The Exchanges

Q Speaking of kind of a core leadership function, in the book you discuss kind of decision making, and this really was one of my favorite analogies, I think probably of any book I've read, which is decision making and aligning that torpedoes hitting a boat. Can I ask Maynard, what did you mean by this, and how should that affect how one thinks about decision making?

A Thanks for asking that, and I always look at it as, you know, you're going to get torpedoes, Fired at you by the world, by your enemies, by your competitors, and you're going to make decisions that could be like a torpedo. And so, for example, when we were looking to buy Skype at eBay, we used that analogy to say, okay, if it doesn't work, is it going to hit us above the waterline where it's going to be ugly and we're going to have to fix it, but it's fixable? Or is it going to hit us below the waterline where you can't do anything in the boat sinks, meaning the company goes under it? So that's what I mean by that is, is it a bet the company decision, or is it fixable if the decision goes bad?

AI assessment note: “is it a bet the company decision, or is it fixable”

Q Speaking of kind of a core leadership function, in the book you discuss kind of decision making, and this really was one of my favorite analogies, I think probably of any book I've read, which is decision making and aligning that torpedoes hitting a boat. Can I ask Maynard, what did you mean by this, and how should that affect how one thinks about decision making?

A Thanks for asking that, and I always look at it as, you know, you're going to get torpedoes, Fired at you by the world, by your enemies, by your competitors, and you're going to make decisions that could be like a torpedo. And so, for example, when we were looking to buy Skype at eBay, we used that analogy to say, okay, if it doesn't work, is it going to hit us above the waterline where it's going to be ugly and we're going to have to fix it, but it's fixable? Or is it going to hit us below the waterline where you can't do anything in the boat sinks, meaning the company goes under it? So that's what I mean by that is, is it a bet the company decision, or is it fixable if the decision goes bad?

AI assessment note: “is it a bet the company decision, or is it fixable if the decision goes bad”

Q Can I ask, such a momentous decision, is there anything that one can do, be it the founder, be it the CEO, be it the exec team, that can really kind of prepare oneself mentally for that huge consequence of their decision?

A Yes, and one of the things we did at eBay is we would have, you know, one of the things you worry about is deals get momentum and get excitement, and everybody gets aligned around that. And sometimes you're not willing to actually do the parade of horribles about what could happen, and so we would do a white hat and a black hat for the board, where some, one of the executives would have the white hat, which is the one that's, this is popular, oh, this is going to be the best thing we've ever done, and here's what could happen when all these miracles happen, and then the other would come in and say, no, you know, most, just like most startups fail, most acquisitions don't do well, here's how this is going to end up being Horrific. And so then they got to hear both sides of that, and we make decisions with eyes wide open, which I thought was very helpful.

AI assessment note: “we would do a white hat and a black hat for the board”

Q Can I ask, such a momentous decision, is there anything that one can do, be it the founder, be it the CEO, be it the exec team, that can really kind of prepare oneself mentally for that huge consequence of their decision?

A Yes, and one of the things we did at eBay is we would have, you know, one of the things you worry about is deals get momentum and get excitement, and everybody gets aligned around that. And sometimes you're not willing to actually do the parade of horribles about what could happen, and so we would do a white hat and a black hat for the board, where some, one of the executives would have the white hat, which is the one that's, this is popular, oh, this is going to be the best thing we've ever done, and here's what could happen when all these miracles happen, and then the other would come in and say, no, you know, most, just like most startups fail, most acquisitions don't do well, here's how this is going to end up being Horrific. And so then they got to hear both sides of that, and we make decisions with eyes wide open, which I thought was very helpful.

AI assessment note: “we would do a white hat and a black hat for the board”

Q Indeed. An ultimate question. Work-life balance. Is it really possible?

