The Visile - February 22
Ideas and insights from Marc Andreessen (a16z), Eric Yuan (Zoom), Frank Slootman (Snowflake), Des Traynor (Intercom), David Rosenthal and Ben Gilbert (Acquired Podcast), and more!
Hi and welcome to The Visile!
The Visile is a monthly newsletter focused on startup + tech podcasts. Each issue carries highlights from seven to 10 podcasts, additional commentary, and links to their transcripts, where available.
The Visile is based on an earned secret: podcasts have the highest signal-to-noise ratio of any medium of content in the startup and tech world. Time is at a premium in the startup world. Most investors/founders are simply too busy to write long-form pieces about their insights, frameworks, or playbooks. Even those who write cannot do it as frequently as they would like to.
This is why podcasts matter. Podcast hosts curate conversations to extract unique & valuable insights from their guests. Thus, founders/investors can unpack significant value in just an hour on a podcast compared to many hours writing an essay.
Despite the content density, many see podcasts as a secondary content medium compared to essays, long-form writing, or Twitter threads. The Visile is an experiment to change this perception!
Think of each issue of The Visile as a mini-book rather than a newsletter (it’s 7000+ words!). Settle down with a cup of steaming tea or coffee on the weekend, maybe put on relaxing music and enjoy the insights curated especially for you. If you prefer printed mini-books, you can download the full-length, print-friendly pdf of this issue by clicking here.
The Visile is co-authored by Rohit Kaul, a marketer by profession and a writer by avocation, and Sajith Pai, venture investor and an observer of the Indian startup + tech worlds.
We hope you enjoy The Visile. You can reach us anytime at <thevisilenewsletter@gmail.com>. Feedback is welcome.
- Rohit and Sajith
Podcast: Forcing Function Hour
Episode Name: Thanh Pham, Operating System for Efficient Teams
Thanh Pham runs Asian Efficiency, a productivity training shop. They offer productivity courses/workshops. Thanh also cohosts The Productivity Show podcast. In this episode, Thanh talks to poker player turned performance coach Chris Sparks about how to think about and apply the principles of productivity at the level of teams.
A CEO's primary function is resource allocation.
Resources could refer to money, time, energy, attention, etc. First, the CEO has to make sure their time, energy, and attention are appropriately allocated, else this will impact the rest of the org. Beyond that, the CEO has to ensure that financial resources and human resources are being allocated properly. These two address most of the challenges that a business has.
The three-times Rule
“One of the things I teach in my personal productivity courses that also applies on the business level is what I call “the three-times rule.” And it's a really simple idea of if something annoys you three times or more, you have to figure out what the root cause of it is, and then fix that. If something annoys you frequently there's probably a systemic root cause somewhere in your business that's holding you back from growing or scaling or from having a really smooth operation going on. “
Remove Blockers
“Growth doesn't always require new initiatives.” One way is to drive growth via new initiatives or doing more. Another way is by asking, "How can we eliminate all the bad things in our lives?" In the context of business, these could be inefficient or redundant processes or ‘waste.’ Sometimes, these could be processes or blockers coming in the way of driving conversion, and by removing them, you speed up conversion, sales, and revenue.
DNA Meetings
“A DNA Meeting —I got the idea from Scaling Up - is just this simple idea that we want to make sure that the founder and the upper-level management has a regular meeting. In this meeting, the founder simply talks about how he or she makes decisions, how he or she thinks about what happened in the last two months or something in your company, and how he or she would do things a little differently.
“I have this meeting once a month, and I call it the DNA meeting, where all of my senior people come on, and we review some of the” past decisions made. “I would say, "Based on this, this is how I would have done things differently," or, "This is a decision that I would have made." And when we do this once a month, over time, people get this sense of, "This is how Thanh would do things," and then over time, they can make their own decisions as well. “
Decision-making guidelines
“We have a page inside of our Confluence, which is the software we use internally for housing meeting notes and operating procedures and so on, called Decision-making Guidelines.” DMGs. I basically laid out ten things in there of how I make decisions that I want to make sure that everyone understands as well. An example is, "If it costs less than a hundred dollars, just purchase it, and you'll get reimbursed, no questions asked." So now people don't have to ask anyone, "My keyboard just broke down, it's sixty-nine dollars, can I purchase this or not?"
