The Exchanges

Q I love that. After Yale, you went into the consulting business. What did you love about that?

A It was a sink or swim place. I went to the Boston Consulting Group in Chicago. We had just opened up, and I'd never been in consulting before, and so this was a new experience. First of all, the caliber of people is just fantastic. Each one is pushing the other. You're operating at the highest level of a corporation, and in BCG, you worked on two different assignments at the same time, so you had to understand two industries, the value drivers, Two non-competitive industries. What are the value drivers? How do you think about adding value to the client in the assignment you're working on? And so it challenged me in profound ways, first to learn industries, learn the economics of the industry, the value drivers, think beyond the industry to see what insights you can bring to the industry, and learn about dealing with leaders at very high positions, which I'd never done before. In the United States, I mean, I looked at these leaders as, my God, so and so is the CEO, and now I'm sitting in the same room with the CEO. How do I behave? How do I, uh, you know, articulate my point of view without sounding like I'm a know-it-all? There's so much I had to learn. In my six and a half years at BCG, I think I grew 10 or 15 years. It was tough, it was a tough learning curve, but man, I would never trade that experience for anything in the world.

AI assessment note: “First of all, the caliber of people is just fantastic. Each one is pushing”

Q You had a conversation once with Steve Jobs where he told you not to be too nice. How did that candid conversation influence how you ran PepsiCo?

A I think he taught me a valuable, first of all, it gave me time, which was just so generous of him. I think the biggest lesson I took away was, he said, if you care about something, and you should care about a few things, show your passion, ok? For example, the guy who ran TVWHI Day, the ad agency, which was doing work for Apple, would always say, when you go to see Steve Jobs, the campaign, if he didn't like it, He'd throw the stuff all over the room and say, I want to see a new campaign by the morning, and you scream utter profanities, do whatever. But he wasn't doing it to destroy the place. He was doing it because he cared so much about Apple that he wanted the absolute brilliant right campaign for Apple. And his way of showing his frustration at himself and at the group was to Act the way he did, ok? Now, as a woman, I'm not the kind that utters four-letter words and throws things around, but all that Steve Jobs was telling me was, people have got to know what you're really passionate about. When you're really passionate about something, don't sit here going, God, I don't want to send them back three times. It's ok to send them back three times. Get it to a point where you're really comfortable this is going to be good for the company. Show your passion. Push people back. So I got to a point when design as a discipline was set up in PepsiCo. Um, when they'd bring me somethi…

AI assessment note: “So I got to a point when design as a discipline was set up in PepsiCo.”

Q When you look at an aisle of Frito-Lay or PepsiCo products, what, what draws your attention? What do you notice?

A Well, I look for new products today. Have they been slaughtered? Are the existing workhorses like Alley's or Doritos got enough facings so the consumer knows that they should grab it? Is each package neatly crisped and put on the shelf? Because that's the media you own, right? When your consumer sees the product on a shelf, that's the media talking to you. So to me, the media you own is very important to the consumer because the media you rent is your TV and your advertising. Many people don't see it. But they see that billboard effect on the aisle. So how does your package show up on the shelves? Is the right assortment there? Can they shop it easily? For example, is there a corporate block called Frito-Lay, or do you have potato chips, corn chips? How would you prefer having it? Are there dips next to the chips? If something is on deal, is it on an end aisle? There's so many things we look at. The Frito-Lay guys do a great job.

AI assessment note: “Well, I look for new products today. Have they been slaughtered?”

Q You do a lot of work with charter schools. I want to come a little bit higher level in a second, but how do you see AI playing out in the classroom and learning?

A Hugely. I mean, I think AI for teaching kids is a awesome application. Um, you know, generally you're in a classroom with 20 or 30 kids, and it's very hard for the teacher. The kids are all at different levels. Um, and it's a very industrialized model. All third graders are going to learn the same thing today. And that really, uh, again, that's for the convenience of the operator of the school and for being able to handle mass education. And AI offers the potential of every kid gets their own tutor and goes at their own pace. So, um, there's a lot of efforts going on now, um, on the board of Khan Academy, a nonprofit that's really pioneering a lot of stuff with Khan Mego, um, um, helping other, Uh, for profits like L O E L L O that does a reading app. That's amazing. So if you have a five to seven year old, um, it really helps the kid develop a confident reader. The, the AI is very patient and will listen to the kid and then correct them and, and then help them get stronger and stronger in their reading. So, you know, and we're scratching the surface. So in the next 10 years, you'll be able to have a complete K-twelve and probably university education. Uh, with AI on a phone or tablet that, um, will be really changed learning. So think of it as, as AI is getting more impactful in society, the standards of what people need to know and can know is much higher. So we've really got…

AI assessment note: “AI offers the potential of every kid gets their own tutor and goes at their own pace.”

