← Long Strange Trip: CEO to CEO with Brian Halligan
Long Strange Trip: CEO to CEO with Brian Halligan
Jack Dorsey: Every Company Can Now Be a Mini-AGI
01:03:41
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- [00:00]
A
Since last year, I've just had this existential dread and also, like, hope and optimism in the same hour, in the same thought process of, like, what is even a company going for? Like, what? Like, what are these structures going forward? And this is the only, like, durable one structure that I could actually imagine lasting for quite some time. And it was coming from a place of, like, wow, is our company just going to be completely irrelevant, you know, in the next coming years?
- [00:47]
B
All right, everybody. We had Jack Dorsey on the pod today. Founder of Twitter and founder of Block. He's the only founder to have two of his companies end up on the S&P 500. Just learned that today. I thought it's pretty cool. Also, Roelof Botha, who's a SCOIA partner and is on Jack's board at Block, the conversation was super interesting to me. He recently put an article out that you may have seen Call From Hierarchy to Intelligence. And it's a manifesto on how to rethink, Basically rethink from the first principles, how an organization works. How do you completely eliminate hierarchy, and how do you put AI right in the center and transform how your company works? And I let him go on that, and he was very thoughtful and he spoke a lot about it. Block is really changing the way it's organized. Before we started, he said, I'd love to get some feedback from you and from other people on this. So if you get comments on it, let her rip. He wants some feedback on it. He's in the early innings of a big transformation over there. That was about half of it. The second half of it. I just asked him for, like, CEO advice. I work with lots of CEOs, as you folks know, like, how do you build an amazing board? He's certainly got some scar around board building. How do you build your second act? Like the Cash app versus the original business of square? Is it a good idea to be a CEO of two different companies at the same time? Being brave and not giving a flock versus going with the flow. And when do you really dig in? And when do you kind of go with the flow? And he had some really interesting thoughts on the job of a modern CEO. So tune in. I'll be back at the end and give you some further thoughts. But I thought Jack did a really nice job and real life did too. Let's get into it. Jack, I read your piece. I think it's fantastic. From Hierarchy to Intelligence. Before we get into the meat of what it is, can you describe what you think is wrong with the way normal Companies, hierarchies work. Companies like HubSpot, companies like Block. Like, what kind of led you to this?
- [02:56]
A
I don't know. If there's one thing that's ultimately wrong, it's just. It's recognizing that, like, what. What do we. What do we see in the. In the pattern? What is the function of the hierarchy? And what we wanted to explore is just like, where does it actually come from and why does it exist in the first place? And if you look at it from first principles, it's all about information flow to a broad base of people. So being able to communicate over a breadth of people and have that be manageable at a human scale. So we've gotten into structures that, you know, we've borrowed and iterated on a little bit over 2,000 years.
- [03:43]
C
Yeah.
- [03:45]
A
And now we're facing this, I think a completely foundational moment in being able to question every element of how we work. And the one that I think is questioned the least is probably the hierarchy and probably about how we manage communication flow around the companies. So if we're in a world where we are today, where block, for instance, is completely remote, or we're remote first, every single thing that we do creates some sort of artifact, whether it be a slack message, an email, pull request code, all these Google document, a meeting that we record, all these things have these artifacts of information about how the company is working, is building, is failing, is making mistakes, all these things. And traditionally, we've been relying upon humans in a management structure, in a hierarchy, to go up and down a chain to relay that information. Instead, we can take all of those artifacts and put an intelligence on top of it, build a model around it, and actually have a conversation with the company about how the company is doing it. And it's not just me as CEO that can do that, but anyone in the company could have that same sort of access to information and same understanding of what the company can do. So you get to a point where you can build these world models for companies, like treat the company as a mini AGI, for instance, an artificial general intelligence. Because it really is. I mean, if you look at a company, it is an intelligence, but it hasn't been structured in the way that's the most efficient or the least lossy in terms of information flow and what people can actually do within the company. So the technology is good enough today that we can actually model the company. We can have everyone in the company put in intent, which would be strategy or these artifacts. And we can also have everyone in the company Query it as well. And it just, it really opens the door for what's possible. Like, you know, Roelof and I have a board meeting every quarter where we, we construct a bunch of board docs, slides, presentations. We get only so much time for them to have questions. But imagine if every single board member can just query the company and have a conversation with the company's intelligence in real time and we can make that meeting time that we have every quarter really focused on more of the creative or bigger existential decisions and issues than the day to day. The same can be said for our earnings call and analysts, giving them fully reg fd possible information that is on their timeline with their questioning. But you can scale this to any position or any role in the company, which is pretty phenomenal. And we've just never had that ability before and now we do. And I think the architecture and the structure of the company is ultimately going to determine its velocity and how well its roadmap for customers. Correct.
- [07:00]
B
And just kind of drilling down on it. Can you describe sort of what the organization looked like before? And granted you're very early in this, but what's it look like now? Which roles have been eliminated? What are the new roles? Just kind of drill down a little bit into what block looks like today and kind of where it's going.
