Secrets of Tech’s Top CEOs | Gokul Rajaram on Google, Facebook & Square

This unpopular take is meant for one person, Gokul Rajaram. So Gokul has this post on titles not mattering, and I could not disagree more. And this is Gokul Rajaram who is wrong, just to be very clear for people who are watching this episode.

Oh my God, okay.

I just think Gokul is so nice. I want to get him to fight and get him to come on our show. He refused to come on our show. Maybe this will get him to come on our show. The only few people in Silicon Valley who go on first name basis where you don't need the last names, Gokul is one of them.

Many of these companies are toy projects. I mean, when I think about all four companies I've worked at, Google started as a Stanford research thing, no intention of being a company. Facebook started as a Harvard thing. No intention of being a company. I think Paul PG is probably right in some ways, but again, I don't agree in the absolute theory of the founder. Sergey just had a beautiful understanding of products intuitively, where Larry was a technologist, technologist. Chamath before had been calling for several months to join Facebook. I kept saying no, no, no, no, no, no, no. DoorDash still, I think, would have the same interview question for everyone. They would give you $100 and say acquire as many customers as you can in one day. The true genius of good founders is when to shift into micromanagement and when to delegate. When there were crises, Mark Mark Zuckerberg got directly involved hands-on and micromanaged the hell out of it.

Ladies and gentlemen, we have a treat today. Somebody who is on the Mount Rushmore of Silicon Valley. In fact, you know, it's kind of, there's a little statue of him above on top of all the other Silicon Valley Mount Rushmore imposters. I was trying to figure out how to introduce this person because In one way, I think he has had the ideal career in Silicon Valley, you know, and it still keeps going strong. He has done it all. He has founded companies. He has been an angel investor across a bunch of interesting companies that you would've probably heard of. He has worked in some of the most iconic tech companies of the last 15 years. He has been in all sorts of situations, taken companies public. You know, when you have these lifetime achievement awards at the Academy Awards, like this is the kind of resume to speak about. But more than that, this person is a dear friend and we've always kind of tried to get him to come on the show and he's finally, finally relented after a lot of blackmail from us. So on that note, Gokul Rajaram, thank you so much for coming on the show.

Thank you, Shira Meenati. Thank you.

I'm so excited to have you. You know, all the accomplishments, including like, you know, board roles, board member, but I think for us, the most impactful has been, you know, we are in a few WhatsApp groups together. We love hearing from Gokul. And also I think every time we have, at least for me over the last few years, and Gokul doesn't even know this, but when I have this like inflection point in my career, like Gokul is probably one of the first person I think of, like I have to call him. I have to go figure out what I should do with my life, with my career. And he's always been there. He'll always, whether it is South Indian restaurants in the Bay Area, or whether I should take a specific role at a specific company, he's always come in with the right advice for us. So thank you, Gokul, for being on the show.

By the way, I swear we did not prep for this particular bit, but Aarthi stole exactly the line I was going to use up next, which is when I think about the last few jobs changes that I've had, Gokul has actually been the person I've called every single time. And Gokul, so So here's a conversation I have on my iCloud Notes. It is from October 3rd, 2017. I've written down notes from, it says Gokul advice. Okay. And this is because I was contemplating taking a job at Twitter and it was a big step up. I was going to run a large organization and I was going to work for somebody that you work for. And there's a bunch of good stuff in there, but you know, the thing which really stands out to me is you basically said, make every change you want in the people changes in the first 30 to 45 days and just get on with it because people are going to judge you very, very quickly. And there's a bunch of other good stuff in there. So anyway, Gokul Rajaram, thank you. You are so spot on. But, you know, maybe what— it's one interesting place to start because you and I have, and Aarti have worked for some of the most interesting founders in Silicon Valley. And one of the topics of the hour, thanks to Paul Graham, is the so-called founder mode. Where some of the people we work for has come up. Now, one of the ways I want to ask you about it is because what is your reaction to founder mode, but also what is your reaction to founder mode in terms of you being an executive who has worked for them in close capacity and led large organizations for them?

Well, first of all, thank you for having me. It's like I said, it's— I just love chatting with both of you and speaking with both of you, and it's a treat for me to be here. So I think Founder mode is a great one because as we've worked for executives and leaders or founders, as I said, who've basically, if you look at founder mode, what's the definition? I think of it as being closely involved or directly involved and keeping a tight grip on the company even as a startup grows. Management mode may be the opposite of founder mode and that's basically hire good people, let them do their jobs and get out of the way. I think like with everything in life, I don't think there's a black or white. I think it's gray. I think, for example, at Facebook, when there were crises, Mark Zuckerberg got directly involved hands-on and micromanaged the hell out of it. Then we were out of crisis. I remember when the launch of Google+ happened, this was in 2010 or 2011, I think, there was a lockdown basically at Facebook where the whole company shut down for several weeks and Mark micromanaged a set of things that Facebook had to launch. Before he allowed the company to get out of lockdown. Basically, he was the PM for the whole consumer product at that point. But on the other side, for most of the company's life while I worked there, Mark basically delegated to us, you, me, Aarthi, Sheryl, others, and we ran different parts of the product and we did our work. So I think the true genius of good founders is when to shift into micromanagement and when to delegate. And I think you can't always run the company in one mode or the other. You just switch between modes. But I think it's knowing when to— Jack, the same way. I think Jack Dorsey at Twitter and Square, he micromanaged the hell out of certain things that he cared deeply about. Cash App, for example, he was embedded with that team on a daily basis for the first 6 months or maybe a year. But then once he figured out it was working, he slowly receded and let the team do their thing. So I think it's everything in life, there's gray. There's no black and white.

How much of this, the founder mode, you know, the current topic du jour, it's taken, you know, the Twitter universe by storm. Everyone's talking about it, especially you're seeing a lot of founders talk about it. How much of it do you think realistically is about not having the right execs in the right place? And these are not bad executives by any means, but not having wartime executives during the wartime of the company or vice versa, right? Like you just have probably the right, not the right fit. How much of it is that versus what you seem to say is for 6 months or a particular timeframe, yes, you can get into this like quote unquote founder mode, micromanage, and then pull back. But a lot of the arguments on Twitter and everywhere else seems to be this is how founders should be. Micromanagement is a very good thing. And I wonder, and just a question I had is on how much of it is just not having the right people to delegate things to?

I think you're right. If you think of what I always think of life or things in terms of decision trees. I think if you look at the top order bit, it is when to switch into management founder mode and when to be in management mode. I think those, that's the when, but then for it to be successful, if the founder switches into founder mode and it's not the right time to switch or their skills are not suited to driving that particular problem, it's going to fail. Similarly, like you pointed out in management mode, you switch into management mode, but if your team is not the right fit, if your team is, they're not the right fit for the job, either they hire the wrong people Or they're at the wrong stage. Maybe you hired too many late-stage execs in maybe what's a mid-stage environment. Or if the context is evolving while the leadership mode stays rigid, for example, if the company's going through a transition and you don't have the right skill sets to manage to that, it'll fail. So I think there is a when, and then there is what does it take for each mode to be successful. I think each of them can fail. You could switch correctly, but still you may not have the right people, the right context, et cetera, for it to succeed.

I think one of the reasons I think this has got a lot of people so pissed off and you could disagree with this entire framing. I think there's one camp which believes that over the last 4 or 5 or maybe more years that there has been a rise in the PMC, the middle management, the exec layer at various tech companies. And just with the use of the acronym, who may not understand what it takes to run companies, especially through hard times. There's another school of thought which maybe thinks that there is almost an obsession with the great man theory, but applied to technology, that founders and CEOs are the only people that matter as opposed to any team member below them. So when Paul Graham, for example, wrote that piece, which kind of sparked it all off, he basically says, and I might be misquoting, that a lot of the management that comes from large companies are very, very good professional liars. I think he might have said it exactly words to that extent. I'm kind of curious to get your reaction to that because I think you are right in terms of people know when to step back and step out. But was there an explosion of middle management and upper management who didn't know to do the job? Are founders right in trying to step back in and are they right to do it in every single domain even when they may not be familiar with it? I'm trying to get you to offer some spicy takes over here, Gokul.

I think I don't like absolutist statements. What I disagree, I think Paul, PG is probably right in some ways, but again, these absolute statements serve no good because they, I think, influence impressionable founders to behave a certain way all the time. The reality is I can't imagine Facebook being built the way it was without Sheryl Sandberg being a close partner to Mark. I just cannot. I think she was as critical to that face of Facebook as Mark was and so on and so forth. I think similarly Google with Eric being there, and Larry Sergey needing that mentorship to grow. At Square, it was Keith Rabois along with Jack Dorsey. At DoorDash, it was Christopher Payne along with Tony Xu. So every company I've been at, I've seen that there has been a strong number 2 or number 1 prime, we should call it, who supplemented the founder. I don't know Airbnb's details, but I bet the other founders, or there were people there without whom the company wouldn't have flourished. Yeah, I don't agree in the absolute theory of the founder.

