The Exchanges

Q Is there a story that comes to mind when you think of make everyone the hero of their own story in terms of how it's amplified the effectiveness of that person?

A You know, probably, you know, here, here would be one, which is so, you know, I, I brought Jeff Wiener in to be the CEO because Jeff's one of the great scaling leaders of our You know, of our cover our era and in the technology space and, and Jeff knows a whole bunch of things about scaling organizations that I, you know, simply learn from. It's one of the things that In general, you know, try to work with people, even employees who you learn from. Because if you're, if you're hitting that, that good of a bar, you're, you're at least in a good space. And yet, uh, one of the things that Jeff came to me and said, hey, I'm finding your co-founder, Alan Blue, to be disruptive. He's not fitting in the, the scheme in which I'm setting up. And, you know, it's up to me to scale. And so I said, well, Look, I think it's that you don't yet realize both Alan's strengths and then the value of having, you know, kind of founders still in the mix. Um, and so I want you to trust me on this, and I want you to give Alan kind of a A bit of a, a minister with a kind of a, a diversified or broad or, you know, kind of a fragmented portfolio and see what you get from it and give it some real time in order to do that. Um, and if, you know, six months from now you come back and say, look, this is really just still not working. Then, then we can have another conversation, but I want you to do that. And t…

AI assessment note: “I brought Jeff Wiener in to be the CEO because Jeff's one of the great”

Q Are there sort of common mistakes that you see, uh, CEOs of the companies that you're invested in now, uh, tend to try to make or make repeatedly that you wish, uh, everybody would sort of learn these lessons from somebody else rather than firsthand?

A Probably the most common mistake is where do you get the cadence of hiring, and the fact that you need to be hiring and adjusting. So look, usually when you're moving very quickly and changing your level of scale with a number of employees, it's kind of a tempo in this, usually you're going to need to hire in some external people in the senior roles in order to really make that work. And that's usually pretty uncomfortable. And you have to make this decision about like, well, what's the right level of scale person? What experience do they need to be bringing in? How do I manage internally? Like, you know, the person who used to be my head of product or my head of engineering. Now I hope it's still working here and it's still really capable, but now may no longer be the head of product or engineering. And how do you navigate that? And so that tends to make everyone Much slower, much less, you know, how do you trade up on that? People tend to naturally want to promote from within versus higher. And even though you might have very good people and very knowledgeable people, there's a bunch of legitimate reasons why you want to promote within. They know your particular culture. They know your particular way of playing the game. You have an efficiency of how you talk to each other in it. But like, you know, for example, the people who are religious about like, well, we only promote f…

AI assessment note: “Probably the most common mistake is where do you get the cadence of hiring”

Q One of the underappreciated aspects of decision making that a lot of people don't cover is sort of opportunity cost. How do you think about opportunity cost?

A Well, it's funny because my, my primary Business of technology investing is a case in point of this. People normally assume that like we say, well, what's your, what's your regret? And they presume that your regret is you invested in company X and that failed. And actually, in fact, the more important thing is you missed company Y. So when people ask me, you know, like what's your regret as an investor, it's like, well, I was presented Pinterest three times and misunderstood it and didn't invest in it. Those things are the huge regrets because it's the, it's the opportunity cost for it. And part of, of course, the reason why opportunity cost is hard for people to think about is it's the possibility. And you might change your possibility landscape based on your action. You might, you might do things, you know, like, for example, going and meeting someone or possibly considering something or, you know, a decision whether or not you take a meeting or not as an investor. And obviously, given that there's no way to, to reliably get it to a hundred percent, because it's a big wide world and everything else, it kind of confuses people. And then they simplify. And so would you, what you want to do when you're thinking about opportunity costs is say, well, like in terms of personal life, think in terms of one, two, three, five years of what you're doing, thinking about like, you know, i…

AI assessment note: “what you want to do when you're thinking about opportunity costs is say”

Q people's alpha tendencies, how he's learned to control his impulses, and a lot more. It's time to listen and learn. I think the place that I want to start is you've been involved in some of the biggest sort of like scaling companies that we know of today, either through investing like Airbnb, hands-on sort of like PayPal and LinkedIn. What have you learned about scaling that most people miss?

A I'd say the classic thing is how you have to be constantly evolving your learning pattern. That what got you here won't get you there, and it's across a wide variety of fronts. It might very well be in, well, certainly in how you organize your management, and so, for example, you grow from everybody being an agent, an actor, you know, doing direct work, to a few people doing management and direct work, to Some people just managing to people who are managing managers. I know as you get to different levels of scale and each of those changes a whole bunch of things within the organization and changes, you know, communications and reporting structures. It changes nimbleness. It changes whether or not you're single threaded or multi-threaded, you know, so all these things, but it's like, it's what got you here. Won't necessarily get you there. You need to be learning the new game. That was the internal management one, but in addition to the internal management, You begin to look at things like, well, okay, well, what is your go to market strategy? Um, are you, are you a sales based? Are you internal sales, external sales? Are you a channel oriented? Um, you know, if you're doing a scales force and growing the sales force, how does that work? If you're getting the multi-threaded and multi-products, how does that work? You know, all of these things go into kind of like you're constant…

AI assessment note: “how you have to be constantly evolving your learning pattern.”

