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A
One of the things I have come to believe is that most successful companies in the history of the world are built on a first derivative of the core business. Let me give an example. Union Pacific Railway, massively successful, made more money selling land and homes than building rail, than carrying stuff on the railway. Google, like you search, you get ads like first derivative. First derivatives are what build enduring companies. And Socomtaddy also misunderstands first derivative businesses.
B
Hey, everybody, you have Kaz on the show today. He was the very longtime CTO at Shopify, recently left, and he's the new CEO of Open Door. The reason I wanted to talk to him is he's the most founder Mode CEO I've come across. He's incredibly aggressive and he's not transforming the company. It's a real refounding moment. He's kind of rethinking everything from scratch. I think he's going to rewrite the refounding playbook. And so that part I found very interesting. He gets into a lot of personal stuff and CEOs asked me about, like, work, life, balance, and how do you manage everything outside of being a CEO. It's, it's pretty all consuming. And we talk about his faith, his marriage, his ambition, what it was like to be an immigrant. He talks a lot about how he kind of lines his whole family around his job and the mission of his company. I thought that was fascinating. I appreciate him getting into it because one on one, CEOs ask me about that stuff all the time. I hope you'll like it. I'll be back at the end for a little summary. I thought he was terrific. Kaz, great to have you.
A
Thanks for having me, man.
B
I've been a distant admirer of yours for a long time, and even more so since he took over Open Door. And in preparation for the pod, I interviewed or talked to a whole bunch of people you work for, work with before. A whole bunch of them asked me to ask you about, you know, your first principles for business and life, because they said kind of everything flows out of that. So if you don't mind, I'd love to hear about this.
A
I grew up in Middle east and I moved to Canada when I was 12. Yeah. So one of the things that happens to you when you do that, when you grow up in a culture different than yours, is you get a chance to actually reconsider a bunch of your, like, roots. Like, you're like, you get to reconsider the ground upon which you stand.
B
Yeah.
A
And because of that, you actually have to Be slightly more deliberate about what you believe. I know it sounds odd, but basically every immigrant goes through a version of this, especially ones that successfully assimilate. You get to have, like. If you get to consider, like, what is, you know, what you want your brain to believe relatively early on. And I thought, like, there's like, four I core believe in and I talk about frequently. So I thought about. I'll tell you about those four. The first one is a very good friend of mine once gave me advice that said, you want to optimize for stewardship rather than status in your life and your career. I. You want to do things rather than be things. And this was very important to me early on in my life because people would ask me, what do you want to do? And I would say, title of a job.
B
Yeah.
A
And people would say, like, my good friends would say, what does that mean? And it just actually tends to be. If you think about that in life, it actually tends to be deeply useful to you to think of yourself as, like, what you are doing and what are you doing that in service of. Like, people who optimize for happiness end up not being happy because happiness is a state. People who optimize for service end up actually being usually deeply happy. Like, stewardship over status is like, the. One of the most important ones for me.
B
Okay, I love that.
A
Yeah. And there's a couple other ones we can talk about if you want. But, like, they're like, essentially, stewardship over status, default over everything else.
B
Sorry, I didn't follow that.
A
Default, default over everything else, I. E. The power of defaults in life is underestimated. You cannot accidentally overwrite defaults in life or in software. Really. Like, what happens is people basically accept every default you give them in software. And usually you accept every default you have in life. And if you start rejecting a couple of defaults, you actually fire the software or fire your current life. This is like one of those other things that have been deeply important to me. Those two things are probably the most important things. Those.
B
Seeing those kind of rhyme. What. On just on the professional side and the.
A
Just give me an example.
B
On both sides, what are defaults that you have overridden or ignored on the professional and recently in the professional or personal. I'm curious about that.
A
Well, but now what I mean is, like, if you want to override a default, you have to do it with, like, all your power.
B
Yeah.
A
You can't choose, like, half asset. Really? Yeah. I mean, look, look, I took a job at Opendoor, which was not the default Choice was not my career. And you cannot kind of accidentally do it. You have to do it full force, otherwise the wall will stop you. Let me give you that example. Like, I went to business school for undergrad. I'll give you this example. I went to undergrad for business school. And at a business school, I got a job and a small private equity firm, which was a default choice for going to business school. I lasted 11 days from, like, literally 11 days. And I just. I resigned after 11 days. I'm like, this is not what I want to do with my life. It was deeply uncomfortable. But I kind of knew the only way I would be able to get off this road was by fighting the, like, the safe choice. Now, you can't do that with everything in your life. You generally can't just, like, you can't fight your MacBook default all the time. You can change one or two things if you're deliberate about them. And that has been, like, a core part of my life, is that when I choose to change the default, I just, like, go at full speed. And by the way, a lesson for people who build products is that this is why your responsibility in setting default is so important.
B
Mm.
A
Because if you set defaults such that the user has to think about all the time, they will just fire your software.
B
Yes. And on the personal side, what's the default thing you've overridden or ignored?
A
Quite. Quite a few, honestly, in that area. Like, quite a few important ones. Anyway, let me give you, like, a real. Like, I'm a religious person where. Default for people in my. Where I grew up and what I do is not to be religious.
B
Yeah.
A
Like, I, like, read the Bible every day, go to church every Sunday. And I've done that deliberately because I have found that it makes me better as a human being. Just for me, the deeply selfish way it makes me better as a human being. That's not. I'm not that comfortable talking about this. It's actually the first time I actually talked about it. But it is a way in which I'm different. Like, I know other tech CEOs that would be. This would talk about this. And that has mattered to me. My wife and I have always essentially decided that we would optimize our lives for a certain set of things that are different than most people's set of things. And those two combined have essentially allowed me to have the career I have. I genuinely don't think I could have had it without those two defaults changing.
