The Exchanges

Q ask, you mentioned the explosion there around the cool kind of salesperson and head of finance kind of being a counterbalance to that. What we're seeing a lot today is kind of very early hiring of head of peoples. How do you think about the hiring of head of Peoples. Is that a counterbalance to this too? And I guess what lessons do you have around hiring head of Peoples?

A Yeah, that's a very difficult hire because, you know, Silicon Valley is very tech oriented. So here, at least if your company happens to be here where we are, there are lots of tech talent. But HR isn't the bread and butter of Silicon Valley. That's not what it's famous for. So that's a tricky one. For me, I think the founders are sort of the HR function in the early years. A lot of the cultural elements are The values. How you deal with different things. Should people be able to take time off whenever they want? When should they call in? Do they have to come into the office or not? What's the culture? What's the language we use? How do we communicate with each other? All these kind of things. I think it should come from the founders in the early years. So the first time when you really need HR, I believe, is sort of when you start to scale the recruiting machinery. Recruiting typically reports to HR. So that's where you need it. And there are some thorny, tricky issues sometimes around employees. If things are not working out, There might be legal risks and so on. That's, you need the person. But I kind of think around hundred employees plus is when it starts mattering a lot to have really sort of strong head of HR.

AI assessment note: “around hundred employees plus is when it starts mattering a lot to have really”

Q Can I ask, in terms of requiring a different way of thinking, how do you think about how you yourself need to change as a leader? In the movement to phase three.

A Yeah, I mean, I think in the first phase, obviously you're very hands-on. You can have your arms around the whole thing. You can understand everything that's going on. The company size is below Dunbar's number, which is 150. So you can keep everything in your head. The second phase, you move to this phase where you really kind of just have to have some checks and balances, but you're trying to really just grow the machine as fast as possible. So you can do the same thing. The third phase, the challenge is your mentality has to actually kind of shift. At that scale, it's no longer the case that You want people that can roll up their sleeves and do it themselves. Rolling up your sleeves and doing it yourself is actually an anti-pattern at our face, because that means you're solving it in an ad hoc way. I have to now make sure that any problem we solve at Databricks gets fixed and never happens again. Initially, we used to say in the early years, we used to say, you have to be a co-founder, you have to own it. As an example, if you walk into the kitchen and there's something on the floor, pick it up, even if you didn't put it there. This is your company. Roll up your sleeves and clean up the floors, right? This is our company. At this stage, the shift in mindset is more like, no, let's not pick up what's on the floor. Let's figure out how I got there in the first place. What's the…

AI assessment note: “I have to now make sure that any problem we solve at Databricks gets fixed”

Q Totally with you in terms of starting earlier. When we think about the kind of core pillars in this You mentioned kind of building out the sales, building out the marketing, and kind of scaling go-to-market, but like, what are the core pillars, from a more granular perspective to you, of this scale-up GTM phase?

A Yeah, I mean, in my opinion, you should start with actually hiring head of sales. The recommendation, actually, that we got was hire first the head of marketing, because, you know, the conventional wisdom in Silicon Valley is you need a marketing person to create the story and write the marketing material, otherwise the salesperson that you hire doesn't know what to sell. But I disagree with that. I actually think you should hire a sales leader first, and you, the founders, together with that person, should go out and meet customers and try to figure out how do we sell this product in the initial phase. So that's going to be your most critical hire. As soon as you've done that, and you've ad hoc sold to a bunch of customers, and you've started scaling this, that's when you hire a marketing leader, and you make sure that that marketing leader works really well with the sales leader that you hire, because there's always friction between marketing and sales in pretty much all these companies, right? So that's actually a marriage that needs to work really, really well. So finding the marketing leader that works well with the sales leader that you hired, that way they can sort of systematize a little bit the story, the message that you tell, and start generating the demand that you need to sell that product. And then third, you quickly, actually much faster than you think, need a st…

AI assessment note: “in my opinion, you should start with actually hiring head of sales.”

Q You mentioned valuations there a couple of times. And as you said, kind of historically, you know, crazy before, even crazier now, And you said before, Series A valuation does not matter anymore. As an investor, I'm super intrigued by this. Why do you think that is, and what are your thoughts on that?

