically populated into AngelList automatically. We've since rolled that out with several other partners, Mercury, Carta, others, but AngelList really led the way there, and we maintain a great relationship with the team. It took a while, but it really reproved to me that they're not competitors. It's alternatives, and if you care about your customer, you care about their alternatives, and if you care about the mission, you need to all work together. Look, there's some friendly competition, of course. We all want to win, but in the long term, I think all parties are significantly better off.

**Lenny Rachitsky** (02:14:31):
Wow, that is an awesome story. I don't know if you've shared that anywhere else. There's so many lessons there that I could spin off on and... Not worrying about competition, staying heads down, just solving customer problems, staying close to your competition, not being afraid to talk to them, sharing advice with each other, just building the best possible product. I don't know, there's a ton there that's super interesting.

**Jeff Weinstein** (02:14:52):
I couldn't really draw it up any better, and I think the world is better off with more specialization, and it's a pain in the butt to do these incorporations. I think you want more specialization and more partnership, and I think a lot of companies are starting to do that now.

**Lenny Rachitsky** (02:15:12):
Let me go back to the lessons you shared on how to build something new at a big company, then we can wrap up. I took a bunch of notes here, and these are awesome and they actually resonate a lot with Mihika, who came on the podcast, who's at Figma, been the person building a lot of zero-to-one stuff. So it's nice that there's these trends that are coming up again and again.

**Lenny Rachitsky** (02:15:32):
One tip is storyboard the ideal. With a Sharpie, draw out, "Here's this exciting vision of what this could be if we were to pull it off without constraints." Unconstrained, powerful vision. Two is solve a burning use case. Make it clear this is a huge problem for a lot of people. There's probably stories you share there. Show tangible forward progress like, "Look at this, we made this progress, we made this progress. Sent ourselves a piece of blank paper. Look at this, it's a huge milestone." And have momentum, and Mihika talked about this. Keep the fire alive. Keep the fire alive, show momentum. We're making progress. This metrics moving up into the right. Then there's a milestone... Felt like you had an early milestone of like, "Look, we made progress," and then also, have the business case, basically. "Look how much we could make and look what this could be if we were to succeed." Anything you'd add there? Anything you'd correct?

**Jeff Weinstein** (02:16:22):
Bringing the earliest customers into the room with your team as soon as humanly possible. We would just invite a founder to the team meeting. We would pipe all their feedback into a Slack channel automatically. We have all the NPS scores going to a channel, and anytime it's not a 10 for 10, we follow up directly. Constant engagement with a customer creates the momentum where it doesn't need to be the product person or some other leader saying, "We need to do this. Follow me." It's, "Oh my gosh, the world needs this. Let's figure out how to do it even faster."

**Jeff Weinstein** (02:17:06):
And a tip that the team has tried, and this is well since I've been involved day-to-day, is literally inviting customers in to design the product, which I'd actually never heard of. "Hey, we're thinking about what happens after incorporation now and what can we do to help founders after they've set up their company? What would be magical there?" We just invite founders in, into a Whimsical, a piece of software I love. It's a really easy learning curve to create visual diagrams. And rather than doing a UXR about it, we just say, "What would you hope this dashboard would have?" And they'd grab a thing, and they start typing, and they start drawing what they want their dashboard to be. Why were we guessing beforehand? I now scratch my head. I'm several years into a decade-plus building things and I was like, "I doing this by myself. Why didn't I just assign it to the people who are going to use it in the first place?"

**Jeff Weinstein** (02:18:01):
Now look, that doesn't always work because not all of your customers are going to be product designers at heart, but more of them than you think, and I think it's giving your customers write access, and not just read access, to your company is incredibly powerful. I think I had not quite seen it so directly where you just actually designed what they want, but I saw a diagram of something we're working on right now. I was like, "Wow, we haven't even had design look at it." They're like, "No, actually the customer drew it." Great. Why were we guessing?

**Lenny Rachitsky** (02:18:35):
I think you have an unfair advantage where your customers are founders and oftentimes have product skills and design skills, but I love that [inaudible 02:18:43].

**Jeff Weinstein** (02:18:43):
It's true, but I will really push, because you don't need a hundred of them and you'll find somebody somewhere who knows. You just got to sit in a little more silence. They'll raise their hand.

**Lenny Rachitsky** (02:18:55):
There's a quote you shared somewhere that relates to what you just said that your dad once said, "You can screw up a sentence if it begins with 'The customer.'"

**Jeff Weinstein** (02:19:03):
That's true. Yeah, my dad runs an IT business in Baltimore to help other businesses with their computer systems. Growing up, I would literally, physically clean the keyboards of his employees and dust the mice. But yeah, he's very, very customer-oriented, where I get a lot of it from, and my mom's a painter, so I think there's some combination of talents or interests there. He would take it one step further, and he sometimes physically bring a chair over in a meeting and say, "The customer is sitting here," and you'd have to pretend. Then he would fake talk to the invisible customer. "Based on what you've seen today at the meeting..." I saw him do this one time. "Based on what you've seen today at the meeting, are you more likely to pay your bill or less likely to pay your bill based on what you witnessed?"

**Jeff Weinstein** (02:19:55):
That's a little intense on the pantomime, but I think the point gets across that... Again, because it's so natural to think internal, if you begin the sentence physically with "The customer" then start your sentence, you just have a much better shot at it.

**Lenny Rachitsky** (02:20:09):
That's an amazing story. Very a study group-ish, like an early prototype. Jeff, we've covered so much ground. I have two hours more worth of questions, but we need to-

**Jeff Weinstein** (02:20:21):
Let's lock.

**Lenny Rachitsky** (02:20:22):
We need to cut it off, I think. Is there anything else you wanted to share or leave listeners with before we get to a very exciting lightning round?

**Jeff Weinstein** (02:20:31):
Really excited about whatever you're building out there, thinking of building. My email address is incredibly easy to find. My Twitter handle is incredibly easy to find. Do not hesitate to send me cold emails. My love language is Loom videos of bugs, but feel free to send anything you have off the top of your head. I respond to good cold emails. Don't hesitate.

**Lenny Rachitsky** (02:20:51):
What's the email, real quick, for people?

**Jeff Weinstein** (02:20:53):
If finding my email address is your issue? It can't possibly be, but it is my first initial and last name at basically everything in the world, though my handle on Twitter is jeff_weinstein, but gosh, if you can't find my email address then you got a bigger problem.

**Lenny Rachitsky** (02:21:07):
Okay, we'll link to it in the show notes, as well. With that, we've reached our very exciting lightning round. Are you ready? Here we go. What are two or three books you've recommended most to other people?

**Jeff Weinstein** (02:21:20):
I know a lot of people on this podcast recommend high-output management, but it should be swap the Bible out for it at all the hotels in the world, in the little drawer. Put it everywhere. You can't go wrong, though. It is an incredible clarity of how to spend your time as a leader, a manager of other people, a very high bar for how evaluating your work as the sum everyone around you. That was very clarifying to me that it's not an individual effort, it is the sum of everything I'm involved in is how to measure it. So that's definitely up there. A nice pair to that book, as a amuse-bouche afterwards, is Orbiting the Giant Hairball: A Corporate Fool's Guide to Surviving with Grace, I think, is the full exact title by Gordon MacKenzie, which is the story of a illustrator at Hallmark, the greeting card company, and it turns out to be a, again, bureaucratic, slow-moving organization that, over time, added rules and policies and rules and policies and quelled creativity and innovation, which is surprising at a greeting card company, but it existed. So this is his incredibly well-drawn book, as you'd imagine, with beautiful illustrations about how he orbited the hairball of the organization to inspire others, keep himself engaged, and to bring creativity and excitement and trying to pull people off the hairball as he orbited it. So I think it's a fun afternoon read with beautiful illustrations about how to stay sane at big companies and where to be a little goofy and take the advantage and gravity of the hairball, but not be succumbed by it and to be able to orbit it.

**Jeff Weinstein** (02:23:22):
Those two are really fun. I will say one other one I like... Because we haven't talked about strategy here, there's been more getting stuff done and some other tactical things, but 7 Powers, and I know you had the author recently on, which was awesome. I won't explain the book, you just watch the podcast of it, but it walks through many of the business powers and moats a company can have. I ran into the author...

**Lenny Rachitsky** (02:23:55):
Hamilton Helmer.

**Jeff Weinstein** (02:23:56):
Hamilton Helmer, yes, thank you.

**Lenny Rachitsky** (02:23:57):
What a cool name.

**Jeff Weinstein** (02:23:58):
Very cool name. Alliterative. At the Box lunchroom one time, where I worked at Box, they acquired one of our companies, and I was like, "Any luck finding the eighth power?" He was like, "I'm looking, I'm looking," as he ran off with his sandwich. One other funny, somewhat embarrassing moment about that book is when I was applying to work at Stripe, I was in some email conversation with our CEO, Patrick Collison, who is quite well-read and enjoys books, and I was trying to showcase, " I like books a little bit," though not at any level of him. And I had mentioned I just finished reading 7 Powers, and I recommended it to him, but it joke's on me because he's quoted in the foreword that I had skipped. So he was very kind to let me know that he had read it and he is quoted in it, so I was like, "Oh shoot, maybe I won't get the job." But I got through that part, at least. So those books have spoken to me. Do you have a favorite power, by the way, Lenny? Do you have a favorite power?

**Lenny Rachitsky** (02:24:57):
His favorite power is counter-positioning. I also like that power a lot because I think it's the one you can that really changes everything about how you build your company, so that's the one that always stands out to me. How about you?

**Jeff Weinstein** (02:25:07):
I like counter-positioning also, and Atlas with going cheap and that audience is counter-positioning, but I really enjoy process, the process power, because it is very difficult to, as an organization, get good at anything, and if you could do that over a long period of time in a sustainable way, you have a power.

**Lenny Rachitsky** (02:25:26):
This is the nerdiest chat I've ever had. Which is your favorite 7th Power? I love it. But on that power, I asked him about it. He makes a really strong point there, that rarely is it actually a power for people. They think the way we execute is going to be our advantage and rarely is it actually a power. Usually people can copy it, but when you nail it...

**Jeff Weinstein** (02:25:47):
That's even better, because then if your competition thinks they have it-

**Lenny Rachitsky** (02:25:50):
Yeah, exactly.

**Jeff Weinstein** (02:25:51):
They won't invest than the other one. So I like it even more, for that reason.

**Lenny Rachitsky** (02:25:54):
I love it. But I was going to say with Patrick Collison being quoted in the book, not only was he wrote part of the forward or was quoted, he basically credited 7 Powers of helping build Stripe. No big deal.

**Jeff Weinstein** (02:26:07):
Totally.

**Lenny Rachitsky** (02:26:08):
This lightning around is going great. This is a very microcosm of our whole chat so far. Second question, do you have a favorite recent movie or TV show?

**Jeff Weinstein** (02:26:17):
How To with John Wilson. It's on HBO. For those who haven't seen it, not really giving away anything because it's just wild when you watch it. You can't give it away. This videographer has found footage where he's just walking through Manhattan, and other parts of the country, but mostly New York, with a camera for 10 years, just filming intensely weird things. And if you've spent any time in New York, there's plenty to film. Then has put together this narrative afterwards about certain topics like how to make risotto or how to take out the trash or how to...

**Jeff Weinstein** (02:26:53):
It's a way of seeing life through the eyes of these vignettes, diving down and really understanding people, and he does it through this incredibly dry humor of stitching together this video footage to tell a different narrative. And I think some of it is that we used to live in New York, and I love living in California, but I miss that frequency of strangeness, and you can see that through that TV show. Fantastic.

**Jeff Weinstein** (02:27:26):
Movie? I recently watched The Quiet Girl, which is a film about a young Irish girl who is from a dysfunctional home and has this opportunity to live with a family friend who have more opportunity for her, more empathetic to her, and it showcases, again, how fragile things are. It's a very intense film, but there's something beautiful in how much opportunity was in front of this young girl. It is a tearjerker, but a great one.

**Lenny Rachitsky** (02:28:05):
Do you have a favorite product you have recently discovered that you love?

**Jeff Weinstein** (02:28:11):
I love my computer. I'm fast at my computer. Being fast at my computer helps me just go from intention to just out in the world. I've fallen back in love with Raycast, which is an automation tool for those who have watched the journey of Spotlight and Quicksilver and Alfred and all these automator services. Raycast seems to have cracked the nut on automation, nerd complexity, but also UI ease and some nice touches and loads quickly, does the basics. It's fully programmable, extensible, just a huge fan of Raycast. And then I think for product people, if you don't have CleanShot installed for screenshots, you're behind the curve. Being able to take a screenshot and blur particular things or point at stuff or have arrows and lines and have that be second nature, fast, instantaneous is so useful to be able to communicate what you're seeing. When I get a new laptop, it's Raycast first and CleanShot second.

**Lenny Rachitsky** (02:29:10):
Wow, I am going to download CleanShot immediately.

**Jeff Weinstein** (02:29:13):
Yes, it's extremely-

**Lenny Rachitsky** (02:29:15):
I've not heard of it. I've been using Skitch as my blurrings.

**Jeff Weinstein** (02:29:18):
As much as I appreciate the Skitch folks, CleanShot is an incredible piece of software.

**Lenny Rachitsky** (02:29:22):
Amazing. I'm going to do that. All right, two more questions. Do you have a favorite life motto that you often come back to, share with friends or family, find useful in work or in life?

**Jeff Weinstein** (02:29:30):
I don't even realize I say "Go Go Go" a lot, but I do. I actually say it and write it so people I hear that they'll later say, "Go Go Go" back to me. I'm like, "Huh? Don't I say that sometimes?" "Yes, you say it a lot." So apparently, "Go Go Go" is one of them. I also-

**Lenny Rachitsky** (02:29:45):
I love that.

**Jeff Weinstein** (02:29:46):
Say, "Let's make some mistakes," when we're brainstorming something or sitting at a sushi restaurant and talk sushi guy or gal, to showcase, "Let's be creative. Do whatever you want. No pretense. I'm not evaluating anything. Let's make some mistakes." It's just a weird thing.

**Lenny Rachitsky** (02:30:08):
They're so good. I'm going to use that for my podcast guests. "Let's just make some mistakes. Don't worry about it."

**Jeff Weinstein** (02:30:14):
At that point, everyone's like, "What? Okay, fine. Sure. Cool."

**Lenny Rachitsky** (02:30:17):
I like the combo of those two, "Go go go, let's just make some mistakes while we're going."

**Jeff Weinstein** (02:30:21):
You have to use it in certain circumstances and not for the five nines of reliability on our API, but it does have its place.

**Lenny Rachitsky** (02:30:29):
Final question. You worked with Patrick Collison and John Collison for many years. I'm curious what the most useful feedback or advice you have heard from them or learned from them?

**Jeff Weinstein** (02:30:40):
On my first month working here, which I guess is six, seven years ago now, they had put me in charge of our payments infrastructure services. That's all the backend systems that communicate with the financial system and all the internal APIs where we build the external APIs and products on top of, so quite a lot of stuff. I knew nothing about finance. I knew nothing about the scale that we're talking about. They entrusted me, somewhat insanely, with that responsibility. On the first month we had our quarterly business review where... The normal quarterly process, and I was like, "Okay, cool. I'll do the next one. I'll write the next one." I've been here one month. They're like, "No, you write it. It'll be even better that you write it." It's like, oh my God. It's forcing me to have to, in the fourth week, have that catalyst to understand the whole business and with the permission, because I was going to have to write this doc about how we're doing. The company had been in existence for seven years before I got here. It was already at some reasonable scale.

**Jeff Weinstein** (02:31:54):
It was an intense operation, and I remember writing the first draft and sending it to him because it was... I didn't want to send... He had pushed me to do it a bit, and I figured I'd give him an early draft and he wrote back, "This doesn't sound like you yet." The willingness to entrust a new person to provide their own perspective and bring it into a very formalized document like that was an impressive... That really spoke to me, and I rewrote it completely, and I made it sound like me, and I've tried to make things sound like me since.

**Jeff Weinstein** (02:32:29):
John's is more of a gut punch, I'll say. I reported to John, the co-founder. Maybe nine months into reporting to him, I would run around with a clipboard. I was a little bit manic of getting a lot done. A lot going on at Stripe at the time. We'd have a one-hour one-on-one, I'd be listing all of the things that we had accomplished and the problems we have and where we need escalation help and where we're stuck and all this that and the other. Lots of stuff. I had checklists and physical paper, flipping it over a little bit frantically. And he said, "You are one of the best people I've ever worked with at solving problems three through 100, but I need you stuck on problems one and two."

**Jeff Weinstein** (02:33:22):
Oh man, that hurt. I was like, "Oh, shoot." I am productive on the non-hardest problems and I was trying to mask, not on purpose mask, but who wants to be stuck on something so hard when there's so much else to do? From then on, I would show up to him with problems one and two and not talk about problems three through 100. Even if we were working on them, we would just not talk about them and we would get stuck on problems one and two. That was phenomenal advice, which I was like, "Oh, shoot, I'm going to be fired." But it was really a deeply impactful sentence.

**Lenny Rachitsky** (02:34:03):
Wow, what a powerful, great, helpful... That's great advice [inaudible 02:34:10] right there.

**Jeff Weinstein** (02:34:10):
He really looked my soul and-

**Lenny Rachitsky** (02:34:12):
Yeah, I love this.

**Jeff Weinstein** (02:34:13):
Like a street fighter style or something.

**Lenny Rachitsky** (02:34:16):
But to your point, very impactful and helpful.

**Jeff Weinstein** (02:34:18):
Yeah.

**Lenny Rachitsky** (02:34:20):
Jeff, we did it. The archeology is complete.

**Jeff Weinstein** (02:34:23):
I appreciate the time, Lenny. It was fun. I don't do too many of these, so I'm curious to people's feedback and really appreciate the questions.

**Lenny Rachitsky** (02:34:30):
Amazing. Jeff, thank you so much for being here.

**Jeff Weinstein** (02:34:33):
Appreciate it, Lenny.

**Lenny Rachitsky** (02:34:34):
Bye everyone.

**Lenny Rachitsky** (02:34:37):
Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review, as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at LennysPodcast.com. See you in the next episode.

---

## [3/16] Building a world-class data org | Jessica Lachs (VP of Analytics and Data Science at DoorDash)

**Lenny Rachitsky** (00:00:00):
So you've built one of the largest and most respected data teams in all of tech.

**Jessica Lachs** (00:00:05):
For me, analytics is a business impact driving function and not purely a service function, not just answering the why, but answering the, "What do we do now that we know this?"

**Lenny Rachitsky** (00:00:15):
One of your colleagues told me that you are incredibly good at defining metrics.

**Jessica Lachs** (00:00:19):
Retention is a terrible thing to goal on. It's almost impossible to drive in a meaningful way in a short term. Ultimately, you want to find a short-term metric you can measure that drives a long-term output.

**Lenny Rachitsky** (00:00:32):
You mentioned the early team. I felt extreme ownership.

**Jessica Lachs** (00:00:34):
Yes, you are a data scientist, but your goal is to figure out what's happening. And if that means that you're going to pick up the phone and call customers, then that is what you're going to do to roll up your sleeves.

**Lenny Rachitsky** (00:00:48):
Today my guest is Jessica Lachs. Jessica is Vice President of Analytics and Data Science at DoorDash, which has built one of the biggest and most impactful data teams in tech. She's been at DoorDash for over 10 years and was the first GM at DoorDash responsible for launching new markets. Previously, Jessica founded GiftSimple, a social gifting startup and began her career in investment banking at Lehman Brothers.

**Lenny Rachitsky** (00:01:11):
In our conversation, we go deep on how to build and scale your data org, including why a centralized org model is so effective. What to look for when hiring data people, how to pick the right metrics for teams to align incentives and drive the right sorts of outcomes. Examples of how the data team at DoorDash has helped the business make better decisions, a bunch of great stories about the early days of DoorDash and a ton more. 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 feature episodes and helps the podcast tremendously.

**Jessica Lachs** (00:01:55):
Thank you so much for having me. I'm very excited to be here.

**Lenny Rachitsky** (00:01:58):
So you've built one of the largest and most respected data teams in all of tech. I've heard from a number of people that look to you for advice when they're trying to build and scale their data teams. And then DoorDash in particular is an incredibly complex business. There's three or maybe even four sites to the marketplace. There's this operational element. From the outside, it just feels extremely complicated and wild. I imagine from the inside it's even more wild. Let's talk about some of the things you've learned about building and scaling the team. You have a fairly contrarian perspective on how to structure data teams. This was referenced when we had Elizabeth Stone on the podcast too. She approaches data the same way. So I'd love to hear just your take on how to structure data teams within companies.

**Jessica Lachs** (00:04:59):
There's two main things that I think are important when you're structuring a team. The first is I believe that analytics should have a seat at the table just like engineering and product and the business folks, the operators. For me, analytics is a business impact driving function and not purely a service function. I think there are analytics teams at other companies where they are answering people's questions, maybe even through Jira tickets, we're building dashboards. That was never really of interest to me. That wasn't the team that I wanted to build.

**Jessica Lachs** (00:05:35):
For me, it's about finding opportunities, about having a point of view on the decisions that we should make, not just answering the why but answering the so what. "So what do we do now that we know this?" And so that's definitely one thing as far as my point of view on building a data team. I think the second thing which may be a little more contrarian is I think there are people out there who think that analytics should be embedded into business units. I strongly disagree. I believe a central model, a center of excellence is superior and I'm happy to talk about why, but that's something that I feel quite strongly about. We've tried it or I shouldn't... well, we've experimented in the past with the alternative, so putting it into a business unit and it's just much more problematic and I think the value you get from a central model is far greater than some of the things that you might lose.

**Lenny Rachitsky** (00:06:36):
Yeah, let's definitely talk about it. And just to make sure people understand, when you say central versus embedded, is that in terms of reporting lines, in terms of their goals?

**Jessica Lachs** (00:06:44):
It's a great question. So mostly it's in terms of reporting lines because I think on the goal side, that is something where we have the same goals that our partner teams have, and I think that that's actually an important part of a successful central model. So when I say central model, it just means that for marketing analytics, marketing analytics is part of the broader analytics team. It does not sit and report in through marketing. Just to clarify.

**Lenny Rachitsky** (00:07:13):
Got it. So the reporting functions at some companies, there's the head of marketing or some partners to the head of marketing where the data, say, analyst or biz ops people or data scientists would report potentially to them and that's it. And they're not as connected to the core, to the rest of the data team, the rest of the analytics team versus-

**Jessica Lachs** (00:07:30):
Exactly. Yeah.

**Lenny Rachitsky** (00:07:31):
Yeah.

**Jessica Lachs** (00:07:31):
So you'd have a bunch of smaller, of course, data teams that sit embedded within the functions. And I understand why business leaders like that. You're embedded within the function, so you're a part of the team. That ownership, that camaraderie that comes with that, I think you can solve for that. But I do understand that that is a benefit. I think the other benefit of course is the business leaders control the roadmaps so they get to dictate the work. They know that they have help and resources in that area when they need them. So that certainty, that control, I totally understand the value there, but I think that those are two things that you can solve for if you know that those are the biggest issues with a central team. So for us, we have a central analytics team, but we are divided up into pods that map perfectly with how product engineering, operations marketing are structured as well.

**Jessica Lachs** (00:08:33):
And so our team de facto has these folks embedded with our partner teams, even though the reporting structure is up through a central org through me. And that helps the team to feel like they are one team, both in terms of the analytics team feeling like it's one team, but also to use the marketing example, the marketing folks are one team and because the analytics shares the same goals as the marketing leaders, your incentives are aligned to work on the most important things and your success is their success and vice versa. So I think that that's been really a happy medium, but still preserves all the benefits of a central org. And there are a lot of them.

**Lenny Rachitsky** (00:09:23):
I want to hear about them, but I think something that some people may think when you say essential org is like a silo data team that sits there and they're like a service org a little bit within the company. It's like, "Hey, I need some data help." And you try to convince that, "Hey, I need some help on this thing." And that's not what you're saying.

**Jessica Lachs** (00:09:41):
Oh, no. No, no, no. That job seems terrible. I don't want that job. No, to the earlier point, we have a seat at the table. We are business partners, we are thought partners with our product counterparts, with our engineering counterparts, with our ops counterparts, and we again, share the same goals and have the same initiatives that they do. And it's just our job to come at it from a data-driven place. We bring to the table insights on things that we've noticed, deep dives that we do to understand the problems that we're trying to solve better. If we need to grow, what are the most efficient ways to grow? What are the trade-offs that we have to make? Where are their pockets of opportunity? That is what I expect my team to be able to bring to that table, the proverbial table, that we want to see that. And in order to earn their spot, that's the deal. We get the seat at the table and we need to earn it by bringing opportunities that we all can go and go after.

**Lenny Rachitsky** (00:10:52):
Awesome. So in a sense, it is embedded. They're embedded in cross-functional teams across the org, but they report up to essential org to you essentially in the end?

**Jessica Lachs** (00:11:01):
Yeah.

**Lenny Rachitsky** (00:11:02):
Cool. What are some of the benefits of this approach?

**Jessica Lachs** (00:11:05):
Oh, there's so many. Okay, so the first thing is a consistent and high talent bar. I think this is something I saw when we would have some pockets of analytics folks embedded is having a consistent bar for talent in terms of what we're looking for, what are the technical skills, what are the soft skills? And being able to evaluate candidates with that same bar, using our same rubric. You just get more consistent and higher talent in my opinion. I think that's number one. Number two is actually growth opportunities. So if you're siloed, you may be the most senior data person within... I keep picking on marketing. But you might be the most senior data scientist within marketing. Where do you go from there? I think when you have the central org, you're able to see if there are growth opportunities in other areas within the company.

**Jessica Lachs** (00:12:04):
And so that really helps folks to stay engaged because they can look at new problems if the problems they've been working on for several years are getting maybe boring and they want something new, there's an opportunity, move from marketing over to merchant analytics. And then I think similarly, if there isn't a promotion or room to grow, if you want to be a people manager and there just isn't a people management role within your functional area, well, you've got 10 other ones to look at and maybe there is that opportunity. So I think it helps with the growth opportunities for the team, which helps to retain talent. So that's a second thing. The third thing is just consistency of methodologies and metrics. So you don't have sales that was as defined by one team and sales as defined by another team. You just have sales and everybody is using the same metrics, the same methodologies, and you're able to improve your methodologies with input from more people.

**Jessica Lachs** (00:13:10):
And rather than recreating the wheel, building the same churn prediction model on six different teams. You can instead build one and have the input of six different teams. I think that's definitely another benefit. Also helps you just scale because you start to see the same problems across teams and so you're like, "Ooh, this is an issue that we need to get ahead of. This is something we need to automate," or, "This is something that we need to improve upon," or, "a problem that is going to grow as our business, as our teams scales." So I think it helps you see around corners a little bit more.

**Jessica Lachs** (00:13:45):
And then just lastly, there's a team culture brand. I think that's really important, not just externally for recruiting top talent, but the team is really proud to be members of the analytics team. We have a unique culture of learning, of sharing. You have someone you can go to talk about your challenges. You have someone who can peer review your work. I think just having that team culture that we have is really important. And it's a lot harder to get when you have the individual silos, particularly in an earlier stage when it's a smaller team, you just don't have as many people around. Everybody wants to have friends at work and we're creating an environment where they can find like-minded data nerds.

**Lenny Rachitsky** (00:14:33):
It makes me think about Airbnb's first data team. I don't know if you know Riley Newman well, but he built Airbnb's first data team and it was actually an analytics team. They called themselves the 'A-Team' on the point of culture, and that always felt a lot of fun and they loved being part of that team.

**Jessica Lachs** (00:14:49):
Yeah. We have the same, but now I feel a lot less special for coming up with that name.

**Lenny Rachitsky** (00:14:55):
Oh, you called it A-Team also?

**Jessica Lachs** (00:14:56):
Yeah, we got the A-Team, yeah.

**Lenny Rachitsky** (00:14:59):
And then I think they moved away from it when there was a push. Now we're data scientists, we're not analytics or analysts. And that was like, I don't know, 10 year ago, like [inaudible 00:15:08] data science. We're data scientists.

**Jessica Lachs** (00:15:09):
We'll always be the A-Team.

**Lenny Rachitsky** (00:15:11):
There's so many threads I want to follow here, one that's a tangent, but something that I think a lot of people struggle with is you talked about how you want your data team, your analytics team to be proactive, to find opportunities, to give you ideas, to help you figure out what to build, not just answer questions. At the same time, there are many questions that teams need to get answered. Do you have any advice for just how to set up a team where they both find time to explore, dig, show opportunities and come up with big ideas and also, "Hey, we just need to figure out the funnel conversion on this thing," or "Hey, what do you think? What's happening in China right now?" Thoughts there?

**Jessica Lachs** (00:15:47):
Yeah, such a good question. I think it's something that never gets easier. You have to be very intentional to carve out time for exploratory work for deep dives because as you mentioned, there are always more questions and more work to be done than hours in the day. And so I think being intentional about it and setting goals for your team around finding these insights through self-directed work is an important mechanism for holding ourselves accountable to that goal because it tends to be the first thing that goes when you get a lot of inbounds, you're like, "All right, well, let's deep dive on something that I don't know if it's really something. It could be high ROI, it could be low ROI, I don't know." So the expected value is lower than this known thing that I can deliver and make someone happy.

**Jessica Lachs** (00:16:42):
So I think to prevent that time from just slipping away, you really have to be intentional. We would do hackathons for our team to carve out days to just go and look into these really interesting things and find opportunities. And I think we have the support of our business partners because so many great insights have come from these deep dives and it really has been some of the work that drives future roadmaps. So they're always really great at allowing us to have this time and actually encourage us often to have this time for some self-directed work, to go find the next big opportunity.

**Lenny Rachitsky** (00:17:23):
If there's no answer that comes to mind, that's totally cool. But is there an example of one of these insights that someone on the data team came up with that led to something big for DoorDash that you're able to share?

**Jessica Lachs** (00:17:35):
So one interesting example was from a hackathon we did a couple of years ago where we were looking at referral as a channel for consumer acquisition. And when you compare that channel to others, it was below average in terms of the engagement you'd see from consumers who came through that channel and the payback period. And rather than just lowering spend on referrals and moving right along, we really wanted to understand what was happening. And so during the hackathon, we did a deep dive into referral. We actually tried referring each other. We tried committing referral fraud, creating new accounts to get around rules. And we uncovered a lot of fraudulent behavior through this deep dive. We ordered so many cupcakes to the office. I remember using referral credits because you had to place an order to be able to get the referral bonus. So we would create the account, place the orders, and we just kept ordering cupcakes.

**Jessica Lachs** (00:18:39):
And what we noticed was that referral as a channel was a bit misleading when you would look at the average in terms of payback and that it was really a bimodal distribution and you had one group of really great consumers who were referring other really great consumers, and the payback on those consumers was really strong. In fact, if that's all you saw, you would spend a lot more on that channel.

**Jessica Lachs** (00:19:08):
And then what was happening was you had this other group of consumers that were not as good people who were posting referral codes online and getting people who were just in it to get free discounts and credits. And we had at that point in time, pretty lax fraud rules. And we didn't have caps on these things. All of which came about from this deep dive where we found that this group of consumers was really a drag on the efficiency of this marketing channel. And so I think that's an example of a few things that we like to do at DoorDash. One being these deep dives and taking the time to really understand the problem and then ultimately make a bunch of recommendations for what we should do, including better fraud checks, caps on referrals, et cetera, et cetera. But also how the average can be incredibly misleading. And so looking at distributions and trying to break down what you're seeing to find ways that you can optimize in ways that you can gain in efficiencies.

**Lenny Rachitsky** (00:20:21):
That's an awesome story, great memory to come up with that one. So this is a really good example of a way to carve out time for the data team to think long-term, think look for opportunities, find big ideas. So the hackathon is one idea. Imagine many data people are struggling often to push back on asks that are just like, "h, we need to know. We just need this one thing. Here's a question, just answer this one question part." Do you have any advice to data to get better at pushing back? Sounds like a bit of cultural like, "We have time, we need to work on these bigger things." But just any advice for data leaders or data ICs to find time for these sorts of things?

**Jessica Lachs** (00:20:59):
Yeah, saying no to someone is never fun. I think as a self-proclaimed people-pleaser, you don't want to say no, especially when it's something you can do and you know that you can very easily with maybe an hour's work, make someone happy. I think it's really important to establish a culture and for leadership to really establish the rules of working and that operating model so that some of the junior folks aren't forced to always have to say no. And I think one of the ways we do that is through our goaling. So because our goals are the same as our business partners, we're able to pretty easily say, "Hey, we've got a limited amount of time. These are our goals. What are the most important things that we are going to work on this week or this month in order for both of us to hit our goals?"

**Jessica Lachs** (00:21:49):
And so when something comes up to be able to say, "Hey, this data poll that you want me to do, is this more important than these other three things that I was going to be working on? Yes or no?" And I think sometimes people don't necessarily realize the trade-offs, and when you make them apparent and you put them front and center, they realize that, "Oh, actually, you know what? That asset's not important. That can wait." So I think that that's definitely something I would recommend, which is always share the trade-offs. Don't suffer in silence with, "How am I going to do all four of these things?" Bring it up and say, "Hey, this is what I was planning to do. If you want me to do this extra new thing, then one of these other things is going to have to drop.

**Jessica Lachs** (00:22:36):
I personally don't think that your ask is more important than these three things, but maybe there's new information, maybe there's context I don't have, so let's talk about it." Rather than just being like, "No, I won't do that." That's not a great approach either. I think having the conversation and constantly reevaluating your prioritization to make sure you're working on the most important things or your team is working on the most important things is really good hygiene to have with your business partner. So some teams do that through a weekly standup like, "Here's what we're going to do this week. Do we like this prioritization? Do we not?" Some folks do it less formally than that. I think you got to figure out what works for you. But to the earlier point, it's a conversation with your engineering partner, your product partner, your ops partner, you're all on the same team, you're all trying to achieve the same goals and you're all incentivized to have your analytics team working on the most impactful things.

**Lenny Rachitsky** (00:23:32):
This advice is great for any role basically. And if I were to summarize it to a couple words, it's just prioritize and communicate what your priorities are and then align on the trade-offs of shifting your priorities.

**Jessica Lachs** (00:23:45):
Every once in a while you just throw one over and say, "You know what? This is quick. I'll do it." At least I do. I think sometimes just knock it out, build some goodwill. I think that that's also important. But usually it's not something you can do in five minutes and in that case it's that ruthless prioritization for sure.

**Lenny Rachitsky** (00:24:05):
And then there's also the side that you talked about of just show that you can provide value doing these things that are longer term, like prove your worth. "Hey, look at all these opportunities I found for our team over time, I should keep spending time on these other areas," versus the on fire stuff.

**Jessica Lachs** (00:24:18):
Exactly.

**Lenny Rachitsky** (00:24:19):
When you're hiring people for your team, I'm curious what you look for and you think is incredibly important that maybe other people aren't prioritizing as much. What do you focus on when you're hiring?

**Jessica Lachs** (00:24:31):
Yeah. So everybody needs to have a certain set of technical skills. I think that's a non-starter. We have a technical bar, we do a technical screen. So I think that's table stakes. There's some really unique characteristics that I've noticed when I look at some of the top talent that I've had on the team or have on the team. I think the first thing is just curiosity. You can't teach curiosity, or at least I haven't found a way to do it. If somebody else knows how, please let me know. Somebody who is just self-motivated to pull on the threads when they find them. So they don't just answer a question. They're like, "Hmm, this thing seems a little odd. I'm going to dig in and look. Even though I could say I'm done, I answered the question, I did the thing I was going to do." The person that has that curiosity, something seems off, something doesn't really make sense and goes and proactively looks into what that is. That is just so valuable. So I really look for that curiosity and that self-motivation to do it without being told.

**Lenny Rachitsky** (00:25:39):
How do you test for that? How do you do that in an interview and get a sense of if they're good at that?

**Jessica Lachs** (00:25:43):
One way you can do it through the questions you ask is have something that is not quite right within the case that you're presenting and see if people notice first and foremost. And even if they don't, if you point it out like, "Where do they go with that?" I think that that's something that you can test for. I think you can also ask for examples that for these folks typically will highlight this, they'll talk about, "I noticed this thing, and so we decided to investigate." So I think that there are ways that you can get that signal through the interview process, but it's really hard. I think testing for hard skills is a lot easier than testing for soft skills. And I think in some of the questions we ask, we'll ask a question with the idea that we're assessing something separate than what the question is necessarily asking. And I think that this is one example of where that really works.

**Lenny Rachitsky** (00:26:47):
You said that you give them a case. What does that look like? What is the actual approach to how you do this interview?

**Jessica Lachs** (00:26:52):
Our interview process has in the early stages a coding exercise. So we do our technical screen and a shortened version of a business case. So real world problem solving. Typically, it's something actually from DoorDash history, like a real problem that we had to see how people can problem solve on the fly. I think that that's an important skill to be able to have, which is, how do you take a problem, break it down, talk through it. A little bit like some of those consulting cases that you hear about, but something that's really rooted in real problems. And I think you can learn a lot from those types of cases where, yes, you get to see how people handle ambiguity and structured problem solving, but ultimately most people get something wrong. They make an assumption that's wrong because well, I would hope that the interviewer knows the business better than the interviewee.

**Jessica Lachs** (00:27:56):
And seeing how people react to being told they're wrong is a really important signal in my opinion. Seeing how people respond, how they're able to take new information and pivot, how they're able to make a decision. So that's another thing that I like to see in cases where, hey, you may not know the real right decision. You might say, "Hey, I could see it going one way, I could see it going the other way." But I always push people to say, "If you had to make a call right now, what would it be?" So are people able to have a point of view without full information because that's life. Sometimes you have to just pick a direction and make a decision even though you don't have perfect information. So I like to see some of these softer skills and how they manifest throughout a case interview, even if it's not specifically what I'm asking with the literal problem we're solving in the case.

**Lenny Rachitsky** (00:28:57):
Along these lines, but in a different direction. You don't actually have a deep data science data background before you got into this stuff. I know you had some art background, you had an art portfolio back in school, and I think a lot of people wouldn't imagine that for someone being head of analytics for a company like DoorDash. I don't exactly know the question, but I guess is there anything there that you think would be interesting for people to know or hear?

**Jessica Lachs** (00:29:24):
Yeah, it's funny. I joke that I have a job I'd never be hired for because I don't have a traditional data science background. And I know that Elizabeth Stone on her podcast with you talked a lot about her non-traditional background for a CTO. So hey, maybe there's something to it. But I became a data scientist out of necessity. I completely self-taught in terms of SQL and Python and I did it because there was a need at DoorDash for someone to help figure out what the right goals were, how we set those goals, how we were performing different markets early in the DoorDash story, so 10 years ago at this point. And I think I just gravitated towards that type of work and Tony recognized that superpower in me even though I don't have that formal training. So yeah, I'm a bit of an artist for fun, but I guess a data scientist in practice or for career.

**Jessica Lachs** (00:30:31):
But I think that that non-traditional background has been a great thing because I'm able to hire people who have the technical skills that I don't have, the folks with PhDs in statistics and the data scientists, machine learning and otherwise. I am able to hire those folks and yet keep them really focused on driving business impact because my background was on the finance side, and so I've always been a pragmatist. And for me, the purpose of our team is to drive business impact. And so the mix between the technical skills of the smarter people that I've hired, the smarter than myself, and my grounding in driving business impact has been a really great partnership.

**Lenny Rachitsky** (00:31:21):
That's quite an inspiring story for someone that is just starting out and doesn't necessarily have a lot of experience in data, but also just generally. I think this is a really cool example. You could be successful in a field that you don't have a ton of background in. I'm curious what you think it was in you that allowed you to succeed in this and get to where you are today. What do you think you did right or what is some habits or ways of thinking that you think helped you achieve that?

**Jessica Lachs** (00:31:52):
First off, I have imposter syndrome like everybody else. So it's not like I have this crazy sense of confidence of like, "Oh, I can do anything." I definitely have the same doubts that others have. I think part of it was probably not even realizing what I was doing. When you're at a startup and things are moving quickly and you see a problem, and I've always liked solving problems, so I was like, "All right, how do I solve this problem?" It was like, "Oh, well, I need access to the data. I don't have access to the data. All right, I'll ask an engineer to get me the data. Well, this isn't going to scale. I can't always bother an engineer, so how do I figure out how to get the data myself? Well, let's learn Python." So I think it happened organically and I don't think I realized at the time what I was even doing.

**Jessica Lachs** (00:32:41):
And then I think if you think about things from first principles about what you need right now in front of you to unblock yourself or solve a problem, and you just focus on that instead of thinking about a global org that you're trying to build. I think that that helps. So for me, it was always about solving the problem in front of me the best way I could. And if that meant I needed to hire an engineer to report into me through the finance org, then that was what we were going to do and nobody was going to tell me I couldn't do it. So I think it's a belief in yourself, and ultimately it's just my desire to solve problems and figure out what has to get done is, I think, ultimately how it came about.

**Lenny Rachitsky** (00:33:30):
I love that so much. There's so many elements there that I think a lot of people can learn from. I feel like there's also this underlying current of you're just motivated for this to work. You wanted DoorDash to succeed, and you're just like, "I will do what I need to do to make this happen. I need to solve these problems. I'm not going to overthink. Do I have the skills necessarily to do these things [inaudible 00:33:48]?"

**Jessica Lachs** (00:33:48):
Yeah, I think I'm competitive. I think that's a trait that you find in a lot of early DoorDash folks and current DoorDash folks, to be honest, just wanting to win and being willing to do whatever you need to win. So roll up your sleeves, do something that's not your job. I think back to early days of taking out the garbage on Saturday nights because it needed to get done. I think that that was something that is ingrained in our culture from Tony Xu, from our founder and CEO, and I think that really resonated with me, and I feel like I've always operated that way as well. And I think that that helped me in my career to be able to do what I've done without really thinking about it too much.

**Lenny Rachitsky** (00:34:40):
Are there any other memories or stories of the early days of DoorDash that would be fun to share? Something that sticks with you of like, "Wow, I can't believe that's what it was like?"

**Jessica Lachs** (00:34:49):
Oh man, there's so many, including so many mistakes that we've made. But I think something that really stands out to me is before I moved to the analytics area, I was actually a GM. I was the first GM at DoorDash and I was in Boston in 2014 launching the city of Boston when nobody knew who we were. And we would wake up early in the morning, 5 A.M. and we would go out, it was the winter of 2014. We'd go out and we'd hand out promo codes consumers outside of the [inaudible 00:35:30] in Boston, and these promo cards would be attached to kind bars so people would take them. And the whole team, it was a small team, there were four of us, but the whole team would go out in the morning to do this. And I think back to our sales guy, shout out to Joey G. So Joe Graccio is our sales guy in Boston-

**Lenny Rachitsky** (00:35:47):
[inaudible 00:35:47] Joey G.

**Jessica Lachs** (00:35:51):
And he was gold on signing merchants on the platform.

**Jessica Lachs** (00:35:55):
That was how he was gold. His compensation was tied to that. And yet in the morning when we would go out, he was with us handing out promo codes because he was part of the team because he wanted to win. We wanted to grow the business. And I think that that is just a great example of the culture that Tony and the early employees and Stanley and Andy, other co-founders really instilled in all of us early in those days. So I think that that ownership, that extreme ownership of the outcome is definitely one of the things.

**Jessica Lachs** (00:36:32):
I think the other is just being very customer first. And I say customer, I mean consumers, dashers and merchants as all being our customers. And the first time I ever went to the office headquarters in Palo Alto, which at the time was in an animal hospital. The first time I went there, there was a huge site outage and the whole company, it was like 20 people at the time, the whole company jumped online to do customer support, to answer the phones, to make sure that folks were getting refunds for orders that weren't going through, make sure the orders that were out there were getting delivered, just dropped everything and hopped on to do support.

**Jessica Lachs** (00:37:15):
And I was brand new, didn't really know how to use the tools, and so it was like, "How can I be useful?" And so back in those days, we used to order dinner to the office using DoorDash. And so in order to preserve about three dashers who would've had to deliver food to us, I was like, "I'm going to go out, go out dashing, go get everyone pizza so that we could feed the masses doing credits and refunds and do what we had to to make sure that we were serving our customers well." And I think that night was one of the largest refunds as a percent of our bank account that we had ever given out. And I think Tony, there were two examples that he's talked about where we just gave a lot of money back to customers because it was the right thing to do because our service failed and we wanted to do right by them.

**Jessica Lachs** (00:38:06):
So I think that those are two stories that stick out in my mind and really highlight culturally what makes DoorDash unique and what I think has been a really important part of our success.

**Lenny Rachitsky** (00:38:20):
It reminds me of the story that Tony and all the early employees, and I imagine you did this just like, "We're dashers," it's like a rotation where you dash for a while. Is that part of the culture?

**Jessica Lachs** (00:38:32):
Yeah, so we have a program, a WeDash program, and Keith Yandell, who's our chief business officer, did your podcast last year and he talked about this. But four times a year all the employees go out and go dashing or do customer support, and it's part of our culture that I love. I actually go pair dashing, so I go together with one of my colleagues. We've done it for years now, and it's a fun thing that we do together four times a year. Actually, usually more than that. And it's important because you get to use the product, you build empathy with all the audiences. I think all of us order DoorDash a lot, so we've built empathy with consumers. But being able to go and understand what it's like to go out dashing and when you're in the restaurant going and talking with merchants and seeing the experience from their point of view, I think it's just incredibly important. And of course we find a lot of bugs like, "Hmm, this doesn't work the way it should, let me report this." So I think it's also just great for catching bugs in the product.

**Lenny Rachitsky** (00:39:43):
**Jessica Lachs** (00:41:05):
I think it's both. It's definitely cultural. I think it comes from the top and I think that Tony exhibits this extreme ownership and looks for it in others. So I think that helps. But I think even today I expect of my team that same extreme ownership over the outcomes. And so I'm more interested in our team figuring out how to solve a problem than the box that someone fits in like, "I'm a data scientist and so I only do these things." Right? It's like, "No. I mean, yes, you are a data scientist, but your goal is to figure out what's happening, and if that means that you're going to pick up the phone and call customers, then that is what you're going to do." And I think that expecting that and setting that as the norm for the team, this ownership of the outcome is something that we continue to do at DoorDash and instill in everyone whether you were early or just joined last month.

**Lenny Rachitsky** (00:42:09):
Is there an example of that that comes to mind of someone practicing extreme ownership, like a data scientist calling someone or something along those lines?

**Jessica Lachs** (00:42:16):
Yeah, so I actually had a meeting yesterday morning with the team that's working on some of our affordability initiatives and we had shipped something that we expected to work, and it didn't. And instead of, "You can dig into the data," to understand the segments of consumers that you would expect it to work with and those that it wouldn't, of course we did that. But ultimately it was like, "I don't know why." And that's where qualitative research is superior to quantitative research, it's asking for the context, to actually talking to people to figure out what was the motivation, what worked, what didn't for them. And so the team, data scientists included, just sat and made phone calls. And so they were talking about what they found from those phone calls and that's going to inform future decisions. And I think rather than saying, "Well, that's what the qualitative research team is supposed to do," it's like, "No, no, no, that is what our team, anyone's team is supposed to do because that's what's needed to unblock us from this next test that we want to run because we need to know what we are testing."

**Jessica Lachs** (00:43:23):
So I think that it happens every day. I think I really love when I see team members go outside the traditional bounds of what a data science role might be and do some product management work, do some engineering work. I think that that's part of what keeps the job interesting. I think it's part of what makes our team special is that that is not only allowed, it's encouraged, and probably also a reason why we've had folks who've gone from my team to the product org and to the ops org and to the finance org is because they get to do and experience parts of that job and get a good sense for what that's like and then realize it's something that they love. So I think it's definitely something we encourage at DoorDash.

**Lenny Rachitsky** (00:44:17):
I love that. I want to move in a slightly different direction. One of your colleagues told me that you are incredibly good at defining metrics, which is so important to get right for a business, especially when it's complex at DoorDash. And I hear you're especially good at finding the right metric to drive the right incentive, especially when the business is really messy and things like that. So I'm just curious what you've learned about how to pick good metrics and align incentives well.

**Jessica Lachs** (00:44:45):
I've learned a lot of things about metrics, mostly from bad metrics. I actually think you learn a lot from picking the wrong metric. Ultimately, you want to find a short-term metric you can measure that drives a long-term output. So people always talk about, "Oh, we want to drive an improvement in retention." Retention is a terrible thing to goal on because it's almost impossible to drive in a meaningful way in the short term, and yet you want to be able to experiment and iterate quickly. So what are the things that drive retention? What are the inputs? So I think it's really important to find the right inputs, and then through experimentation test whether or not those short-term inputs are driving the long-term output that you're looking for. I think that's one thing. I think keeping things simple is another thing I've learned over the years, maybe it's data scientists, but they tend to love these composite metrics with a coefficient.

**Jessica Lachs** (00:45:44):
"We're going to wait this input at X and this input at X+2." And then you end up with a metric that nobody really understands that doesn't actually mean anything. And you're like, "I don't know if a 0.1 increase is it a lot? Is it good? Is it bad?" So they're just hard to work with.

**Jessica Lachs** (00:46:07):
And so I always encourage folks, just pick something simple, even if it's not perfect and your composite would be more perfect. If people understand it, if they have an intuition around it, if it's something that people can talk about across the company, it's going to be a much better metric in terms of driving real outcomes than your made up composite score that nobody understands. So I think keeping things simple is also really important. And then I think the last thing I'll say is it's important to understand how metrics across the company equate to one another.

**Jessica Lachs** (00:46:43):
And so we spend a lot of time quantifying things in terms of a common currency. So for example, if I were to lower price by a dollar, what would I get in terms of, we'll say, volume? Well, what if I lowered delivery times by a minute? What do I get for that in terms of volume? And so now you can make trade-offs between maybe your marketing team and your logistics team because you have this common currency that everyone can talk about. And so we've done that. We've tried to quantify all of the levers of our business, price, selection, quality in common terms, so that if we have, say, a dollar to spend, we know what we get depending on where we put it, over what timeframe. I think that that helps us make decisions more quickly because we know what our options are. We know we have our inventory of things that we can do, short-term, long-term, and what we get for it. So it definitely helps us to make decisions more quickly and hopefully better decisions.

**Lenny Rachitsky** (00:47:56):
These are so awesome. I definitely want to follow up on some of this. This is so good. So maybe on this last one, which we did at Airbnb also like, how does everything translate into Knight's book and booking? Every decision we make, what is the actual Knight's book impact? And so I imagine in your case, I don't know if you want to talk about these things. I imagine it's transactions, or purchases, or GMB or something like that, so I'm guessing is the final metric. I don't know. Is that something you talk about or you don't talk about that?

**Jessica Lachs** (00:48:26):
We measure things in terms of GOV, so Gross Order Value, and also volume.

**Lenny Rachitsky** (00:48:33):
Got it. [inaudible 00:48:34]. Okay, so basically every other metric that people are gold on as much as you can translate, there's a model that translates that into Gross Order Value and volume? Awesome. So when a team is saying, "Hey, we're going to change the onboarding flow and impact conversion here." I don't know. I guess what are some examples of other metrics on teams that potentially translate into GOV and volume just to make it even more real?

**Jessica Lachs** (00:49:01):
Yeah. So everything from the example that you started with, which is an improvement in the login flow, how many more consumers are getting onto the app and ultimately placing orders. And so you can translate that to, of course, orders and GOV. But then something as interesting as selling a Thai restaurant in Sacramento, we're able to say, "What do we think that that gets us in terms of GOV from the consumer by selling that Thai restaurant?" So it's every area of the business, it's mobilizing more dashers on the road. What does that do to our quality metrics in terms of delivery times? How does that translate? So because of that, we're able to figure out if we want to spend the dollar or spend the time, the team's time, on improving conversion or spending more money in marketing or onboarding more dashers or signing more restaurants or adding more grocery stores. So we are able to look across the whole business and figure out what is the right mix of actions to take to achieve our goals.

**Lenny Rachitsky** (00:50:18):
I could see as you talk about this why this is so important in a marketplace, especially a multi-sided marketplace where there's always trade-off decisions between supply investment and demand growth and dasher growth. I don't even know, my brain would explode trying to think about all these things, so I get exactly why this is so important to business. Okay. And then in terms of the simple recommendation, I think when people hear like, "Yeah, keep it simple," they're like, "Yeah, yeah, we're going to keep it simple." What are some things that point to, "This is not simple," that tell you like, "No, this is way too complicated. You should try to simplify this metric even though it's not ideal. It's not the perfect metric, but it needs to be simpler."

**Jessica Lachs** (00:50:56):
Yeah. So we had a score for merchant health, which we tried experimenting with, which was a combination of factors that we had found would lead to a merchant being on the platform and getting an order. So we wanted to make sure that the merchant had active hours on the platform and had images and had a full menu that was accurate and robust. A number of different inputs. And we created a composite that weighted all of these different inputs. And then we were like, "What is our merchant health score?" And you were like, "It's 0.35. It's not 35%. So what is that, that 0.35? I don't know what it is." So instead of that, we said, "What are the most important factors in order... First, let's measure how many of the new merchants are getting an order within their first, say, seven days on the platform.

**Jessica Lachs** (00:51:57):
And then let's look at how many of our merchants are doing these things we know are important. So these inputs. So let's goal our team on getting merchant photo coverage up. Let's goal the team on making sure that we have open hours, accurate hours." So yes, someone might say it's simpler to have a composite metric, but it was so hard to understand what it was and how to move it that it became meaningless. And ultimately moving to something that was simpler to understand, even if it meant having three metrics instead of one, it ultimately was better for the team because folks knew what they were trying to move. And so yeah, maybe we missed number four, five and six on the list of things, but you got one through three and that's 95% of it anyway. So once we get success with that 95, then let's talk about figuring out the other 5%.

**Lenny Rachitsky** (00:52:55):
It's so funny because this is exactly what we went through at Airbnb, we had, we call that a healthy host. I led the host quality team for a while and we came up with this healthy host metric that was six factors of a host, like the cancellation rate, the review rate, their response rate and things like that. And then we're just like, "Cool, let's move this, let make more hosts healthy." And then you end up like, "Okay, which one do we focus on?," And, "Oh, what about all these others?" And we ended up basically focusing on one at a time. And so let's just make that the goal for now and then rotate through the different biggest [inaudible 00:53:28] opportunities to move. [inaudible 00:53:30].

**Jessica Lachs** (00:53:30):
Exactly. I think in hindsight for the example you give, which of those six things are actually the most important? And if you're able to then quantify which one matters most, you work on that one first and you materially move that one and then you work on the next one. You want to move them all. But being able to prioritize and know what you're going to get for a 20% improvement in, say, your cancellation rate, that's where analytics I think can add a lot of value. Because yes, ultimately you'll get to all of them, but the way you do that and the time can have a meaningful impact on your growth. If you can target the most problematic things first and solve those, you get more bang for your buck and that compounds over time. And so doing the things that matter first and most quickly is a competitive advantage in my opinion.

**Lenny Rachitsky** (00:54:21):
The other thing we found along those same lines is rotating between different metrics is so not efficient because you get good at, "We're going to move this metric." And your team's like, "Cool, we totally understand this lever," like cancellation rate. We become really smart at cancellation rate and then three months later, you need to switch to response rate and they have to learn a whole new paradigm of how to think about it. And it's just super inefficient. So we found basically, just keep a team on the metric until there's no more opportunities and give another team one of these other metrics.

**Jessica Lachs** (00:54:50):
Yeah.

**Lenny Rachitsky** (00:54:52):
So many lessons. Okay. And the first thing you said on how to pick a good metric about this idea of short-term metrics that have long-term impact. How did you phrase that again?

**Jessica Lachs** (00:55:02):
Yeah, so we find proxy metrics for long-term outcomes.

**Lenny Rachitsky** (00:55:05):
Awesome. And it's similar to the simple metric, and it all comes down to, again, just like the metric should be something probably, you can move, you can understand, that's close enough to this ideal, perfect metric, but isn't necessarily the entire ideal. Okay, awesome. Anything else along these lines of just picking metrics, working with metrics that you've learned that would be worth [inaudible 00:55:28]?

**Jessica Lachs** (00:55:27):
With metrics, we are often looking at the average, and I think we talked about this a little bit earlier, but making sure that you're looking at the edge cases and your fail states is also really important. And so we often will set goals actually and create metrics around those edge cases. So like the disaster deliveries, the ones that go terribly wrong. So we have this concept of Never Delivered, which is orders that are never delivered. We're really great at naming things at DoorDash, and they're very rare. And so if you were just looking at the average effect or the average consumer experience, it would never come up. If you were just measuring quality based on average values of delivery times and lateness [inaudible 00:56:18], these wouldn't show up because they are so rare, but they're terrible. They're terrible experiences for consumers. They lead to churn.

**Jessica Lachs** (00:56:27):
They're incredibly expensive because you're refunding an order or repurchasing food and having to send another dasher to deliver that repurchased food. So they're very expensive, they're costly from a consumer experience standpoint. And I think if you're not looking for these fail states, they are often missed. So I think when you're picking metrics, yes, you want to improve engagement and you want to improve conversion, and there's a lot of things that are averages overall that you want to move, but it's so important to find these edge cases in these fail states and actually set concrete goals around eliminating them because it can be really powerful.

**Lenny Rachitsky** (00:57:11):
So the tip here is actually make that a goal like, never deliver at some team, just keep cutting that down?

**Jessica Lachs** (00:57:17):
Exactly. So we have part of our quality analytics team and we have product engineering and ops on it as well. Their goal is to eradicate Never Delivered. And in order to do that, you have to understand why they happen. Sometimes it's human error, sometimes it's fraud. And then figure out ways that you can prevent them, that you can fix them while it's happening and ultimately just get rid of them from the system. And you're never going to completely get rid of them, but you can make a meaningful impact to make them even more rare than a fraction of a percent.

**Lenny Rachitsky** (00:58:00):
Yeah. And I feel like people may be hearing this and like, "Of course, why would you not focus on terrible work experiences?" But I think in most companies, they look at the big numbers, they look at the averages as you said like, "Oh, it almost never happens. Why do we even spend any time on this?" And your point is, you should actually spend time on these really terrible experiences, even if it's a tiny portion of your business. I guess maybe share why that's important. Is it just because that has trickle-down effects on the brand?

**Jessica Lachs** (00:58:27):
Yeah, I think it's a couple of things. So just because something doesn't happen frequently doesn't mean that it's not important. So the Never Delivered example is a great one in that this is leading directly to churn and it's also costing a lot of money far more than its frequency would suggest. And I think the fact of the matter is is when you have things that cause churn, you're losing all of that consumer's subsequent orders, and that is not necessarily observed. You're just seeing one bad experience, you're not seeing all of the lost orders because they're lost. And so I think that sometimes this is an area where the data doesn't show you the full picture. And being able to quantify the impact on engagement, on profitability, will make it stand out as something that really, that you would maybe miss if you weren't really looking for it.

**Jessica Lachs** (00:59:25):
And then I think the other thing is with something like login errors, sometimes you don't see it in the data because people can't even get into the data. If you're not able to log in, you're not making any purchases, you're not ordering, and so you may not see it in the data that you're looking at. And so that's also something that I think is important for data folks to think about, which is what data don't we have? What data might we be missing? Where might there be opportunities and things that we actually need to identify and fix that we may not see? Because in this case, with login failures, they're not able to log in. They're not in the denominator, and so we're missing out on them from the data set entirely.

**Lenny Rachitsky** (01:00:15):
Just a couple of more questions. There's one that I skipped that I'm just going to come back to. It's completely out of nowhere, but I think it might be interesting is about a global data org. So you run a global data org, you have data scientists and analysts and biz ops people all over the world, not just the US. I'm curious just how is it different managing data people in different countries versus just the US? What's a big difference?

**Jessica Lachs** (01:00:37):
Everyone always asks about the differences. What I am surprised by is how similar things are, how similar people are, the data scientists themselves, but also consumers and dashers and couriers, as we call them at Volt. There's a lot more similarities than differences. I do think that when you built a business in the US and then you introduce new countries, having different currencies and different languages adds complexity that you weren't necessarily familiar with. I think similarly in EU countries versus non-EU countries in Europe, there's different regulation. So that adds a fun layer of complexity. So I do think that it adds complexity to the problem set, but ultimately so many of the problems are the same. It feels a little bit like going into a test having seen the answer key. And so for me, there are problems we've encountered at Volt through Volt analytics where I'm like, "Oh, we've had a similar problem.

**Jessica Lachs** (01:01:49):
I have an instinct for what the answer might be. Let's still test because there could be differences cultural or otherwise, but I feel like I know where we're going to end." And then sometimes there are problems where it's new for one reason or another, and it's exciting because you're like, "All right, let's see if things are different here." Let's see what ideas might work in a Volt country that don't work in a DoorDash country and vice versa. So I think I tend to focus more on what's the same, and then I'm pleasantly surprised when I find things that are different because that keeps you on your toes and keeps things interesting.

**Lenny Rachitsky** (01:02:31):
I'm going to take us to AI Corner. This is a segment we have in the podcast where I try to understand how people are using AI in their day-to-day and in their business. I'm curious if you've found some really interesting way of using AI ideally in... you can go in either one of these directions, and how you or your team work day-to-day using AI tools to make you more efficient, or integrating AI into your product, making DoorDash better.

**Jessica Lachs** (01:02:59):
Yeah, I think that there are opportunities in both. I think one of the things I'm really excited about is actually the former. So in helping to make the team more productive, we do something called Office Hours at DoorDash, the analytics team. And it's something that we started eight years ago, and it was a way to provide support for teams that at the time we just didn't have the bandwidth to support. So we would go, in the early days, we'd go sit in a room and we'd say, "Come on in and we'll help you with anything you need help with. We'll help teach you SQL. We'll help look at some of your work. We'll be a thought partner. You could just come learn what we're working on." Whatever it was. We would do two hours every week of Office Hours at different times to be friendly to different time zones.

**Jessica Lachs** (01:03:52):
And I think one of the things I'm excited about is being able to really empower some of the folks that are still coming to Office Hours for one thing or another to be able to use AI to help edit queries on their own for example, to be able to say, "Here's a query. I want to make this. Please adjust this to our grocery business so that I can see the GOV for grocery." And so working to build these tools that will help not just our team in terms of time saving, and also to be honest, folks are going to use it on our team, but really to be able to empower non-technical users to be able to do things on their own and not have to take up bandwidth for the analytics team.

**Lenny Rachitsky** (01:04:40):
So essentially it's a chatbot that anyone in the company can talk to you to get advice on how to write SQL queries, query data and things like that?

**Jessica Lachs** (01:04:47):
Yeah.

**Lenny Rachitsky** (01:04:49):
Is there a clever name for this chatbot per chance?

**Jessica Lachs** (01:04:51):
So it's not clever. It's called Ask Data AI, and that's named for our internal Slack channel that used to be the open Q&A for people to ask data. So it's not at all clever.

**Lenny Rachitsky** (01:04:51):
But it's clear.

**Jessica Lachs** (01:05:07):
But again, it goes with the theme of very, very specific naming conventions that we have at DoorDash; Never Delivered and Ask Data AI.

**Lenny Rachitsky** (01:05:18):
I love it. Just clarity above all else. That's something I've learned from an editor that I work with. Jess, is there anything else that you want to share or leave listeners with? For folks that are trying to build their data teams, make their data teams more efficient, is there any final wisdom nugget you'd want to share?

**Jessica Lachs** (01:05:39):
I think the only thing that I want to reiterate is that you don't necessarily need a formal training in whatever it is you're building. And I think that also goes towards the folks that you hire onto the team. And so I mentioned earlier that we've had a lot of folks go to product or go to ops from the team. What I didn't mention is how many folks we've actually had join the analytics team from partner teams. So whether that was from engineering or from our ops team or marketing or finance, we are a net importer of talent as opposed to a net exporter of talent. And I think that that's because my own experience coming over from operations, from being a GM and making that transition into analytics, I find that I'm drawn to other folks who want to make a similar transition.

**Jessica Lachs** (01:06:39):
Now again, you have to have the technical skills, and most of these folks have acquired these skills on the job, whatever job they are doing at DoorDash before they transition to the analytics team, or they had maybe some formal training in school. But I love seeing the folks that make that transition and actually want to join the analytics team, even if they're not a career or data scientist. I think it creates a really unique environment where you have folks on the team from different backgrounds with different expertise who can teach each other things. So I can teach you how to build a discounted cash flow model in Excel, and I can learn how to make kick-ass slides from someone who has a background in consulting. And I can learn about common gotchas in statistics from someone who comes to us with a Master's or a PhD in statistics, and we've got our econometrics folks and we've got our economists. We just have a group of people with different backgrounds who can all teach each other how to be better. And we're not all carbon copies of each other.

**Lenny Rachitsky** (01:07:55):
What I'm hearing is you try to optimize almost for a lot of different complementary skills and very different backgrounds almost.

**Jessica Lachs** (01:08:02):
Exactly. And also people who have experience at different size companies. I think I love folks from startups who have that hustle and grit, but I also love folks who've seen what scale looks like and can help us see around corners as far as what problems we will encounter as the business is growing. And I think it is not just about a diversity of skill and a diversity of background, it's also diversity of prior company and stage. That can be really a unique way to think about structuring your team so that you get the best of both worlds.

**Lenny Rachitsky** (01:08:40):
Amazing. Well, just when you thought we were done, we reached our very exciting lightning round. Are you ready?

**Jessica Lachs** (01:08:47):
I am. Let's do it.

**Lenny Rachitsky** (01:08:48):
Let's do it. Okay. First question, what are two or three books that you've recommended most to other people?

**Jessica Lachs** (01:08:55):
I tend to read fiction, particularly historical fiction, and I love spy novels. So I think my brain is always in problem-solving mode even when reading. A recent book that I read that I enjoyed was The Rose Code by Kate Quinn, and it's about women code breakers in World War II, and I really enjoyed that. But rather than recommending a book... I guess I did just recommend a book, but rather than recommending another book, I am going to recommend the Libby app and supporting your local public library because I love the library and I love Libby, so I'll give that as my other recommendation.

**Lenny Rachitsky** (01:09:37):
Beautiful. Very on brand with sharing economy, company stuff. Libby. Cool. Okay, next question. Favorite recent movie or TV show?

**Jessica Lachs** (01:09:46):
Yeah, another one. I don't actually watch a lot of TV, definitely don't watch a lot of movies. In fact, haven't seen some of the movie greats. I get yelled at a lot by my friend. "I can't believe you haven't seen that." I tend to re-watch things, so series from the past, over and over again. I think it's just like how I shut my brain off. So I've recently re-watched The West Wing, which is one of my favorite shows of all time, probably for the 50th time.

**Lenny Rachitsky** (01:10:15):
Oh my God.

**Jessica Lachs** (01:10:16):
And Alias, which was a Jennifer Garner series from the early 2000s. Also, Spy. So I'm noticing a theme. I think I really love the spy genre. But yeah, I've watched those. They're both great, but not at all current.

**Lenny Rachitsky** (01:10:33):
Perfect. Perfectly acceptable. Do you have a favorite product that you recently discovered that you really love?

**Jessica Lachs** (01:10:39):
This is a bit of a curveball. So Korean sunscreens. So I burn really easily, so I have to wear sunscreen and I love Korean sunscreens. I was introduced to them by a friend of mine, and they're just far superior to what we have in the US. So I highly recommend people give Korean sunscreens a try, particularly there's a Beauty of Joseon on branded sunscreen. It's just amazing and is delightful to wear, which is important when you have to wear it every day.

**Lenny Rachitsky** (01:11:09):
I've been trying to wear more sunscreen as I age, and so this is a really good tip. Was that a brand you recommended?

**Jessica Lachs** (01:11:15):
Yeah. So Beauty of Joseon is the brand.

**Lenny Rachitsky** (01:11:15):
Beauty of Joseon.

**Jessica Lachs** (01:11:18):
There's another brand, Isntree, which also has a great sunscreen. But I'll be honest, almost every Korean sunscreen I've tried is great.

**Lenny Rachitsky** (01:11:28):
Okay. I'm Googling this as soon as we get off. Do you have a favorite life motto that you often come back to and share and or share with family and friends even more [inaudible 01:11:39]?

**Jessica Lachs** (01:11:40):
I do. So there's a John Steinbeck quote, which I'm not big on quotes, but I like this one, which is that, "It's a common experience that a problem difficult at night is resolved in the morning after the committee of sleep has worked on it." I find that that's something I really live by. First off, I love sleep and I try to get as much of it as possible. But the other thing is that if I'm stuck on a problem or if I am writing a response to something like a tense issue or an emotional issue, often I find that if I put down my thoughts, go to sleep, check it in the morning, I end up with a better outcome. So all of a sudden you have a new perspective and clarity on a problem you were stuck on, or you realize that you weren't clear in the way you were communicating your thoughts because you were emotional about something and you're able to put together a much better response to an e-mail or to whatever problem you're handling. So sleep can solve lots of problems.

**Lenny Rachitsky** (01:12:46):
I love sleep as well. I'm always telling my wife, "Let's go to sleep." Like, "Okay, I'll be there soon." I love that advice. Okay, two more questions. Who's influenced you most in your career? Is there someone that comes to mind?

**Jessica Lachs** (01:13:00):
So I think two answers, a multi-part answer. So I think first my career has been in male-dominated industries and I've worked with just some incredible women who've really influenced me. When I was a banker, there were two senior bankers, Vanessa Roberts and Gina Tarone at Lehman Brothers where I worked. And they were just so incredible. They were just so good at their jobs and I found that really inspiring.

**Jessica Lachs** (01:13:29):
And then at DoorDash, Tia Sherringham, who is our GC, and Liz Jarvis-Shean, who leads comms, are just dominant in their fields. And I think that that's really empowering and have been big influences on me to just see strong, powerful women kicking ass and that helps me believe that I can do the same. So that's one answer.

**Jessica Lachs** (01:13:54):
And then the other answer, sort of cliche, but my parents. My mom was a statistician at the UN before she got married, and she actually chose to stay home and raise three children, so I'm the youngest. And when I was in, I think it was elementary school, decided to go back to school, switch careers and become a nurse. And so the fact that she embarked on this completely new career in her forties after 15 years as a stay-at-home mom and my father supported this. I think that that was really, really influential and was probably the first time I saw that you can do whatever you put your mind to, no matter your age, no matter your circumstances. So that was really influential and I don't think I've ever told her that. So hi, Mom.

**Lenny Rachitsky** (01:14:44):
Hi Mom. Thank you, mom.

**Jessica Lachs** (01:14:45):
Yeah, I think that was influential for my career. Definitely.

**Lenny Rachitsky** (01:14:49):
That's a beautiful answer. Fun fact, I worked with Liz at Airbnb. Your person you just mentioned in the comms team.

**Jessica Lachs** (01:14:57):
[inaudible 01:14:57]. She is great.

**Lenny Rachitsky** (01:14:58):
She's amazing. Final question. So when you joined DoorDash, imagine it wasn't obvious that it was going to work. I imagine it was still like, "This was a crazy idea. Maybe it'll work, maybe not." Is there a moment you recall where you're like, "I think this is going to be a big success? I think this is actually going to work out?"

**Jessica Lachs** (01:15:14):
To be honest, I went into DoorDash because I wanted to learn for the experience. I thought it was interesting, problems with interesting people. I never thought too much about whether it would work. I of course wanted it to work and was very competitive and wanted to win. I think there's two moments that stand out. One was when the third party market share data showed that we had become the number one player after, I think we started at number four or five. And I think that that was really exciting to see the trajectory and to see us gain in category share. That was exciting. I probably didn't see it until months after it had happened because we don't spend a ton of time focusing on it, but I do remember somebody wanted to include the graph in some presentation, some sales material, and we're like, "Oh, we're number one. That's incredible. We used to be number five." So I'd say that that was one.

**Jessica Lachs** (01:16:17):
The other one that stands out was, the first talk I gave in a lot of these startup talks in the early days in Boston, and I'd asked the audience, "How many of you have used DoorDash?" And there'd be like three people who would raise their hand. And then it was a few years ago, maybe 2018, 2019, and I was giving a talk and I asked the audience, "How many of you have used DoorDash?" And almost everyone's hands went up. And that was actually pretty memorable for me because in my mind, we were still the small startup that no one had heard of where I had to over enunciate the D's in DoorDash. So people didn't think I worked for Jordash, the nineties' denim company. And so that was pretty meaningful to me when just so many people had used the product or were consumers of DoorDash. It was pretty exciting. And I still get excited. I saw DoorDash mentioned in a book recently that I was reading. It was like, "We're in the book." So those little things when you become part of the cultural lingo that I think are really, really special.

**Lenny Rachitsky** (01:17:33):
Well, I'm a very happy customer of DoorDash. I've never had a Never Deliver. It's always there, sometimes a little late. Usually it's perfect. Thank you for everything you do. Go team DoorDash.

**Lenny Rachitsky** (01:17:44):
Two final questions. Where can folks find you online if they want to follow stuff that you do? I know you've been doing more writing on LinkedIn and things like that, so just help people understand where to find you and how can listeners be useful to you?

**Jessica Lachs** (01:17:55):
Yeah, so as you mentioned, to find me LinkedIn, I don't have a huge social presence, but I am on LinkedIn and I am currently writing a series of blog posts about my experience building a global analytics org at DoorDash. Some of the lessons I've learned over the last 10 years. So definitely check those out.

**Jessica Lachs** (01:18:16):
And as far as your second question of how listeners can be useful to me, I guess read the post on LinkedIn and I'd love to hear what people think, whether you agree with my point of view or not. That being said, be nice. I want honest feedback, but I want kindness as well. So yeah, just engage with the content and let me know what y'all think. I think I do have a broader ask, which is just to encourage folks listening to TruthSeek, something I take seriously at DoorDash. It's a company value. But there's a lot of misinformation out there and it's often up to us as individuals to figure out what's fact and what's fiction. So I have a plea for folks to do your best, to search for the truth and speak the truth, and I think we'll all be better off for it. And of course, use DoorDash.

**Lenny Rachitsky** (01:19:13):
Of course.

**Jessica Lachs** (01:19:14):
Yes, there are three things that listeners can do.

**Lenny Rachitsky** (01:19:18):
You're at DoorDash.com. That was awesome. I love that last point as well in addition, to use DoorDash. Jessica, thank you so much for being here.

**Jessica Lachs** (01:19:27):
Thank you for having me. It was a lot of fun.

**Lenny Rachitsky** (01:19:29):
Same for me. Bye, everyone.

**Lenny Rachitsky** (01:19:32):
Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcast, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [4/16] 5 essential questions to craft a winning strategy | Roger Martin (author, advisor, speaker)

**Lenny Rachitsky** (00:00:00):
Why are so many people bad at strategy?

**Roger Martin** (00:00:02):
What's taught now in business schools generally sucks. People aren't prepared educationally, and they sure don't get prepared for it in companies. It's intellectually challenging and it's emotionally intimidating.

**Lenny Rachitsky** (00:00:15):
You have something you call the strategy choice cascade.

**Roger Martin** (00:00:18):
You have to have answers to five questions. What's your winning aspiration? Where to play? How can you win? What capabilities do you have to have that your competitors don't? And then, what enabling management systems do you have to put in place? For the most part, in the leading business schools, it's illegal to teach that.

**Lenny Rachitsky** (00:00:35):
Playing to win, you talked about, and there's kind of these two routes.

**Roger Martin** (00:00:38):
You have to be either differentiated or low cost, there's no way to protect yourself if you're not one of those two.

**Lenny Rachitsky** (00:00:44):
Is there anything else you wanted to just leave listeners with?

**Roger Martin** (00:00:46):
I have never met this mythical beast called a great natural strategist. Great strategists have all one thing in common, they just practice.

**Lenny Rachitsky** (00:00:59):
Today, my guest is Roger Martin. Roger is one of the world's most trusted strategy advisors. He's professor emeritus at the Rotman School of Management, at the University of Toronto, where he served as dean for five years. In 2013, he was named Global Dean of the Year, and in 2017 he was named the world's number one management thinker by Thinkers50. He's also the author of what many listeners consider their favorite book on strategy, called, Playing to Win. I've gotten a lot of requests to get Roger on this podcast, and I can now see why. This is the most tactical and fascinating conversation I've had on this podcast about developing a strategy, and that is a really high bar.

**Roger Martin** (00:02:24):
It's great to be here, Lenny, thanks for having me.

**Lenny Rachitsky** (00:02:27):
What I want to try to do with our time together is to help people that are on the ground at a company, say, like the product manager, designer, engineer, data scientists, folks that aren't necessarily the CO, or the founder or exec at company get better at product strategy. At crafting a strategy, evaluating strategy, developing a strategy. Because it feels like there's always tons of advice for the leaders of a company, but less for people on the ground doing the thing. And I feel like, luckily, your stuff applies to everyone. So, how does that sound as a lens for-

**Roger Martin** (00:02:55):
That sounds great, and can I tell us a little story to that end?

**Lenny Rachitsky** (00:02:58):
Please.

**Roger Martin** (00:02:58):
So, recently there was a newspaper article saying that, pointing out that 10% of the S&P 500 CEOs, 10% are ex Proctor and Gamble people. It's an amazing number, like a stunningly high, high number. Why would that possibly be? I believe it's because at Procter and Gamble there is a view that people way down the organization, like let's just say the head and shoulders brand franchise leader, who reports to the head of shampoos and conditioners, who reports to the head of beauty care, who reports to the CEO, so at least four levels down in the organization, in the guts of the organization, Proctor understands that that individual, not the CEO, not the global president of beauty care, not the head of haircare, not the head of shampoos and conditioners, the brand manager makes super important strategic choices, and if they don't make them well, the brand does terribly. And so, I believe... And not many companies have enough of that attitude.

**Roger Martin** (00:04:13):
So, I'm a big believer that people down organization have to make really important strategic choices or bad things are going to happen, if they make really great ones, good things are going to happen, and they get trained to be a CEO someday. So, I'm with your thesis. But yours is counter, what I would say is normal. What is most normal is people at the top do strategy, and people down below do something, and it's usually called execution, and I hate that, I hate that term of art, for what it's worth. And so, I think you and I are singing from a bit of the same songbook, even if it's a minority songbook.

**Lenny Rachitsky** (00:04:57):
**Lenny Rachitsky** (00:07:01):
I just want to ask this broad question about strategy, why is strategy so hard? Why are so many people bad at strategy?

**Roger Martin** (00:07:09):
Perhaps the thing that makes it intellectually hardest is that it is an integrative activity. It answers to a bunch of questions that have to fit together and reinforce one another. So, that just makes it a little more complicated, it's not like saying, Lenny, what do you want for lunch? It's saying, Lenny, what kind of diet do you want that'll keep you healthy? And that includes breakfast, lunch, dinners, snacks, a whole bunch of other things that you got to fit together. So, it makes that harder to do intellectually. Another aspect of it is, it is intimidating. Strategy involves making choices to do some things and not other things, and it is often intimidating to say, oh dear, I have to cut these things off, and not do them, and actually make a decision that I'll be held accountable for potentially, or I'll even hold myself accountable for.

**Roger Martin** (00:08:21):
So, that's a second thing. It's harder emotionally, not harder intellectually. And then, there's the training aspect of it, the knowledge aspect of it, which is, what's taught now in strategy in business schools generally sucks. It's gone on a crazy theoretical bend, the strategy academy as a whole has fallen in love with a theory called the resource-based theory of the firm, that silly and nobody uses it out in the world. And so, students are no longer trained on useful strategy. And the other feeder into people learning strategy were the strategy consulting firms, but the strategy consulting firms, the so-called strategy consulting firms, do almost no strategy anymore because it's a little business compared to post-merger integration, digital transformation, and a bunch of other things. So, people aren't prepared educationally for it, and if they're not prepared educationally for it, then they sure don't get prepared for it in companies. It's intellectually challenging and it's emotionally intimidating.

**Lenny Rachitsky** (00:09:40):
On this point, you made about how schools are teaching strategy wrong, how do you describe what the wrong approach is?

**Roger Martin** (00:09:46):
It's a theory that's sort of taken over, called the resource-based view of the firm, that was... In the world of academics, there's a weird place where the number one emotion is jealousy, and people were massively jealous of Mike Porter, who created many of the most important concepts of strategy when he wrote a book, Competitive Strategy, in 1980. And so, they needed to counter him because they just didn't like the fact that he was so prominent, and they decided they would say he was about positioning. So, they called his the positioning school, and they caricatured what he said, which he never did, but they said he said it's all about finding a place that is structurally attractive, and then milking it for everything you can.

**Roger Martin** (00:10:43):
We at the resource-based view of the firm think that strategy is all about building resources. And if you build resources, it's almost like if you build it, they will come. And that's what you should pay attention to. Now, the problem is, any resource that may be useful somewhere is not necessarily useful elsewhere. So, it begs the question, how would you think through what resources to invest in building? What would be a way of doing that, investing here, versus here, versus here? It's silent on that because it's a dumb theory, and it doesn't have anything useful to say, in my view, about that.

**Roger Martin** (00:11:33):
And so, when the students go out and say to their company, I'm going to do a VRIO analysis, or a VRIN, some people just roll their eyes at them, and so it doesn't get used. I've only seen it used, I've been in consulting companies for 42 years, and I've seen it used once. And the trust, as is usually the case, is that it's both. And that's why the model I use for strategies says a lot about where you play is important, that's one of the key questions, and your capabilities are important, and you've got to link those things together. But that's, for the most part in the leading business schools, it's illegal to teach that.

**Lenny Rachitsky** (00:12:20):
Illegal to teach your approach.

**Roger Martin** (00:12:23):
Yes. I couldn't teach my approach at my own business school.

**Lenny Rachitsky** (00:12:23):
What?

**Roger Martin** (00:12:26):
But when I was dean, the most powerful person, the departments, or areas as we call it, like strategic management is an area, they have 100% control over what's taught in strategic management, in finance, et cetera. The dean may be the most powerful person in the school, and I happened to be a super successful dean, so if anything, I was a super powerful dean, and students would beg me, they'd say, "Roger, you have 20 years of experience, you're sort of a famous consultant in strategy, and you've got these theories, please teach a course in it." Nope. I did do extracurricular stuff, where I had practice of one Saturday a year, teaching everything I knew to anybody who wanted to show up. But for credit, I was not allowed. And if you try to get a job at any business... The only exception might be Harvard Business School, maybe. But if you took the 49 other top business schools in America, and if asked the question, do you swear allegiance to the resource-based view of the firm? If you don't answer an enthusiastic yes, you have no chance of being hired, zero.

**Lenny Rachitsky** (00:13:50):
Wow. This academia drama, I had no idea.

**Roger Martin** (00:13:54):
A loyalty test.

**Lenny Rachitsky** (00:13:55):
This is unreal. Makes me even more excited to dive into your world, and your ways of seeing things. Before we do that, just we've had a few other strategy people on the podcast, it might be helpful to frame where they fit in the spectrum that you're describing. So-

**Roger Martin** (00:14:09):
Oh, okay. I may not know all of them, but you give me-

**Lenny Rachitsky** (00:14:12):
I imagine you do. So, we've had a Hamilton Helmer on the podcast, and then Richard Rumelt on the podcast. How do they relate, just for people to get into your stuff versus this dogma?

**Roger Martin** (00:14:25):
So, one of them is an academic, and one of them is a quasi-academic, or non-academic, like me. I was a tenured professor for many years, but don't consider myself an academic guy. I don't think Hamilton does, though I've never asked him-

**Lenny Rachitsky** (00:14:41):
He's an investor now.

**Roger Martin** (00:14:41):
... that question. Yeah. So, he's written a very, I think, useful book that would in some sense fit into my how to win box, right? I say strategies about how to win, and he has a, what I call, a categorical model. Here are categories of things that you should think about. If you're trying to win, here are seven ways of winning, and I categorize him as a non-academic practical strategy guy. Richard Rumelt is a now retired Tuck professor, and he is this hyper competition thing that he does. He also is of the, I'm jealous of Mike Porter kind of thing. So, I've got to say, Mike Porter is wrong, and here's how I am so right, and the competition doesn't take place in the way Mike says, where it's really stable, and whatever, it's really hyper competition, Mike Porter never in his entire life has said competition is stable, he's repeatedly said the opposite.

**Roger Martin** (00:15:54):
But in order to say I'm not like Mike Porter, and in fact, I distinguish myself by saying he's wrong, and I'm right, and so... I don't know. He seemed like a fine guy. I don't think that he, like most business academics, he doesn't know much about business. He hasn't gone out and practiced a lot. He came to our school, and gave a lecture because people loved hyper competition because he would blast Mike Porter, and he gave a example of Proctor and Gamble, I've been consulting at Proctor and Gamble, and know everything about Procter and Gamble, basically.

**Roger Martin** (00:16:42):
And what he said about Proctor and Gamble had zero to do with reality, like zero. It was just completely, utterly, absolutely wrong. And I asked him afterwards, just sort of like, "Why do you say that?" And he said, "Well, I think that's the way it worked." Are you kidding me? So, I'm not a fan of that piece of work. I would say it doesn't fit nicely into research-based view of the firm versus Mike Porter, it's sort of like, here's another lens to take on the world, and I'm going to take that lens, everything's hyper-competitive, and here's how you think about hyper-competition.

**Lenny Rachitsky** (00:17:32):
This is fascinating. I love that we're spending some time on this, this is really helpful to hear the landscape of strategy minds. Okay, let's dive into your worldview, and maybe the simplest way is just, how do you define strategy? What is a strategy?

**Roger Martin** (00:17:48):
Strategy is an integrated set of choices that compels desired customer action. So, the way I think about it is, there's a whole bunch of things a company controls, how many factories to build, how much R&D to do, in what areas, and how much advertising to do, how many people to hire, what to pay them, blah, blah, blah... Those are all the things under our control. What, Lenny, is the thing we have almost no control over? What, if we're a company?

**Lenny Rachitsky** (00:18:19):
What customers do.

**Roger Martin** (00:18:21):
Yeah. We would like them to take some of these out of their pocket and give them to us, can we make them? No, we can't. So, essentially, the job of strategy is to make decisions on the things we do control that will compel, we can't force, but it'll compel them. They'll say, gosh, I should take my hard-earned cash, and whether it's a company or an individual, I should take my hard-earned cash and give it to you, rather than give it to nobody, if there's no product now, or give it to a competitive product. So, the important pieces of it is integrated, it's the whole set of choices that has that one outcome, that it compels desired customer action.

**Lenny Rachitsky** (00:19:11):
Amazing. Okay. And to help people define their strategy, you have something you call the strategy choice cascade, which is basically five questions that you need to answer to help you think trough strategy. Can you talk through this?

**Roger Martin** (00:19:23):
Yeah. And this is the fruits of many, many years of doing strategy work, and trying to figure out, how do you do this thing? Because the fun thing was, I was in the era, I started in strategy in 1981, and that was early in the era, strategy was born in 1963 with the founding of Boston Consulting Group by Bruce Henderson, who was the father of strategy in my view, of practical commercial strategy. So, it was still in the early days, and Bruce Henderson had a theory of how strategy should... What result it should produce for you. Mike Porter then came along in 1980, so '63 Bruce Anderson, and '80 Porter, the two most important figures in the history of strategy, came along and said, a strategy has to look like this. It has to have this as its output. But neither of them was very good on, because again, it was early, they can't do everything right away, of, well, how would you get one of those?

**Roger Martin** (00:20:34):
So, Mike Porter says you have to be either differentiated or low cost. Good. And if you look through competitive strategy as landmark seminal book, to say, how would you do that? There is no answer. And because Monitor Company, the firm I was one of the leaders of for a decade and a half, was founded essentially to commercialize Mike Porter's work, customers would ask us, they'd say, well, we like Mike Porter, and we'd like to have one of those. We can look at ourselves under his framework, and we can say we're stuck in the middle, and he said, that's bad, and he said, good is this or this. How do we think through creating one of those? We didn't actually have an answer.

**Roger Martin** (00:21:22):
And it turned out, because I was the most, I don't know, intellectually engaged on this, and didn't mind the hard work of product development from about 1987, when we discovered we really didn't know that, and clients really wanted us to tell them that. Between 1987 and 1995, I did all this work on, well, how could you develop a process for getting yourself one of those, one of those excellent strategies? And I came to the view that you have to have answers to five questions. You have to have an answer to the question of, what's your winning aspiration? What are you trying to accomplish? Because it'll help contextualize the kinds of choices you could make. Then there's a where to play, on what playing field, or if you're like military stuff, battlefield, are you going to plop yourself down on? You're not going to play everywhere, in every product, at every vertical stage around the world, you're going to pick someplace, and in that place, how can you be either better than competitors, in terms of creating customer value, or lower cost than those competitors?

**Roger Martin** (00:22:38):
To win there, where you've chosen to play to meet your winning aspirations, what capabilities do you have to have that your competitors don't, that would enable you to win that way? And then, what management systems, enabling management systems, do you have to put in place to make sure you build and maintain those must have capabilities to win, where you've chosen to play, to meet your winning aspiration? And so, I came to the conclusion, actually it was in 1995, the end of an eight-year journey, I came to the conclusion those were the five, and you had to do them together, and that is the essence of producing a strategy that compels desired customer action.

**Lenny Rachitsky** (00:23:21):
I want to go through an example of a company, but before we do that, something I think that's important to talk about is, if your book is called Playing to Win, you talked about this idea of you need to play to win, and you argue that a lot of people are just playing to play, they're playing to play the game. I'm guessing most people listening, and most people developing a strategy, don't think they're doing that, they don't think they're just playing to play the game. They think they're playing to win. I'm curious what are signs that you're not actually playing to win?

**Roger Martin** (00:23:49):
It would be mainly signs given to you by customers. So, if you say, we're the most innovative company in our industry, and customers... And let's say the industry distributes through a given channel, and customers come into that channel and they look at the two products and say, I could flip a coin on this one, you are not effectively playing to win. Maybe you thought you were winning, but customers don't think you are better. Or if your competitor lowers their price compared to your price, and you say to yourself, oh my God, if we lowered our price, we would make no money, but your competitor keeps on pricing there, you may think you have the low cost position, but they do, and you have to give them whatever share they desire at that lower price because you can't compete there.

**Roger Martin** (00:24:56):
So, you'll know you're playing to play if you're not aiming to, and accomplishing, having either an offer where Lenny walks into the store, whatever kind of store it is, and says to the person in the store, I want that brand. An example, Lego, one of the companies I've worked with for a long time, great company. It turns out that if you do market research on kids, a store that purports to be a toy store but that doesn't have Lego is not a toy store. They would define it as not a toy. Mom, why are we here? I wanted to go to a toy store. And she said, but it says toys on here. And the kids said, uh-huh. That's an insane brand. That's an insane, insane, insane brand.

**Roger Martin** (00:25:54):
And it has a price premium for anything, over any of its competitors by a long shot. It keeps growing, it actually for most years in the last decade it has had 80 or 90% of the entire category growth is Lego. And so, they're playing to win, to be distinctive in the minds of consumers. But Vanguard has got $9 trillion of assets under management last time I checked. Does it do anything distinctive? Not really. The customer bought, do they have the lowest cost position so they can charge the lowest AUMs? Absolutely. And so, there's different kinds of ways, but you'd know by the actions that customers take.

**Lenny Rachitsky** (00:26:48):
So, essentially, to mirror back what you're saying, to win, there's kind of these two routes you talk about. One is you're the lowest cost option, the second is you're differentiated. You have a differentiated brand, where it's not a coin flip, it's like, oh, I really need that for this reason.

**Roger Martin** (00:27:02):
Yes. Yeah, you got it.

**Lenny Rachitsky** (00:27:05):
And if you can't do that, then the advice you share is go find a different playing field.

**Roger Martin** (00:27:11):
Well, or get out of business, whatever... It's only a matter of time until you're dead, is the sad truth of the matter, which is the competitors in your industry, who are either low cost or differentiated, can essentially jerk you around as much as they want. It's like Southwest Airlines, right? Southwest Airlines was just a tiny little airline that flew Austin, Houston, Dallas, and now it's number one in passenger seat miles in America, and the only airline that's earned its cost of capital over the last half century, all the rest are losing money for their shareholders over time. They have good cycles and bad cycles. How did that happen? Well, it's just the other airlines had to step aside whenever Southwest came into a route, the other airlines just had to say, well, I guess you're going to get your 30 share, or 35 share of passengers on this route, welcome to town. That's all they can do.

**Roger Martin** (00:28:15):
They just have to seed position. And that's what happens, if you play to play, you'll end up just being... It's literally like having a bully who can just shove you, and you take one step back, then they shove you, and you take another step back, and they shove you, and you take another step back. There's no way to protect yourself if you're not one of those two. You cannot bully Vanguard, you cannot bully Southwest, you cannot bully Proctor and Gamble, you cannot bully Lego. That's the way the business world works.

**Lenny Rachitsky** (00:28:54):
And in the case of Southwest, the reason they couldn't be bullied is they were the low cost provider and the other airlines couldn't meet their prices. So, they're like, all right, there's nothing we can do.

**Roger Martin** (00:29:04):
Yep, yep.

**Lenny Rachitsky** (00:29:04):
Awesome.

**Roger Martin** (00:29:06):
So, while I was living in Boston, they entered the Boston to Chicago route, which was a duopoly of American and United at the time, and the price was about, in those days, a $1000 for a round trip because it was a nice duopoly. When Southwest come in, they say, we're going to fly Providence to Midway, not Logan to O'Hare, and it's going to be $200. And they had great advertising, I always loved the advertising that they had when they entered the, they did maps of Boston, and said, if you live in any of these places, kind of the south, the west of Boston, it takes you less time to get from your house to the gate than it does to go to Logan.

**Roger Martin** (00:29:56):
Because at Logan, you park in a parking garage, and then walk a half an hour, and then when you get through security, you still have to walk 20 minutes... Blah, blah, blah. And at Providence, if you've ever flown out of Providence, you can park about 100 yards from the gates. And so, they just had to say, we can't stop that, not everybody's going to do it, but a whole bunch of people are, and there's nothing we can do to stop that.

**Lenny Rachitsky** (00:30:24):
What I love is we're already diving into these five questions. So we've been mostly talking about how we will win, basically, here's your options to win. Low cost provider, or be differentiated, or find a different place to win. Let me summarize the five again. What is our winning aspiration? Where will we play? How will we win? What capabilities must we have in place to win? And what management systems are required to make sure the capabilities are in place?

**Roger Martin** (00:30:44):
Right. You've got it.

**Lenny Rachitsky** (00:30:45):
Okay, cool.

**Roger Martin** (00:30:46):
You're a very quick study my friend.

**Lenny Rachitsky** (00:30:48):
I got some notes here. So, coming back to the how will we win? Because I think everyone's listening to this, okay, cool, we got two ways to win, we're going to be the cheapest or we're going to differentiate, okay. Okay, how do we differentiate? Is there a taxonomy of options that you think about or tell people, what are the ways and options for exploring, here's how we will be different?

**Roger Martin** (00:31:04):
It is mainly understanding customers, as well as you can, and then saying, is there a way to be distinctive against that? And there are lots of ways to do it, but it's tied very closely to the capabilities, which is, if you have a way of winning, you say, my where to play is I'm going to sell pet food on the internet, and my how to win is I'm going to be the best. But it turns out that anybody who can build a website can sell pet food on the internet, and in fact, 20 of them do it almost immediately, and they all go bust. You don't have the capability, so you've got to ask yourself the question, can I serve a particular customer need with a set of capabilities that are going to be hard to replicate by my competitors? They either can't do it, or they won't do it. And both are important questions because sometimes it won't.

**Roger Martin** (00:32:20):
Do you really think Walmart couldn't have built as good a website as Amazon, and at massive scale? I think they could have, right?

**Lenny Rachitsky** (00:32:30):
Yeah, probably. I don't know.

**Roger Martin** (00:32:33):
Did they? They didn't. They said, I hope this online thing doesn't really take off because that would be a pisser because we've got 5,000 stores across America, and we've got all that, and that would be a bummer. And so, they don't do anything for 10 years, giving Amazon the scale, so that Amazon then has this huge scale advantage on this, and network effects, and voila, you've got a competitive advantage that you didn't necessarily completely deserve. You needed the help of the player who stood to lose the most to hope that it wasn't going to happen. Same with Tesla, Tesla got a 10 year headstart, not because the OEMs couldn't, they could have, and of course GM did many, many years ago, create a fully functioning electric vehicle. But they couldn't figure out how the hell you make a buck on it, and so they didn't do it, giving Tesla the ability to establish a brand that people associate with that, electric vehicle equals Tesla, and allow them to jump way ahead, and then have the scale that is hard to hard for others to match.

**Lenny Rachitsky** (00:33:54):
You said something that's really interesting that I think is also really important, which is, you said that just being the best or better is not a solution. You can have a better pet food, you implied that's not going to get you there. Can you talk a bit about that?

**Roger Martin** (00:34:06):
Yeah. You have to answer a second question I guess, which is, here's the way I'm going to be better, and here's the way somebody else isn't going to be able to simply replicate that quickly. One of my favorite businesses, because I was on the board of Thomson Reuters for 14 years, it was Thomson first and then they bought Reuters, so Thomson Reuters. Best business is a business called Westlaw, and it's the dominant provider of online legal searches. So, if you're a litigator, and you're trying to, you're getting ready for a case, and you need to know what are the important precedents for this case, you go on to Westlaw, and put in some search terms using a Westlaw keyword system to help with it, and you get the five cases that really matter. You can Google it, and do the same thing, and you'll get the 500 cases that might matter.

**Roger Martin** (00:35:11):
How does Westlaw do that? Well, for now over 100 years, they've taken every case that's come out of the US legal system, had a lawyer, a Westlaw lawyer, write a head note that summarizes what's in the case, using these keywords so that they were searchable, and today, to do 2024, takes 1500 full-time lawyers. So, if somebody else said, this Westlaw business is incredibly profitable, and it keeps growing, and it's awesome, I'd like to be in that business... All they'd have to do is hire 150,000 lawyers full time, and you'd have to create a numbering system and a keyword system that's different than Westlaw's, and then you'd have to do what Westlaw has done for the past 50 years, which is give it free to law schools so that they teach their students before they even get out how to use Westlaw, and all...

**Roger Martin** (00:36:14):
No probs. That'll be easy, right? Nobody's even tried. Why bother? Life's too short. And that's the kind of capabilities you need to be able to say we'll win by having the searches that make the lawyer's job the most effective. And if it saves them time, it saves them money. And you don't need a huge law library. Law firms used to have these huge law libraries, you don't need one, you need a terminal, or actually, now it's on everybody's PC. And you don't need a bunch of librarians to go and find the cases that you need, they pop up on your screen. That's a great case of competitive advantage.

**Lenny Rachitsky** (00:37:02):
**Roger Martin** (00:38:18):
And Warren Buffett likes that terminology, right? That's what he says, he invests in moats.

**Lenny Rachitsky** (00:38:25):
Yeah.

**Roger Martin** (00:38:25):
Yes, yes.

**Lenny Rachitsky** (00:38:25):
I'll find the quote we used in a recent podcast episode, but he's like, castles with moats. And maybe along those lines, is there a way you think about types of barriers to recreate capabilities? It's like, here's the options we have, is it like... Essentially, the seven powers I think talks about this.

**Roger Martin** (00:38:43):
Yeah. Yeah. That's why I like Helmer, because he categorizes them. And I've got to look into it some more because I haven't studied it to say whether I would concur that there are just seven, or there are more. My suspicion might be that there are more, but there may not be. They may be all clustered, there may be variants that cluster behind those. But I don't, myself, have a categorization scheme that says, here's how you search for the moat.

**Lenny Rachitsky** (00:39:20):
Great. That would be nice. So, here's the quote from Buffet, by the way, "I look for economic castles protected by unbreachable moats."

**Roger Martin** (00:39:27):
Yes, I like that.

**Lenny Rachitsky** (00:39:29):
There we go.

**Roger Martin** (00:39:30):
I like that. And he's smart, he's consistent. Though, everybody makes mistakes, right? And he did too. Solomon Brothers, US Air... Anybody who thinks they can be perfect on strategy is delusional. And so, even the very, very best, like a Warren Buffet, who's outstanding, arguable genius, is going to sort of think, I think this is a moat, and it's going to be ephemeral. But any of us should be pleased to have a track record that would be anywhere close to that, on really identifying moats, because he has.

**Lenny Rachitsky** (00:40:11):
We talked about that with Hamilton Helmer, that every startup deck has, here's our moats, here's how we're going to have barriers to entry, and they're all delusional, rarely is there ever an actual moat, especially in the early stages.

**Roger Martin** (00:40:22):
Yes. Yes.

**Lenny Rachitsky** (00:40:23):
Let's go back to the five questions again, because that's so core to the way you think about strategy. What do you think about using, say this FigJam as an example, as a hypothetical, just to think through questions that they might ask to think about strategy, and I can describe what FigJam is so you [inaudible 00:40:38]-

**Roger Martin** (00:40:38):
Sure, sure. I do not know that product-

**Lenny Rachitsky** (00:40:40):
Okay. It's basically a visual whiteboard collaboration tool, where people can put in sticky notes, and put little mocks, and kind of play around with all the cursors.

**Roger Martin** (00:40:46):
Oh, okay.

**Lenny Rachitsky** (00:40:47):
And so, it's for brainstorming, and ideation, and things like that, and laying out concept.

**Roger Martin** (00:40:52):
Gotcha. Okay, that would make sense for Figma.

**Lenny Rachitsky** (00:40:54):
Figma. Yeah, exactly.

**Roger Martin** (00:40:55):
Right. Okay. So, you'd asked the question, what are we trying to accomplish? Are we attempting to create something where nothing digital exists, people do this in pen and paper, and so we're trying to invent a category and then be transformative by making the user experience better? Is that what we're trying to do? Or are there players already doing this and they're just not doing it very well? You'd want to say, well, what are we trying to accomplish? And I don't spend a whole lot of time on that because you got to toggle back and forth between those five questions, but you have to have a reason for searching in a given space for where to play, how to win. What do you think their reason for thinking FigJam is worth investing in is? What do you think it is? Is it white space, or is it crummy offerings in the market currently?

**Lenny Rachitsky** (00:42:03):
If I had to get to it, I think they're trying to expand their market and they have a stronghold in design tooling, and there's this adjacent market for product teams broadly to be using Figma more. And there are existing tools similar to that, that are good.

**Roger Martin** (00:42:21):
Okay. So, I don't love it to start.

**Lenny Rachitsky** (00:42:25):
Say more.

**Roger Martin** (00:42:26):
So, there's a big market over there, we'd like to get some, is a terrible reason in my view. The reason should be, customers are bereft, customers are lacking something that we can provide. This is why I hate... And most entries by foreign companies into China, they get their faces shot off. And the reason is the rationale is, it's big, we could get some of that. So, I don't love it, for starters. And I'm not saying that that'll guarantee failure, but if somebody gave me a review of a pitch deck for that, I would not invest [inaudible 00:43:14].

**Lenny Rachitsky** (00:43:13):
Well, I imagine you can also frame it in other terms, like our customers are demanding more ways to work within Figma with their teams, and there's these-

**Roger Martin** (00:43:22):
Yeah. So, that would be a better one. And you're speculating, I've asked you to speculate, so we don't know. But I like that one better, which is, what's our aspiration? It's to satisfied core customers, who love what we do, but think it's too narrow, that if we could broaden that for them, into this market, our customers would be very happy.

**Lenny Rachitsky** (00:43:47):
That is really cool. And so, you want to frame it in the words of how customers would benefit, essentially.

**Roger Martin** (00:43:52):
I just think those tend to be stronger, strongest, if there's a link. Because remember, what is strategy about? Compelling desired customer action. So, everything ties back to that. So, then the where to play would be, you just want to say, okay, what customers are we talking about, or what parts of our current customers that we don't serve are we attempting to serve with that? And with what product? Is it a finished product? Is it a component of a product? Through what distribution channel would we sell this? This is another self-serve type product. I think Figma is mainly self-serve, right? And so, you choose that where, and then say, how can we solve the problem?

**Lenny Rachitsky** (00:44:42):
Before we get to that, before we get to that real quick-

**Roger Martin** (00:44:44):
Oh yeah, yeah, yeah, please. Please.

**Lenny Rachitsky** (00:44:45):
So, the things you mentioned there is who specifically are the customers? So, in this case it'd be like product managers, engineers, and other functions, and then there's the distribution channels, how we'd actually get to them?

**Roger Martin** (00:44:56):
Get to them, yeah.

**Lenny Rachitsky** (00:44:56):
And then, what other questions are there within this where we will play?

**Roger Martin** (00:45:02):
To what extent is it a finished product or a component? Because sometimes it could be, we'd like to supply this component that could be integrated into other people's products. That's what Apple apps are, right?

**Lenny Rachitsky** (00:45:16):
Got it.

**Roger Martin** (00:45:16):
We don't sell them an iPhone, we sell them a component within the iPhone, a customer's iPhone, is that what we're doing here? Because then you have to ask questions about, well, how does it fit in with the rest?

**Lenny Rachitsky** (00:45:31):
So, the where also implies where in the product it lives? Where-

**Roger Martin** (00:45:37):
At what vertical stage? Is it an integrated product, where it's the whole thing from soup to nuts? Is it some upstream pieces that some people downstream? Do we take pieces from other people and assemble them? So, we're the integrator? Those are all important where to play choices, from my view, because those make a big difference. Like Four Seasons chose... Four Seasons the hotel company, luxury hotel, chose a completely different choice on the vertical stage where to play, back in the 80s, they said we're going to get out of real estate development... So buying land and getting it zoned for hotels. We're going to get out of construction, building hotels. We're even going to get out of the business of owning the land or the hotel, so that we can be awesome at hotel management.

**Roger Martin** (00:46:35):
Rich people, like Michael Dell, and David Thompson, and Bill Gates will own the hotels, as an investment, and they will be happy to have Four Seasons brand on their hotel, and we will charge a management fee. That is a where to play choice. Even though somebody could say, well, you're a luxury hotel, you're like the other luxury hotels who serve luxury customers at a high price. Oh no, no, no, no, no, they do it with a stack this thick, we do it with a stack this thin.

**Lenny Rachitsky** (00:47:07):
So, it's like a value chain question. Where in the value chain are you going to play?

**Roger Martin** (00:47:13):
Value chain. Yeah. Where in the value chain? That's exactly right. And everybody has value chain questions. They often complain, after the fact, like all the apps complain about what cut Apple is taking, but they made a choice, a value chain choice. We are going to design something that will appear on an iPhone, or an Android device, if it's that case, and then good luck to you. You can complain like crazy that they're taking so much of it, and this is unfair, and they've got to duopoly... Yeah, but you guys cooperated 100% in building that. 100%, never complained about it, until you wanted a bigger piece of the pie. That was a vertical stage, a value chain stage, that you chose, willingly. Nobody forced you to do it.

**Lenny Rachitsky** (00:48:05):
And Apple's not playing ball, giving it back too easily.

**Roger Martin** (00:48:10):
No. No. And do I love just how controlling and everything Apple is? Do I? No, but would I say, oh, those poor apps, right? Yeah, no, get your own distribution channel, buddy.

**Lenny Rachitsky** (00:48:26):
Cold blooded.

**Roger Martin** (00:48:27):
Yeah.

**Lenny Rachitsky** (00:48:28):
Okay, so we've talked about the winning aspirations, so for FigJam, it would be satisfy customers that are trying to work with their team in these different ways, and make sure they're staying, make sure they get what they need out of Figma, versus go maybe to other tools. And then, where will we play? Let's say, engineers, product managers is trying to target them, distribution through the existing product, and so it's like a feature of the existing product. And then, it's how will we win? How do you think about that?

**Roger Martin** (00:48:57):
Yeah, yeah. Well, you ask the question, how can we solve... Well, how can we either solve that problem at a much lower cost, so we can always be a sharper price point than them? So, if there are solutions, but they cost 50,000 a user because their costs are 30,000 a user, we can do this for $15 a user, and so we can charge $100 per seat, and absolutely annihilate the competitor by figuring out a less costly way to do it. Or there are other selections, but they make the user do all these things, and it's ponderous, and it takes a long time... We have shortcuts, we use AI to, you just say a few words into it, and they say, oh yeah, I know what you mean, and here it goes in the workflow.

**Roger Martin** (00:49:54):
Or we're more integrated, like Thomson Reuters, the company I was on the board of, our advantage was we were better integrated into the workflow. You didn't have to get out of your workflow to go use this product, and then you get back in, we just said, what's your workflow? Oh, well, integrated. Is it better integrated into their workflow that makes their life easier? It would be questions, possibilities like that that I would be asking. Essentially, you've got to have a theory there, of how are you going to be better or lower cost.

**Lenny Rachitsky** (00:50:34):
On the lower cost front, I think generally the advice is you don't want to go that route, that's a very difficult route. What's your thinking of just when to go that route that you might actually win at lower costs?

**Roger Martin** (00:50:45):
That's not advice I give. I think they're both completely legitimate strategies. They have implications. So, if you want to be the cost leader, it is rare that you can be the cost leader without having dominant scale in the territory in which you're operating. So, if you want to be a niche cost leader, good luck to you, that's almost never going to happen. So, Vanguard had to make a race to, we're going to do index mutual funds, and it doesn't exist now, we're going to do it and we're going to get gigantic, and we can't let anybody get close to us in size because we want to have the lowest cost position. And so, they are the world's biggest mutual fund company, and you have to do that, and same with Southwest, to really make that model work, they had to keep expanding and expanding to get bigger.

**Roger Martin** (00:51:45):
M&M Mars... It takes an enormous amount of commitment to say, we're going to go, and we're just going to keep charging ahead on this. Whereas, in differentiation, I think you can differentiate sometimes at lower scale, and build yourself slowly towards higher scale. But the business world is just getting so much more scale sensitive. When you think about the costs of differentiation, it's often spending on branding, spending on R&D, R&D innovation. Those two are of the most scale sensitive elements of anybody's cost structure. And so, being a niche-y differentiator is getting harder and harder in my view.

**Lenny Rachitsky** (00:52:35):
I think it's also important to say, either path is very hard, it's very hard to build a business that makes money and is profitable and survives just broadly.

**Roger Martin** (00:52:43):
Yes, yes, I agree.

**Lenny Rachitsky** (00:52:44):
And you're not going to have this formula of how to win, okay, we got it. We got a big business.

**Roger Martin** (00:52:49):
I agree. I agree. And that's why, if I looked at 100 strategies of major companies, I'd say I didn't like 90 of them very much.

**Lenny Rachitsky** (00:53:01):
And then, the other nine out of 10 probably look good, but also don't work out.

**Roger Martin** (00:53:06):
Yes. Yeah, no, that's true. There's lots of spaghetti thrown at lots of walls in the world of business.

**Lenny Rachitsky** (00:53:14):
Yeah, capitalism.

**Roger Martin** (00:53:16):
Yes.

**Lenny Rachitsky** (00:53:16):
Okay. So, now we're at the capability step of trying to figure out what capabilities you need to win. Can you talk about, say with FigJam, what are the sorts of things you think about here?

**Roger Martin** (00:53:26):
Well, I guess I'd ask myself questions, like, is there a learning curve to this, where we could have better capabilities because we started earlier than anybody else, and have more essentially cumulative experience? Is there a way that we've figured out how to serve customers that make them feel tended to better by us? So, we've got helpline... We figured out how to do the helpline, because if it's self-serve and that's how they get the product, and then they've got issues with how to use it, they feel that we're just better. We're the best of all their providers at that. How to win is a theory of how customers are going to perceive us better, if we're differentiated. And then, it's what capabilities would we have to have to make that theory come true, rather than just be a wish. So, if we want them to feel like we're the easiest to deal with, we have to have capabilities to do that.

**Roger Martin** (00:54:47):
It's just like again, Four Seasons said the reason they're by far and away the most successful, profitable, best in all fronts, luxury hotel chain in the world... Biggest, best, most profitable, best employee rankings, best guest rankings, all of those. Well, their how to win was they said, people, if you talk to people who are in luxury hotels, they'd rather not be there. You'd say, wow, they're in the lap of luxury, why would that be? Where do you think they'd prefer to be, Lenny?

**Lenny Rachitsky** (00:55:20):
At home.

**Roger Martin** (00:55:21):
Yeah. Dominantly at home, for their segment, which was high-end business travelers. They've traveled, they've stayed in one luxury hotel too many 20 years ago. And so, we're going to have luxury defined as not grand architecture and decor and [inaudible 00:55:38] service, but rather, we're going to define it as a service that makes up for what you left at home or at the office.

**Roger Martin** (00:55:44):
Because people would rather be, if they have to not be at home, they'd rather be at the office than in a hotel because they can be more productive. So, we need capabilities, we need staff that can deliver on that capability. What's the problem, for that? The problem is turnover in the hotel industry globally is 80% a year, which means that the average person you meet, the average staff person you meet in the average hotel, is on their way to a 16-month career at that hotel chain. So, how do you deliver that really cool special kind of service with that? The answer is... And now I'm skipping ahead to enabling management systems.

**Roger Martin** (00:56:26):
You have to have a different way of recruiting, a different way of onboarding, a different way of career development. And if you do all of those things, you end up with a 10% turnover rate, so that your people are there 10 years on average, and you can then get them trained up to deliver that kind of service. So, that's the capability that you build, and the people, to be able to take more decision-making at a lower level, and treat the guests in a customized way that makes them feel that this wasn't by the book, some rule book, that this person just said, no, this is a good solution for my guest.

**Lenny Rachitsky** (00:57:01):
It's interesting that these capabilities and even the management systems, which is step five, relate to your moat. Which is the thing you need to achieve, also, ideally is the thing that other people, it'll make it hard for them to do.

**Roger Martin** (00:57:14):
Yep. So, you're exactly right. You can call if you want, how to win, moat, right? Definition of your moat. And so, capabilities and management systems are what both build and maintain the moat, and the maintaining is an important part because if you are the most successful, people are going to say, I want to do that too. But here's where there's this modern, unfortunately, bull shitty thing that says, oh, competitive advantage is fleeting in this modern hyper-competitive world, and you can't have long-term advantage anymore. And I just say, oh, I see. So, Four Seasons, I guess that isn't very long-term, that has only been 45 years now, since they... No, 35 years I should say. Don't exaggerate. Since they went to that strategy. Oh, and Tide. So, 77 years isn't a long time, I guess either, because they've been the number one detergent for 77 consecutive years. I guess you're right, it's fleeting.

**Roger Martin** (00:58:16):
It's not. But what makes it fleeting is when you have one thing, and one thing only. So, let's say you build the biggest polyethylene plant in the world, near a good feedstock source, and you have the low cost position, what's somebody else going to do when they see how much money you make doing that? Build a polyethylene plant beside yours, twice the size, and then you're toast. Why? Because the competitive advantage was too simple. But at Four Seasons, you got to sell off all your hotels, you got to fire all the people involved in hotel development and everything, and actually, the people in the business like doing that, you have to essentially get rid of your entire staff, start from scratch, paying them more than you do now by far, giving them more career security, giving them more training, giving them better uniforms, whatever, spending 10 times as much hiring them, with the hopes that maybe someday you'll be able to produce the kind of services Four Seasons does.

**Roger Martin** (00:59:24):
The competitors basically say, life's too short. Do they give up and die? No, there are other great chains, Mandarin Oriental, my wife loves staying in Mandarin Oriental, even more than Four Seasons often. But they've not said, we will replicate Four Seasons, they've said, we'll pick a different where, and a different how, and that's, in the end, what you want. Is rather than complete overlap, where you've got concentric circles of people picking the same where, you convince people to pick different wheres. That's why people sort of say, Roger, how to win, that's so impolitic, because you're producing losers, and then there's victims, and all that. There's oppressor and oppressive. It fits in the modern dialogue. And I say, no, what I want to do is encourage them to find someplace else to prosper, rather than smash on top of us.

**Roger Martin** (01:00:27):
And so, if you have completely different capabilities and management systems, it'll encourage people to choose a different where to play, how to win. If your capabilities and management systems are very similar to your competitors, and you're succeeding with your chosen where to play, how to win, what are they going to do? They're going to drive straight to your where to play and try to win exactly the same place and wreck your market for both of you. That's what you don't want. And the more complicated, in some sense... I shouldn't use complicated. The more nuanced and multifaceted your capabilities and management systems are, the more likely they're going to say life's too short. That's what everybody says about Southwest. So, if you're the only airline in the United States that's earning its cost of capital for 50 years, wouldn't you say, gee, I'd love to be like that? But what does it mean?

Well, it means selling off most of your aircraft, so that you can have only one kind of aircraft, 737. Tearing up your entire root structure, your entire hub and spoke structure, and make it point to point. Changing your complete labor relations strategy, from fighting the unions to paying them a lot, as long as they're highly flexible. People think Southwest is non-union, it's not unionized [inaudible 01:01:55], but they do different... You have to essentially fire all your travel agents, and convince your customers to book online, by themselves, to save more money. Life's too short, it's just too short. So, they try things like Continental Light, or Ted, that do half the things that Southwest does, and then you're what? A crappy Southwest. So, to me, that's the ultimate. The ultimate is, it's like the ultimate weapon is the one you never use. The ultimate way to compete to win is to never actually be forced to compete.

**Lenny Rachitsky** (01:02:38):
Wow, that's a great quote. This story about Southwest makes me think about Hamilton Helmer's counter-positioning, I don't know if you've heard that term, but basically, you position yourself in a way where the competitor can't do the thing that you're doing because of the way their business is already structured.

**Roger Martin** (01:02:57):
Ah, that's sounds right. The can't.

**Lenny Rachitsky** (01:03:00):
Yeah, can't.

**Roger Martin** (01:03:00):
The can't thing. Awesome. Yeah, and Mike Porter, and he may quote Mike on that, Mike was very big on that. He said, it's fault lines. You're trying to find fault line, where it is so painful for your competitor to come across that fault line, into your side. And so, a great example of that would be Olay, at P&G, and it's in the book, when we did the repositioning of that. The competitor that could have killed us, absolutely killed us, was Estée Lauder with Clinique. If they would've brought Clinique into the mass channels... Because we were doing a Clinique kind of thing, in the mass channels, rather than the prestige. Prestige is like the first four of the department stores, which [inaudible 01:03:51] or Sephora, or Ulta. If Estée Lauder would've taken their Clinique brand and brought it into mass, they would've killed what we were doing. Simple as that.

**Roger Martin** (01:04:05):
And in fact, Clinique was the biggest brand in all of skincare, we became the biggest brand in all of skincare, and they didn't do it. Why? Are they idiots? No, they're not, Estée Lauder's super smart. But Estée Lauder also has Bobby Brown, and Mac, and the Estée Lauder, its own brand, and a half a dozen more, all in prestige, and the prestige channel, if they'd have taken Clinique, and taken it over into mass, would've done what? Shot them in the face. Killed them, right? They would've been just apoplectic. And so, Estée Lauder had to stay... If that's counter-positioning by Helmer's terms. They had to stay there. Was that stupid? No, they're still, with all of their brands combined, the biggest in skincare. But Clinique has lost leadership to our brand that they would've considered kind of nothing. Oil of Olay became Olay Olay ProV, Regenerist, all of these higher priced products than they could ever imagine being sold in the mass channel. But our biggest friend was, in some sense, their distribution channel, which would've killed them if we... Literally. They would've just punished them so, so, so bad that they didn't do it.

**Lenny Rachitsky** (01:05:38):
I love that I'm learning all this strategic thinking about makeup and skincare, I also love just the idea of you leading strategy for skincare and makeup brands.

**Roger Martin** (01:05:46):
Yeah, no, I got Proctor & Gamble into color cosmetics.

**Lenny Rachitsky** (01:05:51):
So funny. [inaudible 01:05:51] love that. I don't know if you're following the AI Google stuff that's happening, where there's search engines competing with Google by just answering the question versus giving you a bunch of blue links?

**Roger Martin** (01:06:02):
Yes.

**Lenny Rachitsky** (01:06:02):
And there's this question of, we'll Google Shift because people seem to really like it, versus they're making trillions of dollars running ads when they share blue links, and it's this super innovator's dilemma position they're in.

**Roger Martin** (01:06:14):
Yeah, no, no, I am very interested in what's going on in AI, and I'm writing some stuff on that. But it's hard. I've seen the inside of this for many of my clients, it is super hard when the guts of how you make money is under threat, and you just don't want that thing to go away. The big auto OEMs make money selling cars with ice engines, it's simple as that. And there's no surprise, they've been doing it for 100 years, they're way down the learning curve, they have scale, blah, blah, blah, blah, blah. And so, these damn electric vehicles are kind of no fun. And so, the Google situation you've described, I think it's similar. But my general advice is always the same, which is, it can take a while, but in the end the customers will triumph. And A.G. Lafley, my friend who I co-wrote the book with, great CEO, was very good on this. And one of his big customers, big [inaudible 01:07:27] customers came to him and said, if you don't stop cooperating with Amazon, we're going to de-list all your products.

**Roger Martin** (01:07:35):
Big threat. Big threat. And A.G. just said, "If customers want to shop there, we just can't not be where our customers want to shop. And so, if you feel you need to do that, you're going to have to, because customers want to shop there, and we are not doing that. But what are you offended by, that we're doing there?" And they said, "Well, you are allowing them to ship products to their customers from your distribution centers." And A.G. just said, "Yeah? Do you want to too?" And they were like... And he just said, "We don't do anything special for them that we wouldn't do for you, they ask for things that you don't ask for because of their business model. But if you come to us with ideas of how we can help you serve our joint customers better, we're all in. But we're not boycotting a place that customers have shown they want to shop," as long as it's an honest, if Amazon was sleazy and dishonest or whatever, but an honest, upstanding place where customers can get our products.

**Roger Martin** (01:09:06):
And so, that's where I'm at, which is, you may have to scramble like hell, you may have to suffer from economic downturn, but if you think you can... I always think of it, I don't know if you did this as a kid, Lenny, but when we went to the beach on family trips, we would, I have four brothers, we would build... Plus then a baby girl later. But we would build sand castles and try to hold back the tide, this would be in Florida or California, and we'd try and hold back the tide, and we'd come the next morning to see if our castle... And it was always gone. It's gone. But we'd keep trying doing it, and it's sort of like, you can't hold back the tide. Maybe you can for a while, but you can't forever. So, you just have to figure out where are the customers going. And if they're going someplace...

**Roger Martin** (01:10:07):
And Vanguard did this, Jack Bogle, the late Jack Bogle, he died now, a couple of years ago now, he did not like ETFs. He said ETFs are not as good for customers as mutual funds. And he had all sorts of good reasons for that, but the index ETF business started to grow like crazy, and Jack had to relent and say, I don't think it's good for them, but they want it, and so they went whole hog into it, and are the leading index ETF provider, as well as the index mutual fund provider. But for a while they weren't, but he realized it was the tide, and he was attempting to hold back the tide. So, good luck. Good luck to you on that. So, to me, if Google thinks they can, because of their power and the fact they've got a multi-trillion dollar market cap, and they've got a near monopoly position on something, they can hold back the tide.

**Roger Martin** (01:11:09):
You see, the water finds a way to flow. Think about Microsoft and its monopoly on PC operating systems, or it's near monopoly on PC operating systems. And I would argue that they abuse that kind of monopoly. I often asked people, when's the last Windows update that got you as a customer excited?

**Lenny Rachitsky** (01:11:38):
Yeah, Windows 95.

**Roger Martin** (01:11:39):
The answer, I think is really clear, Windows 95, right?

**Lenny Rachitsky** (01:11:43):
Yeah.

**Roger Martin** (01:11:44):
Because that's when he took the graphical user interface that he bought rights to from Steve Jobs and put it on, so you didn't have to do backslash backslash... You could actually point and click. That's a long time ago, last time I checked, that's now almost 30 years. And so, they just abused their customer. Is their share of PC operating systems much lower than it was then? No. But that's not the right measure of share. The right measure of share in my view in that industry is your share of minutes spent staring at a smart screen. That's what the share of operating systems that you should care about. And so, what kind of smart screens do people now stare at most? Most? And what other one do a lot of people stare at who really like them? Pads. And so, if you added up all those and said, what do you think... So, what's their share of smartphone operating systems? Microsoft?

**Roger Martin** (01:12:55):
Last time I checked it was 0.4 of 1%. Yeah, so effectively zero. How about pads? Apparently it's 4% there. So, their share of people staring at a smart screen has plummeted. Plummeted. Why? Because water finds its own level. People said, there are these other ways of getting around this, and I'm going to take those ways. And I think the degree to which people use their smartphone for more things, as the function of that smartphone is advanced so much faster than your PC operating system, because more people are using it. So, that's what I'd say to Google. I don't care how painful it is, water flows downhill, the tide comes in, and you cannot stop that, even if you're one of the most powerful three firms on the face of the planet.

**Lenny Rachitsky** (01:13:59):
And it may take time, but eventually the customer tide pulls, that's a, I think that's really important.

**Roger Martin** (01:14:04):
But yeah, start now. If you don't start now, it's too late.

**Lenny Rachitsky** (01:14:11):
Yeah. I want to end with one very tactical question for people, that may feel overwhelmed, they're just like, oh my God, I don't know what we're going to do, this is so hard, all strategy stuff. You have this really cool idea called betterment, I think you wrote a media post about it, thinking betterment over perfection. And it gives you a first step of like, okay, here's a way to move forward. Can you just talk about that approach?

**Roger Martin** (01:14:32):
So, for me, strategy, this thing called strategy, with people, oh my God, oh my God, how am I going to do strategy? Whatever. I just think of it as a problem solving tool. And what problem should you attempt to solve? You should attempt to solve something where your current outcomes that you're getting are lower than the outcomes you wish you were getting. That's what I call a gap. There's a gap between those two. And you should just conceptualize it as, your current outcomes are a natural result of all the choices you've made interacting with the competitive environment. And so, you should reasonably assume that probably those outcomes aren't going to get a whole lot better, because they are the way they are for a good reason. So, you're going to need to make a different set of choices to make that gap go away. That's what I would work on.

**Roger Martin** (01:15:31):
I would just ask the question, what is the single most painful gap currently that I'm facing? Customers used to do this, and they're doing this, I can't find this kind of resources, our distribution channel has abandoned us... Whatever is the most painful thing, and then just tackle that. And say, what different choices could I make? And I'd say, use my cascade. Could I change where I'm playing? Could I change how I'm winning? Could I change my capabilities? Could I change my manage systems, in order to achieve a different aspiration? And so, don't try to solve the problems of the world, or even all the problems of your company, that's perfection. Betterment is making that gap go away. And guess what happens if you make that gap go away? You can turn your attention to the next gap, and the next gap, and the next gap.

And if you do that all the time, you're always working on the next gap, the next... They'll get smaller and smaller over time. I don't know if this is a great analogy, but I was dean of a business school for 15 years, the guy who won the professor of the year award more times than anybody else, and did it sort of teaching tough courses, often executive MBA courses, and the like, had a simple formula for doing it. Which is, he taught second-year courses, and second-year courses happened to be 13 two hour lectures, or sessions, [inaudible 01:17:10] or another. He just polled the students on what they thought of each session as they went along, and regardless of the reason, regardless of anything else, simply chopped number 13 every year.

**Roger Martin** (01:17:26):
Because in some sense, it's the biggest gap, the gap between what the customers, students, wished for, and were getting. And he would just replace it with something. He would try something else, and replace it with that. And you'd say, and that gets you professor of the year every year? And the answer is yes, betterment. Because if you're teaching for 25 years and you just keep doing that every year, every year, the course keeps getting better and better and better and better and better and better. So, betterment, it doesn't make purists feel awesome, but I'm not here to make purists feel awesome, I'm here to help people get better.

**Lenny Rachitsky** (01:18:21):
This makes me think about your water metaphor too, of just water eventually finding a way through. [inaudible 01:18:26] iterating, [inaudible 01:18:27] things better.

**Roger Martin** (01:18:27):
Yeah, lots of what I think about in strategy is natural, if you will. I try to ask, how does the world generally operate, and is what we're doing consistent with the way the world generally operates or not?