B
And why do you think. Think you're Right. It's rare that you meet a tech CEO that reads the Bible every day. When did you say, okay, this is me. This is going to inform my life. This is going to inform my work. Did. Did at some point, did a. Something flip in your head on that?
A
Yeah, look, I mean, like, like everyone else who grows up as a nerd, I grew up, like, deeply aware of the power of, like, my brain over my life. Like, it just very. People who are not nerds. Like, I'm. I'm an actual honest, goodness nerd. I, like, started coding when I was 6. Don't appreciate that power every day. And. But for me, it was, like, really important, like, very early on. And what happens if you're not careful in this state, which is what happens to most founders, is depression sets in. This is why many founders end up being, like, relatively depressed, even if they're successful. This is why so many successful rich people are depressed, because they lose control over what their core beliefs are. And then life becomes a rat race. You're always competing with someone, and guess what? Elon will always be richer than you.
B
Yes.
A
And if you're optimizing your life for, like, that, you will always end up being deeply unhappy.
B
It's the wrong race.
A
It's just like you just. It's not a race you can win. And so you. But you do need some races in your life. And what happened to me early on was I'm like, okay, cool. Let me think about the things that I think will set me up so I can have a contentful career, one where I could be proud of my career and proud of my life. And early on, I found, at least for me, that prayer was even before I read the Bible or went to church. I grew up Muslim. Prayer was deeply powerful. This moment of sitting down saying, I don't have control over everything. Let me think and reflect on my day and pray. I didn't really know how to do it at first, but the first I did. Every day for a little while, I
B
just worked, I meditate. Does that fit in that same thing?
A
Almost certainly. Almost certainly. I think it does basically the same job with just one tweak, because I think that is actually most successful people meditate one way or another. I just happen to meditate with someone else present.
B
Got it. So many of the entrepreneurs I work with are immigrants, and so many of the most successful entrepreneurs, including my co founder at HubSpot and CEO of Shopify, are immigrants. I think there's a lot of reasons for that. Is one of the main Reasons though that when they get to the US or Canada, in his case, just like you have a chance to reset, like hit the reset button and rethink your defaults from scratch. Do you think that's part of why that's the case?
A
I think that's a romantic way of putting it.
B
Okay, I'm romantic.
A
I think that's like a upside way of putting it. But the real answer for most, for Toby, for me, for most other immigrants is there is no safety net.
B
Yeah.
A
Like I, I didn't have an option. Like Toby could not. Toby couldn't get a job.
B
Yeah.
A
He had to like start Shopify.
B
Yes.
A
My parents didn't know anyone. Like, I had to like, I had to pay for college, so I had to start working and like, and just no one would hire me. Yep. So like hustling for money and like building websites for people, it just became what I did.
B
Yeah.
A
And I think you typically, people who tell me, hey, I want to grow up to be an entrepreneur might start stand default question is just probably don't.
B
Yeah. Because you probably are one already. You started your pay per view or whatever when you're sick.
A
The type of people who decide they want to be founders because they think it is cool always fail. Like they just always fall because it's just, it's deeply painful and lonely in ways that, that are like most successful entrepreneurs you talk to, if they're being honest, they would say something along the lines of, if I knew everything I know now, I would not have done it.
B
Yep.
A
But I, my, my answer to this is slightly different in that I don't know what else I would have done.
B
Yeah. You didn't have the, the, the wider range of options. And so it seemed less risky to be an entrepreneur.
A
Yeah.
B
Yeah. Risk adjusted upside. And when you did the expected value on all the equations that had the highest expected value for you.
A
Yeah. And I think it's actually a very real thing in life is that like human beings structurally misprice risk.
B
Yeah.
A
It's actually the one thing that is in favor of entrepreneurs. The one thing that is structurally in favor of entrepreneurs is everyone else misprices risk.
B
Yeah.
A
I think it's partially because the way we evolved, it was just like we were just always one lion bite away from dying.
B
Yeah.
A
So we're like, ah, like. But turns out like things going poorly is not as painful as you think it is. You will recover. It's just far more things will go wrong than you expect them to go wrong. Yes. Like each pain is not as Bad as you think it is, but everything is more painful than you think it is. Yes.
B
So I spent a lot of time with CEOs like most of my life these days. And I look back, the, the, the Founder Mode memo, the Paul Graham memo was in, was a little over a year ago. And I think it's had deep impact. Like it's the default now. And I don't think CEOs apologize for that behavior anymore, aren't trying to, aren't being talked into manager mode. And you are now my, in my head, the poster child for Foundry Mode. How does that land with you?
A
Uncomfortably? This is a part of my job. I'm genuinely not good at like this, like talking to people about the job. Yeah, I'm much more comfortable like in Figma, working through product problems, but some uncomfortable being the poster child for anything genuinely. But you think about this. I'm 42 now, so like I think about my responsibilities to the world. I'm 43 and one of my responsibilities, I feel like. So I had this very weird out of body moment where I can remember this. I had a conversation briefly where I was like working at a big company and I came out of a meeting and my boss at the time told me, hey, this is why you will never be an executive at this company. And I said, why? And my boss said, well, because you don't have an executive voice. And I said, what the fuck is that? And my boss said, exactly. And I felt deeply painful. Just was very deeply painful because it felt to me, at the time at least everyone else was being told, bring your whole self to work. Bring your whole self to work. That was like what everyone else was being told. But if you were slightly disagreeable or if you cared about the details a little too much or if you thought, you know, that like 9 to 5 was an odd working hour, like if you thought any of these things, you weren't allowed to bring your whole self to work. You like you were excluded from this thing. So I think what Founder Mode over anything else means genuinely is about the amount of responsibility the CEO takes for outcomes. Like, I'm not responsible. I hold myself responsible for outcomes, not processes. Like, I have a wonderful person that works for me. I'm like, your job is process design, my job is outcome delivery. Okay, look, do we have different jobs here? And her job and her job. Every once in a while I think, Kaz, I need you to calm down for a second and four to five times I will. But the main difference between professional managers and founders is professional Managers care more about process than truth. They care more about what things look like than what they are because their source of power comes from management. Yeah. And that's not where my source of power comes from. I don't have. No one thinks I'm a good manager. Like, genuinely. No one thinks that. Like, I've had. I have managed thousands of people in my job. Like, thousands. And I don't think any of them would say Kaz is a great manager.
