00:00the Holy Grail of company building is
00:03finding product Market fit but what most
00:05people don't tell you is that finding
00:07product Market fit brings its own
00:09challenges all of a sudden you need to
00:12scale really quickly and scaling really
00:14quickly is actually really hard one of
00:17the hardest yet most critical aspects of
00:19scaling is finding the right leaders at
00:23and while the growth stage of a company
00:24is hard it doesn't need to feel like
00:27things are constantly breaking if you're
00:29if you're like two people and you find
00:31product Market fit you can you can grow
00:3310 people or something like that in a
00:34year so that'd be like a 5x but
00:36if you're at scale and you try to 5x I
00:38mean you're going to completely blow up
00:39the company it's pretty rare to see like
00:41a big giant Corporation that's figured
00:43out how to really be a team of small
00:45companies on small business units at
00:47some point they're going to reach a
00:48level of scale and complexity where like
00:50one guy just can't like run everything
00:51and you're gonna need to bring in the
00:53the experts right the experts the
00:55technically trained experts the managers
00:58the growth team at a16z has spent the
01:01last year culling the hard-earned
01:03insights of dozens of leaders across the
01:05firm and late stage startups to
01:07literally write the book on hiring
01:09Executives at scale you can find that
01:11book at a16z.com growth slash executive
01:15Dash hiring but in today's podcast two
01:18of those leaders a 16z co-founder Ben
01:21Horowitz and databricks co-founder and
01:23CEO Ali Godsey sit down to talk about
01:26hiring and firing Executives including
01:29the most common reason an exec fails why
01:32sometimes micromanagement is actually a
01:34good idea and the difference between
01:36someone who has written a Playbook and
01:38someone who is only run one Ben also
01:41sits on the board of OCTA databricks and
01:43more and he's scaled up several
01:44organizations in his past including loud
01:46Cloud that went public in 2001. Ali on
01:50the other hand took over databricks in
01:522016 and has since scaled the company to
01:54over 5500 employees before we jump in
01:58just a few quick notes the first is a
02:00language warning you'll also hear Ali
02:03refer to Super ICS ICS refer to
02:06individual contributors without direct
02:07reports you'll also hear Ben and Ali
02:10refer to some of the executives that
02:11they've worked with Mark craney was
02:13Ben's former head of sales at opsware
02:15while Ron kabrisco is databrick's
02:18current cro alright let's kick this
02:20conversation off with where executive
02:22hiring often begins recognizing the hard
02:25truth that you've outgrown someone as a
02:28reminder the content here is for
02:29informational purposes only should not
02:31be taken as legal business tax or
02:33investment advice or be used to evaluate
02:35any investment or security and is not
02:37directed at any investors or potential
02:39investors in any a16z fund please note
02:42that a16z and its Affiliates may also
02:45maintain investments in the companies
02:46discussed in this podcast for more
02:49details including a link to our
02:50investments please see a16c.com
03:04I know when you've outgrown an existing
03:06leader it's when you're asking other
03:08people what do you think but when you're
03:10starting to have the thoughts of like is
03:12this the right person or is it not the
03:13right person you're done I always find
03:16if you give somebody like a task and
03:20they get like super emotional
03:22then they're done yeah right like
03:25I can't handle anything else when you
03:27can't even process it that somehow like
03:30it's gotten away from you another one
03:32that I find is kind of Leverage right
03:34like if you have somebody's really doing
03:36the job would you always find a CEOs
03:38they're kind of teaching you about how
03:40the function should expand how should
03:42how should it grow and if you're giving
03:44them a lot of ideas like more ideas and
03:48then that's probably not going to work
03:50well that's a high I agree with that but
03:52that's a high bar if they're still
03:53adding value and they work and they make
03:54the company better and so on you might
03:56want to keep them like that kind of
03:58Leverage we're saying like you know this
04:00person just takes care of that thing and
04:01they're so good at it I'm just trying to
04:03like keep up and can you keep me in the
04:05loop of how you even do this thing I'm
04:06learning I'm taking notes that's
04:08phenomenal that we should strive for
04:09that but that's what you know like when
04:11you pay a guy like all that equity and
04:15that's what you expect right I agree
04:17with that that's what you strive for but
04:18then what happens is turns out they are
04:20like that but they're terrible
04:22Communicator or they're amazing
04:24communicator and they're super awesome
04:25about it but they just blob forever so
04:28they'll have like weaknesses they'll
04:30have like big weaknesses yeah yeah but
04:32you always take the weakness
04:33for the against the magnitude of the
04:36strength right exactly and then like the
04:39the causes for people running out of gas
04:42I always find are also many could be
04:45they just can you know you promoted them
04:47and they continue to do their old job
04:49and they never actually figured out what
04:50the new job was or the company just
04:52outgrew them or like sometimes there's
04:55like actual personal
04:57like they've got a drug problem they're
04:59getting divorced like something happens
05:00and the person you hired and you had for
05:03a while isn't that person and that one
05:06is very confusing to me always because
05:07you're like you thought you knew who
05:09they were but they're not that anymore
05:11yeah there's something else yeah I also
05:13think confidence is important yeah once
05:15the executive feels like
05:17it's not working and they're on the back
05:19foot spiral yeah the spiral and it's
05:21very hard to actually like turn it
05:23around right yeah uh to get back into it