- [07:22]
A
Yeah, we are early in it. I mean just from a, you know, one. One measurement of, of how far along we are would be the depth from me to any other individual in the company. And I would say our max depth right now is probably five folks between me and anyone in the company. I would want to get that down to 2 to 3 this year. And in the most ideal case, there is no layer. Everyone in the company reports to me and that would be all 6,000 of the company. And that feels somewhat ridiculous when you consider the old structure. But when you consider that the majority of our work is going through this intelligence layer, it's a lot more manageable. And that goes into the roles going forward. We want to normalize down to just three roles. The first is an ic, which is a builder or an operator. This is a salesperson, it's an engineer, it's a designer, product, person, whatever it is, they're actually working with the tools to build or to operate the company. They're augmented because they have access to agents. So one person can potentially do the work or explore the breadth that it would take a team or 10 people to do in the past. So that's number one. And I think there's A durable human skill that lasts there, which is judgment and taste and creativity. So that's probably the largest part of the population, is the builder and the operators, the ICs. The second role is the DRI, and that's someone who can own the customer outcomes. They're putting a strategy together. They're understanding what roadmap allows us to solve customer needs and problems. And they're assembling a team of these ICs to, to get something done. But the durable human skill there is ownership and accountability. They're really owning the outcomes and whether something is failing or not. And then the last role would be what we consider managers today, which we're calling a player coach. This is someone who is building the capability and the capacity of other humans and their craft. But instead of telling them how to do it, they're showing them how to do it by doing the work. So these are people who might be ICs or they might be DRIs, but they're also really good at giving coaching skills at a coaching skill to help the people around them get better and better and master their craft. And today that's a management structure where I sees and even DRI's report to a player coach. But I think in the future it's an assignment, it's not a reporting structure. But I'm assigned to ICs or I'm assigned to DRIs to help them master their craft. And obviously the durable human skill there is building human capacity and coaching and there's a lot of empathy there. And, you know, all the, all the soft skills that we recognize great managers are known for, but not making a requirement that they have to be strategic necessarily, they have to build because they need to show off the skill and teach in that way. But they don't necessarily need to be a dri. In very rare cases, one person can take on all three of those roles. I think I can take on all three of those roles. My leadership team is, is expected to take on all three of those roles. They expected to build as an IC or operate the company. They're expected to be strategic and actually think about roadmaps and customer outcomes. And they're expected to coach and help raise the skill level around them with, with the people that they work with, with their direct team, just a little
- [11:30]
B
kind of before and after, and you're, you're mid on this and let's pretend like it's working great and it's two years from now, and it's extremely flat. Like what is, what is the role of the CEO before and after. How's that? Most of the listeners, by the way, are CEOs. What does like, planning look like before and after? What happens to all those people who are directors and managers or the kind of glue people like, what are kind of the before and afters in your mind?
- [11:57]
A
I think my job is co. In the past, I've thought about in three ways. Number one is to ensure that we have the right principles and the right team dynamic. And that's like hiring and firing and setting values and setting the culture and setting the tone. The second is to ensure that decisions are being made in context of our customers and industry trends and competition. And the third would be to raise the bar on our execution, like to constantly increase our capability and to push ourselves to doing things that are uncomfortable so that we're growing all the time. So that's how I thought about my job up until this point. I think in the future you have those elements certainly, but I think it's more about like the architecture of how the company as an intelligence works. And like, if we're building the company as an intelligence, our job as humans and my job as CEO is to constantly align it to where we think the right outcome is. And I see visually, I see the intelligence, the world model for the company. In the center and then on the edge are the humans who are just constantly aligning this towards customer outcomes. But even that changes, I believe, because I, I think a company's ultimate limiting factor is its own roadmap. And I think what these technologies point to are that our customers are going to. They're going to have the expectation that they can ask for a feature that doesn't exist on our roadmap and that it just is served to them. And that's where you really get into the layers of like, okay, so what do we actually build? We build up capabilities which are effectively our tools. Like we can issue cards, card acceptance, peer to peer lending. All these things we do as a financial technology company. We have these interfaces like Square, which has a register and a dashboard. We have Cash app, we have Title, we have bitkey, we have Proto. These are interfaces. These actually touch the real world, touch humans. And we can deliver our capabilities in these interfaces. Today. They're built with these very specific navigations that are our roadmap and our understanding of what our customers want. When you move to the third layer, you have proactive intelligence. We have all this understanding of our customers. We're moving money. Money is the most honest signal in the world. You can Lie about literally everything. But when a transaction occurs, that's something that really tells the truth about your life or your business's life. And based on that, we can actually prompt our customers instead of waiting for them to prompt us or having the right question asked. So we can do the very simple but very valuable thing of, like, how do we protect our customers cash flow? Like, we have people using us as a bank account. How do we make sure that they can pay the rent and they can pay their Spotify bill and they can pay their kids allowance. And, and this is all sequenced in a way that allows them to never go to zero, never go negative and have some cushion that allows them to even think about getting to saving or building wealth. And that just, you know, peace of mind, I think is the most critical aspect here. So if, if we're enabling a customer, if we're able to prompt a customer and also they can ask, like, as a business, hey, I have this inventory thing that I've been using, but it's missing this feature. Can I have this feature? We should just be able to build that and compose it in real time based on our capabilities. If we can't, and it points to a deficiency in capabilities or a gap, that's our roadmap. So our customers, just by using and talking with our systems, are telling us what our roadmap should be. And then it's up to us to give the judgment. And then the final layer is the world model, it's the customer world model, it's the company world model, or our deep understanding of ourselves and also our customers. But I think if I had to say one thing that myself or anyone in the company has to do, I guess it's this overused phrase of judgment, but it is judgment against what we intend to build in the world. And is it aligned with that judgment? Is it aligned with the values? Is it aligned with the taste that we have? And is it unique or is it not? And I guess for my part, I'm the extra checkpoint on like, is the alignment circle of humans, the edge of humans actually working correctly?
