CS183c Assignment #3

The last few weeks we heard from several excellent guests, including Selina Tobaccowala from Survey Monkey, Patrick Collison from Stripe, Nirav Tolia from Nextdoor, Shishir Mehrotra from Google, and Elizabeth Holmes from Theranos. The topic of discussion was scaling beyond the tribe phase to the Village/City phases of a company.

My favorite among these was the session with Patrick (video), which I found to be rich with interesting points and mental models. In what follows I will try to do a brain dump of some of these ideas in my own words.

On organizational structure (~20min mark)

I found Patrick’s slight resentment of new organizational structure ideas refreshing and amusing. We hear a lot about disruption, thinking from first principles, being contrarian, etc. Patrick was trying to make the point that the mean organizational structure of a company that we’ve converged on (e.g. hierarchies etc.), and the way things are done is actually quite alright. That in fact we know a lot about how to organize groups of people towards a common goal, and that one must resist the temptation to be too clever with it. He also conceded that a lot of things have changed over the last several years (especially with respect to technology), but made the point that human psychology has in comparison stayed nearly constant, which means we can more confidently draw on past knowledge in these areas.

This part was quite amusing because I felt like Patrick was being contrarian by defending the standard.

On hiring (~28 min mark)

Several interesting points — first, it has become meaningless to regurgitate the fact that hiring is very important. What that actually means when you want to translate it to a statement with actual bits of information, Patrick argues, is to rephrase it as “you have to be very very persistent” in recruiting the best people, and willing to to do it very slowly over time (e.g. they took 6 months to hire 2 employees early on).

Another interesting analogy was in thinking of good people as airship carriers. Your job during hiring is to find them and steer them towards a direction, as opposed to thinking about it the other way around, where you try to find people aligned with your direction first and then build them up over time. The argument is in favor of the former order of precedence.

The last point that resonated with me strongly was the realization that it is incorrect to think about hiring on an individual basis. When you’re hiring a person you’re in fact hiring an entire cone of people in expectation, because good people in an area attract more good people like them, dramatically reducing the barrier for another similar hire.

Company communication

I also really liked the idea that as the company grows more, the communication channels should tend toward writing more than talking. The comparison to the printing press was interesting, and the notion that what made writing so powerful was not only the dissemination, but also the concreteness and rigidity of written text. The fact that writing encourages the full serialization a concept, much more than a speech. The idea that you can point to paragraph 2, sentence 5 and say “no, that’s wrong”.

The misc

The entire conversation was peppered with interesting mental models for thinking about different facets of companies: The idea that an optimal 1-year plan can be very distinct from the optimal 5-year plan. The idea of Stripe as a blob in a philosophical space, and that different people within the organization are in different angles/distances with respect to its center of mass, and have to be actively pulled towards it. The 3 jobs of a CEO. etcetc.

Misc misc

There were also several other interesting insights from the other guests, which I will dump here in an unsorted form.

The SurveyMonkey back story was fun to hear about — a great example of an organically rapidly growing company with huge profit margins. Also, an example of a company that may seem not too exciting until you think about it more. Selina also made the interesting observation that some people have preferences towards particular stages of the company, and that some might not scale, or not be willing to scale, up.

Nirav described a very nice example of doing things that don’t scale with the early days of Nextdoor. They attracted only 170 neighborhoods in their first year, by hand. Nirav also mentioned an interesting concept of a “treadmill company” - a metaphor for a company where you can’t easily step back and enjoy the view — it requires constant struggle and active involvement. Finally, in terms of extracting value from customers without explicitly charging them Nirav mentioned two modes of operation: the demand fulfillment model (e.g. Google) and demand generation model (e.g. Facebook).

Shishir brought up an interesting idea called the “tombstone test”, as a way of determining how to spend your time. In short, if you can’t imagine something being on your tombstone then it is not worth working on. Hm!

That’s it! The insights I like the most are the ones that point out mental models that distill a situation to something that preserves most of its core dynamics, but is easier to think about. This distillation process cleans an idea, strips it from the irrelevant and preserves the core nugget of insight. The last few weeks were quite rich!