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KIND Founder Daniel Lubetzky on What Happens When You’re Naive Enough to Try

March 31, 20260 comments♥ 0
00:00Where did like the drive for peace come from?And and what are you doing to make that naive vision real?It started.And I mean that as a compliment, right?Yeah, right.But you know, no, no, I mean that.I know.I know.
00:17Which is the ones who succeed are the ones who are naive enough to believe that it's possible.I know.I was teasing you.We often think of being naive as a weakness, something we want to avoid.But what if naivete was actually?a superpower. Naivete describes the willingness to believe that things can be better,even when the world around us suggests otherwise. I firmly believe that naivete is essential foranyone who wants to build something meaningful in the world. My guest today is Daniel Lubetsky,
00:45and he proves this. Many people know him as the founder of kind, the maker of kind bars,but what really drives Daniel isn't just building a successful company, it's his belief that wecan leave the world better than we found it. And he's just nice.enough to believe it will happen, which I love.Daniel has since stepped away from kind and is now working on his next naive project,the Builders Movement, an effort to channel curiosity and compassion into solutions that canreduce polarization in our media, our societies, and indeed in the world.The conversation you're about to hear was actually recorded in December, before the recent
01:24developments in the Middle East. And because this episode touches on peace building and polarization,I wanted to share that context before you listen.I also reached back out to Daniel and asked what's been on his mind since we recorded,and he shared this message.In this conversation, he said,you'll hear about my life's mission to pursue peace in the Middle Eastand build bridges across the world,including through business cooperation and civic activism.
01:49I hope what you draw from this conversation, he continues,are tools to navigate differences between people and even differences within us,to learn to wrestle with complex issues that have no easy answers.This is a bit of optimism.I just met you for the first time five minutes ago.And I have to say from the minute you walk in, you exude warmth.You know, when you meet the founder of a company, in my world, the ideal brand is a reflection of the founder.Do you know any world where it's not that case?
02:29That the person's personality does not create the culture.It always starts that way.But success is the biggest obstacle.And then whether it's through outside influence or poor management or any number of factorsor just taking your eye off the ball or being distracted by different goals and objectives,very often it starts to dilute.And so when you meet somebody who has literally started a company called Kind,right and you and i've never met all i know is you started a company called kind and you walk in
03:02and you're like and you're just like yep you know it's a very nice experience when it happensand you just happen to exude warmth which is we should just acknowledge if you don't mind me sharingthat i came into a very warm place and you have a lot of fun gadgets and things that may beconnect very quickly with your warmth and there's a candle that you walk in it smells really goodand there's a little timely Meyer lemonsand there's a lot of fun things around here.I can tell you from experiencethat lots of people come in here
03:31and this setting is always the samebut their response isit's all over the place.So I'm going to receive your gratitudeand push it back on you.It's really you.The bar category is a freaking mess.There are,
03:52there are,So many players.I don't know how anybodydifferentiates themselves.I have friends who are trying to get into itand it's so hard.Was it luck of timing?Or is it something that you did
04:05that you've becomeKind bars are one of the gold standardsof the category.You know, you were one of the better knownbrands in the whole category.And people refer to other grain barsas kind bars even when they're not.That's a dangerous situation.
04:23but I get it. But when we were designing what became kind, we never thought of ourselves as a bar. We thoughtourselves as solving for a problem to help people snack helpfully. And even today, we tried to think ofkind as kind, not as a kind bar. But the deeper answer to your question is, I didn't know howhard that space was and I was lucky that I didn't think about it. And the more that I look backat life, a lot of the things that I've accomplished, I'm lucky that I wasn't faced because I didn't knowwhat the hell I was getting into. Rabbi Brand Lurie once told me, Daniel, you know what I love aboutyou is that you're so naive. And I got furious that he called me naive. And I'm like, why are youcalling me naive. I'm just determined and I'm not naive. I mean it as a compliment that you don't
05:27know what you don't know and that's why you try these things out. It took me decades to take thatcompliment. But it's very true that a lot of entrepreneurs would not pursue the paths that theypursue if they would know how hard it is. I think naivete is a very undervalued asset. Yeah. AndI fit that category also. I firmly believe that one of my greatest values is that I am naive. I was anidiot with an idea with no following, no commercial success of any particular note, you know,no book, no nothing, but had this wild belief that I could profoundly change the way thatbusiness worked. And that's all I had was the naive belief that I could. And if I stopped to think about itfor a minute, I wouldn't have done half the things I did.
06:21But I struggle with, you know, every word in addition to the word itself has a connotation,right?Like that's why, for example, I say that we don't have employees or what I used to run kind.I sold it recently.But I say that we didn't have employees and we don't have employees in any other organizations.I don't mean that we don't literally hire people that work with us.The word employee has the connotation of a master servant relationship.It's a hierarchy.
06:47A hierarchy that's a negative hierarchy.And for me, I want to have team memberswhere all of us are equal and are working together,not just because it sounds good,but because it helps empower people to challenge me.Language has power.And to debate with youand to create the structure where everybody can have an opinion.
07:04And so naive for me,I was having a conversation with Martin Varsavsky,who's a very dear friend of mine,who started like 12 companies.He's one of the very few people that I knowthat have created many,multi-billion-dollar companies from scratch in different industries.Very rare to do.
