20VC: Sonos CEO Patrick Spence on His Biggest Lessons Building and Growing Blackberry, The Right Way to View Competition and Innovation Cycles & How To Make The Transition From COO To CEO Most Effectively

Patrick Spence is the CEO @ Sonos, the sound experience company connecting millions of listeners around the world to the content they want. Prior to their IPO, they raised over $450M from the likes of Mike Volpi @ Index, Satish @ Redpoint and e.ventures to name a few. As for Patrick, prior to Sonos, he spent an incredible 14 years with RIM (makers of Blackberry) across multiple different roles. In Today’s Episode You Will Learn: 1.) How Patrick made his way into the world of tech and startups and became an instrumental part of the exec team at Blackberry? How that led to his joining Sonos as COO and later becoming CEO? 2.) How did building and growing RIM influence everything that Patrick does at Sonos? From the battle with Apple, what were Patrick's biggest lessons on the right way to approach competition? How does Patrick think about both partnering with Google today whilst also suing them at the same time? 3.) From COO to CEO: How did Patrick make the transition from COO to CEO so successfully? What were the most challenging elements to scale into? How does Patrick empower his team to have the confidence to stand up and say no to the CEO? How can one encourage debate and dissent in the team? 4.) How does Patrick feel about the role that vulnerability has to play in leadership? How does Patrick approach his own self-doubt as a leader today? How does he manage it? How does he advise founders unsure if they can scale into their leadership roles? What mentors does Patrick have? What has he learned from them? Item’s Mentioned In Today’s Episode Patrick’s Favourite Book: The Infinite Game: How Great Businesses Achieve Long-Lasting As always you can follow Harry and The Twenty Minute VC on Twitter here! Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.

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

• 0:00Harry Stebbings?

  So this 20VC is a very cool one. Ever since I was very young, we always had Sonos playing in my household, whether it be Mr. Brightside for birthday parties, or Carly Rae Jepsen's Call Me Maybe for some of my own taste. I know, very questionable indeed, but Sonos has always been there for me and my family. And then I saw their CEO, Patrick Spence, like a tweet of mine one night Friday evening, I think it was, and I had to ask him to come on the show. Thank God I did, because he was just incredible. And so for Patrick, as mentioned, CEO at Sonos, the sound experience company connecting millions of listeners around the world to the content they want. Prior to their IPO, they raised over 450 million from the likes of Mike Volpiet Index, T shirt Redpoint, and eVentures, to name a few. As for Patrick, prior to Sonos, he spent incredible 14 years with RIM, makers of BlackBerry,

• 0:45Harry Stebbings?

  across multiple different roles. And I do also want to say a huge thank you to Mike Volpiet Index, Sonos founder John McFarlane, and Robbie Buck for some amazing question suggestions today. I really do so appreciate that. But before we dive into the show today, I have to say I just love using AngelList Fund Admin Platform to manage my investments. The team and the platform at AngelList takes care of all my back office needs so that I can focus on working with great founders. Leading fund managers have made over 10,000 investments into 6,000 startups via AngelList, all online and all in one place. And with recently announced Rolling Funds, you can easily find and invest in these top fund managers on angellist.com/rolling. And speaking of incredible products there like AngelList Fund Admin Platform,

• 1:28Harry Stebbings?

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• 2:10Harry Stebbings?

  Remote high performing tech teams by connecting you with elite global talent and owning end to end processes from hiring to onboarding to remote teams integration. Terminal delivers the product building powerhouse your business needs to grow from workspaces to community to on the ground support. They take the guesswork out of remote management so that you can really thrive, but don't take my word for it. Just ask high growth businesses like Gusto, Chime, Earnin and Hims all trusting Terminal with their remote teams. And you can find out more today at www dot terminal dot I O. But that's enough from me. So now I'm thrilled to hand over to Patrick Spence, CEO at Sonos.

• 2:51Speaker 01

  You have now arrived at your destination.

• 2:54Harry Stebbings?

  Patrick, it is such a joy to have you on the show today. I've heard so many great things from my Volpe and from John Sonos founder. So thank you so much for joining me today.

• 3:01Speaker 02

  I'm very excited, Harry. I love your work and I will tell you, you're the one podcast where I actually have to slow down the speed in order to listen to it. So I usually listen at one point five, but with yours, I actually slow it down a little bit, which I love.

• 3:14Harry Stebbings?

  Well, I mean, you talk about my content and it's your content that's massively helped my love life with your fantastic Sonos playlist. So I think I owe you many, many thanks for the romance, but I do want to start today with a little bit on you. So tell me, how did you make your way into the tech world and how did you come to be CEO at like the game changer of my household for sure, which is Sonos?

