Frameworks for product differentiation, team building, and first principles thinking | Ayo Omojola

Ayo Omojola is Chief Product Officer at Carbon Health, one of the fastest-growing and most innovative health tech companies in the world. Previously, he was a PM leader at Cash App, where he co-created the Cash Card and scaled it to a nine-figure revenue line for Square. He’s also an angel investor in companies like Mercury, Modern Treasury, Faire, and many others. In this episode, we discuss: • How Cash App broke through the noise and became a consumer app success story • Why small teams are better than big ones • Hard-won lessons on team building and hiring • Why it’s “criminal” not to connect people in your network to things that they need • Why you sometimes shouldn’t listen to experts • The importance of first-principles thinking • Advice for health tech founders — Brought to you by Microsoft Clarity—See how people actually use your product | Eco—Your most rewarding app | LMNT—Zero-sugar hydration Find the full transcript at: https://www.lennyspodcast.com/frameworks-for-product-differentiation-team-building-and-thinking-from-first-principles-ayo-omojola-carbon-health-cash-app/#transcript Where to find Ayo Omojola: • Twitter: https://twitter.com/ay_o • LinkedIn: https://www.linkedin.com/in/omojola/ • Blog: https://kunle.app/ Where to find Lenny: • Newsletter: https://www.lennysnewsletter.com • Twitter: https://twitter.com/lennysan • LinkedIn: https://www.linkedin.com/in/lennyrachitsky/ In this episode, we cover: (00:00) Ayo’s background (04:13) The story of how Ayo used Quora for discoverability (06:44) The scale of Cash App (07:37) What Cash App did well (10:12) Lessons from building consumer apps (13:08) Why it’s so important to be different (14:08) What Ayo learned from how Square/Block operates (16:36) How to succeed at building a startup within a startup (19:06) How Ayo transitioned from fintech to health tech (22:51) Why Ayo loves hiring founders (28:32) Team-building strategies (32:12) The importance of going deep and challenging assumptions (36:58) Why you should always ask questions (38:45) Lessons in leadership (41:43) Advice for founders in the health-care space (44:48) What Carbon Health is (46:58) Lightning round Referenced: • Ayo on Quora: https://www.quora.com/profile/Ayo-Omojola • Carbon Health: https://carbonhealth.com/ • Cash App: https://cash.app/ • Lob: https://www.lob.com/ • Mailform: https://www.mailform.io/ • Venmo: https://venmo.com/ • PayPal: https://www.paypal.com/us/home • Apple Cash: https://www.apple.com/apple-cash/ • Square: https://squareup.com/us/en/home/ • Block: https://block.xyz/ • Pinwheel: https://www.pinwheelapi.com/ • The Three-Body Problem: https://www.amazon.com/Three-Body-Problem-Cixin-Liu/dp/0765382032 • Children of Time: https://www.amazon.com/Children-of-Time-audiobook/dp/B06ZXTHNSJ • Children of Memory: https://www.amazon.com/Audible-Children-of-Memory/dp/B0B84HRYT1 • Children of Ruin: https://www.amazon.com/Children-of-Ruin-audiobook/dp/B07RB7WQR3 • Stormlight Archive: https://www.amazon.com/Stormlight-Archive-Boxed-Set-Books/dp/1250776635 • Fire in the Deep: https://www.amazon.com/Fire-Deep-Robert-J-Miller/dp/1532611641 • War of the Worlds on Amazon Prime: https://www.amazon.com/gp/video/detail/amzn1.dv.gti.49a287c2-44ed-4ffc-afa0-fab86dd0d31d • Succession on HBO Max: https://play.hbomax.com/player/urn:hbo:episode:GWukCJAu0e4uHwwEAAAB5 • No Context Succession on Twitter: https://twitter.com/nocontextroyco 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.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  Cash App as a team, we really cared about what we could do that was different and better than what else existed in market. Being different is not enough because it's very easy to build a thing that's different from what exists today because you just have to look at what exists today and build something else. Being better is not enough because it's also easy to say, hey, I'm going to make this thing better and just charge you more money for it. It has to be better than what it is today in a way that matters to the end user. And for us, for a long time, it was when someone says, hey, why are you better than them? I'd be like, try and send me a dollar that I can use now. And there was only one app you could do it with.

• 0:35Lenny Rachitsky?

  Welcome to Lenny's podcast where I interview world-class product leaders and growth experts to learn from their hard-won experiences building and growing today's most successful products. Today, my guest is Io Omojola. Io co-created and scaled Square's popular Cash Card alongside the hugely popular Cash App. He's currently Chief Product Officer at Carbon Health, one of the biggest and fastest growing health tech companies in the world. He's a former founder, he's on the board of Pinwheel, and he's an angel investor in companies like Mercury Bank, Fair, Modern Treasury, and dozens of other startups. In today's episode, we dig into lessons from building and scaling the Cash Card and the Cash App. The importance of differentiation when you're building a consumer product or any sort of product. How to successfully build a startup within a startup.

• 1:20Lenny Rachitsky?

  How to succeed in both fintech and in health tech. Plus, my favorite part of the conversation, a handful of incredibly insightful and practical principles and philosophies around hiring, team building, leadership, and going deep on problems. Io is such a fascinating human and leader, and I am excited for you to learn from him. With that, I bring you Io Omodula after a short word from our sponsors. This episode is brought to you by Microsoft Clarity, a free, easy-to-use tool that captures how real people are actually using your site. You can watch live session replays to discover where users are breezing through your flow and where they struggle. You can view instant heat maps to see what parts of your page users are engaging with and what content they're ignoring.

• 2:01Lenny Rachitsky?

  You can also pinpoint what's bothering your users with really cool frustration metrics like rage clicks and dead clicks and much more. To this podcast, you know how often we talk about the importance of knowing your users. And by seeing how users truly experience your product, you can identify product opportunities, version wins, and find big gaps between how you imagine people using your product and how they actually use it. Microsoft Clarity makes it all possible with a simple yet incredibly powerful set of features. You'll be blown away by how easy Clarity is to use, and it's completely free forever. You will never run into traffic limits or be forced to upgrade to a paid version. It also works across both apps and websites. Stop guessing, get clarity.

• 2:45Lenny Rachitsky?

