the biggest marker that I've seen between a botched layoff and a successful layoff is at the moment someone hears that they no longer have a job did they hear it from their manager in a one-on-one if that's when they heard it it'll be okay but if they heard it in an email
in a group chat in a any kind of thing that where they were sitting next to her they're hearing it along with other people it wasn't personalized it wasn't one-on-one that is terrible and that's when people get really angry and that's when they start going onto Twitter and going to
newspapers and Etc because it feels dehumanizing feels like I you didn't give a about me you didn't even have the courtesy to tell me to my face and of course there's no way to allow that person to express their emotions because they're in a group so that's the most important thing
welcome to Lenny's podcast I'm Lenny and my aim here is to help you get better at the craft of building and growing products today my guest is Matt mashari Matt is a full-time executive coach but not just any coach he's worked with folks like nabal the CEOs of openai
coinbase Reddit Rippling Fair front notion the list goes on he's also coach Partners at VCS like Sequoia YC Benchmark many others we are so fortunate that Matt agreed to join me on this podcast and in our conversation we cover a lot of ground we talk about why learning to fire people is one of the
most important skills as a leader and how to do it well why anger and fear often point you in exact opposite direction you should be going how to innovate within a larger company how his coaching has evolved over the years where the most successful Founders still
struggle and so much more this may be my new favorite episode and I bet it will be yours too there's so much real talk with tactics templates all kind of goodness enjoy this conversation with Matt ashari this episode is brought to you by assembly AI if you're looking to build
powerful AI powered features in your audio video products then you need to know about assembly AI assembly AI is the API platform for state-of-the-art AI models the thousands of product LED growth companies like Spotify Loom and callrail are using to infuse AI into
their products with simple apis developers and PMs can get access to powerful AI models for transcription summarization and dozens of other tasks that are fast secure and production ready all other models have researched and trained in-house and continuously updated by their team of AI experts
which vert PM makes it easy to build and ship new AI powered features product teams with startups and Enterprises are using assembly AI to automatically transcribe and summarize phone calls and virtual meetings detect topics and podcasts pinpoint when sensitive content
is spoken redact pii from audio videos and way more visit assemblyai.com to try assembly ai's API for free and start testing their models in their no code playground that's assemblyai.com this episode is brought to you by lemon.io you've achieved product Market
fit you're able to activate engage and retain your customers but you don't have the engineers that you need to move as fast as you want to because it's hard to find great Engineers quickly especially if you're trying to protect your Burden rate meet lemon.io lemon.io will quickly
match you with skilled senior developers who are all vetted results oriented and ready to help you grow and all that at competitive rates startups choose 11.io because they offer only handpicked developers with three or more years of experience and strong proven portfolios
only one percent of Canada to apply get in so you can be sure that they offer you only high quality talent and if something ever goes wrong lemon.io offers you a swift replacement so that you're kind of hiring with a warranty learn more just go to lemon.io Lenny and
find your perfect developer or Tech Team in 48 hours or less start the process now you can claim a special discount exclusively for Lenny's podcast listeners fifteen percent off your first four weeks of working with your new software developer grow faster with an extra pair of hands visit
lemon.io Lenny Matt thank you so much for being here welcome to the podcast thanks for having me I'm looking forward to it I am looking forward to even more the way I learned about you is back in the day I read this book called The Great CEO within which I have right here and I was
like holy moly this is the most tactical practical useful book I've seen for leaders I need to tell everyone about it and I did and then a few weeks ago someone shared a link in my newsletter slack Community to this document that is called the mashari method curriculum
document I was like oh my God this is the most practical tactical useful document I've seen in a long time I gotta share this with everyone and I did and then I realized that the same person that wrote these two things and so I reached out to you and you kindly agreed
to join me on this podcast and so again really appreciate you being here thank you for having me two give folks a little bit of background on you who aren't so familiar with you and just to help understand a little bit about how you got so wise can you give folks just
kind of a brief overview of some of the wonderful things you've done in your career maybe some of the folks you've worked with and how you got to what you do now right on so I've had a very varied career I started off I started a company back in Internet 1.0 called totality which was a good Financial
outcome then I went and just had fun for a long time and then I went and did social good and helped ex-convicts get and keep a job by becoming truck drivers and all that was super fun but I realized I missed my peers and I want to get back into the tech world but I didn't want to start a company because
company is a lot of work and and the end result is you make a lot of money but I didn't need money and uh and so I thought how could I get in the tech world but not actually have to do the hard work oh I could be a coach I could coach people and then I just get to do
the fun stuff and advise them and then they have to do the hard work and so I looked around and thought well how can I do that because I'm not a coach and so why would anyone listen to me and then someone told me that there were students at Stanford that had started companies
but they no one would coach them they couldn't get into YC because it's YC doesn't accept students so I went started coaching them and it was super fun and and very successful and then they started recommending me up the food chain and eventually I met folks like
Naval ravikot and Sam Altman and Brian Armstrong and they recommended me around to you know the rest of the tech community and ended up coaching some of the the CEOs and the leaders of the of the biggest tech companies and biggest Tech investment firms and it's been a
ton of fun and I've just uh for me I do things for joy and each and every one of these interactions has been massively joyful for me and and and the people I coach become my really close friends so it's all very that's not my part I I feel you on a lot of that I also tried
to explore starting a company again and similarly decided this is way too much stress and work what else can I do instead and that's what led to the work I do now which I love and great uh how long have you been doing this coaching so that whole process started about 10
years ago so about 10 years awesome so uh you have a lot of fans on Twitter and the internet and ahead of this chat I polled folks on Twitter and asked them what they would ask you if they were chatting with you and so I thought I'd start off with asking a few of those questions and then we'll dig into a few
very specific topics that I'm excited to talk about and the the first question comes from Leo polovitz who's a GP at Zeus Avengers and he asked Matt has coached some incredible Founders what are some of the most common areas where even the most successful Founders still
struggle great question um so to me the sort of the bar is fear and how strongly do people feel fear there are a few people that I coach that just don't feel fear at all and frankly with them we have very tactical conversations but they're the minority the most feel fear to some degree some
feel it a lot some feel it less but when they feel it it grips their mind and it prevents them from seeing Branch from doing the thing that is difficult but necessary and so that's a lot of what our coaching is me pointing out to them hey I think you're in fear
and what happens is very early on in coaching they'll go yeah okay I'm in fear so what I go great I believe that fear is actually giving you bad advice and I think you're you're predicting that if you do this a will happen well I'm predicting if you do that the exact
