Episode 20

After leading product & growth teams at Instacart, Wealthfront & LinkedIn, Elliot Shmukler is tackling zero to one as founder & CEO of Anomalo

Today’s episode is with Elliot Shmukler, founder and CEO of Anomalo. Before starting Anomalo, Elliot was a top product and growth leader at Instacart, Wealthfront, LinkedIn, and eBay. He shares his biggest lessons from transitioning from exec to CEO, how to keep office politics at bay, tips to smoothing out a direct report’s rougher edges, and his frameworks for picking companies to join by thinking like a poker player.

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Elliot Shmukler: [00:00:00] Picking a great company is a huge benefit to you and in your career, the difference between picking the next hundred billion dollar company versus the next 10 billion company is massive. And of course, financially, because most people get in these firms, but also in terms of other, but also in terms of how other people will see you, as you think about your next opportunity, your next job, they are much more likely to hire someone who's been in a more successful place.

Everything else being equal because they just feel like you've learned more about what a really successful company looks

Brett Berson: [00:00:48] welcome to in depth, a new show that surfaces tactical advice, founders and startup leaders need to grow their teams. Their companies and themselves. I'm Brett Berson, a partner at first round, and we're a venture capital firm that helps startups, like notion, roadblocks, Uber, and square tackle company building firsts through over 400 interviews on the review.

We've shared standout company, building advice, the kind that comes from those willing to skip the talking points and go deeper into not just what to do, but how to do it with our new podcast. In-depth you can listen into these deeper conversations every single week. Learn more and subscribe today@firstround.com

today's numbers it's with Elliot Muchler, founder and CEO of anomala, which is a platform that validates and documents. All of your data. Elliot founded anomala after a storied career, as a product and growth leader at some of the most interesting companies around. Most recently he was Instacart's chief growth, officer driving fast and profitable growth in geographic expansion.

His jam packed resume also includes stops at wealth front as the VP of product and growth and as a product leader at LinkedIn and eBay. So in today's conversation, we pull on threads from his newest role as a founder of a startup going zero to one, including his biggest surprises in the transition from executive to CEO.

We also touch on how he prioritizes his time at a startup still in the earliest stages of company building and how to avoid wasting your time on prospects that are not all that interested in actually buying. Then next, we turn our attention to his history of picking incredible companies to work for.

From the questions he asks as a candidate, to the decision-making frameworks, he borrows from his poker playing. Finally, we end with his biggest lessons from the best CEOs he's worked with, including habits that set the best communicators apart from the pack and the tactics for keeping office politics at bay.

So the best ideas are able to surface. All sorts of folks will find something worthwhile in today's conversation, whether you're a founder still in the early phases of customer discovery in executive with long-term goals of starting your own company or someone earlier in their career that wants to get better at spotting the next unicorn.

I really hope you enjoy this episode. And now my conversation was with Elliot, Elliot. Thank you so much for joining us out. Thanks for 

Elliot Shmukler: [00:03:26] having me Brett. 

Brett Berson: [00:03:27] So I thought where we could start is talking a little bit about this transition from being an operating exact for the last 10 years to starting something literally from scratch and particularly starting something in what might be considered hardcore B2B versus a lot of your experience, which is a little bit more consumer oriented, at least your most recent operating experience.

And so I'm curious, what's been surprising about that transition and maybe what are some of the insights that you've picked up in the last couple years of building zero to 

Elliot Shmukler: [00:04:02] one? Yeah, absolutely. I mean, one thing that's been surprising is actually how similar the work is. I expected it to be quite different, but in terms of my day to day running a small startup versus being an executive at a unicorn company, it's pretty similar.

You know, the number one thing you have to do is manage your time. Figure out what you're going to focus on right now. You're letting lots of fires burn as they say, right? Because you can't get to absolutely everything. And of course in a startup, things are more uncertain. You don't know if things are going to work out, you don't know where your company's going to go.

So there's an extra level of uncertainty, but day-to-day, you're kind of doing a very similar thing. You're managing your time and you're prioritizing and you're trying to work on the most important things 

Brett Berson: [00:04:49] first. Are there any things you've had to unlearn to be effective and successful in the founder CEO role versus operating?

Elliot Shmukler: [00:04:57] Yeah. I mean a few, I don't know, unlearn, but probably had to go to, to the ways I worked when I was earlier in my career in a large company, you can count on data more. You can count on experiments. You can count on. Doing research and getting to an answer. And I've counted on that for many years in my career in a small startup.

There's an element of that, that you can do. You can go talk to customers and you can do research about your competitors and so on and so forth, but you're actually making a lot more gut calls. If you will calls on kind of your read or your instinct or your intuition about the market and where things are going.

And so that's different. It's actually a little closer to how I worked earlier in my career before I discovered the benefits of data and experimentation and all those other techniques, but it sort of forced me to go back to that time. And that mode of thinking, 

Brett Berson: [00:05:53] is there an example or a story that comes to mind over the last year that 

Elliot Shmukler: [00:05:56] illustrates that?

Yeah, absolutely. So, so the first product we launched, how my current company anomaly was this very heavily machine learning. Based products. And we thought it was amazing, right? And every time we demo the product, folks said, oh, this is, this is like magic. Right. I want this. Right. And of course that got us excited.

But what we saw when we got it deployed, you know, there was some early engagement, but then folks stopped really using it, stop relying on it. We were still convinced that the product was magic. Right. And everyone kept telling that to us, that it was doing amazing things, but we kind of saw that it might be doing amazing things, but it may not be things that people care about day to day.

And so I kind of had to pay heed to that feeling and say, we should do something else. Right. I know it's working and we're getting new customers and the new installs every day. But I don't, I don't think it's going to work longterm. And so that caused us to really pivot the product quite a bit. You have a different product now, and it's still great.

Right. But it. Solve slightly different problems for, for slightly different people in a, in a different way. And now we're getting something completely different in terms of what we're seeing with customers. Did you 

Brett Berson: [00:07:11] go from point a to point B very organically through conversation? Or what was the insider step function to move 

Elliot Shmukler: [00:07:18] from point a to point B?

