Building products that delight customers | Adam Nash (Daffy, Wealthfront, LinkedIn, eBay, Apple)

Brett: It is impressive that even when you think about the last generation of software companies, maybe it's that they are much better understanding change and sort of new entrance, but the durability in these software businesses feels slightly counterintuitive to me. Like, if you think about Oracle, Salesforce, Microsoft, you go back and they're all still phenomenally valuable businesses, even Cisco.

Now, maybe they're not growing at the same rate or they're growing at differential rates, like in the way that Microsoft is being run versus Cisco. There feels like there's been less disruption than one would imagine over the last 10 years that it's been almost more grow the pie than the classic blockbuster Netflix kind of dynamic in technology businesses.

Adam: It's always fun to wax philosophical about these things, but, you know, in the objective metrics, it feels like we're creating more and more very large platform companies. and whether you think of that as disruption, cutting off the growth path for other companies. Obviously, Google would be in a very different position for online advertising, if Facebook didn't exist and social didn't become such a big thing. But at the same time, Google persists and does a lot of amazing things. Microsoft did not win the web in the end and, and locked down that market.

They certainly didn't win mobile. And yet Microsoft, I mean, I have a lot of smart friends who think that of all the trillion dollar giants, Microsoft is the one they're betting on right now. A combination of leadership and platform and what, you know, this next era of AI is going to reward but I tend to map that more to the constant cycling in the labor market and technology, and that paranoia. I mean, we all owe, I think, something to Andy Grove for only the paranoid survive, right?. But these businesses are durable and technology has value- I mean, we, I always go back to history.

I mean, the truth is, IBM is still around. They've been around a long time and they create value for a huge number of customers. And a lot of brilliant people go work for IBM and create value and create new technology. And, and so we've had patterns in technology that are very long lived. But I think that the secret is in, what was underlying your question there. Like, even when you're talking about Cisco, et cetera. There's amazing people at Cisco. I know people all different levels. They've amazing work, but somehow we're always eager for the next big thing, and that drives where, you know, talent focuses consumer attention.

Which has an amazing feedback loop on what gets built and developed. But I do think that all the companies struggle with their existing user bases and their existing platforms, right? That was the, uh, to me, that was the big insight in Clay Christensen's, you know, Innovator's Dilemma, more than 25 years ago. That insight of what if you assume that the big companies aren't slow, and foolish. What if you assume they're filled with some of the smartest, best people, who have incredible data about what people are doing in the industry and with technology, and they have distribution and they have the resources to go after...

I mean, they have so many advantages. So why do they keep losing again? And by the way, this isn't purely a technology story, I mean, I always like financial statistics, but how much of the S&P 500 has turned over? In the last 30 years, I think it's over 80%. This disruption, why, do we see this dynamism, across these giants? A lot of it stemmed from the new things getting built, more than the old companies going away. Although there is some, there clearly is some truth to the fact that economically, if a large organization can't achieve enough of a market.

They rarely can downsize fast enough to keep the thing going. I mean, we came so close to that at Apple. I mean, people forget at this point, but if you were there in the nineties, Apple came very, very close. I mean, Apple was almost bought by Sun and Sun balked at the price. I think it was like 2 billion, 2 point something too much.

There are a few things that could have gone another way, where Apple would not be around anymore. What would the world look like if Sun had made it through and not become a part of Oracle? 

We have a survivorship bias. We are remembering the big platforms that continue, but what tends to happen is we lose focus on the last generation, two generations, three generations ago of winners. And a lot of them get folded in to other companies. And we, I mean, the number of companies that have been absorbed, you know, with Michael Dell and Dell, et cetera, incredible companies, et cetera.

I mean, the industry is brutal that way. But the best leaders seem to navigate it and know their markets. I love growth and I mean, my love going back to college was always bringing technology to new markets, new problems. What, what new problems can we solve that we couldn't solve yesterday? You know, if I'm given a choice closer to the front edge of where the market is in company formation, but I mean, it's dynamic at every layer, right? Every generation of technology company.

Brett: How does that sort of idea map to how you think about market timing? Where there's kind of this Goldilocks where if you're too late, you're too late. If you're too early, you're too early.

Adam: I think there's a reason why a lot of people in the software industry gravitate to games like poker, it's undeniable that any one hand that sort of thing You dealt what you're dealt, but there's also clearly skill and how you play the game, especially in a repeated game, I think when a lot of people look at companies and strategies, they make the mistake of looking at it as a one time game versus actually almost all the actors in the process, the, the competitors, the employees, the founders, the investors are actually playing an iterative game, right? This is not the first round that they're playing.

It's not going to be the last and they're learning along the way. And so I do think that, sometimes what gets attributed to luck is just missing the fact that a lot of the actors actually, it was predictable. Or at least logical what they were going to go do. And so it can be understood, and some people are amazing strategists.

I mean, one of the reasons I love working with, uh, Reid Hoffman at LinkedIn and learn so much from him... It's hard for me to imagine what my product thinking would be without having those years learning from Reid, working with Reid.

I would go in every Sunday for two hours. We would meet and talk only half of it productive, by the way. ' Cause we talk about a lot of things. LinkedIn was not an accident. I'm not saying it was a guarantee. There's other things that could have happened in the market outside of control.

But, when you look at, great strategies, et cetera, it's hard to attribute it all to luck. The macro cycle, matters. Technology is not an island unto itself, right? The entire economy matters. What you build, you know, what got built going into and what turned out to be the great financial crisis, what came out of it, these things can't be divorced from each other. Politics, society, all these things interrelate because it affects the market. It affects the consumer. It affects whether you're selling to businesses, companies or, or end consumers. 

I don't wanna get the attribution wrong, was it Doug Leone who used to compare entrepreneurs to kind of surfers? Startups to surfboards and the market was like the wave you ride. I do think there is a skill and you see this in long time, engineers, founders, executives, venture capitalists. You see a little bit of the trying, they're looking in the distance because it's a long term game, right?

And you're putting together the, I actually like that analogy because you have to see the wave coming a little bit, but also you can't see it, infinitely into the future. There's some sort of distance. There is time that you can be too early. Um, and many companies are, although we tend to focus on the ones that are late.

Brett: If you look at so many of the companies that are working today, there's sort of spirit animals of companies, 10, 15, 20, 30, years ago that didn't quite make it.

Adam: Oh, of course. I mean, that hit me for the first time when I was at, at eBay, actually. You know, when you look at companies that got built out in this last run, you see it again, but it was very clear at eBay. eBay was one of the few companies that survived the bubble bursting, So it's hard for me to fully describe the valley. 2001, 2002, 2003. I just had come out of business school. I'd done a startup. I was like the fifth or sixth engineer at a startup, that went public in '99, which I know sounds great. But for those of you don't know every company went public in '99.

It was a thing to do. But no, in all seriousness, you know, eBay, eBay, Yahoo, Amazon were some of the few companies that survived that forest fire. And so what it meant was from 2001 to 2005, they kind of had their pick of talent. 

Brett: And you join eBay in what year?

Adam: 2003. 

Brett: So that was the doldrums out here.

Adam: Oh, yeah. Clearly not as good as the 2001 crowd, but you know, I asked the same question. So I had been associated at a venture capital firm. And one of the things I'd internalized at the venture capital firm was just the value that growth had for people earlier in their career, right? You didn't have to be that senior, but you know, the next founders you wanted to back, the next employees you wanted to hire into the company, they very often had experience at the previous generations' hyper growth winners. And yeah, if you looked around in 2000, late 2002, early 2003, there weren't that many companies growing 100 percent year over year, but eBay was one of them. And I remember going to eBay and meeting all these people who actually had been at some of these other companies that had not made it like Webvan, for example. And if you talk to anyone in 2003, who had been at Webvan, they said, like, it could have worked, right. Actually, the San Francisco location, was profitable. We just over built out. You have a regional built out when you do these local businesses and the capital caught. We couldn't unwind it fast enough.

Right? And the whole thing , kind of imploded for a number of reasons. Once again, I'm not the expert on Webvan, I never was there. Certainly I've had a spectator seat to that whole thing. And so it was, it was inevitable. Sometimes what happens, you see this in the stock market. I always have my foot in, you know, both the technology industry and then kind of, finance. When you look at public companies very quickly when the market crashed, everyone wants to make up a reason, right? A lot of factors went into why the market went down, the market went up, or we think we can do it. But we always want to create a narrative.

We're humans. We like narratives. We make stories. It turns out real life doesn't always have, neat narratives there, uh, a screenwriter. So, but we make these narratives. And so after the bubble burst, there were all these narratives about what wasn't sustainable and what didn't work. And some of those narratives were correct or mostly correct, but some of them aren't.

And I always think the secret is actually with the people, right? So there's people come in, "wait a minute, it was inevitable to me", like there were enough people around the industry who knew that actually regional build outs could work. One of the takeaways is you had to build a global platform, right, from day one, that was the ideal. Maybe you'd start, tipping things over, et cetera. But we knew that local things could work in theory and that gestate. And then all of a sudden you started seeing it crop up. You know, the, the fact that, you know, Facebook built out college by college. That kind of approach, that actually didn't die out, you know, when the bubble burst, that idea of the local build out.

