The Exchanges

Q How long does it take you to realize a year? Okay.

A Basically COO roles were longer. They were three years. We tried it twice. For the most part, we give everybody about a year to prove themselves at 37 Signals. And so we hire somebody and they have about a year until we decide if we're going to hire them again. That's how I think of the second year. It's a rehire. It's not like a performance review where we look at numbers and it's like one simple question. I always try to like, if I can, I always try to boil everything down to a question that answers all the other questions. So the question we ask after the first year with any new employee is, knowing what I know now, would I hire them again? And that answers pretty much every question. Answers every question about performance, about attitude, culture, fit, all the stuff. If I know what I know now, would I hire them again? And so it turned out with the management stuff, we're like, it wasn't even about the people. It was more like, now that we know what we know now, would we create this position again? And the answer was no. So we eliminated those positions and never rehired for them. So that's how we kind of got back a little bit to, to a smaller size.

AI assessment note: “we give everybody about a year to prove themselves at 37 Signals”

Q software company to get to a billion dollars in sales of just pure software in a year. Yeah. But the first 30 Uh, employees of Microsoft were Bill Gates, his secretary, and 28 programmers. There's no, there's no fat at all. That's something you talk about a lot. Can you talk about your, the importance of keeping costs low, small teams, and then you want, essentially, like, no fat anywhere?

A We have 62 people at, at 37 signals, and we've gotten as high as, I think, 80 at some point, and then we're about 63, or 62 right now, which is, uh, feels really good. Um, but we also built a lot of things when we were much smaller. We had, like, 12 people way back in the day, or four people way back in the way, way, way days when we started out. So I've always been comfortable with small teams. I think that small teams work better, are better. There's fewer, there's less room for miscommunication, because I don't think companies really have communication problems. They have miscommunication problems. Like, when you have too many people, and too many layers, and someone misses this, and someone has to repeat something that happened, like, I want to avoid all of that. Get rid of all the things that get in the way of making good stuff. And I actually think too many people get in the way oftentimes, and you actually end up making worse stuff the more people who are involved. So we just try to keep the team small. Any team we have making something is usually two people, like two people working on a feature, one programmer, one designer. That's pretty much it. Sometimes someone else will come in here and there, but for the most part, it's two people. And it also keeps us honest. It prevents us from making things that we can't make with two people. So it just keeps everything tight a…

AI assessment note: “I think that small teams work better, are better. There's fewer, there's less room for miscommunication”

Q Beats real quick. I want to close that loop. Where he's like, ask him about the fact that he's bringing these super controversial artists at the time. They're not that well known. I think it was Dre and Snoop. And they wouldn't play him on the top 40. And he says, Jimmy did something genius to get Dre and Snoop Play it on the top 40. What did you do?

A Well, I, I just considered it a reflex. You know, what, what we did was, I said, ok, you gotta understand, whenever there's gatekeepers on anything, Your job is to figure out a way around the gatekeeper with something you really believe in. Whether the gatekeepers are people at your own company, or people in, you know, at radio stations, or at wherever the gatekeepers are, your job is to skate around them, right? So I said, okay, let's do this. Let's make a minute commercial of G-Thang, which was Dre's first single with Snoop, right? I said, let's make a 62nd spot. Now, I don't want anything said before it or after it. I just want it to play.

AI assessment note: “Let's make a minute commercial of G-Thang, which was Dre's first single”

Q How many years did they give you the run of the field?

A That's the great question. I'd say we got the run of the field. We opened up, uh, the first Whole Foods was in 1980, say for a 1978. And, ah, we didn't open up, it was 2004, we opened up Columbus Circle. So think about that. We had, you know, 20, 20 to 25 years where nobody paid any attention to us, and that allowed us to scale and compound, and they just dismissed us. They just thought, who cares about Whole Foods? They don't hurt us. We never hurt any one supermarket that much. In fact, we'd come into a new market, and they'd be all, they'd compete initially, they'd try to lower prices, get some of our products, but then their sales didn't drop very much. Because Whole Foods would take a little bit from a lot of different groceries. We wouldn't take much from any particular one. So, as a result, they just thought, they're not, we don't have any problem competing with Whole Foods. They just ignored us.

