This Week in Startups - Snowflake CEO Frank Slootman: victory through taking ownership, increasing velocity & cultivating talent | E1362

Episode Date: January 18, 2022

Frank is the Chairman & CEO of Snowflake, a data warehousing company he joined and rapidly accelerated in 2019. Frank led Snowflake to the largest software IPO in history (his third massive IPO as CEO). Previously, he grew Data Domain from $0 in revenue in 2003 to a ~$776M IPO in 2007 and then grew ServiceNow to a $22B market cap. In this episode you will learn the principles Frank uses to achieve outlier outcomes. Attracting and cultivating performing talent. Getting the wrong people off the bus fast is critical. Frank prefers "drivers" to "passengers." Without risk-taking, the business will stagnate. Left to their own devices things slow to a "glacial pace." CEOs should push to find the true limits of the organization. Intellectual honesty is required. Copy-pasting strategy from previous roles is unacceptable. You need to develop deep conviction, while maintaining humility to course correct when you are wrong. Culture and reputation are defined by your actions. CEOs must maintain an incredibly high bar. Show Notes: (00:00) Jason intros the interview (01:44) Why Frank decided to write the book (order here: https://ampitupbook.com/)  (05:30) Why "all great products start with great architecture" (09:49) Intellectual honesty is integral to diagnosing problems (11:38) Marketerhire - Get $500 off your first hire at https://MarketerHire.com/twist (13:09) Taking over and increasing the talent density on a team (15:54) Why most organizations avoid confronting and correcting mistakes  (23:23) Fellow - Sign up and get $1000 in credits at https://fellow.app/twist (24:50) Managing intensity (25:39) How hiring top talent leads to victory (the definition of victory is breaking the enemy's will to fight) (28:19) Relationships and reputations are defined in the hard times by taking ownership (31:47) Taking risks is essential to success in business (32:53) Keep high standards, people pitching need to be bursting with excitement (35:42) FanDuel Sportsbook - Sign up with promo code TWIST to place a special $1000 risk-free bet at https://fanduel.com (37:32) Drivers vs. passengers, getting the right people on the bus (40:38) Organizations should be governed on influence, people need to go direct (43:30) Why Frank is still optimistic about America and entrepreneurship (48:39) Things cannot be all about you as CEO, the organization needs to be empowered to be accountable (51:22) The difference between people that start things and the people that run things (54:17) Intellectual honesty is the bedrock of being a great operator (57:37) Increasing velocity by narrowing scope (1:00:55) Being mission-driven by "Starting with Why" (1:02:34) Most people don't lean in enough when managing the growth model of the business (1:06:57) Setting big goals (1:07:53) Ubiquitous win-win deals are not possible Buy Amp It Up: Leading for Hypergrowth by Raising Expectations, Increasing Urgency, and Elevating Intensity: https://ampitupbook.com/ FOLLOW Frank: https://www.linkedin.com/in/frankslootman/ FOLLOW Jason: https://linktr.ee/calacanis FOLLOW Molly: https://twitter.com/mollywood

Hey, everybody, we have what I think will be a top five to 10 interview in the history of this week in startups. Today, I interview Snowflake CEO Frank Slutman. Now, we're having no news on this program, because that's how strongly I feel about this interview. I do think it'll be a top 10, top five for many of you. I interviewed Frank back in December about his new book, his career, his management strategies, and how he gets the most out of his employees. He's old school, and he believes business is war, just like I do. This is the perfect interview to start your day with, you're going to come out of it, wanting to run through a brick wall. I kid you not. He is Hall of Fame twist for sure. His book is coming out Wednesday, January 19th. It's called

Amped It Up, leading for hypergrowth by raising expectations, increasing urgency and elevating intensity. What a title. What a subtitle. So do me a favor of pre-order today and enjoy the interview. He's amazing. This weekend startups is brought to you by Market to Hire. Need expert marketing help fast, hire vetted marketing specialists this week from the company already used by Netflix, Allbirds and more. Get $500 of your first hire at marketerhire.com slash twist by using code twist. Fellow.app is a game changer for all your one-on-ones and team meetings. Eliminate time-wasting meetings today. Go to fellow.app slash twist to get $1,000 in credits. Fanjul Sportsbook. When you refer a friend to Fanjul's Sportsbook, you'll be entered for a chance to win an all-expenses-paid trip to Super Bowl 56 for two people. And if you're new to Fanjul, you can also sign up with promo code Twist to get your first bet risk-free up to $1,000. All right, I'm really excited for our next guest. He's one of the great software CEOs of our time, and he is running a company that you know called Snowflake.

And he just finished a book that I believe will become as important as Crossing McCasum, Good to Great, and some of the other five dysfunctions of a team. In other words, required reading, delivering happiness for startups in Silicon Valley. His name is Frank Sleutman. Is it Sleuteman or Slautman? Sleutman. Sleutman. Sleutman.

Okay. Listen, Frank, I finished the book this morning. I re-listened to a couple of chapters. You guys were nice enough to send it to me, just sincerely as one author to another and somebody who's been in business, you know, maybe a decade, less than you, really, really accurate, inspiring, and concise.

Why did you write the book? Because the book is so candid. You know, there's going to be some people who say, like, hey, this book is really candid. This guy's a bit of a samurai. You don't need to write the book. You've had three successful stints, building huge companies that grew, you know, really fast.

Why did you choose to write the book and maybe bring a little heat? Yeah, you know, it's a good question. I sometimes still ask myself that question as well. But, you know, in 2010, I wrote a similar book, but much shorter form was only based on our experience at data domain. And I wrote pretty much for the same reason is to be able to share observations with what I call fellow travelers, people that are living in. in a similar circumstance and could really recognize these scenarios and situations and ways

of thinking. And over the years, I got many, many messages. And, you know, I got this distinct feeling that people were deriving a ton of value from it. Not a huge group, but it's just that group that lives in a very similar circumstance. It felt to me like they were clutching it like a combat manual for entrepreneurs. And then I had sort of VC's pestering me year after year after year. when are you going to do a follow-up based on what you did at service now and then they ended up at snowflake and it's it so turned out that our our chief marketing officer Denise you know she was

big proponent of me you know writing out her book and you know she made it easy for me and uh she kind of pushed me over the edge otherwise i would have said to hell with it you know but we did it okay yeah and it's it really is great i want to get into um some of your operating philosophies just right off the bat of what made makes a great company. The book is particularly strong in talking about product market fit, getting the right people to Jim Collins and good to great on the bus, demanding and setting great targets.

And then also sales. You really double-click on building a great sales culture. So let's just start with product, I think. I mean, product team sales, I think, are the three notes here. Which one is the perfect place to start for you? I would just start with product, you know. Yeah. So let's talk about product and how to get the product right.

Because you've done this now three times for people who don't know. You did data domain where you were taking going up against the tape backup people in the early days, then service now, helping people manage their digital workflows. And both of those IPO became worth of fortune. And then you decided to become chief executive officer of Snowflake, which was incorporated inside of a couple of venture firms. And is I think now the only SaaS company that hit $100 billion as a startup in this cycle for sure.

So one of the great successful, three great successful companies, but snowflakes off the chart. So what is your philosophy of building great product? You know, great products all start with great architecture. And I actually mentioned this a couple of times in the book as well. And the reason that it sounds obvious, right? But you look at what really happens in technology that people approach. things very, very incrementally. In other words, they take legacy of technology and then they try to sort of roll that thing forward, you know, in terms of newer features and newer platforms and so on.

