Investing Billions - E431: Marty Kausas on AI, Trillion Dollar Startups & Founder Psychology

Episode Date: September 18, 2026

What if the best reason to start a company isn’t to change the world, but simply because you love the game? In this episode, I sit down with Marty Kausas, CEO of Pylon, to unpack how he thinks about building an ambitious company from first principles. Marty explains why Pylon started with a goal of reaching $1 billion in revenue, why market size can matter more than the quality of the founding team, and why the rise of AI has pushed his definition of a generational company even higher.

Marty, you run one of the hottest companies in Silicon Valley Pylon, which is backed by Andreessen Horowitz and General Catalyst. And last time we chatted, you said that the reason you started the company isn't to change the world. Why is that? This is interesting. My guess is a lot of founders are not honest with why they start companies and we are. So if you think about the reasons why someone starts a company, it could be ego, it could be

money, it could be to solve a problem that they encountered at a previous company. our reason is we just love the game. It's fun and adventure is the reason we run pylon. And if you think about the other reasons, like money, they're much easier ways to make money. If you think about you had this problem at a previous job and now you want to solve it and you're so passionate about it, or are you going to spend the next 10 years of your life grinding away

to make it happen? I don't know. It just feels a little disingenuous to me. Especially if you're building, for example, we're in the customer support category. Like, I love what we're building, but I wouldn't say I got into it. it because I'm so passionate about customer support that, like, I must spend all of my time doing it.

And you started by looking for a very specific market. What were you looking for? So this goes into, like, the foundation of the company. So we have our why and our motivation, which is fun and adventure. And then there's the what? And we think about the company like a giant board game, where the win conditions of this board game are get to a billion dollars of revenue in less than 10 years. That was the initial goal. Three years ago, now it feels like that goalpost has shifted and we'll talk about that. But when we think we think, we think, we're going to be a billion dollars of thought about, okay, how do we get to a billion dollars in revenue? The question we asked ourselves, well, how have other people gotten to that revenue scale? Because that's a lot of money. So we looked

at public at the time SaaS companies who were big and worth over at that time $10 billion or $10 billion in market cap. And the surprise to us was that there were only $26, $10 billion public SaaS companies at the time. And that meant that, oh, shit, not that many people can get to really big revenue scale. What's unique about them? And the unique variable was primarily market. Market was by far the big differentiator. And what we realized was if you take the best founders and the best team and put them in a small market, the market wins. You just can't grow out of that small market.

If you take the worst founders and put them in a great market, the market still wins. Those founders in that team will probably do well. And you take great team and great market, and then that's where you get generational company. And the intuition on that is pretty intuitive, which if you have a billion dollar total market and let's say you capture 20% of the market, which is a massive amount for a startup, you still have a $200 million a year business. If you have a $10 billion market and you capture 20%, now you have a $2 billion a year of business.

And I actually think some people might say, oh, it's hard to predict certain markets and the size of them. I always like to think about Bitcoin and Coinbase. And if you think about crypto market, in the beginning, you would have been like, oh, crypto is such a small market. How big can it be? but really it's the financial systems market. And it's like money movement.

And that market is very big, but there's now some sort of new way to operate within that market or there's some new trend within it. We basically were looking for, if our goal to win this board game is get to a billion dollars in revenue at the time, then we need to find markets that are already big. We were looking at, okay, within B2B software, where is most, what are the biggest companies?

And we looked at Salesforce at the time. And their biggest revenue driver, interestingly, is not their CRM, which is what they're known for, but it's actually their customer support platform, which it's called Service Cloud. They make $10 billion in revenue off that per year. And so our lazy way of thinking, okay, what market is big was just saying, okay, let's go to the top, look at their biggest revenue driver, and try to eat up that market. That's how we picked customer support as our starting category.

And then within that, you have to find some sort of new thing that's happening, right? Because you can't go build the same thing, sell it, and expect to win. The incumbents have too much an advantage. And so we went and LinkedIn DM'd a bunch of people in customer support asking them for what's new in the space, like what's happening, what do you care about, what metrics matter. And there's one pattern that we started to see emerge, which was a lot of people were starting to offer customer support over Slack, which is different from what we're doing now, but it was this like omnichannel communication that was starting to happen specifically for B2B

company. So if I'm a company, I might open up a shared Slack channel or shared Microsoft Teams chat. with one of my customers, and suddenly the communication moves away from email to these new conversational platforms. And so that was our initial. We saw that none of the existing business systems could integrate away from email into these chat platforms. And we said, hey, there's like an omni-channel moment happening in the market, and we think that will be the de facto way of operating long term. And so we started with that wedge in the customer support market off Omnichannel support. So that was our first product. And then over time, we've solved it,

we started to see, oh, like, we got all this feedback from our customers. And at the time, we were just integrating into Zendesk and Slack or into Salesforce service cloud and Microsoft Teams. You were this bridge. And over time, we started to hear all the feedback from our customers on what they didn't like, what they wanted. And we realized actually if you built a customer support platform that was built for B2B companies in particular, then you could compete really well against these incumbents. And then it takes us to where we are now, which is we're just reinventing how customer support works completely. One of the big disconnects in the market is that nearly every CEO that you talk to will say hiring the best people is the number one most important thing that CEO focuses on.

But there's not a lot of focus on the pitch to potential employees. When you go into the market with a fun and adventure pitch, how does that resonate? It resonates really well. So, It's funny when we were raising our series B and our series A, I remember talking to Merit, our partner at BCV. And the first thing I told her when she came in was, hey, our motivation for doing this thing is fun and venture. And it kind of stops people because they're like, what? Like, I've never heard that before.

No one said that. And so the motivation, it can't be there alone. Like it has to be paired with, obviously, an objective that is in alignment with what an investor would want if you want to want to. take their money. And turns out for us it is, right? Because we're playing this giant board game of capitalism and we're trying to get to a billion dollars in revenue. And so the way we think about our market and pairing the fun and adventure, which is the motivation that's the driving force with the objective of get to a billion dollars in revenue, this pair super

well. Because then it's a long-term, sustainable fuel for us to keep going. And then the objective is very aligned with building a big business. And so we work backwards from the big business. And every time we make a product decision, every time we think about what market to enter, we're thinking about how do we get to that order of magnitude? Because a lot of founders, what they'll do, they'll just say, hey, like, we're excited about this direction. We think it could be good. And they don't really think in terms of what is the end goal, like how big should this

company be long term? So when we started, we set a very clear objective of revenue scale. And then that informs what type of products in markets you're willing to build and enter. I wonder if a lot of this is just being differentiated in the market. Again, CEOs talk about hiring, but they don't think about themselves as basically this hiring machine in the market competing against other companies. And when I think about some of the greatest recruiters in the world right now, Elon Musk, Alex Carp, Palmer, Lucky, they're all so singularly different, so weird. But they have a very specific view that they have. And they polarize every person into either this is like the greatest company or I would work at this company. my dead body. This episode is presented by Juniper Square, the operations partner for private markets. It's interesting to yes, recruiting is one of the most important things. I also think another thing that I'll mention is I think the greatest gift a founder and CEO can give to their company is product market fit. And it kind of has to start there because in order to attract

an incredible team to come work at Pylon, I need to give them the potential that they get the potential energy that they can make kinetic right I need to give them here here's the boat we need to assemble and if we assemble this boat and row in it like we will go to the promised land and so product market fit has to come first or has to be like the potential for it has to be there and very clear and I think because we work backwards from a very ambitious goal it's very easy to explain to someone okay here's how we're going to get there because we've already done the We are thinking about this in terms of this order of magnitude revenue, etc. And so you have to start with product market fit for yourself and you need to be honest and clear with yourself.