• 3:31Speaker 02

  Well, you know, I, I came into the tech world because the elementary school I went to in a small city in Canada was lucky enough to get a Commodore PET computer when I was in third grade. And I was one of the students that was fortunate enough because my math marks were good enough to be able to use that PET computer. And so I fell in love, started programming, you know, in third grade, lost it a little bit along the way. Was always into computers and tech and everything along the way, but lost it a little bit. And then rekindled it when I was in university as well. I realized, hey, this is the thing I think I want to be involved in is something around technology and computing. And so that really spurred me actually to do an internship between my third and fourth year of college at IBM.

• 4:12Speaker 02

  And I learned a whole bunch and got to work on the ThinkPad team. So I got a feel for mobility and computing and everything going on in that world. So when I went back to University for my last year, I figured I'd go back to IBM, probably get five years of good experience at scale under my belt. And then go start my own company or join a smaller company. Instead, this opportunity came up with this company nobody had heard of in Canada called Rim, Research in Motion, doing some random engineering projects at that time, but with grand ambitions. And so I found my way there, met Jim and Mike, and that really then set a pace the next 14 years of an incredible journey.

• 4:46Harry Stebbings?

  I mean, what an incredible journey. Can I ask, what caused the switch from Rim to Sonos? And how did that come about?

• 4:52Speaker 02

  So it was Jim and Mike, who I was very, very close to. Obviously, we worked very closely to build BlackBerry over all those years. They had stepped down. There was a new CEO in place who had come internally and Torsten and I had worked together for a number of years. But we disagreed on the direction of the company at that particular point in time. And there's a great book called Losing the Signal by Sean Silcoff and Jackie McNish. I get one Canadian Book of the Year that really goes into depth on this. But I believed at that particular point in time, we needed to pivot as an organization. And so we needed to really double down on opening BlackBerry Messenger to other platforms. We actually had it working on iOS, Android, desktops as well. BlackBerry Messenger at that point was 80 million daily active users.

• 5:35Speaker 02

  This is before WhatsApp had any traction, any other iMessage had much traction, any of those things. And I felt that we had to go and do that. And Jim, myself, a few others were in that camp. We also wanted to double down on enterprise software across platform, not just for our BlackBerry devices. But Torsten and previous to Torsten, Mike had been more on the know where a hardware company, we need to build the hardware. And so we want to keep building hardware. If we just get to BlackBerry X or new OS, everything will be fine. You know, we'll overtake the iPhone and Android and all those. And that's not the way I saw it. And so Torsten and I disagreed on the direction. And serendipitously, at that time, John McFarlane, the co-founder of Sonos, had reached out. I had Sonos at our house in England and it was magical.

• 6:19Speaker 02

  Every single dinner party that we had, I ended up selling more Sonos. The kids could use it. My wife could use it. We had a very complicated system at our house in Canada, so only I could use. The multi-room system that we had and you had to remember which CD was in the changer where and all of these things. And Sonos just made it so easy and so magical and brought music into all of our lives. So I wanted to meet John just because I was so impressed with what they had built to that point. And we ended up talking, we're supposed to talk for, I think, an hour. We ended up talking that first day for four hours. And then the next day, we spent another four hours talking. And John and I both had similar experiences in the sense that he had built software.com from nothing into a multi-billion dollar valued enterprise.

• 7:03Speaker 02

  Obviously, I had the same experience at RIM. John had really started Sonos to build on the learnings and the things that didn't work at software.com. Cause it had really soured in the end and wanted to do it better and differently a second time. And he and I could not have been more aligned on that and trying to build something that would really last, right? So built to last in the whole kind of Jim Collins type mentality. And so John and I just absolutely hit it off. And then I got to meet some of the other team at Sonos and I realized it felt a lot like RIM in the early days. So at that point, there were a couple hundred people at Sonos doing a couple hundred million in revenue. And I said, you know what, like, as I look at this, I think there's a real opportunity here for me to take everything that I've learned over the last 14 years, both good and bad,

• 7:45Speaker 02

  and be able to apply it to Sonos and help Sonos grow and thrive and make sure that we set Sonos up to be successful forever and not make some of the mistakes that we made at RIM.

• 7:55Harry Stebbings?

  I mean, speaking of the comparables there and those learnings, it was Mike Volpe actually in there. He said, I asked this one and he said, when you think about the comparables, how did building and growing RIM influence everything you do at Sonos as a company and at a specific points?

