The Exchanges

Q Do you not think that's where lessons derive from?

A Oh, I do. I, but, um, we have a whole culture of postmortems at a firm where we record every decision we make, especially, I'll give you like a very retail one, now that I said postmortem. Postmortem culture comes from engineering, and obviously I'm an engineer by training and past, and so it's easy to reason in those terms. But years ago, we had decided to very rationally scale our infrastructure because we expected a Giant launch with just a crazy amount of transactions, and it was all going to be very, very, very, very big, like, 10 X bigger than what we were at the time. And so we were prepping at breakneck pace and just, like, scaled up every part of our backend infra, and then our frontend infra, and everything, everything. And then the day off, it just fell apart massively, because we basically overloaded Our back end with our front end, and so we were all dressed up with no place to go, and the entire database data layer of a firm was just in shambles for several hours while we were cleaning it up, and, but it really was a self-inflicted one where we were like, well, we just don't know how big it's gonna be, so let's assume it's gonna be super huge, and it, it was very modestly sized at launch, and turned out to be just what do you learn from that? Do the calculating. Like the line about do the calculating comes from like someone, this was not a, an unforeseeable error.…

AI assessment note: “Oh, I do. I, but, um, we have a whole culture of postmortems”

Q Do you not think that's where lessons derive from?

A Oh, I do. I, but, um, we have a whole culture of postmortems at a firm where we record every decision we make, especially, I'll give you like a very retail one, now that I said postmortem. Postmortem culture comes from engineering, and obviously I'm an engineer by training and past, and so it's easy to reason in those terms. But years ago, we had decided to very rationally scale our infrastructure because we expected a Giant launch with just a crazy amount of transactions, and it was all going to be very, very, very, very big, like, 10 X bigger than what we were at the time. And so we were prepping at breakneck pace and just, like, scaled up every part of our backend infra, and then our frontend infra, and everything, everything. And then the day off, it just fell apart massively, because we basically overloaded Our back end with our front end, and so we were all dressed up with no place to go, and the entire database data layer of a firm was just in shambles for several hours while we were cleaning it up, and, but it really was a self-inflicted one where we were like, well, we just don't know how big it's gonna be, so let's assume it's gonna be super huge, and it, it was very modestly sized at launch, and turned out to be just what do you learn from that? Do the calculating. Like the line about do the calculating comes from like someone, this was not a, an unforeseeable error.…

AI assessment note: “Oh, I do. I, but, um, we have a whole culture of postmortems”

Q Can I ask you if I'm a founder listening to this and I'm going, wow, I really want to have a post-mortem centric culture, but I don't really know how to do that. Like as of today, implementing that, what advice would you give to me on how to implement and start a post-mortem centric culture?

A So for everything, create a document space. So every time we have a Blip for whatever definition of in our systems or in our processes or in our models, anything, a separate conversation is carved off on Slack. A separate conversation is documented in a Google doc or a notion or in whatever tool we're using for this topic, but it's segregated. It's very difficult to peel away Details having to do with event one, if you're commingling it with event two. And so first sort of most important thing is make sure you have separation of data streams, because if you get good at postmortem culture, you will gather a lot of data and a lot of it will be irrelevant. Like people will say, well, this also happened at the same time. I see it in the logs, like something just went down and in other words, I'm like, no, that's unrelated. This was because of whatever, something else. And so you want your data plentiful. You want as much of it segregated into a separate pipeline of raw content as soon as possible. You want preservation of this information in a special place. You want someone responsible for writing it up and distilling it from pages and pages of kind of raw data into a, essentially a white paper. And then you want the entire team to go and comment on it. And the most important thing you can do about the entire process is you have to completely separate Any form of apologizing, resp…

AI assessment note: “So for everything, create a document space.”

Q Do we have a structured time for these postmortems? This is like, hey, we have a weekly postmortem on what happened last week. How do we make sure that we don't just go, yeah, it's a really nice idea, and then actually not do it?

