20VC: Affirm Max Levchin on Why Grading Talent by Letter (A or B) is Total BS | How to Create a Culture of Post Mortems and Writing | Why You Should Only Study Failure Not Success & The Biggest Surprises Scaling to $18.7BN Market Cap

Max Levchin is one of the great founders and technologists of our time. As the Founder and CEO of Affirm, he has built am $18.7BN monster in the buy no pay later space. Prior to Affirm he was one of the original co-founders of PayPal. Max is also the co-founder and Chairman of Glow, a data-driven fertility company. Max is also an immensely successful angel investor with a portfolio including the likes of Yelp, Pinterest and Evernote. In Today’s Episode We Discuss: 04:19 How to Hire the Best People in the World 05:05 How to Manage Extreme Personalities 08:18 Biggest Lessons on Trust and What Happens When Lost 12:05 Is Grading Talent A and B Players Total BS? 15:31 How to Think About Calculated vs Uncalculated Risk 27:18 How to Create a Culture of Post Mortems: Step by Step 32:08 Why Every Person Must Write and How to Create a Writing Culture 36:01 Leadership Lessons from Layoffs 38:38 Is Affirm Losing or Beating Klarna in the US? 47:03 Peter Thiel or Elon Musk: Who Would Max Rather Start a New Company With? 48:37 Quickfire Round

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

• 0:00Speaker 00

  I think opinionated is exceptionally valuable. The hard red line for me is always, once I can't trust you. The story about knowing the letter grade of every person you hire in your company, whether it's 2,000 people like a firm, but that's just silly.

• 0:16Harry Stebbings?

  This is 20 VC with me, Harry Stebbings, and today we have an incredible guest. Simply put, Max Levchin is one of the great technologists of our time. As the founder and CEO of Affirm, today he's built an $18.7 billion monster in the buy now, pay later space. Prior to Affirm, he was one of the original co-founders of PayPal. Max is also the co-founder and chairman of Glow, a data-driven fertility company. He's also an extremely successful angel with a portfolio including the likes of Yelp, Pinterest and Evernote. Before we dive in today, here are two fun facts about our newest brand sponsor, Kajabi. First, their customers just crossed a collective $8 billion in total revenue. Wow. Second, Kajabi's users keep 100% of their earnings,

• 1:01Harry Stebbings?

  with the average Kajabi creator bringing in over $30,000 per year. In case you didn't know, Kajabi is the leading creator commerce platform with an all-in-one suite of tools, including websites, email marketing, digital products, payment processing and analytics for as low as $69 per month. Whether you are looking to build a private community, write a paid newsletter or launch a course, Kajabi is the only platform that will enable you to build and grow your online business without taking a cut of your revenue. 20 VC listeners can try Kajabi for free for 30 days by going to kajabi.com/20vc. That's kajabi.com, K-A-J-A-B-I dot com forward slash 20 VC. And after building your online empire with Kajabi,

• 1:46Harry Stebbings?

  it's time to scale your global team with remote seamless hiring solutions. So every business is a global business in 2025. But how do you do payroll for your global business and team and comply with international labour laws? Well, remote handles payroll, benefits, taxes, stock options and compliance to help companies of all sizes pay and manage full-time and contract workers all over the world. No matter where your team lives or where. Remote's global employment solutions keep your team, your finances and your intellectual property secure. Remote never charges hidden fees, just best-in-class global employment solutions for a low, flat rate. The world's top remote companies love Remote. GitLab, the world's largest all-remote organisation, trusts Remote to run their global team.

• 2:31Harry Stebbings?

  Remote is funded by Index Ventures, Sequoia Capital and the host of the greatest podcast ever, Harry Stebbings and 20 VC. Ready to learn more? Head over to remote.com/20vc, that's two zero vc, and begin hiring within minutes. Enjoy 10% off your first three months by using the promo code TWOZEROVC at checkout. Now that your team is up and running worldwide, make sure your finances work just as hard with Brex, the ultimate financial stack for startups. So when Brex was founded, it wasn't just about creating another financial product, it was about solving the really gritty challenges that founders face daily. Let's be honest, building something from the ground up is hard enough without dealing with clunky outdated banks that pile on fees and leave your cash idle.

• 3:15Harry Stebbings?

  Brex is different, it's the financial stack that scales with you no matter where you are in your journey. From corporate cards to maximising your runway to earning yield on your cash. Brex was designed with founders in mind to make every dollar go further so you can focus on building. And here's what really stands out to me. Brex combines the best of checking, treasury and FDIC insurance in one powerhouse account. You can send and receive money globally at lightning speed. Earn yield from day one and still access your funds whenever you need. Plus, with 20x the standard protection through programmed banks, your cash is not just working harder, it's working safer too. It's no surprise that one in three venture-backed startups in the US, with companies like Anthropic, Coinbase and Robinhood, I mean my god, these companies are incredible.

• 4:00Harry Stebbings?

  Trust Brex to help them grow. If you want to join the smartest startups on the planet, head over to brex.com/startups and see what they can do for you.

• 4:09Harry Stebbings?

  You have now arrived at your destination. Max, I am so excited for this dude. It has been a long time. So, thank you so much for joining me today.

• 4:18Speaker 00

  Thank you for having me.

• 4:19Harry Stebbings?

  Not at all, but I'd love to start with actually something that you've said before. When it comes to hiring brilliant people, you said brilliant people have extreme personalities more often than not. And when I thought about that, I thought, do you want them in your team as a result of these extreme personalities?

• 4:38Speaker 00

  You mostly do. Everything is arranged and so you inevitably find yourself asking the question, you know, how extreme is extreme? And what will it cost me if this person blows up or goes into some sort of a behavioral tailspin? But most of the time, truly brilliant people are worth the quirks and it's a hallmark of a good manager who knows how to bring out the best from the people, even if they are extreme.

• 5:05Harry Stebbings?

  When we think about extreme levels, often extremes are dislikeable. They're not that amiable, they're very opinionated. How do we think about that being a pro versus a con?

• 5:15Speaker 00

  I think opinionated is exceptionally valuable. The sort of pinnacle of teamwork achievement is to have really strong opinions, not hold them back, and yet manage to not so profoundly offend the person or the teammate that you're judging or providing feedback to, that they choose to opt out, whatever that means for the problem. But you want someone who can walk into a room and say, that is a pile of garbage and I love all of you, you're amazing people, I'm proud to be part of this team, but what we've built here together is not going to ship because it's terrible and now we're all gonna regroup and rethink and build something better. Like that, that is the way of trying to couch the blow, but if you don't give the blow, you're gonna ship garbage.

• 5:58Harry Stebbings?

  Teach me, I do that and people get offended, they get emotional and they get upset and I get told that I'm too direct. What do I do?

• 6:05Speaker 00

  Empathy is important, understanding that when you're judging someone's work, there's two possibilities, it's bad, it's they've done the best and circumstances intervened and they can do better, but it wasn't, it isn't good enough and they need to know, but you know they can do better and the moment is about telling them, this isn't your best work, but I know what you can do. And this is just, it's an embarrassment, but it's not an embarrassment of your ability, it's the embarrassment of the time you had or the effort you've been able to put in and that's okay, like that we can fix. Sometimes you look at work and you say, wow, like this person cannot do better. Full stop. Don't worry about being direct. The conversation you're going to have with them at some point very soon is I don't think you have a place on this team anymore. And that that's a much harder conversation, but you have to have it too.