And then it's actually very easy to communicate that to your team and people you try to hire. Here's what we're trying to do. Here's why we're doing it. Here's our plan. And there's no ambiguity of like, oh, does this really make sense? No, we're like, hey, we want the most certain path to get to this revenue scale. Here's our goal. Here's the market.

here's the incumbent, here's our plan, here's how you can break down the math to see that the market's big enough. And then also, the other, the thing that's hard about recruiting is today, there's so many great companies to join. And so how do you differentiate yourself? For us, it's almost always the market. And so when someone's interviewing at Pylon and they're interviewing at, and Anthropics really hard, actually. Anthropic and Ophanare are the two that are like, it's kind of hard to argue with their market. But most companies are very easy to compete against because just from the start, their markets are small, is a problem.

And so they didn't think long term about how potentially big the company can become, whereas we have thought about it. So for example, let's say we have an offer out and someone else is offering double the equity. I will go, I will do the math in front of them. Here's company A that they're interviewing at, and then here's a pylon. Company A, like we can look at the existing market.

It exists, right? There's already some market out there that we could try to size up and understand how big this company or product could be. And it is one to two orders magnitude smaller than what pylon can be. You look at the previous generation of SaaS-era companies. They have given a really good relative sizing of market. So customer support is a $40 billion SaaS category. And then the AI version, the agentic version of that, is going to be even bigger. and then you look at a much smaller company, let's say an SEO company and, hey, the agentic

version of that, like the biggest company there is a billion dollar market cap, right? Not even a billion dollars in revenue. So you take an SEO company, for example, let's say we're competing with someone who's doing like agentic engine optimization, like the AEO stuff. They're competing against incumbents that are worth a billion dollars in just total market cap. And then we compare it to Salesforce service cloud, which is $10 billion in revenue. It's literally two to three orders of magnitude higher, which is crazy. And from the very beginning, you wanted to build something really big because you believe it takes about the same effort as a small company.

Talk to me about that. When we were starting the company, we were considering whether we should bootstrap or, hey, maybe some ideas or in markets that are easier because they're less competitive. But the problem is we realize for ourselves, no matter what, we were going to put in 100% of our time and energy into whatever we do. and so you may as well go for the most ambitious company you can. And actually in some ways, it makes a lot of other things easier. For example, hiring great people is much easier when you're trying to be really ambitious.

It goes back to this equity pitch. You could entice people to join your company because they're equitably worth. And it's equity and it's also just fun, right? That's one of the things that underappreciated by people is you don't have that many companies that you get to work at, right, where you can put in a hundred percent of your effort. You aren't going to be able to do that for infinite companies. You have a small set that you can select and be like, I'm going to go all in on this company. And you don't really want to do that if the ambition's not there, right? If it's like, oh yeah, we're going to kind of like get to $10 million

in revenue and just like cash out, sell, etc. It's just not exciting. The people who who join Pylon are there because they're like, this could be a generational company. this company could be far bigger than like any company I've been at before. And so this goes to the original starting point. Like when we had started the company, we started literally six days before Chatsy PT came out. So it was like, it was crazy timing.

And at the time, a billion dollars in revenue felt very ambitious. Then this year, we're rethinking that and we're like, look, what is actually generational now? And generational now means actually you get to a trillion dollar market. account, right? The goalpost has moved. And so we went back to the drawing board, we're asking

ourselves, how do you get to a trillion dollar market cap? Because that's what generational means now. And so we went back to the drawing board. Okay, what's like look at our market, let's look at our positioning, let's look at how pricing is going to evolve. And we basically figured out that the like fully agentic version of what we had built for customer support teams is actually something that could 10x the revenue potential of the company. So if we're charging $100 per unit right now, actually in the future, we're going to be charging $1,000. A way to explain this is in the SaaS era,

let's say you are Salesforce. You might charge $100 for a seat in the platform. But what's interesting is happening in the market now is people are adopting Claude at their companies or they're adopting chat, and they're paying $1,000 per person for them. And so suddenly, and it might be for the same type of work that Salesforce might have been providing. So let's say you're using Salesforce's ticketing system for customer support.

We're seeing support team members now spend like $1,000 per person per month on Cloud. Now, the question is, can Salesforce go and build whatever features that someone is trying to build out or use with Cloud? And the answer is they can't because they're not very good at build. and they're too slow at this point. And it leaves opportunity for people like us to say, hey, we actually can build that out. And so we can be in the customer support category. And the new AI products we build actually are competing

for the spend that is now going to clawed that otherwise Anthropic just takes or open AI takes. And essentially everyone's using the general purpose models to try to build or use them in a way that are not optimized at all. optimize at all and are super expensive and slow and just not worth it. So our competition moves from, hey, we used to compete with these support platforms to now we're actually competing with Anthropic for a very specific job function. And so we're trying to move spend away now from Anthropic, from Claude, from chat to pylon. And that's in order of magnitude more

than what they'd be spending on the previous products. I've been investor in Anthropic since it's CERC. Thank you. And I never believed, I think it's somewhat an absurd thesis to think that it's going to replace very specialized, very verticalized solution to B2B. I don't think that was ever part of the pitch. When people think about that, it's maybe an interesting thought experiment. But when you look at how companies operate, how they choose software, how they deal with compliance, how they deal with execution, it's just not possible to replace with one solution from one company. almost every repeated Claude prompt or skill is a company waiting to be built. It's kind of like the old Craigslist. Exactly. That's right. photo where you had all the Craigslist categories in each one.

Airbnb was one of them. Exactly. Airbnb, like maybe Thumbtack or like dating like Tinder, right? So yeah, I agree. It's exactly the same thing because what Claude is doing is it's filling the gaps. and I can give you a very specific example of this. We have a bunch of cold callers at Pylon, SDRs, and their job is every day to go pick up the phone,

they use some cold calling software, and after each call, I want them to get coaching. And so when we first started adopting Claude, I said, hey, take your transcript, go paste it into Claude, and then let Claude tell you what you should have done differently. And, you know, I was like, wow, this is so cool. It makes it sense. So much sense.

