Matteo Franceschetti: The Ultimate Hiring Playbook: Five Questions to Ask Every New Hire | E1084

Harry Stebbings 0:00 In terms of sleep, what are one to two things that is really important for people to know?

Matteo Franceschetti 0:05 It depends. The two basic things are really, your job as an executive is not to be loved, is to help your people achieve more than what they believe it was possible. We want to detect cancer by using some of these technologies. Your bed will become the most powerful preventative health platform in the future and will save your life.

Harry Stebbings 0:24 How long does that take? Three years? Five years?

Matteo Franceschetti 0:26 No less.

Harry Stebbings 0:27 Really? Matteo, I am so excited for this. It's so nice to do this in person, so welcome to London.

Matteo Franceschetti 0:36 Yeah, thank you for having me, and I'm excited to be here.

Harry Stebbings 0:39 Dude, I wanna start with, we look at Eight Sleep now, it's this incredible brand, it's this incredible movement. Well, let's go back to the beginning. Why did you decide this was the problem you wanted to spend-

Matteo Franceschetti 0:48 Yeah.

Harry Stebbings 0:48 ... many decades of your life working

Harry Stebbings 0:50 on?

Matteo Franceschetti 0:50 Yeah, so when I was a teenager, I was an athlete. I was playing tennis and doing a bunch of other sports at competitive level so I have always been in recovery. And so around 10 years ago, I started thinking, "Why Elon Musk is taking me to Mars but I still spend a third of my life on a piece of dumb foam," right? We have technology-

Harry Stebbings 1:07 (laughs)

Matteo Franceschetti 1:07 ... in two-thirds of our life, and then you suddenly go to sleep and you pretend to wake up eight hours later f- fully refreshed. That didn't make sense to me, and so that is when I started looking into sleep and decided to fix it.

Harry Stebbings 1:19 Can I... It's such a big problem to take hold of. What was your next subsequent step? Like, "I'm gonna fix sleep." Did y- what was the first prototype like? Like just-

Matteo Franceschetti 1:29 Yeah.

Harry Stebbings 1:29 ... walk me through that.

Matteo Franceschetti 1:30 Yeah, yeah. So two thoughts. The first one is why there is no technology enhancing my sleep, and that is what we are doing. Then even if I can compress your sleep, because I believe we will compress your sleep over time, so you might be able to sleep only six hours and get more rest than when you were sleeping eight hours. Six hours is still a lot of time for people like you and I. And so I started thinking, "What else can we do?" And then I started thinking, "Oh, we can save your life." We should use those six hours to scan your body and become the number one platform for preventative health. You're standing still, flat on a surface for six hours. We have lots of space. How can we keep adding sensors to really become the preventative health platform? And we can talk about that, but now we are already working on technologies for body scanning. We want to detect cancer in the future by using some of these technologies. So think of almost of an MRI. It will not be an MRI technology because obviously you cannot have it in the home, but we're working on that kind of thing in our R&D lab.

Harry Stebbings 2:29 I, I absolutely love that and I totally agree with you in terms of six hours flat. (laughs)

Matteo Franceschetti 2:32 It's still a lot of time. And so how, how do I use it?

Harry Stebbings 2:35 Well, though not still, I think my girlfriend runs marathons in her sleep. You might have trouble scanning her. Uh, but (laughs) uh, question for you. I, I saw this Jensen Huang comment the other day about NVIDIA, and he said, "If I'd known how hard it was gonna be, I would never have done it." (laughs)

Matteo Franceschetti 2:49 I saw, I saw that tweet.

Harry Stebbings 2:51 I was quite saddened by it. I was like, "No, you're my hero-"

Matteo Franceschetti 2:54 Yeah, yeah.

Harry Stebbings 2:54 "... and I want to hear the inspiration."

Matteo Franceschetti 2:55 I shared it with my co-founders.

Harry Stebbings 2:56 Yeah. Is it the same for you?

Matteo Franceschetti 2:59 100%. If

Matteo Franceschetti 3:00 I knew what we would have to go through, I don't think any human being would ev- wou- wou- would do that. You need to be naive, and you need to believe that it's 100x easier, and then you need to have the stamina, while shit comes, n- to handle it. (laughs)

Harry Stebbings 3:14 What was the hardest thing? When you look back and you're like, "Oh my God, I can't believe we went through that." What was that?

Matteo Franceschetti 3:20 So many things. I would say there are two major buckets. One, uh, uh, hardware. So I tell you this story that, that very few people know, but it was immediately after YC, right? We just closed YC, we had our seed round, so that part w- was, was going well. But, um, what was not happening was manufacturing. We, we didn't have any expertise in manufacturing, right? So we were really naive. And so certain point, I go to my wife, Alexandra, who is one of the co-founders and s- and I say, "Look, manufacturing is not happening. I need to go and fix it." And she says, "Oh, okay. And so what do you do?" "Oh, I'm flying to China." And she says, "When?" "Tomorrow." And she says, "When do you come back?" "Once I have fixed it." And so I came back a few months later, uh, after, yeah, being, being, being there with-

Harry Stebbings 4:06 Sorry, wh- and she was okay with that? I mean, that's not a normal thing to do.

Matteo Franceschetti 4:10 Well, my wife is y- you have to do what you have to do, right? And particularly for the company. And so if the company needs this, then you have to go to China, go to China, fix it, and then come back. (laughs) That, that is how it works (laughs) in our family.

Harry Stebbings 4:21 My word, that's patience, my friend. Can I s-... Was that seed round easy to raise? Respectfully, you weren't like Silicon Valley Stripe software engineer, and you were fixing hardware, not a popular investor category.

Matteo Franceschetti 4:33 Yeah.