A Yeah, I mean, look, running a company is a marathon. It's a long marathon, and if you're successful, it's gonna go on for, you know, a very long time. So, you know, these are just points in time. Someone said you're valued this much right now. This is your potential right now. So I think people obsess too much by that. It doesn't really matter that much, and people try to get the biggest valuation they can possibly get. I think in terms of dilution, if you look at it, Oftentimes, the valuation doesn't actually matter that much. People try to get another 10 or 20% higher valuation than what they have on the table right now, but you're only raising 10% of that valuation or something like that, so actually it's only gonna make one or two percent difference in terms of dilution, so people waste too much time on that. It doesn't really matter in the long run that you got that a little bit higher valuation. The higher valuation also means higher expectation, because whatever valuation you raise that, if you raise that a billion, they want to have an exit around four or five billion then, and for you to get there, Assume maybe a 10 X multiple. So you probably need to get to a four hundred million revenue eventually on the line. Those are big shoes to fill.

AI assessment note: “actually it's only gonna make one or two percent difference in terms of dilution”

Q That is very kind of you, but I actually spoke to Ben before the show, and he mentioned you're fleeing to Iran as a refugee and living in a Swedish ghetto, so it's a little bit of a different start for me, bluntly, but an offshoot is how did that happen, and on reflection, how did that experience impact your mindset?

A Yeah, I mean, I guess the interesting thing was that we fled as refugees maybe when I was six years old from Iran to Sweden, but the really interesting aspect of that was that I was from a wealthy family, and I was quite spoiled as a kid in Iran. I remember the teachers would give me gifts every day, but these gifts obviously were, like, provided by my parents in front of all the classmates and so on, and then we went to this, you know, poor neighborhood in Sweden, and it was the polar opposite. Barely had, sort of, food on the table, so I think it's unique experience to get both. At early age, get to experience both, and I think That helps you, because on the one hand side, shows you how difficult things can be, but on the other hand, it kind of tells you that, hey, you can actually do it. You can get there, because you've seen that. You can power through this as well. So I think it was kind of an interesting perspective that I got, which is kind of unique, weird social experiment.

AI assessment note: “shows you how difficult things can be, but on the other hand”

Q Yeah. Can I ask, how do you think you approach risk? Because with that mindset, you think, well, I'll take all the risk in the world then if I've seen both sides. How do you think about how you think about risk?

A Yeah, that's actually an interesting question. I think I actually approach risk maybe a little bit different from some other people, at least. I take calculated risk, and I believe in taking calculated risk. Otherwise, I don't think anything great can ever happen. But at the same time, I'm extremely paranoid, because I know, like, you can lose everything in a heartbeat. So you get this kind of weird dichotomy, where on the one hand side, I'm kind of like an optimist, and I take calculated risks, because I know otherwise you can't, you know, make. But then on the other hand, I'm always thinking about, we can lose everything. Everything can go just Absolutely to zero overnight. So during the years when Databricks was sort of growing super fast every year, I would force the executive team every year to do this sky is falling exercise. And I remember the executive team found it a little bit bizarre. Like, you know, we're like one of the fastest growing startups here and we're doing so well and it's everything is up, up to the right. And I would force them to say, look, no, what if the world came to a screeching halt? What if like year 2000 happens again to IT? And every year we did these plans and people were like, is this really worth spending our time on? Shouldn't we be thinking about how we can seize the day? I mean, we have so much opportunity in front of us. Instead, we're si…

AI assessment note: “I take calculated risk... But at the same time, I'm extremely paranoid”

Q Can I ask, do you and did you feel the pressure and how do you think about like the weight of expectation and how you deal with that as a founder?

A Yeah, I mean, we always had this. We're raising now. What's the valuation? How big are those shoes? Can we grow into them? Because, you know, we're hiring a lot of people. We're burning a lot. We need to probably come back and ask for more money. And what if the climate is not as hot then a year or two years from now? What if multiples are 10 X instead of 20 X or 30 X. So yeah, that pressure was always on. I think it was good. I mean, depends on the type of people, but I think Databricks has a lot of sort of competitive, accountable sort of people. And for us, I think we thrive under that pressure. So I think it was good for us. It made sure that we dotted all the I's and crossed all the T's.

AI assessment note: “for us, I think we thrive under that pressure.”

Q Totally with you in terms of starting earlier. When we think about the kind of core pillars in this You mentioned kind of building out the sales, building out the marketing, and kind of scaling go-to-market, but like, what are the core pillars, from a more granular perspective to you, of this scale-up GTM phase?

A Yeah, I mean, in my opinion, you should start with actually hiring head of sales. The recommendation, actually, that we got was hire first the head of marketing, because, you know, the conventional wisdom in Silicon Valley is you need a marketing person to create the story and write the marketing material, otherwise the salesperson that you hire doesn't know what to sell. But I disagree with that. I actually think you should hire a sales leader first, and you, the founders, together with that person, should go out and meet customers and try to figure out how do we sell this product in the initial phase. So that's going to be your most critical hire. As soon as you've done that, and you've ad hoc sold to a bunch of customers, and you've started scaling this, that's when you hire a marketing leader, and you make sure that that marketing leader works really well with the sales leader that you hire, because there's always friction between marketing and sales in pretty much all these companies, right? So that's actually a marriage that needs to work really, really well. So finding the marketing leader that works well with the sales leader that you hired, that way they can sort of systematize a little bit the story, the message that you tell, and start generating the demand that you need to sell that product. And then third, you quickly, actually much faster than you think, need a st…

AI assessment note: “you should start with actually hiring head of sales.”

