On the latest episode of Recode Decode, hosted by Kara Swisher, startup adviser and Color Genomics co-founder Elad Gil talks about his new book, “High Growth Handbook: Scaling Startups from 10 to 10,000 People.” He also explores some common startup myths, shares some tips for building better boards and discusses his biggest worry right now: The end of optimism in tech.

“George Soros has this great notion of a reflexive asset: The more people believe in something, the more likely it is to create value,” Gil said. “I think fundamentally, optimism is one of those things where the more people believe that you can do great positive things to the world through technology, the more people will and the bigger you’ll think.”

“One founder that I invested in emailed me a few weeks ago basically saying that he was at a dinner party and everybody started making fun of them because he said he wanted to change the world through his company, which I think is great,” he added. “There should be people who want to do good things to people through their companies. My feedback to him was, ‘Find better friends. You shouldn’t hang out with these people.’”

You can listen to Recode Decode on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts. Here’s an index of some of the big topics that came up:

• 00:03:30 – Why Gil stepped down as CEO of Color
• 00:06:00 – Why he wrote “High Growth Handbook”
• 00:09:52 – Is there too much reinvention in tech businesses?
• 00:11:25 – Startup myths and Rachleff’s Law
• 00:17:20 – Contrarians are usually wrong!
• 00:23:00 – How to build a board and evolve it as your company grows
• 00:29:14 – The “old-timer” problem
• 00:32:14 – The Sheryl Sandberg effect and when CEOs should step aside
• 00:37:10 – Is innovation dying in Silicon Valley?
• 00:41:05 – Are startups threatened more by the Big 5 or their own founders?
• 00:43:59 – The dangers of Silicon Valley losing its optimism
• 00:52:05 – San Francisco’s bad governance

Below, we’ve shared a lightly edited transcript of Kara’s full conversation with Elad.

Kara Swisher: Today in the red chair is Elad Gil, the co-founder of Color Genomics and longtime startup adviser. I’ve talked to him before about Color Genomics and other things, but now he’s the author of a new book called “High Growth Handbook: Scaling Startups from 10 to 10,000 People.” Elad, welcome to Recode Decode.

Elad Gil: Thanks so much for having me.

Let’s go through your background first before we start, because I want people to get a sense of who you are. You’re not just some person pontificating on startups, of which there are many. Let’s go into what you do and how you got to where you are.

Sure. Yeah. I mean, if we want to start at the very beginning, I have sort of a weird background.

Go right ahead. Birth is not accepted, but go …

Yeah. I was born in Jerusalem, so …

Next year in … Go ahead.

I got my PhD in biology from MIT. I have a background in math and biology. I moved out here right as the entire internet was collapsing, so I had terrible market timing in terms of moving out here.

Which collapse? The 2002 one?

The 2002 one, yeah.

Okay.

I not only chose the wrong time to come here, I also chose the wrong market. I went and worked at a telecom equipment company.

Oh, nice.

They went through multiple rounds of layoffs. I eventually left that. A year or two later, I joined Google, and I helped start the mobile team there, helped buy Android, was involved with a lot of early things there.

Yeah, that got big, I hear.

I hear so. I don’t know if you use it or not, but …

No, I don’t, actually! I use Apple, but go ahead.

Well, there goes that whole conversation.

I tried. I tried. I’ve tried. It was designed by the Google people. That’s all I can say about it.

Yeah, not great UI, but great platform.

Yeah, exactly. Yeah.

I left then to start a company that Twitter bought. Twitter bought my company, which is an early data infrastructure company, when Twitter was about 90 people. I stuck around for …

Explain the company that they bought. It was an important company.

Yeah. It was one of the early developer infrastructure companies, and it allowed any developer to build a geolocation-enabled application. Just like Twilio allows you to add telephony or Stripe allows you to add payment, we allowed you to add other features. Twitter bought us back when they had this thriving developer ecosystem that they were going to really develop.

Remember that?

Obviously, that changed.

Yeah. They had those big parties and events for them.

Yeah, it was great.

Yeah.

Yeah. It was great. Yeah. While it lasted, it was really good. My role at Twitter was really to help scale the company from 90 people to 1,500 people over two and a half years, so I was involved with a lot of operationally intensive things there: User growth, analytics, scaling recruiting. The M&A team worked for me.

Who was the CEO at this time? I don’t mean to be that rude, but there was …

Sure. Yeah. When we were acquired, it was Ev, and then as I morphed into broader and broader roles, it was Dick.

Okay. Costolo.

Dick Costolo. Then I left Twitter to start this company called Genomics. Along the way, though, I’d been investing in startups, and I’ve been involved with a number of companies that have really broken out since. I invested in Airbnb, Coinbase, Instacart, Gusto, Wish, Stripe, Square …

We’re going to talk about why you picked them. I want to get into that later. So you were doing investing on the side and then did Color Genomics, and that was a real shift. It goes back to your roots, obviously, your original roots. Explain Color Genomics. I think it was a real … There was a bunch of people like you that shifted into medical stuff, which was interesting.

Sure. Yeah. I think the origin of Color was really based on two things. One is my co-founder’s story, who is now the CEO, Othman Laraki. He’s very public with the fact that he himself is a BRCA2 carrier. His mother has had breast cancer.

This is a carrier for breast cancer.

Exactly.

BRCA.

He himself has cancer risk in his family, and it was really hard to get information or test results or be able to even take tests for different types of genetic disorders, and so the idea of the company was to ask how can you build a platform where you marry software to genomics to allow people to really understand what they’re at risk for.

Which seems an easy idea, but has been hard for Silicon Valley.

I think, in general, health care is a very hard industry for a number of reasons.

Google was in it, if you remember.

Yeah. They were in and out of it.

And Microsoft.

In and out of it.

… evolved or whatever. I don’t even remember at this point. There were lots of different startups in the area, but this was one of the first around cancer, especially breast cancer.

Yeah, exactly.

Why did you decide to do that?

I think part of it was just the sheer human impact of it. Ultimately, you hit a point in your career where you want to do things that really empower people in ways that, in this case, were literally life-saving. That impact has ended up hitting much closer to home in a lot of ways than we expected.

For example, one of our investors, his fiancee at the time took our test. It turned out she was a BRCA carrier, as well. Her mother got tested. It turns out that her mother was a carrier, and so her mother elected to have an oophorectomy and they found that she had stage three cancer at the time. Now every time that I see them — they’re now married, they have kids — every time I see them, they say thank you for saving our mother or mother-in-law. It’s been very powerful from that perspective.

Yeah, you don’t get that at Twitter. “Thank you for that tweet.”

I think Twitter has had its own large impact, but …

We’ll get into that later.

Yeah.

You did this, and then?

I stepped down as CEO about two years ago. My co-founder took over.

Why did you do that?