You know, what Snowflake did is also exactly what we did at Service Now and at Data Domain is they started a clean sheet of paper. You know, they wanted to, you know, envision, you know, a great product and then worked their way back to, well, how do we do this, right? So it wasn't incremental, it was completely non-inceremental. That's a very important message that we, by the it's not just about product. We talk about everything in terms of let's not be incremental. Let's think about, you know, if we had to start over and we had nothing, how would we do it? So we get this very crisp, clear, inspired way of looking at things as opposed to, you know,

we're going to take the same old tired stuff and, you know, put some lipstick on the pig, which is very common, by the way, and the world is offered. And we just resist that. And, you know, I've often quoted the late Steve Jobs because, you know, I was just a fan of that non-compromise. unyielding mentality that he had about everything. It didn't matter how minute detail, you know, and it had to be insanely great. And it's like, man, you know, you just need to remind yourself all the time as well as the people around you that look, that's what we want to aspire to, okay?

The product needs to excite us, otherwise it's not going to excite our customers, okay? So, you know, you bring that standard to the game, then a lot of doors are opening that otherwise, you know, you couldn't even have envisioned as being. opportunities for you. And it really is about making the product when you look at what's existing in the marketplace, 2x to 10x, it has to be a magnitude better because I think this sort of dovetails into the next point, which is when you're running an at-scale sales organization, you know, that if the product, if the product has market pull and people want the product and they're

talking about it, my lord, then you can, to the title of the book, amp it up, you can really amp it up. Now, that is exactly right. You do need 10x differentiation. You know, we often say the only thing worse than selling nothing is selling a few. Because if you sell nothing, you stick a bullet into it and move on. But when you sell a few, you get hope, you know, and then people keep funding it even though it's really not viable.

You know, technical founders are often so articulate and so smart and they have that personal presence where they can sell something. That doesn't mean you can hire around a person on the street in Minneapolis and give them a quota and send them off to the races and get some predictable yield, you know, on that investment, right? So you can't convert. This is the classic problem with the chasm. By the way, Jeffrey Moore talked about and wrote about over the last, you know, 30 years. People don't understand a difference between a founder selling something and a generic salesperson selling something. It's very different. Do you do need 10x differentiation? You know, I always say, you know, you're out of

the chasm, you know, the moment you can pretty much hire people at random and enable them. and have a predictable, consistent yield. You have a highly repeatable systemic process that you can scale. Before that, it's business development, and you're still in the chasm. You don't really know where you're doing that. You're looking sort of in the desert for water and hoping that you find some. So that is a good indicator. If you don't have product market fit dialed in yet, you're going to have business development

people talking to the customers, trying to make custom software or listening to them, and you're going to be triangulating and just trying to figure out where you're at. But then when you hire just qualified salesperson, you give them some leads, if they can sell the product over and over again, come to work every day and get three or four meetings, hey, you got that product market fit. When you don't have product market fit, you talk in the book a little bit about, hey, how do you diagnose this? And you use the analogy of doctors.

You spend a lot of time running tests, diagnosing. What's wrong? What if founders get wrong? You sort of alluded to it with, hey, moderate success is the enemy of breakout success. You get two or three customers. Okay, now you're mediocre. you actually think this thing's going to scale to 3,000. Talk to me about how you do that diagnosing of the problem.

Yeah, well, we have tons of companies in Silicon Valley that are the walking dead, except they don't know it. And they have hope and they can't give up on it. The VCs can't give up, give up on it because they don't want to write off the investment. So they keep on going. There's no intellectually honesty. People cannot face their demons. They cannot really look at the problem as it really is.

and that's just human nature. The thing is, if you have no fit, in other words, you're nowhere near the target, right, you got to go completely back to the drawing board, you know, start to reimagine and rethink everything, you know, from scratch. It's a better scenario when you have a partial bullseye where, okay, I'm connecting, but I'm not connecting, you know, the way I want to, right? but I can iterate my way towards it because I am partially connected to it. People may not be chewing off my left arm yet to get it, but I'm triggering enough, you know, interested. I'm not figuring out what are my next steps.

And by the way, at data domain, we literally had a scenario like that. We had a partial fit, but our product was small and slow. So it was not applicable, you know, to the vast majority of workloads out there. But since we knew that, you know, we just targeted that with an enormous amount of energy in Zeal, and we overcame that over a number of years, and we built an insanely big, fast, you know, ass kicking product, and it works. But the initial product, you know, had poor, you know, market fit. I mean, we even debated just, you know, not selling going back into R&D mode, this is in a 2004 time frame. But back then, you couldn't. I mean, you couldn't

just say, like, well, I'm thinking you couldn't even raise money on that basis. You couldn't stay alive. So we have to try and sell through it, you know. Do you want to get ahead? on your Q1 marketing goals, I know you do. And wouldn't it be nice to have a ringer to help you out somebody who can. Well, with market or hire, now you can. Marketer Hire gives you access to expert freelancers on demand. No long-term contracts and no risk. That's critical. So you can hire experienced specialists across the most valuable marketing disciplines. You know the ones that can really move the needle for your company startup or your side hustle? Paid social, paid search, growth, SEO, and you can even have a fractional CMO. That's chief marketing officer. So again,

no long-term contracts and you can cancel at any time. They take all the risk, you get all the benefit. If it's your first time working with freelance talent, you're going to start with a no-risk trial. Only hire what you need and stay on budget with hourly, part-time or full-time agreements. You get to choose. Every freelancer, our marketer hire, goes through a rigorous vetting process with industry experts, and freelancers from marketer hire have been hired. at over 1,500 companies. So you get the benefit of all those companies having used the service. This includes top brands like Netflix, Allbirds, and Lambda School, huh?

Here's your call to action. Get $500 off your first hire at marketerhire.com slash twist, and make sure you use the promo code TWIST, Twist. You could also get a free consultation on who to hire based on your needs and goals. That's $500 right now at marketerhire.com slash twist, and use that promo code. TWIST, please. And really looking at

this incrementalism, if you're making an incrementally better product, okay, that's not going to work. It's not going to become an at-scale product. But if you do have, yeah, like you're saying, you're a little bit off the target, then incrementalism does work, because it might be a speed issue,

it might be an interface issue, it might be some feature you haven't thought of, and I don't know if it could be pricing, so you can kind of go down that iterative process. Talk to me about when you've taken over these companies, looking at management. You kind of were honest that you hired, you know, people with potential, not people with experience for a lot of your career. And you're pretty many times in the book, you're self-deprecating. And I think that's what makes the book even more credible. You said, you know, I'm just going to hire,

you know, whatever, mid-level execs. And you've changed your philosophy on that. So let's talk about getting people on the bus and your philosophy of hiring. and then what you demand of people because listen, you're a pretty demanding guy in terms of outcomes. So let's talk about how you get people on the bus and subsequently, you cut a lot of people when you came into Snowflake and you read the management team

and you talked about that. People were shaken according to what you said in the book. So let's unpack it. Well, getting people off the bus is sort of job number one. In other words, you immediately have to start sorting you know, what am I going to keep? What am I not going to keep?

It's not like, you know, I'm going to observe this for the next nine months and see what hits me. Because now you have a leadership crisis. You come in and people are like watching, what are you doing? What are you not doing? You know, are you going to preside over the status quo here? They certainly didn't bring you on to do that. No. So, but sometimes it's incredibly obvious and then you just move on it.

