The Central Nervous System for Modern Business | Confluent CEO Jay Kreps

Certainly being a software engineer is more fun than being a CEO. You typically have a lot of bigger problems that have to be solved. There's always more pressure. People who enjoy software engineering, you get to just do that. For the CEO, it's like whatever the biggest problem is, you need to get that solved. Kind of a meme that AI, you can just be like 10 times more efficient. I don't think that's quite true. Some of the AI companies are lean, but a lot of that is just time. If you look at how they're adding people, they're adding people. Like at a rapid rate. And in practice, the more human-intensive things like a larger sales force, you just are only going to build at a certain rate. But I think companies that do big things, it takes more time. When we started the company, it was kind of an open-source B2B infrastructure thing. It was actually not an attractive space. As some of the models were proven out, you get a ton of excitement, then less excitement. So the world will change around you several times and you have to be relevant throughout that. And continue to adapt in whatever way.

Welcome to Grit. I'm Juven, partner at Kleiner Perkins, a show where we go beyond the highlight reel and explore the personal and professional challenges of building history-making companies. Today on the show, we have Jay Kreps, co-founder and CEO of Confluence. The company bringing real-time data and streaming to the modern enterprise. Before Confluent, Jay was one of the creators of Apache Kafka while at LinkedIn, helping define the architecture that powers countless applications today. Jay is a legend and continues to carry on an amazing tradition of building huge companies in Silicon Valley. Enjoy the episode. Thanks for doing this.

Yeah, yeah. I'm excited to be here.

I appreciate it. I will say that you are one of the few people that I have ever seen look better with short or buzzed hair than, like, I was looking at your old LinkedIn pictures.

Oh, really?

And I'm like, I think he looks better with shaved head. Yeah, I love it. Now maybe I'm biased because I shaved my head and I'm just looking for, you know, role models of head-shaved people that look good. But you got, you got like the Jason Statham vibe.

I had no choice, you know? It's like over the course of doing the company, the hair all fell out.

Yeah.

It just, it got progressively shorter and now it's all gone. And people regularly in the company tease me with early pictures from me presenting or something looking quite different. Yeah.

It's a crazy time right now, isn't it? Yeah.

Yeah. It's a crazy time.

And you just joined the board of Anthropic recently? That's right.

When? Yeah. I guess it was about a year ago.

You know, we've had Daniela on.

Yeah.

She's a gem.

Yeah, she's amazing. She's amazing.

How is it being on that board?

It's super interesting.

Do you feel like you're seeing—

Yeah, yeah. I feel very lucky. It's an amazing company. You know, a ton of passion. You know, it's interesting to watch. You know, it's a very kind of aligned group of people going after something at full force and it's like a crazy time.

Yeah.

I mean, it's as crazy a time for Silicon Valley as I've seen, so.

You know, you've been doing Confluent for how long?

10 years.

10 years.

Yeah.

Public company.

Yeah.

Big public company.

Yeah.

You ever like go over to an Anthropic board meeting and see what they're doing and be like, Whoa, like the world has changed. Maybe your company is, I think, actually reasonably well positioned in that new world of change. But you're like, yeah, as a technologist and as a builder, I would be like, oh man, if I was doing it all over again, maybe I would join this company or something. Like, does it, does it get the juices reflowing?

It's a totally different world. I mean, the, um, in terms of just what's moving, you know, versus 5 years ago. Uh, you know, and I think for, I think for a technology company, that's always how it is. You know, it's, it's interesting. We, we, in Silicon Valley, we love the new companies, but in some sense, the most impressive thing is the companies that have actually managed to hit a couple of these generations and survive it. So like a Microsoft, in some sense, is the impressive thing that they can kind of come back and hit another wave and, you know, maybe come back and hit another wave.

Why do you think that's impressive?

Oh, just the, the odds of getting one are so low that, you know, you keep flipping the coin and most companies don't make it.

Yeah.

You know, it's true in each part of company building, like the kind of odds of going from Series A to Series B aren't that good, right? And you know, all the way out and then just making it on that first idea and product and whatever wave of change, that's hard. Then something else comes and you gotta be relevant in that as well. So.

One observation that we've had in this like AI world of, man, these are early stage startups is like the rate of change maybe this idea of like refining product-market fit.

Yeah.

Conventional wisdom used to say you wait to $100 million, then you figure out your second act.

Yeah.

You know, and now it's like every quarter.

Yeah.

You're like refining and reinventing.

Yeah. Yeah.

Product-market fit.

You know, I think the speed of things is one of the most amazing bits. I mean, that's certainly one of the observations from Anthropic is you have to think on one hand, you know, What would be true in a 4-year-old company? And on the other hand, what would be true in a multi-billion dollar revenue company? And those are totally different models to work against, right? Uh, you just don't really have a ton of examples where it's both. And so, you know, there's certain things that just take time. Like you just can't do it that much faster than however many years, right? And so for these companies that are trying to go kind of at the speed of light, that, that's a big challenge.

Yeah. I mean, even Anthropic, I think it's been publicly released like $1 to $4 billion in 6 months or something like this is like, yeah, it's not a thing that companies do. What are we talking about?

Yeah, totally. Totally.

How'd like, I think about Daniela and their company's like what, like 1,000 people?

Yeah.

Not even.

Yeah. It's, it's, it's around that size. It's like, it's not huge. Right.

It's like how much, how big is Confluent?

Uh, yeah. Bigger.

That's the only thing.

Yeah, totally.

That's like, can you imagine the scale that they're going through right now with Less people. It's like, it's just, it's hard to put our arms around this.

Yeah. Yeah. It's, it's really crazy. I think the, um, you know, it's interesting. One of the things that it makes true is that the, the motions that work are the ones that are almost frictionless, right? So it's a lot of, you know, product-led growth type stuff. People signing up, uh, the consumer side works, you know, OpenAI, people will sign up for the app. People signing up for the app, startups, that works, right? A lot of the traditional enterprise sales tactics are just slower. And so given the rate of change, how long does it take to hire a sales force of scale proportional to that dollar amount? Like a long time. And so it's interesting if you watch these companies, the things that are working immediately are the things that are very fast. And it doesn't mean the other things won't work. It's just that literally the time to get that ramp is longer, right? You know, when you think about how an enterprise company plans, you know, it's often some, this is how many sales reps we're gonna hire and this is how much they're gonna do and this is how long it will take them to be trained and be productive. And it's very much a year 1, year 2, year 3 kind of build of things. And you know, the speed that people want to move right now is much faster than that. So a lot of things are just bypassing kind of a lot of the traditional go-to-market partners, SIs, you know, it's just moving faster than that. But it doesn't mean that stuff doesn't work. It just means the things that have, that are able to move with the pace of possibility are, are not that.

At some point in the COVID days, my partner Ilya said, you know, Juven, it's just weird. Like no companies are dying right now. Like there should be companies that are, nobody's dying. Everybody's getting funded. Like, and In this world today, it's like a derivative of that, which is like every company is ripping. Yeah. You know, like every AI company is on fire.

Yeah.

And it like gives you a moment of pause. Yeah. Like how could this be? And in the zero interest era, the COVID times, demand got artificially pulled forward.

Yeah.

And we just believed it was gonna stay there forever. And it turns out it didn't.

Yeah.

You know, right now, demand is at an all-time high.

Yeah.

So you can basically throw out all the rules of the road that used to exist.

Yeah.

Right. But I remember at the time during, you know, 2021, 2022, people were saying the same thing. Oh, you know, we, we don't really even need that many salespeople anymore. Yeah. We don't even need to do outbound sales anymore. It is just interesting to like, sometimes it, it sounds to me like, oh man, there is a ton of demand right now, which basically hides a lot of it's kind of well known but worth rediscovering, right?

Like for any company, there's, you're swimming and you feel the effort you're putting in to swim, but you're in some river that is moving in some direction. And when the river is moving with you, you don't notice. You just feel like, oh, I'm going so fast.

Yeah.

And when the river is against you, it's quite the opposite. Right.

So do you ever feel like you learned that lesson? Like, like for you, right? Like, yeah, I don't know. It's like, you were a $32 billion market cap company and now you're a $9 billion market cap company and you were swimming with the current and now it was against the current and then, you know, maybe you're with the current again. Like, do you feel like—

There's no question about that, right? So when we started the company, you know, it was kind of an open source B2B infrastructure thing. Uh, and it was, it was actually not an attractive space, you know, for employees, not attractive. Like the best engineers wanted to be in these cool consumer things. Like Google was the exciting area, right? For investors, similar thing, like not interested in the open source stuff. And then, you know, as, as that some of the models were proven out, then, you know, you get a ton of excitement, then less excitement. So, you know, I think that happens and you definitely feel, you definitely feel that. But, you know, that's why I think companies that do big things, it takes more time. You know, the world will change around you several times and you have to be relevant throughout that. And continue to adapt in whatever way.

