4 Rules to Navigate Uncertainty & Build a Billion-Dollar Company with John Kim, Sendbird

Ultimately, the business matters in these three ways. Customer happiness Employee engagement Cash flow if you don't run out of money, if the employees aren't engaged, if the customer's happy, you'll build a great business. Then what is the reverse of that? If the customers are unhappy because your product sucks or your service sucks, employees are not engaged because of your terrible culture, terrible leadership, you run out of money. So you don't want to wait until any of those things. You want to get ahead of the problem. That's why you need to hire drivers who can add each cascading layer organization. They can always get ahead of the problem, not be reactive, but be able to design and architect a lot of those things.

I need some traction. You need some traction. Let's get some traction.

Hey what's up innovators, entrepreneurs, visionaries and disruptors. This is your Traction Podcast host Lloyd Lobo. We're a community of over 100,000 people just like yourself, on a mission to help you get the methods, the money and the madness to explode your business growth. Featuring stories and tactical advice straight from those who've done it before, like Shopify, Twilio, Asana, and many more, this episode is brought to you by Boast AI. Each year, the US And Canadian governments give out billions of dollars in R and D tax credits and innovation incentives to fund businesses like yours. But the application process is cumbersome, prone to frustrating audits, and receiving the money can take up to 16 months. Boast AI gets you access to research and development tax credits and innovation funding opportunities without the headache and red tape. Join thousands of North American companies leveraging Boast AI software to maximize cashback. Check out B oast AI. This episode is also brought to you by Launch Academy, an international tech hub that provides mentorship, resources, network and the environment for entrepreneurs to launch, fund and grow their startups. Since 2012, Launch Academy has incubated over 6,000 entrepreneurs, of which 300 have grown their startups past seed and Series A and have collectively raised over $1.2 billion in funding. To learn more about Launch Academy's programs, check out LaunchAcademy CA. Special thanks to our Podcast partner Content Allies From Podcast Production and Promotion content allies helps B2B companies build revenue generating podcast. We recommend them to any B2B company that's looking to launch or streamline their podcast production. Learn more@contentallies.com John you're co founder CEO.

Of Sendbird and quickly become the world's number one chat API. 100 million monthly chat users across the world's leading companies. Reddit, Delivery Hero, Yahoo, Rakuten, paytm. And you're a serial entrepreneur, engineer at heart, expert in the API economy. And you used to be Korea's number one pro gamer for the Unreal Tournament. So you've had some really interesting career pivots, right? Software engineer, gamer, Y combinator. Give us your backstory.

I joined university as a double E actually, not computer science because I thought when you get into electrical engineering, I thought you could create electricity and solve humanities problems. Apparently double E is where you go to create microprocessors and memory. But anyway, I pivoted to computer science just because I like building software. So back then, right after university, I actually started my first startup way back in late 2007. Really great time to start a company by the way, with the financial crisis looming right around the corner and financial crisis a pretty good filter to see who's gonna like really survive throughout that crisis. And so I did that, did my first company for about four and a half years. We got fortunately being acquired by some other company in Japan and then started this company with the buddies from my first startup. So we've been doing this for 12, 13 years now. But initially I love engineering because it had to have one of the most direct feedback loops, right? When you build a code, ship a code, compile it, run it, you get immediate feedback, right? If you have a bug, you can also fix it. But as you start to really build out a business, you start to understand the different feedback loops. When you're doing sales or biz dev, the feedback loops get a lot longer, more indirect to understand like how to navigate different like cycles of feedback loops and then start to really understand how to create values and distribute and et cetera. So I think you go from that software engineers to business really understanding how to create values at scale. So that's my career in a nutshell.

So very interesting career. You can start a number of different things based on your background. Why sendbird? What made you start the company?

I think historically still to this date, most of my career was in consumer business. B2C. I was building like games, social games and hardcore games as well as social networks, Web Services, Web 2.0, nowadays they're called Web 3, but back then it was like Web 2. We were trying to build a customer application for social network for moms, basically where you can either find other moms in your area with simmer's kids, find and use or buy and sell use baby products and then set up playdates, et cetera and we're trying to add a chat feature for our own application. This is like 2015, right when everyone's talking about conversational UI, WhatsApp, Telegram, everything took over the world. So we're trying to add a messaging feature. And at that point we had built chat like four times in our career because we were building gaming before. So our CTO back then was like, but I built chat like four times, I'm not going to build it again. Let's just go out and look for software. So we tried pretty much all the open sources, like we were on the buyer's journey, training all the different SaaS vendors and we couldn't really find the one that was optimized for mobile experience, that had a modern experience. So we ended up scraping all the things we bought and we built it from ground up. And we're running out of money. Just like again back in 2015 before getting to IC, we were running out of money. And then we heard this thing called SaaS because we were on the buyer cycle. So we started selling on the side. We did hackathon, pulled it out into SDK, start selling on the sideline. And because we've never done like B2B SaaS before, so we started, we had this like random pricing point. So we had a $50 customer, $100 customer a month and we had like 20 paying customers. We applied to Y Combinator with that idea, which ultimately become SEMBER today. So fast forward five, six years now, we actually not 100 million users today, we power over a quarter billion users, so 250 million on a monthly basis and that we power apps like DoorDash, Paytm et cetera.

Wow, what a fantastic journey here. And you've used other applications for chat and you said, I'll power the world with this. But there were some other tools at the time, right? Like Twilio and them, but they weren't serving the purpose you felt in the mobile space.

One easy way to think about Twilio, by the way, we respect Twilio a lot because they really paved the way for a lot of API companies like or so called API economy. I think easy frameworks to think about is like, think about a mobile application, pretty much like 95% what happens within the application, like we can handle that, right? But 95% of what Twilio does happens outside of the application. Think about SMS's and emails you get, right? A lot of the things what they do happens outside of mobile application. So we have to deal a lot with the UI and the UX element versus whereas Twilio does a lot of things with telcos, email, smtp, things like that. So it's an easy way to think about it. But back then we were clearly not the first one in the market. We had like other competitors, like Layer, I think they won like TechCrunch, Disrupt, they had a lot of spotlight. There were other vendors. But we ended up like starting from a different vector. Like we, because we came from the gaming background, all we thought about like how do we get to scale fitting as many people as possible into a single chat room versus other competitors were like more focused on one on one conversations. So we architected quite differently from our other competitors, which really gave us a hedge or moat around how we can build a really scalable business. And then over the years, a couple of our competitors fell apart. We ended up inheriting a lot of the customers from our other competitors that we ultimately became the leading vendor in the market today.

What made you apply to Y Combinator? Because YC is a big ground, breeding ground for some of the biggest unicorns like Airbnb and Dropbox and everything else. But you've seen some success. You're not a first time entrepreneur. Why apply to yc?

