Gokul Rajaram on one of the biggest mistakes startups and founders make, the role of board member...

Welcome back to another episode of Taking Inventory. This week, we are so excited to welcome Gokul Rajaram, who is a legend in the ad space and in digital. Gokul was one of the masterminds behind kind of what is now the best advertising business in the world, uh, with Google AdSense, was a product leader at Facebook, is on the board of companies like The Trade Desk, Pinterest, was at DoorDash and Square. Gokul, you've been kind of everywhere as either an operator or a board member or an advisor. We are so fortunate to have you today. So excited. So thank you for being here.

Daniel and James, thank you for having me. Really a privilege to be with you guys and excited for the discussion.

Yeah, well, thank you. We appreciate it. You left out he's also on the board of Coinbase to make it even more impressive. But, you know, obviously you've accomplished just a unbelievable amount in your career. But, you know, I think, you know, we kind of would love to start off as just like, how did you— how'd you get started? How'd you get into tech? Like, kind of what's— what's your origin story, um, for people who want to be like you one day?

Well, I, I basically got a couple of degrees in computer science, and my second degree was, uh, I got my undergrad in CS from, uh, one of the Indian Institute of Technology in India, and I came to the US for grad school, and I was in the PhD program in computer science at UT Austin. And in the summer after my first year, I got a summer internship at a company called Sun Microsystems, which was a legendary company. Vinod Khosla and Scott McKinney founded it. Scott was a CEO then, and obviously it's no more, but back then it was one of the hottest companies in the mid to late '90s. I was a summer intern there, and I worked on writing a bunch of production software that went into production. And I was so excited by the option to write software that that actually is used by people versus just in a research project. So after that experience, I came back and I told my advisor that I was dropping out of the PhD program, just getting a master's, and I wanted to write software. And, uh, went to join a company called— I've always been inspired by companies that build software that's available for consumers to use. So I joined an early internet service provider called Juno Online, which you might have remembered from mid-'90s, it was targeting AOL. AOL offered, back then it seems quaint, but you had to pay additional fees on top of it. I mean, they were basically an ISP, you know, and original ISP. Juno wanted to offer free email, so they basically offered the ability to just sign up and download your— it was back in the era of dial-up lines. So you would download, you would upload your email, the that you've written or composed on your server, you upload it to the server, it would download ads to you along with your email, and then the connection would go off. So there was— you weren't connected to the internet while you were browsing ads, you were like filling out forms in the ads, you're clicking stuff. So all of those clicks, impressions, lead form fills were all stored on your local device, and then it could be for days because you might not connect to the internet. And then when you connected it back to the internet, your computer, then we would upload it back to our servers. And then we would do processing of all the impressions and clicks from a few days ago, right? Think about that. That was the early days of internet advertising. And I was the tech lead for the ads team at Juno, which was doing this without ever— like, we literally had impressions from a few days ago, right? Think about that. It's crazy, but that's how it was. And form fields from a few days ago. And we would send it to— I remember Ford Motor Company did this campaign. We say, oh, this many people filled the form and then we send it to Ford. And then it was such not real time, but, you know, DoubleClick and Juno were the two big advertising companies back there. DoubleClick was also started in the late '90s and Juno. But think of it—

How did you, I mean, how did you convince advertisers in the late '90s like, hey, like do these ads, you know, you're used to magazine, newspaper, TV, do these ads in this thing called email and it may, you may show up in 3 days, you may show up in 7, you may show up today, like How did you even start convincing people?

Accountability and measurability, even though it showed up in 3 or 7 days, it was still better than magazine ads and other forms of advertising which were not measurable at all. So, that was the key thing. And they didn't, we didn't really focus. We typically said next day, obviously in some cases, long tail, it would be 3 to 7 days. Typically, it was the same day people would compose some email and then connect to the computer. It was not real-time, but it was still within a day or two, and it was measurable still. We would be able to give— I mean, think about it, back in the '90s, being able to see how many people saw your ad, how many people clicked on— the notion of a click itself was crazy, clicking on an ad and then filling out a form. So you actually get information on these people because Juno already had information, because when people signed up to give all the information, we knew their residential address, where they lived, etc. So you've got all this rich demographic info. So we were able to run a lot of campaigns. I think It was never, I think, and the company went public. But yeah, it was, you know, back in the day you had to come up with various metrics, impressions, clicks, and all kinds of things. DoubleClick was doing the same thing, obviously more real-time because it was connected to the web. But yeah, Juno was unfortunately the— I mean, we didn't pivot fast enough when Hotmail came on the picture and web-based email, Yahoo Mail and Hotmail came. And that, I think, was the challenge. And I think it really told me, I think, any— any— and AOL, the same thing. I think AOL didn't pivot fast enough to the web, uh, strongly. And obviously AOL.com was huge, but technology is all about constant change. And as a company, you cannot innovate. You, you— there is no given, there's no— I mean, look at IBM. I mean, yeah, all these companies that every decade we think of this company's unstoppable. Microsoft in the 2000s, absolutely, you know, we used to think Now, I mean, obviously they've come back, but everyone has to go to the wilderness. If you can't innovate and have compound innovations, you're going to get left behind. 5, 5 compound innovations, what you need to be a leader. 5 is what I've— after studying a lot of companies, you need at least OpenAI in AI. For example, I think if they just stop with GPT-1, they'd be nowhere. They just stop with GPT-2, they'll be nowhere. They stop with GPT, they'll be nowhere. GPT-4, ChatGPT, GPT-4.0, now They've earned the right with 5 competing innovations to be one of the top 2 or 3 companies. But even now they probably have to innovate 5 more times to be the leader.