Yeah. When you were starting the company, you were leaving LinkedIn.

Yeah.

You were one of the founders of the open source project.

Yeah. Yeah.

Right.

Yeah. So there was a, an open source project, Kafka, that was the kind of core technology and it was just, you know, it was about working with real-time data. And so something—

and you were doing that on the side?

Yeah. Well, uh, we had built it, um, you know, I guess I built it somewhat on the side.

You built it just to be clear.

I, I built a very early version and then other people came and built the, you know, the rest of it. And so it was an internal project at LinkedIn. Um, you know, the first, the first bit of it was almost a passion project and it turned into an internal system and then turned into an open source project. And then, you know, we left to start a company and kind of take it everywhere else.

Yeah. And at the time, what year was that?

Uh, you know, that this was around 2010 that we started working on it and we left in 2014. So there was a fair amount of work. Before we started the company.

And you kind of left LinkedIn at like the prime time of LinkedIn too, to be fair, right?

Yeah. Yeah. I mean, I was there, uh, for a while. So I joined in 2007 and that was, you know, it was kind of—

How many employees was it?

Yeah, it was, it was small. I think there was probably around 100 people when I joined.

Oh my gosh.

Yeah. Yeah. So it was, it was fun to watch it grow. And then, you know, it was, it was probably not that long after that, that the Microsoft acquisition happened.

After 2014.

Yeah. Yeah. I think it was 2015 or something like that. Okay.

You know, your employee 100 at LinkedIn.

Yeah.

They get bought for $26 billion. Yep. You're no longer at LinkedIn. You've left. You don't know that the acquisition's gonna happen. You leave. You're like probably exploring in the wilderness for, at this point. Have you raised money at that point yet?

Yeah.

You had already raised.

Yeah, we did it very quickly. We'd worked on this open source project for a while. And so, you know, coming out of the company, the assumption was it would take some time, but it was actually fairly quick to go raise money and get started. So, um, because there was already a fair amount of traction around the open source. So even though it was a little controversial with open source.

Yeah.

There were thousands of people using it. And so that seemed like something, right? Yeah. And so I think for investors that makes it a little easier. Yeah. I don't know if these open source businesses work, but at least there's people want this thing.

I'm curious, like the, the question behind the question was tens of millions of dollars hit your bank account and you're now at like this early stage startup.

Yeah. Yeah.

Are you like, what am I, what am I doing?

Yeah. Yeah.

Like I'm rich now. Like what do I care?

Yeah. No, I mean, did it matter at all? Uh, you know, it helped. So, you know, LinkedIn had gone through a whole IPO and I felt lucky to be there early. And, you know, certainly by my own expectations, that was, you know, plenty of money. Um, but, but, you know, I wasn't like an executive at LinkedIn. I just joined as a software engineer.

Yeah.

And so, um, yeah, for me, I think it actually gave me a little more freedom. You know, when I was coming out of school, I actually kind of wanted to start a company, but it just, I I didn't really know how to get going with it. I didn't know how to do it. And I also didn't know much about anything. So I thought I should probably have a, you know, a job first. You know, so I think this made it a lot easier to do something and kind of go big with it. You know, having been lucky to be at LinkedIn for a while. And it was an environment that was good for that. It was a kind of very entrepreneurial—

LinkedIn?

Yeah, culture internally, the, you know, the people there. It was, you know, I felt like we were always discussing the startup we were gonna start. Totally. For, you know, the entire time I was there Totally.

And so you're saying it frees you up?

Yeah, yeah, totally, totally. So, so yeah, it wasn't something where I, you know, I was very motivated to do this no matter what. And this took a little bit of the financial pressure off. Financial pressure off. Yeah. 'Cause, 'cause you know, at that point I had young kids and so it would've been, uh, how old were they? Uh, yeah, they, the, um, it was 2 and 4. So, uh, so yeah.

And were you, you were your partner that you, you obviously had the kids with, right?

Yeah. Yeah.

You're still married?

Yeah. Yeah.

Okay. Okay. I didn't know. You were wearing a wedding ring, so I was like, I don't know if I should.

Oh yeah. Sorry. I dislocated my finger. I was like, I was kind of— now it doesn't fit anymore.

I was tiptoeing around it. I was like, I don't want to.

Oh, that's very, that's very perceptive. Yeah. My, uh, my wife picks on me, but, uh, you can tell it's a little swollen.

Right, right, right.

Okay.

So like you're leaving LinkedIn.

Yeah.

Company's already public, so you've already made your money and then the Microsoft was just a little bit on top or whatever.

Yeah. Yeah.

Is it like a, you knew you wanted to start a company before you went to LinkedIn. How long were you with your wife for?

You know, for a while. So, so we, we've known each other for a long time. We got together after college. So since like 2000.

So she knew that you were always hearkening to go do this thing.

Yeah, yeah, yeah.

And then you're like, all right honey, like LinkedIn's over. Like ride's done.

Yeah.

And she's like, great, you want to go like, you know, spend a year and travel the world? Like we have little kids. Like, do you want to go?

Yeah, it wasn't anything like that.

Was there a negotiation?

She was just like, go do your thing. No, it wasn't anything like that. Like I made a little bit of money off of LinkedIn and felt very good.

No, I meant like more like, all right, you, are you ready for like, like do you want to go do, because with little kids.

Yeah. Yeah. So we were, you know, we were working at LinkedIn and we were thinking about this company for a long time cuz we were, you know, here we are, we're working on this open source project that we were very passionate about. Right. And so as we released it as open source, we thought, oh, this is gonna be a really big deal. We'd done some other open source work and this was much better. And at first nobody thought much of it, but over time it caught on. And so it was kind of a thing that was moving and we thought could be a really big deal. And so it's a weird thing if you're in a company and you're part of something like that, you're like, oh, this is actually very exciting, but we're probably not going to make it into a big thing as a side project in the middle of the social network. It's just not the right setup. To really put time into this. To some extent, it's kind of already as good as this company needs it to be. And so we've had work that made sense for LinkedIn and was good for them, but it probably doesn't make sense to try and grow the team here and make more. If we could make this something that every company used, there's gotta be some value in that. And I think at least for me, it was like, hey, we were starting to get people reaching out from just all kinds of other industries outside of tech. I didn't really know much about technology outside of the kind of Silicon Valley companies. And so as we talked to those companies, it seemed like there was something they needed. They were kind of calling us and they were interested in the technology and they had all these needs and they're like, "Well, when is it going to be on the roadmap?" And we're like, "There is no roadmap. It's an open source project." So I think that kind of gave some indication that there was something happening. Yeah.

Your kids are young at that point.

Yeah.

Can you even re— like, do you like black out during that point in time? Like, do you remember those times where you're like, let me just say like 4 in the morning, you wake up, go to the bathroom, all of a sudden your mind starts racing about the company.

Yeah.

Next thing you know, like, you hear the kids crying.

Yeah, I definitely, I definitely remember it. I definitely remember it. I mean, so, um, you know, I'd wanted to do something for a while, you know, we kind of debated the, just the timing of the second kid and when we were going to do things. And so when we left to do this, you know, it was actually very deliberate. We talked about it for a long time.

Who's we?

Uh, me and my co-founders, uh, Nehan, Jun. And so we really, you know, we probably overly planned every aspect of how the company would work and the product. And of course we knew almost nothing about how an enterprise company functions. So our ability to plan it was very limited, but we tried. So we actually thought about it for a very long time. And then as we did it, Then it was definitely a little bit of like, oh shit, now we've jumped. So yeah, I think as we left LinkedIn and told them we were leaving, they very kindly offered to invest, but they were like, oh, it'd have to be some kind of priced fundraising round because we don't know how we would account for it if we did some venture investment. So we were like, oh, okay, this is a good opportunity. It's awesome that they're involved. You know, that's a positive signal, but now we need to go like raise money well before we're ready for it. And so that was how we came out and kind of raised money right away. It was—

that's crazy.

We basically had an investor as we were leaving and that was kind of a—

well, the good news is at that point you're like locked in.

Yeah.

Like there's no turning back.

So it turned into a good investment for, uh, LinkedIn as well, even though, um, I mean, they were first money in. Mm-hmm.

Turned into an amazing investment for them.

That's right. That's right. So, so, um, you know, some years later I, I met the person who ran LinkedIn Ventures.

Was it Emily Choi?