Harry Stebbings 4:33 And like sleep, not an obvious category that investors invest in. Was it an easy seed round to raise?

Matteo Franceschetti 4:38 Yes, and I don't say yes easily because a lot of our rounds have been very, very, very difficult. The advantage we had at that time is that hardware was really hot at the time. There were a lot of campaigns on Indiegogo and other platforms. And so a lot of investors immediately after YC, because we already sold 6,000, 8,000 units in pre-orders, we were one of the hottest YC startup at the time. But that almost didn't happen anymore. (laughs) So after that, actually hardware became something that very few investors like, uh, in the Valley because it's very complicated, it requires a lot of capital, it's very easy to screw up. And so after that, uh, it became much harder to raise.

Harry Stebbings 5:19 Do you s- do you think investors are justified in their hatred of hardware?

Matteo Franceschetti 5:22 They are justified 98% of the times. But I think if you find the right company and the right team, no, because, I mean, look at Tesla and Apple. They are hardware companies. So if you wanna build trillion-dollar businesses, hardware works. It's really, really hard to get there.

Harry Stebbings 5:38 So when you are analy- I'm now purely using this for my investing business. (laughs) When you're analyzing a hardware startup and you're looking at the team, what is it that you want to see? Is it, "Hey, you've been in manufacturing before, you know how the sausage is made, and you can-"... build product? Like, is naivety good in building hardware?

Matteo Franceschetti 5:53 Number one thing you really want to analyze is how much they understand their unit economics. Meaning, as a company, we have been in trouble a bunch of times until when we really fix our unit economics. And so if those unit economics don't work, the faster you grow, the more you lose money. And then harder, you can have returns, replacements. So there are a lot of different factors. It's a very complicated business. And so you really need to understand, okay, do the unit economics work in this business or not?

Harry Stebbings 6:21 And so, um, sorry, I'm just, I want to understand that.

Matteo Franceschetti 6:23 Yeah.

Harry Stebbings 6:23 So when we say about the unit economics, is that in terms of like your bill of materials, which is obviously the cost it is to create the goods, your return? What, what, how do you break down unit econ? Because you've got also customer acquisition by channel.

Matteo Franceschetti 6:35 Yeah, yeah.

Harry Stebbings 6:36 You know, LTV, I guess, is a difficult thing to understand.

Matteo Franceschetti 6:38 Yeah. So you, yeah, yeah, yeah. It's a great question. You almost need your P&L at the unit basis. And so, okay, what is your gross margin, which comes after the BOM and the COGS, right? And what is included? And after that, that needs to really be above 50%.

Harry Stebbings 6:51 Above 50%?

Matteo Franceschetti 6:52 Yes. And probably best is 55, 60.

Harry Stebbings 6:55 Okay.

Matteo Franceschetti 6:55 And then after that, you need to have, obviously, you have CAC, you have a credit card, you have returns and replacements, you have all that. And then, okay, what is your contribution margin?

Harry Stebbings 7:05 Now, what would you say CAC is? Like, if you were to just kind of-

Matteo Franceschetti 7:09 Yeah. I think for great companies, I know our CAC is really, really good. It needs to be below 20% of the, of the price.

Harry Stebbings 7:16 Okay.

Matteo Franceschetti 7:16 Right? But a lot of companies, you will start seeing they are 30, 40, 50. And the reason is they postpone the payback period. So a lot of companies, they will tell you, "Oh, okay, I don't know, my gross margin is, uh, 30%. And then I spend 40% because then I have a subscription, and in 12 months, I get the payback." That most of the times doesn't work. And the reason is substantially, you need to have enough cash for 12 months to cover that delta in the CAC. While instead at Tait Sleep, we have an immediate margin on day zero. So the more you sell, the more cashflow you generate and you become profitable. And we have been profitable for two quarters now.

Harry Stebbings 7:54 Can you take me to a time... S- I did do this brilliant schedule. I'm loving this. Can you take me to a time when unit economics was off and what you learned from that?

Matteo Franceschetti 8:03 (laughs)

Harry Stebbings 8:04 (laughs)

Matteo Franceschetti 8:05 I can talk about that for, for hours. Um-

Harry Stebbings 8:08 Lucky Alexandre, date night with you is a riot.

Matteo Franceschetti 8:10 Uh, yes. There was a time where our gross margin was, uh, um, half of where it is now. And our CAC was 2X what it was now. And we were air shipping units because of the demand. And so air shipping for a product like ours, which is fairly big, uh, is extremely expensive. And so our units were upside down. And so what happens is you keep selling and you keep growing, uh, but it becomes a vanity metric because you're really burning cash for every unit that you sell. And so that is the moment where if there is, I don't know, a recession or the market slows down, you're in real trouble because you can't raise. This is the typical example of growth at any cost, where you just want to grow. Yeah, we are growing 3X year over year, but at what cost?

Harry Stebbings 8:56 The hard thing is you can also justify it in your head by saying, "Well, we can sell ancillary products to those existing customers."

Matteo Franceschetti 9:02 Yeah. This is always, oh, and, and then, uh, we'll-

Harry Stebbings 9:05 Word of mouth.

Matteo Franceschetti 9:05 ... reduce the BOM and the COGS, uh, and then, uh, things will change. Th- things will not change. What you need to do is you stop, you step back, and you say, "Now I take a hard decision, and I change the price, and I make this thing work, and I set a cap to our CAC," which is what I did. Then you take a hit because growth stops for some time. You just need to believe in your team that within six months you're going to fix it and you start growing again. But it's a shocking time.

Harry Stebbings 9:35 (laughs)

Matteo Franceschetti 9:35 I can tell you.

Harry Stebbings 9:36 How do you think about setting a cap to your CAC? A CAC obviously is customer acquisition cost-

Matteo Franceschetti 9:40 Yeah.