AI assessment note: “We had, you know, 20, 20 to 25 years where nobody paid any attention”

Q What about, like, larger things in your life? Like, who do you think had, like, an impact, like a, my life would not be the same if not for that one conversation, that one idea with that person?

A Two people came to mind, uh, right away. Uh, the first is Herb Allen from Allen & Company, who I don't, I don't know well, um, These lessons came from one incredibly, you know, incredibly interesting conversation about, my sense of him, again, don't, don't know him well, is that he is uncompromising in his values. He, he does, he's maybe like the apex predator of like the thing I want to do, which is like picking and supporting people. I think that's what he's done for a really long time with unbelievable success. And that he is so incredibly uncompromising about how he does that and willing, I won't tell the examples, but like, I think willing famously to like throw away huge commercial opportunities just because the person wasn't who he wanted to support. Um, so sometimes it's literally a conversation with a person that just smacks you in the face and makes you feel, uh, validated maybe, um, for, for what you're trying to do. There's a gentleman named Reese Duca who's been Who's very, very private. Um, and you know, there's no content about him or interviews with him. I, I wish to God I could, he would let me interview him. I know, I know he never will. Um, Who has been incredibly impactful on, at like a philosophical level. He has, he has all these amazing little phrases, but his life kind of boils down to simplicity, the beauty of simplicity. He gave me this line one time, …

AI assessment note: “Two people came to mind, uh, right away. Uh, the first is Herb Allen”

Q Wait, there was a guy, is, didn't somebody, like, Inside the bank vouch for you?

A Lloyds Bank ran a system. Instead of going to a man sitting in a branch of the bank and borrowing from them, they had a sort of flying doctor who went around businesses. So he was a real business expert, and he, he didn't work from an office. He just went around people's businesses. Interesting man, actually. And, uh, he, the, the, the bank refused his request for the loan. So he went to the ombudsman within the bank. And persuaded them to lend me the money. And it was a crazy thing for them to do, actually, because, uh, you know, this guy is setting up business to make vacuum cleaners to compete with all the big mountain nationals. What earth is he doing? Living in a little coach house near Bath. When you think about it, it's completely mad.

AI assessment note: “So he went to the ombudsman within the bank. And persuaded them to lend me”

Q Why could you do it for so cheap? Because your only expense was your time? Yes.

A Yes, I'm working at home. Uh, the only expense is my time and a few cheap materials. I couldn't buy a lathe or equipment. I was doing it all with little black and decas and things like that, uh, by hand. I was making cyclones by rolling them in rollers. I went and bought some antique metal rollers down at a junk store for 25 pounds, and I could roll cyclones, you know, they're a funny shape, like a sort of, Uh, upside down cone. And sold them together. So I was doing everything by hand. Um, but I could do that. I mean, it works. You, you can do things for nothing. You don't need to spend a lot of money.

AI assessment note: “the only expense is my time and a few cheap materials”

Q How many things at any given time are you having to focus on?

A A fair amount. So if you're CEO, you're, you're managing, You know, 15, 20 different things always. You're managing people. You manage technology. You're managing budgets. You're managing investors. You're managing, uh, infrastructure. You're managing transportation. You're managing logistics. You're managing pricing. You're managing procurement with the vendors. You're managing customer relations. You're managing sales. You're managing Salesforce excellence. I mean, it's just, there's about 20 things that are your life. Like, that's what a C, that's what a good CEO does. The problem with a lot of CEOs is they've come up through just Sales or operations, and they're good at that, but they kind of just delegate the other 15 things. That's, that's really part of the CEO job. You look at the great CEOs. The CEOs have created a lot of alpha, a lot of shareholder value. They've been in each one of those 20 or so things. You talk to a Dave Cody, you talk to an Ed Breen, you talk to a Larry Culp. You can talk about any of those 20 things, and they haven't, they have things to say, and you can learn from them. You talk to CEOs who haven't created a lot of value, who are not really good at this game, They'll know four or five or six or even half of those 20 things, but they don't do the other. They don't do the other part. You gotta be in all of them. But, but you're not in all those th…

AI assessment note: “you're managing, You know, 15, 20 different things always.”

Q So can you explain how you stumbled upon the negative cash conversion cycle and why that was so powerful?