05:26well and then if they lose the team
05:28it doesn't matter the one thing that's
05:32if the team doesn't believe in the
05:34executive anymore it doesn't even matter
05:36like they can like say whatever you want
05:39to me Ali I still have to fire you
05:41because nobody's following you you're
05:43almost better off starting a new
05:44somewhere else yeah as opposed to
05:46wrecking your reputation by continuing
05:48here yeah when do you give somebody a
05:49chance to grow well I think as you said
05:51there has to be a superpower there that
05:53you have identified you know they can
05:55come up with an amazing product or
05:56they're amazing communicators or they
05:58can really get the team to execute then
06:00the question is can you just put them in
06:01a position where you can accentuate that
06:04strength and then yeah fill in the gaps
06:06yeah like uh patch up the other thing
06:08I'd say is I think a mistake a lot of
06:11companies make is you know in
06:12engineering and in product and so forth
06:15the knowledge of how your company works
06:17is really really valuable but in sales
06:19and marketing the knowledge of how like
06:21other people's companies work is
06:23actually the more valuable thing and so
06:26if you take somebody who only knows your
06:27company and they have to go learn the
06:29world you're kind of harming every buddy
06:32in the company because if you're going
06:34to pay somebody to do that go pay
06:36somebody who knows the world like go buy
06:38the knowledge go buy the acceleration as
06:40opposed to and I don't really care how
06:42much potential your internal
06:45smart MBA who doesn't have any
06:47experience has like you know the idea
06:51that they're going to run worldwide
06:52sales for you if you've got a killer
06:53product and get that done fast
06:56it's it's probably wrong I just think
06:58it's because like people with the wrong
07:00background are trying to figure out the
07:02other side you know so you either have
07:04typically have Tech CEOs and Founders
07:06who are really good at Tech they're
07:07smart maybe they have an engineering
07:08degree and like well how hard can the
07:10sales or marketing yeah it turns out
07:12very hard yeah you know if you have
07:14somebody who runs out of gas then do you
07:16fire them do you level them I definitely
07:19think that you can put people in new
07:20roles and they can succeed in it there's
07:22circumstance right so there's I've got
07:26and everybody's doing everything in the
07:28beginning yeah and people are taking on
07:30roles that are eventually going to be
07:32bigger than them yeah then there's
07:36a high-end VP of marketing gave her gave
07:40him a point and a half equity and a big
07:43salary I can't level them can I you can
07:46I think it's going to be hard to put
07:47them in a new role and remove all of
07:49their equity and that's it's too hard to
07:51take those away what I have done is you
07:53know look it turns out I don't think
07:54you're really like you don't need to
07:55express it this way but this person is
07:57not amazing at running a big team and
08:00you know they're really a super IC it's
08:02very often I see super ICS who went into
08:04management and it doesn't need to be on
08:05the tech side you find them in all kinds
08:06of roles they're just so good that
08:08eventually they started managing but
08:09actually they're not good people leaders
08:11and you know eventually their team is
08:13just doing random things and they don't
08:15kind of care because their business
08:16super I seeing doing the work of two
08:18three people themselves in those cases
08:20I've been able to take them out and say
08:21hey look we give you I'll give you a
08:23fancy title you move over here and do
08:26the super icy stuff yeah and you're
08:28extremely valuable because honestly
08:29you're better than most of these people
08:31that you used to manage because you're
08:32super IC yeah but don't try to lead also
08:34a team of 200 people because as you're
08:36actually not leading them yeah so that's
08:38a use case that you think works that
08:40you're switching them back you're saying
08:41look you do great work so we over
08:43promoted you to something that you're
08:45not good at yeah and let's put you back
08:47what you're good at and I'll still pay a
08:48lot of money and give you a good title
08:50yeah but you gotta not lie to yourself
08:51if you do that because it's easy to lie
08:53to yourself and say well this person has
08:55some bright strengths so that way I
08:57don't have to fire them I can just put
08:59them in this other thing and overpay
09:00them yeah look there's also there's a
09:02failure mode which I've seen which is
09:04you move a person to a new role and then
09:06what happens is they start checking out
09:07they're like checked out or they're
09:09whereas they're actively disengaged well
09:11that one is at least you'll know yeah
09:13but this Engage The person you like
09:15who's kind of just disengaged and kind
09:17of just phoning it in is the hardest one
09:19so I think you have to do the hard thing
09:21about hard things and there I think
09:22there's really no option but to have the
09:24conversation and they know people don't
09:25say look man you're checked out it's not
09:27working we tried it let's move on and I
09:30have found in those cases they all like
09:31sort of feel ashamed and like yeah I
09:32know I know I've been putting it in yeah
09:34no well that that that's an important
09:36kind of part of it it kind of gets to
09:38the next thing which is okay
09:40how do you have the conversation in the
09:43mistake I see CEOs make is okay the way
09:46to have the conversation is to you know
09:49particularly engineers
09:51is to be correct stick to the facts
09:54stick to the facts enumerate them fast
09:56well yeah let's the the undisputable
09:58facts about why you should why you're
09:59wrong why you're bad yeah why are you
10:01suck well you're losing your job you're
10:02a bad person which is the worst starting
10:04point right yeah ironically um you think
10:07you're being like objective and factual
10:09what you're really being is emotional
10:12defensive and Afraid of the actual truth