Harry Stebbings 9:40 ... how much it costs to acquire a customer. How did you approach setting a cap to that? It's a very hard thing to do.

Matteo Franceschetti 9:46 Yeah. So-

Harry Stebbings 9:47 Did you do it by channel?

Matteo Franceschetti 9:49 No. For... You start blinded. At least we started blinded. And I came up with a hard number, and I said, "From now on, we don't spend a penny above this CAC. I don't care about what, anything that is happening in the world. This is our CAC." Why? First, is, uh, uh, uh, is just an internal decision, right? But I tried to base it on a couple of things. First, okay, the top companies in the world, what is their marketing budget compared to their revenue? So you try to find a proxy. Second is also, what is the CAC that the, I can afford to have this contribution margin? And so you almost go top down. If I want to have 20% net margin on day zero, this is the CAC I can afford.

Harry Stebbings 10:30 Mm-hmm.

Matteo Franceschetti 10:31 And so you go to your marketing team, and at the beginning, they will complain, "This is absurd. It will never work. Growth will fall apart." Let it fall apart. I give you six months, and then you need to start growing again because you need to figure out channels that work at this CAC.

Harry Stebbings 10:43 Mm-hmm.

Matteo Franceschetti 10:43 And we have done this two times, and it worked every time.

Harry Stebbings 10:47 Do you think marketing teams are ready for that? They've been so trained on-

Matteo Franceschetti 10:50 No.

Harry Stebbings 10:50 ... a world of free cash, that just brand marketing-

Matteo Franceschetti 10:53 Yeah.

Harry Stebbings 10:53 ... this, this, this, those bo- I don't feel they're mentally ready.

Matteo Franceschetti 10:56 And, you, you know what is the biggest issue often? And it happened to us twice. So I, I, I'm, I'm the king of mistakes.

Harry Stebbings 11:04 (laughs)

Matteo Franceschetti 11:04 So I can talk about any mistake. But then most of the time so far, I was able to fix it. But where you struggle the most is with executives. So you can find executives that have been at previous companies that, and they grew them, but it was a different time in the market where it was growth at, at all costs. If you go to those executives and they're used to spend, I don't know, 100 bucks, and now you tell them, "You need to do it with 50," within three months, they're gonna quit or- because they think this is unreasonable, this will never work. You need to reach this scale before you can start thinking about optimizing unit economics and all that. And at the end of the day, it's all bullshit, you know? By forcing my team, our team, with this structure, we were able to unlock channels that we were...... not using at the time, and now we can deploy millions of dollars in these channels at an extremely efficient CAC.

Harry Stebbings 11:55 I'm just loving this. Uh, m- man, one of the reasons I was single for so many years is different channels, uh, optimization really gets me going. Uh, can I ask you, which channels were you deploying heavily into which went wasted, which were not useful?

Matteo Franceschetti 12:07 There are a- a- a couple. More than anything, I would say, the typical mistake you do during those days is you just deploy on the digital channels, right? You just, "Oh, okay. Let me put money on Google and Facebook." If it was that simple, everyone w- would be building a billion-dollar business just by putting money on, on Facebook and Google because-

Harry Stebbings 12:27 (laughs)

Matteo Franceschetti 12:27 ... it would become a commodity. And so what we did is we changed our velocity and pace in testing different ads on all these platforms. And so our Facebook or Google CAC now is probably, I think it's like 75% lower than what it used to be two years ago. 75%, so it's massive.

Harry Stebbings 12:46 Yeah.

Matteo Franceschetti 12:46 Uh, the blended CAC is around 50% lower. So this is the fourth year in a row where the company keeps growing and we're growing really fast, and the CAC is at the lowest it has ever been-

Harry Stebbings 12:56 Okay.

Matteo Franceschetti 12:56 ... in four years.

Harry Stebbings 12:57 So how do you use velocity to lower CAC? I know it's one of the principles which we'll get into, but how do you use velocity to lower CAC so much?

Matteo Franceschetti 13:03 Testing. Uh, so for Facebook and Google and the other, particularly for Facebook, you test, uh, a lot of different assets. So the velocity of o- of assets matter. And-

Harry Stebbings 13:13 And when you say assets, you're saying kind of imagery, wording, messaging?

Matteo Franceschetti 13:17 Exactly, yeah. And so if before we were doing one test every two weeks, now maybe we do five a week, you know? And so you learn way faster. And then we unlock other channels. There could be podcasts, right? We, we invest quite a bit in podcasts. We work, uh, with, with influencers. We started some marketing campaigns, so we have sponsored Mercedes F1. So we call it the rule of the seven touchpoints. So it's another rule I came up with, which is substantially you want to surround your customers and you want them to see your brand seven times before they pull the trigger. Our purchase is not an impulsive purchase, right? It's around 2,000 bucks. And so people are... it's not that they're gonna see this product and they just buy it. And so you want them to see your brand seven times, or they w- you want them to hear about your brand seven times through friends. So word of mouth is really important for us.

Harry Stebbings 14:07 I get that in terms of the seven touchpoints. The hard thing is data attribution for, in my mind. And it's like, okay, you see them on the car when I'm in the gym and they have the TV on in the gym. You don't know that I've seen that. How do you think about s- channels where there's no attribution and you're really quite blind on data?

Matteo Franceschetti 14:24 Most of our channels for now, except few brand marketing initiatives, they have attribution, right? Because even on podcasts, there is a s- special discount that you offer to your listeners. Obviously, Facebook and Google. Point is, attribution will never be perfect-

Harry Stebbings 14:40 Yeah.

Matteo Franceschetti 14:40 ... but there is where you just look at the portfolio, the blended CAC-

Harry Stebbings 14:43 Yeah.

