The Exchanges

Q From your time at Shopify, what were the biggest lessons you learned there from Toby?

A Uh, first of all, Toby is one of one. Um, like there's a reason why everyone says he is the founder other founders like. He's one of one. Let's just, like, I think there's no, it's hard to exaggerate that. Um, the thing I deeply appreciated by Toby is he had found words for ideas that are hard to describe. Let me give you, like, the one that I think is incredibly important. Um, there is an idea in finance called a discount rate. I went to business school and they say there's only three rules you learn in business school. Money is good. More money is better. Money now is better than money later. Those are the three rules of business school. Um, so everyone has this intuition about discount rates, i.e. if you give me a hundred dollars today, that's better than a hundred dollars tomorrow. But unfortunately, everyone has a wrong intuition about it. People apply too large a discount rate to future. So what ends up happening is people very frequently sell future growth at a massive discount for today's stock price. And the result of that, by the way, very objectively is PayPal. Like over and over again, that company made all the wrong decisions because they cared more about today than 10 years from now. And guess what? It is now 10 years from now, and the company's in deep trouble. I realize that most public company CEOs also don't talk this openly about other public companies, but i…

AI assessment note: “Toby had this very wonderful mentality of, um, applying essentially a zero discount rate”

Q company and shell of a culture, and now there's literally a cult following. You have the army around you, the open army, and then you have, uh, yeah, you have people like me and people like Keith who are just pounding the table and want more open doors. So Could you share, like, why is it so important to have a founder mentality with such a big turnaround like this?

A In order to create things that have not been created before, you need, like, exothermic energy. Like, we're, we're not a widget factory. Like the thing we don't do is like optimize the creation of a thing over and over again and try to turn like a dollar 10 into a dollar 12. That's not our job, right? If that was our job, then you can imagine like a professional manager being good at it, right? Like just look at the knobs, turn them slightly, like. But I find in the history of American corporations, and for Westworth, I think this is a uniquely like North American problem because it's not true in Japan, for example, but in history of American corporations, you get these significant moments of alpha followed by a slow decline once managers takeover, right? And you can, you can think of your favorite big company where it had that significant moment of alpha and then the decline happened. So I think the, the, the right words to use is not whether the founder is working at the company or not. The right words to use is the founder chair taken or not. Is someone sitting in the founder chair or is there at the, around every single meeting table in the company, an empty chair from someone whose job it is to call bullshit on things. Right? So look, I'm not anyone's, um, ideal dream of a corporate CEO. Like if you like go to Harvard Business School and imagine what a CEO looks like, it a…

AI assessment note: “In order to create things that have not been created before, you need, like, exothermic energy.”

Q Before we started and the cameras were on, we were talking about how important attention to detail is and staying true to your quality bar. And so with that and this, you know, aggressive personality, how much of that and that personality and maintaining a quality bar do you think is synonymous with success?

A I don't, I don't know. Honestly, I can tell you this, like, I try very hard To, um, criticize things, not the people who created those things. I think it's kind of useless to hold your past self guilty. So if you see me in a product review, I frequently say this fucking sucks. I very rarely say you fucking suck. Like the work is the work of Opendoor. So Opendoor has failed when it produces something that is not good. The individual people who worked on it may be excellent. Right? So we just have to keep working at that, and that's like a real thing. I don't have another way of doing this. For what it's worth, I think there have been successful people who don't pay that much attention to details, who are relatively macro-driven. They take, they place good macro bets on what the economy is going to do, and don't pay that much attention to details, and that can be a very successful Um, or at least profitable career. I'm not that guy. Like, I'm just not. I care a lot about the pixels. I care a lot about the API. I care a lot about the database. I care a lot about the words we say. I call our customer service lines. I talk to our salespeople. I care that this thing that we put out there is a reasonable representation of ourselves, and every day we should wake up and be deeply ashamed of it and want to make it better. So I don't know. I don't, I don't know. To answer your question is…

AI assessment note: “I don't know how much of that is important for the average person's success.”