Q wrote a schedule that I'm just It's completely ignoring given how interesting this is. Can I ask, when you have, as you said, the explosive growth that you did in the early years, and just everything is rocket ship bluntly, is that almost quite difficult because the confidence is so high that it's almost unsustainable, or is it actually just a rocket ship and you have to ride that momentum?

A No, I mean, you obviously have to ride that momentum. You should seize the opportunity as quickly as possible. The problem is, as everybody says, success masks all problems, so you can do really, really well, and you don't need to do all your homework. You don't need to get All your ducks in a row. You can get away with cheating in a lot of things, a lot of processes, a lot of things that, you know, if things were really scarce, you would have to work so much harder. I mean, let me give you an example, like leads coming in. We had so many leads coming in that, you know, our process around how we handle them wasn't sort of super tight. Whereas if you're a company that's barely growing and every lead you get, you're going to do everything around like making that customer successful. Right? So I think the thing to watch out for, and I tried doing this all these years, Is sure, everything is up, up to the right, but how do we actually make sure that we still, like, we've gotten lucky. We can lose all of this. What are the things we need to do to just make sure that if we hit roadblocks and things aren't that well, how do we make sure that we're buttoned up for that? And one of the things I always asked the team to do was they would always show up. They were very proud. I mean, you get into this mentality of we are the best. We are awesome. You know, it's like that queen song, right…

AI assessment note: “you obviously have to ride that momentum. The problem is, as everybody says, success masks all problems”

Q Totally get you in terms of that profile. In terms of like the timeline, as you said there, three years, a lot of founders who listen to this show are in the early phases themselves. How do you think about runway, the right amount to raise? And a question that I always have, which is especially in this capital rich environment, do you raise if money's on the table?

A Yeah, I think you should do that. I mean, I think it's one of the things I saw when we started. I'm not going to name the company names, But we were among sort of the early days, maybe among 20 other startups. Same phase as us. They all had some big claim to fame, like, of some sort. It's like, oh, this person invented this, or that person is a super famous this, or they all had something really special going for them, and we were probably the smallest of all of those. And at this point, I think all but maybe one or so has disappeared. Either got bought, or they've closed down, and so I kind of got to see the journey, and that also made me paranoid, by the way, seeing, like, how they all kind of spiraled Out of control. And one of the common mistakes you saw that they did was when things were going well, valuations were high and you could raise a lot of money. They did raise a lot of money, which I don't think that was the problem itself. But then when they raised that money, they were not paranoid thinking about their burn rate. So if you hire 10 people, you're probably burning, you know, something like two million a year. If a hundred people, you're probably burning twenty million a year. So what they would do is they would raise a lot of money, but then there would be pressure to like scale the company. So it would start to hire a lot of people. And then before you know it, …

AI assessment note: “Yeah, I think you should do that.”

Q You mentioned valuations there a couple of times. And as you said, kind of historically, you know, crazy before, even crazier now, And you said before, Series A valuation does not matter anymore. As an investor, I'm super intrigued by this. Why do you think that is, and what are your thoughts on that?

A Yeah, I mean, look, running a company is a marathon. It's a long marathon, and if you're successful, it's gonna go on for, you know, a very long time. So, you know, these are just points in time. Someone said you're valued this much right now. This is your potential right now. So I think people obsess too much by that. It doesn't really matter that much, and people try to get the biggest valuation they can possibly get. I think in terms of dilution, if you look at it, Oftentimes, the valuation doesn't actually matter that much. People try to get another 10 or 20% higher valuation than what they have on the table right now, but you're only raising 10% of that valuation or something like that, so actually it's only gonna make one or two percent difference in terms of dilution, so people waste too much time on that. It doesn't really matter in the long run that you got that a little bit higher valuation. The higher valuation also means higher expectation, because whatever valuation you raise that, if you raise that a billion, they want to have an exit around four or five billion then, and for you to get there, Assume maybe a 10 X multiple. So you probably need to get to a four hundred million revenue eventually on the line. Those are big shoes to fill.