Matteo Franceschetti 14:43 ... and then there is no debate. How much did we spend? How much did we make? What is the percentage?

Harry Stebbings 14:48 Which channel have you been most surprised by?

Matteo Franceschetti 14:50 I mean, for us specifically, word of mouth is the most incredible, right? Uh, because you're still having 30, 40% of the revenue just coming through word of mouth and that is insane at our scale. It, it f- is a lot of money. So that is the biggest. And then I would say there are certain channels that work, like for example, podcasts could be one, is not a channel that works for every brand. So here is another mistake I think a lot of, not our investors, but there are a lot of investors that they always push you to reduce prices, right? Our investors, they're almost the opposite. And the reason why I think it's wrong to just be obsessed with price reduction and TAM is often your CAC will not change linearly with the price. Meaning if you reduce the price of our product by 20%, the CAC is not gonna go down 20%. So what you need to do is keep that price, add value, but don't change it because our CAC is already so efficient that it's extremely hard to move it down. And particularly if you are at this scale, right? When you are Apple or when, you know, you're b- billion of dollar in revenue, yeah, maybe you need to find ways to expand your TAM. But at our stage, even if you make hundreds of million of dollars, the key is keep CAC consistent and just find ways to generate more value and more margin.

Harry Stebbings 16:05 What have been your biggest lessons on pricing? You said it's a $2,000 purchase. It's a very considered purchase.

Matteo Franceschetti 16:10 Probably this one, that whenever people, if I talk to investors or even for future rounds and they start talking about, "Oh, but, uh, why don't you reduce the price to accelerate growth?" I just disagree, and because I don't think CAC will change. And so if anything, yeah, maybe there is a portfolio strategy where you have a cheaper product but you have the current one and also more expensive. But I, I don't think sometimes people are sophisticated enough to understand the relationship with the CAC.

Harry Stebbings 16:35 Can I ask you a weird question? $2,000, what would happen if you made it $4,000? Have you done price experiments to understand-

Matteo Franceschetti 16:43 Yeah. Yeah.

Harry Stebbings 16:43 ... like demand sensitivity?

Matteo Franceschetti 16:45 Yeah. This is actually the perfect question, and I can tell you it wouldn't change too much.

Harry Stebbings 16:49 'Cause also it's like a very luxury product.

Matteo Franceschetti 16:51 So actually going up, uh, with prices sometimes is very beneficial for a company like us. And we just did it because, uh, when we had to readjust our unit economics, we had to increase prices. We did it in 2021-

Harry Stebbings 17:04 Yeah.

Matteo Franceschetti 17:04 ... and the impact was minimal.

Harry Stebbings 17:05 Yeah.

Matteo Franceschetti 17:06 And so one interesting thing for you to know is sometimes I talk to different people about this topic

Matteo Franceschetti 17:11 and so when I wanna talk about pricing, I talk to Italian very successful companies that have been profitable since day one. I don't talk to many Silicon Valley guys. And the reason is these guys, they built... I don't know, one of our investors is the, the f- the founder of a major fitness company in Italy, right? They make almost a billion dollar in revenue. They're worth multiple billions. So big business, right? This guy started the company 30 years ago and never raised a penny until when they went public, blah, blah, blah. And so I talk to these guys because this guy is selling fitness equipment for 10K with a profitable business that generates 70 million in cash every year.And so I wanna talk to him because he knows how to make the, the bottom line work, not the top line.

Harry Stebbings 17:54 I was speaking to someone at Chanel the other day and they raise prices 11% twice a year and they see increased demand-

Matteo Franceschetti 18:01 Yeah.

Harry Stebbings 18:01 ... on goods.

Matteo Franceschetti 18:02 100%.

Harry Stebbings 18:03 I'm like, "Fuck, that's a good business."

Matteo Franceschetti 18:06 Because it becomes way more aspirational.

Harry Stebbings 18:08 Yeah.

Matteo Franceschetti 18:08 And people think that, correctly, that if you raise the price, the quality is higher than other competitors. So you don't wanna get in a price war. Once you get in a price war, particularly with a physical good, you're in real trouble because then the, the business will not work.

Harry Stebbings 18:24 I was debating whether to ask this, but I'm so enjoying our conversation and, uh, this relationship, so I'm gonna kind of put a thorn in the side. I always think mattresses, I know it's not just mattresses, but I always think mattress is a bit of a hard business because it's like and then what? And you don't replace the mattress very fast. It's not an Uber that you get three times a week or whatever. Like, how do you think about the LTV of mattresses and like whether it's actually a good business given you buy one every seven to 10 years?

Matteo Franceschetti 18:52 There has been another lesson. So now, substantially all our business is just the cover. We don't, we don't sell the mattress. If you go on our website, there is just the pod cover. You can add as an accessory the foam part, which is the mattress, but you're talking about single digit percentage of our revenue.

Harry Stebbings 19:11 Of revenue.

Matteo Franceschetti 19:11 Everything is the cover. And the whole point here is use any mattress you want that is a commodity, is a piece down by foam, so buy whatever you, you want, right? They will be making a huge markup on whatever you buy so you, you might spend 2K, 1K, doesn't matter, and we just sell you the technology that goes on top of that, so it's this mattress cover which is a wrap.

Harry Stebbings 19:31 Was that always the case? When did that become the focus?

Matteo Franceschetti 19:35 So we started with the cover, then we switched to the mattress, and then we went back to the cover.

Harry Stebbings 19:39 Why did you switch to the mattress?