That's great. Is that— and you've seen that just again and again. Like, are you pattern matching? Like when you see— I'm trying to think. We can use even like maybe someone like Snap right now, like, which is like, you know, kind of beat up in the press. But I think Evan has innovated, like for lack of, you know, anything else. Definitely has been innovations there. And so like, have you seen like when someone like that is showing a culture of innovation, are you like, like if they can get to the fifth, they got a shot?

Absolutely. I think ultimately great companies are built in technology based on— I think sales teams can only take you that far. I think you've got to have— sometimes you have to buy innovation, but you've got to either build or buy innovation, right? Facebook had an amazing act, first act with Facebook, and obviously Facebook itself had multiple innovation— newsfeed, photos, virality, all of those things. But then kudos to Zuck for going out and much in advance WhatsApp and Insta making those buys. And you hear internally that Insta revenues are now— sorry, WhatsApp revenues are now getting to the billions with messaging and so on. And it took a while, but now it's a billion-dollar-plus revenue business annually. And that's— so you've got to compound. Snap, I think I met Evan once or twice because Square and Snapchat did— if you might remember, they did this thing called SnapCash for Cash App. And so I think he spent some time in our office, sometimes in theirs, and I was very, very impressed. On a napkin, he could draw these designs, and then, you know, just brilliant. And I think that's the kind of founder you need who's excited by the notion of innovation, innovation's sake. Some of those won't pan out, but you need 5 innovations that actually hit. I would say each innovation— some innovations don't hit, like Google Wave, no one cares. But you need 5 meaty innovations that that hit— actually, that are used by people.

Do you think those innovations are driven largely founder-driven or culture-driven? Like, as you've kind of—

I think it's culture. It's obviously founder plays a role. Many of them are foundational innovations. Founder has set the vision, but the founder after a certain scale can't do everything themselves. So unless— and the founder can probably set a direction, but the details of the innovation matter a lot. The details of exactly how it's priced, in case it's a pricing thing, or how it's presented, How the UI is, all of those things. It is hard for a founder as something goes more complex. So, you've got to have great people around you who can take, who have the unique ability of taking the founder or the CEO's vision and putting it into the product in a way that's compelling.

And have you seen in your career examples of companies that kind of become kind of corporate sort of financial engineering almost based companies that are able to change and like escape that pattern and get back to like the innovation.

Microsoft is a great example, right? At scale, we've all seen it, right? For probably a decade, it was a company, I think, that was doing mostly financial engineering and living on the glories of the past and milking Windows and Office revenue. And with Bing, they tried, but they, they couldn't. They couldn't. And, uh, and then I think it just tells you— we mentioned the word culture— Satya Nadella, the first thing he did was reset the culture of the company. Reset the culture, put into place guiding principles around openness, collaboration, not having fiefdoms. And those ultimately are what lead to greatness, where people feel free. I think Microsoft have become extremely political, and I think removing the politics— obviously you can't eliminate politics in a large company— but removing fiefdoms, saying it's okay to embrace— go into the writing— we are not just going to be beholden to Windows, we're going to embrace Macs, we're going to embrace iPhones. I think I just saw that finally Microsoft employees are free to, you know, use iPhones as much as Android and so on. So I think those kinds of things open up, uh, what open up the sense of possibility for the average employee, because a lot of innovation also comes— got to be alert to innovations coming from grassroots. A lot of Square's innovations were grassroots. Cash App was from a hackathon. Square Capital from hackathon. A lot of those things are from hackathons. So, you know, you, as you get bigger, a lot of the innovations you've got to nurture and get— give people the freedom to dream.