A You have to give people responsibility to do them. You have to have a directly responsible individual for authoring and presenting the postmortem. That's very important. You need to make sure their manager knows that their list of responsibilities has now been enhanced by this postmortem and they're on a hook for it. Uh, we typically try to say, Hey, it's a week, maybe two weeks. Like that's the most you're allowed to take to generate a real postmortem. And then there is a weekly review. That takes place within the teams that are postmorteming something, basically going through like, hey, this happened, the postmortem has been prepared, and then someone even more senior will say, that's a reasonable explanation, I buy it, or like, you know, this is not quite deep enough, like we need a better analysis of what went down, or I don't actually think these are accurate, and this is where you need your A players in the room, because they will have the experience and the intuition and sort of the past Knowledge of how these things go to kind of say that that's a deep enough post-mortem, or this is just like, you, you describe what happened, but he didn't explain it.

AI assessment note: “You have to have a directly responsible individual for authoring and presenting the postmortem.”

Q Um, is Klarna growing faster than the firm? And how do you think about that in, in terms of Klarna's US expansion?

A I think they announced that they grew 32% last quarter. I think we announced that we grew 35%. Uh, I, in the last few quarters, and their, their numbers aren't public, they're about to go public, so it's, it's, uh, it will be a little bit easier to track their numbers, I think, for, for all involved. But for the last several quarters, from estimates, so we have been taking share in the market against all competitors, not, not just them. And so I think that's a good sign For us. We offer more services though. Majority of our competitors specialize in paying for or something very, very specific. We made the decision from day one to provide every possible service from the 45 day super short term loan all the way out to four years. Very, very few people do everything. And so it should be a natural consequence of our ability to serve all that we would take disproportionate share.

AI assessment note: “I think they announced that they grew 32% last quarter. I think we announced that we grew 35%.”

Q Penultimate one. Biggest mentor, and how did it come about?

A So, I grew up in a family in the Old Sawyer Union where grandparents and parents lived together, and my grandmother, her only maternal grandmother, lived with us, you know, between my birth and her death, and she was an unbelievably will-powered, strong woman who basically taught me, if you really, really want it, you can get it. You just have to try extra, extra hard, and never give up, and never surrender, and In, in many ways, uh, so my personal hero is Winston Churchill. I have a beautiful Churchill's portrait that I'm staring at right now as a reminder of that, uh, I shall never surrender. But, uh, my grandmother was a mini five foot two Russian language speaking PhD in astrophysics, Winston Churchill in my own household. And, uh, she was absolutely amazing that her willpower was always sort of picking me on to try whatever would come into my crazy head. That was probably an unlikely, but an awesome mentor to have.

AI assessment note: “my grandmother... was probably an unlikely, but an awesome mentor to have”

Q I think, I think that's a sign that I need to have some children then. But, um, I would love to hear, before we move into a quick fire round, what's the morning routine? It's always an interesting one for me. How do you organize your routine? You said about kind of changing schedules for children. How do you look to kind of provide the best start to the day?

A So there's actually another thing that happened To me, I used to be a night owl. So I would get up, you know, before children, I would get up in sort of a nine AM type range, but I'd be working till one or two or three or four in the morning. And one of the things that happens with children is they get up early. And over the years, I've become quite addicted to road cycling. So at this point, my wake up time is sort of between four and five AM. What I try to do is roll out of bed well before the sunrise, try to figure out what happened in the world while I was asleep, answer some urgent emails, and then get on the bike. Ride for a couple hours if I can help it, if I have the time. And then by the time I'm done with that, I'm fully energized and I'm ready to go to work. I get to the office anywhere between eight 39 30. Then I'm full on most of my day these days, unfortunately, perhaps, but also enjoyably is meeting with all that report to me and, uh, sort of other external meetings. And then so long as it's a regular night, I try to get home just a little before six or six o'clock so I can sit down and have I throw a quiet family dinner with my kids, catch up with them, find out what they heard in school, try to explain what I do for a living to them.

AI assessment note: “my wake up time is sort of between four and five AM.”

Q Can I ask, when we think about extreme levels, often extremes are dislikable. They're not that amiable. They're very opinionated. How do we think about that being a pro versus a con?

A I think opinionated is exceptionally valuable. I think the, the sort of pinnacle of teamwork achievement is to have really strong opinions, not hold them back, and yet manage to not so profoundly offend the person or the teammate that you're judging or providing feedback to that they choose to opt out, whatever that means for the problem. But you unbalance, you want someone who can walk into a room and say, That is a pile of garbage, and I love all of you. You're amazing people. I'm proud to be part of this team, but what we've built here together is not gonna ship because it's terrible, and now we're all gonna regroup and rethink and build something better. Like, that, that is the way, at least one of the ways of trying to couch the blow, but if you don't give the blow, you're gonna ship garbage.

