The Exchanges

Q So we see enterprise spend on technology at eight to 12%. It's a varying range on a number of different verticals and kind of variables. What do you think that will be in 2030? I know it's a hard question, but. Yeah.

A Look, um, I can give you an example from, from Monday. You know, I've, I've actually done this, uh, I've, I've checked it myself. So I think a company like Monday, let's say we have like one billion in expenses, a company like Monday will probably spend, you know, 60, 70% of the budget on headcount and then seven, eight percent on software. But if we can flip the equation, And scale businesses, not on headcount going forward. You know, every, uh, CEO, uh, will be gladly increasing the expense on software because it's gonna be marginal compared to the headcount growth that you plan for your business going forward, and I think this will play out more and more into the future, um, as AI become more dominant, companies will spend much more on software and much less on headcount, uh, going forward because they'll just become more efficient, and they'll gladly spend that.

AI assessment note: “companies will spend much more on software and much less on headcount”

Q in terms of having seen many before. I think it's actually where younger CEOs struggle, where it's the first cycle, and the depths are so low, and the highs are so high when it's the first time you've done it. Can I ask you, penultimate one, Which other CEO do you most respect and admire? When you look across the board at your counterparts, which one do you like them?

A Yeah. So, so of course, and, and again, it's a personal friendship, but I really love, um, Avishai from Wix and Near. Um, and I, I feel like, um, you know, we're close friends. So obviously, as I have a lot of questions, um, but we also have other CEOs that I talk with. And, and again, it's hard for me to pick like a name because I don't know them personally. So, uh, you know, when you pick somebody, you take their entire personality with it. So it's really hard for me to pick, but look, I'm, um, the amount of information that I acquire through podcast, blog posts, videos, I probably acquire like 5:06 hour content a day. You know, I walk to work, I walk back, I do the dishes. I, I have, um, you know, my kids are saying, what do you have the, uh, uh, AirPods in your ear all the time? Because, um, I just feel we need to learn like crazy. I, I try to gather as much information as I can, and I think I learned a lot from different people's perspective. Also, I love the show you guys are doing, uh, the four of you, the three of you, sorry. So I listened to that, um, and, um, you know, I think, um, now, uh, you need to be learning as much as you can. So, um, That's the mode I operate in.

AI assessment note: “I really love, um, Avishai from Wix and Near.”

Q If it's true, where is, and then it does become a database, where is their value in that?

A Well, I think, I think this is, um, in my opinion, where investors in the public market get it wrong. Um, I think, you know, if you judge, but by what software is doing today, you're right. You know, if we don't change, eventually we'll become a database and nobody will buy Monday to track their work because you will buy software from other vendors that fulfill that promise. But That's not the way it's going to be played out. Uh, I think, um, you know, I can talk about specifically if you want, but we're, we're changing everything basically. Uh, I, I think that, you know, going back to what I've said that I think some of the investors or the public market, um, you know, I totally understand the way it reacted because I, I think what the public market is saying, essentially, we understand that the value is changing and software will be different going forward. But we don't know who will be able to change. And I get it, uh, because it's hard. Change is extremely hard, uh, especially for an existing company. Uh, and the public market is saying we don't know, uh, which company would be able to change. There's so many parameters to that, and we're out until we get that confidence. But if I take a step back, I think that, um, you know, software going forward, the TAM of software and how, how much companies are going to spend on software is going to be a hundred X for what it is today…

AI assessment note: “That's not the way it's going to be played out. we're changing everything”

Q I get you, but like everyone is cutting headcount to still increase it by mid teens is still a lot. Is it just like you need the people? I still don't understand. Yeah.

A So, so look, the way I look at this is this. I'm not arguing that companies need to become more efficient. Uh, so I'm not dismissing it. And We will become more efficient. I'll give you some examples of things we're already doing. Uh, first of all, uh, we had a team of about a hundred, a hundred SDRs, uh, and we now doing, doing it with agents. A hundred percent is being done with agents. We move those SDRs to do outbound. Uh, all of our support is being done with AI. All, all of our developers is using plot code and cursor. So, you know, um, um, I don't think there's any company that's pushing AI efficiency more than we do. We want to be at the forefront of that, and we're pushing that with all cylinders, and we are becoming more efficient.