A Yeah, but I think everybody's definition of it is different, and I think life and work are a tapestry, and you have to find a way to get joy out of work and joy out of time with your family, and it's not always going to be perfect, and it's finding the moments and making more of the good moments. So, it's a journey, and I think people that think, I had, um, when I was leaving LiveOps, I had one of our superstar young folks come up and say, hey, Maynard, I want to be a CEO. I'm like, that's great, and he's like, okay, what, what are the attributes of a CEO? And I said, well, they're all different. Mark Zuckerberg and Mark Benioff are different, and Meg Whitman's different than them, and, you know, they all have different strengths and skills. He goes, well, the number one thing for me, though, is work-life balance. I said, hey, you just named the one attribute that I think none of them have, and if you really want to be a CEO, there's going to be a lot of people competing with you to become the CEO. You're going to have to work hard. I hate to say that. The top jobs require lots of energy and time, and that doesn't mean you can't find moments and have a great family, and I want you to do that, but it's really hard. So I think people that dream about having the best jobs in the world and the best work-life balance may not be as practical as they hope it is.

AI assessment note: “Yeah, but I think everybody's definition of it is different”

Q I'm really intrigued. You said there about kind of the price sensitivity, how the price has changed, walking away. We have Peter Fenton at Benchmark on the show. And he said that no good deal is ever expensive in hindsight. How do you think about price sensitivity? And what would your advice be maybe to founders raising rounds today?

A Well, I just think it's way more important who you get the money from than the price you get. And that's counterintuitive. But unfortunately, if you end up with a really good price and a really bad board member, you're going to forget That you got a really good price and your life's going to suck for a lot of the time you're dealing with a really bad board member. So, so you got to weigh all the factors in deciding who do you want to have with you for the journey. And by the way, they have a right to the journey. So you don't get to say goodbye if you don't like them. So you got to be super cautious about who you add. And then I always provide advice to CEOs and to investors to make sure everybody feels great about the round. So there's upside for everybody going forward, and there's a lot of ownership left for the CEO, because this is just when you get your first money, it's your first money. You're going to go through this several more times, and the better everybody feels as you go through it, the easier it is for everybody to keep growing.

AI assessment note: “way more important who you get the money from than the price you get”

Q I'm so pleased you said about the 2000 there, because I'm always fascinated when I have the chance with a guest as wise as you. How have you seen, having kind of experienced the multiple booms and busts, how has that affected both your operating and your investment mentality today, Maynard?

A Well, I think any good company that gets started today is going to go through several booms and busts. And when you get into the timing of when you go liquid and go public, it's a crapshoot of whether the market's going to be ready for you or not. So I'm always focused on just building a great business to last, and sometimes you'll get better advantage in pricing if the wind's at CEOs back, and sometimes the wind will be at the investors back, and that will change market dynamics a little bit. But trying to time exactly When to get in or get out. I like these companies, the good ones all take generally over 10 years to get to a liquidity event if it's going public, and the market's going to change a lot in that. So I've stayed pretty focused on just building good companies.

AI assessment note: “So I'm always focused on just building a great business to last”

Q I'm really intrigued. You said there about kind of the price sensitivity, how the price has changed, walking away. We have Peter Fenton at Benchmark on the show. And he said that no good deal is ever expensive in hindsight. How do you think about price sensitivity? And what would your advice be maybe to founders raising rounds today?

A Well, I just think it's way more important who you get the money from than the price you get. And that's counterintuitive. But unfortunately, if you end up with a really good price and a really bad board member, you're going to forget That you got a really good price and your life's going to suck for a lot of the time you're dealing with a really bad board member. So, so you got to weigh all the factors in deciding who do you want to have with you for the journey. And by the way, they have a right to the journey. So you don't get to say goodbye if you don't like them. So you got to be super cautious about who you add. And then I always provide advice to CEOs and to investors to make sure everybody feels great about the round. So there's upside for everybody going forward, and there's a lot of ownership left for the CEO, because this is just when you get your first money, it's your first money. You're going to go through this several more times, and the better everybody feels as you go through it, the easier it is for everybody to keep growing.

AI assessment note: “it's way more important who you get the money from than the price you get.”

