Pod Insights Lenny's Podcast How a great founder becomes a great CEO | Jonathan Lowenhar (co-founder of Enjoy The Work) About this episode Jonathan Lowenhar is the co-founder of Enjoy The Work, an executive coaching firm that helps founders become great CEOs. Over the past decade, Enjoy The Work has supported over 165 founders on their journey to becoming better leaders. In our conversation, we discuss:
• The difference between being a founder and being a CEO
• Common failure modes for startup CEOs and how to avoid them
• The four key elements of an effective go-to-market strategy
• A framework for evaluating potential acquisitions: the magic box paradigm
• How to find and hire the best people
• How to build a repeatable GTM machine
• Why founders need to trust their intuition
• Much more
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Find the transcript at: https://www.lennysnewsletter.com/p/how-a-great-founder-becomes-a-great-ceo-jonathan-lowenhar
Where to find Jonathan Lowenhar:
• X: https://x.com/jlowenhar
• LinkedIn: https://www.linkedin.com/in/jlowenhar/
• Enjoy the Work: https://etw.live/lenny
Where to find Lenny:
• Newsletter: https://www.lennysnewsletter.com
• X: https://twitter.com/lennysan
• LinkedIn: https://www.linkedin.com/in/lennyrachitsky/
In this episode, we cover:
(00:00) Jonathan’s background
(02:56) Understanding the rhythm of well-run companies
(09:20) The founder mode vs. manager mode debate
(12:05) Common company failure modes
(13:36) Common CEO failure modes
(25:25) The magic box paradigm for selling your startup
(43:07) Advice for founders on building relationships
(49:28) Hiring and building an amazing team
(57:11) Types of executives: architect, optimizer, scaler
(59:45) Working backward in hiring
(01:02:54) Four key components of a go-to-market strategy
(01:15:01) Trusting founder intuition
(01:19:12) Founder vs. CEO: different roles, different skills
(01:20:52) Closing thoughts and lightning round
Referenced:
• Founder mode memes: https://techcrunch.com/2024/09/04/those-founder-mode-memes-keep-coming/
• Founder mode: https://paulgraham.com/foundermode.html
• “Founder Mode” Is a Dangerous Red Herring: https://enjoythework.com/founder-mode-is-a-dangerous-red-herring/
• Magic Box Paradigm: A Framework for Startup Acquisitions: https://www.amazon.com/Magic-Box-Paradigm-Framework-Acquisitions/dp/0692778047
• Facebook Buys Instagram for $1 Billion: https://archive.nytimes.com/dealbook.nytimes.com/2012/04/09/facebook-buys-instagram-for-1-billion/
• Chris Voss on X: https://x.com/fbinegotiator
• Who: https://www.amazon.com/Who-Geoff-Smart/dp/0345504194
• Brian Chesky on LinkedIn: https://www.linkedin.com/in/brianchesky/
• Joe Gebbia on LinkedIn: https://www.linkedin.com/in/jgebbia/
• Nathan Blecharczyk on LinkedIn: https://www.linkedin.com/in/blecharczyk/
• 4 questions Shreyas Doshi wishes he’d asked himself sooner | Former PM leader at Stripe, Twitter, Google: https://www.lennysnewsletter.com/p/shreyas-doshi-live
• Traction: How Any Startup Can Achieve Explosive Customer Growth: https://www.amazon.com/Traction-Startup-Achieve-Explosive-Customer/dp/1591848369
• Adam Grant on LinkedIn: https://www.linkedin.com/in/adammgrant/
• This will make you a better decision maker | Annie Duke (author of “Thinking in Bets” and “Quit,” former pro poker player): https://www.lennysnewsletter.com/p/making-better-decisions-annie-duke
• How to identify your ideal customer profile (ICP): https://www.lennysnewsletter.com/p/how-to-identify-your-ideal-customer
• How to get your marketing team to drive more impact: https://www.lennysnewsletter.com/p/how-to-get-your-marketing-team-to
• The Five Dysfunctions of a Team: A Leadership Fable: https://www.amazon.com/Five-Dysfunctions-Team-Leadership-Fable/dp/0787960756
• The Untethered Soul: The Journey Beyond Yourself: https://www.amazon.com/Untethered-Soul-Journey-Beyond-Yourself/dp/1572245379
• Will & Harper on Netflix: https://www.netflix.com/title/81760197
• Slow Horses on AppleTV+: https://tv.apple.com/us/show/slow-horses/umc.cmc.2szz3fdt71tl1ulnbp8utgq5o
• Aura frames: https://auraframes.com/
• Augie studio: https://augie.studio/
• Harrah’s Entertainment: https://en.wikipedia.org/wiki/Harrah%27s_Entertainment
Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email [email protected] .
Lenny may be an investor in the companies discussed.
Transcript 16,779 words · 3 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Lenny Rachitsky? You basically spend all your time working with founders and through that studying, you create frameworks and training and you use that in your work. I think that's what many, many founders are looking for is how do I avoid pain?
0:11 Speaker 01 To be a founder is a state of being. It's an attitude. To be a CEO is a craft. The more founders who can accept that those are two separate things and they're both equally important to build an ascendant startup, the better all of us will be.
0:26 Lenny Rachitsky? I'm kind of tired of talking about founder mode, but it feels like what you're describing is founder mode and manager mode.
0:30 Speaker 01 Founder mode gets me angry. That article just got me hot. It really felt like an excuse. We were giving founders a permission to not learn the job. It's not manager mode is bad. It's the greatest CEOs know when to calibrate which one is needed.
0:46 Lenny Rachitsky? Something that you talk about is kind of these two phases to a startup journey and most people focus on the first phase.
0:51 Speaker 01 Phase one is build something people want to buy. Phase two, the one we don't talk about is now you have to build a company around that thing people want to buy. Building a company is always the same. I don't care if it's med tech or fintech or hardware or consumer.
1:04 Lenny Rachitsky? You've come up with this methodology that you call the magic box paradigm that helps founders think about how to lead to a successful exit long term.
1:11 Speaker 01 This is a traditional sales process. You build a list of the companies that might want to acquire you. You ping them and you hope you get a deal. Magic Box argues that the best outcomes for early stage startups don't happen that way. You're never for sale. In fact, you have seduced a buyer. They see the fantasy. They fall in love.
1:35 Lenny Rachitsky? Today, my guest is Jonathan Lowenhardt. Jonathan runs a firm called Enjoy the Work, which I've heard amazing things about from so many people over the years. Their firm has a singular mission to help founders become great CEOs. They do this through a blend of mentoring and advising services, which are rooted in their study of how the best startups operate. They take these lessons and fold them into frameworks and advice and training that they offer their CEOs. Their insight, which you'll hear in our conversation, is that most founders don't come into the job knowing how to be a CEO, which includes learning how to do hiring, how to manage financials. Figure out growth strategy, roadmapping, planning, people management, and so many other skills that nobody teaches a founder.
2:16 Lenny Rachitsky? In our conversation, Jonathan shares the most common CEO failure modes that he and his team have seen, the magic box paradigm for successfully selling your startup, a bunch of advice for finding and hiring the best talent, a framework for building a repeatable go-to-market motion, why and how you should learn to trust your intuition more as a founder, and so much more. We could have gone on for so many more hours. Maybe he'll be back to share more advice. If you're a founder or hope to be a founder one day, this episode is for you. If you enjoy this podcast, don't forget to subscribe and follow it in your favorite podcasting app or YouTube. It's the best way to avoid missing future episodes and it helps the podcast tremendously. With that, I bring you Jonathan Lowenhar.
2:59 Lenny Rachitsky? Jonathan, thank you so much for being here. Welcome to the podcast.
3:02 Speaker 01 Lenny, I am damn excited.
3:04 Lenny Rachitsky? So am I. The reason I'm excited to have you on this podcast is that you basically spend all your time working with founders and through that, studying what causes them pain, what causes them to fail, what causes them to struggle. And then you take that and you create frameworks and training and you use that in your work with founders. And I think that's what many, many founders are looking for is how do I avoid pain? How do I avoid these things that I'm going to probably run into? So to kind of build on that briefly, can you just help people understand what it is you do, what it is your organization does with founders, how you work with founders?
3:38 Speaker 01 Yeah, thank you. I'll tell a bit of origin story that I think ends up answering that question.
3:43 Lenny Rachitsky? Let's do it.
3:45 Speaker 01 I had run a bunch of different types of companies and they were really different ones. So I ran a big division for a public company, then I was a private equity CEO, then I did back-to-back startups. And the first one didn't get very far, but we sold it. And the second one got really far. And when I left the second one, I was, like many founders, grossly unhealthy.
4:05 Speaker 01 25 pounds overweight, slept, wasn't sleeping enough, all the things. And it took a few months to get healthy. And then reflect on those parts of my career. And one of the things that I noticed at the time was all of those companies, when they got to a good place, when they started to run well, they were all run well in the same way. It's like, how could this be? How could public company, private equity, startups, early stage, growth stage, when they were run well, they were all run well the same way? So I started to obsess about this question. And what it led me to realize is that every well-run company has a rhythm. It's unmistakable. You can't miss it. You can't not see it.
4:48 Speaker 01 You just spend a couple of days, like through a spy cam, watching a business, you'll see the pattern. So how come some startups get there and some don't? How does a founder learn the rhythm? How do they learn how to run a company well? So I started to ask investors, kind of obsessively. And I asked them, I asked them all three questions. Same three, over and over and over again. First question was, well, describe to me your ideal founder. What's a great founder? And the answers universally were the same. Investors would use words that meant grit and tenacity and courage and insight. And I'd say, great.
5:32 Speaker 01 Question number two, describe to me a great startup CEO. And they use none of those words. How can that possibly be true? Instead, they describe skills. This is a person who knows how to build stuff and sell stuff and recruit people and raise capital and organize humans and financially plan. Question number three, my final one. Well, how does a founder learn those skills while doing the job? And I got blank fucking stares over and over again.