Because I was lonely. I got to Bay Area, didn't know anyone. Actually it was our second time applying for yc. We applied to YC with the first idea with the social graph or social network for moms. We didn't get in because it's like back then like hindsight 20 20. It's like so obvious because we were like four dudes from Korea who never raised kids. There are a couple of single folks in our team for trying to build a social network for moms in the United States who never raised kids in the U.S. actually, we didn't grow up in the U.S. right? So I remember like PG of program, like looking at Jessica, it's like, hey, would you use this app? And she's like shaking her head. I'm like, okay, this is how not to get in. But when we pivoted, it kind of made sense because we had built chat repeatedly. And then our partners back then was like Justin Kahn and Michael Seibel, Michael Cyborg, CEO of, you know, yc. And then both were like co founders of Twitch. So obviously they knew quite a bit about chat. So it almost like a product market fit. We had a partner start a fit and then at that point we, because we built like chat four times. You obviously knew about the problem they were trying to solve. And we're actually Building a solution that we wanted to use ourselves. So it really got us a nice win to get into ic. But ultimately the reason the key motivator motivation was a couple of things, right, because we're running out of money. We needed like a reason for us to continue to raise money but also get some validation from outside of the company to see that what we're doing is actually makes sense and we're building something people want. So we needed something to tell our investors like hey, what we're doing actually makes sense. The pivot makes sense. All the rationale we want to build. So applying to YC really gave us a conviction and the validation to our investors like hey, what we were doing actually is going to work out. So which ultimately did. So that was like a morale and corporate rationale behind why we applied to yc.

So massive pivot here. Social network for moms when none of you folks have kids or are moms.

To the world, founders had a young.

Kids to the world's number one chat API. Although a social network for moms could be really huge, but very capital intensive to build a social network in the 2015s, right? How did you get your first customers? I'm curious, how did you find these people, convince them to use the product?

I think there's a couple of great essays on this but basically it was a brute force. We tried pretty much everything under the under hook cause like and they were done. B2B. So like how do I get customers? So obviously you ping your friends and networks or into startups like hey do you need something like and thankfully like back then the zeitgeist was around like how do we add messaging feature for our own application? Because again messaging app took over the world. So thankfully a lot of these startup or friends wanted to implement chat for their own applications. So we started selling to friends and then also did ton of outbounds like we got banned by or blocked by Google G suite was keep banning our own accounts because I was sending out too many outbound emails. I'm not too proud but I don't think I spanned YC network but I did a lot of personalized email to YC networks back then. Back then the batches were still small enough. It wasn't like 3 400, it was like 80 to 100. So I was pinging a lot of YC founders and then just cold calling. Well not taking a calling but cold emailing to a lot of folks. And then because we didn't have money ultimately what ended up working out really well was SEO and content. So a lot of other founders and early employees, we took turns writing blog content and did ton of SEO because there was like we couldn't pay for paid advertising, which really helped us for the inbound engine to work for many years to come. So I think ultimately a little bit of combination of outbound and then a.

Ton of inbound early days do things that don't scale outbounds actually a great way because it's predictable, right? You reached out to a number of people, a portion of them convert, et cetera, and then content in the long term. At what point did you know that this is going to be a company product market fit?

So there are a couple of things, right? One, we started getting customers that we did not deserve because we were like when we started working with Reddit, Reddit has been our wonderful customer for many, many years. I think we were like maybe 20, 30 people back then. So right before series A, even like we're at C stage and Reddit back then had already more than 100 million users on a monthly basis. So we clearly did not deserve Reddit or pretty much any unicorn for that matter. But we start getting these inbound or Reddit was more than outbound. We started getting inbound from a lot of these massive companies who had like millions and millions of users. And back then our goal was like, how do we get to a million users? And it felt like a goal that was impossible. But we started getting ping from these like consumer application that had millions and tens of millions of users. So one, like we knew the market was pulling us and two, because we're trying to price things and et cetera, we start getting this customer who instantly doubled our revenue. We had many instances where a customer came by and we had a pricing calculator. We built it because like as an engineer, that's why you want to build. So we started putting these metrics and whatever numbers customers are quoting us, they put it in and the pricing calculator gave us like six figure acv. And back then we never sold software for six figures, right? So we, I was very nervous when I was quoting this price to customers. Like, hey, please don't be, don't get sticker shock, et cetera. I know like we still have room for negotiations. I spent like five minutes to make sure that customer was not surprised with the number. So it's like it's going to be like $400,000 and they're like, yeah, sounds reasonable. I'm like, what? Really? Just like that. So we instantly Double our revenue, et cetera. So when you start getting pulled by this customer you didn't deserve and you start doubling your revenue because of certain large customers, like okay, maybe the market needs us, we need to exist.

The poll is one great fantastic indicator where you're not forcing people to buy, but you have to also learn to sell. It seems like in a way coming from a consumer background to B2B SaaS, what were some things you learned along the way to help you sell better?

I still hop on a call with customers a lot and as the YC mantra goes, you build product and talk to customers, right? That's only two things that really matter other than hiring, recruiting of course. I never really thought of it as a selling point. As an engineer you like to problem solve. And when I hear customers problems like I want to solve them regardless of like what it is about, right? Whether it be infrastructure that you start recommending like different solutions. And part of the solution was like chat. So in the early days when I was like having this conversation, obviously our buyers like engineering, VP of engineers, CTOs and like product, you know, product managers. So like I get so excited, I'm like okay, these are all like three different problems you're working on here. Let me refer you to this like different software that's out there that's probably helpful to you. And then a couple of customers like hey, like you're like all the other vendors we talk to, they're trying to sell everything they can possibly sell but you're like genuinely trying to help me solve my problem like so. And that's how we like earn the trust of our partners. And still to this day like again most of our earliest customers are still with us because we've been building a trust and to be able to be helpful to solving their problems. And yeah, I think that's like how I saw myself was like how do I make my our customers life easier by solving their problems and then also like get paid along the way. And then you start to like learn about different Excels books like Predictable revenue, Sales Acceleration, Formula Challenger Sales. You start to read this books, I'm like, then it all starts to make sense. What am I doing? What I have been doing was basically selling. But I think we are still to this day I think we're looking the right way is to solve customers problems.

And one interesting thing is you coming from an engineering background, you're not the heavy handed salesperson, you're a consultative, you're trying to solve their problems. And if the buyer on the Other end is like you and an engineer or a technical buyer, then their guard is automatically down and you build that instant trust. Right?

Yeah. I do think there's a benefit of because we're an API company or used to be, now we're a platform company. But I do think there's a level of trust or empathy you get from customers because we've been in the shoes and we're actually, we used to be the buyer. Like we want to find a solution that we want to buy. So I think that certainly helps.