And then I realized over time, I'm like, why are they going from their cold calling software, copying that transcript, then going and then going back into the cold calling software, they're totally disconnected. If that product had the coaching just built in, that would be way better. It would actually be a better product. And so I think Claude is filling the gaps. because people haven't caught up on the product side and built the right thing yet. And so this is where, for example, I look at, once again, you go back to Salesforce. They have all the advantage right now in terms of distribution, in terms of brand, in terms of relationships,

but they just can't execute on the building. So they have agent force, yeah, blah, blah, blah, but it's not like, I don't think it's real, is what I'm hearing from people. And so it's an execution challenge for them. Like they have all the advantage as like they own, all the data, they own all the contacts, they own all the relationships, they should be able to capture all this new revenue, but they just can't execute. It's innovator's dilemma, and it goes down to the very people that they hired today. It's not the people that they hired in the first

couple of years of the startup. They're not as entrepreneurial. They don't have as much upside. They're not as risk-tolerant, all these things that keep great companies from disrupting themselves. It just happens over and over because it's a behavioral issue. It's not a technological issue. Yeah. It's interesting. I think that This is actually one of the assumptions we had made in the beginning of the company that I now realized was a mistake. I overestimated the incumbents. So I used to be scared of Zendesk or Salesforce or, you know, whoever because I'm like, you know, a VP will join a company eventually and they just will buy Zendesk, right? That's the default because that's what you do.

But they're just so slow. That's the problem. They're just too slow. And so you can just run circles around them with, as you said, a better team that's more motivated. There's more AI native in this era. And you can just win. And you shouldn't overestimate them. Actually, you should expect that if you are good at executing yourself, you can move faster than them.

Just as a thought experiment, if you fire the entire Zendesk team, you brought an entire startup team, you redistributed the equity to them. And you said, you're going to vest. upon this execution. I think it could actually be turned around. The problem is that no company does that. There's no way they can do that. There's no way you can. Every week there's a new AI product that launches. You think that companies are working on the wrong problems. Why? One thing I've learned from talking to hundreds of investors is that great investment firms aren't built on investment returns alone. The firms that endure are great at the things most people

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I look forward to seeing you there. One of the narratives in the market has been AI's replacing humans completely, and I think that's false. And the proof is you just look at the best companies right now. Starting from Anthropic and Open AI, I use chat every day. You use cloud every day.

It's nowhere near replacing any of those. They're very much human augmentation tools. If you look at the only application AI company that's really taken off is cursor and the AI coding category that has not replaced any software engineers. It's very much augmentation. And if they had tried to go full replacement,

they would have failed. They've been like, just trying to make engineers more efficient and it's because there's this last mile problem that you encounter where you still need human judgment because there's all this context that they have. There's like unexplainable things that humans still currently understand that the AI just doesn't get. So you have to correct it. One example of this like everyone's talking about AGI and I we use LinkedIn a lot at Pylon. We do a lot of LinkedIn content. I write a lot of posts and the joke I always tell people is look, it's Until Claude can write a good LinkedIn post, I don't want to hear about AGI because it still cannot write a high-quality LinkedIn post. And so going back to the first point, though, everyone's talking about human replacement with AI, but that's not what's happening. That's not what's working yet.

It's actually very much been a humans plus AI market. And some categories, as an example, I think AISDRs were like one of the biggest things right after. chat UPT, like everyone's talking about how cold emailing is dead, AI is going to be doing all of it, and somehow I still can't find anyone who's using AI STRs. So something's wrong. Wish they worked because I would love to use them. I would love to infinitely scale our SDR capacity, but for some reason, it's not working. And I keep asking, I'm like, I want a case study. Like, who, like, find me someone who's really crushed it on the AI STR side. And so I think that's an example where you try to go to the extreme and try to replace people completely.

And there's a last mile problem. And instead, what has been working in the market is human augmentation, where you just make people way more efficient. And like in the customer support category as an example, there's some segment of tickets that you can fully automate with AI. And there are some companies that focus on like the simple ticket deflection and optimize selling to companies that only have simple tickets. But most of the hard work is still getting escalated to humans. All the simple stuff was actually quite easy to answer in the first place. And so I do the math here. Let's say you have 100 tickets and you bring in an AI agent solving 50% of them.

Well, guess what? Those 50% were the ones that were the easiest to answer because we already had a knowledge-based article about it. We already had some content written about how to solve that problem. And then everything that gets escalated actually is like the 90% of the work that is still there. And so that was one of our realizations in the market is there's the full replacement narrative of humans is not what's actually working right now. And actually the human plus AI model is working really well. In customer support specifically, that's what we've latched on to is you need some segment of ticket deflection for the simple stuff because you still want that. It's still valuable.

But actually, you need to focus on the majority of the work that's still getting escalated to people. And for us, we kind of abstract. this shift of how people work of the human just doing the work to now having cursor as like a coding agent to help them do the work. We abstract this into a broader idea of going agentic. And so the old, the traditional way of doing human work was you do the work. Right. So in customer support, that means I go, I get a ticket. I route it to the right person.

Then that person does some investigation. They escalate it to some people. They write a reply, et cetera. to now an agent does most of that work, and then you are delegating, you review the work, and then you delegate more to it. And so by the time it shows up, it's already looked and gathered all the context,

it's already asked the people questions, and you're just saying, okay, do I approve this work, or do I want to direct it to do some more stuff? And so this is the same thing in coding, before you used to review the code, write the code, test the code, etc. Now you just tell an agent what you want it to do, and then it goes and does all that work for you. And so you're just delegating work. And so that transition from doing the work to now orchestrating agents that do the work, we call going agentic.

And so traditional versus agentic. Is there a corollary between the human plus AI solution with the last mile problem for something like a Tesla self-driving? There absolutely is. I think back to the autonomous trucking companies where it was like, we can do 99% of the driving, right? But the problem is someone still at the end has to unpack the car. And so you can't actually get rid of the person. The person still needs to sit in the car the whole time. For Tesla in particular, I expect that, hey, yeah, for example, having the human in the car still with a steering wheel to take

over when needed allows you to get a lot of the benefits of autonomy without having to wait until it's perfect. So, hey, maybe you have to, like, park it in your garage and that's it. And it's great that you can get 99% of your drive done by AI, and then you park it yourself. And that seems like a good trait. And then also, I feel like it's easier for a company to incrementally iterate from that point, rather than have to wait and be like, okay, we're only going to enter the market

when we're 100% of the way there. There's just so many edge cases. And so same thing that we're seeing with our AI in our customer support product is like 90% of the time the answer is right, but there's cost when it's wrong. And so you still need the human to validate whether it's right and whether, hey, the right steps were taken and the logic of what it used makes sense.