How do I know if I had a productive day
“If people are able to answer that question, it gives them a sense of clarity that they know what they're supposed to be doing. How do we make sure that every single person in my company can answer that question? The question in itself seems very innocent and simple, but it actually is very difficult to build a structure around, because if you think about every single person in your company, what do I need to put in place or what do they need to have in place to make sure that they can answer that question? And what starts to unfold about that question is that they need to know what kind of benchmark or what kind of standard you're aiming for so that they know that if they hit it, they had a "productive day." And if there's no standard or nothing there, they can't really answer that question.
Once everyone knows what a productive day looks like for them, you'll be able to see that everyone can perform at a much higher level than ever before. But it takes you as the owner to really sit down and think, "How do I make sure that everyone in my company can perform at a high level and make sure that they hit a standard that is expected of them?" And that requires for you to think through, "What's the standard for every single person? What do we need to do to make sure that they succeed at this?"
Episode/Transcript link: https://www.forcingfunction.com/podcast/thanh-pham
Podcast: The a16z Podcast
Episode Name: M&A, Before and After: What Founders Need to Know
In this episode, a16z editorial partner Zoran Basich chats with a16z partners Blake Kim and Martin Casado, on the mindsets and frameworks that founders should know when navigating the M&A process. This is a very insight-dense episode with practical frameworks and tips for founders.
Three types of M&A
A VC-funded company cannot find a product-market fit and raise the next funding round. Hence, the founders need to sell the company.
A company reaches limited Product-Market fit and scales to $30-50 million in revenue, but growth is stalling, and IPO is not a likely option.
A buyer approaches the target company when the seller is not thinking about selling the company. The buyer offers a significant premium to buy the company.
How can a company increase chances of getting acquired
Startups should build long-term commercial relationships with strategic buyers years ahead of any potential M&A so that the buyer feels comfortable paying a premium price for the target. The long-term relationship means the executives at the buyer sponsoring the acquisition can take a pricing risk.
you want the buyer to pay a price that the buyer feels uncomfortable with. And that's when you know that you're maximizing your sell price.
Frameworks for founders to think about M&A
Maximizing shareholder value
Your company is doing well, and a strategic buyer (public company) that is also doing well wants to acquire you in an all-equity transaction. The shareholder value will increase as they get shares of a large company doing very well.
Kingmaker risk
Your company is doing well, and a strategic buyer (public company) that is also doing well wants to acquire. You can choose to be independent, in which case the buyer acquires your competitor that changes the competitive landscape and diminishes your value. The buyer can make your competitor the king post-acquisition by providing more resources.
Founder’s psychology
A first-time founder might decide to sell the company because that might be a meaningful amount of money versus a founder that may have sold a company in the past and has enough cash in the bank.
Younger founders are willing to take greater risks and run the business with more runway. Older founders may want to sell and settle.
Risk-reward equation
The highest expected outcome in an M&A situation, in theory, is not to sell as you can become as large as Facebook, but the chance of that happening is very low.
Thus, it comes down to the risk appetite of the founder and how much-staying power she has to chase a considerable expected outcome with tiny odds.
The problem is that a 1% chance of something happening isn't practically useful for a founder. If you had a choice, if you're like, okay, I'll give you a 50% chance of making $20 million, or I'll give you a 1% chance of making $200 million. Like, what would you, you'd probably take the $50 million right now,
Buyers value startups differently from what founders think
Founders think they are not making much money, so the buyers may not pay much.
The buyer is not looking only at cash flow but the market. Suppose an acquisition allows buyers to win in a multi-billion dollar market. In that case, buying the startup is a future option on that market and can fetch a much higher valuation.
The bump in share price post-acquisition can offset the price paid for the acquisition by a publicly-traded buyer.
Strategies for founders to make it work post-acquisition
For B2B companies, retaining the sales force for a long period can make the acquisition successful. The existing sales team of buyers doesn't want to sell new stuff. They want to sell the things they are already selling. Retaining the sales team allows continuity of relationship and sales growth.
If founders stick around for a long time post-acquisition, the odds of success increase dramatically.