Yeah, but there was no— there was no— it wasn't somebody who worked for her.

Okay.

There was no LinkedIn Ventures, of course, when we were there or we were leaving. So they inherited this in one investment that did really good. So it was like, oh, we started off on a positive note.

Oh my gosh. Yeah. And like when you started the company, you did all this planning.

Yeah.

And then reality hits you in the face.

Yeah. Yeah.

And like, what were the things, the realities that started to be like, oh my God, like this is so far off of what I expected.

Oh, just many, many ways. Um, you know, first of all, it was much harder than I thought, maybe psychologically or whatever. You know, I, I always felt like in my work I was very, um, you know, kind of fearless. I thought that was my superpower in LinkedIn. I was like, you know, worst case, I will try anything if I get fired, if it doesn't work. Worst case, they fire me, I'll find another job somehow, right? And you know, I always thought that was a real advantage. And then with the company, it's much more personal, right? Like if it's like, oh, if it doesn't work, you know, all these people you tried to hire or convince, you know, it's your thing, right? There's no other excuse for it. And anybody, you know, once you've hired somebody in an early company, you've really pitched them like some vision of how it could be great, right? And as you're doing it, you're kind of like asterisk, I hope, right? Like, I hope we can do all these big things. And so then I guess I just felt very on the hook for trying to make it successful. And it's hard in an early company. I think you always feel a little bit like a fake because you just have nothing, right? You're like, okay, we have this quote unquote company with no customers and whatever, 7 employees and, you know, a ramshackle office, whatever. It just doesn't look, it doesn't feel very impressive. And so in that state, kind of really going after it is difficult. And then yeah, it was compounded by the fact that we didn't know much about how enterprise businesses worked or even, you know, non-tech customers for things. So yeah, I remember, you know, there was a funny thing. In one of the early fundraising meetings, which was just right as we were starting the company, one of the venture capitalists we were talking to was like, "Well, what's your strategy around services?" And I just assumed he meant like web services or something like that, but he meant services like consulting. And I just didn't know that was a thing companies did. So I was like, "Oh, services. Yeah, we'll do a managed service also." and he was like, you know, kind of looked at me funny and, and then he like explained what he was talking about. I was like, oh, oh yeah, we, we should probably think about that. I don't know.

That's awesome. On the, on the psychological question.

Yeah.

Like of being fearless at LinkedIn and then maybe fearful when you started Confluent.

Yeah.

Like did the fear derive from, okay, if I'm at LinkedIn.

Yeah.

And I go for something and it doesn't work.

Yeah.

There's always a fallback. I can always go do another job.

Yeah, totally.

Somewhere else.

Totally.

Like I'm hireable, you know?

Totally. Totally.

Whereas if you're at Confluent, you, there is no fallback.

Yeah. Yeah. That, I think that's exactly right.

Is that, is that right?

Yeah. And also, um, you know, the, when you work in a company, there's always a bunch of things that don't seem like they're going quite right, but to some extent it's not your problem. I mean, you're worried about it, but it's not, you know, it's like, okay, fine, maybe that doesn't work. Somebody's problem. It's not my problem. Like I, I've done my part. And then if you found the company, that's really not the case. Like it's kind of all your problem. And so, you know, every uncontrollable thing in the world, you know, logically you should just be like, well, if it works, it works. But in practice, I think that's very hard to do. So yeah, I thought that adjustment, uh, to kind of early CEO, in many ways that was probably the hardest part. Hardest part of the job. And then also just the degree to which it was, as an engineer, you have a lot of very knowable decisions. An early company, you're making a bunch of very unknowable decisions, like what market's going to be good, what are we building for, how are we going to do all these things? They're important, but you just don't know the right answer and you kind of can't till you try it.

Yeah.

And then you're also just doing a lot of selling. You know, it's ultimately a, you know, early on you're selling to customers.

How was selling for you?

Um, it was uncomfortable. I mean, I, you, I, there's always a little bit of that, you know, if you hire people, whatever your job is, you're selling, right? So, um, and I was, I was excited about the stuff we were doing, but it was definitely an adjustment to do that as 70% of your job instead of 10%, right? So that was different. So yeah, all of that, I thought that was probably the biggest adjustment. And then just how hard things are in an early company. Nobody wants to work for an early company because it just doesn't seem like it's going to make it. So as we left, we had this list of all our great engineer friends and our assumption was 80% of them would immediately come join this awesome idea. And it was like 10% or something. Everybody says no. So it was just like, no, no, no. And then when you think about it, you're like, yeah, okay, actually, how it just doesn't seem that put together early on. Whereas in reality, the kind of fundamentals don't change that much between 3 people and 100 people. It's not a massive difference. What do you mean? Well, okay, maybe you've gotten a few customers, but just kind of the ultimate outcome for the company is still very undetermined in a company with whatever. 20, 50, 100 people.

Mm-hmm.

But it's that early stage just seems so questionable. Uh, whereas once there's kind of, you know, a nice looking building with a sign on the door, people feel like, oh, okay, that's, that's something.

Totally. When, uh, somebody would say no, an engineer.

Yeah.

That was like your friend or you worked with them. Yeah. They worked for you.

Yeah.

How did you take that?

Uh, you know, I'm always very persistent, so I just, you know, I just kept trying.

A no was closer to a yes.

Yeah, yeah. I, I always feel with hiring, you, you know, you often end up hiring the people. It just takes 5 years. Um, you know, if they're really good, it's probably worth it.

Uh, it's full contact sport.

Yeah, yeah. No, I mean, uh, like, no, if somebody's not interested, I mean, they're not gonna join then, but they may be interested later. And, you know, I've always found that Certainly in the company now, that's kind of always what I say to hiring managers is there's some areas where you need to just be clever, but hiring, you just need to put in the work. Yeah. I think you just need to really expend a lot of effort and, you know, it's kind of a grind, but ultimately, you know, if you end up with a bunch of really great people on your team, it's totally worth it.

What are some of the lengths that you've gone, like what are the greatest lengths that you've gone either time or vigorous efforts in a short period of time to get people across the line? I'm curious.

Oh, you know, there's probably many examples where it was a number of years, but it wasn't continuous. It was just, you know, periodically you check in with people who you think would be good. And then, you know, for the early executives, those are some of the hardest hires. So then there's of course a lot of wooing. Yeah. You know, so, you know, we would do all kinds of things to try and get people excited. Like what? Oh, we would take, you know, pictures of the entire executive team with one missing spot that was for them. And so I would send them texts, you know, I would send flowers. I would do all kinds of things just to try and get them to feel some love. Because I feel like, you know, in some sense, that's one of the hardest roles to fill. Like if you're If you have any qualifications, like you've done something, then kind of joining a really early unproven company is kind of, it's a bit of a coin flip. And once people have something going, they've done something, they don't want it, they don't want a coin flip, right? And so you have to work extra hard there.

Did you fall prey to the like fancy executive thing?

No, no.

Uh, like all these fancy executives that you're like, oh, I want, you know, they have this gold-plated LinkedIn.

No, no, early on the company was not that attractive, so nobody, none of us were gold-plated. Uh, you know, the, um, you know, it was kind of back to that, you know, it was a market that nobody believed existed, and this kind of real-time streaming data, like, what the heck is that? Um, and so it was either going to be some small thing that was kind of niche or wouldn't work at all, or it would be killed by the cloud or something else. So there was just all these things kind of stacked against us. So I think it wasn't— early on, it wasn't an obvious bet. That did make it much harder in terms of hiring executives.

But you fundamentally couldn't get the fancy executive.

Yeah, absolutely. Absolutely. We had great early people, but it was, you know, none of them were some gold-plated thing where it, uh, you know, it was a trophy, trophy person, if that makes sense.

Yeah, it does. When people would tell you, yeah, that it's not that big of a market, or a customer would be like, I don't get it, or whatever.

Yeah.

In those early days, like, I know what everybody says, which is, yeah, they just don't get it. I have deep conviction.

Yeah.

Is that how it felt for you? Or like, is there another, like maybe more sober reality, which is like each of those also sows a seed of doubt in you?