6:07 Speaker 01 So it led me down this path that I'm now 10 years into with my colleagues of, well, how does, how do we help founders learn those skills so that their venture investors don't fire them? So that they can actually go build whatever company they want to build and stay in the job for as long as they want to stay in the job. So that's origin. That's, that's what got me going.
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7:50 Lenny Rachitsky? I'm excited to chat with Christina Gilbert, the founder of OneSchema, one of our longtime podcast sponsors. Hi Christina.
7:57 Speaker 02 Yes, thank you for having me on, Lenny.
7:59 Lenny Rachitsky? What is the latest with OneSchema? I know you now work with some of my favorite companies like Ramp, Vanta, Scale, and Watershed. I heard that you just launched a new product to help product teams import CSVs from especially tricky systems like ERPs.
8:14 Speaker 02 Yes, so we just launched OneSchema File Feeds, which allows you to build an integration with any system in 15 minutes, as long as you can export a CSV to an SFTP holder. We see our customers all the time getting stuck with hacks and workarounds, and the product teams that we work with don't have to turn down prospects because their systems are too hard to integrate with. We allow our customers to offer thousands of integrations without involving their engineering team at all.
8:36 Lenny Rachitsky? I can tell you that if my team had to build integrations like this, how nice would it be to be able to take this off my roadmap and instead use something like OneSchema and not just to build it, but also to maintain it forever?
8:48 Speaker 02 Absolutely, Lenny. We've heard so many horror stories of multi-day outages from even just a handful of bad records. We are laser focused on integration reliability to help teams end all of those distractions that come up with integrations. We have a built-in validation layer that stops any bad data from entering your system, and OneSchema will notify your team immediately of any data that looks incorrect.
9:08 Lenny Rachitsky? I know that importing incorrect data can cause all kinds of pain for your customers and quickly lose their trust. Christina, thank you for joining us, and if you want to learn more, head on over to oneschema.co. That's oneschema.co. There's obviously this new meme of founder mode. I'm kind of tired of talking about founder mode, but it feels like what you're describing is founder mode and manager mode. You basically have to be good at both. This latter part is almost manager mode. Is that my way to think about it?
9:34 Speaker 01 Yes. Founder mode gets me angry. That article just got me hot.
9:39 Lenny Rachitsky? Do share.
9:42 Speaker 01 It really felt like an excuse. We were giving founders a permission to not learn the job. If we think about an ascending startup, there's this phase of I have to invent something. I now have to figure out how to get my customer in front of this invention and see if it works. And then I have to build a business model around that to see if there's some repeatable way to attract, win, deploy my customer, and thrill them with whatever the solution is. Okay, now I have to go build an enormous amount of demand, and then I have to build up an operation that can handle all that demand. Oh, and by the way, at some point, figure out how to turn positive revenues into positive cash flows.
10:29 Speaker 01 The idea that the founder who's writing code by themselves doesn't have to advance their skills to learn how to do all those things, and that in fact, what the article even implies is learning how to do those other things is a negative, is bananas to me.
10:51 Speaker 01 The things required to launch a company are not the same as grow a company, as scale a company, as exit a company. And the best startup CEOs learn them all along the way. There are lots of ways to learn them. I'm not suggesting there's only one path. But founder mode was almost an excuse not to. I do think what's unique about a founder that felt perhaps where that article was trying to go is that unlike the professional mercenary CEO that gets dropped in, the founder knows everything about what built this company and they can drop in at the most granular level and play anywhere. And they can drop into a product feature, they can drop into a customer conversation
11:35 Speaker 01 or a partner conversation, or with a longtime employee that's still in IC and be impactful. And then rise back up if they've gone the training and get back into a cockpit to run the company again. And that's, to me, the distinction. It's not manager mode is bad, it's the greatest CEOs know when to calibrate which one is needed.
11:56 Lenny Rachitsky? I love that. I'm glad we got there. I wasn't planning to talk about founder mode, but I think this is really helpful for folks to hear that are founders and people working for founders too. Along these same lines, you have a really helpful and really funny also kind of mental model for how to think about common failure modes of founders. You kind of have these labels that I love. And this is actually the first thing I heard about enjoy the work is like these labels that you guys use. And you also have a similar mental model for failure modes for a startup. Can you just share these modes that you've come up with?
12:29 Speaker 01 Yeah, and we do take a bit of a comical approach to some of this. As I've shared with you previously, the name of our company is not an accident. If we can't be playful, we can take the work seriously and not ourselves. So we do fuck around quite a bit. I think if I would separate failure modes for companies versus CEOs for a minute, the company ones are not quite as comedic, but they are ones we see all the time. One is you chose the wrong market. I don't think we need to belabor that one. Lots of your prior guests have talked about the importance of getting that part right or nothing else really matters. Second, back to what we were discussing a minute ago, like build something people want to buy, gotta go build the right thing. Cool. Third one, founder dysfunction.
13:14 Speaker 01 We like to joke that more companies die from suicide than homicide. And it's grim, but also if the two or three people in charge of the business can't get along, nothing else matters. It's all going to break apart. And then fourth, execution. And execution now leads back to CEO. Okay, so now we have a bunch of playful ones here. We have the robot CEO who believes emotion should not ever exist at a startup. At which point, we train them on a very simple formula. Emotions are messy. Humans have emotions. Startups need humans. Therefore, startups are messy.
13:56 Lenny Rachitsky? I love how engineering oriented that advice is, which makes sense for a robot CEO.
14:02 Speaker 01 I also, a little bit more graceful of an answer there is also our CEOs want urgency and passion and excitement from their teams. They want them working enormously hard for below-market comp more often than not with this promise of equity that might return value five or 10 or 12 years later. They want them to bring all of that emotion, but they're supposed to figure out how to surgically cut off the emotions that are inconvenient. That's the robot CEO who believes that we can just have sterile robots working for us and you just press a button and they do a thing. Second one's a pleaser CEO.
14:43 Speaker 01 This is the person who is far more concerned with being liked than running a business. So they can't tell anyone hard news. They can't break ties. They want a consensus on everything. And that's not possible. If you have a group of thoughtful people working for you, they're going to fight, they're going to debate, and you want them to. And then at some point, you have to call it and say, no, we're going left, not right. Or the two of you need to go get in a room and deal with something. Or, hey, the way you just showed up is not the way I want you to show up. The pleaser CEO won't do any of that. They will simply hide and pray it goes away, and it won't go away. Next one's a perfectionist CEO. I like to say that these are the CEOs with the most beautiful product to be delivered minutes before they file for bankruptcy.
15:27 Speaker 01 This is the person who is far more concerned with being right and believing that there's always a right answer than just moving forward.
15:36 Speaker 01 It creates two problems in a business. One is you're just slow. And the other one is you'll never take any bets. Because you will build a team that realizes the CEO is not allowed to be wrong. So you can't disagree. You can't use intuition. You can't use gut. Everything has to be utterly factual and that is simply not possible. In early-stage startups, you have more questions than you do answers. Everything is circumstantial. It's not like watching CSI entrepreneurship and you get to see a video to say, oh, look, the guy did it. No, we have a bunch of little data points. You have to come to a conclusion. The next one's the angry CEO. I had a founder of mine a bunch of years ago and we were seeing a pattern across the leadership team.
16:20 Speaker 01 And he and I get on the phone one morning and I said, I have a theory for you. Might be a story. I might be wrong, but I want to share.
16:29 Speaker 01 He said, okay. I said, I think you wake up in the morning angry and you don't know it. And then you get to the office and you beat the crap out of the first employee that crosses past with you over something utterly unrelated because you're angry. You realize it a few hours later and you apologize and your team hasn't quit yet because they believe you're a good human who doesn't have good self-control.
16:53 Speaker 01 And then I shared with them, and you just had your first child.
16:58 Speaker 01 So my guess is, because I'm not a psychologist and I'm not a therapist, that you are modeling something that's happened in your life.
17:06 Speaker 01 Is this something you want to change?
17:09 Speaker 01 And his answer is yes. And I said, great, I have good news and bad news. The good news is because you said yes, we can do something about it. And the bad news is I don't know what the fuck I can do. That's not my job.
17:18 Speaker 01 The point being, no one wants to work for the angry person. I don't care what the equity potential is worth. No one wants to work for that person and the moment they see greener pastures elsewhere, they're leaving. The next one is the one that drives me particularly crazy. It's a laissez-faire CEO who insanely believes that I can just hire great people and utterly ignore them and let markets take care of themselves and they will do all the right things. I have never met anyone, Lenny, that didn't benefit from good management. And the laissez-faire CEO believes that management's not required. And so what they ultimately find is they have really, really good people doing utterly disconnected things and goals are not achieved.
17:58 Speaker 01 So every CEO, we can reductively reduce to one of two characters. They're either comfortable with the brake or comfortable with the accelerator. The challenge with those who are comfortable with the brake, what I mean by that is they don't want to spend any money. So they're driving this beautiful sports car and they're just leaning on the brake the whole time. So yes, they won't run out of money and yes, they will also get lapped by everyone else and miss the opportunity. And so where their opportunity is, is where can you take bets? Where can you actually downshift that car in such a way where you give yourself a chance in the market? Separate, those who ride the accelerator, we've all met this one.
18:42 Speaker 01 They're going to run out of money really fast. And this kind of connects to one of our other challenging CEO types, the ready, fire, aim. Most CEOs are really bad at planning and that's because there's this little known secret in the Bay Area, most CEOs never run a business before. Planning doesn't have to be some heavy bureaucratic, multi-month exercise that begins in August and ends in February. But a little bit of bottoms-up planning to say, what are we trying to achieve? How do we quantify it? What resources are required? What humans are going to do what? How do we shorten feedback loops so we know in a week, in a month, in two months, whether we're on the right trajectory? The ready, fire, aim CEO says, I don't want to do any of that because they're improvisational and they just want to take bets and they want to take shots.