10:15and the actual truth when you fire
10:18mistakes were made if you're being
10:20objective it's always partially your
10:23fault usually more than half your fault
10:25if you're if you're honest and so if you
10:28start from a place of the truth which is
10:31like kind of what you're talking about
10:32hey you're not putting in an effort is
10:34always a much better than like let me
10:36tell you all the places where you came
10:38up short yeah like if you start the
10:40conversation there they have no choice
10:42but to get very defensive yeah and say
10:44well like I I don't agree with that like
10:46that if you really actually thought you
10:48were right you might get squeezed into
10:50not actually even finishing the firing
10:52so you kind of have to just start from
10:55the place of most honesty look one this
10:57is a done decision too is my fault too
10:59or like if you're not ready to fire them
11:01you want to know why their work sucks to
11:04say hey like here's what I've observed
11:06what's going on that's just the
11:07one-on-one right it's just a normal
11:08one-on-one where you're like hey what's
11:09going on with the output of this thing
11:11and and you can you know like things
11:13happen in those conversations you find
11:15 out and like and it could actually
11:17help him you know I was talking to a an
11:20entrepreneur the other day and he's like
11:22you know he starts on me with the exact
11:25thing that you always started like you
11:26know you know I I'm trying I'm
11:27struggling with you know being a CEO
11:30whether I should you know want to be
11:31empathetic but yeah am I Tough Enough
11:33and I'm like who are you talking about
11:35firing you're not being tough enough and
11:37you know of course like there was a guy
11:40super talented guy slacking off and so
11:42forth I said just look just start it
11:44there like don't put so much pressure on
11:46yourself that you got to go right to
11:47firing him or right just find out like
11:49what's going on what what's going on
11:51with this guy yeah and you know the
11:53interesting thing was
11:54he has the conversation you know he
11:56finds out as a personal life issue and
11:58when once a guy admitted it he was like
12:02like this person I'm fighting with
12:03I want to work here and go hard and let
12:07that like literally that conversation
12:08solved it just like a little bit of
12:09honesty but to get to that Honesty
12:13you have to start by being honest with
12:15yourself and if you don't tell yourself
12:17the truth if you lie to yourself then
12:19there's no way you're going to get the
12:21truth out of the other person there's no
12:22way you're going to get to the right
12:23answer you know it's this question that
12:25you ask Executives aloud and this and
12:27that you know like have you fired
12:28somebody did it uh and like why is that
12:31an important question I think it's
12:35if you don't know how to do that you
12:37don't actually know how to get to the
12:39truth and it gets harder and harder and
12:40the bigger the company gets the more
12:42political it gets the more difficult it
12:43gets you have more regions more
12:44countries more people more functions and
12:46they're they're professional execs who
12:47know how to manage up oh yeah well and
12:49then you take it all personally this is
12:51my company I built this so it's all
12:53 up exactly I don't want to get to
12:55that truth exactly like just like you
12:57don't want to get to the truth about
12:58yourself and the CEOs who can't do that
13:00always eventually fail I would say for
13:02me you said it for me the number one
13:04thing I try to do in the conference if
13:06we decide if I've decided this is done
13:07and we're parting ways
13:10my first question is usually
13:12how do you think it's going yeah
13:15yeah and you know 50 of the cases
13:17they'll say it's not going well it's not
13:18from then it's much easier to you know
13:21take it to the next like it's not
13:22working and so we've tried it for a
13:23while we've tried all kinds of things
13:24it's just not working
13:26I found that if you can get a person to
13:28start it there instead of saying hey
13:30here are the things you're doing wrong
13:31or I don't like this or that it just
13:32starts with like is it working and if
13:34they're not there then I think step
13:35number one is just to get them there to
13:37realize that look it's it's not working
13:39like marketing is not doing a great job
13:41or sales is not or like engineering is
13:43not humming and we're missing the slas
13:45there's outages left and right and yeah
13:46it's lots of people involved it's not
13:48just you know your department well
13:50phrasing is important it's not working
13:52how's it going now how are you doing
13:55yeah like because as soon as it gets
13:59that that's when the defense of people
14:01have to put up their guard yeah and I'll
14:03pull it out and I'll say look we're
14:04having outages left and right this is
14:06going to be a really hard problem to fix
14:07and you've been at it for six months
14:09we've been at it for six 12 months and
14:11it's just in fact it's increasing if
14:13anything is getting harder and I know
14:15it's not just engineering it's like
14:16other departments sales there's products
14:18and things and customers are doing
14:19things but you know or it could be in
14:21any Department you could have this
14:22conversation they'll kind of eventually
14:25but it's hard man it's like it's tough
14:28like we were it's left and right outages
14:30we don't have the right people I'm not
14:31getting any help from sales I'm not this
14:33and this and that then then you've gone
14:34into a place where like look I think we
14:36can bring in someone that can actually
14:38navigate some organization yeah someone
14:41who can bring in the right people or
14:42someone that has dealt with nasty nasty
14:45outages like this or someone who can
14:46actually sell to these really really big
14:48conglomerates wouldn't that be the right
14:50thing for the company so I try to like
14:51abstract this away from them so it's not
14:53about you it's nice what's best for this