Yeah. Yeah. I would say, um, no, I was pretty confident. So like the early, at the very early bit, we were like, yeah, okay, is there a thing here? And then, um, very quickly, uh, you know, we'd spent a lot of time in the space and I think without that it would've been very difficult cuz of course Yeah, there's a lot of disbelief, but, but I think very early on as we were talking with people using the technology, it was very clear that there was something there and there was very clear that, um, you know, somebody would do this, right? And so I think that part was actually pretty motivating cuz it was like, well, okay, somebody's clearly gonna be successful at this if we're, if we're not successful at it, but we were here first. That would be very disappointing, right? It'll be really, it'll be really sad to watch that happen. "So we better make this, you know, we better make this work." And so yeah, actually, you know, quite the opposite. I felt like, "Oh no, you know, maybe there's a question of timing. Maybe there's a question of something else." But just, you know, in our space, we kind of existed in this world where there was a lot of this like batch data stuff, which is like, oh, we grab the data out of some systems and shove it in some data warehouse at the end of the day and then run some processes on it that kind of, churn through it and get it into better shape. And I think we felt very confident that logically, if you want to build a business that acts on data, you're going to have something that's continuous. And there was all these examples of people doing it and there was the adoption of the open source. So we felt like, okay, there's clearly something happening here and logically it has to happen and it is moving now. So I think the mentality early on was like, no, it's It's go time. We have to go after it. And so I think we were, for a company, you're always terrified of one of two things, right? One is the market isn't big enough or doesn't exist, right? Or somebody else is going to get it. It's either one or the other, right? If you're not terrified of one of those things, then maybe you're not paying attention. But yeah, for us it was always somebody else is going to get it. And so it was early in the life of the company, I think Amazon launched products in the space and we were like, okay, that's a big competitor.

Not ideal.

Yeah, yeah, it's not ideal. And at the time there was little write-ups and it was like, okay, Amazon was seen as just killing off companies, AWS particularly, just killing off startup companies of all kinds all the time. So it was just kind of like, I don't know exactly what the articles were, but it was basically like RIP, confluent, you know?

Yeah. I mean, you mean it probably looks like the articles that people are writing about Anthropic and OpenAI right now as they release a new model.

Yeah.

Like RIP App Layer.

Totally. So, uh, yeah, yeah, yeah. Similar, similar dynamics. So at the time, the concern was much more that kind of competitive threat that we weren't gonna, you know, we weren't gonna get it.

What was your exit headcount after the first year?

We grew relatively quickly. So I would say Maybe we started with 3 and maybe after a year we went to, I don't know, 25, 30, something like that.

You made good progress.

Yeah. Yeah. So we—

That's a lot. Mostly engineers.

Yeah. Well, it was engineers and other stuff. So because we had the open source, we put together a product pretty quickly. So we had a product in like 6 months or something after starting the company. It was quick. And it was not much of a product, but it was a little baby product. Yeah. Yeah. So like we were, you know, we were basically in the market in the first year. Um, and that was kind of part of that same, you know, the idea was like, you know, okay, we raised money. Now's the time for this. I think we felt maybe we were a year later than we should be starting. Um, in retrospect, I don't know that that's true.

Why did you feel that way? Because AWS and others were starting to release stuff?

Yeah. I think there were, you know, there was enough happening in the cloud. And there was enough adoption of the open source and now nobody remembers them, but there was these Hadoop companies that were doing big data stuff and they were kind of adopting the open source and we were like, just, okay, these companies are bigger than us and AWS is much bigger than us. And so we were like, we just have to go after it. So yeah, we pushed very, very hard very hard in those kind of early years to just, you know, get out there and soak up what we could and kind of grow the company. You know, I think in a healthy way, but, but go after it.

Isn't that the great ironic hallmark of most entrepreneurs is like everybody thinks they're late and you have no concept of—

Yeah. Yeah.

That could be.

That could be. That could be. That could be. I mean, in our, In our case, we always had this open source project that was out ahead of us.

Right.

And so it would just be like, okay, you know, there's thousands of people using this and we have like, whatever, 5 customers.

Yeah.

Like, what is wrong with us? And so, you know, we felt very driven to get out there while there was, you know, while the time was right, I guess.

Yeah. That makes sense. If you look at what's happening today, like part of the reason why I ask that the headcount question.

Yeah.

Is this like, if you were rebuilding Confluent today—

Yeah.

I know we're living in bizarro world again, but if you were, would you hire the same amount of people?

Yeah, it's a good question. I mean, the, um, right now, you know, the, yeah, there's kind of a meme that AI, you could just be like 10 times more efficient. I don't think that's quite true. Um, you know, some of the AI companies are lean, but a lot of that is just time. If you look at how they're adding people, they're adding people at a rapid rate. They're just— if the company's 4 years old, there's only so many people you're going to have. And in practice, the more human-intensive things like a larger sales force, you just are only going to build at a certain rate. So I do think there was a period where all companies probably added too many people, including Confluent. But I don't think today You could dramatically change things. Whenever you hear somebody say like, oh, you could do it with 70% less people, I don't think it's really true.

With the one-person billion-dollar company?

It could be true. It could be true soon, right? It's just not true.

What would change for that to be true soon?

A number of things have to change, right? So first of all, if you want to get there with, if the idea is that you can do it now because of AI, I think the models need to be good enough to do a lot of stuff on their own at a level of quality that we're kind of just getting to in some domains. And you would also have to have the ability to orchestrate a lot more of the kind of tooling that does stuff within the company directly from the model without having to build that yourself. And I think those two things are not quite there, but it's getting there. So the thought is right. I think it's just a It's probably a couple years, couple years ahead.

Yeah.

Uh, we'll, we'll see. I mean the, um, you know, there's a lot of hiring among AI companies. They're small, but they're mostly cuz they're young, I think.

Right.

You know, they're growing.

Even them, they're not slowing down hiring. Yeah, that's right.

That's right.

Yeah. Do you still write code?

No. No.

You think if you, you brought the old fastball out, you could still—

Yeah. Yeah.

I still can write code, but I mean, you know, the, uh, it's just not a good use of your time.

Yeah, well, I guess there's two questions, right? So one is, do I write code for Confluence product, which is like, no, absolutely not. You know, all of that stuff has to work really well and be cared for over a long period of time. But I still write code on the side. You do? Yeah, yeah, yeah, yeah. I mean, once you have the skill, it's—

But you enjoy it.

It's actually useful. Yeah, I don't do— I used to do big, long coding projects. And, you know, the problem with being a CEO is you just have too many little interruptions. To sustain that kind of stuff. Yeah. But, you know, I can do small little coding projects, which are actually the more fun ones.

You don't want to check in any code to the, uh, Confluent?

No, it doesn't help. You know, it's an interesting, uh, symbolic move, but, you know, the thing with code is somebody has to kind of own it and care for it. So coming in and dropping some 90% done thing that somebody else has to clean up is not, it's not actually a gift.

Symbolic, like, oh, you know, whatever, Sergey at Google is now checking in Yeah, yeah, yeah.

Exactly right. Exactly right.

And everyone's like, oh, he's back type thing. He's engaged.

So does it symbolize that that's an important effort? It does. Is that meaningfully increasing the velocity of the Google AI team? Yeah, probably not.

Yeah.

Probably not unless he's there every day doing it, right? You know, ultimately there's different types of jobs, but computer programming is a, you know, long attention span, long chunks of time. Day after day type of thing. You know, popping in with your cool idea half done is not that useful.

Yeah.

Unless you're, you know, where it's, where it's useful is if you wanna prove to some, if you wanna prove to people that something is possible to be built. Yeah.

You can build a demo, you can build, oh, like they'll tell you we can't build that feature. You'll be like, I'll show you.

Yeah. Yeah. That's exactly right.

You ever do that?

Yeah. Yeah. No, certainly the, have you done it? Well, certainly the, you know, engineering always works off time estimates, which is like, how long will it take to do this? Right. And it's all hypothetical. Uh, and so yeah, you can do a little bit of demo coding to show that it probably could be done faster.

Meaning they'll, you'll be like, okay, we have 3 months to ship this feature. And they'll be like, Jay, are you nuts? Like 3 months? Like it's gonna take us at least 6. And you'll be like, all right, cool. That weekend you go hack on something and then you come back and you're like, I got 80% of the way there.

Yeah. I think you can prove little bits of it. Uh, you know, you can't really prove the production quality finished product. And then I think just having, you know, intuition of how things could be done differently. I think that helps speed things up at times.

Yeah. When the company started to really take off, yeah. Did the CEO job become more fun or less?

Because I think it could, but I'm sure people obviously, yeah.

The dream.

Yeah.

Yeah. Is you are part of a high growth company as the CEO and founder. That's right.

That's right.

But I, from, The conversations that I have almost every day.

Yeah.

It's, I think there's a bigger burden than most would realize.

Yeah. I, I actually don't think the CEO job is super fun. You know, it's not like a joyful job. You know, you, you typically have a lot of like bigger problems that have to be solved. There's always more pressure. It's never, um, you know, I can imagine it depends on your definition of fun, right? I think that people who, uh, you know, the people who are drawn to it, you know, I think there's a set of different reasons, right? One is, okay, you're trying to accomplish something. The other is you just, you know, you like the ego side of it. You know, there's probably others, but I think the, um, you know, I think certainly being a software engineer is more fun than being a CEO.