opposite will happen so I'll tell you what why don't we make a bet why don't we pick something this is very high stakes why don't we pick something that's lower Stakes you make a prediction we'll see if I make the opposite and then let's bet on it so we pick something
and then we make a bet on it and whoever wins the bet in the future gets to determine what the actions are I've made this bet hundreds of times and so far I've never lost and it's not because I'm a magician or a genius it's because when someone's in fear they're gripped they can't see reality
their brain is making very exaggerated predictions whereas when someone is not in fear and I'm not because not my situation I am not gripped and therefore my brain isn't making exaggerated predictions and so we make this bet once I win then all of a sudden the CEO realizes oh my God
there's something to this fear gives bad advice and then after that all I need to do is remind the person that I perceive them to be in fear that's all it takes and I'm like oh okay and then they go ahead and do the thing that they feel fear about and of course
later they come back to me and said Matt that was magical it worked so well and yeah I mean I'll give you examples that the most extreme is when a CEO realizes that there's a problem in the business and they haven't told their board yet and their board doesn't know remember
they're bored as other investors and they have another round coming up they know they're gonna have to raise money another six to 12 months and they need their current investors to participate in the upcoming round otherwise outside investors won't and then they say well what the hell do
I do I've got this problem do I tell my investors and most often the knee-jerk reaction is no I'm not going to tell them and then I say well I think that's fear I think if you actually tell them tell your investors the exact opposite of we think is going to happen is going to
happen you think you're going to lose their trust I think you're going to gain their trust and so if we've done this fear exercise before they do it they shared transparently with their board all the problems and say and I'm excited to tackle these
problems and every single time that's happened the board members have said this is fantastic I love this honesty thank you so much you know this is the one of the only companies that I'm on the board of that actually is transparent and honest and they gain trust I'm glad that you
brought this topic up I wanted to spend time on it and so just to double click a little bit into it just kind of to summarize your advice here if you feel fear which you may not recognize you feel the advice is do the opposite of what your brain is telling you to do
right generally I mean check with someone don't just randomly lose like no fear crossing the street crossing a crowded Highway and then go oh that's fear docking I should cross the highway anyway and then get hit by a car no that's not what I mean I don't mean
physical danger I mean things that we perceive to be danger to our egos but the easiest thing is just to check with somebody else who's not in fear because they will be able to see clearly when you can't I was working through your curriculum and you pointed out that you found a way
to express to somebody that they are in fear I think it was your wife that kind of like iterated on how to give you feedback that you're in fear where you didn't get defensive it like got more fearful and angry and can you talk a bit about that yeah so we we iterated um I at times
feel anger and I act on that anger and I don't even realize I'm an anger so I wanted her to let me know and so she would say At first she said you're an anger and that just made me feel accused and made me go into more anger and then she said are you in anger and that felt
passive aggressive or indirect and that also made me go into more anger and then finally she said I perceive you to be in anger so it's an i statement and it's simply what she's perceiving there's no judgment and that was able to punch through my anger and then I I woke up went oh and
then I stopped and just didn't act until I was able to shift out of anger awesome and anger and fear I think there's different pieces of advice for if you feel angry versus fear is that right yes yes I mean anger you're just destroying and you're what you're doing is
you're destroying relationships and so you just gotta stop because you're breaking glass and of course you're breaking it with the people who are closest to you they're the people who are nearest to you which are the people you love and care about the most they're not only
people you work with but they're the people you live with and you don't want to do that you don't want to no hurt them yeah maybe one last question along these lines Why do we do this is it's just we're trying to protect our our ego and ourselves and we just want to do the same thing that's it
I mean I just learned very recently and this isn't written anywhere because I just learned it someone shared with me that anger is not a base emotion anger is actually a cover it's a cover for when we feel pain and so our brain doesn't want to feel the pain so instead it externalizes it
but the problem is it shoves that pain onto everybody else around us and so the real answer here is not to have people let us know that we're in anger and then stop the real answer is just to allow ourselves to feel the pain and it sucks by the way it actually
hurts but then we're not start getting emotional we're not pushing that out on other people and I only learned this very recently and I'm just starting to practice this and I'm still not good at it but I'm I am now at least sometimes not going to anger it's interesting how
personal this advice is that it sounds like something that you deal with it's not just like you're this coach that's just like hey guys here's all these problems you have here's how you fix like stuff that you you help yourself with I'm human yes and that's why I'm I try to figure
it out with me and if I can figure something out with me that I can share it with others amazing that was a that was a fruitful question from Leo and we might come back to this topic but and by the way this also applies to organizations I mean the way that I used to get all this
information about how to run organizations is I served a company totality and my co-founder and I we did a terrible job running that company and so what I what happened was I didn't have any learnings from that that I could share with people because it was
just worst practices not best practices but then 10 years later I thought to myself well how could I have done that better how could we have done that better so I picked up a book a business book it was high output management by Andy Grove and uh I read it I was like oh my God here are all the answers and
then I read another book the hard thing about hard things but Ben Horowitz is like oh my god there are even more answers just kept reading more and more business books and everyone I read they were just chock full of answers but then I needed to test whether or not these
really work so that's when I started coaching and I started testing them in companies but I had to let the people know here do this but they weren't going to read a 350 page book so I had to summarize it in two pages and then share it with them and then they did and then
they implemented it it worked and so then I had all these summaries and then I started to create my own summaries of like little niche cases that weren't in any book that I'd read and that's where all these writings came from and then one day someone you know that I was
coaching said Matt you got to take all these writings they're a book you got to publish them and I said no I don't and the guys in my friend said well how about I do all the work how about I take care of the editing and the publishing and I was like okay if you want to do
that great that was Alex McCaw others had offered before but he was the one that actually followed through all the way to the end and uh that was it that's how the book was born but I realized also recently that many of my most radical ideas I can't get anyone to test
them because I'll say hey I think you should do blank and the CEO will say that sounds crazy and can you point me to other examples of other people that have done this and it's worked and I say no this is an original thought came out of my head no one's done it before that
I know of they're like okay well I'm not going to be the first so then I realized I needed an organization to test my most radical ideas and also all of my CEOs have been asking me to create software because I have a methodology and it's step one step two step three and you do it in one