• 6:48Harry Stebbings?

  You always have said to me, and I literally you said this years ago, you said, when there's doubt, there's no doubt. And I always loved it and I always think to that. But on the extreme element, where does extreme good transition to extreme bad? Have you had that before? And what have your lessons been?

• 7:03Speaker 00

  Any form of narcissism or selfishness, self orientedness is probably the most important trigger of churning an extreme personality from good to bad. Or said in the opposite way, you can be as great at throwing tantrums or as direct in your criticism as you want to be. If you maintain a good degree of humility and just remember that the second it becomes about you being better than everyone else, everyone else will start hating you. And if you're their boss, they're going to hate you quietly. And that's the worst possible situation. And so what you really want is to constantly remember that you are but a part of this team.

• 7:43Speaker 00

  And when you're criticizing someone's work or you're telling them this has to be redone, you're always redoing the work together. Like maybe you're not going to personally move the bits, but you're going to have to be involved because they're not going to be happy with a second round of the, well, this is still garbage. That's really important. I think there are many ways where extreme personalities flip into being toxic. And so you just have to constantly watch out for it. But it is the price you pay. Brilliant people are often over the top and that's part of the ingredients that make them brilliant.

• 8:12Harry Stebbings?

  When they flip him to toxic, is there a redeeming route back or is that generally a one way road?

• 8:18Speaker 00

  I believe in second chances in general in life, except in matters of integrity. The hard red line for me is always, once I can't trust you, I can't ever trust you. From that one, in my worldview, there is no walking back. It's not true with kids. Kids lie because they're exploring. But even with my own kids, I've had sort of very, very difficult conversations where I said, look, this is a thing that in my professional and personal world of adults, it's the hardest thing to come back from. The fact that you just told me something that isn't true is really hard for me to hear. And saying that to a teammate, you're not going to talk to them like you're talking to a thirteen year old. You're going to say, look, I can't trust you over again. Get out. So other than that, I think there is a way to walk back a lot of the, no matter how crazy toxic a situation could be.

• 9:02Speaker 00

  If it's a situation, the judgment you have to make as a leader is, is the person profoundly toxic? Or did the situation turn toxic? Situations come and go. People don't really change that much.

• 9:13Harry Stebbings?

  You said earlier, has the person done all they can to execute on the task and to achieve what they want to? Where I struggle is we have differences in expectations around what one should and can do. If you are a head of sales, listen, there's always more you can do. There is always another gift you can send, like you can click, thoughtful comment you can do, additional resource you can send. I will do everything to fucking win. And people on teams don't always think quite as bluntly obsessively as that. How do you think about that alignment between what is rational to expect?

• 9:48Speaker 00

  So my brilliant wife frequently reminds me that more often than not, it's about incentives. The unlock for you, the reason you are so obsessed with fucking winning is because it's your company. It's your project. It's your passion. Like you've been doing this since you were fourteen years old. And like the only goal is to do more of you. And so you don't need motivation, like your incentives are aligned, like you were essentially born with a microphone in your mouth to just try to get bigger.

• 10:16Harry Stebbings?

  Literally.

• 10:17Speaker 00

  Yeah. And I don't think it's, you know, nothing to be ashamed of. But drive and grit that is the other side of that coin are rare. And people who have it end up being entrepreneurs or something resembling entrepreneurship because it is such an unstoppable force. Which is amazing. Like if you don't have it, it's a thing you can't really teach. On the flip side, there's plenty of other people that you not just need, you require to achieve your goals. Like no one is an island in pursuit of their entrepreneurial ambition. And you have to figure out what it is that motivates them. And in many cases, the motivations are not at all relatable for you. Like you had decided at some point that you're willing to work.

• 10:56Speaker 00

  In Sundays to succeed and that's just it. And like, yeah, some people go to the pub and others go skiing and everybody has their thing. And you decided, no, I'm just gonna work and that's what I'm gonna do. And having that conversation with someone who's just joined your team. Like, hey, we're all gonna work on Saturday and Sunday because I want to succeed is not gonna do anything for them. What you need to do is figure out what is it that they're looking out for and what is their goal? And if their goal is to go skiing three days a week instead of two, you may have been a hiring mistake. But if their goal is to feel great about their work, the investment you have to make isn't about beating them up about this work quality is garbage. Or telling them, go work harder is to say like, hey, I know you're motivated by quality.

• 11:37Speaker 00

  Let me spend all available time to just get to a place where you look at every pixel you put down or every sound you record. And you're just falling out of your chair about how good it is and it can't really get any better. That's what motivates you. I know. And that's what we're gonna do together. That's what team leadership is all about. The difficult part of leadership of teams is always deciding that this is irredeemable. Cause you want people to have second, third, fourth chances. But at some point you're like, well, okay, you're great, but you are hiring mistake and I'm so sorry.

• 12:05Harry Stebbings?

  At what stage are you forced to hire B team players? I find it absolutely absurd that we think we can only continuously hire A team players. Eighteen players by definition are exceptions and you can for the first 50, maybe 100. I still don't think so with 100. But when you are the size of a firm, you know, it's impossible to only have 18 players. When are you forced to hire B team? And how do you think about that?

• 12:28Speaker 00

  I think at any given time, you're hiring, the story about knowing the letter grade of every person you hire in your company, whether it's 2,000 people like a firm, but that's just silly. Like you don't know. People are these days coached and trained and fine tuned to be exceptional interviewees. And so somebody coming in and telling you their life story, like you know, they have watched probably an interview you conducted with someone who's a professional interviewer, who spelled out what it looks like when you're hiring an A player. You know, someone's gonna be like, hmm, extreme personality is very important. Max Levchin said so. How do I get myself more extreme? What I need? And so. I don't think you can really judge A or B overall grade at hiring time.

• 13:12Speaker 00

  I think you can assess someone's coding ability, but a really, really good assessment test requires a take home because you can implement quicksort on camera very quickly, but so can a C player these days. And so you have to give people a lot of time. And if you give them people a lot of time, they will inevitably stray from the rules of whatever the test is. So anyway, the point is you can filter out C players. You can definitely filter out D players. Differentiation between B and A is what happens once you've brought them in. You go like, oh, my God, that is a brilliant hire. And more often than not, you say, I thought this was going to be a great hire. It's a good hire. Like, I'm happy, I'm happy we have them. And the question there is, what do you do to get the absolute best work from this person? And will they have the Steve Jobs quote,

• 13:57Speaker 00

  A players, hire A players, D players, hire C players is profoundly true. There should be an asterisk explaining why this is true. And the reason for it is fear. A players love working with other A players because they know the demands of the job and the team dynamics just make them better. So you want to have people who challenge you and tell you, hey, I know you're an A player, but that just wasn't good. Let's go redo this together or you go redo it, whatever. And so A players just want to escalate away or accelerate away from the pack. B players frequently say, look, I'm a worker B and I know I'm not an A player and that's okay. I am just going to grind out good code, art, sound, whatever. But some of them are fearful and say, well, if I have too many B players rounded, let alone A players,

• 14:42Speaker 00

  I will look terrible. It will be very obvious that I'm just not that good. There are people here who are a lot better than me. So the way to fix this is for me to become a manager and for me to hire a bunch of people who aren't very good at all, like much worse than me. And then I'll look like the tallest mushroom and that'll be great. And so that is the real danger of B players. Having people who are perfectly willing to do good work, day in and day out, is not the worst thing in the world. There's plenty of things that A players will turn their nose from because it's just not that challenging. It's not accelerating them out of the A pack. And Bs are very, very good for that. And a lot of B players, over time, grind their way to being A players. So you're investing in their future and they know it. So that's also positive. But B players who have fear of being found out are the ones that you have to watch out for.

