Akshay Kothari: How Notion Has More Money Than Ever & Why Startup Fundraising is Broken | E1203

Founder mode is really good if you have a founder who's right a lot. If they're not, God bless that company. There's more cash in Notion's bank today than the history of its raise. So it's like in some ways, like we've produced cash, we haven't spent any of it. I think the thing I would say about Sequoia is probably the best brand. Similar to how we demand excellence from our employees, I think they demand excellence from their companies.

Ready to go? Akshay, I am so excited for this, dude. We did this 4 years ago in COVID, uh, when no one was getting out, and now you're in London, man. This is so special. Thank you for being here.

Thank you for hosting, and so great to see you in person.

Now, I spoke to Ivan before the show. I spoke to many people before the show. Basically, he stalked the shit out of me, uh, and what I heard was actually that you have had so many different hats across the Notion journey, from CMO to CFO to head of inside sales, CHRO, head of IR, CPO. I mean, Christ, I hope you're accumulating different salaries for this. How did you learn new disciplines so quickly on the job?

I didn't really think of my job as those titles. Like, I think I— my job was COO, and in many ways, I— my primary job was to like help scale the business and the company and let my co-founders Ivan and Simon Stay focused on the product, and and so that meant whatever the company needed, I would jump in and try to figure it out. How did I do it? This is actually kind of interesting. So so my background is product, right? And and and and Ivan told me to join and take care of everything except product. And so I was I essentially put myself on all these new functions and and and just try to learn on the job. So one thing I realized was even though I had never really done any of these things before. Actually, like, first principles thinking and like systems design that you learn in product development actually like applies a lot to these functions too.

Can we take one, apply systems design in a way that you did, just so we can understand that in a more contextual manner?

Yeah, so let's say the first job I had at Notion was actually like there were 3 people reported to me were support, customer support, right? Now typically, as the number of tickets or as the number of requests go up, The first thing that people typically do is they just add more people. They sort of like divide the tickets by productivity and then they come up with some number of people. The product manager in me was like, well, we could build a better system so we could build better tools so that each support person can do more every day. But also, you know, once you have enough of these customer tickets, then the next role you want to hire would be something called a product ops, right? Product ops would take all this feedback and synthesize it and share it with the engineers. So one thing Ivan and I did in the early years was we created this canonical database of about 200 types of requests that would come, which would map to features, right? And we trained our support team to tag every request that come in with one of those 200 tags. You had to do that, right? That was part of the job. And every morning at 6:00 AM, we wrote a script which would take all these tags from Intercom and write it against these database tags in Notion. And so essentially what every engineer at Notion had was a real-time view of what people were talking about last yesterday or the last week or the last month. And so if you could see like, oh wow, people are talking about the Android app over the last month and it's really gone up, they can go in and start solving that problem. And we use this tag across the tools we had, right? So for example, if you were working on Android, you could essentially put that tag in Intercom and you can basically see all the customer support tickets that have come. So you could essentially, in many ways, you don't even have to hire a researcher. So now if you put all these things together, we didn't have to hire as many support people. We did not have to hire a product ops person, and we also did not have research early days. In fact, all of these were given to the engineer directly to be able to tap into that feedback and actually solve that problem.

This is a strange question, but, you know, everyone is going mad over founder mode and the difference between manager mode and founder mode. When you listen to the way that you're talking, it really is quite a change from traditional org structures and org designs. And it's really driven by a very product-driven founder mindset. Do you think in the future and with founder mode, we will see completely redesigned orgs and the traditional functions be very changed.

I do think everybody is starting to question this, like things that we've been taught about this specific org structure and, you know, the fact that, you know, Jensen has like 40 direct reports and doesn't do one-on-ones. So I think it's, it's actually kind of good that we're reopening, like, what is— what does this lead to? And I think every leader has to sort of question what is sort of the best way to run their company.

What things do you think we should question that we aren't questioning today?

Well, so I think if you go back to Notion and sort of why we did some of these things, I think a lot of it came from Ivan really sort of prioritizing keeping a very small team. And that part was not done just because we thought we would be profitable because of that. But I think we did it because it really meant that we could move a lot more nimble. We can stay a lot more nimble by doing that, right?

How did you prevent the creep? Like everyone, there's quite a few people that start very nimble, and they're really aligned to how you built the company. And then with $100 million round, or with that big milestone, you know what, we can hire that extra, we can hire that, we can start that new division, we can go into enterprise, We can do X. How did you prevent the creep with the increased brand and cash?