- [16:44]
B
And this, I see how this works exceptionally well. For block, you have a lot of signal. How does this work for, I don't know. Sierra Workday. Somebody who doesn't have the corporate quality signal, the frequency of signal, does it apply or doesn't work as well?
- [17:00]
A
I think it probably does. I think it, it goes down to, like, are you building a, are you building a business that like, understands something of human nature deeply and it gets deeper every single time. And that's a real tangible signal that just doesn't go away. Or, and if you are, then I think you can build your company as an intelligence. If you're not, then it's probably a, an add on to something else. And I think most of the industry is thinking about AI as like a copilot, as something that is augmented onto rather than like how do you just rebuild this, our whole company with this as the core. And if it doesn't make sense for your business to do that and you end up being or looking very similar or rhyming too closely with the Frontier labs, then I think it's going to be very, very challenging to differentiate and survive. And that's kind of what's been leading me to all this is like I just since January of 2024, which is when these tools really came to bear. Like Goose, which is an agent coding harness was one month before Claude Code in January of 2024 and Cloud Code came out that following month. And then like was really put into out of beta in May of that year. And you know, that whole year I just spent every single day, for three hours every morning just pushing myself like can I get it to do something that I didn't think it was capable of or I didn't think I was capable of. And every single day it worked. Like every single day I was surprised. And it's, you know, it's, I'm sorry, it wasn't 2024, it's 2025. It's only been a year of those tools, like one year. It just, the compounding nature of this is pretty incredible. So you know, being able to like see that, understand it and then shift your company to be ahead of it I think is absolutely critical right now. And I don't think people are feeling it enough. They're just living in this abstraction of like, oh yeah, like these tools will make everyone in our company 10x more productive. I don't think this is a productivity thing. I think it's a structural thing that needs to shift.
- [19:23]
B
I think you're right. I think what people are thinking of as co pilots and individual productivity versus your. I think your idea is complete business transformation and I think it's super interesting and compelling.
- [19:35]
C
Can I add one thought I've had as I've listened to this so far? One of my favorite pieces of writing ever is Adam Smith, wealth of Nations. And this idea that if you have the right signals, you can rely on the self interested behavior of many small participants in the system to actually lead to optimal outcomes. But you just need to have the right framework and the right system. I think the way that many companies work today is a little bit more command and control.
- [20:02]
B
Very much.
- [20:03]
C
And you have hierarchies and you have political actions and people are jockeying for position and it's. It's not always clear what is actually true. And I think part of what we're envisioning here is you have a system that's just ground truth and you do away with all the layers. You get back to the kind of productivity that founders often long for. They long for the days when there were 100 people and not 500 people because they were so much more productive. Why? Because you had lots of transparency, limited hierarchy. And so I think the possibility here, as Jack was saying, is instead of just focusing on individual productivity, you. You reimagine how we work together as humans. And you can do it with far smaller number of people that are far more productive. Yes. But there's a different way of working together where you get the right signals. And it's much more similar to a capitalist system where the signals tell you what to build. It's not somebody who pounds the table harder, who gets their product approved, which is, listen, more customers want this than that. That's how we're going to decide what to build next. So for me, there's something quite magical in that realization.
- [21:07]
B
Yeah. About four years into building HubSpot, I eliminated no org charts, no titles, and everyone lost their mind. I didn't like the idea. And we ran that for about nine months and I got worn down and I brought it back. The thing we didn't have was an intelligent system that had all those signals that could help us make decisions. So it's exciting to see this year. I have a theory I want to run by you, Roloff. Like, I sort of think of like there's manager mode. It's a pyramid. The VPs make most of the decisions and there's founder mode. Kind of flat. The founder makes a lot of decisions and then there's. I'm just going to call it Dorsey mode. It's a circle and the AI makes most of the decisions. Do you buy that?
- [21:54]
C
Oh, I don't think the AI makes most of the decisions. I think that, and Jack should correct me here, I think the AI helps with communicating the alignment and the management team, or the inner core helps set the framework. What is the objective function? Are we optimizing for growth rate, gross profit, per employee, net promoter score? Probably some combination of Those variables and the humans at the edges perform an incredibly valuable function of correcting and informing and sort of steering that. And I think one of the phrases that Jack has, which I absolutely love and I've stolen so many times, is companies have multiple founding moments.
- [22:30]
A
Yeah.
- [22:31]
C
There's so many smart people in your company that have clever ideas that every day inflect the product, introduce something new. And so this idea that there's just one person who is the brilliant person who comes up with everything, I just don't think, I don't believe in hero worship or the converse of that where you sort of scapegoat people. I think it's harnessing the best of your team to really advance the company. So I subscribe to the circle idea.