Episode/transcript link: https://a16z.simplecast.com/episodes/ma-before-and-after-what-founders-need-to-know-pGSLvzdK
Podcast: Capital Allocators Podcast
Episode Name: Acquiring an Industry, with David Rosenthal and Ben Gilbert
David Rosenthal and Ben Gilbert are venture investors and cohost the Acquired Podcast, one of the better-known tech + startup podcasts. Each episode dives deep into a company or a transaction, and the podcast is known for the depth of content. They are interviewed by Ted Seides of the Capital Allocators Podcast, which has a strong niche amongst money managers and money allocators (including Limited Partners). This is part of the Venture is Eating the Investment Series that Ted is currently running.
Research Hacks
They suggest two interesting hacks: one, research articles published around the context of the event or transaction you are covering. Google lets you search within a specific date context. Often when you look at content written around an event, when there is no hindsight view (like the Instagram acquisition), you get a deeper sense of the context and background, as there is no narrative shaping around the content. “I think we very quickly forget the way that people used to talk about their companies and let the current way they describe the narrative influence how we remember the companies.”
Second, check out “criminally under-viewed YouTube videos,” where you have operators or founders give talks at conferences. “So, when you go, and you watch Gwynne Shotwell, the COO of SpaceX, give a talk to the aerospace industry association that has like a few hundred views on it, it's like an unbelievable way to get insight into SpaceX that's not in the headlines.“
Venture Capital in its early days
In the early days of venture, there was no concept of early-stage venture and late-stage venture. There was typically one or at most two rounds. The co was expected to get to profitability on that $1-2m and then IPO.
Also, it wasn’t $1-2m for 15-20% but more like 40%+ of the company.
How to think about venture capital
There are broadly two ways to think about investing. One is to see it as buying a series of cash flows - this is what public market investing is. Venture is a different paradigm, and the best way to look at venture is to see it as buying options. This gives you a lens to understand why we are seeing prices rising, for if you are buying options, then to an extent, at the early stage, the price doesn’t matter. You also want more shots at goal, which explains why we see frenetic activity in this space.
Some great quotes and insights about venture
“Venture capital has gone from being something that was wholly outside of traditional finance as we talked about, to something that is now much more like traditional finance.”
“There's an enormous amount of capital at every stage investing in startups. So, it's just capital, and founders now need to think about access to capital” in the way a public market company CEO thinks about it.
“Sequoia actually has this great saying about this. Mike Moritz adapted from Don Valentine, which is that, as long as Moore's law holds, every successive generation should be an order of magnitude bigger than the previous. “
Each VC needs a strategy for why great founders will take their money
David Rosenthal met Andy Rachleff (Benchmark, Wealthfront) once and asked him how to be a successful VC. Andy replied. "You got to have a strategy, and your strategy's got to be unique to you. That is your journey is to, both as an individual and as a firm, is to figure out why great entrepreneurs are going to take your money, and I can't give you the answer." I think that's the journey a bunch of these firms either have been on or need to go on—it kind of looks different for everybody.
Venture and crypto
Crypto comes at an interesting point in venture wherein a capital inflated context, you have an economic model where you don’t need as much capital as before. Crypto projects can cold start distribution by incentivizing users via issuing tokens that give them a share in the project.
Even as capital becomes less important, the brand becomes more vital. Because “there are so many projects and there's so much noise out there, even for people who are very steeped in the ecosystem, you need a signal to follow, both as an investor and as a participant in these networks. So, the signals become really, really, really valuable. No place is this more playing out than in the NFT world right now. NFTs, are projects that there's huge amounts of value transacting, but to anyone, even an expert, how do you tell them apart? ” The role of tastemakers (shares the example of Kevin Rose at True Ventures) and curators become vital.
Similarly, they share the example of Solana and how it has built a cult brand and following to attract developers and applications + projects that build on the platform.
Episode/Transcript link: https://capitalallocators.com/podcast/acquiring-an-industry/
Podcast: SaaStr podcasts
Episode Name: Building Marketing Channels Slowly to Achieve Massive Scale with Datadog CMO Alex Rosemblat
Datadog is a monitoring and security company for modern IT and cloud infrastructure. In this episode, Datadog’s CMO, Alex Rosemblat, shares his hard-won secrets on achieving critical marketing goals by focusing on one thing at a time. As a marketer myself, I loved Alex’s clarity of thought and practical how-tos.