19:26 Speaker 01 And that's what got the company started and that's also what would have the company go bankrupt. The micromanager one is the opposite of laissez-faire. They believe that no matter how many employees they have, they can do the job better.
19:42 Speaker 01 The challenge with this one is it is massively disrespectful to those who work for you. And we think that, and this is a bit insulting, that everyone that works for a founder can be fit into one of two chunks. They're either an adult or a child.
19:58 Speaker 01 I have a three-year-old. My little girl's amazing. I'm utterly in love. And if she doesn't have a lot of structure and a lot of supervision, she's going to run into things, man. Into things, off things, through things.
20:12 Speaker 01 But adults don't need to be given utter instruction and watched all the time. In fact, it needs to be the opposite. We agree on what success is, what resources are, and you let them go. And they'll come back to you when they have questions.
20:26 Speaker 01 The micromanager CEO doesn't see the difference between those two humans. They don't trust anybody, and that's actually the thing under the thing under the thing. So they want to do everyone's work, and that will succeed right up until the point everyone quits.
20:39 Lenny Rachitsky? This is amazing. Okay, so let me recap the, these labels that you have, just for folks. I have them written down here. So there's the robot CEO, perfectionist CEO, pleaser CEO, micromanager, laissez-faire, ready, fire, aim, riding the brake, and then riding the gas. And as you said, the ever-popular angry CEO.
21:02 Speaker 01 You got them all.
21:04 Lenny Rachitsky? And as people hear this, they're not, I imagine people self-identify a few of these. Like, I have some of this, I have some of that. And it's not like black or white, right? No one's like, I'm 100% robot CEO and I need to fix that, right? It's like a pie chart kind of, I don't know, what's the visual of this? Everyone's got a little bit of this, basically.
21:23 Speaker 01 That's right. I enjoy giving this talk on stage and watching different founders in the audience cringe at different moments. But it doesn't mean that they're all one or the other. If they were all one of these and then didn't want to even accept the possibility that there's a little bit of a lot of these that they could work on, they're probably not coachable and they're not going to be in the talk anyway.
21:44 Lenny Rachitsky? So that, like, I imagine each of these is very particular and it's this journey you go on to, you know, work on yourself. So let me just ask, what's the most common? Issue that you found across these labels of type CEOs, what's the most common one? And what do you often recommend someone work on specifically to help them through that?
22:02 Speaker 01 I think Ready, Fire, Aim is the most common that we've seen. And that has been an affliction that's been growing in the last number of years. It wasn't long ago that CEOs could paper over poor execution with easy access to capital. And suddenly, over the last number of years, we're expecting founders to be better operators. Better operators means eventually being on a path where more cash comes into the business than out of the business.
22:29 Speaker 01 That doesn't happen by accident.
22:32 Speaker 01 The Ready, Fire, Aim CEO has probably suffered this pain.
22:38 Speaker 01 Where they took lots and lots of bets, maybe they measured the outcome after the fact. And they were wrong, and they were wrong, and they were wrong in ways that were expensive. And they've raised their hand to say, I see it. I want to get better at this.
22:52 Speaker 01 Basic, basic business design and business planning is not some corporate effort. It's some thoughtful exercise that starts with, what are we working backwards from? Because at any given time, Lenny, companies are working backwards from one of four things, whether they like it or not.
23:08 Speaker 01 I am working backwards from an exit. I'm working backwards from a next fundraise, working backwards from profitability, or I'm working backwards from winding down. We don't talk about the fourth one that much. But I got to choose one. I got to choose the top of the mountain. More often than not, they're choosing a fundraise.
23:26 Speaker 01 So then we'll ask that founder, you know your market, you know your investors, you know the next set of investors. We've done some intel. What has to be true to unlock the next fundraise?
23:37 Speaker 01 And that's a qualitative and quantitative answer, but we write it down. We need to get better at go to market. We need to land our first partner. We need to launch next iteration of the product and show this level of efficacy, engagement, what have you. Can we codify that? Yes. Can we talk through what actions would be required on what cadence to unlock that quantified set of results? Yes. Do we understand what resources would be required to do those things? Recognize we might have to squint through some of it, but again, the answer is yes.
24:12 Speaker 01 We've now aimed.
24:15 Speaker 01 If we have a culture that has some accountability, that has a communication architecture, so there's some rituals about how we meet and how we share information and how we talk through problems and how we work through bottlenecks. Well, now we have a plan and now we have accountability. I now no longer have to just guess all the time. And this only works for the CEO who says, "My improvisational efforts got me here, but I don't think they'll get me there." There's a guy I worked for a long time ago and he had this phrase, he had like seven or eight phrases, he would use them over and over and over again. It was hard not to commit to the memory. And one of them was, "If you keep doing what you're doing, you'll keep getting what you're getting."
24:59 Speaker 01 And for the ready, fire, aim folks who realize the weakness of that at scale, the way to counteract that is to start with good planning.
25:12 Lenny Rachitsky? It's interesting, that's the most common type of CEO. And with founder mode, it feels like it just accelerates that further. The whole meme of founder mode, which is what makes you upset, in my sense.
25:24 Lenny Rachitsky? Great. Okay, so I love that you talked about exiting as basically one of the, one of these four working backwards paths, because that's where I wanted to go next. I want to talk about some of these specific frameworks and skills and methodologies that you teach. And one of them, and it's kind of like, I want to almost go to the end of selling your company. And the reason I'm excited to talk about this is, if you think about, and tell me if I'm wrong, but it feels like most startups that succeed end up selling their company. That's the most likely success, right?
25:58 Speaker 01 Yes, by far.
26:01 Lenny Rachitsky? Great, yeah, because the other option is IPO or just like run this privately forever. Or fail, basically, and fold. So of the successful options, the most common is selling. At the same time, founders have never done this before. They don't know what they're doing. The other side often has done it many times. And so it's a pretty treacherous and scary and high stakes. Thing to do and to learn on the spot. And you've come up with this methodology that you call the magic box paradigm that I love that helps founders think about how to lead to a successful exit long term. Can you talk about what this is?
26:35 Speaker 01 I can, and I want to give credit where it's due. So there's a book by this name. It's called Magic Box Paradigm, written by an independent banker named Ezra Royzen. And the book's fantastic. And Ezra's fantastic. What we've done is we've operationalized it so that we could teach founders over and over and over again. If the founder wants to hire a banker for this particular process, because we're not bankers, we're not BD, we don't get paid that way, we're teachers. But if they wanted to hire a banker, go hire Ezra. But the methodology itself is a inversion for how venture and venture boards have thought about startups being ready for sale for a long, long time. It's utterly counter to
27:15 Speaker 01 so much advice that founders have heard. There are two ways you can get acquired. This is purposely reductive. One is you put up a for sale sign. This is a traditional sales process. You build a list of the companies that might want to acquire you. You figure out the categories of buyers, the companies there, the contact list within that. You ping them and say, we're open to a transaction, or some euphemism, the like. You contact them and say, I'll give you some information now, sign an NDA, give me an indication of interest by this date. And you work through a process and you pray you have more than
27:55 Speaker 01 one person at the end of the game. Try and ratch them up, sign a term sheet. They will then retrade along the way, right up until the point you die and you hope you get a deal done.
28:05 Lenny Rachitsky? Sounds very familiar.
28:08 Speaker 01 And it's one that often will just hit the nervous system of any founders that's been through it a couple of times, because man, is it a fraught exercise.
28:17 Speaker 01 What Magic Box argues is that the best outcomes for early-stage startups don't happen that way. You're never for sale. In fact, you have seduced a buyer. You have brought someone in. And there are three stages to Magic Box work. There is learn the fantasy. There is prove the fantasy. And there is quantify the fantasy. All right, so what the hell do I mean by fantasy? You're an early-stage startup and you meet a company that is in your space, in your vertical, what have you. And they're much more advanced than you. It's a large business. Generally speaking, another oversimplification here. Large companies are interested in small companies because their technology.
29:03 Speaker 01 And small companies are interested in large companies because their distribution. And there's someone at the large company who becomes fascinated with you. What's the fascination? What they see in their head is, oh, interesting. If I buy your company, this thing happens. The classic example of this is Instagram. Like, this is the number one example of this. Lenny, do you remember how much revenue they had when they got acquired by now Meta?
29:32 Lenny Rachitsky? I think it was zero.
29:34 Speaker 01 I think it was zero.
29:35 Lenny Rachitsky? Okay.
29:36 Speaker 01 Do you remember the acquisition price?
29:37 Lenny Rachitsky? A billion dollars, which was absurd at that point.
29:41 Speaker 01 There was no math Facebook could use, historically speaking, that would justify a billion dollars. It had to be a model on the future. This is Magic Box to a T. They had a fantasy that adding Instagram would expand ad revenue. They figured out some way to prove it. I'll explain more on what I mean by proof. And then their quantification was based on the future. And that's the difference between a Magic Box approach and traditional approaches. Traditional approaches are based on the past. Magic Box is on the future. Let me tell a story. They're one of our companies in construction tech. Their technology was able to suck in video camera data
30:26 Speaker 01 from construction sites for project planning. No one was doing this yet.
30:32 Speaker 01 And the business was doing pretty well. I helped the founders. We helped the founders launch the company. We got first product in market. We raised a couple of rounds of capital. The product mostly worked.
30:44 Speaker 01 But we weren't sure it was venture scale as we were going along. And we had some large construction tech companies and real estate companies and development companies leaning into us. And one particular company then said, huh, we're really good at construction planning. And we've collected all of this video data that we don't use at all. And the champion on the other side in the product org, he has a fantasy. Oh shit. We take your video analytics platform and plug it into what we do. And this is what happens to my business. Now, the person on the other side is a person. And the reason I'm being specific about that is because you don't sell to a company. Magic Box is about finding the person.
31:29 Speaker 01 You're finding the champion on the other side. The person who has motivated for their own reasons, career, money, reputation, what have you, they see the fantasy, they fall in love. And this person says, I'm in love with this idea. If I can grab security data into my product org.