Q you think goes into the decisions to transfer? I'm thinking as a parent, what would cause me to transfer charter schools? Uh, maybe it offers the hope of better education and better teachers, and maybe it also deviates to the negative. Um, not all of them are gonna be successful, so there's a risk involved in that. How do you, how do you think about that from the parent's perspective?

A Yeah, I mean, it's a little like, you, you know, for parents who send their kids to university, they have the same thing. Some universities, Seem good, but aren't really, or it can be a good university and you have a bad experience. So there's no perfect outcome, uh, in that. And then in general for charter schools, um, in, uh, wealthy areas where the schools are pretty good, the existing government schools, um, there's not much incentive to change. Um, and the basically, uh, so for example, in Palo Alto, California, there's no charter schools. But in East Palo Alto, which is quite poor, right next door, there's a bunch of charter schools, because the parents are desperate for change in options. So the charters have really focused on the lowest income kids, because they, um, you know, don't have great government schools, and they're willing to take a chance and try the new charter school. And some of them have, of those charter schools have worked out fantastically.

AI assessment note: “in East Palo Alto, which is quite poor... parents are desperate for change in options”

Q Was there a moment at Pure Software where you wanted to give up, or you found yourself sort of like feeling sorry for yourself, or what was that like, and how did you get out of it?

A Yeah, I don't think I felt, um, sorry for myself, uh, but I did feel like I was hurting the company back to these, uh, sales turnovers, and back to caring more about the company than myself. So I wanted the company to succeed more than I cared about myself, and so I, I, twice I went to the board of, and said, look, you should hire, uh, you know, a CEO who's got a shorthand in sales, and I'll do product, and it's fine, and, you know, um, And both times, uh, they rejected that idea, um, and it's like, yeah, you are making mistakes. They were clear about that, but overall, we'd rather, um, be investors in this company that you're doing than make that change. Um, and for me, it was a little bit, uh, it's like confession, um, you know, because I felt so guilty about those sales mistakes, um, that then, you know, offering my, uh, role, um, and sacrifice, um, It was sort of cleanse that wound, and then I'd get up and live to fight another day.

AI assessment note: “twice I went to the board of, and said, look, you should hire”

Q And have you brought the almost, uh, meritocratic focus of Netflix into, like, the culture that you were famous for there into Powder Mountain?

A Yeah, substantially. So, uh, Powder, I would say we've done, in my opinion, a slightly better job of it from the lessons that we've learned. So, in Netflix, um, there was the meritocracy and, uh, and outsiders thought it was cutthroat, thought it was Hunger Games. Um, but inside it really wasn't. People looked out for each other, helped each other quite a lot, but in the words we used to describe it, um, we're not warm and loving enough, and so it came across as, uh, brutal from the outside, ok? And so we were never really able to shake that, uh, kind of perception. And in powder we started with big hearted champions who pick up the trash. And so big hearted, of course, loving and generous as the lead word in our kind of employee motivation. Champions like, no, we really do care about performance. That's that meritocracy aspect. Um, very driven, keeper test, all the things that we had at Netflix. And then who pick up the trash is a symbol of self responsibility and everything is my job. Um, and people really do pick up the trash in both a metaphor and, and, and actual ways.

AI assessment note: “Yeah, substantially. So, uh, Powder, I would say we've done”

Q A large part of the CEO's job seems to be rooting out bureaucracy. How did you go about preventing that from creeping in?

A Well, once you have, ah, let's take, ah, um, expense policies, ok? So, you know, most companies have policies, you can spend 250 dollars in certain cities, and, you know, more in Tokyo, and, you know, less in Omaha, and they're trying to save money, right? And they're, like, trying to be careful with expenses. And then you've gotta have a whole bureaucracy to administer that, to make sure people comply with that, to educate them, and whatever. And we got rid of all of that, and we just had to travel as you would on your own nickel. Um, and you know, I'm sure there's, you know, occasionally some expense that gets done that shouldn't be, but compared to the cost of enforcement, it's tiny. So, you know, again, that's more of our freedom and responsibility approach.

AI assessment note: “we got rid of all of that, and we just had to travel”

Q I want to come back to culture for a sec. There's one question I didn't ask. What was the keeper test and how did it apply?