It was for three reasons. No. 1 is I had been operating for a long time, and at some point you just don’t want to do yet another sales comp review. The set of things I was doing …

That’s a nice way of putting it. Thank you for telling the truth.

Yeah. The set of things that I was doing, they were still interesting, but it wasn’t as novel as the first time I did it. Second, we’d hit a scale of about 100 people or so, and people were ping-ponging between me and Othman for decisions, and we thought it’d be best just to have one person that you can clearly go to. Then, lastly, I think Othman, on his side, really wanted to be CEO. He was ready for it. He’d been ready for a decade to be CEO of a company, and so it was the right time to make a transition.

What do you do for them now?

I’m a board member now. I help out where I can, both on the board level … I’ve been helping out with a couple large partnerships or deals, but it’s really morphed more and more into a board role versus anything else.

You’ve jumped to different companies, different areas, a lot of similar stuff that you were doing, and so you decided to write this book. Explain what was the thinking behind it.

Yeah. The book happened a little bit organically. I sat down over Christmas break about two years ago, and I just only wrote for a week because, just like with early-stage companies, there’s a same set of questions over and over again. For late-stage founders, I kept getting the same questions. I said, “Well, I’ll just write this guide, and maybe I’ll just post it as a website in terms of how do you really navigate high growth and how do you deal with internationalization or M&A or raising late-stage funding rounds?”

I put this thing all together, I was about to launch it as a website, and I was talking to John Collison, one of the founders of Stripe, and I mentioned I’d done this thing. He asked to see it, he circulated it to a bunch of his friends, and he wrote back to me a day or two later and said, “Hey, can we actually publish this at Stripe?” Stripe now is …

They’re big in publishing. They publish a lot, Stripe, with developers.

They publish a lot of stuff. They have their quarterly and Atlas Guides and other things. That’s sort of what led to the genesis of the book.

All right. You sat down. Why did you feel like you had to? Just because you were like, “Hey, I had these problems, and I just encounter them a lot with the people” idea?

Yeah, it’s the same questions over and over, and so I thought, well, maybe I could just direct somebody to a website instead of having to spend an hour talking through the same issue, although I’m always happy to talk through it.

All right. Talk about what you were thinking then, doing the book. You just decided to put it together as a book.

Yeah. Once Stripe offered to publish it, I said, “Great. Let’s go for it.”

Right, because a lot of people do these things on Medium. You get your like 10 things from those Y Combinator people. They seem to have one every five minutes. You know what I mean?

Yeah.

They’re all similar. I don’t find many of them that illuminating, but …

Yeah, I was going to do only a top 10 list, so I thought … but then I pivoted away from that. The book is basically an intermix of sort of my own direct experiences and it’s very tactical, and then interviews with some of the leading lights of Silicon Valley who’ve operated at scale, like Reid Hoffman or Shannon Stubo or other folks like that.

Shannon’s the best. I’m glad you talked to Shannon.

Yeah, she’s great. Yeah, she’s very good. We talked about how do you evolve a marketing communications organization, for example.

Right, for that one.

I avoided the sort of canned A-players, the higher A-players, because that’s really non-useful advice.

Yeah, I know.

What do you actually do with that?

Where do you find them?

Do you kind of look for “A-player” on the resume or something?

Yeah, right. “Are you an A-player?” How do you decide? Yeah, I know. There’s a lot of sort of short, pithy things that I find meaningless.

That are meaningless, right.

Yeah, exactly. So tactical.

Right. Exactly. So the purpose of the book was what’s that hardcore tactical advice that allows you to really hire an executive team and buy other companies and raise money and all the rest of it?

All right. Let’s go through that. Let’s start to talk about that and then next section we’ll talk about that also. Then I’d love to know where you think startups are going. Did you come up with key things, key metrics or key kind of things or did you just go section by section? So, here’s the PR part, here’s the marketing.

It’s literally section by section. There is a section, for example, on product management, what’s a good product management or what people you hire.

Let’s talk about that since your involvement.

Fundamentally, it breaks down things like what are the different types of product managers. So, do you hire somebody differently if they’re focused on a back-end product versus front-end or if they’re more business-centric versus not. So, if you have a SaaS company you may end up hiring different people than if you have a consumer internet company. There’s a lot of differences in the role and there’s a set of best practices in terms of how do you actually run a product management organization? How do you think about product road mapping? How do you have a natural tension with engineering and design and other areas, because we’re always going to have tension there, which is good and healthy.

It sort of goes through those different areas and basically fleshes out. For example, for product management, what are key things you should be doing, how should you be thinking about hiring for it and how do you think about that sort of processes.

When you’re doing this the idea is that you … One of the things that startups think of, I want to get to this first, is that they think they’re all special. They think they’re different than everyone else and they are quite the same. It’s the same person I see across from me a lot of the time. Individually, there’s individual differences, but talk about that idea, that people … they have this sort of mythology, Silicon Valley as being this special sparkly place that isn’t just … A lot of it is block and tackle. I think that a lot lately in our own businesses. Some of it’s just basic block and tackling that is …

Yeah. I think basically I have two opposing views on it. One is that the only good generic startup advice is that there’s no good generic startup advice. Everything should be taken in context. But the flip of it is to your point, there’s lots of things that just work and there’s no point in trying to reinvent those things and people who try to reinvent things tend to fail.

There’s a way to do sales that works really well for enterprises and if you start hiring a bunch of PhDs in computer science to do your sales, it’s probably not going to work well. So, I do think people try to reinvent things too much. Any time you see, for example, a company adopting Holacracy, it’s like, run for the exits.

Oh yeah. We’ve written about that.

Because ultimately there are some ideas that are just fundamentally bad because people haven’t changed in thousands of years in terms of their fundamental drivers. And people want clarity of organization. They want a central purpose. They want all these things that if you don’t provide them with it then you’ll end up with a more chaotic environment. And I think founders are almost like feral animals. They’re like raising …

Oh, explain that. You can’t get away with saying that.

I think many founders, including myself, tend to be, I think, much more okay with chaotic environments. They may not like hierarchy as much. They may not like a lot of things that drive them to be founders, but then they assume that everybody else that they hire is the same way.

Right. That’s a very good point. That’s actually an excellent point.

In reality, people are very different. Most people, they are going to hire employees for a reason and they want stability and they want common purpose and they want focus and they want to know who their manager is and they want to have a career ladder and career path. So, I do think that that’s one of the big mistakes that founders often make, is they impose their own, or project their own views onto others.

Well, that happens a lot. Correct? I mean, when you think about sort of … Before we get into actually the specifics, because I would love to get a general idea, what do you think some of the myths of the Silicon Valley entrepreneur are that aren’t so?

I think there’s a number of them.

That one is a very … Because they do impose their … It’s really … Just because they’re egomaniacs much of the time. Not you. But everybody else.