07:22And by the way, the fact that almost nobody has done it reminds me how much luck plays intoit.We all think we're so special.Lock plays so much into our success.But he was saying when we were talking about he's in his 60s and he's starting hisnext company.And I wouldn't say what it is, but out of respect to him because it's still in stealth mode,but why does he do it?
07:45Because he's trying to solve a puzzle.And so part of what entrepreneurs do is identify a problem, identify a solution, and then try to will it into existence.And I don't think it's got that much to do with the dimension of naivete.It's true that there's a lot that we don't know and had we known it, maybe we wouldn't pursue it.But I think it's a greater truth that we just have the will to try to turn an idea into a reality.and it's our personality that likes to solve puzzlesthat doesn't get dissuaded by hearing no.Maybe almost like you're turned on,
08:25but like, oh really?Now I'm going to really prove it.So I think it's a little more complex than just.It's true that not knowing how hard it would be helps you push through,but I think there's more to it than that.And I think you're touching upon it,which is that an entrepreneur is a problem solver.Right.
08:42And I think people sometimes confuse it,that an entrepreneur is a small business owner or a business owner.You know, a small business owner is a small business owner,an entrepreneur solves problems to your point.And you can find entrepreneurs in very, very large companieswhere they're mid-ranking people,but they're the ones who are pushing against the status quo,trying to solve problems to your point,
09:01looking at things slightly differently instead of just following the prescription.What I think is really interesting is like some universities,they teach entrepreneurship.And I've always found that curious,which is, is entrepreneurship a skill that you can teachor is it a mental defect that you choose to do somethingwith the overwhelming chance of failure,but you think that's kind of fun.
09:25It's a beautiful question that I've asked myself for so many years.Because for me, it's very much ingrained in my personalityand how I approach the world, which is,and I still think naivete is a compliment.You know, if somebody says you're naive, I'm like, thank you.You know, I don't know, and I kind of like that.because that means I get to start clean, you know?But going to your question about what makes an entrepreneur,
09:47can you teach entrepreneurship?I ask this question all the time because I try to search for myself.Did it come because I learned it from my father, from osmosis,from seeing him operate because he really was a consumer entrepreneur.And it sounds like you're that too.I always ask where the genesis of that came from.I don't know if his nurture or nature.I tend to think if I have to come.
10:11up with a theory that along the way when we're having formative influences, somebody is encouragedto think creatively and that there's a reward for it. Having asked this question thousands of timesof others, there seems to be something that happens in people's lives, in their early lives,where them thinking outside the box is rewarded and they're like, let me do more of it,and let me do more of it, and it might be very little steps. And so how can we,we teach young kids to take risks,to think outside the box,and to be rewarded for taking those risks.
10:49By the way, in the United States,if you look at it, there's a big picture as a culture,one of the reasons where the United Stateshas far more entrepreneurs than the rest of the worldis that we have a culture where it's okay to fall,dusted off, and stand up.In some cultures, in most cultures,if you fail, it is shameful and shame on you
11:09and you're gonna bring shame not just to you,but your family,And so people are like, okay, I'm not going to try.And it's so liberating to be okay with trying because guess what?If you don't try, if you're not falling, it means you're not trying.It's one of my favorite things about America, which is people put their failed businesses on their resume.Like they literally have on their resume.Oh, I started a business here.
11:31And they're interviewing for a job.I don't do that because it's too long.But they'll be like, oh, yeah, I started a business.We had it for about two and a half years and it didn't work out.People like, oh, okay, cool, cool.Like it's so not.And when I look for people, I love people that show that because it also shows, first of all,failures teach you more than successes, because when you succeed, you're not 100% certain what I think.
11:53But when you fail, you have to, if you are self-reflective, you're going to absorb the lessons.And so you stretch yourself more and it shows that you're comfortable with that opportunity.I love to tell the story.You talk about like it's in you from your upbringing, from your childhood.That's where it comes from, the rewards of taking risks and things like that.So one of my favorite things about America, and this is historical, and it helps you understandhow this country is so good at entrepreneurship and has so many entrepreneurs, which is we celebrateour independence on July 4, 1776.
12:26Incorrect.That is when we signed the Declaration of Independence.The Revolutionary War continued for another seven years.We didn't win our independence until September 3rd, 1783.But we said we got it.Let's go.And then George Washington didn't become president in the United States.Constitution wasn't ratified for another seven years, like 1789 or 1791, I can't remember the dates.
12:46But the point is, there's a full on, like, you know, nearly decade, like 15 years between when wesigned and celebrate our independence until we actually had it, had a constitution, had a president.I had never heard that.Yeah.So our independence day when we were recognized as an independent nation is actually September 3rd, 1783.But we celebrate the day we thought about it, not the day we had it.And that tells you everything about America.And it's an entrepreneurial spirit.