A Um, so the keeper test is a Netflix shorthand, um, for, uh, asking yourself if one of your employees were quitting, how hard would you work to keep them, um, to stay? Would you try to change their mind? And if you wouldn't, then you should proactively give them a generous severance package and try to recruit someone who you would feel that you would really try to keep them. And so the typical employee test that people use is, did they screw up enough that they deserve firing? So they have to really fail to deserve firing. And we want to change that presumption to be, no, it's the people that you would fight to keep. Those are the ones that you stay in. If someone is not in that, um, then you should give them a package and move on. And of course, you know, the more nuanced one is to have a conversation with them. Like, I wouldn't fight that hard, and, you know, let's try to change that, and, you know, try to, uh, not surprise them and be honest with them, but it's shifting at the standard industrial model is like, you nearly have to commit a crime to get fired, ok? As opposed to the athletic team case, which is, I think I can upgrade, I wouldn't fight to keep you, um, because I want to-

AI assessment note: “the keeper test is a Netflix shorthand, um, for, uh, asking yourself if one of your employees were quitting”

Q Are there any other people that you brought to speak from sort of different sports that sort of had, uh, a different message that resonated with you or the team and just stands out in your mind?

A Oh, yeah, we had a lot of them. Yeah, we had a lot of them, and, and it was great because, you know, just the guys, you know, they hear a lot of football stories, but it's good to hear all the ones, uh, one of the ones I thought was particularly entertaining, a couple of them, one was, uh, Paul Asiante. They won, like, 14 national championships in a row. They won, like, a hundred and sixty-some games in a row, matches in a row. I mean, and at the Patriots, we were favored in almost every game, you know, Not every game, but most every game for quite a while, and so, you know, I brought Coach Asiante, and I said, you know, here's a guy that's won, like, 13 straight national championships. They won 100 and sixty-some matches in a row. I mean, he talked about being favored now, like, they're favored, and, and, and, like, let's listen to what that's really like, and he was great. He talked about, it, it doesn't matter whether you are or aren't, or how many you have or haven't won, every day is an opportunity, and You make the most out of each day, and you just get better each day, and you don't worry about what you've done in the past. You just, you look at today's opportunity and make the most out of it. It was great. So one of our coach, one of our players sticks his hand up and says, hey coach, I have a question. What's squash? I thought it was a vegetable. Jimmy Johnson, you kno…

AI assessment note: “one was, uh, Paul Asiante. They won, like, 14 national championships in a row.”

Q You tell your players to focus on the, the drawer to help them focus on what matters. What is the drawer, and how does it help?

A Drawer is a, um, was a saying that, that we use to, uh, especially at the end of the year, like as you get into the holidays, Thanksgiving, Christmas, New Year's, and then the playoffs, um, you know, the end of the season's in sight, and wherever you are, you know, you've put in, you know, all the work back into the spring, training camp, you know, 10, 12, 14 regular season games, whatever it is, and now you're really coming, you know, coming down the home stretch, and, and the drawer was just a way of saying, um, unless it's a, a family or personal thing that's really important, Um, put it in a drawer dealing with it after the season. You know, you, do you need to go to sign these cards at the mall? Do you need to, um, you know, go look for a new electronic, whatever it is. Can you put those things aside and just finish the season, spend that time on preparation for our opponents, spend that time on, um, you know, rest, recovery, training, so that you're your absolute best when we really need you here in these last few stretch weeks. And, um, And as you know, you know, Shane, when you get to a certain point, every, it's a one game season. You know, if you lose, you're done. And if you win, you get to play another week. So when you get into that scenario, put it off until next week. And if you're in it next week, put it off until the week after that. Um, but this is what we've …

AI assessment note: “put it in a drawer dealing with it after the season”

Q Do you believe you can motivate people, and if so, how?

A Oh, I think you can definitely motivate them, and, and it depends on the person. I think there are different types of motivation. Um, you know, we could, Uh, there were times where I think you could really, you know, motivate a player by just, you know, flat out challenging them, um, based on something that, you know, somebody else said, or intimated, or something that might have happened in the past. Uh, I think you can, you know, motivate people by, um, uh, you know, especially, you know, sometimes maybe a more selfish type of player, you could motivate by, you know, making him see, um, Uh, what the reward is for himself as opposed to the team. Um, an example I like to use, Shane, is if you have a receiver and you want the receiver to come in and block on a running play and come in and block a safety, which is a hard job. Um, you know, some receivers don't really want to do that. They're really not too excited about that. They want to catch passes. Um, but if you say, well, look, if you come in and block this guy, um, and we need you to block him as a team, we need you to block him. If you come in and block this guy, um, Um, then the next time we come in, and you'll do the same thing, but fake it, and we'll be able to throw you a pass when the defense comes up to solve the play. Well, the player's not coming in to block him because you asked him to block him, and we really ne…

AI assessment note: “Oh, I think you can definitely motivate them, and, and it depends on the person.”