• 15:28Harry Stebbings?

  In terms of like the actions that they take, I loved the statement you said. You said, "We take calculated risks, do the calculating." And what I wanted to ask there was, when you review the journey, what was the biggest calculated risk that you took? And success or fail, what did you learn from it?

• 15:46Speaker 00

  When I started the company, I sat down with a bunch of bankers and said, "Hey, I'm going to start a company where I'm going to deal away with this imbalance. I'm going to eliminate fine print, so consumers do not have to read fine print of, you know, to find out what the business model is and so on." Many others for ideas like this. Several of them, including some very well-known people, whose names will not be revealed, laughed at me and said, "Like, you're insane." Like, this is not just like the way you make money in this industry. It's the way you make money. It's the only way. This all been competed down to the only money you have is in the form of things that the customer doesn't understand because everything else has been wiggled out. And I said, "You know, I don't think so." And I don't actually have a full model in Excel

• 16:30Speaker 00

  or in my head or on paper proving that I'm right. So this was not a calculated risk. But I think it's not really worth running a company that fits neatly into the mold of screw the customer, make some money. Like, I want to run the one that says, "Never screw the customer. Let's see if we can make some money." And like at this point, we're public, our financials are visible. We do very well financially. And so it was totally possible, but this was a non-calculated risk at the very beginning of the mission that I just sort of decided like, we're going to do it. And so the calculus of the first bet was like not a calculus at all. It was just like, "Ah, I think it's going to work, but I'm okay finding out that I'm wrong."

• 17:06Harry Stebbings?

  What highly calculated risk did not work out? Where your process was right, but the outcome was wrong?

• 17:12Speaker 00

  We have a whole culture of postmortems at a firm where we record every decision we make, especially... I'll give you like a very retail one because now that I said postmortem. Postmortem culture comes from engineering and obviously I'm an engineer by training and past. And so it's easy to reason in those terms. But years ago, we had decided to very rationally scale our infrastructure because we expected a giant launch with just a crazy amount of Transactions and he was all going to be 10x bigger than what we were at the time. And so we were prepping at breakneck pace and scaled up every part of our backend infra and then our frontend infra and everything, everything.

• 17:52Speaker 00

  And then the day off, it just fell apart massively because we basically overloaded our backend with our frontend. And so we were all dressed up with no place to go and the entire database data layer of a firm was just in shambles for several hours while we were cleaning it up. And but it really was a self inflicted one. We were like, well, we just don't know how big it's going to be. So let's assume it's going to be super huge. It was very modestly sized at launch and turned out to be

• 18:19Harry Stebbings?

  What do you learn from that?

• 18:21Speaker 00

  Do the calculating. This was not a, an unforeseeable error. Someone should have sat down and said, all right, so we're scaling the frontier faster than we're scaling the back tier. At some point, given the architecture of the system, you will have what's called an oversubscription of frontend connections to the backend and the backend will start choking. Because even if frontend doesn't do anything, just holding these connections is expensive. If you have like a 10x mismatch, you're going to bring down the database. And that is what happened. So someone should have done that work. That would have been a calculated risk that did not, would not have backfired, but this time it did.

• 18:51Harry Stebbings?

  You mentioned the postmortem culture there. People always say you learn so much from your failures. Do you learn more from your successes or from your failures, Max?

• 18:59Speaker 00

  Failures for sure. It's boring to analyze success. Like, well, we did well. It's good. I'm tired. I'm going to go to sleep is kind of the, the natural, like your oxytocin is

• 19:08Harry Stebbings?

  Do you not think that you can actually learn the same thing? We just don't analyze success because it's successful. It's like, yeah, move on. And actually, if we analyze why you were successful, it's because we actually were really thoughtful around, you know, um, tech over time.

• 19:22Speaker 00

  Problem is that with successes, the texture of each individual decision is much harder to detect. If you look at the world as a funnel analysis, which is a really good way of thinking about a lot of things, you start over here, like become aware of a thing, start thinking about it, start considering it, start deciding it, deciding succeeding or failing. There's a real kind of a blur between the first five steps. And like this is true of web apps and checkout funnel. And advertising and all kinds of other things. If everything has gone pretty well, there's a lot of effort that has to go into like, all right, well, that step to this step of the funnel, the conversion rate was 95%. And the next one was 95%, the next one was 95%. Well, which one did the best? I don't know, they all seem like 95%. It's pretty good. Now, you should ask the question, well, could it have been 96?

• 20:07Speaker 00

  Like, why didn't we do better? And so you're inevitably asking the question in terms of failure again. You're not really saying, how were we so good and smart that 95 was, you know, that's really high? It's really good. Should we have done 94? Would that have been enough? Like, those questions are kind of boring and pointless to ask. I really believe in asking the question in terms of what should we have done better? Even if it's the most successful thing ever. It's nice to take a victory lap and sort of high five the team. But ultimately, the question has to be, like, this is a, I have a friend who grew up in a very managed parenting environment, where his parents would ask him when he showed up home from school with a 98% result in a test, like, what happened to the other 2%? And I'm not sure it's a great way to have a childhood, but it's a great way to run a company.

• 20:50Harry Stebbings?

  Can I ask you, if I'm a founder listening to this and I'm going, wow, I really want to have a post-mortem centric culture, but I don't really know how to do that, like, as of today, implementing that. What advice would you give to me on how to implement and start a post-mortem centric culture?

• 21:04Speaker 00

  So for everything, create a document space. So every time we have a blip for whatever definition of in our systems or in our processes or in our models, anything, a separate conversation is carved off on Slack. A separate conversation is documented in a Google Doc or a Notion or in whatever tool we're using for this topic, but it's segregated. It's very difficult to peel away details having to do with event one if you're coming with event two. And so first, sort of most important thing is make sure you have separation of data streams. Because if you get good at post-mortem culture, you will gather a lot of data and a lot of it will be irrelevant.

• 21:49Speaker 00

  Like, people will say, well, this also happened at the same time. I see it in the logs, like, something just went down. And inevitably, I'm like, no, that's unrelated. This was because of whatever, something. And so you want your data plentiful. You want as much of it segregated into a separate pipeline of raw content as soon as possible. You want preservation of this information in a special place. You want someone responsible for writing it up and distilling it from pages and pages of kind of raw data into a essentially a white paper. And then you want the entire team to go and comment on it. And the most important thing you can do about the entire process is you have to completely separate any form of apologizing, responsibility taking, you know, we should do better next time.

• 22:35Speaker 00

  Like you have to be clinical about it. Like this happened, it wasn't good. Here's why. You have to give people who were feeling directly responsible for the flop, whatever the flop was, to feel very free to comment on what happened. Like you, you need to encourage them to speak to the fact that they screwed up, yet without any sense of like, well, I need to make myself look better. I need to create a, cast a certain light on the decisions that I made. Like just get rid of all emotion, exactly describe what happened.

• 23:03Harry Stebbings?