The best power founder has is like the veto power. And Ivan used that a lot when I was in the early days. Like, you know, I remember, I don't know how many salespeople we'd interviewed for the first 6 months. And Ivan was like, well, this person's quite good, but not great. So let's keep looking. I think for up to about 500 people, we're about 700 people today. But up to 500 people, the last interview was always with Ivan or myself. So we met literally everyone before. And in many cases even— and because we did that, I think it already sort of forced a certain rigor inside the company. But also in general, we were okay with enduring the pain. Like we were okay. Like a lot of times you feel like this person needed to be hired yesterday and we would be okay waiting a few weeks, a few months until we found the best person for that job.

So I'm loving this and kind of continuing Continuing to write here notes, but you said that about kind of enduring the pain. That kind of goes in stark contrast to what we're told, which is the speed of execution is the most important thing in relatively early-stage companies. The willingness to wait goes against that. How do you think about that and the importance of speed?

Well, I think, I don't know, I think we took a slightly different approach where we did try to keep the team lean. And we felt like it might feel like short-term it's slowing us down, but in the long-term, keeping the team small allowed us to move a lot faster. I think even if I think about today, like all of Notion with all the different surfaces we have, we have under 20 product managers and we have about 12 designers.

Mm-hmm.

12 designers sort of designed the entire sort of surface of Notion, including calendar. And it really allows us to move faster. Like it's not a committee of design or committee of product managers where someone's only responsible for a very small part of the problem. Because we have a— we are a lean team, we can actually take a little bit longer because we're not trying to hire a lot more people. We're trying to hire maybe a couple people every year. And it also forces a certain prioritization that makes you a lot more effective, right? Instead of just taking the fundraising money that you took, hiring a lot of people, saying yes to all the projects, I think that actually comes at a cost. The cost is that your bandwidth is now split among so many different projects. I think you may feel like you're going faster by hiring more people and saying yes to more projects, but in effect, it is actually going slower. So we've actually chosen the path where we're doing fewer things and doing them better.

I love the statement you said, which is the power of the veto. What did you and Ivan veto that with the benefit of hindsight maybe would have been better to do in the moment?

Initially, we, we, we didn't have our values codified. Right. And so a lot of the initial final round interviews was a little bit around our intuition where we felt like whether this person is going to be actually a good fit for the company. After about, I think when we were 50 people, we actually did the exercise of codifying the values. And we have 4 values. We are owners of a mission. We are pacesetters. We are truth seekers. And we are kind and direct.

My team would be watching this going, oh, there's a red rag. I think values are very, very challenged when you can't take the other side. So kind and direct. I want someone nasty and indirect. No one would ask for that. It's a— it like is— my question is, is it a good value because you could not take the alternative side? It's like table stakes. So like as an example, we look for obsessed people, not like passionate. Like that's not— you need to be completely obsessed. Do you see what I mean? How do you think about that and what makes a really good value in that case?

Well, I think to us, like values are the most important thing. So to answer your question, we wouldn't take someone who's nasty and direct. And I think—

That's my point. Like no, but no one would.

No, but I think there's a few nuances to this. I think so one of the reasons, if you take that example of kind and direct, the and direct part has an extra signal there. It's not like be nice to each other or be kind to each other or be empathetic to each other. We want people to be direct, which means that we are inviting people to be able to debate internally.

I spoke to Ivan again before and he said, listen, he's basically hired every single leader Notion at this point, Harry. So you have to ask him about that. And so when you think back over your lessons on hiring, what are your single biggest lessons on what it takes to really get the best people into Notion?

Initially, you know, you, you sort of have to get a feel for the shape of what you're trying to do in this function. And I think so in many cases, we didn't go to hiring the leader first. A lot of these functions, maybe I started doing the job myself. and sort of really sort of shaping it to sort of what we wanted to do in Notion. A lot of these functions, we also hired the ICs first, like individual contributors who can start to like do the work.

When you look back, what have been some of the biggest mistakes that you've made and what are some big lessons from those?

People who do well at Notion are builders, and we sort of expect even the execs and leaders to be builders. And so I think when we hired people who are VPs or CXOs at, you know, big tech firms, I think they have a machinery around how their work happens. And because Notion is so small and so lean, I think those people had a tough time at Notion because A, like that machinery didn't exist. But also when we did have crisis or moment of like solution that needed to be found, I think they typically sort of went to needing another headcount or, or, or sort of blaming on the systems or so forth. Right. Which actually didn't work so well.