**Lenny Rachitsky** (01:18:42):
Roger, this was so much fun, we covered everything I was hoping we'd get through. I think we're going to help a lot of people with the way they think about strategy. Is there anything else you wanted to just leave listeners with, or say before we wrap up and let you go? We covered a lot, so there may not be anything left.

**Roger Martin** (01:18:58):
Well, on strategy, there's one piece of advice I'd say. People often ask me about people who are natural strategists, or they say, I'm not naturally good at that, I'm more of an operational guy or gal. And what I tell them is, I have never met this mythical beast called a great natural strategist. And they often throw back in my face, Lafley. They say, look, Lafley, he was known as a strategy genius. And I say, yeah, but when I interviewed him in depth about his background, for a paper I was writing, what I discovered was when he was in the Navy, as a whatever, I don't know, probably 25-year-old in the Navy, he had a job where he had to think about strategy, and was testing things out, and doing things, and the like. And then, I realized that he had been practicing strategy for decades before he became the CEO, decades.

And so, he just had more reps when he became CEO than almost anybody else that I've ever met. There's another guy, [inaudible 01:20:15], ex-CEO, now he's gone on to a higher level of Lego brand group, would be similar. So, great strategists that I have met have all one thing in common. They just practice. And anybody, there's no such thing as a person who is willing to practice strategy, who will end up saying, I'm operational, I don't do strategy well. Which links to our last thing about betterment. Just work on making different choices to solve problems. Not problems that I say, I'm not going to define your gap, it's one that you feel in your heart, I wish this were better. Work on it, if you do that, you'll be a great strategist. So, be encouraged, don't be discouraged. And the worst thing to do is to wait. People say, well, I've got all these operational concerns right now, and then I'll get to strategy later. You'll never amount to anything. Nobody who says that ever amounts to anything.

**Lenny Rachitsky** (01:21:22):
Wow. I love this, I love how empowering it is, I love the real talk. Roger, you're awesome. Thank you so much for being here.

**Roger Martin** (01:21:29):
You're most welcome. Thank you for making it a fun journey for me.

**Lenny Rachitsky** (01:21:32):
I learned a ton, and that's always a good sign, and it was a lot of fun.

**Roger Martin** (01:21:35):
Well-

**Lenny Rachitsky** (01:21:35):
Thanks, Roger.

**Roger Martin** (01:21:36):
Good.

**Lenny Rachitsky** (01:21:37):
All right. Bye everyone.

**Lenny Rachitsky** (01:21:39):
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.

---

## [5/16] The ultimate guide to performance marketing | Timothy Davis (Shopify)

**Lenny Rachitsky** (00:00:00):
Is performance marketing just something every company should be doing?

**Timothy Davis** (00:00:02):
Hot take, paid is for everyone. If you look at the way each platform is doing, Google, you have to scroll pretty far down to get to an organic listing. Meta, it's almost a pay for play now.

**Lenny Rachitsky** (00:00:13):
When you take over for an agency at a company, you crush their performance within a month. I'm curious to what you find they are doing wrong?

**Timothy Davis** (00:00:20):
Instead of thinking about being on top of the page, and that's like ego marketing, I want to be number one. I want to be there all the time. It's about showing to the right person as often as possible.

**Lenny Rachitsky** (00:00:31):
Any other tips for people just to experiment with the platform?

**Timothy Davis** (00:00:33):
Each platform is different. The user behavior is different. Make sure you're not too hard on yourself if it doesn't work. It's okay to fail because we're either winning or we're learning.

**Lenny Rachitsky** (00:00:45):
Today, my guest is Timothy Davis. Timothy has led performance marketing for all of Shopify for the past two and a half years, and as a consultant has helped companies like Pinterest, LinkedIn, Redfin, and Eventbrite kickstart and scale the performance marketing teams. In our conversation, we get incredibly tactical on all things to performance marketing and paid growth, when to start investing, how to run signs of life tests on each platform, what platforms to investigate and what platforms to bet big on, what types of companies are best suited to invest big on paid growth whether you should invest pre-product market fit or not, what agencies often get wrong and what to look for in your investment when you're just getting started? Plus, what your first three hires should look like, tips for which platforms are most interesting right now, a peek at Timothy's actual reports that he runs to judge performance, if you're watching this on YouTube and so much more.

**Timothy Davis** (00:02:04):
Yeah, thanks for having me. A long time coming.

**Lenny Rachitsky** (00:02:06):
Yeah, I'm really excited we're finally doing this. I actually posted on Twitter for people to suggest questions for this topic and there's just so much interest in what we're going to be talking about, which essentially we're going to be diving deep into all things paid growth, all things performance marketing. By the way, I have a cold. For people, if in case you wonder why I sound a little weird, but the show must go on. I want to start with just setting a little context for folks that aren't super familiar with performance marketing and paid growth. When we talk about performance marketing/paid growth, first of all, are those two terms interchangeable to you? And second of all, what falls under the umbrella of performance marketing/paid growth?

**Timothy Davis** (00:02:42):
Paid can be a lot of things. It can be online, it can be offline, it can also even be affiliates. Typically, when I talk about performance marketing, it's about online only, but you could argue offline could be performing and affiliates could be performing and stuff like that. They can be interchangeable, but I would recommend if you are talking about it, to specify which one you're talking about. Because when you do say paid, because I'm in the industry, I would just, "Oh, they do Google Search and they do Meta and they do things like that." But if you do offline and you just say paid, we may be talking about things, but missing each other on two ships passing in the night. So I think historically, people, when they have said paid growth, have been fully focused on just online.

**Lenny Rachitsky** (00:02:43):
Just online. Okay. Got it.

**Timothy Davis** (00:03:31):
But I would argue in the last couple of years, you could definitely roll offline into that conversation as well.

**Lenny Rachitsky** (00:03:38):
Okay. So performance marketing, when someone hears that term, it's essentially marketing that you can measure the performance up.

**Timothy Davis** (00:03:43):
Correct. Yes, nail on the head.

**Lenny Rachitsky** (00:03:46):
**Christina Gilbert** (00:05:07):
Yes. Thank you for having me on, Lenny.

**Lenny Rachitsky** (00:05:09):
What is the latest with OneSchema? I know you now work with some of my favorite companies like Ramp, Vanta Scale and Watershed. I heard that you just launched a new product to help product teams import CSVs from especially tricky systems like ERPs.

**Christina Gilbert** (00:05:25):
Yes. So we just launched OneSchema file feeds, which allows you to build an integration with any system in 15 minutes as long as you can export a CSV to an SFTP folder. We see our customers all the time getting stuck with hacks and workarounds, and the product teams that we work with don't have to turn down prospects because their systems are too hard to integrate with. We allow our customers to offer thousands of integrations without involving their engineering team at all.

**Lenny Rachitsky** (00:05:47):
I can tell you that if my team had to build integrations like this, how nice would it be to be able to take this off my roadmap and instead, use something like OneSchema, and not just to build it, but also to maintain it forever.

**Christina Gilbert** (00:05:58):
Absolutely, Lenny. We've heard so many horror stories of multi-day outages from even just a handful of bad records. We are laser-focused on integration reliability to help teams end all of those distractions that come up with integrations. We have a built-in validation layer that stops any bad data from entering your system and OneSchema will notify your team immediately of any data that looks incorrect.

**Lenny Rachitsky** (00:06:18):
I know that importing incorrect data can cause all kinds of pain for your customers and quickly lose their trust. Christina, thank you for joining us. And if you want to learn more, head on over to oneschema.co. That's oneschema. co.

**Lenny Rachitsky** (00:06:32):
Is performance marketing just something every company should be doing or is there certain business models where it's like, "No, you're probably going to grow through other channels mostly like SEO or sales or word of mouth.

**Timothy Davis** (00:06:42):
Hot take. I would say, paid is for everyone. If you look at the way each platform is doing, Google introducing AI, plus with paid taking up the first four spots, you have to scroll pretty far down to get to an organic listing. Meta, it's almost a pay for play now. You have to do promoted posts for people to even see your content. I would say it does depend on the industry you're in. If you're say, leaning heavily into influencer marketing, that is still a paid component. You may not be doing Meta ads, you may not be doing paid search, but that is a paid component. But I would say at baseline, everyone should be doing paid search. The way I usually explain it to people is paid search is user driven. You have to type in a relevant keyword for your ad to show.

**Timothy Davis** (00:07:36):
Anything else is more disruptive media. You're on Meta and you're looking at pictures of babies and cats, and then all of a sudden, you see an ad for Shopify. You're watching a YouTube video, maybe a YouTube podcast, and then in between, you get advertisements maybe for Shopify, maybe for Pinterest, maybe for Eventbrite. So all of that being disruptive media may not make a whole lot of sense for where you are as a business, but I would say paid search being user-driven, having to type in a relevant keyword for your ad to show, should pretty much be for just about everybody.

**Lenny Rachitsky** (00:08:11):
Everyone should do it. Super interesting. There's also the most companies grow through one growth engine primarily, say word of mouth, or SEO, or sales or paid. So for some companies, paid will be most of how they grow like say, I always think of Booking.com and Credit Karma and just like most of their growth came from paid growth online, paid growth. For some companies, it's just like a layer, a small 10, 20% of their growth. What are signs that you have the potential for paid/performance marketing to be most of your growth, like say 70, 80%?

**Timothy Davis** (00:08:47):
I always say, where are your users? You will have some data that will allow you to understand that say right now, you're doing really well on TikTok. Some would argue that's an emerging channel right now. Great. If that's doing really well for you, maybe you take... Because that content could be used on something similar like Snap, see how that does for you. You could also lean into your Google Analytics or whatever analytics tool you are using and see if you're already getting users from that platform. If you're currently managing that, if you don't have a profile on there and obviously, you don't have a presence, it would be really hard for users to find you and get there. But always look at the data that's available to you within your analytics platforms and say, "Users are already finding us here. How can we turn that knob up to 11?" And you can do that with paid. Because if they're already finding you through that channel, what would happen if you were to just turn it up to 11?

**Lenny Rachitsky** (00:09:46):
Is there an example of a company you worked with that's known that as an example of that, where you're like, "Oh, I see everyone's looking, finding them on Google. Let's go turn it to 11."

**Timothy Davis** (00:09:55):
Yeah. So there was a company I worked with a couple of years ago called, Hairstory and IPSY. I know, very funny. Guy with no hair working on a company called Hairstory, but they were doing really well from a Google shopping standpoint. But when I started consulting with them, we looked at the analytics and we actually saw that they were getting a lot of people from Meta and TikTok at the time. And TikTok was very, very new and they didn't really know what to do with it. So said, "We'll do a small test." We can start on Meta with just some customer testimonials. Let's see how that does. We'll get interest in, build a funnel, get retargeting, and hopefully get conversions. TikTok was so new at the time that it was like, "We don't know what's going to work. Let's just try with what is currently available."

**Timothy Davis** (00:10:47):
Then once we started doing it, we started noticing, "Hey, this doesn't make a whole lot of sense from a creative standpoint." We were missing the mark of what we were using on Meta was working, was not working on TikTok. So you can't always just take what is currently working on one platform and apply it to another because it is a different user experience. It is a different mindset that the user has when they're on there. So that was an example of where we were able to take those instances, look at their data and say, "They're already finding us here. How can we turn this up a little bit?" And I don't remember the numbers exactly, but it was pretty exponential.

**Lenny Rachitsky** (00:11:24):
Okay. So the core advice here so far, is look for where people are coming to you from today, and then that gives you a sign of where you should start to think about running paid ads, performance marketing on those platforms.

**Timothy Davis** (00:11:38):
Yeah. And also, there's a saying that my current director likes to use, which is signs of life. You can always do a very, very small test. You can just put a little money into a platform, see if there's a sign of life. If there is, then you can pull back and say, "Okay, we have signs of life. Now let's build a campaign around that." There's no reason to say, "All right, we have a signs of life. Let's now turn it up all the way." Do we have the right creative? Do we have the right campaign? Do we have the right messaging for the users on this platform? Then let's take that approach, as opposed to just, "Hey, signs of life, great, go run a hundred miles an hour." Make sure you're doing the right thing when you get into those platforms.

**Lenny Rachitsky** (00:12:22):
Let's follow that thread. A lot of people run little experiments on say, TikTok, and Snap, and Twitter, and things like LinkedIn, and they often don't see a lot of results and it's always like, "Hey, did we do it wrong or is it the platform's not working?" I know it's a very difficult question to give like, "Here's how you do a sign of life test correctly," But what are some things that you think either people do often wrong when they're trying to experiment with the platform or that you just think they should do when they're trying to look for signs of life?

**Timothy Davis** (00:12:49):
The number one thing I tell people all the time is use your own data, start with your own data. So take the existing customer base you have, load that up into the platform to build lookalikes. From there, you can do... And I'll use Meta as the example. You can do a 1%, all the way up to a 10%. So 1% match, 2%, 3%, so on and so forth.

**Timothy Davis** (00:13:12):
What I tend to do is build ad sets, one at 1% because we know that one's going to be highly correlated to what we're looking for. Then a two to four, and then a five to seven, and then an eight plus. More times than not, the eight plus does not work, but there have been times where it has, so it's, "Hey, let's do it. Let's try it." But if you also have a very limited budget because some people don't have the luxury of having an unlimited budget like we do in some of these other companies I've worked at, just start with the 1%. See what that sign of life is because you already know that this is so tied to your existing customer base. If that sign of life is giving you a positive signal, now you have the information you need to build a campaign you need to be successful.

**Lenny Rachitsky** (00:14:02):
What are these percentages referring to? You may have mentioned it, but when you say 1%, 2%, 3%.

**Timothy Davis** (00:14:07):
Yeah, yeah. So that is how closely tied they are to that user's behavior on the platform. So they're 1% tied to what they're doing. They're visiting similar pages or they have similar behavior on the platform, so they're more than likely going to be tied to what that user... They're not going to be that user exactly, but they're going to be very correlated to them where 10% is pretty wide base that you're going to hit.

**Lenny Rachitsky** (00:14:35):
I see. So the smaller the percentage, the closer they are, the closer it will look like there.

**Timothy Davis** (00:14:39):
Yep, there you go.

**Lenny Rachitsky** (00:14:40):
How do you know if it's the creative that is failing versus it's just never going to work? Is there something that tells you that's what's not working?

**Timothy Davis** (00:14:47):
It's a million-dollar question, to be honest with you. Because you could look at some of the metrics that currently exist in the platform. Click-through rate basically just tells you, are the users engaged? Because start with the target. You're getting the impressions are there. Is the target right? That should be your first thing. Yes, the target is correct. Users that we want to see are seeing our ads, but they're not engaging with it. That would be the first thing.

**Timothy Davis** (00:15:15):
But the part that I think you're really trying to ask is creative versus the content. Because sometimes depending on the ad unit, you could have a story creative that is literally the creative has to stand on its own, not necessarily the content that's in it, but something like an in-feed creative has a headline, a primary, a description, and a creative. That's where honestly, the only way you're going to get an answer to that outside of the data that's available to you like click-through rate, reach, frequency and all those things to pull in more metrics, is a focus group to understand, "Hey, when you saw this image with this content, what was your result from it?"

**Timothy Davis** (00:15:58):
Now, you can build a test within the platform to do a control versus a test where say, you take the creative with the same primary and the same description versus a creative that's just your logo with the headline and the description and see what the results are. But more times than not, you're not getting the understanding from the user of, well, why doesn't that creative resonate with you? And they'll give you suggestions in the focus group. Why does that work better for you than not? So that's a really, really hard question to answer without having those dialogue with the user to understand that.

**Lenny Rachitsky** (00:16:34):
Yeah, that makes a lot of sense. How long do you recommend these tests run for these signs of life tests? And I like this term, by the way. I haven't heard this before.

**Timothy Davis** (00:16:40):
Ideally, in a perfect world, you're going to hear the word, statistical relevance. Mathematicians will tell you exactly what that number is. And I'm not going to pretend like a mathematician, but a lot of times, it's budget constraint. So there could be a VP finance. Anyone like that could just come to you and just say, "Hey, do you have $25,000 for this test?" You only have 5,000. Just get that information, get that data. You can then also build an off size off of that. Hey guys, we worked with our Meta partners, we worked with our Google partners. We put $1,000 behind this test. We know that our impression share was this, our reach was this. If we were to put $10,000 into it, this is the expected return we can get from it based on the click-through rate, the conversion rate that we got from the test that we ran.

**Lenny Rachitsky** (00:17:34):
Got it. So basically, we have limited number of dollars to spend. That'll tell you how long you could run one of these for.

**Timothy Davis** (00:17:41):
Yeah.

**Lenny Rachitsky** (00:17:42):
Any other tips for someone that's trying to experiment with a platform early on for these signs of life tests? So one is try a lookalike that is the most targeted version of the lookalike. So 1% you said, and then incrementally grown and incrementally increase that percentage as you spend more. Any other tips, I guess, for people just to experiment with the platform?

**Timothy Davis** (00:18:04):
Make sure you're not too hard on yourself if it doesn't work. A lot of times, companies I've either consulted with or worked at, there was always pressure or there was always a need to succeed at whatever experiment we put into market. I believe in creating an environment where it's okay to fail because we're either winning or we're learning. And more times than not, if we put something new into a platform that we know nothing about, we're learning the bells and whistles, we're learning the functionality of it. Just know there's going to be things you're not going to understand because each platform is unique, each platform is different, the user behavior is different. So give yourself some grace, understand that this may not work. And as long as you're learning from it, you're going to be okay.

**Lenny Rachitsky** (00:18:56):
I love that. In terms of which platforms people should explore, obviously there's Google, there's Facebook, Instagram, what are the platforms people should seriously consider at this point?

**Timothy Davis** (00:19:09):
Google for sure. And when we say Google, let's make sure everyone understands what Google entails. Google is YouTube, Google is Google search, GDN, Google Display Network. There's a lot of things in Google that you can do. I always say, if you have the creative available, you should really, really be looking at doing video because video is one of those things that I'm very bullish on. It is doing really well when you measure it the right way. And as long as you can get that creative and get it consistently just because you have one piece of creative, if it's doing well, you do need to have that creative refresh, kind of that flywheel going. Make sure you're doing Google Search, again, user-driven, YouTube, and Meta, and Meta contains both Facebook and Instagram. And then based on the data available to you, if you do see users on TikTok, definitely go after those. But if you're just starting out and you just want to get your feet wet into something, I would say start with Google Search, then get into Meta. And if you have video available, definitely get into YouTube.

**Lenny Rachitsky** (00:20:19):
Awesome. Okay. So Google Search, YouTube, Facebook, Instagram, TikTok. What about LinkedIn? Do you see things happening there for say, B2B companies?

**Timothy Davis** (00:20:30):
Yeah. LinkedIn is very expensive in comparison. So just know if you're going into LinkedIn, it's going to look almost three times more expensive than other channels. The targeting that's available on LinkedIn, knowing job titles, industries, actually targeting people at certain companies is very powerful. The example I always tend to use is that I worked at a company called SoftLayer. SoftLayer was acquired by IBM because they were trying to build out their cloud portfolio, couldn't do it. So they're like, "Hey, let's do the next best thing and buy this company." But when we were just SoftLayer, we were trying to get Coca-Cola as one of our clients. And you know those Coke freestyles where you can pick whatever drink you want and put the flavor in it?

**Lenny Rachitsky** (00:21:21):
No, that's awesome.

**Timothy Davis** (00:21:22):
Oh man, these are great. Maybe it's a cell thing, but basically, you go up to a Coke freestyle and say, "I want Dr. Pepper and I want cherry flavor in it." Or you want Coke Zero with cherry and vanilla in it, you can do that. It's the freestyle you get to pick. The reason they wanted it to be cloud-based is because there's a ton of drinks in there. So you need to be able to efficiently and effectively say, "This store needs more Sprite or this store needs more Sprite Zero." Because you have your whole portfolio in this one machine, so you want to be able to update things more readily. And it was between us, AWS and Microsoft. And met with the sales team and said, "What do we need to do to win this?" Because it was a big ticket item for us.

**Timothy Davis** (00:22:14):
And what we found out was they had two concerns about us. It was recency and private security. So what we did was we found out where the decision makers were. So A, in LinkedIn, we took the anyone who works at Coca-Cola, we want you to see ads about security and recency. Outside of that, we also geo-fenced it because you would think Coca-Cola Atlanta, that's where the decision maker sits, but they were actually in LA. So in LA, we geo-fenced them, and we knew that they worked at Coca-Cola. The next time the salesperson got on the call with the team to say, "Hey, just wanted to check in." He was like, "Hey, hey, I get it. Security is fine. Recency is fine. We hear you." That was great to hear because it was something we were able to do on LinkedIn and we did it in other platforms as well. But we knew we were able to get not only to the decision maker, but everyone around that decision maker to say, "Hey, these guys may be the ones we need to go with."

**Lenny Rachitsky** (00:23:16):
Okay. So just to mirror back what you're saying, you're saying you ran ads on LinkedIn targeting the execs at Coca-Cola, trying to influence them to overcome these barriers they had to buying to working with you guys. Amazing. I've seen people do that on Google Search, but I've never heard of... It makes so much sense to do on LinkedIn and it worked. And did they know that you did this or they're just like, "Oh, I just changed my mind"?

**Timothy Davis** (00:23:42):
One of them was like, "We get it. We're seeing it everywhere." We actually tried because at the time, we didn't have an offline team. We actually tried to buy the billboards around the office as well, but I didn't know enough at the time from an offline perspective of the right people to talk to, how long it would take to do it. So we were trying to pour it on hard.

**Lenny Rachitsky** (00:24:03):
That's incredible. I could see why LinkedIn is more expensive. That's incredibly powerful. And is the advice then that LinkedIn makes more sense for higher LTV, higher CB type of products?

**Timothy Davis** (00:24:15):
Yeah, exactly. I would not recommend getting into LinkedIn and my LinkedIn reps may kill me for this. I would not recommend getting into LinkedIn until you've tested Google and Meta first. Now, you could be an enterprise level company and it does make sense to start with LinkedIn for sure, but depending on your audience, I would say more times than not, it would be a Google, Meta discussion before going to LinkedIn.

**Lenny Rachitsky** (00:24:40):
Okay. So just generally, start with Google and Meta. Is there one or the other usually? I guess, yeah, which one would you start with if you had to pick one?

**Timothy Davis** (00:24:49):
Always Google Search. I'm always going to say, start with Google search, but it's also creative dependent. If you don't have the right creative for Facebook, it's going to be really hard to convert because users are just going to either be turned off by what you're putting out there. And then also, depending on where your user base is. If they're not on Facebook, it's kind of a moot point. But if they're browsing around on GDN or YouTube, it makes more sense to go there.

**Lenny Rachitsky** (00:25:15):
And then you said this insight about video is performing super well right now and you're recommending people use video. And the key there is you need to be able to make videos, video ads.

**Timothy Davis** (00:25:25):
Yeah. You got to make sure you have that flywheel.

**Lenny Rachitsky** (00:25:27):
And the flywheel is just people internally or some company agency that can make video ads for you?

**Timothy Davis** (00:25:32):
Correct. Yep.

**Lenny Rachitsky** (00:25:33):
Cool. I guess, is there any advice there of just how to do that or what ads work well or anything there for someone else-

**Timothy Davis** (00:25:39):
So yeah. The thing with YouTube is I always say, start with emotion. If you can have an emotional connection with the user, is going to be way more impactful and way more powerful than anything else. And to take that further, when I say emotion, I'm talking about comedy, I'm talking about...

**Timothy Davis** (00:26:00):
I'm talking about happiness. It's not necessarily just, "Oh, we need an emotional connection with the brand." It is just making sure the user feels something after seeing your ad. Because then, they're more times not going to remember it, which then they will take a favorable action after the fact.

**Lenny Rachitsky** (00:26:21):
That is super interesting. One last question about platforms. Are there any other platforms you see working for people that are emerging maybe that people aren't thinking about, Reddit, or Snap, or X, or I don't know, anything along those lines?

**Timothy Davis** (00:26:34):
When you say emerging channels, my brain kind of goes to connected TV, podcast, VR, advertising, audio/voice search, and even AI stuff right now. I can tell you podcasts are doing really well for the people that I know are able to measure it correctly. Connected TV is also doing really well. You can take the, again, you're doing YouTube right now, being able to take that creative and repurpose it. But the VR stuff and the AI stuff, that is stuff that is, I would say, very emerging right now. Because to be completely transparent, I haven't experimented with those things yet. I kind of like letting other people be the guinea pig and learning from them, and then if someone comes to me and they're like, "Hey, we have budget for this, let's go ahead and test it." "Great. Let's go. Let's see what we can learn."

**Lenny Rachitsky** (00:27:34):
Awesome. Podcast ads. I'm glad you suggested that. I'm a huge fan. Thank you. They're working really well for a lot of our sponsors and I'm very biased, so you don't need to pay attention to me. But I also think there's a lot of opportunity there. Okay. Let's talk about when to start investing in performance marketing/paid growth. So, say, you're a startup, do you have any advice for when it's time to start, signs of life test or even... And then also, just when is it time to scale to go like, "Okay, let's go big on this."

**Timothy Davis** (00:28:08):
If you are a startup, typically, whenever I consulted with them, it was what are the goals, what are we trying to achieve, and when? Because if you're looking for something quick, paid needs to start immediate. And paid [inaudible 00:28:24] started yesterday because SEO takes time. SEO, depending on the market you're getting into, if it's emerging, people may not even know your product exists. There was a product I was working on years ago that if you were traveling to a hotel, and say, it was a romantic getaway with you and your partner. And you wanted the hotel suite or room done up with flower petals, and champagne, and stuff like that, they would do it for you. Well, they were working with someone before that was like, "Oh, we should totally be in paid search." And if you look at the keywords that they were doing, it was like, booking hotel rooms. It's like, "No, that's complete disconnect." And they're like, "Yeah, but we're trying to build awareness."

**Timothy Davis** (00:29:08):
You don't want to build awareness through search. You build awareness through display media-based type media. When we transitioned all of their money over at the time, and this will age me, before Meta was a thing, when we transitioned everything over to GDN, that's when the company started really reaping the rewards. Because we were building the awareness around the product. So, it depends on what is the demand of your product and market. If you're doing something that is similar to another product and market, you could do competitor, I call it coattail riding. Say, Lenny, you and I create a product that is similar to monday.com. We can go out there and just start bidding on monday.com and say, "See why Lenny and Tim are better than monday.com." And start getting some people in interested, maybe kicking the tires, starting free trials, but they also have other keywords that they can go after in market. But if you're going after something new like hotel room, flowers, and I forget what keywords we were bidding on for that, it was years ago. People weren't thinking of that. It wasn't something they were searching for. So, it just really depends on, A, when do you expect results because SEO can take time. And B, what is the demand in the market for your product?

**Lenny Rachitsky** (00:30:33):
Some people use paid ads to drive early growth to bring customers, to help them figure out what to build kind of pre-product market fit growth. Is that something you recommend? Is that something you'd advise against? Is that strategy that you've seen work?

**Timothy Davis** (00:30:48):
Yeah. Product market fit is a huge thing. We've run into some of this at Shopify, and we definitely ran into this at IBM. So, for the longest time, IBM is, "We're a global company, we should be everywhere." But when we started looking at the data, it was, "Should we be everywhere?" For example, Africa, we were in the whole continent. We weren't just in, say, South Africa, or Egypt, or something like that. And the more we dug into it, the more we realized the biggest issue wasn't necessarily that users weren't interested in our product and weren't purchasing it, it was because we didn't have a product market fit mainly from an operation standpoint.

**Timothy Davis** (00:31:33):
In Africa, there are multitudes of different types of currency. There's the franc, there's the rand, there's the shill, and we were just, "Hey, USD, thank you." So, of course, they weren't converting unless they were going out of their way to make a way to convert that. So, when we took a step back and we said, "Okay, where do we want to start?" It was South Africa. That's really where we were trying to get, quote, unquote, "stronghold" in, so we had to make sure we had the rand available. Once we did that, we started doing tremendously better because we had a product market fit. They had demand for our product, and now we were able to serve them, meet them where they were.

**Lenny Rachitsky** (00:32:19):
So essentially, you're saying probably not smart to run a bunch of ads if it's not working, if you don't have something people actually want yet in that market?

**Timothy Davis** (00:32:28):
Right. Or able to convert.

**Lenny Rachitsky** (00:32:31):
Because conversion is going to end up being really low, no one actually cares about what you're doing.

**Timothy Davis** (00:32:35):
All you're going to do is really annoy the users. Because, say, in the future they are, "Hey, I'm still interested, but I don't want to use that product because I already tried." It's like, "No, no, you can totally use it now." "I already tried. I had a bad experience with them." And some users will hold you accountable to that. One bad experience and I'm just never giving you my business.

**Lenny Rachitsky** (00:32:56):
Interesting. So, is that generally your advice if you're startup, you're not feeling like you actually have product market fit yet, should you even experiment with and do signs of life tests, or should you hold off until it's like, "Okay, it's actually working, let's go."

**Timothy Davis** (00:33:10):
From an operation standpoint, I always want to make sure those things are tied off. Yeah, it doesn't make sense to, again, if you have a major budget and you're trying to get awareness into a market, great, yeah, you can go after a market. But just know that it's probably not going to convert very well.

**Lenny Rachitsky** (00:33:28):
Got it. So-

**Timothy Davis** (00:33:29):
I wouldn't recommend it.

**Lenny Rachitsky** (00:33:31):
Okay, great. Awesome. Very clear answer. Let's talk about the mistakes that you see companies make when they're investing in performance marketing. We got introduced through Casey Winters's illustrious former podcast guest, two-time podcast guest and asked them about you. And he told me that when you take over for an agency at a company that you've worked with, you crush their performance within a month. I'm curious to what you see and find they are doing wrong that allows you to be such a hero when you come in and take over.

**Timothy Davis** (00:34:03):
I think agencies have playbooks. Now I've worked at agencies, I did consulting for a long period of time and it was never an approach I took. I looked at each account and each company as its own thing. But I think a lot of agencies just come in and they go, "Oh, this is like AB&C company. And this is what we're doing. Copy, paste, done, move on." And they're also not willing to get deep, deep, deep into the weeds of stuff. I may get a little too far into data than some other people. For example, I have ops cadence that myself and my team follow. So, within that ops cadence, we have things like finance, performance, structure, keywords, ad copy, quality score, targeting, et cetera, et cetera. And then, within each of those we have specifics. For example, the keyword subsection is keyword granularity, brand versus non-brand, search query reports, negative, so on so forth.

**Timothy Davis** (00:35:06):
I feel like agencies don't necessarily get into all of those things every single month where some of those we're doing weekly, some of those we're doing biweekly, and some of those we're doing monthly. But they touch the things that they think they need to touch. They turn on automated bidding, they're doing their search query reports, and then they just kind of move on with their day because they have 50 other clients they have to get to. Well, what about looking at your conversions? Where are we converting? Have we tested different landing pages? What is a better user experience that we could be getting users right now? It's a five-step process, can we get it to a three? Partnering with PMMs to say, "Hey, here's something that I think could help improve our lead to conversion." Just stuff like that, that they're too busy with too many other things to focus really, really deep into those.

**Timothy Davis** (00:36:03):
And typically, whenever I managed an agency in the past and I consulted, I made sure that you weren't stretched thin enough that you couldn't do those things. Because I'm a firm believer in hiring smart people and then getting out of their way. But each week having one-on-ones with them, just spot checking things, just saying, "Hey, I looked at this. This doesn't look right. What's going on there?" "Oh yeah, I do that on this day." "Okay, great. Just making sure you're covered." Because sometimes people won't scream uncle when they should be screaming uncle because they think it's a sign of weakness.

**Timothy Davis** (00:36:40):
But let me know when you're overwhelmed. Maybe I have a solution for you. Maybe there's a way I can coach you to be better at something, or we just need to hire more resources. Because the client portfolio you have is five, and when we took them on, they were all at 100K, but now they're all spending 2 million plus. We need to offload some of that from you because you're doing such a good job that you've scaled them up. Let's give you three clients instead of five and hire someone to take those two.

**Lenny Rachitsky** (00:37:08):
So it sounds like basically they just don't have the time to care and spend on all the things that they need to be doing. And when you've held companies, you actually go deep and you have the time to do it well. I guess, when someone's trying to find an agency or someone like you, I know you don't do this much anymore. Any advice for just how to know if they're going to be great? Is it just agencies in general probably not a good choice? Is it hire someone in-house? I guess, what advice do you offer people that are like, "Oh man, I want to avoid this."

**Timothy Davis** (00:37:43):
Agencies are a good place to get things started. Even when I was consulting, I would, honestly, I'm a big believer in forward thinking, backwards planning. So, if I'm taking this contract on with this new client, what's the end goal for you? If your end goal is to have this at performing in $100 million spend, there's no way one person can do that. So let's create milestones along the way of making sure we're checking in and saying, when is the right time to hire? Whether that's a data scientist, whether that's a creative person in-house or replacing me full time. There's no reason that you should be holding a company back. If anything, you should be helping them get to that milestone. And I think that's why I've been able to do so well for myself because I show that, "Hey, I have the best interest for you and your company." As opposed to how much more money can I squeeze from you by holding onto you as a client.

**Timothy Davis** (00:38:47):
I would say, agency consultant is a good way to start. Because if you as a business owner, you shouldn't have to log into, "Oh, I haven't logged into Google in three weeks to look at stuff because I'm doing payroll, I'm doing HR stuff, and I'm meeting with clients, and I'm doing sales." Start there, get it to a good place. Create that milestone of, "Hey, when we're spending 50K a month, I need to hire somebody full time to take this over." And just have that conversation with your agency and your consultant. I think more times than not, you will have a positive reaction to that. But if you don't, I would say that's a major red flag and probably someone you shouldn't be partnering with.

**Lenny Rachitsky** (00:39:27):
Awesome. Okay, so your advice is to get started on paid growth, buying an agency or a small shop consultant type person to get you started, have a conversation. And when we reach a certain scale, we're going to hire someone internally to run this for us. And then, potentially, they'll keep working with you. Potentially they'll start things in their own. Or is the assumption they'll start working with you, they'll become the owner of this thing, or is it like we may transition you out?

**Timothy Davis** (00:39:52):
That's a really good point actually. So, there have been times where a client's like, "Hey, we've reached our milestone. I want to bring someone in." That person comes in, and say, they're an expert in social media, like, "Hey, I still want you to execute on Google and Bing, because that is just not my bailiwick. I'll take over the social stuff, but we do need to talk about your fee. Maybe it does need to go down." "Completely acceptable. Let's have that discussion, make sure we're both aligned to what that should be." But yeah, there have been times where they're like, "Hey, we've reached our milestone. We got to bring someone on." But that person that they bring on is like, "Actually, I see expansion in this direction, but I can't do this. Are you willing to stay on, and help me with this? Great. If not, I'll just have to find someone else who can."

**Lenny Rachitsky** (00:40:37):
I want to talk about the team that you build over time, but later. But specifically, for this first person that you hire, what sort of person is this person? Is it like a data person? Is it a person that's just done specific performance marketing on channel? Or what do you look for ideally?

**Timothy Davis** (00:40:55):
I'm a big believer in... There was a book written by Nate Silver called The Signal and the Noise. Are you familiar with it?

**Lenny Rachitsky** (00:41:04):
No.

**Timothy Davis** (00:41:07):
So, Nate Silver is the guy who created.

**Lenny Rachitsky** (00:41:08):
FiveThirtySeven?

**Timothy Davis** (00:41:12):
Yeah, yeah. And in the book, he basically... I'm going to use the word art, I'm going to use the word art, detailed the art of probability statistics and applied him to real world circumstances. It included case studies with baseball, which of course I loved. Elections, climate change, poker, stuff like that. And I liked that book. It's kind of dense. But the thing I liked the most about it was the title. And just changing the title ever so slightly to signal not noise. So typically, whenever I hire people, I want to hire smart people and kind of get out of their way. But the biggest thing I want to focus on is what is your thought process when it comes to data?

**Timothy Davis** (00:42:05):
Because I can teach anyone how to do Google ads. I can teach anyone how to do Meta ads. That is not the hard part. It is the data part that is the hard part because there is so much noise going on in those accounts. They give you everything, which is great. It's great that they give you all this information, but you can have someone that's "Oh, but look at the reach, look at the frequency, look at the CPMs, look at the CPC, look at the conversion rate. Look at the cost per lead. Look at the cost per MQL. Look at this." Hold on, that's a lot of noise you just said. So what is the signal and what is the noise? And let's make sure we're focusing on the right signal versus the right noise. And that has to be a data person because there's a lot of data in these platforms.

**Lenny Rachitsky** (00:42:51):
**Timothy Davis** (00:44:28):
Yeah. So I played baseball my whole life, but when you blow out your arm and you're as fast as a sea otter, it's not very conducive for you to continue chasing that dream. But the one thing I always liked was the stats. Even as a kid when I would watch baseball games on TV, it's like, what's this guy batting? How often is he getting on base? How many RBIs? Like, "Oh, this guy is terrible average, but he has a lot of RBIs, so that means if there's a runner on base, he may not get a hit, but he's going to get that guy in. So you want to make sure you put him in the right spot in the batting order, so on and so forth." I could talk about that for hours. But again, that could be another thing where there's a lot of data available, which one should you focus on?

**Timothy Davis** (00:45:16):
And ultimately, what is the optimization you're going to make to the lineup or to where you place fielders on the field to ensure that we're doing the right thing and becoming as efficient and effective as possible? As far as dealing with all that data, that is just, I would say, a skill I've learned over time. Early in my career, whenever someone was like, "Oh, we have this new project. Who wants to work on it?" "I'll do it." I was always just eager like a sponge. I wanted to get in as much stuff as possible. I did SEO for a portion of my career. I did email marketing. I did affiliates. And then, eventually, I remember the first time I saw paid, because again, I was doing SEO where I was like, "Yeah, we're going to do this and we think it's going to work." But we won't know for about six months.

**Timothy Davis** (00:46:12):
Someone showed me the paid platform. I was like, "Wait, you know this is the keyword you're bidding on. This is how many times the ad was shown, how many people clicked on it? How many... Wow, this is amazing. I need to get more into this." And that's just kind of where it started. And when I usually hire people and we go through the interview process, I make sure that they can be data focused. Really, it's just ensuring that we're focusing on that signal and not the noise. And one of the interview questions I usually ask is I throw a bunch of data points at them and then say, "Out of all that, what would you do to optimize the account?" And more times than not that they're just overwhelmed. But the people that I like are like, " Well, what's the purpose of the campaign?"

**Timothy Davis** (00:47:02):
"The purpose of the campaign is to drive conversions." "Okay, well, I would focus here, focus on how many clicks we're getting, and how many conversions, are we targeting the right people?" Because who cares about how many impressions you're getting? Who cares about the reach? Who cares about the frequency? If the goal of the campaign is to get the conversions, that's what we should be doing. If it was awareness, it's how many people saw it. If it was a consideration, how many people were getting into the funnel and are considering us from a white paper download or a demo as the product solution that they're looking for.

**Lenny Rachitsky** (00:47:34):
That's a great segue to the next question I wanted to ask you, which is just metrics that you love to focus on, pay attention to when you're helping people with paid ads. A lot of people think about CAC, a lot of people think about return on ad spend, LTV to CAC. I know it really depends on the goals as you said, but I guess, is there anything that you find is like, forget these metrics, these are kind of the bucket that you focus on most?

**Timothy Davis** (00:48:01):
Yeah, so for those metrics, I would say, I really hope you have a great finance partner. Shout out to Courtney and Nick the fantastic finance partners I have at Shopify. Nick's not there anymore. Sad cry emoji. But Courtney, we're able to collaborate on those things. Understand, this is the investment we're putting in, this is the expected return, this is the CAC that we can basically put a guardrail on. You have to be within. So, hopefully you have a really strong financial partner you can use for those. But as far as the stuff that I focus on, there are things that whenever we're looking at accounts, we'll kind of hyperfocus on. For example, Google will give you information about what is going on with your ad copy and how to ultimately show as often as possible. What I'm showing here is a visual of brand versus non-brand when it comes to expected click-through rate, landing page experience, and ad relevance.

**Timothy Davis** (00:49:08):
The reason I like building reports like this is because it'll kind of show you where your hole in the ship is. If you look on the left side expected click-through rate, 75% above average. Landing page experience, 84% above average. Then you get down to ad relevance, a lot more colors than there are green, only 35% above average. So, for your brand ad copy, the clear direction you have from the data that's available to you is jump into the account and make it more relevant. That will improve your ad strength. And once you improve your ad strength, that will improve your quality score. And more times than, I think, it's a 12% increase in the number of impressions you can get if you increase from a below average to an above average for the data that's available here. And then, on the non-brand side, clear expected click-through rate, you really need to be working on.

**Timothy Davis** (00:50:13):
And that data is also available here that you can kind of see. I put in red the one for brand, your quality score being at a nine, but your average CPC is $8. That is very interesting. It should be, the higher your CPC is, the lower your CPC should be. So that is an investigation that's like, "Hey, here's a signal, let's go do a deep dive." So there's further reports that you could look at. Looking at the ad strength again, average, excellent, good, or poor. You can see clearly on the non-brand side doing really well. They're doing really well here. Most of their ads, 46 of their ads are excellent and a bulk of their spend is going there. But if we look on the brand side, you have one ad, one ad that you could go in and just click pause on, that is a poor. And look at that CPC $7.

**Timothy Davis** (00:51:19):
So just turning that ad off by itself, not only will... I'm a firm believer in that there's an account level quality score, not just necessarily a keyword or an ad quality score. So, just turning this one off and removing it from the account, this one ad could dramatically improve your performance. And then, Google actually tells you what you need to do to increase those strength things. So this report is ultimately powered by this one. So for your ad strength improvements, they'll tell you, "Try adding a few more unique headlines or unpinning some of the ad sets. Try including more keywords in your descriptions or your headlines." So-

**Timothy Davis** (00:52:00):
Including more keywords in your descriptions or your headlines. So they're actually giving you this information, but more times than not, I just feel like people are just missing this and just not taking action on it. So definitely some stuff available within the account that will help you focus on that signal versus the noise that you could be just getting from the clicks, the impressions and all those things that are available to you.

**Lenny Rachitsky** (00:52:24):
That was amazing. For folks not watching on YouTube, you pulled up actual reports from, I think, imagine, past clients, is that what the data was from?

**Timothy Davis** (00:52:24):
Yep.

**Lenny Rachitsky** (00:52:32):
Okay, so actual reports from past clients of how you evaluate, and this is Google Ads, basically.

**Timothy Davis** (00:52:38):
Correct.

**Lenny Rachitsky** (00:52:38):
Google Ads data. Incredible. Okay. And so within those reports, you had poor, excellent. How do you determine when something is going great? Is that something you set, like if it's above this threshold? Is that a benchmark you have, or is that Google telling you, "This is poor, or this..."

**Timothy Davis** (00:52:54):
Yeah, so that's Google telling you.

**Lenny Rachitsky** (00:52:56):
Okay.

**Timothy Davis** (00:52:57):
There's sometimes where you'll work really, really hard to take that poor to an average, that average to an excellent, and there's just not a whole lot you can do sometimes. It kind of is what it is. But I would argue more times than not, people are not doing those things to improve their ad strength. So just if you have the change history available in every account, in Meta, in Google, if people are doing the test to try and improve and get better, great. You have the right people working. But if not, that's a clear indication that there's definitely room for improvement.

**Lenny Rachitsky** (00:53:40):
Something that someone asked on Twitter is for benchmarks around any of the stuff. How do you know when your CPC is good? I guess you just look at... Do you look at Google telling you it's excellent versus poor? How do you know if your conversion rate is good? How do you know if your CAC is good?

**Timothy Davis** (00:53:54):
Yeah, every industry and every company is going to be different, healthcare, lawyers, those are some of the highest cost and average CPCs I've seen. If I was to compare that industry, say to a B2B industry, it would not be very good at all. Honestly, what I would tell the user to do, every single platform has partners available, more times than not, they're kind of like salespeople. I actually really like the partners that we have at Shopify, because I do feel that they are partners. Shout out to Francisco at Google, and Sami and Alana at Meta. And Nick, and Sam, and Brian at LinkedIn, in case they all hear this. But I think they're really great partners, and they will give you that information.

**Timothy Davis** (00:54:44):
They will actually say, "If you give me the five people you consider to be your top competitors, I will tell you if you are above or below a certain threshold." Now they can't tell you CAC because they would have to have transparency into conversions. But click-through rate, conversion rate, cost per click, things like that, they will give you that information because they will anonymize it, so you won't know who is who. If you say, "My competitor's monday.com," they won't say, "monday.com has a click-through rate of 5%." They won't tell you that. But they will tell you, "Of the competitors you gave us, and we added three more in just to say, hey, we found some people." And also to where if you only give them two, you can be like, "Oh, it's one or the other." That they'll give you that information because they want you to succeed. Because if you succeed, you spend more money on their platform.

**Timothy Davis** (00:55:38):
So if you find out your average CPC is really high, take the actions that are in the account that tell you what you can do to lower it. But if you find out that you have a lower CPC, you're like, "Oh, great, I thought that was worse." And then you can communicate that internally to your team and say, "Hey, our average CPCs may seem high, but in reality we got with our partners, and we are on par with the industry."

**Lenny Rachitsky** (00:56:02):
Got it. So the advice is, don't seek generic benchmarks for any of these metrics. You can talk to your rep at Google, Facebook, LinkedIn, et cetera. And they'll give you essentially the numbers-

**Timothy Davis** (00:56:13):
Great summary. Yes, yes.

**Lenny Rachitsky** (00:56:14):
Amazing. Okay, going back to the report you just showed, is that a report you developed custom that gives you, here's the most important stuff to pay attention to? Or is it basically an export from Google Ad Manager, and...

**Timothy Davis** (00:56:26):
So these are all exports, so that this is just the visualization of the data that's available. So this all data is available in every account. This is data available in the account, this is data available in the account. Now in saying that, there are more reports that we get into, like impression sharing frequency. This is something I tend to look at, that not a lot of other people do. It's not about showing as often as possible because that's what impression share tells you, and that's kind of like ego marketing. I want to be number one, I want to be there all the time. It's about showing to the right person as often as possible.

**Timothy Davis** (00:57:06):
Instead of thinking about being on top of the page, you should think about serving the right user, which can be measured with our click share. And then Google will put us on top of the page, which we can see through our top impression share. That's what this whole visualization is here for, where I feel like a lot of people don't do this type of visualization. And this can be done by leveraging all the user data available on Google, such as demographics, locations, if any audiences, in-market audiences. Testing different bid strategies and more.

**Timothy Davis** (00:57:40):
So the data's readily available, but it's just making the visualization a little bit more digestible. And the reason that I actually have two here to show is because this is an example of when I was working on an account back in 2023, where we started making some changes. And you can see that, clearly, our impression share, I would say was baseline. It didn't really change too much, but look at our click share going up. Because now again, we're talking more to the right people, not necessarily just everyone, generic people. Versus this campaign that was... This was the test and this was the control, and you can clearly see that we were talking to a lot of people, but no one cared about what we were talking about. So this was an easy test to call and just say, "This one's performing a lot better." And then verifying the other metrics still look good, conversion rate, number of conversions, stuff like that. This one was the clear winner, so we went in this direction.

**Lenny Rachitsky** (00:58:41):
This is super cool. I love that you're showing this. And again, plug for YouTube to actually see the charts you're talking about. I see one more slide on this deck. I'm curious, what's there?

**Timothy Davis** (00:58:49):
Yeah, so this one, I'm hoping you have show notes that we can give a shout-out to somebody.

**Lenny Rachitsky** (00:58:55):
Yeah, absolutely.

**Timothy Davis** (00:58:56):
Yep. There's a website called PPC Hero. What I usually tell people is, "Terrible name, great content." The actual website used to be a little bit more cartoonish with superheroes on it, but now it's, they've refined it. But the writer there, his name's Jacob Brown. This is what he calls the true competition metric. And again, this is why I highly recommend we give people the link to the article because this does get a little dense. So what he does is that he creates four new metrics with the Auction Insights that are available. And two of those metrics are position above rate when we show, and amount of times they show and we don't. Added together, and it will show how often a competitor ranks above you in all auctions you're available for. Using this type of lens is an effective way to identify genuine threats.

**Timothy Davis** (00:59:56):
Not that just, this data can be used to gain comprehensive insights like determining your position and impression share, but by creating a baseline that you can see how this data changes over time through different bid strategies, keyword ad copy optimizations and more. This is a very, very powerful one, because I do know a lot of people are always concerned about, "What are my competitors doing? How are they doing it? Why are they doing it?" And with all the smart bidding currently available...

**Timothy Davis** (01:00:25):
Back in my day, it was all manual bid, so you could change the bid ever so slightly, and then be like, "Oh, now my competitor's showing above me," and this is even before Google gave us Auction Insights data. This is now available to us in the platform. Using this report will actually identify a true threat, as opposed to making an assumption based on personalization that maybe you're seeing when you Google a keyword, or using a tool like Semrush that ultimately is saying, "Oh, this person's appearing above you. Well, let's run this report and see if it's a genuine threat," as opposed to just maybe ego marketing going on.

**Lenny Rachitsky** (01:01:09):
Super cool. And this comes from PPC Hero, is this what you're saying?

**Timothy Davis** (01:01:13):
Yep.

**Lenny Rachitsky** (01:01:13):
Cool. We'll definitely link to that. Are there any other tools or workflows that you find really helpful in analyzing this endless amount of data?

**Timothy Davis** (01:01:24):
Please, audience, if you are using AI in this way, let me know because a lot of this stuff I do can be a little manual and can be a little time-consuming. If they've found ways to automate through AI where I can provide the information that isn't sensitive, that they will make it a lot cleaner, and a lot more digestible, let me know. But a lot of the things, I have templates that you can load the data into, and it will just automatically give you the result from it. But yeah, right now, it is a little manual, but if there's a way to automate this through AI, please, users, contact me on LinkedIn and let me know.

**Lenny Rachitsky** (01:02:09):
Sounds like a startup opportunity right there.

**Timothy Davis** (01:02:11):
Yeah.

**Lenny Rachitsky** (01:02:12):
Sweet. Okay, let's move in a slightly different direction. Attribution, what a sexy, exciting topic. So attribution, basically it's how do you assign credit to a channel and to a campaign, so that you know where growth is coming from, what's working? What's the state of attribution today? What do you find is helpful? How do people do attribution well in today's world?

**Timothy Davis** (01:02:35):
Yeah, I'm a big believer and proponent in multi-touch. I fall into the camp of more time decay. Historically, the research I've done, users tend to forget very quickly where they first found your brand. Yes, you should get credit because this is the first time they saw your brand or the first time they interacted with it, for sure, let's give you some credit for that. But definitely not the reason that they ultimately converted. Linear is fine as well, but overall, I do think attribution by itself is biased. It does not answer the question of whether the person clicking on or seeing an ad would've converted anyways, even in the absence of that ad.

**Timothy Davis** (01:03:24):
This is why numerous companies like Netflix and eBay have done studies to get an understanding of the incrementality of paid advertising campaigns, whether that's conducting GeoX or Conversion Lift tests at important slices of the marketing channel. I know eBay was very popular when they did that experiment. I think it was like 2012, and I'll have a link for you for that as well. Where they ultimately decided to cut almost all of their brand spend, because they found that users were already going to find them through organic anyway, so they were just kind of throwing money out the window. And it was really hard for competitors to get their ads at the top of the page because their quality scores were so low.

**Lenny Rachitsky** (01:04:07):
Okay, so multi-touch is the way you like to think about it. Basically give credits to all of the channels that you detected the user saw your ad on, and less credit if it was further back in time.

**Timothy Davis** (01:04:19):
Right, yep.

**Lenny Rachitsky** (01:04:20):
And then in terms of tooling, is there tools you love? Is it stuff you build in-house generally? How do people go about doing this sort of stuff?

**Timothy Davis** (01:04:28):
Yeah, I don't know if I want to say I have been fortunate or not, but most of the companies I've worked with, like the big companies of the world, the Pinterests, the Shopifys, the IBMs of the world tend to build things in-house. So from a third-party tool, unfortunately, I don't have a whole lot of go-tos for that. So again, either that's a, I've been fortunate or I've been sheltered.

**Lenny Rachitsky** (01:04:54):
And then, are there tools that you see people use, or is it just really nothing amazing out there?

**Timothy Davis** (01:05:00):
Yeah, none that I've seen that's like, "Oh wow, that's amazing." I will always say, make sure you're trying to leverage the in-platform tools because the biggest thing with performance marketing is the signal you're sending the platform. Because if you are telling the platform, "Oh, I want to get more of the users that are doing this action," it's going to do a really good job of giving you that. But if that action doesn't equal business results, you're not helping yourself at the end of the day. You're giving it, again, a lot of noise instead of the right signal. So try and leverage the in-platform tools. Or if there is a tool you're using, make sure it does allow third-party integration through the Google, Meta, TikToks of the world.

**Lenny Rachitsky** (01:05:51):
Then let's talk about incrementality. You mentioned this idea of how do you know if the money you spent led to incremental growth that wouldn't have happened if you didn't run that ad. Is there any advice there, anything you've seen about just how to think about incrementality correctly, and not just give yourself all this credit for stuff that would've happened anyway?

**Timothy Davis** (01:06:09):
Yeah, I mean, there are many ways to judge the effectiveness of growth overall. Like some of the stuff we talked about before, brand metrics, awareness, recall, things along those lines. There are also, I know some companies look at leading indicators like visits, and clicks, or tribute, which of the efforts are linked to or perceived drivers of actions. Like leads, conversions to prospect, prospect to scale. But really the results should be coming from either that GeoX or Geo experiment or Conversion Lift. The results of those experiments should ultimately fuel the plans for what we call IAF, incrementality adjusted factor, and will allow you to be more precise and how efficient each channel is.

**Timothy Davis** (01:07:03):
Ideally, by region, sometimes you just have a holistic of like, "This is how Meta is, this is how YouTube is." But if you don't have it by region, don't fret, it's fine, just have it by platform. And kind of like what does that look in practice? When you're running a Conversion Lift test, you intentionally do not show your ad to some users when you win an auction, and instead Google shows the next bidders' ad. This is your control group, and adds up to some opportunity costs that is estimated in terms of impression share percentage, as well as spend holdback. Spend holdback is like how much money you will not spend because of this test.

**Timothy Davis** (01:07:42):
And all of the platforms are willing to partner with you on this, because Facebook knows this, LinkedIn knows this. All of them know that they are very visually-based creative assets that are not getting as much credit as they deserve. So if you go to any of them, if say you don't have a dedicated rep you can call, and if you ask for this, more times than not, they are willing to partner with you in saying that, if you're not spending enough, they probably will not help you with this. Because there are certain spend thresholds you do need to meet. But I would say at least start there. And also if you're not spending more than I would say 50K a month in the platform, doing this is going to be a lot more work than you're going to get result from, you're just not going to have enough signal there.

**Lenny Rachitsky** (01:08:36):
So basically don't worry about running incrementality tests when you're-

**Timothy Davis** (01:08:39):
Yeah, when you're starting out.

**Lenny Rachitsky** (01:08:42):
Got it. Okay. And so basically to understand actual incrementality, every platform has a way for you to actually test it on the platform, and the team there can help you run it.

**Timothy Davis** (01:08:51):
Yep.

**Lenny Rachitsky** (01:08:52):
Awesome. Okay. Let's go back to talking about team structure and how to build your own performance marketing team. So we talked about the first person that you hire and the advice there was someone that's very, understands how to find signal in noise. So there's that one person, and your advice there was maybe around like 50K. Was that like an actual threshold that you usually recommend, or is that just like an example?

**Timothy Davis** (01:09:14):
Every business is slightly different. I mean, if they're well funded, 50K may not... the threshold may be higher. But yeah, everyone's different. 50K may be, like if somebody said... If you were to just say, "Hey, give me a number," I would say, "50K to start having those conversations." Because if you're at 50K, say for the month of June, great, it's going to take us three months to hire someone anyway, so at least start the conversations now.

**Lenny Rachitsky** (01:09:39):
Awesome. Okay. What do the first three to five hires look like generally, that you recommend for scaling internally from its marketing?

**Timothy Davis** (01:09:48):
So the first thing, like we said, someone data-driven that can get into the platforms. The next is going to be creative. Because I need those two now working hand-in-hand, making sure the creative is matching the tone and also the performance that we're trying to achieve as a business. And then third would be a dedicated data scientist, a fully dedicated person. Because they can help you with things like the incrementality testing. They can help create reports that will ultimately make everyone's lives better. They will be able to build analyses that as a generalist will not be able to do yourself. There's a saying of like, "I'm not a data scientist, but I like to play one online." Because what they do, they ultimately make us look really good. Because we're ultimately the ones reporting on the performance of it, but they were the ones that helped build that environment, and build all those things for us to succeed.

**Lenny Rachitsky** (01:10:54):
And then in terms of the creative person, is that like a graphic designer? Is it like a marketing person? What's the actual skill set there?

**Timothy Davis** (01:11:02):
It would be more graphic design/branding. The reason for that is because if you have a good marketing mix, you're going to have... If we keep it to a three-step funnel of awareness, consideration, purchase, you're going to need to build some brand equity in a specific direction. You're going to need to make sure you're communicating value, which now you're not being as creative, you're being more directional. And then ultimately the purchase is like, "Hey, click here, convert now." So you do want to give them the ability to still be creative. "Hey, I hired you because you have a good creative eye and you're good at what you do, but now we need to focus on getting that person to convert." So you give them a little free rein to be creative, but then you also need them to be able to execute against that creative, you need to get those users to convert.

**Lenny Rachitsky** (01:11:54):
And they're also writing the copy, I imagine for the Google Ads.

**Timothy Davis** (01:11:59):
I usually say that should be collaborative. The performance marketer should be able to write most of the ads, but I can't tell you how many times in my career where I've written an ad and I'm like, "This is the greatest ad ever written known to man. People will write stories about this ad, it is amazing." And it flops because I'm not the target audience, more times than not. So I think it should be collaborative, and no idea should be left on the cutting room floor because... Perfect example. I was working with ADT, the security company. We wrote the most perfect ad when Google Ads only allowed a headline and two descriptions of 35 and 35. We got every single value prop in there somehow, it was amazing.

**Timothy Davis** (01:12:50):
And the ad that it was going against was dollar sign, zero setup fee, dollar sign, zero install fee. That ad won. It was like that is... No, how did that... It barely uses any of the characters, and it tells you almost nothing, but it won. Had more conversions, a higher click-through rate. So we took that, and we applied that with the value props, and it did better. So it should never be like, unless the idea is don't buy our product, which hopefully someone is not writing that ad copy. It shouldn't be left on the cutting room floor. Always test it. Always be willing to learn what works, what doesn't.

**Lenny Rachitsky** (01:13:34):
For this first hire, what's the title of this person, usually in your experience?

**Timothy Davis** (01:13:38):
Lately, it's been growth marketing specialist, growth marketing manager, because they're going to wear multiple hats. Like at any startup that you're at, you're going to be asked one day to, "Hey, I want you to do performance ads," and then tomorrow it's like, "Hey, I need you to help me build out this spreadsheet for a spec sheet that you have no idea what you're doing." So you're always going to wear multiple hats, so just having a general title like that to start out with. And then if that person matures into a role, you can make them more of a specialist. Or if they start showing signs of like, "Hey, I really like doing the social stuff, and we've scaled enough. Okay, let me hire a paid search person." So yeah, I always start with a general, and then as the team grows, we get more into specialties.

**Lenny Rachitsky** (01:14:28):
So growth marketing person, it's kind of like the broad umbrella.

**Timothy Davis** (01:14:32):
Yeah.

**Lenny Rachitsky** (01:14:32):
And then are these people sitting in Google Ad Manager and Meta Ads and just like running ads manually?

**Timothy Davis** (01:14:38):
At Shopify, we call it GSD, getting shit done. I'm a firm believer in getting shit done. You should be in the account, like I mentioned earlier with that ops cadence, we have stuff we need to be doing weekly, bi-weekly, monthly. The bigger the company gets, the [inaudible 01:14:55] you wind up in more and more meetings talking about the things you want to do, and how you're going to do it and stuff like that. But keeping those people kind of sheltered away from that and focused on those things, are going to drive the best results for you, you possibly can get.

**Timothy Davis** (01:15:11):
And that means hands-on keyboards in the Ads Manager, tweaking things. Setting up a calendar. I'm a firm believer in setting up a calendar. "We started this test on this day, that means this test will end a month from now." Put a notification, so you have a cool down period, and you report out to the org what you did, how you did it, why you did it, and then the results from it. And then, all right, what we learned from this is this, and we will be applying that to our next test, and this is how. So yeah, hands-on keyboards doing all of those things. So again, hiring those smart people, and just getting out of their way.

**Lenny Rachitsky** (01:15:47):
I love that. In terms of how this team grows, you mentioned when we were chatting, that you wait for someone to cry uncle, to hire more and to add to the team to kind of avoid bloat. Talk about that.

**Timothy Davis** (01:16:02):
Unfortunately, we've seen a lot in the news lately with a lot of tech companies letting go of some really talented people, and that is, I feel like just created bloated organizations. We, every month, my current manager, Dean, created this calculator that we look at that says, "How much time are you spending in meetings?" If you have any PTO coming up, put that in there. Optimizations, reporting, stuff like that to basically add up to how many days are in the quarter? Because every quarter... Well, not every quarter, but most quarters you'll have vacation, or you'll have, say, what we call a Shopify burst, where it's we meet in real life to get shit done in real life as opposed to remotely. Put all that in there, and then what does the number equate to? Oh, we're in the red right now for these two to five people.

**Timothy Davis** (01:16:59):
How many quarters has it been that way? Okay, it's only this quarter. This quarter, we have a summit coming up, or we have a burst coming up, or we have a lot of travel because we're meeting with partners, so on and so forth. So maybe this is an isolated thing, let's go ahead and wait till next quarter. All right, next quarter, it's red again. All right, now maybe we need to start having the conversation of, what this new hire will take over, what they will be responsible for, and how much work they'll be taking on and doing, to replace some of this red that is going on.

**Timothy Davis** (01:17:31):
And if it equates to a full head, great, we can move forward, we've made our business case. But sometimes it doesn't. Sometimes we're just red, and we need to do a better job of making sure, "Hey, we need to step out of these meetings. These meetings are sucking out our time and we don't need to be a part of it." Or, "This launch, we don't need to be a part of. We just need to be consulted on it. We don't need to be in every single meeting every single time, or every single communication." So just making sure we're looking at the right things before we decide to hire someone and making-

**Timothy Davis** (01:18:00):
Just making sure we're looking at the right things before we decide to hire someone and making sure that we have stuff for them to do.

**Lenny Rachitsky** (01:18:06):
And red means they have more work?

**Timothy Davis** (01:18:09):
Yeah. More days than there are in the quarter.

**Lenny Rachitsky** (01:18:12):
And so they basically estimate, "Here's how many days I need to do the things I've committed to for the quarter." And then it's like, "How many actual days do you have this quarter?"

**Timothy Davis** (01:18:20):
Yeah.

**Lenny Rachitsky** (01:18:20):
That is super cool. And so step one is, 'Okay, if you're in the red, let's cut some stuff." And then if they're still in the red and you've cut stuff, then, " Okay, we need to start hiring."

**Timothy Davis** (01:18:31):
Yeah.

**Lenny Rachitsky** (01:18:32):
That is very cool. Is that a Shopify thing or is that something you do at your team?

**Timothy Davis** (01:18:36):
I've done stuff like that at other companies before, but kind of bringing it forward again, I don't want to take the credit for it. Dean was the one that brought it back up. It was like, "Oh yeah, I used to do this. I don't know why I stopped doing it." So it's definitely something I've used at other companies for sure.

**Lenny Rachitsky** (01:18:52):
That is super cool. You mentioned this opps cadence. Is that something you can describe just what this cadence looks like of how you run?

**Timothy Davis** (01:18:59):
Yeah. So I love me a spreadsheet. So it's just a spreadsheet. And visually, I'll do my best to describe it. Let's say column A has those buckets I was talking about a finance, performance structure, keywords, so on and so forth. And then within those buckets ... Or let's call those ... Everyone loves rocks and pebbles right now, right? So that's your big rock. Your big rock is keywords.

**Timothy Davis** (01:19:24):
Then within that you have pebbles. Keyword granularity, brand versus non-brand, search query reports, negatives, so on, so forth. And then within that we say how often we're doing it. Are we doing it weekly, bi-weekly, monthly? And then that allows us to ... If anyone in the organization's like, "Hey, how often are you guys updating ad copy?" Easy answer. "How often are you guys doing search query reports?" Easy answer, And it allows us to make sure we hold ourselves accountable to those things because a lot of times we have a lot we're doing, We're working in Google, we're working in Meta, we're working in YouTube. You could easily forget, "Oh, I didn't do that. I got to make sure I do that again." So it's a way to hold yourself accountable, but it's also a way for me as a manager to go in and kind of spot check that and make sure that they're doing the things that need to be done in the account.

**Lenny Rachitsky** (01:20:19):
The core of this, essentially, there's a spreadsheet that everyone aligns on of here's when and how often we do certain activity to operate this performance marketing machine that you've built.

**Timothy Davis** (01:20:30):
Yeah.

**Lenny Rachitsky** (01:20:30):
Awesome. And it's both internally so that everyone knows, and then also when people ask, "Hey, when are you going to do this?" "Okay, here's the data."

**Timothy Davis** (01:20:37):
Yeah. Yeah. So if a cross-functional team or partner wants to know, easy answer. "We got it for you right here. Here's our whole opps cadence."

**Lenny Rachitsky** (01:20:46):
In terms of the team, something else folks told me about you is that you're very hardcore about training new people that you hire. What does people mean by that?

**Timothy Davis** (01:20:56):
Yeah. There's a book called ... I think it's The First 90 Days, and in it actually has a graph that shows when the person starts having impact and how many days it's been. And more times than not, it takes about ... We've all heard it. 90 days for someone to have impact.

**Timothy Davis** (01:21:14):
I want to try and make that 45 days, if not 30. Most of the time it has to do with learning the culture, learning the people understanding, "Yes, you've done paid before at this other job, but this is how we do it here." That's where the opps cadence really comes in handy. It's like, "Here's how often we do it here. I understand maybe you did it monthly there, but we do it here biweekly. And you're saying you used to do it biweekly, we do it weekly and this is how."

**Timothy Davis** (01:21:47):
And also giving them responsibility early on for something. For example, Kat on my team was hired 8ish months ago. She was thrown into the fire very quickly. It was like, "Hey, we have this campaign coming up called additions. Here's everything we did last additions. This is the results. These are your responsibilities, these are the expectations. Go. Go forth and conquer. As you come along. There may be something that doesn't make sense. I'm here by all means ask questions."

**Timothy Davis** (01:22:24):
But what I've noticed is twofold. One, when you're clear in what is expected of them, like, "You are expected to do this when and you already know how to do it. Great." Or also in one-on-ones, I'll just open up the account and say, "Hey, this is how I do it. Let me show you the way I'm doing it and how quick it is for me. And you can learn, even though we're remote, I'm showing you as if you're sitting right over my shoulder or we're face to face. This is how I do it." So if you're doing something different maybe ... One plus one is two, three minus one is two, and that's fine. We both got to the same answer. But if you're doing nine times five minus two times 12 divided by 15, nope, we can simplify this."

**Timothy Davis** (01:23:13):
So making sure that they're efficient and effective with their time, they're focusing on that signal versus that noise and giving them responsibility early on to really take ownership of something. You can see that people are a lot more quicker to pick up things and start getting that flywheel going of, "Hey, I want to have impact as soon as possible." Versus, "Oh, hey, go read this handbook week one. Week two, let me introduce you to the team. Week three." It's like slow rolling. "We can speed this up guys. We can get people up to speed and making impact a lot sooner."

**Timothy Davis** (01:23:52):
And also don't expect them to be perfect. You can't expect people to be perfect right out the gate. " I can't remember every little thing I need to tell you, and there may be things I can learn from you." I can't tell you how many times I'm still learning from people around me. It's like, "Oh, that's great. I didn't even think of that or I haven't tried that. I should totally do that." So just know that they're not going to be perfect out of the gate, but giving them clear direction and expectations, we'll get them where they need to be.

**Lenny Rachitsky** (01:24:28):
I could see why your team is so effective and so successful. This all makes a lot of sense. You mind if I do a rapid fire set of questions that people asked on Twitter about very specific stuff?

**Timothy Davis** (01:24:40):
Yeah. By all means.

**Lenny Rachitsky** (01:24:41):
Okay, ATT, there was a huge change to the way cookies and attribution and tracking worked online and it felt like paid ads kind of like, "Oh, shit. That's not going to work anymore. It's over. Facebook is dead." Clearly that hasn't happened at this point. Just what is the impact that ATT has had on paid ads and performance marketing?

**Timothy Davis** (01:25:02):
We were just talking about this the other day because we have ... Full transparency, we have people fully dedicated to mobile on the team, and I had reached out to Sasha who's on the team and said, "Hey, what are we doing with ATT? What are we doing scan? All those things? Because has any of our tactics really changed because of say, low opt-in rates?" And the direct answer I got from her was, "As long as we can use scan to provide attribution and measurement for iOS, we're fine." It's like, "Okay, that's very straightforward. I appreciate it." So as long as you're doing those things, you should be okay.

**Lenny Rachitsky** (01:25:50):
Amazing. That's great. So basically the show goes on, things change, but people find ways to work around it. Okay. Creatives, how impactful are creative in the performance of ads generally? Is that like, "Holy shit. People are way under estimating the power of a creative." Or is it like, "Okay, it's like a fringe impact?"

**Timothy Davis** (01:26:10):
Way underestimating the power of creative. The best example I can give ... Do you remember Dollar Shave Club?

**Lenny Rachitsky** (01:26:19):
Absolutely. Their video.

**Timothy Davis** (01:26:21):
All right. There you go. You remember it. That was creative. Now the person buying it may have done a really good job of just targeting males, but I would argue girlfriends at the time probably would've been aware of it as well. Really good creative should be doing a really good job of telling a story. And if it does that ... Again, going back to what we talked about at the very beginning, if you get that emotion with users, whether that's pulling at the hard strings or comedy, it's going to have a lasting impact.

**Lenny Rachitsky** (01:26:57):
Okay. Chuck on Twitter asked, "When someone steals your traffic, say in Google search results and buying up keywords around your companies, what should you do? Any advice?"

**Timothy Davis** (01:27:07):
Yeah. So that actually goes back to the visual that we showed and I'll pull it back up as I'm talking through it. The biggest thing is just know that anyone can do that. You can do it too, if you are ultimately concerned about it. But a lot of times competitors could be doing it on accident. And what I mean by accident is within Google, if you're bidding on keywords, Google will do what's called a close variant. If you were to do say e-commerce solution, I bet you Shopify shows up as a close variant at some point or Square or anyone like that. So they could just be mismanaging their account first and foremost. Don't give them that much credit that they're doing this maliciously or even doing it with intent.

**Timothy Davis** (01:27:59):
And again, it will be in the show notes. If you do pull this report and you do notice that there is a clear threat that's going on here, first things first, let's make sure that they're not doing anything egregious like saying, "Lenny and Tim are better than Monday.com."

**Timothy Davis** (01:28:15):
You cannot be, if the brand is trademarked within Google, they cannot use your name within the ad copy. Google more times than not will disallow it, but they could misspell it. I can't tell you how many times I've seen Shopify spelled with two I's because Google isn't catching it, but we can always put in a claim to say, "Hey Google, please remove this."

**Timothy Davis** (01:28:40):
But if we do run this ...You can kind of see that the orange line here, and for those that are just listening. Orange line is rather consistent over time. There is a two week period where it dips, but it does come back up. There's another line that at the beginning of this visual, green is actually above orange. And if you look at the green one over time it almost disappears. So the reason I would say make sure you're looking at this report, and it's not just ego marketing, it could be an error. The issue could be the green one, specifically, could have been getting a close variant. They identified it, they removed it. "Oh wait, a couple of weeks later, we didn't fully remove it. Now let's remove it completely. And now they're almost gone completely." So make sure you're looking at the data and reacting to consistent competitor conquesting versus something that could just be an accident or users not knowing what they're doing.

**Lenny Rachitsky** (01:29:40):
Amazing. And this is PPC Hero again, right? PPChero.com or whatever?

**Timothy Davis** (01:29:44):
Yes.

**Lenny Rachitsky** (01:29:44):
Okay, cool.

**Timothy Davis** (01:29:45):
We'll share it.

**Lenny Rachitsky** (01:29:46):
Yeah. We'll link it to it in the show notes. Okay. Last question. AI. You mentioned AI. You're looking for AI tools to help you with your workflows and analyze data. I guess is there anything you've seen AI impact in the work of paid growth and performance marketing, or is it like in the future might, other than obviously the algorithms on the platforms?

**Timothy Davis** (01:30:06):
I remember having this conversation a couple of months ago. AI, couldn't get away from it, right? It was everywhere, and what we were doing was leadership on know, "In all of our quarterly planning, what are we doing about AI? How are we using ai? What are we doing that's different?"

**Timothy Davis** (01:30:28):
As always, I go to the partners and I say, "Hey, what are we doing about this?" And Francisco at Google, actually, he made a really good point. "You guys have been using AI for years now. Smart Bidding is AI. All of the recommendations within Google Ads is AI. Ad copy recommendations is AI, and that's always been in the platform, so we've always used those things."

**Timothy Davis** (01:30:59):
So it was kind of like, let's reset the conversation of, "Hey, this has been here. We have been using it, this is how we've been using it and moving forward, these are some of the things we think we'll start doing." I do think it's having a huge impact from a content standpoint and a creative standpoint. Now, if those two kind of converge together, you have a perfect storm, right? But it is something that I keep a relative close eye on, but like I said earlier, hopefully some of your users can share more information with me. But it's not something that I would say is overly impactful yet, but I could see how it could be used maliciously if you can do API connections and things along those lines, for sure.

**Lenny Rachitsky** (01:31:48):
Wait, what do you mean by that?

**Timothy Davis** (01:31:49):
Again, Google will disallow certain things, but it takes time sometimes. If the term is copyrighted in Google for ad copy, it'll disallow it immediately. But say they need to do a check, you'll see a lot of times under review or pending in the account. But you'll also see impressions potentially attached to that. It's because Google's like, "Oh, we'll serve a little bit of it, and then if it's malicious, we'll pull it back." I could see a way that somebody could automate AI to where it's always updating it to where it's like, "Oh, let's just get a little drip here, a little drip here, a little drip here." And that little drip equates to a lot, but that's something AI could help with a human doing that would just take forever and be a total waste of time.

**Lenny Rachitsky** (01:32:34):
Got it. Just run tons of ads, just keep trying, trying, trying trying stuff. Slip through the cracks. You mentioned creative. It actually came back to question I forgot to ask. Going back to the team that you hired to run this sort of stuff, you hire this one person, growth marketer, specialist type of person, and the next hire is a creative. What's a sign that it's time to hire the creative person? Is there anything there? Is it just like, "We have budget and this is working?" Or is there anything else of, "Like, okay, this is a good time?"

**Timothy Davis** (01:33:00):
Yeah, if you're using a creative agency and they're getting you everything you want and you're happy with it, then it may not make sense to hire a creative. But more times not what I've noticed from creative ... Creative independence tend to do better than an agency. The biggest difference I see is that matching the right tone, matching the right creative look and feel that you're going for is accomplished way better in-house, and also coming up with new ideas that you can test quickly and iterate on versus, "We only have so many hours with the agency this month, or we only have so much budget we can spend with them." Where if you have that person in-house fully dedicated to the product itself, you'll never run into those caps.

**Lenny Rachitsky** (01:33:49):
It feels like if anywhere that scenario AI is going to empower that initial hire to do more creative on their own, you would think?

**Timothy Davis** (01:33:56):
Yeah. Yeah. And that's not always the best way to go. I've seen some ads in there where it's like, "Oh yeah, they're being scrappy. I see what they're doing." But to your point, maybe that's where AI kind of bridges the gap. Because I can't tell you how many times in the past it's like, Guys, we've got to be able to do retargeting, but we have no creative to do." Google has the dynamic ad builder and they've had it for I feel like years now, and that was just like, "Give us a couple of images and we will make a display ad for you that should perform because we're testing many different iterations of it." Meta is probably going to come along with something as well that it's like, "Give us a picture of your product and we'll put different backgrounds on it and test what works and what doesn't." Things along those lines.

**Lenny Rachitsky** (01:34:45):
That makes so much sense. Timothy, we've covered so much ground. This is everything I was hoping it would be. Before we get to our very exciting lightning round, is there anything else that you think would be important or valuable for listeners when they're trying to do this stuff on their own? Any other nuggets left that we haven't already covered?

**Timothy Davis** (01:35:05):
Yeah. I said it at one point, but I'll reiterate it. I'm always forward thinking, backwards planning. Just as you're going through it, "Where do you want to be and ultimately how do you think you're going to get there?" Because say your goal is to be on all platforms. "I want to be on Pinterest, I want to be on X, I want to be on everything." "Okay, forward think. That's where you want to be. Now let's backwards plan. "What can we do right now? We can do search because that's only content and that's keywords. We can do that. All right, now we need creative, but where do we start?" And then make iterations along the way. It's just always forward think, backwards plan, and that's for anything.

**Lenny Rachitsky** (01:35:49):
What are other examples of forward thinking? Because in a sense everyone will be like, "I want to be on every platform." I guess what are other things that people think about when they're like, the forward thinking is like, "Oh, we want to win Google search." Is that an example of forward thinking? What else? What else should people thinking?

**Timothy Davis** (01:36:06):
Yeah, exactly. What are those goals you want to hit? One of the things that we look at is what emerging channels to perform in it. "So what is it going to take for us to consider this channel a performing channel that is an always on, we're we're adopting it as BAU? So that's going to take a thousand conversions a month at this much spend with this much lift associated with it. So okay, we know what that looks like, so we're going to backwards plan where we're going to start. We're going to start with this one ad creative. "Okay, that works. Then we're going to go to this next ..." Because within each platform, they all have multiple types of ad units You can use. Say in LinkedIn, there's feed, there's conversation, there's video, there's carousel. So it's what are the milestones along the way that you're going to do to ultimately get it from testing emerging channel to perform them? So that would be an example of something more micro than macro.

**Lenny Rachitsky** (01:37:16):
Got it. Well, with that, we reached our very exciting lightning round. Are you ready?

**Timothy Davis** (01:37:22):
Oh yeah.

**Lenny Rachitsky** (01:37:23):
First question. What are two or three books that you've recommended most to other people?

**Timothy Davis** (01:37:28):
Daily Stoic by far. A book I read every day. Quick excerpt of what you can do from a stoic philosophy standpoint. Great By Choice is another good one. And Deep Work.

**Lenny Rachitsky** (01:37:45):
Favorite recent movie or TV show that you've really enjoyed?

**Timothy Davis** (01:37:49):
X-Men '97. Thoroughly enjoyed that. But that may be a lot of nostalgia. I actually never watched RRR when it first came out. Highly recommend that. That was a lot more enjoyable than I was anticipating. The Playlist, which is about Spotify, Welcome to Wrexham and Billion Dollar Code, also on Netflix, about Google Earth. Very interesting.

**Lenny Rachitsky** (01:38:16):
Yeah, RRR. That movie is intense and very long also. It's like, man, I

**Timothy Davis** (01:38:21):
Three and a half hours.

**Lenny Rachitsky** (01:38:23):
... just have to split it up into different days to finish it, but it is incredible. No intent. Okay. Favorite recent product you've recently discovered that you really love?

**Timothy Davis** (01:38:31):
I drink too much caffeine and I've been trying to cut it out and I kind of circled back to this product I used to use called Magic Mind. It's a little shot every single day. Tastes really good and it does help with focus I find. If it's a placebo, great, I don't care, but it's helping me.

**Lenny Rachitsky** (01:38:52):
That's amazing. I'm also a huge fan of Magic Mind. I'm friends with the guy that started it. So funny that you love it. I drink it often.

**Timothy Davis** (01:38:53):
Great.

**Lenny Rachitsky** (01:39:00):
I am on the subscription plan and I think he uses Shopify to sell it.

**Timothy Davis** (01:39:05):
He does. Yeah.

**Lenny Rachitsky** (01:39:06):
It all connects. Amazing. Do you have a favorite life motto that you often come back to share with friends or family? Find useful in work in life?

**Timothy Davis** (01:39:15):
Happiness is dedicated by expectations or dictated by expectations. That can't be more true more times than not, and it's similar. That's why I said there's two, and this one's similar to it. You won't see it for what it is until you stop looking through the lens of what you want it to be.

**Lenny Rachitsky** (01:39:35):
Amazing. It reminds me of an equation a colleague of mine once shared. He wrote a book of emotional equations or life equations. It was happiness is reality minus expectations.

**Timothy Davis** (01:39:48):
Yeah. Love that.

**Lenny Rachitsky** (01:39:51):
Okay, next question. Who's had the most influence on you in your career?

**Timothy Davis** (01:39:56):
Well, we mentioned him before, so I got to bring him back up. Kasey Winters for sure. We were at a wedding. He showed me the original version of Google Analytics. For those of you that don't know, it's called Urchin, and when he showed that to me, it was, "Wait, you know all of this information about users coming to the site." I knew I wanted to do marketing, but at that moment I knew I was going to do digital marketing and watch him grow in his career. He's watching me grow in my career. We still balance each questions off of each other. We cannot not have a phone call under an hour. So definitely the most impactful.

**Lenny Rachitsky** (01:40:36):
Is there something about Casey Winters that people may not know? He's a two time podcast guest, huge friend of the show.

**Timothy Davis** (01:40:44):
Casey is really good at tennis, like insanely good at tennis. You want to know how good? This is how good he was. In high school, he played ... I'm pretty sure it was our senior year. He hadn't played in a year, maybe a year plus. He was still ranked top 10 in the state of Louisiana for tennis players. Hasn't played in a year and still considered one of the top 10 players. Insane.

**Lenny Rachitsky** (01:41:15):
Did not know that. I actually played tennis in high school, and so that's amazing. I did not know this. Thanks for sharing that. Timothy, this was incredible. I think this is going to help a lot of people figure out [inaudible 01:41:28] marketing, run more paid growth ads, figure out who to bring in to help them do this. Thank you so much for sharing and for being here.

**Timothy Davis** (01:41:36):
Of course. Appreciate the time.

**Lenny Rachitsky** (01:41:38):
Bye, everyone.

**Lenny Rachitsky** (01:41:40):
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.

---

## [6/16] Lessons from scaling Uber and Opendoor | Brian Tolkin (Head of Product at Opendoor, ex-Uber)

**Lenny Rachitsky** (00:00:00):
You've worked at two businesses that have done incredibly well combining product in ops.

**Brian Tolkin** (00:00:03):
Uber always has this mentality and Opendoor does two of the product operations, twin turbine jet plane where you can fly the plane on one engine for a little bit if you need to, but it's operating most efficiently and effectively if both are working together.

**Lenny Rachitsky** (00:00:17):
What has having been in ops done to make you a better product leader?

**Brian Tolkin** (00:00:21):
Gave a really deep understanding of how the business actually works. It's a pretty good foundation for them going on to say, okay, what do we actually want to build in a more scalable technology way.

**Lenny Rachitsky** (00:00:31):
Something else I've heard that you're very good at is staying very calm under pressure.

**Brian Tolkin** (00:00:34):
I've slept on the floor in China before launching uberPOOL, and when you reflect the stress onto your teams, everybody tenses out. It counterintuitively doesn't produce better outcomes.

**Lenny Rachitsky** (00:00:51):
Today my guest is Brian Tolkin. Brian is currently head of product and design at Opendoor. Before that, he spent nearly five years at Uber where he joined as employee 100. Before Uber had UberX or uberPOOL or any shared rides, he actually started on the ops team at Uber, moved into product, ended up leading product and launch of uberPOOL, and then taking it global. He also started the product operations function at Uber. Before that function was really even a thing, which I didn't know until the chat that we had. In our conversation, Brian shares a ton of lessons about building products with a heavy operational component. Also, how to run great product reviews, how he implements the jobs to be done, framework and Opendoor's successfully.

**Brian Tolkin** (00:02:00):
Thank you, appreciate it. Thanks for having me.

**Lenny Rachitsky** (00:02:02):
First of all, just a huge thank you to Kayvon Beykpour for connecting us, introducing us. He said all kinds of amazingly nice things about you. He also gave me some very hard questions to ask you. I hope you've come prepared.

**Brian Tolkin** (00:02:12):
Terrific. Put me in my hot seat.

**Lenny Rachitsky** (00:02:14):
Okay, I want to spend a bunch of time talking about product and ops. You started your career in operations. At Uber you actually started on the ops team and you moved into product. You've also worked at both Uber and at Opendoor, which have both huge operational components. I think it's really rare that people, one, see a company scale to the heights of Uber and Opendoor with such a heavy operational component that are still tech companies and also it's really where someone starts an ops and then moves into product and ends up where you are, where your chief product officer, really successful company. So I have a bunch of questions here. Maybe the first is just what has having been in ops done to make you a better product leader? How does that change the way that you operate as a product leader?

**Brian Tolkin** (00:02:58):
Starting on the operations side gave a really deep understanding of how the business actually works. You are truly operating it day in and day out and the success of the city is in large part driven by the inputs that you are putting into it every single day on the ground and whether or not there was rain that weekend, which was a nice driver of metrics, but talking to customers every single day like one-on-one onboarding drivers responding to support tickets, there's no centralized support team, there was no closer to the customer, right? And so I think that foundation actually for really understanding what moves the business and being super close to the customer actually is a pretty good foundation for them going on to say, okay, what do we actually want to build in a more scalable technology way?

**Lenny Rachitsky** (00:03:52):
**MUSIC** (00:05:09):
Pendo.

**Lenny Rachitsky** (00:05:15):
**Brian Tolkin** (00:06:56):
Yeah, it's a great question and I think Uber always had this mentality and OpenDoor does too of like a twin turbine jet plane where you can fly the plane on one engine for a little bit if you need to, but it's operating most efficiently and effectively if both are working together, and I think that's really true, right? The reality is operations teams, local teams, can iterate faster, can scale talking to customers really much more efficiently, have great qualitative insights, and so if it's seen more as a harmony instead of a competition, I think that's really, really helpful where it's like, okay, how do we get the insights that are happening day in and day out in the field, on the ground, whatever that may be, and help us build better products because of that, right?

**Brian Tolkin** (00:07:50):
Like a PM sitting in San Francisco can't be in Opendoor's case 50 markets, walking houses every single day in Uber's case, whatever, a thousand cities understanding the nuances of safety in South America and it's just not possible, but what you can do is foster a really good relationship and a really good feedback loop of how people who do deeply understand those things can help give insights. Now is actually the birth of product operations was that insight as well.

**Lenny Rachitsky** (00:08:22):
Can you say more on that?

**Brian Tolkin** (00:08:23):
Yeah, sure. So, sorry, I should probably define what product operations was. At Uber it was basically this notion that we had centralized, this was later in my career at Uber, but we had a centralized product team building stuff mostly in San Francisco, not strictly through the Ross, but at this point around the world, but mostly in San Francisco and then we had a very globally distributed operations team, and there was a bidirectional feedback loop that wasn't super strong and that feedback loop was basically when the EPD teams in San Francisco built new features, how do we effectively put it in global markets and then how do we effectively get input from global markets to better build features. And so one solution to that problem, our solution at the time was to start up a new function called product operations who had accountability and reported into operations but physically sat with and operated much like a member of the product team to help solve that.

**Lenny Rachitsky** (00:09:23):
Is that maybe the first time there's a... Did you invent product operations as a function?

**Brian Tolkin** (00:09:28):
I don't think so because at the time, I believe Google had a function, I can't remember what Google called it was something slightly different, but I met with a few folks who had been in similar type roles at Google and a couple other places, so I don't take credit for certainly for inventing IT and other people have actually dabbled in this model at Uber before me there was just a formalization of it and our actual building out of the organization, et cetera.

**Lenny Rachitsky** (00:09:54):
Did none of that. Sounds like you basically helped make it a thing. I know you're being very modest, I think. Coming back to your point about decentralized operations teams, something I've read is that search pricing came out of one GM and a market just testing, emailing all the drivers, hey, we're going to give you extra if you drive on Saturday night. Is that true?

**Brian Tolkin** (00:10:15):
That would've been probably a little bit before my time, but that being said, one thing that is true is that surge pricing for actually quite sometimes all of 2012, certainly 2013 probably, I don't know when we necessarily switched, was very much a human in the loop system or a very manual system where GMs in every city would control basically the parameters in which surge would operate and so much of the time that would need, for example, Monday through Friday, there would be no search, it couldn't flip on, and then Friday nights and Saturday nights it would flip on from whatever you set, 7:00 PM to 3:00 AM and the cap was X, whatever the cap was. And then within those parameters the algorithm would optimize for what the price was. But yeah, GMs controlled whether it was on or off and what geographies were surging.

**Lenny Rachitsky** (00:11:16):
Wow, I didn't know that. Was that out of we believe we are better than the algorithms or we just don't have time to make them amazing yet, so we're just going to help them along?

**Brian Tolkin** (00:11:25):
Yeah, I think it was probably a function of a bunch of stuff, one of which is like, hey, this is a fairly new concept and it's powerful and dangerous and so let's make sure we understand what's happening. The second is this belief that local city teams know their cities best and so you might know that an event is happening, a baseball game gets out and it's like, oh, I know that this baseball game's going to get out at 10:00 PM so I'm going to set surge at 9:45 and the algorithm may not be able to pick that up. And then the third is the technical constraint of nowadays clearly it's all automated, but it's really hard to build a fully dynamic, always on geospatially aware pricing system and not just a little bit of time.

**Lenny Rachitsky** (00:12:17):
That makes sense. I feel like you're full of wild stories from your time at Uber. Is there one that comes to mind of just, I think you helped scale in China, uberPOOL?

**Brian Tolkin** (00:12:17):
Yeah.

**Lenny Rachitsky** (00:12:29):
Maybe that's the one. I don't know. Can you share wild story from early Uber days?

**Brian Tolkin** (00:12:31):
Yeah, so in the early days of Uber, one fun story is obviously UberX is a random mainstream product but has a funny, silly name, UberX. This product in the early days was going to be all hybrid and had a bunch of different potential names. I was not personally driving this, this was someone else on the operations team, but they built the model for what this product could be and there's no name for it yet, so it was going to be a placeholder. So what do you put in some placeholder? X. So UberX and then the company was moving quickly enough, the product got the green light, it launched, and here we are, I don't know, 12 years later, 11 years later, whatever it is and UberX is the name that stuck.

**Lenny Rachitsky** (00:13:21):
That is hilarious. I love it. So it was a placeholder. It's like many products start that way where they're like, this is just the temporary name, and they're like, okay, I guess everyone just knows it this way now we're going to stick with it.

**Brian Tolkin** (00:13:31):
Exactly. It's too expensive to change and rebrand at this point.

**Lenny Rachitsky** (00:13:34):
That's an awesome story.

**Brian Tolkin** (00:13:36):
One that is good about scaling Uber uberPOOL in China is we were launching Uber pool in China and this was going to be, China at the time was pretty big for Uber, but uberPOOL was not there yet, and so we were going to launch. And myself and a few other folks were in Chengdu China, which is the first Chinese market that we were launching uberPOOL in and we were going to be on the ground took to launch. We wanted to go live at, I believe it was 6:00 AM for rush hour on, I don't remember the day, but whatever, Monday morning, and so we're there over the weekend getting ready to set up and at the same time we were doing some data center testing. And so we flipped on all the testing infrastructure and thought it was going to work and nothing works, and the matching algorithm just isn't working and we're like, oh my god, now it's whatever, 5:00 PM the day before we're supposed to go live, 6:00 PM, 7:00 PM okay, let's get on the phone with the US, try and figure out what's going on.

I remember I slept about 30 minutes that night between 2:00 and 3:00 AM being like, okay, well, we have to go live at 6:00 AM I think there was some press around it. We were planning on going live and I think we got everything finally working at probably about five 30 or six in the morning and launched just in the nick of time. And I'll never forget, we launched, it was great, we monitored, everything was good, and then we walked out for breakfast at 7:30 in the morning. Everyone sleep depressed, no one slept all night and we got these pancakes street food things and I have to imagine they were not that good, but in my mind it was the best meal I've ever had in my life.

**Lenny Rachitsky** (00:15:25):
It's like a meal after a marathon or a big hike.

**Brian Tolkin** (00:15:31):
Exactly. Yeah, exactly.

**Lenny Rachitsky** (00:15:32):
Everything's so delicious. This comes up a lot of just these moments that are so incredibly stressful and hard and leap deprived end up being the best memories and the best stories to tell and things you look back at fondly. It's so weird how human nature is like that.

**Brian Tolkin** (00:15:46):
Yeah, I mean another one more recent for Opendoor was when COVID hit, physically we buy and sell homes, and so we were physically going into people's homes and suddenly March 2020 going into people's homes was not something people were comfortable with. And you look at the real estate data coming out of China at the time and it looked like coming to a standstill, and so we actually turned off the core business and we stopped buying homes for a few months. hey, we can't go in and we don't know if anyone's going to be buying any homes, and so what do we do? And we took those few months and then came out the other side and had virtualized the whole process. Then it was pretty stressful, right, because looking at a business that relies on going into people's homes and suddenly you can't do that anymore, what do you do? So, again, a fond memory to look back on a very stressful time in the moment where it feels very, very difficult.

**Lenny Rachitsky** (00:16:51):
Just since you mentioned Opendoor, I think many people have heard of Opendoor. Maybe just give a quick explanation of what Opendoor does for people that aren't exactly sure.

**Brian Tolkin** (00:16:58):
So we're a digital platform to buy and sell real estate. The core product today is a seller focused product where people can go online, enter some information about their home, and we'll make an all cash offer to be able to sell simplicity and certainty. So the product really works for people who want something that is certain and simple and easy. I don't know if you've ever sold a home, but it can be a very, very, very successful difficult process with showings and open houses and how to price it and will it sell and all of that stuff. And so we offer basically a way to skip the whole process.

**Lenny Rachitsky** (00:17:41):
So you basically sell your house to Opendoor and it's just like, cool, done, move on.

**Brian Tolkin** (00:17:45):
You picked your closing date, you move out when you want. Yeah, there's no hassle.

**Lenny Rachitsky** (00:17:53):
Sounds amazing. I want that. Coming back to ops and product, just to close this thread again, you've worked at two businesses that have done incredibly well combining product and ops. Are there any just broad lessons you've taken away from how to make these two teams and functions work well together and to build a business that's very ops heavy but also offer driven?

**Brian Tolkin** (00:18:15):
The first one we touched on, which is a, there's just got to be mutual respect. Both functions have their time and their place and their skillsets, and you just don't build big businesses of this type without respecting the fact that that both need to exist. The second, particularly on the product and engineering side, is really understanding where and how the technology leverage comes from the business and then being really focused on making sure generally, especially in the earlier days, you are more limited on the technical resourcing side than you might be on the operational resourcing side. And so how do you be really focused on where to invest your time, effort, and energy technically, which is why most of the engineering effort for Uber was on the dispatching system and the pricing system. That's just where the leverage was at the time, given the scarcity of resources.

**Brian Tolkin** (00:19:11):
And so I think the second one is being really intentional about where those techs are and then being really forthcoming and saying, hey, that means all these other places where yes, it can make things easier, more efficient, et cetera, et cetera. We are okay not investing in right now, and that needs to be an explicit decision and very transparent. But then the last bit I would say is a deep understanding that the real world has entropy and it's hard and it's messy for us at Opendoor, we go into homes, someone may not be home, scheduling may be off, at Uber the driver may cancel the radio GPS. All these things happen, right? Computers are deterministic, but humans aren't, right? And so building products that have a little bit more flex or a little bit more fail safes in case those things happen becomes a little bit more of a paramount.

**Brian Tolkin** (00:20:08):
One other thing, the last thing I would say is I think that the companies evolve as well. So what I talked about at the beginning of Uber being very focused from an engineering and product side on the dispatching system and the pricing system, obviously over time not to evolve now it centralized all of these functions as the company got bigger and more mature and scale and optimization started to be more important and expansion and that Petri dish of trying new stuff and the tools got better and the tech got easier and there was more internal infrastructure. And so over time things can start one way and shift over time as the business needs.

**Lenny Rachitsky** (00:20:52):
Let's actually spend more time there. You keep saying things that make me want to dig deeper. So at Airbnb we went through the same thing where there was all these local ops teams driving supply, finding homes, bringing out the platform, and then there's this tipping point where the product in organic growth or word of mouth ended up driving more and then orders of magnitude more. So there was no need for these folks to spend time doing these things. Can you just maybe share an example, either we Opendoor, when you talk about there's a time and a place and a skillset for ops, how that evolved? What was the team doing initially and then what did they end up doing as things grew?

**Brian Tolkin** (00:21:25):
Yeah, I mean, maybe a very easy good example to pick just one part of the Uber process in the early days is at small scale, actually back when it was Uber black drivers, every driver was individually onboarded in a 90 minute to a two-hour in-person in the office onboarding with deep setting of expectations. The next version of that... So that's obviously very ops driven. The next version of that is a small classroom type setting of three or five or six drivers at a given time. Also, very ops driven. And then as we got into more mass market products like Uber Taxi or UberX, it was like, okay, maybe 20 or 30 at a time. So now it's a little bit bigger classroom setting. And we said, okay, let's make a video. Instead of giving verbally the same presentation, let's just make an onboarding video and that was the next set of scale, but now suddenly we have a different problem, which is okay, you have to validate all of these credentials.

**Brian Tolkin** (00:22:32):
So most driver's license who they are, all that stuff at one person, easy at three to four at a time, easy, 10 at a time, a little more challenging but fine. At 20 at a time, okay, you're starting to run up onto it now you fast-forward six months and you're doing a thousand a week or whatever, suddenly your system breaks and it's like, okay, we have reached the point where operational system improvements is no longer viable. So, you say, okay, we have gone from the iteration stage to the scale stage and technology is uniquely good at scaling. So now we say, okay, instead of having a bunch of folks around the world taking pictures of driver's licenses and validating and doing all that stuff, how do we integrate with some type of OCR technology or auto recognition of driver's licenses that feeds to a system that knows what a driver's license is or can do automatic validation and suddenly you've done two things.

**Brian Tolkin** (00:23:27):
One, you've scaled your system, and two, you've just created a ton of time for what at the time was probably dozens if not hundreds of people running these onboarding sessions all over the country, the world at the time to do other stuff. And so now you can level that up and say, okay, do we do more analytics? Do we do more figure out the next process that needs optimization or whatever the case may be in that virtuous cycle just continues.

**Lenny Rachitsky** (00:23:53):
The way I like to think about this is do things that don't scale and then scale the things that you're doing. That's the phrase I always come back to.

**Brian Tolkin** (00:23:58):
Exactly.

**Lenny Rachitsky** (00:24:00):
This reminds me of a hot take that previous podcast guest shared in a newsletter post Casey Winters. He talked about that operations is usually, and it's a hot take, that operations is a sign of inefficiency and over time your job is to squeeze that away and make it product software as much as possible. Doesn't mean you always get there. Thoughts?

**Brian Tolkin** (00:24:23):
Yeah, I actually don't. Fundamentally, it depends on what the operations is, but I don't fundamentally disagree, but I think that the right lens to think about it is... And then those folks can move on to the next challenge. And so there's always another hill to climb. And so I think that was one of the things at Uber and Opendoor where there's this culture of on the ground experimentation that's really helpful where we were just talking about driver onboarding may now be solved with technology so you have a few extra hours a day. How do we get better at optimizing the UberX system? How do you start tinkering with food delivery? How do you start thinking about higher capacity vehicles? How do you think about better feedback loop for those manual surge pricing toggles that we talked about? So I generally agree it just generally free across and solve more problems.

**Lenny Rachitsky** (00:25:21):
It feels like a big part of this is making sure the operations teams understand there's more opportunity, even if this ends up being automated, your job is not going to go away. We're going to find something new to try and experiment and do things that don't skip.

**Brian Tolkin** (00:25:34):
Yep.

**Lenny Rachitsky** (00:25:34):
Awesome. Okay. Going a completely different direction.

**Brian Tolkin** (00:25:37):
Great.

**Lenny Rachitsky** (00:25:38):
I hear you're very good at product reviews.

**Brian Tolkin** (00:25:40):
Okay.

**Lenny Rachitsky** (00:25:41):
A few people told me this. I'm curious how you set up a product review and any things you've learned, any tips for how to run an effective product review?

**Brian Tolkin** (00:25:48):
That's very whoever mentioned that. But yes, big fan of doing them actually in particular to maybe bridge the conversations in companies that have ops driven cadences or start out very ops driven because the cadences can sometimes be different. And so the operational cadences that you might have something like a WVRA weekly business review may not be conducive to always picking your head up and saying like, Hey, where's the product going on a slightly longer timeframe. And so I think product reviews in general for all companies are probably really helpful, but actually in particular for some of the product and operations led companies. In terms of things I've learned, I think being really intentional about what the goals are, I think it's okay to say that there are two goals, a goal of accountability and inform to an audience.

**Brian Tolkin** (00:26:43):
But also most importantly, I think this is the primary goal is to help make the product better, to help the teams think through a problem and to have that, again, back to our earliest conversation, be a very intellectual conversation about the work and how to make the product better and not super scary. Product reviews hopefully are not feeling like firing squads. That's a scary environment to be in and not necessarily one that's conducive to how do we make the product better. Obviously sometimes the conversations have to get a little intense, but in general that's what we're shooting for is something that helps the team go back and think through how to make the product better.

**Lenny Rachitsky** (00:27:24):
So the two goals you try to communicate for your product reviews, accountability slash informing people what's happening, but also just like we are here to make the product better and setting that context. Yep. Is there anything you'd do specifically to make it not feel like a firing squad? Like you're coming in here to be attacked and criticized? Do you set context at the beginning of the meeting? Is this just a part of the culture?

**Brian Tolkin** (00:27:43):
Yeah, I think definitely part of the culture, but also I am a firm believer in general that the people closest to the problems also have the best context to solve that problem. And so as a more senior voice in the room, often the job is probing, asking questions, throwing out ideas in a way that says like, hey, this is an idea. This is not a mandate, this is a thought. And if there's context missing that would inform the product direction, then providing that context in not a question asking sense, but hey, this is context that you might not be aware of. And so I think it's all in how you show up as a leader and what that looks like in terms of probing and pushing the team on dimensions that they may not be thinking about. And then understanding that the team is bringing a perspective that you don't have, which is they think about this problem 40, 50, 60 hours a week, and you might think about this problem three hours a week. So you bring them a breath, the team brings a depth in haven't been there yet.

**Lenny Rachitsky** (00:28:49):
I don't know if you heard Dharmesh Shah's episode or his thing on flash tags. Have you seen this?

**Brian Tolkin** (00:28:54):
I have not, no.

**Lenny Rachitsky** (00:28:55):
Okay. He has a whole system. So you talked about how as a leader you want people to not take everything you tell them as feedback as I need to do this. So he has a whole set of hashtags that communicate how important this is to him from hashtag FYI to suggestion, to a plea.

**Brian Tolkin** (00:29:13):
Yes.

**Lenny Rachitsky** (00:29:14):
A plea to you.

**Brian Tolkin** (00:29:17):
This was actually explained to me. I don't think I've seen the original source, so I'll go back and watch it, but this was explained to me as I'm actually a big fan. I think that's great.

**Lenny Rachitsky** (00:29:26):
Yeah, just get everyone on the same page. Okay. Maybe one last question here. Who do you try to invite to product reviews? Do you have any frameworks and ways of thinking of who to invite, who not to invite?

**Brian Tolkin** (00:29:36):
Yeah, good question. We, I would say have oscillated over time, but in general, big subscribers of the best conversations happen when they're relatively small, so try and keep it under 10. Could be wide distribution of the document. The artifacts created are actually really powerful and they're powerful for the whole team to understand. And secret power is they're very powerful for new people who are onboarding to be like, here are the last 20 product reviews, you'll get a pretty good idea of what's going on. But generally the conversation itself try and be relatively tight. We try to keep it under 10.

**Lenny Rachitsky** (00:30:15):
And these artifacts, you mean the recordings of the meeting that people can watch or?

**Brian Tolkin** (00:30:20):
Yeah. Or just the document depends on what the company culture is, whether you want to record it or just have the document either way.

**Lenny Rachitsky** (00:30:26):
And then is there some specific cadence you operate on? Is it like a weekly product review that people can sign up for? Does every team, how do you like to set this up the cadence?

**Brian Tolkin** (00:30:35):
Yeah, obviously it scales are with the size of the company. For us right now, what's working well is signup cadence. We have two slots a week that anyone can sign up for as their product area needs it. And then if there's something that we would love to see that we haven't seen in a bit, we do a little bit of all in telling to make sure that the work is generally cycling through on a quarterly basis.

**Lenny Rachitsky** (00:30:59):
**Brian Tolkin** (00:32:17):
Yeah. I think like all frameworks, the right answer is to pick your set of frameworks, have more tools in your toolbox, and then actually understand when and how to apply them. So we try to avoid being a hammer and everything's a nail. We try to for course the framework if it's not working. But I think what I really like about it is it forces you to put yourself in the customer's shoes. I think in a slightly deeper way and be a little bit more empathetic when I think about building at Opendoor versus say building at Uber or when you are building at Airbnb is we are not... Most people at Opendoor, we don't have homes to sell every week or every month, nor do we buy homes every week or every month. On average in the US is something people do once every seven years.

**Brian Tolkin** (00:33:10):
I'm sure the average at Opendoor is something similar, and so it's a little bit harder to be a customer. I took Uber every day. You probably use Airbnb a number of times a year. And so in some sense for some of those companies, you can bill for yourself, you would intuit the job to be done because you're just doing it for yourself. We don't necessarily have that context. And so a framework that forces us to be really thoughtful and intentional about how a customer might perceive our product is really helpful. The other thing that I like about it is the canonical version of it encourages you to think about the context in which the user's operating or the other things outside of your product that they might be going through.

**Brian Tolkin** (00:33:59):
And in our case, the home buying or selling journey often is a certainly multi-week, if not multi-month or multi quarter journey with a lot of complexity and a lot of conversations outside of our product. You may be talking to an agent, you may be talking to a friend, you may be driving around the city trying to find a house, and the framework is very flexible and encouraging of saying what is actually the job to be done of this user when they're thinking about our product and what is the context in which they're operating.

**Lenny Rachitsky** (00:34:29):
I'd love to go one level deeper to talk about how you actually implement it. Do you have templates of, you have a startup project as a blank, I blank, blank, blank? How do you...

**Brian Tolkin** (00:34:40):
I would say we're medium rigorous on template standardization or adherence. So we do have a template, the standard product review template talks about jobs to be done and has a section for what is the problem statement and what are the jobs to be done.

**Lenny Rachitsky** (00:34:58):
And this is a doc that when you're coming to a product review, the person running it and coming is filling out this document?

**Brian Tolkin** (00:35:04):
Correct, pre-filling it up, sorry, pre-filling it out. And again, I think we are not sticklers about always using that template, but I think the beauty of a template is yes, it sets expectations of what you expect, but it's also just easier often for people to be able to work off something. And so yeah, it's part of our product review template and then part of our planning process as well. Because we've used it for a while. I think there's been an internalization of the culture where people will also just start commenting about it or writing about it and saying, hey, what is the job to be done here? Or what is the user trying to do? Which is maybe another colloquial phrase in it. And so, yeah, I think there's a cultural seeping that has happened.

**Lenny Rachitsky** (00:35:49):
From memory, just what is in this template. So what's the phrasing that you try to use for setting up a problem?

**Brian Tolkin** (00:35:55):
Yeah, yeah. I mean, the specific framing, I would have to go remind myself on the template itself, but generally it looks like context, problem, potential solution, risks, risks/premortal and measurement of success. And then we also try to bucket our product reviews by stage. So you could be in the ideation stage, which might look very different than at the very end of the process. Like, Hey, we're getting ready to ship speak now forever hold your piece. Those two artifacts will also be very different.

**Lenny Rachitsky** (00:36:35):
Okay. So it's not as a blank the standard jobs to be done language, it's not exactly how you implement it's more just make sure we're thinking of it what is the problem for the customer? What is the context of their problem?

**Brian Tolkin** (00:36:47):
Correct. Yeah. Yeah, we're not math living our template.

**Lenny Rachitsky** (00:36:52):
Okay, awesome. Any other tips or lessons about just working well with this concept of jobs to be done? Maybe when you come into Opendoor and like, hey everyone, we're going to be thinking this way. Is there anything there that would be useful to people if they're trying to operate this way?

**Brian Tolkin** (00:37:06):
Recognizing that correctly implementing a framework, any framework, but if you don't in particular, we can talk about takes a little bit of time and getting used to and understanding. And so I don't think you can just like, okay, we're going to make the template and then that makes the content better. That just takes people's content and they wedge it into the template. It's actually the cultural internalization of like, hey, this might be phrased as the job to be done, but is this actually the job to be done? Let's talk about why the customer might be in that situation or not be in that situation. Or I think the job to be done might actually be something else.

**Brian Tolkin** (00:37:43):
Or you might say, hey, the job to be done is maybe an early day version would be the job to be done is to get an offer from Opendoor. And it's like, well kind of, but the broader job to be done might be price discovery for the customer. And so you can have a rich conversation where it's like, well, one might be a little bit influenced by our business goals. I don't think you just run around and people are like, yeah, I'm going to sell my house, but my goal is to get an offer from Opendoor. And so that's like, okay, the template might be the same, but it's actually the content that takes a little bit of cultural instantiation.

**Lenny Rachitsky** (00:38:21):
Got it. And it sounds like people talk from what is the job to be done that feels like a core part of the way you think about it. What is the job to be done? Just that language alone feels really powerful. Is there a resource or a book that you point people to help your team learn about the jobs to be done work? Is there one thing you find useful?

**Brian Tolkin** (00:38:38):
Not about jobs to be done. I do a lot more pointing people towards internal examples of where I saw other PMs maybe do as well or blogs and stuff. But your blog is a column when we pass around, not about jobs to done, but just about many topics.

**Lenny Rachitsky** (00:38:56):
I'm flattered. Thank you.

**Brian Tolkin** (00:38:58):
Yes.

**Lenny Rachitsky** (00:38:58):
I really appreciate that. I was also thinking as you were talking, you're friends with Kayvon and jobs to be done on Twitter was quite the journey for them, traumatic for a lot of people. I think it went very far to the extreme of the-

**Brian Tolkin** (00:39:11):
Yeah. I think they're more dogmatic about it.

**Lenny Rachitsky** (00:39:13):
Very dramatic. And so I guess it's a lesson here, maybe don't take it that far.

**Brian Tolkin** (00:39:19):
Yeah. And I think it probably, and I don't know if Kayvon would agree with this, I imagine he would, the generalized version of you pick the right framework for the right job and if you say there's one framework to rule them all and this is the only framework that works and then of course every problem into it, then we chop.

**Lenny Rachitsky** (00:39:38):
The way I think about jobs to be done is exactly the way you're describing it where it's just think from the lens of the job to be done for our customers. So for my newsletter, what is the job to be done of my newsletter to help you become better at your job as a product person building product. And that actually ends up being really helpful. And it feels like that's the way you guys think about it at opening.

**Brian Tolkin** (00:39:57):
Yeah, absolutely. And you're crushing it by the way.

**Lenny Rachitsky** (00:40:00):
Thank you. So are you. You talked about, I'm going to go into another question to deflect your compliment. You mentioned that Uber, there's a million transactions happening every second, it's massive scale. Opendoor is completely different. You have very few very large transactions. Yeah. I'm curious how you do experiments, if you do experiments, do you do A/B tests? What have you learned about just how to think through low sample sizes plus A/B testing?

**Brian Tolkin** (00:40:29):
Yeah, very hot topic of conversation. We do A/B test. It is obviously the gold standard. And so we do as much as we can. Of A/B testing there are parts of our funnel and flow that have more volume than others. So top of quality testing easier than down funnels, A/B testing purely product or tech features easier than A/B testing processes, operational processes. But you're totally right. We are not doing hundreds of millions of transactions a year. And so experimentation can be more challenging. And so I think one way to think about it is A, acknowledge the problem, which just to say don't, and we've made this mistake many, many times, but don't just force yourself into A/B testing without running the power analysis and say like, hey, are we going to get results? What is the size that will detect and what is the runtime of that experiment?

**Brian Tolkin** (00:41:39):
And be honest, is that acceptable? A second lesson here, is there certain experiments that are important enough and it's hard to triangulate signal in any other way that you may say a six-month runtime is an acceptable outcome and we are going to start it in June and we will be smarter for it for 2025 planning and we're going to set it and forget it and we're grateful we did, and that's okay. But the only mistake here is thinking you'll get an answer in a month when you won't, and then pretending you do and then waking up a month later and being like, "Well, it was insignificant and this and that." We could have known that. And then the third thing is, and experimentation is all about increasing your conviction in the problem or the solution. So the generalized version of the statement is, if there are parts of your funnel or flow that are low end and you can't run a canonical A/B test, how might you otherwise increase your conviction in the solution that you're building?

**Brian Tolkin** (00:42:47):
And there turns out there are a decent number of other ways to do that. The first best, most obvious is talk to more customers. But there are other statistical techniques that again, aren't as rigorous or good, but may be possible. You may be able to use observational data, you review with diff and diff, you may be able to look at sister cities or twin cities. You may be able to segment by geo, you may be able to reduce your power and say, hey, we're going to run at 80% confidence for all of our experiments instead of this traditional 95% because that's a worthy trade-off. And if we're wrong one more time out of 10, that's okay.

**Brian Tolkin** (00:43:28):
You can do a long-term holdout to match your intuition. And so there's a lot of other techniques to hone your intuition. There's a lot of other techniques to build conviction and confidence. And so we try to be very creative on doing that. And then the last bit I would say is if you're not going to get significance, if there's no other techniques at your disposal, then sometimes you just got to trust your intuition and ship it. And if that's what you believe, then that's what you believed and you shouldn't spend time trying to get false precision.

**Lenny Rachitsky** (00:44:01):
I want to spend more time on that last point, but real quick, the power analysis you talked about, there's people, don't know, there's calculators out there that you could just plug in, here's how much traffic I'm getting, here's how much of an impact difference I want to see, here's how long it'll take to find out.

**Brian Tolkin** (00:44:17):
Yep, exactly. Totally. And some of the calculators are great where you can also plug in the traffic and your acceptable runtime and it will tell you the minimum detectable impact and then you can gut check your own intuition. So you can play around with that.

**Lenny Rachitsky** (00:44:31):
Awesome. We'll try to link to one of those in the show notes. So, on the intuition piece, is there anything more there? Just like how you think about when you run the product team, just how you recommend people leverage intuition versus not. Because some companies are like, we're just going to trust the data. I don't really trust your opinion. You don't know this customer exactly. You talked about Opendoor, I'm not buying houses myself, so I don't know how much I can trust my intuition. Just what's your general advice to your product team of how to think about their intuition and when to rely on it versus not?

**Brian Tolkin** (00:45:06):
So, at Opendoor, for example, I'd say on the relative spectrum, we're quite data-driven. And then it's when we come into this challenge where we say, okay, that is another technique or tool in the toolbox. I think the generalized version of that is customers, products, people can surprise you. And so this happens all the time for people who build products. I'm sure you've got great stories from Airbnb where you saw something, put it out there just was very-

**Lenny Rachitsky** (00:45:35):
All the time.

**Brian Tolkin** (00:45:36):
All the time. And so I think there's definitely a humility to say if you can, if it's relatively easy to test your assumptions or test your hypotheses. That is always better to gut check yourself. And that takes a little bit of humility to say that, but we've all been wrong plenty of times. But if that's just not on the table, I think the reality is you can't pretend it is. And sometimes you got to use taste and judgment and then you say, okay, what is my conviction level and do I have just medium, low or high conviction? And if I have anything low or medium conviction and it's a decision of consequence, I should talk to more customers, check it with another person and see if their intuition matches. Something that gets me personally to the high bucket category.

**Brian Tolkin** (00:46:27):
And then I think the last part, which is some part of experimentation is if you just ship something because it's your intuition or it's where you want to see the product go, do you have a reasonable feedback loop to understand whether or not you are correct? So that could be customer support or ticket volume or feature adoption, whatever the case is, it may not be an output metric in the traditional A/B test, but some more rigorous system that says, hey, I had this hypothesis, we just shipped it for x, y, z constraint reason for red.

**Lenny Rachitsky** (00:47:04):
I think that's awesome advice. I agree with everything you're saying. You mentioned this word humility, and it is a good segue to something I want to talk about, which is Zillow. One of the most interesting things that's happened in your space is Zillow basically decided, hey, we're just going to do what Opendoor is doing, they launched it, you're basically frenemies for a while, and then they're like, no, it's not working. Now you partner and now you work with Zillow on this stuff. So are you able to share what went down there with the story of what happened, how it went, and where things are at now?

**Brian Tolkin** (00:47:36):
Yeah, I mean we do partner with Zillow. Zillow's been a fantastic partner for us and we've really enjoyed a working relationship with them. I think when you think about it, they have tremendous amount of reach and audience and all these online platforms have tremendous reach and audience. And we happen to have a fairly unique selling solution. And so there's a nice, not to use a business school word, but there's a nice synergy so to speak, between a high intended audience who's doing a lot of browsing and searching and discovery and starting their process on one of these online platforms and what we offer, which is transaction services that allow people to actually move particularly on the seller side. And so there's just a pretty nice symbiotic relationship there with the Zillow's and the regimens of the world. And so both of those have been great partners for us.

**Lenny Rachitsky** (00:48:43):
What do you think Zillow maybe underestimated or didn't get about the space that made it harder than they anticipated? That seems obvious. Of course, let's go down funnel, let's just do it all. And they're like, "Oh, shit, not working." What do you think they didn't get or what do you think they missed?

**Brian Tolkin** (00:48:58):
I guess continuing on the humility point, I won't necessarily pretend to be in their shoes, but I will say the business is challenging and it's complex from a number of different dimensions. It's not a traditional software only product, but you have to be really good at pricing. You have to be really good at product, you have to be really good at the operations. You have to be really disciplined at risk. You have to be really good in the capital markets. And so you have to put all of these functions together to build a vertically integrated product. And that's the reality. And so that is something that's been in Opendoor's DNA from day one because we started with a vertically integrated product. And so we can't deliver unless we have all of those things. Right? And so I think that's something that continues to help us to this day, is that vertical integration requires all of those pieces coming together.

**Lenny Rachitsky** (00:49:53):
That makes a lot of sense, and I think it's a good reminder of there are adjacent markets and businesses that always feel like, "Oh, we could expand to that someday." Such a big opportunity, this business could be so much bigger. And then you realize your business is completely not set up to operate this way. Zillow is very software driven, just I am not going to simplify what they do, but it's a website, very software. And obviously as we talked about Opendoor, a huge operational component. And then as you said, the pricing piece and the debt stuff.

**Brian Tolkin** (00:50:24):
Yeah. Yeah, totally. Yeah.

**Lenny Rachitsky** (00:50:26):
Yeah. So I think it's a really good reminder that just when you're taking on something completely different, it may not fit into the way your company operates and partnering makes sense. Anything else there that's interesting to share around the Zillow thing? I guess one is maybe it was just like, I imagine it was very stressful. Zillow's getting into it. "Oh, shit what are we going to do? They got all the traffic." Yeah, anything there?

**Brian Tolkin** (00:50:46):
Yeah. I mean, it's certainly stressful. I think in general we try to live by whether Zillow or anybody else being competition aware, but not necessarily competition focused. And the reality is vast, vast in our space. A vast majority of people still move the traditional way. And so this isn't something where it's like the size of the prize isn't particularly large enough short or anything like that. The reality is it's the largest asset classroom in the United States, and if we just stay super focused on, hey, who are the customers that we serve really well that we talk to every day, there's a little bit of confidence that comes from being able to stay focused on that regardless of the competitive environment, again, because it's not like the market is fully saturated.

**Brian Tolkin** (00:51:40):
This is the same thing back in the Uber days as well. It's like transportation is almost infinitely large. And so, yes, it feels like there's heated competition between Uber and Lester or whatever back in the day, but the reality is there's plenty of trips that happens and people need to get around sitting in plenty of different ways. That's neither Uber and more Lyft. And staying focused on how you can develop for your customer, I think is the best way to focus.

**Lenny Rachitsky** (00:52:11):
There's a podcast that will come out before this episode with Jeff Weinstein from Stripe who's building Stripe Atlas. They had a similar experience with AngelList launched a direct competitor to Atlas, and then they realized Atlas is so much better. Forget it. We're just going to send everyone to Atlas.

**Brian Tolkin** (00:52:29):
Really?

**Lenny Rachitsky** (00:52:30):
Yes. And I think it's the same exact lesson that if you just stay focused on jobs to be done, let's say, of what is the job to be done and do the best possible job, and knowing that the market is much bigger, that you're not really competing with someone else, another company, it's the default behavior in your case. It's like people are just buying their house the old-fashioned way. That's the actual competition.

**Brian Tolkin** (00:52:51):
Exactly. Yep.

**Lenny Rachitsky** (00:52:53):
Yeah. Okay. So, along these lines, something else I've heard that you're very good at is staying very calm under pressure and staying very levelheaded when things are really crazy. This is something that a lot of people are not good at, especially leaders. They stress everyone out things. You go crazy, they don't create a good vibe. And then two, something people want to get better. Leaders and non-leader are like any lessons, anything you've learned about just how to develop this skill?

**Brian Tolkin** (00:53:18):
I think part of this may have been sharpened in the early days of Uber. Everything felt like a fire drill all the time. So the only way to operate, but I think you almost hit the nail on the head in the question, which is a little bit of an intellectual answer of when you reflect the stress onto your teams, everybody tenses up and tightens up. And so it counterintuitively doesn't produce better outcomes. And so I think the other reality to remind ourselves, and these are a bunch of mantras that just are helpful in these moments, is you're never as good as you think you are. You're never as bad as you think you are. And so that more even keeled demeanor, I think allows you to have a clearer head when you're operating under the pressure and to think more clearly.

**Brian Tolkin** (00:54:14):
I think one of the maybe least helpful answers, but unfortunately, the reality is you got to be in some stressful situations to also have the perspective that cycles past the things past. And that remaining calm is what matters. And so maybe the advice there is reflecting on one of these situations happen, exposing yourself to them, not running from them and then learning from them so that the next time it comes around you can say, Hey, I've been here before. I've slept on the floor in China before launching uberPOOL and thinking we're going to miss a launch deadline. And what were the tools in my toolbox and my toolkit that showed me that in terms of getting it done or not, and what were the lessons?

**Lenny Rachitsky** (00:55:06):
I love that. So part of it is just go through this experience many times and you'll start to realize, okay, it's not actually going to be as bad as people may think. You mentioned this toolkit instead of tools. Is there anything else there that you come back to that ends up being helpful? You mentioned this mantra of it's never as bad as people think it is, it is never great as people think it is.

**Brian Tolkin** (00:55:23):
Yeah, I mean, I think exposing yourself to other people's stories or however you may learn is really, really helpful. So again, whether it's your podcast or books or biographies or one of the podcasts that I love is Founders Podcast, which talks about historical famous entrepreneurs. And obviously these are elevating very famous people already, but there's a lot to learn from a lot of these stories as well and understanding that the journey in pack is nonlinear, it never is for anybody. And so I think being able to expose yourself to other stories that even may if you don't have those personal experiences and then understanding how others navigate.

**Lenny Rachitsky** (00:56:11):
Got it. So just hearing of other people's crazy experiences and building on this muscle of like, okay, they've gone through crazy stuff, things work out.

**Brian Tolkin** (00:56:18):
Yeah, totally.

**Lenny Rachitsky** (00:56:20):
We'll make it through. Okay. I have this note here that I think either someone mentioned about you or you may have mentioned that product is finding the kernel of truth in a sea of ambiguity and signals. Does that mean anything to you?

**Brian Tolkin** (00:56:33):
Yeah, absolutely. I mean, I think in most organizations and to do the job effectively, you're going to get signals from everywhere and good ideas come from everywhere. It may be your CS team or CX team. It may be a customer directly. It may be a conversation you had. It may be a YouTube video you watched that sparked an idea. It may be feedback from an executive, it may be whatever. You went out and did a field visit. You are going to get a lot of inputs around what people think about your product, what people think you should do next. And I think that the core job is to understand what really matters, right? What is noise? What is a good idea, what is a suggestion and what is back to the jobs to be done for what is really going to move the customer forward?

**Brian Tolkin** (00:57:24):
And unfortunately that means saying no to maybe what sounds like some good ideas along the way, but if you can really figure out this is really what matters, that's the core part of the job. It dovetails even back to our earlier conversation. In the early days of building tech and ops companies is where's the tech leverage? Same question, where's the kernel of what really matters that tech can uniquely solve? And let's go do that and be comfortable with other fires maybe burning. That's what really, really, really matters. It's a hard discipline.

**Lenny Rachitsky** (00:58:02):
I love that. If there's not an example, that's totally fine, but when you talk about this finding this kernel where tech could be highly leveraged, is there any example that comes to mind of that working out really well?

**Brian Tolkin** (00:58:13):
I mean, I think back in the Uber days, I think it was like, hey, we're not going to build sophisticated tooling infrastructure. We're not going to build a centralized growth team. We're not going to build any of that. Because if you think about the early Uber network from the simplest form, you've got a rider and a driver and you need to connect them, price the transaction and issue some receipts probably and collect payment. So it's like, okay, do we do that really well? And until we do that really well, all the other stuff is noise. It's immaterial how efficiently we answer support tickets. That's not critical. And so now it's super critical, but in the early days it's not that critical. And even the customer acquisition costs may not be super critical, in this case it's growing rapidly on the things. And so pouring fuel on the fire may not be super efficient there.

**Brian Tolkin** (00:59:13):
So I think that's a very good generalized example. One other tip that maybe is helpful that I frankly constantly work on and try to get better at is all these ideas and feedback that comes from everywhere, make sure it's written down for a number of reasons. One, you can then go reference it, but two, part of the job is making sure the people who present those ideas are heard and respected and know that it's at least somewhere where it was considered. And then you can look at it all and say, okay, but what actually really, really, really, really matters here? And yeah, that's another tip.

**Lenny Rachitsky** (00:59:55):
When you say written down, is there tools you find really helpful here? Is it just put it in a big doc that we're keeping? Is there anything you find to actually operationalize that?

**Brian Tolkin** (01:00:03):
I've seen different companies do it differently, but wherever you tend to try and keep a backlog, whether that's a Google sheet or your actual backlog in Jira, whatever you use, but at least it feels like, okay, the context was captured, and the idea is there.

**Lenny Rachitsky** (01:00:19):
Awesome. Okay. I'm going to take us to a recurring segment on this podcast called Failure Corner.

**Brian Tolkin** (01:00:25):
Okay.

**Lenny Rachitsky** (01:00:26):
Is there a story you can share of a time you failed in your career had a big failure, and how that experience made you better?

**Brian Tolkin** (01:00:35):
We can talk about the very early days of uberPOOL, and the first launch, if you will in San Francisco. So, carpooling product, multiple riders in a Mercedes car. And we had this idea that it would be effective for commuters, this was very, very early days. And so part of the launch was, okay, we're going to beta it with just some popular commuting corridors with specific companies or maybe the marina to Google or whatever and try and match people according to what their companies and that's how we'll drive liquidity. And we very quickly realized that back to what the kernel of truth is here is liquidity is the only thing that matters. And there just wasn't enough. There was never going to be enough to do this company based thing. That wasn't the strategy that was going towards from us. And so the reason I don't know if it's a full failure is maybe this is true all failures, you learn from it, you pivot and you go on to the next thing.

**Brian Tolkin** (01:01:52):
And obviously we did that and then spent a lot of our time and effort trying to say, okay, what are the bounds of liquidity and driving liquidity that we can do to understand what the most important or what the limits of the product are. So as an example, we launched and maybe people in San Francisco. Remember this $5 anywhere in San Francisco, we work for promotion, which is obviously a great deal, obviously costs a lot of money, but the whole idea here is like, oh, okay, if liquidity is what really matters, if we were to juice that and really drive liquidity, how high can our metrics get? And then we can go chase more sustainable ways to do that. But it was a interesting fail case from launching and learning to say, hey, this initial strategy just isn't going to work, we got to go. And any part of it was a hedging strategy where with a small audience and there'll be a beta population, it's like, well, this one you just got to go.