Q When you invested in Andrel, what was your, you mentioned you had criteria and they checked it all. What was your mental, Oh, if I'm going to invest in a tech forward defense company, it needs to have X, Y, Z. What was that criteria?

A Yeah, so, um, Android all happened in a unique moment in time where Google had just shut down Maven, and defense had suddenly become very unpopular in Silicon Valley, and people were making arguments that ethically you shouldn't support the defense industry, and all this stuff that I thought was pretty ridiculous, because if you cared about Western values and you wanted to defend them, of course you needed defense tech. So, I started looking around to see who's building interesting things in defense, because if the big companies won't do it, then what a great opportunity for a startup, right? It seemed like a good, a good moment in time. And it felt like there was four or five things that you needed in order to build a next-gen defense tech company because there was a bunch of defense tech companies that just never worked or hit small scale. Number one is you needed a why now moment for the technology. What, what is shifting in technology that the incumbents can't just tack it on, right? Because the way the defense industry works is there's a handful of players called primes who sell directly to the DoD. And they subcontract out everything else, right? And if you're not a prime and you don't have a direct relationship, then you end up in a bad spot in terms of being able to really, well, win big programs and, you know, uh, survive as a company or succeed. Uh, so number one is w…

AI assessment note: “Number one is you needed a why now moment for the technology.”

Q Let's come back to outliers. So product market fit outliers. How do you identify an outlier team?

A Yeah, you know, uh, I think it really depends on the discipline or the area. For tech, I think it's very different than if you're looking in other areas. Um, for an early tech team, I almost used, like, this Apple framework of Jobs, Wozniak, and Cook, right? Steve Jobs and Steve Wozniak started Apple together. Um, Steve Jobs was known as somebody who really was great at setting the vision and direction, but also was just an amazing salesperson. And selling means selling employees to join you. It means raising money. It means selling your first customers. It's negotiating your supply chain. Those are all aspects of sales in some sense or negotiation. And so you need at least one person who can do that, unless you're just doing a consumer product that you threw out there, right? And it just grows, and then people join you because it's growing. Um, then you need somebody who can build stuff and build it in a uniquely good way, and that was Wozniak, right? The way that he was able to hack things together, drop chips from the original design of Apple devices, et cetera, was just considered legendary. And then as the thing starts working, you eventually need somebody like Tim Cook who can help scale the company, and so you could argue that was Sheryl Sandberg in the early days of Facebook who eventually came on as a hire and helped scale it, and Zuck was really the, um, sort of mixtu…

AI assessment note: “I almost used, like, this Apple framework of Jobs, Wozniak, and Cook”

Q You're around a lot of outlier CEOs, not only in the context of you know them, but you hang out with them. You spend a lot of time with them. What are sort of the common patterns that you've seen amongst them? Are there common patterns or is everybody completely unique? But I imagine that at the core, there's commonality.

A Yeah. You know, this is something I've been kind of riffing on lately, and I don't know if it's quite correct, but I think there's like two or three common patterns. I think pattern one is There are a set of people who are, and by the way, all these people are like incredibly smart, you know, incredibly insightful, uh, et cetera, right? Um, so they, they all, uh, have a few common things, um, but I do think there's two or three archetypes. I think one of them is just the people who are hyper-focused. They don't get involved with other businesses. They don't do a lot of angel investments. They don't, you know, do press junkets that don't make sense. They just stay on one track. And a version of that was, um, Travis from Uber. I knew him a little bit before Uber and I, you know, run into him once or twice since then, but like, um, he's, he was always incredibly focused. He used to be an amazing angel investor. I think he made great investments, but he stopped doing it with Uber and he just focused on Uber. Um, and as far as I know, he never sold secondary until he left the company, right? He was just hyper-focused on making it as successful as possible. So that's one class of ArchType. There's a second class, which I'd view as people who are, um, equally smart and driven, but a bit more polymathic may be the wrong word, but they just have very broad interests and they express tho…

AI assessment note: “I think there's like two or three common patterns. I think pattern one is”

Q Maybe spend a few minutes on talent and people. Brookfield is known to take really big bets with what from the outside looking in would be young people. What do you see in people that gives you the confidence to take bets in them? How do you build a culture where, ah, meritocracy rises and people can take big bets?