AI assessment note: “Oftentimes, the valuation doesn't actually matter that much. People try to get another 10”

Q Can I ask then, like, what advice do you give them, especially the one that I often come across as, you know, very technical founders who are like, I don't know what a great VP of sales looks like. I don't know what a great CMO looks like. How do you advise them when it comes to talent detection in roles they don't know?

A Yeah, I mean, look, so you can hire well, even though you haven't done it before, you just need more time. So if you have more time, you can actually get the quality hire, even if you don't know what that person looks like. So the advice is start earlier, start much earlier than you need to start the search. Could it probably will take you a year, maybe longer to find the right person because you don't know again, right? How do you find out what you're looking for? Meet the best ones out there. Even if you have no shot at hiring them, go and find out who are the best salespeople out there who have done it. Do dinners, lunches, I guess Zooms these days with them, and figure out. Ask them lots of questions and interview them. If you interview enough of them, you start pattern matching and seeing that the kind of answers they're giving, the good ones, they approach it this way, the not so good ones in that way. So you start to kind of figure out what good looks like. The other thing is, you can pick people who have a proven track record of having done it twice. Taking a company from zero revenue to twenty million. If they've done it twice for products that had similarities with your product, chances are they can probably do it again. And if they can't do it at your company, it's probably your fault or your product's fault, or maybe you have a cultural mismatch with that person. So…

AI assessment note: “Meet the best ones out there... Ask them lots of questions and interview them.”

Q ask, you mentioned the explosion there around the cool kind of salesperson and head of finance kind of being a counterbalance to that. What we're seeing a lot today is kind of very early hiring of head of peoples. How do you think about the hiring of head of Peoples. Is that a counterbalance to this too? And I guess what lessons do you have around hiring head of Peoples?

A Yeah, that's a very difficult hire because, you know, Silicon Valley is very tech oriented. So here, at least if your company happens to be here where we are, there are lots of tech talent. But HR isn't the bread and butter of Silicon Valley. That's not what it's famous for. So that's a tricky one. For me, I think the founders are sort of the HR function in the early years. A lot of the cultural elements are The values. How you deal with different things. Should people be able to take time off whenever they want? When should they call in? Do they have to come into the office or not? What's the culture? What's the language we use? How do we communicate with each other? All these kind of things. I think it should come from the founders in the early years. So the first time when you really need HR, I believe, is sort of when you start to scale the recruiting machinery. Recruiting typically reports to HR. So that's where you need it. And there are some thorny, tricky issues sometimes around employees. If things are not working out, There might be legal risks and so on. That's, you need the person. But I kind of think around hundred employees plus is when it starts mattering a lot to have really sort of strong head of HR.

AI assessment note: “around hundred employees plus is when it starts mattering a lot”

Q Can I ask, often when things don't go well in this phase, new leaders bluntly are often brought in by the board in some cases. How do you feel about kind of newly brought in leaders Whether they have the long-term vision that founders have, and how do you feel about that kind of brought in leader?

A Well, I mean, I think the best thing is if the people that created the company can continue sticking around. I think almost every company you look at, they go through this phase shift when the people who started the company kind of detach and either exit or no longer involved. The company becomes a different company. It becomes very good at execution, but it kind of loses its soul. And by that, I mean, it loses that kind of visionary, we were going to conquer the world. We started this company because we wanted to change how fundamentally people do X in the planet. They lose that, and it becomes more sort of, hey, how do we execute, run those numbers, forecast it, drive that, efficiencies, planning process, budgets, hiring, targets, one year out, how do we do that really well? How do we make sure that we're doing an awesome job next 12 months? Not so much, how are we going to change the world? So I think it's really important to keep that. Ideally, the founders can actually figure out how to hire an executive team that can do that. That can come and execute, and they don't run into problems in the second phase. But many times, if the revenue is not there, or if they burn through too much money, the board will say, well, to go to market side, it's not going the way we want it. Typically what they do then is say, well, we need to fix it, and the way we need to do it, we need to g…

AI assessment note: “It becomes very good at execution, but it kind of loses its soul.”

Q Can I ask, a lot of founders will be sitting here, and a lot of technical founders will be sitting here thinking, shit, maybe I'm not ready to scale through the phases of leadership like this. How would you respond to them, and how do you think about kind of self-doubt on the founder side of being able to scale as the leader through these different phases?