You've been at, again, as we mentioned, both an advisor, board member, operator at a lot of big companies. Um, but I think, you know, beyond just being big companies, like Google, you know, kind of changed the how kind of tech companies operate. And obviously the founders were very involved and, and created a very unique culture. Zuckerberg has created a unique culture and is very involved in the business. Square The Trade Desk, Coinbase, all of these have very, very, you know, notable founders that are still in the operating seat, still very involved in the business. And so what have you noticed between the difference of like those types of founders versus, um, you know, maybe founders that, that kind of get the company to a certain, certain point and then kind of take a back seat, maybe join the board but, but hand over the reins? Like, is there anything that you noticed I don't know, just difference between those leaders and others.

The biggest interesting thing is that fairly early on, within the first 4 or 5 years, all of these founders brought in a second in command who was almost their peer, essentially their peer. If you look at Tony at DoorDash, he brought in Christopher Payne, who was a president and CEO, and Christopher really ran the business side of DoorDash, leaving Tony to focus on product. And, and really be the CEO. Similarly, Zuck brought in Sheryl fairly early on— Sheryl Sandberg— within the first 4 years of the company, 4 or 5 years, I think 2004. Sheryl was there in 2008, 2009, and it allowed him to really scale, right? Because I think founders are really good at one or the other. I mean, many of them are product engineering leaders. Jack at Square brought in Keith Rabois fairly early, and Keith was— I mean, he was instrumental in hiring many of the key folks and building a culture of just execution of the company. And even Larry and Sergey, they brought Eric Schmidt pretty early on. In fact, he became the CEO. So I think founders don't— the founders who want to be truly great, they don't want to, you know, they, they, they, they, they, they want to expand the pie, and they're not shy about bringing in— they're not, uh, I would say many of the founders who I think they want to have control, maybe the founders who— but these founders are truly great founders. Are fine with giving up, especially if they find the right person. Now, it has to be the right person, the right fit, etc., but giving up a chunk of the company so they can focus on what truly matters and having almost a peer who complements them. I think that's what you have to do. I think you can't— it's too hard a job to build a generational company by yourself. You can build a company to a certain stage, so you've got to— I personally think it's, yeah, The solo founder myth is over. Even solo founders have amazing second-in-commands around them, or, you know, amazing leadership teams around them.

Interesting. And for you personally, just given— and again, like, if anyone just goes to your LinkedIn, it's, it's pretty, it's pretty wild. But it, you know, you've, you've been a founder, you sold a company, you've been on these boards, you've done a ton of investing. Have you found, like, through all of that, like, you know, I guess like, like, do you see yourself one day like starting another company or like have you found that like you are kind of like, like more of a Kashero archetype? Like where do you kind of put yourself kind of in your head, how you think about it, like kind of going forward?

At this stage in my life and career, I get energy from helping companies. I realize that's why I call, you know, on LinkedIn, I call myself a company helper. There's nothing more satisfying as an investor advisor, even, even without any stake to in the company to just help a founder at some point with this particularly naughty or thorny problem, help them hopefully make some progress, connect them with someone who's maybe encountered that problem, and see the company and the founder succeed, or at least surround that problem. I think everyone says that, uh, you know, your founding experience actually really informs, uh, you know, how you think about founding. I was a founder during 2007 to 2008, 2010, during the global financial crisis, and It was one of the most interesting, uh, educational, also most challenging experiences I will ever have professionally because the funding markets dried up. It was extremely hard to sell anything to anybody. It was truly not just tech, right? It was a cataclysmic thing across all industries, across all economies globally. So it was very hard to run a company at that time, and that, that really shaped me. I also realized that One should only start a company when one has a problem one is so passionate about that one cannot sleep. I— a lot of people who worked for me, with me, have start— left on to join companies. I— many of them leave to join companies because they have a friend that they want to start a company with, and that's the wrong reason to start a company just because you have a friend. You've got to start a company because there's a clearly— you've it has to be authentic. The problem also can't be something you just read about on TechCrunch. It has to be something that comes of lived experience in an industry, in your life. And that's the other thing that I think, uh, really differentiates all these companies. I think if you think about Google and Facebook, both were started in university, and DoorDash— all three of them started in school. They were started basically because founders had specific problems, where Mark wanted to see what the Harvard yearbook was like and see the page— face— faces of all, all of his Harvard colleagues. And classmates, and he created Facebook. So I think creating a company to create a company is almost a cynical excess. I would rather— my first question therefore to founders is, tell me your founding story. And the founding story uncovers a lot of things. It uncovers why they're starting the company, why they are the right person to start this company, what the authenticity of their connection with the problem is, how the co-founders knew each other, and all of those things. I think those are very important and really put into place very early on the DNA of the company and what, what it will become.

And then beyond, I mean, once you get the founding story, I mean, then what, what's your kind of rubric to evaluate companies, whether you invest or advise or, um, you know, help the founders or want to get involved? Like, what, what is that thought process like for you at the early stage?