of ones and then a methodology for a team meeting and then a methodology for feedback and then a methodology for every different Motion in the company and it's all in Google Docs and they said to me Matt this is amazing I love this one-on-one process I love your team
process but I don't want to have to teach each of my reports the way you've taught me I like it just being software I just hit a button and boom it happens automatically and I at first I said no that's not interesting to me I'm not a developer you know you Brian Armstrong you're a
developer and you have a thousand Engineers that work for you why don't you go create it but in the end I said okay this could be fun so I hired a team of developers and we've started to create the software and and one the product is working but two more importantly I now have a team of humans
that we work together that I can start testing my more radical ideas out with and I would say about half of them are wildly successful and the other have complete Duds almost seems like one or the other but now I have my own basically laboratory to test things and
of course when I see radical things that other people are doing I try them in our organization and uh and it's phenomenal I I'll tell you the most radical one I I was with a I was asking one CEO I said have you ever let someone go and regretted it and he said no
and I said well then you don't know what the bar is because the bar of where you should be letting people go is here and the bar that you've let people go is here so until you get close to that line you don't know what that line is he said wow that's that's true and then
I thought about it and I thought to myself uh oh I've never let anyone go that I regret it so I don't know where the line is so I thought oh no I've got to go into my team and let someone go and here's the problem I've already we've already done Talent density we've already done
the Netflix thing if someone is meeting expectation we let them go we've already let all those folks go so on our team it's only out performers and so I thought there was one guy who's he's an outperformer no question about it and super positive an amazing guy and
can do anything and is happy to do everything but there wasn't much left for him to do because everything else was being covered and so I talked to my number two and say can you do what you're doing and what he's doing and she said give me two weeks and she did and she came back and
said yeah I can't and so we let him go and now would I let someone go I try to do it with a massive amount of compassion because I know it's it's brutal I mean letting losing your your spouse your home and your job these are the three most traumatic things that
can happen to you and when that happens of course you go into massive fear and the brain shuts down and and so I want to be there and help them through that process and help them actively help them find their dream job because there is a place that absolutely needs them
and so what I do is I become their their agent and I say I want to help you discover what it is that your your ideal role is and I want to help you create it or land it and so I did that with him turns out what he wanted to do was go start a company and create a new product
so he could just start that day one but the the litmus for me is is that everybody I've let go I believe anyway that I continue to be friends with so that shows me that the process by which I let people go is a Humane one and here's the crazy thing after letting this guy go after about 30 days I was
like uh did I do the wrong thing was that too much but then after about two to three months I realized no that was actually was the right thing because my number two wasn't able to absorb the things that he was doing and here's the crazy part with fewer people in the
organization things work better that's the big realization that most people never discover so they hit product Market fit they get tons of money from investors not just higher higher higher higher but every additional human you have in your organization causes extra overhead and geometrically
so because now that you have to keep all those people informed give them all context make them all feel heard Because unless they feel like they're contributing and you understand what they're saying then they feel ignored and they feel passed over and they feel
disrespected and grumpy and so there's this morale problem that exists so there's this friction of information flow and a morale problem that grows and grows and grows and really the only answer is I mean that's why people bring me in because they're growing growing growing and
things are breaking so I have a system that keeps things together but it doesn't make it like perfect it just makes it so the company doesn't fall apart but the really the ideal is just to keep the team super small and that's what WhatsApp did that's what Instagram did that's what linear is
doing right now that's what notion has been doing for a while and those to me are the real success stories this reminds me of a story I just listened to on Lex Friedman's podcast they were interviewing the head of AI at Tesla or former head of AI and Lex was asking him
why did you get rid of lidar on your cars like aren't more sensors good so that you can be better at self-driving and he's like if you got a flight or you gotta think about the supply chain and getting all those parts you got to think about all the additional data that it brings and
adds more chaos to your data and it's you have to think about that if you think about if that one part is gone everything slows down and in theory it is better but then all these other factors end up making it worse and talking about how elon's philosophy is the best part is no part
and it feels like exactly what you're saying that's right you're getting to all the stuff I want to talk about which is awesome so so firing a couple this is uh this is good we were chatting earlier and you mentioned that this is a skill that most managers are really bad at and
maybe is the most important skill to develop as a leader and as a manager and people are just bad at it and you shared a few pieces of advice there but is there anything else that you could share about just like how to get better at firing people and that skill
he had a reason people are bad at this is because they think that they're hurting the person who they're letting go I mean how many times have I heard from someone yeah this person's not performing but gosh you know they really need this job and their mother has
cancer and and whatever personal situation they're in and we dang from who is the CEO of clipboard Health who's one of my favorite CEOs who frankly I learned more from her than she learns from me she shared with me her framework for making decisions which is she separates the decision from the
implementation meaning she thinks about who is the stakeholder here that I'm solving for and almost always in a company you're solving for the customer so what would the customer want to see happen that's the decision and of course the customer would want to see only the
best employees and anyone who isn't a great employee don't be there now the implementation is if I do this if I let this person go who gets hurt well the employee gets hurt maybe I get hurt because it's a painful conversation maybe the rest of the team gets hurt
because they're sad that their friend is leaving so then you look at well what can we do what does that each person gets hurt what is it that they really want and let's see if we can help them get what they really want well the person let go what do they want they want a
great job where they're actually needed and they feel fulfilled so they enjoy what they're doing and they're actually critical to the company or organization that they're with and right now they're not by the way they're not critical clearly so you're actually holding them
back from what it is that they really want so what you do is you help them find that place that really needs the skill or the passion that they have yourself what do you really want you want to not have a difficult conversation well cognitive behavior therapy the best way to get over that is
to actually have one and realize it's not that bad and then the rest of the team they feel sad because their teammate left well here's how you solve what they really want is they want to know that they're do they want to release their emotions okay great listen
to them let them share their emotions let them share the sadness that they feel and then it's released out of their body so decision is one thing implementation is completely and utterly separate and that's the same thing here in letting someone go but if you let them go kindly