Is that fundamentally that, human beings are much smarter than we give ourselves credit for or just so much better at pattern matching than an AI, at least today can be. It's interesting. I do wonder to myself if it's a context problem, like the way companies operate today, there's so much spoken word context that doesn't get captured somewhere. And if it did, like if for example, every conversation at Pylon ever had been recorded and logged somewhere, then maybe the AI

I would be able to do it. So I don't know if it's, I think part of it might be a context problem. Part of it might be like a model problem still where, hey, it can't understand a lot of contexts at once. Like I run into this where I run these really long running jobs and I start to see it get confused and it starts to forget the thing that we had been, I had been talking to it about like two hours ago because there's so much data now. model limitations are probably a combination of, hey, just like the models aren't good enough

and the context is not documented in a way that is consumable for it. So I think it's probably some combination. And then the other thing, I think Sam Altman talks about this, where it's something about how humans have, like a human by the time they become an adult, have had so much information and training and by the time, let's say, I employ a worker, I get all of that context. It's already been built out. Someone's already invested all this energy into feeding and clothing and teaching by the time they've gotten to me where with the agent, in some ways, you have to like restart a little bit. And they don't have any of the context that you need for whatever job that you're trying. They do for some amount, but I feel like there's some like

level of investment that's still needed that still needs to happen essentially. You're not hiring a newborn. You're hiring somebody that's grown up. Exactly. Got to college, oftentimes master's, then had 10 years of experience. And then you're just adding on this last module that this new experience that they hadn't had, but they have all that as a bad. And they have a lot of contexts that the AI is not going to have. Right. So they've worked a job for this specific role. And they've learned from people that are really good. And that's part of the reason we want them, right? Because they have,

differentiated experience from someone else, and the AI is going to be the same thing. It's kind of an interesting way to think about hiring. What model training has this employee already had, and what have they not? What context has that training been? It's a unique way to look at. It's also interesting because I wonder if a lot of model selection in the future will be more like an interview where you're looking at a resume of the work you've done, and is it really, really good?

Right? Because right now we open AI and Anthropic are like competing on benchmarks. That are, they're probably like five of them, right? Thinking. Like, okay, you're better at thinking, but are you better at selling a product? There's probably some other model that might be better at selling the product. They'll have evidence of doing that and some sort of case studies around that. I think in the future we'll probably have like more competition of the specific details

of how good a model is versus just how intellectual it is. It's actually something we talk about for our sales team right now when we're thinking about our team and we're like, hey, this person's really smart and we hired them because they're really smart, but they lack intensity. Anthropic is probably optimizing for intelligence, right? Are they optimizing for intensity, which you really need for someone who's like trying to go hard at a number?

I don't know. That seems that's like another quality that like is not, no one's talking about that, right? And so there are probably these other dimensions or other, like, specific pieces of context that are relevant for specific roles that, yeah, I think we're still so far away from. I have found from hundreds and hundreds of conversations with founders and great business builders, I have found three predictors of intensity and of ambition. One is heavy trauma and childhood, many different variations of that.

One is immigration or moving to many different places, having to learn a lot of different contexts and a lot of different perspectives. And third is being part of sports teams, either individual or team sports. Those seem to be the three most predictive of someone's ambition, someone's ability to be relentless in their position. That's kind of funny. Some people talk about tiger parents, especially in SF,

I think a lot of my friends who come from immigrant families, especially like Chinese or Indian. They're like, yeah, Tiger parents, like, get into the school, grind SAT. And it's funny, I tell them I didn't have that level of intensity for academics. Like, I was a solid A-minus student always. I felt like it. In my head, I didn't really know the difference between an A-N-A-minus. I was like, oh, it's A-minus is still an A-M-A.

But what's funny is I did have a tiger girlfriend later. And what I realized for myself is so many people, their parents push them so hard to get into a great college, and then let off the gas. It's like, okay, I got them there. They'll figure it out from there. But then, like, a lot of these kids are so burnt out, and they're like, oh, like, that's it. That was the goal. I'm done. Or then the intensity drops afterwards.

And for me, what happened, it's so funny. actually, when I was an undergrad, I dated someone who basically told me I was not ambitious enough and not good enough. This was at Purdue? Yeah, I was at Purdue. And I feel like that was like my tiger girlfriend moment where I was like, shit, well, I'm about to enter the workforce and I had a good job lined up as a software engineer at Airbnb. I was going to make more money than my parents did, like all these things.

But suddenly the ceiling's raised. Right as I'm graduating, I actually think that was pretty impactful for me where it's like, oh, you can do better. Right? You're not good enough. And that happened at a moment in time where I was becoming an adult, not, hey, like, get into a better school. It's like, no, the real world. Now you have to, like, go win in the real world. And so I think I had this, I got a great childhood.

And I also got the beat down at the end of undergrad of, okay, like, actually, like, actually. actually the ambition level should be really high. And to be fair, like I was already ambitious, but I feel like this was fuel for the fire of like, okay, there's real world impact for not being greater than I am right now. The whole concept of tiger parents and tiger kids, I think the biggest tradeoff outside of trauma and not being happy people typically,

which we're not talking about happiness here, is that they end up being extremely fragile. If you are so traumatized into only getting A's, you're never going to get that C. And life is about getting C's in certain areas and building up those skills. I'm just learning golf for the first time. Support for today's episode comes from Square, the all-in-one way for business owners to take payments, book appointments, manned staff, and keep everything running in one place. Whether you're selling lattes, cutting hair, running a boutique, or managing a service business, Square helps you run your business without running yourself into the ground.

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Whether you're selling lattes, cutting hair, running a boutique, or managing a service business, Square helps you run your business without running yourself into the ground. I was actually thinking about this other day when I stopped by a local cafe here. They use Square and everything just works. Check out as fast, receipts are instant, and sometimes I even get loyalty rewards automatically. There's something about businesses that use Square. They just feel more put together. Experience is smoother for them, and it's smoother for me as a customer.

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fail at things and have to relearn things that a lot of first generation immigrants are suffer to do 100%. I also think another thing is seriousness is like very valued by a lot of people and especially me as well actually when I met my co-founder Advith one of my two co-founders Advith I mistook him as I basically valued him less because he was not a serious person. in his demeanor. And that was a huge mistake. Turns out that seriousness does not correlate. In fact, sometimes it's the opposite.

Actually, like, being able to just, like, laugh about things and smile about them and, like, enjoy life. I actually think it's an advantage. It's anti-fragile. It's anti-fragile. I, like, I used to be a way more serious person. And then, as I've been humbled more and more, actually, I have more fun with it. And I'm like, this is just part of the rut. And I think it allows you to just be more open.

This comes back to the very beginning where I was like, okay, what's the motivation behind starting the company fun and adventure? Like, if I were too serious, I wouldn't admit that to myself, which would be a mistake. I wouldn't know why I'm doing what I'm doing. I'd have to like come up with some reason of like, oh, I encountered this at work. And therefore, like, this is my passion. And like, I'm going to go do it. Actually, no, I just love the game.

