Wendy McMahon is one of the most influential leaders in modern broadcast journalism. Over the course of her career, has led two of the most important institutions in American media, first as president of the ABC-owned television stations, and later as president and CEO of CBS News and Stations. She began her career in local television, working in branding, marketing, and storytelling across local stations around the country. From those early roles, she developed a deep conviction about the purpose of journalism, especially local journalism, as a public service and a cornerstone of civic life.

Throughout this conversation, Wendy reflects on the realities of leading institutions through transformation and uncertainty. She shares how leaders build momentum during change, why visible signals of leadership matter, and what it means to steward an organization whose mission extends far beyond the business itself.

She also introduces a powerful leadership idea that has shaped her thinking, the concept of mettle: the courage to stand in the storm when the stakes are highest and the world is watching. This is a conversation about purpose-driven leadership, navigating complexity, and the character required to lead when it matters most.

Full Transcript

Darren [00:00:00]:

Hi everyone. Welcome to another episode of One of One. I’m your host, Darren Gold, CEO of The Dream Group. My guest today is Wendy McMahon, one of the most influential leaders in modern broadcast journalism. Over the course of her career, Wendy has led two of the most important institutions in American media. First, as president of the ABC-owned television stations, and later as president and CEO of CBS News and Stations. What makes Wendy’s story so compelling is not just the scale of the organizations she’s led, but the path she took to get there. She began her career in local television, working in branding, marketing, and storytelling across local stations around the country. From those early roles, she developed a deep conviction about the purpose of journalism, especially local journalism, as a public service and a cornerstone of civic life. Throughout our conversation, Wendy reflects on the realities of leading institutions through transformation and uncertainty. She shares how leaders build momentum during change, why visible signals of leadership matter, and what it means to steward an organization whose mission extends far beyond the business itself. She also introduces a powerful leadership idea that has shaped her thinking, the concept of mettle, the courage to stand in the storm when the stakes are highest and the world is watching. This is a conversation about purpose-driven leadership navigating complexity, and the character required to lead when it matters most. Please enjoy my wonderful conversation with Wendy McMahon. Hi, Wendy. Great to see you. I’m so looking forward to this conversation.

Wendy [00:01:40]:

Same.

Darren [00:01:41]:

Thanks for being here.

Wendy [00:01:41]:

Yes, I’m happy to be here.

Darren [00:01:43]:

Well, you have had such a remarkable career and have led some extraordinary news and media organizations. We’re gonna get into all of that, but I thought where we’d start was, having you take us through your personal and professional journey. I’m guessing it wasn’t obvious as you were growing up you’d be in those roles, but could you give us a little bit of the journey to maybe where you are today, and then we’ll sort of dive in from there?

Wendy [00:02:11]:

Yeah. Wow. My journey. So it’s, it’s interesting because I, I knew I wanted to be in journalism. I knew I wanted to be a journalist from 6th grade on. I was on my school newspaper. I took journalism in high school. I graduated from Louisiana State University with a degree in broadcast journalism. So I am actually one of those few people that studied and ultimately worked in the same role. Now, I don’t know if I ever could have anticipated what that journey would look like, right? I was a typical television nomad. I lived in 6 different cities in the span of 15 years, working in branding, marketing, positioning for news organizations, and building the products and the programming that would help translate the future for these organizations that were you know, largely built in the past. And the success I had along the way ultimately enabled me to continue to be promoted and to grow in those roles. And so privileged to be able to have run really two of the most influential media organizations in the country.

Darren [00:03:41]:

Yeah, ABC and CBS, which we’ll get to for sure. But let’s, so let’s go back to LSU. You grew up, I think, in New Orleans, is that, is that right?

Wendy [00:03:50]:

I grew up in New Orleans in Gretna on the West Bank, went to all-girls Catholic high school, and then went to LSU in Baton Rouge, which I grew up being a fan— football, baseball, etc. And then got to actually realize what it was like to be a student, and it was a tremendous 4 years.

Darren [00:04:15]:

And graduated with the degree in journalism and broadcasting. What was your first role?

Wendy [00:04:21]:

Oh, my first role. So, it’s funny, I had a professor. He was my media ethics professor, and he’s like, “Have you thought about what you’re doing after college?” And to be honest, I hadn’t at that point. And he said, “I really think you should interview for this program that Aflac has.” Yes, Aflac used to own television stations, Darren. It no longer does, of course, of course, but they had a program for account executives for the next generation of television ad sellers. And so I interviewed for that role. And to this day, one of the hardest interviews I’ve ever had. I was 20 years old, one of the toughest interviews I’ve ever had. The classic sit at the top of a table and go around, you know, the room of, of 12 men who were all asking me questions about how I would lead and would work moving forward. And so I was chosen to participate in that program, and my first role was at W.T.O.C. in Savannah, Georgia, Market 100, where I quickly realized that I did not want to be an ad representative.

Darren [00:05:42]:

And so what did you wanna be and where did you, how long were you in that part of the, the, the business and what, what, what came next?

Wendy [00:05:49]:

Yeah, look, I think first of all, we’re all in the influencing space, right? We’re all involved in ad sales, in sales one way or another. So it’s not that I didn’t love that part of the job. And ultimately I ran, um, ad sales organizations for CBS and for ABC, but I just knew that I wanted to be closer to the audience and to the viewer experiences. I wanted to be involved more directly in content and in programming and always saw, I think, an opportunity to develop a narrative and a community-focused approach to what we were doing. And the closest thing at the time to that was working in branding and in marketing. So I think after roughly 2 months in ad sales, the organization also realized that I had a real opportunity to lead the way for them in that space. And so I did. And the branding and marketing, um, experience is where I would spend, you know, the next 15 years of my career in television and in television news.

Darren [00:07:00]:

So for people not deep into news and media, branding and marketing, like what, what exactly does that role mean? And what were you doing for that first, 15 years of your formative years?

Wendy [00:07:13]:

Well, a little bit of everything, because when you work in smaller markets in local television, you are a bit of a Swiss Army knife. And so I was producing, I was editing, I was writing. And ultimately, what I was creating was in service to positioning the television station in the market as being— whether it’s the most accurate, the most in touch with the community, the very best in investigative or weather coverage. And so I would write those storylines, build those storylines, and then ensure that the messaging and the narrative made its way to stakeholders. So that could be audiences and viewers, that could be, community leaders, that could be politicians, but ultimately determining the overall positioning and messaging for each of these television stations where I worked and ensuring that it made its way from a distribution perspective to the right audiences.

Darren [00:08:26]:

So I’m guessing you had either an existing or an emerging vision for like the role of local journalism. Tell us a little bit about, like, what that vision was and how you were bringing it to life. And I’m imagining also it ultimately shaped how you led organizations when you got a chance to lead at scale.

Wendy [00:08:44]:

To me, local journalism, it’s the heartbeat of our democracy. I think so much of what we see right now in terms of the erosion of our civic fabric is because local journalism in so many respects has been decimated over the years. Local journalism is one of those things that you don’t realize how much you depend on it until you need it. When there are fires, when there are floods, when there is something happening in your community, you instantly turn to local journalism to find out what you need to do for yourself and for your family. And it’s always there. And so for me, being a part of something that was so necessary, that was so essential, that was so embedded, gave me a sense very early on of what was important to me as a leader. And that was, and that is, working in a purpose-driven organization that demands a higher calling than yourself. And when you are able to see up close how a story or how a public service outreach effort directly changes, affects someone’s life, it becomes oxygen at that point. You, you, you need it and you can’t imagine a career without that. So I’ve, I’ve always held that close in terms of my own personal motivation, and I’ve always insisted that that purpose, that mission stay front and center in any organization I’ve ever worked in, that in the race to modernize, ensuring that the mission and the purpose would not be compromised. That’s always something I’ve, I’ve held onto.

Darren [00:11:06]:

So is it the— your first CEO role was at the ABC-owned television stations?

Wendy [00:11:12]:

It’s interesting because right before I took that role, I had moved out of the day-to-day of television and had moved into digital and streaming because I saw where the audience was going, where viewers were going, and I wanted to make sure I understood how to create the products, the platforms, the experiences, the content that would serve those viewers and those audiences. And so when I became the CEO of the ABC-owned stations, or the president of the ABC-owned owned stations, it was very much with the mandate of, yes, needing to optimize the existing broadcast business, but then also to create this business of tomorrow, to rewrite its future. And so I very much went into that role with a remit to drive digital, to drive streaming. And then I think one year into that role, the pandemic happened. Which, Darren, is when we first worked together.

Darren [00:12:12]:

Yeah.

Wendy [00:12:12]:

And so many of those plans, so many of those initiatives on the roadmap, you know, had to take a bit of a backseat while we figured out how to stay on the air, how to protect our reporters, our photographers who were still in the field reporting, because again, that is what the mission requires. That is what the mission demands. And, In the 3 years that I was head of the ABC-owned stations, a year plus of that was pandemic.

Darren [00:12:46]:

Yeah, I just wanna like set the context here of how much complexity I imagine you were facing and sort of, and understand you were facing given our work together. There’s structural, massive structural changes taking place that are, you know, have been going on for some time. Technological change, and then there’s a global pandemic in the midst of everything. And I want to talk about— this is your first CEO role. You’re thrust into it. Maybe the first question is, why did they choose you? And what was your— putting aside the distraction of the pandemic just for a moment, you alluded to this vision of bringing really modernizing the ABC local-owned television stations. And maybe this may be not your words, but like, and but yet keeping the soul and purpose very, very front and center. So maybe just bring us into your reality as you’re taking on this big role with everything that’s going on in the background.

Wendy [00:13:49]:

Yeah, I, um, it’s interesting. So at the time, I was the youngest president of the ABC-owned stations. I was definitely the first president of the ABC-owned stations that had actually not been a general manager. I had not run a television station, and now I was responsible for overseeing 8 television stations. And so much of that was because from a daily broadcast television perspective, The stations were optimized. I was very fortunate to become the president of an organization that was peerless in terms of its local television news offerings and business. It was, and in many respects still is, the very best, best in class. And so choosing me was very much a commitment, a visible signal of what the future would demand, which included ensuring our brands and our business were relevant, yes, for today, but also for tomorrow. And that required a very different content strategy, a very different product and distribution strategy. It required us to look at what we were doing operationally in completely original ways. What should be centralized? What should stay local? What are opportunities to bring data and technology into the system in ways that drive effectiveness in a consumer-facing way, that drive efficiencies behind the scenes. And I have always been someone who sees around the corners, who, and it’s curiosity first that ultimately drives that, right? I’ve always wanted to understand where the business was going, where audiences were moving, to build, to transform. And so that was very much my platform when I went in and interviewed for the role. And to Bob Iger’s credit, to Ben Sherwood’s credit, they understood that the future would be determined by ultimately who had the courage and the conviction, the vision and the values to bring it to life.

Darren [00:16:21]:

Yeah, so I want to talk about the challenge of coming into a role like that, really, to execute a transformation. And I’m imagining, like, not everybody was completely on board with that vision, or maybe they were. But talk about what were the challenges and how— what was it about your leadership that was effective in getting people motivated and aligned around a vision that you were seeing? Maybe You know, it’s a vision that not everybody was sharing.

Wendy [00:16:51]:

Look, I think spending most of my career in messaging, in narrative, in storylines, and ensuring that what we are creating speaks to the hearts and minds of the people that ultimately we rely on to either drive our business forward because they watch us, because they engage with our products, those learnings ultimately helped me win the hearts and minds of the ABC-owned television station leaders and team members, right? When you think about it, in both cases, you’re speaking to thousands of people with their own sense of who you are as a brand, their own ideas for how to drive in terms of internal the organization, forward. They’re motivated by different things. They require different signals. But if you come to an understanding that most people, most people do not come to work every day inspired by the desire to drive OI or the stock price, right? They’re there because they believe in the mission. And that’s where narrative and story lands. You know, you need to be able to move people emotionally and operationally at the same time. And so my commitment always, and I think how I showed up always, was first building a coalition around the vision and the values. You simply cannot take a hill on your own. And then being able to articulate that vision in ways that, again, resonate with people who are connected to the vision emotionally, and then people who wanna understand, okay, we’ve heard big transformational plans before.

Darren [00:18:44]:

Mm-hmm.

Wendy [00:18:45]:

What are gonna need to be the measurable goals? What will be the signals of change? What’s the accountability piece? How can I believe that you’re actually going to drive us forward? So building a coalition, coming up with a messaging and narrative, that wins hearts and minds, and then creating the visible signals, the momentum that ultimately demonstrates like, this is serious, right? We’re in it for the long haul because I’ve never been in a change or transformation initiative that was set it and forget it. It’s two steps forward, two steps back on a daily basis. I think it was James Marsh who said, that skillfully balancing the poetry and the plumbing is the job of leadership. And I think that’s the case when you’re driving a change effort, especially the ability to articulate a vision in such a way that it moves people while being, like, embedded in the plumbing and in the operation to ensure the vision sticks.

Darren [00:19:55]:

It’s such a great quote. And I’m interested maybe just going into the plumbing for a moment. And I’m a big believer in the power of signals to communicate this is serious. This isn’t just another messaging that people can ignore. What were some examples of some powerful visible signals that you set and sent that got people’s attention and had them believing this was really real?

Wendy [00:20:22]:

I think there’s necessity in both long-term and then day-to-day signals. And I always, whenever I advise leaders who are new to a position or who, who are trying to drive change in their organization, I often ask, what will you do in the first 30 days and the first 60 days? And it doesn’t need to be big, but it does need to be a visible signal of change that demonstrates the seriousness of your vision. It’s not as beautiful as a quote of James Marsh, Plumbing and Poetry, but it is nonetheless as viable when I say that hope is not a strategy. And the reality is, is that if you’re going to articulate a vision and values-based goal and path forward for the organization, then you need to instantly set up the workflows, the systems, the practices that are ultimately going to help ensure progress in that space. So for instance, at ABC, it was very much communicating that we would no longer hold stories for broadcast, full stop. If a story broke, and this might seem very quaint and, you know, early 2000s in terms of, you know, how people felt about news and editorial distribution and consumption at the time, you know, organizations would hold stories for broadcast. They’d hold it for the evening news because that was the flagship. That was where we wanted our viewers to, to find us. It was still very much appointment television. So the shift from holding stories for the broadcast behemoth to releasing stories as we learned, as we were able to report across digital, across social. That was— that was a new way of thinking. And so by immediately setting that as the expectation, “We will not hold,” it became a line in the sand. And once you create that line in the sand, you start changing culture. You start creating space for people to offer up their own thoughts on how to modernize, on how to transform. And then it becomes, you know, a crescendo across the organization. And that is very much, I believe, what happened with the ABC-owned stations.

Darren [00:23:00]:

Such a powerful example. How, uh, how far into the role were you when you made that decision, and how difficult was the decision for you or not?

Wendy [00:23:11]:

It wasn’t difficult. I, you know, it’s, it’s interesting. I have, once I see something so clearly and once the team that I’ve surrounded myself with has pressure tested and either pushed back, challenged, or advocated for, I have always been fairly decisive in moving forward. I think that’s incredibly important. You know, we talk about signals of change, we talk about what it takes to move a change initiative or an organization forward, and it all comes down to momentum, right? Visible signals of change are signals of momentum. If you are indecisive, you’re holding up or you’re pausing an entire organization as they wait to hear what you will do, what you will decide. So once you do decide, the ability to move, that urgency, that speed, I’ve, I’ve always felt that. I’ve always felt that the audience, the technology was moving faster than we were. And it drove so much of my decision-making, so much of the team’s decision-making that even with imperfect information, you needed to take a stand on how the organization would move forward. Are you going to be set in your ways? Are you going to operate and think like a legacy company? Are are you going to rewrite the future by taking conscientious, innovative steps forward? Will you be agile? Will you adapt? And to me, the spirit of that, the meaning in that is almost more important than any one decision itself.

Darren [00:25:18]:

Yeah, totally agree. And, and you, what was this first 100 days or, How, how far into your tenure did, did you make a decision like this?

Wendy [00:25:26]:

Oh, soon.

Darren [00:25:28]:

Yeah, I imagine it was.

Wendy [00:25:29]:

Yeah, very soon. I mean, there are some things, again, you know, there are some things that require real analysis, real pauses, things that you cannot— are harder to correct. But if you are sitting at a table on a Zoom, in person, making a decision, and you can see we’re going to make this decision, and then you can tell everyone. And if, look, it doesn’t work, we’ll come back, we’ll address it. This isn’t brain surgery. We’re in the business of television. We’ll come back and we’ll, we’ll address it. But for now, we all know we need to be leading the way digitally. We need to be leading the way in streaming. So let’s make this move and then let’s come back. Let’s always keep the communication lines open so that we can revert, adapt if needed. And 9 times out of 10, 30 days, 60 days later, it just becomes part of the operation. It becomes part of the fabric. You can start pointing to milestones. Look, we drove X number of people. On our digital platforms today as a result of we served our viewers in a more direct way. We found our audiences versus making our audiences come to us. And isn’t that what it means to be a public service in the news and information space? So I think introducing some of these changes early in the process immediately communicates the kind of leader you’re going to be. You get a win, you earn trust, you make another change, you get another win, your trust continues to grow. And so then when you’re a year into the organization and you have these multiple trust deposits because of the number of changes you’ve met, you’ve taken on along the way, the momentum that you’ve built along the way, then you can really lean into these incredibly difficult decisions, these harder decisions that are more difficult to rewind.

Darren [00:27:49]:

Any examples of those that you faced in, I think it was your 3-year tenure at, in this role?

Wendy [00:27:55]:

Yes. Well, look, it’s, it’s hard to not talk about that without talking about the pandemic. And I think the pandemic is one of those moments where everything felt existential, Taryn. You know, are we going to continue to put reporters and photographers in the field? Do we believe lives are on the line if we do that, if we make the wrong choice here, if— I make a decision with imperfect information in this situation, am I risking someone’s life? And that feels impossible to walk back from or to shift in real time. I, I think the pandemic is the most humbling leadership experience of my career because you’re taught or you believe that when you’re running an organization of that size, you are meant to have the answers. You’re meant to bring together the smartest people, the smartest team members, executives, bring them, surround yourself with, and then ultimately have enough information at your back where you can make a thoughtful, almost perfect decision. And no one had ever experienced this before, and the threat had never been at this level. And so you quickly accept the fact that there is no blueprint, there is no spec, there’s nothing hiding in your office drawer that’s going to guide you forward. And you do the best, very best you can, and you acknowledge what it is that you don’t No.

Darren [00:29:52]:

Yeah. Any specific thing that comes to mind for you and, or, you know, key lesson learned given this dynamic for you as a leader?

Wendy [00:30:00]:

It’s interesting because often in these moments of challenge, and I think this is life and ultimately what helped me when I moved to CBS News and television stations, I often think that crisis reveals character. It’s also just an incredible learning experience about how to deal with unknowns and how to deal with complexity. I also think it can accelerate initiatives that maybe would’ve taken 3 to 5 years on a roadmap instantly become overnight. I mean, when you think about what the pandemic required, we went into 24/7 coverage and we did it across digital, social, television. So any cultural, you know, concerns about doing that quickly eroded in service to the viewer. You know, we talked about adopting new ways of distribution, new technologies to make our operations more efficient. The, again, the cultural obstacles to that went away immediately while engineers and, and some of our smartest and brightest minds in the tech space instead instantly figured out a way for us to do remote work, how to not be in a studio, how to do everything with— in a bit of a smarter, more, you know, progressive, more modern way. So you learn whether it’s the acceleration of the entire organization through the pandemic in modernizing operations, in modernizing how we were reaching viewers, And then I think also the acceleration from an individual leader perspective, and then as a group, what it taught us, how it elevated us, elevated me as a leader. I don’t know that we would’ve moved as fast. I don’t know that I would’ve been as prepared for what was to come in my career if not for that moment, if not for that experience.

Darren [00:32:09]:

Yeah, the saying, you know, never let a crisis go to waste comes to mind. I had Frank Blake, the former CEO of Home Depot, on the show recently, and he became CEO in 2007, which was right when the residential construction market was collapsing, and then of course 2008, and had a similar reflection. So really interesting to hear that from you. Maybe just we could sort of turn now to CBS. So you, you wrap up your 3-year run at ABC, and you get this incredible opportunity to run CBS. And maybe talk about how that opportunity came about, what that opportunity was for you, and how you went into that. What were you thinking? What was your vision when you took that role?

Wendy [00:32:53]:

So I, I loved working at ABC. I loved leading the ABC-owned stations forward. Before I went to ABC, I had worked for 2 CBS-owned television stations. So I knew the company really well, and I saw so clearly how I could lean into that organization and really help build it in terms of the public service, the promise to viewers that I knew the ABC-owned stations felt so inherently. And the opportunity to build, to create, has always been part of my DNA. Maintenance or minding the store has never been of interest to me. And so the opportunity to move into a role that I knew was a bit chaotic, was a bit messy, that required vision and value-led leadership, that required signals of change, that had really done very little in terms of transforming for the future. I, I felt they needed my kind of leadership. And so I felt that pull. And I had not worked on the network news side before. And so, of course, I was intrigued. I mean, to me, every local— every national story is a story that started locally. And the opportunity to go into CBS News and stations and unite the local stations and the network to super serve the viewer, to scale the business, was just incredibly incredibly attractive. I, I couldn’t say no to that as much as I loved leading the ABC-owned television stations. I mean, how often in your lifetime does an opportunity like that come along? A, to lead the great CBS News, and then to, you know, ultimately be responsible for charting its path forward. Like when you think about the history of broadcast television news, CBS News invented it. CBS News created it, and they did it with a whole lot of chutzpah and a whole lot of scrappiness. And to be able to come in and with equal parts swagger and soul, like, restore that and elevate it, it was, it was— I said, I said yes immediately.

Darren [00:35:34]:

And if you think about your own leadership arc, this is now your second CEO role, bigger scale, both the local owned stations and the news part of that business, and what did it require of you? What were you ready for and what did you need to stretch into given what I imagine was a bigger, different, maybe more complex challenge than what you had been facing at ABC?

Wendy [00:36:01]:

It was definitely more complex. From a local station perspective, there wasn’t the same foundational purpose, meaning that inherent understanding at every layer, at every level of the organization, what it means to work at the CBS-owned stations. And so going in and instantly resetting and reminding people of why they’re here, what it means to work here, to be the very best in local news and information, to serving our community. That was day one. And at the time, the CBS-owned stations had been in the paper for— there have been any number of investigations, allegations of wrongdoing by prior leadership. And that was— it haunted the organization. And so I remember on day one, I gathered the general managers together and said, we’re here to serve our communities. We’re here to be the very best in news and information. We’re here to build a business around that, and we’re here to do the right thing. And if you have any questions about what it means to do the right thing, I’m here. And so for the OWN stations, it was very much the vision and value set. And for CBS News at the time, I had a co-head. So he was focused on the network news piece, and I was focused on local in my first 2 years there. But it was about collaboration. How do we bring local and network together? And that was messy because the network had an opinion of the quality of their storytelling and their coverage and often looked at local as less than. And prior, um, leadership on both sides had made it very difficult to work together. And so the systems and the processes weren’t there, without a doubt, that’s true. But more challenging was the culture piece and the fact that no one necessarily believed in the value of working together. So talk about changing hearts and minds, talk about enacting visible signals of change, It was so incredibly important in the first 30, 60, 90 days to be in front of as many people as possible signaling what it would look like to work at this organization moving forward.

Darren [00:38:41]:

Yeah, with the extra challenge of, at least for the first 2 years of your role, not having complete authority, right? You were in partnership, and I imagine that added a layer of complexity. Did it help? You alluded to it after 2 years, you sort of had both roles together. What was the first 2 years like? How did that transition work? And how important was it that you had the full sort of authority at some point?

Wendy [00:39:09]:

I think the first 2 years, it was incredibly important. The stations required so much attention.

Darren [00:39:17]:

Yeah.

Wendy [00:39:18]:

And because we had such success at the station level, you know, I talked earlier about deposits of trust. You earn trust on a day-to-day. The team at CBS News saw that. They saw what we were building at stations. They saw the changes that were happening. They felt now the collaboration between CBS News and stations. So when I was named responsible for the entire portfolio, I was, I was accepted because I had the 2 years where people were able to watch me in their habitat and they saw the success, they saw the milestones. And so I actually think the 2 years for me as a leader was helpful. I think it slowed down the unification of news and stations of that ultimate vision to, you know, let’s bring more local reporting into our national news organization. Because by the way, local reporting, local television reporting is more trusted, more relevant than most national news content. And then from a national news perspective, how do we bring some of that quality, some of that rigor, that editorial excellence? How do we integrate that more into the local space? Those things were slowed down because of the 2 years. But there had also been any number of successes. Like, we completely unified network news and stations into a 24/7 streaming operation. And You know, took that product from number 3 to number 1 in a year and a half because there was collaboration. So I would say the, the biggest shift in having the entire portfolio was just I was able to move faster on so many of the things that we had on a roadmap.

Darren [00:41:20]:

So I’m, I’m wanting to imagine you’re sitting with a CEO who’s about to step into an environment with sufficient scale and complexity, like you faced in both roles, frankly, and maybe in particular at CBS, what would— what’s the one piece of advice you’d offer? And let’s assume that that person has maybe been CEO before, but not really with the kind of complexity that, you know, we’ve been talking about.

Wendy [00:41:49]:

One piece of advice. That’s tough. I have a few. So, I think there are two things I would share with a CEO or a new CEO. First, you know, when you enter into a role, when you are CEO of a complex, a massive organization, thousands of people, billions of dollars in revenue, you become surrounded by well-intentioned scaffolding and infrastructure by an entire team of people who are there to help you as a CEO. And that is amazingly helpful. It is wonderful in so many ways. But I would advise to resist the scaffolding, resist the layers and the levels of support, to always be working in the organization versus working on from on high. And the things that got you into the CEO chair, I often find that they’re the things that people start removing from you once you’re there. Well, you know, we’ll, we’ll take first draft of comms or, you know, we’ll do this series of meetings and then we’ll boil it all down to a PowerPoint deck that we present to you. And if you are leading a transformation project, and who isn’t right now, we’re all changing.

Darren [00:43:23]:

Yeah.

Wendy [00:43:23]:

In response to new audience and business and consumer realities. If you are in the middle of it, you have to stay close to it. You have to stay immersed in it. So that would be one piece of advice. Resist the well-intentioned scaffolding and infrastructure work in versus just on. And then the other thing I would say, I think we talk a lot about resilience as leaders, right? The ability to learn from our mistakes, to recover. And I’m right now a bigger proponent of METTLE, M-E-T-T-L-E. And it’s interesting because Leslie Stahl, 60 Minutes, has been with CBS News for decades. She’s a force. When she received the First Amendment Award in 2025, she told me after the fact that it’s a privilege in this life to test our mettle, that it’s not so often that we get the chance to put so much on the line, to plant our flag for a worthy principle. And I started thinking a lot about the word mettle versus resilience, right? If resilience is how well you recover from a storm, mettle is the extent to which you stand in it. And I grew up in New Orleans, right? So I’ve been through hurricanes, I’ve been through gale-force winds. And if you’ve ever been through that, you know that it takes just about everything you have to stay upright. And I think increasingly, as CEOs, as leaders, our teams need mettle from us even more so than resilience. Do they see us standing in the storm with courage, with conviction? Do they see our values staying true when when everyone is watching, when the consequences are so intense that it will affect people, jobs, teams, families. And to me, that’s the requirement of a leader in this moment right now. Do you have the mettle?

Darren [00:45:49]:

I think it’s an amazing piece of advice, and it occurs to me that it’s advice that anyone— you don’t have to be a CEO— could benefit from, right? We’re living in a world where everyone, no matter what their position in their personal or professional lives, is being tested. And what an extraordinary piece of advice for anyone listening to have received. How has that been for you? I know your mettle has been tested. You can’t be in your industry, and frankly any industry at this point, without your medal being tested, what has it meant for you? And, you know, as you sit back and look back on this incredible career, and I know that you’ve got more career left in you, what does it, what does it mean?

Wendy [00:46:32]:

I do know so much more about myself as a leader and as a person, and I’m so much more grounded now in why I’m here. And I think, you know, Leslie’s comment that it’s a privilege to be able to test your mettle, she’s right. When you’re going through a challenge, an obstacle, there’s a bit of a woe is me aspect to it. But the reality is, is if you’re a leader, it’s a privilege to be able to demonstrate that you are a champion, that you are an advocate for the people who look to you for leadership, for the work that they’re doing each and every day. What an amazing thing to be in that position, to take a stand in service to the organization that believes in you and wants to believe in you, wants to believe in something. And so for me, it affirmed why I chose this journey to begin with. It affirmed why I want to continue this journey moving forward. The role of a leader has never been more important. And it’s also, you know, shifted my thinking in terms of what integrity is. You know, there’s that saying, Darren, that integrity reveals itself when no one is watching. I actually think integrity reveals itself when everyone is watching.

Darren [00:48:13]:

Yeah.

Wendy [00:48:14]:

And so being comfortable when everyone is watching and still staying true to who you are and staying true to the people that trust you, whether that’s your family or your team, that’s— that is how I’ve led, and that is how I will continue to lead.

Darren [00:48:33]:

Yeah, it sounds like you were made for this moment in many ways. And I’m wondering if there was a person or persons in your life, or a moment in your life that you could trace the line back to where you knew you’d be that kind of person that would stand in the storm and hold true to her principles and values and act with integrity. Is there, Sarah, is there anything that you could look back on?

Wendy [00:48:58]:

I think two things. I mean, as a— as a kid, I mean, I grew up in Louisiana in lower middle class family. My dad worked on the oil field, you know, 4 weeks on, 4 weeks off. That’s intense. And, you know, he showed up every day doing the right thing, what he thought the right thing was. And so I saw that, and my mother was the same. You know, she lived for my brother and I. And so I always, I think, took away from that, that it’s one thing to say you believe in something. It’s one thing to support and hold up something. It’s another to actually work in service to it and make decisions that are best for the family, for the organization, for the group versus for yourself. And so I think I learned that early on. And then I had a great general manager at my station, um, at KBC in Los Angeles. And he loved spirited debate, loved it. And he would bring everyone together in the room and we would talk about, well, what’s the best thing for the business? What’s the best thing for the brand? And then Without fail, at the end of every one of those meetings, he would say, okay, but is there a right thing to do here? And without fail, if there was a right thing to do, that was the thing we did. And I’ve always, I’ve always clung to that because these are difficult decisions, right? Like, will you, will you make a decision that’s ultimately going to put yourself, your position, your team, in jeopardy, what is the right thing to do? It’s immediately clarifying. Immediately makes all the noise disappear.

Darren [00:51:01]:

Yeah, incredible advice and a great way to sort of bring our conversation to a close. I’m so grateful to you, first for being in the conversation on the show, but also for being such a wonderful example of leading with purpose and with mettle. And I’m taking away a really powerful lesson in leadership from our hour together. So thank you so much for doing this conversation.

Wendy [00:51:27]:

Thank you, Darren. Thank you so much.

Darren [00:51:36]:

What a thoughtful and deeply human conversation. Wendy’s journey from a young journalist in Louisiana to leading two of of the most influential news organizations in the country is a powerful reminder that leadership is ultimately about purpose and conviction. What stood out most to me was her reflection on Mettle. In moments of real pressure, when the future is uncertain and the consequences are significant, leaders are called not simply to recover from adversity, but to stand in it, to lead with clarity, courage, and integrity, even when the path forward isn’t obvious. It’s a perspective that feels especially relevant today when so many leaders are navigating complexity and change. Wendy’s example reminds us that the role of a CEO is not just to manage organizations, but to steward institutions, serve communities, and remain anchored in the values that define who we are as leaders. I look forward to being with you on the next episode of One of One. Until then, I hope you live and lead with courage, wisdom, and above all, with love.

Over the next eight years, Frank restored Home Depot’s customer first culture. He paused new store openings to reallocate capital toward improving the customer experience, and led with a deeply unconventional philosophy that the CEO belongs at the bottom of the organization, pushing purpose upward rather than letting authority cascade down. This episode explores how to lead in crisis, the truth revealed by capital allocation, the discipline of focus, and what it really means to serve an organization.

Full Transcript

Darren [00:00:02]:

Hi, everyone. Welcome to another episode of One of One. I’m your host, Darren Gold, CEO of the Trium Group. My guest today is Frank Blake, former chairman and CEO of the Home Depot. Frank stepped into the CEO role at Home Depot at a moment of profound uncertainty. It was early 2007. The housing market was beginning to unravel. The company was facing activist pressure, and culturally, Home Depot had lost touch with the values that once defined it. Frank had never aspired to be a CEO, and yet he was asked to lead one of the largest retailers in the world through one of the most turbulent periods in its history. Over the next eight years, Frank delivered a remarkable turnaround. He restored Home Depot’s customer first culture, paused new store openings to reallocate capital toward improving the customer experience, and led with a deeply unconventional philosophy that the CEO belongs at the bottom of the organization, pushing purpose upward rather than letting authority cascade down. What makes Frank’s story so compelling is not just what he accomplished, but how he did it. With humility, clarity, moral courage, and an unwavering belief that the CEO’s highest obligation is to create a successful employment experience for the people who serve customers every day. This is a conversation about leadership in crisis, the truth revealed by capital allocation, the discipline of focus, and what it really means to serve an organization. Please enjoy my wonderful conversation with Frank Blake.

Frank, it’s so great to see you and so great to have you on the show. I really appreciate you agreeing to spend the time.

Frank [00:01:41]:

No, thank you, Darren. It’s great, Great talking with you.

Darren [00:01:44]:

Yeah, I’ve been looking forward to this conversation for a number of reasons. One of them is just to reconnect with you and catch up through the conversation itself. But most importantly, I started this podcast, really, with the intention to have really deep conversations with CEOs I respect immensely, and I put you at the, you know, at the very top of that list. So I’d love to start our conversation and probably focus our conversation on the seven years you were CEO at Home Depot. There’s so much more to you, Frank Blake, than those seven years. But it was a seminal moment. Of course.

Frank [00:02:23]:

Actually, eight.

Darren [00:02:24]:

Yeah, eight. Okay. 2007 to 2014. So if you include the eight years. Good.

Frank [00:02:30]:

No, we count those dog years.

Darren [00:02:33]:

So eight years. Let’s focus on that period or at least start there and bring to life you as a leader through that experience. And in some ways, as I understand it, and I hope we can bring to life in our conversation, I would call it a bit of a. A masterclass on CEO effectiveness. So I’D love to jump in there and maybe have you take us back to that moment in time when you were asked to step into the role.

Frank [00:02:59]:

Well, first off, it’s great being on your show, Darren. We’ve had the opportunity to work in the past. I always enjoy your thought processes and insights. And so I very honored to be included in this. I am probably unique amongst your guests in that I never had an aspiration to be CEO, nor really an expectation to be CEO. In fact, when the board called me at the very end of 2006 and told me they were parting ways with the then CEO of Home Depot and asked me to be the incoming CEO, I can genuinely say that I’d never given a thought to being a CEO. I had never thought, what would I do if I were running this company? What would I do if I were in charge? And I didn’t expect anybody to ever offer me the job and I wasn’t angling for it. So it was a surprise. It was a surprise to me, frankly. It was a surprise to the entire organization. And. And in fact, my first comment to the board was, I need to spend a day to think about this, to think about whether this is something I can do. And you should spend a day thinking about whether I’m the right person to do this. Because, you know, Home Depot is one of the largest retailers in the world. While I’d been at Home Depot for a little over five years, my area that where I’ve been working was in acquiring companies, largely doing real estate and not being operationally involved in the retail business. So it was both a new area for me to go into and my background was in leading smaller teams. So I’ve been in business for a while. I’m a lawyer by training. I transitioned from being a lawyer to basically being someone who acquires businesses. I did that at ge. I did that for Jack Welch while I was at ge. I did that at Home Depot before becoming CEO. But that’s a very different job, right? You’re managing small groups of highly motivated people to go out and do an action that has a finite beginning, a finite end. There’s not a lot you don’t have to worry a lot about motivating people and all the rest. It’s very different. And so there were a lot of challenges right off the bat in thinking about what would it mean to be this, what does it mean to be the CEO of a company? And again, as I said, probably unlike most of your guests, that wasn’t a topic I’d given any Thought to, yeah.

Darren [00:05:46]:

So I imagine the board obviously saw something in you, given the context of the time and where the company was. So what do you think they saw and maybe describe what was the context? Back we’re now in 2007 for people.

Frank [00:06:01]:

Right at the very end of 2006 and then I started right in the first days of January. One thing I know is that the board saw a lot of me because I was in front of the board frequently to pitch acquisitions for the company. So I assume that they were relatively comfortable in the way I approached that job and the way I answer questions, the thought process that I approach issues with. But honestly, it was a big jump for them. I know this in retrospect, I’m glad I didn’t know it at the time, but I know that they debated a lot whether the right approach was to put me in on an interim basis, see how it works, works out, and then decide whether, do a search and then decide whether I should be CEO or not. And I think the point of view that prevailed was, well, he’s never going to work. This is never going to work if he’s interim. So they took the plunge. And the timeframe was also an interesting one because for the housing market. The housing market had started to significantly soften in mid-2006 and by 2007 was in a full on reversal. And Home Depot, While it’s not 100% correlated with housing, there’s obviously a lot of correlation with housing turnover in particular. So the market was starting to go down significantly. And we also had an activist investor who was interested in getting in on the stock and getting a seat on the board. So there was a lot going on. Right. Right from the start. Yeah.

Darren [00:07:54]:

If you read the sort of as an outsider, the, the accounts of Home Depot at the time, there was also something culturally going on at, you know, the way I’ve heard it described, and I’d love yours, of course, was sort of Home Depot had lost its way, lost its soul, lost sort of the original culture. Is that a fair description or what was the state of the company culturally, at least at that time?

Frank [00:08:16]:

Yeah, I think there was a lot of cultural turmoil, I think would be a fair way to put it. There was my predecessor, Bob Nardelli, for whom I had worked at GE and had been in the succession process for Jack was very, very highly thought of within Georgia brought with him a lot of the GE frame of mind and business practices. And there were a lot of clashes between that and the Home Depot culture. And so that was also A major issue. And we’d been, you know, we had another competitor who was gaining share. So there were a lot of dynamics going on.

Darren [00:09:01]:

Yeah. So you’re obviously aware of all of this and you take this 24 hour period to make the decision. I’m curious what was going through your head and what ultimately led you to a yes.

Frank [00:09:12]:

So the most important comment that was made to me in this literally last day of 2006, the most important comment was made to me by my wife who said, don’t think if this decision is about you. And that was actually a really helpful framing for me to say, do I think I know what needs to be done? I think I had in my mind, while I hadn’t been operationally engaged in the business, I’d been strategically engaged in the business. I thought I knew what needed to be done and there were lots of other people that I could rely on to help me do it, and that it’s best to approach that job as understanding that it’s not all about you.

Darren [00:09:56]:

And just so I understand that, because I know there’s a threat of public service in your background as well. Is there some connection there to that sort of servant orientation? Or when you say think of it not just about you, what did that really mean to you?

Frank [00:10:15]:

Not a public service. This was not, oh, I can sacrifice myself for others on this. That wasn’t the framework. It was more the framework of this. Being successful at this job was not going to be simply a function of how good am I Being successful in the job would be measured by how thoughtful I am about the business and how I can get a great group of people aligned around what the business needed to do. And I know you’ve had as a prior guest Carol Tomei, who is now the CEO of ups. Carol was my cfo. I’m very proud of the fact that there are a lot of folks from Home Depot who work for me at Home Depot who are now or have been CEOs of very significant public companies. So I had a very skilled team helping me. Yeah.

Darren [00:11:14]:

Well, it says a lot about your leadership as well, I’m sure. So I’d love to jump into that. So you say, yes, you take on the role. What was the vision as you entered the role? What actually started to transpire?

Frank [00:11:29]:

So, such a great question. So I’ll start with a cultural point. I tell this story because it’s not a story, it’s true. I pick up the phone and I call my son. My son happened to have served in Iraq and Home Depot Had a program for returning military veterans working in the store. And he had done that, I mean, since when he got back from Iraq. And by that time he had been assistant store manager, store manager in Colorado. At that time, he was a store manager in Wilmington, North Carolina. And I called and I said, hey, interesting news. I gotta be the CEO. And he burst out laughing. And I said, no, no, no, no, really, I’m going to be the CEO. And he laughed some more. And I said, no, no, I’m really going to be the CEO. This is serious. And he said, well, good luck, dad. Good luck. And I said, well, I. You know, we have large retailers have break rooms in the store, and most retailers have a TV in there that beams in the company message. And the associates figure out a way to watch TV on it. But there’s this back and forth. But I was supposed to get on the network and speak to what was then 350,000 people about just what you said, darren, okay, so what are you going to be about? What’s the vision here? And I said to my son, I said, what do you think the associates want to hear? What would they be interested in? And he said, I have no idea, but I will tell you how I start my weekly store meetings. I said, great. What do you do? He said, I take the book that was written by Bernie Marcus and Arthur Blank, two of the Home Depot founders, and it’s called Built from Scratch, if your listeners get a chance. Still available. It’s just one of the iconic books about entrepreneurial success in America. Cause Bernie and Arthur were fired from their prior job before they started Home Depot. I mean, it’s just a great story. Anybody said, I start my weekly store meetings by reading something from Built from Scratch. So I said, great idea. I’m gonna do the same thing. So I pick up the book and I’m kind of flipping through what would be an appropriate thing to start with. And I started as my initial message, the inverted pyramid, which was very much part of the Home Depot culture, where think about the leader being on the bottom of the pyramid rather than on the top of the pyramid. And I didn’t talk a lot about that, but I said, this is what we’re going to go back to, where I visualize my job as trying to help you do your job in terms of customer service and that we become the best customer service retailer in the world, which was very much in the culture of the company. And that not only connected well, because I think again, it referenced back to something in the culture of the Business. But I also, for the next eight years, I tried to figure out what does that actually mean? What does it mean to lead an organization where you think of yourself as at the bottom of the organization rather than at the top? And my conclusion is most people look at that and say, oh, that’s a nice statement of humility, and you’re on the bottom. And that’s element. But actually what I think is it’s one of the truest and most profound business concepts because actually how organizations work. And I find so frequently that CEOs first, I mean, I could go on and on just about this topic, but CEOs often, if they’re mentally putting themselves at the top of the pyramid, they think that gravity is their friend. They think that what they say falls naturally down through the organization to thousands of attentive years. And that just is not true. Most people in most companies there isn’t. We’ll let that message cascade down. People are, yeah, okay, that’s fascinating. I’m going to keep doing whatever I view my job as and that it’s much more useful as the CEO to be thinking structurally. I have a message, I have a vision that I need to push up through the organization. And I have to think about what are the strategies that is going to drive that so that the layers above me in the organization actually internalize my message as their message and move it on through the organization as well. Very, very different thought process. I’d like to say both a more demanding thought process but also a more accurate thought process because leaders, organizations have a way of. Organizations are not just sitting there waiting to hear what their CEO has to say to them.

Darren [00:17:02]:

Yeah, this is such a fascinating point. So I want to just press on it a little bit. Is this notion of thinking yourself at the bottom of the organization and having to push consistent messages upwards is a really different one for most CEOs, I think. So what did you do specifically as you thought through that harder question of. Of cascading up instead. Instead of just having gravity naturally pull it down.

Frank [00:17:28]:

So again, I. This is, to me, I’m passionate about this topic because I believe, I mean, I. First off, I would take as a proof point someone who really did not have leadership at scale experience into this job and having this as a singularly helpful way of thinking about things. And in fact, it’s the case that the guy I worked for initially at GE bet my lead director 10 grand that I wouldn’t make it six months. So there was a lot of skepticism about whether I could do this job and I think a lot of the ability to do it came from this framework. So let me give. I’ll do my quick five minute. So if you reframe it and you think you’re at the bottom of the organization, at the top, rather than at the top, there are a couple of things that I wish your audience could have a visual, but there are a couple of things that come immediately from just looking at the visual. The first is it’s sort of a humble statement, but is it really because you’ve put the whole weight of the organization on yourself. So understand that you have the weight bearing job in the company and then from that you understand, boy, I better have other people that next block above me, they better be weight bearing capable also. Because if the whole thing’s on my shoulders, this is going to be tough. And so you’re into a different kind of. I always say, if you’re choosing leaders in that supporting you, whether you’re a CEO or the leader of any organization, you want people who take what you want to get done, your vision and move that to the organization, rather than viewing themselves as people who take what the organization wants and tell you very, very different framework gets you much more oriented to people who radiate out and who are capable of radiating out through an organization, because that’s what you need. Secondly, again, visually, everything’s uphill. These are tough goddamn jobs. You gotta be ready to work hard, you’ve gotta be ready to push something uphill all the time. And as I said, as a CEO, gravity is not your friend. And you’re pushing the weight. And particularly if you want to change things, you’re pushing against the weight of organizational inertia every single day. Next thing is you realize, okay, so how do I start doing that? You need to engage everyone in the layers above you in whatever you’ve defined as your mission. If you think seriously about that, the first thing that you immediately trip across is, I can’t have a lot of those things. I can’t have a lot of things that I’m trying to push. Cause I won’t remotely be successful. I’ve got to have four or five things at most that I am consistently moving so that everybody’s hearing the same message every day. And we’re investing that way and we’re thinking, communicating that way. Consistency and limited focus are hugely important. Then you think about communicating. Communicating is really interesting. It’s just really interesting. I’m always amused by long corporate memos and all the rest of that. The best way you communicate, and I think this applies to any scale above 10 people. The best way you communicate is engage people’s storytelling. What are the stories you’re telling? And the best way to tell the stories that engage people that understand where you’re going is through recognition and celebration. You take the people in your organization who are doing great things, who are doing what you want, you take them literally or figuratively on the stage and say, this is it. This is what great looks like. You want to know who we are, this is what it is. And people start to understand that. And you get kind of a flywheel effect as people understand where you’re going. And then you got to think about a different way of listening. So every. Bernie Marcus, one of the founders of Depot, when I took the job, he had a great statement to me that every single CEO understands, and if they don’t understand, boy, they got big problems. But he said, look, you’re going to go into your office and have your team around the table and you’re going to tell a joke. He said, they’re all going to laugh. Just remember you aren’t funny. And that is the most profound truth. So organizations start to adapt to their CEO, to put their CEO in a bubble of information that represents either they learn what the CEO likes to hear, but they don’t necessarily want to give the CEO what the CEO needs to hear. It’s not what the organization does. Nobody in any organization over 10, and maybe it’s over 2 thinks that the path to success is telling the CEO what’s actually going wrong. No one thinks that. I used to joke if I walk the store and ask the store manager, how’s everything going? There is only one right, intelligent response from every store manager. And the response is, everything is going great, sir, you are amazing, and please leave. That is the right response. So you have to actively listen and listen both at the. You know, who are the people interacting with your customers, understand your associates who are interacting with your customers, understand their frustrations, what literally you can do to make their job better in dealing with the customer. But you have to listen to every single part of the organization, and you have to find your own distinct ways of creating enough trust so that people will tell you where you’re screwing up.

Darren [00:23:57]:

So I have so many questions. I want to start with the techniques or maybe an example or a moment that stands out to you where you. You didn’t feel like you were getting the truth and how did you disrupt that pattern, or was it something that you were just doing, sort of Consistently.

Frank [00:24:14]:

No, no. So, first off, I’ll give you the hacks because I learned my. I had two hacks. I’m sure there are others. One of my board members, we were having this conversation and he actually suggested it, and I saw him do it all the time, and it was brilliant. He would ask if you take Project X, his question to somebody would be, why isn’t this project working well? Now he would say, I have no idea whether it’s working well or not, but if I ask that question, odds are somebody’s going to tell me something because they think, look, he knows it’s not working well, so I might as well be honest. And it’s absolutely true. And every once in a while somebody says, hey, it’s going great. What are you talking about? But that’s pretty rare. So, you know, just assume an openness by saying, I know it’s not working. Tell me why. The second is asking questions on a scale. So I would always say whatever the topic is on a scale of 1 to 10. And you think of something fancifully bad as 1, something fancifully great as 10. In between 1 and 10, where are we? And people will answer, you’ll get the six and sevens and eights. But that’s an opportunity to say every single time. That’s an opportunity to say, okay, if it’s six, how can it be seven? If it’s seven, how can it be eight? So you’re actually engaging in conversation to try to find out where you can improve things. And then the most important thing in the end is acting on stuff. Take the things that aren’t working and do something, and people start seeing it. So you say a pivotal event. There were lots of things that I was told we were doing wrong that needed to. But my favorite was early on. Must have been within the first six weeks. I don’t know. Somebody had complained to me, and rightly so, that we hadn’t replaced our shopping carts and they were getting worn and wheels were busted and everything. So we put in a program to buy a lot of shopping carts. And I get this email from a store manager saying, you know, when they announced that you were the CEO, I was really depressed because you’re a lawyer, you’re from ge, you really didn’t know retail. And I thought, God, this is just going to be horrible for us. And you may still be horrible, but at least you fixed our cart. And so I go, okay, you know, that’s a little bit. Part of. Part of developing a pattern of communication is to show you Actually listen and respond.

Darren [00:26:59]:

I was just going to connect that to communication because that decision is a form of communication. It’s a form of communication that says, I’m taking something seriously and I’m doing something about it. These small but powerful signals that can communicate the message you want to communicate. I’m interested. First of all, do you agree with that statement? And second, other examples that you could point to where you made a decision, you took an action that communicated something very powerfully to the organization and had a kind of an amplifying effect.

Frank [00:27:28]:

Totally. So I think, and again, apologize for. First, apologize for the language, but second, apologize for the simplicity of the thought. The most powerful tool that a CEO can use, particularly at the start, is to stop doing stupid shit. And people will tell you the stupid shit they’re doing, but usually nothing happens. Stop it, take a couple of them and don’t do it. And everybody goes, oh, okay, this is different. People will listen. So another example was we had a program of granting stores, Our stores would get a certain amount, what was called a fun, fun that they could use for celebration, particularly after, you know, our year would end of January. And so you’d have it in February or March. And early on decided, okay, we’re going to increase the fund fund, but most importantly, it’s going out to store managers with no restrictions. So the usual way it would go out would go out with a list of do’s and don’ts. You need to do this, you can’t do this. Da da da da da. And I said, we’re not going to have any don’ts. And we’re not going to have. You got to put bunting around or any. You can do whatever you want. And no one believed it. Everybody kept saying, okay, no, okay, we saw the menu, we saw the memo, but what really can’t we do? I mean, can we have alcohol if we want to have alcohol? Yeah, you can have alcohol if you want to have alcohol. Now, no one did it because they were smart enough, but it was that, you know, companies. One of my expressions about bureaucracy is the biggest problems of bureaucracy are people wanting to add more value than is really helpful. It’s not that people aren’t hardworking and well meaning. There’s just more value than an organization can sustain. And so there’s an example. Look, just relax. I mean, maybe a few things will go wrong, but it’s okay. It’s okay. We don’t need to spend a lot of time worrying about the rules and compliance on a celebratory event.

Darren [00:29:42]:

Yeah, and what an incredible way to communicate trust in the front line than to do something like that. And just another great example of communicating this big initiative you had, which is like, let’s return authority to our store associates and make customer success kind of the very center of what we’re trying to do. You said, keep it to a minimum. Three, four, five things. Were there other things that were in this funnel of what you really wanted to communicate that you had? In these early days?

Frank [00:30:19]:

There were a set of things that we needed to change in the business. We needed to change our supply chain. We needed to change our merchandising systems. We needed to change. I mean, there were. We had five things we needed to improve, and they weren’t, you know, customer service was one of them. We had others. And some of those engaged all 350,000 associates, some of them didn’t. But it was the consistency of this is what we’re at least. I mean, I know a lot of other people in the company had other objectives, but for me, those were the five things that mattered. And early on, I get mixed metaphors here a little bit, but early on, one of the leaders of the company came into my office and said, look, he asked a question. He said, how are you? And it wasn’t directly critical, but you could tell that there was a criticism underneath it. He said, how are you conceiving of your job? And I said, well, you know, the CEO’s job is to make a lot of decisions, and I want to make good decisions, and I want to make them efficiently, effectively, you know, and not, you know, be straight and quick. And he said, well, can I offer you a different perspective? And I said, yeah, absolutely. And that was it. I thought, you know, look, I’m going to be judged by how many good decisions I make and how quickly I can make. He said, well, let me offer you a different perspective. And then he had the pyramid the way it normally is with the CEO at the top. And he said, look, imagine all these gears where the CEO is the biggest Top Gear, and imagine that Gear, that Top Gear is spinning madly, making a lot of decisions and moving fast. He said, look at what happens to all the bottom gears. They’re just spinning out of control. They got more stuff to do than they can possibly. They’re spinning out of control. Said, imagine that your job is to feel when the smallest gear at the bottom moves. Imagine that’s your job. And while that isn’t the full picture of what a CEO’s job is, I do believe that that’s Part of the job. And part of the job, part of the reason for the focus is to keep the churn and to as you, as the leader, you know, keep your antennae out so that you understand what’s happening through the rest of your organization. Because it’s so easy to get caught up in your own world and your own to dos and all your meetings and your Monday meetings and your. Your Friday meetings, and you’re in between Mondays and Fridays. I mean, it’s really easy to kind of step into a river and just disappear instead of kind of keeping yourself engaged at a quieter level and trying to figure out what’s happening.

Darren [00:33:28]:

How often were you in the store just given that comment? Yeah, I imagine a lot. Like, what would describe. Like, what was the frequency and how did you do that?

Frank [00:33:37]:

So I would try to spend three out of three out of five working days in the store. Every Saturday morning I would try to try. Is operative word, I’m not sure. I was always there. Schedule would intervene. And then every Saturday morning, I would try to spend early Saturday morning before customers would come in, like between six and seven, I would go into a store with a merchant and just go through her or his BAE in the store and just go, what’s happening here? Tell me, what’s this product doing? Why is the product displayed the way it is? What’s called a planogram in retail? What’s this planogram? How does it work? What’s working well? What’s not working well? Partly I did that. I mean, not partly I did that because I needed to learn a lot quickly. And I figured that was going to be an effective way of learning, but it was also a way of seeing, okay, who in this organization can really explain what their strategy is and what they’re trying to do and who can’t.

Darren [00:34:42]:

Do you remember an insight you got from a store visit or a number of store visits that fundamentally changed the way you thought about the business or a decision you made?

Frank [00:34:52]:

There was a lot of that. I would say some of them we effectively changed, some of them we didn’t. If we ended up having a hard time changing the overarching vision was that. So if you’re in a store, I mean, the phrase for working in retail is if you work in retail, you gotta like to smile. Because customers, we love them, but they’re very difficult. And if you give. Not everyone, but a lot of times, if you give people a choice between tasking, kind of going off somewhere and putting stuff on shelves or dealing with customers, there’s not an insignificant subset that will go. I far prefer to just go task and not deal with these folks. And so we had a very defined plan over time to just turn more and more hours in the store into customer facing hours and remove tasking. And part of that was an effort to say, this used to be important, it’s not going to be important anymore. Part of it was an effort in automating things, making things that had been manual, making them automatic. Part of them was the introduction of new technology in terms of merchandising fulfillment within. Just that one thing of we’re spending too much time in the store tasking. Just that one thing generated an enormous amount of work effort to deliver on. And there were lots of lots and lots of others like that in how you receive, in how you had outside parties interact with you. Endless, endless numbers of opportunities to improve.

Darren [00:36:45]:

You mentioned one other thing about powerfully communicating a message around storytelling, in particular celebrating and recognition. I’m interested in the inverse, which is the decisions to let people go that aren’t on the ride, aren’t up for what you’re asking them to do. How important is that aspect of rebuilding a culture or transforming a business in your mind?

Frank [00:37:13]:

Yeah, and I would say this is true even if you’re not rebuilding a culture and even if you’re not transforming, it is. I always, whenever I talk to a group of CEOs, I say, I will bet you $100 that when you retire, three years after you retire, if I ask you, what’s your biggest regret? I will be able to name what your biggest regret is. And it will always be, I move too slowly on people. I guarantee you. And everybody has always agreed with that. And we know, every CEO, every leader knows that. It’s true. But we also have a culture of respecting people. You want to give people chances and all the rest, but we do. We move too slowly. And overcoming that, but overcoming that in a thoughtful and reasonable way is probably one of the. It, is it not? Probably it is the hardest part of being a leader.

Darren [00:38:11]:

So do you answer that question the same if I were to ask you your biggest regret? It was moving too slowly.

Frank [00:38:16]:

Yeah, totally. Totally. No. So that’s the fascinating thing. I knew it. I knew it going in. I came from a culture. I mean, the GE culture was. We were required, I mean, required to lay off 10% of our team every year. So there was no hemming and hawing about it. That was something you had to do. And I didn’t think that was a good idea. But I understand the forcing function and why it’s necessary to have a forcing function. Because. And look, it’s true for all of us, right? We’re good at a job until we’re not. And the things that made me really good at the job 10 years ago May not sustain me for being good at the job over the next five years. And it’s really hard to say to someone, you’ve been a big part of our success. You’ve done a terrific job, you’re great, but you don’t have the skill sets that are going to be needed for the next five years or 10 years or whatever it is. I mean, that’s a. That. And everybody every. I mean, when you hear that conversation and you kind of think, well, that’s bullshit. That’s sort of the, you know, that’s a typical breakup kind of comment. But it’s not you, it’s me. Right? It’s not you, it’s me. And yet that’s. That’s why it doesn’t happen. Yeah, but it needs. You need to be constantly pushing yourself for that.

Darren [00:39:52]:

And so advice to yourself, if you were to go back in time, or advice to a CEO that knows this is true, but it’s going to inevitably fall into the same trap. Do you have any.

Frank [00:40:03]:

So the number one advice I would give to myself was always. It was within the depot context. What I would ask myself is, I would sometimes challenge store managers, district managers, if they had a bad store manager and they knew the person was a bad store manager, but they were arguing for another year for the store manager, I would occasionally say to the district manager, I’m okay with that. We’ll leave the store manager in place. If you’re okay with standing up in front of your other store managers and saying, we will not bonus. Because this person isn’t very good, but we need to give him or her the time. If you’re okay with doing that, then I’m okay with it. And of course, everybody said no, then am I doing that? If I’m honest, do I owe a conversation with my team on, we’re leaving this person in place, but we’re not gonna get to where we’re gonna go where we need to go because of that. And look, I’m not gonna say I was honest with myself 100% of the time. The brain is an incredibly effective tool at convincing us that what’s good is what’s the easiest thing for us to do. But that accountability structure is really important. And when I think about people who externally help CEOs the best value add I got were from external folks who would call bullshit on me when I was saying my team is. I’ve got the team that I need, period, full stop.

Darren [00:41:44]:

Yeah, you just described part of my job description, I bet.

Frank [00:41:49]:

No, I bet, Darren, that’s it exactly. Because no one around you is going to say that, or if they do say that, everybody’s going to have their institutional reason for saying it. And it may or may not be right. But you come in with a fresh set of eyes and you say, look, I look at this dynamic and really, why are you doing this? It’s incredibly powerful and needed.

Darren [00:42:13]:

So I think if all we got out of this conversation was your initial theory of bottoms up, you know, the inverted pyramid and how effective that was and how central it was, we’ve had mined a lot of gold. I’m curious if there are any other big principles or unique ways that you led that you would say, yeah, these were also instrumental to my time there.

Frank [00:42:40]:

So the other two big ones, the first, they’re both. I mean, again, I apologize for their being pretty obvious, but it’s interesting how often they’re ignored, which is, don’t tell me that you’re transforming and changing your business if you’re not transforming or changing the way you allocate capital and the way you allocate people. And the number of times I see companies say, oh God, we’re in this big transformation mode. And then you go, well, have they changed where their capex is going or where their expense is going? And you go, nah, that’s changed plus or minus 3%. Not much, but we really transform our mindsets. Well, no, you need to change where the dollars are going and you need to change it more than plus or minus 5%. When you start doing that, the organization first starts paying attention and second, you start getting results because you’re doing something significant. You have to be doing something outside of plus or minus 5%. The same is true with people. So I anthropomorphize organizations a lot and I think most organizations internally know who the real stars are and who the hangers on are. And back to that point of the hard decisions and the hard discussions, that discussion that seems really tough for you as the CEO and the decision that’s really hard on the human resource allocation, the organization’s already ahead of you and you just need to understand they’re already ahead of you. So keep up with your own organization, keep up with who’s really, really delivering and who’s not. But in the End you achieve your results by wise allocation of financial resources and wise allocation of human resources. Not a hell of a lot more complicated than that. But it’s amazing to me how people think they can ignore those two basic facts and still do something significant. They’re not that good for you at Home Depot.

Darren [00:44:58]:

What was the. The significant movement? Reallocation of capital or people?

Frank [00:45:04]:

So the number one change on reallocation of capital was we stopped building new stores. So before I was CEO we would open 200 stores a year, spend about $2 billion in capex. That was core to how we made money. Cause every new store would generate new sales and you’d have to worry about cannibalization. But that was the economic flywheel of the business was opening new stores. What was apparent was at some point, and it’s funny, I was just talking today with someone who had just been coming from a town in Louisiana called Opelousas, Louisiana. I know Opelousas, Louisiana because that was one of the last store siting decisions we made before I became CEO. And, and you look and you go, there’s no way that there should be a Home Depot in Olusis, Louisiana. We’re just trying to keep building new stores, but it can’t support it. It’s not going to make economic sense. So you had to reallocate capital away from building new stores and into investing in your existing stores into investing in online. And that was probably the most significant decision that we made. In addition to we sold all the businesses that I had spent five years acquiring, which is itself also an interesting discussion with the board. But anyway, so big changes on capital allocation and the similar thing goes with people. We did the same thing on the people side in terms of skill sets we were trying to add with our merchants and supply chain people, but you can’t. That goes back to the it’s not about you part of being a CEO, whatever you think and your intentionality, if you are not communicating that financially through your two big resources, money and people, if you’re not communicating those things, your intelligence and your energy level and your power and all the rest of that, not going to make a difference.

Darren [00:47:25]:

You’re doing this in the midst of one of the biggest financial crises in history, I imagine. But I’d love to hear from you. That made it both harder, but perhaps made it easier. There’s always some huge value in crisis and so lessons learned about the difficulties and benefits of making these big choices in the midst of a crisis.

Frank [00:47:48]:

I mean I biased on this one, but Much easier in a crisis. Yeah. I mean, you know, organizations resist change for understandable reasons. I, you know, my job is only part of my life. I’d like it to keep muddling along the same way it has year over year over year. When the knife is falling, everybody understands. Yeah, it’s got to change. I may not like the change, I may not want the change, but I understand the need for change. It was the same. I was non executive chair of the board at Delta during COVID but Ed Bastian did. I mean, it’s the same thing. It’s the, I mean, an enormous crisis that I believe that airline met with incredible, incredible thoughtfulness and a lot of things that are easier to do in the middle of a crisis.

Darren [00:48:43]:

Yeah, I mean, there’s huge opportunity cost if you don’t do that. I’ve always been fascinated with the question, and it’s a bit of a hypothetical, but in the absence of a crisis, let’s imagine you stepped into this role in 2005, maybe 2004. Right. Two years before the market’s residential construction market starts to soften. Is it feasible to pull something like this often?

Frank [00:49:04]:

Absolutely.

Darren [00:49:05]:

Okay.

Frank [00:49:06]:

We’re always in crisis. They’re just the crises we don’t see.

Darren [00:49:09]:

Okay.

Frank [00:49:09]:

Right. Yeah, yeah, yeah. It’s always something. I mean, in my mind, every great business is a great business because it comes up, because it has the best solution for a customer problem. That is always a crisis because customer tastes shift, execution capabilities shift, your own skill sets shift. I mean, it’s such a great question, Darren, because my belief is the full commitment to excellence is itself a commitment to a constant series of crises.

Darren [00:49:47]:

That’s a great. That might be the tagline for summarizing this. You mentioned one other thing. Terms of like big leadership principles or unique ways of leading. The bottoms up was one. Capital and people need to match if you want to transform. And then there was another one you were alluding to. You said there were a couple more.

Frank [00:50:08]:

On principles of leading. Yeah, I mean, I think leaders, and this goes a little bit to leading from the bottom, but it’s true. Just generally, I think leaders undervalue the significance of their interactions with the team. And I mean, throughout the entire organization and presence is a big. There are leaders who’ve been successful who. If you ask the floor of the store or the floor of the factory who the CEO is, they’d have no clue. But I don’t think that’s a. I think that’s an exception rather than the rule. I think the rule is the Rule is as a leader, if your organization believes that you’re invested in its success and I as an individual believe that my CEO is invested in my success, as the phrase goes, I will invest in his or her success. But it’s a contract in effect. And before you get to all your other grand visions as a CEO or grand purposes as a CEO, in my belief, your first and highest purpose is to deliver a successful employment experience for your employees. You want to be invested in their success and you want to be invested in their success not only because that’s the right thing kind of structurally to do, but because it’s in your self interest. This isn’t just a feel good thing to do, it’s a bedrock principle. You want your employees thinking, boy, this person’s going to fight for me and cares about me.

Darren [00:51:59]:

Yeah. This idea of a contract that we’re implicitly making with every employee is such a powerful one that there’s got to be a mutual exchange of value. We’re offering you an extraordinary experience or career development or whatever it is and we have an expectation in return. I think it’s just something so important for leaders to embrace. You said visiting stores was one way of demonstrating your commitment. Were there any other things that you did where people are like you’re really invested?

Frank [00:52:32]:

So partly, I think it’s. Again, I don’t want to be saying too many obvious things, but partly it’s compensation. Right. I mean we very proud of the fact. I mean the way I look at it, I could visit stores 24 hours a day, but if I don’t have a way of expressing why this is financially good for the people on the floor of the store to work at Home Depot, I mean really, that goes back to the. It’s not about me. Yes, there’s a symbolic significance, but far more important is, I mean hugely proud of the fact that, that we made assistant store managers, which I mean just recently Walmart joined us on this assistant store manager. Our assistant store manager at Home Depot get stock. They get paid in an investment in the company that has been a great investment over and above their salary. That’s a big deal. We do success sharing, we look at stores and as stores succeed, they get more money. We want to pay our people well and we want them to progress within the structure of the company to be the most successful people in their families. And that’s a. I mean, I think without that you can get too enamored with the theater of it. There’s just the. Can you look yourself in the face as the leader and say, for all those people working in your organization, is this the best use of their blood, sweat and tears in terms of what’s going to pay off for them and their family in this industry? Period, Full stop. And I felt like I could say that to the people at Home Depot and that was important.

Darren [00:54:21]:

Some of these things were they changes you made when you became CEO of the day. Okay. And it sounds like they were unique in your industry. Some people are catching up to that at the time.

Frank [00:54:30]:

Yeah, yeah, People are catching up. Yeah, yeah.

Darren [00:54:33]:

Amazing. And I couldn’t agree more. I want to bring us home and maybe turn to the question of, I don’t know, legacy may be a strong, too strong a word for you, but you’ve now had a decade plus to look back at these eight years of being CEO. I wonder, you know, anything that we haven’t already talked about that would be like a big learning for you. And then also, what do you hold as the thing that you’re most proud of?

Frank [00:55:04]:

So the big learnings for me, incredibly difficult jobs, but actually pretty basic principles. I mean, it’s pretty straightforward principles. I love the Jim Collins good to great. He said every company needs to be able to answer three things. What’s it passionate about, what’s it best in the world at? And what drives its economic engine. And I honestly believe that if you give enough thought to that and really connect yourself with those three concepts, things tend to go well and on the pride. So for me and Home Depot is a little unusual in this way. Not every company has this kind of an opportunity. So people don’t start in retail with the idea of making retail a career. So the average entry employee at Home Depot who’s working in a lot or a cashier or something like that is not saying, oh, I found my life’s work there. Lots of different stories on how they ended up doing that. But for the people who like it and invest themselves in it, the opportunities are amazing. So the most fun part, and this plays itself out all the time, is someone who started as an hourly associated Home Depot and is now the single most successful person in his or her family by a large margin because they work themselves up from being a regular store associate, to being a department head, to being assistant store manager, to being a store manager. And there’s just an enormous. I mean, it is the American story that plays out. It’s the American dream that plays out, honestly, every week in a store at Home Depot and in other retailers. It’s so fun. It’s so amazing and so humbling because you just get people who work their asses off and then get success. And that’s great. You just go, that is phenomenal.

Darren [00:57:18]:

It’s a great way to wrap us up. And I always ask the question, and I want to offer this to you. Anything that we haven’t covered that you want to close with or you’re great.

Frank [00:57:30]:

Okay? No, you’re great, Darren. As I say, we’ve had. For your listeners, Darren and I have had the opportunity to work, work together on some things. And you’re smart and insightful and thoughtful and, and, you know, just profound person. So thank you for the opportunity to talk with you.

Darren [00:57:48]:

Very kind of you. This was exceeded my already very, very high expectations. I couldn’t be more appreciative, Frank, and for this conversation, but for your contributions to what it means to be a CEO. So thank you for the time. It’s been great to catch up, a lot of fun.

Frank [00:58:04]:

Darren, thank you.

Darren [00:58:10]:

What a wonderful conversation. Frank’s leadership challenges one of the most deeply held assumptions about the CEO role. That authority flows downward and that gravity does the work for you. Instead, Frank offers a far more demanding and far more honest frame that the CEO sits at the bottom of the organization, bearing the weight, pushing purpose upward and earning influence through service rather than position. I look forward to being with you on the next episode of one of one. Until then, I hope you live and lead with courage, wisdom, and above all, with love.

Listen Here

DeepL is a pioneering AI company serving hundreds of thousands of businesses around the world. Born in Poland and raised between Poland and Germany, Jarek experienced firsthand the challenges and beauty of bridging languages and cultures. Trained as a computer scientist, he saw early on how AI could transform communication, and he spent the past eight years building DeepL into a global leader in applied AI. DeepL achieved market dominance as a startup in a category that could easily have been owned by the large technology incumbents, and Jarek offers a masterclass in strategic counter positioning. He’s evolved DeepL’s culture as it scaled, preserving its research roots while becoming a global commercial powerhouse. And now Jarek’s leading DeepL into its second act, a courageous expansion beyond language translation into the broader world of agentic AI.

Full Transcript

Darren [00:00:01]:

Hi, everyone. Welcome to another episode of One of One. I’m your host, Darren Gold, CEO of the Trium Group. My guest today is Jarek Kudalovsky, founder and CEO of DeepL, the pioneering AI company serving hundreds of thousands of businesses around the world. Born in Poland and raised between Poland and Germany, Jarek experienced firsthand the challenges and beauty of bridging languages and cultures. Trained as a computer scientist, he saw early on how AI could transform communication, and he spent the past eight years building DeepL into a global leader in applied AI. What makes Jarek’s story so compelling is how he’s done it. He achieved market dominance as a startup in a category that could easily have been owned by the large technology incumbents. A masterclass in strategic counter positioning. He’s evolved DeepL’s culture as it scaled, preserving its research roots while becoming a global commercial powerhouse. And now he’s leading Deep L into its second act, a courageous expansion beyond language translation into the broader world of agentic AI. Please enjoy my wonderful conversation with Jarek Kutolovsky.

Jarek, it’s so good to see you. Thanks for being on the show. I’ve been looking forward to this conversation for some time and really excited to be in it with you.

Jarek Kudalovsky [00:01:29]:

Darren. It’s a pleasure. Thank you for having me.

Darren [00:01:31]:

Yeah, it’s great to have you here. And, you know, maybe we can start with this company, DeepL, that I’ve gotten to know through our work together and a lot of the world knows. But for those that don’t really understand what DeepL is, can you bring that to life for us because you’re the founder and CEO of this important company? I’d love to. To hear that through your words.

Jarek Kudalovsky [00:01:51]:

Yeah, sure. So DeepL is an applied AI research company. We actually started quite a few years ago in 2017 and have been the first one out to the market with AI based translation for language, which has been really one of the first frontiers of where AI could show its power and how it can impact the world in so many different ways. And as such, we’ve been really transforming the way that businesses can communicate both internally and externally since then. And all of that based on quite a lot of AI research work, actually.

Darren [00:02:30]:

Yeah. So bring to life the DeepL story through a customer. Like, what is a customer experience? How do they use your product? What do they use you for?

Jarek Kudalovsky [00:02:39]:

Yeah, I mean, translation has a wide breadth of applications, but most of our customers will be either international companies which are somehow struggling with the communication inside. Let it be one of their offices being in Japan and the other one in the US and another one even in Europe. And although we kind of all assume that we’re speaking English, that’s really not the case for the majority of this world. And these employees struggle, they struggle to follow, they struggle to be part of discussions, they struggle to contribute there. And by bringing in dbel, whether that’s for written communication or whether that’s for meetings and spoken language, you can just get the best out of your employees and make sure that they can contribute to the company as you really want. And that’s what happens internally within businesses. When you think about companies that want to scale globally, that wants to enter new markets, this is sometimes pretty hard. And either you are setting up an operational field or organization in the particular country that you’re targeting, or there’s also technological means to address that problem. You can take DeepL and route more of your customer support inquiries through that, have your salesforce being equipped with DeepL to seamlessly talk to customers. And that just gives companies this breadth of possibilities of embracing the whole world as their market without really having to go through the hassle of hiring people in each and every country out there.

Darren [00:04:21]:

Yeah. And so you’re speaking to me, I think, from Cologne, Germany, where the company was founded and is headquartered. But you’re a global company, both in terms of your own operations, but the customer base you serve. What is the scale of the business right now? And it’s been eight years, but it’s been an eight year run of pretty wide adoption of your product and technology.

Jarek Kudalovsky [00:04:42]:

Yes, we’ve been pretty successful with our approach, which really on the one hand combines cutting edge AI research, we’ve been training models, we’ve been building new model generations across this whole period of time and innovating in AI and at the same time combining that with a product that really fits these use cases of those businesses. And we have over 200,000 businesses using DeepL nowadays, as you said, across the globe. Basically Europe remaining one of the bigger markets for us. I think that’s natural given the distribution of languages over here, but also having a very strong foothold in Asia where the language barrier is there and where we can help both established markets and countries, but also emerging economies to gain place in the global economy.

Darren [00:05:40]:

Yeah, so we’re going to come back to DeepL for sure and your role in it, because, you know, this is a show about what it’s like to be a CEO and the art of being a great CEO. But I’d love to start a little bit with your personal story and the importance of language to you personally and how that sort of weaves into the broader kind of career journey that you’ve been on. So take us back to when you know, the beginning.

Jarek Kudalovsky [00:06:07]:

Yeah, I’ve been born and grown up in Poland in Eastern Europe, but then have been spending a large part also of my young years in Germany. So basically I was roaming between those two countries and also those two languages all of the time. And I have been personally in this situation where I started school in Germany at a certain point in time without basically not knowing a world in German, which was quite an interesting experience to go through, like finding connection to my classmates, being able to participate in classes. That was not easy. And at the same time, I was always fascinated by technology. I was starting coding at maybe an age of 10 or so. The ability to just so quickly create something with software and bring something to life which was not there and have an impact on a certain scale. Like, obviously at the age of 10, whatever I was coding didn’t have really large impact. That was really incredibly interesting to me and something that I was trying to pursue then over the rest of my life. Life. And I think at some point in time, those two things probably converged in a moment where AI was coming up and both myself and the team that have been behind that have seen that. Yes, translation, and the way that we are doing translation is going to be totally transformed by AI. We’ve seen the technology coming up for that, and at the same time, we both, myself and the team, we knew what the problem was. We’ve experience it firsthand here in Germany. We’re living in a place where there’s so many languages around us. The border to France is maybe, maybe an hour away by car. And I think that gave us both the perspective on the technology and the use case at the same time.

Darren [00:08:05]:

Yeah. So when. When was the moment you decided to. I’m going to found a company around this big need. And.

Jarek Kudalovsky [00:08:12]:

Yeah, that was in 2017, which is. Which is also exactly the moment when the first applications of neural networks, deep learning, back then, as we called it. Back then, right now, everybody has forgotten those terms and we’re just calling it AI. But back then, that was the technological academic terms that were referred to that.

Darren [00:08:32]:

And your education was in computer science?

Jarek Kudalovsky [00:08:35]:

Yes, I’ve studied computer science. So from that perspective, I’m fully a computer scientist, I think. Yeah.

Darren [00:08:42]:

Yeah. So let’s go to 2017 then, and talk about what was the founding of the company like. And we’ll walk our way from 2017 to the present day. Because eight years is both a blink of an eye and a long time.

Jarek Kudalovsky [00:08:57]:

Yeah, we started playing around with the technology at the very beginning. At the beginning it was a fun project and it was. And I think a lot of technological advancements really start that way. It’s just like a bunch of engineers, a bunch of researchers figuring out what you can do. And then at some point in time we started seeing that we are starting to get results which are on par or maybe better at some point in time than whatever the big tech giants have as an offering with their translation or machine translation services. And we have decided that this is a great idea to just put it out into the market. We haven’t been really thinking about monetization at this point in time. We haven’t been thinking about the market in such a maybe detailed or even sophisticated way. But we thought this is a big problem, this is a big challenge for so many people. There’s a technological leap coming up and we can participate in that. And one of the crucial observations was that in this moment of technological change, whatever systems have been built until then, their technology was not relevant anymore. So basically, whatever our competitors back then have built up over years or decades, maybe literally, they could throw that into a waste bin at some point in time. And we knew this is going to come, so we thought we’re going to just scale it very, very quickly and go out to the market. So it was a frantic year. There was a lot of sleepless nights. We did not only had to write the models, but built the whole infrastructure around them to scalably deploy AI solutions to the market. We had actually to build out data centers because in 2017, getting hold of GP and getting hold of data centers for AI was not an easy undertaking. So we kind of had to build it from scratch. And I think from there the story started taking shape. With first it being just a free product out there on the Internet, which gained quite a lot of traction in media and a lot of viral growth within our users. We have been adding self serve or like product led growth monetization models to that as the first approach. Just us being engineers and not necessarily having the required sophistication for any other business model at this point in time. That was just a natural way to go. And nevertheless knowing that at some point in time this needs to become a business oriented solution, the competition from big tech and platform owners was there. We knew we can’t compete with operating systems that are pre installed on phones and that might include translation capabilities. So we knew we got to be where the high value, high stakes use cases are. And that’s mostly in business. And this is then what we’ve been building up over the coming years, building up a commercial motion around this, building up a product that’s deeper, that’s more sophisticated, that allows businesses to do what they need in translation. And that’s usually a little bit more than just translating one sentence from one language to another.

Darren [00:12:28]:

Yeah, there’s a really important, I think, lesson in strategy somewhere in this story that I want to try to mine just for a moment, because here you are in 2017. Arguably you have these large incumbent players with installed operating systems. They have a lot of structural advantage and yet you were somehow able to leapfrog. You seized on a technological shift. And you know, the phenomenon that we often talk about in businesses is like Innovator’s Dilemma or Hamilton Hemmer will call counter positioning, where the interests of the incumbent providers are so entrenched and so counter to making big change that it creates an opportunity for somebody new to come into a market. And I know there are people listening, I’m sure, to this conversation, thinking about their own strategic positioning or starting a new business. What was the strategy lesson there if you were to look back in those first few years that you might want to offer?

Jarek Kudalovsky [00:13:32]:

I mean, it was certainly about putting a lot of effort in the advantage that we had. And that advantage was certainly at this point in time, so importantly, the AI research that we have been doing, so making sure that we don’t lose that, putting appropriate effort on that. And then I think maybe even at the very, very beginning, I think we have to understand that this was a bold bet, especially at the beginning. That’s been a bet that has worked out. And I think there is examples of exactly those situations where you can compete against incumbents there, but it’s probably not going to work each and every time. And I think the way that we’ve chosen this area to compete with has contributed to that bet working out because we’ve chosen a play field that was not core and was not central to the incumbent strategy. If you think about Google, their main obviously product at this point in time was search and it was ads. And keeping up on the translation side probably was not top of mind for the company as a whole. So I think those bets need to be bold, but they also need to be placed into an area where there is possibility to win at least.

Darren [00:14:56]:

Yeah. And it’s easy obviously to look back in retrospect, but I’m curious, like how much? I mean, imagine part of it was just like, we’re strong researchers, we’ve seized on something really interesting. We’re going to give it our best bet. But were you thinking intentionally about how to make this move in a way that would actually create a really enduring business? I mean, what was the thought process amongst you and your co founders and the small team at the time?

Jarek Kudalovsky [00:15:23]:

It was really about getting the product into the hands of so many people as possible. And I think the brand creation was an important part of our strategy. And part of that meant that we had a free product that was extremely strong and extremely well utilized even by our users. That has created an incredible marketing machinery for us per just pure viral word of mouth growth that obviously required investments on our side. The first investment being we had to provision the GPUs and the hardware to run that. We’ve been running millions and billions of translation overnight basically. And we had to make space for that and kind of build those scalable systems that could work with that load. And at the same time, we never over monetized in this time. We made sure that the product is just being used everywhere. And whether we are capturing that value that we’re providing to our users was a little bit of an afterthought. And I think a lot of great products have been built this way, especially at the beginning. It’s obviously a different story if you’re selling to enterprises and if you’re working with established businesses. This is not, not what you would be doing there, but this approach of capturing the market, creating a brand in this noisy market, that was definitely a competitive advantage that we aimed for.

Darren [00:16:57]:

Okay, so at some point it becomes obvious you’re creating a company around this. You’re the CEO and I’d love to sort of turn our conversation to your leadership because it’s not only been a journey of company building, it’s been a journey for you as a CEO. I imagine you’ve evolved and grown and I’ve seen a little bit of that in you. Talk about the early days as a CEO and if there are like distinct chapters or phases that occur to you as you in your evolution as a leader, I’d love to have you bring those to life as well.

Jarek Kudalovsky [00:17:29]:

Yeah, I think like obviously I didn’t know anything about being CEO in the early days. And in the early days I think that’s fine. What you’re doing at this point in time is you’re just building and building and building and just tackling one problem after the other and trying to look at what is the next big fire that you have to extinguish. And especially with these kinds of products that are going viral, you rather in a mode of where you have to fight fires rather than strategically develop into the future. But at some point in time, I think there comes a moment in which you notice that you can’t do that much anymore on your own. And on your own does not mean that. That you’re one person, but you’re still in control of everything in some way or manner. You have a team around you, but you’re so deeply entrenched with the team that any question that’s out there, you can answer it as a CEO. And at some point in time that just doesn’t work anymore. And you start finding out that there needs to be a divide and conquer strategy of some sort and you start hiring. And I think that’s an extremely complicated moment for everyone to go through. If you haven’t done that earlier, because at once you’re looking for totally different qualities in people. You have to let go of a lot of your responsibilities and put trust in individuals that they will be driving larger parts of the organization forward on their own. And I think that’s probably like chapter number two that then starts this. Chapter number two is still though such that you have leadership, but you still have some kind of insight of what’s going on in all parts of this company. You still can maintain that feeling of being under control of your whole organization. And I think then chapter three is.

Darren [00:19:37]:

Sorry, before you go to chapter three, so give us a sense of your. The size, you know, how big are you in chapter two, how many employees and what is the. Where is the business in its evolution? Just so we can map to that.

Jarek Kudalovsky [00:19:48]:

Yeah, yeah, I think you can probably. And that’s going to really very much depend on the individual, on how broad you can go, how big an overall scope as an individual you can handle. Therefore, I think the first part where let’s call it chapter zero or you’re in control of everything, that may go up to 30 or 40 people or something like this. I think with me it was 45. I would say this is where my first product leader has come into the company and where this has really changed. And then the second part probably goes until like 200 people, I think. And I think then on business metrics that’s going to be really different for any company. That really depends. I think I would attribute that more to the size of the organization itself. And then the second chapter, then after this is where you really starting to hire even more experienced leaders, leaders that have run potentially larger organization than the one that you’re in, who are much stronger in their respective fields than you are as a CEO. And this is the point in time where you probably have to start taking a lesson in humility because it’s not only that you cannot look into all of those areas, but you don’t have the expertise anymore. And. And you have to rely on their judgment so much more for determining what’s right and what’s wrong.

Darren [00:21:18]:

Yeah. Okay. And that sense you’re in that we’re calling it Chapter 0, chapter 1. Chapter 2. Chapter 2 is what period of time for you at DeepL that’s gonna be.

Jarek Kudalovsky [00:21:29]:

Around 200 people, I’d say when that really starts kicking in and when the organization becomes more sophisticated.

Darren [00:21:36]:

Yeah, but in terms of years, so 2017, you’re obviously in chapter zero, but what point in time do you get to that?

Jarek Kudalovsky [00:21:45]:

Chapter two, I would say probably around 20, 2021.

Darren [00:21:53]:

Okay, okay. So keep.

Jarek Kudalovsky [00:21:55]:

So the first years are still easy, but you know how an exponential curve looks like in terms of hiring, you need some time until you’ve ramped up until 100. Then the 200 people comes fast and then, then the following years come even faster. So I guess it’s around 2021.

Darren [00:22:13]:

Yeah. Okay, so. And where are you? What’s happened over the last four years? Bring us up to. Up to. Up to date.

Jarek Kudalovsky [00:22:20]:

Yeah. And then, then I think it’s a constant up leveling of the leadership team and the organization as a whole. You start noticing that the company is growing in so many ways. You’re customers are becoming more sophisticated. So you have to be able to tackle that. The scale of everything that you’re operating on is becoming more sophisticated. The people that you had in the team until now, who have done an amazing job building the company until then start becoming tired. It starts to become too much for them in some of those areas and you have to start both hiring more and more for those first level leadership positions. But also underneath that, the middle management of the company starts becoming more and more important and the role of a CEO becomes more and more of a recruiter. Finding new people, finding the impulses and just at the sidelines to maybe defining the strategy of the company. Yeah.

Darren [00:23:32]:

So how’s it been for you? Like how has this journey been for you? I’m most curious to hear about your own growth and evolution. Where you’ve been challenged, where you’ve succeeded, where you are today, and what you’re like as a CEO and what you’re working on.

Jarek Kudalovsky [00:23:50]:

So obviously it’s been a journey of a lot of growth. I like challenges, though. I think this is what’s driving me towards this role and that’s driving me also towards building larger company that has more impact. That always comes with a lot of interesting problems to solve and a lot of opportunities to challenge myself on. Can I do that or cannot I do that? How do I figure particular new areas out? And just to give you an example, I think one of those fields which has been most complicated for me over the course was representing the company externally, doing so in media, doing so in like podcasts, like this maybe. And that’s been something that’s never come natural to me. You can imagine myself being more of a computer engineer, scientist, but at some point in time I’ve decided the company is going to need that and this is the next chapter for my personal development and I just have to get myself acquainted with that uncomfortable situation and can work towards that, train and become the leader, the CEO that the company needs. Also, externally and frankly speaking, it’s been incredibly rewarding to be able to see some of that work come together and myself being able to tackle those challenges that I wanted to. And DeepL is also a brand that’s widely known, and given the type of the product also in the mainstream population, I would say it’s not a niche product for a small population of users. So that also means that our exposure in the market is pretty high. So I was doing quite a bit of that.

Darren [00:25:45]:

Yeah. So how would a person, maybe somebody at DeepL that’s been there for enough time to see you grow? How would they describe your leadership app?

Jarek Kudalovsky [00:25:54]:

I put a lot of weight into being open and transparent and providing a lot of context to what we’re doing. I kind of always tend to over index on communication that’s maybe even slightly too transparent, that’s slightly too open. I was, during the course of the last years advised quite often on, we’re not disclosing this. This is not the typical practice of companies. This can stay within the leadership team or just on a need to know basis. And I’ve been pushing back on that quite a lot because I feel I want to work with people who know what we are doing together, who have the trust in myself and the leadership. And that also means being honest about things that are working well, but also honest about things that are not working well or about maybe tough decisions that we have to make. And I think that’s a core and central Part of how I want to run a company also in the future, and it doesn’t matter how big the organization becomes for this to still be important and valid, I think. Yeah.

Darren [00:27:09]:

And are there areas in particular where you spike as a CEO?

Jarek Kudalovsky [00:27:14]:

I think obviously I’m very hard working, I guess, but that’s probably the case for all of CEOs. And I’m trying to lead by example when it comes to that quite a lot. I’m also trying to be a strong listener. As I said, at some point in time I knew I have people in the organization who know so much more than myself. So a central role for myself is to find those people and then listen to them. And I think, and I think not every CEO is like that. I think that’s probably one of my superpowers here, to take that feedback, understand it, and then make decisions based on that, but do so being really very well informed by my team.

Darren [00:28:02]:

Yeah. You also mentioned your role as almost Chief Talent Officer and I’m curious to hear how you spend your time around talent, what you do that might be unique and distinctive or any other kind of lessons that you’ve learned along the way in terms of. Of building a great talented organization.

Jarek Kudalovsky [00:28:20]:

I think it is a lot about maintaining great relationships with people that are out there in the market. There’s plenty of talented people out there in the world and you might be meeting them with or at a point in time where there is no great position for them at the organization. It just doesn’t fit at this point in time. Or maybe they’re not at the point in time in which it really makes sense for them to switch companies and being just a good person and giving them the feeling that they’re welcome to the bell at a later point in time when this really fits and making sure that they understand how the company works and getting them excited about a company. I think that has proven worth a lot for myself. We’ve been able to bring people on board whom we have maybe talked to quite a good while ago and where this just didn’t fit at this point in time. Time. So that’s, I think, super important.

Darren [00:29:24]:

Yeah. So I want to talk about a couple other things and maybe just to start with your role as really the steward of the culture at DeepL. And I’d love to hear your articulation of culture, why it matters. What are the big challenges that you’ve had in shaping and continuing to push forward the culture? Cause I’m also just imagining you’ve got got your roots in deep Research, you’re a highly commercial organization, so there’s some tension there. You’re Europe, German based, but you’re global. And so I’d love to understand how you’ve thought about those tensions and how you’ve intentionally tried to cultivate and shape your culture at DeepL.

Jarek Kudalovsky [00:30:10]:

Yeah, I mean, the most important thing I think is that that culture is going to change over the course of an organization’s growth. I don’t think it can stay the same. This is just effect that’s driven by the number of people that are living this culture. And our family is going to be organized in a different way than our whole society is going to be. And that’s just a function of the different scale that this needs to operate at. And then also companies go through different moments in how they’re internally working. There’s strategy shifts. There’s like, as in the example of DeepL, as you rightfully mentioned, we’ve gone from a tech only towards a tech and commercial organization. And that is a different thing. And also the external factors or the external environment in which you operate are changing from time to time. So if you take all of this, your culture will have to adapt. And I think there needs to be a core which is steady, which always stays. And this can’t be anything that you just thought up or which you have read in a book. I think that needs to be at the core of yourself as founder and CEO if you’re remaining the core of the company. And I think for me, that’s the part where we’ve talked about trust, authenticity, transparency. I think that’s incredibly important to me. And then I feel other things can change while this stays because it still in some aspect remains the same company. At least the company that is represented by the founder. When it comes to the specific cultural path that we’ve gone through as a company, I think the fact that we’ve internationalized so quickly, both in terms of our customers as well as our employees, we’ve started in Cologne in Germany, not really a tech city. We’ve been or are the biggest tech company in town and then grown to whole of Germany and then expanded across Europe and then started setting up offices in Asia and in US. I think that diversity of cultures that you bring in through people coming from different backgrounds is really what can help you shape the company in different way. And in the same way the diversity of different types of people coming into the business. Because maybe you’re evolving from tech only to tech and commercial. If you’re careful and intentional about Taking the pieces that fit the company out of all of those cultures, out of the stereotypical personalities of people being in those different functions, and pick and choose those that are great, that you love and put them into a culture, and then try to make sure that those that do not fit the company are appropriately handled, then you can evolve the culture in such a great way. And I think for us, that meant that we’ve become more ambitious, we’ve become more competitive in the market. We strive for more. We love winning and not only building. We love building, but we also love winning through building. So there’s quite a few things that have changed over time. Yeah.

Darren [00:33:53]:

You’re at how many employees today at DeepL?

Jarek Kudalovsky [00:33:56]:

We’re roughly 1,000 people right now.

Darren [00:33:58]:

Yeah. So this is such an interesting question because you’re at a significant scale, thousand employees. You also have the added complexity of a lot of diversity. Right. In terms of country of origin and all of the other diversity that people bring to a culture. So I’m so curious about this question of at scale, a thousand people needing to naturally shift and evolve culture from, you know, in your words that you just articulated, a little bit more ambitious, a little bit more commercial, a little bit more competitive. How have you as CEO taken on the task of evolving a culture at that level of scale?

Jarek Kudalovsky [00:34:38]:

Talking about it. Talking about it a lot. Talking about my personal journey through that, talking through my experiences, trying to explain to the employees, why am I doing this or why am I thinking like this? And I’ve spent a lot of time on town halls, AMAs, all hands breakfasts in offices, just spending time with employees, taking all questions, whether they’re easy or hard, no moderation, and just giving the right answers to those or the answers that I feel. And I think that that helps everyone go through the journey through my eyes because I usually see and notice those trends firsthand. And I see them earlier because I’m quite often the bridge between different offices, different teams, different functions. And I think equipped with this knowledge, everyone in the company can take this change a little bit easier than if they would know. Know. Why is that?

Darren [00:35:43]:

Yeah. So where has that worked? And where maybe more importantly, have you been stuck, challenged, still trying to figure things out?

Jarek Kudalovsky [00:35:51]:

I think. I think we’ve gone through a time at some, at some moment where I was not. Not obsessed enough about giving this clarity. And we’ve seen that immediately in our engagement surveys where discourse on, are we communicating our vision? Are we communicating our values? Are we. Are we basically communicating well across the whole company? These went down. I just at some point in time didn’t notice that there’s even more that I need to do around this. So yes, this was a wake up call for me. I think this also meant that at the scale we had to both maintain the authenticity of our communication but also employ some more structured programs around that. This could not happen just organically anymore. You just wouldn’t meet enough people by chance in the corridor. Especially in a distributed organization. There needs to be a framework around that. And I think that was also kind of a bigger change for me and that required me to get convinced about that because I was always of the opinion that just natural conversations will lead to the best outcome. But that’s not the case. It’s got to be a little bit of a mix of operationalized scalable mechanisms as well as openness and transparency behind that.

Darren [00:37:20]:

Yeah. And can you just give some examples of those kinds of structured approaches? Because I’m with you. My bias is much more around the osmotic effect of strong leadership, clear, clear, transparent articulation of what is expected. And do agree that there needs to be some structural support. So what happened with you and where were you successful?

Jarek Kudalovsky [00:37:45]:

Yes, I mean we’re running a series of those breakfasts around offices where there’s pre planned slots that are kind of arranged around my travel schedule where I’m gonna meet people within offices whenever anything kind of bigger changes in the company. We’re hosting dedicated ask me anything sessions. We’re obviously providing also materials ahead of this happening. But I really like everyone to be just there and be available for questions. And we’ve run extremely tough ones and exhausting ones. But we always tried to answer, answer even the last question that was there. And if it was not possible on air, we did it in Slack and followed up on those questions. So make sure that you’re answering really everything. So in person meetings in offices, we’re trying to facilitate those even if we are a hybrid or remote organization and at the same time do a lot of organized AMAs. I think those help a lot. Yeah.

Darren [00:38:51]:

I’m noticing two things I just want to test with you because I imagine people listening to this are interested in the nuance here. One is that you’re still very central. This is not outsourcing to people function to do the culture work. You’re central to the communication. And I’m also hearing you didn’t say it explicitly, but I also hear in you you’re not trying to please people, you’re trying to be honest and clear. And I Think that’s an important distinction first, am I right? And anything else you’d add to that to make this more compelling, complete?