Well, absolute takes are very, very good for getting reactions online.

Reaction, that's right.

But okay, so we might edit out the part where you didn't say absolute things and we'll just edit in the part where you say absolute things. Okay, but so you have been a conciliary, like a trusted exec to many of these folks, right? Jack, Mark, because you built out advertising at Facebook for many years. In fact, you know, just for fun fact, Gokul helped recruit me into the ads world at Facebook. And then immediately after I joined, he left.

So I knew— I knew ads was in good hands with you joining. So I worked this down.

We didn't insert that Michael joined me. I was like, I took it personally. I took it personally. I was like, the week after I started, Gokul was like, I'm out. Right. But I want to get to that later. But I'm curious, like, if you look back upon these executives that you work for, and then also before that, you helped build AdSense at Google. And really, I would say pioneered how a lot of monetization works on the internet. Let's walk through each of them, right? Like Larry, Sergey, the senior executives at Google, they've been studied, they've been talked about a lot. What did you observe from them up close? What were times when you had interactions, were you able to influence them, change their minds, or they influenced you?

It was interesting. I think Google was the seminal point in my life in some ways as a product person because it was The most fun, I almost say the most fun I had because I was an ICPM for half of my time at Google. And I always feel being an individual contributor is when you really have your hands on the product. As you start becoming a manager, unfortunately you get one layer removed. And I had the most fun when shipping products myself. And in particular for Google AdSense, Sergey was our executive sponsor. In fact, the idea came from him because he basically realized very quickly as soon as AdWords launched in 2002, he realized that, hey, just like AdWords is all about taking, or AdWords or Search is all about taking keywords and figuring out webpages that match the keywords, we should do the opposite. We're already basically taking webpages and figuring out the keywords that match them and finding ads. And one of the most interesting lessons I had, which I didn't internalize till a few years later, was when he nixed something we had built for a long time. He used to attend, we were heading towards launch, and I'm dating myself here, in January of 2000, in June of 2003 when we were going to launch Google AdSense, and it was March and we had built— the way AdSense worked is websites apply to be admitted to the AdSense program and that's what we built and we were building. And so there was a big approvals queue. We had this ops team that was ready to approve websites based on a long list of criteria and we basically were reviewing it. And then Sergey walks into one of the meetings he was attending. He was like, what's this approval queue? It's done. We proudly said, yeah, we built this great queue to approve any website that comes in. He's like, why the hell do you need to approve websites? We're like, what do you mean? You know, you can't let any website with NSFW or violent content, all kinds of stuff, get onto AdSense, to Google to run our ads. Why not? He asked. What do you mean why not? He's like, look, didn't you consider the fact that they could apply as under a benevolent website and then after you approve them, they can change the website content? You're like, no, that's true. And then he was like, you know, what you guys are missing is the number one thing that the website cares about is making money fast. The first thing they apply and I want to get them to see their dashboard immediately and see that they're making their first dollar, first $2 within a few minutes. They put the JavaScript on their website, it should show. And what you're doing is you're saying, okay, now it's going into the approval queue and you might hear back, who knows when. You have them right then. Show them the money right then. So I want you to kill the approval queue. I was like, what do you mean kill the approval queue?

Yep.

Kill the approval queue. So that was, I mean, we killed the approval queue and it worked because what happened is he actually said that Google in general is built on this philosophy where even AdWords, you could actually back in the day set up an ad with, for a keyword and it would start running immediately because there was an instant psychic gratification. To seeing your— you would search for that keyword and see your ad. And for the first 100, 200 impressions, it would run, and then it would go into an approval queue to make sure there was no copyright or other violations. And the same thing happened with that. Once you get— because the reality— so I think it really solidified a key thing around product-led growth in my mind is that you cannot have barriers to the aha moment. As you guys know, the aha or the magic moment for any product is when the user gets hooked after a certain experience. In Uber, it was watching The driver come to you. In DoorDash, it was when you get the first delivery. And Facebook, it was getting to 10 friends. And so your newsfeed just populated. So you cannot have any friction, any barriers to getting to the aha moment. We never thought about it that way, but that's basically what it was. Sergey just had a beautiful understanding of products intuitively, where Larry was a technologist, technologist. Every feedback we got from him was, why is this so small? Why aren't you thinking bigger? Why aren't you thinking bigger? Why aren't you thinking bigger? Well, Sergey, it was all about the, he really, I mean, he had just incredible product sensibility. So I learned a lot from them in different ways. But that magic moment thing was something that stuck with me because he killed a lot of work, but he made the product significantly better as a result.

I'm curious how Google was in that era because you were a little earlier in your career. You were not the mythic legend. The only few people in Silicon Valley who go on first name basis where you don't need the last names, Gokul is one of them.

Somebody says, Sridhar Menon and Akthiya have two others that if you had to meet me inside—

But thank you. Thank you. And but you were a little earlier. Walk me through how it was to interact with Larry and Sergey? Right? Like how was debating? How was discussion? Did you feel like, hey, I could challenge them? And how would you do it?

It was pretty amazing because it was Larry and Sergey for many meetings and then Eric would join them for some meetings. And so sometimes 2 and sometimes 3 people. Our VP of Product Jonathan Rosenberg, and then my direct boss Susan, they were, I mean, generally, I mean, there was really no barrier between them, between us and Larry, Sergey, just like in the days of Facebook, I think, and I was there and you were there, you could just directly go in and talk to Mark. So they were super accessible. They were just sitting very similar to the setup that we had at Facebook. You could just go and talk to them. And what is crazy was that Sergey would sometimes be, They had set up like bikes in one of the rooms. There was a bike inside, you'd be biking and we would be presenting or talking. And they didn't like, one thing I realized that, you know, I think leaders don't like formal presentations, good founders, because they realize that formal presentations hide sometimes imprecise thinking. So they really many times would say, okay, stop this presentation. Let's just talk about what you're building. So I was kind of nervous initially because I was used to, presenting formally. And then slowly I lost my fear because I realized that they truly want to just hear the unvarnished truth. And they never shied away from tough, tough news. I mean, that's the thing. What they didn't like was you giving good news and it didn't matter because you always— initially I was trying to sugarcoat stuff for them. Then I realized that they were too smart to be BSed. And so you just give the bad news upfront. The other thing I realized was that just like Marc, They basically had the most risk tolerance of anyone in the room. They were willing to risk it all amazing number of times. And we all were much more risk averse than them, as founders. And I think that's the thing about great founders. As the company kept growing, they were willing to make massive bets and massive risks. When they bought YouTube, we were like, oh my God, this company, they had no monetization. It was under massive lawsuits from Viacom and they paid $1.65 billion to buy it. And Google it was a good chunk of Google's market cap. And you were like, what the heck? Again and again, they were willing to bet the farm on things that, and that's a hallmark of great founders. I think that's founder mode, to be honest, more importantly than anything else in me where they're able to make, I think that's a challenge that a CEO who's not a founder faces that they don't have because they feel themselves beholden to shareholders. While the founders, like they remember It was nothing a few years ago and they're perfectly willing to roll the dice. I think Elon does the same thing. He's perfectly willing to roll the dice again and again and make company-making or company-destroying bets in crazy ways.

Yeah, a couple of stories. One, Brian Armstrong came on our podcast a little while ago and he talked about how Coinbase went through some really dark times during one of the crypto bear cycles. And he talked about how he thought to himself, you know what, worst case, I built the company from myself and my laptop in my bedroom before. I can do it all over again. And I just don't think even the best hired CEOs, and there are some really good ones, and I think sometimes in Silicon Valley, on Twitter, we tend to maybe diss the hired CEO, even, but even the best of them can't do that because they fundamentally haven't had that experience. There's just something unique there. I wanna talk about Mark and you to Facebook, but One of the things that always struck me about Mark Zuckerberg is when you are interacting with him, I agree with you that you could have a very open conversation with him. But I think the subtle interesting thing that he did, and I don't think a lot of the others, you know, great CEOs sometimes do, is he would tell you very, very quickly where he stood on the spectrum of the decision you're talking about from all the way from, I don't care what you're working on and sure, I'm gonna indulge you, please feel free, go have fun, go do it, thank you for the status update. All the way to the other end of the spectrum, which is there's a piece of paper in Delaware which says I own this company and run this company, so please do what I say, right? And there's spectrums in between all the way from, I let you overrule me, but you better be really sure all the way to I'm CEO. And I thought all this, Zuck was very, very good about telling you where he stood on that spectrum. So you knew even as maybe an intern or somebody new to the company, you knew the framework of how to engage with him. And I always think about that. In terms of how to engage with somebody who might have a big power level disparity with you?