**Lenny Rachitsky** (01:02:51):
I think a lesson there is also don't overthink it, don't try to get too cute. Just like we're trying to make a perfect beta test versus realizing, okay, we just need a lot more people in it. Also, your $5 promotion made me think of the early promotions of the ice cream and the bunnies delivery and all that stuff.

**Brian Tolkin** (01:03:13):
Yeah. That was by the way, a example of fully distributed, the benefit of having those early Petri dishes. Someone a local marketing manager like, Hey, this would be fun. Yeah, that would be really fun. The platform can support it. And those promotions were fantastic. And it started out, I can't remember if the first one was ice cream or puppies, I think it was ice cream. But yeah, branched into all sorts of stuff. Boats, ice cream, puppies, kittens, I think, and all credit goes to local ideas of inspiration just being focused on trying to grow within.

**Lenny Rachitsky** (01:03:56):
I love that we've circled back to the beginning of our conversation, product and ops working together, the benefits of both. Before we get to a very exciting lightning round, is there anything else that you wanted to share? Any last nuggets of wisdom that you think might be useful to people when they're trying to build product companies teams?

**Brian Tolkin** (01:04:13):
This was great. We covered quite a bit of ground. I think the only, I don't know if this is a generalized wisdom, but something I've been thinking about as my career has progressed a little bit, especially building out proper organizations, especially as more tools come online, it's very clear that there's different types of PMs and we spent a lot of time talking about once we can operate in the physical and the digital or the product and operations worlds. But even within that, there's more technical PMs who grew up in minute engineering discipline. There are people who came from ops and there are people who came from design and grew up in a more user experience background.

**Brian Tolkin** (01:05:01):
And one thing that I've been moved on as is build out the team is thinking similar to a product roadmap is it's not really about is this person good or bad or whatever, it's is this person's skillset and context to the problem that is really needed. And so back to that conversation on, hey, where do we get tech leverage? It's like, Hey, is this person who has this unique skillset as a PM for this problem type? I don't know if that's helpful, but it's something I've been spending a lot of time thinking about, especially this view job posting niche view product manager. Or it's actually like, well, how can we be a little bit more thoughtful about what the actual skillset needs off this type of team?

**Lenny Rachitsky** (01:05:47):
Awesome. It's like a person product fit.

**Brian Tolkin** (01:05:50):
There you go.

**Lenny Rachitsky** (01:05:50):
And I think it's because a lot of companies hire generalists and they're just like, we'll hire someone smart, ambitious, and with experience and general experience and then we'll put them on different things. So I think these are two different philosophies and it probably makes a lot of sense for an Opendoor with very unique type of business, with very specific skills that are necessary to be really good there. Okay, amazing. Brian, with this, we've reached our very exciting lightning round. Are you ready?

**Brian Tolkin** (01:06:16):
Let's do it. Can't wait.

**Lenny Rachitsky** (01:06:17):
Let's do it. First question, what are two or three books that you've recommended most to other people?

**Brian Tolkin** (01:06:23):
Shoe dog, Black Swan, Design of Everyday Things, and for a fun one, Shawn Theron.

**Lenny Rachitsky** (01:06:36):
Amazing. Four books for the price of two to three. I love it.

**Brian Tolkin** (01:06:40):
Apologies. I'll stick to the rules.

**Lenny Rachitsky** (01:06:42):
No, no, there's no rules. There are no rules.

**Brian Tolkin** (01:06:45):
There you go.

**Lenny Rachitsky** (01:06:46):
Next question, do you have a favorite recent movie or TV show that you've really enjoyed?

**Brian Tolkin** (01:06:50):
I like the sports docu ones on Netflix, so Full Swing, Drive to Survive, Break Points, tennis, golf, F1, all of them.

**Lenny Rachitsky** (01:07:02):
And wasn't there that Nike documentary recently with Ben Affleck?

**Brian Tolkin** (01:07:05):
There is, which I have not seen. So if it's good, I don't know if that's a recommendation or just an acknowledgement.

**Lenny Rachitsky** (01:07:12):
It's worth watching. If you like Shoe Dog, I feel like you'd enjoy it. It was entertaining Michael Jordan, things like that. Next question, do you have a favorite product that you have recently discovered that you really love?

**Brian Tolkin** (01:07:24):
So we just got a puppy and we are about to have our first child. And so all of my purchases recently are puppies and children focused. My buddy gifted us the Phi collar for our dog, and so we've been really enjoying that. Another one as I'm getting busier for news and stuff is Particle, which is a great news aggravation tool, AI news tool.

**Lenny Rachitsky** (01:07:54):
Cavan's wife's business. I am a huge fan, actually I think it just came out of beta and now it's like a full app that anyone can download. I just actually installed it yesterday again and I love it. I get these pushes every few... I don't know, it's like a couple of times a day of just like, here's what's happening. Also, congratulations I should have said on your pending child.

**Brian Tolkin** (01:08:16):
Thank you.

**Lenny Rachitsky** (01:08:17):
Lucky for you. I have a newsletter post with all the products you should buy, it's called New Parent Gift Guide for Product Managers.

**Brian Tolkin** (01:08:24):
Love it. I will definitely probably buy all of them.

**Lenny Rachitsky** (01:08:30):
If you don't already have them all. And now everyone's probably sending you their spreadsheets of all their favorite stuff there.

**Brian Tolkin** (01:08:30):
Exactly.

**Lenny Rachitsky** (01:08:35):
Okay, next question. Do you have a favorite life motto that you often come back to share with people either in work or life?

**Brian Tolkin** (01:08:41):
Well, mostly just stay curious.

**Lenny Rachitsky** (01:08:44):
Stay curious. I love it. Two more questions. Who has most influenced you in the course of your career?

**Brian Tolkin** (01:08:54):
One of the people who inspired me very early on in my product journey. I've been fortunate to have a number of very good mentors and obviously we talked about earlier while I was founders of books or me a lot from other people's journey. But one person who was personally important to me early in my product journey and very supportive of this guy named Jeff Holden, who was the chief product officer at Uber back in the day, and is like a young PM transferring into product really took me under his wing. And I think I'm forever grateful for that, for Jeff, for helping grow my career, but also try to pay it forward a little bit in terms of people who are going in the career. That was really meaningful for me.

**Lenny Rachitsky** (01:09:42):
Last question. I hear that your interview at Uber was pretty wild. Can you tell that story?

**Brian Tolkin** (01:09:48):
Yeah, I can. So, long story short, I was starting a company my senior spring before graduation and we had to go our separate ways. So I hadn't done traditional recruiting ever. And my buddy called me up and was like, "Hey, we're looking for smart, hardworking people at this Uber thing. Are you interested?" And quick side note, I had actually done some very early diligence work on these taxi apps back in 2011, looking at the time was Uber Cab and Cabilis and Taxi Manage can probably names nothing these days. And so I knew what Uber was and so I said, "Yeah, sure, I would love to." And so I had the first round of interview went well, and they said, great. And at that stage is come on onsite, the full enchilada one works, and this was post-graduation and was helping out some companies but didn't have a full-time job.

**Brian Tolkin** (01:10:51):
So I said, hey, I'm pretty flexible. How about next Tuesday? I said, great. So we scheduled it and then on Friday or Saturday or over the weekend I looked, I'm like, oh, Tuesday's, July 4th. I scheduled my interview for July 4th. And so I called my buddy and I'm like, hey, I am so sorry. I don't want to make people in on July 4th. Should I cancel? Should I reach out? Everyone's accepted. Whatever you do, do not cancel your interview. Like, okay, I'll be there on July 4th. And so I went in to the office on July 4th and there was a very small handful of people there. It was actually launching that day, was launching Uber's second ever product type, which was Uber SUV. And I had this, I think it was probably five hour gauntlet interview on July 4th from noon to five and missed my July 4th barbecue. And it was quite the experience, but I think maybe set the stage for some of the early days chaos. I'm very glad I didn't cancel the interview.

**Lenny Rachitsky** (01:11:58):
And was Travis involved in that interview or is it just-

**Brian Tolkin** (01:11:59):
Travis was involved in the interview. She was one of the... I think there were four or five people, and the two who were generally guiding my interview process and Travis and one other person starting that day. And part of the gauntlet interview was a simulation of the job, if you will. And so some of that was building some novels on the computers and some of it was writing potential emails to drivers and if she had the driver come in and you did chat, so I was in this room by myself typing away on the first part, which was building the model. And I hear him knock on the door and Travis comes in and he just sits down and says, "Hi, I'm Travis." I don't know who you are, but I'm Brian, and we have a 45-minute chat, or maybe it's been about half hour, 45 minutes. And clearly I'm not producing the work that I'm supposed to of the interview.

**Brian Tolkin** (01:12:59):
I'm supposed to be building this model. I'm supposed to email it back to the person who sent it to me. Clearly I've done nothing chatting with the CEO. And I hear a knock on the door and the door opens and the person sees that I'm talking to Travis, "Oh, continue, continue" and it was very good. Also, pretty intense conversation with Travis that definitely set the expectations working there.

**Lenny Rachitsky** (01:13:24):
And clearly worked out. And Travis was happy. Is what-

**Brian Tolkin** (01:13:28):
I hope so.

**Lenny Rachitsky** (01:13:28):
... I imagine.

**Brian Tolkin** (01:13:29):
Yes.

**Lenny Rachitsky** (01:13:30):
Amazing. Brian, thank you so much for being here. We went through everything that I was hoping to get through. Two final questions. Where can folks find you online, and is there anything you want them to check out that you might be up to? And how can listeners be useful to you?

**Brian Tolkin** (01:13:44):
Super kind. They can find me online on Twitter, LinkedIn, both just Brian Tolkin, my name. In terms of being useful, if you have a home to sell, feel free to go on to Opendoor. More importantly, if you have feedback on the product, but would love to hear it. Otherwise, any feedback on what people liked or would love to learn more about from what we chatted about would be super great. So I'd love to hear from you.

**Lenny Rachitsky** (01:14:09):
Brian, thank you so much for being here.

**Brian Tolkin** (01:14:12):
Lenny, I really appreciate it. This was great. Bye everyone.

**Lenny Rachitsky** (01:14:16):
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.

---

## [7/16] How embracing emotions will accelerate your career | Joe Hudson (executive coach, Art of Accomplishment)

**Joe Hudson** (00:00:00):
A lot of the people in my circles may have spent hundreds of millions of dollars to try to arrange a life that they enjoy, and it doesn't fucking work.

**Lenny Rachitsky** (00:00:08):
What is holding people back?

**Joe Hudson** (00:00:09):
It's the fact that they have emotions that they are not sitting, feeling, or expressing. Whatever emotion that you're trying to avoid, you are inviting into your life in exactly the way that you're trying to avoid it.

**Lenny Rachitsky** (00:00:20):
What the hell? Why would... Why does this... You have this really amazing insight. The voice in your head is often telling you bullshit.

**Joe Hudson** (00:00:27):
What most people try to do is they try to stop it, and that doesn't work very well. I think the best way to work with the voice in the head is to pick an experiment every day and respond to the voice in the head in a new way every day. One of my favorite responses is, "Oh, I see that you're really scared. Don't worry. I'm right here with you. I got you."

**Lenny Rachitsky** (00:00:43):
You're really big on helping people feel joy.

**Joe Hudson** (00:00:45):
It's such an important tool for productivity. If you say, I'm going to figure out how to enjoy what I do 10% more and you succeed, you are 10% more efficient. Not only that, usually, the quality is going to get a lot better too.

**Lenny Rachitsky** (00:00:57):
Is there just one thing you recommend that basically everyone try to experiment with?

**Joe Hudson** (00:01:02):
Yeah, it'll change your life dramatically really quickly.

**Lenny Rachitsky** (00:01:09):
Today, my guest is Joe Hudson. Joe is one of the most sought-after executive coaches amongst tech leaders and has worked with folks from OpenAI, SpaceX, Apple, and other world-class companies. Joe's unique approach to coaching draws from his spiritual, psychological, and neurological practices. In his intimate courses that he runs a few times a year, and in his podcast, he helps people create the life that they want with enjoyment and ease. In our conversation, Joe shares the two things that he finds most often keep people stuck in their life and in their job, and how to work on getting these things unstuck. Why the critical voice in your head is always wrong, contradictory, and telling you bullshit, and how to build a different relationship with that voice.

**Joe Hudson** (00:02:34):
Oh, thanks. Good to be here.

**Lenny Rachitsky** (00:02:36):
It's good to have you. I'm curious if there's any common themes that emerge often in terms of what is holding people back from success or just living the life that they want, especially ambitious tech people, which I know is a lot of the folks that you work with. Are there archetypes of like, here's the thing, often come up most often and hold people back?

**Joe Hudson** (00:02:57):
A nonspecific answer to that would be a critical voice in their head and a relationship with that critical voice that is not productive. Oftentimes, the critical voice in the head says, "You need me to be productive," but it's usually a huge detriment to being able to really be successful. Even if you are successful with a really critical voice in your head, you never get to enjoy it. You might have the money, but then you're like, "Oh, shit, I'm still miserable." Or, "I got the car, I got the house, I got the money, I got the successful career, and why am I unhappy all the time?" That would be, I would say one of the biggest ones. Another really big one that in a large category I would say is their relationship with emotions is all fakata. They are either trying to pretend they don't have them or compartmentalizing them or trying to manage them rather than harnessing them and falling in love with them. That would be a big place.

**Lenny Rachitsky** (00:04:06):
**Joe Hudson** (00:07:04):
I would say every single time the voice in your head is wrong. That critical voice in your head. To be specific, I'm talking about the voice in your head that is critical and repeats. There's the voice that says the same thing over and over again. You got to work out more, you got to work out more, you got to work out more. Whatever that is, it's always wrong, and that doesn't mean there isn't truth to what it says, but it's incorrect. As an example of this, you should work out more, you should work out more, you should work out more, or you need me or you just sit around on the couch as a great example of one. If I was your boss and I was sitting right next to you and I was criticizing you every couple of minutes, there's no way that you would say, "Wow, I really need you. I couldn't be productive without you." It's a bunch of crap. Or you should work out, you should work out.

**Joe Hudson** (00:07:58):
I see the truth that I'd be healthier if I work out. I get that. Should I? Is it really a should? There's another question. What makes it not say, "Oh, hey, why don't you enjoy working out? How do we get you to enjoy working out? What would motivate you to work?" It's not doing any of that. It's, "You should work out, you should work out." It's never an accurate thing that's happening inside of your head. Until you can see through that, it's hard to work with the voice in your head. You can do it, but until you see through it. The second part that I would say is that if you want to work with the voice in your head a new way, what most people try to do is they try to stop it. They try to control the voice in the head, and that doesn't work very well. Instead, I say, change the way that you relate to the negative voice in your head.

**Joe Hudson** (00:08:46):
Instead of being, "Okay, stop doing that, stop doing that." Say, "Oh, I see that you're really scared and I'm right here with you." Or sing a musical to it or just go, "Eh, I don't believe you." As a matter of fact, I think the best way to work with the voice in the head is to pick an experiment every day and respond to the voice in the head in a new way every day to have an experimental approach and say, "Oh, what's the relationship I want with this negative voice in my head?" Because right now, what it's typically doing for most people is that it says something and the person's like, "Yeah." Or, "Yeah, but I'm not going to do that, so fuck off." Or, "Yeah, that'll never work." Something like that is the response. What happens if you change the response to the voice in your head? That gives you a crap ton of freedom, and it's the beginning of what can be a state where the negative voice in the head disappears, which is really, really quite lovely.

**Lenny Rachitsky** (00:09:43):
Oh, wow. I love this so much because there's so much that comes from this thing in your head just shooting you down or scaring you about stuff. It's so hard. I hear this, but it's so hard. Next time I'm, I don't know, giving a big presentation, I'm going to hear like, "Oh, something could go wrong. You could look really stupid or you could totally forget what you're saying." It's hard to really intellectualize, okay, I don't have to listen to this. Is there anything more there just how to turn that around and be like, just shut up?

**Joe Hudson** (00:10:11):
The shut up usually doesn't work. Experiment with all of it. To me, one of my favorite responses is, "Oh, I see that you're really scared. Don't worry. I'm right here with you. I got you." Because part of the deal is that the voice in the head has assumed the position that it's like the boss, but it's really a little kid having a temper tantrum. If you listen to it, if you just dictated everything it said, it sounds like usually like a five-year-old having a temper tantrum, or it sounds like the way your mom used to chastise you or the way your dad used to chastise you or whatever, a teacher. It isn't, it's not logical, it's not thoughtful, it's typically not thoughtful, it's usually abusive. It's a lot of fear. It's one of my favorites, one of my favorite ways to respond.

**Joe Hudson** (00:11:06):
I've tried, I mean, gosh, dozens of ways, and there's a lot of neat effective ways. I particularly think it's really good to set up a series of experiments rather than just take the one that I have because the experimental mindset means that you can never really fail. Typically, somebody, like worse with the voice in the head, they fail and they go, "Ah, fuck it." Because we have this part of our brain called the habenula, and the habenula basically is the part of our brain that is trying to teach us not to fail over and over again. It's the thing that when you go on a diet or you go to work out and then you don't do it one day and you say, "Ah, fuck it, I messed up," and then you don't try anymore or you don't try for a couple of weeks or whatever, that's basically what's happening in that part of the brain.

**Joe Hudson** (00:11:48):
If you do it as an experimental thing, then you can't lose, you're just learning about yourself. You're learning about the voice in your head. The way I like thinking about that is people are like, "I understand the problem, but I don't have a solution." I'm always like, "If you understood the problem, there would be no question about the solution." If you fully understand the problem, you know the solution. All you have to do is really fully understand the voice in your head through a series of experiments and the whole thing goes away.

**Lenny Rachitsky** (00:12:16):
The advice here is next time you're hearing something in your head that you don't think is going to be helpful to you is try to respond to it in a different way from what you've been doing.

**Joe Hudson** (00:12:25):
I would be even more subtle than that, which is I really wouldn't care if you think it's helpful to you or not. I would just experiment with different ways of interacting with it. I wouldn't even do it as a goal of, okay, I want the voice in the head to be nicer to me. I would do it with the goal of just, hey, how do I learn? How do I understand this thing? It's a far more productive self-development. Generally, it's far more productive to learn, say about the river valley by walking through it, putting your feet in the river, going down the river with a canoe, smelling the soil, looking at the plants, than it is to say, "Okay, I am going to dam this river valley and try to..." You're not going to understand it the same way. You're going to make some mistakes.

**Lenny Rachitsky** (00:13:18):
Amazing. The second bucket that you shared of what you find most often is the root of what's holding people back is the way you described is your relationship with your emotions, which I don't think a lot of people would think of as the thing that's holding them back. Can you talk a bit more about what that looks like?

**Joe Hudson** (00:13:31):
Yeah, a great way to explain it. For the logical folks, so in 2012 or so, there was a person who wrote a book called Descartes' Error, and in Descartes' Error, the whole idea is that I think therefore I am, and this person's like, "Yeah, that's the error." It's a neuroscientist who looked at people who had damage in the emotional center of their brain, and they just basically ceased to be able to make decisions. Their IQ would stay the same, but it would take them half an hour to decide where to have lunch or decide what color pen to use. It would take hours and hours to make simple decisions, so their IQ would stay high, but their entire life would completely fall apart. What it tells us, and this is not exact, I'm paraphrasing for a podcast, but we make decisions in the emotional center of our brain. We use logic to try to figure out how we're going to feel.

**Joe Hudson** (00:14:23):
You can see this just by asking yourself the question, how many decisions have you made to feel like a success or to not feel like a failure or to feel happier, to not feel trapped? There's these huge buckets of emotions that we are trying to feel and not feel, and we're making decisions based on those. There's no such thing as a logical decision. That idea is like, I'm just going to be logical and just make a logical decision, it doesn't. Neurologically, it's just untrue. If you learn to fall in love with all of your emotions, then solution sets become available that you didn't have before. If you are like, "Oh, I can't feel like a failure." Well, then you're probably not going to take certain risks. If you are, "Oh, I want to feel loved and I can't feel unliked by people." Well, then you're not going to say your truth, and then the world is going to not give you the things that are truthful to you.

**Joe Hudson** (00:15:20):
I go into my boss, I say my truth, I get fired. Okay, I get fired, but then probably my next boss, I say my truth, I'm going to find a location where my truth is and how I want to be in the world is going to be acceptable. If I don't do that, if I'm constantly managing myself, then I'm not going to have that reality. It's really important, just for the decision-making part, how important emotions are to be able to fall in love with each of the emotional experiences so you're not making decisions based on your inability to feel stuff. That's like one, there's literally a thousand others. Most people, they feel stuck. They can have a big emotional release and they don't feel stuck anymore. When people feel overwhelmed, it's usually not the amount of crap that they have going on in their life. It's the fact that they have emotions that they are not sitting, feeling or expressing. That's another huge chunk of stuff.

**Joe Hudson** (00:16:11):
Depression is usually unmoved anger, is another example. There's so many levels in which people not able to feel really limits their life. Just one that's like almost everybody can relate to is feeling excitement is something that most people can only do for about 10 to 20 seconds. Most people aren't like, "Oh, I'm excited." If you walked into a Denny's and there was this person, a 60-year-old man and just excited and was excited for 10 minutes, you'd be like, "What's wrong with this person?" When we're excited, it's contagious. I walk into a meeting and I'm excited, probably other people are going to walk out excited. We're limiting just our ability to create collaboration by the fact that we're limited by our excitement. I could go on forever. There's so many experiences like this.

**Lenny Rachitsky** (00:17:06):
What I'm hearing is the core issues, we're not able to feel our emotion, but there's something there, like we are angry or scared. Because we can't feel it, we just can't break through that.

**Joe Hudson** (00:17:17):
Not quite. If you have somebody who's experienced a lot of emotional abuse in their life, then they might not be able to feel the emotions that they're having, and particularly where you experienced the emotional abuse. That might be the case for them. For instance, if you had physical abuse and I put a quarter in one of your hands and a key in another one of your hands without telling you which was which, you wouldn't be able to tell me if you'd suffered enough physical abuse because you've literally cut that sensation off. Similarly, people who've experienced emotional abuse can often not tell what the emotions are. Now, emotional abuse is, it's a big word. Generally, people don't even like equating the two. Just to agree on terms here, when I say emotional abuse, I mean you were told that you weren't allowed to have a certain emotion. That's what I mean by emotional abuse.

**Joe Hudson** (00:18:08):
Maybe you got fed every time you got angry or you got your love removed, or you got punished, or maybe every time you cried, you were made fun of. My particular background was that. It's when you weren't allowed to feel certain emotions, you were told to cut it off because it wasn't going to be safe because you're either going to get bribed out of it or punished out of it, or loved removed because of it or made fun of or whatever it is. That might be a step that one has to take, but the place you want to get to is where the emotions are fluid, where it just moves right through you. It doesn't mean that you lose control. As a matter of fact, losing control means that there's still resistance in it.

**Joe Hudson** (00:18:53):
The way I think about this is that emotions are like a tube, let's say, and there's water moving through the tube. You kink a tube one way, the water comes out a little funny. Kink the tube the other way, it comes a little funny. Let's say you have anger and that's the tube of, and you kink it one way and it's like, "You son of a bitch. You blah, blah, blah, blah, blah." You kink get another way and it's like, "Nice dress. You crank it another way and it's guilt. It's like, "Why would you ever do that to me?" Then if it's unkinked, then it's like Gandhi or Martin Luther king. It's this very loving boundary that's set. It's this clarity of purpose. That's how I think about it. The idea is to get to fluidity, to unkink the hose so that all of the emotional experiences come out with love.

**Lenny Rachitsky** (00:19:44):
I did a meditation retreat, a 10-day silent meditation retreat, which I know is a big part of your practice and something that led to the work you do now. A term that's coming up for me is non-judgmental awareness. Basically, experiencing the thing you're feeling and just letting it go, not attaching to it, not judging it. Is that along the lines of stuff you'd recommend?

**Joe Hudson** (00:20:03):
Yeah, it's definitely a huge part of it. There's a couple of things that I noticed get in the way, or the translation gets in the way there. One is it's like, think about emotions as like kids in your house. If a kid came into your house and you're like, "I will be non-judgmentally aware of you." You're probably going to get a very different response from the kid than if you're like, "Oh, I'm so excited to see you. I welcome you in my house." The emotions feel different if you're like, "I am non-judgmentally aware of this emotion," or, "Oh, cool. Oh cool, I'm sad. This is fantastic." If you have that welcoming invitation. One of the quotes that I'm most famous for is joy is the matriarch of a family of emotions and she won't come into a house where her children aren't welcome. A very joyful life is a life where all the other emotions are deeply welcomed, not accepted, not non-judgmentally aware of. I think those are really great steps, don't get me wrong. If you can be in non-judgmental awareness of an emotion, fantastic.

**Joe Hudson** (00:21:14):
The other thing that's a little bit different about what you said is that emotions do need to be felt. If you stop feeling an emotion, you have to constrict your muscles. I can watch somebody come in, come up for one of my coaching rapid coaching sessions. By the crease in their eyebrow, I can know that there's repressed anger. By the hunch in their shoulders, I can tell you about the critical parent that they had. The body takes on a shape that's based on the emotions that you've been taught to hold. You don't just by sitting there, well, it's not entirely true, if you just sit there and feel them in that way without the full expression, they will move eventually, but it might take a couple of decades. You can actually just move them. You can actually make the sound, move your body. All mammals do it. Like mammals releasing fear, they all shake. It's part of how we exist. That's also a really big part of emotional fluidity. It's not just being still and feeling them, it's letting the muscles move, making the sounds.

**Lenny Rachitsky** (00:22:22):
For someone that wants to get better at the skill of feeling emotions, being more in touch with emotions, helping their emotions be more fluid. I know this is a lifelong practice and not something you would just hear on a podcast, okay, I've installed this. Is there anything tactically you can recommend to a listener of just like, here's something you could do this week that'll help you, along these lines?

**Joe Hudson** (00:22:40):
We have a free audio on our website called Emotional Inquiry, and that would be the easiest way that I would, that's a really good entry level first step into emotional fluidity. The bigger problem is that every step has a different thing. If you're in the not aware of emotions, then that step may not be the right step for you. Though, if you are aware two or three emotions and you can do emotional inquiry, usually, it'll open up a lot of the other ones. There might be a point where you really need expression, and so emotional inquiry is not going to work. Just generally, the emotional inquiry practice is a really good one. What it is, is imagine you're a little kid and you pick up a toad.

**Joe Hudson** (00:23:28):
You're going to pick it up, you're going to look at it, you're going to feel it, you're going to smell it. Some little kids are even going to lick it a little bit. They're going to really want to explore this toad, and that's what emotional inquiry is, is a somatic mental experiencing of an emotional experience in your body and what is it like and what happens when you welcome it. What happens when you love it. What happens when you resist it. It's a series of experiments that you're playing with the emotion and observations and felt sense of the emotion, and that I find to be incredibly, incredibly useful for people.

**Lenny Rachitsky** (00:24:05):
Just getting very curious.

**Joe Hudson** (00:24:06):
Yeah, a lot of wonder.

**Lenny Rachitsky** (00:24:09):
By the way, the quote you shared about joy being the matriarchy of all the other emotions, imagine people have said this, but inside out too, I think is exactly a representation of what you're talking about, where joy is actually, she's like the protagonist almost. I don't know if you've seen it yet.

**Joe Hudson** (00:24:25):
I think I've heard about this. I haven't watched it, but I think where you think it's all about being happy and you find out that you have to accept everything for happiness to really work, kind of.

**Lenny Rachitsky** (00:24:34):
Exactly.

**Joe Hudson** (00:24:35):
Yeah, I have heard about it.

**Lenny Rachitsky** (00:24:36):
Anxiety takes over, and then things don't go well. Something else that I've noticed listening to a bunch of your conversations, you do these lightning round coaching sessions with people, and so I listen to a bunch of them. Something that was really interesting to me is that a lot of people come to you and they're like, "Hey, I have this problem. I can't do this hard thing I know I need to do." Or, "I have imposter syndrome just keeping me from doing this thing I need to do." you're often like, "No, that's not actually what's going on here. I can see that's not a problem for you. It's really this other thing." Is that super common where people think they need to work on this one thing, and it turns out that's not at all, they're actually okay at that and something totally else?

**Joe Hudson** (00:25:13):
I'd maybe put it a little bit differently. They're living in a story that describes an old version of themselves or they don't see themselves clearly enough to be able to see the whole issue, and so they're just kind of living with a story that's in the past. That's a really common thing. Oftentimes, if I do that in a coaching session, typically it's because they're showing me right there that it's not true. Somebody's like, "I'm so scared, I can't do anything." I'm like, "You just got in front of a hundred people to ask me a question. Clearly, you're not so scared that you can't do anything, so I'm not buying it." I don't do it quite like that, I do it with a lot more love than that.

**Joe Hudson** (00:25:54):
Oftentimes, I see that people's stories are a culprit, like how they describe themselves. A great way that you can really see this in folks is that nine out of 10 times that you compliment somebody, I really appreciate this thing about you, they're going to go, "Nah." Or, "Well, my sister is even more." Or, "If you knew me." They're going to do some sort of version like that. It basically is one of the indicators that they can't actually feel who they are. They would rather, in effect, call you a liar. You're lying to me or you're wrong than they would to actually accept the experience of being seen in that way. It does a couple of things. One of the things it does is it stops people from seeing themselves clearly. The other thing it does is it makes people forever want to be seen and complimented and acknowledged and validated because they're getting the food, but they can't digest it.

**Lenny Rachitsky** (00:26:59):
Do you have any advice other than working with you and you telling them, "Hey, here's actually going on," for someone to like, okay, maybe revisit, maybe this isn't actually a problem to see what's actually going on?

**Joe Hudson** (00:27:09):
We have a set of five kind of what we think are foundational tools for transformation, and we do these free workshops on them, and one of them is question the assumption. That's a really great way to have people start to see through their stories. At the beginning, I said, "Nothing in the critical voice in your head says is true." This is how it applies, so typically, there's an assumption that you have to make for the problem to be real. If somebody says to you, for instance, if somebody comes to me and says, "I am an asshole to my girlfriend." That's their problem. One, you have to assume that the girlfriend doesn't want you to be an asshole, as an example. Two, you have to assume that you know what being an asshole actually is. It's not just what your mom told you an asshole was.

**Joe Hudson** (00:28:04):
Three, there's some validation, there's another assumption, there's some clear thing that says this in the world. Everyone's like, that's an asshole and that's not, rather than what actually happens in the world, which is 50% of the people think that this person is an asshole and 50% think they're a hero. It's something like that. Also, another assumption there is that the problem is that you're an asshole, instead of that you're resisting the fact that you are an asshole, and therefore, it comes out sideways instead of really clear. There's so many assumptions in there. If you see through those assumptions, usually the problem starts fading away.

**Joe Hudson** (00:28:40):
It's like, "Oh, okay, what do I mean by asshole, exactly? How do I define that?" It seems like a silly thing when I am using this example of asshole. I remember this moment in my own development, I was in Bodega Bay, out of all places, and this very good friend of mine at the time was like, "Joe, you're an asshole." I was like, "No, I'm not." He's like, "Why resist it? Just fall in love with the fact that you're an asshole. Just allow yourself to be an asshole for just a minute, just one minute." I stopped, and I thought of like, I was doing venture capital at the time, and I could think of all the things that I had done that somebody would call an asshole, and all the ways in which I was unattuned to people, and I could, "Oh, yeah, okay, I can totally see that I'm an asshole."

**Joe Hudson** (00:29:32):
In that scene, not only in the scene of it, but as the shame fell away, oh, this is nothing I have to defend. This isn't something that I'm a bad person because of, I don't need to be ashamed of it. This is just some actions that I took. As that faded away, then and then over the next couple weeks, lo and behold, I became less of an asshole. It's a strange thing when you really grok that, that it's often shame that holds bad habits in place. Is it a problem that I'm an asshole, or is the problem that I'm ashamed of being an asshole? Is the problem that you're a smoker, is the problem that you're ashamed of being a smoker? Typically, there's so many assumptions built into everything that we call a problem, and if we look through those assumptions, the problems disappear. As in this case, it disappeared for me.

**Lenny Rachitsky** (00:30:25):
Wow, okay. There's a lot there. It connects to something I know you recently talked about, which is the emotion we want to avoid is the thing we end up experiencing a lot by trying to avoid it. What's going on there?

**Joe Hudson** (00:30:46):
Since I'm coach executives, let's do an executive example, so conflict avoidant executive. I don't want to feel the out of control in this that I do when people argue. I don't want to feel that level of out of control, so I am going to be conflict avoidant. I'm going to avoid conflict. Every way that we go to avoid a feeling, becomes the way that, that feeling gets invited towards us. We all know what it's like to work for a conflict-avoidant CEO or a boss, people get really fucking upset. Eventually, people get really upset. Decisions aren't being made. There's all this tension. It's never relieved.

**Joe Hudson** (00:31:30):
Then wow, sure enough, the conflict-avoidant CEO is dealing with a whole organization that's tense and they feel completely out of control and the fact that they can't do anything about, so that's an example. Or when I was younger, it was emotional abandonment. My dad was an alcoholic, and I didn't want to feel that emotional abandonment again, and so I would get really hard when I felt like people were leaving me, I'd be like, "What the dah, dah, dah, dah, dah?" Which of course, made them abandon me quicker, or I would try to caretaker people, which would build resentment, which would make people abandon me. Whatever emotion that you're trying to avoid, you are inviting into your life in exactly the way that you're trying to avoid it.

**Lenny Rachitsky** (00:32:14):
What the hell? Why does this happen?

**Joe Hudson** (00:32:14):
That doesn't sound right.

**Lenny Rachitsky** (00:32:14):
This is counterproductive.

**Joe Hudson** (00:32:20):
It is counterproductive. I think that the really cool thing about it is you can look at any issue that you're having in your life, so you can say, oh, one of the problems that I have in my life is that I am constantly in an argument with my girlfriend or boyfriend, let's say. What is the thing that you don't want to feel in that argument? I don't want to feel ashamed. You're getting in arguments because you don't want to feel ashamed, and that's making you feel more ashamed. What am I doing at that first time to not feel ashamed? I'm defending myself. Oh, and me defending myself is actually the thing that's starting the fight. You can backward engineer it to, oh, I don't want to feel ashamed, therefore I'm going to defend myself, which creates the fight, which makes me feel more ashamed.

**Joe Hudson** (00:33:10):
Any problem that you're having, you can actually backwards engineer it and see, oh, I can solve that problem by just being okay with that feeling. God damn it, you didn't take out the trash. Oh, that's a shame I don't want to feel. I'm not going to defend myself. I'm going to feel that shame. Oh, yeah, then maybe I'm going to say I'm sorry I didn't take out the trash, or I'm going to say, I don't feel ashamed, I don't want to take out the trash. I have to defend myself to get in the fight, and then I'm going to feel ashamed. You can reverse engineer all your problems this way. It's like it's such a cool hack, but it's very hard. For somehow or another, it's very simple, but very hard for people to utilize.

**Lenny Rachitsky** (00:33:53):
This is amazing. The advice is basically feel the thing and just come to terms with this is the emotion I'm feeling, and maybe, like an example, the asshole. Well, maybe I'm an asshole.

**Joe Hudson** (00:34:03):
It's what's required for you to love and accept yourself would be, and love and accept the emotion that you're having in the moment instead of resist it. There's that saying, what we resist persists. How do you fall in love with and stop resisting the reality on the ground? In doing so, it changes the reality on the ground.

**Lenny Rachitsky** (00:34:30):
In this argument with your supposed girlfriend, say you disagree about her perspective on what's going on. I guess that's not the root issue here. It's your feeling, it's not her perception.

**Joe Hudson** (00:34:41):
Hey, sweetheart, I really hear you want me to take out the trash, and that's not my truth. That's going to be very different than defending that shame. The defending the shame is going to be like, no, it's not my job to take out the chat. You're trying not to feel the experience, which is what's going to do it. The response isn't the important thing. It's really where the response comes from. It's so interesting because people are taught constantly, this is something we teach in the connection courses that it's really not about the conversation, it's about where you're at in the conversation. For instance, when my friend said to me, "Hey, you're a dick." Here's what he didn't do, he's like, he didn't go, "You're a dick. You asshole. You're being an asshole. You're being a dick. Fucking stop it." He was like, "Eh, you're a dick, so what? What's the problem?" He was coming from a place of love for me, and so I could not be defended in my response to him. It's really where you come from.

**Joe Hudson** (00:35:49):
It's the emotionally where you come from, that's the important part. Not as much what you say. You can see this, a perfect example of this is, this happens all the time in my work. Let's say there's a person who has a CEO and the person is scared of their CEO. Let's say this is the CMO, and they're, "I'm scared of the CEO. I can't say my truth. They're always getting upset. They're going to yell, blah, blah, blah, blah, blah, blah, blah, blah." I'll say, yeah, there's one person who says it though. The answer is always yes. That CEO has one person who they don't yell at, who they listen to, who they'll take the objection from, that they don't get angry with. It's because there's somebody who doesn't approach them in fear. It's because somebody approaches them a different way. Not with judgment, but like, "Hey, look, this is what we have to pay attention to." It's really about how you're coming at it and not what you're saying typically.

**Lenny Rachitsky** (00:36:52):
**Joe Hudson** (00:38:04):
You keep using the word advice, and I just want to, so for anybody who's listening, do not take my advice. Do not, do not, do not. Test it. Experiment. Set up an experiment, try it out. See if it's true for you. It's one, I just made this shit up. Somebody else could make up something different. It's like Jeff Bezos made up Amazon. We make stuff up, but we're humans. Two, is if you instead of just listen to it as a soundbite, if you actually do it and make an experiment out of it, you get to learn. It's in your bones. You get to see what's actually real for you. What's real for you in this moment might not be real for you what's in the next moment. For instance, I could give the advice that says, hey, you can't even control your thoughts.

**Joe Hudson** (00:38:55):
You can't even decide what thought you are going to have next is, it's just going to fucking happen. you're completely out of control, and so it's all a gift. Can you look at life as all a gift? Wow, that could be really useful for one person, but the other person, they feel so disempowered that they're like, "I can't even control my own thoughts. Man, I am totally trapped." They might really need at that moment to learn that, "Oh, I have empowerment, I have choice." That's the advice that they need to hear. Do the experiment, find out what's true for you in this moment. If there's a piece of advice, that's the one I want to give.

**Lenny Rachitsky** (00:39:40):
let's share more experiments people can run. Another is this thread that I feel comes up a lot in your work is you're just really big on helping people feel joy. Feels like that's the core of what you're trying to help people is feel more joy. Why is that so important? Why is joy so important, so powerful?

**Joe Hudson** (00:39:57):
I definitely would not want anyone to feel joy. I wouldn't want to push somebody into or like, "Hey, you should feel joy." What I would say that's a close cousin to that is that enjoyment is such an important tool for productivity. Enjoyment is such an important tool for living a meaningful life. Enjoyment is an amazing tool. As an example, let's say you drive a Ferrari, you're not going to say, hey, that's an efficient car. That's a super-efficient car. You're going to say, no, that's a fast car. Somehow in our own lives, if we get something done quickly, we're efficient, but that's not efficient. You can go and get something done quickly and then you're so exhausted. What's efficient is if at the end of whatever you did, you feel like you have more energy, like you're stoked, like, oh, I can't wait to do this again tomorrow. That's efficiency, is that you've actually used the least amount of energy to get something done. If you say, oh, I'm going to figure out how to enjoy what I do 10% more and you succeed, you are 10% more efficient.

**Joe Hudson** (00:41:13):
Not only that, usually, the quality is going to get a lot better too. If you enjoy running, you're probably going to run more than if you don't enjoy running. If you enjoy doing a podcast, you're probably going to make a better podcast and you're going to do it for longer if you enjoy doing it. There's something really, really important about enjoyment because it's not only a measure of efficiency, it also has a strong correlation with hire in most things has a strong correlation with how long you're going to do it, your staying power, the quality of what you're going to do, all of that. That's one of the reasons that I think enjoyment is really great. The other thing is that if you enjoy things, they feel different. I think one of the things that people do is they say this, they say, "I want to enjoy my life more, so I'm going to do less things, take out the trash, and I'm going to do more things like go on vacation."

**Joe Hudson** (00:42:14):
That's not how enjoyment works. You can enjoy taking out the trash or you can hate taking out the trash. That's a choice. Right now, somebody listening to this as an experiment that they can run is like, okay, you're going to stay listening to this for the next minute. How do you enjoy it 10% more? Typically, what will happen is somebody will take a deeper breath, they'll settle into their body a little bit more, they'll relax a little bit more. They might physically get more comfortable. There's a thousand things that they might do to just enjoy the experience 10% more. That, and in that, they're becoming more efficient in that the quality is getting better in that they're hearing what I'm saying differently. It's just a really powerful tool. What I know the problem to be is that some people will go, "Okay, now I have to enjoy life. I'm going to disregard all these negative emotions so that I'm in enjoyment." That doesn't work. It's horrendous. It's just a recipe for shit stew.

**Lenny Rachitsky** (00:43:18):
Along these lines, how much of the work is learning to enjoy the thing you're doing more versus finding something that you innately enjoy? Which one is more powerful? I guess, which do you point people to? Which experiments do you find people should run more?

**Joe Hudson** (00:43:31):
In our society, typically, it's how to enjoy what you're doing more. What happens typically is that if you find a way to enjoy the thing that you're doing more, you're more likely to do the things that you enjoy. It's just an order of operations thing. As compared to there's people, a lot of the people in my circles because of who I coach and everything, they're billionaires and they have spent hundreds of millions of dollars to try to arrange life that they enjoy and it doesn't fucking work. They actually have more power to make everything that they're doing exactly what they want to do, but that doesn't work. Flying the jet or buying the island or blah, blah, blah, blah, blah, doesn't do it.

**Joe Hudson** (00:44:25):
Whereas if you really learn to enjoy what's in front of you, all of a sudden, one thing that happens is that you're not as scared of enjoyment. You start saying, "Oh, wow, enjoyment makes me really effective, and so I'm want to do the things that I enjoy." You're more likely to do the things that you enjoy. Instead of having this story, I have to do X, Y, and Z so that at one point in the future, I can do what I enjoy. It's just an order of operations things. If you learn to enjoy the things that you're doing, you're going to naturally start doing the things you enjoy. If you only do the things you enjoy, you will not learn how to enjoy what you're doing very well.

**Lenny Rachitsky** (00:45:03):
You show this tip of how can I enjoy this 10% more? Just ask yourself, how can I enjoy this 10% more?

**Joe Hudson** (00:45:09):
Yes, right now.

**Lenny Rachitsky** (00:45:10):
Is there anything else that you find helpful for helping? Yeah, right now, how can I enjoy this 10% right now?

**Joe Hudson** (00:45:14):
That's right. It's not about changing anything in the external world.

**Lenny Rachitsky** (00:45:19):
Got it. Internally, what can I do? What can I change about the way I'm experiencing this?

**Joe Hudson** (00:45:23):
Yeah. I like to ask it as how do you enjoy it 10% more, because if it's what can I change, then there's trying, trying is usually not more enjoyment. It's actually usually letting go of trying that creates more enjoyment. The phrasing can really make or break the question.

**Lenny Rachitsky** (00:45:41):
Enjoy it 10% more. Say someone's sitting in a boring meeting that's really sucking their soul, look, they should ask themselves this question, how can I enjoy this 10% more?

**Joe Hudson** (00:45:51):
Well, should, they can. They get to, it's a great experiment.

**Lenny Rachitsky** (00:45:54):
It's an experiment. Okay, perfect.

**Joe Hudson** (00:45:58):
The reason I do the should thing is that as soon as you say you should and then you don't then you can fail. If you fail, then you're less likely to try it again. That's why the should, it ends up usually in stagnation. If you think about the way it feels in your body when you say, I should do something, and there's a stagnation, there's a, hmm. whereas if you say something like, oh, I want to do it, or here's an experiment I can do, or here's what I enjoy, there's less stagnation, there's more movement.

**Lenny Rachitsky** (00:46:31):
This touches on something else that you talk a lot about, and we've been circling around this idea of authenticity versus improvement, where you help people realize that you are good as you are, you don't need to necessarily improve. We've talked a lot about these sorts of things already, but just what else can you share there just how to help people learn this?

**Joe Hudson** (00:46:49):
My favorite metaphor on this one is at what time in the journey of an oak tree is it perfect? Is it when it's an acorn, when it's sprout, when it's 20 years old, 40 years old, 150 years old, 200 years old, depending on the oak tree? Now, I'm perfect. The idea is ridiculous. It's a similar thing for us. The idea that I need to improve myself, it really disturbs the natural process that's at hand, which is we evolve. We as human beings evolve. If it's like, oh, I'm evolving and I can enjoy it, and I'm acting from my authenticity, then that has a lot of alacrity. That moves quick. If it's I need to improve, there's something wrong with me, I need to improve, I should do it, that all goes really fucking slow. Because there's a lot of emotional stagnation in that.

**Joe Hudson** (00:47:55):
There's a lot of should shame. There's a lot of stagnation in that, and so you don't actually get that natural flow of life. The Taoist talk about this as kind of like a river always finds its way, it just always goes in that direction. We are naturally evolving. That is our nature. Then to put a whole bunch of shoulds and shits in the way just slows the process down. The other thing about authenticity that I think is really important too, is that if you are one of the few people, I'd say 10, 15%, who can say, I should be this way, this way, and this way, and then you do it, which is very few people can actually do that. What most people do is they say, I should do this, should do that, should do that, and then a decade later, they're still saying they should do the same things. Let's say you're one of those really successful people, then you have a life for not you. Then you have a life of who you think you should be, not for who you actually are.

**Joe Hudson** (00:49:02):
If you move from authenticity, naturally, certain things aren't going to work, certain things are going to work. Certain people are going to work, certain people aren't going to work. Certain jobs are going to work. The ones that you end up with over time are going to be the ones that are right for you, not right, for who you think you should be. The most obvious of this is you meet a woman and you're like, oh, this is how I should be for them to love me, and you just do it. You just do everything that you think you should do, and then you get married, and then they love not you, they love who you think you should be. They don't love who you are. What kind of marriage is that? As opposed to, this is who I am and I'm going to be as genuine. I'm going to show you all my parts. I'm going to be as genuine as I can with you. Then if you do get married, you're married to the right person, you're married to the person who actually sees all that and loves that and wants that.

**Lenny Rachitsky** (00:50:01):
How do you hold that idea with I also want to get better, I want to develop myself, I want to feel my emotions more, those sorts of things?

**Joe Hudson** (00:50:10):
I love that I want to, the better part is kind of just, gets a little bit in the way. We all want to, like a little kid wants to run faster. They might want to be a better runner, but the part that they missed, the reason that they develop so fucking quickly is because they don't think they're going to be a better person if they run faster. The idea is like, yeah, you have this natural want, that want is the thing that moves evolution. A plant is like, "Oh, there's sun. I want to move in that direction." As compared to I should. Both of them are human concepts, but the want, it's the thing that what allows us to know that's our evolutionary path. Oh, I have this want to be closer to people. Oh, I have this want for great sex. Oh, I have this want for being able to have a business that supports me.

**Joe Hudson** (00:51:07):
These are great wants, and they show where the growth is occurring or wants to occur. It's like that's our natural evolution. It's great. What makes it need to be better? I want to be better. It just slows it down instead of, it's like saying that what I am is broken and therefore, the whole thing slows down. We try to word everything as more in the experimental framework, but also, we try to word everything as self-awareness, self-experimentation, self-discovery, instead of self-improvement. Because if you understand the problem, then the problem goes away. Just explore it. Just understand it as compared to making a list of things that you should do to get better, that you will eventually fail and then you'll just be stuck in this should loop where you beat yourself up and where most people hang out a lot.

**Lenny Rachitsky** (00:52:10):
The experiment here that I'm taking away is think more about your want versus the should, and then things you think you need is okay.

**Joe Hudson** (00:52:20):
Because typically, when you say, I want to improve, it means the subtext in that is once I do X, Y, and Z, then I'm lovable. Once I do X, Y and Z, then I'm okay. Once I do X, Y and Z, I'll be worthy. Once I do X, Y and Z, I'll be enlightened, whatever the fuck, the thing is. That's just not how it works. What works is the person who loves themselves has loving relationships. It's not the person who's done X, Y, and Z so that they can be lovable, has loving relationships. The people who do X, Y and Z, so they can be lovable have relationships where people are critical and constantly telling them that they have to be better.

**Lenny Rachitsky** (00:53:01):
Coming back, you just said this interesting quote that you also shared at the beginning. This idea, once we understand the problem, it goes away.

**Joe Hudson** (00:53:06):
Yeah.

**Lenny Rachitsky** (00:53:07):
Let's make sure people understand what that means. Is it related to this idea once you feel like I'm an asshole, okay, and then like, oh, okay, and then it starts to kind of away, is that the core?

**Joe Hudson** (00:53:15):
I just mean practically. It's like, can you really fully understand a problem if you don't understand the solution to it? There's a principle, and I can't remember the name of it, like it's Strickland principle or something. It's something that this CFO that I used to work with said, and he would say, "Problems get solved if you spend time on them. If you just give enough attention to a problem, the problem will solve." That's the way it works in business. An unsolvable problem, obviously, it's not going to work that way. The reason that, that works is because the more you spend time on a problem, the more you understand it.

**Joe Hudson** (00:53:58):
Another one, love him or hate him, one of the things that Elon Musk has said that I found it very valuable in my time, is that if you really want to interview somebody and they claim that they've done something, you ask them six levels down. You improved sales. How did you do that, exactly? Well, we improved the pipeline. How'd you do that, exactly? Oh, well, we made the pipeline more measurable by having things that could be. How did you know? What were the seven stages of the pipeline and what made you pick them? You go six levels down and you can really understand if somebody was the person who solved the problem or if they're the person who is claiming that they solved the problem. It's the same thing.

**Joe Hudson** (00:54:47):
If we just explore a problem enough, the solution is apparent. If we understand the problem enough, the solution is apparent. Typically, if we come to a problem with a kid's mind, wonder, if we come to it, what could I learn here? What's exciting? What are the experiments I can run? Then typically, that's the most efficient way, enjoyable way to solve a problem as compared to, I have to get to this problem by this time and we're going to do it this way. Usually, that doesn't work. I could geek out on why that lets democracies win over autocracies because they're far more experimental by nature, and it's not one person saying how things are going, but just generally, just we're more efficient when we're exploring. We're more efficient when we're exploring ourselves and understanding ourselves and trying to improve ourselves.

**Lenny Rachitsky** (00:55:46):
There's a couple of more experiments I want to help people try to run. One is you have some really good advice around decision-making and how emotions and getting better at understanding and working with your emotions helps you make better decisions. Can you talk about that?

**Joe Hudson** (00:55:59):
That's similar to what I said before, which is if you learn to fall in love with the emotional experiences, then you have more solution sets. Let's say I want to have all human beings, I want to be a part of a great team. Nobody has ever raised their hand and said, "I'd like to be a part of a team." Yet, grand majority of people at their work right now have shitty teams or not A teams, not great teams, even though nobody wants that. If one of the things you're unwilling to feel is that conflict, that tension, as we talked about if you're conflict avoidant, you're not going to be able to make an A team because there's nothing that is alive doesn't require tension. A cell requires tension. Breathing requires tension. Playing pickleball requires tension. A good team requires tension. If you're going to avoid that experience, you're not going to be as easily, if at all, be able to create a quality team.

**Joe Hudson** (00:57:05):
To be able to look forward to any emotional experience, creates more and more solution sets for more and more optionality. In creating a great team, for instance, you need to be good with people hating you. You need to be good with drawing boundaries and having people upset. You need to be able to have high expectations. You have to be okay with somebody being disappointed with themselves. You have to be okay being disappointed with yourself. All these emotional experiences have to be available to you if you're going to find the solutions to make an A quality team. The more you can fall in love with each emotional experience, the more you have and then the clearer the decision making gets. That's one thing for making great decisions. The other one that I find really, really useful and very hard to execute on until you really understand it is creating a set of principles to live by.

**Joe Hudson** (00:58:06):
We all have a set of principles to live by that we're doing it. For a lot of people, those principles are what do I have to do to get likes on Facebook? I'm going to make a decision based on getting likes on Facebook. I'm going to make decisions based on whatever it is. Pretending that I want to get wealthy or trying to get wealthy or there's a series of things. If you really take a look at what it is you're making your decisions on and then really think about, well, what would be the five or six things that if I made decisions with these principles, I'm guaranteed success? Then experiment with them and then refine those principles and then experiment with them. Then there'll be these moments where you don't want to do it, but those are your principles, so you're going to go and do it.

**Joe Hudson** (00:59:03):
As an example for this, one of the principles that I live by is embrace intensity. It's not create intensity, it's embrace intensity. It means that right now, any moment in my body, for instance, there's going to be a sensation that's more intense. How do I welcome that sensation? At any moment in running my business, there's going to be something that we don't want to talk about. How do we lean in and talk about that? We start all of our meetings with what are you scared to say in our business? What are you scared to say? Not all of our meetings, but some of our meetings are started with what are you scared to say? Because we want to embrace that intensity because we know that if we lean into the thing that we're trying to avoid, our life is going to get better, our business is going to get better.

**Joe Hudson** (00:59:57):
If you can see what those principles are for you, and then run experiments to see if they work and then refine them every once in a while. Because of that embrace intensity, if somebody comes to me and says, "You're fucking up this business. You're doing it all wrong." I don't have to think about what I'm going to do. I'm like, "Oh, cool. Tell me what I'm missing." It's going to be immediate because I live this way. Maybe I don't want to hear it. Maybe I'm having a bad day. Whatever it is. Maybe I'll say, "Hey, I want hear you give me, I'm not able to, give me a day and I'll come back to you." all of a sudden, my decisions get made automatically if I live by a set of principles and very effective, I find very effective living by a set of principles

**Lenny Rachitsky** (01:00:51):
For someone that wants to create their own set of principles. Is there a guide you have? Is there any advice for how to actually go about starting this list, putting it together?

**Joe Hudson** (01:00:58):
We have a decisions course, which is a large part of it is about how to do that. It's a difficult one to explain because there's a lot of nuance in it. Just as for instance, one of the nuances is defining the principles, not just by what it is, but what it isn't is a really significant, very minor thing, but it ends up being incredibly major. If you're going to do your set of principles and you want to do them on your own, the main thing I would say is keep it to five. I wouldn't even do six. I don't do six, but I keep it to five. I would test each one of them for five days.

**Joe Hudson** (01:01:39):
Make your principle and then see if it works for you for five days and then keep on experimenting until you find five. When you look at those five and you say, "If I do that, if I live by those principles, I am just almost a hundred, if not a hundred percent confident that, that's going to create the life I want if I live by those principles." Then you have a really good start and make them simple. Mine are things like embrace intensity or connection first or everything is in iteration. As soon as I live by them, things work, company works.

**Lenny Rachitsky** (01:02:20):
Amazing. We'll point folks to that course if they want to take it themselves. Cool.

**Joe Hudson** (01:02:25):
It's only once a year, so it's a rare one.

**Lenny Rachitsky** (01:02:27):
Oh, wow. When is the next one?

**Joe Hudson** (01:02:29):
January.

**Lenny Rachitsky** (01:02:30):
Okay. Not too far away for folks to want to wait. Again, the two pieces of advice you shared, and that's our experiments that we can run to help become better decision makers. One is create a list of life principles, and there's a course that will point people to, to take that. The other is the thing you keep coming back to over and over and over, this idea of falling in love with your emotions, embracing your emotions, welcoming your emotions. There's also, I know you do a lot of work with teams. I imagine there's very similar advice for how to help your team be more effective. Principles, I imagine is a part of it, falling in love.

**Joe Hudson** (01:03:02):
We've run principles for teams, yeah. That's one of them. Teams would be more effective. We have a lot of, I mean I think I have, at this point, I have 12 things that I'll go into a company and do with a company. Typically, the way I like to do it is I will go in and I'll talk to the leader typically and they'll say, "This is what I want." Then I really want to assess. Typically, if the person who is a big part of creating the problem has a hard time seeing the way through the problem, or it wouldn't have been created generally. This is not demeaning any leader, we all have these issues. Usually, what I like to do is I like to go in and I like to talk to three or four people, see what their perspective, not just the leader's perspective.

**Joe Hudson** (01:03:57):
Then I like to sit in a meeting or two and just see actually what the dynamic is. One of the things I like to say about how to change a company is that the atomic structure of a company is the meetings and the decisions. It's particularly true in Silicon Valley, but it's really true in all businesses that all we are as a company is a group of people's relationships and ideas. Especially, like Amazon, you got a couple of buildings and some servers. There's not a lot of hardware there, and they wouldn't be useful without the people anyways. Anybody, whether you're running a farm or a shoe factory or anybody's successful is going to tell you it's all about the people. The atomic structure is what are our meetings like and how do we make decisions? I'll just really pay attention to a meeting. One of the things we do is we talk about what we call five-star meetings, which is how do you make every meeting enjoyable?

**Joe Hudson** (01:05:04):
Literally, how is it that everybody when they walk out of a meeting, they're like, oh, fuck, that was great? It turns out, we've all been in meetings that are hard as shit, and we've walked out and gone, oh, those are great meetings. We've all been in meetings where nothing happens and we're like, "Oh, God. Fuck, another one to just drive a nail through my head. I don't want to sit there." What's required to make one of your meetings five stars? If you do that, that's one of the things we'll do inside of a company is work with them to figure that out. If you do that, every single problem with your company will come to the surface. Every single one of them. I had ten five -tar meetings, but these two meetings sucked. That tells me exactly where we need to focus as a company.

**Joe Hudson** (01:05:53):
That tells me exactly where to look for the problem that's happening. It's the same thing with decisions. If you really start unpacking how the decisions are made where people are frustrated in the decision-making process, you're going to find exactly the problems in the company. An example of this, I was working with a friend and he's a content person, and we were just talking about how do you make every one of your meetings a five-star meeting? He's like, "Okay, great." He's like, "Yeah, I'm never going to do this." I was like, "Really? Tell me why." He's, "My YouTube meetings fucking suck." That's not where he makes most of his money, but these YouTube meetings suck. They're never going to get better.

**Joe Hudson** (01:06:39):
Luckily, there's a couple other people around at the time and everyone's like, "No, wait, I love my YouTube meetings. What do you mean? How could this not work for you?" He noticed, oh, the team didn't, the content, none of it was working for him. None of it was him. He was just like, "Ugh." He changed it. He was like, "Okay, I'm going to commit to that. I'm going to see what it's like for me to just say every one of my YouTube meetings have to be something that's super enjoyable to me." When he did it, his YouTube numbers went off the charts in a very short period of time. It's just that common. Wherever the meeting is that sucks, it means there's something else that's a problem that needs to be worked on. That's typically how. I can just look at, usually sit in any team meeting and see at least three or four of the major problems that are happening in the company.

**Lenny Rachitsky** (01:07:29):
Such a cool way of thinking about where to focus decision-making meetings. I love that the story comes back to something you shared earlier with the more you enjoy something, the more joy there is, the better it's going to go anyway. The more you can find those moments and make things enjoyable, the better.

**Joe Hudson** (01:07:45):
The other cool thing is most of the executives or the CEOs that I've worked with, when they get to a point, and it usually takes them like, we always have the goal of a month, it usually takes two months to make sure every one of their meetings is five-star meetings. Once they've done that, then it's like, how do you make sure all of your teams have five-star meetings? Usually, it's like within two months and they usually have half the amount of meetings at the end of it. Half the amount of meetings in their companies are more effective. It's an incredible tool.

**Lenny Rachitsky** (01:08:18):
I could see why people enjoy that if you were meeting as well. Is there anything more along those lines before we start to close out our conversation, either around teams or decision-making?

**Joe Hudson** (01:08:30):
I'll say for anybody who's running a team, Harvard has got a couple of these, but we used to do these tiny pulses. As a VC, one of the strategies that was really effective that I saw very few VCs doing was I would want these pulse, I would like to read the pulse of teams with these short surveys and stuff. It was the most effective way of not very happy, didn't want to come to work on Monday. They weren't going to make their numbers. The likelihood of them making their numbers is going down. There was this interesting thing that just about how Drucker, I think said it first and then the Virgin guy.

**Lenny Rachitsky** (01:09:15):
Branson?

**Joe Hudson** (01:09:16):
Branson said it. He's like, "Culture eats strategy for breakfast," or some such. If that's true, then it's measurable and it can be a leading indicator, and it absolutely is. If you really pay attention to the culture on a team-by-team basis, it's an amazing, very effective way to drive results, but also, a very effective way to know when bad results are coming. What's interesting to me is most people feel like they can't control the culture, like most people feel like.

**Joe Hudson** (01:09:52):
Most people, I notice, they feel like, it's more likely for me to hear from a CEO, "God damn it, everybody agrees when I get out of the table. When I get off the table, everyone's like, yeah, we're going to do it. Then they don't do it. Why aren't they doing it?" I'm going to hear that more often than I'm going to hear a CEO say, "Oh, wow. I really noticed that the way the email system was working in our company, we were disempowering people by not requiring an action after every..." I'm going to hear more complaints about why shit isn't working than I'm going to hear about strategies, like very gentle, simple strategies to change the culture. it's an amazing thing to me that it's so powerful and yet people feel so out of control with it

**Lenny Rachitsky** (01:10:40):
To give people something they can do, say today or tomorrow to work on a lot of these things we've been talking about. Is there just one thing you recommend that basically everyone should try to experiment with in the next day, couple of days or weeks, just to help them be better and more successful and happier?

**Joe Hudson** (01:11:00):
I would do seven minutes, no less than seven minutes. You can do more than seven minutes. Seven minutes of gratitude with another person every day. It can't be, I'm grateful for this, I'm grateful for this, I'm grateful for this. It has to be feeling the gratitude and then seeing what comes out of your mouth when you're coming from the felt sense of gratitude and doing it back and forth. You're savoring the experience of gratitude and you're going back and forth with another human being. Call mom, dad, sister, brother, business partner, friend, and every day just express gratitude back and forth for seven minutes, coming from the feeling, not from the thought. If you have a full body sensation of gratitude and you experience that for seven minutes a day, it'll change your life dramatically really quickly. Really, really quickly.

**Lenny Rachitsky** (01:12:02):
Wow. I already feel it. The practice is you are expressing gratitude to the person you're with.

**Joe Hudson** (01:12:09):
It can be gratitude for anything in your life. As a matter of fact, I would say do it for a couple of weeks and then do it on the places where you feel lack. That's where the superpower comes in. In my own personal life, I was meditating. I spent seven, eight hours a day meditating for years.

**Lenny Rachitsky** (01:12:31):
That's a lot of hours.

**Joe Hudson** (01:12:32):
You can imagine, I didn't have a lot of money. The joke I used to make is I would meditate and worry about money most of my day. It's funny, but it's truth. One day, I was thinking about money and thinking I was driving in my car and I was thinking about this billionaire I knew and I was thinking about how I didn't have enough and then I thought, "Oh, this billionaire doesn't think they have enough either. I know I'm well enough." I'm like, "Oh, I have the experience of a billionaire right now." I was like, "He's probably driving in a car somewhere thinking he doesn't have enough, and I'm driving in a car somewhere thinking I don't have enough. This is great. I'm a billionaire."

**Joe Hudson** (01:13:20):
It tickled me, the idea tickled me. Then I was like, well, what happens if I start focusing on everything I do have instead of focusing on what I don't have? Which is where the gratitude practice came from. My wife and I would sit every day and just be grateful for all the physical stuff that we had. We were living in a hobble, were living 15-year-old year cars. We had no money. I was in debt. I was in, I think $40,000 in credit card debt or some crazy shit. We just did it. Literally, was it three months later, my credit card debt was gone. Six months later, I had $60,000 in the bank. Entire life changed because I no longer defined myself by somebody who didn't have, I defined myself as somebody who did have. All of a sudden, I could look out the window and it wasn't, "Oh, shit, I can't have that. I can't have that. I can't have that."

**Joe Hudson** (01:14:18):
I look out the window, I'd say somebody made money on that. Somebody made money on that. Every fucking thing I looked at, somebody made money on. 20 people, 20 companies made money on the fucking lamppost. The person who installed it, the energy company, the rubber company, there's just, holy crap, it's all over the place. Then in that definition, all of a sudden, it became really clear. It doesn't matter if the thing that you feel like you lack is time, or the thing that you feel like you lack is love or the thing that you feel like you lack is money. If you can really do a gratitude practice on the thing that you lack, there's a superpower in that one, changes everything.

**Lenny Rachitsky** (01:14:57):
Do you still do this?

**Joe Hudson** (01:15:00):
I do gratitude, yes. Do I do gratitude on stuff I lack? I don't really have an experience of lack. That's not really...

**Lenny Rachitsky** (01:15:07):
You still do this gratitude, seven minutes?

**Joe Hudson** (01:15:09):
Of course, yes. That's like asking if I still have sex. Why would I give that up? It feels great.

**Lenny Rachitsky** (01:15:16):
Just to be clear, you find someone seven minutes every morning, probably think about things you're grateful for and share back. Focus not on your intellectual thing you're grateful for, but just what's coming out of your emotional body.

**Joe Hudson** (01:15:28):
Feel the gratitude.

**Lenny Rachitsky** (01:15:30):
Yeah, then gratitude.

**Joe Hudson** (01:15:30):
Let the feeling of gratitude speak rather than your mind, so that you get the felt sense of it.

**Lenny Rachitsky** (01:15:38):
Joe, I'm incredibly grateful for you. I really appreciate you sharing so many experiments for people to run. I think this is going to make a real impact on a lot of people's lives. Two final questions. Where can folks find your courses? I know you have a podcast. Where can folks find the stuff they do online, and then how can listeners be useful to you?

**Joe Hudson** (01:15:55):
First of all, Art of Accomplishment, the podcast, it's Art of Accomplishment with Brett Kistler and Joe Hudson, I think. Then Art of Accomplishment, the website will show you where all the courses are. It'll give you a whole bunch of experiments you can run. There's all sorts of really great information there. The other thing that we just mentioned also is just that we really want to make sure that you think that the courses are for you. The way we do courses is that it's a very felt experience thing. It's not intellectual at all. It's really in your body. The way we like doing it is that you bring real problems that you're having and you use the tools that we teach you. The foundational course for that is called the Connection Course. If you want to get into it, go to the Connection Course.

**Joe Hudson** (01:16:45):
To find out if it's right for you, if you're not already know that it's right for you, we do these little hour and a half free workshops and it'll give you a taste of what it is that we do because it's like anything that's going on out there. It's people doing, they're like, "What the hell was that?" It's just a completely different thing. It's not like learning in the normal way. You literally sit down with another person and run experiments face-to-face with how you're being in the moment. You learn all this stuff through direct experimentation. If you find out it's right for you, you can do it through these workshops, and I'm sure there'll be a place where they can find out where to go for that.

**Lenny Rachitsky** (01:17:27):
There's one coming up in September, I believe.

**Joe Hudson** (01:17:30):
The Connection Course is coming up in September. It's a great place to start. It's foundational for everything else we do.

**Lenny Rachitsky** (01:17:37):
Then how can listeners be useful to you?

**Joe Hudson** (01:17:39):
I want my children to grow up in a fantastic world. The best way that, that can happen is that if the people listening to this discover who they are and their nature and the truth of how they operate. Not for them, but for their children and their children's children. You want to do me a favor and make my daughter's world a better place.

**Lenny Rachitsky** (01:18:08):
I also just had a son, and so I totally resonate with that.

**Joe Hudson** (01:18:11):
Yeah.

**Lenny Rachitsky** (01:18:13):
Joe, thank you so much for being here. What an amazing podcast episode. This ended up being as I expected.

**Joe Hudson** (01:18:19):
Pleasure. Thanks for having me. Appreciate it, Lenny.

**Lenny Rachitsky** (01:18:22):
Bye, everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

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## [8/16] Improve strategy, influence, and decision-making by understanding your brain | Evan LaPointe (founder of CORE Sciences)

**Evan LaPointe** (00:00:00):
The brain is like a college campus that has different departments in it. Most people rely on their history department way too much. If you instead send things to the more experimental, open-minded science department, the more creative art department, you get dramatically better answers.

**Lenny Rachitsky** (00:00:13):
I know you have a bunch of awesome advice on becoming more influential.

**Evan LaPointe** (00:00:16):
It's almost like you're playing Elden Ring or some video game. The starting point is to choose your character. Hey, I'm the devil's advocate approach, or I'm the break it and see if it still stands after I hit it really hard with a sledgehammer kind of guy, your personality kind of has a natural fit.

**Lenny Rachitsky** (00:00:30):
How do we create better relationships within our teams?

**Evan LaPointe** (00:00:33):
It's critical to ask what kind of experience am I? Not how good am I at my job, how much do I know, how critical am I to this process, but am I a miserable experience? If the answer is yes, don't worry too much about the other pieces yet. You got to fix that first.

**Lenny Rachitsky** (00:00:48):
I'm really excited for this episode. I think it's going to be unlike any other conversation I've had on this podcast.

**Evan LaPointe** (00:00:52):
Then here's the surprise ending.

**Lenny Rachitsky** (00:00:58):
Today, my guest is Evan LaPointe. Evan is the founder of CORE Sciences, which teaches companies and individuals how our brains actually work, and through that lens, how to more effectively work with other people on teams, how to build better products, how to grow your business, and how to make smarter and faster decisions. Evan is a four-time founder, including founding a company called Satellite, which is the fourth largest analytics product on the internet today, which was acquired by Adobe where he later ran product strategy and innovation for Adobe's digital business.

**Evan LaPointe** (00:02:16):
Thanks very much for having me. I'm excited to share some stuff with people.

**Lenny Rachitsky** (00:02:19):
I am really excited for this episode because one, I think it's going to be unlike any other conversation I've had on this podcast. Two, I think it's going to really stretch our brains as we learn about how the brain works. Three, I think it's really going to make an impact on how people work and how they relate to other people and work with other people. I thought it'd be great to start by laying a little bit of foundation for people to get a sense of just what they need to understand about how the brain works before we get into how we can actually apply some of the stuff. Could you just share some of the stuff that is really important for us to know about how the brain works?

**Evan LaPointe** (00:02:53):
The brain is like a big galaxy. There's a National Geographic quote that we throw up in all of our programs that when we train teams, for example, that says the brain is more complex than any known structure in the universe. It's easy to read a sentence like that and just run straight away from the problem. I think that's important for people to not run away from this problem but more run toward it. It's our job to translate the complexity of the brain into really simple, straightforward systems that you can remember. The three or four main systems to stack on top of each other like layers, start with the fact that the brain has systems. I think of it like the brain is like a college campus that has different departments in it, and your brain has a science department responsible for open-minded experimentation.

**Evan LaPointe** (00:03:39):
It has an art department in it responsible for creative boundless thinking. It has a history department designed for looking stuff up that you already know. If you think about sending your thoughts to the right department on the campus or just different departments, you're going to get super different responses back from your brain. Where we're stuck largely is most people rely on their history department way too much. That's because the brain is actually built to conserve energy, and that's the lowest energy form of generating an answer to a question that the brain can pull off. If you instead send things to the more experimental, open-minded science department, the more creative art department, the humanities department of your compassion, et cetera, you get totally different answers. Certainly, if you ever build products as a company or offer services, those departments are going to give you dramatically better answers than the reference material just in your history department.

**Lenny Rachitsky** (00:04:35):
**Evan LaPointe** (00:06:34):
That's the first thing is that the brain has these departments and systems in it and it also has pathways. The pathways thing is really important to understand because there's a likelihood that thought will go down certain pathways in each of our brains. Some of that has to do with personality, which predisposes us to have a higher-anxiety or a lower-anxiety response or a higher-creativity or lower-creativity response. You can also be more intentional with these pathways, and that's a big component of self-awareness is to know what are my preferences and then am I actually letting those preferences take over in the situation or might be more intentional steering down the pathways to activate these best regions and systems of the brain. The simplest way to keep track of the systems is there's three, there's three really big ones.

**Evan LaPointe** (00:07:25):
There probably are more than three that you can learn about, but the ones we want to have everybody learn about are your safety system, your reward system, and your purpose system. Out of those three, two of them sound really real and one of them sounds like fantasy, to most people. The safety system is pretty obvious to most people. When we're scared, afraid, uncertain, we have doubt, we're resentful, angry, apathetic, etc. This system of our brain is trying to restore our standing in the universe, like I need to get out of this stress, out of this danger, out of this anger, etc. you have an objective that, that part of your brain, that system sets, and you go chase that objective, like I want to get safe. If you're in a meeting, a practical everyday situation, and you're exposed to a statement that makes you feel unsafe, your objective now actually isn't to contribute to the meeting productively anymore.

**Evan LaPointe** (00:08:19):
Your brain's objective is to get back to safety. The same thing of rewards that if somebody says you'll get something, if you do this, which is the opposite of safety, that if you don't do this, something bad will happen, then yeah, your brain gets into this pursuit, desire state, which seems great and can be great in a lot of cases, but also, can be pretty narrow. When you hear people say, "That's not my job." That's actually the reward system speaking, saying, "I get rewarded for the things in this list and this thing that you're talking about is not on my reward list and I therefore am not interested in it." I have an easier time pushing away from it because the reward system of the brain is more transactional in a conceptual way. Then you get to this vague and ridiculous sounding purpose system.

**Evan LaPointe** (00:09:08):
Until you realize what purpose is, and we've all felt it, if you understand the impact of the thing that you're doing and you understand and care about the people that are impacted by your actions, those are the conditions for purpose, and that can be really big. Like curing cancer, I understand the impact on the people, that's huge. It can also be like I'm writing an email, I understand the impact of this email and the people affected by it. You can feel purpose at this tiny little grain of sand level of your life, not just at the whole beach and shoreline level, and we teach people that, that's super important. That's the foundational layer. Then on top of that, there are a few layers that have to do with your focus because the brain can dramatically shift focus from open mindedness to deep, deep focus.

**Evan LaPointe** (00:09:55):
Then there's the final layer of ability, which is less science- y, less neuroscience, and more just practical that your ability is regulated by how much reality you know, like do you have the context for the decision or you just know you're supposed to make the decision? People with context have higher ability than people without. The same thing with imagination and logic that if you push those boundaries in your mind further, your ability increases almost disproportionately to how much you've pushed, so these layers just stack on. I think it's approachable, it's simple. It's like, we can all understand, is my safety reward or purpose system active right now? What is my level of focus? What level of connection with reality, reason and imagination do I have right now? Then there's your output as a human or as a team, and all these things are like levers we can pull, which is super fun.

**Lenny Rachitsky** (00:10:49):
Amazing. Just to summarize here, so we have these three systems, safety, reward, purpose, then our level of focus, and then there's the ability, are we able to actually do the job? Those are the puzzle pieces.

**Evan LaPointe** (00:11:02):
Exactly.

**Lenny Rachitsky** (00:11:03):
Where I want to take this is when we work with other people, working with other people is very hard, and some of the struggles people have at work in building product, in running a company and building teams, hiring, all these things, is they often get really frustrated by the way other people operate. Some people want to just start building a thing, some people want to really think about it. Some people are very customer qualitative, anecdote focused, some people are very metrics focused. Some people are very collaborative, want to work in groups, some people are very, I want to work alone. Just first of all, we just talked about here's how the brain works and then there's this idea of people work very differently. Can you just talk a bit about just this idea of why people behave so differently in an effort to help us learn to work better with people that are just like, "Oh, that's so strange. This person wants to just their billing.

**Evan LaPointe** (00:12:02):
Maybe one of the worst pieces of propaganda that people walk around with in their minds is the phrase we're more similar than we are different. My theory on why we walk around with that phrase or why we're told that phrase, if we zoom in on the situations where we hear that is that we have this theory, it's easier to get along with people that are like us. If we fantasize that this person is like me, then I might get along with them better. When in fact, we should probably be building the muscle that we have the capacity to get along with people that are extremely different than we are. That fourth piece that we talk about in our coursework when we train managers, for example, is personality. We talk about your brain systems, your brain focus, your brain's ability, which sort of paints the picture that humans might be similar to each other and we can activate these things kind of unilaterally.

**Evan LaPointe** (00:12:54):
Then we have to drop this bomb at the end, which is, and here's why that doesn't work consistently across different types of people. I know you took our profile, our big five-based profile, and that's just one tool out of many that can help a person understand where on these various spectrum of personality traits and motivations they sit. We often use the metaphor in our training of culinary school that we're more culinary school for human performance instead of cooking class. That helps people conceptualize that I'm used to going to cooking classes in my training, here's how to do a one-on-one, here's how to offer feedback, here's a framework for generating product ideas through to prioritization and backlog. We're like, "Well, what's going on beneath the surface? What are the underlying principles and forces at work that all the stuff that comes to life on the surface really originates from?"

**Evan LaPointe** (00:13:50):
In this culinary school metaphor, one of the things that's really important for a chef is to actually understand what are my preferences? What do I like to eat? Because if I don't know what I like, then I assume everybody else likes what I like, then I'm not going to be a very dynamic chef. I'm going to be like, "Everybody likes lots of salt and acidity in their dishes." Then you're going to go to Germany and open a restaurant and be like, "That is absolutely not what we're looking for in this cuisine." Self-awareness is a really important step, not just of culinary school, but for everybody. You sit somewhere on a spectrum, your brain has these pathways and these traffic cops directing traffic in your mind. You have to start with square one with yourself and understand, am I prone to try to say things politely, and so that they're received well? Or am I prone to be super blunt and direct and maybe even mean and harsh? Am I prone to sit back in conversations and let things happen, or am I prone to take over?

**Evan LaPointe** (00:14:48):
Am I prone to go to intellectual abstract thinking and try to deconstruct ideas or am I prone to stay very pragmatic? If you don't know who you are and you think that the universe resembles you, then you're going to get super lost in that broader spectrum. I think the big five, I mean there's a bunch of models. You have Myers-Briggs, disk, etc. They're just all imperfect ways of measuring personality, but also, useful despite the fact that they're imperfect and especially useful if you take a growth mentality instead of a justification mentality to reading them. If you say, "okay, I'm low in politeness, I'm super direct." Your justification mentality of that would be like, "Yeah, damn right. I'm awesome that everybody knows what I really mean and how I really feel.' Versus the growth thing, which is like, well, maybe there are situations where I can try a little harder than 0% to phrase things in a way that if we work backwards from the outcome, we want to choose our actions right now, would these actions so direct actually increase or reduce the probability of that outcome?

**Evan LaPointe** (00:15:54):
That's when we become more dynamic chefs, more dynamic people. Personality is a broad spectrum and self-awareness is the starting point for the whole thing. The big five model gives you a really good list of attributes to scan yourself through, and then you should be making a game plan for how to do that. Then you can turn your attention to the network of humans you're a part of and say, "Okay, well in what ways, because I'm me, am I so different than these other minds?" How can we create a mesh mentality where thought shifts among the group to fit most naturally? In product work, especially, whether you're a founder, entrepreneur, thinking about product at that level and your team at that level, or you're in the thick of product work pushing your mind and other people's minds to get this right, then you're going to benefit a lot from understanding these traits and these differences.

**Lenny Rachitsky** (00:16:48):
I think the big unlock here for a lot of people is that the reason you are struggling, getting something done, working with someone, being successful at your company, with your manager, with a partner in your team, is they have a very different way of their brain operating, and so they think in a very different way, they react in different ways. You may think the entire world thinks the way you do, but they don't, and these tests help you see that. To make this super concrete for people, are there a couple of examples or wins you often find that you can share of just ways to use this to become better in your job, say this week? Whether with meetings or convincing someone of something, anything along these lines?

**Evan LaPointe** (00:17:28):
I think one more layer would be helpful to this, especially if you're a leader or a manager, which is the business world isn't just hand-to-hand combat between a bunch of individuals on the blank matrix loading screen. You're actually in a habitat as a company and your team is like a habitat. I think of companies and teams, almost like little terrariums that we're inside of, and is this terrarium set up with sand and a heat lamp and we're a bunch of frogs, like we're going to turn into frog bacon, simply because we're in this habitat? A lot of it is you want to actually create a habitat or an environment that's predisposed to high-functioning thinking and high-functioning interaction between people.

**Evan LaPointe** (00:18:15):
Because if the habitat is working against all of you to begin with, then all the hand-to-hand combat that's going to show up is actually largely a function of you just being in this heat lamp, dry, devoid of life, devoid of productive ways to grapple. That's where a lot of teams and companies sit today, especially more established teams. They've either lost their way in the habitat and haven't really set the scene for good, kind of thinking and interaction, or they just never had that to begin with. Some of this stuff, like when you've talked to a couple of other people in the past, your conversation, the Canva conversation, the Figma conversation both come to mind as like it is super obvious the energy that has gone into the habitat to predispose people to high function.

**Lenny Rachitsky** (00:19:09):
You're referring to in my interviews with the folks from Figma and Canva.

**Evan LaPointe** (00:19:13):
Exactly right.

**Lenny Rachitsky** (00:19:14):
I see. Oh, say more about that mean.

**Evan LaPointe** (00:19:17):
You think about the, even in the Canva context of coaches instead of managers. I love this, let me back up for just a second. There's a great quote, I think Dan Pink has summarized the problem better than anybody when he said, "There's a mismatch between what science knows and what business does." In that gap, it says, "Well, what is it that business is doing that science knows better?" You can almost look at this as an equation of science knows minus what your business does equals dysfunction. That is a pretty crystal-clear thing. If you take this managers versus coaches, they're taking intuitively, I think. I don't know if they're neuroscientists, but intuitively, I think a lot of great founders understand humans don't work a certain way, and this whole paradigm of managers seems to be failing a lot. This whole paradigm, like mantra, fail faster. Seems to be failing a lot, and mission statements seem to fail a lot.

**Evan LaPointe** (00:20:22):
You look at this, science knows business does as a lens to examine yourself through and stuff that fails very often is worth a look. When you look at, okay, do we really want managers, because that seems to fail a lot? Or is there a paradigm that works better for human beings that activates more human potential and hit the nail on the head? If you do the math of Canva, what science knows versus what Canva does, whether they know they're doing it scientifically right or not, the math equals zero. There's no difference between what science knows and what business does in that case. Also, the Figma conversation, I loved the phrase from that conversation, imagination is a hypothesis generation engine, I think is what the word was.

**Lenny Rachitsky** (00:21:13):
Oh, the Dylan. Yeah, the chat with Dylan.

**Evan LaPointe** (00:21:14):
I loved that idea. Because when we talk about imagination as a part of ability, we talk about imagination's capacity to generate alternatives for you, that's its purpose. It's not just to doodle in the margins in the middle of boring meetings. That's part of it, it's a side benefit. When you look at imagination's purpose, if you have a great imagination, you always have a lot of choices in life. Mickey Mouse was a choice. It was like a new alternative way to send messages through a talking mouse. Like, that's okay, that's interesting. The other part of the hypothesis generation engine that we focus a lot on is it's not just the ability to generate choices and hypotheses, but it's also the ability to load them into your Oculus headset and walk around a world in which that choice already has been executed. That's akin to vision in a sense that do you have a really good ability to load that one branch of this imaginative tree, this one hypothesis into a simulation and then explore what the world looks like with this in place?

**Evan LaPointe** (00:22:23):
If you look at this coaching thing, it's going on at Canva instead of managing, you load that in the simulator and you're like, "Boy, this looks pretty nice. This is higher-performance thing." With advocacy instead of regulation, we have growth. There's a whole bunch of aspects that are inherent in that approach where science, and if you ask a neuroscientist, would that work better? They'd be like, "Oh, hell, yeah. That would work way better." Because it activates this in the brain, it reduces cortisol, it does all these things that science knows work much better. There's a whole list of stuff from very deep to very tactical of things we can do differently that reduce the gap between what you're doing and what science knows and the dysfunction just shrinks and shrinks and shrinks as you do those things.

**Lenny Rachitsky** (00:23:16):
Are there things that you've found people can change in the way they work based on the way the brain operates, whether it's run better meetings, be better influence? What are some things people can try to do this week that will make them more successful at their work or working with colleagues?

**Evan LaPointe** (00:23:32):
In the list of what science knows and what business does, everything is in there. Culture is in there, meetings are in there, goals are in there, deadlines are in there, team dynamics, all this stuff is in there. We'll probably just pick a few things out of that very long list. Meetings are a good one. Meetings, I forget what the statistic is, but it's some insane 12-figure amount of, no, not 12, nine-figure, no, 12-figure, hundreds of billions' amount of waste is caught in meetings. We spend gazillions of dollars on waste of time and meetings. For us, like in our programs, the average delta is between 10 and 20%. People save anywhere from a full half of a day to a full day per week of work as a result of just cleaning up the way they're using meetings. Some of that is just the design of meetings, like treat meetings like a product and treat them workflows that should be organized and used intentionally, but a lot of it is inside the meeting, like what's the tactic?

**Evan LaPointe** (00:24:38):
Here's something super tactical, which is, meetings, generally speaking, are a combination of priming and decision making, if you look at meetings through the lens of the phases that they are. A lot of meetings skip the priming step altogether. They launched directly into decision making. It would be safe to skip the priming step if we began the meeting under the assumption that everybody here is on the same page, has the same information, and generally speaking, intends for the same outcome. I think that's a ludicrous assumption for most meetings, and yet most people are actually shocked to find out that we're not on the same page even though we literally never have been, and as long as you're on day two plus of working together. It's a crazy thing that we don't do priming, and priming can be simple. It can even be done in the invite. One of the things that's crazy about Outlook and Google is you can put a very terrible useless meeting into Outlook and it will never look at it and be like, this is probably useless.

**Evan LaPointe** (00:25:46):
Just like you can go into Trello and put the dumbest project in the company's history into Trello, it will ingest anything you put into it without any discernment as to its value. Now, imagine we're going to have to do this ourselves for now until a better calendar comes out, but imagine if Outlook or Google Calendar or Cron, which now is part of Notion, would just be like, "Uh, uh, uh. What is the point of this meeting?" You could say, "Okay, this is here. This meeting is about the generation of options or creative problem solving or very tactical problem solving or efficiency seeking, or what is the category of conversation we are about to have? What are some of the basic principles that should apply? Are we honoring sacred cows or are we eating sacred cows in this meeting? What is the mode mentality, the priming? How can we all say this is the mindset and the ultimate purpose that applies to the meeting?"

**Evan LaPointe** (00:26:52):
You can write that and you can read that in under three minutes. It's not some arduous process. Amazon does it in an arduous process, they're known for that. That's wisdom to know, like we need priming. They're wise enough to realize the need for it. They make that a very robust execution. It doesn't have to be that robust. Skipping priming is pretty bad. Other meetings get the priming and the decision-making backwards. We start to open the meeting. You've heard of diamond-shaped thinking, let's open the meeting with expansionary thought and let's end the second half of the meeting with convergence. Well, we start the meeting instead with convergence, realize that we can't reconcile the various party in the room, their needs for convergence.

**Evan LaPointe** (00:27:39):
Then you might hear in the middle of a meeting like, "Well, let's start over again and remember why we're all here." We do the priming in the second half of the meeting just in time for the meeting to end. That's a super obvious thing that people can do, but that people very rarely do in priming. I'm happy to generate a list so we don't have to talk through everything, but maybe make some little PDFs or something that people can download that say, "Here's what great priming looks like." Then when you move to the decision making, here's what great decision making looks like, and that way, you can have a little bit of a guide, and again, do your own math, what science knows what we're doing in this meeting. We're skipping a bunch of steps, that's growing the probability of dysfunction or things will going wrong, and let's shrink that probability instead of growing it.

**Lenny Rachitsky** (00:28:28):
Amazing. That'd be sweet if you have that. We'll definitely link to that on the show notes. The advice here is make sure when you're starting a meeting, running a meeting, prime everyone around the problem we're trying to solve or we're trying to get out of this meeting, the context, versus just diving into decision making.

**Evan LaPointe** (00:28:44):
Very notably, the principles that apply. I think that's really, really important, not just what we're here to do, but how we can think about this best. You can even have a debate about the principles, and it's way better to have a debate about the principles than it is to have a debate about the tactics that are rooted in the fact that you have super misaligned principles. If somebody is trying to make the decision with speed in mind and another person is trying to make the decision with accuracy in mind, it is completely inevitable that they're about to have a cat fight in the meeting. It's not resolvable until they come back and revisit the fact that deeper down, we are approaching this in a completely different mentality with completely different objectives.

**Lenny Rachitsky** (00:29:31):
Awesome. If you end up having these PDFs of waste to prime successfully, that'd be great.

**Evan LaPointe** (00:29:36):
For sure. Will do.

**Lenny Rachitsky** (00:29:38):
Okay, great. Other things that people can do to work with better. I know you have some advice on how to influence more effectively. I know you have some advice around strategy and vision, so maybe we go into those two directions.

**Evan LaPointe** (00:29:50):
Let's start with strategy and vision, because I think it's nice to be better at strategy and vision before you start influencing people. What you'll encounter in life, in your mind, is ideas are swirling. Whether you're generating those ideas or other people are, is your brain is going to sort those ideas into believed, believable, kind of conceivable and inconceivable. You can come up with your own words for that, but that's like a starting point, which is if somebody says something you've already experienced, it's something that is believed to your brain. If we said we should implement an OKR framework and you've experienced it in a prior workplace or you've read all about Google doing it, then you're going to be like, "Yeah, we should. It would clean up a lot of junk around here. Okay, great." Your brain is already in a yes.

**Evan LaPointe** (00:30:47):
If it's believable, maybe you're reading Harvard Business Review and you're reading about things that your business has never done, that you've never done, but there's all this evidence that it works and it makes sense to you mechanically, so you're like, "Okay, yeah, I find that believable." Now we're leaning toward yes, or we're still in the yes bucket. Now we get into these unbelievable, yet maybe conceivable. These are the things that seem to be far-fetched. Going back to the Canva conversation, the conversation with Uri that you had. Most of the things that are totally believed by these leaders are unbelievable to most other leaders. We don't need managers? I don't believe it. Now we've shifted the mind from inbuilt kind of tailwind to inbuilt headwind. This is why minds struggle with strategy and with vision, is that every mind based on personality we talked about earlier, that line of demarcation between believed, we all have different lived experience, so the more experience you have, the more believed you have.

**Evan LaPointe** (00:32:03):
Then the believable and then the unbelievable, but yet conceivable, these lines shift a lot from person to person. An idea that totally makes sense to Uri, he's probably been in a thousand meetings where other people are like, "That'll never work." Even though obviously, science knows, for example, it totally will. One of the great benefits of science in culinary school is let's not reinvent ideas that are already proven. We already know that certain things activate people's purposeful state and the full brain that seeks comprehension seats deeper problem solving, seeks human connection. Those are known things, and the same thing as the debate about the value of design sits in the strategy and vision. How do we know there's an ROI to a better design here? Well, if you could disprove that instead of proving it, because the last million people who asked this question proved it.

**Evan LaPointe** (00:32:54):
If you could disprove it, you'd probably win a Nobel prize for being the first human to disprove something that is like ironclad. Like, we're done. We're done with this debate. That, I think is what we have to recognize in ourselves. Big part of self-awareness is where our unbelievable threshold begins, where our believable threshold ends. Then the inconceivable is like, get out of my office level stuff. A lot of the vision thinking and dialogue that happens inside of businesses directly activates people's inconceivable response without any self-awareness that, that's a personal problem, not a objective problem. I think it's a really, really important thing for companies and individuals to invest in themselves to kind of say, "Do I have the capacity to recognize the situation that I find inconceivable, but that could be totally wrong?" Then we can avoid the months potentially of arguing that sit between us and experimentation.

**Evan LaPointe** (00:34:00):
... that sit between us and experimentation. So I think that's the starting point for that. And if we were to do paint by numbers on that, what dominoes do you want to knock down? Know your personality, what you're looking for in the Big-5 model which we lean into is openness. If you are low in openness, your brain essentially has abstract, creative, intellectual, complex thinking wired to the pain systems of the brain. That's how your wiring is. As soon as things get abstract, not only are you like, I don't like this, you have a much more visceral negative response to these types of ideas, and you are now going into your pain cave while somebody else in the room may have all that abstract, creative, exploratory thinking wired to their reward systems.

**Evan LaPointe** (00:34:55):
So that's something to really know, and vulnerability is the best approach to this because if you think about the domino two, once you know this stuff, then the question is how do we socialize this knowledge in a team? Let's say it's a C suite, a leadership team, a founder and co-founder and the rest of the leadership team. And we work a lot with YC companies on this here, because it's super important. As they hire people, every incremental hire is an increment of psychological diversity, and it changes everything about how these conversations go.

**Evan LaPointe** (00:35:27):
So knowing this, okay, what are our options to socialize this knowledge? Vulnerability is the best option. But Brené Brown will sell vulnerability for its own sake, not everybody buys selling vulnerability for its own sake, because it's a scary thing. But it gets a little less scary when we consider how much scarier our alternatives are. I can pretend to hide this, that's my other option, or I can not hide it, be a Tasmanian devil, and then be unapologetic. So those are your three options, and when you realize I can be vulnerable, I can attempt to hide it, or I can be unapologetic, those other two options are ruinous compared to vulnerability.

**Lenny Rachitsky** (00:36:13):
The thing you said about openness and not being good at big vision, brainstorming, super resonates with me, because that's exactly me. So I took your test, what is it called? What do you call this test, by the way?

**Evan LaPointe** (00:36:27):
CORE identity is what we call it.

**Lenny Rachitsky** (00:36:28):
CORE identity test.

**Evan LaPointe** (00:36:29):
Yeah.

**Lenny Rachitsky** (00:36:30):
Okay, cool, and we'll link to it in the show notes.

**Evan LaPointe** (00:36:32):
Okay.

**Lenny Rachitsky** (00:36:32):
So I took, it's basically the Big-5, agreeableness, conscientiousness, extraversion, openness, and formerly known as neuroticism, now called need for stability. I'm looking at it right here. And I'm actually, and I knew this about myself, I'm pretty low on openness, which I don't like to see, but it very much aligns with exactly what you said, I'm not great at big vision thinking. Like when people propose, say a designer on my team proposes this whole redesign big vision rethink of the way we, I'm like, no. It's my pain cave, like you said, and that's exactly what this test reflects.

**Lenny Rachitsky** (00:37:10):
So I think it's a really powerful example of just understanding this is the way your brain is going to respond to things that are totally out there, inconceivable, or how would you call it? Somewhat conceivable but not necessarily believable, and that being aware that that's how your brain works is really powerful, being aware other people have a very different experience with that is very powerful. And your advice here is one, this combination of this habitat, create this habitat where you have all these versions of people's ways of thinking, where some people are in their happy cave when they're thinking big, and then along those lines, your point about vulnerably sharing, hey, this is me, I am low in openness, people need to understand this on my team, and let's work together to not let that hinder us. Is that right?

**Evan LaPointe** (00:38:04):
Yeah, absolutely. I mean, because if you think about these ideas as pegs in holes, we're going to take a creativity shaped peg and try to put it through a more pragmatic shaped hole, there's a translation problem there, and it's a huge burden. If the team actually needs to be innovative, it's a huge burden just in terms of time spent on that translation, to translate the visionary strategic ideas that are accurate but are inconceivable into ideas that feel believable for those who need that more grounded thing.

**Evan LaPointe** (00:38:45):
And of course the most common scenario here is ROI, which is the classic question to ask about any idea, what's the ROI? Well, if the idea is inherently generating nth order effects instead of first order effects, like what is the ROI of having fresh flowers in the lobby of a Four Seasons hotel? There's two possibilities for the Four Seasons, they either have an answer to that question which satisfies the pragmatic shaped hole, or they have said in their habitat, we don't ask those types of questions because they're a huge waste of time.

**Evan LaPointe** (00:39:28):
And if you're thinking about a competitive market, most of the people that you interview are in highly competitive markets, the team that spends less time translating satisfactory language before they move, which inevitably they'll move, and sometimes they'll move because the market forces them to. They spend so much time locked up in the ROI conversation or the justification, the translation conversation, that eventually customers start leaving, employees start leaving, and they're like, oh, okay, it's becoming more believable now. Well, because moved out of the realm of ideas into the physical world that we can see right in front of us.

**Evan LaPointe** (00:40:05):
And that team, because they got stuck in the translation phase instead of the experimentation phase, has a huge disadvantage in the market, and if you're competing head-to-head with one team, this is what I loved about the Figma conversation, that habitat inherently is built for speed because the habitat itself, words are tattooed to your brain that are like, we will not spend time in the translation phase, we will not spend much time. And we see this a lot in the interplay between finance departments, product departments, and things like that, where an overpowered CFO can start asking questions for which there are no answers, that just we're dragging the team into a different language that is much more literal than the more experiential language of the business, so you can see this play out all the time.

**Evan LaPointe** (00:40:59):
But I think vulnerability is great because if you are sitting in a meeting, you Lenny, and you say, this is not my thing, basically everything you're saying is inconceivable, now I'm being honest with you, nobody's going to hate you for being honest, they're actually going to be glad that you are honest about the gap instead of glad that you are super certain that you are the right human to index off of in the decision-making process.

**Lenny Rachitsky** (00:41:26):
And the thing you recommend being open about is this is my personality, this is my CORE identity, I don't know the language you'd use, but it's not I think all this is inconceivable, it's I think all this is inconceivable because this is the way I think.

**Evan LaPointe** (00:41:41):
Absolutely, yeah, unpack the detail, for sure.

**Lenny Rachitsky** (00:41:42):
Got it.

**Evan LaPointe** (00:41:43):
Yeah, I mean tell people, this takes my brain, all this abstract and creative future-centric thinking that's not rooted in the concrete is where my brain goes, alarms go off and I'm like, I need something concrete. So if you can give me something concrete, I'm more comfortable, but at this point I have to maybe move into a lot of trust, and trust may be my alternative to agreement, right?

**Lenny Rachitsky** (00:42:10):
Yeah. And there's also, I imagine, what I always do is I recognize, hey, I'm not amazing at this, let me push myself to be more open to these things and find partners that are really good at this and let them drive the ship more.

**Evan LaPointe** (00:42:26):
Yeah, and it's great, one of the things that's so cool about the YC teams that we work with is they're so sophisticated and so smart. So even though they might run into this roadblock, A, they're going to do exactly what you just said and they're going to push themselves. You may notice in your profile the dot that you scored is surrounded by rings that represent how hard it is for you to push yourself to think in different ways, to think beyond the home base way of your brain working.

**Evan LaPointe** (00:42:55):
Now at a certain point your brain breaks and you move into foreign territory, and there's a level of, I mean, if you are a very conservative person and somebody's like, "Let's go to Burning Man," that will break your brain. You don't go all the way to the other side of the spectrum necessarily.

**Lenny Rachitsky** (00:43:13):
For the record, I've been four times, even though I'm apparently low in openness.

**Evan LaPointe** (00:43:17):
Perfect, and there's lots of reasons to go.

**Lenny Rachitsky** (00:43:20):
Got married at Burning Man. Makes me feel better about my low percentile.

**Evan LaPointe** (00:43:25):
But you're pushing your brain. I mean, Burning Man's actually a great example because there are a bunch of different reasons you might go. And if you go for one reason, then you're exposed to the other reasons. And that may be interesting, and you may kind of venture closer to those other reasons. You may be like, I'm going to stay in my reason bubble within the greater context of this place.

**Evan LaPointe** (00:43:44):
So there's a whole bunch of... And business is no different, you can say, okay, I'm going to push myself, and I may get into these places that go beyond my brain's flexibility, where the elastic band reaches its limits, and then from there I'll trust people and I'll have people, what I was going to mention about the YC founders is so many of them are so smart that they're really able to efficiently translate what they see beyond where your band stretches into the language you feel comfortable with, quickly. Other teams do that really badly and they just accuse you of, "Why can't you see this?" And then you get even more stuck.

**Lenny Rachitsky** (00:44:26):
How much shift have you seen in people, say they take this test and they're like, as I am, 23rd percentile in openness, do you see people move meaningfully across this if they work on these sorts of things, or is this just like, here's who you are, you're not going to change significantly?

**Evan LaPointe** (00:44:41):
Personally I'm more concerned with the effect on teams than on people, because if you look at this through the... I've been a four time founder, and if I look at this through how is my company working? How are my teams working? I don't need all the individuals to get to perfect, I need, especially in cases where there's this translation issue where a team is working on something and some part of that team is saying, "Let's stop here and let's dwell here." If they can move enough that the team, the effect on the team is now freed up, that's what we really feel as a business.

**Evan LaPointe** (00:45:23):
So to answer your question directly, people can move a lot, especially through the first three rings of that range that we depict, really, really well. Self-awareness is actually kind of the key, and self-awareness and self-consciousness, the difference here is that self-awareness is simply being intentional with your brain, whereas self-consciousness is being worried about your brain. We don't want people to be worried about their brains and insecure, we just want you to say, this is a situation in which my brain can work this way, and this is a situation where I want to push myself.

**Evan LaPointe** (00:45:56):
So it's being intentional, and we talked a little bit before this episode about this instinct versus intellect duality in the mind, and essentially you're just using your intellect to either verify or improve your instinct. You're always going to have instinctive responses about risk and fear and uncertainty and doubt and need for data, and all these types of things, but then your intellect can come in and watch that part of your brain thinking and say, you're super worried about the risk of this, but it's actually pretty low stakes for us to jump in and try. So your need to stabilize that is a little misplaced, and your intellect, that's really what you're doing is saying, how much do people change? I don't really worry too much about how much they change, it's more about how much they can spot with their intellect something that's misfit to the situation, and then take what they're motivated to do, and what they choose to do, and separate them. It doesn't matter if we change your motivations, if your choice of behavior and your underlying motivation can be different from each other, that's awesome, those people are super. And we all know people like that, where you're like, I know this person is uncomfortable right now, but they're totally making it work, and I really appreciate that.

**Lenny Rachitsky** (00:47:12):
Yeah, part of the reason I ask is, I was talking to you about this before we started recording, I want 99th percentile at all these, I just want to nail this. And I know that's not how it works, I know you have strengths, you have weaknesses, you can't be amazing at everything. But that's funny my mind goes there.

**Lenny Rachitsky** (00:47:28):
Just to close the loop on this advice around getting better at vision and strategy, if I were to reflect back what I'm hearing its be very self-aware about what you are not strong at, say openness. Is that specifically the one to focus on if you're trying to figure out how to get better vision and strategy?

**Evan LaPointe** (00:47:46):
So there's a whole bunch of stuff... Well, let me try to make the list simple. Openness is the biggest one because it is essentially your tolerance of vision and strategy, and the lower that is, the lower you will tolerate the abstract pieces of the puzzle, for sure. The outlandish and purely creative and rules-breaking components of strategy and vision, lack of precedence, those types of things. Now the other thing to look out for is as your conscientiousness rises, which is essentially your desire to be efficient, effective, busy, not waste time.

**Lenny Rachitsky** (00:48:23):
I'm high on that one.

**Evan LaPointe** (00:48:25):
Yeah, structured and organized, that is another contributor in the negative, which is it's objectively great to be a conscientious person, there are so many benefits, until we have to waste time productively, or we have to break order in organization. And then that strength that four days a week, or 28 days a month is great for you, on those days where we go and have the offsite and say, what if we blew it all up, to your example of new design, new website, blow it all up, start over again, different direction, that's where the conscientiousness is going to be like, why are we doing this? Why are we having this conversation? What's the need? This is inefficient, I could be spending my time doing something else.

**Evan LaPointe** (00:49:09):
And sometimes that'll express itself even in meetings of, I was in a meeting one time after we were acquired, this was eight or nine years ago now, and when you're a founder and you get acquired, there's a new flavor of habitat that you find yourself in with very new rituals. And one of the rituals that I find myself around a lot was the ritual of saying, we can't talk about this for the rest of our lives. And we would be about six minutes into a meeting when somebody would drop the, "We can't talk about this for the rest of our lives" line, and I would look at my watch and be like, "I didn't realize that you were terminal, I mean, why are you even in this meeting if you're about to die?"

**Evan LaPointe** (00:49:53):
Because my take on this is we are super far away from the rest of our lives right now, why are you saying that we can't talk about something for six minutes when the diminishing return of added information in the priming of this meeting, to use that again, you knowing X quadruples your decision quality, and you are resisting knowing X. Now we're going to hit a point where you knowing Y, Z, etc, we've hit a diminishing return and now I'm improving your decision quality by 1% instead of by 4x. But we haven't established any sensitivity in this room to the diminishing return curve of incremental thought and incremental information. And this is like a new habitat, I'm like, in this habitat do people really hate thought? Do people really consider themselves to be the police that watch the mean streets of intellectualism for any activity? It's just kind of crazy. But yeah, that's kind of the practical side of this, is you got to watch out and you got to be careful, and that's why I habitat is such a big deal because that's a perfect example of a well-intentioned room with mostly people that are there for the right reasons and the right outcomes, but where this normalness of saying a phrase like that, or saying, "I disagree." Same meeting person goes, "I completely disagree," and I was like, "With everything?" "Absolutely everything." And I go, so let's look at the meta, the overhead camera of this meeting.

**Evan LaPointe** (00:51:33):
This was the initiation of combat, that's what the brain is seeing. All the brains in the room are like, oh, fight, right? And now what are our objectives? My objective now becomes win, their objective, because they've taken a huge risk of saying, I disagree with everything, becomes win, and because they are disagreeing with a lot of stuff that they don't understand, the inevitability is they're about to be annihilated in this room where they have both said, we can't talk about this forever, and now put all of their chips onto the table to say, "I completely disagree," instead of, "I have a question," or, "Can we pull that thread?" Or, "I don't see how these dots connect."

**Evan LaPointe** (00:52:15):
So that on a super tactical level, there's things we say that activate the amygdala, the combat mode of the brain, versus a different choice of phrase which is going to activate the prefrontal cortex which is like, "Hey Lenny, you're connecting these two dots, I'm not seeing how they're connected," logic, now let's activate the prefrontal cortex with this sentence instead of, "Lenny, that's dumb, I completely disagree," let's activate the amygdala instead.

**Lenny Rachitsky** (00:52:43):
I want to talk about this habitat point you're making which I think is really important, but just to close the loop on the strategy vision piece, so just to give people some very tactical advice is, basically understand your personality, maybe take this CORE identity test, or something like that, understand if you're low in openness and high-end conscientiousness, maybe you're not amazing at vision and it's going to be hard for you to think big and think of it-

**Evan LaPointe** (00:53:06):
Yeah, your brain is just going to feel agitated when you're around vision. But, I mean, you can still do it, right? You can still ask people to translate. The key tactic is, okay, it's not this you're predestined to suck, it's more if you're low and openness, especially if you're also high in conscientiousness, then recognize your native language for ideas is a mismatch for the native language of vision and really, really good strategy.

**Evan LaPointe** (00:53:35):
And then you can be open about that and you can ask for some translations, and you can ask for... I mean, trust doesn't have to be non-participation, you can actually say, it would help me trust if you could explain this gap. A great example would be a second order effect, why should we have awesome documentation? How are we going to make more money if we have awesome documentation? Great question, don't be hostile in the way you asked it, but just help me understand, what thread are we pulling? Well, we're pulling this thread of customer satisfaction, retention, recommendation, et cetera, Stripe is really good at this, especially from the early days, that great documentation justifies all sorts of second order effects that then will lead us to this first order effect you're asking about.

**Lenny Rachitsky** (00:54:20):
Awesome, okay, that's really great. And I was going to go one direction, but I want to talk about this real quick. Something that comes up a lot on this podcast is the power of leaning into strengths and not feeling like you have to be amazing at everything, and that in this example, I have a low openness, high conscientiousness, I can still be very successful in the role by, in my opinion, leaning into things I'm actually really strong at, say conscientiousness, and I'm also high in agreeableness. I don't like the sound of that. Thoughts on just, it's okay if you're not amazing at vision because your openness is low, but you can be better at other stuff and together you can be really successful no matter how your personality.

**Evan LaPointe** (00:55:03):
Absolutely right, yeah. I mean, the truth is we look at, taking that Canva example of coaches and managers, not only does that change the way an employee feels about the way this connection they have is invested in them, but it also changes inherently a lot of the meeting dynamics and teaming dynamics from hierarchical feeling things manager to more mesh based intellect. And within the mesh, you don't have to worry too much about the hierarchy anymore. You can say, this is the nature of my contribution.

**Evan LaPointe** (00:55:39):
So even in the vision and strategy piece, maybe your contributions to idea generation, there are going to be some, and they're probably going to be good. But those are not ideas to protect in the state that you brought them to the table, they're ideas to set on the table so that people can surround them and improve them. And then as other people contribute ideas that aren't as natural to you, kind of just realize we're not in the phase yet of judging and ranking and prioritizing these ideas, that's not where we are in the overall storyline. So let it happen, and then if you can improve those ideas, improve them.

**Evan LaPointe** (00:56:15):
And once ideas have that early stage, that kind of like what Jony Ive described as the infancy of an idea, when it's really weak and delicate and susceptible, if you can nurture that idea to adolescence where it has a little bit of ability to defend itself, then now you're in a situation where your conscientiousness can start to think about things like how would we resource this? What sequencing makes the most sense? What is the ROI of these things relative to each other? And consider the second and third order effects, and so on. And what would the project plans, and to your point of being both conscientious and agreeable, you are this master of coordination and alignment naturally.

**Evan LaPointe** (00:56:56):
So when that phase of the project begins and we have to get people bought in, high functioning together, getting on the same page, staying focused, getting the project done, all of the people that were good at the beginning with all the vision and strategy, they are just a complete disaster in that phase. That's just how things really work in the real world, and I think we're so, again, focused, like we talked about at the beginning, we alluded to the fact you have to unpack enough complexity. I love the Einstein quote, " Make things as simple as possible but no simpler," and we've made things way simpler than possible in business by saying this is the right way of doing the whole thing.

**Evan LaPointe** (00:57:41):
It's like, no, no, no, if you've ever lived a day in real life, building a real product, the dynamics shift a lot throughout the course of product life cycle, as an example, or really any life cycle as an example. And the peak humans as the dynamics shift are very different, peak humans. Lenny is awesome here, contributes here 10%, contributes here 98%. Evan contributes 98% here, please get Evan out of the room when it comes to these meetings, that's great. And yes, we should lean into our strengths, but not so much that we don't know our weaknesses, because another human strength on your team is the patch for the bug of your weakness. And we run buggy software in companies and we say, "Oh, I am leaning into my strengths, I don't need to worry about my weaknesses," well, then you become the person who needs everything translated into your language because when your weakness flares its head up, it slows everybody else down.

**Evan LaPointe** (00:58:41):
So it's really, just from an operations business fluidity perspective, a team that is highly unaware of its weaknesses is going to have a lot of slowness and a lot of problems as a result of that. They don't have to fix all their weaknesses, but be aware of them and know who is a patch to your weakness.

**Lenny Rachitsky** (00:58:58):
Evan, this is so interesting. I love that we're digging deep on this. Is there one tactical thing you could recommend for someone to become better at openness in, say, a brainstorming experience when they're doing vision, or when they're low at this, say me.

**Evan LaPointe** (00:59:13):
I think the best exercise for a conscientious person especially to feel more open is to become obsessed with reverse engineering. And it's to say, there's two forms of reverse engineering that I think are really helpful here. Number one would be reverse engineering against a desired outcome, to truly understand the inputs that generate that outcome. And if we think about that at a big level, like, okay, we want to win a market, what are the real inputs to deconstruct that outcome and understand what our strategy should look like to attack all of the most relevant inputs that generate that outcome? I think that's the specific form.

**Evan LaPointe** (00:59:55):
And then at a super tactical level, if you want to give feedback to somebody, and let's say, for me, I'm low in politeness, you're probably much higher in politeness than I am, and I struggled for years with feedback to generate the intended outcome. I delivered the feedback, but the delivery wasn't the intended outcome, and the way that I delivered it actually reduced the probability of the intended outcome because I was being too impolite, too direct in many cases, too harsh. And what does harshness do to the brain? Well, that's crystal clear. So what I was doing and what science knows were very different things, and that's why I failed in those cases.

**Evan LaPointe** (01:00:35):
But as soon as I started closing the gap and realized I need to try harder to think about the story arc of this feedback, that becomes clearest to me how to do it when I have the intended outcome in mind for the feedback, I really would like this person to start turning the corner on this particular way of thinking. If you and I worked together and it was about openness, we'd be like, what are some things that I could do right now to increment and set the stage for a big shift in openness as time goes on that you are bought into? And that's a very, if I'm impolite and be like, "Lenny, what's your problem? Why can't you do this? Everybody else can do this."

**Evan LaPointe** (01:01:13):
Your willingness to start turning that corner, I mean, it may be there, the safety system is activated, like, oh, bad things could happen if I don't do this, but I don't want your safety system to motivate this change.I mean, in most cases, that's an optics based change instead of a material change that will occur. And that's why a lot of people, accountability is a great example, asking for accountability is the best way to not get it, because asking for accountability activates people's safety systems, or especially saying, "I'm going to hold people accountable." Then everybody's like, oh, great, we should set up a whole movie set of facade houses that pretend everything's great with no substance behind them, and that's why so many companies end up that way. But yeah, I would say that's the tactical.

**Evan LaPointe** (01:01:58):
The second thing to understand about openness and reverse engineering is just situational awareness. Very few conscientious people spend, in my opinion, as a very open person, enough time immersing themselves in the reality that is every day situational awareness necessary to do their job. Simplest example of this is how many executives have ever talked to N greater than five customers? That is a... Because, well, I'm busy. I got a lot of stuff to do, I don't have time to go take a world tour, which is like we don't have the rest of our lives to talk about this. I'm not asking you to take a world tour, I'm asking you to stuff into your brain enough situational awareness that the decisions you make every day that affect all those people you're not talking to are considering those people that you're not talking to.

**Evan LaPointe** (01:02:49):
So less about an intended specific outcome in this case, and more about, do I really know the... I would think about this as if we think about aeronautical engineering, do I actually have an understanding of the conditions, the flight conditions, that I'm in every day in order to fly really well? And the answer to that for a lot of people is no. So reverse engineering is probably the whole category. I don't know if that makes enough tactical sense, I'm happy to be more descriptive, but that's the category I think is have you reversed engineered how to get outcomes and have you reversed engineered to predispose your mind to come up with really good ideas and good decisions, as opposed to come up with decisions that are super disconnected from reality.

**Evan LaPointe** (01:03:37):
Great example being PLG, I mean, if you haven't done enough situational awareness work, you have no idea if PLG is a remotely viable strategy for growing your business. If it's remotely relevant strategy for growing your business. And company after company after company has leadership team obsessed with this concept that in principle we should be able to let people just sign up and swipe a credit card and onboard and great. No, we have a hyper technical solution, that is never going to happen, or that's not the way they do budget, or there could be any number of ways that that's not going to work out, and those are just some concrete examples.

**Lenny Rachitsky** (01:04:18):
**Evan LaPointe** (01:06:05):
We'll probably unpack a second topic and open up an off ramp here right at the beginning, but there's two things, there's influence itself and then there's relationships, and we should probably talk a little bit about relationships. Trying to exert influence through a dysfunctional relationship is not going to go great. And most human beings, especially when they go to work, are pretty out of sorts when it comes to relationships.

**Evan LaPointe** (01:06:36):
And you even hear crazy mantra like we have to each other to work together, which are like, good luck with that. I mean, just watch a text message pop up on a phone of a person who doesn't like you and watch their response time to the text message, or their Slack message, or whatever. I mean, you're talking about you've built in a multi-day, at least multi-hour delay into responsiveness purely because the relationship isn't good, and then you compound that effect over whatever size your company is. That's massive operational inefficiency just because I don't want to respond to Evan right now. So that's the one piece.

**Evan LaPointe** (01:07:19):
Now assuming the relationship is in place, and we'll come back to that and talk about that because a whole very actionable framework to unpack, assuming the relationship is good, I think the starting point for influence is to choose your character and choose your mode. It's almost like you're playing Elden Ring or some video game, and you're going to be like, am I going to influence him this way as the hero or the exemplar of these things, or am I going to influence through back channels, what is my character? And everybody for your personality has a natural fit for the character you're going to select as this mode of influence, and then you're going to pick a speed of influence, which is slow, moderate, or fast.

**Evan LaPointe** (01:08:00):
Then you're going to pick a speed of influence, which is slow, moderate, or fast. The habitat can help a lot with this. If a founder is listening to this and you haven't created a habitat where fast influence is easy and the permission isn't there, then you're slowing the company down inadvertently by just not clarifying this with the team. So slow influence is the we'll let them find out the hard way influence. They're going off a cliff, we know they're going off a cliff. And a lot of times we find ourselves in what's called the Abilene paradox.

**Evan LaPointe** (01:08:39):
The Abilene paradox is where everybody in the room knows it's a bad idea, but we're all like "We're in." And the classic Abilene paradox kind of if you look up memes on Google, it'll be like the dad thinks that the kids might want to go camping. Mom doesn't want to go camping, the kids don't want to go camping. Dad also doesn't really want to go camping, but everybody's like, "Dad probably wants us to go camping, so let's give it a go." And they all go and don't enjoy it. And we see that play out all the time.

**Evan LaPointe** (01:09:09):
And a lot of people will just say, "I can't do anything. I don't have any influence in this case. We're just going to let him fail and they'll learn." Or this impolite person like me giving feedback the wrong way years in the past, I'm not going to sit Evan down and talk to him about this. He'll figure out on his own through failure that this doesn't work. And that can take months, that can take years, that can take a lifetime for people to learn the slow way. And it is a form of influence. You are being intentional to say, I think the world will create enough failure that adaptation will occur. That is a form of influence, just the slowest one.

**Evan LaPointe** (01:09:48):
And a lot of people listening probably realize, "Oh, that's what I'm doing. How can I go way faster than just letting things fail?" So that's where moderate influence comes in. And a great book to read for a moderate influence is the Challenger Sale. And in the Challenger Sale, what we're looking at is the concept of teaching people something. And then when they live with this new knowledge, they'll see things that they weren't seeing before. So for example, in the feedback example that we can keep using over and over again through this is, "Hey Evan, you might want to notice people's body language while you're saying these things and here's some signs to look out for that when you've done this and you get this, that's probably a sign that people are bought in and still with you. And when you see this, that's probably a sign that people are pushing back."

**Evan LaPointe** (01:10:37):
And you can ask this question in that moment and you'll probably hear answers like this. So you're like giving somebody a tool that their future is going to unpack. And the Challenger Sale kind of assumes a long enough sales cycle where you're not going to land the sale in the meeting, you're not trying to close them right there. You'll teach them some stuff and you'll, "Hey, if you see this stuff, that's a pretty clear sign that you need to take action. So why don't we call you in 30 days, and 30 days later we get on phone, "Hey, have you been seeing this?" And they'll go, "Everywhere I look, I can't not see it now."

**Evan LaPointe** (01:11:13):
And that's how you influence a person in a few days, a few weeks, maybe a few months at worst, way faster than letting them fail.

**Lenny Rachitsky** (01:11:22):
We actually had, I don't know if you know this, we had the author of that book on the podcast, Matt Dixon, I think his name. And the Challenger Sale, the idea there is challenge their perspective and view on what is actually real about the market and what they need.

**Evan LaPointe** (01:11:36):
Exactly. Yeah. I think yes, there's the challenge component to it, but I think the underappreciated piece of that methodology is that you're still letting that person see the world, but you've given them new information that is breaking some calcification in their brain challenge. It's not the moment of the challenge where all the magic happens. There's moments that occur later that continue kind of putting that calcium, lime and rust melting formula on this expectation or this kind of decision in their mind to the point where sometimes they'll turn around and be like, "Thank you for even telling me this."

**Lenny Rachitsky** (01:12:19):
So the advice here is if you're trying to influence someone, try to figure out what they don't know. Find information that you know they may not know because once they know that and they may be like, "Oh wow, I totally see what you're saying."

**Evan LaPointe** (01:12:33):
Yeah, exactly right. And let them know it and let them live with it. Don't cram it down their throat and make them accept it If they live with it just a little bit, even just a couple days, that might be enough to come back to a much softer conversation.

**Lenny Rachitsky** (01:12:47):
Does this connect to what you said earlier, which I love this idea of pick a character, like pick your influence style based on your personality, whether it's back channeling and that makes me think of a very specific person. He's coming on the podcast actually, he's this Jedi that just gets people aligned but very behind the scenes, very the meetings before the meetings. So that's one character or it's just telling a compelling story probably in a deck. Or there's other character I guess. Does this idea of sharing information, is that a type of character or is that just something that everyone should just do because a really effective strategy?

**Evan LaPointe** (01:13:27):
I like the idea of intentionality in just about everything. Are we letting trade winds push us into certain things or are we actually making choices? And I think that step of being intentional about your style and this kind of notion of a character is a wise step to take so that you can kind of have some guardrails as you go through this and some consistency. It helps other people understand the role you're playing in influence. If you are consistently coming from the same place, you're about that style, like I want to try to influence this organization by doing this way and you're going to see that from me over and over and over again.

**Evan LaPointe** (01:14:07):
You kind of have given yourself a little permission and also you can get some buy-in from people. If you do want be more the barbarian kind of approach, you can say, "Hey, I'm the devil's advocate approach, or I'm the break it and see if it still stands after I hit it really hard with a sledgehammer kind of guy." Is it okay if I do that over and over and over again? And now you've bought future you the permission to approach things in certain ways that would yield meaningfully different influence outcomes, like meaningfully different. I was able to do this and it accelerated something.

**Lenny Rachitsky** (01:14:40):
So the way I am hearing this is there are many ways to get what you want, think about your personality style and find the path that is most aligned with the way you operate.

**Evan LaPointe** (01:14:52):
Exactly.

**Lenny Rachitsky** (01:14:52):
Whether it's behind the scenes, whether it's a compelling story. Awesome. So this character is basically figure out what your... It kind of comes back to leverage your strengths, what are you good at? And use that channel to convince people of the thing you want them to be convinced of.

**Evan LaPointe** (01:15:08):
Yep, absolutely.

**Lenny Rachitsky** (01:15:11):
My mind goes to what are the list of ways, what are the character options in this list when I'm opening up the game and choosing? You went through a few, but just to give people like, oh, okay, I see I could try it this way. Is there a small list you could share of just like here's ways you could try approaching influence.

**Evan LaPointe** (01:15:27):
Probably the dimensions are most valuable to people. I would say one of the dimensions is compassion, which is do I want to influence by trying to help people, by trying to make sure that we get it right and that people get value. And then the permission I'm seeking there is can I ask questions about why are we not thinking about the user right now? Why are we not concerned with the value they're getting and challenge us in that way?

**Evan LaPointe** (01:15:59):
I think there are characters based on logic and even belief, which is I would like to be the one to insert more knowledge and insert more causality into conversations and challenge causality in conversations to make us think harder and challenge what we believe and break up the sacred cows of the stuff we walked in the meeting with so that we feel differently about things walking out of meetings.

**Evan LaPointe** (01:16:27):
So I think there's a bunch of different very useful dimensions. One could be very creativity based. If you follow this big five format, they're kind of spelled out for you. Enthusiasm, interesting dimension. I want to challenge us through the lens of what do people get excited about? What makes people feel good? Does this make people feel good? And are there tweaks we could make to the product or this marketing campaign or whatever.

**Evan LaPointe** (01:16:54):
Look at what Siki just did with Runway. I mean I love that guy so much and there's so many components of his character and obviously the characters he surrounded himself with that contribute to really next level stuff. And they're definitely challenging each other using these dimensions of compassion to be the character of caregiver or the character of protector. And so there's a bunch of different ways you could turn those dimensions into characters.

**Evan LaPointe** (01:17:28):
But I think when you see the value of each of those perspectives, especially in product, I'm a really big fan of product. If you have dysfunctionally high compassion, dysfunctionally high openness, you have internal rewards and motivations to explore regions of product that other minds aren't exploring as intuitively. And you don't have to have the whole deck to be amazing at product. But you have some unfair advantages if you are super prone to reverse engineering just by your nature. You are going to be more situationally aware and probably make a series of vastly better decisions than the team that has a lot less situational awareness than you do. It's a huge advantage.

**Evan LaPointe** (01:18:16):
But when it comes to the concept of influence. I mean figuring out these dimensions that define who you are and then using them to kind of say, "I want the permission to ask a series of questions and challenge our thinking through this very intuitive strength that I have." Can we all see the value in that or do I need to further sell myself? And then you'll find you can take on that character and play that role really well.

**Lenny Rachitsky** (01:18:45):
I imagine the ultimate unlock is that combined with what is that person's personality style and what is the best way they receive information, which is a little harder. Because you can't force them to take some tests and you can't make them give you the results. But I know a lot of teams do these tests together as a team and share the results. And so it's I guess a reminder of just that's really powerful if you and your team, especially the execs at company.

**Evan LaPointe** (01:19:09):
Yeah, exactly. And when you move into this vulnerability out of your three choices state, we don't need a bunch of data for that to work really well. If you said, "Hey, I'm not super strong at this," and the rest of the room was like, well "Wait, this other person's super awesome at this, why don't not the two of you work together," then it's like under 30 seconds we've unlocked potential that wasn't there.

**Evan LaPointe** (01:19:34):
So you want to get business.... I kind of think of extending the video game metaphor. Not only are we choosing our characters or we are a certain character, but the business has a difficulty setting that we chose based on the habitat. And I've worked in and with way too many companies where we are playing the game in nightmare and every enemy takes a thousand shotgun shells to bring down instead of just switching the difficulty setting to easy, which is like the enemies somehow become our friends as we go through this journey.

**Evan LaPointe** (01:20:06):
I mean, it really can be that transformative, especially with a case like yours that you talked about. Okay, I am not as high in openness. I'm very high in conscientiousness. If I can admit this and ask different types of questions, everybody else in the room will be like the difficulty setting of this just went to zero and the speed of it just went to way higher than it used to be.

**Evan LaPointe** (01:20:32):
And we underestimate this kind of less concrete part of the business world. And I mean that's the genesis of this whole business that I was crazy enough to start after starting other companies in the past, which is like we are underestimating how much of our operational reality is a function of our human reality. And are we doing enough? Are we doing the right things to close the gap between what science knows and what business does? And do we even know what the science is? Have we educated ourselves to close the gap? And then it becomes super obvious, oh, this makes a lot of sense to be open and find the patch to my bug. And here we go.

**Lenny Rachitsky** (01:21:13):
This fractal of topics continues to grow. I'm trying to contain it. There's three things I want to try to talk about in the rest of our chat, that stuff we've touched on that I think will be really useful to people. One is relationships. You mentioned there's more to talk about there just how to build great relationships. Two is I want to come back to the habitat and building a habitat that is very conducive to innovation and speed and success and those sorts of things. And then I want to talk about focus. We talked a bit about just how important focus is and how differently our brains operate in different states of focus. So maybe we start with the relationship piece just because that connects to what we were just talking about of how do we strengthen relationships, create better relationships within our teams.

**Evan LaPointe** (01:21:53):
Yeah, so we were talking about relationships kind of as this off ramp or this kind of sidecar to influence. And real quickly the fast mode of influence and relationships goes really well together. So we talked about the slow and the moderate. The fast mode of influence is cognitive dissonance. It's essentially saying in the moment, I'm not going to wait for you to experience anything. It's saying in the moment, how does this formula compute? Explain to me, Evan, how you being too blunt in feedback is going to end up in a human being changing. Why do you believe that?

**Evan LaPointe** (01:22:29):
And especially it's that second phrase of why do you believe that drill below the behavior down into the belief. What do you believe that has you doing this? And then we can explore how preposterous the belief itself is, which then bubbles up to the surface level of this.