AI assessment note: “I think opinionated is exceptionally valuable.”

Q How do you feel about the concept of like the lean startup and MVP ship when it's ready? Just like the first thing you can get into customers and ship, does that lead to a generation of shit software or is it actually a great way to get customer feedback?

A I think there are definitely things that you want in the hands of the customer as quickly as you possibly can. Like we have a prototyping team at a firm that is trusted slash empowered to ship stuff that is just Not really beautiful or production quality even to get customer feedback because it's really important to find out if something, some crazy idea that we have has any sort of odds of success. Once it's out there and you get data and you think the data tells you that this is great, you don't just say, cool, let's leave it out there and go to the next one. We basically pull down the feature, pull down the product and say, okay, now we're going to do it right. We're going to make it Scalable. We're going to make it beautiful. We're going to make sure that it actually stands the test of time. The idea of finding out of the idea was really important, but if you believe that ideas speak for themselves so much that it can be garbage, you will end up with a collection of garbage and generation of garbage software. And, uh, I think you just have to know when the moment is to say, actually, that really does have traction and Someone will build a better version of this if I don't do it myself. And that, that's what you have to do now.

AI assessment note: “if you believe that ideas speak for themselves so much that it can be garbage”

Q Can I ask, you always have said to me, and I, you said this years ago, you said, when there's doubt, there's no doubt, and I always loved it, and I always think to that, but on the extreme element, where does extreme good transition to extreme bad? Have you had that before, and what have your lessons been?

A Any form of narcissism or selfishness, self-orientedness is probably the most important trigger of turning an extreme personality from good to bad, or said in the opposite way, you can be as great at throwing tantrums or as direct in your criticism as you want to be if you maintain a good degree of humility. And just remember that the second it becomes about you being better than everyone else, everyone else will start hating you. And if you're their boss, they're going to hate you quietly. And that's the worst possible situation. And so what do you really want is to constantly remember that you are, but a part of this team. And when you're criticizing someone's work or you're telling them this has to be redone, you're always redoing the work together. Like maybe you're not going to personally move the bits. But you're going to have to be involved because they're not going to be happy with a second round of the, well, this is still garbage. So I think that that's really important. I think there are many ways where extreme personalities flip into being toxic, and so you just have to constantly watch out for it. But it is the price you pay. Brilliant people are often over the top, and that's part of the ingredients that make them brilliant.

AI assessment note: “Any form of narcissism or selfishness, self-orientedness is probably the most important trigger”

Q Can I ask you if I'm a founder listening to this and I'm going, wow, I really want to have a post-mortem centric culture, but I don't really know how to do that. Like as of today, implementing that, what advice would you give to me on how to implement and start a post-mortem centric culture?

A So for everything, create a document space. So every time we have a Blip for whatever definition of in our systems or in our processes or in our models, anything, a separate conversation is carved off on Slack. A separate conversation is documented in a Google doc or a notion or in whatever tool we're using for this topic, but it's segregated. It's very difficult to peel away Details having to do with event one, if you're commingling it with event two. And so first sort of most important thing is make sure you have separation of data streams, because if you get good at postmortem culture, you will gather a lot of data and a lot of it will be irrelevant. Like people will say, well, this also happened at the same time. I see it in the logs, like something just went down and in other words, I'm like, no, that's unrelated. This was because of whatever, something else. And so you want your data plentiful. You want as much of it segregated into a separate pipeline of raw content as soon as possible. You want preservation of this information in a special place. You want someone responsible for writing it up and distilling it from pages and pages of kind of raw data into a, essentially a white paper. And then you want the entire team to go and comment on it. And the most important thing you can do about the entire process is you have to completely separate Any form of apologizing, resp…

AI assessment note: “for everything, create a document space”

Q Do we have a structured time for these postmortems? This is like, hey, we have a weekly postmortem on what happened last week. How do we make sure that we don't just go, yeah, it's a really nice idea, and then actually not do it?