AI assessment note: “I'm not arguing that companies need to become more efficient.”

Q I get you, but like everyone is cutting headcount to still increase it by mid teens is still a lot. Is it just like you need the people? I still don't understand. Yeah.

A So, so look, the way I look at this is this. I'm not arguing that companies need to become more efficient. Uh, so I'm not dismissing it. And We will become more efficient. I'll give you some examples of things we're already doing. Uh, first of all, uh, we had a team of about a hundred, a hundred SDRs, uh, and we now doing, doing it with agents. A hundred percent is being done with agents. We move those SDRs to do outbound. Uh, all of our support is being done with AI. All, all of our developers is using plot code and cursor. So, you know, um, um, I don't think there's any company that's pushing AI efficiency more than we do. We want to be at the forefront of that, and we're pushing that with all cylinders, and we are becoming more efficient.

AI assessment note: “I don't think there's any company that's pushing AI efficiency more than we do.”

Q What do we expand on next? We've got seven and a half million. Where do we go now?

A Okay. So something that I feel we've done, uh, which was really meaningful, um, to make the company successful in scale, um, we, we actually built a very powerful performance marketing engine. Uh, we call it big brain. It's a tool we build within the company to track every campaign, uh, every user, um, We made an early decision in the life of the company to build this tool internally. It was very tempting to use off-the-shelf software for that, to do analytics, monitoring, but like, um, you know, we were very ambitious. We said, we're going to build a huge company. I don't know where we got the confidence, but we just said, we're going to build a huge company. We need to build our own tool because this is going to be a main part of our ability to scale this machine. So we built this tool. We invested heavily into that. Um, so we tracked everything, every click, every view, uh, every ad that any user saw, all the way through the sign-up funnel conversion, uh, expansion, and so on. And with that, we built a very efficient marketing machine. Now, when I say efficient, I think a lot of founders get this wrong, and maybe this is an important message. Um, something that we optimized for from the very beginning was cash flow. Um, and I, I think a lot of SaaS metrics are Uh, optimize not for cash. If you think about standard SaaS metrics like LTV, CAC, um, um, ARR, whatever, they never…

AI assessment note: “So something that I feel we've done, uh, which was really meaningful”

Q Okay, I get you, but a lot of other people say, and I see this myself as an investor, it's such a different company to build an enterprise business, not just sales teams. You need customer success. You need, I mean, you need SDRs, you need AEs, you need CS, you need security, SOC IIs, compliance. Is it a completely different business to build?

A I think there's a difference between, um, a company that pivot into the enterprise, uh, and, and the company that Want to sell to the enterprise in addition to selling to SMB and mid-market. And, um, we didn't pivot into the enterprise. It's not, a lot of companies say, look, um, you know, we tried SMBs, we tried mid-market, we spent so much energy and effort, you know, uh, converting those customers. We might as well just focus on the large ones and get a higher ICV. That wasn't our strategy. We wanted to capture Like we call it like a pyramid, the whole pyramid, the baseline of the SMBs and mid-market, but also the, the tip of the pyramid with the large enterprises. So it was always about adding that layer, but also making sure the product is good enough for SMBs and mid-market.

AI assessment note: “So it was always about adding that layer”

Q the public markets and a lot of people are having is, wow, if we see agentic evolution in the way that we think it will happen and proliferate, then there are core systems, potentially like a Monday, like a Salesforce, which bluntly are never used again and just turn into databases, if anything, which agents crawl on top of. Why does Monday not become a layer that gets extracted away?