What was the hardest team to hire and the hardest function to build out?

The one I would change a lot if I, if I could. Or the one that I probably regret not doing the right way is probably sales. I was optimistic. I thought like, you know, I think we could do sales a different way. And I thought our salespeople could be more consultative. They don't have to worry about quota. They just have to like make sure the customer is being successful and the product will grow and expand. And what I learned the hard way is that A, like, I think we tried to reinvent the wheel on something that has been done in a specific way, does work really, really well, that we shouldn't have. But B, like, I think the thing that I misunderstood was actually some of the best salespeople, they join because there is a quota, because they can hit a number, because they can outperform that number. And so actually not having that and not having, you know, the attribution really hurt us, I think, the first year or two.

How did you see it hurt you? inability to hire people, the people did not having direction. What was it that was— this is hurting us?

You know, the way we looked at it was just the percentage of business that is driven by sales or sales-assisted wasn't growing as much as we would have hoped. But, you know, there's actually an interesting piece here around sales at product-led growth companies, right? Which is that I think, you know, in many ways product sells itself at these companies and And, and you think you can do sales a slightly different way because you have all these leads, right? And, and that actually is, is also a blessing and a curse. Yes, it's a blessing because you have all these leads, but it's also a curse because I think your broader team starts to depend on it. It's like, oh, the product is not really signing up the right lead. This is why I'm not able to close sales, right? Which if you didn't have the product, if you didn't have anybody signing up on your website, You'd still be doing, you know, going out and trying to find the lead. And so you'd be, you know, you'd be sort of complaining about that part a bit less.

And if you want to build enterprise at some point, you've got to build outbound and you've got to build an enterprise function and you cannot continuously rely on product inbound.

Exactly.

As nice as that would be for anyone.

Exactly.

When was that moment when you realized that?

Probably like 3 years in. So that would have been like 3 years ago. We've obviously now moved very much into like, you know, we have an incredible new sales leader, Praveesh, who comes from like, you know, an enterprise sales background. And I think he's brought a certain amount of energy and DNA that like I didn't have.

Right.

That's it. That's it. That's the other thing is like you need someone who can really rally the troops and operates a slightly different way rather than like a systems builder. Product thinker, like doesn't work. Like you know I I can't stand on the stage of sales kickoff and like rally the troops as much as Praveesh can. And and I think if you're like a sales account executive, you you you want to see that. You want to see that. You want to see that you're crushing your quotas and you're you know you're really you're really building for that. And so so if I had to do, I used to back to your question. If I had to do it one function all over again, I would do sales. And what the way I would do it is to. not try to like overthink it, just do it the way it is run, like a proper sales machine, I think we would have saved 3 years in that journey. So that part, that part is painful.

Slightly weird one and going off on a tangent, but I heard it before this and I was like, it's just a really thoughtful statement. And it was the hardest things in life are not iron or gold, but unmade decisions. What unmade decision does Notion have? that is heavy?

I think one of the challenges for Notion has always been the, the fact that it's a horizontal product, right? And so I think the question people ask is like, oh, is it for consumers or is it for large enterprises? And the answer has always been yes. I still very much believe in, in that sort of horizontalness. And but one of the things I'm starting to realize is like instead of defending the answer, or trying to pick, I think we're, we're much more forthright with our employees about the kind of company we are.

How so?

I think the best way I've seen more recently is Parker at Rippling sort of calls it a compound company, which is that it is this like big mission that we're building many different products and they all connect through the data layer. I think it's very much for us like I think in many ways Notion is a compound company as well. where the building blocks that we're building really do serve consumers all the way to large enterprises. We actually did this study recently and we found that, you know, something like 46% of our business in, in, you know, it can be attributed back to someone using Notion in their personal life.

Mm-hmm.

And this actually like maps really well with sort of all the customers I've spoken to. Everybody I spoke to who was using it at a large company with, you know, wall-to-wall usage, they all started because their spouse is using it for their home project or they're using it for with their kids on something or their niece told them about it. Or I saw my uncle having their portfolio on it and so on and so forth. Right. So we know that this part is very important for us. Like it's almost like a part of distribution that happens naturally because it's a consumer product. But it doesn't pay the bills. The bills are— the business is growing on the B2B side.

Which person do you think has had the most profound impact, maybe on you and your leadership, maybe on Notion as a company?

When I ask, I would say in many ways, like Notion's kind of unique in that because the company became cash flow positive pretty early on, you know, we did not have to spend a lot of money, spend a lot of time on sort of fundraising or— there's very little external pressure on Notion.