Matteo Franceschetti 19:41 We switched to the mattress because at the time we wanted first to test that, second because mattresses they have incredible unit economics. The main problem of mattresses are two. One, it's a commodity and so what happened with some of the D2C brands, it became a price war because anyone could sell the same product and unit economics didn't work. And the second is what you were saying that usually people don't buy a new mattress for eight years. Yeah. But with the cover, for us it's completely different, right? There are 30 million mattresses sold every year but there are just in the US 300 million people sleeping on a mattress every night, right? And so our time became immediately way larger, we have no competition, and our customers, many of them, they buy literally every new generation that we sell. So repeated purchase for us is pretty high.

Harry Stebbings 20:30 Why do people return? Is it just a lack of knowledge around how to use it? Is it lack of knowledge around installation? When you analyze that with the team, where

Harry Stebbings 20:38 you're like, "Ah"?

Matteo Franceschetti 20:39 Particularly at the beginning, now the product improved a lot, in the early days, um, it w- it was all about comfort for sleep, right?

Harry Stebbings 20:46 Yeah.

Matteo Franceschetti 20:46 And so if you change even a little bit the comfort of the mattress, they might not like it, even because a large part of our users, they, they are two, you know, they have a partner, so you need to make two people happy, not just one.

Harry Stebbings 20:58 W- we're gonna get to principles. I do just have to ask, you mentioned, uh, rounds being hard to raise.

Matteo Franceschetti 21:03 Yeah.

Harry Stebbings 21:03 It's never a straight line. What was the hardest round to raise when you revert back?

Matteo Franceschetti 21:08 The A, the Series A.

Harry Stebbings 21:09 Series A. Why was that so hard to raise?

Matteo Franceschetti 21:11 At the time, we were receiving a term sheet but part of our business at the time was also, uh, licensing our technology to some mattress manufacturers, right? So it was a sort of, um, uh, intel inside concept, right? And so there was this investor, um, who already invested in the seed, they were interested in leading the A, but, um, part of the investment was subject to signing an LOI with one of the largest mattress guys in the world. And then these guys, they call me and they say, um, "We're out," th- the mattress guys. "Uh, we decided not to move forward." So I had to call the investor and the investor said, "Matteo, I told you, you know, this was a key for, a key thing for me so we're out too." And he was super fair, meaning I, I, I knew that that would happen and so I-

Harry Stebbings 22:02 Are you not a bit like, "Fuck you"? And I mean that in the nicest way but it's like, "Fuck you, believe in me. Uh, why do you need an LOI? It's a Series A. Like, we're not at the D, E stage. Why is your belief in me and the vision... come on."

Matteo Franceschetti 22:13 They were, uh, I mean, they have always been upfront that that for them was really important, right? The, the B2B business, they didn't believe in the B2C part. This is a really nice guy so I completely understood. Business is business, I, I, I think like that so I immediately understood but I still remember very clearly me and one of my co-founders Max, Ma- Max smokes, I don't, and so we were downstairs, uh, in front of our office with, with Max, uh, with Max, uh, smoking and talking about how much runway we had and that we had a couple of weeks to fix it or we were in trouble. And we fixed it.

Harry Stebbings 22:47 (sighs) A couple of weeks to fix it?

Matteo Franceschetti 22:49 Yeah.

Harry Stebbings 22:50 Who came in and led the A in the end?

Matteo Franceschetti 22:52 Uh, there was another investor that we had called, um, Yunxi, so it was, uh, is, is a very large investor that is also, they helped us with China to create the manufacturing. So we went through all that and then Keith led with Khosla and then Founders Fund and then Valor.

Harry Stebbings 23:09 I mean this totally respectfully, there was like a plateau in Eight's history in my mind in terms of brand perception and then it suddenly ramped.

Matteo Franceschetti 23:17 Yeah. Um-

Harry Stebbings 23:18 And I don't know why it suddenly ramped. Why was that from your viewpoint?

Matteo Franceschetti 23:21 So when, when Keith led the round with KV, with Khosla, that is when we really rethought, uh, many things including the brand, right? We've rebranded completely and we created this concept of sleep fitness. We decided to go up with prices and premium positioning which is part of what I was telling you. We created the pod, right? So the current product that is 100% of our revenue launched literally four years ago, twen- 2019.... right? So this thing went from zero to hundreds of millions in revenue in four years, which in hardware is really rare.

Harry Stebbings 23:58 Yeah.

Matteo Franceschetti 23:58 But the previous products were completely discontinued. And so if you look at the companies like-

Harry Stebbings 24:02 Were you scared to do that?

Matteo Franceschetti 24:04 Hmm?

Harry Stebbings 24:04 That's a big decision, discontinue.

Matteo Franceschetti 24:06 Yeah. I think yes. But at the same time, we wanted to, to play bold. I think having people like KV and, and Keith, and, uh, there was also Deleon behind your back and supporting bold decisions gives you a lot of confidence.

Harry Stebbings 24:22 Yeah.

Matteo Franceschetti 24:22 Right? Because it's not, "Oh, I'm, am I smoking something (laughs) about this vision?" No. If these people believe it...

Harry Stebbings 24:29 People are like, you know, do investors really add value? Do they really add value? Did having Keith, KV, subsequently Founders Fund, did that change your ability to hire, do you think?

Matteo Franceschetti 24:40 Yes. Yeah. And maybe it's not 100%, but I think there are multiple gems that we have in the company that joined because you have these people behind, and so they just say, "Okay. This vision must be real if these people are behind these guys."

Harry Stebbings 25:00 Yeah. So you think investor brand really does matter?

Matteo Franceschetti 25:02 Yes.

Harry Stebbings 25:03 Yeah. No, I, I-

Matteo Franceschetti 25:04 I know for sure, meaning some people apply to us because maybe they saw a tweet from, uh, from Keith, or some, some others applied or they joined because they knew that, uh, Khosla, Keith, Founders Fund, Valore, Antonio invest.