and humanely act the key is in my opinion you become their agent like a you know like Michael Ovitz a CAA agent you help them find their next job actively Michael Ovitz is the one who reaches out to employers for his clients and says hey do you have worked for my client
that's what I mean by being agent not by hey you know if you need a reference from me I'll give you I'll happy to give you reference that's passive I'm talking about active and it doesn't take long maybe one to two hours of my time reaching out to people I know saying hey I've got this great person oh
my god of course they're going to pay attention of course they're gonna react now you might say well wait a second what if the person isn't great what if they're a bad performer and my posit is that they're good at something you have to find out what it is they're
good at and really what they're good at is what they're passionate about so find out what they're passionate about and that you can recommend them for and that's what I do and I think for almost all managers that aren't good at letting go it's because they a they've never done it
or B they've done it badly and so they didn't help the person and that person then went off and had a very painful time and now hates that manager but if you actively help that person they will appreciate it now there are situations the person says screw you I
don't want your help okay but they still recognize that you offered who's the best person at firing that comes to mind when you think if this person's really good at this we dang from clipboard house she's the most compassionate she's the most yeah awesome the uh the framework you
shared reminds me of some of my manager once taught me similarly it missed the final piece of actually being their identifying in their next gig but just the idea of separate the in the emotion and doing the thing from like if there were no feelings involved what would you
do and then that's right you should do that even though it might be hard that's exactly right and by the way this whole thing about no feelings I do have probably two CEOs that don't feel emotions they don't feel fear they don't feel anger one in particular feels zero emotions
and I have to say he's he's a machine he's an operating machine and he just there's zero time between ah this is the right thing to do and doing it and it's amazing it's an incredibly well-run company and an incredibly valuable company and so yeah emotions typically again
typically fear and anger are the ones that derail our brains makes me think of Alex Honnold I think is his name the uh free Silo dude yeah right he's like amygdala doesn't quite function so he doesn't that's right yeah that's right so that's interesting you
could be a solo free solo climber it could be a CEO that's right CEO's a little safer the prediction for Alex will at some point unfortunately die yeah did you see that Alpine alpinest not too yes yes okay moving on from that I'm curious in a remote world does your advice change on in terms of
firing it seems like everything you shared you could do easily in person or remote but does something change when you're doing it over Zoom no it doesn't doesn't change at all there is one point I didn't include which I'll include now is you know there's helping the person
be their agent but there's also allowing the person whenever I have a difficult conversation I start it off hey this is gonna be a difficult conversation I want you to take a few seconds and prepare yourself you are not going to enjoy this and what I found is is that the the way
the amygdala gets triggered is often because of surprise and so if you give someone just a few seconds to mentally prepare then the amygdala often doesn't get triggered nearly as hard because if they're aware that they're gonna go into fear if they're going to go into anger they're
going to go into sadness they then they can see it coming and they go oh that's what it is but if they don't see it coming just surprise and all of a sudden what it grips their whole brain and now they're in it and they don't even know they're in it so that's the first thing
I do this is going to be a difficult conversation are you ready person says yes then I share the news I'm letting you go here's why then the second so I give him deliver the message the third thing is then I say I I now they're feeling emotions strong ones even though I warned them
they're still feeling it now you want them to be able to release those emotions and so I say to them my guess is you're feeling a lot of anger right now fear sadness is that true and if so would you be willing to share with me what you're feeling and what you're thinking
and sometimes they don't answer but many times they do and they share with me and they let it out and that's important to allow them to let it out and then I make them feel hurt and I actively listen and that makes them realize that I'm not trying to run away from the pain that
they're feeling I'm not trying to leave them alone with it I sit with them as they have it and then I try to help them get through it that's something else I wanted to chat about is the is the feeling heard lesson that you have for people and I'd love to just get your
advice on just how to help people feel hurt it's like oh yeah I know that's important I want people to feel heard I will listen and it'll go great but you have some very tactical advice on how to actually make people feel heard yeah there's sort of a few different levels
of it one is to make people feel heard is it puts it assume they're talking to them because there's another way there's an even more surface ways verbal sometimes what I do is I ask if I'm in a group of people and there's a question or a problem we're trying to solve
instead of going around the room and hearing people's verbal opinions which takes forever I asked everyone at the same time to take five minutes to write down their solution and then we all drop it in Dock and then I just read it and when I read it I say thank you Lenny and that makes
you know that I at least read it so that's a little bit of feeling heard second if I want to make you feel more heard I ask you to say it verbally and then I repeat it back to you like Lenny I think what I heard you say is that right and you're like yes or like no not quite a little bit different and
then if it's a little bit different I repeat it again until you say yes that's it now you know that I understood you and then there's a third way which is even deeper which is especially if you're giving me feedback you likely don't want to hurt my feelings so what
you're doing is you're giving me the feedback but you're couching it you're polishing it you're rounding the edges you're making it softer it's not really what you're thinking but it's what you're willing to say and so if I want to make you really feel heard
I reflect back what I imagine are the thoughts in your head so if I think you're feeling anger I sort of think to myself well what would anger feel like and I cause myself to feel that anger then what are the thoughts that appear to me and I say something to you like
Lenny I think what I'm hearing you say is you're pissed off and you're thinking screw you Matt how dare you you know walk into the office and not even say hello to me is that close you're like you know Matt people either say one of two things you say yeah that is it
or they say no that's stronger than what I was thinking but directionally that's right and what that really means is yeah that's what I was thinking so almost always their thoughts are bigger than their words but they really feel heard when I share their thoughts now that's not the end of
the process I mean you actually have to then do something once you made them feel heard you have to say okay well either I accept or don't accept this feedback and if I accept here's what I'm going to do about it and if I don't accept I need to explain to you why here's what's
going on you shared with me what's going on in your world now let me share with you what's going on in my world and hopefully you can see why this thing is going on in my world doesn't allow me to accept what it is that you shared and hopefully now that you see what's going
on in my world your feedback changes and that's it that's the whole process I'm listening to this advice and I'm like yes I will do this next time I'm talking to someone I imagine people don't and they forget and it takes time to actually learn these things like the firing advice you
just shared like how do you actually get good at this and practice these things is like I have to work with a coach who will continue to reinforce these things as it follow these steps next time like have them written down like what advice do you have for folks that are like I