13:15It's that entrepreneurial, it's that entrepreneurial spirit with the dream is, is ground zero, not not the accomplishment.I love that.I love that too.One of the reasons I think other nations don't have the same quantity of entrepreneurs is, is all these things, which is we're dreamers.We love people who try, even if it doesn't work out.Like, we think that's great.So then the question it raises is like, is America?as a nation, and I mean this for the past 250 years, is America naive? Does it have, does it
13:46has, does it, does, does, does, does the nation embody the characteristics of the entrepreneur,the risk taking, the dreaming, the grit? But it is there a naivete to the nation? And can itlose it? And can it lose it? And, and I would argue it does have the naivete, like the naivete, likethe naivete that this one nation can help bring sort of, you know, democracy and capitalism toaround the world and we stood up to the Soviet Union's view of how the world should work andsay, no, no, no, we think there's a better way. And we think everybody should have this becauseit's pretty awesome. Now, whether it's misguided or true or not, you know, and how they went about it,these are all different questions. I grew up in Mexico. So I lived in Mexico from 68 to 70 to 84,
14:2816 years. And the narrative that a lot of Latin American people had around those times was of theUnited States as an oppressive regime that was taking advantage of that when I came toUnited States I discovered a country that I love so much and you know we we are at risk of losingsome of what makes us very special we need to not take it for granted but still rule of lawbetter than in most places democracy better than in most places kindness civility respectfree markets, freedom of expression, all of them under threat, but better than in most places.And it's a gift that I don't take for granted.And I do think to your point about naivete, when I arrived in the United States and most of my
15:20experience in the United States has been people that do the right thing even when peopleare not watching for the right reasons.Like which country in the history of humanity went and reconstructed all of Europe after World War II,liberated Europe. My father was liberated by American soldiers. So you had countless people whosacrificed their life to liberate another continent. And then after they sacrificed so much,they invested in the Marshall Plan in rebuilding Europe. And by the way, it paid off amazing forthe United States, right? It helped take us to a different level. But I do believe that it wasdone for the right reasons to prevent that cycle. Yeah, it was, it was done so to, to
16:03prevent them from rebuilding becoming our enemies again.Yeah.We spent our money to make them our friends.So you're no longer, you're sold kind.I sold last December.So I,are you worried that, who bought it?Mars.
16:18This is nothing to do with Mars.This is a philosophical question.But you controlledkind to be in your image,to maintain your values.Are you worried that it will break?Because I have so many founder friends who sold their businesses, whether they went public or they sold their companies or private equity took it over.And within a few years, the ingredients were replaced with cheaper, shittier ingredients.
16:50The culture was eviscerated.And some of them, the company ceased to exist.I know one right now, the company would just shut down.Because they get eviscerated and destroyed by these.I think that all the time.There's nothing you can do about it.There's some things I do about it still today to try to help them.But for example, you saw I came home and I came to your place and I brought you kind bars.
17:15I don't own a stake in the company, but I love Kind so much that I still give him out.And I negotiated my contract that I would continue having a lot meant that was important to me.I care a lot about Kind.I'm slightly less worried about the product integrity because I think.I think Mars is a sophisticated company that understands that if they do that they'll destroy the product.But it's very difficult with the best.And this has nothing to do with Mars.This is a philosophical question.
17:42It's actually the broader, more interesting question is the same thing that brings entrepreneursto bring something into existence that didn't exist.To your point, how did you dare have the hoodspat to try to create a kind bar in a spacewhere there were already so many other bars?By the way, most of the other bars are no longer in existence.the ones that were leading the waywhen I launched kind.You might remember the names,
18:04but they're, for example.Balance bar, power bar.They don't exist anymore?Minuscule.I haven't seen them in years.I mean, I remember Power Bar.They were kind of one of the OGs.Yeah, I haven't seen one in a long time.
18:16Every entrepreneur has that compunction to do thingsand will something into existence.And then they also, I don't know any entrepreneurthat does not think they can defy the loss of gravity.When we do that partnership, we think we're going to be the one that's going to suspend all of those laws and that we are going to be able to preserve everything.And the reality is that an entrepreneurial culture and a gigantic conglomerate, it's not easy.It's not easy.I think that it's not a question about the partners.
18:47The people that I work there are very, very high integrity.It is very difficult to preserve that entrepreneurial spirit.I like to invest in founder-led companies because I notice that when the founders no longer around,slowly, but truly you were askingat the very beginning about the founders,personality, values, and cultureimbueing the culture of the company.It's fascinating to me to notice
19:10I've met a lot of foundersand they look at their company's culturesand it's incredibly interestinghow much that person's personalityis in the culture of the company.But this is part of the problem with businessin the modern day, right?Which is these founders build
19:25these beautiful brands where there's very importantrules of integrity and ingredientsand all of these things.And these larger companies that buy these brands,they don't really care about the ingredients.They're buying the brand.I mean, we could list off the names, Aveda, B, B's.I mean, Aveda was this little Minneapolis company
19:41that built this wonderful brand.It was bought by a big company,and they've changed all the ingredients.And everybody thinks because it's Aveda,they bought the brand.They didn't buy the ingredients.But you even ask yourself,you know, why do you buy these products
19:55thinking that they're magicalbecause they were magicaland they're not magical.anymore. And you ask yourself, why would a big company pay so much money if they're not goingto preserve it? It's like this, because I noticed that up front from other observations, we'retalking about Power Bar and Balance Bar. So Balance Bar have a value proposition that they wereabout a balance between protein, carbohydrates, and fiber. So I think something like that, it hadlike a formula, it had three circles, whatever. And then it got acquired either by Kraft or
20:26And they gave it to a junior manager.And the junior manager needs to put their stamp.And they find out that around that time, organic is big.So they create something called balance organic.Now, balance the original bar is a very functional bar.It looks like astronaut food and it's very functional.And all of a sudden balance organic, nobody believes it.What is a brand?