Q into the person who chooses on that round and chooses the board members themselves, the CEO, you were CEO of LiveOps, you were President of eBay, and so I'd love to hear your thoughts. I've interviewed many CEOs, and the prevailing wisdom, Maynard, is the dominant role of CEO is management upscaling. How do you respond to this, and how do you maybe truly define the role of CEO today?

A I think being a CEO is one of the coolest jobs and one of the toughest jobs on the planet, and it's multi-dimensional chess. You have employees, and by the way, it's very lonely because you are the only person making the final decisions on a lot. And you have employees that you have to inspire and motivate and get to do things. You have customers that you have to sell to and keep happy, and you have investors and board members that you have to keep happy, and they're not all always in sync. And so I think it's really hard, and it's all tied to not just being a visionary and great technically, but you have to be human, and you have to have a lot of social skills to let you triage all those different entities.

AI assessment note: “it's multi-dimensional chess. You have employees... customers... investors and board members”

Q But you mentioned the board there, and I can't not discuss the board while I have the opportunity. Starting at the very beginning, I guess, a lot of founders asked me, Harry, when's the right time to construct my board, and what should my board look like in these early days in terms of the people on it? How do you think about this, and what would your advice be?

A I wouldn't have a board until I was required to have one, because I had to raise enough outside comfortable that they would not give it to me until it came with a board seat. That doesn't mean I wouldn't act like I had a board, and I'd have good advisors, but I wouldn't seat control until I had to seat control, and so I think smaller is better, and always if you add a VC partner. Make sure you have an independent with you, whether that's on top of the co-founder or not. And I think small is much better than bigger. And then it's another thing that is, it doesn't stay the same. So when you get your A round, you'll get a VC. When B round, you might pick up another one. If you're doing really great, you might not have to. C round, you know, and it goes on from there. And then when you get to go public, You have a lot of other skills you need, like you need to have a, somebody with a strong financial background to do all the things that are required for audit, and so the roles change a lot, but when I was a CEO at LiveOps, I tried to make sure I had a room full of people that provided advice that I wasn't as strong on. You know, I was more a builder than a go-to-market guy, so I had two people that helped me on that, that I knew and trusted and wanted help, so. I think small is better, and I would suggest founders don't require a formal board until it's, uh, thrust on them, but the…

AI assessment note: “I wouldn't have a board until I was required to have one”

Q terms of kind of getting the talent around the table, and maybe moving slightly away from the board, we'll discuss that. Slightly more in the interview, but in terms of getting the talent around the table and the team itself, the very best CEOs hire the very best execs. Having seen multiple of the best CEOs, what are the commonalities in how they really attract and attain that best talent?

A The best folks, and I think Mark Benioff is one of the best at finding and keeping talent. He knows everybody in the industry, and he knows for every slot he's got. Who are the three others if they're not? First of all, there's a lot of growth from within companies. But if they're not in the company, who was out there that he should be able to get? And that's when he went and got Keith Block years ago out of Oracle, and we just made him the co-CEO, as I'm sure you saw. But he's amazing, and Meg used to go hire people before we needed him, because she knew we were going to scale into needing them. By the way, I used to think that was crazy, and then I fell in love with it, because they all got gobbled up within three to six months, end of Meaningful roles. And so I think the best CEOs are able to attract, retain, inspire talent, and they know that that's a huge piece of their job.

AI assessment note: “He knows everybody in the industry, and he knows for every slot he's got.”

Q into the person who chooses on that round and chooses the board members themselves, the CEO, you were CEO of LiveOps, you were President of eBay, and so I'd love to hear your thoughts. I've interviewed many CEOs, and the prevailing wisdom, Maynard, is the dominant role of CEO is management upscaling. How do you respond to this, and how do you maybe truly define the role of CEO today?

A I think being a CEO is one of the coolest jobs and one of the toughest jobs on the planet, and it's multi-dimensional chess. You have employees, and by the way, it's very lonely because you are the only person making the final decisions on a lot. And you have employees that you have to inspire and motivate and get to do things. You have customers that you have to sell to and keep happy, and you have investors and board members that you have to keep happy, and they're not all always in sync. And so I think it's really hard, and it's all tied to not just being a visionary and great technically, but you have to be human, and you have to have a lot of social skills to let you triage all those different entities.