I mean, obviously, the ride sharing companies, you know, all these local marketplaces you do learn from the winners, what works. I mean, there's no question. I mean, even, even the competitors do, right?

How long did Amazon spend trying to graft a marketplace onto Amazon? Nine years, I think, given their first efforts before it finally worked. But that wasn't an accident. They were answering the same problem, which is like, wow, eBay has a really interesting thing going here, aggregating supply this way, a lot of small supply, like the breadth of products. And the prices you can get, that's amazing, right? So much better than you could do top down by orchestrating, you know, vertical by vertical. Then again, you had eBay looking at Amazon going like, wow, the amount of trust, the quality of service you can offer when you control these things top down is really impressive.

And so you had both companies fighting to figure out how to internalize.

they both did

They did in a way. I mean, my friends and colleagues from eBay. I don't want to upset them too much, but it does look like Amazon got the better end of that. They absorbed that innovation in a better way or more profitable way, 

Brett: But to your point, it took them a while to figure that out. They, they used to be the outsourced infrastructure for like, Toys R Us 

Adam: There were so many things they tried. but getting back to our culture piece, I mean, what you saw at both companies was at the heart of how they built software. A lot of similarity, actually, and a lot of fear, of disruption. I think some of the story was told basically by margins.

There's some truth to that old, uh, what's that old Jeff Bezos quote? Is it.

Brett: Your margin is my 

Adam: opportunity. 

Yeah. Your margin is my opportunity. And there was a reality of the fact that eBay was a very high margin business. Not if you looked at all the economics but, in the part that was attributed to the company, eBay looked like an amazingly high margin business as a marketplace and Amazon looked like an amazingly low margin business.

And they did some clever things with float. Everyone knows now, like on how to make the cashflow not quite match the margin. And once again, growth turned out to actually be a cashflow driver for them. Yeah, so some of it is that. But some of it is, yeah, a lot of smart people working on different problems, integrating them came up with different solutions.

But it turned out to be very hard to graft a catalog onto the eBay experience.

Brett: Why is that?

Adam: It just turns out to be a marketplace, this gets back, I always map it back to operating systems because it's my first love and kind of the first product that I kind of dove into is, you know, thinking Apple, I was working on web objects, but that was part of the greater Rhapsody project, which became the Mac OS 10 and all the OS' s we take for granted now. But if you think like an operating system, you can't just roll out new functionality. New functionality does nothing unless developers actually build with it.

And so you have to sometimes build apps yourself to show them how to do it. You build education material and you have to make the case why anyone would do this, economically. And so one of the epiphanies I had at eBay was, at eBay, marketplaces were kind of just their platform. And you had all these sellers, eBay sellers who had adopted the platform and they had built businesses.

They didn't write code. They, they built listings. They made all these items, et cetera. And so if you try to change the system, you're going to a bunch of developers and you're doing an OS upgrade, right? You're basically saying like, oh, you're going to stop building on the 16 bit APIs. You're going to go to the 32 bit APIs.

Turns out that's a hard problem, it takes a long time to get through. And I think the web companies in the beginning were unprepared to think of themselves as platforms. The technical founders, the guts of it, they always think that way.

Brett: In contrast, what did they think of themselves as?

Adam: They thought of themselves more as applications. And so they thought of themselves as like, no, no, it's an app, right? Even the original website guys was very much like, oh, I'm going to build an app. But instead of it rendering Windows on an OS, right? In a GUI metaphor, it's going to render web pages. But it'll have buttons and you can click and you can do things and actions and it'll have data store. And there was some debate is the data local is the data in the cloud. We have fights about everything. You can always... debate different architectures and things. But, um, I do think that the Web 1.0 companies, some of it was because they absorbed, some culture from the media industry.

So this idea of a producer, I mean, some of the original idea of a product manager in the web was a little bit of fusing historically what a product manager had been or program manager had been, in client based software... with a little bit of the media world, right? You had this advertising business model.

People are talking about eyeballs. So a lot of the energy comes in about producing. What are we producing content here? Is it an application? Even that was a fight, right? Some people thought of the web as content. Some of them thought of it as an application, but my epiphany eBay was at least for a marketplace, it's really a platform. And what that means is that when you build new functionality and capabilities, it's not enough to think about what the app can now do.

And it's not the same as an application where, of course, users have to understand the value and, it has to be intuitive for them to find the function and use it and why they would use it, et cetera but it's more like a platform, that relationship that operating systems have with developers, who then build the applications that read the users, is a better model for thinking of a site like eBay.

And so when I went to LinkedIn, for example, I brought that. That was a point of view that I brought pretty heavily, and it's one of the reasons I ended up running the core product, right? Fundamental things, profiles, search, the graph, our API platform, and some of the things that came out of it. Because my natural thing from the product strategy standpoint, the thing that I aligned most with on, with Reid was this alignment of thinking of LinkedIn as building a platform.

That we were going to build applications and businesses over, rather than thinking of it purely as an application itself. And that actually drove, I mean, I did the new hire orientation for 4. 5 years at LinkedIn because I felt it was incredibly important for every new employee at LinkedIn to understand the strategy that this was a platform we're building.

It wasn't just a platform of technology, though, right? It wasn't just APIs. It wasn't just capabilities. It wasn't just nouns and verbs. It was adding new content entities that didn't exist in software before we understood who people were, identity piece, we understood how they were connected. That was the graph piece.

And then, of course, increasingly, as we moved more of their interaction online, we understood the business activity that was flowing across that network. And so that wasn't just a data store. That's not just analytics that, to me, that was a platform and we build businesses over that platform for different markets, right?

Here's how we're going to handle a problem for corporate recruiters. Here's a listings business. Here's an advertising business, right? Here's a market research business. We were building businesses. Some of them didn't work. Uh, and some of them, became big and some of them like the enterprise business just became huge.

Brett: Can you explain this idea of shifting the perspective that you're not building an app, you're building a platform. Can you kind of share a story or a big product that you worked on that's like a direct consequence of seeing the world in that way? It could be at LinkedIn. You were talking about the, the listings project at eBay.

Adam: eBay, um, I got that realization late, that mapping to the web, although some people had it much earlier and I probably was influenced by a number of folks who had, always had the technical underpinnings of thinking of the web as an operating system. I mean, going back to even, you know, I know Marc Andreessen has some great quotes about this in the very, very early days of the web.

But actually I got it even before I worked on a product, even as a consumer, right? You know, this is probably one of the first clues that I was destined for product some way is that, you know, you think about these things, right? So what was one of the first applications on the personal computer that I thought was new and amazing to me?

It actually was a spreadsheet, and actually there's a story at some point. There was a point where I think I was nine or ten years old, where actually, um, my father was renting out an office and he asked me to make a table. To plan out a mortgage of like, what the payments would be and I did not know what a mortgage was. 

I might have been 11, I don't want to over sell the case, but he explained to me the basic rules, right? The payment has to stay the same. There's an interest rate, all these things. The one thing I know about spreadsheet is that let me organize mathematical functions, and they could be dependent on each other. In a way it's like a lightweight programming language, and I remember building this thing. But if you look at how spreadsheets built out, obviously, Excel for a lot of reasons ended up dominating. But one of the reasons Excel was so sticky was it wasn't just an application people use, right? It created this whole library of plugins.

Photoshop became a lot like not just about not just about Photoshop, but, all the plugins, this economy was... 

Brett: Salesforce, same thing.

Adam: So I actually think that I came into software with somewhat of a bias. I said, oh, the destiny is you build something useful. You can greatly magnify its value if you open it up to other developers who can then build on that.

And that made sense to me. It makes sense with operating systems. It made sense that, you know, third party games were a big part. It was great that Nintendo had games from Nintendo and they did great content, but Nintendo wouldn't have been as great if all the games came from Nintendo.

And so I guess that always made sense to me. But yes, I think that, you know, in terms of my progression, that epiphany that eBay had gotten big enough to think of itself as a platform went beyond, explaining what they could do strategically going forward. But it actually explained how the marketplace got built in the first place, right?

eBay in some ways didn't build itself. It enabled, a lot of activity and a lot of entrepreneurial people found eBay and built businesses on eBay. I know when I worked there, that was one of the things I was most proud of working at eBay was not the features per se that we worked on. The motivation was always just the millions of people who made a little bit of extra money.

Some cases built a business that they couldn't have built before, you know, when eBay didn't exist. So I think I did take that to LinkedIn. To me, it was always important to understand what people were building on top of LinkedIn or how they were using it. I know the line seems fine, right? Like when you build an operating system, the line between the product and the developer platform you're building, it's a little blurry sometimes. But I wanted to know what recruiters were doing, right? And you had recruiters who were independent. So they literally were building their own business and they were using LinkedIn to out compete the others. You had corporate recruiters who were using LinkedIn basically to hit their quota. They had figured out like, wow, LinkedIn is only so much a month for a premium subscription. My quota is this much, (laughs) you know, it seems like an IQ test. If I use LinkedIn, it's more likely I'm going to hit my quota, you know, get paid more. It wasn't just recruiters, right? It was any outbound professionals, what we call them.

