a16z Podcast - Boss Talk with Ben Horowitz

Episode Date: February 28, 2021

Boss Talk is a  weekly live show on Clubhouse, where a16z cofounder Ben Horowitz and Databricks CEO Ali Ghodsi discuss CEO stuff, leadership stuff, management stuff… you know, boss stuff. Here we share the second installment; in it, they explain Conway’s Law and shipping your org chart; how to transition from a boss to a boss of bosses; and their predictions for Silicon Valley post-pandemic.For more episodes of Boss Talk and other conversations from a16z, check out our separate feed, a16z Live.

Hi, and welcome to the A16Z podcast. I'm DOS, and this episode is Boss Talk with A16Z co-founder Ben Horowitz and Databricks CEO, Ollie Goadzee, all about leadership and management. Their conversation originally took place on social audio app Clubhouse, where they host a live chat every Tuesday at 5 p.m. Pacific. You can find more of their and other conversations on our separate feed, A16Z Live. Here, though, we're sharing the second installment of their show. In it, Ben and Ali cover Conway's Law in shipping your org chart, making the transition from being a boss to a boss of bosses, Silicon Valley post-pandemic, and more. Okay, so today on Boss Talk, we've got it, we're going to have a special beginning because many of you know my background, because I wrote a book, which went through my whole background, but you might not know Ali's background as well, and his is even more interesting. And I think that it's really relevant because, you know, when you get into it. to these discussions about how to run an organization and how to make decisions and all these

things. They're all very situational. There's no kind of one way to do any of it. And it's really important that you know where people are coming from to know what to do with what they're saying. So this is going to be a kind of a very kind of important basis for the show. So Ali, could you take us back to LeBeran and your uncle was one of the founders of OPEC Yeah, wow, I didn't even know you remember that

Yeah, he was, yeah, yeah He was, you know, one of the like five oil directors And, you know, they, you know, that part of the family had it well But actually not so much on my parents side they were sort of in opposition and I was born right around the revolution and you know pretty common you know in 1979 there was you know the eyeballs took over yes and the Shah the Shah was kind of exiled by uh you know with help of the United States

interestingly yeah yeah he came over here and you know soon died in cancer uh you know the molas took over my parents were in opposition and actually what was interesting and actually what was interesting thing is that they, around that time, the Iran-Iraq war started, which put the country in a really tense situation because suddenly, like, you know, there was this revolution, these people have taken over the country, but they, you know, they're just scrambling to figure out how to run the country, the Mullahs. And suddenly they're being attacked by this foreign nation. So, you know, so it was sort of take no hostages kind of situation, especially when the Iraqis started bombarding Tehran.

which was where I was living at the time as a kid. You know, the aerial attack started against the sort of capital of Iran. You know, everything just changed, right? It was like sort of suddenly the government was sort of like, you know, we're not messing around. Like, this is wartime. And your family ended up being, you know, one of those that was not going to be a hostage. So tell us about that. Yeah, I mean, look, so first of all, it's like the war is going to.

on in the background. So like, you know, every now and then, you know, at nighttime, um, the sirens go off. So you hear this like sound, and then, you know, our house were actually overlooking all of Tehran. So when you could see the city. And it's kind of interesting. They actually shut off all the, all the sort of electricity in the whole city when the bombardment starts so that the fighter jets can't find, find the houses. You know, and, uh, and then, you know, your parents scrambled, they freak out to tell the kids to get under the tables and, you know, and they turn on candles and they turn, tune in on the radio to see what's going on. And, you know, and they'll tell you like, you know, which locations are being attacked. And, you know,

quite a few times, actually, we had bombardment in our neighborhood. One night, actually, I remember, it felt like they actually hit our building. I felt like the whole building just collapsed. But it didn't. It was actually, yeah, it was actually a building, you know, further down in the block. And you were a kid, you were like five, and you remember that, yeah. Yeah, four or five. You remember very clearly. The thing you remember very clearly is your parents who are always super cool and calm, just freaking out, like crying, screaming, running around, like losing their shit.

And, yeah, so Windows Smash. I felt like they hit our building, but they actually didn't. It was like a building next door. Next day we walked outside. The whole building had just collapsed, the one next to our house. to me, I thought it's a skyscraper, but probably I was a little kid, so it was probably just a three-story building or something like that. But, you know, it's collapsed.

You have all these people like crying, you know, there are all these women crying. You know, I remember I asked my dad, you know, why are crying and said, you know, and they lost their sons, you know, and they're sitting there crying and there's rumbles and so on. So that's going on in the background. So as a result of this, the government started sort of hitting back on any opposition that was in the country, right? know, because they were not messing around.

This was war time. And my parents happened to be in opposition. So, you know, so very suddenly, you know, the going got rough kind of against any opposition group. So when you say the going got rough, what happened? Well, I mean, like pretty much anyone that's in the opposition, they would capture, right? And either jail or kill or, you know, they would disappear. So basically one day, one of these, so they had this. you know, pretty ghetto techniques back in the day where they would sort of call each other

to see if, you know, everybody answered the phone. If they do, you know, you're fine. If you're not, they assume you've been captured. So if someone doesn't answer the phone, you just assume that they've been captured. And you assume that they won't tell anyone anything for 24 hours. So you'll, you assume you're safe for 24 hours. But after 24 hours, it's kind of, you know, anything goes. Anyone can say anything. So you're no longer, your location, nothing is safe. so this one woman didn't answer the phone call at 5 p.m. one day and and you know my parents were like that's it we got to we got to get out like we got to need right now get out it does well yeah so they said you know we so you know 24 hours to get out of the country um I remember they had a

kind of event not event they sort of told their friends come over take whatever you see in the house because we're like we're just leaving and you know and uh and you know and you know They got the paperwork and so on, and the next day we were on a flight out of the country. So just like that, it's, you know, that whole kind of world you're living in is behind you, and you're in a new country. Amazing. And then tell me about the flight, because there was something, I remember a thing with makeup on the flight or something. You have a good number. Yeah, a good number.