Did you have some milestones in those early days where it was like go, no go because you had the social network for moms that you pivoted into or changed direction into Senbird, but at Sanbird, did you have a go, no go timeframe where you said, hey, if this doesn't hit X, Y, Z, I'm going to move on to the next thing?

Yeah. A lot of people think like Pivot is like, like one day you just wake up, you talk to founders like, oh, we should do something else because this is not working. It wasn't like that. It was actually like a six month long gradual transition because ultimately it comes down to one. One critical lesson that I learned from my first hour was like expectation management of your employees, customer users, investors. You want to make sure that nobody's ever surprised. So to your point, you have to set certain milestones. If we evaluate this, it makes sense to go to the next level. So we pivoted, ultimately decided to fully pivot in 2015, May. That's when we did a soft launch, private beta, private alpha, basically. But the actual pivot started around November or December of the previous year, 2014. So. So we had a couple of months. It's like, can we actually validate this idea? Will somebody use us even before we build our product? Will people be want to like sign up or give us like a deal or sign a contract and two was can we actually generate revenue early on? So one of the things, I was talking to my friend who was running like a channel or a mobile analytics platform these days, but back then he was doing a whole bunch of things for other developers. So it's like an agency thing. So we asked him and he was like, yeah, a lot of our customers need this. I'm like, well then what does it mean for you? And he actually offered, if we get an exclusive deal to distribute a product in Korea market, we'll pay you. I'm like, how much? Because I need some level of dollar to go back to our Investors and tell them it's like, hey, we have this early traction, there's a signal in the market, so we need to invest more resources here. So he actually offered to pay us $100,000, which was like we had zero revenue for three years with our mom's app. So. And somebody like Dan does like a hundred thousand dollars in front of your eyes, I'm like, holy, holy cow, this is it right? Nowadays, like, okay, 100,000 is nice, but back then it was like it was the most amount of money you've ever seen in your life as a business. So we use that. So we have to like validate. Is there revenue? Is there customer early traction, Are there like feedback loops that we can build with customers, et cetera. And then so we kept carefully managed to communicate with our investors, say, hey, there's a little bit of early signal here. We're not quite sure yet, we're still going to run the main business. But here are the things we're going to test. If we hit this milestone, will it. So we've been communicating that on a monthly basis and I think around May, that's when we actually got the revenue. We actually start getting our first real use paying customers in production. We're like, okay, this is it, we have to pivot because one, we're running out of money, but two, we had real customer demand. Three, we have revenue, so we start getting traffic and users. So I think that's like how we manage the process. So took us a good six, six months.

Now you said one thing that's interesting. We're no longer an API company or a platform company. At what point do you decide to become a platform company in a journey as a founder? And what does that mean for Sendbird?

For pretty much all the B2B businesses? You start as a feature company, then you become a product company and you become a solutions company. Right. So when we started out, we were like a chat API essential, very minimal chat API company. Then we started building all these moderation capabilities, analytics, and we became a product company. Then we launched voice calling, video calling. Now we have solution per vertical, we have content, we can educate the customers, coach them, really help them become successful. Now we are becoming more of a solutions company. And then now this year we're starting to elevate. We used to focus on user to user communication. Now we're also helping out with the brand to user communication capabilities. We also not only work with the tech innovators and early adopters, but we also start to penetrate the enterprise market and Traditional businesses are trying to become more, I guess, digitally transforming. So we're trying to now tackle the mainstream market with our holistic approach of providing a solution and the platform. And then we're no longer as a single siloed product, but we also integrate with different CRMs and different analytics. They might use different marketing campaign solutions. So we now plug into existing ecosystem of software that our customers tend to use. So we're now really becoming the platform company where people can plug in different software to really aggregate all the communication or conversation that's happening on their business. You start to elevate that, but you do not want to go all the way there from the beginning. You want to start with a very concrete value proposition. Because this was the interview that I had with YC when we were applying. So like, oh, we're a real time communication solution. Michael Cy was like, no, no, no you're not. I'm like, what do you mean? Like, it's like you're so what, what do people search on Google? We're like, no, it's like chat SDK, Chat API. And Michael's like, you're a chat API company. Like, no, no. But we are more than that. It's like, no, no, no, trust me, you're a chat API company. So we ended up like switching all of our content and marketing messages to like chat API. That's how we build our internal, our inbound engine. But over time we were able to elevate our value proposition to higher level. But if we started there, I don't think we built the inbound engine that we have today.

I mean you can build a pretty big company, at least 10, 15 million in revenue, serving one customer, offering. One thing I think the focus is really important in the early days. But as a founder, how do you decide when is the right time to add additional products? When is the right time to become a solution? When is the right time to become a platform company? Because you said it right, you don't want to start there on day one. But what day is it? How do you make that judgment?

I think there are a couple of thresholds or milestones they can pick whether it be ARR type of customers you talk to. Some startups have to mature a little bit earlier. If you're targeting traditional enterprises, you probably have to go up the market a little bit faster. But you can also build a fantastic business targeting SMBs and mid market, et cetera. So it really depends on the business you're trying to build. In our case, there are a couple of Things One was like AR threshold, two was again type of customer we were trying to sell to. Like I said like digital native business. Now we're talking digital transforming businesses and then they also from the inbound or outbound self service versus self set. So you have to have this couple of different vectors in terms of how you measure the DNA of your business or core your business. So I think that's the factors we consider. But yeah, I don't like cop out, but I do think it really depends on the type of business you're trying to build.

Now I want to dive into these four techniques we had discussed for the session today. You talk about complexity science, abstraction layers, human capital framework and then building emotional capital and cognitive empathy. Let's dive into each one of them with probably some concrete examples. What is complexity science and principles of convergence and divergence and how should founders think about applying them to their business, their life?