A You have to give people responsibility to do them. You have to have a directly responsible individual for authoring and presenting the postmortem. That's very important. You need to make sure their manager knows that their list of responsibilities has now been enhanced by this postmortem and they're on a hook for it. Uh, we typically try to say, Hey, it's a week, maybe two weeks. Like that's the most you're allowed to take to generate a real postmortem. And then there is a weekly review. That takes place within the teams that are postmorteming something, basically going through like, hey, this happened, the postmortem has been prepared, and then someone even more senior will say, that's a reasonable explanation, I buy it, or like, you know, this is not quite deep enough, like we need a better analysis of what went down, or I don't actually think these are accurate, and this is where you need your A players in the room, because they will have the experience and the intuition and sort of the past Knowledge of how these things go to kind of say that that's a deep enough post-mortem, or this is just like, you, you describe what happened, but he didn't explain it.

AI assessment note: “You have to have a directly responsible individual for authoring and presenting the postmortem.”

Q do. If you are a head of sales, listen, there's always more you can do. There is always another gift you can send, like you can click, thoughtful comment you can do, additional resource you can send. I will do everything to fucking win. And People on teams don't always think quite as bluntly obsessively as that. How do you think about that alignment between what is rational to expect?

A So my brilliant wife frequently reminds me that more often than not, it's about incentives and the, the unlock for you. The reason you are so obsessed with fucking winning is because it's your company. It's your project. It's your passion. Like you've been doing this since you were 14 years old. And like the only goal is to do more of you. And so you don't need motivation. Like your incentives are aligned. Like you were Essentially born with a microphone in your mouth, like, just trying to get bigger. Literally. And I, I don't think it's, you know, nothing to be ashamed of. Drive and grit that is the other side of that coin are rare. And people who have it end up being entrepreneurs or something resembling entrepreneurship because it is such an unstoppable force. Which is amazing. Like, if you don't have it, it's a thing you can't really teach. Or at least it's very, very hard to teach, I think. On the flip side, there's plenty of other people that you not just need, you require to achieve your goals. Like, no one is an island in pursuit of their entrepreneurial ambition, and you have to figure out what it is that motivates them. And in many cases, the motivations are Not at all relatable for you. Like you had decided at some point that you're willing to work Saturdays and Sundays to succeed. And that's just it. And like, yeah, some people go to the pub and others go skiing and…

AI assessment note: “you have to figure out what it is that motivates them”

Q Is your mentality tied to the market cap of the company? It's so difficult to detach yourself from the valuation of your company. What's been your biggest lessons on that?

A The short answer is I'm sure it is, but I'm sure I put an enormous amount of effort into making sure it's not. And so it's a balance you're constantly trying to strike where the, the thing that is hard, harder is when you think you're doing a fantastic job and you can look at the internal numbers and you look at the external numbers, you're like, I am absolutely crushing it. And so sometimes it's very tempting to say, well, by now the market should know, and they should Give us high marks, and that means the stock goes green, green, green. And more often than not, you have a temporal mismatch where you're doing great, you know you're doing great, and the market thinks you're not. And if you're a startup or fairly high volatility stock, you end up with, well, I did great, why am I getting punished? And the short answer is, it's the market. Like, you just don't get to tell it when to react to good news or bad news and, and how. And so the more you sort of convince yourself that in the end, There's a great, um, uh, I think it's attributed to Warren Buffett, but it's actually from, uh, Graham, his mentor. In the short term, the market is a voting machine. In a long term, it's a weighing machine. I take great comfort in saying this to myself whenever the market, I think, misjudges me. But I also, I, I, I've gone through some great lengths, by the way, to make sure I don't accidental…

AI assessment note: “I'm sure it is, but I'm sure I put an enormous amount of effort”

Q Do you see a dip in employee morale, though, when stock goes down?

A I don't, but I think I make it my business to, every time I talk to our outcomes as a company, I take great pains not to talk about the price of the stock. The only time I talked about the price of our stock to our employees at length when it was flying very high after the IPO and sort of the, the heady days of, uh, 21, I'd actually repeatedly said, look, just like, do not, do not get accustomed to whatever numbers you, you're reading on the screen today. Like, we will not know what this company's worth for years. So just like, if you think it's too low, good for you. If you think it's too high, it may well be. Like, just do not look, do not get conviction that this is actually correlated to Some tangible metric. Like, first we have to get profitable. Then we have to show revenue growth rates. Then we have to show net income growth. And that's what, you know, long term, the weighing machine, that's what that weighs. It's not weighing sentiment. It should not be weighing sentiment.

AI assessment note: “I don't, but I think I make it my business to”

Q As a public company CEO, do you have to have an AI story today?