Yeah. Yeah. It was organically through conversation. I like to keep things very open with the teams. So when I felt that we weren't moving in the right direction, I sort of described that feeling to the team. And we talked through some possible alternative directions that we've heard, but once the team is armed with these alternative directions, they kept their ear out for what they were hearing from customers.

And they could tell very quickly, which way. Folks were pushing us now that they were attuned to those ideas and those possible directions, and that kind of evolves into a new direction. And then some things that are hard and some things were easy. So it was definitely sort of an evolutionary process rather than a big shift.

But the end result of course, is a big shift and a product that's doing much better. 

Brett Berson: [00:08:07] Going back to something you mentioned a couple of minutes ago, the similarities between building this company zero to one, then operating at scale. One of the big ones was managing your time, figuring out what to focus on.

What have you learned about that? Going zero to one, or if you were to go teach a founder, here's ways to think about how to effectively manage your time, or maybe here's some gotchas or traps. What comes to mind in 

Elliot Shmukler: [00:08:31] that area? The big gotchas, I think, is that there's endless demand on your time from every corner, your team folks, externally your lawyers.

What have you. An endless demand on your time. And so there are going to be many things that are actually easy to do, easy to say yes to, but are not that important. Probably one of the best things you can do is just avoid those things. If it's not important, even though it's easy and it, maybe it gets someone off your back, don't spend time on it, spend time on the important things and be very crisp about that.

And you can tell people that I tell people that all the time saying, look, I know you, you want me to do this thing? That's not the most important thing right now. Here's what I see as the most important things. So that's probably the biggest gotcha that I've seen, but that's true in any situation, I think, where you really have to manage your time.

Well, and 

Brett Berson: [00:09:26] so figuring out what the most important thing is, is that just intuitive for you? Or is there a process or a way that you hold yourself accountable to 

Elliot Shmukler: [00:09:37] that? Well, I think a lot of that. For startups, at least a lot of that playbook, because known if you're a pre-product market fit company, you have to get to product market fit.

And so what are the signals of product market fit for your type of business? How can you make progress toward those signals, which ideas, which initiatives, which undertakings will take you closer to product market fit versus just keeping you where you are, versus just keeping things going without progress.

And so you have to be aware of that. You have to constantly be asking, well, what does product market fit look like for our type of company and what are the best steps we have right now to get us there. And some of it is intuitive. You have to estimate the impact of certain things. And for our company kind of a SAS business, we have to estimate, well, which customer.

Is most likely to close in the next few weeks and get us to that higher revenue level. So there's some intuition there that you have to use, but fundamentally, you're always trying to see that next step and figure out which small steps get you closer to it. So for you, 

Brett Berson: [00:10:48] if I were to look at the last three months and say, Hey, Elliot, what were you focused on and why?

And then obviously everything else you'd tried to avoid. What's 

Elliot Shmukler: [00:10:56] the answer there. So last few months we've been focused on getting to our first 10 enterprise customers that really love our product and our kind of longterm satisfied customers. And so that meant working with customers, right? That can be on that list.

Of course, that meant talking to prospects that we'd be excited to work with as a customer. And that meant. Doing work on the product that the customers we hope to put into that 10 customer group doing work on the product based on their feedback, their requirement, and everything else has fallen by the wayside.

The risk of, of maybe having my lawyers call me, I haven't worried about the company's taxes or filings with the government. I haven't worried that much about anything else aside from getting to that set of initial customers that love us. 

Brett Berson: [00:11:51] So using that as, as a little bit of a pivot point, this whole process of early building, choosing customers, what customers to work with market downmarket self-serve top-down selling is a bit under explored.

What are your current thinking or thoughts about that early process of the path to get 10 or 20 customers that love it, choosing those customers, not becoming a consultancy, kind of all these different little things that people talk 

Elliot Shmukler: [00:12:18] about. Yeah, yeah, no, you're absolutely right. Not a process that a lot of people talk about.

And in fact, we've gotten conflicting advice on every element and every aspect of it I've come to a few realizations that I could share. One is if you can launch a bottom up product today, that folks will just adopt as individual employees of companies. And eventually you can sell to that company as an enterprise.

If your product fits that mold, if it's simple enough, easy to use and hits a need that kind of individuals have inside companies, you should do that. That method of launching our product, I think is superior to every other method that I've seen around me. But you should also be aware that not every product will fit that mold some products don't deliver value.

If an individual employee inside a company adopts them, they need the whole team, or they need the whole organization. And some products are complex. They're difficult to simplify, might take years to simplify them enough to make them into something that can be truly self-service. And so there, you might have some ways of getting a basic version of itself self service or, or generating leads through some sort of self service capability, but you should be thinking more about more traditional top down enterprise sales.

Brett Berson: [00:13:45] Why are you so biased that if you can, in some fashion go bombs 

Elliot Shmukler: [00:13:49] up at superior, a few reasons. One, you just get a lot of data and learnings upfront when you have that bottom of launch. If you're doing top-down sales and you know, we went through this with our original product, you might have positive signals from a customer for many months.

Before you realize that you're not going to make that sale because enterprise sales cycles, top-down sales cycles are long months. And so it's actually quite difficult to learn very quickly in a top-down process, you have to kind of learn slowly or you have to get pretty lucky in your first few customers that your first few customers give you the right advice, give you the right feedback, generate enough revenue for your business to sustain the company until you can do the kinds of learnings you need to do.

So it's actually very hard to learn quickly. Whereas in a bottom-up product, you can learn very, very quickly. You can get traffic to it immediately. You can see if people convert. If they don't convert, you can survey them. You can talk to them. You can have an onboarding process for them, whatever you want to do.

And usually in these bottom of scenarios, decisions are made quickly because they're at the level of the individual. And so that speeds up your sales cycle essentially, and speeds up your learning. So you're able to refine the product and get to the right product much faster. Think about 

Brett Berson: [00:15:14] the process of selling more top down, where there things that you've picked up in terms of knowing if the sale is actually going to convert or did it always sort of surprise you in one way or the other and, or are there other things you've learned in that founder led get your first few customers go about it?

The first chapter 

Elliot Shmukler: [00:15:32] of the company, two things surprise me in the top-down process. One is usually people are pretty nice to you. It's a startup. If you're trying to sell to them, if they agree to that first meeting, usually they're going to be pretty nice. I sort of expected. More people to turn us down and to ignore us, Hey, you know, and to ghost us, so to speak if they didn't want the product.

