Pod Insights The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch 20VC: Linear's Karri Saarinen How to be Grow Capital Efficiently in a World of BS Growth | How to Fundraise with Leverage | How to Select Investors and How to Give Them Homework in the Raise Process & Growth Lessons from Airbnb and Coinbase About this episode Karri Saarinen is the Co-Founder and CEO of Linear. The company has raised from some of the best in the business including Sequoia and Accel. Before founding Linear, Karri was the principal designer at Airbnb and the founding designer at Coinbase. 10 Lessons with One of Silicon Valley’s Most In-Demand Founders: How to Become a Master Fundraiser: Why does Karri believe it is BS advice that founders should “always be raising”? What is Karri’s biggest advice to founders on minimising dilution? What do most founders think they know about fundraising but do not? What is the best way to put your VCs to work? How can you give them homework to do? What has been the single best VC meeting Karri has had? What has been the worst VC meeting? Product and Growth: What does Karri mean when he says “founder must focus on quality growth over hypergrowth?” How does Karri advise founders on how soon to release and monetise their first product? Wait for platform ready or ship more feature products and monetise? What have been the single biggest product lessons for Karri from Airbnb and Coinbase? What are the most commons ways that growth plateaus? What breaks first? Karri AMA: Brian Armstrong or Brian Chesky; who would you invest in first? Would you sell Linear today for $3BN in cash? What do you know now that you wish you had known when you started? What did you believe that you now no longer believe?
Transcript Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Speaker 00 I've never been happy with a 20% dilution. I would rather see it at like 10% or or less than that. The only real protection you can have as a startup founder in your business is is to be successful. If you're not successful, there's a lot of ways investors can exert their control.
0:16 Harry Stebbings? This is 20 VC with me, Harry Stebbings. Now, the show today is a special one. In a world of fake growth, bullshit fundraisers and hype, Karri Sorenin has built the most incredible, sustainable and most importantly, capital efficient business in Linear, where he prioritizes long-term profitable growth rather than falling for the raise big, spend big mentality that we've seen so much of. Of all the companies I'm an investor in, I would say I get two times the number of intro requests for Linear and Karri than all others combined. That's insane, actually. Karri is a star and this was such a joy to do today. But before we dive into the show today, how do you get your users to do what you want them to do?
0:56 Harry Stebbings? Well, that's where Pendo comes in. Pendo is the only all-in-one product experience platform for any type of application. Honestly, Pendo's differentiation is in its platform. Every capability from analytics to in-app guidance to session replay, mobile feedback management and roadmapping are all purpose-built to work together. But don't take my word for it. 10,000 companies use Pendo and Pendo also does mine the product. The world's largest community of product management professionals. So check out their amazing free product today on pendo.io/20product, that's pendo.io/20product-podcast. And talking about AI, Glean is the leading work AI platform that transforms how teams operate.
1:40 Harry Stebbings? So this is how it does it. AI has the potential to help everyone at work with nearly everything they do, but only if it deeply understands the data, the people, the processes and the context specific to your work. Well, Glean is the leading work AI platform that does exactly that. So Glean's powerful AI assistant helps you find answers, generate content and automate work. You can also build no-code and low-code custom generative AI apps and agents that scale the power of your company's knowledge anywhere it's needed. That's why hundreds of Prizes, including some of the world's leading technology, telecom, retail, manufacturing, banking businesses, put AI to work with Glean, empowering engineers to ship code faster, sales reps to better understand their customers, support agents to resolve cases more accurately,
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2:37 Speaker 00 You have now arrived at your destination.
2:39 Harry Stebbings? Carrie, I am so excited for this dude. I've wanted to do this since we first started working together. So I'm thrilled that you joined me today. Thank you for joining me.
2:47 Speaker 00 Thanks for having me.
2:48 Harry Stebbings? Now, I was chatting to Miles at Excel beforehand and he said, you've just got to start with context. And so I don't want to do like the, oh, how did you come to found linear? He told me I had to ask about potato farming in Finland. Why?
3:02 Speaker 00 This came to be like, I think Gleaner also came to be from, from like my frustration. So, so I think like my frustration, living in US or in California, the last decade is that the potatoes here are not very good, or there isn't that much of a variety of things. So when you go to a grocery store, you usually have four different kinds. You have the large one, the golden one, the small one and, and like a red one. And growing up in Finland, that's not the case. Like those are like the, the main categories, but then within these categories, you might have different kinds of varieties. And some of them are more like seasonal and, and some of them are more specific to a region in Finland where they're grown.
3:43 Speaker 00 So in doing summer in Finland, you go to a grocery store, there might be like five different kinds of, different varieties of the same kind of potato, like the same category. And then like some of them might be picked this morning and they're like really fresh and the taste and the texture is very different. It's, they're like very buttery, that potato flavor is much more stronger. Even if you just boil them, you can taste a lot versus like if you boil normal potatoes. I think like you get on a grocery store, they don't generally taste that much anything. I'm so sad that like there isn't good potatoes in, in the US. So I at least haven't been able to find. So I like going to Finland in the summer to buy some of these potatoes, but I've been also like growing my own.
4:26 Speaker 00 We have a little cottage and it has a space to like farm things. So, so I've been like growing my own as well.