  Check out Clarity at clarity.microsoft.com. This episode is brought to you by ECO. Last month, ECO users earned an average of $84 in cash back rewards. How? With ECO, the future of personal finance. ECO is the update to a misaligned financial system, providing an app that works just like your bank, but removes almost all of the middlemen, helping even the best money optimizers optimize in less time automatically. What if you earn rewards for paying your rent? Or got rewarded for ordering food and shopping online? Or even earned rewards for saving each month? And then imagine if you got rewarded again, just for getting rewarded. With ECO, you can spend at some of your favorite merchants and automatically get 5% cash back.

• 3:30Lenny Rachitsky?

  Plus, ECO's APY rewards look more like $80, not 80 cents. And then there are ECO Points, the world's first open reward system. You earn them whenever you do almost anything in the ECO app. ECO was working to make these points the most rewarding points ever, so it pays to be early. Sounds too good to be true? Go to eco.com/lenny, sign up for an onboarding, and find out why it isn't. Lenny's podcast listeners who attend an ECO welcome session will get an exclusive 4% APY on deposits over $1,000. Learn more at eco.com/lenny. That's E-C-O dot com slash Lenny.

• 4:09Lenny Rachitsky?

  Ayo, welcome to the podcast.

• 4:12Speaker 00

  Thank you for having me.

• 4:13Lenny Rachitsky?

  I have a feeling this is going to be a really fun conversation. I was doing a little research on you ahead of this chat and I found this interesting thing that you did in the past where I found you answered over 100 questions on Quora about people trying to ship stuff and mail stuff. And I have no idea what's going on there. And so tell us what is going on there?

• 4:31Speaker 00

  In 2015, I'd been a cashier for about a year. You know, I had massive burnout from my last company, Wentz Y C, kind of like, did a hard pivot, imploded a little bit, stuff kind of picked up, sold the company eventually. And my brother, who's my co-founder and I, had this idea, and I think it was, I think it was actually from printing and mailing my Section 83B for something that I'd done. And I was like, why is there, why can't I just like go on the internet and like do this? And so I had this idea to build an application where you could give it a document and an address and we would print it and mail it for you. And it was right around when Lob was founded, which is Lob is like this printing and mailing API.

• 5:15Speaker 00

  So we built this thing called Mailform. I think it's like one of the top consumer print and mail things on the internet. Actually, I'm sure many people will listen to this, will have used it before. And then we had to figure out how to grow it. And this is the way that I actually learned how to do SEO was running around the internet, trying to find ways to tell people that we did this so that they would find us. And we actually ended up like, funny as it turns out, we ended up building a whole sort of SEO like content infrastructure around it that has really, you know, impacted my thinking. But all the answers on Quora were me just trying to get people like, you know, if you remember like 2014, Quora was like this massive thing.

• 6:00Speaker 00

  So all of the answers on Quora were me trying to get people who might be thinking about the problem that we were solving to realize that we exist.

• 6:06Lenny Rachitsky?

  That was my guess. It was going to be either user research on the space of shipping and mailing things, or is it growth tactic? And it clearly is the second. You're saying this product still exists, that some people can still use?

• 6:17Speaker 00

  Yeah, yeah, it exists. A lot of people use it. Like we have many big customers that you've heard of and like use. I won't say their names because I don't know if they want me to do that, but like, you know, I would say like there are a couple of large like delivery tech companies that use us to mail 1099s, W2 forms, what have you.

• 6:38Lenny Rachitsky?

  Holy moly. Okay. And this is just a side project of yours.

• 6:42Speaker 00

  Yeah. What a many.

• 6:43Lenny Rachitsky?

  Amazing. Let's talk about your Cash App experience, which I imagine was a pretty transformative period in your career. And you, from what I understand, you had a major impact on the success of the app and the business that was built there. To give folks a bit of scale and understanding of this, of just the Cash App in general, can you just briefly talk about, how big was it when you joined, like, the scale of the app? And then whatever you can share about just the scale today?

• 7:08Speaker 00

  So when I joined Cash App, it was probably sub 50K actives, like people moving money. Today, I think it's north of 50 million actives on a monthly basis, with all different types of money movement, like Bitcoin, P2P, card, stocks. And I think it's something like north of 70 or 80 million actives on an annual basis.

• 7:35Lenny Rachitsky?

  Wow. Okay. Great. What I want to talk a bit about is, the Cash App, to me, is a rare example of a huge consumer app success story. I've been angel investing for a while now, and I've just learned how rare consumer apps work. Like, they never work. And this one worked. Even within a big company, you'd think that there's a huge chance of something working if they have the support of a big company and the platform, things like that. Still, they almost all fail. And so what I'm curious about is, what do you think you all did most right? One, to launch it successfully in the consumer space, and then two, to keep it growing and scaling to where it got today?

• 8:13Speaker 00

  My perspective is that, and I think this is a, people don't like this kind of answer.

• 8:21Lenny Rachitsky?

  I'm like, I'm.

• 8:22Speaker 00

  But like, the thing, the thing Cash App did right was like 10 things, not one. Like, it was, there were like 10 things that.

• 8:32Speaker 00

  Actually best in class, like insane talent density, insane focus, very strong at fraud, a lot of, a lot of the way like Brian and Dustin and Jesse and Downey like tried to organize team and like, you know, with Jack's support was just really firewall from the rest of Square. The hero customer was the consumer, not the merchant. So it was like, you know, literally in a hundred percent of trade offs, the consumers' needs came first. And that's a very, very hard thing to do like inside a company. Like it made people angry, actually. Really insane focus on design, incredible like depth in, in,

• 9:16Speaker 00

  this is the thing that I think you will appreciate, but it's very hard to appreciate just like as a, you know, consumer things. People would be like, hey, what's the difference between you and Venmo? And the only reason you'd ask that is if you just hadn't thought about it for, for a second. Now, today, there's like a lot of conversions on features like, you know, so Venmo sort of caught up on a lot of the things. But at the time, like Venmo didn't have Pista debit, Venmo didn't have instant like for, for like three or four years in the United States, the fastest and lowest cost way to move money in the country between any two people who had bank accounts was Cash App. And I think that kind of changed in 2017 when PayPal, Venmo, Apple Cash, et cetera, kind of came out and launched all other things. And so I think actually

• 10:01Speaker 00

  it's possible that having done only one of those things, well, Cash App might have been successful. But I think that the reason it's differentially successful in the market today is the compound effect of all those things.