Q Can we dive into that a little bit more? Like, how would you teach somebody to make decisions fast and well, or faster and sort of better at the same time?

A So there's a couple things. So one, like, for example, one of the things that I, I value in, in people I work with and hire is, is, is being explicit learners. Which is you try to learn something in a way that you can explain it to other people as a tool and as a principle. And so, you know, a little bit of like when I was learning how to make decisions much faster at PayPal, I said, all right, well, what I will do is I will get into the ritual of confronted with a major decision. I will see if I can make that decision right now, because I'm, what I'm doing is a training my way away from the discomfort of, oh God, I haven't thought about everything. What if I'm wrong? You know, how could I make this big decision so quickly away from that, but not in a way that you say, well, the decision's made when you do it, but you're thinking about, you know, concretes about like, well, you know, who else would you talk to? What other information or data could you get? Uh, what other things could bear on this decision? What other kinds of risk analysis? So that's one ritual that helps you with that, and it, you know, obviously you should start by doing the, trying it, not immediately going to, I'm going to be making that decision in, you know, five seconds from, from when it happens, but then also part of what you begin to do is kind of Learn a set of questions. There's kind of, there's a w…

AI assessment note: “I will get into the ritual of confronted with a major decision”

Q And what about scaling yourself? I mean, I think I read an article in prep for this that, um, you know, I think it was really old, but it was about a decade ago and you said you were operating at 60% effectiveness. What have you done to bridge the gap? How do we scale ourselves?

A You know, to some degree, the answer is easy and the execution's hard. Easy is you try to shift things you're doing to being covered by the people. It's like you scale organization, you hire people, they have They now have new responsibilities at work. So, you know, I grow my own organizations to help me, uh, execute well. So I, you know, kind of recently just did a whole bunch of, of, of, uh, Dolly image and NFT stuff. And, you know, without a, you know, really excellent team of six people who were, you know, frankly doing, you know, putting more hours in, uh, each of them than I was in the thing, we wouldn't have been able to get such an amazing, Set of projects out. Uh, so that, you know, kind of growing through people and, you know, kind of growing the organization. Another one is you kind of look at, you know, what are the, you know, skills you hone and do, and how are you learning? How are you making decisions well? How do you operate, you know, better or faster? And, you know, what are the things you need to be doing? And obviously, in combination with the first one, in terms of delegation and collaboration. And then, of course, what tools do you use? You know, for example, you know, one of the things that I do in You know, kind of a Microsoft OneNote is I have a, a list of all of the people that I interface with that I keep a running agenda with. Um, and so like, for ex…

AI assessment note: “Easy is you try to shift things you're doing to being covered by the people.”

Q Uh, go deeper on that a little bit. When, when do you think PowerPoint's more effective and when do you think sort of like writing it out, uh, like, can you tie those things together for us?

A So I think it's, it's, what's the level of depth that you should invest in creating detailed media objects to accomplish your goal. And Like when you're writing, you might write in part because you have to have thought through it in depth yourself. It's generally speaking, you know, you'll find when you're writing, uh, you're kind of, you know, you've got your hands deep in it. You're thinking about it. Questions will occur to you as you try to phrase something, you realize that it may be more murky or some undiscovered decisions or risks in what you're doing. So that's one part. Another part of it is you want detailed pickup by Other people. So of course, one of the reasons why you tend to, uh, have, you know, kind of, uh, you know, writing and reading of things is because the reading is someone can read it in a lot of depth and, and kind of pick something up. So that would be why you get to, you know, should you write one page, six pages, you know, 50 pages as a way of doing it. But by the way, of course, writing takes a whole bunch of time. And if you said, Hey, I'm going to like, for example, write down everything that I'm going to do in depth. Then you're going to really slow down and not do a number of things that you probably need to do. So then you go, well, when should I, when should you use PowerPoint? Well, probably if what you're trying to do is get it like an, an o…

AI assessment note: “when should you use PowerPoint? Well, probably if what you're trying to do”

Q Not at all. I love the nuance and the detail. I actually want to dive in a little bit deeper on that. Two things stood out there. One, you used the word ritual intentionally. What is it about that word? Why did you choose ritual?

