00:10:40 · Sadi Khan
There are very, very few new ideas that are actually better than all the old ideas before. And so in order to assess that, in order to deeply grok whether or not your idea is better, it is often very useful to understand what were the ideas, at least the big ones, that have been explored and built before. Why is your new idea better than what has already been built before? And in order to do that, you must often invest the time to understand and learn very deeply about this industry and this domain and all the smart people that have come before you, so that you can come up with good new ideas and assess that they are indeed better than what has been built before. In the first two or three years of building Aven, we made a series of product decisions, and a series of people decisions, and a series of process decisions. I think in the product, we would have been even more ruthless in prioritizing the feature set that we were building for in the first version. And I think this is, you know, generally true for for most PMs when they launch a new product. They... If you were to look back and ask any product manager what products they've launched before and what they would do differently, almost all of them would tell you, I would have cut these, you know, five out of the 10 features and shipped a smaller, narrower version of this product to a fewer set of people and really deeply gone into a kind of a more focused product feature set. And so I think that also applies to Aven, and I think it applies to the product that we built. I would have kinda made it narrower and simpler in the first version. The other big thing is in the early days, there were these really funny stories of consumers going through our origination process, not sure that this was real. And we would get tickets and calls to say, we don't know if you guys are a scam or not. And we'd have to respond, including sometimes myself, saying, no, we're we're very real. We're a real company, and we're here to help you get access to your home equity, and we have a real product that you can use. And sometimes it was that ability to talk to somebody at the company, and they were to hear from somebody's voice at the company that gave them the confidence to continue and go through our application process.
00:13:00 · Sadi Khan
I do think one of the interesting things that happened with with Aven is that we were able to find people who were kind of on the on the on the border of potentially considering a home equity line of credit. And many folks were actually sometimes in the process of applying for a home equity line of credit to other lenders. And then they would see an ad from us and go, I wonder if this is true. Can I get a home equity line of credit in as fast as fifteen minutes? And they would almost test us out as like a... Almost like an experiment to see if this is, like, real. And when they went through the process, they would be kind of amazed and shocked. And then they would actually book an account with us instead of whoever they had started off a home equity line of credit application with before us. And so that was, I think, an interesting kind of lesson learned. You know, many people in the beginning didn't believe that this was possible to do. My ideal form of leadership is one that maximally rational. I observed and and learned a lot of that from Mark at Facebook. The reason this is important is because being extremely rational is a very predictive behavior. And being predictable as a leader is very, very important because people can then replicate or predict what you would do even when you're not there. That is important for people to be able to reproduce your decision making system, even when you're not present. And my goal as a leader is to make decisions that are so rational that if everyone else also had the same information that I had, they too would all make actually the same decision. And the two incremental things that I provide as a leader that, let's say an individual contributor in the company don't necessarily have, is that I have significantly more context and a lot more information sometimes than others. And my job is to actually make sure as many people have that context as possible. And two, I have the privilege of being able to optimize for a much longer time horizon than anyone else in the company. So these two things are the incremental value propositions that I bring to a decision that is not always possible for every single other individual contributor to always bring. But if they were to actually have those two things in their mind, they should be able to compute to the same conclusion that I come to. And that is my goal as a leader.