And that really didn't happen. We got in contact with them. When we had a meeting, usually they pretty nice, even if they didn't want to buy the product that surprise one surprise to a lot of folks will say yes to all kinds of things, just to experiment and to learn even when they don't have a big need for your product, it doesn't take them that much to try something out or to have you set it up for them in a trial.

And so they'll say yes quite often, because they just want to see what it's like. They just want to learn about it. It's fun. It is important to sort of qualify who you're talking to and whether they're exploring your product, just because they like to learn about new products. Are they're exploring your product because they actually have this pain point that you're trying to solve and they're looking for something to buy.

And so that took me a little while to learn because I thought, well, if they say yes to trying it, they must be serious. No, not so much. Not always. So 

Brett Berson: [00:16:53] how did you, you evolve if I were to listen to you talking to a potential prospect, once this was really crystallized for you, how do you make the most of that time so that you can potentially reduce the tire 

Elliot Shmukler: [00:17:03] kicking?

We spend a lot more time now trying to learn about their situation and their problem. So if you get on one of our sales zooms, now the whole first section is us asking them the prospect questions about, well, what technologies are you using right now? What problems do you have? Do you have an in-house solution that tries to address the same problem as our product?

Have you looked at anything else? So we ask a whole barrage of questions and usually you can tell from that, you know, are they serious? Our product is a data monitoring product, right? We monitor your data for data quality. And so we can usually tell in that conversation, if they're even serious about using their data, a lot of companies, we talk to, they kind of want to use their data.

They believe data will be important to them, but they're not yet that serious about using it, which likely means that they don't need our product. That's been a big change. And we now spend a lot of time learning about the prospect upfront rather than talking about our product. What are the 

Brett Berson: [00:18:02] insights that you've accumulated across kind of any part of building the business and two, two and a half years that were big ah-has or unlocks, you talked a little bit about the go to market motion and refactoring the product.

I would assume as one category, but in any facet of the way that you run the company, build product hire, are there ahas or depth functions are unlocked? 

Elliot Shmukler: [00:18:23] I don't know if these are on the logs, but these are definitely things that have worked well and perhaps even better than I expected. So in terms of hiring the early team, I think I have, and the company I've been very fortunate that we could hire people.

We know primarily people we've worked with before. So a hundred percent of our team right now are people we've worked with before at a previous company. And so that has worked out quite well because. We take very little risk in terms of those hires. We know what they can do, what they can't do, where they need help and what they can be completely trusted to do.

That's made us move faster and I realize not everyone has the opportunity to do that, but if you have a network or in relationships that can allow you to primarily hire people you've worked with before, who you already know, that's going to speed up the team building, and that's going to make your team more effective over time.

And then on the technology front, we've had a lot of very specific technical learnings and product learning. So one funny thing we learned is that a lot of companies collect data that they don't really care to look at. They're just collecting it for the future and our product that's meant to monitor your data.

Originally, went monitor everything. And we of course learned that that was silly because folks just don't care about everything that they're collecting these days. They care about some very specific things. So that's changed our product. We've also learned that, and we sort of knew this coming in, but we've learned that the pull of the cloud and the pool of cloud technologies is very strong.

Every company is moving to kind of the leading cloud technologies now. So even if they're not there yet. So if you just align yourself with that wave in terms of how your product works and the technologies that you depend on, you're going to do 

Brett Berson: [00:20:14] well, the first point about hiring people that you've worked with, is there anything about the people that you're pulling in that are thriving at a small company?

Is there anything unique about those people or if someone was great when you were at LinkedIn or great, when you were Instacart. You'd love to work with them and hire them. Now, 

Elliot Shmukler: [00:20:36] I think the one thing I would say, and this was an intentional choice on our part, and it's worked out as we tried to pull in people that are fairly well-rounded.

And let me explain that sometimes in large companies, you get specialists that can do one thing really well, but that's, that's really the only thing they do. And we've kind of intentionally pulled in not only people that were strong at their thing at the large company, but had many other strengths because in startups you get to wear all kinds of hats and you never know what you're going to be asked to do today.

So as a specific example, our engineering manager right now with someone who is very strong as an engineering manager at a previous company, but I knew that he could also talk to customers. You could bring him to an enterprise sale. And he would do well and he would represent the company well, and he would be a good salesperson in that context, despite being an engineering manager, that's pretty handy, right?

Because in a startup when you're just getting started, well, everyone's going to have to talk to customers. Everyone's really going to have to be a part of the sale. And so we did try to bring in folks that had these multiple skills and multiple strengths. 

Brett Berson: [00:21:49] This might be a good point to go a little bit more down the hiring and people route you've obviously done a ton of hiring across different companies at different scales.

What sort of the frameworks that you rely on, or maybe the practices or your kind of worldview on finding exceptional people maybe before other people identify them as 

Elliot Shmukler: [00:22:10] accepted. So I definitely maybe have an unusual view where I primarily believe startups attract a lot of folks that may not fit with the traditional.

Large company career path. And that usually means they have some rough edges. They usually means they have some real weaknesses or things they need to work on, because if you could just rise in a traditional career path rise in a large company, many people would because that's pretty safe path to build your career.

So I kind of like to identify folks that have a very, very strong strength in some area and ignore their rough edges and believe that we can smooth over those rough edges over time as we work together or that I can compensate for those rough edges with other members of the team or myself. And so the folks that I've most enjoyed hiring and that have had the most kind of unexpected success, if you will, inside some of the organizations that I've been into in.

Have been these folks that are a little, a little awkward, a little rough maybe, or don't perfectly fit in, have some rough edges, but are also brilliant in one or more dimensions. And if you can look past the rough edges to their brilliance and make sure they're in a role that takes advantage of the brilliance that they bring and that you work with them to smooth over some of these rough edges, they're going to be very successful.

Brett Berson: [00:23:43] As an example, can you give an example of what rough edges might look like? And what's your internal process for figuring out if it's a rough edge that can be managed or developed or made less significant versus what I would define as a fatal? 

Elliot Shmukler: [00:23:58] Yeah, for sure. So during my time at Instacart, as I was ramping up to my role and I was, you know, leading growth in product, I found someone in one of the operations teams that had suggested a really interesting growth idea.