Yeah. I mean, the interesting thing is, so you get on this flight, all the women have, you know, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's. Islamic Republic, right? So all the women have, like, you know, they have their headscarf on and all that, right? And, and then they announced suddenly, like, you know, that we've left Iranian, you know, airspace at some point, right? And immediately you see all the women in the airplane, you know, take their headscarves on, pull out their mirrors and start putting on lipstick and makeup, you know, like, you know, all together. Like, it's as if it's like synchronized, you know. That's incredible. So, you know, so that was, that was a.

But, you know, actually my uncle stayed behind and said there's nothing, and, you know, eventually he got, you know, captured and killed. So it was, it was a serious, we actually had to leave. And it was actually wise of my parents to actually act on that. So, you know, so suddenly we were in Sweden. And then you landed in Sweden. Yeah. And not in the nice neighborhood of Sweden. Yeah, I mean, first of all, I guess type of choosers.

So, like, my parents wanted to end up in United States. But, you know, when you're, you just, you know, you have 24 hours, you go wherever you can. get in yeah uh so end up in sweden um actually initially we didn't actually have i haven't actually told you this but initially since they didn't have that much money with them because they just left everything um they started by just uh living in these um dorms so it was like these dorms with uh you know shared kitchen and there's like you know a bunch of 18 year olds running around in college yeah and then there's this family with two kids you know really really suspect you know with with, you know, two little kids and, you know, and, you know, dad's got a big mustache and, you know,

there. So, you know, that's how we started. You know, we left, I think we lived for a month or two like that. They evicted us eventually, right? They're like, you know, you're not students. You can't live here. You know, get out of here. So then I found another dorm. So we moved into another dorm. And so we lived there for a little while. I think I, uh, I managed to sort of destroyed their communal TV in the common room there. So we got evicted again. So we kept getting evicted

for like two years like this. And eventually they found us a place in the suburbs. And in Sweden, the way it works in the suburbs, at least many of the suburbs are those are not so good neighborhoods. Yeah. Yeah, yeah. It's funny. So this was confirmed by QD3 who's Quincy Jones' son who also grew up in Sweden and he was like oh yeah

Ali grew up in the bad neighborhood yeah actually it turns out we were very close actually we're not far away from each other though we're probably five years apart but yeah so you end up going to school there and it's like suddenly it's completely different right so I went from you know in Iran I was in private schools and you know you know top end posh here you're suddenly in a ghetto you know and you know people are bringing knives to school and there's knife fights and there's police and all that. So it's sort of, you know, it's a big shock to the system. Like all the stuff that worked back over there, the rules are completely changed now.

It's, you know, you don't even speak the language. So, you know, you have to learn to adapt to that. So that's how kind of the transition happened to Sweden. And then there was the, you know, kind of a racism as well, what they call you black tops. Blackheads. Yeah, black kids. Yeah. Yeah, yeah. In Sweden, they had this expression, blackheads for people. I mean, you know, because most people are blonde. So, you know, the immigrants, many of the immigrants came actually from Turkey or from other parts of the world. They, you know, have black hair. So they were called blackheads. And, you know, all the immigrants live in these suburbs. And then the nice neighborhoods are like in town or other places. So, you know, there's like heavy tension. It's actually not very dissimilar from here in the United States where, you know, those of us who are out there.

in the ghetto kind of there was like sort of us versus them you felt that you really not you're never really part of society um and you know police brutality yeah you know there's like you know you don't trust the police um you don't uh you know you know you're not going to get a job you know it's not going to be fair you know it's like sort of there's this whole and you know a lot of it is also like you know it's i mean it's a lot of it's true a lot of it's also self-inflicted because you know you grew up there and, you know, it becomes a self-fulfilmed prophecy. So, so yeah, that was, that was the sort of probably my first 10 years of my life in Sweden.

Yeah. No. Amazing. And then, I mean, what a crazy story. So you got into the technical university there. You somehow made it here to Berkeley. Yeah. So, yeah, you know, so, you know, eventually got into computers, eventually got in, you know, and, you know, eventually, you know, was able to get into, you know, Ph.D. program and, you know, just geek out on computers. And, you know, you kind of, you know, soon find yourself in a completely different world. That's very different from, you know, the suburbs you grew up in. And different type of people. And, you know, they have different, again, they have a different value system and they're doing other things and you learn from them. And you adapt.

to that environment, and suddenly you're an academic. Suddenly, you're academic, and then just as suddenly you're CEO of a company. Yeah, I mean, it didn't happen like that overnight, right? Well, there are no overnight successes. Yeah, as you know, I mean, you saw the Databricks story from the very beginning. But, yeah, I mean, we were at, you know, UC Berkeley, and we were lucky because Silicon Valley for tech companies were giving a lot of funding to UC Berkeley. mostly because they wanted to hire the talent.

And so we got to see the projects they were working on. And we saw that they were doing amazing things. Things are very different from what the rest of enterprises or even people in academia were doing. They were basically, they figured out, they had just figured out how you could take classic machine learning AI algorithms from the 70s that everyone knew were broken and they don't work. I mean, everyone in academia knew they don't work.

And they couldn't do anything. Yeah, from the 70s. And it turned out that if you took massive amounts of data, orders of magnitude more data, and threw it at modern hardware, those crappy algorithms that don't work, they become superhuman. And they actually can do better than even humans on a lot of tasks.

And we were kind of blown away by this. So, you know, as Berkeley hippies, we wanted to democratize this. And so we want to open source it, give it away to the world, and, you know, change the world with open source. but the world was not very receptive at that time it was all about Hadoop and other technologies

so they were not interested at all in what we were doing so 2013 was sort of when we were 2012 actually was when we had these ideas that maybe we should maybe do something with it and you came along and I remember you just said hey you guys are just idiots you know this thing won't take off by itself you have to do it you know so so you got to either start a company and be serious about it and do it

or it's not going to happen by itself like you know you just you know you guys messing around in academia at UC Berkeley that's like that's all nice in handy but you're going to change I was also from Berkeley so I knew what that was about yeah so you were like you know that's all nice and Andy but if you want to actually have impact we got to do this and I think we were like okay so give us some seed funding give us like 100k and we'll do this and And you were like, no, no, no, I'm going to be on your board. And we were like, okay, give us 100K and sit on our board. They're like, no, no, you don't understand.