• 8:09Speaker 02

  Yeah, so there are a few specific points. I think we reached a point, we scrapped it out. Obviously, we were a small company from a small town in Canada, which everybody thought could never be successful on a global stage. But when we got to a certain scale, I think we got complacent in terms of where we were and we weren't pushing ourselves hard enough to keep making progress. And so our operating system, for instance, it started to get laggy, started to get old and we weren't pushing to re-architect and investing in the way that we needed to re-architect because we were still leading the marketplace, right? And so it's Pretty classic in terms of that complacency. And so every day at Sonos, I'm always thinking about how we keep pushing ourselves and making progress. And so progress is the name of the game as I think about everything that we do. And that's across whether it's go to market

• 8:53Speaker 02

  or across the product side, software, hardware, customer experience, operations. So that's a big one. The hiring is the other big one where we went for quantity, I would say at RIM. And we went through periods where we're just hiring people like mad and we didn't have the quality control that we really needed. And I'll say at Sonos, John and I, and John really helped me see this, the importance of putting a lot more time into that hiring and having a disciplined process that allowed us to make sure that we're getting the people we need, not just to fulfill today's requirements, right? To deliver the growth that we need to and maybe a hundred percent this year, but to keep growing for years and years to come. And so thinking about that and thinking about that from a mix of like internal and external perspective.

• 9:36Speaker 02

  The other thing I would say is kind of charting our own path. So we ended up in a situation where after the iPhone came out, Verizon offered us the opportunity to build a product and waved a big check to say they needed a response, right? Because it was running on AT&T. The iPhone was running on AT&T exclusively. And so they asked us to build a product which would compete with the iPhone and give them a response. And so we built our first touchscreen device called the Storm. We did that as a response and kind of chased what the iPhone was. Up to that point, we had charted our own path. We'd always played to our strengths, which was keyboard messaging, like some of the things that really set us apart. That was the first time I could remember that we responded and responded in such a straight away kind of way. And we rushed it. It was not a great experience.

• 10:21Speaker 02

  We basically took 10 years of building an amazing reputation for reliability, quality and great experience and threw it out the window over the course of a weekend when we first launched Storm and a whole bunch of people had a really bad experience. So I put that into place, you know, and use that lesson at Sonos when Amazon and Google and some of the other companies came out with smart speakers into our space with voice speakers and they introduced these $29 pucks, basically. There was a contingent of people at Sonos that Said, hey, we should build one of those too, right? And build one of these cheap little speakers and go through it. My experience from RIM led me to believe, no, that's exactly what we shouldn't do. We're not going to respond in that way. We're going to build on what we do, which is an open platform.

• 11:03Speaker 02

  And we're going to take the most useful part of those products, which is the voice experience. And we're going to implement those in our own way on Sonos products, right? And continue to build on the Sonos premium experience. And that's proven to work and continues to help us in terms of charting our own path. But I'll say the most important thing, Harry, is really building adaptability into the culture. So the ability, for instance, of us at RIM to not, you know, in that experience of not being able to say, you know what, the hardware business, we've fallen behind Apple and Android at that particular point in time. And it's not just about a new OS because there's ecosystems that develop around that. There's momentum, there's scale as well that goes through that. Making the hard decision to say, what we need to do now is actually pivot and take BlackBerry Messenger

• 11:48Speaker 02

  and open that to other platforms, take our enterprise software, make sure that's a cross-platform security play. And enterprises can do that and really transition as a company. That's a super hard decision to make after you've built hardware for, at that point, 10, 12 years. But you've got to build that adaptability and that courage into the culture of the company. And we didn't have it at RIM. And so it's something that I think about all the time at Sonos. It's why we've experimented with things like our IKEA collaboration. You know, that's been very uncomfortable for a lot of people at Sonos because we know how to do hardware. We know how to build it and we're very particular about that. But I also know that 50 years from now, perhaps we're doing something different, right? And completely different. And so what we need to do is build a culture which can adapt as necessary to the trends around it.

• 12:32Speaker 02

  Think about the strengths that we do have and play to those. And perhaps we're doing something completely different in 50 years. But what's important to me, and I think my experience from RIM, is that 50 years from now, Sonos be growing and be relevant in terms of where we are in the world.

• 12:46Harry Stebbings?

  Yeah, speaking of that adaptability, a lot of it comes from like internal innovation ideas of what's coming. And the hardest thing there is like, how do you create a culture of safety where people feel they can bring those ideas without fear of repercussion or judgment? How do you think as a leader, you create that environment of safety and often also dissent where people can disagree freely too? How does one do that?