B
None of the people I called said you were a great manager in getting ready for this.
A
Like, I think some of them would say I would work for Kaz again. I think many of them would say that. I think would say Kaz is a good leader, but as a good. I'm not a. I'm not the world's greatest manager. I am, you know. But the upsides that you get with having me as your manager, that process person.
B
Has that process person been with you for 10 years or did you just discover that process person when you joined Open Door?
A
No, it's been. She's been with me. She's. Her name is Jung. She's now this chief operating officer of Open Door.
B
Okay, so she came from shop.
A
She was. She was at Shop Flight with me. Yes. And. And like. And at. When I was at Facebook, I had different process person. This, in fact, my first meeting at Facebook, I got hired as a product manager. I was sitting in this meeting and there was a person sitting next to me. And then we started running a meeting and this person literally tried kicking me under the table. I never met this person before. But like, so. And that person also came to Shopify eventually with us. But like, so we had like a. So I need, like everyone has flaws that we need to be aware of. And one of my jobs is to not make myself well rounded.
B
Okay, let me ask you about that. A lot of people say you should work on your strengths, and a lot of other people myself say hire around your weaknesses. Work on your strengths. Are you. Do you ever work on your weaknesses? Like you got lots of feedback over the years. You didn't. I don't lean into your strengths.
A
I don't. I don't. In fact, I think this is like one of the things that you get wrong early on in your career.
B
Me too.
A
You have a meeting with your manager and your manager will give you some feedback about what you've done over the last six months. And then you by naturally say, oh, I'm bad at this. I need to get better. But what you actually have to ask Yourself is. Is the fact that I'm bad at this the reason I'm good at everything else.
B
Yeah.
A
Right. So I have always, basically, throughout my career, had someone whose job it was to round me out. Yeah.
B
Trains on time.
A
Yeah. When you.
B
You joined Open Door, you published a blueprint that I read, which is kind of a user manual for working for. For cast. And it read to me, that's part of where the founder. It reads me as a founder mode kind of manifesto. But, you know, kazish. Yeah. Most CEOs are quirky, and most founders are quirky. I was certainly quirky. Still am. And should all CEOs write a user manual to themselves?
A
Yes, 100%. Look, that's. That. That blueprint is about a decade old.
B
Oh, okay. You've had that for a while.
A
I've changed words in it, like, maybe like a dozen words, but it's about a decade old. Like, I've had. I've had it for a while, and I've given to. I published at Shopify. I've given it to other people. Got it. Got it. And the reason is, look, if you're a founder type, you owe it to everyone around you to tell them who you are. Strong, attract strong, repel. Like, if you go to a restaurant. If you go to an Italian restaurant and you complain the sushi is bad, that's your fault. You went to a wrong restaurant. But if you went to a restaurant that says restaurant and said food is bad, that's the restaurant's fault. My job is to tell you what kind of a person I am. So you can opt in or opt out.
B
Yeah.
A
I intend to change the company. I will work on myself all the time. We all should. We all have flaws. But I don't intend to fundamentally change who I am as a person.
B
Number one on that list caught my attention. It was, I got your back and I trust you, which gives me warm fuzzies inside. But at some point, you work with people and they let you down, or they didn't meet your bar, or they didn't scale. And like a lot of CEOs talk about, you know, hire slow and fire fast.
A
Yeah.
B
If I read between the lines, it. Look, it sounds like you hire slow and fire slow. Is that fair? Do you have a contrarian view on that?
A
No, I think that says something along the lines of, I think the sentence goes, if we work together, I have higher trust than most because we're on the same team. It doesn't say that you will be on the same team. We will Be on the same team forever. Like I start, I find that it is easier. Toby had this concept which I thought was wonderful, called trust battery.
B
Yes. I totally stole that from him.
A
It's just deeply useful. And his point was, hey, I usually start a 50% trust battery with you. As you build trust, I increase it. And then as you go do. I thought about this a lot. I'm like, no, I don't. I, I usually police it with 75% trust in you.
B
I see, I see.
A
But I deplete it much faster than I see.
B
Okay.
A
Because I want to start by being able to allocate risk to you more than you. You, you are comfortable being allocated risk to early on. So I think when I say I got your back, I mean go take the risks.
B
Yep.
A
I'm underwriting you to take the risk. But because otherwise I think what happens is you learn too slowly about what people are like. If you were dropped into a hockey team, you're growing up like, hey, you're the new whatever, left winger on this team. It's a really bad idea for you to assume the centerman is a bad hockey player. It's just bad because you will overcompensate it for the person that you. Without knowing you're much better off assuming they are very good at their job and then doing your job well. That's what I mean. I mean, when I start, I assume you're here, therefore you're good at your job. But I have a much different battery depletion mode than most people. Look, if you look at Opendoor's executive team, since I started from 2/4, so 2/4 ago, before I joined, there's one member of the executive team left at the company that's just strong repel. Strong attract part of the job.
B
Turns out there was a lot of strong rappel.
A
Yeah.
B
You brought up Toby. He's. He's on my Mount Rushmore of founders. I think he's very special. What can CEOs, other than the trust battery thing, which I, I think is great. What can CEOs learn from Toby?
A
There's a concept in finance called discount rate. Like what is the discount rate on anything? And most corporate types apply a very high discount rate to outcomes. That is, if something's going to happen in five years, they value it at like 20% of value. Tobi applies a discount rate of zero basically to the future, where Tobi is built for the long term in ways that are very difficult to do in a modern public company. Like, he's determined to care about what happens 10 years from now as much as what he cares about what happens now.