Uh, you think so?

Oh yeah. Yeah, absolutely. Um, yeah, but it depends what you enjoy. Right. But the, you know, for people who enjoy software engineering, you get to just do that. Uh, for, you know, for the CEO, it's like whatever the biggest problem is, you need to get that solved.

But then, but you enjoyed software engineering.

Yeah. Yeah.

Why didn't you just keep doing that?

Yeah, it's a good question. I mean, ultimately, you know, for me, I always want to like, you know, solve some problem. So we were working on this thing. We wanted to solve this problem. What do you have to do to solve a problem? Well, we had to start a company. What do you have to do to make the company successful? You have to do all these other things. So you kind of fall into it that way. It's not a lifestyle job is what I would say, at least not the enterprise CEO. I think there's versions of this where maybe you can be off on your island and think interesting thoughts and somebody else runs the company. But I think actually the best enterprise CEOs, it's a pretty, it's hard work. You're traveling, you're meeting the team in different places, you're visiting customers. You're solving whatever problems are in the business. You know, it's, it's a, you know, it's a workhorse job for sure.

Do you feel like you have the juice that you did 10 years ago?

Yeah. Yeah. I, I, yeah, I, I definitely, I, I mean, if anything, I think the biggest difference is the skillset has improved substantially. Um, you know, I, the, the challenge as an early founder is like, you're just, unless you've been a CEO before. You're not really good at the basics of the job. And so you're both trying to do something really hard, but you're also just trying to learn how to do it at all. Yeah. So I actually think that helps a lot in terms of just getting stuff done. And then I think if anything, the workload probably ramps up as the company gets bigger and more complicated. I mean, it certainly hasn't ramped down.

You work more now than year one?

It's probably about the same. I mean, I feel like any of these jobs, you kind of max out on what you can do. And after that, you have to delegate or let it slide or whatever it is. But it's going to fill the time that's available. And that happens pretty quickly. There's no point in a company where there's nothing left to do.

Yeah. Do you find pockets of time? Now that are like sacred for you?

Yeah, yeah.

Do you have a notion of sacred time?

Yeah, I— well, there's two things. I mean, first of all, you know, I have a— I also have a life. I have a wonderful family that I love to spend time with and friends that I do things with. So, um, you know, so that exists, right? And it's, it's probably less time for that than it would be if I wasn't doing a very intense job, um, you know, but I still really care about you know, all of those relationships and all of that.

Do you create intentional space for it?

Yeah, yeah, yeah. I think if you don't— well, you know, I, I think, look, for any of these very demanding jobs, I, I think it will eat whatever is available, right? And so you could theoretically, you know, you could work, uh, 110 hours a week and you still wouldn't be done, right? And, you know, whether or not you're making things better in that 100th hour, I don't know, you're probably pretty exhausted. But, um, you know, so at some point it's about, you know, you have a capped allocation of time and you're directing that at the things you think are most important to get it done, right? And that is going to be what it is. And so I think, and I think that's how, I think that's how any kind of executive job ends up working where you're just like, okay, this is, you know, this is the, this is how we're allocating time and you're kind of rearranging that to try and focus on the things that matter. Yeah. And that's, you know, that's the only way to do it.

I think I've heard Eric Schmidt say in an interview that his sweet spot is probably 62 hours. Like he's, his like some formula that he has where he is like anything above 62 is just completely waste, is completely wasted. And 62 is like, I'm yeah, fully, fully loaded.

Yeah. Yeah.

Ah, that's an interesting framing.

Yeah, that's interesting. I mean, so first of all, I've never found, you know, people always say that they're like, oh, it's not productive to work more than X hours. I've never really found, I mean, at some point you have to sleep, but I've never found that like, oh, if you do more work, you're actually going backwards in productivity. Maybe it's not your most valuable hour.

Right.

But you know, is it sustainable? There's some, there's some point at which it's not sustainable, right?

Or not.

Not a thing you could keep doing for multiple years.

Has it always felt sustainable for you over 10 years?

No, I always work. I felt like I've always worked in 2-year sprints kind of where you're like, okay, this is what we need to do in these next 2 years. I can definitely do that. Beyond that, who knows? And I think that's easier for me at least. Some people have some grand multi-decade plan, I'm sure. But— And then after 2 years you're like, Yeah, there's always some new thing that, that has to be done.

Take a beat and then you're like, all right, here's 2 more years.

Yeah, totally. Totally. And then, yeah, you know, I think in, you know, at work, I always think it's important to have some things that are fun that you're excited about. Like what? You know, for me, it's always something. I always like these new product initiatives, the kind of early stuff. You know, I think that's very fun. Um, you know, trying to get some of the early things working. Get customers to use them. It's always the messy time. I mean, parts of it are often very frustrating, but I like it and I feel like, okay, I add some value there. So I like, and so I think it's important, you know, even, you know, I think it's always important to have disproportionately do a little bit of the things that you like doing.

Yeah. Like some outlet of, I was like, uh, what was I reading this? They were talking about how at some point in Amazon's, you know, it was like public and things were going okay.

Yeah.

And then Jeff wanted to do the phone.

Yeah.

And nobody really thought it was a good idea.

Yeah.

Except for it was just an outlet for Jeff.

Yeah.

To be able to do something to keep him engaged.

Totally.

And they were like, even if we burn $1 billion, but it keeps Jeff engaged.

Yeah.

Like, that's probably a win.

Yeah.

You know?

Well, Yeah, that's right. They never got that phone to Clover, did they?

It just got announced that we just led the, uh, B of a company called Harmonic that, uh, I don't know if you've seen it. It's like a math-based, like they're going to go to the international math competition and go solve math problems with their LLM. The LLM is going to compete with, with like these smartest mathematicians and they're building a math foundational model to go solve the hard math problems of the world. And make a bet that you can do a lot more once you've done that.

Yeah.

And, you know, Vlad from Robinhood is the chairman, but like involved.

Yeah.

You know, but he's not like a day to day. And then, you know, like there's all these like, you know, Brian Armstrong is doing New Limit, which is like, you know, there's like these side quests.

Yeah.

Again, like in the spirit of like outlets.

Right.

It's like nobody ever thought before until Elon really that outlets could be other companies.

Yeah.

Like that was allowed. Yeah. You know, and he's proven like, well, it turns out like it is allowed, you know?

Yeah.

Hey, do you ever think like, ah, no, not for me.

That's too much. I, I always feel like, um, but I, I don't know. I mean, my, my feeling has always been, you know, you should really do the thing full-time and full engagement, right? So the models where, you know, you have some COO that runs the company and the CEO goes and thinks about the future. Um, you know, I think it's a little irresponsible.

Hmm.

You know, like there's some place where all the parts of the company come together and if it's not the CEO, it's somebody else, then, uh, you know, did you, you know, are you, are you getting the best person for that job and or are they able to do it as effectively as they could?

That's fair. But let's just say one of your best employees at Confluence.

Yeah.

Is like similar to like what happened at LinkedIn, right?

Yeah.

They're like, Jay, I'm gonna go start this company. Yeah. Can you help me?

Yeah.

And you'll be like, yeah, great. You want me to introduce you to venture capitalists? Capitalists, whatever. And they'll be like, no, no, no. Like, can you be involved? And you're like, man, like, I love this problem that you're solving.

Yeah. Yeah.

You know, they'll be like, well, Jay, can you just like, you know, join me on the board and spend, you know, like some time helping us raise some money and we can like iterate with us and be the chairman.

Yeah.

Don't be involved on the day-to-day, but like be the chairman.

Yeah.

And help us with some like brand credibility. Would you take him up on that?

Um, you know, I, I'll meet with people periodically and try and help 'em, but like in terms of really helping, yeah, like really getting in there and doing it, the answer's no. I just, I, I think you have to have some, some like focus and commitment.

Yeah.

I, I think it's really easy in Silicon Valley to get distracted by lots of little things.

Yeah.

And just not do anything that well. And so, and it, you know, I, I feel like it would be, it's like irresponsible to the people, you know, inside of Confluent who are working full-time there if the CEO's off.

Yeah.

Doing whatever else.

But here's the counterargument to that. Yeah. In the Bezos example.

Sure.

It's like, is Jay at 90% capacity?

Yeah.

Or commitment?

Yeah.

Better than no Jay.

Sure.

And if what it takes—

Sure.