I think it's a good point though. I do disagree that other CEOs, I think he was exceptional. Larry and Sergey were also very good. You knew exactly where you stood. I mean, you could talk to anyone at Google. There was, I think the, look, I think the best way to engage with all of these great founders who want to hear the truth is just tell them the truth and be ready to, I think the other one is you've got to really hear and listen to their feedback. One of the best examples I think was the foundation of most of Facebook advertising is something called custom audiences, which you probably remember where I think we, and that actually came about through Mark. He's a learning machine. He's a learning machine. What happened is Mark Pincus at Zynga was one of our biggest advertisers at Facebook. So Mark Pincus was talking to Mark Zuckerberg and he was complaining about Facebook ads and saying, why the hell can't I reach my customers? Because Zynga was a very whale-oriented, a company like most game companies are. I want to reach these whales and target them. Why can't I reach them? I know you have them. And Mark Zuckerberg came to us and said, why the hell can't he target his customers? So that was the orientation. We were like, oh shit, okay, he can target their, they can target their customers. They just need to tell us who their customers are. Initially it was customer IDs and because Zynga already knew the customer IDs because they were on the Facebook, they were a Facebook app. But then over time it was other ways to identify customers, email addresses, phone numbers, et cetera. But that was the whole genesis of custom audiences. And now it's a foundation of all of Facebook Ads. And it also was copied by Google, Twitter, and everyone else. And that was all because of Mark Zuckerberg. When I first met him in 2008, he had no idea about advertising because it was a pure consumer company. I met him in 2010 and 2011 again when we joined. 2010, he had absorbed so much about advertising. And the first year I felt his— so he was a learning machine like me. No one else. He just learned at a rate that was incredible. So much so that his idea was what underlay what Facebook ads was. So, but I think at the high— so you've got to listen to him. I think I realized after that experience where I'm like, he's not just saying it to say it, he truly means it. And he actually said, I want you to figure out a way. And he would remember it. He would remember it because he also had a great memory, almost like it was incredible. I don't know if it's like one of those, what do you call it, those camera-like memories. He would remember the next time he saw me. What do you think? Because if you try to not address the feedback he gave you last time, he would remember and he would bring it back to it. I think that's the other thing that you just got to be straight up. You can't hide, you can't dissemble, you can't BS them. You've got to just take their feedback and be direct and say, here's why it's not working. And he would, I forgot the, I think there's one or two times where I convinced him what he felt or what he thought was incorrect. But it was not my opinion versus, it was using facts, using data and using data. That is the only way to convince them. I think otherwise, if it's their opinion versus yours, guess what? Their opinion is going to win.

Every single time when there was a quarter and you had to make the revenue number for the quarter and maybe the revenue was looking soft or you're not gonna make it, somebody working with Dave Vayner, who was CFO then, or somebody in AdStar, would pull out like a doc, which would be like, these are the levers we can pull to make the revenue up.

Susan Lee, Susan Lee, who's now the CFO.

CFO, shout out to Susan Lee. Who just sent me a selfie from Heathrow Airport with her photo on it. So thank you, shout out Susan Lee, right? Our favorite CFO for that and many other reasons. But back then, and so we'd pull out this doc and it would basically have, and this has been 11 years, I'm sure nobody at Facebook would get mad if we were telling this story. So, and what the doc would have is all these ways where Facebook could make revenue, right? It would have things like lower the auction floor, it would have show more ads, you know, all these kinds of levers. And somebody would rank it from most desirable in terms of experience or revenue catalog to least desirable. And I remember one time, you know, I think somebody had proposed, this may get very deep in the weeds, but that's what we do on this podcast. Somebody had proposed like showing ads in between every 10 feed story posts, which was, you know, we would get ads every 10, pretty sure. And Zuck came back very strongly and he said something like the extent of, look folks, I don't trust your numbers on how people feel about sentiment, how commercial Facebook is. You guys show me these things, but I don't trust that you guys are dialed into how people feel. So two things. One is since you're— I don't trust that, I'm going to basically order you to go build out these frameworks. Feel free to pull some of these other levers, And finally, since I'm the final arbiter of taste, I'm just gonna make a qualitative decision. And I always think about that because he gave clear direction. He said, these are the rules of the road, this is where I'm gonna make a decision. And to his credit, he was perfectly right. Facebook was not tracking how people were feeling about how commercial Facebook getting, and they actually went on and built the all their entire sentiment framework. So I have many of these moments from Zuckerberg where I'm like, wow, this is how you both have strong opinions, but you also give the rules of the road for your exec team. Okay, but I want to kind of get to your story because between Google and Facebook, you went off and built a startup, right? And so talk to us about Chai Labs, talk to us about your story there, and now looking back, what you did right and what you might want to do wrong.

And also why. I mean, you had a really great stint at Google, and there are very few people I've seen who sort of have this like big company experience, and Google at that time was not very big, but still like very successful, feather in your hat kind of thing, and then going into the startup side of things. So what was the motivation there and how was that whole experience of Chai Labs?

Crazy enough, I think I always tell founders that you should not use the same motivation that I had. My motivation was to start a company with my brother. Crazily enough, he was getting his green card. He was one of the best engineers. Anyway, he's still at Facebook after acquisition. He's been there for 14 years now. And I was like, okay, this is a chance because he was leaving, his company had been acquired by Cisco. He was leaving that after his green card. So I think it was a wrong reason to start a company. That said, I had a lot of fun, but obviously I think you should only start a company when there's a problem, when there's something you're trying to solve versus, hey, I want to start a company. So I've had many people who worked with me, for me, et cetera, who've gone off, I want to start a company with my buddy. I'm like, please, Don't make this mistake. Just because your buddy is here and you're there, you just want to join together and start a company. That's not the reason. So I think we didn't have the right premise around which to start a company. And therefore the other thing compounding it was the global financial crisis. We started a company in the teeth of the GFC. If you remember, I mean, we raised our round was despite not having a good idea. I mean, I don't even remember what we pitched. We pitched this NLP mishmash of things, verticalized NLP of some kind to like some of the top VC firms. And I think they were already there, they just wanted to put money in. So we raised an uncapped convertible note. I mean, there was no safes back then. Uncapped note, a few million dollars. And then we had to turn away many people who were willing to put money into an uncapped note. And that shows you how publicist that environment was in 2007, just before everything shut down 9 months later. And so it's the worst time to start a company when you're raising in a publicist environment, your mental attitude is all about good times are going to last forever. And then 9 months later, everything comes crashing down. But thank God that happened because if that hadn't happened, we would've kept going, maybe raising some more money because we built a consumer website. Back then there were no apps, iPhone hadn't released yet. And we basically got some revenue, got to I think half a million or a million. MAUs through SEO and some other hacks. And we were keeping on going, but then everyone stopped giving you money. And basically I had to raise money from a hedge fund, which was one of the most painful experiences because they put in structured things that I didn't even know existed. And they, but I had to get that. And I had to, I basically floated the company for many months with myself basically. And so when Facebook came, Sheryl and Chamath before her had been calling for several months to acquire us basically because I knew Chamath from before and I'd worked with Sheryl to come join the ads team. And I kept saying no, no, no, no, no, no, no. Because to be honest, because of hubris. I think that's the other thing. I think the number one lesson I have is, number one mistake is I would've accepted the Facebook offer at least a year before I did and not wasted another year of my life. And I think any of the founders now who basically are trying to make a go of it, I think there's an opportunity cost to all of the things you're doing and you really need to know, is there a there there? If there's not a there there, there's a huge opportunity cost to keeping on doing it, hoping for something to happen. And that's what we were in the mode of. We were growing it, but it was clear there was not going to be a very big outcome. And in the meantime, we were losing people. I think the thing that catalyzed me was when our one of our key engineers told me that he was leaving to join Facebook. And so I was like, oh my God. And then I was leaving the office that day and then I suddenly get a call from Sheryl again on my cell. She said, this time, Gokul, I'm not going to take no for an answer. I'm like, guess what? Let's talk. Because I knew that as soon as this person left our company, it would be a— because we were a small company, 10 people, it would be a quick cascade. And then Facebook was the one company that was hiring. And Basically everyone would go to Facebook and then what do we have left? So thankfully we were able to, we had some partner and we were able to use that to negotiate hard and get a good deal. What was most interesting was Vaughn Smith was the VP of Corp Dev then, and we basically got into a big discussion on what the value of Facebook would be. This was before the Yuri Milner round where Yuri was buying secondary at $10 or $12 billion. This was prior to that. So Facebook was valued at, it's kind of unclear what it was valued at. It was somewhere in the single digit billions, something like that. And so we somehow, we were like, look, Facebook can become a $20 billion company in the next 5 years. And one was like, no, $30 billion. So we finally converged to, okay, if they enter China, they can get to $30 or $40 billion. So we basically did all the valuation and how many shares we got based on Facebook being a $40 billion company after China. China will add another $10 billion. Of course, China never happened. And so it just shows you how We all underestimate these things, right? Yes. We underestimate how compound, even at Google, I still remember sitting with David Thacker. I don't know if you know David Thacker. He was a good friend. He was Greylock then. I think he's back at Google now. David and I were sitting a year after the IPO and saying, wow, Google is at $20 billion. I think, you know, I don't know how much longer it can go, man. I think we should like think of selling shares. A bunch of us used to get, and so it just boggles the mind, both companies. Seeing them at $10 or $20 billion and now at $1 point something trillion or $2 trillion or $3 trillion.