B
Okay. Very long horizons, very long, very long horizon.
A
And it's deeply useful to think about it because I think what actually matters generally, I think there are two useful timeframes to think about if you're managing a company this week and ten years from now.
B
Okay.
A
Like, this quarter is actually a deeply useless measuring period.
B
Okay. So everyone's got it wrong on the quarters. All right, tell me why.
A
I think weeks are very important. Like a week is an incredibly important period of time because you can get a lot done a week. You can validate most ideas in a week. You can ship most things in a week. But 12 weeks, in my experience is not that useful in really anything. It's just not immeasurable. It sounds like not cohorts don't bake enough in 12 weeks. Like they're just like, you know, the outcome of most things either in a week or in a very long time.
B
Right. Okay, I like this. What else can people learn from?
A
Toby, Building companies outside Silicon Valley is a deeply useful thing. Like you guys built HubSpot outside Silicon Valley. I think partisan HubSpot was successful is because it wasn't in Silicon Valley.
B
I'll give you a thesis on that. Because Shopify and HubSpot started around the same time. We both started in SMB. And I don't think either company had a choice because Silicon Valley is so allergic to SMB that if we were in, in, in the Valley, we probably would have either been talked out of it or wouldn't have been able to raise money. So I don't think it's a coincidence that, you know, two pretty big SMB companies get founded in Canada and Boston.
A
Yeah, I think, I think this, I mean, by the way, I think the same is true for real estate software.
B
Okay.
A
Relatively allergic to it. Yeah. I think this is partially because despite the fact that most Silicon Valley type understand the idea of cohorts and how they bake. Yeah, they're. They understand it theoretically, but not deeply. Like the cohorts of HubSpot and Shopify and by the way, Opendoor just bake differently. And like most, even in, like, this is why Silicon Valley, by the way, loves enterprise sales companies. This is deeply loves enterprise sales because they're like, I understand that model perfectly. I understand the like the ideal customer, like ICP of the ideal customer profile. Like SoCal loves enterprise software and consumer. Those are two things that are like, ah, we gotta know how to understand how to underwrite These things. But like, churn is something Silicon Valley doesn't genuinely understand. And the other thing Silicon Valley doesn't really understand, which is odd. Genuinely odd. So I'm going to tell you. Give me some rope here for a second. Toby once asked me to take over Shopify Shipping. He's like, hey, you're gonna run Shopify Shipping? I'm like, great. The first thing I did was I went and read the U.S. u.S. Postal Service act, which was written in the 1700s. I'm like, I'm gonna go like, read this thing that is the basis of this whole system. Okay. I need to understand, like how the system works.
B
Yeah.
A
So I'm deeply curious about the history of things. Deeply curious. And one of the things I have come to believe is that most successful companies in the history of the world are built on a first derivative of the core business. Let me give you an example. Union Pacific Railway, massively successful. Made more money selling land and homes than carrying stuff on a railway.
B
Yeah. And Shopify started as a SaaS company. As a payments company.
A
Yeah. Like, I mean, I think it's like a. Generally a merchant services company.
B
Yes.
A
But yeah, like payments, tax, billing, like ads, bunch of other stuff. But this is actually the core. Most of the most successful companies in the history of world Google, like, you search, you get ads like first derivative. First derivatives are what build enduring companies. And somebody also misunderstands first derivative businesses because a CAC and LTV is slightly harder to calculate.
B
Yep. Just inside, I want to get to the shipping thing. At one point, Shopify made a huge bet. Like, we're going to buy warehouses, we're going to have inventory, like, we're going to do the whole E commerce stack. And you ran that play for a while and, and I was watching from afar like, oh, that was impressive move. And then at some point you said, actually we don't want to do that. And you divested in that business. You just take me behind the scenes to the discussions and when you made that bet and then even more importantly, behind the scenes of what happened and how long did the discussions take and what were the protagonists saying when you decided, hey, we were wrong, let's get out of this business. That was a very interesting chapter for you guys. And I admired, I admired it.
A
Getting out. The decision to get out of it took about three weeks, I think four weeks.
B
Where did it, where did it start? Did somebody send an email to Toby? Like, we were all wrong about this.
A
So look, I took over as a chief operating officer at a company
B
In
A
I think September of 22 and we sold a car. We sold publicly sold logistics in May of the following year. It's like well understood. These sales probably takes three months to negotiate. So like you can back figure out when the decision got made.
B
So you thought, you thought it was a bad call in the first place. You took over the new job. Like, okay, I think we should unwind this.
A
I think it's odd to hold your past self guilty. I think you should try very hard not to hold your past self guilty because you made the best decision you could have made at the time. Yeah. You also owe it to yourself to make a brand new decision every day. On facts they learn. And Shopify needed to focus way more on its core business and less on side quests. And Toby just genuinely was like, yes, we should go on like main mission.
B
And what caused it? Did you feel like your main business was getting wobbly? The cohorts were worse yet a new competitor. Like, where was the inkling and what was, what was the meeting like when you were arguing about this or you didn't even argue about it?
A
No, it wasn't. There was no pound table fisting thing.
B
Yep.
A
Shopify was a place where we had honest conversations frequently. No, I think what happened was, look, facts on the ground changed. Right. When Shopify got into logistics, there were no good ways for small business to do logistics. Like, there just wasn't any. Like it was Amazon or bust.
B
Yeah.
A
In the four years since Shopify started, a bunch of very good companies got started and were very good. Walmart gone to space. DHL got into space. All the alternative to us doing it changed. We were not jealous of anyone else's margin. We didn't get into this business because we're like, yes, margin. That's not how great businesses are built. So people we needed to serve didn't need us anymore. So we're like, okay, great, we don't have to go buy concrete. Great. Concrete is annoying. Let's go back and deal with electrons because electrons behave differently.