• 13:08Speaker 02

  I think you're exactly right that the key word there is some safety ultimately, so that those ideas can be put on the table. I think our reaction as a leader in those scenarios is so key and not immediately jumping in or with our own biases in terms of what's happened there and letting these things happen. So, you know, Hack Week's a great example, right? And so we run those quarterly and there's ideas all over the map, right? In terms of what's there and then they all surface and we can kind of see big picture trends that are happening and what's going on. But just day to day, like the ideas that are coming up in the organization, whether on the software side or hardware side, that's allowing people enough room to think about what's out there. We have teams on advanced technologies, so looking at technologies that are five, 10 years out, like allowing those people to come together.

• 13:51Speaker 02

  And Sonos is a really unique mix of people from design, technology, audio, software, all of these different areas coming together. And so I think that part of the magic has been making sure that we're getting those people together in the right pods and the right teams to be able to build on each other's ideas. But it is hard. It is the hardest thing. And I think just creating the space, you know, making it okay to have things that don't work, right? And it's even harder in hardware because you really don't want that many hardware programs that are not going to work, right? Because it's a two-year journey. You've got to get a lot of the details sorted out upfront and a lot of debate has to happen at that point. The nice thing in our world is we can change a lot and evolve a lot through software. That's kind of the power of the system ultimately, but you've got to get a lot of that right upfront.

• 14:36Speaker 02

  So we have a lot of those debates. We have a lot of those conversations early in the cycle of building hardware as well. But right when I came into Sonos, in fact, we made a decision, which I think speaks a lot to our culture, which was to push a product which we really needed from a company perspective, needed out in kind of the holiday quarter. We pushed it out, I think, two quarters because we just didn't have something right in terms of the design and what we needed to do. And I think those kind of things in a culture are really important proof points of like, no, we are going to put quality in getting it right ahead of the schedule or something else in that regard. So it's teaching people like through the actions and the responses and the way that you're really showing up every day.

• 15:15Harry Stebbings?

  You mentioned the advanced team. It's a tough one and you know the show, I often go off schedule, but I'm too interested here.

• 15:21Speaker 02

  Yeah.

• 15:22Harry Stebbings?

  Advanced team, a lot of ideas and innovation coming out of. But when you think about deciding and decision making frameworks over where to commit resources and time, how do you think about that and differentiating between good and great and where to prioritize?

• 15:36Speaker 02

  Yeah, with our system, one of the great things is looking at the way our customers are using the products, looking at what they're doing. Because even customers won't necessarily tell you, right? Even if you're surveying some of those things and we test new concepts and we'll do different focus groups and those kind of things. But I'm more of a believer in, okay, how are people actually behaving? What are we seeing there? And then what are the macro trends that are happening in the world? So voice is a great example in terms of something that then comes along and it's like, okay, this is happening. We believe it helps us in terms of creating a better experience because like at the end of the day, the North Star is the experience. And really delivering an experience we think that's going to continue to get better and better over time. And going through that, we're looking at customer insights, we're looking at market trends as well.

• 16:18Speaker 02

  And then we're looking at those technologies that are developing out there for kind of new experiences we might be able to deliver. And I think, Harry, part of it is that we're unique in a way in terms of, again, having design, audio, software, hardware, QA, like all at the table, advanced tech, all at the table, to be kind of debating and working together to bring this to life. Because I think at a lot of companies, it ends up being kind of one that takes it and really runs with it. It's kind of one dimensional and we keep striving to have healthy tension and then be able to work it through. And ultimately, we have great product managers that have to make the call based on what we're seeing. But they're using those customer insights, they're using the trends to decide, okay, here's the right way we're going to take this particular product.

• 17:00Harry Stebbings?

  Totally with you there. Can I ask, in terms of like, we spoke about the comparable learnings from the company perspective. In terms of like leadership perspectives, we have touched on that in terms of like creating dissent and encouraging safety within team atmospheres. In terms of like leadership aspects that taken from the 14 years at Rim to today with Sonos, are there some that really stand out to you?

• 17:18Speaker 02

  Yeah, I'd say there's probably two that really stand out to me. At RIM, I joined right out of college and I thought leaders had to show up a certain way. So every day I kind of put on a suit of armor to be a leader, like the way I thought leaders should act, right? And show up and not really be myself, quite frankly. And people would get a flavor for that, obviously, as we went through it. But I always thought I had to show up perfect at a certain level and like all together and everything like that. And I've realized there is way more power as a leader in being vulnerable and just being who you are and leading in that way. And it comes with a lot less mental overhead too, in terms of being able to show up like just as yourself. And if anything, I think the pandemic has really doubled down on that as well in terms of just showing people that you are going through.