A I generally really dislike stories that have no substance, so I think You have to ask yourself, are we taking full advantage of the best available tools and the most interesting available tools right now are AI. So if you sort of look through your closet and say, hmm, we're not really using any of this stuff. I gotta have a story for the market. You're doing two things wrong. You're telling a story that isn't true and you're not using the most interesting available tools. If you're using the most interesting available tools, your investors might be happy if you told the story, but if you didn't, I don't think they should really care that much. Like, as you go public, a lot of this becomes, are you growing at the right scale? Are you taking appropriate risks? Are you managing to profitability? The storytelling hour of like, oh, by the way, we have this shiny item that we're so excited about, that feeds the voting machine. And I'm sure some of it is important, but I spent a lot more time feeding the weighing machine.

AI assessment note: “if you didn't, I don't think they should really care that much.”

Q How do you feel about the concept of like the lean startup and MVP ship when it's ready? Just like the first thing you can get into customers and ship, does that lead to a generation of shit software or is it actually a great way to get customer feedback?

A I think there are definitely things that you want in the hands of the customer as quickly as you possibly can. Like we have a prototyping team at a firm that is trusted slash empowered to ship stuff that is just Not really beautiful or production quality even to get customer feedback because it's really important to find out if something, some crazy idea that we have has any sort of odds of success. Once it's out there and you get data and you think the data tells you that this is great, you don't just say, cool, let's leave it out there and go to the next one. We basically pull down the feature, pull down the product and say, okay, now we're going to do it right. We're going to make it Scalable. We're going to make it beautiful. We're going to make sure that it actually stands the test of time. The idea of finding out of the idea was really important, but if you believe that ideas speak for themselves so much that it can be garbage, you will end up with a collection of garbage and generation of garbage software. And, uh, I think you just have to know when the moment is to say, actually, that really does have traction and Someone will build a better version of this if I don't do it myself. And that, that's what you have to do now.

AI assessment note: “if you believe that ideas speak for themselves... you will end up with a collection of garbage”

Q Can I ask, you always have said to me, and I, you said this years ago, you said, when there's doubt, there's no doubt, and I always loved it, and I always think to that, but on the extreme element, where does extreme good transition to extreme bad? Have you had that before, and what have your lessons been?

A Any form of narcissism or selfishness, self-orientedness is probably the most important trigger of turning an extreme personality from good to bad, or said in the opposite way, you can be as great at throwing tantrums or as direct in your criticism as you want to be if you maintain a good degree of humility. And just remember that the second it becomes about you being better than everyone else, everyone else will start hating you. And if you're their boss, they're going to hate you quietly. And that's the worst possible situation. And so what do you really want is to constantly remember that you are, but a part of this team. And when you're criticizing someone's work or you're telling them this has to be redone, you're always redoing the work together. Like maybe you're not going to personally move the bits. But you're going to have to be involved because they're not going to be happy with a second round of the, well, this is still garbage. So I think that that's really important. I think there are many ways where extreme personalities flip into being toxic, and so you just have to constantly watch out for it. But it is the price you pay. Brilliant people are often over the top, and that's part of the ingredients that make them brilliant.

AI assessment note: “Any form of narcissism or selfishness, self-orientedness is probably the most important trigger”

Q When they flip him to toxic, is there a redeeming route back, or is that generally a one-way road?

A You know, I believe in second chances in general in life, except in matters of integrity. So the, the hard red line for me is always, once I can't trust you, I can't ever trust you. And that, that's a, from that one, in my worldview, there is no walking back. It's not true with kids. Kids lie because they're exploring what to, uh, but even with my own kids, I've had sort of very, very difficult conversations where I said, look, this, this is a thing that in my professional and personal world of adults, it's the hardest thing to come back from, and the fact that you just told me something that isn't true is really hard for me to hear. And saying that to a teammate, you know, you're not gonna talk to them like you're talking to a thirteen-year-old. You're gonna say, look, I can't trust you ever again. Get out. So other than that, I think there is a way to walk back a lot of the, no matter how crazy toxic a situation could be, if it's a situation. The, the judgment you have to make as a leader is, is the person profoundly toxic, or did the situation turn toxic? Situations come and go. People don't really change that much.

AI assessment note: “I believe in second chances in general in life, except in matters of integrity.”

Q do. If you are a head of sales, listen, there's always more you can do. There is always another gift you can send, like you can click, thoughtful comment you can do, additional resource you can send. I will do everything to fucking win. And People on teams don't always think quite as bluntly obsessively as that. How do you think about that alignment between what is rational to expect?