• 10:12Lenny Rachitsky?

  What are some of the lasting lessons that you take to other consumer apps that you're like Carbon Health, for example, or founders that you work with? Because all those things are amazing, hard to replicate sometimes. Is there stuff you extract from that? Like, here's something that I'm going to do at any time I'm building a consumer app. Is it like the design lead a component? Is there anything else along those lines?

• 10:33Speaker 00

  This is a thing I struggle with. I, I saw on Twitter, somebody say this comment that like, a lot of times when people describe their success to you, what they're really saying is like, this is my lottery ticket number. So I, to be, to be honest, before I go down this diatribe, I don't actually know which of things are replicable. I just know like kind of what I believe to be true. And, you know, I'm trying some, some work, some of that, et cetera. So I think.

• 11:00Speaker 00

  Cash app, as a team, we really cared about what we could do that was different and better than what else existed in market. And for us, for a long time, it was instant. It was, and if you look at all the products, like you'll see this sort of theme of like, you know, when you cash out, there's an instant option. When you get a, when you get a cash card, we issue your card to you instantly. When you sell stocks, money's available instantly. When you sell Bitcoin, money's available instantly. Like, literally, there's no like, ah, circle, circle, circle processing. It's like available to spend. And I think there's something actually lasting about the concept of instant, because there's still, in the world today are like lots of businesses and processes that are like asynchronous, but not for any

• 11:45Speaker 00

  reason other than that's just the way the world is. So I think that's like one thing that's kind of narrow. And then I would say another thing that I think is really broad is just be really crisp about why what you're doing is different and better than what exists today. And it's, it's like, being different is not enough, because it's very easy to build a thing that's different from what exists today, because you just have to look at what exists today and build something else. And being better is not enough, because it's also easy to say, hey, I'm going to make this thing better and just charge you more money for it. And so I think that there's like, you know, different, like you optimize for doing a thing that's different. It has to be better than what exists today. And it has to be better than what exists today in a way that

• 12:30Speaker 00

  matters to the end user, or to the buyer, like, kind of depending on what your market is. And then, like, after all that, it also, you have to be in a domain that matters. Because it's very easy to get those three, right? Like, to build, like, a really, like, how do I say this? A thing that's different and better than what exists today, in a way that matters to end users, could also just be art. Which is, is just like art is a complex thing to scale. And so you have to like then also get the economics right. Get the entire pipeline of like how you ship, how you build, how you talk about it. All of that stuff has to, has to work as well.

• 13:08Lenny Rachitsky?

  I think there's some really great lessons there. Just to kind of mirror back what you're saying, just differentiation in this case ends up being really important. And if you're trying to disrupt someone doing something like say Venmo, like you can't just be a better Venmo. You have to be different. And it sounds like instant was the differentiator in this case.

• 13:24Speaker 00

  For a long time. Yep. Yep. Or, or rather it was the cut through the clutter differentiator. There were like actually like a lot of other sort of long tail of things that we're doing that's different. But it was like instant was the thing where, you know, when someone says, hey, why are you better than Venmo? I'd be like, try and send me a dollar that I can use now. And there was only one app you could do it with.

• 13:46Lenny Rachitsky?

  And I think the other element of this, it connects to something I'm working on, uh, on in the newsletter. Is when you're trying to find a big idea, especially in B two B. But in this case, it works in B two C is just, it needs to be important. It needs to matter. Like you can't, it can't be a better thing that nobody values highly. Cause then you won't make money in B two B and B two C, people won't even use it. So these are really great. You mentioned in passing when we were preparing for this, that Block was trying to kill the Cash App for a lot of time. Early on.

• 14:16Speaker 00

  I wouldn't say, I wouldn't say like Block was trying to kill Cash App. I think that there were many, many people who worked there. That absolutely like, and I mean this in nicest way. Identities were tied with, with Square being a merchant business. Believe that the investment in Cash App was, could have been better deployed elsewhere. Didn't want to work on consumer. There, there was just like a myriad of, and then I'm like, I'm sure. People were there at times saying like, we probably also made a mistake and didn't communicate well and didn't sell it well and so on. But there was.

• 14:49Speaker 00

  A crazy amount of friction. I'll put it that way. It wasn't like, it wasn't like, you know, a thing I will 100% give Brian credit for is he was really effective at making sure that we had a shot.

• 15:04Lenny Rachitsky?

  Zooming out for a moment and thinking about just Square and Block and how they operate as a product company and as a business. Is there anything that you've taken away from that experience that you bring with you to where you are now, which I want to talk about next?

• 15:16Speaker 00

  I don't know necessarily if this was intentional. My guess is it was probably just like

• 15:20Speaker 00

  a consequence of Square going through, going public and trying to be sort of a rigorous financial institution. I think when you are in a large organization trying to do a actually new thing,

• 15:36Speaker 00

  I, I think small teams are better than big ones, period.

• 15:41Speaker 00

  And forcing the teams to be like super sort of thoughtful about like hitting milestones and, and actually adding value. Because that like, there's this thing people say about like, hey, this startup within startup really is fake. And the reason I think it's fake is because like when you're a startup, you actually worry about paying the people who work for you. And when you are inside the company, you just don't. And there's just a difference between like having that existential fear of are we going to be here tomorrow and not. So I think a consequence of not having that existential fear is that it's easy to just be like, hey, I need more resources. And the organization has some habits around how you acquire resources. And if the leadership of the, of the, uh, is the leadership building the new thing happen to be good at that,

• 16:22Speaker 00

  you can have growth in a, you know, new projects, people size that doesn't match the new project's success and potential. And, and I think that actually ends up, it ends up being a tax over time.

• 16:36Lenny Rachitsky?

  That's a really good point. I didn't think about asking about that, but in this case, it was a startup within a company that did well. And I also agree it rarely works and it did here. What is, what is it that you think that was so central to make you work? I know you just talked about it. How would you summarize? Just like, here's the thing everyone should do when they're maybe starting something small within a big company that's new.

• 16:57Speaker 00

  There are some macro things where I do believe we were a children of fortune, like mobile, et cetera.