A So we've always had the view that, um, well, firstly, we're an extreme meritocracy. Uh, this is a partnership. It's a partnership of individuals. Uh, when, when we leave the partnership, our shares that, uh, if you're an owner or controller of the partnership, they go away, they go on to somebody else. So, um, nobody's family will ever, uh, will ever be part of this partnership. It's a meritocracy. Second, we've always had the view that, um, a cross between, uh, uh, wise, older people and smart, aggressive, young people both, um, give you the gravitas to deal with situations which you need a little history, but also allow you to be, um, Allow you to know more about what's going on today. I'm positive our thirty-year-olds today in the business know more about technology than I do because they've grown up with it differently. Um, it allows us to be faster, better, quicker to every new trend in the world and what's going on out there, and it also, I'd say, creates a culture Where people want to be here and get ahead, because they know they can. And, um, and so I, look, we, uh, brought to the partners and to our senior people, uh, three years ago, we brought Connor Teske forward as the next person that will be the CEO of the asset management business. Um, that was internally Uh, vetted. It was an externally vetted, and today we're in the process of him, uh, continuing to meet clien…

AI assessment note: “we brought Connor Teske forward as the next person that will be the CEO”

Q Are the pension risks defined benefit or defined contribution?

A These are, uh, pension risk transfer means, which happens in the US, Canada, and the UK largely, those three places in the world. Um, what it means is that if there's a corporation that has a defined benefit plan that wants to get it off their balance sheet. So they, they have a ten billion dollar plan. There's ten billion assets, ten billion liabilities. They can commute that plan to us and we can, our insurance company can take it. So they're no longer on hook for the plan. They're no longer, uh, at risk on the assets or the liabilities. We've assumed that risk. We will now pay their pensioners, and they gave us the assets to earn over time, hopefully the, the amount of money to pay all their pensioners. And if not, we're on the hook for it, not them.

AI assessment note: “corporation that has a defined benefit plan that wants to get it off their balance sheet”

Q So I've been guilty of this in terms of the spark. You know, you walk away from a first date, and you're like, yeah, they're a nice person, but maybe they're boring, or you didn't feel that instant romantic connection, and what do you think about the spark? I mean, we all look for the spark.

A Yeah, so the spark is very exciting. Who doesn't want to have that feeling of fireworks and instant chemistry with someone, but through the work I've done, I've actually come to see the spark as a bit of my nemesis, because I have coaching clients who say to me, Logan, I went out with this guy. He was great. We had a good time. Oh, I'm not going to see him again. Like, what are you talking about? And they say, I just didn't feel the spark. And so, In our culture, people have come to expect that if you don't have that instant feeling, then it must not be your person, and instead, I teach my coaching clients about the three myths of the spark. So the first myth is that if you don't have the spark, then it can't grow, and that's absolutely not true. So we know from research that only 11% of people feel love at first sight, and that means many people are getting to know someone over time. Maybe they live in the same apartment building. They Work in the same place, and that attraction and appreciation grows over time, so the spark can definitely grow. The second myth is that if you feel the spark, it's definitely a good thing, and actually, sometimes certain people give us the spark because we actually don't know how they feel about us, so sort of that hot, cold feeling makes us wonder, does he like me? Does he not like me? And through that, we end up feeling what we think of as but…

AI assessment note: “I've actually come to see the spark as a bit of my nemesis”

Q Uh, that reinforces the best in us and gives us patience and tolerance for the worst in us. Uh, what are the things that people can do individually to put themselves in a better place? And, you know, you don't have to make that leap overnight, but what are the steps that we can take to get to a better place?

A Right. So people do tend to have one attachment style, and it's a mixture of genetics and how they were raised, but around 25% of people are able to shift their attachment over time. So if you are insecurely attached, there is hope. It's not just, oh, I need to find one of those securely attached people that's already in a relationship. So for people who are anxiously attached, It's really important to understand triggers for you. So a trigger for somebody who's anxiously attached might be, I text the person I'm seeing all day, but I just sent them a meme. They usually respond to that right away. They haven't responded in four hours. Okay, so a trigger was not hearing back from somebody. What usually happens in that moment is you sort of go down into the danger zone, and you start, you know, texting them a bunch of times, hey, what happened? Or you spiral in your head, They don't like me anymore. They met somebody else. When I said this thing two days ago, they thought it was super weird, and they're pulling back, and then they sort of do these behaviors to try to reconnect with the person, which can really turn the other person off, and so instead, Set yourself up for success by not getting to the danger zone in the first place. So when you feel like, oh, no, they didn't respond to my text, what are other things you could do? So you could text a friend and distract yourself wi…

AI assessment note: “text a friend and distract yourself with the conversation with them.”