A So my brilliant wife frequently reminds me that more often than not, it's about incentives and the, the unlock for you. The reason you are so obsessed with fucking winning is because it's your company. It's your project. It's your passion. Like you've been doing this since you were 14 years old. And like the only goal is to do more of you. And so you don't need motivation. Like your incentives are aligned. Like you were Essentially born with a microphone in your mouth, like, just trying to get bigger. Literally. And I, I don't think it's, you know, nothing to be ashamed of. Drive and grit that is the other side of that coin are rare. And people who have it end up being entrepreneurs or something resembling entrepreneurship because it is such an unstoppable force. Which is amazing. Like, if you don't have it, it's a thing you can't really teach. Or at least it's very, very hard to teach, I think. On the flip side, there's plenty of other people that you not just need, you require to achieve your goals. Like, no one is an island in pursuit of their entrepreneurial ambition, and you have to figure out what it is that motivates them. And in many cases, the motivations are Not at all relatable for you. Like you had decided at some point that you're willing to work Saturdays and Sundays to succeed. And that's just it. And like, yeah, some people go to the pub and others go skiing and…

AI assessment note: “more often than not, it's about incentives”

Q that we think we can only continuously hire A team players. A team players by definition are exceptions, and you can for the first 50. Maybe a hundred. I still don't think so with a hundred. But when you are the size of a firm, you know, it's impossible to only have A team players. When are you forced to hire B team, and how do you think about that?

A The story about knowing the Letter grade of every person you hire in your company, whether it's 2000 people like a farm, or I don't know how big you guys are, but, like, that's just silly. Like, you don't know. People are, these days, coached and trained and fine-tuned to be exceptional interviewees. And so somebody coming in and telling you their life story, like, you know, they have watched probably an interview you conducted with someone who's a professional interviewer who spelled out what it looks like when you're hiring an A player. Like, You know, someone's gonna be like, hmm, extreme personality is very important. Max Lufchen said so. How do I get myself more extreme? What I need. And so I, I don't think you can really judge A or B overall grade at hiring time. I think you can assess someone's coding ability, but a really, really good assessment test requires a take home because like you can, you know, implement quick sort on camera very quickly. But, you know, so can a C player these days. And so you have to give people a lot of time, and given people a lot of time, they will, you know, inevitably stray from the rules of whatever the test is. So anyway, the point is, you can filter out C players. You can definitely filter out D players. Differentiation between B and A is what happens once you've brought them in. You're like, oh my god, that is a brilliant hire. And mor…

AI assessment note: “I don't think you can really judge A or B overall grade at hiring time”

Q It's interesting. You said we are a writing culture. Favor short pithy one pages to novels or live rants. I personally like a live rant being born with a microphone in my hand, as you kindly suggested. Um, what does a writing culture truly mean to you, Max? And why do you think it's optimal?

A So it feeds back into that notion of postmortems, right? If you have depository and we literally have a postmortem depot where people can go and review every major or minor Nothing we did going back to the beginning of a firm time and learn from it. It's really valuable. We have a library of case studies that are internal to the company saying, well, that was a screw up. The great outage of XYZ. What happened there? Oh, we managed to overload the back end with the front end and, and so on. So it's just very valuable to have these things in a, not in a form of oral tradition, but like written down, like the, you know, I think it's just, just a very valuable thing to have. And then to do that well, you have to have writing culture where people just, you know, are typing up random words that come into their mouth and are in their minds and basically say, all right, well, read this makes sense in my head, but you know, I don't know, maybe you'll make sense of it too. So you have to have some baseline quality requirement for writing and basically the most important thing about technical writing and Business writing is simplicity. Like if you're reading a 12 page thing describing a feature, you're probably going to miss details. And so if it's a feature that's meant to be confined to like 25 by 25 pixels, the description should be two pages, maybe three. You should not have many, man…

AI assessment note: “very valuable to have these things in a, not in a form of oral tradition”

Q Is your mentality tied to the market cap of the company? It's so difficult to detach yourself from the valuation of your company. What's been your biggest lessons on that?