20:53A brand is a promise.and a great brand is a promise well kept.And all of a sudden, you're doing the exact oppositebecause you have balance organicas opposed to the balance originaland they have nothing in common.And then they launch, they see kind,coming up with ingredients you can see in brands,
21:11they come up with one called, I think it was called Balance Bear.And B-A-R-E.And then they come up with the other onebecause there's the keto dietand then there's the functional diet and disease.And they have like eight different versionsSo balance bars.And the consumer stops understanding what the brand stands for.
21:29That business went from like $250 million to $50 million to my bet is that it's zero now or close to zero.I haven't seen a balance bar in a long time.And they trade every junior manager does the same sins.Every junior manager, they don't teach you this is the essence that you need to respect.They teach you, hey.Line extension.Line extension and make a difference and be relevant so you can get promoted.And these guys get promoted by short-term results.
21:56And so whatever mess they're creating in the long-term by destroying the brand,nobody notices it because by the time it happens, it's too late.But we kind of got to this point in American business that I find a bit depressing,which is that companies aren't built to last.They're built to be sold, right?Well, not all.Not all companies.I mean, your company, how many years did Kine?
22:19Because I would say that it was longer than most before they want to have.Yeah, but I wasn't being defensive about mine, but I'll answer mine, but then we should expand it.The interesting thing about my company is I started in 1993, what was then called PeaceWorks,and my investors came into PeaceWorks, but they didn't like the PeaceWorks aspect,so they spun it off. But that same, my employee identification numbers was 13-376-6029,because I used to write all the checks. I used to file all the tax forms. I used to do all the accounting,So I still remember my employer identification number from 1993.And I was doing the accounting, the bookkeeping, the collections, the deliveries, everything.
23:01Every job I was doing at the beginning.And there were two of us, then four of us, then two of us, then two of us and four of us, then two of us and four of us, then two of us and four of us, then before, you know, at hundreds.When I launched Kind, I did not, I personally, I promised you, I did not think, if only I could build something to sell it.It never crossed my mind.And that's why Kind succeeded, because Kind was just...Agreed.trying to fulfill that vision of something amazing.But just to your question, there are gigantic companies like the Amazons of the world.
23:28They do lose their way for other reasons.But they're not trying to sell.I think the stock market has a bit of that problem when you're trying to...I think one of the bigger questions is why do you always need to want to grow, grow, grow,because when you are growing, growing, and you need to demonstrate that measurable growth,I don't have a better solution.but eventually you're going to value optimizationand things that start destroying the brand in the long term.
23:56This is the real root of the question, right?And I think you're articulating it better than I did,which is it's not so much about the sale.It's about you're building it to sellor you're building it to go public.Or you're building it to extract money in the short term.And all the great businesses were builtfor the joy of building it,
24:18for the thrill of the build.And if you decide to sell it or go public way, way down the road, that's a differentconversation.But the number of businesses that literally, whether it's their own desire or the pressuresthey have from their investors, that there has to be this liquidity event.And that's the other thing that annoys me about the IPO, which is the whole reason of anIPO was it was one of the mechanisms available to an entrepreneur to raise money shouldthey need it.
24:42You can take a loan from the bank.You can raise money from friends and family.Or you can sell some of the equity of your company to the public.market so that you can raise money to reinvest. But that's not what it is. Now an IPO is a way tocash in, pay yourself and pay your investors, and it has nothing to do with the cash infusion to reinvestback in the business. That has nothing to do with it. And that is one of the downfalls, I think, ofthe modern American business, which is all of the companies, even the good ones, are built.So many of them, too many of them are built simply for the short term. And to make matters worse,
25:14a lot of the value that's being, quote, value that's being created is just financial.engineering, right? There's a lot of companies buying over other companies, squeezing everythingthey can, then leaving them near dead and then going on to the next one. A lot of private equitycompanies, what they do is, this is like the model that's been used over the last 10, 20 years,is they identify pool maintenance companies that are such a disrupted. The more fragmented,the more they see the opportunity. So they start buying all of the pool companies. There was anarticle in New York Times about the roofing companies. And they identified.Oh, there's tens of thousands of small business entrepreneurs.
25:52They're not finding synergies.Let's start acquiring all of them, roll them up,and then make them more synergistic,which means fire all the people,just hire a smaller group of people,use centralized branding.But they're not thinking about creating value.No.
26:08By the way, if you acquired all of themand you introduced best practicesand elevated the game, fine,but they don't want.They just want to turn it around.And so they buy them a 3x process.They sell them at six ex-profits.Then the next guy buys them at six-ex-profits,
26:23sells them at nine X-profits,and then they go public at 12-X-profits.But along the way, you're killing entire companiesbecause you squeeze so much value out of them,and then you no longer trust them because they're just worrying about the money.So you built, you said you wanted to make a food productthat was a healthy snack, right?There was a reason to build a company, right?