If I'm going to spend my time on this, I have to have skin in the game. So first investment was $14 million there. And we're off to the races. I actually remember when we got the $14 million in the bank accounts, it said 14,000,000, comma, 00,000. And all the co-funders were just looking at it and they were like, wow. wow, that's, you know, that's a lot of money. And then someone said, hey, if we put it in a bank account,

how much interest will we get from this? You know, and so I was like, wow, that would pay us salaries. We can just put in the bank and like just, you know, so that's how started. So you're the one that kind of nudged us and said, you got to do this. If you want to really, you know, if you want to really make an impact, you know, go big. Yeah, no, I remember we had to wait to incorporate the company because everybody had to like finish their PhD and do their dissertation or whatever. You know, they're all exams.

Exactly, exactly. Yeah, they were taking six months off here and there to finish the PhDs. That is true. So now that, you know, you built the company to a tremendous size over 2,000 employees, and you've seen kind of, you know, managers in your own company, you've seen other CEOs in the industry. What do you feel like, you know, the advantages that you got from your very, very unusual background, you know, being a refugee, kind of showing up in Sweden, being in the hood,

being the kind of press member of society, and then kind of finding yourself on the other side. Like, what does that bring you that, you know, maybe somebody who went to Exeter Academy and then, you know, went to Harvard or something like that doesn't, you know, would struggle with. Yeah, I mean, I don't know. They might be able to do it as well. But I think what was valuable for me was the change of environment all the time, you know, the sudden change. And, you know, you go from one environment to another where the value system might be different.

And, you know, in this particular school that you're in now, you know, it's not about who wins the fist fight necessarily suddenly. So you're like, you're confused. You're like, wait, wait, you know, I'm going to fist fighting. And they're like, no, that gets you in trouble. Like, you know, so constantly changing the environment on you, I think helps you understand different people's perspectives and let's you kind of cross culture barriers inside the organization. Because let's face it, every organization, there's not different cultures within your company. Can you transcend them?

Can you empathize with them? Can you understand their perspective? Can you even maybe, you know, camouflage yourself to speak their language and, you know, so they feel like you represent them and you're one of them? if you can do that I think it's really powerful I think you said it really well you had a lecture on Toussaint at some point

before you wrote your second book I don't know where it was maybe it was a time for the show culture and revolution yeah yeah yeah culture and revolution yeah it's my favorite talk where you said you know

the thing to sound did so well was he could put himself in pretty much anyone's shoes and he could then emulate how they're thinking and that gave him immense power because then he knew exactly what he needs to do

to get them to do whatever he wanted him to do. So he even put himself in, you know, the slave driver's mindset. And he understood that, okay, if I want these guys, you know, who I hate, you know, and, you know, they're the story of my life. But if I want him to do the right things for me, this is, these are the buttons I need to push. And that's how he led that whole revolution. Yeah, now that, that's right, a great insight. And, you know, and he was able, even able to do it, you know, with, you know, American diplomats

and, you know, the kind of French colonial hierarchy and all these kinds of things. It is really, really remarkable. But I think that's right. You know, he kind of had this dual background like yourself where he grew up a slave. And then, you know, because he, you know, became such great friends with his, with the person running the plantation, and he became kind of that guy's ballet and went to him to all the meetings and so forth and, you know, mastered multiple cultures. in the same way that you had to, kind of coming from Iran to Sweden to Berkeley and then into the into kind of Silicon Valley.

So really great insights. Let me pause there and just, because Mark's been sitting there quietly, I just want to make sure, Mark, do you have any questions for Alia on his background before we get into some of this boss stuff? Yeah, so I would love to, and so let me ask Ali a very direct question, which is you have personal experience in what you might describe as, what I might describe as like three very extreme cultures. And so, you know, Iran being obviously extreme in its way.

And then Sweden, I would say is like Sweden is generally considered, at least in the U.S. perspective, kind of, you know, peak Europe in the sense of like, you know, the Scandinavian model, you know, is like a really important thing. And then obviously, you know, Sweden has its own startup ecosystem and, you know, very innovative, you know, companies coming out of there and so forth. But like, you know, it's kind of a canonical kind of European country and culture. And then, you know, the U.S. obviously is extreme in many ways. And, you know, and of course, you know, the U.S. has been a destination for, you know, immigrants from all over the world for a very long time. And, you know, but then in the last, like, several years, there have been these kind of big questions about, you know, well, the U.S. continued to be as welcoming, you know, culturally, you know, to kind of, you know, newly arrived people, you know, from different backgrounds and so forth.

And, you know, people are, you know, different people are worried about that from different perspectives. I'd be really curious if, if I were, you know, a kid who you knew growing up, you know, in. any one of like, you know, dozens of places around the world, like, how would you advise me about how I should think about, like, whether I should leave where I am and then where I should go if I want to, you know, kind of be able to follow the footsteps of somebody like you. Interesting. I mean, it really depends on the person, you know, how they're wired. You know, the advantage, I mean, someone like me, the advantage I think I have is I feel like I'm outside the system. Like, I don't feel like I'm, you know, Swedish, American Persian or anything.

I just, these are just different systems. You, you know, you move between them and you analyze them. You know, it's, you know, I don't feel like, you know, I don't pigeonhole myself into any of these categories. I just observe it. So I would just say they have different pros and cons of these systems. United States is high, high variance country, which means everything is at the extreme. You can find the best universities here. You can find the worst universities here.