A Yeah, I mean, I think it's, a lot of it boils down to what do you want to do? What do you want to do with your life? If you actually really, really like the first early phases, then maybe you should do, go do another one in the early phases. That's totally ok, but if you do want to do it, and if you do want to learn it, then I think you will be able to do that if you're just humble, and you know, you're trying to learn from people who've done it before, and you have that kind of humility, you're going to figure it out. You will figure out the next phase too, so I think it's doable, but if you don't want to do it, if you don't find it fun anymore, it's no longer fun when it's like the 20 of us problem solving together, and me rolling up my sleeves, and jumping in there, and coming up with a solution, yeah, then that's ok, you know, different people like different things, then maybe you should actually get someone else Run that phase. But companies kind of are moving on their own pace, and people's careers and aspirations don't necessarily match those. High growth companies actually mostly outgrow most people's careers. The company's changing so fast that you can't in your career keep up with it. You need to change too fast to keep up with it. And in big companies, it's probably the other way around. You know, really, really big companies, really smart people, they actually move …

AI assessment note: “if you do want to learn it, then I think you will be able”

Q That is very kind of you, but I actually spoke to Ben before the show, and he mentioned you're fleeing to Iran as a refugee and living in a Swedish ghetto, so it's a little bit of a different start for me, bluntly, but an offshoot is how did that happen, and on reflection, how did that experience impact your mindset?

A Yeah, I mean, I guess the interesting thing was that we fled as refugees maybe when I was six years old from Iran to Sweden, but the really interesting aspect of that was that I was from a wealthy family, and I was quite spoiled as a kid in Iran. I remember the teachers would give me gifts every day, but these gifts obviously were, like, provided by my parents in front of all the classmates and so on, and then we went to this, you know, poor neighborhood in Sweden, and it was the polar opposite. Barely had, sort of, food on the table, so I think it's unique experience to get both. At early age, get to experience both, and I think That helps you, because on the one hand side, shows you how difficult things can be, but on the other hand, it kind of tells you that, hey, you can actually do it. You can get there, because you've seen that. You can power through this as well. So I think it was kind of an interesting perspective that I got, which is kind of unique, weird social experiment.

AI assessment note: “shows you how difficult things can be, but on the other hand... you can actually do it”

Q actually chatted, obviously, before, and you said that we're kind of Three stages to company scaling and company growth. So taking a step back from that kind of a hyper growth and rocket ship progression, step one you said was the search for product market fit. So I'm super interested when you think about that, what are the core elements to this search for product market fit in your mind?

A Yeah, I mean, I think product market fit is this really nebulous topic. I think there's lots of books written about it, lots of people proclaim to be experts in it, but I actually think it's one of those things. It's like, how do you create a song that's a world hit? Nobody really knows. How do you make a movie that's a smash hit? Well, really, really great directors and writers have created one, and then the next one failed. So I think it's much more art than science. But having said that, I think you have to pay attention to the customers, you iterate with them. So you develop it, you have a hypothesis, you test it on them, you get that feedback cycle, you embed your engineers with the customers, and you're trying to figure out really something that addresses a core problem. that they would like to pay for, for you to solve. You know, things were not great at Databricks. Like the first two, three years, we were really struggling. In the first two, three years, we were really struggling. In the first two, three years, we had a little bit over a million revenue three years in. So we kept iterating, trying to figure out how can we really make sure that this product really satisfies the customer demand. And the company almost fell apart in the first two, three years.

AI assessment note: “you have a hypothesis, you test it on them, you get that feedback cycle”

Q It reminds me of investors with theses. We love this word, thesis, and it's like, do we actually have a thesis? I didn't fucking think so, but tell me, what is something that you do that you think other founders should spend more time on?

A I pay a lot of attention to culture, culture in the company, communicating with employees, being transparent, and I spend a lot of time on hiring and making sure that we're hiring the right people. Those are two things that I think I spend more time than most other people Because I think they're going to affect you for very long term. If you don't hire the right people, if you hired kind of the wrong people, or if you got into a place where the culture in the company is kind of broken, those two things are very hard to fix. Most other things you can fix. You can rewrite your product, you can make wrong product decisions, you can fix those. But these two other things are sort of so long term devastating. So I try to spend this proportionate amount of time on those two.

AI assessment note: “I pay a lot of attention to culture... and I spend a lot of time on hiring”

Q Can I ask, what did you learn about happiness? Because I often, in the past, have tied happiness to money, a monetary amount, when I have X or when I have Y. What did you learn having gone from a lot in abundance to, to, as you said, you know, really not very much?

A Yeah, I mean, we also moved around a lot. When we moved to Sweden initially, my parents were just going to be there temporarily before, you know, there was a revolution in Iran and we were going to go back and everyone's going to live happily ever after. So what happened is we didn't have much money. So we were living in these one room student dorms with shared kitchen. My parents in their forties and then two kids in this tiny room. So they kept evicting us because we're not supposed to be this for students, right? So I kept moving around a lot as well. So then I had to change schools a lot. And as a result of this, I think what you learn is to just kind of be happy with whatever the situation is, because it might change anyway tomorrow. So it's not a really big deal. My mom used to always tell me, you know, the sky has the same color everywhere on the planet. So you kind of live by that. You don't worry too much about what you have or don't have. You're just happy as it is.