4:32 Harry Stebbings? I've never met a potato nerd. That is the nerdiest description of potatoes I've ever heard. All I say is I hope you didn't use that when you were dating your partner. Clearly you didn't because it converted well. But moving the potatoes forward, before Fitline, you worked at Airbnb and you worked at Coinbase, two of the most transformative kind of product orgs in the business. When you think about like impact, which one had a bigger impact on how you think about product?
5:00 Speaker 00 With Coinbase, I was there much earlier, so it was when I joined, it was only like 12 people or so. And then when I left, it was less than 100 people. So it was more of the early stage experience. I think the main thing I saw there and learned there that how much you can do with very small teams. A lot of the features we built and they were used by all kinds of companies and and large groups of people or very much revenue went through them. And those features were maybe built by one person or two people or three people. For example, Coinbase Exchange, which is the trading platform they have, that initially was built by one guy. Like he was in a room and then he was building it for maybe six months. But he was built by one guy and then when it went live,
5:45 Speaker 00 it already like transacted maybe millions or tens of millions of dollars. And today it's probably transacting like billions of dollars. That was like one lesson I learned there. And I think with Airbnb is much more about, I think Brian Chesky is very driven or passionate about the experience. Like how does this feel and like how we want the company or the product to feel? That was like really great to see that you can run company that way, that you can actually focus on the experience and you don't have to focus on some of the other things like metrics or I don't know, something else that people tell you to. But the experience is the the most important thing you can focus on.
6:23 Harry Stebbings? Can I push you? Which one's a better leader, Chesky or Armstrong?
6:28 Speaker 00 I don't know if I want to answer this. And again, I would say they are very different kind of personalities. I also think that they're probably like a really good fit for the company they're operating.
6:38 Harry Stebbings? If both of them were to start a company again and you have one angel check, which one would you invest in?
6:44 Speaker 00 If I really had to choose, I would really choose Brian Chesky. I think he's really this power of nature. He can drive through anything. I think Brian Armstrong is as well. If you put Brian Chesky to do something like he will really do it, then he will have all the energy to do it. So I would I would bet on him.
7:02 Harry Stebbings? Are you kidding me? Have you seen his weightlifting days? This is a man who, when he sets his mind to something, he goes for it. Unbelievable. Totally understand and get you there. It listening, he was the inspiration behind Founder Mode. I have to start giving your answer there. I had Zach on from Plaid and he was like, actually, I think Founder Mode is going to be incredibly dangerous for a cohort of founders. And it's going to allow for a lot of bluntly bad behavior. How do you think about an assessed Founder Mode, given your contacts with Brian? And also now being one of the hottest founders in the valley?
7:34 Speaker 00 Yeah, I mean, I agree with Zach that it can be dangerous or the essay itself, it's not very clear what it means. And like the standard advice is like you hire really good leaders in the company. And then you let them do the the things. The thing with the Founder Mode, I believe, was about that you should do that. You should hire some leaders. It's not that like as a as a founder, you should be operating like doing everything, operating everything by yourself. But you shouldn't also sit on the bench while everyone else is on the playing on the field. But you are allowed as a founder, still be on the field. You can still play some roles in there, like some position there.
8:15 Harry Stebbings? You said about kind of sitting on the bench when someone should maybe be on the field. If I were to push you and say, where did you sit on the bench too much and you should have been on the field more?
8:25 Speaker 00 Well, the first or the last two years, I was maybe too much on the bench when it came to the quota market function and the marketing or the sales function. And now maybe last the last six months or the last year, I've been focusing on it much more. We have weekly chats about it with the with the like the leadership team there. I think the reason for that is that my background's in in design and for example, Airbnb and Coinbase, they weren't very like quota market driven. You didn't have salespeople in the company. But when you are building more of an enterprise business and selling to enterprises, it can the go to market function can be more complicated or it can be more nuanced or there's something more in there. To me, I have to learn about it.
9:10 Speaker 00 I have to learn about these things and in order to be more effective there.
9:14 Harry Stebbings? You know, we mentioned kind of growth and different periods of growth there. I have to start, you said something to me before the show about quality growth over hypergrowth. What do you mean by quality growth and how does that differ from hypergrowth?
9:28 Speaker 00 So with with linear, we've been growing much more this sustainable way. Or like I like to call it more like a quality growth way. And what it means that the growth is based on something real that is working in the company. And it's not something that is artificially juiced or or it's not like the growth is on steroids. It's like the growth is coming from the fact that you go to the gym. That's more sustainable than than using steroids. You can maybe not, you should probably shouldn't use steroids, but maybe you could. Some people might use it at some point, but it's not sustainable. So similarly, I think startups, we have this culture of growing fast, scaling fast, trying to hack our way to the growth. And to me, it feels dangerous because it's artificial.
10:12 Speaker 00 Some companies, they put a lot of money into a growth. They can get the growth, but they're also spending more than they're making. And eventually that function just doesn't work like you. You need to keep raising more and more money. And it might be really hard to actually turn the function now to actually make money versus like spend it. So for us, like the the quality growth has always been the product that we almost spend no money in marketing. We didn't even have sales for the first three years. We just wanted to see that the growth is coming from the fact that people find our product better than anything else out there. And they will pick it up and they will buy it. And that's like what the real growth to me means and not not something like you. You spend your money on.