want to get better at this I want to start doing this stuff well these docs are all you know free to the public in the curriculum you can post them here you can post them on Twitter you can post the whole curriculum on Twitter frankly other people have and so it has
a step by step there's a doc in there that is a step-by-step script and so all you do is you read it you and you follow the script and letting someone go or and making someone feel heard my positives once you do it one time like oh my God that worked so well
that's the only motivation you need and you've got the script so you just keep doing it I don't think you need a coach in fact I remember one time I asked an investor who their their best up and coming CEO was the investor gave me a name I said great can I please get
introduced to him I want to coach him so I reached out the guy responded immediately he's like Matt I've read your book I love your book I read it three years ago I've been implementing all the elements in our company it's fantastic and when someone says that like they know my work they've already
implemented it and it and it's worked 10 out of 10 times that person wants me to coach them and then I said great that's fantastic I'd love to coach you and the guy said to me um no thanks I was shocked I was like why he said well because it's all working
like I don't I don't have any problems I don't think I need to be coached by you and that there I couldn't have heard a better answer that to me is the ultimate answer and he's right he doesn't need me doesn't need anyone I was gonna ask if that's the goal of all of this writing
down and systemizing is just to make yourself unnecessary totally this episode is brought to you by vanta helping you streamline your security compliance to accelerate growth if your business stores any data in the cloud then you've likely been asked or you're going to be asked about your sock 2
compliance sock 2 is a way to prove your company is taking proper security measures to protect customer data and builds trust with customers and partners especially those with serious security requirements also if you want to sell to the Enterprise proving security is
essential stock 2 can either open the door for bigger and better deals or it can put your business on hold if you don't have a sock 2 there's a good chance you won't even get a seat at the table beginning a sock 2 report can be a huge burden especially for startups it's
time consuming tedious and expensive enter Banta over 3 000 fast growing companies use vanta to automate up to 90 of the work involved with sock 2. vanta can get you ready for security audits in weeks instead of months less than a third of the time that it usually takes
for a limited time Lenny's podcast listeners get one thousand dollars off Banta just go to vanta.com Lenny that's v-a-n-t-a.com Lenny to learn more and to claim your discount get started today that actually reminds me of another question uh a reader asked on Twitter who happened to be the one and only Ryan
Hoover and he asked just how is your approach changed in your coaching since you started so Ryan was at obviously started product hunt and then he um he sold the company to Angela so he was part of the angelist when I went there because I was coaching Naval and naval's
what we realized coaching the ball is that Naval did not want to be CEO and he just didn't know how to get out and so I said there's there's a way and I can show you and so I did and uh made Duvall's life you know 10 times better frankly made Angel list 10 times better
because Naval wasn't enjoying being CEO therefore he wasn't good at it and we ended up putting someone in who did a fine job then put someone else in who's doing an insanely good job and of course Angelus is passively valuable and Brian was there at the time Ryan Hoover great
guy I love Ryan and uh so what has changed since then I think what's changed is I don't think back then I had any of this fear and anger the bad advice I think back then it was all very tactical it was all very high output management type stuff which is you need to have goals and at the
company level at the department level the individual level you then need to track those goals you need to track all the agreements that people make all the actions they say they'll do you have to put it all in Asana everyone has to be able to see each other's Asana boards
they can see what each other is doing and I still do that but now I've added on this piece of oh you're in the moment and you're feeling fear okay you still got to go forward that's sort of the big change I noticed that's at the top of the curriculum do
you find that that's where a lot of the biggest Transformations happen that curriculum component absolutely absolutely that's I mean I I cause people when they first start coaching when they they have to read that first they have to they're sort of three seminal documents on time top goal in
fear and anger get that device on time just says hey we're going to start our meetings on time and you're going to show up and if you don't show up about time you're gonna let me know first that's just because I don't want to and by the way I showed up two minutes late for us that's
because I was on the Google hangout for 10 minutes I didn't realize I thought you were oh that's uh I'm trying to fix that bug every time we send an invite there's a Google meet button there I think I cracked it finally yeah that would have been a funny podcast where I'm just
sitting here starting on time and for two minutes hello we're just waiting exactly second one is top goal which um is this concept from McEwen who wrote essentialism which is you have this everyone is making requests of you but if all you do spend all day is responding other people's
requests you never actually March towards your phone priorities so you need to a create priorities and then set aside some amount of time each day 30 minutes an hour two hours that you just work on your own priority and if you do that you'll make massive gains and
that's true I mean I've just so like in five minutes I can change someone's life just by having them follow that practice and then the third one is if you're an aggregate bad advice and that's what I had people read say does this resonate with you if it does we can work together
and if it doesn't we shouldn't work together so yeah that's kind of like the Crux document of whether or not people philosophically are gonna resonate with what I have to share the top goal piece I'm reading a book called make time right now and that's a big part of it I
actually just added top goal to my calendar every day it's not working yet I have not actually every time I get to I'm like no I'm gonna just check Twitter right now but um sorry exactly now what I've done is I'm similar so during my topical time I have somebody sit with me
and they wow prevent me from doing anything but my top goal wait can you talk a bit more about that is this like a co-worker and you're just like I need you here for this hour every day yeah and it's like the same idea as a trainer in a gym a trainer in a gym maybe they're
teaching you a little bit but more often than not they're just forcing you to do the thing that you know you need to do but if they weren't there you would kind of go eh and not do it that's all this is it's what I call an accountability partner there's even an app now where you can go online and you
can sign up I think it costs like five dollars a month you can sign up to have you know meet someone else and you become accountability Partners to each other it's insanely effective and I'm not the only one that has a problem focusing on tasks that I don't love that
are necessary but I don't love like a meeting I could take a meeting I could take 20 meetings off I could take you know 10 hours of meetings no problem especially when I'm the presenter when I'm the that I'm the active one but doing asynchronous tasks for me because I'm so
people oriented that when there isn't another human with me it's painful so I just have another human with me I love that and that person is doing other work I imagine they're not just watching you full time yeah they can do whatever they want yeah is this what you
recommend to leaders and CEOs just like have someone there for an hour wow if that's if your personality is like mine yes have someone there and it can be remote it can be in person it can be it doesn't matter in person is a little bit more effective right there's like a
little zoom in but I have my kids do it they love it I love that there's an app I use called centered that app that I'm an investor in but I just because I use it all the time and they have this buddy feature actually where you can be paired with a buddy in real time yes yes to um close a