Do only one thing till you hit the ceiling
Alex’s most important message is that marketers are involved in too many things and spread thin across various channels and campaigns. When you do a bit of everything, the odds of becoming great at anything decrease substantially. Thus, marketing should cut through the clutter and focus on doing one thing at a time - one campaign, one channel, one idea, etc., until it hits the growth ceiling and then move to the next thing.
How to decide which activity is going to be ‘the one’
Marketing leaders should ask the question - out of all the activities, which is most likely to convert to revenue? Many marketing activities do not contribute to the bottom line. These are supporting activities that smooth out the revenue-creating activities. So a fast-growing start-up should focus on the one thing that has the highest chance of bringing in new users and new revenue to the company reliably.
Your ‘one thing’ need not be digital marketing
Alex gives the example of Datadog, where he focused on sponsoring trade shows. Getting really good at trade shows in a startup took all the resources, and he didn’t focus on anything else for 18 months. Datadog became the top sponsor of AWS Reinvent, one of the largest global B2B trade shows. Its large presence with glamorous booth space and on-ground technical/salespeople led to many large deals. Eighteen months later, the marketing team hit the growth ceiling at trade shows. He wrote down a playbook to pass it off to somebody else to keep it going and started focusing on the next thing.
Start slow and then go all out
The key to scaling up one marketing activity is to start with a pilot to assess if the idea is working. Make some checks before starting the pilot:
Has the thought been put on paper accurately
What’s the campaign mechanism, and is there enough expertise on the team or with the vendor to run it
Have you instrumented the data to assess the campaign's success accurately
What is the minimum time the pilot needs to run to assess the success
What is the minimum amount to spend
Most importantly, what is the minimum result to know that the pilot is working as expected.
If the pilot doesn’t work, get rid of it. However, if it works, repeat it to ensure there wasn't some seasonal fluke or that you didn't get lucky. Once you feel comfortable about the campaign, throw everything at it to rapidly grow the campaign/channel.
How to manage the stakeholders
All stakeholders in a company have many expectations from the marketing team. So you must announce that you will de-prioritize activities that do not directly get new customers or new revenue.
If you're able to say We're not gonna go heavy on press relations, analyst relations. We're not gonna go heavy on content, we're not gonna go heavy on advertisement. Whatever it's going to be.
You need to have the management and the board on your side. The fastest way to achieve it is to establish that you're re-evaluating your activities using hard data to check if you're hitting your goals. The change from doing many things to doing one will increase the reliability of achieving revenue/customer acquisition targets. If you can align marketing goals to the company’s business objective using data, management/board can support the singular focus on one marketing activity.
Hiring in high growth marketing teams
A good rule of thumb to decide when to expand the marketing team is when marketing people turn down good opportunities because they don't have enough time to pursue them. As the team grows, coordination and communication become very important. It is possible that even with more people, the team is producing less because the team hasn’t been built for scale.
Hiring team member number 10 is the moment to step back & consider how to build the team for scale. Identifying & documenting ambiguous points, writing detailed playbooks, and rolling out team training programs are critical to scaling the team.
Episode/transcript link: https://www.saastr.com/building-marketing-channels-slowly-to-achieve-massive-scale-with-datadog-cmo-alex-rosemblat-pod-518-and-video/
Podcast: Farnam Street Knowledge Podcast
Episode Name: Interview with an Icon, Marc Andreessen
This was a fascinating podcast/interview. Marc is one of the great thinkers of our era, and this podcast gives you glimpses into how he thinks and how he learns (lots of reading!). Fun book recommendations here.
Tech influences society, and society influences tech
Marc’s thinking and learning are focused broadly around two buckets - the first, clearly given his day job as the leader at venture fund A16Z, is on new tech and how it influences and impacts society. The second, given the rising importance of tech and its emergence from the cultural periphery into the mainstream, is around how society influences tech. As we will see from his recommendations below, many of his readings fall into these two buckets.
The universal reaction pattern to new technology
A typical pattern to new (consumer) technology is its impact on kids. This is a pattern that goes way back he says. In fact, he says there is a three-step reaction process to new technologies, basis a book called Men, Machines, and Modern Times that he recommends. The three steps are
flat out ignorance/dismissal, initially
then, logical counter-arguments as to why it doesn’t make sense
name-calling
Societal reactions to new tech emerge from fear that tech will reorder the power and status structures that give gatekeepers power, he says. “All of the people who have achieved positions of power and authority in the world based on prior generations of technology are inherently threatened by new technology because new technology will upend the power and status structures, and then a new set of people will come to the foreground and take the power.”
