Mar 6, 2025 · 1h 12m · lennys-podcast
Notion's lost years, near collapse during COVID, staying small to move fast, building horizontal
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In this in-depth conversation, Lenny Rachitsky interviews Notion co-founder and CEO Ivan Zhao about the company's early existential struggles, modular software philosophy, and the disciplined operational strategies that built a multi-category technology powerhouse.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Lenny holds 29.9% of the talking time here. How this is scored →
Lenny as informed peer 3.9 Guest teaching 4.6 Guest disagreement 1.7 Lenny pushing back 1.2
speaking balance: gold is Lenny, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 42:10 Rebuffing the 'soft-spoken leader' framing
Ivan rejects Lenny's characterization of him as a soft-spoken CEO, stating that in internal product brainstorms the reverse is true due to his direct communication style.
Hardest push from Lenny ▶ 32:10 Questioning whether lean operations stemmed from early traumaLenny pushes on whether Notion's strict lean headcount discipline was born out of fear from their early near-death years, forcing Ivan to clarify it was driven by taste and systems philosophy.
Biggest teaching moment ▶ 9:10 Critiquing Steve Jobs' interpretation of Xerox AltoWhen Lenny brings up Jobs' famous bicycle quote, Ivan educates him on how Jobs overlooked the malleable object-oriented nature of Smalltalk, locking software into rigid application silos.
Lenny holds their own ▶ 54:25 Presenting proprietary audience survey benchmark dataLenny cites his comprehensive reader survey data of 6,500 respondents to demonstrate where Notion unexpectedly ranks across multiple horizontal categories including CRM and project management.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Lenny as informed peer | Guest teaching | Guest disagreement | Lenny pushing back | Why |
|---|---|---|---|---|---|---|
| Ivan Zhao's Origins: From Urumqi to Art School and Programming | 3 | 2 | 1 | 1 | Lenny gently prompts Ivan on his upbringing in Urumqi and his path through programming competitions. Ivan clarifies that Urumqi was actually a large city of four million people rather than a typical small town. | |
| Learning English and Western Humor Through Cartoons | 4 | 7 | 4 | 1 | When Lenny quotes Steve Jobs' famous 'bicycle for the mind' metaphor, Ivan directly counters by arguing Jobs was actually at fault for missing the object-oriented power of Xerox Alto and Smalltalk. Ivan educates Lenny on early computing history and Alan Kay's vision. | |
| Notion's 'Lost Years' and the 'Sugar-Coated Broccoli' Strategy | 3 | 5 | 2 | 1 | Ivan details the difficult early years where Notion initially failed because people didn't care about a standalone developer tool. He introduces the concept of 'sugar-coated broccoli' to explain how they had to disguise developer capabilities inside familiar productivity apps. | |
| Technical Missteps and Rebuilding on Orthodox Foundations | 3 | 4 | 1 | 1 | Ivan recounts technical setbacks betting on Google's early web components framework and having to scrap the codebase. Lenny asks pragmatic questions about financial survival and loans from Ivan's mother. | |
| The Kyoto Reset: Downsizing to Survive and 18-Hour Coding Days | 3 | 4 | 1 | 1 | Ivan describes downsizing Notion to just two people and moving to Kyoto to rebuild the product during marathon 18-hour coding sessions. Lenny inquires about the mindset required to endure such low points. | |
| The Power of Exponential Abstraction and Sunk Cost Resets | 6 | 5 | 2 | 2 | Ivan explains why resets work mathematically through higher-order abstractions that compound exponentially. Lenny actively synthesizes this concept with modern LLM advances and chain-of-thought models like DeepSeek. | |
| Recognizing Product-Market Fit and Rejecting Vanity Validation | 4 | 4 | 1 | 1 | Ivan explains that PMF did not arrive as a binary milestone, but rather through strange signals like VC gifts sent to their private office address. He highlights an advisor checking his ego on vanity VC validation. | |
| Sponsor Message: Cinch | 5 | 4 | 2 | 2 | Following a sponsor read, Lenny questions Ivan on Notion's unusual operational discipline, noting their profitability and delay in hiring sales or PMs. Ivan outlines how multi-skilled generalists keep internal communication overhead minimal. | |
| The 'Small Bus' Metaphor for Organizational Speed | 4 | 4 | 1 | 1 | Ivan shares Notion's internal 'small bus' mental model for organizational agility and discusses intentional office design aesthetics. Lenny expresses curiosity about the deliberate choices like warm lighting and shoe-free spaces. | |
| The Philosophy of Craft and Navigating Multidimensional Trade-offs | 4 | 5 | 1 | 1 | Ivan articulates his philosophy of craft as the clever navigation of multidimensional trade-offs between human nature, market realities, and new technologies. Lenny connects this to Steve Jobs' quotes on craft. | |
| Leadership Maturation: Direct Communication and Storytelling | 3 | 6 | 5 | 2 | Lenny characterizes Ivan as a soft-spoken CEO who differs from typical executives, but Ivan directly pushes back, saying he is actually very direct and non-soft in internal brainstorms due to his cultural roots. | |