loop on the firing piece something I was thinking about what you're talking is well there's a lot of layoffs happening right now when you're letting go of like a thousand people you can't really be their agent unless you've seen that happen do you have any advice for just
like there's a large layoff how you could do this absolutely you can be their agent not you personally but they each have a manager and the manager usually has 12 reports and they're rarely letting go more than 50 at a time so that means six people that they've
got to be the agent of maximum yes each manager can be the agent for six people and my companies have done a lot of layoffs and and here's why the companies that I coach back in March of 2020 there was a chance that the world economy wasn't floating now of course by April and May we
realized that wasn't the case that the tech World kept going in fact was even flourishing but in in March of 2020 we didn't know that and so you needed if you were being fiscally responsible you needed to prepare for that eventuality so you needed pair costs eighty percent
of costs in any tech company is payroll as humans so if you're going to Compare costs you actually have to let go of humans and so almost every one of my companies did some on the low side of five percent some on the high side of one company that was is a hotel company
omelet go 40 because it looks like their business was about to get obliterated and the results were crazy within 60 days of each layoff the CEO reported back to me it's insane I don't know how this happened but the company's now operating better I'm not talking on a relative
scale I'm talking on an absolute scale we're putting out more features more code our NPS is up our whatever it is whatever department is performing better and the only answer for it was we've got less people so it's this coordination issue is reduced so then now in like May June of this
year we had this huge reset evaluations where growth tech stocks you know drop by 50 to 90 value and all of a sudden there's which we're still in and we don't know how long this can last it's all based on interest rates so it's likely that growth stocks will be at
these valuations for until interest rates come back down again which could be two to three years and so these companies now they can go raise money but it's going to be at a big down round and down rounds are very painful and so now these companies have
to make sure that they don't need to raise money in the next three years they've got to conserve cash once again here we are we're in the land of layoffs again but this time it's different this time these CEOs know that the company actually gets better and the CEOs that have never done this
before I simply connect them with the CEOs who have done this before and then they get convinced like oh man my company would be better and now this time people have been even more aggressive we've had companies that have laid off 50 of the company and the results have been frankly
phenomenal but the key to doing it well is there has to be a Humane delivery and the biggest marker that I've seen between a botched Leia and a successful layoff is at the moment someone hears that they no longer have a job did they hear it from their manager in a one-on-one
if that's when they heard it it'll be okay but if they heard it in an email in a group chat in a any kind of thing that where they were sitting next to her they're hearing it along with other people it wasn't personalized it wasn't one-on-one that is terrible and that's when people get
really angry and that's when they start going onto Twitter and going to newspapers and Etc because it feels dehumanizing it feels like uh you didn't give a about me you didn't even have the courtesy to tell me to my face and of course there's no way to allow that person to express
their emotions because they're in a group so that's the most important thing the second thing is then later so tactically this is how it happens you have an inner circle I think that inner circle should include all the managers in the company and you
say this is how much we need to let go here's how much each of you needs to let go so first of all you don't say to each department head or team lead or manager tell me who you can let go because they'll all say nobody so you actually have to give them numbers you have to let this dollar
amount go or this many people go dollar amount is better because if you say people then they'll just let go the most expensive people and I mean the the the cheapest people and so the most Junior and often the most Junior are the ones that are actually doing the most work
so you want it to be dollars because that's actually really what you're trying to say you're trying to save dollars and so you say you have to save this many dollars come up with a number they quickly come back with a number you don't want it at department heads choose
for managers because if you have a team lead and all of a sudden they're told to let go these three people the team lead will go that was crazy those are my three best people so you want to let each manager choose and that doesn't need to take long that could take 48 hours then you move to
implementation at implementation you spend the morning and have each manager reach out to people and just slack and say hey can I talk to you for 15 minutes and then they have these meetings back to back to back or as close as they can and they say they deliver the news the
difficult conversation we talked about before it's going to be a difficult conversation I'm letting you go I imagine this feels crappy and it feels like worse than that that is just horrible are you willing to share it in your feelings and I want to be your agent now I don't have time to do it now
but I'd like to schedule you another hour tomorrow the next day whenever so that we can go and dig in and I can help be raging then that takes the morning by the afternoon you've scheduled in all hands for the stay team with the State team you'd tell them what
just occurred and you answer their questions and the questions are almost always around fear like holy is this gonna happen to me did these people even get feedback that they weren't performing does this mean that we're dying as a company that we're going to implode so you have to address
each one of these questions and hopefully the answer is no to the first one is this gonna happen to me no this isn't we cut deep so that we only cut once the people to your left and right and you you are the State team this is the team that we're going to be building the
company with going forward it's important to be able to say that so you actually want to cut deep because cutting two times or three times creates PTSD in an organization it's trauma one trauma two trauma three now you're like ah it's just gonna keep happening
and then the third piece is and this not everybody does if you don't do this your company within 60 days will be performing better if you do this your company within two weeks will be performing better because people now the State team they feel sadness they feel anger they feel fear
yes you address their questions the All Hands but not fully because some people didn't even talk in the All Hands so what you do is with each and every person on the stay team you have a one-on-one with their manager for one hour and all the manager does is say I'd
like to know your thoughts and feelings and the person shares and then all the manager does is make them feel heard I think what you're telling me is you feel sad because you're you're your three buddies are now no longer here and you feel anger because you think this is and you think that why did we
hire this many people if we're going to fire them and that was just irresponsible and you feel fear because you're not sure if the company's going to upload or if your job is safe is that right and they're like yes it doesn't take away the emotion entirely but it knocks it down by a good
25 which is enough that the person won't do something rash they won't quit they won't stop working they won't say bad to other people and it allows them to accelerate their recovery and within two weeks they're now seeing how the company's operating better and morale
then comes up and the company is now performing better than it was before so three elements that was uh that was thousands of dollars of advice I think in just five to ten minutes and that's after having probably gone through this with CEOs Maybe 40 times and iterating
you know a b testing and what's the difference and what works well and what didn't work well yeah I can't imagine there's someone out there who was advised more people through a layoff process certainly in the tech world that I have I'm not saying I'm proud of