AI assessment note: “being a CEO is one of the coolest jobs and one of the toughest jobs”

Q I'm so pleased you said about the 2000 there, because I'm always fascinated when I have the chance with a guest as wise as you. How have you seen, having kind of experienced the multiple booms and busts, how has that affected both your operating and your investment mentality today, Maynard?

A Well, I think any good company that gets started today is going to go through several booms and busts. And when you get into the timing of when you go liquid and go public, it's a crapshoot of whether the market's going to be ready for you or not. So I'm always focused on just building a great business to last, and sometimes you'll get better advantage in pricing if the wind's at CEOs back, and sometimes the wind will be at the investors back, and that will change market dynamics a little bit. But trying to time exactly When to get in or get out. I like these companies, the good ones all take generally over 10 years to get to a liquidity event if it's going public, and the market's going to change a lot in that. So I've stayed pretty focused on just building good companies.

AI assessment note: “I'm always focused on just building a great business to last”

Q terms of kind of getting the talent around the table, and maybe moving slightly away from the board, we'll discuss that. Slightly more in the interview, but in terms of getting the talent around the table and the team itself, the very best CEOs hire the very best execs. Having seen multiple of the best CEOs, what are the commonalities in how they really attract and attain that best talent?

A The best folks, and I think Mark Benioff is one of the best at finding and keeping talent. He knows everybody in the industry, and he knows for every slot he's got. Who are the three others if they're not? First of all, there's a lot of growth from within companies. But if they're not in the company, who was out there that he should be able to get? And that's when he went and got Keith Block years ago out of Oracle, and we just made him the co-CEO, as I'm sure you saw. But he's amazing, and Meg used to go hire people before we needed him, because she knew we were going to scale into needing them. By the way, I used to think that was crazy, and then I fell in love with it, because they all got gobbled up within three to six months, end of Meaningful roles. And so I think the best CEOs are able to attract, retain, inspire talent, and they know that that's a huge piece of their job.

AI assessment note: “He knows everybody in the industry, and he knows for every slot he's got.”

Q But you mentioned the board there, and I can't not discuss the board while I have the opportunity. Starting at the very beginning, I guess, a lot of founders asked me, Harry, when's the right time to construct my board, and what should my board look like in these early days in terms of the people on it? How do you think about this, and what would your advice be?

A I wouldn't have a board until I was required to have one, because I had to raise enough outside comfortable that they would not give it to me until it came with a board seat. That doesn't mean I wouldn't act like I had a board, and I'd have good advisors, but I wouldn't seat control until I had to seat control, and so I think smaller is better, and always if you add a VC partner. Make sure you have an independent with you, whether that's on top of the co-founder or not. And I think small is much better than bigger. And then it's another thing that is, it doesn't stay the same. So when you get your A round, you'll get a VC. When B round, you might pick up another one. If you're doing really great, you might not have to. C round, you know, and it goes on from there. And then when you get to go public, You have a lot of other skills you need, like you need to have a, somebody with a strong financial background to do all the things that are required for audit, and so the roles change a lot, but when I was a CEO at LiveOps, I tried to make sure I had a room full of people that provided advice that I wasn't as strong on. You know, I was more a builder than a go-to-market guy, so I had two people that helped me on that, that I knew and trusted and wanted help, so. I think small is better, and I would suggest founders don't require a formal board until it's, uh, thrust on them, but the…

AI assessment note: “I wouldn't have a board until I was required to have one”

Q Can I ask, in terms of kind of attracting that best talent, often when one brings in a very talented individual into a, maybe a leadership position or a position in a firm, there may be individuals existing within the firm who thought they were ready for that position. How do you think about maintaining morale when bringing in external candidates, and how do you really look to balance that?