**Evan LaPointe** (01:22:47):
And if in the environment, the habitat's a huge component of this as our relationships, which is if you have great relationships where people trust each other enough to have this kind of cognitive dissonance conversation, and we have a habitat that is very clear that we are free to discuss cognitive dissonance and logical disconnects, that is really important to do. Then you activate fast influence mode basically. So that's a really important thing. And then as you transition to relationships, well what are... The question that everybody kind of glosses over in my opinion is what is a relationship? I don't know how you feel about answering that question, but it's a really hard-

**Lenny Rachitsky** (01:23:31):
I would just go to ChatGPT. What is a relationship?

**Evan LaPointe** (01:23:33):
Exactly, right. Yeah. At this point we have some help that we didn't use to have. But the other thing that goes along with what is a relationship is how good is my relationship with person X? Like, you and I both know Shreyas and how good is our relationship? I would say it's awesome. Why is it awesome? I don't know. It just feels great. So let's double click on a good definition and a good framework because once you actually know why a relationship feels great, that example or why a relationship feels super difficult, now we can start to build some strategies, some actual action plans for them.

**Evan LaPointe** (01:24:14):
So what we propose to people is if you take that third component of your brain ability, that is one piece of your relationships, especially your professional relationships. So if you know an engineer and you have an idea of something you want to build and they have the ability to build it, their ability and their utility to you is a function of your relationship and it will contribute to the positive or negative force that you feel in that relationship. Like, wow, this person has a lot of ability. My appreciation is higher, my faith in them is higher, my cooperation with them is higher.

**Evan LaPointe** (01:24:50):
If you question a person's ability or they've proven that ability is kind of unreliable, those things start to kind of vector downwards and we will pick on Shreyas through this as a good example? Because I think most of the people watching also know him. What is his ability? What is his utility? As high as I've ever seen. I mean every conversation he's intellectually conceptually additive to. You're better after you've talked to him every time. At least that's been my experience with him.

**Evan LaPointe** (01:25:20):
And we all know people like that, with various fields and various abilities. So that's one piece that's really important. And why as an individual, it's so important to invest in your ability because it is so integral to every relationship you have, particularly professional relationships and your ability, knowledge, your reasoning, your imagination, your skill set, these are all incrementable facets of you.

**Evan LaPointe** (01:25:50):
And that's really, really key. Now here's the plot twist. Your ability is actually not the most important part of a relationship, biologically speaking. There's two more that matter quite a bit more. And the surprise ending is that the third one matters the most, which is scary in some cases.

**Evan LaPointe** (01:26:11):
The second factor of relationships is trust. So trust in the brain. If we go very primitive back to the amygdala that we talked about earlier, trust is simply risk. Human level risk and trust can span from strongly negative to strongly positive in a relationship. And we felt that full range with different people in our lives. Strongly negative trust is the brain saying, this person is dangerous to me. They're very likely to try to undermine me. They're very likely to not deliver something. Personal harm will occur by essentially kind of interacting in this relationship.

**Evan LaPointe** (01:26:51):
And then on the other side of trust, we kind of try to create some levels to this to keep it clean. And the fractal continues to grow a little bit, but we'll try to keep this simple. But I like to think of trust one, two and three. Three distinct levels of trust. And trust one is, let's say we're having a cookout. Trust one is Lenny, could you please bring the chips, ideally sealed, but it's a delegation of a simple non-critical task knowing that it is likely to get done and get done decently well. But it's not like this huge level of trust. It's the people that we work with where this type of delegation, and especially if people delegate under the thesis of "I want to do the high value work, so let me put the low value work on other people." That's all the low value work that we put on other people, and it allows us to purify our focus on the high value work, and we don't need all the low value work to go beautifully well or be artistically brilliant.

**Evan LaPointe** (01:27:53):
So trust two is when we step up to almost like "I need to do this myself. Is there anybody who could do it as well as me?" That there's no risk to me having them do it instead of me doing it. And that's where you get true scalability of teams. So if you can trust people enough, your brain's assessment of risk of giving this task to someone else or giving this knowledge even to somebody else, that they'll treat it the way you would treat it, is a significantly higher positive trust that you can feel in a relationship.

**Evan LaPointe** (01:28:26):
And then finally, trust three is when we do hit these breakpoints in our brain where we say the way your mind works is beyond the way my mind works on this topic. So the classic example at the cookout would be if Wolfgang Puck was a neighbor, we're going to have Wolfgang Puck do all the most critical stuff and maybe even set up the music and the decor and whatever. Or another example would be like when Steven Spielberg has John Williams score a film, he's not hoping John will do it as well as Steven would do it. He's saying, "Just send me the bill. Try not to go too crazy." But he is not going to sit down with the invoice and be like, "Why did you need 13 horns instead of 11?" John just gets to do what John does because there's so much trust in this kind of beyond my event horizon kind of risk. It would be riskier for me to do it than for him to do it or her to do it, right?

**Evan LaPointe** (01:29:25):
So that's kind of the level, but that matters more to a human being because the safety system, if it activates, your utility is sunk. So if you're an awesome engineer but you damage people, it doesn't matter that you're an awesome engineer because in the social network, the mesh of your organization, you are a node that has a protective covering around it. Information is not flowing to you the way it would normally, and delegation is not flowing to you and access is not flowing to you the way it would normally. So you are a kind of protected, deactivated, sequestered node of the mesh at this point in time. And a lot of people really don't get that.

**Lenny Rachitsky** (01:30:12):
Yeah, that's a really good way of visualizing.

**Evan LaPointe** (01:30:16):
And then here's the surprise ending. The last piece of every relationship that you have is appeal. Appeal is how your brain interprets the shared experiences you have with other people. Whether or not you look forward to being around that person, whether or not you like their style, the feel of what shared experiences really are. And if you think about, let's pick on Shreyas one last time. What is his ability and utility? Off the charts. To what extent can he be trusted? Trust three, off the charts. Will he ever damage somebody? I mean, not to my knowledge. He may have some really dark past that we don't know about, but as far as I've seen, not a lot of damage in his wake. And then thirdly, what kind of experience is he? He's an extraordinarily positive experience. So he naturally accumulates great relationship after great relationship after great relationship.

**Evan LaPointe** (01:31:15):
And again, if you're that great engineer with a ton of ability, now let's flip the middle dimension. And we trust you a lot, but you're a horrible experience. Are you coming to our offsite? Are you in this meeting? No, you're gone. We don't want you there. You're like a hurricane. So biologically speaking, the biggest bug in our programming as we transfer this to the business context is what makes the most sense in business is the most, if it's a meritocracy, the best people with the best knowledge that we can trust should be in the room and we will fight it with every fiber of our being if they're a terrible experience. And that's a bummer. And what's funny is you can flip it. We all either have friends or know people who have friends that you cannot trust, they have no ability to speak of, but they're a super awesome experience. What a great friend.

**Evan LaPointe** (01:32:16):
So how is it that we get this thing completely flipped? And I think that's the thing. As you parse that list, as anybody listening parses that list, it's critical to ask what kind of experience am I? That is where to start? Not how good am I at my job? How much do I know? How critical am I to this process? But am I a miserable experience? And if the answer is yes, don't worry too much about the other pieces yet, you got to fix that first.

**Evan LaPointe** (01:32:48):
And to this point of the profile, as you parse the profile, you'll find things like obviously not a pleasant experience, like being really impolite, obviously not a pleasant experience, being super overbearing and assertive, obviously not a pleasant experience, being hyper low in openness and enacting out of that and telling everybody they're overcomplicating everything all the time. Not a great experience for people who are actually well-intentioned trying to get it right. So there's concrete things that you can do with this knowledge in mind.

**Lenny Rachitsky** (01:33:16):
This last piece makes me think about why some of the most effective PMs are the PMs that bring a lot of energy and positivity to the team and just get people excited, which is such a soft skill, but such a powerful thing you can do for your team because people kind of look to you to lead them. I had a PM I was working with in every meeting, he is like, "This is going to be awesome." He just comes right in every meeting, "Oh, who's ready to make some decisions," and it really changes everything. And so this is amazing advice.

**Lenny Rachitsky** (01:33:46):
So basically if you want better relationships, which will make you a better influencer, start with what kind of experience am I, when people work with me, ask me for stuff, ask me questions, and you shared a bunch of specific things you can do.

**Lenny Rachitsky** (01:34:03):
Something I always tell people is just try to smile, just look happy. That makes a big difference.

**Evan LaPointe** (01:34:07):
Look happy.

**Lenny Rachitsky** (01:34:10):
Bring energy, look happy. Just try to be excited. Yeah, so if you want to build better relationships which have all these amazing trickle down effects, your advice is think about the experience you are to other people when they work with you, work on trust and ideally get to the place that third level of you are doing it better than them. But that's a high bar for all things. And then the last thing is, are you actually amazing? Work in your abilities, that's kind of the last piece.

**Evan LaPointe** (01:34:38):
Yeah, exactly. And it's not that none of these become unimportant because the other are kind of the gateways. I mean your relationships require all three, especially your professional relationships. So yeah, it's more just like if experience is the only thing undermining you when you're otherwise very trustworthy and very skilled and able, that's a shame. Just fix it.

**Evan LaPointe** (01:35:03):
And there's a whole bunch of ways to go about that. But I like to leave that to people to explore that creatively. Like well, "Oh gosh, okay, I can change this to this to this." On the trust thing, do you hurt people? I mean, that's it. Do people have a reason to believe that you are risky or dangerous? And unfortunately in a lot of habitats, the habitat itself either allows or even rewards people that are super untrustworthy to play the system in advance of the system. And as you talk to Jeffrey about the power conversation, the worse the habitat, the more his suggestions work.

**Lenny Rachitsky** (01:35:47):
I could see that.

**Evan LaPointe** (01:35:49):
And the reason that he's correct, he used the phrase, "This is how the world always has been, is how it is, and it's how it always will be." Well, it's how the normal dysfunctional world always has been, is and will be. And if you want people in your organization to rise on merit and for influence to work to generate better decision-making, make better products, have a better company, move faster, et cetera, you need to create a habitat where what Jeffrey's observed about the normal dysfunctional world largely doesn't work within your habitat. So if it's effective for people to harm each other in your habitat, you are performing at a much lower level than if harming each other was extremely ineffective. And that's up to you as a leader, as a manager, et cetera. And then of course, skill is what it is. It's your ability to convert your intents into outcomes.

**Lenny Rachitsky** (01:36:48):
I'm glad you're talking about habitat, that's exactly where I wanted to go. So just two more things I want to spend our time on, habitat and focus, how to create more space for focus and get better focus. So you've touched on this many times at this point, this idea of a habitat. I think another way to think about this is the culture of your company. Is that right?

**Evan LaPointe** (01:37:06):
Exactly.

**Lenny Rachitsky** (01:37:06):
Okay, cool. So are there a few things you could recommend to people to create a habitat that is conducive of good stuff?

**Evan LaPointe** (01:37:15):
Let's start at the start here. So in the difference between what science knows and business does, let's kind of zero in on the fact that the way most companies approach culture has a very shaky track record. Like if mission, vision, values was an airline, you would not allow any family to fly on that airline. It does not arrive at most of its intended destinations. That is just a super important starting point because I'm going to kill a sacred cow here while we talk about this. And I don't want anybody to feel like I'm trying to be mean or anything. It's just it's worth looking at stuff that doesn't work and wondering if there's something that could work a lot better. So if we look at habitat and culture, it's really about what people believe. It's what people believe is acceptable, permissible, productive, and the biggest flaw in people's approach to culture. And interestingly enough, even at YC, they talk about this mission, vision, values, culture, stuff that comes later, let some stuff happen with the business that comes later. They're right to say that if that's the paradigm you're going to use because it's not going to work either way. So you might as well do it later.

**Evan LaPointe** (01:38:31):
But if you're going to do it the right way and investigate human beliefs, and we talked about priming for example, culture is just the macro priming of the entire business of what your central belief systems are and then the permission that forms from those belief systems. So if you've done that really well, you should do that right at the very beginning. In what way should we approach this company, building this, working together, et cetera? That would be really, really helpful to get right from day one. And the belief system that people have, there are two approaches to changing people's beliefs.

**Evan LaPointe** (01:39:10):
Mission, vision, values is what we call a performative approach. Meaning I'm going to come up with some expression of an inspiring mission, inspiring values and inspiring vision, and it's going to be performed well enough. It's going to be like if we were busking in the park, this is going to be a cool enough mission, vision, values that people throw some change into my guitar case and they buy into it, they gather around. And I think that's just completely the wrong approach because we're hoping to inspire people. We're hoping to be artistically talented enough to pull that off. The other approach is to be deductive, logically deductive, which is centrally speaking. There is hopefully a market out there that's glad our company exists, who is glad we exist, why are they glad we exist? And that's shifting our mission into something that we call your role, the role you play in the world around you.

**Evan LaPointe** (01:40:08):
Who is glad you exist? Why are they glad you exist? And that is a fact. That is not an inspiring idea. That is like, okay, we work with this company that does AI-based optical character recognition, document ingestion, et cetera. Why is the world glad that they exist? Well, because we get 95% of the documents scanned into structured data that normally people have to transfer by hand. That's pretty compelling. Why is the world glad Warby Parker exists? Because before you used to choose between looking dumb and it being cheap and looking cool and it being expensive, and now you can look cool and it's cheap. The world's really glad we exist.

**Evan LaPointe** (01:40:50):
Now that's true. I don't need you to be inspired to believe that that is true. And now everything that we're going to think about for the rest of our beliefs, we're going to deduce from that. So we're just going to use logic to build our culture, not inspiration. So this next thing we need to figure out is how can we understand the specific value that's created when we play this role in the world? We save people money, we save people time, we open up markets, we help people explore possibilities and potential they couldn't tap into otherwise, etc.

**Evan LaPointe** (01:41:21):
So what's the role of Core? People are glad we exist because we tap into potential they had no access to before. And at the team level, at the company level, that could be a really big deal. So we know that and we say, "Okay, well gosh, that implies so much." There's so much we got to do now what value does that produce? And then I could say, okay, once we understand the definition of value, which comes out of our role, now we can change the definition of done. So a lot of teams talk about bias to action. And hamsters have bias to action. They get up out of their straw and they turn that wheel as hard as they possibly can and they go absolutely nowhere. But if you understand the role you play-

**Evan LaPointe** (01:42:01):
But if you understand the role you play in the world, and you understand the value you produce in terms of time savings, cost savings, upside, whatever it is that you do, then you can say, "We should have a bias to impact, not a bias to action. We shouldn't just do stuff, we should have an effect that has the result of value creation. We should save people time." And now when you're a product team, looking at this, and you're saying, "Well, here's a cool new idea, Lenny, let's do this." You can now use that as a habitat level permission to be like, "Oh, how does that produce value for people? How does that make people go faster, save time, get smarter, do something they couldn't do otherwise?" And then you can still use that exact same vocabulary when you go sell it to them, "This is how it makes you faster, smarter, more efficient, save cost."

**Evan LaPointe** (01:42:50):
So it's like really logical deduction. And if people think that we should do something, build a product that doesn't create value. Now instead of being inspiring, we can be logical. We don't build things that produce no value, that is not a priority until we can turn it into something that does produce value. So you're turning culture into something highly usable, in getting away from performative culture into logical deductive culture. And I think that's really, really the key for most people is to say, "Let's understand why the world's glad we exist." That's why we have a team, that's why we have customers. And what does that imply about our standards for ourselves when we execute in value creation? Even down to the email. If I send some wonky email reply to somebody's question and it doesn't produce value for them, I'm not done. I need to finish the job until it produces value for them.

**Evan LaPointe** (01:43:43):
Quality standards are baked into this, that again is implied. Would I be happy that Warby Parker exists, if they shipped me something that's a two out of 10 in quality? No. So we can't make things that are two out of 10. And everybody has a belief. There are plenty of people that probably interview at Warby Parker that think, two out of 10 is perfectly fine, just get it to them. And no, we need an antibody to that belief. We have decision-making intelligence, which everybody believes we should go fast, break stuff, or we should be super slow, and get everything right and wherever in between. That's a fun one to talk about. And then finally, you have a teaming dynamic belief, which is essentially every single human's belief of what is acceptable treatment of other human beings. What state does that put the other human in?

**Evan LaPointe** (01:44:35):
And a lot of people, particularly like I'll pick on myself with the low politeness, will spend years thinking, "I'm giving honest feedback quickly. This is efficient." And you're like, "How is it efficient when it takes people six months instead of six minutes to act on your feedback because they just don't like you so much, and you have this appeal problem that keeps you out of all the rooms?" Actually your utility, which, your politeness is a utility transferred mechanism, but we don't want you in the room. So you're not a business benefit in this case. So that's kind of the starting point. That's ground zero of habitat is do not build an habitat on the roots of inspiration. It doesn't work. It can work, right? If you do it super inspiring stuff and you're super inspiring people, then you probably have the artistic ability to pull that off. But even then, you'd still be better off if you would do it through logical deduction instead of inspiration.

**Lenny Rachitsky** (01:45:36):
Say someone is like, "Okay, I'm going to improve my habitat, I'm going to improve my company culture. Or I'm just going to start setting up a good habitat." What's something they can do? What can they do today, this week, to just start to do that? Is it, sit down and think about what is the value we provide? Why do we exist? Is there something else you'd recommend?

**Evan LaPointe** (01:45:54):
So the brain craves an answer to the question, why am I doing this? And not only are there things we should start doing, but I like to deepen the commitment in people's minds to what we should start doing, by thinking of it as, we should start doing things that we've been negligent in doing, right? Not just, oh, this would be even better, but we are actually causing some habitat problems by being negligent in certain things. So the primary thing that people are negligent in is answering the question, why should I do this, to their team. And saying, you should do this because it's your job is a form of negligence, right? You're not actually answering that question in any useful way. Because I could also answer that in the safety way, which I sort of just did by saying, it's your job. I'm implying that there's a consequence. But I could be like, because if you don't, here's the specific bad things that will happen.

**Evan LaPointe** (01:46:52):
You could be giving them a why in terms of reward, because, oh, if you do this, you get this, or if we do this, we get this. But you could also be giving them a purposeful answer to why, which is not a form of negligence, which is to say, because our work actually matters. There are people out there waiting on us to ship this product to improve their situation, and they also want us to get it right at the same time. So bias to impact through that lens. We do need to ship this. It needs to happen, and it needs to be right, or at least right enough in its first version.

**Evan LaPointe** (01:47:28):
So if you have been negligent, and we all have at times, right? I'm not trying to judge, but I'm trying to convict, right? To build some conviction, to build some commitment. If you have been negligent in answering to all these minds that work with you, why we're even doing this. That's the starting point, is make sure everybody knows why. And that why is a shared why across the team. And not just the Simon Sinek big picture why? I mean, very specific why. That for my team, when we build training materials, when we look at it through that lens of, if we get this right, this is what happens to teams, and companies, and products and their customers.

**Evan LaPointe** (01:48:12):
There's a through line at the big deal and that's why we can't do it this way, or that's why we should get more obsessed with quality, and why we should get more interdependent as a team and stop doing things that are just our own ideas. But say, "Hey Lenny, I'm thinking about doing it this way. Is there anything you'd add before I hit go?" And then you'd be like, "Oh, I think it would be 10% better if you did it this way." And then now our product is 10% better. So that's kind of the square one is ask yourself, when's the last time our team had a conversation about why we're even doing any of this? What value it produces? Who is affected by our decisions? And if that hasn't happened in a while, that's not good.

**Lenny Rachitsky** (01:48:57):
Is another way to think about this, your mission, is that a term?

**Evan LaPointe** (01:49:02):
Yeah, I think it's an alternative to mission, I try... And I don't want to stomp all over mission, vision, values because I think they can work. But I think it's easier for people to conceptualize the importance of their work, if they understand, we are playing a role, not fulfilling a mission. And role implies obligation. There's no obligation in mission, unless you feel the inspiration so powerfully. And these differences are subtle, but neurologically, it's different. If I tell your brain, "Here are the people counting on you to get this right, Lenny." Your brain activates a region called the anterior insular cortex, which starts to think about other people in the context of the solution you're creating.

**Evan LaPointe** (01:49:45):
And if I say, "We are here to change people's lives through this," in a more general sense, your prefrontal cortex will still activate to solve the problem, but your anterior insular cortex will not, to more deeply consider the humans affected by the problem. So you're kind of adding to the toolkit of what the brain will bring to the table to generate solutions. And if you activate more good regions of the brain, you get better solutions. So I lean into this. Personally, I'm like, "You really don't need a mission statement. You need to understand the role you play, and people need to have some response, some physiological, like, 'I get it, to my actions impact people.'" And if they don't have a response, you should go find a human who does, for sure.

**Lenny Rachitsky** (01:50:35):
One last thread I want to follow, focus. You have some really cool advice on how to help. And this just comes from everybody wants to get better focus. Everyone wants their team to have more time for focus. Everyone wants their engineers to sit there and build things faster, their designers to get stuff done. And it all comes from getting really good at focus and creating space for focus on your team. What advice do you have for folks that want to personally learn to focus better, and to help their team have more time for focus, get stuff done essentially?

**Evan LaPointe** (01:51:10):
I mean, isn't this the question? Because this is where it all ends, right? First things first, let's look at the neuroscience that we have available to us. Which is, the study of focus either is or is tightly associated with the study of what's called brain waves. That's becoming a lot more popular. We're seeing it even in athletes, like professional golfers, or studying how their brain waves are focused on the golf shot and which mode to put the brain into to play golf at the highest level. Same thing applies to work. There's a bunch of different kind of bands of brain waves. Most of them actually are when you're asleep. So your REM cycles, your deep sleep cycles, your kind of drowsy cycles, those are brain waves. You can feel your brain turning off, you can feel your brain turning on when you dream. But when you're awake, there's really three primary modes that your brain is in.

**Evan LaPointe** (01:52:03):
The nerdy side of this, kind of the nerdy language is alpha, beta and gamma. Those are the distinct ranges of brain activity, and they basically represent how focused your brain is. So alpha is quite simply daydreaming. So your brain is very quiet and empty. Easy metaphor is if you're in your house at night and everything's quiet, you hear things that you don't hear during the daytime, and that's what alpha is like in the brain. Your brain is actually working subconsciously a lot. But when you're busy, which is beta, your brain is too noisy to hear any of those little creaks and pops in the house. But when you're in alpha, you hear stuff.

**Evan LaPointe** (01:52:41):
So the most common setting for alpha for most people is the shower. So it unlocks this mystery of like, why do I have all these ideas in the shower? Well, it's because your brain is in alpha. It hears these little creaks and pops inside of the attic, and it unpacks them. He goes, "Oh, that's an interesting idea," it comes out of nowhere. It can be driving, gardening, car washing, cycling, whatever. As long as there's not too much cognitive load, then you can be daydreaming. And I'll come back to this in a second because there's a big permission problem at the habitat level for some of these focus levels.

**Evan LaPointe** (01:53:14):
Beta is productivity mode. So if you've ever seen somebody with a poster on their back wall that says, "Get shit done," that's basically just a poster that says beta on it. I love beta. And answer emails, have meetings, write code. And there are some gamma code, deeper thinking scenarios where you're writing code, delivering presentations, making presentations. So much of our workday is beta, and it's just... I mean, some of us have an infinite amount of demand for beta work. There's just a never ending stream of stuff we could do and get done.

**Evan LaPointe** (01:53:55):
And then gamma is your brain's intense focus. So if you're learning something really complicated, you're learning thermodynamics in college or something like that, and you're just like, "Wow, this is not easy." And you have to really push your brain to grapple with these concepts, connect the dots, even remember certain things, that's gamma. And we feel that sometimes at work, that here's a problem, a complex issue that we could tackle in beta by slapping duct tape on it, or we could tackle in gamma by reverse engineering, and going deep. And that's where we start to connect the dots that we talked about earlier, that focus and reverse engineering are related. That in beta, you have no intention to learn anything new to get something done, to think more deeply to get something done, to reconsider an existing process, or structure, or framework in your mind to get something done, you're going to utilize those things to get something done.

**Evan LaPointe** (01:54:52):
Gamma is where we go, "I would normally do it this way. I can see why that's not the right way. I need to make something new. I need to break my framework and build a brand new one right now to do something." So we generally spend too much time in beta in work, and that's both a judgment call, because I certainly have my own opinion about beta. I call it the conscientiousness crisis, which is conscientiousness wants beta, openness wants gamma. I'm kind of thinking of tying these pieces together. And it's not that conscientiousness is inherently a crisis, but when you meet teams that haven't done any innovation, haven't rethought the market, have become insensitive to changes in the environment around them, have become insensitive to their own employee problems and are still just kind of like this locomotive that keeps on going, irrespective of what's going on around it. It's that heads-down form of conscientious beta, that feels like, "Now's not the time, let's stay focused, let's stay focused," et cetera.

**Evan LaPointe** (01:55:53):
So we don't want to get rid of beta, we got a lot of work to do. But let's put a rule of thumb out there for people to explore, because it's going to be subjective to every team and every company. But as a rule of thumb, if 25% of your year is spent in gamma and alpha, you're probably a lot better off than the teams who spend less than 25% of their year thinking deep, and being in this more daydreaming mode. So what I wanted to circle back on is, how could we possibly daydream productively? Well, that's preposterous. And this is where you can build in your mind... And I do have another PDF for this, if people want to see it.

**Evan LaPointe** (01:56:32):
But you can build in your mind a 3 x 3 grid where we have the safety system, reward, and purpose system in columns. We have alpha, beta and gamma in rows, and we basically have a list of nine channels that the brain can activate to generate different types of thinking. And most of the companies out there, most of the teams out there, are primarily, all their programming comes from safety beta and reward beta. How can I be busy to get rewards, ROI, customers, deals, whatever? Even promotions, more self-centered kind of rewards? And beta safety, which would be, how can I be busy? Optics, manage my reputation, avoid risk, that sort of stuff?

**Evan LaPointe** (01:57:19):
The crisis is basically realizing, spending too much time in those two out of our nine available boxes, is probably not generating anywhere near the ideal outcomes. And if we could instead shift to the purposeful column by answering that brain's craving for why, with an answer that explains, it's not about you, it's not about us, it's about other people are counting on us to get this stuff right, does that matter to you? Because for most people, they're like, "Yeah, that's actually really cool. I can have an impact on real stuff happening in other people's lives and in the world outside of me?" So that that activates, now all of a sudden we can say, okay, let's look at alpha across the top row.

**Evan LaPointe** (01:58:06):
Alpha safety is when you get in the shower, and all of your anxieties, worries, et cetera, come out of nowhere, out of the attic of your mind. What happens in alpha reward? It's when you have these breakthroughs of how to get a deal, how to win something. It's daydreaming, but your brain is primed to daydream in a certain way, whether it's about anxiety or anger, or whether it's about rewards you care about. If it's purpose, this is where from a vision perspective, a possibilities product perspective, you're going to have all sorts of crazy cool ideas pop into your mind if you've primed your brain to being purposeful and then you daydream.

**Evan LaPointe** (01:58:44):
And you can do this in the middle of a day. Certain companies, it's easier than others. But if you can push away from your desk, and just go sit in a park or something for 10 minutes, 20 minutes and calm your brain down, listen, something cool will probably happen in your brain. I can't guarantee that, but you have to experiment with it to find out how it works for you. And then the same thing for gamma, when you hear phrases like, "We can't talk about this for the rest of our lives," that is the gamma prevention team kicking the door down and saying, "We're here to get you back into beta. Everybody, put your hands behind your backs," sort of a thing.

**Evan LaPointe** (01:59:22):
And that's where the habitat and the focus kind of matters because you will not ever get a gamma idea from a beta mind. You will never get an alpha idea from a beta mind. So if your business needs some breakthrough, daydreaming, interesting ideas in order to create adjacencies to build new products, to seek new markets, to better fulfill the role you're playing within this market, then team has to have permission to enter that intellectual focused state, or that you're turning that channel off. You're taking that off of the programming available through your particular subscription.

**Evan LaPointe** (02:00:04):
And the same thing applies to gamma. The habitat basically needs to establish that gamma is a viable channel for a lot of work, and there's permission to go into it. You can certainly overdo it. That's why I say 25%, you don't need to spend half of your year, three-quarters of your year in gamma. It bonkers how smart you can be if you spend three or four hours in an afternoon in that deep-focused state, you'll just do stuff you'd never do. And if you can get the team to have off-sites that are gamma-focused, everybody's scatter and be alone, and do this stuff that are gamma and alpha-focused, that are productive and you bring ideas back. You're just simply going to generate thinking and outcomes that you wouldn't otherwise. And it may be that 10 percent's right for you. It may be that 30 percent's right for you, depending on how dynamic your market and customer base are. But just to challenge yourself with the question.

**Lenny Rachitsky** (02:00:58):
This stuff is so fascinating, I wish we had another hour just to dig deep into this. Because it feels like just this alone is going to really transform the way companies operate. So let's try to give people something tactical they can do to create more space for alpha and gamma waves. And essentially your advice is, a fourth of your time should be spent, if possible, in alpha and gamma time. Is that right?

**Evan LaPointe** (02:01:22):
Yeah, I think that probably is overabundance, in all honesty. But if you think about it through the lens of a quarter, if you're going to be on a set of cadences, and this is probably the tactical advice. It's like, look at your cadences and say, at the quarter level, that's probably the right level of fidelity for most people to look at their calendars in terms of what big stuff should we be doing? Because six months is usually too long to do anything big. Too much has happened in the world. Year is definitely too long to wait for a cadence to kind of kick in. So quarterly is really good. And what's nice is when we cluster our gamma time on this quarterly cadence, we can take a lot of the stuff that would be what we call calendar invaders, these random conversations that come up out of nowhere. And we can be like, "Well, we're getting ready to have an offsite, this quarter's offsite in two weeks. Can this idea wait until then to be processed?"

**Evan LaPointe** (02:02:16):
So you kind of get this nice little black hole effect, where a lot of distractions have a new home, because you've actually said, "We're going to distinctly do stuff." You're saying, "Yes, but not now," to a lot of distractions. But yeah, I think that's the ideal cadence. And that, for some teams, it needs to be maybe a half a day or a full day. You'll figure it out based on your own business. But what per quarter is a necessary amount of time for us to break beta and go into deep thinking analysis mode? How healthy is our operation? How smart are we being? Are we delivering value? What needs to be reevaluated from the market's experience, the customer's experience, the team's experience? Let's look at these different views of the business, and make some prioritized decisions about, we're going to make specific improvements this quarter for these areas.

**Evan LaPointe** (02:03:10):
And then even once a week, maybe just find half a day if you can, maybe, but maybe less than half a day, couple hours to be in gamma, once a week. And you'll kind of feel it out from there. But the reason the rule of thumb of 25 is out there is 25 is kind of the risk point. Because most people will be like, "We're not even spending 5%." Or the perfectionist team might be like, "We're 50." So if you're far away from that rule of thumb, that's a pretty good indicator it's a good time to audit yourself.

**Lenny Rachitsky** (02:03:42):
When you hear the term, deep work, is that generally referring to gamma time?

**Evan LaPointe** (02:03:47):
Yeah, people can use that term in a couple of ways. I think a lot of people call deep work, don't bother me beta, which could be one. And other teams might call gamma deep work, but that's probably more appropriate. I think, don't bother me beta is for some teams, they need to be told, "No, no, use this time not just to not be interrupted, but to think differently about problems. To think about is the architecture even right? Is the way we are thinking about this even right?" Not just get a lot of stuff done.

**Lenny Rachitsky** (02:04:18):
Yeah. So it's not just sitting in your email and write documents, it's actually try to think about bigger problems, things that are challenging your brain, not just like, "I'm just productive getting stuff done, getting stuff done." Awesome. Something that worked really well for me, similar to what you just recommended is having, I had two blocks of time during the week that were two hours or three hours long, where it's just, "Don't bother me, deep work time." So I had it I think Wednesday morning and Friday morning for two or three hours. And actually in the calendars, if you book something during this time, I'll slap you. And that worked really well. And nobody complained.

**Lenny Rachitsky** (02:04:54):
We covered a lot. Here's the things we've covered. I was just taking notes and all the advice that you've shared, how to help people run better meetings, how to get better at developing vision for their team, and company, and product, how to be a better influencer. How to build better relationships, how to create a better culture for your company, how to create more focus and more productive focus. That's a lot. I'm very proud of our conversation. Before we get to a very short lightning round, because we've gone pretty long, I want to keep it short.

**Evan LaPointe** (02:05:22):
Sure.

**Lenny Rachitsky** (02:05:22):
Is there anything else you want to share, leave listeners with that you think might be helpful before we close-

**Evan LaPointe** (02:05:28):
No, I don't think we need... I mean, there's certainly a lot more that we could talk about, but I think we don't want to melt any minds. So we want people to kind of walk away and be like, "I can do that, I can do that, I can do that." So definitely pick two or three wins. I kind of call them pots of ocean to boil instead of oceans to boil. So get a few pots of ocean to boil first, and focus on that for sure. And definitely make one of those pots, if it's a problem area for you, what kind of experience you are. I mean, that's central to everything. Everything else works better in the whole system once you've boiled that pot of the ocean, and then things get easier.

**Evan LaPointe** (02:06:05):
And then I guess the only last thing I would add is, think of everything we've talked today. It might help to put some language to it as floor risers and ceiling risers. Because your company has a horizon of performance that you're heading into, and there's a bottom end of that range and a top end of that range. So as you get better at meetings, not only are you increasing... You're raising the floor to get rid of bad meetings and waste, and you might be saving a ton of time or converting useless time into useful time, but you also might be raising the ceiling.

**Evan LaPointe** (02:06:35):
And I would be really specific with yourself and your team about, which outcome are you chasing? Is it both? Is it one or the other? And say, we're actually trying to raise the floor so that our performance never goes below a certain range. We get faster, smarter as a result, fewer mistakes. Or are we actually trying to uncap a ceiling that we're dealing with right now, especially around things like strategy and vision? If we feel that those conversations always end up feeling like inconceivable arguments, we have a ceiling on our business's performance. As a result of that, can we raise that ceiling and explore a higher horizon of performance for the business?

**Lenny Rachitsky** (02:07:12):
Amazing. Evan, with that, we've reached our very exciting and very quick lightning round. Are you ready?

**Evan LaPointe** (02:07:18):
Yes, let's do it.

**Lenny Rachitsky** (02:07:20):
All right, so let's start with what are two or three books that you've recommended most to other people?

**Evan LaPointe** (02:07:26):
Well, the obvious first one is Never Split the Difference. I recommend that book to everybody in the universe. I think if you haven't read it yet, you shouldn't get your driver's license. For those who don't know, it was written by Chris Voss, he was an FBI hostage negotiator. And it explores how to negotiate with people, and not just hostages, but your colleagues, your parents, your wife, like everybody. And there's some very surprising technique in there that is unexpected, not trying to get people to agree with you, but getting them to say no, more often. Instead of saying, "Hey, Lenny, are you willing to do this?" Say, "Hey, Lenny, are you opposed to doing this?" And it's just this reversal. And "I'm giving you the out," is the way he explains it. There's a whole bunch of other technique, but the more of that technique is in a team, the better. The better the team does. That's a no-brainer.

**Evan LaPointe** (02:08:16):
The second one I would say, since we've kind of covered this topic a little bit about habitat today. If you enjoy reading books that are sort of root canals, but you're better off because you read them, there's a book called Never... not Never Split the Difference, there's a book called The Person and the Situation. It was written by some researchers, some psychological researchers. And what it explores is the difference between how personality influences your behavior, and how the situation you're in, or like we talked about, the habitat you're in, influences your behavior. And if you're not yet convinced that either of those matters, like, "Oh, it doesn't. I'll do what I do regardless of the habitat, or I'll do what I do regardless of who I am," that book will melt the face off of that existing mental model conclusively. It's really valuable knowledge to understand the mechanics of how the situation influences a person, and how the personality influences the person.

**Evan LaPointe** (02:09:12):
And then I guess the last, maybe we'll put a fork in the road of a choose your own adventure. If you're a real student of the game, and you want go 10,000 leagues under the sea on this stuff, there's a series of books called the Cambridge Fundamentals of Neuroscience. You can find it on Amazon. A lot of them, you can just get on your Kindle for a lot cheaper than the library-decorating version of it, but that is bonkers. It talks about how your brain applies to intelligence, emotionality, relationships. It's incredible knowledge. If you instead want to keep it more in the part of the world you experience and can see and not the brain. Thaler wrote a book called Misbehaving. It was kind of the major book about behavioral economics.

**Evan LaPointe** (02:09:58):
And again, we spend a lot of time in companies talking about the way people should act, instead of the way people do act. And behavioral economics is essentially the version of economics that's about how people do act, not how people should act. So I think that's a great field of study. And then again, Robert Greene's whole library is super valuable, especially Human Nature, if you're into that. He's a little darker of an author, certainly kind of doesn't pull punches about human nature. So those are all great books to explore.

**Lenny Rachitsky** (02:10:28):
Do you have a favorite product you recently discovered that you really love?

**Evan LaPointe** (02:10:31):
I look more at the category level of products. I really like products that have great ergonomics. A lot of people underestimate the value of what it feels like to use the product. Are things in the right place at the right time? I just started this newsletter that's kind of like, how do you break all of what we do in a bite-sized pieces for people who are super interested in this stuff to get something weekly? And it exposed me to Beehiiv, which is a very well-designed newsletter platform, high ergonomics. I don't ever find anything hard to find. I can get things to work the way I want them to work.

**Evan LaPointe** (02:11:07):
So just, I like that example. And I remember even back to when I was obsessed with finding the perfect backpack to travel with, and then you find these brands where you're going through security, and you didn't even know it, but there's a pocket designed for your phone in exactly the place you would want the pocket for your phone to be. And you're just like, "That's so great. I love that this team designed this pocket just in the right spot." So that's really my focus is ergonomics in product.

**Lenny Rachitsky** (02:11:32):
Final question. I saw you tweeted that people are telling you that you look like JD Vance, which is hilarious. Do you think this will be a net benefit or a net hurdle?

**Evan LaPointe** (02:11:42):
It'll be an incredible benefit to Halloween, because it's totally clear what I'm going to do for Halloween. Yeah, I mean, I guess I'm going to have to see what people in the street... Fortunately I live in Park City, so I don't run across a lot of people in the street who want to yell at people. But if I lived in Chicago or something like that, I would've no doubt somebody would come up and throw something at me. But yeah, I'm neutral on the topic so far, minus the Halloween bonus.

**Lenny Rachitsky** (02:12:09):
We'll see. We'll see how your life changes. Evan, this has been amazing. There's so much richness to this conversation. And like I said, we've covered basically everything people want to get better at as product manager, you could say. Two final questions. Where can folks find the stuff that you do to dig deeper, to learn more, to learn more deeply from you? And two, how can listeners be useful to you?

**Evan LaPointe** (02:12:31):
Yeah, I mean, they can certainly find a lot of the stuff we do on our website, core-sciences.com. Find a link to that profile you talked about on there, which can be super fun to take and insightful. The newsletter, all the stuff that we do, you can kind of find out there. And then certainly Twitter. I mean, I've always been really prickly about people that get on Twitter to post only and not to interact. I'm kind of the opposite. I really love people's questions and pushback. And just yesterday, I probably spent way longer than I should have out of my portfolio management approach to time, just on a thread where I was talking to this really interesting woman about this debate almost, about the probability of people doing things based on their beliefs, which was... And then we had some kind of bystanders watching the whole thing happen, and I had a meeting with a good friend Rod afterwards, where we talked about how that all went.

**Evan LaPointe** (02:13:28):
So I love to talk to people and answer questions, and I'm sure people will have plenty of questions that they'd love to dive deeper into. So I'm on Twitter for sure. And then how you can help me. I mean, fortunately for me, I'm in the business of helping other people, whether those are individuals, teams, companies. So the most helpful thing to me is you helping yourself. So if you find our content valuable, if you want to have awesome managers or anything like that in this sort of science-based, kind of more efficient approach to getting there would be interesting, then reach out. We don't bite. We're pretty easy to work with. And that would be super fun to have a conversation about what your team needs.

**Lenny Rachitsky** (02:14:08):
Evan, thank you so much for being here.

**Evan LaPointe** (02:14:10):
Thanks for having me. This has been really cool. Yeah.

**Lenny Rachitsky** (02:14:12):
Same for me. 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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## [9/16] Unorthodox PM wisdom: Automating user insights, unselling job candidates, logging every decision, more | Kevin Yien (Stripe, Square, Mutiny)

**Kevin Yien** (00:00:00):
The PM job can become a little too internal, influencing my stakeholders and getting alignment and all these things. But if you can't sell or support your own product, I don't trust you to build the product.

**Lenny Rachitsky** (00:00:10):
You think every PM should keep a decision log?

**Kevin Yien** (00:00:13):
We all talk about product sense. To me, it's just a fancy way of saying you can make good decisions with insufficient data. PMs need as many reps as possible in making decisions, documenting the rationale behind those decisions, and then crucially seeing the outcome of them.

**Lenny Rachitsky** (00:00:28):
We have a lot of interesting approaches to hiring, including this idea of a unsell email.

**Kevin Yien** (00:00:31):
When you get to offer stage, I send an email and I say all the terrible things that are probably going to reinforce their fears. If you can tell them that upfront and they can read that whole email and still be equally excited to join you, find yourself a A+ hire.

**Lenny Rachitsky** (00:00:45):
I'm curious if you found any interesting uses of AI in your work.

**Kevin Yien** (00:00:49):
We are not even beneath the dust on the surface when it comes to what's going to change.

**Lenny Rachitsky** (00:01:00):
Today, my guest is Kevin Yien. Kevin leads product for merchant experiences at Stripe. Before that, he built the restaurant business and the ecosystem teams at Square, and most recently was head of product and design at Mutiny. He also makes ice cream and, as you'll hear in there conversation, was a pretty competitive eater for some part of his life.

**Lenny Rachitsky** (00:01:17):
In our conversation, Kevin shares a ton of unique and insightful perspectives on how to be a successful product manager, including how to get into product management, how to improve your relationship with your engineers and designers, bunch of advice on hiring, why you should keep a decision log, how to automate your customer research, plus a ton of really powerful stories around failure and AI and career.

**Kevin Yien** (00:02:04):
Thanks, Lenny. I am humbled to be here.

**Lenny Rachitsky** (00:02:05):
I've been a big fan of yours from afar. I've been following you on Twitter for a long time. You have a very distinct profile photo that I feel like you maybe haven't changed for a long time. How long have you had this profile?

**Kevin Yien** (00:02:16):
Oh gosh, probably 2011 or 2012. The story behind that is I was inspired actually by Chris Dixon's avatar at the time and I wanted something really similar to it, but I couldn't figure out how to. Luckily, I was dating a designer at the time, and so she made me that sort of custom pick that has been my profile since then, and she's now my wife.

**Lenny Rachitsky** (00:02:40):
Oh my god. Funny enough, I had a startup idea once where it's like a profile picture as a service business where there's these three tiers where it's like one has automated, one has someone illustrates, and one is a professional photo. It feels like everyone profile photos are so important.

**Kevin Yien** (00:02:54):
True.

**Lenny Rachitsky** (00:02:55):
But I never follow through. Probably not a good business anyway.

**Kevin Yien** (00:02:59):
Yeah, but a good idea, a good tool.

**Lenny Rachitsky** (00:03:00):
Good idea. Thank you. Thank you for making me feel better.

**Lenny Rachitsky** (00:03:03):
I've been looking forward to this conversation for a long time. As I said, I've been a big fan of yours for a long time. Something that I've noticed about you is you have a lot of really unique perspectives on a lot of different things, and in particular, product management, how to be successful as a PM, how to get into product management, things like that. So I thought it'd be fun to start there talking through some of these things that I've heard you talk about and then get into some very tactical stuff that you found to be useful in your product management career.

**Lenny Rachitsky** (00:03:29):
The first thing that I've heard you talk about is that you discourage people from going straight into product management. If they want to become product managers, you encourage them to start somewhere else first. Why is that? Where do you think people should start? Talk about this insight that you've had.

**Kevin Yien** (00:03:45):
Yeah, so follow me on the detour to science world temporarily. If we all remember high school science classes, there was this concept of potential and kinetic energy. There's so many different definitions for product management, but the one that I have come to myself that I really like is, when you are building a product, you have this team, engineers, designers, so much potential. The purpose of product management, not the person, but the practice, is to convert that potential into as much realized value for someone as possible, right? Minimum loss. When you're just getting started with a new product, the people that should be doing that are the people who are building it. That's an engineer, that's a designer, that's a sales person or a support person. They're the front line of the smallest loop possible to get something going, and it's through those practices that I think you're able to get the most exposure to what it takes to build a good product.

**Kevin Yien** (00:04:50):
And then from there, that's your foundation. That's the unique perspective that you bring and allows you then to actually take on a "role" of product manager in a good, unique, insightful way. That's sort of like the foundation. There's a lot more to unpack behind that comparison, but that's where it comes from.

**Lenny Rachitsky** (00:05:06):
I love that. I'd love to unpack it further.

**Christina** (00:06:30):
Yes, thank you for having me on, Lenny.

**Lenny Rachitsky** (00:06:32):
What is the latest with OneSchema? I know you now work with some of my favorite companies like Ramp, Vanta, Scale, and Watershed. I heard that you just launched a new product to help product teams import CSVs from especially tricky systems like ERPs.

**Christina** (00:06:47):
Yes, so we just launched OneSchema FileFeeds, which allows you to build an integration with any system in 15 minutes as long as you can export a CSV to an SFTP folder. We see our customers all the time getting stuck with hacks and workarounds. And the product teams that we work with don't have to turn down prospects because their systems are too hard to integrate with. We allow our customers to offer thousands of integrations without involving their engineering team at all.

**Lenny Rachitsky** (00:07:09):
I can tell you that if my team had to build integrations like this, how nice would it be to be able to take this off my roadmap and instead use something like OneSchema and not just to build it but also to maintain it forever.

**Christina** (00:07:21):
Absolutely, Lenny. We've heard so many four stories of multi-day outages from even just a handful of bad records. We have laser-focused on integration reliability to help teams end all of those distractions that come up with integrations. We have a built-in validation layer that stops any bad data from entering your system, and OneSchema will notify your team immediately of any data that looks incorrect.

**Lenny Rachitsky** (00:07:40):
I know that importing incorrect data can cause all kinds of pain for your customers and quickly lose their trust. Christina, thank you for joining us. If you want to learn more, head on over to oneschema.co. That's oneschema.co.

**Lenny Rachitsky** (00:07:54):
Every PM has their definition of what is product management, and I have one that I'm trying to find exactly what I wrote, but essentially, it's to marshal the resources of your team to solve customer problems and drive business impact most efficiently, something like that. And I feel like it's very aligned with your perspective, but I really love this view of it's unlocking the potential energy of the team. Not just marshaling the resources of a team, but it's there, and your job is to maximize their effort. And this is why when people say, "I hate product managers. I don't want any product managers at my team. We don't need product managers here," I feel like that's often because you've had a bad PM. Good PMs make you better and make your life better, allow you to do the work you want to do and they take all the stuff you don't want to do, make sure the stuff you're doing is worthwhile.

**Lenny Rachitsky** (00:08:38):
Is there anything more you want to add along those lines?

**Kevin Yien** (00:08:41):
To elaborate on that, I think the broader point is that truly not every team needs a product manager, but the activities, the outcome that one would drive needs to get done no matter what. And in some cases, this is why the prototypical companies that everyone references when they say, "They never had product managers, look at how successful they are," they're all building for themselves. Stripe, Twilio, Figma, designers for designers, engineers for engineers. When you are the customer, why the heck do you need someone else to help do the things that let you make decisions on what to build? But if you are not the customer, if you're working in a particularly complex space, if there's something that you, as the person that could build the product, feel you don't have, that's when you can essentially delegate that responsibility to someone else to say, "Hey, let me do the things I'm really good at and you do something that I need to get my job done."

So it's that sort of relationship that I think is often missing in the discourse. I think it would alleviate a lot of the, "We don't want PMs. PM is useless" or, "PM's one of the best thing since [inaudible 00:09:52]," which they're not. It's just a manifestation of that problem.

**Lenny Rachitsky** (00:09:55):
Yeah. Just to build on that, we're going on a tangent, but I think that's really interesting. I think there's another element of that, SNAP actually is another example where they waited, I think, until they had 200 people before they hired their first PM. To me, that's an example of other people were doing the PM job. As you said, there's PM activity, someone's doing them, lining people, prioritizing, making sure things are clear, making sure people aren't surprised, all these things PMs do. Someone's doing that, and my feeling is like, "Okay, your designers may love doing that, great. Let them do it." If your engineers that have a lot of product sense may want to do that, great.

**Lenny Rachitsky** (00:10:28):
But there's some point they either is like, "Forget it. I just want to code. I want to build that. I want to be sitting around in meetings all day," or they just aren't as good as things are scaling. And so it's kind of like, if your engineers, designers want to do it and are good at it, great. You don't need PMs for a long time. Oftentimes they're not good at it or they don't want to be sitting in doing all these PM things.

**Kevin Yien** (00:10:46):
Yep, precisely.

**Lenny Rachitsky** (00:10:48):
Okay, so going back to the question of... So your advice is don't go straight into product management if you want to become a great PM. Where do you think people should start if they can? What are some options you recommend?

**Kevin Yien** (00:10:58):
The best way to think about this, in my opinion, is who were the people that you would be taking the PM responsibilities from and then do those jobs? And so for me, the sort of foundational three are going to be engineer, designer or salesperson. I think sales also gets not a bad rep, but a misrepresented reputation in tech where all they care about is quota, it's just about numbers, et cetera. In reality, the best salespeople are the best listeners, the best people at understanding the problem that the customer is having and then translating that into what you can do for them. And so if you get really good at having those calls, getting told no a lot, and being able to translate that, I mean, why would you not want to start there and then eventually move into something like product? So that's the foundational three for me.

**Lenny Rachitsky** (00:11:56):
So your advice is essentially if you want to be a PM, start as a designer or an engineer or a salesperson. I was an engineer, so this is exactly the path I went on. And I think there's an element of you start there and then you realize you're never going to be as amazing as the other people at that role and you're like, "Okay, maybe I should explore this other thing," because I was like, "I'm never going to be an amazing engineer. I'm good enough."

**Kevin Yien** (00:12:18):
Totally.

**Lenny Rachitsky** (00:12:18):
I'm like, "I'm pretty good at this other stuff. Let's explore that."

**Kevin Yien** (00:12:21):
The one thing that I might tack on there, because this could lead to a negative perception, is, "Well, I'm never going to be a world-class engineer, world-class designer or et cetera, and so let me settle for being a PM." That could be the conclusion you arrive at, but I think a better way of framing it is, "I'm okay at those things. I'm potentially world-class at this other thing. Let me see what it feels like to double down on this area."

**Lenny Rachitsky** (00:12:44):
Absolutely.

**Kevin Yien** (00:12:45):
And I think that's just a good framing.

**Lenny Rachitsky** (00:12:47):
Okay, so let's talk about another insight and piece of advice that you have, is that you think that great PMs need to be great writers. I think a lot of people don't necessarily think this. I think people may probably think, "If I'm an okay writer, I can probably be really successful PM." Talk about why you think it's so important to be a really great writer to be a really great PM.

**Kevin Yien** (00:13:07):
It's actually shocking for me to hear that this isn't commonplace sort of acceptance, but the place that this comes from for me is, writing is clarity at scale, and a key component to a PM's job is creating clarity both internally and externally, but it is both sides of that that I think often get lost. A lot of times the PM job can become a little too internal, and it's about influencing my stakeholders and getting alignment and all these things. Don't get me wrong, all that's very important. You should write your PRDs, they should be super crisp, they should articulate things really well, but I'm not saying that every PM needs to be a marketer or a world-class copywriter, but you should be able to write really compelling messaging in the voice of the person that you're trying to serve. And I'm working backwards from the beliefs that, if you can't sell or support your own product, I don't trust you to build the product. And so that's where I think writing is the foundational component there.

**Lenny Rachitsky** (00:14:11):
There's a few quotes I say often on this podcast just because they always come to mind. One is by Joan Didion who said that, "I don't know what I think until I've written it down." And that's what I find with writing where I need to actually write it down for me to really understand what the heck I'm thinking to really crystallize it.

**Kevin Yien** (00:14:26):
Yeah, and I think writing is, it's both a mechanism for translating what you're trying to think into that thought into what you're actually trying to do, but then it needs additional revs to be properly consumed by everyone else. And that's I think the really hard part that a lot of folks don't do the extra mile effort to take on.

**Lenny Rachitsky** (00:14:50):
And this to your earlier point of a job of PM is to unlock this potential energy of your team, of the various resources you have and obviously having everyone aligned behind a very, like, "This is what we are doing and everyone understanding it" and it being very clear is really powerful there.

**Lenny Rachitsky** (00:15:06):
Okay. So this begs the question, how does one become a great writer? What helped you become a better writer? How do you feel about your ability to write at this point?

**Kevin Yien** (00:15:13):
Oh man.

**Lenny Rachitsky** (00:15:14):
Any advise on becoming better?

**Kevin Yien** (00:15:16):
I'll start with a slightly cheeky comment, which is, I think some of this is changing with the advent of large language models and the ability to actually just mimic someone else's tone. But I take inspiration from the camp of Anthony Bourdain, and he has, I'm going to butcher the exact quote but it's something like, "If you want to know how to make good food, you have to eat a lot of food, and you have to be willing to have a bad meal every now and again." And so for me, good writing comes from consuming as much good writing as possible. Sometimes you'll read something and say, "That was actually absolute fresh." But that's okay, you have to be willing to take on some of that stuff. But the more you index towards developing your own taste for what you think is good by consuming others, then you can shift into producing your own and then comparing them and riffing it off other people. So I think that's sort of the cycle that I've gone through.

**Lenny Rachitsky** (00:16:13):
I have a friend who's a very good writer and a poet and helped me develop my writing early on, Vanessa, and she said exactly the same thing. Just to become a better writer, read beautiful writing, and it just kind of infuses you or your brain. In your experience, is there anything you read, anything you found really effective? Anything that you think influenced the way you write or think that people can check out?

**Kevin Yien** (00:16:36):
I explicitly do not mean read a bunch of other PM artifacts. You're not going to become a better writer by reading PRDs or whatever it is or support articles. It needs to be writing that compels. That's the theme I would go back to because that's what you're trying to do at the end of the day.

**Kevin Yien** (00:16:56):
And when I say compels, I mean it pushes you to action. Because if you read something and you're like, "Oh, that's interesting," that's not enough. You need to be able to give someone something that then allows them to do something differently. And so the things for me that have been best... Obviously there's all the Paul Graham essays, I think his writing is very succinct, very clear, that's not novel. I learned a lot by finding specific voices back in the day on Twitter, and it wasn't always what they were posting on Twitter, but if they wrote an essay or a post, that would be their crispus thinking. And so you can use these broadcast channels to find where their golden nuggets are, but then spend time with those instead and don't worry about all the additional noise that comes with it.

**Lenny Rachitsky** (00:17:46):
Paul Graham actually, you mentioned him, he has a great piece on how to become a good, that we'll link to, where basically his advice is, write the way you talk. Just keep it really simple and really regular. And so we'll link to that. Is there anything else along these lines of writing that you'd recommend for folks that are like, "Okay, I need to become a great writer. How do I do this?"?

**Kevin Yien** (00:18:02):
Actually along the lines of write how you talk, there's this concept of cadence that I think is really important when it comes to internal writing. There's probably some very good article about this, but it's the idea that if you only write in a monotonous cadence, either all really short sentences or all really long sentences, then your brain just tunes out eventually. And so you have to interrupt the pattern intentionally, and so you go short-long, long-short, whatever it is, but there's a few various specific things that you can do that allow someone to just roll through a post or something when you write that way.

**Lenny Rachitsky** (00:18:43):
Along those lines, there's a book that I just found to make sure I had the right title called Several Short Sentences About Writing that is really helpful along these lines. And the whole book is very short sentences and it teaches you to write very short sentences because once you're good at that, you can get better writing longer sentences. And so we'll link to that too. It's like a really good book that I have two copies around my house that I kind of poke at sometimes.

**Kevin Yien** (00:19:08):
Nice. I'll have [inaudible 00:19:09] too.

**Lenny Rachitsky** (00:19:10):
Okay. Another area that you have a really clever insight into is how the PM role fits with engineering design. We've talked about this a little bit, but you have a really clever way of just thinking about how these roles interact and who's responsible for what. Talk about that.

**Kevin Yien** (00:19:24):
So this description came from writing PRDs at Square. I think there was a lot of confusion from my team specifically when I joined them. For what it's worth, it was new product line, three engineers, three designers, there was nothing but a slide deck.

**Lenny Rachitsky** (00:19:41):
Three engineers and three designers?

**Kevin Yien** (00:19:43):
The best ratio ever. This is a whole other thing. Most people, I would say, under invest in design, point-blank. When you get to a certain scale, maybe things change, but truly I don't think most teams have experienced what it feels like to have a really high design ratio and what that actually does to the quality of the work and the quality of the thinking. So shout out to designers. We need more, is the short version. And I would rather hire an incremental designer than PM almost any day of the week.

**Lenny Rachitsky** (00:20:18):
Wow. I've never experienced this ratio. Incredible.

**Kevin Yien** (00:20:21):
Yes, I was very lucky. Shout out to Bruce Bell, who was my manager at the time, who was an ex designer, at the time, GM, and declared that starting ratio.

**Kevin Yien** (00:20:31):
So anyways, with that setup, they all had sort of an opinion. They had seen PRDs in the past, they weren't quite sure what the purpose of it actually was because they had designs already. They had something to start from. And when I came in and talked to everyone and figured out where we needed to be in a year's time, I was like, "Okay, here's how I think it. Let me know if you agree." And this is a whole other concept, which is, the best way to get feedback from people is not by asking what they think, but to put something concrete in front of them and then have them react to it, right? So chewing fork.

**Kevin Yien** (00:21:03):
And so my description is, PM should be doing everything in their power to draw the perimeter of the space, of the problem space. And it's within that, eng, design, everyone else that you're working with, they can go as crazy as they want, push up against the bounds and it's fill the box to its maximum capacity, but you've now applied the constraints that allow you to actually have productive conversations.

**Kevin Yien** (00:21:26):
On the other end of the spectrum though, I think there's a lot of folks who think, "Oh, PMs are just strategy high in the clouds. All they do is kick things off." You need to be obsessed about the final deliverable and whether or not value is actually getting to the customer. I have a really trite example of this if you want to go down it.

**Lenny Rachitsky** (00:21:46):
Please.

**Kevin Yien** (00:21:46):
But the key point I want to make is, I think it is tempting when we think about engineering product and design to draw these really clear swim lanes and say, "You do X. I do Y. Don't tread on my area." But you need these murky overlaps in order to build something really good.

**Kevin Yien** (00:22:07):
And so even if the engineers are going to build a better product than you and the designers are going to design something better than you, you need to come with a strong opinion and you need to do the legwork to get their trust so they actually care about your opinion in the first place.

**Kevin Yien** (00:22:21):
So time for a mini story. So Square, we're building a point of sale for restaurants. If you've ever seen one of these in a restaurant, there's this sort of grid of tiles that they tap to enter your order when you're sitting down for dinner. We were developing one, and there's this concept of a menu group. So it's a little box, you tap on it and then it pops the screen in so you go to the next level of the hierarchy. So example would be you have a wine button, you tap it, and you see your reds, whites, et cetera.

**Kevin Yien** (00:22:53):
If you think about the people that we were trying to serve, there's the restaurants that were coming from a really old legacy system. And if you've seen a bartender tap on one of these, I mean it is muscle memory to the max. They're not even looking at the thing and just punching in the order blindfolded, and it's rapid fast.

**Kevin Yien** (00:23:12):
On the other hand, you have people who are entering the workforce the first time, they've never used a point of sale. And so we have to serve both of these equally. Well, how do you deal with that level of speed but also the ease of use that anyone can learn it for the first time? And so there was this interaction that we really cared about, which was, when you tap on a menu group, what's the animation to pop you into that next level? This seems like such a small thing, but it made the difference in how easy it was to adopt for a lot of the restaurants.

**Kevin Yien** (00:23:41):
And so a designer and myself spent literally an entire week just fine-tuning how many milliseconds it would take to pop in and out so that it felt right. And we actually brought in servers and bartenders to play with the prototypes we had on iPads and be like, "Here's an order. Pop it in." And we would see where they would sort of flinch or hesitate because the animation was too slow and they thought, "I can't tap it yet," or something related to that.

**Kevin Yien** (00:24:07):
And so it's easy, I think, for a PM to say, "That's not my responsibility. I define the requirements. Have a menu group that goes to the next level, design or engineer, figure it out." No way. That's fully on you, and you better be involved in those details.

**Lenny Rachitsky** (00:24:24):
I love this. There's two directions I want to go. So there's the drawing the perimeter, and then there's this paying attention to the final deliverable and keeping the borrow really high, which I love and I totally agree with both.

**Lenny Rachitsky** (00:24:34):
In terms of this animation, people hearing this, that our PMs are going to be like, "How do you have time to spend a week on animation for one little product? I have so much to do. I get to hit some goals, drive some numbers. I have people waiting for me." Maybe because Square is like this, once you deploy, it's harder to change and it's like a big deal to ship. But I'm curious if you have any advice or things you've learned about how to create space for that sort of thing to create time to spend a week on this animation? Or was it just obvious to everyone, "We need to spend as much time as we can"? Top down, everyone knew.

**Kevin Yien** (00:25:07):
I definitely don't think it was obvious to everyone, and I can definitely say that because we were given a pretty strict deadline that we needed to launch by and I pushed it out three times. That's not because of this one animation, but it's because of a series of decisions where we said, "This is what we believe we need to ship, and this matters much more than hitting some artificial external GA date."

**Kevin Yien** (00:25:35):
There's this other aspect that I think PMs like to feel good about how busy they are and they're like, "I'm involved in so many processes and I have to talk to this person and talk to that person." All that might be true, but I think there needs to be a calibration or at least a spring-cleaning of, "What's everything I'm doing?" and how much do these things actually matter to getting value to a customer. Because as a company gets bigger, as teams get more complex, it's very easy and natural to spend more time on things that are internally-focused and not externally-focused. I think we just all have to have sensitive antenna to that so that we don't fall prey to, "Well, the way that my job is described is to do these things," but really it's the outcome again of put something in a customer's hands that's also a problem, and it's amazing.

**Lenny Rachitsky** (00:26:29):
Reminds me of your now colleague Jeff Weinstein's advice he got from one of the Coulsons where they came to him and they're like, "You're world-class at doing the second and third most important things and you're not focusing on the most important thing because it's so hard, and that's something you need to work on."

**Kevin Yien** (00:26:47):
Totally. I will say so one on that, the CEO at Mutiny, Charlie, she always repeated to me nonstop, "Keep the main thing the main thing" and would just say it ad nauseum, and I'm really glad that she did. The one excuse I don't want to give folks is, as you progress in your career, you have to walk and chew gum at the same time. You can't say, "Oh, I'm only focused on this thing over here, so other folks handle that." You do have to figure out how to do a little bit more at the same time, but prioritization does play a factor.

**Lenny Rachitsky** (00:27:25):
There's a framework [inaudible 00:27:27] suggested that I really like, the LNO framework. I forget exactly what the LNO stands for, but leverage something something. And we'll link to it in the show notes that gives you some advice on how to prioritize your time based on the stuff.

**Kevin Yien** (00:27:38):
Totally.

**Lenny Rachitsky** (00:27:38):
Okay. So I guess in the case of pushing back to create space, this was just you as a product leader recognizing, "This is really important to get right. I will convince people we need to make more time for that."

**Kevin Yien** (00:27:50):
I don't want to make it seem like it was me against everyone because that was definitely not the case. I think the starting engineers and designers on that team really cared about the quality of what they built too. That's a pretty structural DNA for a team as well. If you don't start with that, and as a comparison, you have a team that really prides themselves on shipping fast and meeting deadlines really prescriptively, you might end up in a different world or your role as a PM might be a little bit more challenging if you want to push on this stuff. So I do think you have to take into account what is the DNA of the team. And then can you exploit that? Which I was able to do. Or do you actually have some change management to put into effect if you believe that it's worthwhile?

**Lenny Rachitsky** (00:28:41):
Let's go back to the perimeter, drawing the perimeter concept to make that a little more real for people. So your advice here is the role of a PM, part of your main job, especially when it comes to engineers and design is to draw the perimeter for the team. Can you make that a little more real? What's an example of that maybe from something you worked on? What does that look like?

**Kevin Yien** (00:28:58):
Totally. The best word to describe the perimeter is just constraints. At the end of the day, you should be adding as many constraints as reasonable in order to let engineers and designers come up with the most creative solutions for whatever you're trying to do.

**Kevin Yien** (00:29:15):
And so again, if we just stay focused on this point of sale example, one constraint would be, "Who the hell are we serving? Are we trying to go after sit-down restaurants that are serving five different courses and have a 200 item wine list? Or are we trying to serve the taco truck?" Those will lead to very different spaces. And if you leave both on the table, the lack of that constraint makes designing a good solution that much harder, that there instances where you actually can't apply that many constraints. But I bet that if you push on enough different axes, you eventually scope it down to a point where it feels really good for the team. It's just about how do you remove decisions, right? Because this I think is maybe a trite phrase, but the best decision is no decision. If you don't even have to think about the decision, the team is that much more effective.

**Lenny Rachitsky** (00:30:04):
So yo give people a few maybe even pointers of, "I need to create more constraints maybe for my team to help them go crazy, but within this box that we all agree on," so you mentioned make sure the user's clear of who you're designing for. Is there anything else, just thinking about maybe the PRD someone's trying to write to help create this constraint? What other maybe bullet points, sections would you imagine or do you find useful to add?

**Kevin Yien** (00:30:25):
So beyond customer segment/like-what-their-specific-role is, I think another one would be, we can loosely call it, jobs to be done, even though I know that's becoming an increasingly loaded term.

**Lenny Rachitsky** (00:30:35):
Yeah, it's great.

**Kevin Yien** (00:30:36):
But what's the thing they're trying to do and how many different pathways are you willing to entertain around it? That's another one that I would think about. Depending on what you're building, there's availability. So do you care about desktop web, mobile web, native mobile, et cetera? And maybe another one to think through just as an example would be, this is probably getting closer to what a lot of people think about in terms of principles, but what are the things that you want to be known for when you ship a product? One example there might be speed. And so if you say speed is more important than consistency of data, that's a huge tradeoff and constraint that you can give the team." Oh my god, if an engineer hears I don't need real time consistency of data, I can do so much cool stuff and easily accomplish that speed thing." And so that's just a very technical example maybe.

**Lenny Rachitsky** (00:31:35):
Awesome. Okay, I'm glad I followed up on that. There's a couple more things you mentioned that I want to come back to real quick. The first is this tuning fork idea. I completely agree, this point you made, that the best way to get feedback from your team is to take a first pass at it, and here's a rough quick draft. I find with design, especially if you design something ugly, designers are often like, "Let me make that better. We can't stand this thing." Is there anything else you want to add there? Just this idea of tuning fork as a feedback strategy.

**Kevin Yien** (00:32:03):
Okay, there's two areas we can go deeper on here. One is in how you get the feedback. So this is definitely a Square-ism, I think it was probably adopted from Amazon, which is around the silent read of documents. When you are all so busy and someone's like, "I wrote a doc," you send it into the Slack ecosystem and everyone goes, "Please give feedback." You have so much going on... You'll be lucky to maybe get a response. Maybe there's one or two people that chime in.

**Kevin Yien** (00:32:35):
And so even though we hate meetings and we love asynchronous, there is a lot of value to saying, "I need 20 minutes of focused time to interrogate something that I've done. We're not going to talk. I'm literally going to force us into a room or Zoom. You're going to read this doc, I'm going to watch you comment on it in real time. I'm going to respond to your comments in real time. And at the end of this thing I'm going to have enough really good input that I can do a huge rub on this thing and get to the next phase."

**Lenny Rachitsky** (00:33:08):
I love that. So it's basically instead of, "Hey, I'm sending you this doc to go review, give me feedback," it's, "I'm going to schedule a meeting, and the meeting is for you to spend time reviewing this doc and giving me feedback and then maybe we could talk about it."

**Kevin Yien** (00:33:19):
Yep. And I think a lot of people are going to hate hearing that because like, "Oh my god, I have so many meetings already. Why do I want another meeting that isn't even a meeting?" But that's the best kind then, because it's actual work getting done, right? And maybe you carve out two minutes at the end for one really immediate discussion topic or something. But I don't think we give enough space in any type of meeting for people to actually think. And when you are just staring at a doc with your camera off and the only expectation is to engage with that thing, thoughts are a little bit better and crisper.

**Lenny Rachitsky** (00:33:55):
And I think with this idea, if someone says, "I want a meeting where you just sit and review this doc," you could always say, "Let me just review it asynchronously. I'll give you feedback, I promise. Give me 24 hours." Right? It's not like they have to come to this meeting.

**Kevin Yien** (00:34:07):
Although I would urge you to make them come to the meeting.

**Lenny Rachitsky** (00:34:10):
Okay, say more there, because you find that that's a lot more effective.

**Kevin Yien** (00:34:14):
I think there's two sneaky things hiding behind that. One is the, "Yeah, I'll get to this in the next 24 hours." Maybe they don't. Maybe you've really trust that person and they're the exception. But beyond that, there is something else to the real time interaction that can happen when you're commenting and responding on a dock at the same time. I think this is the part that often gets lost, which is the latency between a comments or question and a quick follow-up from the author just pushes that cycle speed really long in a way that doesn't need to be. And so when people are trying to find how do you move faster, this actually is one of those very good examples of moving slower to move faster.

**Lenny Rachitsky** (00:34:57):
It reminds me Claire Vo, I think it was her phrase of moving one clock speed faster, and just like that's the way you speed up a company is try to move one clock speed faster, which in this case is just reduce the time between feedback and iteration. I love it.

**Lenny Rachitsky** (00:35:13):
Okay, I want to shift to talking about a few very tactical things that you've found really helpful in your PM career and something you recommend to other product teams. The first is something you call a decision log. You think every PM should keep a decision log. Talk about what that is and why that's powerful.

**Kevin Yien** (00:35:32):
I will say there's two different decision logs we could talk about. We'll focus on the former though. The latter is just as you're making decisions within your job, you should document those within a PRD. Make sure everyone knows. It's just a silly, very small thing, but I think every PM should do it.

**Kevin Yien** (00:35:48):
The other decision log though that I think is quite critical is if we zoom out for a second, every person has something that they can do to slightly increment in their craft. Sprinters have certain exercises that they do. There's something beautiful about pianists and piano scales where it doesn't matter if you are just learning the piano or you are a 30-year veteran, you're still doing your scales, and it's because it lays the foundation for everything else that you need to do.

**Kevin Yien** (00:36:23):
And so we all talk about product sense. It's this super mystical thing that no one knows how to get better at. To me, it's just a fancy way of saying you can make good decisions with insufficient data, and the core of that is decisions. And so PMs need as many reps as possible in making decisions, documenting the rationale behind those decisions, and then crucially seeing the outcome of them. And so the natural followup would be, "Well, I only have to make X decisions in my job. How the hell do I make more of them?" Look around you. There's other teams that are making decisions. What would you do if you were in that position with the information you have? Great, write it down. Say why.

**Kevin Yien** (00:37:06):
There's other companies that are doing crazy things. What are they doing? What would you do if you were responsible for the roadmap? Write it down. A year later, see what they've shipped. You can just do this for anyone. It's free, and no one takes the time to do it, but that's how I think you get better at actually making decisions, is just doing more of them.

**Lenny Rachitsky** (00:37:24):
Hearing you describe this, it feels like, "Obviously yes, why aren't we doing this? How else can we get better if we're not reflecting back on the decisions we've made? And realizing, "Hey, I made a bunch of bad decisions, but I'm always so confident in my decision still, maybe shouldn't be. So I guess first of all, do you actually do this? How often do you do this? And is there an example of you learning something from your own decision log?

**Kevin Yien** (00:37:50):
Many. And many of them because it was a wrong decision. But yes, I do keep a decision log. I have a separate sort of practice where it's just a daily log, which is everyone wants the perfect note-taking system. To me, the best note-taking system is inspired by... What is it called? big ass text file, BATF. There's a funny blog post from 2001 on it, but it's just, you write everything that happens to you in a day in a bolded list and it's all in one big note. That way you can command F it, do whatever you want. The way that I keep track of it is I do a little hashtag decision and then write things down just as I think about them. And then I'll have a reminder to comb back through on some cadence.

**Kevin Yien** (00:38:36):
And so I'll first use a positive example, which is a funny one. So if you rewind to, I don't even know what year, but Shopify had just launched Shop app, their consumer application for what started as tracking your order when you bought something from a Shopify customer and then it's evolved into a full-blown Amazon competitor, where you can actually find merchants and buy things through it.

**Kevin Yien** (00:39:03):
When they first launched it though, I was like, "Oh my God, this is so brilliant. They have completely hijacked this specific loop for consumer buying behavior via this very unassuming thing, which is package tracking." And so that morning I was like, "Whatever, I'm going to quickly draw a diagram of this flywheel that I think Amazon owns today. I'm going to show how Shopify is slowly planting their little seed to take over this and how Shop app fits into it." I tweeted out. And then I don't know, that day there must have been 60 Shopify employees that followed me. I was like, "What the hell is this guy talking about?"

**Kevin Yien** (00:39:40):
And so funny enough, fast-forward, I've talked to some of the folks that worked on it and they're like, "Yeah, nailed it. Here's what we were thinking. Here's why." It's no longer secret sauce. But that was a really interesting example of both doing a decision log, putting my rationale down on paper. In this case, broadcasting it out, but then having that be a mechanism for it making its way back to me to actually better understand why did they make the decision versus what I thought, because the reasons were a little bit different, but the outcome was the same. So that's one interesting example.

**Lenny Rachitsky** (00:40:13):
It's an amazing story. You doing this explains why you've been so successful. I could see how this all connects now. I think for a lot of people, they would want to build this habit. Clearly there's a lot of value here, but they just don't because they got a lot of other things going on or it's just like this new thing they have to start doing. Is there anything that helped you adopt this practice of this daily log/decision log that you think might be helpful to folks to motivate them to give this a shot?

**Kevin Yien** (00:40:40):
This is probably just general advice on building any habit, which is start small and just force yourself to do it. And there's that old saying around, how do you start running as a hobby? You don't do it by saying, "I'm going to run a mile every day." You do it by putting your sneakers at the foot of your bed unless you take your shoes off inside, then you put it at the front door, you have your shorts ready to go and you're like, "I commit to putting on my shorts. And if I decide after getting dressed to go run, that I still don't want to go run. Okay, fine." But you build up to that thing.

**Kevin Yien** (00:41:16):
I think decision logs are the lightest weight thing possible. And so you can start super easy by saying, "You know what? Every Sunday morning I'm going to scroll through Twitter, I'm going to check out Hacker News, whatever it is, I'm going to see something interesting and I'm going to make a bet. I'm going to place my decision on this thing." Write it down, and then set a calendar invite in X weeks, X months to see what plays out. And that's all it is, right? 10 minutes once a week, super easy. And then over time you can crank it up. And then eventually you're just constantly writing these decisions down and then it's like feeding its way back into you. It becomes second nature.

**Lenny Rachitsky** (00:41:52):
And you're touching on something that there's been a little bit of talk on this podcast and newsletter post about this idea of to get better product sense and product taste and also just decision making this case, one of the best strategies is to simulate other people's decisions and simulate what they're thinking through and predict what they're going to do, which is what you're describing here.

**Kevin Yien** (00:42:12):
Totally. I do want to apply a pretty severe caveat here though, which is, a decision log is not a replacement for building products. It's a additional complimentary thing that you can be doing on your own. But if you think that you can just sit back in your chair, look out at the market, make a bunch of calls and be like, "Look at how smart I'm getting without actually being hands-on with building a product," you're not actually going to get any better. So I just want to interject that

**Lenny Rachitsky** (00:42:42):
Amazing caveat, very important. Don't just sit and read Hacker News and think you're going to be become an amazing founder or product leader.

**Kevin Yien** (00:44:21):
Yeah, it depends on how far you want to go down productivity and notetaking as to rabbit holes, but let's start basic. This is not what I do, but I think it's the easiest place to start. Spin up a Google doc or a Notion page, just call it daily log and then bullet point out the date of today. And then as you're going through your day, you have a meeting, just type in the meeting name. If there's a takeaway, put it under there. If there's a decision you can make, do hashtag decision. And in this case, say, "Shopify launch Shop app. I think this is their way to take over the fulfillment to buying behavior loop. The reason for that is X, Y, Z." Follow up on this in six months and then set your calendar invite.

**Lenny Rachitsky** (00:45:02):
Awesome. So as motivation for listeners to try this sort of thing, just look at the success Kevin has had as in his career and how insightful he has been so far and will continue to be. And this is how these happen. This is how your mind learns to see things in a really unique, interesting way. So I know you're modest and aren't going to take any credit, but I'm just saying this is how you get better, is trying stuff like this.

**Kevin Yien** (00:45:24):
Footnote, correlation versus causation. It's all put out there.

**Lenny Rachitsky** (00:45:27):
Could be all genes. Could be completely unrelated to anything you've done entire life, I suspect.

**Kevin Yien** (00:45:33):
Could just be me being very lucky, I'll put that out there.

**Lenny Rachitsky** (00:45:35):
Could also be luck. Okay, so something I wanted to touch on with this decision log idea, and it's a segue to talking about hiring, is I think interviewing is also really good opportunity to try some like this. I feel like people interview lots of people. They think they know what they're looking for. They think they've made all these decisions. They think they have these amazing interview questions that are going to help them see really good signal, but you never actually go back and see, "Was I right? Should we have hired that person? Did this person work out? Was that question asked them at all inform? Was it at all a leading indicator of anything?" And I feel like this is a really good method for improving your interviewing abilities, is like, "Here's the questions asked. Here's what I decided. Here's what I think," and then a year later look back, "Was that actually right?"

**Kevin Yien** (00:46:16):
Yeah, totally. I think some of the best companies actually do have a practice around this where they have a 6, 12, 18 month check-in on new hires and they then compare their performance against level hired at and then review against the scorecards. It's a pretty laborious process. So startups aren't probably going to do it in the same amount of rigor, but it shows you so much about the holes in your interviewing process. So I definitely plus one of that one.

**Lenny Rachitsky** (00:46:50):
I love that. Oh my god, that puts all this pressure on your score, which is great. So that's actually a segue talking about hiring. There's a couple more tactics that I've seen you be really good at. So one is just hiring in general. You have a lot of interesting approaches to hiring, including this idea of a unsell email where you try to convince someone not to join your company. Talk about that and why you think that's effective and then anything else along the lines of hiring you've learned.

**Kevin Yien** (00:47:11):
I'll say the idea of the unsell email came from a place of failure, which is at Square I had shifted into a position where I had to hire a lot of people really quickly. And through that, as a fairly new hiring manager, you're like, "All right, great. I've been told the goal is to hire fast." Okay, you give me a metric, you're going to go after it. So you do your best to get as many people in the door as possible. When you're talking to your recruiting partner, they're incentivized to increase pass through rates, offer to close rates, all these other things, and so they're like, "Yeah, this person's really good." And you listen. "Yeah, they are pretty good, aren't they?" Even though there's a sneaking suspicion that maybe they're not the right fit, but you move forward anyways.

So fast-forward, there's a few folks I bring on, and within six months they come to me and they're like, "This is not at all what I thought I was going to do. This is not the environment I thought I was going to walk into. You didn't warn me about this, that and the other. I feel terrible. How do I prevent this?" And the reason it's bad is not just because they feel surprised, but because then, either one, they decide to leave, two, they're not performing because it's not the right role or environment for them, or three, maybe the company is still good, but that role isn't. And so they immediately try to do internal mobility or something to another team, which then leaves you with the same hole. So all of those bad outcomes. [inaudible 00:48:37] "How do I prevent this?" Well, I just got to front load all the gnarly stuff they're going to find out in their first six months.

**Kevin Yien** (00:48:44):
And so the practice I started developing is you go through the whole interview process. During that period, you're collecting all these little concerns, fears, anxieties that they're not explicitly saying, but they're definitely hinting at. You got to be pretty honest with yourself about which ones are real. But then when you get to offer stage, I send an email with no more than eight bullet points and I say all the terrible things that are probably going to reinforce their fears. I'm pretty candid about, "This is what it's like here." Maybe one example would be, "Hey, I'm a parent and I'm worried about work-life balance." Maybe they don't say that explicitly in the interview process, but you get a feeling for it. And I get that as a parent too.

So if I'm at a startup, I'll be really clear and I'll say, "You know what? We are a series A startup. We are pushing really hard at product-market fit. The expectation here is going to be that you're online at 10:00, that you can occasionally hop on a meeting on a Saturday or Sunday." And if you can tell them that upfront and they can read that whole email and still be equally excited to join, you find yourself an A+ hire. But if they read that and they're like," I don't know anymore," it's way better to say, "Great, this is not a good fit. Let's go our separate ways" than have them leave after six months.

**Kevin Yien** (00:50:08):
When I first instituted this, I lost 30% of candidates at offer stage.

**Lenny Rachitsky** (00:50:13):
Oh wow.

**Kevin Yien** (00:50:13):
Which drove my recruiting partners insane because they look terrible. Their manager is like, "What the hell are you doing? You're losing everyone at the very end." And so they ask, "Can you either not send this thing?" Or, "Can you send it at the very beginning?" And my answer is no, because I don't know what they're afraid of yet. I have to go through the whole process to actually understand the thing that's going to potentially make them say no, and that's really crucial I think.

**Lenny Rachitsky** (00:50:36):
But once you hear it again, this is such an obviously good idea, clearly not an easy thing to do. In this case where recruiters were upset, is it just get buy-in from folks above, like, "Okay, this sucks for them, but at a macro level, this is good for the business" and they're like, "All right, let's keep doing it"?

**Kevin Yien** (00:50:55):
At Square, at least, when I first started doing it, luckily I had a very good relationship with them. So that's a good starting point. This is maybe going to come across a little bit flippant, but they can't stop you from sending an email technically. So I'm just going to send the email. And if someone really wants to come and say, "This is bad for business," whatever it is, I have very strong reasons for why that's not the case. And now I've done it so many times, at least, that I can point to very clear proof points on why this is the right path.

**Lenny Rachitsky** (00:51:27):
In theory, the incentives would be aligned where the recruiter success matters. It's based on, did they actually have a good time? Did they stay? Did they have good impact?

**Kevin Yien** (00:51:35):
Totally.

**Lenny Rachitsky** (00:51:36):
But since they're not, obviously incentives aren't right.

**Kevin Yien** (00:51:39):
I think some companies have shifted on that, where recruiters and salespeople are compensated sometimes in similar ways in terms of quota and whatnot. And so they'll hold the recruiter accountable to six, 12 post offer tenure before they say, "Oh yeah, you successfully landed this role." So you can tweak the incentive structure a little bit, but not everyone does that.

**Lenny Rachitsky** (00:52:03):
Okay. So the advice here is to end up with better people that end up being successful and happy. Keep track of the things that will probably be painful for them at the company, and then craft an email that shares upfront, "Here's what made be a problem if you join, and I just want to be very upfront about it." I think you actually shared a template of one of these emails in one of your blog posts.

**Kevin Yien** (00:52:25):
Yep, that's right. I have a fairly real one in [inaudible 00:52:30].

**Lenny Rachitsky** (00:52:29):
Is there anything else hiring-wise? I know there's probably infinite things that you've done, but is there anything else you think might be worth sharing of things you've learned to be more successful at hiring awesome people?

**Kevin Yien** (00:52:39):
One final note I'll make on unsell email is it's not as if you just send the email and then they either say yes or no. Most of the time they will say, "Thank you. I am cool with six of these. This one freaks me out. Can we talk more?" Definitely. And I think this is where hiring managers have an incredible responsibility that sometimes isn't taken as seriously as it should, which is, when you are working with someone to get them to join or to offer, you need to bend to do whatever it takes for them. And so if they're like, "Hey, the only time I can talk is tonight at 11 o'clock after my kids go to bed."

**Kevin Yien** (00:53:18):
"No problem. Here's my phone number, let's hop on. I will walk you through whatever you want to talk about." That sort of has to be the place you get to for really strong hires. So that's just one other thing I'll say.

**Kevin Yien** (00:53:29):
The meta point around that is you need to be really invested in the candidates. This probably does change at a certain scale, like if you're "organization" is hiring a hundred engineers or whatever, you have process around it, you have pipelines, there's a machine at that point, but I do think the direct hiring managers have a responsibility to be really involved in every individual, because there's no one who's directly hiring a hundred people. It's always within a number that I think you can take on.

**Lenny Rachitsky** (00:54:01):
Okay, so this is the final tactic that I heard you're amazing at, which is automating user research. On the surface this sounds amazing. "I'm going to automate my user research. It's going to be amazing. So great." Talk about why you find this really powerful and important. And then how do you actually do this? How do you automate user research? How have you done this on your teams?

**Kevin Yien** (00:54:17):
Let's start from why this even matters. I think a lot of folks, going back to what is the point of product management, I think there's a similar overlap with UXR, like user experience research, and people will say, "Well, if they're doing research, what do I need to do? I should just be consuming what they're producing to help with that."

**Kevin Yien** (00:54:39):
I know PM should settle for looking through bent glass in my opinion because whether it's a research report, whether it's something a salesperson is telling you, whether it's market research, don't care, it's been processed by someone, and PMs need direct exposure to raw material. End of story. And so that's where I think you just need to constantly be talking to or interacting with whoever is your customer. That's the foundation.

**Kevin Yien** (00:55:08):
So okay, if we all agree on that, then the question is, "Well, I don't have time. It's so hard. How do I find them? My customer success manager says I can't talk to the client." If you are in a situation where the product manager is literally not allowed to talk to a customer, there is something structurally wrong and that needs to be fixed first. So I'm going to ignore that one for now just because that's a whole other rabbit hole, but you need to fix that in order to even get close to the next thing.

**Kevin Yien** (00:55:38):
Okay, now the excuse is going to be, "Well, I don't have time. I don't want to run a program. I don't want to have to query and look up and send out emails every week." There's so many good resources out there right now, and I think that there are... I'll speak mainly from a B2B sense. I think B2C, slightly different story, I don't have as much experience there. But B2B, the two things I will say, one is, there's this thing called userinterviews.com. Shout out to them. They're pretty much user testing but explicitly focused on B2B and you can put in super clear criteria on the type of people you want to talk to. They do the heavy lifting and sourcing it, and then you just review and say, "Yes, yes. No, no," and you can have a steady stream of the exact ICP, you want to go after. ICP is ideal customer profile that you want to go after just coming to you automatically. Amazing.

**Kevin Yien** (00:56:28):
The next one though, it depends on whether or not you have this tooling in place, but the broader theme behind this next category is your sales team is a research team, and if you don't view them that way, you are missing out on half the value. And so there's tools like Gong, which do call recordings, and you can set up filters and alerts for specific terms, phrases, competitors, whatever you want. I don't care what PM you are in the team. You can find the terms that are associated with what you care about the most. Those then get pushed automatically to a Slack channel or otherwise. And then you can set up workflows either via Zappy or something else to say, "Who was the customer? Pull their email, put that into a sequence, drop in my Calendly" and you just have interviews showing up automatically on your calendar. I will say I cannot take credit for this. Shout out to Beth Hills who was a PM that hired at Mutiny. She is the queen of automating customer research and built an amazing system around this.

**Lenny Rachitsky** (00:57:28):
So the way it works is you set a term for like, I don't know, POS, point of sale, something in Gong, and if somebody says that or has an issue there, talk about again how that schedules a meeting with you potentially.

**Kevin Yien** (00:57:42):
Yes. So Gong has an integration with Slack. You set up this alert, it posts to Slack the excerpt of the transcript where it was mentioned along with the user or customer name. So in this case, it'll be Lenny's Burger shop. lenny@lennysburgershop.com, and then you can set up a Zapier to take every new Slack post from that and then send using, I don't know, customer.io in email to that person using that field. And then in that template of the email, drop in your Calendly specifically for user research.

**Lenny Rachitsky** (00:58:21):
Wow, that is genius. I love that. There's another similar tactic that Teresa Torres shared on the podcast in one of the earlier episodes where you have a little popup on your homepage asking people, "Hey, do you want to talk? We'd love to hear feedback on our product. Click here if you want to give us some feedback," and then that schedules Calendly on the PMs.

**Kevin Yien** (00:58:41):
Totally.

**Lenny Rachitsky** (00:58:41):
PM's calendar. So you mentioned Gong, customer.io. There's some tools here. Zapier obviously. Is there anything else you find useful to help automate the sort of stuff?

**Kevin Yien** (00:58:52):
If I take a step back from the automation side or maybe straddle it, depending on the type of business you're in, there's ideally people talking about you somewhere, right? It's either happening on Reddit or Twitter or on some forum or your support forum. There is a community, there's a destination somewhere. And if there isn't, then I don't know, that's too bad. Maybe you don't have product-market fit. If you can take advantage of that, you can usually set up something. And if it's not a Gong or a Zapier, maybe it needs to be just a custom script that you write or you sit down with an engineer to say like, "How do we set up alerting around this thing so that I know when things are happening?"

**Kevin Yien** (00:59:36):
I think you can't use the effort required to do that as an excuse to not be talking to your customers more frequently. Because again, if we go back to a product manager should be trying to convert this potential into kinetic energy, part of that understanding and part of knowing the constraints you can apply is just living in that world as much as possible.

**Kevin Yien** (00:59:59):
The best comparison I can give is, there is a world of difference between reading a report about a lime cook and then standing with a lime cook. You will just pick up on so many ancillary aspects of what their life is like that cannot possibly be communicated in a report. You owe it to yourself as a PM to be exposed to those things all the time.

**Lenny Rachitsky** (01:00:27):
In my experience, every time I talk to a customer, I'm always reminded, "Why have I not been doing this more? How can I not be doing this? It's absurd that I haven't done this," like every time you actually do it. But until you do that, you're like, "No, no, I know what they want. I'm reading all the customer service talent issues, I'm reading their emails, I get it." Until you actually talk to them, you're like, "Oh wow, I had no idea."

**Lenny Rachitsky** (01:00:51):
I love that your advice is like, the tactics you're sharing aren't, "Here's how you get a bunch of feedback." From your users, it's like, "Here's how you actually get to talk to the right users." It's like in the end of the funnel talking to a potential customer. It's not just reading a cool... some feedback that they shared.

**Kevin Yien** (01:01:07):
That's right. I think just like the last point on this one is when you join a new team or start a new role, every PM is budding with energy to do this, "Of course I'm going to talk to my users." But then you reach a point where you go, "No, I know them inside and out. I don't need to talk to them anymore. I can write a PRD in my sleep. And I'm so busy doing both, product improvements, maintenance, annual planning, something else.I can use my intuition from the hundred interviews I've already done. I don't need to do one more interview." And that is a very tempting lie to tell yourself because the world is changing, their lives are changing, and you need to constantly be exposed to those little micro changes in their lives in order to build the product that they'll eventually need.

**Lenny Rachitsky** (01:02:00):
The best explanation I've heard of this is actually from your new boss, Patrick Collison, boss's boss's boss, I don't know how far away you're from him, where he talks about user research and where it fits in. And the way he described it is, instead of doing user research, talking to customers, informing what to build, it's talking to user, talking to customers informs your mental of what the customer needs and then that informs what to build.

**Kevin Yien** (01:02:23):
100%.

**Lenny Rachitsky** (01:02:24):
Beautiful way to think about it.

**Lenny Rachitsky** (01:02:26):
Okay, so I'm going to take us to a couple recurring themes of this podcast, a couple corners of this room that we have. First of all, I want to go to AI corner, so let's walk over there. Hello, AI corner. I'm curious if you've found any interesting uses of AI in your work or in your life.

**Kevin Yien** (01:02:46):
There's plenty in work. I don't know if any of them are interesting or novel. I feel like everyone's just figuring it out in real time together. So I'll actually take us in a slightly different direction. And this may be isn't directly useful to product managers, but I think it's a really good story.

**Kevin Yien** (01:03:02):
So when Midjourney V1 was released, if we can remember that far back, it was at least I got beta access on a Saturday. And for what's worth, I have three daughters, one of them's seven years old, and so her and I were awake. We were waiting for the other two to wake up and I was like, "Oh, I have this cool new thing. Do you want to play with me?" And she goes, "Of course." So we log in, we create an account and I type in the first prompt, image gets generated, it's like a rainbow or something. And then I ask her, "Do you want to try it?" She goes, "Of course." So she types in unicorn prancing in a field and it generates this hideous looking demented unicorn with two rear ends and a demon flying over it. And I'm appalled at first thinking that she's going to feel really bad about what she got shown, but instead I look over and she's in awe. She is amazed.

**Kevin Yien** (01:04:04):
And then she turns to me and she goes, "Did I draw that?"

**Kevin Yien** (01:04:06):
"Yeah, I guess you did." And the thing that I got hung up on was that she used the word draw. She didn't say, "Oh, I enter a prompt and the LLM produced this thing," or whatever weird terminology that all of us use. It's like, "Did I draw that?" I don't know when it clicked for me, but at some point in time after that I was like, "The concept of these image generation models is the same as a crayon to her. There is no difference in her mind." And that is an insane change that I can't even comprehend. And so for me that's just been I think an experience that I go back to when I think about people asking, "What do you think AI is going to do and what's the next thing? And is it chat or is it something else?" I cannot comprehend what a child who grew up with a crayon of an LLM is going to think is a good product in 20 years. I need to start crying. But goddammit, I have no freaking clue.

**Kevin Yien** (01:05:11):
And so I think I have a cheat code actually as a parent, because I get to see how they evolve and use these tools in real time. But all I can say is we are not even beneath the dust on the surface when it comes to what's going to change.

**Lenny Rachitsky** (01:05:29):
Wow, that is an amazing story, it gave me tingles. It makes me think a little bit about how we used to code in binary and then assembly and now it's Java, and then I don't know, all the languages, Python. And now it's like AI, LLM generating code and it's the same thing for drawing potentially. It used to be sticks on a cave and then became crayons and pens and iPads and all that stuff. And now it's again LLMs, so that's pretty bonkers. Amazing story. Thanks for sharing that. Useful to PMs and non PMs alike.

**Lenny Rachitsky** (01:06:06):
Okay, I'm going to take you to another recurring corner/segment of the podcast, fail corner. I'm curious if there's a story of failure that you can share of something that didn't go the way you wanted and still had a positive impact on your life or career?

**Kevin Yien** (01:06:25):
Well, there's countless stories of failure, but I'll choose the one that I think I've had to reference the most with people and has been to date the most difficult one to really talk about. I'm on the other end of it, and so now it's very easy, but it took several years to get there.

So context, I'm [inaudible 01:06:47] my way to PM, I land my first official, by title, PM job at a startup. I made it. I've arrived. I'm officially a product manager. And we go up, we go down, all the things happen. Fast-forward, the company is really struggling and so we go through a series of rolling layoffs and I'm round 4 something. At that point in time, my wife was nine months pregnant with our first child, and so I am freaking out. There is the personal side that I'm worried about, but then there's also my identity that has been completely crushed, because in the moment all I could think was, "I thought I was a product manager. This is evidence I am not," and I couldn't get past that.

**Kevin Yien** (01:07:37):
And so for what it's worth, this is the one post I have on my website that I actually feel really, really proud of. It's called Finding Swagger. I can talk about why it's titled that way, but it's the thing that I really wrote more for myself because it's a good reminder to me every time I fall into this mentality again, because that may have been the first time that I really had the feelings of, "I'm not worth it" or, "I'm not meant to be this person," but it's recurred several times since then over the past decade. And when I read back through my mentality of how I got to the other end of it, it helps even myself sort of get back on the horse.

**Kevin Yien** (01:08:28):
So okay, I get laid off, I'm distraught, I have no purpose, I'm nothing. And it was through a lot of reflection, a lot of conversation with friends and my wife where you eventually need to convince yourself that there is a difference between you not being good at something and a business or company not needing that thing at a particular moment in time, or you being very good at something but not in the way that a company needs.

**Kevin Yien** (01:09:01):
And so I think once I was able to get to that, Square for me was the immediate subsequent role that I took on. And I went into that thing just full steam ahead, I'm going to prove myself. "I know I'm good," because I think I'm good, "and I am going to prove the hell out of that" mainly to myself, but ideally to other people too.

**Kevin Yien** (01:09:24):
I think you shouldn't do things for other people for validation, but the initial success I got to see in launching a product, gaining the trust of my peers, having something that restaurants were texting me about, saying, "I can start my restaurant because of this. I didn't go down during rush hour because of this," that gave me the validation to say, "Okay, I am competent at this thing called product management." And then from there you can continue to build and continue to grow.

**Kevin Yien** (01:09:53):
But I think right now, the market's weird, right? The market's wonky. There's a lot of really good talent that is just getting hit over sideways. I have a lot of friends that are having the same mental conversations around, "Well, I guess I'm just not worth it. I guess I wasn't cut out actually to do this job, do this role, be of this purpose." In some cases, maybe that's true and you can sort of have a career transition or a pivot in your life, but I think it's worthwhile to reflect on what are the things that were in your control that you can now change moving forward? And then what are the things that were truly out of your control that you can now apply to find a better fit? And that's one of the big things that I've been able to, I think, come around to.

**Kevin Yien** (01:10:41):
And it's really hard because early on I think it's very tempting to associate a lot of different things with your identity. You're like, "I'm a startup guy. I'm a PM, I'm a fast whatever, I'm a fast thinker." And when an event happens that pokes at that part of your identity, the rest of it crumbles. And so long story short, I think it's really important for folks to use these moments where it feels bad and feels like a failure to reevaluate what parts are actually part of your identity and which parts are in your control to change in whatever you do next.

**Lenny Rachitsky** (01:11:23):
Wow, what an important and great story. As you mentioned, a lot of people are dealing with finding it hard to find a new gig and a bunch of layoffs. I think this is going to help a lot of people. The two categories you shared I think are especially powerful. So the advice here is just separate, "This company just doesn't need someone with my skills right now" from, "I'm not good at these skills." Can you just share those two kind of things that might be true that you may not be recognizing about why they maybe laid you off again?

**Kevin Yien** (01:11:52):
Totally. So one is the business just doesn't have a need for you. They got ahead of their skis and that's their fault. They probably admit that, but that's not up to you. The second one though is my skills and the way that company operates are not compatible. This one I think is really, really important because I've seen so many times where there's been a PM engineer, designer, whatever role, they cannot make it work at company A, and then you see them five years later just killing it in company B and you're like, "Did they change as a person? Did they get super good at what they were bad at before?" Maybe a little bit, but honestly it was just a change in environment. And when you find the right environment in the right role, you just flourish.

**Kevin Yien** (01:12:40):
And I think this is actually... Sorry, we'll go back to hiring for just a moment or at least management.

**Lenny Rachitsky** (01:12:44):
Please.

**Kevin Yien** (01:12:45):
This is why performance conversations can always feel so difficult because it seems like you're telling someone you are bad, and as the recipient you're like, "I am bad." No one wants to hear that. But the reality is, you are not bad. It is that maybe the way that your environment is working, the machine that you exist as a part of, is not the kind that you thrive in. And so it's within your control to decide, "I'm going to change how I work to fit that environment" or, "I'm going to find a different environment that actually fits the way I work much better." And that's empowering.

**Lenny Rachitsky** (01:13:26):
I think that also applies a lot to interviewing. A lot of times you interview, don't get the job, and you exactly feel like, "Oh, I'm just not good enough." But really that company's way of working just may not gel with the way you operate. Like Uber operates very differently from Airbnb, operates very differently from Google. And so it's not that necessarily something you're doing wrong, they just don't think you're fit.

**Lenny Rachitsky** (01:13:46):
And this connects to something. I just had another guest on the podcast. He was a brain science dude, and he talks about how every company has this kind of habitat. What habitat are you creating for your employees to enable them to think differently or to be shut down and not feel like they can be creative or try big things or not? And basically, the way he just kind of to leverage that metaphor, like you may be a palm tree and you're trying to join Antarctica and it's not going to go well.

**Kevin Yien** (01:14:16):
Totally.

**Lenny Rachitsky** (01:14:17):
You got to find Palm Springs or some hard place. Kevin, this has been amazing. Okay, so before we get to very exciting lightning round, is there anything else that you think is important or valuable to share, leave listeners with? And if not, absolutely.

**Kevin Yien** (01:14:30):
I think we'll probably find ourselves on interesting detours to the lightning round, so let's roll in.

**Lenny Rachitsky** (01:14:35):
Kevin, with that, we've reached our very exciting lightning round. Are you ready?

**Kevin Yien** (01:14:39):
Hell, yeah. Let's do it.

**Lenny Rachitsky** (01:14:40):
Let's do it. Question one, what are two or three books that you've recommended most to other people?

**Kevin Yien** (01:14:46):
I'll start by saying the type of book by volume that I read and get the most joy from are autobiographies and memoirs. It is just the ultimate cheat code to spend time with people that you respect, are interested by, or want to learn from.

**Kevin Yien** (01:15:05):
Could you imagine what it would take in real life to sit down with Albert Einstein for 50 hours and just have him talk to you about his life? Impossible. But you can read and pretty much get the same thing.

**Kevin Yien** (01:15:21):
So anyways, strong requirement or a strong suggestion, go read autobiographies and memoirs of people that you respect, mostly for their mental model and way to approach thinking, less about specific things. But the one book that I read without fail every year has a very misleading title. It's called The Courage to Be Disliked. I think it's been mentioned previously on the podcast, but it covers... It's a very Socratic method style, so it's about a philosopher and a young person, and it tries to teach you the ways of Adlerian psychology, which is sort of counter to Jungian theory.

**Kevin Yien** (01:15:56):
The reason I really like it is because it makes me uncomfortable. So the whole premise, in my opinion, behind the book and other in psychology is focus on what you control. That's the one line. Don't worry about everything else. Don't worry about what other people think. Don't worry about what other people do. You cannot control those. You focus on yourself and you focus on the actions you can take. And be the person that you think will attract other people, that you want to be around.

**Kevin Yien** (01:16:29):
There's some really pointed notes in there that I'm like, "Ha-ha-ha-ha. I don't fully agree with that one," but it always pushes me to question something about what I believe. And so in every physical copy of a book I have, I write the date that I started reading it again. The front inside cover of this book, I think it's been seven or eight years at this point that I've read it every single year.

**Lenny Rachitsky** (01:16:55):
Wow. It's like a decision logging in another context almost.

**Kevin Yien** (01:16:59):
Yeah, a little bit. I would say the other book I was going to mention is The Paper Menagerie. This actually shout out to Sean Rose for... I've never met him, but I really appreciate Sean. He was one of the early, if not, first PMs of Slack, and he used to be really loud on Twitter in a very good way, and I think I learned a ton from stuff that he would post. But one of the things that he posted was this book. It is just the most beautiful collection of essays that span sci-fi and fantasy. And so if you're into that kind of stuff, if you like exhalation, then Paper Menagerie is even better.

**Lenny Rachitsky** (01:17:39):
Oh, shit. Guess I got to add this book to my list. I do love exhalation.

**Kevin Yien** (01:17:43):
There you go.

**Lenny Rachitsky** (01:17:45):
Oh, man, this job is tough. I get to learn all these amazing books and then I got to read them, but I don't have time. Hard.

**Lenny Rachitsky** (01:17:51):
Speaking of more time, next question. Do you have any favorite recent movies or TV shows that you really enjoyed?

**Kevin Yien** (01:17:57):
There's less time for either these days. I will say not novel, the Bear holds a very special place in my heart right now, both because I worked in restaurants and I got to build for them. And so seeing the details that they do actually gives me a lot of anxiety, but I really appreciate the craft they put into it.

**Kevin Yien** (01:18:16):
The other show, actually, I think this is the first time, Physical 100. So this is a Netflix show. It's a Korean show about a hundred different bodybuilders, athletes, what have you, on who has the optimum physique or whatever. I don't really care about that part. The two things I love about the show are, one, it's ridiculous what people are capable of. You see what they can physically do and you're like, "Oh my God, that's amazing what they can put their minds to." The other part though, and this is maybe a trend of Korean shows that I've noticed, is the amount of respect they have in this competition is bar none. You have this guy who is historically famous, was the top champion in judo or something, and you have all these other athletes that are 15, 20 years younger, and they're bowing and just humble to compete against the guy. I kind of wish that more American Joes had that level of respect as opposed to just trying to find the most conflict. There's something that I really like about that.

**Lenny Rachitsky** (01:19:25):
That's beautiful. I've started that show, but I haven't continued it, so I'm going to revisit it.

**Kevin Yien** (01:19:30):
Cool.

**Lenny Rachitsky** (01:19:30):
Do you have a favorite product that you've recently discovered that you really like?

**Kevin Yien** (01:19:34):
We got a really old 2002 Jeep to work on with my daughters, just like a true junker. And as a result of that, we're repairing it. We're taking off the rust, replacing parts, and so there's these little magnetic trays that you can hold screws and nails and whatnot, so they don't go flying and rolling around everywhere. It's stupidly useful when you're working on a car. And the girls love it because they can use it for other things like collecting hair clips or whatever else. So magnetic trays, shout out.

**Kevin Yien** (01:20:06):
And then selfishly, I will say my buddy Arjun Mahanti has an app called Circuit. If you search the app store for Circuit, like C-I-R-C-U-I-T, HIIT timer, it's such a delightful little app that lets you track Tabata sex or whatever else to just get a little workout in.

**Lenny Rachitsky** (01:20:24):
Super cool. Magnetic tray is not boring at all. That is extremely cool and it has a really cool story too. Do you have a favorite life motto that you often come back to and find useful to share with friends and family in work or in life?

**Kevin Yien** (01:20:36):
I think we've actually maybe touched on both of these. I'll cheat and I'll pull one from maybe each parent so that in case they see this, they don't feel like I'm favoring one of them.

**Kevin Yien** (01:20:45):
So my mom's side, I think something that she would always repeat to me growing up is everything happens for a reason. I hated that growing up because she only said it when something bad would happen. Something bad happens, she goes, "Everything happens for a reason," and I'm like, "No, it doesn't. Life just sucks." And to no surprise at this point in the conversation, I've now grown to really, really appreciate that piece of advice because what it's actually trying to communicate is, when something happens, good or bad, frankly, don't dwell on it. That's the past. Focus on what you want to do and then just move towards that. And then in most cases, you'll be able to look back in one, five, 10 years and connect the dots in a way where the story makes sense in your mind. And so just having that shift in perspective I think has helped me a lot to not overreact to anything that happens in my life. So that's one side.

**Kevin Yien** (01:21:46):
And then on my dad's side, so the funny origins of this, unsurprising to anyone with Asian parents, I'm a spunky little 7-year-old, I come home with my math test one day. I got 97%. I think that's pretty good. I go show it to my dad with beaming eyes and pride. He sort of stares down his nose at it, looks at me, "Where's my other 3%?"

**Lenny Rachitsky** (01:22:08):
Oh, my God.

**Kevin Yien** (01:22:10):
I'm just distraught and I sulk away. I'm very sad. I study hard. I do the next math test, I get 100% yes. All right, dad's approval, here we come. I come flying back, I put the test in his hands, he stares down his nose at it, looks at me, "Where's my other 3%?" I'm so confused. I'm like, "I got 100 out of 100. I have no clue what you're talking about." He just looks me down the eye and goes, "Who said a hundred is the most you can get?" At that age, I literally had no clue what he was talking about. And he had to reframe it for me in the moment around like, "Well, was there extra credit? Can you just write your own problems to challenge yourself more? Could you have given yourself another test? And maybe the teacher won't give you credit, but you give yourself credit for doing additional work."

**Kevin Yien** (01:23:01):
I think I carry that theme forward where there's this weird transition we all go through from childhood to adulthood where we no longer receive homework, we're responsible for defining the work that we do. And when you do that, if all you do is the minimum of what defined the 100% of what your job requires, you'll never grow. And so it's up to you to actually find what is the additional 3%? There's always three more percent. So that's my dad's lesson.

**Lenny Rachitsky** (01:23:35):
Kevin, you're blowing my mind. There's so many great stories, you're just full of them. And I feel like this lesson also applies really well to product and building product and founding companies.

**Kevin Yien** (01:23:46):
Totally.

**Lenny Rachitsky** (01:23:46):
Just pushing further than people expect and making it a lot more delightful than the minimum bar.

**Lenny Rachitsky** (01:23:53):
Final question, speaking of things that maybe people don't expect and may not understand is possible, looking at you, nobody would've guessed that you're a competitive eater at some point in your life. As a final question, tell us about this part of your life. What did you eat? How does this work? How far did you get in this path?

**Kevin Yien** (01:24:12):
It's probably misleading to say that I was a true competitive eater. I wasn't on the circuit with a... I forget his name, but Johnny Chestnut.

**Lenny Rachitsky** (01:24:21):
[inaudible 01:24:21]. Oh yeah, Chestnut

**Kevin Yien** (01:24:22):
Back in the day, that's like the OG competitive eater on the hotdog circuit, I guess.

**Lenny Rachitsky** (01:24:25):
Right.

**Kevin Yien** (01:24:26):
For me it was more eating challenges. And so whenever I would travel, I would find the local eating challenge, whether it was time-based, volume-based, something else, and just try to see what I could push my body to do. I was blessed with a great metabolism, so I never really had to worry too much about anything else. And the origin, the first moment of this was when I was 14, my sister was going to college in Minnesota and there's this steakhouse up there called Manny's, which is where the Vikings Frontline goes to after every game. And they have this ridiculous 97 ounce order house. I don't know how many pounds that is, but it's too much meat for a human to consume.

**Lenny Rachitsky** (01:24:26):
97 ounce.

**Kevin Yien** (01:25:07):
97 ounces, yeah. And so I sit down, I order it thinking, "This is going to be great." They put it in front of me, it's a monster. You have to eat in under an hour. And so 45 minutes into it, I'm halfway through and about to die. And the catch is, if you finish it in under an hour, you get it for free. And so my dad again leans in and goes, "You can't afford not to finish this."

And so, "Message received, sir." Hunker down. I plowed the other half in 15 minutes. I then slept for I think three days afterwards. But after that I was like, "Oh my God, if I could do that, what else could I do?" And so, [inaudible 01:25:54] carried for, I don't know, nearly a decade of trying to do these interesting challenges.

**Lenny Rachitsky** (01:25:58):
Wow. I don't know how that's physically possible, but clearly you did it.

**Lenny Rachitsky** (01:26:02):
Kevin, this has been wonderful. I think there's so many lessons here for people in so many ways, life and work and parenting. Two final questions, where can folks find you online if they want to follow you and learn more from you over time? And how can listeners be useful to you?

**Kevin Yien** (01:26:17):
I'm on Twitter, just @kevinyien. Technically, I'm on LinkedIn. I don't post over there. I probably should. I hear it's very good. But that's where you can find me. Also, my website. I don't write that often, and I don't have an RSS feed, which has always been on my backlog, and I'm always too lazy to do. But one day I will add it.

**Kevin Yien** (01:26:38):
One quick note, I'll actually make on websites. So on one hand, I love all the different website builders that exist. It's amazing what we've enabled anyone to be able to do. There is something really special about having your corner of the internet that you built sort of hand by hand, line by line. And so my website is, it's a GitHub page. It's hosts on GitHub pages, but it's just raw HTML, CSS, nothing fancy. I get so much joy every year just doing a slight tweak or cleaning of it. And so I really do recommend that for anyone with the curiosity and the desire to buy your domain, even if you're never going to write anything on it, you're never going to share it out, just own a little piece of the internet. It feels good.

**Lenny Rachitsky** (01:27:28):
I love that. I didn't know that about your website. And I could see it now as I go there. It's .html, which you don't see as much anymore.

**Kevin Yien** (01:27:35):
Exactly. [inaudible 01:27:37].

**Lenny Rachitsky** (01:27:36):
And then... Yeah, can listeners be useful to you.

**Kevin Yien** (01:27:39):
This is going to sound trite, and it has nothing to do with product necessarily, just be kind. Make for a nicer world, right? Say thank you a little bit more often. Hold the door open a little more often. Wave if you cut someone off in a car. I think there is a temptation and incentive structure to create conflict intention. And in most cases, the world would just benefit from a little bit more kindness.

**Lenny Rachitsky** (01:28:06):
What an incredibly beautiful way its ended. Kevin, this was so much fun. I'm so glad we did this. Thank you so much for coming on.

**Kevin Yien** (01:28:13):
Thank you for having me.

**Lenny Rachitsky** (01:28:14):
Bye, everyone.

**Lenny Rachitsky** (01:28:16):
Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [10/16] How to consistently go viral: Nikita Bier’s playbook for winning at consumer apps (co-founder of TBH, Gas, advisor, investor)

**Nikita Bier** (00:00:00):
... Honored to be on a product management podcast for a person who doesn't believe product management is real.

**Lenny Rachitsky** (00:00:07):
We're already getting into the hot takes. You launched tbh, went viral, you end up selling it to Facebook. What was the insight that helped you come up with this is a big idea that we should try?

**Nikita Bier** (00:00:15):
I looked on the App Store and the number one app in the United States was an app called Surah, but the entire app was in Arabic, like the strongest signal that you could ever have that people want something.

**Lenny Rachitsky** (00:00:27):
This is insane. I did not know this full story.

**Nikita Bier** (00:00:30):
We launched this app, it immediately took off, servers started crashing. I looked at our numbers and I'm like, "We will be number one in the United States in six days."

**Lenny Rachitsky** (00:00:40):
A tip that you're sharing here is look for latent demand

**Nikita Bier** (00:00:43):
Where people are trying to obtain a particular value and going through a very distortive process. If you can actually crystallize what their motivation is, you can have this kind of intense adoption.

**Lenny Rachitsky** (00:00:57):
I didn't know you're actually a product manager at Facebook.

**Nikita Bier** (00:00:59):
The thing I didn't realize as a product manager in a large tech company is there is very little product management that you do. They're mainly just writing documents and then being the team secretary and running around getting approvals, but products live and die in the pixels. You should be designing the hierarchy, the pixels, the flows, everything. That's on you.

**Lenny Rachitsky** (00:01:21):
At some point you started tweeting like, "Hey, I'm working on new app. Everyone was going nuts." I saw a stat that you made $11 million in sales, 10 million downloads.

**Nikita Bier** (00:01:28):
The thing that is hard to really understand is it is absolute chaos to keep the thing online. I was sleeping three hours a day for three months. Our team was also relentless though. They would come over to my house, 9:00 AM, stay until midnight and just do that seven days a week.

**Lenny Rachitsky** (00:01:44):
Is there anything else that's just like this is something that is probably going to help you with your app?

**Nikita Bier** (00:01:48):
With certainty, if you're good at your job, you can make an app grow and go viral. Over the years of building all these apps, I've accrued all these growth hacks that still nobody knows about.

**Lenny Rachitsky** (00:02:02):
Today, my guest is Nikita Bier. Nikita has built, launched and helped get more apps to the top of the app store than any human I've ever come across. He sold his first big hit tbh to Facebook for over $30 million. He sold his second big app Gas to Discord for many millions more. He did this all with a tiny team and very little funding. He's also helped dozens of founders and apps, and as an advisor or investor to companies like Flow, Citizen, BeReal, LOCKit and Wealthsimple and many more. Today, he spends his time advising companies on viral growth strategies, design feedback, structuring their product development process and a lot more.

**Nikita Bier** (00:03:26):
Thanks for having me. I'm excited to dive in. I feel honored to be on a product management podcast for a person who doesn't believe product management is real.

**Lenny Rachitsky** (00:03:38):
We're already getting into the hot takes. We're definitely going to chat about... Wait, and you said not real. Okay, I thought you were going to say not useful. This is good. Let's put a pin in that. I think we think this, I think everyone already feels this. I think this is going to be a very special conversation. I've been looking forward to chatting you for a long time and there's so much that I want to ask you. The way that I'm thinking we frame this conversation is we go through the story behind the apps that you've built or helped build that have hit the top of the app store, and basically here, the inside story of what it took to build those apps and to make them successful. Then through that, try to extract as many lessons as we can about what it takes to build a successful viral consumer app these days. How does that sound to you?

**Nikita Bier** (00:04:22):
Sounds amazing, and a lot of it was luck, but a lot of it was very, very tactical work that went into it all.

**Lenny Rachitsky** (00:04:32):
**Nikita Bier** (00:06:36):
When I was in college, I was really interested in this kind of thing that American voters do, which is they vote against their own financial self-interest, like people in New York and San Francisco vote for Democrats for higher taxes. People in Kansas vote for Republicans for low taxes and they make less money, and so fewer government benefits. I wanted to build this tool that would help communicate the financial impacts of these policy proposals of presidents. I built it in my last year of college and it was just a web app that we put out and it would calculate their tax proposals, the government benefits that they were proposing, and you would enter in your basic personal information, how many kids you have, your age. Then it would just tell you in dollars what the impact would be. It'd also tell you, we simulated those policies also against the tax returns of every zip code so you could see how it impacts your community.

**Nikita Bier** (00:07:40):
We went super viral. I think very few people thought of politics that way and I think we got 4 million users on it during that season, during that election. It was just like a project that we raised some grant money for, but it ended up feeding into this company that we spun up and that was called Outline. Because we had a bunch of governments reach out to us asking, "Can you build this for our budget?" The governor of Massachusetts actually reached out and I flew out there to meet with them and that was going to be our first customer. We raised some money, we won a government contract and we joined Techstars, the accelerator. We got a contract in the pipeline with the Obama administration and then we got this contract and we started building it and the government shutdown happened in the middle of like, as we were building it and we had one of our contracts canceled.

**Nikita Bier** (00:08:51):
I realized I actually really don't like selling software to governments and my core competency all along was making things that go viral on the internet. That was what we had built, not this policy simulation tool. We went to our investors and we said, "Look, this isn't actually what we're excited about doing anymore." We offered to give the money back and said, "We're going to be building consumer apps and here's a few ideas that we have." None of them took the money back. Then we spent the next four or five years building a variety of different kind of consumer apps. We had a few mild successes during the course of those four to five years. One of them was an app called Five Labs that ingested your Facebook posts and determine your personality based on the language you use. It used this exact same model that Cambridge Analytica used, and that was super viral. I think we had tens of millions of profiles in it and it went viral in like three days.

**Nikita Bier** (00:10:09):
We raised some more money based off the success of that and we started focusing a lot more on mobile after that first app, Five Labs. We launched basically every type of app you can imagine. We launched mapping apps, chat apps, event meetup apps. Basically, every consumer app on mobile that you could think of. That actually helped us build a muscle to understand what people want and how to actually make things grow and how to test them. Over time, we started focusing more on teens. A lot of people ask why Silicon Valley is so fixated on building apps for teens.

**Nikita Bier** (00:10:55):
One of the reasons is their habits are pretty malleable. As we get older, we get fixed into our habits of using certain communication products and we don't really adopt new things. Then the other thing that we discovered was that adults don't really invite people to new apps. We found that as a user got older from age 13 to 18, the number of people that they invite to an app just declines almost exponentially. Finally, and the most important thing is they see each other every day, and that is so critical. Consumer app developers sometimes say smokers are great for targeting an audience because they actually hang out serendipitously a lot outside of buildings. Not to say social apps are cigarettes, I don't really like that metaphor.

**Lenny Rachitsky** (00:11:50):
Just on the note of you talking about why teens are important, I have this quote actually from you that I love where building on the point you made that for every social app I've ever built and the number of invitations sent per user drops 20% for every additional year of age from 13 to 18. If you build for adults, expect to acquire every user with ads, and I love that you have a very clear heuristic of per year, the amount of people they invite to the app is 20% lower.

**Nikita Bier** (00:12:18):
If your users aren't inviting people to your app, you're going to have to find another way to acquire them, and that most likely means ads. If you're targeting older cohorts like adults, you're going to have to raise a huge amount of venture capital to finance that user acquisition pipeline and it's going to be extraordinarily expensive. As a seed stage up, it's going to be basically impossible to grow that user base, especially to get density if you need actual network effects among users.

**Lenny Rachitsky** (00:12:56):
Basically, you're building this help me decide who to vote for app that turned into a real business with government contracts coming to you trying to help you, pushing you to build something that you end up realizing I don't want to be doing this. Why am I building this app selling government contracts. What you did is you, and this is a really interesting lesson to take away, is you just realized, I don't want to be doing this. Investors don't force me to be working on this. I'm going to stop this. I'm going to go work on some other stuff that I'm actually excited about that I think has a bigger chance of success. That's where you transition to this startup studio where you're just trying a bunch of apps and I think it was called Midnight Labs, you said, something like that, right?

**Nikita Bier** (00:13:34):
Yeah.

**Lenny Rachitsky** (00:13:34):
Awesome. Basically, I think that's a really interesting insight of just like if you're working on something you don't enjoy, you can change that, you can pivot, you can tell your investors I want to work on something else. Is there anything there that you want to add along those lines?

**Nikita Bier** (00:13:49):
It was really hard for us to pivot to mobile. I think that was one of the most challenging things for me personally because it was a completely different paradigm. I actually have been building web apps since I was 12 years old. I built a full e-commerce business selling pirated games on the web, and I knew everything about growing a website. As we pivoted to mobile, I had to recalibrate my whole brain on how to do that. Mobile apps have such a low margin for error when it comes to designing them. Because I have this dogmatic view that every tap on a mobile app is a miracle for you as a product developer because users will turn and bounce to their next app very quickly.

**Nikita Bier** (00:14:46):
If you actually sit behind someone and watch them use their phone, they actually switch between apps at a pretty high frequency. Every tap that you get, every single one is so scarce that you should be optimizing everything. I had to change my whole brain when we started pivoting to mobile and building these mobile apps, and it took a lot of failures. 14 of the apps that we launched were basically duds, and then we started fixating on teens and building apps for them. Eventually, we figured out an interesting heuristic for identifying consumer product opportunities that ultimately led us to tbh.

**Lenny Rachitsky** (00:15:27):
You spent four or five years trying a bunch of different ideas. I think people see this headline and we'll get into tbh of just like nine weeks after launch sells for $30 million to Facebook and everyone's like, "Oh, okay, that's amazing. I want that for my life." Nobody knows there's this four or five years of trying, you said 15 different apps before you got there, learning the things that actually work and don't work.

**Nikita Bier** (00:15:49):
We built 15 apps over the course of that pivot to consumer, and we built apps for every single app, map apps, chat apps, to-do lists. We just built every type of consumer app you could possibly think of. Also, we built for every audience too. We built for college students, we built for post-college. It was always very difficult to get the flywheel spinning for anyone after like 22 years old. That was the cutoff of when people just give up on adopting new products. It took us a few years to really internalize that, a lot of failures to realize no one needs another app after that age.

**Lenny Rachitsky** (00:16:44):
The thing that you found there, which is really interesting because most people are building for people older than 22, that's a profound insight you had there. Every consumer app I see is trying to build for adults, and your lesson there is basically if you're trying to do that, you're probably going to need to raise money and spend a lot of money on paid ads.

**Nikita Bier** (00:17:04):
Most likely, you'll never get network effects. There's actually an interesting study many years ago that some academics in Spain did, I think it was in Spain, and they looked at how many people you text per year of your life, and it goes up very quickly from 14 to 18. It peaks around 21, so it's growing. The number of people you text is growing up until about 21, and then it just falls, it collapses, and then it comes back up at end of life. There's a few reasons all this happens, but basically, once you exit college, you reduce the number of contacts, your daily contacts.

**Nikita Bier** (00:17:48):
Once you get married, it's even fewer. Then as you get older and your kids start having kids and you become a grandparent, you start texting again more or you join a retirement home. If you're building a product with network effects that's a communication tool, you want to be on that upward curve of adding connections to your social graph because then the urgency to connect is higher. If you really want to actually innovate at the edges of communication products, you really have to target that cohort that has the highest urgency to communicate, and that's teens.

**Lenny Rachitsky** (00:18:28):
I love that you found these things out, not through just research and not through just thinking, it was through actual trying things over and over and over and trying different audiences, trying different experiences. A lot of people see your advice and they're like, "How does he know?" It's just you've done all these things yourself. You've seen them, you're sitting there watching teens use these apps. I think very few people actually do that, and they just come up with these theories that aren't based in empirical evidence.

**Nikita Bier** (00:18:55):
We got pretty good at building these apps. I think our first mobile app took us about a year, and then our last one took us about two weeks. We also got very good at testing apps. The most important thing that I often instruct teams to do is to develop a reproducible testing process, and that will actually influence the probability of your success more than anything. It's so unpredictable whether a consumer product idea will work. If you actually focus more on your process for taking many shots at bat, that's what actually reduces the risk more than anything. We figured out ways to seed apps into schools. We also, during the course of that company, we figured out how to seed it into affinity groups, hobbyists, things like that. We were on app number 15, a lot of failures during the course of this company, and I remember a lot of our team members were like, "I kind of want to leave. I think this is it for me."

**Nikita Bier** (00:20:08):
One of our key team members actually put in their two weeks' notice. The day before we launched our final app, we were getting kind of low on money. I was tired. I called our lawyer to ask, how do you dissolve a company? I messaged a few mentors saying like, one people that have been through it, and I said, "What are the steps to do this?" Then I had a conversation on the way out with that team member that wanted to leave, and I said, "I understand, but what if the app actually starts charting on the App Store?" He said, "What are the chances of that? You know that's not going to happen." I said, "Sure, okay." We launched this app and it was a polling app, tbh, and it immediately took off in the school that we seeded it into, in Georgia. We picked the one school that had the earliest start date in the United States because we needed to launch as soon as possible, given the state of the company.

**Nikita Bier** (00:21:26):
I think it spread to 40% of the school downloaded it in the first 24 hours and it rapidly spread to the neighboring schools. Suddenly, I was like, "Oh, we might have something here." Servers started crashing and watching it climb the charts. I looked at our numbers and I'm like, "We will be number one in the United States in six days." Then I looked at our Amazon bill and it was like 120,000. I looked at our bank account, it said 150,000. I'm like, "Okay, these two numbers don't really..." I quickly had to put together a funding round and I told my team, "Can you guys just pause for two months and just really focus on this? I think I could probably sell this thing." It turned into a pretty competitive bidding process, actually. There was a really, really great moment where there was one of the acquirers, or one of the bidders was based in LA, had told me to fly down, and they told me to fly down that day.

I got on a plane, went to the airport without a ticket, showed up. When we were rolling out this app, we were doing a state-by-state rollout strategy where every state was geo-fenced. We hadn't launched California until that morning. I arrived at this company, this founders in LA's house, and he said, "Show me the metrics. You guys are like, what? Number four or something?" Since we just launched California, it's a big state. I said, "No, we're actually number one. We're the number one app in the United States." He said, "Show me the metrics." Our CTO, Erik Hazzard, is a published author in mapping. He created an amazing dashboard that could show real-time installs on a map. It was around 4:00 PM and school had just gotten out, so I zoomed in on the block that we were having that meeting, and the entire block was lit up with installs all around us. Then that's what got the ball rolling on a... It was a really, really like, cinematic moment of showing something that you created that literally just took over the entire neighborhood around you.

**Lenny Rachitsky** (00:24:02):
That's insane. That's going to be in the movie of Nikita Bier in the future. A couple of questions here. One, you predicted the chart, you would hit number one. What does it take to hit number one? What is the number you're looking at? Is it some number downloads to get to number one in the App Store?

**Nikita Bier** (00:24:17):
It fluctuates. It used to be like 80 to 100,000 installs, but now you have these companies that are just spending extraordinary amounts on ads and or injecting it into one of their other apps. Between Threads, Temu and all these other apps that are spending on acquisition and all that, some days it's up to 300,000.

**Lenny Rachitsky** (00:24:40):
That's per day?

**Nikita Bier** (00:24:41):
Yeah.

**Lenny Rachitsky** (00:24:42):
Oh, man. Amazing.

**Nikita Bier** (00:24:43):
At the peak of tbh, we were getting 360,000 per day.

**Lenny Rachitsky** (00:24:50):
The other two things I want to spend a little time on here before we move on to the next app is, what was the insight that helped you come up with this is a big idea that we should try? Then what was the insight into how to spread this so virally? I know that one is really close.