Jarek Kudalovsky [00:39:22]:

Yeah. On number one, that’s a clear yes, I want to leverage my leadership team in this to the whole leadership team. And I think the whole leadership team needs to be present in this shaping of culture. And anytime I was talking about AMAs here, I always do those with at least one leadership team member alongside myself or they do it on their own. But yes, I’m present too, and I think that’s incredibly important to me. I am the face of the company and therefore also internally, and I want everyone to understand what’s going on in my mind. On point number two, I would hope this is the case, but I cannot know for 100% whether I’m living up to this standard. I think this is something that I’m pushing myself towards all of the time, and I think that is incredibly important. I think if you want to survive through this growth journey of a company as a leader, as a CEO, you have to live by your own standards and you have to make sure that everything you’re doing is okay for you and you can go to sleep and sleep well with anything that you’ve just said on an all hand. And for that I think it’s got to be honest, otherwise it just doesn’t work.

Darren [00:40:47]:

Yeah. So second thing I wanted to talk about quickly is this notion of an Act 2 for companies and to understand where you are in that most companies will find themselves having a very successful Act 1. There’s still room to grow, and I imagine there is for you in translation. But then this sense of what is the next S curve? What’s our second act? And I just love to hear like, where are you in that thinking?

Jarek Kudalovsky [00:41:17]:

Probably one of the toughest decision that I’ve ever made in these eight years. There is a natural tension between obviously the market that you know, the product that you know just doing pretty comfortably whatever you’ve been doing all of the time and continuing to do so. So including an inertia of an organization that is obviously very much built to do exactly this Act 1, but at the same time, I think if you want to build companies that are really impactful, you always have to think further than that. You have to maintain this excitement about what can come next and, and create the room and shape the potential for that, whether that’s in the organization or in the capital allocation that you’re doing. How much resources do you put into short term, midterm, long term, projects. But not only that, but also in your mind as a founder and as a CEO, you have to accept these things or basically challenge you to go there. And we’ve just unveiled a couple of weeks ago the fact that we have started our DeepL AI labs and that we are working with customers on the DeepL agent, which is our venture into the broader world of AI. We have been working on AI research, but always did so for a very particular and maybe kind of limited use case of language and translation. And now we’re going much broader. Technologically, that’s maybe not that big of a leap, but conceptually, if you look at the company’s mission and what we’ve been doing, that obviously expands our horizon. And there’s a lot of change management that happens with that. There is not only getting yourself comfortable with this thought as a founder, but also bringing the organization on this journey. And this is something where after I’ve made this decision that we want to go into this direction and want to build even more beyond language, I obviously had to work with my leadership team, bringing them along, work a lot with the whole company and make sure they understand the why and the what, where we’re going towards.

Darren [00:43:45]:

Yeah. So I know you’re still early. Let’s call this the early Chapter 0 of Act 2, but I’d love to hear any lessons from this experience. What worked? I know you described it as one of the most difficult decisions and, and what might you have done differently? And then what are the big questions that still remain for you as you think about ultimate success here?

Jarek Kudalovsky [00:44:07]:

Yeah, I think we might have been even faster than we were. I think making those decisions took some time for us. And in hindsight, I would say just decide very, very quickly and go and move and allocate more resources to this that would have made things even a bit faster for us. Us. At the same time, I think there is an incredibly complicated balance that you want to strike in this moment. You want to build this, as you just called it, chapter one of the new act, independently because it’s something different than what the rest of the organization is doing, what the company is doing. So we want to give it the freedom it needs to, to blossom, to grow. And at the same time, you want to leverage whatever you’ve learned throughout this eight year journey in the rest of the company. You don’t want to start from scratch. And this balance of how you do this, which employees from the existing organization do you bring over? How do you shape the values of this new organization? How do you Help hire for that. How do you take the help of experienced people in particular smaller areas of this new venture? That is a very complex undertaking and it requires, I think, a ton of small but yet very important decisions on how you shape this.

Darren [00:45:40]:

Yeah. So I’d love to move out of DeepL just for a moment. Maybe we’ll return as we wrap things up and we’re getting closer just to you as an overall human being. I know you have two children. Being a father is part of your identity. There are things, despite the all consuming nature of being a founder and CEO outside of DeepL. Round out the picture of Jarek for a moment if you could.

Jarek Kudalovsky [00:46:08]:

Yeah. As you said, I’m obviously a father and also a husband.

Darren [00:46:13]:

Yes.

Jarek Kudalovsky [00:46:13]:

So. So that is an important part of myself. I think as much as I’ve grown through the company’s journey as a person and as much as I’ve learned through that, I’ve probably learned even more through the journey of being a father. I’ve learned what responsibility means and that’s very much something that you can also utilize or which is helpful for you in your career and, and as being a CEO. And I think both growth journeys bring me really towards this part of me wanting to be a trustworthy, responsible person that is there not only for my kids, but also for the company in a similar manner. And I think both parts really should shaped me quite a lot over the last years.

Darren [00:47:09]:

It’s a very full life, I imagine it is for many people that are leading companies. And I’m also curious how you, what you’ve done to be able to hold all of that with the kind of energy and consistency that’s required, that is.

Jarek Kudalovsky [00:47:24]:

Definitely not an easy task. I will be honest about that. I think at some point in time, the, the fact that time is such a valuable resource that hits every, that hits every CEO and even more so probably a CEO that has a family. So basically every five minutes in your weekly schedule are planned through on what do you want to use those for? I have the luck that my kids are actually already starting to become a little bit older and a little bit more independent, which is great. And, and therefore I can even devote maybe a little bit more time to the company right now. I think on the other hand, if you’re doing what you’re fascinated about and if you’re really enjoying what you’re doing, and if you see a value and an impact in each and every one of those days that you’re doing, then this responsibility and this job and whatever time you invest into this. That. That is not that much of a. Of a burden anymore. That doesn’t become relaxing, maybe. But you’re ending the day being happy about what you accomplished and being happy about what the path forward is. And for somebody like myself who just seeks the fun and the challenge and is interested about what tomorrow is going to bring, I think that helps make the. This a fulfilling and rich life and one that can go on like this for. For quite a while longer.

Darren [00:49:03]:

Yeah. Well, speaking of time and ending the day, we’re ending your day right now and I want to be conscious of bringing us to a close and just giving you an opportunity maybe to add anything that we didn’t cover that you’d like to make sure you speak to about DeepL, about your role as CEO. Anything, you know, unique that you might be able to point to to or just to add a more finer point to something that we’ve already discussed. Is there anything that you’d want to add?

Jarek Kudalovsky [00:49:29]:

Hey, Darren, I think we’ve gone through such a broad range of questions ranging really from deep else strategical questions towards who I am. I think we’ve covered a lot of ground. I feel complete in this conversation.

Darren [00:49:45]:

So do I. I always want to extend the invitation. It’s been delightful to be doing this and thank you for your honesty in this conversation. Who you are has really come across and I imagine that will be true for people listening. So appreciate your time and thoroughly enjoyed this conversation.

Jarek Kudalovsky [00:50:02]:

Thank you for having me, Darren.

Darren [00:50:04]:

You’re very welcome. What a fascinating conversation. Jarek’s journey from a young computer scientist captivated by language to the CEO of one of the world’s most respected AI companies is an inspiring example of vision paired with humility. His openness, transparency, and deep sense of trust have shaped DeepL’s culture and powered its remarkable rise. I look forward to being with you on the next episode of one of One. And until then, I hope you live and lead with courage, wisdom, and above all, with love.

Over the past 20 years, Kiva’s platform has crowdfunded over $2.4 billion in interest free microloans to over 5 million entrepreneurs around the world, with a 96% repayment rate. In this episode we hear about Vishal’s origins growing up in Mumbai, then coming to the US for his graduate education, holding product roles at Microsoft, Groupon, Payscale and Remitly, and ultimately paving the way for his first CEO role at Kiva. We touch on the impact of Vishal’s deep meditation practice and commitment to self-awareness, his belief that growth at Kiva is a moral obligation, and the touching stories of entrepreneurs whose lives and communities have been transformed by the organization he leads.

Full Transcript

Darren [00:00:01]:

Hi everyone. Welcome back to another episode of One of One. I’m your host, Darren Gold, CEO of the Trium Group. Last year, Trium announced a bold new initiative to coach Pro bono the CEOs of 100 nonprofit organizations over the next decade. At the end of this year, we will be wrapping up our first cohort of 10 incredible CEOs. Today’s conversation is with one of those leaders, Vishal Ghotge, the CEO of Kiva.org, over the past 20 years, Kiva’s platform has crowdfunded over $2.4 billion in interest free microloans to over 5 million entrepreneurs around the world with a 96% repayment rate. In this episode we hear about Vishal’s origins. Growing up in Mumbai, then coming to the US for his graduate education, holding product roles at Microsoft, Groupon, Payscale and Remitly, and ultimately paving the way for his first CEO role at Kiva. We touch on the impact of Vishal’s deep meditation practice, his belief that growth at Kiva is a moral obligation, his commitment to ongoing self awareness, and the touching stories of entrepreneurs whose lives and communities have been transformed by the organization he leads. I hope you enjoy this conversation with Vishal as much as I did.

Vishal, it’s so wonderful to see you. I’ve been looking forward to this conversation for some time and I’m really glad that you’re here and really appreciate your time.

Vishal Ghotge [00:01:29]:

Likewise, Darren. I’ve been looking forward to the conversation as well.

Darren [00:01:32]:

Yeah, so I thought you have really incredible background and I think it ties into this extraordinary organization, Kiva, that you’re now leading and have been leading for I think almost three years. Can we go back and I believe you were born in Mumbai and bring the audience into who you are, your childhood, your career that followed that and bring us to the present day, if that’s possible.

Vishal Ghotge [00:01:56]:

Yeah, I’ll be glad to. You know, sometimes you think your career, your life is moving in random directions and it’s after a while when you look back and you say, oh, this all made sense. And you know, when I if the present day moment, I genuinely feel how I see the thread of connection what brought me to Kiva. So yeah, as you said, I was born and brought up in Mumbai and spent my childhood right up to my undergraduate years in Mumbai and growing up. I think the couple of things that have always stayed with me are my family values. Part of it was really about education and learning. So deep. That’s a thread that continued throughout my life and a big Portion of that was the person I consider one of my role models is my grandfather. And he had a big influence on my life and my career. And he was a social entrepreneur in Mumbai, and his passion was education, and he was a teacher. And then he started a whole bunch of nonprofit schools in Mumbai to help educate the underprivileged. And his mission was to uplift people out of poverty through education. And so I had seen how he had spent his life, and his life, it felt like a life that was well lived. There was purpose, there was mission, and he had a smile on his face. He passed away in his 90s. Until the day he died, he was working, but it was just. There was a. There was a purpose and mission. And I love philosophy. And one of the core Indian parts of Indian philosophy, there’s a thing called Karma Yoga, which means, you know, selfless action. And you do things with a detached, like a detachment of the outcome. You do things because the thing itself matters, and you put yourself into that service. And I saw him live those ideals, and it’s something that I’ve always felt like that’s what I want to get to. So, anyway, that was an influence, and I didn’t realize how much it would impact the path of my career. Anyway, so education was like a key thing. And so I did my engineering in India and then came to the US to do my postgrad studies. And I’ve always been a builder. I love building things. So engineering was a natural choice. However, when I did my computer science, computer engineering, and my first job out of college was at Microsoft. And although I loved engineering, I knew I was not the best coder. And I don’t think I would have cut it out as with all the other impressive peers I had as a pure engineer. And I found this, like, when I interned at Microsoft. Oh, we’re doing this new thing called program management, product management. It was quite new at that time, back in 2000s, I said, let’s try this out. And I absolutely loved when I was interned as a PM at Microsoft. This is the thing. I get to talk to customers. I got to figure out what to build. And then I worked with engineers, really smart people, and actually build this thing. It’s like, I didn’t know this existed and this is it. And I was like, I honestly don’t know what I would have done if it were not for the PM path. It felt like this is meant for me, and I really enjoyed it. And so that’s how I started Microsoft, you know, started as a PM and it’s interesting I ask you just a.

Darren [00:05:28]:

Little bit about that. We’ll come right back to this. But like, you know, anybody in tech right now takes this sort of the product management role as sort of a given. And you’re pointing to sort of the creation of that category just a little bit more about like, what was that? Like the emerging nature of product management. And lucky for you, you were in the right place at the right time.

Vishal Ghotge [00:05:46]:

Yeah, it was very early days that. I mean, PM was still a decently established discipline at that time at Microsoft, but still very, very nascent. And they were still trying to figure out what do PMs do. And so it was at that time a very, I would say an amorphous role. Especially at Microsoft, it was even more different. There were within Microsoft different kinds of PMs. Like, some PMs were very internally focused, some PMs were more technical PMs and you know, trying to figure out how to. They were really engineers, but they were better at communication skills and were trying to figure out how to do cross group work. And then there were PMs who were really focused on working with customers and figuring out what to do, how, what to build. And the discipline kept evolving. Even my role, I started much more as a technical PM and then moved on to becoming much more customer focused, business focused. And, you know, that grew. And I think the PM track itself has matured over years. So I would say back when I joined, it was very, very amorphous. And I loved it because it was amorphous. You could like do a little bit of everything. And that’s the kind of, you know, that’s the kind of gigs I love where you can do a little bit of everything. You’re not like stereotyped into one thing. And so PM was just fantastic for me.

Darren [00:07:00]:

Great. Okay, so continue with the part of your Microsoft journey.

Vishal Ghotge [00:07:03]:

Yeah, I’ll tell you, Microsoft. Like the thing I remember was I started in the Windows, like hardcore Windows group at Microsoft. And I think second manager I had at Microsoft was the person whose textbook I studied at grad school. So I’m working with people who are in the history books. Like, I’m literally down the hall from Dave Cutler, who’s like the father of Windows nt. And it’s like these people walk on water and I am right here, fresh out of school, getting to work with all of these people who are just amazing. And so I think it really felt like being able to work and not just felt like I think I did get to work with. I think some of the smartest people on the planet. And it’s just, it’s a very different experience when you know that there are people who are smart, like they’ve done really thoughtful, intelligent work and you can get to learn with them like side by side as peers. Right? And that’s just, that’s phenomenal, like somebody coming out of school. And so I really enjoyed that. And you know, Microsoft had this thing of like, I just was thrown in the deep end of a lot of things. I remember six or seven months into starting my job at File Systems in Microsoft, they sent me to Japan to represent Microsoft in some consortium and I was representing Microsoft, I said, why? What are you doing sending a kid over there representing Microsoft? And but I, you know, I like Richard Feynman, I love his books. And you know, some place there was a quote in his book, I’m paraphrasing it, killing it, where he said, hey, if someone’s going to pay me to do something, what the hell do I have to worry about? I’m just going to do my best. And that’s it. Like they, if they think I can do this job, then I’ll just, I’ll do my best. And so, you know, that’s the attitude I take. Okay, I’ll just go do my best and say, you know, I got thrown in a deep end in a bunch of places and learned to swim that way and it was great. I think one thing I feel I learned at Microsoft was really building complex software at scale. And it is underappreciated how hard that is. Right? And you’re talking about the software we build apps and this whole bunch of user mode software that’s built and it’s hard in its nature to figure out what the customer need is how to build it. But when you’re talking about system software, it has its own massive complexity because you’re building something on which other things are built, right? And so you’re building the foundations and those are hard to build. And so building that at scale in the right way, it’s just complex and you know, thousands of engineers working on something that you have to coordinate. So it’s a different kind of art and skill that Microsoft and other like many other large organizations have mastered. But it’s hard. And so I think I took that away just working with smart people and then also building things at scale that impact billions of people. So it’s fun, Fun journey

Darren: And you were at Microsoft for how long?

Vishal: I was Microsoft for 12 years and it was great. I loved a lot. I learned A lot. But in many ways, Microsoft felt like, at least for me, for better or worse, when I look back, it felt like I’m still in school. In some ways you’re kind of in a protected environment. In some ways you can fail, but I think you can fail only so much because there are layers of protection around you. And you’re also. You can be isolated in the. Like, you build a product and build a damn good product and you know how to build products, but then you throw it over the wall and then somebody goes, sells it, things happen. Like it just happens. I built this and just get. It got marketed. It just worked. And. But you don’t see the machinery at all because it’s so massive. And you know, going back to the learning thing, like, one of the things that I felt like, I just felt I want to see more of how things get done and, and I want to experience it much more. And so in as much as I loved it, I said I just need to continue my learning journey. And I found Groupon. I think it was the most incredible place I could have landed at. I know people at Microsoft at that time said, wait, you’re going from building Windows and Windows Phone to Groupon? Like, what’s the connection? I think what I want to do is learn how messy things are outside. In some ways, real world works. I’m going from school to on the street. And really some ways, not really, but that’s what it felt like because Groupon was this massive E commerce marketplace. When I joined, it had already scaled quite a lot still, I won’t say very early days, but still hadn’t completely matured either. So it was like lots of messiness and you were right there in the business and you could again dip your fingers anywhere. Not just in the product, in the business, in the marketing. And it was really exactly the kind of experience I think I needed. Again, bringing my product experience, but then learning so much about how things actually work in the real world. And so it was fantastic experience. I love, you know, I had lots of my lots of career highs and lots of lows and it was a great experience at Groupon. Learned. I think I learned more about how to build consumer products at Groupon than anywhere else because I was surrounded with really wonderful designers, product managers, who knew this is now the art and science of building good consumer products. And I really learned that in my five years at Groupon. It was wonderful. Yeah.

Darren [00:12:22]:

And from there, where did you go from there?

Vishal Ghotge [00:12:26]:

My next place in the learning journey was an organization called PayScale. It’s again a great mission driven organization, helping people understand how much they should get paid and you know, solving that problem, both for employers as well as employees. And apart from being able to like do the product definition, everything, this was my first C level job. So I was reporting to the CEO and I got to witness a bunch of things that are beyond just building products and beyond just running business. It’s working with a board. It was a private equity owned company. So like how does that work? We did a massive M and A with our closest competitor. I got to like, oh, this is how it works. And I saw what goes well and what doesn’t go well and again, the highs and lows of what that means and the implications on people. So it’s just again a fascinating learning journey of building the strategy and vision and product for the entire organization and then actually getting to see the inner workings of how things work at the board level, how things work with investors and like, so this whole bunch of wonderful, again learning, like lots of growth. So that was a fabulous experience. And then from there I went to a company called Remitly. Remitly is probably a really, really meaningful part of the journey that really helped me become the CEO that I think is needed for Kiva because Remitly is a genuinely, authentically mission driven organization. For those who may not know Remitly, it enables immigrants to send money back home. So cross border remittances. That’s what Remitly does, but it does it in a way. It’s now massively scaled company. Matt Oppenheimer, who’s the CEO, a really good friend and mentor. What he showed me over there while I was at Remitly was how running a really good business and keeping things mission oriented and customer centric are not at odds. In fact, how they fuel each other and how it stayed consistent even though the company has gone through a massive scaling, how that continues to be a core of the company. So again, fabulous experience. I got to be a unique experience of being a part of exec team that took a company public. So I got to be at NASDAQ when we were listed and got to ring the opening bell. Oh my God, what an experience. So that was lots of learning over there, lots of fun. And after that I took a break. I took a sabbatical. So it was 20 years of work. And it’s like before I do anything new, I just need to take a break. And I think that probably was a really meaningful part of the journey as well. We can spend an entire episode talking about meditation and mindfulness, which is what I gained at that break. It’s been a transformative experience for me and actually helped me a lot in my leadership journey. And I took that break. Then came Kiva. So.

Darren [00:15:22]:

But yeah, let’s definitely come back to that, because I want to both meditation and mindfulness, how important that is to you and your leadership, but also how to use a sabbatical wisely and just your experience with it in general. Right. A break from. So we can come back to that. But I do want to. I do want to get to Kiva. I’m sure people listening are eager because they’ve either heard of it or they’ve contribute to an entrepreneur or. And by the way, I’m definitely seeing the threads between your grandfather’s story and this tremendous two decades of career. It’s starting to become much clearer why you’re the perfect CEO for Kiva and why you chose it. But tell us a little bit about that decision and then also introduce the company to us.

Vishal Ghotge [00:16:09]:

Great. Yeah. I was on my break and then finally decided, okay, I need to get, like, I need to work again. And as they say, good things happen incrementally and great things happen all at once. And this felt like that. I got a call from the Kiva, the executive recruiter at the board, and they said, hey, we’re looking for the next CEO for Kiva. I said, I know what Kiva is. Why are you talking to me? I mean, I’ve never been a CEO before. I don’t have nonprofit experience. Why are you talking to me? And then they explained more about what Kiva was. And I mean, it’s really, we’ll talk more, but it’s a fintech company that is nonprofit. And, you know, when I looked at it, felt, oh, I’ve been on a 20 year internship for this job. Because what they’re looking for, they said, you know, we need somebody who understands fintech, understands marketplaces, can build software at scale, and is mission driven. And I said, check, check, check, check. And this brings me back to what I’ve always wanted to kind of be at for following the footprints of my grandfather. And you must be aware of the Japanese concept of ikigai, of, you know, I really felt like this is the place where my passion, what I’m good at, what I can get paid for and what the world needs all combined. And I’m at the center of that Venn diagram. And I genuinely feel, I don’t think everybody gets to experience that in their career. And I am just so grateful that it’s like, this is it, this is it. Like, when you see that there is no saying no, if you want to have me, then I am here. And so thankfully they said yes, and here I am. And I’ve always felt that it’s been three years and there’s been ups and downs, lots of things that I still question about, like lots of insecurities and everything, but I have never felt like this is not the right place for me. And it’s just been great.

Darren [00:18:03]:

Yeah. Well, congratulations.

Vishal Ghotge [00:18:05]:

Thank you, thank you.

Darren [00:18:06]:

It’s great for you. It’s great for the organization when that happens. So for those that aren’t really aware of Kiva, tell us, what is kiva?

Vishal Ghotge [00:18:13]:

Yeah, so Kiva is a. Kiva is a nonprofit organization. And our core belief is the big problems we see in the world are not really unsolved, they’re merely unfunded. And what we believe is like, if we can get capital in the hands of the people who are. And when I say people as like, entrepreneurs, low income entrepreneurs who are at the forefront of these crises, we can solve these problems if we invest in their livelihoods. And when I mean low income entrepreneurs, I’m talking about farmers. A farmer in Kenya, a fisherman in Philippines, a refugee in Jordan. These people know how to solve their own problems. They just need access to capital. They need a $500 to buy seeds for their farm, or they need $600 to buy a new boat or a few dollars to get supplies into their store. They know how to run a store, they know how to make a profit, but they don’t have access to that capital. And if you can provide access to that capital, they can succeed and they can solve their own problems. And through that, more systemic problems can get solved. And so we make access to that capital happen. And the way we make that happen is through crowdfunding. So it’s people like you, me, putting 25, 50, $100 and providing that access to capital to that farmer, that fisherman, that store owner, that refugee. And not as charity, as an investment, as a capital that they will repay, and they do repay when they’re done, that you can then give to somebody else, or rather lend to somebody else. And so that’s really the concept of how KIVA works. So if you go to www.kiva.org, you will see profiles of thousands of entrepreneurs across the world in 80 different countries. And they will have listed their. These are real people will have their real need for what they’re going to use the money for you can read that up and then you can say, oh, I relate to this person or I want to invest in this person’s livelihood. And here’s my 25, here’s my 50, $100. We crowdfund pool that, make a loan happen to that person through a partner in that country and again, when they are done, the money comes back, flows back to you. And we’ve been operating now for 20 years. This is the 20th year of Kiva and we have made $2.4 billion in loans over these 20 years, reaching over five, close to five and a half million people. And through that period, our repayment rate from these low income entrepreneurs has been 96%. So $0.96 on the dollar comes back, which is just phenomenal when you’re talking about the kind of adversity most of these people are facing and the access to education or access to resources that they might have. And the money comes back and it keeps failing. So that’s what Kiva does.

Darren [00:21:08]:

Incredible organization. I’ve been on your platform, it’s incredibly easy to use and very dynamic. You came on board, the company had been in existence for 17 years. I’m always curious and certainly curious here. What did you see, what did you love and what was the vision for the kind of imprint that you wanted to put on the business over the next three, five, ten years? And where are you today in that, in that vision?

Vishal Ghotge [00:21:35]:

Yeah, a great question. I mean, once you come in. Firstly, for such an incredible organization that’s been around for a long time, I think at least my. I wouldn’t say, I won’t give any advice, but I think my approach was first, I just want to learn and know. And because there’s always a perception you have of how things work and then there’s reality and there is a firsthand lived experience that you need to gain before you can do anything. So you need the organization to change you before you can change the organization or the impact. So I think my first period was just meeting people, learning and helping understand. I’m honestly still on that learning journey. Just still every day I learn something new. But at least the first several months was just learning. Listening to so many stakeholders across, but mostly the two main parts of our organization, which is the entrepreneurs, the borrowers who we are in service of, and then our supporters, our lenders who are putting their capital onto the platform. So listening to them, hearing from them, and again, just being inspired. Like it’s just so inspirational. Every story is inspirational. And also visiting people where they are and Seeing it firsthand is just so much, so much so different and it changes you, changes your perception. So that’s what the first, I would say first phase was trying to understand and then really trying to have my bring my opinions, my values, what I see we need to do into bear and like, and then mixing the two and saying, and laying down the vision of where we need to go over the next decade or so. So that’s what I did. I think where we are headed towards one thing is very clear. Like, the impact is absolutely evident. Clear and there’s impact, a lot of impact has happened. But there’s also clear, like, there is so much more need. Like, it’s like it literally is the tip of the iceberg. We know it works. We know it transforms people and societies. We know that’s a way we can solve some massive problems in the world. And so it’s our, I call it our moral imperative to be able to do more. Like, why should it not be 10x more? If I are reaching 5 million people, why can’t we reach 50 million people? And on the same side, I know whenever I talk to people, they feel, oh, this is great, this I, I think this concept makes sense. And then I asked the question, why is it that there are about half a million people on KIVA on an annual basis who are lending just phenomenal. But why is it not 5 million, why is it not 50 million? Like, what is the unlock that gets me to 10x more people? And here the growth is just. Growth is because the scale of problems we need to solve is so high that growth is, I would say, a moral imperative for us. And so that’s the problem, honestly, we are trying to solve. It works. How do we get more people onto the platform? How do we support more people in solving their own problems?

Darren [00:24:34]:

Any theories that have come up or any sort of vision for unlocking that?

Vishal Ghotge [00:24:40]:

Yes, I mean all of these are hypothesis and that we are playing through. As you know, it’s all about what do you think works? And keep experimenting. But one of the things is we have an internal vision that we have four pillars that we are working on it. The first one is what I call reframe, which is when Kiva started, there was this movement around microfinance where people really like Mohammed Yunus, who’s the father of microfinance, won the Nobel Prize at that time. And so everybody was there, people knew it. And as things go up and down and different concepts come in, it’s not the same as it was back in 2005, where you could walk on the streets and people would know, oh, I know what microfinance means. I know Muhammad Yunus. And so, however, what I see is the microfinance, or the way we are investing in the livelihoods of people, not only solves their individual problems, it actually helps us solve systemic issues. Right. When you talk about not just poverty, but we talk about things like impacts of climate change, impacts of human displacement, gender inequality, all of those get solved when you invest in people’s livelihoods. And one of the things we are doing is reframing and start talking about, if you care about climate change and you feel that’s a big, enormous problem, how do I contribute towards it? The solution is, you don’t have to feel paralyzed by it, but you can help this farmer who is trying to buy a biodigester, help him get that biodigester. That’s the way you can actually meaningfully solve the impacts of climate change. You care about gender inequality. You help this woman who’s trying to put her daughter in school capital so she can start that shop that allows her to do that. That’s how you solve gender inequality. You care about displacement, you care about refugees. You help this tailor who’s come from Syria, in Jordan, knows how to start a tailoring business but doesn’t have access to capital, Help him start his business. That’s how you solve displacement problems. So I think each of these can be connected to a real person. And you can, like, you can solve these big, what might otherwise feel like massive hard problems. Juggernauts. You can actually make a dent by taking the first step, taking a small step, and having a meaningful impact on an individual person’s life. So that’s one part is like, how do we reframe what you’re doing so that it connects authentically to the problems people see today?

Darren [00:27:18]:

Yeah, I think these big systemic problems can feel overwhelming, and you feel paralyzed by it. So it’s a really powerful reframe. You said there were some other things that are in the works.

Vishal Ghotge [00:27:30]:

Yes. Other is how do we. What we call amplify, which is there are lots of people on Kiva who have told me, like, hey, I love Kiva and I contribute towards it, but I would love to bring others onto Kiva as well. And it sometimes can be challenging to help somebody else understand what this concept is. So we are making it easier for advocates on Kiva to be able to bring others onto Kiva through creating their own, what we call giving circles, giving funds, so you can say I care about this cause and I’m starting this giving fund on my own. Join me in it. So your task is less about understanding some deep mechanics of things, but join me in doing that. So we’re helping our people who believe in Kiva and are sold on. This is the way to transform change, to actually bring others on in an easy way and not just spread the word, but also actually bring more dollars onto the system, which is what we can help spread out. So that’s like guiding and amplifying, guiding people so that they can amplify their personal impact and make it even bigger. That’s the second part. And third is what we call scale, which is we’ve had a really interesting part of our business which is working with corporates and working with organizations, bring their employees and their stakeholders onto kiva. So we’ve run really successful campaigns with organizations like Visa and Bank of America, remitly Zora, whole bunch of organizations want to work with us and they, they can serve a really great dual purpose of not just doing good in the world, but engaging their employees in a meaningful way. When we work with Visa has been one of our long standing partners. And when they run a Kiva program within Visa, their employee participation rates are as high as like 82%. 80. 80% of the people at Visa make a loan to somebody on, on Kiva through their organization. So it just helps spread much more awareness and helps the organization do a dual purpose of doing good, but also engaging their employees. And that’s something that we are investing in and really building a platform where organizations can come in and use it like as a B2B SaaS software and say, oh, I want to do this. How do I deploy this in my organization, put dollars and engage my employees. So kind of scale it for wider impact. So those are the things that we are working on, investing in, which continues the same ethos of how do we get individuals helping individuals and changing the world.

Darren [00:30:06]:

I’d love to talk a little bit about your leadership, your leadership philosophy, how you found these first three years as CEO. It’s your first role as a CEO. Tell us a little bit about what you found and what you’re discovering about your own leadership philosophy and maybe some things that are unique, unique to the way you lead. In particular.

Vishal Ghotge [00:30:27]:

I would say I’m still discovering and it’s like it’s a journey to use the cliche, but I found the role to be, again, just talking personally to be quite revealing of who you truly are. And I think the only way you can meaningfully be a successful CEO? Whatever success means with successful CEO is by first truly understanding who you are, what your values are and then authentically being that person. Because otherwise it’s just, I find it really hard to. I’ve tried to like emulating somebody else or it’s just hard. I think you need to bring your true self as much as possible that like, that lets you be the best CEO you can be by being as authentic as you can. So I think one of the things that I’ve found and which is it goes back to my time in my sabbatical is like truly spending the time to be self aware and understand what your true values are. How do you want to show up? I think that is really, really important to being a good CEO. I think so from a leadership philosophy perspective, I think there’s some simple things I just believe, firstly, just be a good person. I think it’s underrated just being hard to define that. But you know what good is and just be good. You can treat people nicely. There is, you know, if you’re making hard decisions, you can still do it with being gracious and dignified. So I think just be nice. It’s like, it’s one of my mantras is just be nice. I would say the second one would be I think it is a. The journey is the destination. And that’s what I believe, to be honest. Like, I think there are massive problems we are trying to solve, but are we not going to solve all of them? Right? It’s not like it’s ended, it’s like, oh, we solved the world’s problems. It’s done. It’s not. There are going to be new problems. It is. So I want to make sure that we, myself, as organization, everyone, the people involved, can all enjoy and celebrate the journey itself, the hard and the good moments, and not wait for like, oh, there is this thing, that’s this goal that we’ve set and when we reach that goal is the time when we’ve achieved because you know, there’ll be another goal and there’ll be something more. And even, even for whether it’s like material possessions and stuff we’re talking about or even these aspirational goals in service of something, there’s still always going to be more. And I think so making sure that you are on this journey, I think that is a key thing that I try. It’s hard sometimes, like it’s really hard. But I think it’s important to take a moment and pause and make sure that you are Truly enjoying the journey. I think that’s a philosophy that I bring in. And then I think probably what I mentioned earlier is like being able to be genuinely authentic, vulnerable and bringing your true self as much as possible. It’s hard being, especially being a CEO, that you have to balance that. I can’t go and tell my team like, oh, I have no idea what we’re doing here. But there are times when you will have adults and being able to being authentic and connecting with people. So that’s, I think how you build trust. And that to me is important as a part of being a good CEO is just building that trust with your organization. And that comes through being authentically vulnerable, which I think has been a part of how I’ve tried to lead.

Darren [00:33:52]:

Yes. And any particular aspect of the role that’s been challenging for you or maybe to ask it differently as you think about your next chapter of growth as a CEO, what would you point to? Like, what is the next evolution of Vishal?

Vishal Ghotge [00:34:07]:

I think it is, it’s still getting to know myself better. I find my biggest obstacles are when I have doubts, I have fears I have. I avoid doing the things that I feel need to be done. And those are all, in many ways they’re not real and they are things that are imagined. And I need to spend time to continue to understand myself better. And then if I can solve the problems or issues that I have in my progress, I think that is what I feel I can bring the best to the organization because often I do a bunch of writing and thinking about it always comes down to, oh, I didn’t do this because I was afraid of something. It’s like, why were you afraid of something? And it always is something that you are imagining, which is not true. And you need to get to the core of that. So that’s. I would, if I had time to spare, I would spend it honestly being selfish on myself and understanding myself better and getting the core of some of these things because I think that’s how I can bring the best of myself.

Darren [00:35:15]:

Yeah, thanks for sharing all of that. There are a couple of things that come to mind. I’m just going to throw them out there to get a reaction from you. One is a deep philosophy of mine and our firm Trium, which is a company’s a perfect reflection of its CEO. And as you talked about what is the unlock to get to 10x lenders entrepreneurs on the platform? My instinct always goes to it’s something about the CEO. And that is not a criticism, that’s a Pointing to the highest point of leverage in an organization. So I’m tying to what you just shared. It’s like what are the things that are getting in the way of, of unlocking myself? Because I can’t unlock a company if I’m not unlocking myself. So does that resonate for you?

Vishal Ghotge [00:35:59]:

100%. 100%. And you had earlier asked what are the things that you find challenging or you’ve discovered. It is interesting. We all self critical. You always look at what are the things I could have done better. But as a CEO especially anything that goes wrong, I can find a direct thread of that towards me this happened and if I had done this, this could have happened. And there’s always a direct threat. And you have to learn to both be self aware of that, but also not let that be a reflection of that means I am bad or I’m not a good CEO. But it is 100% true as a CEO that you can always draw that thread. Then being able to figure out like okay, if this really matters, if there’s something I need to change, then what do I need to change in myself so that I can make the these changes. And so that I find is a unique aspect of the CEO role where it does tie to you and it is important. Yeah. And especially as a CEO of a nonprofit, a charity like nonprofit where we are fundraising, it is even more evident. I mean this is one of the revelations I’m just realizing is how much they never told me about this when I was talking about the job as well is how much people will look to spend talking about donors and lenders or took to not just what the organization does, the impact, but who I am. And it was just surprising to me. It’s like, oh, it matters. At least in this. It may not matter as much in a for profit organization it might, but you know, the product is good, service is good. Sure makes sense. I think here it is both. Yeah, of course your impact needs to be. But what kind of person are you, Vishal? And it matters. And so I feel good that you know, I can authentically talk about with passion what we are doing and why I am here. And it helps but. But it increases in some ways the level of importance there is in me understanding my true self, my value so I can genuinely and authentically talk about it.

Darren [00:37:50]:

Yeah. This idea of like you’re the chief evangelist, you know, kind of popped in my mind which I think is very true for this kind of organization. Maybe this gets us back to your sabbatical because what We’ve just been in a conversation around is a lot of self reflection, self awareness, inner work. And I imagine there’s some tie there to how you spent your sabbatical. And we promise to go back to that, talk about that break because a lot of people have the good fortune or they land up, they land in a place of, of time. How did you think about using that period of time? How did you use it? And then, yeah, I’d love to. I think some of it will probably talk about your meditation practice.

Vishal Ghotge [00:38:32]:

Yeah, I actually expressly did not want that to become like, this is my goal for the sabbatical. Like I’m going to walk the Pacific Crust Trail or I’m going, like, I, I mean it just becomes another thing which kind of like, yeah, that’s another. Like I didn’t want that. And I approached it with much more. Like, I’m just going to kind of be. I’m just going to be and just spend time with, doing the things that I enjoy doing and spend time on myself. I did not think that I would start and discover meditation, mindfulness in that time, but I ended up doing, which has been transformative. But I started initially which was with just, you know, three years ago and my kids were, I mean they’re still young, but they were even younger. It’s like, I want to spend time with my kids more. I just make the breakfast and lunch and drop them to school and pick them up and just be around or say more yes to things, which is somebody I haven’t met in a while would say, hey, Vishal, do you want to meet for coffee? And I would say yes, because I have the time. I can meet you. And so more yeses to things. Get back to things. Like, I used to play squash a lot and it just got dropped for like years. And they say, oh, I’m going to start playing squash again and just go in the middle of the day and play squash. And so I think not having any goals is being just truly trying to be was great. I initially thought whether I would. I did worry first, like, oh, am I going to feel like I need to go do something? And like, how much how would I. And I realized like I could actually do, I could, I could do this. Like, yeah, that’s fine. No, I need to go back and you know, actually earn money. That’s important. But I could, I could do this if. So I, it was, it was revelation for me personally. And then I really got into reading and like I always been interested in philosophy. I used to Read up a lot. And I went down the mindfulness meditation path, and it was absolutely transformative for me. I think that practice has been a cornerstone. I have a daily meditation practice and the impact of that on who I am as a person, who I am, I show up as a leader, has just been. I cannot understate how important it’s been for me. And I still feel I’m like, very early in the journey, if you will, and there’s so much more to do. But I think I’ve learned to pause, learn to be able to be present most of the times, maybe 50% of the times. And it just changes how you react and you build a relationship with your thoughts. And I think that is genuinely transformational because I think every moment we are with this person who won’t. Who will be there with us whether we want or not, talking things that. Whether we want to hear or not, and we just don’t know how to deal with this person. And I think meditation, mindfulness gives you this way of like, oh, what is your relationship with that thought? Should you not identify yourself with that thought, who you are? So there’s a. I think it’s a tool unlock that I wish everybody has access to. You know, who was it Blaise Pascal.

Darren [00:41:41]:

Had said, yeah, man sitting in a room by himself.

Vishal Ghotge [00:41:44]:

Right. Like, most of the problems in the world is because man can’t sit in the room with himself. And I think if just people could do that, oh, my God, I think we could solve half the world’s problems. Yeah. So it was. I’m lucky also. I feel like it is a thing that I feel. It’s hard to tell, like, oh, do this. Like, you can’t. I think it is at the right time. It’s like, oh, this is. I get it. And it’s a realization that people need to have on their own in some ways. But I’m happy that I chanced upon it and then kept up with it and hope to keep with it for the rest of my life.

Darren [00:42:17]:

Yeah, I have a meditation practice of my own and understand for myself the impact it’s had. But for you, particularly in the role of CEO, practically speaking, where this capacity to have a different relationship with your mind, to create separation from thoughts, not over identify with them. Not that we’re necessarily doing it for benefit, but where does the benefit of that appear for you in your leadership?

Vishal Ghotge [00:42:43]:

I think mostly I’ll see what comes most to mind is I have had a lot of. We can go into an entire episode talking about it where, how much. I have associated my self worth to what I do at work and looked at every failure as my failure, like a work failure. I was like, that’s just mean. I am not good. And it’s not been healthy. Especially as a CEO, that can be extremely. If you don’t deal with it well, it can be mentally very challenging because as I mentioned, everything, every single thing that goes wrong can be a threat to you. And it is. And like you can like, if you start like associating your self worth with that, it’s not, it’s not a good journey. And it doesn’t mean that you shouldn’t be self aware or critical, like what needs to change. But being able to distance that, saying, oh, this is work, this is me. And having that, I’m observing this, creating that distance allows you to both be well and do the best you can do. When that association becomes all muddled and you say this is who I am, it just, it’s hard. And then you actually can’t do your best. So that distance, and I don’t think there was anything else other than meditation or mindfulness allowed me to create that distance. And the same thing with thoughts as well, which is like a thought, you can’t control your thoughts. Just something pops up and then if it pops up as a problem, then the only, only thing after that is solving that problem. And then you are solving that problem. But I think meditation was, mindfulness is the only tool which allows you to not solve that problem, not ignore that problem, but just observe the problem and create that distance and not identify. I think to me it’s, yeah, I don’t know how I could do what I need to do if I don’t create that distance separation. So yeah, that’s how it’s helped me as a person, but definitely as a leader because otherwise I would just be looking at every single thing that’s going wrong. And not that I don’t do it, I think, I mean, as I said, it’s probably 50% of the times I can be mindful. Probably 50% I’m not. And I still, oh sh. Why did I not do that? But then it allows me to then take a pause and say, no, no, no, let’s take a pause. And that is a way out, I would think.

Darren [00:45:06]:

Yeah, you mentioned the first few months and I’m sure you hear stories of entrepreneurs all the time and stay close to them. Is there one story in particular that comes to mind that you’d be willing to share to bring to life the magic that’s created Akiva.

Vishal Ghotge [00:45:23]:

So many, so many. I can’t stop at one. It’s hard. But I’ll tell you. Let me tell you a couple. How about that?

Darren [00:45:32]:

Okay, great.

Vishal Ghotge [00:45:33]:

The first one, I’ll tell you because this one is. It’s truly the epitome of ripple effects that can happen through, like, small, very small investments. So it’s a story of this amazing woman called Ferong Shadung. She is from Cambodia. And, you know, growing up, she was just any average girl, you know, growing up in large family, parents didn’t have a lot of resources. When she became of marriageable age, their parents said, like, that’s your next step. You gotta get married. And she’s like, no, I want to study. I want to do more. They said they’re supportive parents, but had no access to funds. Like, we can’t send you to school. Like, that’s our options. Either get married or, like, figure out how you’re going to go to school. Thankfully, she was able to get access to a $1,000 loan from our partner WEDU, that’s in Cambodia, through, I think 21 lenders lent that $1,000 loan. That loan was the reason why she could go attend her bachelor’s in Cambodia. After that, she went on to do her master’s in public policy and came back and became the executive director of an organization. It’s called Bante sri. It’s called Citadel for Women. That’s what it means. Which helps other women who are at risk, who are otherwise don’t have access to starting their own lives, supports them, gives them funding so that they can create their futures. Hundreds and thousands of such women so that one change of, like, having access to that capital that she otherwise wouldn’t have had allowed her to go on to do the what she wanted to do and came back and created ripple effects that’s impacting hundreds of other women. So it’s just. And I met Fei Rong. I was in Sydney, where we had asked, called her for a conference where we talked about the impact that it has had on her. And I asked her, like, how important was that particular loan? And she said, I’m not just saying it because you’re here, Vishal. That was the make or break. Like, if I didn’t have access to that, I would not have. My life would have been different. And so it makes a massive difference in people’s lives. And for those who want to have the ideas and have, like, have the desire, as I say, talent is universal, opportunity is not. And this gives people the opportunity. And when you prime it again, it’s shown like you have the opportunity. People go on to do the things on their own. So Fei Rong’s story has just always been. I always say that because it’s just. It deeply touches me of how she was able to bring it back and create ripple effects.

Darren [00:48:08]:

Yeah, you had another story?

Vishal Ghotge [00:48:09]:

Yes, I had. We could do a whole thing about stories, but this one was very interesting because I recently went to Nairobi where we visited a whole bunch of our entrepreneurs. And I met this woman, her name was Nancy, and she was running a bookstore. And she had taken a kiva loan and she was running, like, for supplies and everything else. And we talked about. I went and we talked about her business really well, and she was so, like, she knew exactly what was happening, and she’s running a business really efficiently, and it felt like a really good business. And I said. I asked her, like, why. I’m not sure, like, why are you looking? I don’t know why you’re looking for these loans right now. I just feels like your business is running quite well and what is the need for this extra access to capital? And she said, oh, yeah, I could run this. But what happens is I work with the government and the school government systems. And the way it works is I provide them the supplies. She’s providing supplies to schools a lot, and so provide them access to these supplies. I give them. And way it works in here is like I. I had to invoice them and I get paid back like maybe a year afterwards or several months later. And it was mind blowing to me, which was like, she is providing services and she is the little guy here, and she has to wait for months, up to a year to get money that she’s owed back from the government. And to be able to do that, she has to get loans that are expensive for her. And it’s like, wait, this is. This doesn’t make sense. It should work the reverse way. But she had this smile on her face that this is how it works and we can do this. And time and again, I saw that talking to entrepreneurs, especially in Nairobi. It was access to working capital that they needed because the system was completely reversed and it favored the big organizations, big corporations who could pay back on their own terms. And these people had to figure out how to, you know, how to get access to capital. Even, like people paying school fees for kids. I talked to some parents who were taking loans for school kids fees, and I was like, wait, how is this going to work? This is not A productive loan. How is this going to. Actually because most of our loans are productive and I had worried like, how is this productive? Oh, it’s like I can pay the monthly, but the school needs the fee, lump sum at the start of the year and I don’t have that cash. So if I. That’s what I’m getting from Kiva, I can then pay that lump sum and then I can pay it monthly. So if the school allowed me to pay monthly, I wouldn’t need a loan. But that’s what I need over here. Oh my God. This is, this is like. So anyway, we take these access to capital so for granted in like staying in a place like this. Yeah. If I want to buy a house, I’m going to get a mortgage. If I want to start a business, I’m them, I’m going to get funding. These basics are just not. You can’t expect that. And so it’s not at all talent. It’s really there is basic resources are not available. So yeah, if we could solve that problem, I think a ton of other problems can start solving themselves.

Darren [00:51:22]:

Yeah. It’s becoming so much clearer to me why you chose this organization and how magical it is. We’ve covered a lot of ground before we wrap here. Just wanted to give you an opportunity. Anything else you’d want to share or even highlight something that we’ve already spoken about before we wrap.

Vishal Ghotge [00:51:41]:

Oh, we covered so much. This is a great conversation. Darren.

Darren [00:51:44]:

Loved it.

Vishal Ghotge [00:51:45]:

Thank you.

Darren [00:51:45]:

Likewise.

Vishal Ghotge [00:51:47]:

Yeah, really felt like having a conversation with a friend. So it’s awesome. I would say if I want to leave with something, it would be again, an insight that I’ve had from meditation, mindfulness, which is you can always begin again. And I think that’s just again, something that has helped me a lot, which is anything like every moment, every day, every moment is where you can say, ah, this is something I didn’t want to do. But you can just stop and say, okay, this is a fresh day, a fresh moment, I can begin again. And I think it’s just, it’s having that attitude, having that realization you can genuinely do that. It’s helped to me and I hope it’s something, an insight that can help everyone.

Darren [00:52:28]:

Yeah, it’s almost something that you’re probably entrepreneurs carry with them, that kind of entrepreneurial spirit as well. It’s been a wonderful conversation. Congratulations on the 20 year anniversary. Congrats on approaching three years as CEO and thank you for all you’re doing and all your organization is doing. And for this incredible conversation, really enjoyed it.

Vishal Ghotge [00:52:51]:

Thank you Darren. Take care.

Darren:

What’s most clear to me from that conversation is Vishal’s commitment to deepening self awareness and his authenticity as a person and leader. His story is a testament to the power of aligning values, purpose and mission. I look forward to seeing you on the next episode of one of one. And until then, I hope you live and lead with courage, wisdom and above all, with love.

Listen Here

Jeff’s career has been extraordinary. He spent over 20 years in senior roles at American Express, GE, and Home Depot, which he calls a masterclass in brand process and culture. Later, he ran multiple mid-cap businesses, including Larson-Juhl, a Berkshire Hathaway company, where Darren had the privilege of serving on his advisory board with UPS CEO Carol Tomé, and former Home Depot CEO Frank Blake. Today, as part of Berkshire Hathaway, he chairs six companies and is CEO of three of them: Fruit of the Loom, Larson-Juhl, and Star Furniture. This is a conversation about leadership, transformation and legacy told by someone who has quietly and consistently built extraordinary results while staying true to timeless principles.

Full Transcript

Darren [00:00:01]:

Hi, everyone. Welcome to another episode of One of One. I’m your host, Darren Gold, CEO of the Trium Group. Every so often, the show gives me a chance to sit down with someone who’s been an important figure in my own journey. Today is one of those conversations. I first met Jeff Cohen more than two decades ago when I was a young investor trying to recruit him to a CEO role in Buffalo, New York. He passed on that opportunity, but. But over the years, Jeff has become both a mentor and a dear friend. Jeff’s career has been extraordinary. He spent over 20 years in senior roles at American Express, GE and Home Depot, what he calls a masterclass in brand process and culture. Later, he ran multiple mid cap businesses, including Larson Jewel, a Berkshire Hathaway company, where I had the privilege of serving on his advisory board with UPS CEO Carol Tomei and former Home Depot CEO Frank Blake, a testament to Jeff’s ability to attract incredible people. And today, as part of Berkshire Hathaway, he chairs six companies and is CEO of three of them, including Fruit of the Loom. This is a conversation about leadership, transformation and legacy told by someone who has quietly and consistently built extraordinary results while staying true to timeless principles. Please enjoy my wonderful conversation with Jeff Cohen.

Jeff, it’s so good to see you. Thanks for being here. I’ve been looking forward to this conversation. I’m delighted we’re having it.

Jeff Cohen [00:01:26]:

Me as well. Good to see you.

Darren [00:01:27]:

Yeah, good to see you too. And one of the great things about doing this show is I, from time to time get to have a conversation with somebody I’ve known for a while. And that’s certainly true for you and me. I think we met in 2003, so 22 years ago. And I thought we might start there maybe a little bit before there. I know you had some experience, but you were in this formative role as president of the services division at Home Depot, and I was desperately trying to find a CEO to run one of our companies that we were invested in. I was a young private equity investor and I was trying to convince you to take a job in Buffalo, New York. So with that as our setting, take us back because I’d love for listeners to understand your background before we get into what you’re doing today. And so we could start there. It’d be great.

Jeff Cohen [00:02:19]:

Well, I’ll wind back a couple chapters. Before I went to graduate school at USC in Southern Cal and had actually a 22 year corporate career, functionally originally in marketing in BD and then later on more in sort of GM run the business Type jobs. But I was very fortuitous in the way it worked out. Certainly unplanned, but in succession I worked for American Express and then GE and then Home Depot. We which was just terrific from the standpoint of each company having really a special set of skills and experiences. Amex being a great services marketing company, a wonderful brand, really built a wonderful brand around exclusivity and affinity and a great sort of services company. GE of course was a masterclass of management development, process improvement. Got my Six Sigma brown belt, black belt there and. And certainly a company that invested very much in its talent and had the processes and mechanisms. Really great learning background. Home Depot Darren was a masterclass in culture. The founders were still running the company. So I had an opportunity to work for both Bernie Marcus and Arthur Blank who on paper probably should have failed 50 times on their way to their first hundred billion dollars in sales, but just had invented or reinvented a category in terms of big box retail where you could get great prices and great selection and service. And it really hadn’t been done before. I was an experiment of Arthur Blank’s. I was in a group of one of the first outside people to come in at a senior level. And I will tell you now that the over under on the betting was six months that I would last for six months and I was there for six years. So I covered the bet. But Arthur had the prescience to believe that as successful as they’ve been, they had to start to incorporate new sets of experiences and talents they wanted to grow in direct marketing businesses and commercial supply. I was asked to head up the first online initiative and I said Arthur, what’s our strategy? He said we need to do the Internet. I said okay. It was 1998 and I said well what’s the strategy? He goes we need to do the Internet. So I realized we were at the beginning of that journey. So virtually, I mean I was one of I guess six or seven senior officers reporting to Arthur, but was really the group president of all other anything that didn’t fit neatly into store merchandising. And one of those areas was the business they now call at home services. And that’s where we came connected around the installation and service business. A lot of retailers, the idea of running a services type business where there’s follow on and project management and so forth is a new muscle, you know, to build. And I was very involved in that. So wonderful cultural education. When I joined, by the way, they sent me out to work in the stores for three months. And I was a group president. I thought, they’re kidding, right? Because I’ve got a job to do. And I was anxious to get to it. And Arthur said, no, you’re not really going to be able to add value until you really understand what our associates go through when they’re working with customers on the floor of the store.

Darren [00:05:10]:

That’s amazing.

Jeff Cohen [00:05:11]:

And you need to do that in every division of the company. And so for three months and working in the store meant Darren putting on an orange apron and walking in and helping customers in the aisle. People that knew me already knew that I was not the most handy person in the world and they thought that was uproariously funny. But I would stand in the electrical aisle and some guy would come in and say, I need the thing that this fits into. And I said, I don’t even know what that is, let alone what it fits into. So gradually I learned to go stand in the garden aisle where I just help little old ladies carry mulch to their cars.

Darren [00:05:42]:

Smart.

Jeff Cohen [00:05:44]:

That was my core competency there.

Darren [00:05:46]:

I knew this about your background, but what I’m reminded of is you had the opportunity early in your career to work early and mid in your career to work with sort of three generational iconic companies. And before we get beyond that, I, I’d love to mine those experiences a little bit because I imagine there are people listening to this right now, maybe some that are founders and CEOs of their, their own companies that didn’t really get the experience of growing up in an era of American Express, GE and Home Depot. And they’re still obviously important companies. But you’ve started on Home Depot and maybe dig a little deeper there. This idea of a masterclass in culture and even like the distinctive practice of having a group president spend his first three months with an orange apron on the floor. What else was it about Home Depot that you took away as being formative?

Jeff Cohen [00:06:41]:

Yeah, I think the whole concept of servant leadership, Darren, from beginning to end, any characteristic that you could come through, I think they role modeled rather beautifully at the time, including the humility of saying, we’re not ever going to be smarter than our customer. We’re not ever going to conceive of products or services or, or benefits without going out and visiting and working with our associates on the floor of the store. And that was pretty special. I had not seen that in action before, where you really were with humility, putting yourself in a vulnerable situation in order just to learn and be able to support the associates. Bernie Marcus had an expression that when he was asked about the stock price, he said, listen, just take great care of our associates and they will take great care of our customers and the stock price will take care of itself. And really lived by that. They were also, I think, pretty forward in some practices, including compensation. So they pushed stock ownership of the company very far down into the company, at least as far as the store manager level. And there were 1200 of them by the time I got there. And here were guys and gals probably with high school educations that were made millionaires, but they would run through walls for Bernie and Arthur because of that culture, because of how they portray themselves, because of their incentives being aligned beautifully with the company incentives. And that was pretty special. I’d never seen that before or heard of it before. And we go to store manager meetings with four or five hundred people. It was like a revival. It’s more rock concert than it was business meeting. And you had these two iconic guys, but they were certainly planning for the next generation. They brought in ahead of international as they were looking for opportunities for international growth. There was an expo design center at the point, so they brought in a guy that was senior in Macy’s that really knew about the sort of high end fashion business and how to do those things. So it was just a, it was a very special time with a very special group of people. And of course there I had a chance to meet a younger Carol Tomei at the time who was the VP of finance when I joined. And then Frank Blake joined later. And those of course are two very important people in the history of Home Depot as well. But immense amount of talent, mostly homegrown and man as far as instinctive skills and living on your wits and knowing how to make money, but most of all knowing how to serve customers. And I think that in some way, shape or form, I carry that with me probably every week and maybe even every day of those things. We talk about servant leadership, we can also talk about integrity. Arthur Blank was a rocket smart, financial oriented CEO, but he, in my life is mostly my role model for integrity, for always taking the high road, even when people around him might be on a lower road. He was just a high road sort of a guy, which I really appreciated about him. So there was transparency, there was humility, there was integrity, high emphasis on communication and being out on the floor of the store. That culture, as much as I had seen to date, but have seen since, really reflected, I think, servant leadership in a beautiful way.

Darren [00:09:47]:

Yeah, there’s so much we could pull on from that Example, probably take our whole conversation. I want to also talk about GE and American Express, maybe in that order. Just sort of working backwards. You run into senior executives that were trained in the early part of their career at ge and it’s. They always point to that training as being, you know, one of the most impactful experiences. And for those that aren’t familiar with the lore around the professional development and leadership training from ge, can you bring that to life through your own experience?

Jeff Cohen [00:10:19]:

Sure. I mean, it was a company that clearly invested in it. And that is where I heard the phrase, you know, when you go to run your own business, have your CFO and your head of HR on either side of your office, there’s nothing you won’t deal with every day that isn’t talent or money or both. You know, related. And they invested heavily in HR talent and in the process, process management of talent development, there was a greater concentration in talent there maybe than any other place I’ve ever seen. There was a. A commitment to invest in those things. And they had. If you remember Crotonville University, it actually had a management development campus staff full time with people who. And you could literally take somebody on your staff that needed to polish up in a certain area and they made those facilities available for that process improvement company. Wonderful. The Six Sigma process of just sort of the whole DMAIC process. I don’t know that I follow it literally, but some part of my brain works in that fashion, really seeking to understand and to measure, to test and roll out and then control and perfect and take it to the next level. There was an awful lot good there. Jack Welch was iconic. I think it was the kind of company where they would write articles in Fortune magazine and we would read them and laugh and go, if we were half this good, we’d really be rocking. But he was sprinkling pixie dust over the whole thing and really made that whole. A difficult conglomerate, varied set of businesses work. I was on the GE capital side, and that was a big profit engine back in the time I was in the retail credit card division, you know, so we had customers. And the other thing about GE that I think was wonderful and I was able to take advantage of was they pushed the idea of running a P and L all the way down to the client level. So at a very early stage in your career, much earlier than most, you had an opportunity to run a true pl, not just an ascribed one, but, you know, and it was in a matrix sort of format. So I went literally from being the SVP of Marketing in Stanford, Connecticut with a team of maybe 25 people to running Macy’s Credit Services. It was a billion and a half business with 950 associates in Cincinnati. And it was a big step, but it was the seminal big step for me. And of course, someone has to put some money on you in that situation. You’ve never done it before, but they see qualities, whether strategic or leading people or communication that would believe them to have confidence in that movement. And it really worked. Now it was a matrix, right? So finance people were related to finance people and risk managers and so forth for some policies and procedures, some best practices. But in a very real sense, When I was 33, I was running a whole business there with a large frontline workforce of customer service and collections people. And in career dog years, may have gotten 10 years out of that three year experience. And then the Home Depot opportunity, when it came up seemed very, very special because that was more of a being able to work off a blank page. It was really a palette where they were looking to grow and looking to do so many things that would augment the company. And of course I knew them by reputation. So GE was a very big company. Home Depot was a very big company that felt very much like a much smaller company. So one was greater in sophistication, the other was just more about grit and customer focus and culture. So hopefully I pulled a little bit from each one. But as I look back, I was an extremely lucky individual to have those opportunities and experiences.

Darren [00:13:43]:

Well, they were lucky to have you as well. And yes, I can’t even. And you also had American Express. So like the fortune was extensive. So tell us a little bit about American Express. It’s still a dominant company today, but you were at the company at a really important part of its growth and evolution.

Jeff Cohen [00:14:03]:

Yeah, so we were in the year of our Lord 1984. So it was a while back, but it was New York City financial district in the go go 80s, full on barbarians at the gate era. So we shared an office with Shearson. They walk around with big cigars and it was just that kind of vitality and vibrant environment. But they had an excellent program where they would hire you off the MBA campus and you would start in your job day one. But you were also brought together as a cohort where they would give you some additional training with, with that group, with that MBA class where you heard presentations from Jim Robinson and Lou Gerstner, who were leading the company at that time. Both excellent leaders, by the way, in their own right. And Lou Went on from there, obviously to IBM and onward and Kraft and onward from there. So, yeah, it was a marketing machine. I mean, you think about it, they were selling for $55 what the bank cards are giving away for free. But we’re selling exclusivity and affiliation. And they figured out early on that mistakes are inevitable. But how you recover from those mistakes really engender loyalty as much as anything else that you do. And I’ve carried with me that for forever, where people will tolerate a billing error. But if you can step in and say, I own your problem, I understand how you feel, you’re empathetic. Let’s get this figured out and fixed for you. Your blood pressure comes down and then when you execute and follow through on that, the research was clear. Card members that had had an error that was then fixed actually had a higher level of loyalty than ones that never had one in the first place. So in all of my service and I worked in a lot of product and service businesses since, including on the mid cap private equity and in Berkshire Hathaway. And I preach service recovery today for that reason. To say that is the moment of truth. If we can wow the customer right at that point when the chips are down and step in, it will engender discounting, only engenders more discounting. But service recovery engenders loyalty is what I learned from originally at amex.

Darren [00:16:08]:

Such a good point. It’s been my experience as well. Some of the most enduring client relationships come out of how you recover from early stumbles.

Jeff Cohen [00:16:15]:

Right.

Darren [00:16:16]:

So I’m so glad we had the chance to do this because I think everybody points to the Amazons and the Netflixes of today, and for good and understandable reasons, as companies that have really invested in creating distinctive cultures and unique management practices. But there are these generational companies one generation ago that really defined what it was to be excellent. And so you had a masterclass in three of them and a great synthesis over the last 15 minutes.

Jeff Cohen [00:16:47]:

But.

Darren [00:16:47]:

But I wanted to bring us now forward to the. You’re coming towards the end of your Home Depot experience. You’ve got all this experience behind you. You and I met at that time. Take us now from that point on to maybe the remainder of your career to where you are today.

Jeff Cohen [00:17:05]:

Sure. I lived through the transition at Home Depot, where Arthur Blank exited. New CEO came in. The new CEO was from ge, so that was a known quantity. And without delving too much into that story, I was not in the corner office, but I had full line of sight to what the Public company CEO was all about and I wasn’t sure it was for me. I knew I was ready to run a business. I didn’t think I wanted to be at Home Depot or in a public company that former didn’t seem to be was not going to be available to me at any period of time that I could see and I was just ready. It’s just like career wise Darren, those bells go off in your head. It’s just an instinctive thing like it is time to do something new and I wasn’t that acquainted. I had suppliers and so forth that were mid cap companies that were private equity owned and I thought there may be just some gems of opportunity and you need a little humility in that because you’re going to drop a lot of zeros off your P and L when you make that move to a company. My first Berkshire company you would know is Larson Jewellery. Larson Jewel is an Atlanta based company. I lived in Atlanta for 20 years and I’d never heard of them before because it was a B2B brand and so forth. But that’s what I did and that’s in the context of what me on the, on the front end of my 10 years or 10, 11 years running companies. And of course I didn’t do it on an exclusive basis with any investor, more on a deal by deal basis but learned a ton augmenting the corporate side with managing a business for cash including when there wasn’t very much of it being very gritty, playing the eternal game if you don’t mind of who do you trust and who are you aligned with and who you can build with. But those different companies, different shapes, mainly service services and product companies and mainly ones that were not low cost producers, ones for which quality and service were part of the sustainable competitive advantage and angle and brand identity which are the ones that I tended to gravitate toward. I thought those were more natural for me and did take a pass on the Buffalo opportunity. But I knew instinctively that you and I were going to get a chance to work together. And you will remember my introducing you at Larson Jewell when you joined the advisory board there. And I said I got to tell you about this Guy, Law School, McKinsey Private Equity but not a shred of arrogance. That’s how I describe you. But I worked with people that I would trust my kids with and I worked with people that I wouldn’t trust anything with and everything kind of in between. It was just that kind of experience but added a little bit of grittiness A little bit of sort of hardcore company takes a dividend, cash is swept out, you’re on the edge, what are you going to do? I mean literally, sort of. We would never. Somebody was watching the cash at Home Depot, probably Carol. It certainly wasn’t me and I never was concerned we were running out of it. But this was when they get to heaven and they work and they click. It could also be a terrific thing and satisfying in all sorts of ways. But that game was, if I could summarize it, Darren was taking a lot of that corporate learning, applying it, synthesizing it, but applying it but in a dosage that would work in that company. Because you can’t take a GE scaled process. You would crush any mid sized company if you tried to take all of those processes and build them. But there is a lot of teaching and bringing people along for the ride and bringing in continuous improvement is a constant part of what we’re going to do, as well as innovation as well as talent development. So all of my companies today within Berkshire have a talent development process as well as a strategic process that links together. Because that’s never failed me. The key of having great talent and cultivating talent as part of the success quotient. And then so five or six, six companies as CEO in that stint and that.

Darren [00:20:54]:

Can I inject one thing because I don’t want to skip over, at least for me, a very formative moment, which was my first role stepping into a CEO position from private equity investor. And I found myself trying to lead a pretty gnarly turnaround, 3,000 employees in the for profit education space. And I realized this was almost 15 years ago, that I had some innate talents and skills, but I needed somebody that had some real operating experience to partner with me. And so that was the moment I called you and we reconnected, although we had stayed quite connected and had a good almost year long run of, of partnering very closely together on this very difficult, challenging transformation, which I think in retrospect turned out to be quite a successful turnaround. But it’s actually maybe for the first time really truly realizing how much I benefited just given that we’re in this conversation together by how much experience you had, how much I needed it and how important that partnership was. So I just wanted to, I know I’ve thanked you before, but I actually wanted to do it in, in this conversation and thank you for that partnership. It was a really meaningful one to me.

Jeff Cohen [00:22:13]:

Well, if I can add this to it, that role was the first one I took on in Seven years. That was not a CEO role.

Darren [00:22:19]:

I know.

Jeff Cohen [00:22:20]:

And I had another CEO role kind of in the offer that I was doing some diligence on. And I thought, and this, you know, I had to explain this to my wife. It wasn’t entirely clear. She says, you’re going to go into this business, you’re going to commute up to Virginia beach and Darren’s a CEO, not you, so what are you going to do? And I said, I’m not going to miss this opportunity. Opportunity. And maybe there’s a little bit of humility that goes with all that, but it’s that the experiences, it’s an opportunism point. Right. Like when was that ever going to happen again really where we would have the confluence of that. And it mattered not to me if you were reporting to me or I was reporting. It didn’t matter. We said we had a chance to collaborate.

Darren [00:22:55]:

Yeah, agreed.

Jeff Cohen [00:22:55]:

And did a lot of good things. And you know, circumstances were not, you know, sort of long term playing in favor for all sorts of reasons. But we did good stuff and I enjoyed it thoroughly. So it was, for me, it was, I look back, I look back pretty fondly on all that. So up to you want me to bring you up to the. Up to the present 10 years and I’ll do it quickly. I was ready in my mid-50s to take one more good swing at the plate. I wanted one company, but something more enduring than a private equity backed deal. Because I wanted to be able to transform a company where I felt like was bringing something that was really needed to the business, the ability to transform a company that needed to do it. But in doing so, setting the strategy, achieving things, building the team, coming up against yourself with numbers of success and then succeeding above that. And that was going to be my legacy business. I was going to drive that golf cart all the way into the clubhouse at that point. And you know, life is what happens when you’re making other plans, as the song goes. And that’s what happened. But you know, Larson Jewell was the company custom picture frame, very larger fish in a very, very small pond, but a global business and had lost its way a little bit, to be honest, over the years. And it was a mature market company in a sluggish economy, but they were still trying to grow in all sorts of ways outside their core. Some kind of poor diversification bets let their core business slide, including the reputation of service and quality. And that company is the leader in that, in that thing, in an otherwise fairly commoditized industry. And it looked like it had my name all over, was just one that I thought would be terrific to run. But it was a transformation. And I make a distinction between a transformation and a turnaround. Because it wasn’t just like trying to keep it afloat, sell the assets. And we know people who do turnarounds and are very good at it. A transformation to me is it is profitable, but there’s a line of sight to make it a lot more profitable. And there are assets, assets to work with. So you have some combination of a strong brand and selling proposition, a talented team that wants to win. Right. There’s a path and importantly, enough cash, enough fuel to fly the plane if you have to make certain investments to get you to the next level. So I think compared to most of your guests, I traffic very much in unsexy old economy businesses. But in mature markets, the game is set up a little differently. I mean, the epiphany of decision that I think got that company tracking in the proper direction is that we could in fact be a little bit smaller, but a lot more profitable if we focused on our core. If we left a commodity business to the bottom dwellers, if we stopped trying to. It’s like looking for love in all the wrong places. We were trying to expand into wall decor and things that we had no license or acumen to actually do. So we refocused on the core business. We which as it turned out was quite profitable because those are proprietary designs that you’re selling and there’s no price transparency at retail. I mean, it really is a craftsman business. And we went back to the core. In addition, I thought the overhead was fairly bloated. We had an organization that was really fit for a billion dollar company, except we were only 200 million. And a lot of that was built out in anticipation for future growth. So there was a cultural and business model transformation that went on. It took years. Right. So this was not a quick fix sort of thing. Certainly needing to have the right people on the team and you know, the right direction. I’ve set strategy with the team. So they are very much co authors in that it’s not a arcane five year timeframe. It’s really two years of extended business planning. Let’s describe the company that we want to be in two years. What does it look like? Who are we serving? Crucially, how are we winning? How are we differentiating in the market and how are we winning? And then what are the people, process systems metrics that we need? So of course there’s a lot More commitment endemic to including the whole team. But we needed now this was a very tenured group that knew everything about the business, was having a hard time getting out, thinking right to left and sort of getting out of the box that had been built. Then came the pandemic and everything had to go faster. So when I started there were 140 people in our headquarters operation. We got it down to 50 and at 50 it was running better than it was at 140. We were more agile, we had fewer layers, we were making decisions faster. All of that works if you are surrounding yourself now with your A players really that can broaden out and expand and so forth. So we, you know, modestly, I’ll tell you that it was a very good size success, a break even business got to 15% globally and close to 20% in the U.S. berkshire said that probably was not going to be possible, but we covered that. And the other piece of going there was joining Berkshire. I knew of them by reputation and certainly read Warren Buffett’s philosophies about investing. But the reputation turned out to be the reality for CEOs and senior teams which there’s a very long term view which is so unique it’s neither private equity nor, nor is it a public company. When you’re on the 90 day call with the analysts, what they really wanted to know was that their businesses had a plan to be viable and vibrant and successful five to ten years from now. And I had never seen that before. A lot of Autonomy given to CEOs and senior teams that came originally from Warren because he was not an operator and his view was I’m the investor, you guys know how to run your company. So a lot of autonomy and they didn’t tend to flip companies. So you didn’t have that sort of in the back of your head and ran their businesses for profitability and cash. In the end you wanted to deliver a rate of profitability that was accretive and generate excess cash which was shared back with the mothership because that was their fund to make direct investments and public company stock buys as well. And so that’s how the game worked. And it was a fit with my personality. Just love the fact of to be able to be more strategic, to be able to build something over time. And it just worked. I was asked along the way to chair a company called Star Furniture, which is a high end furniture retailer in Houston. Set of circumstances, the CEO was ill, was not be able to come back. So I jumped in there as CEO.

Darren [00:29:17]:

That’s A Berkshire portfolio company as well.

Jeff Cohen [00:29:19]:

Yeah, it is, yeah. And so I split, shifted commuter between Houston and Atlanta. At that point, the Larson Jewel business had gotten to a point of some decent stability. And you’re never done with the transformation. We’ll work on it forever. But I had really good people that knew how to run that business. And one thing just sort of tipped into another. I work very closely with Greg Abel, who will be the incoming CEO this January. But he was overseeing the non insurance portfolio company. So he was my partner. And today I have six companies that I chair. Three as CEO, although really full time with Fruit of the Loom in Bowling Green, Kentucky is really my full time preoccupation. The other two CEO companies, including Larson Jewell, we have strong presidents who run the day to day. And I participate more as a chairman, I would say, with that and the other. So I have a couple of younger presidents and CEOs who I mentor. That’s a good reason to form that combination and partnership. But get involved in strategy setting and capital allocation and helping develop their talent and helping them make key decisions around that. And it’s been a joy. It’s not what I sought and it sort of came to me, but in the end, I love the variety. I love the, you know, on the one hand, they’re very different businesses. On the other hand, about 85% of what makes them tick is pretty common. And so a lot of those experiences traveled pretty well.

Darren [00:30:42]:

Yeah. So there’s a few things I want to. One thing I want to say and then a couple questions to ask you and some threads to pull on. You were kind enough to ask me to join your advisory board, as you mentioned earlier, at Larson Jewel. And not only was it wonderful having a front seat to the story you just told, but as you said, Carol Tomei and Frank Blake were on that board. So the current CEO of UPS and Frank Blake, sort of legendary CEO of Home Depot later in his career. And I think all three of us, if we were on this, in this conversation and if asked honestly, is Jeff gonna pull this off, it was not a clear shot, as much respect and regard we have for you. So I just wanted to also underscore not only the success you had there, but the difficulty of pulling that off. And it was just amazing to watch close at first and then from a little bit of a distance. The two things I wanted to ask you were, one is this point around Berkshire Hathaway and the oftentimes overlooked importance of corporate governance and capital structure. And I just really like, I Just want to double down on that for a moment as the freedom that I imagine that’s given you, gave you in the Larson Jewell business and these businesses to actually be more long term oriented is an enormous, enormous asset. And then the second thing we have to talk about is, because you just skimmed over it, chairman of six companies, CEO of three of them, and that uniqueness, there are very few people that could actually point to that as their day job. And I’d love to just talk about that unique role that you have.

Jeff Cohen [00:32:25]:

Sure. Well, the first piece is just a tried and true Warren Buffett. I mean, truly, the man is the company and the company is the man. And that’s been the philosophy forever. A lot of the portfolio companies, Warren did actually put down the ask price on a napkin and push it across the dinner table and that’s how the deal was done. And they shook hands and his words were typically, I’ll never interfere in your company. I hope to never have to sell it. We’ll never interfere in your company. Go build a moat. Go build sustainable competitive advantage. And he would send them off. I think the new era will be a little bit more performance based. You have an operator at the top. And I don’t think it’s overly intrusive to say we’re going to have a little bit of line of sight as to the performance and recommendations. That advisory board to me was golden, by the way. And I broke a bunch of rules at Larson Jewell because they said, don’t bring in your friends. And I brought in three of my friends because they were three of the smartest people that I knew. So why wouldn’t I do that? But the autonomy is wonderful. But it’s also perilous within Berkshire. If somebody gives you a very long rope and you put it in, fashion it into a noose and stick your head in it, nobody’s really there to pull you out of it, you know, at that time. And that’s, you know, that’s the way that it’s been. When I got there, we owed Berkshire a lot of money and they wanted it back. So there was an immediate need to course correct and do things in the short term that were going to be consistent with a long term strategy. Right. But still additive, but still doing what we needed to do in the short term and achieve in the long term. So hopefully we did that. But as a group, it’s not a group of CEOs that seek notoriety very much. We’re very much sort of behind the scenes. You don’t tend to get trotted out much at the shareholders meeting and that sort of thing. I think it’s for people who really love doing the content of the job and don’t need the creature comforts of other things. But with some of that visibility also comes grinding calls with analysts and months long budget meetings and so forth. So I think it’s really for people that are just wired a little bit more, you know, that way. But it changed. So there’ll be a little, you know, a little bit more oversight, a little bit more, you know, there, there are, I mean, if you conceptually, everything’s a performance improvement situation. Right. We’re humans, we’re fallible. There’s another 10% somewhere. But for companies that are needing an outside perspective, there has to be a way to, to sort of help them along, you know, with the goal of them continuing to operate very autonomously and, and, and so forth. But there are some terrific businesses and some really smart people running them. They just don’t get a lot of visibility.

Darren [00:35:01]:

Yeah. Talk about this role that you’re in today and how do you do that? Because it sounds like a lot, and I know you have a lot of capacity, but describe what that role looks like.

Jeff Cohen [00:35:15]:

Well, it sounds pretty chaotic when you say it out loud. It is mildly chaotic. But I think, well, first of all, if you have great people, you’re halfway to the house of being able to do that really. The role, except for the role of Fruit, because I’m the only operating senior executive, I’m the only general manager there. So I took over for the CEO a couple of years ago. I spend two to two and a half weeks a month in Bowling Green, Kentucky and a lot more time outside of there working on the business as well. And a transformation in its own right of 180-year-old brand, iconic brand. Yeah, Fruit is the Fruit of the Loom brand. Vanity Fair, women’s lingerie brand, Russell Athletic and Spalding. That’s all under the Fruit of the Loom. So just a diversity of businesses within, you know, within the company apparel. And of course, Spalding today is basically a basketball business. So, you know, and that takes 6,14,000 employees. Global Business takes a lot of, to do that. On the other side, it really is an advisory sort of role. We’ve put into place, strategy, processes in each of the companies. So there’s some uniformity and we don’t try and change something that’s been done, but just sort of, you know, making sure that those things are in place. I’ve always been a big believer Darren, if, if, if, you know, if you don’t have a destination, any road will get you there. That’s the. But. But if you don’t have a strategy, your strategy is the sum total of all your tactics. You just point to this and this and this and say, this is what we’re after. But it may not be a compelling roadmap to win long term. So we make sure those are in place. We facilitate. When I say we, it’s me and Tracy. Tracy’s my strategy partner. She was my ea. Here’s a talent story. She was my ea. When I got to Larson Jewell, oh.

Darren [00:37:01]:

A week, I did not know this. Okay.

Jeff Cohen [00:37:03]:

A week later, I realized she had the best strategic headset in the company, including everybody on my leadership team.

Darren [00:37:09]:

Yeah.

Jeff Cohen [00:37:09]:

And today. So she’s, she’s the one person I pulled along with me from Larson Jewel who, who imparts these processes, who takes the team through. But she’s my strategy partner. She’s my marketing strategy person. She knows an awful lot about talent intuitively and talent processes and runs nine box programs with all the companies and so forth. And so there’s a little bit of structure that’s built, but in the best keeping of Berkshire. I don’t want to be overbearing. Just make sure the basic mechanisms are in place. And it’s very incumbent upon me to add value and demonstrate value. You don’t want to be. I’m your chairman from corporate and I’m here to help. You want to be somebody that’s really bringing something to the party. That’ll be attitude. And all the CEOs are not created equal. Some have been in their positions for 15 years, some have been in their positions for a year. Those two people need something a little bit different. So my whole perspective and strategy, I guess, is to do what I’ve always done is find the intersection between what the company needs and what I can bring that will be helpful. But a lot of it does come to making sure that you’ve got the organization structured correctly and the right level of talent to win. It’s still a bit of an underserved strategy goal in a lot of companies. A lot of these businesses that have been owned for many years have basically the same group. There’s a lot of tenure that can be terrific, but risk taking can be a little bit lower and new processes and new procedures, new ways of doing things. So it’s hopefully at its highest level, it’s an inspiring kind of role, but helping with strategy, talent, and yes, making big investments, acquisitions and so forth. I would work with them as well. They didn’t invent any more hours in the day, so somehow you got to squeeze it all in. But I love it. I mean, it gives me. It’s an enormous source of energy in my life and at a nature a lot of people will be thinking about the path to retirement. This could be a really good one, actually. I think I do this at some stage being a day. The CEO positions, as you know, they’re all consuming. Like, you have to be ready to put your whole self into it, whatever that takes. That’s the part that’ll probably augment over the next couple of years where it’ll be more of a chairman role and an advisory role. And that’ll be welcome too, at the time. But we are in the midst of a transformation of Fruit of the Loom, and it has some characteristics that the Larson Jewell Challenge did as well. It’s strategy, people, process, systems, improving the business, focusing on what’s profitable, making some tough decisions about businesses that were not only not accretive, they were unprofitable and genticing them. Today, Fruit of the loom from two years ago, fruit of the loom is about 20% smaller and about 50% more profitable just by focusing the business. So that’s the world that I live in. That’s the mature market, market approach. You have to manufacture profit. There’s no tailwind, you know, pushing it along, but you’re relying upon, you know, and maybe in the. I know you and I are both fans of the stoic philosophy and. And I have to tell you, Darren, when I read that for the first time, it’s the first time I ever read a bit on philosophy where I stood up from where I was sitting. I go, that’s me. That’s that, that’s me. And it’s also the person I would aspire to be up at the, you know, up to the next level. But the idea of, you know, taking the world as it gets presented to you, not fixating on the thing, but channeling your emotions and your thinking and your strategy into what you’re going to do about it, like, how are you going to react to it? I’ve been that. And that’s different than being a stoic person. A stoic person is just emotionless. And, you know, that has a particular connotation. But this was like, don’t listen to what people say. Watch what they do. It will always come out in the actions and everything about wisdom and courage and justice and discipline and all of those tenets just resonated with me off the charts. So I think as much as anything, probably along with servant leadership, I think that forms the philosophical basis of everything I’ve tried to do.

Darren [00:41:09]:

Okay. We’ve talked briefly at moments in time around this, but it wasn’t until just now that I’m realizing how central both these philosophies sound like they are in your leadership. And so I’m curious, is there anything more to say on that? So, look, you’ve servant leadership, I think people understand you just gave a nice description of stoicism. But I want to take maybe one click more on the integration of those two things. And if imagine you’re talking to a new CEO, somebody you know in the CEO for the first time, like, what would, how would you describe the integration of those things and how it shows up for you?

Jeff Cohen [00:41:52]:

Yeah, first of all, there’s, there’s a certain amount of equanimity that I think is, is, is covering in both.

Darren [00:41:58]:

Yeah.

Jeff Cohen [00:41:59]:

And look, there’s a, there’s a point where you have to be, you have to serve your people, but be the calm person in the storm. We certainly had that through during the pandemic in in spades. I realized in the form of situational leadership. I realized that was the time to grab the wheel because that’s what had to happen. It was, how do I. The challenge was how do I minimize the outward noise and distractions, which is just consuming all of our hours? And we were becoming paralyzed. How do I keep those to the outside and focus within for answers and be with them at the table? I mean, in a true servant leadership way, be with them at the table and say, we’re going to work, work on, work on these things together. I think for me, the philosophies too are how do you take them up a level? Integration is one thing, but how do you take, how are you going to role model transparency and integrity and humility up a level? So I’ll give you an example. To most CEOs, if you said describe something and at the time when you were transparent, they may say something like, well, I was in town, town meeting and somebody asked me a question and I gave them the truth and I said it in a very forthright way. Well, without much spin on the ball, well, that’s good and that’s worthy. But to me, there’s this idea of proactive transparency. What should you be telling your people? Not waiting for them to ask, what should you be bringing out to them that will help fulfill their life Give them context, give them the why behind we’re making decisions, letting them know how the company is performing. So that just gives everything, just more meaning to people. So I am a very reluctant video person, but I do videos. I’ve done monthly videos for years in my different companies. And one is just the monthly results. Like, here’s the goal, it’s typically a profitability goal. Here’s how we’re tracking, so you all know, and here’s what we’re doing well, here’s what we’re doing less well, here’s what we’re going to work on, here’s what we’ve decided, and here’s the reason why. Totally good news, bad news. It all just sort of comes across in a global organization that’s particularly useful, right, because it connects people. I understand what it does as far as my personal connection with people and letting people hear that and feel that. But to me, the word is context. If people have context, if you set the strategy, if you tell them the why, and if you tell them how you’re performing, it is easier for people to see how what they do every day connects with how, how the company is being successful and where we need to go. Everybody should be able to. If you have six pillars in your strategy, everybody should be able to connect to at least one and say, I get it. I. I understand. Humility, I think, is a subject that, you know, a lot of executives struggle with a little bit. If I can say that, you know, particularly maybe the male of the species, because we were not. Humility was not something I was taught in the 1980s when I started my, started my career in the corporate world, you know, was. It was. Look, you look it up in the dictionary, it’ll say, you know, without pride or arrogance, something like that. Look at the synonyms for humility and you might get diffidence or being meek or docile. That’s not what. There’s no executive that wants to be that person. I think that’s the struggle. But I think servant leadership unlocked a little bit by saying, you have to be really strong to be humble. It is a strength, but you have to demonstrate it. When was the last time you stood up in front of your employees and said, I’m sorry, I was wrong, I made a mistake. Here’s what I’m going to do to fix it? I’m sorry. I think it’s just not a natural muscle for a lot of people. But putting yourself in that vulnerable spot, carrying yourself with that kind of humility, I think is useful. Also to make the know, make that connection. Integrity is the 100% standard. Right. So that should be, you know. But I’ve come to believe that, you know, the absence of the truth is also a lie. Right. It’s not just I told the truth when I was asked. It’s that if I’m in a negotiation or if I’m in a recruiting situation or something and I don’t tell the whole truth, that does not live up to the 100% standard of integrity either. So I think it’s. I look at these things, I look at how do you take them and push them up to the next level. The piece about the Stoic philosophy is the. I think it’s centered in the wisdom, but also courage because it connotes action, it connotes you’re going to take all this information, but when it comes time to make that hard decision, which is going to be fact based and coalescing to your team and to your strategy, I think that’s it. And there’s also. You treat people all the same. Your title and how much you make is of no importance at all in the Stoic philosophy. But I think it’s the. What I like about them both is that I finally landed on it and it took me 10 minutes. They’re both behavior based. You know it when you see it. Servant leadership is how you behave. It’s not what you say. It’s all about your actions. And that is the sum of it. And I think the Stoic philosophy is the same in that you internalize and synthesize everything, but in the end you look within, you act. And when you act, you act with conviction and courage. Doing transformations is about 10% smarts and 90% conviction in my world. In my experience, it’s the current. You set the path, you align the organization and then you don’t blink. Because the first time you blink and you chase a commodity order that you said you weren’t going to do, or now you’re starting to pull it apart a little bit. So I think having the courage of your convictions probably crosses over both in a meaningful way.

Darren [00:47:38]:

Yeah. There’s two things that are being evoked for me as I listen to you. One is this degree of discipline and self mastery. I think it was Epictetus who said, no man is free who is not master of himself. That’s coming across in just the way you’re being and the way you’re speaking. And I think the all time best leadership book ever written was Marcus Aurelius Meditations. And I imagine you know, I actually had this picture of Marcus Aurelius. You talk about somebody who was dealt a tough hand, you know, and he was like war and suffering and disease, and his ability to self regulate and be. To have equanimity in the moment was extraordinary. So such a really wonderful way to bring your leadership to life and very, very compelling. So thanks for sharing that.

Jeff Cohen [00:48:30]:

Epictetus also said, if some regard you as important, distrust yourself, which sounds so relevant. And he wrote that 2,400 years ago.

Darren [00:48:40]:

Yeah.

Jeff Cohen [00:48:40]:

I mean, just astounding. Astounding that something from that long ago can be so relevant. So, yeah, yeah, yeah, yeah.

Darren [00:48:46]:

We’ve covered so much territory. You’ve had such an illustrious career, and there have been so many threads that maybe we have another conversation at some point that we can pull on more. Before we wrap, anything that’s coming up for you that you’d want to add, whether it’s about your experience, your leadership, how you think about the role of CEO or something that we covered that you wanted to put a finer point on before we wrap?

Jeff Cohen [00:49:13]:

No, I would just close in saying you do reach an age where you start to think a little bit about legacy and. And so forth. And to me, it’s all. All about people. You know, it’s not about notoriety or awards or anything like that. It’s the. It’s the really fine people that you meet along the way. And if you’ve touched them even a little bit and have been touched by them, you know, in a positive way, I mean, that’s what you play for. I love the mentoring aspect of my role, and it is a terrific feeling when you bump into somebody in the airport and 20 years later and they say, hey, you know, I learned a lot from you, and so forth. But no, these kind of. I mean, it’s really what makes it all worthwhile and proud to say you were one of those fine people that I’ve had a chance to interact and learn from, and I think us each to each other. So this was fun, and I would love to come back and do it a little bit more.

Darren [00:50:05]:

Yeah. Well, I think this conversation is evidence of exactly what you just said. The fact that we’ve stayed connected and are in this conversation today. And I consider you a dear friend and mentor. So much gratitude to you, to our friendship, for our friendship, and for you being in this conversation, I’ve had a blast.

Jeff Cohen [00:50:23]:

Thanks, Jeff. Awesome. Appreciate it. Great to see you, Darren.

Darren [00:50:26]:

You too. What a wonderful conversation. What stands out most to me about Jeff isn’t just the scope of his experience, but the philosophy that God guides him. He embodies servant leadership, putting people first, leading with humility and integrity, and pairs it with a stoic mindset that prizes equanimity, discipline, and courage in the face of challenge. I look forward to being with you on the next episode of one of one. And until then, I hope you live and lead with courage, wisdom, and above all, with love.

Listen Here

In this episode of One of One, Darren speaks with Albert Ko, CEO of Auctane. Al began his career at Intuit, where he was shaped by formative mentors and experiences that continue to influence how he leads today. Later, as CEO of Early Warning, he helped scale Zelle into one of the leading peer to peer payment platforms in the world, transforming how millions of people move money. Today, as CEO of Auctane, he leads a global company at the very heart of e-commerce, powering the way goods get shipped and delivered across the globe.

What stands out about Al is not just the scale of what he has accomplished, but the way he’s done it. Shaped by remarkable mentors, he leads with humility, resilience, and a deep sense of responsibility. And at the center of his philosophy is the belief that companies thrive when employees are truly engaged, when people feel connected, inspired, and proud to be part of the mission. This conversation is a rich exploration of leadership, reinvention and the lessons we carry from those who’ve guided us along the way.

Full Transcript

Darren [00:00:01]:

Hi, everyone.

Welcome back to another episode of One of One. I’m your host, Darren Gold, CEO of the Trium Group. My guest today is Al Ko, CEO of Auctane. Al and I have known each other for many years, which makes this a particularly meaningful conversation for me. Al began his career at Intuit, where he was shaped by formative mentors and experiences that continue to influence how he leads today. Later, as CEO of Early Warning, he helped scale Zelle into one of the leading peer to peer payment platforms in the world, transforming how millions of people move money. Today, as CEO of Auctane, he leads a global company at the very heart of E commerce, powering the way goods get shipped and delivered across the globe. What stands out about Al is not just the scale of what he has accomplished, but the way he’s done it. Shaped by remarkable mentors, he leads with humility, resilience, and a deep sense of responsibility. And at the center of his philosophy is the belief that companies thrive when employees are truly engaged, when people feel connected, inspired, and proud to be part of the mission. Our conversation was a rich exploration of leadership, reinvention and the lessons we carry from those who’ve guided us along the way. I learned a lot from Al, and I’m confident you will too.

Darren [00:01:19]:

Al, it’s so great to see you. One of the things I love about this show is I get to speak to people and catch up. And it’s been a. This is an overdue conversation because I don’t think we’ve had a chance to speak since you took over this role over two years ago at Octane. So it may be the place I want to start. But I also just want to mention how good it is to see you because I think we’ve known each other coming up on 30 years, and I’m sure we’ll touch a little bit on that. So maybe I’ll hand it over to you. Where do you want to start? Do you want to start way back when or do you want to start at sort of the last couple of years and work our way backwards?

Albert Ko [00:01:55]:

Well, Darren, thank you for having me on the show. It’s great to see you again. I’d like to think we are both aging pretty well given that we both met each other in our 20s and yeah, we can start wherever you like, but we can start right at the present and then go back in time a little bit, if that works.

Darren [00:02:13]:

Yeah. Let’s start with this company, Octane, which I love the name and maybe you can even comment a little bit. On that because it has a connotation. I think that’s probably intentional and it’s got some pretty storied brands underneath it. So it was a couple years ago you took on this new role. We’ll start there. I want to dig into that a little bit and then we’ll work our way backwards to your incredible career journey and give our listeners a sense of how you got to where you are today. So two and a half years ago or so you joined this company. Take us back to that point. What happened?

Albert Ko [00:02:45]:

Yes. So I got a call from, as these things go, from a friend who heard about an opportunity and had the great fortune. I was at a great company and wasn’t looking. But the more I learned about this new opportunity, both the timing and the opportunity was just right. But a little bit about Octane. It was a public company for many decades as stamps.com and you referenced a couple of the storied brands, but their stamps, their shipstation and in Europe, if you do E Commerce, Metapack and Packlink are four of the many brands that we operate. And, and we are a critical software that enables e commerce sellers large and small to fulfill those orders online. And so we like to describe ourselves as the magic of your online purchase. How does it show up at your doorstep? It’s magic two days later. Well, our software had a big hand in billions of packages, so that’s the best way to describe Oqtane. But we have a series of brands that help people, businesses large and small, be effective online, principally through fulfillment and shipping solutions.

Darren [00:03:57]:

Okay, so everybody’s obviously familiar with Amazon, but there are thousands, tens of thousands, hundreds of thousands of small and medium sized businesses and I guess in some cases large businesses that are fulfilling outside of that system. And I’m understanding Oqtane to be one of the platforms that powers the many, many e commerce providers to get know goods to people’s doors. Is that a fair way of describing it?

Albert Ko [00:04:23]:

That’s correct. Maybe the easiest way to describe the landscape is there are a number of companies, Amazon and Shopify being the biggest, that enable a business, large or small to be able to find customers and set up a store and sell online. Then there are the very famous and impressive shipping companies, UPS, FedEx, DHL, the Postal Service that carry that package. But in between there is software that helps you pull in all those orders, manage the inventory, help you pick and pack the item, and then ultimately get the right item in the right box with the right label to the right carrier so that it shows up at your doorstep. That orchestration, a lot of that magic happens with our software.

Darren [00:05:12]:

Okay, great. That’s really clear. Thanks. And so curious when CEOs come into existing businesses that have kind of an established business model and they’re in established markets, what was the reason for bringing you in? And I think you’re a private equity backed company, Thoma Bravo, if I’m not mistaken. Why did they bring you in and what did you discover in that process? And when you first landed, what would you describe as the vision you had for what you wanted to do under your leadership? And then we’ll get into a little bit about what’s happened under your, under your CEO stewardship.

Albert Ko [00:05:46]:

Yeah. There are a number of storied brands as, as we just referenced that are part of the portfolio. And it was a public company for a long time. And opportunistically, Thoma Bravo, a large private equity firm acquired this company because it saw a lot of growth potential, as these things go. And the, the context was that post Covid reopening. So think about during COVID when we couldn’t go anywhere for a year and a half, E Commerce exploded. Right. Because you’re not going to a physical store. Yeah. And there was a lot of overcapacity built in banking on the continued explosion of E Commerce. And when things normalized and people are going back to stores again, the operating rhythm of the company and how effectively a company was built and scaled, there was a premium on that. And I got recruited, I would say for two reasons. One, I have an extensive background in serving small businesses and I could talk about that over the arc of my career. And our bread and butter customer is a small and mid sized business. And the second reason is a lot of my training and how to operate a company at scale efficiently and effectively. That’s different than when you’re kind of an early stage, go for broke growth mode. And so I would say those are the two reasons why, you know, I was brought in and to me why this opportunity was so interesting.

Darren [00:07:12]:

Yeah. So how have the last couple of years been? What, what did you set out to do? What succeeded? Where have you been challenged?

Albert Ko [00:07:19]:

Yeah. And this is where maybe starting with what might be even the headline for today of, you know, how to build an enduring business. And of course there is no prescription. I’m sure all of your guests, and I’ve heard several of them, they have a completely different story and circumstance. Life and business matters a lot. But this business for many, many years rode the breakneck growth of E Commerce. Where you need the right product, you need to get it in front of the customers. But how efficiently or effectively you operate internally, how clear your strategy is matters less. During a certain window, when you’ve caught the wave and you should just ride that bad boy all the way that it takes you. And then of course, the wave breaks, there will be another wave. But now that’s where sometimes management and strategy comes in. So, you know, again, back to the theme of building an enduring business. I learned this many, many years ago, and I should credit both my employer at the time, Intuit, but also we hired a group, the McChrystal group, which is now a consulting firm, but it was started by Stanley McChrystal, who I think led the joint forces of the coalition in Iraq at a time when we kind of turned the tide on the insurgency many, many years ago. And there were a lot of lessons learned from that. But they introduced a theme and a framework that I still use in business called the alignment triangle. And I think it’s a super important thing. And if you think about it, and there’s variations of it, you have to start with, is your mission clear? Like, why does your company exist? And it’s usually a pretty broad statement. So for us here at Oqtane, we send your business soaring. Of course, underneath that, it’s through E commerce and through fulfillment, but we send your business soaring. And then underpinning that has to be a clear set of company values that you want to operate your business with. You need to have a strategy. Now, typically the mission is enduring. Right? Because it’s why your company exists. That should be a multi decade thing. Although every now and again you look at it and you fine tune it. Your value should be enduring, but your strategy ought to be refreshed. You look at it every year, but probably every three years there’s probably a big shift. And then you have initiatives or priorities, depending on the term you want to use, that are in year initiatives that support the multi year strategy underpinned by the values of the company in service of the mission you want to go to. And there are many variations of this in business, as you probably can teach better than most, but that’s been an enduring framework and we did not have that. And so we set about to pull that together. We did that. And a lot of our operating rhythm is based on that alignment triangle and making sure that we are all on the same page.