• 18:03Speaker 02

  We have our kids here doing school, right? One of the all hands, I do an all hands with our team every week. One of the all hands, one of our daughters was unloading the dishwasher and she was doing it in a very loud way because she wasn't happy about it. So everybody could hear dishes like clanging in the background as we were doing the all hands. And like, that's real life, right? And I think I did myself, probably in the company, to some degree, disservice by not just being who I am and bringing the best of me kind of to work every day and instead putting on a bit of a suit of armor, as I like to think about it. And then the other one was really like this macho degree of leadership from what I had seen, which culminated in me, when I was leading global sales and marketing at RIM, having nineteen direct reports.

• 18:44Speaker 02

  And so if I go back and I'm hard on myself now, I look at it and I say, wow, you know, you were trying to show like, aren't you tough? Aren't you great that you can have nineteen direct reports and like do all this work and work 24 by 7? Whereas, you know, at Sonos and with Testament to John and some others, like I learned the power of finding people better than I am and really putting them in a position to succeed. So today I have eight direct reports and it's much more manageable and much more powerful in terms of building the right kind of culture, getting the people in the company that we want. But I would say there was, in general, more of that idea of taking on more and more as you became a leader and being involved in all the big deals and those kind of things at RIM versus at

• 19:28Speaker 02

  So I was trying to build a culture which is going to sustain the kind of magic that we create on a long term basis.

• 19:34Harry Stebbings?

  You mentioned the vulnerability there. I think everyone, a lot of people in this industry goes, ah, they've got everything figured out and they've nailed it. And, you know, I was in Sloane Square yesterday with my mother walking and I literally just had an absolute meltdown in the middle of Sloane Square, which was probably not so easy for my mother to handle. But I'm intrigued, isn't there really just when shit doesn't go right? Help me out here so my mother doesn't have to go through that again. How do you deal with it? And have you had some lessons on how to deal with the shittest of times?

• 20:03Speaker 02

  You know, I think the, how the saying goes, right? Everybody is fighting a battle you know nothing about is something that's very important to keep in mind. As I was growing up, my mother had a lot of battles with mental health, but that was kept as a secret in our family as opposed to asking others for help and those kind of things. And I've found through my wife, through some friends, that actually sharing and leaning on some of my friends and my wife Erin has been tremendously helpful in kind of navigating those dark moments. And then keeping in mind, I'd say, Harry, that ultimately we're all trying to figure it out every day. And there is no one that has it all figured out. And I've talked at this point to enough amazing people, amazing leaders, to know that it is all about just trying to figure it out every single day.

• 20:48Speaker 02

  And most people are trying to do their best as they're working through it too. And so going in with that and giving yourself the benefit of the doubt as much as you give other people, I think is incredibly important.

• 20:57Harry Stebbings?

  No, absolutely. Because you struggle with self doubt. I mean, because, you know, 14 years at RIM, now multiple years leading Sonos. It's like, I kind of know how this game is played. Like, for me, it's like, I'm kind of figuring it out, literally figuring it out. I'm still quite young.

• 21:11Speaker 02

  I think the more you go through, you realize the less you know. And so it's humbling every single day. And no, I mean, I do not have it all figured out, but I work as hard as I can to make sure that I am trying to figure it out and trying to find great people to learn from, listening to podcasts like yours, to learn from amazing people, pick up as much as I can. And then giving myself that degree of benefit to say, you know what? You are doing everything you can. And You are learning, you're trying to put in all the time you can, work on yourself, work on your team. And so giving yourself the benefit of the doubt, I think, is critically important.

• 21:47Harry Stebbings?

  Speaking of working on yourself there, I spoke to John, obviously, the founder of Sonos. And he said to me, in terms of kind of your relationship and, you know, your role as COO when he was still with the firm as CEO. He stated that you were an extremely dedicated COO to his CEO role. And he said about the transformation that one has to make from COO to CEO. He asked specifically, what helps you prepare for that change and assuming the role of CEO?