You can find the richest person on the planet here. You can find the poorest man on the planet here. You can find the extremes in a way that you can't find. In Europe, the variance is much lower, you know, and, you know, so it depends on where you end up. So if your personality is, you know, if your personality is you want to really excel, you want to go far, you know, I think obviously, you know, the ceiling is much higher here and you can go much further here. The second thing I would say is the nature of kind of, it depends on your background. Like, if you're, for instance, an immigrant, or if you're from a different background, the nature of social problems are different here from, say, Europe, in a fundamental way,

which I think very few people kind of understand. In the sense that here, you know, there's a lot of issues here, too, right? I mean, there are issues in all societies, and there are lots of problems here that we've seen in the last year. And, you know, before that. And, you know, there's crazy history right here that, you know, United States has that almost, you know, no other country can even, you know, have those kind of horrors. But when you look at it, it's kind of a country made by a bunch of people that came from other places. So, you know, even when you find people that are really racist, they'll tell

you, yeah, but I'm a proud, like, fourth generation Polish, you know, and you kind of laugh. Like, you know, in Sweden, no one would say that ever, you know. There, it's like, I'm through and through Swedish. Like, I, you know, my ancestor were here, they created this country. This is my country. This is my country. You know, you're a guest here. You know, and you're not welcome here. Whereas here, it's a little bit like, you know, no, we don't like you because we, you know, and then they stereotype you. You're this way or that way. Whereas I think in Europe, sometimes you can find a different type of racism, which is, no, you're not welcome here because this is not actually your place. It's not a country. You're, you know, my ancestors built this thing with their, you know, with their hand. We've been here forever. Which, of course,

is a myth. Like, you know, there's been so much movement between these places. So, I think the acceptance for different is much higher here. You can be very different in this society here in the United States. Again, back to the variance point. But, you know, things can also go really, really wrong here. And you can end up, you know, getting the short end of the stick in a way that you couldn't get in maybe Sweden, you know. And then, you know, Iran is a completely different matter because, you know, it's not really a first world country. So, you know, their connections matter. And, you know, you really have to be lucky in life, you know, just being smart. just working hard, you know, won't take you really anywhere necessarily, which is true for many

countries. Like, you know, in first world countries, if you just do really well and if, you know, if you get, you know, you need a little bit of luck in life and so on, but there are opportunities there for you. Of course, there are problems. But, you know, in many of the third world countries, there's no chance whatsoever, like, at all if you don't have connections or if you're not, you know. So it depends a little bit, I would say. It's a good question, but it's, you know, we probably need the whole clubhouse just for that. Yeah, that is a great question. Go ahead, Mark.

No, no, that was great. That was great. But thank you for that. All right. So we're going to, you know, this is such a good conversation, but since this is Boss talk, we're going to take a left turn. And then we're going to talk a little bit about some of these questions that founders have asked us.

And this one, Ali, you start by answering. it and think about the cultural answer given what we've been talking about. So we just hired our first VP of sales recently. Any thoughts on how founders can effectively support and manage their VP of sales would be helpful insight? Any obvious mistakes to avoid? So this actually turns out to be a cultural question. Yeah, 100%.

Assuming the founder is a tech founder or the person who created the product and they come from that side of the house, which is usually the case if the question is formulated that way. Yes, definitely a tech founder. Yeah, I mean, the biggest mistake you can make is you look at this other person, right, the salesperson, who's a very different persona from you. There's a different culture, different background, you know, typically a lot of them come from sports background. They're talking about, you know, baseball, football, how do you used to do that?

And they're bragging about their records and stuff. And, you know, while you were maybe a coder or someone who was sort of not doing those kind things. The biggest mistake people make is they say, you know, they'll try to use their own framework of thinking and their own logical way of thinking and the way they are constructed and analyzing how this salesperson thinks. And then there's a clash of cultures. And then usually they arrive at, no, this doesn't make any sense. Like, you know, he said stuff that didn't, like, you know, I don't think that was truthful what he said here or I don't think this, that made any sense or this didn't, this thing that he said didn't logically follow from the other

statement and so on. So I don't think we should have. this person, I'm a no. So then they pass on all these kind of people and then they hire and I say, you know, I finally found a salesperson that's really awesome. I'm going to show you. And then it's like an engineer type guy, you know, who's kind of like them or gal and super cerebral, you know, maybe even introverted. But guess what? They'll probably suck at sales. Because you basically hire yourself, you know, in a role, but you actually need a different culture to succeed. Yeah. So I think that's the biggest problem. Yeah, no, that's, I definitely agree.

And then the management of that person is also interesting. You know, there's a really interesting thing that I find with engineers trying to hire salespeople is, if you ask an engineer a question, the engineer will always ask himself, okay, what's the answer? So I don't care what it is. Like, you ask an engineer any question, and they will say, okay, well, here's the answer. salespeople never do that. They go, why are you asking me this? That's what they want to know.

They want to find out why are you asking me that question? You know, what are you trying to get at? And they're kind of suspicious by nature if they're good. And, you know, in sales, you need that because like you roll an engineer into account and they say, hey, do you have this feature? And the engineer will go, yes or no. Yeah. But the sales guy will go, why is he asking me about that feature?

which competitors have that feature? Who planted that fucking idea in his mind? Like, I need to know that before I say anything to this guy because, you know, he could be out to get me. I may have just identified an enemy. Yeah, I mean, they're going to sell, right? And they want to have the job. So they want to know what's the question behind the question

and where are you going with this? And what are the, of the answers I give, what impact will they have on you? Right, right, right. Because I'm here to get a job. Like, so what's the, you know, Are you trying to ask this to find out if I can do this and that? Because I definitely can do that.

Yeah. And they'll do that to you in the interview. And this makes CEOs who are engineers really uncomfortable because they'll ask them a question. They won't tell them the answer. Don't. We had a sales guy. We had a sales guy. And we used to do the stupid thing where we would ask in the early days, the sales leaders,

these very cerebral math questions, you know, makes absolutely no sense. So, you know, at that time, we're trying to figure out a pricing model. And pay as you go was a thing, you know, elastic pricing and all that. So we asked this the sort of sales candidate. What do you think about pay as you go pricing? And he just looked at us and said, I like when he goes up. And then we all laughed like you, right? And then, but then what when he goes down?