At LinkedIn, we had this language. It predates me, this great language around inbound and outbound professionals, this idea that there are some jobs where you work with the same people every day and they didn't have as much value on LinkedIn. It was valuable that they were on LinkedIn. So we had to make sure the cost was never high.

When you work with the same people every day, it turns out there's a lot of substitutes, for kind of a professional network. When your job is, if you're in sales, if you're in recruiting, there's a lot of actually, you know, as an executive entrepreneur, there's a lot of different places where a lot of your job is to meet people.

You've never met before that's when this incredible network has immense value.

I used to say, I actually, there was one board meeting where I told the board, that LinkedIn did two things for people, answered two questions. Who do I need to talk to? And how do I get to them? And I argued that the search and graph, that's what they live to do.

When I talk about product strategy, right? It was for search and cloud is what we called it at the time. It was so clear. That those were the problems we were to solve. And if we were the best at solving those, we would win what I had defined as this nascent market for people search. And we, we spent a lot of time thinking about what are the queries in people search?

What are the failure cases? How do you define success? What are the different types of people, right? Different market segments using it. What type of queries do they do? It turns out a, query that a typical person does is, mostly a form of name search, although with some complexity, whereas outbound professionals, if you're a recruiter and you're looking for, Python engineers, right?

How many leads do you want? I know there's a limit to that number. But I never found it. It turned out that if you can offer a recruiter great leads for Python engineers, they're very happy to take 200. 

Brett: Going back to what we were talking about a second ago, what's there to be learned from LinkedIn's success and, or, why was it successful?

Adam: There are going to be some folks out there. I talk to them all the time who, um, like to dump on LinkedIn from a product and design standpoint. And by the way, there's-

Brett: Almost everyone, I would say.

Adam: Well...

Brett: I think it's the same type of people that dump on Salesforce. 

Adam: Fair, and we can carve out some time for Salesforce at some point. No, you're saying everybody. No, actually, I'm struck by how many people now I run into who say LinkedIn is their favorite social network. And it's not who I would have expected , 10 years ago. But when I go back to LinkedIn, I am going to give a product answer.

And maybe that's my own bias or, you know, talking my own book in some way. I was always very proud of the fact at LinkedIn, that we had strong opinions. It was an opinionated design. It was an opinionated product. We were not building a product for everyone. We were building it for professionals.

We're building it for work. We talked a lot about what people did every day at work, what problems they have. How can we solve those problems better if all of a sudden we understood who people were and how they were connected? And, you know, if you go to, traditional, specialists and experts in business, we just call this part of the marketing function, et cetera, which makes sense. Who is your target customer? Who are you going after? The incredible alignment of LinkedIn was this combination of a very clear product strategy, which was great forward looking and turned out to be very correct about the way things would build out.

And there were debates, Mark Zuckerberg was very adamant for a while that in the future there would be one profile online. There was a point where he thought it was almost intellectually dishonest to represent yourself in different ways online. LinkedIn, we had a different point of view at the time, which is, we said, no, actually, people have different slices of their life.

They have different identities. And there are some of those identities that are valuable enough to build independent platforms around. So, when I look back at LinkedIn and why it's been so successful, that opinionated design, not trying to be everything for everyone, led to us building something that ended up navigating some of the problems that the greater web and social web has run into, not necessarily on purpose, but because we were focused on a particular problem.

The problem when you design for everyone, is you design for no one, right? You end up with these hypothetical people that don't really exist, right? It may be true mathematically that people have an average, in the U. S., might have an average of one point something children now.

But that doesn't exist, what really exists is that there's large families and small families and there's couples, singles. There's... there's so many different flavors of households. By focusing on one, sometimes it gives you an indicator of where the future is going, because you ask, you go a little deeper into who they are and what they're thinking.

And I do think we discovered some problems on LinkedIn in the workplace that were signals of problems with the greater social web, right? We worried a lot about reputation. Why? Because people at work worry about their reputation. We lived in fear at LinkedIn of creating any experience that people would find were negative for their career, negative for their work. When we designed photos for LinkedIn, it was incredible, it was the first feature I worked on at LinkedIn was photos. I know it sounds ridiculous. The idea of launching a site for social without photos, but it's true. I, I joked at LinkedIn that LinkedIn would be the last site to roll out photos because no one would ever build a site again that didn't have photos from day one. You know, the idea of, like, how do we make sure that they don't upload a bad photo? We don't want the party pick from Myspace or Facebook or that sort of thing. We don't want the low resolution.

We want something, I mean, like, if you look at professional websites, you know, executive boards, you know, venture capitalists, they obviously glamour shots and they look serious and they have a look and photographs are like, tilt this way, you know, the chin, like, how do we get them that you can't do that, but how do you help them?

It was like, so when we build a feature, it was definitely we not just only give guidance, but we designed cropping into it, which once again, sounds obvious now, but back then was not a standard was mostly just, upload photos. But we designed cropping in and tell people like, okay, step one, you're gonna upload a photo.

Step two, like, no, you want a headshot and actually want most of it to be on your face and you, you know, we tried to help people do that. We even actually did a little trick where we, depending on whether the photo is vertical, etc. We cropped it, auto cropped it a little bit differently to guess at where the face was.

 But we cared because if someone joined LinkedIn and uploaded a bad photo and somehow their LinkedIn profile hurt their reputation in some way, that wasn't just a bug. That wasn't just a miss. That was actually like, that fought the entire strategy.

The whole, the whole idea of LinkedIn was to get people's professional reputations online. The 95 percent of people who are not on the job market right now, because they were gainfully employed. They weren't looking. What that did is it made us care a lot about reputation, even with interactions.

How do you make sure if people can message each other that they're not bothering each other, that people don't feel spammed by these different, outbound professionals hitting them? I'm not saying we got all the answers right, but we spent a lot of time on those problems. And I think in a way, we were worried about those problems, maybe five, to seven years before the rest of the industry started worrying a lot about those problems. And that has helped LinkedIn not only develop a reputation for a certain type of site and experience, whether people make fun of it or not, or love it or not.

And I think it also, led to a kind of coherence in the design so that when reputation. Became a bigger topic, et cetera, doing the things you need to do to protect users or make sure that the content doesn't lead to a negative experience felt more authentic and organic to the LinkedIn experience than maybe it did to other platforms where you had to graft it on almost unnaturally late in the game.

Brett: So how does this map to what good product strategy looks or sounds like?

Adam: We all have different bias. I'm sure you get different opinions about this. For me, product strategy, is nested under the company strategy, and I joke in my talk, but, you know, almost all the product fights I've seen around at the execution level for feature design or prioritization actually stem from misalignment at the strategic level.

So to me, the company strategy... yeah, why does this company exist? I mean, this is somewhat I got from my experience in venture capital. You start thinking, well, like why this company? Why now? All those questions that good investors ask, like what's going to happen over the next seven to ten years that makes a company like this make sense and actually incredibly valuable?

Whereas no company existed before, right? It's some combination of the people, the technology, the product, the finances necessary to build that out, the go-to-market strategy. See those five things to me, if I'm writing an investment memo for investing in a company, I'm going to cover all five of those things.

So in the operating world, I don't understand why you don't have those five things. To me, there's a company strategy that says why the company exists and it covers these sub strategies. What's the go-to-market strategy? What's the financial strategy? What's the people strategy? What's the technical strategy?

And yes, the product strategy that's going to drive that because most of what we build in the software industry is product driven. In the consumer market, you design distribution into the product, right? You design monetization into the product. I mean, this is now true in the enterprise too. It used to be, it was all direct sales like Oracle days, just amazing sales engine, et cetera. 

But yeah, starting with Salesforce and then LinkedIn, of course, did this phenomenally well, this idea of product led growth, which now I'll talk about that was just the basic idea of like, no, um, you have to design it into the product if you want it to be scalable.

If you want that compounding growth at the heart of companies, economically, you actually have to have compounding growth built into the way people use the product and distribute the product. To me, a great product strategy is dependent on a great company strategy. And very often when you see product strategies that don't make sense or misaligned, et cetera, they're either following a company strategy that doesn't make a lot of sense, or they're misaligned with it, or there's disagreement there.

It's that same scalability. There might be a product strategy for LinkedIn, but it's subdivides into strategies for each of the things you're doing. At LinkedIn, we used to have different teams focused on problems like growth or engagement or revenue. 

 Great product strategies, they upward, they fit into the company strategy and downward, they subdivide into the different products and features that everyone's working on.

Brett: How would you articulate what the company strategy was, and then maybe the product strategy, or some of the product strategies in the areas that you were spending time?

Adam: Well, the seat of product strategy at LinkedIn to be very clear was invariably Reid. And even as about, even when he stepped out of the CEO role, and was chairman, he kept his hand pretty directly in product. He might even argue too much at times. And then once he actually stepped out of that, he still was giving guidance on the product strategy piece.