I have increasingly started to believe that companies fail because of failure to escape competition. I think it was a Peter Thiel quote. And what that means is, especially at the early stage, if you see 6 companies doing the very same thing or some, it's very hard to know. They're all good teams. So unless I've worked with the person or team for several months or years beforehand, it's very hard for me to invest. So increasingly, I, I've actually made this mistake where I've invested in a, I would say, a really good team in a space which I think is really good and they have the right, but there's 2 other teams or 3 other teams who are also authentically strong to compete in that space. And basically one of the other teams essentially becomes the winner. And so, as you know, there is in technology markets, there's a winner-takes-all phenomenon where the winner in a market, uh, is 100x more valuable. Look at Uber's market cap versus Lyft's market cap, $150 billion versus $5 billion, right?

It's crazy.

And even And so I think if you look at that, then it's very important if you're investing now, there are investments I will make just in people regardless of what they're doing, because these are friends, these are colleagues, I'll invest in them. But from a pure investment standpoint, there are two questions every investor needs to answer. One, is this a market with a deep enough profit pool? First of all, this is a good market. And there are some markets that you're too early in, and by the time, you know, it might never be a— it might be 20 years from now, it's a good market. Like grocery delivery is a great example. There was demand, but when Webvan was started in the late '90s, but it was not a good market then. It became a much better market 15 years later with the advent of mobile phones, on-demand labor, all of those things. So, is there a deep market? Is there a profitable? And second, is this, which also includes like, what is the secular trend that you're looking at? Is there something new that's changing in the market? Is this a good market emerging? Second, is this the right team and company to win this? Is this the right team and company to win this? So, that's So that's a problem in early stage today, in seed today. There's just every idea that you look at, every idea you got to do a quick Google search if at the very least, or YC company search, and you will find that 6 companies to 10 companies chasing the same idea. I mean, I met an AI SDR company the other day. I mean, that's a great space. I think SDRs, that job is probably going to be automated to some part by AI, but then 2 days later I met another AI SDR company, and then I feel like I have another company. Then let me go do a Google search. It was not a Google search, AI SDR. The first page is full of AI SDRs. So increasingly I am subscribing to, at the early stage, go as weird and contrarian as possible, even if it means creating a market and creating a category. Because at the seed stage, I think it's just too hard to pick if there are 6 good teams. There's competition and could quickly become a red ocean market with everyone just beating each other up. Anyway, long story short, at the early stage, I think I'm always excited to help founders, but if I see even two other— it's really venture-funded companies you look at, right? If there's legacy competitor, that's a great thing, 20 years old, that's ripe. Or there's no competitors. If there's three other venture capital companies or two others founded in the last five years, pause. At the same— around the same stage, or one stage earlier, one stage later. Just pause. It's just too hard. Yeah.

I had a conversation with a good friend of mine who's a pretty active angel investor in LA and he sort of echoed that, which was like, you got to invest in, at least in LA, because we don't have access to as much as like, really just like the sort of like sort of frontier tech that is up north. It's like you have to go invest in weird things. So he was like, his example was he saw a bunch of like AI contract, like optimization tools, you know, for like finance teams. And he was like, It's like, I don't know, it's just like we gotta go find something that's super weird and then that could work. Who knows?

Yeah, I think if you look at some of the best investments the last two decades— SpaceX, super weird. Palantir, super weird. Anduril, super weird, right? If you look at those companies, I increasingly feel that pure software is no— it's almost a down-the-fairway thing, but it's so— it's, it's just everyone believes it. And so you're going to see You know, that's the thing. YC is creating a bunch of 120 companies, 120 founding teams who are— who you might think of ideas, but really on day one they all discard their ideas, most of them, and are basically searching for ideas. And guess where they go to, right? They look at what the hottest trend is and they figure out what industries there are, B2B. They systematically go through it and then they, you know, they focus on idea. And so there was, I think, one of the classes a couple of classes ago had 5 or 6 companies doing AI for customer support, for example, which is again an idea that there's like 12 companies and then we don't know who the winner is going to be. Yeah.

And, you know, you, you are such a, you know, such an active investor, but I'm curious, you know, are you part of a fund or do you have your own fund, or is it purely just you're going out and doing early-stage investing directly? Um, and if you don't have a fund or part of a fund, you know, why, why has that been kind of a decision on your part?

I think still thinking through it. I think still, uh, you know, I think doing some venture partner stuff and so on. I think, uh, you got to find the right folks who complement you and also the right strategy. I do feel again that the pure early stage strategy is— you've got to be very careful and thoughtful. So I think still thinking through that, um, But yeah, it's, you know, I think, but I have decided that I do want to be an investor, whether investing my capital or there's capital over the next, you know, I think 20 years of being an operator. Let's now, you know, hopefully bring some of those operating mindset and chops to investing and learn. But again, it's fun to learn, fun to be in a new space, and fun to have a beginner's mind.