• 17:05Speaker 00

  When I joined Cash App, a lot of the people working on it were fairly tenured, both at Square and just like in their careers and had like done some really meaningful things. And as a consequence, I do, I do think there's like, this is a thing I haven't quite been able to articulate well, but there is something around like a small, tightly knit senior team, super focused on a problem. And the smallness means just like less paralyzed communication and then the tightening it means a lot more trust. And then I think like Brian was obviously just, he'd been at Square for a long time, knew the organization well, was a color operator around there, knew like talent, like who was good that he wanted to,

• 17:50Speaker 00

  you know, bring on board. And I think that combination of things, like, well, not my guesses, there are other things, but I think like without that thing, it would actually have been really, really difficult.

• 18:02Lenny Rachitsky?

  I think that's an awesome lesson, just like a small trusted team that has seniority and leadership trusts to operate and not just like, hey, what the hell are you doing? It's time to, time to, time to ship faster.

• 18:15Speaker 00

  The Cash App team stayed super senior for a long time.

• 18:18Lenny Rachitsky?

  Hmm. And you said small, how small would you, was it slash, what do you recommend when you say it should be a small team for something like this?

• 18:27Speaker 00

  You know, a lot depends on the thing. There, I don't think there's a one shot answer. When I joined Cash App, I was like 11 or 12. And it wasn't much more than that for like a year. And even, I forget how big it was when I was, but like, we had real scale and a real business before we had a real headcount, I guess is the way I would say. And like, you kind of had to fight for every, every, every headcount. And I think that the headcount discipline was a Sarah Fryer thing from Square. She's just, you know, really, really disciplined about making sure that if you were trying to bring people on and spend the company's money, you really justified it.

• 19:07Lenny Rachitsky?

  I think that's a really good takeaway. Let's transition to talking about what you're currently doing, Carbon Health. You went from consumer fintech to consumer health tech. First of all, just real quick, just how did that transition happen? Was that something you planned or is that just like you went on exploring this where you ended up?

• 19:24Speaker 00

  It was more, more I went on exploring is where I ended up. I think I'd say there's, there's maybe three parts. There's one part where when I was exploring, there's this guy Russell Friend, who now works at Carbon, who had, he introduced me to like a third of my network in Silicon Valley. And the nicest guy, and basically he said, hey, there's this guy who's amazing. He was founder of Udemy and now he started this company called Carbon Health. His name is Aaron, you need to talk to him. And I was like, sure. And, and Aaron I met, and Aaron is brilliant and also had a, um,

• 20:05Speaker 00

  this crazy way of explaining a complex problem in a way that made the solution obvious. And so it was like, he was like, oh yeah, like here's how we're going to do it. And here's, you know, the thing we spent like two and a half hours together. And then at the end I was like, oh yeah, like this is obvious. Somebody should just build this thing. And then I think the second part was, I, I think everyone's the hero in their own story. I'm no different. So like, I think when I, when I left Cash App and when I was thinking about what to do next, I was thinking of starting a company and doing all this stuff. And one of the muscles that like, we really just spent a lot of time building in Cash App was going really, really deep into like the regulatory sort of wallpaper of the problems we were trying to solve.

• 20:47Speaker 00

  And so we, you know, we would have sessions where we'd be sitting in a room like product, engineering, legal, compliance, et cetera, with some regs literally blown up on a projector screen and a section of text highlighted and being like, hey, what does this really mean? Okay. What if we build a product this way? What if we structured money movement this way, et cetera? And so I casted myself instead as, hey, what if, what if I could be good at regulated businesses instead of just good at money? Um, and that was, that was the, that was the way that I tied the two together. There, there are a bunch of like other sort of very personal like ego things, like I want to build teams, mostly founders. I, both my parents were doctors and I've been through some sort of scary experiences

• 21:33Speaker 00

  in the healthcare system. So there was just like a part of it that was about sort of mission and background. But the career part was really about how do you stitch two things together? And, and I also wanted to learn. There was, there was this thing that happened in my like fourth year at Cash App where I was like, oh, there's other thing that we have to build. That would be amazing if we actually build it, uh, which is what Pinwheel, the company I'm on the board of actually is. I was like, hey, we gotta build like this platform for payroll. It's like, you know, the last giant money movement thing that hasn't really come with the needle in a long time.

• 22:07Speaker 00

  And I couldn't get the organization convinced to build it, which is what it is. A and B, I was like, oh, I want to have that insight. How, how can I have that insight of like what the second thing is faster? The second time around. And I am sad to report that three years in a carbon, I have not had it yet.

• 22:27Lenny Rachitsky?

  You got a lot going on. I, I am not surprised.

• 22:31Lenny Rachitsky?

  So I was gonna ask what draws you towards regulated, highly regulated industries being at Cash App? And I like that you already went there. Basically, you just found that that's maybe the thing that you could get really smart at, and that applies to a lot of different markets. That's an interesting insight about yourself. Like, this could be the thing that I, I get good at.

• 22:48Speaker 00

  Yeah, yeah. Or differentially better at than other people.

• 22:51Lenny Rachitsky?

  You kind of like mentioned this off to the side, this idea that you like to hire founders? And can you speak more to that? Just like why, what that means in your day to day? And then maybe how your team looks today? Is that, is it mostly founders or some larger?

• 23:04Speaker 00

  Yeah, yeah. Uh, I think team looks today about half and half. So I had this experience going through Y C where, and, and just like kind of growing up in my career in Silicon Valley, uh, where I knew a bunch of founders who were like absolute beasts, like incredible people could do amazing things. And they would bounce off organizations. They would be like, all right, I'm gonna go work at Amazon and just like not last. And when I was at Cash App, I went through a bunch of hiring processes where I was like, hey, like we should try to hire, you know, some founders to do this, like look at these companies, et cetera.