Complexity science, you can think of it as like a simpler version would be like network science or mix of network science and chaos theory basically. But like it's the element of how the nodes and the edges of or networks interact with, with each other to create this like emergent phenomena. A good example would be like our consciousness, right. How does each neurons do not have consciousness, right. But when they started interacting with each other, you have this like mind and consciousness. Same same thing with like organizations. You think organization is just a collection of people. But when people start to interact, you have this culture, you have this like value proposition. So a combination of people can do much greater things than individuals. Right. So I think complex science is really understanding the interaction of each nose and then the network and the value it creates. So I think using that as a framework, one, two management framework that I use when I try to make decisions or when to decide when to pivot or continue to double down on the business is really two different vectors. One is convergence versus divergence, which goes in the x axis and the abstraction layer. Do you go up the abstraction layer or go down the abstraction layer to more concreteness or towards the abstraction? So convergence and divergence. I think one easy way to think about it is convergence is really doubling down. How do you continue to force the company to really narrow your focus and then get better at doing things versus divergence. Like okay, this is not working out, we want to diverge. Think of yourself as a person who landed on this landscape. Now you want to figure out and you're blindfolded, you don't know where you're headed, you don't know where the highest peak is, you're trying to get to the global maximum, the highest point in the mountain. But because you're blindfolded always, you can move around and you can figure out, hey, am I going up or down? So if you take a wrong step, you might actually start falling down the hill or to the valley, or sometimes you feel like you're going up the hill. So you want to get to the highest peak. But because you're blindfolded, you have no idea whether you are at the highest peak or you're one of those, like, local optimums. So then you have to figure out, am I stuck in a local optima? Then how do I get out of it? So convergence is think of yourself as like, I want to go up, I want to go up, then you're going up. That's a convergence divergence. Like, hey, it's actually, it's okay to go down, but I think I can bet or I have a belief that there might be a bigger hill out there somewhere. So a divergence, like letting. It's okay to go down, it's okay to lower your ar, it's okay to pivot. That's a divergence. Whereas a convergence, like, what? This isn't working. Let's go up, let's go up. Let's just continue to focus on AR or some metric that you're measuring yourself against. So I think this is true in life, whether it be building a company, figuring out your optimal career point, pretty much anything. So I use this as a framework to make decisions and decide when to pivot or continue to double down.

How do you know you don't have like a sort of false positive or you're hitting a local maximum. How do you leverage this to get out of that mindset of, hey, you know what? I may have hit a local maximum.

The beautiful thing about life is like, you know, quote from the Forrest Gump, right? You never. Life is like a box of chocolate. You never know what you're going to get. You got to really. You got to really go for it. And I learned this while I was doing a professional gaming too. When you're like, in a professional gaming or pretty much any, like, professional, like, sports, right? You're. You're in a competitive sports, you get to this, like, point where you feel like your skills are stuck. You can't really beat this next opponent. You've hit a slump, there's a plateau in your skill, and you just have to like, figure out how do you break your bad habits. You got to like reconfigure your habits and really like elevate yourself to get yourself unstuck from that moment. And then you start to grow again. So you have to go through these multiple cycles of like getting stuck and getting yourself out of local optimum to be able to compete at a global level. So again it's like re unlearning a lot of your bad habits or old habits and relearning new things. So it's pretty much same thing with business. When you start to measure a couple of key growth metrics. But whatever you do, whether it be channels, marketing, sales, whatever you do, you feel like your growth has such a slow down. Then like you're getting very, very close to local, local maximum. And because you're not a multiple billion dollar company or multiple billion dollars of revenue, market's pretty big out there. Whatever you do, market's going to be pretty big. How niche of a business you you run. So if your growth rates start to slow down, then you know they're you getting very close to local maximum. Then you have to figure out how to get myself unstuck. Is it a new channel, it's a new product, new leadership. So that's how you start to make yourself. It's like whatever you do, your growth rate starts to stall.

Two very important things. You say market is pretty big no matter what you do or in many cases at least if you're in a venture backed startup world. And then the second thing is when you start hitting plateaus, what metrics do you use to determine to go up or down?

Ultimately the best metrics like whatever the customer find value in you. Right. Let's say if your customer think number of users is the most important value that they're going to measure, you should measure yourself against that. If you're in a data cloud storage or data analytics, like how many megabytes or gigabytes or data you process or how many rows of data based you're processing. So think about, think through the lens of the customer's value. What's the value that they're measuring yourself. And then how they decide to buy from you or not is ultimately the value that you're creating. So measure yourself against that. So we internally we track a couple of different metrics that we think is a good validation of customer creating customer value. We measure things like daily engage users, how many people are not just like connecting to chat or connecting to our platform, but actually exchanging messages or reading, actively reading messages or sending messages. Right, things like that. Or from business perspective we also measure things like ARR, gross dollar retention. So a couple of SaaS metrics, plus whatever the product usage, product metric that you're trying to measure and see if you can continue to grow that or not. And again, I remember, I think Twilio, I met with a lot of Twilio investors and Twilio, I think initially their series A deck, something like their market size was like 200 million or 400 million. Obviously they're doing much, much bigger now in terms of pure revenue. But their entire market size for CPAAS back then was assumed to be hundreds of millions of dollars. Obviously that turned out to be quite false. Market's a lot greater than that. So I think that's what I'm saying. Market's usually bigger than what you assume is. Even the investors underestimate your market size. Even the founders underestimate your market size. So have a belief that there's a lot of people out there that are willing to buy whatever you're building. So keep on focusing the North Star metric that customer value the most.

I'm having a hard time framing or understanding the concept of abstraction layers and how you've used it to fit into this concept of convergence and divergence.

Yeah, so convergence divergence is like again, the X axis abstraction navigating abstraction layers like the Y axis. So one of the most important thing in a hypergrowth startup is like, can you move between the different abstraction layers? To give an example. Right. In the early days of founder, CEO, you got to do everything. I still remember the days when I was ordering stuff on Amazon, hey, we need more power cores, we need to order this monitor. And we're debating is it going to be 24 inch, 27 inch and 27 inch more expensive what hers, what refresh rate you want to get. So you're like really at the ground level, at the concrete level. And then once you start to build with people, let's say 20 people, 50 people, et cetera, you have to move up the abstraction layer, otherwise you have no leverage in terms of like scaling our business. And also especially people who are, who tend to be great ic, individual contributors have most difficulty going up the abstraction layer because they know how to get shit done, they know how to do the work in the right, right way. So they want to still managing the gory details, which sometimes doesn't really, really work out when the company's growing really, really quickly. So you need to figure out how do I remove myself and go up one abstraction layer so you're no longer directly doing the work. But you are working through people and systems and that can be quite hard because again, you're removing yourself from the feedback loop. Before, whenever you did X, you get immediate feedback of Y, but now you're like doing X, asking people to the X. And then you have to wait a couple of days and then maybe a week or a couple of months to get a feedback. It's like, oh, it's like worked out and you have like, you have no connection with the direct feedback loop. Right. So that's like when I'm talking about abstraction layer. Are you okay with that? Some people are not okay with it. Some people love going from 0 to 1, whereas some people like going from 1 to 10 or 10 to 100. So it's like navigating the abstraction layer. So once you have the managers, then you'll end up hiring directors, VPs. Now you have multiple layers, abstraction layers. It's going to take ridiculously long period of time and whatever you do, it's going to get diluted along the way. So you have to work through the influence and the layers of people to get something done. And so you have to now build the systems and culture to make sure that things go in the right direction, but you're not actually doing the actual like direct work. So that's what I mean by navigating through abstraction layers.