You say that and look away. You’re like, “Not you. But everybody else.”

When you leave I’ll say egomaniac too.

I’ll give you an example myth because very …

Go ahead.

One example myth would be that you need co-founders. If you look at the most successful companies in technology, at least by market cap, it’s either ones where there was a strong single founder or there was a dominant founder who really just made the decisions. Apple would be an example of that. LinkedIn, it was mainly Reid Hoffman. Facebook, it was largely Zuck.

They do have partners. They have secondary partners, like Gates and Ballmer. That was critical.

Yeah. They have secondary partners, but Ballmer came in when they were 20 people or something. I think it’s more about constantly finding people in the organization who are going to be that central partner, to your point. But I think that’s different from meeting a co-founder at day one.

Right. Right. It’s the Larry and Sergey disease, I think. The evil twin disease.

Exactly. Yeah. I think they pulled it off. I think Stripe’s pulled it off. There’s a couple companies that have.

But there was a dominant partner there too, which is Larry.

Yeah. Yeah. Absolutely. I do think that people over-index on, was there a co-founder or not? I think in general sometimes it’s better not to have a co-founder because you can make decisions cleanly, you don’t have to argue about everything. There’s a lot of things that it actually cleans up.

Yeah. And that’s why I had to kill Walt Mossberg, to make sure …

Are you serious? That’s where he went? I was wondering if he was behind those cartons on the floor over here …

It worked out for me. It worked out for me, but it is. It’s a struggle. We ended up agreeing a ton. So, it worked out well and we had different points of view, but it’s an interesting thing to think about. So, that’s one. So, not a co-founder. What else?

Yeah. Let’s see. I think the other big myth is the extent that people focus actually on the founding team and the founders versus on the market. I think Andy Rachleff from Benchmark has this great sort of “Rachleff’s Law,” which is …

Oh, he has a law?

Yeah.

I didn’t know Andy had a law.

You haven’t heard the law? Oh my God.

No, please.

Racleff’s Law is: “Great team, terrible market = market wins.”

Okay. Great team. Terrible market.

Market wins.

Market wins. Yes, absolutely.

“Terrible team, great market = market wins.” And “Great team, great market = something magical happens.”

Right. Okay. Yes.

And I think the middle one is the most interesting one, which is if you have product market fit and …

Right. You’re right.

And right your product is just working. It kinda doesn’t matter that much initially how bad the team is. It matters later. It’s the difference between a $10 billion market cap and a $100 billion market cap. But fundamentally, if you have something good enough, unless you have a very strong competitive environment …

Early Microsoft.

Like Microsoft, then you’re gonna succeed. I think the other sort of contrarian thing that I’ve learnt recently is …

Okay, that’s a good law, Andy. I was going to make fun of him now, but that’s a good law. I like his law.

Yeah. I know. It’s actually a pretty good one. The thing that I learnt recently, which I was surprised by, is when you do reference checks on founders, for example, if you’re looking to invest, a good reference check is definitely a positive signal, but a negative reference check is a neutral signal.

Okay. Explain that.

I’ll give you an example. When I worked at Twitter there was somebody who was always just hanging out in the hallways, really sharp person, but never seemed really effectual, didn’t really get anything done. I really thought this wasn’t like the greatest person in the world, and that person now has one of the most successful companies out of Twitter. If somebody had called me and asked, “What do you think of this person?” I would say, “Oh, this person’s not very good. I would never back them.”

And I’ve seen that with other companies as well, that have now become actually quite large companies where people pass because they did a reference check and the person wasn’t great. I took him to dinner a couple of weeks ago and said, “Hey, what happened? How did you become so good all of a sudden?”

Right. “Because you sucked.”

I didn’t say he sucked. I said very politely, “At Twitter you seemed kind of … “

Out of it.

And he said, “I finally feel like my ass is on the line.” It was contextual, but it wasn’t contextual that people always talk about, where founders will fight where their manager and their strong personalities. That was more of the guy was just kind of “eh.” And he went on to do great things because he got really motivated and I thought that was really interesting.

So negative ones are a neutral signal. Not always, though.

I think that if it’s ethics or other things, it’s usually negative, but if it’s … sometimes it doesn’t matter.

Although interestingly, I think about that because I was given mostly positive references on someone a long time ago I hired and it was one sort of offhand one, I ran into someone who had worked with them and they said something. And the problem that person later had was exactly what the offhand person said, not what the positive people … Offhand, it was a lower-level person and it wasn’t meant to be mean and I wasn’t seeking that thing and it was exactly what the problem was.

I think referencing checks are crucial.

It stuck with me, I remember.

Yeah. Yeah. Yeah. And I would, for employees I think it’s a very clear signal. I’m just saying for founders, it isn’t necessarily a negative signal.

So you don’t know who’s going to shine.

You just have no idea. And part of that is that middle tier of Rachleff’s Law. But part of it is also the motivations shift strongly enough that sometimes somebody shifts as well.

That something has it. All right. One more and then we’re going to talk about specific things in the next section.

Yeah.

Specifically Silicon Valley.

Like a Silicon Valley myth?

Yeah. I can come up with some.

Yeah. I’d love to hear yours.

I think the “founder is God” myth. I think you’re right about their not needing to be partners. But I remember one thing Steve Jobs once said to me. He was talking about the company and he said … He didn’t … This was offhand and he said it backstage and he’s like, “Everyone always thinks I do everything.” He had his healthy ego, more than healthy ego. But he’s like, he thinks everybody … because “everybody there is an oompa loompa at Apple and actually it’s a stronger team and they don’t notice it.” And he hated that. As much as he liked the attention, I think he also understood that he had a strong team behind him.

I think that’s fair. Startups are really team efforts. One of the advice I often give founders who are just scaling is … You actually don’t need to do all the stuff that you think you need to do. You need to find people who can and then empower them and then you have like a team going after it. Honestly, one of the bigger Silicon Valley myths, just to add a final one, is the degree to which contrarianism tends to be correct.

Exactly.

Contrarianism usually is wrong, and that’s why it’s contrarianism. And people who are often contrarian are actually often wrong as well. It’s just sometimes they really hit it.

It’s called “frequently wrong, but never in doubt.”

Yeah. Exactly. I actually thought it would to be really cool to construct a 2×2 matrix of people who are contrarian versus people who use 2×2 matrices. In your upper right hand, who’s both contrarian and makes matrices is Peter Thiel and his book. There’s people who are contrarian, but don’t make matrices like Keith Rabois. And then you have people who make 2×2 matrices, but aren’t contrarians, like McKinsey consultants.

Okay. Explain 2×2 matrices.

Oh, I’m sorry. A 2×2 matrix … I hope we can skip this topic. A 2×2 matrix is basically … You have two axes, a Y axis and …

It’s a box.