Like, I just love building, like, company building is fun and exciting. And my co-founders and I all agree that if you ask us, why do we do this? We'd say, because we can't not do it. We just have to do it. I've been thinking a lot since we had our pre-interview chat about this concept of building a business, fun, and venture. And why does it work? I think one of the most underrated aspects of it is honesty. and how a CEO is in one part of their business

is how they typically are in other parts of a business and when you meet a CEO that says I'm building this for fun and venture not to quote unquote change the world it's just much more believable than all the other pitches that you're getting as well. Now when I meet founders who are just starting out and they start telling me

one of the first things I always ask them is just like why are you doing this? Because I want to hear the honesty and most of them will not give a good answer. They're trying to be serious. And actually, it's really funny when we were in Wycombinator, Paul Graham, the founder of YC,

told us about how whenever he would do office hours with founders, the founders were pivoting, he would always ask them, okay, like, what other ideas do you have? And he would always say the founders would have to go through all their serious ideas before they got to the good ideas. they'd always give their like real business ideas first of things that they feel like could be a big business. And then at the end, once they're exhausted, then they start being honest with you. And you're like, hey, is there anything else you guys are thinking about?

And so the good example of this is, what was it, the Twitch guys, Justin Kahn and Michael Seibel, their whole thing. They were like building something and they were pivoting around. And so they're having one of these office hours with Paul Graham. and they go through all their ideas of the real business ideas that like make sense and will generate revenue and here's how and then at the end they're like well anything else you guys are thinking of and Justin apparently says something like well I've always wanted to just like record my life like a live stream and put a camera on my head and like start walking around and everyone thought it was so funny they're like you have to do that like we were talking about

this right before the podcast. It's almost like the memeable thing. Like it catches flame just so quickly. And you don't really understand why or how it's going to become a big thing, but it's just exciting and fun. And that's what turned into Twitch. Right? So they start filming everything.

They become like local legends in San Francisco. And eventually they realize, oh, people really like watching Justin game. And then they're like, oh, maybe gaming is actually the market. like live stream gaming is the thing that we should actually be building. And so you like don't know. That's one of those great examples. I'm sure there are many that don't work out, but where you are so excited about something,

you just go for it. And it's like not even the serious business idea necessarily. And because you're able to remove the seriousness, you can try things that no one else would. And you get outcomes like that, which are fun, exciting. And you find like the niche that no one else is willing to go explore. My view of the most underestimated aspect of whether a team will succeed is the relationship

between the founders. If you take two extreme versions, one is you have founders that don't really like each other or maybe we respect each other but don't really like each other, then they're going to try to build their business. They may pivot once, maybe twice, but likely once, and then they're going to say, well, we made our best attempt. But if you have, I've met founding teams, I've started four companies together. They just love working together.

They will do anything to make it work. They will forego their salary. They will take any humble pie. They will fly to Phoenix, Arizona, and talk to an engineer about their problems. There's so many downstream consequences of wanting to keep doing what you're doing with people they like to work with. It's such an underrated point, and almost no one talks about it. 100%. Between myself and my two co-founders, we were friends before.

we started the company together. I had lived with Advith for three years. Advith and Robert had met at Caltech, and they had lived together. And so we were all friends beforehand. And then the other thing, I had worked with other co-founders on random ideas before them. And I realized the why, the motivation I told you fun and venture needs to be aligned, right? Why are we doing this? The what needs to be aligned because then so many co-founders fight because they're like, oh, I want to go this way. I want to go this way. For us, it's like, who cares which way, are we going to. to get to a billion dollars in revenue. Are we going to become a trillion dollar company? Like who cares which market or which product, right? Are we going to win the game or not? We're playing the same game and we're aligned on the game. So it's just tactics. And, you know, so there's the why, fun and adventures. There's the what, hey, some order magnitude of revenue. And then there's also the how. And the how is kind of like the style in which you like to work and operate. and we call ourselves internally happy grinders. This is basically like a combination of optimism and like togetherness with high competency.

Called the seven dwarfs. Sure, yeah, you could. They're working all day long and singing. Just an example of the low ego. So part of that is also very much low ego. And when we started the company, all three of us came from similar backgrounds. We were all engineers at tech companies. and no one really cared who the CEO was.

I cared like a little bit, which is why I didn't have become the C. originally, but Advith and Robert did not care. Like they were, like no one was fighting for titles and no one has ever, we've never, we didn't even for the first two years of the company tell anyone who the CEO was. When people would talk to us, they would be trying to figure it out. And of course they'd find out eventually, but you'd be like, oh, Marty, what do you do at the company? I'd say, hey, I focus more on the go to the company. market side of house.

Right. Robert would be like, I'm focused on product and design. Admith would be like, I'm focused on post sales and engineering. And like, people are like, so what like, and they're trying to get the title. The title doesn't matter. It doesn't matter. And in fact, for us specifically, we're such a hive mind between the three of us where the most important decisions, the way we come to answers on everything is we just

debate heavily until we exhaust ourselves and then get to the conclusion. Let's say there's some big problem in the company, the three of us and now at this point relevant leaders will sit in a room and we'll just debate. And it's like it's so fun. It's like sport because you're really trying to find it. It's like you're just trying to get to the right answer. And it's fun. It's like exciting. And so we basically, I think of it like steel sharpening steel, we'll just like really iterate and go hard on each other.

And the thing is because there's a lot of trust, you can be very direct and honest and we'll share. and we'll shout at each other, and it's fun. Actually, when we were first starting the company, other people, our first employees, would hear us do this. And they'd think that world's falling apart, because we'd be like, but if we do this, like, this is going to happen, and then we're going to get destroyed by this company, and, like, people would hear it and they'd think the world is falling apart,

but actually it's just how we come to the right conclusions on things. We will just debate heavily until we find the answer. And then if in a session we can't find the answer, then that means we just don't have enough information yet to make the decision. So then we'll like exhaust ourselves and come back to it and talk about it again. I find in these conversations and debates the mark of a great relationship is when you finally come up with the answer, it's kind of an obvious answer for everybody in the room. Exactly.

There's mass agreement, not because everyone's trying to be cordial, but because it is the quote-unquote right answer. Yep, exactly. The other thing I'd say is when building a team, The really underappreciated thing is like likeability of people and like how much. You don't see that as a criteria. The question is just, do you want to work with this person? Right.

Like most people don't ask that question. They're evaluating on like, and especially I think when people join companies, they don't know what they're allowed to give critique on. And this is the ones, one of the things I like try to remind people is like, well, do you like want to work? with this person and that, like, would you work under them, right? Like, would you want them to be your manager? Like, I just ask those direct questions and then you get the answer, like, pretty immediately, right?