that but it's it just is what a what a fun place to be right um as you were talking I was thinking a little bit about Twitter and Elon and the experience that's going through right now and it feels like on the one hand he's letting go of a lot of people which matches kind of your advice on the
other hand not being handled too well I think it's emails and just a lot of random quick things what's your perspective on on this whole thing I haven't been following it directly so I don't know how he's implementing the layoffs or how much he's doing Frank it
just haven't been following it at all but here's the sad reality even if it's handled incredibly poorly the company ends up performing better it just takes a little longer for people to recover who the State team to recover emotionally but the worst case scenario
it's handled terribly within two months the company will be performing better fascinating that's actually a good segue to this last topic I wanted to touch on which something that I think you have a lot of thoughts on is building new products within a larger company and
innovating inside of a larger kind of skilled company and especially the challenges around that and so what are your what are your thoughts on just how to do this well how to innovate within a larger company I can tell you the short version I'm going to tell you the long version the
long version is is that this was a real problem for everyone I was coaching and I didn't know the answer and someone had shared with me but it was obvious that YC startups weren't crushing and and just iterating so much faster and then I had the thought well why not just create
your own icy startup and have it Crush you but you own it and of course Essen really looked like a YC startup it has to have a Founder mentality person as the head of the team someone who's willing to break glass and just you know won't stop until they run through the
brick wall and it's actually pretty easy to find founder mentality folks you just literally go to the YC alumni list and the ones whose startups failed perfect they're available and they are founder types and now they want to join a company that's actually succeeding
because they realize how hard it is to create something on their own but they still have the mentality and then you want to keep the team really small because then they can again there's no there's no buy-in required like everyone's on the same page or the same information
and so we started testing that and it worked and then I thought well wait a second the reason that a big company is has a hard time innovating is because once a product is scaled it's now got millions of users so you have two things that you need to make sure stay true every day
the site is up and running and there's no security breach so every time you add code you've got to test it thoroughly to make sure it doesn't take down either one of those so that's the the review process is insane so now you want to make any your innovator your writing prototype you
know type code and new features you can't get it approved it's like that it takes so long and so that's what you're trying to decouple and you're trying to create an entity that isn't touching the core code but you also don't want to have to go through the approval process of the
product team or the head of product like that's takes way too long as well so that's why it has to be a small team that reports to outside of epd it can't report to the head of engineering head of project and headers I can't it's got to go outside usually directly to the
CEO that's the only other place to report that's outside and then I had this idea well wait a second there's also a brand question and so why do you have to create an entirely new name for this product that isn't the core the base business why don't you actually just create its own C Corp
why'd you make it so clear that this is its own entity so I wrote this whole thing up and and you create its own C Corp and I've shared this with a few people and and one CEO said to be met this sounds radical and sounds like it could work but is anyone actually doing this
I thought to myself oh no body's actually doing this nobody that I know has created new c-corps for the entities the new products they're developing and then 30 days later I got in a call with we dang I told you before I'm a huge fan and we talked about product and I shared
with her this write-up she's like oh yeah that's what I do she said I created Five C Corps in the last two months it's like what someone's actually doing it I was like well what are the results she's like they're fantastic she is the team doesn't worry about trying
because they know that it doesn't hurt our core brand and so they're iterating fast and she said not only do I do that I actually have two teams independent working on each new product one I have is more engineering Focus they build custom code the other is more sort of
customer relationship focused and they don't even have maybe they don't even have engineers and they build like a manual solution or they use off-the-shelf products to build a solution and I just see which one makes more progress faster and wow insane so that's why again I have so much respect for Lee
when I think about these ideas I think of like the npe team at Facebook and I think it's called area 21 at Google which works on new ideas and yes like I don't know if anything amazing has come out of those groups maybe I don't know but it feels like the missing piece and
you didn't mention this piece is feeling like there's a huge upside if you get something like like Founders having Equity of their company feels like such a motivator like I could become a billionaire if this works out versus I'm helping my startup and some some small
incremental way is that an important piece or do you think it's not critical I'm gonna be radical here I don't think it matters at all hmm I think that what really motivates people is building that gets used in the world I think people will say and they'll fight for equity and money but in the
end that's not what actually motivates them because I've seen this work in companies where they don't have big equity but they have autonomy they have ownership not Equity ownership ownership over decision making ownership over creation that's what I think people want
Amazon does this they're not giving their people Amazon's famous for being cheap bastards but someone has a great idea like okay here's five million bucks go do and Amazon is definitely innovating successfully what about the flip side of that of not necessarily the huge upside
but uh I'm staking everything on this startup like I need this to work this is my thing my name's on the line I feel like that's a big motivator also for Founders like I'm not going to give up this like feeling of grit is that important it's also fear fear which is like if this doesn't work
I'm screwed yeah and fear frankly is an excellent motivator it gets people to move fast and move hard the only problem with fear is it's also corrosive so it eats out my my insides as I go along it makes it that I don't enjoy life but it's highly motivated
now I think Joy is actually even more motivating or let's say it's as motivating but it's non-corrosive so I can last much longer if I'm doing something for Joy fear is short-term extreme motivation it's adrenaline Joy is long-term consistent motivation that also allows me to look back on my
life and go wow that was a great life so yes that that is effective motivation but I don't recommend you putting oneself in that position to get motivated for companies that want to try this method that you're describing is there a curriculum document for this approach
out there there is okay yes okay are there any other companies that are doing this well that come to mind you mentioned Amazon clipboard Health in my portfolio no Yale and attentive mobile are both doing this well more and more companies that I coach are starting to do this because I
have more and more examples of it working well so more and more companies are then copying I don't have other names offhand that I can share though what was that first company scale scale cool is that scale AI yeah okay cool I love that love that
founder yeah maybe a last question something that I noted just in case we had a little more time is around energy audit and this is something that you advise folks to understand what gives them energy what saps their energy can you talk a bit about that sure
so it turns out that what we're really good at is what we love and what we love is often space and time disappear when we do it and therefore we actually probably don't even value it because it comes so easily to us that we don't ascribe value whereas things that we don't love but we're good at