**Lenny Rachitsky** (00:25:00):
... to how to spread this so virally, and I know that one is really clever.

**Nikita Bier** (00:25:04):
After building all these apps, we had these kind of lingering users that stuck around and would share feedback with us on our next app. And so there were a couple, like there's a senior in high school that I would send screenshots of our products. He told me about this trend called TBH that kids were playing on Snapchat, where they would post an image of a bunch of emojis and it would say like, "I like you. Your smart. Your style is great." And you would just reply to the story with the emoji of what you felt. And I was like, "This is kind of weird. You post this on your story and then people send you feedback." And I'm like, "So teens are looking for this vehicle for disclosure essentially." And I'm like, "That's kind of cool. I wonder if you could make that into an app." We had sketched some things out. As we were sketching things out, I looked on the app store, and the number one app in the United States was an app called Sarahah. It was for sending anonymous messages by adding a link to your Snapchat story.

**Nikita Bier** (00:26:17):
But the thing that was most interesting was the entire app was in Arabic. The number one app in the United States was in Arabic. And that was one of the most strongest signal that you could ever have that people want something. And so when I meet with founders, I often tell them like, "The way you should be searching for product ideas is this concept of latent demand where people are trying to obtain a particular value and going through a very distortive process to obtain that value." And if you can actually crystallize what their motivation is and build a product around and clear up what they're trying to actually do, you can have this kind of intense adoption.

**Nikita Bier** (00:27:11):
When we saw what people were doing with Sarahah, I also looked at some of the tweets and comments on it. A lot of people were receiving negative messages. And so what I saw with the game that kids were playing on Snapchat TBH and then Sarahah, I realized just people want to know good things about themselves and that they don't want these bullying messages that they're getting on these anonymous apps, and I was like, "Well, what if instead of actually typing what you wanted to say about somebody, you just answered polls and we authored those polls so that we ensured everything would always be positive?"

**Nikita Bier** (00:27:51):
I mean, in the back of my head, I always knew anonymous apps go viral, but they always lead to these awful news stories of kids committing suicide, self-harm and all that. And so I was like, "I'll never build anything like that." But when we came up with this new mechanic where you could only say positive things through polls, who has the best smile, who's most likely to be president, and then you receive it as anonymous, but your name is selected, what we discovered a couple of things is it made users feel a lot better. It actually solved what they were trying to do and they also sent a much higher volume of messages. And so it was literally explosive adoption.

**Nikita Bier** (00:28:35):
One school I was looking at, they sent 450,000 messages in the first seven days of adopting it. And when you look at day one volume of messages sent on a messaging app, you're lucky if people send three or four or something, but we were sending 60 and we couldn't even handle it, so we had to geofence the app because we needed to scale our servers, which is actually a pretty controversial decision inside of our company, because why would you turn off something that's working? But at my core, I knew if it's working at this many individual schools, we could just relaunch it any time and it'll go viral. So let's regroup and figure out what's happening here and then relaunch.

**Lenny Rachitsky** (00:29:27):
So you keep talking about how went viral and crazy, grew like crazy. I know that there's a little trick that you came up with to help it spread. Can you just briefly talk about what you did there and to help it spread so quickly within a school?

**Nikita Bier** (00:29:37):
I think you're referring to, there's a memo that was leaked to BuzzFeed while I was at Facebook. The main thing we found was like, to be convinced to download an app, you need to see it. You need to see the marketing message three times or so. So you basically need to saturate an area with every kind of marketing you can. So we ran ads targeted at a particular school to when we were seeding and testing these apps. And we also followed people creating a dedicated Instagram account that went to that school, because we learned that high schoolers identify their school in their bio, so it says RHS on their bio. And so that was how we tried to get the entire school to adopt synchronously. We'd follow them and then accept the followbacks.

**Nikita Bier** (00:30:36):
Big misunderstanding though, and I get this DM a lot of people are like, "I'm trying to replicate your strategy. We've just done it at 15 schools and it's not working anymore." This is not the way we grew the app. This is how we tested apps. Really, it's a little bit nuanced there. That's an important nuance because you need to get enough intensity of adoption and density for a social network to start to get the flywheel spinning, but the app should grow by itself after that. And people think we just went from school to school following every kid on it. You can't, that's totally unrealistic. But for the first 100 users, yes, that's how we got them. And that allowed us to know whether the product was working or not. We could get enough people on it and then we could, with conviction, say that whether the app had legs and we wouldn't have this kind of uncertainty like, "Oh, did they add enough friends? Did we get enough people on it? Did they reach the aha moment because you need friends to get on?"

**Nikita Bier** (00:31:41):
So we wanted to eliminate that confounding variable, and so we figured out a way to just get a bunch of people to adopt at once. And that's one thing I encourage a lot of founders to do, is figure out a way to eliminate all those potentially confounding variables so you can know immediately whether something's working or not. You never want to walk away from an experiment or test and say, "Well, maybe the execution was bad because it takes a lot of energy to mobilize a team to test something," and you really want to make sure your tests actually provide signal.

**Lenny Rachitsky** (00:32:18):
So your advice here is when you're testing something, test the best possible version of what that could be, whether it takes manual work or something that is never going to scale, test the ideal. Because that'll tell you, " Even if this could be the best possible version, do people actually care?"

**Nikita Bier** (00:32:34):
Yeah, we would try to get an entire school to adopt, just to know if everyone had 10 friends, would they actually derive value from this app? We also did other things, and I recommend all companies do this, is put live chat customer support in your app 24 hours a day. It sounds insane. It's like the whole point of tech is you don't need to do that. That's the whole point of a software. But then users get this white glove experience, and that eliminates another confounding variable, like did they think their problems were solved or they were treated well? But most of all, one of the reasons I actually recommend people put live chat in their app is it's the best vehicle for getting feedback and doing user research because users will literally tell you the problem they're having. So we had our person that was running this. He's name is Michael Gutierrez. He's done it for all my companies actually. He's the community and customer support rep. He would paste any interesting feedback into Slack and then we would be like, "Oh, this user has a great idea. We should consider turning that into a feature." So you really want your finger on the pulse as you roll these things out so you can get a sense for what's working, what isn't, and also make users feel great and make sure at the end they promote your app positively to their peers.

**Lenny Rachitsky** (00:34:09):
I love that piece of advice.

**Lenny Rachitsky** (00:34:11):
Okay, so to close out the TBH chapter, is there anything else that you think is important for people to know or any other lasting lessons from that part of your journey that you bring with you to new apps that you're building today?

**Nikita Bier** (00:34:25):
I think the thing that is hard to really understand for first-time founders that hit breakout success with a consumer product is how draining and how spread thin you get, because everything breaks. Everything that you built needs to be substituted almost every three days.

**Nikita Bier** (00:34:52):
I can just give you an example. We were just talking about this customer support system that we had. The first system broke after three days. The next one broke seven days later, we had to replace it with a different one that could scale even better. And if you think about that on every dimension of the company, it is absolute chaos to keep the thing online as it scales up. And so you have to be ruthless with prioritization as something scales up and put out the largest fires first, because that was something that I didn't really fully understand, is how many things go wrong. And if we didn't geofence the app, there would be no way we would've been able to keep that thing online because that gave us some slack to control growth.

**Lenny Rachitsky** (00:35:55):
This is a good example of when people ask like, "Hey, does my app have product-market fit?" I think this is an example of this is what it looks like when things are breaking every three days when you have to geofence it to keep it from crashing.

**Nikita Bier** (00:36:06):
A lot of people ask me like, "What's the benchmark for product-market fit?" And this founder that I'm friends with, his name's Roger Dickey, he told me this one time, "If your product's working, you'll know. And if there's any uncertainty, it's not working." And it really is a binary when it comes to consumer products. People are going to be fighting to get into it and you'll find new measures that you've never heard of like, "Our metric was hourly actives per day." Not daily active users, hourly active users. So you'll start seeing that and it'll be abundantly obvious what product-market fit is. You'll know it when you see it is the bottom line.

**Lenny Rachitsky** (00:36:59):
Okay, so you launch TBH, it goes viral, start getting offers from companies. Nine weeks later after launch, you end up selling it to Facebook. What was it like selling your company and then what was it like working at Facebook? Which you worked at for four years. I was not expecting that when I was looking at your LinkedIn. So yeah, what was it like selling? What was it like working at Facebook?

**Nikita Bier** (00:37:22):
Selling your company is one of the most draining processes you could ever go through as a founder. When we met with Facebook, they told me they have 80 people assigned to this deal. And I'm like, I have one person, it's just me. They were like the SWAT team of M&A.

**Nikita Bier** (00:37:45):
The funniest part was they wanted to meet the team as well. And so they came out to our office in Oakland, which is a dingy old office that I got for $1,800 a month. That was our rent for the office. They arrive and they walk in. There's two engineers and one designer and me, and they're just like, "This is the whole company? This is the number one app in the United States?" I'm like, "Yeah, this is it." And when we went there, when we arrived, we joined the youth team, which was about, I don't know, 150 people just for this one division of Facebook. It was my first job effectively that I've ever had.

**Nikita Bier** (00:38:31):
When they told me my title, they said I would be a product manager, I was like, "Okay, I don't know exactly what that is, but yeah, I guess that's what I do." I arrive and then I get access to a workplace system where people post all the things they're working on, and I realized it's kind of like this almost academic environment for social networks, like social network development. It's like the Harvard of social networks. I was reading all these studies that people were doing on like, "Oh, if we change that, this is the impact to retention and DAU." I was so impressed, like, "There's a whole science here."

**Nikita Bier** (00:39:20):
A lot of the stuff that we did was learned from first principles, but then we saw it actually turn into systems and processes here. But the thing I didn't realize as a product manager in a large tech company is there is very little product management that you do. You're actually not as involved in the product as I had assumed. I thought, "Oh, you're the person who gets in the pixels and designs the flows." Absolutely not. You're completely detached from the design process. There's a design vertical org that does all that and they don't really want you working on that. So that was very difficult for me because when people ask me like, "What do you think you're good at?" At the core, I'm a designer. I don't consider myself a product manager. I'm great at growing things, looking at mixed panel and then designing the things that make it grow. But there's a rift between those two things inside of a large tech company.

**Nikita Bier** (00:40:27):
And so I loved the academic approach to growing, but it was really hard for me personally as I became disconnected from the design process. I think that a lot of my skills atrophied over those four years. But I did stick around. I went through multiple orgs. Favorite one at the end was new product experimentation where I worked with other founders, a bunch of legends in Silicon Valley, building zero to one products, standalone apps. I mean, I was building standalone apps my entire time at Facebook. I think I built probably eight apps while I was at Facebook.

**Lenny Rachitsky** (00:41:11):
Wow.

**Nikita Bier** (00:41:12):
But it is much, much more difficult to build apps at a large company. A lot of the insights that you have are not things that you can necessarily present or put in writing in a VP meeting, like, " We're building an app for teens to flirt." That probably is not what you would present to a bunch of McKinsey consultants at. So I think that makes it really difficult to be completely intellectually honest about what you're building. And when the team isn't honest about it, then it's really hard to iterate toward the right thing in that context. Having said that, there's a lot of things you don't have to deal with as a product... I don't have to deal think about money, I don't have to think about paying legal bills or doing finance and accounting. So all that's abstracted away, but there is regulatory stuff that you have to deal with that I had zero exposure to as a founder of a small company.

**Lenny Rachitsky** (00:42:20):
An insight you're sharing there potentially is the reason a company like Facebook isn't amazing at launching completely new product, zero to one stuff, is they might be a little too risk averse and it's hard to talk about stuff that people actually really, really want deeply. Is that kind of the sense there?

**Nikita Bier** (00:42:37):
It's hard to really verbalize some of the things that motivate us as people. There's a tweet I put out that's kind of dogmatic in terms of how I view why people download apps and it's very simple. It's like people download apps to make or save money. Examples of that might be like WhatsApp, where free texting. And then the other reason is to find a mate, so maybe like Tinder or Snapchat, find love. And the third is to unplug from reality maybe like Netflix or Fortnite. There's a bunch of other kind of subcategories that are very utilitarian like movement, Uber or Airbnb, like shelter. And so I think putting that in a framing document and the particular nuanced reason why people are going to adopt is difficult when you're presenting that to people that are seasoned professionals and care about how something might reflect on them personally.

**Nikita Bier** (00:43:51):
And so that's really difficult inside of a large company. You'd certainly have distribution advantages. If you want to just inject your app into one of the parent apps and get density within a community, you could do that. But that part I think is probably solvable for a startup if you just want to pay for ads. Getting your app into a dense friend graph is overall trivial. As a founder, you should be able to pull it off after enough tries. So that advantage that a big company brings, I mean it makes it easier, but it's not something that I think is something that a founder can't solve for themselves.

**Lenny Rachitsky** (00:44:38):
So an interesting takeaway it sounds like is many people feel like, "I'm going to build a social app." They probably often hear, "Facebook's going to do that. Instagram's going to copy you. Snap's going to do that." And what I'm hearing here is it's not as easy as many people think, that it might be actually a lot harder for them to try something.

**Nikita Bier** (00:44:54):
It's not only harder for them to identify these opportunities and to verbalize it internally and align the company around it. It's also hard to respond to signals in the market. A lot of people think these incumbents are going to steal your ideas. And for the most part, it takes a pretty long time for them to respond to even the number one app or charting in the app because it'll start charting in the app store, a PM will make a post about it. And then the market's strategy or market research team might do a study to follow up on it. It'll kind of float around for a few months. They might put together a framing deck saying, "Hey, we should go after this opportunity. Let's put together this team. It'll go through VP reviews. And then it'll start development. Development might take six to 12 months." Realistically, I think most companies, large companies take 12 to 24 months to respond to competitive threats in the market.

**Lenny Rachitsky** (00:46:03):
Do you think this is solvable? Is there something a company can change to get better at this? Are there companies that are good at this in your experience, or is this just as you grow, this is just what happens?

**Nikita Bier** (00:46:13):
The incentives within large companies make this very difficult, because you don't want to present something that you have a hunch about being a good idea because if there's not market signals already, then it's hard to defend. People in companies are focused on getting their yearly bonus or they're focused on their performance reviews. It's hard to show up into a framing meeting saying like... And a framing meeting is a meeting where you are positioning the opportunity and everything, "Here's what we should go after." It's hard to just say, "Okay, by first principles, this is a good idea and here's some very vague market signals." In reality, you need to walk in and say, "Here's the number one app in the United States and we don't own it." If you present something like that, that's pretty defensible if you fail because there was market evidence. But if you fail about something that's more based on kind of vague abstract...

**Nikita Bier** (00:47:19):
So you have to, generally, the only path is to copy existing products if you want to really get momentum inside of a large organization. And for completely new concepts, it's I think very difficult to present a lot of those ideas, either to verbalize them into a document or to even get rally the organization around it.

**Lenny Rachitsky** (00:47:42):
That's a really interesting insight.

**Nikita Bier** (00:49:14):
The functional organization structure of big tech has kind of separated product managers from the product development process in many ways. They're not looking at data because data scientists are doing that. They're just parsing some of the reports that they get back. They're mainly just writing documents and then kind of being the team secretary and running around, getting approvals from each cross-functional team, legal privacy, everything like that. And yeah, you're actually very much separated from the product itself. And so I think what Snapchat has done, and I think Apple too, to the same extent, is that designers run the show. And I think that's led to some very novel-

**Nikita Bier** (00:50:00):
And I think that's led to some very novel products coming out from both of those companies. But I mean that is its own host of problems because actually rolling out a product inside of a large organization, it requires a sheer force of will because it's a lot of work. I mean, there's a lot of regulatory scrutiny, scaling it up. You do need someone to project manage. And so I don't know if it's the silver bullet as to give designers the reign to run the show, but I also don't think the current traditional like Google, Facebook style of being team secretaries is also the best solution.

**Lenny Rachitsky** (00:50:44):
To defend product managers, I think many product managers spend a lot of time in design, spend a lot of time with data science. I think probably what you saw is like the extreme big, big, big tech version of product management. I know even PMs at Facebook can if they want to spend time with design. I think it's just obviously very different from a startup world where you're just, that's all you're doing.

**Nikita Bier** (00:51:05):
Yeah, it's certainly an exaggerated view, but it's particularly relevant I think for all the zero to one initiatives because if you're a product manager on a standalone app inside of a large, like you should be designing the hierarchy, the pixels, the flows, everything. And then yeah, it should be cleaned up prototype by a technical designer, but that's your idea. And products live and die in the pixels, like consumer products, so that's on you. And that's where I think for maybe larger growth initiatives, yes, you can be a little more detached from the pixels.

**Lenny Rachitsky** (00:51:43):
I love that advice. Okay, before we move on to the next phase of your journey of starting Gas, I heard there's an interesting story around where you were actually put within the Facebook office physically, where your team was put. Is there something there?

**Nikita Bier** (00:51:57):
Yeah. When we joined the new product experimentation group, we were actually seated I think at basically the same desk as Mark Zuckerberg. And that was pretty cool to see how the machine runs from Zuck's view. But we had a few artifacts that we had kept with us from our old office when we were running tbh, and one of them was this kind of pop art painting that I bought on the street when I needed to get something on the walls for our office. And it was this giant painting of Tim Cook. We had been carrying it between our orgs at Facebook just because it was a funny painting. And I kind of got it because it was kind of symbolic of who actually controls our destiny, is Apple. And so when we relocated to the area where Zuck was sitting, I put up the painting on the wall and it was basically a giant painting of Tim Cook was overlooking Zuck. And eventually one of the EAs there said, "Actually, do you think you could take that home?" And it kind of made sense because you can't really have a painting of another big tech executive overlooking us.

**Lenny Rachitsky** (00:53:20):
What does it look like? Do you happen to have it?

**Nikita Bier** (00:53:22):
Yeah, I actually do. Let me go grab it.

**Lenny Rachitsky** (00:53:26):
Amazing. Oh, wow. That's artistic. So that's Tim Cook. What is the idea there that he's peeking through this darkness staring at you?

**Nikita Bier** (00:53:36):
Yeah, yeah. He's the real boss of all of us.

**Lenny Rachitsky** (00:53:41):
I could see why Zuck would not want that staring at him all day. That's amazing. And I like that you still have that with you.

**Nikita Bier** (00:53:49):
Yeah. One of the artifacts of that chapter of life. So good.

**Lenny Rachitsky** (00:53:54):
Okay. So that was your Facebook journey, those four years. That's wild. You left Facebook. At some point, you started, I remember this, you started tweeting like, "Hey, I'm working on new app." Everyone was going nuts. "What are you working on?" And at this point, I think you probably in your mind thought, I am this one-hit wonder, I haven't shown that I can do this again and again. And so I think you probably have this motivation. Maybe talk about that, just like this drive of like, hey, I want to do this again. Is that where your mind was at?

**Nikita Bier** (00:54:19):
When that meme started, my intent was to start a venture-backed company and build something that would scale to be a big team and this durable thing that lasted many years and everything. And so I just made post that I was leaving Facebook and looking for some teammates. And I shared a couple of ideas with some people privately and there were some really crazy ideas that I shared. I'm not going to get into them, but then people started posting, "Oh my God, I just saw Nikita's app. It's crazy." And what happened was others saw that and then they started memeing it and it became this massive meme where they're like, "Oh, I just tried Nikita's app, it saved my marriage. Oh, I just quit drinking. My kids returned home after all these like," and it turned into this massive meme. And at the time, I didn't even have an app or anything. I wasn't even planning to launch it. It wasn't even an app, some of the ideas I was looking at. And so it just turned into this viral moment. I wasn't even committed to starting another company at that point. This was an exploration process.

**Nikita Bier** (00:55:48):
But what happened was the market had crashed shortly thereafter, there was kind of the end of the Zerb era. The Fed started hiking rates. I think my portfolio was down like 30% or something and I was like, "Damn, this sucks. Maybe I should think about how to make money today." That's the reason we're in startups is to make money. And so there was always in the back of my head this question that I had, which was what if we had monetized tbh? Because the number one support message we received was can I pay to reveal who sent me polls? It was the number one question. And it was like, would it have made even more than the acquisition if we just monetized it? And I'm like, we could probably build this pretty fast, like probably in a month, month or two. Ended up being a lot longer, but we started rebuilding it. It was a new team. It was one of the engineers from a company called Paparazzi. His name's Zay Turner, and he started building it in my house and we had tested it to see would this new version of tbh actually resonate with kids five years later? That was actually the thing I wanted to know most of all was like would an anonymous polling app actually still be relevant five years later? And so we dropped it into the school just the same way I've always done it in-

**Lenny Rachitsky** (00:57:36):
Was it the Georgia School again?

**Nikita Bier** (00:57:38):
Yes, actually. We launched at the exact same school that we launched tbh on the exact same day five years later, in fact. And people sent a lot of messages, but it wasn't growing. So let me pedal back here a bit. So tbh grew through variety of things, people sharing their messages to Snapchat and text invites, and that was 2017. And the way you invited your friends on tbh was that you tap their name, your contact name, and there was a button that said Invite and then we used Twilio to send them a text message. And the regulatory environment actually had changed a lot over those five years. You really can't send texts from a server anymore. It has to be sent from the user's device. And just the point of clarification is a lot of people clone tbh over the years and they think that when you voted on people in the polls, it sent them a text. We never did that. That's egregiously illegal to do and also unethical at a user experience level to send texts when people don't even know what's happening.

**Nikita Bier** (00:58:57):
But anyway, we couldn't send texts over Twilio anymore, and that led to people not sending as many invites when we created Gas because they had to pop the Compose window and hit Send. They're going to just tap Invite on five names. So we actually had to reinvent all the growth systems and it took about I think like nine launches including renaming the app, including features that just never existed on tbh. So it was actually just in many ways like yeah, the concept on the surface was the same, but it was very much a zero to one development cycle of figuring out how to grow this thing again in this climate.

**Lenny Rachitsky** (00:59:47):
I know that point is really important to you. I think a lot of people are like Nikita just sold the same app twice. What a guy. And the point you're making here is not only was the infrastructure completely different, the team was different, you had to rethink the entire flywheel of how it worked and how it grew.

**Nikita Bier** (01:00:05):
Yeah. And there were so many layers of like we validated one thing and then the next thing we got stuck on. Like, okay, people send a lot of messages. Cool, great. The next thing was will it spread within a school? That took us a while to get right. Will it hop schools? Each of those was a very, very challenging problem in light of the new climate that we were operating in. And I always do things by the book when it comes to operating legally within the compliance framework. And that's something when I meet founders and they tell me some growth thing that they're doing, and I'm like, "You can't do that. That's going to cause way more trouble down the line. It's going to burn users too." And so we always wanted to make it abundantly clear how our growth system, how you are inviting friends and all that. You can kind of go on a whole diatribe on that because the thing that I see a lot of founders do is they in the background use user data in ways that it shouldn't be used. They invite people on your behalf and all that.

**Nikita Bier** (01:01:21):
And I have this kind of crazy view that the internet is this living and breathing thing. There's Wikipedia article called the Gaia Hypothesis, which is about biology. And it's basically like the earth is kind of living and breathing and can respond to threats. Okay? And when you enter the rainforest too deep, Ebola virus will be released. Okay? So I think the internet operates on a similar paradigm here where if you do the wrong thing by users, the internet will come back and get even and defend itself. And so whenever I design products, I try to do right by users because it'll always come back much worse and I think you should always operate above board with how you design your growth systems. And with Gas, we had to do things the right way and we had to figure out at each particular moment or problem that we solve, will it spread within schools? Will it hop schools? Will people pay for it? All of these things was a whole reinvention of the original product.

**Lenny Rachitsky** (01:02:36):
I love that you shared that because I think a lot of people see you from the outside and they think you're doing all kinds of these skeezy growth hacks and making teens do things that aren't really mentally healthy for them. But it's clear that that's the opposite of how you think about it, that you're trying to stay very positive, like you only allow positive communication. You do things that as you just said, are going to be good long-term, the internet's not going to come and try to shut you down.

**Nikita Bier** (01:03:00):
The point you bring up here about wanting to build a positive thing, some people, sometimes I get criticism. It's not actually that often, but they say, "Oh, you're building an app that makes teens feeling insecure or anything." But with Gas, I think we received a message every single day from a user telling us that they reconsidered suicide or other forms of self-harm. The app sent you positive messages and affirmations. It made teens feel really good. And I think that is lost on a lot of people. Instagram can make you feel jealousy and a lot of other social networks are a mixed bag in terms of impact. But we were entirely focused on making teens feel better.

**Nikita Bier** (01:03:49):
And some people might say, "Oh, what if someone doesn't get voted for something?" We actually built a system to ensure everyone got a vote. And what we did was we put your name in polls at a higher frequency if you weren't being voted on recently. So we wanted to spread the love in every way possible, and that's what really motivated me to grow this thing was watching how it was impacting 10 million kids in such a short period of time.

**Lenny Rachitsky** (01:04:20):
I really appreciate you adding that. I didn't know all those things about the way you thought about these apps. Interestingly, I don't know how much you can go into this, but there is a lot of stuff going on with Gas around human trafficking and all this stuff where people thought people were being kidnapped through Gas, which is yeah, talk about that whatever you can because that's pretty crazy.

**Nikita Bier** (01:04:41):
We had this hoax started where people were saying the app was used for human trafficking. And I was like, "This is so strange." This is a anonymous polling app without messaging and the only thing you could do is send compliments to your friends. And I researched into it and I saw that this is actually plaguing a lot of apps and any app that has gone viral in any way has actually had this hoax started. And part of the reason it happens is it gets you attention if you say that about an app. As a teenager, if you say, "Oh, this app is dangerous," and then you get a bunch of followers and who doesn't love followers? So it's actually a really viral piece of content if you put it out. And so we had this hoax started and we were like, "This could kill the company." And I talked to a bunch of founders that it happened to them and they said, "Yeah, we had to shut down because of that."

**Lenny Rachitsky** (01:05:40):
Wow.

**Nikita Bier** (01:05:40):
And I was like, "Is this it? Is this the end of the company?" And I remember it hit number one when we started getting a few of these reports in our support channels. And I was like, "I'm just going to plant the flag on posts that we hit number one in the App Store because this thing's probably going to shut down soon." So I make this announcement on Twitter, "I just made the number one app and I thought it would just be dead in a week." And then I just had this sudden burst of energy and I was like, "I'm going to win. I'm going to fight this. This is not true. It makes no sense at all."

**Nikita Bier** (01:06:20):
And so we fought it at every vector possible, this completely made up hoax. We met with journalists, reporters to make sure that the number one match every time you search Gas app human trafficking was Gas app is not for human trafficking. And so that ended up being The Washington Post headline. We insisted that that be the headline if we do the interview. So that was the first thing that showed up on Google anytime someone searched it. There were schools and even a police station that posted that this app is used for human trafficking. I called those superintendents, I called those police chiefs and have got them to publicly retract it. And we had some of the reviews on the App Store. We asked Apple to remove them because we got review bombed.

**Nikita Bier** (01:07:07):
But the thing that actually was the most impactful was my girlfriend made a video, a TikTok video explaining that it's not true. And anytime someone deleted their account, they could watch this video explaining it's not true. And at the peak, we had 3% of users deleting their accounts per day. So it was like a catastrophe for an app and we got it down to 0.1% through relentless, relentless effort. And it was really just an unusual thing that happens when you grow really fast is this human trafficking hoax that starts. And you don't understand how crazy it is until it happens to your company, but it was kind of hilarious to think about. This app was the most harmless benign thing you could think of.

**Lenny Rachitsky** (01:08:01):
This is insane. I did not know this full story. And you were doing all this while you were trying to scale the app and trying to keep the servers up and try to grow it, right? What was that like to try to manage all these things at once?

**Nikita Bier** (01:08:13):
I was sleeping three hours a day for three months. It was extraordinarily difficult to do it all. Our team was also relentless though. They would come over to my house 9:00 a.m. stay until midnight and just do that seven days a week. So yeah, it was definitely one of the most physically draining things ever, but we were just so tactical. I remember investors were asking to meet with us and I said, "If you can't get a celebrity to post that this isn't true, then we're not interested." But yeah, we went after it on every vector and it ended up being okay.

**Lenny Rachitsky** (01:08:59):
I love how you took your brain to this other completely different problem and thought about all the levers you could use to change the conversation around the app.

**Nikita Bier** (01:09:09):
Yeah. I remember we had these TikTok videos that were made that were saying it was true and I networked my way all the way to the CEO of TikTok and I said, "Can you delete these?" And we got this information deleted. Yeah, so it was really a whole new test of our team's capacities was fighting. The key thing that you have to know though when you have a hoax spreading about your app is you really have to make sure the hoax is less viral than your app. And at a few points, the hoax was more viral than our app and we had to take this-

**Lenny Rachitsky** (01:09:49):
The K-factor of the hoax.

**Nikita Bier** (01:09:51):
Yeah.

**Lenny Rachitsky** (01:09:51):
That's absurd. Okay. So broadly, you built this app. Again, a big success. I saw a stat that you made $11 million in sales through the app, 10 million downloads. Is that right?

**Nikita Bier** (01:10:03):
Yeah. It was a blowout success in terms of like it grew bigger than tbh. We monetized it. We ran almost entirely on startup credits, so it was basically-

**Lenny Rachitsky** (01:10:17):
Like Cloud Credits? Like AWS Credits?

**Nikita Bier** (01:10:20):
Yeah. AWS Credits, Mixpanel. I remember when I saw the early data, I'm like, "Okay, now it's time for me to negotiate every bill down to the last cent of margin for every vendor." And I got credits everywhere, and so we really were tactical with that. And so we ended up being all just pure cashflow for the team. We had no investors. And it was just so interesting though that the way that I started posting about it on Twitter was it kind of captured the zeitgeist of the internet. And we didn't intend on selling it. We were just going to let this thing run its course and just be this app that kind of lives in the background of our lives. But once it started capturing the zeitgeist of Twitter, I was like, "Wait a minute, we could probably sell this thing." And that's when we started engaging with some of these, we ended up getting three companies that wanted to buy it. I won't be able to say them, but ultimately we ended up selling to Discord and we joined Discord.

**Lenny Rachitsky** (01:11:29):
Awesome. So before we move on to the next part of the journey and some of the other insights that I want to get into, is there any lasting lessons that you took away from Gas as a product that you take with you to advising startups in terms of building the product design? I know there's many, but any that stand out most that you think are really interesting to share?

**Nikita Bier** (01:11:50):
I think I kind of touched on this before, which was trying to validate things in a sequence of like, will people use the core flow? Will people spread it within their peer group? Will it hop peer groups? And what I think the most important thing that I learned is that's actually a really great way to do zero to one product development is execute at 100% for the thing you're trying to validate at that specific stage of the product development cycle. And then you can kind of half-ass the rest just so you can get 100% signal on that one part.

**Nikita Bier** (01:12:25):
And so we made the polling experience just perfect. The questions were great. Push notifications, everything worked. And then the next stage was getting sharing and virality working. And so compartmentalizing those things because ultimately you'll have too much scope creep if you try to solve everything at once and validate. And also you're not going to get signal too, like you're trying to test one thing at a time. So the way that now I approach a lot of consumer product development is if this is true, then what next needs to be true for this thing to work out? And these layers of conditional statements. And the more layers you have, the higher risk your product is, so you should try to condense it to about like four things that must be true for the thing to work.

**Lenny Rachitsky** (01:13:06):
And this comes back to your advice of the thing you need to get good at is testing and learning and making it really quick.

**Nikita Bier** (01:13:13):
Yeah.

**Lenny Rachitsky** (01:13:13):
Okay. Maybe one last thing along this thread. I'm just really curious how this hoax came to be, like who's behind it? How does this happen?

**Nikita Bier** (01:13:20):
We got a original support message, which was a screenshot of a story on Snapchat and it said, "Do not download the Gas app. It's for human trafficking." Okay? And it was a screenshot that had like that mirror effect where you have like 10 people that screenshotted it. More, like 40 people because it had all the usernames. So I was looking at this and I'm like, "How many people have seen this?" And it looked like a viral thing on Snapchat. And then I went to the App Store page and I saw a review that said this app is for human trafficking. And I went to my team and I said, "This will probably kill the company. This will kill the product. I've seen this before with consumer apps and it's evident to me this is going to be 10 times bigger tomorrow." And they were like, "No. It's just one message. What do you mean?" I'm like, "No, no, it's been screenshotted 40 times and now it's on the App Store page." And we got another message four hours later.

**Nikita Bier** (01:14:35):
And the next day, it was our entire App Store page was just covered with reviews saying that the app's for human trafficking. And we actually had to rebrand the app. We relaunched it once and we're like, "Let's just call it something different. Just relaunch it on the other side of the country." We did that, started going viral again. And the craziest-

**Nikita Bier** (01:15:00):
... again. And the craziest thing was it re-emerged and what happened was one user was friends with another person in another state and they got an invitation. And that user told them, "Oh, that was in my state. It's actually for human trafficking." And then it just completely started again and then it was too late at that point to relaunch again. We just realized, " We got to fight this thing." And ultimately, I don't think we'll ever know the true origin, but it was definitely a living, breathing like hoax.

**Lenny Rachitsky** (01:15:46):
That is insane. The story just gets more and more interesting. What were some of the previous names, by the way? Is that something you can share?

**Nikita Bier** (01:15:52):
Yeah, we went through a bunch. One of them was called Crush, one of them was called Melt, and another was... The interesting thing about Crush is we got a great domain. We thought this would be the name. This was between some of the re-brands. We tested it and we saw that invitations dropped significantly under the Crush name and we were like, "What's going on here?" And we found that actually when you invite someone to an app, regardless of the app, you generally... Boys invite boys, girls invite girls to apps. And boys didn't want to invite their friends to an app called Crush with a pink icon.

**Nikita Bier** (01:16:35):
And then we looked at the data and the app. I mean this was true TBH too, which was the app indexed about 60 to 65% women. So we were just like, "Let's make the app more masculine and see what happens. We need balance on this." So we made the icon black with a flame, called it Gas and the invites rate jumped. And you think a name doesn't matter, but right at the moment of sending an invite... So that was one of the interesting insights on the naming process.

**Lenny Rachitsky** (01:17:07):
Man, there's just endless stories that we could keep getting into, but we've also gone very long, so I'm going to try to move on to another topic. So I ask people on Twitter what to ask you? Just that question got a thousand likes just me asking, "What should I ask Nikita?" And the most common question, I'm sure you get this a lot, is just people wondering, do you ever want to build a durable consumer app? Is it possible to build a durable consumer app?

**Lenny Rachitsky** (01:17:30):
Scott Belsky asked this, Robert at Figma asked this, and Scott actually had a really nice way of describing it about why are so many quick sensation consumer apps proving to be more akin to summer songs than enduring standalone products and businesses? So there's kind of two questions here. One is, do you aim to build a durable consumer app? And two, how possible is it?

**Nikita Bier** (01:17:54):
A lot of the fundamental tools for communicating with our friends either messaging or broadcasting one-to-many like on stories or the incumbents have built pretty large motes in terms of network effects and to provide true an order of magnitude better experience is non-trivial because they've been actually improving these products so much over the years and there's not that many entry points.

**Nikita Bier** (01:18:31):
Not to say that it's not impossible. Snapchat was showed that there was style of messaging that people wanted that the incumbents weren't serving. But I think there's these kind of edges that you can go after with a much higher probability of success and they might not actually be something that's durable necessarily. And I think finding durability for a communication or social product, that's a black swan event. Retention for consumer social is there's a tremendous amount of randomness. There's one every decade. If it was simple, I would just be printing $1 trillion companies.

**Nikita Bier** (01:19:15):
I be printing Facebook's every time I sat down. But I think it's actually a lot of it is pure randomness. On the other hand, growing a product can be a science. With certainty, if you're good at your job, you can make an app grow and go viral. Now why haven't I tried to take the viral part and build something that has been durable or long-lasting? I'll tell you a little bit about my motivations. My favorite part about product development is you make this thing through the night. You build it and you watch it take over the internet.

**Nikita Bier** (01:19:54):
That is the most thrilling drug I think you could ever experience. And just watching it spread all over the country is like you drop an app in the deep south in Georgia and then you look on your analytics dashboard and 40% of the high school down your street in Los Angeles has downloaded it one week later. That's a really profound feeling. It's crazy to have that sort of impact as a three-person team, and I live for that.

**Nikita Bier** (01:20:26):
When I joined Facebook, here's an interesting connection. So I joined Facebook and I saw that many of my peers were looking up to VPs and they're like, "That's what I want to make it to one day. I want to run a large organization. I want to have lots of reports." And then I met with VPs and they were actually jealous of me because my quality of life was actually pretty cool. I got to build something high impact that made many teens feel better about themselves, made a decent amount of money. And then I wasn't in charge of this becoming a people manager that has to run this large organization for many years.

**Nikita Bier** (01:21:11):
I think one day I will run maybe a venture scale business, but I will say that I kind of like the way that I've been doing things so far in terms of quality of life and being fun. Financially, it's been great. So I think that part is what motivates me. And yeah, I don't think running a large corporation is necessarily what I described as fun.

**Lenny Rachitsky** (01:21:40):
That's amazing, man. I am really happy we went here. So much of this resonates with the way I think. And obviously, a big part of this is also just it's very hard, as you said, to build a consumer app that grows first of all. Second, that actually lasts. But that is interesting that you do hope to one day build a venture funded business.

**Nikita Bier** (01:22:03):
I mean TBH was venture backed, but I just don't... I think I'm going to have to... Do I want to sign up for 10 years? And if you actually look at some of the numbers on the actual proceeds that some of these founders get after an IPO, after seven rounds of dilution, a lot of them are pretty comparable to what we get from our apps for 90 days of work. So yeah, the trade-offs there are pretty faithful.

**Lenny Rachitsky** (01:22:36):
Actually, just on that note, so what would make you actually decide to go venture funded? You talked about how if you're going more mainstream, non-teens folks after 22 years old, is that why you would go that route?

**Nikita Bier** (01:22:47):
I don't think that it's necessarily that part. I think if I could keep the team lean and scale up... I think there's some actual founders that actually operate very lean teams and have reached very large scale in terms of the valuations of the company. Actually the most iconic example is Elon Musk. His teams are actually pretty thin overall and he's in the weeds doing product development. And so I think, yeah, if I was to ever do it, I would do it under very specific set of operating principles versus turning it into a big tech company.

**Lenny Rachitsky** (01:23:34):
Queue investor is emailing you right now with term sheets. Okay. Nikita, this has been amazing. There's one last segment I want to spend a little time on, which is just kind of a rapid fire of pieces of advice you've shared that I think is incredibly insightful about how to build a successful consumer app. And so I'm thinking I'll just go through three to five and see what you think and see what you can add to the advice. How does that sound?

**Nikita Bier** (01:23:59):
Sounds great.

**Lenny Rachitsky** (01:24:00):
Okay, cool. So the first is just contact permissions in iOS 18 changes the game and how people can grow apps basically makes it harder to invite your friends. Thoughts on how people should be thinking about this in their products.

**Nikita Bier** (01:24:15):
When I first saw it, I was really concerned.

**Lenny Rachitsky** (01:24:19):
I saw your tweet about it. You're like, "That's the end. Game over."

**Nikita Bier** (01:24:23):
Just let me frame things up for you. The contact permissions screen, you average about 65% approval rate across all apps. It's higher for teens, lower for adults, but if you have a 65% consenting to contacts access, then the next step on this new iOS 18 change is you select which contacts you want to allow the app to access. And it's an alphabetical list. And that alphabetical list for me, I have 550 contacts or something.

**Nikita Bier** (01:24:55):
The first 10 contacts are punctuation symbols from whatever dirty entry I put when I was driving or something. So you have to scroll down and find that name. So I have to find Lenny. I have to add you. And what if you're not an app user? So I just added you or three others. Assuming users are willing to even do that. You and then the three others never sign up, but maybe three of your friends do.

**Nikita Bier** (01:25:24):
But I never get connected to them because there's no over... So my expectation is it's going to be very difficult to find friends on apps going forward to invite friends on apps going forward. And that founders will need to rethink how they do it. And of the companies, I'm working with on intro, we are looking at ways to reinvent what contact sync is or what purpose it served. It's not promising, but we have some good leads and I think we'll have a whole new set of apps emerging as a consequence. But if you're betting on contact sync as a company right now, you better start thinking about plan B.

**Lenny Rachitsky** (01:26:14):
So what I take away here is just it is now much different and there's an opportunity to think of something really clever that would give you a huge advantage if you can crack it.

**Nikita Bier** (01:26:23):
Yes, but most likely I think most apps will not have social graphs going forward and this will entrench incumbents even more. I don't think Apple acknowledged that. I think the person that designed the feature probably has never built an app or done contact sync before because the flow is egregiously bad and it doesn't actually even, I think, benefit the user's privacy because it just completely eliminates the feature altogether.

**Lenny Rachitsky** (01:26:53):
Okay, next topic. So you helped this product called Dupe succeed. It's doing incredibly well from what I can see. And I saw you tweet about one of the key things that you helped them through, which is to invert, I'm reading this quote, "Inverting the time to value so that the user experience is the aha moment in seconds." Talk about that insight and how important that is to building a successful consumer social app.

**Nikita Bier** (01:27:18):
This kind of concept of getting users to the aha moment is something I recurringly bring up to every company I work with. And you have to understand that in 2024, people's attention spans are like three seconds. It's really sad, but we are spread thin through so many notifications, products, everything that if you can't demonstrate value in the first three seconds, it's over. And this also leads back to the contact sync question that you talked about was you have to sign up and then the first night you have to see all of your friends on the app and experience it, otherwise you'll churn.

**Nikita Bier** (01:27:55):
So this idea of inverting the value, when I was working with Dupe, they had this kind of shopping app that had a bunch of different features and there was one feature that I saw that was interesting called Deal Hop and it allowed you to just put in a product page and it would find the cheapest version of it online. Something I already do through a bunch of duct taped methods of Google image search, Google Lens. And I was like, "That should be a whole company. But how are we going to teach users to do it and how do we expose them to that aha moment as fast as possible in a memorable iconic way?"

**Nikita Bier** (01:28:38):
I had this product I built a while back where you just type the domain in front of an existing URL. So I told them, "You should try this. It's very marketable, but you need to get a very short domain that matches what you're doing." And so he went out and bought Dupe.com for I don't know how much, but when he bought that I was pretty excited. I'm like, well, if this doesn't work, I'm going to feel terrible, but if it does work, it's going to be a blowout success.

**Nikita Bier** (01:29:05):
So we put out a couple videos about it and then it was iconic, went viral, the videos. Users remembered to do it, to type dupe.com in front of a URL. Now I think they're making millions in ARR in a matter, and I think under 60 days of launching. And that was a blowout success. And of the companies I work with, I would say it happens about 50% of the time we hit that much success, but we hit success. I think 50% of the time it's outright failure because consumer is so random.

**Lenny Rachitsky** (01:29:41):
And so what I'm hearing is a big insight is just ideally get to three seconds time to value. Is that the advice?

**Nikita Bier** (01:29:50):
Yeah.

**Lenny Rachitsky** (01:29:52):
Sounds great. Easy peasy.

**Nikita Bier** (01:29:55):
Yeah. You really have to craft onboarding everything to ensure that that's where the design part comes in of being a great product person.

**Lenny Rachitsky** (01:30:12):
I imagine a big part of this is just cutting things you think... Like killing your darlings, cutting things you think people need and just being really ruthless with that,.

**Nikita Bier** (01:30:20):
Really ruthless, but also being extraordinarily creative with how you use the tools available to activate a user. I think extraordinary product people are deeply aware of every possible API and how it can be used in non-traditional ways. Like this URL trick was something that I think was non-traditional that people adopted very quickly. I have a whole laundry list of iOS mechanisms that people use for a certain way today, but you could invert them.

**Nikita Bier** (01:30:59):
Contact sync is a great example because you sync your contacts and then it finds all the friends and then ranks the people who are not on the app yet but have a bunch of friends on it. So there's a bunch of ways that you can one tap, expose a ton of value to users that I think founders often neglect. A lot of founders will go and say, "Oh, they can just exchange usernames and that's how they can add each other."

**Nikita Bier** (01:31:27):
That is the most unrealistic thing ever because that means you have to see the username, type it into the app. You have to do that what 50 times to get a 50-person friend list. So we're looking at 10,000 taps versus one. So that's what I mean by trying to get people to the activation moment, the aha moment and get them to value.

**Lenny Rachitsky** (01:31:53):
I love that advice. So maybe as just a last question along these lines. When you come to a founder, a relationship that you're a startup, you're trying to help, is there one more thing that you find often ends up being really helpful to them? Any common piece of advice that's like, "Oh, this is probably what's going to help you." You talked about this aha moment step, the contact sharing stuff. I guess is there anything else that's just like this is something that's probably going to help you with your app?

**Nikita Bier** (01:32:20):
Right now, I think I advise around 35, 36 companies and all of them are at different stages of challenges they're facing. Some of them are pure at the product concept stage. Some of them are venture backed billion-dollar companies and each of them faces different problems. The first thing I often do is I ask them to show me the analytics. We look at how people are distributing the app today, what is the milestone that a user must hit to become activated and what's getting in the way of that?

**Nikita Bier** (01:33:03):
I also take a very deep look at every funnel that users come through. And I think a lot of founders separate marketing and product growth, like top of funnel growth from the actual products growth mechanisms, but they're both the same. They both should be treated as the same. If you're targeting a community and you want them to all adopt and get saturation, you need to build marketing that shows imagery of that community or whatever. And then when you get in the app, you have to be able to join that community.

**Nikita Bier** (01:33:48):
When you invite people from that app, that community needs to be mentioned. You need to actually cover everything from the ads to the in-app experience. All of that needs to be aligned for a user acquisition and flywheel to spin. A lot of people really screw that up. That's my initial rough approximation of what I do when I come in and try to fix or try to help with some of the challenges these companies are facing.

**Lenny Rachitsky** (01:34:15):
So this is actually a great segue to the final thing I want to make sure people understand is you help companies through this. Talk about how you work with companies where they can find you, what kind of companies you're looking to work with and how all that works.

**Nikita Bier** (01:34:29):
So I work across the gamut. Most of them are consumer mobile companies and there certainly are web ones too, but I work with companies across stages. Typically, I recommend that you don't book me unless you're venture backed because it's a little expensive. But my main goal when someone does seek my advice through intro is I try to make them 10 times back their money in the first 30 days. And so far I think I've managed to do that with anyone who's met with me. And that means get all the table stakes, grow things out of the way, at the minimum.

**Nikita Bier** (01:35:11):
Then identify two to three step function changes that could change their growth trajectory. And these are higher scope fundamental changes to the product. So I try to couple both, explain to them which direction I believe they should go, and it's a conversation and we talk about it. And then once they settle on a direction, I tend to get in the pixels. I go into Figma and we do a live session together and clean things up. I identify, "Oh, that's going to convert at this percent." And then I just manage all that. But yeah, it's generally post-series A.

**Nikita Bier** (01:35:49):
Some seed stage companies, and it's been really fun. It's kept my mind sharp on where the market is headed. I've also, over the years of building all these apps, I've accrued all these growth hacks that still nobody knows about. And so I share those when it's relevant for the company and it's been great. Dupe was one of them. I was advising Saturn. I rebuilt their Friend Finder. I think believe they're number one in the productivity section above ChatGPT as of today. But I think I've generally invested in about maybe 10% of the companies that seek out my advice.

**Lenny Rachitsky** (01:36:31):
Amazing. Well, I know it feels expensive to some people, but if I were a company with cash, it feels like the best deal I could find someone like you to come in and actually help me think through deeply in the pixels how to make my thing work. So I think you're still undercharging and I hope you keep raising your prices because clearly there's a lot of demand. Nikita, this was incredible. I feel like people see you on Twitter and they're like, "Oh, this guy, he's such a jerk sometimes." But meeting you in person and talking to you, it's very clear. You're really a kind dude, really thoughtful. All your advice is based on real things you have done. It's not just you sitting around pontificating and I think that's incredibly valuable and I'm excited. People are tapping that knowledge and you're sharing it with people in a wider scale.

**Nikita Bier** (01:37:15):
It's been a pleasure. Thanks for having me. We covered a lot and there's plenty more. I hope to come back after the next viral hit.

**Lenny Rachitsky** (01:37:26):
Oh man. So I was going to ask you, is there anything you're working on now or stages, what can you share? [inaudible 01:37:33]. Stay tuned.

**Nikita Bier** (01:37:26):
Stay tuned.

**Lenny Rachitsky** (01:37:34):
Here we go. Amazing. I always ask people how can listeners be useful to you? So let me just ask you that as a final question, how can listeners be useful to you?

**Nikita Bier** (01:37:41):
Follow me on Twitter and enjoy my shit posts. And I hope you have as much fun as me on Twitter.

**Lenny Rachitsky** (01:37:49):
I do, man. I love your tweets. Nikita, thank you so much for doing this and for being here.

**Nikita Bier** (01:37:54):
Yeah, thanks a lot.

**Lenny Rachitsky** (01:37:55):
Bye, everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [11/16] The original growth hacker reveals his secrets | Sean Ellis (author of “Hacking Growth”)

**Lenny Rachitsky** (00:00:00):
The Sean Ellis test, such a seemingly simple idea that has had such a profound impact on the startup world.

**Sean Ellis** (00:00:07):
The question is, how would you feel if you could no longer use this product? Once you got a high enough percentage of users saying they'd be very disappointed, most of those products did pretty well. If you felt too low, those products tended to suffer.

**Lenny Rachitsky** (00:00:19):
Say someone is listening and they're like, "Okay. Man, I'm getting like 10%. I don't know what to do." What do you find often works?

**Sean Ellis** (00:00:25):
Just ignore the people who say they'd be somewhat disappointed. They're telling you it's a nice to have. If you start paying attention to what your somewhat disappointed users are telling you and then you start tweaking onboarding and product based on their feedback, maybe you're going to dilute it for your must have users.

**Lenny Rachitsky** (00:00:41):
Moving retention often is really hard, but I guess it sounds like there's often something you can do.

**Sean Ellis** (00:00:45):
It's usually much more function of onboarding to the right user experience than it is about the kind of the tactical things that people try to do to improve retention.

**Lenny Rachitsky** (00:00:53):
What are like three or four things that you think people should definitely try to help improve activation?

**Sean Ellis** (00:00:58):
In my experience-

**Lenny Rachitsky** (00:01:03):
Today, my guest is Sean Ellis. Sean is one of the earliest and most influential thinkers and operators in the world of growth. He coined the term growth hacking, invented the ICE prioritization framework, was one of the earliest people to use freemium as a growth strategy, and maybe most famously developed the Sean Ellis test to help you understand if you have product market fit, which a large percentage of founders use today and profoundly impacted the way startups are built. Over the course of his career, Sean was head of growth at Dropbox and Eventbrite, helped companies like Microsoft and Newbank refine their growth strategy, was on the founding team of LogMeIn, which eventually sold for over $4 billion, and he's the author of one of the most popular growth books of all time called Hacking Growth. In our conversation, we dive deep into two topics. One, how to know if you've got product market fit and what to do if you don't, and two, how to figure out how to grow once you've found product market fit.

**Sean Ellis** (00:02:27):
Thanks, Lenny. I'm super excited to be on with you.

**Lenny Rachitsky** (00:02:29):
There's so much that I want to talk about. There's so many directions we can go, but to keep it focused, I want to spend time on two areas. I want to talk about how to know if you have product market fit and what to do once you have product market fit in terms of figuring out how to grow. I know these things are very linked. I know you spent a lot of time on these things. How does this feel?

**Sean Ellis** (00:02:49):
Sounds perfect. Yeah, let's do it.

**Lenny Rachitsky** (00:02:51):
Okay. Okay, amazing. Let's talk about, first of all, the Sean Ellis test, slash something people call sometimes the product fit test. Such a seemingly simple idea that has had such a profound impact on the startup world. I've never actually seen you talk about the history of this thing, how you came up with these questions, how you came up 40%, the whole journey of this thing. So let's talk about this. But first of all, can you just tell people what is the Sean Ellis test for folks that aren't exactly familiar with this?

**Sean Ellis** (00:03:19):
It's a simple question that helps you figure out, does anyone consider your product a must-have, or ideally, who and how many people consider it, but ultimately it's about trying to figure out is your product a must-have, which could be equated to having product market fit. And so the question is, how would you feel if you could no longer use this product? And I give them the choice, very disappointed, somewhat disappointed, or even not disappointed or not applicable, I've already stopped using the product. And what I'm trying to find are those people who say, "I would be very disappointed if I could no longer use this product," then that's a really powerful vein to dig into when you discover that you actually have some people who would give a crap if your product disappears.

**Lenny Rachitsky** (00:04:08):
**Sean Ellis** (00:06:40):
I would say it's a leading indicator of product market fit. The lightning indicator is, do they actually keep using it? So probably retention cohorts are more accurate, but the problem is, like your time at Airbnb, how long do you have to look at a retention cohort before you know that you've actually long-term retained someone?

**Sean Ellis** (00:07:01):
And so with this question, you can kind of find out day one, you don't need a good analytics system in place to be able to see if product market fit exists. And so yeah, the 40% was not something I originally had in there. Originally, I was trying to have just a filter so that I was not treating all feedback from customers the same, but I was trying to find feedback from customers who actually really cared about the product. And then was over time, at the time I was working for a couple of YC-backed companies, and so those companies were all pretty connected, and so I would share the question with a lot of other startups in Silicon Valley. And so over time, I started to see there was a pattern that once you got a high enough percentage of users saying they'd be very disappointed, most of those very disappointed without the product, most of those products did pretty well. And then if you felt too low, those products tended to suffer.

**Lenny Rachitsky** (00:08:05):
Okay, there's two things I want to definitely follow up on here. The first is such an important point that you made at the beginning when I introduced this test that you described it as a leading indicator of product market fit and actually retention, people actually using your product, the product actually being used by the market is the actual ultimate test. So the idea here is this is a good way to get a sense of, before you actually have data, are we headed in a good direction? Could you speak more about that, of like, when to use this and when it's most useful in best [inaudible 00:08:34]?

**Sean Ellis** (00:08:33):
Yeah. I mean, so for me in particular, when I come into a company, my goal is to help them grow. And so I don't want to put myself in a situation where I'm going to fail because no one actually cares about the product. And so it can really be asked at a company of any stage. It's helpful to understand who your must have users are. But essentially once you have even an MVP, like a very first MVP on the product, you can still get some useful feedback about the product if it's resonating with anyone.

**Sean Ellis** (00:09:08):
So I actually had a company where I had committed to work with them. It was right after I left Dropbox and I committed to work with these guys for six months to help them grow. I ran the question and it came back at only 7% of users saying they'd be very disappointed without the product. And so I'm like, "I have six months to help them grow and they're only at 7% right now. It might take six months to get the 40%. Am I doing them a disservice by being in a growth role and being on payroll during this period of time?" But fortunately with the signal and the information we got from the initial survey, we were able to get them at 40% in two weeks.

**Lenny Rachitsky** (00:09:50):
Wow. What did you do there just as a case study?

**Sean Ellis** (00:09:53):
Yeah. Yeah. So the company called Lookout, it's a mobile security company, and now most of the things in Lookout are built into iPhones and Androids. But at that time, the product had everything from backup my data to find my lost phone to protecting your phone with a firewall and antivirus. And so when we ran this initial survey, I dug into the 7% who said they'd be very disappointed without the product and found that most of that 7% were focused on the antivirus functionality. So they were like, they know they need to protect their computer from viruses, smartphones were becoming more like computers, so it just made a lot of sense for them that they'd need to protect their phone. And interesting, at the time, I think there was only one kind of phone virus that had ever even happened, but it was a pretty easy mental leap for people.

**Sean Ellis** (00:10:50):
And so now we knew, okay, it's antivirus that people really valued. And so step one was just reposition the product on antivirus. So that kind of creates a filter. So anyone who now is coming in to sign up for the product who doesn't care about antivirus is not going to convert, and those who are excited about antivirus are going to convert. We already know from the initial survey that people value that after they convert. So by setting the right expectations around it up front, you're going to bring people in with the right expectations. But then the second thing that we did was we streamlined onboarding so that the first thing that they did after signing up for the product was to set up the antivirus and then get a message "you're now protected from viruses."

**Sean Ellis** (00:11:38):
And so it's really the combination of those two things. It's set the right expectations and then speed to value. And so the next cohort of people that we surveyed were at 40% saying they'd be very disappointed without the product. So that literally took two weeks to make those changes. Six months later, it was 60% on the score. And then I think they hit the billion dollar valuation four or five years later on ultimately being one of the early unicorns.

**Sean Ellis** (00:12:11):
And interestingly, as all of those things were built into mobile phones now, they've completely changed the business, but they continue to do really well, but they've continued to iterate the business. I think that having that kind of finger on the pulse early in the business was important to build the muscle in the business to be really responsive as the market changed.

**Lenny Rachitsky** (00:12:35):
Sean, this is already amazing. There's just a fractal of topics I want to explore from this very short conversation already. So the first is just follow this thread of basically you're sharing kind of a growth strategy that I imagine you execute, is look for the percentage of people that would be very disappointed if your product went away, see who they are, see what they're excited about and lean into that both positioning-wise, onboarding-wise, and probably also cut out stuff from your product that they don't care about.

**Sean Ellis** (00:13:02):
Yeah. And I was coming at it from a marketing perspective initially. Over time, I position myself more in a growth role with product and marketing as areas I could influence. But as a marketer, I probably didn't have a lot of influence on a engineering founded company to say, "Let's cut out stuff." So it made more sense to say, "Let's just sequence the onboarding so that we're highlighting this and onboarding to this." That was a little easier to sell.

**Lenny Rachitsky** (00:13:33):
And just hearing that you can move this score so quickly without even changing the product substantially, I imagine what surprised a lot of people when you think about moving retention often is really hard. And maybe we talk about that, but I guess it sounds like there's often something you can do that's not very hard that might significantly shift this product market fit test.

**Sean Ellis** (00:13:57):
Right. And then that ultimately moving retention is really hard, but it's usually much more function of onboarding to the right user experience than it is about the tactical things that people try to do to improve retention.

**Lenny Rachitsky** (00:14:11):
Okay. I want to put a pin on that and come back to that because a really important topic. I'm going to come back to, say someone runs this survey and they get 40%, what should they have in their mind of like, "This is what this is telling me"? Because I think a lot of people are like, "I got product market fit. I got this. Let's go, go, go." What's the best way to think about what this tells you?

**Sean Ellis** (00:14:30):
Yeah, I mean it tells you something really important, which is, you haven't created something that people don't care about. So that's an important insight. But until you deeply understand that product market fit, you kind of don't have the tools to be able to grow the business. So that's really the next step, is to dig in and figure out who considers it a must have, how are they using the product, what did they use before, what problem are they solving.

**Sean Ellis** (00:14:59):
One of my favorite questions is... So I tend to have a lot of questions that I build off of that I'm using that filter, trying to drill into the users who say they'd be very disappointed without the product, and one of my favorite questions is, "What is the primary benefit that you get?" And then I use that initially as an open-ended question to kind of crowdsource different benefits people are getting. But then I run another survey where I turn it into a multiple choice question, force them to pick one of four distinctive benefit statements. And then the question that follows on that next survey is, "Why is that benefit important to you?" And then I start to get really good context.

**Sean Ellis** (00:15:43):
So I actually came up with this question when I was working with an early YC company called Xobni, which is inbox felt backwards. And when I ran that question, basically the people who said they'd be very disappointed without the product we're focused on, "Xobni helps me find things faster in my email." So it's great to know, okay, that's the benefit. But when I asked, "Why is that benefit important to you?" They said, "Oh, I'm drowning in email." I kept seeing that statement as a written statement. And so when I then was trying to figure out how to acquire customers, when I tested "drowning in email?", that set such a good hook. That was the context that people were living in, that they were really responsive to the message of find things faster with Xobni and then a description of what Xobni is. So I think when you can really dig into the context of why that must have benefit is important to people, you start to get the ingredients to build that flywheel that leads to long-term sustainable growth.

**Lenny Rachitsky** (00:16:51):
So what I'm hearing is whether you have 40%, whether you have 60% or even 7%, the actual best use of this tool is look at that percentage of highly disappointed and see what they're looking for, what they're excited about.

**Sean Ellis** (00:17:04):
Start drilling in, start feeling back that onion-

**Lenny Rachitsky** (00:17:04):
Start drilling in.

**Sean Ellis** (00:17:06):
... and just deeply understand them and make sure that ultimately your product roadmap is doubling down on the things that are important to your must-have customers. Onboarding is bringing new people to the right experience. Your messaging is setting the right expectations, your acquisition campaigns are targeting people who actually have the need. And so it's all about getting the right people to the right experience. And then even your engagement loop is about just reinforcing how to get people to experience that benefit more often.

**Lenny Rachitsky** (00:17:40):
Awesome. And the 40% threshold, so what you shared is you basically emerged from just looking at tons of startups doing the survey and finding a pattern. How firm is that 40%? How big of a deal? Is it 39 versus 41?

**Sean Ellis** (00:17:53):
I don't think it's that firm. To me, I think the real power is having some kind of target for the team to be shooting for that basically says, "We're not going to aggressively start to grow until we hit this target." And I think that as just a focusing piece is really important because I think one of the biggest challenges in an early stage startup is half the people feel like we're years from having this product ready to grow, and half the people are like, "What are we waiting for?" Where if you can actually get people on the same page of what does product market fit look like for our business, and it's at that point that we're going to.

**Sean Ellis** (00:18:36):
Before I ever heard the term product market fit, I remember the conversations back at LogMeIn in the mid 2000s of kind of like, "When do we step on the gas? What is the combination of factors that need to be in place before we start pouring fuel on the early fire?" And so yeah, I think that kind of nail it then scale it. It's probably been a term that's been around for decades now, but it's all kind of pointing to that same concept of product market fit.

**Lenny Rachitsky** (00:19:03):
How often have you seen false positives with this test where someone gets 40% and something is not right, they're actually far from it? Or is it generally pretty accurate?

**Sean Ellis** (00:19:14):
If you're having people say that they'd be very disappointed without your product, that's a really good sign. What I can tell you is that not necessarily a false positive, but what is driving people to say they'd be very disappointed. One of my favorite books is Hooked by Nir Eyal and he talks about in the kind of engagement loop that your last step is investment.

**Sean Ellis** (00:19:38):
And so I ran the survey on a business that I thought was a fairly commoditized business. Part of it I wanted to see, could I use the same go-to-market approach on a later stage company and use it to accelerate growth. And so this was a business called webs.com. They eventually got acquired by VistaPrint. But they'd been pretty flat for the year before I went in there. And then I started to use this approach to try to dial in their growth engine. I ran the survey thinking, "Yeah, you've had products like Wix and Weebly that have come on to the market since this more legacy website building product has been around. I personally think they're a little easier to use, they're a little better." And so I didn't have high hopes when I ran the survey, but it came back with one of the highest scores I'd ever seen. And it was like 90% of the people saying they'd be very disappointed if they could no longer use the product.

**Lenny Rachitsky** (00:20:39):
Holy shit. I've never seen that.

**Sean Ellis** (00:20:39):
And I was like, "How could that be possible? This product is kind of a commoditized category. I wouldn't even say it's one of the best." And then when I want to dug into it again, it comes back to that Nir Eyal Hooked model, is that the investment people have made in building that website, they put so much into that they know exactly how to make the changes and the kind of the CMS kind of side of things, they have spent a lot of time just making it beautiful. And so ultimately it was something that that was why they were saying they'd be very disappointed.

**Sean Ellis** (00:21:15):
But fast-forward when I initially went in, still doing these things help the business resume growth and have significant growth over the next 12 months after we did these things. So still the signal we got from why people would be very disappointed without the product was important and speed to value. All the other things I think about in go-to-market for an early stage product still were relevant, but just I think they were a little stronger on the percentage he'd be very disappointed.

**Sean Ellis** (00:21:51):
Even Eventbrite when I was there when we ran it was probably the second highest I'd ever seen. But with event organizers, if they've already set their event up on that platform and they've sent it out to their list and all those people are coming in and they're managing their event, again, they've invested a lot in the platform. So sort of switching costs I think can factor in there. So it's a function of both switching costs and utility of the product.

**Lenny Rachitsky** (00:22:22):
So that's a question I wanted to ask is, what's your guidance on when to ask this question? What I'm hearing is, if you ask it very far along the journey, when they're very invested, you'll get a much higher score. Is there any advice on the timing and the best time to ask this question to your users?

**Sean Ellis** (00:22:38):
What I recommend is a random sample of people who've really used your product. So they've gone in, they didn't just sign up, but they went in and hopefully hit that deviation moment. They've used it twice, two plus times, and they've ideally used it, say, within the last week or two weeks, so they haven't churned yet. So if it's a random sample of those people, that's kind of the ideal time to ask it.

**Lenny Rachitsky** (00:23:09):
Got it. So basically it's people that have activated whatever that means to you and have been using it for a couple weeks?

**Sean Ellis** (00:23:14):
Yeah.

**Lenny Rachitsky** (00:23:14):
Not people landing in your home page, not people just signing up, not people months later.

**Sean Ellis** (00:23:19):
Not people who've seen a demo of your product, but it's people who actually have experienced the product. But it's okay if you're hitting people who've used it months later, but in that Lookout example that I gave, if I'm testing people's perception of the product after I made updates to the onboarding, I'm going to only want to survey people who went through the new onboarding.

**Lenny Rachitsky** (00:23:43):
Yep. In the experimental. Yeah. Okay. So I asked people on Twitter what to ask you. A lot of people had a lot of awesome questions. I'm going to sprinkle in a couple of these questions throughout the chat.

**Sean Ellis** (00:23:54):
Sure.

**Lenny Rachitsky** (00:23:54):
One came in from Shraaz Doshi, a popular guest of the podcast.

**Sean Ellis** (00:23:59):
One of the ones that I listened to recently.

**Lenny Rachitsky** (00:24:01):
Amazing. I think it's the second most popular episode behind Brian Chesky. Okay. So he had a question of just, "What are the limitations of the score? When does it break down? When should you not use it if ever?" Is there anything of just like, "Here's when it's not going to work for you"?

**Sean Ellis** (00:24:14):
Yeah. I think one-off products would probably, like, how would you feel if you could no longer watch the movie you just watch? I wouldn't care. Even when I run a workshop, I don't run this as part of my survey after I do a workshop because how would you feel if you could no longer attend the workshop you just attended? It doesn't make sense. So I'll ask an NPS question as my filtering question so that I'm looking at focusing in on feedback of people who love it, also then through a separate lens, looking at people maybe who would be my detractors. So I think one-off products are probably not good products to run the question on. There may be other places as well that I'm not thinking of right now, but that [inaudible 00:25:00].

**Lenny Rachitsky** (00:25:00):
It sounds like not many. What I'm hearing is it's generally widely applicable.

**Sean Ellis** (00:25:04):
Yeah, I think it is, at least from my perspective. It's been really useful for me anyway.

**Lenny Rachitsky** (00:25:12):
Awesome. Okay. And then the follow-up question from Shraaz is, and I kind of asked this, but I'm curious if there's anything more here, just, "Have you seen any instances of startups over relying on the score prematurely declaring product market fit when in reality they haven't reached it yet? And just are there any other caveats of like, 'Cool, I got 40%'?" Is there anything else you should know, like, " Okay. But maybe check this one thing"?

**Sean Ellis** (00:25:31):
Yeah, I mean, I think to me it's kind of like what really is the definition of product market fit is the definition that people who get through my crappy onboarding and actually experience the product love it. And if I'm able to retain those people, that means I have product market fit. Or, is fixing that crappy onboarding part of getting to product market fit as well? I think that's up for debate.

**Sean Ellis** (00:25:55):
So to me, the hardest, I wouldn't obsess on onboarding if I know those who kind of get through the challenge of getting started with the product still don't like the product then feels like it's a core product issue or wrong people using it in the wrong way issue. But once you have that, then ultimately it doesn't mean that you're ready to grow. When I focus on growth, then customer acquisition is almost the last step. Once I validate that it's a must have for those early users, then I'm thinking about, "Okay, how do I optimize speed to value? How do I make sure that people have the right prompts to come back and use the product at the right time so that's kind of more of that engagement loop? How do I get my existing users to bring in more users if there's something that makes sense on that end? Even how do I optimize my revenue model?"

**Sean Ellis** (00:26:53):
Once all of those things are working well, then I'll obsess on the customer acquisition side. But customer acquisition is so hard that if you're not really efficient at converting-

**Sean Ellis** (00:27:00):
... customer acquisition is so hard that if you're not really efficient at converting and retaining and monetizing people, you're going to really struggle on the customer acquisition side.

**Lenny Rachitsky** (00:27:09):
Yeah, cool. And we'll talk about customer acquisition/growth.

**Sean Ellis** (00:27:13):
Sure.

**Lenny Rachitsky** (00:27:14):
Another question I wanted to ask, and a couple listeners asked, is the 40%. I had Jag from Nubank on the podcast, I think you may have worked with them, and they use 50% as their threshold because apparently Brazilians are very nice.

**Sean Ellis** (00:27:27):
Yeah. Optimistic I think is what I said.

**Lenny Rachitsky** (00:27:31):
Yeah. I guess the question is do you find instances where you should increase that percentage? And in B2B, is anything different? Do you change the percentage in B2B? Any advice there just when you adjust the threshold?

**Sean Ellis** (00:27:42):
Yeah, I hadn't really thought too much on that. Again, for me, generally I'm trying to just figure out is this a product that can grow? So if I got a 37%, am I going to be like, "Oh no, this would be impossible?" Or if I had a 70%, does that mean I'd say, "Oh yeah, I want to jump in and work with this company?" It's more nuanced than that. Obviously, if it's a 70%, but I have no idea how I grow the business, I'm going to be stuck there. But I do think he brought up a really good point that, culturally, some people are going to be more optimistic or pessimistic. Interestingly, when I came up with the question, I used to just use a normal satisfaction question.

**Sean Ellis** (00:28:39):
When I was working at Xobni, I'm just an intensely curious person anyway, so I'm just trying to dig in and understand the customers, and so I've always done lots of surveying. But at Xobni, I was going to use my filter as a satisfaction question, so how satisfied are you with this? I'm very satisfied. I'm somewhat satisfied. And our main customers were actually senior management, and so I thought senior management's never satisfied. I'm going to get always this super lukewarm thing. How can I change this question to give me a more real answer from these guys? Well, if I flip it and say, "How would you feel if you could no longer use this product?" I'll probably get a more honest answer back from them. And of course, they're very disappointed if they can't get what they want.

**Sean Ellis** (00:29:29):
And so initially it was just for the case of Xobni, but then I went to Dropbox right after Xobni and like, "Oh, I'll try the question again." And the insights I got back were really useful. And so each company I went to, I kept using the question. I'm like, this works way better than your typical satisfaction question. But initially, it was more about thinking just senior management to get a more honest answer out of them.

**Lenny Rachitsky** (00:29:54):
So that's the origin story right there?

**Sean Ellis** (00:29:56):
Yeah.

**Lenny Rachitsky** (00:29:57):
Wow. That senior managers are just very harsh and they don't need anything?

**Sean Ellis** (00:30:02):
Yeah.

**Lenny Rachitsky** (00:30:02):
And you have to flip it. That is so interesting. That question is such a good reminder of how hard it is to build anything people really would be disappointed not to have. That's why this works so well. People are like, "I don't need this. Who cares?" That's the core of this, is just that is hard.

**Sean Ellis** (00:30:19):
Especially when I first moved to Silicon Valley. The first 15 years of my career were not in Silicon Valley, and so I was in Eastern Europe and then New York and then Boston. But you move to Silicon Valley and you have people who get really excited about technology for technology's sake. And so just something being cool is like, "Isn't it cool that we can actually do this?" drives a lot of people. And so to me, I'm very practical. If it's not something that is really bringing value to people, then the likelihood that that product's successful long-term is going to be pretty low.

**Sean Ellis** (00:30:59):
Even, interestingly, at Dropbox, through the six months I was there, I'd ask one question multiple times a month. I broke the early beta users into a bunch of different lists. And I'd ask, "Which best describes you? I like to be among the first to try cool new technology, or, I only try things that I think will be useful for me?" And over the six months, it flipped from 90% being people who try things that they want to try cool new technology to six months later, it was people who only are going to try something that they feel like is useful. But what's cool is just because what motivates you to try something is you're an early adopter and you want to try something cool, if you're going to keep using it, it's because it's giving you some utility. And so I can still use those early adopters to help me figure out where's the value inside the product.

**Lenny Rachitsky** (00:31:54):
Awesome. So actually, two questions along those lines. How durable do you find this percentage being? Say you hit 40%, how often does that fade and go away versus stay there or go higher?

**Sean Ellis** (00:32:07):
Yeah, I haven't seen it really fade back down, but I've seen companies fail despite having it. And I think a lot of times then, it becomes an execution challenge. Once you have product-market fit, not everyone's going to be a good executor. But before that, I think getting to product-market fit, obviously there's a lot of methodology for doing it today that might make it a bit easier for people, but I still think it's fairly random and pretty dang hard. And so ultimately, the risk factor of creating something that people care about is really difficult. So if you can get to the point where you have 40% of the people who are using it saying they'd be very disappointed, and you have a reasonable sample size. Let's say you've got 10 people and four of them said they'd be very disappointed without it, you're still going to get something useful from those four. But I wouldn't say that's a sample size that you can really go to market on, so yeah.

**Lenny Rachitsky** (00:33:07):
What's a good sample size you look for of just, "Okay, this is actually good data I want to rely on?"

**Sean Ellis** (00:33:11):
It's really funny. So much of the stuff I self-learned, but I basically at one point said I need at least 30 responses, and I just thought I randomly made up a number and then I had people telling me, "Yeah, 30 is the minimum that you want on stuff." Okay. And even when I first created this survey, I remember showing it to the co-founder of SlideShare and her PhD was in survey-related stuff like cognitive psychology, but she basically said it was really about surveying. And she's like, "This methodology is amazing. How did you come up with this?" And so having some of that validation around these things helped. But a lot of it was just, again, driven by my own curiosity and also just knowing that that failure is such a likely outcome that trying to reverse engineer that failure, and then the number one reason for failure would be that people don't actually care about the product. And so when I find that, that's a really good sign that we're now down to an execution challenge.

**Lenny Rachitsky** (00:34:15):
And there's this obvious element of you may have product-market fit with people, but that group might end up being very small and the business you build around it could actually be cool, but it's not going to be a massive business. Is there anything there you can share? It's hard to know the size opportunity even though some people really, really like it.

**Sean Ellis** (00:34:35):
Yeah, I talked about I go to a multiple choice after I initially use open-ended questions to crowdsource the different use cases. But then I try to force people in a bucket, and then I can run filters on each of those buckets and I'll be like, "Oh, people who use it this way are like 60% likely to be very disappointed without the product, but people who use it this way are 35% likely to be very disappointed, but way more people use it the 35% way." And so then, do you want that intensely loyal group or the much broader group that's maybe a bit less, but almost there?

**Sean Ellis** (00:35:17):
I think that becomes a bit of a strategic conversation of do we want to have a better chance of surviving, going after a niche that we know we can serve well? Or have we raised so much money that we have to go after a really big market, and one that's not going to be long-term? But maybe then you're like, "Okay, once I have traction in that market, I can start to try to appeal to some other markets." But I think that's where some strategic decisions come in.

**Lenny Rachitsky** (00:35:47):
Do you have a heuristic of which you often recommend or is it very dependent on the situation?

**Sean Ellis** (00:35:53):
I prefer a more passionate customer base and work from there, just because I think your biggest competition when you're really innovating is just being irrelevant. And so if you're deeply relevant to anyone, I think that gives you a much better chance of long-term success.

**Lenny Rachitsky** (00:36:12):
Awesome. That's a really good insight. Okay, two more questions along this line and then I want to talk about growth strategy. One very tactical question. Is there a tool you recommend for doing this sort of survey? Do you recommend inline? In the product? An email? Something else?

**Sean Ellis** (00:36:26):
I've used a lot of different tools. I actually had a survey business that I sold to private equity years ago. It is called Qualaroo. That's an inflow survey tool. I think just using SurveyMonkey with emailed surveys works fine. And for me, it's a lot more of what's pleasant for the customer to fill out and then what's going to give me something where I can work really easily with the data? So at Bounce, for example, they had already intercom in place that had just introduced surveying, but it was a really crappy customer experience, at least at that time. That's been almost a year now or actually a little over a year. And so I'm really sensitive to is it a good survey experience for the consumer itself? But yeah, I don't think I'm stuck to any one platform there.

**Lenny Rachitsky** (00:37:30):
Such an important topic. Just, again, to remind people why this is so important, one of the most common questions founders ask is, "Do I have product-market fit? Have I built something people want?" That's just an endless series of, "I don't know. How do I know? When do I know?" And this is telling you in a really interesting way. So your advice is this is a leading indicator. You don't actually know until people actually start using it and whether they retain and continue using it. Is there just advice on the shift you make from relying on the survey to actually looking at retention cohorts? Is it just once you have enough data, once you have a couple of cohorts, then start looking at that? Forget about the survey?

**Sean Ellis** (00:38:05):
Yeah, but retention cohorts don't give you any of the qualitative insights into the why, so that's why we continue to do the survey. So initially I would say if the survey comes back and it shows whatever your target number is... If you want to be Nubank, it'd be a 50%. Or two of the companies I launched, we launched in Hungary, and I would say it was the opposite end of the spectrum of Brazil, maybe more pessimistic than the average culture. And so maybe 30% is good enough there, but that ultimately, whatever your target is, that you have the signal that says, "Okay, we have enough value here. Let's start working on growing the business." But while you're working on growing the business, I would be paying attention to those retention cohorts. And if you're churning out all the customers who were saying that they'd be very disappointed without the product, then okay, let's retrench and rethink, do we really have product-market fit here and what do we need to do to get it if we don't?

**Lenny Rachitsky** (00:39:12):
Awesome. And speaking of Nubank, if anyone wants to see how a company has actually operationalized this in the way they operate, that there's an episode that we'll link to in the show notes where every new product at Nubank they build, before they launch it, they wait for 50% threshold. For people to say 50% of people would be disappointed if this product did not exist as they're developing it. And only then do they launch it publicly.

**Sean Ellis** (00:39:36):
Yeah, I think they even do it down to the feature level.

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

**Sean Ellis** (00:39:40):
So if you think about it, how would you feel if you can no longer use this feature starts to give you, again, the signal, is that feature a must-have feature? And if it's not, maybe we shouldn't have it. And so yeah, I was super excited when I saw how they were using the survey and they were doing it before I engaged with them.

**Lenny Rachitsky** (00:40:00):
Oh, wow. That's awesome.

**Sean Ellis** (00:40:01):
But they were doing it, I think, from pretty early on in the business.

**Lenny Rachitsky** (00:40:05):
The reason they can do this is they have a lot of users. They have millions of millions of users, so they can ask some small percentage of people this question. Because people hearing this might be like, "Oh my God, how many times am I going to be asked this question when I'm using this feature?" But they have a lot of users, so it's easier.

**Sean Ellis** (00:40:17):
Yeah. Yeah.

**Lenny Rachitsky** (00:40:18):
Okay. Last question, I promise, along these lines. Say someone is listening and they're like, "Okay. Man, I'm getting 10%, I'm getting 15%. I don't know what to do to increase my product-market fit." You should have just a strategy of just dig into the people that are very disappointed and see what they have to say. But any other advice/what do you find often works in helping people move from, say, 10% to 40%?

**Sean Ellis** (00:40:43):
Yeah, so one of the things that's cool about almost open-sourcing the survey approach is, again, watching how Nubank has evolved their usage. But one of the other companies that I think used it in an interesting way is Superhuman. And I would say that they basically ended up probably putting a lot more momentum behind the question than it had even before. They posted something about how they did it on First Round Capital's blog. And what I have always said, and again, it's me coming at it from probably initially a marketing background, which is I'm taking the product as a fixed thing, and how do I actually figure out how to market and grow this product? And product changes are going to take a long time, and so what are the variables that I can control with a marketing background? So one of the things I've always said is just ignore the people who say they'd be somewhat disappointed. They're telling you it's a nice to have. They're as good as gone, so just ignore those guys.

**Sean Ellis** (00:41:54):
I'll put one piece in the middle there before I say what Superhuman did. The reason that I say ignore those guys is that if you start paying attention to what you somewhat disappointed users are telling you, and then you start tweaking onboarding and product based on their feedback, maybe you're going to dilute it for your must-have users. And ultimately, it becomes kind of good for everyone but not great for anyone. And so that was my fear of trying to read too much into the users who say they'd be somewhat disappointed. But the Superhuman guys actually found, I think, a good way around that where they said, "Okay, what is the benefit that my must-have users are focused on? And then of the users who say they'd be somewhat disappointed, so the nice-to-have users, of those users who are also focused on that benefit, what do they need in the product for it then to become a must-have for them?"

**Sean Ellis** (00:42:48):
And so they're staying true to that core benefit, but they're trying to essentially take those on-the-fence users and moving them up. And so I think their way of approaching that addressed what my concern was, which is are we going to break it for the must-have users?

**Lenny Rachitsky** (00:43:05):
That's an awesome insight. By the way, did Rahul and the team there just do this on their own or were you involved in any way in this at Superhuman?

**Sean Ellis** (00:43:11):
No. That's the same thing. Like I said, I wasn't initially involved with Nubank. I wasn't involved with them. We wrote about it in our book in 2017, and so I think that I got it out there. But I actually teamed up with the Kissmetrics team in 2012, and essentially published this survey on survey.io where we just made it freely available for people and a really easy template to prepare and send out, and the how-to guide on it. It was all just free. Kissmetrics is using it as maybe lead gen. And for me, I just wanted a way to put something out for the community. And so it's been out there for a long time, so it's not surprising that different companies have found different unique ways to use it.

**Lenny Rachitsky** (00:44:01):
That's awesome. I think that post is one of the most popular in First Round. It really had an impact on a lot of people.

**Sean Ellis** (00:44:05):
Yeah.

**Lenny Rachitsky** (00:44:06):
So just to repeat, the approach you recommend for when you're digging into... I wrote this down. When you were talking for how to dig into what benefit people are finding, your advice is it's basically a follow-up survey to the extremely disappointed people asking them what is the primary benefit you get? It's an open text initially. Then once you get a collection, you do it sounds like another survey as multiple choice. Here's five benefits-

**Sean Ellis** (00:44:31):
To a different group of people, to be clear.

**Lenny Rachitsky** (00:44:33):
Different group. Yeah. Got it. Awesome. And then it's like, which of these four or five benefits is what you're getting out of this product? And then the question is, why is this benefit important to you?

**Sean Ellis** (00:44:45):
Eventually the survey.io got closed down, but essentially the template that I typically used was then moved to PMFsurvey.com. And so you'll see some other questions that I have on there as well, like what would you use instead if this product were no longer available? And that's one of the interesting things is you start to see people who say they'd be somewhat disappointed, usually, they're focused on a commodity use case and they know an easy alternative to switch to. So to be a must-have, it needs to be both valuable and unique.

**Lenny Rachitsky** (00:45:18):
Okay. Anything else on this topic of the Sean Ellis task product-market fit test before we move on to growth strategy advice?

**Sean Ellis** (00:45:26):
No, I think that's it.

**Lenny Rachitsky** (00:45:26):
I think we did almost an hour on that one topic, which I love because I feel like this is such a powerful tool that I think people sort of know and have used, but I think there's a lot of opportunity to use it more effectively. And all the stuff you pointed out about it's not just you have this threshold goal, let's move, let's grow. It's like, this is how you figure out how to make it better and better and grow faster and faster. And it's actually a good segue to talking about growth.

**Lenny Rachitsky** (00:45:50):
Even though you coined the term growth hacking, you spend most of your time on the opposite, essentially, which is helping companies figure out sustainable growth strategies, not just a bunch of hacks to grow for a little bit and then disappear. And from what I've seen, it's all rooted in this idea of product-market fit and what helps you find product-market fit, and I imagine many of the stuff we've talked about.

**Sean Ellis** (00:46:10):
Yeah. Just one quick interjection there is that when I coined growth hacking, I did not think of it as a bunch of one-off hacks. What I thought of it was what's more about what is the way to ultimately drive sustainable growth? But it's, over time, maybe more interpreted the way you described it, but just to jump in and say that.

**Lenny Rachitsky** (00:46:30):
That's a really good clarification, so how did you actually initially frame it when you first-

**Sean Ellis** (00:46:34):
Yeah, I just said it's about looking at every single thing that you're doing and scrutinizing its impact on growth in the business. And particularly, I think most marketers, when I first moved to Silicon Valley, most CEOs who were asking me to help their companies, they were saying, "We need help with awareness-building," and I'm getting introductions from top VCs. And so, so much of, I think, the way people were approaching growth was marketing textbook how to approach it. And startups just don't have the luxury to do all of those things, and so you got to really focus on how do I acquire customers to an experience that's going to make them keep using this product? And so maybe I picked the wrong term in calling it growth hacking, but I think it at least opened the conversation to getting more people thinking about maybe we should be thinking about growth in a different way than as it's traditionally taught in marketing courses in school.

**Lenny Rachitsky** (00:47:33):
Is there another term you think you should have used? Do you always think back, I should have called it this? Is there anything that you've had in your mind?

**Sean Ellis** (00:47:41):
I don't. I think sometimes having something that's a little divisive is almost better because it's too easy to just go completely unnoticed. But I was trying to put a name on not just how I was approaching growth, but seeing Facebook obviously had a very different approach to growth than most companies. LinkedIn, Twitter, there was a handful of companies that were approaching it in the same way I had previously been approaching it, and I just thought this thing needs a name. And so I sat down with a couple of friends, came up with a name and it stuck. But yeah, obviously from day one it was pretty divisive with different groups.

**Lenny Rachitsky** (00:48:23):
That's a fun story. Thanks for sharing that.

**Lenny Rachitsky** (00:48:25):
Okay, so talking about growth and helping companies figure out how to grow. Say you go to a company, they're getting 42% on the Sean Ellis test, and they're like, "Okay, cool, let's start thinking about growth." What's your first piece of advice to them to start when they're thinking about growth? And then just broadly, how do you approach helping them figure out how to grow?

**Sean Ellis** (00:48:45):
Ultimately, it's about trying to get as many of the right people to that same state that we just talked about with the must-have users, so trying to get as many people to experience the product in a way where they'd be very disappointed if they could no longer use the product. And so that's not just acquisition, which is how most companies think about... Initially, it was awareness then maybe the more developed way was, oh, let's at least focus on profitable acquisition. But in my experience, the hardest part really sits inside the product team, so how do you shape that first user experience so they actually use it in the right way and it's not so difficult that they give up? And that ultimately, we understand what makes it a must-have product. And then what we're trying to do is build a... Yeah, it sounds kind of theoretical here, but I can go into the details on how, but build a flywheel around that must-have value.

**Sean Ellis** (00:49:45):
So step one would be understand it. Step two for me is then figure out a metric that essentially captures units of that value being delivered. And so when I think about a north star metric, that's what I'm thinking about is something that reflects how many people are coming in and experiencing that product-market fit experience, whatever that is. And it's not just me telling them, "Here's what your north star metric should be." It's that ultimately the team needs to decide that together. And then really just diagramming, what are all of the different ways that we can grow that north star metric? So that's where you start to actually build, I call it a value delivery engine, but it's what does our onboarding look like? What's that aha moment? That activation? What does the engagement loop look like? Is there any referral? Try to capture it as it is today.

**Sean Ellis** (00:50:47):
And then, from there, thinking about where are the biggest opportunities for improvement, so those high-leverage opportunities, and then ultimately starting to run experiments against those opportunities. Generally, I think I touched on it a little bit earlier, but generally the sequence that I like to do is start with activation because that one's just so critical and it's easy to get lost in between, especially for an early product. The product team's so focused on the roadmap. We're two features away from not even needing marketing anymore. This thing's going to take off. And then a marketing team so focused on bringing new people in, but how do you get those new people to a great first experience falls through the cracks a lot of times. So a lot of focus on activation and then engagement and referral and getting the revenue model right. And then once each of those pieces are working well, then starting to really obsess on the channel side.

**Sean Ellis** (00:51:49):
One thing that I'll say. When I go in and directly am involved with a company on the acquisition side, I am thinking about my hypotheses on the acquisition pretty early on, because if I go into it and I have no idea how we'll acquire those customers, I'm not real confident I'll figure it out when I'm there. So I want to have two or three things that seem pretty viable as ways to profitably acquire customers, and knowing that once I get deep into it, I'll probably come up with one or two more and I've got five, one of them's likely to work. But I don't want to just be under the pressure of having to come up with that once I come in, if I don't at least see an angle from that before I get involved with the company.

**Lenny Rachitsky** (00:52:36):
What I'm hearing is when you come into a company and they're asking, "Sean, how do we figure out how to grow this thing?" you actually focus first on activation onboarding, and we're going to talk about all these things. Then, after that, basically these are priority order for you. Then it's flywheel engagement referral stuff to see if there's a way to drive that. Then revenue. How do we make money with this and how do we make sure we're doing this profitably? And only then do you start to go big on acquisition top-of-funnel growth.

**Sean Ellis** (00:53:05):
Yeah. I may need to do some acquisition stuff before just to bring enough flow-through, but I'm not obsessing on how scalable is this. It's just like, yeah, let's get enough people coming through that we can start to take the slack out. Part of it comes down to that the acquisition side is so competitive now that if you're not really efficient at converting and retaining and monetizing customers, you can't find scalable, profitable customer acquisition channels.

**Lenny Rachitsky** (00:53:33):
This is fascinating because I think a lot of people probably do the opposite. Start driving a bunch of growth to a product, then we'll fix onboarding, then we'll figure out how we're making money, and referrals comes along there. So I think this is really important for people to hear. So again, the reason you invest first and focus a lot on onboarding/getting people activated is because that is very correlated to retention and this must-have customer, this, "I'll be very disappointed," customer.

**Sean Ellis** (00:53:58):
Yeah. And they're at highest risk of losing them at that point. They-

**Sean Ellis** (00:54:00):
They're at highest risk of losing them at that point. They're probably a little skeptical about a promise that you put out there, but they're intrigued enough to want to use it. But until you get them to that must-have experience, until you kind of get them to that aha moment, they're at their high risk of being lost. And so a lot of people focus on, "Well, I better get their email address or their phone number." But then you're essentially having to reacquire them at that point. So to me, if you can collapse that time to value, I can give you a couple of incredible examples of when we [inaudible 00:54:38]

**Sean Ellis** (00:54:37):
So at LogMeIn, when we initially tried to grow the business, I was stuck at being able to spend... I couldn't spend more than $10,000 per month profitably trying to grow the business. And then I dug into the data and I saw that 95% of the people signing up for LogMeIn. So LogMeIn, at the time free remote access for your computer. And so you install software and you can control it from any other computer. So 95% of the people signing up never once did a remote control session. And so not surprisingly, then I had to get my monetization off the 5% who did that was really limiting my ability to find channels that worked.

**Sean Ellis** (00:55:24):
Credit our CEO with this, that I shared the data with him and he basically told the product team, "We are putting a complete freeze on the product development roadmap." So every single person from product, engineering, design and then also said to me, "Stop trying to find new channels." The three of us on the marketing side are all going to focus on improving the signup to usage rate. And so in three months, we improve the signup to usage rate by a thousand percent. So we went from only 5% of people using the product to 50%. I went back, tried the exact same channels that previously only scaled to $10,000 a month.

**Sean Ellis** (00:56:05):
Now they scaled to a million dollars a month with a three-month payback on marketing dollars invested. 80% of new users were coming in through word of mouth. So there was this major inflection point by just focusing on activation.

**Lenny Rachitsky** (00:56:19):
**Sean Ellis** (00:57:40):
One of my favorite quotes is a quote from a guy Kettering, who was a hundred years ago at GM running innovation. And he says, "A problem well stated is a problem half solved." And so I think a lot of it comes down to not the things you try, but how you deeply understand the problem that's preventing someone from using your product effectively. And so I'll just give you one example. We had one channel after we made a lot of these changes and had already driven a ton of improvement in the LogMeIn onboarding. We found a demand generation channel that was really cheap and the economics looked great, but at just the download step we had a 90% drop off rate.

**Sean Ellis** (00:58:26):
And so we A/B tested a bunch of different things there to try to improve that conversion rate, and then finally 10 plus tests, not able to improve it. Finally, someone said, "When these people are registering. Why don't we just ask them why they signed up and didn't download the software?" And so we didn't want to do it in too kind of a creepy way. So we made it look like a note coming from customer service. This channel was sending 200,000 people a day, so 20,000 people were converting to registering. So we had essentially 20,000 people we could email and then 18,000 of them who didn't download. And so we just asked, "Hey, notice you haven't had a chance to use the product yet.

**Sean Ellis** (00:59:11):
It looked like it was coming from customer support. What happened?" And the answer we got back and not a formal survey was, "Oh, this seemed too good to be true. I didn't believe this was free." I mentioned to you we were one of the first freemium SaaS products out there. And so people were skeptical, especially in a demand gen channel where they hadn't seen a radio or a TV advertisement from our competitor who was a premium only product. These were people who were discovering the category for the first time they were getting there. Once we articulated what the problem was, our next test gave us a 300% improvement in the download rate, which was...

**Sean Ellis** (00:59:54):
We gave them a choice, download a trial of the paid version or download the free version, put a big graphical check mark next to the free version. But when they saw we had a business model and a trial of a paid version, the free version was credible. And so that essentially made that channel work for us. So I think again, it's that combination of qualitative research, looking at how others did it. We had this theory, our previous company had been a game company that didn't require a download. So initially we had this theory that maybe just downloadable software can't be in the millions of new customers a month and so we're being unrealistic here.

**Sean Ellis** (01:00:31):
But then we were like, "Are there any counter examples to that"? And no, the instant messengers are downloadable and they have hundreds of millions of customers, so let's study their download and install process and see if we have any ideas that we could borrow from that. So again, some inspiration, tried some of those things, it was a combination of just trying a bunch of different stuff that ultimately led to, I wouldn't say there was one big gain, it was a bunch of small gains.

**Lenny Rachitsky** (01:01:00):
Awesome. So a few things for people to try if they're like, "Hey, how do I improve my activation rate? How do I improve my conversion rate?" Just drill further into what is stopping people from progressing. Ask them, "Why did you bounce here? What did you think this was going to be? Why didn't you end up using this?" Look for inspiration from other products, I think people probably already know that. You talked about earlier this idea of the positioning, having a big impact of just figuring out.

**Lenny Rachitsky** (01:01:26):
They want an antivirus software. Let's make that very clear. "Hey we've got the best antivirus software, that's what we're here for." So there's probably just messaging that you find works a lot of times, right?

**Sean Ellis** (01:01:36):
I mean your two big levers on driving a conversion are increase desire, reduce friction. And so you definitely want to increase the right desire. Sometimes it can also just be reminding people along the way of what benefits you're going to get. In the case of LogmeIn, it was probably the most complicated funnel I've ever seen because you couldn't even get to the aha moment while you're sitting in front of the computer. You had to actually go to a different computer and to use the service to remote control the computer you're in front of.

**Sean Ellis** (01:02:12):
So it's not surprising that there was so many steps where we could lose people, but we just weren't that intentional about designing each of those steps initially. And it wasn't until we thought through why would we lose someone at this step and studying the data, which steps were we losing the most people at? Then deeply trying to contextualize why are we losing them there, coming up with a set of tests that we want to run and then having a good way of deciding which one to test first and ultimately focusing the tests on the areas where we're losing the most people.

**Lenny Rachitsky** (01:02:45):
The other element of this is coming up with an activation metric and aligning on here's what we consider so activated. I know this is very dependent on the product, but any advice or heuristic for how to help people decide this is our activated user.

**Sean Ellis** (01:02:58):
I tend to start qualitatively. So just like when do I think they've had a good enough experience with the product to really know it? And so in the case of LogMeIn, it was pretty easy. If they didn't do a remote control session, they didn't use the product. There was no value along the way there. And then at least try to see if there's a correlation to long-term retention of doing that. Causation is you need to do some experimentation to prove causation. At the very least, I want to see that correlation, but if I start with two or three ideas of what it might be and then go and study the data, that can help you focus.

**Sean Ellis** (01:03:41):
But again, I don't think there's necessarily one exact right answer of what is that aha moment. There might be two or three different things. I think it's that intentionality about picking something that's experience-based and saying, "What is a likely experience that someone's going to get a good enough taste of this product?" And then I do see some companies that are like, "Well, the activation moment should be, they've used it a hundred times." That's going to correlate to long-term retention, but it's just not very actionable. It's so far down the user experience.

**Sean Ellis** (01:04:16):
So ideally if there's a way that I could get them there in the first session, in the first day, that's great. And so it's sort of something that's value that can be experienced super early. To give you an example from the first company I worked on was a game company, where I actually flipped it and basically instead of making a traditional funnel where they could play our games after they signed up, I made our games the advertisements. So basically we syndicated our games to 40,000 websites.

**Sean Ellis** (01:04:48):
They started gameplay experience on the other website, then they would get a message that they now have a qualifying score and if they register, they'll be in the drawing for the weekly cash prize and then we could pull them into multiplayer games on the site. And so it's kind of the strategy that YouTube used to grow, but it was two years before YouTube introduced the approach.

**Lenny Rachitsky** (01:05:14):
It feels like you basically created Zynga, is what I'm hearing there. So let's move further down the funnel. So we've talked about activation, onboarding. The next phase that you focus on is basically some people call this growth loops, growth engines, flywheels. Basically it's the thing that helps your business grow and something I am curious if this resonates.

**Lenny Rachitsky** (01:05:35):
I found there's basically four ways to grow and usually one of these engines is responsible for almost all of your growth. So what I've seen is basically you're going to go through sales, you're going to grow through SEO, you're going to go through virality, word of mouth or paid growth. Does that resonate? Does that feel right?

**Sean Ellis** (01:05:52):
And I wouldn't say it's necessarily one or the other. I think Bounce is a really interesting example where SEO is super important for Bounce. So people who are essentially saying, "Luggage storage, Paris. Luggage storage..." Most people when they're trying to find a place to store their luggage, they're starting with Google, but at the same time, a huge percentage of the people who use Bounce are dragging their bag down a street over cobblestones in Paris. And then they pass a sign that says, "Store your bag here for $5 a day." And it's like, "Oh, no-brainer." And so 10,000 partners around the world means that there's a lot of people in the right situation on the demand gen side.

**Sean Ellis** (01:06:44):
One would be, I actually think of kind of... I'm not sure how it would map to this, but demand generation versus demand harvesting. And so one of those examples would be a... Demand generation example, when you see the signs when you're passing, it's high context, right place. And then obviously the demand harvesting would be anyone who's Googling. And so they do paid search and organic search there.

**Lenny Rachitsky** (01:07:10):
Interesting. I don't see that sign approach work often, but I definitely have seen it work. Like Yelp I think grew in a lot of ways of just little Yelp stickers in all the restaurant. DoorDash I think probably grows through that.

**Sean Ellis** (01:07:20):
I think every business could be a little bit different, but for Bounce it makes sense that that would be a really good opportunity for them.

**Lenny Rachitsky** (01:07:29):
How do you help a business figure out which area to bet on? Whether they should go paid, whether they should go SEO, whether they should hire sales. Sales is probably an easier one. B2B, you're probably going to have to be a sales team, I guess just to help them pick, "Here's where you have a big opportunity."

**Sean Ellis** (01:07:46):
Again, it kind of comes down as I'm going into it, I'm thinking what are the realistic customer acquisition angles for this business? And I want to have ideally two or three that I'm coming into it with, but it's going to... Obviously Dropbox is a classic one of like, "Oh man, this product..." User get user is going to be just a classic. There's file share built into it, folder collaboration. There's so many pieces of it that cross from one user to the next. But interestingly, it was fairly similar to LogMeIn in some senses, it's two businesses are solving similar problems in different ways. Where LogMeIn, we grew almost entirely off of paid search. And part of it again is that for us, we had a competitor that was spending tens of millions of dollars a month creating the category with a premium only product through radio and TV advertising. GoToMyPC, they're creating all this latent demand. And so it just made sense for us to disrupt them with a freemium service and to insert ourselves in the flow of someone... What was that thing that I heard about on the TV commercial? And now they go and they Google it and same thing, but free. So we weren't really pushing for differentiation, but just really trying to harvest that.

**Sean Ellis** (01:09:15):
So I couldn't do that at Dropbox. No one was looking for when I went there. And so we tried a little bit with search to see can we make it work on cloud storage or backup or kind of going to some of these traditional categories. Cloud storage wasn't even a traditional category at that point, but backup was, and it was fairly expensive and there was just not that much demand there that way. And so it just made more sense to focus on the user get user loops at Dropbox.

**Sean Ellis** (01:09:50):
I think basically for each business it's just thinking about what's unique for that business that is going to open up channel opportunities and everyone's going to be a little bit, I think jaded from whatever the last thing that worked really well. They're going to think they can apply it in the next business. But after enough times myself, I tend to get the most inspiration by just talking to customers and finding out how did they find it, how do they typically find something like that? And that starts to give me some ideas as well.

**Lenny Rachitsky** (01:10:28):
I think that last point is really powerful and I'm just writing it down. You said, essentially one of your tactics is talking to users, asking them how did you find this product and how do you normally find products like this? Is that the second question? I think it's similar to your [inaudible 01:21:02] test. It's such a simple question, but it's so powerful because how else will people find your product? They go to a place to find stuff like this, and I searched Google for folder sharing. There's so much there that you just skip over.

**Sean Ellis** (01:11:03):
I think the reason that you don't actually hear people taking the obvious route there a lot of times is because, and I used to be in the same thing, that people tend to be either over indexed on qualitative or over indexed on quantitative. So it's like analytics, I'm going to get all my answers from testing and analytics or I'm going to get all my answers from traditional customer research. And I was very much in that initial camp for the first five years of my career. I'm just going to measure everything and test the heck out of things and find stuff that works. But I had a VC who was our lead VC at LogMeIn who just said, "When was the last time you talked to a customer?"

**Sean Ellis** (01:11:45):
Just pushed me to survey and talk to customers all the time. And at first I gave the smart-ass answer, "I don't care what they say, I care what they do." And he's like, "No, you got to talk to him." Then just to appease him, I would try to have a conversation every day because he was in our office a lot and so I could say, "Hey, yeah, I talked to a customer today," when he would ask me. But I started finding that my experiments were so much better the more I talked to customers, and eventually I became very much... The blend of qualitative and quantitative research leads to much better tests.

**Lenny Rachitsky** (01:12:21):
That is another amazing story and insight. It's so interesting that people sometimes think of you as growth hacker guy experiments data, when most of the advice we've been sharing so far is very qualitative driven, very survey driven, targeting customers driven.

**Sean Ellis** (01:12:36):
And it is just really hard to run good experiments when you can't deeply contextualize what's going on.

**Lenny Rachitsky** (01:12:42):
I love this. By the way, I don't know if I knew this. So you helped develop the Dropbox referral program?

**Sean Ellis** (01:12:47):
I was there at the time. Basically, even when I first started talking with Drew. Before I came in, I was like, "I think the way we're going to grow this business is by leveraging the really passionate customer base and that's what we need to double down on." And we had tried a similar kind of referral program at Zabni and a friend who actually started Ring, Jamie Simonoff, previously had a company called PhoneTag way before Ring, and he had actually done a lot of the testing on double-sided referral programs and having incentive on both sides, and he found that that worked the best.

**Sean Ellis** (01:13:33):
And so between what we had tested at Zabni and those conversations with him, I hadn't actually seen PayPal yet at that point, what they were doing. But that was kind of like... It seems like a referral program where we have incentives on both sides is the best way to go. Interestingly, six months before I was at Dropbox, I was at LogMeIn, and I really thought about having incentivized referrals at LogMeIn, but 80% of our new users were coming in through word of mouth. And I had a hundred million devices connected in on our system, and I was just so afraid of breaking this growth engine by adding an incentive that I didn't want to risk it.

**Sean Ellis** (01:14:18):
But at Dropbox it was so early. I would still say no experiment is one person. It happened to be when I was there, I had some insights that I brought in, but ultimately... The guy who built it was actually an intern named Albert Knee and he ended up dropping out, I think, out of MIT to stay with Dropbox for a few years after that. But he was kind of my right-hand guy to collaborating on growth day to day.

**Lenny Rachitsky** (01:14:47):
Wow. I would say Dropbox is the referral program, and the PayPal referral program, as you mentioned, are the two most legendary, studied, copied referral programs out there.

**Sean Ellis** (01:14:56):
Unfortunately, I think that what they don't realize is that before the referral program, Dropbox had amazing referral rate. Companies that are trying to copy it are like, "Why isn't anyone talking about a product? Let's add a referral program with incentives." To me, I think it's a great accelerant when it's already working, but it can't fix it if people don't want to talk about your product.

**Lenny Rachitsky** (01:15:24):
That's an awesome point and something I was just going to ask about and just coming back to this topic of growing engagement, growing referrals as a growth mechanism, what do you look for to tell you that there's an opportunity there? And I'll just answer it, partly I've seen exactly what you just said, which is you need to already have strong word of mouth growth because referrals kind sits on that and gives you a little more incentive to share. So maybe do you agree with that, not agree to that? Any other advice on helping figure out is there some kind of loop here that we can build?

**Sean Ellis** (01:15:53):
Well, one thing I will say is freemium when we first started with it, as I said, we were one of the first with it, so it took me a while to figure out exactly how freemium worked, but to me, freemium towards having a free and a premium version of your product to really work in any business, it needs to be that your free product is so good that people naturally have word of mouth around that product. And then to be economically viable, you have to have a premium product that's better enough and differentiated enough that people are going to upgrade to the premium product.

**Sean Ellis** (01:16:31):
But I think a lot of times people are so worried about the second part that they make the free version not very good and then they're surprised when word of mouth isn't very strong there. So I think you have to essentially have two distinct products that are great on their own. So that would be the one piece, but then obviously companies that have any kind of collaborative layer to them are going to be more likely to work well with referral. And then I think on the engagement side, a lot of it comes down to just the nature of the product.

**Sean Ellis** (01:17:10):
Like Airbnb, you're not going to use it every day unless you're like a vagrant or something and then you wouldn't have money to pay for it. So there's kind a natural usage cycle to products and you want to be able to maximize against that cycle. That's where I was saying, coming back to the hooked model, I think is a really good way to help to have a framework to think about how do I improve engagement. One good counter example to that though of the natural frequency of using a product is Facebook when they change their North Star Metric from monthly active users to daily active users. I think, again, just having what gets measured gets managed.

**Sean Ellis** (01:18:03):
Once Facebook was on a daily active user goal, the team suddenly had a lot more incentive to think about, "How do I bring people back every day and use this product?" Where when it was monthly active users, they kind of only got credit for that person for using once in that month. And even if they used 10 times, they didn't get 10 times the credit. It was just like a, "Oh, that's cool too." But they weren't sort of measured on that. And so I think it was sort of a random decision for Mark Zuckerberg to move from a monthly active to a daily active because they hit 1 billion monthly active users and they're like, "Okay, let's go for 1 billion daily active users."

**Sean Ellis** (01:18:42):
But it had a really big impact on making that product way more addictive to the point where obviously they ended up in Congress or get a lot of pushback. I'm not sure they went to Congress for that, but they got a lot of pushback for having a product that's maybe too addictive. And the same thing carrying into Instagram and some of the other Meta products or basically anything that is highly engaging. So I do think the right incentives can actually help a team to focus on it, but there's going to be sort of a natural usage cycle to any product as well.

**Lenny Rachitsky** (01:19:22):
I'm glad you mentioned North Star Metrics. I actually have a post I will link to in the show notes where I collected the North Star Metrics of 30 different companies to give you some inspiration. I know this is a deep topic of its own, but just when someone is trying to pick their own North Star Metrics, which I 1000% agree, informs so much about how your company operates. It basically focuses everyone's incentives to let's drive this thing. And that changes so much of what you're building. Any just bullet point piece of advice for helping you pick your North Star Metrics?

**Sean Ellis** (01:19:50):
I start with the value that's uncovered through the [inaudible 01:21:02] test. So with a company, I'll say, "Okay, this is what the must have value is according to our most passionate customers, and we want to think about a metric that reflects us delivering that value." And then I'll give them kind of a framework of ways to think about a North Star Metric. But I think it's really important for it to be a time capped group conversation. And if you give a team 30 days, they'll take 30 days. If you give them six months, they'll take six months.

**Sean Ellis** (01:20:25):
But I think generally a team can come up with a pretty good North Star Metric after 30 minutes if they have the right raw ingredients and a checklist of what's important in a North Star Metric. Something that's not a ratio, it's something that can be up onto the right over time. So you can keep managing it and feeling good. It should correlate to revenue growth, but revenue shouldn't be the North Star Metric, but as you grow value across your customer base, you should be able to grow revenue at the same rate. And so there's-

**Sean Ellis** (01:21:00):
Revenue at the same rate. And so there's some other things, but I think that would be the most important, is that it's something that could be up and to the right over time and reflects value that you're delivering to customers.

**Lenny Rachitsky** (01:21:12):
Awesome. And I was going to ask about revenue in your opinion there. And so your advice is don't make revenue or North star metric?

**Sean Ellis** (01:21:17):
No. Even Amazon, and again, this is just what I know of Amazon's as being but monthly purchases, but someone else might say Amazon, no Amazon's is GMV or something. But I think monthly purchases is great because it maps to value that people are getting from Amazon. And so even if I spend say $1000 on a TV set with Amazon versus $3 on a or $10 on an electric toothbrush, Amazon from the consumer's perspective delivered the same value. I needed something, Amazon helped me find that thing. And so units of value from the customer perspective I think is more important than overall revenue. But clearly with Amazon focusing on driving more monthly purchases, at least on their store side of the business, that has helped them become one of most valuable companies in the world. So I think focusing on value is, revenue should be a product of doing things. Right. It shouldn't kind of guide your day-to-day actions.

**Lenny Rachitsky** (01:22:29):
To make this even more concrete for people, are there some North star metric examples you could share that you've seen that are good? Like say for Eventbrite or Dropbox or any companies you've worked with? And I'll share one real quick as you're thinking about it. At Airbnb, our North star metric was nights booked. And so it's similar to Amazon. It's not like the money Airbnb made from bookings, but it's like nights booked and it was really, and basically every experiment ran is like, is this increasing night booked or is this decreasing night's book?

**Sean Ellis** (01:22:57):
And so that's a really good marketplace one. Uber obviously weekly rides. I'm always surprised with the Airbnb, that there's not a kind of time piece on it, like the weekly rides that you have with Uber, but maybe it's because it's such an infrequent use case on travel that it doesn't make sense to focus on. Yeah.

**Lenny Rachitsky** (01:23:19):
Yeah. Why is the timeframe important to you? Why do you encourage that?

**Sean Ellis** (01:23:24):
Just daily active users, you saw the difference between monthly active users and daily active users could change behavior a lot at Facebook. It gives you a quantifiable way, if you're just kind of taking an aggregate number over time, it always looks like it's going up.

**Lenny Rachitsky** (01:23:41):
So it's an engagement element of how often are they engaging.

**Sean Ellis** (01:23:44):
Yeah. But,-

**Lenny Rachitsky** (01:23:46):
Any others? Any others real quick?

**Sean Ellis** (01:23:47):
Yeah, I mean, I didn't really think about North star metrics when I was at Dropbox and Eventbrite, like the term itself, but I was thinking about what is a valuable experience with Dropbox and how do I get people to have that more time? But I don't even know what they go with today, but maybe files in Dropbox, files access might be better than just files hosted. And then probably for Eventbrite, again, I would say weekly tickets or something like you could say weekly events, but then you have events that don't sell any tickets where weekly tickets would be more likely to reflect, events are going to be happy if they're selling tickets and yeah.

**Lenny Rachitsky** (01:24:30):
Okay. Sean, we've gone through so much stuff. I'm trying to limit how many more questions we get through just so that we don't,-

**Sean Ellis** (01:24:37):
We're going long.

**Lenny Rachitsky** (01:24:38):
We're going long, which is amazing. I think there's so much value here that we're collecting for folks. So let just ask maybe a couple more quick questions. One is actually from Andrew Chen who is currently partnered at a partner at A16z. He wrote about growth for the longest time. I think he helped popularize growth hacking for better or worse with his article and it being the future of VP of what is it? Growth Hacking is the new VP of marketing, right, Is the title. So he actually had a question for you that he shared with me. His question is, growth strategies have changed a lot over the past decade. What is the biggest difference now versus when you first started working on growth?

**Sean Ellis** (01:25:14):
When I first started just being data-driven on customer acquisition was enough to win and being test and data-driven on customer acquisition. All the other companies were like CPM focused and so we could do really well just with lots of testing and some creativity in how it all worked. But that over time as, now I would say most online marketers are very data and test drive. They know they need to do lots of testing. And so to be competitive today, you actually have to be able to be super efficient at all parts of the business.

**Sean Ellis** (01:25:57):
So again, like how you convert, retain, monetize, and that's when it gets hard. Getting a marketing team to be data and test-driven is pretty easy. Once you start getting into activation and referral and engagement and retention, now you're talking about the overlap between marketing, product if it's B2B, bringing sales in there, customer success, and those teams are not used to working together. And so it's really hard to drive the collaboration that's needed to have an effective testing program across the entire growth engine. And that's pretty much any business that's been successful with it, implemented it super early in the business, and so very few later stage companies have been able to make much progress in replicating that type of approach.

**Lenny Rachitsky** (01:26:55):
It's just gotten harder basically. Things are just getting harder.

**Sean Ellis** (01:26:58):
It's gotten harder, but I think it's possible. So it's what I obsess about all the time, is how do you get cross-functional teams working together on growth now? And it's still a huge advantage when you can pull it off.

**Lenny Rachitsky** (01:27:13):
Okay. Totally unrelated question, going in completely different direction as we close out our chat. So you came up with ICE, the very popular way of prioritizing work, which is crazy. I did not know that until I started prepping for this conversation. What's your thoughts on RICE, the intercom version of ICE, where R stands for reach, I believe.

**Sean Ellis** (01:27:35):
Yeah.

**Lenny Rachitsky** (01:27:35):
Thoughts?

**Sean Ellis** (01:27:36):
So I think it's an unnecessary addition, but maybe I'm just being protective of my original idea, that the I in ICE is impact and it's essentially saying best case scenario, how much impact could we get from this? And reach is a super important part of impact. And so I think it's already factored in the I in ICE. And so I think if there's anything that I would be accused of, it would be being over simplifying things and I'm not saying them, but there's a lot of people who approach things with, there's got to be a more complex way to approach this and that's just not me. And so yeah, more testing is better.

**Sean Ellis** (01:28:21):
No, it doesn't just work like that. I mean, better tests are better than bad tests, but just if you have to hold yourself accountable to anything, more testing would be better. And so I think one just quick note on ICE is that in order to be able to effectively run a high velocity testing program, you need to be able to source ideas from across the company. And that's why I came up with ICE, that if you're having people submit ideas and you can't tell them why their idea was not chosen, they're just going to get upset and you're going to waste a lot of time. But if you have a systematic way of being able to compare ideas, it's more likely that people will be able to get it and they'll be able to come up with better ideas.

**Lenny Rachitsky** (01:29:06):
I love the way you think, Sean. I have a post on prioritization where I basically just make the same argument that there's all these complicated ways to prioritize. In the end, it's just impact, confidence, and effort and it really works and rarely is more work. On the other hand, I do also have a guest post called DRICE by these two guys called Detailed RICE, which actually I think is a really good point where sometimes it's worth spending like 30 minutes per idea to just really estimate how long will it take to avoid doing things that are just going to not work and very unlikely. So we're basically doing this reach piece and spending the time too. Right. And I think there's a lot of good value there.

**Sean Ellis** (01:29:45):
Yeah. And what I thinks going to be really interesting is that over time, I think AI is going to actually change our ability to model out potential outcomes on experiments and start to, whether it's a more informed way of doing ICE or replaces ICE, that ultimately probability of outcomes is something that AI will be pretty good at.

**Lenny Rachitsky** (01:30:12):
Well, amazing segue to the final question. The actually final question is I wanted to ask you about any ways you've been using AI or ways you think AI will impact the work you're doing or other folks are doing? And maybe you just answered it, but you tell me.

**Sean Ellis** (01:30:26):
No, I'll touch on a couple. One is that probably the funnest way that I'm using it today. Obviously I've done it for coming up with experiment ideas, but the funnest way I personally use it is I get a lot of people asking me for advice, and I don't have very much time to answer with thoughtful answers to people. And so almost every question that I get, I go to ChatGPT say, how would Sean Ellis answer this? And it gives me an initial draft to make a couple of tweaks and definitely allows me to answer a lot more. So it helps to have a book that's indexed in there and lots of writing.

**Lenny Rachitsky** (01:31:07):
That is so funny, and that the question, that's as simple as the prompt is how would Sean Ellis answer,-

**Sean Ellis** (01:31:11):
Yeah, because then a lot of times it'll say, Sean Ellis, author of Hacking Growth dah, dah, dah, believes that, and then it'll obviously pull that part out in the answer.

**Lenny Rachitsky** (01:31:21):
Oh my God. So you're one step away from a Chrome extension or something that just automatically plugs that into your,-

**Sean Ellis** (01:31:26):
Yeah, exactly. And I can even start to have my personal assistant maybe start to answer some of those questions as me, but I'm a little bit afraid to send something without reviewing it first because,-

**Lenny Rachitsky** (01:31:37):
Absolutely.

**Sean Ellis** (01:31:38):
Sometimes there's stuff that's pretty different from how I would answer it, but longer term, I actually think, as I said, I think the cross-functional challenge to growth is a thing that holds a lot of companies back from being able to implement this a bit later. Mostly product teams don't want to get direction from marketing teams. Marketing teams don't want to get direction from product teams, and maybe a growth layer can help to do these things, but I find that if AI is essentially saying, you're underperforming in this area of your business, you should drive some experiments in this area. It's a lot harder to kind of let ego get in the way when it's kind of dispassionate recommendations from a system.

**Sean Ellis** (01:32:22):
And so I actually think, I think the ability to come up with great experiments is going to keep growing with AI and identifying opportunities. And then obviously the analytical AI side of things is going to be really exciting in terms of being, I do find with most companies, once we get a real high velocity of experiments going, the bottleneck ends up happening more on the analysis side. And I think AI will help a lot with that as well.

**Lenny Rachitsky** (01:32:50):
Super cool. These are awesome examples. Okay, Sean, is there anything else you wanted to share or leave listeners with before we get to our very exciting lightning round, which we'll go through real fast? Because we've gone very long and I want to let you go.

**Sean Ellis** (01:33:01):
Yeah. As I've gone through and done a lot of workshops and programs with companies, I keep coming back to this advice that I heard from guy Oleg Yakubenkov, which is it often comes down to asking the right question at the right time in how you figure things out. And he's a former data scientist from Meta and so where he basically boils data science down to learning how to ask the right questions. And so I actually have a course with him called Gopractice.io, where that's really the big benefit of the course, is to learn how to ask the right questions and yeah, you learn how to query them and amplitude, but more importantly, being able to ask the right question. I think it's kind of cool to hear that from a data scientist from Meta, the importance of that.

**Sean Ellis** (01:33:49):
But every time I'm going through exercises in my workshops, it almost always comes down to people who aren't able to come up with the right or a good answer in a business. It's because they're not asking the obvious question. And as soon as they have, like why aren't users downloading the software? Let's just ask them that question. That would be one example from my workshop. Who considers the product a must have? That part of getting, to figuring out the must have kind of benefit that then allows you to hone in on product market fit. And so yeah, right questions, right time I think is a really important way to think about growth and even getting to product market fit.

**Lenny Rachitsky** (01:34:40):
I love this advice because I think it gives us a glimpse into how your brain has developed these really seemingly simple ideas that end up being really powerful. And it feels like the advice is just think a lot about the question you need to ask because that'll get you just something that a lot of people just kind of under think or don't. There's things, maybe it's too simple.

**Sean Ellis** (01:35:02):
Yeah, or they just jump right into the solution side of things where they're not really trying to understand what's going on.

**Lenny Rachitsky** (01:35:08):
Yeah. Yeah. Amazing. Okay, well with that, Sean, we've reached our very exciting lightning round. Are you ready?

**Sean Ellis** (01:35:14):
I am.

**Lenny Rachitsky** (01:35:15):
All right. Our first question is, what are two or three books you've recommended most to other people?

**Sean Ellis** (01:35:20):
Increasingly, I'm recommending a book called Presenting to Win that's been around forever, but it really helped me with my presenting. And so of course when I'm out traveling, I'm often sharing the stage with other speakers and yeah, I like to recommend that one to them. I've already talked about Muriel's Hooked. I recommend that always, and we'll just stick with two. That's good two.

**Lenny Rachitsky** (01:35:47):
Within Presenting to Win, is there one tip that sticks with you of here's something that helped me be a better presenter?

**Sean Ellis** (01:35:52):
Ultimately, confidence in presenting comes down to having very well organized information that you're going to present. And when you organize it correctly, you are much more likely to deliver it with confidence. And so he basically says, if I had a presentation to do and I had an hour to present, I'd spend 55 minutes creating the right presentation and then five minutes practicing it. But yeah, there's a lot more to it, but,-

**Lenny Rachitsky** (01:36:18):
Wow. Amazing. Okay. We'll link to that book in the show notes. Do you have a favorite recent movie or TV show you've really enjoyed?

**Sean Ellis** (01:36:25):
Yeah, so I've been binging the Olympics. I love that, just watching people who worked their ass off for years and then maybe have 30 seconds to do the thing that they worked hard for. So Olympics have been awesome. And then the movie, I actually just saw Blackberry, I don't know if you've seen that.

**Lenny Rachitsky** (01:36:42):
Oh, the story of the Blackberry?

**Sean Ellis** (01:36:45):
Yeah. I mean obviously we all kind of know the story, but it was so really, I mean, it's a classic example of product market fit and then not. Actually, it's probably even a counter example to the dangers of the how would you feel if we could no longer use this product? Pretty sure most people would've said on Blackberry, it's the keyboard, and until iPhone came along, the keyboard was super important and then suddenly it wasn't. But yeah, it's also interesting on egos and other things that everybody's getting friendly in the beginning and then egos take over and things get a lot harder later on.

**Lenny Rachitsky** (01:37:23):
That was actually a really good movie. There's also an amazing movie called Tetris. For some reason, I think of these two together,-

**Sean Ellis** (01:37:29):
Okay.

**Lenny Rachitsky** (01:37:29):
About the story of Tetris, and it's a similar parallels to those two movies.

**Sean Ellis** (01:37:33):
Awesome. I'll have to see that one.

**Lenny Rachitsky** (01:37:35):
Next question, do you have a favorite product you've recently discovered that you really love?

**Sean Ellis** (01:37:39):
I forget the name of it, but I think or it's called Pack Gear Hanging Suitcase, and I basically like, I've done almost 100,000 miles in travel this year, and I have another trip scheduled for next week, and I love it because it basically has all my clothes folded in this little insert that goes into my suitcase, and then I just pull it out and hang it up and just makes travel way easier.

**Lenny Rachitsky** (01:38:06):
It's called the Pack Gear Suitcase?

**Sean Ellis** (01:38:09):
Pack Gear Hanging Suitcase Organizer.

**Lenny Rachitsky** (01:38:12):
So cool. Going to check that out. Two more questions. Do you have a favorite life motto that you often come back to that you find useful in work or in life? Maybe share with friends and family sometimes.

**Sean Ellis** (01:38:22):
Focus on reputation and learning over earnings has served me super well that, and I'll give you an example. I had two companies when I was doing a lot of this early interim stuff yeah, 10 plus years ago, and I had two of them where I talked to the founders afterwards and I could tell they weren't that stoked on my contributions. And I offered a full refund to both of them with a thought that like I have this reputation that's, like I randomly pulled the number and said, my reputation worth $5 million. Why would I possibly mortgage that reputation for $20,000? And so one of them, I gave the check back to them and he was happy to take it, but he had said, "Oh, you can make it up to me. You don't have to give me the check, just make it up to me by continuing to help me for an unlimited amount of time going forward."

**Sean Ellis** (01:39:20):
I was like, "Oh, take the check." And then the other one said, "No, no, I'm actually really happy with what you did. We're fine." But the two VCs who had made those introductions were the first two to give me term sheets when I went out to raise money for my company. And the pre-money ultimately ended up being valued at more than double what I had put my personal reputation at. So I, yeah, I think the, yeah, unfortunately the company didn't do that well itself because of the elusive product market fit challenges. But yeah, the learning there of just focus on learning and reputation. Reputation opened the door to more and more learning. And as I got more learning, the reputation grew. And so yeah.

**Lenny Rachitsky** (01:40:04):
There's a really good corollary there with customer support. If someone just hates your product and wants a refund, just give them a refund and let them move on versus being upset.

**Sean Ellis** (01:40:12):
Yeah, absolutely.

**Lenny Rachitsky** (01:40:13):
I love that. Final question. You mentioned to me before we started recording that you were maybe indirectly responsible for TikTok's success. Maybe share that story.

**Sean Ellis** (01:40:24):
Yeah, I mean, I don't want to overstate it, but I yeah, my trip around the world that I did three months ago, I think I wrapped it up. I met with the original founding growth team at TikTok. They're based in Singapore and they had, I can't remember what the previous product was called, but they started with the previous product. And then when TikTok came, they were in place to be the initial growth team for TikTok, and they basically said all the early stuff we did to grow TikTok was based on your writing. So that was before the book came out.

**Sean Ellis** (01:40:59):
So it's a lot of just blogging that I had done, but it was really, really cool to get that feedback that, yeah, I've always said I have some really good wins, a lot of unicorns that I helped, but none of the really, really big guys. And then to hear that, it felt really good to know that I played some kind of role in TikTok. Of course, almost the same week they told me that that was Congress having TikTok ban conversations. So it was good. And at the same time, knowing that maybe if they hadn't read my stuff, Congress wouldn't be wasting their time on TikTok bans.

**Lenny Rachitsky** (01:41:36):
Oh man. Bittersweet. I hope they don't pull you into some hearings. Sean, this was incredible. This was everything I was hoping it'd be. I feel like we collected so much wisdom here for folks to them figure out product market fit, find product market fit, iterate, grow their products. So happy we did this. Two final questions. Where can folks find stuff that you're up to if they want to learn more and maybe work with you in various ways? And how can listeners be useful to you?

**Sean Ellis** (01:42:00):
Awesome. Yeah, so Seanellis.me is the website where I kind of link to all the things that I'm doing. And so that would be one place where, and there's contact forms on there if anyone wants to reach out. Obviously LinkedIn people can contact me there. And then I did mention GoPractice. So gopractice.io. Really cool way to learn growth through a simulated environment of being able to try to grow products. So check out GoPractice and maybe go to Seanellis.me. When this comes out, I'll put a special offer on there for Lenny's listeners so you can save some money.

**Lenny Rachitsky** (01:42:36):
And there's also a LLM AI kind of,-

**Sean Ellis** (01:42:40):
I wasn't directly involved on that one, but there's yeah, there's some other really cool stuff that Oleg and the team are doing. Data-driven product management, and the user growth programs are the ones that I helped with.

**Lenny Rachitsky** (01:42:53):
Awesome. And then for folks, if they're wondering, do you do advising? How do you work with companies in case they're like, hey, I need Sean.

**Sean Ellis** (01:43:00):
Yeah, I mean, so the sweet spot for me on companies that I go hands-on with are ideally pretty early just after they get to product market fit and now you know how to measure it. So if you're kind of pre-scale, but you're seeing that 40%, or even if you're a bit earlier than that, we can start talking earlier. But to me, that's my favorite time to get in there, build it right from the beginning. It's so hard to retroactively do these things. And I'll go in for three to six months and I'm all in full-time, one of the team trying to really help build traction in the business. I do one of those every maybe year or maybe every year or two because I purposely burn myself out and then have fun doing more lecturing and workshops and stuff.

**Lenny Rachitsky** (01:43:50):
Awesome. Well, you might get a flood of requests after this comes out. Hope you're ready. Sean, thank you so much for being here.