A The short answer is I'm sure it is, but I'm sure I put an enormous amount of effort into making sure it's not. And so it's a balance you're constantly trying to strike where the, the thing that is hard, harder is when you think you're doing a fantastic job and you can look at the internal numbers and you look at the external numbers, you're like, I am absolutely crushing it. And so sometimes it's very tempting to say, well, by now the market should know, and they should Give us high marks, and that means the stock goes green, green, green. And more often than not, you have a temporal mismatch where you're doing great, you know you're doing great, and the market thinks you're not. And if you're a startup or fairly high volatility stock, you end up with, well, I did great, why am I getting punished? And the short answer is, it's the market. Like, you just don't get to tell it when to react to good news or bad news and, and how. And so the more you sort of convince yourself that in the end, There's a great, um, uh, I think it's attributed to Warren Buffett, but it's actually from, uh, Graham, his mentor. In the short term, the market is a voting machine. In a long term, it's a weighing machine. I take great comfort in saying this to myself whenever the market, I think, misjudges me. But I also, I, I, I've gone through some great lengths, by the way, to make sure I don't accidental…

AI assessment note: “I'm sure it is, but I'm sure I put an enormous amount of effort”

Q Do you see a dip in employee morale, though, when stock goes down?

A I don't, but I think I make it my business to, every time I talk to our outcomes as a company, I take great pains not to talk about the price of the stock. The only time I talked about the price of our stock to our employees at length when it was flying very high after the IPO and sort of the, the heady days of, uh, 21, I'd actually repeatedly said, look, just like, do not, do not get accustomed to whatever numbers you, you're reading on the screen today. Like, we will not know what this company's worth for years. So just like, if you think it's too low, good for you. If you think it's too high, it may well be. Like, just do not look, do not get conviction that this is actually correlated to Some tangible metric. Like, first we have to get profitable. Then we have to show revenue growth rates. Then we have to show net income growth. And that's what, you know, long term, the weighing machine, that's what that weighs. It's not weighing sentiment. It should not be weighing sentiment.

AI assessment note: “I don't, but I think I make it my business to”

Q As a public company CEO, do you have to have an AI story today?

A I generally really dislike stories that have no substance, so I think You have to ask yourself, are we taking full advantage of the best available tools and the most interesting available tools right now are AI. So if you sort of look through your closet and say, hmm, we're not really using any of this stuff. I gotta have a story for the market. You're doing two things wrong. You're telling a story that isn't true and you're not using the most interesting available tools. If you're using the most interesting available tools, your investors might be happy if you told the story, but if you didn't, I don't think they should really care that much. Like, as you go public, a lot of this becomes, are you growing at the right scale? Are you taking appropriate risks? Are you managing to profitability? The storytelling hour of like, oh, by the way, we have this shiny item that we're so excited about, that feeds the voting machine. And I'm sure some of it is important, but I spent a lot more time feeding the weighing machine.

AI assessment note: “I generally really dislike stories that have no substance”

Q I do have to ask, I had a previous guest, Bill Clerico, founder of WePay on the show. He stated that we're at the very earliest days of fintech. Would you agree with him in his kind of summarization of where we are in the fintech landscape?

A I agree with Bill. He's an astute observer of financial services. I think fintech is kind of a forever changing landscape. I don't know if there's such a thing as a beginning or the end. I think there's a lot of really fascinating and exciting changes happening. Bitcoin is kind of one on the very outer edges of stuff That will create some really interesting value and simplification and efficiency, but then there's also just really basic things like what we're doing. Transparency and simplicity should have been a core feature of every product out there, but somehow it has escaped the attention of the established players, and so there's an opportunity to create a brand new company, brand new story, and everything in between. Bill has built a really cool company with WePay. I think there's the newcomers like Stripe and, uh, Braintree and sort of my, my old gig PayPal was, you know, 20 years ago was seen as a, as a disruptor in financial services and kind of still is today.

AI assessment note: “I agree with Bill. He's an astute observer of financial services.”

Q Can I ask, have there been any inflection points in your leadership where you've kind of significantly altered course or behavior as a result of an event, or kind of consequently where you see yourself weak as a leader and you'd like to improve?