Darren [00:10:23]:

Yeah, I often work with CEOs that enter situations like yours and one of the things that they have to do is either fundamentally or at least significantly alter the ways people are working. Like there’s something stuck, things are not moving fast enough. People aren’t taking ownership and accountability. They’re not having direct and honest communication. And in order to fulfill the mission and strategy once it’s defined, there’s something in the culture that needs to shift. Is that something that you encountered? And if so, how did you, how have you dealt with that over the last couple years?

Albert Ko [00:10:58]:

100%. We had a great product. We are, you know, the market leader in the spaces we play. But I would say the company ran more like a startup who caught that initial wave and grew, that grew the hell out of itself by riding that wave. But at some point you kind of have to retool. You’re a lot larger. You have multiple brands, you have multiple offices, multiple geographies. We have businesses all around the world. And now you’ve got to operate with that kind of line of the clarity of mission, the clarity of the strategy, the communication, the operating rhythm of the business. Those were much more rudimentary than they are today. And that was a very big lift. And of course, then do you have the right leaders in place? Do you have the right succession? All of those things that come into play. But you know, I would say for any leader coming into a situation, you just have to assess, first of all, why were you brought in and are you an agent of continuity because the business is doing great and the succession just happened, or are you an agent of change? And if so, if you’re an early stage company, I suspect generally speaking, it’s kind of go for growth, find that product market fit. If you are a more mature company like ours that has a great franchise, enormous margins, and you’re trying to just execute better to drive more growth and even better margins, those are different mandates and understanding what they are then begets the set of activities. But you know, I’ve been now through a couple of cycles where I’ve had the great benefit of inheriting a good business and then trying to make it better.

Darren [00:12:34]:

Yeah, so you’re, you were definitely an agent of change is what I’m hearing. And I’m wondering how difficult it’s been. You know, where did you succeed? Where have things been challenging? And maybe if you could just bring to life, like, what would people say working at a company with Al as CEO is like, like what is the, what’s the felt sense of your leadership? And what I’m trying to bring to life is your distinct philosophy around how to build an enduring business.

Albert Ko [00:13:02]:

Yes. I like to believe that a company that I’m a part of, whether I’m the leader of or just in the mix, is one of incredible collaboration and high employee engagement. And I would start there. Of course, the mission and the strategy matter, but at the end of the day, I think it’s really important. Work is such a big part of our lives. I want to be working with friends. I want work to be fun. I want to recognize one another and that’s how you build an enduring business. As opposed to there are all kinds of short term levers you can play to try to goose the numbers or to, to drive short term outcomes. And, you know, I’ve always, and hopefully my background demonstrates this. I’m not one to bounce around different companies looking for the next thing I’m here to sink my roots in and build something great. And so, you know, a couple of thoughts I have on this. First of all, I’ve had incredible mentors in my career at every step. And I have to say, it is as much luck as it is skill that I had people who were great role models and who invested in me. And there are four that I can think of if we had the time to talk about those. And I can even call them out by name, but each of which or each of whom taught me something different.

Darren [00:14:28]:

Yeah, I’d love to hear it.

Albert Ko [00:14:30]:

So early in my career I had a leader, a mentor and a boss named Alex Lintner. He’s now a very senior leader at Experian, but I worked with him both at BCG and at Intuit. I could go on and on, but I’ll say he was first a master storyteller, so he could just paint a picture. And it was just music just to listen to say, wow, I want to do that, I want to be a part of that. And there’s a skill to it. And he invested the time to demonstrate what those things are like. But perhaps more importantly, he recognized others. And so even when I was unproven, he would talk me up in a way that opened doors and gave opportunities that really early in my career allowed me to succeed. And I’ve never forgotten that. And so again, back to your original question of what’s it like to work at a company that I was a part of. I like to think that we have a culture where we recognize one another and doesn’t matter where you are in the hierarchy. And we open doors to people in whom we see potential, even if they haven’t proven it yet, because everyone needs a chance. And I really learned that from Alex and he’s still my friend. And what an amazing lesson.

Darren [00:15:55]:

Well, hopefully he’s listening today. I imagine you’ve returned the favor to many. And maybe we’ll get into your own mentorship at some point. But just while we’re on this point of recognition, is there anything distinctive, unique that you do as a CEO in your company around that kind of a signature practice or something that would be unusual?

Albert Ko [00:16:16]:

Yeah, we have a multi layered approach to this and a lot of this is new. But one is we have an all star program where continuously we are seeking stories of employees going above and beyond to be able to gather those. And I read every single one of them, by the way. It’s a great way to end a day, even if it was a hard day to just read those stories, to say, wow, there is a lot of good happening. There’s a lot of people going above and beyond, whether it’s for customers or whether it’s for our fellow employees. That’s an amazing thing. And then on a quarterly basis, we recognize those who little bit of a subjective process, but those who have both the most comments, but also the most impressive outcomes and do that in a very, very public way to be able to just give recognition where it’s due. I would say that’s the fun program. The more formal program is one where we have built in succession planning where we try to identify not just who’s ready now to take Darren Gold’s job when he is ready to move on, but who in the organization has the potential and how do we, what do they need to develop to fully develop that potential, to not just take the next step, but to take the next several steps. And I think just having that dialogue creates an environment where recognition happens versus where you’re not as quite as deliberate about putting those things in place.

Darren [00:17:50]:

Yeah, great. Well, you mentioned there were three other kind of key mentors and some lessons learned. You want to get back to those?

Albert Ko [00:17:57]:

Sure. The next one I’ll call out is the current CEO of Intuit, Sasanga Darzee. He was actually my boss twice. Once, many, many moons ago. And then later when he became the CEO, I became a direct report. But I’ll share one story from early in my career, and to give you a little context, I just started managing people from being an individual contributor. And I was also relatively new to being a product manager, having started my career as you know, Darren. And we’ll talk about our shared history way back in the day in strategy. And so I had a lot to learn And I’ve always believed, you know, one just the hard work and do the work of 10 people and you’ll be valuable in the organization. And I’d been working for him for some bit of time and I generally received positive reviews and so I felt pretty good about myself. And one day during mid year review season, he took me out to a fancy restaurant off campus. And that was a little unusual. And I expected him to give heap extra praise on me, having picked quite a fancy restaurant, I can name it later. And instead of heaping praise, he was very serious when he suggested maybe I should move on from the company. Because what he observed is I had not made the proper transition from being an individual contributor to a manager of people. And almost verbatim his quote was, I get more value from you making everyone in our business unit. There were about 650 people in the business unit at the time, 20% better than you doing the work of 10 people. And it’s just math. And I see you doing more of the individual heavy lifting and showing up early and going to work late and being hyper productive. And everyone likes you, but you’re not making everyone else better. And unless you can make that transition, there are careers where individual leadership and capability are highly prized. You should pursue those. But in a large corporate environment, as a people leader, that is not it, or that is not enough. And it was a. By the way, I’m putting a more positive spin on what was a pretty tough message. But I credit him for the first time ever, really making me not just evaluate myself as a manager, but even evaluate my career choices. Because I’ve long said if you want to have a successful career, there need to be kind of three circles in the Venn diagram come together and you need to sit in the center and. And one is you got to do something you love. And the second is you got to do something you’re good at. Because there’s a lot of things I love, like singing, that I’m not very good at. So if I tried to make a living off of that, and then the third is that the company needs you to do right and it’s tough to find that match. And some of it’s a choice and some of it is of course your own personality and your likes and dislikes. But I think that conversation I had with Sasan really for the first time, you know, before then I was just looking for a great job and trying to do a great job, but I didn’t have a great sense of what I wanted to be. But that was a bit of the fork in the road. Do I want to be a larger organization leader, or do I want to be a killer individual contributor in a smaller place where that is valued? I’ve always wanted to have huge impact, and so that wasn’t the question, but that was a fork in the road. And after a few weeks of really asking myself that, I tried to take some steps. And the great news is my boss invested in me to say, well, then let me explicitly teach you and point out things that are going to help you along that journey. And I like to think it was pretty successful, although, of course, we’re all still learning along the way.

Darren [00:22:06]:

Yeah, I love these crucible moments that define people’s careers. And you had this gift of somebody that could deliver something very direct and that you needed to hear and then invest behind you. Has that translated into what you do for others? Has that become part of your leadership, or how has that impacted you?

Albert Ko [00:22:24]:

I try, and I certainly feel that across most of my career, those who work at the companies I’ve been a part of work in the group that I’m a part of. Hopefully, they get the mentorship and the engagement. But more importantly, look, everyone seeks both the recognition and then sometimes with that recognition comes the opportunities. They get that in a outsized dose because we’re very conscious of that and because we know that that is the role of the manager. And one of my favorite books, it’s a bestselling book. It’s by Liz Weissman, who I consider both business guru and a mentor. You know, the Multipliers book. I’m sure you’re very familiar with it. It delves into that concept really well, where your job as a leader is to be a multiplier of others versus the brilliant person who has all the ideas, who works harder than everyone else, but who can have the impact of diminishing the broader team. That’s something I try to remind myself of every day.

Darren [00:23:24]:

Okay, so we’ve got two big themes emerging. One is around recognition, the other around this sort of multiplier. And I would also say maybe a third in this idea of just strong, direct mentorship that can really, really serve people. So let’s talk about the last couple people, and then we’ll start to work our way backwards a little bit from there.

Albert Ko [00:23:46]:

Yeah, go back in our time machine. Well, the third, and there’s so many people here, but the third that I thought of as I was preparing for this podcast is a woman named Cece Morkin, who is a great leader and is now a board member of a lot of great companies. But she embodies intense lifelong learning and curiosity. And I love literature and I love history. And you know, one of my favorite books is the dramatic German poem by Goethe, you know, faust. And there’s a quote in there that I always love, which Faust in this poem says, he only earns his freedom and existence, who daily conquers them anew. Right and freedom and opportunity are won through consistent effort and lifelong learning. And what a universal concept. And you could say, well, of course that’s true. But how many people are constantly learning and reinventing? And my story of cc, who was both my boss and again all of these people I consider my friend. She was always a better leader than me, but we were for a hot second peers. When she led sales and marketing and I led product for a division and particularly in a role as a salesperson in an enterprise sales company, she beat up product. A lot of, you know, product had to deliver more for her to sell more. And while we had a cordial relationship, it was definitely one sided and I felt a lot of pressure. And when she was promoted to be the division president, I was like, oh my goodness, now she was my boss. We’re going to get a heavy sales and marketing bent. Not that that’s bad, but that just means a heavier lift for everyone on the product and engineering side. And wouldn’t you know it, her first order of business as the new president with all the new responsibilities was to deeply immerse herself in the practice of product management and the whole kind of engineering life cycle. To have deeper empathy into both what the challenges were in just building something that sales team wanted, but more importantly to try to be a better mentor. And I was astounded at the complete shift within a couple of months from being the sales and marketing leader to being the general manager, effectively the CEO of this division. And again back to this quote of in this case, she only earns her freedom and existence, who daily conquers them anew. There are new challenges every day and she just took on a whole new set and just figured it out. And I think that’s so powerful. And that’s why some people ask me, I’ve gone from accounting to payments to now E commerce. And while there are some common threads, they’re very different industries. And to me the subject matter doesn’t matter as much as just there are common principles that can be applied throughout. And then of course just this intense learning and focus.

Darren [00:27:07]:

Yeah, and that word intense. As I’ve known you as probably an apt in the best possible way. I think you bring a level of intensity and energy and passion to everything you do. And so I’m sort of seeing the thread of that in this kind of early lesson too.

Albert Ko [00:27:23]:

Well, I appreciate you saying that. I feel the same about you. And I’m going to go into some basketball stories down the road where nobody out competed Darren Gold. But again, you learn those life lessons all over the place. And it’s actually something that even though you and I have not shared a court together in 30 years, that I will not forget. Just the going for it. Right. And I don’t want to say you and I or neither of us were the most talented on the court, but let me just say I felt you probably have a different opinion that we had similar talent, but you had more intensity. And so it was a thing to see. And again, I try to apply these lessons with everyone that I encounter and you’re certainly on that list too.

Darren [00:28:06]:

Oh, that’s great to hear. It brings back good memories. So you had a fourth person before we go back to that.

Albert Ko [00:28:13]:

Yeah, the fourth person, and probably the person that had the biggest impact on my career is Brad Smith, the former CEO of Intuit and the current president of Marshall University. And I will say this, the amazing thing about Brad, I bet 10,000 people would list Brad as their greatest career mentor.

Darren [00:28:35]:

Wow.

Albert Ko [00:28:36]:

Unbelievable. I might make the list of one or two people, maybe not even that. Right. And this guy, he is in the hall of Fame. First ballot, hall of Fame of Leaders. There are so many lessons here, but I will just share one quote of his. He said, it’s not about me, it’s about we. So the broad term servant leadership, the fact that, you know, he always taught that life is a team sport and that serving others was always the brand that he wanted to build for himself. And that successful individuals play for a cause greater than themselves. And certainly in a company context, it’s true. But just as a US citizen, I feel that way about the community I live in, the state that I live in, and of course the country. And it’s not about individual achievement, it’s about collective outcomes. And he lived it every day. And in fact, all the principles we talked about thus far kind of wrapped into one human being. This was probably the guy. But. But the quote that stands out is that it’s not about me, it’s about we. And again, it goes back to, hey, what do you want to be known for al in your companies? And it’s a place of high engagement where we had common purpose, we had fun together and we drove really great outcomes because we were able to delight customers.

Darren [00:30:06]:

Yeah, I think that’s maybe the meta takeaway here is the distinctive, powerful and very clear philosophy of a, of a CEO. It’s why I asked the question I did of you up front and I think how you answered it makes sense in light of these kind of life and career experiences. And I imagine if I were to speak to people, I’d get something similar back to them if I asked the question of what is it like to work at Octane with Al at the helm. So let’s go back now because you’ve had this story career, you’ve referenced a lot about Intuit. You had a more recent stint at Early Warning and for those of you that don’t know, Early Warning obviously is the, or not obviously, but is the company that runs the Zelle Payments network. And you were there at a really interesting kind of inflection point. Talk a little bit about that experience. We’ll then go back to Intuit and then maybe we revisit a little bit about our early days and when we first got to know each other.

Albert Ko [00:31:06]:

Sure. We’ll go back kind of five, 10 years at a time from the present, which we’ve been talking about, to about five years ago. So later in my Intuit career, I started to get some calls for CEO opportunities. And I’ll be honest with you, I never aspired to be the CEO, but I was always open to it, obviously when I got to a certain stage and when this opportunity came up again through somebody I knew and they were looking for a product centric leader and I’d been a product manager for the bulk of my career and I had pretty good background in payments and financial technology and even banking. It just was a great fit. And when I joined, and this is in 2019, I believe I’m not the inventor of Zelle. Zelle had just launched, but it was brand new. There were, I believe, 18 banks on it at the time. There were a few million users and it was many, many, many years behind some peer to peer competitors like Venmo and Cash App to name too, and of course PayPal itself. And there was good initial traction, but maybe it wasn’t scaling quite as much as the banks who actually own Early Warning would like. And so they looked for new leadership and I was picked and it was a super exciting opportunity. And I’ll share with you a quick story here. It was again I mentioned it wasn’t growing as rapidly as we wanted to and we looked at the data and of course in a lot of businesses and certainly a peer to peer network, the more payers you have and the more receivers you have, the more frictionless it is. And Zelle at the time had a problem where if I’m on Zelle and you’re not Darren and I send you a Zelle and how do you collect the money and vice versa. So that’s one problem. Number two, it was conceived of as a peer to peer competitor to the Venmos and the cash apps of the world, which had been in market five, six, seven years ahead of Zelle. And so you know, how do you catch up, how do you create that network, that two sided network and then how do you catch up? Maybe not by being the same because of some of the constraints of being inside of the bank app, although there’s advantages too. We couldn’t have the social element and even the user experience had a little bit more friction. And that was just by design and it was built in and it was what it was. And so you kind of have to look at the ball, where it lies and say where do we go from here when you want to grow it? So couple of things. Number one, look at the data. And one insight was the average Zelle transaction was 4x larger than the average Venmo transaction. Again, this is dated info, although I bet the trends are largely similar. It was $80 a pop versus $20 a pop on average. And of course there were way more Venmo transactions at the time. And so it’s like $80 isn’t exactly like two college kids like splitting pizza and beer, right? It’s a bigger transaction. And wouldn’t you know, it turns out even though it wasn’t designed for this and it was connected only to consumer accounts, a lot of businesses were using it. But business owners to their personal account because they like the instant settlement element. Like if I zelle you money, it is in your account within seconds, you know, versus a lot of other peer to peer. It kind of hangs out there for a couple of days or there’s a fee if you want it quickly. So it’s like aha. There’s a huge insight there. One, the transactions are bigger and number two, businesses are using it. So we embarked on a journey to enable business accounts to take Zelle and number two, to increase the limits. And in any payments business there’s always a battle between higher limits, which reduces friction, and then fighting fraud which suggests lower limits. But hey, we think we can reliably Increase limits. Maybe not the first transaction, but by the time Darren and Al have an established relationship, that’s a pretty safe corridor. And those changes alone enabling business accounts and increasing limits created a huge tailwind that dramatically increased the growth rate. So that’s one big insight.

Darren [00:35:32]:

Yeah.

Albert Ko [00:35:32]:

The second one, and I would call this less insight but more acknowledgment of in many businesses that are network effects, businesses where you need a two sided network, you’ve gotta go for broke to try to build both sides. And so instead of just focusing on enabling larger banks to offer Zelle, we embarked on a very ambitious program to turn on thousands of community banks and credit unions as well. They have lower number of accounts, but it just eliminates the friction of if I want to send Darren the money, can he accept it? Because the answer is yes. Because even if you haven’t set it up yet, you’ll get an alert and you take tap a couple of clicks and you can be up and running. And the combination of those insights and changes led to dramatic growth where by the time I left four years later, it was already by a factor of two, the largest peer to peer network by dollars spent. And I think today it’s 3 or 4x as large as any competitor, again by dollars spent. I don’t know the transactions numbers anymore because I’ve been removed from the business. But it was quite an exciting growth story.

Darren [00:36:47]:

Yeah, it’s an incredible story. And I had a small window into that first year of your leadership and I just wanted to sort of double down on. By no means was it clear that you were gonna be successful. You had a really challenging problem and big opportunity ahead of you to build a two sided network, particularly given the competitive dynamics. The other thing that’s worth mentioning is there’s a kind of a DNA in that culture of compliance and fraud prevention that is a little antithetical to innovation moving fast. And I think one of the things you did wonderfully was to not sacrifice those things but build on top of it a company that was much more modern, much more innovative, scrappier. And that was also not clear that that was going to be successful. So I think I just wanted to add that point to what sounds like it was a really important journey for you.

Albert Ko [00:37:45]:

It was. I appreciate you calling that out. And of course back to the golf analogy of hitting the ball where it lies. The reality is Early Warning will never be a startup with kind of a risk taking culture because it has the benefit of being inside the financial system and owned by the big banks. On the other hand, you shouldn’t just accept that there is no way to drive change or change culture or move faster and striking that right balance. It’s always a work in progress and it’s like tending to a garden. You look away for two, two days and there’s weeds all over the place. So it’s just a, it’s a, it’s a constant care and feeding effort. But it is possible and I think we showed it.

Darren [00:38:29]:

Yeah. I wonder if you were to draw one lesson from that experience and just one. I’m wondering if it’s not that point, which is oftentimes people fall into the trap of kind of black or white either, or we either go for broke or we don’t. And what I’m hearing you say is no, this is a lot more complex and nuanced and it involves balance, it involves trade offs, it involves really being attuned and dealing with what you have as well as expanding into something that you’re not. Is that a takeaway for you or is there another one that you would cite as like, this is my one key learning from that experience?

Albert Ko [00:39:07]:

It’s a huge takeaway. Thanks for that insight, Darren. Again, you are unique at seeing and hearing things, but I mentioned earlier the alignment triangle and being clear on the mission and the strategy and the priorities and the values. But I will say it’s important to have those on paper, but it’s important to be flexible and have the nuance. Nothing in business or in life is black and white. That’s why I’m politically immoderate. That’s why I believe in diverse teams with different viewpoints. Because you can have a plan on a page, you can have the top three priorities laid out, but the reality is there’s always a fourth thing you need to keep in mind. Or there might be a set of rules, but you’re also trying to work within those rules to try to change something. That nuance is important. And I will say as a fellow law student, law school graduate, and I have a humanities background, I was a history major as an undergrad. I want to say there are not enough humanities leaders in technology specifically, but I would say business overall. And I think actually society is moving toward more specialization and also more they want the math person or the CS person or the econ person, which is all fine. And maybe not the English major, the history major, the poli sci major. And I think that’s a mistake. Of course it’s a balance. But one thing that I learned from my humanities studies and you know this as a, as a history major Too is history 101 is memorizing names and dates. But real advanced history is taking a set of data, primary sources and figuring out what happened. And to me, the greatest training for me being a product manager was actually being a true historian, which is you take inputs from how are people using the product, what does the data say? But there’s a lot of qualitative too. You observe customers in action doing that which your, your software is designed to enhance. And then you have to make sense of what does this mean and what should I do next? And to me, the lost art of feeling, empathy, nuance, dealing with the gray is something that the humanities teaches through the lessons of history and philosophy and literature that I think is underrepresented today. And I think especially in a world of AI where maybe the machine can do more and more, what is the value add that the human brings and particularly the leader brings is that judgment and that nuance that I am sure grateful for having that background. And I still constantly try to read literature and history and fiction so that I have a sense of the world and my small place in this very complex organism that then almost always translates into as I have a judgment call to make it work. And it often involves people.

Darren [00:42:24]:

Yeah.

Albert Ko [00:42:25]:

And people are very unpredictable. What should I do? And I don’t get it right all the time, but it certainly is not a math problem.

Darren [00:42:32]:

I love that we have probably a whole show to do on that. So I’m going to segue off of history and take us back in time a little bit to your days at Intuit and just, you know, that’s a long experience with multiple roles. But summarize that experience. What did you do there and what were the. You’ve talked about some of the mentorship lessons, but how did it inform your leadership?

Albert Ko [00:42:54]:

Yes, I’ll say it informed my leadership in three ways. The first is that it’s an incredibly employee centric company. So this is dated info, but back when I was at Intuit, we had a ex LinkedIn employee who joined Intuit and they had done some studies at LinkedIn that looked at the rate of boomeranging back to a company. So you’re at a company, you leave at what rate do employees go back? And that person shared that Intuit was the highest. Again, this is back in the day. I haven’t validated the data, so don’t fact check me on it right now, Darren. And things do change. But I think it spoke a lot to people for a Lot of reasons you change jobs, but a lot of people come back. Cause it’s a great place to work. And you still see a lot of people with 10, 20, 30 years of tenure. The company is now over 40 years. And I credit a lot of leaders, starting with the founder Scott Cook, and then the many leaders that have guided the company for just establishing a great culture. And of course it’s more fun when you’re winning. And Intuit has won a lot more than it’s lost over the years. But it still starts with a employee centric culture. And I’m not just talking about creature comforts and benefits. I’m talking about investing in people and their careers and what they learn in a really outsized way that says, hey, you know, five years here is worth 20 years somewhere else. Because it’s not just learned by doing, they’re investing in my education. Managers are comped on how good a manager they are. That’s an important, important lesson number one. And again, I’ll credit the founder for getting all of that going. Number two. And again, maybe this is where Scott Cook, the founder, shines. Customer centricity. Every company will say they’re customer centric. This company is obsessed with it. So there’s a term called follow me home. Sounds kind of creepy, but where you, you don’t just ask a customer what they want. You don’t even just observe the customer using their software. You actually go to their place of business and watch them do work even outside of their software, so that you have a visceral sense of this is the day in the life. These are the inefficiencies, these are the challenges, these are the stresses, and these are the joys. And then of course, your software is a piece of, of the solution, but you get that whole context and through that new breakthroughs come about. And just being very maniacal about not only observing the customer and being close to them, but of course then holding yourself to a very, very high bar of did you deliver on that customer benefit that you observed? Can you measure it? Which is not always easy. So then being very, very maniacal about that and investing in that, and then rinse and repeat, especially as technology cycles evolve. And then the final lesson, and I referenced that in some of my early discussion about even Zelle, is to create an enduring business. It sure is hard to do off the sweat of your brow, just working harder and being more clever than the next person. That is not easy. And of course, as you grow, prices go up, margins go up, and it just opens the Door for low end disruptors with, and especially with each new technology cycle, there’s a bunch. And that’s the beauty of the world of competition we live in. And so part of the way you mitigate that is how do you build a network effects business where now you have competitive moats where it’s just harder for someone with a slicker UI and a lower price to come in and just try to take share. And I’ve got countless examples from Intuit where being very deliberate about that allowed the company to build enduring businesses that sometimes you may not be first, but you just have the breathing room because you’ve got that competitive moat to be able to then adapt and make it better. And that’s how you build a 40 year business that’s doing better than ever. And again, a lot of the credit for all three of those things go to Scott Cook.

Darren [00:47:16]:

Yeah, that’s the last point in particular is one that most CEOs don’t, I believe, fully appreciate. And we had Hamilton Helmer, the Seven Powers author on the show talking about strategic power. And you could call that competitive moats. But I see you having had experiences and really internalizing that, that. So just in the interest of time, I want to just maybe go back to maybe the beginning of your career. You mentioned BCG, but we met at McKinsey. Take us back to whatever it was. 1998 is probably my best guess.

Albert Ko [00:47:51]:

On the right date, 1998. And I was a history major.

Darren [00:47:55]:

Yeah.

Albert Ko [00:47:56]:

And this was my first job. It was in Los Angeles I met you and so many great, talented people. And probably like a lot of people who show up there, little bit of imposter syndrome. And like, what am I doing here? And I was on a finance heavy case. I’d never cracked Excel before. I had to literally learn how to add two cells together.

Darren [00:48:18]:

Well, there’s the learner in you, right?

Albert Ko [00:48:20]:

Yeah. Well. And by the way, a admittedly frustrated but incredibly patient engagement manager who invested the time to teach me. And of course I’m capable of learning like most people, but you gotta give me a little time and you gotta give me a little help and then I can fill in the rest. Yeah, it was one of the best places to learn. But I will say, Darren, just to go back to, some of my fondest memories are recall on Saturday mornings we’d play basketball at Palisades High School. I actually don’t know what happened to that high school since the fires. But we’d go and on a Saturday morning we’d play for a couple of hours. And then at least some of us would then just go right down the hill and go to the beach. And it’s an awesome Saturday. What a great way to start.

Darren [00:49:09]:

Incredible.

Albert Ko [00:49:10]:

But I just remember there. There were all different skill levels. There were definitely some really great players, and you were definitely better than me. But what you saw were different personalities and grit and just commitment to trying to win. That’s one thing I love about sports, and especially competitive sports. Someone wins and someone loses, and of course you want to be a good sport. And as I’ve gotten older, I realize I’m okay losing. I’m just trying to burn a few calories. But so many life lessons there and so many friendships forged out of that competition and collaboration. Right? And I’ve always thought highly of you then, not just because you went to law school, but just because of the competitive fire where you were usually on the winning team. Because any team Darren Gold’s a part of, you know, they’re gonna have someone who’s gonna get every loose ball and rebound and defend like hell and then be at the front of every fast break. I don’t know if you still play basketball, Darren, but I remember it very vividly.

Darren [00:50:11]:

I did for a while. I’m onto something else now. But, you know, there’s. You know, there you go. There’s the recognition, strength. So you’re recognizing in me something, and it’s making me blush and bringing back great memories is this great quote that says, sports don’t just build character, they reveal character. And I remember thinking the same thing about you. Sort of a kindred spirit. And it’s been so fun to watch that level of intensity and energy and passion and willingness to practice and get better and give all of yourself to something in these various organizations that I know you were obviously blessed to be part of, but I’m sure they feel very blessed to have had you in various roles. And now, you know, in the last. Your current company, in the last company, in the role of CEO, which is such an important role, we have covered a ton of ground. I think one of the things I’ve loved about this conversation is there are, like, multiple threads that I wanted to pull on. I don’t think I’ve yet said this to any guests, not because it’s not true, but it’s just feeling like I can definitely see us getting back together at some point and pulling on a few more threads and having another conversation, But I wanted to just create some space for you. Anything that we haven’t covered that you’d love to mention that reveals a little bit more about you, is important for you to mention or we have covered, but you want to put a finer point on before we wrap.

Albert Ko [00:51:37]:

Absolutely. Darren, first of all, it’s been a pleasure talking to you and we should break bread one of these days very soon for sure. One thing that I am always filled with and reminded of is a great sense of gratitude. We all have our life journeys and I believe that perhaps with the exception of a major health issue, we all have an equal number of stresses and challenges. They’re just different, Right? And all of us are on that journey. But whenever I’m having a hard day or a difficult decision I have to make, I try to ground myself in the fact that I feel very fortunate to have the opportunities I have to live in this country with the freedoms we enjoy as well as the bounty of opportunity. And I’m grateful to those who came before me and I reference the founder of Intuit or my old bosses who helped pave the way for me to enjoy the opportunities that I have today. But I can’t help going back to my parents. So I am an immigrant to this country. We are Korean and my parents left Korea and moved to Iran, of all places, to seek a better life. Because back in the 70s, Iran had a far higher standard of living than South Korea. And the idea was to live there for five years to save money and then to go back home and get started in a middle class life in Korea. Well, the Ayatollah Khomeini had other ideas. And when he returned to Iran from exile in 1979, it was year three of our family’s journey in Iran. And needless to say, it was not a great place for foreigners to be. And through the great grace of friends and even the man upstairs, instead of returning back to Korea penniless, my parents had American friends who said, hey, we’ll sponsor you to come to the States. If you’re going to start from zero, what better place than the US of A? And so I’m an accidental American. Both because of the Islamic revolution and these American friends have said, hey, come live with us in Los Angeles. Which is how I grew up in la. And so I showed up right before I started kindergarten. At the time, I spoke Korean and Farsi, didn’t speak a lick of English, and I went to public school in la. And because I didn’t speak English, they put me in English as a second language class. It was me and 30 Mexicans. And that was my start to the USA and my mom worked the night shift at the post office for 32 years. She also answered phones for my dad during the day and was mom making our lunches, doing pickups so she literally got no sleep my whole childhood. And then my dad was a small business owner, not that successful, to be honest, but just kind of scratching and clawing, as is often the case with a first gen, so that my sister and I could have the educational opportunities to then avail ourselves to the bounty that is the American dream. And it’s shaped my life. And I look at the journey and I even look at my grandparents who had an even harder than my parents did, faced starvation, war, and I’m like, if I’m having a bad day, come on now, let’s keep that in perspective. And so, you know, maybe the word I’d conclude with is gratitude. And I think if we can ground ourselves in that we have good days and we have bad days when we have life’s challenges, but we can pursue them with an optimism and the recognition that we’ve come a long way as a family, as a society. And I think if everyone approached each day that way and we tried to build organizations that recognize that we’d all be a little bit better off, especially in these very contentious times.

Darren [00:55:38]:

What an extraordinary way to end this conversation. Immense gratitude to you, Al, for our friendship, for being in this conversation, and for all you’re doing to build an enduring company. Thank you again for being on. It’s been. It’s been wonderful.

Albert Ko [00:55:55]:

Thank you, Darren. It’s a pleasure.

Albert Ko [00:56:03]:

What a remarkable conversation. Among the many things I took away from this conversation with Al is just how central engagement is to his philosophy of leadership. For him, the true measure of a leader is found in the degree to which people feel connected, energized, and proud.

Darren [00:56:18]:

To be part of the company.

Albert Ko [00:56:20]:

And what makes that philosophy so powerful is the way it’s rooted in mentorship and the lessons he absorbed from those who came before him and the responsibility he feels to carry those lessons forward. I look forward to being with you on the next episode of One of One. Until then, I hope you live with courage, wisdom, and above all, with love.

One of One is produced by Darren Gold, Emily Shaw, Talia Deer, and Karen Welsh. Engineering by Aja Simpson.

Listen Here

In this episode of One of One, Darren speaks with  Scott Harrison, founder and CEO of charity: water. Raised in a deeply religious household, Scott left home at 18 to spend a decade as a successful nightclub promoter in Manhattan, only to wake up one day and realize his life was empty. That reckoning launched him on a journey from the excesses of Manhattan nightlife, to spending two years in the poorest country in the world, to eventually founding charity: water. Scott not only set out to solve one of the largest global health problems - the lack of clean drinking water - but to reimagine the model of philanthropy itself.

They discuss the moment that sparked Scott’s transformation, his bold vision for providing clean drinking water to everyone on the planet by the end of his life, and his extraordinary ability to sustain energy and conviction over two decades.

Full Transcript

Darren [00:00:01]:

Hi and welcome back to another episode of one of one. I'm your host, Darren Gold, CEO of the Trium Group. My guest today is Scott Harrison, founder and CEO of water. Scott's life is a case study in transformation. Raised in a deeply religious household, he left home at 18 to spend a decade as a successful high end nightclub promoter in Manhattan, only to wake up one day and realize his life was empty. That reckoning launched him on a journey of service that would take him from the excesses of Manhattan nightlife, to spending two years in the poorest country in the world, and eventually to founding water. Scott not only set out to solve one of the largest global health problems, the lack of clean drinking water, but to reimagine the model of philanthropy itself. In our conversation, we talk about the moment that sparked his transformation. His bold vision for providing clean drinking water to everyone on the planet by the end of his life, and his extraordinary ability to sustain energy and conviction over two decades living a life of service to those of greatest need. This episode left me deeply inspired and grateful. I trust it will do the same for you. Please enjoy this wonderful conversation with Scott Harrison.

Hey, Scott, it's really great to see you. We spoke last week and I've been really excited about this conversation we're about to have. Thanks so much for being on the show.

Scott Harrison [00:01:27]:

Of course. I am too. This is gonna be fun.

Darren [00:01:28]:

Yeah, yeah. There's so many places to begin because you have such an interesting story and I thought we'd start there, which is your story, which you've shared with me, but I'd love for others to hear. And so if you could take us back to your life journey and the moment of inspiration that led to this extraordinary organization that you found at water, I'd love to start there.

Scott Harrison [00:01:54]:

Sure. Well, I guess if you go back at the beginning, there was a tragedy that happened when I was four in my family where my mother, on New Year's Day 1980, passed out unconscious on her bedroom floor. And this led to hospital visits, blood tests, and then the discovery of a carbon monoxide leak in the basement of our house, the new house we had just moved into. And I was born in Philadelphia. My dad was kind of a middle class business guy working at a electrical engineering company. And we had just moved to South Jersey to get a little closer to his job. He wanted to reduce his commute and have a big family. And we bought an energy efficient house at the end of a cul-de-sac. And it's great to have an energy efficient house unless you have a carbon monoxide leak inside the energy efficient house in winter. So mom was kind of the canary in the coal mine. He discovered the leak, ripped out the heater. We had some strange health symptoms leading up to it, but dad and I both bounced back and she just never did. So she became an invalid for the rest of my life. In that she was severely immunocompromised and her immune system just shut down. Kind of never turned back on. So she would be connected to oxygen, she would wear masks. In fact, she wore a mask for the next 40 some years of her life. I never really saw her face again after that. She would live in containment rooms in this house and then in the next, covered in aluminum foil. Darren tile scrubbed down 20 times with baking soda. So just a really kind of sterile, pure environment. Because anything chemical would set her off. Massive rashes, migraines, hypertension. So she would live a life that was really isolated. And as a kid I would take care of her, I would do the cooking, I would bring up her meals to these rooms and would kind of hang out with my dad and that was our job. So I was raised in a very conservative Christian house, kind of non denominational. They would bounce around to different, try a Baptist church or Presbyterian church or Methodist church. And I wanted to be a doctor. Growing up I believed that I would go to Johns Hopkins and I would find the cure for my mother and many of these other immunocompromised people that, that were in a community that kind of formed. So that was, that was kind of chapter one of my life. And then at 18 years old, instead of applying for medical school, I announced to my parents that instead I'm going to move to New York City and I'm going to become a nightclub promoter. Probably about the opposite of what they had hoped or expected. And you know, I think I've got.

Darren [00:04:49]:

I've got to pause you there.

Scott Harrison [00:04:50]:

Yeah, sure.

Darren [00:04:51]:

First of all, I do think at some point I want to return to that four year old boy and just understand how that shaped you and how you've dealt with the trauma of that, if that's okay.

Scott Harrison [00:05:04]:

Yeah, sure.

Darren [00:05:05]:

But this decision at 18 to flip the switch from I'm going to medical school to nightclub promoter, like what happened?

Scott Harrison [00:05:12]:

Yeah, well, it started kind of. I joined a band. So the band, the rock band led me to New York City and then we immediately broke up because we all hated each other and you know, half the band was doing drugs and I learned anyway rock band, classic dude, you know, long. And I, my hair was down to my shoulders at the time. Like, terrible idea. I played a keyboard, you know, like a keytar. Okay. So, you know, I learned that the people who were booking the bands were actually the ones making real money. The people who were running the clubs who were promoting these nightclubs at the time. So the minute the band broke up, I announced that I was going to jump to the other side of the business and be the guy who filled the club and took the money home. And, you know, in some ways, this was just a cliche act of rebellion. You know, it was the prodigal son story, right? I was raised. I didn't smoke, I didn't drink, I didn't cuss. I couldn't sleep around, you know, kind of purity culture. And one day and just said, I want to do all of those things. I mean, I want to sleep with beautiful models and I want to smoke and I want to drink and I want to try drugs, and I want to fly around the world to Fashion Week, and I'd like to have a, you know, a fast car and a Rolex and, you know, all of these things that I wasn't allowed to have or even to want. So that started this journey for me in New York City, climbing up the ladder of nightlife from the very bottom. And I got pretty good at it. And to get good at it, you need to fill nightclubs full of beautiful, famous, wealthy people. And if you can put the right mix together, you can charge $1,000 for a bottle of champagne that cost you 40, and you can charge $25 for a cocktail that costs 25 cents. And over the next 10 years, to the chagrin of my parents, I picked up all of the vices that I had announced I would and worked at 40 different clubs in Manhattan, getting pretty close to the top of the food chain, where we were entertaining the celebrities and the Goldman bankers and the CEOs and the rock stars who would be out on the town.

Darren [00:07:33]:

What was it about you, Scott, that made you so good at what you do? Because I'm guessing that some of those traits are gonna reappear as we keep going on in this conversation.

Scott Harrison [00:07:44]:

I think I was just a good promoter. I was an enthusiast. I would get people excited about whatever we were doing, and I always tried to bring some creativity to the clubs. We would theme parties. I remember I would throw pool parties inside nightclubs, and I would hire people to sit on lifeguard stands in the middle of the dance floor and get a bunch of beach balls. And you know, tried to make it fun and tried to stand out a little bit from all the other clubs that, that you could go to on any given night and say, no, you need to be at ours. You know, this is the, this is the place to be. You need to get past this velvet rope. And in a way, you know, the story. I was a storyteller really for 10 years, but the story I was telling was a pretty meaningless one. I mean, I was saying that if you got past our velvet rope, you spent $10,000 on booze and you sat with the pretty people, then your life had profound meaning. You know, you would walk away from that club saying, I've done something special. And in fact, you know, you typically walked home wasted at 3 in the morning, you know, and it ruined, ruined your next morning. So that took 10 years to kind of run through that whole process. And I had a powerful moment when I was 28 years old. So a decade into this, I was in Punta del Este, Uruguay, in South America, and I was on a New Year's Eve vacation. And we would always get the heck out of New York City because that's when the tourists came to the clubs and nobody wanted to be in Manhattan for New Year's Eve. So we would rent some compound where we'd rented a place in Uruguay and fly down there. And sometimes somebody had a private jet that we could all jump on. And I just remember it was the most beautiful setting, Darren, you know, this gorgeous compound, you know, near the beach. The compound came with a boat, you know, a yacht attached to it. And I just remember we were destroying the serenity with blasting house music and doing ecstasy and, you know, like I'd wake up in the, nine o' clock in the morning and the compound was full of people dancing, getting thrown in the pool, just kind of off their minds. And I remember it just felt so unhealthy. And it's almost like, you know, the game of musical chairs where every time previously the music had stopped, I had a chair to sit down in. And, you know, this moment, a decade into this selfish, sycophantic, hedonistic lifestyle, you know, the music stopped and I'm like, there's no chair and I should really take stock of what's next. And I hadn't been involved in any religious practices for 10 years. So I'd really walked away from the faith of my childhood, the morality of my childhood. And that started a rediscovery moment of, you know, do I believe that there's a God? Do I believe that we're supposed to live for others and not ourselves. My gosh, how far I've slipped into depravity, you know, when it came to the virtue that my parents tried to instill in me as a, as a kid. And I just knew something needed to radically change. And I came back to New York City, you know, with that disruption. And it took about another six months where I just made a huge change. And I said, I'm going to sell everything I own. I'm going to start life over again at 28 years old. And I want to live in the poorest country in the world for one year and see if I can be of service, do I have anything to offer people in need. And you know, growing up in the church, there was this kind of money practice of tithing where you'd give 10% of your money to church and the poor. And this was kind of a tithe of time, you know, could I give one year of the ten that I'd wasted? And it turned out to be really difficult to volunteer for a humanitarian organization if you're a nightclub promoter. So I got denied by the first 10 groups that I applied to. And I remember World Vision and the Salvation Army and the Red Cross and Doctors Without Borders all turned me down. Doctors Without Borders is looking for doctors, it turns out, not club promoters. But this one organization finally did allow me to join their mission, provided I pay them $500 a month for the pleasure of volunteering. And I was going to be joining them on a mission to Liberia, West Africa, which was a country I'd never even heard of, but at that time, ironically, actually was the poorest country in the world. A 14 year civil war led by a brutal warlord, Charles Taylor, had just ended. There was economic data for the first time. And it came on kind of at the bottom of the charts of the world. A country with no electricity, no running water, no sewage system, no mail system, and one doctor for every 50,000 people living in the country. And this medical mission, actually a group of doctors operating on a 500 foot hospital ship, a converted ocean liner turned into a state of the art hospital, said that if I paid him 500 bucks a month, I could join the mission as a photojournalist and take pictures and write stories and help communicate or promote their work where they could raise awareness and raise money. And, you know, everything changed the day I walked up the gangway of that hospital ship and surrendered my passport. I vowed to never smoke again, to never touch drugs again, to never, you know, look at a pornographic image again, to never gamble again. I wanted to kind of have this. This clean break from my old life and start a new chapter. And there was something really symbolic about, you know, a gangway of a ship kind of being pulled up and then sailing away to a new continent, Africa, and a new life. And that kind of started act three.

Darren [00:13:38]:

That's incredible. It's an incredible story. And you're an incredible storyteller already. That's. That's clear because you described yourself as something so. So Act 3 begins. And what was the year like? And what did it lead to for you?

Scott Harrison [00:13:55]:

I mean, I'd never experienced anything like a post war African nation. And it was just. There was no paradigm, you know, I mean, to go from spring champagne from the DJ booth, you know, as Jay Z was at table and a bunch of models are at table two and, you know, Jim Carrey's at table three in a club. To a country, you know, that has just been decimated by war was in some ways really thrilling, if I'm honest. It was. It was. It was exciting. There were 14,000 United nations peacekeepers. There were choppers, there was barbed wire, there were tanks. You know, this was an important moment in the rebuilding of a country. Elections were held for the first time in a decade and a half. And I had this powerful moment, Darren, where my third day in Africa, my third day on this mission, it's what we called the patient screening. So a small advance team had posted flyers throughout the country saying, a ship is coming, doctors are coming. If you have a facial tumor, if you have a cleft lip or a cleft palate, or if you're blind with cataracts, or if you've been burned by rebel soldiers during the war, war turn up on this day, and our doctors will screen you, will triage you. And I learned that the government had given us the soccer stadium in the center of Monrovia to do this screening. And I knew that we had 1500 available surgery slots to fill. And I'll never forget waking up that third day putting on hospital scrubs. It was 5, 5:30 in the morning. I grabbed my two Nikon D1X cameras, you know, new memory cards, full batteries, and I jump in this convoy of Land Rovers that are heading towards the stadium. And as we approach the stadium in those early morning dawn hours, there are 5,000 people that are waiting for us in the parking lot. And I remember getting on top of the Land Rover and taking a picture of the 5,000 people and just weeping. I mean, it hit Me, this need is so much greater, then we're going to be able to meet and we're going to send 3,000 plus sick people home without the chance to see a doctor. I later learned that many of these people had walked for more than a month, some of them walking from neighboring countries because the word had spread to Cote d', Ivoire, to Sierra Leone, to Guinea, that there were doctors coming to Liberia that might be able to help them or their children. And we didn't have enough doctors. And then the chief medical officer was a remarkable guy named Dr. Gary Parker, who became a mentor very early on of mine and sort of, I guess, the guide in my new life. And he told me that day, he said, you gotta focus on the hope. You gotta focus on the 1500 people who we are going to be able to help. And like me, he'd actually signed up for even a shorter tour of duty. He'd signed up for three months, had left his plastic surgery practice in California. You know, heard there was a ship where he, as a surgeon could. Could volunteer for a few months. And when I started my tour of duty, he had been on the ship 21 years. So he fell so in love with this work and service that he never went back to his plastic surgery practice.

Darren [00:17:17]:

Yeah.

Scott Harrison [00:17:18]:

And had spent two decades on the ship. So I wanted to know everything I could about him and what, what a prolonged life of service could look like and what it would feel like.

Darren [00:17:28]:

I know there's so much more to come in this story, but there are people in my life that have, I think, considered or might be considering, and maybe perhaps people listening to this conversation, this kind of moment in time where they reassess their life and they devote the remaining part of their life to giving and philanthropy and doing real good in the world. Maybe it's time to ask this question or maybe we come back to it, but is there anything that you would want to say to them, to those people that are like, in that moment of thinking about this, that, you know, you got some incredible mentorship and advice from somebody, what would you say to somebody in that situation?

Scott Harrison [00:18:10]:

Yeah, well, I'm always careful to give advice. You know, I think I can speak from personal experience. You know, I'm coming up on. I actually just hit 20 years now of service in Act 3, so still a little under Gary, where he was when I met him. But, you know, I think for 10 years, Darren, I had chased the idea of more of consumption. You know, the car would make me happy, the famous girlfriend would make me happy. The, the watch would make me happy. The place that I went on vacation would make me happy. And what I learned was somebody always had more and it was never enough. You would reach that moment and it just wouldn't feel like it was supposed to because it was all about me. It was about what I would get and how I would feel collecting these markers of success. And I think what I found, you know, almost immediately was that there was this freedom in service when the focus and the attention and the energy was placed on helping others thrive, helping others get out of, you know, helping to end needless suffering and using your time and your resources to that end. You know, it's like a weight had been lifted. And in a way, there's still never enough. Yeah. Somebody sent me this picture from a New York deli, one of those boards where you kind of can change the letters every day or so. The quote was from like an ancient rabbinic text. Do not be afraid of work that has no end. Don't be afraid of endless work. And in some ways the work of service is the same way. There's no finish line. You know, you don't say, oh, I've ended all the suffering in my local community, I've ended all the suffering in the global community. There's really no drop the mic moment. But it's such a different way to live a life. It's such a different intention. And you look back and you say, oh, wow, actually I have helped a bunch of people rather than just accumulated a bunch of stuff.

Darren [00:20:28]:

Yeah, yeah. So this time in Liberia begins this new life for you of helping walk us through that time and what it led to.

Scott Harrison [00:20:39]:

Yeah, I mean, it was just, it was really before and after, you know, and in some ways, as extreme as my transformation had been, this was what we were delivering to the patients. So a child would walk up on the ship with a six pound fleshy tumor that had grown over many years, almost suffocating them to death, growing unchecked. And we would remove the tumor, giving this child their face and their life back. We would bring on a 30 year old woman who had been blind for 10 years as cataracts had taken over her eyes, you know, exposure to the equatorial sun, no UV protection, and had actually never seen her daughter. And in a 20 minute surgery, you know, where I'm standing there in scrubs, clicking away with a camera, you know, a doctor removes the cataract and sticks in a new lens. And then the next day the bandages are removed and she can see for the first time in a decade, and she can see her child. I mean, the moments of just of euphoria, really, that I was able to witness thanks to the intervention of these doctors who could have been in the Maldives, Darren. You know, they. They had money, you know, they could go anywhere they want for vacation, and instead they came to the poorest country in the world in the heat to operate for free.

Darren [00:22:04]:

I can't help but, but see the connection here. If you don't mind me probing gently here. I'm imagining this boy that wanted so badly to help his mother, probably couldn't. And now you're thrust into this environment where you're seeing people in need get the help they want. Is that a fair connection to draw for you?

Scott Harrison [00:22:30]:

Yeah, I mean, I wanted to be a doctor, and then I wound up on a ship full of doctors.

Darren [00:22:33]:

Yeah, isn't that crazy?

Scott Harrison [00:22:34]:

Documenting the work of these doctors, transforming people's life. And then I think there's even an interesting turn. So when the year ends, and this was kind of cool, Darren, because I had gone to Liberia with a big email list that I had amassed over 10 years in 40 clubs. And back then, email open rates were like 100%. You know, you would send an email and people would get it and they would open it. So I started blasting my club list, these photos and videos of surgeries, you know, before and afters. And, you know, of course there was some unsubscribes at first. People are like, man, I didn't ask for the cleft lip party, right? I wanted to go to the Prada party downtown in soho. So, you know, there were a couple people that said, take me off this list. But what I learned is the list actually began to grow as these stories of transformation touched. People working at Chanel or at Goldman Sachs, people going out to clubs every night. And people began to send money to mercy ships and sponsor surgeries. People began to volunteer on the ship because of the awareness. So I think it was really cool that the thing that I had learned was almost instantly useful, the promoting. I just started promoting something completely different. You know, the idea that by serving, by giving, you could create a life of meaning and you could transform the lives of other people in such tangible, measurable ways. So that felt pretty good. Sitting on this ship in this tiny little cabin and taking the pictures that I had just shot in the operating theater that day in an eight and a half hour surgery and writing a story of what I saw and then sending it out to 15,000 people and getting that feedback in real time as people were just so moved by the work of these doctors.

Darren [00:24:35]:

Scott, does it ever make you think like, those 10 years were not wasted? I mean, obviously they were not wasted. And almost like in this, maybe this gets a little too spiritual, but, like this divine sense of we're placed into these roles, and while they may not make sense in the moment, they're. They're. You know, you were there for almost a reason. Like, that's. That's what's showing up for me as you tell that story.

Scott Harrison [00:24:58]:

Yeah, and there's. There's another fun turn in a minute. But the. The year ended, and I finished the year. I went back to Liberia for a second tour of duty for another year. And that is when I came across the water issue. And that second year, I remember I bought a motorcycle for like 500 bucks, like a used motorcycle. I wanted to get a little more freedom, get off the ship, get out of the capital city and into the rural areas. And as I would go into the rural areas, I saw the water that people were drinking, and it was disgusting. It was toxic, it was dirty. It was diseased and poisoned. It came from open swamps, from open rivers. It was filled with algae, it was filled with bugs. It was fecally contaminated, often as it was shared with animals. And I remember taking these pictures to Dr. Gary in his office and saying, you know, Dr. Gary, no wonder everybody's sick. Like, dude, no wonder there's 5,000 sick people waiting for us in the parking lot outside of a soccer stadium. You should see what people are drinking. And I learned really two simple things. Half the country was drinking dirty water, and half the disease in the country could be tracked back to that dirty water. And a lack of sanitation and hygiene, water related. And, you know, I was very fortunate. At the end of my second tour, Dr. Gary kind of simply said, why don't you go work on this? Like, you want to be a doctor, you know, you want to continue on in healthcare, why don't you just go bring everybody in the world clean water? You'd be the greatest doctor in the history of the world if you got people the most basic need for health. And at the time, Darren, 1 billion people on the planet 20 years ago were drinking dirty water on a 6 billion world population. So 1 in 6 people alive were drinking dirty water every day. And Gary's like, yeah, why don't you go solve it? So I came back to New York City at 30 years old. I was completely broke because nightclub promoters are not great at saving Money, we're very good at spending it. And, you know, I was volunteering for two years and actually paying to do it. But my. My old club partner, business partner, took me in, and he let me live in the closet floor of his loft in soho rent free. He's like, if you want to live in my walk in closet, it, I won't charge you rent. So here I am, back off of two years in the ship, and I have my issue. My mission would be to bring a billion people in the world clean water. And I just started in his living room, and I think I had the advantage for maybe some of the entrepreneurs listening. This is a similar experience. I had the advantage of just not knowing any better and nothing about inside institutional philanthropy. You know, I had no trappings of the sector or how things were done. I remember buying one of those dummy books, like, you know, how to start a nonprofit for dummies, and you need a board, and you call the 501C3, and you're gonna need to have board meetings and, you know, file with the IRS and all this stuff. So I had to learn all of that. But the advantage was I was talking to potential donors who were my age and who went out to clubs or worked at Sephora or MTV VH1, or they worked at, you know, Chase Bank. And I realized so many people didn't trust charities. There was a cynicism, there was a skepticism when it came to giving your money away to charities. People thought that they were giving into a black hole. And, you know, I quickly found that the data backed this up. 42% of Americans who were polled by USA Today at the time just said they distrusted charities. And Another poll found 70% of Americans believed charities wasted their donations, at least in some part. And, you know, I thought, well, you know, if I'm going to try to solve a problem as big as, you know, getting a billion people water, we're going to need to do things differently here, and we're going to try to start a different charity that would speak to the cynic and the skeptic. Maybe there's a way to reinvent or reimagine the entire space. So I had a couple ideas. The first was, well, what if I could design a business model where we promised that 100% of every donation we would ever take in would go directly to help people get water? And I actually wound up opening two separate bank accounts, one for overhead, where I would somehow convince people, you know, business leaders, I guess, or foundations or entrepreneurs to pay those unsexy office costs, the staff salaries, you know, the flights to Africa to develop these programs, so that in the other bank account, 100% of the public's money would not be stepped on. And whether somebody gave a dollar or eventually a million dollars, they would know that everybody, all of it went directly to help people get water. So that was kind of the first big idea and it turned out to be unique. Other charities just weren't operating like that. And then the second kind of follow on idea from that was, well, hey, if we're not stepping on public donations, can't we build technology that would track them down to the last mile, down to the village in Malawi or India or Cambodia or Bangladesh, where we could track a $6.15 donation that came from a lemonade stand and say, here's where it went. And at the time, Google Earth had just been created, I met the founder of Google Earth and I said, here's what I want to do. I want to build the most transparent charity in the history of the world. And he said, well, you'll be able to put the photo and GPS data of every one of your water projects on Google Earth. And I remember going to Best Buy and buying a bunch of those yellow Garmin handheld GPS devices and saying, all right, we're never going to build a water project unless we prove it. And we send the photos and the GPS coordinates and the satellite images back to our donors. So that just became the foundation, this transparency where 100% of the money goes and then this idea of proof where people could see exactly where their money's going to. You know, later Google Maps came and we moved our projects from Google Earth to Google Maps, where they are today. And then maybe the third belief was to construct water projects in a culturally appropriate and sustainable way. They would have to be led by the locals in each of these countries of need. You know, no guy like me from New York should try to pretend to be a hydrogeologist and drill any wells. You know, we could build a movement, we could get people to care about an issue. We would raise money to directly help people, but we'd create thousands of local jobs, you know, Ethiopians constructing the project, leading their communities and countries forward. So if we were successful, we wouldn't even get the credit. It would be led by these amazing local water technicians and hydrogeologists in each of these countries. So I hinted at this earlier, but I, I put the three things together and the best idea I had for day one of water was actually to throw a party in a nightclub and it was my 31st birthday. It was Fashion Week in New York. I got a club donated that nobody'd ever been to yet. Cause it was opening a week later. And I got Open Bar donated. And I emailed everybody I knew, and I said, I'm turning 31. I'm launching this thing called Charity Water. And to come to my birthday party, you have to bring $20 as a donation. And I put this big plexi box out at the door. And at the end of the night, there was $15,000 in that box. About 700 people had come through. And we took 100% of that money, and we took it to northern Uganda and we built our very first well. And then we took pictures and shot video, and we sent the proof back to the 700 people a month later. And we said, you came to a party, you gave $20, and here's exactly where it went. And here are the people you helped. Let's do more. And that was really the birth of the organization. And that was 186,000 water projects ago from that first one.

Darren [00:33:37]:

It's an incredible story. I've got a number of things that I want to probe on with.

Scott Harrison [00:33:42]:

I will just tell you one anecdote from that night. I remember there was a wad of $400 that had been tossed in the box, and it came from a drug dealer, a guy I knew who used to sell weed. And he comes up to me at night and he says, this is the first charitable gift I have ever made in my human life. But I feel like I think I know where it's going to go. I know you. And so I dropped the money in the box. And not that this would be water's future donor audience, weed dealers, but it felt like such a proof of the concept that nobody was more cynical. Nobody was less likely to give away money than Lou. And Lou said, ah, what the heck, I'll throw some money in to help people get water.

Darren [00:34:29]:

So you not only declared, I'm going to provide clean drinking water to a billion people, therefore eradicating the problem globally. I mean, that's an extraordinary vision and commitment and declaration. But you also take on the very paradigm of philanthropy and reimagine it in the way you set up this 100% model and transparency and even employing local people. So I want to maybe on that second part of reimagining philanthropy, go there first, and then we'll get into cherry water and what you've accomplished over the last two decades. I'm curious. Distrust in philanthropy has that shifted at all? And I'm also curious about your model. Has it, has it gotten some traction or are you still unique in this regard?

Scott Harrison [00:35:14]:

I think trust in philanthropy has gotten a little better. I think a lot of charities, especially ones that have been started over the last 20 years, have realized that transparency wins and that if you can tell donors what you did with their money, you have a better shot at getting them to continue to give rather than just continuing to mail them and asking them for money. So I think there's been some improvements for sure in the sector. You know, there are others that have adopted our model. I will say I'm very hesitant to encourage others to do that because it's unbelievably difficult. You know, if you really think about it, I could have $100 million in the water bank account, and if I don't have money for payroll, we're effectively insolvent. So for 19 years now, 19 plus years, we've had to be build these two things in perfect balance, and it's extraordinarily difficult. Now. That's allowed millions of donors globally to give in the purest way. So it's an unbelievable donor experience. And we have NOW found about 140 CEOs, entrepreneurs and families who have come along. The staff and the operations and the overhead side, that's a giving program that we call the well. And that needs to grow in proportion as we scale the donations for water. So it's a challenge. It's kind of always the existential challenge. It's our challenge that we took on. But when people ask me for advice on the business model, I say, you could have, you should have overhead. In fact, some charities have too low overhead and their programs are crap because they're not paying for the talent that they actually need to execute high quality programs, you know, whatever the mission is. So I'm not encouraging minuscule overheads. I think I'm just encouraging transparency. I believe donors are open to myriad value propositions if they trust. If I told your listeners that the biggest need at water was an Epson copy machine that cost 650 bucks because our broke and somehow that was gonna fulfill a business mission, people would be delighted to help buy a copy machine to move the mission forward and meet that need. It's just the not knowing that I think has plagued the sector. The not knowing and then the not trusting or sometimes even finding out, hey, the money didn't go where they said it was. It was going to go in the first place. That's what I'M preaching is trust. Build relationship of trust and transparency and try to build, you know, a proof loop where people can see and that's good for them, too. You know, Simon Sinek has been a well member on the overhead side for many years and a friend. And I remember he said to me once, like, we need to get people addicted to giving, right? The more you give, the more you give. So it's almost like this muscle. So if we can give people a great experience, they give. They see where their money went. They keep giving, not just to us, but even to other organizations. They experience that joy in generosity rather than getting burned, throwing up their hands and saying, that's why I don't give money to charity. And then, you know, almost depriving themself of the joy of using their resources to improve the lives of others.

Darren [00:38:35]:

Yeah, let's go to the billion people. I'm really curious what you.

Scott Harrison [00:38:40]:

Well, we're at 703 million now, so, you know, on an 8 billion world population. So we've made a lot of progress as a sector. Water has directly helped a little over 20 million people in about 186,000 communities across 29 countries. So we've worked all over Africa and India and Southeast Asia, a little bit in Central and South America. But the movement of clean water, I think we've certainly contributed to some awareness as well, and we've made progress. And I think sometimes it might feel like we're shoveling coal in the steam engine that's just on the road to nowhere. And that's not true. To go from 1 in 6 people alive without clean water to 1 in 10, 1 in 11 people alive. We are making progress. And what's great about water, just talking about the issue for a second, it's challenging because none of our donors or potential donors have ever experienced the problem. I'm gonna bet that none of your listeners have ever had to drink dirty, diseased water in their life. Now, maybe there's a couple people who did emigrate from these countries and had that experience, but, you know, 99.9% of the people we talk to have never experienced that. If you were interviewing somebody working on Cancer Research, 100% of your listeners have been impacted by cancer. Right. Either ourselves or someone in our family or a loved one or a friend or a co worker. Right. 100% of us have an awareness and a human experience where cancer has been a part of our lives. So it's much easier to raise money for pancreatic cancer research than for dirty water. For 703 million people living over there. And that's why the storytelling and the proof, I think, has been so critical to building this movement. When you double click on the issue for a second, it makes almost more sense than anything else you could spend your money on. Because if you think about it, water impacts health, so you're basically getting health for free. It impacts education as half of the schools throughout the developing world don't have clean water to offer their students. They don't have toilets. So when you bring water to schools, girls go back to school and get educated. Grades go up as the kids aren't sick. It impacts women and girls. You know, today, women and girls will spend over 200 million hours walking for dirty water. Wow. That's just in Africa. This is the continent of Africa. So you're giving time back, and that time turns into productive work and entrepreneurship. And women, you know, with seven hours back in their day, seven days a week, start small businesses. They start baking things. They set up shops at the local market, and they use that money for education and to prove their homes. You know, there's a climate piece to water. It makes communities more resilient to floods and drought. So, you know, water's like this great core thing that transforms so many aspects of human life, but yet we've never experienced the problem.

Darren [00:41:48]:

Yeah, yeah. There's something you showed me that was really powerful. The women carrying, I think it's like 40 pounds of water up to seven or eight hours a day. And just the, you know, not being able to have experienced that system of transport for a basic good that we take for granted. So there is something about both storytelling and, like, pictures bringing to life photos, bringing to life this in a way. And I know that you've done an extraordinary job of bringing to life an issue that is hard to imagine, including some really creative things you've done with brands. Can you talk a little bit about that aspect of what you did as I found it fascinating?

Scott Harrison [00:42:32]:

Well, one of the fun things we did that actually helped raise over $100 million was asking people to donate their birthdays and water. Kind of started on my 31st birthday in a nightclub and a year later said, well, I did that. I don't want to go back to the club party fundraiser idea, but I'm turning 32. I don't need anything for my birthday. I don't need a belt or a gift card or a wallet. I certainly don't need a birthday party. What if I asked for my age in dollars from everybody I knew? I said, you know, pretty much everyone I know can donate $32, knowing that 100% of it would go to help people get water. So I kind of launched this online email campaign and I emailed everybody I knew, and I wound up raising $59,000. And then I asked other people to donate their birthdays. And 6 year olds would ask for $6 and 89 year olds would ask for $89. And this movement of birthdays began to grow. And this was before GoFundMe, before Facebook causes. You know, we kind of built one of the first peer to peer fundraising systems in the world. And we built a closed system where we could track those birthday donations down to the exact village where the people were helped through those birthdays. So that was just one of the things that really helped us raise a lot of awareness. A lot of leaders in Silicon Valley, you know, Jack Dorsey did three birthdays, Daniel Ek from Spotify, Angela Ahrens from Apple, like, it just, it was a great kind of way to get both kids, people on pensions, and then, you know, people running companies who could just ask for their age in dollars and involve everyone in a beautiful story. We have worked with brands. You know, one of the challenges with our 100% model is we kind of. We never had a marketing budget. You know, we always seemed to raise enough money to pay for our team members, but we would have to create creative brand partnerships and rely on the mouthpiece of others to get the word out. So, you know, partnered with Google and with Amazon and, you know, early on with Twitter and, you know, always looking for creative ways to get the word out. I'm actually headed in a couple days to speak in Minneapolis to 10,000 stylists. Aveda has been one of our partners. And these stylists all around the world for one month will talk about water, they'll talk about charity water, and they've got a captive audience. You're coming in to get your hair done. So turning people into ambassadors like that, and then helping to turn that awareness into money that we can directly use to change people's lives. We've done limited edition suitcases with away, we've done charity water toothbrushes. So we're always kind of looking for the creative angle of does anybody listening? In AI, we think there's a real opportunity with the water that's used in data centers. As we continue to scale computing power. This is a finite resource and it's not shared by 10% of the world. So how could we create a story that people are also getting water as water's being used for computing power and the blossoming of AI. So we're always looking for ways to do that. Look, we've raised a little bit over a billion dollars thanks to the generosity of really millions of people around the world who have said, I can reject the apathy that would be so easy to succumb to with a paralyzing global issue that doesn't affect me. And, yeah, I'm gonna help people get water. In some ways, Darren, like, it's the most inarguable common good. Maybe one of the few things that Republicans and Democrats can agree on. If you're of a Jewish faith or a Christian faith or a Mormon faith, if you're an atheist, if you're an agnostic, like, everybody can kind of put differences aside and say, people need water. You know, I'm just gonna do something that is a universal, inarguable common good. So we've really been able to build a pretty big and wide tent of consensus by just focusing on that issue time and time again and actually trying to bring people together who might fight to the death on political or social issues, but can agree on that thing.

Darren [00:47:03]:

Yeah. So you've had this, I would say, enormous dent and impact. And I'm also imagining these. The kind of ripple effects that you've had on other organizations and consciousness around this issue in general, you've contributed to in a pretty meaningful way. So I'm curious, like, where do you, Scott, sit today? It sounds like you're approaching 50. Is that.

Scott Harrison [00:47:26]:

Yeah, I'm 50 in a couple of weeks.

Darren [00:47:27]:

Okay. Yeah.

Scott Harrison [00:47:28]:

You know, look, I think it's unfinished business. And, you know, should I continue to be blessed with health, you know, I'd like to continue to contribute. It is a solvable problem down to the last person. My mom eventually died of pancreatic cancer, and it was four months from diagnosis to death. The doctors had absolutely no idea how to help her. There was no procedure. There was no the chemo. Nothing worked. And there are so many problems that we don't know how to solve. You know, ALS, Parkinson's. We don't have cures. You know, even after spending tens of billions of dollars. And maybe there's a cure out there, but we actually have the cure for water. You know, we can take 703 million people today drinking dirty water down to zero. There's not a single person alive on planet Earth where we're scratching our head saying, we just can't get them water. Like, they're too far right. So that's that's really exciting when you know that you are working on a problem that can be solved in totality. And it just needs resources, you know, to put it in a big number. It's about $55 billion to get 700 million people water. There's $250 billion right now sitting in United States donor advised funds, parked philanthropic capital in DAFs. Right. 1/5 of that gets everybody water. So I think, you know, I would hope that we're in the top of the second inning, you know, if it's a baseball game of impact and we just need to be better storytellers, we need to keep showing up, we need to keep inviting people to join us, to join us in this solvable problem that transforms human life so immeasurably for the better. And, you know, hopefully this is a fraction, you know, 20 million people is a fraction of the impact that we'll make five years from now or ten years from now. You, if we stay the course, you know, the. Maybe the long obedience in the same direction. So trying to conserve energy and make sure I'm a good husband and a good father. I've got a fourth kid on the way, which was a surprise for us and our family. And, you know, that's trying to manage that tension of being out there on the road, asking people to give and also being home and, you know, leading my family and contributing at home.

Darren [00:49:50]:

Yeah. How are you managing that tension?

Scott Harrison [00:49:52]:

Well, it's hard.

Darren [00:49:53]:

It's hard.

Scott Harrison [00:49:55]:

It was great during COVID I went from 80 flights a year to zero. Although I think my wife would probably prefer 30.

Darren [00:50:02]:

Yeah, yeah, yeah.

Scott Harrison [00:50:03]:

So it's, it's. It's a challenge. You know, there. There's a very famous organization, you know, one of the kind of household names that has a story most people don't know about the founder. Many, many years ago. And, you know, the founder helped millions of kids around the. The world out of extreme poverty. And his daughter actually took her own life, and she wrote a suicide note to the effect of, dad, you were there for millions of other kids, but you were never there for me. And I remember reading that biography 20 years ago and just saying, I'll never make that decision. So it's certainly a tension to manage as my kids get older, I can take them. I just took my oldest two to Madagascar in South Africa last month. They've been to Uganda, walking for water, seeing wells being drilled, meeting our local partners. So I think that's one of the, maybe the few perks of being a social entrepreneur. Is you can pull your kids out of school and say, we're going to go have an experience together that hopefully connects them with their hearts to the mission and to service.

Darren [00:51:10]:

You said something about energy I just wanted to ask you about because 20 years is a long time to have. And what I experience when I hear your story and in this conversation right now is an extraordinary amount of energy that has been directed at this really, really important problem. How do you sustain it and what is it like for you?

Scott Harrison [00:51:32]:

I think there's just such a deep level of conviction. I've been to Africa 55 times. I've had these moments, Darren, where, you know, we'll help 2 million people in a year get water. And I'm standing in one community in Ethiopia saying it would have all been worth it for, for this community, you know, for this woman who has been breaking her back her entire life. And she was living on top of the resource that could have saved the lives of her children that she lost to diarrhea, to dysentery, and she didn't have $10,000. She was a subsistence farmer. And, you know, I convinced somebody to buy a less expensive watch or, you know, I was at a restaurant the other day and a guy sitting next to me said, hey, you know, I did a well for you. I heard you speak once and I canceled a vacation. I was going on a vacation and I thought 10 grand on a vacation or 10,000 to give a couple hundred people water. And I said, I made that decision, so keep going. So I think there's enough, you know, there's enough of these little affirmations and, you know, and made a difference in the life of that giver, you know, who experienced the joy and he got to see it. So he knew exactly where his well was and that that proof loop, you know, was finished. You know, I think it's just a deep level of conviction. People should have water. We built an organization that now has 20 years of experience. A world class organization that knows how to do it effectively and efficiently. I just need to get more people involved and try to move latent money, latent philanthropy on the sidelines and say, let us put it to work. Let us partner here.

Darren [00:53:11]:

Yeah, I can see, for those of you listening, I can see it in your eyes and it's obvious how much and how deep you care. And I know this question's occurring to me, so I'm just going to ask it as I think once you shared with me, you know, you're dissatisfied, right? As much progress as you've made. There's still so many people, and the solution is so clear. Despite being as challenging as it obviously is, I just wonder how much you've allowed yourself to acknowledge yourself for.

Scott Harrison [00:53:45]:

Yeah, I'm not very good at that. It's very hard to celebrate the wins when the problem is so big and there are so many reasons, resources out there. So it's really, you know, if I'm honest, it's more, what are we doing wrong? Like, how are we not? What is the key? Like, how have we not unlocked, you know, that next level? How have we, you know, what are the keys to generosity? The key? What are the unlocks? So it's more of kind of the quest. The best probably moments I've had, you know, is trying to put 20 million people into stadiums, you know, so I'll be at Madison Square Garden with my wife, and, you know, we're at a concert and it's about 19,000 people, you know, for a sellout crowd. And, you know, I'll say, wow, you know, we've done this over a thousand times and now we're filling up a stadium every three and a half days, you know, of run rate. So that's kind of cool, you know, to kind of look around and feel 20,000 people and know that, you know, Monday through Thursday, if we keep it up, you know, the donor community is going to throw another 20,000 people from dirty water to clean water. So that's kind of a. It's. It's a measurable KPI. I'd like to add a zero to that.

Darren [00:55:04]:

Yeah, yeah, I get it. Well, I could see, you know, that even as I ask that question, your discomfort with it. And if I could be bold enough to offer you something, it would be that place to both the paradox of being highly dissatisfied and being extraordinarily proud of what you've accomplished. That would be my wish for you, if I could be so bold to offer it.

Scott Harrison [00:55:32]:

Well, thank you, Darren. That's what you do for a living. So I will accept that you are the expert.

Darren [00:55:38]:

This has been an extraordinary conversation. I mean, and we've covered an incredible amount of ground. Anything that we haven't covered that you'd want to make sure you offer or something that we have that you want to make a finer point on?

Scott Harrison [00:55:54]:

Yeah, I think just encouraging people to find those things that they can give their time and their money to. And I feel like so many people, they wait too long and they miss out of living vicariously through their money at work, you know, through charities, locally and globally, you know, they kind of, a lot of people, they just kind of let it sit there and, you know, I'll get around to it and how it feels so hard to how am I going to know or pick or track it? And, you know, I think I would just encourage people to step out and start just engaging more. You know, there's just. There's so much wealth on the sidelines. People are busy, there is a sense of a lack of trust. But there are so many pressing needs meeting humanity right now, and we need them, you know, we need that. That money and that time and that mentorship to flow more freely.

Darren [00:56:56]:

That's wonderful.

Scott Harrison [00:56:56]:

Not to use a water analogy on that was unintentional.

Darren [00:57:01]:

And you've made it very easy for people to do that. And I would really encourage anyone listening that has been inspired by this conversation to go to your website. You've done a wonderful job of that transparency and you've made it as easy as possible for people to do that. I love the well idea for those that have the means to contribute to the other side of your incredible philanthropy that powers everything that you're doing. And you have an extraordinary list of people that have done that. And so for those of you that are in a position where that's possible, I highly, highly encourage. You're a gift to this planet, Scott. And I, for one, just want to really thank you for a life of devotion. I want to thank you for sharing your story so freely and beautifully. And I know I will be a part of your ongoing efforts, and I hope that more and more people continue to do so. And I want to thank you for being with me today.

Scott Harrison [00:58:04]:

Thanks, Darren. It was great spending time with you.

Darren [00:58:13]:

Scott's story is a profound reminder of what becomes possible when we reimagine the purpose of our lives. It's an extraordinary lesson in the power of conviction, the courage to reimagine and reinvent existing paradigms, and the persistence to work on the most pressing and challenging global problems of our time. It's also an invitation to each of us to find our own unique way to be in service to those in need. I look forward to being with you on the next episode of One of One. Until then, I hope you live and lead with courage, wisdom, and above all, with love.

In this episode of One of One, Darren speaks with Dennis Woodside, CEO of Freshworks. Dennis has had an extraordinary career journey, including beginning as a corporate lawyer, a consultant at McKinsey, a senior executive at Google, COO of Dropbox, and president of Impossible Foods. Today he leads Freshworks, an AI enabled software company focused on disrupting and powering the next generation of customer service and IT service management functions.

They discuss highlights from Dennis’s illustrious career, his unique ability to attract and grow top talent, and how his long history as an endurance athlete has shaped who he is and how he leads.

Full Transcript

Darren [00:00:02]:

Hi and welcome back to another episode of One of one. I'm your host, Darren Gold, CEO of the Trium Group. My guest today is Dennis Woodside. Dennis has had an extraordinary career journey, including beginning as a corporate lawyer, a consultant at McKinsey, a senior executive at Google, COO of Dropbox, president of Impossible Foods, and now CEO of Freshworks, an AI enabled software company focused on disrupting, empowering the next generation of customer service and IT service management functions. We spend time covering this amazing set of experiences. We explore Denis's unique ability to attract and grow top talent and we dive into his long history as an endurance athlete and how that has shaped who he is and how he leads. We had a lot of fun in this rich conversation and I trust and hope you will too.

Dennis, it's great to see you. Thanks so much for being here. I'm really excited about this conversation.

Dennis Woodside [00:01:08]:

Thanks for having me, Darren.

Darren [00:01:09]:

If my calculation's right, we go back a long way and I think it's 29 years. I think the year was 1996 when we first met.

Dennis Woodside [00:01:18]:

So I think that's right.

Darren [00:01:19]:

It's been a long time. We've got a lot of ground to cover. But it's so nice to be having this conversation given that history.

Dennis Woodside [00:01:27]:

Yeah, it's good to see you and yeah, it has been quite a while back in LA when we first met and we were both lawyers, so quite a different space now.

Darren [00:01:35]:

Yes, we were. That's probably a distant memory for you as it is for me, but a formative one nonetheless. But yeah, it's good to see you and you've had a pretty significant, illustrious, remarkable almost 30 year old career since then. And since those that are listening may not be fully up to speed, I'd love for you to take U.S. back to 1996, your early years as a lawyer.

Dennis Woodside [00:02:02]:

You know, it all got better after I met you, but, oh well. So I grew up on the east coast and grew up in Pennsylvania, went to school undergrad at Cornell and I was interested in the law actually was a competitive rower, was in contention for the national team which kind of got me into endurance sports and that became a theme throughout my life, but wound up going out to Stanford for law school. I think most important thing there is I met my wife Laura at Stanford who you know quite well and we'll skip back and forth, but if we were to fast forward to recently, you know, our kids wound up going to school together, which is quite a, quite a coincidence. But now met Laura at Stanford, decided to practice law for A while, wound up in LA working for a firm called Munger, Tulls and Olson, which is where I met you and your wife. And I remember you were practicing as well at that time. Is that right?

Darren [00:03:01]:

Yeah, I was.

Dennis Woodside [00:03:02]:

And where were you? Just remind me what I was at.

Darren [00:03:05]:

The second best law firm in la. You were certainly the best. I was at Irel. Irel and Manell.

Dennis Woodside [00:03:11]:

Irel. Okay, so. And I think you were litigator, is that right?

Darren [00:03:14]:

That's correct, yeah.

Dennis Woodside [00:03:15]:

Okay, so I think one of the first times, for those who are listening, that I met Darren. He was telling me about a case that he was involved in. I don't know if you remember this, but you know, we were both like 26 and I was like, so what do you work on? He's like, oh, I got this coolest case. I'm like, what is it? Well, you know how they at the time VHS tapes were a big deal?

Darren [00:03:39]:

Yeah. You're dating us here.

Dennis Woodside [00:03:43]:

One of the studios decided to save money and reuse VHS tape and somehow they over recorded like a feature film for distribution through Blockbuster, but it was re recorded on top of an adult film and they were getting sued. Do you remember this? Something like that.

Darren [00:03:59]:

Of course I remember it. It's close. Yeah, I was on the, on the. Yeah, I was the law firm representing. It was actually, it was not a motion picture, it was a Abflex, those ridiculous infomercial.

Dennis Woodside [00:04:12]:

Even better things.

Darren [00:04:13]:

It was their instructional video and went to some, some video duplication facility in the San Fernando Valley which happens to be the home of the adult entertainment industry. And rather than purchase new tapes, they, the duplicator used old tapes and it was an adult film. So it was. They showed up in targets, people would buy their thing, go home. The discovery on that case was interesting to say the least, but it brings back good memories.

Dennis Woodside [00:04:39]:

That's kind of one of the early stories of me meeting Darren and anyway, went on from there. One of the things that happened was that my wife went to McKinsey and I had been working on a bunch of. I was a corporate lawyer, so worked on M and A stuff and was always a little more interested in what the business people were doing on the deals that I was working on. And then she kind of got me meeting a bunch of people from McKinsey. That seemed like a pretty interesting path. And McKinsey was recruiting lawyers at the time. So I wound up moving over to McKinsey and I thought of it as sort of a, a way to expand my education, learn a lot about business also, I like the fact that law is a very local thing. You're licensed in a state. And I was very much interested in the more international aspects of things and wound up working a lot in tech. And that's kind of my first exposure to the tech industry. First for companies like Disney that were being disrupted by tech, and then ultimately for technology companies, early web companies. And one of the partners at McKinsey wound up going to Google. And I had used Google as a search engine, but didn't really think that it was. I didn't know much about the company at all as an actual company. And she said, hey, you're flying around a lot now. You might consider moving over to a company and taking a strategy role. And I need to hire somebody to do that at Google. And I was kind of skeptical because I worked with some startups before. I thought, I like, McKinsey's an organized place, there's a lot of structure and all that. But I went up, I met the Google team, and I was just really impressed. I met Eric Schmidt in my first. My interview panel. Sergey Brin interviewed me. Their cfo, Jonathan Rosenberg, who I'm friends with to this day, who headed up the product organization. And just the people that they had assembled in the company were amazing. And the activity level in the organization, you walked around the halls, it just felt really buzzy. It was still a small company. It was about 1,000 people at the time.

Darren [00:06:32]:

Yeah, I was gonna say that was not an obvious choice. And, you know, the other part of the story here is I was at McKinsey in the same office when you joined.

Dennis Woodside [00:06:39]:

Right, right. You went to McKinsey. Yeah, that's right.

Darren [00:06:42]:

I left to another, more conventional path. And when I heard you were going to this small startup, right, like in the wake of the dot com implosion bust. That's right, yeah. Right. I was like, what is he crazy?

Dennis Woodside [00:06:56]:

Well, that's what everybody said. I mean, there was. Of all the people I Talked to at McKinsey, there was only one person who said, that's a good idea. Everybody says a bad idea. So anyway, I listened to my instincts, which is lesson number one. Sometimes the people around you are biased by the experiences that they've had. And I just, I love the idea of helping build a company. That was what was intrinsically interesting. You know, when you're in consulting or law, you're seeing a piece of a company for a short period of time. But I liked the idea of being able to contribute over a sustained period of time. And Seeing what happened. And so my job was to build the strategy team and we didn't have one. So I hired from consulting firms, hired engineers, people who were smart analytical thinkers. One of the first hires was a physics PhD. We'd never done anything like that before, but super analytical I hired another. One of our first hires was a fighter pilot in the Navy who was literally a top gun pilot. And our jobs were to work on whatever Larry and Eric thought were problems that weren't neatly product or engineering or go to market problems. So an example was we helped Urs Hozel who built out the infrastructure for Google, all the data centers. We helped him build a supply chain. We didn't have a formal supply chain for how you built data centers. We worked on a project for Eric which was how could Microsoft screw us and what should we do to prevent that from happening? So it's kind of competitive dynamics and really interesting stuff. But one of the more interesting ones for me was I worked on a project around internationalizing Google. So where should Google have offices in the world? What should those offices do? And I remember I did this with Sukinder Singh Sukinder is now the CEO of Xero, which is like an Intuit competitor, Australian based, amazing executive.

Darren [00:08:47]:

She was on this show.

Dennis Woodside [00:08:48]:

She was on the show. There you go. So amazing, amazing person. And the project was okay, where should we go in the world? And we sort of split up the project and came back and said, look, there's 25 countries that really ultimately will matter for Google. And I remember Larry Page and this is like the power of thinking different. He's like, well look, we get searches in 196 countries. Why don't we take out the seven countries where we're not allowed to do business by law and come back with a plan to get into the 189 countries or the 169 countries where we're allowed to do business. And that's how we thought and we actually had to go back. We wound up hiring people in places where we had no near term commercial business like Nigeria and Kenya and Egypt, just to learn the Internet. And his whole thinking was if we learn what's going on in the Internet and how behaviors are changing, that'll make our products better over time and we'll be able to compete. And eventually all those people are going to be online anyway. So we did some really cool stuff. It was a lot of fun. But that project, eventually they needed someone to actually go build out those teams. And I remember Omid Kardistani was looking for someone to take one of the roles. Sukindra wound up doing egypac and Latin America and building a bunch of teams there, but there was Emea. So from Russia to South Africa, that was open and I kind of pitched myself. And he said, well, have you ever been to any of these places like the Czech Republic or Israel or Turkey? And I was like, no. Like, do you ever speak any languages? No. He said, well, you know, we're gonna find somebody who actually has done this, so come back, you know, come back when there's something a little bit more suited to your skills. And like two months went by and they couldn't find anybody. And it was like priority number 10 for him, I'm sure. And I convinced him to give me the job. So I wound up moving into sales and my territory was from Russia to South Africa and over the course of a couple years opened up like 13 offices across that region. Every, every we lived in London and every Monday I'd fly to a new country. So that's how I kind of got started in tech and in Google.

Darren [00:10:48]:

What was it about you, do you think, that convinced him to take a leap of faith?

Dennis Woodside [00:10:53]:

When you're in a fast growing company and there are people who have been successful, sometimes knowing the context of the company is more important than knowing the domain of what you're going to go do. And in this case, I think you probably figured it's kind of a low risk. We don't have anybody in any of these places. Now I trust him and he has a good plan. Let's see what he could do. I think that that's, that was kind of the thinking behind it and it was an amazing job because, you know, part of it is hiring and building teams in completely different cultures. So we had a Turkish team and an Israeli team and an Egyptian team. Right, let's talk about three different cultures. We had Polish leaders next to Ukraine and Russia. Right. All, all on the same team. And so building a team in that environment. And most of the people who would join Google were a little bit, they had a little bit of a creative streak. They weren't in the mainstream or they had a reason to believe in the mission. So the person who headed up our Polish office, his parents were detained by the Polish police when he was a kid for disseminating information that was against the, you know, at the time, the communist state. So the idea of working for a company whose whole mission is to free information and get it into the hands of everybody, that's really compelling and so we would find people like that that had a compelling reason to join the mission. And then it became easy. If you hired a mercenary, it didn't work. If you hired a missionary, it worked really well.

Darren [00:12:21]:

Nice. That's a good distinction. Yeah.

Dennis Woodside [00:12:23]:

So anyway, that's how we got started and I wound up moving into more of a traditional sales role. The UK sales role opened up and that was the biggest role outside the US in sales. That was more selling to if you know any of the UK business like Marks and Spencer and Harrods and the traditional companies and convincing them of the power of the Internet because the Internet was still young. This is 2009, 2008 and then building a team that could evangelize what we were doing with ROI driven advertising, search advertising, which again at the time was all new. That led to be a role in North America where North and South America, which was the biggest region for the, for the company where I led all the field sales teams. Now you're talking thousands of people, billions of dollars. And I took that role right in the middle of the financial crisis where our revenue, this is, you know, now it's hard to believe this but Google's revenue growth went from like 30% to zero. Our stock went from like, I think it was 700, went to 120. So it was, you know, this was total crisis in the economy and our goal was to get the company back to growth and to really kind of get on the forefoot of accountable advertising in a downturn and, and we redid a lot of things about how we went to market and wound up driving growth from that role as well. So lots of, I mean Google's amazing experience.

Darren [00:13:45]:

You're really leading at scale at this point in your career.

Dennis Woodside [00:13:48]:

At that point. Yeah, at that point definitely leading at scale, working with some amazing people. I work very closely with the CFO of Google, guy named Patrick Bashette. I work with Nikesh Arora, who's now the CEO of Palo Alto Networks. So learning from people who are world class all around you, super important because Google at this point is off to the races. Public growing really quickly, able to recruit amazing people into the organization who then go on to amazing leadership roles as well. And now it's all about like how do you find world class people, build a world class team, how do you scale that world class team, put the process in place to drive performance, build relationships with your partners and your customers that are lasting and benefit them. All that stuff comes more into play in that role. Both the UK role, but the Americas Role was really the first role where it's literally thousands of people on the team.

Darren [00:14:42]:

Yeah. So I'm interested to understand your emerging leadership style, approach, philosophy and how would you describe that? I'm also going to imagine that if I ask you that when we get to the present day, there's probably some evolution in that. But if you wind the clock back 15, 16 years ago, you're leading at scale. How would you describe yourself as a leader? How do you think about leading people at scale at that time?

Dennis Woodside [00:15:08]:

Yeah, I think so. I think it's just different in different phases. In that first kind of that emerging markets role, it's finding the evangelists and the missionary. When you got to the Americas, you need people who can think strategically longer term. Also are focused on their talent and how do they build their talent, how do they create consistency in the process of how they run the business so they create predictability for their teams because people thrive, thrive when they know what's expected of them and they know when is it expected, how is it expected. That kind of consistency of performance. That's very different than a super early stage startup where everything's changing all the time. So a lot of it was finding people who, who had that and then finding complimentary people. So I, you know, one of the people that wound up working for me was named Benita Stewart. And Benita I gave, she wound up running all of the businesses or the, she had the customer base that was not quite ready for the Internet. They didn't have. You couldn't buy the products online, like automotive as an example. But she came from more of a branding background and I did, I didn't come from that background at all. So she was able to complement our team overall and bring a set of skills and characteristics that we just didn't have into the organization and then hire a bunch of people like that, which when Google got into YouTube and video and more brand building ad formats became super important. I also like taking people, you know, the thing about a growth company is you get very ambitious people and people are always looking for a challenge and I always like to find people who kind of raised their hand and said I need a new challenge and try to find them that challenge. I took that as my personal goal. And I remember there's a guy named Jason Spiro who was super talented salesperson, kind of raised his hand and we said, well, I said, well why don't you, you know, mobile's a new thing, mobile advertising is a new thing. Why don't you run mobile advertising and he just, he knew nothing about mobile advertising, but he learned it and he just threw himself into the role and it became a huge, huge boost for his career and also for the company. So at scale, you need to constantly be cultivating leaders who can help you and who can, who can drive the business forward. And your job is really as a talent manager more than anything else because you don't directly, you know, influence thing. You don't directly sell that much. You're relying on the people around you to do that.

Darren [00:17:31]:

Yeah. Okay, so your career at Google takes a little bit of a turn at some point soon, is that right, in terms of your next role?

Dennis Woodside [00:17:40]:

So I'd been in sales for a while and I was like, well, you know, I'd like to do something else besides its sales. And, and I've been talking to Nikesh and others. And by coincidence, Google wound up buying Motorola Mobility. And the story behind that was Google had acquired a company that ultimately built Android. The operating system put Android out into the world, had gathered a bunch of partners like Samsung and LG to build their devices on top of Android at the time, you had iOS, you had BlackBerry, you had Windows Mobile, you had Nokia, had an operating system. So the operating system environment for mobile was very fragmented. And Google's strategy was, we're going to open source Android, it's going to be free. And the only catch will be you'll need to take. If you want to use Android as your operating system, you'll need to participate in our marketplace and make Google search a default, make YouTube a default, and so forth. And that strategy worked really well, except that Google got sued by all the other operating systems for IP infringement. And Google didn't have a habit of patenting its own ip, so it didn't have anything to defend with. And as a lawyer, you'll kind of understand this. So its choices were to its partners were going to get sued potentially to the point where they would not find Android attractive and Android would die. Or Google could defend by going out and finding IP and then using that IP as a defense. And that's what it did. So Motorola had been a struggling mobile device manufacturer that was recently spun out of the bigger Motorola corporate. There's a long story there. There was a corporate activist, Carl Icahn, who was a big shareholder, who was actively pushing the company to sell, but based on the IP that it had, and ultimately Google bought the company for 12.5 billion. And with that, with the IP came 20,000 people, came a business that was losing a billion dollars A year and was actually more than one business. It made mobile handsets, it made set top box devices, and it made infrastructure for the cable industry. So very different set of businesses and very different than what Google had ever done. And Larry asked me to kind of put my strategy hat back on. And as a secret project before we closed the deal, we had signed a contract, but we had to go through the regulatory process, figure out what's the strategy for this company, what are we going to do with the actual operating unit. So we kind of came up with a strategy and we knew from the beginning that the business that was in cable, set top boxes, cable infrastructure, that was exactly opposite of the YouTube strategy, you could not actually own both of those. Your customers would go away. And so we decided from day one we were going to sell that business. And then that left the handset business. And there was some potential synergy like there was some talk about, well, we should compete directly with Apple. But there wasn't consensus, I would say internally as to what we should do with it. And I ultimately became the CEO of the company. And so the day that we closed, all of the Motorola employees, they were technically Google employees, but we, we managed the company as if it were just a wholly owned subsidiary of Google. Google owns the shares, but we did not integrate the company in any meaningful way because we couldn't, we didn't want the partners of Android to feel we were competing against them. But as a result, Motorola didn't have much strategic advantage of being part of Google and we had to compete on our own. So we wound up building a new team there again bringing in a lot of new talent, bringing the company from the smartphone era where it was the, I mean this is a very proud company that had shipped the razr, which was at one time the best selling phone in the world. And all of a sudden iPhone comes around and they're way in the rearview mirror. So we had to bring them into the smartphone era and very drastically simplify their portfolio and figure out a bunch of product stuff. And culturally it was super hard because you have people who were used to like five years ago, they were the leader, they were one of the technology innovators. And iPhone comes out and all of a sudden it's all different, right? Android comes at Samsung, gets in the game, it's, it's a completely different competitive environment. So you have to explain, do a lot of explaining as to how we're going to improve and what we can do. And I had to explain what Google's relationship was With Motorola, it was, it was a very hard job. We'd lay a lot of people off because we're losing $1 billion a year. Like that was not a sustainable business even for Google to kind of hold on to. Or to. Yeah, to, to continue to sustain those losses. So ultimately I remember talking to Larry and saying, look, unless we're willing to invest a lot more money and you know, make our own screens, make our own cameras, we should not be in the business. And we wound up selling, selling the business to Lenovo about two and a half years after. After buying it.

Darren [00:22:35]:

Yeah. Any big, other than maybe whether to buy it. Strategic considerations. But in terms of your, your leadership, your evolving leadership approach philosophy, were there some lessons from that period of time in particular?

Dennis Woodside [00:22:50]:

Well, I think in retrospect I was definitely naive about having consensus among the team as to what the longer term game plan needs to be. And I think that, I sense that we didn't have that kind of consensus, but maybe it was an aversion to conflict, but I didn't lean into it and really make sure that we all had a alignment on what's the long term plan. Are we going to integrate this company in with Google? Is it going to become part of Google or is the plan. We really just want the IP and we want to kind of move on from there. So I think that was definitely a lesson in. Okay, you need to walk into situations with your eyes open. You need to make sure everybody's aligned and what's the long term goal? What is a win here? Because it took a lot of work after the fact to figure all that stuff out. And the other thing is that some situations are just very hard to come out and really declare a clear win. When you're the number five player in a hardware market, it's really hard to compete. It doesn't matter what the leadership team looks like, who they are, it's hard to compete. There are some businesses that are just really, really tough.

Darren [00:23:57]:

Yeah. So does that bring your Google career to an end? And at some point you're. I know we kind of reconnect in some ways professionally.