So I, I was going to ask you this a little later, but maybe this is the right time. Okay, this happened in 2008. If you had to overlay that incident, that time frame, to now, right, like a lot of companies, especially in the AI world, being able to raise at, let's just call it, very, very hefty valuations, what advice do you have for founders now who raise capital Should they be going off and taking an offer from the 2024 version of Sheryl?

First of all, forget what you raised. Figure out what the company is going on a go-forward basis. So I think too many folks have too much attachment to what they've raised. Now, there might be some situations where you can't get out of it and your founder and your investors control the company, but in most part, you can actually do a down round and so on. So first and foremost, the path you are on, does it lead somewhere? And by somewhere, I mean, does it lead to a meaningful company in some way, shape, or form? And you've got to be honest. And I think you've got to have a moment with your advisors, your founders. You've got to sit down and understand. If it doesn't, then you've got to find the best home for the company. If it does, then take a down round, take whatever capital you need to get there. Because don't let the sins of the past hold you hostage when you're building a good company. In fact, I read this survey a few months, a couple of quarters ago that companies that took a down round, their employees are the happiest and the founders are the happiest. Why? Because they know that now the company's more fairly valued. They're not worried about, oh, this Damascus sword is going to fall and kill me in some ways. Now they know that it's going to grow and they know that, okay, now we've set a real clear lower bound and it's going to grow from there and you get all that crap off the table. So I would say take a— but first and foremost, is this a battle worth fighting for the next few years? If it's not, hold, take the best exit possible and be part of a bigger platform. Because I do think the power law holds true even more true today than it ever has been. A smaller and smaller number of companies are going to be the bigger winners because especially on the enterprise side, even on the consumer side, there is something I read called FOMO now, which is fear of messing up instead of fear of missing out, where CXOs want to consolidate stuff into one platform or a few things. They don't want to buy new software. They just don't want to mess up. And so they're opting for the safe choice. They're opting for ServiceNow or Salesforce or whatever the big platforms are. It's harder and harder for individuals. And similarly for consumers. I don't want another app. How many apps do you download? I mean, yeah, maybe we do because we're investors, but as consumers, you add and delete apps like candy in some ways, I feel. There's only a few apps that get most attention.

Look at the top 10 apps.

I'm sure you've seen this, right? If you look at the apps that go in and out, Lensa, AI, and so on, they are there for like a few weeks. After that, go. Enduring top 10 apps are old companies.

Yeah, I mean, this was something, since Sriram had asked this, I sort of wanted to ask in a much more broader lens, right? Like you're seeing this AI wave, and Gokul Rajaram, you're right in the middle of it. I've seen a lot of you talking about it on X, on LinkedIn, everywhere else. I'm curious to get your take on in this world of AI companies, AI-native startups. What is the implication for these early-stage founders? What do you see happening for the incumbents, the big companies? And what do you think is going to happen for VCs, investors who are sort of betting in this space? I'm trying to kind of figure out like this all-round lens on what happens from here on in this whole wave of companies started about 12 15-ish months ago. We don't know what this bubble's like, when it's gonna pop, what that's gonna look like. But what's your take on all of these, you know, set of individuals, customers as such?

I have a very strong take. One, foundational models are going to converge around 4 or 5 companies, and I think there's no more opportunity for new foundational models to be built, you know, general foundation models to be built. I think it's going to be, yes, there might be built, but they will be swallowed up just like Character AI. Basically, the models have been swallowed up by Google, and now the company is a consumer company building on top of others' models. That's, that's going to happen more and more. There's going to be 4 or 5 survivors. Again, at the chip layer, I'm going to invest in a company called Groq. We'll see if they really supplant NVIDIA. They might be some competitor. I'm not calling for a stock upgrade. Application layer is where most of the action is going to lie, I think, for us investors. And there, I strongly believe in the verticalization of everything. What I mean by that is that I don't believe that horizontal apps, especially new apps, are going to win at all in any way, shape, or form. New apps, for example, I'll tell you, I think customer service, customer service AI is the number one use case outside of engineering AI within large companies today. There's like 15 or 20 customer service AI companies, including, Sriram, your firm has led rounds. They're all doing a few million revenue, but I know incumbents now, which are about 5, 10 years old, They were customer service SaaS companies. They have now released a customer service AI product. That AI product is doing more revenue than all of these startups combined within a year. Why? They have the data, they have the customers, they just migrated them. It is so easy to build these things now that if two kids in YC can build it, telling you these companies can just as easily build it. And so I mean, what I mean by that is there is enough horizontal incumbents who are aggressive and who understand exactly what AI, the threat that AI bodes for them. That is too hard to be a horizontal company. By horizontal, I mean taking on a function like customer service or accounting, which QuickBooks, I'm certain, is building QuickBooks. We'll see how that, or NetSuite or whatever the case is, or even engineering. We'll see engineering is of course its own battleground. Instead, I think you're going to see verticalization. By that I mean, like I saw a company that was doing content management for real estate. Not for real estate, for construction. Because turns out, content manager construction is a very, very specific thing where you're managing RFPs and proposals and all of that stuff. Similarly, CRM for lawyers. I think you're going to see many more niche companies like that that take a horizontal and append a vertical to it and go deep in and don't just build an app, but go all the way down and own end-to-end that whole process where they, and I think that's the future of the industry and that's the kind of things I want to bet on. Where you go deep in a vertical. I think I don't believe in horizontal startups. I mean, obviously there'll be some that win. Most are going to be, most are going to either die or be swallowed up. I don't believe in functional companies at all, functional app companies at the early stage at this point. I hate to say it. I mean, they're great companies, but I think they just face too, instead I believe in the more niche the vertical, the better for me. I am just going niche and deep vertical. Even for horizontals, I want a vertical slice of a horizontal. That's what I want.

And then what do you see on the consumer side of things as such?

Even harder to bet. Even harder to bet. Like I said, Lensa AI, I mean, they were great apps. I mean, a bunch of these apps, but they were there for, you know, I think consumers have lost a lot of money trying to bet on Series A and seed companies till something gets to, I mean, we shouldn't even get out of bed till something gets it to 10 million MAUs and maybe even 100 million MAUs because that's the price of entry. I'm on the board of Pinterest, which is 500 million MAUs. And 500 million MAUs is like when you start entering even there, you look at Meta, right? How big is that? And so, I mean, the scale needed to get to these things is, I will never forget Yik Yak, okay? I don't know if you remember.

Oh yes, yes, yes.

Hello, I remember Yik Yak.

There are a couple of variations, but you probably, the original college anonymous posting one, yeah.

Correct, Yik Yak, similarly, our Yeah, exactly. DKIAC was funded by Sequoia. I remember very well talking to them in 2014 or '15. They were riding high. They had raised the Sequoia round. I don't know why I got connected to them. Didn't invest for some reason. A year later, we bought their assets at Square and they became the Square Atlanta office. That's it. I don't know what happened between them round raising at Sequoia and them becoming the Square Atlanta office. Between 1 and 2 years, that's what happened. Shit cycles so fast in consumer, so fast.