To get Jay to stay here is 90% capacity and that 10% goes to some side quest that he's doing.

Sure.

Is that worth it?

Yeah. Who knows? I mean, it's, it's easy to tell yourself a story like that. Totally. Totally. But at the end of the day, I mean, you know, and there's different types of companies, but I, I feel like, um, you know, we're in a fairly demanding business. And so I think it's just really easy. It's hard enough with full-time engagement and like a very high level of energy to like make everything go well. I think it would be very difficult with a couple of side quests going and the venture fund on the side and the second company or whatever to really keep things on track. And at least for me, as I was saying before, I've never found that the marginal hour of effort and time doesn't help. And so I think you kind of have to make some choices about what's most important, otherwise you just end up kind of very diffuse across a lot of things.

Yeah. How do you run your days? Like, I'm curious, like, gimme a day. What time do you wake up? What do you do when you wake up?

Oh, I get up early and, uh, go, uh, yeah, probably about 5:30 and then—

Oh, like actually early.

Yeah. Yeah.

For an engineer, especially early, early.

Yeah. Yeah. Yeah. And, uh, and then I go work out and then, uh, every day. Uh, almost every day. Yeah. Um, you know, as, as long as I slept well. Um, and then I, yeah, then I come, uh, come work for, you know, the, chunk of time, you know, either going to the office or from home. And, uh, um, usually that's the bulk of it. So, and some, some mixture of meetings and focus time.

But like, okay, you work out.

Yeah.

Let's go like actually detail through it.

Yeah.

You work out 5:30, you're done at 6:30.

Yeah. Uh, yeah, yeah, yeah. Around there. Um, ish. Yeah.

You go home, you're, are you working out at home or are you going to the gym?

Yeah, I go to the gym. Go to the gym in the morning and, uh, yeah. And then come home and have have, uh, you know, coffee. Assuming there's no evening thing, then, you know, hang out with my family.

Did you do the coffee before you worked out?

Yeah. Yeah.

Are you into the, like, creatine and all that yet? Have you done all the Bryan Johnson protocols?

No, I'm not on the full, uh, Bryan Johnson protocol. No.

Okay, okay. So you just go do a normal workout?

Yeah.

Come home, breakfast with the kids, family? No, you don't see—

Yeah, no, I just eat on my own. The kids, the kids are now teenagers with probably busier lives than me. You know, they're off swimming and going to school and doing whatever.

When you work out, do you listen to things?

Yeah, I actually do. I go to like a workout class. I do.

Okay.

You know, it's a cliché now, but CrossFit. Oh yeah. With a group and do—

you don't listen to anything?

Well, it's just whatever they play.

Yeah. Okay.

Whatever they play in the class.

When you work out, do you think about work?

No, no. One of the things I like about it is, you know, the workout's hard enough that you just really put aside everything else. So, you know, for me, I always find it's kind of meditative. You know, you just wanna clear your mind. Yeah. So I used to run a lot and you kind of do that, but you actually also just kind of think about things a lot when you're running.

Yeah.

But if the exercise is a little harder, then you really don't think about anything other than the ex—

That's why you switched to CrossFit.

Yeah.

It's more rigorous and therefore you can turn your brain off.

Yeah, it turns your brain off. I think that's really nice to do something that's hard And, you know, physical, not intellectual. And, you know, you're kind of very present in whatever you're doing for at least that little chunk of time. And then you kind of go on with the rest of your day.

And when you go— so then let's say you go to the office.

Yeah.

Do you have a meeting start time that's ideal for you? Like not before a certain time?

Yeah. Yeah. I try to keep it to 8 a.m.

It's pretty early still.

Yeah, yeah, yeah. We, you know, but, um, you know, the company is very global, and so the reality is if you want to coordinate with people in Europe, you could be doing calls all night. Yeah, yeah. There's, um, you can't be really picky about the hours. You have to have some early mornings and some late nights, or not get in much time with people who are in different time zones. Yeah.

I'm curious, I was with, um, Henry Shuck the ZoomInfo founder.

Yeah.

Who I think is like one of the GOATs. Honestly, I love Henry. He's a great person. He's a great CEO.

Yeah.

And I was at his house in Boston.

Yeah.

And it was me, him, and his daughter having dinner together.

Yeah.

And it was like actually like a really nice moment of like a public company CEO just like sitting down with his family having dinner.

Yeah.

And I was like, how often do you do dinner at home?

Yeah.

And he was like, almost every night. Yeah. And I'm like, can you get away with that?

Yeah.

And he's like, if I travel, I try and make it in and out.

Yeah.

And the reality is like, I'm not traveling that much like I used to.

Yeah.

And he was like, now I've moved every dinner meeting basically to like a coffee at 5:00, right? Or a lunch or whatever. He's like, I don't even think people want to spend 3 hours with me. And I don't think we want to be eating when we're talking together. Yeah. He's like, so I have dinner at home almost every night.

Yeah.

And I was like, oh yeah, that's pretty good.

Yeah. Yeah. I, uh, yeah, I feel like I end up with a fair number of dinner things, but not, you know, yeah, I eat at home a lot. But, uh, now, you know, the kids are so busy that like whether or not they're eating dinner, it's not like family dinners. Totally. Totally. But it's not big. I actually would like that. I think, uh, my wife and kids are probably so busy. I'm the weakest link. Yeah.

Yeah. Yeah. And then what time are you in bed? When you go home, what time are you in bed?

Certainly by 10:30. Okay.

That's not bad.

Yeah.

Do you work until you go to sleep?

No. No.

Like, are you in a bed laptop guy?

No, ideally not. Every, I mean, every once in a while you're on email or something, but you know, I always find it hard to sleep if I, if I do work stuff right before, then I'm just, you know, that won't turn off at all. It won't. No, no.

And is there like a buffer that you give yourself to?

Yeah. Yeah. I usually, I usually try and leave at least the last hour and a half, 2 hours.

That's pretty good.

Yeah, totally.

Go on do not disturb or something.

Yeah. Yeah. So sometimes I'll go eat and I'll have a little bit of things to clean up at the end, you know, do a little bit of work, some whatever lingering emails and, um, and sometimes nothing at all.

And then what do you do in that hour and a half, 2 hours? Like how do you fill that time?

Yeah, I, I always feel like the, um, Oh, what do I do when I'm not working?

Yeah. Like, call it from 8:30 to 10:30.

Yeah. All kinds of random stuff. You know, I hang out with my kids. They're at the age where it's like, okay, you know, you have teenagers, they're not going to be around forever, right? You know, if you're 15, you got a few more years, but eventually they're going off to college. So, you know, I like to try and, you know, just see them. I, uh, Occasionally I play video games with friends. I do, you know, just random things. I used to do a fair amount of rock climbing with friends, but I haven't done as much of that recently. So just, you know, random things.

Do your kids know like that dad is a big deal? Like, do they know that like he's, you know?

Yeah, they're completely unimpressed. Complete, you know, it's just the nature of teenagers that whatever your parents do is just the dumbest Do you think they don't care?

They like, wow, you got off that earnings call.

Oh no, I'll tell you, as I was leaving, my daughter was driving up with my wife and I was like, hey, I'm going off, I'm gonna be on a podcast. And she's like, what's the podcast? And she's like, I was like, the Grit Podcast. She was like, oh, I listen to that all the time. And I was like, oh, you do? And she was like, no, they don't care. So that's, yeah, that's, that's the basic attitude. Yeah. So, and I was like, oh. I thought it was cool. But I will tell you, when they were littler, it was much easier to impress them. In fact, the one of my— the best one was I was— there was some marketing video that had me in it. And so I was sent the draft copy. And so I'm watching this video and it's, you know, it's, it's on YouTube because that's where you're going to share the video. So even the draft is on YouTube, but password protected. And my daughter comes over and she sees me on YouTube and she's like, She was like, "You're on YouTube? How did you get on YouTube?" I don't remember how old she was, but you know— That's adorable. And I was like, "Yeah, I'm on YouTube." And I was like, "This isn't the only one. I have lots of videos on YouTube." And she was like, "Oh my God." And she was like, "How did it happen?" Like, and she had no idea that you could just, anybody can be on YouTube at that age. But I think that was the peak. That was where I peaked. It's been all downhill since then.

Has your passion for software, tech, engineering, and company building turned them the other way?

No, not, not really.

Have they gotten more interested because of it?

Yeah. No, it, yeah, they, they are not that interested in it. Um, the one loves to tell me how much she hates her computer science class. Um, so, uh, yeah, so it, you know, but I, I think, isn't that the way it is like with your parents? It's, it's really hard to be independent of them. So you're either in, you know, things you do are either in their footsteps or in reaction to, you know, like it's just hard to have no relationship to it. So you either do something 'cause your parents did it or you don't do something 'cause your parents did it.