To the executive leadership of the company. It's a story I heard. I heard that someone from this team had suggested an interesting idea and didn't get very far, the executive team didn't think that idea was good, rejected that idea. And so I went out and I found this person and I talked to them about their idea because you know, someone who generates a growth idea and is passionate enough about it to go to the executive team, many levels up in the organization and present this idea and try to get it funded.

That's kind of an element of brilliance. That's someone who's very passionate about their ideas. That's someone that probably really believes in the value of good ideas and maybe even had a good idea. So I went to track down that person and I talked to him and he explained his idea to me. And I realized that it was actually a great idea.

You know, he had made some mistakes in his analysis, but fundamentally he was doing the right thing. But it took me about an hour to get to the details, the communication skills. Weren't really there to kind of summarize it and boil it down to sort of an executive audience. And so that's a great example because communication skills it's very often the barrier is very often where a lot of these rough edges come from and that's completely learnable.

You can practice, you can script what you're going to say. You can write it down and have someone edit it. If your struggle is something like communicating or presenting, that's something that there are many, many, many different ways of working on and firming up. And it's pretty easy to teach folks how to communicate well.

Versus it's pretty hard to teach them how to generate great growth ideas. And so. This worked out fantastically. Well, I moved this person to my team. We worked on communications and presentations and I edited what they were going to say and their documents. And eventually they actually became a leader for a big area of Instacart, a product leader.

And so it was a great success story, but it wouldn't have happened if folks just focused on sort of the rough edges rather than what was behind them. 

Brett Berson: [00:26:22] Are there other classic areas of rough edges that you see time and time again, that you find most people would look at an overlook, but because you have so much pattern matching.

You get it. So one is the sort of communicating ideas and in a particular way, or yeah, 

Elliot Shmukler: [00:26:38] yeah. Communicating is a huge area. The other one that I would say I'm struggling for the right word for this one, it's sort of being defensive or isolationists, right. Or not being cooperative, I guess, is a better way of putting it.

Lots of folks, especially lots of folks that have great ideas, focus it on themselves and their idea. And they don't realize, and perhaps this is communication too. They don't realize that the way they get their idea executed, the way that they become successful is by convincing others or by working with others to implement their idea.

And sometimes that means you have to make compromises and cooperate and build relationships. So that's another rough edge, which is believing that. You should be working by yourself in a corner. And that's the path to success rather than realizing that the more relationships you build and the more you compromise with folks throughout the organization, the more success you're going to find in having your ideas, he let a day 

Brett Berson: [00:27:38] examples of where you thought something was a rough edge that could be filed or fixed.

And it ultimately wasn't and you had to let the person go. 

Elliot Shmukler: [00:27:45] Many, many, one thing that's very hard to fix is a sense of urgency, right? Or at least in my experience, if someone has great ideas and is a smart person, but they don't seem to care about moving very quickly to get things done. At least when it's required, I've found that to be very, very difficult to fix.

And in fact, I don't think I've ever been able to fix it because in startups and even in big companies, speed does matter. And speed matters in certain cases more than it does in others. And if someone's sort of perpetually not interested in moving quickly and that's going to be a problem, how do you interview 

Brett Berson: [00:28:23] for a 

Elliot Shmukler: [00:28:23] sense of urgency?

So the best way is to just have people talk about other projects that they've been on and go into a lot of detail and provide a timeline. How long did it take to write the spec for this product feature? How long did it take to get the design done? What was the time between this idea and when the feature came out and some of it is beyond their control and in some organization, they're kind of set schedules for these things, which may be, are difficult to move, but a lot of it is within their control because you can always find sort of ways of accelerating if you care to do that.

So I found that to be the best way. 

Brett Berson: [00:29:02] On the sort of theme of interviewing, are there other things outside of maybe very specific specialized skills that you're looking for that run across all the ways that the times that you interview? So you sit down with someone maybe in this case, virtual layer before in person, and like how you use that time, what you're looking for, how you structure 

Elliot Shmukler: [00:29:21] it.

So I'm a huge fan of doing exercises, whether it's written outside the interview process or inside the interview and having everyone do the same exercise. And I don't mean by the way, a brain teaser or something abstract, I mean, doing an exercise that's related to the job at hand. So I still remember when I was at LinkedIn, I was interviewing product managers all day long or hiring lots of people.

And while I was on the interview team for most product managers, And I would literally give everyone the same product exercise. I'd give them a page. I draw it on the whiteboard. Right. I don't know how you do that through zoom now, but I drew it on the whiteboard and I say, okay, these are the issues with this page.

Can you solve them for me? And how would you go about doing that? That is literally a product project, but they would have to do maybe not that page specifically on a different page or a different product area, but that's literally the job of a product manager to take a look at a product and understand the issues and problems and the barriers and solve them.

And so I literally had everyone do that exercise, which allowed me to compare, which allowed me to see, well, what is a great answer? It look like. Versus an average answer versus a poor answer. Sometimes it put me in quite a bit of conflict with folks that would have other interview styles that would have a more chatty interview.

Tell me about yourself fried or those kinds of things. And that would react more to the presence of the other person rather than their execution of, of the job necessarily. But I am a huge believer in doing those kinds of standard exercises, cases, problem solving sessions, whatever you call them and making them as realistic as possible so that you can see how someone will actually do on the job.


Brett Berson: [00:31:13] there other examples of these types of exercises you can share or what makes a good exercise or practical versus 

Elliot Shmukler: [00:31:20] a bad one? Yeah. Yeah. There are many other examples. I mean, a good exercise is one that you yourself have struggled later or saw your team solve. So you kind of know. Everything that's possible.

You've thought about it a lot more than someone can, you know, the balance of the problem, but it has to be, it has to be a realistic and it has to be drawn from real work, rather than something more abstract. There are many versions of this product exercise that I've given, all right, solve this product problem.

Or tell me how you would redesign this feature of our product or if somebody else's product. So there are many versions of that, that I've talked people through. Some people do a prioritization exercise as a product exercise to, you know, here's a list of product ideas for our product. Can you work with me to prioritize them?