But I think there's a few things happening. One is the incumbents are very, very smart and they know how to adapt to things. Like if you have a new UX metaphor, Instagram is going to stick it on the top of their app almost immediately. And so is every other platform. That's number one. Second is I do think there's a little bit of customer consumer exhaustion over trying these things and bringing your friend graph to these things. Nikita Bhaiya had this great point about As you get older, you really don't want to invite your friends to new things. And there's only so many apps that you want to invite people to. And iOS and Apple have made it harder and harder and harder to invite people to essentially social experiences. And that's gotten really, really hard. And, but I do think, look, there is some promising spaces. I would say AI friendship is very interesting. It's weird and raw and some of it is maybe not something you can open up on your screen in a work context, but there's something interesting there because people are actually interacting with these things for huge amounts of time. But you're right, it's absolutely, it's kind of a weird space for consumer. Though of course, a friend of mine will point out that OnlyFans might be the best consumer app company of all time, just that obviously it may not be investable for all the obvious reasons. I want to ask you maybe a flip side of what you talked about in terms of the fundraising for AI companies and also fundraising and your raise funding and you're kind of just floating around, which is in 2020, 2021, the ZIRP era, so to speak, there were a lot of companies which raised very, very quickly growth rounds and, you know, built sizable businesses, especially in the SaaS sector. I would say some of these companies have large amounts of money, but they're not exactly growing at the way that they could. There's a lot of haziness over what is your path to an exit, thanks to, you know, all the blockers with IPOs and acquisitions out there. Now, I want to make it a little bit focused on the individual, which is you and I probably know a lot of people or get asked advice from a lot of people on careers, right? But the specific scenario I want to put to you, put to you something like this. You are age early 30s, mid-30s perhaps, right? You are a director of product or director of engineering at a CDC SaaS company. Raise a lot of money at like maybe a billion, billion plus, billion minus circa 2021. It's growing but kind of flat. You know, you're kind of getting up there, you're getting off chart, but you know, you just, you just kind of floating. Now usually around that age and at the point in your career, people have, you know, they have like one of three choices they really want to think about. One is I'll stick this out. I've been here for 2, 3 years. I have an organization, I'm respected, I like it here, right? Let's just kind of see where this is going even though the growth might have flattened out. Option two, I'm getting a bit older, right? If I am going to do a startup, now is the time because if I get older and, you know, I have kids or life experience come by or whatever, I may lose the optionality to do a startup. You wanna do a startup or join a very, very early stage one, now is the time. Number 3 is let me play it safe. Let me go join a FAANG company, you know, make a million or 2 in RSUs, immediately liquid, you know, help pay for my down payment in San Francisco, right? But I probably had variation of these conversations where I'm trying to help people talk through these questions. And I'm sure you probably had version of these conversations. Now, of course, it is a very individual preference. You can say, well, kind of depends what you want. But I still want to be like, I don't know what I want because I'm kind of stuck. What is your advice? Because I know you've probably had these conversations with people. What is your advice to folks who are in this situation?

It's a great question. All of us have faced it and have had converse with people who faced it. First, I would eliminate option number 2. I think joining a super early-stage company is tantamount to basically being a founder yourself. I feel it's basically taking the same amount of risk. As the founders, but with, you know, 100 the reward. If you like the idea, you should just probably create a better version of the idea. But in general, I think you shouldn't join a very early stage company. I, I don't think the risk reward is worth it. Um, you should— first of all, you should figure out what your situation at this company. The objective— two objective things to look at are one, how's the company doing, and then how's your career at the company doing. And both matter. Uh, if the company is actually not going to go anywhere, then the reality is, and you need to again have the same conversation that your CEO is probably having with their board. If this company is not growing at a rate that, that makes you confident that there is going to be an exit and you already spent 2.5 years, that means you have 2.5 years of equity vested and you have, you know, a bunch of things you accomplished. I think it's time to leave. Second, if the company is doing well but your career has flatlined and your learnings have flatlined, That's the other reason to leave where you basically feel that you are basically layered above and below this. You're not really growing as a person, as a leader, you're not really accomplishing anything. That's another reason to leave. I do feel like regardless of the company, if you don't feel personally personal growth, you should leave. And then the question is where should you go? I think at that point, I think then the, I think you should only go to a FAANG personally I feel if you have not had a brand, a good brand, on your resume because the reality is this company, you know, is probably one of 100 companies and no one really knows what they do most likely. And it's very hard for people to understand, are you good or not? So I know many people who needed that credibility of working at real scale and they went back slightly later because they'd worked at a bunch of startups and they said, you know what, 10 years of my life I've just worked at startups that have not gone anywhere or that have moderate exits. Let me go and get myself credentialed and work with the great network. At a Microsoft or at a Google or at a Facebook, something like that. So typically you advise people to start earlier at these companies and then join younger companies, but people have gone mid-career in their 30s to them. But if you've already worked at a couple of these companies and you already have the credibility of having done well there, I would go for a mid-stage company. I would always choose a mid-stage company. And I feel someone said this, I think, who said this? In general, You can think of life as having 10 shots of 4 years each. Assume you stay for 4 years at a company and you work for 40 years, 4 years each, 10 shots. Basically, if you are a good learner, if you're good at learning, you start getting better and better identifying what are the characteristics of a good company, a good founder, and a good role that matches what you do. And I think I have to assume that a smart person after doing, playing the same thing at join a mid-stage company, 3 or 4 times will hit the jackpot, both in terms of the role and in terms of the company. For me, I worked at a failed optical networking company when I joined, left the Valley, or when I came to the Valley, that was my first job. And second job was Google and third was Chai Labs, fourth was Facebook. So it's basically getting better and better identifying. I've seen this time and again. Maybe you fail, your first company you join fails, you join a second company, you don't make the same mistake and choose the company. And then maybe it still fails. Almost certainly if you're smart, the third company will succeed and will do well. But I am all about mid-stage companies. I think mid-stage companies offer the best risk reward. They offer growth, but they also offer lower downside and they offer the opportunity to have impact and growth with good financial upside. We all joined mid-stage companies. I think, Shilam, when you joined Twitter or Facebook, both of them were mid-stage companies. And mid-stage for me, maybe they were slightly later, but mid-stage for me is around 500 to 1,000. It's like, oh my God, that's a lot of people. But reality is great companies are 5,000, 10,000 people. 500 people is still, I think 50, 100 people is still a little bit early. Maybe you join between 100 and 500, but I would never join a 50-person company unless it was WhatsApp or something where they can scale infinitely without adding people.

Well, I think, I mean, it's hard to tell these things ahead of time. I do think— I think there is a version of this which is really playing out right now for a lot of people because a lot of folks raised a lot of capital about roughly 2.5, 3 years ago, and they all have a lot of money left and they have sizable businesses, but they're not growing. And I do think there's a set of people who are directors, VPs, and are like, okay, how long do I wait? Do I take a shot at it now? It's interesting that you say that option 1, building a startup, is not for someone because I do think there's a— Because I think for a lot of people, if you are part of Silicon Valley and you hear the lore, you hear the stories of the Jacks and the Elons and the Marks and the Lattes and the Sergues, it is very hard to not aspire to that status.

But you need to have a specific idea. You need to have a, you know, you need to have a problem that is so, like, that is like basically consuming. Can't sleep. Yeah, exactly. Like if you think about how both Square and Twitter started, right?

Yeah.

Many of these companies are toy projects. I mean, when I think about all 4 companies I've worked at, Google started as a Stanford research thing, no intention of being a company. Facebook started as a Harvard thing, no intention of being a company. Square started as this very specific problem that Jack and Jim had where they built this thing and it became a company. DoorDash started as a Stanford, you know, class project. I think if you try to explicitly engineer a company by reading about a trend on TechCrunch, I think those are hard to pull off.

Can I disagree with you there? What is the company— let's think about the two large foundational model companies at the moment, OpenAI and Anthropic. The origin story of one is you basically get a bunch of people with Sam and Elon. And look, there are like n versions of the origin story.

But they had a big vision, right? They wanted to solve AI. They didn't actually read about a trend. It was before it became fashionable. And that's the thing, right? Because before, there's no TechCrunch article on AI. All those parties scoffed at it when they started in 2017. People were like, oh yeah, this— even I know so many PhDs who were like, we all did computer science. AI was a failed thing. Neural networks were failed. They started then. And so it was being unconformist. Unfortunately, what happens is most PMs are conformists. So they'll start a company based on what they read in TechCrunch.

I think actually that's the real truth. Unless you have some deep faith. And belief outside of I just want to be a founder. Like, the problem you're trying to solve is I want to be a founder. So that's the problem, you know. You need to solve something else, and it has to come from within you, almost in some sort of like a spiritual, ideological way. And that, I think, is going to motivate you.