10:54 Harry Stebbings? Founders listening will be going, great, I get it, but I need to raise money again. I need a series A, I need a series B, whatever that is. I am looked at in a comparative stack of companies. And if my growth rate is two X and there are companies who are growing four, five, six X. AI revenues are unbelievably different to what we've seen before. I'm just not going to raise money. So like, it almost feels like quality growth is a luxury product. And I need hyper growth because that's the only way I can get the next round. What would you say to that thought process?
11:26 Speaker 00 Well, I mean, I, I think that's exactly right, that, that you need the growth to, to raise the round. But there is the other option, if you just think about this problem is that what if you don't need to raise the round? Like, what if you can sustain without raising a round or you raise some round? And then you just try to focus on making the, the business function work that actually try to make money and not spend that much money. And then you're no longer kind of tied to those metrics because you, you don't need to raise. And if you can get to, to profitability, then you probably, you don't necessarily need to raise ever again. You can, if you want to, but you don't have to.
12:06 Speaker 00 So it, it definitely depends on your market dynamics, like how hard or fast you need to go. But what I advise founders is that you should think about what, what game you're playing, like what markets you're entering. What do you need to do there? What, what's the dynamic there? Like our market, it was kind of clear from the beginning that the way we win in this market, it's, it's not like a fast moving market. There's basically one solution every company uses and it's been there for 20 years and it's kind of the legacy solution. And it seems like nothing has happened in the last 20 years. I don't think there's a lot of happen in the next five or 10 years unless we make it happen.
12:45 Speaker 00 So for us, it's creates this market where we think it's not necessary to go the fastest as we can. But we actually need to focus on being the best as we can. There is that cost of trying to grow too fast or growing too fast. The cost there or what you sacrifice is the quality or the not actually focusing being the best in class for the product.
13:07 Harry Stebbings? And for any founders listening, do not listen to Carrie. You should absolutely get on the VC treadmill. Otherwise I will be unemployed.
13:16 Harry Stebbings? But no, I completely agree with you. I think the thing that's so interesting, you mentioned kind of bluntly making money from your customers as well there and being more proactive in doing so earlier. You made money year one, you were profitable year two. How do you think about shipping feature products that can be monetized quicker versus the founders that say, well, that's fine, but like I need to do a platform approach. And actually, it's not possible to do that until 24 months in.
13:44 Speaker 00 I think startups should always pick a more focused angle or like some kind of niche that you hit first, like some kind of smaller group of people that you can serve as soon as possible. Even if you have this idea of a platform, you might also find some use case which you can do today with a simple feature that get people into that platform and you can start building the platform with them. So I don't think it's this kind of binary choice that either you build a platform or you build this like feature product. There is always a way to to focus what you're doing to some group of people, build something really great for them and then like expand from there. And I think generally that's the right approach for any startup. You shouldn't
14:27 Speaker 00 try to boil the ocean. You need to just boil the pot and like get get someone in the pot and like cook with them.
14:34 Harry Stebbings? But I think the biggest reason why companies I work with don't find product market fit is founders get really nervous pre-launch. They expand the ICP too much and then it doesn't resonate with anyone. They don't get a thousand true fans and no one really gives a shit about it. And to your point exactly, like find the 1,000 people who will really care and pay and love it and expand from there. Totally agree with you and get you there. Profitable in year two. This is a very rare thing, Carrie, being profitable. What is wrong with you? My question around that is the counter argument will be, why didn't you spend more on acquisition? Have higher CACs, the retention's great, people love linear as a product. Just pay more and get more people faster.
15:14 Speaker 00 I mean, there again, like it goes to the strategy we have is we want to be the best tool. And there's certain beliefs, what we think get us there. One is that the team should be more like smaller and more focused than. If I look back to different jobs in different companies, I always felt that the smallest teams made the best results, not like not all the time, but usually when you put this special team together that are really talented, maybe it's only three people or five people or something, they could make really big impact in a company very fast. That's something we believe in. So one of the main sources of expenses obviously is hiring. Like if you have a large team, you you spend a lot of money every month.
15:55 Speaker 00 We took the different approach where let's just find, try to find highest quality people we can and then not grow the team too much because it can cause additional problems. It can dilute the culture. You spend more time managing things and like you have to kind of onboard people more. So generally our growth rate on the team size has been two X per year. So part of that is like hitting profitability is is that the revenue grew faster than we were able to hire the team. And then like when it comes to the marketing expense or some other expenses, again, part of it, it is that I want to see the growth is there even without the spend. And then secondly, the product hasn't been ready for everyone from the day one.
16:40 Speaker 00 Again, like going back to the focus of like finding your first group of customers, like our first group of customers for startups, like small startups, early stage startups. Those people don't even look at ads like they, I don't think they they pick products because they see ads like out out there somewhere. They pick products because they hear about it from their friends or like other founders. I think the word of mouth and and connecting with those founders are much more important than than spending money on ads. By the time of Sirius B, we only had spent like $30,000 in advertising and $30,000, I think, went to, I think to your podcast at some point, and then it went to another podcast. So we basically did two podcast sponsorships with that money.
17:24 Speaker 00 And nothing else. And but now we are spending a lot more money in advertising because now the company like the products is actually working for a wider audience and it's it's working for larger enterprises, larger companies. And those people need, we need to influence them a little bit, like they need to see that we are there, we are around, we we are like a serious company. So there, I think the advertising makes more sense, but in the beginning, I don't think it it made sense.