A Well, a couple reasons, maybe three reasons. One is because Part of the expectation kind of like, you know, team play, you know, whether it's basketball or everything else, is to get into a set of reflexive, you know, kind of play, all our rituals, so that you're aware of, like, for example, it's like, well, we're going to do, we're going to open up every board meeting with kind of a SWOT analysis, strengths, weaknesses, opportunities, threats, and we're going to do an update to where we were last time, and that's what we're always going to make sure that we do, because then we Can be well set for that. Could also be the, like, for example, one of the rituals that I actually particularly like and try to, you know, kind of nudge my, you know, CEO, uh, of the various companies I'm on the board of to do is to have a section that's kind of like just revealing what's top of mind. What problems are you thinking about? What strategies or opportunities are you thinking about? What are the things that you're most wrestling with so that we have some sense of both your mind and also how to help? And by the way, that can be much more Too often people spend too much time preparing for board meetings where the real question is, is the, the, the right balance of cost to reward in governance and helping the company, right? Not, not infinite. And so, so like the CEO thing. And then the, the thi…

AI assessment note: “Well, a couple reasons, maybe three reasons. One is because Part of the expectation”

Q It sounds sort of very biologically driven, right? Like we all have biological sort of programming to fit somewhere into a hierarchy and status and how we see ourselves and how driven we are by that.

A Yes. And I don't know if it's, you know, it may be too simple of a variable to easily map to, um, You know, kind of like, I don't think we'll discover it necessarily. It'd be interesting, you know, if we discovered a certain set of genes or, or expressions and phenotypes that led to being more alpha. But I think it's, you know, obviously, you know, part of what happens is how do you respond to circumstances you discover in your childhood and other circumstances? How do your adults model around you and all the rest? But yes, I do think there is a, it's because we're, you know, living beings, biological beings that, that, that naturally ties to this.

AI assessment note: “yes, I do think there is a, it's because we're, you know, living beings”

Q Does that relate to people's, and to borrow another term that you've used previously, alpha tendencies? And if so, how so? Talk to me about understanding someone's alpha tendencies.

A So we're, we're tribal creatures. We're pack animals. You know, um, Aristotle, we're citizens of the polis. Polis is this really interesting word. It comes from, it has all these things. It's political, it's police, it's polite, right? All of these things kind of come into the, this, this, the, that we're, we're creatures of the city together. And Part of that is that people have different, um, leadership instincts about like, I must be in charge. And that's kind of your alpha tendencies. And, and sometimes people have like, just like, I must be in charge of everything. Sometimes they're, I must be in charge of this important thing. And so those are kind of alpha tendencies. And one of the things that when you're composing an organization, understanding where alpha tendencies are and how they will cause someone to behave, um, And not behave is really important because by the way, if you put someone who doesn't have really strong alpha tendencies in charge of a project, that person, generally speaking, won't drive the project as hard. That might be a good thing.

AI assessment note: “Part of that is that people have different, um, leadership instincts... that's kind of your alpha tendencies”

Q Walk me behind the scenes a little bit. What happened during a crisis at some of these board meetings? Is it standard operations? Is it different? What's going on during something like COVID-nineteen or financial crisis?

A Well, There's a couple of things that are going on in crisis. One is you also, it's a good place where you get a sense of, you know, is the CEO and the management on top of it? So for example, if you walk into a board meeting and, and there's a crisis and you're not presented in a way that's where there's a crisis and, and, you know, we're doing a briefing for what the crisis is and kind of what our preliminary responses and thoughts are. What our analysis of the challenges are, then you, you know, have an issue. So if you walk into something, and people are like, Yeah, COVID, pandemic, whatever. You're like, no, no, no, the whole world's changing, because even though maybe in your particular thing, by the way, obviously COVID had some tailwinds for some digital businesses, because, you know, when we all had to kind of retreat home and work through our computers, you know, it was everything from obviously, you know, Zoom and Netflix and games, all kind of like, you know, suddenly massively increase in the amount of time they are. But even then you say, well, okay, Got to understand what that is, and you can't necessarily predict that as a new normal forever. That, that's the form of crisis you always hoped for. But then there's obviously like, even when you say, well, the business, it hasn't really shown up in my numbers yet, but like industries are collapsing. Supply chains ar…

AI assessment note: “if you walk into a board meeting and, and there's a crisis”

Q You've had over a thousand board meetings between Microsoft, Airbnb, LinkedIn, PayPal, and more. And one thing that you said recently is that successful board meetings don't just happen by accident. What are the rituals of these meetings that make them successful?

A Well, it's a really good question in part because You know, I actually think most people don't realize how boards are more of a kind of an apprenticeship kind of professional gig versus anything else. And understanding how to do a board well only comes with a lot of repeat practice, which mostly, you know, very few professions. Vendor capital is one of the few that does. Um, the kinds of things that I think are very important for a good board meeting are that You, you've got a combination of the governance questions, which is roughly is the company. Kind of, uh, on the right track relative to its position and opportunities and everything else and, and is, you know, kind of operating at the level of, of excellence that it can relative to its industry and talent and all the rest. And then the other one is how do you help the company? Um, now as you get more to a public company, it's becomes more governance and, and, and somewhat less help partially because, you know, like when you get onto a board of something like Microsoft, You know, it's a huge company. And while I, you know, personally will go meet with product groups and do other things and, you know, kind of weigh in on certain kind of technical, uh, technology strategy decisions completely in service to Satya, you know, the, the governance is a higher function. Now in governance, you need to be able to understand what is t…

AI assessment note: “combination of the governance questions... And then the other one is how do you help”