26:47And your business was the delivering of a healthy snack.That was the business.The companies that we're talking about, the private equity companies,their business is making money.Exactly.Like their only product is to make money,not to make anything that has value to anyone in the world.And if I hear another finance person tell me that the value they provide
27:09is they provide employment to an economy and help drive an economy,then why do you promote layoffs so fervently?They're completely full of shit.That is one of the imperfections of capitalism because free markets are very efficient.And the interesting thing for me, because I think communism, socialism, you see their imperfections and they're greater than capitalism.But capitalism, even conscious capitalism has a lot of problems that the free market wins.And the free market will always, efficiency will always win.I think this version of capitalism, this is not the capitalism that exists today,
27:46is not the capitalism that made America great.This is not Adam Smith capitalism, right,where the customer is the center of the value.And, you know, what Adam Smith said,which is the breadmaker makes the best breadto compete with the other breadmakers,and the butcher makes the best meatto compete with the other butchers,
28:03and the cheesemaker makes,and you get the best sandwich.Yeah.Right?And that's not what has happenedbecause of Milton Friedman and Jack Welch,which is they've completely changedthe capitalism that we have
28:14and popularized,Short-termism, the metrics of incentivizing.Milton Friedman popularized short-termism.Milton Friedman was an economist.I know Milton Friedman, but I didn't know about his short-termism.So Milton Friedman, so it's this combination of theories where Milton Friedman, this is what he wrote.The purpose of business, purpose, the purpose of business is to maximize profits within the bounds of the rules, which means make as much money as you can without breaking the law.And your point is, and that's a very low bar.
28:46Because the purpose of business should be to create value in the long term.That means respect the brand, respect the consumer, respect the stakeholder.That's how Kyn became an extraordinary success.By the way, Kynne created more value on multiples basis than any company I know of.Like from my early investors, like we almost didn't need capital.We grew, grew, grew, grew, because we're thinking with the right way.We created like 3,000 X returns for our investors.But just think about that, right?
29:16the current, the business, and you see it all the time,make as much money as you can within the bounds of the rule.So you see these companies do horribly unethical things,because ethics is a higher standard than the law.But I think your point...And they get dragged in front of Congress,and they all say the same thing.We broke no laws.
29:30But to take it away from just the moral compass,to take it into the business compass,your point is right,because by playing that game,in the long term, you're destroying value.Yes.By playing that game, people don't trust your brand,they don't trust your business,
29:45and they don't trust the system.And I think this is where we have to take a hard look at capitalism.And I'm not talking about throwing the baby out with the bathwater.But you see the rise of populism on the left and the right,whether it's Bernie Sanders or Mandani or Trump.It doesn't matter if you're on the left or right of the political spectrum.You see the rise of populism that is mistrustful of the institutionalized powers that be, right?And the status quo.
30:12And rightfully so, because we have traded.what Goldman Sachs used to calllong-term greed, whichwas totally fine, with short-termgreed. It's not so Pollyannaand idealist that there's no such thing as greed.The reason communism fails is becausehumans are greedy, right? But
30:29to believe in long-term greed, which is how can webuild a company that will outlast us for thegood of the long-term, you actuallymake really good decisions.And we, for some reason,seem to be okay with the short-termextraction at the expense ofthe customer, the employee, the
30:45environment, you know, our health. There's a very large food company who shall remain nameless.I went to this conference and they had the chief environmental officer of this company give apresentation on how much water they were saving and how much electricity they were saving.And it was a beautiful presentation about what they're doing. And because I'm a cynical bastard,I went up to the chief environmental officer at the end of the talk and I went up to themand I said, hey, love that you're saving water,love that you're saving electricity,love that you care about the environment, question for you.
31:22If I'm really cynical, I could say you're only doing itbecause it saves money, you know, less water and electricity saves money,but I'll give you the benefit of the doubt you're doing it for good reasons.But here's my question for you.I love that you care so much about the environment,but how can you put chemicals that kill people in your food?You have a chief environmental officer at your food company,How come you don't have a chief health officer?
31:45Just curious.And then the logic of what these companies say unravels.I think I want to strengthen what you say and then ask your question.When we took the fateful decision to bring a strategic partner,which is speak for saying sell a piece of kind,which is the beginning of the process where we ended up where we ended up.But when we're evaluating it,one of the companies that presented to us,
32:11literally said to us, we love that our products don't kill you.They don't make you sick.That was their standard because they were not helpful products,but their standard was like, at least our products don't kill you.At least our products don't kill you.I swear to where that was their definition of success.When we debriefed that, I mean, it was one of the many momentswhen I told my team, what are we doing?
32:31But anyway, that's a different conversation.But I have solutions about how to handle the problems of populismin the civic space.I've thought about it in the private sectorand I have not come up with them.Do you have solutions?Like the point that you point out toabout short-termism
32:51and short-term value extraction,other than teaching people to be smarterand to build for the longer term,do you have any structural or any other?I think it's a generational answer, right?Like it was the 80s and 90swhere they were experimentingwith short-termism,
33:08you know, incentivizingexecutives with equity, not performance of the company, layoffs in an annualized basis to balancethe books. I mean, this is all 80s and 90s. Prior to that, there was no such thing as masslayoffs in the United States, right, unless it was for existential reasons. Like, we're goingout of business, you know? It was popularized in the 80s and 90s, and then that style of managementwas taught and continues to be taught in business schools, and that's what got you promoted. And sothat's why it became the standard, because a generation was taught to run a business that way.I think now with the rise of populism and the cynicism that young people have, that there is a generational shift where I think young people are okay making slightly less money to do the right thing.