Right, like my parents were scientists and the last thing I wanted to touch was science or math.

Yeah, absolutely, absolutely. So, but, and it's just 'cause they're such like a big part of your life, right? That it's hard to, you know, it's hard to ignore.

When the kids were growing up.

Yeah.

And you know, it was, there's 4 of you, right? You and your wife and the 2 kids.

Yeah. Yeah.

Would you talk shop at the dinner table?

Yeah, a little bit, but not a ton. You know, my, my wife was a, a history teacher, so she's not like a software person really. Right. Uh, so, so it wasn't like we were geeking out on, you know, whatever the latest, uh, open source thing was. Um, but we talk about it. We talk about it. We talked about the company idea a lot before we started it. I talked about some of the things I was working on. So yeah, we would talk a little bit about it, but the, you know, for little kids, they have no idea what the stuff is. You know, they're like, oh yeah, totally. Dad makes apps. That's their conception.

Yeah.

You know, whatever the thing on the iPad, that's what they understood. Uh, now I think they have a better idea, but, but, you know, are even less impressed.

Do you not worry about like, they probably didn't grow up how you grew up, you know, like, yeah, totally, totally. You know, you're like, you're running a big billion big company.

Yeah.

Like, they, you probably live in a pretty nice place and you can travel how you want. Like, like they don't have to worry about money. Like, it's not a thing, you know? Like, how do you, how do you, how do you relate to that?

I, I think it's a huge, uh, concern. I mean, I, I don't know, you know, we, nobody really knows anything about parenting. You know, that's one conclusion I've come to is, you know, there's a lot of advice, but it's unclear where it comes from. It's a lot of people's opinions, but it's not clear that they've like proven it out in some way. So, but I worry a lot, you know, I think people need some amount of struggle and kind of doing things on their own.

So what are you gonna do, like hand them the struggle?

Yeah, yeah, that's, I think you can't, right? I mean, it's just kind of cruel if you manufacture some hardship for your kids. So inherently, you know, yeah, I tell them all the time, I'm like, look, you know, you've got a lot of Palo Alto problems. Like they're not, they're not real problems. They're Palo Alto problems. And, but I, I think it's hard to know that because, you know, it's true for any of us. We kind of live in our own reality and it's extra true for teenagers cuz that's all you've really seen. And so it's hard, you know, it's hard to have perspective, you know? And I, I think that's always true.

You worry about it?

Um, yeah, yeah, yeah.

But I, you know, I, even if your kids have a good head on their shoulders, it doesn't matter. Still you gotta worry about it, I imagine. Yeah.

I, I definitely worry about it. I mean, I think you can only do so much as a parent. You know, I've been, you know, I think maybe you have 30% influence at best, but I think a lot of it is like, you know, kids are born with some personality that's kind of there.

Yeah.

And it could shape itself in different ways, but it's kind of a real thing. Like the, The two kids I have are actually, you know, kind of different in their personality, but they're, it's obviously same parents and kind of raised the same way. So I, you know, that was really eye-opening for me to see that. And then obviously you have probably some impact on how you try and raise them, but of course their friends have a big impact and there's lots of randomness. And so it's really hard to know, oh, you know, what you should do, right? And I think when it comes back to it in parenting, You know, even when you see all the advice, half the advice is removing hardship and half the advice is adding some kind of hardship and work and struggle. And so it's like in the end, what camp do you fall in? Uh, I'm probably more in the, a little more hardship and self-sufficiency.

And have you found gentle ways of—

Yeah. Yes. Applying some hardship, but it doesn't really, uh, it doesn't, it doesn't, it doesn't really work. And I, I don't know if, uh, I don't know if we have the follow through. It's at some point we tried to make them do chores to get money and then pay for most of their stuff just so they would have kind of an idea of what it is, even though they're, you know, at the time we started this, they were too, too young to really have jobs. Um, it kind of works, but not really. Uh, you know, I think it started because my daughter lost her shoes and I was like, how do you lose your shoes? And she was like, I don't know, I just lost them. And I was like, well, you know, we gotta buy new shoes. And she was like, well, what do, what do shoes cost? Like, "$8? Just buy some more shoes." And I was like, "Well, first of all, shoes don't cost $8." Right. And you, you need to eventually learn what shoes cost. Uh, so yeah, I think that was an example. So did it help? I, I don't know. Maybe, uh, you know, I, I think you don't find out until much later what they're really like.

It is funny, like I gotta imagine you never expected to have, like, I mean, I, all my guests are, yeah, you know, successful and billionaires and do the whole thing, right?

Yeah.

And I don't think you realize until you're there, the like weird problems that you start to have, like that you just probably never expected. Like, all right, we're going on a family trip, for example. It's like, okay, like my family trips, like we all were in economy.

Yeah.

You know, probably yours too. I don't know.

My family trips were camping. Yeah, exactly.

And now you're like, all right, like, sheesh, like I don't really want to sit economy. Yeah. You're like, I want to sit in first.

Like I've earned it, you know?

Same with my wife.

Yeah.

And then you're like, well, do the kids sit in first?

Totally.

And it's like, well, geez, like, I, I mean, we can afford flying private. Like, we could just—

what?

So are the kids going to fly private? You know, like, then you start, like, asking yourself these, like, really, like, bizarre questions that I actually do think probably exist.

Yeah.

Most of the time we're like, what a weird set of questions to be asking myself, you know?

But yeah, yeah, totally, totally. I mean, I don't know. From my point of view, I feel very lucky. And I think the kids will probably be fine. Yeah, I think kids are pretty resilient. You know, they can go through all kinds of bad things and come out fine. And, you know, growing up in Palo Alto is not the worst thing.

Would you hire your kids?

Uh, I— not right now. Um, but, you know, I think eventually they'll be great. You know, I, I don't know. It's, um, I always think I really like teenagers. You know, it kind of depends how you think about teenagers. Some people don't like them. I think they're great and I, I really like my kids. I think you can kind of see the outline of what they're going to be like when they're totally grown up, but not quite right.

Yeah. What's your failure mode on hiring generally?

I think I am a little bit too risk-prone in that I would like somebody who is potentially amazing but possibly awful. I don't know if it's bad, But I just, I am, you know, I've noticed versus certainly pretty good. Mm-hmm. And I, you know, I have a question myself sometimes whether that has played out perfectly.

If you had 10 candidates that you made that were the high variance, yeah. Could be great or could be awful.

Yeah.

How many of those 10 do you think turn out to be great versus awful?

Yeah. I mean, well, okay. First of all, could be great doesn't mean necessarily great. Fair. Um, but yeah, I, I feel like it's probably a 10 to 20% bad hire type situation. And of the rest, you know, maybe it's not all amazing, but, but good. Right.

And then a few amazing.

Yeah. Yeah, absolutely.

And you take that math, right?

I think so. I, I don't know. I don't know.

I mean, it is, why wouldn't you take that? Like, why do you question that?

I do think bad executive hires are a pain. And especially when, you know, in the fastest growth parts of the company, you end up with like a lot of people that probably shouldn't have been hired or bad, you know, bad decisions that are difficult. But, but yeah, I've always, I've always liked that. I always like to work with people who are maybe a little bit more interesting and potentially amazing. And so like, at least for me, I've, I've felt good about that.

Do you feel like now you'd feel more comfortable taking the basket of 10 or in the early days you'd feel more comfortable taking the basket of 10?

Yeah, I definitely haven't gotten less risk averse. Right, right. Um, you know, I, I think probably, I think one thing that helped is I definitely got more clear. You know, the, the challenge hiring executives early on, if you found a company, is like, you literally don't know what these jobs even are. And you've probably never worked closely with anybody who did them. So you're like just the least qualified possible person to make the evaluation. You're trying very hard to learn and calibrate and whatever, but you just don't know what you're doing. And then, you know, now, you know, the thing I've always tried to do is like, okay, if there's a, you know, an executive leaves the company for whatever reason, I'll try to run that function. Almost always. And I think that's a really good practice because then you're like, "Oh, okay, this is what this job is, right? This is what they do and this is what they have to do and this is how it would go well or not well." And I think if you do that and you know enough people who do that job, you can get pretty good at being like, "Okay, this is what we need to be successful. This is what really matters." And that's how I think you can avoid the list of 15 must-have characteristics or whatever and just not really knowing. And so yeah, I found that really useful. And I think you just learn, it's part of just getting better at the CEO skillset is literally learning each of those disciplines. Like what does that person do and what makes somebody good and how can you tell and what do we need and what's the type of this that we need and how is somebody going to be successful here or not successful? I think just really building that knowledge, I think is a big part of the CEO skillset. If you can ultimately do that and assemble a good executive team, then you're going to do okay.