So, I would never claim to have had the seat of that, for LinkedIn. But it was very important that same process for the parts that I did run and control, like I said, I was running core product and that was not just for product. It was also, you know, when I was running the user experience and design team, why does LinkedIn need user experience and design strategically?

How does that fit into the company strategy? How's it fit into the product, we're building, the people? And what does that tell us about what we, who we need to hire and how we prioritize. Every function that I ended up running, ran that way. But, you know, for example, LinkedIn mobile, so in 2009, I was handed LinkedIn mobile, it had been literally a fun, innovative thing that one of the engineers had built.

We had an intern over the summer work on actually keeping it up, but we did not have a heavy focus on mobile. And it was because when I took it over, I realized that there was no product strategy for mobile other than, like, the iPhone is cool.

Brett: What was the company strategy in 2009?

 The strategy was, this basic insight that the social web was teaching people to bring new entities online, who people were, brought people to the web and how they were connected. You know, Reid being ever pragmatic as well as a good strategic thinker, realized that one of the things that would be really valuable is applying those new objects, you know, those new entities in the system to business. Because so much of business is based on, you know, who people are and how they're connected. And so the strategy was to use a connection game, game mechanics and the social web to build up the largest user generated system, of identity and connections and then apply that as a platform to valuable business problems. And someone's, like I said, are obvious, recruiting sales, et cetera. And so that was the basic idea. And so it took together the social web, it took together Web 2.0, the idea of user generated content and made a good case that actually most people in the workplace weren't online because the only time they shared their professional information was when they were looking for a job. And it turns out, in the modern economy, most people are not looking for a job at any given time. Actually, employment is quite high, despite no matter what everyone's fighting about in politics here and there, there's ups and downs of the economy. It turns out most people at any given time are employed. And so depending on the, people uploading resumes or necessarily, it wasn't going to work. You needed to create a system where it made sense for people to have their reputation online all the time. But yeah, the basic product strategy of who people are, how they're connected, user generated content, social, basically game mechanics, et cetera, to get that platform together and then network effects, between that system. Once you have a system going, it always makes sense to join the largest and most active system that does that. And so that was part of the strategy. I mean, this is I lived in fear in the early days. I had so many friends at Google, but I lived in fear in the early days of Google figuring out what we were doing.

Adam: It was more worrisome if Google ever got excited about the idea. I mean, there's a limit to focus and that sort of thing. And so, um, because there were a small number of companies that had the distribution and could have done a similar strategy, and built a substitute, before we got to critical mass.

But yeah, it informed everything, but like the products, right, what it meant. When I took over LinkedIn profile, the identity system, it meant that, what is our priority? The entire company strategy, is to get as many of these profiles as possible and actually collect information that's relevant for business, that is, you know, as detailed and useful as possible. And so that defined what metrics we did. Our focus on the strategy and the profile team is, what are the features? What are the things that we could do, to basically maximize those goals. And we knew that if we did a great job getting as many profiles on LinkedIn with as much valuable information for business as possible, that fed the company strategy.

I think I get a little bit of this from the financial world, actually. You know, kind of business 101 that you can subdivide that into kind of a few different metrics to track, right? And so I've always liked these systems that break apart that decompose very easily.

But at LinkedIn, you know, LinkedIn mobile, why does it exist? Why was it struggling? Because it didn't have a good strategy that lined up to the company. Well, there's two things you could do with mobile. You could see it as a growth feature. Oh, more and more people will join LinkedIn because we have a mobile app.

Didn't seem to be true by itself. We hadn't quite figured out native app distribution at that point, et cetera. But what seemed obvious to me from the metrics, I had previously worked on things like the emails and this sort of thing, was that actually it seemed that people, it was true, the difference between computers and mobile was that if one tenth of people had access to a computer, it seemed like everyone was going to get a phone.

And by the way, if you were in front of your computer a few hours a day, people never put their phones down. So there might be somewhere between a ten to 100X increase exposure when they're on the phone. And so I felt like, no, the phone is clearly, LinkedIn mobile is meant to drive engagement. We should see people using LinkedIn more often for more things if we have a great mobile experience.

And once you have that alignment, the strategy was like, okay, so now we understand, our job is to drive engagement. We should make it so that every person who use LinkedIn mobile, ends up using more of LinkedIn's features and capabilities and finds LinkedIn more valuable, right? It was, it was about more users more often. And that actually was very helpful. I know it sounds obvious, but it turns out once you frame that way, turns out engineers, designers, they're all very smart. They will brainstorm a lot of different ideas, most of which actually turn out to not be great. That's the whole brainstorming process.

But if you run that whole process, you come to a bunch of set of ideas where people go, oh, I get it right. How do we make, what are the use cases on the go? If you have 30 seconds, you pull out your phone. I mean, one of the use cases I loved at the beginning of LinkedIn, actually got it from a developer on the platform.

Basic insight. It was just the idea. It was a simple app. I remember looking at, it was just genius, where it was like, you entered your LinkedIn ID, your Google ID, and your phone number, and then 15 minutes before every meeting, it would text you the LinkedIn profile of who you were meeting with. So perfect. It's like ,exactly what you want.

I was like, oh, that's right. That LinkedIn mobile app is gonna be different than the main site, right? It's not gonna be these heavy involved searches, it's not, it's gonna be this quick win of like, I can just... relevance, right? I can just type in a name really quick. Or maybe I can just pull the name from another source and just show you what you need to know.

It would be that perfect assistant, ' Devil Wears Prada, right? That's Senator so and so, you met them three weeks ago. Like that was the dream. I think it's still the dream for a bunch of companies. We keep shooting at that problem. Um, 

Brett: And with AI assistants, it's the same thing 

Adam: but to me,

that's like, what a great product strategy. It's that simple.

What game are you playing? How do you keep score? You know, the game we were playing with LinkedIn mobile was like, okay, the reason we are investing in this is because the future. People are going to be using mobile applications 10, 20, 50, 100 times more than they ever use the desktop web. And we need to build a great experience so that LinkedIn is incredibly valuable to those people, so they use LinkedIn more often.

Eventually, we got to the point where it was like, well, if you use LinkedIn most often, you realize that the more data you put into LinkedIn, the better its relevance is. The better it does the more knows you, the more can be relevant and what it recommends to you, whether search or otherwise.

And so we knew eventually that engagement was also going to lead to the company strategy, which is investing more of their own information into LinkedIn more of their own relationships, more of their own activity that built the platform that all the businesses were built over.

Brett: What was the company strategy and product strategy when you were building Wealthfront?

Adam: That was a little different and it changed over the years because that was a really new area. Uh, Wealthfront, was actually a pivot from a company called KaChing that had gone through multiple iterations of its strategy. 

Brett: What was KaChing?

Adam: In its earliest form, KaChing was an ability, a Facebook kind of game, social network app, where you could put up your stock picks, portfolios and see performance and basically compete implicitly for who did the best. And the idea of course, grew into, well, advisors, how do you pick a financial advisor? Well, what if there was a meritocracy? What if all the financial advisors put their picks up and they, you know, you'd go with the best?

And then what if you could put real money behind any of those advisors, into this system? And by the way, as an angel investor, I see this idea come up again and again, and again. There's something about this idea that is a little bit of a honeypot for smart people who love finance and marketplace.

It's just, oh, maybe this is an information problem. Just, no one has good information. The marketplace is meant to be here. And of course, who doesn't love building a great marketplace, right? VCs love it. Founders love it, et cetera. but that wasn't working. And it wasn't working for a very good reason.

It turns out that what that missed a little bit is when it comes to money, there are these psychographics. The great thing about, I love about fintech and about money in general as a product problem, is that unlike some areas... It turns out money has been around for a long time and there's been no shortage of entrepreneurs and people who are trying to make money in the money business.

It's one of, it's one of the oldest businesses. And so, as a result, there's actually a lot of deep understanding of what is evergreen about people's perceptions of what their anxieties are about money, you know, fear and greed, when is it hope, you know, what pushes them to make different decisions, different psychographics.

But one of the psychographics the industry has known about for a long time are the difference between do-it-yourselfers versus delegators. Do-it-yourselfers are people who actually, they like the problems around money, they want to pull the levers. They want to make choices.

They want to, I believe in this company, not that company. I believe in this country, not that country. This, this sector of the economy, this idea, they want to make choices. I, I think the right time to invest in bonds. That's not, like they, all these different choices, they love. Delegators are like, that is not what I want to spend my life doing.

I have, certain number of hours on this planet. I do this, I do that. But like, I'm not trained for this. I don't want to be trained in this. I want someone to manage my money for me. I want them to be good. I want to make sure they're doing the right thing. And so there's these delegators and do-it-yourselfers. And what KaChing had accidentally discovered was that the marketplace attracted do-it-yourselfers. But do-it-yourselfers have a problem. They don't want to put money into your system. They want to do it themselves. And by the way, they don't really want to pay anything. I used to joke that, you know, for do-it-yourselfers, there was no fee that was too low, right? If you charge 20 bucks, they want 10. You charge 10, they want five. You charge nothing and they're like, wait, is there like points or something? Can I make money this way? Like, there's no like, so do-it-yourself is a very hard market to make a sustainable business around.