Dennis Woodside [00:24:04]:

Yeah, that's right. But yeah, so, yeah, so I wound up going to. So I was introduced to Drew Houston, who is the founder of Dropbox somewhere along the way and once we had sold Motorola, he kind of started reaching out and saying and talking. And I always liked the idea of helping a founder like scale a business from a really early stage. And I was at Google early but I wasn't working directly for Larry and I wasn't like there at the genesis where they were really trying to figure out a bunch of things from first principles and create a lasting business. So I like the idea of doing that and helping a founder do that. And I had the background to do it. So Drew and I just started talking and you know, Dropbox at this, at that point was maybe 200 million in revenue, but just a skyrocketing business where this notion that now it seems like obvious and we're so used to it that it's not as revolutionary in our minds. But at the time, all of our information was on a hard drive and we have multiple hard drives. So you could have things on one computer that the other computer didn't have access to on your phone. It was really a pain. And people would walk around with thumb drives and all that. And his whole idea was, let's put all that in the cloud, make it super easy to sync information, share information. Much easier. And he was first to build a product that did that. And coming from mit, he had the technical chops to engineer a solution to a very, very hard problem and he was off to the races. But he also realized that he wanted to build a multi billion dollar business and he needed to scale well beyond the technology, all the different functions that you need to build a lasting org. So he and I started talking. I met Arash, his co founder and they brought me on as a COO and what that means a lot of things in a lot of places for us. I had everything other than engineering, product and design, which reported directly to Drew. So all the go to market functions, hr, comms, marketing, that sort of thing were with me. And basically we just got about kind of building that business up and creating another product line which was focused on businesses Dropbox for teams, which is a big driver of their growth today, doing all the things you need to recruit a team that can take a company public and then ultimately going through the process of positioning the company with investors and going public in 2018. So that was an amazing experience as well in recruiting leadership who wanted to be part of growing a business, building a business. We brought in some amazing people there as well. I always view my job as like, first thing I have to do is build the team around me. That's a really amazing team with amazing people. Some of the people we wound up hiring, like Arden Hoffman was our Chro. She came from Google. I worked with her a bit, but she's now the Chro at General Motors, one of the biggest companies in the world. And think about that job is incredibly hard. You're dealing with unions, you're dealing with the same kind of war for talent that you're dealing in the tech industry. Just a super versatile, amazing executive. Yamini Rangan was also on the team. She's now the CEO of HubSpot. So it's a lot of fun to look back and see people who kind of, you put in roles. Obviously you knew they were going to be successful, but then you had no idea how successful they were going to be. And to see that happen has been really rewarding.

Darren [00:27:16]:

Yeah, I'm starting to see this theme around having a discerning eye for great talent and then creating sort of breakthrough growth opportunities for them and then to sort of see the dividends years later has got to be very fulfilling for you.

Dennis Woodside [00:27:29]:

Yeah, I think giving people, putting them a little bit over their heads and recognizing not everybody's going to be able to handle it. But for those who are, often it's a breakthrough experience for them and often you get way better results than handing something to somebody who's done something five times.

Darren [00:27:45]:

Yeah. So I want to keep going and get to the present moment here. I know there's a stop between where you are today and where you are now, but let's get us there and then I'd love to get into bringing to life like you as a leader, but let's complete the kind of the career journey here because it's just a fascinating one.

Dennis Woodside [00:28:01]:

Sure. So I gotten to know Vinod Khosla who's the Khosla Ventures and co founder of Sun Microsystems. He, after we went public, he was like, hey, you got to work for one of my portfolio companies. And I, I talked to him for a while and eventually introduced me to the founder of Impossible Foods. And this was back to sometimes businesses are really hard for a reason. But this was completely different. The whole idea is that you can re engineer meat from plants that's as nutritious and delicious as the animal, but that's healthier and at lower cost to the environment. That's the thesis behind the company and they've done reasonably well. So I went in and helped him scale that business to a couple hundred million in revenue. But at the end of the day, the challenge for that business going forward is a consumer marketing problem, which I am not the expert on. So how do you change consumer behavior? That's the hardest thing that they have to do the product in blind taste tests. It's very, very close to the animal. The nutritional value is actually better. But how do you convince people who are used to eating animal meat to eat plant meat? That's the challenge. So wound up bringing in a CEO who comes from that world, came from Chobani. And then I left to join freshworks.

Darren [00:29:14]:

Yeah. Again joining another founder and Yirish. And so that's three years ago that you joined. Tell us the arc of that experience so far because you're now leading it and have been, I think, for a little over a year.

Dennis Woodside [00:29:28]:

Yeah. So Juris is an amazing founder. He did not go to Stanford or mit. He grew up outside of Chennai, India. And Chennai is not the tech hub of India. Chennai is like the Philadelphia of India of an industrial city. Its former name is Madras and there was a lot of textile there kind of back in the day. It's a port city. And he grew up and he saw technology changing India early on with the Internet. He started a company to educate people in Java how to program Java. That was his first company. He wound up getting educated mostly in India, but then working in the US for a business process outsourcing firm, which a lot of, you know, those were the first tech jobs that were coming out of India. And he wound up educating himself on product management, the art of product management. He was a sales engineer by early training, so he spent a lot of time with customers, but he also spent time with the engineering and product teams. And he had this idea for when SaaS became a thing for a customer support tool that any company in the world could use that's entirely SaaS based, which was unique at the time. There weren't tools like that or there weren't many at the time. So he left his company, which was Zoho, which is another tech company in India, and started freshdesk at the time as a customer support tool for any business in the world. And his first customer actually was from Australia. So from day one, they were an international business. His thesis was, anybody's going to be able to access software made in India. So let's build software here. Let's create a global business. And it worked. The product took off. He wound up going from a product for support and SMB to support and larger businesses. So today, you know, companies like Klarna in B2C and Discover cards in B2C and big divisions of Airbus in B2B use the same Fresh Desk tool that he built back then. And he also saw that being pulled into it. And so he built a separate product called Fresh Service, which is for any IT department. Every IT department has at most have. Have something called An IT service management platform. It's how they answer questions, receive questions from their employees, escalate issues and problems and ultimately resolve those problems. And so that's what he built and, and those products took off, took the company public in 2021 and then we met in 2022 when he was thinking about bringing someone in who could help him scale the company to the next level. So I joined in September 22 as president and there was some thinking that over time Gears might want to do something slightly different. And then I became the CEO just in May of last year.

Darren [00:32:13]:

Got it. Well, congrats on that. Congrats on, you know, an incredible three decades of your career. It's hard to, hard to believe because.

Dennis Woodside [00:32:21]:

We'Re in that third. Right?

Darren [00:32:23]:

Yeah, exactly. I want to bring to life you as a leader and sort of three dimensionalize you a bit. For listeners that are curious, what is it like to be led what is it like to be part of a senior management team or part of a company that's led by you? Maybe in the current company, freshworks.

Dennis Woodside [00:32:43]:

So freshworks. So just to finish that kind of what we do. And then I'll get to the leadership side. So we compete in two spaces, customer support now and IT service management. We provide an AI enabled product to enable any customer support or IT team to provide world class service to their employees and their customers. And we've got 73,000 customers around the world headed towards a billion in revenue. I like to say we compete with, and this will get to the personal side. We compete with about 500 billion in market cap. So our top competitors are ServiceNow, Salesforce, Zendesk, Atlassian and HubSpot. My friend Yamini runs HubSpot. So those companies combined are well over 500 billion in market cap. Our market cap is about 5 billion. So we are the upstart, the challenger that's trying to disrupt that space with a product that's easier to use, faster time to value. It's about half the cost of our competitors. And my view in that world is we have to think of ourselves as competitors. We have to train as competitors. Every situation where we're in front of a customer is a situation we can advance the ball in the right direction or we can kind of go backwards. And so what I've tried to do is bring that competitive spirit, that competitive ethos, which also kind of is my background from the triathlon stuff, which I'm sure we'll, we'll get into. But that is really important, I think in a business like ours. You have to, you have to show up and be willing to compete and be willing to learn and think like an athlete. And you know, world class athletes always talk about being coached and trained and learning and adapting and then, you know, understanding that you're not going to win every, every game you go into, but when you don't win, learning from it, coming back and then going out and winning. And so I think that's a very different company than let's say I'm working for Microsoft today or I'm working for Google today. You know, Google's not going to win, not going to lose many, many deals at all. Microsoft's not going to lose any deals at all. So you're not going to learn the same things that you're going to learn in a company like ours where you're really trying to build the business in a way that hasn't done before. We're constantly going after bigger deals, bigger companies, companies that feel like they're too big for where we are now. That's what I want. Those are the situations I get involved with because that's where you learn the most. So that's the ethos that I've tried to bring, is that you have to compete. I like people who have been in competitive sports team environments because they have that ethos, they have that competitive drive and they also, they understand they're not going to win it all the time and that, you know, some people who haven't lost, when they do lose, it really hurts them and you need to be resilient and able to bounce back from that and brush it off in order to be able to be competitive. You talk about like Girish is a good example. You know, his, his first business ultimately failed and his second business ultimately failed. But here he is, he's probably one of the most famous entrepreneurs in India having built what is now a, you know, billion dollar software company.

Darren [00:35:39]:

Yeah, I'm picking up there's an intensity to that way of leading. Right. Holding people to really high standards, setting the bar really high. Is that true for you? What does that look and feel like in the everyday?

Dennis Woodside [00:35:54]:

I think what I like to do is find other people, surround myself with people who also have the same commitment to doing things the right way. And then it's less on me. Right. I think the team that I built at Fresh, the team I built at freshworks, the team I built at Dropbox, like the people on that team, they had high standards before I ever met them. And so it wasn't about me teaching them how to have those high standards. They kind of brought those in to begin with. And so then it's about coaching them and helping them be successful in their role. And a lot of what I do at this level, when you're the CEO, ideally you have a team of stars who are absolutely amazing in their function and your job is to help them execute as a team. And that's very different than when you're kind of like lower down the organization and you have to teach people their jobs. I don't have to teach my CFO how to be a cfo. What I have to do is create the environment where you can be the best possible CFO and work well with our head of sales and our head of marketing and be successful as a team. That's where I spend more of my time. Are we creating the right environment for the team to be successful and for all the individuals to be successful within that team?

Darren [00:37:02]:

And how much of this ethos was in place when you joined in 2022? How much of it needed to be built and what was the process you went through to evolve the culture to the extent it needed to be evolved?

Dennis Woodside [00:37:14]:

So Girish had absolutely similar focus on team. He talks a lot about team sports. He's very involved in the community around Chennai to the extent that he has started a soccer academy for young kids who otherwise wouldn't have the opportunity to. To kind of learn soccer and develop. His goal is to create players who can play on the national team. So that's. He is very, very goal oriented, very team oriented. I think the shifts that we've made, you know, in an entrepreneurial business, success often comes by trying a lot of things and seeing what works. But when you get to a certain size and scale, you have to try things that have a good probability of being like hits like I need to find the next hundred million dollar business. That's I was with our product team today. It's exactly what I challenged them like we have, we already have a line of sight to multiple new hundred million dollar businesses in our portfolio. But we need to find the next one. Right. And so I think one of the things that we've changed is we can't fund everything. We have to be a little bit more thoughtful about funding big ideas that have the opportunity to make a big impact on our customers and solve bigger problems. So that means you need to be a little bit more thoughtful about longer term strategy and planning. And sometimes you can't be as quick to change course in that environment. That's the kind of change that I think I've brought. And you also have to think at a different scale. We have close to 5,000 people now, and the people who are on my leadership team, three of them, lead roughly a thousand people each. So the scale of how they lead is very different than when we were a younger company. So I wouldn't say it's a massive change. It's just a, a refinement of the path that we were on that Kanagira set us on.

Darren [00:38:59]:

And are you methodical about this? Take your time, you're gradual. Or do you hit things sort of like head on and are sort of demanding of change immediately?

Dennis Woodside [00:39:10]:

I think it's a little of both. I mean, you can't, you have to know when to say, hey, we're doing this and we've talked enough, let's go. But at the same time, for my team to be effective, I need to make sure that they are all aligned on the direction, the right direction to go in and the choices that we're making. And so we spend a lot of time as a team talking about what are the actual choices that we have in front of us and how do we think about the different paths that we might take before we completely commit and dive in and go. So I think that planning phase and process and being methodical, soliciting people's views, often you hear things that you didn't think of in that process. I think that's super important before you just fire off and say, go, I'm not. Rarely am I just like making a decision off the cuff. CEOs shouldn't need to do that. That's not the job. The job is to create the environment where collectively you can make the right decisions that pay off over time.

Darren [00:40:08]:

Is there anything unique about this role of being CEO? I mean, putting aside the Motorola Mobility, which was earlier in your career, and maybe a bit of an outlier, you know, in terms of, you know, your experience. Anything that, you know, being at the helm of a company at this size as CEO for the last year and a half, that's unique, perhaps surprising or different than you'd experienced before.

Dennis Woodside [00:40:30]:

I mean, I think one thing that's unique about us is so we have, like I said, about 5,000 employees, about 3,800 of them are in India. Yeah, company was started in India. All of our, nearly all of our engineering, nearly all of our product development happens in India. And that gives us tremendous advantage because we have a talent brand in India for getting world class engineers into the organization who can build and ship products Globally, you're not working on like an unimportant product. You're working on our core product in India. Whereas if you go to work for some of our competitors, you're going to work on for the periphery. And so that's super important for us. It allows us to move fast, There's a cost advantage. All that's. But it also creates like a lot of. It's just different. Right. Because we do meetings, like typically there'll be meetings going on at 6 in the morning through 10, because that's the evening for India. And our teams in India prefer to work evenings. But like after I'm done with you, like there's nobody. It's the middle of the night in India, so there's nothing going on there. So you have that aspect and that particularly affects teams like product management and engineering, where the teams are largely not here, but a lot of the leadership is here. The customers are all here. Right. So all the customer interaction is here. And we need to be close to the customer, we need to be spending time with the customer. So that's a unique challenge when you have development so far from the kind of the majority of your customers. And we spent a lot of time trying to figure out how do we create that intimacy between the engineering and product teams and the customer in this sort of setup. I think the competitive dynamics in this space are unique. I mean, it's got to be one of the most competitive software, one of the most competitive industries in the world. And the talent that is arrayed in the industry and sometimes directly against you is just incredible. There are very few companies that you can say, oh, they're really a laggard, they're not going anywhere, they're kind of on their way out. There are those companies exist. But software is such a competitive space and so that dynamic is interesting. It's always changing. AI completely has changed every software roadmap from every player in the industry in the course of the last 18 months. And that's unique, I think, about the space and about the industry. So I think all those things are quite interesting, quite unique to the situation, to freshworks and where we are.

Darren [00:42:56]:

Yeah. And about the role itself, though, as CEO, anything sort of that presents a unique challenge or.

Dennis Woodside [00:43:04]:

Well, I mean, I think so most CEOs are coming up through a function. Right. So for me it was sort of strategy and then sales. And so you deeply understand that part of the organization. And I think a lot of people's biases is to, when all else fails, go back and try to do the function that you used to do better on behalf of the leader who's actually supposed to be leading that function. So I think you have to get away. I got away from that pretty quickly. I had to do that at Motorola, where, you know, I had not done anything in the mobile business before, so it was a little bit easier. I had to do that at Dropbox, because in each of those roles, I have multiple functions reporting in. It wasn't like I was head of sales at that time. But I think that's the thing that you have to. You have to kind of quickly get away from, and then you have to start thinking about, well, what decisions should I be making versus what decisions should I. Should the team be making? And if I make them, it actually, you know, disempowers the team. I think that's really important to get right. The stakeholders that you are dealing with are just, you know, they multiply by a factor of 10. Because you've got investors who you're somewhat distant from. You can only interact with them. And we're a public company. The way you interact with them is constrained to some degree by law. You've got your directors, you have more interaction with them, but they come in, you know, maybe six times a year and are truly spending intensive time with you six times a year. So they're not going to be as understanding of the intricacies of the business. At the same time. Our board's amazing with people with CEO experience and multiple different industries, and so you can rely on that a lot, and it's good to tap into that. But you've got that aspect. You're constantly engaging with customers and partners. And a lot of the job is to bring what you learn from the customer conversations and the partner conversations back to the team, both the good and the bad, and help them understand. You guys are doing great on these areas, but we got to figure out our support motion. I'm hearing a lot of complaints about not being able to get in touch with people or whatever it might be. So I think the job is unique in that you're not a master of any single function. You're not expected to be, but your real job is to help that team be as effective as possible and. And make the right collective decisions for the business.

Darren [00:45:15]:

So can we go back to the competitive endurance aspect of you? You said you were a competitive rower and have been a triathlete for some time. Tell us a little bit more about that part of who you are and how it's influenced you.

Dennis Woodside [00:45:30]:

After rowing, I was a good endurance athlete. But it's hard to row when you're not, you know, when you're not in college. It's just not a sport that many people continue with. And so a friend of mine at Stanford was like, hey, let's enter this triathlon. It's down in San Luis Obispo. It was called Wildflower. So we signed up for it, not knowing what we were getting into. But I thought it was really fun. There was all these people who were kind of like minded, was competitive, but also social. And I just sort of started just entering these things and then, you know, as life goes by, it goes on and off. Like there were years when I didn't do anything. When our kids were little, it was more about spending time with the kids. And then they started getting older. I had a little more time. I got back into the triathlon thing. And so at this point, I've done over 100 triathlons, but I've done the Ironman 17 times. I'm going to do the 18th in October. And it's like anything else. If you stick with it long enough, you get reasonably good. So I've gotten pretty good at them. I usually finish in the top in my age group and usually close to the top overall. For me anyway, I like the reward of competing and actually coming close to winning. And also the reality of, okay, I didn't do so well. Why, what could I do better? So I did a race this past weekend in Central in Harold, which is like the middle of nowhere, it's kind of cattle country in Central California. And I usually win and I didn't do that well. And I was like, well. And I've got another race on Sunday, so what can I do between that race and the Sunday race to improve? What are the things I need to change? And I like that kind of puzzle outside of work where you're, you're challenged but you know, you've got. You've got something that's healthy, obviously, but it's also at this point more about. To be honest, it's like, how long can I actually be good at this? At some point, not gonna be that good at it. And then my daughter has gotten into it. So she has done a bunch of races. She's done the Ironman once, she's done a half. I think she's done two or three halves. So every now and then she'll jump into a race with me, which is a lot of fun too. So it's just been something. I've stuck with it's a good, the training is a good time to think too because as a, as a CEO, you know, you're. I'm constantly looking at my screen of some sort. There's always new news. You got to digest what's going on in the world, what's going on in your business. You've got customers contacting you, so. But when you're on a bike, you know, I'm not looking at a phone and it's a good time to think about, okay, what, what do I need to accomplish? What did I miss? What could I do better? What am I going to do this week? What happened last week that went well? You know, it's a good time. Even if you're not consciously processing information, I think subconsciously it's good to have that time where you're just not looking at a screen, you're not talking to anybody. Pretty much you're just thinking maybe listen to a podcast or listen to music and you're outside and enjoying it.

Darren [00:48:13]:

Yeah. I'm curious what your sort of daily routine looks like. How do you squeeze this in?

Dennis Woodside [00:48:18]:

You know, it's not like it's a regimented thing. My work routine dictates whatever the workout is. So today I actually had time. Usually I don't have time in the morning because we start so early here. Usually I have time in the afternoon, but today I didn't start until 8. And so I actually got on my bike. I needed to make sure that the bike is ready for the race. So I needed. And that means I needed to ride it in a certain way outside. So I did that in the morning and I've got a dinner or a drink with a customer. So I don't think I'll get anything else in. But typically it's the afternoons during the week, maybe an hour to two hours a day, Monday to Friday and then weekends are when I put the real time in. So I could do a five hour ride on a weekend, a two hour run, that sort of thing. But the main thing is consistency. You have to do this for. If you want to be good at it anyway, you have to do it for like a long time. Like it's not like a, hey, I'm going to build up for this thing in three months. To do an Ironman, you have to kind of build for it. If you want to do it and actually feel decent, you have to build up for 10 months and you pretty much need to train year round in my view. And so I've just been training continuously since we moved back From London, which was 2009.

Darren [00:49:26]:

Yeah. This theme of endurance, I think, sort of has run through your life and your career, and has it always been part of you? If you go back to the younger version of Dennis, I don't know endurance.

Dennis Woodside [00:49:38]:

It sounds like you're enduring something painful or bad. Look, I read Bill Belichick's book, and I don't know if you've read that, but it's worth reading. As a coach, I didn't know what to think of him, but when you read the book, you really understand it. The commitment to being really great at what you do is not a, hey, I'm going to wake up one day and decide that's what I'm going to do. He decided early on that he was going to be an amazing football coach. And he dedicated every hour of his work life to figuring out what did he need to do, who did he need to surround himself with, to becoming who he became. And so I don't think he thought of that as endurance. I think he thought of that as, I have a goal, and if I want to achieve the goal, then I have to. You know, I need to do these things. It's not even I need to. I want to do these things. So for me, I never. I used to early on, like, when I was training, I would think, oh, I have to do this. And some days, yeah, you're tired. I have to do this. But increasingly, I just feel really. I guess, I don't know if the word's honored or lucky. Fortunate to be able to do this. And I see friends who can't for health reasons or whatever. And so whenever I find my mind saying, hey, you have to do this, I kind of say, no, you don't. You're choosing to do this because you like the sport. Ultimately, you like kind of what you like to compete, and you like to compete, and not just compete, but actually to win. And so I think that that's a different. That's something that I've realized over time about how I think about things. And, yeah, I don't think of it as endurance at all, though.

Darren [00:51:13]:

Yeah, it's a great reframe. I'm curious, does this apply equally to your leadership and being the very best CEO? Do you carry the same sort of ethos into that?

Dennis Woodside [00:51:23]:

I think you have to. I mean, I think you have to. I think you owe it to the people around you. Like, I've hired most of my team now, and I don't want to let them down. And so I have to do my job as best as I can. And that might mean you do things that you're not as comfortable with or you have to learn new skills. I've had to learn the whole investor relationship side. I sort of had that at Dropbox, but not as much. So we are trying to build the brand. How do we build the brand in a world that's so noisy? That's a set of skills that I've had to learn. So I think they expect their leader to be learning and getting better. Right. Just as I do of them. And so I think that that ethos is really important. And if I think about leaders, who I've learned from. Yeah, I was talking to Nikesh, Nikesh Arora, who is the CEO of Palo Alto Networks, super successful security software company. He was at Google with me for a long time. I could see him from the time I met him, you know, in 2004 to where he is today. And that's like huge growth and that, you know, you got to respect that. And also there's a lot to learn from seeing someone else go through that path.

Darren [00:52:31]:

Yeah. If you project out five years from now and imagine we're having this conversation in 2030, what would you want to be true about yourself and how you lead?

Dennis Woodside [00:52:42]:

Well, I think what would be really fun for me is if we are, as an organization, are as competitive as we can be, and that leads to amazing success in the marketplace and recognition that we are serving a need and truly transforming our customers in a way that no one's doing now. So I think that in five years that ultimately there is a scorecard. Right. There are wins and losses. And in the tech industry, winning is growing the business. And so in five years, I think, okay, we should be a multi billion dollar company or billion now. We should be clearly multi, multi billion dollar company. And we should be affecting a large number of customers, important customers around the world, helping them run their business, perceived as a leader in AI, perceived as a employer that people want to work with around the world. Those are the kinds of marks of success that I think we can achieve. And what's great about our phase is that that can happen rather quickly and it hasn't already been done. Right. If I went and said that if I were working at Google, that's already been done. It happened years ago. So you can't really do it. You can only do it in these companies that are at this kind of phase of growth, which is why this is the kind of company I want to work in.

Darren [00:54:03]:

Yeah, it's wonderful. Well, We've covered a ton of ground. 30 years of your career, aspects of your personal life, your professional life. Anything we haven't covered that you think would be important for us to.

Dennis Woodside [00:54:15]:

Yeah, I have to have my other story about Darren, so maybe this goes and we should have a. I should do an interview of you. But I remember when we, when we were working together in LA and we were lawyers, you were like, there was some job. I don't remember exactly what it was. And they were like, yeah, that, that, that job pays $200,000. And you were like, $200,000? I will bang on a pack of rocks all day long for $200,000. I was like, that image stuck in my head of you with like a hammer just banging on a bag of rocks all day long.

Darren [00:54:50]:

So that's, that's funny.

Dennis Woodside [00:54:52]:

You might not remember that, but I.

Darren [00:54:53]:

Don'T remember and I'm not surprised given, given my upbringing and money motivation of my 20s. But that's really funny.

Dennis Woodside [00:55:03]:

That's my other story.

Darren [00:55:06]:

And anything else about you that you'd want to make sure you bring into the conversation.

Dennis Woodside [00:55:10]:

I think we hit everything.

Darren [00:55:11]:

Yeah. Okay. Well, I've, I've so appreciated our friendship and watching your career evolve and so glad that we got to get into this conversation so that we could share for others the secret to a lot of your extraordinary success. I want to thank you and thank you for the, for the time, Dennis.

Dennis Woodside [00:55:31]:

Thanks, Darren.

Darren [00:55:38]:

What a treat to cover the three decade journey of such an accomplished leader, particularly given our friendship and history. I learned a lot in this conversation, but the one thing I'm taking away is the responsibility, almost sacred responsibility that Dennis appears to hold as it regards his privileged role of being a CEO. I hope you got a lot out of this conversation and I look forward to being with you on the next episode of One of One. Until then, I hope you live and lead with the same sense of responsibility and privilege and as always, with courage, wisdom, and above all, with love.

Listen Here

What does it take to turn your business into a masterpiece? In this episode of One of One, Darren speaks with Charles Spinosa and Christopher Davis, a co-author and contributor, respectively, to the incredible book, Leadership as Masterpiece Creation. The book invites leaders to think about themselves and the companies they are building as masterpieces: works of art, worthy of admiration. The book boldly and courageously advocates for a contrarian model of leadership and business building.

This isn’t your typical business conversation. How often do you hear St. Augustine, Milton, Shakespeare, Nietzsche and Heidegger referenced as guidance for how to lead more effectively? Listeners are invited to be patient, listen closely, and ask “What would it look like if I were building a true masterpiece?”

Full Transcript

Darren [00:00:02]:

Hi, everyone. Welcome back to another episode of One of One. I’m your host, Darren Gold, CEO of the Trium Group. My guests today are Charles Spinoza and Chris Davis, a co-author and contributor, respectively, to one of the most impactful books I’ve read in the past five years, Leadership as Masterpiece Creation. The book invites leaders to think about themselves and the companies they are building as masterpieces. Works of art worthy of admiration. The book boldly and courageously advocates for a contrarian model of leadership and business building. This is a very different conversation. How often do you hear St. Augustine, Milton, Shakespeare, Nietzsche and Heidegger referenced as guidance for how to lead more effectively? I invite you to be patient, listen closely, and ask yourself, what would it look like if I were building a true masterpiece? Enjoy this unique and powerful conversation with Charles Spinoza and Chris Davis. Charles, Chris, it’s wonderful to see you both. I’ve been looking forward to this conversation for some time now, so I just want to thank you for both coming out of the show and spending some time.

Charles Spinosa [00:01:21]:

Thank you, Darren.

Chris Davis [00:01:22]:

Thank you, Darren.

Darren [00:01:23]:

Yeah. And that for listeners. That was Charles speaking first and Chris speaking second. And I’ll try to do my best to make sure that’s clear. I’ve been looking forward to the show in part because you’ve both contributed and written a what I would consider a once in a five or ten year book. You know, every five or ten years I read a book and it literally has me sitting up straight and wanting to reread it. And that was definitely the case with the book that you both wrote last year, Leadership is Masterpiece Creation. And I’d love to use our time this morning to talk about it, particularly as it relates to CEOs and the businesses that they’re leading. So let’s start with just the basic thesis or basic premise of the book. Charles, if I could have you speak to the argument that you’re making in the book itself.

Charles Spinosa [00:02:11]:

Absolutely, I’d love to do it. And if I go on too long, just tell me to stop because this is something I do love. You’re quite right about that. Okay. The basic argument of the book is that leaders, by and large, leaders are trying to create morally distinctive organizations. We know that at the bottom of the food scale, more or less, you just walk down your street and you look at the stores, the restaurants, and they all portray the leader’s vision. I won’t go into detail over that, but the differences are clear and it’s because of leaders. Leader believes there’s a right way to treat customers A right way to treat employees, a right way to treat owners, and is acting out of that. And we know too, at the top, when you take Jeff Bezos or Paige or Brin, Bezos believes the right way to run a company is relentlessly. And everything in Amazon is relentless. And that’s how employees have to engage. At Google, it’s living your dream. You get some time to pursue your dream, and you lead a psychologically safe life. Completely different visions, and those are based upon a moral view of what the right way to treat employees is the right way to treat customers. So at the top and the bottom, it’s not news. It’s everybody in the middle. And my experience in consulting and Chris’s experience in consulting is that people in the middle, by and large, not 100%, but not far off, 100%, want to, to create a moral vision, create a distinctive company. And why don’t they? It’s consultants like me, it’s business school professors, and it’s the fact that work is so demanding. And so what do we offer? We business school professors or we consultants? We offer recipes, frameworks. Follow this framework, follow that framework. That’ll make it easier, and you can get your profits, you can get your market share, and everything’s okay. Well, everything is okay, except for one thing. You’re not really fulfilling your heart’s desire. And so the premise of the book is to give people the tools, both conceptual and practical tools, to turn their business into a masterpiece.

Darren [00:04:19]:

So I want to pause on this word masterpiece, because it’s a very evocative and intentional word you’ve chosen. What are you trying to convey with that word?

Charles Spinosa [00:04:27]:

Well, when I think about the word, there’s a whole lot that I’m conveying. The first is, you know, I started out as a Shakespeare scholar and Shakespeare professor. And for me, when I think of leaders, and when I first started thinking of leaders, I started thinking of them in terms of tragic figures. For Shakespeare’s tragic figures, who tried to live the story of their lives, who tried to make the story of their lives come to life. And as Shakespeare showed them doing that, he created masterpieces. And when I do leadership coaching, that’s one of the things I do. I want to get clear about the leader’s story and actually how the leader needs to change his or her story as she evolves. So I was thinking, first of all, let’s think about individuals as works of art, as masterpieces, and their styles as masterpieces. And so that’s me 28 years ago, as I consulted more and more, I realized you can’t have a masterpiece style. You can’t make yourself into a work of art if you’re a leader without doing it to your organization. And so that evolved that way. Now I’m also, in addition to a Shakespeare scholar. I’ll only apologize once for this, a philosopher. And Heidegger wrote, I think one of his best essays is on the Origin of the Work of Art. It’s really about cultures, and it’s really about cultures have to have figures in them, exemplary figures in them. They can be works of art. They can be leaders that show the culture what it’s about. In his essay, when he writes about it, he writes about it as a work of art which shows the Greek culture what it’s about. Turns out it’s a temple that shows the culture what it’s about. But that was what I was thinking about, how the leader becomes a masterpiece and creates an organization or a culture that’s a masterpiece. And then as I read Burkhardt, because again, Renaissance scholar I read about. I read Burkhardt on Renaissance Italy, I discovered that he was the one who made the first claim that organizations, in his case, Italian Renaissance city states, were considered masterpieces by the people that were doing that. I was convinced that he was right, that that is what the princes of the day were trying to do with their city states. And that is really exactly what I want to enable the leaders today to do. So. The references are all perhaps a bit obscure and a bit personal. I would like to think that everybody has on his or her bookshelf Burkhardt’s book about Italian Renaissance cities. I’m told that it’s not the case. It’s deplorable circumstance, but it’s not the case. So I’m inviting everybody to think as.

Darren [00:07:15]:

Though they did this invitation, while it can sound a bit esoteric, deeply philosophical, evoked in me at least, I’m an n of 1. A massive resonance as the leader of my own business and as somebody who helps others create enduring businesses at scale. This idea of building something evocative of a Renaissance painting, something that’s worthy of admiration, it deeply resonated. And I’m wondering maybe, Chris, I could turn to you and have you speak to. What is it in this concept of offering an invitation to business leaders to create a masterpiece? Not just think they’re running a business, but thinking they’re bringing something worthy of admiration into the world?

Chris Davis [00:08:00]:

Well, you’ve probably experienced it as a leader of a consulting firm. There are leaders we meet occasionally. Luckily not too often whose sole concern is to flip. A company makes money quickly on it, and that’s great, and that’s their purpose and what they’re up to. But the leaders that we normally work with, I suspect you work with, they truly do want to create something distinctive in the world. It’s not simply enough to return a good return to their shareholders or even to treat their employees nicely. They actually want to bring something into the world that is distinct. And I find whenever I speak about creating a masterpiece, it does resonate. They may have never thought of it in those terms, but suddenly they do say, yes, that is what I want to do. That is what this is about more than anything else that what it’s about. Then the question starts to be, where have they not done that? Where have they compromised? Where have they sold out as opposed to stayed focused on this masterpiece they want to create?

Darren [00:09:09]:

Yeah. So let’s push the definition a little bit more. And what’s required for building a masterpiece? I think in your book, you talk about having a vision for a new moral order and the courage and clarity to take real moral risks. But when we’re talking about building a masterpiece, what are we actually talking about here? Beyond the evocation of something bigger than what we might be thinking of as business leaders.

Charles Spinosa [00:09:35]:

Would you like me to take that, Charles?

Darren [00:09:37]:

Great.

Charles Spinosa [00:09:37]:

Yeah, okay. I’d be happy to take that. I can sort of. People have asked me on podcasts and webinars to summarize the book in three bullet points. And so I said, well, yes, if audiences want that, I better take that as a responsibility. So I’ve done it. The first thing is I ask leaders, what is it that always goes wrong in your organization or in your industry? That’s them discovering a moral anomaly. Something that always goes wrong that’s not repaired, that they sort of would like to have go right. To my surprise, leaders answer that question quite easily. You know, I always thought that that would be the hard question. It’s because nobody’s ever looking at it. But, you know, I can give you some. We always take advantage of loyal customers. We only do what’s safe. We sell by making women feel anxious. That was Anita Roddick’s Anomaly. Trust in online retail is getting lost, and trust in retail is getting lost. That was Bezos Anomaly Ray Dalio. In the face of the digital form of transparency, people are cultivating fake images of themselves rather than speaking truthfully. His anomaly, we run into them all the time. Chris and I ran into one recently. Video games are only for macho men. We can make gender neutral or gender appealing video games, but we don’t. We just do macho men. Another one. There are no real advocates for patients to get covered by their insurance. Their doctors try a little, but don’t have time. They’re no advocates for that. That’s something that always goes wrong in our industry. So leaders are able to answer that question, which is. Which is the thing that makes me feel good. The book is on firm ground. They do want to create masterpieces. The next question, which the book is about, is a much harder question. It turns out I thought the next question would be the easy question, what would you love to do instead? And that’s where leaders have a harder time. I’ve told myself the following story. They’re having a harder time because leaders just don’t pop out of the sky. They start out as managers, and managers become brilliant about managing around things that are hard to change. And so they’ve been expert at managing around the thing that always goes wrong in their industry or organization. So what would you love? That’s the next question. And then the following question, which is really the heart of the book. What risks do you have to take to change it? To change what you do? And that is really important because what grows up in any industry and any organization is what I call a moral order. There are right ways to do things. Some are very clear, some are instinctive. Some are just bridging the difference between the clear and instinctive. But there’s a right way to do things. And that right way of doing things in that industry says it’s right, for instance, to take advantage of your loyal customers. It’s right to make women feel anxious and so forth. To break with that, you’re going to have to do something that seems wrong.

Darren [00:12:37]:

And what is it that you think gets in the way of leaders answering the second question and then engaging in the kind of courageous moral risk taking that’s required to produce something really worthy.

Charles Spinosa [00:12:50]:

The first thing is they’re, as I said, they’re expert managers. It’s so easy to manage well. And when people evaluate them, they evaluate them on whether they’re producing a profit. They evaluate them on whether they’re maintaining or growing market share. These are the common sense ways to evaluate leaders. We evaluate leaders in ways that sort of violate the leaders in that way. I mean, people who like the book tell me the most important thing that you did in the book, Charles, was give me the permission to create a masterpiece. I would love to have them say the most important Thing you did in the book, Charles, was give me the steps and show me about moral risk taking and help me think philosophically that way. But no, they said, you gave me the permission to go do what I wanted to do all along. Well, fair enough. If I just do that, that’s. To me, that’s a great thing. I will be happy with that. I can go on my tombstone. He gave us permission to create masterpieces and showed us how. So the first thing is the way in which managers are evaluated, the way in which they’re trained, the way in which consultants deal with them. We help them solve simple or sometimes complex problems, but not moral problems. The third, moral risk taking. That’s something that people are taught to avoid. We actually take moral risks in our lives all the time. We take moral risks with friends when we give them advice that we know will be hard for them to follow. Where if they follow it and it goes poorly, they’ll be harmed. People will look at them poorly. I do it in my coaching very frequently we do it, but we tend to look away from it. And in that way, I think we have a cramped view of morality. One of the things I love saying about the book is this book shows that leaders are really today’s moral artists. And our moral orders are, I believe, like aesthetic creations. They’re created by people. They go on, and then they slowly change and people create new ones. And so what’s right and wrong today is quite different from what was right and wrong even when I was. Was a young man, and I assume will be quite different in another 20, 30 years. And that’s because people are changing what counts as right and wrong. And that’s something business leaders are doing in their own organizations. And people are not taught to do it. They don’t think about it.

Darren [00:15:09]:

Yeah, it’s occurring to me that to build a masterpiece organization, you have to treat your own leadership as a masterpiece. And you write about that in your book. But can you connect the two here? I can’t imagine that somebody that’s not taking themselves on as a work of art is going to be able to be able to see with clarity the risks that need to be taken or what they really, really want to happen and then have the courage and discipline and fortitude to make really, I think, in your words, shocking decisions in some cases that shock a moral order out of its slumber and awaken it to something that’s new.

Charles Spinosa [00:15:49]:

That’s right. I think the decisions are always shocking when they take place. Jeff Bezos threatened to fire his Logistics genius. Think about how important logistics is to Amazon. But when his logistic genius refused to work relentlessly, Jeff Bezos threatened to fire him and almost did likewise with his first employee, who created the website. You can think how important the. The website is to Amazon, but when he couldn’t produce the next version of it, or couldn’t produce it quickly enough, Jeff Bezos forcibly retired him. And that way showed that raising the bar all the time on employee requirements is essential to that company. Now he created himself to work relentlessly. He created himself always to get up and be a better version of Jeff Bezos every morning. And guess what? That very good. That renewing yourself every day, that relentlessness that gave us what I call the hyperconvenience of Amazon. You know, it’s funny, when we first asked people what’s good about Amazon? Well, it’s got lower prices. It’s an everything store, has virtually everything you’d ever want. Who would want more? And the technical people who developed it thought that would be what everybody loved about Amazon. And the inconvenience of having to have things mailed to you and having them send the. Send them back, that would be trivial. Bezos took that inconvenience and said, that’s where I’m going to triumph. And so every day, delivery of the Amazon goods to you gets easier and simpler. And that’s the relentlessness, that’s the raising the bar right inside the business model, inside Bezos. And that we as customers then come to experience and appreciate. And I have to confess, I go to my favorite restaurant, if I ask for the bill, and they don’t deliver it with the speed of Amazon, I’m disappointed. So hyper convenience has taken me over. Bezos did that. And now it’s an expectation of a customer. It’s the right thing, the right way for them to treat me. So, yeah, the three come together always. If you look at Anita Roddick, and.

Darren [00:17:57]:

That was founder of the Body Shop or CEO of the Body Shop.

Charles Spinosa [00:18:00]:

Yes, founder of the Body Shop.

Darren [00:18:02]:

Yeah.

Charles Spinosa [00:18:02]:

She, she created the Body Shop in Brighton, one little town in the south of England, a seaside town in the south of England. It was successful. She took all of her family’s money. Her husband was the cfo. Everything depended on that. And it was a success, successful little company. And it was ignored by the beauty business. Essentially, the beauty business said, okay, she’s going to siphon off the hippie women. We were never much good with the hippie women anyway, let her have them. And she realized she had to create a growing Business. And what was her first big moral risk? Well, she asked the family if they would go and get another loan. They said no. And so when her husband, her CFO, left town, she sold half the shares of the business to get money for the next business. He came back, he saw the next business, he saw the next door, he saw it doing well. He forgave her, and the rest is history. But that showed how important growth was to her. She was willing to sacrifice basically the whole thing and the family for growth. Now, what was she doing herself? Well, the beauty business was all based upon looking young. She knew she could make it fun. If people went to the stores, they could try on different things, they could do lots of sampling. And she did that. She knew she could put it in containers where they didn’t have to spend a lot of money for everything. But she herself was getting older, obviously. And so what she did was she went and explored the world to find out how women in what are called traditional cultures take care of their skin and take care of themselves. And that became a big part of her life and that became the ground of the Body Shop. So she developed herself in response to trying to look young. She was able to bring that into the Body Shop and bring that into this intensely growing organization. And that’s how we came to know the Body Shop. So, yes, you’re right so far as I can see. I leave it an open question in the book whether there’s another way to be a leader. Maybe you can do it by being a high risk person. I’m not sure. Maybe you can do it by being an improviser. I’m not sure. And there are some people that claim that you can. But for me, the most obvious way to make your life into a masterpiece is to make it a single work of art that’s constantly evolving. Take the virtues that you’re developing and make them core of your business. And then once they’re core of your business, which becomes a masterpiece, see how you can offer another product, a better product, better service to your customers. And that’s the old consultant in me. You hear it, it’s three steps, very schematic. I’m not sure that it really is three steps, all that schematic. I think it actually happens most of the time altogether at the same time.

Darren [00:20:46]:

Yeah. I think you’re also making an argument in the book, if I’m reading it properly, for a very contrarian form of leadership. In part of your book, you take on what I would call the existing or prevailing paradigm of leadership. And these sort of five myths, maybe, and you, I think, one by one, dismantle them and replace it with something very different. And I’m wondering if we could talk a little bit about the new paradigm of leadership or contrarian paradigm of leadership that you’re offering. It sounds like it’s absolutely essential to building a masterpiece, one that definitely resonated with me. And either Charles or Chris, you can speak to that question, what is the existing prevailing paradigm and what’s the new one you’re offering?

Charles Spinosa [00:21:31]:

We took time to present it in a nice way, order. And so you’re right, we are absolutely changing the paradigm of leadership. I can just begin. I’m actually going to turn to the page in the book. The first thing is people have come to believe that leadership is influence. And there are lots of people that have lots of influence in your lives, in our lives. And they’re not all, by far organizational leaders. I want to say the key attribute for. Of a leader who creates a masterpiece business as being the kind of moral artist I’ve been describing. And that means being willing to take a moral risk to resolve a moral anomaly. And so that’s the first big difference.

Darren [00:22:19]:

That’s, I think, an essential point here. And for those that are listening and for. Maybe this conversation is resonating for you. The way I took that in was a strong argument for a more directive form of leadership that may be a little countercultural today. The idea that I have to. Or that my leadership is dependent upon building consensus or listening deeply, making sure that I’m pleasing others, including others, which there are aspects of all of that that I think are essential to good leadership. But you’re arguing for something very, very different. And I want to make sure that distinction lands here for listeners the way I would describe it. And maybe I’ll articulate it to get a reaction from the two of you. This is a leader who has something much, much bigger in mind that they’re creating and is willing to displease people not for the sport of it, but because they’re so morally distinctive and so clear about what they’re bringing into the world and so unapologetic and uncompromising about their vision that they know that a byproduct of that vision will be distasteful, it will be unpleasing, it will be alienating. And that point, I want to make sure. Do you agree with it? And make sure that it lands for people, because it’s a very key distinction.

Charles Spinosa [00:23:47]:

At least the way I read it, it’s Absolutely right. In fact, I would. Only if I were to say it a little bit differently, I’d make it more emphatic.

Darren [00:23:55]:

Okay.

Charles Spinosa [00:23:56]:

You can count if you’re a leader of this sort that you are going to be breaking with a moral order and some one of your close followers. Close followers, not a distant follower. Your husband, who’s cfo, your founding employee who was there right from the start with you. We’ll believe that these are nice words, that this is public relations, that you are not in it all the way. The one thing you cannot delegate is your moral risk taking and the virtues or the stand that you’re taking those moral risks for. So what’s the favorite thing? Leadership can be distributed. Anybody can lead. The book says no. No. You see the moral anomaly. You come up with what you would love to do and you are the one who’s going to take the risk. And virtually nobody else is going to take that risk for you. And it’s only once they see that you’ve taken the risk and succeeded that you then have true followers. And so you’re right. This is not about consensus building. This is not about what people call transformational leadership, which is where you’re taking care of and nurturing all of your employees in their ambitions. That’s the second thing. This is not about something that doesn’t have to do with formal authority. It’s because you have the formal authority to do this that you can do it and make it stick. And what’s the other thing? Oh, it’s not about you expressing your vulnerability. In fact, if you feel your vulnerability, you’re not going to take the moral risk. I can give you a little story in the background that I thought about when I was thinking about vulnerability. Yeah. And you can’t share taking the moral risk taking with your team, which is what leaders are advised to do. So. Yeah. The basic five or six things aspects of leadership that you’ll be taught if you go to Harvard Business School. The book is saying that’s not for Masterpiece Leadership.

Chris Davis [00:25:58]:

Chris, you want to add it here? Yeah. That you can see even Charles saying that that is a moral risk against the dominant paradigm of what leadership’s supposed to be and what leaders are supposed to do today to focus on producing a safe space, seek consensus, be the servant leader to your employees. For him to be saying those things by itself is a moral risk. And operating in any of those ways is already a moral risk.

Darren [00:26:27]:

Many of these principles we bring for in our work and in so doing we’re, I think, creating A new moral order in terms of how we think about building enduring organizations. And we’re taking moral risk. I mean, maybe this podcast episode itself is a beautiful moral risk to disrupt prevailing ways of thinking. And I would say that there. And this isn’t to soften the point at all, but maybe just to appreciate the complexity of the conversation that we’re in, there are elements of all of the conventional ways of leading that don’t have to be discarded completely. It’s what actually is the essence of leadership that we’re really talking about. And it’s a much stronger, unapologetic, singular form of leadership that can be delivered with a lot of care and kindness and respect. I don’t see you arguing for the opposite of that. I just see you not arguing that that is essential. And in so doing, I think what you get is a plurality of leadership styles. Some that people would find completely distasteful, some that people would really love. And there’s something about the concept you’ve used, which is a plurality of morally distinct organizations, and I would add morally distinct leaders, that is in and of itself a social good. So I wanted to maybe bridge to that point, because it’s one of the things that really stuck out for me in the book, which is that it is not just okay, but it’s actually a desirable social good to have a marketplace of free and distinctive cultures. I call them black licorice cultures. You’ll either love them or you hate them, but you’ll know when you whether you want to work for one of these organizations, and that there should be, within some bounds, a wide range of those. Talk a little bit more about this point that you make in the book.

Charles Spinosa [00:28:31]:

Yeah, I call it the narrow moral pluralism. And the simplest way to see it is to look at Google and look at Amazon. Those are two different cultures provide two very different goods for people in their lives, two different moral goods for people in their lives. And I value them both. And if, you know a lot of people can’t value Amazon, they find Amazon too hard to swallow. Well, substitute the body shop. Substitute Ray Dalio’s Bridgewater, the hedge fund. Substitute something else that you can get behind. You still will see that there’s a pretty big difference there between these. Now, it used to be that our response to moral difference was tolerance. When I say used to be, I’m going back a few hundred years to 1700s when tolerance became fashionable and it was considered a moral good and an important moral good. I think we’re beyond tolerance now, and I Feel grateful for the diversity of moral goods. I mean, right in my own, just blocks from my home, there are two different hardware stores. One plays classical jazz music, the other pop tunes. One has soaps when you walk in. The other smells like three in one oil. One is full of customer service people helping you with all the smallest kinds of hardware questions you’d have. The other one just has somebody restocking shelves and expects you to know it, to be a do it yourselfer and get what you want. I love both of those hardware stores. I embrace one more because I’m not very good at hardware, but I love them both. I want them both to be there. And that is my narrow moral pluralism. And I think that’s what businesses can give us. More than governments, more than nonprofits, businesses, because they can be successful by virtue of their distinctiveness. They can fill our lives with a kind of moral diversity that we can appreciate. And for me, that then is bringing us into an economy of gratitude where we look at that diversity and feel grateful for it. And that’s the note on which the book ends, Promoting an economy of gratitude. That’s like that. And that’s ultimately why I think it’s sort of a public good for all these business leaders to do what they want to do anyway and create a distinctive masterpiece.

Darren [00:31:05]:

Okay, so I think we’re touching on a really important point here also, maybe in the ground of moral risk taking the word inclusivity. It’s very topical, it’s very well intentioned. I think there’s some beauty to this notion of creating spaces, workspaces, where people feel included. And yet I think the downside of this, the shadow of it, is that you run the risk of creating an organization that tries to work for everyone and works for no one, that does not have distinctiveness. And what it lacks is, I think, the stepping back and seeing the Marketplace. Right. There’s two hardware stores, there’s 1,000 hardware stores. Right. That each have not only a right, but really an obligation. And so I’m saying this as a way to get your perspective, but an obligation to create something not bland but truly distinct, that brings something new into the world, that produces a good for its stakeholders in a very distinctive way that, again, will be really liked by some and really disliked by others. Is that really what you’re getting at here? I mean, is there. What does that add to what you’re trying to say here?

Charles Spinosa [00:32:24]:

Yeah, I think there’s also a middle ground.

Darren [00:32:26]:

Okay.

Charles Spinosa [00:32:27]:

I think there are things that we can embrace and things we can’t embrace. I think there’s a middle ground of wider things that we can admire. So I can admire both of those hardware stores I go to, the one that plays classical jazz. I’m sorry, that’s the one I embrace. I don’t have anything against 3 in 1 oil, but I just love classical jazz and being helped with my hardware problems. But do I dislike do it yourselfers? No, they should have that. And so I can admire both. There are some that obviously I’m not going to support any business that’s breaking laws in really terrible ways, obviously. So that’s beyond the pale for me. I don’t support drug dealing, for instance. Now there’s illegal business. I don’t support that. But I do have a broad range of things that I can admire. What I’m finding with the book is that’s an unusual view. Or even people that have it don’t want to live up to it. They want to say, well, I have the things I love. There are things I can hold my nose and tolerate, and there are things that are just outside the bounds that we should close down. And it’s changing toleration to gratitude and admiration. That’s partly the mission of the book.

Darren [00:33:47]:

Let’s talk a little bit about culture, because I think you have a chapter, I think, Chris, that you contributed significantly to chapter seven on culture. And I think masterpiece organizations are ones that create very distinctive cultures. And you have a very unique way of talking about culture, about moods and styles. And I’m wondering if you could offer a perspective to listeners as they think about, again, whether it’s building a masterpiece or recognizing that they’re already building a masterpiece, but now having the language and distinctions to understand what they’ve been doing? How do you think about culture in a way that’s conducive to creating something really distinctive and worthy of being called a masterpiece.

Chris Davis [00:34:33]:

So let’s start with every organization has a culture, whether they’re a masterpiece or not. And part of what Charles, I looked at first, if you’re going to look at culture, is how to make it visible and evident to those in it, because it does become as water to the fish. And for that, we use two different distinctions to pay attention to one is what’s the organizational mood that a culture has? For instance, we might identify it as a fear mood, meaning that how things matter to people in that culture is in terms of whether they are threatening or not to them. So a meeting in a fear culture is something you approach with a certain caution and dread because you know, you might get wounded in it, you might get put on the spot and it could be really bad for you if you are in a different mood. Let’s say a joy culture, which is a, like an improv troupe, kind of let us work together to put the play on. You know, there is no mistake. You know, you drop it, I’ll pick it up. A meeting is this creative experience where we come to participate together and make something happen. Similarly, against these background moods, there’s different styles that organizations adopt which is, what’s the. You could say the highest or organizing value. And for example, here there are cultures, Apple’s a famous one, where perfection seeking perfection is the right way to be. If you take time to make it absolutely perfect, you’ll be appreciated. If you turn it in and it’s not, you could be fired. Other cultures would not value that. They want to see that you are good at getting something workable out quickly, balancing the trade offs. A pragmatic style. Some cultures value collegiality above everything else. So when we look at cultures, we’re looking at what’s there. And then a masterpiece leader, because they are bringing their own challenge to the existing dominant paradigm, is going to shape that culture in a certain way now. And there’s no one right. Masterpiece culture. Just as Charles was saying, the relentlessness of Amazon under Bezos was very different than the almost academic culture that Google had under Brin. And we don’t point to there’s only one right one. This marketplace of various cultures is a great virtue. Well, one of the things the leader’s up against, and this goes back to why it’s so challenging to bring forth a masterpiece, is there is a dominant business paradigm that is telling him or her over and over, this is the way to do it. That’s the wrong way to do it. Don’t you know that Amazon is evil? Don’t you know the most important thing is creating safe spaces, which in the end is almost an attempt to eliminate pluralism and get into a single kind of current appropriation, business culture. So very much in working with leaders, part of bringing forth the masterpiece is what’s going to be the distinctive culture that causes this masterpiece to come into the world.

Darren [00:37:54]:

Yeah, you talked about moods. I know in the book you talk about, I don’t know whether you’d call them positive and negative, like the positive moods of joy and zeal and so forth and the negative moods of fear and resignation and so forth. And can you build a masterpiece from a negative culture? An organization that has A negative mood or do you really need to have a mood of positivity within an organization?

Chris Davis [00:38:22]:

Boy, that’s an interesting question. With our clients, we have never advocated them keeping or building a culture with a negative mood. We discover them there sometimes and then we work with them to get to one of the positive moods. You can certainly run an organization successfully with a negative mood. Fewer cultures can drive results, no question. There are some very successful arrogance cultures which would be another negative mood. So you can certainly have a successful organization in that. Would it be a morally distinctive masterpiece? All I can say is it’s not one that I would ever help design. But Charles, if you have a different answer than I’d be interesting what you’d say there.

Charles Spinosa [00:39:05]:

Yeah, I think, I mean, look, this is asking us to play the role of philosophers. The simple answer is no. Don’t go out and try to create a masterpiece where you’ve got a negative mood. You’ve got a huge amount of headwind going for you, number one. Number two, it’s the cultural design which gives you the greatest leeway to be an artist. It’s the one where you’re actually taking the lowest risks. And when you get a good culture where working, you’re satisfying the business concerns, you’re going to raise your productivity and profitability by roughly 20% or more. So this is, this is the thing that we, Chris and I do to get people appreciating building masterpieces. It’s our entryway. Well, if I’ve created 20% more value for the company, now you give me room to make it morally distinctive. So the non philosopher’s answer is no, you’re not going to create a masterpiece on a negative mood. Now, if you ask me to sort of search through history and see if I can come up with something where they had a mood of fear or a mood of anger, that was a masterpiece. I bet there was an Italian city state that I could find, and it might even be Florence that had a mood of anger that created was this sight of all these artists and scholars and it was a beautiful city. I’m trying to think was, you know, Barclays is a famous place for having had a mood of fear for the longest time. You could argue back and forth. I don’t think it was ever a masterpiece, to tell you the truth. But Barclays Banks certainly survived for years that way.

Darren [00:40:47]:

Well, I think there’s something about in your book that maybe speaks to this. You speak a lot about Nietzsche and the idea of a good life and that masterpieces are really Ones that create a good life for the people that are in the company as employees, are customers of the company, stakeholders of the companies. And I can’t imagine creating a good life out of a mood of fear or resentment or anger or arrogance. And maybe just to not get too stuck on that particular question, talk about this concept of a good life, because I know it’s one that really resonated for me at the end of the day, can put aside all of the philosophy and all of the distinctions that we’ve talked about. That’s a really motivating, animating idea, which is, what would it look like to build a company where people’s lives are flourishing? Why did you bring that part into the book? It feels like an essential component that probably we need to discuss.

Charles Spinosa [00:41:44]:

It is. I should just say, we argue in the book that you just need to create a good life for most of your stakeholders. You don’t need to create a good life for all of your stakeholders. So we’re not absolutists. So that’s where that’s the fringe elements. Is there. Is it possible to create a culture of anger that creates a good life for enough stakeholders? I want to say not likely, but nobody’s going to give you money to go out and find them. I think, however, good life, right from the very beginning when I started consulting, leaving the academic world, I said businesses are about creating good lives. That’s the intersection of the humanities and businesses, not about providing just goods. The old story was businesses are all about necessity and they just provide goods for people, basically goods for people’s stomachs. And you can see if you’re creating an organizational culture for people that’s not just a good for one’s stomach. So for years I’ve been saying businesses are to create good lives. Now, it used to be it was far easier to understand what a good life would be and a good life. In fact, when I wrote my first book, I was writing in favor of this. A good life means being connected in a community, being strongly connected to a community that you care about and that likely cares about you. And if you had that kind of community connection, you would feel that your life was a good life worth living. I think most of our sense of community has gotten far, far weaker since even 1997 when I wrote the first book. And that’s the job of this book was to say, what’s a good life today? And that’s where the philosopher Nietzsche came to help me. And you can get it. We’ve gone from stories that connected us, to our community, to TikTok. What’s the good of TikTok? It’s not that you get absorbed into a story like a novel on TikTok. It produces a sense of wonder. And that today is, I believe, the source of a good life. You have to get up in the morning and feel a sense of wonder. And if you do, you’re leading a good life. And if you don’t, most mornings, you’re not. And so businesses, I believe, today, have to give their employees, have to give their customers a sense of wonder. And Nietzsche is really helpful because he gives us sort of four ways in which you can get wonder in your life. And the first is the one that we were discussing at the beginning of our conversation. And that is where you’re constantly refining your life. You’re rediscovering yourself anew and making yourself different. The second is where what Chris was describing in his Joy Company, where you’re improvising with people and you’re turning every mistake into. Into a thing of beauty. And you really love that challenge. And each one of those moments is a moment of wonder. The third is a good life that maybe consultants and other gig workers feel. It’s where you lead a life of short stories. You’ve got one gig, you solve a problem, it comes to an end, you move on to the next. You find the next waiting at the door when the previous one closes. It’s one short story after another short story after another short story. Again, you get a sense of wonder with each story. And the last that Nietzsche talked about was a life of risk, where it’s a life of struggle, and you feel that you are living much more deeply and richly because of the struggles you endure and survive and overcome. And I think Nietzsche was right. I think if we look around and we see the various kinds of good lives before us, they tend to fall into those categories. There’s some where people switch, move from one to another, but that’s right. And those are the kinds of good lives in the book. We focus on the one evolving story mostly, but the others are there in the background. And every time you take a moral risk, you’re certainly living a life of risk. You get the wonder from that.

Darren [00:45:55]:

Chris, anything you want to add to that?

Chris Davis [00:45:59]:

Just more generally, we use examples in the book, in the conversation of great famous companies and great leaders, because that’s what most people recognize. But the opportunity of creating a masterpiece exists for a very small business owner. The good life of creating a masterpiece is available to anyone, really, if you are serious about creating an organization that’s going to be distinctive. You can be a masterpiece creator. I think it’s important that be emphasized here.

Darren [00:46:33]:

I imagine even outside of business, family can be considered a masterpiece. Or is that too much of a stretch?

Chris Davis [00:46:40]:

You better take that one. Because I never thought those terms.

Charles Spinosa [00:46:45]:

Certainly if you think in terms of a dynasty, a family dynasty, there’s no question but that it can be a masterpiece. And I always used to think about family dynasties. One of the things I studied and wrote about that I didn’t tell your listenings earlier about is I used to do legal history. And basically the 13th century through the 18th century. The whole law, the whole property law and contract law was about how do you create a dynasty. So, yeah, I mean, when you do that, you’re creating a kind of community. And if you think of your family as creating a kind of community, then you can make it into a masterpiece. It’s hard for us to do that today. But yes, you can do that. And I will confess, at moments in my life, that’s what I was trying to do with my family.

Darren [00:47:32]:

So I’m thinking about the listener who’s a leader of an organization or a. A business team and how they’re listening to this conversation. And I’m wondering what you would offer as we sort of round the corner here and come to a close of this phenomenal conversation. What’s the big bold invitation that you’re extending to them? What is the promise? What gets them out of the default way of seeing themselves and the business that they’re creating and catalyzes something, something new? And either of you can answer that.

Charles Spinosa [00:48:11]:

Answer the question, what always goes wrong in your business? Yeah, you answer that, you’ve hit your moral anomaly. I’m willing to bet that your listeners already know the answer. If you’ve got that answer, then you can call us or ask yourself the next question, what would I love to do? And that’s the hard one. Talk to people. If you have a hard time answering that. And then what are the moral risks that you need to take? Don’t take the hardest moral risk first, by the way, you can be calculative about your moral risks. Generally, we find that in order to really institute a new company, make a change in a culture, it takes three moral risks. Not one of them feels good. When you take it. You’re all up against lots of opposition and people telling you you’re wrong. Take the easiest one first and move successively to the hardest. And the book will help with that. But that to Me is sort of the practical lesson. The big deal lesson is if you are a leader, you are a moral artist. That’s a very cool thing to be. So be a moral artist, create a moral order.

Darren [00:49:22]:

Chris what would you say?

Chris Davis [00:49:25]:

Everything Charles had underlined, but I’d just add, beware of the dominant paradigm of thinking if you’re doing it because everybody knows that’s the right way to do it, that should be a yellow flashing light to you that is probably not looking at taking a moral risk or challenging the moral order. And I think that takes a lot of strength and courage to stand against that current.

Darren [00:49:49]:

Is there anything in particular, as you say that that you would point to? One of the things you alluded to a few minutes ago was the idea of safety, even psychological safety. Is there an element of the prevailing paradigm that comes up most for leaders that you work with?

Chris Davis [00:50:08]:

Psychological safety has certainly been a big one the last few years, and it has led to people not requiring people to be responsible for what they see. They don’t have to speak up because the story can be it wasn’t safe to speak up, and that’s extraordinarily destructive to a team and to a company. And yet it got such currency. It was a moral risk to speak against it. I do think some people are getting wiser on this count now, but that has been one that I think blinded a lot of people.

Darren [00:50:41]:

So I can’t help but ask us to get into that conversation just for a few minutes before we do actually wrap, because it’s such a great example of a notion that very few people would even think to challenge and let alone have the courage to do it. But let’s do that, because I think it deserves a much more complex appreciation than the subject has gotten. You write about it brilliantly in the book. So for those of you listening and want to learn more, read the book and particularly read that section. But let’s take it on. Where have we gotten it wrong and what’s the replacement for it? What would you offer CEOs that are struggling with this question?

Chris Davis [00:51:29]:

You want to take it?

Charles Spinosa [00:51:30]:

CHARLES sure, I’ll take it. Well, first of all, there’s the example of the CEO who has gone most strongly against psychological safety, Ray Dalio at Bridgewater. And he has a culture where people are expected, indeed required to speak if they disagree. And in fact, they’re rated by each other on whether they speak when they disagree. And it’s not because they feel safe. It’s amazing. It’s Amy Edinson, one of the Great exponents of psychological safety. She’s the one that’s written the books on it, actually went to Ray Dalio’s culture, examined it and said they must feel psychologically safe. Well, why? Because they’re speaking. It was totally nutty. It’s because I have courage. It’s because it’s a moral requirement. I can’t imagine living in a place for long or working in a place for long where if I see something that’s going wrong, I don’t feel the moral obligation to speak and then speak. What’s been lost? What makes it so hard for people to do it? We’ve stopped teaching people rhetoric. We’ve stopped teaching people how to speak. When you have an uncomfortable truth to speak, we have things like radical candor. There’s another one just like it, and it’s basically blurt out what you see. And if you blurt out what you see, obviously people are going to slap you down. So how do you speak courageously? Well, first of all, you have to compose what you’re going to say, and that requires what’s the background? How do you get the person to. First of all, how much do you believe what you’re going to say? Is it something that you think is likely right, or is it something you’re certain is right? Get clear about that. Secondly, how is the person likely to respond? What has the person been listening to? How do you include disabling those stories in what you’re going to say? Most importantly, how do you get the person to know that you thought about this hard? How do you get the person to know that you care about the person? If somebody doesn’t care about you and tells you an uncomfortable truth, the likelihood of you listening is very, very low. And so you need to set the stage by showing that you’re speaking out of care, that you’re speaking out of having studied this and thought about it. And finally, you have to put all those elements together with a beginning, middle and end in the story so you’re not blurting anything out. So on the one hand you have to have courage. On the other hand, you have to have compositional skill in order to speak truth to power. And those are the two things that I think are lost. And when you read some of the stories that Amy Edmondson tells about psychological safety, she tells a story about a nurse. She begins her book with a story about a nurse who’s just been to a training session. They say if you have premature babies, it’s best to give them this kind of injection. And she sees a doctor that’s not giving them the injection and she’s afraid to say anything. And that’s okay because the doctor had been nasty to a nurse the day before. Well, it’s not okay. You’re in the life saving business. You have to say something. But if no one taught you how to politely say, I was just at this thing yesterday, this workshop, and they were talking, you know, the sky’s the limit about this drug. What do you think about it? And open a conversation that way you’re likely to get an answer. You’re likely to get people thinking, we don’t do those things right now. We don’t cultivate courage, we don’t reward it, and we don’t cultivate careful composition.

Darren [00:55:03]:

Yeah. So what I’m hearing you say is this sort of lost art of skillful truth telling and that what we’ve lost is the moral responsibility of the individual to harness and build that capacity and then to engage courageously in it. Which I think I can certainly agree with and hopefully others can. In hearing you, I’m curious about the reciprocal responsibility. Is there one on the part of a company in terms of the part of the leader or part of the culture that’s creating conditions for people to assume that responsibility that you’re pointing out and inviting people into?

Charles Spinosa [00:55:39]:

Yes, but I don’t like to talk about it that way. I like to talk about it as a responsibility for a leader and a leadership team. Their responsibility is to be seeking truth. Now, in our agile cultures, in our agile way of thinking, we just try various things out. Whatever works, we follow that until it doesn’t work and then we try something else. I believe if you’re going to create a masterpiece, you need to be trying to understand what what’s true about your core customers. You need to be thinking about what’s true about your employees. You need to be thinking about what’s true about the products and services you deliver. What does it offer lives. If you are in that discourse, if that’s your mindset, if you’re waking up at 4 in the morning, as I hope every leader is, thinking, what’s true about the service for my customers, what’s true about my customers and what their lives are about, what’s true about my employees, then you are going to be ready to hear something that’s uncomfortable because you already are trying to put all those pieces in, some that don’t fit, some that do fit into the story. And you can tell a leader who’s doing that. You tell the leader Something that’s uncomfortable for the leader to hear. Our customers don’t want to be appealed to anymore on the basis of being sexually attractive. Well, I’ve noticed the leader’s going to say, well, I’ve noticed this and I’ve noticed this, I’ve noticed this. But I also am telling myself the story about. There are these three other things that say they really want that. And suddenly you’re engaging in a story and a real conversation. It’s when people get defensive, when they don’t know how to incorporate what they’re saying. So my prime responsibility for a leader beyond risk taking is to be truth seeking. And if you’re truth seeking, you’re ready. If you’re not truth seeking, you’re not going to be ready to hear the uncomfortable truth. Now, that doesn’t mean that you’re never going to have somebody say something that’s so uncomfortable the leader’s not going to be prepared for it. There’s always a risk in that, telling them something they don’t want to hear. But if they are engaging in truth seeking, they have the background to know how to accept it.

Darren [00:57:43]:

Chris, anything you’d add to that?

Chris Davis [00:57:45]:

Two things. Notice that the what is true question, there’s never a final end to it. You wake up the next morning still in the question and continuing to go. And if you are in that question, you are naturally going to be listening to people, seeking out people and listening to them, because that way is orienting you, is discover what’s true.

Darren [00:58:09]:

All right, lot to unpack here. What else would you add as we wrap up our conversation that maybe we haven’t touched on or that we’ve touched on, but you want to put a finer finishing point on.

Charles Spinosa [00:58:22]:

Well, first of all, let me thank you for asking that question, and let me pause for a moment to answer it. I find that we have touched on this. People find it hard to accept this book because they find it hard to accept easily that morality shifts. You can convince them of that by just having them look at history. And it’s fairly easy to get them to believe that it will shift again, that we’re not done, we haven’t hit the end of history. We will see new things as wrong, new things as right. And some of the things we think are currently right, we’ll see as wrong. And some of the things we think are currently wrong, we’ll see is right. And that frequently is a message of despair for people. But I want to pull it all back, and that’s because people want to believe that they’re good and that they’ve got what they need to be good. And somehow the humanities have not gotten through to people. We’ve stopped teaching it. And there’s one simple thought. I say simple, one very well expressed thought that’s not so simple. That’s at the heart of the book for me, and it comes from John Milton and it’s we only know good by knowing evil. I think it’s extremely profound. It says two things. One, we’re constantly in this tug of war between doing good and doing evil. Our habits are not just going to lead us all to do good. And I think if we examine our lives, we won’t see that we’ve just been spectacularly good all our lives, every day that there is a moral drama in our lives. But the more interesting thing when Milton says Milton, by the way, is this 17th century poet who wrote Paradise Lost. When Milton says we only know good by knowing evil, it doesn’t mean conceptually it’s really we can only do good by having done evil. It’s only when we can see certain things that we’ve done that were evil. We can see what it is, number one, to change our lives and to make that change stick and to accept that that change is a really. Is a great thing to do. And if you think back, or I don’t know that everybody’s read Augustine’s confessions, but St. Augustine, great saint, famously good when he tells the story of how he came to become that saint. An important part of him telling the story is when he was a child, he and his friends went and stole the pears from the neighbor’s tree. They stole them not because they were hungry, but because. Not because they wanted to eat them. Not because they disliked the neighbor and wanted to get back at the neighbor. They stole them out of the pure appeal of doing something mean and nasty and doing evil. And it was that that Guston realized we’re all always there. There is that appeal just because it’s a possibility. And he did it with pairs. He was thankful it was only pears. But when you realize that your life has a depth every day, you could do something totally nasty. Or on the other hand, you can do something that you want to make totally great. And if you live that range, I think you’re constantly exploring how to make your life better. And I believe you’re going to want to make a masterpiece. You’re going to want to make up for all those pairs that you stole by creating a masterpiece. And that’s one of the stories that’s deep down deep in me and I think deep down, deep in the book. So that’s one thing I don’t want to say. The other thing that we passed on, I think the place where you feel most like an artist in doing what we do in the book is in creating a very cool culture for your company. The other place is you’re overcoming so many interior barriers, it feels more like a war. But in creating the culture for your company, it really feels like being an artist.

Darren [01:02:23]:

Wonderful. Chris, anything you want to add in parting here?

Chris Davis [01:02:28]:

We’ll try to top that. But I just add that if you’re a leader, you’re an aspiring leader, you’re an ally to a leader. This book invites you into the question of creating a masterpiece and what it would take. And in my decades of consulting, I find nothing richer, more powerful than when leaders engage in the real question of creating a masterpiece. That be it.

Darren [01:02:56]:

Well, I think you’ve both, along with your co authors, created a masterpiece in this book. I can’t recommend it enough and you mentioned an economy of gratitude, so maybe I’ll end with deep gratitude for this conversation, the contribution that I think this conversation will have, the book that you’ve contributed to the world and the impact it will have. So thank you again for a really rich conversation, for your time, for your friendship and for your contributions. It’s been a pleasure.

Charles Spinosa [01:03:25]:

Thank you very much, Darren. Thank you. You’ve been a wonderful questioner. I love the questions and I love the space you gave me to answer the questions too. Thank you. Thank you.

Darren [01:03:34]:

You’re very welcome. There are few books that have made me re examine how I think about leadership and the role of business in the world. Leadership as masterpiece. Creation is one of them. It’s hard to convey the full nuance and richness of a book like this in an hour long conversation. But at a minimum, I hope and trust that it has stirred something inside of you that will have you rethink your own role as a leader and what it means to build a business. I look forward to being with you on the next episode of one of one. And until then, I hope you live and lead your life as a masterpiece with courage, wisdom and above all, with love.

Listen Here

In this episode of One of One, Darren sits down with Neil Kumar, co-founder and CEO of BridgeBio, a leading biotech company focused on treating rare genetic conditions that largely affect children. Neil is a deeply contrarian thinker and leader. It shows up in his decision to start a company ten years ago focused on a market that most others ignored, in the unique hub and spoke organizational structure he has built, in the distinctive culture and type of people he attracts, and in his sincere commitment to build a truly generational company.

Suggested Reading:

• Epistemic Dependence by John Hardwig

• Zero to One: Notes on Startups, or How to Build the Future by Peter Thiel & Blake Masters

• Four Quartets by T. S. Eliot

• The Power of Now by Eckhart Tolle

• Shoe Dog by Phil Knight

• The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success by William N. Thorndike, Jr.

• Scale by Geoffrey West

• The Human Swarm: How Our Societies Arise, Thrive, and Fall by Mark W. Moffett

• Strategy: A History by Lawrence Freedman

Timestamped Overview

00:00 Decade of Rare Disease Innovation

03:13 Privilege of Patient-Centered Medical Research

06:22 Genomics Revolution Enhances Rare Disease Treatment

10:25 Diversification in Unpredictable Industries

12:38 Investor Challenges in Early-Stage Companies

17:53 “Balancing Optimism with Realistic Challenges”

22:29 Leadership Journey: Embracing Challenges and Growth

26:01 Evolving Career Paths in Biotech

29:45 Rare Disease Treatment Success

30:43 Canavan Disease: Parents’ Advocacy Triumph

34:18 “Value of Low-Yield, High-Impact Work”

39:36 Rethinking Strategy and Collaboration

40:51 “Integrating Life Lessons in Business”

Full Transcript

Darren [00:00:02]:

Hi, everyone. Welcome back to another episode of One of one. I’m your host, Darren Gold, CEO of the Trium Group. My guest today is Neel Kumar, co founder and CEO of BridgeBio, a leading biotech company focused on treating rare genetic conditions that largely affect children. Neil is a deeply contrarian thinker and leader. It shows up in his decision 10 years ago to start a company focused on a market that most others ignored, in the unique hub and spoke organizational structure he has built, in the distinctive culture and type of people he attracts, and in the sincere commitment to build a truly generational company. I enjoyed every minute of our conversation, and I’m certain you will too.

Neal, it’s so good to see you. I’ve been looking forward to having this conversation, and thanks for being on the show.

Neil Kumar [00:00:58]:

Thank you. Thanks for having me. It’s great to see you again and look forward to the discussion.

Darren [00:01:02]:

Yeah, likewise. So I believe it’s been now a little over a decade since you started this incredible company, Bridge Bio. And I’d love you to describe maybe starting with what was the founding inspiration, what was the big problem you were trying to solve? And there’s something really unique about a decade, which I’d love you to sort of bring us to the present moment as well, after we talk about how this idea came to life.

Neil Kumar [00:01:28]:

Yeah. So almost a decade. I was just reflecting on this. I think in six months, it’ll be a decade worth of work at Bridge Bio, but almost two decades now of work in the area that Bridge Bio plays, which is that of rare genetic disorders. And so the company started basically through the observation of the following problem, which was the sequencing of the human genome had allowed us to gain insights that would in turn make beautiful new medicines for mostly children affected with what we call rare genetic disorders. And there was no company or set of companies that wanted to move those ideas forward as quickly as they probably could be moved forward because the marketplaces associated with genetic disease tend to be too small for a large pharmaceutical company. So about a decade ago, myself and several other of my co founders kind of put our heads together and said there’s an opportunity based on all the research that’s happening to really help maybe millions, tens of millions of mostly children affected by these diseases, conditions, and no one’s doing it. So can we put together a company that does it? And that’s what we do. We basically discover, develop, and ultimately commercialize medicines for rare genetic disorders.

Darren [00:02:39]:

Yeah. What I love about that is obviously a compelling business opportunity. Right. A reasonably big market. When you add up all of the. I think you call them monogenic diseases, but underserved, given that people don’t think that those markets in any one particular area are big enough. And then this, like, incredible animating mission, you know, to save people’s lives and particularly children. So I’m struck by the powerful combination of both market opportunity and mission. And I imagine that was at the heart of the founding of the company.

Neil Kumar [00:03:13]:

Yeah. You know, thank you for saying that. A lot of people think about this space as, like, it’s singles and doubles in terms of a market, or it’s high probability of technical success based on the way we can describe a condition. But the way I really think about it is every time we have the opportunity, and it really is an opportunity or privilege to work on a specific condition, it typically starts by meeting parents, families, and patient advocacy groups. And they give us the gift of understanding the condition, getting to know what type of endpoints we should look at in the clinical trials. And so it’s really a very humane endeavor and one that I’m thankful for even a decade in having the opportunity to work on. And each one of those conditions is. And each one of those children, to have an impact on them is a true privilege. So it’s been a wonderful march forward and backward and forward and backward and sometimes net forward over the course of the last decade.

Darren [00:04:09]:

Yeah. Well, I’d love to come back maybe and talk about maybe one of those conditions as an example and bring to life what you just said. But before doing that, walk us through the last nine and a half, almost 10 years, you had this incredible vision. A group of founders. How’s it gone and where are you today?

Neil Kumar [00:04:28]:

Yeah, good question. Couple different lenses to understand that question with. I think the first and most meaningful is through our objective function, are we making meaningful new medicines for patients, for the patients that we serve? And we’ve done three approved products. We’ve put 21 new products in the clinic over the course of the decade. I think it, you know, we’re one of the more productive biotechs that’s been around over the last 30 years. So from that standpoint, we’re doing well. From the standpoint of the overall unmet need, there’s still 7,800 monogenic conditions that need their first therapy. So we’re doing poorly, and there’s a lot more work to be done. From the standpoint of our own journey, I’d say we’ve built the capabilities to do this reproducibly and to become a generational company. So we have that now, we have to go execute against that. And from the standpoint of making sure that we’re going to be a reliable engine for the patients that we serve, I think we’ve built those bones. After a couple of near death experiences over the course of the last several years, and tough markets, et cetera, et cetera, I think we have now arrived at kind of the starting line is how I see it for Bridge, where we can pick up more programs. We sort of understand how to structure things from a corporate standpoint effectively, and most importantly, move ideas forward as quickly as possible to the marketplace for patients.

Darren [00:05:55]:

So we’re at the kind of epicenter, both physically and from a time standpoint, of this tectonic shift that’s happening in technology with AI, generative AI, I imagine that’s impacting your ability to scale this and reproduce the capability you just talked about. But where do you sit in that big kind of paradigm shift and how’s it affecting how you think about your business?

Neil Kumar [00:06:22]:

Yeah, it’s an important paradigm shift, but actually the most important paradigm shifts for us probably occurred 15 to 20 years ago, and they’ve only accelerated over the course of the time frame that we’ve been around at Bridge. And they’re really threefold. One is ever cheaper exome and genome sequencing. The second is the availability of large databases, what we call longitudinal databases, that may or may not take advantage of AI, but effectively put in context both genotypic information and phenotypic information, effectively how patients are presenting with conditions. And then the third has been an interesting march toward the development of therapeutic modalities, things like gene therapy or genetic medicines, in concert with traditional modalities like small molecules, to allow us to target those well described monogenic conditions at their source. So those three things, genome sequencing databases and therapeutic modality evolution, really has allowed us to take on many more conditions in this rare genetic disorder space than we were able to even a decade ago. And so you layer on AI on top of that. You know, when I was in graduate school, we were finding one to two disease causing genes a year. Today we’re finding a couple a day. And in large part that has to do with both the technologies I just referenced as well as AI, allowing us to accelerate our understanding of what a mutation is doing in the context of a cell, what is it doing in the context of the shape of a protein and things of that nature. So I see it having impact now, and probably the impact is going to be much broader in five to 10 years.

Darren [00:07:56]:

So I want to turn our attention to you as CEO. Were you CEO day one or how did that come about?

Neil Kumar [00:08:03]:

Yeah, so I was in venture capital before and looking at each one of these types of conditions and trying to start a separate company around it. So I’d started a company alongside several other founders and folks that put it together in the hypertrophic cardiomyopathy space. We had interest in doing a couple other things, but it was a long process to get it through the investment committee and then set it up. And then it was just one condition. And so the observation was, can we put something together that basically can drive a lot of those ideas forward in parallel and can we sort of put it together with a new type of corporate model? Like I like to say about BridgeBio, think about everything you’ve learned about the pharmaceutical industry and then multiply it by negative one. That’s kind of what we’re seeking to do. You’re not going to see any big buildings or helicopters taking people around. Because we are focused on small marketplaces, we tend to redesign almost every aspect of the discovery and development paradigm. And we couple it with a new type of business model that’s decentralized, that allows us to finance in different ways, including debt and equity. And so around the time I was looking for kind of a new solution to move things forward, I met Andrew Lowe, who’s a professor at mit, and he had hypothesized that the right way to move drug discovery and development forward is a much more decentralized, parallelized type business model. And so he and I put our heads together and came up with the foundation for bridge. And then folks like Charles Homsey, Frank McCormick, Richard Scheller, some of my scientific co founders jumped on and we began our efforts then.

Darren [00:09:32]:

So I’ve heard it described as a bit of a hub and spoke. Right where you’ve got.

Neil Kumar [00:09:35]:

It’s a hub and spoke.

Darren [00:09:36]:

Yeah, yeah. These individual subsidiaries focused on one condition and they’re sharing resources, bring that to life. Because it’s so novel and it is emblematic of the new way you’re trying to disrupt really drug discovery.

Neil Kumar [00:09:52]:

Yeah. And really the hub and spoke arrived to us basically trying to solve three different things. One is we wanted centralization of some parts of the platform platform so that we could be hyper efficient, both time efficient and cost efficient. And so often a biotech which is only working on one problem might, you know, get something into the clinic. It doesn’t need its discovery resources anymore. And so then they cut it. And then those discoverers end up at some other company three years later, it’s very inefficient. So we wanted the central platform, gna, manufacturing things of that nature that you could take when you need it and give it back when you don’t. We wanted diversification because we live in a lottery ticket industry. You know, the statistical way we define it is mode negative, expected return positive. But it’s like a card game where you’re mostly losing, but every once in a while you win. So you need diversification in that because you can’t predict the winners. And then the third piece of it though is we want to focus at the level of each effort because the right biology crew to understand condition X is not going to be the same crew for Y or Z. Plus you want incentives at the level of that drug, that medicine that those folks are working on. So how do you do that? You basically create affiliates or the spokes and each one of those spokes is targeted at a condition, but they’re hooked up to a hub that provides both financing and some of those centralized efforts and also cuts down the things that aren’t working and doubles down in areas that are. And really it’s not all that novel when you look across other industries that are mode negative, expected return positive, like oil and gas is financed in this way. Movies are often financed in this way. It’s just we hadn’t seen a lot of it in biotech, which I think is the opportunity here. The hub and spoke model not only should allow for more efficient production of drugs, as I think it has over the last decade, but it also should allow for new types of investors to come into the space. And we’ve seen that through Bridge Bio in terms of attracting private equity debt holders, other sorts of folks like that that don’t traditionally participate in the high risk biotechnology marketplace.

Darren [00:11:52]:

Any drawbacks, things that you’ve struggled with in this sort of novel approach?

Neil Kumar [00:11:57]:

Yeah, lots. How much time you got? I mean, I think anytime you’re doing something completely new, there’s a lot of head scratching and that can become very difficult in what we’re in today, which are narrative driven markets. So a couple of things that come to mind. Number one is people like the description of a company as associated with a certain moat that makes sense to them. So it’s like I own this biology platform or I own this set of IP around gene editing, Whereas in a hub and spoke model you’re doing a lot of different things. They all arrive at sort of the same thing. You’re targeting well described genetic conditions at their source. But we do different sizes of markets, different therapeutic areas, different modalities. And so that can be hard for investors to understand and to give credit for. I think second is the levering of a company that’s early stage. You don’t often, often see the amount of debt, you know, that we’ve been able to raise over time associated with company that, you know, up until a year ago didn’t have any revenue. And so that can throw folks off a little bit. And then thirdly, I think for the people that we’re hiring to explain to them, are you at the hub, are you in a spoke? How do those incentives work over time? That, that has been a little bit of a challenge. But I think over time people have, and with some success stories people have arrived at. Okay, like, this is a. This is a pretty interesting model and one that seems to get you through the tough times and allow to drive success in the areas where scientifically we can do something special for patients. So overall, it’s been good, but many drawbacks.

Darren [00:13:31]:

Yeah. As I hear you describe all of that, I’m picking up a set of traits, and it just so happened to begin with the letter C. So I’m just going to name them contrarian, courageous, convicted, and confident. And I’m wondering if you would agree that those are traits that are unique to you, and if so, if not, what would you replace them with? And if so, I’m curious to go back in time and really understand, like, where did. Where were these traits formed out of? Like, what experiences gave rise to who you are today?

Neil Kumar [00:14:04]:

Well, first of all, thank you. Those are just some of the traits that my wife might associate with me. But our partners are usually our, you.

Darren [00:14:14]:

Know, our biggest truth tellers. So I’m. It’s a good validation. Yeah.

Neil Kumar [00:14:19]:

You know, I think when I think of those traits, honestly, I think of the parents and patients that we have the opportunity to serve. Not so much me. I honestly feel like I’ve been just so extraordinarily lucky to be in a space where I get to draft off a lot of the courage. And I mean, think about the experience of being a parent and understanding what this thing is and the odyssey of diagnostics and then the odyssey of trying to find a partner that you can work with and spaces where, you know, large pharma is not interested. So I think all of that is maybe just a reflection of where I’m at. The contrarian piece for sure, has been around since I was young. I don’t precisely know where that comes from. To be honest, we look for it, we try to recruit for it. I don’t know if you’ve ever read that. There was an interesting polemic that was written by John Hardwig, I believe, on epistemic independence, long time ago at mit. And he had posited that everyone is on this trajectory of either trying to rederive everything for themselves, but you probably waste your whole life rederiving the theory of gravity. And you know, that’s a waste of time. You should just accept it. And then there are people who accept everything and they’ll never do anything new. And that’s a lot of folks. But most people are in the middle somewhere. And we like to recruit people who are a couple clicks over to rederiving everything themselves, first principles, knickers, whatever it may be. And I think I’ve always been that way since the get go. Maybe it was growing up a little different in, you know, a town where there weren’t a lot of people that looked like me. I don’t know what it was. Maybe loving Bob Dylan from a young age. It’s hard to tell what it is, but definitely we’ve got that streak here at Bridge, and I have it myself.

Darren [00:15:52]:

How do you assess for that trait in other people when you’re interviewing really smart, talented people?

Neil Kumar [00:15:58]:

Well, I don’t want to give away all the secrets, but we ask a series of questions that I think pretty reliably have gotten us there. We do always ask, given your experiences, what’s one thing you look at and you see the world doing it in this way, and you just think, that’s idiotic. Why do they do it that way? So we ask that question and the best of our recruits have, like, an answer that immediately strikes everyone. So it’s like, ah, yes, thank you for asking that. We ask a couple different types of questions in and around where a chip on your shoulder might come from. Because I think having a chip on your shoulder allows you to be a bit contrarian at times. That arises from all sorts of different backgrounds. But yeah, and then we try to assess people’s understanding of theories. Like, it could be any theory. Like, we’ll often ask, like, what’s your favorite theory and why? And what we’re looking for there is that they have thought deeply about how humanity organizes or why we organize as a company or some theory that has to do with biology or physics. And then they’ve noticed it’s applicability in certain cases and the absence of its applicability in other cases. And you can see Them really struggling with. Yeah, just how predictable this, this world is or isn’t. And most people who are deeply thoughtful about that answer, you know, tend to, tend to be a bit contrarian. I don’t know why, but like, yeah, I’m getting this.

Darren [00:17:21]:

The sense that Bridge Bio maybe was born out of the implicit answering of those questions, you know, could have been, in part.

Neil Kumar [00:17:28]:

Yeah. That’s interesting.

Darren [00:17:29]:

And Peter Thiel has this famous question, interview question where he says, what’s the one belief that you strongly hold that very, very few people would otherwise agree with? I’m wondering whether it’s that question or something similar. Just asking you whether it’s something that was the basis of founding the company or something that you’re holding now that is just different than the rest of the world sees it.

Neil Kumar [00:17:53]:

Yeah, I think Zero to One was published right around the time that the Bridge was starting, maybe a year after. But we always used to hand it out along inside T.S. eliot’s four quartets for anyone who starts, because the stuff he talks about in there. And I will answer the question on definite optimism and secret finding and feeling like you’re part of a cult, but that’s directed towards something productive. All of that is really fundamental to our culture. The difference I think is although we aspire to be an engineering like company, probability of technical success is still well below 50%. So how do you keep the definite optimism, but pair that with an understanding that most of everything that you’re going to do is failure. Failure in the context of trying to find something that you swallow, transit the gut, gets into the blood, finds the right cell, reliably binds the right target and then changes human behavior at a P value of less than 0.05 that you can measure in the clinic. That’s hard stuff to do and generally it takes a long time and it’s generally laden with failure. So the T.S. eliot book is about how do you deal with that failure and get into the mindset, almost the eastern mindset of divorcing yourself, divorcing process from results. But I think for us the contrarian mindset is sort of many fold. It really starts with the fact that to do this right and this means to start from an early idea and to make a medicine that really matters for patients that is a super long 10 plus year, super capitally intensive and super high risk business. And so the fact is most people are not cut out for that. Even most people in biotech are not cut out for that. And so they sort of subdivide the industry and they just try to get in and get out at a higher price point. And so it could be venture that gets in early and tries to IPO or sell something. It could be a hedge fund investor that gets in as the thing, IPOs along the middle ground. But there are very few people who are focused on the NPV of the asset, like the overall economic value and what it could do, especially in these small markets. So that was the first thing that we thought of is like, look, there may be stuff that we’re working on that is never popular for big pharma. And you know, our proposal is not to sell it. Our proposal is to build a generational business, but it’s going to take some time for us to do it. So that’s, that’s one set of contrarian beliefs that has to do with what, what is the fundamental value of a program. Another set of contrarian beliefs has to do with how do you organize? You know, we, we have a concept of a minimum viable team, minimum viable process. We have to do that because the marketplaces we’re going after are small. But we do it also because small groups of individuals can accomplish a lot and have a lot more fun doing it than I think, the large bureaucratic types of organizations you see traditionally in biopharma. And so we have, on average, much younger teams. We have teams that pair sort of young all stars with very experienced R and D practitioners. And we have a totally different mindset in terms of every minute matters and how hard we want to charge it, individual problems. So that’s another contrarian belief we have. It’s just how we organize. The third is how we finance. You know, as I mentioned earlier, that the capability and the wherewithal to really try to lower your cost of capital aggressively. That’s not something that most people do most because they don’t think about economic value. They just want to raise enough money to ultimately sell the company. And all of it comes back to we want to be in this space that is mostly overlooked for a long period of time in a sustainable way. And that’s just not the objective function for most folks. So I think, yeah, there’s a lot of contrariness built in here.

Darren [00:21:26]:

Yeah. Let’s turn our focus to you as CEO. And I’d love to if you were to describe in narrative form what the evolution has been for you in that particular role as leading the company. How would you describe it last nine and a half years? What have been the big evolutions or shifts or learnings along the way?

Neil Kumar [00:21:47]:

Good Question. I think when you start, regardless of how much TS Eliot you read or Power of Now or whatever, it’s like you are so personally wrapped up in trying to put a dent into a universe. I mean, no startup is asked for. So part of it, it’s like you see this unmet need, but if people were asking for it, someone else would have done it. So you’re really propelling it forward. And that energy can be, you know, it’s intoxicating, it’s exciting, it’s pretty hardcore. You push people in ways that, again, are, I think, energizing, but also insanely tough. And that’s kind of chapter one of it, right? You’re bringing it to life. You’re all the time, you’ve got a small group of individuals who believe passionately in this idea that may not be taking form in a way that’s like super popular in the world, but you’re pushing and you’re pushing and then you start to see a little bit of success, and then you get even more hyperactive and tough, and then failure occurs inevitably, or at least it did for us. And then I think the second chapter of my leadership journey was at once persevering through that, knowing that we were building something important still, but trying to divorce that terrible setback from my own person and trying to understand how I could come to peace with kind of where I was at when my motto is family and excellence, and the excellence falls out and you’re going home every day and you’re just. It’s tough and you’re losing colleagues and all of that. And I think that second chapter taught me a lot, but that was definitely a distinct chapter in the book. And now the third chapter, I think, is. I don’t know how I would frame it, but it’s a bit like trying to take what worked in the first chapter and pairing it with the second chapter and also acknowledging that lots of different languages are being spoken at this company. Now, unlike the first chapter that all have to work in concert. We’ve got commercial, we’ve got manufacturing, we’ve got development, we have early stage discovery, we have various financial voices. And how do you kind of keep all of that together with a coherent view? And still that strength of putting patients first, every minute matters for the patients that we serve, but do it in a way that you feel ultimately will build the bedrock for a generational firm. So I’m just learning that this is what I’m working with Andrew on. But yeah, those are kind of the three chapters, I think about writ large.

Darren [00:24:17]:

I think one of the things I find founders and CEOs struggling with is talent, particularly in companies that are you would define as generational. Right. Where you’re trying to do something fundamentally different and it’s significant and it’s big and it’s hard. You by definition are asking people to do insanely difficult things and when they fall short or you’re recognizing that you need new people, it can be disruptive and tough. And I’m just wondering how you’ve dealt with what I imagine has been a recurring phenomenon for you, which is just making sure you’ve got the very best people and demanding the most out of them.

Neil Kumar [00:24:54]:

Yeah, I think it’s an important point because the sustainable competitive advantage at Bridge is really a people and a process. That’s all it is. It’s not I own distribution to cardiologists. It’s not I own the IP for a specific gene editor, as we discussed earlier. So how do you maintain that people in that process is something that we think a lot about. And it actually, it’s been ingrained at this company since, since we got going. So, you know, we have a lot of turnover. We have a pretty strict, I’d say, review system every year. We’ve done a lot of work and I’ve personally done a lot of work to make that completely non emotional because I think actually people who come and they enjoy it and they stay here, have a good time, there are people who come, don’t enjoy it, and they go off and do great, great things. So I’m very proud of our alumni network as well. So I view it as a place where you can learn, but it may not be for everyone for a long period of time. And I think we were able to have those conversations pretty openly with our employees. And that actually has unlimited talent. And I would say that that has improved our ability to get. You know, I was at a conference the other day and someone gave us the compliment. It’s like this firm bleeds talent. Hopefully that didn’t mean that we just bleed it out and everyone else is grabbing it. But I think we have done a good job of showing that there’s a variety of different career paths that are available to people who are very smart and hardworking. And therefore we are able to attract a lot of people who are like that. You got to remember when I joined the biotech scene, it was smaller, maybe 2009, 2010, but there weren’t a lot of career paths for young hungry folk. It was like, just do your time for 20 years and then maybe you’ll become a senior director of something. Not to say that there’s anything wrong with that career path, but I think it’s not for everyone. So I think we’ve been able to turn that on its head a little bit and get good talent because of it. But yes, it can be a severe culture in that you’re giving feedback a lot and feedback is a gift and we try to practice all of that, but I think it works.

Darren [00:26:53]:

Yeah, this is something that I think is a pattern I see over and over again. I want to just maybe play back to you and see if you agree with it. And I think you, by what you just said you do, is if you are trying to build a truly breakthrough or generational company, it’s not only okay to have a culture that may not be right for everyone, it’s a fundamental element. It should be distasteful to a meaningful percentage of people because that by definition means you’re building something distinctive. And to build something great, you need to be distinctive. And I find that the founders and CEOs that embrace that, don’t misuse it, but use it as a strength, are the ones that finally kind of figure out this talent issue and problem that vexes a lot of people.

Neil Kumar [00:27:39]:

Yeah, I agree. And there’s something. I used the word intoxicating earlier, but there is something intoxicating about being around a bunch of like minded, hungry individuals all with distinct talents. Because drug discovery and development is a crazy team sport. Like when we started, we didn’t even want an org chart. It was just a swarm of people because I don’t know how to do CMC in China and that person doesn’t know how to do this specific western blot assay for TTR stabilization. And all of us together though, when you’re hard charging, you’re really questioning everything, first principles, thinking. And you’re all together on a Sunday night, working hard. There’s something really fun about that. And it’s not for everyone, but for those people that it is, yes, I think it’s really great.

Darren [00:28:23]:

And maybe to return to the families and the parents and the children who sit at the center of everything. In some ways when you think about them and what’s at stake afford to not demand that level of performance from each other. So I’m sure there’s a really virtuous cycle in all of that.