  Do we have a structured time for these postmortems? Is like, hey, we have a weekly postmortem on what happened last week. How do we make sure that we don't just go, yeah, it's a really nice idea and then actually not do it?

• 23:14Speaker 00

  You have to give people responsibility to do them. You have to have a very directly responsible individual for authoring and presenting the postmortem. That's very important. You need to make sure their manager knows that their list of responsibilities has now been enhanced by this postmortem and they're on a hook for it. We typically try to say, hey, it's a week, maybe two weeks. Like that's the most you're allowed to take to generate a real postmortem. And then there is a weekly review that takes place within the teams that are postmortem something, basically going through like, hey, this happened, the postmortem has been prepared. And then someone even more senior will say, that's a reasonable explanation. I buy it. Or like, you know, this is not quite deep enough. Like we need a better analysis of what went down, or I don't actually think these are accurate.

• 23:58Speaker 00

  And this is where you need your A players in the room because they will have the experience and the intuition and sort of past knowledge of how these things go to kind of say that that's a deep enough postmortem, or this is just like, you, you described what happened, but he didn't explain it.

• 24:11Harry Stebbings?

  Outcome, well, highly differentiated in opinions.

• 24:15Speaker 00

  These days, the ones that I see are very matter of fact. It is never about the individual. It's always about the events. Always come down to a this happened. This choice was made either by a program or a human. And if it's a program, it's a bug or a poorly calculated outcome. If it's a human, it can be a judgment error. Like, I thought I would flip the switch and the lights would go on. It turned out to disable power for the entire city. That's a conversation we've had here, but it's never controversial. It's in the past. We need to do better. What do you do? Like, you add a big guard on the switch that says, before you're going to turn off the lights for the entire city, please read this to a line warning.

• 24:51Harry Stebbings?

  And speaking of kind of the decisions that lead to the postmortems, you said before, make reversible decisions fast. And it kind of makes me think of the one way, two way doors. Honestly, I think everything is really a one way door. I mean, there are very, very few things that are two way doors. How do you respond and think about that?

• 25:06Speaker 00

  I don't agree. Things that change your reputation, things that change relationships with partners, decisions that do that sort of thing are basically irreversible. Once you-

• 25:18Harry Stebbings?

  But two things, like when you look at, I always use this as an example. When you look at the transience of news and reputations, you know, Chamath on All In said about the, you know, Uyghurs and it being below his line. A week later, he was number one on Spotify and Chamath is Chamath. And honestly, it has not impacted his reputation one bit.

• 25:39Speaker 00

  There are probably some people who would disagree with you on that topic. I don't know exactly who they are, but I think we can guess. But I agree that superficial statements, even explosive or incendiary even, fall off the news line faster than you would expect them to. I think people's reputations recover and get managed and manipulated. And maybe it's true for companies too, but I think rational people have long memories and do not forget, are not easily persuaded by Spotify top 10 or, you know, whatever is the front page of the Washington Journal today. The decisions that probably I care about a lot more are architectural decisions. You can decide to invest a year into rebuilding your systems in some new fashion.

• 26:22Speaker 00

  And if that's a bad decision, you're going- To look back and say, well, we're too far in. It was a terrible call, but you know, it's just, you know, it's so far and like, what do we, we can't just uproot this. So many people will be upset. Or you agree to a deal that is economically non-viable and you have, you're staring at a giant black hole and you want to get out of it, but you signed a contract and you can't. And maybe it's like, not that much money. And so you don't care, but sometimes it can be a lot. So I, I believe in one-way doors and part of the postmortem culture is all about identifying one-way doors. That you thought were two-way doors and saying, we shouldn't have done that because that turned out to be not a thing we could easily come back from. I agree that a lot of decisions that seem like one-way doors are not. That's probably a very fair statement.

• 27:03Harry Stebbings?

  Is there a decision that you thought was really reversible? Make it fast and it turned out not to be so reversible.

• 27:10Speaker 00

  I think for every 10 of the ones that I thought were not reversible, only one, maybe two were irreversible.

• 27:18Harry Stebbings?

  You've also said something that I love, which is care about how we make things, mind the quality of the invisible parts. I really like that and I love for you to expand on that.

• 27:28Speaker 00

  Yeah, that's another reference to Steve Jobs. He was obviously such a brilliant product guy and I aspire to be a good product guy myself. I think the notion of, so it's an oft-repeated story where they signed the insides of the motherboard on, I think the first Mac or something like that. And so the, the team put their signature on it and the narrative around it was if you built something beautiful and amazing, you don't mind. In fact, you take pride in signing the insides because if anyone ever looks, they will be blown away by just how beautifully the whole thing is designed. And so that's where you want your artist's signature. There's definitely a natural and very healthy tension between shipping fast and building things beautifully.

• 28:07Speaker 00

  And building things beautifully requires design and time and consideration of what the next version would look like. So you don't have to rebuild from scratch. There's not a hard and fast rule to. Know what matters so much that you want to do a great job. And therefore you will always have a team cleaning up or refactoring code or dealing with tech debt. Like that, that's a property of every startup that's been a startup for a decade. But there are parts that are obviously going to be important and valuable. And it could be as simple as some basic UI decision or something as complicated as a machine learning model that deals with credit underwriting, which is one of our sort of crown jewel type achievements. We have some very, very, very advanced ones. Those things you know matter.

• 28:52Speaker 00

  You know, you cannot let them be anything but the absolute best you can possibly produce. When somebody tells me we're doing X and it's going to be a month late. My natural reaction is to sort of jump up from my chair like, you know, how can you possibly? How dare you be so late with this thing? Like, why can't we ship it yesterday? I absolutely make exceptions for things that I know are going to be crucial for months and years to come. That's where you have to mind the quality of the invisible parts. A lot of times these are in the backend, be it credit or scalability or infra, et cetera. It doesn't make me, it doesn't make it any easier to cope with to hear someone say, yeah, it's slipped by a month because we found something that has to be redone. But you know, it's important and you sort of try to, try to cope.

• 29:32Harry Stebbings?

  How do you feel about the concept of like the lean startup and MVP ship? When it's ready, just like the first thing you can get into customer's hands, ship. Does that lead to a generation of shit software? Or is it actually a great way to get customer feedback?

• 29:44Speaker 00

  I think there are definitely things that you want in the hands of the customers as quickly as you possibly can. Like we have a prototyping team at a firm that is trusted slash empowered to ship stuff that is not really beautiful or production quality even to get customer feedback. Because it's really important to find out if something, some crazy idea that we have has any sort of odds of success. Once it's out there and you get data and you think the data tells you that this is great. You don't just say, cool, let's leave it out there and go to the next one. We basically pull down the feature, pull down the product and say, okay, now we're going to do it right. So we're going to make it scalable. We're going to make it beautiful. We're going to make sure that it actually stands.

• 30:27Speaker 00

  The test of time, the idea of finding out of the idea was really important. But if you believe that ideas speak for themselves so much that it can be garbage, you will end up with a collection of garbage and generation of garbage software. And you just have to know when the moment is to say, actually, that really does have traction. Someone will build a better version of this if I don't do it myself. And that's what you have to do now.

• 30:49Harry Stebbings?

  Do you think speed is the most important determinant of success in startups?