Timing matters
For top-end venture funds, about half the companies they back succeed. Some of the failures are factors specific to the startup (team breaks up etc.). But in a lot of cases, it is because the startup is early. Marc says he doesn’t think there are bad ideas as such. “I think it’s just a question of timing and execution.” All of the failed ‘.com’ ideas of the late ‘90s, he says, were reborn later in the ’10s, and they have worked. When evaluating pitches, he says they try hard not to say, “Oh, this idea is stupid. This will never work.” They ask, is this the right person to bet on, and is now the right time to make the bet?
On the present education system
The present education system reflects the needs of the industrial age when the West was moving to mass industrialization. The same techniques that were needed for mass manufacturing were used for education. Over time the system has become self-reinforcing.
His preferred mental model
He asks what Elon would think? What would Peter Thiel think? And so on. Elon has a first-principles approach to thinking bottoms up, while Peter Thiel uses philosopher Rene Girard’s mimetic theory of humans competing as a prism to view society and interactions. Thus Marc forces himself to approach a problem from these lenses.
Books he recommends in the podcast
The WEIRDest People in the World - Joe Heinrich (highly recommended)
The Machiavellians - James Burnham
The Revolt of the Public - Martin Gurri
The Ancient City - Fustel de Coulanges (highly recommended)
Men, Machines, and Modern Times - Elting Morison
The Square and the Tower - Niall Ferguson
The Organization Man - Willam H White
Orwell’s Revenge - Peter Huber
Thinking in Bets - Annie Duke
Episode/Transcript link: https://fs.blog/knowledge-podcast/marc-andreessen/
Podcast: Greymatter
Episode Name: Full Screen Ahead - How Zoom Made Video the Pandemic Star
Greylock's general partner Sarah Guo chats with Eric Yuan, founder, and CEO of Zoom, as a part of Greylock's Conversations speaker series. I loved this episode because Eric is doing his life’s work at Zoom. He has spent over two decades in the real-time video collaboration space (Webex, Cisco, and Zoom), and Zoom is truly a generational company. Here are the key takeaways.
Paranoia as a competitive advantage
Zoom operates in a crowded space with low customer captivity. Zoom has thrived against much larger but complacent competitors by being paranoid. Eric carried over the ethos of ‘we’re just trying to survive here from Webex, where he was employee number 20. Even though he knew Zoom was a better product, he worried every day about survival till Zoom raised Series C. Even today, he thinks daily about it and channels his paranoia into an obsession for customer happiness.
Customer happiness is everything
Zoom survives and grows by adopting a beginner’s mindset - spending considerable time talking to customers and not getting comfortable or arrogant as an incumbent. Eric leads by example to orient the company’s culture towards customers. In the early days, Eric personally wrote to every subscriber who canceled and set up a Zoom call to understand the reason for the cancellation. Even now, he does 2-4 Zoom meetings daily with large enterprise customers.
Choosing the business model
Eric chose the freemium model over the free trial when he launched Zoom in 2012. He was constantly advised to switch to the free trial model as supporting non-paying customers is costly. But he decided against it because:
He was sure that Zoom was better than its competitors. So, he wanted everyone to try it out and share their product experience with others. The benefits of Zoom were more apparent over long term, for which freemium is better.
Zoom has built-in network effects. Freemium allowed Zoom to reach a critical mass of meeting participants faster and accelerated the network effects.
The metric Eric uses to describe Zoom’s growth was one that struck me - daily meeting participants! Talk about setting the right North Star metric.
Leave money on the table to build long-term trust
Zoom was launched at $10 per month. Customers were willing to pay up to $14, but Eric did not increase the price to build long-term trust with customers.
Life’s work doesn’t need macro trends
Zoom’s competitive advantage comes from Eric’s life’s work. He has been in the real-time collaboration tech since 1997, but he did not start because of a large-scale secular trend. His girlfriend in college was in a different city, and it was hard for him to see her. He kept daydreaming of something like Zoom so that he could talk to her.