Neil Kumar [00:28:42]:

And one of the things is our first value at the company is put patients first. And that’s if you go to almost any Biotech, there’s some version of put patients first. And what I always try to tell people is that a value is nothing until it comes in conflict with something else that’s somewhat valuable in your life. So putting patients first means not putting your colleagues feelings first, or your team first, or sometimes even your honeymoon first or your home. Unfortunately, it requires sacrifice and I’ve seen it time and time again from the individuals that have contributed mightily at bridges. Like they’ve made those sacrifices to put patients first. And I think there’s a lot of firms that say it, but I don’t see the trade offs here. We try to live that.

Darren [00:29:26]:

Yeah. So I promise to come back to a condition and to have you describe what is it like at the early stages of defining, unpicking a certain area, meeting parents and children. Can you give us an example of that that might bring this central part of what you’re doing to life?

Neil Kumar [00:29:45]:

Yeah, you know, I’ll talk about the first product that we had approved, which is one that the marketplace didn’t pay so much attention to because it only affects 150 children or so in the United States and Europe. But it’s a devastating condition called molybdenum cofactor deficiency, type A. And like all of the conditions that we try to make medicines for, the bad news is it strikes with devastating consequence. None of the children with this disease will live past three years old, absent of therapy. But the good news is it’s very well described biologically. Every single piece of the pathology arises from a specific mutation in a gene we know well called MLCS1. And so when we got involved with this condition, we actually met two parties. One was a clinical investigator who thought he had a good idea for how you could actually cure this condition or target the well described disease at its source to do something profound for kids. And then we met the parent advocates of which there were maybe 20, 20 families that were together and a few of them had already lost their children, but they were so courageous and still wanting to sort of pay forward the learnings that they had and hopefully the pushing forward this idea of what could be a medicine. And so we met with them, understood profoundly what the unmet need was, understood that there was this opportunity for us to help these kiddos. And although it wasn’t, you know, NPV huge, it was NPV positive because we were so efficient with how we ran that clinical trial. And you know, today, maybe six months ago, I had the opportunity to meet one of the young boys on our medicine now, six and a half years old, meeting most of his development milestones with this medicine that basically puts back what’s missing here, which is a monophosphate in the brain. So a beautiful story. And really the idea came to us from the clinical investigator, the courage from the patient community, and then we just did the rest and took it to the marketplace. So that, I think is a great story and emblematic of the type of work that we do. We’ve got small, small conditions like Canavan disease. These are diseases that most people have not heard of. And then we have some larger ones like ATTR cardiomyopathy, which is a good chunk of heart failure with preserved ejection fraction, or achondroplasia, which is the most common form of dwarfism. So we work in big and small when it’s genetically defined, but all of it comes together to allow us to serve patients across the board, I think, in pretty profound ways when it works.

Darren [00:32:16]:

Yeah. Incredible story. And is that process of picking the next condition area a centralized process, or can anyone in the company sort of come up with an idea and have autonomy to pursue it?

Neil Kumar [00:32:29]:

Anyone in the company can come up with the idea, but it has to go through what we call the investment committee. And the reason for that, by the way, is. And this is a little odd, but it’s very idiosyncratic to biotech. Traditionally, biotechs get started with, or oftentimes they will get started, okay, we have gene therapy for the brain, but now what disease should we go after? And so the disease is almost an afterthought. Whereas my supposition in starting Bridge was the most important thing we’re going to do is choose which problems to work on. That means the science has to be beautiful. That means we have to have the ability to target the condition at its source. And we could go through all the different diligence details that overlay those two assertions. But it’s really important because I’ve seen great teams in this industry do not so well because they’re just working on a problem that’s too challenging or not well thought out. And I’ve seen some poor teams actually do all right because they’re working on a well described condition. And the glory of human genetics, especially in this genetic disease or Mendelian disease landscape, is that it allows you to pick the right problems to work on. So we think a lot about that and it is centralized the way we choose those problems.

Darren [00:33:34]:

If I were somebody thinking about founding a business and disclaimer I’m not.

Neil Kumar [00:33:40]:

Well, you’re running a business.

Darren [00:33:41]:

I’m running a business and helping people that are founding businesses. I mean, I’d be pulling out so many gems from this conversation, particularly around being contrarian. The importance of mission, the power of a distinctive culture. There’s so much clarity in the idea that you had and the business that you’ve built. I’m also wondering, is there anything else if you’ve got that person that’s either thinking about or has founded a business but early on, Any lessons from your decade now that you’d offer or is there one in particular that would come to the top?

Neil Kumar [00:34:18]:

There are several, but maybe I’ll just say one that I was thinking about earlier this morning, which is I was trying to describe to a founder because he was talking about doing a series of meetings that he didn’t think were going to result in much. And as the glory of, of doing a startup or working on a company like ours is the low yield, high impact work is where it all happens. And so unlike, you know, when I worked at a big firm or a big consultancy, it was like, let’s target these guys because there’s a higher probability that it could work and blah, blah, blah, we sell the business. The secret finding the, you know, the bumping up against the ecosystem and like surprising to the upside. All of that stuff is low yield build work, but it’s work well worth doing. And so like, that would be like one thing that I would want to leave. There’s a lot of like conversation these days about like, oh, like you spent your time doing this. That’s a time trade off. Like, like we’re not running out of time. Most people are not running out of time. You know, I was like, you still have another hour in the day, two hours in the day, three hours. You can keep stretching, you can keep going, but doing that work, doing that, you know, probability of 1% activity, I find it can be very, very important in a biotech or any type of startup. And when you have a lot of people doing that, you’re going to get a break. It’s kind of like financing too. Everyone asks me, like, what’s your financing strategy? Well, if you’re lucky enough to have a financing strategy, like I can now because I have a little bit of a reputation. You know, Bridge has a reputation. But when I started, there was no financing strategy. It was just, you ask everyone for money and you. I could have never predicted who our first investors were going to be. But we got lucky. But we also built a muscle for the financial downturn our own downturn. There was no circumstance under which I didn’t feel like we were going to be able to go get ourselves the liquidity to keep doing the important work that we need to do for patients. So you build muscles in doing that low yield work also that I think most people just simply don’t. And you can see it now. And biotech’s been in a three year downturn. Management teams that have never really experienced how to to be hungry and scour the entirety of the landscape are failing. So yep, that’s another idea I think I would leave with people.

Darren [00:36:26]:

Yeah. Being a founder and CEO is an all consuming business. Your second chapter has been beginning to separate your own identity from the success of the business. But they’re so integrally tied and I’m curious to hear life outside of Bridge Bio to the extent that even makes sense to you. You’re a family man, you have interests. What does your life look like? Where do you spend your time? What brings you joy?

Neil Kumar [00:36:55]:

I do go back to the family and excellence piece. I think family is a big part of it. I have two younger daughters and it brings me a great deal of joy to just be at home and hanging out watching basketball with them or playing tennis or whatever. So I’d say being a father, being a husband is a big part of it. I’ve been trying to work in as much balances as possible. I read a ton. I love the page, you know, obviously not as good at talking as I am at reading or at least so I like to do that and you know, like everyone else try to try to stay active but I don’t know. I was talking to Andrew about this the other day. I think like I grew up in some circumstance where I just had a lot of time to like I love music, I adore it and like a new album just came out from Bon Iver or whatever. I’ve just been listening to it constantly and just walking around the block or whatever, taking time times to do that. Just think about stuff and that’s what reading allows you to do too. Helps me balance out and honestly it’s a fundamental part of my life. So it’s not a lot of productivity outside of work. Hopefully it’s productive at work and then I go home and I’m just hanging out or thinking or listening to good music. Yeah, but that’s important.

Darren [00:38:08]:

Yeah. You’ve mentioned books now a few times, specific titles. Any one in particular that you haven’t mentioned that you might say like God, if I were to name one book that was formative. It would be this one. Curious. I’m a big book reader too, so I love hearing the answers to these questions.

Neil Kumar [00:38:27]:

Yeah. I mean so many it’s hard to. Hard to choose from. You know, one that, that speaks to the founder experience that, that I relate people to. Or maybe two. One is Shoe Dog, which I know you’ve read.

Darren [00:38:39]:

It’s right behind me actually.

Neil Kumar [00:38:40]:

Yeah, I can see it. It’s. I didn’t appreciate to what extent Nike was Phil and the reflection. There’s a beautiful story he tells about what is Nike. It’s the person standing under the lamplight cheering the last person to cross the marathon finish line. I mean the ethos of that company is so him and how he came up. So I love that. Another book on CEOs that I really admire is called Outsiders. Eight CEOs that really live the whole I’m going to drive this business in the way that I think is theoretically right. ROICG and wac. It was across a variety of industries, but quite enlightening. And then the other book that has profoundly affected maybe three books that have profoundly affected. And I’ll stop there. The way that we built this firm is Scale by Jeffrey West. How things in a decentralized or centralized way can grow or will fail to grow. Another is called Swarm by Mark Moffat. Jeff Just how different creatures come together to solve complicated problems. And long story short, it’s not always hierarchical with one person on high telling everyone what to do. So I think there’s organizational structures that don’t serve us well when we’re trying to solve complicated things. And then the last is Strategy by Lawrence Friedman. It’s sort of a bid for the high shelves, huge book, but it’s on the history of strategy. And the best sort of takeaway that I can come to from that book is that that strategy writ large, like a ten year strategy, makes very little sense. The right strategy is to define what your core principles and values are and then react to an ever changing playing field by trying to apply it in the best and most opportunistic way. And I see science as that. I mean I don’t wake up tomorrow and say I’m only going to work on this type of therapeutic area. I’m only going to work with this type of modality. I try to stay responsive to whatever opportunities come about that helped me to help as many patients as possible. So those are the books that I. That I think about a lot, at least.

Darren [00:40:36]:

Wonderful. More gems. Thank you, Neil. Yeah. As we come to Close. Anything else that. That we haven’t covered that you’d want to share or maybe something we have that you’d want to maybe add to or put a finer point on?

Neil Kumar [00:40:51]:

I mean, I guess one thing that I was reflecting on the other day with one of my mentors is how, like, when you’re starting a company, how all the different inputs you’ve had over the course of your life sort of integrate into the thing. And I’ve been very lucky to have a great series of mentors starting in my undergraduate years on the scientific side. But I was reflecting on the fact that the co founder I was talking about earlier, Andrew Lowe, who’s a professor of economics at MIT, I met him because during my PhD at MIT, I was trying to model the way self care move and it turns out to be an autocorrelated stochastic random walk. And he just happened to be the expert in that because that’s how stocks move. So I met him 20 years ago and then 20 years later I attended one of his lectures and said, hey, we should try to apply some of your principles to starting a biotechnology firm. And likewise, my mentors from 3rd Rock are all co founders with me here and I continue to work with them. My graduate advisor, his input it in a lot of different ways to some of the science that we do, and all the way back to early albums that I listen to from Dylan, making their way into every board memo and all of that. So don’t discard anything that you sort of come through. All of it can come together in a nice way as you put together a company and make it your own. So I’ve always been struck by that. It’s kind of crazy just how many different ingredients there are that all get mixed up ultimately in making a company.

Darren [00:42:24]:

Yeah, it’s pretty magical. When I meet and work with founders, there’s always usually at least one thing that stands out as being really distinctive. And what I’m taking away from our conversation, having known you a bit before Neil, is there’s something really, really coherent about you and the company. Its founding, its story, its promise to the world that is particularly unique. And I imagine people listening to this conversation are picking up on that. But I just wanted to play that back for you and share that observation. It’s been incredible to sort of catch up through this conversation and to hear about this incredible company and the story behind it and your animating force in bringing it to life and sustaining it and growing it into what I. That I’m. I’m going to guess is going to be a really generational company. So thank you for your time.

Neil Kumar [00:43:18]:

Thank you. Appreciate the time and great to catch up again.

Darren [00:43:21]:

Likewise.

It’s hard not to be deeply moved by Neil’s commitment to such an important mission and convinced of his steadfast commitment to making that mission a reality. I look forward to being with you you on the next episode of one of one. Until then, I hope you live and lead with courage, wisdom, and above all, with love.

In this episode of One of One, Darren sits down with Hanno Renner, co-founder and CEO of Personio—the Munich-based people software platform that has become one of Europe’s most successful tech companies in the last decade. Together, they explore how Hanno’s deliberate pursuit of discomfort has shaped his growth as a leader, and the daily rituals that help him stay grounded in that mindset. The conversation also delves into Hanno’s ambition to close the technology gap between Europe and the U.S.—a mission that fuels his discipline and drive. Whether you’re a founder, operator, or student of leadership, this episode offers a compelling look at what it takes to build with intention.

Timestamped Overview

00:00 “SME-Friendly Workforce Management Solution”

05:35 Building Europe’s Next Software Leaders

08:45 “People: The Key to Success”

11:00 Co-Founders Define Roles Early

15:18 Driven by Challenge and Resilience

17:10 “Startup Challenges with Quick Growth”

21:47 “Shifting from Growth to Profit”

25:41 Balancing Autonomy and Guidance

28:40 “Early Stage Startups: Key Advice”

30:50 “Honest Self-Assessment in Leadership”

35:20 Embracing Mindfulness and Active Living

37:20 Sailing: Adventure and Calm

40:09 Europe’s Cultural Influence and Economic Gap

43:32 “Urgency Bias in Hiring”

46:25 Next Episode Preview

Full Transcript

Darren [00:00:02]:
Hi everyone. Welcome back to another episode of One of one. I’m your host, Darren Gold, CEO of the Trium Group. My guest today is Hannah Renner, co founder and CEO of the Munich, Germany based company Personio, a people software platform focused on small and mid sized companies and widely regarded as one of the most successful technology companies founded in Europe over the past decade. In our conversation we explore how much Hanno’s willingness to put himself in uncomfortable situations has contributed to his success and we discuss his passions and daily rituals that have helped him cultivate this unique trait. We also talk about how Hanno’s desire to level the technology playing field between Europe and the US serves as a fundamental driver of his discipline and motivation as a leader. Please enjoy this wonderful conversation with Hanno Renner.

Darren [00:01:00]:
Hanno, it’s so great to see you and so thankful for you being on the show and I’m really looking forward to our conversation together.

Hanno Renner [00:01:07]:
Thank you for having me, Darren.

Darren [00:01:09]:
You’re very welcome. You are the founder and CEO of Personio, which many regard as one of the most important and significant technology companies in the last decade founded in Europe. And so I’m really curious to start with this incredible company that you lead and you could describe for those who aren’t familiar with the company or aren’t users of the company, what exactly Personio does. And we’ll start there.

Hanno Renner [00:01:33]:
Yeah, Personio is we call the Intelligent HR platform. It’s a holistic people platform that helps digitize the entire employee lifecycle. It’s specifically focused for small and mid sized companies, up to 5,000 employees and helping them from recruiting, paying their employees, performance management and pretty much really all people processes based on a strong and robust foundation in the system of record. Our mission is unlock the power of people for organizations around the world. So really help them get the most out of their people and make it a fulfilling workplace for the people.

Darren [00:02:05]:
Great. Yeah. And so there’s obviously big established companies in this space. Workday is one that comes to mind and we know Carl Eschenbach, the CEO of that really great company. I imagine you’re competing with big companies like that. You’re competing with other newer entrants into the space. How do you position yourself relative to the the other companies in this space of kind of providing the software system of record for people function?

Hanno Renner [00:02:33]:
So it’s greater to call out a workday because ultimately you can think of pzone like a combination of workday and servicenow for the SME. So really making sure that people data and people workflows gets democratized to this population that so far doesn’t have the access and the benefit from these enterprise grade solutions. And the reason why? Well, workday might work great for a 15, 20,000 employee company. A company with hundreds of people, a few hundreds of people, or even tens of people won’t have the resources neither in house to implement and to adapt those kind of solutions, but also not to pay an Accenture and others a lot of implementation fields. Instead we needed to build a platform that’s much more user friendly and easy to use for non technical users, like a regular HR manager that needs to be able to establish an onboarding workflow or change the absence policies just with a matter of a couple of clicks rather than requiring internal implementation teams. And that’s where we really helped those teams. And the other thing that is different on the enterprise, a lot of companies choose a lot of best of breed solutions for different areas because think about a company with 10,000 employees, they have an entire department just focused on recruiting, entire department just focused on compensation. And a company with 300 people has one HR team that’s responsible for the entire employee lifecycle. So there’s a real benefit for them, not just from a cost and ease of use perspective, but also from a benefit of deep integration, of having all of these tools come out of one platform and thereby being deeply interconnected and benefiting from someone that you have in your workforce, planning in Persona, you directly go into recruiting, directly go into the payroll and then go through the performance cycle without having to switch systems.

Darren [00:04:12]:
Got it? Yeah. So you mentioned SME, and for those of listeners who aren’t familiar with that acronym, Small and midsize enterprises. Right. So you’ve made a specific choice to target a segment of the market that probably wasn’t being, you know, adequately served by the large players. You also founded this company in Europe, in Munich. Talk a little bit about the European focus, how you’ve expanded within Europe. And I’m guessing there’s something about the complexity of operating in a multi language multicultural continent like Europe that was attractive to you and you’ve somehow figured out how to do. Well, I’d love to hear a little bit about that.

Hanno Renner [00:04:53]:
Yeah, all great questions. Let me start with just our European roots in nature. And I think I never characterize myself as very patriotic being German, but I’m quite patriotic about Europe. I think the European project is an amazing peace project first and foremost. But also the economic integration of these countries and the culture here is fantastic and I like that. But I do believe when I Think about the economic impact globally. While Europe has many fantastic companies in many industries, when it comes to technology, Europe has been historically lacking behind we have one major Software player, that’s SAP, but they’ve been celebrating their 50th anniversary this year. So you can tell that there’s not as much, at least on the B2B software side, not as many great companies evolving out of Europe. And I think that’s a real gap and a real opportunity to build the next generation of globally leading software companies building out of Europe. And that’s one part of our mission of what we’re trying to do, but then particular to our space. Indeed, I think the part that’s attractive for us serving SMEs with HR in Europe is that it’s also a highly, a pretty large space. Oftentimes you are disregarded as okay, large enterprise companies need to go to the US because that’s where the big enterprises are. And that is true. But for small and mid sized companies, the European market is actually just as large as the US market, given how many of them there are here. And helping these companies across multiple geographies is a real, really exciting mission which we are going after. And thereby, as you said, helping them understand all the nuances of how your vacation is calculated in Spain versus the Netherlands and how you ensure that you, you can help them hire compliantly across these countries. And all these things are really exciting and they make it not easier compared to operating in just one country, but it makes it interesting. And having to solve that from the beginning, because many of our customers, even in Germany obviously are multinational, allowed us to then be able to build for other countries as well and expand to those.

Darren [00:06:50]:
Yeah. One note I want to just make sure I articulate is you’ve made a, what sounds like a series of really smart strategic choices about where to play and where not to play. And maybe we come back to that theme. But I think it’s important for listeners who are thinking about founding companies or building existing companies, the choices you make about where to play can be really, really critical and a critical component of your strategy. You also talked a little bit about Europe and the importance of Europe to you as a founder. And I want to come back to that because I think it’s particularly relevant given the world we’re living in right now. So let’s put a pin in that and we’ll come back to it for sure. And maybe where I’d like to go is like back to the origin story and I believe 2015, if I’m correct. But if you could take us back a decade or so to the founding of this company, the idea itself, like where it came from and what motivated you and your co founders to start the company, that would be great.

Hanno Renner [00:07:47]:
Yeah. So back nine years ago, we were still students at university and obviously a lot of companies, a couple of people since have told us, oh, but how do you come up with an HR company when you’re still a student? And in fact it’s partially luck and partially choice by choice. We decided from the beginning we didn’t want to look for problems that we as students had because typically those are not relevant problems that you can then solve and impact a bunch of people. So we really wanted to find something that is a truly important problem that we can solve for many, many people. And then the luck part was a friend of mine that was CTO of 100 person company telling me about their challenges with having all their people data in spreadsheets and not being able to manage them effectively and compliant and the data and so on. And then together with him we started building a first version. But then that was still why we were students. What then ultimately made us decide that this is a really interesting space to start a company in and worthwhile our time as well was essentially two core beliefs. The core belief number one is that people are the most important success factor of any organization around the world and that alone makes it interesting to be in that space. And then to the where to play. Core belief number two was that small and mid sized organizations are the backbone of economies and societies around the world. And I purposefully always talk about organization, not businesses, and also societies, not just economies, because there’s many of our customers that are NGOs, that are universities, that are even soccer associations, and other things that are not traditional businesses, but they still have people and still for them, people are the most important success factor. And when we combine these two core beliefs, it was pretty obvious that this is an important problem to solve and an interesting space to go after and one we could build a really great company in. And the one thing maybe to add to this was that at the time when we started the company, we were bootstrapped for the first year. So we didn’t really have any investors, but we did speak to a couple and many of them early on advised us against actually what we were trying to do. And being students, we were also trying to figure should we then maybe follow the advice of the investor? Because at the time every software company was supposed to be the playbook was solve One problem really deep, then go up market and build for the enterprise and then you end up with all of these point solutions that have been created over time. But what we realized early on, and not because we were smart or smarter than those investors or we didn’t even have any experience, but we listening to our customers, what we did learn is what I said before. A small midsize companies actually want one HR solution that’s integrated. They don’t want five different tools that they don’t know how to connect with and then have to change interfaces and so on. And therefore we decided that we wanted to go really help these companies in a holistic way, build across the entire employee lifecycle and thereby pretty quickly start to build what today is called a multi product platform. And it’s pretty sexy nowadays. And we are lucky that we were a little bit ahead of that trend. But ultimately there was something that came from listening to our customers, building those different products early on and investing into much broader suite of tools for our customers than we might have otherwise have done.

Darren [00:10:49]:
Was it clear that you were going to be the CEO of the company? And if not like why? Why you? What was it about you that made that a natural and I think very smart choice?

Hanno Renner [00:11:00]:
So I think we started, we were four co founders and we initially divided up a little bit. I mean initially you do everything anyway, right? But we had, it was clear there were two people that two of my co founders really focused on building the product. They had an engineering background and then me and my other co founders a bit more focused on our customers and on understanding their needs and essentially being a little bit of interface to those customers. But then once we sort of started to first define roles, we pretty quickly kind of made clear okay, there was one being the cto, one being sort of chief product officer or product responsible, let’s call it. Not that I think that the title so met at that age at that time, but then one was sort of focused on marketing and then I was sort of on sales, finance and running the company. And that pretty naturally meant that I was responsible for a bit of a broader function, not just one part of the company and then also obviously doing a bunch of external work, press and so on. And some of these things we didn’t really discuss who should do them, but it was natural that those were things that I find doing was reasonably good at. And that evolved in that way. I think we then for a while still operated as four co founders. We had these titles assigned, CEO, CPO and so on, but we didn’t have real reporting lines. And that was done at some point. Once I had several people reporting to me from different functions and my co founders were sort of separate functions next to me. It was more of an ask almost from them to say, hey, this doesn’t feel like a balanced setup. Now you’re spending much more time with these other topics, but then these things also should also be important to you. And so it’s almost a suggestion from them to change that setup. And that’s where we then changed the reporting line, I think at the end of the first year or something into me not just having a CEO title, but actually having everyone reporting to me from an informal perspective.

Darren [00:12:54]:
Got it. So that’s maybe an interesting jumping off point to go even further back in time. We can’t go that far because you were young when you founded the company. But I’m interested in kind of early experiences. And were there one or two early experiences that were really particularly formative for you, helped shape how you think about your leading, how you are in the world, and if you could maybe mention one or two of those, that would be great.

Hanno Renner [00:13:22]:
So I do think one of the things that prepared me, if anything can prepare you for an entrepreneurial journey anyway. But one thing that did prepare me was that I oftentimes put myself early in my life into situations where I wasn’t fully comfortable or in control with that situation. So for example, growing up, my parents never did any winter sports. I never really got early into skiing or snowboarding. But then time I did want to do it. I then quickly signed up to become a snowboard instructor. And obviously all the other people had snowboarded all their youth with their parents and so on. And I was sort of really trying to still be make it, but obviously being much more uncomfortable in that and equally a little bit at a later point when I decided to become a skipper of sailing boats. I had done some sailing before during my studies, but I’d never. That was actually at the skipper license training. It was the first time there was sailing a boat of that size with the actual big steering wheel. And obviously didn’t tell anyone that, but it was many of these moments where I chose to do things that I wasn’t fully prepared in. And I think that’s just that training, which I often compare founding a company is like being dropped into cold water and except the water never gets warm and you just keep being comfortable in that. By the time you figured out something, you’re again in the stage where you probably didn’t know what to do. And I think those were some of the experience I had in my life that put me into situations that then I think helped me be fine with that ambiguity and that uncertainty of running a company that I’ve never done before.

Darren [00:14:53]:
So this quality of confidence, comfort with ambiguity, willingness, and maybe even desire to put yourself into uncomfortable situations and quickly adapt and learn and figure things out and be good at them, can you trace that back to anything, any particular either moment in time or event in your life, or was that always sort of a part of who you were?

Hanno Renner [00:15:18]:
It’s a good question. I think if there’s something really underlying to that that drew me into those kind of situations, I think maybe it was just growing up generally and that I was just not always in a place where my parents could enable me everything and provide me everything and had a protected and a good childhood. But it was in a way that I always had to a little bit fight for things. And it wasn’t as comfortably available to me to either work for it myself or convince my parents and argue very hard with them. And I think that created a little bit of a, I guess, drive and robustness into trying to really get to those points and then also knowing, okay, sometimes when I push for something that I really want, you, you almost maybe push a little bit further and put yourself into, not just the easy one. I want this, what I could have. But you push a bit further and then you end up in a situation where maybe you weren’t really ready for, and then you try to figure it out as you’re in that situation. And I think that’s a little bit similar with a startup. You always want to be growing faster, you want to be more successful than actually what you could comfortably do. And then once you’re in that situation, you have to figure out how to manage and lead yourself and the company in that situation.

Darren [00:16:29]:
Yeah, it sounds like almost the perfect trait for a founder CEO. And so maybe we can go back to 2015, 16, you’re CEO of this company. I oftentimes hear from founders that the journey over the first 10 years or so can be divided into. Into chapters. Do you think about your journey in that way? If so, like, how would you describe, like, what’s the. What are the chapter titles or the phases of the last 10 years? And if they fall into distinct phases, it’d be great to hear. And like, what did it ask of you? I imagine you were stepping into the next version of your leadership constantly.

Hanno Renner [00:17:10]:
So, yeah, so I think one phase that we didn’t have as much that many startups search for much longer and probably was a bit of luck quite frankly, is that we pretty much from the get go had product market fit, which was good and bad in many ways. Good for sure, because you want product market fit bad because then we didn’t have time to experience and build a foundation and do things ourselves. But we had customers very, very quickly paying customers that were wanting to use our product and were demanding us to build a product further. And especially as I mentioned, because we started with such a broad offering very quickly they were like one customer wanted something here and one over here and that made it really challenging to keep up with the demands of customers. And then I think in particular the challenge with then growing quickly in the beginning is that obviously you’re not, maybe it’s probably the messiness of an earlier stage startup anyway, but you’re not as strategic. Okay, this is in that sequence. We’re doing it, but a little bit you’re learning from your customers and then you’re opening up things that you afterwards have to fulfill. And I still remember early on when we had a period of our product being a bit unstable and having downtime. Sometimes our customers then calling us and screaming at us for not being able to do that. And that was on the one hand a very painful phase. On the other hand, I remember also standing up at an odd team meeting during that phase and telling people, look, this is really painful. But it also shows that what we’re doing really matters. So customers, if we can’t, if our product is down, customers can’t run their payroll, they can’t access CVs for an interview they’re about to prepare, they can’t request a vacation or check who’s out today. There’s so many jobs to be done that they have to do in a day to day and that really stops their business if they haven’t. And as painful as it was, it also was validating that we had product market fit and we had something that customers really cared about and was important to their life. But to your point, so on different phases, so we didn’t really have a product market fit search phase. We started right into building for customers and scaling with them. But obviously there was this, there’s still this phase in the very beginning as a founder where you still do everything from. You’re selling all the time, you’re selling to customers, you’re selling to investors, you’re selling to candidates, you’re trying to convince people of this company that you’re trying to build. And you’re equally doing all the back office stuff from solving customer tickets to buying new toilet brushes for the bathrooms because those are order whatever. You’re just responsible for everything. And that’s obviously a phase in the beginning where you’re just literally the person running behind everything that needs to be done. And then I think the next phase starts when you start for the first time to create a little bit of structure. And that can become quite a messy phase in itself as well, because you might have some teams and parts of the org that are a bit more mature. Maybe you hired a first person that’s a bit more senior and then you lead them in a different way. But on the other hand, you still have maybe even a working student running a higher function or some really junior person. And I think that creates. But at least I think it’s a bit of an easier transition as a founder because you instill a lot of those in between phase. And then I think the next phase that I remember well was when we for the first time started hiring a real bench of management. And not yet we didn’t call it C level, but sort of a BP layer of people that had done that before. And I think that was an interesting one because I remember being quite intimidated by hiring these much more senior people coming in and then believing, okay, they’ve done all of this before, they would know much better. And what I learned from that phase and crucially today, and I still probably have a version of this because the execs you hire later always get always more mature and you hire great people, but you’re also then a little bit intimidated as they come in. But then what I did learn at some point was that as much as they have a lot of really valuable things to bring to you and to your business, they don’t have all that equally valuable context as you have about the business and the customer. And the real magic only happens if you bring these two things together and if you then jointly benefit from their learnings and trust on this, but also trust your gut and trust the things that you know about the business. I think I’ve often learned over time that even the most senior executives come in with a level of insecurity because they don’t know your business and they rely on you to also so give some guidance there and then jointly create the next version of the company. That I think was a big learning for me during that phase of hiring more senior executives.

Darren [00:21:18]:
Yeah, there’s a phase I think maybe you’ve experienced certainly a lot of founders have experienced over the last, call it three or four years, where we’ve returned to what I would call maybe more normal market rates of growth. And it’s called upon founders to rethink how they lead. And I’m wondering if that’s been true for you and what that phase has looked like. What are the big questions you’ve wrestled with?

Hanno Renner [00:21:47]:
Yeah, I think that definitely, I mean, the phase where capital was cheap and everyone growing gangbusters and Covid while we all were scared initially, everyone quickly realized especially also for technologies like ours went through the roof and there’s such a phase and we’ll come to the other phase in a second. But I think such a phase, as much as they look like on the outside and feel on the inside like the most successful phases because you’re growing so crazy, they’re actually the ones where you create the most amount of debt and the most amount of issues that you then later have to cope and deal with as well. From partially new product, potentially as well from technical depth, but really certainly new processes and systems that you set up in leadership structures and organizational design. And we think that was something which since now where both the economy has slowed down a little bit and certainly that zero interest rate period has changed and the public market expectations changed. It did. Also then it’s coming off a drug almost a little bit and then having to realize, oh no, we have to run this company differently. And we ultimately want to be a business that makes from €1, €1, 20 or at some point €2. And that really creates profits. And I think that’s where we then had to change a lot of of the way we’ve done things before. And that’s obviously not always painful, especially inside a company. It leads to a lot of change. And I think what changed for me in the leadership there as well was then to really try to go 12 layers deeper into each organization to understand what the real problems are and where they came from. Because if you talk to execs of the functions, everyone notices this, but mostly because they’re accustomed and it’s fully normal. I would probably be in the same position there. And then they’re noticing this for other areas, but within there, they of course have all these reasons why their organization looks the way they are and why this is the way it is. And it’s really hard to kind of really have. You have to go a few levels deeper into each of these organizations and to then point people towards the other. I think this part also in your organization maybe is not set up in the way it should be. And yeah, actually we’re slowing ourselves down because we don’t have the collaboration in the way or we actually have too many people in some roles or the wrong functions, or they’re not even knowing about other parts in the business. So I think that has become an area both to then restructure part of the business to understand where we need to make those changes. And then I think since I’ve just tried to continue to be a bit closer to some of these areas, to also keep learning myself to how can we avoid such decisions again and how can we be making them together in the right way?

Darren [00:24:18]:
Yeah. So for you in particular, I’m curious, obviously the word founder mode is being thrown around pretty liberally over the last six to 12 months as a way of describing, I think what’s being asked of a founder is to bring a level of inspection and introspection and sense of urgency and demand for accountability. And I’m just wondering, what has it been like for you? What’s been the challenge? What have you found easy? What are some of the lessons in this particularly interesting time over the last, call it, year or two?

Hanno Renner [00:24:54]:
Yeah. So I think one thing I would say on founder mode more broadly is that I would definitely think it’s a trait that we should not limit to founders, but we should demand it from everyone in the organization to go deep to know the details and to not. You can delegate tasks, but you can’t delegate responsibility. And the responsibility also of knowing what is the real problem we’re trying to solve here and why are we solving it in a certain way and is this the right way? Not just back off and say, oh yeah, I don’t know. And I’ve realized about myself that I’ve been becoming much more allergic to such kind of feedbacks of yeah, you have to talk to this person. It’s like, no, this is a really important problem. If I want to know about this, then it’s certainly an important topic and you should know that as well and you should be on top of it and you should at least know why we took which decisions. So I think that’s the. On a like, broader level for me personally, I do think it’s been the struggle of sometimes where do I. I initially was allowing myself to go deep and to really inspect and demand for these areas. I think I’ve overcome that. Now it’s a bit more of the how do you then still make sure that you’re not afterwards when you go deep in Something you keep the threat that it’s always then dependent on you and then people, because as much as you want to introspect and as much as you want to push for the really high quality buy and for the right outcomes and to ensure it’s done the right way, you want to avoid that. Then these people are paralyzed afterwards and with every next decision come back to you to ensure that it’s done how you want. And for some areas you might want that, and then you’re just very explicit and hey, let’s check in here again, or we do a weekly cadence or whatever. But for other areas, you just want to really be clear what you want in terms of outcome, but then still have them run that area completely independent of you. And I think that’s been an area where I had to. You also realize sometimes just going in with founder mode and pushing for some things leads you to then actually end up ending up managing these topics directly. And then you’re also not scaling yourself in an effective way.

Darren [00:26:54]:
And I imagine you’re still figuring that out, right? That’s a hard thing to get right. Is that right?

Hanno Renner [00:27:00]:
Yeah, I think it’s probably a continuous thing that you want an organization that scales for itself and you need to be in the details and finding that balance. Where to go deep and how to do that is something that I continue to learn and sometimes get really right. And then it accelerates some areas or can help with something. I think that was one permission I gave myself in realizing that because as a founder, all of the threads of information end up with you eventually. In some areas you just have better intuition and better information than anyone else in the company can have. And therefore it would be stupid then not to go in and not to allow yourself to say, hey, I think we can shortcut this. We don’t have to discuss all the things. I just know this from all the things I noticed the right way. And then some other areas, it’s completely different because while I have all the information at the top, there’s people closer to the problem that know so much about that problem that their local subject matter expertise is more relevant than my overarching sense. And I think figuring out in which cases my founder intuition and knowledge of all the history of everything that bubbles up to me is more relevant than the local knowledge. That’s, I think, the piece that is to be figured out for me constantly.

Darren [00:28:15]:
That’s a great distinction. I think really helpful to people that are trying to figure this out for themselves. I’m also curious, I imagine you get asked for advice from people that are thinking about founding a company or in the early stages of founding a company. Do you have a sort of single piece of advice that you give founders that is particularly unique to your experience and if so, what is it?

Hanno Renner [00:28:40]:
So if one piece of leadership advice, but we might come to that later because I think it’s less relevant to really early stage, early stage founding. But I do think when it comes to early stage founding, I think there is, I mean the obvious one is similar to what we were a little bit lucky and a little bit intentional about that. Is it really a relevant problem that you’re solving? I still see a lot of companies go, especially now where they are. You can build all kinds of things, but is it really a problem that will make a big portion of people happier, more successful in their work or in their daily life or whatever? And is that something you’re looking to solve? But then I think the other related one that was less of a problem when we were started because capital wasn’t as readily available as it is today is wait as long as possible with raising money is one I think maybe controversial. But one advice I always give founders because I do feel not for the effect. I think if you raise money from the right investors, they won’t try to influence what you’re doing. I think you still have all the freedoms to do it. But I do think once you take on capital there’s a different dynamic of how you run the business and what you’re trying to do. And it gives you maybe a little bit at least perceived less flexibility to also change the course because you maybe have pitched that you want to go here and now that’s on this pitch deck and this is what your investors believe in and now you realize something along the way. So I think that’s one. And the second reason for why I would raise capital later is just it gives you that frugality. For us, being bootstrapped for a year just made us run the business much differently in the beginning than if we had all that capital in the early days. And especially if you’re a first time founder like I was, I think you make many more costly and stupid mistakes having a lot of money in the beginning. That might be different if I went out to found again or other founders that done this before because they know exactly where to push and what to do with the money. But I think for an early stage founder it’s really helpful to have that period of very small team, extremely fast execution, listening to customers all the Time not having to worry about investors, not having to worry about what to do with all that money and keeping yourself very focused on what you need to actually solve.

Darren [00:30:44]:
You mentioned more general leadership advice. I’d love to go there and hear what you have to offer.

Hanno Renner [00:30:50]:
Yeah, so I think it’s almost, it’s not just a leadership, but it’s probably a company running advice for everyone. I think it’s one advice and one of my mentors, Lars Dalgard, the founder of SuccessFactors, once gave me. And it sounds very simple, but it so often reminded me and it’s about not lying to yourself. And I remember telling it to some people that said, oh, but why would I lie to herself? And you don’t realize how often we are lying to ourselves to telling ourselves something in our day to day private life, but certainly also in the company. We look at a certain graph part of the business and yes, it’s trending down but then, yeah, but now this part of the business already looks good and yeah, probably if we turn it a little bit like this, it actually we can tell ourselves that there’s momentum in there because the last two weeks were looking better, but effectively the last three months went down. So it’s just an issue. And I think just being truly honest with yourself about everything that’s an issue in the business and talking about it in very blunt terms, both to yourself but then also to everyone else in the company is such a crucial piece of advice. And despite having feeling I’ve so deeply integrated this belief and this understanding, I still think I sometimes do it. And we enjoy it in the company. So we even have it now as a leadership principle for us in the executive team where we have it. One of the things that someone can call out like are we lying to ourselves here to make sure we’re reminding ourselves? And when do we paint something a bit more rosy or when do we actually ignore something that’s right in front of us? Maybe because it makes us feel better or because we think it’s an excuse to do something a different way. And I think that’s such an important piece.

Darren [00:32:31]:
Yeah, I love that that’s an explicit principle for you and your leadership team and I imagine more broadly within the organization. And I’m wondering if there are other unique practices in how you run the company, whether it’s structures or rituals or practices, anything else that comes to mind that are particularly unique to you and to personio.

Hanno Renner [00:32:51]:
So I think one thing that just relates because we were just talking about principles we use in the Management or leadership team. Another one we implemented at a similar time as the one with the not lying to ourself with also something we called roll call. Because sometimes you have these discussions and then there’s two people that have really strong opinions and then they go really up on the other and the one builds on the other and so on without noticing. There’s three people, four people, five people in a room that don’t say anything. And then we oftentimes sometimes they’re intimidated because there’s such a heated discussion from others or they just don’t really know where now to add into. And we try to use that to then step back and whoever notice it call a roll call. And then everyone has to without reacting to each other has to go around the table and react to the issue that’s on the table to give an efficient way of okay, everyone has to show up everyone to as a first team mentality, voice their view. And then from there we can then see what decisions we take or where we go deeper.

Darren [00:33:46]:
Okay. So we spent a lot of time talking about you, your leadership, the company. I’d love to step outside a little bit. I know it’s an all consuming endeavor to found and lead a company, particularly one like Personio, but you obviously spend time outside of the company and I’d love to understand your personal pursuits. What is the, you know, what’s the day in the life of Hano look like? Are there practices or rituals that, that you engage in to keep yourself fit for this big endeavor? And I also want to make sure we cover your fascination with sailing and so we can maybe get into that as well.

Hanno Renner [00:34:28]:
Yeah, maybe we’ll start with sort of the more channel part and come to the sailing part. So I think, I think more generally. I know, I mean I’m preaching to the choir here because that’s a lot of things I learned from you. But I’m just going to repeat for everyone listening, something we spend a lot of time talking about is this how important it is to manage yourself and manage your own state. And that’s something that really helped me integrate. Okay. I can only be as good as a leader to personio if I’m integrated with myself and if I’m in the right state. And that comes with all kinds of sort of practices I’m trying to do as many people probably these days gotten really interested in cold exposure and ice bath and cold showers as I really feel it’s a nice way for me to just done it this morning again, calm myself down, expose yourself into something that feels uncomfortable. But again, similar as I said before, then the water doesn’t get warm, but you get comfortable with that situation. And then you go out and you just feel so amazing. You feel like, hey, what else can come today that rattles me in that way? Or even more powerful is something with breathwork that I have integrated not just as a morning routine to start a day, but even in between meetings, 3 minutes breathwork to center myself, to get myself focused on whatever is up next. So I think those are some of the practices that I’ve really enjoyed implementing in my life and believe I’m benefiting a lot. And then you see the bike in the background. But obviously given that a lot of people say, how do you manage to fit all that sports into your schedule? I think the cheat code here is that I don’t yet have family or kids. So it gives me a lot of flexibility before work or after weekends to then pursue things like triathlon, like tennis, like beach volleyball. And all of these things are stuff that also physically challenges my body and thereby gives me an outlet of stress, gives me an outlet of energy that from a physical perspective. And that I think helps me to be more centered in my day to day life.

Darren [00:36:27]:
Okay, sailing, let’s go there. Tell us a little bit about your history with this incredible passion of yours and what it’s taught you. Really is what I’m, I’m really interested in as well.

Hanno Renner [00:36:37]:
Yeah. So I mean the beauty about sailing is that it’s such a broad hobby like I have with friends competed in racing. So it’s a very, if you raise, it’s a very highly competitive sport, but also extremely compact. You have all the, the tactical stuff like how you, you manage your crew on the board, how all the, the movements, who is doing what at what point in the exact order. And that’s a lot of process power seven powers would call it. Probably to run the boat in the right way, then you need to make sure you understand the weather and the shapes of the wind pattern around you. You need to equally then have a strategy and a tactic against other boats. When do you have right of way and where are you in a position where you get bad air from a person in front of you? And when is it better to maybe then do more weigh because you’ll be faster. And so there’s so many facets just to racing alone. But then on the other hand, of course, sailing can equally be just a beautiful place to just calm down, to go on a vacation, go into beautiful bays, be connected with nature, wake up, jump through the water, go swimming, and then you can use it to explore places at the extreme pleasure with some friends to sail the Atlantic Ocean at some point. And that has been enormous adventure regarding literally being exposed for 14 days to nothing else than wind and waves and storms and all of that, and feeling so incredibly small, but also also building up a ton of resilience because at some point after the 10th day of waking up and while you’re brushing your teeth, you get thrown against the wall is one thing that you definitely then realize that as much as it’s beautiful, it’s also just like running a business, something that can be taxing. And then, as I mentioned before, I didn’t grow up sailing. My parents didn’t have a boat, so I had to teach a lot myself. And then I had a. The opportunity actually to learn a lot about sailing during becoming a skipper during my university studies and being able to drive other people around the world. And that, I think, from a leadership perspective, is maybe one of the most interesting lessons, because we were in this interesting position that there were people on the boat that have paid for vacation and that wanted to have the vacation the way they wanted it. But on the other hand, while you’re paid by them, you’re also at the same time, sort of their boss, because if there’s a critical situation, you have to ensure that they do exactly what you need them to do for their own safety. And oftentimes these are people who have no idea about sailing. They can’t judge how dangerous the situation might be at this very moment or not at all. And I think then. So it teaches you a lot about servant leadership, of making sure these people enjoy the vacation and feel like they’re in full control and they have the best time ever, while still ensuring they exactly do the things that you need them to do at any given point in time to keep them safe, the boat safe, and to make sure that you fulfill your responsibility as a leader of that boat. And I think that’s one thing we have probably drawn a few learnings of some interesting people.

Darren [00:39:30]:
Yeah, so many interesting metaphors. I think we can pull from your experience, and I think it’s becoming clear through this conversation exactly what shaped you and why you’re the incredible leader that you are. I wanted to maybe return to what we promised to return to is this pride in having founded and leading a European company and the importance of that to you and maybe to contextualize it in what’s going on in today’s world. How do you think about that your responsibility, the privileged opportunity you have to be building a company like Personia?

Hanno Renner [00:40:09]:
Yeah. So I think one of the things that makes me passionate about Europe is besides I think it’s a very diverse, culturally interesting place to be and to meet people, is that it also has a lot of very important core values that I think at least broadly in the western world we tend to believe in around human rights, about justice, about certain aspects. And I think it’s obviously Europe as a continent for hundreds of years has been used to being able to exporting their ideas and their values and their beliefs, sometimes in bad ways and many times in good ways. But I think what I’ve come to understand is how important in order to have any say and any impact on how you can export any of these values and beliefs is that you have an economy and relevance in the world both as a buyer of many goods, which, which it’s still a fairly large domestic market, but also as a distributor and as an exporter of goods and services that others are reliant on. And for again many hundreds of years, if not at least the last many decades, cars or spirits or other technology was really built and exported from Europe and invented here. But if you think about the last 25, 30, 40 years, the big companies that have been created in the technology space, both in really software consumer but also hardware, have majority been either created in the US or created in China. And I think Europe really has missed out on this economic value creation. There’s very few companies like Spotify or Edyon that have been created in the last 20 years that have really reached global significance and scale out of Europe. And that is something that in order to combine those two things, the belief in the European ideals and values and the impact we can have in the world by exporting and sharing them, we also need the economic power. And economic power these days comes a lot from also having technology leadership and being at least it’s not about winning against everyone else as a continent, but it’s at least being on eye level too and having certain technologies in certain areas where you are leading so you can then use them to trade with other parts. As long as these are the other parts, of course want to trade with you and don’t lift up too many trade barriers. But still I think it’s relevant because if you have the leading technologies, people will want to trade with you. ASML from Amsterdam still makes all the machines and no one else can make them. So as long as you have these kind of companies and these kind of technologies, people will want to buy them from you. And now going full circle back to Basonio, we believe we’re in a really important space that is relevant for many, many companies around the entire world and and helping build a company here that is relevant as leading that’s world class software in that space is something where we hope we can not just fulfill value to our customers and our employees, but also have an economic impact more broadly.

Darren [00:43:06]:
It’s an incredible vision. I really admire it and applaud you for it and wish you all the success in fulfilling it and being a part of that vision and playing an important role in it. And maybe a great way to bring our conversation to an end. But before we do so, I just wanted to give you an opportunity. Anything that we haven’t chatted about that you wanted to make sure we include or that you wanted to emphasize if we already have covered it, Maybe the.

Hanno Renner [00:43:32]:
One thing we haven’t really spoken about, which I think is an obvious one but still overlooked, is the criticality of hiring. And one specific concept that I always like to refer to also here internally is what I call an urgency bias. And it’s completely normal that everyone, especially in a fast pacing environment where at a point you open a role, typically you have just realized that you should have had that role three months ago. And it’s super critical to fill that role incredibly quickly. And at the same time, we all know how painful it is to hire the wrong person in that role. And therefore I’ve seen many times that the best managers and leaders fall into this trap of an urgent debias if they don’t have a corrective part in the organization that avoids them from hiring the best candidate out of a pool rather than a really great candidate that is there. And therefore I’ve played that role a lot myself. For the first, probably up to a thousand employees, I’ve interviewed pretty much every single candidate. In the final stage, the end, it was 10 minutes quick interviews, but I still, even just my presence in the hiring process, held managers accountable to not send over candidates where they knew Honeywood would reject anyway, but still during that time, I had a rejection rate of 30 to 40% at that stage still. And that just showed. Again, not that I’m. I mean, yes, I’ve done a ton of interviews. I know the company really well, so obviously you have a certain head start in that. But it’s not that I’m much smarter than them. It was just that I was two, three, four layers removed from that particular role. And Therefore, while I also want every role to be filled quickly because I care about the company, but I didn’t feel that pain so immediately like that specific manager that I was comfortable say, no, sorry, this person is just not great. And either we’re going to then deal with a mediocre setup for a long period of time or we’re going to change it in a few months and then we’ll go through the pain of rehiring, change and so on. So I think for a long time I played it myself. By now we have bar raisers and other concepts to ensure that we have these unbiased people that don’t have that urgency bias of being too close to the role that needs to be filled. But I think that’s a very critical one and in easy one, both to create great culture and a great company, but also the easiest one to it up if you do too many wrong highs.

Darren [00:45:51]:
Yeah, really glad we added that. Such a great point. It’s been a great conversation, Hannah. I really, really appreciate you being in it. And thanks again for, for being on the show.

Hanno Renner [00:46:01]:
No worries. Thank you for having me, Darren. It was a pleasure.

Darren [00:46:10]:
What I loved about this conversation is how much it illuminated the source of Hanno’s extraordinary drive as a CEO and.

Darren [00:46:18]:
His vision for founding and building one.

Darren [00:46:20]:
Of Europe’s most promising technology companies.

Darren [00:46:24]:
I look forward to being with you.

Darren [00:46:25]:
On the next episode of one of One. And until then, I hope you live and lead with courage, wisdom, and above all, with love.

Listen Here

In this episode of One of One, Darren sits down with Hamilton Helmer—renowned author of 7 Powers—and his brilliant colleague Chenyi Shi for a deep dive into the architecture of enduring business success. 7 Powers is widely regarded as one of the most insightful and practical frameworks on strategy, offering a clear lens through which leaders can understand how to create persistent competitive advantage. Together, the trio unpacks the nuance behind strategic power, exploring how companies can build lasting value in significant markets. Whether you’re a founder, CEO, or simply passionate about business strategy, this conversation offers rich insights you won’t want to miss.

Timestamped Overview

00:00 “Exploring ‘Power’ in Business Strategy”

03:47 Building Business Moats

08:51 Counter Positioning in Business Models

10:30 Streaming Economies of Scale

14:51 Innovation and Power in Business

18:32 Leadership and Innovation: Embracing Change

22:31 Streaming Success: Evaluating Power Sources

23:29 Strategic Intuition Analysis

29:44 Navigating Business Growth Phases

30:44 Business Growth and Transformation Phases

34:58 Google’s Strategic Search Engine Deals

37:25 Optimal Timing for Second Act

41:13 Complexity of Digital Business Models

44:33 Challenging Competitive Strategy Myths

49:27 Operational Excellence: Path to Vertical Leverage

52:14 Clarifying Business Flexibility

54:32 Leveraging Power for Business Insight

56:57 Evaluating Leadership Opportunities

Full Transcript

Darren [00:00:01]:
Hi everyone. Welcome to another episode of One of One. I’m your host, Darren Gold, CEO of the Triumph Group. My guests today are Hamilton Helmer, author of Seven Powers, a book that I consider to be the best book on company strategy and a must read for any founder, CEO or leader interested in understanding how you build a winning business, and Chenyi Shi, Hamilton’s incredible colleague. I first discovered Hamilton’s work a couple years after Seven Powers was published in 2016. Until then, I had spent over two decades trying to understand and implement strategy. First during my consulting years at McKinsey & Co. As a private equity investor for over a decade, in my three CEO roles and in my work with founders and CEOs helping them think through the strategies of their own businesses. Hamilton’s work finally gave me a complete mental model to understand strategic power as he defines it. A route to persistent differential returns over time in significant markets. I’m so delighted to bring the nuance and subtlety of his work to life in this episode. You’re in for a real treat. Please enjoy this wonderful in depth conversation with Hamilton Helmer and Chenyi Shi.

Darren [00:01:18]:
Hamilton, Chenyi, it’s so nice to see you again. So appreciate you being here and I’m really excited for this conversation. Thank you. I wanted also personally just maybe start Hamilton with a note of appreciation to you for your immense contribution to the field of business strategy. I’ve been in my professional career for 30 years in various roles. I was at McKinsey as a strategist. I sat on a bunch of boards. I was a private equity investor three times as a CEO. So the question of strategy has been central to me for now three decades. And it wasn’t until until I discovered your work that I finally had what you call a simple but not simplistic model, mental model for really actually understanding strategy. So I wanted to thank you and I wanted to maybe. You’re very welcome.

Hamilton Helmer [00:02:08]:
Oh, it’s very nice. You know, my ideas are my babies and so one always loves to have their babies admired. So, so thank you.

Darren [00:02:17]:
Well, and I know you know the admiration is widely shared and hoping that in this conversation we can contrib contribute even further to people’s understanding of your work and their use in building great businesses. Yeah. So you’ve come up with this term power, and as I believe you define it, it’s sort of a route to persistent differential returns over time in significant markets. And I think you’re offering what you call kind of a complete and exhaustive list of these Seven Powers, which does make it simple to work with and yet it’s quite nuanced. So not simplistic. But I was hoping you could bring to know. A number of our listeners are probably either deeply familiar with or somewhat familiar with your work. But if you could bring to life the, the notion of power, what it means for the CEO that’s thinking about building a company and building value over time.

Hamilton Helmer [00:03:12]:
Yeah, so. So it’s a tough world there. You know, I’m in business. My I, my clients used to tease me because I always used to say business is hard. And they say, you mean we’re paying you for that? And everyone is, is always trying to eat your lunch. And that’s the capitalist model. And if you’re looking at it from a societal point of view, eventually it results in solid economies and good jobs. But at an individual company leadership model, it means that the arbitrage is always there and withering. And so the question facing a leader in terms of the attractiveness of long term outcome is what offers refuge from that? Because refuge from that leads to these attractive outcomes of high margins and high market share which drive company value. And Warren Buffett famously called these things moats, or maybe it was Charlie Munger, but I think it’s Warren Buffett. And so it’s sort of what would characterize, you know, a moat. But thinking about it broadly, about all, not saying, not looking back retroactively and saying this business has a moat, but imagining yourself in a leadership position and saying, I’m not sure I have one. What do I do to get one? Do I in fact have one? What are its characteristics? What are its primary threats? You know, understanding that kind of in real time with all the uncertainty bars around it. And so the notion of power is really a notion of that. It’s a position in a business that has two characteristics. It has what we call benefit, which is there’s something about the way you conduct your business that results in a superior outcome to the way your competitors can conduct theirs. So higher prices or lower costs. But that position also has a durability around it. So not just a benefit, but also a barrier. Just other people can’t take it away from you easily.

Darren [00:05:28]:
Now, Reed Hastings wrote the foreword of your book, former CEO of renowned CEO of Netflix, and describes your first encounter, but also the work that you did with him and the company to identify what their source of power was. Could you maybe bring to life power through that example? Or if there’s another example? Sure, that would be wonderful.

Hamilton Helmer [00:05:50]:
Yeah, I can do that. I mean, in first My hats off, hats off to Netflix and Reed and Ted and Greg and everyone there. I mean it was very enjoyable thing for me. I did sort of, as I as mentioned by Reid in that forward, I did a training session there with maybe the top hundred people or a friend of colleague of mine and I trained them in strategy and I so enjoyed the interaction. They just built such a great team, great company. So in Netflix they were just this tiny little pipsqueak. And so I’m now dealing with a streaming business. So in the red envelope business there, the 800 pound gorilla was blockbuster, right? So they had it. So but in the streaming business, you know, there was hbo, there was linear tv, you know, all the cable assemblies and so on. And these were huge companies by comparison, way more profitable. And so your first counterparty is, is in substitution against incumbents. And that, that’s, that’s the nature of when, when technology changes and new businesses emerge, that’s what happens is that you figure out a better mousetrap. Right? Product market, that’s a product market fit is basically a statement about substitutive competition. And, and so the first phase was just coming up with something that had some kind of benefit for, for people that, so that they liked that streaming was attractive. And this is a platform business. So it’s basically, platforms are essentially privately owned markets and in this case Netflix was the intermediary between entertainment consumers and entertainment assets. And the first thing for them was they had to have a superior value proposition. So and, and, and there’s, and, and they’re there and it’s kind of this complex simultaneous equation of getting both lots of attractive content and also lots of users. And, and, and so they had to get the content first, which was hard. They did this deal, proprietary deal with Stars and then eventually later with Epics and, and got a lot of content. And, and that’s not, that wasn’t trivial, but they also had to ease a lot of the friction and sign up. And so they had to get other platforms, particularly gaming platforms, to have Netflix available and Netflix available on lots of devices. But that was just the first battle, right? And when you have that first battle, the natural impulse of the incumbents, their larger, more profitable, is to eat your lunch. And so you actually need to have some. So the benefit of the new technology may be there, but if the incumbents can adopt it, there’s no barrier. The barrier is what our book refers to as counter positioning, which is that there’s something about the business model that you adopt that for an incumbent to adopt it would be so upsetting that they want, and for their P and L, they wouldn’t do it. So in the earlier business, the red envelope business, you know, the Blockbuster was, was counter positioned because they, their business model was a brick and mortar store, you know, density economy scale, economy business. And so they just would have to have to say, oh, those assets aren’t worth anything. In the case of streaming, if you think for example of hbo, what was unusual about Netflix, of course is it went over the Internet or the term used for it is over the top. They went over the top, whereas HBO went through cable providers. And for them to start going over the top, the cable providers, Comcast and all would say forget that, you’re off our. And they lose their customers and stuff. So it was a very hard, you know, thing for them to do. And, and, and that allowed Netflix to, to, to gain edge. And so, but that’s, but now that’s, that’s, so that’s substitutive competition. That’s one counterparty, but they’re, but that they’re not the only counterparty. You win that war and then you have companies that, that are doing it just the same way you do it. So other streamers, right?

Darren [00:10:29]:
Yeah.

Hamilton Helmer [00:10:30]:
And so, so you know, Disney plus and Amazon prime and whatnot. And then you get into the scale economies of platforms that, you know, if you have, you know, more users and more content, you can get better matches and you get more hours watch per entertainment asset and therefore lower cost. And you can see that Netflix now of the streamers is I think the only profitable one. And that essentially means that the number of hours watched per asset expenditure, in other words per hour of purchased content or developed content is hours watched is higher. And so that’s a whole completely different realm of advantage and another type of power. But even that isn’t the end of the story because Netflix, 50% of their cost structure is content. And so in that, so you have to look upstream and say are we really beholden, for example, if there’s only one studio? Or you look, see what Spotify faces, where they have three music companies they got to deal with. That’s very concentrated. And it’s both whether they’ll price aggressively against you and also whether they’ll even make stuff available. And so Netflix early on had a preemptive move to assure greater ability against the counterparties in that, which is they went into exclusives and originals and so they partially backward integrated and that gave them some leverage in the, in a vertical way. And so, so what you see there, Darren, sorry for the long explanation, but, but it’s a long story. Is a very long, complex, multidimensional effort to assure a strong position against all relevant counterparties.

Darren [00:12:37]:
Yeah.

Hamilton Helmer [00:12:38]:
And so, so it’s, it’s, you know, this is not easy stuff. And each of those required enormous commitment of the organization. I mean, just, just the up. I’ll stop in a minute. But just such an interesting story. But, but just the transition to streaming. Chenyi and I were in, interviewing some of the senior people at Netflix because we’re using the case also in another book we’re writing. And what we were told was when there was this transition from the red envelope business, which was the bread and butter based business of Netflix, to streaming, the basic command from leadership was in, in everything that you do, if, for every team, if you’re not disrupting red envelope and moving towards streaming, you’re not doing your job. So this, this powerful directive and, and because, you know, the normal incentive would be, you know, I can kind of make money doing this and, and you know, I wouldn’t bother. So, so anyway, it’s, it’s, it’s, it’s fraught, it’s hard. But, but, but great clarity about, you know, what, what is an attractive position. I mean, think and, and, and I mean just for example, the exclusives and originals. I mean Ted at Netflix, Ted and Reid are both quite brilliant strategists. They don’t need help from me particularly. I mean, they’re both, I mean, really amazing actually. And Ted, you know, just sort of had, just kind of knew intuitively that that was kind of a piece of the puzzle and it wasn’t necessarily a popular piece because people said, oh, we’re, we stream content, we’re a marketplace, we should have the most content available possible. And if you do originals and exclusives, that’s higher priced, you have less content. So you know that that’s stupid. Don’t do that, you know, but he had an intuition that that strategic intuition that, that that was part of the puzzle and it’s correct intuition.

Darren [00:14:50]:
Yeah.

Darren [00:14:51]:
This is such a rich example and I, I want to actually spend a little bit more time here pulling on a number of threads and maybe play back to you a few things as a way of synthesizing and then maybe going down a couple paths here with you. The first thing I heard was, you know, power is important, of course, but it has to be preceded by some innovation, right? Some new product or service that has a demonstrably better value proposition such that customers are going to choose you. You name two powers in particular, counter positioning and scale economies. And I want to maybe talk about each of those. The streaming business, we’ll get into this at some point was a sort of a classic definition of a second act. Right. Which is a whole other subject that I want to touch on with you. And then I think there’s something in this, the role of strong CEO and strong culture that sets a directive that I don’t want to miss in our conversation. So what thread there would you want to pull on? And I think maybe we could try to pull on as many as we can.

Chenyi Shi [00:15:56]:
So.

Hamilton Helmer [00:15:56]:
So I think one of the odd things that I think Chenyi and I have turned up in our current research, which was sort of unexpected, was that, that the. The need to think about strategy early. I. I would. If you asked me a couple of years ago, I would have said you get product market fit and then you figure out strategy. Well, that’s wrong, actually. While you are considering what product to do, in other words, before you’ve realized product market fit, you need to think about the strategic implications of the product that you’re thinking of, because product is product market fit. Right. So think about all that locks in. So product kind of locks in what kind of production process, manufacturing, whatever it is, fit means you’re sort of locking in a customer segment and preference patterns. And so that locks in a lot. And those things actually set the stage for whether or not these various types of power are possible. So is. Is it. Will it be possible eventually to have scale economies or network economies or switching costs? You. You have. When you’re getting to. When you’re getting at product market fit, you have a lot of degrees of freedom. You can think of different approaches to different businesses. Once you’ve set that, you’ve substantially limited your choices. And it’s not that you can nail it down at that stage with great specificity, but you can understand sort of the general terrain. So that’s an unusual perspective, I think. Not that you sort of have a business and then you devise a good strategy and everything’s fine. Lemons into lemonade is rare.

Darren [00:18:05]:
Yeah. Yeah.

Hamilton Helmer [00:18:06]:
And. And it’s. It’s more. It’s more the case that you. But it’s also quite possible to have an attractive position that you don’t capitalize on. And that just shows how hard leadership is. Right. Jenny, I’m going to ask you if you wanted to comment on those threads of Darren’s, because we’ve been in this journey together.

Chenyi Shi [00:18:32]:
Yeah. I think Darren kind of commented on the importance of leadership here and I kind of want to highlight, sort of Hamilton mentioned how hard it was for a business to really give up what you’ve been building before and go into something completely new. Netflix is so successful today in streaming that people probably don’t realize how big of a shift it was to essentially kill red envelope and hop onto the new technology frontier. I think more often than not it doesn’t happen within a company. And that’s sort of what counter positioning, where that kicks in is people realize that copying the newcomer actually causes collateral damage or self displacement. Think sort of Nokia dying a couple years to iPhones and Android. And those examples are. There’s many of them in the history of technology. So strong leadership, we think oftentimes bounded by the founder is extremely important in those moments on sort of hopping on the new technology frontier. But it’s sort of both challenge and opportunity. Right. It could be opportunity for the newcomer to actually break in and it’s also challenge for the incumbent. Can you effectively respond to it?

Darren [00:19:46]:
Yeah, in some ways it feels like somebody else had the potential to use counter positioning against Netflix. Right. Because of all of the reasons that existed for it to protect its core business. Absent, you know, really powerful and strong leadership, that would have been a good play for somebody else. And Netflix sort of seized that opportunity for itself. So there’s so much on this particular streaming.

Hamilton Helmer [00:20:10]:
I’m sorry, Darren, go ahead. That’s such an interesting comment. Can I spin up on that just a little bit?

Darren [00:20:15]:
Yeah, yeah, please.

Hamilton Helmer [00:20:16]:
You’ve touched on something that’s quite subtle and very common and material, which is that that if you think about a company going into new stuff, right. They’re kind of. It turns out that’s an important source of shareholder value. You know, long time ago did a study of the S&P 100 and what share of their profits came from businesses they weren’t originally in. And it was half incredibly. And those three piles are. Are reinvention, which is what Netflix did with its streaming business. In other words, same set of needs, completely different approach to it. There’s pure diversification, which is you just go into something that you don’t have any particular skills in and you don’t even have the. And it’s not satisfying the same need. And then there’s coaction, which is different set of needs, but building on current capabilities. So the iPhone would be a good example of that. Or AWS would be good examples of coaction.

Darren [00:21:26]:
And that’s needs of. When you say needs, that’s Needs of your, your existing customers.

Hamilton Helmer [00:21:30]:
Needs of existing customers. Yeah. With, with obviously extensions beyond that.

Darren [00:21:35]:
Of course.

Hamilton Helmer [00:21:35]:
Yeah, but and, and, and as you would expect, pure diversification is typically a bad bet. You know, you, you just don’t have any strength going into it and, and you suffer all the advantage disadvantages of a large, of an existing company with you know, a value prop and, and newcomers can take it over. And so the bulk of successes like AWS and iPhone are or Microsoft into OS or whatever is is in the coaction space. What the thing that I liked about your comment that was so interesting is it was an example of reinvention and for exactly the reasons you said. It’s quite rare because of you know, just, just what you said that, that it is others can typically counter position you. Yeah, anyway, sorry, no, but it’s such an interesting comment.

Darren [00:22:31]:
Yeah, great great elaboration. And I think we’re going to get into second acts, if that’s what you call it. In a moment, I want to stay with the streaming example and pull on the thread because I imagine as they were, as you said, in this product market fit stage, they were either explicitly or intuitively evaluating what is going to be our source of power in this new business if we do indeed develop something that, that, that gets them, that gets product market fit, it turns out, scale economies for the reasons you suggested, both, you know, significant per user, lower costs as well as, you know, the recommendation engine and the sort of success they’ve had with that. How, whether it’s the actual example of Netflix, but how present do you think those questions were as they were going through that effort? Because it’s oftentimes so easy to look backwards and say, well of course they built this and leveraged this particular power of scale economies.

Hamilton Helmer [00:23:29]:
Right. So I think as I said, you know, Ted and Reid are, are strategy intuitives. And so, so I, I think I, I think they can be present in the following form, which is somebody who’s thinking of an activity can say to my, say to themselves what will it take for somebody to take that away from me? Just answer that question. Yeah, and, and, and, and if you say they can’t, then you go down the, the, you know, the analytic and say why not? And see whether you feel like that’s persistent. And so, so I think, I think that you know, sort of strategically and intuitive, whether they register seven powers, you know, leaders kind of go through that analytic and, and either explicitly or sort of intuitively and I, I am quite certain that you know, read, you know, sort of processed that that way, you know.

Darren [00:24:31]:
Yeah.

Hamilton Helmer [00:24:31]:
I mean, I had conversations with him where, you know, I sort of thought, well, why don’t you do this and say no, that Hamilton, that’s really dumb. And, and you know, and, and, and because he had this ability to, to say that the outcome would be unattractive.

Darren [00:24:49]:
Yeah.

Darren [00:24:49]:
I think that’s the value I see in the mental model that you’ve developed, which is it can sort of sit in the background during whether it’s product market fit as an original founder or in a second act or and you know, just expanding your power in certain ways and inform the almost day to day decisions and choices you’re making about the product you’re building and how you’re structuring your business. Is that a fair way to.

Hamilton Helmer [00:25:15]:
Yeah, I mean, I think my hope is, and I think in what I’ve seen so far is that it stimulates the right questions.

Darren [00:25:22]:
Yeah.

Hamilton Helmer [00:25:22]:
And, and it’s, you know, you. And these things are to. There’s very high uncertainty bars. To a certain extent it’s unanswerable. So it’s more like a directional compass, you know, it’s sort of senses the right way. But keep in mind that if you’re a leader, you’ve got this whole other responsibility of keeping the ship afloat and that’s in most times is 95 plus percent of your time and it should be. And so you have to sort of be able to balance that incredible commitment to operational excellence at the same time as keeping alive this sort of more inventive part.

Darren [00:26:10]:
Yeah, it really does, I think, highlight the point you made, Chenyi, about the importance of leadership. I mean, not only, I think, has Netflix become a case study in strategy. It’s been a long time case study in culture. But I just want to put a fine point before we move on to second act, you know, particularly in the reinvention space where you may have existing customer needs, but having to reinvent new capabilities, the kind of leadership that’s required to catalyze action that may be against people’s self interest, is pretty extraordinary. And I have to say I imagine that without that culture and leadership that came from Hastings and his team, we would be talking about probably a different company in this podcast.

Hamilton Helmer [00:26:59]:
Yeah. And the balance is really hard because you can top down push. In this case, they kind of made the bet on streaming so that you could push that direction. But if you’re getting into a new area, you also have to allow for enormous flexibility and you can’t. It’s not like you run this metric driven, all fully planned out operation, you have this balance, which is really hard. And if you’re, and if you’re at the earlier stage of, you’re not even knowing what the major choice is, you don’t know that it’s streaming, you’re sort of looking for something else, then you have to show a commitment to doing new things, but you also have to show a commitment to doing your usual thing really well. And so that balance, individually and in an organization is a leadership challenge.

Darren [00:28:05]:
So we’ve mentioned this notion of second act. You’ve talked a little bit about reinvention and coaction. You referenced quickly a possible second book that you’re working on. And I know this has been an area of intense focus and research for both of you, Hamilton and Chan Yi. Can we turn our attention to that and maybe talk a little bit about this new book you’re, you’re writing, what you’re learning? Because I think a lot of CEOs and many founders and CEOs I work with are at a point where they’ve either discovered they don’t have power or that their power is being arbitraged away because forces are changing and they’re confronted with this notion of I need to figure out what my second act, or maybe in some cases third act is. I’d love to hear a little more from you on that.

Hamilton Helmer [00:28:51]:
I’ll do a quick take and then I’m going to let Chenyi talk a little more about it just so quickly. The current title that might change of our book is Second Invention. And that actually doesn’t refer to, and maybe it’s a bad title because it misleads people. It doesn’t refer to Act 2. It refers to the fact that the first invention of any business is product market fit, but that if you do that without power, it doesn’t end well and that developing power is a different muscle. And so the second invention is Getting power with product market fit. And so we’re really trying to understand what is really the playbook for power. And Jenny, I’ll let you carry on a little bit on top talking about this.

Darren [00:29:43]:
Nice.

Chenyi Shi [00:29:44]:
Yeah. So the, the initiation of this project that Hamilton and I have been working on for the past couple years is to answer the question of sort of seven powers stated, where do you want to get to? You know, at the end, that has attractive economics for the business, but there’s always the question of how do you get there. We just went through this, you know, very rich example of Netflix. There’s So many things they have to get right and you know, over a very long period of time. So are there patterns that we can develop that’s useful, like simple but not simplistic for leaders and entrepreneurs to understand? Where am I today? Where do I focus on? I think part of that understanding kind of covered it is a business actually go through different phases. And in each one of those phases you have very different key competitive interfaces, which means you have different focus on strategy and different focus on leadership. People are familiar with the S curve thing. Like the business go through a slow start and then sort of explosive takeoff and then kind of slow tapers off into maturity. What we’ve learned is that is more than a description of different growth rates. It’s a description of, we call it the origination, takeoff, stability phase. It’s a description of sort of distinct phases where you face different key competitors which we’ve talked about. You know, substitute of incumbents, there’s direct competitors, there’s kind of the vertical battle you have to fight by the end. It also distinctly tell you in this phase what is the key strategy focus of the business and hence what’s the thing you should be focusing on for your organization. And sort of by the end of that and that comes to your second act point Darren, there’s always sort of this ability or this chance of re kicking start this whole cycle again and that the term we use for that is transforming which is similar to second act. Because if you think about companies like Microsoft for example, it was a language company, then operating system company, then kind of application company. Today it might be more a cloud company, maybe in the future it’s an AI company. There’s sort of leaps you make depending on where technology frontier is. And it can be reinvention, it can be co action leveraging your existing customers need or existing capabilities. And the point of that is try to start with the position of strength into the new thing. And that’s the benefit of you having existing business in place that allows you to potentially capture the next technology wave. Opening up the what we call a positive sum game window for business to invent the new thing that may have power into the next cycle. So that’s sort of the overview of how we see the broad pattern happening. There’s obviously a lot of details we’ve touched on, but that’s hopefully a kind of new a framework that we, you know, will be useful for leaders of businesses.

Darren [00:32:35]:
Okay, well, I’m excited. Any idea when when that’s going to be the hands of people to read.

Hamilton Helmer [00:32:40]:
You do have to ask that, Darren.

Darren [00:32:42]:
I mean, I did. I. I’m a zealous. I’m a zealous fan, so I’m asking from a fan’s perspective.

Hamilton Helmer [00:32:50]:
So. Yeah, well, we’ll have a draft.

Darren [00:32:52]:
We’ll see for sure. Okay.

Hamilton Helmer [00:32:54]:
You know, got it.

Darren [00:32:55]:
Well, I’m sure there are a lot of people eagerly awaiting and curious when it does. I’ve heard you both and Chenyi, this is a question for you to address. Warn people before they become too excited or enamored with a second act, or as you call it, a transformation to focus on areas where they have existing power and where they can extend into that existing power. Can you describe that a little bit and bring that to life?

Chenyi Shi [00:33:20]:
Yeah. So I think, as I mentioned, I think the most the position you really want to be in is to start with your advantage. It could be either your capabilities or it could be your existing customers. That allows you to start not from scratch. And that’s oftentimes what we see as the most promising path and the easiest path to inventing the second piece. I’ll give an example, which I think is. Is fairly interesting. So Google actually has two parts of their business. There’s a part of business where they are providing you with a search service in return for your mindshare and eyeballs. And there’s a second piece of the business where they’re then selling that mindshare to advertisers with their superior data and matching capabilities and getting higher revenue, essentially per impression. And those two businesses actually depend upon each other. And the ability to develop the second advertising business is actually leveraging what we call competitive position, which is essentially the scale of their search business. It’s sort of a positive flywheel, per se. You have this very good search business which attracts all these people into your portal, and then that gives you the ability to have a large pool of inventory and with the superior knowledge about, you know, what people are looking for, that gives you intention. They can actually sell one impression for more dollars than anybody else can. That gives them sort of the ammunition to actually go back and eventually buy more search traffic. You know, they actually paid a lot of search portals in the early days to be there, to be their default search engine on the screen. The paid Apple, obviously to be what’s by default on iPhones, et cetera. And that kind of gives you an interesting, complex, but extremely strong transforming act into a second piece of the business. The interesting test we looked into was if Google never had the second piece, if it was just search, would that have been equally powerful. I think intuitively we probably know, probably know that the answer is no. But a good test to it is Microsoft in 2009 came out with Bing and Bing, I think there were reports that said they essentially copied Google results in training their search algorithm. So that essentially brought search efficacy to equity for both companies. Yet Microsoft couldn’t copy the second part of the business because Google had such a lead in their inventory volume that leads into a very powerful advertising business. You know, we see sort of examples of this manifesting a lot of different ways in business. But the general idea of try to start with somewhere of advantage kind of applies to kind of good transforming acts for businesses.

Darren [00:36:17]:
Yeah, and I was also referring to, I think what you call kind of the upper right quadrant in some of the talks that you’ve given, which is are there examples where people are prematurely trying to look for their second act where they haven’t yet fully exploited the power that they already have? Because the probability of success of a power you already have is so, so much higher than either a reinvention or a co action transformation. And I’m wondering if you’ve seen examples of that.

Hamilton Helmer [00:36:49]:
I sort of think of them those two things as sort of roughly orthogonal. You sort of, you know, you, you, you must execute well on what you’re, you’re. If you have a, if you have a current path to power, the execution part of that often is achieving competitive position. Right. So if it’s a scale economy or network economy or switching costs, it’s. You basically need a high market share. Right. And that requires enormous execution skills. And if you’re thinking about a second act, often you’re not. If that’s, especially in a especially high growth phase, you may not be incredibly motivated to do it. But ironically, it also may well mean the time when the opportunity is best. Because what gets your original business going is a technology change that opens up the possibility for a new space, new solution, new product. And you’re kind of probably have capabilities that are kind of around that technology. And so it’s often, there’s often much richer target set in those early phases than there is if you’re, you know, 40 years in and have a very mature, successful business. Often not off, not always, but most of the time the technology that you’re expert in is no longer in flux there. Not a lot of new stuff’s opening up. So it’s one of the ironies is that it’s in those early phases you have possibilities for new stuff. But also the challenge of Doing of executing your original business well is also the hardest.

Darren [00:38:39]:
Yeah. I mean, AWS may be an example of that. And Amazon was very much in a growth period at that time. A takeoff stage.

Hamilton Helmer [00:38:48]:
Yeah. Or think of the iPhone. I mean, these are giant. I mean, Apple was still doing pretty well with the ipod and things. I mean, it wasn’t, you know, it was okay, you know, but they didn’t rest in their laurels.

Darren [00:39:04]:
Yeah.

Chenyi Shi [00:39:04]:
I would mention there’s sort of one potential mistake here is to try to sort of enforce your existing strength onto the new market without considering sort of what really is the best solution, you know, for, for, for what’s coming. Example of that would be Windows Phone.

Darren [00:39:24]:
Right.

Chenyi Shi [00:39:24]:
Like trying to, you know, leverage Windows for mobile phone. That turn out isn’t just a. It just isn’t the right solution or isn’t sort of the best feature set for that technology paradigm. And that’s sort of thinking about power ahead of product market fit even. And that’s also not right by itself.

Darren [00:39:46]:
Yeah.

Darren [00:39:47]:
I’ve come across the following phenomenon I’d love for you to sort of comment on, which is founder CEOs that become familiar with the model, do a cursory analysis and then say, aha, I’ve got the following three, you know, powers. I’ve got process power, I’ve got switching costs. I’ve got, you know, I’m making things up, of course. And you know, they haven’t done quite the disciplined analysis and digging into the nuance and the second and third order effects that I think you need to, to do to truly appreciate whether you have power or not. What do you find? Do you find that to be the case? And what would be your advice to a founder or CEO who’s, who’s really thinking hard about these questions?

Hamilton Helmer [00:40:27]:
Yeah, I’ll comment and I’ll let you comment as well. So, Darren, I observed the same thing you have. I had one of my board of advisors for Strategy Capital, one of my members is, I hope you won’t mind me quoting a fellow Adam D’Angelo, who’s very thoughtful in these matters and intersects the founder community a lot. One time we were having coffee together and he said, hamilton, you’ve got a problem. He said, he said, I probably. This is him speaking. I probably have a better than average understanding of seven powers. I talk to a lot of founders and I find that nine times out of 10, they assert something about the power they have and they’re wrong. And as a, you know, as somebody providing concepts, that worries me because it means that we haven’t explained it well enough. And that’s exactly. That is actually that motivation that’s driving the second book, I think. But, but I agree with you that that usually is the case. And, and the reason is, is that truly understanding whether you have power is pretty complicated. I mean, so if you, if you go under the covers of Netflix and say what are sort of some of the critical conditions for that business model to work? So you get into weird things like it’s, so it’s, it’s a platform model. So high heterogeneity on both preferences and product features in this case what kind of entertainment genre it is is essential. Another one that’s quite interesting is that, that if you, if you look at the concept of exclusivity, which is to say if I consume something, does it prevent my consumption later or prevent somebody else’s consumption? The interesting thing about digital products is there is no inter user exclusivity. Basically marginal cost is zero. That’s an important part of that model. But in Netflix’s case, which is different than for example, music streaming, there is intra user exclusivity. If you watch something once, it then loses a lot of its utility for watching. Again for most types of content, not all types. So children’s stuff, not so true. But for most watching it’s true and you get into suggesting example of sort of fine points and without those things the model changes completely. And so, so you have to get very far down in the weeds and just put another spin on it, you know, as you know, I, Jenny and I are involved in an investment company called Strategy Capital and we look for whether companies have positions of power. It will take a group of us weeks for a publicly traded company to figure out the answer to the question. And often we can’t even figure it out. And so I don’t know, Chetney, do you want to, do you want to expand on what I’ve said?

Chenyi Shi [00:43:38]:
Yeah, you know, just despite everything’s in the weeds, particular business. I think if we’re talking from perspective of a leader or a CEO, you know, what we do think is oftentimes useful is what we call a 3s test. So it’s sort of putting a critical view on what really differentiates you and is that sustainable for you? So the 3s refers to superiority, significance and sustainability. So it’s really asking the question of what do you have that’s unique to your business, that gives you either higher price or lower cost? Is that significant to your whole margin structure? Like if you are talking about 0.5% increase. That’s probably not significant. But you have to pass the significance test to say this is something really meaningful and will be in favor of me in the long run. And the last test is sustainability. You know, what prevents your competitors. And again, there’s a wide range of them. There’s your incumbents, there’s your sort of also rents. There might be people from all kinds of, you know, all around you trying to eat your lunch. And what prevents all of them from mimicking you? And this can be different mechanisms. It could be a counter positioning against incumbents, could be a scale economies against direct competitors. And that 3s test is also oftentimes we found very helpful for leaders to dig very deep into their business and really question sort of okay, you think you have scale economies, but are you really delivering much margin difference? Is it true that nobody else can operate at a scale that delivers similar margin as you do? Because think about airlines, high fixed cost industry, but turned out to be commodity. Turns out multiple players can operate at a similar scale and the unit cost basis isn’t that different among them. And sort of that test kind of really allows you to as a first step to dig deep into, you know, what you may think of as power, but are they really power by the end of the day?

Hamilton Helmer [00:45:38]:
And I think in terms of people sort of thinking they have power but might not. Frequently missed one is the second size is significance, which is materiality.

Darren [00:45:50]:
Yeah.

Hamilton Helmer [00:45:50]:
And a common one we have sort of a joke about it in the office is network effects is network effects are basically an attribute of any market. And so they’re everywhere. And, and, and, but they’re very infrequently material. And so, so it’s not enough to say there’s a flywheel in my business and this makes this better and that makes, gets this better and that gets this better. The question is not whether that exists but just how material is that does it how much? And again materiality, lower cost or higher price. And, and, and so that’s, that’s often missed. And as I mentioned before in product market fit, the, the one, the third S is all is not part of product market fit is sustainability. That, that’s not in there.

Darren [00:46:42]:
Yeah.

Darren [00:46:42]:
I think that’s the difference you created between network effects and network economies. The latter being that it passes the significance test.

Hamilton Helmer [00:46:52]:
Exactly.

Darren [00:46:52]:
And that network effects are pretty widespread. That’s such an important distinction. So I’m curious, number one, it sounds like power is relatively rare. I would love to get your take on that. And to the extent it is, or at least not omnipresent. What do you advise the CEO who actually does dig deep and identifies that they, they don’t really have power? What are they, what do they do in that case?

Hamilton Helmer [00:47:22]:
So if you’re the leader of a company and you, you dig deep and you decide you don’t have power, there are two. The first thing is to examine. You’re already in that business, you don’t have any choice. Let’s say it’s a commodity or something. So there are two reasons you might not have power. One is that nobody in that business has power, it’s a commodity. Or the other is that there is a source of power, but somebody else has it. Like there’s some competitor that’s 10 times your size in their scale economy companies. Right?

Darren [00:48:04]:
Yeah.

Hamilton Helmer [00:48:05]:
And, and so in the, in the commodity case, you can un, you can look around and see if there’s any, anything that might, any segment of the market or there might be something different going on. I think, you know, if you look at, you know, Box and Dropbox or something, you know, what, what, what would you do, you know, and so you might try and find a segment where, you know, they’re high switching costs or some special characteristics or something. So there’s a variety of things where you might look for some refuge from the withering arbitrage or competition. And if it’s a competitive position situation where there is power, industry economics are favorable to power, but you don’t have it, then you know, obviously if somebody is, if the person with power is doing what they should do, you’ll never get it. But, but you always want to be open to the possibility they’ll make a misstep, you know, and so you just want to be aware of that. And then, and then you also know that on your agenda has to be a next steps, right. An Act 2. Right?

Darren [00:49:23]:
Yeah.

Darren [00:49:24]:
Chenyi, anything you would add to that?

Chenyi Shi [00:49:27]:
Yeah, I’d say in the case where essentially we call like industry economics is not there, which is saying nobody has power in the industry, you know, operational excellence will, can or may take you a long way. Because the light at the end of tunnel is if you do end up through really good operations excellence, you know, end up a game of two, a game of three, you might have enough vertical leverage by the end that allows you to start claiming more margins, you know, against your suppliers, your partners towards the end of it. It does mean you kind of have to sustain through the takeoff phase where you don’t have sort of scale as your Benefit in a way unlike companies with network economies or scale economies, the larger you are, the easier it gets against your competitors. Right. If you don’t have it, you can just have to execute your way through. And by the end you may have sort of vertical leverage that gives you sort of some, some refuge by the end, which gives you the ammunition and resources for always sort of what’s next by the end as well.

Hamilton Helmer [00:50:28]:
So just to plug this, I think if you think about sort of a seven powers view of a business in that situation as a leader, you want a lot of clarity of exactly the game you’re playing. And because if it’s a treadmill, that’s fine. You should, you should know it’s a treadmill. But, but you, you need to know the game you’re playing. And, and you know, I think, I think as Warren Buffett said, I’m, as you can tell, I’m a great admirer. You know, he said, said that if you put a, a bad business together with a good manager, it’s not the business that loses its reputation, you know, and, and so because you, you need to know if this is a situation where you actually can’t manage your way out of it because that will just affect your own psychology and how you run the organization. And you can’t sort of keep thinking to yourself if I just run faster in the treadmill, this is all going to turn up roses.

Darren [00:51:30]:
Yeah.

Darren [00:51:30]:
The other scenario might be a business that’s underperforming industry average. Even in a largely commoditized industry where there is meaningful value to be captured just by improving the economics of that business, that’s a perfectly worthwhile endeavor. Right.

Hamilton Helmer [00:51:47]:
If there are efficiency gains to be made, if you’re, if you’re not up to snuff and efficiency, that’s absolutely, is a wonderful thing to do.

Darren [00:51:57]:
Yeah. Yeah.

Darren [00:51:58]:
Is there a question you’ve been interviewed now a number of times and asked lots of questions. Is there a particular question you wish you would have been asked that you, that you haven’t or maybe one that you ask yourselves that hasn’t gotten a lot of attention?

Hamilton Helmer [00:52:14]:
Well, I think the thing we push ourselves hardest on is, I think Chenyi mentioned it before was, you know, in one of our board of advisor meetings and you’ve, and you’ve touched a lot on a lot of it. During this interview, one of, one of the members, our board of advisors, well, it’s kind of well known entrepreneur turned to us and said, you know, Hamilton, I. What are sort of my degrees of freedom, you Know what? What can I do with this? You know, and so, so, and, and a lot of the conversation today has, in a way, been sort of been about that, you know, and, and I think I. So I. I think you’ve sort of asked the thing that’s really on our minds, which is that if you think about things that we sort of want to improve because we feel our mission is to just to help business people have better businesses, and our mission is to greater clarity about the concepts. So people don’t think they have power when they don’t, when they don’t. And also when they’re in a point where they have degrees of freedom, making them aware that they have those and telling them how to think about the problem, that might be a better outcome.

Darren [00:53:35]:
Yeah.

Darren [00:53:36]:
Chenyi, anything you’d add, I’d echo with that.

Chenyi Shi [00:53:40]:
It’s really the what do I do question. The what can I do question. And I think the important part of that piece is almost the flip side is out of the hundred things on your plate, you have to do kind of a hundred of them to keep the companies afloat. But there may be really a handful of them that’s strategically really important for the future of the business and the ability to tell the handful from the rest. Not saying you won’t deal with the rest, but the mental clarity of that is the piece at this stage really matters to your business, and you have sort of your degree of freedom right now to deal with it, which you won’t have later on because those may be locked in. I think that’s where we were trying to push our work to give more clarity to. To business leaders.

Darren [00:54:31]:
Yeah.

Darren [00:54:32]:
Yeah, really well said. If I were to summarize it, it’s. There are those businesses out there that have already discovered their powers, and I think your model is giving them greater insight into how to exploit that right for economic advantage and for the good of the customer. There are probably leaders out there that have yet to really grasp the inherent power that’s available to them. And I think this model gives them the insight to do that. And then there are probably a lot of leaders which are in businesses or industries where power is going to really be hard to come by. But having a really accurate sense of that and what their degrees of freedom are and aren’t is going to be immensely important to sort of where and how you place your bets and where you spend your time. Is that a fair way of summarizing?

Hamilton Helmer [00:55:22]:
Yeah, that’s. Yeah, I think. Yeah, that’s very true.

Darren [00:55:25]:
Yeah.

Darren [00:55:26]:
Yeah.

Darren [00:55:26]:
And it Sounds like your second book is going to just be the next level of depth to help people really explore those fundamental issues. So I’m so excited that you’re doing it, so appreciative that you’re putting your time into doing it and I imagine there are many others that would echo that. So.

Hamilton Helmer [00:55:43]:
Yeah, just, just don’t ask us when we’re going to finish.

Darren [00:55:45]:
I won’t, I won’t do that again. I might nudge you by email or something. Not that you need it.

Hamilton Helmer [00:55:52]:
Okay, fair enough.

Darren [00:55:54]:
Yeah. Anything else as we, as we wrap here that you, you would want to add or put a finer point on before we do close?

Hamilton Helmer [00:56:01]:
No, I, I Again, the comment that as probably you’re getting what, what you’re paying for is, is that this is hard.

Darren [00:56:11]:
Yeah, it really is.

Hamilton Helmer [00:56:13]:
I mean, a position of power is, is it makes for such a nice situation for a leader because it basically creates a little bit of slack. Maybe I shouldn’t be saying that, but you know, you can pay your employees a little more. You can, you know, you don’t have to worry about your, that whether your P and L next quarter is going to be disaster. You know, you, there’s this feeling and that so it’s, it’s just so much easier to manage and, and, and, and the outcome for all your parties, for yourself, your own job, your employees and your owners, your shareholders. It’s all, it’s all, all points in the right direction, but it’s hard.

Darren [00:56:57]:
Yeah.

Darren [00:56:57]:
There’s a, probably a fourth class of leader I might want to just add here and get your reaction to really quickly, which is it’s the founder considering founding a business and the CEO that’s considering their next role. I imagine if I were in either one of their shoes today, this model would be such an important tool for evaluating what opportunity we want to take on. Oftentimes the shorthand is great market. Right. Just enter a great market. But you’re pointing to something, I think that’s distinctively more nuanced. And I think, you know, having the opportunity to assess your next opportunity as a leader probably is another really good example of how to use this.

Hamilton Helmer [00:57:40]:
Yeah. If you’re thinking about what kind of business, what the opportunity is, this is something you’d want to think about very, very carefully.

Darren [00:57:49]:
Yeah. Yeah.

Hamilton Helmer [00:57:49]:
Because you can, you know, I think the poster child of that for me is I think his name was George Fisher, who went in to take, take over in Kodak. Right. And, and he was a phenomenally good leader, I think. And, but, but took on a business that basically didn’t have a future.

Darren [00:58:10]:
Yeah.

Hamilton Helmer [00:58:11]:
And I think when he joined, if I’ve got my story right, the stock price went up immediately. But, but then, you know, you basically, you were, he, he’d been dealt a very bad hand. And so you want to, you want to think very carefully about that, about the potential for it. And so, yeah, I agree with that assessment.

Darren [00:58:31]:
Yeah. Hamilton Chenyi, it’s been an absolute delight. I’ve loved geeking out with you on what is an incredibly important topic. Again, thank you for your contributions and particularly for your time in this conversation.

Hamilton Helmer [00:58:45]:
Thanks so much.

Darren [00:58:46]:
Thank you.

Darren [00:58:56]:
As I’m sure you can appreciate, while we covered a lot of ground and went deep into the nuances of Hamilton’s model, there is so much more to his work. I encourage you to read the book if you haven’t already. And if you’re in a leadership position where getting strategy right matters, I invite you to dig deep into the fundamental nature of strategic power. I look forward to being with you on the next episode of one of One. Until then, I hope you live and lead with courage, wisdom, and above all, with love.

One of One is produced by Erica Gerard and Podkit Productions. Music by John LaSala.

Listen Here

In this episode of One of One, Darren sits down with Howie Liu, Founder and CEO of Airtable, to explore his journey of building and scaling a company with a bold mission: democratizing software creation. Over the past 12 years, Howie has navigated multiple phases of growth, each requiring an evolution in his leadership. We discuss the critical role of a founder-CEO in shaping culture, driving performance, and staying deeply involved in the details that matter most. Howie shares insights on balancing high-level vision with execution, and how leaders can stay adaptable as their organizations scale. This conversation is a must-listen for CEOs and founders looking to build enduring, high-performing companies. Enjoy this insightful discussion with Howie Liu.

Timestamped Overview

00:00 Low Code Evolution at Salesforce

03:36 Making CRUD Apps Accessible

08:17 Expanding Use Cases Across Industries

12:12 Customer Feedback Drives Airtable Growth

15:18 Rapid Revenue Growth Through Deep Solutions

19:18 Scaling Risks: Losing Customer Focus

21:14 From Farmland to Rocket Launch

25:42 Tech Industry’s New Era Introspection

27:15 “Achieving Business Alpha Through Detail”

31:49 Honest Feedback Over Sugarcoating

36:17 Cultivating Focus and Intensity

37:15 Focus and Innovation Shift

41:05 Beyond Theoretical Business Planning

45:08 Founder Insights: Leveraging Unique Strengths

49:37 Embrace Maturity and Self-Leverage

50:43 “Clarity and Authentic Leadership”

Full Transcript

Darren [00:00:01]:
Hi everyone. Welcome to another episode of One of One. My guest today is Howie Liu, Founder and CEO of Airtable. In our conversation, Howie talks about his initial mission at the founding of Airtable to democratize software creation. He shares his journey over the past 12 years and how each phase of that journey required an evolution in his leadership. We discuss the importance of being in the details as a CEO and the outsized role that a founder CEO in particular has in shaping and driving a high performing culture. I hope you enjoy my rich conversation with Howie Liu. Howie, so good to be with you. Thanks so much for being on the show and I’m really excited about this conversation.

Howie Liu [00:00:54]:
Yeah, likewise. Thank you, Darren.

Darren [00:00:55]:
I was reflecting on Airtable. It’s such a great company as we’re a business user of it and a big fan. But one of the things I find really challenging as a CEO is just describing who you are as a company and I thought you might just start there. Particularly for people that haven’t yet had the experience of your product. How do you describe Airtable to customers, to investors, to employees?

Howie Liu [00:01:18]:
So when we started the company, we had a very clear vision and that’s still relevant today. And it was. We wanted to democratize software creation. We wanted to take really powerful business apps and build them, break them down into building blocks, the database, the logic layer, the interface layer, and make that really accessible to a new generation of app builders within every company. We started out product led growth, it was entirely bottoms up growth, driven by people finding the product, loving it, adopting it, and eventually paying for it. And over especially the past five years, we’ve been marching further and further upmarket into really strategic use cases, including at some of the largest companies. So a lot of what we’ve done more recently is about supporting larger scale, more critical use cases.

Darren [00:01:58]:
Yeah. I loved the first time you shared with me your original mission of democratizing software creation. It really resonated and I think in some ways you’ve done a lot to do that and bring that reality to life. This whole notion of low code, no code that now people take for granted. You founded the company 12 years ago. That was a vision of yours, certainly at that point and probably a little bit before then. But yeah, I’d love to go back to that origin story a little and tell us a little bit about what was animating you to start the company. What were your hopes and how have they come to life to the extent they have?