• 23:42Speaker 00

  And a thing that would happen that, and this, this part really isn't about founders, although founders like one way, so this happens, but a thing that would happen quite often is by the time you get as a hiring manager, you get a bunch of resumes to look at, like you post a job, a bunch of people apply, you're partnering with a sourcer, by the time you get a bunch of resumes to look at, they've screened out everyone that doesn't just like fit inside a box. And it's like, you know, at Google, Facebook, Amazon, Microsoft, Apple, and then at certain set of schools, and then a certain type of experience, et cetera. And so what happened is like, if you just happen to not look like that profile, I don't even see you. And I would say, hey, like,

• 24:26Speaker 00

  I would like to hire some non-traditional candidates here who were like founders or whatever. And I would just like never get it. It was, it was almost like the machine just worked a certain way. Like there was an algorithm and the algorithm was upstream of me. And I had this belief that these sort of these people that I'd seen, many of whom have now gone and start companies that are doing quite well, would be incredible value add. Like basically, if you, if you could just, it's kind of like, if you could just hold on to a rocket for a little bit, it can take you like pretty far. And, and so this is one of the things I talked to Aaron about actually early on when I joined Carbon. And I would literally in the job posting, I'd be like, if you've been a founder

• 25:11Speaker 00

  before, even if your startup was failed, please apply to this. Because like, a thing that's I think common among founders too, is there's like this sort of imposter syndrome that is goes hand in hand with the chip on the shoulder. And so we like, my team is much smaller now than it was, but like, I probably, I think the whole time that I've been at Carbon, hired about 50% founders. And I, I'm actually 100% certain the thesis was right. And I think it just came with costs that were kind of theoretical at the time. And I, and I didn't, and I now, now they're real. I think like the two big costs are, if there's any waste or bullshit in your organization,

• 25:55Speaker 00

  like they fucking see it right away and call it out. And so there's this like,

• 26:02Speaker 00

  You have to, like, there, there are just decent errors where I'd just be like, I just have to sit and listen to somebody tell me all the things that we're doing wrong. So there, there's, there's one, it's just like, it's a, it's a way to cut through bullshit. That's, that's one cost. And then I think the second cost is, and, and I, I say cost as in like, it is not better for the organizations. You have these people come in, they're incredible.

• 26:30Speaker 00

  And you really can only keep them for like two or two and a half years.

• 26:34Speaker 00

  And so, as of happening is, they're just like, oh, like, I want to, you know, they're, obviously, if you're going to be a person that starts a company, you're like super ambitious. So like, I'm gonna go run a team somewhere else, I'm gonna go try some other thing, or I'm gonna go build a company. And so, it, it's kind of like a, a team that I think is differentially higher output, but also differentially higher attrition on the market.

• 26:54Lenny Rachitsky?

  Got it. I was gonna ask about the cons, and I like that you, uh, shared them already, because I imagine working with a lot of founders adds a lot of stress to.

• 27:01Speaker 00

  Yeah. I mean, it is, it is uncritically awesome. Like, I love it. And I think, I think the, the unexpected pro also is I do think it like, levels up the team. Like, people in a team that is like very founder dense really likes it. And we ended up overtaking Carbon, like, there's lots of people who founded companies here in multiple functions, not just product.

• 27:24Lenny Rachitsky?

  Today's episode is brought to you by Element. I just recently discovered this stuff actually from another podcast, and it is such sweet salty goodness. Element is a tasty electrolyte drink mix with a science-backed electrolyte ratio. And unlike most electrolyte drinks, there's no sugar, coloring, artificial ingredients, gluten, or any other BS. Getting enough electrolytes helps prevent and eliminate headaches, muscle cramps, fatigue, sleeplessness, and other common symptoms of electrolyte deficiency. Element is the exclusive hydration partner to Team USA Weightlifting and many other Olympic athletes. Also, dozens of NBA and NFL teams and players rely on Element to stay hydrated, along with Navy SEAL teams, FBI sniper teams, and the Marines. You can try Element totally risk-free. If you don't like it, you can share

• 28:09Lenny Rachitsky?

  it with a salty friend, and they'll give you your money back. Back, no questions asked. To give it a shot, go to drink L M N T dot com slash Lenny, and you'll get a free sample pack with any purchase, which includes one packet of every flavor. My favorite is watermelon salt. You won't find this offer publicly available, so you have to head to drink L M N T dot com slash Lenny to take advantage of this offer. Stay salty. While we're on this topic of team building and hiring, do you have any other lessons and approaches that you found to be effective in hiring or team building? Just general rules of thumb or philosophies?

• 28:46Speaker 00

  My biggest thing, and I say this all the time, is when you're hiring, you pick the people, but they pick when? So you're you're actually like, there's, there's these people, there are many, many people on the team who the time between when I first met them and the time when they joined the team was like months. There was one person who was like a year and a half old. And so, so the way that operationalize that is like, I'm meeting people all the time and I'm just like, hey, like if I meet somebody I want to work with, I'm like, hey, how can I like add value to your life? So you will consider me that somebody who you would like to work with one day? So that when the time comes and there's an opportunity for us to work together, you're actually open to it as opposed to just some guy that you met on a Zoom one time.

• 29:31Speaker 00

  And I would say that's like the biggest, the biggest thing is just like trying to be like, like one of my core philosophies in life is that everybody wants something. And most of the time, it's not something you have to give or you can connect them to. But if it is something that you have to give or you can connect them to, it's criminal not to. Actually, it's like, imagine you like, just imagine you like having a conversation with somebody and that person knowing that you want something, having it.

• 30:05Speaker 00

  There's no cost to them to give to you and they just don't do it. How crazy is that? And so like I think, you know, the, the way that I sort of bring this life is if I meet somebody who I want to work with, I'm like straight up with them about it. And I'm like, hey, I hope we can find a way to work together one day. In the meantime, it looks like the things you want are not to work with me right now, but they look like this category of things, which I'm aware of. Can I connect you to this person, this opportunity, what have you? And it's, it's, it's not my thing. Like actually Rust did this for me when I joined, when I like came to Silicon Valley for the first time. He was like, hey, I'm not going to invest in your company. I think it's stupid, but here are all these people who might go meet them. And that was like transformational for me and, and, and it, it, it has turned out that over a long enough

• 30:49Speaker 00

  time horizon, it does come back. You just don't hold the cards close to just give them away.

• 30:54Lenny Rachitsky?

  Is there a story or an example of that that comes to mind of you doing that for someone else?

• 30:59Speaker 00

  Now it's a little bit of a professional hazard because I'm an angel investor. And so I, I do this for a lot of like my founders, but I probably made 600 intros last year. And that probably drove like at least one person signed up somewhere as an advisor. A couple of people took some jobs. A bunch of angel investors invest in companies. A couple of companies found, found leads for a round. Like I think it's, I'm like, I'm not special in this way, by the way, like a lot of people do this. It's just, I'm very aggressive about it.