A Yeah, so, you know, we didn't have any capital, right? And so, uh, you know, what, what we, what we figured out was that if we could dramatically, uh, shrink, um, our inventory and get paid from our customers faster and, you know, uh, maybe not pay our suppliers, you know, instantly pay them a little bit later, then If you're growing and you have a negative cash conversion cycle, you actually generate a lot of cash. And so, you don't need as much capital to raise to be able to grow the company. You have a high return on capital. So, we started looking at the business that way. And of course, we also, uh, there was this, um, really interesting thing where our competitors, who didn't really understand what we were doing, they had these elongated supply chains. They had distributors and dealers, and so they would have, you know, like, 90 days of collective inventory from the time that they actually made the product to when it actually got to the customer. And you could actually understand this because if you opened up the computers, the chips had dates on them that showed the weeks they were made.

AI assessment note: “we didn't have any capital, right? And so, what we figured out was”

Q is life about happiness? It's about impact. You can have an impact on Uber, which is a really important company in the world that's shaping the future of cities. And I thought, thought to myself, my God, this is so obvious. I've got to take a shot. I knew it was going to be uncomfortable. Can you just explain how you think about optimizing for impact or happiness and why?

A Well, first off, it's, it's incredibly kind of Dara to say that, um, You know, I, I think about this. I think happiness is a trailing indicator of impact. And, uh, I think you can be, you know, you can feel happiness in small bursts, in small moments, uh, and you can have a lot of variance in your life. So you can choose to have that part, which is the ups, the downs of life, et cetera. So I'm not saying you can have happiness, but I think truly sustained happiness comes from, uh, impact and impact is something that's deeply personal to you. Uh, only you can define what What impact means for you. Um, so I think it means different things for different people, but I do think it's a trailing, um, indicator. So the way, uh, you know, I would put it in this case is, you know, what was obvious for me, uh, with someone like Adara, uh, was he was content. He wasn't happy. And, um, you know, he had gone through a phase, um, knowing him for a while where, uh, he had a lot of ups and downs with Expedia and all that stuff. And he kind of mostly figured it out, and so he was content. And I think that in his case, you know, where he was at his life, um, it was such an obvious thing that he didn't even realize that he'd just grown content. And so, for me, um, you know, Uber is a very special company, and to even be asked to be the CEO of that, and the impact I knew he could have on that compa…

AI assessment note: “I think happiness is a trailing indicator of impact.”

Q Do you think there's something special about it being analog that you're actually writing with pen to paper?

A For sure. I've tried to move to computer. And all the good ideas go away. I mean, not entirely, right? And like, what happens is, now I wake up pretty early in the mornings, and you know, six to eight a.m. is kind of my most productive time, but that, I'm, I'm in the morning, I'm, I'm kind of like doing the work that I assigned myself the night before. So I'm like, okay, I gotta solve this, I solve that, and then I open the computer, and that's all on the computer, and then I'm like actually executing, but there's like this special, you know, 30 to 60 minutes in the evening with a pen and a paper and no distractions. I can't get a notification. I can't get a call. Like I'm just focused and I really enjoy that. And I'm sure some people have the, have the capacity to focus, you know, using digital tools, but like the analog is really, uh, clarifying and focusing for me.

AI assessment note: “For sure. I've tried to move to computer. And all the good ideas go away.”

Q What have you, like, what did you learn from the people that worked for Tim?

A Mostly this maniacal focus on critical path and resolving constraints, and I've also learned a lot of this from Antonio Gracias, who's on my board and has worked very closely with Elon for decades. The first year or two of working with Antonio, basically every conversation I had with him, and still to this day, this is, you know, the main focus of all of our conversations, every conversation was the same. Hey Antonio, how's it going? Good, how are you? What's up? Um, you know, Zach, uh, what, what's your constraint? Like what's the constraint of the business? And I'll just answer the question and that's all we can talk about. That's it. What's the constraint? What's the constraint? What's the constraint? Like if we agree on the mission, the vision and the strategy, okay, we're good there. What's constraining us to get to that? Let's just focus all of our time and energy on that. And that, Kind of flows into all of the little things in process and kind of how people operate that show up kind of in the day to day with the metrics and the dashboards and the hot potatoes and the turtles. Like all that is, is just trying to get to what is constraining our business and how do we resolve those constraints that are on the critical path on the way towards our mission.