Harry Stebbings 25:17 Can I ask you a final one, and then I promise we're gonna get to the principles. When you revert back to the, the fundraising journey, is there anything you know now that you wish you'd known then or you'd advise founders having been through all that you've been through?

Matteo Franceschetti 25:28 Yes. I think sometimes you just

Matteo Franceschetti 25:32 think about the firm, meaning, "Oh, I'll, let me try to talk to Founders Fund to see if you can raise." But if you have a very bold vision and a very contrarian view of how (clears throat) the world will look, right? Because what we are saying is that Yerbette will become the greatest preventative health platform in the world. But if you go on our website, you could just say, "Oh, these guys, they sell some products for your sleep, to heat and cool." And so you really need to talk to the right person in the firm, and usually it's senior partners or people that know, fully understand what you're trying to do. And the other big thing is this. If you look at our, uh, at our history, right, we, we have some of the greatest investors, right? We have Keith, we have, you know, Khosla Ventures, we have Founders Fund with Trey Stevens, we have Valore with Antonio Gracias, right? And what I realized recently is it's not a coincidence. Meaning, hundreds of people passed on us, but not these guys. And the reason is, these guys, they have a vision that someone will master sleep. Technology

Matteo Franceschetti 26:40 will dominate sleep a certain point. So I don't have to convince them on that, right? If you talk to Keith, he already knows. He, he has been talking about this for 10 years and so I don't have to convince him that technology wi- can enhance your sleep and there will be a trillion-dollar business in this space. At that point, it's a matter for these investors just to understand, are you the right team to do it or is there is someone that is better? Well instead, when you talk to some other investors, they don't have this belief of how the world will change and I have to convince them that this will happen, and that is where I lose them.

Harry Stebbings 27:12 It's a very... I, I do sympathize 'cause I totally agree with you in terms of you don't wanna educate the investor. When you're educating investors, it's just, it's too hard to sell.

Matteo Franceschetti 27:20 Yeah.

Harry Stebbings 27:20 And I buy the long-term vision and I see that, but then you also have to be grounded in reality and grounded in unit econ and aware of ancillary products that you build out-

Matteo Franceschetti 27:29 Yeah.

Harry Stebbings 27:29 ... expanding LTVs, and that's where I think the dislocation can happen.

Matteo Franceschetti 27:34 Yeah. But I think some of the greatest investors, if they believe in you as a team, they know you will fix it. Fixing unit economics is possible. It's human. Uh, uh, it, it's just hard work of, you know, operational excellence. And so you just need to hire the best people and you will do that.

Harry Stebbings 27:53 Yeah.

Matteo Franceschetti 27:53 But will the world change and adopt a technology that improves sleep? Yes or no? That is something that they just need to have a gut feeling.

Harry Stebbings 28:01 I totally agree, and, uh, you definitely see it in those investors.

Matteo Franceschetti 28:04 Yeah.

Harry Stebbings 28:05 I, I love that. Okay, I wanna discuss the principles 'cause we kind of touched on them a little bit. You mentioned operational excellence there. I just wanna start on the first one. And by the way, these are the principles of world-class execution.

Matteo Franceschetti 28:14 Yeah.

Harry Stebbings 28:14 You're expecting a book coming out soon, I hope. Yeah, book deal in the works. Clarity of thinking, Matteo. How do you... what, what does that mean to you, and how do you ens- try and make your clarity of thinking as optimal as possible?

Matteo Franceschetti 28:27 It's something I'm really obsessed about. Um, and so f- first, the best way to develop clarity of thinking is writing, right? You need to write because once you start writing your thoughts, you understand there are many things that are not clear or that you still don't know, you didn't develop. But clarity of thinking is this ability to distill in very few words a complicated concept. There is an area where I challenge my team and myself a lot because are you supporting your thinking with data, right? So first, we're very data-driven. And second is, what is the clear outcome? Sometimes people are very not... uh, if, if they don't have clarity of thinking, they can write something that is very confusing, it's not data-driven, and you don't get to the end point. And so it's just a matter of practice. And you see people like Paul Graham or Keith Rabois, right? They are some of the greatest at, at expressing a very complicated concept with few words in something that, I call it the grandma rule, right? Something that my grandma could understand. Sometimes, you know, uh, my team writes me something and it's extremely complicated, and I just say, "Okay, can you explain this to my grandma?"

Harry Stebbings 29:34 (inhales deeply) Uh, it's a really hard one, I think, for you in terms of, like, the grandma rule and where you position the brand 'cause you want this, like, we turn everyone into a superhuman, but you don't want it to be too aspirational that it's out of reach.

Matteo Franceschetti 29:47 Sure.

Harry Stebbings 29:47 Do you see what I mean?

Matteo Franceschetti 29:47 Yeah.

Harry Stebbings 29:48 How do you make something accessible but aspirational?

Matteo Franceschetti 29:51 I think y- you play, for aspirational, you use, uh, images.... right? And you try to position very premium, something that you really dream of. But in terms of worth and the value proposition and the benefit, you need to be very simple. And so there, I always think of you having dinner with a friend tonight. How are you gonna explain my product? And there is where now we keep tweaking and tweaking and tweaking to help you pitch our product tonight.

Guest co‑host/interviewer 30:15 What do you think has been the messaging or the wording when you've looked at it even like, "That's it for us"?

Matteo Franceschetti 30:21 For us, it's temperature, right? It's the game changer, and so I have this device that, that I can install on my bed that, uh, heats and cools each side of the bed and improves my sleep by 20%.

Guest co‑host/interviewer 30:31 But like, what do you put on a billboard then for that?