Howie Liu [00:02:32]:
Yeah. I mean, really was the convergence of a few factors. One is from a pragmatic and a Business standpoint, I had worked at Salesforce for about a year and a half after I basically sold a prior smaller startup to them. And in this timeframe, like 2011 12, there was this like excitement happening around low code in general. But typically low code was like a very complicated, powerful technology that was still only in the realm of professional IT developers or very advanced users, right? And nonetheless, I saw the value of if you could build apps without having to go through all of the traditional process of coding, there’s a lot of value there. And in fact, every one of Salesforce’s use cases is basically a customization of their platform and it’s a giant low code platform, right? And so they were winning CRM use cases not because they had built every feature under the sun into the product, but because it was a platform ultimately. And so seeing the value of that platform concept and how it could be applied to many different business problems was one factor. The other factor was, I think, just a personal passion I had for creating software myself, right? And so in high school and college, I learned how to program. I was building different apps. A lot of those apps ended up being some form of what’s called a CRUD app, right? So create, read, update, destroy on some set of database records. And in college, for instance, I actually had a few internships, one of which I built exactly this, a CRUD app for a company. It was like an ad tech startup. And my entire main contribution for the summer, which actually turned out to be pretty impactful, was building from scratch with code, a database where they could keep track of their different creative assets. And it was kind of a lightweight CRM use case as well. But in hindsight, it was like crazy that I had to go and write raw code and build all of these pieces from scratch when a lot of that functionality could have been generalizable to many other types of business applications, right? And so I think I had this like, excitement around this idea of like making that power really accessible to more people and kind of thinking about how to take these complicated software building concepts, the database, the logic layer, the interface layer, and distill them into to really intuitive, really kind of visual and kind of graphical interface metaphors, right? Sort of like the way that the, the GUI operating system took powerful computing concepts that were previously accessible only through a terminal green screen, blinking cursor, and knowing all these arcane commands into something that anyone could use, right? You can just point and click and drag and now like tap to be able to manipulate an operating system. So that passion for taking the power of software creation and really thinking through the design problem of making that very accessible.

Darren [00:05:07]:
So for those of us include myself that aren’t really deep into computer science, bring that to life through the. Through a use case. For somebody that has a passion for creating something, an application, a business application, what does Airtable allow them to do that they wouldn’t otherwise be able to do?

Howie Liu [00:05:25]:
Yeah. So, I mean, a lot of our customers don’t realize they need to build an application in the first place. Right. So a lot of times they’re trying to solve a problem. If you’re a small business owner and this. This was very prevalent early on, maybe you need to track your inventory or your customers or you’re a nonprofit and you want to track your donations. Right. Or program initiatives. And traditionally you have a few options. One is just don’t track it systematically. Have everything scattered in different spreadsheets and emails and documents. And every time you want to find something, there’s no central source of truth. Right. So it’ a huge kind of overhead to go and coordinate and figure out what’s going on. Your alternate option is to look for something that’s off the shelf. Right. So maybe there’s a very bespoke piece of software built by probably a niche software vendor that’s specific to donor tracking. Right. For nonprofits, the problem with that is it’s not very flexible. It doesn’t really suit your needs. Maybe it’s overcomplicated. And rarely do you get actually the exact experience that you want. And so most people kind of end up compromising in between one of these two. Right. Or they just have spreadsheets they’ve kind of kluded together into a makeshift app effectively where, you know, they’re tracking data, they’re putting customers, they’re putting items into a spreadsheet, but because it’s not a structured application, they can’t do really basic things like report on it in a easy way. Right. To have some structured data types so that they can make sure that there’s consistency in how people are entering data, and then perhaps most importantly, to have, like, a really great way to build workflow around that. So instead of just looking at a sea of cells, to be able to go and actually create a pipeline view, for instance, or a calendar view, or otherwise create some kind of workflow around that data. So enter Airtable, where especially early on, our key wedge was it was as simple to use as a spreadsheet. Right. So the interface was kind of intentionally very similar to that of a spreadsheet. There’s a grid view, but unlike a spreadsheet, we had data types, right? So you can come in, you can define field types. So here’s a dropdown, here’s a number field, here’s a checkbox field. And then anybody else coming into the app knows, okay, I have to put a number in this one, I have to put a checkbox in this one. And then you could compose different views on top of that. So once you have the data in there, it looks great. On mobile you could create a calendar view, create like a Kanban or a trello like view on top of that data and ultimately connect different data sets together. So if you have customers and contacts, you can connect those together, or nonprofit donors and volunteers, you can connect those together. So you know, you start to layer in all of these different more powerful app building concepts, enabling the customer to ultimately build a pretty comprehensive way to run their operations, starting from something very simple and accessible.

Darren [00:08:06]:
So that could be a passionate sort of individual contributor or leader. You’ve talked about going up market to enterprise. What would be a typical use case of a large scale application of Airtable?

Howie Liu [00:08:17]:
Yeah, so we have a lot of presence in media, in tech and retail, increasingly in finserve and even like other industries like oil and gas for instance. But often what happens to is there’s a line of business person, right? So it could be at a really large retail company, maybe somebody in the marketing department and they realize they need to have a better way of tracking their global campaigns and how they plan them. So they’ll actually build a use case on Airtable for that. But eventually it’ll expand out to adjacent teams and adjacent workflows that ultimately comprise some of the most important value chains of these enterprises. So you know, at retail companies often it’s marketing and creative and merchandising operations. At media companies it’ll be actually end to end content production operations from pre production and resourcing to production to post production rights management, even things like release marketing that are attached to it. But really you start building these end to end use cases on top of the platform. In tech companies, often it’s digital product operations, so tracking your product roadmap and all the releases, but also being able to see the the entire life cycle of then once you release those features, how are they doing and what customer feedback are you getting and how do you learn from that to go and execute on the next thing? So we’ve really kind of seen these pretty large use cases or strategic use cases emerge in each of the Top industries that, that we’ve gotten a lot of growth in.

Darren [00:09:38]:
Yeah. Okay. So great job, I think very efficiently and quickly bringing to life Airtable. It’s a. It’s an amazing company. I’ve got so many other questions like what about AI and where do you see this company going over the next 10 years? But maybe we can hold those for a moment because I’m really mostly interested in you.

Howie Liu [00:09:55]:
Okay.

Darren [00:09:55]:
And you as founder and CEO specifically. And I’d love to hear your journey from. Okay. I founded a small company, I sold it to Salesforce. I’m in Salesforce. I found this company and I’d love you to walk us through the journey in whatever way you want. Maybe it’s chapters of your own journey, but I know that your own journey has gone through stages of evolution. So how do you describe that?

Howie Liu [00:10:21]:
Yeah, I mean, I think the job I’ve played has changed at every phase because the need of the company has changed. Right. And so I think when you’re first founding a company, the only thing that matters is finding product market fit. And I like to think of that as really an exercise in understanding a problem that the world has. Right. Like product market fit always. I mean, anything sustainable always comes from identifying real customer pain or opportunity and delivering real value to customers. Right. And hopefully doing it in a way, way that scales quite well. And so early on, it was really about not just coming up with the premise of Airtable, but going and building the product. Because ultimately this was. This was a. An idea that could only come to life with really good product execution. Right. Like the devil was completely in the details here. So first two and a half years of the company were really myself and my co founders and our early founding team going and just working nonstop to build and kind of refine that MVP to the point where we could get more feedback on it, we could get more kind of customers actually using it and then eventually launching it to the public in 2015. But that was almost more like a just a product centric team playing a mix of like product engineering, backend engineering, and also like PM and kind of makeshift designer roles, as we all did during that time. I think once we launched and we had a product that was out there and it was getting some traction and customers were actually starting to use it, I think my role had to shift into one of figuring out how to scale even that initial product market fit. Right. So I think of it as you have like this spark of a flame that you’ve kind of rubbed two sticks together to create. But of course, you have to like, blow on it very gently to be able to turn it into a real sustainable fire. And so a lot of the. The next phase was really about understanding what were the kind of patterns of repeatable fit. Right. So, you know, talking to lots of customers, I actually had an email campaign go out from my email saying, hey, I’m the CEO and founder of the company, wanted to check, hear your feedback, and actually got like, I think thousands, if not tens of thousands of replies from real humans telling me what, what they were doing with Airtable. And a lot of my time in that time was really spent on reading through all of that, sometimes getting on a, you know, zoom call or just corresponding back and forth with these customers to understand what they were doing with Airtable and then to figure out what is the next most impactful thing we can build into the product to unlock or better serve their use case. Right. Because often we would hit and run into performance limitations or feature gaps that were keeping some of these customers from fully using Airtable. Right. In other cases, it was figuring out, okay, for the ones that we have done a good job of serving already, how do we go and get more of them? Right. So how do we go and create templates around that use case and better expose that to new prospective customers? So next phase was really kind of almost playing like a growth product and growth marketing person within the company and doing some light management because we still had a small team, like probably 10, 15 people max at that time, but starting to shift into like recruiting talent for the company. Right.

Darren [00:13:25]:
So can I interrupt you there just so it sounds like those first two phases, let’s call them four or five years.

Howie Liu [00:13:31]:
Yeah.

Darren [00:13:32]:
Played naturally to your existing strengths. Right. Your product technology, it’s obvious you have a passion for understanding what customers really want and how to be responsive to those needs. Does the next phase shift into something that calls forth different skills that may be less natural for you, or what is that next stage?

Howie Liu [00:13:53]:
I think to me, it’s not like there’s something more innate about a founder who understands product versus a founder who then has to figure out how to like, recruit and manage people. I think they’re all learnable skills. And it’s not like I was born immediately knowing how to build product. Right. It’s just something that I grew an interest in and then, you know, honed my skills both during this early period of Airtable as well as before. So I actually think of it as more. More a constant learning exercise. Right. I think switching gears even from that initial product building phase to then like kind of the growth marketer growth product and like really kind of understanding product market fit and how to scale it phase, that even that transition was more of an evolution and just kind of leaning into intuitively what I felt like was most important to unblock the success of the company at that time. Right. And then as you’re alluding to, I think layering in then the added responsibility of managing a small team, of hiring and kind of recruiting is obviously always a really important duty for any scaling company CEO, but it never really felt like those were completely kind of step function or sharp changes to the, the way I had to operate or the skillset I needed because I think it was so obvious and it was such an evolution to get there that I think it felt more like a continuous learning exercise.

Darren [00:15:14]:
Yeah. Okay, so keep going. We’re now what, six years in and I know it doesn’t.

Howie Liu [00:15:18]:
Yeah, maybe a little less, maybe like call it like three, four years at this point. And at some point we turn on pretty early on monetization and it does really well, right. I think because we’re solving a pretty deep problem for customers, right? We are a system of record often when we get deployed or when we get adopted. And we’re not just a shallow kind of layer of collaboration. We’re not just kind of a narrow point solution. We’re really kind of a platform that is serving these pretty important use cases, often powering the very operations that matter most to these companies or teams. And so when we turn on monetization, we’re able to actually grow our revenue very quickly, right? So we go from basically zero to a million in revenue in I think just basically a few months and then from a million to well over 10 million in probably less than a year and a half. And so during this phase it’s kind of figuring out how to now be a business, right? I mean at least the beginnings of a real business and thinking about revenue, not just hiring and scaling the team on venture capital dollars, but really thinking about how to scale revenue further. And this is when we start thinking about how do we, how do we build up our go to market strategy. Right? And of course like at the same time we’re growing the organization as we go from 10, 15 people to 20, 30, 40 people. We have now the need for management, right? Like we have, you can’t just have like a flat organization. You need to add in managers for different parts of the org. So I think that was probably another big transition is learning to go from directly Managing the team and kind of knowing everything at an intimate level that’s going on across the entire company to now having to at least to some extent delegate some amount of authority, accountability, and importantly like hire the right people to do that across the company.

Darren [00:17:02]:
Yeah. So as you go through this, I’m curious about key moments where you were particularly challenged or big lessons that you learned along the way. So as you keep going just to draw those out, anything that you’d reflect on?

Howie Liu [00:17:18]:
I mean, certainly hiring and managing managers is a very different thing from hiring and managing ICs. Right. And I would say that transition actually felt more abrupt than the transition from just being an ice building product to then hiring ICs. Right. Because in a way, I think if you’re a good IC product, if you know engineering, I think it’s pretty intuitive to like go and both hire and manage other people who have a similar skill set. Right. And in this next phase, for the first time, you’re, you’re hiring managers which, especially if you yourself are not a very experienced manager, like you’re kind of trying to assess somebody for a skill set that you haven’t cultivated fully yourself.

Darren [00:17:59]:
Right.

Howie Liu [00:18:00]:
So I think that’s definitely a challenge. And I also think you’re often now hiring for roles that you have never played yourself. Right. So if you’re hiring your first HR hires, if you’re hiring your first marketing hires or sales hires, and you’ve never been a full time salesperson, that is a bigger leap in terms of figuring out like, how do you hire somebody really good for those roles. So definitely kind of a, this feels like the phase where we’ve kind of really entered a whole new world. Like I’ve entered a whole new role world in terms of my, the demands on my role and skill set. And I think you, you try your best, you kind of operate both on intuition. In my case, like, I certainly leaned a lot on advisors, on investors, on other operators who had been through this or kind of further in their journey to get advice. But I think you also learn by trial and error. Right. We certainly made hiring mistakes during that time. I certainly learned by trial and error how to become a manager. And if you kind of look at the arc of the next few years, when we then started hyperscaling, it took us probably six years to go from zero to 50 people. It took us only a few years to then get from 50 to call it a thousand people. Right. And so just immense growth, adding multiple layers of management, adding much more organizational complexity. And I think this is really the part where it’s very easy to fall into the trap of overcorrecting from in the early days, you’re in the details, you’re micromanaging in a good way, all the details to now not being able to do that and getting disintermediated from both like direct from customer insights. So that’s the probably biggest risk is like you actually get distracted away from customer, real customers, real customer details and also real execution details that are customer facing. Whether it’s marketing, like what is literally the marketing message you’re putting out in front of literally whom. Right. Like what’s the exact targeting you’re doing, whether it’s in product or in email or doing outbound from a product standpoint. Like you also get abstracted away from the specific details of what you’re shipping. Right. And so I think this is one of the most challenging scaling phases because as you’re trying to delegate and scale up and kind of level up in terms of management team and how you run the org, it also becomes the riskiest in terms of you lose all the fidelity that is actually turns out that’s the devil’s still in the details. Right. Just like in the early days, but you may just be more removed from those details by default.

Darren [00:20:31]:
Yeah. So I hear this story, it’s been repeated multiple times, which is you’re going through a period of hyperscaling. You hire are quite senior leaders who have been in similar scaling situations. So bring a level of experience that if as a first time CEO, founder, you don’t have, you do get abstracted away. Because the conventional wisdom is you hire great people, you empower them, you get out of their way.

Howie Liu [00:20:58]:
Right.

Darren [00:20:59]:
You don’t get in their way. And what I’m hearing you say is you get too far abstracted from the business, you’re losing a massive amount of fidelity. Would you do it differently if you were to do it over again? And if so, like what’s the big lesson for you having gone through that?

Howie Liu [00:21:14]:
Yeah, I mean I think my mental model of a company in this scaling phase has gone from it’s like this big patch of farmland and you can like hire different leaders who each get their own patch and they can like go and till it and grow it and kind of harvest great at great crops on their own, given enough autonomy and resources. Right. So you give them the water, you give them the supplies and tractors and they go and like create like a beautiful bounty. Each of them kind of owns their own patch. That was kind of my old mental Model, per your point about like basically hire great people, empower them and then kind of get out of their way. And I think now instead my mental model, especially for high growth companies in quickly evolving markets with, with potentially rapidly growing competition, is it’s much more like you’re trying to launch a rocket ship, right? And I mean the irony is like SpaceX is a great example of this where it requires incredible attention to detail. But even metaphorically, like when you’re trying to launch a spaceship, you don’t just give like 10 different people complete autonomy and hope that they build their parts and you just put them all together at the end and they all work. Right? I mean it, it, there’s too much risk that those parts don’t actually work together, right? Or that there’s some unanticipated issue, you know, with one part and you have to change its configuration and then that requires a change in the whole rest of the part parts, right? They all have to come together in a really intricately kind of interwoven way, right? And in some sense it requires a great concentrated alignment of effort or else by default it’s not going to work, right? So rather than it being like a, okay, everybody kind of goes and like tills their own land and maybe they generate 5% better crop, maybe they generate 10% better crop, it’s much more like, okay, if we don’t rigorously, you know, work together, we’re not going to launch this rocket ship. Like, it’s just, it’s not going to work. Right? And obviously the answer is probably somewhere in between. Like some companies, especially software businesses like ours, don’t instantly go kaput if you don’t like, work really well together. But I do think the outcome is disproportionately high for the companies that are able to pull together in kind of that, that ladder model. And so to me, it’s really about being involved in the details. Not because of a lack of trust in the leaders you’ve hired, but really because only the CEO, by definition, if you know that the CEO is the junction point at which all these different functional leaders are reporting, engineering, product marketing, sales, hr, et cetera, you’re the one junction point that can actually make sure the interlock between the parts is working. And as each part evolves in spec and requirements that you’re evolving kind of all of the other parts as well, right? And so, so I think it just requires, you have to be like close enough to the shape of those parts or in this case like what you’re Actually doing from a marketing standpoint, learning from that and using that to kind of reinforce some of the work that is being done in product and sales and vice versa. Right. Leaning into sales and hearing from real customers. Right. Or post sales and seeing actual customer deployments and gaining a certain level of alpha from that you wouldn’t be able to get if you just got the abstracted version of the report. Right. It’d be like if you had a physical product that you retailed, but you never actually went to individual customers and saw how they experienced the product, bought it, used it. Like you would lose so much valuable insight into how to improve that product, how to build the next product, and how to better sell the product.

Darren [00:24:43]:
Yeah, I seen you have this realization and shift into a very different gear of leadership. And so I wanted to make sure we don’t skip past this point because I think it’s a really important one. So I’m curious to understand when it was that. I know it’s not a moment in time. Right. That you begin to adjust your mental model.

Howie Liu [00:25:03]:
Sure.

Darren [00:25:03]:
And what did it look like? Like, what were these specific actions, behaviors, ways of leading that you experimented with and where have you settled? What does it look like to be a senior account exec at Airtable or a senior product manager? Like, what does that. How would they describe who Howie is as a CEO?

Howie Liu [00:25:23]:
Sure. Yeah. I mean, I think the. The catalyst for this change was in part the macro environmental change. Right. And not because the macro change immediately impacted our business in a significant way. Like, we were actually relatively less impacted than many other companies that like, were instantly hit by interest rates. Right. If you were in the lending business, for instance, or in the used car sales business, you saw a much more immediate impact. Whereas for us, it was more that the changing of the times. And I think the kind of new sentiment across the tech industry was a really good forcing function for us to revisit our own practices and for me to deeply introspect on how are we running this company. Does it make sense in this new kind of era where it’s not just about hiring at all or growing at all costs and hiring lots of people and really just kind of doing a lot of different things without a ton of checks and balances? Right. That was kind of the sentiment of the previous time. And it felt like that was starting to just intuitively be very. Feel very inappropriate for this new era where there could be a tightening of economic purse strings across the. Across the enterprise landscape. Right. So that could impact our customer spend on our product and more importantly, it could impact like just the culture and the sentiment of how great companies should be run. Right. So I think it was a healthy kind of moment to pause and reflect and kind of really decide like how do we want to operate in this new phase? Both for us as a company, we had also reached a certain level of maturity and multi hundred million revenue scale. Like getting to the point where we had to start thinking about, you know, what does it mean to be a mature, maturing business that should be public ready. Right. Whether or not we’re going to go public right now, we need, we want to be a public ready business. And so, so as I thought about that, it became obvious there are a few specific changes we needed to make. One is I wanted to get personally much more in the details for exactly the reasons we kind of hinted at, right. It’s impossible to make much leaner bets with your company and to know how to work smarter, not necessarily just harder or with more people unless you’re in the details, right. Like I like to use this term now, alpha meaning investor alpha, where it’s like every great kind of public market investor is always looking for alpha and that’s like proprietary insight, often from proprietary knowledge or research or something they’ve done. And I think the equivalent for an operator in this context is you can’t make great decisions as a business whether they’re bigger strategic bets, like what’s the acquisition we can make, what are the, like what’s the big, you know, kind of product bet we should make or even like little incremental bets, you know, unless you have alpha and you don’t get alpha, unless you go and like get the primary source evidence that then you can, you know, kind of develop your own intuition around. Right. So the first step was I wanted to plug in to anything especially that was particularly important in terms of product market fit or like our go to market repeatability. Right. Like ultimately those are the growth drivers for us as a business. So I really wanted to get closer to, I really wanted to get closer to like what the, how we were thinking about developing product to create more customer value and to acquire, you know, make it easier to acquire new customers and also to sales and marketing because that’s also a form of product market fit, right? Like sales is literally how you go and articulate your value to customers, especially in, on the high end and see what resonates, right. And as you go and implement with them, see how well the product actually delivers on that promise. So, so spending a lot more time in the details there. And also I think being a lot more explicit about the not just high level goals. I mean, if you get too high level with goal setting as a company, you end up with something like, okay, we want to grow, we want to deliver value to the world, but it’s super generic. Right. Like you could say like every company has ultimately the same goal of like growing and making revenue and profit and whatever. And so I actually think, think in this much more involved mode of running the company, you also need to care about tactics. Right. So from a sales standpoint, it’s not just hit your number and what number is that? But it’s also how do we think we, we need to sell. Right. In our case, we have this opportunity to go in and do a much more consultative strategic sale for our largest customers where we actually go in and deeply understand their business and we understand what are the operations challenges that they have that are most meaningful and most solvable with our platform. Right. And finding the sweet spot of intersection between those is actually how we land our biggest customer deals. Whether it’s a completely new kind of top down sale or it’s an expansion play within an existing account that has already seen a lot of organic adoption and proliferation of Airtable. But that’s an example of being more intentional and having a stronger opinion about the specific tactics we need to employ to win based on an understanding of our product market fit and like how we actually create the most value for our customers.

Darren [00:30:32]:
Yeah. I’m imagining you’re also really upping the ante in terms of what you’re asking of the organization. And one thing I’ve heard and seen you do is get, and I mean this in the best sense of the word, like brutally direct in ways that maybe may have been a shift for you. Is that fair? And give us some color around. Because I think everybody talks about a high performance culture and then they get stuck. Right. Because they want people to feel valued, they want people to feel engaged. And how do you manage that tension? Which is, I think very real.

Howie Liu [00:31:07]:
Yeah, I mean, I think to some extent it’s something that’s like hard to set into motion if, if you haven’t done it consistently or well before. Yeah, it’s like radical candor, brutal directness, however you want to put it. But once it’s, you know, once it starts going in motion, I think it actually becomes easier and easier to kind of reinforce. Right. Both because, you know, when you’re direct with someone, it’s not about being inhumane, it’s not about like insulting someone. Like, I never want to come from a place of like wanting to negatively impact the person. I’m always very direct about the work, right. And so if there’s a project that’s not going on track, the direct feedback on it might be, hey, this is slipping. I feel like we’re behind. Let’s diagnose why that is. But this progress is not good enough, right? Like we can do better or it could be on the quality of the work. Like this wasn’t thought out enough because we’re not considering this and this. It’s never about the person and saying, hey, you’re incapable, you’re bad at doing this. It’s more like this particular time and this particular output, we can do better, right? And in fact, and I think it’s almost worse to sugarcoat it and say like, oh, there’s the whole concept of the shit sandwich, right? Where you like, compliment and then you give the critique and then the compliment. But I’ve always felt like it’s a little transparently obvious and the person receiving it kind of transparently knows. And so you may as well just be honest and direct and say, like, look like this particular thing, you know, didn’t cut it. And here’s why specifically, and here’s the next action I would like you to take. At the same time, like, I think being. Also acknowledging like when great impact is created or great work is done is also important. Right? But I think over time it becomes like almost a, a normalized expectation that, you know, you get direct feedback, you give direct feedback. There’s obviously cultures like Bridgewater that are even more kind of intense about it, where you’re getting like ratings on your performance and how well it’s being received. But I think a lot of it comes down to like people understanding where the feedback is coming from, why it’s being given. And ultimately it’s in the aim of better realizing our mission as a company. Right. Like we have important purpose as a business and as a company and we’re all trying to row in that same direction together. Our purpose is not about making everybody feel patted on the back. It’s really about delivering incredible value to our customers and innovating to be able to deliver even more value. Right. And so, so I think the underlying motivation behind the feedback is also important because we’re all ultimately aligned around a shared cause.

Darren [00:33:40]:
Yeah, we haven’t talked at all about culture and the culture at Airtable. I’m a firm believer, particularly in founder led breakthrough companies. I think I’ve Heard you use that distinction. Breakthrough companies, which I think Airtable is very much that the culture is merely a reflection of the founders clear and consistent and visible behaviors. First of all, would you agree with that? And second of all, how would you then describe the culture and is it a reflection of how you want to lead and how you’re leading?

Howie Liu [00:34:10]:
Yeah, I mean, I think I definitely agree that organizations reflect the values and behavior of like, I think it’s very innate in us that we look to each other and to our leaders to like know what’s, what’s valued and what’s not. Right. And there are value systems within every organization. Like the things that we care about, the things that we model for, for other teammates and the things that we reward. Right. With, with promotions or with like congratulations. Like the things that we really say, hey, this is great. Is it effort? Is it impact? Right. Is it kind of being nice or is it like being right? Right. I think there are all these trade offs that you can make organizationally around what your value system is and the behaviors that help reinforce those values or that ultimately manifest because of those values. And, and I think ultimately that’s only lived through people. Right. Like, values can never be kind of realized through like documents or something that’s abstract from people and behavior. So I definitely think it’s a little bit of a two way street. I see. Because I think you can, I do think leaders can intentionally shape their own behaviors and values over time in an authentic way. Right, right. Where you actually like, you grow as a leader. Right. Like I feel like I’ve grown a ton every year for the past 12 years and even before that, but especially in the most kind of intensive years of greatest change, like that’s when I’ve learned the most and I’ve grown the most. And I’d like to think that I, every time I feel like I introspect and realize I could have done a better job or shown up in a different way, I like to shape how I think about my role and the way that I lead going forward to reflect it. So I think it’s really two way where leaders obviously shape the organization and the culture and the values with their own behaviors. But then also over time they are themselves shaped by the ideal that they aspire to and that the organization hopefully aspires to.

Darren [00:36:10]:
So how would somebody at Airtable describe the culture and is there a gap between what you want it to be and where it is today?

Howie Liu [00:36:17]:
I think one word that is really representative of probably the change that I’m happy with over the past few years is focused and more intensive. Meaning I think there was a time where we were never intentionally a slow moving or soft culture, but I think it was easy to as a matter of fact be somewhat slower moving and be somewhat softer when we didn’t have a sense of urgency. Right. And maybe that was because during the ZIRP years we didn’t really have a sense of scarcity. Right. It felt like growth and venture capital dollars were very plentiful and so there wasn’t this sense of scarcity which I think actually breeds a lot more urgency. Right. I think part of it was also the shift towards being focused and having more intensity was also driven by, you know, kind of me personally leaning in and caring more about the details. Right. Like when you put the spotlight on more parts of the business, I think you can have more focus versus in the kind of more arm’s length delegation approach, it’s harder to carry forward all of that focus and urgency throughout the organization. So those are two concepts I would use to describe a major shift we’ve made. Maybe the third that I think was very present in the early phases of the company and I’d like to think has been still present throughout and I want to breed even more of is innovative. Right. Because I think we’ve always been a company that values doing things on first principles when it matters. Right now it doesn’t mean like I don’t want us to reinvent the wheel every single time when it comes to figuring out what’s the best way to engineer a feature if it’s a very straightforward thing. Right. Or we don’t want to forego the best practices of sales comp. You know, if there’s just some good frameworks in place. So it’s not about kind of thumbing our nose to like good prior practices, but it’s really about saying to be a breakthrough product, which Airtable in its founding was one. Right. We didn’t just build something the same way that everybody else did. We took a concept of no code, low code app platforms and really kind of through our own first principles, design and engineering built a much better product. Right. That didn’t exist prior. Right. And there were no kind of one for one products that we could copy from or directly just be inspired by. So we kind of have to do it on our own. And a lot of the subsequent innovations we’ve introduced are also like that, where we’ve made some breakthroughs in how we think about introducing AI into the product. We’ve made breakthroughs at earlier points of the company in terms of thinking about how to add kind of additional layers of functionality into the product, whether it’s data scale capabilities or how you can integrate data into the product, etc. Etc. So I think we need to keep also this innovative spirit and this creative spirit alive, which means we have to be focused, we have to have this urgency. And yet we can’t just do everything linearly, right. We can’t just execute on a very obvious deterministic playbook. We have to also manufacture innovation. Right. We have to think about like, okay, what’s the next big leap for us in terms of AI product value? Right. We currently already have the beginnings of our AI roadmap already in place and in ga and customers are using it. But we need to keep thinking ahead of the curve and come up with more intuitive ways to deliver AI value into our product. Right. So I think that innovative, the creative, the out of the box thinking, the energy around it is also a really important dimension of culture for us.

Darren [00:39:54]:
Yeah. I don’t think you quite explicitly said this, but I will say, at least as I’ve observed at the, the evolution in culture has been pretty remarkable over the last few years. And again, although you didn’t say, and I want to test it with you, I think your role in that it was outsized. And I’d say that not to praise you, but to point to a fundamental notion of high leverage in an organization that I don’t think gets enough attention, which is. And it’s a responsibility too. So founder, CEO has both opportunity and responsibility as the highest point of leverage in an organization would be my assertion, and can move an organization and accelerate change faster than anything. Do you agree with that? Would you allow yourself some of that credit?

Howie Liu [00:40:40]:
Well, yeah, I think in a way it’s true for a number of reasons. One is I think every leader sets the pace and the tone for their organization. Right. Like any kind of organization. Right. And so I think, whether intentional or not. Yeah, exactly. And so I think being intense and focused and innovative as a leader shows everybody else that’s what we should all be trying to do. Right. I think too some of these things are easy to theorize and strategize about. So like innovate on product capabilities or generate breakthrough outcomes, even if it’s quantitative, like get sales productivity from this number to that number. You know, it sounds simple in the abstract, but actually it’s really quite hard to do unless you’re in the details. Right. And so I think rather than have a Model where at the top level leaders are just setting high level goals and outcomes, which in a way like, that’s kind of, I think what the, a lot of the company planning frameworks, OKRs, et cetera, maybe weren’t intended to do, but have kind of implicitly ended up encouraging is a very arm’s length kind of approach to saying, okay, like there’s a black box of how each group and each function operates. And all I care about are the inputs and the outputs and I want the output to be up here. Right. And I think in practice, like, it’s what happens in the black box that actually matters. Right. That’s how you get the incredible leverage. That’s how you get breakthrough outcomes. And so I think showing that as a leader, you care about the black box, the inner workings, the tactics, and figuring out what tactics are working, what insights can be exploited to kind of drive more success that actually yields better outcomes than just being at arm’s length and saying, hey everybody, figure it out on your own and get us this better outcome.

Darren [00:42:34]:
Yeah. Let’s talk a little bit about your journey. Overall 12 year journey. It sounds, when you look back like a, a pretty straight line. Right. Maybe with a little bit of bumps here and there.

Howie Liu [00:42:46]:
I feel like it’s been much more.

Darren [00:42:47]:
Of a. Yeah, the reality is very different and I’ve heard it often described as a pretty turbulent emotional journey. I don’t think I’ve yet met a founder who didn’t at one point question like, should I be even doing this? Certainly. Do I even want to be doing the CEO role? Like those first three or four years? Definitely. How has this been for you emotionally? And did that, that question ever arise for you? And I think it’s a very normal and natural one. How did you wrestle with it?

Howie Liu [00:43:13]:
So for me, the role of founder and CEO are, are two different roles. Right. And I do think when you can combine both into one person, you get something, you know, even more valuable because you have the benefit of continuity, of context and also probably of agency. Right. Like the founder mentality is like, I can make something from nothing. Right. Like, nothing is impossible. Right. And a CEO mindset is how do I take what I have here organizationally? People wise, P and L wise and scale it and figure out how to build on top of it. Right. And so obviously there’s sometimes a natural sequencing of things where, you know, I think it’s fine. I don’t think we should have any. There shouldn’t be any shame about like a founder at some point saying, look Like, I was the right founder for this company and I helped run the company up until a certain point. But we need a different skill set, which is a CEO skill set to come in at this point. Right. So to me, it’s never been like kind of a given that I deserve to be CEO of the company at any given point in time or at any later point in time. And so I think with that kind of like almost healthy. I think it’s a healthy mindset of constant self evaluation. Like, how do I think I’m doing as a CEO, Right. If I’m really honest with myself? And I do think, like being the founder, you do get some extra advantages as a CEO versus a hired one. Right. Because you have that incredible context. Right. You have the ability perhaps to like get deeper into some of the details and some of the areas because maybe you played those roles in the past. Right. Maybe you helped do some of the foundational work, whether it’s engineering or product or so on, or even marketing. And maybe you did founder led sales in the early days of the company. So you have some intuition for it that coming in and ramping from scratch, even if you have a lot of management experience, you don’t necessarily have right away. Right. And so I do think there have been times where, you know, my. I certainly have had shortcomings and still do as a professional CEO. Right. Do I have the level of experience in terms of kind of running an operating cadence for the business as many external CEOs? Absolutely not. Right. But do I have like, maybe some level of intuition and context and now like agency to go in deep anywhere? And also like, like a certain level of gravitas, like when it comes to getting access to customers or senior people within our customers, like, there is something special about me coming in and saying, look, like I can tell you the whole story of how we built this company and product and I want to hear from you what your feedback is. I’m always trying to see where my own gaps are, but also lean into the kind of special, kind of advantages that I do have as a founder to play as good of a role as I can.

Darren [00:45:52]:
Yeah. So last year was a big life event for you. You became a father.

Howie Liu [00:45:56]:
Yep.

Darren [00:45:56]:
So congratulations. First of all, how has that been? How has it been juggling the responsibilities of founder, CEO and now father?

Howie Liu [00:46:04]:
I think in some sense there’s actually a lot of similar similarities between founding a company and for some people, like the company you would describe as your baby and actually having a real living human child in that I think they both evolve remarkably quickly, and they don’t always. You can’t predict exactly how they’re going to turn out. Right. So our baby’s only around four months now, and it’s our first, but it’s like every week she is a little bit different. Right. And she’s a little bit more interactive, and it’s. There’s an excitement and kind of like, anticipation of, like, each week how she’s going to show up differently. And some things, you know. Right. Like, just like some things, you know, in the company arc, right, you’re gonna have to hire people, you’re gonna have to scale up and add management, et cetera. And of course, like, people, like, grow from, like, baby to toddler at certain. At some time range between, like, let’s say, six and 12 months, they’re gonna start, like, crawling and then eventually walking and so on. But, like, the exact details of it are kind of a little bit serendipitous. And so I think I am appreciating that. That very organic journey where you can’t control it, you can’t predict all of it. And. And also, like, all you can hope to do is, like, show up as well as you can. And in this case, like, I think it’s not even like the founder journey where, like, sometimes you can say, well, hey, look, we need a better external CEO. Like, usually that’s not a socially acceptable option. Right. For. For being a parent. Right. Like, you just have to be the best parent you can be. And so I think it’s also kind of like a constant learning, introspection, like, what can I be doing better? How can I learn? You certainly read all the books. You, like, take advice from other people as much as you can, and then you learn by experience. Experience as well. So, yeah, it’s. Yeah. I mean, I would say it’s like, in some ways it feels like a familiar experience because of those parallels, but also it’s totally different and delightful in very new ways.

Darren [00:47:53]:
Yeah. Well, to extend the metaphor, Airtable is approaching its teenage years, so I don’t know what’s in store for you over there.

Howie Liu [00:48:00]:
Well, bad acne and the driver’s permit suit.

Darren [00:48:02]:
Right. And the rebellious behavior.

Howie Liu [00:48:04]:
Yeah.

Darren [00:48:04]:
Well, as we bring this to a close, I wanted to just create some space for anything that you might want to add that we haven’t covered anything you’d want to put a finer point on that we have covered.

Howie Liu [00:48:14]:
I’d be curious from you, Darren. What are the most common pieces of advice that founders who are let’s say a decade into the journey, either on one company or on multiple companies wish they could tell themselves in their early days. I certainly have my own thoughts on that. What I would tell my younger self. But I’m also curious to hear you’ve gotten to work with such great founders and operators across the board with many different life experiences than myself. Like what do you think are the common patterns and some of the surprising, sometimes off the beaten path insights from those people?

Darren [00:48:47]:
Yeah, there are probably a few themes and let’s see if they match what yours are. And I imagine they do in some Part one is there’s no playbook. So I often hear from founders. How is this done? Let me go talk to the following three companies and the reality is it’s almost always purpose fit to the company that they’re leading, the situation and the particular founder that they are. So this idea of developing an operating model from first principles I think is a really important one. And it doesn’t mean there aren’t certain things that you can pull off the shelf, but most things, I mean, Jeff Bezos I think was sort of masterful at really dedicating a big part of his leadership with his technical advisor to figuring that out and really innovating. So it’s yes, innovating at the company level. It’s innovating at the company operating model level as well. That would be one second. I think it’s over time.

Howie Liu [00:49:36]:
Yeah.

Darren [00:49:37]:
Getting enough maturity to own who you are and be unapologetic about it. And I say that first part importantly because if you do that too quickly and too rashly and sometimes you just don’t know who you are yet, but once you do, to really lean in and be very clear about who you are, what company you want to build. I had Max Levchin on the show just a few weeks ago, I think, and he’s a multiple founder, an experienced founder, but I think he’s done that very well. And so I think that would be certainly a piece of advice. And then the third that I think some share, some don’t, is the high point of leverage that I have to continue to work on myself and show up as an impeccable example of what I want to see in the organization and really relish in that because it is such an advantage to realize how much leverage you have and how to yield it for good. And I think people miss that oftentimes in a really well intended interest of trying to disperse responsibility and give people credit. And that’s all incredibly important. But they also Miss the leverage that they possess.

Howie Liu [00:50:43]:
Yeah, well, those all resonate. I think the. The there is no playbook first point really resonates, and I think it ties really closely together for me with number two, which is, you know, figure out who you are and then own it. And obviously, like, like doesn’t mean, like, own your own or lean too much into, like, your unproductive tendencies, but really, like appreciating what’s your best operating style and value system as a leader. And once you figure that out, kind of being very clear about it, right? Cause I think not being clear about it means that nobody really knows what your playbook is. What’s the playbook for the company? What’s the value system of the company that’s rewarded? And so ambiguity, I think, is far worse than clarity, even if that means trade offs. Right. Like directness over softness and maybe gentleness Right. At times. And I do think that’s a big one. And if there was a way that you could magically accelerate learning your own leadership style and not have to go through some of the trials and errors and over corrections, which, that was solvable or at least packageable. But maybe the closest thing to it is working with a great coach, perhaps.

Darren [00:51:50]:
I think in some ways there’s no way to get around it, and there’s some things to accelerate it as well, but you’ve inspired a lot of that thinking too. So thank you for your example and thank you for this wonderful conversation. It’s been an absolute delight.

Howie Liu [00:52:01]:
Yeah, likewise.

Darren [00:52:02]:
Yeah. Wonderful.

Howie Liu [00:52:04]:
Awesome.

Darren [00:52:08]:
Howie, in many ways, is the quintessential technology founder of our current era. He’s a great example of applying the same spirit of innovation that sits at the core of Airtable success to his own evolution as a CEO. I look forward to being with you on the next episode of One on One. And until then, I hope you lead with courage, wisdom, and above all, with love.

One of One is produced by Erica Gerard and Podkit Productions. Music by John LaSala.

Listen Here

What does it take to step into the shoes of a founder and lead a company in its next chapter of growth? In this episode of One of One, join host Darren Gold as he sits down with Silvija Martincevic, CEO of Deputy, a leading global workforce management company. You’ll follow Silvija’s journey from her early years growing up in Croatia to her senior executive roles at companies like Groupon and Affirm and her eventual transition to becoming the CEO of Deputy. Silvija shares her philosophy of integrating high care with high performance, the importance of adaptability as a leader, and the challenges and triumphs of leading a global company. You’ll also hear about her personal life, family integration, and the lessons learned from being on the boards of Lemonade and Kiva. Through this insightful conversation, you can expect to gain valuable perspectives on leading with empathy, driving innovation, and the importance of continuous personal transformation.

Timestamped Overview

00:00 Deputy’s Global Enterprise Journey

06:08 From MBA Student to Groupon Leader

07:31 Scaling Success: From 1 to 100

11:53 Transitioning Leadership: Becoming a Founder

14:29 Empathy and Leadership in Management

18:01 “Transformative Leadership Through Self-Adaptation”

23:56 “Creating Thriving Workplaces”

27:17 Balancing Communication in Meetings

29:10 Leadership Pace and Communication

32:02 Tech for Good: Kiva & Lemonade

36:04 Work-Life Integration & Family Dynamics

41:23 “AI Revolutionizing Business Innovation”

44:09 Embrace Change and Growth

46:44 “Inspiring Leadership and Transformation”

Full Transcript

Darren [00:00:02]:

Hi everyone. Welcome back to another episode of one of one. I’m your host, Darren Gold, CEO of the Trium Group. My guest today is Silvija Martinevich, CEO of Deputy, a leading global workforce management company. In our conversation, we explore Silvija’s extraordinary career, starting with her early years growing up in Croatia to becoming a senior executive at companies like Groupon and Affirm. Before joining Deputy, we talk about the transition of being a longtime number two to becoming a successful first time CEO. Her philosophy of leading with both high care and high performance, and her experience of serving on the boards of Lemonade and Kiva while being CEO. This was a really fun conversation. I know you’ll enjoy it. Hi Silvija. It’s so good to see you and I’m so looking forward to this conversation and really thank you for being here.

Silvija [00:01:07]:

Thank you so much. It’s wonderful to be here with you.

Darren [00:01:09]:

Thanks. Yeah. Well, we have a lot of ground to cover, I’m sure. But I wanted to start with this special company that you’re leading, Deputy. And you’re rocking a very cool Deputy T shirt right now. For those of you that are watching, you can see that. And those, those of you that are listening, I want you to imagine it. But it’s a special company. You’ve been now leading it for a couple years. I think February will be two years joining as CEO. But can you tell us a little bit about who Deputy is for those that may not know or may want to know more?

Silvija [00:01:38]:

Of course. It’s a really, really special company that’s transforming the future of work for the community of workers that tend to be underserved, deskless workers, workers that work on their feet, from nurses that work in elderly care centers to retail workers to hospitality workers. And we do that today across 100 countries serving 40,000 small and mid sized businesses. And we provide those mid sized businesses and small businesses with software to manage that deskless workforce. And for end users, our workers, we give them the technology to be more engaged, more productive at work and happier at work. And at the end of the day, really what our technology is enabling is for those workers that oftentimes are invisible to give them dignity at work.

Darren [00:02:33]:

Founded in Australia, I believe, but global right now. What’s it been like to lead a company that’s both founded in Australia and has a global footprint? What are the challenges of that or what? Bring that to life if you could.

Silvija [00:02:46]:

Yeah, so it’s a company that was founded in Australia and I am running it from San Francisco. We have employees across Sydney, Melbourne, London and all over Us, we have customers that are all over the world and the origin of the company actually is really, really special. For those of you that work in the tech industry, you probably have noticed that a lot of really wonderful HR tech companies came from Australia. And the reason for it is that Australia has some of the most complex and highly regulated labor markets. And for that reason, software penetrated the labor force in Australia much earlier than the rest of the world. So Deputy was founded. We just had our 16th birthday. I joke internally that we are a teenager that is ready to become an adult company. And yeah, it’s been really a wonderful journey. Over the last two years. I make multiple trips around the world. Sf, Sydney, Sydney, London, London, sf. I do that a few times a year. But it’s been fun. It’s been crazy. Just as for many CEOs that are leading global companies, it’s an interesting time.

Darren [00:04:05]:

And this is your first role as CEO. You’ve been in it for two years. I want to get into those two years in a moment, but I’d like to go back in time and have you walk us through your professional journey to get to this moment where you were considered and hired and started in the role and maybe if you could bring to life because you’ve been at some great companies. I think you ran all of international Groupon, Chief Commercial Officer at a firm which is another great company. You had an investment career. What were the lessons learned or capabilities you built or things you discovered about yourself that you were good at along the way that gave you the confidence to believe you’d be a CEO and do it well?

Silvija [00:04:46]:

That’s such a great question, Darren. TL Dr. Is there was no big plan. I didn’t really know or I didn’t admit to myself that I wanted to be CEO up until I decided to take the Deputy role. And for many, many years I was a number two in really wonderful companies. I started my career. You alluded to that in Investment Management. Early 2002. It was an exciting time to be in investment management as hedge funds were being created and I invested for many years in. I built a quant index fund. So that was my first experience as a founder and then invested in women and minority owned companies. It was really, really an incredible time. You know, during the Great Recession in 2000 when I was investing in these companies. And what I realized is that even you know, during the darkest times it passes and actually it is in those tough times, whether macroeconomic times or whatever you may be going through as a leader, that is when boldest opportunities are presented. And so during 2008, I was so incredibly fortunate to build this company that went from managing 400 million in assets to over 1.5 billion that invested in women and minority owned companies. And we invested money for city and state governments. And it was during the time when everything was declining in sort of conventional asset classes and it was an opportunity for investors to invest in underserved areas of the economy. And so that was really a wonderful career. And as luck would have it, I was getting my MBA at University of Chicago and I met one of my professors who was a co founder of Groupon, who recruited me into Groupon and effectively said, groupon is a data company and you’re a data person. I was getting my stats and econometrics degree out of University of Chicago and I grew my career for many, many years at Groupon and learnings there. I mean, it was a company that scaled so effectively globally and I was incredibly fortunate to lead a team across 14 countries from UK all the way to Japan and Australia and really learn the power of diverse teams that come from different cultures, with different perspectives, different ways to look at how Internet should be penetrating small businesses. And it was really a transformative experience. I learned at Groupon that I love to be a builder of businesses, not a maintenance manager. I also tried the founding gig. You know, zero to one is not my jam. I love to take businesses from 1 to 100 and I learned that at Groupon and then the wonderful, wonderful opportunity post Groupon was an opportunity that Max Lefchin gave me at a firm. I was the first chief commercial officer for a firm and I had an opportunity to scale a firm. Through partnerships with Shopify, with Amazon, with Walmart. We grew a firm from 100 million in revenue to over 1.3 billion in revenue. And one of the most important lessons at Affirm, we all know when Covid hit, all of us weren’t sure how the world was going to be transformed by that. And Affirm was one of the rare companies that was bold during that time. And we went public when everybody else was trying to grasp at straws of what was going to happen. It’s a really, really special company. I learned the power of bringing the smartest people together. Max is an amazing culture builder as well.

Darren [00:08:36]:

Yeah.

Silvija [00:08:36]:

And yeah. And all of those really incredible rides at Groupon and at Affirm prepared me for Deputy, which I’m so fortunate to lead today.

Darren [00:08:47]:

Yeah. As you were thinking about your next role after Affirm, it sounds like it wasn’t necessarily to be CEO. But tell. Tell us a little bit about how that came about. How did the opportunity come about for you?

Silvija [00:09:02]:

So, you know, I had mentioned for many, many years I was a number two. I’m a solid operator. I love to inspire people and lead them into battle passionately. I can be a good commander when the time needs to, but I love to do that in the background. You know, I didn’t quite. I had this vision since my early career days that CEO needs to be is made of one type. Somebody that’s comfortable with visibility, that’s a great communicator. I didn’t speak English until I was 17, so I always feel I could be a better communicator. So I had all of these visions of what CEO is, and I didn’t see myself. I certainly knew my power. I’m an amazing operator. I love to lead people, bring them together, inspire them to do the best work of their lives. But I felt I could do that in the number two position. And when I was leaving a firm, Max actually pulled me aside and he said, do not tell me that you’re gonna go and be COO again. Go be CEO.

Darren [00:10:09]:

Oh, wow. I did not know that.

Silvija [00:10:11]:

Yeah.

Darren [00:10:12]:

Okay. Cause you and I met when you were at a firm.

Silvija [00:10:14]:

That’s right.

Darren [00:10:15]:

Max has been a guest on this show, but I didn’t realize that was. Those were some of his parting comments to. They were what’s sage advice.

Silvija [00:10:23]:

It really was.

Darren [00:10:24]:

He obviously saw something in you that many now see in you.

Silvija [00:10:27]:

Yeah. And you know what? I feel that when I now look at the seat that I sit in, it is not that different than the seat that I sat in for the last 15 years. It is a privileged seat. And Deputy is absolutely the right company for me to lead because I believe in leading, both with the brain and with the heart. And in order to do my best work, I need to feel emotional connection to that work. And I always felt emotional connection to customers at Groupon, at a firm, and now at Deputy.

Darren [00:10:59]:

Yeah. So let’s talk a little bit about these two years. I do want to share something, because I can’t help myself, which is I do think there’s something really interesting about a person who’s been in this number two role moving into the CEO role. It doesn’t always work. And when I had a chance to see you in the role as CEO with your team, I wouldn’t say I had any doubts. Cause I have an extraordinary amount of respect for you. But I did have the question.

Silvija [00:11:25]:

Sure.

Darren [00:11:26]:

Who is Silvija gonna be in this new role because of that phenomenon. Right. It does take a certain transition and I was blown away. It seemed like you’re a real natural at this, at least with my limited experience with you and. And from what I hear from others. So I do want to spend some time talking about these two years. What has really surprised you and what has it been like? What have been the big lessons so far? And I imagine there’ll be many more, but so far.

Silvija [00:11:53]:

So Deputy was run by our co founder, who was our CEO for 15 years. A wonderful, wonderful co founder, an engineer, and I replaced him two years ago. We all know that founder is the mother of the company. And we don’t see often we see some success when professional CEOs come in. But listen, the deck is stacked against that new leader. It takes a lot to step into the shoes of the founder and to lead or attempt to lead with as much empathy for the customer, inspiration for the team, and technical competence that running a software company requires. And so what was super important to me as I was stepping into deputy CEO role was to ask myself, what kind of leader do I want to be? And what kind of leader does this company need? What kind of work does this company need? And is that the work? Are those the superpowers that I have? And one perspective that I had. I believed as I stepped into this role, Darren, that I was the founder too. I was the founder of Deputy 2.0.

Darren [00:13:11]:

Yeah.

Silvija [00:13:12]:

And Deputy 2.0 is a company that is global, that will have many products across the world, and a company that’s organizationally more stable and more ambitious. And so I don’t see my job as, oh, I’m going to be a professional CEO. I see it as I’ve been given this sacred opportunity to found the next chapter of this wonderful, wonderful business.

Darren [00:13:40]:

Yeah, what a great perspective. And when you say that, what do you mean? Because Paul Graham just penned an essay, founder Mode. It’s certainly in the zeitgeist right now that a founder brings a certain amount of energy that only a founder can bring. That’s at least one of the contentions. And what I hear you saying is you don’t have to be the founder. You have to have a founder mindset. Maybe. But what is it about that kind of founder energy that you believe you’re bringing into Deputy?

Silvija [00:14:10]:

So this is a really, really great question, Darren. And we all have been reading about founder Mode, of course, and I actually do disagree with the premise that it’s just the founder that can be in founder mode.

Darren [00:14:22]:

So do I so do I.

Silvija [00:14:23]:

And so calling myself founder of Deputy 2.0. Here’s what it means to me.

Darren [00:14:28]:

Yeah.

Silvija [00:14:29]:

First and most importantly, do I feel the empathy for our end customer? I am so incredibly fortunate that I grew up in a community and have been in the shoes of the community that Deputy supports today. I grew up in Croatia in a small community where every single one of my family members were shift workers working in factories, being truck drivers, being farm workers. And so I feel that that empathy, understanding the pains of our customers has to be present. You need to feel that. The second thing that I think I bring to Deputy is, you know, I talked about certain times require certain modes of operating. My team jokes that I can, when needed, not just micromanage, but nano, manage when there’s big risk and massive amount of detail is critical. Of course a leader needs to be able to dig in. And so I absolutely, absolutely bring that as well. And last but not least, you gotta be able to inspire. It’s not just the founder that can do that. And so, yeah, that’s how I approach my job every single day. I am building the next stage of Deputy.

Darren [00:15:55]:

Yeah, you can see it energetically, maybe even just if you’re listening to this just in your voice. There’s a certain energy that comes from that kind of mindset. So that’s sort of one thing. Founder of Deputy 2.0 I love that framing what other things have either surprised you or have been moments of learning for you in these couple years?

Silvija [00:16:16]:

Sure. You know, I think at the end of the day, every single one of us CEOs, we’re in the people business. I think somebody said great companies are not built by great strategies, they’re built by great teams. And one thing that I lived by my entire career is that you have to work as one team. Darren, you may know this about me already, but I grew up on a farm, so I have a lot of animal metaphors. So I’ll give you one. Now, there’s this thing that I live by which is buffalo style leadership. So what is it? During the storms, buffaloes are the only animals that together in a herd, run towards the storm. All of the other animals during the storm run away from the storm and then get separated and go through a lot of hardship through that. Buffaloes are the only ones that run together towards the storm and get through it faster. And so that buffalo style aligned behind the same arrow kind of leadership and teamwork is super, super important to me. So I spend a lot of time thinking about, are we aligned? Is there One thread running through Deputy. Is everybody clear? Clarity is a big thing for me. Again, having English being a second language to me, it’s really important that I’m clear. And so is everybody clear on the goals and key priorities? And are we all aligned and moving in the same direction? That’s super important. And the last thing that I really, really realized is key for being in this role is adaptability. I think we all, you know, we all are students, right? We all love to learn about and read about leadership. And I think oftentimes things that I’ve read, even founder mode to some extent simplifies things. You know, some people talk about direct and command leadership, some people talk about you gotta be a servant leader. Right. Or you gotta be founder mode. And I just, I don’t believe in any of that. What I believe in is that if you wanna be a transformative leader, you have to be able to transform yourself. What this means you have to be adaptable as a leader, of course, with your values as the main anchor. And so what I’ve learned is this power of adaptability and learning different modes of operating depending on what situation requires. Sometimes it requires that inspiration from a leader, sometimes it requires ruthless execution, sometimes it requires nanomanagement. And so I think that for me, sitting in the seat is the power of adaptability of you as a leader and to teach your team to be adaptable too.

Darren [00:19:16]:

Yeah. What are the big areas of growth that you’ve experienced as a leader, whether it’s in these last two years or along the career? So I get the point around adaptability and not being locked into any one mode. But I’m also curious to hear from you because I know that self awareness is really important to you a moment or two where you’ve discovered something about who you are and you’ve transformed or grown in a meaningful way.

Silvija [00:19:45]:

I had a really, really transformative, I would say exponential growth as a leader. When I was at Groupon for many, many years. I was the executor. I was known across the company. Just give it to Silvija, she will get stuff done. And I got this wonderful executive coach, Jodi Michael, who taught me so much about leadership, but really taught me about myself. And she did this360, which was the first time a mirror was presented to me. Darren and I hope we all get to experience that in our lives. Not just that a mirror is presented, but that we look at it, that we sit with it, we ponder on it. And the mirror effectively said something like, I’m going to overshare. But I hope it’s helpful. Silvija is a business robot. I don’t know that Silvija cares. My team was saying this, that Silvija necessarily cares about me. She cares a lot about results. And it couldn’t have been further from what I was feeling internally. I felt I really cared deeply, and yet I wasn’t. The way that I was showing it perhaps was not received, and Jody helped me. It happened over time, by the way. This change, this transformation of leadership doesn’t happen overnight. It happened over time. Because at first I was very resistant to Adaren. I said, well, I do care and I show in my own way. And they should just know. Right. That’s the natural. You defend you, you know, you try to reason. Yeah, but over time. And also, I believe in authenticity. I really believe in that. I believe that you, you know, none of us are going to be successful if we try to be Elon Musk or Sheryl Sandberg or whoever. You got to be yourself. You got to be yourself. You got to show up as none of us are perfect. I believe I’m a work in progress. We all are constantly. And so it took some time for me to authentically become a more transformed leader that showed great care along with this deep desire for performance and for speed. And it’s a balance. And as you’ve taught me as well, it’s an integration. It’s not a balance. It’s an integration of high care and high performance.

Darren [00:22:08]:

Yeah, I know that’s been central to your leadership now for some time, particularly as CEO, a deputy, and I’d love to hear a little bit more about this polarity of performance and care. High standards, high care, and maybe even about polarities in general, because I know this has been a critical capacity for you as a leader, which is the notion of how to manage and integrate paradox.

Silvija [00:22:34]:

That’s right.

Darren [00:22:34]:

So can you talk a little bit about the role that that kind of wisdom or capacity has played in your own leadership?

Silvija [00:22:40]:

Of course. So it’s really unfortunate that so much of our world society is looked at through the lens of black or white. If you win, that means that I somehow am losing. And over time, I have learned that true joy and true satisfaction actually comes from finding a win win. So perhaps I’m going to first talk about how I see that in business outcomes, and then I’m going to talk about culture. So when I look at deputy and what we are building, we’re building software for businesses to help them manage their hourly workforce better. And so historically, of course, we look at this through the Lens of, well, if you give more to workers, that means that somehow businesses are going to hurt, right? Or if businesses are doing good or they must be squeezing the workers. And I truly believe that through the power of our platform and through the power of data, we can show businesses and we can show workers that actually there is a win win. There’s a sweet spot where win win can happen. So how do we enable that? Well, if you are a business and you want to thrive, you want your customers to be happy, how can you do that if your employees are not happy? Because if you are a restaurant, you’re a hospitality company, you are an elderly care company, you are a factory, your workers deliver your product, it is their hands that deliver the product into your customers hands. So if your workers are more engaged, more productive, they’re thriving, your business is going to thrive. And Deputy shows that. With our data, we show that Deputy, businesses that use our software for engagement, for communication, for labor compliance, for labor productivity, has higher retention, effectively completely eliminates no shows and has better productivity. And so we are building a business where we believe we can build win win outcomes. And so then how does that translate inside? Deputy, you know, and I say this to my deputies all the time, our vision is to create thriving workplaces in every community. Well, how can we create thriving workplaces if we are not one internally? And so what thriving workplace for me means is exactly what you said, Darren. It’s a workplace where we believe that being direct is being kind. We don’t believe in being nice, we believe in being direct because we believe by being direct we’re being kind. You know, another animal metaphor. I say to deputies, I don’t believe that we should bring elephants into the room. I believe that we should bring elephants into the room and put them on the table. So our meetings that we have are almost always cross functional meetings where the first thing we talk about are where are the risks, where are the obstacles? Let’s start with the elephants. Put them on the table first. And so that is incredibly, incredibly important to create high accountability, high standards, but also care where we care for each other. And, and so I hope this gives you a little bit of, a little bit of a flavor.

Darren [00:26:14]:

Yeah. What’s the, what’s been the hardest part of that? Because I think every CEO I speak to wants to build a high performing culture. Many of them are trying to integrate this natural, healthy tension of performance and care. It’s not easy. Where are you on the continuum of that journey and what’s been the hardest part of it?

Silvija [00:26:33]:

We are definitely on that journey. Still, it’s not an easy. If it would be easy, we all would be integrating high performance in high career. We as humans have a natural tendency, again, to simplify things. And so what I often tell deputies, artificial harmony is just as bad as a toxic culture. And artificial harmony is not going to help us build a magnificent and a lasting business. So if I look at deputy, where we skew a little bit, we skewed on that, like artificial. Just a slightly, slightly sort of tidbit towards. Do I really want to say this thing in the meeting? Do I? Ooh, do I? You know, will this feel like I’m throwing somebody under the bus? And it starts with me? I need to show how we can do that. And my leadership team, how can we model in our meetings where we’re not attacking each other, we’re attacking the problem. And by the way, if we solve the problem, we will help our customers manage their workforce better. We will help with retention of workforce. We will help where workers that tend to be underserved and invisible feel recognized and again, feel dignity at work. So connecting. I think the real superpower is connecting that culture of high performance and high care to the. Why? Why are we doing this? Why is this meeting so hard? And sometimes I pause. Darren, you taught me this. The power of going at 0.5 speed. As a person, I tend to be not at one speed, 1.5 speed. Talk fast, go fast, get stuff done fast. And you taught me, take a minute, sometimes pause. What’s the 0.5 speed? Because this conversation deserves 0.5 speed. And in those toughest moments that we have in the company, sometimes when we’re disagreeing, I acknowledge the disagreement. Here’s why we’re disagreeing. This is important. This matters. It matters to our customers. We gotta get it right. Let’s battle. Let’s battle it out.

Darren [00:28:53]:

Yeah.

Silvija [00:28:53]:

But it’s a. I think that is one of the greatest challenges that I have as CEO. How do I move us? Where we integrate and where we flow, where we have a flow of high performance and high care and deep, deep trust.

Darren [00:29:10]:

It’s interesting. You know, we’re talking about a podcast metaphor, and we’re recording a podcast. I couldn’t help but imagine what speed listeners are hearing us at right now. But I think it’s so important. Even in your description of that, I noticed a shift in pace, and it is something that I think is a really important capacity for CEOs is to understand that not only do we. Are we adapting to different styles of Leadership, but kind of our pace of leadership, we’re moving really fast in certain circumstances and then we’re taking the time to slow down. Even the way we communicate needs to slow down. So thanks for bringing that to life.

Silvija [00:29:48]:

You bet.

Darren [00:29:49]:

Yeah. You’re also on a couple boards, the board of Lemonade, a really cool company, Kiva, another extraordinary company. And I’d love to explore for a moment your experiences on those two boards, what they’ve taught you about being a board member and what that’s helped you, if it has, in understanding your role as CEO and how you manage and lead your board.

Silvija [00:30:14]:

Absolutely. Both Lemonade and Kiva are these wonderful, wonderful companies. Lemonade is trying to transform through machine learning and AI, the insurance industry. And Kiva, a wonderful, wonderful not for profit that is one of the largest micro lending organizations on the planet. And you know, the kind of energy that I bring to those boards, and then the opposite, the kind of energy that I bring to my board, a deputy, is that I consider myself part of the team. I don’t believe in, quote unquote, managing the board. The board is on my team. I’m accountable for bringing them along, for being transparent and direct, also for inspiring them. I believe in that. And so I truly consider my board as my team, a deputy. One thing that I have learned at Kiva that’s been so powerful, Darren, is this power of deep, deep mission driven leadership. Of course, Kiva invented the microlending space. When you look at the impact that Kiva has given, has created over $2 billion has been lent to entrepreneurs across Africa and Latin America and Asia. Those are generally sole proprietors, women refugees that start their businesses from on average $150 that somebody lent them from America. By the way, the repayment on those loans, 98%. No bank in the world or a lender has those repayment rates. It’s a powerful, powerful, mission driven organization that has created such amazing work. And at Kiva, I think what was ignited and really clarified for me through the leadership of our wonderful chairwoman, Julianna, one of the most brilliant technologists alive today, is that you can use tech for good. And I have adopted that as my own hashtag whenever I talk about deputy technology. We want to build an enormous company and we also want to build a company that creates enormous societal good. So Kiva really taught me that. And at Lemonade, I just think it’s such a special company. They have used machine learning and AI when it wasn’t cool. And they truly have been the picture of resilience. And grit. What a tremendous, tremendous business and what a Runway they have ahead of themselves to build a transformative, modern insurance company that will be used by generations.

Darren [00:33:05]:

Yeah. There is a bit of a debate on whether CEOs should sit on boards and you’re sitting on two of them. So I imagine I know where you sit on this question, but what would you say to CEOs that maybe are first time CEOs considering taking a board seat? Is it a good idea? And if so, why don’t do it.

Silvija [00:33:23]:

In your first year of becoming a CEO? Maybe that little, especially a CEO that needs to travel around the world. Maybe, maybe that. You know, I think it’s another source of tremendous learning for me. And I said earlier, I believe that we are constant work in progress. I hope that I contribute to those boards, but they contribute more to me because I learn, I learn about different industries, different business models, ways that they’re solving problems. And so I think it’s another wonderful source of learning for CEOs. So I’m a huge proponent.

Darren [00:33:59]:

Yeah. So we talked a little bit about the integration of opposites, head and heart, high care, high standards. You’re also more than just a CEO, you’re a mother. You lead a family, you have a big personal life. And those of course are completely intertwined right in today’s day and age. So I’d love for you to talk about a little bit, bring a little bit of your personal life to light here and the integration of all aspects of your life. How do you do it in a way that allows you to do it all and feel full and abundant in doing so?

Silvija [00:34:33]:

Yes. Thank you so much, Darren for bringing the personal into this. I love this. I have been married for soon to be 22 years to my high school sweetheart. We practically grew up together, met in Croatia as high schoolers and then had long distance relationship when I was in college in US and, and then he followed me in America and we built our life in Chicago, our adopted hometown. We’re Midwesterners at heart with four suitcases and $400. And he truly my team knows that a deputy, I would call him my anchor. He is someone that has been both my greatest champion as well as truth teller. I don’t think I’ve ever made a decision, big decision without hearing his advice and getting his wisdom. So he’s been, he’s such a tremendous, tremendous partner, truly, in every sense of the way, you know, in every sense of the word. I know many CEOs do this differently. Karuno is a stay at home parent as well. He’s a stay at home dad and he knows about my executives, he knows about the dynamics. We talk about it. I choose to bring him along on that journey intentionally. It’s not like I have a work life and then I have a home life. There is just life. And that’s super important to him. And I think that kind of integration where he knows what’s happening at work and how the challenges are and can provide that advice, I think that truly is a secret to our partnership. And we have two wonderful kids who are 11 and 9 and they also, they’re a part of the deputy journey themselves. And you know, they, they proudly talk about it. And a funny story, my son, this talks about. I spent a lot of time, Darren, talking about Gen Z and thinking about Gen Z and Gen Alpha and how do those new generations work and live? And my son and my daughter are in Gen Alpha. Okay. If you’re a CEO and you’re not thinking about that generation, you’re missing out. Talk to your kids. Talk to your youngest employees in your business. Their perspective on work and life is just oftentimes foreign, but so incredible. So I’ll give you one example. This is. I had nothing to do with this, but my kids write a Santa letter every year. Right. They sort of believe in it, but I mean, they’re 9 and 11. And this year I woke up one morning, you know, I knew they were working on their Santa letters. Underneath the Christmas tree was a printed out paper with a QR code. Yeah, the QR code was a Santa letter that my son wrote, created a QR code, then created a PowerPoint presentation.

Darren [00:37:45]:

Amazing.

Silvija [00:37:47]:

So I, I think that, you know, we impact our kids, but our kids are impacting us too.

Darren [00:37:52]:

Yeah. Yeah.

Silvija [00:37:53]:

So talk to your kids about your work. Listen to their, you know, ideas. And again, QR code as a Santa’s list blew my mind. Haven’t seen, haven’t anticipated that before.

Darren [00:38:03]:

Amazing. I often say parenting is the ultimate kind of leadership school. Has there been anything about your parenting that you would say parallels your leadership journey as a.

Silvija [00:38:16]:

Absolutely.

Darren [00:38:16]:

Yeah.

Silvija [00:38:17]:

Darren. I would say, you know, Karuna and I didn’t have children for many years. We were together for 11 years before we had kids. So we were well into our, you know, adulthood. And one skill that we really try intentionally to build inside our kids is the skill of adaptability. That’s it. There is one word to describe how we parent. We try to teach our kids that change happens, stuff happens. What are you going to do about it? What do you control? How are you going to show up and how are you? We teach them. Don’t react. Take a minute, take a second act. It’s something that I try to embody as a leader, and sometimes I fail, sometimes I succeed. We all slip sometimes into our tendencies, right? Let’s not pretend that we’re perfect. No, we’re not. CEOs are human too. We slip. And I hope that we then are lucky to have partners and teammates who tell us, hey, maybe this was not the best way to show up in this meeting. And I look for people like that. Both, of course, Kruno is that person at home, but also my teammates. I want them to tell me, Silvija, this was a rough one.

Darren [00:39:31]:

I’ve seen that happen. You have a few of those.

Silvija [00:39:33]:

Exactly. You’ve seen my team in motion. It makes me a better leader for people to tell that truth and have the courage to tell you that truth. So I think, again, one word around parenting is how can you make your kids adaptable? And we practice that. We took kids out of school there, and a couple of years ago, they go to school in Marin. We took them out of school, moved them to Croatia. They went to a public school in Dubrovnik, Croatia, for six months. And there was a moment where both Kruna and I were thinking, are we going to screw them up? This is very different culture, different language, different way of teaching and learning. In first grade, my daughter had four hours of homework a night. Talk about intensity in first grade. But we came from that experience so enriched. And I think that was a big step in my kids learning adaptability, how to adapt to different cultures, languages. So, yeah, I think there’s a lot of connectivity between parenting and being a leader.

Darren [00:40:42]:

So as we bring this towards a conclusion, I’m struck that we’re having this conversation towards the end of the year and can’t help but ask whether you’ve had time to reflect on 2025 and 2025. I’m sure you’ve. You’re in planning, you’ve been focused on the business for sure. But what does 2025 look like for you? What is if you said. If you looked forward and said the end of the year, December 31, 2025, almost a year, a little bit more than a year from now, what is the area of growth that you’re most committed to as a leader?

Silvija [00:41:20]:

I’m doing a lot of thinking on that right now.

Darren [00:41:23]:

Yeah.

Silvija [00:41:23]:

You know, there is this little word, AI, that is changing everything about our world, about our life, about our businesses. And what I’m thinking about. I’ll answer this question first as an operator, as a business leader, and how I think about business, and then I’ll talk about culture. What I’m spending a lot of time on is how can we enable innovation? We all see too much. I think about, oh, use AI in marketing or use AI for getting leads, or use AI for customer support. I’m not thinking about it in that way. I’m actually thinking about how do we, by the end of next year, have the most amazing platform for any single deputy to innovate with AI? Because I believe, just like Internet, AI is everywhere. So I hope that by end of next year, AI is everywhere. It’s a part of our DNA because of the platform and the foundation on which then all of the 452deputies can innovate as it relates to culture and what I hope the next year brings. Every year, I tell deputies one sentence that defines the next year. The year of 2024 was the year of GSD, or as in deputy, we love to say, get shift done.

Darren [00:42:51]:

That’s good, right?

Silvija [00:42:52]:

We help shift workers get shift done. So 2025 is the year of Deputy 2.0. Okay. Where we transform our business truly to be global, to become a platform business, and to truly, truly integrate that high care and high performance into everything that we do.

Darren [00:43:13]:

Yeah. Wonderful. Anything that we haven’t covered that you’d want to add or even revisit and summarize that you want to put some emphasis on before we we wrap things up?

Silvija [00:43:25]:

I have. I’ve been thinking a lot about founders that are leading transformative businesses, and especially being a leader that came in and took a company and replaced a founder, I think a lot about that journey and what that must have been like for my own founder. And so my advice for those founders that are leading companies with so much passion and grit and care, if you want to build a transformative business, you have to be willing to transform yourself.

Darren [00:44:07]:

And by that, what do you mean?

Silvija [00:44:09]:

What I mean by that is you have to be willing to change. Be honest with yourself. Acknowledge where you’re exceptional, where your superpowers are and where they’re not. Acknowledge where your passion is. I know many founders that love that, zero to one. But once you start scaling, a whole set of chaos and complications happen. There’s a different set of muscles and skills that are required in order to get the company into that next phase. You have to learn and strengthen those muscles. You can be pretending that you’re still 0 to 1 if the company is scaling.

Darren [00:44:51]:

Yeah.

Silvija [00:44:52]:

And so that’s what it means truly, truly embracing different modes of operating and leading and because the way that the company grew and the way that the modes that were required from 0 to 1 in company’s life cycle is very different. What will require to get it from 1 to 100?

Darren [00:45:15]:

Yeah. I notice a tension and maybe we can just spend a minute or two more on this before we wrap that. There’s something really powerful about a founder knowing who they are, being unapologetic about who they are and leading and building a company from that place and at the same time having the self awareness and capacity to expand and take different ways of being on. So again, it’s not an either or.

Silvija [00:45:42]:

That’s right.

Darren [00:45:42]:

And I think oftentimes we’re stuck in a black and white thinking about either I’m unapologetically me, I get to do whatever I want, whatever I want, or I lose myself.

Silvija [00:45:52]:

Exactly.

Darren [00:45:52]:

And I’m trying to be something that I’m not. And maybe what I’m hearing you point to is there’s a possibility for integration here.

Silvija [00:46:00]:

That’s right.

Darren [00:46:01]:

You do not want to lose the essence of who your anchors, but there’s an openness to sort of expand and grow beyond that.

Silvija [00:46:09]:

That’s exactly right. I think that’s a wonderful way to conclude integration of your authenticity.

Darren [00:46:15]:

Yeah.

Silvija [00:46:16]:

With desire to evolve your moves so that your company can thrive.

Darren [00:46:21]:

Great. And might even sound like the 2025 mantra for. For Silvija.

Silvija [00:46:26]:

Absolutely.

Darren [00:46:26]:

Which you’re already doing for all of us. For all of us. Yeah. I’m taking a note on that one as well. Well, this has been an amazing conversation. I’ve loved being in it. So appreciate your time and your willingness to share your incredible journey and background with all of us. Thank you very much, Silvija.

Silvija [00:46:42]:

Thank you so much for having me, Darren.

Darren [00:46:44]:

You’re very welcome. There were so many valuable themes in this conversation. In particular, I found Silvija’s commitment to lead as the founder of Deputy 2.0 to be really inspiring. And I loved her advice that you can’t expect to transform a company if you’re not willing to transform yourself. I look forward to being with you on the next episode of One of one. Until then, I hope you live and lead with courage, wisdom, and above all, with love.

One of One is produced by Erica Gerard and Podkit Productions. Music by John LaSala.

In this episode of One of One, Darren sits down with the extraordinary Sukhinder Singh Cassidy to explore her remarkable career journey. From founding two companies to serving as CEO of StubHub, and now leading Xero, Sukhinder offers a wealth of insights into what it takes to excel in both “founder mode” and “CEO mode.” Together, they dive into the nuanced debate between these two leadership mindsets and discuss how to build and sustain a high-performing leadership team. Whether you’re an entrepreneur, executive, or aspiring leader, this conversation is packed with actionable wisdom and fresh perspectives.

Timestamped Overview

00:00 “Xero: Global Cloud Accounting Software”

06:06 Building & Growth Enthusiast

07:08 Journey to Entrepreneurship in 1997

13:28 CEO’s Leverage and Impact Hypothesis

15:21 Driving Profit with Entrepreneurial Innovation

17:32 “Openness and Realism in Leadership”

22:32 “Founder Mode: Integrating Experience”

24:50 Embrace Timing and Teamwork

27:41 Diverse Team Dynamics

30:52 Leadership Dynamics in High-Performing Teams

34:58 Daytime Block Optimizer Strategy

39:59 “Effective Meeting Strategies”

41:37 “Managing Up with Impactful Structure”

44:13 Developing Leadership for Xero’s Future

47:48 Leadership Insights & Inspiration

Full Transcript

Darren [00:00:03]:

Hi everyone. Welcome back to another episode of One of one. I’m your host, Darren Gold, CEO of the Trium Group. My guest today is Sukhinder Singh Cassidy. In this conversation we cover Sukhinder’s incredible career journey which has included being a two time founder, a senior executive at Google and CEO roles at StubHub and now the accounting software company Zero. Given this background, Sukhinder shares an important and unique perspective on the debate between founder Mode and CEO Mode. She also offers a really helpful view on what it takes to build a truly high performing leadership team. I really enjoyed this episode and I hope and trust you will too. So kinder, welcome to the show. It’s so wonderful to have you here and I’m really grateful for you spending the time.

Sukhinder Singh Cassidy [00:00:55]:

Yeah. Good to see you again.

Darren [00:00:57]:

Yeah, great to see you. I have so many things that I’d love to cover and we’ve got limited time. We’ll try to get to as much of it as we can. I’m sure it’ll be a great conversation. I wanted to start with this great company that you’ve been leading for the now, I guess, past couple years, partly because I’ve been a consumer. My youngest started a small business when he was in high school and we were looking for a great accounting software to help him manage the financial part of the business. And we found Xero and we absolutely have loved the product experience. I mean it is a great product.

Sukhinder Singh Cassidy [00:01:32]:

So, you know, I, I didn’t even know you were a secret customer. Yay.

Darren [00:01:35]:

Yes. Yeah. And I think you were too when you came on.

Sukhinder Singh Cassidy [00:01:39]:

I was, yeah. I mean, so look, Xero, as you pointed out, is small business accounting software that is used globally. Actually, many people probably don’t know Xero because born and bred from the southern hemisphere, it was a New Zealand company that was started 17 years ago, been expanded to Australia, the UK, the US, Canada and South Africa, Singapore, what have you. So I would imagine we’re one of the most global accounting software companies in the world if you think about the markets we play in. And the biggest are the us, the UK and Australia of course, which is our heritage market. It’s cloud native, it connects to all the apps you love so you can use it with every app stack you have. Like in the US that’s particularly important given all the fintech stacks people use. But we also have embedded payroll and payments. So if you want to, you know, manage your cash flow, send an invoice, pay your employees, you can do that on the platform. As you pointed out. We pride ourselves on being easy to use. We’re very friendly for SMBs, but also for those who have accounts and bookkeepers. We have a big community of accounts and bookkeepers that connect with their clients on the platform so they can work together. Companies, multi channel, multi product, multi geo. And most importantly, it’s a group of really lovely people and a wonderful culture. So that’s, that’s zero.

Darren [00:02:50]:

So apart from the product and the lovely people, what was, what was the draw for you a couple years ago or plus when you were considering joining as CEO?

Sukhinder Singh Cassidy [00:03:00]:

Well, you know this because you interview CEOs and you coach CEOs. Finding the right CEO job is, you know, a combination of those things. Obviously you want a great business, a great product, a great culture, but it’s even more right. So when people were asking me what I was looking for in the CEO journey, I said, I know this is a tall list, so just bear with me. I want to be in a category that on the one hand, I have passion for and I love small businesses. They’re very close to consumer. You can get your, wrap your arms around them and think about their journey. Because it’s your journey. It’s my journey. I’ve been a founder. My parents are small business owners. But in. But I also want a category where I’m not just passionate about it, but it’s growing. So I think actually it makes a lot of difference in your career journey to pick a good hand. Right? So you want to be in a growing category. You want to feel like there are macro tailwinds in your favor. And in fact, accounting software is one of the last things to digitize for small businesses. It gives them back time and savings. And we’re still at a very low level of adoption globally and governments are pushing small businesses to digitize more. So I was looking for category of passion and category of growth. And then I’d say lastly, I mean, I’ve lived a lot of different business models, ads, B2B tech kids, you know, Yodeli. One of My first companies, StubHub, was E Commerce and Marketplaces, as you well know, as founder of another e commerce company. But B2B software, you know, strong business model. The customer has a recurring subscription. You know, if you do well by them, they will come back every year. You don’t have to refight to claim them though. You have to fight to keep them and keep doing a great job for them. So I was also looking for a strong business model. So you could, as you can tell, I was really judging the fundamentals of what I was joining because, you know, there are different types of companies you can join and they off offer all offer a different leadership journey. But of course I do believe in being a smart risk taker and maximizing your chances of success by picking.

Darren [00:04:47]:

Well, yeah, I believe you’ve written a book about this very subject.

Sukhinder Singh Cassidy [00:04:52]:

I did choose possibility Step up in zero. I did write a book on taking smart risks. But you know, many people think you just out execute your way out of any problem. And of course I like to think of myself as a good executor, but when people ask me for career advice, I’m like, you know, you also want to maximize your chances of success. Like you want to go to environments where that might be more conducive to that. Right. And so I think that, I think that’s also okay.

Darren [00:05:16]:

So let’s spend a little bit of time talking about your incredible career journey both because I think that will bring to life who you are and bring us to the present day. We’ll come back to zero in a moment. But also I’d be interested in you weaving into your own description of your career journey, some of the choices you’ve made and the meta subject of choices and the path that people take and the mistakes they make, the risk they should be taking and so forth. So take us back to maybe the beginning of your professional journey or whatever, however way you want to.

Sukhinder Singh Cassidy [00:05:47]:

Well, maybe it’s probably best to describe the macro and then the micro. You know, I think people often think that path to CEO seat is linear. It’s not. I mean, you know, you can read articles from the New York Times and on that like everybody takes a path that when you, when would describe it backwards, it sounds so like perfect. But when you’re going through it, it is a lot more nonlinear. Right. And mine certainly fits that bill. And I think that’s. And I think what you’re referencing is I’ve spent roughly half of my career at large companies and roughly half of my career starting companies. And so clearly the arc that I think that fits between those things is growth. I love to build and to grow. And I’m fascinated by almost any problem or opportunity to do that and any opportunity to learn. And so when you move between big and small companies, your own as a founder or as, you know, joining a startup team or a large company like a Google, where I’ve been, or an Amazon or I was at ebay, I guess, When I ran StubHub, part of the ebay leadership team, you have different learning journeys. Right. One is about scale and, you know, optimization and one is about build. And so I guess you could call me somebody who’s very attracted to building and problem solving and I can get passionate about anything, almost anything. So. So that’s the arc. And then I think to your point, I grew up in St. Athens, Ontario. I’m Canadian, proudly. I went to school in Ontario and I sort of, I would say had a. I. We don’t need to go into it, but I had a pretty difficult time for getting my first job. But I ultimately did. Took me about a year and a half and I got to my dream job, which was on Wall street, moved down to New York, was an investment banking analyst and then I moved to London. But as I referenced earlier, my parents were small business owners. And so even though I was in this like, you know, intense, kind of prestigious job for somebody out of school, which took me a long time to get, I really, really loved the idea of being an entrepreneur and I didn’t know how. So I spent a year at a media company, B Sky B, you know, a big media company owned by News in, in London. I was, I was there after investment banking and I basically quit my job and I moved to Silicon Valley and I was like, I don’t know how to be an entrepreneur. I think if I just put myself in quit great weather and this great environment, I’ll figure it out. And so I think that was a big move for me in hindsight because although I didn’t know it, I moved in 1997 and it turns out 1997 is a pretty good time to bet on the Internet. Like, who knew? So I, I mean, this is what I mean about choices. Like I had a thesis about entrepreneurship and I made a small choice that turned out to be a big choice, if that makes sense. Right? Yeah, I quit, I moved. I was 27 years old. I’m like, okay, I’m gonna find a job. I did. I was at a couple of startups, one of which got bought by Amazon and kind of started my career, I guess in earnest at Amazon. And a year later had an opportunity to found a company based on connections, you know, in the Valley. That kind of small mafia of startup founders found me and that company was Yodlee, which still exists today. Yodle is a fintech pioneer. It is sort of the backbone for data for many, many fintech apps you use today, including Xero. We use Yodlee proudly. So I became the business co founder there and spent five years building Yodlee. And its business model and then moved. Interestingly, I thought I’d moved to another small company, but Yodlee’s investors were the same as Google’s And I was lured over to Google and I we talk about thing. Google lured me over. I thought it was so big, it was a thousand people. Google lured me over because as I said, we shared common investors and they sort of came and found me and they basically said, well you know, we have this interesting problem set that we think you’ll like. It’s very startup like and, and Yahoo has like this thing called local and AOL has Maps and Google has nothing. And it took me about two weeks to realize that like the opportunity to build a local or Maps product was pretty darn big. The yellow pages industry was $23 billion. Nobody knows what that is now, but that was the backbone for local advertising. And two weeks later I filled up with a job offer at Google. I left my own startup, I went to Google and my first job was being the business partner to the product team on building local and Maps, so doing all of the deals necessary to get the data to build those products. And a year later Google asked me to move internally to another startup job which was building our international business. And I moved from running kind of a larger team of biz dev folks, you know, to moving to running what was then called Google’s RO business rest of world, which is everything outside of Europe and the US and for the next five years I built our business that became called Appla Asia Pacific, Latin America, from Brazil to China and built that to a couple billion dollars and a few thousand people. So this is what I mean about big and small, right? But I started small. I think you should have like did I know what Google was going to become? I knew it was a good company, but again, think about my journey like in backwards. It sounds so impressive and forward leaning. You’re like, oh, this sounds like an interesting challenge. And that was great. I think from there I was about 39 years old. I actually Googled up very big. I was very senior. But I also really thought if I I want to be a CEO and I think I want to be an entrepreneur again. So I left my big creepy job at Google. I went to a venture capital firm and looked at everything. I had a thesis that E commerce, this is circa 2008, 2009 was going to boom. I joined the board of a retailer called J Crew, which everyone knows. And a year later I joined E commerce startup where ultimately I fell out with the founder we can get into that if we want. But my love of e commerce remained. I’d studied the category and I started a company called Joyous, which, believe it or not, was a video commerce startup. You know, so people are. What do you mean? I mean, I mean, I mean shopping on the Internet through video. I know everybody thinks that’s like a, like, like easy to imagine today. In 2010, there was no TikTok, there was no Instagram video, There were haul videos on YouTube. And every time I pitched the idea, people thought I was pitching them on having infomercials on the Internet. So we built my own patented technology, we built studios, we built a merchandising team. And for six years I ran a business that was like online shopping. Videos grew to about million. Couldn’t get any VC to fund it. Circa 2015, 16. I mean this is like about timing, right? I ultimately sold it and went back to scale. I missed scale. So I ended up joining eBay. EBay offered me the opportunity to run StubHub. We met there, you and I. I became a CEO, I guess, of something larger. Not my own startup, but something larger. We successfully ran that business and sold it right before COVID which is crazy, really, you know, wonderful exit for StubHub. And then ran into Covid, managed that crazy experience, which we’re, I’m happy to talk about or not. Just made sure the company survived after we sold it for $4 billion. I was still on watch when its revenues went to zero. Got that jam, wrote a book and found zero. So that is the arc. As you can tell, it’s like a three time founder and a three time, I guess, larger company executive.

Darren [00:12:37]:

Yeah, it’s an incredible journey. I am curious and maybe we’ll get to what it must have been like to be leading Snubhub at a time, you know, in 2020, your live experiences marketplace. And there are no live experiences. So I’m just taken by the, the depth and breadth and richness of your experiences and also a really grocking the point, which is it’s, it’s not a, it’s not a linear path. It never is. And it does sound nice in hindsight.

Sukhinder Singh Cassidy [00:13:03]:

It sounds. And I’m like all the way through, you know, and like, of course, like good amount of failure in there. People think it’s all successful. I mean, building a video commerce startup, I don’t wake up and ask myself, man, if I went five more years, like, you know, like how the world has changed now, you know, there are rails on which you would and those are big platforms. So maybe my know, maybe my studio would have been the thing of most value. But all interesting. Think about.

Darren [00:13:28]:

Yeah, one of my key thesis and in this work, in this podcast is as I think I’ve shared with you, is that the CEO in particular is an extraordinarily high point of leverage in a, in a system. Of course, it’s more than just the CEO, and I recognize that. But I’m curious whether, number one, you agree with that statement and two, as you were entering the current company zero as CEO, what was your, what was your thesis? What was your hypothesis? How are you planning to use your, the freshness of your leadership and perspective to inflect the business or change the business and how has it turned out?

Sukhinder Singh Cassidy [00:14:02]:

Sure. I’ll take the second question, then we can come back to the question of CEO leverage. So my thesis 1000 first of all is it’s a great business. So, you know, it’s not me. It’s a great business and I’m lucky to enter it. So like, important, you know, important. It’s not all you. It never is. It’s you in combination with your environment and can you bring strengths that are uniquely needed. So maybe I’ll tell you what I and the board both, both thought I saw in common. Number one, you know, great business, still high growth, still needs though like entrepreneurial energy to keep innovating, growing. So they were attracted, I’d say, to that part of my DNA, right. Which on the one hand is product driven. I’ve been a founder. I do think that I have fintech experience. I understood the category, I understand e commerce, right. So like a conflection of things I understand on the product side and how to keep innovating and growing. Number two, a global CEO. And I thought, okay, I do know how to run all these markets. I have actually run the US market, which is one of our smaller markets, but growing. I do know how to run a business. In Australia I ran a whole portfolio of like 180 countries. And so the global thesis, like how do you bring in a global CEO and run this portfolio of global markets and global product? And that’s obviously a very CEO like thing to be able to do, but it also requires kind of a global mindset. And so I’ve, if you’ve given my background, that made sense to me. So I think we, I think they were looking for sort of entrepreneurial energy, product innovation, product thinking, the ability to handle the complexity of a global business and understand how to manage a global portfolio and I thought, yes, I can do this, I can do this. And then three, as I, you know, as we talked about, you know, I think we both saw and you know, pretty quickly at zero, when I got here, the opportunity for it to go from being a good business financially to a great business. And by great business, I mean I saw that it could get profitable. I saw that we were probably a little oversized on the cost base. The board saw, like, man, we have such a good hand. Like, why isn’t this business profitable yet? How do we get it there? And so just optimizing the business model for long term sustainable success. And to your point, coming back to the CEO. Yeah. I mean, people would ask me when I arrived like Sukhinder, is it growth or profits? And I’m like, both. Like a great business model, that means that we can sustainably deliver strong top line growth, be best in class software that is loved by users and yes, be profitable. And so the optimization of that business model, I think that was the triumvirate I saw and I think that’s it. I think that’s also probably why they, you know, gave me a chance at the job. That’s my gut.

Darren [00:16:30]:

Yeah, yeah. I’ve seen you in the role and what I’ve seen is a, I think a really powerful demand for excellence and performance from the organization. I imagine you haven’t changed since we first met and I’m just wondering, you know, how you brought that into this company, how it was met, where you might have been challenged by trying to raise the game a little bit. And you know, where, where have you been successful?

Sukhinder Singh Cassidy [00:16:55]:

Sure. Well, first of all, unfortunately I haven’t changed. Like our strengths are our shadows. So I’m as intense as ever. Um, and so yeah, I did, I did bring that intensity and maybe demanding nature, dare I say zero, but the thing I bought with it and the thing I’ve had to temper, the thing I bought with it, which I think you know, is, is how I’m, I’m like a really open person in some ways. I can’t help myself. Like, I just say it as I see it, I wish I could play a more savvy game. You know, even in this conversation, I’m sure I’m saying a dozen things I shouldn’t, but that is, I have also benefited from being in, I’d say open and authentic with my views. So I think if you’re going to bring that intensity, you have to bring self awareness and you also have to bring openness, you know, and you have to be open to others. And so I do try and meet the world openly and I try to meet Z openly. And I would say in things like cost cutting, I mean we did a major restructure six weeks after I arrived. Yeah, the only way we navigated that was through, I think their openness to me and my openness to them and my plain speaking with them, if that makes sense. Like guys, this is a great business. I’m going to bring you the data from the outside and I’m not going to lie to you. And, and I just felt from day one, my job is to bring optimism but also realism to the job. And so that’s how I’ve navigated it here and I think it’s held me in good stead. Now what have I had to temper? Look, this is a global business. Proudly it should be. You know, it was built from Australia, New Zealand. It’s one of the largest tech success stories. Like it doesn’t need somebody coming in like, you know, imprinting like I come from Silicon Valley, you know, we everything. Like it doesn’t need somebody’s trying to bring like I dare I say it like, you know, like in an American takeover. No, I, like this is a global business and I’m going to honor its roots and its global nature and even the variety of cultures we have, you know, we have, those of us come from Silicon Valley. Yeah. We have this in like intensity and drive and like why not yesterday? And I don’t understand. And I’m even worse because I’ve been a founder which you know, so think about my patience levels is low. And on the other hand we have a culture that is sustainably one of care of treating our people really well. And I want to maintain that. We have, we have different cultural standards around the world. Like we operate everywhere from Singapore to Australia. You know, in Australia they have. And it’s true, there’s, there’s right to disconnect from work legislation. Like that’s a different operating environment. Right?

Darren [00:19:21]:

Yeah.

Sukhinder Singh Cassidy [00:19:21]:

And so zero’s respect, I think, and need me to honor all of the cultures of the business and traverse between them and not just be like, well, my way is the highway. It’s my way or the highway. It’s very much like, okay, this is who I am, this is who you are. And by the way, this is how we’re going to traverse. So things like hybrid work we embrace. I don’t need to be, I mean my own belief set is if it, if I’m asking people to work like four time zones. Yeah. You think I’m also going to ask them, myself included. Okay. Work for four time zones and please come to work at 8 in the morning and go home at 5 and you know, and then get online again. Like, and by the way, spend two hours commuting. Okay. Spend no time with your family. And by the way, I already know you have to get on another call at 9pm because of our time. You have to give people some recognition that we work differently across these places. And, and there’s demand. So I think the thing I’ve had. I wouldn’t even say temper. The thing you have to modulate. You’re running a business with like 5,000 people with five different experiences and how they work and, and, and how they think. The thing I find comfort in, in that, by the way, is our values are very similar. So zero is an open play. And it’s far easier for me to be expected, accepted as a CEO with my intensity by just saying it. Like, you know, people recognize that, so I don’t try and hide it from it. I’m like, guys, this is like, I’m a workaholic.

Darren [00:20:34]:

Yeah, yeah, yeah.

Sukhinder Singh Cassidy [00:20:35]:

Last thing I do. And I think this is important at zero. Was important at. It was important at StubHub, but probably even, even more important at zero. Like, I have a Slack channel. I’m like, you want to ask me anything, ask me anything. You know, I don’t just post about, believe it or not, I post about what I’m doing with my family. Like, I mean, if everybody thinks I wake up every day and I don’t think about that, my own health or the health of my children, like, I’m trying to navigate it all too, just like everybody else. And so maybe I put myself out there even a little bit more at zero because I want people to understand. Like, I, I’m just like you. I’m navigating the same thing. You know, I’m not one person. You know, if you want to define me as being Silicon Valley, you know, type, that would be a mistake. I’m Canadian mother. I love to play tennis. I like, you know, I have 10 identities I’m trying to maintain, and so is everybody. I just like, put out, maybe put out a bit more at zero, given all the different diverse folks we have on the team.

Darren [00:21:25]:

I’m picking up a couple things and I just wanted to, to, to name them and get your reaction to them. One is your ability to handle complexity, and within that, particularly opposites. So how do I have a culture where we’re demanding a lot. So high standards and also high care. And I find the most effective leaders are ones particularly in global complex businesses that are able to handle paradox and, and integrate them. I also have always found in you and I think it’s a really laudable trait. I am who I am and while I’m open, I’m going to be unapologetic about in some ways the way I’m leading this company and what my expectations are with a lot of deep care in that. So I just wanted to synthesize what you just shared. Does that feel accurate to you?

Sukhinder Singh Cassidy [00:22:05]:

I think, I think it’s accurate. I think the more complex an environment, the more you need to help people get clarity and simplicity. And to your point, I do hold paradoxes. I mean it could be true. We’re going to talk, I’m sure in this call about founder versus CEO mode. Like yeah, and people think of that as a paradox. I’m like, no, it’s a paradigm and you have to figure out, you know, how to hold both types of energy if you want to and when to use which. So yes, I do believe that it’s not one or the other. I think that’s accurate.

Darren [00:22:32]:

Well, let’s talk about that because last year if you had to sort of name a theme, particularly in Silicon Valley, and I know we’re speaking to a larger audience and your company is certainly broader in reach, you know, the theme of founder mode was pretty prevalent, I think in some ways misunderstood and misapplied. And in some ways there was a lot of brilliance to the naming of something that a lot of people had been feeling. I know you have a unique perspective. I share it. Like you have such a unique background because you bring founder experience. You also bring professional CEO experience, if that’s even the right way of describing it. And I think you integrate those two things really, really well. But I’d love to hear your perspective just overall because it’s such a, I think, important topic.