And, you know, other times, you know, it's obvious in, you know, it's obvious in, in other ways. For example, I may not know whether this person is good, bad, or somewhere in between. But I look at the results, you know, of that function and how that function is performing and operating. And, you know, we had situations, you know, where we at departments that were barely breathing. Well, I infer from that that the leadership, you know, is not the right one. And then we move on it.

Because, again, I can't sit around and wait, you know, for the lights to go on. So people get on the job, you know, the lights go on. And by the way, it's very obvious, by the way. When you hire good people, within one to two weeks, you know you hired a very good person, right? It doesn't take much to know that. It's very, very obvious. And it's obvious to everybody in your organization as well. Unfortunately, the opposite is also true.

You know, when you miss fire your own hiring, it becomes known, you know, very quickly as well, you know. Why don't people make the quick change after a mistake? Because I see this. I've invested in over 300 companies. I see it all the time. They make an error in hiring. everybody knows it. The founder knows it. The CEO knows it. And they put the person on a performance improvement plan. They pep, they this. Why do people do this? Well, they do it because they don't like

confrontation. That's human nature, unfortunately. That's probably number one. Number two is people don't want to, you know, fess up to making bad decisions. So in other words, their instinct is to defend the decision they made in hope like hell, you know, that things will improve. Scott McNeely was famous for saying, you know, fail fast. And that's an incredibly good philosophy because it means like, look, I'm going to be intellectually honest about what I did and didn't do. And I'm going to, by the way, you can do great by being a fast course corrector. You know, if you can culturally and organizationally be that way, I'm not talking about the CEO. I'm talking about everybody, you know, that is leadership capacity. You're way ahead of the game. But most organizations, you know,

they struggle to, A, recognize and B, confront mistakes. And we all make. mistakes, okay? And that's just byproduct of doing stuff, you know. Do you find that the people who've had some early success in their careers, when they make those mistakes, are able to look at them as lessons as opposed to taking them personally, and it's a lot of times, you know, people who are maybe haven't had success yet candidly, and they're trying to cover up, they're scared, and, you know, this is what sends them on this sort of path of mediocrity? Yeah. I mean, it's like they see it as a career blemish, you know, and one of the ways I try to really break that man to be just really fiss up to my own

mistakes and say, look, you know, I screw up too, but I clean them up, okay? And I do it fast, and I do it in front of, you know, in full view of everybody. And it's okay. And I want you to do that as well. And so that's a leadership issue. You know, you lead by example. And, you know, once people get that nuts, it gets a lot easier to say, okay, this is not working. Like I said, it becomes obvious very quickly in organizations that things are not working. It's just acting on it is another matter. You are a big proponent of velocity in all aspects of the business, whether it's hiring, planning, sales, product. You want people to try to go a little bit faster. Let's explain that because people come to you and you say in the book, they say, I'll get back to you. It's Monday.

I'll get back to you on Monday. You say, why not Tuesday? Like I said, tomorrow or Wednesday. And it flusters people. It makes them upset. How do you convince people? people to increase the velocity of their work and to make decisions quicker. What is your playbook there? It's actually not that hard because most people solve for comfort, not for purpose. If you've ever been on the inside of a California DMV, you know what happens when, you know, when people solve for comfort, they got to be there all day anyways. So why would I, you know, they're not inspired.

Right, right. It's actually quite easy to pick up the pace and drive tempo. Good people respond extremely well to it because they get energized by it. And then, you know, it becomes a chain reaction. You know, one person triggers it in another and the next person triggers it in the next person. So it becomes electrifying. Sometimes, you know, I do it just for the sake of doing it because I know it energizes and focuses the organization. Everybody gets pep in their step.

But the reality is there's always room up because people naturally move to a glacial, paste if you let them, right? So that's an easy pickup. You can start that, you know, in the next 15 minutes if you like, you know. So if you're in a company, somebody comes to you, they give you their, you know, plan for, you know, and you ask them five questions, say, hey, let's rebuild the model. Let's look at your plan again. And they say, okay, yeah, back in two weeks. You just say, hey, why don't we talk on end of the day, Wednesday, if it's Monday, and just see how they react. They react poorly. They tell you something, right? Yeah, but I've had customers do this to me. I remember being with Geico, the CEO of Geico's dot combs, he's also became an investor at Snowflake.

And we're talking to him. And he's like, look, I don't want to hear anything about your architecture and what a great platformer is. I believe all that. Check, okay, let's move on to real problems I have in the business. Like, for example, you know, we have much higher bodily injury claims in Florida and in surrounding states. I don't know why that is. You have one week to come in here and tell me how the product works in terms of solving those kind of issues. One week.

And we're like on our heels, okay, because we don't know nothing about insurance. You know, but that's how you create energy and pressure and focus. And hell, that changed our whole companies, you know, focus on verticals and industry context and all of that. So I've experienced it from the other side, you know. Yeah, I mean, demanding clients have a sense of urgency. They have a problem to solve. You're the solution. If you're not going to do it fast, I'll find somebody else who's going to do it fast.

And you're looking for that no excuses mentality in the book. I'll quote, we value traits such a strong task ownership, a sense of urgency, and a no-excuse mentality, people who get things done rather than people who explain why they can't. Do you find that the people who come up with the excuses can be trained, what percentage of them can be trained to embrace this, no-excuses mentality? Or is this just like something that comes in childhood or how their parents raise them, whatever, and you just got to move on from that person? Yeah, I don't know what it is psychologically, but it's definitely cultural. I mean, I can't, every time I go to Europe, I can't help be confronted with a culture of very, very poor task ownership. They all want to review on common and give you their opinion. I'm looking for an opinion.

I'm looking for you to own it. Take it off my plate. I want to never see it, hear about it again. But I don't want to, right? I mean, you do anything not to own the task. And that's cultural. And it's just something that people do. And it's toxic in organization, absolutely toxic.

It's toxic to not take ownership. And then when you're dealing with human capital, the great thing about America, this amazing capitalist operating system, is that when talent does not meet expectations, management can make a change. And if management doesn't need the expectations of the talent, the talent can leave for a better opportunity. But in Europe, you talk about this specifically in the book. I share your passion for this. If you want to get rid of somebody who just doesn't bring it, you have to go to court and say, or you have to give me your severance. It's hilarious. And they wonder why they're behind the United States in entrepreneurship, unpacked, operating, you know, in a at-will employment environment versus a take me to court because I didn't hit my metrics and numbers. Yeah, we all vote with our feet. Employees, you know, go where they want to, and they are their own entrepreneurs, and that's totally fine. You know, we compete hard for talent. But the opposite is also true. We part with people all the time. It's hard. I mean, it's not. not the fun part of the business, but unfortunately, when you're in leadership role,

confrontation becomes your middle name. You're confronting all day long, situations, people, topics, whatever it is. So if, but a confrontation is something you have to learn. It's not, it's not a natural instinct that most people have, but you can't learn it. You have to swarm through the ball instead of, you know what, I really don't want to deal with this. Well, that's too bad because you're going to have to, right? And that's why it's not for everybody. I mean, a lot of people want to be a CEO, and I'm always going like, do you really? Do you know where you're aspiring? too because for a lot of people it's psychologically terrorizing you know to be in a capacity like that time wasting meetings are brutal trust me i got so many people who want to meet with me and

a lot of the time there's no agenda there's no takeaway and there's no accountability well after selling his first company entrepreneur aden mirzai swore he would never attend another meeting without a clear agenda and he adopted the motto no agenda no attenda which is what i tell everybody today. You put something on my calendar? No agenda, no attenda. So, Aiden and his co-founders built a tool to make meetings productive and delightful for everybody involved. It's called fellow.app. And it's simple, beautifully designed, and it will help you stay organized. It's a meeting productivity platform where teams can collaborate on agendas, then track the key decisions that are made in the meeting, and hold each other accountable for the action items. It's a game changer for all your one-on-ones and