A You know, it is a balance, but some of it is just math. For example, when I joined eBay, I think we had 300 people. When I left, we had 14,000. You can't do internal promotions to cover that. And by the way, you have to make sure you give, I think I said in the book, and I mean, that some of my best, some of my worst hires were when I went outside to get the Rockstar that had done the job way before, but they didn't want to do it again. And some of my best hires were when I gave my internal team a chance, and they stepped up in a big way, but the mass doesn't close when you're scaling, and you need to bring people along with that, and we used to tell people, like, if you stay in your own job, if there's 300 people in the company today, and it's a thousand next year, doing the same job is like a battlefield promotion, because you're already going to have more people, and it's much bigger, and we used to do everything we could do at eBay to get people To get inspired by the journey and get bigger roles, and we worked hard to train them and get them ready for those bigger roles, but you do need to selectively insert, because you just can't scale with just the people that are there.

AI assessment note: “doing the same job is like a battlefield promotion, because you're already going to have more people”

Q Can I ask, in terms of kind of attracting that best talent, often when one brings in a very talented individual into a, maybe a leadership position or a position in a firm, there may be individuals existing within the firm who thought they were ready for that position. How do you think about maintaining morale when bringing in external candidates, and how do you really look to balance that?

A You know, it is a balance, but some of it is just math. For example, when I joined eBay, I think we had 300 people. When I left, we had 14,000. You can't do internal promotions to cover that. And by the way, you have to make sure you give, I think I said in the book, and I mean, that some of my best, some of my worst hires were when I went outside to get the Rockstar that had done the job way before, but they didn't want to do it again. And some of my best hires were when I gave my internal team a chance, and they stepped up in a big way, but the mass doesn't close when you're scaling, and you need to bring people along with that, and we used to tell people, like, if you stay in your own job, if there's 300 people in the company today, and it's a thousand next year, doing the same job is like a battlefield promotion, because you're already going to have more people, and it's much bigger, and we used to do everything we could do at eBay to get people To get inspired by the journey and get bigger roles, and we worked hard to train them and get them ready for those bigger roles, but you do need to selectively insert, because you just can't scale with just the people that are there.

AI assessment note: “doing the same job is like a battlefield promotion”

Q No, and I absolutely love that chapter in the book, by the way. It was one of my personal favorites. In terms of the scaling of the company itself, in terms of the scaling of individuals, sometimes you might hire a stretch candidate into a role. When is that? Stretch, kind of, a stretch too far. Are there any signs that really make it clear for you, Maynard?

A There are times that you have a stretch too far, and there are times that you hired, like I mentioned before, I have made hiring mistakes where I hired way above where we were, and tried to make sure they were willing to do today's job so we could grow into them, and I think it's just being crystal clear with what the opportunity is, and what the Roles are going to be, how they're going to do them, what's expected of them, and like in one of my mistakes at eBay, the person that came in was more worried about work-life balance than answering the phone when the site was crashing. We were not at the stage for that, right? If eBay went down, our world had to jump on the phone and fix it. So I think it's really just being clear with what you need and what you're going to need. I used to always Look at everybody that I had, and I'd say, how are they doing the job today? Green, yellow, red. You know, and a lot of times, they were not always green, and if they weren't, you know, what would it take me to get them to green? And then, even if they were green today, where would they be in 12 months with the scale that we, the amount we were growing? And when you looked at it that way, you could start seeing cracks and crevices. And because, by the way, when your company gets bigger, you have to not just Make your team happy, you have to work across boundaries a lot more, and you have to be…

AI assessment note: “when you looked at it that way, you could start seeing cracks and crevices.”

Q Can I ask, have there been any negative changes? If there's kind of the ease of entrepreneurship being Amazon web hosting?

A Oh, the other, like, there were very, very, there were little groups of angels. There have been, and I don't know whether you would call this negative. I think it's a positive, since I am one of them, but there's a lot more money in the market today, both at the low end, which frankly makes it even easier for the VCs who used to have to do more of their funding. They're able to see things that are more Proven out by the time they actually deploy big bucks, but there's a lot of angel investment out there, and then at the high end, with folks like Southbank coming in, you know, with hundred million, that was never available before.