Q That's awesome. Do you agree with the time boxing, uh, the ultimatum, I guess, as you called it, or sort of like these, these points where you, you artificially create this? One point for people who are not younger and maybe dating again is, do you meet the kids?

A Yeah, so, um, I think that the ultimatum, I mean, that term is even loaded at this point, because there's like this Netflix show about the ultimatum, and I think when people hear that, they probably have a negative assumption of somebody being like, if you don't propose by the end of the year, we're breaking up. Like, that doesn't sound collaborative to me, but I actually do think that decision points are very important in life and in relationships. So there's this great research about, you know, people eating cookies. So like, in one part of the experiment, people just eat cookies in a sleeve, and And they just eat the whole sleeve of cookies until it's over, and then they're like, damn, I just ate a lot of cookies. In another part of the experiment, in between every few cookies are these colored pieces of wax paper. And when you get to the piece of colored wax paper, you think like, do I want to keep going or not? And it creates a decision point that makes you consciously decide, do I go forward or not? And so I think that relationships do offer these decision points. Do we want to be exclusive? Do we want to move in together? Do we want to get married? Do we want to have kids? And each of those is an opportunity to check in with the other person. And so sometimes creating that by saying, hey, let's go away for a weekend and talk about our future, you're really shining a ligh…

AI assessment note: “I actually do think that decision points are very important in life and in relationships.”

Q I like that. That's a, that's a good way to do it. One of the things you brought up, uh, was having a phone call first. Is that like the recommended protocol?

A Yeah, so before the pandemic, I did not like the idea of video dates or phone calls before a first date. To me, it triggered this idea of like a tech job and a phone screen, like that 15 minute call with the Google recruiter to see if you're crazy or not, and I felt like it was going to create too much of a feeling of, okay, I saw who you were, I'm not interested in you, I'm out. But during the pandemic, that was the only way that people could really date for a while, and so there was this proliferation of video chats or phone dates, and I actually felt like they were a great technique for people to just see, can we hold a conversation? Are they who they say they are? It makes people feel more safe before meeting up for the first time. It helps people who are really busy, like, executives or single parents feel like, is this somebody who I'd Want to get a babysitter for in order to meet up with them, and so now I actually think that it's a really helpful technique for a lot of people.

AI assessment note: “now I actually think that it's a really helpful technique for a lot of people.”

Q I like that. I'd be remiss if I didn't ask about dating profiles. What are the tips that people, uh, the most common things that people get wrong?

A Yeah, so I've done a ton of research on this, and I can tell you some of the main tips. So, Your dating app profile is sort of like your billboard, and if you were buying a billboard, let's say, on the one-on-one in San Francisco, like, you would, of course, think a lot about what you're going to put on it, and I think people should give the same amount of attention to their Hinge profile. So, for example, you are telling a story about who you are. So let's say that you have a side of yourself that loves anime, and there's a side of yourself that's passionate about baseball. If all of your pictures are from Comic-Con, I'm not going to see that. So really, I like to teach people this concept of your three big things. What are three big things about yourself that you want to express in your profile? And then make sure that through your prompts and through your photos, you're getting those things across. Another thing is having a mixture of humor and vulnerability. You don't want to be all jokes, and you don't want to be all super serious. You want to show people different sides of yourself. You also don't want to fall into these dating app cliches. So There's this one on Hinge, like, I'm overly competitive about everything, and people have seen that all the time, so like, at best, they sort of just ignore it, and at worst, they're like, ah, cliche, like, I'm not interested in tha…

AI assessment note: “You also don't want to fall into these dating app cliches.”

Q After you had the first plant up and running, how did you decide what next? Walk me through sort of like, how do you go from that? How do you determine what the next step is?