 , Robinhood turned out to be amazing, right? 

Brett: Do you think the Robinhood insight was around do-it-yourselfers? 

Adam: Oh, they built the product for do-it-yourselfers and they built the right pitch. They, it was a free product where you could trade stocks. They added options, they added everything, but they were for the do-it-yourselfer and they went out with a message that like, hey, anyone can take control of their life.

This is not just for the fat cats on Wall Street. Like anyone can do this.

Brett: But it feels like the thing they figured out was that the next generation of do-it-yourselfers versus like the 60 year old with an Ameritrade account or whatever else. 

Adam: And they also got the timing, right? They hit the crest in some ways. They hit, Millennials the same way that E-Trade hit Gen X, except the Millennial generation's bigger. But in terms of the market, they also launched into a good macro environment as it turned out. A lot of new young customers who liked that proposition.

And they walked into, we talked about waves before, you can't predict. They also walked into an industry that was fatigued and tired. They had fought the Web 1.0 wars, the bubble burst, a lot of things struggled, lot of good companies went away and products, some barely struggled through, but you were 10 years into that whole industry, basically deciding that we're done.

That's not where we're optimizing, I mean, you think about when Robinhood came out, when was the last time the E-Trade interface had been upgraded? I mean, Fidelity and Schwab mostly had been static, it just was there. And so they hit that combination of nope, mobile first, brand new, clearly designed.

You had a new market of twenty-somethings that, you know, evergreen. There's always new adults who want to learn about managing their money and that sort of thing. And they just hit the right thing, the go-to-market. They had the Reddit thread. Reddit was coming. I mean, like they hit all these things. So, a combination of pieces.

Anyway, I'm not, I'm not the expert on Robinhood. I don't want to oversell it. 

But yeah, Wealthfront, what they had figured out was that they were going to build a product for delegators because delegators were willing to pay. 

I'm like, wow, there's a lot of people like this.

And so they set out to build the simplest, most trustworthy product, they could. Which turned out to be the one that was academically justified, right? A diversified portfolio of low cost index funds. And they also hit this contrarian piece. They discovered that between the delegator and the do-it-yourselfer, people assume that everything online was for do-it-yourselfers. So if that old saw that you have to be, um, like Howard Marks, you have to be contrarian and right. That's the quadrant you want to be in. The contrarian play behind Wealthfront was that people assume that delegators wanted to work with people, and that do-it-yourselfers would do stuff online, do it themselves. And Wealthfront said, no, no, no, actually there's a new generation of people. They are very comfortable delegating to software and they'll be increasingly so. By the way, the business model of everyone having a human financial advisor, it wasn't going to work forever.

There's a reason why financial advisors have minimum, high minimums and high fees because it is expensive to provide that service and a human advisor can only take so many clients. And so that basic strategic insight the company strategy was like, hey, there's actually a lot of delegators and increasing number are coming online, mostly young.

And most of future wealth belongs to the people ahead of us. And so the contrarian play was if we built a site, if we built a financial advisor in software that could help people with their financial lives, that would be a generational business that would be around for decades. And so the product strategy was just fed off that, right?

So we were always investing. We were literally looking at all the best things financial advisors did for their clients. For the very small percentage who could afford to have a financial advisor, how can we turn that into software so everyone can have it? And it drove a lot of innovation, right? I'm very proud of the innovations.

We had to, I mean, Wealthfront was the first, to do ETF tax loss harvesting, automated. And then we did direct indexing. Direct indexing is so hot right now in the industry. It's 2024 direct indexing. So hot. We launched it the end of 2013, my first year there, because it was the next thing to do. We knew that there were firms that existed at the high-end, firms, like Parametric, who had done this for clients for a long time.

We were going to put it in software so that everyone could have it. And we just use that to drive innovation. Always asking the question. We knew who our target customer was. We knew what financial problems they had. I actually, at one point, had everyone really brainstorming lists. Like, what are all the financial problems that thirty-something households have?

Because that was not the priority of the industry. That was not what I felt the incumbents were focused on. The incumbents, their average customer was 50 different set of financial problems, different financial situation, different filters. You should find innovation there. So a lot of the product strategy of welfare was driven off that.

Brett: What are some of the interesting things you've figured out as it relates to customer acquisition? There's a lot of counterintuitive things, specifically I think about acquiring customers when it has something to do with money. They're the least likely to move, even when they have a tremendous amount to gain, and it's very easy to do so.

Adam: For whatever reason, it's hard to get someone, to take action in their financial life. The universal thing that I've learned across companies and technology generations and cycles, when it comes to growth, when it comes to user acquisition, it keeps changing. The market keeps shifting, the channels keep shifting, and more importantly, it's a competitive market.

I remember always thinking this on the enterprise side, when you're building companies that sell to the Fortune 500 or the Global 2000. Usually generational companies, they have to come up with a new way in because companies find a way into that market and then they kind of lock it down. They, they don't slam the door behind it, but they, they barricade it and make it harder for the next companies to come in the same way.

And consumers don't have the same feature, but there's fatigue. They basically get overtaxed. Someone figures out this is a good way to sell a product. You see this in food. And so unfortunately that the big lesson is changing, but the biggest things that guide me and it guides my current company and organizations, we're trying to do something new, in fintech and with money is that you have to know your market segment.

You have to know, where they are. What else do they do? Where are they out there? And, when are they willing to make that decision? When are they looking? When are they approachable? This is true in every business. Sometimes in technology, I feel like we rediscover things that are apparently obvious literally to everyone who runs a traditional business.

Even virality, by the way, I remember I did all these blog posts. I did all this whole series because LinkedIn was obviously one of the viral greats and it really wasn't. It was very hard to get that thing to move, but I wrote a lot about virality and some of it's just basic business, right? You know, a new person comes in the door, visits your business.

What's the likelihood that they come back and bring a friend in the next seven days? What does that look like? Why would they do that? What's the proposition? Ask that question, it gets you to a lot of the answers.

So that's, the biggest lesson I've learned about growth is you treat it like a product problem. The idea of like, we'll build the thing and someone else will sell the thing. There are businesses like that and they exist. They're hard, but that's not where, software's super competitive. The industry is incredibly competitive on a global scale. I'm not gonna say that's impossible. That's very hard to do.

The most scalable products that suit kind of building out these new companies, these new platforms. You have to have thought about that growth and distribution problem as part of the product, how it works. And by the way, it can't just be like, refer a friend. It has to be authentic to the product experience, which forces you to this question of wait, why is this product better, when more people are on it? Is this a single player game? I mean, one of the problems with fintech, the first generation, I'm going to call the generation we just went through, the first generation of fintech. I know I'm going to get a bunch of angry people from the 90s who say like, oh, we were doing fintech, you know. But it's true. They're right. But I'm just going to call fintech 1.0, kind of what happened in the last 10 years and was very much single player games. It made it very hard for fintech companies to authentically design products, that had distribution built in that would lead to other people because people don't really share their bank accounts.

You don't really share your retirement account, et cetera. And actually, I see a lot of, excitement now, because I think we're now tackling new problems, in fintech that actually are inherently multiplayer. But yeah, so when it comes to, growth, designing distribution, thinking about growth as a product problem.

And then the last thing I look for, especially around money is I actually look at the root economic value of what you're creating. Actually, that's my biggest problem as an angel investor. When I meet with founders, there are some founders in fintech always who say you can make money this way. People will buy this product and by the way, that's not a bad motivation.

I mean, that drives a lot of the food and beverage industry. A lot of very successful multi billion dollar businesses are built off of, not that this is a better mousetrap, et cetera, but I can sell this. But when it comes to money, I find those businesses very hard, to run and be durable, and also they don't scratch the itch for me of actually feeling like I've created something valuable.

And so whatever financial product you're building, it fits in the financial ecosystem in some way, not just for the end consumer, but there's a reason it exists. The mortgage process may be terrible, but there's a reason why mortgages work the way they do. There's a reason why they have the filters they do. There's a reason why they economically are priced the way they are all those different things. And so when I look at a fintech product, I have to understand how the core value is created and for who. And for me, I choose to focus on products where I feel like there's significant core value created for the end customer, for the consumer. This is not just valuable for the business creating it. I know it sounds obvious, but, you'd be surprised. I see a lot of fintech founders where, you know, the first thing that strikes me, it's like, wow, if you're very successful and a lot of people use this product, they're going to be financially worse off.

And that's hard for me to dedicate my time to and efforts. And there are some products where I go, for example, going back to whether it's Wealthfront or Acorns or any number of fintechs, or my current one, Daffy. Where I feel like, no, no, no, the more people who use this product, the better off they are individually and in the aggregate, the better off the system is.

And so for me, like, I honestly believe at LinkedIn, doesn't have to be fintech, I honestly believe that the modern economy was more and more rewarding people. Careers were not 40 years at one company and a gold watch. And you know a steady, four percent raises every year, people were switching jobs every two to three years.