AI assessment note: “I don't know whether you would call this negative. I think it's a positive”

Q It's an interesting one. Me and my partners, they always say that the one risk we don't take is market timing risk. How do you think about market timing when investing? Is that kind of a primary thought?

A I'm investing in the, mostly in the seed rounds. And it's so far away, like, I'm trying to get companies that can worry about market timing, right? Because I have to get the babies up and walking into relevance and then the scale, and so that's years away, and so when you're investing, what I always do try to do is, I mean, I get pulled into doing things. If I fall really in love, I may end up spending more than I wanted to to get into a deal, but it's because I loved it, and the market The environment for deals has gone up. I mean, when I started in 2010 doing Web Investment Network, a cap on a seed around it was more like a five, and today that's higher than that. So, the average has certainly gone up, and we pay attention to that, but we also are willing to walk away from deals that we think are way ahead of the pricing, because we found that doesn't serve us well.

AI assessment note: “I'm investing in the, mostly in the seed rounds. And it's so far away”

Q No, and I absolutely love that chapter in the book, by the way. It was one of my personal favorites. In terms of the scaling of the company itself, in terms of the scaling of individuals, sometimes you might hire a stretch candidate into a role. When is that? Stretch, kind of, a stretch too far. Are there any signs that really make it clear for you, Maynard?

A There are times that you have a stretch too far, and there are times that you hired, like I mentioned before, I have made hiring mistakes where I hired way above where we were, and tried to make sure they were willing to do today's job so we could grow into them, and I think it's just being crystal clear with what the opportunity is, and what the Roles are going to be, how they're going to do them, what's expected of them, and like in one of my mistakes at eBay, the person that came in was more worried about work-life balance than answering the phone when the site was crashing. We were not at the stage for that, right? If eBay went down, our world had to jump on the phone and fix it. So I think it's really just being clear with what you need and what you're going to need. I used to always Look at everybody that I had, and I'd say, how are they doing the job today? Green, yellow, red. You know, and a lot of times, they were not always green, and if they weren't, you know, what would it take me to get them to green? And then, even if they were green today, where would they be in 12 months with the scale that we, the amount we were growing? And when you looked at it that way, you could start seeing cracks and crevices. And because, by the way, when your company gets bigger, you have to not just Make your team happy, you have to work across boundaries a lot more, and you have to be…

AI assessment note: “where would they be in 12 months... you could start seeing cracks and crevices”

Q Can I ask, have there been any negative changes? If there's kind of the ease of entrepreneurship being Amazon web hosting?

A Oh, the other, like, there were very, very, there were little groups of angels. There have been, and I don't know whether you would call this negative. I think it's a positive, since I am one of them, but there's a lot more money in the market today, both at the low end, which frankly makes it even easier for the VCs who used to have to do more of their funding. They're able to see things that are more Proven out by the time they actually deploy big bucks, but there's a lot of angel investment out there, and then at the high end, with folks like Southbank coming in, you know, with hundred million, that was never available before.

AI assessment note: “I don't know whether you would call this negative. I think it's a positive”

Q It's an interesting one. Me and my partners, they always say that the one risk we don't take is market timing risk. How do you think about market timing when investing? Is that kind of a primary thought?

A I'm investing in the, mostly in the seed rounds. And it's so far away, like, I'm trying to get companies that can worry about market timing, right? Because I have to get the babies up and walking into relevance and then the scale, and so that's years away, and so when you're investing, what I always do try to do is, I mean, I get pulled into doing things. If I fall really in love, I may end up spending more than I wanted to to get into a deal, but it's because I loved it, and the market The environment for deals has gone up. I mean, when I started in 2010 doing Web Investment Network, a cap on a seed around it was more like a five, and today that's higher than that. So, the average has certainly gone up, and we pay attention to that, but we also are willing to walk away from deals that we think are way ahead of the pricing, because we found that doesn't serve us well.

AI assessment note: “I'm trying to get companies that can worry about market timing, right?”