AI assessment note: “Mostly this maniacal focus on critical path and resolving constraints”

Q You gotta say more about that. Why do you like?

A Oh, because who wants a founder that changes his or her mind, depending on who they last spoke to. I want a founder who for the last five months has gone to sleep and, and has woken up three hours into his sleep. Just get, can, just thinking about the problem, thinking of the solution, crystal clear on what they want to build. No one can detract them, driven like crazy and so on. That's what I want. Uh, but now we got to build a business, and so who do you recruit as the first 10 engineers? What does your first salesperson look like? Do you want people that are up and comers? No one that's establishing great is going to join you as a startup. That means you have to have an eye for these up and comer people in sales and marketing, because the made people are going to play it a little safer. And so, to help navigate, ah, all those sets of issues, that is what we at Sequoia, I think, are the very best in the world at.

AI assessment note: “because who wants a founder that changes his or her mind”

Q Deal is trusted by over 40,000 businesses. Learn how they can help your business today by going to deal.com forward slash Senra. That is deal.com forward slash Senra. So looking forward, you're on day 91. Like, what are you, what is going to, you think, occupy most of your time in the next 30, 60, 90 days? Like, what is on your mind right now? If you're not looking backwards.

A Looking for investments. Because at the end of the day, it doesn't matter if it helps the CORE during a crucible type moment and so on, as I said, it's going to matter what's on that sheet of paper or what I've done in the first year. So, We have a little thing we do on Mondays called MIT, the most important thing for the week, and everybody talks about, I've got to do this, and my, I had nothing going on, I just came back from vacation. I don't think I have, I don't think anybody ever said they have nothing going on. I mean, it takes guts to say in front of nine people, I have zero going on. My MIT is to go scrounge, I use that word, for deals. And that means getting on the phone, calling people I know, networking like crazy, and try to intercept some kind of very nice investments. It's one of the 21 of the 30 that I want to make in my lifetime.

AI assessment note: “Looking for investments.”

Q corner of the world. Deal is trusted by over 40,000 businesses. Learn how they can help your business today by going to deal.com forward slash Senra. That is deal.com forward slash Senra. Okay, so the identification of what was missing in Europe, right, which leads to this mission that we need a European defense tech company, then the mission comes before the conviction, or the conviction comes before the mission?

A The mission comes first. And the mission is to protect our democracies. And I always say it's, um, it's, it's always a real privilege. I always feel like we have, um, we talk to our new starters every month and we always say to them, you know, it is a real privilege to work in a company. Um, at least we feel that's where the mission is so easy that we protect our democracies. That's what we're here for. Um, and, and lots of other companies, you know, have to spend time and go on an offsite retreat to come up with some kind of mission paragraph that everyone agrees on eventually. And we don't have that. It's, it is to protect our democracies. And we can point out where we're doing this right now with, you know, what we're doing with our deployed drones, for example, in, in, in Ukraine, and it makes everything easier. Um, we obviously never expected the Ukraine war to happen that quickly, but now that we are deployed, it's, you know, it's very concrete. Um, this mission is a, is a, is a real thing. And then the conviction, you know, comes that there need to be these kinds of companies and, and that they need to be built in Europe. And one other reason why we, Are building Helsing is also we, we wanted to build a big company in Europe. We honestly looked at, you know, Spotify as a, as a, as a beacon, as a, as an example of, you know, a large company you can build that is, that has…

AI assessment note: “The mission comes first. And the mission is to protect our democracies.”

Q You got to say more about non-standard. Can you be more specific? Are they spiky?

A You don't want to fund a founder who has A very slightly different take. On the same idea as the last thousand people you talked to has tried to convince you and maybe convince themselves that somehow they're completely different and doing something totally new, but it's mostly like trying to, you know, fit in with the herd and be on the same track as everybody else and do what they're supposed to do, which is start a startup. And, you know, they've heard Peter Thiel say enough times that, you know, there's like something that you're supposed to be doing different that they kind of try to emulate that, but they don't really mean it. Like it's, it's very Clear to me when you have someone who just thinks differently than most other people and has, is, is willing to stand by convictions that are very unpopular, may well be wrong, but if right, like, at least they're going to be really right, versus someone who is like, uh, You know, thin veneer on the same idea that everybody else has. In late, late, when we were starting OpenAI, there were very few AGI efforts in the world. There was DeepMind, one or two others that I can think of. It was like a very non-consensus thing to do. In that same year, there were probably, I'll pick on it just because it, it came to mind, but there are other categories too. There were probably many, many thousands of founders starting photo sharing apps…

AI assessment note: “someone who just thinks differently than most other people and has, is, is willing”

Q How did you work your way through that? What was your thinking? Like, how'd you do this?

