00:28:02 · Nik Storonsky, David Senra
[00:28:02] S1: I read books about Henry Ford. I'm glad you [00:28:05] S0: said Henry Ford. You're sitting there talking about like, you're building a machine. You're like observing these innovations in all different parts of your machine. I need to make sure that it's spread throughout this entire machine. That's like Henry Ford, Andrew Carnegie. He would travel around the world. Now we obviously, technology could proliferate. Somebody could tell you about it, can see it online or whatever. He'd have to like physically go and travel to the factories because they're building physical stuff. And I'm like, oh wait, this idea in Britain, take, I'm gonna take back to America. And that's the way Carnegie forwarded this to, but Carnegie specifically sounds exactly like you, where he's just like, I don't care if it's a 5% improvement in 1% of our business. Like if there's a better way to do it, we are going to do that. And he was moving against usually older competitors that would not invest in technology. And in fact, when they found out that he was spending so much resources on it, they thought he was fucking crazy and actually gave him... Because he ran the company for thirty years, it actually gave him this compounding advantage that by the time... Like, his his competitors could never catch up. He was, like, so far ahead. But it's like you you were thinking very similar to Carnegie in in what you were just describing.
00:29:05 · Nik Storonsky, David Senra
[00:29:05] S1: I think it's super important to us. It's just building the machine, which moves fast and which you choose the goals. And then if if you spot innovation in certain part of the machine, you need to spread it as as fast as possible. [00:29:15] S0: Yeah. And so this idea that you you kinda hate, like, managers that just pass along, like what to do, correct? You've eliminated them from your company? [00:29:26] S1: Yeah, exactly. I've seen so many by now, ten years. Just simply what they do, okay, they take information from individual from individual contributors and then pass it to, I don't know, stakeholders. Right? I mean, it's like, what was what was your value add? Right? Did you change direction of the team? No. I mean, they know what they're doing. Okay. Did you bring any innovation? Did you identify the easiest way to achieve the roadmap? Right? No, not really. But I mean, what was your job? Like, you know, just, you know, taking numbers from them, passing to myself. I just don't get You prune your team is what I've heard. [00:30:01] S0: Yeah. And you're searching for, I think, what you call self guided missiles? [00:30:04] S1: Yes. Self guided people. Yeah. [00:30:05] S0: It's almost like a founder and employee form is what you're going after?
00:30:05 · David Senra, Nik Storonsky
[00:30:05] S0: It's almost like a founder and employee form is what you're going after? [00:30:10] S1: I always joke that, you know, self guided people are self guided missiles. Right? So you've got brilliant people. You don't even need to tell them what the goal is. So they self identify the the goal, and then they self reach it. Right? So they're like self guided missile, which also identify the goals. Then people who are good but not excellent, you need to tell them the goal. And then there, without any kind of iteration, they they will reach the goal. Average people, you tell them the goal, and then you need to spend weekly iterations with them to direct them, to tell them what to do, and then they will reach the goal. Right? So you spend management time. That's what I I don't want. And then below average people, okay, you you give them the goal. You spend time with them, and then most likely they will not heal the goal. Right? So that's the problem. So in order for you to have as many direct reports as possible, you just need to minimize management time spent on each of them. [00:31:05] S0: Let's just assume you've gotten rid of all your below average people anyways. How do you identify the average people, and then do you just fire them as well? [00:31:13] S1: I do. Yes. Like, a lot of people I know who are very good executives, they struggle with this. [00:31:20] S0: Why do you think they struggle?
00:31:20 · David Senra, Nik Storonsky
[00:31:20] S0: Why do you think they struggle? [00:31:21] S1: I think it's just, you know, they much more care about being empathetical to other people rather than caring about winning. So I think if you are much more weighted in terms of winning, right, your empathy to other people is at second place, and then you you will do right decisions even if they are tough decisions. And then people who are kind of, you know, more empathetic or less attached to being a winner, then they might prioritize being number two or number three or number four rather than prioritize getting better people in their team. [00:31:56] S0: Have you heard how Elon speaks about this? [00:31:58] S1: No. [00:31:58] S0: So he would tell the people, like the people managing the engineering team, he's like, if your engineers like you, you're not doing the right job. And his whole thing was exactly that. He's just like, we're here to win, we're here to achieve the goal, and then how people feel is like completely secondary to that. Yeah. Exactly. That's more how you think. [00:32:15] S1: I think it's very important whenever you hire an executive or you observe executives are like people who are very likable by their direct reports. They might not be the right people. I think the best executives there are very tough. Right? Well, they might be likable. Right? But then likable is not the goal for the executives. The goal is always to achieve the goal, right? With a minimum number of resources spent. So they are the best. Say more about this,
00:32:15 · Nik Storonsky, David Senra
[00:32:15] S1: I think it's very important whenever you hire an executive or you observe executives are like people who are very likable by their direct reports. They might not be the right people. I think the best executives there are very tough. Right? Well, they might be likable. Right? But then likable is not the goal for the executives. The goal is always to achieve the goal, right? With a minimum number of resources spent. So they are the best. Say more about this, [00:32:44] S0: because I've heard this, you like small, you like large outcomes that come from small inputs. You just said something like that just now. Like achieve the goal with the minimum amount of resources. Yeah. So it's like almost like an art to like, I know you don't think of yourself as an artist for sure. But like, there is like an art you're trying to like, it's not just you wanna win. You also wanna win like the right way where it's like, you could win and you just expended way more resources than somebody else. I like, no, I wanna try to find the minimum input possible for large outcome. [00:33:13] S1: Yeah. Exactly. If you think what founders do, what entrepreneurs do, what are like great executives do, okay, they have the goal they need to reach end to end. So, what it means, okay, they need to identify direction, where to go, and then they need to build something within this direction with a minimal number of resources spent. [00:33:31] S0: Do you see a lot of waste in the, like, American entrepreneurial ecosystem though?
00:33:31 · David Senra, Nik Storonsky
[00:33:31] S0: Do you see a lot of waste in the, like, American entrepreneurial ecosystem though? [00:33:35] S1: I think there is too much money. Right? A lot of founders, think money is free, which is probably almost free in California because you can raise so much money at ridiculous valuations and then just spend. So I think there is a definite culture of trying to solve problems with money rather than with your brains. [00:33:55] S0: Explain to younger entrepreneurs that are going down that path why that's not the right move. [00:34:00] S1: Well, for example, you're into B2B business, right? And then you kind of, you know, set up a company, you have your first sales first, say, 1,000,000 ARR. And then you decide to scale it. And then suddenly decide to hire expensive VP of sales who will who will hire, you know, like, you know, 50 salespeople to sell your product. You need to find a way to start selling a product cheaply, build the system, and then simply feed additional employees into the system. So you always have, you know, great payback. Starting big, hiring in a very expensive VP of sales who will hire also very expensive team is is