I see this, um, even, even when I was starting companies, right? Like, sometimes you just see like really bad advice being given around, right? And it's like part of it is, um, you have to start companies in the hot themes, in the hot topics. Like that's like, say, you know, general sort of, if you talk to a bunch of folks, there's like, what do you read on TechCrunch? What other people are getting funded on? Those are the things that you should start. Which, you know, to me, those are never true. Like you look at like the Ubers and the DoorDash. DoorDash was actually in my batch of Y Combinator, and they were so different from everybody else who had come on board. And, you know, at that point I remember even through the application process and interviews, people were like, apparently they want to deliver food to suburban areas. Like, this just seems like such a joke. And so a lot of these ideas stand out as just like absurd and ridiculous because it just stands out so differently from what is consensus and what is the theme right now. The other thing I see with founders is it's a problem that they deeply have and they deeply solve. There are always exceptions. Where I've seen a couple of companies where the founders would just be like, we looked at all the problems that are sort of interesting and we just A/B tested a bunch of websites, a bunch of ideas, and we came up with this thing. Very, very rarely I've seen that work, but more often than not it's this like sort of this nagging pain, this problem that they just can't like forget about, all-consuming. It's like this thing that they would like, if you sit with them for dinner, lunch, whatever, this is the only thing that they want to talk about and it's like sort of annoying. And these are the people who build that and figure it out because you're going to have these huge ups and downs through the stage, multiple stages of the startup building side of things. And these, like the belief in solving the problem is a thing that tides them over, that makes them feel like they can go do. And to me, that is truly the founder mode side of things, right? It's like no matter whether there is a recession or your first employee quit or whatever happens, you're going to have to like see it through because how can you not?

It's the Brian quote that Sriram had earlier, right? The founder mode, that's a founder mode statement. I would go back to sitting on a laptop if that's what it takes because I believe in this so much that I'm going to still build this company all over again if it comes to that.

Yeah. Okay, I'm going to do something. I'm going to screen share and play you a video and get your take on it. This unpopular take is meant for one person, Gokul Rajaram. Okay. So when you see, for the viewers to see this episode, Right? Like, make sure to tag him and to make sure he sees it. He's a good friend of mine, so which is why I have to call him out when he's completely wrong. And so Gokul has this post on titles not mattering, and I could not disagree more. Titles not mattering is one of these things that people tell you to make you feel good about yourself and them. So Gokul's take, and this is Gokul Rajaram who is wrong, just to be very clear for people who are watching this episode.

Oh my God, okay.

I just think Gokul is so nice, I want to get him to fight and get him to come on our show. He refused to come on our show, maybe this will get him to come on our show. Before we get into fisticuffs over here, Gokul, summarize maybe your tweetstorm on titles and I can tell you how wrong you are.

No, but it's not even just a tweetstorm, this is, you post this every few years. In the history of Norway. You've written about it, there's a Medium post about it. You write about this every few years.

Look, I think again, I don't want to be absolutist, but my take is that founders should not award titles too quickly. In particular, VP and director titles should be avoided being awarded for as long as possible, as long as possible. The earlier you introduce them in your company's life, the more pain you're going to have in fending off people. Who basically aspire to just be a VP, director, and you're going to get everyone trying to basically aspire to be the VP or director at every possible opportunity. So I think VP and director is the bane of startups.

Well, I would say, okay, I think the framing I would give you is, well, let me give you a situation then. If you are, let us say, a senior person and you're joining a startup and the founder says, You know what, I followed Gokul Rajaram on Twitter. He posts this post on titles not mattering. So I'm just going to call you engineer, right? And you just left Google or Facebook and you were a D2. For those of you who know what that means, you know, you're like a senior level director or whatever. And I'm just going to call you engineer because of Gokul's post, right? If you were that person, right, would you negotiate a title or not? And I want to make a follow-up point because I agree with you that founders should resist title inflation, but I kind of want to disagree with you on how titles provide legibility within the organization.

I think I've actually had the situation because there are enough startups now who have adopted this. Now at employee number 200 or 500, you might actually have some hierarchy and maybe you have a director title or something like that. But I think you get away with lead and head of for a very long time. I think lead and head of are the two titles I said. They basically allow you to articulate people's roles better. So you could say it's a product lead or maybe head of product, but basically don't give a director. And I've seen if that, here's the deal, if as a founder I see you negotiating and saying that's the only thing that matters. In fact, I had a company which someone from Google tried to negotiate. They negotiated the comp, got to the right comp, negotiated the scope, got to the right scope, and then said that they were a group product manager at Google. And were only going to join if they got director title. And the company said no, and they joined. They joined because the reality is no one else— see, the reality is you cannot have other people. As soon as someone else has the title of director at your company, that opens the door for everyone to negotiate. Why does it only stop at group product manager? Then the senior product manager also will say, I want a director title. And then you open up. So I do think, I think it's easily possible to draw the line and to and to basically say, let's think about what matters to the company, scope and impact. It's not title, it's scope and impact. If your title, if your role can represent scope and impact well, I have seen the difference going from companies with no titles to companies with titles. And the difference is profound in how people behave, what they optimize for, and what they advocate for themselves.

I mean, I wouldn't disagree with your framing, which is from the point of view of the founder, right? I'm more interested from the point of view of the industry and maybe the person asking for the title in the first place, because my pushback would be across industry. You made an earlier point about how you want to get the brand on your LinkedIn profile, right? Like you want to get, you know, one of these iconic companies in there because it tells people, okay, even if you had a couple of misses, you're still capable enough to hang with the big, you know, the top tier people. And I would say if you're not part of one of those elite companies and at least every 2, 3 years, those elite companies in Silicon Valley changes. Titles are the way everyone else in Silicon Valley is going to judge you. And they—

But see Ram, think about it. If you meet a VP of product from one of these SaaS companies that you mentioned, are you really going to look at the title? You're going to go 3 levels deep and understand what the hell did they actually do? Because VP of product at a no-name company that you've never heard of, you can't actually calibrate. How many people did you actually lead, manage? What was the scope, scale of the revenue or the product? How many customers did you get? All of those things, we actually will instantly, I will disregard the title for sure. At Google, Facebook, etc. Yeah.

Well, sorry, Arati as well. Arati said, but I would say the counterpoint is if this, let's call this the SaaS company which has done well, but maybe not doing super well now. If that person was just a regular product manager with no title, they would probably not show up on most recruiter screens. They would probably have a much harder, the counterfactual, would not be that life is easier. The counterfactual would be that life is harder. Like for example, I think you and I can, I have been in lots of situations where somebody would be like, oh, that person is a staff engineer, right? Like, and that person is a staff engineer, it has a certain level of credibility and respect. We're gonna take them very seriously. I think the new trend, Gokul, I'm curious to get your take on it, is for FAANG companies to award CEO titles. Like that's an interesting new trend. And for a lot of other companies to start awarding distinguished fellows. Which is another interesting new trend. But I do think there's—

And president titles also.

Oh yeah, that's right. That's right. Yeah. We see a lot of those. Yeah.

I think this one I'm deliberately similar to Paul Graham. I'm deliberately taking a more author or more hardcore view with titles because I think we need, because it's so easy to give. In fact, one of Ben Horowitz's amazing posts is about titles and how it's something you should give. I think both Mark and Ben strongly believe mistake in giving titles as a negotiating lever because it's an easy lever to give. And I think someone, because they're so influential, I think people, I do think you need to have a counterpoint so founders know there is another way of doing things and maybe you land somewhere in the middle. Look, I'm not saying no titles forever. I'm not saying that. At some point you will need to have titles. I'm just saying defer titles for as long as possible. Don't give titles in your first. When I see a slide deck with the first 4 employees being CEO, CPO, CTO, CRO. There's only 4 people in the company because it's the 4 college roommates or the 4 founders who've given themselves a title. I'm like, what are you the CXO of?

I will say this, Aarthi and I use this line a lot, which is from Succession where Culkin will say, he'd be like, I'm CEO, whenever there's operating, I'm chiefing it. And we use this line a lot. By VP, by the way, by pet peeve is if you are a sub-10-person company, the CEO should not have a chief of staff, right? Like, I don't know what staff you're chiefing, you know, I don't know what you're doing, but the CEO should not have a chief of staff. And I'm surprised every once every year or two I'll run into this company and empirically, and maybe one of them will turn into an amazing company, but empirically those things haven't tended to work out. And I'm trying to draw some correlation over there, but yeah. If there is a C, that person better be chiefing something important.

Amen to that.

I think a bunch of founders are looking at this going, holy shit, I have to make a bunch of changes overnight, like before Monday morning. I've got to fire that chief of staff. I got to change all these titles. Like all these things that I have to take away from this company, it starts tonight.

