Lenny's Podcast: Product | Career | Growth
00:37:03 · Lenny Rachitsky
[00:37:03] S1: [inaudible 00:37:04]. Luckily we got some sweet podcasts to check out, to keep up to date with what's happening. We'll link to yours, of course. Here's a puzzle for you. What do OpenAI, Cursor, Perplexity, Vercel, Plaid, and hundreds of other winning companies have in common? The answer is they're all powered by today's sponsor, WorkOS. If you're building software for enterprises, you've probably felt the pain of integrating single sign-on, SCIM, RBAC, audited logs, and other features required by big customers. WorkOS turns those deal blockers into drop-in APIs, with a modern developer platform built specifically for B2B SaaS. Whether you're a seed-stage startup trying to land your first enterprise customer, or a unicorn expanding globally, WorkOS is the fastest path to becoming enterprise-ready and unlocking growth. They're essentially Stripe for enterprise features. Visit WorkOS.com to get started, or just hit up their Slack support, where they have real engineers in there who answer your questions super fast. WorkOS allows you to build like the best, with delightful APIs, comprehensive docs, and a smooth developer experience. Go to WorkOS.com to make your app enterprise-ready today. Let's talk Halliganisms. Essentially these are nuggets of wisdom and advice that you find yourself sharing often, you've written about a bunch of these online, and so let me just go through them and then just share the synopsis of the advice and the lesson around this Halliganism. The first is, "When you have to eat a shit sandwich, don't nibble."
00:38:30 · Brian Halligan
[00:38:30] S0: Okay. Completely stole this from Ruth Porat, the CFO of Google. I saw her quote somewhere, I'm like, that's it, she's put a perfect thing on it. And I'll give you an example where I think this will play out over the next couple of years. I think within the next couple of years there'll be a real retrenchment in valuations, and some will live up to valuations a lot [inaudible 00:38:54]. Like, if I look at the public markets, they're very tight right now, it's like the anti-bubble. And I look at private valuations, it's like a real bubble. I think there's a reckoning somewhere down the road. And a lot of companies are going to have to do layoffs. A lot. It's never fun, it's usually the worst thing in the history of your life, and the temptation is to do, well, just do a little one now and we'll grow into it, and then they do another one in six months, and then another one. I think with everything, including this type of thing, it's just rip the darn Band-Aid off, tell everyone the bad news, they're adults, they can handle it, and get it done. And I think people avoid that. I think that's good advice Ruth Porat is giving. Because you're going to have bad news to deliver, bad shit is going to happen to your company, even though it looks like it's going amazing right now, weird stuff's going to happen. And you're going to have to deal with it. And we had a lot of weird stuff happen at HubSpot. There's a basketball coach named Mike Krzyzewski, he's Duke's basketball coach. All time winningest college basketball coach ever. If you go to a Duke basketball game, you can hear him yelling from the sidelines, "Let's play, let's play." And what's going on there is when a college basketball player is playing in the game and takes a shot and clanks it off the rim and misses it, they have a strong tendency to go play overly aggressively on defense in the back court, and many times compound their error by making a foul or something like that. And what he wants to do is people to make their error, forget about it, and move back down the other side of the court and run the play. And so, actually there were times in HubSpot's history where we had the Mike Krzyzewski's face on a huge slide in front of the company meeting, saying, "Next play," because there was an unforced error, and we need to deal with it and move on.