B
Was there a shit fight internally? I guess is my question. The person who owned that initiative pushed back hard.
A
No, no, it was, it was very. It was incredibly. You'd be surprised how easy it was to get everyone aligned and execute against it.
B
I saw the outside as a whopper. Like, I was so impressed that you're like, we made this big bet.
A
Know what?
B
You're wrong. Let's not continue to throw bad money after bad money.
A
Shopify is incredibly good company at successfully discovering things that don't Work and being honest with itself.
B
And is that Toby? Toby strikes me as like, Toby's one of the few, very few people on the planet. That makes me a little bit nervous. Very few people like that. And then he's just. He's kind of stern and he's kind of tough and he's very, you know. Does that come from him?
A
He's not that stern generally. I think he's a kind, wonderful human being. But Shopify is deeply committed to truth
B
above all else that comes from him, I assume.
A
Yeah, of course, of course. That means companies are exoskeletons of their leaders if they're good.
B
I like that.
A
Like, very real thing. Like, like every company must be an exoskeleton of its leader if that leader is good.
B
Yeah.
A
So Shopify is an exoskeleton of Toby.
B
Yeah.
A
Okay.
B
You work for Zuckerberg and Toby. How did they rhyme and how did they not rhyme?
A
I mean, I worked with Tobi much more closely with Mark, but I, you know, I knew Mark and I know Mark. They're both deeply product focused. Deeply product focused in, like, ways that are genuinely impressive. They're both very, very long term focused in ways that are just genuinely impressive. They've both built companies the hard way. Like, generally. Like, it's like if you look at Mark lost his entire executive team after he turned down the Yahoo acquisition. Like all his friends put on him. Like, how many people survive that? Yeah, like, no one survives that. Like, no one. But they built companies at heart. And they're very. They're very similar in that way generally. Now I think Mark is more of a product manager at heart and Toby's more of an engineer at heart. So that. That manifests itself differently in how conversations go. You end up having lots of conversations with Toby about the ShipIt API. Mm. But they're very similar people.
B
Okay, how did it all go down with the Omenor is kind of cruising along very low market cap. And take, like, what the hell happened? Keith and the founder and you got together and took over this public company. Like, take this behind the scenes. What the hell happened there?
A
I'm generally comfortable saying this. I don't know how this could have happened without some. Someone else's plan. Like, I was flying back home from Dallas, Texas in February, where I was hosting, like, this event at Shopify. We call it top 100. Like, typical corporate event. And I, for fun, take apart companies. Like I do. Like, it's just one of the things I do for fun is like, learn about history of Companies. And on that flight, for no reason at all, genuinely no reason at all, I picked Open Door. I'm like, let me learn about Open Door, okay? And then I became. And then I spent every weekend for like four weekends in a row, like, taking up a. Modeling Open Door, taking it apart, thinking through it, thinking through a product, using the product, and got to a point where my wife and I, at dinner were basically only talking about Open Door for a few weeks.
B
You sound like a barrel of laughs, by the way.
A
Yeah, yeah. Poor wife. And then I. I texted Keith in March, and you knew me this. I knew this Keith.
B
Your boy, Coastal Ventures.
A
I messaged him saying, hey, I've talked to my wife. We're going to go all in and we're going to spend our entire net worth to take Open Door private. Like, my wife and I are going to do it like. Like sell everything, spend every last pay and a half, leverage ourselves as much as we can, and take Opendoor private.
B
And what was the company worth at the time?
A
Billion. Few. Few hundred million.
B
Okay.
A
Basically, he said, do you want to do it with me? Like, that was my point to him. And he said, yeah, let's talk about it. And then we had one conversation. And then the company did this insane, genuinely insane financing that basically made it impossible to acquire the company and take a profit. It was just like. And my plan wasn't to run the company. My plan was just like, stay at Shopify, join the board of the company and just like, yell at them over, like, product choices they were making.
B
Yeah.
A
Because I generally never thought I would leave Shopify. I just really liked the company. So I didn't. By April May, I should have kind of given up on it. And then I got a call one Sunday from Paul Diversa, who was a recruiter. And Paul had been trying to convince me to go be a CEO of a bunch of other companies. And I had always said, hey, I'm not interested. I love my job. He called me on Sunday and I picked up the phone like, paul, I appreciate you. I'm with my wife. I haven't seen her for a while. I'm not interested. Whatever it is, I'm not interested. He said, CAS is a public company, CEO job. And I said, paul, I'm not interested. And then that's a takeaway. I said, unless it's Open Door.
B
Okay.
A
And he said, it is. How fast can you get to New York? I was in New York in about five hours after that. And from that conversation to me being announced as the CEO of Opendoor was maybe 15, 16 days in.
B
Behind the scenes, Keith and Eric, who's the original founder and Keith's the original investor, were they just baking on it? And did they reach out to Paul and say, we want to hire Kaz as our CEO? Like, how did. What. What the hell happened?
A
Yeah, I think Keith and Eric had essentially decided they were going to, like, rescue the company. Yep. And they need. They needed a CEO. And I actually don't know how the conversations went because I think they were trying to for a while, but I should actually ask Keith how that conversation went. But, yeah, my input to it was a phone call on a Sunday from Paul saying, hey, like, are you interested in this? And it generally happened very fast. Like two and a half weeks, I think was the entire time mechanically.
B
You three said, all right, we're going to throw it to CEO. Did you buy all the shares up? Like, how the. How do you take over a public company like that? It doesn't. I haven't seen this. I don't know. That's. This isn't a common occurrence.
A
What happened was, like, I met with the existing board.
B
Yeah.
A
The existing board had a CEO search.
B
Yep.