Link to the transcript: https://greylock.com/greymatter/zoom-eric-yuan-full-screen-ahead/
Link to the episode: https://youtube.com/playlist?list=PLnsTB8Q5VgnUtQ2Yc32sqgCr_pm77YGZr
Podcast: Invest Like The Best
Episode Name: Gavin Baker - The Cyclone Under The Surface
Gavin Baker runs Atreides Management (yes, he is a Dune fan!), a crossover fund that is primarily tech and public markets-focused. Gavin is one of the most perceptive public market tech investors out there. He also has an ability to identify signal and pattern from noise, and even more importantly, articulate the perspective emerging from the distillation well. His podcast appearances thus are always a pleasure; they leave you with a clear understanding of what is happening in the markets and the tech world.
In this podcast with Patrick O’Shaughnessy (do check out Gavin’s past appearances on this podcast as well), Gavin covers the recent sell-off on previously hot internet stocks, calls out the coming softening in the semiconductor space (given inventory buildup), the rearchitecting of the venture world, and his favorite SciFi books (apart from Dune).
Software, Internet, and Semis are the three big sub-sectors of tech
There has been a significant sell-off in consumer-oriented tech growth stocks (e.g., Zoom, Peloton, etc.) that benefited from the COVID boom - the average internet stock is likely off 40-65% from its all-time high. As COVID wanes and its impact becomes less of a factor, the COVID premium built into these stocks is being unwound at a furious pace. A few stocks such as Google, Microsoft, Nvidia, Tesla dominated the market returns for NASDAQ, says Gavin. If an investor didn’t have a majority of their portfolio in these stocks, it was a hard, hard year. Gavin sees much less of an impact of the COVID premium unwinding in the software sector, as there was never a huge premium in the first place. COVID didn’t pull these stocks ahead of the trend like it did to the hot consumer tech stocks.
Gavin sees a huge buildup in Semiconductor inventory. The key business equation here is customer inventories must equal lead times. And as lead times rose due to demand (from chips for machine learning, autos, etc.), there has been a runaway feedback loop of rising lead times leading to a bigger demand for inventory, leading to more lead time, and so on. At some point, as the demand for goods declines (COVID bumped up demand for goods by $500b above the trend line; services fell $500b below) as the economy gets back to normal, this will correct, impacting semi stocks.
“You're now having people saying semiconductor companies should be valuing software companies. And no, they shouldn't. Every fund I know that's under 50 billion is frantically looking for a semiconductor analyst, have a lot of tourist to the sector. And it's just when these companies miss, they miss big.”
There are two parts to inflation
The first is supply-chain driven, and this will eventually correct itself. Auto itself accounts for half of the overshoot in core inflation as prices went up 50% in 18 months. The other is rising wage inflation, on the back of huge demand for labor. He feels this is not a structural trend and feels this will correct itself, as rising wages, reopening of schools, and waning COVID boosters to the economy (like the debt jubilee) bring people back to the labor market.
The venture / private market’s illiquidity premium
The venture market lags public markets by a few months; “…even into the summer of 2020, where you can make venture investments at the March, 2020 low just because the venture market is slower to adjust both up and down. And at the end of the day, if public market weakness or strength persists for six to nine months... I promise you, this weakness persists, private valuations will cool off.”
There is thus an illiquidity premium built into venture valuations presently. All of the assets they are carrying at the last mark to market are not going to be reset now because the public markets are cooling off. At some point, though, if the weakness in the public market continues, it will reflect in the private market. But for now, private assets are still carried at higher valuations on the books than what is warranted basis public markets.
The four horsemen of venture
Gavin sees the venture market unbundling and rearchitecting at a furious pace. Eventually, he says, four types of investors will remain:
Angel investors: many founders are replacing one fund with a consortium of angels who are experts on specific areas as well as capital providers.
Value-adding Seed through B specialists - Gavin refers to them as credentialing agencies a la Harvard, certifying them as high potential for later investors.
Growth funds with an operational focus that add as much value as the early-stage firms
Multistage funds are now competing with crossover funds. He says even Sequoia had to convert effectively to a crossover investor.