Sukhinder Singh Cassidy [00:23:13]:

Yeah, it’s so funny. So long before there founder mode or CEO mode. I’ve always talked, you know, to my own teams and then teams externally. When I speak about operating range and I have this paradigm, it says like there’s this range that says like the founder CEO was like in the details building the product and you know, the founder’s here and the CEO was here. You know, they bring big scale and like a top down view and delegate ability management board. I’m like, and you guys have juxtaposed them here. And I said no, no, what you need to have is as, as somebody wants to lead a company sustainably is what I call a sign. Sign like sign like a sine wave. Right. You have to go up and down between founder energy, between details and vision, between delegating and doing. And so like I’ve always had this idea that you need to have operating right. You go up, down, side to side. And I think to me that’s like very analogous to founder versus CEO. Like no, it’s two types of modalities and at any given time a company needs it, right. So if you want to stay high, I don’t know if you’re driving a product driven tech stuff tech company of any size. I’m pretty sure Sundar Pichar still does product reviews. Right. You know, because he wants to understand like what is it we are shipping, you know, and have a go at the product level. And of course he’ll turn around and then go have to talk to the board about running a multi trillion dollar company. But it’s about putting on the right hat for the circumstance and being able to find that energy. Sometimes when you’re in a turnaround, you want to bring that vision and inspiration, right. Or the grit of a founder or the ownership mindset. Like you all want to live in silos. And as far as I can tell as a CEO, like it is one team and sometimes you want to bring the pound, the table energy and sometimes you want to be able to bring the like it’s going to be okay. Everything has season in a time. We don’t need to do it all today. So of course I, I think you have to find those modalities and many people will argue that they only have one skill or the other. I’m like, you have both within. You might have them in different proportions and then the importance is okay, well if you recognize a team means something else and you can’t bring enough of it, well that’s why you build a team, right? So you can still count on your team to bring more of that energy. Maybe you don’t see yourself as product visionary. Well, have your, you know, chief product officer, you know, speak more, take the mic in, in all hands, like whatever energy you need to bring. So I think you need to sense the time and need for both modalities, find and bring forth the discomfort part of yourself and also use your team.

Darren [00:25:31]:

Yeah, that’s a great point around team and I’d love to just explore it a little bit with you. And we all talk about everybody has a leadership team. We, I think CEOs manage and lead their teams differently. What do you do that might be distinctive or what philosophy or beliefs you hold about the importance of team that might be a little bit unique to you?

Sukhinder Singh Cassidy [00:25:50]:

Yes. Let me think about what’s distinctive to me. I look for. One thing I look for in leaders is people who have high self awareness and who have low entitlement and who have navigated failure and success. I look for diversity of experience. So as an example, when you interview with somebody like me and I say like what’s the hardest thing you’ve ever been to through or what’s a situation in which you didn’t succeed or you know, what do you think your development areas are? And people stumble on those questions and they give me like a non fail fail or a non weakness weakness. I’m like, I’m interested in people with a diversity of experiences who’ve seen a lot and navigated a lot because it gives me a lot of confidence that they have both resilience and creative problem solving. So I think that’s probably unique about me. I know there are people who look for perfect resumes and I know there are people who look for like larger and larger scale or they’ve done the job. Of course in some of these jobs you need the experience. Absolutely. We don’t have time to teach you how to be a CMO as an example, but the converse is I’m looking for people who’ve had a history of impact in a variety of circumstances. Like how have they been impactful, how have they navigated failure? What do they know about themselves that’s going to trip them up and how comfortable and willing are they to talk about it? Then I have a lot more comfort that they know how to build teams that they don’t come into a place like zero which will spit you out if you’re arrogant. And so will I by the way. So those maybe things are things that are distinctive.

Darren [00:27:24]:

Yeah. I’m curious to have a picture of what your leadership team feels like and looks like and sounds like in a meeting where you have a combination of people with high self awareness, low entitlement, a history of navigating and thriving in failure. What does it look like?

Sukhinder Singh Cassidy [00:27:41]:

How would you characterize your team in practice? It looks like a bunch of extroverts and a bunch of introverts and it looks like a bunch of people who are high task oriented and a bunch of people who are very high eq. I will say if you looked at my team, it’s very diverse from introvert, extrovert, so that people who speak up a lot and people who speak up less, which is maybe obvious, but it’s also very diverse in terms of like some people are very high on the task orientation capabilities and others are very high relationally. Like it’s really interesting when you look around the team. So I think in some ways it maybe reflects the things I value, but they’re not, it’s not like every single person has all of it. Does that make sense? That’s okay. You could like, I need people who are more, I would say really high EQ quotient around me because I might care deeply but I might miss a lot of signals because I’m going so fast. Right. So it’s, it’s what you’d expect, Aaron. You never get it all in one person. Right. But you need of course, the raw capacity to do the job. I’d say most teams I build are not political. They are at their nature. I would say if there’s one thing that people who I hire always say to me, it’s like, you know what I really hate political environments. I seem to end up with teams that also like me, a political environment. So I would say I don’t, I count myself lucky. I’ve never had a team that were cat fighters, you know, whatever, half fighting, dog fighting. Internally my teams never really look like that and I count myself blessed for that. But I think there was something about the way we relate to each other that’s pretty open and authentic. But people have a wide variety of styles and they index bike on EQ or IQ or task orientation or relation orientation pretty dramatically actually.

Darren [00:29:19]:

What would you say is the hallmark of a truly high performing team? I’ll offer mine just as a way of giving you grounding. Mine is the ability for people to be really, really direct and skillful in their communication where the percentage of things that are held back is really low. And there’s obviously a lot of things that contribute to the kind of trust and relationship and skill that’s that, that, that enables you to do that. I’m, I’m wondering would that be on your list or what, what’s at the top of your list?

Sukhinder Singh Cassidy [00:29:49]:

You know that’s on my list, but I’m going to offer one that maybe is more tactical, but it is the challenge I have as a CEO. I would say in high performing teams people step outside their box. Okay, so here’s what happens when you’re a CEO. You have really high performing individuals and they have all high trust and care for each other. Okay, so presume that happens. You know where all the messiness in execution is, it’s not within a function. It’s in the distinct projects that cross functions. And you know what every one of your leaders has, they’re pretty, pretty darn busy in their function. So quite frankly there is a unique and I’d say in the highest performing teams you have at least one or two people who will take on the whole and facilitate it. And that is really. And I don’t think you find it a lot. What you find is most teams even appointing the CEO are highly functional teams. Right. And in Silicon Valley even more so because we don’t really arrange by like general management. Like there are some companies in the world where a GM has everything okay. But in most Silicon Valley companies it’s a matrix. So what happens is in the highest, in high performing teams you have high trust and you have directness. That still doesn’t always solve the problem. What I’m needing is one person’s like you know what I know I lead product but I am going to champion or facilitate the whole souk ender. I don’t need you to do that. Like I will drive it through including with my peers. Now that yeah, yeah to me is the highest performing team. If you had multiple people who do that I would say most teams, mine included still fall back to the CEO is the glue.

Darren [00:31:25]:

Yeah, yeah.

Sukhinder Singh Cassidy [00:31:26]:

When they’re in the room with me we can all get on the same page and create a team. But who do I look to say like okay, like if you’re gonna take a, like almost every single project that has complexity crosses functions. And so you know, I think that that is actually the highest performing team. One in which people step out of their functional excellence in telling you their opinion to taking ownership beyond the own self complex things.

Darren [00:31:52]:

It’s a great, a great ad. Totally agree. We talk a lot about, you know, the senior leadership is my first team.

Sukhinder Singh Cassidy [00:31:59]:

Yeah.

Darren [00:31:59]:

The reality is mostly it’s the functional team is my first team and I not nod when yeah well you know.

Sukhinder Singh Cassidy [00:32:05]:

As I always say to you and I say to others, even though I am theoretically a point of leverage and maybe a high point of leverage, I am the only person without my own functional team. So I am the cross functional leader at zero. But I think as you know coming back to the original point, I think the highest performing teams have, I think know that excellence and success is not just about the success of their function, it’s about the success of the whole and they’re willing to risk themselves to Go outside of that. Right. And lead more. Yeah.

Darren [00:32:34]:

It’s almost like having a CEO mindset. You know, how do you. How do you cultivate a CEO mindset in the C level executives, both as a part of their development, because some of them have aspirations, but regardless, to be a great, functional leader and a member of a senior leadership team. You know, building that makes a ton of sense. So I think it’s an awesome point and a great ad. I’m going to steal from it.

Sukhinder Singh Cassidy [00:32:54]:

Oh, good. Yeah, yeah, you should. I mean, and don’t get wrong, Everybody wants to give you an opinion. So it’s not like people don’t come into the room with opinions on how the whole should go. I’m just like, when we leave this room, who outside of me is willing to hold their peers accountable as a me? And that lead means, like, you don’t own it all. You own a good corpus of it, but you have to lead others and lead your peers. And to your point, that is a CEO mindset.

Darren [00:33:18]:

Yeah. There’s a psychological underpinning to that because I think that block oftentimes is, well, it’s my peer. We’re equals, and who am I? And I think what the. What most businesses are calling people forward to do is to transcend that and then skillfully lead and lead your peers and sometimes even lead you. So.

Sukhinder Singh Cassidy [00:33:36]:

Yeah. Yeah. And by the way, I always say, like, every team needs a coach. Right. So I think this is the fallacy. The fallacy is you put a bunch of smart people in the room and brilliance comes out. I’m like, you know this because you are a coach. I mean, the job of the CEO is to get that out of people. Right. In a boardroom without a good chair, that’s. That’s a great experience, you know, no matter how brilliant each person is individually. So to your point, I think this idea that it’s. It’s okay to be a coach of others and to say, hey, I’ll facilitate, I’ll take the lead. You know, I’ll be the person to call everybody else together, you know, to help force a decision to check in on execution. I think that is. I think that is actually quite a rare skill.

Darren [00:34:17]:

Yeah. I want to go back to a comment you made about you have a Slack channel and, you know, you people can post and ask questions. And you’re also very revealing about your. The fullness of who you are, because you’re much more than just the CEO of a zero, even though that’s a huge part of your life. And I’M really curious. You’re running a very complex high growth international business and you have these other identities and other roles and other interests in your life. What is the secret to making that work for you? And I’d love maybe like the day in the life or rituals or some window into that part of how you manage your energy and manage everything you’ve got on your plate.

Sukhinder Singh Cassidy [00:34:58]:

Yeah, I think there’s probably a few constructs I use. First of all, like I’m a, I’m a, like I’m a block of day optimizer. So you know, some people think like you have to always be on or whatever. And I think now, I mean like many people I’m sure like there are just blocks where I need to disconnect and maybe would find that like I think because they think I’m a workaholic. But you know, like by 8, 8 or 9 at night, like I have been going all day and quite frankly if I wanted to in a global company, I could get on five more calls. But I know that if I log in at 9pm and start checking emails, it’s not like I don’t check. But I mean like if I start working again, I can’t even go to sleep. So I’ve learned for myself like, you know what, I am just not looking at my, you know, inbox till tomorrow morning at 7, which would surprise people. But again I try and be a smart time shifter because I know at seven in the morning the, you know, the Australia, New Zealand markets are closed, you know, and so I have like two hours in the morning that nobody else has to catch up on email and do all these things. So as opposed to like respond everywhere, all the time. Now my husband would probably disagree. I think of myself as like a time blocker and the same applies to the weekends. Like people would think like, oh, you know, some people are like, do you have an Apple Apple watch? I’m like, man, if I had an Apple watch I would be checking email every minute. So I actually don’t, you know, like, so I have like, I give myself Saturday. I’m like, you know what, I’m just not good. Look, if I look, I’m getting started. So my rituals, believe it or not, probably more off, off and on than people think. I think people seem always on because I’m you know, generally quite responsive. So that’s one. Number two, I, you know, another thing for me in this off on mode is I would say I flick 50,000 unread emails at any point in time. People Are what I’m like, I pick and choose. I pick and choose in everything. Like, you know, I’m like, the only one responsive to you is if I’m scanning an inbox and be like, of all these things, what requires a response from me? And I just pick them off and I respond. And the rest, I’m like, you know, I’m just gonna ignore all this unread email. And if it’s not to me requiring response directly from me from somebody who is important right now to respond to, I’m not doing it. And so, you know many people. So I just, I’m a picker and chooser. That’s a big one. And I think it’s, it’s. That’s probably a day in the life looks like picking and choosing. So people find me highly responsive because it’s. This is what’s going on in the background. I am quite selfish about blocks of time. You know, like, you know, if I want to go see my son’s basketball game or my daughter’s water polo game, I have no shame whatsoever in saying, you know what, I’m sorry. Like, I’m busy from 3:30 6:30.

Darren [00:37:36]:

Yeah.

Sukhinder Singh Cassidy [00:37:36]:

Because I’m always working. Right. Generally. So. So I, I think that’s sort of how I manage it. And then I pick and choose at home too. Everyone’s like, oh, what’s it like to be a mother? Whatever. I’m like, yeah, guess what? Like, you always feel guilty. Someone’s already always gained the short end of the stick. That’s true. So you know what? I’m not worrying about. I’m sorry. We have a really high doordash bill. It is what it is, you know, I’m sorry. Like, your car is a mess. I’m like, it is what it is. Like, so I. There’s just. I think that’s maybe the big theme. Pick and choose, Pick and choose. Pick and choose.

Darren [00:38:05]:

Yeah. Yeah. The ability to discern what’s important and be comfortable disregarding and letting go things that aren’t or.

Sukhinder Singh Cassidy [00:38:12]:

And then just time blocking, you know, because otherwise it is completely possible to just never switch off. And my mind is already always going, like, if I, if I just kept checking, you know, I literally, I would not be able to sleep because I’d. My, you know, the last thing in my mind is the thing that’s racing. So you really just do have to really be pretty precious about blocks of time.

Darren [00:38:32]:

Yeah. We talked about this in the context of a senior team, like a principle that really guides your philosophy. I’m Wondering if I could ask you the same question about being CEO. If there were one principle that would capture the spirit of the way you think about leading your leadership philosophy that really guides you and animates you and gives insight into you, is there one that comes to mind?

Sukhinder Singh Cassidy [00:38:57]:

I think I have. Maybe I have one. I’m worried it sounds simplistic, actually. My principles impact, I mean, every way. Every day I wake up and I think, can I have the most impact? Every day I judge my team on, are you working on the most impactful thing? Every day I, you know, when I interview people, I say, you know, can you just tell me about the impact you’ve had? Like including impact. When it failed, it didn’t matter, like, what’s the mark you left? Why is something better? Because you spent your time on it, you know, and gave it your attention. So I think the word that guides me, honestly as a CEO is impact. You know, we all have to make choices about where we can be of service and have impact. And I think probably it will probably thread through this conversation. So that’s probably my principle. I mean, sure, there are dozens of other principles I could throw at you, but if you ask me the word it would be an impact.

Darren [00:39:46]:

I’m curious to see, to understand how that shows up. Like, imagine I’m on your team and we’re in a one on one. And like, what would that conversation look like? What was the quality of that principle in action?

Sukhinder Singh Cassidy [00:39:59]:

Quality type, principle in action is I like, here’s a good example, I say to my teams, and remember the other principle I have is operating range, right? Go high, low, go side to side. Okay? So think about those two. Those two. Here’s one example of a interaction. First of all, I asked my teams to always bring an agenda. Of course, always you can do it in a Google Doc. And I’m like, Go 30,000ft, 3,000ft, 300ft. And they’re like, I’m like, just can you categorize the topics we’re going to talk about? I want to make sure that what’s the most important thing to work on? Like what’s at the 30,000 foot? Like what are the things I need to know the right 300ft? Like what there do I need to know about? Because you’re dealing with something at 300ft and hope maybe nothing, right? But I’m like, what are the altitudes you’re dealing at? And so that in our conversation, even in an agenda, I know we’re tracking on all three, that’s impact. That’s sequencing, that’s operating range. So that’s how it might play up. You know, everyone’s like, what’s the most important thing? What’s the most important thing you need to do? But again, I’d rather they bring a very simple framework for that. Right? A CEO. I mean, I have to count on the fact that my teams can sequence and prioritize. But what it looks like with me is I am trying to understand, you know, the things that matter most and how we’re tracking on those, which is so obvious. I would say.

Darren [00:41:07]:

Yeah, but I imagine you’re, you don’t shy away from being directive when there’s a difference of opinion on unfortunately, what’s the highest impact?

Sukhinder Singh Cassidy [00:41:16]:

Unfortunately not. And unfortunately I have a high directive quality. But, but, but to be honest, when you come back to this, remember we talked about self awareness. So if you know you’re a highly directive person, that’s another reason my teams need agendas. I always say, come in with your agenda and your thoughts. What chance you’re leaving with your agenda and your thoughts. Come in with no agenda. You’re leading with my agenda. I’m not saying you’re wrong. I’m just saying you’re interacting with somebody who always has an opinion and whose mind is always like, oh, what’s the most impactful thing? Right? So what, as an example, when my mind’s worrying that way, I will shoot my teams and know and be like, hey, on our next one on one, can you add these things to your list so I know the things I’m thinking about are covered, right? Because I’m obviously thinking about a dozen things anytime. But I think the way to be in command, which is really important with the CEO is very simply, it works with me too really well. I’m like, manage up. It’s really simple. Bring your thoughts, bring your point of view, bring your structure. All I need is structure and a great interaction. And I’m good because I have a dozen other problems to solve. So I think people, when they encounter somebody who can be more directive, will be like, wow, if you’re just going to tell me what to do, I’m like, no, you’re a leader. Like, you come in and you tell me what to do. Like, I actually enjoy those interactions, believe it or not. I’m like, oh, that was really simple for me. I just had to say, yes, no, maybe. And nine times out of 10, I’m going to agree with you. You’re the, you’re the expert, right? So even it helps with that directive Tendency, if that makes sense.

Darren [00:42:37]:

Yeah, I want to maybe round out our conversation and close out, start to close out our conversation but really to have you think about the next couple years at zero and your own leadership and your own role and if you had to sort of describe the continued evolution of Sikhinder over the next, let’s call it two years, what would that, what would that look like? What, what are your hopes and aspirations for yourself?

Sukhinder Singh Cassidy [00:43:00]:

Right. Well first of all I’m somebody who thinks like the continued evolution of security has to be in service of zero. So I think of who I am and what I do and what I’m meant to do and my purpose all intertwined in the same thing. So like if I have an agenda that’s different from zeros for my growth, I would be pretty upset with myself. So that’s, that’s just the way I roll Xero. Let’s start with Xero. Like look, zero is my agenda is very simple. We have the opportunity to be a world class company in our category when it comes to delivering amazing software that’s increasingly magical for our customers. And you can imagine what that means. AI, all these other things but like a delight product and an excellently run, you know, financial machine. Yeah, High growth, high profits, high care, high performance, like that’s it. So that’s the journey Zero’s on and it’s a continual journey and it doesn’t end and that’s great. All that happens every year is the bar gets set higher as it should. Like that’s great. Like good for us that like, you know, we are growing as a team and as a company and as far as we can see we have a lot of Runway, we have a lot of things to do. You know, it’s like it is a growing category and our customers need more time back from us every year that. So what does Xero need for me and where do I need to grow? Well, you can imagine first of all like everyone I need to keep up leveling my team’s capacity and capability to take on more so that I can go, I always think like of drafting right. So I can go draft around the next corner and start thinking about the things Xero is going to need a year from now. So probably needs, I need to keep modulating my style like making sure we have the right talent not just at one level of the strategy but the second level, third level. I’m a believer that you know, unlocks happen like maybe at a director or product lead level for a key area. It’s not going to happen because you hired the person at your levels, because they hired the right person and their team is firing. So I care probably about the development of our top 100 leaders, right? And for me that means like what services, what programs they need, how do I need to show up as a leader to get the best from them? I think a lot about that. How do I need to. My style, that’s part of Sukender’s development problem is also like as the business go gets more complex, everything gets more complex. Like how we deal with our board, you know, how we take people on a bigger strategy journey, how do we think about our investor base? So I think what, as you get bigger and in some ways more relevant, all that happens is demands on you increase. And so I think I have a coach, you know, I have, I have a set of things that people need from me all the time and I again, I’m just quite simplistic. Like I’ve got to keep improving my game, but that depends on the team I build, grow and foster. It depends on my own self awareness and depends on me tapping into some of those other modalities. So I mostly think that I’m capable of growing if I stay self aware and keep looking around the next corner. Does that make sense? It’s all kind of a virtuous cycle. You know, when you need scale, I’m like, of course I need to keep scaling myself and keep developing new modalities and all those things, but I have to look at this toolkit I have and you know, it’s a system and the system’s gonna run at another gear and another gear in another gear. And so for me, for me to find my next gears, I’m gonna run the same playbook. I just have to run it, you know, at a next level of performance. And so yeah, I, I guess I’m not somebody who worries too much about whether I can do it. I think I need to stay self aware and keep building great teams and keep trying to look around corners and be precious on my time and priorities and keep obviously, I hope, evolving as a human being. But you know, hopefully all in all, good ways.

Darren [00:46:31]:

Yeah, well, I’m also struck by the sense that you’re having fun in this role.

Sukhinder Singh Cassidy [00:46:35]:

Yeah, yeah, I said, I said I like growing and I like creative problem solving. And so it’s really fun to be in a job where every year the challenges are different and they look different and you get to do it with the team you love. Right. I do love working with people. I’m Half introverted, half extroverted. I’m very, you know, I’m very independent, but I get energy from people. I get energy from people solving problems, and I get energy from having impact. So for me, as long as things are true and I’m with the tribe I love and my family’s healthy and my children are dead, then, like, what do I have to complain about, right? I. I get. I get something amazing.

Darren [00:47:11]:

Yeah, We’ve. We’ve covered so much ground. It’s been awesome. I wanted to give you an opportunity. If there’s anything that we haven’t covered that you’d want to add or something that we have that you want to say differently or synthesize. There is anything.

Sukhinder Singh Cassidy [00:47:24]:

Oh, gosh, I don’t think so. I think we’ve talked about a lot, and I. I mean, I think you covered the essence of. Of most. And, you know, thanks for being a great interviewer.

Darren [00:47:32]:

Well, thanks for making it so easy. It’s been delightful. I was so looking forward to it. And again, I really, really appreciate you and. And the time.

Sukhinder Singh Cassidy [00:47:39]:

Thank you.

Darren [00:47:48]:

I hope you were able to get a full appreciation of Sukhinder’s incredible leadership style. A unique combination of authenticity, care, and an intense drive for impact. I look forward to being with you on the next episode of one of One. Until then, I hope you live and lead with courage, wisdom, and above all, with love.

One of One is produced by Erica Gerard and Podkit Productions. Music by John LaSala.

Listen Here

Ever wondered what it takes to stay ahead in the fast-paced world of fintech? In this episode of “One of One,” you’ll hear from industry luminary Max Levchin, the Co-Founder and CEO of Affirm. Join host Darren Gold as he delves deep into Levchin’s journey, uncovering the essential roles of a CEO, like setting a three-year strategy, hiring top talent, and ensuring the company never runs out of cash. You’ll gain insights into the concept of the “S curve” in business growth and why recognizing the next phase of expansion is crucial for maintaining momentum. Discover Max’s personal reflection practices, his commitment to integrity, and his strategies for avoiding the pitfalls of slow growth by leveraging existing strengths. With practical advice on foresight in entrepreneurship, the importance of planning, and the intricacies of strategic versus tactical decision-making, this episode is packed with actionable takeaways. You’ll also hear compelling stories from Max’s experience at Affirm, including challenges in the traditional financial industry, the company’s partnerships with retail giants, and the significance of maintaining core principles like never charging deferred interest or late fees. If you’re an aspiring entrepreneur or a seasoned leader looking for invaluable lessons on maintaining a competitive edge and fostering an inspired team, this episode is a must-listen.

Timestamped Overview

00:00 Credit issues inspired creation of better score.

06:11 Company promotes honest financial services over profit.

09:48 Mission differentiation attracts talent against questionable practices.

13:18 Selling transitioned to strategic thinking and writing.

17:44 Transitioned from managing to leading a narrower team.

22:59 Delegation improved product management and team satisfaction.

26:51 Deep, rich relationships optimize work happiness effectively.

32:21 Adhere firmly to company values, avoid deception.

37:06 CEO responsibilities: Strategy, team, funding, growth planning.

42:46 Integrity, time management, growth are crucial lessons.

47:36 Surround yourself with smart, kind people.

Full Transcript

Darren [00:00:02]:
Hi everyone. Welcome back to another episode of One of one. I’m your host Darren Gold, CEO of the Trium Group. My guest today is Max Levchin, Co-Founder and CEO of Affirm. Many of you will be familiar with Max’s well known role in founding and building PayPal, one of the most iconic startup stories of the past quarter century. In this conversation, Max and I spend our entire time addressing the last 10 years of his career as CEO of Affirm, the now ubiquitous financial services company. Max shares some of the most unique and valuable lessons of building a founder led company. We cover topics ranging from how to lead product without actually managing the function to the importance of consistently and repeatedly finding a company’s next s curve. This is a must listen to episode for anyone interested in technology scaling startups or how to lead authentically. I trust you will get enormous value out of this incredible conversation. Max, thanks so much for being in this conversation. I’ve really been looking forward to it and looking forward to a really great conversation with you.

Max Levchin [00:01:07]:
Thank you. Happy to be here.

Darren [00:01:09]:
Yeah. So I know there’s been a lot said and spoken by you and others of your kind of history, particularly as co founder of PayPal. I think as I mentioned to you, I wanted to steer our conversation perhaps in a slightly different direction and that is the last decade or so of your life leading as founder and CEO of this incredible company. Affirm. And I thought we’d start with perhaps the. I’m guessing one of the motivations for founding the company was. Which is a pretty unique and compelling mission. And I was hoping you could bring our listeners into the mission of the company and a little bit of the origin story. What was it that led you to start this company?

Max Levchin [00:01:50]:
Sure. So right after PayPal I decided to buy a car which was going to be my flashy. I just took my company public. I could finally afford a nice pair of wheels or four wheels. And so I picked a convertible, found a dealer in LA that sold such convertibles, flew down to LA with my then girlfriend, now wife, showed up to the dealership and said, here I am, I’m gonna buy this here beautiful car. And the dealer said great, let me run your credit check. And he did and came back and said, I’m so sorry. In fact, I know who you are. I saw in the news that you guys took a company public and you’re the PayPal kid. But your credit is terrible. Your credit history has been ruined by something you did at some point. Because my rules basically tell me that unless you bring me a suitcase of Cash, I will not sell you this car. And so imagine 27 year old max being embarrassed with not just my girlfriend, but my friends, sort of all the, my little coterie of people who were there to witness my arrival as a newly self made man. And so I was sort of deep shade of purple as I was trying to figure out what it is that I did. And what I did is that I came to the US as a teenager, did not understand credit history or credit scoring, and started my first company two years later in college, which I financed from my credit cards. And that was great, until it wasn’t. And no one exactly told me about such things as minimum payments or being on time. And three months after my first company went bust, I got a fairly polite call from a collector telling me that I have a multi hundred dollar balance on one of my credit cards, which I think I got on campus. So it was very much the early adopter. And unless I pay, my bills reflect very poorly on my credit history. And at the time my bank account balance was about $19. And not only did I not have enough money to pay off my credit card bill, I was also certainly scrambling to start another company. And so I had very different plans for my personal financial decisions. And so the collector very politely told me that, well, eventually it’ll hit my FICO score and whatever that means, fast forward half a decade later, can’t buy a car. And that was okay. I eventually, obviously I was on that day independently wealthy and in fact found a digital equivalent of a suitcase of cash, bought the car, drove it home. But I had since become very interested in what was it exactly that I did so long ago. And obviously my second and third and fourth company did slightly better than the first one. I eventually paid off all my credit card bills and then some. I had never been late on a single bill since. But you know, fast forward another decade. I think I was turning 35 when one of my friends, as a prank, made my credit card not work at a restaurant that we went to, went out for a meal to. And the sort of purple face emotional horror of oh my God, not again was all too familiar. And not for a second that I think that that was not true. In fact, I thought, oh, of course my credit score is trash. It’s been this way for 20 years now. And that was sort of the second moment, you know, why does it have to be this way? Like I did just fine in life more than once. And that was the rabbit hole where I said, one day I’m going to build A credit score that will not suck for people that screwed up in college and want to buy a car or a TV or pay rent or get an apartment. And that’s where it started. And at this point, it’s a lot more than that. But the very, very beginning was just build a credit score that keeps up with how your life changes.

Darren [00:05:46]:
That’s a great story. And for those listeners that have been maybe sleeping under a rock and haven’t seen the now ubiquitous Affirm at point of sale, or you now have a debit card, can you tell us a little bit about. Okay, what did that translate into? What was the company that was built. And there’s something about injecting honesty into the financial services industry that I know was really important to you, and I’d love to hear about that as well, if you wouldn’t mind sharing.

Max Levchin [00:06:11]:
Yeah. So as we started, the company, which really was started as a let’s build a better credit score, was trying to write down criteria for what kind of a company would I want to run. And obviously, I’ve had my share of financial services. And one of the things that struck me about financial services all through my experiences there was just how amoral the entire industry is. It doesn’t really want you to fail, but it doesn’t mind if you’re late on a bill. It’ll just get some late fees out of you and it’ll be great. And if you revolve a little longer in a credit card, there’ll be more interest. And so this notion of we’re not really on your side, in fact, we’re making a bet that you will not fail, but you don’t necessarily have to do too well. Too many smart decisions financially, and we make less money. And so I wanted to do something the opposite way. And the original slogan for Affirm was honest finance. And then I decided that people don’t understand what that means, and I wrote down a mission statement to build honest financial products that improve lives. And from the very beginning, so this seemed awkward, I wrote it down, thought, that sounds good. I looked at it again the next day and thought, that’s really awkwardly written. But it was set in stone. And we’ve never changed a word of our mission sentence and never will. But the idea was, let’s build a company that provides financial services. Not just credit scores or loans, but anything and everything that would improve people’s lives without ever compromising our morality. And the sort of the spine of the company is do first and foremost the right thing by the end customer and then worry about profits and all the other things that financial industry puts first. And so as we did that, we actually struggled to get adoption for credit score. And people wouldn’t believe us. And by people, I mean the traditional financial players, like, well, no one will ever pay back your loans if you don’t charge late fees and so on and so forth. And that story is well documented elsewhere. But. But we basically bootstrapped ourselves by going to retailers initially very small and eventually very large like Amazon and Walmart and Target, et cetera, and said, we will add our logo to your checkout if you’ll let us. And we think there are enough people in the world that want honesty in their financial services that they will choose us over their existing credit cards. And the first 5,000 times people laughed at us and said credit cards are just fine. I would say, well, yes, but do you know how much you pay in interest or how often are you late? How much did you spend in late fees? You’ll be like, ah, yeah, you’re right, it is kind of annoying, isn’t it? And eventually we started getting some people giving us shots and inevitably the affirm impact was about 30% more volume. So as people saw that, there is this whole unspoken un unserved, underserved crowd of people, typically young, that would say, I just don’t want to use my credit card, I don’t know exactly what it’s going to cost me and I know there are hidden fees in there and Affirm doesn’t have any of those. This notion of honest financial products became more and more real and at this point we barely even talk about why Affirm, because it is everywhere. It is now on hundreds and hundreds of thousands of merchants that put our logo on mostly because everybody else did.

Darren [00:09:32]:
So we talk a lot about mission or purpose as kind of a motivator for people and a way to attract talent. But what I hear you saying is it’s actually been a source of real competitive advantage and been instrumental in the building of scaling of the company. Is that fair?

Max Levchin [00:09:48]:
Yes. But the talent attractor component of the mission is actually also very, very important. In fact, one of my bets very early on. So there’s sort of aside to the whole thing. So there’s a bunch of things in financial industry that are just awful and it’ll take up the entirety of this podcast to cover every one of these ideas that they’ve come up with. But some are truly awful and others are questionable. And so things like deferred interest are evil. There’s no one ever going to be able to convince me that it’s not. But late fees are an interesting one. So a late fee is this interesting bet that a bank or financial service provider makes with you. If you’re late, you’ll pay me, but if you’re not, you won’t. And so it’s a bet where you can win, and it’s an honest bet. If you’re really, really good at keeping calendar and nothing bad happens in your life or nothing too terrible financially, you will win the bet. The problem with a late fee is that the bank is betting against you. And this is a provider of service to you. Like, how often do you have service providers that are actively betting with you against you? And my theory became that if I explicitly said late fees are never going to be a part of our story, I’m going to find all the engineers and all the product managers and all the people that have had that same thought in their head going, wait a second, why am I working for a place that bets against its customers? And that became an explicit pitch where I would interview people and they’re like, wow, that’s a really brilliant engineer. Why are they considering financial services? And half the time they’re like, I wouldn’t work in a financial services, like, well, let me tell you why this one is different. So the differentiation of the mission became a great recruiting calling card where at some point I started reaching into financial services firms and telling them, like, you ought to be ashamed of yourself. You’re working for the financial firm that does this and this and this, and we don’t. And the very best people be like, you’re right, I’m going to put down my arms and join this army. And we’ve picked out some amazing people over the years, certainly very early years where we had no business hiring because we would pay less. And we’re not established and we’re, you know, not necessarily going to succeed at all, basically by saying, you’re doing this the wrong way, we’re going to do it the right way, and we’ll either fail, but we’ll feel great about how we did, or we’ll succeed, but. And then we’ll really feel great about what we’re doing.

Darren [00:12:12]:
I want to come back to this notion of placing bets, sometimes contrarian ones. And what I’m hearing is saying, developing real theories of competitive advantage. And I think we’ll circle back to this. But I want to, I want to go back to the founding of Affirm. I think if I, if I’m not mistaken, 2012, you’re one of four co founders. You step in formally at least to be CEO in 2014. And so you’ve had a decade now in a role of leading a company both at its inception, but to pretty considerable degrees of scale. And I wanted to dive into this 10 year period of your professional life and maybe start by asking a question of whether the arc of your career, your CEO experience has followed any sort of storyline or chapter segmentation. Because the needs of the business re its CEO must have changed right from 2014 to where you are today. Has it, has there some discernible kind of segmentation of your 10 years that you could share?

Max Levchin [00:13:18]:
I think these things are always easier to fit into a neat narrative retroactively. But in practice when you’re really close to it, it just both moves very quickly and very slowly. Like it’s when you don’t see someone for 10 years you realize how much they’ve changed. But if you live with them like, well, they’re kind of the same, like there’s not, not a lot going on. So I think in the earliest days a lot of what I had to do was selling. And I don’t just mean selling merchants, but selling future employees, selling our team on taken on some crazy new product idea that I would have because the product idea of yesterday didn’t work. So there’s a lot of persuading and that probably was the primary job. And in fact I sort of volunteered myself into being the CEO because I realized that there’s so much time spent selling. If I’m convincing myself that I’m not doing this as a full time job, I’m just lying to myself. And if I’m going to do anything as a full time job, I’m just going to have to be the chief executive. And fortunately my co founders did not protest. This was a reasonably welcome change. I think. As we grew and found success, I started focusing more and more on thinking than selling. I think that’s maybe the most honest narrative. As you do less and less with your hands and you do more and more with your head. The hand to hand combat becomes brain to brain combat. But spent a lot of time writing and throughout the history of Affirm I’ve written many more documents than I ever done before. And most of the time I think they’re just rehashes of my old documents where I start from scratch but inevitably, inevitably end up in the same place or same similar places. And those documents become sort of attempts at guidance for various teams doing various things and less and less of my hand to hand combat happens by my hands and becomes much more of a thing that the teams go out and do with hopefully a little bit of incremental strategy from all these essays that I write. But I’m buying time here because I don’t actually know exactly how my life has changed.

Darren [00:15:39]:
It’s all consuming, I imagine that hasn’t changed.

Max Levchin [00:15:42]:
Yeah, it’s entirely all consuming. The, I mean, there’s lots of things going public, for example, fundamentally modifies who you are as a chief executive. You go from timelines that you decide for yourself to timelines that quarterly schedules and shareholder reports and things like that decide for you. And you try very hard to avoid forcing things into a three month programs, but inevitably you end up with, well, if we have something to say, then this is the moment when everyone’s listening and you can tell yourself, well, it doesn’t matter. But the reality is the smartest people on Wall street, at least the ones you hope are the smartest people on Wall street, are listening to you right now. And so you inevitably start packaging your life in these three months increments to at least some degree. So I think that’s a tactical change, strategic ones. I’m not sure I could tell you. I think it’s all the same.

Darren [00:16:40]:
Well, there is this interesting phenomenon known as a senior leadership team that somehow all companies have some version of. Even if you’re, you know, really on an outlier and at some point it be. I imagine it became clear that you needed to assemble a team of senior leaders. I’d love to pull on that a little bit and just explore how that journey of leading a team of senior leaders has been for you and how you’ve evolved in your capacity to do that.

Max Levchin [00:17:06]:
That’s a great question. So I think again, every time I try to begin a sentence with well, we’re kind of unique or I’m kind of unique, I realize I’m certainly not. So first of all, let me preface it by saying I’m confident this is not the only company where these things went down this way. But at some point and at the.

Darren [00:17:23]:
Same time, Max, I think the whole premise of this show, and it’s something you know, I believe in strongly, is that like there is, there is an inherent uniqueness to the really effective CEOs. So, you know, the. What I know of you is there is a lot of truth to that and I’d love to bring it out as well. So feel free to highlight where you think you think differently or do things differently because I know that’s true.

Max Levchin [00:17:44]:
So I think initially I was primarily following my startup habits where I would have a fairly wide senior team with functional leaders that would be fairly narrow and deep. So you would have a head of capital markets and a head of finance and you would have head of engineering and a head of product and so on. And all these people would report to me. And I’d spent a lot of my time in one on ones and just figuring out how to connect the dots for them. And at some point I had realized that a couple of things. First of all, I realized that I’m probably always going to be a better leader than a manager. And I am not one of these people that thinks that management is a dirty word. And I actually think that there’s extraordinary talent involved in being a great driver of teams to deliver on their plans and stick to schedule and have really intelligent planning and foresight and trade offs and prioritization. Like all that stuff is really, really important. The larger you get, the more you recognize just how important that stuff is. Not because a small team can do it all better, it’s because the complexity of this changed and therefore everybody has to cope with it. Just goes up exponentially like that. That’s an N square function to where N is the number of teams involved. And if you have one team like one tiny little startup, n square of one is still one. But if you’re n squaring 100 teams, definitely looking at 10,000 little wrinkles that you’re going to have to deal with. And so people like that who know how to manage, process and be effective and convince tired executives and tired managers who have just replanned everything for the fifth time that the sixth time is the charm is unique and I do not have any of those skills. And when I realized that. But on the other hand, I can write a pretty good essay describing what the world looks like three years from now when we win whatever thing that we’re trying to win today. And the shorthand that I’ve come up with difference between managers and leaders is leaders get to repeat just what they want to say as often as they see fit. And managers get to repeat the very thing they do not want to say all the time. Sounds like a very similar job. But in reality the managers want is much harder and much more thankless. And so I’d recognized that and decided that from now on my job will be to lead extraordinary managers. And that means I need to find the very best people on my executive team to whom I could hand more and more teams, more and more responsibility for this extremely complex cross functional planning and delivery and deadlines and all the things that management really is, in a good sense of the word. So I ended up with a much, much, much narrower list of direct reports. At this point I have four people reporting to me, which is excluding obviously my executive assistant, et cetera, supporting roles. But in terms of senior leadership team, just four reports. And the honest truth of that group, which is pretty sort of, I think I consider my crowning achievement as a manager of manager, a leader of managers, is that I think if one day I decided to play musical chairs and rotate the roles between the four people, at least three of them could easily switch gears and be like, oh, I’m no longer the Chief Revenue Officer, I’m the chief Operating officer, no problem. Of course I know exactly what to do and so on for others. And I think if you have that, first of all, you obviously have a great succession plan because anyone can do anyone’s job, which is quite awesome. But two, you also have true generalist leaders sitting at the table, which means that no problem, no conversation naturally leads to anyone thinking this would be better without that person in the room. So you actually won the inputs of everyone and you have a true kind of a court of judgment where every opinion matters, everyone respects everybody, because everybody is enough of a generalist, and yet they have very specific functions that they are extraordinarily good at. Again, don’t know if this is a uniquely good or maybe a bad way of doing it, but that’s where we ended up. And I have to honestly say that I am by far the happiest leading this incarnation of the team that I have been in some time. And you’ve known me long enough to know this is actually a true statement.

Darren [00:22:24]:
Yes. And I imagine, and I probably know there’s some period of time where either this really valuable distinction that you’re articulating wasn’t yet crisp for you and or there was still some pressure to want to prove yourself as a manager or think that that was the role of the CEO. So like, what was the moment or how did you come about to be sort of what I would say, in the best sense of the word, unapologetic about this is what I’m good at. This is how I’m going to craft the way I lead and how my team is going to be structured to support that.

Max Levchin [00:22:59]:
It was definitely a process. I don’t think it was a. I didn’t wake up one morning and decide, you know, what here’s what life looks like from now on. I think one of the really important data points was so our president Lebor, who you know well, and I went to college together. So we’ve known each other for a very long time and we’ve worked together in the past as well. So we’ve seen many versions of Max and Liebor go to town together. And most often in the past, Libor led a fraction or the total of my technology team while I had other people reporting to me, this company and other companies. And at some point during Affirm, not even, not that recent, I sort of shoved product under Lieborg in this assumption that I just didn’t have time. And it probably, by the way, is the thing that, one, I think I’m good at. Two, I have a lot of very strong opinions whether I am good at it or not. I just think that the only way product’s going to work is the way I imagine it should and so on. And so this was a temporary thing where I parked product under him because I was busy fixing something else or something like that. And we’re close enough friends where I can tell him things like, grab this team and I’ll take it back. And that’s what I did half a year later. And it’s very clear to me that while it was under him, it performed better. And when I grabbed it back, it promptly went back to performing worse. It didn’t fall off a cliff, but it wasn’t better when I managed it directly. And so one, sending it back to Libra seemed like a good idea, but Two was trying to figure out why did I think it worked better under him. And it wasn’t because they were happier or, or I didn’t worry about them as much or had less influence. In fact, I influenced the product quality and the product direction at least as much, if not better, because I wasn’t worried about things like annual reviews and compensation, strategy and organizational chart and mapping to engineering and design, et cetera. So that was sort of the wake up moment. Like, you know, there are people who are really, really good at that. And if those people are on my side and they’re happy for me to set the strategy or at least the direction of the product, but manage the rest, that would be pretty amazing. I wouldn’t have to worry about annual reviews and compensation, which I am not good at, or not only am I not good at it, I also dread it, which is why I’m late, which is why people are unhappy when they don’t know where they Stand, all of that can be done by someone who enjoys it. And so I had that conversation with Leibor where I said, how about we make it permanent, you manage product. We have to be very clear that I’m still the chief product officer for this company, but so long as you and I are aligned, I don’t think we’ll ever have disagreements. And I don’t need to have these people report to me directly just to feel like I’m in charge of product. And so that part at the time seemed idiosyncratic. But I’ve now repeated this play with more than half the functions and it works beautifully, I don’t think. I’ve written an annual review of anyone in a couple of annuals, and my directs know exactly where they stand with me, and Lieber and the rest of the cast of characters continue to delight people that report to them with thorough and thoughtful reviews and really great management.

Darren [00:26:24]:
Yeah, I hear this a lot with founders who are product visionaries themselves and are stuck between either hiring a senior chief product officer or trying to manage the function themselves. And I think what you’re offering is a really unique, artful way of being effective. And I imagine it’s a lesson for other founders who are kind of similarly situated. But I’m also hearing you say that it extends beyond just product as well.

Max Levchin [00:26:51]:
Yeah, product was the first one. And by the way, I spend in terms of hours or minutes communicating, I probably spend the most of those relative to other executives with our head of product, Vishal, who reports to Leaver. And so he and I are in a daily conversation which mostly happens over text of some kind or another, but we also have lots of one on ones and he travels to hang out with me in person and vice versa. And so we have a deep and rich relationship. I’m confident his performance rating is really good, but I’m not the one who wrote it. The alternative is real and I quite enjoy it. And it is effective. Once I knew that it works, I had asked myself, where else can I find such savings? So it’s time back and more importantly, it’s work happiness for the person that I’m theoretically managing, but practically just trying to figure out how to survive. A the one on ones that are interesting are the ones about the work. The ones that are awful are the ones where I’m supposed to be helping them onboard a new exec of their own or find a way to reorganize their team. That again, I’m, you know, I’m pretty well usable in organizing an engineering team for a startup that was founded in in 1999. That’s my last experience leading an engineering team anyway. So I think that it works well. I’ve now been able to do that with even something as sensitive as people, which was the last one such team that I moved where traditionally I think the CEO must be deeply involved in people. But again it is a complex and management rich function and I realized that Michael, another one of my Swiss army knife, can do any job. Executives who’s our chief operating officer would actually do much better managing the function which would leave me with a rich and meaningful relationship with our head of people without the need to go super deep into org charts and compensation structures and instead actually focus on things like are we culturally consistent with what I’d set out to do 10 years ago or are we training our people well or do we have standards that are high enough where again I’m basically focusing on product of that function versus the function itself.

Darren [00:29:19]:
Yeah, I think this whole conversation is highlighting a bit of a broader phenomenon that I want to articulate and then have you react to, which is all aspects of CEO leadership I always advise are best done from the first principles basis. There’s always a desire to have the sense of like how is this done elsewhere? What are the best practices? And what I’ve increasingly found is particularly for founder led companies, that it has to be first principles, it has to be experimented with and you look at Bezos and Reed Hastings at Netflix and designed and it ultimately looks very unique to that particular individual in that particular company. Does is that, has that, does that ring true for you?

Max Levchin [00:30:02]:
It does. I think most of the time these experiments are products of necessity where you know you’re not happy and you are sloshing around. Well, it works like this at a company like that tells you a board member or an advisor or a mentor and you’re not really told, hey, you should just figure out what works for you. And you are. But it’s sort of comma, here’s a list of possible solutions. And maybe if I were talking to my six years ago self, seven years ago self, I’d say just like ask yourself honestly, what do you want to get rid of? And then say I’ve gotten rid of it and not in the function way or even anything but a very, very specific these lists of tasks are the things that I’m not going to do now solve for, they still have to get done, someone has to do them. How can you create an environment where these tasks are accomplished but it isn’t your responsibility and then fill out the time with the tasks that you are good at and love doing and don’t mind sinking all available time and then some into. And so that’s maybe a less artful way of repeating what you said.

Darren [00:31:22]:
So I want to keep going on this sort of founder path a bit. In some ways, you’re the kind of quintessential founder CEO in your unique ways, which is kind of quintessential founder CEO. If you spend time talking with anybody at Affirm, what they will tell you is that this is a, this is distinctively Max’s company. And I, and I say that in again, in the best sense of that phrase, which it has your fingerprints on it. You, at least, as it occurs to other people, aren’t. Don’t apologize for the kind of culture and the kind of standards and the company that you want to build. And it’s a very clear sort of invitation to opt in or opt out. First, I just love your reaction. Is that accurate? And second, like, you know, for those of you I’m imagining like a founder two years in, maybe questioning their, their opportunity to be that bold seeking sort of counsel, what would you say with respect to that?

Max Levchin [00:32:21]:
I think it is. I hope it is. I think the only advantage you have as a founder at the limit anyway is sort of a carte blanche to make decisions about how the company’s going to go about doing its work. There’s not a whole lot more you have beyond what everybody else has. And so I think it’s very important to be crisp about what it is that you are and you’re not apologizing for what you are and not changing it is the ultimate lunacy. So fortunately we don’t do a whole lot of that. But it is. And I don’t think I’ve ever sort of said, hey, it’s an invitation to opt in or opt out. But I am fairly clear that we are who we are. We’re not going to change our ways in either direction. We will never charge deferred interest or late fees. It’s not in the cards. And in the old days I was probably slightly harder edged than I am now. I would tell people that you can ask me about charging deferred interest or late fees once and I’ll give you a very good explanation why this is not part of the strategy. If you ask me a second time and you don’t offer a reason for why you want an answer to this question, done again, I will fire you. And it’s a fireable offense to ask the same question twice if it’s that question. And it was sort of like a. A bit of an apocryphal tale until I fired someone for asking this question second time without a real good explanation why they wanted to reopen the conversation. And that sort of sent the shockwaves. And people were like, whoa, this guy’s crazy. And like, well, I am. But then again, it’s in the mission of the company. We’re not going to do these things. What are you doing? And the question, of course, the full story goes something like this. The person said, well, I thought about it and you’re really, really good at pretending that this is that kind of company, but we all know it can’t be. Like, all right, I’m actually not pretending, but I know you are, and that I didn’t fire the person. I told him, I think you’re fundamentally in the wrong place. You actually should go back to banking where you came from anyway. So, yes, we don’t apologize for certain kinds of behaviors and we feel very proud of them. There’s very little downside to being who you are. You will eventually be found out if you’re not anyway. So the upside of being who you are is perhaps limited to just whatever mistakes you have in your strategy. But the downside is near infinite. Like the day your team tells you you lied to us is the day they start walking out, either actually or in their heads.

Darren [00:34:53]:
Where is the line, though? And is there a line between, you know, using that as a license to not be introspective, not be curious, not be open, not be willing to look at yourself, to grow? How do you reconcile the two?

Max Levchin [00:35:07]:
That’s why the semi apocryphal tale has the very important caveat. If you come up with a new argument why something that we have nailed to the proverbial mast should be reexamined. You will never get any kind of trouble. So I always, always preface any one of my we will never do X or Y with a unless someone here has a really, really good argument, why not? The world changes, we better change with it. And there’s no such thing as dogma in business. You’d be an idiot to believe that everything is today the same way it was yesterday. But you can’t change it based on some things, and you must change it based on others. That requires analysis and being thoughtful. There’s no limit. In fact, one of my areas for improvement is certainly, if given an opportunity, I’ll self analyze and just overanalyze for as long as the time permits and then some like I’ll run out of the clock on any chess game just it doesn’t matter how long and sometimes you just have to act so that that too is a is a guardrail but without self analysis dogma will get you into a bad place. So don’t do not mistake steely spine approach to doing business with dogmatic well I’ve already decided and so we’re just going to believe that the sky is green sky is different color every day.

Darren [00:36:42]:
You mentioned chess and I want to pull back that thread that I said we might return to and that CEO is strategist I find far too few CEOs actually engaging in the real questions of true competitive advantage. I’d love to hear you talk a lot about AN S curves 3 years, 5 years, 10 years ahead how important that aspect of your role is and bring that to life a little bit.

Max Levchin [00:37:06]:
Definitely what I consider to be my job quote unquote. I think in the I forgot who told me this, but this is a not my idea but when I was somewhat younger someone told me that the job of the CEO is threefold. You set the three year strategy so you sort of figure out what it is you’re going to be when you have a little bit of traction because it takes a few years to get to real traction. You hire the best team to execute that strategy and you raise enough money so you don’t run out of cash between the time you have your team and you have your strategy actually working. And I think it works really well for the first probably five years of any sort of a successful or semi successful startup. And then at some point it works and you have something resembling an S curve because life’s not worth burning midnight oil if you’re not building a thing that has an S curve shape to it. Like if you’re just growing linearly, you should take full weekends off and as you’re watching your S curve go up, you realize that it’s not forever. You will run out of free growth at some point and the question becomes or the fourth leg of the stool of what’s the CEO’s job is inevitably well, where is that next rocket booster? Where’s the next S curve going to come from? The growth that points to the sky is addictive. You actually want to see more of it. And as you raise money, as you hire the team, all the people you’re selling on, why this is the place to spend the next X years of their life on your telling them it’s going to go to the moon, it’s going to go up. Like, look, this is a rocket ship and you’re getting the seat as an investor, as an employee, whatever. And if you’re not thinking, yeah, but I know that the rocket ship will run out of fuel at some point. The S curve has that top part that bends to a flat and sometimes doesn’t stay that way, sometimes starts declining. You have to spend a considerable amount of time just asking the question, where’s the next fuel tank or the next rocket booster or the next rocket going to come from? And it sounds like, okay, well, you thought of one, going to think of another. But most entrepreneurs think of one in their lifetime. And you have to be very, very deliberate about asking that question and putting yourself on a deadline. Because if you tell yourself, well, right now I got to make sure the site’s up and hire my next head of engineering and all the things that are tactical today, you’ll look at the S curve and you’ll realize that you’re at that upper bend or worse. And restarting the rocket as it’s falling down is much more expensive than just strapping on another booster. And so that’s sort of something that I was aware of from the very beginning and did a decent job finding time every year. So my typical time for reflection for what’s the next S curve going to look like? Where is it going to come from? Is around this time of the year, actually mid December. As the world starts shutting down, I try to find time to be somewhere where I’m not always exposed to pings of my various communication devices and messengers and try to write a story of Affirm three years from now, five years from now. There’s more to what does that look like? The most important thing is probably what some people call right to win. And the business school term is synergies. It’s not enough to come up with another rocket booster if it doesn’t fit your rocket, it has to be propelling in the same direction. Or because of what you have today, what you’re dreaming up for tomorrow is easier. If you are doing really well with your financial services company and your next best idea is a T shirt store, you’re not going to do better than anyone else launching a T shirt store. And that may be the best idea you have, and you have to contend with that, but you’re far better off saying, okay, that’s a fine idea. T shirts, we really can do some great work here. What can we do as a financial services company? One with a mission, one with a very specific set of core values that just accelerates us towards that mission and where we have a right to win from day zero, not in a three year cycle to get to that S curve. How do we skip the lower elbow of the S curve where it looks flat and you just hope it bends up a little bit. And that takes years. The average time to an S curve is three years. Just as so if you’re not thinking about the one three years from now, you’re already late. And if there’s one thing that keeps me up at night, it’s have I thought up enough of these things for the next three, five, seven years? Because you know, not all of them are going to work anyway like you will have, you know, best late plans are only going to work half the time. And if you’re, that’s. If you’re really, really good. So those are all meta points of how to do this, what it looks like for us. You’ve seen some of these essays. They’re mostly random Madman.

Darren [00:42:04]:
The Genius comes through. I think you answered my next question and maybe a question to sort of bring us home a little bit, but I’m going to ask it anyway. To the extent there are other lessons learned, other pieces of advice, and it can be to frankly, anyone that might be interested in listening to this conversation. But I’m again picturing that, you know, founder two years into their journey who may not have the the privilege of speaking to you directly other than you better be thinking about your next S curve at least three years in advance or you’re too late. Other lessons you’ve learned that you would want to impart to somebody similarly situated, but 10 years early.

Max Levchin [00:42:46]:
If you search the web for lessons learned Max Luftchin, you’ll find on some question and answer site. Years ago someone asked me this question and I decided to write it down and I was still writing it down several hours in. So it’s like a short booklet of pithy sayings from Max Levchin and lessons learned. Now it’s all primarily from PayPal years, so I have not yet bothered of updating it to the affirmed lessons which are both more relevant and more timely. So I’ll do my best to package a few up right now. You cannot compromise on integrity or excellence. The few times that I’ve seen people try, it just really, really backfires. And it’s never that you wake up one morning and say today’s gonna be the day I’m gonna compromise my integrity or excellence that I demand from myself and my team, it’s always in the moment or like, well, it doesn’t seem that bad. It is that bad. And it’s just a thing to be aware of. And it’s a thing where your team in the moment might find you annoying, but at the limit will appreciate you significantly more than the other way around. Time moves in variable ways. It’s a really important thing I learned over the years, where you can be in an extreme rush and also in a very, very slow moving river, currently, certainly consecutively. And a lot of the choices you make, especially inside that sort of middle inning where you’re no longer just trying to survive, but you’re not yet profitable and stable and growing at a good but not frenetic pace. That middle area is actually very, very difficult. And in fact, when I was sort of listening to my various mentors during that time, that’s when I felt most unsure if I’m qualified to run this company. Because they all told me that the most common failure mode they’ve seen is the move from 10 million in revenue, 100 million in revenue, to a billion in revenue. Like that, adding a zero and making a revenue with a B is just a different beast. And everyone I talked to gave me permission to find someone more experienced or professional. Of course, that obviously egged me on to do exactly the opposite. But none of these people were trying to tell me, you’re not doing so good, so maybe leave the wheel to someone else. But they were definitely very clear that this is not a thing that you naturally are great at. Going from 100 million in revenue to a billion in revenue was not an easy thing and it required a lot of organizational changes and things like that. But as you go through that, you find that your collection of stressors and most important decisions of type X, where X can be anything from raising another round of financing or waiting like you’re not, you know, unless you’re really bad, you’re not going to be in the oh, we’re going to run out of money situation by year six or seven. You know, you can. I mean, bad things happen to good people, but if you’re doing a reasonably decent job, you by then have kind of figured out the fundraising cadence or you’re maybe getting close to profitability, but you still need to raise money. And so you have tactical and strategic decisions around, well, what’s good for dilution and valuation, management and all that good stuff. And who do I really want on my cap table and when can I sort of what time of the year Is it? And as you do that, you may have like a real scalability issue in engineering and everybody’s running around like chickens with their heads cut off trying to scale the site, you know, whatever that means to your business. If you’re confused about which decision is tactical, which decision is strategic, and sometimes they’re both. So therefore the analysis becomes which timeline am I traveling on? Is this the one that’s moving so quickly that if I miss a blink I’m in real trouble? Or is this the one where I can actually move at the pace that it moves on its own and I don’t need to rush it? Being able to operate in those modes concurrently is a skill that nobody teaches you. But when you realize which one of the streams you’re in and you act accordingly, you end up in some. You find time where you didn’t have, where you didn’t think you have any. I don’t know. That was a particularly well elucidated. But that was one of the more subtle things that I thought I learned at some point where I would say I have 50 different things that are stressing me out. I would say I’m going to write them all down. 10 will still be here next month and next year and there’s nothing I can do about it and therefore I should do nothing about it. I have 40 things that are stressing me out much easier today, 20% off. So that’s probably an important one that’s slightly hard to explain.

Darren [00:47:29]:
And being right about it, it’s a fun thing to discern. You have to be right, at least to some large measure.

Max Levchin [00:47:36]:
It is true. The other thing, actually I was going to start there, Paul, but I’ll finish there. It is annoyingly true that being really smart and surrounding yourself with really smart people is not a thing you can compromise on. And there’s a lot of people who are very smart, who are not kind. There are a lot of people who are very smart who are obnoxious and so on and so forth. And I have no recipe or advice to offer. And I’m confident that when people list me, hopefully they say he’s pretty smart. But I’m sure there’s. But he’s blank. And I will live happily not knowing exactly what they say. But as you make the list of people you want to surround yourself with smart and potentially a trade off is reality of life. And you have to, if you’re a great manager, which I’m not, you help those people get better. And if you’re a good leader, you try to surround yourself with people who are naturally kind and, and nice and friendly. But to know which of the 40, 50 stressors are to postpone, you have to have some very, very intelligent people around you. And that’s potentially a difficult to achieve, but a very real unlock.

Darren [00:48:50]:
So as we wrap things up here, anything that you want to add or even revisit and summarize before we close out that we haven’t covered?

Max Levchin [00:49:00]:
The other thing I learned over the years, maybe the most important thing I learned, which I’m very much a work in progress, being a clear communicator is significantly undervalued. And I will spend all available time these days watching TED talks and courses online about effective communication. And I’m confident even this talk could be edited down to one tenth its size for clarity, but it is unrehearsed. But learning how to be a great communicator is a difference between doing really, really well and just doing well enough.

Darren [00:49:41]:
I think you may be your harshest critic, and I would say the last 50 minutes have been, if not a masterclass, a really great example of phenomenal communication. We covered a ton of ground, all of it extremely valuable. I just want to thank you for the. The gift of, of sharing all of that and being with me in the conversation. Max, thank you.

Max Levchin [00:50:01]:
Thank you for humoring me.

Darren [00:50:11]:
I think I lost count of the number of hugely valuable and distinctive lessons, principles, and practices Max offered. I hope you took copious notes or plan to listen again. I know I will. And I look forward to being with you on the next episode of one of One. Until then, I hope you live and lead with courage, wisdom, and above all, with love.

One of One is produced by Erica Gerard and Podkit Productions. Music by John LaSala.

In this episode of One of One, host Darren Gold sits down with Chris Cocks, the CEO of Hasbro, to explore the significant challenges and strategic decisions that defined his initial year in leadership. After stepping into the role in February 2022, Cocks faced immediate and formidable obstacles, including a high-stakes proxy battle with an activist investor and the difficult choice to unwind the major acquisition of eOne. Drawing from a robust background in gaming and brand management—spanning pivotal roles at Microsoft, Procter & Gamble, and Wizards of the Coast—Cocks discusses how these experiences inform his current leadership approach. He shares his philosophy on action, the importance of aligning corporate vision, and the considerable emotional and financial responsibilities of steering a global brand. Listeners will gain deep insights into the steps Cocks took to cut overhead costs, stabilize business segments, and strategically shift Hasbro towards catering to an "ageless" demographic. This episode offers a profound look into the intricacies of corporate leadership, strategic realignment, and the resilience required to lead a major corporation through turbulent times, making it essential listening for those interested in the complexities of executive management and corporate strategy.

Timestamped Overview

00:00 Lifelong gamer builds and promotes toys professionally.

03:35 Career journey from P&G to Hasbro CEO.

10:48 Invest in consumer insight, leadership, and organization.

14:09 Wizards transformed by shifting from marketing to design-focused.

17:10 Embracing risks and diversifying led to growth.

25:37 Became Hasbro CEO amidst challenges and industry headwinds.

31:20 Navigating Hasbro's turnaround requires strategic decisions.

35:37 Winning, legacy, joy: driving forces for CEO.

41:12 Play's future involves engaging all ages inclusively.

45:06 Always embrace play; it enhances life connections.

Full Transcript

Darren [00:00:01]:
Hi, everyone. Welcome back to another episode of One of One. I'm your host, Darren Gold, CEO of the Trium Group. My guest today is Chris Cocks, CEO of Hasbro, one of the most iconic toy and game companies. If you're a CEO or interested in what makes the role of CEO so singularly important, you are going to want to listen to this episode. Chris gives us a masterclass in the ability of the CEO to fundamentally alter the trajectory of a company by making one or two powerful new choices. He describes in detail the past three years leading Hasbro through a challenging and successful turnaround. And we wrap with a discussion of the importance and likely future of play. Please enjoy this wonderful conversation with Chris Cocks. Hey, Chris. Really excited to have you on the show, and thank you so much for agreeing to spend some time.

Chris Cocks [00:01:06]:
Darren, thanks so much for having me.

Darren [00:01:08]:
Yeah, I've been looking forward to this and for so many reasons. And maybe the reason I'll start with is the company that you're the CEO of. Hasbro. What an iconic game and toy company, and I want to try to bring that to life for listeners. I think a number of our listeners will be very familiar with the brands and franchises that you own and distribute. But maybe before we get into that, I wanted to start with your own passion for gaming and toys and maybe bring us into Chris Cocks through the lens of games and passions. You can start wherever you'd like.

Chris Cocks [00:01:43]:
Oh, gosh. In a lot of ways, my story is not unique. Everyone plays. Everyone started off their lives playing in their cribs, playing on their bedroom floor or on the living room, playing with toys and games. I'm just lucky enough that I get to actually build the things that I grew up playing with. So I've been a gamer all my life, ever since I can remember playing Candyland for the first time with my mom back in Cincinnati, Ohio. I must not have been much more than four. I've been playing basically every kind of game, playing with every kind of toy, and collecting since I was just the littlest of kids all the way through present day, even before I started working at Hasbro and before that, Wizards of the coast, which is our games division, really is something that I highly identify with. It's how I've made a bunch of friends, lifelong friends, how I've made a bunch of new friends. My wife and I actually spend our third date competing against each other in a video arcade. So you name it, I probably have played with it, probably have collected it at one time in my life, and fortunately enough, a lot of Those things that I've played with and collected happen to be Hasbro products and Hasbro brands. So it's fantastic to be able to kind of pass that torch on to the next generation and carry it forward.

Darren [00:03:06]:
What a special treat to be leading the company that had such an important part of your childhood and still an important part of who you are. I'd love to talk about how you got there because I know you spent a number of years at Microsoft working on Xbox and other aspects of that company, and then became president and CEO of Wizards of the coast and now CEO of Hasbro. But walk us through the professional arc. How did the personal passion and the professional career line up?

Chris Cocks [00:03:35]:
Well, I started off at Procter and Gamble after college, and I was working on pharmaceuticals. I was working on. In 1999, I was working on a pharmaceutical called Actonel, which was an osteoporosis medication for women, 65 plus. And I was doing a bunch of focus groups, kind of talking to women and talking to doctors about bone health. I was probably 25 at the time, and I remember I wasn't overly passionate about bone health or osteoporosis medications. And my wife, she was my girlfriend at the time, now she's my wife. She had just recently, for Christmas, given me a game called Baldur's Gate, which I could play at least partially on the road with the CD ROM in my laptop at the time. Not well, because they weren't super powerful laptops, but I remember being able to play that game. And it took me back to my childhood, back when I was 10 years old, and the first time I saw these little lead figurines in my best friend's house down the street and had discovered D. And the Internet was exploding. Gaming had been exploding for years. And I decided, hey, I needed to stop going to these focus groups based on osteoporosis and find a job in technology. And that same girlfriend, who's now my wife, she started interviewing at Microsoft. I interviewed and got a job at Amazon. Microsoft learned that her boyfriend was interviewing at the time down the street. So they wanted to talk to me, and they ended up giving me a job in games. And so Amazon was a great company, fantastic choices there. But being able to merge a lifelong passion as a gamer with a fantastic company like Microsoft was too good to be true. So I jumped ship from Procter and Gamble and joined Microsoft. And about four or five months later, I was moved from the PC games team into a secret project that had the code name of Xbox at the time. And I was probably, probably one of the first 50, 60 people on Xbox, mostly on the game side, and I had a great run there. I was able to. I was part of the team that brought on board Bungie, who were the makers of Halo. So I was one of the first product managers on Halo. I got to work on all kinds of our different action games, things like Mech Warrior, which became Mech Assault for the Xbox. I worked with this legendary designer named Peter Molyneux, who did games like Black and White, and he did Fable for us at the time for Xbox and just had a fantastic run there. And part of the reason I went to Microsoft was so that I could join a technology company that did a whole bunch of things. So I went and after a couple years on Xbox, I went and did a bunch of other stuff at Microsoft, notably going over to MSN and what ultimately became Windows Live and our online services. And from the time I was in Xbox and starting in 2000 through 2016, I kind of moved around different technology and gaming opportunities, whether it was at Microsoft in our Live services and then Windows Devices, which is where I was for the last several years, or leaving Microsoft for a couple years and leading educational games at a toy company called leapfrog. I just got a bunch of different kind of foundational experiences in consumer electronics and Internet services and games. And then one day, a guy who had been my college intern at MSN gave me a call and said, hey, I've got a job opportunity for you. He was working at a recruiting firm called Spencer Stewart. And he remembered I was a big nerd growing up and still was. And he presented me this opportunity to become president of a company called Wizards of the coast, which was a nice sized games division of Hasbro, and Wizards makes the Gathering and D and D. And man, that was a fantastic fit. So I ended up going to Wizards in 2016. I led that division for about six years. We had a great run. Magic had been around for close to, at that point, 25 years, and D&D was 45, 40, 45 years old. We just launched fifth edition, and between 2016 and 2022, we almost tripled the size of the business. It went from a little over $400 million to a little under $1.2 billion. And as a percentage of the total profitability of Hasbro, it went from about 15% of the company's operating profits to over 50%. And that includes after we had acquired a big TV and film studio called Eone. And I think based on that, and just based on my passion for all the brands at Hasbro. They gave me an opportunity to bump me upstairs, and I became CEO of Hasbro in early 2022, and I've been doing that for the last two and a half years. So that's kind of my journey of how I've gotten here.

Darren [00:08:46]:
Incredible. I'm curious to go back to 2016. It's obvious that you were a passionate gamer, but you had 16 years of experience. And I'm wondering what Hasbro saw in you to give you the president role at Wizards of the Coast. What was it about your experience at Microsoft that prepared you, and where were the gaps?

Chris Cocks [00:09:05]:
Well, I think a couple things. I'd had experience in video games from Xbox and then leading the games team at Leapfrog, But I don't think that was what was necessarily unique because a lot of people had games experience. I think a couple things that Hasbro liked in me at the time was I had games. I had kind of classic brand management training and experience from Procter and Gamble, and I had a legitimate passion and kind of feel for the target consumer that Wizards of the coast catered to. And what Hasbro was looking at the time was for a general manager of that business who knew the fans, knew the brands authentically, and also had some experience in digital games and digital marketing. Because at the time, we were very much focused on kind of like the classic analog versions of the games and didn't have a lot of bets inside of video games or what are called now games as a service. And I think I brought that in to the company, and that was a big part of our success. We launched a game called the Gathering Arena. A couple years after I started, we acquired a game service called D and D Beyond, which is now the primary way people play D and D. And then we started a host of new game studios and signed a lot of licensing partnerships with some big licensing partners. That's been a big part of Hasbro's success story today.

Darren [00:10:37]:
So when you think about your qualities as a leader, particularly in a president slash CEO role, what did you bring in that was really helpful, and what did you have to nurture over those kind of critical six years?

Chris Cocks [00:10:48]:
Yeah, well, I mean, a couple of things that I think were real strengths. I understood the consumer, but I didn't take for granted that I had complete knowledge of the consumer. I got that we really needed to invest very heavily in consumer insight, and we couldn't just go on our gut or our own lived experience. And actually that focus on investing in consumer insights Investing in data analytics. That was really the big unlock, in my opinion, about the success we had at Wizards and that we continue to have today. We decoupled the amount of resources we put against that, and I could have probably decoupled it again and it still would have been a winning combination for us. I think I also understood fundamentally how a games company is supposed to be organized. I was surprised when I joined Wizards that they were a marketing led, like brand management organization. And no game company or game organization that I had either worked for or worked with was marketing led. They always were studio led because the assumption was the product really was the brand. And I changed that within a year and a half of joining the company. And I think that combination of increased insight with getting the right people who really understood the consumer and were closest to it, the designers, and putting them in charge really was a big set of unlocks for us. Where I think I had gaps is the biggest team I'd ever run was probably 150, 200 people. And there's a gear shift that you have when you go from 150 to 200 people to 1,000 people plus. And then there's another one when you go to like 5 to 10,000 people. You have to show up differently, you have to think differently, you have to have a certain maturity in which you keep your creative spirit, you keep, like your passion, but you have to think broader than yourself. And that took a couple years to kind of get used to, to be frank. And then I think, like the other gear shift that I had, and this is kind of funny, and it's almost counterintuitive because I don't think you read about this in a lot of leadership books. If you would have asked me in 2015, what's the most important thing for a company, Is it the leader or is it. Or leaders, or is it the. Like the teams? I would have said unambiguously, unequivocally, it's the teams. And I discovered how important having the right leaders were, how important that function of a leader is to unlock mindsets, give permission to think differently, give permission to grow, and just how critical that is. And I still believe teamwork is super duper important. I still believe, like, the quality of talent is important, but I probably didn't appreciate enough how powerful the role of the leader was. And that's been a lesson that I've continued to learn to this day.

Darren [00:13:51]:
I'm really fascinated by that. I'm so glad you brought it up. Can we drill into that a little bit I'm curious what it was that opened your eyes to that phenomenon. And then what in particular are the. What I call kind of high leverage points where a leader can actually amplify their impact?

Chris Cocks [00:14:09]:
Well, like at Wizards of the Coast. So I had to make some painful calls. Like, we had to. We had to turn over a large number of people, particularly in our technology functions, because we just. We hadn't hired people who had expertise in a certain area or knew what good looked like. And so, yeah, we had to bring some. A lot of new people in, particularly in the digital side of the house. But the majority of Wizards of the coast was kind of a traditional tabletop games business. Like, they. It wasn't high tech. And the biggest kind of like a B test for. For me on leadership was that transition of going from being marketing led to being design led. It was the same designers who'd been there for decades that I put in charge, and it was the same marketers that we had remained there and just that switch and just that changing of the guard and saying, nope, hey, the designers really understand the consumers and the product experience is really what matters to the target audience. And feeding them the right insights. That was a total switch in how we started thinking about things. It was like the difference, to use, like a football analogy, an American football analogy. It was like the difference between playing offense versus playing defense and the unlock that you had for these people who'd been working on this product for 5, 10, 15, in some cases, 20 years, putting them in charge and saying, no, grow it. And forget all those rules that we thought we had. Forget all the things that we were afraid of, like moving our cheese or thinking about the audience in one way and think about it in a completely different way. That was super powerful, and it worked marvelously well. Like, we went from. For the three years before I started through, like, the first year I was there, so call it 2014-2017, the brand was growing 2%, 1% a year. In early 2017, we made this switch, and the marketers kind of went into a service function, and the product people took over. By 2018, Wizards went from growing at 1 to 2% to growing at like 18% a year. And it was 100%. A change in leadership direction, a change in attitude, and a change in mindset.

Darren [00:16:39]:
That's incredible. So I imagine, number one, you need to have the pattern recognition experience or just instinct and insight to be able to see that, and then, second, the courage to be decisive and to take risk. It sounds like you had both of those things. And I want to just again, go a little bit deeper. Like, what was going on for you? How did you wrestle if to the extent you wrestled at all? Because the impact obviously of this one decision was profound.

Chris Cocks [00:17:10]:
I've always had a bias towards action and a bias towards growth. My psychology is I probably dislike losing more than I love winning. That describes a lot about, like, kind of what decisions I'm willing to make and what risks I'm willing to tolerate. The other thing I'm very focused on is really getting to the. Really getting to a common vision of what the truth is and making sure that we've bulletproofed that and really interrogated what we think the truth is. And I'll give you a couple examples. So we had these tough decisions that we had to make on the Gathering, which now is like Hasbro's billion dollar product. And it drives a. A ton of our profitability. Circa 2016. We believed that the Magic audience was like, really focused on this highly competitive 1v1 player who a lot of them aspired to get into some kind of tournament circuit for Magic. And we knew of. Of course, we knew of other card games, like you had Pokemon, you had Yu Gi oh, for instance, to name two popular ones. And those tended to be more kid focused and on the extreme, collector focused for, like, adults who had played it when they were kids. But in Magic, we kind of disdained the Collector and we felt it was too complicated for the kid, even though these other card games were just as big as us and were somehow doing fine with them. And the other thing we thought of is we had to stay true to this one primary format of play, this format of play called standard. And if we did anything that kind of veered from that, we would put in danger, like this highly engaged consumer who was super passionate about the game and was spending a lot of money on the game. And so there was very much this like, hey, we can't move the cheese because we could lose the whole thing. And that was super reinforced by like all, like, the social channels that the product teams listen to, like Reddit and Twitter and our Facebook channels, like our store network, that were very invested in these players. But like, the dichotomy though was, is that these other brands were doing all these other things and they were making a bunch of players happy. They were growing, and in some ways they were more vibrant from Magic. And then we also saw that there was like this thriving secondary market on Magic, and a bunch of people who participated in the secondary market were playing this Other format of play that we knew of called Commander. And Commander was like this super casual format of play. It wasn't about chasing like the latest card tech. It was about making these fun, super large, but one of decks. And it had been growing for years and years, but we'd been barely servicing it. And so you kind of had a choice to make there. That was a tough choice, which was like, okay, do I just keep doing the thing that had kind of made us so successful and had us grown so much over the previous five or six years, even though we were starting to. Even though our growth was starting to flatline? Or do you take some calculated risks and try doing what these other brands were doing and try also building products that maybe this large segment of silent consumers who weren't engaged with you on social channels obviously enjoyed a lot. And we decided to embrace taking some risk. We tried to do it in a smart way. And we called the strategy castles and boats. And we said, okay, we'll continue to service like our core competitive player. That's a castle, and we'll try reinforcing that, but we're going to launch some boats. And those were kind of low risk, highly agile and flexible kind of bets that if they found solid ground somewhere across the ocean, we could maybe establish a new castle on. And if they didn't find anything and were metaphorically lost at sea, we didn't bet the kingdom on it, so to speak. And what we ended up finding is just about every castle we invested in, or, sorry, every boat we invested in, hit paydirt and the growth and Magic's close to $1.1 billion business today. That competitive set is probably the same size as it was in 2016. And all of our growth, all of our growth has come from that social player, that Commander player, and that collector segment. And if we hadn't, and that was just an unlock of mindset, we didn't have to do anything different. We didn't have to fundamentally reinvent the product. We just had to make some products that were germane for them. And then we also, on the negative side, we had to tolerate some static back through those social channels from those highly engaged players who didn't really like things changing and didn't like it when products weren't made just for them. But that's just a calculated risk that you had to make. And it goes back to my mentality, which is like, okay, we never seek to go anger anyone or make anyone have a bad time, but it's a worthy trade off. If you maybe upset 1% of people, but all of a sudden can attract 50% more. And I think that's magic and magic and the unlock that we had.

Darren [00:22:58]:
I'm struck by, as you described, this incredible strategy of sending out sort of trial balloons or boats. A parallel between sort of gameplay and how you described your strategy. Am I onto something there? Is there something about your deep rootedness in games and how you think about business strategy overall?

Chris Cocks [00:23:18]:
Well, I'm a gaming omnivore, so it's probably. No, it's no. There's no accident of why I would use game analogies quite a bit. I try to keep it accessible.

Darren [00:23:28]:
But even the underlying strategy itself, in terms of where to place bets, to take risk, right. To experiment, to be creative, there seems to be a really interesting parallel and maybe a lesson in all of this because there are lots of CEOs running businesses probably have are either closet gamers or just love it. But it's an interesting thing to think about in terms of how you think about overall strategy.

Chris Cocks [00:23:52]:
Yeah, I think maybe it's a little bit too reductive to say that running a business is similar to like running a strategy game because you're dealing with people's lives and there's important regulatory aspects that you have to think about and safety and a whole host of very serious and weighty issues that you have to think through. But when you get past those very important aspects of the role, you really are making a lot of choices that you would make in a kind of classic strategy game. Business is fundamentally about resource allocation, and it's fundamentally about taking your employees and your leaders and applying your best talent to your best opportunities and then also thinking about what the counter moves will be from the people who are competing in the market with you. So from that perspective, it is a lot like playing name a competitor's Game, Settlers of Catan, or the negotiation portion of Monopoly, or pick your favorite game. Yeah, I don't think I'd be able to find a good Scrabble analogy, but I'm defensive Scrabble player, so there's a certain degree of that too.

Darren [00:25:01]:
Something in Dungeons and Dragons that I'm sure you could pull from if you had to. Yeah, I want to pull on the thread that you first articulated, which is this idea of like the singular importance of a leader and these kind of high leverage moves that can fundamentally shift the trajectory of a business and open up new mindsets and possibilities and take us to 2022. Is 2022 is the time where you become CEO of Hasbro and maybe we could just start with what were the circumstances, how were you brought on, and what were you being asked to do, and what did you realize you were being asked to do as you joined?

Chris Cocks [00:25:37]:
Yeah. So I became CEO of Hasbro at the end of February of 2022. The prior CEO, Brian Goldner, who'd been. He was a legend in the toy industry. He'd been CEO for 13 years, maybe longer, maybe 14 years of Hasbro had grown at like, just astronomical growth during his period. He died of complications from colon cancer. He had a relapse. He'd first had it in the mid 20, like, 15, 16 timeframe. And then unfortunately, it came back, and he was planning to retire during that time, but he passed away well before his time and certainly well before the CEO succession process had fully played out. So what was supposed to be a super orderly and one year plus transition became still orderly, but far more truncated. And then what also happened is a couple months before I became CEO, we had become aware that an activist investor had taken a stake in the stock and had started making outreaches to us. And so, like a week or two before I officially started that activist started a proxy campaign and basically wanted to split up the company and put on. He'd owned like 3% of the shares of the stock, and he wanted to put on like 50% of the board. And so I spent my first four months in a proxy battle with this activist, going to proxy advisory firms, talking to all of our investors, and basically learning about investment banks and the arcana of proxy fights through a fire hose very quickly. The benefits of that were I really got to know our investors very well, very quickly. I probably had two or three years worth of investor meetings with our top 2030 holders in the course of three or four months. I also became pretty tight with our board because there was a lot of frequent board interactions as you waged a proxy fight. And ultimately we won. So we won by over a 9010 margin, which was pretty decisive because I think the merits were on our side. I think the negative of that was when you read the CEO for Dummies book, it's, hey, listen for your first five or six months and play your cards as close to the vest as you can so that you can understand the situation. And if you need to make a clean break on strategy, you can, and you can do that thoughtfully. And I was denied that because of the proxy fight. I basically had to go in and defend the company's strategy as opposed to kind of think through the company's Strategy. And I was still thinking through it at the same time, but that it limits your options to a certain degree when you have to be so vocal in the defense of the prior strategy. The other thing that was going on in this time was we were about two and a half years into a big acquisition that we'd made of a company called E1. They were a film and TV studio based out of Canada and the UK. And some aspects of that acquisition were going well. Like we had acquired their animated unit which ran. One of their signature brands was Peppa Pig and Peppa's huge. But there were several aspects of it that were underperforming quite significantly. And that was a lot of the live action film and tv. And that was the biggest acquisition in our history. And I made the tough decision that we had to unwind it. We were two and a half years in. The E1 film and TV team was still spending probably 99, 98% of their content budget on non Hasbro IP. And the whole idea was, is that they would make film and TV shows based on Hasbro IP and then we would monetize it through our significant licensing and product development capabilities. And that just wasn't kind of coming through. And the cultural kind of merge between the two companies, there'd been a fair amount of tissue rejection. So I started up fighting a proxy fight, deciding that we had to unwind a big acquisition. And then we also were coming out of COVID And during the COVID timeframe, the toy industry grew by about 35, 40%. And starting at the end of 2022, we started having a correction of the toy industry back to getting back to normal. So at the end of 2022, like Q4, the toy industry declined by 7, 8%. And then in 2023 it declined again by another 7 or 8%. So I had a couple headwinds that I had to contend with in my first couple years as CEO.

Darren [00:30:33]:
Yeah, that's to put it mildly, I think inheriting a business in the time of a proxy war, an acquisition that needed to be unwound, decline in the toy industry, I think I heard you describe it.

Chris Cocks [00:30:47]:
And taking over for a legend.

Darren [00:30:48]:
And taking over for a legend. Yeah, that's a. I don't know what the game metaphor there is, but you were dealt a rather poor hand in some respects. Of course, an incredible opportunity. I'm really curious though. In some ways it sounds like you were perfectly suited for what was quite a difficult beginning of a CEO. But I think you've referred to it as A turnaround. And I'm always curious to understand the nature of the role of CEO in these turnaround situations. How would you describe the nature of your role, given that dynamic?

Chris Cocks [00:31:20]:
Take everything I said before about what I had to learn at Wizards of the coast and how you had to show up and multiply it by 10. It's just natural. That happens anyway, when you go from being a division leader to being a public company leader, because just the external exposure you have is just immensely higher, no matter how much kind of PR and outreach you do. But then when you're going through a turnaround, especially for a company like Hasbro, which had so many good years of growth and enjoys such favorability among consumers around the world and investors around the world, people, I think, take an outsize interest in our company simply because they have such a vested personal interest in it. If you go into any home in the United States, like, nine out of 10, probably 99 out of 100, have a Hasbro product in there. If you ask someone to name, like, 10 of their favorite memories from childhood, probably at least two of them have to do with, like, a Hasbro product. Whether it's playing a board game with your family or a treasured toy or a gift that you got for Christmas or a birthday, we have a big part of. We have an outsized portion of people's lives. So from that perspective, there's an awful lot of responsibility that kind of rests on your shoulders. You want to make sure that our mission is to spread joy and community through the world, and you have to be like the citizen in chief of that. You have to represent that and make sure that comes through in everything that you do. On the flip side, you also have to make some very hard calls in the context of a turnaround. You have to look very soberly at what you think the market's going to do. You have to look very soberly at the cost structure you have and the assumptions you had in a prior plan versus what the likely outcomes are going to be in a new reality. And you have to make a whole host of tough decisions, and we've had to make those. We're in the process of taking out $750 million of costs from our overhead, which is a large percentage of our overhead. We've had to reduce our total headcount. When I started, our total headcount was probably in the neighborhood of 6,500. Our total headcount will probably exit the year under 5,000. And then you have to figure out where you're going to invest for growth. And you have to do that in the context of, hey, I'm in a whole bunch of segments. I'm in entertainment, I'm in licensing. I'm in games. I'm in video games, I'm in toys. And what's the right place to place Our place our key leaders, place our best talent and place our capital bets. And a lot of that is just standard with the job. But I think in a turnaround, you really have to think carefully, and sometimes you have to move quite quickly to make sure you're getting ahead of where the market's taking you. And for the first year or two, I would say we were behind the eight ball. We were trying to get out in front of an acquisition which hadn't worked out well. We were trying to get out in front of a toy market which was declining faster than I think anyone anticipated. But over the last 12 months, I think you're seeing that we're getting in front of that turnaround, and we're starting to see daylight at the end of that tunnel. Our cost structure is getting where it needs to be. Our toy business is. It's not growing yet, but it's starting to stabilize. Our games business is on fire. Our licensing business and the bets we made there, I think we're very prescient and are driving a lot of growth for us. And so the nice part of this is, like, the stock market reacts, the investors react, and the teams that work for you, they've been going through the grinder trying to drive this turnaround, and they're starting to see daylight as well. And that feels good.

Darren [00:35:13]:
Yeah. But I imagine a really tough 12 to 18 months for everyone at the company, you having to hold this responsibility. And I'm curious what it is that motivated you, that gave you the strength to persist and get to the other side? I know you're not obviously any. You were never all the way there, but get through what was undeniably a hard period.

Chris Cocks [00:35:37]:
Well, I mean, for me, there are three things. The first thing is you just want to win. Like, I've played sports my whole life. I've played games my whole life. I'm the CEO of the biggest publicly traded toy and game company in the world. Of course I want to win. I'm an unapologetic capitalist. So I want to see us thrive. I want to see us get to the other side. And there's a lot of intrinsic energy that comes from that. I think the second thing is this notion of legacy. Hasbro celebrated its 100th anniversary last year. And it's regularly seen ups and downs in its business. It's just the nature of kind of an entertainment business that there'll be cyclicality, that you'll be exposed to some categories and some segments that are going to be in growth phases and others that aren't. And when you've been around for 100 years as a company, and really we've been around for more like 150 years because Milton Bradley started making board games back in the 1860s, you have this kind of like long. It causes you to have a longer view than a company that's maybe been around 20 or 30 years. And it causes you to kind of study the history of it and appreciate that there will be a tomorrow and it's always darkest before the dawn, so to speak. And I think the last thing is fundamentally it's the nature of what we do. And you know, when I have a hard day and there are more than my fair share of them, particularly when you're going through a turnaround, I'll go to a Target or I'll go to a Walmart and I will just kind of shop the toy aisle. And you get a lot of energy by seeing like a five year old kind of light up when they go into the toy aisle picking out a birthday gift or talking to their mom or dad about what they want for a holiday. You see a lot of you get that when you go to a movie premiere and you see people delighted by the story that you're telling. You see that by reading the reviews of a game that really lit up someone's week or lit up someone's month playing and connected them together with other people. And ultimately, at the end of the day, it's not about the winning, it's not about the legacy. Those are important. It's about ultimately bringing a smile to people's face and giving some joy to people. And that's what really gets you through it.

Darren [00:38:07]:
Well, you obviously made some tough but very right calls over the past couple years that brought a lot of joy and a lot of smiles to many people's faces. I imagine there were some things you got wrong or maybe would have done differently. And I'm curious to hear, like what were the lessons? What would you have done differently? Were you, you know, were you given the opportunity to do it again?

Chris Cocks [00:38:27]:
Oh gosh, so many. A couple things. Every CEO I've ever met, when they look back, they'd say they'd always would have gone faster, probably would have gone faster and slower. When I Started, I was a brand new CEO. I'd never been a CEO of a public company before. My board was very concerned about continuity and they really wanted me to preserve like a lot of members of the prior management team and today only one of them is still with the company. And it's not because they were bad people. It's not because, like they weren't good at their jobs. It's just you need to have a management team that has cohesion of vision and is perfectly aligned about which direction they want the train to go. And I would have been faster and more decisive at moving that management team out. It took me about 18 to 24 months to move them out. Really should have taken three to six months. And I think that would have been a real difference maker. Kind of going back to my prior example with wizards. And then the thing I would have gone slower on is, and this kind of goes back to my personality, I wanted to get out quickly with a declaration of what my strategy was, especially after going through like proxy battle and making the decision to sell E1. And in retrospect, especially after going through a proxy fight that got nasty in some respects and there was a bit of mud flinging. If I could go back in time, I would have counseled myself, hey, hold off on doing an investor day. Let this go back into the distance. No one's going to blame you if you take an extra six months. And I think that would have served me better. Many of the themes that we delivered in our investor day in October, which was eight, nine months after I started, they remain true today. We're still focused on games, we're still focused on licensing. But it would have given me an opportunity to kind of see what the post Covid world looked like in toys. I think it would have allowed us to get a little further along in the sales process for E1. And I think I just would have had a more cohesive message with maybe a little more quiescent time. Between the end of the proxy battle and the declaration of the new strategy, which I think would have served us well.

Darren [00:40:52]:
Yeah, we spent a bunch of our time looking backwards. I wanted to point forward just for a few minutes and have you think about what is the future for this company? And maybe a deeper question. What is the future of play as you see it? And then what does that mean for you as a leader?

Chris Cocks [00:41:12]:
Oh, gosh. Well, maybe I'll start with the future of Play first, because I think that dictates where we take the company. Play is only going to become a more and more important part of people's lives that endures for a longer and longer portion of their lives. I was born in 1973. I certainly think the expectation was in my generation was that around 10 or 11 or 12, you put down playthings and yeah, you know, maybe you play with like the Super Nintendo or maybe you play with like your Sega now and then, but you're done with toys. And I think our generation, like Gen X, was the first generation that says, no, I kind of like these things and I want to keep collecting them and I want to keep playing with them. And a whole bunch of creators. I think Tim Burton was like a seminal creator with like the Batman series, which is like, no, comic books aren't just for kids, they're for everyone. And I think that's only strengthened over time. When you talk to Millennials, when you talk to Gen Z, their favorite brands are the brands that they play with and that they engage with and have been since they were little kids. And the average age of collectors just continues to get older. The average age of people who play just continues to get older. The fastest growing demographic of video Gamers today are 35 to 55 year olds, not 2 to 23 year olds. And I just think that's going to become a bigger and bigger and more and more dominant portion of the industry of play, whether it's toys, whether it's games, whether it's video games. And that to me, is entirely informing Hasbro's strategy. We already are lucky in that greater than 60% of our sales is generated by consumers, 13 plus. And I just see that becoming a bigger and bigger portion for us over time. That doesn't mean that we're going to stop making preschool toys or that we're going to stop making toys, the classic toys for kids, because they're like our first handshake. But increasingly, I think when people think of Hasbro, they're going to think about us as an ageless company that has relevance in what I collect now and what I play with now, as opposed to a kid's company that I remember fondly from when I'm a kid or that I buy for my own children. And I think that'll have a pretty big ramification for us. And then in terms of me, I think that just makes it even more important in terms of picking the right leaders with the right mindset who are connected to that audience. You have to pick people who have an open mind about where their brands could go. I can't talk too much about our product portfolio. But a classic toy industry professional would look at a brand like GI Joe and say, well, that has to be A rated G IP because our core target customer is kids 4, 5 and 6. A growth, mindset oriented leader of that brand would say, well, hey, GI Joe is actually one of our fastest growing brands and the average age of the consumer for it is 35 to 45. And what I really need to be making is I need to be making products with the tone and manner that appeals to a 40 year old rather than a 4 year old. And you'll make drastically different decisions based on that. And so I think as a leader, you have to pick people who can think that way and think about where the hockey puck is going as opposed to where the hockey puck has been.

Darren [00:44:51]:
So as we start to wrap up here, I wanted to give you an opportunity to add anything. Something that we may not have spoken about that's important to you or something that you may just want to synthesize or summarize that we have covered.

Chris Cocks [00:45:06]:
Oh, gosh. I suppose I would just. It might sound self serving as the person who's in charge of a toy and game company, but I would tell everyone who's listening, regardless of how serious they are or how important their job is, take some time to play. It'll make you feel better. It'll help you make some friends. It'll help you connect with your family in a way that maybe you didn't expect. And there's all kinds of different ways to play. You could play wordle on your phone if you just want to do like a little brain teaser. You could play Scrabble with your spouse. You could go really bold and try out some silly voices and roll some dice and try role playing with D and D. There's all kinds of wonderful opportunities. And speaking as someone who's made more best friends in the last 10 years, I had in the prior 20 years since college. Play is such a wonderful part of your life. Always embrace it and don't forget about it.

Darren [00:46:01]:
What an incredible invitation. I hope people are listening. I hope they take you up on it. And I want to thank you, Chris, for a really extraordinary conversation. We covered a lot of ground in a short period of time. So thank you very much.

Chris Cocks [00:46:14]:
Thanks, Darren.

Darren [00:46:15]:
Yeah, talk soon. That really was a masterful illustration of the ability of a CEO, through decisive, courageous, and oftentimes contrarian choices, to unlock mindsets and alter the trajectory of a company's performance. I hope you enjoyed the conversation as much as I did. And I look forward. Forward to being with you on the next episode of one of one. Until then, I hope you live and lead with courage, wisdom, and above all, with love.

One of One is produced by Erica Gerard and Podkit Productions. Music by John LaSala.

Listen Here

In this episode of “One of One,” Darren chats with Laela Sturdy, Managing Partner at CapitalG. Laela talks about her unique leadership style that combines seriousness with just the right amount of playfulness to keep her team energized and on point. She reflects on the pivotal role of community, the value of enduring friendships, and the importance of self-awareness in navigating the demands of a thriving career while maintaining a full and fulfilling family life. Additionally, Laela offers profound insights on managing anxiety, upholding ambitious standards, and leveraging ‘body intelligence’ as a transformative tool in effective leadership.

Timestamped Overview

00:00 CapitalG invests in growth-stage tech companies.

03:34 Lifelong passion for teams and leadership development.

07:04 Fun, relationships, leadership, team culture, genuine care.

10:26 Meetings can be fun with personal connections.

13:24 Relationships with founders are the most rewarding part.

17:21 Loving immigrant family, financial struggles, adventurous spirit.

21:19 Introspection reveals strengths as shadows needing balance.

24:30 Balancing risk, intellect, decision-making in venture.

28:11 Confronting hard situations remains challenging for me.

31:57 Great leaders have distinct, inspiring attributes.

36:55 Parenting teaches humility, unconditional love, self-awareness.

39:15 Friendships are crucial for support and growth.

Full Transcript

Darren [00:00:01]:
Hi everyone. Welcome back to another episode of One of One. I’m your host, Darren Gold, CEO of the Trium Group. My guest today is Laela Sturdy, Managing partner of CapitalG, Alphabet’s independent growth fund. Laela is one of the few women to lead an established multibillion dollar venture firm, leading investments in companies like Stripe, Duolingo, Gusto and uipath. In this conversation, we talk about Laela’s childhood, the role that being captain of the Harvard women’s basketball team played in her leadership, and the importance of fun and joy in creating true followership. Laela brings us into the unique way she leads a CapitalG, including how to have fun in an investment committee meeting and how she has been able to develop uniquely deep relationships with some of the most iconic founders of the last decade. Please enjoy my incredible conversation with Laela Sturdy. Laela, I am so excited to be in this conversation with you. Thank you so much for being here, Darren.

Laela [00:01:11]:
It’s a pleasure. I am so excited to see you and looking forward to the conversation.

Darren [00:01:16]:
Yeah, me too. Me too. I thought we’d start with present day and your role as Managing Partner CEO of CapitalG. For those of our listeners who don’t know who CapitalG is, can you tell us a little bit about CapitalG and what your role is there?