The economy was shifting. They switch shift industries. It looks like every decade. How are we going to give them the tools to navigate that and find success? By giving them control over the reputation and the relationships that was part of the solution. I didn't say it was the whole solution, but it was part of the solution.

Once again, coming back to the product was like, how do we build a product that's good? When someone signs up for LinkedIn, their economic opportunity grows. Their professional life gets better. Their career opportunities expand. It turns out if you train people who are smart and creative on the right problems, they will come up with very good solutions.

I'll also come up with a bunch of bad solutions, but at least you have them on the table and then you can use your, you know, your filters, your decision making to, focus on the most valuable problems.

Brett: What was interesting about working with Andy Rachleff on the business.

Adam: Andy, of course, has a long history as an investor and by the way, not a, not a small one. I mean, Benchmark is a relatively new firm in some ways. I mean, now it's been decades, but I mean, it was, you know, born in the nineties. so the fact that he had been there at the beginning of Benchmark, his dedication to understanding why the venture model works and about the entire venture ecosystem was really quite deep.

And so we immediately got along, on all those fronts, because I also... I didn't have the experience that he had, but I had the same passion for the industry, et cetera, a little bit, probably more biased on the operator side, right? I'd come up as an engineer, right? I was an engineer. I was a designer. I was a product manager.

Very often he was someone who had the frameworks and also the patterns of, this is what success looks like. These are the problems we have to sign next. And I love coming up with solutions to problems. And so we, we work really well together. I think framing and, you know, on those different pieces.

 Most of my memories, I think of analogies now, I even teach a class at Stanford, personal finance for engineers, in my spare time. There's always a request from the students to talk about venture capital and private equity. And inevitably, I always end up having some quotes or insights from Andy in there.

Brett: , What's so interesting is that he had a long career as an investor and then went and started what became Wealthfront and ran that sort of on again, off again. In the realm of company building, are there specific perspectives that he had that kind of stuck with you or, updated any of your priors?

Adam: This is actually some of the advice I give founders as well, in building companies. There are some founders who believe that their investors are like this necessary evil. That this problem, I need capital, they have the money, I need the money. What do I need to tell them? By the way, more unsuccessful salespeople also have this philosophy. They think selling is about somehow it's a trick, right? Like there's some pattern to get you to pull out your wallet. The best salespeople actually understand the customer's problem and understand how they can solve it. And so that's a much better process. I feel the same way about investors, and board members, right? I always tell founders that financing is actually a hiring decision. The investors you have the board you have, it's incredibly path dependent. A lot of your opportunity depends on having the right people with the right motivations involved.

You don't want to sell an investor on something you're not. Because then when inevitably comes out that you're not the thing that they want to back, they're going to focus elsewhere. Right, they're not going to support you or worse. They might push you to do things that are unnatural and not right for your business.

And so having Andy there, was always, having that frequent access to a board member, so that you didn't forget. It's so easy within a company to start focusing on purely operational issues. And not elevated to the strategic level, right? It's so easy to focus on no, no, we're trying to ship this product.

Brett: No, no, we're trying to move this number. No, no, we're trying to, you know, all these specific things. And so that was the best part of the experience. I mean, the truth is I got the pattern somewhat from LinkedIn because this is how Reid worked with Jeff, and a number of us. Reid was that founder who said, no, actually, I, can operate, it's not where I feel like I have my best differentiated value. And also, it takes me away from some of the other things I do really, really well. And so he stepped into the executive chairman role and brought in CEOs. It's an interesting dynamic in terms of what Reid did at LinkedIn, very successfully bringing in a CEO, but still being involved in the business. And I feel like that oftentimes doesn't go well or it's difficult to get right. And then there was some configuration with obviously you and Andy working on Wealthfront

Is there anything interesting that you've sort of figured out about making that kind of set up successful? 

Adam: Uh, well it takes a rare founder. I think the reason it's uncommon is because, the attributes that tend to select for founders who end up building the scale businesses tend to select against people in some ways that scale particularly well in different dimensions. And one of the ways they don't scale well, it is quite that posture on how they handle decision making or the belief of they're the ones who have to hold it all together, et cetera. I find that because Reid is, you know, sometimes you hear this expression, a systems thinker, et cetera. Reid's a, natural systems thinker, that elevates above his need to reach in and grab the stick or the steering wheel and drive. I think also, it's not all about the founder or about the executive. The company isn't just that the investors, the board, the executive team, et cetera. They also enable all these patterns, You know, he would talk a little bit why part of the reason Jeff was so successful was some of the experience working with Dan previously. He had brought in a CEO and Dan had left.

And, you know, before Jeff came in. And so, he's talked about some of that experience as well. I sometimes see startups where actually it's the board pulling and investors going. Maybe it's because the business has turned in some way. The market has changed. They brought in a leader who is built to scale, but now the market's shifting and all the attributes they thought were a positive when they brought that leader in are not the right attributes they need for the next run.

So, sometimes the investors. It can just be a dynamic with executives of the team and that sort of thing. And sometimes the founder has moral authority. What Reid talks about, which I love, cause I love, mythology and a lot of other kind of cultural, stores of information and narrative. Reid talks about this idea of making new founders, which actually resonates quite a bit with me, is that one of the reasons founders get to do what they do is a level of moral authority, right?

I built this company for X, or I never intended that, or I was there. I can tell you that, if the situation then was now, I would have done different things. These are kind of crude, by the way, in simplistic ways of establishing moral authority, but they're useful and they're real. But I think that when founders bring on new people, they have the lone ability in some ways, to basically create new, if not founders, than people with moral authority. I mean, one of the reasons I had the success I did at LinkedIn is that Reid imbued me with a lot of moral authority at LinkedIn. People believe that if I explain to them how LinkedIn worked and what the strategy was and what we needed to do that, I was highly aligned with Reid at the source. And more importantly, that I understood, right? What LinkedIn was meant to be. 

Brett: How did he do that? 

Adam: This is one of the things I loved about going to business school. I know it's not popular in The Valley to talk about business school. I actually learned a lot of different things because you learn a lot.

There's a lot of great businesses and industries in the world, which change over leadership frequently. Think about how many organizations would not function or be around today if they couldn't transition leaders and bring in new leaders and imbue them with power and moral authority. And in tech, we just keep going back to like, well, you got to bring the founder back. There are a lot of incredible attributes to founders, that is not a solution that scales fundamentally.

It turns out the founders are all humans and bless their hearts, you know, we're, we're mortal. And what Reid got intuitively, cause he loves philosophy and governance and all these different systems.

Was just that understanding of, yes, when you bring on new leaders, new people, you have the chance to imbue them with authority. That can be what responsibility you give them. It can be how you, you know, what you say in public versus private, when the time you spent hashing out. One of the biggest things Reid did, that frankly helped me adjust at LinkedIn is we spent a lot of time together. I spent a lot of time with them. Also, he was very clear. I would communicate well with him about the decisions I was making and where I was going and how I was thinking. He would correct me when we were misaligned, but also he did not undermine me.

You know, in public, or if we were working out a different issue, it was always respectful in a bunch of different ways. If we were debating different things or discussing it. When you do creative brainstorming or improv or these other things, you learn, you know, positive ways to build on ideas versus negative.

But this all, actually affects the people around you and how you end up developing authority. And it can go both positive and negative ways. I mean, obviously, power transition is a hard problem as it turns out. The best transitions, founder transitions, I think, with leadership, Reid imbued Jeff with a lot of moral authority.

I mean, even when Jeff came on board, for example, Reid actually spent time away from LinkedIn. He wasn't really that away. Could have been reached, but he was very, very good about making sure that people didn't go around Jeff or somehow see Jeff as basically Reid's proxy. No, Jeff was the CEO. Jeff was running the company.

Jeff made those decisions. So I think what Reid was unique in, is that he was the type of founder who actually thought that that was an important problem to solve. I mean, that's the reason you've seen Reid scale the way he has, because he was right. That is an important problem to solve. And it creates durability.

I mean, now, look at the transition that Ryan is now running LinkedIn in. LinkedIn is hitting all sorts of new heights. You know, Ryan was infused with a lot of moral authority. He came on as a director of product. If I remember correctly, while Jeff was CEO, I was in the product org. Ryan over the years was imbued with a lot of authority.

Ryan's not a founder. Out there on day one, neither was Jeff. The tech companies that can do this are amazing. I mean, I don't know what it'd be like if, if Bill was running Microsoft today, but I think it's amazing what Microsoft is doing and actually it has leadership that's made some decisions that historically would have been tough, for the old Microsoft to make. And so I think when you can solve the problem of bringing on new leadership and new energy for a market that's changed and new competitors in a new situation, that is a valuable thing to do. And I realize there's another solution. The solution is have magic founder who can solve all problems.

And as a founder, I'm not against this solution in all cases. I do think it's not as durable or scalable a solution. And I do think that if you are serious about building organizations and products and platforms that will last not just for years, not just to a liquidity event or an IPO, but that will go the distance as being real institutions, you have to solve that problem.

Brett: And most of solving the problem in your experience comes from a desire, genuinely, to solve the problem?