14:55company once we've accomplished this
14:56I've actually seen many execs get to
14:58that point then they kind of turn to me
15:00and then they say they actually will say
15:02Okay I I get it yeah but what about me
15:05like my career or my path then it's like
15:07okay that's a separate thing yeah we're
15:08going to take care of you yeah actually
15:10you know you bring up a really good
15:12point which a lot of CEOs don't do this
15:16and it's so important that when you talk
15:19about your expectation for an executive
15:21it's not what you and your people can do
15:24it's what you and your your people can
15:26do in the context of the organization
15:27and that means working with your peers
15:30so effectively that you get what you
15:32need yeah and if you can't do that yeah
15:34then I got to make a decision
15:37about am I keeping your peer or am I
15:39keeping you because like that is the
15:42requirement and I think that a lot of
15:45CEOs get themselves into trouble because
15:47they they give executors a pass on that
15:50yeah oh no that's my job to make you
15:52guys work together this is a great Point
15:54like you're illegal I said yeah but the
15:57sales team is like yeah they're giving
15:59away a liability and indemnification and
16:01so on I mean what can I do like there's
16:02nothing I can do or you see this execs
16:04doing that right uh but it's really no
16:07no no the Right leader trust me the
16:09right head of legal that comes in here
16:10will not tolerate that they will
16:12actually pick up the phone and tell the
16:13salesperson hey here's the framework
16:15I've been using yeah we're gonna have an
16:16escalation if it's like indemnification
16:18Above This limit if it's you know if
16:20it's a liability of this sort this is
16:22what's going to happen and they kind of
16:23push the whole organization in Direction
16:25whereas the leaders that aren't making
16:29they kind of just you know they let it
16:31faster yeah it's faster they you know
16:33that organization gets abused and they
16:35can't actually achieve anything and
16:36they're in that position and then they
16:37say look it's not my fault look at these
16:39other departments they're the ones doing
16:40it to me yeah that's when you know that
16:42no with the Right leader there the Right
16:44leader will not let these other
16:46departments do that so when you get them
16:48all the way there and they go okay what
16:50about me like what's your philosophy on
16:56the com you know references you know
17:01Reed Hastings in his book which I argued
17:04um after he wrote it said like they sent
17:07an email at Netflix saying like we fired
17:11um how do you think about all that yeah
17:13I disagree with that I think from then
17:14on it's you owe them you're the one that
17:17made the mistake of hiring them uh to be
17:19as generous as possible within reason
17:23yeah you know you have a company to run
17:25your fiduciary duty but as much as you
17:27can if if you squint and in the big
17:28scheme of things it's not going to hurt
17:30the company it doesn't really matter be
17:31as generous as you can possibly be both
17:33in terms of taking care of them
17:34compensation wise but more importantly I
17:36think being there for them
17:37psychologically finding them the next
17:38job being a reference for them helping
17:41them as much as possible I think that
17:42goes a long way and actually you'd be
17:43surprised you can have great
17:44relationship with these folks for many
17:46many years to come put it on your CV as
17:47long as you like yeah you know who cares
17:49and if you need a reference I'm here and
17:51then on the compensation as generous as
17:53you can be but you know there's there's
17:56fairness and there's equity and there's
17:57fiduciary duty and so on but I found you
17:59can be more generous and people are very
18:01very stringy in these kind of situations
18:02and then there's a couple things about
18:03that one is if you are
18:06kind of more supportive and generous and
18:08you know you're gonna have a
18:09relationship afterwards it's easier to
18:12fire the next one because it wasn't like
18:15a dramatic horrible like event and then
18:18you know my old friend Bill Campbell
18:20used to say he'd be like Ben
18:23you have to take his job you do not have
18:25to take his dignity that's not no that
18:28is not necessary and I think that that
18:30just goes a long way also for the people
18:33who are still in the company yeah
18:36absolutely and no matter how bad an
18:38executive is they have some supporters
18:40they have some people who like them yeah
18:42there's nuanced they're two sides to the
18:44coin yeah and that executive is going to
18:46talk to them and it's going to matter
18:48how you treated them back we start at
18:50the end of the process you got to fire
18:51the guy let's talk about bring them in
18:53and how do we stop them from getting
18:55fired so if you bring in a new exec
18:58how do you help like ensure their
19:01success because the failure rate on that
19:03is pretty high it's almost always
19:06retrospectively people call it fit but
19:09fit isn't entirely determined
19:12by the higher it's what happens after
19:15you hire them so how do you how do you
19:18solving that I actually literally give
19:21them the article that you published it's
19:23on micromanagement by Van Horowitz where
19:26you battle uh Mark Andreessen yeah who
19:29says you know you have to delegate and
19:30you have to respect the people and you
19:31hire them and they do the job you stay
19:33away and you say no you gotta
19:34micromanage them so I actually give them
19:36that article and I just tell them this
19:38is what we're going to do next
19:39he called it micromanagement I call it
19:41training okay training but I give it
19:44because I think it's an expectation yeah
19:45because the thing is if you start
19:47micromanaging a person that's new in
19:48your organization or training them as
19:49you call that some people might be
19:51offended hey I don't like this what what
19:52am I getting into this is a new
19:53relationship yeah and you're going to be
19:55breathing down my neck like this 24 7.