What does being cash flow positive mean you have done that you wouldn't have done if you weren't cash flow positive? What has it enabled you?

It's a huge— once you get there, it's actually a huge time save. So I think I'll just talk a little bit about Notion. It's very nuanced, but we got there pretty early. I think we got there like 5 years ago. What it did was it meant that suddenly you feel in control of your destiny. You don't have to think about— you don't have an end date, right? You don't feel like you're going to run out of money in X months or X years, Y years away. And what that means is you can choose to raise money if you have a good need for it, but you don't have to. So all the time spent there could be spent back into building a better product and, and selling to customers.

Do you think the way that companies are built today is wrong? Idea, raise $5 million on 25 after leaving Stripe, hire people, get to a million in ARR. You're an angel investor too. Get to a million in ARR, have Accel, Index, and everyone fight over you, get to $10 million in ARR. Do you think we are building companies wrong?

I don't know. On one side, I feel like isn't it a gift that so many exciting projects are being funded? But I would say, let's see, like, I do think like people should have a deep understanding for what long-term valuation metrics look like. Right. And I think if you look at the—

What do you mean by that?

I mean, you just look at historically what is the revenue multiple or PE multiple of SaaS companies. So like you can raise on hope today. But in the very long run, unless you're trying to just like get acquired, you will be valued at a multiple of your revenue or a multiple of your cash flows that you're generating. And they tend to be an average of like, you know, what, 5 to 10x on the revenue multiple side. And the way that you can increase your multiple is by 3 things, right? I think in my view, one is you can increase it by having a faster growth rate. You can increase it by having a better cash flow margin and you can increase it by having a— being operating in a— in an industry or in a space where there's the terminal growth rate can still be pretty high.

Totally.

So, so I think as long as you have a deep understanding of those, those things, as long as you have a good understanding of what you're— what are you going to use the money for, you can build towards that. Great. I think if you're Hoping that we're going to be back to 100 times revenue or 100 times ARR valuation, I think, I think that's a bit challenging.

It's funny, I had the founders of UiPath, Klaviyo, ServiceTitan, and none of them could raise. And it meant that they all were forced to stay very close to customers for the first few years. And they didn't hire customer service teams. They didn't even hire product people because they had to do it all themselves. And all 3 said the company would not be the success it is if they'd raised the money.

I also have to credit Ivan here because in the early days, I think, you know, you know this, a lot of investors did knock on our doors.

A lot.

A lot.

A lot.

And I think one of them—

Did some crazy things to get attention from you guys.

Correct. Correct. And, and so literally every quarter, Ivan and I would discuss, it's like, should we do it?

Why were you not? Just out of interest, what was that internal discussion? I'm fascinated.

I think primarily Ivan was very focused on, do we have— is money the constraining factor right now? It's like if we had more money in the bank, would we spend it on hiring faster?

Take me to the time where money was a really constraining factor and you decided to raise it.

So we raised $50 million at $2 billion at the start of COVID pretty much like a couple of weeks into COVID in 2020, early 2020.

$50 million at $2 billion. I mean, that's a weird raise in the way— I mean, it's a brilliant raise, but in the raise that it's minimal dilution actually. But a lot of money. $50 million buys a lot, a lot. And so the traditional notion is, well, VCs wouldn't like that because they can't get the ownership that they need. How do you think about that raise, the structure of it? I'm just fascinated.

Well, it actually came about really fast, um, uh, and actually goes back to being cash flow positive and not needing it. I think you sort of are able to do—

You're allowed to break the rules.

You're able to break the rules because there's more demand than, than than supply. But, you know, the reason we raised that round was also, I think, was an interesting one where we didn't have a need for $50 million, but we raised it because we saw that the talent was flocking to safety, where all the people we wanted to hire needed some signal to say like, oh, this company is stable and I'm willing to work there. And so in March or April 2020, again, we didn't have the cash needs, but we needed an Index and Coatue stamp that, hey, I'm putting $50 million in this company that is growing. And that actually really helped us recruit and like break that.

How do you not let that alter your mindset towards focus? You got $50 million now, actually. You can, you can build that new team, you can build that new product, you can do that little like or hire. How do you retain that discipline when $50 million drops?

Frankly, I don't know. I think this might sound weird, but I think we're just like not wired that way. Like in some ways, like—

Which makes you very rare.