A Well, I think that people like to look back and, you know, kind of idolize and act as if there's, you know, there was a plan, it was a plan all along, when oftentimes it's, uh, you know, evolution of, of skills and an evolution of your thinking. And, you know, honestly, you know, for the first eight years, we only operated in Talladega, Alabama, where I'm originally from. And I knew it was important for us to Diversify geographically, but I was too scared to do it because it felt like such a big risk and such a big undertaking, and I didn't have the guts, quite frankly, to go in and to do it, and then COVID happened, and I worked with the team to figure out how we were going to work through it, and we were getting so slammed, and about two to three weeks into that process of working with it, Amazon stopped Third-party sellers from sending products into their warehouses, and at the exact same time, FedEx made the decision to cap the number of trailers that we were able to ship from our Talladega location because they were getting overloaded, basically saying, you know, we can't take any more business, and I was faced with the decision, um, do I either expand my geographic footprint, and I made the deal with FedEx to allow me Additional capacity if I was, would expand it out and not overload just their southeast network. Um, or do I just raise my prices like a lot of our competit…

AI assessment note: “I made the decision to open our Ogden Utah plant in May of 2020”

Q Is that what you mean when you're in a different business than three M or is there another nuance to that when it comes to air filters?

A Yeah. So, you know, three M, you know, best I can tell. I mean, they can, they can refute it if they want, but like, but they mostly sell through, um, retail. So like places like Walmart, Costco and whatnot. And like, that is their major distribution channel. And, you know, until this year we did literally zero retail. Um, so they did that and they sell, sell online, but that's basically, uh, The extent, and when they sell online, they're basically doing it through Amazon and Walmart and, and, you know, other retailers, which means they're effectively trucking in product to a distribution center. Then that distribution is taking it off the truck on taking it out of the case, case, um, packed boxes likely, then moving it around the country to their distribution network, then putting it back on the shelf, and then picking it again and putting it in another box and sending it to an end user. All of those are steps that we do not have in our supply chain, um, which means that the cost structure, um, for us versus, you know, them through that network is, is very different. Um, and, you know, my opinion, and in my opinion that a lot of these big companies actually subsidize companies like three M, um, um, maybe unknowingly, um, to compete on price on, on, um, online on some of these products because The economics of shipping them and putting them through their distribution networks j…

AI assessment note: “All of those are steps that we do not have in our supply chain”

Q Is there an ideal growth rate, do you think? Like, can you grow too fast?

A The, the answer depends. I, I, I think the easy, if you're growing so fast and the customer experience starts to degrade, you're hurting yourself. And so, yes, you can grow so fast that it's just a complete mess. You're losing customers because you're not servicing them correctly. And at Zappos, we were very mindful that whatever customer experience that we delivered, it was the best customer experience that we can deliver at that growth rate. And I think if you ask, uh, Tony Hsu at DoorDash or Brian Chesky at Airbnb, they would probably say the same thing. It's like, we want to grow as fast as possible, uh, With the constraint that we don't, we want to make sure that there's a great customer experience.

AI assessment note: “yes, you can grow so fast that it's just a complete mess.”

Q Well, I want to go back to something you said earlier about crucible moments. What are they, and how do you identify them?

A Crucible moments, um, is, is the term we use at step, at Sequoia for things that are basically very important type one decisions, and I've had to deal, as an operator before Sequoia, we didn't call them Crucible moments, but I've gone through a fair share of crucible moments. You know, link exchange, do we want to, do we want to sell the company to Microsoft? At, um, tell me networks, when we're burning sixty million dollars a quarter, how do we get through that, and how do we pivot the company from a consumer business that wasn't working into an enterprise business? These are decisions that change the trajectory of a company. Um, at Zappos, it was, what do we do, um, after nine-eleven, um, when sales went to zero, what do we do during the financial crisis when credit became very, very difficult, and we were borrowing, uh, sixty million dollars, and we had sixty million dollars that we did nothing wrong, but we needed to, but the banks didn't have the liquidity anymore, they were calling the loan. And how do you, how do you go through these things? At Airbnb, there have been a number of crucible moments as well, one of which started very early on that Brian Chesky talks about a lot, which was the PR crisis with, um, uh, a guest trashing a host, um, and that led to host guarantees, but there were many of those. There was a fight to win Europe, and a competitor called Windu that …

AI assessment note: “term we use at Sequoia for things that are basically very important type one decisions”

Q first order. Uh, I want to get into more of your experience, not only at Zappos, but, um, being on the board of some of the companies that everybody has heard of, um, today are being involved. But before we get there, I want to come back to the school for a second. Are there any other experiences that you had during school with teachers that might have impacted you?