00:40:54 · Lenny Rachitsky, Brian Halligan
[00:40:54] S1: Is there a story of that that comes to mind that is interesting and worth getting into? [00:40:58] S0: There was a lot of them. But I remember in 2000, it was the last day of March in 2019, and we had a really bad outage all day. And we never really had one of those, and it was bad. Customers were unhappy, a lot of customers canceled. I had a lot of customers yelling at me. And I remember that company meeting, I cried in front of the whole company, they couldn't believe it happened to us. And I remember using the Next Play slide on that one. Yeah, we made a lot of mistakes at HubSpot, a lot of bad things happen to companies, and most of them are self-inflicted. And a lot of them are the old saw-like, companies are far more likely to die of overeating than indigestion. Usually it was when we were trying to do too much. [00:41:54] S1: I haven't heard that version, I've always heard most companies die have suicide versus homicide. Though indigestion- [00:41:59] S0: That's true too, by the way. [00:42:02] S1: Oh man. Okay, so next Halliganism, "Never waste a good crisis." That's something that people hear, I'm curious just what's the lesson here, and then is there an example of this where you learned this lesson?
00:42:02 · Lenny Rachitsky, Brian Halligan
[00:42:02] S1: Oh man. Okay, so next Halliganism, "Never waste a good crisis." That's something that people hear, I'm curious just what's the lesson here, and then is there an example of this where you learned this lesson? [00:42:16] S0: I'll just follow on to, most of the good things that happened in HubSpot came out of a crisis because we would take pretty drastic measures to fix it and make sure we didn't do the same thing again. And so, in this particular case, we really rethought how we deployed software, how we thought about making software in a way that was incredibly healthy. And we haven't had a serious outage since. The quality is much better. And kind of an interesting thing with HubSpot is we started as a marketing software company, and we pivoted, had Salesforce came into our market, we pivoted into CRM. And one thing that... If your marketing software goes down, if your workflow, if there's a bug in the workflows or something like that, it's bad, but you survive it, you wait a little bit. If your CRM goes down, particularly on the last day of the quarter, you're really impacting your customer's ability to do business. So, that was a mindset shift that we hadn't quite come to terms with of how important we were to our customers. And so, we made a lot of changes based on that crisis. Usually very good things came out of crises. [00:43:26] S1: So, there's the lesson there, something's going wrong, is it just like over-correct? Use this as a way to- [00:43:31] S0: Yes. We always over-corrected. Yeah, we almost, we purposely swung the pendulum hard the other way.
00:43:31 · Brian Halligan, Lenny Rachitsky
[00:43:31] S0: Yes. We always over-corrected. Yeah, we almost, we purposely swung the pendulum hard the other way. [00:43:38] S1: Which connects to the first Halliganism of, "If you're eating a shit sandwich, don't nibble." It's almost like go all the way, go even further. [00:43:46] S0: Yes. Make it really obvious to everyone what's going on. [00:43:50] S1: Okay, another Halliganism, "If you want to kill a plant, have two people water it."
00:43:55 · Brian Halligan
[00:43:55] S0: I love this one, it's very true. Let's say, Lenny, you bought a new beautiful plant for your office, and then you went away for a month to Turks and Caicos because your AI agent's doing your podcast, and you asked two of your friends, "Hey, would you mind watering my plant?" And there's one of two outcomes what happens to the plant. The plant would either be over-watered and die, or not watered at all and die. And every CEO in the adults' table has gone through this, and they are religious about the DRI. Everyone talks about DRI in the kids' table, but once it gets to the adults' table, people get deep religion on it. And I think it makes sense. When you're small, and you're in startup mode, everyone's in the room, everyone knows exactly what's going on. So, let's say you're running a pilot project with a big account. You're running that pilot project, everyone's on the same page, the sales person, the service person, developer, everyone's on the same page, and you go out and do it and you execute well. When you get it scale, you've get a sales organization, you've get your [inaudible 00:44:56] deployed engineer organization, you've got your product management organization, you've got some developers working on it. Everyone's kind of separate, no one knows really what's going on in the other departments. And so, let's say you want to really have a good pilot process, you want to rethink it because you're scaling. Everything important happens cross-functionally inside a company at scale, and you need someone powerful to own it. So, let's say it's a sales person, they need the power to tell people in other divisions what to do, even if they don't own it. So, almost every CEO I deal with is like a zealot on the DRI idea, and it doesn't bite you until you get to some sort of scale.