- [22:55]
A
Yeah. I also don't think the AI is making the majority of the decisions. I think it's facilitating a more context rich decision. I think ultimately, like in the most ideal case, our customers are actually making the majority of the decisions because they're just based on their queries and what they're trying to do with the system. Delaney it's like where our roadmap should go. And then it's up to our judgment as to whether that's consistent with what we want to be and what we think is most strategic or not. But we just, you know, we weren't able to get to that level of data fidelity before because we had to infer it. We had to do customer research, we had to do interviews, we had to do look at our customer support, you know, product feedback on Twitter, all these other things. But when your interface is a conversation with your customer, instead of like this visual navigation, you suddenly get like this amazing fidelity of like, what do our customers actually care about? What do they actually want? And it's up to us then to decide if that's consistent with what we want to be as a company or if they should be going elsewhere to do that. And I think all these things are going to blur. I mean, that's the craziest thing is like, you know, again, since, since last year, I've just had this existential dread and also, like hope and optimism at, in the same hour, in the same thought process of, like, what is it? What is even a company going for? Like, what, like, what are these structures going forward? And this is the only, like, durable one structure that I could actually imagine lasting for quite some time. And it was coming from a place of like, wow, is our company just going to be completely irrelevant the, you know, in the next coming years or or even even sooner. Like what do we, what do we actually differentiate on what, what do we have a moat around? And what, what do we need to be to defend and, and also to. To grow that and like what are the. And all, all that follows from customer expectation. Like it. The most amazing thing about OpenClaw to me was that people wanted to take this thing and contain it into a Mac Mini and make it very tangibly theirs and have all this agency around what they did with it. And we're seeing square sellers do stuff with it like that interface with the square APIs and we're seeing cash app customers. And these are like not tech people. These are just like people. I want a bot to help me manage my life. That agency, independent of your thoughts on how good of a system openclaw is right now, it'll get better and better, but the intent behind that is agency. I want to tangibly control this intelligence and for it to better me and what it makes possible for me is incredible. And that expectation floor has just risen dramatically. And that leads me again to. Our limiting factor as a company is our roadmap. We need to remove that from the equation. We need to ensure that our customers are truly building alongside us and that they are seeing us as a series of capabilities that makes their desires fast and easy and valuable. So it really goes back to the capability set that we have and then the intuition of the interface that we have and then how intelligent our world models can be to be helpful and to compose UI in real time.
- [26:48]
B
I spent this morning at a company called Rogo here in New York City. They read your article. Let's say you're advising the CEO of 100 person company. They've already got their hierarchy. What should they do? Should they start with their system? Should they start with data? Should they start with the Org? How should people go about running the Dorsey Playbook?
- [27:12]
A
I don't know about this Dorsey Playbook thing, but
- [27:16]
C
we don't have it all figured out. I think there's an important dose of humility that we have that we're endeavoring on this path. We believe it's right, but we know there's a lot to figure out.
- [27:24]
A
Yeah, it's more like if you were to. At 100 people, or even just starting today, if you were to build your company as an AGI, as an intelligence, what would it look like and what would you need to really differentiate? If I were starting a company today, I would be so excited about how quickly I could build things and how quickly I could prototype and get things out to customers. I would be in this valley of dread about distribution and attention because there is so much noise out there and it's so hard to get to the actual signal of, like, who's building something interesting that will actually fundamentally change something and will be around for more than a year. I think distribution really becomes a differentiator, and I think there's some event horizon where the way we think about distribution today closes off. You know, there's apps, for instance, and websites, and like the traditional retail, there's a number of things that will change. And if you don't have the distribution today, it's going to be very hard to fight for that. But there'll be new areas of distribution that are probably more important. And I don't know what those look like, but I would say, like, I would assume that a company of a hundred probably is no more than two to three layers deep, hopefully. And now would be the time to just really question, do I need a hierarchy? Brian A year into square, I also, we removed titles. We normalized everyone to lead. We did it for, like, we were talking with all these banks all the time, and you would have these EVPs and VPs and they were looking for the same on the business card. And there's this whole business card culture. So we ripped up all the business cards. We normalized down to a title of, like, you're a lead of what? And the longer that is behind lead is probably the farther down you are in the organization. And we've kept it, like, we don't have titles. We have, like, what do you lead going back to the DRI thing, what are you ultimately responsible for? And I think it's helped us a lot. But this is another step. Like, if, if you're starting today or you're 100 today, like, what, what is actually fundamental to solving your, your customers problems? And, and, and where is the hierarchy getting in the way of that? And look at all the tools you're using. Like, look at all the information you're generating just by doing your work. Like, just putting that into an intelligence and being able to query it will give you an understanding of the company that, like, is two to three times more than you had before ever, because you're relying upon people telling you things. And, you know, that doesn't always happen for various reasons that, you know, Roloff spoke to in terms of agenda or politics or emotions or empathy. All these things. If, imagine if your company was entirely legible, like, entirely legible, every aspect of it and we're not far off from that. From a data perspective, it's putting the intelligence on top of it and making it useful and then making it proactive. That's the hardest bet is we can determine causal. Getting to predictability for these world models around the company. And customer is still right now very much a research bet, but it's one that it's imminently solvable.
- [30:58]
B
Can you guys just take me behind the scenes? Jack, this was really bold move. You laid off 40% of your employees. Just like for CEOs listening. What was that debate inside? Like, how big should it be? How bold should it be? You know, Ruth Porridge's got this good line. If you're gonna. If you're gonna eat a shit sandwich, don't nibble. And you seem like you took a big bite. What was that debate behind the scenes? And then rule off, like, how did he pitch it to you guys? And what was the board's reaction just like, behind the scenes on that?