17:47 Harry Stebbings? Do you wish you had gone more enterprise earlier?
17:50 Speaker 00 Not really. The the way I look at this is that you have the product, then you have marketing, and then you have sales. In order to move to the next segment of the mar- market, each of these functions kind of have to elevate at somewhat equal base. So when you're selling to enterprises, obviously you need to have the sales team to like figure out how to do that, like how how do you work? Like an enterprise account, how do you talk to people there more and like, how do you influence them? And then like the marketing has to be there that people have to know know about you. They're not gonna engage in a sales process if they never heard of you and they don't understand like what you do or why is it better or something? And then the product has to be there that like eventually if they actually buy the product, it actually has to work to them well.
18:32 Speaker 00 So we started getting some of these enterprise customers like maybe a year ago, but like just before our series B and that that was kind of the story there. It's like, hey, we are seeing now that enterprises are buying this product. It just doesn't happen very often right now. It's a little bit special companies do this that they they see the value earlier than some others. And now, one year later, we have the switchers every month. So it's like it has gained a little traction, but we needed this year to figure it out and improve the product and get few of those customers in. So we could see like where the product breaks down and then we can fix it. And then we can see like in our sales conversations, what do we need to do on the marketing side? And then on the sales side, we need to obviously see like what do we need to do on the sales side. So so I think there's this like
19:17 Speaker 00 you need to kind of keep elevating each of these functions and you can't just jump in and like hope for the best.
19:22 Harry Stebbings? You mentioned the series be there. I'm intrigued. When you're profitable, why raise another round? Why dilute more?
19:29 Speaker 00 I think it's still something like we are definitely, I would say like I'm still figuring out or and I've been talking to people about this like, do we need to raise more money? Like, is that like, what happens? I think there are some basic reasons, like one is that it is useful to mark up the company every now and then like we were, we raised Sirius B maybe almost two, three years after the Sirius A and it's annoying when you talk to candidates and you say like you're a Sirius A company and they think that you're technically a Sirius B A company, but technically you're more like Sirius B company in terms of your revenue or something. And then like there's this like disconnect of, hey, we can give you like one percent of the company like a Sirius A company could,
20:09 Speaker 00 because we are just like much further along. So there's this like disconnect between the equity value. And so marking up the company is useful. You can do it other ways too. You don't necessarily need a round for that. But I think there's also like signaling with the customers as well. You are no longer a Sirius A company. That's like, if you are Sirius B company, it sounds more serious because there is a lot of like seed or Sirius A companies, but not, not that much Sirius B companies.
20:36 Harry Stebbings? How impactful is having Sequoia for hiring?
20:39 Speaker 00 It's kind of hard to tell, but I would say like the thing, let's say like we didn't have Sequoia or any of the like, we didn't have any VCs, we would be just bootstrap. I think like what you're signaling with VCs or Sequoia is that you are really aiming high. Like you have a high ambition, you want to make this big. And that for the candidate, it can feel like it's, I don't think it's a major thing that people pick companies just because they have this VC invested in them. But it can be one of those like safety things that at least the company is not horrible. It's not like terrible what they do because someone believed in them and like a tier one VC believed in them. So I have like a little bit of signal there. So I do think it's, it is meaningful.
21:20 Speaker 00 I wouldn't say like it's the main driver, but part of this round, raising a round is about the signaling with the candidates and the markets. And then I think there's each time we raised around, there was definitely like some level of uncertainty. Like with the Sirius B, we raised it at the time where the market was quite bad or looking to be quite Bad companies were doing layoffs, they were shutting down. It was hard to tell, like, is it gonna get better or worse? It's one of those like safety things that we, again, like, we wanna be here for the long term and we wanna be a sustainable company. So raising around now versus waiting until we are kind of, the market is really tanked, then everything is bad.
22:00 Speaker 00 And and we have to then go out there to to raise because our revenues dropped and we are no longer profitable and such.
22:06 Harry Stebbings? How much did you raise in the B?
22:08 Speaker 00 It's about thirty million.
22:09 Harry Stebbings? Why did you decide that was the right amount?
22:11 Speaker 00 So usually with the with the rounds, I always always focus on the dilution, obviously. I think that's like the main thing you wanna control ideally and.
22:20 Harry Stebbings? What dilution are you happy with per round?
22:23 Speaker 00 Uh, well, I think it changes per round, but I think it's it's as low as I can get it or as low as it makes sense. So I've never been happy with a twenty percent dilution, for example. I was like, even in the earlier rounds, I would rather see it at like ten percent or or less than that.
22:39 Harry Stebbings? Can you get Sequoia for ten percent?
22:41 Speaker 00 I mean, I I I would say, I don't know, like, you have to ask that, but I think it's possible if you have the leverage to do that. The the thing with Sequoia is that they they did invest in seed and series A and like one of the reasons we did the series A with them is that we could push the dilution lower because they already have ownership. So it it's like one of those things you can optimize for. But I don't go super hard on optimizing with any of these things. So often it's a matter of like, what do we think is like reasonable valuation in terms of our progress? So I'm not trying to get the highest valuation possible. I think it's dangerous and what we've seen in the past couple of years that it can lead to down rounds and those are really annoying or unmotivating to people.