Yeah. In some ways, like there's, there's more cash in Notion's bank today than the history of its raise. Right. So it's like in some ways, like we've produced cash, we haven't spent any of it. And some people might look at it and be like, hey, you're not really utilizing the cash that is in hand. You know, you should. But I think, you know, One of the things that—

Is she being aggressive enough?

Yeah. So that's a question people ask. One of the things I learned, this was actually one of my favorite tours of duty inside Notion, was when I was running finance for a year. First of all, I thought finance, like at least before I actually worked on it directly, I thought this is just like bookkeeping, stay out of trouble, like stay compliant. But only after I worked for a year and I sort of got introduced to the whole world of FP&A, and biz ops. And I was like, wow, this is so strategic. And once you get to a certain scale— so Notion got to about $100 million in ARR a couple of years ago— and you realize like, oh, there's all these interesting comps you can look at, public comps that you can measure your performance against as well, right? If you think about your job as like, well, there's all these different projects you need to fund and you need to resource allocate, finance becomes such a strategic partner in that. I remember talking to— as part of like me going to hire our CFO, I talked to a lot of CFOs in the Valley as a way to learn. And one of the— I remember one of the conversations was actually quite interesting where I asked like, what's the ideal like rule of 40? Like, you know, should it be this? Should it be that? Like, you know, and this person said like, you know, basically you should have test budgets for everything you want to try out. You should just look at each part of your business through that unit economic lens. Right? So if you want to do performance marketing, give people $50,000, $100,000, doesn't matter. Tell them to test whatever they want to test. And if they can prove the unit economics for that channel and the channel's working, then you should load up the truck. You shouldn't worry about rule of 40 at that period of that quarter or that month because you've seen an opportunity that pays you back. You can do the same with sales. One of the years we did actually spend a lot of money on billboards. Right. And it was like a way for us to learn that, okay, well, this does improve your brand awareness, but doesn't actually do a lot to signups or deal closing sort of completion rates. Right. And so that's the theory we have right now with sort of being aggressive versus being too defensive is that this test—

What percent of budget should be allocated to tests across those different disciplines? Is it like 10% or is it like 50%?

Well, the budget could be pretty small. You just need enough of a budget to be able to get signals back that, that, that, that, that channel is working. And in many cases, you don't need it to be very large, right? I think maybe like sales, this might, might, might have a longer period before you sort of see what the paybacks are. But I think anything you're doing with performance marketing or some partnership deals or other things like I think those things, you know, you can, you can do it.

So we do the 50 at $2 billion. And then how much did we raise at $10 billion?

We raised around $270 million at $10 billion.

Around $270 million, to not be precise. Talk to me about the thinking there. What were we unlocking with that fundraise?

So this was second half of 2021, pretty crazy time. And the reason we did this raise was because our peers, our competitors were getting very aggressive in, in going to market, both from the marketing lens as well as from the sales lens. And we saw an opportunity not only raise this money, but also to sort of play the game on the field. And, and so, so we did this in October 2021. And, and I think the plan was to sort of, you know, go more aggressive on go-to-market.

Did you decide to play the game on the field and go aggressive?

Yes, we did for about a year or so before the markets turned.

Was it the right decision?

You have to. I mean, there is no other choice, right? I think at the end of the day, you do have to play the game that is being played on the field.

Do you, or can you just watch others burn money in go-go times and stay disciplined?

Probably nuanced. I think you don't want to like burn your company down, but I think you do want to like compete in see if you can capture more of the customers that you and your competitors are both trying to get.

And so we go aggressive for this year and then harder times come and we pull back.

That's what happened in 2022. In fact, the harder times came much faster than most had imagined. And so in many ways, the pullback happened quite a bit, quite a bit early in our journey.

Just thought exercise here. Is that not when you get more aggressive? Your competitors, who we won't name because, you know, I don't want to upset anyone, but, uh, they don't have actually the cash supplies that you do in a lot of respects. You could have gone aggressive then when they pulled back. Did you think about that?

We did do some of that, and I think the reason we were able to do some of that was because we were already cash flow positive. So we saw all the companies around us all trying to get fit, all trying to get back to cash flow positive, and we, we were like, we're already there, so what do we do? Through all of these things, one thing I realized, it's actually, there's there's like 99 ways you can burn money. There's only one good way to effectively make money, right? There's just so many bad ideas out there. You can throw money on the billboards, you can throw money on YouTube, but I think it's actually very few ideas that actually can continue to scale well. And even when it starts to do well, you put more money in and it starts to be a bad channel, right? So it's actually kind of an interesting exercise of like, you know, if something works for X, like how do you get to 10X and still have the same unit economics is pretty hard.