- [31:33]
A
Yeah, so it was something, you know, December of last year is when the. Is the. When the models really got a noticeable upgrade from being able to be really good at building prototypes and greed field efforts to, like, understanding, like, large code bases and legacy code bases like our own. There was, you know, hallucination, wasn't much of a topic in terms of, like, the coding ability. And the tool harnesses became suddenly very mature, like just in that month. And it just like every. Everyone went home for the holidays and everyone played with these tools and they were surprised at how capable they were and what they could do with them. And we came back and the conversation was, like, just going around the table, would you build the company this way? If you had these tools today, what would the company look like? And everyone around the table and my team just said, it would not look like this. It would not be this size, it would not be structured this way. And we've been making changes on the edge, like going from a GM structure to a functional structure to reduce, like putting a cap on our layers to 4v4 and all these, like, small things. But if we were to really reboot and rebuild the company, like, would we end up where we. Where we look today? And the answer was uniformly no. And then we just did this exercise of like, okay, so what is the minimal number of people that we would need to keep the service up 100%? And then next, what is the minimal number of people that we would need to fully be in compliance with our regulators? We're a highly regulated business, so that One's extremely important to us and legal, obviously. And then third, what is the minimal set of folks that we need in order to grow, to fulfill our commitments we've made to the street, but also rebuild the company as an intelligence. And that's roughly the number that we got to. And we built in some buffer in case we made mistakes, which we did, and hard not to, especially operating the way we have. I think going forward, it will be much easier because more of the company will be legible and all of our actions will be a lot more legible. So I'd have a lot more confidence going forward than not. But it was that. And that was a span of expiration to execution in under three weeks. And I think generally I wanted to make sure that if we knew that this was what our company was going to be in the future, I didn't want to have to do it with our backs against the wall. We're a public company, and there's various challenges there, and other companies will probably get to this realization at some point. I don't want to react to that. I want to be ahead of it, because then we can do it with a lot more integrity. We can do it with a lot more generosity for the people that we're asking to leave and even for the people that we're asking to stay. And we're not just reacting into something mediocre. We're acting towards excellence. And that's just the tone that we wanted to set. So every day, it was just constantly checking, are we doing the right thing? Is this the right set of folks? What are we not thinking about? What are we not talking about? And we, you know, we kept the group very, very tight and had a conversation with. With the board, which was, my perspective, very open to it. And actually more. More than open, more like, yes, we agree, like we. We should. We should do this, but I'll. I'll let Roloff speak to.
- [35:46]
C
That was a very quick process.
- [35:49]
B
Okay.
- [35:50]
C
I think part of what helps is that Jack had written us a very detailed note laying out the logic. It's principled. It's not, as Jack was saying, it's not reactionary. It's very well laid out, very logical. It was clear that the company and the management team was interested in a conversation about how to make this work, as opposed to being dogmatic and saying, we have it all figured out. Even in the course of those three weeks, elements of this evolved. And it evolved in light of feedback from management team members and board members. Some of. Some of where we started in the first of those three weeks is different from where we ultimately landed by the time the announcement took place. And also, I think it's just an example of where we've built enormous trust between the board and the management team. You know, we've been through a lot as a team, and so we have a lot of shorthands to be able to make crucial decisions like this. We gathered several times in quick succession to make sure we drilled in on the key issues and the board was fully supportive.
- [36:51]
B
You two, Roelof, you've been on a lot of boards. Jack, you've had your ups and downs with different boards. Any advice for these CEOs listening that should they start bringing at a hundred employees, should they start bringing independence? Should they, like, how do you build an amazing board that really serves the company well, the employees well, the investors well, the customers well. Like, what's your advice on that?
- [37:12]
A
I mean, early on I always told myself and my team that like, your first board is your investors. Right. And I would treat that relationship as a hire you can never fire. And in fact, they can fire you. And I've been on the other side of that. So it really puts pressure on finding the right person that you'd actually want to work with at the company, knowing that you could never fire them. And again, they can fire you. And for me, it was around. I think a lot of young founders kind of go for the brand names, especially around VCs, but I always wanted to go for the person, and that's why Roloff, we were optimizing for him to be on our board and be an investor. But it was the fact that he would uplevel our conversation up, level our execution more than anything else, and challenge us along the way. So even as you think about adding independent board members, the core function of a board is to ensure that the company has the right CEO. That's their one job. They have all these committee responsibilities. But the ultimate fiduciary duty is do we have the right CEO going forward? I think you have to build a board that has different perspective on that and that is open to wild ideas. Things that are going to just seem like crazy in the moment, which, like this one might, might be, but it can be rationalized if we talk through it and we really document it and paint a picture of where this could go and what the opportunity cost is if we don't do something. Because if we didn't do something like this, I just imagine like every year it's a 10% riff or 20% riff or whatever it is. And that is just the most demoralizing, crappy, non creative building of a company ever. And it's all with your backs against the wall and it just feels like losing constantly. And I, you know, I had a conversation with a board like I don't want that, like that's not, I don't want to be at a company like that. Like it, it's just, it doesn't make sense. It's soul crushing, you know, and it's just not, not inspiring and I don't feel good about it. So here's, here's what I do feel good about and like let's, let's go, let's, let's challenge it.
- [39:48]
B
You're on a lot of boards. You're on some really good ones. Advice for CEOs how to build a board.
- [39:55]
C
I think the first financing when you get an investor, if you're getting an investor board member, you should treat it as a recruiting decision, not a financing decision because they'll have a much bigger bearing on the ultimate outcome of your company. And then I'm generally a fan of getting a very good independent board member within a year or two, certainly by the time you get product market fit. And I think there's a, a different relationship that the founder has with the investor board member by virtue of what Jack described, that sometimes that person may come to the conclusion that the founder is no longer the right person to run the company. Maybe rightly, maybe wrongly, if you can get an independent board member, there's a different relationship that the founder has with that board member. And especially if that person has previous experience, it can be a fantastic mentor relationship to help the founder on that journey, depending obviously on their level of experience. Experience. I think boards are often built too late in a rush, especially in the run up to an ipo where people suddenly realize, oh, I've got a four person board and I need nine or whatever the case is. And you suddenly assemble. People have no context, they have no history and they have no chemistry because you will be tested. You're going to have a situation where there's a short seller report or you're dealing with a hostile, you know, situation with activist investor or a tricky financing, you know, that really test the mettle of the team and you want to understand the dynamic between the board members and just their willingness to go long and their alignment with the core values of the business. And so I just think it's one of those things that requires a lot more care than I think Most people apply to it.