Right? Which again is exactly what a product manager does. Day-to-day and so you can see how they would approach it right there in the interview. I really love, but engineering interviews do these days where they will often do a coding exercise, not on the whiteboard, but on an actual computer. You get a computer, what a development environment and a problem.

And some resources and help you solve as you would on the job, but all the tools that you have available on the job, those are some examples that I've seen work quite 

Brett Berson: [00:32:41] well. If we zoom out a little bit more, when you close your eyes and think about the three or five people that you've worked with that were most extraordinary.

Are there any threads that tie them all together or behaviors or things that they all did? 

Elliot Shmukler: [00:32:57] Yeah, for sure. I think a few, you know, one, they were all great communicators. It's pretty hard to get far or to be very successful without being a great communicator. They all could talk to all kinds of people. It could be persuasive, could present arguments and counterarguments and be very effective, both with preparation and on the spot in our conversation.

Number two, I would say they were all sort of external thinkers. Right. And let me explain that they didn't just focus on issues inside the building to borrow a phrase from Steve blank. They very much focused on what was happening external to the organization. What were other companies doing? What were customers saying I had, and they integrated that perspective.

What was going on internally to kind of bring best practices from the outside in is needed to bring feedback from the outside in. And that's rare. Then you would think it's very easy to focus on your team and the internal thinking that you're doing and the internal problems you're solving, not have that perspective.

And third, they were all first principles, thinkers, right? Where they tried to solve problems by going to the basics and understanding, well, why is it this way? What is going on here? Can we understand the root cause? Can we understand the principles at play? That's also a pretty important approach if you're going to be successful.

I think 

Brett Berson: [00:34:26] the first bucket of great communication related to your earlier point that you find that that is at times one of the rough edges, you most commonly see if somebody comes to you or, I mean, it sounds like you've done this many times and said, Elliott, I want to become a better communicator. I've gotten feedback that it's a weakness.

What do you do? How do you grow in that area? 

Elliot Shmukler: [00:34:46] I think you grow through practice. So having done this before, what I usually like to do is I usually like to set up an opportunity to practice. So if someone comes to me and says, I'm not sure I'm communicating well with the executive team or with this other person, hi, have them schedule something where they're forced to do that.

Maybe a few weeks away. And then we work together on what are they going to say? What are the slides going to be? What are the major points? What data are they going to bring with them? Emily, go through those iterations, knowing that there's a, you know, a goal. Right. We're preparing for a meeting. We're preparing for a conversation.

We're not just working on something abstract. And so we're able to go through a few revisions and practices and then they're able to have that meeting or that conversation. And then we can debrief afterwards and keep going, set up something, set up the next conversation needed, or set up another opportunity to shoot for and practice again.

At the sort of higher 

Brett Berson: [00:35:45] level, what do you think? Great communication, at least kind of in a company setting looks like or sounds 

Elliot Shmukler: [00:35:51] like. I think a few elements. I mean, one, it just has to be logical and clear. If you make a statement, it has to be backed up by an understanding. It has to be backed up by data or has to be backed up by evidence or has to be backed up by something other folks in the room already know or are aware of to, you need to have a narrative sequence.

If you want to make 10 points, you want to arrange them in some order. That makes sense where people will be able to understand how you're moving from point to point to point. Maybe it's the order in which you came up with those points. Maybe it's some other logical structure for how they should be ordered, that should be arranged and presented in an appropriate order.

And three, I think you have to understand your audience and understand what they care about and kind of frame the things you're trying to say in terms of the things that are important to them. If you're meeting with the CEO and the CEO's number one goal is to increase the revenue at the company. Then you better be talking about, or ideally are talking about something that can be framed as leading to an increase in revenue for the company.

And that's something people miss, they don't always know what the audience cares most about. And so they'll suggest something that's in a completely different area that no one's really going to be receptive to. So 

Brett Berson: [00:37:14] we've been talking about your process of interviewing. I'm curious to flip it on the inverse and you've sort of obviously interviewed a company throughout your career.

And done an exceptional job with picking just in the last 10 years you picked LinkedIn, you picked Wealthfront, you picked Instacart before starting up. So what's been your framework for those decisions. Do you think it's quite a different decision in all of those cases? You're at some version of a eater or executive versus earlier on at eBay or something else where you were more PMI, C type role.

Is there a difference in picking based on those two things or once your process for making great decisions, because you obviously have, have a knack for 

Elliot Shmukler: [00:37:56] doing, oh, thank you. Thank you. I mean, some of it is definitely luck and being in the right place at the right time. But my process is to treat the decision as an investor.

I am going to be investing my time in this company rather than investing my money as a venture capitalist, Mike and my time is pretty valuable. Right. Everyone's time is pretty valuable and you don't have an infinite amount and you might only have, you know, 15, 20 years of a Silicon valley career. And so I try to approach as an investor and say, is this a good investment of my time?

And some of that has to do with, is the company a good investment, right? Is the company four years from now going to be a much bigger, a much more successful companies that on that track. And some of it is isn't an investment in terms of the right kinds of learning or experiences for my future career is my next step going to be more amazing because I spent time here because I learned things where I got to show off my strengths in a very powerful way.

So that's roughly how I approach it. Uh, skills part, and strengths part, and experience part is something you can evaluate based on the role and based on who you're going to be working with and what your job is, but assessing the company. And assessing whether the company is going to be a breakout.

Success is something you really have to spend time on. And very few people do. I actually, when I joined Instacart or was considering joining Instacart, I asked the CEO Apoorva to show me, uh, the company's board deck, because I wanted to see what the investors were seeing, how they were judging the company.

He led me through it. We went into his office and he gave me a board presentation. And that allowed me to really understand, well, what is the company doing well? What is it not doing well? What are some investor concerns? What are some things the investors are thrilled about? It gave me a lot of information to be able to say, here's what I believe will happen to the company in the future.

And a little known fact that everyone should realize is picking a great company is a huge benefit to you and you in your career. The difference between picking. The next hundred billion dollar company versus the next $10 billion company versus $1 billion company or less is mass on so many levels, of course, financially, because most people will get equity in these firms.

But also in terms of other benefits also in terms of how other people will see you, as you think about your next opportunity, your next job, they are much more likely to hire someone who's been in the more successful place, everything else being equal, because they just feel like you've learned more about what a really successful company looks like.