33:51And I think that they like companies who are willing to make less money this quarter because we're going to make the right decision for the next five years.May I challenge you for a minute?Yeah, please.We agree 100% on the fact that if you build a brand for the long term and do the right.for the long term.That's how you create enduring valueand where you're doing for a third term.You're actually destroying value.
34:12We agree on that.On the thing about the layoffs,I ask myself this question all the timebecause I notice it happening.I get proposals for me to invest in these roll-ups.And I struggle because, to your point,there's no value being created or added.My answer is, well, why don't we do
34:29to the extent that we consolidate,let's make it in a positive way.We'll create a brand that people can trustand help empower the small business entrepreneursfor them to become stronger and be part of the familyand create the culture to do that.I struggle with that.But broadly speaking, unlike you,
34:45I don't oppose layoffs because I notice what happenswhen industries are not efficient and that doesn't happen,then your lunch will be eaten by others.In other words, what's happening in Europe,Europe resists the layoffs and it's slowly but surely going to die.Because that's what I struggle with.competitive market system, that at some point, somebody else is going to be, and the Chinesemost likely will be more ruthlessly efficient, and how are you going to compete?
35:19My friend Bob Chapman would say that an over-reliance on layoffs is proof of a poor businessmodel.100%.Right?And so it's not that I'm against layoffs, because sometimes companies are stupid and over-hire.I mean, we saw it during COVID, the number of businesses that because, you know, and theythought this would survive and last forever.And so they overhired, the numbers corrected, and there's no way you can sustain the business,
35:44right?You point is you shouldn't have layoffs as your business model.You shouldn't have layoffs as your business model.And to embrace layoffs on an annualized basis, you know, and my standard line is, you know,we missed our arbitrary projections.So in order to make the numbers work, you get to lose your job.Our arbitrary projections, we're profitable, not as profitable as we promised.Well, you're going to have a lot of not fun in the coming years.
36:07And people ignore the ripples.Great.You got a little, one of the companies, a big tech company, made the announcement that we'regoing to lay off 10,000 people, going to do 1,000 people every month.How much productivity do you think there was that year?The stupidity of even that strategy.And we incentivize HR leaders.An HR leader is supposed to be the voice of the people at the desk of the sea level executives.
36:29The voice and the champion of the people.Nope.We incentivize too many HR leaders.They get their bonus for doing the layoffs efficiently.And we eviscerated even the concept of what the value from resources is.Getting very heated.I agree with what you said in the business world because it reminds me of why,like something that I observed in the market world that bothered me
36:55and that I think we did differently,that is connected to your same philosophy is in most of corporate America,there is no trust in the system and they fire you,which means you're given two weeks notice,but you're shown a box that you put in the stuff in your boxand you're shown the door because you're not trusted to be there.And I observed there was a very, very big problem in that model of kindbecause everybody that took the struggle to bring into our team
37:30and taught them our culture and they taught us,and we worked and built together.Maybe in my entire existence,there were three examples out of thousands of people that I hired.There were, it actually merited showing them the doorbecause they engaged in illicit behavioror they really crossed the line that really engaged in stuffthat was completely inappropriate.
37:56But it's three people out of thousands.Yeah, of course.In the vast major situations,the reality is that most times when things don't work hardis because you fail to communicate with your team memberand that because you fail to create a bond of trustso that people can communicate one another.I don't know if you found this to be true,
38:14but almost always if you share feedback early on,the person can course correct and fix it.So the essence for a higher order work environment is to create trust.Because if you create trust, you can create open communications.If you create open communications, you have much less likelihood that things don't work out.That means, for example, that instead of firing people showing the door, we had a systemat kind where if you were planning to leave or if we were planning to let you go, first you wererequired to have a conversation and let the other person know transparently.
38:51Think what that takes.It takes enormous amount of trust.If I'm planning to leave, I need to trust you that you're not going to do something bad with that information.I'm telling you, I'm living in one yearbecause I want to go study for graduate schoolor I'm going to get married and move somewhere elseor I want to retire.You don't want the company as a consequence
39:09to cut you off early.Most big companies, when we try to introduce this methodology to them,they do the wrong thing with that information.They're like, oh, they're leaving.They're no longer valuable to meand they're not going to be loyal to meand they're going to sell my secrets.Let's fire them within two weeks.
39:23So then the next person won't share that with them.Sure.So instead, you create a relationship to usand you do it both ways.It was very weird.At kind, every single team member was an owner.Anybody that was there more than six months was given stock options.If you were the janitor or the person to the company, everybody was an owner.
39:42And with that ownership, came the responsibility that if you chose that you were going to leave,not only were you needing to give us the notice, you needed to replace yourself.You needed to find, we trust you enough that if you want to leave, you need to find your replacement.It's very hard to achieve that.But when you trust the person,because you hired them in the first place,they are doing the job,and it elevates the culture
40:05so that everybody's in there for one another.And most times it worked.Almost always it worked.Not always, but almost always,the person had that responsibilityto pass the baton,to train their replacement,think about how much more synergies you get.
40:19If you achieve that higher order of functioning,instead of you firedand everybody doesn't trust each other,you're hiring your replacement,you're overlapping, and then if you decide that you're going to leave, you can ask for a letterof reference, you can ask for a very warm testimony and endorsement.And so that was what we aspired for.My direct reports, guess what was there, notice they needed to give me?