**Sean Ellis** (01:43:57):
Awesome. Thank you, Lenny. I really appreciate you having me on.

**Lenny Rachitsky** (01:44:00):
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 LennysPodcasts.com. See you in the next episode.

---

## [12/16] Land your dream job in today’s market: negotiation tactics, job search councils, and more | Phyl Terry (Author, “Never Search Alone”)

**Phyl Terry** (00:00:00):
When you're looking for a job, you need a spear and not a net. What happens when we're building a product? Same thing, right? We want this product to be for everyone, but we've learned with product market fit that doesn't work. We need a narrow, clear focus.

**Lenny Rachitsky** (00:00:12):
How did you realize this is a really powerful method versus the way people normally look for jobs?

**Phyl Terry** (00:00:16):
While it's hard to figure out your candidate market fit, it's also a relief to know it's not about you. So what I ask people to do is I ask them to think about what they want and what they don't want. Now, you might not think that that's a radical step, Lenny, but most people don't do that. When they get laid off, they spray and pray.

**Lenny Rachitsky** (00:00:31):
This is very much like a product person thinks about new product.

**Phyl Terry** (00:00:34):
There's no I in team. Well, there is an I in village, and the I in village is that when you start to interview and negotiate, you've got to be in charge. I want you to play to win, not not to lose.

**Lenny Rachitsky** (00:00:45):
Is there anything else that you think might be helpful to people looking for jobs?

**Phyl Terry** (00:00:49):
If someone did this, it would blow my mind. I would hire them on the spot.

**Lenny Rachitsky** (00:00:57):
Today my guest is Phyl Terry. Phyl is the author of Never Search Alone, which I've seen so many people reference as the most impactful thing they read for helping them find a job. Once you listen to this episode, you'll see why.

**Lenny Rachitsky** (00:01:09):
Prior to this book, Phyl was on the founding team of the first company that Amazon acquired back in the '90s, and then was CEO of the pioneering product and customer experience consulting firm Creative Good for over 15 years, where Phyl and the team had companies like Apple, Facebook, Microsoft, and hundreds of other companies as customers. Phyl also co-authored Customers Included, has written articles for the Harvard Business Review, and has delivered more than 500 keynotes to companies like Apple and Microsoft. This episode is for anyone struggling to find a job or unhappy in the job that they're in. I promise you, the time you put into listening to this episode will help you find a job that you love.

**Phyl Terry** (00:02:05):
Oh, what a pleasure. I'm such a fan of yours, Lenny.

**Lenny Rachitsky** (00:02:08):
I'm thrilled to be here.

**Phyl Terry** (00:02:09):
Thank you.

**Lenny Rachitsky** (00:02:10):
I'm a huge fan of yours, and I think by the end of this I'll be an even bigger fan of yours. What I'm hoping that we can do in our chat today is to help people who are struggling to find a job and especially struggling to find a job they love, actually find that job with actual tips that they can use today in this week. How does that feel to you?

**Phyl Terry** (00:02:29):
That's great. We have some practical time-tested stuff that I've developed over the last 25 years with leaders in Silicon Valley, especially in the product community. We've really brought a product lens to reinventing the job search, Lenny.

**Lenny Rachitsky** (00:02:41):
This is a perfect Venn diagram of topics then.

**Phyl Terry** (00:02:43):
Yes.

**Lenny Rachitsky** (00:02:45):
There's a lot of ways I can approach this. I want to start with a question about something that you run, something that you created, something that has had a lot of impact on a lot of people: Job Search Councils. What is a Job Search Council?

**Phyl Terry** (00:02:56):
It's a support group of six to eight job seekers, so product people, but it is not just for product people, but the product community really owns this, it comes out of the product community. And what they do is they commit to being with each other, to supporting each other, go through the process of looking for a job and I lay out a methodology, how to figure out your candidate market fit, one of the big concepts in the book. As well as how to play to win, not not to lose. You know what I mean? People are scared in the job search. Here's the thing, Lenny, that people really have a hard time believing, everyone, I mean everyone, and I work with some of the most senior people in Silicon Valley, I'm talking about CEOs of public companies, I'm talking about chief product officers, VPs of product at great brands, everyone, no matter who they are, Lenny, feels insecure and anxious in the job search. And if you do it alone, it magnifies that.

So with Job Search Councils, there's this great hack, I didn't invent this, it's baked into human psychology, if you put anxious people together and ask them to be open and vulnerable and to ask for help, and we'll come back to asking for help, it actually flips the anxiety and the fear into hope, into motivation, into accountability and confidence. It's like, "What [inaudible 00:04:20]?" It's fantastic. My mother taught me this, we can talk about her at some point, but it's really powerful.

**Lenny Rachitsky** (00:04:28):
That's amazing. Your whole book is called Never Search Alone, so the whole premise of how you recommend people look for jobs is to look for jobs with other people. You mentioned maybe it's your mom, maybe it's something else, how did you realize this is a really powerful method versus the way people normally look for jobs?

**Phyl Terry** (00:04:44):
Yeah. I set up my first council more than four years ago. I set up the first CEO council for internet CEOs in the mid '90s, and then I've run product and CEO council since. But it goes all the way back to my mom. 1960, Lenny, 1960, what is that? 64 years ago? In the San Fernando Valley, my mom was a newly-minted elementary school teacher, and she put together a council of teachers. That group met for 50 years, 5-0, until the year she died. They worked together to ask for help and support each other in their careers. And Lenny, people say to me, "Does this Never Search Alone method work in a tough job market?" And I'll tell you, it comes out of tough job markets. Absolutely, yes. Starting with my mom.

**Phyl Terry** (00:05:39):
So in 1974, my dad... in 1976 he left and it was just me and my mom and my sister. He had insisted that she stop teaching, so she lost her tenure and everything. Her candidate market fit was terrible, but she had her council. It was the mid '70s, and Lenny, you probably can't imagine how hard it was for a single middle-aged woman with kids looking for a job in Los Angeles in the mid '70s. It was terrible. But she had her support group and they held her hand. The job she could get, guess what? She had to be an entry level teacher again after having been a senior teacher coaching and advising. It was really tough. So that had a big impact on me.

**Phyl Terry** (00:06:22):
And then when the dotcom bubble burst, I was running Creative Good, and suddenly there was a depression. And suddenly I'm helping hundreds of people try to figure out their job search. So it's been going for a number of years, but it goes back to my mom. I dedicate the book to her and the community we've built.

**Lenny Rachitsky** (00:06:40):
That's beautiful.

**Phyl Terry** (00:09:15):
We have launched more than 2,000 of these Lenny, 2,000, and they're completely free, completely 100% free. It's volunteer-driven. We have hundreds of pages of tools. We've done a Slack community. We have a free matching program. You can sign up and we'll match you and put you in a council. Then we'll give you training, live training. There's so many volunteers. We have 20,000 hours of volunteer work that's already been put into this, Lenny.

**Lenny Rachitsky** (00:09:42):
You said that it's free. I know these things aren't free to run.

**Phyl Terry** (00:09:46):
Yeah.

**Lenny Rachitsky** (00:09:47):
I saw somewhere that you mentioned that basically all your book sales and also just your own money you spend on running these councils. Talk about that for a little bit.

**Phyl Terry** (00:09:55):
Yeah, actually two times the book sales are going into running this. So we have 20,000 hours of volunteer time, but you also have to pay for technology and you have to pay for certain kinds of support. Later we will talk about this, and we're always looking for more volunteers. I have a process for people to apply if they're interested in being a part of the team. But yeah, I have dedicated this to my mom, and I'm giving everything to it.

**Lenny Rachitsky** (00:10:25):
What's the general structure? If someone's trying to think about how these things work, if they want to join these as we go through it, how do they work?

**Phyl Terry** (00:10:31):
Okay, so you apply at phyl.org, P-H-Y-L, Phyl with a Y. Again, it's free. We match you behind the scenes. Now, when you apply, we ask, "First of all, are you in a job and looking or are you out of work?" Because we separate those two because they have different cadences. If you're in a job and looking, we call you a slow seeker because you have a full-time job and you can't work as quickly. If you're out of work and looking, we call you a fast seeker and we put you in different groups. Fast seeker or slow seeker. We also ask though, are you willing to be a moderator? Every council needs a moderator, and every moderator is a job seeker who volunteers to do that. If you volunteer to moderate, first of all, you get matched faster, and secondly, you get more training and support.

**Phyl Terry** (00:11:18):
It's a little bit more work for a lot more benefit. We've gotten 2,000 moderators, Lenny, it's amazing. And we feel like we're just beginning. So you apply, you get matched, and then you go through an orientation program that we run live where we tell you how this works and what to expect in your first meeting. And then there's a whole set of agendas and materials and everything in the book as well as everyone gets a free workbook, a 100-page workbook after they join the community with all of the templates and guides and questions. And then the moderator pulls you together, you work on Zoom or whatever technology, it's remote typically. And you do a first meeting, we call it meeting zero, where you're open and vulnerable. People share stories about their lives and who they are, builds trust and get a sense of who people are. And then you move into the process. You meet twice a week typically if you're in a fast seeker council and every two weeks if you're in a slow seeker. So that's the start of the answer. Does that help you think?

**Lenny Rachitsky** (00:12:22):
Yeah, really helpful. And then you basically are on this council until you find a job, I imagine.

**Phyl Terry** (00:12:26):
Yeah.

**Lenny Rachitsky** (00:12:27):
Awesome.

**Phyl Terry** (00:12:28):
Yeah.

**Lenny Rachitsky** (00:12:28):
Is there anything you can share around the impact you've seen? The reason I reached out to you to come on this podcast is I just started seeing people mentioning that they found a job and maybe the thing that helped them most was your book and being on one of these councils. I imagine there's a lot of stories you hear and a lot of numbers you could see of just people succeeding going through, so what can you share about just the impact you've seen?

**Phyl Terry** (00:12:51):
Well, I posted on LinkedIn today that I was going to be on your podcast and I asked people if they wanted to share stories with me, and over email and LinkedIn, I've been flooded with stories from people who are in the process or people who did it. If you like, I can pull up and share a few of those if that would be helpful.

**Lenny Rachitsky** (00:13:09):
Yeah, if there's a few you have there, that'd be really sweet.

**Phyl Terry** (00:13:12):
Okay, so Justin Meats is a chief product officer who's gone through the process and he posted on LinkedIn today. He said, "As a product leader, I love how it has you apply the product process to your career." This comes out of the product world, it's a product lens on the job search, and it's for everyone, but it really makes sense for product people. And he says, "Not only does your JSC help bounce ideas and help your job search, they also help you keep going and accountable when you're low on emotional energy."

**Phyl Terry** (00:13:46):
I talk about this in the book, Lenny, I say, "Look, most people think, 'What's the most important thing to manage during your job search?'" They think, well, maybe it's their resume or LinkedIn profile or their ability to network or candidate market fit, a concept I introduced I think is really important. All those things are really important, but the most important thing to manage is your emotional balance. I talk about your emotional balance sheet. And for many job seekers, they have more liabilities than assets on their old balance sheets. They have more fear and anxiety, they feel demoralized, they have a hard time going. That's why these things are so important.

**Phyl Terry** (00:14:24):
He also says, "Hey, it's a journey, and the more you embrace it, the more you learn about yourself." And he says... and this is important Lenny. I don't have a magic wand that especially in a down market today that magically gets a job. It's hard. The job search, it can be hard and humiliating at times. I know. This is why I want to create this community, why we're doing this. We want to give you a place where you can really get the support when it's hard and humiliating. But the process will ultimately set you up for success if you follow it.

**Phyl Terry** (00:14:58):
This one woman who just started, she's a senior product leader in a major financial institution, and she said she couldn't believe the level of support and openness and vulnerability. We really emphasize people being open and vulnerable, and I've learned a lot about how to create that environment. It ties back to asking for help, which I know we'll talk about more at some point. But when you create that, it's amazing what people can do together, Lenny. Amazing.

**Lenny Rachitsky** (00:15:31):
Just to reinforce this point, people listening may be like, "I'm just going to keep looking for a job. I'll use all this advice. I don't need a group." What's your best pitch, again, to help people see the value of doing this in a group and joining a council or starting a council?

**Phyl Terry** (00:15:45):
I acknowledge that that's a reaction that some people have. That's totally valid. This is unusual, what we're doing here. This is not how people look for a job. We're trying to disrupt the job search process. Lenny, this is my quick story. We had a great interview with a couple. Two of them were product leaders. They had met at Amazon and then had gone to have great careers. They both got laid off. The woman joined a Job Search Council right away. She loved it, she raved about it. Her husband, who was also an engineer, was a little more introverted. He's like, "Ah, this isn't for me." She said, "No, listen, you won't... " And finally he read the book. Because the book, it works for the product mind and for the engineering mind, it makes sense. He said, "I'll join a council, but I'm not going to be field connected to people. But I'll do this because you asked me to."

**Phyl Terry** (00:16:43):
He sat in the interview, we have it up on the side, he was like, "Oh my God, I couldn't believe it. The level of trust we created right off the bat I've never experienced in my life. It's really truly accountability, the motivation, the ability to hang in there." And so I say to people, " Look, try it." We have all these videos on our website with all these people talking. Go look at it. If you want to read the book first and see if you think this makes sense. But try it. You will be shocked in a positive way. You'll discover how delightful it is.

**Phyl Terry** (00:17:25):
We live in a world where there's increasing loneliness, Lenny. There's so much research about this, the Surgeon General's book, everybody talking about... And it's more detrimental to our health than smoking cigarettes. Bowling Alone famously came out 25 years ago. We live in a world where people have not experienced community in a powerful way. I don't mean message boards, I mean real community. And I think you have a sense of this because you do real community. And that's what we're talking about here. It's real community but with some practical tools and techniques, which we'll talk about. What do you think? Is that a good response to the-

**Lenny Rachitsky** (00:18:08):
I'm sold. I don't need a job, but I want to join one. You also just had a really beautiful way of describing these programs as a safety net for people.

**Phyl Terry** (00:18:16):
Yeah.

**Lenny Rachitsky** (00:18:16):
Does that ring a bell?

**Phyl Terry** (00:18:18):
If we go up to the 30,000-foot level, what are we doing here? What's our mission? We're building a private safety net for all those who've been laid off or let go. Look, we're not going to do what the government does with unemployment insurance, we're never going to be able to do something like that. But the government's never going to be able to innovate around how to actually look for a job. That's where we come in. We are trying to build this. We talked about this earlier, Lenny, creative destruction is this economic concept that sits at the heart of capitalism. Creative destruction basically says, "Under capitalism, it's dynamic. New products and services displace or disrupt old products and services, companies and methods." It's why our economy has grown sixfold over the last a hundred years. It's remarkable. It's why we have this amazing multi-trillion dollar economy. But it comes with some negative unintended consequences, which is that people both in jobs and out of jobs, they're anxious and fearful. There's no program that addresses that.

**Phyl Terry** (00:19:20):
That's what we're going after here. We're trying to be the solve for the unintended consequences of the thing that is so positive in many ways and that we as product people love because we get to build new products and displace old products. I'll just say one more thing. The reason you know this creative destruction works so well is if you compare our economy to the late Soviet Union's economy. They were a planned economy with no creative destruction. So there was no innovation, and eventually it just failed. It just collapsed. It's remarkable, this is a huge country with a massive military and nuclear weapons, but they couldn't make their economy work. Why? Because they didn't have this element. So it's something to celebrate, but as we celebrate it, we need to have something that addresses the negative unintended consequences. All of us who benefited from this, I think it's our duty to do something about it.

**Lenny Rachitsky** (00:20:16):
That is beautiful. You're very good at this. Let's shift to talking about tactics. Let's talk about some of the things that you've shared. So you've mentioned things like candidate market fit, playing to win. Go wherever you want to go. Let's pick a few and then dive in.

**Phyl Terry** (00:20:29):
Candidate market fit is probably the most important job search tactic in the book, aside from the Job Search Council, and it may be the thing I'm known for. When I die, they coin candidate market fit. So here's the thing, and this is why this is so important in a down market, when you're looking for a job, you're in a marketplace with supply and demand characteristics. So if there's a lot of supply, which there is right now in the tech world because there's been a lot of layoffs, the overall economy, there's been net job additions, Lenny, but those have been primarily in healthcare and government. There've been net job losses in tech. We could talk about why that is, but that's the world that we're in.

**Phyl Terry** (00:21:17):
So let's say you're a director of product. Two years ago when the economy was great in tech and the job market was great in tech, you could probably get a VP of product role. What about today? Well, today your candidate market fit's been pushed down because there's a bunch of VPs of products who are going to take a director role. Guess what? That means you might not be able to get the director role you might need to get a senior manager role or whatever. Now, the important thing about this is it's not a personal segment about you. It's the marketplace. And that's what so many people today in their notes to me said, that it was such a relief for them. While it's hard to figure out your candidate market fit, it's also a relief to know it's not about you.

**Phyl Terry** (00:21:59):
So what I ask people to do is the first radical step I ask them to take is to think about what they want and what they don't want. Now, you might not think that that's a radical step, Lenny, but most people don't do that. When they get laid off, they spray and pray. That's the typical, "Let me just... " Wait a minute, just take a moment. They're like, "Oh, don't slow me down." I'm like, "I'm going to slow you down to go fast." In fact, what our data shows is that the average job search in the Job Search Council from beginning to end is three months. If you look at the national data for job search, it's three to six months. So we are at the very low end of the national average. So this is not a slow down, take two years, whatever. No, no. Most people need to put food on the plate, so it's a slow down at first. And we as product people should understand this. You want to think about your strategy. You want to understand the marketplace, your customer, the product market fit. You're not going to just go...

**Phyl Terry** (00:22:59):
You're going to iterate. First step, what do you want and what don't you want? That's the Mnookin two-pager named after Allison Mnookin, who was a member of one of our product councils. So we run product councils and general management CEO councils for people in jobs. That's a paid program that companies pay for. It's out of that program helping those people that I developed this methodology that we're now as a community giving to the world. So Allison, she was the GM at Intuit, and then she spun out a division and ran it as CEO, and she's now a professor at the Harvard Business School. And about 15 years ago, she was in transition and we talked and she created and we created this thing we called now the Mnookin two-pager. I told her, "Allison, I'm going to make your name famous." That's my job. I love her.

**Lenny Rachitsky** (00:23:46):
Great name.

**Phyl Terry** (00:23:46):
She's wonderful. And it's just a simple thing, what do you, what don't you like and you create it and then you share it in your council. And here's something cool, Lenny. Let's say you and I are in a Job Search Council. You share yours, I share your mine. Now you see a few things about what you don't like. I'm like, "Hot damn, I also don't like those. I forgot, I got to add that." Or you say a thing about what you like, you're like, "Oh, wow, no, that's really important to me, and I left that out." So that's part of the shared learning environment. I'm asking you to do these, but with others who you're walking it through.

**Phyl Terry** (00:24:16):
Now, once you have done that Mnookin two-pager, and it's a draft, you don't have to get it fine, and not everyone knows exactly what they want, by the way, this is important, especially younger people. But sometimes mid-career people too, they're like, "Oh, I'm not... " So I'm not asking you to make a final decision, no, no. We're going to iterate. Okay, we're product people, we're going to iterate.

**Phyl Terry** (00:24:38):
So we're going to take this Mnookin two-pager, this draft that shared with our council, and we're going to go out and do a listening tour. Because guess what? In the job search, we're the product. We're our skills and experience. That's the product that we're bringing to market. So we have to go see what the market wants. Now we have a sense of what we want, but what does the market want and what does some of our trusted friends, what do they think about what I want and what I'm a fit for? And what do they think I'm a fit for now given the market conditions that we have?

**Phyl Terry** (00:25:09):
I will tell you, people are terrified to do the listening tour. They're like, "I don't know, what am I going to hear from people?" Because I asked them to ask a golden question, if you were in my shoes, how would you approach this? I call that the golden question. It's such a creative question. It really opens the conversation. But they think, "Oh no, people are going to tell me all this stuff." No, mostly people tell you this. Once in a while you get a helpful piece of critique, "Oh, you make everything a priority, in which case nothing is, and you could work on that." Super helpful to know. We all have stuff to work on.

**Phyl Terry** (00:25:43):
But I will tell you, once people do the listening tour, they're blown away. I mean, the people who are in jobs, they love, they love helping others if it's done well. Because guess what? They're also anxious themselves, and they want to give back. They want to feel like they're supporting people. You actually end up, and we're going to talk about this, but when you ask someone for help while you've done your homework, you're thoughtful, they want to help you even more. They become invested in you. So the secret about the listening tour is that not only are you getting market research customer feedback on your fit, you're also creating a whole group of listening posts, people who are invested in your success.

**Lenny Rachitsky** (00:26:33):
Just to clarify on that specific point of this listening tour, you write this Mnookin two pager, which basically describes what you want, what you don't want, goals you have, what you hate. And the listening tour is find colleagues, friends, people that are other, say, product managers and get their feedback on what you want, what you don't want, what you hate, what your goals are.

**Phyl Terry** (00:26:54):
And what they're seeing in the market, what they think you're a fit for.

**Lenny Rachitsky** (00:26:56):
I see. Got it. So it's like, "Oh, this is unrealistic. You're not going to get this."

**Phyl Terry** (00:27:00):
That's right.

**Lenny Rachitsky** (00:27:00):
Looking for that [inaudible 00:27:02]-

**Phyl Terry** (00:27:01):
And we see both things, Lenny. So some people underestimate their fit, others overestimate it or don't recognize that changed market condition. The other thing I'll say is that in the book I have three different kinds of structured listening tour conversations. One I call reverse exit interviews. This is people you used to work with before, go ask them, "Hey, what did I do well, what do you think my strengths are? What do you think I'm a fit for? Here's what I'm thinking. Do you think I accurately am projecting myself?" The second is your broader network, and that's where I ask you to do the golden question, "If you were in my shoes... " And then third is recruiters.

**Phyl Terry** (00:27:43):
Now, this is an important hack. Recruiters don't like being barraged with, "Get me a job." They do like someone saying, "Hey, what do you think I'm a fit for?" asking their advice. And this is especially true if you pre-

**Phyl Terry** (00:28:03):
And this is especially true if you've pre-built a relationship with a recruiter. So anyone listening to your podcast right now, if you're in a job, I have a really important message for you. When that recruiter calls, pick up the phone even if you don't want the job, help them, network with them, introduce them to other people, and build that relationship, because whether you lose a job or whether you decide to start looking when you're in work, you want that relationship.

**Phyl Terry** (00:28:29):
Now, Lenny, there's a problem many people haven't done that. Okay? So part of what we're doing with the Never Search Alone community is we're building a recruiter network. We're finding recruiters who are willing to, in a protected way, do a couple of conversations a month, helping people think about their candidate market fit. And if anyone listening to the show is a recruiter, please come join us and volunteer. We need more recruiters. I know many of you want to give back and you don't know how. You tell me this. Here's a way to give it.

**Lenny Rachitsky** (00:29:01):
Mm-hmm. Love that. Okay, and so the intent of this is that you're trying to figure out, one, what does the market want, and how do I be honest about what it wants because what you want may not exist right now, and then, two, help you refine your pitch and how you're approaching and who you're talking to. Is there anything else that comes out of doing this exercise? Because I think people might be hearing this, like, "Ah, so much work. I have enough work to do, all these interviews. Got to reach out to people. I got kids and a family. I have to write this two-pager now and listening tour." What other benefits do you get out of this, doing this exercise?

**Phyl Terry** (00:29:37):
You build those relationships. You turn people on as listening posts, so you light up your network in a way that you... If you just send an email saying, "I want a job," or if you just go, "Hey, do you have a job for me," people don't know what to say. But if you say, "Hey, if you're in my shoes, how would you approach this, and what do you think if you were me I should be looking for, and what are you seeing in the market," they love that, and now they're really thinking about it.

**Lenny Rachitsky** (00:30:05):
And if they see a job that might be a fit, they tell you about it.

**Phyl Terry** (00:30:07):
They tell you about it. Yeah, and that gets to candidate... Because at the end of this, we're going to create a very simple, narrow, focus candidate market fit statement at the end of listening tour.

**Phyl Terry** (00:30:17):
So once you've now done this listening tour, now you need to create a focus candidate market fit, and this is tough. Look, again, this is why you need a job search council. You need them to be there with you during the listening tour. Not every listening tour conversation will be a home-run. Once in a while it'll be a dud. I talk about this in the book, like, "Warning there are some curves ahead." You could have a conversation... A number of women that I have worked with over the years who've gone and done conversations and they've gotten frankly sexist feedback... It was not helpful. "You're too poised," or "You're not poised enough." It's just this strange set of stuff. So you need your council to help you parse out and interpret what people are telling you.

**Phyl Terry** (00:31:02):
And at the end of this listening tour, and it never really ends, but once you've done 10 or 15 and you're ready to say, "Okay, I'm going to take a stab at my candidate market fit," now you need your job search council because you're going to want... Every bone in your body is going to want that to be expansive, to want it to be broad. Remember, we're product people, at least those of us in Lenny's podcast community; what happens when we're building a product? Same thing, right? We want this product to be for everyone, but we've learned with product market fit, that doesn't work. We need a narrow, clear focus. Same thing with candidate market fit. So I say to people, and we have this whole grid that we give them, "I'm looking for a director of product role in a healthcare, series B startup in San Francisco," like "Bing, bing, bing," and people say, "Oh, if it's so narrow, I'm going to lose..." And here's the thing, when you're looking for a job, you need a spear and not a net. With a net, everything slips through.

**Phyl Terry** (00:32:08):
Now, part two to this, people are expansive, but not reductive. What are you talking about, Phyl? Here's what I mean. If you give them a specific... If I say to you, "Lenny, I'm looking for a director of product role at a healthcare startup that's a series B in San Francisco," well, if you see another FinTech startup that's in a heavily regulated industry looking for a director of product that's a series B, you're going to be like, "You know what? Phyl is looking for that, but I bet Phyl could do that." You can be expansive. But if I told you, "Hey, Lenny, I'll take any product job I can," you are never going to think of me. You're never going to remember me. You're not going to be reductive from a broad statement, but you will be expansive from a narrow.

**Phyl Terry** (00:32:52):
And I'll tell you, Lenny, this is so hard for people, and this is why, again, you need that council and you need that broader community. And every two weeks we do a LinkedIn Live where we address... We go over these questions again and again because it goes... If I were in the job search, I'd feel the same way, even with all the darn research I've done. It's really hard.

**Lenny Rachitsky** (00:33:13):
If you've been using this metaphor, approaching this like a product person, and this is very much like a product person thinks about new products is there should be a very narrow audience to start with kind of a wedge or an ICP. When someone's building this, what is a sign they've narrowed it enough? Are there a certain number of attributes? What tells you that, "Cool, this is small now"?

**Phyl Terry** (00:33:31):
So it's typically three to four attributes, and we give people a whole grid in a set of examples. So we had a woman who was a designer. She was a product designer. And what her product market fit was, she was looking for companies that either did not have a design team or needed to reboot one. So she wasn't talking about stage of business, or even industry, but that really plants an image in your mind. If you hear about a company that doesn't have design or looking to reboot design, you're going to think of her immediately because after you've done your listening tour and you've created your candidate market fit and your council signs off on it, Lenny, this is important, then you go back out to your listening tour and you tell all those people, "Thank you for your help. Here's the candidate market fit I've come up with." And you also post it on LinkedIn. You tell the whole world, right?

**Phyl Terry** (00:34:29):
Now, will that candidate market fit change over time? Yeah, we're iterative, right? So if you go and go... And the market is changing. What was true three months ago may not be true now. Two weeks ago the stock market was convinced we're going into a recession, and everything crashed. Two weeks later we're like, "Oh, no, we're not going into a recession," and that affects the psychology of hiring managers and companies. Not just psychology, their willingness to open up, recs and everything else. So things are changing, so you need to be flexible and adaptive to that, which is also why you need the council and why you need to have a good network around you that you've asked for help from and they're invested in you and can be there for you as you try to keep navigating this.

**Lenny Rachitsky** (00:35:11):
Just to follow us through it a little bit more, when someone is... Someone's thinking right now, "Okay, what are my attributes," what's on that grid, roughly? There's stage of company, I imagine there's-

**Phyl Terry** (00:35:21):
Stage of company, industry, level of role and function, of course, and culture.

**Lenny Rachitsky** (00:35:27):
Is there a set of options you have of type of culture?

**Phyl Terry** (00:35:30):
Basically everyone wants a good culture, right?

**Lenny Rachitsky** (00:35:32):
Yeah, yeah, yeah, exactly. So culture.

**Phyl Terry** (00:35:38):
Sometimes it can be very specific, like, I need a company that has a particular kind of policy for kids, or whatever, remote or hybrid or whatever, that kind of element. But I tell people, make it simple. This should not be paragraphs and paragraphs. It should be a one-sentence statement. You can do a longer thing that you can then share with people when you're getting into the conversation, but you want something simple that people go, "Oh, Lenny looking for a chief product officer role. Oh."

**Lenny Rachitsky** (00:36:11):
Yeah. It's exactly like you want your product to feel too.

**Phyl Terry** (00:36:13):
Exactly.

**Lenny Rachitsky** (00:36:14):
I need a SOC 2 compliance, so I'm going to think of-

**Phyl Terry** (00:36:17):
That's [inaudible 00:36:17].

**Lenny Rachitsky** (00:36:18):
Yeah, exactly. Okay, so I'm thinking through this list here. So level and role I imagine people get a pretty good sense of where they want to be. Stage, any advice for someone to decide what stage is right for them?

**Phyl Terry** (00:36:35):
If I were coaching someone which, as you know, I do, we would talk a lot about this. But when I'm in the book and in the community, I say, "To figure out stage again, I want you to rely on your job search council and your network and your own experience," and it becomes pretty... People usually have a pretty good sense, like, "Who was I talking to recently? I need a big..." Whereas many people are like, "I don't want that. I want a startup." Okay.

**Phyl Terry** (00:37:01):
And what I will tell you is that one thing to keep in mind right now is that there are more jobs in the startup world than there are in the established companies in the tech world for product people. That's where new job creation has been happening. It's slower than it was before, but the big companies, they've just been shedding people. They've just been throwing them off. Whereas the smaller companies, there's more opportunity there. Now that doesn't mean that... If you can't stand working at a startup, I'm not telling you you should go there necessarily.

**Phyl Terry** (00:37:35):
But I will say this, and again, if you need to put food on the table... We were talking to someone recently; they had moved to a new city and then were laid off the next day. They moved for the company, and then they were laid off the next day, and they're like, "Okay, I need to get a job." I said, "Okay, yeah, sure. Just know that if you're going to get any job just to have while you still look for the job you really want, just know that that's hard. That's a hard pen. I understand it and I support it, it makes sense, and it's hard." It's harder than you realize, and you absolutely have to keep your job search council, because otherwise you're going to get lost.

**Phyl Terry** (00:38:16):
Can I share one story about candidate market fit-

**Lenny Rachitsky** (00:38:19):
Please.

**Phyl Terry** (00:38:19):
... that might be helpful to people? I was coaching... He was an EVP at a traditional media company, but on the digital side, running their streaming business, but it was very much an old economy, old media company. This was not a player in the streaming space. And they smartly recognized that if they stayed there, they were going to end up in a pretty bad cul-de-sac. And by the way, that company's had layoffs, and they would've... So they decided they wanted to go work for a company like Netflix or Apple TV. And they're someone who ran hundreds of people, corner office, limo, first-class, you know what I mean, in the airplane? What was their candidate market fit? They went out and did this, their candidate market fit, if they were going to join a top streamer was as an individual contributor, Lenny. Because those guys, they didn't respect much of what they brought from traditional media. And if he had done this search alone, he would not have done that. But to his credit, he decided to take that, and it transformed his career. He's not someone who had a lot of management experience, but also tied now with one of the top streamers. He's just done incredibly well. But that is really hard to do.

**Lenny Rachitsky** (00:39:35):
So in this example, when you talk about candidate market fit, a big part of it is what the market wants from you. It's not like he's like, "I'm going to go IC." He just realized as he was going through the process, "This is where I'm actually going to succeed."

**Phyl Terry** (00:39:48):
He talked to people, and I helped him network with people in Silicon Valley. They were just honest with him. And that's what Justin was talking about, this can be hard and humiliating at times to figure out... We had another person who was a chief product officer in a startup, and she was great. She helped me with the book, she was an early reader, she's a member of your community, Lenny. And she realized that she wasn't getting the right product trend. She was the only product person, and she didn't really know what she was doing. Well, what was her candidate market fit? It was an IC. It was an IC role, an individual contributor role in a larger tech company. And to her credit, she realized that was the right path for her learning, and she did this before the shoot really hit the fan. I'm in the tech world, fortunately. Just not swear.

**Phyl Terry** (00:40:38):
I talk about this in the book. Sometimes you need a two-step strategy. Let's say you want to be a VP of product at a top streaming company or whatever it is, but you not a fit for that today. So the question is how do you step there? I tell a story in the book about a guy who'd been a VP of product. He wanted a COO role. He was not a fit. He was not a fit, Lenny. And it was very clear. The market was telling him, he did the listening tour, but he came back to me and said, "I don't care. I want a COO role." So he interviewed with 50 companies. 50. Can you imagine? It took them a year and a half. The 50th company hired him.

**Phyl Terry** (00:41:15):
10 days later, they were a public company, massive fraud, and they went bankrupt. I said, "Okay. The market is clear. The only COO role you're a fit for is a company that's about to go bankrupt." And he's like, "Okay," and he went back to the VP of product role. I said, "If you want to become a COO from that role, where you are today, one of the great paths is to do it from that job inside a company." Okay? And that's what he ended up doing. It was a two-step strategy. He couldn't go straight there.

**Phyl Terry** (00:41:46):
I'm not talking about people's innate worth, Lenny. I believe every human is worthwhile person, and I deeply believe in belonging and giving people support and spreading love and creating community. But I also believe in being practical and realistic. I didn't create this situation. I'm just trying to report to you what the situation is and how you can manage it so that you don't get stuck. How many people have you seen, Lenny, who get stuck? They get stuck in a bad job, they're not learning, and then they can't go from there? They get into their 40s and 50s, and it is tough. A number of people in the job search community who are in their 50s, 60s, whatever, they're dealing with ageism, they're dealing with... They're not close enough to the technology frontier. You got to get closer to the technology frontier, even if that means you're going to go from the EVP to an IC role. That's how creative destruction works. The closer you are to the technology frontier, the more new jobs and opportunities there are. The further you are from the technology frontier, the worse you're going to be over the long run. You might be able to get a better-sounding job in the short term, but you're going to find yourself stuck.

**Lenny Rachitsky** (00:42:55):
I love your Venn diagram of just warmth and support and belonging, and also just straight real-talk. Here's the reality.

**Phyl Terry** (00:43:04):
Yeah.

**Lenny Rachitsky** (00:43:05):
What a combo.

**Phyl Terry** (00:43:06):
Oh, thank you.

**Lenny Rachitsky** (00:43:06):
This is such powerful advice, and I think people might be feeling like, "Yeah, I get it, but man, I don't want to be a IC again. I've been a director, I've been a VP. That sounds really not great." Is there anything else you can share to help people get past that, of like, "Okay, maybe I really should be looking for an IC role again?"

**Phyl Terry** (00:43:24):
Again, if you're in a job search council, and also you're in our Slack community, what you're going to find is that you're not alone. That's a big thing. It's not you. There's not something wrong with you. This is the market that we're in. And by the way, the more relationships you build, the better you do your listening tour... One of the tactics, Lenny, I tell people is you've got to send out an update note every month to all of your network that you've talked to. And it might be, "I don't have a job yet," or "I don't even have any news, but I just want to let you know I'm still going and I appreciate everything you've done for me and I'm still looking for X." That could be it. And Justin, in his note, I referenced him earlier as chief product officer, his note on LinkedIn today said, "Phyl told me to keep people updated, and I didn't do it enough." Don't make that mistake. You got to do that.

**Phyl Terry** (00:44:12):
Lenny, I met with a group of about 50 job seekers recently who've been in the Never Search Alone community for more than a year. Okay? They're struggling. Again, I don't have a magic wand. But as I talked to them, what was happening? They stopped network. They left their job search council. They weren't updating their candidate market fit to the changing market condition. I'm like, "You have to do everything. You can't get passive." One of the concepts, Lenny, I talk about is you've got to be the I in village. There's no I in team. Well, there is an I in village, okay? And the I in village is that when I'm saying you've got to ask for help, you got to be a part of job search council community, you have to be independent and accountable and responsible. I'm not saying you're not going to become passive independent. This is how you become more independent. This is how you stand up and be even more accountable and responsible. This is how you can do the best search possible in the market conditions that we have.

**Lenny Rachitsky** (00:45:12):
So the advice here is if you're struggling finding a job, this is a solution. Join a council, bring people on board with you, update people on your progress. These are the things that break you out of that funk that you're probably in.

**Phyl Terry** (00:45:26):
And it will still be hard. It will still be hard. I wish that weren't true, Lenny. Now, I will tell you that, look, what's the difference between now and the dot-com depression of 2000, 2001 and 2? The difference is that we were a much smaller industry then. And people had been in web jobs only for a couple years, where now we've got people who are in jobs for 10, 15 or more years in tech who have never seen a downturn, have never seen a market like this. We've never seen a tech market like this. It will improve at some point, but right now it's tough. And I can't change that, but I can provide tools, I can provide community, I can provide heart and smarts, so that you can get the best job you can get right now.

**Lenny Rachitsky** (00:46:10):
Speaking of advice, is there anything else along the lines of candidate market fit before we move on to more tactics?

**Phyl Terry** (00:46:17):
Just that, again, that you're going to resist the narrowness of it, every bone in your body. Just know that that's what everyone is feeling. But go watch... I have this great video online of... He was a VP of product. He was initially masked, but VP of product at Nike. I met him through Marty and Chris at Silicon Valley Product Group. He joined one of our product councils, and then he decided to leave. And he was like, "Phyl, I love you, but this candidate market fit stuff, no. You're wrong. It needs to be [inaudible 00:46:57]." And so he went out and he actually spoke to a bunch of VCs and like, " We don't have any idea what to do with you. You have to tell us something really specific." He was like, "Oh, man." So he went, he's like, "Phyl..." So he redid it, bam, bam, bam.

**Phyl Terry** (00:47:12):
I tell another story in the book about Dee. She was a chief data officer of a large company in tech, wanted to become a CTO. She had a technology and engineering background, as well as data. She spent a year spinning her wheels alone. I said, "Join a job search council." She figured out her candidate market fit. It turns out she was a great fit for a mid-size regional bank CTO. And within three weeks she had three offers. A year, nothing. Within three weeks, three offers.

**Phyl Terry** (00:47:43):
So I can't guarantee that you're going to get three offers within three weeks, right? I'm not saying that. Some of you, it might take you six months or a year. And the more senior you are, Lenny, the longer it is. If you're a CEO, it's going to take you a long time, unless you happen to be the CEO of Chipotle, who just became the CEO of Starbucks.

**Lenny Rachitsky** (00:48:02):
Yeah. Yeah, I know you're creating a page that we're going to link people to, which is, I think... Is it phyl.org/lenny?

**Phyl Terry** (00:48:08):
Yes.

**Lenny Rachitsky** (00:48:09):
Okay, cool. And is it going to have this template to help you work out your market fit?

**Phyl Terry** (00:48:13):
There'll be a link to where you can download not only that template, but all the templates. You don't even have to join a job search council to get all this stuff. I hope you do. Again, it's free. I will say, early on people were like, "What's the trick here? This is free, and you're going to charge me." No. No, this is free. Why am I making it free? Because, one, I can, which is cool; second, this is in honor of my mom; and third, I want to create a private safety net for the ravages of creative destruction. It's great. A lot of positive consequences, but there's negative ones. And I just don't love the idea of charging people for this. I charge people for other things, but not for this.

**Lenny Rachitsky** (00:48:58):
And we'll link people to the things you charge for so they can support you and benefit you in other ways, or benefit themselves in other ways.

**Phyl Terry** (00:49:04):
Benefit them and me. That'd be awesome.

**Lenny Rachitsky** (00:49:07):
Let's talk about some other tactics. You mentioned this idea of playing to win, and I think within that, there's this kind of OKR in mission tactic. Let's talk about that.

**Phyl Terry** (00:49:15):
50%, Lenny, of the people who read my book, join a job search council, and follow everything I've described, the people don't do what I'm about to tell you, it is the biggest mistake and miss, and I'm really sorry about this. I'm on a campaign, right? So here's the thing. When you start to interview and negotiate, you've got to be in charge. This is collaborative coaching. I want you to play to win, not to lose.

**Phyl Terry** (00:49:49):
Now, when people hear me say that, they translate it in their brains into, "Oh, Phyl is saying that I've got to be a ruthless negotiator." If anyone who knows me know that ruthless is just not how I am, at least in this sense. No, no, I'm like, "What I want you to do," and it's a great tactic that we stumbled upon, and it's one of the best tactics in the book, and I really hope we can get the other half of the people who are in the community to do this, and your listeners who aren't involved who decide to join also do this, when you start interviewing, I want you to create your own version of the job description. I want you to do it privately, Lenny, and I want you to create what I call a job mission with OKRs.

**Phyl Terry** (00:50:38):
Now, most job descriptions, they suck, Lenny. The company doesn't know what the eff they're doing. They don't know exactly what they're looking for. But I'm not telling you to say that to them, just to be clear. I'm telling you, "I want you to create your own job mission with OKRs." This is key. It needs to be with OKRs. Now, your audience knows what an OKR is, objectives and key results, and I assume I don't need to explain that. It needs to be something where you are saying, "Here's what I think I'm going to be accountable for. Here's what I'm going to actually... the outcomes I'm going to deliver," right?

**Lenny Rachitsky** (00:51:13):
At the company that you join.

**Phyl Terry** (00:51:14):
At the company you join. Now, you'll keep it private at first because drafting it... This thing has multiple benefits. The first is drafting it will help you understand and develop great interview questions to ask them to clarify, what is this job? And they'll be impressed by that. Okay? The second thing is, once you've had a couple of interviews, and it's a draft... Now, it's not a full, final thing. This is so important. I want you to pull the hiring manager aside and say, "Hey, Lenny, you're the hiring manager. I've thought about what the role is. I want to make sure I'm understanding it correctly. Can I share something with you?" I don't want you to email it. I want you to do phone call, Zoom, or coffee or whatever.

**Phyl Terry** (00:51:54):
Lenny, can you imagine how hiring managers feel when they get this job mission with OKRs? I was talking to a senior guy at Amazon who's hired more than 2000 product leaders and others. He said, "Phyl, no one in..." He's part of our product account. He said, "No one in my life has ever done this. If someone did this, it would blow my mind. I would hire them on the spot." And that's the message I want these folks to understand.

**Phyl Terry** (00:52:22):
We talk about silver medals, Lenny. In the job search, the silver medal sucks. At the Olympics, hey, it's pretty good. You get to be on the podium. But guess what? Silver medal is... It's almost worse than... Because you were almost there. And we have a number of videos and other things where we talk about the difference, in many cases, between getting the silver and gold has been doing the job mission with OKRs. Companies say, "This is what distinguished you. This is what..." We were like, "Who is this person?" They're already thinking about what they're accountable and the outcomes, and naturally they're thinking about it better than I am, which is fantastic, right? So it raises the odds, but it also does something if you present it...

**Phyl Terry** (00:53:02):
Again, Lenny, you're the hiring manager. I show you my job mission OKRs, and you're like, "Oh, this is fantastic," but you also say, "Oh, this thing you have here, this OKR, this isn't part of the role. Well, that's helpful to understand, but this thing that you don't have listed is." "Oh, really?" Lenny, how many times... I'm going to ask people in the audience to raise their hands. How many times have you taken the job A that turned out to be job B? Everybody just raised their hands, Lenny. So this helps to address that, right?

**Phyl Terry** (00:53:35):
And then if you get the offer, and again, this raises the odds of getting the offer, it then sets you up to negotiate what I call the four legs of the negotiations tool. This is not hard negotiation. This is something the company loves. I actually say, you get an offer and it's like whatever, $250,000 base with a 30% bonus. This may be a director or whatever, or senior manager. Maybe it's an 800 base if you're more senior, whatever it might be. I want you to go and talk to the hiring manager, if possible. Hopefully not the recruiter. We'll talk about that. And I want you to say, "This is great. I want to talk about money, but before we do, I want to think about some of the things that will set me up to see succeed in this role. I think there's like $10 million of tech debt here. Does that sound right to you? And are we on board that that'll be priority one to eliminate the first day I start the job?"

**Phyl Terry** (00:54:39):
We had two CPOs, both interviewing at private equity firms, private equity-owned companies, about the same size, SaaS companies. One had tech debt of 20 million, one had tech debt of 10. I told them both, "You got to talk about that in the..." So one talked about it in the negotiation, and the company was like, "Oh, that's great." They wrote a check on day one. Six months later, the tech debt was relieved. They updated the systems. They were able to get into innovation. A year later, they got promoted to a GM role in addition to their CPO role, and then a year after that, they were being interviewed for the CEO role. The other person, where there was 10 million of tech debt, was kind shy about asking, sort of mentioned it, they were like, "Oh, we'll talk about it when you get here," but they didn't really commit, and they never addressed it. One month, six months, 12 months, 18 months later, he's looking for a job. This is the opportunity cost of not being set up for success.

**Phyl Terry** (00:55:34):
Now, again, don't hear this as antagonistic. We're not antagonistic here. We're trying to say, "What's going to help me succeed?" So one CPO recently was negotiating... I'm not just talking about budget for tech debt or whatever. If you're a senior person, do you think that team needs more training? Do you need to send them over to Marty's workshops, over to my product councils, right? Get them into Lenny's community. The company was like, "You're negotiating the training budget of the team that you don't even run yet-"

**Phyl Terry** (00:56:04):
You're negotiating the training budget of the team that you don't even run yet while we're talking about your salary? Who are you? We love you, we're going to pay you even more. Lenny, companies love this. And even if you're a junior person, you're not going to negotiate budget, but you can talk about mentorship, professional development, will you be able to attend conferences or training? Again, and this is, we're not hard negotiating this, we're saying, "Here's what I think I'm going to need to accomplish the OKRs that we've already agreed upon."

**Lenny Rachitsky** (00:56:33):
This is really cool advice, I want to make sure people super understand it. So an example of tech debt. This person asked, "I need $10 million budget in order to address this tech debt."

**Phyl Terry** (00:56:42):
Yeah.

**Lenny Rachitsky** (00:56:43):
I see. So it's not like, "I believe we will save $10 million if we spend on time." It's like, "Here's how much this team will need and I will need to be successful."

**Phyl Terry** (00:56:51):
I'm going to need a check for $10 million on day one.

**Lenny Rachitsky** (00:56:54):
I guess you're right, someone would be shy asking for that. Or that was $20 million actually, that was the one that asked for it.

**Phyl Terry** (00:57:00):
That was the 20 million, that was right. And again, it was not... Yes, people feel really shy about this, but the companies love that they understood what it was going to take. I will tell you what, if the company doesn't like this, it's a huge red flag. Huge red flag, it means they're not serious. But if you're talking to them, "Hey, I think we're going to need train the team. I'm going to need to hire three more ICs," or the design function is weak, or whatever it might be. And then you're like, "Do you agree? Do you see it this way?"

**Phyl Terry** (00:57:37):
And they're like, "Yeah, that's right. Good. Wow." You're already like bang, bang, bang. We haven't even finished negotiating your salary. And this is so counterintuitive, Lenny. I'm the queen of counterintuitive stuff. Kelly Marcus said it's counterintuitive, right? But this is as well. People think they're going to lose the opportunity when it actually wins them. Now, of course, if they marched in and said, "Damn it, you have to do X and Y," right? That's not what I'm talking about.

**Phyl Terry** (00:58:10):
"Hey, here's how I see it. This is the OKRs. I think we're going to need this. Does that make sense to you?" And you're having a collaborative conversation about how you need to be set up for success.

**Phyl Terry** (00:58:21):
And by the way, if they say, "No, I hear you. I believe you, but no," then you make a judgment decision. I'm not always saying you turn that away. Well, especially if you need a job, but you're now going in eyes wide open. You are not going to be able to believe that tech debt initially. You're going to have to work within that constraint.

**Lenny Rachitsky** (00:58:41):
So I love that we're getting into negotiation advice by the way, because I was hoping we'd get there. So the advice here is identify something that you'll need to be successful, and your finding is that when you ask for, and it seems like a financial investment as a part of you joining, ends up leading to a better comp for you.

**Phyl Terry** (00:59:00):
Yes, and I will say that there's less negotiating room today than there was two years ago because of the market that we're in. And the data all bears that out, and we see that. But here's the other piece of data. So I want you to ask for things that tie back to the OKRs that you've already agreed on with the hiring manager. This is how this thing connects together, right? It's like Legos, and then we come to the money and you've had this lovely conversation. You've shown them how much you're invested in succeeding. See, Lenny, the problem that every hiring manager has is distinguishing be someone between someone who is a good talker, and someone who can actually make things happen. You know this, right? And this is true every from individual contributor to CEO.

**Phyl Terry** (00:59:50):
By doing the job mission of the OKRs, and by showing them that draft, you are showing them. Not telling them, showing them that you take initiative, that you're accountable, that you can make things happen. And then in the salary negotiation, by talking to them about what you need to succeed, you're showing them that you really want to succeed. And guess who that benefits? That benefits the company, obviously. I want you to do that first and then, okay, so then let's talk money. Now, 87% of the time, Lenny, when you ask for more money, you get it. Now, that's a longitudinal statistic, meaning over many years. It's going to be lower in a moment like this, but you can still ask, and people are afraid to ask. Again, don't ask in some shark way like some of my friends in business might do. Some M&A negotiators, whatever. No, ask, are you open?

**Phyl Terry** (01:00:48):
Unless it's a deal breaker. If it's a deal breaker, just be open about that. But if it's not, let's say they offered you whatever it is. 400 base with up to 100% whatever in some RSUs or options, blah, blah, and you really wanted 450. Lenny, you can say, "Hey, are you open to 450? That was really what I was hoping for. What I think I'm worth, are you open to that? Is that something we can talk about?"

**Phyl Terry** (01:01:16):
And most of the time they say yes. They may not get you to 450. They may be like, "You know what? Yes, thank you. Let me get back to you." Or, "No, we could go to 420. Does that work? Great."

**Lenny Rachitsky** (01:01:28):
You make it sound very easy.

**Phyl Terry** (01:01:30):
Here's the thing-

**Lenny Rachitsky** (01:01:30):
I hate negotiating. Yeah, go.

**Phyl Terry** (01:01:32):
I do too. And I talk about this in the book and Jason Fried, who you know. Jason Fried's got this great thing where they have all very clear bans, 37signals, well, at Basecamp. He's like, "Because no one's trained in negotiation, how can we expect people to negotiate?" And there's another thing Marty says about my book. He says what he loves is that companies have all of these resources. They've got lawyers and HR people, and you're there alone.

**Phyl Terry** (01:01:57):
That's why you need your job search council. This is when you really need to ask for help because every bone in your body is going to say, "I'm not going to negotiate. That's going to make it worse," and it almost never does. And again, you could be a jerk about it, that won't be good, but that's not what I'm talking about. I'm talking about collaborative conversation. I'm talking about what you need to succeed, showing them that you're thinking about resources, support, budget that will help you deliver on the things that you signed up for. And then asking, are you open if they didn't quite hit your range.

**Lenny Rachitsky** (01:02:30):
Yeah. The way you phrase it, make it very low risk to ask.

**Phyl Terry** (01:02:35):
Yeah.

**Lenny Rachitsky** (01:02:37):
Do you have any specific advice on doing this over email, over phone call, or in person? Is there something you're like, "Definitely do it in this way."

**Phyl Terry** (01:02:43):
Strongly, strongly want you to do it either in person or over the phone live with the hiring manager. Now, some companies won't let you do that. You have to talk to the HR person or whatever. But as much as you can work with the hiring manager, even if it's to say, "Hey, I just want to run by you some of the things I think I need to succeed in the role before we talk money with the hiring manager," or whatever. With the recruiter I mean, and they'll go to bat for you behind the scenes if you do that. Not guaranteed, but more like.

**Lenny Rachitsky** (01:03:20):
Yeah, that's totally true because oftentimes you don't really have a specific budget as a hiring manager.

**Phyl Terry** (01:03:24):
Right.

**Lenny Rachitsky** (01:03:24):
So to you it's like, "Sure, 450, let's make it happen."

**Phyl Terry** (01:03:27):
That's right. Now some companies like know this and they're like, "You have to talk to the person we designate the internal recruiter," but you can also get back to that hiring manager, and even informally. Again, if you've built a good relationship and everything is about building good relationships, Lenny. I want you to be a good interviewer. I want you to ask good questions. I want you to listen. I want you to present that job mission OKRs. It shows how innovative and how much you take initiative and how much you're thinking about this and how much you want this, right? Every step of the way.

**Lenny Rachitsky** (01:04:00):
**Phyl Terry** (01:05:18):
In the book, before you do the listening tour, I ask people to do what I call the gratitude house exercise, which is to think about who are all the people in your life who have helped you get to where you are today? I mean, you could talk about your third grade teacher, you know what I mean? I'm just talking on, I just want you to do that, and I want you to do that because everyone has this idea that they're alone. We have all received enormous help to do what we're doing, whoever we are. Even the [inaudible 01:05:51] was born to a mother, and they did not make it themselves for their first several years of their lives. We all are born of mothers. We all are born as families and communities. Some better or worse. I had a pretty tough childhood, but there was love.

**Phyl Terry** (01:06:09):
I want you to do that gratitude house exercise, and then it can sometimes surface people that you'll go talk to in the listening tour. Might not talk to your third grade teacher, but you'll go talk to some. Now when you're going into interview, I ask people to take a moment and re-reflect the gratitude house exercise, remind themselves of everyone they're carrying with them, to imagine that they're on your shoulders. All of those people, including your job search council of course, and everyone you've talked to and you're listening to, you're walking in with 50 people, Lenny, okay? Even people who tell me, "I don't know anyone." Now, that is not true. You might not know as many people as I do, okay? That's understandable. My job is to know people, but everyone knows some people and you bring them with you even metaphorically, so that you feel not alone when you're going into that interview.

**Phyl Terry** (01:07:10):
The other thing I say with the interview and the negotiations is you've got to go do the debrief right afterwards, Lenny. Because we all have these cockamamie ideas about what happened. We think we did terribly when we did well, we think... We need to talk it through with someone else who can help us parse exactly what happened and really where we're at. I had a woman who was a director of product, she was interviewing for a VP of product roles. She texted me after the interview, "Oh, I screwed it up," this and that, this and that, "but they really liked me and we're going to go to the next round."

**Phyl Terry** (01:07:41):
I'm like, "Wait a minute, wait a minute. Something is not true here."

**Phyl Terry** (01:07:48):
This is just your own imposter syndrome and inner critic. That's another exercise we ask people to do, by the way, is what we call the inner critic exercise name the critic. Mine is Tub Tour. I was overweight when I was a kid and my dad called me Tub Tour.

**Lenny Rachitsky** (01:08:04):
I learned that tactic from Julie Cameron from The Artist's Way, she recommends that.

**Phyl Terry** (01:08:08):
Yes, she's great. Love that book. By the way, it's on my bookshelf back there.

**Lenny Rachitsky** (01:08:12):
I love that. I think I called mine Jim. Yeah, we had a really good episode. I don't know if you saw with Joe Hudson, he has a whole series of advice on your inner critic, and his point, and I'll point to it is your inner critic is always lying to you.

**Phyl Terry** (01:08:30):
I did see that episode. I love it. We all have it. People think, "Oh." Everyone. And that's what I love about this moment we're in too, Lenny. I started in therapy in the 1980s. In the 1980s, you did not share that you were in therapy, okay? Today, we have tennis stars talking about their emotional well-being and their therapy and how they're doing. It's beginning to normalize in some really important ways that emotions, they're not bad. They're actually really important to the decision-making system, but they can go off in certain ways that can really hurt us.

**Lenny Rachitsky** (01:09:13):
And it feels like these councils are like a lite therapy for people.

**Phyl Terry** (01:09:16):
Yes. I would never want to say the word therapy because of course that implies certification and training, but there's a therapeutic aspect to it. I feel comfortable saying that, yeah.

**Lenny Rachitsky** (01:09:28):
Okay. So on this gratitude house, just come back to it real quick. The reason that is powerful is that gives you confidence to ask for stuff to believe in yourself. You're worth something-

**Phyl Terry** (01:09:37):
Gives you confidence to walk in there as who you are, Lenny. Not as your inner critic, but as the whole good person that you are. And when you show up, this is one of the reasons job search councils are so important because if your anxiety and fear starts to run away and erode at your confidence, it will hurt your interview. You will not show up well. So you're not going to even, even in a down market you're going to get even, you won't even get the jobs that your candidate market fit suggests you're good for in that down market. You're going to slide down a few more notches, or you just won't get offers, and then you're going to get paralyzed and feel like you're really worthless.

**Phyl Terry** (01:10:17):
And if anyone watching this has been out of work for a while and feels that, let me just tell you, you are not worthless. You are not worthless. I want you to invest in yourself, to prove that to yourself that you're not worthless. You are worth the investment of this time and energy. I'm not asking you to do this for me, I'm asking you to do this for you.

**Lenny Rachitsky** (01:10:40):
You got tingles when you said that. That was a really powerful message. I'm glad you said that.

**Phyl Terry** (01:10:46):
Thank you, Lenny.

**Lenny Rachitsky** (01:10:48):
So yeah, so we're on this topic of playing to win. And what you just said is along the same lines is just remember, you're playing to win. You're not trying to lose, you're not trying to find-

**Phyl Terry** (01:10:56):
Not lose, just be really, I just can't say anything. I just can't rock the boat. I'm not asking you to rock the boat. I'm asking you to take charge and demonstrate the power of who you are. These companies will love it.

**Lenny Rachitsky** (01:11:10):
When I asked a lot of people to ask you what you're amazing at, one of those common themes is really good at just asking for help and teaching people how to ask for help, which was actually an topic for a recent newsletter post by one of my newsletter fellows, Natalie. So let's talk about it. Talk about why this is so important, why you spend so much thought and time on this topic.

**Phyl Terry** (01:11:32):
First, I want to shout out my mom again. So my mom's name, her nickname was Chic, C-H-I-C. Her friends and family and I dedicate the book to Chic, and she started that first council in 1960, and she asked for help. Of course, she taught me to ask for help, and to start councils. And of course, when I was very young, I didn't want to do what my mother said, right? You're not. But I ended up in a bad situation and she's like, "You've got to ask for help," and I asked my high school teachers for help. I was an alcoholic at the age of 12, Lenny, and things were really spiraling downwards. I was no longer living with my mom, there's a whole long story about that. I was in a pretty unsupportive position, and she's like, "You've got to ask for help." And so I did.

**Phyl Terry** (01:12:23):
And OMG, Lenny. I mean, I was carried by these teachers. And I also have to give a shout-out, and I'm going to cry now to my girlfriend in high school, Karen Kavanagh, whose family had very few resources. They were struggling, but they made a home for me, and I couldn't have done it without them and some of my other friends and my teachers. I worked a full-time job by the age of 16 and I was going to high school, and I was in a tough situation. It was transformative, Lenny. It was transformative. Did I feel like asking for help was a weakness? I did. Did I think people were going to think less of me? Absolutely. I thought all the things that people think, and it is not what happens.

**Phyl Terry** (01:13:24):
Now, there is a warning here. If you ask for help poorly, and I'm going to define that, it does end up leading to bad consequences. What do I mean by asking you poorly? I mean, if you don't do your homework, if you're asking for someone to do it for you rather than advise and support and give you perspective, we all know that. I get these emails, Lenny. So when I started the product councils, Marissa Mayer was a founding member, right? Marissa Mayer at Google and Miriam Moheed at Amazon. And as Marissa's reputation grew, suddenly everybody wanted to talk to Marissa.

**Phyl Terry** (01:13:57):
So I got all these random emails from people I've never met. "Oh, I've got software, would you please introduce me to Marissa? I think she'd want to license it or buy at Google."

**Phyl Terry** (01:14:08):
I'm like, "Who are you? What? That is the dumbest." Of course, I'm never going to answer that, right?

**Phyl Terry** (01:14:13):
If they had reached out to me and said, "I know you don't know me. I have this small software company. I'm not well-connected, but I would love your advice on how to grow this business and what you would do if you were in my shoes," which I have never received, Lenny, even though I've written about it and said about, I would've done that phone call.

**Phyl Terry** (01:14:34):
And then if they have said, "Well, can I talk to Marissa?"

**Phyl Terry** (01:14:36):
I'm like, "You have not earned that yet. That's not a statement about your worth. It's just you're not ready for that conversation."

**Phyl Terry** (01:14:48):
So you can do it poorly. But if you do it well, if you've done your homework and you're open, oh my gosh. There's four counterintuitive rules here. Asking for help is not a sign of weakness, it's a sign of confidence. It both requires confidence and strengthens it, Lenny. That's number one. Two, it's not a taking activity, it's a giving activity. If you do it well, you're actually being giving to the people you ask. This is really counterintuitive, Lenny. This is what I teach in my product councils. I'm like, "You have to ask for the money." If you ask for help and you're open and vulnerable, you're a smart person.

**Phyl Terry** (01:15:27):
So at one point, Marissa came in and said, " Listen, I'm developing a new product. I want to present it to the board, but I'd like your feedback on it first, and what do you guys think?" Am I approaching this in the right way?

**Phyl Terry** (01:15:37):
People were like, "What?" Google was already a public company at this point. Wow, that, they were just blown away. They were so happy to help.

**Phyl Terry** (01:15:48):
So if you've done your homework and you ask someone who has some expertise in the area that you have, and you do it in this way, "I'd love your perspective and thoughts and how would you approach it?" People feel given to, they feel given to. Here's the thought experiment that'll prove it. Imagine that somebody that you respect comes to you for help on an area that you have expertise. And they ask you in this way, how are you going to feel, Lenny? How do you feel?

**Lenny Rachitsky** (01:16:17):
Like they value. Like they value my opinion-

**Phyl Terry** (01:16:20):
You feel honored, and you feel excited, and you love giving. Everyone loves giving, it's a part of human activity. And you learn more when you give, of course, because it helps you see something new. Asking for help is not a sign of weakness. It's not a taking activity, it means you're becoming more independent, not independent, and it doesn't hurt your reputation, it improves it. Something I did not understand when my mom was trying to tell me to do this, Lenny. And it took the experience to drill into my head.

**Phyl Terry** (01:16:49):
And then I will tell you, I won't name names, but one person that you asked, who's a prominent product person who's worked at great companies, right? He said ask him about asking for help. I think he would agree with this. He'd been a member of the product councils for a long time. I think it took years before he really embraced it. I've seen many people, they're like, "Bill, I know you keep talking about this asking for help thing." And I know there's something to it, but it is transformative, Lenny. It is transformative if you learn to ask for help well.

**Phyl Terry** (01:17:25):
I can tell you about Brad Smith at Intuit who toppled the stock price there. But he was a GM. He became a CEO. He was a GM. He ran a project and he didn't do it well. He lost $300 million for company. He thought, okay, that's over. But they came to him and said, "What's your lesson here?"

**Phyl Terry** (01:17:46):
He said, "I didn't ask for help. I was pigheaded. I didn't listen to my team." That's a great lesson, and if you really internalize that, then it's worth it because you're great in other ways. And he ended up getting to the CEO role. And what did he do? He joined a council, right? And he asked for help. Boom, boom, boom. Stock price goes up 7X in his tenure, okay?

**Phyl Terry** (01:18:08):
Kenneth Chenault at American Express. Joins in the 1980s, one of the few African Americans in professional roles there. Ends up as a CEO and chairman of the board. First African American chairman of a Fortune 50 company. You ask Kenneth Chenault as I did, how'd you get there? He asked for help. And by the way, what did he do once he became CEO? He got on a CEO council.

**Phyl Terry** (01:18:33):
And by the way, who asked for help? Well, this is going to blow your mind if you. Warren Buffett. People think Warren Buffett only listens to himself and Charlie Munger who passed away last year. That guy asked for help. Well, it doesn't ask anybody for help. He asked people he respects and so on, but that guy asked for help. Every single leader I've ever worked with that has done well asked for help. And I have data in the book. 85% of the people get to a senior role credit asking for help to help get them there. 85% of the people in a junior role say they're afraid to ask for help because they think it's a sign of weakness.

**Lenny Rachitsky** (01:19:06):
Perfect.

**Phyl Terry** (01:19:07):
It's literally the same number if you can believe that. I couldn't believe it when I did the data. I was like, "What?" But it's really, and guess what? If you don't learn to ask for help and you're a junior person, you're going to remain a junior person most likely.

**Lenny Rachitsky** (01:19:19):
When you say ask for help, what are some examples and common times and uses of asking for help? Because it could be like, "Hey, can you just look at this email for me?" Or is it like, "I'm struggling with this project?" What are some things that you've seen when people think ask for help do this.

**Phyl Terry** (01:19:35):
One of the things that Kinshaw talks about is what he calls defining reality. So it's a CEO at American Express, he was constantly just going around and asking different people in the company and outside the company, "How do you see things? What are you seeing? What are you thinking? Help me understand your perspective," right? So that's a form of asking for help, for sure. Okay.

**Phyl Terry** (01:19:52):
Reviewing my email absolutely is a great form of asking for help. If you're sending a good email, an important email let's say, and let's say you have a history of maybe sending emails that don't get well received, you go ask for help. And by the way, I have a whole workshop where I teach people how to use ChatGPT with some communication models to help you with that email. So there's ways to do that with ChatGPT. But I still, if it's a really important email, want you to have eyes on, right?

**Phyl Terry** (01:20:22):
There's a woman who became the president of a digital retailer in the United States about five years ago, and then she realized that she had significant technical debt. The project, they were trying to build a new platform, and it was stuck. So we convened what we call a peer coaching call, and I also talked about this in the book. We got three other presidents of retailers, online retailers who had re-platformed and spent an hour, just one hour with her asking them for help. "What would you do if you were in my position?" I mean, bing, bang, boom.

**Phyl Terry** (01:20:55):
So when people get a new job, by the way, I tell them, do a first 90 days peer coaching call. I want you to talk to people who are in that role today. Not at that company necessarily, but they're a director of product, they're a VP of product, whatever it might be. And I want you to say, "Hey, I'm starting this job. Here's my job mission with OKRs. What would you do if you were in my shoes? What mistakes have you seen others or yourself make that I need to avoid? What should I focus on? Here's what I'm thinking for my 30, 60, 90."

**Phyl Terry** (01:21:24):
Whatever it might be, I want you to do a first 90 days call. Now, let's say you're a director of product in a job is going well, and you want to get to a VP of product role. Well then, I want you to do a career evolution call where you're talking to VPs of product. "Okay, I'm a director. I want to become a VP. How do I get from A to B? Will you tell me?" And that's another peer coach you call. So these are the things we do in the paid community, in the product councils and stuff. But you can do these on your own, right? And I tell people how to do them on their own in the job search councils.

**Lenny Rachitsky** (01:21:54):
Perfect.

**Phyl Terry** (01:21:54):
Are these helpful answers?

**Lenny Rachitsky** (01:21:56):
Absolutely. I think all these examples you're sharing is exactly I think what people are wondering. Just like, okay, I see.

**Phyl Terry** (01:22:01):
Yeah.

**Lenny Rachitsky** (01:22:01):
Feels like it's not-

**Phyl Terry** (01:22:02):
Can I share one more?

**Lenny Rachitsky** (01:22:03):
Please.

**Phyl Terry** (01:22:03):
That's so great. So Bradley Horowitz joined Google in 2008 as director of product. He had come from Yahoo, but he was initially intimidated. He had a weekly meeting with Jonathan Rosenberg, who was the SVP of product, with Susan Wojcicki. Susan just passed away tragically. Absolutely fabulous person by the way, if people don't don't know her, go learn about her. Marissa Mayer, and also another director of product named Sundar Pichai, right? Who is now the CEO of Google. And Bradley, he was nervous, he didn't know how to be in that meeting.

**Phyl Terry** (01:22:42):
One of the things I tell people, when you ask for help, use your emotional intelligence, use your product council if you're in a job or your job search council, if you're looking to get feedback on, am I thinking about this well? Because I don't want you to ask the wrong people for help. Someone who's going to take advantage of that. You have to be thoughtful about this.

**Phyl Terry** (01:23:02):
He was picking up vibes from Sundar that he was very approachable, that he lacked guile. Bradley told me Sundar just made it easy for him to say, "Hey, after one of these meetings, could I ask you a couple of questions?" And he says, first question he has is, "Is this meeting, is it just me or is this meeting intense?"

**Phyl Terry** (01:23:21):
Sundar was like, "Oh, no, no, this is intense. I feel the same way you do and I've been here for a couple of years."

**Phyl Terry** (01:23:29):
So they start to build a bond, and that's a form of asking for help. It's like you're checking, is your experience the same as mine or am I missing something? And then Horowitz who felt relieved at this point, felt more trust with Sundar, decided to ask him another question and this question. And by the way, now Bradley, he's kind of embarrassed that he asked this question, although I'm really happy that he did, I told him this.

**Phyl Terry** (01:23:56):
He asked this question, he basically said, " I haven't been here very long, but you, Sundar, you strike me."

**Phyl Terry** (01:24:03):
"I haven't been here very long, but you, Sundar, you strike me as a really thoughtful person and great leader. Why is your remit just working on a toolbar for Marissa?" Whoa. Heard the wrong way, that could sound like an insult or something, rather than an honest attempt to understand the culture of Google and how it operates. But again, he had trust with Sundar at this point. And it was an open and vulnerable question, and it was great. Pitch I basically said, "Listen, I don't worry about title or scope or any of that. I've really been focused on just doing good work and letting the right things happen. That's the culture of Google." I will tell you that that was more true of the culture of Google in a way that's not so...

**Phyl Terry** (01:24:48):
You have to be a little more politically aware at Google today. But the point is not so much the exact question he asked, but that he was open and vulnerable. He was thoughtful about who he asked, and it really made a difference in terms of his entry into Google and eventually led him to the VP of Product role. Of course, Sundar came into the CEO role down the road, but that's what I'm talking about, right? He was part of the product councils, Bradley. You need to have that sounding board so you can be thoughtful about... I teach people how to map and figure out who their allies are and their blockers and play what I call positive politics. That's all in my next book, Never Lead Alone, just to give a little. Don't worry, at least a year away.

**Phyl Terry** (01:25:32):
When I write a book, I do... I did 400 drafts of Never Search Alone. I had a couple of thousand people help me with it and 200 people read it and use it. I had 2,500 comments and 400 drafts. I like to really dock through this stuff. I'm doing the same with Never Lead Alone. That's how I know it works, by the way. I'm a prouded person, Lenny. I mean, that's what we do.

**Lenny Rachitsky** (01:25:57):
[inaudible 01:25:56]. That's amazing. Let me ask one last question around the art of asking for help. So we've talked about when to ask for help a little bit. What are just a couple tips for how to do it well? You know, people come to me and like, "Hey, can you look at this email?" And be like, "No. I'm pretty busy. I don't know if I have time to look at an email."

**Phyl Terry** (01:26:15):
Have to think about the relationship, right? Again, showing that this random, small software company wanted to talk to Marissa Meyer. I didn't know them, they didn't know me, and they didn't know Marissa. That's not going to happen, right? Lenny, if your mom or your close friend or your colleague who you work closely with says, "I want you to look at this email," you're going to respond in one way. If some person, let's say in your podcast community, which is great, wants you to do it, I mean, you have thousands of people there. You can't do that. People come to me for job search advice in the job search community. I said, "I can't do that. I can't scale that. That's what the Job Search Council and the Slack community is there for. I appreciate you asking, but that's what the deal is there."

**Phyl Terry** (01:27:03):
You got to think about the relationship. Listen to your emotions. This is where, again, emotions are really important for decision making. If your emotions are telling you, "I don't know if I trust this person," don't get all open and vulnerable with them. I want you to learn to ask for help in a counsel format where it's really safe. You can flail around. You can ask in fakakta ways. There's ways to ask for help where it's like... Have you experienced this, Lenny? Where I want you to do me a favor, but I'm actually acting like I'm doing you a favor. Lenny, I have this person to talk to I know is really going to be great for you to talk to, when really I'm trying to get you to give me... Whereas I should said, "Lenny, I have a favor to ask. Would you be willing to do this?" You just say yes or no. That's the other thing, I really want you to be honest with people about what you're asking. I never want you to hide the ask.

**Lenny Rachitsky** (01:28:00):
That is really good advice. A lot of times it's just, yeah, okay, if this is just a favor for you, absolutely.

**Phyl Terry** (01:28:05):
Yeah.

**Lenny Rachitsky** (01:28:05):
[inaudible 01:28:06]

**Phyl Terry** (01:28:06):
I mean, if people would say to me, "I have a favor to ask. Would you be willing?" "Yeah." Most of the time I'm going to say yes to that, you know?

**Lenny Rachitsky** (01:28:14):
Yeah.

**Phyl Terry** (01:28:15):
Do you get cold introductions, Lenny?

**Lenny Rachitsky** (01:28:18):
Where people introduce me to someone else without asking. Yeah. It's not a super common, but it does happen, for sure.

**Phyl Terry** (01:28:23):
It almost never is someone you want to talk to.

**Lenny Rachitsky** (01:28:26):
Yeah, that's right.

**Phyl Terry** (01:28:27):
It's not like, "Hey, let me introduce you to Sergey Brin," you know?

**Lenny Rachitsky** (01:28:31):
Yeah.

**Phyl Terry** (01:28:34):
It's [inaudible 01:28:32]. No. It's like they're trying to help somebody and you're doing them a favor, but they're not being honest.

**Lenny Rachitsky** (01:28:39):
Yeah. Okay. That's amazing advice. Phyl, we could talk for hours about so many things. You're involved in so many other things I want to hear about, but maybe one last question before we start to close out our chat. Just a broad question, is there anything else that you think would be valuable for people to know or leave with as kind of a final note around either job hunting, asking for help, anything else? And then I'm going to ask you to share all the things that you do for people that maybe could benefit from one of these other programs.

**Phyl Terry** (01:29:08):
When my book came out, we did a book party in New York and the host of it, very senior product person, got up and said, "The most important thing about this book that I learned," and they run a Job Search Council, "was, and I said this earlier, but I want to come back to it, everyone feels anxious and insecure in the job search." Lenny, everyone. It's built into the fabric of how capitalism operates. It's not something problematic in your head. It's the instability of the system, which gives it its dynamism, but which also creates trends in security and fear. Everyone feels that, Lenny. You are not alone. But my saying that is not enough. What I say in the book is that this book is like a cookbook. You don't get the calories from reading it. You got to actually make the dishes. To experience what I'm saying, you need a Job Search Council and you need to go like, "Oh my gosh, it's really true, I'm not alone. Even Lenny. Lenny feels this. Holy, I respect Lenny. Wow, look at everything Lenny has done and created, and he feels this way. Maybe I'm not crazy." There's so much else to this, but that is such a core point.

**Lenny Rachitsky** (01:30:37):
That's such an important point to leave with. And just to build on exactly what you just said about me, this strange life that I've created for myself, I originally called the project Avoid Getting a Real Job because I was worried about that. I forced myself to try something else instead.

**Phyl Terry** (01:30:53):
That's amazing. That's amazing. That's great. Well, thank you, because you have created something that's really meaningful to a lot of people, Lenny.

**Lenny Rachitsky** (01:31:00):
Thanks, Phyl. So have you. I'm so thankful that you made time to share so much advice. I think this is going to be one of the popular episodes I've done. I think it's going to help a ton of people, but we're not done yet. Tell us about some of the other stuff that you've got going on. You've mentioned product councils, you do coaching, just so people know what else might benefit them.

**Phyl Terry** (01:31:17):
21 years ago I started these product councils. And by the way, I like to show this Marty Cagan, and I go back to the late nineties, early... He was actually a client of mine when he was at eBay.

**Lenny Rachitsky** (01:31:31):
Wow.

**Phyl Terry** (01:31:32):
And I'll tell you what happened. We were about to sign a project and he decided, he called me up. Literally, we were signing that day. He called me up, "Phyl, I got bad news." "I mean, what are you telling me?"

**Lenny Rachitsky** (01:31:40):
Now?

**Phyl Terry** (01:31:41):
"I'm leaving."

**Lenny Rachitsky** (01:31:42):
Come on.

**Phyl Terry** (01:31:42):
"I'm leaving and I'm starting something." And he started the Silicon Valley Product Group.

**Lenny Rachitsky** (01:31:47):
Oh, wow.

**Phyl Terry** (01:31:47):
But why am I saying that? Because that was around the time that I started the councils and I started with Marissa. Basically, I went out and did a listening to her Lenny and I said, "Listen, I think for those of us left in the digital world after this depression, I think we need a place to come together that's not a conference with sponsors and people that are all trying to sell each other. We need a private, safe, secure environment to really talk. Does that resonate with you? Do you want that?" And they were like, "Yes," so I started this thing and Marty has been involved from day one. He has sent me something like 30% involved with members we've had over the years. We've had a couple thousand members and he just sends people over, which has been amazing.

**Phyl Terry** (01:32:33):
And so we have product councils for VPs and CPOs. We also have an associate council program for ICs and new managers. We started that a couple of years ago. It focuses on women and people of color and LGBTQ, but not exclusively. So you can be a white guy who's straight, whatever, and you're a product manager. What we care most about is if you're willing to ask for help, and you're really committed to being there for each other and being a part of this community and activity. And so that's what I've been doing for years. And I have a great team and amazing... Teresa Torres was one of the moderators of our private councils, by the way, and great friend, and been on the podcast here. Gino, obviously great friend of yours. She asked me to really emphasize asking for help and share some of the stories that I did. She's just been such an important part of my life. I can't say enough about her.

We've got those and we have CEO groups and we have [inaudible 01:33:31]. That's my day job. That's sort of what pays the bills and I've been doing for 20 plus years now. But then I also have a series of other learning communities. I'm one of these, I read. If you asked me, "If you had one job title, what would it be?" Reader. I read, Lenny. Books are machines to think with. Books are machines to think with. And I'm on a campaign to get more people reading more because... And product leaders need to read more. I have a whole bunch of book recommendations on my Lenny page, by the way, that are for product leaders, and we can talk about a few of those. But I also run something called the Reading Odyssey, which is a partnership between scholars and readers at Harvard, Cambridge, for lifelong learning and curiosity.

**Phyl Terry** (01:34:22):
I run the World Business Reading Group for high school students. It's a high school business literacy. Not financial literacy, business literacy program based on the philosophy of Warren Buffett and Charlie Mugger. And taught by really senior executives, like partners at venture capital firms, hedge funds. And I'm an investor. We have this amazing faculty. It's pro bono. We're all volunteer. We have a small charge for middle class families and it's free for anyone who can't afford it. And it's a summer program and it's going gangbusters. What else?

**Phyl Terry** (01:34:54):
Oh, Slow Art Day. So one of the things I teach people is that you need to develop mentors. Most people do not have mentors, Lenny. 95% of the people in my community of senior product leaders do not have mentors. And mentorship programs, it's like the typewriter. Our parents or grandparents have them, but we don't have them. The companies don't offer. One of the ways that everyone listening to this podcast today can get a mentor, you can get what I call a dead or distant mentor. Warren Buffett is my mentor, he just doesn't know it, which is great. I don't have to listen to everything he says and he doesn't have to take my calls. Steve Jobs is my mentor. And when I talk about mentor, I don't mean just, hey, I'm a fan, or I like the products, or I read the biography. I mean really study.

**Phyl Terry** (01:35:46):
If you really study Jobs, you have to come to 1997. He's interim CEO. So he was fired from Apple in '84, '85. Actually, after the Mac came out. He wandered the wilderness for 10 years. He created a company called Next, which wasn't next. And then in '95, '96, Apple buys the operating system from Next, and the company is in really bad shape and makes Steve the interim CEO. Interim. They wouldn't give him the full title. They're like, "Ah, the business is so terrible. You're going to destroy it anyway. Whatever. You'll be interim." And he does a bunch of stuff, but he gives a talk in 1997. He's got tattered hole jeans. There's 300 people at the developers conference. They all are pissed off. And he gets up there and he says, "You have to start with the customer, not with the technology." And that's what we're doing it at. People talk about that customer. If you really study Jobs, that's what he did.

And what does that mean? I can tell you there's a lot of product people, Lenny, who talk about customer and don't really focus. And if you really study that moment and study what Jobs did, it can inform your decisions and actions. So one of the things that Jobs also talked about was the power of art and that everyone needs to go to art museums and that you need to be inspired and it will help you think about design if you create great products. So I started a company, something called Slow Art Day, which has now been in 1,500 museums around the world. It teaches people how to slow down and look. And especially for Lenny's podcast, I am making free both the teacher materials, the leader materials, and the participant materials so that all of your podcast listeners who are running product teams can go to a local museum and do an offsite and develop more visual literacy, empathy, connection with each other, and an understanding of art that will help them be better [inaudible 01:37:46].

**Lenny Rachitsky** (01:37:46):
That is amazing. I'm going to try to do that myself.

**Phyl Terry** (01:37:49):
It will blow your mind.

**Lenny Rachitsky** (01:37:51):
So you mentioned Marty Cagan and Christian a couple times, and Marty Cagan described Chris as the most interesting person in the world. I feel like you deserve that title. You're doing so much and so much good and so much variety of things. It's really impressive. And the amount of impact you're having is wild.

**Phyl Terry** (01:38:10):
Thank you. It really means a lot.

**Lenny Rachitsky** (01:38:14):
I'm just saying it how it is. I'm really thankful you've shared so much wisdom on this podcast with everyone. I think that's going to help so many people. We're also not done yet. We've reached our very exciting lightning round. Phyl, are you ready?

**Phyl Terry** (01:38:28):
I am ready for lightning round.

**Lenny Rachitsky** (01:38:31):
Here we go. And you've talked about books. I imagine you're going to have an answer for this.

**Phyl Terry** (01:38:35):
Yes.

**Lenny Rachitsky** (01:38:35):
What are two or three books that you've recommended most to other people?

**Phyl Terry** (01:38:38):
Of course, I've recommended hundreds, but right now what I recommend is Creative Destruction, and I'm going to give your listeners the link to the right book, it's by a group of French economists. It's a little bit academic, but it's so important. It's so important for product people to understand. It is so important. More jobs get created because of creative destruction. There's not net job loss. There's more jobs created. AI is going to create more jobs, not destroy. Everybody got that wrong. Almost everybody, except the people who understood creative destruction. But you have to be close to the frontier. That's where the job creation happens. And product people, you got to be close to the frontier. You got to do whatever you can. If you're at a company that's not close to the frontier, do stuff at... I was working at Moody's Investor Service and I built one of the first 2,000 websites back in the early nineties, Lenny. I was doing all this stuff outside of work. That was bringing me closer to the technical frontier and was changing my candidate market fit. So I recommend that book.

**Phyl Terry** (01:39:36):
I also, of course, I recommend Marty's books. Now, I want to just say again, I don't want you to just read Marty's books, listen to his podcast, the great interview you guys did here at Lenny's. I want you to read and reread those books as if he's your mentor. And rereading is important, Lenny. And people say, "Oh, I listened two or three times speed on the audiobook." You are not going to have that deeply inform your decision making. Now what I'll do is I'll read a book and then I'll listen to it as a reinforcement, or I'll read it and listen to it at the same time. For the important books, Lenny, you got to read them more. And Marty's books are important.

**Phyl Terry** (01:40:20):
The last book I'll recommend is The Manual. It's a short introduction to Stoicism. People misunderstand Stoicism. They think Stoicism means repressing your feelings. That is not what Stoicism means. It means understanding and accepting your feelings, but not necessarily always being driven by them. Incorporating them. Your feelings are an important part of your decision-making system, but they shouldn't rule you. And it's a really important book. I have driven a lot of sales with that book because I really hammer it home in my book. So if you go on to Amazon, you'll see the book that's most bought along with my book is that book, right? I have other books I recommend that are on my website, but those are two or three.

**Lenny Rachitsky** (01:40:58):
Amazing. On the listening to things at fast speed, I sometimes meet folks that listen to the podcast and they're like, "Oh, this is what you sound like at regular speed, because I just listen to every podcast fast." Second question, do you have a favorite recent movie or TV show you've really enjoyed?

**Phyl Terry** (01:41:16):
So there's a great new TV show on Apple TV that is not getting the audience that it deserves. It's called Las Azules. Las Azules, the Blues. It's about the first women recruited onto the police force of Mexico City in 1971 or 2. Of course it speaks to me because 1970s, these are women and my mom and how close I was to her and what I... I saw the world through my mother's eyes, Lenny, and it really shaped me. It's a great TV show. I love that. Of course, I love the show that I've always recommended and everyone's now seen it, I hope. If they haven't, it's been out for a while, but it's... Oh, the name just escaped me. The American football coach who goes to England and becomes a soccer coach.

**Lenny Rachitsky** (01:42:10):
Oh yeah.

**Phyl Terry** (01:42:11):
How can I forget this? I've recommended it so many times.

**Lenny Rachitsky** (01:42:13):
That's the guy's name, right? The character, Ted Lasso.

**Phyl Terry** (01:42:15):
Ted Lasso, Ted Lasso. Thank you. So the kindness in there. And by the way, a great message around asking for help in that. The last thing I'll say, of course, is the Inside Out movies. The second one came out this summer. Just the way it's normalizing emotions, again, and helping us start to talk about emotions. Really love that. Okay, what else in the lightning round?

**Lenny Rachitsky** (01:42:36):
So there's this next question that I cut. I moved to other questions, but I wanted to bring it back with you. It's about your favorite interview question. You help a lot of people interview and interview better. I'm curious if there's a question that you've heard that you really like.

**Phyl Terry** (01:42:50):
If you are interviewee for a job and it's a senior level job, I want you to ask, "Tell me about a time that you, the company, brought in a senior level person and it failed, and why?" Because they often fail bringing senior level people into companies. So ask them what happened and why, and figure out how can we avoid that outcome. And hopefully they're going to have a good answer. I have a whole bunch of questions in my book, but I love that one.

**Phyl Terry** (01:43:19):
I also love, if you are on the other side, if you're hiring and you want to check references, I have the most amazing question. The most amazing question. By the way, this is the best thing I learned in my two years at the Harvard Business School. I learned this in my running and growing a small business class. It's like the best thing I've learned. It is, if you want to get references, what you do is you want to leave a voicemail or you could send an email, whatever. And you want to say, "I'm about to hire Lenny. Okay, if it would be a huge mistake if I didn't bring him on, if you think he's amazing, then call me back. Otherwise, don't bother." And that gets around all the legal blah, blah, blah, blah, blah, and it's just it cuts through. I love that question. I don't know if that resonates with you as much.

**Lenny Rachitsky** (01:44:10):
Yeah. So is the idea if you don't hear back from them, they're not necessarily amazing?

**Phyl Terry** (01:44:14):
Yeah.

**Lenny Rachitsky** (01:44:15):
Wow.

**Phyl Terry** (01:44:16):
Yeah. You're leaving that space there. And by the way, I love doing that for back channel. When you start a job or when you are accepting an offer or interviewing, I want you to back channel that boss a little. Talk to people who've worked with them, if you can. Use your network and ask them, "Would you work with this person?" And even say, "Hey, if I called you and told me I was interviewing with this guy and you should only call me back if you thought I should take the job, would you have called me back?" You'd know, and so you can do a form of it that way.

**Lenny Rachitsky** (01:44:47):
Do you have a favorite product you've recently discovered that you really love, whether it's like a digital app?

**Phyl Terry** (01:44:50):
I'm going to give you a very different kind of answer than I would normally give, but I'm hoping you and your community will appreciate this. So I did recently discover it, but I'm going to talk about a book, Lenny. So 25 years ago, a guy named Robert Strassler, who was a business guy, he started teaching at a special high school for kids who were dropping out. And he was teaching them some of the classics like Herodotus and Thucydides, expert, and they couldn't get it. And the books were terrible because there was no context, so he spent 10 years and he reinvented the format of a history book. There are 120 maps. Each of them he drew specifically, and they're only relevant to the previous one or two pages. Okay? There's a margin summary in plain English for each paragraph describing what that paragraph just said. He got the top scholars in the world to write two-page appendices on their expert topic, things they've written hundreds of books about, hundreds of pages about, you have to do it in two pages.

**Phyl Terry** (01:45:58):
And by the way, the publishing world wouldn't back it. He funded it himself. He hand drew the maps. He spent two years creating a concept index, not just a keyword index. And it's just blown apart the whole industry. Completely disrupted. He sold hundreds of thousands of copies of these books. They are a masterpiece, Lenny. They have Landmark Series. Landmark. They have new ones coming out. Every product person, in my opinion, should go look at this and look at the product design of this book. It is masterful and it teaches you a lot about usability and the reader experience. I want product people, Lenny, to get out, who are doing digital work to get out of the digital world and look at products outside the digital world for inspiration and thinking, because I don't want you all looking at the same stuff. You're going to just create the same stuff. I love tools like Calendly, which I just didn't... I've been using for years, but no one could get it right until they got it right. Those are great. How's that for an answer?

**Lenny Rachitsky** (01:47:06):
That's incredible. So what is it called again and where do you find it?

**Phyl Terry** (01:47:09):
And it's going to be on the Lenny page. If you get on [inaudible 01:47:12], if you do Landmark Herodotus or Landmark Thucydides, either one, you'll get there. Yeah.

**Lenny Rachitsky** (01:47:19):
Oh my God. Sounds incredible. Great choice. Do you have a favorite life motto that you often like to think back to and share with friends or family?

**Phyl Terry** (01:47:27):
Of course, we talked about asking for help, and I say that a lot. But I also love, and I said this earlier, books are machines to think with. And as product people, Marty and I talk about this all the time, we have to be thinking. And I coach people all the time, how can I think more? You've got to read more because books are machines to think with. Good books. There's a lot of bad books in the business world, but good books. Good books, thoughtful books. Books that'll help and shift your perspective, whether it's history or science. I read widely, and I want you to do the same. Books are machines to think with. That's probably one of my greatest lines.

**Lenny Rachitsky** (01:48:09):
Final question. Usually I try to make this fun, but I want it to come back to something practical for people. So to leave people with something they could do this week to help them find a job or help them improve the chances of finding their job, what's something you'd recommend?

**Phyl Terry** (01:48:22):
I have one very simple thing. Go to Phyl.org and sign up for a Job Search Council.

**Lenny Rachitsky** (01:48:28):
There we go.

**Phyl Terry** (01:48:29):
It's free and it will transform your search. Is it a good [inaudible 01:48:34] answer, or were you looking for something different, Lenny?

**Lenny Rachitsky** (01:48:36):
Beautiful answer. It also is exactly what I would've asked you next, which is just where do people go find the stuff you're up to and learn more about things that we've been talking about?

**Phyl Terry** (01:48:44):
Yeah.

**Lenny Rachitsky** (01:48:44):
There's phyl.org and then there's phyl.org/lenny, which has a lot of the templates and things that you referenced.

**Phyl Terry** (01:48:49):
Yeah.

**Lenny Rachitsky** (01:48:50):
Amazing. Final actual question, how can listeners be useful to you?

**Phyl Terry** (01:48:54):
That's such a lovely question. So on the Lenny page at Phyl.org, I outline some ways. We're raising $100,000 right now to build a platform for job seekers. It will remain free for job seekers. Part of what I'm doing is I'm doing a speaking tour on AI, and I'm taking all my speaking fees and putting it to this, but people can also make a donation just to that. They can also volunteer. And we're looking for, if anyone's a Salesforce admin, I'd love to have you volunteer with us. If any of you have really good PHP experience, let me know. If any of you are really good at Typeform or Formsite, which is a tool I don't like much. By the way, if anyone from Formsite is listening, your tool sucks. You need to really improve the product there. There's a lot of different ways that you can help, but those are some of the things.

**Phyl Terry** (01:49:48):
But most importantly, tell someone who you know in your life who's looking for a job, that there's a community here for you that's free, that has all these smart tools and resources and people who are genuinely here to help you and who will help transform your search in this very hard moment. People ask me, "Is this good in the hard moment?" This is born out of hard moments.

**Phyl Terry** (01:50:12):
In a great job market, it's easier to say, "Oh, I can just grab a job." You need to be more thoughtful in the down market. Now, I think you should be in the up market too. This is our moment to be there for people. This is what. And I would love, so many people still don't know this, Lenny, we want millions of people. We want to help millions of people. We have 20,000 hours of volunteer time already. We want to have millions of hours of volunteer time. We are changing something about the way capitalism works with this community. We are changing this negative consequence of creative destruction that people have just been left to fend with on their own.

**Lenny Rachitsky** (01:50:54):
Well, I'm excited to be helping spread the word. Phyl, you're wonderful. Thank you so much for being here.

**Phyl Terry** (01:51:00):
Thank you, Lenny.

**Lenny Rachitsky** (01:51:02):
Bye, everyone.

**Phyl Terry** (01:51:02):
Bye. Thank you, everybody.

**Lenny Rachitsky** (01:51:06):
Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review, as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [13/16] The things engineers are desperate for PMs to understand | Camille Fournier (author of “The Manager’s Path,” ex-CTO at Rent the Runway)

**Lenny Rachitsky** (00:00:00):
I'm curious what it is that PMs do that annoy engineers most.

**Camille Fournier** (00:00:04):
Hoarding credit. PMs, they tend to be the front-facing person for initiative. Engineers sometimes think that they don't get the credit for their work because the PM takes all the glory and all the credit for the project that they really worked very hard on.

**Lenny Rachitsky** (00:00:19):
I find the best PMs are the ones that talk the least and encourage other people to do the presenting-

**Camille Fournier** (00:00:23):
The next thing that engineers really get annoyed about with PMs, when they just don't understand the details and act like they don't matter, it just shows a real lack of empathy for the work that engineers are doing and I think it really can be very off-putting.

**Lenny Rachitsky** (00:00:34):
Is there any insight you can give about what people may be missed about the motivation of engineers, what gets them excited?

**Camille Fournier** (00:00:40):
A lot of people assume that engineers just write code and don't underestimate the ability for your engineers to want to understand the business problem, want to understand the customer problem. I think the product managers that have done the best, they're not threatened by other people having ideas.

**Lenny Rachitsky** (00:01:00):
Today, my guest is Camille Fournier. Camille is one of the most respected technology executives in tech and the author of the Manager's Path, which many considered the definitive guide for navigating your career and moving into management. Over the course of her career, she was CTO of Rent The Runway, VP of technology at Goldman Sachs, global head of engineering and architecture at JP Morgan Chase and head of platform engineering at Two Sigma. She's also releasing a new book later this year called Platform Engineering, A Guide for Technical Product and People Leaders, which you can actually pre-order today and we get into this topic in the latter half of the conversation.

**Lenny Rachitsky** (00:01:36):
We also dig into what PMs do that most annoys engineers and how to stop doing these things. Why major rewrites are often a trap. Why you may want to be doing fewer one-on-ones. What most surprises people when they become a manager and some really useful heuristics for how long you should stay in IC before you make the leap into management and tons more. This episode covers a lot of ground and we'll help you think about management. platform teams, team culture and the PM and end relationship in a whole new way. If you enjoy this podcast, don't forget to subscribe and follow it in your favorite podcasting app or YouTube.

**Camille Fournier** (00:02:23):
Thank you so much for having me.

**Lenny Rachitsky** (00:02:25):
It's my pleasure. I want to start by asking you a question that is on the minds of a lot of product managers is how to be less annoying as a product manager. I know you worked with a lot of engineers over time. I'm curious what it is that PMs do that annoy engineers most and how can PMs stop doing that?

**Camille Fournier** (00:02:42):
I would say there are a few things that PMs do that annoy engineers and to be clear, I am sure that engineers annoy PMs, just as much. So I've realized this is a two-way street. So I think there's some things that are really easy to fix and some things that are maybe a little bit harder. So the easy things to fix are hoarding credit. Sometimes I think PMs because they tend to be the front-facing person for initiatives, they're talking to customers, they're talking to the executive team, whatever. Engineers sometimes think that they don't get the credit for their work because the PM takes all the glory and all the credit for the project that they really worked very hard on, right?

**Camille Fournier** (00:03:26):
So making every effort to be credit sharing and inclusive of the engineering team and giving them the opportunity to speak about their contributions when it makes sense. I think those are all things that PMs can do to avoid that kind of ... What I consider a pretty easy annoyance, just like don't pour it all the credit. This is not just you, right? There's a lot of work has to go into that. I think that sort of dovetails into the next thing that engineers really get annoyed about with PMs when they just don't understand the details and act like they don't matter and I think this is just a little bit of a cultural difference.

**Camille Fournier** (00:04:05):
I mean, even managers, just normal managers, people like me who are looking across really broad areas or you have to be kind of big picture focused, and you forget that engineering done successfully really is all about the details and you don't necessarily have to understand all of those details, but when you act like they don't matter and you don't care about them and it's just like, I don't care, just like tell me when you can get this done or why is it going to take so long? My god, this just seems like such a little thing. It just shows a real lack of empathy for the work that engineers are doing and I think it really can be very off-putting.

**Camille Fournier** (00:04:42):
Even though I will totally agree that sometimes you're going to get details that don't really matter and you just have to be a little bit patient in those circumstances.

**Lenny Rachitsky** (00:04:50):
**Camille Fournier** (00:07:08):
The third is playing telephone. Anybody in a manager role can fall victim to this, but I think PMs especially can be very annoying. So if you are being asked questions that you cannot answer because you just don't know or because that's something that involves a level of technical detail that only the engineers have that you just don't have, and you put yourself in this in-between position where people ask you questions, you turn around, you ask the engineers questions, you take whatever they say, especially when you don't really understand it, which happens sometimes, right? Go back to the original asker and sort of get in this middle-person scenario.

**Camille Fournier** (00:07:51):
I think that is very annoying and frankly, it's a waste of time for everyone. This is something that managers of all stripes do, but PMs definitely do it and that drives engineers, particularly senior engineers on projects, it's crazy. And then, the last one that I wanted to put on this list is just when sometimes it feels like product managers want to hoard all the ideas for themselves, right? They want to be the ones that come up with every single sort of product idea and every single detail. What I see happen in those cases is that I see engineers start to over-engineer things, because engineers are like, well, I need to take control of something.

**Camille Fournier** (00:08:30):
I want to have some creative outlet, so I'm going to use my engineering skills as my creative outlet and I'm going to spend a lot of time obsessing over the right framework or the right this, that or the other. That may actually not matter that much with products delivery, but when you take the people that are part of the project team out of the creative loop entirely, they're going to find that creative outlet somewhere else and it's actually kind of bad for the product.

**Lenny Rachitsky** (00:08:56):
That's really interesting, the last one. So you're saying if you keep engineers from having a voice in what you're building and prioritizing, that's what encourages engineers to rethink, let's just rebuild this thing, let's use a new framework, let's rewrite this system.

**Camille Fournier** (00:09:09):
Yeah, I mean that's my ... that happens without you doing that, sometimes.

**Lenny Rachitsky** (00:09:10):
Yeah.

**Camille Fournier** (00:09:18):
I do think ... I think when I see it worst and I can basically always predict what I'm going to see, a lot of that kind of engineers building stuff, finding creative outlets and kind of building stuff, maybe they shouldn't be. I'm going to find that in places where they are so quashed their creativity for the actual business or product that they're building and their voice in that is so ignored that they don't have any outlets in that space and so, they are going to use the space that they have an outlet in, the place where they have some control and that's usually the technology choices and the details there.

**Lenny Rachitsky** (00:09:54):
That's fascinating. I want to actually dig further into that around rewrites. You have a really interesting take on that, but before we get there, let me spend a little time on some of these. These are awesome. So on this theme of not involving engineers in ideation and coming up with what you're actually building, what have you seen just very tactically, is there anything you've seen that PM do super well?

**Camille Fournier** (00:10:17):
I think the product managers that have done the best, they're not threatened by other people having ideas. They're not threatened by the engineering team being full of smart people because they realize that yeah, some of the engineers may have good ideas, but they still don't really know how to do the product job. Just my experience is there are plenty of engineers who actually think they can be product managers and they don't really understand all of the elements of the product job that they would need to be successful. And when product managers take the time to build those relationships, well, make sure that people do feel like they can both share their ideas, but also that they start to appreciate what the job of this product person actually is.

**Camille Fournier** (00:11:02):
And what they're really bringing to the table in terms of really how do we measure this input? How do we really understand the customers, how do we really think through the details of what's going to make this successful from a business or a customer perspective? I do think that that creates just a much better interaction pattern and then, engineers can feel good about sharing ideas and understanding that many of them won't go anywhere, but there's somebody that's actually going to listen and take the time to care about them.

**Lenny Rachitsky** (00:11:37):
Coming back to some of the things that you said annoy engineers of PMs, this idea of playing the middle person, sounds like the solution clearly is there. Just connect the engineer to the other engineer or your engineer to the PM that's trying to figure this out, right?

**Camille Fournier** (00:11:49):
That one is not always easy because again, you have this tension of a lot of the job, of any management role is being in meetings and filtering stuff so that people who are in focus ... individual contributor mode can focus and get things done and not spend half of their weekend in meetings. You've just got to be very careful about knowing when you're crossing that line and when you're crossing it too often. And if you're having to often say, "Let me get back to you, let me get back to you, I don't know, let me get back to you." Maybe the person you're talking to is asking the wrong level of questions of you.

**Camille Fournier** (00:12:26):
Maybe you need to connect them to the engineers directly, but just being aware that that shouldn't be a default behavior. That will happen occasionally, but it shouldn't be a thing that happens a lot because if it's happening a lot, then you're likely missing something, you're likely losing something in that telephone game translation and that's going to cause problems over time.

**Lenny Rachitsky** (00:12:47):
Awesome. So basically, if you're just finding your middle person too much, then it may be time to connect people directly. And I know the reason PMs often are afraid of this is the engineer may agree to something that they think is a bad idea for their team or may not understand all the ramifications on the product or just obviously, just spend their time in meetings and not be building anything.

**Camille Fournier** (00:13:12):
Yeah, yeah, and sometimes you mean you do it in a group meeting. I feel like Slack and other chat type things actually make it a lot easier to see, have the right people in a group in a thing, but again, that's distracting. So there's not an easy solution to that one, just I think it's important to be aware of it.

**Lenny Rachitsky** (00:13:27):
Yeah, that's a really good point. And then, in terms of hoarding credit, is there any tactical thing you've seen PMs do really well here is it, just every time they're announcing the product, "Hey, these engineers were involved or-"

**Camille Fournier** (00:13:37):
It's more than just saying thank you to all these people, but it's actually sometimes stepping back and letting other people speak, especially if it's something that's a really, really big technical lift. I don't think there's a super easy fix to that. I think it is just really being mindful that that can be very much a sore point for engineers when they just feel like, "This is my work, I'm not getting any credit for it, and this person is hogging all the glory."

**Lenny Rachitsky** (00:14:07):
I love that. Yeah, I find the best PMs are the ones that talk the least and encourage other people to do the presenting and announcing. And so, I think that's a really good reminder is let your engineers do that. Okay, amazing. So we talked a little bit about this idea of rewriting and how engineers sometimes just want to rewrite the system and I think a lot of PMs do too. A lot of times you're building your features on a thing that someone that doesn't even work at the company and were built five, 10 years ago, and there's always this sense of, "Okay, maybe we should just rewrite this thing everything will move so much faster."

**Lenny Rachitsky** (00:14:39):
Do you have a really interesting take that I think a lot of PMs will love to hear, which is that rewrites are often a big trap and often don't end up being what you think they might be? Can you just talk about your experience and perspective on this?

**Camille Fournier** (00:14:50):
Yeah, so I mean I have personally overseen a number of, if not quite rewrites, re-architectures and major system evolutions. So I absolutely do think they are sometimes a thing that needs to happen, but I also, have seen so many instances of cases where the engineers have convinced themselves that the only solution to the woes that they're experiencing with the system, it's hard to support, it's hard to change. Nobody wants to work on it, because it's this old crappy technology, is that they just have to go over to the side, build the new thing that will replace this old system and that is going to sort of free them from their misery.

**Camille Fournier** (00:15:41):
And I think projects where you acknowledge that you do need to do an uplift, but you make a very thoughtful staged plan as to how you're going to do that, and you really think through, okay, we don't need to touch all of this stuff, but we're going to take the recommendation system, it really needs to be uplifted and that's a well-contained, you know, API and so we can start to fix that without having to change the whole whatever web framework, right? So I do think there are ways to do these evolutions, but people really underestimate. They underestimate the time to migrate stuff from the old system to the new system, is a huge, huge problem.

**Camille Fournier** (00:16:24):
Particularly when you're talking about systems where you have sort of external people using the system in some way, whether it's web UIs or APIs. You think, "Oh, we kind of know what's going on, so it's not going to be that big a deal." Engineers notoriously, notoriously, notoriously, massively underestimate the migration time for old system to new system and that causes a lot of problems. By the way, you still have to support the old system while you're working on the new system. So I doubt many of the PMs in the audience are ever happy when they hear, we need to go away for six months, a year, two years to build this new thing and we just can't really add any features to the system in the interim.

**Camille Fournier** (00:17:08):
That's infuriating, I'm sure, and frankly that's a problem and I don't know that that should be an acceptable answer in many cases. There may occasionally again be a case where that is what has to happen, but I think most of the time you can't really afford to just say we're going to go away and we're not going to touch the system for a long time and we're going to build something new over here. So many things about why that doesn't make any sense. So this is a little bit of field of the blog post that you're referring to. So, if you've got a system that doesn't really need feature enhancement or development because it's just sort of fine and the users are using it.

**Camille Fournier** (00:17:47):
And it's just annoying to the engineers, why in the world would you invest so much money in writing a new version of it? There's a little bit of a cognitive dissonance that sometimes happens if you need to do new stuff and the old system literally is not ... it's not possible to do the new stuff that you need to do, you need to figure out a path to get to a sustainable system or you can continue to add and evolve. You should be investing and so there does need to be an investment, but you have to ask yourself, if I could go away and not touch this and not do anything to it for a long period of time without it really harming my business, is it worthwhile to change it at all?

Does it matter, and there's some questions there. I also think that when people try to do rewrites, particularly again if it's something that you're really trying to just move to a new language for example or sort of modernize in a certain way, [inaudible 00:18:45] a lot of times people really underestimate what the old system does and how well they know what the old system does. There's so much logic buried in legacy systems, it tends to be undocumented, it tends to be weird. You haven't thought through all the business rules, you haven't thought through the data formatting and I think again, it's much, much harder to replicate all the important things from the old system to the new system than people expect.

**Camille Fournier** (00:19:14):
So there's more than that, but I do think sometimes you need to evolve systems and my advice would be when you're struggling making an evolution plan, take pieces potentially of the old system, uplift them, make them more scalable, make them easier to work with, clean up the tech debt, but trying to say we're going to just go away. We're going to rewrite, we're going to build something brand new and it's going to solve all our problems, it just very rarely works.

**Lenny Rachitsky** (00:19:42):
I think a lot of PMs will be like, "Yes, thank you so much for saying this, because I think that's also always a big struggle between the ENG team and the PM team." So just to summarize what I think a lot of people miss or what you're saying a lot of people miss when they're thinking about let's rewrite this thing, is the migration to the new system, migrating customers, users, data to the new thing is going to take a lot longer than you expect. You underestimate knowing what it actually does and you're going to miss features and you can introduce new bugs. This actually is very similar to what I've seen with redesigning a whole product flow.

**Lenny Rachitsky** (00:20:15):
There's always this sense of let's just rethink this onboarding flow from scratch or let's rebuild this part of the product and always it ends up being a negative experiment result. It always ends up being less good and then, you have to spend all this time clawing back to get to where you were and also, you forget the stuff that would ... the features that you had and you're like, "Oh, shit, I forgot about that feature, I forgot about that feature." So it's interesting, there's a very similar situation in the product side. Okay, amazing. I'm going to go to a slightly different topic, which is around engineering leadership.

**Lenny Rachitsky** (00:20:45):
So I know you've written a lot about engineering leadership, you spent a lot of times with engineering leaders, so I have a few questions here. One is that I know that one of the things that haunts engineering leaders most is finding the balance between staying technical and their technical expertise, and their leadership expertise and basically finding the right altitude of how high ... where to be in the org and also how in the details to be, and also staying technical enough to be relevant. What have you learned in your own experience of finding that balance and how do you advise engineering leaders as they struggle with this?

**Camille Fournier** (00:21:18):
Yeah, so one piece of advice I give everybody is don't stop being a hands-on technical until you feel like it's in your bones. You feel like you've got mastery that you could ... if you know a second language fluently or if you played an instrument really, really seriously for a long time or maybe a sport really, really seriously for a long time, you'll be familiar with the ... I haven't done that in a long time, but if I was to pick it up, it would be rusty, but I would get there pretty quickly, right? Maybe physically, I wouldn't be as strong as I was or whatever, but I would get there. You can do that with writing code.

**Camille Fournier** (00:21:58):
You can do that with technical skills if you do it for long enough, I think you can develop sort of a baseline mastery, where you're not going to be as fast and a lot of the challenges of being technical is actually in all the tooling and all the tooling evolution, but you're not going to be necessarily as fast as people who have been doing it, but you won't be completely clueless and I think that all the things you learn getting to that really comfortable mastery of some part of hands-on tech will stay with you and will help you just maintain a level of confidence in your own technical know-how and maintain a level of empathy for what it means to be a good engineer.

**Camille Fournier** (00:22:38):
And I think just make you a lot less anxious about being hands-off, even though I think everybody who makes that transition for a year or two, especially if you're really have to be hands-off or you just don't have time to write code at all, you are going to be anxious for a while no matter what. The things to then think about from that point is, being technical is also just about knowing what's going on and paying attention and being able to ask ... what people care about with technical leaders in my experience is they want people who actually seem like they sort of understand what you're doing and can ask good questions and help guide you to better decisions without actually being the one who's like, "Oh no, you need to use this library instead of that library."

**Camille Fournier** (00:23:25):
It's actually sort of annoying when somebody that's very senior and hands-off tries to tell you, don't use this library, use that library because I don't know about you, but I don't really believe people who have been hands-off for that long when they try to tell me what to do and the thing that I'm kind of the expert in right now, but I do appreciate it when I'm given more guidance around, well, have you considered this? Tell me about how you're planning to handle that situation. What are the major technical challenges with implementing this and that can actually spend the time to listen and ask thoughtful questions on the back of that.

**Camille Fournier** (00:24:00):
The last thing I would say is surround yourself with smart technical people, also as much as you can, and be willing to listen to them, talk about tech and ask them questions about things. I feel like that's part of the reason that I am able to stay technically savvy and credible amongst people who work for me is not that I'm writing code because I'm not. But I am listening to a lot of very smart people talk about technology a lot, down to the level of I'm trying to debug this database issue, what the heck is going on? And just constantly being interested in those stories and learning from them and learning what really smart engineers are thinking about and worrying about.

**Camille Fournier** (00:24:47):
The more you can build that network of people that are still hands-on and stay in touch with that, I do think that helps a lot.

**Lenny Rachitsky** (00:24:56):
So on my last point, how are you actually doing that? Is it watching ... going to conferences with friends, something else?

**Camille Fournier** (00:25:01):
Yeah, yeah. I mean, I guess for me it started with going to conferences, meeting people. Now, I'm in a lot of different chat groups where people are just sort of regularly communicating, staying in touch with ... staying in touch with former colleagues. I will admit I'm kind of a social person and I have a big network, so this may be easier said than done, but I do think being in the right group chats ... I also think, I'm sure reading various tech news and tech sort of commentary and discussion boards, I mean it's definitely a mixed bag of that stuff I think that like ... but there are smart people. You find the smart people in there, you sort of follow what they're saying. I think that's another good way to keep that perspective.

**Lenny Rachitsky** (00:25:51):
Is it a sign, I wonder if you're not interested in that anymore that maybe you should move into something else. I don't know. If you're like, don't really pay attention to engineering technicalness.

**Camille Fournier** (00:26:02):
It's hard for me to say because I'm such a nerd. I really love tech. I'm in this industry, because I'm just actually genuinely very interested in certain corners, not every corner of technology but certain corners of technology. I want to know what the latest stuff that's happening in databases and infrastructure and I find it all very interesting. I find the problems interesting. So I think that makes me very successful because I just have that natural curiosity and passion and interest in it. But I don't know that that's a total prerequisite.

**Lenny Rachitsky** (00:26:36):
**Camille Fournier** (00:26:47):
I think maybe I saw a clip of it, but I haven't listened to it.

**Lenny Rachitsky** (00:26:48):
So I think one of the most successful indie engineers where he just works on his own thing all by himself, never raises money, just launch his products that make money. And a funny thing about him is he works ... all stuff is in PHP and jQuery. He's just like, this works. I've always had this to do, learn Node.js, learn Python. And I'm like, I'm too busy to build ... while I'm building to learn these new things and he's been incredibly successful. So it touches on sometimes maybe you don't need to just keep rewriting to the newest frameworks.

**Camille Fournier** (00:27:15):
Yeah, no, I mean look, I actually ... I feel like I know a lot of smart engineers who are in that category. They're like, we built amazing things in PHP and relatively simple SQL and so much of tech is over-engineering things and I don't totally disagree. I think the challenge is though, of course, what works as a one person show, doesn't always work in a scaled organization for better or for worse, we're in different like, you've got to match what makes one person really productive. Will it make 100 people, 1000 people, even 10 people really productive? That's always a little hard to tell and that's why I do think you should be not ... I think it's always a good idea to be keeping up with what's happening and what's changing in whatever kind of side of tech you're in, but not obsessively chasing every fad.

**Camille Fournier** (00:28:15):
I think being aware of, but not necessarily chasing them, but particularly, if you're working in groups, teams, larger companies, even midsize companies, there is some amount of, you're balancing the tech that makes one person go fast with the tech that makes 10 or 100 people go fast and those are not always exactly the same thing.

**Lenny Rachitsky** (00:28:35):
Just to kind follow this thread a little bit and to kind of nerd snipe you a little bit, is there a platform or language or framework these days that you're either very excited about that you think is helping people move faster and do better work or the opposite just like this is ... everyone is excited but this is not good.

**Camille Fournier** (00:28:52):
I will say this, one example I actually put in my own notes for this conversation was GraphQL. I would not tell a team to use or not use GraphQL at this point because it's a bit out of my expertise zone and my level of management. It's not really my job anyway, but it is one of the things that is both popular and thought relatively poorly of by most of the senior people that I know. And so, I guess I would say that's one where I would say if you're seriously thinking about it and you're not Facebook, you may really want to make sure you know what problem you're trying to solve because the impression that I have from sort of listening to people talk about it is that GraphQL is kind of trying to promise front-end engineers that they don't really have to collaborate with backend engineers.

**Camille Fournier** (00:29:49):
And they can just sort of build whatever and it'll all be fine, and it just doesn't ever seem to work out that well for anybody who actually does it in practice. Again, obviously, it can work out that well because Facebook has made a great go of it. I'm sure there are other companies that are, but that's one where it's not that new but it remains one of these things where it seems like an interesting fad that maybe is burning a lot of people.

**Lenny Rachitsky** (00:30:13):
That's awesome. I appreciate you sharing that. I don't know if this is exactly an example of this, but on that podcast levels, I forget his actual name, Peter I think, shared that whenever there's a framework that has a VC funded startup behind it, that's not a good sign because their job now is to convince engineers to use it and then pay for it and that's not necessarily going to be the best product.

**Camille Fournier** (00:30:34):
That's true. Although I will say that some of the most time-wasting frameworks have also just come out of big companies, or the context of the big company that may have made that framework super useful within that context doesn't translate to startup or small company or even big company that doesn't have the rest of the context set, but I don't think ... He's not wrong. I also just think big companies share the blame on that one.

**Lenny Rachitsky** (00:31:05):
I guess we should all just come back to PHP and jQuery and be simple.

**Camille Fournier** (00:31:09):
Maybe.

**Lenny Rachitsky** (00:31:10):
Okay, so to close out this thread on engineering leaders, finding the right balance, just to summarize your advice here. One is get to mastery before and is your advice here, get to this point before you move into engineering.

**Camille Fournier** (00:31:23):
Engineering management. I will say part of this is also in particular, if you happen to be a woman or otherwise, underrepresented person in tech because people will tend to underestimate your technical abilities just unfortunately as a get-go. I also think it's particularly important to kind of develop that internal confidence in your abilities before you make this sort of scary leap, which is scary for everyone of have a ... if you have that mastery before you make the leap, I wish more people would do this because honestly, I do think there are a lot of people who never really gained the mastery. They go into management, they lose it and some of them are still perfectly good managers and look, there are good managers who were never technical to begin with.

**Camille Fournier** (00:32:09):
I don't want to say that that's impossible. I just think that if you care about being technical, if you are technical now and you want to maintain that tech-savvy, don't just become a manager the first time somebody offers it to you. Make sure you've really spent your good time writing code.

**Lenny Rachitsky** (00:32:28):
Is there a number of years heuristic you think about or some way to tell you that maybe you've hit that point?

**Camille Fournier** (00:32:34):
I think this has been since disproven, but it was that 10,000 hours idea of mastery at some point. For me, it was like an undergraduate degree, a graduate degree, and four or five years of full-time work. So maybe I might be slow. I didn't start coding a lot in middle school like people might do now, but I felt like ... I took several years of hands-on work in a very intense undergraduate and graduate programs for me. So I do think it's probably somewhere in the 10-year range of really having spent a lot of your time over those years writing code and really understanding how to be a technical expert.

**Lenny Rachitsky** (00:33:17):
Got it. So essentially if you're thinking about moving into management as an engineer, you may want to wait until you've done it for 10 years in some form, which I think is a lot longer than a lot of people would've thought. And I imagine many people are not doing that. And then, in your experience not doing it as well, it could be-

**Camille Fournier** (00:33:35):
If you were programming a lot in high school and you got an undergraduate degree, so let's say you've got six years-

**Lenny Rachitsky** (00:33:42):
I see.

**Camille Fournier** (00:33:42):
You may only need four or five years of work, 40 hour a week writing code experience. I'm sure it depends on the company, but I do think when you see people that are 23, they are just out very recently out of school, it's a different thing if you're a founder and that's a whole different life, but if you're at a big company and somebody is like you have great communication skills, why don't you start to become a manager? Often they're actually pushing you to become a project manager, which is actually also the worst sort of path to real leadership in my opinion. If you don't feel like you're done ... Also, if you just don't feel like you're done, if you're still having fun writing code, don't rush becoming a manager, writing code is awesome. Have fun, enjoy it.

**Lenny Rachitsky** (00:34:29):
I know exactly what you mean. So I used to be an engineer, actually I was an engineer for 10 years. I definitely don't have mastery at this point. I moved into product from that and I definitely so missed actually just sitting there and writing code and building stuff, that was very hard to give up. I imagine you still missed that.

**Camille Fournier** (00:34:45):
I think I might've forgotten about it at this point, but there is nothing as satisfying because you get the fast feedback loop. It's just wonderful. Yeah.

**Lenny Rachitsky** (00:34:56):
**Camille Fournier** (00:36:24):
Yeah, I mean I think there's a few things. I do think ... assuming that they're actually trying to do it well, I do think there are a lot of people who move into management and then just don't really understand the job at all and aren't even self-aware enough to know that they don't understand it, but for those who are trying to do it, trying to do it well. I think a few things that tend to surprise them are the fact that you really don't own your time as a manager. Your team and your management and the company owns your time. More and more the more senior you become as a manager. I think individual contributors often think that if they become a manager, they will still have some of the freedom that they have as a senior individual contributor.

**Camille Fournier** (00:37:08):
But then they'll also be able to tell people what to do and they'll have all this authority. And the reality is, management is much more ... I'm not a huge fan of servant leadership exactly, but management really is a service job. You are serving the team, you are serving the company. Your job is to help make things better and that usually doesn't mean that you're making all the decisions. It usually doesn't mean that you snap your fingers and people jump. Because if you try that, especially in tech, right? People are just going to revolt. They're not going to listen to you. It's just too hard to have ... that's not the culture that we live in.

**Camille Fournier** (00:37:53):
And I don't think that's a good culture. I don't think that command and control, I tell you what to do and you do it. It just doesn't create creativity, right? It's the same thing as like PMs, trying to have all the ideas, right? No, you've got all these brilliant people working for you on a team, your job as a manager is not to tell them what to do in every single case. Occasionally, yes, a lot more. If you're trying to convince them of what you think should happen. In some ways, you're sort of nudging, you're encouraging, you're directing, you're setting guardrails for processes or behaviors or whatever, but it's not this glorious fearless leader.

**Camille Fournier** (00:38:36):
I make all these decisions and everyone looks up to me and it's awesome kind of job. It's much more grueling, much more ... you are really just sort of reacting to things in the moment. And it can be very ... it's a hard job. I do think particularly management when done well, when you're really trying to do it in a thoughtful kind, but also, productive way is a very hard job.

**Lenny Rachitsky** (00:39:06):
I wonder if engineering is where most ... where the highest percentage of people that move into management move back to IC. I've seen that a bunch and I wonder if engineers are the most common.

**Camille Fournier** (00:39:16):
I don't know, but-

**Lenny Rachitsky** (00:39:18):
After realizing what you just said is true, like, "Oh, what I done-"

**Camille Fournier** (00:39:22):
So do you not think product managers also do this? Because I think product managers also actually suffer from exactly this kind of-

**Lenny Rachitsky** (00:39:28):
They do.

**Camille Fournier** (00:39:28):
Maybe sometimes-

**Lenny Rachitsky** (00:39:28):
They do.

**Camille Fournier** (00:39:28):
Yeah.

**Lenny Rachitsky** (00:39:30):
But interestingly, I was an engineering manager earlier in my career. I really did not like it. I was very unhappy in that role. As a PM manager though, I was very happy, it was a lot easier.

**Camille Fournier** (00:39:43):
Yeah, because PMs are way easier to manage. PMs are awesome to manage. PMs want to ... they're just so helpful. They want to do this ... they're good communicators. I love managing PMs. I have to say, I have to say, just my experience, engineers are such a pain. They're all primadonnas. I am an engineer, but PMs are more fun to manage my experience. So actually, you have a point. You have a point.

**Lenny Rachitsky** (00:40:12):
But I wonder. Yeah, because I haven't seen a lot of PM managers move back to IC product management. I find that once you can build product through teams and not sit there all day in Excel and check in on deadlines and things, it's hard to give that part up. You kind of enjoy being higher up in that chain. Yeah. Kind of along these lines, something that you have a really interesting perspective on is one-on-ones. Most people are like have one-on-ones with everyone, have them regularly, they're really important. You actually have this contrarian take that maybe you should have less one-on-ones, especially as an engineering manager, you talk about that.

**Camille Fournier** (00:40:46):
Yeah, so to be clear, you should have one-on-ones with your direct reports and your manager and you should hold those sacred ... I tend to do my weekly or maybe every other week. So this is not about that set of one-on-ones. So the one-on-ones of the people that you are directly managing and with your own manager. But I think there is this ... I don't know if it's the remote work, sort of explosion that's happened or it's big companies or what, but what I've seen and I've heard a lot of friends at many companies complain about is this idea that everybody is doing one-on-ones with everyone else. So the manager is doing one-on-ones with their team. They're also doing one-on-ones with all of their peers.

**Camille Fournier** (00:41:35):
They're doing one-on-ones with all of their stakeholders. They're doing one-on-ones with product and design. And I think that it's just not a scalable approach, right? Linearly scale with the number of relationships you have. And so, as your company grows, as the number of things your team supports grow, as the team grows, you just can't scale that way. You cannot expect to maintain a one-on-one approach to kind of organizational relationship building and awareness passed a fairly small team/company. I also think that people think that one-on-ones will solve all of their problems. And I think the reality is you have this one-on-ones with people that don't really want to have a one-on-one with you.

**Camille Fournier** (00:42:30):
If they're not in the mind to invest in your relationship, if they don't really care about what you're doing, they actually may not like it that you're asking them for a one-on-one, let me show up like, because it's like, okay, well I should do this to be a good corporate citizen or whatever. But they're just like, why are we doing this? What is the point of this? I also think that one-on-ones, particularly when you use them first of stakeholder management. So when you're meeting with people that's not your team, but other stakeholders that you may need to deal with, if you have a lot of stakeholders ... so I've been in a lot of positions where I have a lot of internal stakeholders because I build internal platforms is a big part of what my job has been in the last many years.

**Camille Fournier** (00:43:07):
Having all these meetings as one-on-ones with those stakeholders can actually be kind of a weakness because when your stakeholders just tell you in a one-on-one that they're happy or unhappy with things, your unhappy stakeholders aren't hearing that. So you may have one really unhappy stakeholder and five really happy ones and all you're saying to your unhappy one is, "Well, everybody else is happy and they're not seeing it for themselves." And they're just having to say, "Trust me, because I've had these other one-on-ones with all these people and they're saying it's fine." And it just kind of sounds whiny.

**Camille Fournier** (00:43:37):
And so, when you're dealing with a lot of stakeholders and trying to just rely on one-on-one management of that is actually not very productive in a lot of ways. So in general, I guess I just think people should respect their own time more. As much as I just said management, you're kind of at everyone's mercy and that is true, but also respect your time. Don't just load yourself up with meetings because you're a manager and that's your job. Do you really have something to talk to a person about? Do you really need to ... when you have a one-on-one meeting with someone, you are asking for their time. You shouldn't just be doing that kind of haphazardly for fun.

**Camille Fournier** (00:44:24):
This is a little bit of my personality. I'm not a great company networker. Some people are really good at just like, let's go to get coffee, let's go to lunch and let's hang out and build a relationship. And honestly, those people are really successful in many ways that I am not. I do sort of envy that skill. I'm really good if I work with you. If I work with you on something, generally speaking, people really come to respect me because I'm very engaged and I'm a really good collaborator in various ways, but I'm really bad at just getting to know you random one-on-one, where we don't have a purpose to the meeting.

**Camille Fournier** (00:44:57):
And that's not to say those are always bad, but I do think that a lot of people with ... that's your comfort zone, if that getting to know you, random, relationship building one-on-one is your comfort zone, I should probably do more of them. You should probably do fewer of them because you should always be pushing yourself to get out of your comfort zone and are you really getting something out of that or are you just being able to tick a checkbox that says, I had eight meetings today, therefore I was productive.

**Lenny Rachitsky** (00:45:26):
Yeah, that super resonates. Kind of pulling on this thread of how you operate and how you work something that I've heard you're really known for, is creating a work culture where people work really hard but also, have a really good work-life balance. And when we were chatting, you, you actually told me you're not a great believer in working too hard. Can you just talk about this philosophy on building a great culture where people don't work too hard but also, get stuff done and don't burn out?

**Camille Fournier** (00:45:51):
I think we all understand that if we could just figure out and focus on really the most important things, we would just ... everything would be better. And it's hard to figure out what the most important things are, but overwork kind of lets you just sidestep doing the hard work of figuring out what's important in the first place. I listened to one of your podcasts where you talked to someone who said, if you've never fired someone and regretted it, you don't know where the line is, of who you should and shouldn't buy. And I will admit I have mixed feelings about that, although I get what you're saying. If you don't regularly reset your expectations of what you should and shouldn't let slide, do you have any idea where the line of what is actually important to work on is?

**Camille Fournier** (00:46:41):
I just think ... and the thing about that is it's not like firing people where you do it once or twice and you regret it and you learn pretty quickly, unfortunately. I think you actually have to kind of regularly test the circumstances and challenge with, am I really getting the most out of myself? Am I really producing the best value or am I just making ... swaging my internal guilt about I need to work 60-hour weeks, I need to sleep in the office, I need to whatever, to show that I'm a hard worker and I care. And so, I guess I do really think that people should challenge themselves to be focused and get the important stuff done and always be asking themselves what is important to do?