31:50 Speaker 01 Now I have to prove the fantasy. What's different about a champion in this kind of process is they want to find a way to say yes. They're not looking for a way to say no. And this brings us to the four characters you're going to meet along the path of Magic Box.
32:09 Speaker 01 There might be a fifth. You're going to meet your champion. You're going to meet your advocates. You're going to meet your blockers. And you're going to meet your buyer. You might meet Corp Dev along the way. Let me talk about each of those folks. The champion is one who's fallen in love. They're the ones with the fantasy. They're the ones who are arguing on your behalf. They're the ones fighting for you when you're not in the room. They are texting you. They're telling you things about the business that they're probably not supposed to tell you. The buyer, all they care about is math. It might be a committee, it might be a group, the IC, the EC, the investment group, what have you. They're the ones who actually can sign off on a deal. They care about business case. Advocates. Lenny, do you play chess? I have played chess, yes. You have played chess. So advocates are pawns.
32:54 Speaker 01 They don't matter at all until they matter enormously. These are folks that like, you're the CEO doing a meeting with your potential buyer and there are somehow 12 people on the Zoom call, but only two do the talking. The other 10 might be advocates. They're rooting for you, but they will take no political risk. Their value is they can give you intel. Blocker. This is the person who can't say yes, but they can say no. This is OPSEC. This is procurement. This is legal. You're going to meet all these characters during the magic box dance. Your champion just wants you to get the deal done because they're so in love. So what happens is they've come up with a fantasy and you as a CEO need to lean into it.
33:39 Speaker 01 This isn't enterprise selling. I'm not trying to sell you this thing that I have. I'm just trying to find ways to say yes. So when in my story, the person says, could we provide you all of our video data that we've collected forever? And you now could enhance our ability to predict whether large scale construction projects are on time? I don't want the CEO saying anything other than, we can do that. Now, phase two, I need to prove it. Okay. Because I have a champion who wants to say yes. Proof can be really easy. And the reason the proof is so important is not to convince the champion
34:23 Speaker 01 they're in love with the fantasy. They're already convinced. It's because in almost all cases, big companies buying little company and your champion does not have unilateral authority. They're going to socialize the deal. They have to get buy-in from who? The aforementioned buyer. They have to be able to survive the aforementioned blockers. So eventually, when they pitch this to whatever committee is in charge, that committee is going to say, what proof do we have that it works? And we just want to be able to provide the champion with enough evidence that it works. So in this case, we said to the champion, well, give us video data, and we will provide you the evidence that you need.
35:06 Speaker 01 But because we're dealing with a champion who's not a cynic, because champions aren't, we could tell them, and provide us the data in this way, in this fashion, and here's what we'll send you after. Are we in agreement? We know we're already going to win the proof, and it's critically important in these dances. Number three, quantify. At this point, we're not up for sale. But we're spending a lot of calories on somebody, and they know it. So we have our CEO say the following phrase to them. My board's asking questions. They're wondering why we're spending so many calories on this when it's not really core, and we're not selling you our product.
35:50 Speaker 01 I'm convinced of how exciting this could be together, but I think we need to do some math so I can explain to my board why this might matter. So let's imagine all this works, because it's going to work. And it's a year from now, or five years from now. What changes about your business? And the champion will tell you. Retention does this, or deal size goes like this, or market share goes like this. And you'll say to them, fantastic. Look, I'm going to build some shitty verse version of the model. You tell me what I got right, what I got wrong, but I have a board meeting in 16 days, and I need to be able to walk them through that to justify why I'm spending so many calories on this exercise.
36:34 Speaker 01 You build the model, you hand it to them. If they in any way respond to your model, you've won. Because you have now divorced history from future. And you are now playing in future. You are playing the Instagram game in this case. The ending of the story for the company that I was describing. It was a business sub 2 million in revenue. Our prospects of raising Series B felt low. We were not yet profitable. And that was an exit that was generational wealth for the co-founders and their families.
37:13 Speaker 01 The CEO went on and spent two plus years with the now public company that did this acquisition. The technology did get integrated, but it took a long time and they had to do a lot of changes to it, certainly beyond what was envisioned during the diligence process. But all parties are happy. And if we hadn't done it this way, and we had just been up for sale, we'd get a dollar for that company. A couple of other side points that are really important here. For any of you founders out there that are thinking about working backwards from an exit, there are two things that I really want to stress. One is, the fantasy is beyond just what is the business change you can have.
37:58 Speaker 01 The fantasy is, your books are in order. Your fantasy is, all of your investors will sign off on the deal and you will have unanimous consent. That the key members of your team are going to stick around, that you're a joy to work with. Please, God, founder, do not puncture the fantasy at any time. So whatever is starting to shape in your buyer's mind, get to know it. Live that. Everybody wins from that game.
38:31 Speaker 01 Second, CorpDev. They will probably show up in this dance. CorpDev make deals. They are not deal sponsors, they are not a champion, they are not a buyer. They are an expert negotiator. Their job is to facilitate deals and get deals done.
38:50 Speaker 01 The most important things to understand is that they can be a leverage point to have a deal move with some process and some pace and some urgency. Because either deals have momentum or they die. And CorpDev can help there. Second, they are way better at negotiating than you. So. Anytime dealing with a superior negotiator. The only thing you can do to try and even the scales is move the negotiation async. So founders, repeat after me. I'm talking to you directly now. You will say to CorpDev, you know, I am not alone in this decision.
39:28 Speaker 01 I love what you just said, and I'm excited about this opportunity. Once I see it in writing, I can socialize it with advisors, lawyers, co-founders, whoever. But don't negotiate live, you will lose.
39:39 Lenny Rachitsky? Let me just say, that was extremely delightful to listen to. I've never heard like a M&A strategy be this fun. And it makes me want to sell a company. Okay, let's do this. I'm hyped. I think you got it all. I have a few questions. Interestingly, the middle part is, it feels a lot like enterprise sales, which a lot of founders are used to. Understand the stakeholders, move things forward. Here's your champion, here's your blockers, here's the buyer. Is there anything there you want to say, just like how, what's like maybe most different from enterprise sales, which I think a lot of founders are maybe used to? Or is it like pretty similar?
40:14 Speaker 01 Yeah, I think three things. One is, there are a lot of moments in enterprise sales where we're trying to push for a compelling event. That doesn't work in seduction.
40:25 Speaker 01 The playful metaphor that we'll often use is.
40:31 Speaker 01 You've been dating for a while. This person could be the person, but they're not quite convinced yet that like it should be a life together, and you're sitting at dinner.
40:42 Speaker 01 And in enterprise sales, you're eager to get it done. You're eager to move the relationship forward and move in and get engaged, what have you. And so you might be inclined to say, hey, either we move this relationship the next step, or there are a whole bunch of people eyeing me and I'm going to go date someone else. That conversation never goes well. And in magic box, founders are eager to do the same thing, thinking that competition will improve their deal size. When in fact, I think more often than not, that is a negative signal until the very
41:25 Speaker 01 end of the dance. So instead, in enterprise selling, where I'm pushing, in magic box, I'm always trying to entice. I'm never, ever trying to push. So instead, I might say things like, hey, I'm going to raise my next round in Q1, because I've been intending to do this business independently. Now, all I really want to do is win. I just want my product in as many customers' hands as possible. Whether I do that on my own, as I was planning, in partnership with someone, or under someone else's roof, honestly, I don't care. But I have a company to run, and I'm going to go raise my next round in Q1, and if I do that, we're probably too expensive for this deal to make sense anymore. And my board will want me to move on anyway.
42:10 Speaker 01 I'm enticing. I'm never trying to push.
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43:08 Lenny Rachitsky? Okay, so I'm thinking about as a founder, hearing this and I feel like what they're probably wondering is that first step of finding that person, starting to build this fantasy. Any advice you could share for a founder that's like, "We probably need to sell this company." What can they do to start creating these relationships, find this person, create this fantasy in their minds?
43:28 Speaker 01 Ezra does this really well in the book. Again, it has to be not solicitous. So, one of our companies, we had maybe 20 months of capital left. And the two co-founders and our team were convinced, "This isn't a venture business." We thought it might be a venture business, not a venture business. It takes too long to do a deal that's not that interesting with each of our enterprise customers. It was disappointing, but at least we were honest about it. Okay, so who are we gonna sell to? Let's go play this game. So we start with categories, categories of buyers.
44:11 Speaker 01 It could be, for this particular example that was in my head, ERP companies could be a buyer, large banks could be a buyer, the big software companies like Microsoft could be a buyer. There were a few different categories. And we said, "Great, who are the companies within those categories that make sense?" They're acquisitive, they have the balance sheet for it, there's a corp dev department, so we know that they actually know what they're talking about here. Ideally, there's an existing relationship with core team or advisors or board members. Make a list. Now, how do we meet them in a way without selling them?
44:49 Speaker 01 So one of the examples in the book, which I love, is small startup wants to meet the luminaries in a space. And they have their PR agency set up a panel where they contact the CEOs of the potential buyers and say, "We're putting together a panel of the world's foremost experts in X. We're gonna put four people on the panel, and it's gonna be you, and famous person number two, and famous person number three, and this fourth person that is a luminary to us."
45:25 Speaker 01 And it's our startup CEO. And suddenly you're at the table as a peer. It's a completely different conversation. The second one, and this is going to sound a little silly, but I am not exaggerating. It works. If you are a CEO founder and you have that title on LinkedIn, it's amazing the responses they'll get. So we made this list and we just started to send connection requests to the CEOs or CPOs or CFOs on our target list and said something as simple as this. You're doing something really cool. So are we. You game just for a 30 minute chat because I don't know where it'll go, but I think it'll be fun. Keep it that informal. It's peer to peer. I'm not selling you anything.