So, for example, we recently hired a GM for our AMIA region, which we're expanding into right now. And I kept asking myself the question when we were interviewing people, like, would I want to work for this person? Would I want to work for this person? Because if the answer is no, then, like, who else is going to, like, we talked about this before. When we're making content, you need to optimize for yourself and then in that way you optimize for a lot of people. So I kept asking myself the question, I'm like, would I be

excited to work under this person? Could they hire me? And then we finally found someone where the answer was yes. I actually like would really like to work with this person. And so in our hiring as well, that has protected the team and the culture a lot because you ask yourself, would I want to work with this person? We're a five days, a week in person culture, right? You're going to be sitting next to this person. You're going to be eating lunch with them. I like try to visualize this person sitting at lunch with the team. Are they going to fit in? Have you found that somebody that is initially unlikable but is so competent at their job that you end up liking that person? No. I think that we have not had that because they end up being a wrecking ball to like relationships and culture.

It's impossible to contain their unlikeability. We haven't actually made that mistake yet. There have been moments where there are people we've interviewed who are hyper-competent and clearly really good at their job, but they just don't have the qualitative side, and we just need that. And so you just have to show up every day and work with them, right? So do you want to work with this person yes or no? It's just that simple. It takes away from the fun and adventure.

Exactly. If you do that, then you're not going to want to show up to work, and then you're not going to want to work as hard, and then you're not going to want to work late. And so it just hurts everything else. It's more harm than good. You know Goodheart's law? that the things that people end up optimizing are things that get measured. And it's a fallacy.

Yep. Meaning that just because you can't measure how somebody's unlikeability affects the culture, it still affects the culture whether or not you can measure. Right. And sometimes companies just bias on these hard skills or very hard things that you could measure and you can prove. Right. In essence, believing that just because you can't measure something doesn't mean that it's not real or it doesn't affect the company. We're going through this right now with our marketing team,

because I fell into this trap where I was like, everything needs to be related to pipeline and like measurable. And if we can't, like what number is each team member going to contribute to on the team that is going to somehow produce more demos? And the funny thing is, like, what's worked at Pylon for marketing has been just LinkedIn content. That's been like the greatest marketing effort we've done.

and it's like the most immeasurable thing. Because, hey, we get some impressions, but like, okay, that doesn't actually matter in the grand scheme. We might have a post that's hyper-targeted that people see and then they book a demo from, but then another post that is less relevant, that like maybe more people will see, but it won't hit the buy. Whatever. You can try to measure it in all sorts of ways, but it's really hard to quantify the impact. All we know is that a lot of people book demos with Pylon and they're like, I see you guys all over LinkedIn. And so like you see the, you definitely have to see the impact somewhere.

I fell into that trap for marketing where this is the first quarter where we're going back to, okay, we cannot measure some of these efforts that we're going to put in. For example, category creation on this agentic support category, we have to like put that idea and philosophy into the market. And then that will bring in pipeline because then if people are believers of the philosophy, they'll look for the product that helps them work in that new way, and then we will be the product. And actually, this is really interesting. We think about this a lot.

The best companies usually don't promote their product. They promote an idea or a way of working or a new strategy. So some examples of this HubSpot, I didn't realize this until I talked to their former CEO. They coined the term inbound, which is really interesting. So before all of sales and demos were outbound. And then suddenly the internet comes around and you can have SEO and you can have people like who search you and find you and then that's inbound. And so inbound as a term didn't exist.

And so they pushed this idea of inbound. And then they were the product associated with inbound. They created the category and then dominated. They created the category. In some ways you latch on to a thing that's already taking off. An example of this is Jira. So Jira, ticket tracking tool for project management, right? They latched on to the fact that agile and scrum,

which were kind of like new philosophies on, hey, you have your to-do list and you, I don't know, it's like essentially like a to-do list philosophy. And people were doing it with sticky notes. And that was taking off and they became the product that could be associated with that and could be the product that actualizes like that way working. And so they grew with that new way of working as it grew, right? Because hey, you're bought in on scrum and agile being like the correct way to do things as opposed to waterfall, the old tracking way of building stuff.

And so once you believe that, then you're like, okay, well, how do I implement that? And then okay, here's the product. So your job almost becomes push the category, push the idea. And then once they are bought in, they will look for the product that is associated with it. The category becomes the rationale for people to point to, this is why I need this product. And if you don't have a category, then it's like, well, there's a sticky notes thing that I think really works well. And I want to spend $10,000 a month on the sticky note. It's just a hard sell to make.

Exactly. And so you ideally find some sort of trend that's already starting to happen or you introduce a new idea. So an example for us is, hey, all these people are using Claude. for customer support teams to try to help them answer questions. And they're trying to like put, they're trying to build what we call agentic support now. We're basically taking what they're trying to do, which is have AI do a lot of the support work for them.

We're taking it and we're giving it a name because it's everyone's trying to do the same thing. Just no one has coined a term for it. And so we're calling it agentic support. And then we're giving them a productized version of what they're trying to piece together. by using Claude and using skills and like custom prompts and all this stuff, we are giving them a polished product that allows them to do that work. Because everyone shouldn't have to rebuild the same thing over and over again, right? And there's probably an optimized version of that goes back to what we said.

Every cloud skill is probably a company waiting to be built. I love that meme. Yeah. I'll give you another one for why LinkedIn could be both important and immeasurable. There's a famous David Ogilie quote, who one of the top advertisers of all time, he said 90% of all advertising is wasted, you just don't know what 90%. Right, right.

And just because you can't track and just because you don't know, it doesn't mean that doesn't work. Right. And we've become this kind of over-optimized culture where every single thing gets measured. This is the origins of Goodhart's law, is it becomes a bias now, that if you just focus on things that are directly measurable, you end up very much limiting the business in its capacity. Yep.

Yeah, I feel that way. On this like category creation front, it's like, okay, how, like you basically just have to push content and then expect people will come. And then you have to message it over and over. Exactly. To the point where it's like the Kleenex, people don't know it's the business or the inbound. I didn't know that this is a term created by HUB. Exactly. Or it's just a thing that exists that's growing like another example of this is SOC2, right?

So Vanta operationalize how to get SOC2 certified, right? Sock 2 was already a thing and it was growing and people like needed to get certified and they built a product that latched onto that and the more they push SOC2 the more Vanta benefits right customer success is another good version of this Nick Mehta from Gaincite like really pushed the idea of customer success as a category and then they became the customer success company right Salesforce is interesting CRMs existed but the big innovation was actually SaaS so they were pushing a bigger idea, which is not even CRM, because CRM already existed, they were pushing

SaaS. So that's where they were like death to software. Software sucks. SAS is the future. And so they were pushing SaaS is the idea. Oracle databases, SQL databases, push the idea, push the category, push the thing, and then hey, the product is now available for what to actually use that thing or work in that way. For example, for us is like, hey, we're just going back to our roots.