It’s a box and you have four boxes and you say, “Okay, let’s divide things up into two characteristics and ask who has both characteristics, who has one or the other characteristic and who has none.” For contrarianism you can construct your own matrix and it’s sort of driven by Peter Thiel’s book.

Right. So, either there’s one in New York magazine that’s despicable and lowbrow and highbrow. That’s great. Okay, despicable, not despicable, loadable and stuff. Go ahead. Finish with that. So, contrarianism, which is very much celebrated in Silicon Valley.

Yeah. I think contrarianism is very celebrated and rightly so because I think if you’re constantly falling into the status quo, you’re never going to do anything great. So you do have to question things, you do have to look at fundamentals, but most people who are contrarian, and consistently contrarian, are actually wrong and you meet them sometimes and you can’t help but eye-roll because you’re like, “Ugh, another …”

“I’m a contrarian!” I know. I get that all the time.

“I’m just saying the opposite of everything that everybody else is saying.”

I just wrote a column for the New York Times about Twitter and someone’s like, “Well, they just have always had a contrarian viewpoint.” I said, “And yet they can be wrong.”

Yeah. They’ve been wrong the whole time.

Being contrarian is not enough in it. “They have contrarian values.” I’m like, “They don’t have any values. They’re just being contrarian.” I don’t get it. That’s what a 3-year-old does.

You have to be contrarian and right.

Or have something behind it, but it tends to be celebrated. Because there is a thing of … Like, when we started this podcast nobody thought we should do it and we just did it. I liked it, but it wasn’t contrarian. It was I just liked it. It was an interesting thing.

Talk a little bit about the specifics [in the book]. So, you go through product marketing. What else?

Yeah. Sure. There’s sections on the role of the CEO. So, what you actually should be doing as CEO, what you should be focusing on. There’s managing your board. So how do you deal with board members who aren’t acting correctly, can you remove them, can you not, how do you think about constructing a board to begin with. I should say for each of these sections interwoven there’s specific interviews on those topics. For example, on the board section there’s an interview …

Let’s go to the board section.

… with Reid Hoffman around how does he think about board members and how to manage the board effectively. So, that’d be another example.

Talk about that. Because I was just debating someone with this issue, the boards. There was an idea that you should put workers on the boards, on every board, and should it be legislated or not. I think it is a great idea. I think it’s always a great idea to get workers on the board, and legislate it if you have to. Because usually they pack these things with their friends and idiots. It never tends to be a very good board. And Silicon Valley boards, I’ve written about quite a lot, are quite weak, as far as I can tell. Some of them are. They don’t think they are, but they often pack them with VCs. It’s typically white guys. They grudgingly put a woman on, even though they’re their cust … You know what I mean. Anyway, talk about sort of how boards are comprised.

Yeah. I think really the way to think about your board is to evolve it. So, to your point, what maybe right really early, which is the founders and a couple of VCs, may be a terrible board later as a company scales.

It’s not really right. It just is. I don’t ever think it was right in the first place.

It depends on what you’re looking for from a board. I think in general venture capital is a bundled product. So, it’s a bundle of advice …

Okay. Allegedly.

… money and governance.

I think it’s just money.

No, I was about to say, in many cases … Nobody’s great at all those three things, or very few people are. My argument is actually it shouldn’t be a bundled product. It should be unbundled and you should have great people on the board who are amazing …

That’s really smart.

… at advice and governance and you can get capital separately and to some extent, you could argue the cryptocurrency world is doing that very badly. They’ve sort of taken that to the opposite extreme in terms of not really thinking through some of these structures, but fundamentally, you have this bundled product and it’s an accident of history, because some of the people who are giving money back then actually were helpful or did have advice, and that’s shifted dramatically.

That said, when you start thinking through who you want on your board as an early-stage company, you do want to look for people who are able to help with those other elements and not just give you money. And there’s only a handful of people who are really good at that in Silicon Valley. Most investors are not great at that. As your company starts to scale, the set of issues changes pretty dramatically.

You go from an early-stage company where there’s really honestly only three things you have to do as an early-stage company. These are hard things, but don’t run out of money, find product market fit and don’t fight with your co-founder. If you do those three things you’ll succeed. And that’s it. That’s all an early-stage company has to do.

All right then.

It’s really hard.

They break them all the time.

It’s really hard. A late-stage company is way more complicated. You have new functions to run that you’ve never actually been involved with. You’re internationalizing. You’re buying companies. You’re launching new product lines that you didn’t have before.

Right. The scaling of employees.

You’re scaling sales and other things. So you have all these different things going on and the board should sort of evolve with that because suddenly you’re gonna need people who can help you with some of those things or who understand the market and the regulation or understand other aspects. And to your point there’s also the key aspect of board diversity, of also finding people who then reflect your user base or the employee base that you want.

I’m not just saying that. I’m not trying to be reductive. It’s just a really interesting thing when they all evolve in exactly the same way and it’s not the right way, necessarily. I think a lot of their problems always evolved from the lack of viewpoints, that they didn’t think of it because they can’t pick their head up off the table and look around and see people just like them. You’re not going to get the correct viewpoint.

Yeah. I think that’s starting to evolve a bit, but it’s going to take time.

Why doesn’t it evolve? What do you …

I think there’s a couple of hard problems. They’re not hard, but there’s problems. One is just often boards are sort of network-driven. And I have a section in the book actually about “avoid the VC crony.”

Right. No cronies.

Don’t find the person that’s always doing things with the VC, who gets added to your board and they’re basically like a proxy. Really what you should be doing is looking really broadly and asking what are we really looking for. And the way I think of a board member — and I think Reid Hoffman actually made this point in the book as well — is it’s somebody that you’d love to work with or even co-found a company with, but you can’t hire. So, that should be the type of person that you’re looking for as a board member.

And that may have different characteristics in terms of the market you’re in or how you’re thinking about the future evolution of what you’re doing. For example, Coinbase added Katie Haun to the board in part because of her regulatory expertise and background. I think that was a good example where they said, “Okay, who can help us with something that’s really important for the industry that we’re in and who are the best people for that? Let’s add them on.”

But it doesn’t happen because the founders don’t have guts or they’re just not thinking of that as a useful function for them?

Well, I think early on they just don’t have a better idea or they don’t know. I mean, you’re learning so much. Say that you’re a 23-year-old engineer and you’ve never been exposed to any of these things. You’ve never been exposed to boards or governance or companies at any real scale. This is all new and you’re learning 30 different things simultaneously while you’re also trying to keep a product going and a company up and you’re learning management for the first time and you’re learning new functions for the first time. It’s actually really hard. And the first time people go through it, it’s just this chaotic roller coaster and it’s very emotional and awful. The second time people go through it, it tends to get better, but the first time is always awful.

Right. Right. So it’s lack of knowledge.