A Yeah, so first of all, I think there's like, uh, five Doomeday scenarios I'm familiar with, so that's one of them. Uh, but, you know, I'll just take you back a little bit in time, but, uh, first of all, it was everything about, uh, people will Vibe code their own apps. That was one of them. Uh, another, uh, um, you know, uh, option for Doomeday scenario was that, uh, some players like, you know, Entropic or OpenAI or Gemini will capture You know, all the value, uh, from enterprise software. I think that's another scenario people are talking about. And the third one, uh, is maybe what you refer to as, um, you know, um, a platform becoming essentially system of records, uh, and then other companies capturing the entire, uh, value, uh, that those companies offer. So, uh, I don't mind going through each one of them. If you want, uh, I can address each one of them.

AI assessment note: “I don't mind going through each one of them. If you want”

Q OpenAI at 500, or Anthropic at three 80, which one would you rather be an investor in?

A First of all, I think we all need a little bit of, uh, humility. Uh, what I've heard in the last year is, is, is this. Microsoft is the most amazing companies. Microsoft is, is finished. Google is finished. Google is the best company on earth. OpenAI is the most amazing company. OpenAI is finished by Entropic. And this is like three months cycles. So it's, well, I feel it's like a, uh, and we say, Um, you know, Yahoo and Netscape gonna suck all the value from the internet revolution, and we know nothing. Uh, so I feel we're in the beginning of an exponent. Um, we don't know. It's really hard, uh, to say who's gonna win, who's gonna lose. Uh, it's a horse race, and I think we're probably missing 90% of the picture of how it's gonna play out. So, I don't know. I'm not an investor. I'm not, uh, I'm making bets on Monday, not on other companies. Definitely, I feel And Tropic have a little bit more momentum right now. They can change. Uh, and it will change, I'm sure. Um, so I don't know, to be honest.

AI assessment note: “Definitely, I feel And Tropic have a little bit more momentum right now.”

Q the public markets and a lot of people are having is, wow, if we see agentic evolution in the way that we think it will happen and proliferate, then there are core systems, potentially like a Monday, like a Salesforce, which bluntly are never used again and just turn into databases, if anything, which agents crawl on top of. Why does Monday not become a layer that gets extracted away?

A Yeah, so first of all, I think there's like, uh, five Doomeday scenarios I'm familiar with, so that's one of them. Uh, but, you know, I'll just take you back a little bit in time, but, uh, first of all, it was everything about, uh, people will Vibe code their own apps. That was one of them. Uh, another, uh, um, you know, uh, option for Doomeday scenario was that, uh, some players like, you know, Entropic or OpenAI or Gemini will capture You know, all the value, uh, from enterprise software. I think that's another scenario people are talking about. And the third one, uh, is maybe what you refer to as, um, you know, um, a platform becoming essentially system of records, uh, and then other companies capturing the entire, uh, value, uh, that those companies offer. So, uh, I don't mind going through each one of them. If you want, uh, I can address each one of them.

AI assessment note: “If you want, I can address each one of them.”

Q If it's true, where is, and then it does become a database, where is their value in that?

A Well, I think, I think this is, um, in my opinion, where investors in the public market get it wrong. Um, I think, you know, if you judge, but by what software is doing today, you're right. You know, if we don't change, eventually we'll become a database and nobody will buy Monday to track their work because you will buy software from other vendors that fulfill that promise. But That's not the way it's going to be played out. Uh, I think, um, you know, I can talk about specifically if you want, but we're, we're changing everything basically. Uh, I, I think that, you know, going back to what I've said that I think some of the investors or the public market, um, you know, I totally understand the way it reacted because I, I think what the public market is saying, essentially, we understand that the value is changing and software will be different going forward. But we don't know who will be able to change. And I get it, uh, because it's hard. Change is extremely hard, uh, especially for an existing company. Uh, and the public market is saying we don't know, uh, which company would be able to change. There's so many parameters to that, and we're out until we get that confidence. But if I take a step back, I think that, um, you know, software going forward, the TAM of software and how, how much companies are going to spend on software is going to be a hundred X for what it is today…

AI assessment note: “if we don't change, eventually we'll become a database”

Q Do you think private competitors have an advantage on you that you don't have because you're public? If you look at Stripe and Adyen, I think Stripe have an inherent advantage in being private that Adyen don't have because they're public in what they can do, how aggressive they can be, how they approach product, you name it. Do you think that's the case here?