19:57like I'm not sure this is like a good
19:59thing for me they get freaked out this
20:00article kind of says hey it's just a
20:02translator thing it's a normal thing
20:04everybody here went through it we're
20:06going to do it here too so that kind of
20:07just yeah they don't feel like they're
20:09being singled out and in fact some
20:10people might be like hey you're actually
20:11not that bad even like I after reading
20:14that article I thought you were gonna
20:15like be all over to right right right
20:17right you set the expectation very
20:19exactly exactly and then I think stay as
20:21close as you can to them weekly
20:23one-on-one and so on that's not going to
20:24cut it yeah you know you got to call
20:27them every day yeah I try to if I have a
20:29new executive I call them every day when
20:31they're new I call them every day when
20:32do I call them do we have a schedule
20:33time no I just call them a lot of times
20:35they'll notice I'm just shooting the
20:36 I'm not even really actually I
20:38don't have really an agenda but we're
20:40getting to know each other so we can
20:41build up trust and understand yeah and
20:43context and we're sharing this so much
20:45that's shared in those and after a
20:47couple months you're going to feel much
20:49more like okay I know this person yeah
20:51you know I've had so many interactions
20:53with I I really know Ali like I know how
20:55he thinks right and all his weaknesses
20:57and strengths I think the the kind of
20:59point that you make is is really
21:01fundamentally important because what I
21:03always get from CEOs is they're like
21:05well how do I manage
21:08a CFO I don't know how to set up a
21:10proper control structure or whatever it
21:13is that a CFO does like how do I match
21:16these guys who are doing jobs that I've
21:18never done and you kind of hit on it
21:22they may know their function they better
21:25know their function better they do but
21:26they don't know databricks better than
21:28you like nobody knows databricks better
21:30than you and you know you you've made
21:33every flipping higher every good and bad
21:36architectural decision and the product
21:38you're aware of every customer that blew
21:41up you know about like you know the
21:42comprehensive history of the place and
21:44then you know all the people and what
21:46they're good at and what they're not
21:47good at and so forth and somebody coming
21:50from the outside doesn't have any of
21:51that exactly they know zero exactly
21:53you're like a large language model yeah
21:55trained on trillions of trillions yes
21:57you don't even know what you know yeah
21:59you know you know many many years of
22:01everything every little detail all the
22:03context why how it went wrong how it
22:05went right what to do what to not do and
22:07that is like having watched Executives
22:10fail that's the number one thing they
22:13fail on is they don't have the contacts
22:15so they'll come in and in the first
22:19they'll start working on whatever made
22:22sense at their last company and they're
22:24like well you hired me for what I did
22:25there right because like that that's
22:27where I came from and then everybody who
22:30works from them for them and everyone
22:31around them says wow Ali he paid this
22:33guy all this money giant Equity package
22:35and he came in he did nothing and then
22:37like once that once the team goes that
22:39that's it it's it's over right there and
22:42so you have to guard against that by
22:44giving them the contacts and that daily
22:46conversation by the way that is
22:48essential like and it doesn't have to go
22:51or it doesn't go for five years it goes
22:53maybe 30 days and like sometimes a
22:56conversation can be just hey
22:58what are you going to do tomorrow
23:01and like what I always find if you ask
23:03an executive what they're going to do
23:04tomorrow and they're new they'll always
23:06say at least one thing that makes no
23:08 sense at all and so you just
23:09couldn't I don't do that by the way
23:10that's a great thing that you want to do
23:12tomorrow yeah we have huge fire right
23:14here like it's going to burn up the
23:15whole house yeah why don't you help us
23:17put out this fire instead of that thing
23:18and by the way if you put out the fire
23:20everybody's going to consider you're a
23:22hero because that thing was on fire
23:23before you got here you know but they're
23:25like I don't even know where is that
23:26which floor is it what fire is that I
23:28didn't even hear her oh you don't know
23:29this is the biggest dumpster fire we've
23:30had here you know it's on the third
23:31floor go there and look oh I didn't tell
23:33me more about it oh here let me tell you
23:35the history of how to happen yeah and
23:36let me tell you exactly how to fix it
23:38because I that that one I know I just
23:39haven't had the time to do it that gets
23:41them off to the right start and then
23:43also kind of that's how I always find
23:45you teach somebody the organization
23:47because they go oh well I'm going to go
23:48work on this and I'm like
23:50oh well you need to talk to Ed because
23:51like Ed knows all about that yeah oh I
23:54didn't even know who had what but why Ed
23:55he's not even in the he's not sea level
23:57or he's just a random dude yeah you
24:00would never know about it yeah unless I
24:01told you and you would waste months
24:04trying to figure out what that new yeah
24:05and so like that kind of thing that's
24:07what people miss and Andy Grove used to
24:09call it um task relevant maturity yes
24:12which is like classic Andy like
24:14complicated complicated but like if you
24:17dig into it that's exactly what it is
24:19yeah which is oh yeah you're a great
24:22sales exec I don't need to train you how
24:24to do that but I need to train you
24:27the tasks that are relevant to us until
24:30you're mature on them and then we don't
24:32have to talk every day exactly and
24:33that's you know that's really what the
24:35micromanagement means hey let me go back
24:37to you said something really really
24:38important I actually think this is
24:39extremely important extinct when you
24:40hire a new exec they come in and usually
24:43the organization is also it's not just
24:45you yeah everybody's looking who is this
24:48new guy or gal oh yeah everybody
24:50everyone's looking right because I know
24:52he paid him a lot of money and I don't
24:54make that much money you're sizing them
24:55up you're looking up and down and like
24:57you know what are they doing here what