And then your network is so much better at these larger companies. If only because you know, many more people think about one of the biggest jobs for new executives is always to recruit to their team. Well, if you happen to be at a hundred billion dollar company in your prior job, you probably know many, many, many, many more people that you can recruit than someone who's been at a $1 billion company.

And so there's a lot, a lot of impact to your career and thinking well, and so you really should spend some time and understanding, well, what's going to make this company successful. How would an investor think about this company and think about its prospects 

Brett Berson: [00:41:26] couldn't agree more. And I think this is the most under when people think about job search, they talk about important things like culture and a bunch of other things, but they don't think about it as a venture capitalist with one portfolio company.

And so I think that that lenses is incredibly useful. I guess when you're, I want to talk about more junior roles where you're not most likely going to have access to the board deck, but in the case of a more senior role, and I assumed you looked at Instacart and there were other companies, and I assume you did the same thing.

What are you looking for with your kind of talent investor hat on. That gives you confidence that accompany has the chance of being an outlier in terms of their success. 

Elliot Shmukler: [00:42:05] You know, lots of different things, but some of the same things you'll hear from investors, right? Size of the market, hard to define, but is this a product that's niche or is it a product that everyone will use, right?

Every company or every consumer, if it's a consumer product. So size of the market is important. Execution is the company moving? What a sense of urgency are they growing really quickly? You know, momentum are they growing very quickly, already companies that grow very quickly are very likely to continue growing, uh, very quickly.

That's a great one to look at in terms of where the company will be. In a few years, barriers to entry is a big one is a competitor we're going to come along and slow down growth. A good barrier to entry, which I saw play out directly with LinkedIn is network effects. If you're the largest professional social network, I assure you no one can come along and really mess with your, what your growth trajectory.

It's very, very difficult. So you want to be looking for what is the company doing that will prevent others from coming in and taking apart of this market? I don't mean prevent in a multiplistic way, but I mean, prevent in a, it's going to make it very difficult for others to do it. The other one that I liked that it perhaps is an unusual, is kind of revenue, resilience, or revenue quality is how I would put it.

So ultimately, every company you join, no matter what it's doing right now, Will be evaluated on it's revenue and profitability. And so you want to make sure that the revenue that the company is taking in is of high quality, meaning that it will last, it will still be there in a few years. If a company is selling something that people will buy once and will never buy again, that company could still have very high revenue for extended periods of time, but that's not high quality revenue.

So you should be looking for companies where there's a consistent stream of purchases of the company's product. Like SAS companies are a good example where there are these subscription models that review annually, but also consumer businesses like Instacart or even LinkedIn subscriptions, where folks are actively paying for using the product for a long, long time, because they want it.

They're not just paying once and leaving the product. The other thing that I really like is multiple revenue streams, which again, you know, in late stage companies, you can find these situations where the company has multiple different ways of generating revenue. And that's something I've picked up from my poker playing days, which is your probability of winning a hand, always depends on having multiple ways to win.

The more ways you have to win the higher your probability as a winning. And I think it's very similar when you think about a company's revenue or prospects for revenue, the more ways the company has to grow revenue, because it has multiple different streams of it. The more likely it is to achieve its goal.

You were talking 

Brett Berson: [00:45:10] about earlier, rough edges with potential hires. Do you have a similar framework in terms of rough edges with companies where other execs that are interviewing might say this isn't, there's this issue I shouldn't join, but you've actually found that there are rough edges and companies that you should ignore as well.

Elliot Shmukler: [00:45:27] For sure. So I'll give you a great example. When I was joining LinkedIn, a lot of people said, well, you really shouldn't go there. I mean, I'm a member of LinkedIn, but I never use it. And that was kind of a common sentiment at the time. And I'm sure even today, many people share that sentiment. And I sort of went behind that and said, well, how is it possible that no one ever uses it, get the company is doing so well.

And it turned out that LinkedIn was kind of a classic. I don't know if you'd call it a power law type product, where there was a fraction of folks that were incredibly active users of the product. And that was enough. To make it very, very successful. And once I got into the company, turns out there was a name for these people.

We knew who they were and all that. Those are some of the things that you want to look through and you want to kind of apply first principles, thinking about them as an example, a lot of folks in Twitter's early days used to say, well, there's no way Twitter is going to make any money. Of course, Twitter is making a lot of money right now.

And so you want to ignore the naysayers or at least see if the naysayers are right or wrong by talking to the company about those issues and how they view it. In Instacart's case. For example, a lot of the naysayers said, well, the company will never make any money. It's very difficult to deliver groceries.

You know, you have to pay people. There's not a lot of profit. And so I spent quite a bit of time talking to the CFO at the time during my interview process, asking him the question, will the company make money? And of course he said, well, Here's where we are making money and here's where we're not, but here's what we can do.

And you can see this and this and this. And so that allowed me to kind of really understand the problem from first principles and in multiple dimensions to sort of understand whether the naysayers were right. What are the 

Brett Berson: [00:47:21] other things? If I were to watch how you interviewed in the past questions you asked, you talked about taking all the concerns, you know, maybe external critics, your own analysis, and sort of really taking those questions to the company.

You talked about going over board deck material and answering these different internal questions for you around how the company's growing moat, et cetera. Are there other things that you do that have been useful, or maybe you're a little bit different in that process of getting to your own internal conviction?

Elliot Shmukler: [00:47:50] I mean, one of the things I try to do, and this was very much a learning from multiple processes is I try to ask my questions in a situational way rather than a generic way. So for example, a generic question might be. Tell me about the company's culture. That's an invitation for whoever answers that question to just provide a pretty filtered view or provide an aspirational view of the culture, because the question is not very specific, a more specific question could be, tell me about a recent decision that you've made.

That was very challenging. Decision-making is a pretty key part of company culture. And now that you're asking about a specific decision, you can really dig in and understand, well, is this a company where the CEO makes all the decisions and doesn't listen to anyone, or is this a company where that was a collaborative decision or is this a company where it was a bottoms up decision where whoever, you know, came up with the idea could run with it in some limited way.

Those are very, very different things in very, very different cultures. And I don't think you would have been able to unpack them by just asking about the culture. You really have to put people in this situation and say, Hey, you're making a big decision or you just made a big decision. How did it go down?


