The Exchanges

Q billion. I mean, that's a weird raise in the way, I mean, it's brilliant raise. But in the ways that it's minimal dilution actually, but a lot of money. Fifty million buys a lot, a lot. And so the traditional notion is, well, VCs wouldn't like that because they can't get the ownership that they need. How do you think about that? Raise the structure of it. I'm just fascinated.

A It actually came about really fast, um, uh, and actually goes back to being cash flow positive and not needing it. I think you sort of are able to do- You're able to break the rules. You're able to break the rules because there's more demand than, than, than, uh, than supply. Um, but, but, but, but, you know, the reason we raised that round was also, I think was an interesting one where we didn't have a need for fifty million dollars. But we raised it because we saw that the, the talent was, was flocking to safety. Well, all the people we wanted to hire needed some signal to say, like, oh, this company is stable, and I, and I'm willing to work there. Uh, and so in March or April, 2020, Again, we didn't have the cash needs, but we needed an index and co-to stamp that, hey, I'm putting fifty million dollars in this company that is growing and that actually really helped us recruit and like break that.

AI assessment note: “You're able to break the rules because there's more demand than, than, than, uh, than supply.”

Q kind of the rollout of that. I do want to ask you, because you mentioned kind of the rebundling-bundling,, and with that, you covered just such a broad, Swatheed in terms of kind of the customer population, and you have this unique vantage point in terms of how teams behave and operate. And so what have been some of your core observations as people move to remote work fundamentally overnight?

A Yeah, this isn't a really odd our time to be building a collaboration tool, because at one hand, we are building a tool that so many people are using to do their work, but on the other hand, like we've all been pushed into probably the biggest A-B AB experiment of our lives, where we all have to work From our homes. And ironically, like, you know, we're building a tool that is so useful for distributed teams, but Notion as a company, we're only 40 people, so we very much focused on building this small team in our small office in San Francisco, and we had never really worked distributedly before. So it's been a great experiment, and it's actually forced a lot of our thinking, and we've gotten more empathy around just how people work distributedly. And it turns out that, I think, as Sarah mentioned, like, Slack and Zoom are fantastic for Synchronous communication that allows you to just chat real time or talk real time or video. But a big portion that's left out from that is actually doing your work, like actually writing documents, like actually being able to collaborate on that and see real time how people think and what kind of ideas they have. And this is where Notion becomes really handy. Because we're a small team, we actually put almost half of our team working on features that allows people to be more productive in this unique environment. I think two weeks ago, we launch…

AI assessment note: “Slack and Zoom are fantastic for Synchronous communication... big portion that's left out”

Q I have a question for you. On the ten billion, it's a big, big valuation. How did you think about that, and how do you think about growing into that over time?

A Well, I think the, I mean, going back to what we discussed, right, I think in the very long term, it will, uh, be a function of, uh, the company's sort of multiple, the function of, you know, multiple of revenue, and the premium we'll get is based on us being able to grow fast, or continue to grow fast, and do it at, uh, in an efficient way. The, the great thing about Notion is that we just operate in a very large market. Like, I think the, the different categories that we play in has, Like, I think we've barely scratched the surface on it, and so there's, you know, we're pretty excited to sort of, like, keep building towards that vision.

AI assessment note: “multiple of revenue, and the premium we'll get is based on us being able to grow fast”

Q I have a question for you. On the ten billion, it's a big, big valuation. How did you think about that, and how do you think about growing into that over time?

A Well, I think the, I mean, going back to what we discussed, right, I think in the very long term, it will, uh, be a function of, uh, the company's sort of multiple, the function of, you know, multiple of revenue, and the premium we'll get is based on us being able to grow fast, or continue to grow fast, and do it at, uh, in an efficient way. The, the great thing about Notion is that we just operate in a very large market. Like, I think the, the different categories that we play in has, Like, I think we've barely scratched the surface on it, and so there's, you know, we're pretty excited to sort of, like, keep building towards that vision.

AI assessment note: “in the very long term, it will, uh, be a function of... multiple of revenue”

Q What does it help most? Talent? Customer acquisition? Pure brand and market and ego? What is the thing that is the needle mover for?

A I think the thing I would say about Sequoia, having gotten to work with them more in the last few years is that, you know, similar to how we demand excellence from our, from our employees, I think they demand excellence from their companies. If you like that pressure, if you like wanting to build a generational company, I think you get the best, you know, set of questions from them. You get a lot of really, Sort of nuanced feedback and data points from them. Um, you know, right now we work with Pat Grady. I mean, Pat has seen literally every like generational SaaS company closely, like really closely, right? Like he could basically like, and everything is memory. So he can essentially tell you, you are where, you know, ServiceNow was like, 12 years and two quarters ago, right? And I think I think it's like, he's seen the movie so many different times.

AI assessment note: “You get a lot of really, Sort of nuanced feedback and data points from them.”

Q What's the most contrarian or unorthodox advice that you'd have for founders listening?