Yeah. It’s total lack of knowledge.

When you see it’s going too slow and I don’t want to get onto another job, why does it go … I really want to get at the heart of why it goes slow. Because it’s a really interesting thing, because it should be … I think what happens, and now it feels “eat your vegetables” or homework or something like that, when it really isn’t. It’s actually better.

And years ago, I often tell this story, is when Twitter had 10 white men on the board and Dick and I would argue about it and he was like, “Well, it just happened that way.” And I was like, “How could it? Don’t you want to know how it happened? Aren’t you thinking hard about how that could?”

I think every late-stage company that I’m involved with at this point is thinking about adding diversity to their board. So that’s why I’m saying I think it’s shifting.

Right. But it’s like diversity for diversity’s sake. Besides being the right thing to do, which it is, and that’s a very good reason to do anything in life… It actually, it’s almost as if they’re willfully trying to be worse at what they do by not understanding more viewpoints, not being challenged. I’m not sure …

I don’t know. I don’t think people are purposefully avoiding being challenged. At least the best founders that I know aren’t. I’m sure there’s people who are.

I guess I feel like they find boards useless or something. So what, who cares?

I think if, to your point, you’d basically keep five VCs on a board forever, it’s going to be useless once you become a late-stage public company. They’re a public company.

Yeah. But there they sit.

They’ve started moving people off more aggressively. You see some of these transitions. To your point, on the Twitter board, there were some people who were actually helpful throughout the life of the company, like Peter Fenton, who I think was always a great board member, but I think they basically turned over their board two or three times now. In part to start to change that mix and ask, who do we want on here and what sort of people do we need?

What are the two or three key things on boards? No cronies, what else?

No cronies. Really think about it as somebody that you would have loved to hire or brings a unique skillset to the team. And then lastly, find somebody who also respects you, because the worst thing you can do is have sort of the old-timer who’s going to …

Going to come at you.

Yeah.

Yeah. Yeah. Absolutely. All right. Let’s get to another topic, which is employees and trying to scale employees. Talk about it. One thing I noticed in a lot of companies — AOL, lots of companies. They have this group of people at the beginning that just aren’t going to make it. Now, I remember going to lunch with someone who was going to be incredibly wealthy and do well in the early days. And they’re like, “Oh.” I’m like, “You’re not going to make it. They’re going to push you out of the boat and you should jump because you got your money. Go off and do something else.” And it was a really interesting thing because it’s a hard thing emotionally, because a lot of these teams were tight together, initially. Can you talk about that?

Yeah. I think that’s really hard for people who were really early at a company.

Like the 10.

Yeah. The first 10 people or the first 20 people.

Google was full of them.

It had a lot of … And I call it like old-timer syndrome, irrespective of the age. It’s more just people who’d been at the company since the origins, and it could be four years ago, it didn’t have to be that long ago. And they feel a little bit overly empowered and important relative to the company.

Yes. Exactly.

I think the key thing is that really what you need to focus on is explaining to those people that the company is evolving, the culture is evolving, they’re not going to be having lunch with the CEO every day like they used to, they’re not going to have input in every decision.

“I’m on the plane.” One of them was always, “I’m on the plane.”

That’s probably a Google story.

Yeah, it is. Of course it is.

Really, their role is going to evolve and really what’s going to happen is their role is going to shrink and then it’ll expand later because they have the trust of the founders, they have the contacts, they have all the things that actually make them incredibly valuable, but they can’t throw a mini fit about the fact that they’re losing responsibility. An example of that would be, say that you’re the first designer at a company and you’re designing the whole product and the surface area keeps growing and then suddenly they hire two more designers and your role just shrunk by a third.

Sometimes you may get really upset about that and you may fight with the new people and try and grab things. In reality, what you should be doing is saying, “This is awesome. Let’s continue to build up a team.” Because if you act well and you’re helping others eventually you may become the manager of that group. You may get more and more responsibility. A general rule is your responsibility will shrink and then it will expand and you need to be okay with that shrinking.

You can’t think about that. And what if you’re the actual founder that has to do that when someone just isn’t up to the task?

The hard part is, many founders make two mistakes. One is they tolerate good instead of great in a role in part because of that relationship to that prior person. And secondly they cut way too much slack even if the person is doing an awful job because they feel like they owe them for their early efforts that they made. And I do agree they owe them for their early efforts they made and obviously …

I’m like, “take the money.”

… they’re well-compensated financially and other things, but I think fundamentally what you owe is the organization and the 100 other people that came in on top of them, who now are being impacted by this person who may be acting in a negative way. One of the interviews in the “High Growth Handbook” was with Ruchi Sangvhi, who was an early engineer and then product person at Facebook.

She talks in the book about how in the early days at Facebook she … And then later she sold a company to Dropbox. She said, at Facebook, she was the person who was always fighting everybody new and fighting process and throwing a fit. And then when she came into Dropbox for the acquisition, her job was to be that new person coming in and instilling process and changing things and she saw the resistance on the other side and she said that was a really key learning moment in terms of these two aspects.

Yes, absolutely. Yeah. That’s the way we do it here. Yeah. I like to blow things up all the time. Someone was like, “Well, we did it from …” Like, “I don’t care.” And it’s hard for people and it’s actually sometimes a test: Can you move along? That’s hard. All right. Then the last thing in this section. So, when you’re a founder, the same thing, stepping aside. The idea that you’re not the one.

Yeah. I think you have to be …

Pierre Omidyar was sort of the best example of smart.

Pierre was good at that. Reid did that really well to that field. I think there’s a few people who’ve done it. I think one of the big shifts in Silicon Valley — and I call it the Sheryl Sandberg effect — was that transition from the hired gun CEO always coming in to people coming in as really strong COOs and complementing the founder. And that’s done two things. One is I think it’s helped founders grow and evolve and continue to help their vision.

Yes. For some of them, yeah.

The negative version of it is that it’s enabled people to stick around when maybe they shouldn’t because they’re sort of being propped up a little bit. I think fundamentally it comes down to do you have the self-awareness to decide that it’s the right moment for you to go and for somebody else to come on board and replace you?

How do you do that?

I think it’s a few things. One is looking and seeing if things are breaking because of you and if so, can you fix that or not. If you’re constantly the bottleneck for everything you’re not doing things right, how do you fix that? And again, if you’re managing people for the first time and doing all this for the first time, I think it’s a great opportunity to learn things and you need to be willing and open-minded to do that. You should do maybe a 360 feedback cycle so you get feedback from everybody around you so you can understand what your issues are and how you can improve.

A lot of it is focusing on getting better, first through getting information or data around what’s going wrong, then finding people who can help you in terms of building up those skills. And if none of that’s working you may decide, you know what? Maybe it is time for somebody else to find someone to come in.

For someone to come in. And that’s a hard thing because a lot of them don’t.