40:41What?Two years.Two years notice.Like John Leahy, the president of my company, like for the senior people that reported to me,it was two years.And in exchange, they had undying loyalty from me.Yeah.And if I ever was unhappy, that meant also.
40:56I can't fire people. I have to talk to them, talk through them, work it out, try to work it out,and do everything possible to make it work. And if not, create a transparent processso that they can start looking for an opportunity while they're still finding their replacement.Let me change tax here. You're fascinated by peace. I mean, the original brand name of the companywas Peace Works. And you are committed to Arab-Israeli peace as well in the Middle East.We're working really heavily on it right now.Where did that come from?Where did the desire to the drive for peace come from?
41:34And what are you doing to make that naive vision real?It started when I mean that as a compliment, right?But you know, no, no.I mean that.I know.Which is the ones who succeed are the ones who are naive enough to believe that it's possible.I know.I was teasing you.
41:53I appreciate it very much.When I was nine years old, my father started talking to me about what he went through in the Holocaust.He was a concentration camp survivor and he shared horrible things that I think I impacted me more than I realized.Only in the last few years I've processed how much those conversations.Nine is young.Yeah.My mom said, Roman, why are you telling him this stuff?He's nine years old.
42:21And he said, you know, he needs to hear this.I was nine years old when I needed to live through it.He just needs to hear through it.And so he was nine years old when the war startedand 12 when he was sent to concentration camp,15 and a half when he was liberated by American soldiers.And what's interesting about him is that in spite of the horrors of what he went through,he weighed 70 pounds and was six feet tall when he was liberated.
42:48Wow.And there's a YouTube interview of him, Roman Lubetsky,You can look it up on YouTube, and it's very, very interesting.But what's fascinating about him is that in spite of all of what he went through,he just saw the kindness in others.And he lived his life with kindness,and that we named the company Kind after him.He passed away the year that we launched Kind,
43:14which was a very interesting, difficult year for us, for me.Ever since I was a kid, having experienced that in Mexico,I promised myself that I would do what I can to prevent what happened to my dad from happening to other human beings.And I thought that my singular mission back then was to make peace in the Middle East.I thought that's how I was going to contribute, that the way I was going to build bridgeswas by bringing Israelis, Palestinians, Jordanians, Egyptians and Turks together.And when I was in college, I stumbled upon the field of the business of peacemaking, of how you can use commerce to bring people to trade with one another.And when they trade with one another, it shatters stereotypes because they're interacting as fellow human beings.
44:07They're breaking breath together.And they're common interest.And they're common interest.They have cementing relationships because they have vested interest in growing.together. And so I decided after law school to start PeaceWorks, a company that had Israelis, Palestinians,Jordanians, Egyptians and Turks trading with one another, run by a confused Mexican Jew,getting all of these guys together, running a brand called Moshe Pupik and Ali Mishmumkin's world-famousgourmet foods. I still don't know why it didn't work out. I made all the mistakes in the world,
44:42but I was so enamored with the concept, but I launched eventually.in Sri Lanka between Sinhalese and Tamils,in Indonesia, between Muslim, Christian and Buddhist women,in South Africa, in Chappas, Mexico.And the concept was always to use market forces and Americansas I'm a very romantic American,to use American optimism, to use your words,to bring people together and help them discover each other's humanity.
45:09And that's been a big part of,and it's still today, after this horrible, painful war,we're now working really hard at PeaceWorks 2.0, trying to find a way to help the people in Gazaand the people in the envelope on the Israeli side improve their lives and start building back.Working together.Right now the step is just give them a sustenance and a better future and help them take baby steps.I think working together today is too much of an ask.But as an aspiration, I want to align incentives so that Palestinians,
45:47Palestinians, Israelis, other Arabs, internationals, everybody can work towards the same goal.Well, what I love is you're taking everything that you've learned and you know about building a remarkable brand and a remarkable company like kind.And you're applying that to the social good and it's all the same thing.And so, you know, I think anybody who doesn't bet on you is naive because there is empirical data here.here to show that you actually know what you're talking about. And if anybody can succeed inactually producing a lasting peace in these conflicts that seem intractable, I think you're the one.So this is pretty cool. Thank you. So it's the reality is that we have no other optionbut to figure it out. There's a lot at stake. And so I, I appreciate you saying that. But even more
46:45important we need to give agency to everybody listening for them to understand they have to bethe ones leading the way you have the you have the most popular ted talk out there i have one that'snothing like that but i i did experience something interesting when i gave mine and i talked about howeverybody in this room when i talked to the tech community understands this problem of growingdivision and and rigidity but they see it on the other side they don't see it happening to them and their sideOf course.And that's, I think, the opportunity that we all have to understand that this is a threat against all of us and all of us need to join.Well, we need to get over this ridiculous notion that I'm right and they're wrong because everybody thinks so on the side of right.
47:27Yeah.And both sides think the other side is wrong.And so until one can accept that I am part of the problem and they are part of the solution, you know, the reason for a peace movement is you can't make peace with your friends.You can only make peace with your enemies.And so to accept that we are part of the problem and they are part of the solution is the only way to arrive at peace because you can't get to peace with one side.I notice sometimes that somebody that I respect a lot does something wrong and a tool that helps me enormously that I realize that it's a super good tool.Every time I find that, I ask, how am I also doing that problem?Like, for example, I was with a person that I admire enormously.