A
They said, hey, under what conditions will you join? Take this job. And they were incredibly kind and generous. Like, the existing board was desperately trying to fix the company. Yeah. Like, they realized that, like, there had been change and the previous CEO had left. And so I told them, hey, like, I want the fallen board members on the board. And I want you to promise me that you will not care about what it looks like for a while. Because, like, I'm not a caretaker type. I intend to build product for. For a living. So it was actually very surprisingly easy conversation. It was whirlwind. And I remember it was like the night before the announcement. I was with my family in New York, and it was 3:30am and my wife was sleeping in the hotel room. So I couldn't be in the hotel room. But I was on a call, pacing up and down Central park west, because I didn't want anyone to overhear me talking. Cause I was talking about a public company, like, figuring out how to do this. So it was intense, just generally intense, but not hard. Like, it was like everyone was trying to solve a problem.
B
And so you three didn't buy the company. You all joined the board. You obviously got a bunch of shares. And I guess the other two did as well.
A
Well, they invested. They invested in. So they did a pipe and they invested in the company.
B
I see. And what happened to the board?
A
A Few of them remained, few of them left. It was like refresh the board. The board is excellent, just excellent board. Now I'm very happy with them. I would put up our board against any board.
B
You talk about it as a refounding. Should more public companies do this?
A
Yes, yes, I think it is like you are. Look, I think professional managers are good at managing a decline, like a slow decline. You don't have to, it doesn't have to be a big decline. But the exothermic power that leads to extraordinary outcomes is not found in professional managers. It just isn't. So what you end up having is these periods of like up and then very slow decline. And eventually General Electric happens, right, this like wonderful, like American company and it didn't have a refounding moment and it is now what it is. Whereas Microsoft has had a refounding, for example, like a very obvious one. Yes, I don't think they use that word but that's very clearly what happened.
B
Yeah.
A
So the question is not whether the founder is there or not. The question is whether the founder seat is taken or not. Like is someone occupying the founder seat? Yes or no and otherwise because what happens now? Look, I don't think every company can do this. I think some companies are structurally not set up for this. Most conglomerate are not. Like if you're a conglomerate it's very hard to do this. But if you're a product company you require like exothermic pressure on the system and it has upsides and downsides. It could go well or it can go poorly but it is certainly not managing a decline.
B
One of the things that surprised me was you joined, you hadn't really even said anything and the market cap went up by I don't know, 6, 7x. I know you're incredibly bullish about it and you're very long term thinker about it and you think it's an amazing. Were you even surprised about how much the stock price went up when you joined?
A
This will be odd, Brian, but I genuinely honestly don't think about the stock price. I really don't. It's very. And I know it, it sounds odd to say I don't think about it is not. I think what I do is correlated over a long term with the stock price and not in the short run. Like I, I have talked to a company about the stock price twice since I joined and both times has been to say something along the lines like this. The stock price going up 15% doesn't mean we were 15% smarter. It just doesn't like what it mean. Our job is to create value and solve problems for our users. If we do that well over a long enough period of time, the company becomes valuable. Like I don't genuinely understand CEOs that have the stock price on a Bloomberg terminal in their office. I like, I believe I owe a duty to our shareholders to deliver value to them.
B
Or they've got CNBC or Bloomberg on because it just creates a knot in your stomach in such short term behavior.
A
Here's the thing. Watching ESPN does not make you a good professional quarterback.
B
No, it doesn't.
A
Watching CNBC does not make you a good professional CEO. It just doesn't. Like, I think it makes you worse
B
because you start to think very short term about things.
A
Yeah, look, I, I, oh. I view it as my duty to deliver value for shareholders. I'm not denying that it's their money like their own shares in the company. Their company. But I think our shareholders should expect me to deliver value over a long period of time and to be mostly agnostic to day to day.
B
Yeah. Okay. In Silicon Valley, in tech, turnarounds are extremely rare. Very rare. Something starts going down. It doesn't happen a lot that it turns around. Why is it different?
A
I mean there are examples of this, there are examples of successful turnarounds. There aren't that many. I agree with you but because most of the teams that have tried to do a turnaround haven't done it like this. The most successful turnout obviously is Apple. Like very clearly. And by the way, Apple was in much more trouble than Opendoor is today. Like objectively more trouble. Like worse position.
B
Yep.
A
I don't think there's that many lessons to be learned about why professional CEOs fail. I think management types can't really, like I said, slow decline or slow climb, not significant change in direction. That's just not.
B
Do you think the problem people so, so many venture capitals are holding companies are going sideways and you think the playbook is okay bring someone in but it's refounding and really shake it hard. Do do it like, like, like Steve Jobs. Don't make incremental change, don't change pricing and packaging. Don't spin out one thing.
A
Look, I think the going state of companies like the existing inertia is real. And usually when things are going sideways, it's not because one thing is going poorly. It's because you're in a death spiral. Yeah, right. And what needs to change when you're a death spiral is everything.
B
Yeah, got it.
A
Everything must Change because the alternative is bad. And like what happens unfortunately sometimes is managers are incentivized to delay death. But I think this is actually why RSUs are incredibly harmful to CEOs. I think professional managers, when they get RSUs they're incentivized to delay the inevitable sometimes.
B
I couldn't agree more. I liked the world when it was ISOs.
A
Yeah, like it's just, it's like I think it's a very bad change in structure. Like management teams should be incentivized on outcomes like performance based over everything because I have zero incentive to manage a decline. I just don't have one.
B
Like okay, so how are you?
A
How do.
B
How did you all decide to pay you? Is it an Elon style package? Like what. Not that size, but like the structure.
A
I mean what I wanted was I asked for a salary of a dollar and options. I'm like, I would like options.
B
Okay.