• 31:30Lenny Rachitsky?

  And you're also connected to a lot of people as you've shared, like because of all these things you've done and the fact that you prioritize this, I think it's a really cool combination of you really prioritize connecting and helping, plus you know, a lot of people from all the work that you've done. And there's this element you just shared, which is just like, give people things that they want because.

• 31:49Speaker 00

  Yeah, I'm, I'm, I'm a reasonably good Mac maker, except in love. Never once, never once introduced to people who did it.

• 31:57Lenny Rachitsky?

  Let's, let's talk about now, now we'll move on from that. I also think in M zero, zero for some, some denominator, I don't even know.

• 32:06Lenny Rachitsky?

  I'm going to keep fishing this pool of kind of philosophies of how you build product and then we'll come back to carbon health. I was reading something that you wrote about how you're really big on understanding the thing, like going deep on stuff, just generally as a product leader and as a collaborator. Can you just talk about your approach there and where you apply that philosophy?

• 32:27Speaker 00

  This I took away from Cash App. There was, when we were working on the Cash Card, the very first, you know, so this is like 2015, 2016, very first generation of Cash Card, the head of design at Cash App, this guy, Robert Anderson, he's an amazing designer, please hire him if you can, had like this design, he was like, hey, I have this design, you know, like, we're going to do this thing. And we, I'm like, great, I get some sketch files, maybe PDFs, pre Figma, we mail them to like some card vendors and the things they send us back are like, like you would put this out as the product in your life in the world, like, what are you doing? And the consequence, Brian was like, hey, like, we just need somebody to go figure out

• 33:12Speaker 00

  how to get this thing made. And so I ended up spending a long time just going to different card manufacturing factories around the country to figure out, like, how do cards get made? Like, what are the possibilities? Is there like new tech we can take advantage of? Will the people even talk to us? Is the thing we're talking about even possible? And we ended up doing, like, at the time, there was a, I wouldn't say like super new, it had been on the chase of fire for a few years, but it wasn't on mainstream cards yet, this concept of laser engraving. And it turns out that like the machine that you use to make laser engraved cards has like thousands of combinations of settings, which all create like a different physical effect.

• 33:55Speaker 00

  Like, you can increase the power setting and get, and literally burn the plastic, you get kind of a red, rough texture, and you could like decrease the power settings and, you know, decrease the aperture, you get like a really fine, smooth consistency. And this is like, again, a thing that I learned, we went through.

• 34:18Speaker 00

  Between plastic, the overlay, the paper, the envelope, and the like finishes, easily a thousand combinations before we got to like the first version of the cash card that we shipped. And there's a team still there, still doing like literally physical card objects that are not the same as anything that exists in market. This like going to differentiation thing. And then like a lot of the stuff we did around like our regulatory work around prepaid, you know, building digital wallet, et cetera. Made me realize that like a thing that would happen very frequently is you want to work on something and you go talk to an expert. And usually for most people, an expert is not like, hey, the most expert person in

• 35:03Speaker 00

  the world, because like, that's a very, very hard thing to know who that is, especially when you're not an expert. Usually an expert is the most tenured person in the world in the domain that you're questioning. And like the level, like the, the both, the length of tenure and the depth of experience actually like can, can vary very wildly from person to person. And so what happened is like, you go ask somebody something and they will give you an answer, which is like the thing that they believe to be true. They're not lying and it's not malicious and it's just fucking wonk. Um, and you just have to keep pushing till you get to an answer. Like I don't really know how the right way to articulate this all the way, but it's kind of like you, you can't stop till you get to the end.

• 35:46Speaker 00

  And this is one of the reasons why being in a domain that matters is really important, because that's a very, very expensive activity to do if you're in a, if you're in a small town environment. So, uh, the, the like way that I apply that today, and I'm sure people at Carbon will tell you this, is I end up asking lots of questions that people think don't matter. Because I'm like, hey, we're trying to optimize something. And usually what I find is when you're trying to optimize something for, for the first time, they have an opt-in for it, you actually have to re-measure it. You have to reinstrument it, you have to like rebuild all the queries, all the like visuals, et cetera, from scratch. You have to look at them like 15 different ways. And then every time some two things like are incongruent, you have to like go and

• 36:31Speaker 00

  figure out why. And it's just like tedious work. And in, in regulated industries, and I think this is, my guess is this will end up being true in almost any complex environment with a lot of variables. That are kind of like, and the more sort of constrained by physics they are, like I think actually the more this matters. You just, you can't avoid the details. You just have to get into them. And like, if you don't, you can still do well, but it's actually more than likely fortune than skill.

• 36:58Lenny Rachitsky?

  You said you ask these questions that don't matter as an example recently, because that's a really interesting concept. Um, of just a question you asked or questions you like to ask that are just like, god damn it, why is A, are you asking these?

• 37:08Speaker 00

  Yeah, I have, there's like one from like yesterday where

• 37:14Speaker 00

  there is a field in a database table that tells you why a payment was made. And there's a bunch of, of values in that field that are very articulate, like, hey, this payment was made because it was copay. This payment was made because um, it was the patient was visiting without insurance, right? And then there's like a field that is empty. There's a value that's just null. And we, we use null as like, hey, like the way the null is described is

• 37:45Speaker 00

  after a claim is adjudicated and complete, and the patient has a balance, we, we leave that field blank if we're charging, if we're just billing the patient for their balance. The problem with that is if there is any other exception reason why a payment might occur, and we were in a complex environment, we have over 120 clinics. There's a lot of humans who can press the pay button in a bunch of different places. You will not know if it's included in that field. In that like null value field. And so it's just, this is like one of those things where I like, I'm in the middle of a Slack with, with a colleague who's like, why are you asking this question? And I'm like, I just need us to put residual balance in that field if that's what it's for. That's all I'm asking.

• 38:32Speaker 00

  So I do that a lot. And I, you know, I think people hate it.

• 38:36Lenny Rachitsky?

  Did they actually go ahead and do that?

• 38:39Speaker 00

  We're, we're in the middle of it right now.

• 38:40Lenny Rachitsky?