| Product Strategy Pitfall: The Mistake of Hardcoding Features | 3 | 5 | 2 | 1 | Ivan candidly reflects on a strategic misstep where Notion hardcoded project management sprint features instead of building modular Lego primitives, resulting in internal friction and user backlash. | |
| Notion's COVID Crisis: The Database Doomsday Clock | 4 | 4 | 1 | 1 | Ivan recounts Notion's infrastructure crisis during COVID when their single Postgres database almost ran out of storage headroom. Lenny drills into the timeline and technical urgency of the sharding effort. | |
| Multi-Category Dominance: The Power of Relational Databases | 6 | 5 | 2 | 2 | Lenny brings proprietary survey data showing Notion ranking high across PM, Docs, and CRM. Ivan explains that Notion never intentionally built a CRM, but users naturally constructed it out of relational database blocks. | |
| Leveraging AI as the Assembler of Modular Blocks | 4 | 5 | 1 | 1 | Ivan details how AI acts as an automated assembler for Notion's modular blocks, converting years of knowledge-work primitives into custom agents. Lenny highlights the data advantage Notion possesses for AI. | |
| Market Waves: Historical Bundling and Unbundling Cycles | 4 | 6 | 2 | 1 | Ivan draws on classical Chinese literature, Romance of the Three Kingdoms, to explain software bundling and unbundling cycles from paper to PC, SaaS, and modern bundled platforms. | |
| Tools and Human Agency: Empowering the Non-Programmer Economy | 4 | 5 | 1 | 1 | Ivan reflects on McLuhan's philosophy that tools shape human potential and celebrates non-programmers earning livings by packaging their workflows into Notion templates. Lenny reinforces the financial scale of this creator economy. | |
| Cross-Disciplinary Learning and Looking Beyond Tech Echo Chambers | 4 | 5 | 1 | 1 | In the lightning round, Ivan urges technologists to look outside modern tech echo chambers to history and complex systems theory. He recommends James Burke's Connections documentary series. | |
| Connecting with Ivan and Recruiting Exceptional Misfits | 3 | 2 | 1 | 1 | Lenny closes the interview by asking where listeners can find Ivan and how to get in touch. Ivan puts out a call to hire exceptional misfits interested in modular computing and AI. |
Statements from this episode (33)
Zhao: Notion was built to let non-technical people create custom software
“I made three or four websites and realized, oh, actually people don't know how to create with the software media, computing media. So that got me to want to create a product like Notion today, which is a lot more people to create tools, create software for the…”
Zhao: Learned English and Western humor from SpongeBob and The Simpsons
“Yeah, it's real. I moved to Canada pretty late 16 years ago, and what I learned is, yeah, in, in China, you can learn English, but it is typically just grammar and doing exams. What you're missing is the context, the culture. So you have to watch SpongeBob or …”
Zhao: Computing pioneers believed software shouldn't separate builders from users
“For them, people like Douglas Anglebar, Alan Kay, Ted Nelson, those first generation pioneers, for them computing, there shouldn't be a separation between builders and users. It's the same medium.”
Zhao: Jobs and Gates focusing on GUI over Smalltalk caused SaaS sprawl
“He only saw the graphic user interface. He did not see the underlying object oriented environment power. As the generation of Steve Jobs and Bill Gates bring, make PC personal computing popular. And they sort of stuck with this kind of application framework ra…”
Zhao: Most everyday users do not care about creating custom software
“The majority of people, they wake up, they have report due, they need to get their job done. They don't care creating software to optimize whatever they're doing. They don't care.”
Zhao: Disguise ambitious product visions inside familiar everyday utility
“And we call it sugar called broccoli. People don't want to eat the broccoli, but people like sugar. So give them the sugar, hide the broccoli inside of it.”
Zhao: Notion rebuilt its codebase because Google Web Components proved too unstable
“Before react wins, there's a competing technology called web component from Google. And it makes sense. Web component feels like a Lego like the building block like, and we're betting on that technology. And then we realized, because it's so new, it's just so …”
Zhao: Notion was initially kickstarted and bridged by his mother's loans
“My mom helped me, well, actually, my mom helped me kickstart a company, because I'm Canadian. In order to move to U.S., you need to, like, register a company. So my mom helped you with the initial, and they raised the money, and I sort of returned the money to…”
Zhao: Notion laid off its early team to downsize to two co-founders
“At that time, Notion was five people. We lay off, I brought it back to me and Simon, two people.”
Zhao: Notion co-founders lived cash-flow positive in Japan by subleasing SF offices
“And we sublease our apartment and office, we're actually making money living in Japan. And then San Francisco.”
Zhao: Building solely for business creates commodities, not products
“Too much of yourself, then there's no users. You're just doing our project. You're just doing a research project, right? And it's too much for business. You're building a commodity, right?”