- [41:29]
A
Yeah.
- [41:29]
B
Jack, you started a couple great companies here. You're kind of startup founder, Scale Up
- [41:36]
C
CEO Brian, he was the only person to have founded two companies that made it into the S&P 500.
- [41:42]
B
Oh, that's amazing.
- [41:44]
C
And the only person to have been simultaneously CEO of two public companies. Okay, Jack, which should not be, should
- [41:52]
A
not be a goal for anyone, by the way.
- [41:56]
B
Companies, is it ever a good idea?
- [42:00]
A
Not public companies. Private maybe. Private, private. I would, I would. I. I think there's probably going to be more of a trend where people are leading multiple companies that are private, but public companies. Like I should be like an anti goal. It's an anti pattern.
- [42:15]
B
What can founder CEOs learn from, like, what did you do right? What did you just get wrong? What advice do you have for that 100 person company CEO? It's growing really fast. Like, yeah, what do you got?
- [42:28]
A
My only regrets in life and also in our, in our businesses are where I decided not to learn something.
- [42:37]
B
Okay.
- [42:39]
A
Because I like, I embrace all of our mistakes and all the bad decisions we made, but like, if I'm not learning from that, actively learning from it, like, that's, that's what I regret. And you know, in probably the worst case in any of these companies, like just delegating way too much, especially within block. Because like, I wanted to set a structure where we had multiple CEOs in this company, but I realized, oh man, we're just building like a holding company now.
- [43:12]
B
Yeah.
- [43:13]
A
And like we, we got like, you know, the C over here for square and C over here for cash app. And like the value of our company is not like these, you know, unrelated things that are growing at different clips. It's how do we bring them together and like, you know, really, you know, challenge the whole financial network entirely because we have both sides of the camera. So like, why aren't we structured that way? And that I think led to just very differing cultures and values and execution levels. And that was a mess. So I think the one thing that I probably consistently would have corrected would be just delegating too much, too much of that. And I didn't learn that fast enough. That's a regret is I didn't choose to learn from that fast enough. But when you have your whole, your entire company's legible, it's a very different equation. And I think my regrets going forward, if I were to predict them would be like, am I actually putting enough entropy into the system, enough of the intent into the system to actually keep us relevant Going forward. And that's hence the shift. I can't imagine doing anything bigger than rebuilding our company as an intelligence or more correct, given where everything is trending. So it feels like I have to constantly build and constantly learn from whatever we're putting out there in order for us to stay relevant going forward.
- [45:03]
C
So there's one anecdote that came up, Jack, last week, which is how different meetings are today. Maybe you can talk about how frequent meetings are taking place now and what's the color? What are the nature of the meetings today versus what they were a year ago?
- [45:18]
A
Well, I mean, just two months ago, every meeting that we would have would accompany. I mean, you have this, Brian. Like you see a presentation or a Google Doc and we go through it. Now everyone is bringing a prototype that they built, which is pretty amazing, and it's either simulated data or real data. But it's a cut on their work in a way that has far more depth and realism than we could ever get from a slide deck. And because they can actually modify it in real time, we can have a conversation around what they're actually building in real time. So the breadth that we get to explore is suddenly incredible. And that allows us to really, again, it goes back to judgment. Which thread are we pulling on this now? Because we can see everything in the horizontal, where do we want to go deep and what is the right path? And the cost of, like, being wrong on that path and going back up the tree and going down another path is getting closer and closer to zero because the tools can explore the path so quickly. And then also we can go down them much, much faster.
- [46:32]
B
I completely agree with you. Like, a lot of times in HubSpot's
- [46:36]
A
history, what worked was when we were
- [46:37]
B
doing a lot of different stuff and we were distracted. It's like, let's just get focused. And then we made progress. I see the startups these days doing more things in parallel and just being more productive and getting more done. And I used to preach focus. I don't preach it as much as I do, but do you ever, either of you have a reaction to that?
- [46:56]
A
Yeah, it's. I think it's. I think it's having a wider perspective to start. And then, like, because in, in the past, if we were to explore different paths, like, it would be a, you know, three, it'd be a very costly exercise, especially within hardware.
- [47:16]
B
For instance, take you a long time to build that prototype, but today we
- [47:19]
A
can do it in an hour. Yeah. And then. So I, I do encourage more exploration, but I think focus on getting the, the details right when we do choose that path. And like it's the 80, 20% thing, which is like, you know, these tools will build about 80% of what, where we need to go. Yeah. And then that last 20% is to be a function of like how good our creativity, how good our taste is, how good our judgment is, and just constantly pushing these models to doing something we didn't think they were capable of. And that's where I think the magic still happens and where I think the focus still comes to bear. Because at the end of the day, right now, you have to pick something to put out there because we do have a roadmap. But when you remove that limiting factor, as I said, and you focus on building the four things instead, like, you know, the capabilities, interface, proactive intelligence, and the world model, then, you know, it just changes everything. So I don't even know if the question matters anymore.
- [48:18]
B
Yeah. A lot of CEOs are struggling with the second acts. And you've done amazing second act work at Block. You did interesting stuff with Blue sky, interesting stuff with spiral advice to CEOs trying to figure that second act out.
- [48:32]
A
I don't know if I ever considered it to be like a second act. It's just something that like we had, I wanted to do and I had to do and it was interesting.
- [48:39]
B
You're building something new, it's distracting to the Org. And like, how do you resource it?