23:25 Speaker 00 So I want the valuation to be good, but not not something that it adds like overly a lot of pressure or like we get ourselves kind of locked into this valuation cage and we can't do anything anymore. But I rather see like a good progress on the valuation and then like push down the dilution to the level that it makes still make sense to the investor. I want the investors still to be engaged in the business and not just like, well, I bought. One percent, I don't really care, but I think it's depending on around it. It should be enough for them to care, but as low as possible, we can get it.
23:57 Harry Stebbings? Should founders have a board from seed, from A?
23:59 Speaker 00 I would say like personally, I think like you shouldn't have a board at seed. And I think you can raise a price round. I don't think you need to. You can do a safe round at seed. At a series A, you can think about it. I do think it's like we added the board to the series A. I feel like it's it's kind of like a standard thing where I think it's in some ways it feels good governance to to have someone outsider there. And then I think with the series B, we added a added another board member to kind of get two different perspectives in the board meeting. So we just don't have us and then a one investor, but we now have two investors and then then us. But I would say like on the board seats, I would definitely think about controlling them or having
24:41 Speaker 00 a little bit more. If you're a solo founder, you probably should have more seats or more voting on those seats. We have three founders, so it's it's been like kind of working out that way. Like we can have three. We negotiated to have three seats from the beginning and the the VC can have one. And so we can like retain the control of the board. But me and like even our legal counsel, I don't think some of these tricks don't really work that well anymore. And I don't think I I saw this interview from Barker Conrad. And I think he said that the only real protection you can have as a startup founder in your business is is to be successful. If you're not successful, there's a lot of ways. It's not about the board control. It doesn't really matter. Like, there's a lot of ways investors can exert their control.
25:24 Speaker 00 They have much more experience in that than you have as a founder. The real protection you can have is to be successful and not overthink these different terms or controls you can have in the legal framework.
25:36 Harry Stebbings? What was the single best investor meeting that you've had, Carrie?
25:39 Speaker 00 To me, it's always if people come in informed and get us and they're willing to go deep. That's something like I do with this fundraising process is that I don't like going very broad with the process. When when we see that there's a good time or reason to do a fundraise, I usually have a list of people that I know or heard from from folks.
26:01 Harry Stebbings? How long is the list?
26:03 Speaker 00 The list can be longer, but usually when I start the process, it can be only like five people that I wanna talk to. And they can be a little bit different kinds. Some of them maybe are solo investors, some of them are tier one investors, some of them are some it's a specific person I I've heard about.
26:18 Harry Stebbings? So when you have that list, a lot of people are told always be raising. You need to continuously build relationships between rounds. How do you feel about that?
26:26 Speaker 00 I mean, I would say like absolutely not to be always raising. I do think that as a founder or CEO, you should always think about the next round or what would make it good or what would ideally, what would you wanna get out of it? Like what kind of person would you want to get in? And then obviously, if you do need the money, then you also need to think like, when is a good time to do that, that you still have good amount of leverage and the momentum in the business is good. So I think like there is this background process that you need to run every now and then, like you don't have to think about it every day, but maybe every quarter or every month or something that just think like, is there something I should do or think about about the next round? When is it gonna happen? Like, what should I prepare for that?
27:07 Speaker 00 And I do meet with some of these investors, even though I'm not fundraising, but they're often very casual chats and I I just wanna get to know the person a little bit. So when when the time comes that I wanna run this process, I already have some level of relationship there. And then we can just go deeper into the what kind of investor they are and like their questions and my questions and and that kind of stuff.
27:29 Harry Stebbings? Which investors you not work with today that you would most like to work with?
27:34 Speaker 00 There's definitely the question even in my head, do we need to raise? Like, is this it? And I'm being kind of like researching, are there like a different ways of doing this? And and I think like, for example, if you don't need that much primary capital, you could do more like a secondary capital, you can actually build this more into a little bit like public companies where the team's equity in the business is a little more liquid, that you could have more of the secondary opportunities with the team. And that could be a good thing for the team, that they they can actually feel like the equity is worth something and not not just like a paper ticket they have that maybe one day will turn into something. So I think there's that question of like, do we even need more investors in the business? We actually have quite a lot and like they are good and so.
28:17 Harry Stebbings? You said earlier about the kind of investor shortlist. When we chatted before, you said about putting VCs to work and giving VCs homework. What did you mean by this? I'm not often given a homework, Carrie.
28:28 Speaker 00 I make a separate Google Doc for each investor and I say like, hey, here's a memo. At the end of the memo, there's some questions for you that I would like you to think about. And then they should write them down and then we should talk about those answers. And to me, what it gives me, it's a little bit like simulating the relationship of working with them. And I can see the answers themselves might not matter that much. It's more about the, I can see how they think and what their style is. Are they more tactical? Are they more high level thinker?
28:56 Harry Stebbings? What are you looking to see?
28:58 Speaker 00 It's more like, do I like this style? Like, I would say, for example, what I don't like is overly benchmarking or following like playbooks from other companies. It's templating the business, like you are not really thinking about our unique challenges. You are, you are applying this template from somewhere else. So that's one thing I don't want to see. But in terms of like what they actually do, I think it can vary a lot. In the end, it's more just when we go through it, it's more like the feeling I have. Do we speak the same language? Do we think? It doesn't mean like we have to think about the things the same way, and that's not the goal. It's more that does this way of communicating or thinking seem productive? Like, do they get our values or how we do things? Or do they not? And did they completely miss that?