I have a question for you. On the $10 billion, it's a big, big valuation. How did you think about that? And how do you think about growing into that over time?

Well, I think the— I mean, going back to what we discussed, right, I think in the very long term, it will be a function of the company's sort of multiple will be a function of, you know, multiple of revenue. And the premium we'll get is based on us being able to grow fast or continue to grow fast and do it in an efficient way. The great thing about Notion is that we just operate in a very large market. Like, I think the, the different categories that we play in has like, I think we've barely scratched the surface on it. And so there's, you know, we're pretty excited to sort of like keep building towards that vision.

Does the valuation even matter if you're cash flow positive? If you're being blunt, valuation matters a lot if you're not cash flow positive because there's crunch time in 18 months when you're going back to the VC and your judgment day comes on your valuation. If you don't need to go back to the VC, I don't see a problem.

Well, valuation matters internally, I think, to employees. I think it matters that, like, you know, the stock that they did get is able to be valued that much and continue to grow in value over the years.

Is that a challenge with leaders today? You bring them in at a $10 billion price, it's high. Like seeing like, you know, 10x on that is hard.

I think it is a challenge for a lot of companies when you can't show them a path. And I think it was a bigger challenge in 2022. I think some companies have been able to sort of like show a path or have gotten there. But I think they're probably more rare than, than, than the number of unicorns that were sort of made during that time.

When you look back at your fundraising, what would you have done differently?

I wouldn't do anything different. I think we raised both of these 2 rounds.

How did Sequoia come together?

So interestingly, you know, when we did the COVID round in 2020, we really, really wanted Sequoia. Because again, like, if you think about the, the goal for that round was to get a stamp of approval so that we could, we could recruit and people feel like this is a safe company and there isn't a better stamp than Sequoia's. Right. And so, so we pitched them and actually we, we, we, we got a no that, that time in March 2020.

Was this from Pat Grady?

I think it's from the partnership. I think the person we had talked to there was Mike Vernal then, who was an early personal investor. And, and I think they actually wrote a very thoughtful note for, for why. In many ways, like it worked out in terms of us like getting to know even, you know, each other even more over the next 18 months.

And then with the next one, you came back and said, hey, we still want you.

Next one, we came back and, and we asked them. first, and them and Coatue, because I think Coatue had put a smaller check in the $50 million round. And so, so they came back and did a larger one, and Sequoia was the co-investor in that.

Do you find having Sequoia as an investor is a needle mover for a company?

I think it is probably the best brand. It, it— their, their record speaks for itself, I think.

What does it help most? Talent? customer acquisition, pure brand and marketing ego? What is the thing that is the needle mover for?

I think the thing I would say about Sequoia, having gotten to work with them more in the last few years, is that, you know, similar to how we demand excellence from our, from our employees, I think they demand excellence from their companies. If you like that pressure, if you like wanting to build a generational company. I think you get the best set of questions from them. You get a lot of really sort of nuanced feedback and data points from them. You know, right now we work with Pat Grady. I mean, Pat has seen literally every generational SaaS company closely, like really closely, right? Like he could basically like And everything is memory. So he can essentially tell you, you are where, you know, ServiceNow was like 12 years and 2 quarters ago. Right. And I think that's— I think it's like he's seen the movie so many different times.

His mind is so structured. That's what for me with him, like whatever problem you have, he'll break down it to like core component parts and then play it back in incredible clarity and structure.

And actually one of the things that I've also realized is like it's not just like business performance. One of the— I remember one quarter where we missed our— this was maybe like a year and a half ago or something where we missed a quarter where we sort of like missed our number. I remember saying like, oh, here are like 7 things we're doing to close the number gap. And I remember both Mike Vernal and Pat said, I think you guys are thinking about this wrong. I think the question is not whether you can hit this quarter or not. The question is whether you can actually really scale this product to 100 million users and beyond, because that's the future we see with Notion. It was a good reminder where it's like, wow, like they sort of believe in this long-term mission, you know, and they're like, they're sort of the long-termism is sort of like helped us recalibrate in terms of what we should do.

We mentioned Pat, we mentioned Index, we mentioned Coatue. When investors invest and lead and write big checks, they generally get board seats. You did boards a little bit differently. How did you do a board differently, Akshay?