He said, don't like it then. You know, I didn't want to answer the question. He doesn't want to, he doesn't know what, and actually he was smart because it was a very, that question had divided the founders, and there was a right answer and a wrong answer. And he knew it. And he's like, I'm not going to tell you. Like, because if I say this, who knows? Maybe I, is that the right answer to the wrong answer? So I'm not going to answer that question that way. So I'll just, you know, I'll say, you know, I like when it goes up, but I don't like when it goes up. What do you guys think? Yeah. Yeah. Definitely. Definitely. And then once, once you get them on board, what are, kind of mistakes that you see or like what are the things that you had to figure out you know when you brought on when you brought on ron you know like because he was really different than everybody you had in the company at that point yeah i mean he had been selling really shitty products yeah you know his whole life right he was yeah so yeah you got to say what he was selling because it's well i was selling fTP right which is like you know file transfer protocol

from the 80s which is free by the way and he was selling it for millions of dollars to healthcare companies because he was selling like the secure version, SFTP, right? And, you know, the way you do it is like, you know, how important are your health records to you? Is it okay if you lose them if they don't arrive at the other destination, you know? So, which is good. I think, you know, the best sellers are the ones that didn't have an amazing product to sell. But I think, you know, I mean, sales leaders have, you know, there are a lot of skill sets they have and we could talk about a lot of those things. But one of the skills that most great sales leaders have is that they're really good negotiators.

So they'll be negotiating with you. So, you know, you've got to be prepared for that. If they're not doing that, I think there's a problem. Like, for instance, when you're hiring a sales guy and in the finish line, if they don't make obnoxious demands on equity and salary and comp, that's a big red flag. Yeah. So with Ron, it started with started already with that, right, with completely obnoxious, outrageous demands on, you know, compensation, which meant, okay, he's a good sales guy, right? He's going to get big deals for us. But then that continues, right? When you're setting the targets for the year, when you're setting up the plans for the year, if you have an amazing salesperson, you're, you know, you're basically negotiating. with a person who loves negotiations and that's what he does for a living from you know seven a m till you know eight nine p.m every night every day of his life for 40 years uh he's been talking to

procurement departments negotiating stuff yeah um can you get comfortable doing that uh or do you think it's just bullshit as a as an engineer guy and say you know i can't deal with this and you know let's just go get someone you know this other guy seems much more uh of a straight shooter or you know logical. Yeah. Yeah, yeah. And what I always say is, you know, you have to learn to manage diversity and there are different kinds of diversity.

And probably in a kind of enterprise software company, the sales person is going to be the most of the person who gets hired off the bat, you know, coming from a really different way. Yeah, culturally. Culturally. I mean, the sales in pretty much every company is actually a distinct culture. you know, distinct from the rest of the company, whether you like it or not. You can try to change it, but it actually is distinct.

Just start with something as simple as, you know, you try to make everything homogenous in the company. Except compensation for sales is just completely different. Right. Right. And I start with that, right? Yeah, but it's just different. Right. Already there, you've changed the culture by saying, these guys get paid completely differently from everyone else in the company in a radically different way.

You know, very little equity, and they get huge packages, and they might make millions of dollars, but most of it is variable and they have to earn it. Yeah. Yep. Yep. Yep. And what I was just to say, you know, when engineers would bring that to me, I would say, oh, so you want to be paid on commission. You know, yeah, I want to get commission when we make a sale. And I was like, okay.

And then when you miss the schedule, I'm going to fire you. Is that cool? And that always ends. conversation. But yeah, it's a long term and short term. Yeah, there's a lot of CEOs that don't want to pay, you know, they don't want to pay commission and, which is crazy in sales because I remember I had this conversation with a lot of my CEOs and I was like, look, I said, tell me this, do you have any engineers

that ever like on a weekend will actually like write some software or do something like And he goes, yeah, I have people like that. I said, well, I guarantee you, you don't have any salespeople who sell fucking software for fun on the weekend. You know, it's not that kind of thing. Exactly. So you have to, it has to be competitive. There has to be a president's club. There has to be commissions because it's a prize fight.

And no prize, no fight. And yeah. So. Yeah. And the price has to be, you know, I mean, just to make it very clear to founders, you know, if they're listening. The price every year has to be millions of dollars. So, like, you better have. have, if you're successful, you better have salespeople that are making a million dollars a

year, you know, so that you can hold them up and you can say, this guy made, you know, a million last year. And, you know, and this guy did too. And you could be him or her. And that's really important, I think, for really competitive sales cultures. Yeah, because that's why you do it. I mean, I think that it is, it's the thrill of the hunt and the, you know, the size of the kill. And without that, you know, it's not fun at all. So there you go. Yeah. 100%.

So follow-up question was we're looking to hire our first marketing leader. We're a B2B API SaaS company. What advice do you have on the profile we should be seeking when's the right time? Yeah. Yeah. And then there's a follow-up question to that, which is should you hire a marketing leader or a sales leader first, pros and companies? that's a good one and I'm curious what you think but for sure marketing and sales especially in a B2B company go hand in hand so so if you already have a sales leader

it's really really important that that person gets along with whoever you're going to hire in marketing in some sense sales is the customer in many ways for marketing so marketing generates the leads and delivers those leads to their customer which is sales sales and runs with it and if sales says these leads are crappy then it doesn't matter. Like, you know, or if they say, hey, this message you gave me is useless.

Like, I'm not going to use it. I'm going to come up with my own. Then why do you have a marketing department? And that happens. It's very common. So really making sure that those two departments work really well together, I think is really, really crucial. So I would make the, so if you already have a sales guy, make sure that he or she is a

real integral part of that search process when you're getting the marketing leader. Yeah, right. Because if they hate each other, then you're breaking up that fight all the time. Yeah. Yeah, and it has to match. So different companies have different go-to-market motions. You know, a company like Tableau was selling desktop licenses for $2,000. You know, a company like Pallantier, I suspect, is selling contracts that are, you know, always at least seven figures and maybe eight figures, right?