I think that's a good thing for founders, that that's your mindset and direction.

Thank you. Yes.

And kind of switching gears a little bit, just on kind of another aspect of your career, but just, you know, being a board member of these, you know, massive publicly traded companies, you know, I think, you know, I have no exposure to that. I think most people don't, you know, what is that like? How's that experience been? And like, do you feel like, is that a, is that a place where you can make a lot of impact?

Like, you know, yeah, I think it's, it's a lot of people ask me about advice around being a board member. I advise them you have to always think of two things when being a board member. They sound very glamorous, but you realize that you only enjoy it if it's in a space and a sector that you feel excited about, because you spend a lot of time with the company. And if it's, say, in a sector that you're not at all excited about, that you don't care about, it quickly becomes— you just start zoning out and you don't engage as much and you can't add value as much to the company. So I tell people, and the second thing is you've got to have really a lot of respect and admiration and just learn, and hopefully vice versa, from with the CEO and the key leaders of the company. So you've got to have a good relationship with them. And I think those two matter a lot. So don't join a company where you're not excited about the space and where the CEO and you don't, because ultimately this— you're going to interact a lot with the CEO and then of course the other board members also. Where you look around the table and you feel the other board members are folks you can learn from and so on. And so I'm lucky that the boards I'm on, The Trade Desk, the public company boards, The Trade Desk, Pinterest, Coinbase, are all spaces I'm excited about. I go in, I'm constantly thinking about those spaces. I'm constantly sending ideas to the, to the executive team. I engage outside of the board meeting. That's the other thing. These should be companies where you don't just go to the board meeting. It's only part of half of the work of a board member. A lot of the work happens outside of the board meetings where you You're on WhatsApp or Slack channels with the company and you're sending ideas, referring, trying to help close candidates, having dinners with the exec team, all of those things. So that's been the biggest— the biggest learning for me has been an understanding of what board members think about. I think the board role over the years, I think, has gone from somewhere— I think 20 years ago it was more command and control, the old school mindset was. Now it is an advisory role. And the other difference is, I think you guys will both appreciate this, I think there's a lot of value. I think board members are very financial focused about 20 years ago. Over the last 10 years, there's been a movement where almost every company has product and engineering leaders on the board. I think that's for the good because companies are realizing that they need that DNA on the board, not just investor DNA on on the board or finance union on the board. So you do see a much more diverse board from an experience perspective. Finance will be there, of course, but also you'll see voice of the customer, folks who come from that customer's architect, product, engineering, all of those different skill sets that are needed at the company level are also increasingly represented at the board level.

And have you found that, I'm hearing you describe it is very interesting, that kind of evolution of board and the board role. But I imagine too, if you're getting product and engineering leaders, customer leaders, someone like you, like those are operators, those are people that have been in the trenches and have run businesses and have had P&L versus maybe strategy, traditionally strategy or finance teams that were a little more removed from the business itself. Have you found either for yourself when you first started boards or kind of new board members that it's hard to decouple that like operator mindset from more of an advisory strategy mindset?

100%. It's a great point. I think as a first board, you'll always find yourself always trying to be more prescriptive because you think that's what the company wants you to do. But no, the company doesn't want you to be prescriptive. It doesn't need to be prescriptive. Ultimately, the team that's running the company is the executive team. What they want you to do is to speak up, is to ask questions, is to ask the right questions, and to challenge the company's thinking to make it more expansive. but also to let them know, like, on one side, make it— there should be board members who expand the company's thinking, and there should be other board members who make sure the company knows the guardrails to operate within. And I think there's a push and pull at the board. I think if everyone is rah rah rah rah, go expanding, the company could do things that are undisciplined. Everyone's like, well, just look at EPS, earnings per share, and grow profits, then you have no one pushing for growth, for expansion, to enter new markets. So I think there's a push and pull. But to your point, it has to be done. In a Socratic way. It has to be done, oh, you should do— it can't be, you should do this. Never. I think I had for my— I've been on like 12 boards over the years. First two companies died, etc., etc. But went from, hey, let's do this, or you should do this, to what do you think about this? Have you guys thought about this, etc.? It's all phrased, framed, you know, in a way that really gets them to spark thinking. Or, you know, I saw this company doing this. Have you considered something like this? It's just to spark discussion. That's the goal. And then you've got to be open. The board also has to, you know, hey, can we have a discussion next time with this topic and really get the company— let's have a discussion around it. And I think that's, that's basically good companies now, really. Again, you know, I think, treat— encourage the board, board to companies to treat the— think of the board as advisors who can really provide value through their experience and and help the company just think through one or two— because most of the companies focus on execution. Let's be clear, right? The board's job is to, of course, monitor the results of execution, but really what lies ahead. Keep urging them, pushing the company. What lies around the corner? What lies one or two years out? Are we prepared? Because a board is going to be a long-term— is going to be a steward. Really, we represent the shareholders. Is this— are we creating shareholder value in not just a short term but in the medium to long term? So are we balancing all those three?