• 22:10Speaker 02

  So I've had the great fortune of working for three incredible founder CEOs, right? In Mike and Jim at RIM and then John at Sonos. And, I mean, I've spent so much time with all three of them, got to watch them in action on a daily basis. And so when the time came, one of our board members, Robbie Bach, had said, I want you to know, like, you're not ready, right? In terms of that, but he meant it in a very loving, kind of caring way of like, no one's kind of ready at that time. But yet, everybody is also kind of ready to take it on and it's up to you to figure out the path. And so really, watching John, Mike and Jim, and then knowing that I'd prepared for that my entire life. So I did have visions, right, of starting my own company, coming out of college. And then I kind of skipped that one step by jumping to RIM.

• 22:55Speaker 02

  And I thought, okay, like, I'm going to join here and it feels like this is going to head in the right trajectory. Could never have imagined it would have been what we made it. And so there were two things in my childhood have been extremely important to my development. One was computers and really getting into technology. And the other was team sports. And so I played team sports throughout my childhood and into college. So I had confidence around leading a team. We had sports teams where we had no business winning some of the championships that we did. But it was because we all worked together, we played different roles on the team. I mean, we were able to overcome much more talented teams. And so I'd seen that in action. I'd been a captain on teams like that, so I'd had that experience. And so, you know, I felt like I'd prepared kind of for this moment as we went through it. And so I stepped into it.

• 23:39Speaker 02

  And I think Mike Wolpe as well, I think he said, okay, this is it, like, step up and step into it. John Mado, one of our board members, said, now you're the boss, be a boss. And so I had. A very supportive board. John McFarlane stepped away completely. So unlike most founders and CEOs and large shareholders that maybe go onto the board or become executive chairman or something like that. John said, no, I've seen how this works and goes badly at many companies. And so you need to fully take the reins and I need to get out of your way. So I'm stepping off the board. I'm disappearing. And anybody that would have called him at that point, he said, talk to Patrick. And to this day, I mean, John, if I called him right now, he'd answer the phone and he'd be willing to help me in a heartbeat. As I think Jim would at RIM too.

• 24:20Speaker 02

  And so that was invaluable and really helped me build that confidence to say, okay, I can step into this role and I know where to take it from here.

• 24:28Harry Stebbings?

  You mentioned team sports there as being crucial to kind of developing that leadership and also understanding of like the sum is more important than the parts, so to speak. When you think about imbuing leadership and developing leadership skills, and maybe you think about maybe your children, how do you think about what one can do and what you usher and encourage them to do to develop as leaders themselves?

• 24:46Speaker 02

  So they did, and both of our kids are into team sports. And we tried to give them a big taste of those like throughout their upbringing. I think one is the commitment so that if they're signing up for something, they are going to stick with it for the period of time. As you can see from my career, I'm big on commitment and loyalty. Having been with two companies over the last 20 plus years. And so commitment is one important one. And then we've tried to raise them in a way that they will be cooperative in terms of working with others and try to figure out what role they need to play, being adaptable in those situations so that if maybe this particular team, they don't have to score as many points, but they have to play defense, right? And they can actually go and do that and what happens. And my wife's a social worker, which is super helpful, I think, in understanding kids

• 25:31Speaker 02

  and making sure that they're in a good place. Trying to put them in a position where then they can build some confidence with that group is really important. But then as well, I think it's a good thing for them to have both good and bad teachers and coaches in terms of where they are right now, because that's life, right? And they're going to face that at times. And so figuring out how to deal with the adversity where they may have a challenging teammate, they may have a challenging coach or teacher. I think it's really important to them, developing the skills to navigate it through. And we try to be there. We make a big point of when I'm not on the road, having dinner together every night and making sure we have a conversation on what happened that day. And just trying to be there to really support them as they work through their journey. I feel like that's the most impactful job that I have for sure.

• 26:11Harry Stebbings?

  Totally. No, I do agree with you there. In terms of like the team sports, it brings about the element of competition and I don't know how to say this in a PG way, but you have faced the most interrogative and nightmarish competitive elements that anyone could do over the two different companies. So I'm intrigued, like, what's the right way to think about competition from a first principles basis?

• 26:31Speaker 02

  I think this is where, as I go back to it, one of the most helpful books that I've read recently is Simon Sinek's The Infinite Game. And thinking through the notion that there's not some endpoint, right? Like the team sports that I played and the games were very clear in terms of the rules, the time, you know, who had the most points wins. That's not the game we're playing. And in fact, the game we're playing, all of us, is to get to the next day, basically, and stay in the game and continue to play. And so I think when you look at it from that lens, you realize, hey, there's this ecosystem out there of players. There's some that do products and will build products that are similar to yours. And you kind of need to be learning and thinking about what they're doing and keep it in context. But you also can't be distracted. You know, the way I mentioned, we got at RIM with the iPhone and really responded in that way.