Matteo Franceschetti 30:34 "Never sleep hot again," or, uh, "Sleep comfortable for the rest of your life." Something that is very simple. Then obviously, our marketing team is way better.

Guest co‑host/interviewer 30:43 Do you ever think of like, for ... You have so much room to run on comedy. Like, your wife may be hot, but you are not.

Matteo Franceschetti 30:49 Yeah. (laughs)

Guest co‑host/interviewer 30:51 (laughs)

Matteo Franceschetti 30:51 Flatter her.

Guest co‑host/interviewer 30:52 Yeah, yeah.

Matteo Franceschetti 30:52 Like, get her temperature.

Guest co‑host/interviewer 30:53 Yeah. Sometimes you can, yeah, also play with things like that, that to be a bit more funny and rela- relatable.

Matteo Franceschetti 31:00 Why do you think people make mistakes on clarity of thought?

Guest co‑host/interviewer 31:02 Because they didn't think enough. They believe, they, they know, they believe they have a thought but they didn't develop it properly, and they don't have enough data to support it. So they're confused. At the end of the day, the opposite of clarity of thinking is confusion. And so you have a blurred concept that you are unable to express. "Oh, we wanna try this channel." Why? And why? And why? You know, the five whys.

Matteo Franceschetti 31:26 Mm-hmm.

Guest co‑host/interviewer 31:26 Keep going deeper and deeper and deeper. And do we need to test it now, right? Think of this, right? They ... It just happened, right? They, they were suggesting, "Okay, let's test this other channel." And my point is, why, right? It was in an international market. We didn't test it in the US, why would we go there? Oh, because then we, I don't know, we can grow faster. But can we grow faster with all the current channels and just kill them more? Yeah, maybe, and did you spend enough in these channels and do you already know that there is no margin for incremental CAC? You know? You keep making questions. And as a team, you need to help each other, meaning you will never start with clarity of thinking in anything so I need help myself. This, this is just an example where as a group we develop our clarity of thinking. But after you debate this, write it down and send me a blurb or a one-pager about this topic. Mine is like focus. I always tell people like, "Just write a list of the top three and then just start from one."

Matteo Franceschetti 32:19 Yeah.

Guest co‑host/interviewer 32:19 And then also it's like, understand what success is in each. I find so many people try things and it's like, "I don't know if it's actually what we thought it would be." And it's like, "Well, what did you want to achieve?"

Matteo Franceschetti 32:27 Mm-hmm.

Guest co‑host/interviewer 32:27 "I don't know, we didn't set that." And you're like, "How do we know whether we should keep going?"

Matteo Franceschetti 32:32 But there's also another ... It is a great point. The other way is, yeah, maybe this increases your revenue, this new channel, but is there a faster and simpler way to achieve the same that works for now? Because sometimes it's also, sometimes people come to me and they just give me one option. "I suggest we do A." Doesn't matter if I'm in favor or against A, I never like to see one option. I wanna see multiple options, and you tell me why we are not pursuing the others and we are pursuing this. I want a pitch or a portfolio, and then we pick one based on impact and effort.

Guest co‑host/interviewer 33:04 Okay, I get you, but I also want speed of execution. And so I quite like it when someone says, "Hey, I analyzed all the options, and I realized that actually this is the most efficient. Would ... Are you okay for me to proceed?" I like that because the speed-

Matteo Franceschetti 33:16 Yeah.

Guest co‑host/interviewer 33:16 ... of execution means I don't have to go, "Oh, well, we've got five. We should debate. Well, I disagree with that one actually."

Matteo Franceschetti 33:21 Yeah. For us, everything happens in writing async so we don't lose

Matteo Franceschetti 33:26 time. Write it down. You, you, you shou- just say, "Oh, I analyzed five option, I recommend option C." Cool, can I read it? And I read really ... fairly fast and within literally five minutes, I can give you thumbs up, thumbs down. And even async, we don't even need to jump on a call if we're not in the same place.

Guest co‑host/interviewer 33:43 Do you find you lose tone? Like I have with my CFO in particular. There's some sensitive items, budget items I thought we were not tight as w- we could be. And there's some sensitive things. Do you ever pick the phone up and call people and say, "Hey," like, "I feel this one actually needed to be on phone?"

Matteo Franceschetti 33:59 I would say probably 20% of my meetings is impromptu.

Guest co‑host/interviewer 34:03 Mm-hmm.

Matteo Franceschetti 34:04 And so I just randomly call, and so I actually allocate time in my daily calendar to make sure that I have bandwidth to just randomly call my team and discuss things.

Guest co‑host/interviewer 34:14 Speaking of bandwidth, another one is operational excellence. It's kind of a bandied around term, uh, very popular. How do you think about your own operational excellence and what are the biggest needle movers have been and what you've done to optimize it?

Matteo Franceschetti 34:26 Operational excellence to me means output, right? So what is the output and the efficiency of this output? And so there are a couple of factors behind that. The first one is quality, and the second is velocity. We'll talk about now velocity. And so you need to keep a very high bar in terms of quality at a very high velocity, and then you have this output. There is, uh, actually some example from, from Keith, Keith Rabois, right? And output usually is a function of how many barrels you have. Barrels are people in your company that can get everything done from zero to completion, right?

Guest co‑host/interviewer 35:02 Mm-hmm.

Matteo Franceschetti 35:02 And you have barrels and ammunition. Barrels can lead anything from zero to completion, ammunition support them. Usually the output is a function of this. You can do as many things e- based on the number of barrels you have. If you have five barrels, you can usually do five things. But the key of this operational excellence is how do you make sure that you keep moving really, really fast without compromising quality? And so they are opposite metrics, and you challenge them, uh, against each other.