Yeah, you know, as you say that, one thing that sort of comes to mind, and I know this is probably, well, it's, you know, you look at Pinterest, Trade Desk, and Coinbase, like three companies that have been super strategic, like, you know, Trade Desk, you probably can't comment on stuff, but it's like, Trade Desk, like, it's amazing that this DSP became this big, right? Like no other DSP figured out how to do this. And like, Jeff and team figured it out. Coinbase was, you know, 2 years ago, you know, or 18 months ago, you know, you know, whatever the stock was, and like they fought through it. And now it feels like they definitely are on the right trajectory. And then Pinterest too has been through like all these different iterations. But if you look at it now, people are starting to get this is the intersection of retail media and advertising. And so have you seen— is that another example of like, of leadership founders like having a plan and sticking with it and getting buy-in from the board? Or is that a function of the boards being, you know, these kind of, you know, sort of somewhat democratic open spaces where everyone could kind of strategize together? I don't know if there's some sort of lesson in that.

Yeah, I think those three companies are really good examples. I think each of them, I would say each company is a special snowflake, right? But I think there are a few things that— few threads that come out. The importance of focus. One of the things that Trade does it really well, I think, is that they, from day one, they always focus on serving the agency and being a tool for the agency. They never tried to disintermediate the agency and go to the brand direct. And I think many— they had many competitors in the early days, as you know, DSPs. But the DSPs, I think, a, either tried to go to the brand in addition to the agency because they wanted everything, or they tried— they succumbed to the allure of basically also trading themselves, becoming an ad network, because that was easy revenue, right? Let's run some dollars. And I think not doing— not succumbing to either of those, even though it took longer to penetrate agencies, it paid dividends over the long term. So I think that focus was really critical. The same with Coinbase. I think they, they didn't abandon crypto. Obviously, that was their DNA. They basically— that's the core of the company, and they stuck with it. And they know, I mean, if you are— I think if you can plan for cycles, crypto does go through cycles, and you plan for it. I think that— so I think, I think the best CEOs, what they do is they communicate to the board ahead of time a strategy, and then of course the board gives feedback on the strategy and helps them ask questions, but then they execute on the strategy. I think Bill Ready at Pinterest, who's a new CEO for the last year and a half, has done the same thing. When he came in, he articulated a very clear strategy and, and basically the board asked questions, and I think he tweaked it a little bit, but then he's executed. Ultimately, great teams set a clear strategy which is differentiated and builds on their strengths, right? Pinterest strategy is not to be the same as Snap or, or as Twitter or as Google or as Facebook. It is to be— it is to be Pinterest and lean in on what matters the most. It's the same as Facebook Ads. I remember very well first version of Facebook Ads was really a copy of Google AdWords. It was basically Google AdWords. If you remember this from Shift, I mean, you could just enter keywords and, you know, that didn't really work well because it was not Google. Uh, when you, when you, uh, yeah, I think that— and so then we changed it to focus on what mattered about Facebook's identity and being able to attach identity to the identity that others had. So custom audiences and really being able to deliver on those objectives. And I think that changed the trajectory of, of the advertising business. And at that audience— audience thing has now been adopted by, by everyone, uh, you know, all ad platforms. I'm very proud of that piece. But yeah, I think, uh, I think you've got to lean in. As, as you go to grow to be a company, there is temptation to do new things, different things. If you do a new thing, I don't believe in, uh, you know, conglomerates which do things that are completely disconnected with each other, from each other. I think everything you do, every new product you have, every direction you take has to leverage your strengths, your uniqueness as a company. There should be a reason why it's part of this company versus a standalone separate company.

And yeah, and it is interesting. I mean, those 3 companies that you just mentioned, um, Facebook, Trade Desk, and Coinbase, I mean, all kind of transformed their respective industries and were almost counter to to the macro incumbencies. I mean, Coinbase bought— is fighting regulation, right? Um, The Trade Desk has gone very publicly about the open web and the premium web, where, you know, there's been this trend over the last 10, 15 years to more walled gardens. And they've stayed very true to their vision, very vocal about that vision. And then, as you just described, Facebook, I mean, transformed advertising to be more interest-based and graph-based as opposed to keyword or kind of search intent. And so I'm curious, just from your experience from those three or others, like, what is that like inside or talking to the leadership teams as you are fighting— I mean, you're fighting waves, right? The natural tendency from— if you talk to consultants or kind of early investors, it's like, ride a wave, right? Find the wave, ride it, and grow a business along it. Whereas these are really fighting, um, the natural tendencies of the markets. And so what, what is that What is that like?