24:58are they going to do here I think it's
24:59super important like that getting that
25:05two to four weeks yeah quickly yeah uh
25:08get that quick win and similarly if it's
25:10like a big trip up and fall and you know
25:12Big Splash you know people like oh my
25:14God yeah you know who's this person you
25:16know what do you think and they all will
25:17talk to each other and once it's
25:19it's a very rare bird that will back off
25:23the position they took during that
25:24socialization people are watching that
25:26first success quick first success is
25:28important which then means don't do
25:30eight things yeah right do the thing do
25:33the one simple win here let's get them
25:35and it's your job as a manager to say
25:37look hand that on a silver platter to
25:39them yeah it's still going to be hard
25:40trust me new company new people
25:41everything is different get them to get
25:43that first win I once had an executive
25:45who came and he had read like The
25:46Stephen Covey seven habits Highly
25:48Effective People he's like well what I'm
25:50gonna do is uh first I'm going to seek
25:51to understand and then be understood and
25:53I'm going to spend like a month like
25:55just talking to everybody I was like
25:56you're going to be fired in a month I
25:59was like I'll help you understand so
26:01I've actually found that for new people
26:03you know they come in especially the
26:05ambitious ones they come in like there's
26:07like I have so much to add here
26:09I think there's I don't know where to
26:10start but we have like these eight
26:11things we have to fix yeah I'm gonna fix
26:13x y z a b c I'm gonna fix all of these
26:16things and that's when you gotta like
26:18stop them say hey we're gonna get which
26:19one is the most important yeah let's get
26:21one win here we're focused on one win
26:22yeah one win this week yes another win
26:25next week exactly and then on the daily
26:26call remind them hey how's that going
26:28that dumpster fire on third floor you
26:31exactly exactly so what's the impact of
26:35a new executive on an organization and
26:38its culture like and what do you want it
26:39to be and what do you not want it to be
26:42companies quickly form a culture
26:44fortunately are unfortunately the more
26:47successful they are they become a little
26:49bit arrogant companies typically are not
26:51super open to massive change
26:53companies don't like someone coming out
26:55from outside and saying this is Amateur
26:57hour okay we got to do things quite
26:58differently and I'm going to show you
27:00because I come from this really big
27:01company over there yeah and I'm going to
27:02show you how we did it over there and
27:04we're gonna you know and then their name
27:05dropping that company in every other
27:06sentence and you can see people like if
27:12this is not Amazon you know it's not
27:14Google okay the first thing is just
27:16honestly speaking just fit in just
27:20become part of the team get those quick
27:21wins that we mentioned earlier become
27:23part of the team once you've been here
27:25and people respect you only once you
27:28really rock it you can start saying that
27:30this process that we have it's taking
27:32eight days I think there's a way we
27:34could shorten it to four days or I think
27:37we could actually if we tried this thing
27:38we could improve our hiring and
27:39Engineering do we want to do maybe a
27:41business review on the biggest deals
27:42every quarter uh do you want to try that
27:44out so I kind of think you have to
27:46become part of the organism and you have
27:48to kind of succeed in it to change it I
27:51think it's very hard otherwise from the
27:52outside how about how about the other
27:55though because how do you keep
27:58the kind like let's say you need
28:01a pretty sharp cultural change and you
28:03guys did at databricks early on where
28:06you were a very engineering Centric I'll
28:09just say and then you needed a sales
28:11organization and you brought in a sales
28:13leader and you could have as CEO
28:16stopped him from bringing what was like
28:19a large dose of enterprise software
28:23culture into what was a more academic
28:27technology oriented culture so how did
28:32stop the company from
28:36just rejecting because that that was so
28:38different look I think that uh like I
28:40said earlier companies get arrogant and
28:42they don't want to change one thing that
28:43really helps use failure yeah so you
28:45guys weren't selling them you know it
28:47humbles you and you realize you know I
28:49need help yeah I need a helping hand I'm
28:51drowning here the Arabic had huge
28:53success till 2015 and we had done a
28:55great job with the open source software
28:56and it was a awesome company but we had
28:58problems with the revenue and it was
29:00clear that the product LED growth plg
29:02that we believed in we called it zero
29:04touch at that time was not working
29:06people you couldn't just build it when
29:07they come they weren't swiping their
29:09credit cards left and right and paying
29:10us and we could not do a deal that was
29:13bigger than 2030k so just impossible so
29:15we needed a big change uh and so we need
29:18to embrace but I think one important
29:20thing is that inside the CEO has to
29:21embrace it I knew we had a problem we
29:24had not been able me included to fix the
29:26problem and so in 2016 we knew that the
29:28shift has to happen and and it was still
29:31a give and take you know I was myself a
29:33little bit like you know do I want to
29:34really so uh to my cros credit that
29:37first year I told them we're still going
29:39to do a lot of the plg yeah because plg
29:42is still our future yeah but we're going
29:43to also do the thing that you're going
29:44to bring in that you know really really
29:45well but don't forget plg it's super
29:47important it wasn't until he then went
29:51at the end of that year suddenly half of
29:54our Revenue was Enterprise it was very
29:55clear he's right yeah this pld thing is
29:58just overrated for the kind of business
29:59we have in the kind of Market we're in
30:01then I embraced that change and we put
30:03up you know a Gong that we would hit
30:05when we close the deal yeah and in fact
30:07I embraced it and the engineers loved it
30:09so much that they would steal it and
30:10they would go hit that's what I'm saying
30:12hey guys you can't do that this is when
30:14we close the big deal okay I'm like well
30:16this is a big deal we just developed
30:18software it's like yeah but you're like
30:19eroding the whole you're like okay every