A
But the combination of Delaware and SEC have made granting options in this particular way very difficult to in public companies. So we essentially like constructed a package that looks a lot like just options use PSUs. We have PSUs with like PSUs have zero value below a certain price, some value above certain price. So I kind of like how it looks like some of them have like strike prices that are high. Some of them like just. They're very similar in that structure. I think this is actually like the right alignment between me and the shareholders because otherwise like it's very. Look, Wall street is full, genuinely full of like Harvard MBA types who have driven the companies to zero while getting rich. Like it's just actually very. That's terrible, man. It's terrible because you want companies to matter.
B
It's not all companies, let's not exaggerate.
A
No, no, no. You want, you want companies to matter. You want companies to matter like any company needs to matter. Now I don't think all Harvard MBAs are terrible. Clearly not. Very clearly not. But I do think there are too many examples of people who got rich destroying companies.
B
I agree and I feel the compensation plan are all wrong. You're coming into a company that was probably not AI native, was probably not product oriented. And you said something interesting. You want to be the most aggressive software company ever. I'm curious about that. I'm also curious about how do you take what was likely a very non AI company and make it AI native
A
can. This is calated result of what happened. We had a company wide hackathon 10 days ago, I think and we have people we call HPNs. These are people who essentially renovate homes. They're people who manage renovation homes. One of them wrote a piece of software. There's a guy who was like essentially a gc wrote a piece of software that automated away his entire job and he's now a manager of a bunch of pieces of software to do that. Okay. This guy had never written a piece of code in his life before. Like was not opened up Cursor opened up Gumloop. And like, we helped. Like, we had, we had coaching. We had like, the folks from Cursor and Gumloop and OpenAI were in our offices teaching people how to do things. And so end result is that I think everyone at Opendoor uses AI every day now.
B
And you think the hackathon sparked that?
A
I think Hackathon was us testing whether we had built the muscle for the previous 10 weeks. What changed was like, look, I had a very honest conversation with the company, which is, hey, like the first line in your job description is you default to AI. And what do I mean by you default to AI? Because there's a very real thing that happens. Every company has a performance management system. All of us do. Most companies lie about the purpose of performance management system. Like, we're a professional sports team. The job of the professional, the performance management system is to tell you whether you get to play on the team or not. That's the job. That's why the company. So I will evaluate people at Opendoor about on whether they default to AR or not as the first question in the performance management system.
B
Got it. Okay. That's a good way to do it. So I'm out. I'm listening to this pod. I'm a VP of XYZ at a public company. I want to do what you did eventually. What advice do you have for people working in the middle of HubSpot, in the middle of Facebook, in the middle of whatever, Google, if they want to be you someday.
A
I didn't plan to do this. This was. There's no 10 year secret plan for Casio Public Company CEO that just doesn't exist anywhere.
B
Yeah,
A
what I did was I decided I would have a career rather than a job. Like, I didn't really ever care about how much I got paid. I generally didn't really. Honestly, what's the difference?
B
You wanted a career, not a job. Just unpack that.
A
So a job is something you do for someone else in order to get paid.
B
Yep.
A
A career, a career is something you work on every day for yourself. There's a very real difference. There's a very real difference in how you react to the thing. And most people have jobs and that's totally okay. It's totally okay for most people. Most people are like, hey, I optimize my life for something else other than what I do at work, that's totally okay. But I don't. I optimize my life for my career and my wife optimizes her life for my career and my kids optimize their childhood for this thing we are doing together as a family. Right. My kids know what opendoor is. Like, I have a conversation about building products with my 6 year old and we have like, this is what we do. This is our conversation. This is like our dinner conversations. Like our job as a family, we're all in as a family. Like, we're not. Like, this is not a, this is our main mission. That's, that's the outcome of years of essentially saying, I will give a lot of fucks about the thing I'm doing at work every single day. I will care a lot and I will self identify with my work, not with my ideas, with my work. And this, by the way, is very odd because like I've. The advice you get when you're young is almost certainly terrible. My advice to you if you're young is work all the hours. Like, if your manager is letting you work, work, just work all the hours. Because otherwise you will not become good at the thing that is your craft, your discipline. If you were a woodworker 200 years ago, you'd be in the shop learning what it feels like to cut a piece of wood. The feeling would matter. And you need to discover when you are young what your breaking points are. And the only way you can do that is working hard. Tom Brady threw a lot of passes before he got good.
B
And do you think people, young people, should follow their passion or is that kind of bullshit? I heard Scott Galloway recently talking to a bunch of students. He was like, a lot of rich people look back and they say, follow your passion. But they really didn't. They were just practical and they dug in on something that was nasty.
A
I think this we should look for. You should think, how can I be of service to the world? How can I be of service? And if you think of it like that, I think things usually end up working out okay. If you think, what can I get? Things usually end up working poorly. Like, and this is like true in relationships, by the way, as much as it is in your career. Like, you want to view yourself as a net addition to other Things around you. Hmm.
B
Okay.
A
I.
B
You've talked about your family a bunch, your wife a bunch. I've seen you're tweeting about it. I'm 58 and I've never been married. Why am I doing it all wrong?
A
I mean, I don't know if you're doing it all wrong, but if the average person was doing what you're doing, they would be doing it wrong. I think the averages are, like, important, but there are people on the extreme ends to whom rules don't apply. I wrote a book about this. It's called Get Married.
B
Why should people get married early? And why should they design their marriage like yours? You've got an unusual setup there.
A
I don't think everyone should design their marriage like me, but I think most. The book I wrote essentially is the health, wealth, and happiness impacts of marriage on men. That's what the book is about. It's. I wrote about. I'm a man, so I wrote about men. The data is undeniable. Yeah. There are types of cancer where being married is as good an indicator of survival rate than chemotherapy. That's a very real thing. Now, I'm not saying all cancers, obviously, I'm not stupid. But if you live in the United States or Canada, if you. The following three things in the following order, your odds of being unhappy or poor are almost zero. That is graduate high school, get some work experience, get married before you're 30.
B
Okay?