A Wizard of Earthsea, and The Culture Series
“I do have a book that is kind like a touchstone of sorts. Any time I go through a hard period I read it. It's a book called the Wizard of Earthsea, and it's by Ursula le Guin, who's one of my favorite authors. And I think the reason it's powerful for me as a touchstone is just at the end of the day the book is all about how ego is at the root of most failures. “
“Have you read the Culture series (by Iain Banks) now, Patrick? I don't let myself read more than one every two years. They are so good. They're right up there with Dune. That and Hyperion are probably the only works of science fiction that I would compare to Dune. But you must read them. They're so good, so, so, so good. “
Episode/Transcript link: https://www.joincolossus.com/episodes/42741941/baker-the-cyclone-under-the-surface
Podcast: 20VC
Episode Name: Snowflake CEO Frank Slootman on How To Narrow The Focus and Increase The Quality, Why Every CEO Should Feel Anxious, Why Performance Reviews are BS & How to Unleash the Best People in Your Business
Frank Slootman is the Chairman and CEO at Snowflake and is considered the GOAT of the enterprise software industry. In this episode, he talks to Harry Stebbings on how organizations can ‘amp it up’ (Also the name of his new book). I liked the episode because Frank has a no BS way of dispensing actionable advice.
Improve decision-making by spending more time on the problem
Unlike medicine, where diagnosis takes very long & prescription is straightforward, in business, we spend very little time in problem analysis and almost all the time finding the solution. This is counter-productive because better problem analysis dramatically increases the odds of solving it successfully. There are two ways to improve decision-making:
Make it clear that you are not going to rush to a solution and the team needs to lead with analysis
When people are rushing to conclusions, ask if the problem is well understood to begin with to take take the conversation back to the analysis stage.
Creating a sense of urgency in the organization
There is always some slack in the system that could be cut to move faster. Don’t agree to the next meeting scheduled in a critical project next week. Meet the next day and then meet daily. Go over the current information in these meetings. Not all answers will be available, but these meetings will create the right sense of urgency. A caveat here - Do not rush to judgment until all information is carefully analyzed. Applying a filter of ‘can this be done faster’ in every meeting, every project, and every interaction can create a cultural shift in the organization.
When there’s doubt, there’s no doubt
Doubt during decision-making tells you everything you need to know. The crucible of decision-making is that there should be no doubt about the outcome. For instance, if you are doubtful about a new potential hire, don’t hire the person. When there’s no doubt in the decision, the odds of making the right decision improve.
Performance management at Snowflake
Frank set up a quarterly performance management system at Snowflake. Everyone who is not in sales gets a conversation on money and performance with their manager every quarter. The system is designed to over-compensate the top performers and create high differentiation between top and poor performers. If the company meets its targets, the bonus money package is assigned to managers who allocate it to their staff. Frank mandates bell-curve distribution of bonus money and oversees it closely to ensure managers do not assign average to avoid confrontation.
Episode link: https://www.thetwentyminutevc.com/frank-slootman/
Podcast: Forcing Function Hour
Episode Name: Khe Hy, Becoming a Time Billionaire
Khe Hy left a successful career at Blackrock to become a productivity guru + life coach. He publishes the popular RadReads newsletter and teaches the ‘Supercharge Your Productivity’ course. Here he is interviewed by another productivity guru and coach, Chris Sparks, on his podcast Forcing Function Hour.
The pebble in the shoe
Khe heard this from his teacher Andrew Taggart. The pebble is something that niggles at us, but we keep walking, trying to achieve our work or other targets. We numb the pebble with work or other stimulants. The low-grade suffering gradually builds till there is a wound. “The pebble is the first clue of misalignment,” says Khe.
“Set up your pebble radar. So when you really kind of find the pebble, don't go light a joint. Sit with the pebble. And there's a few ways to sit. You can use different kind of journaling techniques, and oftentimes when you write it out it will become more clear to you what that pebble is.”
Align activities with your values
“…someone says, "My family is a priority," but then they're on a plane three days out of five every week and they keep saying "yes" to conferences and speaking gigs and all that.”
Values are essentially what matters to you. It is important to reflect on this and have clarity around what these are, for “it's much easier to align your activities to your values if you know what you stand for.”
One way to drive greater alignment towards values - if you can’t make a huge change - is to start with rituals, like cooking for the kids on weekends, as a way to spend more time with them.