So the kind of leads you need and the kind of marketing you need is different for these different ones. So make sure that also the marketing leader you're getting. fits what you have on the sales side. These two have to really gel well together, these two departments. But it also depends. Yeah, go ahead. Yeah, that's a really good point in that,

you know, when you hire an executive, you're paying a lot of money and equity and you're buying knowledge. And so if you hire, you bring in a head of marketing and you're a B2B API SaaS company and that head of marketing is from whatever, Palantir, then you've screwed up because you need somebody

who's from a company like yours because you're buying that. You just paid them for knowledge they don't have. And that's insane because what you're really doing with these executives is you're accelerating the entire company's time to learn how to go to market because you could just take your junior people if you're going to go with zero knowledge. and this is a mistake people make. They're like, well, do they really have to come from the domain?

Yes, they really have to come from the domain. Do they really have to know the customers that I'm selling to? Yes, they really have to know the customers that you're selling to because that's what you're buying. It's worse, actually, if you're almost better off getting someone that's not, you know, an expert like that. Because they're now going to go ahead and spin up at the manager machine and a whole, like, marketing, you're going to hire a whole bunch of people that are specialized and doing that thing.

And it turns out that's not even what you need. Right. You're right. They're going to run their old playbook. Yeah. So it's really crucial. The other mistake a lot of companies do, and I think Databricks did in the early days, which is you sit down and say, okay, but what kind of go to market would I want to?

Who would I want to be? Oh, I'd like to have a million dollar deals or I'd like to have $10,000 deals. So at Databix, we made the mistake early on and we said, oh, we don't even want to have salespeople. It's better if it's like super automated and people just swipe a credit card and it just grows like that. That's the one we pick, as if it's like a choice you can just make. from a menu. Sales organization, as opposed to, I've got this product. I'm selling it to that customer.

What kind of channel do I need to connect the two? It starts with, oh, I want this kind of channel. Yeah, in Databix case, we take massive amounts of data and do machine learning on it. And if we improve by 1% symmetric, that could mean $100 million of improvements for some company. But that means we need to work with companies that have lots of data. data and where 1% improvement matters a lot to them, that happens to be big enterprises. And, you know, the channel you need to talk to those are enterprise sales. And that's a different game than if you're selling startups or, you know, Excel users,

you know, who we just want to plot something, which might be the tableau user. Yeah, no, it's amazing how many CEOs will make that mistake. And it always comes in the form of, well, you know, I don't want to hire a Rolex wearing salesperson or something like this and it's like well like because you don't like Rolexes I mean it's kind of like if you were going like okay I'm taking a trip um to Australia and I'd like to get there on a motorcycle it's like well you can't get to Australia on a motorcycle it's not that someone determines the vehicle what you want to fucking ride but I want to have really really low CAC, customer acquisition costs.

That's what I'm going to go with. Yeah, who wouldn't? But maybe that doesn't get the job done for the product you have and for the market you're trying to reach. Yeah, okay, so this next question this kind of gets at what you were saying, which is should marketing and sales report to the sales leader or to the marketing leader or to the CRO or to the CEO,

how to avoid finger pointing between the marketing leader and the sales leader, if both report to the CRO, you. And then Mark also get ready because I know you have opinions on this one too, but let's start with Ali. Yeah, well, I don't think one size fits all. And like, you know, here's exactly. I have the canonical orarch chart. I'll send it afterwards and everybody just run their company based on that orch chart. I send them. So it kind of depends. Also, titles can mean anything in any company, especially, you know, I find it's funny. You find these tiny startups with 10 people and they have like a CRO and a C-O and a C-O and, you know,

all kinds of fancy C-level titles and EVPs. But, which actually, it's okay. It's not under the world if they do that, though. I don't think it's a good idea. I think one thing that's weird in the question is, oh, you know, we can avoid this fingerpointing if we just like, you know, if we just put it all under the carpet, this like, you know, make the problem go away. Yeah, awesome, great job. No, actually the finger pointing can be good. I actually think one of the reasons it's good if it reports to the CEO is that you get to see these conflicts and they can actually figure out how you want to configure your company because you're figuring stuff out. It's a startup.

It's not a set in stone gigantic corporation. So I actually always preferred not having a C-O-O or someone between me and all these different functions. I had them always reporting to me because then I would actually find out what's going on. Like, you know, the salesperson would say, hey, these leads are not great. And I would say, why not? And I could dig into it. And then the marketing leader would say, yeah, but he says the lead are not great, but actually they're not actually spending their time on the leads because they're actually focusing

in this other thing, which makes them more money right now. and so on. And that helps you configure it. Now, maybe you have an amazing leader that can do that instead of you and you suck at this, all this stuff that we talked about. Yeah, then maybe it makes sense to make it all, you know, just go to one person that does it for you. But that's a lot of power in someone's hands. And if you just started your company and you get one of the C-O-CRO that owns all of go-to-market, that's a lot of trust in one person. If they're that amazing, that's great if you found that person. But more often than not, They probably don't understand your product as well.

And they kind of don't know what kind of company you're creating. They might just run with an existing playbook. So I'm not a fan of doing it that way. Yeah. Well, and it's interesting because the other thing that that ignores is marketing is also connected to engineering. And so there are going to be conflicts and communication breaks downs there. And then you've made that one actually harder to unravel. And the good thing about sales and marketing is there tend to be both.

extroverted and loud, so they're going to really point fingers, whereas once you get into engineering, it could just be like a silent war, which is extremely destructive. So that's a that's a really good point. Let me bring in Mark. Mark, you have some thoughts on whether sales should report to marketing or marketing should report to sales or to the CEO and not going to think. Yeah, so, you know, you guys may have covered this. I'm sort of, I'm multitasking a little bit with a five-year-old. No worries. I tuning in and out a little bit.

I would say, look like the other thing is, did you guys talk about air war, ground war? No, no, we didn't talk about that. Yeah, so that's the other thing that's like really important to think about here is basically the two functions basically operate on very different clock cycles. And so sales is typically, you know, executing against, you know, quarterly targets and then, you know, ultimately annual targets and so forth. And marketing has some of those, but like marketing generally is playing a longer game.