Zhao: Resetting around superior abstractions recovers sunk costs exponentially fast
“You can create progress through better abstractions, and that thing compounds faster. It can catch up to all the things you build much quicker than you ever thought, right? Or humans are not thinking, not good at thinking in terms of abstraction or the exponen…”
Zhao: Product-market fit is a gradual ramp, not a binary milestone
“It never hit me, hit us as like a binary state. It just kind of like, oh, Good. We have people who care about this thing we make now. Oh, good. People are reach out to us or paying us. And it's a kind of very gradual ramp.”
Zhao: Organizational overhead stems mainly from internal communication alignment
“It's the over overhead is actually more from internal communication, right? It's really hard to get people's mind to be aligned on things to see the world in the same way. And the part that you do need people, maybe you can solve better through systems or bett…”
Zhao: Notion tracks revenue per employee instead of total headcount
“We have this internal notion called talent density, right? Which we're not, we don't try to track number of people, but we try to track how talent dense revenue per employee we are, and people want to work with other more talented people. So it's a positive co…”
Zhao: Smaller teams accelerate and maneuver faster than large organizations
“The bus, the smaller the bus is easier to turn corners, easier to accelerate, easier to maneuver. The bigger the bus it is, it just, like, bigger the boat, bigger the bus, slow down. And as a leader in the company, you decide who sit around you on the bus seat…”
Zhao: Tech industry focuses too much on short cycles over enduring products
“Software, and especially tech, it's just every six months, every 12 months cycle, they don't, we don't think enough about create something that lasts. I care creating something that's, at least the form factor lasts longer than half 18 months.”
Zhao: AI language models function like new raw materials enabling novel trade-offs
“I always feel like AI language model feels like a new type of wood. It's filled like aluminum as a new type of material, right? So you can make like mass air travel wasn't available until aluminum become cheap enough that people can make airplanes that support…”
Zhao: Notion's internal culture leans toward direct, East Coast-style communication
“Notions ethos probably more like a east coast rather than west coast. So somewhere in between, right? It's more direct.”
Zhao: Violating core values for revenue triggers employee and customer rejection
“If you create this thing called a product or business, you attract people are value aligned to it. Then if you're trying to optimize too much on this competition, revenue side of things forced to introducing something entire value. Then you, the system, it's l…”
Zhao: Non-modular software development causes the system to work against you
“If you're building the Lego inside Notion in the code base or product, the system work for you. If you're building non-legal way, the system works against you. So in some sense, we're creating a tool that has an emergent behavior. You need to channel in that e…”
Zhao: Notion nearly collapsed during COVID running on a single PostgreSQL instance
“For the longest time, where Notion runs on one instance of Postgres database, and then we find the beefiest machine, we keep scrolling, find a beefier, beefier machine to scale our user base. But then we were running off the, even the largest instance there is…”
Zhao: Enterprise buyers want packaged software solutions, not modular building blocks
“Only hardcore Lego fans care about Lego bricks. Most people care about Lego boxes. And they actually want the Lego box to be ready-made when you on package box, the set is there for you.”
Zhao: Horizontal software requires artificially constrained positioning to sell effectively
“The advantage of building horizontal, there's no wall, at least for in our space, we know shouldn't go after entire software market, but then you need to create a wall yourself. So to make your go-to-market distribution, to create the spot in people's mind, yo…”
Zhao: Notion never intended to build a CRM product
“Yeah, we did not intend to build CRM, but what is a CRM? It's a relational database. That's why we give people that break. That's a relational database and they can build CRM themselves.”
Zhao: Startups do not need complex vertical software solutions
“I think the good advantage is if a customer use Notion, they can address those three, four use cases in one place, especially for our startup mid-market companies, their need for each of the vertical use cases is not as complex.”
Zhao: Half of Notion's B2B customers originate from prior personal users
“Half our B to B customers coming from prior personal users. And a lot, most of them use Notion for notes and docs in the first place.”
Zhao confirms Notion is actively developing an email product
“That's why we're also working on an email product right now.”
Zhao: AI performs best when data is centralized in bundled horizontal tools
“AI is so good at reasoning and understanding and searching things. And it can do a much better job of finding and searching things if all the information are together. That's what realized AI is really good with bundled offerings. AI is really good with horizo…”
Zhao: AI coding agents atop modular blocks enable custom vertical tools
“So now we're looking at, holy shit, we spent the last five, six years building all those Lego blocks for knowledge work. If we're just putting it, AI coding agent on top of it, you can have any kind of knowledge, customer software, customer agent for whatever …”
Zhao: The software market is shifting from vertical SaaS back to bundling
“Now we're sort of at the tail end of SAS. There's so many verticalized SAS average company to use like almost a hundred tools. It's not. It's kind of madness, right? So there's more, the market shifting towards more of a bundling approach. And with AI, and wit…”