00:15:27 · Sadi Khan
If I were to just make decisions because I emotionally felt like this was a good decision or not, The problem with that, even if I'm occasionally right, they're very difficult to scale. Because if I I can tell somebody that decision that I felt we should do x, and sure, because of my authority, some people will do x. But when that person needs to explain it to two more people, it is very difficult for that person to explain it to two more people, other than just saying, well, Sadi feels that way. Instead of explaining, here's the logic of why we made this decision, and that logic is a very scalable form of decisioning that then you can, like, actually send to a lot more people to execute effectively. And this is really important because a lot of what, you know, an early stage shop or, frankly, any company does is try to perfect its execution. And the only way to perfect execution is to have extreme clarity. And to have extreme clarity in what we are trying to do, you must often have extreme clarity on why we are doing it in the first place. And I think that clarity must stem all the way from the CEO and the founder to the individual contributor who's working on the smallest and the minutest of diffs that need to go out the door. I think it stems from a philosophy of trying to be maximally rational. The reason for this is quite simple. If we were to achieve our mission of reducing the cost of capital for as many consumers as possible, the first, most imperative item we must achieve is we must first not die. If we are dead, then we aren't helping too many people reduce that cost of capital. In order to not die, we must make sure we generate profit and ROI, to a certain extent, a good business. Then we derive, well, how many people can we save how much money for? And that becomes like the maximal optimization function in a sustainable way. And therefore, I think having a very disciplined approach to the profitability of the business, while at the same time maximizing our mission is actually quite rational for us to pursue. The most important goal for, I think, everyone and any company and any person is to create a lot of value in the world. And profitability comes from capturing some amount of that value that you create for the company and doing it efficiently.
00:17:48 · Sadi Khan
So if you kinda think about, like, today, there's $1,000,000,000,000 of credit card debt in The United States. Consumers today are paying almost $200,000,000,000 a year on just interest payments. Not the principal, just the interest payments on it. If we can reduce that by 50%, then we will have saved US consumers a $100,000,000,000 every single year. Our profit should come from savings that we bring to the consumer, because that's the value we've created. And our goal is to be profitable by saving people money. And I think that achieves our mission and is very rational and mission aligned to what we are trying to achieve in the world. One of my somewhat controversial opinions around decision making is that I really hate pros and cons lists. They're like maybe one level below useless. Useless. I think a much more effective framework to make a decision is to first of all lay out what are the axes of this decision that are most to least important to this decision that you're going to make. And then to list out each of the options and to lay out where this option kind of sits relative to that particular axis. So for example, let's say you need to make a decision on what car you want to buy. And, you know, the axis that matter are things like price, things like performance of the car, let's say reliability of the car, and let's say style of the car. Much more effective than trying to build a pros and cons list between, like, let's say a Toyota Camry or a Honda Civic, is to list out what is your priority of each of these axes. Is it speedperformance? Is it style? Is it cost? Is it reliability? And once you prioritize this set of axes, then you can look at your option space and see which one fulfills the highest order priorities for your decision making. I'm such a big believer in this. We actually teach this process in our bootcamp at Aven. I tell people in boot camp that this is a process that I've used to make almost all my decisions in my life. And I would argue this was also a process that I implemented when I was looking to get married very early on in my life. This is a very important framework to help people make decisions, not just in their professional life, but I still think in their personal life.
00:20:06 · Sadi Khan
And I think the simple focus away from the options and more into the prioritized list of axes that matter is much more functionally beneficial to the quality of a decision making. I will add that I wear the same clothes every day, the long sleeve black t shirt, the blue jeans, and the vest. I am a very big believer in simplifying as much of my life as possible. I have a very boring personal life. I live five to six minutes away from the office. I moved my home to be near the office. I don't drink. I don't party. I don't really go out that much. I enjoy spending time with my family. I like to cook twice a week. I have a very kind of regular routine with my family on the specific nights of the week that I cook for my family. I go to the gym and I work because I have a very simplistic life. Another thing that I, for example, like to optimize is my computer keyboard, mouse, and chair layout. And so I have three workstations, one at the office, two in home, and all of them have the exact same mouse, exact same keyboard, and exact same monitor layout so that I can very optimally get to my workstation and begin working instead of setting up or adjusting, you know, my keyboard or my mouse. I mean, you probably know this already. If the keyboard is off by even a millimeter, your typing error increases massively because you have to adjust. One of the reasons our company is located in South Bay and not in, like, a major city like San Francisco or San Jose is that we want to provide our employees some calmness, some serenity so that we can focus on the mission at hand and not be distracted by the hustle and bustle of of around us. And I like to have, like, very boring life. You know, I I think I told somebody this is if I were to know everything that will happen to me between today and my death, I'll be very happy. I have no need for surprises or excitement. I love boring. Boring is great. If my life could be just boring, I'd be very happy.