- [48:44]
C
Well, Cash App was like that in the early days.
- [48:46]
A
Yeah, well, that, that's, that's a good point. Like, so I think every leader has to be comfortable with losing credibility with their stakeholders at some point in order to do something interesting. Like when we had multiple moments and these are the founding moments that I think are critical for a company. But we started with a card reader. Eventually we determined that, hey, we should probably lend money to sellers because no seller wants to accept credit cards. What they want is to get more sales. And what helps them get more sales, more capital to deploy into their business. When we first brought it to our board, our board said absolutely no. Like, you're not getting in the lending business. Like, that's ridiculous. And we lost, I lost some credibility with, you know, the board and our population because we wanted to do this. And we kept pushing it and pushing it. Eventually they said yes. Cash App was the same thing where we were about merchants. Our mission was make commerce easy. And we built this thing that allowed effortless peer to peer. As effortless as just sending an email to start and our COO at the time was on the founding team of PayPal or Keith Raboy, and even he said no. And he said, this is a solved problem. Everyone in the company hated Cash app. It was a team of eight people and hated it for two to three years. We mentioned it less than eight times in our S1 to go public. Our investors didn't understand it at all. And every day that I allowed it to persist and defended it, I lost credibility. And I knew that I could earn it back if we saw success there, and we did. We monetized it and it became profitable, and it's now over half our business. So I think it's getting comfortable with, like, you're going to lose credibility. And if you have an understanding of, like, how to earn that back, it's okay. And you don't have to care about, like, what. What people think. If you have the principle of why it's important and why this needs to exist and. And you're okay with. Yep. People aren't going to trust me for a bit, and it's okay. I'm staking part of my reputation on this, and this is why I believe it. I think it makes all those answers stronger.
- [51:09]
B
By the way, I have a weird story for you. When Sequoia was hiring me, they write a memo when they're investing in a company or when they're hiring someone. And the memo on me was one of my strengths was I was dgaf, don't give a flock. And one of my weaknesses was I was dgaf, I Don't Give a flock. You strike me as someone who has high dgaf and you stick with your convictions for very long periods of time. Founders struggle with that. I struggle with that advice.
- [51:41]
A
Yeah, I would say it waivers for me. Like, it. It. It's definitely. I get a lot of hate, a lot of pushback, a lot of challenges, like, internally, externally. But again, it's. I. I made a. I made a decision some time ago when I first became CEO of Twitter. Everyone was telling me I needed a CEO coach, and I got the CEO coach, and he was a great guy, but, like, I was learning absolutely nothing. And it just reminded me of all these times when you put so much emphasis on, like, who's my mentor, who am I learning from? Who's my mentor? Who am I learning from? And around that time, I just decided, I'm going to shift my mindset, and every single person I talk with, every single encounter I have, every single problem I face, that's my mentor. And for it to be a mentor, I have to decide that I'm going to learn something from it. Every encounter I have is trying to teach me something and what am I trying to learn from it? I would force myself to write it down every day and every encounter and just like, what did I learn from this? And again, my biggest regrets are when I decided not to learn something from it because it's likely that I would have repeated it or whatnot. So even the negative feedback or the credibility loss is a teaching moment. And it's just a decision of like, am I learning from this or not? And that allows you ownership over it. Like, it just like it gives you agency over all this stuff. Like, what is this thing trying to tell me right now? Like, what am I ignoring? What am I being stubborn about? And you know, sometimes I, I get to the right answer, sometimes I don't. And I just like continue in my ways and it's a failure. But I just. Having that mindset, instead of having this one mentor in your life now you have infinite mentors. It's like, you know, it's, it's, it's just an amazing way to approach life and challenges that I found.
- [53:37]
B
You're definitely a learner. Talk a lot about it. On other. I've seen you talk about it a lot. You're a meditator. Should all CEOs meditate? What are the benefits you get as a CEO? And what do you take from Marc Andreessen? Talking about how he's very, he's not introspective. I thought that was an interesting comment. Like, talk about meditation CEOs, what do you get from it?
- [54:03]
A
Yeah, him saying that he's not introspective is very introspective.
- [54:07]
B
I thought that was interesting.
- [54:08]
A
Just to be clear. Yeah, I don't, I didn't get a lot from that, but I, I do think when people think of meditation, they think of like this woo, woo, like you know, person in the desert. And I've been characterized as that and looking at the clouds and like imagine the clouds going by and your thoughts are the clouds and you know, make them dissipate. But if you actually get into like true meditation, it's a very physical thing. Like it's a very physical practice. And what you're doing is you're training your mind to focus on one point. One point. Like the meditation retreats I did were 10 days. And you spend the first three days sitting from 4:30 in the morning till 9pm focusing on the feeling of your breath on your upper Lip, just that and just the sensation of it. And what you're training your mind to do is to sharpen your focus and then just to observe, observe the sensation without reacting to it from an emotional, intellectual standpoint. And then the next seven days you go up and down your body and you're scanning for sensations like pain and you're sitting cross legged and you can't move for three hours at a time and it's super painful and you actually observe this pain and you're just like, you're constantly with this mindset of like, this isn't permanent. If I were to stand up, it goes away. And it's just that training your mind to like recognize everything is impermanent. There's no need to suffer or be attached to something that's going to go away. Like, and you're doing in this very small physical way, but then you apply that whole concept to your, to your whole life, every emotion or reaction or encounter you have. So I would recommend it only because it sharpens your focus, it sharpens your power of observation and it diminishes your instinct to immediately react to things and to actually see them for what they are and then choose how you want to act with that information. So if you think about it as like a woo, woo, you know, head in the clouds, then that's what you're going to get from it. If you see it as a physical practice to make your mind stronger, you'll get that. And that's what I see. And that's what you practice.