46:10 Speaker 01 If you can draw a line to like some posts that they had or some speech they gave, even better. But we found without fail, there would be math that would show up, one out of four, one out of five, or one out of six. Yeah, that sounds fun. Because a lot of those CEOs never talk to startups. And that's fascinating to them, especially when presented with the energy of, I just want to have a fun intellectual discussion. What you're looking for in that first conversation, and this is what we ask our CEOs to do, is to ask questions like, what do you care most about in the next year? What's the mandate? What about for your department? What are the things that keep you up at night? What's the break? What's the thing that could actually kill everything? If you had a pre-mortem for the next year?
46:54 Speaker 01 Those kind of open-ended questions, because what we want our CEO listening for is the fantasy, to see if there's some intersection between what they care about and what we might be able to squint and say we do.
47:06 Lenny Rachitsky? It's interesting because it sounds a lot like there's like a jobs to be done framework here, or just like, what is the job they need done? What is the pain you're going to solve? And then create a fantasy around how amazing it'll be for them if you can solve that problem.
47:18 Speaker 01 And ideally, they'll say it and you just reflect it back in active listening.
47:25 Lenny Rachitsky? Chris Voss negotiation style. Okay, so you're the kind of guest Jonathan where I could like the whole podcast could be about each one of these topics. And so there I know there's so much more to talk about here. Let me just leave folk. Let me I want to move to a different topic. But to leave folks with one is if they want to explore this methodology more, there's a book you mentioned called Mary Magic Box Paradigm by Ezra Royzen, right? If companies want to like, are in this process, starting to think about it, doesn't make sense for them to come to you and like, hey, help me through this process. And you said like, good investment banker. When does it make sense to like, hey, let's bring on Jonathan or someone from your team to help them?
48:03 Speaker 01 We meet two types of founders. Founder one says, fix this part of my business. Totally transactional. I want to raise the next round, or I'm hiring people badly, or my founders aren't getting along, or I want to sell my company. Well, I need to be honest, that's not interesting, Gus. That's not our work. Go find someone who is, and I don't mean this disparagingly, but like a screwdriver, like fixes one thing, fix one thing. Then we meet second type of founder. And that founder says, most likely to themselves, because it's the only safe audience. There's some gap between the CEO I am, and the one my company needs me to be. There are a set of skills that I'm great at. And there are these things where I know if I'm really honest with myself,
48:48 Speaker 01 if I listen to the quiet voice, I'm soft at these things, or I'm not good enough at these things, or I have some imposter syndrome about these things. And if I don't get better at them, danger. That's the one we work with. And it's when they care that much about both the hard skill development, and maybe the soft skill development in their path to become a great CEO. How to sell the company? It's one of the skills. We teach this to all of our founders, as well as hiring and management and planning. I don't care what the thing is. For every one of our founders, we audit them and say, here's what you're great at. Here's what you're shitty at. And here's what you've never done before. And which of these you want to work on next, given where the company is in its cycle?
49:29 Lenny Rachitsky? Great segue to where I wanted to go with this, which is hiring. So I hear all the time that a founder's core job is fundraising and hiring an amazing team. Basically, that's like their main goal, just like hire amazing people. The people you hire make your company, create the culture. You got to get that right. But similar to trying to sell your company, most founders have never really hired lots of people. They've never hired for all these different skill sets they're trying to hire for. And I know that you guys spend a lot of time helping founders hire and find amazing people. Can you just share some of the advice you share with founders for how to find and hire amazing people?
50:06 Speaker 01 Yeah, so we actually think the CEO has three jobs. We agree with two of the two that you said, but we think there's a third. One is make sure everyone knows where we're going. The second one, pick the right people for the team. Third one, give those people the tools they need to win. And you can abstract from those what they all mean, but
50:26 Lenny Rachitsky? Love that.
50:28 Speaker 01 Most founders are really bad at hiring. They fall prey to all sorts of pretty common human biases. The lazy ones, back to laissez faire, think it's just gambling. Like, oh, cool, they worked at Meta and Salesforce already, so hire them. Just gambling. There was work done by and then codified in a beautiful book. I'm gonna make sure I get the names right. Jeffrey Smart and Randy Street. They had a consulting firm that dates back to the mid 90s and they wrote a book in like 2007, 2008 called Who, The A Method for Hiring. We have operationalized that book and then expanded on it because there's some parts of it that we found a little dated,
51:13 Speaker 01 but it's really still as applicable today as it ever was. And I think there are three core mistakes that founders make all the time that can be really easily rectified. The first one is
51:29 Speaker 01 you should hire people who have already done the thing you need to have done next.
51:37 Speaker 01 And I know that sounds simple, but founders don't think of hiring that way. They start with a job description.
51:43 Speaker 01 We've been taught that for a long time. Start with the job description. It's a fucking mistake. Start with, "It's 12 months later." You've hired the person they started today. 12 months have gone by. You're clinking champagne because of how great it's been.
51:58 Speaker 01 What's changed about the business?
52:01 Speaker 01 What does success look like 12 months later? Document it. And then when you interview people, look for people that have already done that stuff.
52:13 Speaker 01 Second,
52:15 Speaker 01 the notion of, "Does the person in front of you have a history of creating raving fans?"
52:25 Speaker 01 They talk in the book about this idea of you've been pulled or pushed in your career.
52:33 Speaker 01 If you were an outstanding performer in job A, it is a high likelihood that in job B, someone associated with you in job A is going to pull you into the next thing, and then pull you into the next thing, and pull you into the next thing, and you'll never do a job search because you were great. And if you see a history of that, ding ding ding ding ding, really attractive candidate.
53:02 Speaker 01 Third,
53:06 Speaker 01 core values matter a lot.
53:10 Speaker 01 Culture is not an accident. Culture at scale is the codification of what matters to a business and the ritualization of living those values. It starts with whoever the founders are, and then it will emanate across as long as the founders are super consistent. That also means you need a methodology for evaluating the next human in front of you on whether they actually represent your values.
53:36 Speaker 01 We think of these interview stages in a way similar to the book. We use slightly different language, but we think that there is a culture interview. There is a functional interview and there is a technical interview. But they're designed to get at these notions of have they actually done this kind of work before? Have they been pulled or pushed in their career? And are they your kind of human?
54:00 Lenny Rachitsky? Funny on that split last detail, actually, I imagine you know this at Airbnb. There was actually a core values interview team that was formed around studying what the founders, Brian and Joe Nate valued specifically. And then they codified them to core values of the business. And then there's this team that was like a very select handpicked team that at every interview loop, interview the person for values.
54:22 Speaker 01 That is a beautiful example of how interviewing for values is independent of title. Cause you'll find people in the company at every stage of a company that are the best ambassadors, the best embodiments of those values. Please use them for interviewing. And in addition, they love it because they're protecting their castle. Like they love where they work. They want to keep it that way.
54:45 Lenny Rachitsky? So true. That team is very, a real special team. I was really honored to be on that team. So let me summarize what you just shared, which I love. There's so much value here. It just keeps going and going. So when you're hiring, your advice is look for people, one, that have done it before. Two, that have been pulled from job to job by someone else that loves their work and wants them to be with them at this new company. And then three, their values match the values of the founder and the business essentially. Right?
55:11 Speaker 01 Yes. And if for the recruiters out there, a really simple way to kind of get rid of a lot of the crap that ends up showing it up to the top of the funnel is just to ask the simple question, even in the cover letter of your last ex bosses, how many would get on the phone and say, you're amazing?
55:31 Speaker 01 If there's any equivocation in the answer, great, move on.
55:34 Lenny Rachitsky? So a couple of follow up questions here. One is this point of hiring people that have done it. Obviously, this implies don't hire junior up and comers as much. Thoughts on just like when it makes sense to hire someone more junior that's like really ambitious, real smart, you think they can learn the job. Thoughts there?
55:52 Speaker 01 So one of our companies is hiring a team of reasonably junior account execs.
56:01 Speaker 01 We're looking for folks that have been out of school for two years.
56:06 Speaker 01 Now, that means they are highly unlikely to have had three years of quota achievements in a similar, you get the point. Okay, so how do you hire someone who's already done it? We know what success looks like 12 months later. For that role, they've learned at a hunt. They have been able to create pipeline of X and close Y in business, etc. What we are looking for then in their history, they have any sales chops of any kind.
56:41 Speaker 01 They could be selling Girl Scout cookies, or tickets to some event, or they worked for a nonprofit for a while. I don't care, but I want some evidence that they've sold. I want some evidence that they're comfortable getting on the phone, or showing up at meetings, or showing up at events. So that they've done it before should be reviewed or thought of creatively.
57:07 Lenny Rachitsky? Got it.
57:07 Speaker 01 Now, for more senior roles, I want an explicit, we think of, for example, for executives, Lenny, we think there are three types of executives that startups end up hiring over time. We call them the architect, the optimizer, and the scaler.
57:23 Speaker 01 The architect, let's use sales as an example. This is someone who has to build a playbook. So they are going to uncomfortably stay close to the founder, watch and listen and listen to recordings and pick their brain to pull the magic from the founder of like, oh, here's the dance that she or he goes through to actually close a deal. And they write first playbook. And the goal of the codification of that is so you can bring on a first account exec and the next account exec. Because account execs, back to our language earlier, in this adult children dynamic are children. You need to give them structure for them to win. That's the architect. The optimizer. This is someone who is now going from a few account execs to maybe 10, 15. And we now have targets we have to hit.
58:08 Speaker 01 The business is now reaching a different level of professionalism and expectation. And now have to optimize that earlier playbook to try and find more efficiency and performance out of it. The scaler is saying, okay, now how do I find leverage? I don't have 10x more account execs. Or how do I get other people to sell for me? They're all going to be called VP of Sales or Chief Revenue Officer. They're completely different archetypes. And that same person exists in engineering and in product, et cetera. In those cases, I only would want to bring on an architect if they'd been an architect before. If they'd only been an optimizer, they are going to fail because they've never written playbook from scratch.