AI assessment note: “what you learn is to just kind of be happy with whatever the situation is”

Q actually chatted, obviously, before, and you said that we're kind of Three stages to company scaling and company growth. So taking a step back from that kind of a hyper growth and rocket ship progression, step one you said was the search for product market fit. So I'm super interested when you think about that, what are the core elements to this search for product market fit in your mind?

A Yeah, I mean, I think product market fit is this really nebulous topic. I think there's lots of books written about it, lots of people proclaim to be experts in it, but I actually think it's one of those things. It's like, how do you create a song that's a world hit? Nobody really knows. How do you make a movie that's a smash hit? Well, really, really great directors and writers have created one, and then the next one failed. So I think it's much more art than science. But having said that, I think you have to pay attention to the customers, you iterate with them. So you develop it, you have a hypothesis, you test it on them, you get that feedback cycle, you embed your engineers with the customers, and you're trying to figure out really something that addresses a core problem. that they would like to pay for, for you to solve. You know, things were not great at Databricks. Like the first two, three years, we were really struggling. In the first two, three years, we were really struggling. In the first two, three years, we had a little bit over a million revenue three years in. So we kept iterating, trying to figure out how can we really make sure that this product really satisfies the customer demand. And the company almost fell apart in the first two, three years.

AI assessment note: “pay attention to the customers, you iterate with them. So you develop it, you have a hypothesis”

Q You mentioned the word leaders there. When you think about this phase, what types of leaders do you think thrive and really excel in this phase, and which struggle do you think?

A Yeah, I mean, in the early phases, it's more the kind of jack-of-all-trades situation. Super smart, can roll up their sleeves, and do pretty much everything themselves. And when I compare the early days of Databricks, say, up to like, hundred, 150 employees, it's insane the amount of things that the early folks would do. Today, every little function is sort of split up into tiny, tiny specialized roles. People are so specialized now at Databricks. In the early phases, you're looking for these people that are just really smart. They can figure things out, and they can roll up their sleeves, and just pretty much do anything. They can do a decent job at pretty much anything. Those are the kind of people that you need. It turns out in the later stages that actually will hurt you, but that's the kind of profile you're looking for.

AI assessment note: “in the early phases, it's more the kind of jack-of-all-trades situation.”

Q Final question for the quickfire. One that I often think about now is head versus heart when it comes to decision making. How do you think about using your head versus your heart when it comes to making core decisions?

A I try to as much as possible not use my heart in this following sense. I don't believe in gut feeling. This is just my personal sort of leadership style. When people tell me, you know, ultimately you have to have a gut check and you make that gut decision and ultimately you sleep on it and the answer comes to you and so on. I don't believe in that. I believe in having a process and cerebrally thinking it through and then working through it that way. Having said that, I think cultural issues are important. So If my process for hiring someone tells me this is the right profile, and my brain is telling me this person can do the job, and they're perfect for it, but then me and that person don't work well together. We're not a great match. Yeah, then I wouldn't hire. That is important too, but that's another criteria that I use cerebrally. It's a criteria of can we work together really, really well, because people that you hire for your startup, they're like marriages. You're going to spend more time with them than you're going to spend with anyone else. So, you know, you kind of have to like each other, and so that's another thing that you have to pay attention to. I'm not a big fan of gut feelings and gut decisions, and you just know it, and great leaders just know what's right.

AI assessment note: “I try to as much as possible not use my heart in this following sense.”

Q Can I ask, double clicking on that, how do you keep morale high when it's not a certain outcome, things are moving quickly, Quite slowly. As you said, three years to a million. It's not as fast as others and as fast as, you know, many tech crunch stories. How do you keep the morale high when things aren't as fast as people would want them to be?

A Yeah, I mean, first of all, I think you attract a certain type of talent. There are these people that join early startups. They take more risk, and they love that phase where they're sort of building stuff. So that kind of is in itself helps you. So you have the kind of people that have been in many startups, and most of the startups have all failed, and they're kind of okay with it. As long as they're getting their paycheck. So that's important. You have to be careful. So we definitely did a mistake in the early years. Sometimes we would do the mistake of hiring someone phenomenal who wasn't of that sort, and they would just not work out at all. They would say, this place is completely broken. Everything is terrible here. This company will go nowhere. And then they would start spreading that. So I think what's really important there is to do opposite of what I said, focusing on low light and so on. I think in those early phases, you just have to celebrate the successes and get everybody to kind of believe in the vision and believe you have to Sort of give them this hope that we can do it, and you share a lot of stories of other companies, other leaders, who, you know, how they started, and they had nothing, and eventually they got there, and you just keep doing that, and you keep motivating, and you'll have a group of people that believe that, and they'll continue marching wit…

AI assessment note: “celebrate the successes and get everybody to kind of believe in the vision”

Q especially on the multiple rounds of layoff, I think it's just so damaging in terms of the negative morale that it instills. A question for you is like, it's very challenging when you go from capital starved to capital rich. How do you think about that mindset of moving from capital starved to capital rich? And when is the right time to really be aggressive and turn on the spending?