• 30:53Speaker 00

  It's one of the most important. It's very rare that I cannot think of more than like fewer than a handful of companies who had gotten to huge success, huge scale by just kind of rolling along. I'm sure I don't know the inside story and what seems to me like rolling along is probably not rolling along. In fact, maybe they were probably feeling like it's Brecknake pace on the inside. They just didn't show it very well. There's some founders and some CEOs who have the duck foot property where they're like placid above water and the feet are going at crazy pace below water. I am not one of those. You can always tell if I'm trying to go faster, you know, from the feet up. But there are people who are capable of maintaining composure and maybe their teams are composing themselves too.

• 31:34Harry Stebbings?

  That's interesting. You said we are a writing culture, favor short, pithy, one pages to novels or live rants. I personally like a live rant, being born with a microphone in my hand, as you kindly suggested. What does a writing culture truly mean to you, Max? And why do you think it's optimal?

• 31:52Speaker 00

  So it feeds back into that notion of postmortems, right? If you have a depository and we literally have a postmortem depot where people can go and review every major or minor thing we did, going back to the beginning of a firm time and learn from it, it's really valuable. We have a library of case studies that are internal to the company saying, well, that was a screw up. The great outage of XYZ, what happened there? Oh, we managed to overload the backend with the frontend and so on. So it's just very valuable to have these things, not in a form of oral tradition, but like written down. And then to do that well, you have to have a writing culture where people aren't typing up random words that come into their mouth and are in their minds and basically say, all right, well, read this, makes sense.

• 32:37Speaker 00

  In my head, but maybe you'll make sense of it, too. So you have to have some baseline quality requirement for writing. And basically, the most important thing about technical writing and business writing is simplicity. Like, if you're reading a 12-page thing describing a feature, you're probably going to miss details. And so if it's a feature that's meant to be confined to like 25 by 25 pixels, the description should be two pages, maybe three. You should not have many, many, many pages of prose describing the impact on the world you expect to have and how this relates to world hunger, etc. Pithy is important. Live rants are good as motivation. Sometimes they're good at sort

• 33:19Speaker 00

  of aligning the team around a story and a strategy that the story represents. In my experience, and I host an all hands meeting at least once every two weeks, more often than that, usually you end up saying 12 things and people remember two. So the shorter the better. Like, just just being short and pithy is way more valuable, even even spoken. But in writing, people just run out of time. We have distractions. Notifications are popping up. Like, you have a 12-page to read, you're like, oh, man. And some people are very good at focusing, but I think majority of people are less focused than they'd like to be and less focused than they think they are.

• 33:51Harry Stebbings?

  Matt, are you back in the office now?

• 33:53Speaker 00

  It's quite hybrid, and it really depends on the geo. So we have offices now worldwide. And by offices, I mean places, because some places do not have an office. Our world headquarters notionally is still San Francisco, so that's where I'll be today. And I think it'll be on the order of half full, maybe a little bit more than half full. Our other coast office in New York will have standing room only. There will be not enough seats, not enough cubbyholes to hide in, because people will be there in such quantities and everything in between. It's not true that we are fully back. We have not

• 34:25Harry Stebbings?

  Would you like to be fully back if you could? Every CEO I speak to says, I wish we were fully back, or we are fully back.

• 34:33Speaker 00

  I think there's a ton of value in being fully back. Again, like everything else, there's texture to this value. If you have a C-level team, one way of pushing them into the B level is you make sure they all sit together and are surrounded by A players who are constantly telling them like, hey, go better, do, do, do more. If you have a great team, some people are actually more productive when they are able to cut out all distractions and so they can hide themselves in their spare bedroom and just write code for 12 hours or design product for 12 hours or whatever it is. And so I care a lot more about output and productivity than I care about where you are physically. But the thing that I'm completely non-compromising about, there has to be enough together time. And so the notion of everybody back in the office, even if all of your meetings are on

• 35:18Speaker 00

  Zoom because you're talking to our team in Madrid from San Francisco, it's hard to make that argument. It's just not a very productive use of commute time. If you live in East Bay and you need to get in BART and you ride across and you get to the office and you get into a cubby hole and then you're on Zoom for 12 hours or five hours or six hours, whatever it is, it's hard to make the argument that you should have been in that BART train coming in and coming back. The argument of I've never met my team, but I'm as productive in person, I only see them on Zoom, is a stupid argument that's just not true. Like you form relationships, you understand each other's decision-making style, you break bread together, you form camaraderie, that has to happen. Like that, that is entirely not optional. And I think everyone who's saying, I can be fully remote and these people don't ever have to meet in person is kidding themselves.

• 36:01Harry Stebbings?

  When was morale lowest in the company? And what did you learn about leadership from that period?

• 36:06Speaker 00

  We had to do a layoff two years ago. That was morale lowest point for me and I think everyone around me. And those are never easy and I've had to do more than one in my life. And every time, it doesn't get any easier. It's always brutal and no matter how-

• 36:24Harry Stebbings?

  Did you learn anything about messaging from the first time taken to the second time?

• 36:28Speaker 00

  Very first time I had to do it was certainly not a firm, which and every time I have done it, I said, I have, I hope to never do it again. But the very first time I did it, I didn't know what I was doing and I was terrified of owning the responsibility that I screwed up. I was the CEO every single time I had to do a layoff. And the first time you feel like everyone's going to blame me, it's my fault. I just want to run and hide. This is terrible. Like I have to go through with this, but I can't wait for the moment to be over, for the day to be over. I just need to like not be here. Actually, a good friend of mine, who was at the time an exec at that company, took me aside and said, hey, this sucks for all of us. You are the leader. Like you have to be out there helping people pack their boxes. Like you have to be part of the goodbye. This is not a death sentence.

• 37:13Speaker 00

  It's a professional event. It sucks no, no less than any other really major trauma, but you can play this from the comfort of your office or in the middle of the floor that's crying and like go be with the people. It'll feel better in the end and they will feel better in the end. And so that's what I did. It was sort of between cathartic and therapeutic and I, that was, that was a really important lesson to learn. You cannot hide from the grief that a layoff is. And then the other thing that I learned over the years of watching my friends have, you know, having to do it and certainly having to do it a couple of times myself, empathy is really important. The other things that you will find is people actually, if you've built a great culture, this isn't the thing you can fix in the moment, but if the culture of the company is great,

• 37:57Speaker 00

  the blow is much softer than you think it'll be because people understand that you had tried with every possible strategic or tactical idea to not have to go through this. And so this is the decision, this is the last decision of a long list that he could have taken and they are inevitably more understanding and less hard on you than you are on yourself. Like one of the more amazing and sort of emotional events for me of the affirm layoff a couple of years ago now was every single person I talked to had said, hey, I get it. This happened. We grew too fast. We overhired. I understand. I even understand why me and not the next person. I hope there's an opportunity to come back. I really love this place. I want to come back.

• 38:38Harry Stebbings?

  Is over hiring a calculated risk?

• 38:41Speaker 00

  Yes, it certainly is. That's a good answer in retrospect to your question about calculated risks that did not pan out. You decide that you want every incremental engineer to build more features while the fundraising is good. And then suddenly it's not. And what do you do? And there's nothing you can do other than to say, so sorry, but some of you cannot have a seat anywhere.

• 39:00Harry Stebbings?

  And so the theory was, hey, the features will pay off and that will return cash. Good. And it didn't? Or it was like, hey, we will have a continuous cash tap of fundraising that didn't happen.