And I'll add Square, right? Square was not supposed to exist. I mean, there had not been a payment company created for decades before Square came on the picture. And in fact, I think by the network Visa and Mastercard rules, the, the, the whole notion of connecting a piece of hardware to a phone, that whole thing was disallowed. In fact, you got to break the rules. Is what I mean by that is, in fact, I wrote a blog post on this, and that's— I really was exemplified by Square, where Square realized that a lot of these things are not laws, they're rules. The difference between laws and rules— if you break a law, you go to jail. It's made by Congress, it's made by the government. Rules are things created by companies or by industry associations, in many cases to keep, to keep power in the hands of incumbents or to keep insurgents out. And so I think to foster insurgency, you've got to break rules without breaking laws. And so your general counsel is a very important part of the picture. Right? Square, I think we had counsel who was— who were very, very good at understanding, you know, is this really a rule or a law? And many of them turns out were rules. Almost in every country that Square went, there was an oligopoly of banks or incumbents who had rules to prevent entry of new, new entrants into the payment space because they owned the space. And so Square had to figure out how to navigate that and break rules in, in ways that, you know, wouldn't land us in jail but still would let us build up. Otherwise, if you just wait around, uh, you basically will never be able to even launch your product because the rules are against it. So I think you've got to just break the rules.

And once you kind of like know the rules that you want to break, yeah, I feel like maybe Trade Desk is a really good example of this, and Coinbase. It's like they also kind of identified like an enemy to some extent. And is that—

people love the fact that you stand for something and you get to stand for something. Who doesn't like standing for openness, for, you know, financial freedom, for transparency, for serving the small business? So you need to stand for something and make it, like you said, a movement. Uh, exactly. And I think it's, uh, there's, there's books on this, I think. But, but you're right. I mean, it's, uh, there's always— I think even Intuit versus Microsoft back in the day, You stand for something against the empire, essentially.

Yeah, it's—

you don't even start out by thinking that way, but you just positioned and your customers start thinking of it that way. And, you know, you basically become hopefully the face of the movement. Square definitely was, I think. But you've got to, I think, think— I think I would always say instead of— I think it's best, and that's what I think Trade Desk, Conversa have done, is focus on the customer. And then the customer is the one who tells the story and who basically stands for that. Because you don't want to stand explicitly against something, you want to stand for something. And so what you want to stand for is financial freedom, as the case of Coinbase. What you want to stand for is openness in advertising, as the case of Trade Desk. What you want to stand for is SMBs. And so I would say standing for something is better because it automatically paints whoever is against you as the against, but you are the for. That's a more positive way in some ways of framing it. And I think that's what you want, because if you're only against, the question is, what are you for if you're against something? So it's better to be for something, which in and of itself definitionally might be against something, which is not great.

Yeah, I think I love that idea of just like the insurgency, right?

These companies are the insurgency. Great, great, great insight.

And so I mean, I guess moving as we, as we look to kind of wrap, I know kind of we want to be conscious of your time, but as we look to wrap the conversation, like, what are those new technologies or those new companies that you're excited about that as we think about them as like insurgents, like, who are the new insurgents, right? What are the insurgencies? What are the markets that are being attacked right now, um, or where there's opportunity for that innovation to take place? Like, what are you most excited about?