**Camille Fournier** (00:47:37):
And what's important to do does change over time. But if you're not regularly doing an audit of your time and trying to knock things off that list that don't matter, you're probably wasting a lot of time on things that don't matter and okay, you don't want to work less. You love working a lot, that's fine, but you could probably just be getting a lot more valuable stuff done if you would do these audits regularly, right? I also think people don't delegate enough. So, if you don't delegate, then you get overwhelmed because your team doesn't know how to do anything, because you haven't bothered to spend the time delegating, which actually takes more time initially, usually, you have to teach people whatever it is that you're trying to get them to do.

**Camille Fournier** (00:48:19):
Not always, sometimes they'll surprise you and they're better at it than you are, but maybe not. And so, you have to teach them, but then you finally ... you freed yourself up to scale. So I guess I'm just a real believer that working hard and a focused way for over fewer hours I think is a more productive way to approach work. And I think I have lived my career that way. I've been successful in it and I have encouraged it and people who have worked for me, and I think I've seen a lot of success through it, but it's not a thoughtless exercise. It's an active process of constant reflection to get to that focus.

**Lenny Rachitsky** (00:49:11):
For someone that is listening to this and is like, I want to start doing this, is there anything ... any specific practice you've found useful or any specific tactic to actually do this well?

**Camille Fournier** (00:49:23):
I think there's different approaches you could take, right? One approach you could take is just like every Friday I'm going to stop working at 4 PM or something, let's say, and I am not, or I'm not going to let myself work this weekend. Forcing yourself to log off, forcing yourself to have boundaries and saying ... and then doing out of what did I get done, I think can help. That's scary. And people don't like doing that, but I do think that that's one of the best ways to do it is really just saying, I'm going to log off. I'm going to log off every day this week at 6 PM. I'm going to ... because your brain is probably going to keep thinking.

**Camille Fournier** (00:50:10):
You might still be a little stressed out, you're still thinking about work, you're still worrying about it, but there is a difference between thinking about it and doing it, and particularly for those of you who are earlier in your careers, this was actually, I think one of the reasons that I did get to mastery was because I was extremely good at being focused when I was at work, when I was a hands-on programmer and really writing code for many of the hours of the day. And that meant I was not ... this was pre heavy social media. I was much less distracted, which I don't know if I would be able to do it in the modern era as easily, but having that real heavy focus time because I was like, "I don't want to work on the weekend. I don't want to stay here until 9 PM every night. I just want to get this done." And it meant that I didn't do quite as many copies.

**Camille Fournier** (00:50:58):
I didn't go to lunch and chat with people all every day, but I was very, very productive and I learned to get a lot done in a short period of time. And I do think learning those skills earlier in your career and then continuing to apply them throughout your career is another piece of advice.

**Lenny Rachitsky** (00:51:16):
In terms of staying and getting focused, is there anything that helps you focus? Is it like headphones, a drink? What gets you in the zone?

**Camille Fournier** (00:51:24):
I mean, yeah, I have a lot of rituals. I have my caffeination rituals.

**Lenny Rachitsky** (00:51:31):
Say more.

**Camille Fournier** (00:51:32):
Well, I mean I can't drink coffee anymore because my stomach got messed up at some point, but I drink tea in the morning. I drink caffeinated water also. I have a Diet Coke at lunch, so I have these rituals of my caffeine hits that help me. I have to be in a quiet place. I do find non-music that is ... I really like Four Tet, for example, as music to focus or the new Andre 3000 Flute album is extremely good for focusing, where it's not quite predictable, no lyrics and not quite predictable. For me, that helps me focus a lot. I can't be listening to any words and focus. My brain just cannot ignore words. So those are some of the things I use to help folks.

**Lenny Rachitsky** (00:52:24):
That is awesome. I have a similar caffeine strategy. I'm drinking tea always during these podcasts and this little thing I got here and then, my wife doesn't want me to drink Diet Coke because she thinks the sugar and it is not good, but I still drink it sometimes and it works great. I switched to green tea. That's my approach. Start with black tea and then switch to green tea.

**Camille Fournier** (00:52:40):
That's smart.

**Lenny Rachitsky** (00:52:41):
Man, there's so many things you shared that I wanted to dig into. Let me share a couple of things. Your point about delegating I thought was really important, and there's another benefit to learning to delegate, which is team members feel empowered. You give them a chance to take on responsibility and they feel like I have an opportunity to show I can do this other thing.

**Camille Fournier** (00:53:02):
Yeah, and you're never going to scale if you don't delegate.

**Lenny Rachitsky** (00:53:06):
Yeah, and it's hard to start learning to do that, but once you get good at it, it becomes so great. I love just delegate everything every time, and people enjoy it. They're like, "Amazing. You're giving me opportunity." The thing you said about how ... if you're not sometimes regretting something you cut or potentially firing someone you don't regret, Elon actually, Elon Musk has a great approach to this. I don't know if you've heard his philosophy on optimizing. He has this whole five-step process of figuring out how to optimize something, and one of them is try to cut things like, do we need this thing or not? And if you don't recognize that 10% of stuff you cut, it was a mistake, you're probably not cutting enough stuff.

**Camille Fournier** (00:53:45):
You'll have to figure out your own metrics. But I definitely think testing the limits, it's scary though. I'm going to be honest. Doing that is always scary. It brings up like, I forgot to finish the assignment nightmares of school, especially for the overachievers that often end up in these kinds of companies and jobs. Again, you got to do things that scare you or you're never going to grow.

**Lenny Rachitsky** (00:54:14):
Okay, I'm going to go in a whole different direction. You've got a book coming out about platform engineering and platform teams. This is something that I get a lot of questions about. A lot of people are thinking about moving to a platform team or struggling working on a platform team or struggling working with a platform team. So I have a bunch of questions along these lines. The first is I asked a bunch of people that worked with you what to ask you and someone that worked with you shared this quote about his frustration working with platform teams that he's often complaining to you about and he works on customer-facing products. And so, he said platform teams that are often slow.

**Lenny Rachitsky** (00:54:48):
They're often pushing us to compromise on features to adopt their systems. They often get infinite funding even though they don't have to show any ROI. And so, maybe from the perspective of working with a platform team, say you're building something customer-facing, any tips for effectively working with a platform team and building a great relationship there.

**Camille Fournier** (00:55:08):
I'm very sympathetic to anybody who feels that way because part of the reason that I wrote this book, I co-wrote it with a friend, Ian Nolan, is that so many platform teams are guilty of all the things that he's complaining about, that my friend was complaining about, that they don't listen, they're not delivering effectively, they're not explaining their value to the company. And it is infuriating when you're dealing with that. And honestly, I'm very sympathetic. The thing that I would say though is the more you can, first of all, spend the time understanding that the platform team's problems a little bit and trying to collaborate and work with them and be clear about what it is you actually need and how you're willing to work with them, I think the better.

**Camille Fournier** (00:56:01):
I think if you get mad and you just try to avoid them or undermine them or whatever, that may work in the long run, but it's just going to make everything worse in the short run. So I do think that if you've got a platform team that you're frustrated with, some tips, I would put are like, "Look, find the parts of that team that are good because I'm sure there are some," right? Maybe the databases team is awesome. And really make sure you are maintaining a good relationship with that part of the team and you can point to how you are collaborating extremely well with that part of the team. Help give them product feedback.

**Camille Fournier** (00:56:44):
This is annoying but sometimes needs to happen because a lot of companies, I actually think product ... you need to have a product mindset and frankly, you need to have product managers to build good platforms, internal platforms. A lot of companies just don't do this. They don't believe that they should waste head count on product managers for internal teams. So you end up with this platform team that has a lot of smart engineers, but they don't really know what to build. So they're just sort of building whatever they think is right. And so sometimes your job is to product manage them, is to tell them, these are the problems that we have and this is what we need.

**Camille Fournier** (00:57:16):
And the clearer you can be about that, particularly when they don't have a product team, oftentimes, you can kind of lead them from the side in that way. And so I think that's another approach that I would take when you're in that situation. Find the parts of the team that are working and working well with your team and make sure you develop those relationships and try to just get over the anger and frustration and just be clear about what it is that you need and help them understand what they should really be doing and building.

**Lenny Rachitsky** (00:57:48):
That is really interesting advice. So especially, you're saying if they don't have a PM helping, make sure they're guiding things well, is you can help them ... basically help them think through stuff that will benefit them and also, help the stuff that you're trying to get done.

**Camille Fournier** (00:58:03):
Yeah.

**Lenny Rachitsky** (00:58:04):
That's awesome advice. Okay, so what about from the leadership perspective, trying to build an effective platform team, do you have any advice on how to structure these teams and incentivize these teams to help them be successful?

**Camille Fournier** (00:58:17):
First of all, I'm a very strong believer that platform engineering has to involve software engineering. If you don't have any software engineers on your platform team and you only have more operations systems engineers, DevOps, SRE, which I realize there are some SREs that are software engineers, but they tend to not want to write big software. I think you're kind of missing the picture. Platform engineering is not just maintaining cloud infrastructure and doing small scripts or blueprints or enablement projects for other teams, because that doesn't really create a cohesive and coherent platform. It doesn't create products and frankly you need to be ... platforms are products, ultimately.

**Camille Fournier** (00:59:04):
You should be thinking about how do I create coherent offerings that make this company more productive? So you need software engineers. Yes, you need sort of operations systems, SRE specialists as well. And of course, you need product people. I had product teams on ... product managers for all of my platform teams. I've really developed out that practice in the companies that I've worked for doing this because I just believe that you're not going to get great results if you just believe that to engineers and engineering management. They will do their best and you do occasionally find engineers that have really great product instincts in this space, but the actual details.

**Camille Fournier** (00:59:49):
And focus of the product work is just you can't write a bunch of code and/or manage a big software engineering team and be a product manager at the same time. That's actually just asking, I think, too much of people to do that really well, at least for very long. So I think when it comes to structuring a team, recognize this is not just like SRE V2. This is more than that. You want software engineers, you want systems engineers, you want product people. And then, one of the reasons you want product folks is because you want to be thinking about impact-based, outcome-based approaches, not just like, "Well, we built this thing that seemed cool, we adopted this technology from this company because that's what everybody on the internet is talking about."

**Camille Fournier** (01:00:36):
Whether it's VC funded or big company. We actually thought about what are the problems the engineers at my company are facing? How can we improve their productivity or deliver leverage to this business through whatever it is we're building, right? Are we reducing the cycle time for engineering tasks? Are we solving problems that are preventing products from launching and scaling? Are we making really meaningful cost reductions or efficiencies and, in our products or in our platforms? These are some examples of measurable contributions, but I think one of the challenges is that people create these platform teams and think that they can be sort of divorced from having an impact focus because it's like, "Well, you just got to run the infrastructure and make sure it works."

**Camille Fournier** (01:01:29):
And it's like, "No, you actually do still have to do ... if you do that OKR stuff or goal setting," or whatever, you've got to take a lot of the best practices of product. It's a little different in the internal world, but it's still very important if you want to do platforms.

**Lenny Rachitsky** (01:01:45):
On the line of having PMs within the platform teams. Some of the best PMs I've ever worked with where PMs on platform teams, and that just tells me, it's not like where you put PMs that are just meant like that's ... where you could have some of the highest leverage because platform teams enable the rest of the company to move faster.

**Camille Fournier** (01:02:01):
Yeah.

**Lenny Rachitsky** (01:02:02):
And one difference there, I'm curious if you agree, is your ratio of PM to engineer can be a lot higher. You can have a lot more engineers per PM on platform teams.

**Camille Fournier** (01:02:10):
Yeah. Yeah, I think that's right because I think so much of the work in a platform team is not exactly product work. A lot of it is like scaling or really deep kind of technical, like I got to figure out how to actually do this technical thing or I've got to do this performance efficiency and you don't always need a product spec for that, right? It is often just a very engineering heavy task. So yes, I think the ratios do tend to be a bit different.

**Lenny Rachitsky** (01:02:42):
We dove over right into this topic. Maybe it might be helpful to help people understand what is a platform team, just what are examples of teams that would be considered platform teams.

**Camille Fournier** (01:02:51):
I mean, I guess the high level definition that I have of platform engineering is if you are developing and operating platforms that ... where they're trying to manage overall system complexity and deliver leverage to your business. So a lot of the teams that people think about nowadays and when they're talking about platform teams, they're talking a lot about teams that may have formerly been called dev tools. For example, so your CI/CD tooling for the company, a lot of the cloud infrastructure provisioning and tooling. If you're at a company with certain technical problems, you may very well be building semi bespoke storage systems. For example, maybe part of your platform teams. I actually think that there are ... And then, actually web frameworks ... Web mobile framework and support for that.

**Camille Fournier** (01:03:50):
That set of engineering can also be part of a platform offering. I actually kind of believe that there's also sort of what you might call integration platforms or platforms that are in between that infrastructurey developer tooly stuff and products. So billing platforms for example, if you have a single billing platform for all of the different products in your company, that shares a lot of overlaps in the challenges of those more dev tools, infrastructurey platform teams because you're probably supporting lots of different product lines that are using this system that needs to be able to scale with certain efficiencies. You need to still do the product discovery.

**Camille Fournier** (01:04:33):
You probably have a little bit more of a business product focus than the pure internal tools teams, but that gets to the blended area.

**Lenny Rachitsky** (01:04:44):
For founders that are earlier stage or companies that are smaller hearing this and they're like, "Oh, shit do I need a platform team?" So yeah, you're shaking your head, if people aren't watching on YouTube. What's a sign that's time maybe to start creating a platform team and setting aside resources for something like that?

**Camille Fournier** (01:05:00):
So first of all, I think it gets to be like, you have 50 plus engineers. I don't think this is the kind of thing that you start when you are 10 engineers, right? But when you are ... so there's a lot of ad hoc coordination that's probably happening amongst your engineering groups right now, where maybe you just have one ... you have your GitHub and somebody is making sure that all of that stuff is sort of working. You have a few cloud databases and you got a couple of people on each team and they kind of share notes to figure out what's going on or whatever. Okay, it's all good, but at some point, you hit either a lot of inefficiency where you're seeing the same people across a bunch of different teams.

**Camille Fournier** (01:05:54):
Each team has the same kind of people having to solve the same kinds of problems. It just seems like why do I have three people in every team, dealing with this instead of centralizing it and making it a little more efficient. It also could be that you hit some core scaling issue that starts to really need a dedicated team to solve. Again, that could be developer productivity. Every development team is trying to do it their own way and everybody is just super slow because you just can't get code released and it all has to be coordinated across every different team and it's just like, what is going on? We need to fix that or you actually have a technical challenging area that needs a focused team to fix the scaling.

**Camille Fournier** (01:06:36):
Those are some of the signs that you may want to start thinking about a platform team, but it's really like ... generally speaking, I would not jump into it early. This is something for companies that have matured where it's worth investing and making people internally more productive and centralizing certain functions just from a cost and efficiency basis at minimum.

**Lenny Rachitsky** (01:07:02):
Say you're on a platform team, say you're an engineer or even a PM, any advice for how to be successful and thrive within that environment and be a great platform team.

**Camille Fournier** (01:07:11):
If you want to do platforms. If you're an engineer, certainly if you're an engineer or an engineering manager, you've got to remember that half of the work is actually the operational quality, operational excellence of these things. Platform engineering is not just writing code and then throwing it over the walls to someone. Being interested and passionate about the operational challenges and scaling bits of systems I do think is fairly important, if you want to be a great platform engineer from a software engineer perspective, if you're more like a product manager, "Look, you've got to really care about ..." I think you got to be really both interested in working with really smart engineers who are going to know way more than you do about things.

**Camille Fournier** (01:08:06):
And almost being a really good, not necessarily zero to one but past one person because actually a lot of the best platform type offerings in companies start in individual application teams. An application team has a problem and they solve it for themselves and it turns out that that's actually a really good idea for how to solve that problem. So a good platform team is often looking around for those and then sort of taking them and then assimilating them and making them available to more and more people. And so, I think if you want to be in that kind of zero to one building the brand new stuff all the time, you may not be as happy in a platform team.

**Camille Fournier** (01:08:45):
But if you're really interested a little bit more of taking things over, stabilizing, scaling them, making them efficient, making them evolve as a company evolves, I think you'll be happier in that circumstance.

**Lenny Rachitsky** (01:09:01):
Awesome. Is there anything else along these lines before we wrap up and yet a very exciting lightning round that you think might be helpful for folks working with platform teams or working on a platform team, building platform teams?

**Camille Fournier** (01:09:14):
I think there are two things that we haven't touched on or maybe three that are really hard about platform teams and that I think don't get much press, which is running platform projects is a little bit different than running agile projects. You can take a lot of the best practices you may have learned from agile type product delivery, but you are running longer, running larger scale, more complex builds because a lot of the stuff that you build at the platform level just takes longer. It's a little bit more complicated. So you've got to be willing to get into that kind of stuff, especially if you're in a management job in that space.

**Camille Fournier** (01:09:55):
You are going to deal with a lot of migrations as well. So it is very annoying. Migrations happen, even if you don't force them on people, your a cloud provider is going to say, oh, you've got to migrate from EKS view 19 to 121 or whatever, and that may require changes in code and then that's a real pain in the butt for all of the application teams. So people who are interested in how to smooth over the customer and company impact of this underlying change, I think we'll be very happy in platform teams. If you're not interested in that, you may not enjoy the work as much. There's just a lot of detail oriented work and platforms. And then of course, the final part is the stakeholders are a nightmare. My friend who wrote the question about how his product or his platform partners drive him crazy. I have no doubt he drives them crazies.

**Camille Fournier** (01:10:55):
Because you've got all of these stakeholders, your peers and tech, maybe product managers, maybe executives that are like, what is this team? Are they really worth the money? Why are we spending so much on it? I don't understand what they're doing. I could do it better in some cases. So there's actually a big part of the job, particularly as either product managers or engineering leadership is stakeholder management and really learning how to do that well. And that is not always, that's probably I think universally agreed to be the least fun part of the job. I don't think anybody loves it, but it is certainly a skill set. I'm glad that I have. And so, I think if you are thinking about building one of these teams.

**Camille Fournier** (01:11:40):
And you're like, I can just do the fun tech stuff or the cool product stuff, I'm really passionate about engineering productivity or I'm really passionate about state scale storage systems and I don't want to think about any of the other stuff. You may not actually be happy in the long run in leadership positions. It may be fine as an individual contributor, but for leaders in particular, there's a lot more to it than the fun tech problems, the fun operations problems, even the product.

**Lenny Rachitsky** (01:12:07):
You said there's a few things we haven't touched on. Is there anything else?

**Camille Fournier** (01:12:13):
That's the fastest and anybody who's interested, my book will be coming out in the next couple of months from O'Reilly and covers all of this depth.

**Lenny Rachitsky** (01:12:22):
Yeah, is there a date specifically people should watch out for?

**Camille Fournier** (01:12:25):
I think it's actually pre-order on Amazon now. It's called Platform Engineering, and then, there's ... I think it's like a guide for technical product and people leaders, something like that. But I think the release ... I don't know exactly when the Kindle release will be, but we're still in copy edits, but it should be done pretty soon.

**Lenny Rachitsky** (01:12:42):
Okay, amazing. So you can pre-order it now. Rolling to it obviously in the show notes and description, it's called Platform Engineering. Before we get to a very exciting lightning round, I want to take us to a recurring segment on this podcast that I call AI Corner. AI is very top of mind for a lot of people and I'm always curious how people are finding it valuable in their work or in their life. So the question is there anything you've found AI to be helpful with ... in your AI work? Any way you use it in an interesting way?

**Camille Fournier** (01:13:11):
I find it helpful, for example, if I've written a sentence and I'm like, I like this sentence, but I feel like, I don't like the phrasing or the format that I've used, it needs to be edited, but I can't quite figure out how. I will often put it into ChatGPT and be like, "Can you reframe this? Can you rephrase this for me?" It doesn't always work well, but sometimes it does. It's like, "Oh yeah, if I just switched this around or changed this word choice, it's a much easier to read sentence." I do think it's ... I think it's just before that and small. I think it's large, lots of texts I haven't had as much luck with. I'm a little bit of an AI novice still, I would say.

**Camille Fournier** (01:13:52):
What I will say is that AI is really bad, if you try to ask it for quotes or at least ChatGPT is. I haven't used a lot of the other ones that much. I actually saw there was some Twitter or some social media thing that's like, did Francis Ford Coppola get fake reviews from ChatGPT of the new, what is it, Agopolus.

**Lenny Rachitsky** (01:14:14):
Yeah.

**Camille Fournier** (01:14:14):
Agopolus maybe.

**Lenny Rachitsky** (01:14:14):
Yeah.

**Camille Fournier** (01:14:16):
And I was like, I actually had that scenario where I was like, I need a quote ... I was looking for quotes for the book and I was like, maybe ChatGPT knows, but I was like, "Can you give me any good quotes on ..." I forget what it was. Let's just say it was on managing complexity or something like that, and it gave me these really interesting quotes. I was like, that's great, but I better double check that. And they were not real. They were never real, not a single quote. And I'd be like, that's not actually a real quote. Yes, you're right. That's not, so here's a different one.

**Camille Fournier** (01:14:45):
I was like, that's still not a real quote, so don't ask it for quotes because ... or if you do, make sure it's a real quote and not just an interestingly phrased ... I mean good summarization in some ways of the text, it was sort of quoting from, just not an actual quote.

**Lenny Rachitsky** (01:15:06):
That's a good reminder of just generally don't assume what it's telling is true. Generally, it's not giving you real things. It's making things up and usually they're right, but often they might not be right. That's a really good reminder. On that first tactic, is there a prompt that you find helpful for how to actually feed it in there? Is it just here's a line, help me come up with a better version of it?

**Camille Fournier** (01:15:26):
No, I have not figured out the prompt engineering thing at all. I tried to get it to summarize a paper for me the other day, and it literally gave me the summary of a different paper, and then I asked friends and they were like, "Well, here's a summary." I was like, "Actually, that seems like a good summary." And they're like, "Well, first I told the AI that it was an expert in the field and that it needed to read carefully and that it was really smart," and I'm just like, how do I have to manage the machine? I already have to manage all of these humans? Why are you making me manage machines now too, please?

**Lenny Rachitsky** (01:16:00):
I thought this was going to solve all of our problems. Yeah, that role. There's an acronym for how to approach engineering, and there's always like give it the role. Here's the role you're going to play for me. You are an amazing writer and here's what I want from you. Yeah. I'm also very bad at it. By the way, Claude I here is really good at writing. That's one of its superpowers, so if you want to try writing, that's worth trying. Claude by Anthropic. On the second point you made of fake quote. So, yeah, Francis Ford Coppola is coming out with this movie with ... As you mentioned, this trailer is just full of all these quotes that people supposedly said about all his other movies that Godfather and stuff. And they're all like, these are terrible ... They're all terribly mean quotes about his movies.

**Lenny Rachitsky** (01:16:41):
It turns out, yeah, they're all not real quotes, and they actually took down the trailer, I just read because he's just making up quotes by famous critics.

**Camille Fournier** (01:16:49):
Well, so maybe-

**Lenny Rachitsky** (01:16:50):
Maybe it was ChatGPT.

**Camille Fournier** (01:16:54):
You can get fooled. I don't know if it was ChatGPT or a cheeky intern or something, but we can get-

**Lenny Rachitsky** (01:16:58):
Or very intentional marketing stint.

**Camille Fournier** (01:17:04):
Or that.

**Lenny Rachitsky** (01:17:04):
Yeah. Anyway, with that Camille, we have reached our very exciting lightning round. Are you ready?

**Camille Fournier** (01:17:08):
Yes.

**Lenny Rachitsky** (01:17:09):
Amazing. Okay. First question, what are two or three books that you've recommended most to other people?

**Camille Fournier** (01:17:15):
So the first one is, What Got You Here Won't Get You There. I love it. I think anybody who is trying to challenge themselves and grow, should read it, it's fantastic. The second one is called When Things Fall Apart by Pema Chodron. That is when you are ... For me anyway, when I am struggling with whatever circumstances around me, I find it a very soothing or reminder that life is hard and the best way to ... you just sort of have to breathe with it and be with it and let it remind you of how life is hard for everyone and sort of make you a kinder person in the process.

**Lenny Rachitsky** (01:18:04):
Is there a favorite recent movie or TV show you've really enjoyed?

**Camille Fournier** (01:18:08):
I loved Alien Romulus. It was great. If you like a scary alien movie, fantastic.

**Lenny Rachitsky** (01:18:15):
I hate scary movies, so that's a new Alien movie. Okay.

**Camille Fournier** (01:18:18):
Yeah.

**Lenny Rachitsky** (01:18:18):
Anyone know there was a new Alien movie.

**Camille Fournier** (01:18:19):
I loved it.

**Lenny Rachitsky** (01:18:21):
Awesome. Is there a favorite product you've recently discovered that you really love, whether it's an app or even physical product?

**Camille Fournier** (01:18:27):
So I don't know about recent, I'm a big Whoop fan. I got it during the pandemic and it is one of my ... I'm just a weird fan girl for it. I don't know. I just really ... I enjoy it. I use it every day. Maybe it's totally inaccurate, but it seems accurate enough and I just find it a very interesting and cool product.

**Lenny Rachitsky** (01:18:48):
I know Whoop product, people listen to this podcast, so I think they'll be happy to hear that. Two more questions. Do you have a favorite life motto that you often come back to, share with friends or family, find useful and work around life?

**Camille Fournier** (01:18:59):
If you don't challenge yourself, if you don't take risks, you'll never grow. That's a big one. I think you've got to ... challenging yourself, taking risks is how you grow. I think the other one for me is stay curious. The more you can remember that there's more that you don't know than that you do know, and staying open-minded and being willing to be wrong, I think the happier you'll be and the better you'll be as a leader for sure.

**Lenny Rachitsky** (01:19:29):
Final question, on the topic of working out, you're blocking it with your head generally during the podcast, when we moved ... Behind you is a very significant looking barbell set or dumbbell set, I don't know which one is which. Talk about your workout regimen or anything along the lines of how you work out.

**Camille Fournier** (01:19:48):
I have been lifting rates probably for longer than some of your podcast listeners have been alive, which says more about my age than anything else. So I used be ... I now have two kids, so I lift weights as sort of maintenance, but I used to be a very ... I could deadlift than twice my body weight and I was just a very, very strong person. Now of course, everybody is into weightlifting, which makes the gym really annoying. So partly why I have a set in here, a small set with a baby sized bar is ... so when I can't make it to the gym, I can at least lift a little bit at home.

**Lenny Rachitsky** (01:20:27):
What's your favorite workout, lifting wise?

**Camille Fournier** (01:20:29):
I love really basic deadlift, squat, overhead press, that kind of very simple, the classic lifts.

**Lenny Rachitsky** (01:20:39):
Amazing. Camille, this is awesome. As everything, I was hoping it'd be, we covered so much stuff. Two final questions. Where can folks find you online if they want to reach out, follow up on stuff and check out your books and how can listeners be useful to you?

**Camille Fournier** (01:20:51):
Yes, so with the weird state of social media now, that's actually a harder question to answer than it normally is. I am on LinkedIn, so you can always follow me on LinkedIn and I'll probably ... I haven't traditionally put that much there, but I'm expecting I'll probably start putting more there in the coming months. I also still use Medium when I write. I actually like Medium, so medium.com, scamille is my username. Those are two good ways. I have a Twitter/X account that it is currently locked, and I may or may not unlock it at some point, but social media, as I said, has gotten weird. So I think probably LinkedIn is the easiest way for this kind of stuff.

**Lenny Rachitsky** (01:21:33):
And I read somewhere that scamille is rooted in your love of ska music back when you were younger. Is that right?

**Camille Fournier** (01:21:39):
It's true, yes. It was from high school. I was a big ska fan.

**Lenny Rachitsky** (01:21:43):
It's funny how our usernames just stick from, we were really young and that's the way we're represented online now forever.

**Camille Fournier** (01:21:49):
Yeah.

**Lenny Rachitsky** (01:21:50):
That's absurd. And then, you didn't answer my final question, which is how can listeners be useful to you?

**Camille Fournier** (01:21:55):
I have a new book coming out. I have another book that I've already written. Obviously, I love it when people buy my books so I love when people share my books with other people. My first book is translated into a bunch of languages, which is super exciting, and I hope that if you read it and enjoy it and learn something from it, you will let me know. Tag me on some social media. I think that's just awesome and stay tuned. Look, if you are looking for people potentially to come talk to your company about platform engineering, I could be interested in that, but I always love to meet interesting people. If you're in New York, reach out, who knows. This has been an amazing, amazing time getting to chat with you, Lenny. Thank you so much for inviting me on the show.

**Lenny Rachitsky** (01:22:42):
I feel the same way. Thank you for agreeing to come on the show, Camille, you're awesome. Thank you so much for being here.

**Camille Fournier** (01:22:48):
Take care.

**Lenny Rachitsky** (01:22:49):
Bye everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [14/16] Rethinking SEO in the age of AI | Eli Schwartz (SEO advisor, author)

**Lenny Rachitsky** (00:00:00):
You've noticed a significant shift in how SEO works with the rise of AI answers being integrated into search results.

**Eli Schwartz** (00:00:06):
Transparently, I thought this was going to be an apocalypse. Up until AI Overviews, whoever won on that long form piece of content would get that first click. But now that doesn't exist anymore.

**Lenny Rachitsky** (00:00:15):
What should people do to be successful in this new paradigm?

**Eli Schwartz** (00:00:19):
Think of SEO as a product. The product managers are the people that should be thinking about this SEO question because it's a product question. Product people need to think about how do we position this to the user that is not going to find out about this from a social channel, that's not going to be attracted by an ad? This is a user that's doing their own self-discovery journey. If you can't answer the question about what is it that someone's going to do a search on, then don't do SEO.

**Lenny Rachitsky** (00:00:44):
To a lot of people, SEO is kind of this dark art.

**Eli Schwartz** (00:00:45):
It is not a dark art. It is simple. I think step one is the step that almost everyone misses on SEO, which is.

**Lenny Rachitsky** (00:00:57):
Today my guest is Eli Schwartz. Eli is a growth advisor specializing in SEO and has helped companies like Quora, Coinbase, Tinder, LinkedIn, WordPress, and Zapier develop and execute their SEO strategies. He's also the author of Product-Led SEO and has a very refreshing take on how to think about SEO and win at SEO. Recently, he's been spending a lot of his time analyzing how SEO changes with the rise of LLM chatbots, Google giving you the answers straight in the search results, and also how to utilize AI in your SEO strategy.

**Lenny Rachitsky** (00:01:31):
In this episode, we dive deep into everything that you need to know to be successful in this new AI paradigm. As Eli shares in the conversation, Google is just now rolling out changes to how search works and is greatly increasing how many searches include an AI-generated answer at the top of the search results. So things are going to start shifting under our feed pretty quickly. If you're at all thinking about SEO, working on SEO, or are just curious about how search is evolving, this episode is for you.

**Eli Schwartz** (00:02:16):
It's a real honor to be here. You've had some amazing guests, and I'm honored to be counted as one of them.

**Lenny Rachitsky** (00:02:21):
It's completely my honor. You've been working on SEO for a long time. You've been helping companies figure out how to win at SEO for a long time, over a decade. And we were chatting about what's happening in SEO, and you told me that you've noticed a significant shift in how SEO works with the rise of LLMs, with the rise of AI answers being integrated into search results.

**Lenny Rachitsky** (00:02:43):
And so I thought it'd be awesome just to spend an entire episode talking about what people need to know about what's changing in SEO and how to be successful in this new paradigm of SEO with LLMs and AI being prevalent. How does that sound to you?

**Eli Schwartz** (00:02:57):
That's an awesome idea. I really like what's happening with AI in general for SEO because it's causing everyone that cares about SEO traffic, whether that's a PM or that's a CMO or that's a CEO, to really be forced into pivoting their thinking about what SEO traffic means because the tactics around SEO haven't really changed. It's always been the exact same thing.

**Eli Schwartz** (00:03:23):
My last full-time job was out at SurveyMonkey, and I was moonlighting on the side. And I was introduced to a CEO of a big company and they were asking me about my approach to SEO. And I wanted to close it. I wanted to get this consulting engagement. And the CEO says to me, "So essentially what you're telling me is I need to find my keywords, put that into content, and then build some links. Is there anything else you're going to do for me? Why should I pay you?"

**Eli Schwartz** (00:03:47):
And it stunned me into silence because essentially that is and was SEO, and then that forced me to really pivot my thinking around what SEO might be. And I pivoted my thinking and I've worked with many companies around how they should think about SEO and what SEO traffic should mean, but others have not because those tactics did work. And LLMs and AI in general is forcing people to think again, how should SEO work? How should I be driving business from the search channel?

**Lenny Rachitsky** (00:04:22):
**Eli Schwartz** (00:06:52):
So essentially Google and other tech companies had their hand forced by OpenAI and ChatGPT. Google claims to have invented the concept of LLMs and they may or may not have, and some of the early OpenAI employees were Google employees. But ChatGPT came on the scene at the end of 2022 with this ability to ask any question and then get a written out answer. And suddenly people are like, well, I don't need a Google and click all these results.

**Eli Schwartz** (00:07:19):
So there started this conversation of you don't need Google anymore. Google is ending. Even more than that, you don't need SEO. You don't need to optimize anything because the entire world will just be given to you. We'll dig into that. I don't think that's at all correct, and I don't think anyone, whether you're doing SEO as your full-time job or whether you're receiving SEO traffic as a part of one of your primary marketing channels, I don't think anybody has to worry about that.

**Eli Schwartz** (00:07:47):
However, Google was worried about it, and I think one of Google's primary stakeholders is really Wall Street. So if Wall Street suddenly thinks that Google is a has-been company and they're not interesting anymore and they don't want to maintain investments in them, their stock price goes down. And that hurts Google's ability to recruit employees. It hurts Google's ability to raise money and invest in all the interesting stuff they do.

**Eli Schwartz** (00:08:11):
So Google has to satisfy the curiosity and the interests of the general world and general investor by saying, "Oh, that OpenAI thing, we can do it too. That's not that big of a deal." So then Google responded, badly, of course, first, by launching what was then Bard. So they said, "ChatGPT, look, we've got our own version," and they did a public demo. It didn't work out well at all and their stock price actually went down.

**Eli Schwartz** (00:08:37):
And then they fixed it and then their stock price went up. But they also had to have an answer to this concept of, is search dying? Does anyone need to search anymore when the entire world can just be given to you? So they launched what at the time they called SGE, Search Generative Experience, which is essentially ChatGPT in a search result. So they launched that, but they launched it as a beta.

**Eli Schwartz** (00:09:01):
And there were huge issues with what they were doing there because there's monetization issues. Everything they do comes from ads. The majority of their revenue comes from ads. So if you're going to show this AI answer on a search result, then you also can't have ads. You need to go all in on one of them. That was one issue which they actually have not solved yet. Another issue they had was liability.

**Eli Schwartz** (00:09:26):
So if they have a generative response that tells you to do something awful, like I think there was one where it may or may not have been fake, a lot of people made some fake ones, that told you to jump off the Golden Gate Bridge. Are there liability concerns? Because Google now is the publisher. They're not a search engine that told you how to find out the answer to that.

**Eli Schwartz** (00:09:43):
They told you to do it themselves. And the third issue there, which is another liability concern, is it plagiarism? So those are the things that they worried about. So they took about a year to test this thing, which was fascinating because we're tech people and most of the listeners are tech people. Google is very much a launch fast kind of company. They reveal something and then it sort of rolls out very, very quickly.

**Eli Schwartz** (00:10:07):
They're not the kind of company that says we're going to launch something and then they take a year to do it. So AI Overviews, what was then called Search Generative Experience, launched at Google I/O this past year, in May of this past year, and they renamed it to AI Overviews. And it's that. It's essentially ChatGPT in a search assault. They launched it to great fanfare.

**Eli Schwartz** (00:10:27):
Of course, it was live right away. They said it was only going to be logged in users only in the US. Obviously they always have concerns about launching things in Europe, because Europe's a little bit more litigious than the US. And once they launched it, suddenly they started getting these screenshots of Google told me to jump off the Golden Gate Bridge, Google told me to put glue on my pizza, which, of course, Google didn't do that.

**Eli Schwartz** (00:10:50):
They just crawled things from around the web. I'm surprised that Google didn't predict that because the exact same thing happened with ChatGPT and Google is much bigger and a much more interesting target for people that want to share those things in social media. So Google launches it, and that was a little bit embarrassing, so they rolled it back somewhat.

**Eli Schwartz** (00:11:07):
But what's even more interesting is they've given up on this rollback. Or not given up, they've gone back into it and they've relaunched it, and now it's on so many more search results. I'm seeing it on most of the search results that I see. And on top of that, non-logged in users are seeing it, so in incognito users or users without any history with Google are seeing it, and they've just launched it in the UK. So this thing is coming and it's really going to be affecting search results.

**Lenny Rachitsky** (00:11:34):
To maybe help people understand why this may impact SEO, if it's not obvious, is it pushes results down. People get the answer right there. They don't have to click your links. And then there's also the sponsored links at the top of the page that already are pushing you down. So basically your stuff is harder and harder to find, right?

**Eli Schwartz** (00:11:54):
Actually, it's not that it's harder to find, your stuff becomes less relevant. And that's the part about SEO that I'm excited about. So SEO was exactly like that CEO said to me years ago, it's just about creating some content. And then it's just this race to the top of getting your ranking results on that top keyword. So years ago, I worked at a startup where we were in the automotive space and we wrote content about cars.

**Eli Schwartz** (00:12:19):
And a word we liked to rank on was cars. The homepage was ranked for the word cars. We bought tons of links, and we were just a cars website. Obviously that's not something anybody could expect to do now because you don't search like that. You don't search, "Oh, I need to buy a vehicle. I'm going to use the word cars and see what comes up," because cars means a lot of things. Cars is a movie. Cars is a kind of car you drive. Cars could be a go-kart. It could be a lot of things.

**Eli Schwartz** (00:12:46):
So no one's going to think about those search results. However, SEO is still geared towards those top of funnel, those big keywords that people cared the most about. So now a lot of those keywords are going to be moving into these AI Overviews. I don't want to just focus on Google, although I think Google's going to own the entire search page forever, at least for a very long time.

**Eli Schwartz** (00:13:07):
But other engines, whether it's Perplexity or whether it's Claude or whether it's Meta, they all have this opportunity to give AI Overview type responses. That I think, those top of funnel kind of queries, are a great fit for what's going to come out as an answer. So if you're looking to go on vacation and you want a beach vacation, you can ask a very explicit question about give me a beach vacation that is not in America, but is a two-hour flight from X airport.

**Eli Schwartz** (00:13:34):
That's the kind of thing that you could do in a Google search, but would take you a very long time to do. And those are great answers from just getting a paragraph. And then from there, you move into the mid-funnel. So now you do this query and Google suggests to you that you should go to Cancun. Or sorry, not Google, but whatever that answer is suggests to you that you should go to Cancun. And now you're in the mid-funnel and that's where SEO begins to matter.

**Eli Schwartz** (00:13:59):
So the reason why I think this disruption is so big is because the journey changes, the discovery changes. So whereas before if you were a travel site and you were able to rank on best beach vacation within two hours of the United States, that's your ranking result. And then you have your long piece of content and you have your ads and you can monetize that.

**Eli Schwartz** (00:14:21):
That all changes when you can still rank number one on that, but you're all the way at the bottom of the page. The AI answer, whoever that's from, whether it's again from ChatGPT or Google, tells you where to now start doing your deeper search.

**Lenny Rachitsky** (00:14:35):
So just to maybe mirror back what you're saying is the discovery step of search is going to be swallowed up by LLMs that give you direction. And then once you have a sense of what you want, then you go back to Google and that's where potentially the opportunity continues to remain.

**Eli Schwartz** (00:14:55):
Absolutely, and I think that's where things are good. That's where I'm excited by the user experience for search, because I don't think the user was best served by, I don't know, U.S. News or Forbes writing out where the best beach vacations are within two hours of the United States, with that piece of content that was written by a freelancer who's not a travel expert.

**Eli Schwartz** (00:15:17):
So now you're going to get that information also from not a travel expert. You're going to get an AI summarized answer, and that will give you more clues and more ideas to do a deeper research search. I think that's where the user's best served.

**Lenny Rachitsky** (00:15:31):
Okay, this is fascinating. Let's definitely spend more time there so people understand exactly what that means. Before we get into that and what people should do to win here, what impact have you seen on SEO and search results and the space of SEO as these things have rolled out? Have you seen numbers of like, this is declining, this is growing?

**Eli Schwartz** (00:15:51):
Transparently, I thought this was going to be an apocalypse. So I shared about a year ago that it's going to be an apocalypse. We have not seen it yet, and a lot of people are declaring victory that there's no apocalypse because we have not seen it yet. However, this thing just launched in a way that I think it will start impacting traffic.

**Eli Schwartz** (00:16:07):
So prior to the last couple weeks, it was not available on logged out search. It was only on logged in search. And even more than that, on that logged in search, Google had rolled it back significantly because of those embarrassing things that happened in May and June when they first launched it. They're only just now launching it broader. And I do think we're going to see impacts.

**Eli Schwartz** (00:16:27):
Of course, another challenge with pinpointing and impacts is they're rolling algorithm updates that are happening, which we'll also talk about, and that will mask what's happening. Because if you've been hit by an algo update and suddenly you recover from the algo update, you'll see more traffic, but you might have seen more traffic but on a lower base because these AI Overviews are changing things.

**Eli Schwartz** (00:16:48):
So I think if you take all those steps back and you look at this from a journey perspective, there's no way that it won't be impacting search. It's just going to be hard to find. And there'll be certain examples where it is extremely prevalent, and there'll be others where it won't impact things at all. And I think the riding line is the journey. We're in the funnel that user is.

**Eli Schwartz** (00:17:09):
So if you are WebMD and you're writing content about the human body, just generic content that has existed since medical journals were created, AI Overviews are going to be fantastic at giving you that answer. You have a headache and you're just like, "Well, this headache's not going away. Should I take more Advil or should I take a nap?"

**Eli Schwartz** (00:17:29):
And then you find that WebMD article and you get to page six and it tells you that 0.2% of people that have a headache actually have a brain tumor, and you don't need that anymore because Google can tell you you're good, you should take a nap and drink some more water.

**Eli Schwartz** (00:17:43):
WebMD was competing with Healthline and other, Cleveland Clinic and Dallas Clinic and all these other hospitals, and it's totally unnecessary to go and look at all these results and go through six pages of information about headaches. So a site like that will be impacted by AI Overviews. An e-commerce site, maybe not. It depends where in the funnel that user is.

**Lenny Rachitsky** (00:18:07):
As you're talking, I was reminded of something that I forgot about with my own experience. I used to have a website called whenishanukkahthisyear.com, because it changes every year and it's just the date. That was the whole website. It gives you the date of Hanukkah this year. And I put ads on there and made 10 bucks a year, and then Google came in and just gave you freaking answers right inside the search result. So I've experienced this.

**Eli Schwartz** (00:18:30):
So it's even more than that. So what you are referencing is structured data. So that's a very easy thing for Google to tell you when is Hanukkah in 150 years from now? It's in a data set. What's happening now is Google's taking this unstructured data from content and building it into structured data. So you could ask a question of what is the likelihood of a baby needing to go to the hospital because they're showing this sort of symptom.

**Eli Schwartz** (00:18:57):
And again, instead of reading all that content and making a decision, Google could take all that unstructured data, not just Google, again, ChatGPT or Claude can take all that unstructured data, and give you a statistic based on everything they've read. And that's very helpful to users. And I think, again, users benefit.

**Eli Schwartz** (00:19:14):
And then a user might find out there's another piece of information where I'd actually like to read a medical paper, or that now I'd like to Google and find the closest doctor to me who has certain hours. That's a Google search. That's not an LLM AI search.

**Lenny Rachitsky** (00:19:26):
And just to clarify, I didn't intend to say that that was AI oriented. That happened a decade ago. So yeah, I totally, totally agree.

**Eli Schwartz** (00:19:36):
Well, I just thought that was interesting to really drill into the difference between structured and unstructured, because unstructured is actually where Google is disrupting everything. So this entire idea of SEO, again, up until 2022 was monetize unstructured data. Whoever wrote the longest piece of content on best beach hotels in Miami and then built the best links to it, they would win.

**Eli Schwartz** (00:19:59):
They win whether it's ads or win whether it's hotel bookings. Now, Google can start you off at the top of that and say, "These are the best beach hotels based on all the people that have written content," or actually Google's own unstructured data from the reviews and give you that. And then you can say, "Okay, I'd like to go to this hotel, or I'd like to stay in this city."

**Lenny Rachitsky** (00:20:19):
So help us understand even deeper this distinction between top of funnel and mid-funnel. So when people are maybe winning at one or the other, what does that look like? What are some examples of like, here's a top of funnel type of search that Google's going to eat and here's a mid-funnel experience that you can win that?

**Eli Schwartz** (00:20:35):
So in general, SEO has always been more at the top of the funnel generally, because you're curious about something. So let's say you're looking for a new software. You're looking for new podcasting software. So you search for top podcast tools, and you get back a list on let's say G2. G2 and all the sites like G2, like the Gartner sites like Capterra, all going to be massively disrupted. So you would get back a list from G2, which would give you out all the software.

**Eli Schwartz** (00:21:05):
And you would look at some and it would say, "This one's geared towards enterprise. This one's geared towards small podcasters. This one's free," and then now you've narrowed down your list to these three tools. And that's when you start doing those searches. Now you're mid-funnel. Now let's say you've chosen Riverside and you've gotten enough information from those other searches. Now you start searching Riverside price, Riverside capacity, Riverside bandwidth.

**Eli Schwartz** (00:21:29):
That's bottom of funnel, and that's where you'll now go buy Riverside. However, at the top, you were doing top podcast tools. So again, up until AI Overviews, up until this entire concept of LLM, whoever won on that long form piece of content would get that first click. But now that doesn't exist anymore. You just go to Google and Google tells you, "These are the tools. Oh, you're looking for a new CRM? This is what a CRM is. You want to know, do you need a CRM or do you just need a calendar?"

**Eli Schwartz** (00:21:59):
Look at that and Google will just tell you in a paragraph, and now you've redirected your search somewhere else into middle of the funnel. So I think that's where SEO always should have been because that's where conversions could potentially happen. However, SEO never was there before because the way most SEO measures its performance and its success is rankings. So they would say, "Well, it doesn't really matter if we convert on the word CRM. But look, we're number one, so we're winning."

**Lenny Rachitsky** (00:22:24):
First of all, as a user, this sounds great. I'm so tired of just all search results just being a bunch of SEO pages, just with a bunch of BS answers. And so I really prefer, Google, just tell me. Just tell me what I need to know. The other piece is if you really think about what Google has been trying to do, they've been trying to do this is like, here's our best shot at giving you an answer to this question, and here's links that'll point you to an answer.

**Lenny Rachitsky** (00:22:47):
And this is just a better version of it where it takes all the actual information and just gives you the end result. So it makes a ton of sense that they're doing this and the technology has finally allowed them to do this. Okay, so let's get to the, I don't know, $64,000 question, million dollar question, what should people do? What should people do to be successful in this new paradigm that as you're describing is in motion?

**Lenny Rachitsky** (00:23:09):
It's just starting to now happen. And it may be catching people off guard because they've thought it's already been out and things are okay, and you're saying it's actually starting to actually move quicker.

**Eli Schwartz** (00:23:20):
I think it's fascinating, I'm honored to be one of the few marketers on your product hard test, but I think of SEO as a product. And I think the product managers are the people that should be thinking about this SEO question because it's a product question. There are users that are coming in from the search channel. What is the product that I need to create for them?

**Eli Schwartz** (00:23:42):
What is the experience that I need to create for them? So typically, it was thought of as a marketing challenge of the product people have created this thing for me, and now I expect the marketers to go and do the SEO thing for it. But there's a mismatch. So for example, I find very often when I talk to SaaS companies, I don't think SaaS in general should do SEO.

**Eli Schwartz** (00:24:04):
But very often when I talk to SaaS companies, they have created a product for whatever user, and then the marketers are expected to make that product fit into the thing that the search results are around. And it doesn't work because that's not what they're looking for. No one asked the question of what it is that they're looking for. So now that SEO is changing and you really need to think about this mid-funnel and you need to think about a user experience and a buyer experience when they're doing the search, I think it all comes together.

**Eli Schwartz** (00:24:35):
And this is where the product people now need to think about how do we position this to the user that is not going to find out about this from a social channel, the user that's not going to be attracted by an ad, the user that's not going to discover this tool from a trade show. This is a user that's doing their own self-discovery journey, and this is what is the thing they're looking for and how do we position this product in a way that they're going to find it.

**Eli Schwartz** (00:25:00):
So that's what everyone should be doing, product really collaborating with marketing and discovering what is it that the user wants and showcasing that. I was recently talking to a company in the health space. They have an app. It's a health app. And we talked about their marketing. Their SEO in general was they write thousands and thousands of blog posts. AI has allowed them to do things they should never have done.

**Eli Schwartz** (00:25:25):
They wrote thousands of blog posts about health in general. I told them they shouldn't do that in general, but they wanted me to experience their product. So they gave me a code to download their app, and their app is awful. It's a bad product. So they're trying to do marketing that doesn't fit for a product that doesn't do the thing they say it's going to do. If they fix the product and understand the user, now it becomes, well, if I'm a user looking for this product, what are they looking for? How do we showcase that, again, in the mid-funnel?

**Lenny Rachitsky** (00:25:57):
Can you help us make this even more real? Maybe go through an example of a product you worked on or one that's doing this really well in terms of going from, hey, they want our product. What's the journey look like? What's a good example of that?

**Eli Schwartz** (00:26:10):
So the earliest example of where I discovered on this process was about 10 years ago, I met the CEO of Zapier, Wade Foster, and he was a co-worker of mine. I had invested in this company, and he asked me to meet with him to just discuss SEO. They were doing something that no one needed. They had this product which zapped things together, but no one needed it because they didn't know it existed. But people knew that they needed things to work together.

**Eli Schwartz** (00:26:38):
They just weren't looking for Zapier. So in my discussions with them, in our SEO experiments that we came up with, we said, well, people are looking for let's say Gmail and they're looking for Salesforce. They know that Gmail doesn't connect to Salesforce, they know Salesforce doesn't connect to Gmail, but they're looking for ways to pair it together.

**Eli Schwartz** (00:26:56):
So what if we created as a product a marketing way to showcase that this product of zapping Gmail to Salesforce and Salesforce to Gmail exists? And that's what we did. So we built that at scale for everything that could work, and that was the experiment that I did with them, where everything would be available and it creates this flywheel of, wow, if Gmail can work with Salesforce, what else does Gmail work with?

**Eli Schwartz** (00:27:21):
Can it work with this other tool I have? And that's a, again, early example where I stumbled upon this idea of people are looking for that other thing that you could do, showcase the fact that your product could do this thing.

**Lenny Rachitsky** (00:27:33):
I had no idea that you were involved in Zapier's SEO work. That's one of the most legendary successes of SEO. Very cool.

**Eli Schwartz** (00:27:40):
Total accidental. Whenever people ask me about programmatic SEO, and I know we have to dig into that, what programmatic SEO is, they're like, I want to imitate Zapier. It's always great to mention that I helped through that.

**Lenny Rachitsky** (00:27:53):
That's amazing. Okay, so the lesson there is you realized that the key, the opportunity is to teach people what they could accomplish with this product. There's this awesome product doing amazing things. They have a need they're searching for, say it's like Gmail and Salesforce, and how do we help them see there's something really interesting here.

**Eli Schwartz** (00:28:12):
Yeah. I actually have a better one for you.

**Lenny Rachitsky** (00:28:14):
Great. Let's do it.

**Eli Schwartz** (00:28:17):
So I worked with Tinder for a couple years. One of the biggest challenges I ever had with SEO, especially as a consultant, is getting things done. And I worked with amazing companies and there's great people, but then they run into this wall. In my book, I talk about one of the earlier stories I had of this where I worked at a company where I was hired by the CMO and we built out a great plan.

**Eli Schwartz** (00:28:41):
And then we go to the CEO who brings in the CTO to discuss our plan, and the CTO says, "I don't have engineers for this. So you decide whether you want to work on the product or you want to work on this marketing thing you've done." And then we didn't do anything because they never resourced it. But I worked with this really great product person at Tinder, Udi Milo. He was the chief of growth.

**Eli Schwartz** (00:29:00):
At Tinder, Udi Milo, he was the chief of growth, and he really saw a problem where Tinder had never done SEO. All of Tinder's inbound came from the word Tinder, and he is like, "There has to be upside for SEO if they've never done it before." So that... he was convinced of that. He was willing to drive forward on this idea. So when we started working together, the first thing we came up with is what is someone going to be searching when they look for Tinder? And it's not online dating. That's a single word.

**Eli Schwartz** (00:29:31):
We're not going to write out long-form content around everything related to dating because that's not the Tinder product. You're not reading a piece of content about how to fall in love and then somehow converting into Tinder. But in our user research and in the discussions we had on what the investment we can make into SEO was we discovered that Tinder is a loneliness-solving problem, loneliness-solving solution. So you're lonely, you've gone to a new city, you don't know anybody you'd like to solve your loneliness problem. So because you're in a new city, it occurred to us that this is a local thing. So we're going to look for anything related to local. So what we built out is if you look for online dating in many cities around the world... This is beta. It remained in its beta state, but if you look for online dating in many cities around the world, you're going to find a Tinder page, which gives some examples of places you can go on a date. And more than that, it gives you Tinder as a solution to solve the loneliness problem you have.

**Lenny Rachitsky** (00:30:32):
So what changes here with the rise of AiO reviews and things like that? Is it this is where... this is how future of SEO looks versus just keywords and endless block posts.

**Eli Schwartz** (00:30:45):
Actually nothing changes here with AiO reviews because if you're looking for, you've gone to Dubai. You've just... You've gone to Dubai. It's a brand new country, you've never been there before, and you're lonely. So you look for online dating in Dubai, and you're going to get... Again, AiO reviews might tell you what the dating scene is like. It might tell you where to go on great dates.

**Eli Schwartz** (00:31:05):
However, it doesn't allow you to solve the loneliness problem you have. The loneliness problem you have is a mid or bottom-of-funnel problem. You're still going to click on Tinder's result, no matter what the AiO review does. So that's where I think SEO should be is you need to be in the buyer journey with the SEO you're creating. And it doesn't matter what AiO reviews does or doesn't do because you're still solving the mid-funnel problem with your SEO solution.

**Lenny Rachitsky** (00:31:30):
Let's go in a direction I was going to say for later, but it might be useful now, which is, say, somebody's just sitting there at their desk thinking, "Hey, I want to be... I want to start doing some SEO. I want to be successful at SEO. Haven't really done a ton here." With this new world of AI and LMs, what would be step one, step two, step three to move down a direction of starting to poke their toe in the water of SEO?

**Eli Schwartz** (00:31:54):
I think step one is the step that almost everyone misses on SEO, which is be the user. Try to understand who your user is. And there've been so many companies, and SurveyMonkey was a great example. One, I spent seven years at SurveyMonkey, and when everyone got onboarded at SurveyMonkey, they gave you a SurveyMonkey account and told you that you should run a survey. I think later, in the later years, they forced everyone in their onboarding time to use a survey... run a survey with people in the company, but before that, no one did. So they had this account, and they never did a survey. So they had zero customer empathy for why people use the tool.

**Eli Schwartz** (00:32:31):
And then, when you think about it from a product and marketing standpoint, you're thinking about it as a work challenge rather than a customer empathy challenge. So the first thing anybody should really do around anything that they're trying to do SEO is try to be that customer. So if I am a user of this SaaS, I'm building SaaS, and I want to market this tool, what is a user going to look for? What's the problem they're going to look for that would make them want to do a search? And earlier, I referenced that I don't think most SaaS tools should do SEO. And the reason is because a lot of times, when I talk to SaaS companies about SEO, I ask them this question, and they give me a blank stare.

**Eli Schwartz** (00:33:09):
So if you can't answer the question about what is it that someone's going to do a search on, then don't do SEO because SEO is about appealing to that user. If you can understand what the user should do around looking for whatever product you have, then that's the first step for SEO. So who is this user? Who am I marketing to? You're sort of creating this persona in your mind. Step two is think about the asset you're going to create. So pivoting over to what he talks about Tinder. So we understood that it was a user that was solving a loneliness problem any in the world because that's what Tinder does. It solves that loneliness problem in any way you want, of course.

**Eli Schwartz** (00:33:47):
And now we had to think about what is it that we're going to create. We know it should be global, of course. We would know we want it to be programmatic, which is something we should dig into like difference programmatic versus editorial. We know we want to be programmatic because no one wants to in position of writing a page out for every town or every city or every neighborhood in the entire world. So we want it to be programmatic. What things do we need to pull into that? And then the third step is really building, and we're on a product podcast. Of course, to the product people, you're building the product for that SEO user. So where do you get those inputs? What does this page need to look like?

**Eli Schwartz** (00:34:21):
So again, the reason I think SEO needs to be on product is because the inputs for SEO aren't the way many people think of SEO, which is a piece of content optimized for Google based on the keywords I've chosen. I think of it as a product, which means you need design resources. You need engineering resources. Of course, you need a product manager to really oversee the building of this. You need user research. So it's, again, more than just a piece of content. So going through those steps, again, it's understand who your user is, decide what it is that you need to create for that user. And the third is envision this product.

**Lenny Rachitsky** (00:34:55):
So I think there's a really powerful point here that might be... people might not get, which is the user needs to be thinking of something they will go to Google to search for to find your product.

**Lenny Rachitsky** (00:35:07):
So it's if they're... if nobody is searching for the thing that you're building in some way, there's not going to be an opportunity for you to win an SEO or and benefit from SEO. Are there any examples that come to mind to you of B2B, SaaS companies that just like, "This is not... There's no SEO opportunity here, just like no one's searching for this thing."

**Eli Schwartz** (00:35:27):
Most of them. [inaudible 00:35:30]. One of my first consulting clients, right, when I left SurveyMonkey was Mixpanel. So, I mean, I just left my job, and I'm going to take any client that I have. I have some awful clients that I took, but Mixpanel was not an awful client. It was just an eye-opening client where we're trying to do SEO, and I'm doing SEO and exactly the way that CEO had told me SEO should work, and he was going to do it himself. So I told them the keywords. We came up with the content. We built the links. We did all the stuff SEO was supposed to do, and it didn't work. And we were sitting there, and I asked them to show me the user journey. They have a tool that does it. That's what Mixpanel does.

**Eli Schwartz** (00:36:06):
So someone clicks on a search result and they land on this piece of content, which we did research and we know what people look for, but why is it that it doesn't convert? And then I realized that there were other problems to this conversion, which is Mixpanel is a product you integrate in your entire company. You don't just do a quick Google for it and be like, "Oh, analytics. Yeah. I'm going to tell everyone we got to do it and it's going to be live tomorrow." Also, Mixpanel is expensive. So again, it's the kind of thing that there's friction of. You don't just click from a search result and then decide to just purchase it. You can't even purchase it on your credit card. I don't believe.

**Eli Schwartz** (00:36:39):
So those are the issues, and that's why I think SaaS is not the best fit for SEO because if you think about that journey, the problem doesn't necessarily exist. The SaaS solves the problem, but only once you know that problem exists. And getting people to know that problem exists is typically not an SEO challenge. It's typically a brand challenge. You make a viral video of you didn't realize that you could use this tool we've created to solve your problem, but no one is necessarily searching for a problem they didn't know they had or a solution they didn't know could exist. So that's where the breakoff is. And then the other issue, of course, is now they know the problem exists, but it's not an SEO journey.

**Eli Schwartz** (00:37:20):
So I had another eye-opening experience early in COVID when I was... everyone was home, and there wasn't a lot of things to do. Google reached out to me about a role on their team on Google Cloud for doing SEO. And there wasn't a chance I was going to take it, and it seemed like an interesting thing to go through a hiring loop and stay at home. So I had a fascinating experience interviewing because every time the... first it was the hiring manager and every time it was someone on that team that started the interview. They said, "Are there any questions that you have for me?" And then I spent the next 45 minutes asking them all the questions like, "Why are you doing SEO? What kind of keywords would you want to do? What does this SEO journey look like?" Because for Google Cloud, they only have two competitors, Amazon and Microsoft, and no one is going to do a search and be like, "Oh, Google's number one for this term I searched. Let me just go buy it." There's a decision-making process. You bring... There's a committee decision. So SEO sort of made no sense for that even to be included as a part of a marketing channel. And at a grand scale, Google Cloud should not be doing SEO. At a small scale, a lot of SaaS tools shouldn't be doing SEO because there isn't necessarily an SEO journey. I get a lot of pushback from companies when I tell them. They're like, "Look at all the SEO we've done." But that plateaus really quickly.

**Lenny Rachitsky** (00:38:36):
This is really fascinating, and just to maybe reframe what you're saying because there's kind of a couple elements of this. It's not necessarily that people aren't searching Google for the problem. So I'm thinking of Vanta SOC 2 stuff. It's not like people aren't SOC 2 certification. It's not like they're searching... they're not searching.

**Lenny Rachitsky** (00:38:55):
And what I'm hearing is the bigger issue is they will never buy your product from that experience and that journey. It may educate them a little bit and may teach them, "Oh, Vanta exists," but they're never going to become customers. They need to talk to salesperson. They need to involve bunch of stakeholders. So it's basically a sales motion. It's not a product-led SEO motion.

**Eli Schwartz** (00:39:14):
Yes.

**Lenny Rachitsky** (00:39:14):
Is that right?

**Eli Schwartz** (00:39:15):
Yes.

**Lenny Rachitsky** (00:39:16):
Cool. Pulling on that thread a little bit further beyond maybe even B2B, just how does one decide if SEO is an opportunity for you, and also just how much should you invest in this opportunity just to explore it?

**Eli Schwartz** (00:39:28):
So we have to really put away the myth that SEO is free because it's absolutely not free. There's a cost in time. There's a cost and resources, and, of course, there's the direct expense for SEO. So if you're deciding that you should do SEO, so now we have to go through this evaluation. Again, this is where I think of it as a product where you have all these product ideas and what should you spend time and money on. So SEO is a channel you may or may not want to invest in.

**Eli Schwartz** (00:39:54):
So say there's a SaaS tool, and they're convinced there's an SEO journey, people do search for this solution. When I was at SurveyMonkey, we generated a couple of hundred million dollars a year off of organic traffic because it was a freemium tool where you search for the prodem... the problem, you find the solution, it's free, you sign up for it. If it works for you, you end up paying, and that's the revenue we've generated from organic. So say there is a journey, so people do search for it, and it makes sense to invest in SEO now is when you'll decide how much should you invest in it and how you should invest in it.

So typically, [inaudible 00:40:32] again, for SurveyMonkey, it was around creating content. It was around templates. It wasn't very expensive. But let's say there's a company that does not have a content team. They don't have a product yet that people are going to search for. They don't have a product manager that's going to be overseeing this SEO process. So say you need to hire this PM, or you want to hire an agency, a typical SEO agency, I mean, you're not going to spend $500 on an SEO agency. It's going to be upwards of $10,000 just because that's the cost of someone's time.

**Eli Schwartz** (00:41:01):
So it's $10,000 a month, $120,000 a year, gets even more expensive if you have a full-time employee. So that's one expense you're going to outline. Then, you're going to add in all the supporting resources. You need a CMS. That costs money. You need an engineer to support them. That costs money. You need a potentially design. You need content. So it can really add up quickly. And now you look at that investment, and you say, "For this tool, if I invested a million dollars a year in SEO, do I expect to make back a million dollars a year soon, right?

**Eli Schwartz** (00:41:33):
SEO will always make back money if it's the right fit, but soon. So SaaS tools, especially startups, they need to make that money back soon. Or if they took that exact same million dollars and put it into brand ads, or they put it into influencer campaigns, or they put it into just traditional paid marketing on Meta and Google, would you make that million dollars or $1,000,001 back faster?

**Eli Schwartz** (00:41:56):
And that's where I think the evaluation should happen instead of this default, "Well, I just got my funding. I need to invest in SEO because it's free, and everyone does SEO. And look, my competitors do SEO." It should really be this thoughtful strategic decision-making process of how much will this cost me all in and is this the right use of funds.

**Lenny Rachitsky** (00:42:16):
Amazing. So I think this is really important. It's not that you won't benefit from SEO. It's not that SEO isn't an opportunity. It's that you have much bigger opportunities in other areas. Most likely, if you're a B2B SaaS companies, because the journey isn't fully online, you're not going to convert by just reading a bunch of pages.

**Eli Schwartz** (00:42:34):
Absolutely.

**Lenny Rachitsky** (00:42:34):
Super fascinating. Yeah.

**Eli Schwartz** (00:42:35):
Yeah. There was once a company I met, there was a SaaS tool, they were in a gardening space. [inaudible 00:42:39] they made a SaaS for gardeners, and they were insistent on doing SEO. And they asked me to look at a proposal they got from an agency for $15,000 a month, and it was all content. And then I asked them how their users found them. How did they get all the customers they had that paid them? How did they find them?

**Eli Schwartz** (00:42:55):
They said they go to these gardening shows around the country, and they have a booth, and each booth costs them $10,000. So I said, "Instead of spending $15,000 on SEO, you can get... you can go to all these shows for the exact same budget, and you get users who are interested, they're in market, they try your tool out at the booth, and then they leave and they're leads that you could follow up with. Instead of investing in me like, hope it works. It's sort of free. There are searches for it, but it's not the right searches."

**Lenny Rachitsky** (00:43:26):
The takeaway here is if you're thinking about whether SEO is worth an investment for you and you see all these other companies doing SEO winning with SEO, think about how much will this actually cost us. And I think the most important takeaway for me here is if you don't think it'll convert online if you think sales is the core motion of the process, it's probably not a good ROI for you.

**Eli Schwartz** (00:43:49):
Absolutely. Yeah. Really think about what are the trade-offs. Again, from a product standpoint, there's always trade-offs. So what are the trade-offs to investing in this channel versus another channel?

**Lenny Rachitsky** (00:43:59):
And I think what I've seen, there's all the... the way I think about it, there's four actual growth engines... there are four core growth engines. SEO, paid, virality, and sales. And what I find is, eventually, large companies do them all. Unless you're a consumer, you don't do sale. And so it's not like SEO should you never do. It's I think the main point here is earlier stage, when you have limited resources, probably not the best use of your time.

**Eli Schwartz** (00:44:22):
I think there are companies that should probably never do SEO. [inaudible 00:44:24] going back to what I said when Google Cloud, I don't think that Google could ever say... really pinpoint that there was a customer that they got purely from SEO, and you're going to do all sorts of weighted attribution. And maybe that person did discover Google Cloud from a piece of content or piece of SEO asset, but they never would've converted with all those other things that they've touched.

**Lenny Rachitsky** (00:44:45):
And it's not like you're saying, "Don't be on the internet and don't will make it easy for people to understand who you are, don't have a great site, don't have other pages writing about you. It's just don't... You don't need to spend time optimizing the search results for Google Cloud. You're not going to benefit significantly from that work.

**Eli Schwartz** (00:45:02):
Yes, I mean, again, go really digging into this user journey piece. I don't think restaurants typically should have a website. Not only should they not do SEO, but I don't know that they should have a website.

**Lenny Rachitsky** (00:45:12):
Hot take.

**Eli Schwartz** (00:45:12):
Because if you think about the buyer journey for a person looking for food, they don't typically go to a website. So if you're looking for pizza, and again, a lot of pizza shops have websites. But if you're looking for pizza, you're going to Google Maps, DoorDash, Uber Eats. You're not going on Google and saying, "Pizza near me," and then browsing the websites and just making a decision about where to eat lunch.

**Eli Schwartz** (00:45:35):
Again, if you're choosing how to cater your kid's birthday party, that might be a different thing, but you're not browsing and saying, "These are the places I'm going to go right now." But more than that, it's expensive, and there's no way that that pizza shop knows that the website they have with the soft music playing and their menu that comes up in flash, which is expensive, does a single thing for them. Most of their orders are going to come again through those other platforms.

**Lenny Rachitsky** (00:45:59):
Yeah, I hate restaurant websites. One thing I read once that explains why what restaurant websites are so bad is restaurant owners are big on just like what is the experience when someone enters my restaurant that they go through the vibe, and they do that on the website. They're like, here's the music, and here's the imagery, and here's the animations.

And nobody wants that in [inaudible 00:46:19] on their website. Just like give me the hours and location and your menu. You mentioned a couple of things that I want to drill into a little bit. So, one is just how long SEO should take for you to see results. Two is just expectations of what does good conversion look like. What does it tells you this is actually us, a journey that could work for us well enough that SEO might work? So maybe those two questions.

**Eli Schwartz** (00:46:40):
So those will be custom for anything. And I hate to use the word, it depends because I think whenever consultants say it depends, they're just... they're throwing their hands up and saying, "I don't really know. I'm not... I don't have an opinion on this." And it's like when you go to a doctor, and the doctor's like, "Well, it depends." I mean, you could be dying, or you could just... need to take a nap, right. So there's a custom answer here, and it comes down to what the company is and what the expectations are. So how long it takes, that depends on what you're building. So if you're... if there's an... Again, with Tinder, it took us a while to actually build anything.

**Eli Schwartz** (00:47:15):
So it took us all this time to build for ideate them, build and then to see results. But once we built, and I love working with big companies that are well-known brands, because what we build, as soon as it's available on the web, it's like this turning a huge ship. It starts driving revenue and starts being super effective because it's there. Something didn't exist, and now it exists, and it drives revenue. Smaller companies, it may take many months before Google notices. It may take many months before the demand is there. With Zapier, I think it took them a couple of years before they even saw any results because nobody's looking for it. So it comes down to what it is that you're building and how quickly users will come and find and need that solution.

Then, as far as what the expectations are on conversions, that also is really depends on what it is that you're looking for. There's... Some companies are building media, and they [inaudible 00:48:09]... I mean, again, I think most companies should just not write a lot of content unless they're a media company. But if you are building media and you're monetizing that content from a media standpoint, so maybe it leads, maybe clicks off the page into leads, or maybe it's CPM advertising, so then your conversion is... what you're trying to do with SEO is get a lot of page views because the more page views you get, the more clicks off that page you get into something else. If you're a SaaS tool, then your conversion should absolutely be whatever a MQL should be.

**Eli Schwartz** (00:48:37):
So you... And again, I think most people don't do this correctly with SEO. They used the wrong conversion metric, which is top-of-funnel ranking. "Oh, I'm ranking. My SEO is successful. I'm number one for this." Instead of, "How does this benefit me?" There was a company I was working with, a SaaS tool. They're in a two-sided marketplace they worked with... in an HR space, so they only monetized one side of that HR space, but all the traffic was on the other side of the HR space. So when we were talking about their SEO conversion problems, I suggested that they delete all the content that was on the wrong side of that marketplace because they didn't convert at all.

**Eli Schwartz** (00:49:14):
And there's no... And this is a common misconception. People will think you get a benefit from traffic. Google sees, "Oh, I get all this traffic from search. They think I'm a very good website. So even though none of this converts for me, I should have a blog because blogs are good." It doesn't really work like that. I mean, maybe if you're this massive website and I don't know, let's say, get millions and millions of visits, then you can build some sort of authority and some good experience in Google, and now you can launch something else, and you don't have to worry about needing to build up that authority. But generally, driving traffic to something that doesn't convert for you wouldn't be a good idea.

**Eli Schwartz** (00:49:48):
So really understanding what is it that you're trying to do with SEO traffic, that's your conversion metric. So it could be MQLs, could be page use, could be dollar conversions, it could be people picking up the phone or watching the video, but it has to be some sort of conversion. So for a startup, it might mean that they... you're getting links. I mean, at a minimum, people reading your content deciding to link to you and give you social shares. That might be something you put in a pitch deck. Whatever it is, there has to be a conversion metric that matters for the business.

**Lenny Rachitsky** (00:50:20):
So just to give someone that's starting to do this something concrete to look at. When you come to a startup and help them with SEO, what do you usually track as a sign this is working that we should keep investing? What's... What are the couple metrics that you look at most?

**Eli Schwartz** (00:50:37):
The first is really understanding what is it that they care about. And rankings could be something they care about if someone else cares about it. So, for example, if they're going to put in their pitch deck, "We're number one for this tool," and investors, they don't know that that doesn't convert. So that might be something that we should care about. They should be number one for that tool. If it's MQLs, so they just need people filling out lead forms.

**Eli Schwartz** (00:51:02):
So really understanding who it is that they're trying to attract with SEO that's the metric we're going to use. And again, I don't know why SEO... this happens with SEO but not any other channel. No one doing paid marketing will ever say, "This is how many times I'm number one on this search, or this is how many clicks I get, or look at how much I spent." There's really a, "We spend this, and we're this efficient. This is what we drive from that." And SEO really needs that same rigor.

**Lenny Rachitsky** (00:51:29):
So what I'm hearing is look at if you're in B2B leads coming in through SEO, track that, or rank potentially if that's like a vanity thing, you can show investors and you're saying traffic alone, because usually in decks I see and investor updates almost always the metric I see is traffic we're getting through SEO.

**Eli Schwartz** (00:51:46):
Yeah, total waste of time.

**Lenny Rachitsky** (00:51:49):
Amazing.

**Eli Schwartz** (00:51:50):
Yeah, I mean, unless there's a reason for it. So if you're a media company and traffic means that that number keeps going up, then yes, it matters. But if you are driving leads and that traffic number goes up, you're not driving more leads from SEO. You're getting worthless traffic. It doesn't help the business.

**Lenny Rachitsky** (00:52:07):
Awesome. Okay. Back to the question of just how long it takes just to give someone something here that they can tell... that can tell them when it makes sense to keep going or move on. Say you're just taking a shot at SEO, how long should you give it to make a decision this is working for us or not? Or is it always, "There's always something here, keep working." How do you decide keep doing or not?

**Eli Schwartz** (00:52:28):
When you're building out an SEO effort, and I'm going to keep going back to this, it's a product. So you're building out a product and you're creating milestones. So you say we're... it's going to take us this first month to ideate on what it is that we're building. It's going to... In the second month, we're going to build out a PRD for engineers to start working on. In the third month, they're going to start working, and they're going to ship this.

**Eli Schwartz** (00:52:49):
Now, if you start missing all those milestones, so I mean, this is a common problem in consulting in general, you miss all those milestones, and then some will say, "What's... We've been working together for six months, and we have nothing to show for it." And you can point very specifically to all those milestones that were missed. So that's the result of not shipping or not meeting the milestones that the SEO didn't work.

**Eli Schwartz** (00:53:11):
So as you're meeting those milestones, you can say, "Well, we launched, and our expectation was that after the first month of launching, we would have X amount of pages indexed. Did we meet, or did we miss that milestone?" And then you can say, "SEO is working at a small scale." And I've seen in many companies it takes a really long time, but eventually, when you look back, you see this hockey stick, but while you're in it, you don't necessarily see that.

**Lenny Rachitsky** (00:53:38):
Awesome. Okay.

**Eli Schwartz** (00:53:39):
Okay. Let me share an example of one that worked really quickly. So this was also an interesting one, and I was at SurveyMonkey, and I was introduced to the CEO of Quora, who was interested in doing more SEO. So Quora had never done SEO or never done SEO effectively from a product standpoint. And there were a couple of things I was able to recommend to them, and within three months they had quadruple traffic. So it really will depend on what is it that's holding things back. In Quora's case, they weren't showing any answers. So they were really pushing to get people to log in before they saw any answers.

**Eli Schwartz** (00:54:15):
So I encourage them to show the answers. Yes, they were going to be giving way answers for free, but they were also going to be giving answers to Google. So that was number one. That they were able to quadruple traffic. And the second thing is they had no way that Google could navigate within the site. So when you came to Quora, and it's like this again, so they reversed the suggestion I made, but I think it was 12 years ago. So when you came to Quora, and when you come to Quora today, you see related questions. So you see a question and then there's related questions. And that's the way a bot or a human will navigate through the site.

**Eli Schwartz** (00:54:48):
If they create a sitemap, they did this in the past, and if Quora's listening, you should do this again. If you create a categorized sitemap where you can say, "These are all the questions on health and from the sitemap, again, it's HTML sitemap, not just an XML sitemap and way even a user can navigate through it. This is health, and this is health page one and health page two, and you can navigate through this entire site. Then a search engine can navigate through the entire site, and all of the questions and answers are discoverable." So when I made that suggestion to them, within a couple of months, they were able to quadruple traffic.

**Lenny Rachitsky** (00:55:20):
There's so much here, and there's so many valuable insights. One that I think is really recurring that I think is really important to people is the point that you're making about your SEO content pages should solve... should be a product, AKA should solve problems for people as they're trying to understand the space and the potential problem they have.

So correct me if I'm wrong, but kind of the advice you're sharing is there's less opportunity in just generating tons of blog posts that just have a bunch of content. And the opportunity is more things like Zapier and Canva with templates and Notion and Quora where it's just like, "Here's the answer." It's just like actually help them solve the problem. And with that, "Here's how our product [inaudible 00:56:03] help you solve that problem further." Is that...

**Eli Schwartz** (00:56:05):
It's really building a product around what the company is attempting to monetize. So Canva is building templates because then they're going on to monetize that templates by having other people build off those templates with upgrades and subscriptions. But if a company was... Let's say there was an enterprise version of Canva, and they didn't monetize those templates, so putting out a bunch of free content on the internet that just looked good wouldn't benefit. So it always comes down to what is it. What is the product that you want to use? So going to mention the templates did at SurveyMonkey, so the survey product.

**Eli Schwartz** (00:56:39):
If someone looked for a template of a survey, they wanted to make a survey. So we were not a survey product, and we just monetized off the survey templates that would not have done anything for us. So copying someone else's version of programmatic doesn't do anything. And generally, doing programmatic for the sake of programmatic, so just to have content, wouldn't do anything unless that programmatic fed you into exactly what your product did. So Zapier, they did programmatic. It feeds you into making other zaps between different products. Tinder, we did programmatic.

It fed you into, "Oh, well, you would like to solve your lonely... We showed you that your loneliness problem is solvable in the city you're in. You have to solve that problem by downloading the Tinder app." And I've never used Tinder, only used it from a marketing standpoint, but [inaudible 00:57:26] Tinder gates you. So if you'd like to get the advanced Tinder experience, you have to pay. And again, they're... it's all part of that buyer journey, and anything you're building SEO for, it has to be a piece of that buyer journey. So programmatic, blog posts, anything you're doing, if there is no product journey for it, there's no user journey, it just stops.

**Lenny Rachitsky** (00:57:45):
That's an amazing clarification. So again, it's another point you've been making of traffic alone is not valuable if it doesn't convert. And so you can look at a Canva, you can look at Notion at Airtable with all these templates, copy that. But if that isn't the thing people, will buy from you and monetize it's not going to be worth doing.

**Lenny Rachitsky** (00:58:00):
... Will buy from you and monetize. It's not going to be worth doing.

**Eli Schwartz** (00:58:04):
Yes.

**Lenny Rachitsky** (00:58:04):
Awesome. I'm excited to chat with Christina Gilbert, the founder of OneSchema, one of our longtime podcast sponsors. Hi, Christina.

**Christina Gilbert** (00:58:13):
Yes. Thank you for having me on, Lenny.

**Lenny Rachitsky** (00:58:15):
What is the latest with OneSchema? I know you now work with some of my favorite companies, like Ramp, Vanta Scale, and Watershed. I heard that you just launched a new product to help product teams import CSVs from especially tricky systems, like ERPs.

**Christina Gilbert** (00:58:30):
Yes, so we just launched OneSchema File Feeds, which allows you to build an integration with any system in 15 minutes as long as you can export a CSV to an SFTP folder. We see our customers all the time getting stuck with hacks and workarounds, and the product teams that we work with don't have to turn down prospects because their systems are too hard to integrate with. We allow our customers to offer thousands of integrations without involving their engineering team at all.

**Lenny Rachitsky** (00:58:52):
I can tell you that if my team had to build integrations like this, how nice would it be to be able to take this off my roadmap, and instead use something like OneSchema, and not just to build it, but also to maintain it forever?

**Christina Gilbert** (00:59:04):
Absolutely, Lenny. We've heard so many horror stories of multi-day outages from even just a handful of ad records. We are laser-focused on integration reliability to help teams end all of those distractions that come up with integrations. We have a built-in validation layer that stops any bad data from entering your system, and OneSchema will notify your team immediately of any data that looks incorrect.

**Lenny Rachitsky** (00:59:23):
I know that importing incorrect data can cause all kinds of pain for your customers and quickly lose their trust. Christina, thank you for joining us and if you want to learn more, head on over to OneSchema.co, that's OneSchema.co. Okay, so coming back to AI and its impact on SEO, can you use AI to help you with this, and use AI to create content for you?

**Eli Schwartz** (00:59:49):
AI is a tool. Everyone says AI is a tool, it's not a solution. You can use AI to create content if the content you're creating is a part of that journey. For example, before AI content really came on the scene, because AI's been around for a while, Jasper's been around for a while, Writer's been around for a while before ChatGPT. Before these tools, a lot of ways that companies created content for cheap is they went on Fiverr, and they went on Upwork, and they just created content.

**Eli Schwartz** (01:00:20):
A lot of that content, completely worthless. If you're just creating content for the sake of content, and you paid someone on Upwork $50 for their content, now you can use an AI tool and just create the content, the same worthless content, for free. AI as a tool is a tool creating something that's not necessarily useful for the end journey of the company and for the user journey in general. However, if the content you were creating was pretty useful, and now you're using AI to create really useful content for cheaper and better, of course, you can use it.

**Eli Schwartz** (01:00:53):
An example of a place you can use AI content is if you're an e-commerce site and you're selling your own products, of course, you can use AI content to write product descriptions. It's not a content website. There's a lot of big companies out there, and if anybody wants to look at some of the e-commerce sites and how they do SEO, a lot of them have large SEO teams. The typical JCPenney, the Nordstroms, the Macy's, they have a lot of content on their category pages, but if you look at the keywords that drive traffic to those pages, it's the products on the pages.

**Eli Schwartz** (01:01:25):
If you're looking for shoes, the fact that a Macys.com page will have a lot of content about what shoes do doesn't do anything for the user. They're just looking for shoes, and then there's shoes on the page. I think Macy's actually ranks pretty well on those kinds of things. Using AI content to write more fluff content that's not necessary would just be a waste of time.

**Eli Schwartz** (01:01:46):
Using AI content to feed in a product, and describe what that product is, and maybe some features of that product which help a user, that's not hurting your SEO, because what you're trying to optimize for is the product and the product name itself.

**Lenny Rachitsky** (01:01:59):
Got it. Basically, don't use AI to generate entire blog posts. I know people are doing this all over the place, but absolutely leverage AI to help you add to existing pages, descriptions, titles, things like that, which I can see why Google, Google would've no idea that you were helped to write this thing with AI, right, if it's just a small part of the page versus the entire page?

**Eli Schwartz** (01:02:25):
In their documentation, they say that AI itself is not the problem. It's the helpfulness, the usefulness of the content that would be a problem.

**Lenny Rachitsky** (01:02:35):
You don't have to name names or reveal anything, but do you know of a bunch of companies using AI now to generate tons of high successful pages, high converting pages in some way? In this way?

**Eli Schwartz** (01:02:44):
There's this hatred of AI content by users in general. I think once companies declare that they're using AI, people get upset about it. It was a Red Ventures company, I think it was CNET that said they were using AI to create content. I think they got in trouble because they said they're using AI to create content, but if they had not said they're using AI to create content, I think their entire model would've been very successful.

**Eli Schwartz** (01:03:09):
There's no reason you can't take in, they take 10 products, and they want to review 10 different products. There's no reason you can't tie that all together, have AI write the original piece of content, and then have a human editor just review it. I don't know, years ago, it's not AI, but it's sort of like AI, but there are sports websites that will take in a lot of the things that happen in the sports game to merge it all together into a piece of content.

**Eli Schwartz** (01:03:34):
If you look at any earnings reports on public companies, it's sort of the same thing. Their company will issue, they'll file their earnings report, and then now it's AI. Before AI, it was basically like Mad Libs kind of content. It would extract pieces of the earnings report and then it would write a blog post, which is actually fairly useful. I don't think there's an issue with it itself. I don't think users have an issue with it.

**Eli Schwartz** (01:03:56):
I think if you read that old piece of content, again, on earnings reports, it's pretty obvious that it wasn't written by a financial journalist, but it was useful. You got a quick summary, you didn't have to go into the SEC and read an earnings report.

**Lenny Rachitsky** (01:04:09):
There's this guy, Noah Smith, he's on Twitter, he's got a newsletter called No Opinions. It's awesome. He had this tweet about how we're approaching an age of a ton of slop of content, just a lot of really bad content generated by AI for better or worse, this is related to SEO, but it makes me think about just how much bad stuff we're going to see.

**Lenny Rachitsky** (01:04:28):
To your point, it doesn't matter whether it was generated by AI or not, people will gravitate towards and Google will gravitate towards stuff that is useful and good, whether it's written by people or not.

**Eli Schwartz** (01:04:41):
This is a huge issue for Google, because the amount of content being created is enormous, and it's growing exponentially. Google's trying to crawl everything. They now have more content to crawl, which becomes more expensive for Google, and which is why you have this backlash by Google against many websites, because they're trying to clean the index to save their own costs and to protect the users from having to see this awful content.

**Lenny Rachitsky** (01:05:06):
The crazy thing for LLMs is now to be trained. They're trained on content on the internet in a big way, and they're struggling with not training their LLMs on stuff that AI has written because it becomes this, a bad direction that LLMs will go. They're trained on themselves. Anyway, something I wanted to come back to around AI, which is AI Overviews. I imagine many people are like, "How do I get into that answer? How do I get my product into the answer that Google gives at the top?" Is that something you recommend people try to do? Is that something you can do?

**Eli Schwartz** (01:05:42):
I think of AI or AI Overviews as a branding exercise. Getting into the AI Overview, and Google has links, I mentioned this earlier that Google has links within the content, and I think a lot of what Google does is around potentially liability protection. They're having links. They're saying, "Well, we didn't tell you to jump off the Golden Gate Bridge, this website, which we summarized, told you to jump off the Golden Gate Bridge," or, "We didn't plagiarize. We just linked to the piece of content. We may have extracted more from the content than we were supposed to, and the law hasn't decided that yet, but we linked to it, so it's fair."

**Eli Schwartz** (01:06:17):
Right now, Google has these links in the content, and it sort of links off of it. I did a survey on LinkedIn, and I was surprised by the answer. I thought most people did not click on the links. I got a couple hundred responses, and it's sort of 50/50 and based on my SurveyMonkey experience. It's not a statistically significant survey in general, but it will never go to 99% and one. That's fairly indicative that people are clicking the links, which surprises me, because I don't think that the links are necessarily meant by Google to be useful, which means that AI Overviews is essentially duplicating search results.

**Eli Schwartz** (01:06:53):
You have this AI Overview which summarizes, then you have a link so you can link off of it, and then beneath it, you sort of have the exact same thing. That's the challenge that Google has to work through. For a company to show up in AI Overview, it's a brand challenge. If your link shows up there, then you likely were showing up beneath it in the ranking results, so you've already done the work you're supposed to do.

**Eli Schwartz** (01:07:12):
If you're showing up in the AI Overview mentioned as a brand, like, these are the top CRM tools, you're showing up as a brand, that means you've exercised brand efforts and it's working out. I don't know that companies necessarily want their content to show up because they're giving away their content for free. They want to be showing up in a way that benefits them. If you show up as a brand, you've done good branding, but if you show up as a link, it means Google has stolen your content, and people may or may not click off of it.

**Lenny Rachitsky** (01:07:41):
Along this lines of brand and SEO, do you have any... That's always this question of are we investing in brand? Do we just want people to be aware we exist, or are we trying to actually drive conversion? Any advice on how to think about brand building and SEO, especially with this world of AI?

**Eli Schwartz** (01:07:57):
The biggest myth in SEO is that you could just build links, and link building is the secret source and the secret sauce to growing your SEO footprint. That's totally wrong, because the way most people build links is they buy these guest posts, or they pay for links on low authority websites that sort of look like they might have authority, and it doesn't really benefit anyone because no one's reading these sites.

**Eli Schwartz** (01:08:22):
It's funny that everyone complained about Google as this really, really smart, all-knowing LLM, and at the same time, they think they're dumb enough to fall for these guest posts that are on websites that no one really read. The right way to build links is to build a brand. It comes part and parcel of what you're trying to do. If you're building links, and going back to all the SaaS examples we talked about, so if you've created a bunch of content that is not relevant for the product you're trying to sell, building links to the content that doesn't really benefit the product, doesn't really benefit, the links don't benefit the product.

**Eli Schwartz** (01:08:55):
If you can build this product that's awesome and everyone loves and wants to use, and you get not links, but mentions, and links might be mentions now, because the way a link before LLMs and the link 10 years ago was actually an HTML link. Now, Google can read content. They can say, "Well, you've been mentioned here," that's pretty good. Now, we acknowledge that this might be the brand, and this might be the match for that kind of thing.

**Eli Schwartz** (01:09:23):
That's helping to build that brand. In general, I think of any SEO effort as promoting a brand, building up a brand, rather than building a product, and then separately building out an SEO effort, which has content that may not be relevant, and links from websites that are certainly not relevant to content that's not relevant. It all comes together as being one big effort. The same thing you'll do on PR, you'll do for SEO.

**Lenny Rachitsky** (01:09:50):
Awesome. Okay. I'm glad we touched that. There's a few other directions I want to go, so I'm going to bounce around a little bit and cover some of the other stuff I wanted to extract from your deep experience in this space. One is you've mentioned this idea of programmatic SEO a couple times versus editorial. Maybe first, just clarify what those two directions are, just for people that don't exactly know what you mean. Then two, what's your general advice for which direction to go, programmatic or editorial?

**Eli Schwartz** (01:10:19):
It might be obvious at this point, but I'm going to say it's dependent on the user, but essentially, what programmatic is is it's taking a bunch of data sources and building out a page that is a combination of all these data sources. In my book, I talk about two of my favorite programmatic SEO companies. One of them was created by a past, well, it's not created, the strategy was created by a past guest of yours, Luc Levesque, who introduced us, and that was TripAdvisor.

**Eli Schwartz** (01:10:50):
TripAdvisor took in all these data sources of, "This is the hotel, these are the cities," and then it allowed UGC to combine into one comprehensive page about each property. TripAdvisor did not write a piece of content on every single hotel. They don't write a piece of content on, "Here's this long form blog post as an influencer on the Waldoff Astoria of New York, and here's a long form blog post about the Marriott Marquis in San Francisco."

**Eli Schwartz** (01:11:17):
They built it all from a programmatic standpoint. They took all these data sets, they took all the countries in the world, they took all the properties, and they merged into one comprehensive page, which has dominated the top of search results since the beginning of the time. They still own it. That team has cycled through many, many leaders, many different, a lot of different things, and they're still number ones. It's the strategy that has allowed them to build that brand and to dominate it.

**Eli Schwartz** (01:11:43):
The second example is Zillow. What Zillow did is they solved an early problem many years ago in the real estate space, which is no one understood what the value of a piece of property was. Zillow took in all of those data sets. They got, some of them are government data sets, some of them are their own comparison data sets based on other home sales. The government can say a house is worth one price, and based on their comparison, Zillow can completely disagree with it.

**Eli Schwartz** (01:12:11):
They're building in these data sets, and they're taking photos from realtors, they're taking neighborhood data, they're taking school data, and that's a programmatic SEO page. SEO is the only channel to bring in traffic to each one of these pages. They're not going to do paid traffic for my house, they're not going to do paid traffic for your house. The only way someone would find that page on Zillow, either they start at Zillow.com and then just navigate through it, or they Google it. Those are programmatic SEO efforts.

**Eli Schwartz** (01:12:38):
On the flip side is editorial. Editorial would be, in TripAdvisor's case, writing out that long form piece of content around each hotel, each city, and all the things they've done. Zillow would be the same. Zillow would take 500 million properties and write out an editorial piece of content. Neither of those would be a fit for their model, and it would be extremely expensive. Say each piece of content would cost a thousand dollars, that would be cost prohibitive for anyone to do.

**Eli Schwartz** (01:13:06):
Going back to my distinction based on the user, what is it that the user's looking for? Is the user looking for the value of a home? They don't need a long form piece of content. They need a piece of content or a page that just says what the value of that home is. TripAdvisor's case, they're looking for a single thing, a rating, or maybe they need some of that UGC, but really, they're looking for that rating. That long form piece of content, there's a purpose for it, but not on TripAdvisor's site.

**Eli Schwartz** (01:13:31):
Understanding, what is it that the user needs will help solve, do you approach this from an editorial standpoint, or do you approach this from a programmatic standpoint? Some of the companies I mentioned earlier, like G2 and Capterra, which are completely being disrupted, so they're being disrupted by editorial, but they're also being disrupted by Google itself with their AI Overviews.

**Eli Schwartz** (01:13:53):
If you look for the top CRM tools, you have G2 or you have Capterra, but you also have Forbes writing out a long form piece of content on what Salesforce is, what HubSpot is, and that's probably unnecessary.

**Lenny Rachitsky** (01:14:07):
I think generally, you would, programmatic is the better path and the most common success path is what I'm hearing. What are things you need in place to be successful in programmatic SEO? Like basically, you just need some sort of data source that you own. Is that just... What's a checklist of like, "Here's what tells you you have a big opportunity here?"

**Eli Schwartz** (01:14:29):
Programmatic is the right solution when there's scale and when there's a user use case. If there is not, you create scale for nothing. An earlier version of programmatic, again, pre a lot of the internet companies now, is building out a piece of content for every single zip code in America. Say you offer some sort of local product. You would build out a page for every single zip code that is, in theory, programmatic, but users don't look for it, and Google has completely disrupted that with their own local products.

Programmatic can always be something. I see programmatic mistakes all the time, where websites look at, they say, "Look, we're making reviews of software. There's 10,000 different softwares in the world. We're just going to make out a page for each one and we're going to combine it with, I don't know, a city." You can make programmatic pages like that, but there's no use case. Really knowing what programmatic solution to use comes down to, "Is this something that someone would actually be looking for? Does this page itself provide a solution?" Zapier provided a solution because someone was looking for that combination, but there are many tools like Zapier, which try to be Zapier, but they're not looking for that solution. Going back to some of the template companies you mentioned, I don't think a lot of companies that make templates, they're making programmatic, but there's not a use case for every single one of those templates. They've made programmatic for no [inaudible 01:15:53].

**Eli Schwartz** (01:15:54):
Again, SurveyMonkey was one where we had a fat head of templates we could make, but it wasn't a long tail. We could make a hundred templates, but we couldn't make 10,000.

**Lenny Rachitsky** (01:16:05):
I want to do a rapid fire of SEO myths. Before I do that, I know that you spent a lot of time actually reading the recent ruling against Google and their whole deal with Apple, and you were telling me it revealed there were a lot of interesting stuff about their strategy and where search was going. Let's spend a little time here, just what did you learn doing that exercise?

**Eli Schwartz** (01:16:28):
It's fascinating. It's 286 pages. I basically read a book. It was a verdict.

**Lenny Rachitsky** (01:16:33):
Oh, geez.

**Eli Schwartz** (01:16:34):
I would say that the judge or the clerk that wrote this verdict has a better understanding how the SEO works and how digital marketing works than most people I meet in digital marketing.

**Lenny Rachitsky** (01:16:43):
Wow, I did not expect to hear that.

**Eli Schwartz** (01:16:44):
Yeah. This verdict explains how Google decides to rank a page. The verdict explains how the auction model works in ads, in Google Ads. I think that's fascinating. Talked about the comparison between social media. This court really understood a lot of the questions that were posed to them. For example, Google tried to say that they're not a monopoly because they're social media. The court analyzed that question and said, "Social media is not a comparison to Google search."

**Eli Schwartz** (01:17:12):
Google tried to say a lot of the things they did were non-monopolistic because there's alternatives like Bing. The court really analyzed a lot of these things. Why I found it fascinating was, again, a lot of the testimony was public, is the summary of how the court put it all together in a verdict. A few of the things I learned is one, the market share, Google's market share. That's been a number that no one really liked to talk about.

**Eli Schwartz** (01:17:39):
Google would say, "Oh, we think it's like 80%," because they didn't want to be viewed as a monopoly. Microsoft would say, "Well, maybe we have 20%." I just found a recent document from Microsoft where they claimed to have a lot of market share in search. In the verdict, it says that Google has 98% of mobile searches. I forget whether it said that the court said it, and it said Google didn't disagree, or that came from Google's own documentation, but 98% of mobile searches.

**Eli Schwartz** (01:18:08):
The thing that I thought was most fascinating from the verdict is how much the default partnerships that Google has contributes to Google's success. The plaintiff in the case was the Department of Justice suing Google for being a monopoly. However, I don't know what the word is, but one of the complainants in this is this company, Neva, which was a search engine started by a past Google, I think it was like a head of research or something. A senior person at Google created a new search engine.

**Eli Schwartz** (01:18:39):
A lot of the trial was focused on how Neva could not be successful, despite having a better search engine, despite having a better experience for users, because they didn't have any of these default distribution agreements. That's the part that I thought was most fascinating. Google has these default agreements with Apple, and they also have Chrome.

**Eli Schwartz** (01:18:58):
They have all these inputs into Google searches, which means that I don't think there's a chance, and this is the biggest takeaway, I don't think there's a chance that ChatGPT, or Perplexity, or Claude, or any of these other LLM startups, because they're startups now, even OpenAI is a startup with Microsoft's investments, still a startup. I don't think they have a chance at really unseating Google purely from a quality standpoint.

**Eli Schwartz** (01:19:27):
That's what a lot of the documentation in this verdict is about is how much a force of habit, how much the brand, and how much the distribution agreements Google has, drives searchers to Google. There were a couple of very interesting insights. One is that Bing tried to give itself to Apple for free, and Apple said there was absolutely no price that they would take to use Bing search within Apple.

**Eli Schwartz** (01:19:49):
Another one was Mozilla had a partnership with, I think it was Yahoo, and they did a rev share deal with Yahoo, and everyone switched back to Google. When people say, "Well, SEO is dead, everyone's going to go to OpenAI," and you just look at the 25 years of Google's existence and what they've built, I really don't think so. I really think distribution and the force of brand will keep almost everything Google has today.

**Eli Schwartz** (01:20:14):
Now, why is Google fighting back so hard to build AI Overviews? Well, I think there's two answers. One is, like I said, Wall Street. They really want Wall Street to think that they care and they're doing this thing. The other is losing small percentage points to ChatGPT costs Google a lot of money, so it's worth it for them to invest in it, but I don't think that they have any fear about not being the most dominant search engine in the world.

**Lenny Rachitsky** (01:20:37):
Well, isn't the idea with this trial that this may change, and they may lose that default status, whether it happens or not, that's the whole game here, right? It's like maybe they can't be that anymore, and that maybe opens up. I think that's the opportunity potentially.

**Eli Schwartz** (01:20:52):
I don't think so. Yeah, I'm no legal expert. I don't know what the DOJ will do, but what's interesting, if you saw Google's press release when the verdict came out, so Google tweeted, "We thank the court for recognizing that we're the greatest search engine in the world, and more to come." They're going to fight back, and it's almost like a bully being declared the world's greatest bully. They're like, "See, told you we're strong."

**Eli Schwartz** (01:21:15):
When reading the verdict, it actually said, "There is no competitor. Google is the greatest search engine. They have 25 years of great data. They've done a fantastic job." I don't see any way that those, if they break the default agreements, Apple actually loses all that money Google's paying, and then users will still Google. That's not what will do it. I think the only thing they can do is figure out how to prop up a competitor.

**Lenny Rachitsky** (01:21:40):
Yeah. I think that's an interesting takeaway. People will go to Google, will switch to Google even if it's not default. There's actually a really interesting takeaway from Ben Thompson's analysis of this stuff, and I will point to the podcast episode. I think that shifted my perspective on this, because when you hear Google is paying Apple to be the default search engine, it sounds nefarious and unfair. The deal is actually revenue share. They give them a percentage of the revenue from the ads, which ends up being $20 billion, something like that, a lot of money for Apple. Anyone else can come to Apple and say, "We will give you a revenue share of our searches also." It's just nobody is as big and can pay as much. If you think about it, why can't Google come to Apple? "Hey, we will send you tons of money by doing the search for you and giving you a large percentage of the ads that we are doing for you."

**Lenny Rachitsky** (01:22:36):
It's weird to not allow that if you really think about it, but it's also unfair, because no one else will ever be able to compete with that.

**Eli Schwartz** (01:22:43):
Yeah, and that's what the court said is like Neva didn't have a chance because of that. One other point is, so I did this survey, this was years ago when I was at SurveyMonkey, I did a search market penetration survey to figure out who used what, like Bing versus Google. On my survey, I was generous. I threw DuckDuckGo on there, and I came back, I had thousands of responses, and came back that I had 1% of people use DuckDuckGo.

**Eli Schwartz** (01:23:07):
I didn't realize it, that DuckDuckGo didn't actually know what their market penetration was. When I shared the survey, Gabriel Weinberg, who's the CEO of DuckDuckGo, hit me on Twitter and he said, "Can you share the data with us? We really would like to see it." This was, let's say 10, 12 years ago. In the verdict, it said that DuckDuckGo's market share is 2%. I came back with 1% 12 years ago. DuckDuckGo, I think they raised a hundred million dollars.

**Eli Schwartz** (01:23:33):
They have all these brand partnerships. They have, at baseball games, they have their logo, they've done everything, and all they've been able to do is get from 1% to 2%. There's a lot there, and Google being Google, I don't see anyone knocking them off.

**Lenny Rachitsky** (01:23:49):
Fascinating. Well, thanks for sharing your takeaway so that we don't have to read this report. Before I move to rapid fire SEO myths, is there anything else along the lines of AI or SEO that you think is really important to share that you want to leave listeners with?

**Eli Schwartz** (01:24:04):
I think the most important thing to leave people with is SEO is not dying. There will always be a world where users are requesting their own information. One of the reasons I think these home assistants, whether it's from Google, or Apple, or Amazon, have never taken off, is because you don't have choice. You talk to your Google, and it gives you only one answer. You talk to Amazon, and it gives you only one answer. Like, "I want to buy toilet paper," and Amazon just buys you whatever it decides to buy you.

**Eli Schwartz** (01:24:33):
There will always be a world where there needs choice. One other piece from the verdict is Google believes that we're in the very early days of LLMs, and even with all the machine learning they do and understanding users, you will always need real user data, which Google has on past searches. I think users will always be requesting their own information, and there's never going to be an AI that understands you so perfectly, it's going to know that for you personally, you would like to click result number five.

**Eli Schwartz** (01:25:01):
That's the best fit for what you're looking for right now, which means that there always needs to be multiple choices to make. Yes, most clicks are probably going through the first one, two, or three results, but there needs to be seven, 10, multiple pages of Google, because some people do go to those other pages. I think that's the most important thing to underscore is that all of this means that search changes, a lot of top-of-funnel search goes away, but in general, there's always going to be a world where people are doing the searches.

**Eli Schwartz** (01:25:33):
Then the last piece on that really is when you're looking to do something with search, you're looking to take an action. Companies benefit from those actions. Say you're a hotel, and you want people to sleep in your hotel and pay you to sleep in your hotel. The aggregate number of people needing to take that action and pay you for it does not change even if search volume gets cut. If you're selling shoes, people still need to buy shoes.

**Eli Schwartz** (01:25:58):
If you're selling information, though, your media, if you're WebMD, yes, your revenue declines, because that information that you now aggregated and curated and gave away for free in return for people clicking on ads, Google is now going to give away for free in return for no one clicking on ads.

**Lenny Rachitsky** (01:26:16):
Interesting. I wonder if there's an investment arbitrage opportunity of predicting which businesses will decline with this and which will thrive. Anyway, I want to talk about SEO myths. I know that you have a few things, and we've talked about a few of these, I think, of just things that you know people believe about SEO, but they're actually wrong. Let me just ask you, what are some myths that people get wrong about SEO?

**Eli Schwartz** (01:26:44):
Probably the biggest one we've said over and over is they even need to do SEO. There's this always default assumption that you've raised money, you have a marketing team, you should do SEO. I think that one is really worth putting to bed is think about that user journey. Should you do SEO? It's a question like, "They ask about other channels, should you do brand..."

**Eli Schwartz** (01:27:00):
It's a question like they ask about other channels. "Should you do brand marketing? Should you take out an ad in Times Square?" And no one will say, "Well, I just raised a million dollars. I should totally take out an ad in Times Square." And congratulations on being in Times Square, by the way.

**Lenny Rachitsky** (01:27:15):
Thank you.

**Eli Schwartz** (01:27:16):
No one will just decide, "Oh, I've got money to burn, let me just burn it." So somehow SEO becomes this thing of like, "Oh, I've raised money. Now, I need an SEO team." So that's I think the first myth that's really important to just put to bed.

**Lenny Rachitsky** (01:27:30):
Awesome. What else?

**Eli Schwartz** (01:27:32):
Link building. So link building is brand building. So it's thinking about how you're going to build a brand and have people mentioned to you. And when you're doing link building, you're creating a relationship between the piece of content that has linked to you and the product or whatever you're trying to monetize. So that should be link-building. Just getting the idea of getting links on... An HTML link will equal SEO success, again, I think that's completely wrong. And then I mean probably the biggest myth in general is thinking that Google itself is a black box. So I think there's nuances to how you rank, and no one can really unearth what is it that will you be number one and what it is that will make you be number three. But the basic idea of how you build SEO is very simplistic and Google has a best practices guide on what it is that you should be doing, which is build a website that Google can understand, link to the pages in that, write content that is helpful and that users want to read. And those are the basics. And starting with that is how you're going to build an SEO strategy that improves upon it. But the idea of if, "I take all three of these steps right now. I'm guaranteed to be number one," I think is something that is completely incorrect. And there's an assumption that if you do a lot of things around SEO, you're going to be successful. And I think that that's incorrect.

**Eli Schwartz** (01:28:57):
Yes, there are nuances. But for the most part, you get from most... Zero to 10, you can get to step eight by just doing the best practices.

**Lenny Rachitsky** (01:29:09):
Oh, wow. It sounds very empowering. I like the sound of that. Maybe just on that thread briefly. If someone wanted to start down the road of SEO, I know you're going to be a little bit biased because you help companies with this, but do you recommend bringing someone like you in first or having someone just give it a shot, listening to this podcast, reading some books and blogs, or something else?

**Eli Schwartz** (01:29:32):
Yes, so I am biased. I think they should have the right people give them advice on SEO. So if someone wants to be... If they validated that there is an SEO effort, paying for help on SEO, it goes back to that resource discussion we had before. So if you want to hire a growth advisor, a growth advisor might be very expensive, but you squash a learning curve so you don't make as many mistakes as fast.

**Eli Schwartz** (01:29:56):
If you hire someone in-house, and a lot of times they see this with roles where I'm helping companies hire someone for SEO, they don't have a lot of budget, which means they're going to have someone that doesn't have a lot of experience. So is that the right decision to make? If you're hiring an agency, agencies are typically expensive, and agencies a lot of times get paid on deliverables. So are the deliverables they're doing worth paying for?

**Eli Schwartz** (01:30:20):
An easy deliverable that a lot of agencies produce now is content, but that goes back to our earlier discussion. Do you even need the content? It's very easy for agencies to sell content as deliverable because it's something they actually deliver. Delivering strategy the way most of my growth advising works is very difficult because I don't have a strategy to offer in a proposal because I haven't developed a strategy, and we don't actually see the fruits of that until we implement the strategy. But agencies can end-run that by just saying, "Oh, you pay us on a monthly basis and these are the things we're going to shift to you."

**Lenny Rachitsky** (01:30:53):
Something that I wanted to touch on, which might be a myth and might not be a myth. But I think you're going to say it's a myth based on what you said about Google being so dominant. There's a lot of talk about TikTok and Instagram replacing Search for people. I actually do search TikTok a lot now for like, "How do I solve this problem? How do I cut a watermelon? How do I, I don't know, find a cup for my baby?" It's really good. What's your take on TikTok and Instagram videos basically replacing a lot of searching for Gen Z, especially, and younger kids?

**Eli Schwartz** (01:31:26):
In the Google Verdict, I think Google's said this before. 63% of Gen Z uses TikTok to search.

**Lenny Rachitsky** (01:31:31):
Oh, wow.

**Eli Schwartz** (01:31:32):
Yeah. I think that's just a headline number because it comes down to, you said it over and over in the podcast, user journeys. So there's going to be things that are more appropriate for TikTok or Instagram, and there are going to be things that are more appropriate for Search. So I think if you're doing top-of-funnel discovery, you're going to maybe watch TikTok videos to learn more about the topic. But as you go into the mid-funnel, so say you want to... A popular TikTok search is around travel. So you want to go on a trip. You want to go to Southeast Asia. You don't know where exactly you want to go. So you might want to watch a bunch of videos and see influencers and see experiences. But now you're ready to book. And you want to book a hotel. You want to book your flights. All of that is not going to happen on TikTok. All of that's going to happen on Google Search. So that's the mid-funnel again.

**Eli Schwartz** (01:32:24):
A lot of search will move different places, but ultimately, Google is still the right place to do those searches, to do those mid-funnel searches. So maybe it was more inappropriate that there ever wasn't TikTok for you to get those better experiences. For those top-of-funnel things, you had to suffer through reading awful content that was written only for SEO purposes, and now you get rich dynamic content that comes from TikTok.

**Eli Schwartz** (01:32:49):
And one interesting piece on this is if TikTok does get banned in the US, which looks like it's likely, a company that will pick up all of that users is YouTube. So YouTube has YouTube Shorts. And again, we're looking at a potential monopoly with Google as Google tries to put those YouTube Shorts to solve the problem that TikTok was now solving. So that will be kind of interesting.

**Lenny Rachitsky** (01:33:14):
Oh, man. Google all the way down.

**Eli Schwartz** (01:33:18):
Yes.

**Lenny Rachitsky** (01:33:18):
A thought I had as you were talking about this idea of mid-funnel versus top funnel is a simple way to think about the mid-funnel is where there's intent. You actually have intent to now buy a thing, a specific thing. Yeah. Cool.

**Eli Schwartz** (01:33:30):
I mean that's what it is, but it's a buyer journey. So at the top of the funnel, you're curious. You don't know if you have intent. And in the older way of doing SEO where you only focused on top of the funnel, you only focused on rankings as a KPI, which I think is sort of the incorrect way of doing things. There is no intent. So you showed a KPI that matched with a non-user, which matched with a non-buyer.

**Eli Schwartz** (01:33:55):
As you move down the funnel, there is intent. So there is a user and there's less traffic. There's always going to be less traffic at the middle of the funnel. But that doesn't matter because your KPI is closely related to your business metrics.

**Lenny Rachitsky** (01:34:08):
Let's do a couple more myths if there's anything else that we missed, and then we'll wrap up and get to our very exciting lightning round. Is there anything else that you think is an important myth that people get wrong about SEO?

**Eli Schwartz** (01:34:19):
I'll touch on one more myth, which is that technical SEO is an easy solve to any SEO problems. So there's been a lot of Google updates recently. Again, I think... I don't like to defend Google because in reading the Verdict, I think that Google did some pretty evil things. But a lot of what Google has been doing is pushing back on the things that users hate. There's a lot of bad SEO content out there. So Google's trying to get rid of a lot of this bad SEO content in their recent updates.

**Eli Schwartz** (01:34:46):
When sites get hit by these updates, they try to solve the problem that they think happened to them by doing technical SEO. So they'll reach out to me or to someone like me and say, "Can you do an SEO audit and understand why our traffic has suffered?" The reason their traffic has suffered is because they've done things that were not really useful for users and they sort of polluted Google. They need to solve that problem. Technical SEO has a place. So if you have a large website with tens of millions of pages, if you're Zillow, how you link to each listing, if you're Airbnb, how you link and allow Google to crawl a site and understand a site, very, very important.

**Eli Schwartz** (01:35:23):
If you have a hundred-page website that sells a SaaS tool, technical SEO is probably going to be less important. So spending money and time on technical SEO would be a waste of time. So I think that's another big myth is you solve SEO problems with the right SEO solution rather than, "Let's do an audit or let's get better links or my page..." Page speed is another one that... Agencies like to sell on... If things related to page speed, Google keeps changing the words of what that is, but it doesn't matter as much.

**Eli Schwartz** (01:35:54):
Because at the margins, yes, maybe if you're Kayak and you're competing, you get Expedia, and Kayak is maybe slightly faster, maybe that matters. But if you're in a space where you're competing against lots of slow terrible websites, it doesn't matter at all. So spending a lot of money on making that fix is not the right thing to do.

**Lenny Rachitsky** (01:36:15):
I like how you just make SEO feel much more approachable and simple and something that you could just do and not have to again figure out the dark arts that...

**Eli Schwartz** (01:36:26):
It is not a dark art. It should be for most things, it is simple. And then there are tons of companies out there get in a lot of trouble, and there's billions of dollars to be made on doing the right SEO. But a lot can be unlocked by very simplistic SEO. PMs that don't really have an SEO background can do enough SEO to make a lot of money for the company without needing to be an SEO expert.

**Lenny Rachitsky** (01:36:48):
I love that. That's actually how it worked at Airbnb. The PMs work in SEO were not like historically SEO legends. They were just PMs figuring out SEO and they had a really big impact. So that really resonates with me. Eli, is there anything else that we haven't touched on that you think is important to you or something that you think might be useful to people to leave them with before we get to our very exciting lightning round?

**Eli Schwartz** (01:37:11):
Yes. So I think we talked about how to decide whether to resource SEO, but we didn't talk about how to understand what the expectations are from SEO. So this is something I came up with while I was working at Faire, which is a very interesting company. So it's F-A-I-R-E. They are a wholesale Shopify. They were launching in a new country, and they wanted to understand what the upside of launching in that country was from an SEO standpoint. So the way most people do SEO forecasting is they do a bottoms-up forecast, which is they look at keywords. So say we want to sell a pair of shoes.

**Eli Schwartz** (01:37:48):
You do a bottoms-up forecast, you go onto a keyword research tool, and they're all fairly the same. Look at how many people search for shoes every month. And then you try to estimate what your ranking would be on that word shoes, and then you estimate what you click through it would be, and then based on that, that's your clicks. And then you get a conversion rate, and that's your bottoms up.

**Eli Schwartz** (01:38:08):
And you make an assumption that the word shoes in that tool didn't capture all the people that search like white shoes and black shoes and running shoes, so you just gross it up. You just pick a number and you gross it by 10, and that's your SEO forecast.

**Eli Schwartz** (01:38:23):
Now, the problem with that is that usually it's too small. So you get this number and now you're pitching to launch in a new country. I want to launch in Japan and sell shoes. And you say, "Well, I think I can get 500 users because based on the way I got here, this is my click-through rate and this is my rankings and I'm 500 users." And no one will ever fund that. That's too small.

**Eli Schwartz** (01:38:44):
Now if you're launching in a new country, it's actually fairly easy to figure out what your SEO upside is because you can take the population in the country. So this is not something Pharoah sells, so I don't have to... So I'm not giving away anything. But say you're launching shoes. You're launching a new product website that you're selling shoes in a country like Japan.

**Eli Schwartz** (01:39:02):
I'm going to guess. I don't know the actual numbers for Japan. So say Japan has a hundred million people and you're selling shoes. And you're not going to sell shoes to a hundred million people. We're only selling shoes to men. And let's just divide it in half. 50% of Japan is men, so we got 50 million people that would buy shoes.

**Eli Schwartz** (01:39:19):
But now, we're also going to say, "Well, there's older people and younger people and we're not selling shoes to them." So now we can take 25 million and cut that in half. And then from there, again, we're selling shoes on the internet. Not everyone buys shoes on the internet. Some people buy shoes in a store. Some people buy shoes on the internet. So you take some percentage rate of the amount of people that are going to buy shoes on the internet and say, "We'll take 10% of our 25 billion people in our market. 2.5 million people buy shoes on the internet and we want to do SEO for 2.5 million people. And our expectation is we want to get this number of market penetration, whether it's 10% or 50% or 100%." And there's your number and multiply that number by the amount of shoes they're going to buy every year and your AOV and there's your forecast.

**Eli Schwartz** (01:40:07):
And that may be inexact. And you can tweak those numbers up or down. You can say, "Well, my AOV was wrong. My market penetration was wrong. I was wrong on the total population. I didn't realize that in Japan, no one bought shoes on the internet." But at any point in time, you can go back and adjust your forecast. Whereas if you're doing this bottoms-up forecast, it's actually in many cases wrong to begin with because the keyword research volume is wrong.

**Eli Schwartz** (01:40:29):
I worked with some really fascinating companies where the largest query in their space was the biggest query. So I worked with WordPress. So WordPress, the word WordPress is the biggest query in the web development space itself. There's no other word that's as big as WordPress. And the number that every single keyword research tool had was completely wrong of what Google Search Console said for the word WordPress is, "When you're building these forecasts based on keyword research tools, that first number that you build the entire forecast off of if it's wrong, your forecast is wrong." So when you do this top-down, it's a TAM forecast essentially. When you do a top-down, you're closer to the truth. Now, you probably aren't going to get to the truth. I've never seen a product plan get to the truth of what it could do, but it will help you make a better decision than if you just guess.

**Lenny Rachitsky** (01:41:20):
Wow, this is a massive insight you're sharing. So you're saying the keyword research tools are not actually that accurate in terms of the opportunity there. And why is that? That begs the question. Why are they so off? What are they doing wrong? What are they missing?

**Eli Schwartz** (01:41:34):
They have their own secret sauce for estimations. So even Google, again, for past monopolistic reasons, Google's not allowed to give the real number that they see on Google Ads for how many people search it. They have to buy it from another data source, and then give that out. I forget why. They're all basically guessing. So they're using whatever sort of proprietary algorithms to guess, which is why a lot of them are not aligned because they have their own algorithms. So you're using, whether it's Semrush or Ahrefs, one of my favorite tools is Similarweb, which Similarweb has a lot of browser plugins, which snoop on the way people are searching. So whatever it is that they're... Because Similarweb has browser plugin, but they're not seeing every single person's search, so they have to use algorithms to estimate how much the entire world would be.

**Eli Schwartz** (01:42:18):
And again, I don't know that any of them could get close to truth was when I... I worked with big companies where there were keywords that I could look at Google Search Console, some of them, the tools were overestimating by 10 times. Sometimes they're underestimating by 10 times. So I'm not saying they didn't get the exact monthly number wrong. I'm saying they got it wrong by many factors.

**Lenny Rachitsky** (01:42:38):
Wow, that's crazy. So your advice is... Do you just ignore those numbers? Or is it just, "Check it out but don't roll it. Don't use that number"?

**Eli Schwartz** (01:42:48):
They're indicative. So I would say if you want to know like, "Do most people spell WordPress with a space or WordPress without a space?" It's pretty indicative that people spell it without a space. But if I were building a forecast and say, "Oh, I absolutely choose this based on this defined number." I don't think so. I can use it for normalization. And I use them only for normalization to understand how do people search. And I really like user journeys and they're helpful for understanding user journeys. But as an exact science, it's hard to really use that.

**Lenny Rachitsky** (01:43:19):
That's wild. And so it's mostly useful for order magnitude and comparing one keyword to another relative in this bit. Okay, interesting.

**Eli Schwartz** (01:43:29):
Yes. I mean I have a great example of how wrong it could be in estimating traffic. So there was a company I was working with early in COVID. The public company, their board member emailed them and said, "You guys are getting crushed by your competitors in COVID because look at your competitors. I'm looking at one of these tools and you're at the bottom and you're doing everything wrong." And the CMO says, "What do I tell this board member?" I said, "The board member is completely wrong. This is the Google Search Console." And Google Search Console is not perfect, but again, it's real data and our Google Search Console shows that our traffic has quadrupled in COVID, so it doesn't really matter what this external tool shows. So they're helpful. Tools are helpful. But I don't think they are a source of actual truth.

**Lenny Rachitsky** (01:44:15):
Wow. That's an awesome point in closing. One thing I had noted here that I want to make sure you have a chance to talk about is just you're really passionate about helping people get into SEO and also just becoming advisors the way you are. Share what you think might be useful to people along these lines.

**Eli Schwartz** (01:44:33):
As my own forecast and prediction, I think the need for SEO expertise is going to explode because a lot of what is happening in the search layouts is going to mean that companies have to pivot their approaches. So again, companies focus on rankings, they focus on traffic, and a lot of that goes away. Suddenly the layout changes, the traffic changes. It's not necessarily going to impact their bottom lines if their SEO wasn't a right fit. So this is going to create a lot of interest in SEO help, and I'm seeing this.

**Eli Schwartz** (01:45:02):
Over the last year, my own inbound has really grown because there's a lot of questions as things shake out. So there will be people that want to go into SEO consulting, and I think there's going to be a huge need for it in growth advising in general.

**Eli Schwartz** (01:45:15):
What I would say is, and I had amazing mentors along the way, some of your past guests like Casey Winters and Yuriy Timen, Ethan Smith, they're all guests with great episodes, but they advised me and they shared with me not on how to be a better operator, but on how to do sales better, how to propose better.

**Eli Schwartz** (01:45:36):
And for anyone out there that wants to become a growth advisor, I'd say that that's the skill you really want to perfect. Communication, sales, proposals, and not really worry about being the best operator. You should be the best operator, but that's probably the skills you already have. And don't make an assumption that because you're a good operator today, you'll also be a great growth advisor. Build that growth advising muscle by staying on your day job. Don't quit your day job, and moonlighting and practice selling, closing, working, retaining, and that's where if you're successful there, you can be successful on your own.

**Lenny Rachitsky** (01:46:11):
Amazing. And I know you have some posts that get into this stuff that we'll link to you, right?

**Eli Schwartz** (01:46:15):
Yep.

**Lenny Rachitsky** (01:46:15):
Awesome. It's kind of think of yourself as a product and the journey of working with you.

**Eli Schwartz** (01:46:21):
Yes. You're building a brand. You're not building a consultancy.

**Lenny Rachitsky** (01:46:24):
I love that. Eli, this has been amazing. And with that, we've reached our very exciting lightning round. Are you ready?

**Eli Schwartz** (01:46:31):
Absolutely.

**Lenny Rachitsky** (01:46:33):
Here we go. First question, what are two or three books that you've recommended most to other people?

**Eli Schwartz** (01:46:39):
As has been apparent, I really like user journeys and understanding people. So there's a book called Small Data by I think Martin Lindstrom. I don't know if I'm pronouncing his name right, where he talks about understanding people and understanding how people buy. And he digs into that entire process. He actually goes and lives in people's houses and watch how they use different tools and toys. I always find that book to be fascinating, and recommend to people who want to understand users.

**Eli Schwartz** (01:47:04):
Simon Sinek's Start With Why. Again, the same idea. Really understand what a product a business is supposed to be doing to understand users. This is specifically for growth advisors and not necessarily for PMs, but Million Dollar Consulting. It's a book I read, recommended actually by Ethan Smith many years ago. A fascinating book on how to build a brand and become a growth advisor. I ended up working with the author as a coach for almost a year. Amazing book.

And then the last book that'd be remise in not recommending is my wife's book, which is How To Stop Caring What Others Think: For Real. So it is a book for precisely that. Understanding your own successes, not worry about what other people think about you.

**Lenny Rachitsky** (01:47:48):
Beautiful. Is that in the background, by the way? And if not, you got to put it in your background, your wife's book.

**Eli Schwartz** (01:47:53):
My wife made the background. So yes, it is in the background.

**Lenny Rachitsky** (01:47:56):
Which one is it? Which color am I... Just so people recognize it. Oh, the big one right there. I was wondering why that one was a little taller than the rest.

**Eli Schwartz** (01:48:02):
Yes, this is the book.

**Lenny Rachitsky** (01:48:04):
There it is. Wait, move it up a little bit so we can see the full cover. Oh, beautiful. Stop Caring What Others Think. Beautiful. I need that. For Real, I like the ends, but for real.

**Eli Schwartz** (01:48:13):
For Real.

**Lenny Rachitsky** (01:48:15):
I love it. Okay.

**Eli Schwartz** (01:48:15):
It may or may not be a Google Search query.

**Lenny Rachitsky** (01:48:19):
Oh, man. I see. I see what happened there. Genius. Okay, next question. Do you have a favorite recent movie or TV show you've really enjoyed?

**Eli Schwartz** (01:48:27):
I was on a plane and I saw this movie Blackberry and it looked like a documentary, so I don't know if you've seen it, but it was fascinating. Because it's one of those movies, it has a cliffhanger, and you know exactly how it ends. And it is such a fascinating movie. I didn't know all that history, but they owned the entire smartphone industry, and they went to zero. And it really charted that journey and it makes you think like, "You can never really rest on your laurels. You have to create a product people want and understand your users and keep selling that product." And not be like, "Well, we're number one, this will never go away." And great movie.

**Lenny Rachitsky** (01:49:03):
Funny, it was just recommended by another guest very recently, so there's trending up. It's been around for maybe a year at this point. I watched it.

**Eli Schwartz** (01:49:09):
Yeah, I never would've watched it if it wasn't on a plane. It was totally... It seemed like a plane movie, but it was perfect.

**Lenny Rachitsky** (01:49:14):
I watched that at home. And I love just the technical... Their ability to find clever ways to use the cell networks, that felt impossible, and that's what allowed them to all these. I like the messaging and things like that. That was really fascinating because I didn't realize they basically reverse-engineered the way the cell networks worked to allow what they allowed. Yeah, awesome movie, and crazy story.

**Lenny Rachitsky** (01:49:38):
Next question, do you have a favorite recent product that you've recently discovered that you really love? It could be an app. It could be some physical.

**Eli Schwartz** (01:49:46):
It's not a recent product and it's the kind of thing I fall in love with over and over again. And it might be cliche, but it's my phone. So I recently traveled in Southeast Asia. I lived there for a little bit. So I haven't been back in eight years. And the things I was able to do with my phone like traveling, Google Maps, Waze, and ordering food. I went from multiple countries and I was able to use the same app to book rides and make payments. It was so useful.

**Eli Schwartz** (01:50:12):
Eight years ago, and I was there and I had to buy a SIM card and my phone didn't really work and I couldn't make payments. It changed my entire experience. I almost didn't need a computer. So falling in love with my phone again.

**Eli Schwartz** (01:50:24):
And then another one that... It's not necessarily recent, but I absolutely love, which is Grammarly. So I like writing. I write all my own stuff. I don't write with AI. Grammarly helps me to be a better writer.

**Lenny Rachitsky** (01:50:37):
You know what I've realized about Grammarly recently? I just upgraded to their pro plan. They're like the best product at upselling you on their paid plan because they're just right there in your face all the time. "Hey, we have stuff. We have so many tips for you. We have so much we can improve. Just pay a hundred whatever bucks and we have so much advice to make all your writing so much better." It's right there in your face all the time. They're so good at it. And they got me. They got me. And I'm happy. It's not like that much money in the scheme of things if you're doing this full-time.

**Eli Schwartz** (01:51:08):
I'm so embarrassed when I use Grammarly on my book and it just shows up all blue and green. I'm like, "Oh, man, if only I had known."

**Lenny Rachitsky** (01:51:17):
I actually have a copywriter on my newsletter who's incredible. She finds a hundred things every time to improve that even when I think it's perfect. And interestingly, she doesn't do what Grammarly suggests in more cases than I would expect. So that's kind of interesting I'm finding. But anyway, yeah, Grammarly is great. I use it all the time.

**Lenny Rachitsky** (01:51:36):
Two more questions. Do you have a favorite life motto that you often use yourself, share with friends or family, find useful in work or in life?

**Eli Schwartz** (01:51:44):
I don't know that it fits into a sentence, but it's something I always encourage people, which is to really think big and think long. So I just started working with LinkedIn as a consulting client, and I've talked to LinkedIn about working with them for six years. So, never give up. You meet someone and propose something and suggest an idea you never know where it'll go. I had that all through my career with living in different places, really not think about the moment of where things will go, but just it's a relationship you're building. You don't ever know where anything will happen. So look at the big picture.

**Lenny Rachitsky** (01:52:22):
Love that. And kind of following along those lines, last question. Curious if something comes up here. What SEO win are you most proud of?