your team meetings, you'll never have to attend another meeting without knowing exactly what the purpose is and who is going to do what and what the outcomes are. We have to define success and we have to pick who's responsible, who's going to take care of all of this work that comes out of the meeting. So here's a call to action. Just go try fellow.app slash twist and get $1,000 in credits. You're going to join companies like Shopify, Lemonade, and Warby Parker, and thousands of others who are already using Fellow to make meetings the last. delightful. That's fellow.app slash twist to get a thousand dollars off. How do you manage being in confrontation all day long in this wartime stance because you want to win and then turning that off

and just leading a normal life? Or is the life of a CEO one where you're just a samurai? You get home and you know, listen, you still got the armor on. You still got the sword and you're just a fighter and that's just the nature of your existence. Yeah. I think the ladder is really what it is. I just have to tone it down, otherwise my wife will take me a lot. Yeah, you can't tell her, you can't tell her she's not hitting the expectations or whatever. I mean, it is something I see routinely with CEOs I work with when I've been a CEO and a leader. You know, you're constantly got that armor on. You're swinging a sword. It's just you have to change gears sometimes when you're in your personal life, with your kids, with your friends, but you do need to look at this as a war. One of the great

parts of the book is I love the fact that you're not afraid to say one of the great techniques is to make it so great to work at your company that you hire the best people from other companies and that gives you two huge wins unpack your aggressive stance on talent and competition in human capital you do you remember the old Highlander movies with Christopher Lambert you know not only would you know the Highlander kill you but he would also take your strength and become even more formidable in the process. So, you know, the old saying was, you know, I think it was Sun Tzu or U.S. Grant. It's like, I mean, the definition of victory is breaking the enemy's will to fight.

But when you hire people from other companies, you're literally breaking their will to fight because they're now joining you, right? So, A, you gather strength by hiring their talent, and B, you're weakening them, you know, by them losing that talent. That's why it's two strikes. Just totally demoralizing to lose somebody who's a game changer or in the Amazon Parliant's barraiser to a competitor because now they have your superpower. Awesome.

What are the other ways you demolish competition? What's in that toolbox when you really just want to crush their souls? Well, what crushes their souls is the intense focus on the customer in every single vector that you can think about it. You know, you want to have a relationship posture to your customer. And they need to feel that you've got their back, that you leave nobody behind. You know, you're completely on their side of the table. I talk about this all the time.

It's certainly part of our values as well. How do you act that out? You have to fully empower your organization to go to distance on that. The number one currency in business and any other human endeavor is trust. And when customers trust you, they just want to give you the best. business, you know, with our eyes closed, okay? Because that's, we all do that. When we trust, then we just hand it over. And by the way, when we don't trust, everything becomes high friction and everything becomes difficult. And we have pricing conversations and, you know, petty contract

deals, all this kind of stuff. But you build a high trust relationship. And by the way, I love having opportunities to prove our medal to the customer, you know, that we are coming through for them. Because if you just, you know, going along and everything is going well, that doesn't afford opportunity to build trust. But builds trust is when things are really not going well. What do you do then? Right. So... Do you have an example of that that comes to mind in your career? Oh, numerous. I mean, like in software, obviously, I mean, you know, things go bump in the night. That's just the nature of the physics of systems and software. And, you know, people can get extraordinarily upset. It's disruptive, reputational risk, I mean, all these kinds of things, right?

So what you do at that moment and time, how you react and respond to that, you know, is really important. I remember the situation where the CIA wants who was, I rate with me, was a very large pharma, and he called me up and reaming me out because he had double, overspanned by 100% his professional services budget. And, you know, he felt it was our fault. Well, you know, we went through the whole process, right? Instead of saying, look, you know, you did this through yourself, you know, I just said, I said, look, we're going to credit it back to you. Okay. And the guy just got quiet on the other side of the phone, you know? He's like, what?

It's like, we're just going to credit it back to you. I didn't say like, you know, you really did it or, you know, no, we're just going to credit it back to you. It says, I don't want you to be in this state of mind. You know, from that point on, you know, he became the biggest advocate, the strongest advocates, you know, I'd ever have. have, all we wanted to do is help us every step of the way. Did it cost us money? Yes. But, you know, they felt like, you know, we got their back, even though it wasn't even our fault.

It didn't matter, you know? You know what it reminds me of? It reminds me you go to a great hotel versus like a not great hotel. Go to a great hotel. You go to a great restaurant. You're like, this steak is not medium rare. They're not going to get into a debate with you. They're not going to look at it, slice it, take a bite.

A, this is medium rare, pull up the Wikipedia and show you medium rare. Oh, okay, you would like it a little more rare. Perfect. We'll get that right out to you. Apologies. You're going to go back to that restaurant? You're going to go back to that hotel? If you come in, you say, listen, there's noise in my hotel.

People say, okay, yeah, you know, nothing we can do. Or we're going to move your room. We're going to send your breakfast. That's when the brand is made, isn't it? It's in those moments. It is. You know, we do a lot of database migrations, which are lengthy processes, they're expensive, they're high risk in many different ways. And I see the fear,

okay? I get it, right? And, you know, I say, look, you know, I'm going to own this. Lock, stock, and barrel, right? I'm not going to own a piece of it. I'm going to own the whole thing, okay? And it doesn't matter your people are in there, then we have a system integrator in there. I'm going to own it, right? And that level of conviction, like, holy cow, this guy says he's going to, in other words, he's not holding the back, I'm holding the bag. Okay. And that sense of ownership that you can convey to a customer, like, look, I'm on the hook for this, no matter how many different parties are involved in this process, right?

So that's, that is incredibly important because people all of a sudden go like, oh, I'm not alone, and I'm not sort of, you know, I'm sort of venturing the unknown here, and I'm going to fail miserably and, you know, my career's going to get damaged and I'm going to get fired. And that, that's really how you differentiate, you know, instead of just being guarded. and like, oh, I will own my own little piece. You know, no, we're not owning our own little piece. We're owned a whole goddamn thing, okay? We're going to own the outcome, right?

We're going to own the outcome. You're going to be a hero, okay? That's what we're really saying. You're going to be a hero, okay? And it's on us. And you talk about this in the book. The human nature is to try to avoid risk, lower the cost, kill risk, and not take ownership. And that is not a formula for success if you want to be number one in your category.

Yeah, absolutely. It's a psychological mindset that if it's really pervasive in your organization, A, it's a pleasure to work there. B, it's just, it's functioned so well because everybody's got at each other's back. There's no cracks between people. In other words, there's no daylight between people. There's no daylight between departments and functions. No, they all overlap because they all own it together, right? When you get daylight between organizations, in the daylight between people, everything starts to, you know, fracture and fall apart. She really manage people's mentality towards that, right? I mean, you own it, not just your little piece and you're constantly sort of redefining

what your little piece is. Now, you know, we have a very broad definition, you know, what the ownership pertains to. All right. We're going to take a moment for a reading from the book of Frank, another great quote that we've pulled out. instead of telling people what I think of a proposal, a product, the feature, whatever, I ask them instead what they think.

Were they thrilled with it? Absolutely love it. Most of the time I would hear, it's okay, or it's not bad. It would surmise from my facial expression that this wasn't the answer I was looking for. Come back when you are bursting with excitement about whatever you are proposing to the rest of us. Let's talk about that quote. I'm packed. Yeah.