Okay, so I want to, you know, it's interesting because I think this episode we kind of like we kind of interleave through various parts of Gokul's career because he really has, really like done it all. And I want to, we talked about sort of the, almost the unhappy case, you're stuck, you wanna kind of figure out what you wanna do. I wanna talk about a happy case and I wanna go back in time. This is I think 2 months after I joined Facebook because I know you left immediately after I joined. You're doing really well.

I think this is Shreya Ram's therapy session, like 11 years later. He's trying to hold Gokul accountable.

Can I say this? Because Gokul helped sell me into joining this ads world at Facebook. And you know all that.

You had a great time, didn't you? You contributed so much. It was great for Facebook, great for you.

Thank you. Yes, I do agree.

And thank you because you know, this also probably just means Gokul's like, man, all the riffraff is coming in. I gotta go. Like, this is just not the place for me.

I swear, like literally the first team meeting we had was Gokul was like, I'm out. "My QDAC, who's also amazing, is taking over. See you guys." I'm like, "What?" Right? Like, but anyway, so, but I wanna kind of go back to the time because, and I didn't still know what was happening, was Gokul was really crushing it at Facebook. He was running the ads product organization and Facebook ads at the time had really turned the corner. We knew we had something really, really valuable. It did not need my help, but thank Gokul for bringing me on. And let's just say in Google's, you know, I'll just say with Gokul, probably, you know, if Gokul had kind of stayed at Facebook at the time, you know, he had an amazing journey at Facebook, you know, probably made a bunch of money, Facebook stock did really well, all of that. So you're kind of in a good spot over there in terms of like projected outcomes at where you were in your career. But you choose to leave Facebook and where you were kind of known as the ads person across the industry, and kind of take a risky bet and you go off to Square, now Block, and to run product and engineering. And I always think of it as a happy case because you were leaving something like a sure bet on the table, carrier reputation, money, to go to something which didn't seem as sure at the time. So maybe walk us through the experience, the thinking, the interactions, and how you went about that.

It's funny because, you know, I think it's funny you bring it up because I say reflect, I realize that I always try to do this where I think at Facebook, my boss, sorry, at Google, my boss found the first Founder Award were planning to be given in 2007. And she said I was basically going to be one of the recipients of the Founder Award, which is a large stock grant. And I said, please don't tell me what the amount is. She's like, why? Because I plan to leave in 3 months. She's like, no, let me tell you, then you won't leave. I'm like, if you tell me, I might not leave, but I want to leave. And so in general, I've realized that I have to, I like going out in a good place where I don't want to be, I don't know if you follow football, but John Elway went out when he won the second Super Bowl with the Broncos. That's when he said, right after winning the Super Bowl, he said he was going to retire. And so I think you're kind to say that. I think I was doing well. I think it was a great time at Facebook. You're right that we have figured out thanks to a lot of work that the mobile ads team did for app install ads and all the other stuff. I think you could see the next few years being up and to the right. And so I think, like I said, my framework is always, is the company doing well and am I doing well? And I was doing well personally, but I realized, and I think this is one way I always say that the way the inbound you're getting from recruiters and others tell you how you're perceived in the market. And I figured out that I was being perceived as an ads person through and through. Every role I got, every inbound I got was to run ads at Company X or Company Y. And I realized that I had done ads at Google and I had run ads at Facebook. And I felt that from a domain point of view, I just wanted a change to do something completely different because I'd spent, now you'd never done ads before. I had done ads for many years at Google. And so I just wanted to do something different, which would expand the set of things I was good at. And then Square also offered the opportunity. So it was something completely different than what I'd done. And it offered the opportunity to do something different on the functional side. It was not just running product, it was running engineering and design. So because of that reason, I considered super strongly. And then I asked myself the question, assume in 2 years Square goes to zero, because like you said, Facebook is going to— I always say it's a good question to ask, would the opportunity of staying at Facebook have been better than opportunity at Square? I would've said no because what would happen if Square went to zero? I would still have been on the executive team of a company that basically had reinvented and had built some very, you know, or had built some revolutionary products, had run product design and engineering. No title, it was product raising and design lead. But I also had the chance to be part of a completely different network. My network was all in the South Bay, Mountain View and Menlo Park and so on. The Square network, I had never been part of the San Francisco network that you guys were part of. So I felt that it would be a different, it would be a Sequoia company. We know Khosla companies, I'd never engaged with them in close proximity and also Jack and the Twitter and Square crowd. So I felt from a network's point of view, from a domain point of view and from functional point of view, it would give me a completely new set of experiences. And I think I always think of careers as being in, you are in like sowing mode where you sow the seeds and they're in harvesting mode later on. I felt that I was still in sowing mode where I was still laying the groundwork and I was not in harvest mode. If I was in harvest mode, I would've just stayed on at Facebook and just rested and vested, or basically not rested and vested, but just done a great job at Facebook hopefully. But I felt I was still sowing. And when sowing, you want to build a diversity of experiences across domains, functions, networks, et cetera. And you've gotta keep doing that. And I felt I was not going to do that. The 5 years at Facebook.

You talked about this as a regret minimization framework, right? And it's one of my favorite things because it's sort of applicable not just to career, but to life decisions as well, where you look at it and say, if I didn't say yes to this, would I regret this later? And you also think about downside protection, like what's the worst case that can happen? If you actually did this, but what would the best case look like, right? If you said yes, things were up to the right rate. If things went to shit, okay, but you'd still have this foundation that you built on top of.

Exactly.

And so go from there. So that for me personally has been really helpful. I wanna talk about DoorDash. You know, we briefly touched on just DoorDash. You know, I love the founders. The founding team was just extraordinarily good. You know, when you joined, you joined in 2019. Why DoorDash? It's a very different bet. I mean, you'd done Caviar at Square, so you sort of know that area, but still DoorDash is very different. And how was it there? Like, how was it processing their first set of orders? Like, what was that whole experience like?

DoorDash is a great example of what I call, and you know this because you were in the YC batch of where It's a great example I give to say, please don't overbuild stuff. The first version of DoorDash was a website without any clickability. There was a PDF on a website, PaloAltoDelivery.com. And the first order, all the orders could only be placed by phone. You couldn't order. And Tony was a customer service person on the other side and he was an intern at Square before that. So he took a bunch of Square readers from the Square office and the first order was basically people paying with the, he would basically pick up the order from the restaurant, get the order, pick it up, you place the order at the restaurant, pick it up, and he would go there and take the order in person on a Square reader. So that was how they gauged demand without building any product.

Amazing.

I don't know what Sanjay and Andy did initially, but they basically put the PDF up or something. But yeah, I think they probably took phone orders. But that's what I say. I mean, look, that's how they gauged that there was demand for something that people were not able to order delivery. It was all done with Square readers, no payment, no Stripe, nothing. And so that philosophy has always been part of the company. And so to be honest, Caviar was a, I knew the, we knew at Caviar when we were part of Square in 2018, we were doing very, very well. I think we reached $500 million in GMV in 2018 or something. But then we, till then DoorDash and Caviar had operated in different job queues. DoorDash had been the burps. Caviar had been in the cities and we were like, okay, but then I was working in San Francisco. We started seeing bus ads for DoorDash in early 2019 because they'd just completed their soft bank round of $1 billion. That's when I knew, okay, when we went to Square, basically our peers and asked them for more budget, Square as a public company, they ain't any budget to do marketing for Caviar. And so we knew it was the beginning of a long decline in end because awareness basically was basically, I think, you know, we ran a process and thankfully we got offers from all our competitors. We also knew there was some game theory because we knew Postmates, our good friend Bastian would also probably have to sell at some point because ultimately consolidation was going to happen. So I wanted to get ahead in the process, ahead of Bastian, ahead of Postmates because whoever bought, if someone bought Postmates, there'd be one less person to buy, one less company to buy us. And so we thankfully got ahead and I think DoorDash, I felt that, and I was the key man in the deal, so I had to go to DoorDash as part of it. But I also felt that it was a job not completely done at Caviar because I was not able to do what I wanted to do, which is get to a scale beyond a billion. And DoorDash just provided the, I mean, it was the best decision. I'm so happy. Ultimately Square had to make decision, not me. That DoorDash should buy Caviar. I was involved in advocating for it. The number one thing about this company is that I think Tony, the CEO, I personally think is the closest we have in the US today to Jeff Bezos. He's the closest person we have to Jeff Bezos. He's about 15 to 18 years younger than Bezos. So hopefully he has another 15, 18 years because the level of operational rigor the company has is unmatched.

Give us an example. Give us maybe an example.