  You're in Slack. Okay, right. Okay. I love this.

• 38:45Lenny Rachitsky?

  So I made a list of the kind of these lessons and I really like this area we're diving into of just your kind of philosophies to work in life. So just the ones I wrote down is the importance of going deep and doing the thing yourself and not trusting that somebody's response is the end. Like, I love the way you phrase it of don't stop until you reach the end.

• 39:05Speaker 00

  Yeah.

• 39:06Lenny Rachitsky?

  This idea of helping people if you can, connecting people and the power of that, hiring founders and working with founders. And clearly, the story you just told is very founder mentality of just like going to the warehouse and trying a hundred different cards. Is there more here? What else have you found to be an important approach to leadership? Or product building or things along those lines?

• 39:29Speaker 00

  Yeah. Can I, can I say one caveat about the first one I think you wrote down? It's not that you have to do everything yourself. It's that the person who you trust in the execution role, they, they have to become the expert. They have to be like, they can't stop till they hit the end. And I don't know, I, I, I think like so much in, in all these places where, you know, super ambitious people are trying big things, so much value is lost when the person in the execution role isn't really in command of all the details and is like, and, and so I think like, it's just the reality is like, you can't, to, to, to do ambitious things, you have to work with

• 40:11Speaker 00

  people. I can't do everything myself and I, I know that. I just, the, the real lesson there is, it's not like I have to, just somebody has to. And you, and you know, they have to know that that's like what does, that what you're holding them accountable for and that you trust them to do that. And the organization's trusting them to do that as well.

• 40:30Lenny Rachitsky?

  How do you actually operationalize that? It sounds like part of it is hire founders who naturally want to do the thing well. Is there anything else in terms of how you set up the team where like this person has power to do the things that need to be done? Is it like an autonomy perspective? Is there anything else you do that allows for that in a product team in a company?

• 40:48Speaker 00

  It's like a trust but verify. And I think it's just almost never enough for someone to say, I can't do it because X person said. It is, I can't do it because we are contractually obligated. To do this another way, and if we do not honor the contract, these will be the consequences. Like, and you know, another thing I like to do kind of long this is like, okay, articulate to me what actually will happen if we don't do it this way, like what will break? Like, are they gonna find us? Is the patient gonna be, do you know what I mean? Like, because in my mind, there are many things that are used as excuses because some person's understanding of how some regulatory thing works from like their last job is being applied here.

• 41:31Speaker 00

  Where you're literally creating a worse experience for your consumer, for your patient. I'm like, why would you, like, if we are not here to try and make the experience better for them, why are we even here?

• 41:43Lenny Rachitsky?

  Let's come back to Carbon Health a bit and just have a couple of questions that I wanted to touch on. One is just about starting a company in healthcare and health tech. There are so many companies that launch every day, every week, trying to make the healthcare industry better in various ways, but for all these reasons, I don't know, the incentives are off. There's regulatory capture, there's, things take a long time, things just like often don't work. Carbon Health is an example of something that is working really well. What is your advice often to founders who want to go after the healthcare space as a tech company? Do you, what do you need to know? What should you do right, do wrong? What is your advice there?

• 42:23Speaker 00

  So one thing I'd say in healthcare that fortunately or unfortunately I think is true is very often the way to make things happen is network dependent, not

• 42:36Speaker 00

  necessarily about the merit of the thing itself. So it's just like, there's like companies that exist because the founders know the CEO of every major parent in the country. And so there's just like a deal they can get or data they can get that's like not available in any other context. So I think, I think there's just a thing there of

• 42:56Speaker 00

  Understanding of that's the business that you're in.

• 43:01Speaker 00

  I think in Aaron and Caesar's case in a carbon, because we're direct consumer, we're not trying to sell to payers, we're not trying to sell employers. And Aaron, obviously just hugely successful, because your person starting the largest education platform on the planet at Udemy. Like, there was actually really, really good founder market fit. He was like a person that had like very, very technical and had a ton of DTC.

• 43:25Speaker 00

  Success doing no thing with DTC. But there are businesses, like, and there's a company that I recently invested in and working with, where the founder is incredible and very, very technical and not super high on network and a thing. And so like, a lot of what I try to do with them is like, hey, you need to start to talk to this person. And then also, this is like a really crisp, specific use case that you need to like optimize around. And maybe I'm wrong, who cares? Like, I'm just some guy. What does it matter what I think? It doesn't have to be what I think. It just has to be crisp. And using that as a way to like, because the more crisp it is, the easier it is going to be for you to know who the decision maker and the organization you need to get to is. Because I just find, like, I'm sure you see this in B2B businesses.

• 44:09Speaker 00

  So much, there's just so much leverage in knowing the person in the place who actually has their finger on the button versus trying to like network your way in and people don't want to spend their social capital introducing you to like this partner or they've just got like 19 other things going on. So I think like that network thing is just the thing that like sticks in my mind that when I see like a lot of healthcare tech startups swimming through the soup, a lot of it is about there's some organization to have to navigate to get to the right decision maker and they have to do it 100 times. And so much of it is like just waiting for the guy who promised me the intro to make the intro.

• 44:48Lenny Rachitsky?

  That is really good and practical advice. Before we wrap up, I want to give you a chance just to like describe Carbon Health for folks that may not be familiar with it. Just like, what is it? How, where can you use it? How do you sign up? Who's it for?

• 45:00Speaker 00

  Yeah, yeah, yeah. Oh, great. Yeah, very, very happy to do this ad. It is a paid ad because Carbon Health pays me. So.

• 45:08Lenny Rachitsky?

  Where no one's paying me. I guess.

• 45:12Speaker 00

  I'm paying you prestige, Lenny.

• 45:14Lenny Rachitsky?

  Yes, and wisdom and insights and your attention.

• 45:17Speaker 00

  Exactly. So Carbon is a, an extremely vertically integrated healthcare provider based in the United States. By extremely vertically integrated, what I mean is we build and run the clinics. The providers work for Carbon and we build and run the software and we run the entire operation. And it's all like full stack in-house. And when I say like we build our own software, it's like,

• 45:40Speaker 00

  we're, how you book, how you pay, the like literal buttons that the provider presses to like say, hey, Lenny has, Lenny's blood pressure looks good. All of that is software that we built in-house all the way from front, from like the patient clicking booking appointment on google.com to the claim being sent to the insurer. We build the whole thing full stack ourselves. We have, I want to say 130 clinics around the country. I believe we're in about 17 states. We do virtual care. I think we're one of the biggest healthcare providers in California and we do both urgent care and primary care. And the thing that gets me super excited about Carbon is a lot of the experiences we build are the things that as a consumer you believe should exist in healthcare.