This is like the late Steve Jobs, you know, have incredibly high standards. You want to pitch something. I mean, be bursting what excitement about what you're talking about. Because if you're not excited, why would I be excited, right? So we're not peddling mediocrity here. You know, I'm just yawning and getting tired just having this conversation, you know, instead of being amped up about, oh, my God, this is really cool. I mean, I had an episode not a couple of years ago where this was a very trivial example,

but it kind of illustrates, you know, what's going on. We had our seven-year anniversary, and we had an anniversary t-shirt like every year we do, and they had a design for it, and they want to show it to me. I still don't know why they wanted to show it to me, but I wanted to show it to me. And I looked at it and I'm like, well, I felt nothing. So I asked this, what do you think? Well, you know, of course, you know, it went exactly as you just described the quote from the book, and, you know, she just grabbed the shirt and walked out of my office because, you know,

She's like, okay, I got the message. But it's like, it doesn't take that much more energy to say, to go from, you know, okay, to, oh, this is really cool, right? And you got to have a smile on your face, oh, this is really cool, right? Let it be surprising, okay? Even if it's as trivial as a T-shirt design, you know? Yeah, I mean, be fired up with enthusiasm or be fired with enthusiasm. Let's go. Let's make it work, people.

I love this. another reading from the book of Frank. I always operated as if I owned everything, whether I did or not. Didn't always sit well with peers or superiors. I've since always tried to increase our people's sense of ownership so they will act as owners. That mentality needs to be nurtured. So if people step out of their lane and they do more in corporate America, they get in trouble. It's not your job. But you're saying the way you got where you are, one of the great, and I'll be frank, unknown CEOs of our time. I don't think you got enough credit. This book and Snowflake, obviously, I think you're getting your flowers now.

I think the book's going to really help because a lot of young founders are going to read this. It's going to change their attitude. I'll let me tell you, some of these millennials in Gen Z, they need to change the attitude here because they've been only operating in an up environment. Okay, it's the divisional round of the NFL playoffs, and you know what that means. Eight great teams and four winners will go on to their conference championship. So, Fandual Sportsbook is giving new customers 30 to 1 enhanced odds when they make a deposit. That means you can bet $5 to win 150 on any team to win any divisional game.

If you're an existing user, you can still get a $50 credit when you refer a friend. And your friend gets the $50 too. Why do people love Fandual? Well, the app is so easy to use. It's totally safe and secure. And payouts take as little as two hours. So use the promo code Twist with signing up for a chance to win $150 off a $5 bet. It's a pretty good deal.

Download the Fandual Sports Book app. Use the code Twist and pick your tea before kickoff. Okay, and here's a click to Scramer. 21 and present in Arizona, Colorado, Connecticut, Iowa, Illinois, Indiana, Michigan, New Jersey, Pennsylvania, Tennessee, Virginia, or West Virginia. New users only, $10 first deposit, required. Must wager in designated offer markets. Max bonus, $150. bonus for Tennessee users fulfilled in site credit within 72 hours. Tennessee site credit

expires 14 days after receipt. Restrictions do apply. See full terms at sportsbook. Fandul.com. Gambling problem? Call 1-800 gambler or visit fanduel.com slash RG in Colorado, Iowa, Michigan, New Jersey, Pennsylvania, Illinois, or Virginia. Call 1-800-next step or text next step to 533342 in Arizona. Call 888-78-9-77 or visit. at CCPg.org slash chat in Connecticut. 1-8009 with it in Indiana. Tennessee Redline, 1-8009-9-7-89 in Tennessee. Or visit 1-800-gambler.net in West Virginia.

But let's talk about how we train people in society to not take ownership and to never, you know, to just stay in their lane. It's just so frustrating. Yeah, well, I very much had the makeup and the reflex. is in the instincts, you know, of a driver. You know, we talk about drivers versus passengers. But unfortunately, when you are a driver, you know, in many organizations, you get in trouble, you know, for the reasons that you mentioned because you're crossing boundaries and people feel

like all of a sudden, hey, you're in my lane. What are you doing in my lane? Right. And especially what Pierce is problematic. Not as much with, with superiors. I mean, Spiries are awful liking people that take ownership, but peers do not take kindly. I mean, I got my first CEO. job when I was in my early 40s, which by today's standard is kind of old. But that was, that was the first time I had my hands free completely. But the first time, in other words, my natural reflexes were something that what people wanted from me, whereas the 20 years before that, people didn't want that from me. They were like, you know, this guy spells nothing but trouble, you know, because he doesn't, you know, and by the way, you know, when you have a mid-level job, right,

the organizational boundaries are very, very dominant. You have to get things done through other organizations, no matter how mediocre they are. You've been on the CEO. It is all you, all right. It's like being an NFL coach. For some people, that is just fantastic news. That's the best thing ever. So it's a disposition that is very, very different.

I remember interviewing a large software company shall remain nameless. but this is like more than 20 years ago. I interviewed therefore a GM job in an enterprise capacity, and they said, look, I don't think we can handle a wild animal like you, you know. Bull and a china shop.

Yeah. But, you know, they were actually right because they were a very polite organization. They were wearing tweet jackets with letter arm patches. You know, everything kind of moved at a very collegial pace. And they're like, you're going to be like somebody that we,

don't know how to deal with. And they were right, right? They knew that I was going to be... By the way, I was really pissed off at the time because I'm like, you know, what's wrong with me? I'm going to be great. Yeah. But they recognized that that style was not going to be for them, right?

So it's different strokes for different folks. That's definitely... But I like hiring the driver types. I like the wild ducks. They do need to fly information from time to time. But I like wild ducks. I want to be able to... I want to rein them in instead of kick him up the hill.

Okay. Yeah. And you talk about this in terms of in your organizations, you want people to work it out for themselves. If they've got problems, nobody can use their seniority not to respond to somebody from another group. If there's a problem, your philosophy is, listen, go work it out. And if it comes to me, that's a failure. Quote, personally, I consider it a failure on my part of executives had to come to me to adjudicate. Let's talk a little bit about in a big at-scale organization, when people have debates, people have differences,

What's the best way to adjudicate these? Well, I don't think that organizations should function according to their chain of command. I mean, that may be what the military does for various reasons. But in organizations, you don't function on title and rank. You function in influence. Okay. And the York chart means next to nothing. I'll tell you, it's not like nobody cares where you're title is.

What they care about is what you bring to the table. So it's completely an influence-based organization. That's why it's lateral. I mean, you're not going to your boss to say, hey, can you talk to so-and-so over there or make an introduction? No, you go straight there. Why come to me? That's where the problem gets solved. Why wouldn't you go there?

What are you afraid of, right? That your boss is going to reprimand you because you didn't follow some crazy chain of command, but you have lateral influence-based organizations. Explain this concept a little more. I think it's important. It is super important. And people need to have the strength that are a conviction that they can go over to another part of the organization, you know, instead of operating vertically in their own cylinder. They go moving up and down in their own cylinder.

And then the protocol to move into another cylinder is a very formal up over and down, you know, type of thing. The organization should really function on a database, you know, with the orchard sort of being sort of a vague background to how things really work. I mean, organizations always operate through influence, but you really want to crystallize that and make that a de facto way to do things. And people send me emails, right? I always say, you know, you can escalate up, but you can't delegate up, right? Delegation goes down, okay? So I've got news for you.