It’s really hard.

And that’s usually where the fatal error comes in. Very few can evolve. I think Jeff Bezos has evolved, or he evolved and stay fresh in that role, and has obviously continued to. It does help, a little bit more maturity does help in that ability to do that.

Maturity absolutely helps. I actually think that’s one of the interesting things is that as you watch certain founders age — some companies I’ve been involved with now for 10 years over their lifecycle — and you actually see the founders growing up and evolving and maturing in exactly those ways.

Brian Chesky.

Yeah. I know. Great example. He’s really stepped up in amazing ways.

I didn’t think he was going to make it, but then he did.

But he did, right?

Yeah.

So I do think sometimes cutting people slack and saying, “Look, they’re a young person figuring this out. Let’s help them,” is often a better stance than, “Hey, let’s just get rid of them.” Which was the ’90s.

Right. Which is get rid of them and replace them with someone else.

Yeah. Exactly.

Which is the classic Steve Jobs mistake. Although not a bad thing for him or them at the time. It did create a situation where he got better.

Absolutely. I think if he hadn’t come back and Apple had died at that moment, people would have interpreted it very differently in all sorts of ways, which I think is fascinating. It’s sort of an alternative timeline.

Absolutely. Let’s talk about this idea of growth, high growth. It’s such a thing in Silicon Valley and a lot of people now, including … That growth at all costs has costs. You know what I mean?

Yeah.

It’s just that these companies don’t pay them. I’ve written about Facebook and Twitter and others. Talk a little bit about what’s happened in Silicon Valley right now and the startup culture. Because I think there’s a real … Some people think that startups are sort of, not dying off, but the big companies are now dominating everything. Some people feel the innovation cycle is at a low point. I’d love to hear your thoughts.

Sure. I think from an innovation cycle perspective, Arthur Patterson, one of the co-founders of Accel …

That’s right.

Has this great cycle that he sort of mapped out when — basically what happened is, in the late ‘90s, Accel made a bunch of investments that turned out to be bad investments. In the early 2000s, their fund almost went under. A lot of their LPs pulled out. Arthur Patterson looked back over history in terms of venture over the last 30 years and came up with what some people now call the Patterson Venture Cycle in terms of saying there’s these different cycles of technology waves and he tried to convince people that they were at a low point. Then obviously, two years after that, that’s when Accel made the famous Facebook investment and it sort of really catapulted them to the next level.

Personally, I do think we’re at sort of the lull in a venture cycle right now from the perspective of, we just had SaaS, mobile and social all overlapping each other as three big waves. And I feel like those waves kind of broke in 2016, but nobody really noticed and sort of the capital and the market just kept going. At least personally, I’ve seen less innovative companies relative to the number of companies that exist. In other words, good companies versus all companies is kind of shrunk as a proportion.

It has certainly.

And I think part of that is driven by …

You can’t think of one.

Think of a good one?

You can’t think of one. You used to think of 10. You know what I mean?

I think there’s some pretty good ones still, but I think it’s rare.

Right, but newer ones. I’m saying newer ones and more fresh ones. What would you say? I’m just curious if you want to name names.

There’s a few companies that I think are really interesting. Airtable would be one. Checkr would be one. Front would be one.

Wait. Airtable …

Checkr. Front, Mathilde’s company. She’s very good. I think there’s a few of these that are doing really interesting …

In what areas are they? Do they have to be in subject matter areas or …?

I think the most interesting subject matter areas right now are basically semiconductors for machine learning. So, things that’ll actually compete with Nvidia GPUs. I think there’s fascinating stuff happening there and nobody’s doing semiconductor investing anymore. But I actually think that’s …

Right. You’re right. You’re absolutely right. And video’s really been a big breakout.

And that’s a really interesting area. Video’s been a huge breakout and if you compare them to things like Google’s …

That guy’s smart. Jensen Huang.

Oh yeah. He’s quite good. If you compare what Nvidia is doing to Google, who’s built their own custom silicon for machine learning, Google’s hardware is way better. There’s now startups trying to build that outside of Google. I think that’s a really interesting area. I think just ongoing SaaS and things like that. There’s a dozen new giant SaaS companies to build. Then I actually, I think …

In what areas?

I think what Checkr’s done, for example, where they’ve made background-checking API and just taking something that companies do over and over again. I think there’s like a dozen of those …

Yeah. It’s iterative. You’re right.

… if you just were to decompose a Fortune 500 company. And then lastly, I think crypto is fascinating and it’s basically a giant form of value creation coupled to 95 percent crap.

Yes, it is.

It’s this really interesting dual wave of really interesting fundamental things.

I hear they have good parties.

Yeah. I’ve actually been avoiding all crypto parties.

You don’t go to them?

Yeah.

I heard they’ve been going dark now.

Oh, really?

Yeah.

It’s the dark web.

It used to be some fun, when … Oh, don’t even talk to me about that. Go ahead. Crypto. Talk about …

I think crypto is really interesting and I think there’s a fascinating analogy to the ’90s where … there’s a handful of things that were founded in the ’90s, internet, that turned out to be extremely valuable. Amazon would be one. PayPal, etc. There was things that came a few years later like Google, Facebook, etc. I guess Google was founded then, but was private.

I think in crypto we’re in a similar wave where there’s tons of stuff in the ’90s that was crap that went to zero. There’s tons of stuff that ended up being really valuable and then actually the most fascinating segment are things that, in the ’90s, looked like craters and everybody made fun of. And now they’ve come back in a new form today that’s really successful.

Such as?

Webvan and then Instacart. Or …

No, they were always good ideas.

There was great ideas.

It was timing and execution.

Pets.com. Everybody made fun of Pets.com. Now Chewy’s sold for $2 billion-plus. There’s a couple of these and I think in crypto it’ll be the same thing.

Timing.

Where the market … Yeah, there’s all sorts of things people are doing which are just stupid.

Look, the Newton or General Magic. There’s just been a movie on it. That was right. That was wrong. You know what I mean? It’s just timing, in other words, timing and execution. And then you have to have all the pieces in place to make it.

Exactly.

But how do you assess the startup culture right now? Because again, a lot of people feel it is a little desiccated out there.

I think there’s a few …

And the impact of the big companies. Talk about the impact of the big companies. Because they seem to dominate everything right now. There’s five of them, right?

I think that big companies are dominating a lot of things. I think it’s different from the ’90s, for example.

It was just Microsoft.

Really it was just Windows and Microsoft, maybe Intel on the other side of it, and everything else got squeezed. I think today it’s actually more dynamic from the perspective that you have five companies and they also have the Chinese giants, which I think is a really interesting trend.

You’re absolutely right.