• 39:11Speaker 00

  The analysis is typically about how fast something will grow, how well you can have the market protect your cash flow. If it doesn't, how profitable something will be. It's roughly what you said, but the calculus is a little bit more complicated. You're typically estimating more than a few variables. One of my favorite internal lines at Affirm is Affirm is a constant multivariate analysis problem solving. Like it's very rare. It's like, well, that thing, do we think it's five or is it 10 or is it be is going to be 500? Like those are very easy to estimate. It's like, well, we have nine variables and they're all nonlinearly distributed. And some of them multiply with the others and some of the other ones, we don't really know how they relate to the first pack.

• 39:52Speaker 00

  We're going to have to estimate all of them and predict the outcome based on that. And so it's a hard problem to solve, not just for Affirm, but for for any company. You're inevitably evaluating a bunch of variables concurrently.

• 40:01Harry Stebbings?

  Matt, you said about growth there. Can I ask a blunt one? Is Klarna growing faster than the firm? And how do you think about that in in terms of Klarna's US expansion?

• 40:12Speaker 00

  I think they announced that they grew 32% last quarter. I think we announced that we grew 35%. In the last few quarters, and their their numbers aren't public, they're about to go public. So it's it will be a little bit easier to track their numbers. I think for for all involved, but for the last several quarters from estimates, we have been taking share in the market against all competitors, not not just them. That's a good sign for us. We offer more services though. Majority of our competitors specialize in paying for or something very, very specific. We made the decision from day one to provide every possible service from the 45 day super short term loan all the way out to four years.

• 40:53Speaker 00

  Very, very few people do everything. And so it should be a natural consequence of our ability to serve all that we would take disproportionate share.

• 41:00Harry Stebbings?

  Their entrance into the market is is is pretty well done. Is that the size of the market? Is that the not grabbing the opportunity from your side? How do you analyze that? Because it's a big task to go off to the US market from Sweden and all places respectfully. How do you think about that? Is that like, fuck, we dropped the ball or like, fuck, it's a massive market?

• 41:20Speaker 00

  Are you asking me to analyze their strategy? That's a postmortem they will have to write for themselves. I'm not sure I'm qualified. I I I don't have all the information. Also, I I think it's very healthy, incidentally, for CEOs of startups to spend very, very little time on other people's strategy. The competitive analysis is valuable at the product level and sales strategy level. And like, what do they do that we could do better? Is a really good question to ask. What is their strategy is like asking what weather will be 12 weeks from now.

• 41:53Harry Stebbings?

  You could say, hey, they've been really smart in this part of that go to market or their partnership.

• 41:57Speaker 00

  Yeah, we we do lots of that. Like, we we tear down all competitor products, all their sales products, sales efforts. Like, everything we can get our hands on, we learn from because it's free. Like, someone is making mistakes for us, we should learn on those, too.

• 42:09Harry Stebbings?

  Is regulation a friend of buy now, pay later or an inhibitor to growth?

• 42:13Speaker 00

  I think we're always on the record as pro thoughtful regulation. I think you shouldn't be paying any late fees, but you know, late fee cap I was very happy about because I think that's a it's a good development. People should not be building their profit models based on, I'll just raise the amount of late fee.

• 42:28Harry Stebbings?

  Do you like being a public company CEO?

• 42:30Speaker 00

  Uh, some days, yes. Other days, no.

• 42:34Harry Stebbings?

  What are the days where you're like, yes, and what are the days you're like, no?

• 42:38Speaker 00

  Days when it's yes is when it's not very different from being a private company CEO. But being a public company, generally speaking, gives you access to more capital, exposes you to really smart investors you can engage with. So there's lots of things to like. There are some investors out there that will only invest in public equities, and they are brilliant people, like they've seen it all before. They could write books about what a great public CEO looks like. And you want to go spend a half an hour with them and ask them, teach me how to be as good as blank. If you're a private company CEO, they might take your meeting, but they're probably busy. If you're a public company CEO, they might own your stock and then they want to talk to you because they want to assess you as much as they want to help you. And so that's a cheat code to access some of the best brains out there.

• 43:19Speaker 00

  The days where you're like, oh, man, is inevitably when you're like, well, I now have to go read this filing that we have to make because it's part of my responsibilities to make sure I understand everything we're putting out there into public and can't avoid that. And those are small prices to pay, but you do have added responsibilities that were not what you thought you'd be getting into when you were getting a computer science degree.

• 43:40Harry Stebbings?

  Is your mentality tied to the market cap of the company? It's so difficult to detach yourself from the valuation of your company. What've been your biggest lessons on that?

• 43:51Speaker 00

  The short answer is I'm sure it is, but I'm sure I put an enormous amount of effort into making sure it's not. And so it's a balance you're constantly trying to strike where the thing that is hard harder is when you think you're doing a fantastic job. And you can look at the internal numbers and you look at the external numbers like I am absolutely crushing it. And so sometimes it's very tempting to say, well, by now the market should know and they should just give us high marks. And that means the stock goes green, green, green. And more often than not, you have a temporal mismatch where you're doing great. You know, you're doing great and the market thinks you're not. And if you're a startup or fairly high volatility stock, you end up with, well, I did great. Why am I getting punished? And the short answer is it's the market.

• 44:34Speaker 00

  Like you, you just don't get to tell it when to react to good news or bad news and, and how. And so the more you sort of convince yourself that in the end, there's a great, um, I think it's attributed to Warren Buffett, but it's actually from Graham, his mentor. In the short term, the market is a voting machine. In a long term, it's a weighing machine. I take great comfort in saying this to myself whenever the market, I think, misjudges me. But I also, I've gone through some great lengths, by the way, to make sure I don't accidentally stumble on my ticker. So, you know, my Apple desktop, if I click in the top right corner and stocks drops down, I cannot see my stock ticker. So I, I don't accidentally discover that today is a red day or a green day, just to make sure I stay focused. You have to think long term.

• 45:17Speaker 00

  If, if you are catching yourself thinking short term, and by short term, I mean, let's have an amazing quarter. And like you're, you're in trouble.

• 45:27Harry Stebbings?

  Do you see a dip in employee morale there when stock go down?

• 45:30Speaker 00

  I don't, but I think I make it my business. Every time I talk to our outcomes as a company, I take great pains not to talk about the price of the stock. The only time I talked about the price of our stock to our employees at length, when it was flying very high after the IPO and it was really the heady days of 21, I'd actually repeatedly said, look, do not get accustomed to whatever numbers you're reading on the screen today. Like, we will not know what this company is worth for years. Just like, if you think it's too low, good for you. If you think it's too high, it may well be. Like, just do not look, do not get conviction that this is actually correlated to some tangible metric. Like, first, we have to get profitable.

• 46:13Speaker 00

  Then we have to show revenue growth rates. Then we have to show net income growth. And that's what, you know, long term, the weighing machine, that's what that weighs. It's not weighing sentiment. It should not be weighing sentiment.

• 46:26Harry Stebbings?

  Matt, we're going to do a quick fire round. So I say a short statement, you give me your immediate thoughts. Does that sound okay?

• 46:31Speaker 00

  Sure, but sometimes I will take a very long time. You'll have to edit out the awkward silences.

• 46:36Harry Stebbings?

  It's the joys of podcasting. What do you believe that most around you disbelieve?