Delegation is down, not up. You know, you start putting things on my plate. I got the wrong person. But people do that because instead of, you know, going across to the place where they need to be, like why don't I tell you, but people send me messages, we should do this, we should do that. Why don't you just go to the place where they're actually doing that? Yeah. Why is this coming to my desk?

Yeah. It's common sense. But the reflex is, well, you know, discomfort. You know, this is really my place to do this. Well, I'm telling you yes. And by the way, we call this going direct. And I talk about this every couple of months. And the reason is I bring in so many new people, 100 to 100 new people every quarter.

They've not heard it. So I have to sort of, you know, bring the message out again and again and again. And because most people have an organizational reflex, that's vertical and that follows the organizational blueprint. And it's not what we want. Jack Welch said, the job of management is to make people feel 12 feet tall. And number two, repeat the same thing over and over again, the mission, the strategy, whatever it is. And I think we've both experienced that. Another great rating from the book, Frank.

Where I came from, people were more resigned to their fate. and whining was a national pastime. But Americans always seem to think they can do better. The national spirit was quite energizing compared to what I was used to. Where did you come from and experience that? And has this changed in America? Do you have concerns about America? Or do you think there's just a bunch of people winding on Twitter,

people are paying too much attention to? No, I just, you know, when I first came to America in the early 1980s, from where? From the Netherlands. You know, I'm Yankee Dutch, you know. It's a big, what was so great is like the people here had a smile on their face and a level of buoyancy that I had never seen before. Bollancy in the sense of I may be a house painter, but, you know, I'm going to be this one. And then by the way, there was this total conviction.

And, you know, they were starryite about their own possibilities and had total confidence in it. And I looked at that like, you got to be kidding me. Because, you know, where I come from people just complain all day long about this and the other thing. And that's definitely cultural. That is why we have such an animal economy in the United States because, hell, it's cultural. It's not just that it actually works, but it's just like it's in the DNA. And it goes back hundreds of years. You know, people came here with nothing from miserable places and, you know, they were in charge of their own destiny and, you know, may take generations.

But, hell, they all knew they would improve themselves or they would improve things for their offspring. and theirs and so on. So yeah, it is a big deal. Now, is it the same today as it was 30 years ago? No, you know, clearly not. But I will tell you, I was at a founders retreat of one of our large investors a week ago. In Miami, there were like 70 or 80 founders there. Now, half of those were probably half my age.

Okay, so where they got. I mean, they're like in their early 30s, and they've already had exits. And I was so inspired hanging out with these kids. Not really kids, but to me they were kids. And all kinds of different businesses, all in various stages. And I just felt like, look, nothing has really changed. Nothing. They're the same people that we were.

They're exactly the same. And we had an incredibly good time talking to each other. And they were very animated, very focused, very energized. And it gave me an incredible sense of hope and optimism that there is a whole generation, you know, innovators and entrepreneurs and people are going to drive the economy. forward. And they're younger than ever. They're because back in the day that didn't exist. But I think- Yeah, nobody would put a 25-year-old in charge. If you were a 25 or 30-year-old

founder, they would be like, let's get a professional CEO in here. Let's get Eric Schmidt from Novell to run Google. Exactly right. That's exactly what people used to do. You're just too young. And that's not true anymore. You know, they don't care, you know. And here's my, it's just, you know, tons of women are now, tons of minorities. This is the great equalizer. Nobody cares what your flavor is. They only care about what you bring, and that's the way it should be. Yet, despite the fact that the system has never been more open, that you can take any MIT course on YouTube for free.

You can learn any skill you want for free or close to free on the internet. And you can start a company and all the tricks are out there. And funding has never been easier. Equity Crafts, Angel funding, seed funds. And it costs $100,000 or less to create a company. and get your first 10 customers. Despite all that, I think we have a professional complaining class.

People on social media, politicians, and the media who want it make it seem like the American dream is dead, when in fact, what we've seen in our careers is that it did look a certain way in the 80s and 90s, and now it's completely different.

And nobody is looking at the actual composure of entrepreneurs and how easy it is to start a company and how easy it is to start a fund compared to where it was 20, 30 years ago. Maybe you could talk about that a little bit. Yeah. And ironically, I'm now seeing in my own home country the same thing. All of a sudden, you know, back then, entrepreneurship, well, it just didn't happen. You know, you went Shell or Unilever or ABA and Armour.

You had a career path that was sort of preordained. You know, this is what you did. Now it's like, I mean, entrepreneurship is now a really big deal over there. They're changing over there as well. The money is there. The infrastructure is there. So you're going to see great companies coming out of there because, you know, nobody has a corner on talent. Talent is everywhere.

You know, you find the great universities. You're going to find a great talent. They're there. Yeah. And now you're seeing this entrepreneurial ecosystem. Again, all the tricks and are in books. They're online, YouTube, podcasts. You can just unpack the whole thing and build whatever the heck you want.

I mean, all the advice is out there. It's the great disintermediation, right? this most wonderful thing. There's no layers anymore, you know. You can just start a company. Why even wait? So there are times you need to check your own views at the door and bet on the conviction of others.

This was a very interesting quote. Unpacking for our audience. What do you mean by this? Well, maybe some examples. Sometimes, you know, CEOs are, you know, they need to have high conviction themselves about something before they want to sort of push off. and venture forward. And I use that example,

that's not always the correct instinct, right? Because now it's all about you. And, you know, things cannot all be about you. You cannot be the limiting factor, you know, to your organization. And even, by the way, you know, even, it may turn out to be that I was right after all, but I still, you know, should, you know, bet on the, on other people's instincts because it was just like, well, you know, if he does, if I don't sell

him, then it will never happen. You know, sometimes I just need to do it because my organization needs to feel like a sense of empowerment that like, you know, and by the way, they're going to be accountable, you know, and they want to do it, they want to be accountable, they want to prove to us that they're right. You know, do you need to have that energy and dynamic in your organization? So there are times where you do have to bet on other people's conviction, whether you're right, wrong or somewhere, somewhere in between. It's a cultural thing. as opposed to, you know, I'm the arbiter of truth and nothing happens without me being in full support of it. I wasn't in full support of it.

I let it go anyways because I felt their conviction was so high. I'm thinking, I might well be wrong, okay? How about that? I could be wrong. And I was wrong. And this is, you've empowered people to come to you with enthusiasm and told, hey, listen, if you're not excited about this proposal, why are you coming to me? Come back when you're excited about it. If you're excited with it, that's another proxy for conviction.

If you are convicted, have conviction. You as the CEO, you win twice here. If it works out, you win no matter what. It's a win-win. If the idea is right, the organization and shareholders and stakeholders win. If the idea is wrong, you just empower somebody to learn. The other thing is that we have really strong arguments about what are your reasons and what are my reasons, right? That's really important, right?

Why do you feel this way? Okay. It's not just like it's my opinion. Nobody cares about that. I had real reasons why I didn't like that deal. It was very far removed from our core business, and I had all these very, very credible reasons why it wasn't going to work. But they said, we're using it ourselves.

It's a great product. If we use it ourselves and we love it, we think we can sell it to others. That was their conviction. Well, their conviction was better than mine. Perfect. You sucked as a venture capitalist. You said you were terrible at it. Said you were actually pretty bad of being a board member too.

Here's the quote. I am not the best board member. I get impatient and struggle with the hands-off relationship boards are supposed to have with management. As I learned at Greylock, have the temperament of an operator, not an investor advisor. So you sucked at it. What makes somebody a great investor? What makes somebody a great board member? And why do you suck at it so much?