Laela [00:01:30]:
Absolutely. So CapitalG is a growth investment fund. We invest in growth stage technology companies and we are backed by Alphabet and Google. Alphabet and Google are a single lp, but we are financial investors, so we invest for financial return in generational technology companies. And the unique aspect of our firm is that because Alphabet and Google are a single lp, we can take advantage of the amazing advisors and network and data and perspectives inside of Google and Alphabet to inform our investment decisions and more importantly, to help our companies post investment to really scale and grow. And we tend to take quite sizable positions. We typically invest 50 to 200 million in each company and partner for the long haul. So we try to find them in the early growth stage when they’re Series B or C and invest a significant amount of capital and work with those companies over many of them. It’s been a decade plus now and my role as managing partner, I’ve been with the firm almost since we started and was a general partner for a long time. So I led a lot of our investments in companies like UiPath and Stripe Duolingo. And then about 18 months ago I took over the role as Managing Partner CEO. So now I’m in charge of the firm’s overall strategy, recruiting people, the team, building out our partnership, and just continuing to do what we love, which is find amazing companies and be great partners to them and return best in class returns to Google and Alphabet.

Darren [00:03:02]:
You’re in this amazing sort of dual role in some ways, sort of like I am where you’re running and leading a firm, but you’re also, you’ve got a front row seat to some amazing founders and CEOs. And so you’ve been able to get to know and observe and learn from some incredible CEOs. And I want to dive into both of those things. But I want to start with you as a leader. And a question I was thinking about. Was there a moment in time when you first discovered, hey, I’ve got something special, something that feels like I should be leading something, and if so, when and where were you when that happened?

Laela [00:03:34]:
Yeah, well, I’ve always loved teams. I mean, I come from a big family. I have three sisters, so I have one of four kids. We always, I was always organizing games on my block growing up and I’ve always had a lot of energy, so wanted to get out there and do physical activities and mental activities and have fun. And my first love was basketball. So I started, I fell in love with basketball when I was at about third grade and I was lucky enough to play all the way up through college basketball. So I played on teams my whole life. And that was probably, it was pretty early on in those experiences, I think, that I didn’t know what it was called, but I learned about leadership. I knew what it meant to think about my own performance on the court and the type of people that I wanted to be on teams with and how to lead by example, how to push and be pushed, how to get up after adversity. So I would say early on, and I was captain of my high school team, I was captain of my college team. So I think I naturally gravitated towards some of those leadership positions in sports. And I think that’s helped me a great deal in business as well as I’ve. Early on in my career I started managing people. I always loved managing people and I just saw the opportunity that leadership can have in just making my own life richer. And I love seeing other people around me thrive and grow. And I have that interest in people and I have that interest in teams winning. So I think that’s been a lot of what’s driven me in my past.

Darren [00:05:02]:
So you mentioned getting the best out of yourself and getting the best out of others. So what is it about you? Like, what’s the quality that makes you good at doing that?

Laela [00:05:11]:
I think there’s a number of aspects. I think one of them is self awareness. I think I’ve always, you know, I’ve always been a seeker. Since I was a little kid. I’ve always had a part of me that has wanted to understand myself, wanted to understand the world, like, what’s going on around me, why to what makes clocks tick and why do I tick. And I think that level of sort of introspection and awareness and willingness to change and desire to grow is something that I think is part of my core essence. I’ve been to a lot of places, and I think as a kid, I mean, I was born in Jamaica. My parents immigrated to the States when I was a little kid. And so I was always used to a lot of different cultures, different experiences. And I started off my career in the nonprofit sector, worked Google as an operator, moved to investing. So I’ve always been very driven by continuous learning and very open to change and newness. And I think that that’s just a part of me that I would say I really know about myself and probably my friends and colleagues would say about me as well. And I think it’s something that’s made venture and technology a good fit for me. Honestly, there’s not many industries that the pace of change is anything close to technology and then venture. The nature of the variety and the newness has been a really good fit for my personality and the things I love to do.

Darren [00:06:38]:
When I speak to people who know you, there’s something about their attraction. They want to follow you. And it’s such an important aspect of leadership, is followership. And so I’m just. I’m also, like, thinking about, okay, you were captain of the women’s basketball team at Harvard. I mean, that’s pretty amazing. And I just like to, like, bring us into the locker room, the court. Who is Laela in that situation? Why are people attracted to you? Why are they following you?

Laela [00:07:04]:
Yeah, well, thanks for saying that, Darren. Okay, well, the inside scoop is a core value of mine, is I like to have fun. I definitely think this is really important. And I love laughing. I love. I try to take myself not too seriously. I love other people that don’t take themselves too seriously. They take the task seriously. Basketball was a good example to explain that. It’s like, I really cared about winning. My teammates really cared about winning. But we also had so much fun in the locker room. I mean, we teased each other. We were able to just get all of this expression and energy and life force out into the world and with each other. And I think that helped propel the intensity that we could bring on the basketball court and the sort of unity. So I think that’s a core aspect of what I have just brought to other aspects of leadership as well, because it’s also just very much who I am. I think you hear I try to run, for example, the funniest investment committee in Silicon Valley within our investment team. And I don’t really try. I just am myself. And I want to have fun doing what I’m doing. I care deeply about what I’m doing, and I have a very serious side to myself. The role is very serious. The world is very serious, but the world is also very joyful and fun. So I think that’s one aspect about me that I think drives followership. Another aspect is that I really do care about people. I mean, I really. Relationships are the most important thing to me. They always have been my family, my friends, growing up, and that’s continued to be the most important thing in my life, in my professional career. So I’m loyal to people, I’m honest with them, and I really want to see them succeed. And I love being a leader of a venture capital firm for that reason, because we’re so lucky that we can recruit such exceptional talent. Because people want to work in venture, they want to work in tech. It’s a very rewarding intellectual career, interpersonal career. Financially, there are so many reasons to want to work here. And I see it as exciting to also build the best culture where we have the best team and we support one another and we bring out the best in each other. And so I try to lead by example for the people that work for me. I do really deeply care about them and hopefully it shows. And I think that contributes to followership and enables us to really build the best team out there.

Darren [00:09:38]:
Okay, so first of all, you’ve raised the bar for this conversation because we better have some fun doing it. All right, so we’re going to be serious and playful, but it is.

Laela [00:09:47]:
We’ll insert jokes after if we can’t do it real time.

Darren [00:09:50]:
Yes, we’ll be careful. But this polarity of being serious and playful and integrating the two, it just. It’s really unique and I’m so glad we touched on it. I’d also love to like. So I can see that on the basketball court. Right. I can almost imagine you with your teammates dancing and having fun. And what I loved about it was like bringing life energy out. I mean, that is the source of all creation and getting anything Good, Accomplished. Right. Is energy. How does that show up in an investment committee meeting at CapitalG without getting into anything confidential, like what is, what does that look like? What’s the form of that?

Laela [00:10:26]:
Yeah, well, I think it’s just the idea that sort of any meeting can be fun. And to me it’s like, what are the aspects that make it fun? First of all, it’s having that personal connection with walking with the people in the room. So when I walk in a room and again, this isn’t something I pre rehearse or really even thought about. But naturally I’m going to say, hey, how was your weekend? What did you do? I try to keep up with the lives of the people on my team. And the same, I try to share what’s going on with me, make a joke about the reality of life with three young children, which is they’re getting a bit older now, but certainly when they were really little, it was a race to the office Monday morning to get a bit of a break and to share snippets and just interact with people on a really personal basis. I think another aspect of making an investment committee real and connected and both fun and meaningful also is being able to share with humility the lessons we’ve learned along the way. So that’s something that I really try to model for my team and some of the other great investors. Darren Eugene France, my longtime partner here, amazing person, amazing investor, incredible track record and he and I can easily integrate as we’re talking about a company currently, the mistakes we made, which are as important, if not more important than the successes that we’ve had on things we’ve missed or things we’ve got wrong and do it in a self deprecating way or way that that can add some lightness to it. So the newer team members who maybe are making this, this might be the first deal they’re bringing to investment committee and the seriousness with which they feel can’t be overestimated. Those times when you’re an ambitious person and you feel like this matters so much that you get it right to see other people around you modeling with the same level of rigor. Yeah, we’re super serious. We’re gonna ask you all the really hard questions about this investment. We’re gonna push on your numbers, we’re gonna push on your thinking, but we’re also gonna bring some hu to what we missed and some light on what we got right along the way and just relax the conversation a little bit so it’s as rigorous. But anxiety and Individual tension. So that would be an example to me on how you try to integrate it all.

Darren [00:12:43]:
Yeah, you’re really bringing it to life. And the picture of how you’re creating followership is coming to life. And I want to pull on a couple more threads, but I do want to go on the record and just say, yes, Jean France is an amazing human being.

Laela [00:12:53]:
Jean France fan club, right here.

Darren [00:12:54]:
I’ll put that out there and on the air for sure. I’m also curious. Some of the people that sing your praises the most are these incredible founders that you’ve had the privilege and opportunity to partner with. And I’m wondering how you are in those situations, because you’re building relationship. I imagine you’re bringing some playfulness into those in a way that helps you cement relationships. That gives you a bit of an edge in a pretty competitive investing world.

Laela [00:13:24]:
Yeah. So that my relationships with the founders that I’ve worked with has been one of the most rewarding things about working in venture the last 10 plus years. So obviously the relationships with my team and to me, the founders are part of that team. And so it’s incredibly important that those relationships are deep and authentic and that we’re both, we’re invested in each other personally, professionally, and that I view my role as an investor and a board member to be incredibly supportive to the founder and to the management team. But to me, support also means challenge. It means helping. Helping bring the hard questions, push and voice what I see as concerns or opportunities. And so that has been super rewarding because founders and CEOs of growth stage companies have incredibly challenging jobs. I mean, these men and women are like, we’re working nonstop. Their businesses are scaling so rapidly. Because these are the lucky ones. I mean, we’re lucky at CapitalG. We get to invest in the very best companies and we see the privilege and the opportunity there. And what that means, extraordinary scaling challenges, building the teams, strategic opportunities. You’re starting to way beyond early startup and product market fit. Now you’re taking on the big incumbents in your industry and trying to recruit the very best talent in the world. So these are sort of enormous challenges that are nonstop. And so one of the ways that I’ve tried to be supportive is first of all to be really let my founders know how much I care about them. These are people that have really hard jobs and don’t always have a ton of emotional support and a ton of people that say, hey, I see you, I see all you’re doing and all that you’re balancing. And I’M appreciative of that and I think you’re doing a fantastic job. And here are some of the other things that I think you need to watch out for or pay attention to. So I think what I’ve loved is I care about deep and real relationships. And so if I’m investing my professional and my, therefore my life force into these relationships, I’ll bring the same thing that I bring in any relationship I have, which is that full energy and care and transparency. And it’s been awesome. I mean, I feel like that to feel even just to be a small part of a board member of some of these amazing success stories and to know the history of it have been there, like through the hard times, especially the times we thought, hey, we actually might run out of money or we actually might get crushed by this big competitive or shoot, we can’t recruit the level of talent we need in some C level spot. And then to get through that and come on the other side, it’s just the joy of what we get to do in growth stage investing, which is that mix of like reality with the impossible. But you get front row seats to stuff that really shouldn’t have happened. And that’s what’s beautiful about entrepreneurship and creation. And when you know the people and you care about them and you played some small role in supporting them, it’s really, it’s addictive. It’s really fun and addictive. And the time has flown by in the decade, classic CapitalG. For that.

Darren [00:16:35]:
Reason you’ve mentioned relationships now and the depth of relationships that’s so important to you and makes you effective and so important to you as a person and as a leader. I’ve been on the receiving end of that desire to get to know people at a deep level that you have. And I want to sort of turn the tables a little bit bit because you mentioned a unique childhood, a childhood being born in Jamaica, coming to the States. I’m a big believer that our childhood, our formative experiences shape who we wind up being. And a lot of those things really serve us and a lot of those things can get in our way. So I’m interested to get a sense of what shaped you and how you’ve begun to through your own self awareness, understand that.

Laela [00:17:16]:
Yeah, absolutely. Oh, gosh. So many things. Darren, how much time do you have here?

Darren [00:17:20]:
Much time as you want.

Laela [00:17:21]:
Yeah, and I might need a pillow and a couch, but so many things. I mean, I love my parents and I was fortunate enough to have two parents that loved me and my sisters so much. Yeah. And they were both immigrants coming with their own story. So I think what I’ve learned about my childhood, I know in the early years, there was not a lot of financial security in my family. So my dad was a bit in and out of different jobs. My mom left. My mom grew up in England. Working class England. She left home when she was 16 and got a job. Never asked her once, mom, did you ever think of going to university? And she said, just women and people with our economic means didn’t even think of it then. So, amazingly, side note, my mom put herself back through college when we were little. When my sister entered kindergarten, she got a scholarship to community college and got a math degree. So she is one of my heroes. So they were scrappy, hardworking, but not always a sense of security. So I remember early, some of the patterns that shaped me is thinking as a pretty young, I took on a pretty responsible edge. I was like, okay, I’m going to help my parents. I’m going to help make sure my family’s okay. I’m going to make sure we have financial security. And so I remember from a very young age starting to pay attention, like, looking up and saying, okay, like, how do schools work? And what do I need to do to get good grades, to get scholarships? And does my mom seem stressed? And what do I need to do to take care of her? So I definitely developed some. I think I later read in a psychology book somewhere, parentified child or some term like that. Darren, you can help me understand fully what that is later. But let’s say some of it definitely resonated. And then I started to see, oh, wow, this gives. It gives me a lot of rewards in the world out there as well. Like, hey, turns out, getting good grades in school, teachers like you, and all of that. So I was definitely one of those kids that sort of followed the rules, worked hard, tried to take care of things a little bit, probably younger than I should have. And I think then I. Other side of me, Darren. I remember when we were talking once about the parts work and the Walt Whitman quote, I am multitudes. I definitely can relate to that because I had a huge sort of rebel part of me as well. And that was, I think, a little bit more of my dreamer part. I started traveling by myself quite young. Like when I was about 18, I decided I wanted to go to West Africa. I went to Senegal and the Gambia. A couple years later, I went to Kenya and Uganda and backpacked all through Africa. I backpacked through Asia, always traveling solo. So or not always, but a lot of times for long periods traveling solo. So I had this other part of me that was sort of very adventurous, that was quite introspective and wanted to see the world, wanted to understand things and kind of created space away from some of that responsibility and some of the kind of achievement cultures to reflect a little bit more. So those are two threads of the many that I think influenced me. But overall some of that hardship in childhood was matched by like a very loving family, really dedicated to relationships. And so I think that’s a lot of the thread that also has, you know, is a huge part of who I am and shapes some of our earlier conversation as well.

Darren [00:20:44]:
Yeah, I think it’s such an important part of leadership is to understand people at that level. I think we can cast off these sort of childhood experiences as being indulgent. I think they’re so rich and so important. So I hear your story about somebody who had to grow up really responsible and self sufficient with a little bit of financial insecurity. And I share many of those things. And what we learn about ourselves is that those things can massively serve us. I’m also curious, where have those, some of those things had some shadow gotten in your way and how have you managed to address those?

Laela [00:21:19]:
Yeah, so well, Darren, thanks to people like you and Katherine and all the amazing folks at Trium and friends that are interested in this type of work. Yeah, I have done a lot of introspection around those questions and I definitely am one of those people that believe your strength and your shadows are kind of the same thing. Like how do you look and sort of say thank you for how that, that served me and then how is it holding you back and where do I need to examine? So I’d say some of the shadows of that. I mean the hyper responsible one who sees a challenge and wants to take it on and take care of it. There’s obvious challenges to that, around not needing to at times and stepping back and letting others step up and sharing some of that responsibility and leadership. I think there’s. There’s a little bit of an under. I think a childhood anxiety that comes from that too. When you were young and you had to sort of take care of a lot of things. I think I am lucky that I have something deep in me that is playful and lighthearted because I think that is a. Bringing that responsible, more anxious one is a sort of counterbalance to that. So there are times that sometimes when the responsible one takes over, I do need to just, just be A little less anxious overall, like it doesn’t matter too much. There’s a, I think a critic, a high standards part in there. That again I think has been really helpful to me. That gets you through working, consulting high pressure tech, just the world that we’re in but at times can drive a team too hard or feel like we’re all in a rat race where nothing is good enough. So I really try to pay attention to the shadow side of that and myself and just the cultures that we operate in at CapitalG and beyond of just a high performance culture to encourage myself and others to make sure we’re celebrating and enjoying the ride as much as we should because it’s, it’s an amazing opportunity that we have every day and the work is so rewarding and fun and interesting that I think, you know, really awareness around these shadows to fully live in the presence and fully live in all that abundance is hard to do and, but certainly something that I’m focused on.

Darren [00:23:36]:
Yeah, you mentioned self awareness and growth and it’s pretty evident how that shows up for you and how you lead through a lot of complexity both leading yourself and leading others. And I wanted to move us back to the current moment at CapitalG. You have this incredible responsibility to lead what I think is one of the best venture firms in the world. And I’m curious to understand. You’ve described some of your style and philosophy, particularly around seriousness and playfulness, your or the other polarity of challenge and support, particularly in your work with founders. I’m sure that extends to your team as well. What is the kind of X factor? If there was something maybe a little bit different or additive that you would add that makes you the obvious person, which I think you are, to lead this firm. What is that? And then I’m also interested in the thing you’re working on the most and the thing that most challenges you in this role as CEO because it’s such a unique, demanding role.

Laela [00:24:30]:
Yeah, good questions, Darren. So you know the other polarity that’s coming to mind or the other important attribute I think of leading a venture firm in particular as opposed to even just as an operator for a long time. So I’ve led lots of different teams across like general management, CEO, sales, marketing strategy, all that kind of stuff. What I think is particularly important in venture is that you have these really smart, really high achieving, ambitious people that understand technology, can analyze data back, forward and in all directions and so incredible intellect, incredible hustle. And then at the end of the day, the most important thing that we’re doing is deciding yes or no on an investment. And that is extraordinarily hard, especially when you’re investing these sums of capital that we’re investing. So we’re investing 50 to 150 million in each of these investment decisions. That feels like that’s an enormous, that’s the seriousness of what we do. It’s a big capital, a big bet on that partnership. And it’s a unique blend that you have to say yes or to say no to these decisions because it’s a binary decision. But you have so many different data points. And so you have to find and coach people into being able to deal with this overload and complexity, to not be like analysis paralysis or overloaded by their own intellect, to be able to focus on the most important factors on the sort of intellectual side and the data side. So prioritize what are the most important factors to sort of say yes or no and then be able to balance their sense of intuition and risk. Because nothing is certain. Like if it was certain, we’d be investing in 5% growers, companies at the end of their life. Like you’re investing by nature. There’s a lot of risk in the pace of change in technology and the stage of company that we’re investing in. And so that’s another sort of, I think really important part of leadership in venture is being able to model and coach people towards confidence in their own decisions in that way. But then also to have guardrails where everybody shouldn’t be confident, if that makes sense. Some people might not be ready to make those type of decisions. Or you, the, the, you have to build processes in the firm so that there’s, there’s good checks and balances on how people are assessing risk and sort of making those decisions and then modeling for these high achievement. Often people that are, are very achievement oriented how they deal with failure and mistakes. Because when you’re in a risk business, you’re going to have a lot of those. And so that is another just aspect of leadership that I, that I spend quite a lot of time thinking about. Because I think it’s incredibly important as we build this firm that we take the right level of risk and that we’re balancing that final decision making in the right way, both individually and systematically across the firm. And then we mentor people to be able to get there and we find people that have that courage, that have that intuition along with the intellect to drive rigor in the right decisions.

Darren [00:27:46]:
So I’m hearing you do that particularly well. I’m Imagining no one’s perfect at it. And your ability to both demand that coach people and identify people with that talent is a strength of yours.

Laela [00:27:58]:
Oh, I’m certainly focused on it. Yeah. So let’s. We’ll say it’s a strength.

Darren [00:28:02]:
I’m going to say it’s a strength.

Laela [00:28:04]:
Thanks, Darren.

Darren [00:28:05]:
And what about the thing you’re working on? What is it that gets in your way that you’re challenged by, particularly in the role of leading?

Laela [00:28:11]:
Yeah. So even as I say I do it and I do it giving the hard message and confronting hard situations, whether that’s thinking this week, I won’t go into the specifics, but a difficult situation with a founder where I think some misunderstandings with the board this or that, I still, I’m such a people person, I still get a clench in my gut when I know someone’s upset, particularly if I think they there’s a misunderstanding or something. And somehow Darren, I always get volunteered to be the board representative to go and have these difficult conversations. So this week was no exception. My lovely fellow board members. So, you know, it’s still hard, right? It’s still hard to go in there and confront the issues head on. And I do it and I certainly talk about to others coaching them to do it. But I notice still in my own body, in my own experience sense that it’s still hard. It’s still hard to take the hardest issues head on, to risk being misunderstood, particularly that one for me is a, you know, is a hook. And so something I’m working on is to look forward to being misunderstood, to look forward to just the discomfort of that, to notice it more. And I know as I do that I will keep leaning into the hard and the riskier and model it for myself and others more and more beyond.

Darren [00:29:40]:
Your own self awareness of what’s getting in the way of being like really skillful. Right at that. And I imagine you already are. There’s something else you mentioned which was I noticed it in my body and very few CEOs I hear use that language. And I think in large part because we’re as a generalization, disembodied. So I want to just touch on that because I think it’s such an important aspect of leadership that doesn’t get talked frequently enough about. And so tell me why you said that and what that actually means for you as you think about your own leadership.

Laela [00:30:12]:
You needed more basketball playing CEOs, Darren. See, we’ve noticed the importance of the body for a long time. I mean, that is kidding Aside, that is, yeah, I’ve. That’s been part of the work Katherine from Triumph has helped me so much with and that I’ve done my own sort of inquiry around is understanding all the different forms of intelligence, the mind, the body, the heart and just noticing it more and using it to inform how you lead in any situation. So I think it’s interesting. I agree most CEOs would never mention paying attention to body intelligence, but when you talk to athletes or many other leaders in sort of peak performance or peak flow oriented achievement descriptions of themselves or their experience, like the body is included so often. So it’s. I’m by no expert in this. I’m still in the same delighted boardrooms with everybody else. But it is certainly something that I enjoy learning more about and sort of paying attention to. And as I think about my own aspirations to keep growing as a leader, I’ll take any forms of intelligence I could get. So to help along the way.

Darren [00:31:24]:
It’s such an enormous body of intelligence or field of intelligence that we neglect and I love the fact that you mentioned, you know, high performance athletes and theater performers and people that really understand how important it is to look at the body first because it gives you so many different signals and I think such an important part of leadership. As you think about great leaders, leaders that you’ve worked with, leaders that you admire, people that are no longer living. Is there a particular leader that inspires you that you look to and say gosh, that’s a deep source of inspiration for me.

Laela [00:31:57]:
Gosh, I have so many. Because I also think that great leaders, so many great leaders. In my experience there’s something that’s so spiky about them. There’s one attribute that you’re like, oh my goodness. You know, I think of the CEOs that I’ve worked with, like Daniel Dines at UiPath, he had so he has so much courage. Like I really looked at him as someone that he made some incredibly courageous decisions and bets that I learned so much from. Luis von Ahn at Duolingo is the best product intuition and sort of user intuition of any inventor or creator that I’ve worked with. And to see him apply that in a field as important as learning and his sort of obsession with the mission of it as well. Another incredibly spiky out like I think standard deviations, multiple standard deviations away difference from so many other people is that mission driven element that he had to see those two things firsthand. Drive the creation of Duolingo has just been incredible. My College basketball coach, one of the funniest people I’ve ever met. She first showed me, like, you can do this and laugh. You can take yourself a little less seriously. And I didn’t know what it was at the time. I just knew I wanted to be there. And when I reflect back, I think, okay, one of the reasons I wanted to be there is because it was so much fun. And it wasn’t just. Just us as teammates having fun. She was having fun with us. So it is. It’s hard for me to pick one thing. I mentioned my mom earlier, like, back of my mom going back to community college, like this immigrant, all these kids, economic uncertainty. She enrolls herself and gets a scholarship, Broward Community College, study math. And she was. Was on her way. She ended up getting a master’s degree. She would have done a PhD, but she got pregnant and had my little sister, which. Love you, Lex. Even better. So there’s so many people that I look to and say, wow, thank you for being an inspiration. I think I often say when I’m leading my team on different things, let’s get the bunny that’s. Or whatever, the chasing, you know, and races they have. Whoever you’re chasing, they’re not going to complete the whole race. But you want someone to chase. And I often think about attributes in that way. None of us can be all of it. But how do we chase? How do we try to have the courage of Daniel with the grit of my mom with.

Darren [00:34:27]:
Yeah, yeah.

Laela [00:34:28]:
And so that’s how I’ve thought about leadership inspiration for myself.

Darren [00:34:34]:
Amazing. Yeah. Let’s go to playfulness. And I’m also thinking about you as a mom, as a wife, as a sister, as a friend. And I wanted to maybe just have you bring us into your personal life. Like, what do you do to nurture this need for playfulness and joy in your life?

Laela [00:34:52]:
Yeah, I want to just go for it. I play a lot and I laugh a lot. So I. My wife and I like to play pickleball, so we’ve gotten on that train. My wife’s a musician, singer, songwriter, so she has always, I feel so grateful, brought so much music and artistic and creative energy and community into our lives. So we’re often playing music or playing games. We are outside a lot. I mean, nature is an incredibly important part of my life. I’ve, like, made a lot of decisions to be. To try to have proximity to nature, be more structural in my life so that I can experience it more, because I really do need that mix of sort of calmness and solitude and expansiveness mixed in with the more frenetic busy go that if left unchecked, I think it wouldn’t be the complete me if I let that kind of take over. So I have to. Nature is one of the ways that I really find that balance. So that’s, I mean, to make it real, real. I mean, last night I’m like teaching my seven year old, which is a little late, sorry, jj, how to ride a bike, but we got a little busy and she’s the third kid, but I was teaching on a flat road with Mount Tam in the background. Bolinas Lagoon. The birds flying like crazy because the whales have been swimming close to the coast. And the advantage of waiting till she’s seven is she got it real fast. So she also had a boost of confidence. So that was 7:30 to 8:30 last night and maybe sums it all up.

Darren [00:36:28]:
Yeah. Note to parents, wait a little while. It’s so much easier.

Laela [00:36:32]:
Totally. Yeah.

Darren [00:36:33]:
And the third kids always get the best.

Laela [00:36:35]:
Why fight with your 3 or 4 year old about whether it’s the bike or their balance? Just wait. Everyone wins.

Darren [00:36:41]:
Parenting is also, I think, a masterclass in leadership.

Laela [00:36:44]:
Right.

Darren [00:36:44]:
You have three children, a very complex, busy, wonderful life. What is it that you’ve learned about yourself, about how to lead by being a parent that you think is worth sharing?

Laela [00:36:55]:
Wow. The ultimate in humility. And also, yeah. Unconditional love. You sort of see, wow, what is it to love so unconditionally? I mean, that has been both a beautiful thing and it’s a heartbreaking thing. Because you care about them so much. Yeah. I think what have I learned? I mean, My oldest is 13 now, so I am starting to get into the segment of life where feedback goes in both directions, which I have appreciated. I actually feel like the work that I’ve done a lot of it professionally in coaching and figuring out with adults how to learn feedback, how to do the self awareness it has readied me for when my 13 year old tells me what’s going on and who I actually am. So in all seriousness, I’ve been, I’ve learned a lot from my kids. Like the older ones of 3, 13, 12 and 7 are starting to give me feedback and have direct back and forth. And of course when they’re younger and still my youngest, it’s just about really masterclass in sort of individualism, like letting them be their true selves and noticing my own projections, noticing what the world may want or not want them to be, learning that you really can control a lot Less than you hope. And then there’s a lot of joy. I mean, seeing if I know when I’m really present, like, re seeing. I mean, my daughter make me cry here. I make myself cry. At the end of the podcast, watching a little girl learn to ride a bike. I mean, it’s like. Like, it’s incredible. You remember the first time you ride a bike or you rode a bike. Many of us will always remember that. And so I had that thought last night as I was teaching her, and I’m like, what a beautiful setting. And your confidence is so high. Your blue helmet matches. Your blue bike matches, your blue Stitch Crocs, like there’s nothing wrong with the world. And there you go.

Darren [00:38:54]:
I hope people listening to this are getting a sense of why you have such deep followership and are such a wonderful leader. For those of you that are listening and looking to Laela, hopefully as a role model, anything else that you might share that we haven’t discussed as we wrap things up here that’s important to you that you’d want to share?

Laela [00:39:15]:
Well, I feel some gratitude to you, Darren. Like, we’ve. I’ve enjoyed our evolving friendship the last couple of years. And so what’s coming to me is just the importance of friends and community in this journey, especially when you’re trying to balance family and work and. Wow. I know for so many people and for parts of my life, in balancing those where I didn’t spend as much time as I should have with my friends and getting that support and challenging each other to keep growing and to know people with that longevity through those years, it’s just so, so important. I mean, I have a women’s group that are friends of mine from business school. We graduated Stanford in 2004. So 20 years, we’ve met every month, and it’s been. They’re incredible. They’re such important relationships to me, and we’ve witnessed each other and supported each other through so many periods. And I guess I’m getting old. 46, but I really feel the importance of those friendships. So that’s the only thing else I would highlight, inspired by talking to you, Darren.

Darren [00:40:27]:
It’s wonderful to hear. Well, I’ve heard a lot of wisdom, a lot of seriousness, a lot of playfulness in this conversation, but the thing that’s coming through clearly for me is a lot of love. And it’s a word I think is, again, not frequently used in these kinds of conversations. But if I were to guess what your X factor is, it’s that. And maybe we wrap on that note that you’ve inspired me to share that I so appreciated you in this conversation and sharing what you’ve shared, and I just want to thank you again.

Laela [00:40:57]:
Thank you, my friend Darren. Really appreciate it.

Darren [00:40:59]:
You’re very welcome. Wow. What a wonderful conversation with an incredible leader. I hope you were able to appreciate Leila’s unique style and authenticity and to see how much that has contributed to her success and deep followership. I look forward to being with you on the next episode of One of One. And in the meantime, I hope you live and lead with courage, wisdom, and above all, with love.

One of One is produced by Erica Gerard and Podkit Productions. Music by John LaSala.

In this episode of “One of One,” you’ll hear an incredible conversation with Jiajun Zhu (JZ) and Dave Ferguson, the co-founders of Nuro, a pioneering autonomous vehicle company. They discuss the intricate dynamics of their unique leadership roles as they share candid insights into the way they can operate as co-CEOs, with JZ focusing on technology and people, and Dave handling finance, investment, and partnerships. You’ll hear firsthand how both leaders credit their leadership team for managing the day-to-day operations while they steer the strategic direction of the company.

JZ and Dave also offer a heartfelt discussion on the interplay between parenting and leadership. JZ, a father of two, talks about the challenges and rewards of balancing work with family life, crediting his wife’s support, and draws parallels between the emotional experiences in parenting and running a company. Similarly, Dave, also a parent, views parenting as the original leadership role and shares how emotional management at home complements his professional responsibilities.

The episode takes you through their personal journeys, from their serendipitous meeting at Google’s self-driving car project, Waymo, to the foundation and growth of Nuro. JZ’s lifelong passion for robotics and Dave’s shift from climate interests to robotics reveal their deep-rooted motivations and resilience amidst entrepreneurial challenges. You will appreciate the significance of resilience and persistence in entrepreneurship, recognize the emotional aspects tied to leadership roles, and be inspired by their unwavering optimism and vision for the future of autonomous technology. Join us as we explore the behind-the-scenes journey of two visionary leaders steering Nuro toward a transformative impact on everyday life.

Timestamped Overview

00:00 Interview with Nuro founders on journey, leadership.

05:46 Shanghai upbringing: Art, physics, AI, programming passion.

07:08 Found passion for computer science at university.

10:05 Neuro focuses on delivery robots, improving efficiency.

14:06 Expanded from autonomous goods to people transport.

19:57 Co-founder crucial for overcoming unexpected business challenges.

23:57 Advocates fairness and efficiency; manages emotional triggers.

28:27 Empathetic, respected leader with strong technical acumen.

33:12 Starting a company requires resilience and encouragement.

36:53 Parenting parallels startup growth; deeply rewarding journey.

39:25 Parenting is like coaching to develop kids.

43:11 Admire JZ and Dave’s persistent character.

Full Transcript

Darren [00:00:02]:
Hi everyone. Welcome back to another episode of One of one. I’m your host, Darren Gold, CEO of the Trium Group. My guests today are Jiajun Zhu or JZ and Dave Ferguson, the Co-Founders of Nuro, one of the world’s leading autonomous vehicle companies. JZ and Dave founded Nuro eight years ago after working together as senior engineers at Google’s self driving car project, now known as Waymo. Our conversation dives deep into the unique founder journey of starting and scaling a company. We touch on the childhood dreams that continue to drive their passions today, the importance of having a co founder during the emotional roller coaster of the startup journey, and their respective roles as fathers in their evolution as leaders. Please enjoy this wonderful conversation with JZ and Dave. JZ. Dave, it’s so good to be with you and so good to be with you in person. This is a first for me. So thank you so much for agreeing to do this.

Dave Ferguson [00:01:09]:
Yeah, thanks Darren. Great to be here.

Jiajun Zhu [00:01:11]:
Thanks for having us.

Darren [00:01:12]:
You’re very welcome. I’m interested. I don’t think I’ve ever asked you this question before. I’m interested. When you first met, where was it? What was the circumstance bring us into the start of this phenomenon known as JZ and Dave?

Jiajun Zhu [00:01:25]:
I think this was 2012, 2011. 2011. I was working at Google. I was one of the first small group of engineers who started what’s called Waymo. Today it’s a Google self driving car project. It was probably like around 10, 12 people. And we started 2009 and a couple years later Dave joined. It was still a very small team and I just remember that the team lead at that time was Chris Urmson. And he kept talking about Dave. This is this one guy that we really, really want to hire. And finally he managed to convince Dave to join us. And Dave’s desk is right next to me. So that’s how we met each other. And since then we’ve been sitting right next to each other for how many years now?

Dave Ferguson [00:02:17]:
Thirteen years.

Jiajun Zhu [00:02:18]:
Yeah. Except Covid, we were not sitting next to each other, but you know, for 13 years we’ve been sitting next to each other.

Darren [00:02:25]:
Okay, so Google self driving, you’re senior engineers there. At some point you decide to leave that and start this amazing company that you’re now both leading Neuro. When was that and what was the decision like to leave and start something?

Dave Ferguson [00:02:39]:
Yeah, so we left to start neuro mid 2016 and we’ve been talking about doing something together for a little while before that. And really we’re excited about the general field of robotics. Now rewind. This is over eight years ago, but we recognized that there was this really tremendous opportunity to go accelerate this positive future that we could build using robots to help improve our everyday life, do some of the things that we don’t love doing every day. And so we were very excited about going to do that together. And we thought about what are the options that we have to go realize this, could we do this inside Google? Like this was Google X at the time. There was a lot of cool stuff happening and eventually we realized that probably the best shot that we’d have to go actually realize this potential was to go start Neuro together. So that’s what we did.

Darren [00:03:28]:
Was it a hard decision?

Dave Ferguson [00:03:29]:
I’m interested in JZ’s, JZ’s answer here. For me it was a pretty tough decision. I was actually considering two different things at the time. And JZ will remember I was, I mean I’ve always been very passionate about climate and back then I was already hooked on this idea of what we call carbon removal today. Back then it was negative emissions. And so I was very excited about potentially doing something in that space, maybe even at Google X. And so I was tossing up do I do that or do I go build an incredible robotics company with JZ? And in the end Neuro won out thankfully. And eight years later, here we are.

Darren [00:04:02]:
JZ, what was it like for you?

Jiajun Zhu [00:04:04]:
It was not easy for sure. I think that the people that we work with at Google, at Waymo, were great people and we still have friends there even today after eight years. And it was pretty clear that we’re going to make pretty big impact by just staying there. For me I didn’t have like another thing that is going to save the world. Unlike Dave, for me this was really kind of a childhood dream since ever since teenager I was thinking about robots and to me I just have to do this. It was very clear to me that the machines are going to get really smart. The physical world are, our interactions with the physical world is going to be very different. 10, 15 years in the future and we’re seeing all these breakthroughs in AI, in compute and the sensors. We really believe that machines are going to get a lot smarter. And Waymo was very much focused on building self driving cars. So I thought that there are other things that we could do to really make machines more autonomous, smarter. And so creating a new robotics company is kind of my dream for a long time.

Darren [00:05:23]:
Yeah, I hear that a lot from founders.

Jiajun Zhu [00:05:25]:
Right.

Darren [00:05:25]:
This notion of I had some dream As a young child. And I just had to do it. And I think it does require that level of motivation and energy to create something out of nothing, which is what you’ve done. Take us to your childhood. I’d love to hear from both of you. But JZ, you mentioned it first. When was it? What was the age? Where were you? Tell us a little bit about that dream.

Jiajun Zhu [00:05:46]:
I grew up in Shanghai. I spent the first 22 years there. I spend many years in my childhood doing two things. I spent a lot of time learning art, painting, drawing, for seven years. And then as we became teenager, I started reading a lot of books about physics. I really loved physics and artificial intelligence. Even though the artificial intelligence back then was very different from today, I really loved it. And then I started also doing computer programming at an early stage, at an early age. So probably around like 12, 13 years old. I remember that I just locked myself in my bedroom during the summer break, for example. I would be there in my room for many hours every day reading these books, programming, thinking about the future. And I think, what if these machines can be as smart as human and they can do all of these things? I particularly, I was very excited about humanoid robots at that time. And I dreamed about robots doing, cooking, folding laundries, all of these things. And I think, you know, it was that time, it became very clear to me that this is something that I want to do in the future.

Darren [00:07:04]:
That’s amazing. And Dave, I know you were in a different part of the world. Yeah.

Dave Ferguson [00:07:08]:
So my path was probably a little bit less direct when I was a kid. I was more focused on climbing trees and getting into trouble, really, rather than engineering. For me, it wasn’t until I went to university at undergrad and I was in New Zealand. And in New Zealand, you tend to immediately specialize at university. So it’s sort of the British, the Commonwealth system. And so you have one year to take a lot of different courses and then figure out at the end of your first year what are you going to major in and spend effectively all your time on. And so I went pretty broad. And I was originally thinking I was going to be a lawyer. So I did all the law classes, I did physics, I did maths, I did computer science. And I did computer science mostly because one of my friends told me that he thought that I would find it really interesting programming and whatnot. I really had not had the sort of quintessential computer scientist background as a kid programming machine. So that first year at university, I fell in love with it. The Idea that we could equip some other agent with the ability, then it was very low level intelligence. But nonetheless, the intelligence to be able to make its own decisions and then go on and do things that we didn’t explicitly program, that we didn’t tell it to do was pretty wild and something that was incredibly exciting to me. And from that point on I was all in, pretty much on the computer science programming, robotics path.

Darren [00:08:28]:
And then there was a robotics competition. Is that right in your path?

Dave Ferguson [00:08:32]:
Yeah. Well, so after my undergrad I went to Carnegie Mellon for grad school. So I left New Zealand, came over to Pittsburgh. Very much the Disney world of robotics. So many amazing projects, so many amazing professors and everything going on there. And I got involved in the DARPA Urban Challenge. So this was the last of three DARPA funded competitions where they were trying to get industry plus academia to work together to come up with solutions for these grand challenges. And so in 2007 there was the DARPA Urban Challenge, which was effectively a mock race in urban environments by driverless vehicles. And so I was part of the Carnegie Mellon team then. It was an incredible experience. When I look back, there’s like a gap in my life of about a year and a half where I don’t have too many memories, which was a lot of time put into that effort. But that for me was really the catalyst for getting into self driving in particular and on road autonomy. And I got to do that with a lot of wonderful friends that have gone on to become seeds for a lot of the self driving efforts that are out there today in the world. There’s a little bit of a mafia from those days of engineers and who have now become entrepreneurs that are running and, or being pretty key roles in a lot of the different self driving efforts across the world.

Darren [00:09:50]:
Yeah. So here we are. I’m going back in time now, 2015, where you’ve made this decision to leave Google 2016 to create your own company. Bring us to that point in time. What was the idea then and how did you begin?

Jiajun Zhu [00:10:05]:
I think when we started we knew it was going to be a robotics company. We came up with the name Neuro because it’s a new robotics company, Neuro, Dave’s idea. And our mission is, I think our mission statement at that time was to accelerate the benefits of robotics so that more and more people in the world could benefit from robots saving time, saving life, all of these things. I think the first thing that we did is really spend the time thinking about what is that first robot that we want to Build. We had a few criterias, like it’s a robot that will touch everyone’s daily life. It’s not something that only live in factories or hospitals or research labs. It needs to be something that could interact with everyone because that’s just a lot more exciting. The second part is it needs to be something that we think we have a unique expertise or advantage that we could contribute to. I think the third one is there is some timeframe we want to work on, something that can be done within or can be built. A technology can be built within, say, three, five years. Not something that will take many decades to do. There are a bunch of these requirements. And we looked at many different robotics applications and verticals, even including like toys or pick and pack robots and things like that. And we ultimately decided that delivery robots are a great first application for us because they obviously could benefit everyone in their daily life. People spend a ton of time getting groceries, doing these, running these errands, buying things, spending a lot of time. It’s not safe to drive a 2 ton vehicle just to get a gallon of milk, for example. We think there’s a lot of things that can be done better if instead of moving people, you could move goods to people. And we also thought we could actually build a robot much, much faster, much quickly. If it only carries goods and it only travels 15 miles per hour only, it’s lightweight. There are a lot of assumptions about the product that we could build at that time and we think it’s a huge, huge market as well. It’s just moving goods. So we started a company and we decided that delivery robots was going to be the first thing that we do.

Darren [00:12:41]:
When was the first time you had a vehicle that you sat in and autonomously drove? Because I’ve had that opportunity to sit and it was an absolutely magical experience. So you start in 2016. When was that first time and what was it like?

Dave Ferguson [00:12:58]:
Well, as Jesse mentioned, we were focused on goods transportation. So the idea that we would create vehicles that wouldn’t necessarily transport people. But in order to do that development, we needed to test and collect data in sort of quote, unquote, normal, normal self driving vehicles where you could sit in them. And the very first year, so we started the company August 8, 2016, was the first day we opened the office and we had a Christmas challenge that year for the team, which was to do to autonomously drive a loop around the Airbnb that we were living in and working out of as a company that December. So effectively that was the point leading up to that where we were already doing some limited autonomous driving on public roads.

Darren [00:13:42]:
Wow. Wow. Yeah. And you’ve obviously had a number of milestones you’ve hit. How would you divide the eight years? Are there some sort of normal chapters that would describe the journey and how would you do that?

Jiajun Zhu [00:13:53]:
That’s a great question. I haven’t thought about this. In my mind I would probably just divide it into two parts. The first eight years and the last maybe two months. I think the first.

Dave Ferguson [00:14:05]:
Always looking forward.

Jiajun Zhu [00:14:06]:
I think the first eight years we grew from just the two of us in the Airbnb to like a 650 person team. We are running fully autonomous robots on public roads. We did that in three different states, California, Arizona and Texas. And we built three generations of robots from prototype to the second generation to the third generation which will go on road in about a month from now in Palo Alto, Mountain View and Houston. And we built the technology, build all the AI, design all the vehicle manufacturers, the first fleet of these vehicles. That was the first eight year and it took us eight years to do that. And the second, I would say the most recent couple months was when we decided that we are going to change and expand our business to be providing the self driving technologies for even broader applications. Not just goods transportation, but also people transportation, including both ride sharing service as well as personal vehicles. So now we think we’re at the point where we can enable more partners like automotive companies to create product that have advanced autonomous. Advanced autonomous driving capabilities. So obviously that’s a pretty big change from just good transportation and a more vertically integrated approach to a beyond goods transportation people plus goods and more of a technology provider approach.

Darren [00:15:47]:
Yeah. So if things go well, and I’m guessing they will for the two of you and for Neuro, what does the company look like and call it? The next three to five years. If you think ahead, what do you expect? What should people expect from you?

Dave Ferguson [00:16:01]:
Yeah, in the next three to five years we expect that we’ll have some pretty major partnerships on both the mobility side. So JZ mentioned building autonomy for ride sharing and delivery applications as well as on the personally owned vehicle side. And so I think what you can expect and what we hope to see in three to five years is that we will have Neuro autonomy technology on many thousands of vehicles that are operating in both the context of providing delivery and ride sharing services as well as some variant of Neuros technology available on personally owned vehicles.

Darren [00:16:39]:
Okay, looking forward to seeing that. And when we talk about these eight years or eight years plus Two months. It can seem very like the straight line. Right. And I know this has been far from a straight line. There have been zigs and zags and backwards and falls and peaks and so this is a tough journey, building a business. I know it’s been that way for you despite all your success. Walk us through. Like how, how has the journey been and what’s been your biggest challenge as co founders and leaders of this company?

Dave Ferguson [00:17:10]:
Yeah, I mean, it has been challenging for sure. And I was thinking about this leading up to this interview, Darren, because I knew you were going to ask us about some of the, the emotional journey that happened along with the externally visible one of the company. Starting a company and really living with it through many years is. It’s an unbelievable experience. It is incredibly difficult. And J.C. and I both have kids. I think the closest analogy I can share is it is a little bit like having a kid, but a kid that’s sick and you don’t know if that kid’s gonna be okay or not. But you feel this incredible responsibility towards it. You care so much about it, you deeply love this thing and you know that it’s not all under your control. And so it’s sort of sitting with that and trying to desperately get this, get this child to a really successful outcome, to a really healthy, happy place. And there’s a lot of up and downs along the way. So for us, we have been incredibly fortunate. We’ve had an amazing team throughout the last eight years. We’ve had incredible support from different investors and partners. But there’s also been a lot of challenges and in many ways we’ve been very unlucky at different times as well. And so I think for JZ and I, it has been a challenge and it’s been a very emotional journey, emotional roller coaster. And it’s often said that resilience is probably the most important characteristic of being a founder. I could not agree more. And I think that one of the other areas that we have been very fortunate is that thankfully the relationship that we’ve had together has only gotten stronger through all this. And before we started Neuro, we talked about this. The two of us had known each other for about five years. We’d worked together pretty closely, we’d sat next to each other for all of that time. We dealt with various challenges and really liked each other and I feel, knew each other pretty well. Looking back, we still probably had no business having the confidence to start a company together. Like just knowing how much that relationship and that friendship is going to get tested throughout this experience. It’s a really significant undertaking and it’s a lot to ask of another person and of yourself and the relationship that you have together. And so that is one of my. One of the things of which I’m most thankful for this entire journey.

Darren [00:19:28]:
Yeah, I’m guessing it would be hard to imagine having done this alone. Right. And this is actually one of the topics I wanted to get into for sure. Part of the reason why I asked you both to, to join me for this conversation. What is it about the two of you that has made this magic work? And. And I actually use that word intentionally. I know I used it in the context of being in one of your amazing cars, vehicles. But there is something magical that exists between the two of you, @ least in my experience. And what others will point to. What?

Jiajun Zhu [00:19:57]:
Well, I just want to echo what Dave said. This is way harder than what we expected, probably 100 times harder. If we knew it was this hard, we probably wouldn’t do this. I think having the co founder is perhaps the most important thing in my kind of experience in the last eight years because there were just so many moments when I felt that I have absolutely. I had no control of what’s going to happen next. And I think this is probably also one of the biggest kind of my personal growth area is I often had these moments where I project into the future and think about, okay, all of these things could get a lot worse and what am I going to do? And I think it was not possible for me to overcome these challenges if Dave was not there. I think things got really hard. For example, like two years ago where kind of after Covid the market really corrected itself and we had to do a lot of correction ourselves as well. For example, one thing that I think we didn’t foresee or maybe one mistake that I made was we over hired during the COVID period and everyone was hiring like crazy. It’s very competitive market, so we probably triple the size of the team in two years. And we had to correct that. And that was a very painful correction. It affects a lot of things. I think without Dave, without the team, I think it was really hard. I would probably give up in that situation. And there are many other examples like that when I’m having this like personal struggle thinking about the challenges that we’re dealing with and having Dave be right there so I can call him, I can have a chat with him, share this feeling and know that there’s someone who really understand you. I think that was super, super important. And I think Dave often played the role when I’m kind of having a great moment, he’s playing the cheerleader role and I think hopefully vice versa as well. I think that was really valuable. I would say that most of the time, 99% of the time we share very similar judgments in company, very large company strategic decisions or day to day operations. I think I have a pretty accurate model of what Dave’s going to say and he’s, he has a very accurate model of what I’m going to say. And if we come up with independent decisions, 99% of the time it’s the same. There’s 1% of the time we had disagreement, we had arguments, but we could always get to a agreement or a decision forward and that never affected our relationship.

Dave Ferguson [00:23:01]:
Yeah. So certainly plus one to that. Maybe the only other thing that I would add, Darren, is we’re very similar in many ways. And I think importantly from a value perspective, like how we see the world and what we’re trying to do and what we care about, I think there’s a very strong alignment, maybe to echo what JZ was saying. I think we have fairly different triggers, which is incredibly useful because we have this very strong correlation on what we care about and how we see the world and how we make decisions and also things like our expectation of excellence in ourselves and others and whatnot. But the things that really trigger us individually are quite different, which means that we do have the opportunity to be there for each other and to not both get triggered at the same time and have everything blow up. And that has proven, I think, very valuable for us over the last few years.

Darren [00:23:53]:
Okay, so I’m going to ask, what are those differences and triggers?

Dave Ferguson [00:23:57]:
So for me, let’s air it all, let’s get it all out. No one’s listening to this. Right. I’ve always had this very strong sense of fairness, Right. And not wanting, not wanting to see a situation where I feel like we are being taken advantage of or a partner is being taken advantage of and making sure that we’re really pushing to get to the quote unquote right outcome in terms of what is most fair, what’s sort of the optimal outcome here in terms of fairness across the board. And sometimes I can be fairly dogmatic about that. Right. And it can really bug me if I see something that is, that either doesn’t seem like it’s fair or an additional trigger that I have is one around efficiency. So if I see something that seems wasteful or we’re not doing something Quite right. Something is suboptimal and it feels mediocre in a certain way that, that will also really bug me. And so those are things that I’m sort of acutely aware of and things that, that I can potentially react to. And I think on JZ side those tend to not be as significant a trigger. And so he can see me and he can be like Dave, like I get it, I know what’s going on. I see you, I see the smoke coming out your here but hear me out and whatnot. And I think because we have such a great respect for each other, it enables us to be able to be that, that sort of calming down influence for each other. I’ll let JZ speak to his triggers.

Jiajun Zhu [00:25:23]:
I think my biggest trigger is my fear for disappointing people that could be the team, could be investors, could be partners. So like I would avoid doing anything that could potentially disappoint them. And obviously that is, I think that comes with a lot of advantage. I think people usually would say that I’m pretty empathetic and but I also think that deep down there is a fear living inside me and that’s not always positive energy. And I think that that energy shows up in cases when things are not going very well. I tend to show up as someone who is more worried as a leader. I would be problem solving all night, wake up 3am in the morning texting people go to meetings without bringing enough of positive energy. And I think that’s when Dave catches me making sure that I notice that and try to pull me back from too much projections in the future and more focused on what I can do right now at the moment.

Darren [00:26:43]:
Let’s talk a little bit about your leadership. You’re both leading this organization. JZ, you’re in the role of CEO. Dave, you’re in the role of President. I’d love to hear the difference between those two roles. How do you divide your responsibilities? And then I’d also like to dive into what your unique aspects are in terms of how you lead. But I’m going to have you do that differently. I’m going to have you talk about each other. But let’s start with like what is the difference in roles?

Jiajun Zhu [00:27:08]:
So we have different titles, but I would say that we operate like a co CEO. We pretty much make all the major decisions together and company strategy, taking investment, big product additions. I think these are all decisions that we make together. We do have a focus area. I think throughout the eight years and two months we pretty much always had our focus area. I Think I lean in more on the technology side and the kind of the people side of the business and Dave leaning more on the finance side, investment side, partnership side. So right now I think our division of responsibility is I focus a lot more on the technology and the product development, where Dave does more on the fundraising, regulatory partnership, things like that. Obviously we had a lot of overlap and then we rely on our leadership team a lot in managing the company day to day and these strategic additions, that’s kind of how we divide our roles and responsibilities today.

Darren [00:28:23]:
Dave, how would you describe JZ as a CEO?

Dave Ferguson [00:28:27]:
I think JZ is, he is incredibly empathetic. I think he’s someone that everyone loves. I think he’s always had this remarkably high integrity around what he cares about. I don’t think anyone over the entire or eight years at Neuro and even beyond that has ever questioned what JZ’s motives are. And I think that is such a powerful element to bring as a leader to a company because you immediately get the trust of everyone, at least at that level, that hey, we know that this person really is doing everything that they can to make this company succeed and to make this mission succeed. And if there’s ever a situation where it’s mission or company versus their personal gain, JZ, 100 times out of 100 is going to pick the mission and the company. And that is, that’s a remarkable characteristic to have as a leader. It’s also a remarkable one to have as a human being. Right. So I think people love JZ, as I do, and so just this remarkable person at the top of the company for starters, right around who they are and the nature of them as a human being, how he leads. He’s very strong on the technology side, so he understands things very deeply. He himself was an incredible engineer prior to Neuro and so not only understands the plight of an engineer and how to relate to everyone on our team, but also technically understands the details and so can go into the weeds and often does quite honestly to get in and provide input on how we doing things, what’s the right way for us to be operating. And I think that’s something that the engineers love. We have a number of amazing folks at Nura that have been with us for a long time, particularly on the engineering side. And I think it’s because they recognize that it’s not that common to have a leader that so deeply understands and respects the core technology. And that is probably one of the benefits of dorky engineers turned founders that we have. And so I Think that there’s this very strong technical acumen, this really incredible personality and integrity and cultural alignment that makes him someone that people really love working for. He’s also very hardworking. He has a, a tremendous bar in terms of expectations that he holds himself to and then also has that expectation of others. And as a result he’s been able to attract really amazing people who then have attracted other amazing people and have really. That has enabled the flywheel that has made Nuro the company that it’s been.

Darren [00:31:04]:
For those of you who are listening, you can’t see but JZ is blushing a little bit. JZ, anything you’d want to say about that?

Jiajun Zhu [00:31:09]:
That sounds like a much better version of me.

Darren [00:31:12]:
I am, I’m with Dave is.

Jiajun Zhu [00:31:14]:
I would say that everyone who has worked with Dave, I think they have this experience of pursuit of excellence that I think it could be really inspirational. I think Dave is incredibly intelligent, super smart. Even though that he’s trained as an engineer, he understands pretty much everything across the business very well and he could understand a topic deeper than anyone that I’ve worked with and very quickly. And he has this kind of raw intelligence in him to be able to dive into any topic. It could be, it could be strategy, it could be business, could be finance related, could be technology, could be many of these things. And he is just able to really level up the overall quality of thinking and the level of output. And I think that was absolutely amazing to watch. I think people really enjoy working with Dave because they feel like they, they got pushed really hard to do the best of their work across pretty much every function of the company and always. And also it’s very clear to people that Dave is very passionate about the mission of the company and there is a really great impact that we want to pursue and that shows up in Dave’s action in the words. So that’s the Dave that I see.

Dave Ferguson [00:32:47]:
Great to hear, Darren. You did turn this into a joint coaching session after all.

Darren [00:32:52]:
I can’t help myself. So you’re now eight plus years into this incredible journey and I imagine there are some people, maybe they don’t even know it, that might be founders someday. What’s the single piece of advice you would offer somebody thinking about founding a company or maybe in the midst of the journey that they’re in, if they.

Jiajun Zhu [00:33:12]:
Haven’T started yet, I would ask them to think through. Spend three more months thinking about it before you start. I just think that starting a company is way harder than anyone thinks. If they have already started a company. I would do everything that I can. To a friend who just started a company and then we are having a coffee chat, I would do everything that I can to encourage him or her to continue. Because I think not giving up is a big part of it. Being an entrepreneur. I think what’s much more important than seeing all the potential risks and challenges and then be prepared for that is just having that resilience and the courage to go through it and just knowing that you will get there. I had one of our first investors. He himself is a very successful entrepreneur. Every time that I chat with him, his advice is just, you will make it, you will get it done. The company will be successful. And I think having that in mind is very important. No matter what challenges come next, knowing that you have the team, you have the ability and kind of just that spirit to. To overcome it, I think that’s already 99% of what I need. That’s how I think about it.

Dave Ferguson [00:34:54]:
Yeah. I just add one thing to go along with that is when you’re starting out on the journey, knowing that it is going to be full of challenges. I think it’s so easy externally. Every time you look at a company or anyone individually, you see all of the success. You see what looks like a linear journey, when in reality it’s just not that way for any company. Jensen talks about how it’s unclear if he would redo it and do Nvidia again if he had the chance. And yet that’s. This is one of the most successful companies of all time. Right. So I think if you go into this situation expecting that there are going to be incredible ups and incredible highs and incredible lows, then I think you might be able to get yourself into a more emotionally resilient place so that you can handle it when they inevitably come, because they will come. Like, this will be hard. This will test you. There’s no path to building a successful company that I’ve ever heard of that didn’t involve a lot of challenges along the way. And I think the more you realize this is part of the journey and these are expected challenges, I think the less freaked out you get when they happen. And you’re like, oh, I didn’t. Like, did this ever happen to the Google guys? Right. And I think that’s probably part of the secret to Josie’s point, which is absolutely right. Keep going. You need to survive long enough to.

Jiajun Zhu [00:36:13]:
Succeed and also hire a really good coach.

Darren [00:36:21]:
Okay. I knew that was going to come back. So we’ve been talking a lot about you as Founders, but you’re more than that and part of your lives. Your parents and I’ve seen you be both exceptional fathers. So I was hoping you could bring to life that aspect of who you are. Oftentimes say that parenting is the, the best form of leadership training. What have you learned as being a parent and how do you manage this incredibly intense journey of being a founder with also taking care of a family?

Jiajun Zhu [00:36:53]:
So I have two grows. One just turned 12 yesterday and the other one is nine years old. So when we started the company, I basically had a one year old and a three year old and just watching them grow up is one of the most experience, most amazing experience that I have had. I think I was very lucky that my wife is super supportive. She actually works at the company as well. Since day one, we never talk about work at home. That’s the rule. She shares a lot of the parenting responsibilities. Sometimes I just couldn’t do all the pickups and drop offs and I think she’s been extremely supportive. And being a father of young children is really hard. But a lot of the experience, emotional experience that I had, I would say that were actually quite similar to the emotional experience that I had at the company. And I think ultimately it becomes really kind of a self noticing the thoughts that I’m having, how I show up as a parent, how my action really affects other people, in this case my children or just in general people around me. And ultimately what is my internal thoughts, right? Am I afraid, am I angry, am I worried, am I just feeling sad or disappointed? I think it’s very similar emotions as parent and as leader in the company. And I do think that my behavior and how I show up really matter. And I’m still improving every day and try to be a bad, try to be a better dad in moments that I’m with them. And I think children are just incredible. My daughters are absolutely amazing. I’m so grateful to be their dad. Watching Tom grow and being part of their life is just amazing, wonderful experience. Just like being a startup founder, watching the company grow. I think most people maybe watch from the outside would say, hey, being a startup founder, you have this huge sense of accomplishment. That’s definitely not how I feel about it day to day and but a dad, I kind of feel like I have a lot more sense of accomplishment watching two human being grow and become who they are today.

Dave Ferguson [00:39:25]:
Yeah, I very much see the parent role as like the OG coach or leader role. You know, you have this. I have a 10 year old and a 7 year old girl and a boy. And you’re constantly trying to figure out, like, what is the best way to try to impart knowledge or a lesson or coaching to them so that they can become, again, it’s very much future focused, so they can become incredibly happy, fulfilled people in the future. And I find myself having similar conversations with my daughter, as with some of our team sometimes, and with myself, to JZ’s point as well. And that’s actually been really neat. It’s been really lovely seeing how some of the lessons that we learn about managing our own emotions and how we show up and how we really effectively bring a message to someone so that they can receive it where they are and it can really actually be useful and not harmful, how that applies to the relationship that I have with the kids. So that part has been amazing. We got something out of this startup experience. JC beyond, beyond all the joy and pain of the company itself.

Darren [00:40:31]:
Yeah. All right, as we wrap here, I wanted to give you both an opportunity, if you have it, to add anything that we haven’t talked about, anything you’d want to make sure listeners hear from you, whether it’s something new or a summary of something maybe we’ve already talked about.

Jiajun Zhu [00:40:47]:
Well, I’m just incredibly excited about the future. I’m thinking about the next one to two years, what the company will look like, my family will look like. I’m really excited. And I think this is part of our coaching work in the past year or so is just knowing things will get tough sometimes. And I feel like where we are right now is we’ve made a lot of progress in the last year running the business, and I think the company is in a much, much better place than, say, a year ago. I’m very happy about where we are, but also knowing that there are going to be more challenges ahead of us. And I feel like I’m just more excited about kind of the state that we are in, not being anxious or afraid about more challenges coming at us in the future and knowing when that happens, we’ll figure it out, we’ll find a way. That’s kind of where I am right now, and I feel very grateful and excited at the same time.

Dave Ferguson [00:41:55]:
There’s a common refrain that the journey is the destination. And I think it’s common because, like, like most of that wisdom, it’s absolutely true. It’s also very hard to actually to live that. And I think I’ve noticed certainly in JZ and also in myself, a pretty significant growth in that respect. And we know now, we know like, what’s coming is going to mirror what. What has come before, and it’s going to be challenging, but certainly I feel more excited about being equipped emotionally to handle it in a much better way and really enjoy it. Can enjoy opportunities that we have like this one right now that you just don’t get. A lot of these experiences are almost unique to the role of founder. And looking at it through the lens of we get to do this as opposed to we have to do this is really. Is very powerful for helping unlock that the right energy and the right frame of mind and the right. The right emotional state to go take on some of these big, hairy challenges.

Darren [00:42:55]:
It’s been an absolute treat being with you. I want to thank you both for doing this. I believe this is the first time you’ve done a podcast together, so I feel deeply honored that you do this with me. And I’ve just thoroughly enjoyed the conversation. So thank you both.

Dave Ferguson [00:43:09]:
Thank you, Darren. Really enjoyed it.

Jiajun Zhu [00:43:10]:
Thank you.

Darren [00:43:11]:
Welcome. I trust you got a glimpse into the incredible character of JZ and Dave. I so admire their persistence, a trait so common and essential to successful founders. I look forward to being with you on the next episode of One of One. In the meantime, I hope you lead with courage, wisdom, and above all, with love. I trust you got a glimpse into the incredible character of JZ and Dave. I so admire their persistence, a trait so common and essential to successful founders. I look forward to being with you on the next episode of One of One. In the meantime, I hope you lead with courage, wisdom, and above all, with love.

One of One is produced by Erica Gerard and Podkit Productions. Music by John LaSala.

Join us in this engaging episode of "One of One" as we sit down with Scott Cutler, an influential leader with an impressive career at the New York Stock Exchange, StubHub, eBay, and StockX. Scott shares his journey from an advisory role to CEO, unfolding his leadership philosophy centered on personal development, exemplary leadership, and achieving results amidst external challenges like the global pandemic and economic shifts.

He offers a heartfelt reflection on his upbringing, early morning routines, and a personal tragedy that redefined his career, emphasizing the power of choice and resilience. Drawing inspiration from mountains and his favorite book "Annapurna," Scott provides profound insights into maintaining focus, fostering relationships, and the continuous pursuit of innovation. This episode promises to leave you inspired and equipped with valuable lessons on navigating the peaks and valleys of professional and personal life.

Timestamped Overview

00:00 Joining eBay transformed my leadership approach entirely.

04:32 Relationships significantly shaped my career trajectory.

08:36 Focus on purpose, not outcome, for impactful leadership.

14:14 Joined StockX, aligned with founders' original vision.

19:04 Continuous personal development and effective leadership focus.

21:22 Last five years challenging, unique, yet constructive.

25:10 Mountains symbolize challenge, motivation, and perspective cycles.

31:16 Early paper route instilled lifelong purpose and responsibility.

34:50 "Free" bracelet inspired personal and professional transformation.

38:12 Annapurna: Adventure, sacrifice, and summiting life's challenges.

39:39 Succession planning and embracing new opportunities.

44:12 Choose to be a sail, not cork.

Full Transcript

Darren [00:00:02]:

Hi, everyone. Welcome back to one of one. I'm your host, Darren Gold. My guest today is Scott Cutler. Scott began his career as a lawyer and investment banker, was a senior executive at the New York Stock Exchange, president of Stubhub, head of Americas for eBay, and now CEO of Stockx. In our conversation, we talk about the importance of genuine relationship and leading. We discussed the incredible complexity of being a CEO over the last five years and Scott's practices for sustaining focus and energy, including the importance of physical conditioning, Scott's unique perspective on time management, the importance of having a morning ritual, and his use of the mountains and the summit in particular as a guiding metaphor in his life and his leadership. Please enjoy my wonderful conversation with Scott Cutler. Scott, it's so great to have you here. I'm so excited to be in this conversation with you. Thanks for being here.

Scott Cutler [00:01:06]:

It's going to be incredible. I'm looking forward to this one.

Darren [00:01:08]:

There's so many places we could start this, and I thought maybe the best place to start was the first time I met you. And if my memory serves me, it was June of 2015. It may have been the very first day on your new job as CEO of Stubhub. Oh, yes, right. It was at the eBay senior team offsite, three day off site. EBay had just spun off PayPal, and of course, eBay at the time owned Stubhub. And I think it was your first day on the job. And I noticed there were a lot of things I noticed about you, but there were two that really stood out that I thought I'd just bring into the conversation. And maybe we'll take that and pull on those threads. The first thing is, you were clearly wearing the coolest sneakers in the room, if I remember correctly. And the second is the degree of interest and engagement in the topics we were talking about, the topics of leadership and how you build an extraordinary leadership team. And then, of course, that led to a relationship where we've gotten to know each other a lot better. So I thought we might just start at that point and maybe from that point, look a little backwards and bring our audience into your trajectory. What brought you to that point? Your first, really CEO role at the time, and then we can sort of point forward from there.

Scott Cutler [00:02:25]:

Yeah. Wow. I totally forgot. But, yeah, I mean, that was. Boy, what a moment in time, joining eBay. I was obviously joining as the president of Stubhub, but was part of the eBay leadership team at that time. And that was my first opportunity to be a CEO. And I was coming from an environment where I had spent the last nine years at the New York Stock Exchange, and I'm sure we can talk about that. That was really my formative opportunity to be a leader. I was there for nine years. It was an incredible journey for me, for our company, for the markets overall. But when I was leaving that opportunity and going back to the west coast, which for me was home, because I had, I was really raised on the west coast, in Seattle, born in California. All of my career had really been in technology prior to being in New York. But I really, to that point, was largely more of a transactional type of leader. I mean, I was in transactions. I mean, it was winning business as an investment banker, I was prosecuting transactions as a lawyer at the New York Stock Exchange. You're on Wall street, and here, going back to California as a CEO, really having to show up as a different type of individual, as a different type of leader, not the Wall street leader, but a more compassionate, more empathetic, more in touch leader, and thrust into that environment as a CEO. And so it really started to challenge my perspective of what did I want to be like as a CEO, and what are the things that I was going to need to change about myself, about my leadership style, about my leadership principles at a time of rebirth and recreation at eBay, as a marketplace, it was, we called it day one. It was day one of a new eBay that was split up. But what I remember the most is just the realization that I was going to have to be a different leader.

Darren [00:04:26]:

Yeah. And different in what sense? What did you discover about yourself? Or what did you already know that needed to change?

Scott Cutler [00:04:32]:

I think when I think about some of the things that I've been challenged to grow as a leader, one of them has really been on the relationship side. Now, on the one hand, and maybe we'll talk about this, a thread through my entire career has really been the ability to maintain, develop, extend, build relationships with the people that I've worked with. And so if you look at the six different chapters of my career, I still maintain and have relationships with a lot of, if not most of the people that I've worked with in all of those different chapters. And every chapter, new chapter was opened up. And this is true of every single one was opened up through a previous relationship that I had developed and fostered and built. And it led to something further down the road that I would have never known of. A door opening. Stubhub the door opening actually happened. Maybe it was a year or two before that, and then the CEO of eBay that I worked with, Devin Wenig. Before Devin had joined eBay, he was actually at Thompson, Reuters and at the NYSE. They were one of our biggest clients. And so he was not only the president of that, but he was also overseeing the relationship with the NYC. And I developed a relationship with Devin. I never would have thought that ultimately at one point in time it would lead to a completely different trajectory in my career, but in fact it did because of a relationship that was built in a different context in a different time. And then probably somewhat serendipitously, a door opened and I'm going through a door, but probably with somebody that I had already known before.

Darren [00:06:22]:

Yeah. So I was getting a sense, though that there was something about relationships, that there was an extra, extra gear to those relationships that you might have discovered.

Scott Cutler [00:06:30]:

Yeah. Thanks for the prompt. So, again, while investing in those relationships was always part of who I was being in relationship. And maybe this is the thing, being in relationship with the people that I worked with was and has become a philosophy that now I've embraced in now multiple different instances. And the being in relationship, and learned a lot from tream in this regard, but is a clear understanding of myself where I need to develop personally, really having empathy for the other person in the relationship, and then a shared context of where we are and that the center of that is really being in relationship. And so opening that up for my leadership teams has really been one of the practices to do that has really been as part of our leadership team meetings, weekly check ins, where we're checking on what's going on in our personal lives. It was really a way to unlock that being in relationship or being in empathy with the people that I've worked around. And it was a practice that I had never experienced before that, before that time. And what it really allowed for me is just to understand much deeper the people that I was working with in a different context. And it's not like that wasn't. It was ignored before, but it was just intentionally cracked open as a way to more efficiently operate in a shared context, to say, we know each other, we trust each other, and let's move faster together because we know the circumstances in which were operating at that moment. I guess being in relationship was the thing that was shifting for me.

Darren [00:08:13]:

Yeah. So you're at Stubhub. This is your first essentially CEO role. One of the things that I think has been a pattern when you've come new into companies is you've seen a high point of leverage, a change that could be made that only maybe somebody with an outside perspective can see. I think that might have happened at the New York Stock Exchange, happened at Stubhub. Can you talk a little bit about that if I'm getting it right?

Scott Cutler [00:08:36]:

Yeah, I think there's so many books that are well written around 30, 60, 90 days. But one of the, I think the most important things early on in leadership is to be able to have an impactful change or an impactful perspective that you can put into practice right away after you've had a chance to absorb and to listen. And at Stubhub, it was largely just a change in the way that prices were displayed to consumers. And it was more of an observation that I had at that point in time, because Stubhub, and probably everybody knows what it is, but it's a marketplace. But the sellers on that marketplace list their tickets on multiple different channels or different platforms. The winning platform, typically for the consumer, is the one that at the right time, is at the lowest price. And that was how the New York Stock Exchange operated. By definition, price time priority in terms of how orders are matched in the market. And so I knew that technologically and how the markets operated. But coming into a new marketplace at this observation about the importance of pricing and timing for transactions like that in competitive environments. And so it was a change that was very obvious to me, but it was also a philosophy that was part of a marketing campaign at the time. It was part of a cultural philosophy at Stubhub. And so part of that had to be broken apart, culturally, broken apart with a team. And it required for me, daily stand ups with key leaders to implement this change. Now. It had a tremendous impact on the business. He was the second learning. It had tremendous impact on the financial results for the company. But I quickly learned that while those financial outcomes were great, there was an aspect of how it was done that people didnt necessarily feel or leaders didnt necessarily feel, that it was an empowered way of getting to the decision. Now, it ultimately is probably the right decision, but the how to get there in terms of empowering and then realizing that for most people in a company, financial results don't really matter. It's the why you're doing something that matters even more. And afterwards, I kept on saying, wow, look at all this great success that we've accomplished. And people are like, yeah, it doesn't matter to me. And so that really led me more down the path of, how do you open up culture? The why, what is the purpose of what you're doing? Connecting that to the business outcome is a much more powerful leadership approach than focused on the outcome itself. It's the input that drives the output. Another learning, kind of going through that as a first time CEO.

Darren [00:11:33]:

Yeah, great learning. I imagine it's repeated itself in the last eight or nine years. Exactly. But I'm really curious about this phenomenon of fresh perspective. Gordon Moore and Andy Grove had this famous story when they first decided to exit the memory business. They said, what would a new CEO do if they came in and we got fired? And the lore is that they walked out of the building, came back in and made the courageous decision at the time. Courageous decision. Now, quite obvious in retrospect, to exit the memory business. You've done that. The New York Stock Exchange, you've done that at Stubhub, I imagine when you came to Stockx, which we'll get to in a moment, and it's easier to do in those first few months, how do you sustain that sort of fresh, disruptive, kind of innovative, courageous thinking year, two years, three years into the business?

Scott Cutler [00:12:24]:

I think it's harder the longer that you've been anywhere, to be truthful. And I do think that this is probably why CEO's turn over every four or five years. And I don't know is if that's the timeframe, so to speak. I guess what allows a new leader to come in with a fresh perspective is they're not burdened down by the way of doing or that's how we do it, so therefore it can't be changed. You've got no emotional tie to either the strategy or the decisions that led you there. And so you're able to be fresh in your perspectives coming in. And so to me, probably the unlock is one can't be set in their ways nor their strategies. And so being able to step back and really be clear, what are those things or those philosophies that are holding you back? That could be constraints for the next layer of growth and getting into a mindset or in a place and a safe place to be able to challenge the status quo. And I think that is something that is probably a great practice as a leader to stay freshen because you can very easily get caught in the trap of, hey, we've had success and we've had success doing it this way, and then get quickly trapped into, oh, that is the only way.

Darren [00:13:48]:

Yeah, well, maybe we can use that as the segue, because I think you're right at that mark. Now, five year mark as CEO of Stockx, if I'm correct, and I'm curious to hear how you got to that role. And in many ways, as I know, sort of like it was tailor made for you. So I'd love to hear also just the combination of experiences that made you the natural choice for really leading that company at scale.

Scott Cutler [00:14:14]:

So I've told this story so many times, but I was obviously not the founder of Stockx. We've had incredible founders of Stockx who had a big vision, and part of that early vision was so married to my background, which was they were going to create a new commerce marketplace based on the principles of the New York Stock Exchange, Stubhub and eBay. Not so famously, but I reached out to Josh Luber, who was the then CEO of Stockx, and literally on day one and said, there's one person in the world who knows what you're talking about. That was really the serendipitous moment that led me to Stockex. And so I had now a perspective across multiple marketplaces, and lots of different elements of those marketplaces were pulled together uniquely into the model of what Stockx has ultimately become. Kind of like the New York Stock Exchange having a bid ask real time marketplace, kind of like Stubhub in terms of the organization, the structure of the marketplace, seeking to have partners in the industry, kind of like eBay in terms of connecting buyers and sellers on a platform, but in a very particular vertical market. And so I was uniquely positioned to have that perspective at the time. And I will say five years, five and a half years into the journey, what I really try to go back to, and it really was the purpose, another purpose of me joining Stockx was I really came in with not only the commitment, but the desire to really partner with the founders and ultimately develop, mentor, and hopefully my successor is the founder of one of the founders of Stockx. But to be able to go on a leadership journey with them, where I still feel as though, while I may have way more time and experience as being a CEO, I still feel like I'm really going back to the original vision of the founders of the company, that ethos of what it means to be a founder, and coming back to that as a true north for me to remind me as to what the purpose is. And that, I think, is a very big difference between a professional manager CEO and a founder, where the founder created that vision out of nothing. And there's an incredible power that's associated with that creation that I think founders can uniquely have. And so for me, it's actually been, I've gone back to that anchor a lot with. With Greg Schwartz, who's a president coo of Stockx. And we constantly kind of go back to that, to sit there and say, what is it about that original vision that we still have yet to accomplish? And I still think we still feel like there's a lot more to go.

Darren [00:17:05]:

Yeah, it's maybe no surprise we're in this conversation. Paul Graham just penned the essay founder mode. It's getting a lot of circulation, and it's both the creative act of bringing something to life that a founder uniquely brings to the role, but also the energy of a founder. And there is a big debate going on, is, can that energy be replicated by what I would call more of a professional CEO? And what I'm hearing you say is that you're, and maybe I'm putting words in your mouth, trying to integrate the very best of somebody that has the wisdom and experience with also the grounding in what the original vision was in the energy of Vander.

Scott Cutler [00:17:40]:

Yeah, what I would say, also say, I probably generally agree with that, although I guess what I would add to it, and I think about my own journey at Stockx. I was kind of there from the beginning in the sense that I had worked with the founders in kind of a quasi advisory relationship, and so I knew the journey from the very beginning. And so by the time that I had joined, there was so much connective tissue to that original story that it wasn't brought in completely new. And at the same time, I look at even Stubhub when I joined, that was 17 years into its existence as a company, and yet there was still a whole new opportunity to unlock. But lo and behold, who owns StubHub now? One of the founders of Stubhub, who left when it was acquired by eBay, started another company, and then ultimately has brought it back together again, full circle. Super interesting story, I'm sure.

Darren [00:18:40]:

Yeah. Yeah, for sure. I want to get back to this question of your leadership, because I know you've been very intentional about crafting the kind of leader that you are, and I imagine you had a vision for what that might have looked like when you were taking the job first at StubHub. Bring us into your leadership philosophy or philosophies, and what's unique about it. And where are you in that journey?

Scott Cutler [00:19:04]:

Well, I would hope that I'm on a continuum of that journey, which is a couple principles that I think are really important as leaders. One, going back to that principle of being in relationship, it really is, number one, first and foremost, a commitment to personal development. Which is you're a CEO in development, always, always learning, always having to change, always having to evolve. And I think the thing that I brought in to myself, but also in the leadership circle, so to speak, is being able to show up with a greater level of vulnerability. And vulnerability and personal development are really go hand in hand, which is vulnerability, saying there is opportunity for me to improve, there's opportunity for me to change, and then how do I actually be intentional and overt to say, hey, here are the things that I'm working on? And so personal development has been a key part, key pillar of what I believe is the leadership philosophy that I believe in so much. The second pillar has really been a commitment to being a great leader. Now being a great leader means that you can attract, you can retain, you can get great performance out of the people that you work with. And being great leader is not just a only contributor. You've got to be able to get people to take the hill with you, to follow you into challenging, uncertain, volatile times in a way that's inspiring. Obviously, we can't force people to do things. You have to lead people. And so being a great leader and what that means is something that I'm also focused on personally, but also with my leadership team and what I expect of the leaders that I work with. And the third is really producing results. And I think that's really probably sometimes one of the more challenging aspects because we have lots of things that we don't necessarily control about those results. We have macro environments, things that change. And yet, as a CEO, you really, there isn't always an expectation that you are moving the company forward. So those, I think, are the three pillars that I am constantly working on as a leader and with my leadership team.

Darren [00:21:18]:

Where are you right now? What's the thing you're working on?

Scott Cutler [00:21:22]:

Oh, yeah. So I'd say it's number three. We are in a very unique time. I feel as though it's the most unique time in my career. I was at a dinner the other night in Silicon Valley with a bunch of investors and a couple of other CEO's, research analysts. And I was sort of describing what I've seen in this consumer environment over the last five years. And it started with a pandemic that we had never gone through. It was fueled by a one time $10 trillion global stimulus that came into the global economy. That stimulus created inflation, created interest rates, created policies to then counteract that. And the pullback of a one time event into the marketplace created a couple of different things that now, I've learned a lot from which is one, people misread what that stimulus was for the world, misread it as an increase in demand or a shift in consumer behavior. And in fact, it was just a one time event. And now past it, we're also making the same mistake as we're comparing ourselves to the level of also a one time thing that came into the market, a level that we shouldn't necessarily compare ourselves against. And so I think now with the benefit of time, it's like, how do you work through that and then introduce into that as the CEO all of the social unrest, the global unrest, the political unrest, the requirement that you as a CEO show up in a very different way than you have before. Combine all of these elements and I really think, like the last five years have just been incredibly challenging to be a really successful CEO because of the tensions that you feel personally, the tensions that you feel for your people, the environment that you know that everybody is operating through, the real challenges that you have to stand up in front of the group and make sure you're saying the right thing or not the wrong thing, and then how to produce results in the middle of that. It's not just about the results, but you have to lead a company successfully through that environment. And so maybe we're at the tail end of that, which I believe. But I think what I'm still trying to create my own narrative, like what has it been like for me as the last five years, personally give myself a chance to really understand how has this impacted me as a leader of these volatile, uncertain times and what do I want to take from that? That's probably where I'm at right now is very reflective of where those last five years have been. Knowing that, I think we're coming into environment, hey, we're here today. Interest rates have come down for the first time in two years. This is probably a diff. We're at a different part of the journey and different part of the innings in the game. I think it's probably constructively more positive than it's been in the last five years.

Darren [00:24:14]:

Yeah, hopefully today marks the point in time where we experience a different five years going forward. But I'm sure they're going to be challenging, but in their own unique ways. And frankly, it's the reason I started this podcast was, I do agree with you. The last five years have really tested CEO's in their role. It is a unique role with incredible responsibility, enormous complexity, and I think it goes back to the three things that your most focus on personal development, becoming a great leader, and actually getting results. Those three things in combination have to be true. You're no stranger to hardship and challenge. You've put yourself in challenging situations. You're an extremist when it comes to sports and endurance and things like that. So I'm curious just to get that aspect of Scott revealed here and how that's helped you over the last five years and what advice you'd give other leaders, other CEO's when it comes to building the habits of endurance.

Scott Cutler [00:25:10]:

Yeah, so I think, as I think about this question, yeah, I do push myself. I push myself largely in the mountains. The mountains have been a source of inspiration, a source of challenge for me. I've told lots of different harrowing stories about surviving circumstances in the mountains. But in particular, I think it's the summit that's maybe the most important. And there's a great quote, and I have it really memorized, but this is the quote, and I'll pull from it, is that you cannot stay on the summit forever. You have to come down again. So why bother in the first place? Just this, and this is the important part of this quote. What is above knows what is below, but what is below does not know what is above. One climbs, one sees, one descends, one sees no longer, but one has seen. There is an art of conducting oneself in the lower regions by the memory of what one saw higher up. When one can no longer see, one can at least still know. And so when I think about what that means for me is that, yes, there have been moments of time where I've been on the summit or I've accomplished something, and it's momentary. I mean, it lasts for just a nanosecond. Hey, you've accomplished it. The other side of that is typically a descent, but when you've climbed, you've actually seen what that was like. You remember that, and you remember it when you're in the fog and when the trail is lost, but you have that memory of what it takes, when you could have much greater perspective. But you're pushing again for that next summit. That philosophy of climbing summits, descending, knowing there's another summit, is just, to me, that's the cycle of the challenge that I put myself in physically, but also, I think, mentally as a CEO, to put myself constantly in that challenge of, hey, reaching that place, descending, and then going after it again. And to me, that's highly motivating by what the challenge of what all of that represents symbolically, but also what I know what it takes in the heart, the lungs, the legs, the mind. To be able to do that.

Darren [00:27:33]:

Incredible. What an incredible quote. I'm gonna have to get that from you. What about on a more daily basis, do you have any daily rituals that you practice that are instrumental to who you are as a leader?

Scott Cutler [00:27:45]:

Yeah. So, I mean, again, in the same theme, I pretty much only run global businesses, and as a result, I've spent a lot of time on planes. I've spent a lot of time in different time zones. It's very challenging and taxing physically, mentally, on the body. And so pretty much wherever I am in the morning, I am pushing myself physically. And I think it's creating both the space for me to think because I also use that time to reset and to rethink. But it's also preparing me physically for what it's going to take to operate in really long day, typically long meetings, and then be able to go again. And to me, the power of this was not so recent. It was last quarter, but I really wanted to see our team in India. I had not been there before. I had been on the road for 15 weeks leading up to that trip, and I was going to go to India from Dubai, fly in at 01:00 meet at 01:00 a.m. stay all day, meet with the team for 12 hours of reviews, and then go back. And midway through that day, somebody asked me, like, how is it possible that you're able to stay connected in this meeting? And I just said, I've trained for this day. I've trained for this moment, but be able to be dialed in in that moment for 12 hours, being tired mentally, physically. I don't think I could do that if I really didn't. Don't spend time mentally and physically every day challenging myself in that way, because it's a very taxing position, emotionally and physically, mentally, in the CEO position, I.

Darren [00:29:29]:

Want to ask a tactical question around that, because the response I typically get for those that want to invest in their physical vitality is, I just don't have enough time. How do you, and I know the same is true for you. That excuse is ready for you to use. How do you prioritize? How do you create time?

Scott Cutler [00:29:46]:

We all have as much time as one another. We all make different choices with what we're going to do with that time. And so it's simply a matter of choice. But I will say, for me, that choice comes with a sacrifice. And to me, it's now really no longer a sacrifice. It's almost always been part of my life. But I think if I didn't have that morning sequence, the morning, and this is typically a time where nobody else is up, nobody else is there to disturb me, that's my time. If I said to myself, hey, midday is going to be the time that I'm going to go work out, no, never. It would not be possible. At the end of the day. Couldn't be possible. But for me, that first choice of what I'm going to do when I'm going to wake up is my choice to make. That's the only space that I've found, at least for me, where at least I have the least number of distractions at that moment in time. That's a time that I can choose where I want to spend it. Whether that's through meditation or prayer or physical activity or getting centered, that is my time.

Darren [00:30:52]:

I want to rewind the clock, maybe all the way back to young Scott. And as you know, I'm a big believer in our own self mastery and understanding where we came from and really understanding how our formative experience has shaped us. I'm curious to know who the young Scott was, how you were shaped, and what has been the implications for you as you lead your life, as you lead others.

Scott Cutler [00:31:16]:

I was with my brother this last weekend, and he's a head neck surgeon, I mean, effectively a neurosurgeon. And we were asking ourselves this question, and I look up to my brother a lot, but, you know, I think both of us actually, when we were young, we had paper routes and we had to get up early in the morning. We had purpose, we had to be up early in the morning. And maybe that was like a farmer growing up on the farm and having to milk the cows, but we had responsibility every day to deliver the paper. It's unfortunate, that's probably not part of very many youth experiences today, but there wasn't, even on a holiday, there wasn't that opportunity to say, I'm going to take this day off. It was every single day. And I think the power of that one thing early in my life, and that was I had that paper out from, I don't know, it was like second or third, maybe not fourth grade through as a senior in high school. So a long period of time, it was just then the rest of my life, I've been a morning person and a person with incredible purpose. When I wake up or responsibility, there's a blessing and curse associated with that, and the blessing has been that ability to fight through it. But also, I don't know, when I just don't sleep in, I'm up and ready to go without an alarm pretty much every day. So I have that. Hold on a second. What am I missing out on if I'm not awake early?

Darren [00:32:44]:

Yeah, you mentioned your brother, and there was a spark that I saw in your eyes when you said that. And I know how important family is to you and has been to you. I'm wondering if you could just comment on that aspect of your life, because as CEO's, we are not only managing and leading the businesses, we're playing a part in leading our families and our communities and just expand the circle of concern a little bit and bring us into that part of you.

Scott Cutler [00:33:07]:

Yeah. So my parents, incredible, incredible parents. Great examples to me. Six kids, so not easy, certainly probably being parents of six kids, three boys, three girls. We were a rowdy bunch, I would say, but a really close unit. A lot of inspiration from my mom and my dad in different ways. My dad, in one respect, followed his dad, which was, he was just incredibly dedicated to his work. And so my dad wanted to actually have a lot greater connection with the family, do great activities. And so part of being in the mountains and the outdoors, I would just give credit to my dad of wanting to really create great connections with his kids. And then my mom was more a quiet, soft lady, but with very high expectations. And those expectations were such that the Ralph Waldo Emerson quote about persistence was on our refrigerator. A little magnet on the refrigerator, just a reminder every single day to persist in the things that you're doing, and which is also a quote that stayed with me for my entire life. And so I think my parents definitely shaped who I ultimately would become, but probably the things that were then probably important pillars for me as a father, as a dad, as a human being.

Darren [00:34:33]:

What's changed about you most?

Scott Cutler [00:34:36]:

Oh, boy. From when to when?

Darren [00:34:41]:

Let's say your early adult years, when you thought you knew everything and life was going to go on forever and to where you are today. The last, call it a couple of decades.

Scott Cutler [00:34:50]:

Well, I mean, I think there was a particularly significant point in my life, actually. It was between eBay and Stockx, actually. And I was at a dinner down in LA hosted by Keith Farazzi, who wrote this book, never eat alone. And they had a guest there that was hand stamping bracelets with one word on it. And that one word was supposed to be your motivation. And the word that I chose was free. And so it was put on a bracelet for me that following weekend, someone very close to me took his own life, and it just rocked me still. I still think about it all of the time, but that notion of being free at that moment of time, I looked at that bracelet and it led to just some incredible changes for me personally and professionally that ended up opening door for stockx. At that time, I also took a board position with Brookfield, which has also been a really interesting part of my career. The work that I've done in suicide prevention took on a more personal meaning, which has been something that I've been involved with for now over 15 years. Led to a couple of years ago, my involvement in work around with vibrant emotional health, a nonprofit focused on suicide prevention, but the National Suicide Prevention Hotline. But that moment shook me and required me to think about what I needed to do to be more free to make the right choices, free in making a different set of decisions, a different set of priorities. And so that was, that was a very significant event in my more near adult life. And then the last six years.

Darren [00:36:33]:

Yeah. Was it the recognition of the fragility of life that really caused that? Or what was it about this tragedy?

Scott Cutler [00:36:39]:

It was that the importance of being in relationship with those closest around you, choosing to spend your time in pursuits that are positive and uplifting. Change your circumstances. If you don't like what you're currently in. Whole host of perspectives that when you have that perspective of you are free to choose, the circumstances that you're in can change with a simple choice. Is that freedom to choose aspect that was really powerful for me at that moment in time. That led to more changes in my career. Now, I've changed a lot in my career. I've had multiple different careers, so I've never been afraid to make the choice. But at that point in time, it was a really significant set of choices and changes that I was about to make.

Darren [00:37:30]:

If you were to be given another bracelet today, six years later, what word would it have on it?

Scott Cutler [00:37:36]:

Come back to me on that one. Let me steal on that one for a minute.

Darren [00:37:39]:

Okay.

Scott Cutler [00:37:39]:

I had to think when I was originally posed that question, I spent like a half hour thinking of it. Come back to me. I don't know what it would be. I'll think about that.

Darren [00:37:50]:

If you come up with something, we'll share it. We'll do it afterwards. I know you're a reader. Books, I know everybody's usually interested in books, can have the power to change worldviews and reshape thinking and catalyze new ways of leading. Has there been a book that's been instrumental to you, whether it's in your role as CEO or in your life in general.

Scott Cutler [00:38:12]:

My favorite book, and I've read it multiple times, it was written by Maurice Herzog, and it's called Annapurna. And it's the first successful attempt of climbing Annapurna, a mountain that they knew existed but didn't know where it was. And three quarters of the book was their search just to find the mountain before they could even climb it. And the chapters on climbing the mountain were relatively short. And the most interesting part of the book was after the mountain and all that they suffered as a result of throwing themselves, their lives at that quest. And there's another great quote at the end of that book to the climber that really couldn't climb anymore because of the injuries that he suffered. But it was essentially, are you going to climb Annapurna again? And the answer was, there are many annapurnas in the lives of men, which, again, probably the same symbol of the summits in our lives, the mountains in our lives, the different challenges that we likely are going to be faced with as individuals or as leaders.

Darren [00:39:22]:

This is a tough question, so you can answer it at any elevation, no pun intended, but what's the next Annapurna for you? And it doesn't have to be specific, but as you think about this next five years in your life, in your role as CEO, what shows up for you in that question?

Scott Cutler [00:39:39]:

I think one of the things, and it's not that it's always pertinent, but I think one of the most important things that a CEO or responsibilities that a CEO has is to do your best to find your successor. And for me, that started in partnership with founders of Stockx, but really developing succession. And so I've spent a lot of time thinking about that, and I've spent a lot of time mentoring and partnering and developing those around me. But the idea of succession is always really important because really try to do your best to leave an organization better than when you found it, but also to be able to leave it in good hands. And so there will be a point in time where that torch, that baton will be handed over, and I'll be a proud moment for me for what I've invested in that as a process. But it's also, wouldn't it be great as a leader that you had people around you that were focused on your success? And so I've tried to do that as a leader. And so whatever's next, I don't know. We'll see what it could be. But I will say, what's interesting is that I guess I don't spend as much time thinking about what is going to be that next thing. I actually am more interested on that door that opens. And in every instance it has been a door that's opened and it's been very clear to me that I should go through it. And when I think about the power of transitions, and for me, that was lawyer to banker to NYSE to Stubhub to eBay to Stockx, at a certain point in time, a door opened and I was willing to go through it at that point in time and not look back. And that's just been my journey, and that's not everybody's journey, but I'm excited about whatever door might open and what I would choose to go through in that.

Darren [00:41:42]:

Yeah, Joseph Jaworski refers to that as a cubic centimeter of chance. And what he's trying to convey in that is it's a small and fleeting door that opens or window that opens, and it's those that are really attuned to those things and have a pattern and sort of repeated history of seeing them and jumping live pretty interesting lives. So I love that you're sharing that. What incredible advice for listeners out there that oftentimes I think people are stuck on the sort of more linear, tactical what's next? As opposed to how do I create the conditions where I'm going to notice opportunities that are right for me and be willing to have the courage to take them.

Scott Cutler [00:42:21]:

Yeah.

Darren [00:42:22]:

Yeah. So I'm curious, as we wrap Scott, this has been an amazing conversation. If there's anything that we haven't covered that you'd want to make sure you add or even just a summary or synthesis of some of the things that you have spoken about.

Scott Cutler [00:42:37]:

Yeah. Like I said, we're in super interesting times, and I think what's required of us right now is maybe greater than what it was before, but at the same time, it allows us to open ourselves up for potentially much more growth than, quite frankly, maybe we could have experienced before. And so I think for me, the theme that I am continuing to take through this, and we've certainly had plenty of opportunity to talk about it today, is to be open to that, crack open to that vulnerability and realize that in the most challenging of circumstances or, and of times, comes this incredible learning, this incredible opportunity that probably will only be realized in the retrospective, but it's certainly happening to us right now. And so kind of giving yourself that moment to be appreciative and recognize that you're going through it, but that's okay. And not being so forced to say, what am I learning from that right now? I mean, that learning is going to come, but it's going to come because I'm open to how it's impacting me today.

Darren [00:43:47]:

Yeah. So I want to return to the bracelet and imagine that you haven't come up with a word. I'm not going to force you to, of course, but I'm wondering if I could re ask the question and ask you if you could give that bracelet to maybe one of your children or to a young person out there entering the professional world, and you could put one word on it. Now, of course, it's theirs to choose what word they want to put on, but if you were asked to put a. A word on there, what would you put on it?

Scott Cutler [00:44:12]:

You actually just said it. Choose. Someone gave me this analogy sometime before, but we can either be a cork or we can be a sail. A cork floats aimlessly in the ocean at the whims of the waves and the wind, and yet a sail can take that same waves and wind and harness it towards a direction again in the same circumstance. And so I guess when I say choose, choose to be a sail over a cork. But I think it's really powerful when we realize that we do have that freedom to choose. We have that freedom of choice to be able to make, and that would be the word for sure.

Darren [00:44:59]:

This has been a great conversation. So grateful for you and for the time we've spent together. Thank you, Scott.

Scott Cutler [00:45:06]:

Thanks for your partnership. Darren means a lot to you.

Darren [00:45:08]:

Very welcome. You're very welcome. I really love that conversation. What stood out most for me was Scott's reminder of how much freedom and choice we have and how we live and lead. I look forward to being with you on the next episode of One of One. And until then, I hope you live and lead with courage, wisdom, and above all, with love.

One of One is produced by Erica Gerard and Podkit Productions. Music by John LaSala.