I'm most excited about— obviously AI is going to be an important part of it, but I'm most excited about how AI impacts the physical world. In other words, I, for example, uh, 2 days ago met an AI law company where it's not software for lawyers, but it's actually a law firm which is built ground up using AI, where they have a small number of lawyers, but they have an AI layer on top where all cases, all jobs they get in are first processed by AI and then in 20-30% of cases, the human kicks in and there's human review a little bit. And so what they see is the cost of, uh, the cost per job of a law firm at a traditional law firm in the US is $500. This company has a cost of $1.59 per job, $1.59, which is 300x cheaper than the law firm. So think about the compression that's gonna happen. Obviously it's early days. They're still looking for license, but they're quickly getting customers. And I think it's gonna happen in every industry. Where I think this is what I was saying, software might not have a moat anymore. What might have a moat is a vertically integrated company that has humans and software together, uh, that are delivering the service. And initially humans might be 60%, software would be 40%, then over 2-3 years software 60%, humans 40%, and then 10 years from now software 80% or 90%, humans 20%. Customer support, obviously we are seeing, uh, massive shift there where humans were, you know, 80% or 90%. Now humans increasingly are 50%, software is 50%, and you will see software becoming probably— so I think you're going to see AI employees and AI, what we call now, I'm sure you've heard this term, service as a software, as legal service. This is why I think companies might get to a point— you hear about, you know, hopefully the emerging companies with 5, 10 people you know, at a $100 million revenue scale or even a billion-dollar revenue scale. Because all those services you want— oh, you want a legal service? Here, just submit this and you'll basically get a certified— not just a ChatGPT-like thing, but it will be legally certified that yes, this is represented liability, all those claims are. Then you want, you know, accounting service? Here, here you go, just upload this. So you can basically run everything in an outsourced way. You just build your product, even product building. It's like we saw— I'm sure you've seen this— Upwork and Fiverr are two marketplaces where people put jobs. We have seen that the number of low-cost jobs there is shrinking, low-paying jobs. Why? Because those are, I think, going to AI tools at this point. They're not going to human freelancers anymore. So everyone has to up their game now because AI is taking over the low, low-skilled jobs in every vertical, including, including software development.

And given that, you know, if you were like 23 today, like just out of college, what would you do? Like, given that that's the landscape, it's like, do you, you know, it's like kind of like, do you tell, like, do you be a PM? Like, what would you, what would you do given the sort of this future that you kind of just laid out?

I basically, I've always felt that early in your career, you want to build a few skills. You don't want to go too niche. You want to build analytical skills, product building skills, even sales skills, marketing skills. You want to build 3 or 4 different skills. I don't think you need to build all 4. You need to build— I think you need to build a deep set of skills either in product development or in sales and marketing. I think either in building or selling, right? Those are the 2 fundamental skills. You need to spend 4 or 5 years building one of those 2 skills after, and ideally building it with great people. I think most importantly Pick people that are amazing, that, that almost are like so good that you would work for them for free in some ways, or very low pay. It doesn't— should not pay. Work for great people and build deep skills. After 4 or 5 years, the reality is product building skills will adapt to the age of AI, will adapt. Just like, you know, 20 years ago it was a very different product development environment. Today it's different. 10 years from now it's going to be different. Similarly, sales and marketing is— think about sales and marketing when, when Juno existed or DoubleClick, you had to go and call on every person in person. Now it's a completely different space. In 10 years, it's going to be different. But if you have those core skills, no one can take those away from you. Those are skills. And then learn how to learn new things. That's the other thing. I think we all need to become good at learning, because if there's one thing we've all seen, the pace of new things coming, pace of new technology development is going to accelerate. So be adept at learning in that space you're in. So I think you've got to think of this either as a builder or a marketer and seller. You've got to be one or the other. And for ex— and then I think every company has both those. And I would say then build a startup, I think. But you've got to first— I always say build a startup in college or build a startup a few years out of college. Don't build a startup immediately out of college because you need to build some skills first. Build some real-life skills, work with some great people, look at the definition of— understand what excellence means. In terms of hiring, executing, all of those things. So work at an AI company. I think work at any good AI company. The success of it doesn't matter. Get exposed to what AI is about. Start thinking about AI and build that skill in product development or sales and marketing, and then go from there. Work at 2 or 3 companies with great people.

Gokul, I think that's a, that's a great segue as, as we look to wrap. I think, um, you do a ton of writing and teaching, I think, about a lot of these topics, whether it's sales and marketing culture, kind of early stage growth, operating, just a host of topics. So where can listeners read some of your writing, follow you on any of the social channels, or learn more about your background?

Oh, thanks for saying that. I'm always excited for folks to hopefully find some helpful content. But if you go to Gokul Rajaram on Twitter, that's my Twitter handle, or I should say X handle. So that's where I post most. I also post on LinkedIn, but Twitter and LinkedIn have very similar content. I cross-post on both. And then if you search for my name, you'll find about 14, 15 Medium articles I wrote, which still a bunch of startups ping me about implementing them, which are more longer form articles. But X is where I— it's just easier and faster to post almost on a daily basis there versus writing a long form article. I've seen ironically that it's easier for me because of low barriers to entry to write a 500-word thing on X than sit in front of Medium or Substack. It's somehow— I have writer's block when I open a Medium or Substack. When I open up Twitter, it's very— it's much easier to just type something out, and before you know it, it's like 300-400 words. So crazy how that works. Just changing how you interact the same content, you feel like, oh, it's, you know, it's just going to go into the ether versus it's something that's like an article you're writing. It puts more burden on it.

Yeah, definitely. But Gokul, thank you so much for joining us today. We'll share your site and your X account with everyone so they can get in touch. But thank you again.

That was really thoughtful. A great set of questions, Daniel and James. Thank you.