29:43 Speaker 00 So I'm just looking for a fit and that fit can look different.
29:48 Harry Stebbings? Carrie, what advice do VCs give that founders listen to that you think is most dangerous?
29:53 Speaker 00 VCs tend to push you to hire more leadership people. But then it's not always the right time, or it's also tough to find the right person. At least for me, I'm again looking for a fit in that leadership role. So I think there's way too much push on like hiring, like especially like business roles, like hiring a VP of Sales, hiring a CRO or hiring something. Where I always ask like, what are they actually going to do? Like, what are they actually going to change? And usually there's no answer because they don't know what they're going to do. And the people themselves don't know. They come into company, they start doing some stuff and maybe hopefully they will do something productive.
30:31 Harry Stebbings? Are there any questions that you ask when identifying talent that are common across different functions? And so like I always ask, like, talk to me about your relationship with your siblings. It tends to be the opposite of how they view themselves.
30:44 Speaker 00 I I like to ask people like what they're really proud of, like what the, what is something they built that they're real proud of? I I think it they I get the answer.
30:51 Harry Stebbings? What you want to see in that answer?
30:53 Speaker 00 First of all, I would like to see that they're proud of something, that they actually care about something and they could articulate why they care about it. And then I think again, it's it's not what it is, but it's about like how they talk about it. The people who really care about their craft, whatever role they're doing, they always want to go beyond what is expected or want to do it better than expected. What I'm looking for in that answer, people who are passionate about their craft or want to do it well, usually their answers start to sound more like they almost, these projects are almost their children. They start kind of lighting up, they get emotional or they get much more nuanced on what they build and why. And the people who don't care about the craft as much, that their answers are more flat or more factual where it's
31:38 Speaker 00 more of a, I did this and it worked well, the impact was there, it was successful. So to me, that's like the interesting thing to look at, like, do they want to go beyond? Can they think beyond what is expected or standard in this job or role? Can they come up with something even better? And do they have that motivation to do that? And you look for that craft in that in that question.
32:00 Harry Stebbings? Carrie, what are the biggest hiring fuckups you've made?
32:03 Speaker 00 There's only a few people we had to let go. There's only a few people who have left the company in this like five years. It's probably always comes down to hiring someone that you weren't kind of like strong yes about. It's it's a little bit of that pressure of, hey, this seems good enough, we should go forward with it. And then usually you end up regretting it. The moments we had to let people go was that we kind of forgot that and just hired someone because they were fitting for the role, but we didn't actually feel the special sauce in there.
32:32 Harry Stebbings? What do you say to founders? You say, that's great, but like, I need the role today. That's super idealistic world. I need the seat filled.
32:38 Speaker 00 If it's your first 10 people or even like first 15, 20 people, it's much more important in the early stages. Every role you hire impacts the culture a lot. It potentially sets the standard for the whole function. So if you hire. Your first marketer, that first marketer is going to be the standard of what marketing is in the company. And if you hire your first engineer you hire, that's also sets a culture on the engineering. I would definitely not ever do that in the very early stages. Like you just as a founder have to do the job until you find someone who is really good at it, or like you find that right person. At the later stages, when the team is a little bit more there, it's maybe like less impactful role. I like to think there's more like upstream roles and downstream roles, like
33:24 Speaker 00 how much those people might be affecting, like if they're more upstream, they affect everything downstream. So obviously like leaders or for example, product people, they're affecting the whole product organization or the whole product quality or direction or something. Those people have a lot of downstream impact on the business or on the company versus someone who is more on the end of the spectrum or like at the end of the downstream where for example, support is it's like we want to do support really well and we want to hire really good support people, but it's also the support doesn't impact everything in the company. So I think there is nuances you can find that like why maybe it makes sense to sometimes fill the role versus like just wait until you find the right person.
34:06 Harry Stebbings? Ty, where are you insecure in your role today?
34:09 Speaker 00 It comes down to the CEO role that I feel like you can be insecure all the time. That role is never the same. You can never be the best at it. The company is always changing, the team's changing, the the market is changing, everything is always changing. So what you did maybe well in the past and it was good or well done, it's not enough anymore. The company is not bigger, you need to do something differently, you need to do something better. To me, the insecurity is always about that, that am I doing enough? Am I doing it well enough? Should I be thinking about the next thing? Should I be focusing on today? Should I be focusing on the future? The answer is both. And so I think there's this constant, am I doing a good job? Should I be doing something less? Should I be doing something more?
34:53 Speaker 00 So I would say it's just like a nature of the CEO job that I would say like nothing is ever enough. There's always more you could do.
35:00 Harry Stebbings? Do you think becoming a father changed who you are as a leader?
35:04 Speaker 00 I think there's some aspects probably I think about more is like your influence on your children. What do you say or do? They might learn that same thing. And if you do something, if you say something or talk in a certain way, it might influence them to become something or they kind of like pick it up. I maybe like more conscious now of what do I say to the company? Because like whatever I say or do might influence them in a certain way. It's not like I'm telling them to do something.
35:33 Harry Stebbings? My mother always used to swear in the car. And so as a result, I have one of the worst mouths ever. And I just blame her in perpetuity for it. So I completely agree with you for being concerned about that. Final one, I'm intrigued. How do you feel about angel investing as a founder? A lot of other founders do it. How do you feel about it?