A There certainly haven't. Plenty. Most of those are events where things go wrong and you sort of say, well, I never want to see this happen again. This was a bad outcome, bad situation. I don't want to repeat it. I've had multitudes of those. And the one that comes to mind, not at a firm, but a different company, I had a doubt in, uh, integrity of one of my managers. And it was one of these things where I was sort of, I couldn't quite tell what I was right or not. And the person was really strong technically and they really performed well. I was hesitant to To let them go, because I thought, well, maybe I'm making a mistake here. Maybe my doubt is not sufficiently substantiated. And it was one of these things where I was thithering beyond the point of reasonable. And when the whole thing fell apart, it fell apart because of the integrity of the person. And my walk away was, there's a quote from a movie that I enjoy quoting. Whenever there's doubts, there's no doubt. Learned that one the hard way probably more than one time. But anytime you're doubting the integrity of someone very close to you, it's almost certainly the case that That doubt isn't without basis, and you need to act upon it, or at least confront the person and tell them, look, I'm having a real problem with the way the situation is unfolding here. So that's kind of a vague but dramatic sounding story. A simpler, m…

AI assessment note: “Whenever there's doubts, there's no doubt. Learned that one the hard way”

Q A couple of things to unpack there in terms of kind of being that present and, uh, kind of omniscient leader in terms of, is it a truly scalable position to be in as the company kind of reaches different inflection points and milestones? Can you always be that leader?

A I think you can. I think you have to be strategic about it. You can't be in two places at once. So at any given time you need to decide where you'll add the most value, but you also need to be there with your team. They're not everybody at a firm reports to me. They're having an excellent management team and they have their own management that works to them. And I think we're a three layer organization as they say now, as often as not being there means sitting down with my executive team and saying, we're facing this huge challenge. It's scary. It's interesting. It's complicated. It's, it could kill us, but it can make us stronger. I'm here. How can I help? And, uh, let them lead their teams from the front. And so it, it scales so long as you bring on and train excellent managers. The other thing that I think you cannot give up no matter how large you are, Hallmark of a really great leader is someone who can drop down from the 64,000 feet into the trenches with the team, roll up their sleeves, and do some of the work directly right there with the team. And it doesn't mean the wrong way of doing this is you Get in with the team and bring them pizza while they try to rush out a bug fix. That's great, but that sort of diminishes your contribution. You're, you're, you're just signaling And there's nothing wrong with bringing pizza, but you're much better off getting down there and …

AI assessment note: “I think you can. I think you have to be strategic about it.”

Q I have one final one for you that I know you won't have been asked. I don't think you'll have been asked, but it's a kind of a meaningful one. What about the way that your parents brought you up? Have you deliberately decided not to apply to the way that you bring your children up?

A So I grew up in an academic family, and for them, the notion of advanced degrees was the ladder to climb, and so it was embarrassing that my mom never got a PhD to her mom. Who was an exceptionally important influence in my life and my mom's life. And so this notion of the way you achieve in the world, the goals to set, the ways to think about success and failure in life is measured through academic success. My grandmother has papers in the Harvard library. She's long gone, but you know, she, she was a Soviet scientist that managed to have her astronomy PhD thesis referenced in like Dozens of academic papers in the United States. And so she achieved the academic peak early in life and stayed there. And as she was very old and quite ill, she'd asked me, well, what about the PhD track? And I was just about to start my third company. It's like, you know, I'm gonna get a bachelor's and basically because of you. Otherwise I would have long dropped out and moved to Palo Alto and started a company already. It all worked out in the end, so I'm not complaining. But they grew up in a world where entrepreneurship was not a factor. Soviet Union was not a place where entrepreneurship meant anything in those days. And I would love for my kids to at least explore entrepreneurship and decide that it's important. So telling them you must spend a decade on the school bench is counterintuitive to…

AI assessment note: “telling them you must spend a decade on the school bench is counterintuitive”

Q Um, is Klarna growing faster than the firm? And how do you think about that in, in terms of Klarna's US expansion?

A I think they announced that they grew 32% last quarter. I think we announced that we grew 35%. Uh, I, in the last few quarters, and their, their numbers aren't public, they're about to go public, so it's, it's, uh, it will be a little bit easier to track their numbers, I think, for, for all involved. But for the last several quarters, from estimates, so we have been taking share in the market against all competitors, not, not just them. And so I think that's a good sign For us. We offer more services though. Majority of our competitors specialize in paying for or something very, very specific. We made the decision from day one to provide every possible service from the 45 day super short term loan all the way out to four years. Very, very few people do everything. And so it should be a natural consequence of our ability to serve all that we would take disproportionate share.

AI assessment note: “they grew 32% last quarter. I think we announced that we grew 35%.”