58:50 Lenny Rachitsky? It touches on a conversation I had recently. It was a live podcast recording with Shreyas Doshi at my summit, where he talks about a lot of people are really frustrated at work because they're in the wrong one of those buckets, essentially. Like you enjoy a certain type of work and your job is not doing that type of work, whether it's, in your case, scaling or optimizing. And so it just reminds that if you're frustrated at work, you may be, you're doing, you're in the wrong job in terms of the type of output they're trying to expect from you.
59:18 Speaker 01 The story in my head is that talking to me and my colleagues sometimes can feel a little like death by frameworks. We have one for everything. And in this example, I think if you're going to be sustainably successful in any kind of job, I don't care what it is. Three things have to be true. You have to be good at it, you have to like it, and the market has to give a shit about it. And if one of those is off, you're not staying in that job long.
59:40 Lenny Rachitsky? Yeah, and this touches on the name of your firm. Enjoy the work. You gotta enjoy the work to make it sustainable. Okay, one other thing. So one other follow up question real quick on the hiring and then I want to talk about one other bucket of work. And again, I think each of these could be like an hour, two hour long podcast conversation. I love that there's this recurring theme of working backwards to inform what you do today. So earlier you talked about working backwards from what the outcome you want next for your business, whether it's fundraising or exit or winding down. And for hiring, you have the similar advice, work backwards from what you want this person to achieve in the first year, whether it's drive this sort of growth on in the product or drive sales. I guess anything else there, just like the power of working backwards versus the typical approach for hiring. You talked about job descriptions.
1:00:26 Speaker 01 Hiring is never the goal. And it's often the first thing that we'll hear from a founder, I have to hire this person.
1:00:35 Speaker 01 One that is so dangerous for confirmation bias, like the hiring manager is always the one most burdened by that particular bias. But it's also hiring is never the goal. So we will pull them back to over and over and over again. Which of the three milestones matter? Right? Fundraise, exit, profitability. What is the change about the business, for example, to get to that fundraise? How do we quantify that change? Some sort of goal setting framework, OKRs, EOS, I don't care. All goal setting frameworks have the same bones. There's some description of it. There's some quantification of it. There's some work that has to be done. There's some accountability rituals with clear owners and clear agreements.
1:01:17 Speaker 01 So once I actually have the quantification of here's what work needs to be done. I now know what resources I need to be able to pull that work forward. And therefore now I know what kind of humans I need, whether I'm hiring or renting. And that should drive the conversation, not the, oh, God, I need another PM. It's no, here's the set of features that we've said matter most this year. Here's the gap in the resources we have and the resources we need. That's why we're hiring this role. And here's what success would look like 12 months from now or six months from now. So they're tying back to what would change about the business. And this is this recurring theme of our work with our founders. They're so in it, Lenny.
1:02:04 Speaker 01 That they rarely have time to sit above what they're working on, this notion of working in the business versus on the business. And so much of our work is to separate them from the day to day, which is enormously important, not in any way denigrating it. And I need to know where I'm headed and why, and how I'm going to measure progress along the way. And so, so much of what we're doing with them is to say, I want to hear from you what you think success looks like. I'm going to push back and pressure test a bunch of things. Can we define that in a way? Can we agree on what, who needs to do the work along the way? And how we're going to keep checking on it to keep feedback loops short?
1:02:49 Speaker 01 Now we can go back in the business. And then we'll check again in a week or in a month.
1:02:54 Lenny Rachitsky? I love that. It's actually a great segue to the final bucket I want to spend some time on, which is growth and go to market. Another area that many founders have never worked on before. A lot of founders like, hey, I have this awesome idea. I'm going to build this awesome product. I know how to do that. I know what market needs. But building a go to market motion to get it into people's hands is like a whole different skill. We spent a lot of time on this on the podcast. You have a really cool, simple framework of just like how to think about go to market. There's always like, oh, you need a go to market strategy. Talk about how you talk to founders about thinking about what it takes to put together a go to market plan and how to make it a repeatable motion versus just, I'm just going to go to people and try to sell them.
1:03:37 Speaker 01 Our founders, even the most capable of them, find this topic pretty overwhelming because it branches into so many areas. So we do try and distill it to something that is in bite sized chunks. We think of it in four pieces.
1:03:54 Speaker 01 First piece is ideal customer profile.
1:03:58 Speaker 01 Who do we really want to sell to?
1:04:01 Speaker 01 What are their qualifications? What are the discovery questions we would use to get to those qualifications? What are the kill criteria to know that this is fool's gold? This really isn't the human. Second bucket loosely called marketing. But within that, marketing is also positioning. So what is our uncommon denominator from the enemies? So who are we competing against? Is it actual companies or is it status quo in some sort? What are they great at? What are we great at? What are we great at that they're not? And then how do we represent that in the world? That's branding and artifacts and identity work, et cetera.
1:04:44 Speaker 01 Next is demand gen, which will simplify to say, how do we go find the humans we want? I've long loved the book Traction, Gabriel Weinberg. I'm going to forget unfortunately the co-author's name right now. Jason, Jason Marr? Sorry. Where they talk about the 19 channels that all companies have availability to. They're the same ones. Now, the book has got a couple of years on it. So there are a couple of new channels that have popped out since. But what we then try and expand the aperture for our founders is rather than just think about meeting your next customer through however you did at your last company, availability bias.
1:05:28 Speaker 01 Instead, which of these might make most sense next? A simple two by two matrix can work here, like some experimentation, some brain writing. Love brain writing, not brainstorming. I know you've talked about that on prior pods. And then high impact, low effort. Can we think of the three or four experiments we want to run by channel? Let's go play. And then fourth, sales. And this is the codification of a playbook. How are we having the conversation? How are we doing discovery? How are we handling objections? How are we doing demo? How are we moving to close? If we can get through those four, then we can start to talk about deployment and customer success and upselling and account management, et cetera, et cetera. Those are good problems to have. Oh my God, my install base is so large, I need to manage it. Great, great fricking problem.
1:06:15 Speaker 01 But we try and break this complexity of going from individually selling to building a machine into just these four buckets. Who am I selling to? What do we want to say about ourselves? How do we reach them? How do we close them?
1:06:28 Lenny Rachitsky? Amazing. I was going to summarize it. You did an excellent job there. Before we follow up on this, you mentioned this term, "brain writing." What does that mean?
1:06:34 Speaker 01 Oh, the first time I heard of this was Adam Grant. I don't know if he's the originator of the idea. Brainstorming, you talked about this a bit in your Annie Duke podcast as well of how horribly coercive meetings can be.
1:06:54 Lenny Rachitsky? For brainstorming especially.
1:06:56 Speaker 01 For brainstorming especially. And so what many of our founders don't recognize, because they just see like, hey, I'm just sitting around a table with a group of folks I respect, so we can just debate things as peers. No, you can't. You're a founder. Your voice has a megaphone attached to it, even if you can't hear it. So you have to turn down the megaphone if you actually want to learn what your people have to say.
1:07:21 Speaker 01 So brain writing is I'm going to expose an idea, and I want everyone to now write and weigh in on their offer. It could be in a survey, it could be in a shared doc, what have you. My preference is in through some sort of methodology, you are now sharing your opinions, comments, edits, dreams, in an async way that no one else can see until it's all combined, maybe even ideally without authorship identified.
1:07:50 Speaker 01 Then, when the founder's weigh in, you don't know. They're just a part of the mass. Let everyone read the thing. I even like the Amazon, like, take the first 10 minutes of a meeting, let's just go read so we're all fully present, and then have a debate.
1:08:08 Speaker 01 What it allows for is the dampening of the founder effect in meetings.
1:08:18 Lenny Rachitsky? You're just so full of golden nuggets. There's just like a random tangent that I think could be really transformative for a lot of teams. So the advice here is just when you're trying to ideate and brainstorm, don't go in a big room and put post-its on a wall and talk throughout ideas and have a discussion. Instead, just everyone individually sits and thinks and shares their thoughts and the founder presents like, here's a prompt, here's a question we're trying to tackle.
1:08:39 Speaker 01 What it also allows for is an evening of the playing field of between fast processors and slow processors, introverts and extroverts, because they're all equally potentially talented in your room. But if you do live brainstorming, you have diminished all the folks that prefer to sit and chew on something first.
1:09:02 Lenny Rachitsky? That's very much me. That's exactly how I operate. I need to think and process. I'm not like on the spot, quick thinker person. So 100% fan of this approach. Let me come back to your go to market framework. I have your notes pulled up here. So basically, if you're a founder or even a product builder and you're trying to think about, how do I, people keep telling me I need to go to market plan. I need to grow this thing. How do I think about this? You're basically saying there's these four buckets to think about. Who are you selling to? How are you going to motivate them and get them excited to buy your thing? How do you reach them? And then how do you close them?
1:09:37 Speaker 01 Yes.
1:09:38 Lenny Rachitsky? Luckily, I have podcast and newsletter post on every single one of these buckets. If folks want to pursue each one of these, I have templates for ICPs, marketing advice, all these things. So that's good news. There's a lot of content for people to read if they want to explore this stuff. Let me ask you, where do you often find the biggest bang for your buck when you come to a founder? Founder comes to you and they're like, I need to figure out go to market motion. Is it just like start from the top and work your way down? Or is there like, here's where you maybe want to spend a lot of time?
1:10:10 Speaker 01 Early stage founders, and this is certainly more true for the first timers, Lenny, than the veterans, because they learn this problem. The first timers are like 20 something year olds in a bar.
1:10:25 Speaker 01 And they're being social for the first time in their lives. And anyone that makes eye contact with them is enough for them to say, I want to go on a date with you. That's it. There's no discrimination of any kind. Like, oh, my God, they like me. I'm in. That's the mistake that hounds first timers. The veterans and those we get our hands on, instead, we say, let's imagine you could build your perfect customer in a lab, like Petri dish, and you grew them. What do they look like? And if you have any kind of install base, I'll ask the question, I just did this with
1:11:08 Speaker 01 a founder the other day, they are enterprise whale hunting business, they have four large customers.