- [56:23]
B
Maybe I just close on start with you, Roloff. There's some timeless qualities of CEOs that last the test of time and RUF. You're involved with YouTube, Instagram block, Mongo, Unity. What are timeless CEO qualities and what is new? Like, what are the new qualities CEOs need today?
- [56:50]
C
I like acronyms, so I came up with one which is Ale A L E. Which sort of not a very pleasant drink for most people, but anyway, authenticity, logic and empathy. So authenticity. I mean, are you, you know, are you pretentious? Are you who you do people see who you really are? Do you behave authentically? Are you logical? Are you predictable? Are you rational? Would you fly off the handle? And you're empathetic. Do you really care about the team that you manage? Do you really care about the business? You know, sort of the opposite of being a sociopath perhaps, but deep empathy. So I think of those three qualities, I mean, there are many more that one could list, but you know, I think it Just hard to keep it in your mind. So for me, those are the three most important. Authenticity, logic and empathy. I think when it comes to dealing with humans, most of those things stay the same. And I remember how many of us thought the world was going to be so different in the midst of COVID And I listened to a talk that Steven Pinker gave and he talked about how probably things are going to go back largely the way they were before. And I think the same is true here. Yes, companies are being built differently. Yes, AI is absolutely transformational. It's going to upend so many industries. I think it's the biggest drainer of moats companies have ever seen. But some of the basics of dealing with people and leading remain true. The one I would say is probably different is the pace of change is so fast. And I think kudos again to Jack for the speed with which we're moving on this decision, because it would have been easy to dither for six or 12 months on this decision. So you've got to move fast.
- [58:33]
B
Jack, thoughts on that? Like, when you're. You've hired some amazing people in your career that have gone on to do some amazing stuff, what do you. What do you think and what's changed? What's. What's timeless?
- [58:43]
A
What's changed? I value someone who's able to reprogram their mind and assumptions constantly. I mean, this has stated a lot, which is being able to question your own requirements, your own assumptions and your own decisions, or how rigid you are towards your past, the company's past and sacred cows, or what the competition is doing. It's just, you know, being able to, like, go wild for a bit and then also being able to get that entire corpus down to something that's actually manageable and that can be articulated in a way that other people understand. I think that's extremely valuable.
- [59:25]
B
Has it been valuable or is more valuable? Because things are moving so fast right
- [59:29]
A
now, I think it's more valuable, like, being able. Yeah. I mean, I think it's going to be so easy to go along with the momentum of what's happening around us today, and it's going to be increasingly hard to break free of that momentum, given what the tools do. And like, this is the way we do things. And I think people will, because we're offloading some of our intelligence to intelligences, and people will go along with more likely to default to what these things are suggesting rather than seeing them as an input. I think we're still in the mode where most people are seeing what the intelligences do, these tools do as output rather than better input to create better output ourselves? And I think that's important to me. When I was doing that every day, three hours like this is input to me. And it's now up to me to really make better output from all this new input that I have. And the ability to just take all this and see it at once, it's just phenomenal. So having someone who's able to discern signal from noise and cool from not relevant. This is highly overused right now. But the taste thing is real. And it's not just like I know what things look good together, it's more like, do I have a point of view, do I have a perspective and an opinionated drive to get it there? And is it relevant? Is it more relevant than what else is out there? And I think that's critical. That's what any founder is doing is like I'm building something that didn't exist in the world because I wanted to see it. There's. And because it didn't exist is why I'm building it. And I think right now you're seeing a lot of companies, they're just copies of copies of copies of copies because it's easy instead of what's your point of view, what is opinionated in this and where is it pushing the boundaries and where is it uncomfortable?
- [61:37]
B
I think that's brilliant. It's a great place and thank you both for coming on long strange trip. I love the article you wrote. I think it's going to be game changing for lots of companies. Appreciate you both.
- [61:46]
A
Thank you. Thank you, Ryan.
- [61:48]
C
Thank you, Jack.
- [61:49]
A
Thank you.
- [61:50]
B
Hope you like that. I really enjoyed speaking to him. He's an unusual homo sapien and he's got some interesting thoughts. I think his ideas on how to transform the way you build a company and rethink the hierarchy, they kind of make sense to me. And I feel like at some point in the future it's somewhat inevitable that this kind of thing's going to happen. And I sort of think of it as like when I grew up in my career, I worked this company, PTC in the 90s, it was very, very manager mode, very hierarchical. The power rested in the VPs. Essentially. When I ran HubSpot, they didn't call it founder mode then, but it was kind of founder mode. Instead of being a pyramid, it was flat and a lot of power was rested in the, in the founder's hands. He's sort of proposing the Dorsey mode in my mind. He laughed about it when I said it, but I think of it as like, what's next? And it's more like a circle than a really flat organization. And the power rests in the kind of in the system. And the system makes a lot of decisions and can react real time to the employees and the customers. But I think of Dorsey mode as getting rid of the hierarchy altogether, building basically the brain, getting the inputs right, and having it making a lot of the decisions that the hierarchy used to. I think he's onto something. I'm curious to see what you think. Comment on Twitter or comment on YouTube. I'm curious about your thoughts on it. I think Jack would be curious too. He's in the very early, early innings are rolling this out and he's looking for feedback on it. Anyway, appreciate you all. Thanks for tuning in.