Yeah, you know, one of the things that's a useful distinction, you know, I think in Silicon Valley is, you know, we distinguish between, you know, people that run things, people that start things and people that fund things, right? And all those roles are different. Now, sometimes they coincide. In other words, you find more than one role in the same body, okay? But there is always the dominant strands. It's like, well, you may be a little bit of an operator,

but you really are diss. And the irony is we have lots of founders in Silicon Valley. We have lots of money in Silicon Valley. We don't have a lot of people that can run things. No. No. That is the single biggest limiter, a restraint constraint on company succeeding is because, yeah, we've got smart people that can build stuff and visionary and all these kinds of things.

Money, as you said, no object at all. Running things is a whole different ballgame. Okay. So, you really, and by the way, you know, sometimes the rules coincide. There's certainly a movement back where founders, you know, are now also trying to become executives. And I talk to a lot of these guys and gals, like I'm a founder, but I need to become an executive. If you really want to, right? If you really have that ambition and you want to learn and really sort of embrace it,

I actually think you can go far, right? It's just the founders that are esoteric and, you know, they have that weird founderitis. They call it founder writers in Silicon Valley, you know, it's like a disease. And it's, they become insufferable because, you know, they think that they, you know, they are the, you know, they're so special they can't be wrong about anything. Well, as an operator, you know, you don't have that, that, the privilege of being esoteric. You have to be, you know, leaders have a very different flavor to them than founders. But oftentimes, you know, founders can become executives.

And I think it's great when the founder says, I need to learn how to become an executive. I have to. Let's talk about that. Founders, yes, they get that God, king or queen mentality. I created this, I birthed this into the world, therefore I'm infallible, therefore everybody should bow down. You just said it.

Like, hey, maybe, you know, I'm wrong. And maybe I have to trust my team. And it's really like, listen, founders are one in a million. Like to come up with the creativity, to take some crazy product and make it in the world, that's hard. But then you have to move on to be an operator if you want to keep the job and you want to scale the company. What are the two or three things that being a great operator

does that founders just don't do naturally? Well, number one is intellectual honesty. It's a term that we use over and over. In other words, see the way as it really is, not the way that we kind of like it to be. You can't make up your own reality. It is what it is. And so many things go awry because we lack intellectual honesty.

I mean, an example is, you know, every sales startup problem I've ever been involved in or seen or observed, you know, it was always viewed as a sales execution problem, whereas in reality, it's a product market fit problem, okay? Salespeople can't solve these problems, but hell, they cannot phase up to the fact that their product sucks, okay? And that is where they got to go look for, you know, for improvement and solutions to the sales problem.

That's a classic issue in startup. lack of intellectual honesty. You've got to start there because you can't get an organization to be honest about what what its problems really are. Are you going to improve? Anything you do is going to be the wrong thing, okay? You'll keep firing your VP of sales another 10 times because that's not the problem. The problem is your product.

It's hard to look in for a founder and say, this thing that I birth is, you know, not perfect. And no amount of VPs of sales, no amount of SDRs, no matter of marketing, PR, whatever. we throw at it, we're putting kerosene on a log, well, we need to build a fire here. This product needs to be iterated on. That's just they're not objective. They also sold investors and pouring capital into it,

so they don't want to tell them like, dude, you might have blown your money here, you know, so. Sunk and cost fallacy. Yeah. Disaster. I mean, the quote that always sticks with me as you're talking is, and I don't know who the originator of this quote is, but great leaders define reality.

And if you can't define the actual reality, I mean, you're going into a battle against a bunch of, you know, whatever, Nazis who are hopped up on methamphetamine or whatever. Like, you need to understand the reality of the enemy you're up against. And the enemy sometimes is you. You're the gating factor for your company. Can you get out of the way and let somebody, and I think if we saw this at Twitter to a certain extent, Jack just left. He did a great job, birthing Twitter, you know, but it went sideways for a decade. You know, now he's out of the way.

Maybe the features grow a little faster and people. Just to be fair about the topic, founders need to have reality distortion, otherwise they would never start a company, okay? Right. So true. Yeah. So in other words, it's in other words, it's a necessary, by the way, I will say founders have the seed of creation, but they also have the seed of destruction in them. They're two sides to the coin. So, but when you're a CEO, you're an operator, I mean, your reality distortion becomes a huge problem.

Well, and it really goes back to that maximum as well. What got you here will not get you there. What got you here was the delusional nature that you were going to start this company against all odds, against all competitors, and everybody telling you is impossible. Now it's possible. It's working. Now you have to face reality like you're saying. Okay. Priorities.

This is a great part of the book. People have too many priorities. If everything's a priority, then nothing is a priority. You challenge people as an exercise. I quote, as an exercise I often ask, if you can only do one thing for the rest of the year, nothing else, what would it be and why?

When did you come up with this and how has this, how have you executed on it? You know, I found out early on it, if you can riddle things down to just one thing, you become unstoppable. Unfortunately, you know, people resist whittling things down to one thing because it's really hard to decide what that one thing is.

People are very easy time telling you what their top three, or their top five things are, because hopefully the right ones are in there, you know, somewhere. But sort of painting the waterfront, I can't tell you how many board meetings I've been in where a CEO would put, you know, PowerPoints slide up. And it's like one bullet after another. These are all the things that are our priorities. And you just know that, you're going to be a mile wide and an inch deep. You're going to be swimming in glue, moving like molasses.

I mean, the energy is leaving my body already, just watching, you know, a long list of priorities. I try to have that conversation, you know, if I could only do one thing. Because now we're getting to the point of what really matters here, what is really, really important, and what is just lesser important, and what is not important at all. And, you know, you go to MBA school, you know, they're really, really good at, you know, describing the entire waterfront, but I just want to know that one thing. And it's such a hard conversation, and it's a high-risk conversation because you could be wrong.

Well, that's exactly the point that you could be wrong. And by the way, if you have 10, by the way, you're already wrong now because you have 10 instead of one, you know. So in other words, you have already basically devalued, you know, what you should be doing because you're your time sharing now with all these other things, right? So I like to do things in sequence. In other words, prioritize, even if you're not sure, do it anyways, okay? Because in the process of doing, you're going to find out whether you're right or wrong or somewhere in between. and then you can adjust, right? But just all it apart, sequence yourself.

You know, Destan, by the way, things are going to go much quicker because you have a much narrower plane of attack. It's energizing the pace picks up, all these kinds of things, and you will figure out whether you were right or wrong, because as you're going to find out whether it is was a good call or a back call. And this is why business is a war. You have to have a strategy to win the war. You cannot fight a battle on 10 fronts.

We've seen this in every war in the history of humanity. When the troops get spread then, you're losing the war. You better take the hill and maintain the hill and then go on to the next one. I want to talk because this dovetails perfectly with it about people not having clarity of what the mission of the company is, reading from the book of Frank. These days, I see more and more companies that are fuzzy, if not hopelessly confused about why they exist. The mission clarity that used to be the norm has now become more. of an exception, which gives leaders who get it right a competitive advantage. And in a related

quote, a great mission helps prevent distractions that dilute everyone. Focus in every company I've ever encountered. Distractions are a huge threat. They often become a major source of self-defeating behavior. Let's talk about focus on the mission. And the thing about having a strong mission posture is that how many companies do you meet where I build a product and now I want to sell and then we want to go public and we're all rich. That's sort of the mentality. And I want to do a victory lap and be famous and do podcasts, okay? But what I really, what you really want to talk about is what are we here to do as an organization?