Brett Berson: [00:49:09] there any other little ideas you have for maybe more junior folks? I think what's great about what you just shared is that regardless of how senior you are, when you're interviewing, if you're a level 1:00 PM, you can be asking questions in that way, but if you're interviewing for non-executive, you know, you're taking your second PM job, or is there any sort of coaching or advice you would give to that person and how they make that decision?

What they ask for how they compare different companies 

Elliot Shmukler: [00:49:35] would be a fun one. But think about all the ways in which you learn, how the company works when you actually start a job. So if you think about a standard, so Cavalli companies, how do you learn about the company's priorities after you start a job?

Well, you probably get an email from the CEO or you go to an all hands meeting, right? Where the priorities are discussed or your boss shares them with you. How do you learn about the company's decision making process? Well, you might suggest an idea and experienced the decision-making process. So what I would ask, even as someone going into an IC role is to have my interviewers, give me parts of those experiences.

It's okay to ask. Hey, uh, how was the last all hands? What did you talk about? Right. That's going to give you some sliver of information about what the company's priorities are, what the company talks about when they meet as a team, it's not as good as getting the board deck, right. But it'll still get you quite far ask the people you're interviewing with about their challenges day to day.

Where's the hardest thing you've done here and have them talk about a complicated decision process or complicated culture issue. What keeps you up at night is a, is a pretty common question, right? These are all kind of meant to be questions that. Are hard to gloss over. You have to get into some details, or if people don't get into those details, you can ask follow-up questions from that jumping off point.

So it's actually amazing how much you can learn. If you just try to ask these detailed questions and try to have folks walk you through their day or their experience at the company, in terms of making decisions and getting products launched and talking as a group about their priorities, they will give you a lot of information and that's something you can use to make the right decision going on 

Brett Berson: [00:51:32] a little bit of an offshoot here you've worked with what sort of, I assume are three quite different CEOs in the last 10 years, lacrosse, LinkedIn Wealthfront, Instacart, I would assume particularly sort of a poor VA and then Andy at wealth front.

But I'm curious what you learned about what being a great CEO looks like, and maybe for the different folks that you've worked maybe most closely. Are there specific things or ideas they taught you or you took from those different experiences over the last three chapters of your book? 

Elliot Shmukler: [00:52:04] I think the truth is all CEOs are quite different, at least in startup world because they come from different backgrounds, very often the founders or CEOs.

And so their background is the background of a founder, which tends to be eclectic rather than the background of kind of a groomed large company CEO. So everyone brings something very different. I think probably the most impactful CEO on me was actually Jeff Wiener at LinkedIn and Jeff. Was reinforcing some of the points I made earlier, it was just a master communicator.

He could communicate everything he could cut through bullshit. He could really make it clear how he was thinking what he was thinking about, how he was approaching the problem first from first principles. And that allowed him to navigate many complex decisions. It also allowed them to build a lot of trust.

You could be confident that if you brought an idea to Jeff or you had a concern that he would look at it in a rational way from first principles, and he would tell you how he was thinking about it wouldn't necessarily mean that you got your way. Very often. I did not. When I brought my ideas to Jeff, but I always left that conversation, knowing that he gave me a fair hearing and he thought about it and he had a good reason, a good rational reason.

To go a different way. And so that is our rarity, I think, among CEOs and certainly with others, I've worked with, sometimes they could communicate in that way. Sometimes they could show you what they were thinking, but very often they wouldn't very often they'd make a decision without explaining it or without helping you understand their process.

Right. And sometimes they'd make one decision in the morning and then reverse it by the afternoon. And you didn't really know why that was happening. And of course that's very disorienting. So that's an amazing thing. Jeff was also great at using data to make decisions. And he was probably one of the first leaders I've met that really treated data as a core part.

Of his decision-making and of course I had already been doing that, but I just, hadn't seen a lot of folks in positions senior to me act in that way, but he was doing it. And that's also not as common, a lot of founders CEOs, for example, because the early stages of a company are much more about instinct and gut feel.

They don't recognize the point later in the company's evolution data should be a key part of their decision-making. They kind of continue to rely on what worked before. That's also been one of the differences that I've seen, 

Brett Berson: [00:54:47] anything else that really stands out, or that informs the way that you're operating or behaving as a CEO 

Elliot Shmukler: [00:54:55] dimension that you always see that's very different is how do CEOs treat the others on their team and Silicon valley and not just the folks I worked with, but the kind of larger set of CEOs, he would run into quite a number of people where.

And they kind of view themselves as the CEO is the most important person inside the company that don't treat the rest of the team as equals as peers as near peers, if you will. And that's a pretty big difference in how you experience the company when you're in it. And it's much more enjoyable to be in a place where, or the CEO, isn't just thinking of themselves as the most important person or they're thinking of everyone in the, and they're able to connect with everyone inside the company and have a relationship with them.

And so that's something I definitely try to take away from the better CEOs I've seen, which is to focus on the team, to trust the team with their ideas, to talk very openly with them about what's on my mind and to have a peer like relationship with them, rather than being sort of ensconced in a corner somewhere, trying to make all the decisions.

Brett Berson: [00:56:06] One of the last areas I thought would be interesting to chat about is a little bit about executive teams, which is kind of an offshoot of this, which I'm sure you've seen well-functioning and dysfunctional. So you sort of got at this in what you were just sharing with the CEO dynamic. It would apply with anyone in the company, but I think a CEO spends a vast majority of their time with their executive team.

It's kind of like a mini company within a company. One might think about it. And so what are the maybe habits or rituals that you you've seen that tend to lead to well-functioning executive teams? What are the problems that you see come up time and time again? And one of the things that I've noticed is that to get going and you get to some level of product market fit, it feels like 70% of your time is all about getting the right executives, developing the right executives, managing the executive team.

The company is actually much smaller than one would imagine it, at least in the eyes of most. CEOs. So curious, just sort of what comes to mind in this area? 

Elliot Shmukler: [00:57:02] Lots of things. Well, let me start maybe with what some of the pitfalls of working with executive teams that I've seen, some, the bad decisions I've seen that lessen the effectiveness of these executive teams.