And they're trying to like, you know, do kind of long-term brand development and corporate communications and then even, you know, lead gen. Like sometimes the agent plugged straight into sales, but, you know, they're kind of doing a lot of other stuff that maybe is a little bit more amorphous or high level around long-term demand creation. And so, you know, the metaphor, I think it gets used to a lot as, you know, marketing is air war and sales is ground. And, you know, it's a little bit like the Army and the Air Force, which is like the Air Force like, the Air Force, like, if you talk to like Air Force officers, like, they may say something like, I don't know why those guys are always running around, you know, with their boots in the ground, getting their, you know, getting their, you know, getting their. doing their feet wet, why can't we just bomb from the air? And the Army guys are like, well, you know, these Air Force guys, they're up and they're literally up in the clouds. And they, like, actually don't know what's going on.

And they're not at, like, point in contact with the enemy. And there's a similar dynamic that can develop between marketing and sales, where the marketing people think the salespeople are kind of the grunts and the salespeople think the marketing people are just, like, out to lunch. And so, like, it's a real cultural difference. And by the way, like, you often see it all in their private lives. You see the difference also. the sales people are like having weekend barbecues and like, you know, the marketing people are going to like, you know, art fairs, you know, pretty different things. And so, you know, they don't, they do naturally go together in the sense of there's a direct connection, which is they're all about go to market, but they also don't go together in these really important ways. And so I guess I would say like typically, typically in a company and see what you guys think of this. I think if marketing reports to sales, typically you have very weak marketing. If sales reports to sales,

or marketing, typically you have no revenue. And then if they don't, you know, if they're, if their peers, they generally like argue a lot. And I think those might be like the three choices. Yeah. Yeah. Absolutely. I think that's right. And look, the other thing that Ali brought up that I think is something that CEOs have to deal with is, look, within a function, things always run well if you have a reasonably good lead.

on the function, you know, because they meet together, they've got aligned goals and objectives and so forth. And so, you know, that generally isn't where the CEO has to be the chief executive. It's usually cross-functionally where things break down and need to be defined and ties need to be broken and conflicts need to be resolved because that's where there's mismatches in the company that are going to prevent it from succeeding. And so, You know, it's really hard to do that if there are layers between you and the people who actually own those functions. Yeah. Yeah.

They'll mask it at every level. They'll do their pre-meetings and they get on the same page. And, you know, and then you get, you know, a very sort of fake sort of picture of like everything is great here and there's no problems and we're aligned. Yeah. So I think as a CEO, it's actually good to surface that finger pointing. Now, it can get toxic and you can make it really bad. culturally. That's a separate problem. But at least you want to know exactly what are the issues that are going on so that you can actually figure out how you want to configure it for your

strategy long term. Yeah. Yeah. Yeah. For sure. And I agree with Mark's point of view. If you make, you know, if it's very sales, anything that's very sales oriented, so if you put marketing under sales and it's really sales driven, it's going to end up being very short term. So your sales leader will look at all the stuff marketing is doing and they're going to only fund the stuff that is guaranteed ROI in the short term, you know, so ends up being like lead gen and programs and events and those kind of things that immediately turn into revenue. And they're not going to invest in the long-term branding stuff that you need, and the thought leadership and the things that kind of over time actually is more important that you need to do. They're going to start

product marketing, you know, if it sits in the marketing and so on. Yeah. Yeah, and the brand thing is so underestimated by enterprise CEOs because, you know, they don't realize, and you can actually hear it from salespeople, interestingly, like, you know, we walk in the door and nobody knows who we are. So every meeting is we've got to explain who we are. And you think about what that does to your sales cycle because you have no brand. And yet you're still not willing to invest in the brand. And it's really, it's a super common thing in enterprise CEOs. And it's a, it's definitely a big deficit. Yeah, by the way,

the other weeks would not be aware this today if it wasn't for, when we started, this Spark technology was very well known. Yeah. And we would go,

we were so, you know, the founders were so pissed off always because the sales guys would go to every account and instead of explaining what we do, they would just say,

do you know Spark? I know it. We created it. You know, we're those guys. Okay, now you know who we are. And then we just lead on that. And so we created it.

We know it better than anyone else. You should buy our software. And we would, you know, it would infuriate us because it would be like, I don't understand, pitch it, but no, they were doing the right thing, right?

They were going on that brand value, and they were getting the foot in the door that way. And it opened up so many doors that otherwise would have been completely shut. And that's how they got all those leads. So it's like, hey, this part thing, do you have a strategy for it? Yeah, we created it. I created it. You know, it's me, me, me. Like, let me come in.

Like, you know, I'm one of the creators of it. So, yeah, that was actually brand awareness. Yeah, yeah, yeah. It was it. Right. it actually saved you because originally marketing didn't work that well at David Brooks, I'll just say, without giving any blame. So the next question is, how do we know when we need HR slash people roles?

I mean, very early on, the founders are doing HR all the time. They maybe don't think of it as HR, but you're doing HR kind of. know from the from from from from being 10 people yeah yeah yeah yeah go for it but i'd say there's a couple of things that um make it really critical uh so yeah you are i mean there's certain like basic thing you know things you might just regard as personnel which is like okay you know what's the salary scale you know hiring uh people all that kind of thing but then you get into you know, it goes critical in a couple of places. One is, you know, once you get like 50 people,

I think the law is you have to have sexual harassment training. And, you know, that's the way you think about that, and this gets into the other thing, and that's also when you start to have managers. And if you have managers who have not been trained in sexual harassment, it's basically the equivalent of having accountants who aren't trained in accounting. because it's a legal apparatus that if they don't know,

it's going to cause huge problems for the company. It's not like the law is well written, but it's not, you know, it's like accounting law. There are nuances to it that you're not just, not everybody's going to do it, particularly when they come from all different cultures and all different kind of walks of life where these rules vary. And so you have to know the rules of the land.