How long will you sit in that job for?

Until we hire somebody.

Are you serious? Yeah.

Yeah.

So if your president leaves.

Yeah.

By the way, Erica.

Yeah.

One of my favorite execs on planet Earth.

Yeah. Yeah. She's great.

She was the 5 years there.

Yeah.

—let's just use her as an example. She's just like, just stepped away. Yeah.

Yeah. We had, we had somebody in, uh, you know, under her to kind of step up. Got it.

Okay. So you, so you—

so that was an easy one. I'm, I'm literally—

and if an exec search goes for 9 months, you will be the VP of Finance or the CFO for 9 months.

Yeah. So I'm, I'm running the engineering team right now.

Okay. But that's like kind of second nature for you. No, but I, before that I ran the people team.

For, you know, the HR team. Uh, for how long? Uh, you know, however long it took us to hire somebody. 5 months. Are you serious? 6 months? Yeah.

You'll run it?

Yeah. Yeah. I mean, not, um, I can't, like, you'll absorb those directs? I, I'll rearrange it a little bit. So, you know, if, if somebody had 10 direct reports, I probably can't add 10. So I'll, you know, I'll fix it up so that I'm, uh, it's a little bit more manageable. I, I think it works really well actually. You know, it's, it's time intensive. but you end up learning a lot about that function. And then I've learned how to fix things up kind of in the interim periods a little bit. You know, one of the things I've found is it's very hard for a new executive to come in with confidence to make a bunch of changes for a bunch of reasons, right? It's hard for them. You know, they don't want to rock the boat too much with the people who are in the team. They may not have enough have like context to have confidence. And so in that interim period, I have a lot of credibility already built with the team, so I can make changes that I think will be, that I am positive will be needed and that will be harder for somebody to do before the new person comes in. So I feel like, give me an example. Yeah. You know, um, you know, sometimes it's kind of organizational structure, you know, sometimes it's people who I think shouldn't be there. You know, sometimes it's promotions. Yeah. Sometimes it's prioritization or other things. But I think it can make it, um, you know, I think it's actually much better for the person coming in to come into something where it's okay, there's a lot of work for them to do, but it's, you know, you've kind of fixed it up a bit for them.

That's interesting. Like if there's some weak people in the team, usually the new exec is now like, all right, go figure out if these are the right people. You're like, hey, if there's some obviously stragglers.

Yeah. Yeah. Obviously I have to have confidence. Of course. You know, to do it. But, but I, I just feel it's, it's hard for someone coming in to be confident. In what they're seeing, and then they don't feel that they have as much runway with the team because they're new, right? And so they don't want to, you know, rock the boat too much. They'll do some things, but they're, you know, won't be quick.

You think they're more trigger shot? Like, I have heard, even in my own experience hiring people, my general advice is like, hey, don't do anything for a couple of months. Yeah, yeah. Just because like there is some of these things are broken, But some of these things are by design a little bit messy and chaotic. Yeah. And you gotta learn what those are.

Yeah, I think that's right. So, um, yeah. And so, so, you know, the way it works is like, okay, let's say there's an area that's not perfect. That executive is gonna leave, right? Um, then you're running it, you know what's broken. If you don't change anything and you bring somebody else in, they're gonna start fresh doing the assessment. You're gonna be like, oh, here, I, this is kind of what I see. It's gonna take them another 3 months. So that whole time period, you know, it's like a year of bad, right? Versus if you just kind of fix it quickly, you can't fix everything, but fix what you can. Um, I think it's much better. And, you know, having to do that makes you really learn how that part of the organization works. It, um, and doesn't work. And I think it makes you hire much better. And I think it's better for the executive coming in because they kind of know You know what they're getting into and they're coming into something that's, you know, in reasonable shape. That's true.

But like, isn't there a risk if you're running marketing and they're like, Jay, we want to do something around AdWords or some billboard campaign or something, right? Some big strategic thing. And you're like, I have no idea. Yeah. Yeah.

But, um, there is. And so like some things you'll get wrong because you just don't know the discipline as well. But your job is to indirectly manage somebody who runs marketing. So you have to know enough to at least understand the big thing. And, um, and, you know, I think that's how you build the understanding. And there's some things you'll do better. Uh, one of the nice things about being CEO is you, you know, you have more ability to help interaction with other teams. So a lot of things that are holding teams back, you can actually fix better than the person who would be there otherwise. So there's some things you'll be worse at. There's some things you'll be better at. Overall, you're worse because you don't have enough time. To do it, you know, 40 hours a week or whatever it should be. But I think it's actually a really healthy thing. I think the, you know, look, the CEO job is kind of ultimately kind of integrating a lot of these functions. And so you have to know, you know, you have to know enough to be dangerous. And if you don't do that, I think it's very hard to manage executives because you just don't know what they're, you don't know what they're doing or what they should do or how they would do it or so on. You're never going to know it as well as they know it, but you have to have have, you know, you have to have some feel for what that is. And you know, and you'll still make the decision even if you're like, I don't know. Yeah. I mean, like, I'll, I'll only do things, you know, there's some things I'll hold off, right? So if we're making some kind of, hey, this is gonna be our philosophy of XYZ, and I'm like, look, I'm probably not gonna be the person setting that philosophy in 6 months. It just doesn't make sense to make a big change like that. But yeah, if there's things that have to happen, I'll try and do 'em. And some of that maybe is wrong, some of it's probably right. Usually you're just going after the things that are kind of obvious that can be improved. And I think that works. And so I've gotten more, I've always done the manage the team. I've gotten more hands, at first I was very delicate in terms of like, oh, we won't change anything, everything will just be as it is. While we do this search. But, you know, I've come to believe that actually that doesn't really make sense. It's very slow. And, you know, you're usually not wrong. You're not like totally wrong in the things you're seeing. And so I think it's actually fine to make some changes. And, you know, I think the team actually, you know, usually I think kind of enjoys working with the CEO. It's kind of fun. You know, it's usually that next level down that wouldn't directly get to report to the CEO and have the interaction. So I think it's kind of fun for them. They get more context on other parts of the business. So I feel like they learn something and then I learn a lot because I don't know know how the function works. And so I have to rely on them a lot. So they actually end up being kind of mini versions of whatever the leader is, because I'm just pushing a lot down to them of like, hey, I need this, right? How do we do this? Can you help me figure that out? So I think it's fun for them, hopefully. So yeah, I think it works really well. And I think if you don't do that, I think the challenge is how do you just stay up? Stay up to date in all these areas, you know, what it is. You know, and, you know, I think you see that a lot where, you know, the CEO is ultimately just disconnected from how parts of the business work. And of course that will happen, right? There's many things happening in the company, but you have to be connected enough to kind of have some instinct as to whether things are right or wrong and what to do.

I really admire that approach. That's a great approach. Do other CEOs do that?

I think so. I mean, you have to do something in these interim So you either pick somebody in the team to kind of run it. Yeah, yeah. You know, but the, and that works. Like if you, if you're very time constrained, I've done that for sure. But sometimes it's not obvious who would run it. And you're kind of often just putting the, putting everything on ice if you do that. Totally. And, you know, it's usually, you're more likely to lose some of the good people one click down if you kind of just Totally. Pause it like that. Totally. So I, I feel like this works well. You just have to have, you know, flex in your schedule to be able to do it. Totally. Right. So like, you know, I always try and leave some time for the big thing. So, you know, and you can have maybe one big thing or two big things, but you can't have like five big things. Right. And so this is one big thing. If I'm, if I have a function I'm running, that's a, that's a chunk of time.

Yeah. Fascinating. I really appreciate you doing this. I could spend hours with you just talking about this stuff. Are you hiring? Yeah. Anywhere, any roles, any—

Yeah, it's an at-scale company, so you're always hiring people for something. So yeah, across the board we're hiring engineers. I'm hiring a CTO.

And you're doing that job right now?

Yeah, I'm doing it right now. Yeah. To the best of my ability in limited time. And yeah, yeah. And we're hiring salespeople and other areas as well.

My final closing question, when you hear the word grit, what do you think of? You know, I guess persistence.

I, you know, like keeping at something.

I appreciate you. Thank you. All right. Thanks for doing this, man. Yeah, pleasure. That's it for now. If you like the episode, please leave us a review or go back into the archives where we've done more than 200 episodes with some fantastic folks. This podcast is a Kleiner Perkins production, and I'm Juven. Thanks for listening.