1:11:13 Lenny Rachitsky? Like actually whale, okay, whale hunting in terms of large wealth person or actual whales?
1:11:20 Speaker 01 Uh, the extreme of enterprise selling.
1:11:22 Lenny Rachitsky? Okay, okay, got it. I want to see a whale hunting startup. Okay, go on.
1:11:28 Speaker 01 I said, so which of your four customers is your favorite? Which one, if I got them on the phone, they would rave about you, they would be salivating openly with a chance to evangelize what you're doing for them. And they was like, oh, that's clear, it's this one of the four. Great, tell me about them. And what you start to see and pull apart from that is the founder does have an ideal profile. They do have a dream. Now, there are all sorts of risks about is the, is the world too small, is it not a big enough market if they get too tight? And founders get so caught up in that and it's a mistake. Because all we're looking for in the beginning is a white hot center of opportunity, a small population that is an enormous fan, is getting enormous impact.
1:12:12 Speaker 01 We can worry about adjacencies and expansion later. I like to remind them that Amazon just sold books. We can start with one thing and be great at it.
1:12:24 Speaker 01 So where the founders often get hung up on for us is that they've moved towards selling without contemplating ideal customer profile, without contemplating qualifications, without contemplating discovery questions to get to that, and most importantly, kill criteria of if this is true, do not sign them, even if they want to go out on a date with you.
1:12:48 Lenny Rachitsky? I'm glad you said that because that's exactly what I believe and I hear often on this podcast is how underappreciated picking your customers and early leads are. And if you think about this funnel you described, figure out who you're selling to, how do you motivate them, find them and then sell them, all this trickles down from who are you going after. Like you know, you will know how to motivate them if you know who you're talking to versus the opposite.
1:13:10 Speaker 01 It's the most expensive mistake of those four.
1:13:15 Lenny Rachitsky? Okay. Is there anything else on go to market or growth they think might be helpful just to touch on before we close up our conversation?
1:13:25 Speaker 01 The one thing I'll share, and this goes back to the ready fire aim that we talked about earlier, is that there's implicitly a funnel, mathematical funnel to what we just described. And founders often make the mistake when planning for the year ahead of I need to be at this revenue to justify this multiple. And then all of the funnel math is a plug.
1:13:49 Speaker 01 And that's just, that's death. As opposed to here's what's been true for the last three months, six months, nine months, 12 months. And then what assumptions can I reasonably make with ways I'm going to influence that funnel going forward to go build up to where I think I'll be a year from now? And it just lowers the bias that your planning process operates with. But when a founder starts from a place of I have to get to 3 million or we're dead, you're already dead.
1:14:21 Speaker 01 As opposed to what do I really believe I can do to get there? Changing top of the funnel, changing conversion rates along the way, changing deal size or deal length, et cetera, based on my recent history? And then have a conversation about the gap between where I think the business reasonably can get with some ambition and where I think I need to be financially. Because that's the more mature conversation. And that's the one the ready fire fire aim CEO doesn't have. That's the one most founders have only started to learn to have over the last few years when capital dried up.
1:14:56 Lenny Rachitsky? I love that. I love just how practical and real talk your advice always ends up being.
1:15:03 Lenny Rachitsky? Speaking of that, I emailed the founder that you work with and asked him, what should I ask? What should I ask Jonathan when he comes on the podcast? And he said something that was really
1:15:12 Lenny Rachitsky? great. It was really unexpected what he said. He said that the biggest lesson he learned from you is to, as a founder, to trust his intuition more throughout the journey of his startup. Can you just talk about that as something you've learned, something you've seen that maybe founders underappreciate?
1:15:31 Speaker 01 It's impossible not to be a startup CEO
1:15:36 Speaker 01 and not face many existential moments. Is my company going to survive? Did I make a mistake? Will I ever be hired again? Should I sell the company now? Should I break up with the co-founder? Should I fire this critical employee?
1:15:55 Speaker 01 They happen to all of us.
1:15:59 Speaker 01 And fear is not a good decision maker. Our lizard brain is a really bad decision maker in those moments.
1:16:07 Speaker 01 And so what we'll often share with the founder who's facing one of these scenarios. And I know the CEO you're describing and he's, he was facing one of these scenarios.
1:16:20 Speaker 01 We'll say to them,
1:16:23 Speaker 01 do you know that little voice? When you get really still, the quiet one? That says, you should marry this person. You should take this job. You should start this company.
1:16:36 Speaker 01 Watch out for that human. They're a bad one.
1:16:42 Speaker 01 And most of the time, Lenny, when I frame it that way, the person across me says, "Yep, I know that voice."
1:16:50 Speaker 01 And I'll ask, "How do you hear it?" And there'll usually be some version of, "I have to get really alone, really still, really quiet. Walk on the beach, listen to music, work out, play with my pet."
1:17:06 Speaker 01 I said, "That voice is who you are. It's not your brain.
1:17:11 Speaker 01 Your brain is a tool. It's our hands, it's our feet. It's just a tool. It's a pattern recognition machine. But who you are, if you can watch your brain, you know what you're thinking. Like, "Oh, look what my brain's doing." That means you're not your brain. It's something else. And that's the little voice. And that little voice is gonna be right.
1:17:32 Speaker 01 And where we get screwed up in life is when we stop listening to that voice, when the mania of our chaos of our lives get in the way of that voice. And so whenever our founders face one of those moments, it's not a framework, it's not a playbook, it's not, or even a directed piece of advice from us to say, "You should just go left. I've seen this before, go left." Nope. I trust founder intuition. If the founder says, "This business is still gonna work," or "This CEO, this co-founder is the wrong person," or "Yes, it's time to sell," I'm in. We're just here to support them. And we try and be the only person in their life that is fully on their team, because we're not on the preferred side of the cap's table, we're not fiduciary, we're not board members, not a co-founder, none of those things.
1:18:18 Speaker 01 And so in those moments, we'll just say, "Can you get really quiet?" And the founder you're talking about, I have the story in my head,
1:18:25 Speaker 01 he was facing a breakup moment with his co-founder.
1:18:31 Speaker 01 And I asked him,
1:18:34 Speaker 01 because he's good at getting quiet, "What did the voice say to you way back when?" And the voice said to him,
1:18:42 Speaker 01 "This is the wrong fit. This isn't gonna work. He believes in different things than I do, and that's gonna go badly."
1:18:51 Speaker 01 The lizard brain didn't want to believe that.
1:18:54 Speaker 01 And so it took another year.
1:18:58 Lenny Rachitsky? Wow, I had tingles throughout that entire piece of advice. I love how it's also very applicable to just life, not even just being a founder. It's a good reminder to trust that voice more. It's interesting that this also connects to founder mode a little bit, and I'm curious how you think about that, where a lot of the founder mode advice is like, you know, trust, trust your, trust your judgment. Don't hire people to take, to delegate things away. Do you see kind of a difference in like the core idea founder mode and just like, oh, you should, but you should actually trust your intuition more?
1:19:35 Speaker 01 Intuition comes from, in my point of view, a deep understanding of self and the capacity to get quiet and be well resourced, meaning you've slept well and you've eaten well and you have enough love in your world. And I think what founder mode can confuse is my intuition says I should just do this job for them and fire these three people. That's not intuition.
1:20:07 Speaker 01 That's reaction. That's a fear response. And when the founder says, I sat with this, I felt it out. I can see it. I need to terminate my whole go-to-market team and start over. This isn't working. And I have data that supports it, but I know this isn't working. I'm like, let's go with that. I'm in. Let's do it.
1:20:36 Lenny Rachitsky? And I think you described, a lot of times people feel this and it takes like a year, two years, three years, many years to actually realize that. And your advice here is try to listen to that more and trust it more. Yeah. Wow. Okay. Well, Jonathan, to pivot our energy, is there anything else you want to leave listeners with? Last piece of advice, anything that you think might be helpful before we get to our very exciting lightning round?
1:21:04 Speaker 01 To be a founder is a state of being. It's an attitude. It's courage. It's instinct. It's a capacity to push through despite all sorts of evidence suggesting you're wasting your time.
1:21:21 Speaker 01 To be a CEO is a craft. The more founders who can accept that those are two separate things and they're both equally important to build an ascendant startup, the better all of us will be. And so what I would encourage every founder out there that wants to go build something substantial, go work on your craft. In addition to working on the business, be honest with yourself about, here's the shit I'm bad at. I don't know how to read a financial statement. My board meetings suck. Half my meetings that I have with my leadership team, we all walk out of there saying, what
1:22:05 Speaker 01 did we just accomplish right now? Or I get to the end of my workday and I'm like, I didn't get anything done. Those are all examples of just not taking the craft seriously enough. I'll leave it at that.
1:22:17 Lenny Rachitsky? I love that. And I think I've made the mistake during our conversation of confusing founder and CEO and making, assuming they're the same thing. And I really appreciate you just again, pointing out to folks that that's kind of the big distinction you got to start making is there's the founder and there's the CEO. Often they're the same person, but different parts of your, of your brain and different skill sets.
1:22:36 Speaker 01 And I'm now fully off the very awkward soapbox I've been sitting on for a long time. So we can go to lightning round whenever you're ready.
1:22:43 Lenny Rachitsky? With that, we've reached a very exciting lightning round. Jonathan, are you ready?
1:22:47 Speaker 01 I'm ready. I'm ready.
1:22:49 Lenny Rachitsky? First question, what are two or three books that you have recommended most to other people?
1:22:54 Speaker 01 My number one business book that I've recommended would be Five Dysfunctions of a Team by Patrick Lencioni. I do think it always comes back to team. The right team can solve all the things. And that book is a beautiful distillation of the most common problematic archetypes that show up in a leadership group. So that's, that's the number one.
1:23:16 Lenny Rachitsky? Amazing. Anything else you'd recommend?