A You know, earlier on in junior high school, I was, um, I was suspended from the computer lab because I built, this was very old, so they're a Radio Shack TRS-ADs, so we call them Trash-ADs today. Um, and there was the computer lab, you know, you had to run time in our computer lab to, to use the computer, and I built this game, and the central server, um, At the time was literally a floppy drive, where all of us saved our programs there, and one day, uh, a bunch of the students, uh, in the computer lab all found the game that I programmed and then started playing with it. The teacher and the principal just happened to walk in and saw that we're all playing this game, and, um, I was told that computer lab is valuable time, and you should be doing something much more productive than Then producing a game, so I, I was no longer allowed to work in the computer lab, and the computer lab teacher was Mrs. Pitosa, and she's, she also ran the math team, and she said, well, you, I'm sorry, the principal wants you out of the computer lab, but you should join the math team, and I joined the math team there, and, um, one of the things I was very good at was math, and she told me that if you want to be a leader and you want the team to win, It's not good enough for me to just solve the problems. I mean, figure out how to get the rest of the team to perform, and so I started teaching the rest…

AI assessment note: “the computer lab teacher was Mrs. Pitosa, and she's, she also ran the math team”

Q You and your husband do this thing, the team thing. Can you explain this to me and, and how it's helped your marriage?

A Yeah. Yeah, we've added on to it. So it's, so, um, I don't know if, you know, you have this, but you know when you keep sort of bickering with your spouse, like little things, and they kind of compile, and you look back on a fight, and you're like, why was that so dramatic? It was about, you know, a book left on the table. It was about a water stain somewhere left out. What a dumb fight. And so we were having some of those. And, uh, and so we have a coach that we use because I believe in coaches in almost every area of your life that you can. I want to steal other people's 10,000 hours always. And so Brandy was basically like, we do this thing called team, which is at the end of the day, I want to say every day, but we don't do it every day. So often sit down and it goes like this. You touch. So the first thing, maybe you're like holding hands. Maybe you're sitting next to each other. Um, the second is educate. So you sit down and you're like, what did I learn today? Um, Oh, I learned this cool thing from my conversation with Shane. I share, he shares. Then appreciation. So it's like, hey, I really appreciate, honey, if it's a bad day, it might be like, thanks for taking out the trash. You know, that's all I fucking got today. But I appreciate that you did that. The only rule is you can't keep using the same things. Every day you got to find something new to appreciate. And the…

AI assessment note: “we do this thing called team... You touch... educate... appreciation... metrics”

Q Is that like, was it a freedom thing to get out of that? Like you felt like your time was somebody else's?

A Um, it was more a curiosity thing in the beginning. I love, I love the ability to go deep into a subject matter that, uh, that I think is rare. And so, you know, if you look at skill sets, the way we determine if something's rare or valuable these days is typically monetarily, right? It's not always the best way. Maybe spiritually it doesn't make a lot of sense, but our society seems to say your skill set is ranked on how much money it makes. And so when I thought about it that way, um, I just wanted to go win the game. I wanted to play the game, and I wanted to win, and the highest game I could see was one in which you, you go and get financial freedom. And then with financial freedom, it wasn't that I wanted to work less, it was that I don't want other people to assert their will on me. And so when I was a journalist, I saw a lot of people on the U.S.-Mexico border Who, they had a last name like Sanchez, just like me, but they were being human trafficked. I mean, I was in Juarez, where women were getting mutilated along the border. Yeah, I mean, I saw, I've crossed, crossed the border hundreds of times illegally, documenting sort of what happens in conflict zones. And, um, and after a while, I was like, what's the difference between them and me? It really wasn't that I was American. It was, they just didn't have any money. They had no resources whatsoever. So the world assert…

AI assessment note: “it wasn't that I wanted to work less, it was that I don't want other people to assert”

Q Or how do you, how do you think about that?

A Yeah. We talk about it like, uh, learn, earn, invest, repeat. So I think when you're in your twenties, you're in your learning phase. You still want to try to increase your earnings, but if I had to choose between earning more or learning in that period, I'd optimize for learning because learning has unlimited upside potential. Like you're never going to go in your twenties from making 30 K a year to 300 K a year per year because You negotiated a better salary. That's a very unhigh likelihood. What you very well could, if you learn something additional in that one year, compound that over 30 years to multiple millions or more. And so I obsess on learning first. And then as I get into my later twenties and early thirties, I start thinking more about earning. So how can I make more money? Like my first job, I made 37,000 dollars a year when I was at Vanguard. I thought that was a bajillion dollars. And, uh, and then I realized quickly it wasn't, especially after taxes, but that first job in Vanguard set me up for, you know, jobs at four of the biggest financial institutions out there, and an ability to earn more, um, when I didn't want to be in the world of finance anymore.

AI assessment note: “We talk about it like, uh, learn, earn, invest, repeat.”