A Well, I mean, first of all, I think you should raise as much as you can. I think you should have as much runway as possible. I think there's nothing wrong with that. The only problem is The more money you've raised, the more pressure there is for you to grow into that, right? So the expectations will be high. You know, if people want to get their four or five X returns, at least from your company. So you should just make sure that your investors can make their four or five X. Otherwise they're not going to be happy. So, you know, in this climate right now, there are a lot of startups that are much earlier phase than we were with access to much more capital and much higher valuations. My only ask from those companies are I see them, a lot of them go and Hire lots of salespeople and they start scaling their sort of company prematurely before they really have solid product market fit. So, you know, I think for us, it was still pretty crazy times. If you looked historically with valuations and investments, then compared to now, it was nothing. And I think that was good because we had to kind of go raise almost every year. And we had to prove to the investors every year that we have had progress and that put pressure on us to figure out this product market fit.

AI assessment note: “scaling their sort of company prematurely before they really have solid product market fit”

Q So let's jump on that. So you're in this phase now. When you think about the most challenging elements for you in this phase, What would you say those are, given your timely presence of it being in the stage now?

A Yeah, I mean, it's just a change of the company has to have much more processes. It's not just hit the gas, go as fast as humanly possible. It's okay. Hire, hire, hire, hire. Every problem you have, go hire someone to solve that. Like, you know, just hire as many people as possible. It becomes much more sort of an end. Like, we have to do more with less. We're going to have less budget, and we're going to grow the revenue even more with that. How can you do that? And it's, you're bringing in those people that can really figure out how to get efficiencies. And do those things really, really well. It's just a different type of person. People in the second phase, all they see is get more money and happen. But in this phase, it's different. The efficiency has to be there because eventually also all these businesses have to get to profitability or generate massive cash flows. I know we all, all the founders, we want to change the world and we want to do great things, but ultimately that's how we're going to be evaluated. We're not going to be around if we're just never going to be profitable and never generate free cash flows and But we're doing great things for the world. That's not how this world works. So there has to be a path towards that, and that requires optimization. So that's the phase. I think a challenge in that phase is this kind of mindset of how do you do more with le…

AI assessment note: “I think a challenge in that phase is this kind of mindset of how do”

Q Final one there for you, Ali. Paying the picture for me, and it's like, what did the next five years look like for you and for Databrace? And I guess, how big could this be?

A You know, my finance team always says don't say this because they think you're a lunatic, but I actually personally do believe that AI and data science can transform the whole planet in crazy ways. I mean, just to give you some examples of what people already today are doing with Databricks, pharma companies like Regeneron, they came up with a drug for chronic liver disease, and they found the gene responsible for chronic liver disease using AI and data science in Databricks. So, you know, I really think this technology has huge potential. In most teams that are developing COVID 19 vaccines, they're using Databricks behind the scenes. But on the other hand, you can also use the technology to just show people really good ads, which is not as aspirational, maybe. I think pretty much everything that humans are doing in these offices today, that's very repetitive, and it's not extremely creative, can be automated. So I think the impact of data science and AI is going to be massive, definitely in the trillions of dollars, in terms of sort of TAM in my book, this is the thing they say, don't say. So you can just think of it. A company that even would just get 10% of that would have a hundred billion revenue. So I think there's huge opportunity here. I, of course, hope that Databricks will seize that opportunity, but someone will for sure. That's what I think.

AI assessment note: “A company that even would just get 10% of that would have a hundred billion revenue.”

Q especially on the multiple rounds of layoff, I think it's just so damaging in terms of the negative morale that it instills. A question for you is like, it's very challenging when you go from capital starved to capital rich. How do you think about that mindset of moving from capital starved to capital rich? And when is the right time to really be aggressive and turn on the spending?