Well, I think, like, you know, we talked about these rounds. These rounds were fairly low dilution. I think there's essentially 2 to 3% ownership that we gave out. And so, you know, we were able to essentially not give out board seats. I don't think it came from like a place of arrogance, but I think it just— it just like we were able to do it in a way that, that, that, that sort of like felt like we could almost recruit a board in the future, which we wanted to do not just because someone is investing money, but someone who could be a long-term sort of board, board member for us.

What do you want in the recruits that you have to your board?

So actually, like, this is something we've been thinking a lot about. And actually, it's actually not that different from thinking about recruiting an executive team. You know, I can just give you like maybe, maybe if there's like 5 seats that we would want to fill, I think I would want one person to be like a CEO whisperer, almost like a CEO coach, ideally like a former CEO who's done that job. I think CFOs always would like a partner in having an amazing audit chair.

Mm-hmm.

Then there's probably a person who's in go-to-market, and this could be like either someone who's deep in sales or deep in marketing, and you can pick whichever one you need, like you're going to need help with in the long run. Then there's the other, like the governance and like the compensation committee. is typically a person who you could match with your head of people. And what you could do if you design it this way, you could also, let's say, you know, 5th one is an investor who actually gives you like a macro perspective or how things are going on.

Mm-hmm.

But if you design this well, you could almost have a, like a one-on-one coach for your executive team to your board that you, that you sort of put together where they, as they're growing in their careers and they're sort of like, Figuring out the next phase and the next phase after that, they have an incredible board member who's investing in them. I don't actually— this is probably pretty rare. Like, I don't know another company that has done that. But I think a lot of this sort of came from first principles thinking, what would we need?

We built boards the wrong way. I lead your A, board Z. Someone else leads your B, board Z. Someone else leads your C, board Z.

People are rethinking what org structures should be and like how many people should report to you. So I think people should rethink what boards should be. There is an element of if you had to like recreate what a board meant, I think just writing it down. But people don't get to do that, right? Because I think, I think we got lucky in that the ownership and some of the cash flow positive really helped like not dilute as much. And Not need as much capital. I don't know. I also think like you know some of the investors I know, someone I really respect is Jeff Weiner, who was my old boss at LinkedIn. Ivan and I actually tried very hard to get him to be a board member at you know our first board member at Notion, and and he said no because in deep down he wanted to be you know the CEO's coach, right? And he said some of the board stuff around you know. I think requires him to think about the company before he can think about the CEO.

Sure, you have a fiduciary duty to shareholders.

Correct.

Which can be in direct conflict with your CEO coaching.

Exactly.

I want to do a quickfire round. So I say a short statement, you give me your immediate thoughts. Does that sound okay?

Let's do it.

Okay, so what do you believe that most around you disbelieve?

I think AI will create more jobs than it will kill.

I stalk your Twitter, so I know that you thought this was quite a good question. Uh, what's your favorite book written before 1956?

I've actually, uh, You know, with kids, sort of reread some of the Indian epics. There's a part in Mahabharata called the Bhagavad Gita, and some of those principles in Bhagavad Gita are so timeless that I think are worth reading again.

Best board member that you would most like to have if you were to choose one other than Jeff Weiner?

I personally would, would have loved Charlie Munger.

Yeah, that would be amazing.

That would be like, I guess, talk about like long-term thinking, long-term business building. I think sad that he passed away, but, you know, I think him and Warren are sort of like my, my heroes.

Did you ever go to the Berkshire Hathaway event?

I've been many times.

Was it amazing?

It's amazing.

I've always wanted to go. Most memorable first investor meeting?

So for me, I think I graduated 2010 and I won't go into too much detail, but I built this like small little app in my class project at Stanford. that became a company called Pulse. And I remember meeting an investor, Emily Melton.

DFJ.

I think, was it Mayfield then? And she went to DFJ and now she runs her own fund. And one of the things I realized as a student, the superpower of meeting investors is that what I saw in Pulse was like just another RSS reader. And what she saw in Pulse was this next generation browser for the iPad. And, and it really sort of made my idea like 100x stronger, just like having that meeting and having her talk about like someone seeing the vision even before you do it. I think that was incredible.

What's the most contrarian or unorthodox advice that you'd have for founders listening?

I think in general, I would say like almost all advice is genius for a subset of people and completely rubbish for the rest of them. I think you can take literally everything like, I mean, even founder mode, founder mode. Is really good if you have a founder who's right a lot. If they're not like, you know, God bless that company. And so, so I think I don't know. I think I've moved away from giving advice to, to sort of like more share my experience with what happened at Notion or Pulse, because I found that to be like, I think hopefully you can take the right learnings from them and apply it to what your situation is. Rather than a more generalized advice.