Here's an example. I think I learned that there was a metric called missing and incorrect items, which is what percent of your orders are missing or incorrect, which means if an order missing or incorrect, that's a pretty bad customer experience. And it was a very small percentage. It was like 0.1 or 0.2%. But there was a team with a GM, which is a strategy and operations person, and a PM and a ton of engineers. Their only goal was to reduce this number every single day. And so, and it was a very small number, so even reducing it was like very painful. So it was like reducing it from 0.21 to 0.205. But they were just, every week they would send a weather report saying, here's how much you reduced by, here's the next things you're doing. And so there is infinite number of projects like that in the company where it's a small set of people taking a very small operational thing and just going deep down and just doing it. And it is crazy. I'm like, and this, and Tony and a few others synchronize all these together and, and just, it is such a complex business because remember, it's not a two-sided marketplace, it's a three-sided marketplace. It's a three-sided marketplace that makes it infinitely more complex with a fourth side, which is the damn cities involved. Yeah. Now you have cities, right? They have their own set of restrictions. So what you can do in New York for the driver, or Seattle for a driver is different what you can do is Austin for a driver, a red state versus blue state thing. So it is a supremely complex. I would strongly suggest getting Ravi Inukonda, who's now the CEO of DoorDash to come and talk. The other thing DoorDash did was hoard talent. They, Tony, one of the things he's excellent at is go after undiscovered like talent pools. So for example, most of the DoorDash people didn't have any, especially the operators, They didn't have any experience at any company before or any of the branded companies that we talked about. They all were like Division I athletes or basically launchers at DoorDash. And Tony asked— one of the things that I learned from Tony is that even most leaders, they talk a good game, but they can't do anything. So DoorDash still, I think employee number 500, would have the same interview question for everyone. Which is towards the end they would give you $100 and say, acquire as many customers as you can in one day. Or I think they would even give you a number, acquire 1,000 customers in one day with this $100. Some people would just opt out of it. They would say, look, I can't do it, or protest this thing. This is bullshit. I can't do this. The best ones, and no one ever even acquired close to 1,000, no one. But the best ones would take it, break the problem down and try 6 different things, have a clear hypothesis, And that's what they wanted to see, that you're fearless, you'll go out and try 5, 6 different things and you'll figure something out.

What is— I want to ask you, do you remember any of the interesting or good answers to that question?

I think one person went and stood outside gyms first and basically tried to do a partner. They somehow managed in a day to partner with the local gym and basically gave coupons. They created fake DoorDash coupons and gave it to— DoorDash was already giving $5 off. They just made it into $5 off coupon, printed it out, and gave it to people who were entering the gym.

Oh, I think I misunderstood the question. So you had to actually do it. It's not like a theoretical question. You had to actually go out and do it.

You had to go out and do it.

I love that. I love this so much. I mean, in my mind, when you mentioned the question, I was like, I started thinking about ideas that I would like try out, right? Like, this is sort of, it's such a great question for like people who can, who love this sort of scrappy operator type sort of role.

In fact, Aarthi, I would say that many product roles now, many roles have like projects or questions that you have to do. You have to submit case. The best answers to every question I've found across Square and DoorDash, the companies that I've seen this, have been candidates who've gone out and interviewed real life customers. At Square, we had a customer on premium insights, which is like we have an insights product. Should we have a premium insights product? If so, why? Why not? Instead of saying, yeah, I think you should have a premium-size product, here's why. Go and talk to 10 customers. How hard is it? Go and talk to 10 enterprise, even 10, and 5 enterprise is not hard to get to, right? Go and meet your buddies who are VP of engineering. Can't you just talk? Instantly it elevates what I think of you because now you frame everything in the context of the customer versus my own opinion. And so it's so easy to do, so people do it.

I love it.

To customers?

Yeah, it's such a great question, man. At some point I have to go steal this sort of interviewing for candidates, like actually like a real—

You are in the role where you can do it. You should do it.

Yeah, I know, this is so great. This is awesome.

Wow. Share a very good— Every role in my opinion should have a work interview question. Corp Dev always had a question, what's the number one company we should buy, under the radar company? Don't give us an example. Engineering already has that because everyone has coding interviews. I think we slowly started seeing that in other roles over time.

Since I haven't done a, had a Facebook product interview for a while, since I left 18, I can, I can trot out my favorite interview question I used to ask back then, which was, I used to, people would show up and we were interviewing for like product leaders, kind of somewhat senior product leaders. I would say, okay, so name an interesting company in Silicon Valley, which is not Facebook. And they would usually come with something back then it would be say Dropbox or Quora or Uber or some such thing, I'd be saying great, right? Like Zuck and the CEO of the other company drew Houston or Travis over, went out, had a drink, and they said, you know what, we should merge forces, right? Combine our companies. And they're like, but wait, to do that, we need to pick a product which shows off the synergy of our companies work together. And they appoint you and they give you 6 months and they give you a crack team of engineers to go build something which tries to make this merger make sense. So what do you do, right? And what I used to love about this question, like every single person would be like, damn it, I should have picked a different company to start off with. But it was one of these interesting things where it was very clear there was no right or wrong answer. And you're doing a lot of these interviews, you're just kind of bored, you're bored to kind of get some interesting discussion going back and forth as a oppus. And so that was kind of my go-to move.

Oh yeah, awesome question. I love that question. I love that question. We've sort of gone like full circle, right? Gokul, I think the thing we like about this interview and this conversation is we can ask you questions about founding companies, we can ask you questions about middle management, can ask you questions about M&A, scaling, acquisition. It's like this whole cycle of every person at Silicon Valley who's like sort of working in any capacity in tech will sort of relate to this content here. I like, you know, since we're getting to the end of this, I like to wrap, you know, these conversations with this one question I like to ask, which is if you're a founder today, you're just starting a company today, what advice do you have for them? Could be in the context of this current space, bubble, post-bubble, whatever, from your own experience as founder, what advice do you have for founders starting companies today?

Keep the initial team very small. Till you prove out the hypothesis you have. In other words, regardless of the capital you've raised, I think many strong founders are able to raise quite a lot of capital, but I think keep the initial team very, very small. And I actually, I read something that Max Levchin said at some point. I think it actually is very good for the initial 5 or 10 employees to actually be fairly similar in their worldview.

Homogeneous. Yeah.

Think about it versus, I think it's because you just want to be fully focused on that one thing and not have anything that to disrupt that. So I do think find your trusted— in fact, if you can't find 8 or 9 people to hire from your own network, you're probably doing something wrong. That's the other thing. I'm like, you need people in that first 9 or 10 people that you trust. In fact, I think that's— and keep the team very small. Operate the company in a set of hypotheses. The first hypothesis Is this problem a pain point that enough customers have? Second, can I build a proper product to solve this pain point? Third, are customers— So I think you need to pose the question, answer the question, and then maybe expand the number of people working on it. You have to structure the company as a set of hypothesis. I think don't overhire. Hiring should be orthogonal. Hiring or spending should be orthogonal to capital raised.

I think especially now, I think with these AI companies, right, you can, Sam Altman had said this in some talk, I think it was sort of meant to be bombastic, but I truly believe in it. He said something like, you can now see one-person companies that have like billion-dollar outcomes or billion-dollar revenues. And because of how much you can sort of push onto the AI layer and the AI stack, you don't need as many people in the early stages of company building at least. To be able to scale a business as such.

Exactly right.

I like it. Well, Gokul, I just want to say this has been such an interesting conversation and Gokul is genuinely a dear friend, even if I think his idea on titles is totally wrong. But he is the person, it's kind of funny because you saw Aarthi and me individually talk about how every time we had career changes or We're not feeling good about where we were, Gokul is the godfather that we call upon, you know, and ask for advice. And I know we are not alone in doing this. I know a lot of people look up to him, a lot of people want him on their cap table, in their boardrooms, and Gokul, you're just the best. You deserve, just like Prince or Cher, you deserve your one-name moniker. But this was so much fun and, you know, we should— We should do a future version of this some other time too, but no, thank you. This is so much fun.

This is great. This is fantastic.

Well, you guys, I think as Sriram said, Aarti, both of you run these WhatsApp groups that I'm part of and they are such a huge part of my life. So I feel like, you know, I feel you. Yeah.

I think Sriram just does this to like stir up shit. Like, you know, these like WhatsApp groups where he just has to like throw out the most controversial statements.

But that's his job because his job is to be the host in some ways, right? His job is to get the conversation flowing.

Yeah.

That's a key requirement of— it's his manifesto for running a group. I remember that very well. You need a host like Sriram Murthy.

Yeah. Yeah. I mean, just today Gokul shared between Zuck and Jack and Tony, who is his favorite CEO, but we will not talk about that here. So on that note, on that note, Gokul, this is truly a delight. Thank you so, so much. Until next time. Thanks, man.

Thank you. Thanks, Kaan.

Thank you.