Going from an individual contributor when you're a founder, sending everything from email to ordering coffee to then becoming a manager and then having to level up to an executive is very hard. And not a lot of companies can make that journey. What are some things you've done or things you've learned along the way to make that journey successful?

I think there are a couple of things that you can use. One is ultimately it comes out to people because the only real leverage you have as a leader or a manager is your people. Because again, you have to navigate the abstraction layers. And the only way to really navigate the right abstraction layer. Think about our own business. We are API company. If our API is not doing our job, our customers are going to come in and start talking about the features we have to implement and start asking if there's like a, what's the root cause of this, like outage? Or they'll try to like really understand our code. And that's not. That means we're failing as a business. As an API business, if you do our job right, then customer only have to care about the documentation and the API calls they make and the results they get because like they can go to Sleep at night without having to worry about what's underneath the hood. That means we're doing our job right. So also when you hire the right people, you can't like really delegate and believe in these people because they'll get the job done. And the only things when they really get out of hand, they escalate to your abstraction layer. But pretty much all the other like P2, P1, P2, P3 problems they'll solve, it only becomes like P0, then they'll escalate towards your way. So you're also looking to hire the right people who can also become like an API within your own companies. So I think an easy framework was used by Frank Slootman, like the CEO of soleplake, like are you hiring drivers or passengers? What I look for in the right leaders, at least at director levels and up, is we look for drivers who can be proactive, who can figure out problems, identify problems before even they happen. And when the problems do happen, they can problem solve autonomously. So we are looking for those drivers. Whereas in the IC level you still want to give them, coach them, so that they can, you can distill who is the driver or passenger. And some you also do need passenger along the way. But at least on the leadership level, you want to find the driver so you can continue to increase the leverage of your organization.

That's a great way to look at drivers versus passengers, but you need both, right? And you're saying at the leadership level you're looking for drivers. Any mistakes to watch out for that you may have learned the hard way. When you're making this journey, there are.

A ton never compromising on your core values, because core values are very useful tool. Because if you don't have a core values in your organization, what ends up happening with is people fight over different personal values. Some people may like, hey, I believe in working a hundred hours a week. Some people almost like, no, no, you only need to work 40 hours a week and you got to work life, balance, et cetera, those values will never converge because it really is, you know, it's yourself, you're being authentic yourself. But by having core values, you can align everyone to that value. Because when you hire people, you're looking for those alignment to your values. When people join, they're agreeing to the values, they're subscribed to the core values that you have. So by using those core values, you can start like really aligning the leadership and then also help people run autonomously. They can make decisions as long as they're aligned to the core values, they can make the decisions and then really execute without all this like micromanaging, et cetera. So having a core value site, super helpful in terms of recruiting, scaling up your team, and then letting the organization run autonomously.

Autonomy is one of the key things that people crave, right? You don't want to bring on people and then micromanage them and tell them what to do. What is the one thing you've learned that's been very helpful in creating autonomy for your team?

I think there's a good book out there written by Daniel Pink, a book called Drive. It talks about intrinsic motivation. And I think the three factors there in the book is called amp, like autonomy, mastery and purpose. So you want to give purpose to people that everyone's part of is something bigger than themselves. Mastery so that people can also grow and then autonomous. Like you want to delegate and give empower people so they can make decision on themselves. And then there's a fourth, fourth dimension that's not mentioned in that book called relatedness. So I think the acronym is like RAMP now R A M P. So you want to also become part of community and part of organization that you can, like, really feel, you know, as part of a community. So you want to, like, make sure that when you're managing, quote, unquote, managing people, or if you're seeing people are being demotivated, you have to figure out, like, out of these, like, four columns, which needs are not being met. Sometimes people tap out not because they lack autonomy, but because they've tapped out in terms of mastery. They've been doing this for many years. They're not learning anything new. So when people are about to leave, usually it's a sign that maybe two to three out of those columns are starting to not really work out for them. So as a manager, you're going to be very cognizant of out of those four columns, which one are you speaking to? So once people have intrinsic motivation, extrinsic motivation are like followers, salaries, your title. Intrinsic motivation is like what matters to you, right? So as a manager, once you get people, or once you set up an environment where people can find interesting motivation through those like R A M P, then people can pretty much operate autonomously. That's when you really need to, like, back out. Like, hey, here's our goal, here's why we're doing it. You figure it out. People can then operate autonomously.

Tell us more about the human capital framework that you've leveraged in your business, in your Career, your life.

To explain a little bit about what human capital means, there are three pillars in human capital. One is intellectual capital, three, social capital. Three is emotional capital. Initially, when people are just starting out their career, people obsess over intellectual capital. Intellectual capital means what your knowledge and experience versus social capital is like. Who knows you? Not like who you are, like who knows you in what way? So it's your leadership, your basic influence and reputation of the people you work with and probably the market. And emotional capital is like, how do you motivate people? What motivates you? So being able to be like really manage yourself from a mental health perspective, but also be able to motivate others and also take action when needed versus just studying academically. So it's really balancing it out. But the common mistake is the more junior you are, people optimize for intellectual capital. But ultimately what becomes even more important throughout your career is the social capital and emotional capital. Because rarely you see people really understanding how to accumulate your emotional capital and also social capital too. Because when people jump ship every one to two years, what they're optimizing for is like fancy resume, great titles, more salaries. But what they don't recognize is they're sometimes letting go of the social capital before they actually accumulate. Because when you, if you think through the lens of an investor or any executive hiring a VP at a company, you obviously go do the reference checks right back, channeling everything. That's like a very standard practice. What has that person done in their previous job? What achievements have they done? What are the things that they actually initiated and carry all the way through and for the people that they can bring along, let's say you hire a VP of sales. Obviously you're not just hiring that single individual. Expect that person to bring on regional directors, you know, all the ICs of sales reps, customer success people. Who are the people that are going to trust this person enough to join this company? Right. This entire you're hiring for the social capital, but if you, let's say, hop, jump ship too often, you're not really gaining any social capital. So what I generally recommend to people early in your career is like, not only think about intellectual capital, which obviously will come from time and effort, all those things, but also make sure that you're accumulating enough social capital as well as emotional capital.

Now let's dive into emotional capital, cognitive empathy and the trade offs of agreeableness. What is that? How have you used it in your company? How should we think about it?