35:51 Speaker 00 I've done it a little bit and maybe I would like to do it more. I think as many other founders say that it can be very time consuming. Just like reading the email and trying to like evaluate this business. Like, is this something I should be focused on? So my criteria is now just very simple or clear is that do I know this person? Do I believe what they do or in this this kind of product category or something? And then I might like invest or might not. But what I like about it is that you can see how other people are doing, building their companies. You get this investor updates, you can see, sometimes you talk to the founders, learn a little bit of how other people are doing things and that can give you some ideas too.
36:33 Speaker 00 So I like that aspect. I don't like the deal flow filtering or figuring out which companies to invest. So now I just try to focus on, do I already know this person and I want to support them? Or do I really believe in what they're building and I want to support that?
36:47 Harry Stebbings? And after this, you get a flurry of angel investment requests. Sorry, man. That was a really unfair one. Listen, I'd love to do a quick fire round with you, Carrie. So I say a short statement, you give me your immediate thoughts. Does that sound okay?
37:00 Speaker 00 Let's do it.
37:01 Harry Stebbings? What are the biggest ways that companies fuck up remote work today?
37:04 Speaker 00 Not thinking that it is a way of operating and just thinking that it's something like you can keep flipping back and forth, like you have to build the whole company around being a remote culture and not just decide one day that, okay, today we are remote and then a year later, like we are not, no longer remote.
37:22 Harry Stebbings? In the linear journey, what did you not do that with the benefit of hindsight, you wish you'd done?
37:27 Speaker 00 I actually think like we did the right thing, but for example, like bringing in sales earlier. And this is credit to the investors. The investors are saying, you should bring a sales. Like this is the time to bring the sales in. And for us founders, we're like, no, like, I don't think it's right right now. And I think we had to go through that pain of we started realising, oh, there's a lot of people actually, a company is wanting to talk to us and realising, do I want to be the salesperson like 100% of the time? Or should we like hire someone to do that? And then we realised, yes, we should hire someone to do that. So I think in the end, we could have done it earlier, but I think it was important for us to like learn that lesson to pain and not just do it and constantly think about if the sales is the right thing or not.
38:08 Harry Stebbings? What do you believe that most around you disbelieve?
38:11 Speaker 00 I think it's just that the quality and doing things well still matter. It seems to me when I look at the market or me personally buying things that today it's really hard to find quality things. A lot of things or products are marketed really well and they can seem like they're high quality, but then when they actually use them, you're disappointed. There is some, some kind of power that if you actually do things really well, it is rare and people will notice and people will talk about it. It's, it's like all that viral products on Instagram or something like, I think usually there is some quality aspect to them that people get interested about.
38:46 Harry Stebbings? What thing of quality do you do today at Linear that you will not be able to do at scale?
38:52 Speaker 00 I think one thing is, is me personally looking at every project, the design or the, when the team is building different features or different projects, I follow along and. And when I start seeing them appearing in the app, I internally, I start playing around with them. I start trying them out. And before we, it's like, we don't have very complicated processes, but usually before we launch anything to everyone, I or the other founders will do some kind of check on it. It's like, does this feel good? Does it feel right? Are the animations correct? And like those like little details are correct. I'm not sure if we can keep doing that or it's fully scales. And even now it's hard. So I feel like it might be something hard to do when you scale the company more.
39:33 Harry Stebbings? What product other than Linear do you use and go quality?
39:38 Speaker 00 I think something I use a lot is Superhuman. It gets the right things right. It's fast and has the features that I need. Like, I think it's like the intro thing where you just hit the shift I or something and does the PCC for you. And those kind of things that you you do constantly in this job is there. And no other email client really has it. It's, to me, it's similar to Linear. We, it's more purpose built. It's purpose built for people like us. And it's not maybe the best email client for every single person out there. But I do think it's like the best email client for me or maybe for you as an investor.
40:14 Harry Stebbings? What blog post written post two thousand is your favorite?
40:17 Speaker 00 I like a lot of programs, I say, so I think they're the classics. And going back to this like profitability, I do like his blog post about ramen profitability and this written maybe like a decade ago. That's the ideal way of building a startup. Being profitable gets you the highest leverage you can have in terms of when it comes to talking to investors, because it gives you the leverage of not needing them. And so that's always the highest leverage if you can walk away from any deal. So I always loved that. Like, it was an explicit goal when we started Linear, but when we started seeing it's like, oh, this is actually possible and we can kind of project or forecast how is this going to happen? We did get excited about it. It's very motivating and freeing to be in that position.
40:59 Harry Stebbings? What was the worst investor meeting you had?
41:02 Speaker 00 I don't want to name names, but I feel some of the larger funds going in there to the beach meeting, everyone's silent, no one has any questions, those kind of. There's maybe ten people in the room. You don't know who you should be even focusing on. You come to this audience and then that audience is passive and they don't have anything like they don't give you any signal. They don't say anything. They don't ask much anything. Why am I even here? And which makes me think like I shouldn't be here. It's like this is not where I should be. I I don't like those kind of like I had some of those. I don't like them.
41:36 Harry Stebbings? I'm pushing and prodding here, but I'm enjoying this. Would you sell the company today for three billion dollars?