• 46:41Speaker 00

  I have this conviction that I can learn anything very, very quickly. And eight out of 10 times, I'm right. And two out of 10 times, I'm completely wrong. I decided two years ago that I was just going to read the attention paper and become an expert in LLMs. You know, just read all the papers after that. And I'm still in the process of getting anywhere near expertly status. I try to keep up. It's a lot of really interesting stuff happening in AI.

• 47:03Harry Stebbings?

  I just had Mark Banning off on the show about 12 hours ago. And he said, we're getting to the upper limit of LLM efficiency. Agree or disagree?

• 47:11Speaker 00

  Agree, but I don't think we are going to stay with LLMs forever. I think we're going to expand the systems that use LLMs. Reasoning models already are not pure LLMs. They have some iterative processes within them. I think we'll invent more really interesting things with that.

• 47:27Harry Stebbings?

  Like what?

• 47:28Speaker 00

  An obvious idea, which I know has been explored and will be explored more, is a notion of multiple competing LLMs basically debating each other for the right answer. Like, that's not a pure LLM model. Like, you can amplify intelligence of humans by having three smart people in a room instead of just one person.

• 47:45Harry Stebbings?

  As a public company CEO, do you have to have an AI story today?

• 47:49Speaker 00

  I generally really dislike stories that have no substance. So I think you have to ask yourself, are we taking full advantage of the best available tools? And the most interesting available tools right now are AI. So if you sort of look through your closet and say, hmm, we're not really using any of this stuff. I gotta have a story for the market. You're doing two things wrong. You're telling a story that isn't true and you're not using the most interesting available tools. If you're using the most interesting available tools, your investors might be happy if you told the story, but if you didn't, I don't think they should really care that much. Like, as you go public, a lot of this becomes, are you growing at the right scale? Are you taking appropriate risks? Are you managing to profitability? The storytelling hour of like, oh, by the way, we have this shiny item that we're so excited about, that feeds the voting machine. And I'm

• 48:33Speaker 00

  sure some of it is important, but I spent a lot more time feeding the weighing machine.

• 48:37Harry Stebbings?

  Matt, what would you do if you knew you couldn't fail?

• 48:40Speaker 00

  Basically do exactly the same thing I do now. So before Affirm was a thing, I made a list of difficult problems that I thought required solving. I decided that financial services or money at the core is one that I am well suited to solve, just given my past and, you know, experience that I bring. But if I knew I couldn't fail at anything, I would revisit my list of hard problems and that inevitably had things like food, water, shelter, energy, just solve them all.

• 49:10Harry Stebbings?

  If you could start a company with only one member of the PayPal mafia again, who would it be?

• 49:15Speaker 00

  Peter.

• 49:16Harry Stebbings?

  Why?

• 49:16Speaker 00

  He's amazing. He's brilliant.

• 49:18Harry Stebbings?

  More so than like Elon?

• 49:19Speaker 00

  Elon is brilliant, too. If I could have a choice between starting a company with Peter or starting a company with Elon, it'd be a very hard choice to make. I think Peter is a more known quantity for me. That's why I answered the way I did. So we started the company together and Elon, Elon's company merged into PayPal to form the modern PayPal. So I know exactly what he's like under pressure and stressed out and trying to raise money and not succeeding for a time and dealing with personal life issues. And so I've seen him go from, you know, mid twenties to older. And so the

• 49:55Harry Stebbings?

  How's he changed over time?

• 49:56Speaker 00

  When you observe someone closely for a long time, you don't actually notice the change. You see the episodes, but you don't know how the person really changes. We've all grown up. We've all become probably more measured and slightly more careful, slightly less crazy, maybe slightly more crazy. I don't know. He hasn't changed very much. The thing that makes Peter Peter is, and by the way, actually very similar to Elon in that sense. So there's a really interesting echo between the two. They both have this amazing quality that I spent as much time absorbing as I could over times that I worked with them, where they bring out the best effort in people around them. Like they somehow make you feel that you can and should do better work. Like the conversation with Peter

• 50:39Speaker 00

  always left me thinking, the problem that I thought was really too hard to solve, I should go give it another try. Like, I think I can. I think this is actually doable. And he is genuinely excited about you solving this problem through the capacity that you have. And I think that's an amazing thing to work with someone on anything because they're just fueling your desire to stay late and, you know, do more work. What's your favorite consumer brand and why them? I love Airbnb. Less so because like the overall brand is amazing and obviously it's a super successful company, but their tagline, at least the one they promoted for a while, was belong anywhere. I think it's such a profound two-word brand statement. Like, you know exactly what it means. You know exactly what they stand for. It's evocative.

• 51:24Speaker 00

  You imagine yourself in all kinds of crazy places. You're in the Himalayas or in the Amazon. And like, that is an amazing story told with two words. But back to my brevity, love of brevity. I think kind of the old world, probably my favorite brand that I look at every morning. So I'm a huge fan of coffee and bicycles, not at the same time frequently, but sometimes at the same time. So every morning I roll out of bed, I stumble downstairs and make myself an espresso. My favorite espresso machine brand is La Marzocco. It's this, like, I don't actually know that much. They're a firm customer, so I have to full disclosure. But they were a huge favorite of mine long before I convinced them to give a firm a try. It tells this amazing story of Italian manufacturing.

• 52:06Speaker 00

  And you know, the someone with a mustache smelling the coffee fumes going, oh, this is a perfect espresso. And like, it's this sort of a story in a cup that you just think of it has to go hundreds and hundreds of years back. They must have been making coffee in Venice, you know, with mortar and pestle or something. I don't think it's nearly that old. I think it's maybe on the order of 60 to 100 years old. But it's just this like timeless coffee awesomeness that I love. And I use it every day. And every time I look like, yes, yes, my coffee machine, I love it so much.

• 52:38Harry Stebbings?

  You can be CEO of any other company for a day. What company would you be CEO of?

• 52:43Speaker 00

  I have all these unfulfilled dreams of running a much smaller company that makes widgets. I spent my entire life making things out of bits. I would love to make things out of atoms. One of my favorite executives came up with a brand name for a company that would sell pickles called lethal pickles. This has to do with a story in the very early days of a firm where I tried to teach people how to make pickles because I love pickles too. And I managed to screw it up badly enough where they eventually turned toxic and grew mold and it was terrible. And I was briefly trying to persuade people that it's fine. It's not, it's actually not a problem. You should eat them and almost single handedly wiped out the entire firm team. But fortunately, no one ate any

• 53:24Speaker 00

  and we threw them away. But the story of Max's lethal pickles survives in the annals of a firm postmortem history. Someone said, well, you should eventually go fulfill your dream of making things out of atoms and molecules in this case and, uh, you know, sell pickles online, call it lethal pickles. So one day I'll, I'll start lethal pickles.com. I have the domain.

• 53:42Harry Stebbings?

  We're going to name the show Max's lethal pickles and see how it goes. Final one for you. You're asked questions by employees, by investors, both private and public, by a lot of people, everyday journalists. What question are you never asked? It'd just be nice to be asked. It'd be interesting to be asked.

• 54:02Speaker 00

  If you are a careful student of my shareholder letters, of which I have now written, it cannot possibly be 16, but I think it's 16 or 15. You will see that every single one of them contains a reference to the movie Big Lebowski. You have to look sometimes hard to find it. But no one's ever asked me, what's with the Big Lebowski in your shareholder?

• 54:23Harry Stebbings?