Yeah, there's a good personality assessment framework called big five factor model or Ocean model. Basically it's like openness, agreeableness, conscientiousness, et cetera. So people should look it up. But it's more reliable and has a high ability as a model than let's say Meyer, Briggs, MBTI or Enneagram. Basically one of the factors is called agreeableness. Basically how agreeable a person is. Now you think a disagreeable person is bad, but actually agreeableness is negatively correlated to socioeconomical outcomes. So people who have low agreeableness tend to become leaders. And not always because other factors matter too, but they there tend to be a little bit more independent thinking. But the downside of that, and I had again I faced this challenge myself was like there are two different kind of empathy. Obviously you need good EQ and being able to read the room and have good empathy to be able to command good leadership and then having build accumulate social capital. The issue with that is low agreeableness. People tend to do better in again social economical outcomes. But they again because of the agreeableness they tend to rank lower in empathy. Now there's a way to fight that. There are two different kind of empathy. One is called emotional empathy. Second is called cognitive empathy. Now emotional empathy is like when you see someone in the eye and the other person start to cry. You don't know why, this person is very, very sad. But you feel this sadness, right? You, you resonate, you have this empathy. It's like and you can cry with this person even without knowing exactly why. That's emotional empathy. That's your mirror neuron. Being able to react to someone else's emotion very very directly. Now people with low grievableness may not have that. Then you have to actually augment yourself with something called cognitive empathy. Basically simulate yourself, put yourself in that person's shoes, like really. And then think about all the factors that are affecting that person. Like if I were in a situation with this amount of information, with this relationship, with this amount of work in this personal context too, so really understanding this person as a whole, then you can actually simulate and then be able to understand. Not like have emotional empathy, but be able to understand and actually build cognitive empathy with the person, then actually now you can actually have this empathy and be able to influence the person. This is a lot more cost inefficient way to build empathy. But the benefit is that because you understood and you consider so many factors, once you make that as a part of your muscle memory, then it becomes easier Every single time to have this like, more accurate form of empathy. And then two is like even the people with very low empathy, once they experience it and once you simulate it, you feel like then you can actually have a more sustainable scalable empathy. I'm not saying there's one, one is better than the other. I'm just saying, like, if you don't have emotional empathy, there's a path to building empathy. And then I think it's really, really crucial to have that as a leader. It's like, for instance, when I was single, I never understood, you know, why married people with spend time taking care of kids. Like, hey, that's your personal life. Don't bring your personal life to work. Just get shit done, right? But once they have kids, I'm like, holy shit. Like half of the population in the world go through this thing and it's like so costly, so painful. And a lot of work, there's a lot of happiness comes with it, but once you experience it, you have this deep empathy towards the experience they're going through. So even people with low variableness like me, can still build an empathy through a lot of cognitive empathy exercise as well as actually experiencing. Thanks.

What are a few practices you've implemented? So you're cognizant of this and you have to pause, right, and stop and think. And it's like training anything.

Here's a brain hack. So brain is a parallel machine, right? We are terrible. Our brain is terrible at understanding causations. Like there's a famous exercise if you actually, if you're happy, people smile or if you see something funny, people smile. But if you actually smile, brain think you're seeing or having happiness, right? Then your endocrine start to come out. I don't know if it's, it's been repeated through tests, but basically what, what I do was start by saying, I hear you, I understand you. I think it makes sense. It's fair. You don't necessarily have to like, agree technically. Then what happens is like your brain will find cues, reasons to agree with this person. You'll, your brain will start to rationalize this person's perspective. So, so actually you're tricking your brain to build like this artificial empathy with this person. And then your brain is pretty smart. It'll figure out a way to rationalize this person's perspective that by start saying that. Position yourself so visually imagine yourself not sitting across someone else across the table, but imagine yourself sitting next to a person and looking at the same direction by using those like, tactics that your brain will find ways to like justify and have empathy with the person. And then ask them, okay, I'm by myself, but ask them what are the things they are considering, what are the things they're hearing, listening, asking for facts. And then it's. Then your brain will do the rest of the work to really build empathy. But again, it takes a lot of practice and exercise. But over time it works out. But one of the most helpful thing is actually writing your own organization's onboarding document and see if all of your philosophy and frameworks actually connect. Because sometimes people have these like different ideas that may contradict each other. But once you start writing this out as an onboarding material, then you feel like almost like creating a presentation. Then you have to make sure that all your frameworks to fall into this bigger framework of philosophy and your view on people and culture, then it will start to make sense. Then you can weed out, okay, what's authentic to me versus like what's good idea but probably not authentic to myself or does not fit in within with the rest of the organization's values and culture. So an actual exercise that all, pretty much all founder CEOs should try doing is defining your core values and creating onboarding doc. Then you can really like crystallize your thoughts and your leadership approach.

How do you deal with empowering your teams to be more autonomous? And how do you handle your personal desire to maintain a high level of standard? And you talked a little bit about this, having that cognitive empathy and seeing things from another lens and also letting go. But how do you balance that autonomy and high standard?

This is one of my biggest, I don't want to say struggle. This is where you have to be really pick a lane and be consistent. So I talked about this with a good friend of mine who built many, many wonderful unicorns in the past. Once you pick a lane, you got to stick with it and be very consistent when it comes to core values and culture. Because people change, right? Your belief may change over time. You may read a book, you may meet a person, your value system may change over time, but you want to understand what's not going to change the next 10 years at least within the organization and really, really stick to it. And then to actually get back to your question, I, I have this gap between my bar and standards, what I expect from people, what I think is a great work versus how patient I can be. I keep contradicting myself. It's like I don't believe in people who are up and comers, who haven't proven themselves yet. And if I don't bet on these people, I'm actually contradicting myself because people bet on me before I had any experience. Investors bet on me. When I was doing my first startup, people joined my company when I didn't have anything under my resume to prove that I was a founder CEO. As a professional CEO, you can kind of come in, it's like, hey, here's my bar. Anyone that doesn't meet the bar, we're going to lay out people. I cannot do that because as a founder CEO, I got to bet on people who are up and comers, who has a potential, who has a right attitude, et cetera. So you have to build this consistency. So where I'm struggling but also believe in is we got to keep the bar high, but keep people the patience and trust so that they can actually build up to that, meet that, and hopefully grow over that expectation. Now this is a real trade off because sometimes as an organization you cannot bet on people for multiple years. These people need to step up every quarter or two quarters if you're in a fast growing organization. So ultimately it comes down to the growth rate of the organization. If your organization is growing really fast, you cannot give a lot of time to people because either they meet up to the growth rate or you have to hire someone above that like layered person so that the organization can have the capacity to continue to grow with the right set of leadership. If your organization is growing not as fast, then people can have enough time to grow themselves into the role. So it really comes down to level, level of the growth rate of organization because like as an ic, it can still give a lot of leeway for people to learn and grow. But if you're like a manager, especially like a senior management, like whatever, your bottleneck is personal, like leadership bottleneck is the rest of the organization suffers because of leadership, leaders capabilities or capacity. So comes down to the growth rate of organization. And then how much of a gap are you willing to give in terms of the gap between your standard expectations versus where they are today? And then that gap you can compensate with time, coaching, surrounding themselves, with other people, et cetera. But the primary constraint there is the growth rate of the organization or what.