1:23:18 Speaker 01 The second one, it goes more personal. It's a book called Untethered Soul by Michael Singer. It's this, was at least for me, the first introduction to this idea that I am not my brain. And that my brain can be a tool that serves me well and at times doesn't. So that would be number two.
1:23:37 Lenny Rachitsky? I started to read that book and then I never finished it. So this is a good reminder to give it another shot. Second question, do you have a favorite recent movie or TV show you've really enjoyed?
1:23:50 Speaker 01 I just watched and really enjoyed, because by the way, I have a three-year-old at home, so the amount of content I now consume is reduced tremendously. But my wife and I just watched Will and Harper. This is the documentary between Will Ferrell and his very dear friend, who just recently transitioned, and they road trip across the country together. And it was frickin delightful. It was sweet and endearing, and one of the better things I've watched in a while. TV show Slow Horses. I'm utterly addicted. I'm only midway through season two, but I've been voraciously sleeping less and watching more.
1:24:31 Lenny Rachitsky? I've loved both those. I just watched Will and Harper and completely agree with your sentiment about it. I wasn't planning to watch it, and my mother-in-law started watching. I'm like, wow, this is really fun. It's also funny, like meaningful funny.
1:24:43 Speaker 01 There's so many moments in it that are really sweet. As an aside, this was 20, I don't know, April 2020? And a group of our very close friends said, hey, how are we going to keep in touch? And so we started what we called Movie Club. And we routinely either pick a TV show or a movie. We all watch separately, and every two weeks, we get together on Zoom at night. We talk about what we just watched.
1:25:06 Lenny Rachitsky? I love that.
1:25:07 Speaker 01 And some have been great, some have been terrible, but Will and Harper was our most recent.
1:25:10 Lenny Rachitsky? Oh, such a cool tradition. Okay, we'll keep going. You have a favorite product you've recently discovered that you really love? Could be an app, could be something physical?
1:25:20 Speaker 01 Two, and one is I'm going to talk my own book, but I still love it. The first one is Aura Frames.
1:25:29 Speaker 01 These are digital picture frames. They're amazing. The UX for them is incredible, the quality of the, they're pieces of artwork. So grandparents, in-laws, parents, we have multiple in our house. Just love it.
1:25:46 Lenny Rachitsky? And it's just to clarify, it's like a frame that has picked digital photos? And you can like give it to your ma, your, yeah, your grand, your mom and show photos of your kid, like wherever they live.
1:25:55 Speaker 01 And the combination of the ease of the software and the quality of the imagery is better than anything I've tried, and I've tried a bunch of them. Aura Frames, and this is not Enjoy the Work company. This is just one I'm a giant fan of. The second one is an enjoy the work company called Augie Studio, A U G I E Studio.
1:26:14 Speaker 01 This is Canva for video.
1:26:18 Speaker 01 It can turn anyone with no engineering skills whatsoever, no code video creation with full editing tools. So suddenly you can create branded, high fidelity, high quality commercial video in minutes with no effort. It's amazing. It was built by two media tech co-founders that were building this thing pre ChatGPT and it's just growing like this and it's super fun and the guys are great. So A U G I E Studio.
1:26:50 Lenny Rachitsky? Sounds amazing. Augie Studio, I will, I could use that. That sounds awesome. Two more questions. I feel like this one's going to be a good one. You have a favorite life motto that you often come back to, find useful and work around life?
1:27:04 Speaker 01 The first one, and the one that I probably most commonly refer to is that there is only one life. The quick backstory, and I know it's a lightning round, but I'm guilty of these stories. I went for a walk with a girlfriend of mine a bunch of years ago and we did this once a month and she would, we would always have a pretty typical ritual of kind of giving each other life updates to begin the walk. And so I started the conversation with, so you know, there's the family update and then there's my work life and then there's my social life. She's like, no, no, no, no, no. Stop. That's all bullshit. It's one life. Stop assuming that there are these pretend walls between them or among them. I've lived that ever since. So I try and show up, that phrase lets me show up the same way, no matter my setting.
1:27:47 Speaker 01 If you and I were having a beer or a meal, or if I'm sitting with one of my co-founders or clients, it doesn't matter. I show up the same way everywhere. Part of the way I enjoy the work is by having a real friendship, a real intimacy with everyone at Enjoy the Work and including our clients as well. I want that level of conversation. I don't want the sterile stuff over here with my work environment versus my personal versus my family. It's just one version of me.
1:28:15 Lenny Rachitsky? And the phrase is, it's just one life?
1:28:17 Speaker 01 Just one life.
1:28:18 Lenny Rachitsky? It's just one life.
1:28:20 Lenny Rachitsky? Final question. So you ran a casino at one point, I believe, and it was like a Harrah's Casino. Is that right?
1:28:28 Speaker 01 My first career was in the casino business.
1:28:30 Lenny Rachitsky? Okay.
1:28:30 Speaker 01 But before I go on, what's the question?
1:28:32 Lenny Rachitsky? The question is just, is there a fun story or experience or lesson from that time in your life that might be fun to share, maybe a mob involvement or cheating or something? Because I imagine that's a unique life experience.
1:28:48 Speaker 01 I'll tell one of my favorite family stories then briefly. But yes, my family goes back in casino gambling, one form or another, several generations. My great grandmother ran a illicit poker game. My grandfather ran numbers out of a gas station. My father's been in the casino industry since Atlantic City in the 70s. My sister is a prominent gaming attorney and I worked in the industry for a dozen years. So like, this is my family. And Lenny, I didn't know any of this was weird until I was like in my mid 20s. I turned 21 and I'm old. Yes, I'm gonna just hide the year. I'm kidding. Anyway, I turned 21 and we take a family trip to Las Vegas because that was normal for us.
1:29:30 Speaker 01 My father was doing a lot of work out there, so he got us hotel rooms, et cetera. I'd never been there before and I was newly 21. And so my parents said, "You have $300 to gamble with. We're gonna be here for five days. This is a vacation. My grandparents are coming in. My uncle and I were coming in and they're encouraging me, 'This is all up to you, but try not to lose it all on night number one.'" Which was good advice to give me. I was 21 and I was pretty much a schmuck at the time. But also, part of my experience being there was to interview for a summer internship. This was, I was a college going to be junior. So we go and I immediately go sit at some table and start playing some games. And I turned $300 and do a few thousand dollars
1:30:13 Speaker 01 in the very first evening. And that was exciting and it was crazy and it was wild, et cetera. On the third night, which happens to everyone who goes to Vegas for too long, we're all delirious because all of us is staying up all night and being silly and being stupid. And my parents ask me, by the way, this is pre-cell phones, they ask me, "Hey, can you stay awake? Your uncle and aunt are gonna arrive late tonight. They'll call the room. You can come down and just greet them and say hello." Sure. So I get the phone call like 11:30 at night, go on downstairs, they're here. I go downstairs in the casino floor. We're staying at the Las Vegas Hilton. It's since been renamed. But I go downstairs and I can't find them anywhere. Okay, well, I have cash in my pocket and I'm now awake, so I might as well gamble. Shortly thereafter, Lenny, I have an experience
1:30:55 Speaker 01 that happens one in 369,000 occurrences and I win $35,421.92. For the trip, I ended up winning $40,000 that I turned $300 to and I was just 21 years old, which has left me with one of my mantras that I've had for the rest of my life, which some people roll their eyes at, but that is gambling does pay.
1:31:20 Lenny Rachitsky? I love that you remember the exact amount. What games did you end up playing that helps you win so much money?
1:31:26 Speaker 01 The primary game that I played was Caribbean stud poker, where there's no skill of any kind. You get five cards, a dealer gets five cards, whoever wins, wins. And if you have particularly unusual hands, you get odds on the hand. And I got dealt three, four, five, six, seven of spades and five cards.
1:31:44 Lenny Rachitsky? I thought you'd say like slots or something. I love that you're just sitting there playing poker and went from 300 to $40,000.
1:31:51 Speaker 01 It's not even real poker.
1:31:53 Lenny Rachitsky? That was a great story. I'm glad I went there. Jonathan, this was incredible. I think we've helped a lot of founders through this conversation. Two final questions. Where can folks find you guys? Who would be a good fit? What should people know about Enjoy the Work? And finally, how can listeners be useful to you?
1:32:10 Speaker 01 Love that. So let me unpack those three. The first one is enjoythework.com or just find me on LinkedIn. I'm not hard to find. Send us a note. Who should ping us is very simple. If you're a founder out there or a CEO out there and you know in your heart that there's some gap between how you're running the business and how the company's going and how it could be going and how you could be running the business, if there's some gap there, we're here to help. Now, our expertise, as we talked about in this call, is company building. So if you just have an idea on a napkin or you have a science experiment that you're not sure worth, we're useless. Like, that's not us. But if you have some breadcrumbs worth following, like the business is starting to work, you're
1:32:54 Speaker 01 a Series A into B and beyond.
1:32:58 Speaker 01 And you know that like, there's better? You can see it? That's where we help. Send us a note. Love the chat. How can listeners be useful to us? So we are voracious readers. All we try and do is study, how do the best startups do X? From tiny things like, how do they run all hands meetings or offsites? To the big meta topics of what is going to repeatable go to market even mean? Or what is financial planning in a way that's useful? Or how do you set goals that won't make you roll your eyes? We consistently learn from the ecosystem of podcasters and authors and journalists. Like, go look at this material.
1:33:43 Speaker 01 So if your listeners have a favorite X on whatever topic in running a startup, send it my way. All we love to do is read and chew on that stuff.
1:33:54 Lenny Rachitsky? Awesome. And the best way to send that is either to enjoy the work or LinkedIn.
1:33:58 Speaker 01 That's right.
1:33:59 Lenny Rachitsky? Awesome. Jonathan, thank you so much for being here.
1:34:02 Speaker 01 Lenny, this was so damn fun. Thanks for listening to my crazy casino stories.
1:34:06 Lenny Rachitsky? I want to hear more, but we gotta go. Bye, everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review, as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.
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