I recently started listening to the first season of Masters of Scale, Reid Hoffman’s show where he interviews founders and CEO’s from a number of different industries, including Brian Chesky (Airbnb), Mark Zuckerberg (Facebook), Eric Schmidt (Google).
Reid builds each episode around a theory, and the well-produced episodes usually feature more than just one guest to build the argument and counter-argument to that theory.
You can also check out the full unedited interviews on the podcast feed, and there is a ton of value in those episodes. I really like the approach of building a shorter edited episode around a theme, while also putting out the raw interviews so you can dive deeper. The full interview with Brian Chesky is especially good.
Here are my notes on the first four episodes:
#1 – Brian Chesky, Airbnb
The Theory: “I’ll make the case that only way an organization can truly scale is to first do things that don’t scale at all.” – Reid Hoffman
You need to do things that don’t scale in order to scale a company.
Key takeaway: Don’t obsess over scaling in the early days. Focus on individual customers and creating a great product for them. Learn from their feedback and incrementally find ways to automate, systemize, and scale. When you run into growing pains return your focus to individual customers.
With Airbnb, Brian and his co-founder actually went to the homes of all their first hosts and learned from them. They got great and detailed feedback from each of their first users and used that to create most of the features you see on Airbnb today.
Another example was once they had scaled they realized that they were in the business of making great trips, but the accommodation was only one small part of that. So they focused on creating a magical, movie-like trip for one person. Once they had a life-changing trip nailed for one person, they started to work on how to scale from there.
Reid and Brian both emphasize how there are two different modes of thinking when you want to build and scale a business. You need to be able to empathize with and design for one customer, but you also need to be able to shift analytically to focus on systems, processes, and automation to make it scale.
A point that comes up in more detail in the unedited version is creating a 7-star experience. Brian talks about how five out of five star trip is good, but it might not be good enough to tell everyone you know about. He wanted to design a product that users love. So he thought out what a 5, 6, 7, 8, 9, 10, and 11-star trip looked like in detail (it ends with you meeting Elon Musk and going to space). Once they knew what a truly life-changing experience would look like for their customer, they could focus on creating seven or eight-star experiences that seemed much more realistic.
This is a useful model to think about with your work. What does a 5 star experience for your customer look like? 6 stars? 7?
How do you apply this as an employee? You do the same thing; focus on helping solve individual problems for individual customers until you are doing it consistently. Then think about you can automate, delegate, or scale your work.
#2 – Minted, Mariam Naficy
The Theory: “I’m going to make the case that, as an entrepreneur, you need to raise more money than you think you need. And potentially a lot more.”
Key Takeaway: When starting a business there will be lots of unexpected costs and unexpected changes in the market. You likely won’t be able to raise money when you are desperate for it, so you should take the opportunity to raise as much as possible when you can.
“You might think your best serving your investors by being as efficient with capital as possible, but that’s actually my true. You reward your investors by creating a successful company and raising only 20 million might mean losing the 20 million of your competitors outspend you” – RH
“Your customers are always a bottomless well of surprises”- RH
Miriam made $15M from her first company and went through a lot of ups and downs after initially raising much more money than she expected too. This first experience made her conservative when she was started her second company.
When she started Minted she intentionally didn’t raise as much money initially, but soon realized that to create the product she wanted to create and get it quickly to market she would need a big war chest.
Brian Chesky offers the counterpoint in this episode and has good reasoning for why you may not want to raise as much money as you can as an entrepreneur– maintaining control, forcing creativity, and maintaining a scrappy culture.
How do you apply this if you’re an employee? Depending on your role, you may not be dealing with budgets and financial costs, but no matter what you do, you have time costs. When taking on a project, always expect unexpected time costs. Under promise, over deliver.
#3 – Beauty of A Bad Idea with Tristan Walker
The Theory: “I have a theory that the best business ideas often seem laughable at first glance.” – RH
Why people thinking your idea sucks might be a good sign.
Key Takeaway: Listen intently to the no’s that you get from your ideas. They may be telling you that you are on the right track to a big breakthrough.
This episode features a number of different entrepreneurs and stories that center around the value of rejection and people not getting your idea.
At the center of the episode is Tristan Walker, and the story of building Walker and Co. around the bevel razor— a razor that works better for curly hair.
If you’re tuned it at all to Startup culture, you’ve heard countless times about how you need to go through no’s to get to yes. But RH argues that no is not just a necessary step on the path. Hearing no from investors and others is crucial to knowing that you are on the right path with your idea.
If everyone loves what you are doing, there are likely people working on it already, or right on your heels. It is the no’s from smart people that show you that you are on the right track. That you are far enough ahead of the curve in your business that you have space and time to grow to dominate the market.
How do you apply this as an employee? Don’t expect everyone to understand the things you propose. Expect resistance and revel in it. It means that your idea is novel, but the challenge of communicating your idea makes it much more likely to succeed because possible problems are addressed in advance. It also makes you a better communicator because you have to fight to get your idea through.
# 4 – Mark Zuckerberg, Imperfect is Perfect
The Theory: “If you’re not embarrassed by your first product release, you’ve released it to late.” – RH
Key Takeaway: As an entrepreneur, you need to put out an imperfect product. Only from getting feedback and learning will you be able to consistently create value for your customers.
Facebook’s motto for a long-time was “move fast and break things.” This eventually took on some nuance, as they always want to maintain infrastructure, because in the long run, if you break important things it will slow you down.
But the reason that was the core philosophy was because of the belief that the way to create a great product is a tight feedback loop. Moving fast, getting feedback, and improving quickly is how you develop a product or service that people love.
The problem is that moving fast and testing things doesn’t always feel good, especially if you have perfectionist tendencies. But to succeed as an entrepreneur, you should be in a state of regularly “embarrassing” yourself–putting out imperfect products and learning from them.
This is a bit harder to think about when you are working on a tech product, so they feature Hint Water and how they sold their initial product, even before they had found the right ingredients to extend shelf life beyond two weeks.
Reid does offer the counterpoint of Steve Jobs, but just says that there aren’t many Steve Jobs’ in the work. That’s obviously not a very strong argument, but I think there is something different about hardware, and it probably underestimates how imperfect the iPhone was when it is launched. For a piece of complex hardware, the twice per year releases of iPhones are actually very fast iterations. Steve had a strong drive for great product, but he was also ruthless about meeting aggressive deadlines.
How can you apply this as an employee? Never settle for the just doing your job. Always be experimenting with new projects, new methods for doing your work. There is a strong incentive to impress your boss when you aren’t running your own company. This can make people risk-averse and afraid to put out imperfect products. As a result, this lesson is even more important. You may need to go against your nature to share your imperfect projects, but the feedback you get from letting people see an imperfect version of your work is incredibly valuable.