The best productivity book according to Khe
“Whenever people ask me what's the best productivity book I should read?" I point them to Ernest Becker's, The Denial of Death. Because I think so much of our productivity, time-management, goal-setting, OKRs, all that self-improvement stuff, is this inability to grasp the fact that we're finite beings. And you can hack your way for like seven extra minutes using a text-expander, but that's not gonna change the fact that you and I and everyone listening is a decomposing body with time.”
Don’t wait twenty years to be happy
“You know what people want when they retire? The top three things they're happy about—this is from Teresa Amabile, from Harvard. When people retire the three things that make them happy: they don't have to commute, they don't have to go to meetings, and they get to pursue a hobby. And I always make a joke. You know what that's called? That's called remote work with a good boss. Why do you have to wait twenty years for that?”
Episode/Transcript link: https://www.forcingfunction.com/podcast/khe-hy-3
Podcast: Intercom on Product
Episode: Speeding back up when momentum drops
In this episode, Des Traynor (Co-founder, Intercom) chats with Paul Adams (Head, Product, Intercom) on the importance of maintaining momentum as the company scales and how speed is a competitive advantage. I strongly related to this episode as all good products get copied, and the ability to move and improve, iterate and innovate differentiates winners from also-rans.
A startup is a race, and speed is a competitive advantage
Unless your startup has an insane data moat, a strong network effect, or proprietary advantage (tech/Govt regulations), you are in a race to retain your customers. Any startup that hits product-market fit will get copied by its competitors. Once copied, your market leadership is only as durable as your ability to improve your product faster than your competitors can copy it. Speed is not an indirect competitive advantage anymore. If you can outperform your competitors, it becomes a core competitive asset.
Slowness is viral
When people detect a bottleneck in the system, they slow down as they approach it. And when they slow down, the car behind them slows down too, which means everyone starts to slow down once they realize that the operational cadence of the company is stepping back a bit. There’s no point in being the one moving fast.
How to build momentum in your company
Losing momentum is the ultimate startup killer. Momentum is mass times velocity. Velocity is not about shipping loads of random stuff very fast but how fast a company can execute its product roadmap in a specific direction.
Mass is the team, and the team needs to have a culture of moving fast. In every interaction and meeting, momentum-building questions need to be asked.
Why are we waiting for this person to come back from holidays before we make this decision? We could make it now and fill them in when they get back. Why are we blocked? What are we going to do to unblock ourselves? Why are we waiting? Who’s going to make this decision? When are they going to make it? What’s the minimum we should do to learn to unblock progress.
“Why isn’t this live yet?”, “Why didn’t we look at this?”, “Why is that taking so long?” The extreme end of that will start to sound pretty manic or harsh, but when everyone in the group understands what the desired outcome is, then people know that when you’re asking a question, you’re not trying to point fingers or play blame games – you’re trying to preserve or build momentum.
A cultural shift is required to build momentum
The leaders need to clarify that speed is critical in all interactions and messages. The leaders also need to be open to brutal feedback and ask everyone, “What is the biggest obstacle to speed in the company?” Honest feedback can be hard to take, but it’s essential to develop the type of culture that encourages people to criticize processes, leadership styles, or approaches constructively. This is especially required when teams are rapidly scaling up. New hires bring the cadence of their last place that may not match the need for speed in your organization.
Keep an eye out for slowness
The leaders at Inercom utilize a few proxies to observe any early signs of slowness in the company.
Intercom organizes Show & Tell sessions every Friday where teams informally demo their latest work. If a lot of work is not presented, it’s a sign of worry that it is getting bottlenecked somewhere.
High-performing teams evaluate their ability cyclically with questions such as “Are we clear on mission?”, “Are we clear on strategy?”, “Are we staffed properly?”, “Do we have all the right people?”. If collectively many ‘No’ responses start coming up, there could be bottlenecks in the system.
Episode/transcript link: https://www.intercom.com/blog/podcasts/intercom-on-product-ep16/
That’s it!
Hope you enjoyed this issue of The Visile.
Sajith and Rohit
thank you for doing this Sajith and Rohit. "The Visile" is definitely worth multiple reads and is one of those newsletter which i block time on my calendar to go through. thank you.
loved each word.
thanks sajith and rohit.