But I still think there’s a lot of room and there’s lots of cracks. I think the thing that’s happened is a lot of founders end up selling when they could’ve kept going because these companies have such large market caps. So the big question on my mind is less about whether there’s going to be innovative big companies outside of those big five, but more how long will they keep going? Because Uber could have sold earlier or other companies could have sold earlier and they kept going. So the real question is who will keep going and who won’t. And then who, similarly, will be aggressive and ambitious.

At Google, the primary way that Larry Page would get upset if you were going into a product review is if you weren’t thinking big enough. He’d always say, “Why can’t this be a billion dollar thing instead of the hundred million thing you’re talking about?” A lot of founders don’t do that and so they never do that next wave of a product or the next cycle and so they just lose out. I think there are some companies who are doing that now, like Uber with Uber Eats and other services. But I think many of the sort of very …

Stay in their lane.

Yeah. They stay in their lane a little bit more and I think that’s actually a detriment to innovation.

Yeah. Why do they do that?

I think it’s founder-driven fundamentally.

Right. They’re worried.

Yeah.

Yeah. Lack of creativity is what it is, Elad. No, kidding. No, but they do. They do. Problem is there was a Microsoft and then you could sort of jet ski around it, but you could. And now the jet skiing is harder because of these big companies and they don’t precisely compete with each other. I’m trying to get this concept to write about it because they don’t direct … When I asked Mark what’s his competitor he couldn’t come up with one. And he was right. He kind of has competitors, but he doesn’t. They dominate over in this lane and it’s like big semis on the highway. Amazon dominates in this lane. Google dominates in this one. Apple dominates …

Yeah. I think each of them has a large core primary business that spins off cash that allows them to invest in other areas and it’s those other areas where they’re competing. Their core dominant area, they’re not competing in.

Right. So they get to save that.

But everywhere else they are. I think maybe the place of the biggest overlap would be Android and iPhone, where that’s clear heads-on competition.

Yes, it is. And yet, it’s not because people make the … You pick your …

You kind of stick to the brand over time.

You stick to the brand and it’s kind of very differentiated and they’re not …

And there’s also different price points. There’s a lot of reasons, but fundamentally, I think there are points of competition. It’s more just that each one has their own core that’s safer.

Entertainment a little bit, around the edges of entertainment and then there’s Hollywood at the same time because it’s really … So, how do you assess this sort of startup culture right now in Silicon Valley and elsewhere? Where do you think the excitement is going on? Obviously, you were born in Jerusalem.

Yeah. Yeah. Way back. I think the thing that I worry most about startup culture is a loss of optimism. I actually think that a lot of the rise of cynicism that’s been happening in Silicon Valley is a huge net negative because I think ultimately optimism is a reflexive asset.

I’m sorry. That’s all me, but go ahead.

George Soros has this great notion of a reflexive asset. The more people believe in something, the more likely it is to create value. I think fundamentally optimism is one of those things where the more people believe that you can do great positive things to the world through technology, the more people will and the bigger you’ll think. And therefore to that Larry Page point, the bigger you’ll actually accomplish.

One founder that I invested in emailed me a few weeks ago basically saying that he was at a dinner party and everybody started making fun of them because he said he wanted to change the world through his company, which I think is great. There should be people who want to do good things to people through their companies. My feedback to him was, “Find better friends. You shouldn’t hang out with these people.”

There is a weariness factor that comes in and the damage that has clearly been done by some of these companies. I’m going to push back on this because optimism is good, but some of this optimism has gotten us into the mess that we’re in now.

What would be an example of optimism translating into bad? Because I think there’s bad behavior translating into bad outcomes.

Right. I think some of these, as I have argued many times, that some of these creations have side effects that they don’t want to take responsibility for. And they’re heavy. There’s some heavy side effects.

That’s different. That’s not about optimism or pessimism. That’s about owning your shit.

Right. But they conflate the two. Like, “Oh, you’re negative.” I’m like, “No, you made a frigging mess over here. Clean it up. And I’m not trying to say that you shouldn’t do …” It reminds me of something I would say, like you don’t — I’ve said this several times — is that you don’t want to be the person at Kitty Hawk saying, “Oh, they only got 10 feet off the ground. That’s shitty.” They flew. They frigging flew. You want to say that. Those Wright brothers, and not be the negative or a contrarian, for example. And at the same time, there is a regular and persistent technique that Silicon Valley people do, which is ignore the impact of their inventions.

Yeah, I think those are separable though. It’s sort of like your kid gets into Harvard, but they never clean their room. They should clean their room, but it’s still great they got into Harvard.

Yes. Exactly.

I do think these are separable things and I worry that there’s such a rise of cynicism relative to anything a tech company does now. And I think some of it is earned. Like some companies have made all sorts of mistakes along the way. I’m not justifying that at all. I’m just saying it shouldn’t bleed over to the 22-year-old person who’s really excited about making great change and who’s never done all that shit. They should learn from the mistakes of others.

I would also argue that we all have celebrated them a lot. They get licked up and down all the time for a decade now. And when people say, “Just a second,” they’re not used to that. It’s almost raised overindulged children.

It’s sort of like …

Everything you do is, here’s an award for this. Here’s an award …

Yeah. I think it’s sort of we’re swinging back on the pendulum. I just hope we don’t swing back too hard because I do think there’s lots of good that’s been done. I’ll give you a very stupid, trivial example.

Okay. Make it very stupid.

I was looking … I wanted to cook some … I have an 18-month-old so I wanted to cook something for him.

Congratulations.

Thank you.

If you feed them, they get bigger. That’s a little piece of advice.

Oh, are you serious? That’s how it works? I had no idea.

I have a 16-year-old.

It’s been working. I was just spontaneous.

They get real big and they eat more.

I was just guessing until now so I’m glad to hear that.

But go ahead. No, no. Just move along.

I was cooking for him, and the way that I found the recipes, I just opened up my phone and I pulled up a recipe and I made it in two seconds. Twenty years ago I would’ve called five people, I would’ve looked for somebody who knew it or I would have to go down to the public library to check out a recipe book. It’s actually the amount of information and access that we have in a friction-free way on a global basis. It’s shocking and people really forget that, just 20 years ago, how different it was.

Technology companies have had this massive impact and they have helped tons of people and they’ve really helped pull a lot of people out of poverty and helped solve other issues. That doesn’t mean that bad behavior should be excused by any means. I’m just saying, if things get really cynical and dark, we’re actually going to be shutting down the people who want to do good work. And I think that’s a really bad trend.

Okay. The only part about that is, like Hollywood people make great movies that entertain us. They don’t sit around and pat themselves on the back almost continually.

Except for the Oscars.

Yeah. I know, but that’s fine. Who watches those? Who watches those? But I mean, then let’s have just an Oscars and then be done with it once a year kind of thing, because they literally … If you make one criticism they’re like, “But I did this.” And I’m like, “I’m not really interested in …” You know what I mean?

Mm-hmm.