• 27:16Speaker 02

  So the way I think about it is, hey, there's aspects of the big tech companies which we want to bring to customers and they'll want to bring to customers, like their streaming services, like their voice services, apps, those kind of things. And so that's useful in terms of partnering and going through it. And then there'll be products, maybe kind of substitute like products they try to create that also compete with us. But we need to find our own path and we need to be clear how we're Sonos, not how are we responding to whatever another competitor does? And that's what I mean when I go back to like a lesson from RIM is are you pushing yourself to continue to innovate and bring out those new products all of the time to keep staying ahead of whoever it might be, right? Because there's the big tech players that have jumped into our space, but there's also new entrants, there's traditional audio players.

• 27:59Speaker 02

  And so you're making sure that you're continuing to push and build on the things that are working for your customers. You're fixing those things that aren't, you're looking at those trends and what you can do, I think will set you apart. But I think every company in tech right now has to be partnering with the big tech companies, right? Because there's lots of great services there that customers want. And then at the same time, you may find yourself competing and trying to find and weave that way, I think is. Important and I think I have a unique perspective on the world and way to find like partnership and competition, partly because of being Canadian, right? And Canadians are always looking outside of their country and trying to figure out how to kind of navigate the world. And I very much am always looking at and thinking about how do we navigate relationships that can be tricky at times, right?

• 28:40Speaker 02

  We're suing Google right now, but at the same time, we still work with them on YouTube Music Service, on Google Assistant and some of these other areas. And I think my Canadian-ness helps in some of those situations, just trying to make sure that we're maintaining a working relationship, but also standing up for the innovation, you know, and things that we've invented.

• 28:56Harry Stebbings?

  That must be an awkward Sunday lunch.

• 29:01Speaker 02

  At times.

• 29:02Harry Stebbings?

  I'm sure. I mean, that is a well played on that one in terms of the decorum. I do want to finish there with my favorite. You know how this goes, a quick fire round. So I say a short statement and then you hit me with your immediate thoughts. You ready to dive in?

• 29:13Speaker 02

  I am.

• 29:14Harry Stebbings?

  So hit me, favorite book and why?

• 29:16Speaker 02

  Favorite recent book would probably be The Infinite Game from Simon Sinek. The other one I would say, you know, has been refreshed and I think is important for everybody is Beyond Entrepreneurship 2.0 now from Jim Collins. I think some brilliant insights in there, just refreshed. So that'd be the other one.

• 29:30Harry Stebbings?

  What's the hottest animal of your role with Sonos today?

• 29:32Speaker 02

  I think it's trying to make sure that we are continuing to push ourselves ahead and drive that innovation on a consistent basis, right? Not ever stopping and getting complacent. So I think you have to keep building on that momentum. And so making sure that we're doing that and we're doing it at the right pace, particularly when everybody's working from home in times like this where it's stretching and we're growing, but we're also not breaking people, right? So I'm trying to balance those two things as we go through it.

• 29:59Harry Stebbings?

  You mentioned your board member, Robbie Black earlier. He asked, what kept you going through some of the really challenging times in the first several years?

• 30:05Speaker 02

  I'm a believer. If I'm going to join a movement, as you can see for my career. And so I make sure, and I think determination is something that is core to who I am. I am competitive from those team sports days. And so I just believe in the people I join and the mission I'm on if I do. And I'm not going to let that get in my way. And look, like during some of the tough times, certainly having people like Mike Bopey and Robbie Bach and my wife that I can just talk to and work through some of the things we're going through was absolutely critical.

• 30:38Harry Stebbings?

  Yeah, I need to get married. That's my solution, clearly. Tell me.

• 30:42Speaker 02

  That is, hey, Harry, that is the most important, I don't know if you've read Scott Galloway's Algebra of Happiness, but that is the most important decision of our lives, and I fully agree with that sentiment.

• 30:52Harry Stebbings?

  Well, I mean, help a friend out here, you could do some sourcing for me. Tell me, what three traits would you most want your children to adopt?

• 30:58Speaker 02

  Integrity, curiosity, and determination.

• 31:01Harry Stebbings?

  Love it. How did you approach diversity and inclusion? Mike told me you've really excelled at this. How did you approach it and what works?