we often describe value there and other people want us to do those things because they're often creating value for the whole team or the family or the group so there are four zones I posit and I learned this from Diana Chapman at conscious leadership group so this is
this and I don't know where she learned it from but I almost everything that I have I poached from somebody but at least I I tell you where I posted from and so the concept is that you have four zones Zone one is your is incompetence like you're not good at it someone's
better at it than you that's like you know fixing a car you should let someone else do that second is your zone of confidence you're fine you can do it fine but so can somebody else do it fine like cleaning their their house yes you could do it but it would take a lot of time
and you're not creating that much value you should let someone else do that third Zone your zone of Excellence this is something that you're uniquely good at but you don't love it this is the danger zone this is likely what you're getting paid for and you're likely getting paid
a lot of money for it other people want you to do it you are creating value but it's also sucking the life force out of you and it doesn't allow you to become amazing and create massive value and then there's your zone of Genius this is the thing you do
that's uniquely good in the world and you don't even notice that you're doing it because you love it so much so the key is to go and look at your day how do you move into the zone of genus it's not that you figure out what it is and do more of that it's that you figure out what it isn't
and eliminate that and then naturally you'll be drawn toward what it is that you love and so what I do is the energy audit is you go through a calendar two weeks of a calendar representative two weeks and you first you look at all the meetings you have but then you fill in
there's time in between meetings like what were you actually doing pick up your best guess write it in and then hour by hour take a green marker and a red marker and each hour from Monday you know 8 A.M to 6 p.m and the same thing each day for two weeks each hour ask yourself during that at
the end of that hour that I have more energy or less energy and if it's more energy you mark it green if it's neutral or negative in Market red then once you've done that for two weeks you look at all the Reds and say what's with the themes here oh one-on-ones with people who are no
longer by direct reports team meetings where nothing was prepared in advance and everything was verbal recruiting meetings interviews with people that we didn't end up hiring informational interviews from you know people that wanted to meet me and just know me but
provide no value to me these are all things that are energy draining great now what you do is you go to each one of them and say one do I need to do this at all does it need to be done the answer is no just cancel it two it needs to be done but someone else can do it great delegate it to them
three and this is the most common it needs to be done and only I can do it great then the question is what would make it Exquisite well like it's it's the exact team meeting I'm the CEO I have to be in it well what would make it Exquisite we all would be Exquisite
would be Exquisite if everyone pre-prepared their update which said you know how they're doing against their priorities regular green what they did last week what they're going to do this week and then they wrote pre-wrote any problems they saw in the company and any
proposed solution they had for those problems if everyone did that then we could spend the first 15 minutes of the meeting just reading processing the decisions and we could take a three-hour meeting down to a 45 minute meaning great go write that up share it with a group and say hey Gang This is what
would make this meeting Exquisite for me what do you guys think and nine out of ten times people look at and go yeah that would be amazing because they're feeling the same way and then you go with the new methodology and it turns out to be great that's how you take your what you do
each day from a lot of energy draining things into open space or energy raising things which will then allow you to start doing more and more of the things that you love and you keep doing this energy audit repeatedly one two three times until your calendar
is eighty percent green and once that happens magic will occur all of a sudden your life will become phenomenal and you will start to create massive value I did it that's what happened to me I did that too actually a simpler version where I just paid attention to
what gave me energy and what didn't give me energy when I was on this journey post Airbnb and I thought I was wanting to start a company I thought I wanted to do some advising and Consulting and I realized none of that gives me energy but like writing interesting things that
people like that was fun so I just kind of double down on that path and I had no idea I was going to make any money and it ended up making money and that's what I do now so yeah two thumbs up for this method and it's a more sophisticated version which I like right on that's also trusting that
there will be if if you need to monetize eventually you will be able to monetize but you got to start with doing the thing you love first right yeah yeah I feel like there's a lot of people on Twitter and newsletters that are just doing it because they think this is
something they will enjoy and like other people are doing it but I find that with this content life like you get just you get on this treadmill where you have to continue producing things and if you don't actually enjoy it and it's not interesting to you you end up just doing like building this job
for yourself that is no fun at all so that's right extra important if you're kind of going down this path one quick question I had along these lines is you're you're talking about how you focus on yourself and your energy and what works for you or not and I was like
do these collide with other people on your team because they maybe get energy from some you don't but your point is that oftentimes everyone's like yes this is good for me too we should do this because it's going to help everybody feel better that's exactly right yeah I
remember one time we did this energy audit process I did it with Enrique and Peter for Brax and it was revolutionary for them and it caused them to change how the two of them operated together they realized one really enjoyed the internal meetings and the other really enjoyed the external
meetings they're like well great let's just do that and it changed the trajectory of the company so much so that they said Matt would you please come in and do this energy audit with all of our managers and we did we did a big group thing and what they found was it also trades that
process to change the trajectory of the company because for everything that you don't enjoy but needs to get done there's someone out there that loves to do it just gotta find out who it is and that's what happened I was just talking to my mom with a CPA and I'm
like uh do you enjoy this job you're doing she's like I love it I love doing taxes it's so interesting I'm like that is I'm so happy somebody out there enjoys this I would pay anything for someone to take this off my plate you can charge me that's exactly right
because my mom does my taxes without any any final uh thoughts you want to share before we wrap up this is fun thanks Lenny I feel like a sign of a great conversation as it feels like we've been talking for maybe five minutes but also a lifetime maybe we'll do this again
there's like a million other questions I left to get into but until then where can folks find you online if they want to reach out and learn more and how can listeners be useful to you where can people find me I don't know um don't find me able to respond I get too many inbounds
and I can't respond to them and in terms of uh people helpful to me just read the content and use it and don't don't pay me to coach you just do it on your own because you don't need to pay me to coach you I love that it's the first time someone's like do not reach
out do not I don't just figure I got it all for you online we'll link to the show notes of the doc and everything and so Matt thank you this was incredible thank you Lenny this is great take care thank you so much for listening if you found this valuable you can subscribe to
the show on Apple podcast Spotify or your favorite podcast app also please consider giving us a rating or leaving a review as that really helps other listeners find the podcast you can find all past episodes or learn more about the show at lennyspodcast.com see you in the next episode [Music]