A We asked a bunch of people who had been at great research labs of the past. And it had been, you know, OpenAI started as sort of a time when everybody in Silicon Valley, as their vanity project, including me, wanted to start a research lab. And there were all these books about the heyday of Bell Labs or Zioxx Park that were very popular. Everybody was talking about this. There was a huge amount of discussion. In fact, I even see one of the books over there about, ah, about Bell Labs. But there was not a ton of people that had, like, in living memory how to actually do it. So we talked a lot to Alan Kay, we talked to a handful of other people, and we got some advice from them about, you know, what made a really good research, research lab, and some of it was really good, some of it didn't translate as well to the current moment.

AI assessment note: “We asked a bunch of people who had been at great research labs”

Q people, I heard you say something that was interesting. I think ties to what you just said about kind of like we're inventing technology, the technology is increasing rapidly, but the adoption should be slow and deliberate. And I heard you on another podcast saying, Hey, I'm even considering like, How much should I let AI see every single thing that's on my computer? You want to talk about that?

A With the latest generation of models, I don't want to say they feel smart enough, because I think we should always aspire for them to get smarter, but they're pretty smart. And I feel more limited at this point by the amount of useful context the AI has on me. Like, I want the AI to know as much as it can to help me. I want it to be doing things I can't or don't want to do on my own. Like, I I'm not going to read every post on our internal Slack. I'm not going to go read every story a customer has to tell about where ChadGPT worked for them or failed them. I can't. And then there's like other stuff of like, I just, you know, I probably could read more research papers than I do, but like, oh, it's like, takes a lot of mental energy and, you know, but I would love to have an AI agent that is constantly trying to be helpful to me and that can Look at and understand more context than I can, or that I have time for energy for to do on my own and can help bring that context to bear and give me good advice when I have to make a decision. So I think we've focused Correctly. So much on model intelligence that on the product side, we have not yet thought enough about what it means to give a model more context than any person could have and help advise that person on, on their big decisions. My sense is we are just on the precipice of being able to see a very different way of working with…

AI assessment note: “I feel more limited at this point by the amount of useful context the AI has”

Q Okay. Can you explain the ideas that are contained in your manifesto and why you think it's so important for founders today to do this?

A I remember trying to name the manifesto, spent like days and days, and then we ended up with Go Direct the manifesto. It was one of these things that you toil over for weeks, maybe months, and then end up writing it in like two hours. The key idea in the manifesto is that traditional PR as we know it is dead. Maybe you can see the body, but it doesn't have a pulse. And it's a good thing, because traditional PR meant that you would have to filter your message through somebody else's prism. You would have to be dependent on somebody else to have the goodwill and the alignment and the means to faithfully portray to the world what you want to say. That actually very rarely happens. If you're doing something pretty uncontroversial and well understood, that can go fairly smoothly, because it won't be distorted that much, but if you're doing something Unconventional. Far outside the mainstream. Unpopular. Then you do not want this to be filtered through somebody else's prism. And the second thing is, I believe that there's a lot of virtue in being self-reliant for its own sake. For its own sake. Even if nothing is on the line. We are sovereign human beings. We should be in control of our destinies. We should be in control of our narrative destinies and the stories that help us achieve the destiny. This is narrative sovereignty. You never just want to be depending on someone else, and …

AI assessment note: “The key idea in the manifesto is that traditional PR as we know it is dead.”

Q like different levels to this. It's like a fundamental difference between like reading about something and then observing it. So I want to tie this together, like I was expecting you on your competitive drive. When you jumped into the agent business in the very beginning, Was it obvious that you were just gonna be able to outwork everybody else around you? Was it obvious to you at that time?