Q Do you think it's important that the best public company CEOs have sorts?

A I mean, Elon has one. Alex has one. I have one. I'm not going to say we're all the same. I'm not saying that we're all similar people with similar styles and similar companies. I mean, other people might say that, but yeah, I think weaponry is important. Just like very real, like most companies, one of the saddest thing about capitalism is that if you go back to the start of public markets, Public markets were created such that average Americans could have a say in the companies and could actually pick companies and invest their dollars in capitalism. And most companies do this thing where they use the word retail investor as though it's a swear word. We're deeply proud, genuinely deeply proud that Opendoor is one of the most broadly held companies in America. And I think it actually does an important thing, which is The average American believes in our mission, because the average American thinks it is unfair that people can't afford a home to live in, that a system is stacked against average people having average jobs. Um, so no, we're like, like, we're not hiding it, like, we're deeply proud of the army, uh, and, uh, I think everyone in the company is, like, if you actually walk around, you'll see people wearing army jackets and army shirts, and, like, army swag all over.

AI assessment note: “Elon has one. Alex has one. I have one... yeah, I think weaponry is important.”

Q C E R Y. When I talk to Keith, He mentioned a couple of very aggressive things that he wanted to happen to the company. He rejoined the board. You, uh, joined the company. You're CEO. The board seems super hands-on. When, when I talked to him, he talked about how there were 1400 employees. He wanted it to cut down to around like 300. Had that, has that happened?

A I mean, no, look, I think there's like, I think Keith's insight was a correct one, genuinely correct one, which is That for the output Opendoor was getting, it did seem to have an unusually high OPEX. My problem is also, it's a different one, which is this, which is I am offended when people do things that human beings should no longer do. Like if you walked into an office building and you saw someone using the Gutenberg press to create an internal memo for distribution, you'd be offended. If you saw a bunch of people running around delivering mail, like it's, you'd be offended. Like it's like, this is just not work human beings should do today because we've learned lots of stuff. So I think generally, like, I think there's like, there was a lot of work happening at Opendoor where, let me, let me give you an example. When I got here and you went to opendoor.com and typed in your address. We'd say, great. We're gonna send someone to your house to take pictures. Someone to come to your house to take pictures. Then we'd ship these pictures to, uh, uh, overseas where someone on a laptop on a very bad lap on a Chromebook would look at them, circle the areas that need to get repaired, that it would send back to someone else overseas. And then it would just do that. Like, and then they're down the chain. So between the time, like you put your address in and you Got an offer. There'd b…

AI assessment note: “I mean, no, look, I think there's like, I think Keith's insight was”

Q Has it been hard to maintain culture with that? If you're bringing in an entirely new culture to something that was...

A I don't think Open Door had much of a culture. Transparently, I think what happens to companies when they're run by, like, professional managers is, like, culture atrophies. Like, what happens, this is a real thing. People think, people have a caricature in mind of what leadership is. They think of a job of a leader is to stand in front of a room and be, like, mascot as CEO. Like, rah, rah, rah, we shall go over that hill. That's like, like, that's not what the job is. The job is to hire great people, train them well, tell them what, tell them what the priorities are, and inspire them in that order. Right. That's the order of importance. I think lots of people like pretend culture is like beer on tap in the office. That's just lazy. That's the application of your responsibility to people's careers. So like, I don't think open door had that much of a, I think it was like, I find the best thing for culture is this. Tell people who you are. Say things that people can reasonably disagree with. Cause if you say a thing everyone agrees with, you've said nothing useful. Right? And then win together. Like the best thing for culture is doing hard things together in person. Like high school football teams have cultures. Cause they do things together that are hard in person, right? What isn't that much of a culture is like, you know, the Dunder Mifflin office in like the office. It's just…

AI assessment note: “I don't think Open Door had much of a culture.”