So one thing is just allowing politics in the organization, and I've seen this quite a bit executives or our senior employees they've been around. They know how to use political tools, relationships, lobbying, to achieve what they want to achieve. And so the best CEOs and the best teams just stop that in their tracks.

The fact that you had coffee with the CEO shouldn't influence the CEO's decision that afternoon, that decision should be made based on data argument or in an open setting, in a setting where there's discussion among the rest of the team. And so. As a CEO, and as a member of the team, you have to be really mindful of that.

As a CEO, you have to nip that politicking in the bud. And if someone comes to you with an idea and tries to lobby you for an idea, have them take it to a bigger meeting of the team. And as an executive team member, you just have to watch out for those things. Who's trying to use politics. And how can you make sure that that doesn't get out of hand and that the best decisions still get made.

So you have to have an awareness of those political tools and who's trying to wheel them. The other one that I've seen, uh, to your point, Brett, but how much work it is to manage the executive team. I've seen a lot of CEOs that just give up. I am trying to build relationships with every executive team.

There's just so much demand on their time that they choose maybe a subset of the team to build strong relationships with and kind of let everyone else do whatever they need to do. And as an executive team member, you might like that. You might feel that you're empowered the CEO. Isn't looking over your shoulder, you can do your thing, but it's actually a recipe for disaster because if you're disconnected from the CEO or disconnected from other members of the team, you're going to run into trouble.

You're going to make decisions that are misaligned, what everyone else and that's going to cause conflict and issues down the road. So critical things for CEOs and executive team members to be aware of is make sure there's a strong relationship between the CEO and each executive team member and make sure that decisions are made.

As a team or at least decisions that impact the company broadly are actually made as a team where all the perspectives could be laid out on the table. And the decisions made in that room because otherwise you're just opening yourself up to politics and backstabbing and all those kinds of things on this 

Brett Berson: [00:59:44] first part of the idea that you were sharing.

Are there other things to reduce politics other than being vigilant? I'm fascinated by politics because there's a whole category of things that no one likes, but most people deal with. Nobody says everything's going great. There's never been more politics in a company than there is here. Everything's fantastic.

And yet, you know, a company gets to a certain size and it tends to happen. And so is there a set of rituals or behaviors or is it just you'd have to spot it? And 

Elliot Shmukler: [01:00:13] look for it. I think you have to spot it and look for it and deal with it. There are people that I've seen try to hire a political people, right.

I try to kind of select for executive team members that are less likely to be political. And so that may be an approach to try, but in all honesty, politics is just natural human behavior. I think it's very difficult to stomp it out. And so you kind of have to watch for it and notice it and curtail it in the moment.

And eventually as it keeps getting curtailed, it will be attempted less and less. So I think that's all you can do. How do you define politics? Yeah. So I'm going to surely going to borrow a definition of, from thing was Ben Horowitz and one of his books, he said, politics is achieving an end without it necessarily being the best idea or without a merit-based process.

So politics is, I lobbied the CEO for this idea and. He agreed with me and said yes, rather than it was a first principles discussion about the best idea to pursue. 

Brett Berson: [01:01:20] And that definition you can get into gray areas because you may have had a first principles, point of view, or feel deeply that this is the right thing.

And then be trying to use narrative to convince the CEO or other people. 

Elliot Shmukler: [01:01:33] Yeah, for sure. I don't think there's a bright line, but it's also one of those things where people know it when they see it and I'll give you one, hint, politics is very often done in private. I know we have political institutions that operate publicly like Congress, but politics inside companies is often done in private softened down one-on-one.

And so that's one of the best signs that something is happening when one-on-one conversations have massive impact 

Brett Berson: [01:02:01] sort of flipping back broadly to the executive team. Are there other rituals or practices that you've seen. Tend to be really valuable. It could be your point of view on what makes a great Monday morning staff meeting.

Or you talked a little bit about this in terms of the importance of just the actual relationships, but are there habits or behaviors that you've seen be super, super effective across some of the companies you've worked at? 

Elliot Shmukler: [01:02:24] Yeah, a few. And I'll be honest. I've never seen a great executive team meeting.


Brett Berson: [01:02:34] Goal-setting very fewer people love their gut. It's good. It's better. But nobody's like we have the we've perfected goals. 

Elliot Shmukler: [01:02:41] Yes, yes, yes. But I've seen other meetings that involve executives that have been very effective and those are meetings that have a particular purpose in mind, right. Their strategy discussion, or they're a go no good decision for a new product.

So one thing I would think about is. If you're going to bring a bunch of executives in a room, have a very specific goal. They'll make it a free form. One thing I've been meaning to try with executives and me just generic executive team meetings, which still happen in every company is turning those into educational venues.

Turn those into every executives explains what's going on in their area so that other executives could understand what challenges they're facing and how they can help. So have some goal for that session that maybe is educational or maybe is concrete, but have some purpose that guides you to making good use of that time 

Brett Berson: [01:03:41] to end.

I thought maybe we could just discuss, are there any books, any things you've read that have kind of had an out-sized impact on the way that you think about building companies or teams, or just really left a mark on you? 

Elliot Shmukler: [01:03:54] One of my favorite books, uh, which I don't think a lot of people really read these days is called the 

Brett Berson: [01:04:02] goal the best than I agree.

So can you share what it's all about? It's an amazing different way to approach kind of a business type book, but I'm also curious what you 

Elliot Shmukler: [01:04:11] took from it. Yeah. Yeah. So it's a book about operations, but it's cast in this weird like romance and first at all, biography hate, but it's fundamentally about essentially a factory manager trying to make the operations go more smoothly.

But if you read it, if you read it in detail, you realize. How many of the best elements of management are in there. First principles thinking what is the bottleneck in the factor? What's figure that out using data to make decisions. There's no actual explicit data in the book, but there's high-level data.

That's used to make decisions, understanding the idea of continuous improvement. That's in the book. So recognizing that one of your goals as a manager, as a leader is to just make things better every day, make the next, you know, goal setting process better than the last point to make the next prioritization your product area better than the last one.

And so those are pretty powerful ideas. Yes. That you can apply almost every right. 

Brett Berson: [01:05:09] Well, thank you so much for all of this time, Ellie. This was so wonderful. 

Elliot Shmukler: [01:05:12] Absolutely. Thank you for having me, Brett.