A It was obvious to me, but no one else. Everyone said we were gonna fail. One of my closest friends I worked with at William Morris, I said something to me I have not forgotten since he said it to me in 1974. It's something I will never forget, and it, it, it turned out to be such a fantastic stimulant for me to this day. We were sitting together. We were having a coffee. He said to me, so good that you're starting this business. In a year, you'll be looking for a job. I said, really? And what makes you think that? He said, oh, you're gonna fail. I said, really? He said, yes. You can't make it. There's almost 200 agencies out there. You're not gonna compete with the big ones. Second incident, within six months of that, a leading TV literary agency run by the best friend of one of our guys. We met with the thought of merging, which would give us what we needed, which were writers, because they're the font of packaging, right? In the meeting, and I told you this story before, so I want to say it fast and not repeat it in detail. The four partners of that agency said, you know, we'll never represent any movie stars. And I looked at them, I said, why do you say that? He said, you'll never get them. I said, we're gonna have all of them. And he said, you're just so arrogant. I said, I'm not arrogant at all, actually. I just know I'm gonna outwork every one of them. Every time we signe…

AI assessment note: “It was obvious to me, but no one else.”

Q But then you said something last night where you're just like, Well, what if they have, like, feedback for you? Like, what was your thoughts to that?

A I love feedback if it's well grounded in solid observations that can give me new insights. But a lot of feedback you get on the internet does not fall into that category. It's just like, you looked at this for five minutes, I spent 4000 hours, and you have some knee-jerk reaction, and you want to tell me how to do it? You want to tell me what I should do and what I shouldn't do? Well, you can go fuck yourself, right? And I actually get that indignation, um, just stemming up. I've been working on it, but, um, just this sense of like, this is not a reciprocal exchange. I gave you something of tremendous value. Now you can choose to ignore it or say it's not right for you. That's completely fair, right? Like that's a good exchange. Like, okay, thanks for the gift, but no thanks. But if you take my gift of 4000 hours and you go like, well, I'll give you, um, five minutes, and then I'll just dump shit on you. What? You didn't pay me anything. Like, that's a privilege you have to pay for. If you want to tell me ill-considered, uh, feedback on anything I make, you gotta pay me. And you can do that with Basecamp, and you can tell me.

AI assessment note: “I love feedback if it's well grounded in solid observations that can give me new”

Q But then you said something last night where you're just like, Well, what if they have, like, feedback for you? Like, what was your thoughts to that?

A I love feedback if it's well grounded in solid observations that can give me new insights. But a lot of feedback you get on the internet does not fall into that category. It's just like, you looked at this for five minutes, I spent 4000 hours, and you have some knee-jerk reaction, and you want to tell me how to do it? You want to tell me what I should do and what I shouldn't do? Well, you can go fuck yourself, right? And I actually get that indignation, um, just stemming up. I've been working on it, but, um, just this sense of like, this is not a reciprocal exchange. I gave you something of tremendous value. Now you can choose to ignore it or say it's not right for you. That's completely fair, right? Like that's a good exchange. Like, okay, thanks for the gift, but no thanks. But if you take my gift of 4000 hours and you go like, well, I'll give you, um, five minutes, and then I'll just dump shit on you. What? You didn't pay me anything. Like, that's a privilege you have to pay for. If you want to tell me ill-considered, uh, feedback on anything I make, you gotta pay me. And you can do that with Basecamp, and you can tell me.

AI assessment note: “I love feedback if it's well grounded in solid observations that can give me new”

Q for a long period of time, because like anybody can succeed for a year, for five years. It's like you've been doing for 15 years. You're at the top of your game. Your, your, your, your, I think your future success is going to be much greater than what's behind you. But you were even saying it's like, that's even more true in the restaurant business. Can you explain why?

A Yeah, because I mean, listen, the restaurant business, especially in today's day and age is, you know, it's, it's a trendy business, right? And everyone wants to try something that's new, right? I mean, and everyone's excited to go to an opening. Everyone's excited to go to a place for the first time to say that they went here. But the big question is, after they've done that, after they've checked that off their list, after they've taken their Instagram photo to prove they went to this place and whatever else, which is, you know, we could talk as a whole other topic, but do they still want to come back, spend money with you, right? And feel good about the money that they spent when they left, right? Because at the end of the day, that's what we're, we're in the business of providing people With an incredible evening, right? We're, we're here to entertain you. We're here to delight you. We're here to feed you. And we're here for you really to walk out with a smile on your face, feeling like, when's the next time I can come back? When's the next time I can get a reservation? I always say the perfect thing is someone that comes to the desk and makes a reservation on the way out for the next time they're going to come. That's one of the many factors that makes this business so hard, especially in New York. There are so many restaurants. There's so many seemingly great restaurants …

AI assessment note: “the restaurant business, especially in today's day and age is, you know, it's, it's a trendy business”

Q Who's pitching you and what are they pitching you?