And so that's like it's absolutely critical. that, like, you have real HR at that point. I mean, I've seen companies getting to trouble on this all the time. And a lot of it is, you know, managers, like, just don't know what they're doing. But then it becomes broader than that, in that if you've got managers managing people, how do you know, you have an idea, hopefully, if you're a CEO, you start to have an opinion on, okay, what does it like to work at Databricks? How do I, what kind of people do I want?

what do I want their experience to be like, what do I want their career paths to be like, how do I want them to be treated, all these kinds of things, which result in a bunch of management practices from how you interview to like, whether you have one-on-ones, how you conduct a meeting and all this stuff?

And how do you know if you're getting that? Like, how do you know, as CEO, you're so busy, you know, building the executive team, running the company, figuring out the strategy, talking to customers, all this stuff. You don't know how you're managers. are doing. So without HR, you know, really good HR that can help inform you on, yeah, Ali, you're getting exactly what you want out of these managers, but not that manager.

Then you don't have any quality control at all. And your company is not going to be a place that you even want to work in. Yeah, that's a great point. I mean, a lot of people say, you know, HR is, you know, the people organization. It's for all of your employees. They're there for all of the employees. That's bullshit. Yeah, that's full. The people in your organization, they report to their bosses. And the bosses decide if they're happy or unhappy or all that kind of stuff. They don't report to HR. So HR is really there outside of recruiting to make sure that those leaders are doing their job

and that they're good and they're getting the training they need. And that's really it. It's the tool you have as a CEO to make sure that all your leaders are great, that they're doing the right thing. Not the old employees. Each employee reports to some boss who reports to some boss. And those are the people that have the power. So that's really, actually, that's a really great point. Yeah.

And it's bad when, like, employees misinterpret that because then you get into this weird politics with HR, right, where the employees are trying to use HR against the manager. Yeah. You know, in some weird way. Like, there's certain things. Like, if you've been abused, then, of course, you'd go to HR and, you know, whistleblow and that kind of thing. But, you know, you don't want it to be, oh, he gave me a bad review. you, can you talk to them? Like, that's not the job of HR. It's your job to get a good review.

Yeah. I mean, you're right. There's also tactical reasons to get HR and get, you know, legal and security team. This is a tactical reason. But, you know, to protect your ass. You know, you want to do the exit interviews and, you know, and talk to people, you know, you'll, you probably don't know how to do that right. And, you know, you're going to end up on glass door. And people are going to say that, you know, the CEO said some really outrageous things to me when I was about to, you know, leave, you know, why not have a professional do that? Who knows how to do that for a living? Yeah, that's exactly right. And look, the CEO job is emotional. And, you know, there's certain, you can't put yourself in a situation where you feel like somebody betrayed you

or this and that, and you're having a conversation that's going to make it a thousand times worse. So it's a really good point. Just start early. Start early, get an A. Charlie's early. And actually, I will say this. Most HR leaders aren't that great. So it's actually a very difficult search. So it's actually going to take you very, very long time to find someone as awesome as Amy that I have at Databricks. Yeah, no, Amy is great.

But, you know, one of the things that makes her great is, like, the real head of HR at Databricks is Zalik. And, you know, Amy ends up being the person who makes you, what you, all you can be instead of HR. because like the most important thing in any tech company for sure is the talent. And so if the CEO doesn't have a very, very strong point of view on how that talent is brought in, assessed, managed, promoted, you know, moved along in their career, which is the HR life cycle, then no head of HR is going to save you.

That's not a possible thing. I think it's not about Ali. I think every startup founder and CEO, that should be the primary job to make sure that you're hiring the right people and you have very opinionated way of how you want to hire and who you want to get in because those are the people

that are going to run your company. You can come up with whatever strategy you want, but if you hire the wrong people, you're not going to go where you want it and they're not going to implement your strategy because you've got the wrong people in the boat. So, of course, that should come from the CEO.

The other one is culture. A lot of people are like, you know, once you get ahead of HR, you know, you can delegate culture to them and they can figure out, they can do surveys and come up with, what is our culture? You know, this is my thing.

Like, you know, Oh, we should do a survey of what the employees think. What should our culture be? What is it? No, you know, that's not how it works. Culture is actually a strategic weapon. The CEO should decide it. Absolutely.

And then it should be implemented. Yeah. Yeah. No, like your culture is your number one. If done right, it should be your number one strategic competitive advantage. Yeah. The reason people buy from you, even when your product might be behind, because they know because of your culture, they're going to get what they want

out of the company over time. And it has to be designed. I totally agree. So we are actually, oh, go ahead. Yeah, I mean, a great example of that is that it's an absolutely strategic weapon is look at Amazon. Amazon has a culture principle called for Galilee. And that means, you know, everybody's going to,

nobody's going to splurge in that company ever. And they're going to be very careful with how to spend their money. And that ensures that fits their whole strategy of going to be the low-cost option. and it's going to be super cheap, and your margin is my opportunity, and I'm going to basically out-compete everyone else on Bryce. Right. And you know who totally doesn't have that cultural value, Apple?

Yeah. Because they've got a $5 billion like campus, and they've got doorknobs that probably cost more than anything at Amazon. And, you know, but that goes with their strategy. They're building premium, beautiful products that you're going to, are not only going to be fun for you to use, but give you status. And they're not cheap. And they're not cheap. And, you know, they'll never make a product as cheap as Amazon, and Amazon will never make a product as beautiful as Apple. And that's just fine.

But they're different cultures for different strategies. Exactly right. Okay, well, that's the end of our time on Boss Talk. We're right at 6 p.m. And we always like to save something for next week. So thank you, everybody for coming. Thank you, Ali, for telling us an amazing story and articulating the value of, which I think every CEO has to know is like, how do you deal across culturally? How do you be multi-cultural lingual? I don't know what a word for that is, but you have to be multicultural to do that job. And you did a great job of articulating why that's true.

So thanks, everyone. Thanks for all the great questions again. Thanks, Ben. Thanks, everyone. Thanks, Mark. Okay. Thank you. Thanks, Zoe. Yep.

Good night.