What have you changed your mind on in the last 12 months?

One of the things, I think my wife was right on this one. One of the things I used to do about a year or two ago was try to like pack up every hour of my kids' weekend with like activities. And I was like, oh, they can't be bored. Like they got to do this, they got to do that. And then, you know, we just spent like a month in India this summer. and they had no programming and they were just like sitting around with family. And in many cases, my daughter complained she was bored. But I think— I don't know, I think both of them grew so much with all these interactions. And I've realized that, you know, you don't— I don't know, boredom is good. Like, I think it's okay for them to like just, you know, not be like occupied every hour of the day.

What concerns you most in the world today?

I think this like general TikTokification of every social app, I'm really worried about that because I think every social app has become like 1 or 2 clicks away from infinite stream of viral videos, which I think is like just really sad.

Has it not helped Notion?

Has it helped? Yeah.

Like you have amazing community on TikTok and on a lot of short-form platforms. As I agree with you, but has it not helped?

Similar to this podcast, I think there's definitely better content out there. I'm not saying necessarily like Notion content is better, but how many people have controls over this information that they're sort of, you know, consuming? I guess maybe like they didn't have that even when they're watching TV or something. But I guess I worry on the, the thing that I worry about is like Like, it's just the consumption to creation ratio has, has gone out of whack, right? A little bit.

Like, do you think so? So you think there's now more consumption than ever? Like, the— because there's also more creation. Everyone's a creator. You can't walk down the street in London without seeing everyone creating.

Yeah, but creating what though? I think—

Oh crap, I agree. Yeah, but the ratio is not the problem.

You are right that I think more people are creating than ever before.

100%.

I think the question, I guess, I don't know, maybe I'm being cynical here, but I wonder what people are creating and what people are consuming.

So I actually tweeted this this morning. The top 8 enterprise valuations of edtech companies amounts to about $19 billion. OnlyFans enterprise valuation, $18.5 billion.

Yeah, I think there's something there where I don't know, I think the— yeah, I would love to see, like, in some ways, how do we make learning and education more what people want to do? And I actually think, like, I don't know, people watching this podcast hopefully learn a few things.

And I actually view it as like our job and our role to package that more efficiently for today's society. This gets taken and put into 100 different clips for 4 different platforms. And like, I have to move with the times to deliver my content in a better package.

Yeah. So I know, I guess, I guess you have me convinced that it's not all bad.

But your feed is what you make it. It's like life. If you go on my feed, actually, my feed is protein recipes, gym, Tony Robbins and inspirational speeches. Mine's quite uplifting. The trouble is that most people are perpetually like magnetic to, bluntly, crap, violence, and sadness.

Yeah, but I wonder if there's like the— I think that that clearly sort of resonates, but also like, like if you're just maximizing attention time, which these social apps are doing, it does sort you know, just sort of like spiral down to that. And so how do you like almost—

You have to change the incentive mechanism of the app.

Exactly.

And so you have to change the monetization mechanism.

Yeah, exactly.

And so, and yeah, I don't know if like, you know, which would go to an Elon view of the world though, which is actually moving to a subscription-based social network model and saying fuck you to advertisers.

Yeah. And I just sort of worry that I think the incentives right now at least for these companies that are primarily ad-based, it's going to be a hard one to move to subscriptions.

Would you let your children have social media?

No, at least not till when they're a lot older. Actually, one of the best things that happened this year in the last month is my daughter's school sort of banned devices in school, which I'm just really glad because once a month I would have a conversation with her about some of her friends wearing an Apple Watch or, you know, and I explained like, sorry, but we're not getting it at this stage. But now I don't have to explain that, which is nice.

A final one for you. What question are you not asked by hires, by team members, by investors, by people that you feel you should be asked more?

One of the things that I've been reflecting on is a little bit sort of like that, you know, the Steve Jobs speech around how you connect the dots looking back. I didn't appreciate it when I was growing up in, in this small city in Gujarat in India, how sort of growing up there and surrounded by friends and family there, how it would have shaped the things that I do today. And so I think some of those, some of that exploration is super fun to, especially as I get closer to 40. It's like, wow, like You know, all my creative genes probably comes from my mom, and all my business genes probably comes from my dad. And, and like all these different things that I did when I was young, uh, in some ways has made what I do today possible.

Actually, listen, I so appreciate you putting up with my meandering. You've been fantastic to have on the show. So thank you so much for joining me.

Thank you for having me.