A Everyone you could imagine under the sun, generally people that are building new cities, new developments, new neighborhoods, whatever it might be, new stadiums, you know, whatever it might be, um, where food and beverage plays an integral role and hospitality plays an integral role, and so that, that's all around the world, right? So globally, so, you know, we're constantly looking at different opportunities, And geographies that make sense to us. You know, I always say it's, for me, it's not such a, you know, hard equation, right? If you, if you tell me, is this an interesting city to open a restaurant in? All I say is, you know, find me two or three restaurants doing twenty million dollars or more. And then it's an interesting city. There's not that many cities in the world that have restaurants doing 20 plus million dollars a year, fine dining restaurants. And when you can find those places, you, you already know that you can come in there with a great expensive concept that if you do your job well, you can blow away the competition in those markets because the business is there.

AI assessment note: “generally people that are building new cities, new developments, new neighborhoods”

Q just repeat, you want to make insanely great products? Come with me. If you don't, then you shouldn't be working here. I just talked to Toby Luque from Shopify. The way I would think about the mission of his company and the way it's spread throughout, uh, internally, it's like we're building infrastructure for entrepreneurs. So how do you describe it as a CEO to your team inside of Ramp?

A I think our mission is endless, right? It is to help Every business owner get more out of every dollar an hour. That's what we're trying to do. The credit cards that we offer, the expense management, the bill payments, the accounting automation, these are just products. At the end of the day, what we were trying to do is really measure for all the dollars that are going to pass through your organization. How do we make sure that if you leave your, your organization at the end of the month, that you get more for every dollar and every hour is what we are trying to do. And I think what made Ramp start to scale very early on in a very crowded industry that people thought we weren't, we were like 175 years late to was this was, I think, really inverting a lot of the way that many of our competitors had acted, right? If you kind of look at the credit card industry, um, which is where we started, uh, even just seven years ago, everyone had agreed that the best way to earn business was, uh, through these points and rewards Go spend more money. You can earn points and multipliers will have your back. Um, and it was, I think exactly the opposite of what most business owners and CFOs that I knew wanted. They actually wanted more, uh, in their bank account and they wanted their employees spending less time on this stuff. And so simply by inverting, uh, that primary assumption and saying, …

AI assessment note: “It is to help Every business owner get more out of every dollar an hour.”

Q to work at RAMP and then start companies, right? So you have that like very like entrepreneurial, like lifeblood that's running throughout the company. Curious, do you think about talent differently now Because so much of your work can be, or is supplemented in some cases replaced by like AI agents. Like how are you thinking about hiring now, given the capabilities of AI compared to say two years ago?

A There's a few things that I think are evolving with, with AI. One, uh, just the power laws are getting more extremes in the same way. Um, uh, companies are getting larger, the speed To which companies are getting built is, is accelerating. I think the returns to talent is higher than ever. The most effective person in the world is no longer, uh, 10 times as effective or a hundred times effective. It could be a thousand times as effective in a particular area. So I think finding people, uh, who are very spiky in areas, I think is absolutely right. The thing which is, I think has bent my mind most over the past year is if you're really internalizing what LLMs are doing, I think we used to be in a world where skills were very scarce and very hard to find, and I think we're starting to get to a place where a very determined generalist can start to do much more than they used to be able to do, right? To explain a bit more of what, what I mean, um, large language models have read more lines of code than any engineer alive, right? They've read more medical case texts than any doctor alive. They've read more company filings and chart of accounts than any accountant who's ever lived or Probably ever will live. And in some sense, if I can just ask a good question, I'm the best doctor I've ever been in my life, and I'm not like a doctor at all, right? If I'm just stubborn, I can keep goin…

AI assessment note: “a very determined generalist can start to do much more than they used to”

Q Wait, what, what does that mean? The barriers between organizations?