What are we going to create and bring to the world that is just eye-popping, that is so excited. I can't even contain myself, right? Let's talk about what we are envisioning creating here, right, as opposed to, you know, I just want to sell a lot of it and, you know, basically the company becomes more valuable and all these kinds of things. So to start with Y conversation that Simon Sinek teed up, you know, many years ago, it was great. And by the way, that conversation needs to be asked again and again and again, what are we trying to build? What will it look like, you know, when we're fully on the other end, you know, off the trajectory? This is also the battle I have with incrementalism. I don't want to

sort of plot my path forward from the current state. I want to envision the future state and I work my way back to the present and say, okay, how do I, how do I, you know, lock myself on to the future state? What do I do today? You know, that starts to advance myself towards the future state that I'm super excited about. That is new and innovative and compelling and game changing and all these things that cause people to want to get out of bed in the morning as opposed to, you know, I am where I am and I'm going to get 3% better here over the next quarter or so. Well, this was some of the crazy stuff with the Snowflake story. You come in there.

The place is, let's be honest, it's not being run properly, I think is a way to say it, being gracious. You come in and you start asking, like, what's our growth rate and why can't it be more? What was the reaction when you came in and said, hey, listen, I'm not going to have 9, 10 direct reports, going to have five. These people are going, these people are staying, and here we go. how did you manage that transition of, listen, there's a new Boston town, it's going to be different. Yeah. So one of the key questions I think boards should ask, like literally every board meaning, is what is the growth model? How do we think about growth? How fast could we grow if we just

pulled out all the stops and enabled every aspect of the business? What are the constraints? You know, when does gravity set in where, okay, I can't go any faster any further? And, you know, most people are, they look at you like, well, I'm not sure what you're talking about. We're already grown really fast and it's really great. I don't know why it's great because, you know, for some people, 30% growth is a huge number. And for other people, it's massive underperformance because it's completely situational, right? So in other words, what growth for your particular enterprise constitutes really insane performance, you know, versus do you have a growth rate that sort of at face value does look like okay, but you haven't leaned in yet? I mean, the thing that I

have learned over and over, unfortunately. I shouldn't have to learn this lesson over and over. But I have always, I've always leaned in hard, but in hindsight, I always could have leaned in more. In other words, I have never overdone it, but I have underdone it. And it's a hard lesson. So most people don't lean in enough because they have natural hesitancy, applying the resources, you know, damn the torpedoes, they're afraid that the board's going to say like, are out of your mind? right? I mean, all of that. You have natural hesitation that people have that they don't lean in hard enough. You start asking all these questions, you know, about sales productivity. By the way, you know, if sales productivity is creeping up, you're not hiring fast enough, right? That's a standard observation,

but they want to celebrate the fact that sales productivity is going up. That's actually not good. You need to drive it down and sideways. Now you are, you know, bringing on capacity, you know, at a rate that is correct. So the leaning in, aspect is something where people don't have a clear view. Like, you know what, how fast could this thing really go, you know, if I deployed, you know, myself on the mission? They can't answer that question, but the question never gets asked and they don't know how to think about the question either. So if you don't know the answer, just lean in, you know, harder and harder and harder until you get to the point where you start thrashing. Have I ever got to the point where I started

thrashing? Actually, no. And the reason is, as I lean in, I'm learning new things. okay right you're not blind i when you talked about some book this was a big unlock for me and i'm 50 you know now i've been i've been in my career for 30 years and i was like you know what it makes total sense i went to every time i had product market fit i was leaning in and i every time when i was in the magazine business we could have sold more ads on the podcasting business we've done that but in the blogging business we could have launched more every single time we had product market fit i could have gone 20 percent more and i think you have to know when you're on a straightaway. I was thinking like a race car driver. You get on the straightaway, let's see how fast

this thing can go. You're going 90. It could be going 205. And you don't know that, but you don't have to do it blind. You still keep your eyes on the road. You still look at the speedometer. You still look at your RPMs. You're still looking at the road ahead. Yeah, there could be curves, but this is not life and death. You usually have a certain amount of runway and cash in the bank. When you have product market fit, you must go for it because if you don't, a competitor will. I'll tell you a very quick story. This is a day of the main. We came off a $45 million a year revenue number,

and the sales organization wanted to do $100 million year after, going $45 to $100. That's respectable, right? A little bit more. Oh, yeah. Big double up. And they gave me the whole rendition, oh, everything they're going to do,

all the hiring, blah, blah, blah, this kind of stuff. And then I said, look, if the number had to be $125 million, what would you do different? When they started rattling off all the things they had to do different, and it was like, Why don't we just do that then?

So literally, they're like, this is two and a half. This is two and a half times. And yeah. We did do 125 million. Tripled. Yeah, they wanted to do. They were sandbagging with the double up. They never even considered that the triple up was possible.

Well, but they thought $100 million was a great number just because. Yeah. It is a great number. But what you have to ask yourself is what's possible and why aren't we setting a stretch goal? Here it is. Send on this, Frank. And I need three hours with you.

So you've got to come back on the show. You promise you'll come back on six months a year, which I can. Okay. All right, good. I want this to be the best interview you ever did and the best interview at the book, period hands down because this book is must read for all founders. If you're a VC, if you're investing in companies, this book, along with Good to Great, Crossing the Casm, Delivering Happiness, you know, start with why.

All those should be in the gift bag after you make your investment. This one is now one of the top five books that all founders need to read. I love a win-win deal as much as anyone. else. But it's much more common that business is close to a zero-sum game. This is the great tragedy of what we did in America to a generation or two that everybody can win. It's simply not true. Explain to people the nature of business being zero-sum in most cases. Well, you know, the government can print money and spend it and have a nice life. The rest of us, we have to take it from somebody else.

You know, the problem is they don't take kindly when you start taking it. First you take it in small amounts and they kind of grudgingly tolerated, then the amounts get bigger and then it's all out war, you know, and then it becomes existential and now people fight like hell, right? And that is the reality of business. It's you are invading somebody else's profit sanctuary and, you know, they will bring anything and everything to that game. So yes, I mean, the friction goes up, you know, the faster you grow, the bigger you get.

The fights become, you know, more strategic and to death. It's either, you know, you're going to live or we're going to live, okay? So it is a modern form of warfare, it for sure is. And you've got to strap on that mindset. You know, obviously, you know, people don't get killed, fortunately. Companies do all the time. Yeah. And that is, by the way, it's a good thing that that happens because essentially, you know,

economy, sort of a beehive of resources that continually reconstitute into new companies. People reconstitute into new companies, and as does capital, as does any other resource. And it gets most productively deployed that way. So it's all good. And we all benefit from this massive thing that we call competition. It is good. And only the best ones, the most deserving ones, they make it. And that's the way it should be. And what happens in the areas where we don't have competition, higher education, health care, things the government runs. They're not doing so well, are they, Frank? Mediocrity, it rules.

Mediocrity rules. Listen, if you don't want to be mediocre in your life, your career, and you don't want your company to go sideways, required reading, you have to order it right now, stop what you're doing, pull over the car, buy the book, buy 10 copies for your team, amp it up, leading for hypergrowth by raising expectations, increasing urgency and elevating intensity.

They have it, folks, an hour with Frank. Luteman, just incredible. The book's awesome. Congratulations and continued success. Thank you for being such an advocate for excellence, urgency, and capitalism. You are a true American, and I think it's just absolutely fantastic what you've done. I just love the book. I'm buying it for everyone on my founders. Great job, Frank. Thanks, Jason.