A
If you do those three things in that order, the odds are like, you'll have a real happy, fulfilling life. Now, that's not for everyone. Like, you should know yourself and be good, but you should also be honest. Stuff with yourself to recognize that the odds are you are not special. The odds are the thing that has worked in history for humanity will work for you. Now, some people are different. Like, I'm different in some ways than everyone else. Brian, you're different in some ways, possibly in this way, than everyone else. We undervalue as a society the importance of marriage and more importantly, the importance of kids. Like, I am a better CEO because I have kids.
B
Tell me why.
A
It is a lonely job. It is deeply lonely. And my kids know the mission of Open Door and why I do what I do. And they ask me about it, and they're proud of me for doing it. And we have conversations that have nothing to do with work or something to do with work, but it makes the hard less hard. I'll tell you a story. There was a day at Shopify where we did a riff, and I insisted That I would exit the most people. I would have more conversations than anyone. I had rented an office in Palo Alto. Cause I was in Palo Alto and I got to the office in that office at 3:45am I think Palo Alto time I started having one on one conversations. And I had. I finished around 7pm Palo Alto time. I hadn't left the office. And I hung up my last hangout and I burst out crying.
B
Yeah.
A
Just like burst out. Could not stop myself. And I walked. We were in an Airbnb. I walked to the Airbnb where my son ran and gave me a hug. And it was like, like daddy mode kicked in and I was just. It changed the day. That day will still go down in history as the worst day of my career. Yeah, I felt, I felt a deep pain in way I will. I genuinely don't think I will ever recover from it. But like I could do it because of my son and because of my family. That was deeply meaningful.
B
Alas, you've had good karma.
A
Yeah.
B
You talk about karma and I'm gonna give you like, I was just listening to Ben Horowitz talk about how he's kind of the opposite on karma. He's like, life is deeply unfair. Get over it. And like he didn't say he doesn't believe in karma. But I feel like I happen to be listening to him the other day and I read about your karma thing. Talk about karma.
A
Like some life's not unfair. It just isn't. Okay? You are destined for something. Your job in life is to discover that destiny and discover your mission. And you need to work on that and work on yourself till you discover it. And I think that could be different for anyone. And the more good you do, the more good you get back. Now, it may be difficult. I'm not saying it's easy. It may be difficult. It is not unfair. Look, I'm more comfortable with this because of the thing we talked about at the front of the talk. But there's a deep purpose that I have. And my purpose is to make it such that the average family can afford a good home and raise a good family and so we can reduce the friction and the cost of homeownership that's deeply fulfilling. It is difficult, but fulfilling. And I find that difficult and fulfilling are highly correlated.
B
Yes, I do too. Okay. I wish you great karma in your new venture. I appreciate you coming on the pod. You are a very, very unusual, interesting, fascinating person. Thank you for coming on.
A
Thanks, Brian. I appreciate it, man.
B
Okay. I hope you liked that episode with Kaz. I think he's awesome. He's one of the most intentional people I've ever met. Never mind intentional CEOs, intentional people, his leadership style, the way his family works, how he defines success, pretty much everything. He overrides every default and he does it over and over again. Now, I actually think this is a very good podcast for existing CEOs. If I were an existing CEO of a company, it's an interesting time to be a CEO. I think I would approach it and pretend like if today were my first day as an outside CEO joining my company, I were unencumbered by all the good, bad, indifferent decisions I made, all of the baggage, all of the stuff that's happened, what would I do if today were my first day as that outside CEO? That's the way I think people should be thinking today, particularly with all this going on in the world. And you don't do that, you run the risk that the board's going to do that for you. And so I like his playbook around that. He's interesting guy. It was one of those conversations that really kind of made me re examine how I'm showing up not just at work, but everywhere and re examining my own defaults. And I wonder if you had the same reaction, like, what are the defaults that you're rethinking based on this? Anyway, I hope you liked it. If you want to chat about it, I'm at B. Halligan on X. Let's keep the conversation rolling.
Host: Brian Halligan (Sequoia Capital, Co-founder of HubSpot)
Guest: Kaz Nejatian (CEO of Opendoor, former CTO/COO of Shopify)
Release Date: March 12, 2026
This episode dives into the radical and refreshing leadership approach of Kaz Nejatian, who, despite not being Opendoor’s founder, is leading with what Brian Halligan calls "founder mode" energy. The conversation explores Kaz’s first principles for life and business, lessons from his immigrant journey, his career philosophy, his spiritual practice, and how these inform his uniquely aggressive, intentional, and all-consuming leadership style. The episode is rich with practical wisdom for CEOs and founders undergoing refounding moments, especially within tech or public companies facing existential transitions.
[02:28–07:01]
[11:01–13:32]
[07:01–10:51; 57:47–59:34]
[13:49–19:08]
[19:45–21:25]
[24:14–26:09; 28:31–32:57]
[35:17–43:24]
[43:24–49:41]
[49:41–51:47]
[52:17–54:43]
[55:07–57:45]
[59:34–61:13]
Stewardship over status:
On immigrants and risk:
Defining ‘Founder Mode’:
Why publish a user manual:
Shopify's truth-telling culture:
Company as exoskeleton:
On CEO compensation:
AI transformation story:
Marriage and emotional resilience:
On karma:
Kaz is deeply candid, self-effacing, and direct—often to the point of discomfort—with a consistent thread of introspection and intentionality. He avoids platitudes, is critical of business orthodoxy (MBAs, process obsession), and speaks with immigrant pragmatism but also a spiritual, almost missionary zeal for truth and purpose in leadership.
This conversation is a playbook, memoir, and CEO therapy session in one. If you’re wondering how to lead an existential company transformation (founder or not), how to align your whole life around something bigger, or just how to rethink defaults in your own company or career, Kaz’s journey from coding at six in the Middle East, to Shopify’s inner circle, to Opendoor’s ultimate refounder, will both challenge and inspire you.