The organization needs with executive hiring and leaders. Right, you said it right. You can't give them a lot of time because it could slow down the whole organization. What is the ideal time frame and what are some leading indicators that you use to figure out if this executive is going to work out or not?

Ideal rate Between a manager to IC levels like 1 to 5 to 1 to 7, right. If you get to 1 to 10, may work out for temporarily, but people start to tap out. Because you literally cannot have enough time to do one on ones with 10 people plus unless you work with them for decade plus. So you don't really need weekly one on ones. So basically you have this ratio between manager to ICs and cascading layers of that throughout the organization. Now do the leader, especially based on the growth rate. If your organization is like doubling every year or tripling every year, then you can project how many headcounts this person will need to manage. Then you have to figure out can this person elevate to the next abstraction layer in the next six to 12 months. Because when somebody becomes promoted or you hire someone from outside, they need three to six months, three months at a minimum to six months to really ramp up. Quote, unquote, right? Someone who's never really managed a scale usually takes a little bit more time, maybe a year. Even within the fast growing organization, some department may not grow as fast. Like say call it finance, right? Versus sales. Headcount's gonna grow very very fast. Cause sales is a low leverage organization where the output is scaled linearly with the headcount. So based on the scale of the organization in the next 12 to 12, 24 months of the department, you can project like how fast this leader needs to scale to the next level abstraction layer. Usually if you're in a fast growing organization, you can't really have more than six to 12 months. So that's why people say like you gotta fire yourself every six to 12 months. You got to redefine your job description after six to 12 months. In a fast growing organization. It's all if you do the bottom up analysis of that, usually it comes out to that, right? So you can't really give more than 6 to 12 months in the early days before product market fit. You can give people like two to three years because you don't know what's going to happen. Right? You may actually completely pivot your business like our case, from consumer to B2B API. So you need all these people's loyalty and perseverance almost you're in hyper growth, like hyper scaling mode. Honestly, you can't really give people more than 6 to 12 months.

What are some traits you look for or some key elements that this person is going to level up to the next abstraction layer and next abstraction layer. What are some key things, traits someone.

Needs to have the ability to navigate. Sometimes people go up the abstraction layer too quickly, so they start losing the grip of what's happening in the ground or where the rubber meets the road, right? So they navigate on the clouds, they don't have their feet on the ground. Versus some people. Actually a lot of capable people have hard time letting go of the things they used to do. I see this more often with capable people. It's like because they know what great work looks like, they have a high standards, they know exact details of how things need to be done. So they have a hard time letting go of people, trusting people and then giving enough people enough time and room to figure out things on their own. Because all great work may outcome may look similar, but how you get there may look different based on the personality profile. If you're like to use Meyer Briggs, if you're ESTJ versus like enfp, how you approach works are very, very different. But because people have done their work, they know exact core detail of what excellence look like. These people might come in start to micromanage. So you really coach them to let go people, but also hire great talent so they can actually trust and delegate. And this is actually I see this happen more or people struggle more. With talented people, it's like letting go of things. That's why I keep emphasizing things like you have to learn to unlearn your greatness because what got you there won't get you there. Right?

What are the key steps to successful hiring or bringing on people, motivating them.

To join you found actually answering a slightly different way. I learned about this term called cleaner. I'm not a sports fan, so I don't know, but I hear like in basketball there are tweeners or like good at dribbling, good at offense, good at defense a little bit, but not like spectacular in one way and which is like great. If you're playing basketball and you're like neighbors, right? A heck of a lot of fun. But if you're trying to build an all star team, you can't have like five tweeners on your team. You need one who's excellent at being a center, right? You need to find people who have clear zone of genius or clear strength. And you need to augment the person's shortcomings or room for improvements with other people's strength. That's how you build an all star team. You need Michael Jordan's, I guess Michael Jordan's like great, pretty much everything. But you need like this guy Pippins. And you can tell my generation by the players. That I name drop. But anyway, so you, you're looking for people's clear strength and then make sure you are augmenting the person's like blind spots and weaknesses with other people. So if you look at our current executive team, pretty much everyone, maybe except for one person, have five to 10, maybe sometimes 20 years of more experience than I do. It's like I don't know what great sales look like, I don't know what great marketing looks like, I don't know what great finance look like. So you got to surround yourself like it's a cliche, but be able to attract those people who have a clear strength that you can learn from, that you get inspired from and then hopefully replicate throughout the rest of organization. So focus is a strength and then don't try to hire people that like you optimize for value alignment. Then focus on strength. They're clearly better than you.

Now as you go from post seed product market fit to series B, how do you build out the team? In which order do you recommend hiring people? Which is really key, right? You don't want to bring the right leaders at the wrong time.

So I use this framework called 2pm People Product Market money. And so it's market money, so two Ps and two M's. So 2pm, right. So you got to hire right set of people to build the right product and you gotta go to market with the right marketing sales and with that you get revenue or money. Right? You either generate revenue or profit or you raise money to be able to hire more people to create even better products. So it's a flywheel. And every time you have to think about your uniqueness as a business. And in the flywheel, what are your primary constraints? Right? So let's say you're a great product genius, but you have no idea how to go to market with it. Then obviously the people you need to hire is a marketing leader. If you're more in the SMB, bottom up product led growth, they probably need to focus on marketing first. But if you're more like mid market to enterprise saleslet, you gotta probably hire a review of sales. Obviously they have to go hand in hand. So your primary constraints become the go to market site the market. But if you're like, okay, right now I'm struggling with fundraising, I don't know how to manage money. I feel like we're burning too much capital, but I have no idea how to measure it. Then you probably need someone in the finance like CFO or like BPO finance. So it's really thinking about what are your primary constraints on what is your zone of genius, what is your executive team's entire strengths and what are the blind spots that we lack. Then we hire through that, right?

As you look back at your career, what do you wish you did more of and what do you wish you did less of?

This is really a hard question cause like I think for whatever serendipitous reasons we by luck, sheer luck, a lot of things went right. But I think ultimately it comes down to people. If you have the right great set of great talent and if you have more great leadership early on, you can probably grow faster and do a lot make a lot more right decisions. I think we or as my personality wise I focus a little bit too much on known people like people that I know continue betting on that which I think from humanity perspective is great. But from organization perspective I think we could have probably saved a lot of time just looking for great talent more aggressively. So what I, what do I wish I did more of was like continue to connect with great talent out there, be more being more aggressive with the finding the next level leadership. Thankfully all of our co founders is here. All of our first generation, even second generation management team is still here at Sember. But being able to find great talent early on and just continue to leverage those leadership is something that I wish we had done more of more frequently, a little bit less of. Us as our early stage founder CEO I think we tend to obsess over the wrong things like oh we got to move this pixel to the right, we gotta make the screen a little bit less bright, et cetera and like we get constant battles of every single minute details of the business ultimately before you reach product market fit. Don't obsess over wrong things. Right? When I was doing my first startup we built a web service, a social network back then and then I imagine oh what if our traffic comes comes in so quickly. So we did like database charting also because it's consumer business, I'm like I'm going to build a advertising platform and then also bidding system auctioning. So I actually end up building the entire auction like advertising auction system before we even like release a product which is like now hindsight is like totally dumb and like you should never do it. But we ended up over engineering overbuilding and obsessing over wrong things. Constant fight with my co founders over over minute details that never matter to customers. So actually go talk to customers a lot more often and early on and don't obsess over Minute details that only leads to resentment that actually don't matter to customers.