30:2110 minutes just because you're happy uh
30:24so we had a great thing and then at all
30:25hands we actually really tried to
30:27embrace the culture change yeah for the
30:29first time I had that all hands uh 50 of
30:32the time we're gonna look at sales deals
30:35that we did and we're gonna have the
30:36sales person present how they did and we
30:37kind of motivated both sides we said
30:39that look we're doing transformational
30:40change with software that's going to
30:42change the world but these organizations
30:44are not ready to accept data and AI the
30:46people that are going to help us get
30:47that software into the in the doors
30:49there for the large Enterprises or the
30:50sales folks so let's embrace it you know
30:52when Executives come in and they are
30:54good sometimes they'll want to bring
30:56like a small piece of culture that is
31:00just incompatible and I think that that
31:02can be very Insidious if you're not
31:04careful there are certain things that
31:06you believe in as a company
31:08that you've kind of drilled into
31:10everybody and if you bring in an
31:11executive who doesn't want to do it and
31:13you don't make them assimilate then you
31:16know you basically destroy that whole
31:18piece of things and I remember when I
31:20was at Ops where we had been through so
31:22much I was just like look we made nobody
31:25maybe nobody gets rich on this thing but
31:27nobody's going to have a bad work
31:29experience here I was just like very
31:30hard on that and I was like everybody's
31:32getting a performance review like I
31:33don't care like you're writing your
31:35reviews and cranny comes in
31:40he's like Ben you like I need to
31:42write reviews so he didn't write the
31:44review and I just I withhold held all
31:46the raises Equity UPS everything for his
31:49organization I was like you can't nobody
31:51can get everybody else in the company
31:52got their equity and their money so he's
31:54like why why is my team got nothing I
31:56was like you haven't written your
31:57reviews and the interesting thing about
31:59it like to his credit he ended up his
32:01reviews were the best reviews oh they're
32:03competitive right in the whole like yeah
32:05very competitive like a better people so
32:06look I hired uh amazing cro came in Ron
32:09right and took us from zero to billions
32:11but one of the things I heard them say
32:13in one of the meetings was they were
32:14like stop damn it this SPD yeah I was
32:18like what's SPD I was like no no nothing
32:21they all sales prevention departments I
32:25was like what the hell is that and so
32:26well the whole company is sales
32:27prevention department yeah right
32:29sometimes they're trying to prevent us
32:30from doing our job of closing these
32:32deals so that's what you know that's
32:33what engineering can't build the
32:35features on and I said hey add zero
32:37tolerance for that I went to Ron I went
32:39to all the people I said don't ever use
32:40that phrase here it's like zero
32:41tolerance here because you know you get
32:43into the big companies form cultures
32:44like this like big companies where the
32:46difference against him yeah it's like
32:48the different departments hate each
32:49other more than they hate the enemy yeah
32:51so they end up fighting with each other
32:53we're a small company we're working
32:54together and uh to their credit they you
32:57know they said no no 100 I'm not going
32:59to use that phrase like you know it's
33:00like no no we're all in it together and
33:01so yeah we touched on this a little bit
33:04what are the most common ways that a new
33:12this is not the right way to do things
33:14too much destructive and we're going to
33:16ask too much copy pasting what they saw
33:17in the previous company but actually the
33:19copy paste is also an interesting thing
33:21on the hiring because this is where
33:23people also make mistakes they're like
33:24well do I really have to hire an
33:27Enterprise software guy to run my
33:29enterprise software yes yes because
33:32whoever you're hiring is going to copy
33:34paste to some degree you need that
33:35you're buying the domain expertise
33:37you're buying the stuff that you don't
33:39know so like if you go and hire like an
33:42Enterprise sales guy who's selling
33:43Google AdWords he's 100 going to fail I
33:46think when you hire someone you want
33:48them to have seen or done the thing that
33:50you need now and this is you know I
33:52think how a lot of people fail or how
33:53you hire a lot of wrong people you need
33:55to figure out sales you hire a guy who's
33:57been closing 10 billion dollars for some
33:59big company and he's so good he managed
34:0210 000 sales people yeah and you have 10
34:05sales people you know that's great you
34:07know that's not going to work really
34:09make sure that they've seen the scale
34:10you're at and they've done that phase
34:17exactly and then there's the people that
34:19are like this person is perfect perfect
34:20culture match I think they're great they
34:22can come in and do this but we have
34:24about 500 sales people and this person
34:26has done hundred yeah have they ever
34:28done 500 no well once they use used to
34:31work three years in a company that had
34:3240 000 sales people yeah that's not
34:34going to translate to the challenges you
34:36have right now at this particular stage
34:37so there's a difference between
34:39just running the existing programs in a
34:42large company and creating the programs
34:44almost like an organizational founder
34:46this way yes I kind of think about it
34:49right yeah like the the person
34:52who works at a company is the person who
34:54built the company exactly and the person
34:56who works in an organization is not the
34:58one who built it and you really do need
34:59they really do need to have built it yes
35:03like the ride along otherwise
35:05the people that are just purely
35:08blatantly trying to copy paste like
35:09literally they weren't a huge
35:10organization they were one of the cogs
35:12and they just saw that big Cog and
35:14they're just saying look we need exactly
35:16you know a wheel that big and we need to
35:18copy paste it over here and it's like
35:20yeah but we don't even need it we can't
35:21even fit a wheel that big in here Kenny
35:23run a Playbook or can he write a
35:25Playbook yes and they're writing the
35:28Playbook and it's amazing when you
35:30actually interview for that like okay
35:33construct an entire like tell me what
35:36you did at your last company exactly how