A Well, I mean, first of all, I think you should raise as much as you can. I think you should have as much runway as possible. I think there's nothing wrong with that. The only problem is The more money you've raised, the more pressure there is for you to grow into that, right? So the expectations will be high. You know, if people want to get their four or five X returns, at least from your company. So you should just make sure that your investors can make their four or five X. Otherwise they're not going to be happy. So, you know, in this climate right now, there are a lot of startups that are much earlier phase than we were with access to much more capital and much higher valuations. My only ask from those companies are I see them, a lot of them go and Hire lots of salespeople and they start scaling their sort of company prematurely before they really have solid product market fit. So, you know, I think for us, it was still pretty crazy times. If you looked historically with valuations and investments, then compared to now, it was nothing. And I think that was good because we had to kind of go raise almost every year. And we had to prove to the investors every year that we have had progress and that put pressure on us to figure out this product market fit.

AI assessment note: “they start scaling their sort of company prematurely before they really have solid product market fit”

Q You mentioned things not working out there. When you think about this kind of phase two of scaling and scaling GTM, if things don't get achieved and the pillars aren't working bluntly, what do you find tends to ensue and how do you find the board reacts?

A The first thing that typically goes wrong is revenue is not growing the way you expected it to. That's typically what's happening, right? The second thing is you spent way too much. You know, maybe things were going well, but you spent too much and you need to raise again. And now you're in a difficult position because you only have six months or 12 months of runway. So you're in a terrible negotiation position because you can't negotiate because everybody else knows that they can just wait you out and you'll be more and more desperate. The first problem is the revenue one. That could still be a product market fit problem. It could be that your product maybe worked for those subset of crazy enthusiasts that you found early on. When we're trying to scale it, It's not working. It could be that the product works when you're selling it, the technical co-founders, but you haven't figured out how to scale it into a sales org. And a lot of that is, you know, the relationship, I think, between the early co-founders, the people who started the company, and the first sales leader. They need to work together to figure out the following. They need to figure out how do we take this super awesome product and make sure that random salesperson in Texas, who might not care so much about this company, and they're just here a year, and they're not going to spend that much Time trying to understan…

AI assessment note: “The first thing that typically goes wrong is revenue is not growing the way you expected”

Q I think part of that losing the compass, and like the acceleration and progress in the early years, Cause like they ask you well on the single product and then they don't have the multi-product vision to translate over the next few years. I guess my question is what are the biggest challenges in your mind of moving from a single product company to a multi-product company?

A Yeah. I mean, that's more for the third phase. I would say, I would say first phase, you're just trying to figure out this one product. How does it fit this market? Do you have something that people would want to look at? Have you built it? Second phase is, okay, we got it. Now let's try to scale it. So let's try to get salespeople that can sell this. Market it. So it's a lot about growth, growth, growth. And there are people that are like, okay, I know how to do that. A lot of it is about coverage. How do we cover these different regions, these different countries? Where do we place people and how do we hire them? And you grow that. And depending on the market you're in, if you're in a really big market, that can take you very far. If you're small markets can actually tap out pretty quickly. Then comes the phase where, okay, it's not just how do we just hit the gas and go faster. Now we actually have to be much more optimized. So that's the third phase where we have to actually figure out where we can be more efficient and But we can actually drive even more revenue from the existing products. How do we expand? And one such thing is, how do we have more products? That would expand our camp. If we had more products, we could sell those. We could cross-sell those. Maybe we could even have an enterprise agreement, and, you know, customers can, over time, buy more and more of thos…

AI assessment note: “So that's a sort of different phase, the third phase... requires a different mindset”

Q I think part of that losing the compass, and like the acceleration and progress in the early years, Cause like they ask you well on the single product and then they don't have the multi-product vision to translate over the next few years. I guess my question is what are the biggest challenges in your mind of moving from a single product company to a multi-product company?

A Yeah. I mean, that's more for the third phase. I would say, I would say first phase, you're just trying to figure out this one product. How does it fit this market? Do you have something that people would want to look at? Have you built it? Second phase is, okay, we got it. Now let's try to scale it. So let's try to get salespeople that can sell this. Market it. So it's a lot about growth, growth, growth. And there are people that are like, okay, I know how to do that. A lot of it is about coverage. How do we cover these different regions, these different countries? Where do we place people and how do we hire them? And you grow that. And depending on the market you're in, if you're in a really big market, that can take you very far. If you're small markets can actually tap out pretty quickly. Then comes the phase where, okay, it's not just how do we just hit the gas and go faster. Now we actually have to be much more optimized. So that's the third phase where we have to actually figure out where we can be more efficient and But we can actually drive even more revenue from the existing products. How do we expand? And one such thing is, how do we have more products? That would expand our camp. If we had more products, we could sell those. We could cross-sell those. Maybe we could even have an enterprise agreement, and, you know, customers can, over time, buy more and more of thos…

AI assessment note: “that's more for the third phase. I would say, I would say first phase”