Adam: I've become very big on intentionality and that applies to founders. It implies to investors. It implies, to individuals, just, you know, navigating their own lives and careers. And it actually turns out it applies to personal finance. And in your financial goals, this intentionality, the questions you actually ask yourself, it's the problems you decide to prioritize, and it's even the frame. What problem are you solving? Are you building a company to make money? By the way, they're probably faster ways to make money. And more likely to succeed than trying to build a company. Are you trying to build a product and platform you think adds real value and will change the industry or change, will create value for your customers?

If you are, you, immediately have to embrace that you want that organization to to be doing that, at scale, for a lot of people, more people (is) usually better. And you have to do it for a long period of time. And so I don't know for me, I've always internalized, it's always made sense to think of things from the individual standpoint.

You know, bottoms up, and then also think of them from the top down, and the system that you want to have. And the best solutions actually are coherent between the two. Um, it's not always possible to be coherent between the two, but those are the best systems. And so I think, yeah, you have to ask these questions, leadership questions, strategy, questions, process questions.

And it's not just operating companies. I mean, great venture firms think about what's their role in the industry. Why do they have differentiated value? Why does the world need another venture firm? Why does the world need another restaurant? Any business, any new organization, nonprofits, you know, why there's 1.7-1.8 million nonprofits in the U.S. Why, why do we need another one?

What are we doing? I think these are key leadership questions. I think these are key organizational questions, and I think the best leaders and individuals think about these problems, and are intentional ones they solve. But it does vary. Like I said, there's a lot of businesses that get built because now is the time to build this business.

It won't be a good opportunity years from now and they want to build something valuable And I'm not saying there's anything wrong with that. Maybe it is coming from the engineering side. For me, you realize that the value you're building when you build software, you build a product, you build technology.

it usually isn't just a scratch you need to itch today. Although I've written those scripts, they're pretty messy and, they're nothing I would show off. But like, sometimes you write software just to solve a problem right now, but most companies are built off this idea of building an organization that's going to last. And that means you have to think about leadership transition. You have to think about culture. You have to think about the organization. You have to think about how this organization is going to adapt to a changing world and changing people in it. 

Brett: What are some of the things that you're constantly teaching the people that you work with or frameworks that is part of like indoctrinating people into some of the things that you've figured out or the way the world works that maybe we didn't talk about?

Adam: The two most common frameworks I get is just, at its core, what, what do product leaders do? What do product managers do? And the second is how do you prioritize product features. Hey seem to be evergreen problems that I would have thought we had solved by now, but it turns out we have not. 

Brett: Why haven't we solved it? 

Adam: I think that is part of our endless appetite to say, maybe we can do things better. But I also think it's because, not everyone thinks about systems. So a lot of great talented product leaders solve these problems for themselves and for their organizations. But then it, it ends there. And so you have a loose kind of, it's almost like oral tradition. It gets spread because someone worked for someone who worked for someone. Also I do think the product role is new and because software is changing and the business has changed, there's always this question, does this role still make sense? I joke sometimes that I think the product role constantly is actually being destroyed. And then it re-emerges and evolves because inevitably engineering says, hey, Judy, you like those business people, they're driving us crazy. They're coming at us with a hundred different things, can you just talk to all of them, organize the list and figure out, like, based on our priorities, like what we should be doing next.

Thank you. Judy, please go do that. Or vice versa. The salespeople end up going like, listen, Jill, you have an engineering degree, you hang out with them, like, they won't do anything we asked them to do. But I also think that, people don't always think about these things in terms of frameworks for me, the basic product role, it was, when I went to eBay, it was the first place I held a product role (at a) web company. I was surprised there was incredible process.

But there was very little structure of like, what are you supposed to be doing every day other than running this process? And I thought there had to be more to it, right? There's this product role. And so these ideas that there were three things and they were a stack. And if you weren't seated in them, what do product managers do?

The lowest level is execution. There's a project, there's a feature high quality job. In the end, you're accountable for the success of that feature, not how you built it, not all the individual decisions, like you're not point on the design per se, or the technical decisions per se, or the businesses per se.

But in the end, that feature had a goal. Did it hit its goal? You're going to be held accountable for that at the end. And you're going to be there the entire step of the way to make sure that the team always keeps that in mind and is optimizing to actually have a product that hits that goal. Above that there's prioritization.

We could be doing a lot of things. How do we decide which ones to do? And in what order, what are we doing next. Product has responsibility for lining up the roadmap. What we think it is. It can always change, but what do we think we're doing? First, second, third. And then above that, there's the strategy, which is what we talked about earlier.

And if you don't have a strategy, you don't agree what game you're playing and how to keep score, you get endless fights about prioritization, which inevitably gets in the way of execution. So that's a stack strategy, prioritization, execution. Now, when I talk about prioritization, this is going to be the most contentious area because it turns out a lot of product leaders have different ways of thinking about this problem, but for me, it's a very pragmatic response to my experience and a mapping from other worlds where this happens . Somewhere about halfway into my career and product, I decided that the emperor had no clothes. And that this dream that every engineer has. I've had this dream. It was sad to let go of it, but everyone has this dream that we could just make a list of ideas one-through-N, draw a line based on how much time and resource we have. And then we'll do those in order That one list ordered. Everyone dreams of it. What I discovered is that process optimized really well for metrics. And actually, most businesses are based on metrics. There is I don't care if you're a startup, a giant company, anything in between, there is a reason your team and your initiative is being funded. There's a reason why you have resources in the first place. Running a process like that linear process is great for optimizing for those metrics.

And there are teams who just do that all day long, especially on the revenue side. There's a bunch of places where they just run metrics oriented, but it turns out if you build products that way, they end up missing a few things. They lead to organizations that are not very responsive to their customers.

Because customer requests come in and it turns out customers don't care about your problem, which is what your metrics mostly are. They care about their problem. They're not experts in technology and design, et cetera. They don't know what's possible. So they come at you with all this stuff.

So it turns out metrics oriented organizations very often don't do a good job implementing customer requests because they rarely get prioritized high in that framework. And what happens is if companies don't listen to their customers regularly, they tend to form an adversarial relationship with their customers.

You get less and less trust. Sometimes open warfare can break out. And I saw some of this happen at eBay when I was there, went from a company that all their customers loved on the boards, et cetera...

Brett: Or you had power sellers that revolted

Adam: Yeah, there was more and more contention there, and I just, and so I became convinced at eBay that actually there was a flaw in the single system that you had to have two cues.

You might spend most of your time, three quarters of your time on metrics movers, what I called them, but you had to spend at least a quarter of your time on customer requests. You can prioritize them, but every month, every quarter, every year, you should know what your top customer requests are and have come out with something to address them. 

Brett: On the metrics mover, is that done like on an expected value basis, the ranking? 

Adam: It depends what metric you're optimizing for and different teams optimize for different things. Like I said, there's, there's a tree, but yeah, it can be. Actually eBay worked very much, they had an incredibly detailed financial spreadsheet that literally every feature we built went into a spreadsheet with a 3-year, kind of NPV based, that even built in eBay's cost of capital. I mean, it was like an MBA consulting dream. So, I went into LinkedIn in with that belief that you had to have those two buckets, that one one bucket wasn't enough. You had to have a separate bucket for customer requests. So metrics, movers, primary and customer requests.

And I made all the product managers actually specify on their features they were working on, which ones were metric movers and which ones were customer.

Brett: And did you have times where they were highly overlapping or most of the time they actually weren't?

Adam: Oh, it's so rare. There are exceptions, right? Because actually some great product insight comes from customer requests and they'll report to you the problem. Your team comes up with a solution and sometimes you go, oh, if they want that... I mean, some of the best features at Daffy, my current company, all based on customer requests and interpreting them and figuring out how they fit into our strategy.

But then I discovered at LinkedIn that even if you have a queue for metrics, movers and customer requests, that's insufficient because you'll end up building a product that does move the metrics. Teams will do that. And your customers will like you, but they won't love you. You won't have this irrational attachment from them.

And as I dug into that problem, I went back to actually my earlier Apple experience and this framing. It's now become very fashionable to talk about the 'delight'. Everyone talks about delight. No one defines it the same way. 

But one of the great things about the Apple experience is that Apple has a core belief at some level, almost genetic memory, that delight isn't rational. 

And a lot of it comes from surprise. Actually, Tim Cook gave an interview once with

Kara Swisher. I remember this. Kara was bugging him about, what do you release next? I think everyone's talking about the TV at the time. I don't know if they're talking about the car or whatever. And she just said he of course gave the classic Apple answer, which is like we don't talk about things we haven't released yet. She was like, why are you doing that? You have fans, they want to support you.

You can get feedback. Why don't you just give them something? Marvel says what movies are coming out. Like, you can. And Tim gave a very good I think it was a great Apple answer, which is that at Apple, we believe that our customers value surprise. And there's something very deep in that.

This idea that sometimes you want to believe, you want to believe that there's a team of people, great engineers, great designers who know what technology can do, and they're going to come up with solutions that, I wouldn't come up with myself. But once you see it, you can't unsee it. It can be small, can be very clever, can be very big, innovative, but just something great. And that delight really stems from that combination of surprise. And then, wow, that narrative being rewarded. And so what I realized is that the queues for metric movers and customer requests wasn't enough.