• 31:07Speaker 02

  You know, I was moving to the United States and watching some of the challenges here around race just shocked me, quite frankly. And so, I think it was 2017 where I really kicked off an initiative to make our team more diverse, because it's the right thing to do in my mind. And I've seen all the research, which proves you're going to have better results in terms of doing that. So we started with employee resource groups and starting to create teams to do that. We also did a hiring target, which was pretty radical for where we were at that particular point in time. But I do it because I believe it's the right thing for our communities in the world, and it's proven over and over again to create better results. And so it's something that I believe all CEOs need to be very active in. And it can't be, you know, we've seen from companies that, you know, have invested

• 31:52Speaker 02

  a lot but not made much progress. I think the real issue is, in those cases, they've often siloized it, or given it as a responsibility to somebody else, when I think this is something that is about talent, and about culture, and something that the CEO really needs to own and drive.

• 32:05Harry Stebbings?

  Totally agree with you in terms of being top down. Tell me, what's the exercise regime in the hills of Santa Barbara?

• 32:11Speaker 02

  So, one of the things that's helped me most in terms of being able to approach every day in a balanced and thoughtful way, is I'm on the beach every morning at 5:30 with a group of people working out. So, we do a variety of workouts on the beach, and then on the weekends, I have a group of people that we run through the mountains and do some crazy races and fun stuff with. And I really think it helps with bringing the right kind of mental attitude to work. And it also helps with building that muscle of endurance and perseverance and everything that I think you need as a leader.

• 32:40Harry Stebbings?

  5:30 AM. That's why I have a dad bod and your body is at it.

• 32:46Harry Stebbings?

  Okay, tell me, which leader do you look up to and why?

• 32:49Speaker 02

  My father, in a big way, I think is a shining light for me. His integrity, determination, his loyalty and commitment to our family and my mother through some very, very difficult times, I think has a more profound impact on me than I ever realised until I really spent some time thinking about it. So I'd say my father.

• 33:08Harry Stebbings?

  That's super lovely to hear. And ultimate one, and it's just between us, so no one's listening, but who's the best board member and why? You've got an awkward relationship with the CEO in Google, so I can just make it more awkward at the board. And who's the best board member?

• 33:21Speaker 02

  The person that really brings a unique perspective is Mike Olby, because he's seen so much. I think he's on 10 or 12 boards right now and he's been on dozens, right? Over his career, he brings such a clarity of thought to particular issues and he can cut right through it and get to the core question. So the discussions at the board level are important. He helps elevate the conversations and make sure the board isn't getting into, you know, the operational details and particularly for a company like ours, roadmaps and the products we're bringing out, you have a very personal reaction to it. So we need to moderate that to some degree. Mike helps that. And then I think he gets the balance of both support for me and also challenging me just right to help me grow and develop as a leader too.

• 34:02Harry Stebbings?

  Totally. No, he's a very special man. And final one though, what do you guys five years hope for you and for Sonos? Like, what does that look like in that picture?

• 34:10Speaker 02

  Yeah, it looks like a lot more great products and I think deeper experiences or experimenting with some services that we put out there as well and really more experiments, I would say, Harry, as we endeavour to build that organisation that is adaptable and thinks about building for 50, 100 years, not just what we do today. So you'll probably see some crazy things from us as well, you know, some things that don't work, but you can always be sure that they're going to be of the best quality and I'm sure most people will love them.

• 34:38Harry Stebbings?

  Patrick, as I said at the beginning, is such a big fan of Sonos and I'm so glad that I DM'd you. This was fantastic. So thank you so much for joining me today.

• 34:45Speaker 02

  Thanks, Harry.

• 34:48Harry Stebbings?

  What a fantastic individual and I just so loved that episode with Patrick. If you'd like to see more from us behind the scenes, you can on Instagram at HStubbings1996 with two Bs. I always love to see you there, but before we leave you today, I have to say, I just love using Angel List Fund Admin Platform to manage my investments. The team and the platform at Angel List takes care of all my back office needs so that I can focus on working with great founders. Leading fund managers have made over 10,000 investments into 6,000 startups via Angel List, all online and all in one place. And with recently announced Rolling Funds, you can easily find and invest in these top fund managers on angellist.com/rolling. And speaking of incredible products there like Angel List Fund Admin Platform, you have to check out Letter, the beautifully designed banking experience

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• 36:18Harry Stebbings?

  teams integration. Terminal delivers the product building powerhouse your business needs to grow. From workspaces to community to on-the-ground support, they take the guesswork out of remote management so that you can really thrive. But don't take my word for it, just ask high-growth businesses like Gusto, Chime, Earnin and Hims, all trusting Terminal with their remote teams. And you can find out more today at www terminal.io. As always, I so appreciate all your support and I can't wait to bring you an incredible episode with Seb, founder and CEO Klarna on Monday.