**Eli Schwartz** (01:52:30):
I don't know if I could say most proud of. But I really like what I do with Tinder because it brought the entire journey together. There's users out there that didn't know that Tinder would solve a very specific problem, and it's just there to solve that problem. And it's not the way Tinder thought of themselves. They thought of themselves as a dating app, but it's a loneliness solution problem that answers a Google Search.

**Lenny Rachitsky** (01:52:57):
This has been awesome. I think this is going to help a lot of people think through SEO and especially as they realize how things are changing, they're going to have this resource now to be like, "I see. This is what I should change. This is what I should be doing." And I just love, especially the pattern and the thread of, "It's not actually that complicated. You can do it even if you've never really done it before." So I really appreciate you being here and sharing all this wisdom with us. Two final questions. Where can folks find you if they want to reach out to work with you? Also, check out your book. And finally, how can listeners be useful to you?

**Eli Schwartz** (01:53:29):
You can find me on LinkedIn. So search Eli Schwartz, and you should definitely look for my book. So the book is Product-Led SEO. Actually, one piece on just your own personal brand and your own personal rankings. It doesn't matter where you rank if you search your own name. So if LinkedIn shows up first for your name, that's great because they're finding you. And a lot of times, brands and people will be very focused on where they're positioned, but it's about the journey. If they find you, they find you. It doesn't matter if it's number one.

**Eli Schwartz** (01:53:59):
And that also underscores that it's not all about links. I believe for my own name and probably for you too, I outranked LinkedIn. And my book, so if you search Product-Led SEO, my own personal website, which does not have the best domain authority, it outranks Amazon. So that should right away disprove that it's all about links. That's all about SEO metrics. It's really all about the right fit. So be the right fit, and you'll show up where you're supposed to.

**Eli Schwartz** (01:54:25):
And then users can be most helpful for me by subscribing to my newsletter and giving me ideas and feedback on what to write. I really enjoy writing, and I really enjoy hearing from people. So my newsletter is Productledseo.com.

**Lenny Rachitsky** (01:54:36):
It's so consistent across all your things. I love it. Productledseo. Eli, thank you so much for being here.

**Eli Schwartz** (01:54:42):
Thanks for having me.

**Lenny Rachitsky** (01:54:44):
Bye, everyone.

**Lenny Rachitsky** (01:54:46):
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.

---

## [15/16] Lessons in product leadership and AI strategy from Glean, Google, Amazon, and Slack | Tamar Yehoshua (Product at Glean, ex-Google and Slack)

**Tamar Yehoshua** (00:00:00):
Make sure you go somewhere where you have a good engineering partner. Because if you have great ideas of what to build but you can't get them built, then you go nowhere. So that has to be part of your evaluation criteria that you meet and value your engineering partner before you join. And then I think what's really important is that you're aligned. You understand your roles and responsibilities and where you're going to divide and conquer and where you're going to be aligned. You don't want any of this ... Like people in the organization, they ask mom, they asked dad and they got different opinions and playing one against the other. That doesn't work.

**Lenny Rachitsky** (00:00:36):
Today, my guest is Tamar Yehoshua. Tamar is currently president of product and technology at Glean, one of the most successful enterprise AI companies out there right now. Prior to joining Glean, Tamar was chief product officer at Slack for four years where she led product design and research as the company scaled 10Xed their revenue, went through IPO and then got bought by Salesforce. Tamar also led product and engineering teams at Google, where for many years she was responsible for the Google search experience. She also spent five years at Amazon as director of engineering and vice president at A9.com. She was also a venture partner at IVP and has been on board of directors for ServiceNow, Snyk, RetailMeNot, and Yext. In our conversation, we get into all kinds of juicy advice, including why companies don't have to be run well to win, why you don't need a career plan, the two habits she credits most for helping her succeed throughout her career, what she learned from Jeff Bezos and Stewart Butterfield and Marc Benioff, how to build stronger cross-functional relationships and a bunch of advice on AI including how it will likely change your jobs, examples of how she and her colleagues are already using AI to be more productive in their work and what she's learned about building AI-based products that are non-deterministic and can be very unpredictable.

**Tamar Yehoshua** (00:02:15):
Thank you so much for having me.

**Lenny Rachitsky** (00:02:17):
I've had so many people recommend you coming on this podcast. I'm really happy that we're finally doing this. I want to start with a question that I've started to ask people who have had extraordinarily successful careers, which you've had. So let me ask you, what are one or two specific skills or mindsets or habits that you think most contributed to your success during the course of your career that you think might be helpful to people who are trying to figure out how to accelerate their career or just be more successful in their career?

**Tamar Yehoshua** (00:02:47):
One of the things that I think is overlooked is do a really good job at whatever your job is at that point. People have a tendency ... Especially product managers are very ambitious and they want to get to the next level and they're always eyeing the next job, but you're not going to get the next job unless you do really well at the job that you're in. Knock it out of the park. However simple, however easy it may be to you, do a great job. And in tech jobs, there's table stakes. There's table stakes of you need to be technical, you need to know the latest technology, you need to understand your product, the product you're working on. No matter what your role is. You have to understand it deeply. You need to understand metrics. So especially product managers have a wide breadth of things that they need to understand. So those are a given. You need to do that.

**Lenny Rachitsky** (00:03:40):
**Tamar Yehoshua** (00:05:55):
So now the question is the difference in leadership and executive roles and when you're getting there. So how do you start transitioning? So after you've done a great job at everything and you understand the core skills that you need, another thing you really need to know is understanding people and motivations. And when you're building products, you have to understand why does somebody want to use your product? What problem are they solving? Why do they want to click on that button? What's going to make them feel good when they click on it? What's going to give them delight and what's also going to make them feel bad and frustrated and what do they not want to do? So you need to understand motivations in people for building products and for building teams and organizations. So just like why does somebody want to click on a button, why does somebody want to join your team? Why do they want to work hard? What are they trying to accomplish? What's the goal for their career?

**Tamar Yehoshua** (00:06:54):
So you have to be able to read people, ask lots of questions to understand them. And I'll say one thing that really helped me, this is a strange segue, but my father was a psychiatrist and when I was growing up, we would have family occasions, go to events, whatever, and afterwards in the car ride back, he would always give his perspective of analyzing what happened at the event. What this person was thinking. Why did they say this? And then he would quiz me of, "Why do you think they did that?" And it was really interesting because it taught me to see the whole room. To see how people react. Like Lenny, if you say something and somebody else is there, look at the other person. What's their face saying? You can understand so much if you're paying attention. So I think when you want to build for people and lead organizations, it is about the people and understanding them and motivating them.

**Lenny Rachitsky** (00:07:58):
I love this advice. I feel like we could do a whole podcast on just this topic. So on this last point about understanding people, is there an example of this in either a product you built of just like, "Oh, here's something I noticed about someone using Slack or Google or Amazon that changed the way I think about building this specific feature."?

**Tamar Yehoshua** (00:08:17):
One of the things that I caution product managers about is that you don't want to be too overly reliant on metrics and you want to also have an intuition. You want product managers who understand intuitively their customers and their product and sometimes you'll make decisions because you just know it's the right thing to do because it feels right and it usually is right if you understand your product well enough. How do you get good at it? Ask a lot of questions. Don't assume you know. Marc Benioff would always say, "Have a beginner's mind. Go in assuming that you know nothing and listen to your customers, listen to the people." Because I also see this as you're building a feature and you think it's the best thing. Because of course everyone's going to want it because you worked on it and you're going to put it front and center in the interface where everybody's going to see it. Well, no, you got to earn that right. And that is another thing that people do is they want the thing they worked on to be right there, but it might not be the most important thing that a person needs at that point. So have perspective. Have perspective of what your users are actually trying to achieve.

**Lenny Rachitsky** (00:09:33):
Going back to your first point about doing a great job at the job you have, I imagine some people hear this and the advice is do a great job at the job you're already doing, and they may feel like they are, and there's other reasons they aren't being promoted. Is there an example from your career or a story you could tell of just like to clarify what doing a great job look like where it's not just like I hit my goals. It's like, here's what it looks like. Here's how you actually get ahead.

**Tamar Yehoshua** (00:10:00):
Are you helping the business move forward? So it's not about I achieve what I was asked to do, but did you build something that people actually used? It's not about just launching something and did you do the right thing for the company? And that is different. It's a different mindset. Did you enable the entire organization to be more productive despite you? I remember very early in my career I was working as an engineer and I was offered a job to manage a team that was across different programs. I took a vacation, I came back and I said, "I don't think this team should exist." It was my first management job and I wanted to be a manager. And I said, "Here's why I don't think that this team should exist. It's not the right thing for the company. It's not going to be productive." And my manager was so stunned. He was like, "Wait. You're saying no?" I'm like, "Yeah, because here's how you should organize it." And then he's like, "You're right, and I'll find you something else," and he did.

**Lenny Rachitsky** (00:11:15):
If I were to put this into one word, it's impact. Drive impact.

**Tamar Yehoshua** (00:11:18):
Yeah.

**Lenny Rachitsky** (00:11:19):
Amazing. Okay. Going in a different direction, we were chatting before we started recording this and something that you shared with me, and some people may be really surprised to hear this, but I completely agree with this take, is that you don't need to be a well-run business to win. I've seen this myself. I'd love to hear your insights here and especially where you notice this. What parts of your career noticed this to be true?

**Tamar Yehoshua** (00:11:45):
I love working at well-run companies. It's more fun, your people are happier. I like running a well-run team, so I aspire to have a very well run team and to work at a well run company. But what I've seen is when a company isn't well run like IT isn't working, marketing is broken, there are not enough people in HR, there's a lot of turnover. All of these things I've seen that they're not correlated to the company being successful. So I can think of a couple examples right now of companies I know ... Not Glean, where I'm working today. Where there's high executive turnover. Where people get yelled at. There are lots of people fired. There's reorgs all the time. People I talk to are super unhappy, but the numbers are amazing. They're growing like crazy. And the opposite sit is also true. I can think of one company I know really well, amazing, CEO, well run, well oiled machine, everything. Hired good executives and they flat lined.

**Tamar Yehoshua** (00:12:51):
So you just see it. You see it over and over again and people get very upset about these things that aren't working. And one of the things that I try and do is give a perspective of what matters and what doesn't. And it might even be to the sales team because you get all these requests for features all the time. If you did every single one, it would be impossible. Even if you did, 80, 90% of them won't matter for the success of the company. But then there are some that really matter. So what are the things that really matter? We always talk about product market fit. Nobody really knows what product market fit is. Everybody has a different explanation, but it means people want to use your product. That they're clamoring for it. So you've built something that people value and that people value and that solves a problem for them, but that's also not good enough. You need to build a great product, but you also have to have distribution and you need to have a sales team that works. And you have to have enough money in the bank to get there. So those are probably the things that are the most important. I might be missing something.

**Tamar Yehoshua** (00:13:58):
And then within each of those, there's the things that really mattered and there's so many features that we built at Slack that were the most important features ever that failed and nobody used so it clearly didn't have an impact. And you can see that in retrospect, but I think after being at multiple different big companies and small companies, I have that perspective of let's just make sure that we do the right things and don't get too worked up about all the things that are broken because every startup has so many things that are broken.

**Lenny Rachitsky** (00:14:29):
So I think a really interesting insight here is that if you're working at a company that is just chaotic and it feels like we don't know what we're doing, I don't know how this thing is running, I don't know how this will continue to be successful, your experience is it ... Is it that most of the successful companies you've been at are just chaotic internally and aren't incredibly run and that's normal, that's very typical?

**Tamar Yehoshua** (00:14:51):
Until they get to a certain scale. Now, once you reach a certain scale and you've already conquered the market, then you need to be well run. Then you bring in professional managers and things are about the cost and executing and getting all the ... Once you get to over 5,000 people or 10,000 people, you got to have things that ... Then you're a growth engine. You have to know what phase you're in and what's important at that phase. So it isn't that at every phase, chaos is okay, and also some chaos is okay and some chaos is not okay. If you're changing your strategy all the time and you're changing your direction and you're changing projects on people all the time so that they can't actually achieve anything ... So this is again, so you can't simplify it that some chaos is okay and some isn't. And also some chaos is right for you as a person. There are some really great companies I would never work at because they don't fit me. They're not a company I would enjoy going to work in the morning or they're not aligned with what I'm good at. So just because a company is doing well, if the chaos is chaos and something that's going to make you upset and unhappy don't work there.

**Lenny Rachitsky** (00:16:11):
Is there a correlation there? Just like companies that have strong product market fit, things are just breaking as they're going through hyper growth? Just thoughts on why this is the case.

**Tamar Yehoshua** (00:16:21):
A lot of it is that because if you are in hyper growth, you've got customers coming at a really fast pace, you're growing your company really quickly and the number of employees and it's just really hard to keep up. Because things in the infrastructure break, things in the communication breakdown. You've got at any given point 50% of the company has been there less than six months. But you have to grow really fast because once you hit product market fit, if you don't, then your growth will stop. So if you're suddenly growing, especially if you're an enterprise company, you have to have salespeople, if you're a consumer company or systems have to keep running as you scale. And look at companies like MySpace, well, they died because their product got too slow. And so some companies have initial product market fit and then they don't keep up. So I do think a lot of it is it's very hard to grow that fast. And so things really do start breaking, but then once you get all the right leadership in place, processes in place, then it starts to get better. So it goes through ups and downs in level of chaos.

**Lenny Rachitsky** (00:17:28):
There's one takeaway here that product market fit solves a lot of problems. Strong product market fit.

**Tamar Yehoshua** (00:17:33):
Well, no product market fit is a death sentence. I would say it more like that. If you built a product that people aren't really excited to use, then you don't have a company because it's very hard to do that unless you have distribution machine and then you catch up over time. But we will not name companies like that. So there are other ways of doing it, but yeah, that is the most important thing.

**Lenny Rachitsky** (00:18:00):
Yeah. I will say during my experience at Airbnb, I absolutely saw this. It was just nonstop chaos. And I always felt like, well, how is this continuing to operate and succeed? Things are just out of control. Everything's changing every six months. I don't know what's happening here. And I think a lesson here is just that's normal for a hyper growth business that has strong product market fit. But again, not a good excuse to just allow chaos. And it's not like chaos means success, right?

**Tamar Yehoshua** (00:18:30):
And it's not a good excuse to not have an organization that's functioning. You should still strive to have an organization that's functioning and keep people happy and motivated and all that.

**Lenny Rachitsky** (00:18:39):
Great. Okay. Another maybe contrarian opinion that you hold along the career track is that you don't need to plan your career. I also 100% agree with this. I had no plan for my career. I never knew where the hell I was going to go. I never had this vision of here's what I want to do. I just followed things that were pulling me and things that seemed interesting. I love that you also tell people this. I'd love to hear your insights here. Especially for someone that's either struggling with their career or just stressed. They don't have a plan or their plan's not working the way they wanted it to.

**Tamar Yehoshua** (00:19:12):
Really recently I was talking to somebody in their twenties who was asking me for career advice. Should I be a product manager, et cetera. And I'm trying to put together my five-year plan and I said, "I never had a five-year plan." So to be clear, some people need that. That's the kind of people they are. They want the planning. I said, "It's great if you want that, but I never had it." And the person I was talking to just relaxed and they're like, "Oh my God, that's so great to hear because I have no idea what I want to do in five years." I'm like, "I still have no idea what I want to do in five years. I've never had an idea what I want to do in five years." Early in your career you have a lot more angst about it because the forks in the road are more significant because they can go, do I go get an MBA or do I go work for somebody? Do I be a product manager or an engineer? And those really take you in very different paths.

**Tamar Yehoshua** (00:20:09):
And I meet a lot of kids in their ... I shouldn't call them kids. My kids are my kids' friends. But a lot of people who are younger in their career who are struggling with this a little bit. So what I believe, and I've always believed is that you follow people. You learn the most from people. I don't look for domains. Some people have a domain, like I'm super interested in climate or whatever and they really want to work in that area and that's fine so maybe within that area. But you follow people who are the best at what they do. So it's not good enough to follow somebody who you like. You want to follow somebody who's either the best product thinker or the best engineer or the best salesperson. And so that you will learn the skill of how to be the best at that.

**Tamar Yehoshua** (00:21:01):
So you follow people where you're going to learn the most. And a way to do that also is you look at where the great people are going. So you want to go to companies where there's also a nexus of great people because they together will do great things. And even if the company fails or succeeds, but not as much as you'd like, you still have those connections. Everybody talks about the PayPal Mafia and how they've gone on to do things. I was super lucky to be at Google for so many years and I spent a lot of time with Googlers that I met and that are all working in different companies now because you build those relationships by working together. So if you follow people and where you're going to learn the most and you go step by step, I think that's a great way of progressing in your career.

**Lenny Rachitsky** (00:21:53):
That's such tactical advice. And I've seen this work for a lot of people that just go where their favorite former employees work. And not favorite to your point, but the people that they most respect and have been most impressed by. And I think it's such an easy thing to do. It's a really easy heuristic for understanding where to go. There's something Marc Andreessen once shared that I'm reminded of when you say this. There's a term for this, I forget the actual term, but there's certain companies have this gravitational pull where they are acquiring all the best talent. They're currently the gravity in the space and everyone awesome is going there. And you have to, as a company, know you're one of those companies or you're the opposite. You're losing all the people and they're all going to this other company. I guess any thoughts on that?

**Tamar Yehoshua** (00:22:43):
Yeah. And it's really bad when you don't have a gravitational pull. It's super hard. I would say that one thing that if you're a manager, I always advise managers, go somewhere where you can recruit. I got a piece of advice from a friend that I thought was amazing advice as a leader. She said to me, "Take a job where if you hire people, it's going to make their careers." I was like, "Whoa." Because I was getting offers for some turnaround jobs. And if you think you can turn around, great. But if you're going to hire the best people, you want to make sure that it's going to be a good place for them and that they're going to learn and they're going to grow. And so you want to do right by them. And you really earnestly want to say you can make your career by coming here.

**Tamar Yehoshua** (00:23:36):
And I thought that gave such a higher bar for every job I was looking at as a leader that I thought it was just amazing advice. And then on the flip side, on the negative side, some people are putting too much emphasis on where will I get a big financial return? And I've found that financial returns are the hardest to predict. You know who's good. You know who you want to work with. You can predict where you're going to learn. Because even if a company fails, you learn a lot. But predicting financial success is so hard because you don't know what's going to happen with the market, with the world, with crypto, and Meta AI. And people who do that and say ... I had one person say, "I took this job because I'm a mercenary. They just paid me a ton." Did not work out for him. And I feel really bad when people do that, but I think that it's a dangerous thing to do.

**Lenny Rachitsky** (00:24:40):
I imagine some people hearing this advice are going to feel like, "I'm not going to get a job at OpenAI or Glean or other awesome companies that everyone wants to go work at." Any advice to those folks?

**Tamar Yehoshua** (00:24:52):
There's lots of good companies and there's lots of smart people. You don't have to be at the top brand. And if you go somewhere where you're going to learn and it's going to get you there. I made mistakes. I went to some companies, multiple companies that failed or stopped growing and didn't do well or didn't have all the right people. Careers you don't make every step is to the right place. You remember in what you cited, all the companies I went to that did well, you left out all the ones that I went to that didn't do well. And so then people will assume that every time I made a job change, it was to a company that did well. No. That was not the case. So if you focus on that learning bit, you will get there. And there are lots of paths. There isn't just the OpenAI or Glean or Anthropic.

**Lenny Rachitsky** (00:25:42):
Awesome. And again, I love how tactical this is. If someone is trying to figure out where to go work if they're unhappy in their current job or don't have a job right now is just make a list of the people you most respect that are the best at the thing they do, see where they work and there's your list of companies to potentially go after. There's a lot of benefits to this as you shared. It's not just helping you pick the place to work, it's the network. It'll level you up. Is there anything else along those lines that is helpful for people to think about why this is a really good strategy?

**Tamar Yehoshua** (00:26:10):
Skills can't be taken away. A company can fail, but if you learn a skill, you will always have that skill.

**Lenny Rachitsky** (00:26:15):
I love that. And I've totally seen this to work, so I really love that you're focusing on this advice. You've mentioned places you've worked and folks you've worked with. You worked with folks like Jeff Bezos, Stewart Butterfield, some of the top product thinkers, leaders in the world. So let me just ask, what's one thing you learned from Jeff Bezos and Stewart Butterfield?

**Tamar Yehoshua** (00:26:37):
Probably can't narrow it down to one, but I'll talk about Bezos first. I was very lucky to join Amazon early when I still ... I had quarterly meetings with Jeff Bezos. And this was before AWS launched, so it was before Amazon was known in the Valley. This is another example. I went there because I went to work for Udi Manbe who started A9 and he was talking to me one night trying to recruit me and he spent two hours on the phone with me telling me how amazing Jeff Bezos was. And this was before there were any books on him. And that really convinced me to go there. So there's a lot written on Bezos. Read his shareholder letters, read the books about him, read Colin Bryar's Working Backwards. The Everything Box I think it's called or The Everything Store.

**Lenny Rachitsky** (00:27:25):
The Everything Store. Yeah.

**Tamar Yehoshua** (00:27:27):
There's so many good books and there's so much to learn about how he works. So I won't try and cover those things. The things that stood out to me from the meetings I had with him were a couple of things. One, a lot of people have written about these six pagers, so he doesn't believe in PowerPoint. You write a six pager about ... It's like studying for the final exam is writing these six pagers. So you go into the meeting and there's the people around the table, his executive team and him. First he does not speak until everybody around the table speaks. So he goes around to all his leads and said, "What do you think? What do you think? What do you think?" And I'm sitting there like, "I don't care what anyone think. I just want to hear what Bezos thinks." But he wants to make sure that it's a team effort and that he's listening to what everybody in his organization thinks.

**Tamar Yehoshua** (00:28:17):
And he always spoke last. He is by far the smartest person I've ever met in my life. I've worked with a lot of smart people. But his ability to go deep in any domain and nail the core issue, and remember. We would've quarterly meetings and from quarter to quarter he would remember things that he had talked about before and then he would go into the architecture of search and why are you doing it this way or that way? And you're just blown away that he knows that. For me, the biggest takeaway from those meetings was his consistency, which is he had principles that it made it easier for you to operate in his company because you knew what he cared about because he always had these principles. Everything had to be customer driven, everything had to be relevant for the customer.

**Tamar Yehoshua** (00:29:12):
He hated icons. That was just the thing. You had to write what they were because people couldn't figure out what they are. So anytime you showed an icon, he would get annoyed. But you would go in and after a couple of meetings you're like, "Okay. I know what he's going to ask about. I know how he's thinking and I know what his principles are." And I think that consistency enables you to operate a large organization more effectively. And then there's one other thing that I really remember was one of the few really small meetings I was in with him and we were presenting working on a new product, and I was like, "Our competitors have 10 times as many people as we do on this." And he looks at me and he said, "That is your advantage." And then he goes into his talk about how it's a hill and it takes seven years to build a product. You can't look at it in the near term. You have to be in it for the long term. You can be sure I never went in and said, "I need a lot more resources." So that was Bezos.

**Lenny Rachitsky** (00:30:14):
Awesome.

**Tamar Yehoshua** (00:30:17):
Stewart. Again, I went to Slack because I wanted to work with Stewart Butterfield. I think he is the best product thinker in the Valley. He's not working in product right now. He's taking time off. But he's got this combination of long-term thinking and in the details. So in 2014, he wrote a master plan for Slack, which was build a product people love, build a network. That's Slack Connect. Build a platform that makes all of your other SaaS products more valuable. That's Slack Platform. And then do some magic AI stuff. Magic AI stuff took a lot longer, but-

**Lenny Rachitsky** (00:30:54):
That was part of his plan early on is magic AI stuff.

**Tamar Yehoshua** (00:30:55):
It literally was. There was a grid with four boxes in 2014 and it never changed. That was his master plan and what we worked on each year changed. But somebody recently asked me, "You guys did Slack Connect much later?" I'm like, "Yeah, but it was always part of the plan." It was always part of his vision. So he saw forward in the vision, but he also was very much into the details. And I think the thing that I learned from him the most was the power of prototyping. And that even though he was such a great product thinker, he would always say, "I can't tell you if this is going to work. I have to feel it. I have to try it. And a mock-up doesn't tell you what it's going to feel like." And he would push people to do prototypes, not incremental of just to get a feature out, but really to think. Very soon after I started, we launched ... I hired a design lead, Ethan Eismannn, and he led a redesign of the new information architecture for Slack.

**Lenny Rachitsky** (00:31:59):
I worked with Ethan at Airbnb.

**Tamar Yehoshua** (00:32:00):
Oh yeah.

**Lenny Rachitsky** (00:32:01):
He was head of design for the search experience and the search team.

**Tamar Yehoshua** (00:32:04):
Yeah. Ethan is awesome. And he came in and his first task was to work with Stewart on this redesign. And Stewart came in and said, "I want you to take everything in the interface and put it behind one button." And everyone's like, "That's never going to work." And he's like, "Do it. Just do it." And so we had our prototypers ... We had also engineers, front-end engineers who were really good at prototyping, literally took everything in the interface and put it behind one button and he said, "This is how you're going to see what you really need in the interface." So we were never going to ship that, but it was the beginning of the redesign.

**Lenny Rachitsky** (00:32:43):
**Tamar Yehoshua** (00:34:08):
If you're doing it right, it'll be faster and you need to have an engineering infrastructure that enables prototyping. So some engineering infrastructures are too heavy and they don't actually enable prototyping. We had a problem with our mobile apps that it was too hard to prototype and we actually redesigned our mobile apps until we got to the point where it was easier because our desktop app was pretty easy to prototype. But you have to have a layer of abstraction that enables you to do that, and you have to have engineers who have a prototyping mindset, and if you build multiple things and you have this mindset as I'm willing to throw it away, you write code that is never going to make it to production so you can just crank it out much faster and then you can see what works and then you build the production code. Until you actually get to your end goal of something working faster.

**Tamar Yehoshua** (00:35:02):
But you need the engineering team to have the same mindset. The product and engineering have to work together and design because design is just in it. Sometimes you can get design engineers who are doing the prototyping. So your first prototypes are like Figma prototypes, and then you get prototypes on real data. When I was at Google, one of our teams, a front-end team, I remember we hired a bunch of prototypers and our head of front-end engineering said to me one day, this is my secret weapon. This is how we move faster. So I do think it's a mindset shift and a tech stack shift.

**Lenny Rachitsky** (00:35:39):
We're going to talk about AI later, but it's also getting easier to build prototypes with AI. There's this video recently that went around on Twitter where an eight-year-old girl was building an app and in like 45 minutes, she built a chatbot using this product called Cursor. So I think that'll unlock a lot of great product on opportunities and just accelerate this sort of work. I asked about Jeff Bezos and Stewart Butterfield. I'm curious if there's another leader you've worked with that maybe is less known that you also learned a ton from that might be worth talking about.

**Tamar Yehoshua** (00:36:12):
I think that there are people who are really, really good at what they do. So Marc Benioff is an amazing marketeer. His marketing mind ... After the acquisition, I got the opportunity to onstage with him at Dreamforce for ... Because Slack was a new shiny thing so of course Slack was going to be in the keynote. And so I was in the Benioff's keynote two years in a row. And so I watched how he approaches his keynote and the whole thing around Dreamforce. Dreamforce is incredible at the impact that it has on the ecosystem. And so I think that as a product, people don't think of him as much, but as his marketing abilities are amazing what he's done.

**Lenny Rachitsky** (00:37:07):
I've written posts about how various companies got started in Salesforce history. Always comes to mind where they go to conferences where's there's no software mascot walking around. And I remember they did something around one of their competitors where they just created some real controversy around someone.

**Tamar Yehoshua** (00:37:22):
Well, they went into their competitor's conference and stood outside their competitor's conference.

**Lenny Rachitsky** (00:37:27):
Mm-hmm. Right. That's what it was.

**Tamar Yehoshua** (00:37:29):
This is in the Beyond Software. This is in his book that he wrote about the early phases of Salesforce. And it takes his guts. He pushes the envelope.

**Lenny Rachitsky** (00:37:40):
I love that. It's a really good point that people don't think of Marc Benioff as a marketer. And that's interesting that that's maybe the main thing you took away from him is just the power of marketing and the skill.

**Tamar Yehoshua** (00:37:49):
He approaches his marketing presentations like a product person approaches their building their product.

**Lenny Rachitsky** (00:37:58):
Amazing. Okay. Speaking of former colleagues, I asked one of your former colleagues, his name is Fuzzy Khos. He's now the CTO of Notion. You worked with him, I believe at Slack.

**Tamar Yehoshua** (00:37:59):
And at Google.

**Lenny Rachitsky** (00:38:10):
And at Google. Wow. Okay. So I asked him what to ask you, and he said that you're amazing at building strong cross-functional relationships, especially with engineers. I know you used to be an engineer, so I get where that skill come from. What can you teach people about building stronger cross-functional relationships, especially PMs to build better relationships with their engineers, designers, other folks on their team?

**Tamar Yehoshua** (00:38:34):
Probably the most important thing that a product leader does because if you have great ideas of what to build, but you can't get them built, then you go nowhere. So one, make sure somewhere where you have a good engineering partner. So Henderson was the co-founder and CTO of Slack, and I couldn't have asked for a better engineering partner. He's just awesome. And that has to be part of your evaluation criteria that you meet and value your engineering partner before you join or you know that it's not the right one and the organization is willing to make a change. So that can happen too. You can go in and understand that something has to change, but that is a very, very important thing of what you're doing and what you're assessing when you go in. And then I think what's really important is that you're aligned. You understand your roles and responsibilities and where you're going to divide and conquer and where you're going to be aligned.

**Tamar Yehoshua** (00:39:29):
You don't want any of this ... People in the organization, they asked Mom, they asked dad and they got different opinions and playing one against the other, that doesn't work. So one, you have to know that you're not going to do that. So if somebody would ask me something that it was in Cal's domain, I'd be like, "Did you talk to Cal?" I would never try and go around him. So we were very clear on, you're going to drive this, I'm going to drive this. And if it was unclear, we'd talk and we would say, "Okay. Who's going to take this one?" And we would do all our reviews together. And so all of the OKR reviews, we had weekly exec reviews, we had the updates on our OKRs, so we did them all together, but I knew here's the things that he was going to ask the questions on and dig deep. And then when I was, he would take a back seat, but of course we could ask questions in each other things, but I knew that he was taking ownership and he knew what I was taking ownership of.

**Tamar Yehoshua** (00:40:24):
But I think the bottom line was respect. Is that you have to respect and trust that they actually will follow up on what they say they will. In Cal and Fuzzy were amazing at that. I would go to Fuzzy and be like, "Hey, we need more mobile engineers because this one product is not going to ship." And he's like, "I'm on it. Got it." And that was all I needed to do. And obviously if he couldn't do it, he'd come back to me and, "Hey, there's going to be a problem." But it was like just things got done. That's the best part of it.

**Lenny Rachitsky** (00:40:56):
You talked about being aligned, which I love and I fully have seen that power of that of you and your engine manager, design manager being aligned on ... And you tell me if I'm wrong, but specifically on what goals you're trying to achieve, what success looks like, things like that. Are there any tactics you found to create that alignment? And also if there's anything else you want to add to the point I just made about what it is you're specifically aligned on, that'd be great.

**Tamar Yehoshua** (00:41:19):
One, you got to spend a lot of time together. There isn't a way around that. And you have to document things and make sure that you've talked it through. And if you don't agree with something and you're not sure it's a priority, you have to speak up and you can't just be like, "Okay, whatever.", and then go to somebody in your team and be like, "Oh God, that that CTO, why did he make this decision?" That just doesn't work. So I'm a very direct person. So if I don't think that something is the right priority or is working, I will be very clear. We had different forms, so I'll be very tactical here on the forms that Cal and I had together.

**Lenny Rachitsky** (00:41:56):
Perfect.

**Tamar Yehoshua** (00:42:00):
We used OKRs to drive our processes and we would have the teams present OKRs to us. When the team got too large, it got to be too much time to go through every team's OKR review so we had a Slack channel for each team, their OKRs, a planning channel for each one. And people would post a doc and then a Slack video of going through the major points. And we had a time limit of how long they were allowed to be. And they would say, "Here's our OKRs, here's the things that you would pay attention to." And then Cal and I would do a marathon and we would watch them all together. And-

**Lenny Rachitsky** (00:42:36):
In a room sitting there watching them together?

**Tamar Yehoshua** (00:42:38):
Correct. And then we would say, "Do we have any follow-up questions?" And we put in channel our follow-up questions to the team. And sometimes there'd be five to 10 teams that we would then have a follow-up meeting with. We would say that this is a really high priority project or there are a lot of questions that we have, and then we would do a meeting but we were always doing those meetings together. So that was the OKR reviews of getting the alignment. And by asking the questions, we could then ... By it just being us, we could dig into the team. And we each had a chief of staff, so it was the two of us plus our two chiefs of staff, and which they also did a divide and conquer and they worked really well together. They were both long time Slack employees. So for years they had ... One had been an engineering director and one had been a TPM. And then every Monday we had a Monday meeting where we reviewed the progress on the top OKRs and red, yellow, green and don't talk through the green ones, only talk through the red ones and what are the issues. And again, both there. And then we had a weekly meeting with the four of us where we would just go through any issues in the organization, what's going on, what's not.

**Lenny Rachitsky** (00:43:50):
And the four of us is you, the CTO, the chiefs of staff.

**Tamar Yehoshua** (00:43:54):
Yep. And sometimes we would invite people. Like there's an issue with QA, so we'd have the QA leader come in and present to us. But we tried to limit the number of meetings with teams. So it'd be like the Monday meeting was the big meeting that you had to be there and you had to be able to talk to your project and that was it.

**Lenny Rachitsky** (00:44:13):
There's so much awesomeness here. I love the idea of this Async share your plan in a video instead of meetings with everyone in real time. And you could just do a lot of the stuff Async.

**Tamar Yehoshua** (00:44:22):
We iterated every quarter, just like you iterate on a product. So every quarter we would say did the OKR planning work or not, and then we would adjust. So we got to the point where at one point we added up all the hours of OKR reviews and all the people in them and it was some insane number, like 300 and something and we're like, "This has gotten out of hand." So then we're like, "We have to do something drastic." And that's when we moved them to Async. It was also right after Slack Clips launched.

**Lenny Rachitsky** (00:44:51):
Got it. That's the video feature. Very cool. Then I know you launched huddles, right? Slack Huddles? Did you use that as a part of this or eventually you just get people into a little huddle asynchronously and talk-

**Tamar Yehoshua** (00:45:01):
Sometimes. Absolutely. We would be in the reviews and we would huddle with somebody to ask a quick question. We use Huddled all the time. I still do. I love Huddles.

**Lenny Rachitsky** (00:45:09):
I love it. One crazy thing about Slack is people in Slack don't actually use email internally. It's like all in Slack. It's like the actual vision of Slack working within Slack.

**Tamar Yehoshua** (00:45:18):
No email unless you're dealing with somebody external. And no, it's mostly Slack Connect anyway.

**Lenny Rachitsky** (00:45:24):
Anyway. Wow, that's amazing. Okay. I have one more question around product stuff and then I want to talk about AI. So I was reading your newsletter on Substack, which we'll link to and you share this really interesting insight that I've experienced myself that I'll quote you here. One of the mistakes that I see a lot of product managers make is they over index on people who are going to be unhappy with the products they're launching. And basically your advice is not to worry so much about making users unhappy, which I think is counterintuitive to some people. Can you just talk about this lesson and I'd love to hear what product you launched that made people unhappy that you realized, oh, maybe we don't need to worry about this as much.

**Tamar Yehoshua** (00:46:04):
I saw it more when you unlaunch things, you take things away there's always some set of users that are using a feature that nobody else does, and then you take it away and they're super unhappy, but there are more people you're going to make happy. So a product manager gets caught in this trap of the vocal minority and the number of people using your product ... Depends on what phase. Are you a Google? Are you Slack? Are you a Glean? But the number of people using your product today is usually unless you're a Google far smaller than the number of people who are going to be using your product tomorrow. So design it for the bigger number of people who are going to be using it tomorrow. If you have to redo the UI and the Who Moved My Cheese, people will be unhappy, but all the new people are going to be like, "This is so much easier." Then do it and deal with the people who are unhappy.

**Tamar Yehoshua** (00:47:02):
But the trick is you have to be respectful and you have to be transparent and you have to explain. You have to go to people and say, "This is why we made this change." And you have to be authentic. You can't be dismissive and you can't have marketing speak. You have to really say, "Here's for real why." And you have to listen to your audience. You don't want to alienate your early users because most people ... If you made a good decision on why you moved this or why we stopped using Slack calls and moved to Huddles and you have to do it over time and give people choice and then give them enough time to move. So you have to do it in the right way. But if people feel heard, it makes a difference.

**Tamar Yehoshua** (00:47:50):
I have an example that's not a product example, but I think is a really good one. It's a leadership example. So when I was at Google, there was always a controversy about something, but there was a controversy about ... It was Blogger or something. I can't even remember what it was. It was like we made a change. We were like 50,000 people at the time. There was an engineer in my team, an IT engineer that was super unhappy about the change. And I knew Rachel Whetstone, she was in charge of all of PR and global policy at Google. So huge job. And I emailed Rachel and I'm like, "Hey, do you have an FAQ or something that can help me? Because I don't know why you made this change and that I can help explain to the engineer in my team."

**Tamar Yehoshua** (00:48:33):
She did not respond to my email. She picked up the phone and she called him. I had no idea she did this. She just called this IT engineer and she listened to him and she heard why he was upset and she explained her reasoning. He was so blown away that she called him that he completely changed his opinion and then he told everyone else in the org. And so it had this effect. And I learned a lot from watching her do that. She never even told me she did it later. She just did it. You just act. You're authentic. You listen to people and you're transparent.

**Lenny Rachitsky** (00:49:12):
It's so funny. This reminds me of a parenting book I'm reading right now that a former guest recommended called Listen. And the core thesis of the book is when your kids are acting up or they're getting off track, so much of what they need is a sense that you're connected to them, a connection which is rooted in you listening to them. And so all-

**Tamar Yehoshua** (00:49:34):
My favorite parenting book ... I don't know if this is the same one or a different one, it's How to Talk so Your Kids Will Listen & How to Listen so Your Kids Will Talk. Maybe it's the new name of that book, but it's so good and it's so true in everything and also in products. So whether you're in a forum and explaining to customers, whether you're enterprise customers, you're explaining, you're hearing them out, people want to understand.

**Lenny Rachitsky** (00:49:58):
Amazing. There's so many applications of just the power of listening. Okay. Well, not quite a segue, but let's talk about AI. You're at the epicenter of AI now with Glean. How do you anticipate AI will change our jobs and product? What do you think people may be aren't recognizing it, realizing it? What have you seen?

**Tamar Yehoshua** (00:50:21):
I'm going to give you a little bit of my history with AI to get to that point. When AI was a completely different technology stack ... I have a master's in AI. So I started working in AI when ... It's evolved so much. And then of course at Google using it for auto complete and search. It's transformed so many times. But then with this last transformation of GenAI ... And that's what brought me to Glean of seeing this, meeting lots of AI companies and like, "Wow. This is really going to transform how we work." And it's just fascinating seeing these products. I was one of those people like, "Oh yeah, it's going to be so far away." Until I saw GPT3. And I think AI, we are underestimating how much it's going to change how we work. It's not going to be sudden from today to tomorrow because people haven't figured it out yet. They haven't figured out how exactly to leverage it. But the people who have are going to be so far ahead. They're going to be far ahead of everyone else because they're going to be working faster, they're going to be working better.

**Tamar Yehoshua** (00:51:33):
And in five to 10 years, I think the lines between product managers and engineers and designers are going to blur because AI will enable product managers to build prototypes, to build designs. Designers to build a pro like Figma already has their Figma AI. You can press a button and you can get your initial prototype working. You've got all the co-pilots. So they're not quite there. You still, like with Copilot or with Cursor, you need to be an experienced engineer to know when it's getting it wrong, but they're going to keep getting better. I think people have to be careful about not getting left behind, but their jobs aren't going to go away. They're just going to change. I'm of the believer that we're just going to have a lot more software. But I talked to engineers and to PMs saying, "Yeah, I tried that. It doesn't really work." And then go back to how I worked before. And that's a dangerous spot to be in I think.

**Lenny Rachitsky** (00:52:34):
For people that get anxiety hearing this where they're feeling they're going to be left behind and like, "Oh my God, I don't know enough time to do this or I don't know what I'm doing here." Do you have any advice for what's something someone can do to not fall behind?

**Tamar Yehoshua** (00:52:48):
Use the products. This is what good PMs should do period. Always be using new products. It's not a unique thing for AI. When mobile came out, PMs needed to be using mobile apps all the time to try them out, see what the UIs are, see what's working and what isn't. And the same goes even more for AI. Use ChatGPT. If your organization has Glean, use Glean. Use Claude. Try them all. Try them and see what they do. I was talking to a product manager I know who is more forward-thinking and loves playing with new products and he had this use case that blew me away. So he said ... And this was a couple of months ago, so before ... It was right when Gemini had expanded the context window. So his product had a Discord channel and he took the transcript from the Discord channel, which was huge. And he fed it into Gemini the entire channel and then used it to ask questions. Like what is the sentiment of my product? What is the most requested feature? What are the things people are unhappy with? This never would've occurred to me. It's like, that is so smart. And he's like, "It was like a goldmine." Do you know how long it would've taken him to read? And he just wouldn't have done it.

**Tamar Yehoshua** (00:54:06):
So think about for the argument, oh, I'm too busy. Well, if you use these products it's going to be a leverage on your time. So you get a lot of articles sent to you, summarize them, use AI to summarize the articles. We use Gong at Glean to record all our sales calls. We have a Glean app that will read all the Gong transcripts, put them in a spreadsheet in a certain format of who the AE is, etc. And then summarize all the top requested features from all the Gong calls. And it took a while to get it right. At first the summarization, the prompt wasn't good enough and would give us features that our salespeople would recommend and didn't distinguish that this was actually the customer. So you have to tweak it. It's not going to work out of the box. But then we got it to the point where it worked and these things really save time and you have to use your creative juices as a PM to figure out how it can help you and have patience to iterate and keep trying because the models that we have today can do a lot already.

**Lenny Rachitsky** (00:55:22):
Yeah. I love your example of the PM and what they did with the Discord channel. Is there anything else along those lines that either you've done to leverage some AI tool to be more productive or folks in your team have done to be more productive youth, either your product leaders or other folks?

**Tamar Yehoshua** (00:55:38):
So many examples. So one that I did really recently is I wrote a prompt in Glean to help me get the status of features. And we have a Launch Cal, and you can look at Launch Cal it'll say a date. But then is it really the date? What are the outstanding issues? So it will look at our Launch Cal and it will see if there are any open year tickets, what the Slack conversations are and the customers who are beta testing it, bring all these together to tell me, okay, launch date is this according to Launch Cal, but here are all the open issues and here are the open conversations that people are talking about. So then it can give me the confidence level of the future looking. So I can run the prompt, just put in the name of the feature. So I don't have to read all of these channels.

**Tamar Yehoshua** (00:56:28):
So this is a prompt that I built two weeks ago because we're advancing our prompting capabilities. And so I was testing it out and I was like, "Ooh, I could do this." So that's another example and engineers are using it for automating part of the incident management of I got an incident, how do I see were their previous incidents that were similar to it, where they're not. And so these are the type of things you can look at to help you. But the simplest, simplest is there's so much news. Let me just paste in all of these things and summarize them. As a product manager at Gleam, here are all the latest news. What do I have to care about? What's impacting me and potentially competitive to any of the products that I have?

**Lenny Rachitsky** (00:57:22):
And putting that into say Claude or ChatGPT you're saying.

**Tamar Yehoshua** (00:57:25):
Yeah.

**Lenny Rachitsky** (00:57:26):
Yeah. I think that beginning of the prompt is something a lot of people don't know is the power of just giving it a role like you are a product manager at Gleam. From that perspective, give me this summary versus just summarize this and that ends up being really powerful right.

**Tamar Yehoshua** (00:57:42):
A hundred percent. And you can compare what is Claude's PR saying that ... They just launched Claude Enterprise. How is Claude Enterprise different from OpenAI Enterprise? Again, you can do it yourself, but these micro improvements in your productivity help. For my newsletter, I interviewed Claire Vo who came out with ChatPRD. And so product managers are using is. We're just starting to evaluate it internally, so I haven't personally used it yet, but it's super cool and you can use ChatGPT to do a PRD. And ChatPRD, it's more templatized and more frameworks of how to do that. And again, these things are going to keep getting better.

**Lenny Rachitsky** (00:58:33):
Claire's been on the podcast, she's going to be speaking at the Lenny and Friends Summit coming up October 24th.

**Tamar Yehoshua** (00:58:37):
Oh, cool.

**Lenny Rachitsky** (00:58:38):
Yeah. A crazy stat she shared. She's making six figures off this product that she builds on the weekends ChatPRD.

**Tamar Yehoshua** (00:58:45):
So cool.

**Lenny Rachitsky** (00:58:45):
Incredible.

**Tamar Yehoshua** (00:58:46):
But it also shows what you can build with AI.

**Lenny Rachitsky** (00:58:49):
Right. It's just her. I think she just recently hired some engineers to help because she has three kids CTO at LaunchDarkly and just is building this on the side making a hundred thousand plus dollars. Incredible. I want to add a couple of things here. So one is for folks looking for ideas for how to use AI tooling for their PM job. There's a couple of posts I've written that I'll link to in the show notes just to put that out there of just a bunch of PM sharing, here's what I've done with these various tools. Another thought I'd love to get your take on. There's a lot of fear that the PM job be replaced by AI. And I've recently realized that it's the opposite. I think the PM role is the best positioned to thrive in the world of AI because if you just think about you have a tool that can just build a thing for you, just like you're staring at this blank thing that can build anything for you, which function would you think would have the best chance of asking it of what to build and how to articulate what to build best?

**Lenny Rachitsky** (00:59:47):
To me, it's clearly Product People. They're best at figuring out what to build, what matters most, where the impact's going to be what customers need. Not to say other functions don't also have the skills, but I feel like of all functions, PMs have the most of that specific skill. I'd love to get your take on that.

**Tamar Yehoshua** (01:00:01):
That. I think that AI, the one thing it's not good at is being creative. So if you're a PM who's doing the grout work, it's going to take your job away. But if you're a PM who actually is strategic and can pull the pieces together and be creative and think how you do something that it's going to differentiate. Because it's not going to give you that leak. It'll say, here's what customers are asking for, here are the problems today, but you have to figure out how to solve it. So in some ways it might weed out the good from the bad PMs. Because there are a significant number of PMs who are more just execution. And I think that part of the job hopefully will be lowered because I hope a lot more of the execution will be able to automate updating Jira and all these things that just take time and creating even little Launch Cals, which PMs have to do manually now. So hopefully a lot of that work goes away and then people can be more creative. And I think designers and PMs are going to blend because the best designers I've worked with are product thinkers and a lot of really good PMs can also design. It depends on what kind of product you're PMing for. So I agree with the caveat that it will become harder to be a great PM.

**Lenny Rachitsky** (01:01:20):
Wait, say more about that. It'll be harder to be a great PM because many PMs are doing things that are mostly project management and that's the stuff that-

**Tamar Yehoshua** (01:01:30):
Yeah. Let me rephrase. It's not going to be harder to be a great PM, but to be a PM, the not so good PMs jobs will go away. The great PMs will still have great jobs.

**Lenny Rachitsky** (01:01:40):
Yeah. I totally hear you. So in a sense there might be fewer. You might need fewer PMs, but I think that applies in theory to every function. Fewer engineers. Fewer designers.

**Tamar Yehoshua** (01:01:49):
I don't think you'll need fewer. I think you'll be able to do more things. Think about every company. Our head of sales came to me the other day, "You need to hire more engineers because we just have so many things we need to build." I'm like, "When have you ever worked in a company where you thought that you didn't need more engineers?" You always want people to build more stuff. So I don't think you're going to need fewer. I think you're just going to get so much more done.

**Lenny Rachitsky** (01:02:16):
A lot of people are building AI into their product. Glean is obviously an example which integrates LLMs, which innately are non-deterministic and hard to know if they're going to provide anything good. Sometimes something really dumb comes out. Do you have any advice on working with these very complicated systems that don't necessarily ... You can't control and building them into your products? Anything you've learned that might be helpful?

**Tamar Yehoshua** (01:02:41):
My first week at Glean was eye-opening in learning some of these things. But let me first just explain what Glean does for people who may not know. So Glean was started as enterprise search. Glean reads content of all your SaaS apps. So it reads the content from Microsoft, Google, Slack, Salesforce, Jira, like any SaaS tool that you use, it indexes it and enables you to search. So it started as just enterprise search and using AI. So it was an AI search using BERT models and using vector embeddings in 2019. Because the early engineers at Glean came from Google and Google created BERT to enhance search. And so it was obvious that they would be using ML techniques for search. Then GPT3 came along and added a natural language interface, a chat interface. You can ask the question in actual language and get an answer, and it basically is a knowledge graph of your organization. So you can ask any question. Think of ChatGPT for your enterprise. Ask any question about your enterprise.

**Tamar Yehoshua** (01:03:45):
So people understand search because they understand Google and you put in a query and then you refine it. But chat interfaces, people still don't really know how to use. If you look at the stats from ChatGPT, from what I understand, the retention is fairly low. People use it, they play with it, and then they don't get back to it because it's not in their workflow and they have a hard time figuring out what they can and can't do for it. When I got to Glean the first week I met with the assistant quality team and one of the biggest issues they have is people trying to use Glean for things that there's no way it could know. Like what should my top priority be next week when we don't even know what your priorities are. But then there's golden cases that are just amazing.

**Tamar Yehoshua** (01:04:44):
The example of refining queries and searched years for people to understand how to do. And it took a lot of features of auto complete and refinements at the bottom of the page. So we need to build in those things, guardrails to help with the change. To help suggest, oh, Lenny, here's what you could do. Here's a prompt to find out the status of your feature that Tamar built. So how do you give people guardrails so that they understand what is going to work and what isn't going to work? Because this whole, I don't know what I can ask. And then on top of that, the non-deterministic. An enterprise CIO will go use ChatGPT on the weekends, but they come to work and they expect their software to be deterministic. So how do you help educate users about that?

**Tamar Yehoshua** (01:05:34):
And then the other thing I'll say about using LLMs is the industry is transforming so rapidly that you need to make sure that your product gets better as the LLMs get better. And that too many people are building things to make up and compensate for the LLMs that all that work is going to go away. So it's okay to do it to understand that it's going to go away, but that can't be your differentiator. You have to understand that your differentiator is something that will continue to be there as the LLMs get better and smarter.

**Lenny Rachitsky** (01:06:13):
And as part of that, because the LLMs get so much smarter, everyone else will become awesome. And to keep up, you need something that is actually outside of the LLM that continues to differentiate you and is better than what other people are doing.

**Tamar Yehoshua** (01:06:24):
Well, yeah. That your whole product gets better as the LLMs get better.

**Lenny Rachitsky** (01:06:27):
That makes sense.

**Tamar Yehoshua** (01:06:30):
It's a frame of a of mind of how you approach the value add you're having.

**Lenny Rachitsky** (01:06:37):
Awesome. Tamar, to close out our conversation, is there anything else that we did not cover that you think is important to share or you think might be helpful to leave listeners with before we get to our very exciting lightning round?

**Tamar Yehoshua** (01:06:51):
I in my decades of working in tech, have never been working in an environment that's moving so quickly and it's really exciting. It's super energizing and it's also scary. But you have to change how you're working. You have to change how you're working so that you can keep up because it's going to be an interesting decade ahead with all these new tools that are coming out. And staying ahead will be hard, but it's also, there's so much I think richness and opportunity here. So I advise people to get in the thick of it and try it out because you'll be surprised at how many products we can build.

**Lenny Rachitsky** (01:07:37):
I love that. I can't help but drill in one level deeper. Is there anything you found to help you stay ahead and help you stay aware of what's happening? Are there newsletters you find useful? Chat, podcasts that just help you keep up to date on where things are going? Is it like a person you look to like, "Hey, what's new?"

**Tamar Yehoshua** (01:07:56):
There are definitely AI newsletters that I look at. There's AI podcasts that I listen to. I now have a commute, so in some ways that's good because I get to keep up on the AI podcasts. So I just try and listen. I'm trying to build some prompts for myself to make it easier to say ... Take in ... I haven't perfected this, but the ChatGPT voice mode where you can load it. Somebody who I just hired it at Glean was saying he does this. He loads up stuff before his commute and then he'll be like summarize these articles and then he can ask questions to it. So I need to up my game there. But I definitely have a list of Ben's Bites and The Neuron. Those are good summaries and I like Gil and Sarah Guo's podcast. I listen to Cognitive Revolution. There's too many of them right now, but I pick and choose.

**Lenny Rachitsky** (01:08:51):
Awesome. Okay. We'll link to those ones you just mentioned in the show notes. We'll have Gil and Sarah Guo's podcast, it's called No Priors. I was actually just listening to it on the way here. Sarah is going to also be at Lenny's and Friends Summit. She's going to be moderating a panel between Kevin Weil and Mikey Krieger who are the CPOs of Anthropic and Open AI. So there we go. Another quick plug for lennyandfriendssummit.com. I think it's lennyssummit.com.

**Tamar Yehoshua** (01:09:15):
Awesome.

**Lenny Rachitsky** (01:09:17):
With that Tamar we've reached our very exciting lightning round. Are you ready?

**Tamar Yehoshua** (01:09:21):
I am ready.

**Lenny Rachitsky** (01:09:23):
Okay, let's do this. First question, what are two or three books that you have recommended most to other people?

**Tamar Yehoshua** (01:09:29):
So one book was recommended to me by Shashir, the CEO of Cota. When I started at Slack, he recommended the book Switch: How to Change Things When Change Is Hard by Chip and Dan Heath. And it's such a good book. And it's about how do you set a path for people to follow. It's the whole elephant and the rider. So setting the path but yet motivating people to go down the path. And I read it. We had an all hands about ... I don't even remember the topic. It was something that we were like all up in arms about that we had to do. And I had just read the book and after the all hands I went up to store it and I'm like, "You did that all wrong. You need to read this book. That is not how to get people motivated." And he read the book and he's like, "You're right." So it just changes how you think in organizations to affect change. So that's on the organizational leadership. And one book I really liked was a Team of Rivals. It's a book about Lincoln and putting together his cabinet during the Civil War. One, I just learned a lot about the Civil War that I didn't really know. And it's about, again, a book about leadership and it is fascinating.

**Lenny Rachitsky** (01:10:52):
I don't think anyone's recommended either of these. So love them. Next question, do you have a favorite recent movie or TV show you really enjoyed?

**Tamar Yehoshua** (01:11:00):
I don't know if you like British murder mysteries.

**Lenny Rachitsky** (01:11:06):
I don't know either.

**Tamar Yehoshua** (01:11:07):
It's a niche thing, but there's a guy named Anthony Horowitz and the latest series he did was called Magpie Murders. And it's just an intricate story so I enjoyed it.

**Lenny Rachitsky** (01:11:20):
Very niche but amazing. Do you have a favorite product you've recently discovered that you really like?

**Tamar Yehoshua** (01:11:26):
Well, I'm going to give two. One is tech and one is non-tech. So non-tech I really like dark chocolate.

**Lenny Rachitsky** (01:11:35):
Actually just like a dark chocolate bar.

**Tamar Yehoshua** (01:11:38):
A really good dark chocolate that's simple. Like no frills, none of this. Just dark chocolate. And I discovered this chocolate called Bisou chocolate. It's a guy in Oakland who makes it himself. Super niche. He was selling at the farmer's market. And it's just like if you want like a simple play, no nuts, no anything just-

**Lenny Rachitsky** (01:12:02):
No sea salt.

**Tamar Yehoshua** (01:12:03):
Great pride in the beans he resources them from.

**Lenny Rachitsky** (01:12:05):
Wow. It's called Bisou with a B?

**Tamar Yehoshua** (01:12:08):
Yeah. Bisou as in Kiss in French. And then on the tech side, the honest answer is Glean. I was listening to your podcast with Nikita who said that people over 22 don't use new products except at work. And that stuck with me. The new products I usually use are at work and I use Glean 10, 15 times a day. I use it so much and it changed the way I onboarded. It changed the way I work. Even the simplest questions, you don't bother people, you don't interrupt people on Slack. You're like, "What's the latest status with this deal? What's the last time we talked to them?" I meet somebody at a conference and I can quickly say, "Have we ever talked to this company before?" And I can just get an answer. Or without asking an engineer, "Where's the latest design doc?" It has really transformed how I work. So I know it's cheating in that it's the product I work on, but it's the actual honest answer.

**Lenny Rachitsky** (01:13:10):
And for folks that haven't heard of Glean, it's one of the most successful B2B AI companies out there. It's like a very large successful business and company that if you haven't checked it out, you should definitely check it out.

**Tamar Yehoshua** (01:13:24):
As our investors say, it's one of the AI companies that's actually making money.

**Lenny Rachitsky** (01:13:29):
Very few of those. Awesome. Two more questions. Do you have a favorite life motto that you often come back to, repeat yourself, share with friends or family and work or in life?

**Tamar Yehoshua** (01:13:41):
I have one that my father told me when I was being really indecisive about what college to go to. He was really bored of the conversation and he said, "There are no right decisions. You make a decision right." And it is so true. Because you never know what's going to happen in life. You just have to commit to whatever you're doing and have no regrets about it. You can't be like, "Oh," 10 years later, "what if I had taken that job over there?" It's like you make your success based on how you approach the decisions that you've made.

**Lenny Rachitsky** (01:14:18):
So if you feel regret about something, this is a good one to pull out of just I will make this the best I can make it, and that's all the best I can do.

**Tamar Yehoshua** (01:14:27):
You can move forward.

**Lenny Rachitsky** (01:14:29):
Move forward. I love that. Last question, I know you're a parent. I'm a new parent. I have a 14-month old at this point. Is there a piece of parenting advice that you learned early on that you think might be helpful to me or folks that are new parents or something you've just learned yourself that you think might be helpful?

**Tamar Yehoshua** (01:14:46):
14 months. I think the best parenting book I read besides the How to Talk So Your Kids Will Listen & How to Listen so Your Kid Will Talk is, I think it's called Healthy Sleep Habits, Happy Baby. We are much happier when we sleep well. We perform better at work when we sleep well. Children need to sleep. So making sure that they sleep well. And sometimes that's like, I did the whole sleep training, cry until you fall asleep and my kids still speak to me. So it was okay. That is the basic things. Make sure that their basic needs are met and then as they grow up, share your life with them. So a piece of advice I was given was analogous to Talk so your Kids Will Listen is when they had come home from school. You can't just say, "How was your day?" Say, "You know what? I did a podcast with this person and it was super interesting because they talked about this or that." Or, "I'm massively screwed up and I should have asked them this or that." And they'll be like, "Oh my God, I was at school today and this is what happened." If you share your life with them, they will share their life with you.

**Lenny Rachitsky** (01:16:02):
Such good advice. I really appreciate it. Tamar, thank you so much for being here. You're awesome. We got through so much great stuff. Everything I was hoping we get through. Two final questions. Where can folks find you if they want to read up on more stuff that you share and just follow you online and how can listeners be useful to you?

**Tamar Yehoshua** (01:16:19):
Find me on LinkedIn and I have a subject called Practical Intelligence where I've been interviewing practitioners who are working with AI. It was my way of learning. I started when I was a VC. Trying to continue doing it. And how can I be helpful if you are a customer of Glean, I'd love to know what you think, what works and what does more.

**Lenny Rachitsky** (01:16:40):
What's the best way to share that with you? Is it like messaging on LinkedIn, subscribe to Substack?

**Tamar Yehoshua** (01:16:45):
Message on LinkedIn, or comment on your-

**Lenny Rachitsky** (01:16:49):
On [inaudible 01:16:50]. Yeah.

**Tamar Yehoshua** (01:16:51):
Yeah. Those would probably be the two ways.

**Lenny Rachitsky** (01:16:53):
Awesome. Tamar, thank you so much for being here.

**Tamar Yehoshua** (01:16:56):
Thank you for having me.

**Lenny Rachitsky** (01:16:57):
Bye, everyone.

**Lenny Rachitsky** (01:17:01):
Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [16/16] How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge)

**Benjamin Lauzier** (00:00:00):
I think when you're running a marketplace, you tend to sit in your ivory tower a little bit, looking at stats and thinking like, "If only we could get people to do X, it'd be better for everyone." I certainly did that in my career. I think that's missing the point that we're humans, and I think sometimes we act in ways that are non-deterministic or counterintuitive. But my take is I'm a huge believer in market forces and empowerment, so provide guardrails for what a good experience is in your marketplace, set a clear bar for quality, and provide the right coaching and tools for supply to be successful, and then take a step back and see where the gaps are and invest more in hands-on tactics just to close those gaps more specifically.

**Lenny Rachitsky** (00:00:47):
Today my guest is Ben Lauzier. Ben was VP of product and growth at Thumbtack, where he rebuilt the product team and Thumbtack's growth strategy, re-architected the revenue model, and helped 3X Thumbtack's growth within three years. Prior to Thumbtack, Ben was at Lyft for over six years, where he was employee number 30 and led product and growth for the driver's side of the business, and at one point reached 1% of U.S. workers driving for Lyft every month. He currently spends his time advising marketplace teams and founders, teaching a reforged course on marketplace growth, and most recently started a healthcare company called Nurra that connects you to a care advocate to help you navigate the healthcare system in the U.S. In our conversation, we go many layers deep on the many key elements of building and scaling a marketplace business, including what to focus on pre-product market fit, how to know which side of the marketplace to prioritize, what product market fit looks like, how to track liquidity, what causes most marketplaces to fail and how to avoid that.

**Benjamin Lauzier** (00:02:29):
Thank you so much, so good to be here. Thanks for having me.

**Lenny Rachitsky** (00:02:32):
It's absolutely my pleasure. Okay, so you are one of the most knowledgeable and experienced product leaders in the world on building and scaling a marketplace company, and so I want to spend the bulk of our time talking about and essentially extracting as much wisdom out of your brain on how to build and scale a marketplace business so that founders and teams that are struggling with building their marketplace company, or just thinking about building a marketplace business, can save a lot of time and a lot of pain. How does that sound to you?

**Benjamin Lauzier** (00:03:03):
That sounds amazing. That's a high bar, but I will try to live up to your expectations.

**Lenny Rachitsky** (00:03:08):
I'm confident we will hit that bar. Let me start with just setting a little context, and for folks that aren't super familiar with what is a marketplace business, they hear this term marketplace company, what's the simplest way to understand what makes a company a marketplace company and a marketplace business?

**Benjamin Lauzier** (00:03:24):
I mean, like you mentioned, I love marketplaces. I think I've been building and scaling marketplaces for I think almost 15 years now, and I feel like they add just such a fascinating dimension to the challenge that we work on as PMs, and it's this hidden dimension that you uncover when you work on marketplaces. And I think on paper what makes a marketplace is pretty straightforward, it's two or more sides that are distinct from one another, and they provide value to each other, and then you have an intermediary trying to facilitate that exchange of value in the middle. So, that's pretty simple explanation. I think in practice it's always a little bit more nuanced on the fringes. You have all those interesting dimensions, like how involved is the intermediary defines how managed the marketplace is. So, something like Craigslist is super hands-off, unmanaged, and something like Lyft starts to be more into the semi-managed where the platform significantly shapes the transaction in this exchange of value. So, I think that's how I see it, but there's all those fascinating variations of marketplaces, I guess.

**Lenny Rachitsky** (00:04:25):
**Benjamin Lauzier** (00:07:12):
Totally. Yes, yes. And I think again, you have companies that claim to be managed marketplaces, I think depending on how you want to look, with investors perhaps, you'll pick one angle or the other, but that's where you get into gray waters. But yeah, the marketplace implies this concept of two independent and supposedly autonomous parties that you help connect and provide this exchange of value for them.

**Lenny Rachitsky** (00:07:40):
Awesome. Okay, so let's come back to that, because that's a really important topic and it's something that every marketplace trends towards or thinks about is just like we're going to control the supply, we're going to manage it, we're going to maybe own it in the future, but let's get back to that. So, you work with a ton of marketplaces, you've built a bunch of marketplaces. What do you find is the biggest struggle to building a successful marketplace business? The most common problem people run into.

**Benjamin Lauzier** (00:08:05):
I think there's two types of challenges, I guess there's when you're talking about creating a marketplace, and then there's when you're talking about scaling a marketplace. For creating a marketplace, I see many founders that are pre-product market fit, super eager to nerd out on marketplace dynamics. They're super excited to launch a marketplace, we all are, and they want to talk about supply and demand, they want to look at all kinds of ratios. They show me economic papers and ask, "How could we apply this principle to my company?" And here, my advice is generally always, "If you don't have product market fit, and if you don't have a good enough growth strategy for at least one side of your marketplace, just forget about all this marketplace stuff."

**Benjamin Lauzier** (00:08:46):
Focus on this core exchange of value, go deep with one side of the marketplace and see if you can rely on some crutch, some hack for the other side for time being. And you see companies like Airbnb and Thumbtack doing this with Craigslist pretty early on to jumpstart their growth as just countless examples, but don't get distracted by this shiny and cool intellectually challenging idea of working on the marketplace, and nail the basics of your product market fit at first.

**Lenny Rachitsky** (00:09:13):
So, just to spend a little more time there to make this even more real. So, you're saying that pre-product market fit, before you find that anyone really wants what you're building, focus on figuring out a way to grow one side of the marketplace. So, maybe just two quick follow up questions. How do you know which side to focus on initially? And can you give an example, I think Thumbtack may be a good example of this, of how they did that?

**Benjamin Lauzier** (00:09:38):
Which side to focus on is there's different approaches to this, but generally people will pick the hardest side. And so, I'll take the example of Thumbtack, because we're going to talk about it. So, Thumbtack is a home services marketplace to help you find plumbers, electricians, and the harder side there was demand. There's supply, and you can look for, you can open the yellow pages, you can find plumbers somewhere, but the hardest question was can we go out there and can we find people who want to do something in their house, who have projects that need to be done? What is the core growth strategy for us to acquire those people, to find them? And what kind of retention can we create? Can we create a delightful experience for them to come back to our platform and want us to take care of their home for them?

**Benjamin Lauzier** (00:10:32):
Pick the hardest side is my advice. And then, how some companies do this, again, I think there's a lot of different ways to do this, but a common advice is find a way to jumpstart one side. Find a way to hack one side, play one player mode is what it's also called sometimes, but try to find a way to tap into existing channels that have one side of your marketplace already latent. And so again, you have countless businesses that if you've been built off of Craigslist, I think Thumbtack was partially one of them, and the idea was like, "Hey, we can find all those great pros on Thumbtack. When we have someone who wants a job, 'Oh, you want your kitchen remodeled?' We can, behind the scenes, go and post a job on Craigslist and then we'll bring on all the contractors who are browsing Craigslist looking for jobs, we'll bring them to our platform." 

**Benjamin Lauzier** (00:11:26):
That's an example of how that you worry about the core value proposition of can we get people to come back to the platform? Can we create this delightful exchange of value? Are people trusting us? Do we have the right checks in place to make sure that you are hiring the right person? What will make you come back? And once that's done, then you can focus around how do I build a flywheel on the supply side, and how do I manage and how do I make sure I have enough plumbers per market, or something like that.

**Lenny Rachitsky** (00:11:53):
When you say find the hard side, how do you find that? Any advice you can give founders and teams?

**Benjamin Lauzier** (00:11:58):
In general, I would say intuitively the teams know, especially the teams are in the weeds, they know. They know, "Well, yeah, we can get X. But what we really struggle with is getting students to look at this." That's your sign. And I think sometimes it takes someone else to make you think about it, to reflect like, "Actually, yes, you're right. This side is obvious. We know how to get it, we just don't have the right supply for it and we don't know where to find the supply." Boom, that's the side that you should be focused on. Then you find a way to add source to demand, subsidize it, find some other way, and focus on this side that you have no idea how to grow. You should have a reliable growth strategy for the side.

**Lenny Rachitsky** (00:12:39):
In my experience, it's almost always the supply side is what you need to work on, because once you have awesome supply, people are going to be really excited to tap it. Like Uber drivers, Airbnb homes, professionals on Thumbtack. Is that your experience too?

**Benjamin Lauzier** (00:12:54):
Yes. I would say supply is the hardest side maybe like 80% to 90% of the time. Yeah, I totally agree. I was trying to think of counter examples, but I can't think of one. I just know that there are.

**Lenny Rachitsky** (00:13:05):
There's one I know, which is Rover, based on research I did, because it turned out it was really easy to find people who want to walk dogs and watch dogs for 50 bucks an hour or whatever. It was a very easy value prop, and so they had a waitlist, they had just so many people. Also, TaskRabbit is the one I know about where they had so many people wanting to be taskers, whatever they call them-

**Benjamin Lauzier** (00:13:24):
I was going to mention TaskRabbit as well. I heard of that as well, yeah.

**Lenny Rachitsky** (00:13:27):
Okay. And then you talked about there's a core part of figuring out how to grow that part, how to grow the hard part, generally the supply side. You shared a couple examples. Are there any more clever things you recall that you might be able to share of just ways people grew supply early on that could inspire people that are trying to figure this out right now?

**Benjamin Lauzier** (00:13:46):
Yeah, I think there's a couple of common tactics I would say pretty early on that I think companies rely on. So, we've talked about jump-starting one side of the marketplace with, it may be with Thumbtack and Lyft, also leverage job boards. You have also a lot of companies building value added services pretty early on as a core way of retaining supply pretty early on. Like let's build a really compelling basket of value for this supply, and this is going to be the thing that appeals everyone. So, OpenTable did this really well with all the restaurant services, other things that I've seen people use really well early on or converting your supply into demand or demand into supply pretty early on, so Lyft, we tried that. It actually didn't work at Lyft, but I know other marketplaces have been pretty successful with that.

**Lenny Rachitsky** (00:14:44):
Just to make sure people understand that one, it's a really interesting one is, in the Lyft example would be convincing drivers to become riders, convincing riders to become drivers, and mostly the latter, convincing riders to become drivers.

**Benjamin Lauzier** (00:14:55):
Yeah, exactly. In our case at Lyft early on, we had a waitlist on the demand side because we just couldn't onboard enough supply. And so, we had this idea of having a pop-up. Instead of saying no drivers available, it would be like, "Hey, sorry, all the drivers are taken. People are making 50 bucks an hour right now, do you want to hop on your car and drive?" And we had some conversions, but it felt a little distracting to the overall experience and it wasn't a huge driver of supply. But I know that for Uber it actually was. I think they had a relatively meaningful amount of supply coming from [inaudible 00:15:27]

**Lenny Rachitsky** (00:15:27):
Wow, how does that make you feel that Uber figured out a better way to approach this and made it work? That doesn't feel-

**Benjamin Lauzier** (00:15:33):
And it's a different audience. You would think that the Lyft passenger and driver is more likely to flip back and forth between the two. I don't know, I don't know. [inaudible 00:15:47]

**Lenny Rachitsky** (00:15:46):
Yeah, a PM at Uber outdid you guys. Oh, no. 

**Benjamin Lauzier** (00:15:50):
Yes, on a couple of other things. 

**Lenny Rachitsky** (00:15:52):
Interesting. 

**Benjamin Lauzier** (00:15:52):
And we outdid them on a few other things [inaudible 00:15:55]

**Lenny Rachitsky** (00:15:54):
Okay, okay. That's right. So, essentially what we've been spending some time on here is just when you're starting a marketplace, figure out which side you need to drive, because that's what will unlock this opportunity. There's a hard thing that nobody's ever done before, and most of the time it's build a bunch of supply that nobody has done before, and there's all these tactics to do that. And all of this is, as you coming back to the main question I asked, we've gone on this awesome tangent, is pre-product market fit before you even know this is a thing. Spend time most of the time building supply to see if demand, customers actually want this thing. Right?

**Benjamin Lauzier** (00:16:34):
Exactly. And then I think there's a different set of challenges. The other pitfall that I see is, so pre-product market fit, people tend to be distracted by those marketplace dynamics like we talked about instead of doing what we just talked about. For companies that have some sort of scale and product market fit, to me the place where I see people getting tripped up most often is the concept of marketplace liquidity or how to match the health of a marketplace. To me, liquidity is how marketplaces win. It's this measure of your ability to match buyers and sellers efficiently, it's how quickly and efficiently people can find what they're looking for on your platform. So, you can picture a Venn diagram. One circle is this is what supply wants to sell, and another circle is this is what demand wants to buy, and your liquidity is the overlap between those two circles.

**Benjamin Lauzier** (00:17:26):
So for, let's take the example of Lyft or Uber, because we talked about them. It might be for all the people who open the app with the intention to book a ride, how many of those actually turn into a ride? And this metric liquidity, it's a direct multiplier on the efficiency of your marketplace. It's literally at the center of your vision, it's why you exist as a marketplace is to connect the two. And it's also the ultimate engagement loop. The more supply you have, the more choice people have, the better the services, the more likely it is that it turns into a transaction and the more likely it is that they come back. And so, it's really this incredible circle. And what I see is people missing how critical this component is in the marketplace, struggle to define it for the business, and most importantly struggle to build an actionable playbook against it. Like, "Okay, how do I manage this? Okay, it's important, but what do I do about it?" Basically.

**Lenny Rachitsky** (00:18:21):
Is there a metric you recommend people specifically look at to understand liquidity?

**Benjamin Lauzier** (00:18:26):
I think the metric that I like the most is a predictor of liquidity. So your liquidity might be, it's typically a measure of demand utilization. It might be looking for something on there, maybe how many of those searches with intent actually turn into a transaction. So, it's your field rate of your intentful demand typically, and that's really indicative of the net output of your marketplace. And so, that gives you a sense of the health of your marketplace, but it can be influenced by a whole bunch of different factors. So, if you think about for Thumbtack, it can be influenced by if there's a snowstorm out there, if the competition is bidding, there's a whole bunch of exogenous factors that come into play. And the metric that I think is slightly more actionable is a little harder to define, but so much more helpful in my opinion.

**Benjamin Lauzier** (00:19:19):
It's what I call a market health metric, and this is basically think of your proxy that is the best predictor of your liquidity. So, I'll use the example of Lyft. You have your liquidity is your demand utilization, it's how many app opens turn into a ride, and what predicts this? What will predict you and deciding to book a ride? For Lyft and for Uber, it was ETAs. So, we knew that if the closest driver was at least two minutes away from you or closer, then we had hit a ceiling, you were more than X person likely to convert and book a ride. If it's more than two minutes, if it's five, then maybe you check at Uber, maybe you walk, maybe you take the bus. If it's two minutes, it doesn't make a big enough difference, you're just going to book the ride anyway.

**Benjamin Lauzier** (00:20:06):
So find this threshold, find this predictor that tends to plateau that correlates strongly with retention but with also the transaction happening, and that's the metric that you can predict. That's a metric that's so much more actionable for teams to work against. If you're a supply team now you can think of, "Okay, I'm adding 100 supplies into the platform. I want to know if it's actually reducing ETAs in this case," or I can look at correlations like this and limiting some of the effect of those exhaustive factors that I mentioned.

**Lenny Rachitsky** (00:20:38):
Awesome. So, essentially watch fill rate is the term used that a lot of people love, which is just people with intent converting. So, the Airbnb example is exactly the way we did Airbnb is we looked at people that are searching with dates as intentful users, and then how many of them convert to a booking. So, that's basically what you're trying to get to, and your point here is that's kind of the output metric. That's what you want to move, but in order to move it, there's something that is the biggest lever to moving fill rate. And in your experience, and I've seen this exact same thing, it's usually amount of supply. Do you have enough good supply? And so, in the case of Lyft is do you have enough cars? Do you have enough homes, do you have enough plumbers on Thumbtack? And that's usually where you can actually impact fill rate. Sweet. 

**Benjamin Lauzier** (00:21:25):
Yeah, exactly.

**Lenny Rachitsky** (00:21:26):
And that becomes the goal of the team, that becomes the focus of the company, basically drive that up in all the little markets you're in and all the categories you're in.

**Benjamin Lauzier** (00:21:34):
Exactly. Yeah, completely.

**Lenny Rachitsky** (00:21:36):
Awesome. You mentioned this idea of product market fit and the things change, pre-product market fit, post-product market fit. Classic question, I'm curious if you have any insights here, just what tells you that you've climbed that hill of product market fit, that you might have product market fit, or you definitely have product market fit in a marketplace?

**Benjamin Lauzier** (00:21:55):
It's hard because to me, the two are most independent. Maybe this is a hot take, but I feel like product market fit is independent of your marketplace dynamics. You might have a great product, and it provides amazing value to both sides, but you have yet to crack the flywheel on the supply side for how to bring those people. You don't have the right product channel fit, for example. And so, this will have a massive impact on the dynamics of your marketplace. And so, to me, my answer would tend to be pretty classical, it would be like measure your product market fit the way you would for a normal company. So yeah, it's a bit of an art more than the science, but I like the classic if we were to take this product away, what percentage of users would be significantly disappointed or have no other solution?

**Benjamin Lauzier** (00:22:50):
So, questions like this I think go to the heart of how valuable is your solution to users, and you can do this on the supply side and the demand side. I think here my advice is typically to consider that you have two product market fits essentially. You want to make sure that you have a compelling enough value proposition on both sides of the marketplace, and very often at the beginning you find product market fit on the demand side, but you realize it's not compelling enough for your suppliers because your margins are too high or something like that. So, realizing that you have both those things, but I think you can measure them in a way that's relatively traditional, and that's independent of marketplace dynamics.

**Lenny Rachitsky** (00:23:27):
I love that. We actually just had Sean Ellis on the podcast talking about that exact survey, the Sean Ellis test of asking people how disappointed would you be if they left, if the product didn't exist. And I just love that you keep coming back to this point that I 100% agree with, that most of the challenges you have with a marketplace business, 90% are the same challenges you'll have with a non-marketplace business. And people over-focus on, "Oh, I need to think of this like a marketplace, and all the marketplace science behind all this stuff." And really it's all the same stuff every founder is dealing with product market fit, except you have two sides of it growth strategy, but you have two sides of it. So, I love that you keep going back to that. 

**Lenny Rachitsky** (00:24:10):
Something that I definitely want to touch on is when people are thinking about starting a marketplace company, what are signals that a marketplace is a good model for the idea? Because I think a lot of people come into and be like, "I want to build a marketplace. Oh, I'm going to connect these two sides. It's going to be great," and there's no marketplace in this business, in this vertical. What are signs that marketplace dynamic and a business model is right for an idea versus no, it's not?

**Benjamin Lauzier** (00:24:40):
No one ever say like, "Oh, I'm going to build Airbnb for X," it's not something that people say. I think the signs that come to mind are one, higher fragmentation. I think you want this long tail of buyers and sellers without a handful of big players controlling the market, because this is where you can provide value by doing this job of aggregation. I think you also want a relatively uniform set of needs. That means that it can be, like your supply can be commoditized to some extent. This is what's so tricky, by the way, about services, service marketplaces like Thumbtack, because unlike eBay, where sellers, they just want to sell very clear and distinct inventory, on Thumbtack you have electricians who only want certain types of jobs, but they only want it if they're available that day. And they might take a job and cancel it because something better comes up.

**Benjamin Lauzier** (00:25:34):
And so, this makes for a very fuzzy definition of supply, and you have very different set of needs. One electrician wants something, the other one has a very different perception of the same unit of demand, and that makes it very, very difficult. So, it's feasible, but I would say that is not a compelling attribute for building a marketplace. So, a relatively uniform set of needs. And the last one I'd mention is a high enough bearer in the matchmaking or the creation. I think how hard it is for people to find each other today, and how much effort do they have to put in to vet each other, I think is another great sign. The higher it is, the bigger the opportunity because it means you come in, implement the right processes to simplify this exchange of value.

**Lenny Rachitsky** (00:26:24):
Awesome. I'd love to know if there's any examples you can think of, of bad marketplace ideas that people have tried, but I'll summarize the three points you just made, which I love. So, these are signs that this is a great opportunity for marketplace business, that there's a lot of fragmentation on both sides. There's not just a small number of companies or customers on one side or the other, because if there are, why do they need you? There's five airlines or whatever, you don't need a marketplace to match with an airline. Then two is there's uniform needs, the needs are basically consistent. I just want to stay in a home, I want a car to take me somewhere, I want a plumber.

**Lenny Rachitsky** (00:27:04):
And then there's a barrier, there's complexity to the matchmaking and helping someone book the thing, work with them. Finding a car, I imagine is like, I'm not going to just flag down a car. There's challenge there. I'm not going to just go and ask someone, "Can I stay in your home?" There's challenges there.

**Benjamin Lauzier** (00:27:19):
Exactly. 

**Lenny Rachitsky** (00:27:20):
Awesome. Are there any examples of companies you've seen that are just like, that will never work as a marketplace, or here's a funny example of a marketplace that tried to be a marketplace and it's not ...

**Benjamin Lauzier** (00:27:29):
I don't have a great example of that, but I can give you a tangentially related example of a marketplace that I don't want to throw anyone under the bus. I respect the company and the effort, but Sidecar at the time was another ride-sharing company competing with Lyft and Uber, and there's, I'm sure a whole bunch of lessons there. They ended up closing, but I think one really interesting direction that they took pretty early on to differentiate themselves was, in my mind perhaps very naively a mistake, they decided to give complete control to the user where as a user you had a whole bunch of filters. You could decide, "I want a car that's at least 2015 or newer. I want a driver that's at least this or newer." And so, I think the theory was reasonable on paper. It was like, "Hey, let's give people more control over it."

**Benjamin Lauzier** (00:28:29):
But you have those other players out there, you have Lyft and Uber, and people feel forced in this standardized experience, "We're going to compete by giving you the choice, you get to decide the experience that you want." I think in reality, it just fragments your marketplace even further, and you have this hyper fragmentation in your marketplace, and I think it hurt their SLAs quite drastically. If you think about the ETA, when you ask explicitly you're like, "Yeah, sure, I want a newer car," and you slide it to 2020 not realizing that you just lost 10 minutes because now we had a great driver, but they have a Honda Civic from 2018, and it's not the special that you wanted. 

**Benjamin Lauzier** (00:29:08):
So, I think people who build marketplaces tend to want to give a lot of control to the users because this is what users want, or this is what comes up oftentimes in user feedback like, "Oh, we have those two distinct group of users. Those ones, they really want new cars. Those ones, they don't want new cars." And so, naturally you have a product team that builds the toggle to get the new cars, and I think the mistake is that you unknowingly fragment your supply in a way that has a much more meaningful impact on the health of your marketplace than you suspect. 

**Lenny Rachitsky** (00:29:43):
I think this is another awesome example of don't over listen to users and do what you think is going to be best for the business, and this is not even a marketplace lesson. It's just generally you don't want to give users more options than they will need to be successful and happy. And I think Sidecar did that because they were trying to differentiate from Lyft and Uber, like, "What can we do differently?" And they're like, "Oh, let's give people all these options." I think they even let drivers choose the price that they're offering their ride at, which made it extra complicated. They're like, "Oh my God, all these cars at different prices," but I respect their attempt because they were just the third wheel, no pun intended.

**Benjamin Lauzier** (00:30:21):
Ironically, it's almost the opposite advice that I usually give to companies who struggle with market health, it's if you have different verticals, try if possible to open up your supply walls. Your user is telling you like X, but try to give them something that is tangential to what you think they want, because odds are that they are actually fine with it. There's this amazing example from Thumbtack, it's the smoke machine example. So Thumbtack, now they specialize a little bit more in home services, but a few years ago they were also doing a lot of events. So, you had DJs, you had photographers, and a lot of people were hiring for wedding DJs on the platform. And one of the checkboxes was a smoke machine, and it turns out a lot of people are checking this. You're like, "Yeah, hell yeah, I want a smoke machine at my wedding."

**Benjamin Lauzier** (00:31:14):
And unknowingly to them, obviously, only 5% of our DJs had a smoke machine, and so you would carve out 95% of our supply. And if when we talked to users, they were like, "Oh, no, no, I don't care that much about the smoke machine. I didn't realize that this was automatically going to remove half of the supply." And so, work on ways to make this checkbox affect the ranking but not the actual filtering is a great example of how you can listen to your users and tweak the experience, but simplify their cognitive load by knowing like, "Hey, we know you prefer a smoke machine, but we're intelligent enough to know it's probably not a deal breaker for you."

**Lenny Rachitsky** (00:31:54):
I love that example. The other thing that I think is important to talk about briefly is when you're thinking about building a marketplace, a lot of times they fail because the business model just doesn't work. I think about a company like Cherry that tried to do Uber for car washes, and in theory there's a smart idea of I'm going to just do on-demand car wash. The problem is no one's going to pay what it costs to do that, to a car wash person shows up and washes your car. I think cleaning is another example. There's also just like going-

**Benjamin Lauzier** (00:32:26):
Exec is another one that comes to mind.

**Lenny Rachitsky** (00:32:27):
Oh Exec, yeah, where it's just like someone come does stuff for you.

**Benjamin Lauzier** (00:32:32):
Something, yeah. 

**Lenny Rachitsky** (00:32:32):
Yeah. And so I guess, is there anything you want to add there? Just like this is another reason your marketplace might fail? And maybe just let me expand on this question. Just what are the most common reasons marketplaces fail in your experience? And I think it's important to say most marketplace ideas fail, just like most startup ideas fail.

**Benjamin Lauzier** (00:32:49):
Yeah, most ideas period fail, I think. Yes. 

**Lenny Rachitsky** (00:32:51):
Most ideas period fail, same. Coming back to most of the things you're going to struggle with are the same things that every company struggles with outside of marketplace. So, let me just ask, is maybe specifically within marketplaces or even just broadly, what are the biggest reasons that marketplaces fail?

**Benjamin Lauzier** (00:33:06):
I think a few things come to mind. One is this concept of liquidity that we've talked about. So, you need to kick off this flywheel, you need to build enough of that density within your marketplace. And depending on the business, you can take a lot of time or money, and without the right diagnostic framework you can end up running out of both. And so it's like, that's the same one, and I felt this at Lyft, I've seen this at other companies, this rush like, "Wow, we have to get to this point, otherwise we know it's a losing battle until we have enough density for both sides to have a good enough experience." The other one that I see is ignoring one side. So, we talked about doing that when you're early on, but I see a lot of larger companies operating for too long as one-sided businesses. Many large marketplaces only thinking about their demand side funnel.

**Benjamin Lauzier** (00:34:01):
So they run ads, they get clicks, they turn those clicks into dollars, and they try to get enough supplies that intuitively the experience is good enough for users. And my advice is, if you're doing this you're missing out on half of your business. And the trick is marketplaces are very laggy, so once your network effects start to die down it turns into this moment of panic of, "Oh shoot, we forgot about half of our users. We forgot that sellers are people too, and they're all leaving, and now we need to completely transform our product to save the ship, and to create a compelling value proposition on their side." So, that's the other thing that I see is businesses realizing that they are marketplaces with true marketplace needs too late in the game. And the last one is quality. I think we talked a little bit about the quality before, but it doesn't mean that you always need to have the best quality in your marketplace, but being a marketplace implies a level of curation.

**Benjamin Lauzier** (00:34:58):
You need to be intentional about the quality that you aim to provide, and I think a lot of companies don't have necessarily that intentionality and you have this constant push of supply, "If only we'd lower our bar a little bit, we could get more supply." And so until you end up, we've all experienced this at some point, you found some e-commerce website, you look for something and there is also like, "Oh my god, this looks super shady," because all the sellers don't look that great. That's a quality problem. And so, you need to be intentional about your quality and I think that's another area where companies fail.

**Lenny Rachitsky** (00:35:31):
**Benjamin Lauzier** (00:37:27):
I think when you're running a marketplace, you tend to sit in your ivory tower a little bit looking at stats and thinking, "If only we could get people to do X, it'd be better for everyone." And I certainly did that in my career. I think that's missing the point that we're humans, and I think sometimes we act in ways that are non-deterministic or intuitive. I'll mention another example, but we'd originally sell leads to pros like plumbers and electricians. And of those leads, obviously only a fraction would turn into actual jobs and revenue for those pros. So, we also saw that those pros were always great at converting leads into jobs. And so, naturally we thought that we could provide a more consistent experience for customers and for pros by improving their ROI and selling bookings directly to those pros. It's a common marketplace move, going from some version of lead to a direct booking.  

**Benjamin Lauzier** (00:38:22):
And digital, great. We knew we were going to improve their ROI by something like 20% maybe, and we launched this and pros hated it. They hated it because they actually subconsciously, they liked the thrill of the sale. They loved this contact with customer, and they sometimes completely overestimated their ability to close the customer. They were like, "You took all those phone calls, they kept me busy. I felt like I was hustling, I was about to close this customer." And so, no matter what the data says of like, "Oh, we increased their earnings by 20%," the pros don't feel this way and it's the right to feel however they want. And we saw the same thing at Lyft when trying to make driver earnings less volatile, we had to fight a lot of that perception and a lot of that peak end effect. So, my call-out here is any attempt at control can be really tricky and backfire in ways that are unpredictable.

**Benjamin Lauzier** (00:39:12):
You also touched on employment classification. In the U.S., when you talk about controlling supply, all the lawyers are like, "No, no, no, that's not something that we do." Because if you control your supply, then there can be legally classified as employees and be entitled to a whole bunch of benefits. So, my take on this in general is I'm a huge believer, and it really depends on the type of company I should say, obviously, but my take is I'm a huge believer in market forces and empowerment. So, provide guardrails for what a good experience is in your marketplace, set a clear bar for quality, and provide the right coaching and tools for supply to be successful. And then take a step back and see where the gaps are, and invest more in hands-on tactics just to close those gaps more specifically.

**Benjamin Lauzier** (00:40:02):
So, lots of coaching tools that Lyft, Uber did it, like most marketplaces provide some sort of coaching. You have a review system perhaps, you have stars for your sellers, for sellers who fall below the threshold then coach them, provide them the right tools, the right guidance, what is the standard that you have on your marketplace and help them meet that bar. And for people who fall through the gaps that you have, then that's when you invest in more hands-on tools. And this is one of the things that we did at Lyft also with the rental company that we spent up. I'm happy to tell you more about that, that's interesting.

**Lenny Rachitsky** (00:40:40):
I'd love to hear about that. Before we hear that, is there any marketplace that has been very good at upleveling quality without becoming managed, that did this really well that you can think of?

**Benjamin Lauzier** (00:40:54):
Yeah, there's a talent marketplace called Toptal, and they are specialized in this. They have a really high bar for quality, they claim to only have the top 1%, top 3% I believe, of talent there. And they have a really amazing set of checks and processes. This funny story from them, but apparently they advertise something maybe a 3% pass rate for their talent, so they only on board like 3% of the people who apply. And allegedly their actual pass rate is even lower than that, but they thought that if they actually advertise the actual number it would sound fake. And so, they actually say 3% because 1% would sound like too ridiculous and it would discredit their talent. So, they're one company that does a tremendous amount of work for vetting quality early on with a ton of different checks, but also maintaining that quality. So, throughout with the right coaching tools, with education and things like that.

**Lenny Rachitsky** (00:42:06):
That's a really good example. And so, basically they just vet and only approve high quality supply in their case. It's mostly engineers, right? I think on Toptal?

**Benjamin Lauzier** (00:42:16):
Correct. Yes, it's mostly engineers, designers, I think.

**Lenny Rachitsky** (00:42:18):
Which you can only do if you have so much supply that has so much interest in becoming part of your platform, but that's a really cool example. Basically it's just only allow really high quality supply. Let's hear this rental car story, so this is Lyft trying to do rental cars, right?

**Benjamin Lauzier** (00:42:32):
Correct. Yes, yes. Yeah, so this is a little bit of context. I was leading the driver's side of product at Lyft, and General Motors had invested half a billion dollars in our last round of funding. And this was Christmas Eve, I'll always remember, I got a call from Lyft CEO and General Motors CTO, and we decided to build a rental company essentially. And the reason for it was really fascinating. GM had all those vehicles that were coming off of lease, and that they were forced to sell at auctions they didn't really know what to do with. And from our perspective, we had this massive supply gap. We've talked about this before, but we had this huge supply crunch, we were growing super fast and couldn't hire drivers fast enough, couldn't onboard drivers fast enough. And when we looked at the market, we realized that 50% of the job seekers and welfare recipients in the U.S. don't have a car.

**Benjamin Lauzier** (00:43:26):
So, that was our supply gap. This was a huge pool of people that we just couldn't tap into because they didn't have a car. And so, by renting cars we could essentially manufacture our own supply. We could dial this up and down, we could be very surgical about how many vehicles do we bring in, which markets do we bring this in, at what price? We could even offer to pay for the car if they drove 30 hours a week and completely transform the lives of those people, now we allow them to have true mobility. They can go buy groceries, they can go take the kids on vacation. So, a huge win-win for everybody with something like this. And I think in few months we had built a rental company from the ground up, and within 18 months I think we were the fourth-largest rental fleet in the U.S. 

**Benjamin Lauzier** (00:44:10):
But all of this stemmed from this gap that we saw of like, okay, it's not about controlling the drivers in general. It's about like, okay, we want to be surgical. We want to control the quality of the cars on the platform. So, we talked about that, that's a great example. In the markets where we thought the vehicles of quality was too low, we knew we could onboard more rental vehicles that were more recent to raise the average age of a vehicle on the platform. So, it gave us more control in a much more surgical way, I guess.

**Lenny Rachitsky** (00:44:44):
So, it's not that you are launching a rental car service, the idea was add supply and give drivers a car so that they could become drivers.

**Benjamin Lauzier** (00:44:54):
It was a bit of both. We actually launched, it was we had vehicles that drivers could rent from Lyft, and to drive on the platform, and also to drive for their personal needs essentially. But yeah.

**Lenny Rachitsky** (00:45:10):
Got it, okay. And then, did this actually work and have impact? Was this a good idea?

**Benjamin Lauzier** (00:45:16):
Yeah. Yeah, it had a tremendous impact. Like I mentioned, I think we scaled this exponentially to become, I think again, the fourth-largest rental fleet in the U.S. because it was so effective for us, both because we had the right amount of control, but also those drivers were incredibly loyal to us. We had a whole bunch of other incentives that we could do, we could offer to pay for the car but only if you don't drive for the competition for Uber, and only if you drive at least 30 hours a week. So, this again provided us with, again, much greater retention, much higher engagement, and was a real incentive for us but also for the drivers.

**Lenny Rachitsky** (00:45:59):
Awesome. And maybe the reason it's most interesting is this is along the spectrum of a managed marketplace. It moves closer to you guys are paying and covering costs of cars. It makes it less just like this simple, highly efficient marketplace.

**Benjamin Lauzier** (00:46:15):
Exactly, yeah. It's the marketplace version of maybe your black car fleet owner has their fleet of vehicle and they have people. So, this was the marketplace version of doing that.

**Lenny Rachitsky** (00:46:26):
And it's also just a differentiator, because GM and you guys were close, and so you had this lever that say Uber didn't have. Amazing. Another area that I know you spent time on that I think is really interesting, and I think it'd be helpful to people to hear is the mentorship program, and the ambassador program that you had at Lyft, and how that helped you scale much more quickly than other folks were able to. Can you share that story?

**Benjamin Lauzier** (00:46:52):
Pretty early on at Lyft, this was 2014, 2015 maybe, Uber was basically 30X our size. They had 30 times more revenue, more people, more liquidity, everything you can think of. They were growing like crazy, and we had a bit of this existential moment, as you can imagine, where we were wondering how we're supposed to compete with that. And we had to be super clever, everything that you did at the company had to be 10 times more efficient per person than the competition just to survive. That was the bar, just not to die, and put a lot of pressure on us but we basically found a clever way of onboarding drivers at a fraction of the cost and resources. So, let me give you a little bit of context on how the onboarding flow worked. So, at the time, the last step to get onboarded as a driver was after you background check and your driving record check came back, you had to do a visual inspection of your car, a quick test drive, some light training, and we would check your documents.

**Benjamin Lauzier** (00:47:53):
We would check that you are the person with a driver's license and all those things. And Uber at the time would launch a team on the ground, they would go and open an office and they would have DMV-style group onboarding sessions and car inspections. And we did this as well in our first three to four markets, but you can imagine the overhead and the lead time. You had to go and you had to find office space, sign the lease, hire employees, you had huge, huge lead time. And we thought about it, and at the time a huge competitive differentiator for us was our brand. As a passenger or as a driver, why would you use a platform with lower liquidity? As a driver, you had lower earnings guaranteed. As a passenger, you had longer wait times. Why would you use a service like that? You do because of the brand, because of its values, it's how it makes you feel.

**Benjamin Lauzier** (00:48:41):
And so, we had the pink mustaches at the time, we had this very strong brand identity. I think a lot of that has been lost now, but we also had this amazing community of drivers who were fierce advocates for the brand. And so, what we did is leveraging this community and building essentially a soft onboarding supply engine where we would pay our best drivers $35 per mentor session, and a mentor session was essentially replacing this onboarding flow. So, it was basically another driver looking at your vehicle to check all your documents, take photos of your driver's license and all that stuff, and take you on a short ride along. And the benefits of this were absolutely mind-blowing and kind of unexpected for us on all sides. First, the mentors were our very best drivers, and they were evangelists for the brand. So, what they did was they would share personal tips on when and where to drive.

Oftentimes they shared their contact info. And this created tremendous leverage and social proof for those new drivers who were on the fence about taking strangers into their car. It's actually quite funny because we had the brightest minds in the company writing the best marketing emails and copy, like, "Hey, hop on the car and drive this Saturday." And you had all those drivers and all those mentors like, "No, no, don't listen to those Lyft guys. Here's what you should do. Go on Tuesday at 2:00 PM, text me, I'll tell you where the good spot is, and this is how you're going to get rides. This is how you're going to get rich and make a lot of money." And this recognition lever was just so much more powerful than anything we could be telling you. And so, very, very efficient activation lever for the new drivers. For us, also incredibly scalable.

**Benjamin Lauzier** (00:50:22):
We could fly a small team to rigorously vet and onboard maybe like 10, 20 top drivers, and then they'd fly to a different market, and we would let the rest of our drivers be onboarded by those mentors. And even for those mentors, for those top drivers, it was an incredible recognition lever. For them, if you were a 4.9 driver, you had enough rides, you had a chance to make it into being a mentor, and this provided additional earnings opportunity for you. If you did two mentor sessions in an hour, you could make 70 bucks an hour. You could take a break from driving if you're tired, and just do some of those. It felt like getting promoted at a job. And so, it actually had a huge impact on the retention of our very best drivers, which was unexpected. So, a lot of really, really interesting benefits, and we actually lean into this and built a couple of really fascinating variations of this for a while, but this allowed us to match most of Uber's footprint with a 10th or a 20th of the resources at incredible speed, I guess.

**Lenny Rachitsky** (00:51:21):
That is an amazing story, and it's such a great lever that I totally agree, I don't hear people using and I wonder why. So, what I'm hearing is it was cheaper, the drivers were making money. I imagine the drivers trained by the mentors ended up being better drivers, that's what we saw at Airbnb, hosts that came in through a referral ended up being better hosts, for whatever reason. And you're saying basically, this is what allowed you to compete with Uber at a much smaller scale and much less money raised. Amazing. 

**Benjamin Lauzier** (00:51:51):
Exactly. 

**Lenny Rachitsky** (00:51:52):
You said there's a couple of variations. Is there anything interesting there to share, just things that you built as a follow-up based on the success?

**Benjamin Lauzier** (00:51:58):
So, the next step in that journey was basically we were growing like crazy, but now we had cracks in like the activation phase, but now we had a whole bunch of people dropping off in the funnel before activation]. So, they didn't enter their SSN, they didn't enter the right info for us to run all those checks in the previous steps of the onboarding flow. So, we built a team of hundreds of account executives, and their job was just pick up the phone and call those drivers. And so, we had the same aha moment of like could we get some of our best drivers to do that for us, and empower them to be a part of this? And so, we did this and we launched another, like I said, role. We called them recruiters. And so, as a recruiter, as a driver, you could just, if this was quiet on the road, you could just hop on your phone and you would have a mini sales dashboard where you could claim leads.

**Benjamin Lauzier** (00:52:49):
And this was a driver who had dropped off in the funnel, and you had a telephone number, you could just call them and text them. And same thing, those guys were outperforming our very best of trained salespeople, because it's not like, "Hey, it's Ben from Lyft. Hop on the road, please." It's like, "Hey, my name is James and I'm a fellow driver as well. Lyft told me that you have a incomplete application. Do you have any questions? Do you want me to come to your house, we can do this together?" And we would pay them 20 bucks per person that they converted to activation. And so, something incredibly scalable for us, another way for us to reward and recognize our best drivers.

And it also provided a really interesting way for us to smooth out the supply and demand. The problem with a marketplace like Lyft is that you have this big spike. Everyone wants to drive on a Tuesday at 2:00 PM, but everyone wants rides on a Saturday at 2:00 AM. And so, how can you manufacture demand during those low utilization times? This was a great way to do that. Now you could wait on the road and still make money while just sitting in your car while waiting for the next ride. So, this was another iteration of this model that was really cool.

**Lenny Rachitsky** (00:53:58):
Amazing. That is so cool. I just know the feeling of being on a team, coming up with this idea and the thing working must feel so great. Just like, "Holy shit, look at this. Look at all these cool things that we can do with our supply." Something I wasn't going to get into, but it might be interesting just to hear if you have thoughts on this. So, I've been a huge fan of Lyft from the beginning, I used Lyft the very first weekend it came out in San Francisco when there was like five drivers. It was like a beta test, I was friends with someone that worked at Lyft early on, and it was just like, "Man, Lyft's the best." I was like all Lyft, Uber sucks, I hate that. I want to give it the fist bump or the mustache. So great. Today though, I was just looking at market caps.

**Lenny Rachitsky** (00:54:38):
So, Uber is worth $150 billion, Lyft is worth $5 billion. I'm curious if you have thoughts on just, it feels like Uber has won at this point, and I don't know where Lyft goes. I know your heart is with Lyft and you worked at Lyft for a long time, I know it doesn't feel great to see how things have played out necessarily. I'm curious just to hear your take on just what do you think Uber did, if you look back, that allowed them to basically win? And where do you think Lyft goes from here? What do you think happens with Lyft? They're still worth 5 billion, it's still a huge, amazing, successful business, but just where do you think things go?

**Benjamin Lauzier** (00:55:15):
Yeah. I think it all went south when I left the company. I'm just kidding. No, and again, I have to call out the fact that I haven't been close to Lyft, and their business and strategy for many years at this point. So, take this with a grain of salt. This is my very naive perspective, but I think to me, perhaps the biggest blow to Lyft's business was somewhat inherent, like the vision. Lyft's vision was always anchored around transportation, people of transportation. The founders were deeply passionate about moving people, they were passionate about transforming the way people move around in a city. They wanted to just change how cities are designed, how roads are designed. And so, that meant investing in dynamic shuttles and things like that, and there's a lot of experimentation that went to that. But it also meant that Lyft never invested in things like food delivery, or goods and parcels, and things like that.

**Benjamin Lauzier** (00:56:26):
And I think that crushed them during COVID essentially. I think Uber had, I think at some point their slogan was moving in bits and atoms, or something like that. But I think it implies this notion of being a logistics platform for assets in the world, for transporting people, for transporting things, for transporting ... And I think they built, they invested lot in trucks and food delivery, and all those really exotic things that Lyft had never any intention to invest in. Not even because of the lack of resources, but because this was in part a distraction from our vision. We wanted to change how people move around in cities, we wanted to reinvent public transportation, we did not want to be a DoorDash competitor and help you get in donuts during COVID. And a huge part of it also was leaning heavily in shared rides. And so, this was like, again, how do you reinvent public transportation?

**Benjamin Lauzier** (00:57:28):
It's like every car is a dynamic bus, and now there's a bus line. The bus line is always running, it's always by your house. So, a lot of our investment I think in thinking went in that direction, and the last thing that people wanted with COVID was to be in a car with five strangers, but what people wanted is food delivered to their house. And so, I know that the business had a huge blow during COVID, whereas I think Uber was able to rebound much more quickly because of how diversified the business was. And so, it's funny now because I think Lyft actually killed shared rides, which was just so core to their identity. They were the first ones to launch this. And so yeah, the new COO I think killed the shared rides, which actually I'm really sad about. But yeah, so I think it indicates a very different vision now, a very different direction for the business. And yeah, that's my take, I guess.

**Lenny Rachitsky** (00:58:19):
Interesting. So, essentially COVID really effed them because their strategy was always about transportation, and when nobody needs a ride and people want food, strategically Uber made a really good move expanding into food delivery, which I think was a bigger business than rides for a long time. I don't know where it's at today for Uber, and Lyft didn't have that, and it's hard to recover from a time like that. So, it sounds like it's a combination of strategy was pointing Lyft in a certain direction, and circumstances in the world just made it really hard-

**Benjamin Lauzier** (00:58:50):
And losing me me. 

**Lenny Rachitsky** (00:58:51):
And losing Ben. So, you left in 2019, March 2019, and is that when they went public? 

**Benjamin Lauzier** (00:58:52):
Not for the IPO.

**Lenny Rachitsky** (00:58:59):
Yeah, and it's all downhill from then. And then-

**Benjamin Lauzier** (00:59:03):
I'm telling you. 

**Lenny Rachitsky** (00:59:04):
... during COVID actually, when there was a big bump, which I think when people started riding again, and then it went down again. So, I think there was a correlation there, so there we go. That's the thing, don't ever fire Ben, don't let Ben leave. That's our take on it. 

**Benjamin Lauzier** (00:59:16):
I was not fired, yeah. Just to be clear.

**Lenny Rachitsky** (00:59:18):
Okay, just different ways you might leave a company, don't let it happen. 

**Benjamin Lauzier** (00:59:23):
I know, I'm kidding.

**Lenny Rachitsky** (00:59:25):
Okay, so there's two more things I want to spend a little time on before we close up. One is your work in Europe, so you're a product leader in Europe, and I want to hear a little bit about what it's like to be a product person in Europe. And then two, I want to hear about the startup. So, at this point no one can actually fire. You have your own company that you're running, and I want to spend a little time here. Usually we don't spend time on this sort of stuff, but you're working on something very cool that I think is going to be really helpful to a lot of people in a really meaningful way. So, I want to spend a little time there. But before that, so you're living in France now. Before you started your company, you were interviewing for CPR roles in France, you work with a lot of French companies, European companies. I'm curious what you've noticed might be different in the cultures of tech companies in France and Europe in general versus the U.S.

**Benjamin Lauzier** (01:00:12):
It's been really fascinating, I think. So, my entire career has been in the U.S., and I'm just starting to understand what that European and the French market in particular looks like. And my read so far is that product management has really exploded I think in Europe in recent years, but the market dynamics are still quite different. In the U.S. I think you have this inherently very liquid and dynamic market. I think, this is my interpretation of it, but I think it leads to greater ownership and accountability for people and product at all levels. So, product managers and leaders, they join a startup and you're immediately in charge of a relatively meaningful piece of the business, with genuine autonomy oftentimes. It doesn't always happen, but oftentimes I think that's the case. And if things don't work out, well, there's this expectation that you'll be managed out.

**Benjamin Lauzier** (01:01:09):
There are countless memes on LinkedIn about the tenure of CPOs at tech companies to illustrate that. I think in France the market is much less liquid, so it's incredibly difficult to change jobs, and it's very expensive to fire someone in France. So, it seems to lead to two effects beyond the obvious job security. One is, I think PMs tend to have less autonomy and ownership, and a little bit more like micromanagement. And there are also less business owners than they can be in the U.S. And I see founders and managers struggling to let go of control a little bit more, again because it's understandable in a way, you don't have as much of a control as you do in the U.S. And so, you see a lot of really fascinating effects.

**Benjamin Lauzier** (01:01:55):
You have startups who tend to wait a little bit longer before hiring, especially in product. The art of product a little bit less of a thing. You have a lot of amazing PMs in France, but the recognition of the craft is a little bit different outside of the people who practice it. And you have a lot of real interesting outsourcing also, you see startups and companies of all sizes actually relying on great product studios, like Mozza, to build end-to-end products from the ground up. So, something that's been really, really interesting. Another side that I see is this dominance of business over tech in France.

**Benjamin Lauzier** (01:02:35):
There isn't as much of a cult of technology and software engineering in France as there is in the U.S. And so, the French Ivy League schools are business schools, like HEC, and the most highly valuable skill that you get is soft skills around management and business. It differs from the stereotype of the CS degree, Stanford dropout that you have in Silicon Valley. And I think because of a few of those things that I just mentioned, less liquid job market, but also less liquid financial markets, the last thing that I've observed that's interesting that's also around ownership I guess, is equity is much less meaningful in France. So, of the product leaders that I talked to, most of them consider their equity to be virtually worthless. None of them know of anyone who's made a down payment on a house thanks to their sort of equity.

**Benjamin Lauzier** (01:03:25):
So, it's seen as a nice bonus, but it's not the token of ownership and the promise of future wealth that it can be in the U.S. when you join a startup. For exec roles, I think it's often sub 10% of their total compensation, whereas in the U.S. it's very often more than 50% of your compensation will be equity. So, that's been interesting in terms of the dynamic, but it's also been real interesting to just see how vibrant the startup culture is here in France. You have a truly exciting innovation happening, especially in AI. You have a lot of French companies at the forefront of this, like Mistral AI and Hugging Face, and things like that.

And also how it's been exciting to see how the government is leaning into that as a catalyst for this innovation. I think the French government has dedicated something like $2.5 billion in funding to support French AI excellence by 2030. So, they're running a lot of internal government incubators to try to disrupt some of the government functions from the inside, and they're hiring top talents to do that. I've met some of the people working on this, it's just really fascinating. It makes me super excited about what a federal startup task of reinventing [inaudible 01:04:38] would look like. So yeah, it's been really exciting to see the whole space and how it differs from the U.S.

**Lenny Rachitsky** (01:04:45):
Fascinating. So, I know there's also AI regulation that feels really strange in Europe, but think that's EU based, not like France specifically.

**Benjamin Lauzier** (01:04:46):
Yeah.

**Lenny Rachitsky** (01:04:55):
Yeah, that people are not excited about. There's just a lot of fear of AI, and so there's a lot of regulation talk in Europe.

**Benjamin Lauzier** (01:05:02):
I'm a big Android guy, and a lot of the features like Gemini and all this is only available in the U.S., and now that I'm in France I see the difference a little bit.

**Lenny Rachitsky** (01:05:12):
Interesting. So, the cultural differences you spoke of, do you think they're rooted in the fact that people don't move jobs often, or is it culture? People just don't learn to work in the way that people learn to work in the U.S. in the product role? What do you think is the root of why things are so different?

**Benjamin Lauzier** (01:05:35):
I'm not quite sure, it's a good question. My take, and I think this is I'm sure very naive and reductive, and I know this is one of my core principles, so I'm sure I also have a tunnel vision on this a little bit. But to me, one of the biggest difference that I see is really around this concept of ownership and accountability. Whereas in the U.S., and again, I saw it, I'm sure you saw it at Airbnb, you see it at a lot of companies, not everywhere, but a lot of companies will hire you, give you a big chunk of the business, and it's up to you to prove yourself out. Where you have six months, you have a year, it's up to you to show impact. I think the French employment model is less conducive to this type of dynamic, because employment is much more rigid.

**Benjamin Lauzier** (01:06:20):
So, you have much less of this hire now and prove yourself out, it's much more of prove yourself beforehand. And if you've made a bad hire than as a founder, you become perhaps a little bit cagey about your vision. You want to be more hands-on because you made a bad hire. It's not like someone perfect, then he'll make you work but it means you'll be more hands-on in the work of PMs daily, and perhaps we'll think like, "Oh, maybe I don't need product managers who want on my vision, I'll hire project managers," or something like that. So, it's perhaps slightly more conducive to those types of dynamics.

**Lenny Rachitsky** (01:06:53):
And you're saying that's in part because it's harder to fire people in France and in Europe?

**Benjamin Lauzier** (01:06:58):
Yeah, I think so. It's not just about firing I think, to be clear, I just think it's culturally the market seems like a lot less liquid and dynamic.

**Lenny Rachitsky** (01:07:05):
So, people don't move around as much, they stick around for a long time.

**Benjamin Lauzier** (01:07:10):
Yeah, exactly. Yeah.

**Lenny Rachitsky** (01:07:11):
Got it. And it sounds like there's also just a cultural difference of founders innately are much more, "I am in control, and I'm not going to hire people and trust you to take this thing on. I'm just going to run the show." It's basically Paul Graham's founder mode is already instilled in everyone.

**Benjamin Lauzier** (01:07:29):
Maybe yeah, maybe that's a little bit. And I think also it's this culture of business, so very business-centric sort of culture. And again, it makes sense, the markets, you have less venture capital, you have less equity in the financial markets as well. And so, when you raise funding you need to have a strong business case. The business case is at the center of your habits. Whereas I think oftentimes in the U.S. you have, again, it's a little bit stereotypical, but it's a very tech or product-centric view of the world, or it can be a very tech or product-centric view of the world where it'll be like this product, this is the vision of the product, and sometimes even the business model will follow. And in France, I think the business model has to be front and center perhaps for you to be able to raise venture capital for you to be able to even exist. So, it means it attracts a lot of business minded entrepreneurs, much more so perhaps than tech-minded or product-minded entrepreneurs.

**Lenny Rachitsky** (01:08:29):
Got it. If someone wants to help their company in Europe and France operate more closely to the way companies in the U.S. operate, do you have any advice for them? I know you talk and work with a lot of companies in Europe, what do you help them change and see differently?

**Benjamin Lauzier** (01:08:47):
Yeah, it's a great question. I haven't fully cracked that, and think it's a really hard question. I'll give some sort of small pointers that have helped at least some of the companies that I've talked to. But the one is equity, I think there's a desire from a lot of the founders that I talk to, to give equity to employees, but because it's not in the culture yet I think employees also have an under-appreciation for equity. Like, "Well yeah, it's nice, but I don't know what's going to happen. I just work for the CEO anyways." There's less of this sense of, again, ownership that you can have in the U.S.

**Benjamin Lauzier** (01:09:22):
And so, I think leaning into that and investing in education around equity, the case is also in the U.S., I'm convinced 80% of people just don't fully understand their equity. But I think leaning into that, especially in Europe, to help people understand the value of their equity, help them by telling more about the story of the business, the trajectory of the business, why it matters for their future equity. I think anything along those lines I think can help cultivate this greater ownership mindset, I think for people.

**Benjamin Lauzier** (01:09:58):
And then yeah, I think another big piece again is, at least to me this is a big recipe to successful product teams, is to develop teams that revolve around this concept of ownership and accountability teams that are clearly owning a huge, or it doesn't have to be huge, like a slice of the business, not feature teams like shipping maybe guests, but teams that have clear accountability with consequences, but also clear ownership and leeway to do their best and to thrive.

**Lenny Rachitsky** (01:10:29):
Again, I usually don't spend time on this sort of thing, but I just think that what you're working on is extremely cool, and I think it's going to be really meaningful to a lot of people. And so, I just want to spend a few minutes giving you a chance to talk about what you're working on now. You started a company, is this your first company that you've started? 

**Benjamin Lauzier** (01:10:45):
It is, yeah. 

**Lenny Rachitsky** (01:10:45):
It is first company. 

**Benjamin Lauzier** (01:10:46):
First real company. Doesn't accept projects, but first company. 

**Lenny Rachitsky** (01:10:48):
Yeah, there's a LC, there's a C corp, or yeah, it's like filed. There's paperwork. Amazing. Talk about what you're building, how people know how to find it if it's right for them.

**Benjamin Lauzier** (01:10:59):
Yeah, I have to say entrepreneurship has been a very humbling journey. I think the zero to one is way harder than anything us have done so far, and I feel like when you're used to building and scaling products within companies, you take for granted, at least I did, I take for granted that the problem space has already been validated. You have some brand equity, even if you launch a new vertical, there's an existing user base, there's a validation of the broader problem space. I think going to truly zero felt, at least to me, super overwhelming and lonely, but also super exciting with tons of condensed learnings. It's been a really interesting journey. So, what brought me there is my wife started to have some health issues about three years ago now, it's partially why we decided to move to France last year just for a couple of years.

**Benjamin Lauzier** (01:11:47):
And she's had this undiagnosed condition and chronic pain, and we saw just how much of a nightmare it was to manage her care and to navigate the healthcare system in the U.S. So, we'd wait three months for an appointment for a neurologist, then did see her for maybe eight minutes. Average appointment time in the U.S. is between 10 and 12 minutes. They'd dump a bunch of jargon, say like, "Hey, tests all look normal. Sorry, you should just go see this other specialist instead." Would wait another three months, see another specialist. And with a lot of anxiety, a lot of pain, as you can imagine, all those things, you have another eight minute slot with someone and you're like, "Oh, why didn't the neurologist do this test? I can help you, let's make some sense." And so, it ends up being incredibly isolating. The whole time we just felt completely alone.

It was just like us and Google, we felt we kept getting conflicting advice from doctors, and I was spending all my time researching specialists, what solutions to consider, spend all my nights reading through research papers to [inaudible 01:12:48], "Hey, what is the academic consensus on this particular treatment that the doctors don't seem to know about?" And throughout this whole process it felt like no one really had her back, no one within the medical system was fighting for her the way that your family doctor might have fought for you 20 years ago, knowing everything about you and being like, "Lenny, let's talk about this. I know your uncle had this," or there's this sort of a sense of advocacy that came from your family doctor that just doesn't exist today. It's not uncommon for doctors to have thousands of patients that they see just a few minutes each year.

**Benjamin Lauzier** (01:13:19):
And so digging into this, we just realized it's not an isolated case. You have nearly half of Americans have at least one chronic condition, or have to deal with some sort of complex health issue largely on their own. You see a lot of those large online communities revolving around chronic conditions or chronic pain, and trying to make sense of it and advocate for themselves. And I think I want to be clear, in my mind the problem is obviously not about the practitioners, it's systemic. It's just growing financial pressure from private equity firms, it's just countless other factors. But you see the physicians being overwhelmed, overworked, burning out, and you see that pressure just only increasing, I think. So, I basically spent the next six months just talking to hundreds of patients, and doctors, and experts, and what we built is basically a platform to help people fight for their health.

**Benjamin Lauzier** (01:14:12):
And so, we want to close the gap between patients and the healthcare system. There's this critical layer of the system that's missing, I think, people are navigating life-threatening or debilitating conditions largely with Google, and at some point you just get tired of fighting for yourself. So, we connect people with complex conditions, typically with their own health advocate. So, it's essentially like their own health assistant. They're available 24/7 to help you navigate your care. So, we find appointments for you, we help you prepare your appointment, we make sense of a diagnosis, of test results. We spend hours researching solutions and potential treatments, and just more generally we do everything we can to help you just better advocate for themselves basically. And now we launched in the U.S. a early version of this few weeks ago, and the engagement has been really, really, really mind-blowing so far. And we're helping cancer patients, people with a lot of those niche chronic conditions, and literally harassing the doctor's office like, "Hey, we still haven't received that referral."

**Benjamin Lauzier** (01:15:15):
All the things that you just get tired of doing when you're dealing with so many appointments, and when you're having to manage a condition like this. And our mental model is what would we do if this user was our partner or our parent? You'd likely spend all night combing through research. You'd call all the providers in the state to be like, "Hey, who has an appointment?" Because there's no PT available for the next two months. We'll find you a PT available sooner. So, we're building the engine to do that at scale essentially, and make people feel like they're not alone and that someone is fighting for them.

**Lenny Rachitsky** (01:15:45):
Super cool. It's sad that we need something like this, but we do, because the healthcare system is so not ideal. And so, it's basically someone in your corner that's just, it's like in the inside that knows how these things work that is there to help you through the process. What's the company called, where do people find it?

**Benjamin Lauzier** (01:16:03):
Yeah, it's called Nurra Health, and our website is Nurra, N-U-R-R-A.me.

**Lenny Rachitsky** (01:16:09):
Awesome, and we'll link to it in the show notes. And just to be clear, I'm not an investor, I'm just excited about this thing. I think a lot of people need this. Just to loop back to what we've been talking about, it's not a marketplace. How would you describe this business in relation to marketplace companies?

**Benjamin Lauzier** (01:16:22):
We're ignoring the marketplace dynamics. I'm following my own advice, and I'm one jumpstarting one side of the marketplace, the health advocates were like jumpstarting this side for now, and we're only focusing on what I think is going be the hardest side for us, and it's going to be demand. How do we find those people? How do we create the right value proposition for them? So, that's what we're focused on.

**Lenny Rachitsky** (01:16:44):
And so, in the future there may be a marketplace component, is what I'm hearing?

**Benjamin Lauzier** (01:16:49):
Yeah, exactly.

**Lenny Rachitsky** (01:16:50):
Interesting. Very cool. Ben, is there anything else that you want to share, mention, leave listeners with before we get to our very exciting lightning round?

**Benjamin Lauzier** (01:16:59):
No, no. Thank you.

**Lenny Rachitsky** (01:17:01):
Well, with that, we've reached our very exciting lightning round. Ben, are you ready?

**Benjamin Lauzier** (01:17:06):
I'm ready, let's do it. 

**Lenny Rachitsky** (01:17:08):
All right. First question, what are two or three books that you've recommended most to other people?

**Benjamin Lauzier** (01:17:14):
I'll give you books in different directions. One is Misbehaving: The Makings of Behavioral Economics. I'm really interested in behavioral economics, I love this intersection between economics and human psychology. It's a great analogy for product, so that's a great introduction to this field. The second book that I recommend a lot is Range: Why Generalists Triumph in a Specialized World, by David Epstein. I've always felt curious about a lot of things, but it's made me feel like I'm decent at many things but I'm good at nothing. I'm very good at nothing. And so, even in my career I see all those pianists who are like machine learning gurus leading conferences on weekends that are contributing to think tanks, I just felt like a generalist.

**Benjamin Lauzier** (01:17:55):
So, if you feel this way, this is a good book to make you feel a little bit better by yourself and your imposter syndrome. At least it did for me. And last one, nothing to do with business, but Immune, by Philipp Dettmer. This is the creator of the YouTube channel Kurzgesagt. I don't know if I'm pronouncing this right, but it's a science channel. If you're even remotely curious about how your body works, how your immune system works, it's an amazing book that's really, really fun to read, super entertaining, and just great biology and fun book, I promise.

**Lenny Rachitsky** (01:18:26):
I've been trying to get the author of Range on the podcast, I have not had success yet. So, if anyone knows him, his name is Epstein? Is that right? 

**Benjamin Lauzier** (01:18:34):
Yes. David Epstein. 

**Lenny Rachitsky** (01:18:36):
David Epstein, please connect me. I would love to have him on the podcast. I really love his message of just, basically it's the most successful people, or is it that you should be a generalist or that you can be very successful as a generalist? Is that the message?

**Benjamin Lauzier** (01:18:50):
You can be very successful as a generalist. Yes.

**Lenny Rachitsky** (01:18:51):
Yeah, great. I completely agree. That's been me too. Next question, do you have a favorite recent movie or TV show you've really enjoyed?

**Benjamin Lauzier** (01:18:58):
TV show? I haven't seen anything lately that's been mind-blowing, but I'll share an old new one. I've rewatched The Last of Us recently, and it's an old favorite. I love the TV show. I like the game, I played the game many years ago, and love the TV show

**Lenny Rachitsky** (01:19:12):
When the heck's the next season coming up? I'm excited for that. Because I know the game has more-

**Benjamin Lauzier** (01:19:12):
2025.

**Lenny Rachitsky** (01:19:16):
2025. Oh man, so long. Okay, good to know though. Next question, do you have a favorite product you recently discovered that you really love?

**Benjamin Lauzier** (01:19:25):
Maybe a little bit behind the curve on this one, but I've been loving the Arc browser. I don't know if you use it, but it's been-

**Lenny Rachitsky** (01:19:32):
Oh, I love Arc. It's my number one, my main browser. Absolutely, I love it.

**Benjamin Lauzier** (01:19:36):
Amazing. All right, so yeah, you know all about it. Yeah, it's been really fun.

**Lenny Rachitsky** (01:19:41):
Yeah, just the onboarding of the Arc browser is such a lesson in onboarding. They do such an amazing job. It's like that alone is a great thing to do as a product person, just see how they do onboarding.

**Benjamin Lauzier** (01:19:52):
I was like, I've been using Chrome for 12 years, or I don't know how many years, it feels like such high friction to change my entire life. In eight seconds it was done, it felt like home. I was like, "Wow, this is way faster than I expected."

**Lenny Rachitsky** (01:20:05):
Two more questions. Do you have a favorite motto that you often come back to or repeat yourself, share with friends or family?

**Benjamin Lauzier** (01:20:11):
I don't have anything particularly philosophical, unfortunately. I lived in [inaudible 01:20:16] for a few years. I live now in the French Alps, so I have a frame with a John Muir's quote, "The mountains are calling and I must go." I feel like this is, it's my grounding place. The mountains are my happy place, and so I don't share that work often. I don't peace out in the middle of meetings like, "The mountains are calling, I must go." But it's been a grounding motto, I guess, for me.

**Lenny Rachitsky** (01:20:38):
That's beautiful. My nervous system relaxes just hearing that quote, and I know you live in a mountainy part of France so you've done it, you've listened to the call. Final question. You live in France, the Olympics were just in Paris. Did you go to any of the games? Did you watch any of the games? Anything stand out to you about the Olympics that were not so far from where you are now?

**Benjamin Lauzier** (01:21:02):
Good question. I did not see any live events, unfortunately. Perhaps the highlight for me was I'm a big mountain biker, but in the biking realm I love the Men BMX event where all three men on the podium were French, so this was a great moment for France.

**Lenny Rachitsky** (01:21:25):
I didn't even know that was an Olympic sport. So, it's a BMX, like dirt bike kind of race.

**Benjamin Lauzier** (01:21:32):
Yeah, yeah.

**Lenny Rachitsky** (01:21:33):
So cool. Amazing. Ben, thank you so much for being here. Two final questions, where can folks find you online, and what else are you doing that people can check out if they want to learn more? And how can listeners be useful to you?

**Benjamin Lauzier** (01:21:46):
Yeah, you can find me, two things that are perhaps helpful for people out there. One is I have a Reforge course if you're curious about marketplace, if you want to dig deeper into marketplace growth, I have a course on Reforge. We're about to do our fifth or sixth cohort I think now. It's been going really well, we've been working with tons of really, really cool marketplaces, going much deeper into some of the topics that we just talked about. So, if you're interested in marketplaces, I would say check this out.

**Lenny Rachitsky** (01:22:13):
And on that real quick, is the customer ideal, is it founders or is it like PMs at larger marketplace companies? Who is this perfect for?

**Benjamin Lauzier** (01:22:23):
We've had both founders and PMs, and like a heads of product, but it's my strong recommendation it's people that have product market fit. Per our conversation, if you don't have product market fit, wait a little bit before enrolling in this course. Focus on your core business before worrying about the marketplace dynamics aspect.

**Lenny Rachitsky** (01:22:44):
And then I cut you off, there's something else you were going to point people to?

**Benjamin Lauzier** (01:22:47):
Oh, and just Nurra, the company that we're building. Anyone that you know, or if you yourself have chronic or complex conditions, and if you feel like you need help managing your health and navigating your care, would love to help or share what you need, and how we can help you. And our website is Nurra.me, N-U-R-R-A.me. 

**Lenny Rachitsky** (01:23:09):
And then how can listeners be useful to you?

**Benjamin Lauzier** (01:23:11):
If you have advice, if you know anyone in the space, if you're interested in learning more about this, if you have advice, if you have learnings, if you know anything about this I would love to hear it. If you have hot takes about marketplace, if you disagree with any of what I've said, I'd love to also hear it.

**Lenny Rachitsky** (01:23:25):
I love it. Ben, thank you so much for being here.

**Benjamin Lauzier** (01:23:30):
Thank you so much for having me, it's been a dream come true. Finally, I'm on this podcast.

**Lenny Rachitsky** (01:23:34):
Same. Same for me, Ben. 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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