You have to keep a separate queue for delight features because delight features rarely move the metrics and by definition, delight features are surprising. And so they don't, they tend to not come in as customer requests, because if it comes to customer requests, it's probably not that surprising. And the hardest thing about delight features is you can never really predict when you're going to have that inspired moment.

And so you almost have to keep a list of them when those inspirations come, like, wouldn't it be cool? Oh, that's great. I saw this in this game, etc. You have this list. But if you don't spend time periodically delighting your customer, they'll use you. You'll move your numbers. They'll like you. They won't love you.

And the problem is, in a competitive market, you will lose to a competitor that does. This is why everyone hates competing with Apple on a bunch of fronts. It's so frustrating. Apple sometimes rolls out products that, metrics, the features, the feeds and speeds, aren't necessarily as good as this other product.

And maybe it costs twice as much. It's probably in the DRAM prices. It's always where they shop a lot. But, somehow Apple ends up selling a lot and by the way, makes more profits doing it. And you're just like, this is why people hate competing with Apple in certain markets, and certain products.

But it turns out, and Apple, by the way, does not always delight their customers. I'm sorry. There is still nothing delightful about me recharging that, that mouse, but it turns out regularly Apple does. And it turns out if you delight your customers, even, a couple times a year, you reward that narrative, they'll love your product, they'll love your company, they'll like being someone who discovered your product first.

They will tell other people about your product. And so, like a lot of frameworks in the industry, I end up in the 70/20/10 kind of place where I say, look, spend most of your time on metrics movers, carve out at least twenty percent of your time for customer requests, but ten percent, five-to-ten percent, you have a list of these delight features, go do it.

If you're running an agile process, you're doing sprints every week. There's 13 sprints in a quarter. You can't do the light features on one sprint a quarter? You can't spend a couple of sprints on customer requests? You can, if you're doing a waterfall process, you have a bigger release cycle.

That's okay. Just make sure if you have 10 features in a release. I want to know which one of those are metrics movers, which ones are customer requests, which ones are delight features. And the reason I really feel strongly about this is I've watched people do this. And what happens is if you don't make it explicit, if you don't make it intentional, inevitably the process will start cutting out things.

I've seen features get cut that were the only reason to justify the project. There was like all these features and only one was going to move the metrics and the team ended up going like, that one's no fun. Our user research didn't say that that one was necessary. Like don't do that one. And then all of a sudden they launch the feature and it doesn't move any metrics and they don't get to build the 2.0 or the 3.0. The team's not funded. They're like, why did that happen? You cut the only metrics mover. Like I said, the foibles with customer requests and that relationship I talked about earlier. And then with delight, like I said, it's very hard to prioritize delight.

. 

Brett: I want to hear the last couple of delight features you shipped.

Adam: We've had a few, that, weren't necessarily to move the metrics, but we actually thought were just core that people said like, well, oh, that's right. I can't unsee this. some of them are so obvious from other sectors, but you're the first one bringing it in. This may not sound like a delight feature, but, on Daffy, Daffy is the donor advised fund for you.

We're a platform for helping people put money aside for charity. They put it aside, it grows tax free, and then anytime you want to give to any legal charity in the U. S., you can. Just right from your phone. You know, it turns out most donor advised funds today, they're like banking products. Maybe you have a joint account, but if you talk to most people, they think giving is something they want to instil in their family.

It's something they do with their siblings, something with their parents, something with their children, sometimes grandchildren, like giving is one of the true multiplayer activities that happens with money and personal finance. And yet no one has a family plan. And so for our first anniversary, we said, we're gonna do it.

We're gonna do the family plan. We put it out there. So now on Daffy, you can add your children, your siblings, et cetera, and we model it and you're saying, like, well, how's that delightful? Everything has a family plan. Netflix has a family plan. Microsoft has an, Xbox has a family plan. Apple has a family plan.

I get so many requests. Teenagers, the Amazon links, request for purchase. Amazon has a family plan. Why is an existing given? It's because all the existing incumbents come from financial services. There's no family plan bank account. They didn't make a family plan donor advice fund. And so we did a push to do that.

It was part of the strategy differentiation, etc. But the delight people have, and once they say that we have a family, I find that it's one of the things people talk about. That's not a growth feature. Our pattern for growth was it's not a revenue drive. But it's one of those things when people go into that, they're like, that's right.

Why don't any of them have a family plan? Another one we did, last year got written up in the New York Times. So, you know, has some credibility. It turns out one of the things we've seen at Daffy is that there's all these different cultures out there that have different traditions around giving.

But giving is fairly universal. Almost every culture, country, you name it, has some tradition that says life isn't purely selfish. You should spend some time and effort and resource helping others less fortunate than yourself. And so we learned a lot, but it turned out we had a lot of early users at Daffy that were in the Jewish community.

And so we did a simple delight feature. So now, it only took my co-founder a few days to implement. But now it turns out, when you go on Daffy, if you go to a Jewish charity, it actually says, hey! it turns out 18 is a lucky number in Jewish tradition. It means life, 'chai' is the word that means life. It's traditional to given increments of 18.

And we put little buttons there. 18, 180, 1800. And when you hit them, all these rainbows effects happen. And it's, fun. I mean, if Robin Hood can make it fun to buy a stock or crypto, we can make it fun to give right? And bang, bang, bang. People do, and we encourage it. Just a delight feature. And when I say delight, it's because actually, you know, it turned out in the Jewish community, if you were Jewish, you saw this and you said, oh, someone cares. And if you're not Jewish, you're like, and you're going to give to a Jewish charity, it's like, oh, this is useful. I didn't know that. I want to give the right amount. It worked both ways. And it was one of those things that just seemed obvious.

Now it turned out ironically, actually, I'm going to undermine my entire thesis here a little bit, because I'm going to say, like, the reason I written up in the New York times is it turned out that one little feature, actually moved our median donation to Jewish charities by 80 percent. It increased it.

That median donation went from $100 to $180. Why? Well, I can't help myself. Growth history. Turns out the button in the middle matters a lot in 18 180 1800.

Brett: But when you were shipping the feature, did you think about that?

Adam: Only to the extent that I've been around the block long enough where I can't help if I'm going to give the user a set of choices, I'm going to put some thought into what those choices...

But I didn't set out to move that metric and neither did Alejandro, right? Like we didn't set out there. What we did is we set out to delight the community and it came from a complaint.

We had a user because we are early in the Jewish community who said, your minimum donation is $20. We were super proud of this because most donor advised funds, the minimum, they were like $250 donation, $100 donation. And that's because most existing donor advised funds are really products optimized for the wealthy.

And Daffy is meant to be for everyone, right? So, donor advised fund for you. And so we were so proud of this $20 minimum. I don't even think we're out like six weeks when this happens, we get a complaint. I'm using Daffy, but I can't use it. Your minimum is $20. I want to give 18. Save 10%? No, no, no.

18's is a lucky number. And so that actually is, I think, how all these things work together. You could have looked at that and said, oh, think of this from a metric standpoint. That's not going to go so well because you're looking for growth. You're looking for numbers, lowering the minimum donation side doesn't feel like it's going to increase anything material.

It doesn't seem like the highest priority. Customer requests? Yeah, but like, that's one customer. The delight frame says, wait, wait, wait, all these donor advice funds, all these financial products, they seem to be ignoring the humanity of what's going on. They're just, once again, acting like it's dollars and cents.

What if we differentiate by actually caring about these different traditions? And what if we build them into the product? So it was our first experiment that way. But no, we didn't set out to move the median donation, but I do think that's the way the product process comes together.

And it was rewarding to see that it actually did some good. And I, I do think that there's some truth to that. You're building products and services for people. If you, understand who you're building for, and what they're doing and you really ask the question, why does it add value to the system, right, overall? Sometimes you can surprise and end up with these things. But yeah, that process, each company I've been at LinkedIn, Wealthfront, Dropbox, eBay, you know, obviously Daffy now. You can find these examples, and they almost always come from a little bit of inspired insight, right? A conversation with a customer got you thinking about a problem.

You use another product over here that solves a problem in different way. It's a form of interdisciplinary way, kind of innovation. and the biggest mistake, I know you probably see this too. Like when you're writing and thinking, et cetera, if you don't have a notepad to write these things down, these ideas come in, they leave.

You know, having a process where when you keep an eye out for those, the delight insights, you write them down and then the moment comes. You know, for us, it just turned out to be with, around our anniversary. We rolled it out. I like the intentionality of it, I think that's just the design side coming out, in product. You have to have some place for just doing those type of amazing things. And that bar of surprising, your customer, surprising your user and such. I mean, we all know early days of Slack. There were so many little delight features in the way that worked that did not by themselves move any metric and no customer requested them per se. But they just had a culture, where they rewarded that. No one said, don't build that, that's a waste of time. 

Give a little space. You got to give a little space for the creative process. 

Brett: Good place to end. Thanks for a great conversation.

Adam: Of course.