41:42 Speaker 00 It's hard to say. There's a good chance I would or and then there's probably like a good chance I wouldn't. I think it would depend a little bit of what happens after, like who is buying, like what is the, what's the story there? Can I get excited about that story? But if it's just that, okay, sell the company, shut it down for three billion. I don't know if I want to do that. So I think the answer today would be by default would be no. But if there would be some reason that we could see that, oh, this is really exciting and we could actually do this thing better or or something with some some other organization, it could be like interesting to look at.
42:16 Harry Stebbings? I'm asking the really spicy questions. I saw that Jira started advertising against linear searches. I think you tweeted it or someone in linear tweeted it. Does a company benefit from having a common enemy? Someone to go like, we're fighting against you.
42:31 Speaker 00 It does. Sometimes if you don't have that, you're not sure where the which which directions are bad directions. So I think like when you have a more of an enemy in in the market, you can kind of think like, well, we should do differently what they do. Like we should actually go the different direction from them. Anyway, I don't think it's worth building the same product again. So there's this product out there. It's very well used. So what we should do is we should still solve the same problems, but we should do it very differently from them. Not everything differently, but but some things differently. And that's like where the value can be. The value is not there if we just try to like copy what they do and do it's like slightly better.
43:10 Harry Stebbings? What question are you not often asked by employees, by interviews, by investors that you feel you should be asked?
43:18 Speaker 00 Maybe a lot of times it's the the why. I like why questions. And I think that the one question I would like to ask more is the why building a product that people wanna use in an enterprise is meaningful? Because there's like a lot of focus in the market or even the buyers or the customers or there's always like looking at the features or looking at the it's more about the what can I easily see on a website or something or in in my comparison chart? That some product does more or less. People don't ask about like, what is the most important thing actually? And to me, I think the enterprise tools or collaboration tools and enterprise that the most important thing is do people actually wanna use this tool?
44:03 Speaker 00 Uh, like if they do wanna use it, they will use it more. All of the things will work better. If they don't wanna use it, almost like you don't have the tool anymore. Like you, it's the value is not there if no one is using it. So I think people don't ask that why question enough.
44:17 Harry Stebbings? I think the fastest way a company can lose credibility in a fundraiser is when they do the quadrant on what features they have versus competitors don't. And it's like Microsoft and it's got cross, cross, cross, cross, and then them for green tick, green tick, green, like, I don't know. Seems like a stretch.
44:33 Speaker 00 Yeah, the last thing is is I really hate those comparison pages companies do. We never done those because I feel like it's not honest to do these pages. Like they're never objective, like linear versus X tool. And the X tool is obviously making it. So they they're always wrong in even on a factual basis, like the features we have or or don't have. And it's it's this comparison charts. I just feel like it's so dishonest practice in the industry, but everyone is doing it. That's something like we don't wanna do.
45:04 Harry Stebbings? It's also predicated on the wrong things. Like you're not explaining why you should even need them. Maybe you don't have the features because you don't need them and it's feature creep. And I mean, so I totally agree with you. Carrie, dude, I I so appreciate you working with me now, accepting my money. I know not many people have the luxury of being a linear investor, so I'm so grateful. And you've been fantastic. So thank you so much, man. This has been such a joy.
45:28 Speaker 00 Thanks, Harry. It was great to be here.
45:31 Harry Stebbings? I so enjoyed that with Carrie. What an incredible story from Linear. If you want to see the full episode, you can watch it on YouTube by searching for 20 VC. That's 2-0 VC. But before we leave you today, how do you get your users to do what you want them to do? Well, that's where Pendo comes in. Pendo is the only all-in-one product experience platform for any type of application. Honestly, Pendo's differentiation is in its platform. Every capability from analytics to in-app guidance to session replay, mobile feedback management and roadmapping are all-purpose built to work together. But don't take my word for it. 10,000 companies use Pendo and Pendo also does mine the product. The world's largest community of product management professionals.
46:12 Harry Stebbings? So check out their amazing free product today on pendo.io/20product. That's pendo.io/20product-podcast. And talking about AI, Glean is the leading work AI platform that transforms how teams operate. So this is how it does it. AI has the potential to help everyone at work with nearly everything they do, but only if it deeply understands the data, the people, the processes and the context specific to your work. Well, Glean is the leading work AI platform that does exactly that. So Glean's powerful AI assistant helps you find answers, generate content and automate work. You can also build no-code and low-code custom generative AI apps and agents that scale the power of your company's knowledge anywhere it's needed.
46:56 Harry Stebbings? That's why hundreds of enterprises, including some of the world's leading technology, telecom, retail, manufacturing, banking businesses, put AI to work with Glean. Empowering engineers to ship code faster, sales reps to better understand their customers, support agents to resolve cases more accurately, even IT teams to deflect questions and solve issues automatically. Glean is work AI for all. Visit gleena.com/20, that's 2-0, to request a demo today. As always, I so appreciate all your support and I cannot wait to bring you an incredible episode this coming Friday.
Previous 20VC: Why SaaS is Dead | Why AI First Companies Will Win | We are in the Middle of a Cold War for AI Talent | Why Europe is F******* and We Need to Stop Whining with Daniel Khachab, Co-Founder @ Choco Next 20VC: Robinhood's Vlad Tenev on Founder Mode | Building 8x $100M Revenue Lines | Lessons from Raising $5BN and the Gamestop Saga | The Future of Artificial Intelligence, Wealth Management and Home Ownership Page updated October 26, 2026 · transcript and summary are machine-generated