35:38is it built how was it constructed to
35:40okay now imagine like you're here how
35:43would you write this Playbook that'll
35:47if they've not done it right like if
35:50it's a it's a very tough question for
35:52them so which is by the way that was
35:54that's how we found Ron was on that
35:57question yeah the way he answered that
35:58question for us even though he came from
36:01a company we'd never heard of selling a
36:03product that didn't make any sense
36:05that's how he got into the databricks
36:07interview process and he was like the
36:09most left-field candidate but he ended
36:11up being the best candidate you know I
36:13remember there was a question we had for
36:14him which was you know how much how how
36:16you know he's like I need to invest in
36:17sales enablement is what he said yeah
36:19and I teach people to sell this product
36:21and we said well we don't have time for
36:23that we're a very fast growing company
36:25and we're you know we want to get to
36:26these targets and so on we didn't even
36:27time for enablement you're gonna grow so
36:29fast we're gonna hire so many people
36:30that there's like just no resources
36:31because we thought he's a big company
36:33guy he's gonna come in and bring in all
36:34these different processes and he said
36:36okay if you want to grab if you want to
36:37grow that fast then I need to do way
36:39more sales and Implement than I said
36:41yeah so wait that didn't make any sense
36:43and I said no because we have all these
36:44new people who want to hire they're
36:45clueless they're going to show up here
36:47at the elevator and they're going to
36:48look around and say what am I selling
36:49here yeah right we gotta enable them so
36:51we've got to double down even more on
36:53enabled yeah let's double that budget
36:54and if you had hired a guy who had only
36:57knew how to read a Playbook he would
36:59have agreed with you yeah yep 100 yeah
37:02so do the five Y's just keep asking okay
37:04so why do you do that why do you do
37:06enablement who runs enablement what kind
37:08of enablement okay what do they do there
37:09and just keep asking why them the people
37:11in the interview process that kind of
37:13tap out they're like oh that's a good
37:14question I don't know that so I gotta go
37:16figure out like you can see that it's
37:17very surface level they've kind of seen
37:19it somewhere and now they're trying to
37:20copy paste it over here they're probably
37:22not going to be able to build it whereas
37:23Builders really can tell you oh then
37:25where do we start yeah like how many
37:27hours do we have yeah
37:28you know exactly then then you know
37:31there's like a depth he's done like
37:32enablement 15 ways yeah and then you
37:34know so let's keep going deep deep don't
37:36put up with surface level answers or
37:38just one One-Shot answer questions go
37:41many many levels deep that's what you
37:43kind of can see how deep they are in the
37:44subject area all right Paul closing
37:46thoughts all right any other kind of
37:48final thoughts on hiring inner
37:50integrating firing Executives dealing
37:54with Executives start early your
37:56searches any search for a person has a
37:59trade-off the trade-off between quality
38:02of the person and you know how fast will
38:05you get them right so like yeah if I
38:07take forever I can find the best person
38:08uh you know or I can quickly close the
38:11search immediately and find someone but
38:12it's gonna be a terrible person and
38:14mistakes are costly I say mistakes take
38:17between a year and a half to two years
38:19takes you six months jury's out is do we
38:22really need nobody wants to fire someone
38:24within six months of hiring someone
38:25right so you're taking six months then
38:27you need to have this conversation you
38:28need to reach an agreement you need to
38:30figure out what it is you need to
38:31procrastinate because you can have the
38:33conversation you need to ask 100 people
38:35whether should I or should I not then
38:37once you've let the person go now you
38:38have to start a new search guess what
38:40the second time you're more nervous now
38:42you don't trust yourself in your own
38:43instincts because you screwed up last
38:44time now you hire a new person okay you
38:45hired the new person you finally trust
38:47yourself now you gotta ramp the new
38:48person to get them back in okay you lost
38:50two years so then how do you avoid that
38:52mistake start early so that you can kiss
38:55a lot of frogs and do a lot of homework
38:59back doors yeah really to make sure that
39:01you're you're kind of nailing it yeah
39:03yeah no that that makes a lot of sense I
39:05would say the other thing you know
39:06particularly for new CEOs is how do you
39:09know what's good what's a good head of
39:12sales what's a good CFO well like
39:15the best way to know is actually to talk
39:16to a bunch of CFOs ask them how they
39:19know what's good what's the difference
39:21between a good CFO and a great CFO how
39:23do you know that how do you interview
39:24for that like all those kinds of things
39:26that knowledge you only get from you
39:30know you can learn a lot from
39:31interviewing candidates and if you start
39:33early and you're not even filling the
39:35position then you can ask them whatever
39:36you want exactly and then that ends up
39:39being basically the script to figure out
39:41like what it is there's a great Point
39:43I've seen CEOs who say
39:45I'm gonna have my assistant do the back
39:47door checks reference checks I don't
39:49have time for the executive recruiting
39:51meeting this week you know I'm
39:53delegating this like but once we get to
39:55the final stages I'm going to pick like
39:56if you're new and you don't really know
39:58what a great CFO or cro or VP of
40:01engineering looks like you should be
40:03immersing yourself spending all the time
40:05interviewing everyone doing back doors
40:07everyone doing dinners with people you
40:09can't get well and as the back door
40:11right is your assistant going to say to
40:12the back door is this the
40:15best CFO that you've ever seen
40:19who is it oh can you give me her number
40:22exactly okay like yeah yeah they're
40:24never going to do that so spend the
40:26energy spend the time this is one of the
40:27most important decisions you could ever
40:28make as a leader in your company spend
40:30energy you can't be spending too much
40:34thanks for listening to the a16z podcast
40:36if you like this episode don't forget to
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