We've actually done category creation before. Initially, we did it for Slack support, which was already a thing people are starting to do, but needed a product to solve. We built the category of B2B support, which many companies were doing support in B2B, but there had never been a B2B support product that was purpose built for them. And so we invented this term B2B support, and then suddenly we started hearing people say it back to us, which was exciting. And then now we just have to do the same thing.

create a genetic support, which is, again, a new way of working where you move from doing the work to now just orchestrating agents that do the work. LinkedIn is a part of your strategy. How much is media in a strategy? We were talking about new media. How do you look at that? For us, we just think about where our buyers are. And so for us right now, yeah, LinkedIn has been the primary source that has felt very repeatable.

I can't say that we've been excellent at other sources. We've done podcasts. We went on YC's podcast. We went on Andreessen's podcast. We went on Baines. We've tried, but it doesn't feel as repeatable for us. And then we also, for some reason, in customer support in particular, there aren't many thought leaders.

And I don't know why. Like if you look at sales, there are a million thought leaders, right? If you look at marketing, a million thought leaders. If you look at customer support, we would love to sponsor some people. We would love to build communities around people. But I think the persona is just different and less attention grabby than others. And so we actually go on LinkedIn. There aren't people posting about customer support.

It just doesn't really exist. That then goes into like, oh, us doing podcasts, we'll go on like go to market podcasts. We'll go on startup podcasts. We'll go stuff like that. But there aren't really. media, there isn't really much media for our category. One of the recommendations I have for you is probably the most underrated podcast channels are these hyper-specific niche podcasts.

You have these podcasts where maybe even 1,000 chief technology officers or 1,000 chief information officers listen to this one podcast. And when they show their stats, they're like, yeah, 175 people listen to our latest episode. But some of these channels are so valuable, so dense in their value, and also have these communities that I've built. It's probably one of the most underrated aspect of media. Everybody wants to go on the large podcast with a lot of views. They like the vanity. But when you look at the specifics, for us, our podcast, we've had over $10 trillion in AUM and guests alone.

Right. We've had sovereign wealth funds, pension funds. And for general partners, it's extremely relevant to be able to pitch to trillions of dollars. and we just focus on that knitting and go deep on that. So I think these niche podcasts are extremely valuable. Yeah, no, it's a good call out. We did an initial search before, didn't really find anyone, but you're right, there probably are some.

You should hire and start the customer support channel. I think especially when there's a new idea, again, we need to push this idea of agentic support. When there's a new way of working, people want more. community about it. They want more resources about it because it's new. Like, no one's figured it out. Like, if you're using Zendesk,

every, like, the Zendes Slack community is dead, right? Everyone already knows how to use Zendesk. There's nothing new. But agenic support, we have customers asking us. They're like, oh, are there examples of how other customers are doing this? Right. And they, like, want to hear from each other. I actually think one example company that did this really well in recent history is Clay.

Clay did a really good job of having a Slack community early on where so many people were excited because it was so new and so they were all like talking to each other and helping each other and like coming up with ideas and they kind of like the community just built itself because the demand was there and then they just allowed, they just captured it by giving them an official place to communicate and interact with each other, etc.

So I think you're probably right when it does come to how do we build out the category, there's probably, hey, a podcast talking to people who have implemented agentic support or are thinking about it or who went through the transition, right? There's probably a community aspect on, hey, we started doing customer workshops or AI support workshops where everyone knows they want to use AI, but they're trying to figure out how and they really want to just talk to other people about it. And back to the point on there aren't many influencers in customer support, there's also new conference.

Like, there are like these tiny conferences that are really small, maybe like a hundred people. And they're far more support leaders than 100 people. And I see the same one that every event. And there are clearly more than just a small group. And so, yeah, I think maybe we should invest more. The older that I get, the more I realize, A, obviously life is not that long, but even the day. There's only so many big things you could do in a day and a week and a month. And you have to focus so much on building these compounding advantages.

For us, the podcast is this network effect business. Every incremental guest brings in more views. Those views bring in the incremental guests. We're starting a conference as well for CIOs where now we could build from year to year. You just have so little focus. You need to really focus on these things. especially in the age of AI, that's actually going to compound versus something that's just going to be disrupted by AI or continuously you want to start from zero. The problem is a lot of these things that really compound are extremely difficult to start.

Yep. You have to focus so much resources, but they start to really compound quite quickly. I agree. Looking back over the last three years, what's been your biggest mistake as the founder's you have? So I told you the greatest gift a founder can give his product market fit. The next best thing, the other essential thing as you start to grow is people management and managing the culture and just generally like the people side of things. I went into this role, never having managed anyone. And man, I was not good to start.

Like horrendous. Terrible manager. I was basically operating like an ICE still doing the main work and jumping in just problem solving. We're reactive. I was reactive to things. I also just didn't understand exactly what motivated people. And also, Hadith Robert and I, as an example, are all the same type of person. We're very technical.

We think in a certain way. we don't care about affirmation, like we don't care about recognition, like titles. We don't care about any of those things. That's definitely not the case for everyone. And so one of the many learnings is one, understanding the different sets of people that you will hire because there are different types of people

who are exceptional, but need completely different styles of management and like want and desire completely different things. Right? There's going to be one person who's like obsessive, over being a perfectionist. They're someone who, and they just want to be put in a position to do the best, like just direct product work. Another really values recognition.

And this is another thing I started to realize, is like, man, the being in the CEO position or Adam Robert being co-founders, like people, like the ones who want affirmation and really want recognition, they just want to be told that they did a good job. It's like as simple as that. And that was so foreign to me.

Like it was something that like Robert Advith and I like don't do. I treat everyone initially like the way I treat Robert and Advith, right? Like, oh, let's figure it out. Let's debate heavily. Just treat somebody else like you would want to be treated. Yeah, exactly. But turns out that's actually not correct in a lot of cases. Actually people want to be treated very differently than you might want to treat yourself.

And so seeing more examples of how people, like their working style, what energizes them, what puts them in a good position to be successful at the company, that was a huge learning. And that's like really the people management side of things. It's funny. I took this to an extreme. We had an intern. She had a 398 GPA from NYU. And I just thought about, A, I need to figure out what motivates her. and B, what is she very good at?

Getting good grades. So I took it literally. I turned the summer into different semesters, and I would talk about her grade, and I would give her progress reports and everything because it was this known schema. So really plugging into people's existing schemas and what matters to them is highly underrated.

Totally. Yeah, I think that, and the thing is, there are so many great people who just need, like if you can figure out how to effectively manage more types of people, you can scale your company way more because you need many types of people. That becomes a bottleneck. It becomes a bottleneck. You won't find a bunch of people that are exactly the same.