A I think in general, I would say like almost all advice is genius for a subset of people and completely rubbish for the rest of them. I think you can take literally everything. Like, I mean, even founder mode, founder mode, Is really good if you have a founder who's right a lot. If they're not, like, you know, God bless that company. Uh, and so, so I think, I don't know, I think I've moved away from giving advice to, um, to sort of, like, more share my experience with what happened at Notion or Pulse, because I found that to be, like, I think hopefully you can take the right learnings from them and apply it to what your situation is. Rather than a more generalized advice.

AI assessment note: “I've moved away from giving advice to, um, to sort of, like, more share my experience”

Q How did you see it hurt you? Inability to hire people, the people did not having direction. What was it that was, ah, this is hurting us?

A You know, the way we looked at it was just the percentage of business that is driven by sales or sales assisted wasn't growing as much as we would have hoped. Um, But you know, there's a, there's actually an interesting piece here around sales at product-led growth companies, right? Uh, which is that I think, you know, in many ways, product sells itself, uh, at these companies and, and, and you think you can do sales a slightly different way because you have all these leads, right? And, and that actually is, is also a blessing and a curse. Yes, it's a blessing because you have all these leads, but it's also a curse because I think your broader team starts to depend on it. It's like, oh, the product is not really signing up the right lead. This is why I'm not able to close sales, right? Which if you didn't have the product, if you didn't have anybody signing up on your website, you would still be doing, you know, going out and trying to find the lead. And so you'd be, you know, you'd be sort of, uh, complaining about that part a bit less.

AI assessment note: “percentage of business that is driven by sales or sales assisted wasn't growing”

Q How do you not let that alter your mindset towards focus? You got fifty million now actually. You can, you can build that new team. You can build that new product. You can do that little like or higher. How do you retain that discipline? When fifty million drops?

A Frankly, I don't know. I, I think this might sound weird, but I think we're just, like, not wired that way. Like, in, in some ways, like, yeah, in some ways, like, there's, there's more cash in Notions Bank today than the history of its race, right? So it's like, in some ways, like, we've produced cash, we, we haven't spent any of it. And some people might look at it and be like, hey, you're not really utilizing the cash that is in hand, you know, you should, but I think, you know, One of the things that, um, Are you being aggressive enough? Yeah, so that's a question people ask. One of the things, uh, I learned, this was actually one of my favorite tools of duty inside Notion was when I was running finance for a year. First of all, I thought finance, like, at least before I actually worked on it directly, I thought this is just like bookkeeping, stay out of trouble, like, stay compliant. But only as I worked for a year and I sort of got introduced to the whole world of, um, FP&A, And BizOps. And I was like, wow, this is so strategic. And once you get to a certain scale, so Notion got to about a hundred million in ARR, um, a couple of years ago, and you realize like, oh, there's all these interesting comps you can look at, public comps that you can measure your performance against as well, right? If you think about your job as like, well, there's all these different projects yo…

AI assessment note: “Frankly, I don't know. I, I think this might sound weird, but I think we're just, like, not wired that way.”

Q A final one for you. What question are you not asked by hires, by team members, by investors, by people? Do you feel you should be asked more?

A One of the things that I've been reflecting on is a little bit sort of like that, you know, the Steve Jobs, uh, uh, speech around how you connect the dots looking back. I didn't appreciate it when I was growing up in, in this small city in Gujarat in India, how sort of growing up there and surrounded by Friends and family there, how it would have shaped the things that I do today, and so I think some of those, some of that exploration is super fun to, especially as I get closer to 40, it's like, wow, like, you know, all my creative genes probably comes from my mom, and all my business genes probably come from my dad, and, and like all these different things that I did when I was young, uh, in some ways has made What I do today possible.

AI assessment note: “One of the things that I've been reflecting on is a little bit sort”

Q How do you not let that alter your mindset towards focus? You got fifty million now actually. You can, you can build that new team. You can build that new product. You can do that little like or higher. How do you retain that discipline? When fifty million drops?

A Frankly, I don't know. I, I think this might sound weird, but I think we're just, like, not wired that way. Like, in, in some ways, like, yeah, in some ways, like, there's, there's more cash in Notions Bank today than the history of its race, right? So it's like, in some ways, like, we've produced cash, we, we haven't spent any of it. And some people might look at it and be like, hey, you're not really utilizing the cash that is in hand, you know, you should, but I think, you know, One of the things that, um, Are you being aggressive enough? Yeah, so that's a question people ask. One of the things, uh, I learned, this was actually one of my favorite tools of duty inside Notion was when I was running finance for a year. First of all, I thought finance, like, at least before I actually worked on it directly, I thought this is just like bookkeeping, stay out of trouble, like, stay compliant. But only as I worked for a year and I sort of got introduced to the whole world of, um, FP&A, And BizOps. And I was like, wow, this is so strategic. And once you get to a certain scale, so Notion got to about a hundred million in ARR, um, a couple of years ago, and you realize like, oh, there's all these interesting comps you can look at, public comps that you can measure your performance against as well, right? If you think about your job as like, well, there's all these different projects yo…

AI assessment note: “I think we're just, like, not wired that way.”