What's the one piece of unconventional wisdom that founders typically ignore but shouldn't?

I think there's a lot of touch feeling good things that we like to hear on Twitter or blog posts like oh, just be yourself or follow your passion like work, life, balance is great. It's like all of these things I think are great to hear and you should absolutely tell to everyone as a founder, CEO or as a CEO. But in reality being yourself is not always worth out. Let's say you have a terrible anger management issues, don't be yourself. Right? Augment yourself with other people who can help you elevate your leadership. So I think being authentic to yourself is important, but just blindly thinking you're the greatest person ever and just keeping yourself well solve all the problems I think is terrible advice. Two is like following your passion also tend to be a terrible advice because ultimately when you're trying to build a business, you follow passion as long as it creates customer value. If your passion is not creating customer value, but only your pleasure, then do it as a hobby. A lot of people mistake like your passion. If you do great with your passion will create ultimate customer value. It's like not always true. So just just because it sounds good doesn't mean it's true, right? So as so following your passion is not the goal. I mean it could be a goal of your personal life, but your business goals should be focused on customer value. And the last like work, life, balance. I mean I could be more opinionated here. I'm generally a believer of high conscientiousness. And because the big five factor model, they measure conscientiousness, I rank pretty high in consciousness. So maybe because of that I'm just born this way. But I've never really yet to see any great businesses that endures over a decade plus that were built with sheer luck or some walk in the park. Maybe you get lucky once a while. So actually a lot of studies were done on this. The highest correlate two factors that correlates to high social economical outcomes that are highest correlation are two things. One is intelligence obviously and then two is conscientiousness. Those two things had the highest correlation to social economical outcomes and not like arguing with my personal beliefs like what the studies show. So what I'm saying is like hey, if you work hard and if you again zone of genius, right? What you're good at, so you're smart in the area, if you work hard at it Then luck tends to find you. So don't plan your I think our board member said this. Don't plan on cascade of miracles. Don't assume luck will find you. If you keep working hard in the area that you're actually good at, then once in a while block will find you. Right? So I believe that like that's why you got to especially before pro market fit. After pro market fit, once you have great leaders, then you can have leverage, go on vacations, et cetera. But before prime market fit is so.

Hard, seem like you have it all figured out from the outside, right through of course hardships, multiple startups and so on. Today, as you become this platform company and become a multibillion dollar company, what is your biggest fear as a leader and how do you navigate it?

One of my tendencies, I'm a paranoid. I worry about all the things all the time and that's a trait of an engineer. So what happens if there's an outage? But ultimately if you sum it up right, I think was it maybe Jack Welch or Bill Gates? One of those folks said it. Ultimately the business matters in just three ways. One is customer happiness. Two, it's like employee happiness, but I like to use the word engagement better. So customer happiness, employee engagement, cash flow. If you don't run out of money, you if the employees are engaged, if the customer's happy, you'll build a great business, right? Then what is the reverse of that? If the customers are unhappy because your product sucks or your service sucks, employees are not engaged because of terrible culture or terrible leadership, you run out of money. That worries me a lot. So you don't want to wait until any of those things become problem. You want to get ahead of the problem. That's why you need to hire drivers who can add each cascading layer organization. They can always get ahead of the problem, not be reactive, but be able to proactive and design and architect a lot of those things. So yeah, customer happiness, employee engagement and cash flow, inverse of that is something that I worry about terribly.

What are some top KPIs you recommend measuring as other founders and leaders?

Think about this, customer metrics you can use. You can measure things like customer usage, adoption, product usage, MPSs, CSEs scores, but you have to look at holistically because like once you start measuring one thing, like in the convergence framework, everything optimizes towards that. So whenever you're measuring one metric, you always need a sanity checker. Let's say you're growing fast, right? Your sales numbers are going up, but if you only measure that, a lot of salespeople will just end up giving ton of discounts. Right. So you also want to measure gross margin to make sure that your revenue is also a healthy one. Any metrics? Right. When you're trying to gain weight, you also measure weight, but also like body BMI or your fat percentage. Right. So you want to always want to like measure the sanity checkers like employee engagement too. Like we do employee engagement surveys, we measure a couple of different factors. As an executive team, we take it very, very seriously. We have like two weeks long sessions on what are the next action I need to improve them. So you do measure employee engagement surveys and don't use one snapshot, Always measure the vectors. Right. You measure series and then you see what changes. That actually is more informative than measuring snapshot because that can be influenced by a recent fundraise or big customer deal. Like that can influence a lot of things. But if you measure a lot of different dimensions over time, then see what changes, then you can really start to understand what is the DNA of your organization. So I think measuring that would be important. Cash flow obviously like burn rate, Runway, AR per FTE, et cetera. So there are a lot of good playbooks on what to measure. But I think those are like things that we implemented at Summer.

Through your journey as an entrepreneur, are there any books that you relied on or anything that you recommend people read?

Yeah, so thankfully I still read. I obviously read a lot. But I think ultimately comes down to understanding what doesn't change. Right. I read a lot of science related physics like brain psychology. Because what's interesting about people is that people fundamentally don't change a lot because it took us millions and millions of years of evolution to get to where we are today. A thousand years of technology and culture is not going to change who you are as a fundamental human being. So reading things like cognitive science, neuroscience, a little bit on the brain side of things I think was very, very helpful. Reading anything around complexity science really helps you understand around behavioral economics, organizational theories. I think those are helpful actually. I get a ton of lessons from biology and physics on how to build scalable organizations or endure organizations. And then also good books on startups like High Growth Handbook by Ellad Gill. There are good books on startups these days. I could recommend a couple books on sales like Predictable revenue sales acceleration formula. I think I mentioned that before, Challenger sales, et cetera. Yeah, but I typically go back to science books.

John, thank you so much. Wishing you great success. I need some traction. You need some traction.

Thank you for listening and we hope you enjoyed this week's episode of the Traction podcast. If you enjoyed the show, please leave us a five star review and you can find more information and all the resources mentioned in today's episode at. Boast AI that's B o a S t AI blog.