It’s really interesting. And again, I think it goes to the juvenilization of mostly men here. They’re not responsible for what they do and they’re not … You can be cynical and you can be honest about yourself. You know what I mean? And I think it’s hard, the minute you are honest with them they think you’re being mean. It’s a really interesting thing because I encounter it a lot.

I think that’s a generic thing for people who have accumulated enough wealth or power over time, irrespective of industry.

That’s a whole nother part. The wealth and power part makes them immune to that because what happens is people lick them up and down all day.

Well, I guess my point is that’s true of every industry. That’s not tech-specific. In other words, if you talk to somebody from the hedge fund world, you talk to somebody who’s a famous artist who’s done really well. Every person that I’ve interacted with … Not every person. Many people that I have interacted with from other industries have people around them who are basically benefiting from being close to them.

I think those Wall Street people know they’re assholes. I think they never forget … I don’t know.

I don’t know. Yeah.

I think these guys, they look in the mirror and see a different version of what they are. Having complex thoughts about yourself is really hard here. They’re much more reductive, which is …

I blame Twitter.

Do you? Let’s blame Twitter for everything. That’s what I did today! So, finishing up. Are we in a high growth period? Because you’re talking about China, about the pressure from China, which is amazingly hard, and as it should be. Give us some predictions. What do you think is going to happen, what needs to happen and then what will happen.

Yeah. I think the biggest thing that I worry about is when interest rates eventually come up and what does that mean for the entire tech economy. I do think that you know half of all the unicorns out there are overvalued. Many of them actually don’t have the fundamentals that would would get this valuation that they have. We also have a generation of founders who’ve grown up in an up market that’s been a decade.

Up market. Right. Yeah.

And a capital-rich environment. And when that shuts down I think it’s going to be really messy for two reasons. One is, people haven’t dealt with it before, but equally importantly, our government is currently using up everything that you’d normally use during a recession to stimulate things. You’d do tax cuts, you’d have lower interest rates, you’d do all these thing that we’re …

Yes. We don’t have any more tricks.

So we’re basically, once interest rates do go up and the economy cools down or the ability to have free capital cools down, A) I think a lot of unicorns will sort of go under, and then secondly, I think the big question is how long will that last? I don’t think it’s happening in six months. I think it’ll happen eventually, but then it could be pretty prolonged in terms of the outcome. So, I worry about the macro side.

The flip side of it is, I am very optimistic about the fact that you can suddenly truly reach billions of people in a friction-free way for the first time and you do see companies growing faster and bigger than ever. I think that’s because we’ve created these big efficiencies in markets and I think that’s a really fascinating trend in terms of company formation, because suddenly you can really get to enormous scale very rapidly like you couldn’t before.

Right. And? So?

So I think you’re going to see more companies getting to $50-100 billion market cap than you ever had before. And we’re already seeing that with some of the companies that have existed over the last 10 years.

And Silicon Valley being the locus of this?

I think Silicon Valley will be one, I think obviously Beijing in China is another. I think Silicon Valley does have risk in part due to just poor governance of the Bay Area and I do worry about the impact that’s going to have and I think people underweight that and I actually think it’s a real existential threat over time.

I agree. I completely agree. This city has all of them.

It’s gotten really bad.

The expense, everything else it creates. So what happens then? Physical things matter.

The real world matters. Who knew? I worry about it a lot. I think there’s some basic things that could be done around housing, around policing, around helping with mental health or other aspects of homelessness. I do think there’s three or four different areas where interventions would be very valuable. The key question is will city government actually act on those? Will the tech community engage in those and try and help and how they will all of that evolve?

Or will they just try to stop tech people from having lunch.

Yeah, I think that’s really a good idea.

Oh my God.

People shouldn’t eat lunch.

Oh my God.

Intermittent fasting is in.

That guy.

Yeah.

I mean, really? With all the problems of the city, that’s what they go for? I ain’t gonna rip that one.

There’s a great series of tweets around that …

Believe me. I think tech people are over … I can’t believe I’m on the tech people’s side on this one, but I’m like, are you kidding me? Of all the problems …

It’s just bad policy. It’s basically San Francisco has made a lot of mistakes over time and they haven’t corrected it and it seems like if that doesn’t correct, you end up with some low point and then you end up with a Giuliani-type mayor, which is in fact what already happened in New York. The question is when does that happen?

They either bear hug tech or they kick them in the shins. I’m like, neither of these things are the correct way. You can force them into really good actions in a way that helps everybody.

Yeah. I think there’s a lot of things that just need to get fixed about the fundamentals of …

That’s just San Francisco, but it’s happening all over the Bay Area. Absolutely. Are you going to start a new company?

Not any time soon.

Take your own medicine?

I’m going to try and recharge a bit.

Have you lost the energy, Elad?

I don’t think I’ve lost the energy.

Do you do that? Does that happen?

You definitely see some people who completely never want to start or run a company again. I think there’s a lot of positives to running a company. At least for this stage of my life I want to focus on family and kids and other things and I think it’s harder to do that when you have a startup as well.

You got rich, Elad. That’s the problem.

Nah. I just …

It does affect…

The funny thing is, it wasn’t until this book that my mom felt like I was going to be okay in life.

Ah. Oh, you have one of those moms.

She’d always come and she’d leave like the $50 check …

Oh, you’re kidding?

Like buried in the pile of my mails. I’d find it after she leaves and all this stuff. It was very sweet.

Oh my God. That’s very sweet.

I kept telling her, “Look, you should be saving this for your retirement. I’m fine. I can also help.” Blah, blah, blah. Then when the book came out was the first time she didn’t do that when she visited and I think she’s like, “Oh, you finally made it. You have a book.”

Oh, that’s good. Oh, that’s good.

I thought that was kind of neat.

You’re finally successful, Elad. Thank goodness, because we were all worried for you!

She’s like, “You don’t have to be a doctor after all.”

All right. I’m going to finish on one thing, which I finish on with a lot of people: What’s a mistake you made? I know it’s a reductive, stupid question, but I’ve actually listened to some very good responses. For a startup founder, what’s the one you’d avoid? Have avoided?

I think it depends if it’s early or late. Most of the mistakes later are about hiring decisions or just misunderstanding the market or your customers. But typically it’s hiring decisions, and hiring could mean things like you don’t hire an HR person soon enough or it could mean that you have the wrong person in place for too long and it kind of screws up an organization in a way that’s hard to recover or takes a while to recover from. For early, the biggest mistakes are continuing down a path that clearly isn’t working for too long or fighting with your co-founder.

Okay. Did you do that?

Every co-founder fights. I started a second company with Othman. So, we obviously work really well together, but I don’t know of a single co-founder relationship where there’s never been a disagreement.

All right then. All right. Thank you so much. It has been a really fascinating discussion, Elad, and thanks for coming on the show.