A I think the opposite. The opposite. Because if you kind of relate to what I've said, you know, I feel like I was kicked in the head so many times by now that, okay, I get it. And I feel when you're private, you know, you can try and ignore what's going on and even say, you know, everything is okay. But for me, you know, I get it. And, and I don't blame the investors. I think investors are super sophisticated, And it's, it's an amazing market. And I think when the investors are saying, I got the message, you know, uh, I got the message and they're right. Um, they don't know who's going to be successful, but I think this is where they get it wrong because I feel if you, basically, I think what I'm trying to say, uh, Harry throughout our conversation is, are you playing defense? Or are you playing offense? And I think every, every day I go on Twitter, and I read what people are saying, and everybody is publishing an article, you know, this company has more robust system of records. This company has a moat. This company is enterprise. Who cares? Who cares? What are you arguing? Who's gonna change last? Who have more time? I'm saying the opposite. This is the biggest opportunity. Everybody has to change. Everybody has to change. The faster you change, the better. And I think some, some kind of companies will not be able to change because I don't know, the founders are not there beca…

AI assessment note: “I think the opposite. The opposite.”

Q Who do you think will change more effectively, HubSpot or Salesforce?

A Look, I think, um, being a bigger company is harder because it's hard to move humans. That's the hardest part. I think people think enterprise is a benefit, is a benefit. Maybe SMBs is better because SMBs are more open to adopting new technologies. When you play defense, some of those things might look as disadvantages, selling to SMBs or being a smaller companies. If you play offense, those disadvantages might become advantage because those customers might be sooner to adopt technology. And we'll buy those products before enterprise will buy. So, um, I don't know, to be honest, and it's, it's for them to prove, uh, you know, I, I will never underestimate each one of those companies because they've built incredible things. I think in general, I think investors underestimate incumbents ability to change their willingness to change the motivation to change. Um, you know, private companies are great, but you know, those companies reach where they're reached. Because of multiple things, and they're very successful companies, and I think the cycle is going to shift once, um, you know, like fungus after the rain, you're going to see another public company change and accelerate, another one accelerate, and then investors are going to say, hmm, you know, it happens, so let's rethink who else is going to change over time, and valuations will go up.

AI assessment note: “So, um, I don't know, to be honest, and it's, it's for them to prove”

Q Can I ask you from a, like, personal perspective or leadership perspective, when you have a challenging period like this, What do you know now about how to galvanize a team when a stock price is so impacted? And of course, people look at it every day and look at their net worths. Yeah.

A Look, uh, it's, it's been a roller coaster. Uh, it's been hard, you know, emotionally, um, everything, uh, in the last few months. I, I can share that, um, you know, uh, it's still fresh, but you know, the last earning call, the stock went down to 70, um, uh, dollars. You know, obviously when the stock is going down and, and I've seen all the earning calls before Monday and after Monday, I, I felt like no matter what, Companies are gonna announce, uh, the stock is gonna go down 20%, so I was not optimistic, I was not sure what's pricing and what's not, but it is what it is, I get it, the sentiment is so negative.

AI assessment note: “it is what it is, I get it, the sentiment is so negative.”

Q Can I ask you from a, like, personal perspective or leadership perspective, when you have a challenging period like this, What do you know now about how to galvanize a team when a stock price is so impacted? And of course, people look at it every day and look at their net worths. Yeah.

A Look, uh, it's, it's been a roller coaster. Uh, it's been hard, you know, emotionally, um, everything, uh, in the last few months. I, I can share that, um, you know, uh, it's still fresh, but you know, the last earning call, the stock went down to 70, um, uh, dollars. You know, obviously when the stock is going down and, and I've seen all the earning calls before Monday and after Monday, I, I felt like no matter what, Companies are gonna announce, uh, the stock is gonna go down 20%, so I was not optimistic, I was not sure what's pricing and what's not, but it is what it is, I get it, the sentiment is so negative.

AI assessment note: “it's been hard, you know, emotionally... the sentiment is so negative.”