And frankly, they also, for different roles, you need different types of people. And so that has been one of the biggest learnings for me, and I have gone through like a crash course on that. And now I actually would say I'm pretty good at it. I'm quite good. I think if you had asked someone who I was banging, two years ago, whether I was a good manager, they'd say, Marty? No. Like, no way. It's a terrible manager. Like, cancels meetings all the time. Like, doesn't, like, not paying enough attention or, like, guiding me and the things I need guidance on now, I feel like people would actually say,

oh, Marty's actually a really good manager. A lot of individual contributors struggle from management because at first it's so inefficient until they see the scale of it. Right. Yes, you're spending four hours a week with that person. but they're giving you 40 hours or 50 hours of work. So you have to really believe that management actually works before you start to really commit. This is a hard thing because I do, yeah, I do think there is a level of trusting people to present. Like, the ideal is, okay, you set a target or a high level goal and then they figure out the details of how to make it happen.

So, for example, let's say I come back from this podcast, I'm like, we need to go. hard on, so for a category creation, let's go harder on community building. The question is, how granular do you need to go in terms of what that means and how much of the strategic thinking do you have to do before that work then gets handed off to a person versus, like, for a mistake I've made is, hey, I'd take something high level like that, I tell someone who's not prepared to do that level of strategic thinking and like break it down and like think about the impact in all dimensions of it. And then you end up getting disappointed because you're like, Shit, like, why do you make the decision this way?

Like, it doesn't make sense. This is where I've also realized there's very much a matrix I have in my head now for each person at Pylon of, it's like a skill versus will grid. And you are, you basically should know for each type of person, if they're more junior, they should be very high will but low skill. And the way to actually get them to perform better is training, right? They need more guidance in, like, you need to teach them how to think. think and operate, but they will put in the most hours. And then you have the really high will or really high skill, high skill, and ideally their high will as well. But if you see someone, for example, starting to be less motivated, then that's a will problem, right? So they still

have the skill, but you have to push them in a different way. You have to figure out why they aren't happy. And that's like another lever that you push on. And that figuring out, that's just downstream of rapport. Do they trust you to tell you? But trust who to tell me. Tell you their will. Why they're unhappy. You know. You know.

You know that they're unhappy because you can just, I mean, that's almost a like if you can. But why they're unhappy. Why they're unhappy is really hard. Yeah. I think usually what I'm learning is, and this is the learning overall, you just have to trust your gut on most things. You probably already know the answer, but you like don't know how to explain it. I know something's wrong here, but I don't know exactly how to describe it. And that's a really, in those moments,

that's where you just have to get into like that debate mode with that person or yourself and try to get more details. Like there's one person who is definitely a high performer. And she was trying to describe to me why she was unhappy at the time. And she said it in very vague terms that I couldn't like put all the pieces together. But then I heard someone else on the same team say something. similar in different words, and it kind of clicked for me. So you kind of know, and you have to jump on these things, like, immediately once you start

hearing about them, because they will never go away unless you fix them. They only propagate. It's like a virus that spreads through the company. And so you have to address things quickly, and you have to trust your gut on a lot of things. And the other thing I've learned is that for every team and every function, you essentially have like these nodes of, like, trusted people and the people that you yourself, should go to and use as like a sensor for that team, someone you can trust who will be like, I don't think this person's doing well.

Culture, I'll allow. Culture, yeah, exactly. And so I've started to identify people like that across the company who really like you kind of you touch base with every once in a while and they'll give you the readout on what's happening. And having that direct line, they'll be honest about what's working what's not. And then you like have to really trust those people. And they might not have the right conclusions on what should be done about most things, but usually they're right.

Even if they don't know yet how to explain, like, hey, like someone might say morale's low on this team. Right. And it's like, okay, well, you have to dig into why that is. The hard thing is, so when you look at like skill versus will index, the problem I found at the stage of company is that you don't have time to train people very much, especially if you're reporting to the founder. If someone's lower on the skill than you expected, they're kind of done. You can't do anything about it. Like because even though you made the mistake in hiring them, you have to fire them. You have to because they might have the capacity to get better, but we don't have the capacity to train them or to change them. depending on the role and especially it's especially harder when you're reporting directly to

founder who is just like all over the place all at once and so there I think having some sort of frameworks like the skill versus will thing is super helpful for me and then also just moving quickly once you have like a gut sense on something something's wrong because it hurts everything and it's so funny actually the moment you fire someone usually everything gets better right away like The fear that first-time managers have, and this is what I had, this is what my co-founders had initially, is like, oh, who's going to take over this work? But it turns out the team, like, rises to the occasion. The top performers will help. They'll figure it out, right?

And then without the friction of whoever was causing problems, everything starts to move way faster. Everyone has more energy, the morale increases. Exactly. The capacity also increases. Capacity increases. Exactly. It's hard to, you don't, like, realize it. And this is where this happens.

I've seen this consistently with all of our first time managers, which we have many, where it's not as bad as what they thought. And one of the things they get scared of is like, what's the team going to think? Like, are they going to trust me? And then turns out this happens consistently every single time is you fire someone. And then immediately the team's like, oh, yeah, makes sense. Like they weren't performing. Like this should have been done a couple months ago.

Yeah, every time. Bring this all back. like the people management thing is so important and it's the next thing after product market fit. Product market fit you need, but even if you have it, but the culture sucks and you manage people poorly, the machine will start to decay and the best people will leave even if the company is doing well because, hey, there are a lot of companies doing well. Like you're not the only one. So if it sucks to work there and you hire a lot of great people, but they're sucky to work with

for their bad people who are not getting booted out of the company, that will kill your company for other reasons, even if you have great PMF. Some examples of this, Airbnb and Google are great examples of companies who I've heard stories where in the early days culture just was bad, like really bad, but the product market fit was so strong that it carried the company through. Where, for example, Google, what I heard from people who'd worked there earlier is that They were one of the first companies to be like open office, like, no managers. They fired all the managers.

They're like, just figure it out, like do things that are valuable. And so they would say like vague things like that. And then there was zero direction. So people in the company were building the same things, no priorities, no priorities, like no one's doing anything productive. But the search business was so good that it didn't matter. And so even though they were crushing it in terms of revenue, and growing so fast, people were looking at, oh, how does the business run?

And they're trying to emulate, like, the business practices of Google. And internally, it's a shit show. Like, it's not working at all. And but the product market fit and the defensibility, especially, of a marketplace is so strong that it doesn't matter. You can have the worst team, worst everything, but the marketplace is so defensible that it'll just keep growing on its own. Airbnb, same thing. I think early team was really good. And then Brian has, I think he's talked about this more publicly.

This was the start of the whole founder mode thing that he talks about where, hey, like, the company kind of started to decay internally, and he had to go in and do a major reset during the pandemic. And so he kind of reset the company and put it on the right path. But for a long time, the company was not internally doing well. And it was getting really inefficient and slow. and some of the leaders they had hired were not helping the company. And so it was starting to decay.

But again, the product market fit was so strong. It's such a defensible business that it doesn't matter. You just keep running. Well, Marty, we only got to half the questions. This has been an absolute masterclass. Thanks so much for stopping by. Yeah, David. Thank you so much.