A I'll put it this way. When Rampos call it, ah, 10 people, and you ask people, um, you know, where do you work? Uh, or what do you do here? They'd say, I work at RAMP and I'm an engineer. Uh, you get to 50, you might hear something simpler. You know, I work at RAMP and I'm in the sales team. You start seeing these different divisions grow. Once you start getting to like 200 or 500 people, you start hearing this inversion in identity. People say, you know, I'm a salesperson at RAMP. I'm a designer at RAMP. They start to identify by their craft and what they do and what they are asked to do. They interact with mostly people who are in their craft. Uh, salespeople talk with other salespeople, and you, you see these mega corporations. It's kind of like the Tower of Babel where, you know, this, no one in sales knows an actual engineer. The engineers don't know any actual designers. Everything's hard because information has to go up top and down on through, uh, and these organizations become very Byzantine. Uh, and I think now in a world where, you know, someone who develops the product can use technologies that helps them sell more effectively, that helps them track That helps them track outreach, that helps them write with a better pitch on the first go, and these are real tools that you can build for people today, I think you start seeing fewer types of specialties within organizat…

AI assessment note: “They start to identify by their craft and what they do”

Q I'm glad you mentioned the thing about questions, because I have a series of quotes that I've saved from you, and I love your tweets, by the way. So you said, success in the information age was about being able to answer questions. Success in the AI age will be about being able to ask the right questions. Can you expand on that?

A Yeah, and, and this also goes towards a shift of going, people are moving from being ICs or individual contributors to all being leaders, but leaders of AI. And what really good leaders do is they don't do the work themselves. They don't have the answer themselves. They're just asking the question. They're just, you know, considering everything they're hearing, and then they ask the question that no one else asked, or everyone is thinking, but is afraid to ask. So with AI, because it can go off and solve all of these problems for you, it can do the research report. Like the question that you ask determines what you get, and that determines the output. From information age, like we were all trained To just answer questions. Like, that's what school's about. Remember this. Remember that. Remember this. With AI, you just ask AI. It knows. You just have to think of the right question. It's a fundamental shift.

AI assessment note: “the question that you ask determines what you get, and that determines the output.”

Q Why is telling people what to do unnatural to you?

A I work through questions. I like to, I like to set high level direction. So for me, my leadership style was come up with a goal that was so, it took me a while to get there, but come up with a goal that was so simple that I could put it on a challenge coin and give it to everyone. So everyone at Grok had a challenge coin that said, twenty-five million tokens per second and had a little graph of it going up, and everyone knew that was the thing to do. And it's sort of like when you ask, um, an agent, an AI agent, what, you know, to do something, the fewer constraints you give it, The more freedom it has to solve your problem. And so I liked to work with incredibly creative people who would come back with surprises. Say that part again. Say that part again. This is important. The fewer constraints? The fewer constraints that you give someone, the more freedom they have to solve the problem, and the more freedom they have to surprise you with the solution. So if you want to run a highly, highly creative and innovative organization, then what you really want to do is minimize the number of constraints, but you also have to give them the things that matter. If you Aren't able to very crisply distill what you're trying to accomplish, then either you're going to over constrain or under constrain the people. When you're trying to do something as a founder, you are inherently trying to …

AI assessment note: “The fewer constraints that you give someone, the more freedom they have to solve”

Q I'm going to go on a tangent just for a second, then we'll come back to this. I talked to a lot of founders about this recently, but they're, The whole point is, like, when agents are making payments, the amount of payments that are being going to be made is going to skyrocket. Do you have any, like, insight into that?

A Yeah, I think it's still early, and one of the limiters is payments aren't really built for this yet, but if you can make micropayments, the number of payments is going to skyrocket. Like, I did a little hobby project, and for the hobby project, I needed a couple of different phone numbers so I could have a bunch of different agents on with me on, um, Signal and WhatsApp. I had to go to Twilio, and I had to, like, I had to, like, prove I was a human in order to get the number and all this stuff, and it was just this big pain to get it done. If, on the other hand, I could have just done, if I had allocated a budget to the AI, and it could have just, you know, used that budget, they would have spent it, and I would never know, and it would just been within the budget.

AI assessment note: “if you can make micropayments, the number of payments is going to skyrocket.”