• 46:25Speaker 00

  So we, you know, I want to say last year we launched this diabetes program where you slap on a continuous glucose monitor, you link it to Carbon and it streams your blood glucose measurements directly into our EMR natively and your providers can see it and like interact with you around it. They can help intervene. They can tell you like, you know, new dietary lifestyle choices to make. And we're going to do that with every device at some point on some scale and you don't have to pay $200 a month to use it. $200 you use it, sorry.

• 46:59Lenny Rachitsky?

  Amazing. Well, with that, we've reached our very exciting lightning round. I've got six questions for you. I'm going to go through them pretty quick. We'll see what comes to mind. No pressure. You can skip them too if you want. You ready?

• 47:11Speaker 00

  Yeah.

• 47:12Lenny Rachitsky?

  What are two or three books that you recommend most to other people?

• 47:17Speaker 00

  Three Body Problem, Children of Time trilogy, and Stormlight Archive.

• 47:24Lenny Rachitsky?

  Are these all sci-fi books?

• 47:26Speaker 00

  The third is fantasy.

• 47:28Lenny Rachitsky?

  Good clarification. Great. Amazing. I'm reading an epic sci-fi book right now called The Fire, Fire in the Deep.

• 47:37Speaker 00

  Oh dude, amazing!

• 47:39Lenny Rachitsky?

  Okay, yes.

• 47:40Speaker 00

  So, something that's gonna really piss you off. I don't think it's a spoiler.

• 47:43Lenny Rachitsky?

  Don't know spoilers. I'm almost done.

• 47:45Speaker 00

  It's not a spoiler. Um, the story's not finished.

• 47:51Lenny Rachitsky?

  Hmm, there's like additional books that aren't done yet.

• 47:55Speaker 00

  Yeah, and I don't even know if they're being written. It's brutal.

• 47:57Lenny Rachitsky?

  It's okay. I find that the first book, except for the Three Body Problem, where the first book is the worst book. I feel like with this and the many of these books, the first one is like, I'm just gonna stop, I think, at the first one. That's my plan.

• 48:11Speaker 00

  So, so I'd say the other two are, in my opinion, very clever explorations of types of intelligence.

• 48:18Lenny Rachitsky?

  Excellent timing for studying what might happen with AGI. Great. I love this, I love where this is going. Next question, what's a favorite recent movie or TV show?

• 48:29Speaker 00

  War of the Worlds was exceptional.

• 48:32Lenny Rachitsky?

  Is that recent?

• 48:34Speaker 00

  Yeah, there's, there's one that I think, I think that it was a three-season thing, just ended maybe last year. And it's like, it's like a kind of more modern take, and it's just very thoughtful, and it's sci-fi, but such deep drama. I also love Succession, but I'm still, I haven't gotten through season two yet.

• 48:54Lenny Rachitsky?

  This season is incredible.

• 48:55Speaker 00

  I know, I know. I had to mute it on Twitter because I was like, you guys are ruining it for me.

• 49:01Lenny Rachitsky?

  Oh man, that's impossible to avoid. You just have to delete your Twitter account, I think is the only strategy. There's an amazing Twitter account called No Context Succession, and they just-

• 49:11Speaker 00

  Love it!

• 49:12Lenny Rachitsky?

  Yeah, they just tweet random clips, but it's gonna totally ruin it.

• 49:14Speaker 00

  My favorite, my favorite Succession meme is, is the Kendall on the phone, "It would be good to connect." It would just be good to connect, just like- Such a metaphor for life.

• 49:27Lenny Rachitsky?

  Interesting, very subtle. Oh, I see what you're saying. That feels so appropriate to you, Io. Just connecting people. It's like the core of your being. I can see why you love that meme. Next question. What's a favorite interview question that you like to ask when you're hiring and interviewing?

• 49:42Speaker 00

  This one's not super crisp. It's like, there's kind of two sides to the question. It's like a, tell me something you did that worked out, but not for the reason that you thought it would work. Or tell me something you did that was a good decision that didn't work. Like, what? Tell me a bad decision that worked out or a good decision that did not is like, I think, the way to frame it. And it's, it's a lot of like, my process is just teasing out introspection. It's just like, are you a person who is reflective about like, the decisions you've made and why they worked and why they did not, and incorporating that into your model so you make difference as soon as possible?

• 50:14Lenny Rachitsky?

  Final question. Do you have a pro tip for mailing something or shipping something from your experience helping everyone on Cora mail and ship stuff?

• 50:23Speaker 00

  I'd say, I'd say my biggest hack is, like, if you're doing anything local, where you're just like taking something point to point, Uber can do it for you. Like, I literally sent somebody cookies recently, and I was like, oh, like, a guy showed up at my house, I gave him back cookies, and like, somebody, my friend texted me like, you know, a couple hours later, and I was like, thank you.

• 50:47Lenny Rachitsky?

  That is a hack. Io, this was amazing. You're an amazing human. I really appreciate you making time for this. Thank you for being here. Two final questions. Where can folks find you online if they want to reach out, learn more, maybe ask you follow-up questions? And how can listeners be useful to you?

• 51:02Speaker 00

  I'm on Twitter at A Y underscore O. And I write at KUNLE app, K U N L E dot app. And the way listeners can be useful to me is to tell me what I'm wrong about. I love that. Just be like, hey, you said this thing, it's false. Here's an example of why. I love that.

• 51:23Lenny Rachitsky?

  I love these answers to this question because people love to leave, leave comments on YouTube, and so we will see what comes in.

• 51:31Speaker 00

  What have I just signed up for?

• 51:33Lenny Rachitsky?

  Well, find out. Here we go. All right. Well, thank you again so much for being here and bye, everyone.

• 51:40Speaker 00

  Awesome. Thanks for doing this. Thanks for having me.

• 51:45Lenny Rachitsky?

  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.