48:12and I asked for time with him to consult on an issue.And he started talking nonstop.And I couldn't get an award in edgewise.And I have very important things to share that could have calibrated his feedback to make it even stronger.But it was a little senior to me.And so I just listened.But I started reflecting, oh, my God, I'm that person 99% of the time because I'm with team members of mine.And I need to, if I only spoke 10% less, the quality of my feedback would be,
48:42infinitely greater. Every time I notice that somebody else did something suboptim, I'm like,oh my God, I must have the same problem. And I try to detect it and find it. And it's hard.It's hard to find. It's so easy to observe in somebody else when they're doing it wrong.It takes harder work for you to find it in yourself. But that's how we grow.It's good advice for peace talks. It's good advice for relationships. It's good advice forcorporate culture. And I'll go back to what I said before, which is even in a relationship,You know, if you want your relationship to work or you want your corporate culture to work and you want your work relationship to work, you know, I am a part of the problem and they're part of the solution.You know, that's your mantra versus I'm right and they're wrong or I know and they don't and they need to listen and I need to talk.
49:26If you just flip all of those, I love what you said.I could do better at that, which is talk 10% less, listen 10% more.No, you're a very good listener.Oh, you're very kind. You've never worked with me.I talk a lot. I think out loud. That's part of my challenge.And so for me to process, I need to say things.And very often in a meeting scenario, it comes across as me doing all the talking, which it's not.It's me thinking.
49:52And so I have to learn that it's okay to process out loud, but I can process out loud at the end of the meeting, not at the beginning.Or create the permission structure, because I have the same issue, but I haven't processed that as well as you have.Create the permission structure for people to understand that just because you do that doesn't mean.Yeah.I say very frequently, I'm thinking out loud here because I don't want people to think that I'm giving instructions or making conclusions.Kindness isn't just one of your values.It's the foundation of everything you've built.Was there a moment when someone's kindness towards you made a profound impact?
50:26All the time.But I feel bad to come up with a really silly example right now.But just yesterday or day before, for some reason, I was having a kind of,of like not a great moment or day.I was in a, how do you say, in a rot?And one of my team members, Taylor, just said something really kind to me.And it just elevated me and made me sore.And my reflection, again, to the point that's like when I noticed, like, oh, my God,
50:58I don't do enough of that because I'm always running, running, running, and I don't takethe time to thank team members and to elevate them.And if it had such an impact on me and I'm the boss,if I could do that for my team,how much more effective would we all be?And so I think part that every one of us has in our livesto make this a better world is insane.And oftentimes we forget that you may be walking on the street
51:30and just look at that person's eyes and give him love and smile.And at a minimum,you've given them something positive.But sometimes that person has really dark thoughtsabout what they're going to do with their lifeor somebody else's lives.Sometimes you being kind to that personcould save that person's life or somebody else's life.
51:52You never know how powerfulthose tiny, tiny little interventions.Interventions of kindness,how big they can play, much bigger than you realize.All of us have so much going on.You often say that business can be a force.for building bridges, what responsibilities do you think entrepreneurs have in a divided world?The way I think about is everybody, I don't want to be preaching.
52:16Everybody has to find what gives them meaning.For me, in this world, I find it imperative to build bridges because I don't want to inheritto my children something worse than what I found.I feel like our generation, and I think I'm a little older than you, but I actuallywere in the same age, I'm 57.but it's insane how good I've had it.And in the last 10, 20 years,I feel like things are moving in the wrong direction.
52:45And I owe it to my children and every entrepreneurto future generations to live the world better than you found it.So I just think it gives you so much more meaning,so much more agency, more purpose.I'm not doing it to be preaching.I'm like it is more fun to be solving these problemsand to try to help make this a better world.And so that's what drives me.
53:06I think one of the things that you have an advantage of is you have a father who told you his story.And I don't mean because it's a traumatic story that he went through.But there's data that shows that when we understand something about our ancestry or even where our grandparents came from,that we don't see ourselves as beginning now.We see ourselves as continuing something that somebody began before us.The data shows that people who have a sense of where they come from make better long-term decisions.Because people say, oh, I'm doing it for my children.no, that never happens. No politician or nobody's doing it for their children. They're doing it for themselves.
53:39But when there's someone who came before them and sacrificed for them to get to this point, they don't want to let down the person who came before them and they want to uphold that honor.And so, you know, that your father sat you down at nine and said, I need you to know where you come from and what I did before you.You feel this responsibility to your own history. You cannot let your father's legacy.go in vain. And I think to teach people where they come from and to uphold that legacy,I think is vital for us to make better long-term decisions. I love that. It's very true. And ithelps not just for that. It also helps for young people to reach good decisions about their healthand about their well-being to understand that they have something to give and a responsibilityto give it and that they need to be mindful about how the decisions they reach.
54:29Daniel, thank you so much. A bit of optimism is a production of the optimism company.by our team, Lindsay Garbenius, Phoebe Bradford, and Devin Johnson.Subscribe wherever you enjoy listening to podcasts, and if you want even more cool stuff,visit simic.com.Thanks for listening.Take care of yourself.Take care of each other.