  What is with the Big Lebowski?

• 54:26Speaker 00

  I'm a huge fan of movies. When I was freshman in college, all I wanted to do is take computer science classes. And I came into my university thinking, I'm just gonna take every possible computer science class and nothing else, because everything else is stupid and boring. And I just want to write code. And I still love writing code. If I knew I couldn't fail, I'd solve the world's problems. And then I would just write code from that point on for fun. But it turned out that you actually had to take some required courses. So you couldn't just take computer science. So I took film study as like a, this will be easy, it'll be fun. I got to watch things that are actually like gems of movie making world, things like North by Northwest and like Hitchcock movies and all sorts of stuff that blows your mind. And if you don't know about it, you wouldn't watch it because

• 55:09Speaker 00

  these are old black and white movies. Why would you care? Then you watch them, you're like, oh, my God, like this, these are stories that have to be required viewing. So one of the movies I watched was Seven Samurai. And it became like this obsession where I've seen it over 100 times. And no one asked me about that one either. But the silliest movie with yet a similarly profound kind of a cultural and at least to me, intellectual impact on me is The Big Lebowski. It's this comedy, tragedy, whodunit, commentary on 1980s United States. It's like everything in two hours of cinema that if you haven't watched it, you should watch. And it is unbelievably funny. It's one of the funniest movies ever made. And somehow, over the years, how do you interview talent? One of the things you

• 55:52Speaker 00

  can do is you can figure out if you share cultural artifacts at the time of the interview. And so when I was interviewing a good half of my management team, I found out before or after I decided that they were the right ones, they were huge fans of The Big Lebowski. And so the team that writes the letter with me is this group of people who loves The Big Lebowski. And we sort of made it our business of sticking Lebowski quotes into our shareholder letters.

• 56:15Harry Stebbings?

  I have one final one for you that I know you won't have been asked. Right? I don't think you'll have been asked. But it's a kind of a meaningful one. What about the way that your parents brought you up? Have you deliberately decided not to apply to the way that you bring your children up?

• 56:29Speaker 00

  That's a deep question. So I grew up in an academic family and for them, the notion of advanced degrees was the ladder to climb. And so it was embarrassing that my mom never got a PhD to her mom, who was exceptionally important influence in my life and my mom's life. And so this notion of the way you achieve in the world, the goals to set, the ways to think about success and failure in life is measured through academic success. My grandmother has papers in the Harvard library. She's long gone, but you know, she, she was a Soviet scientist that managed to have her astronomy PhD thesis referenced in like dozens of academic papers

• 57:14Speaker 00

  in the United States. And so she achieved the academic peak early in life and stayed there. And as she was very old and quite ill, she'd asked me, well, what about the PhD track? And I was just about to start my third company. It's like, you know, I'm gonna get a bachelor's and basically because of you. Otherwise, I would have long dropped out and moved to Palo Alto and started a company already. It all worked out in the end. So I'm not complaining. But they grew up in a world where entrepreneurship was not a factor. Soviet Union was not a place where entrepreneurship meant anything in those days. I would love for my kids to at least explore entrepreneurship and decide that it's important. So telling them you must spend a decade on the school bench is counterintuitive to that. And so I never told them, you know, your storied grandmother

• 57:58Speaker 00

  with her multiple PhDs is just, you know, waiting for you to get your first advanced degree and keep going. And I felt very guilty about it. The day we took PayPal public, my mom asked me, well, will you finally move back to Chicago and get a PhD? And I was like, but, but this is not the response. Yet, that is what I was brought up with. And it weighs on me and I don't want it weighing on my kids.

• 58:17Harry Stebbings?

  Have you ever been asked that question before?

• 58:19Speaker 00

  I don't think so. Good try.

• 58:20Harry Stebbings?

  I like it. It's a really revealing question. Max, dude, it's so lovely to see you again. I so appreciate you doing this, opening up, being so brilliant. You are fantastic and I just so appreciate the time.

• 58:31Speaker 00

  Thank you. You're always, you're always fun to talk to. Good to see you again.

• 58:36Harry Stebbings?

  Honestly, I think I just have the best job in the world. I mean, getting the chance to sit down with Max Levchin, co-founder of PayPal and now founder of a firm, and ask the management lessons that I did. What an incredibly awesome job I have. If you want to watch the full episode, you can find it on YouTube by searching for 20VC. That's 20vc.com. But before we leave you today, here are two fun facts about our newest brand sponsor, Kajabi. First, their customers just crossed a collective $8 billion in total revenue. Wow. Second, Kajabi's users keep 100% of their earnings, with the average Kajabi creator bringing in over $30,000 per year. In case you didn't know, Kajabi is the leading creator commerce platform with an all-in-one suite of tools, including websites,

• 59:21Harry Stebbings?

  email marketing, digital products, payment processing, and analytics, for as low as $69 per month. Whether you are looking to build a private community, write a paid newsletter, or launch a course, Kajabi is the only platform that will enable you to build and grow your online business without taking a cut of your revenue. 20VC listeners can try Kajabi for free for 30 days by going to kajabi.com/20vc. That's kajabi.com, K-A-J-A-B-I.com/20vc. And after building your online empire with Kajabi, it's time to scale your global team with remote seamless hiring solutions. So every business is a global business in 2025, but how do you do payroll for your global business and team and comply with international

• 1:00:06Harry Stebbings?

  labour laws? Well, Remote handles payroll, benefits, taxes, stock options, and compliance to help companies of all sizes pay and manage full-time and contract workers all over the world. No matter where your team lives or works, Remote's global employment solutions keep your team, your finances, and your intellectual property secure. Remote never charges hidden fees, just best-in-class global employment solutions for a low, flat rate. The world's top remote companies love Remote. GitLab, the world's largest all-remote organisation, trusts Remote to run their global team. Remote is funded by Index Ventures, Sequoia Capital, and the host of the greatest podcast ever. Harry Stebbings and 20VC. Ready to learn more?

• 1:00:48Harry Stebbings?

  Head over to remote.com/20vc, that's 2-0-vc, and begin hiring within minutes. Enjoy 10% off your first three months by using the promo code 20vc at checkout. Now that your team is up and running worldwide, make sure your finances work just as hard with Brex, the ultimate financial stack for startups. So when Brex was founded, it wasn't just about creating another financial product, it was about solving the really gritty challenges that founders face daily. Let's be honest, building something from the ground up is hard enough without dealing with clunky outdated banks that pile on fees and leave your cash idle. Brex is different. It's the financial stack that scales with you no matter where you are in your journey. From corporate cards to maximizing your runway to earning yield on your cash.

• 1:01:33Harry Stebbings?

  Brex was designed with founders in mind to make every dollar go further so you can focus on building. And here's what really stands out to me. Brex combines the best of checking, treasury and FDIC insurance in one powerhouse account. You can send and receive money globally at lightning speed. Earn yield from day one and still access your funds whenever you need. Plus, with 20x the standard protection through program banks, your cash is not just working harder, it's working safer too. It's no surprise that one in three venture backed startups in the US, with companies like Anthropic, Coinbase and Robinhood. I mean, my god, these companies are incredible. Trust Brex to help them grow. If you want to join the smartest startups on the planet, head over to brex.com/startups and see what they can do for you.

• 1:02:18Harry Stebbings?

  As always, we so appreciate all your support and stay tuned for an incredible 20 product episode coming on Friday.