Guest co‑host/interviewer 35:28 What's the biggest challenge of having them opposing each other?

Matteo Franceschetti 35:31 It's the best thing ever. Uh, and actually this is a mistake a lot of companies do when they pick only one metric. I give you an example in growth. In growth, my team has a goal to grow, I don't know, call it 2X a year over year, right? At this CAC. There is a tension between these two, right?And, but this tension is exactly what they want, right? Because if you just give them growth, they could grow 5X year over year. They just spend 5X more CAC or 3X more CAC. If you just, if they just use CAC, then they're not challenged to figure out how to unlock new channels that can push our growth. And so opposite matters. We don't do anything at Eight Sleep if there is not an opposite metric.

Harry Stebbings 36:06 How do you do that? If you ... I'm, I'm just intrigued. If you were thinking about building, like, a media company, how would you have an opposite metric?

Matteo Franceschetti 36:12 You just need, uh, I think there was this example from, from PayPal, right, where they were, they wanted to grow the number of users.

Harry Stebbings 36:20 Mm-hmm.

Matteo Franceschetti 36:21 But the counter-metric was to validate and make sure that they were, um, real users. And so the example of Keith on that was always that if you just wanna, uh, make sure that you wanna validate every user, you would just ask every user to come to your office and sign a piece of paper. Obviously the company wouldn't be scalable, right?

Harry Stebbings 36:40 (laughs)

Matteo Franceschetti 36:41 But you have 100% certainty that this is a real person that you can trust.

Harry Stebbings 36:46 Yeah.

Matteo Franceschetti 36:46 And so you always need to find this balance. And so for a media company, I don't know, for you is number of downloads.

Harry Stebbings 36:51 Mm-hmm.

Matteo Franceschetti 36:51 I don't know. Then you need to think, okay, what is the logical counter-metric that will make my business stronger or more efficient or, uh, more sustainable?

Harry Stebbings 37:01 I get you. What mistakes have you made with operational excellence? When you look back now, and go, "Ugh, I can't believe we did that."

Matteo Franceschetti 37:07 Most of the times, it's probably connected to the opposite metrics. Like you wanna ship, um, quality of software, right? Sometimes now we wanted to improve the quality of our software to make our software more reliable, but then what happens is it starts taking months to, to ship a new feature. Or another example is focus, right? Sometimes my engineers or the head of engineering says, uh, "We cannot address a, a bug we fig- we found last night. This can happen in two weeks because the team is already focused on, on, on this pipeline of products." And my answer is, "No, we need to do it today." I, I give them a 48 hours, right? So usually if, if something come up, we need to fix it very, within 48 hours. If that doesn't happen, we must have a very strong reason and I wanna read about that, about that reason. You always want to find this balance between these two opposite parts of the business.

Harry Stebbings 38:00 You mentioned like the 48-hour turnaround there. I often think about speed of execution and velocity.

Matteo Franceschetti 38:06 Yeah.

Harry Stebbings 38:06 And part of me says it's the most important thing in a business, and I do think especially in zero-to-one, it really is on the testing and iterating side. And then part of me thinks actually some things need a lot more deliberation. How do you think about, well, first, number one, I guess foundationally, is speed of execution as important as everyone says?

Matteo Franceschetti 38:22 It is, uh, without compromising quality. So yes, and then you set the opposite metrics of quality.

Harry Stebbings 38:27 Is it possible to do it without compromising quality? If I can do it today for you and it's 80%, or I can do it in a week for you and it's 90%, which do you want?

Matteo Franceschetti 38:35 So I want the 80%. And so there is where you need to be clear. It's also one of the points of the Elon Algo on, on his book, right, about simplifying the requirements. So it's the definition of quality. Quality to me is not perfection, but there is a threshold where if you just ship tomorrow a shitty app, then we don't go very far as a brand, right? But if it's 85% there and then you keep improving, uh, every single day for the next week and you take it to 100%, 100% we should do that. There was actually this point that, you know, they taught us at, um, YC where they, if you were going to the YC partners during the YC program saying, "Oh, I'm gonna launch, I don't know, this website in 30 days," some of the partners, they would tell you, "No, you start shipping something tomorrow and you break that thing down in 30 pieces, and every day you make some progress." And so we really talk about progress at Eight Sleep, how can you do as much progress as possible only 24 or 48 hours?

Harry Stebbings 39:27 I do wanna just, like, dive into that 'cause I think Ramp actually did it very well in terms of velocity. They have like at the top of every doc, like, Day 628.

Matteo Franceschetti 39:34 Yep.

Harry Stebbings 39:35 How do you think about deliberately building velocity into a company?

Matteo Franceschetti 39:39 I think as a culture, it, it's literally part of the culture. We call it, um, Eight Sleep speed, 8S speed. When we do something really, really fast, we celebrate that, and I immediately jump in and I also hashtag #Eightsleepspeed. We want to do what any other company does in half the time. The key usually with senior executives where you really need to push them because, in particular if they come from big companies, they are more skewed towards quality and reliability. Well, instead you wanna be bold and just ship something 80%, take the risk, and move on, and you need to create that culture.

Harry Stebbings 40:11 Have you ever had it where it's not been good enough and you're like, "Hey this, this is shit work." And then like-

Matteo Franceschetti 40:17 I wrote a memo about this last Sunday-

Harry Stebbings 40:18 (coughs)

Matteo Franceschetti 40:18 ... to all my executives and I say, "I want to increase our pace by 30% and tomorrow we are gonna discuss this." Uh, we had our internal executive meeting. Everyone reads the memo, they read the memo before the meeting. We debated, uh, the memo. By the end of last week, so last Friday, everyone took action in changes with their team to increase velocity 30%.

Harry Stebbings 40:38 How did they respond? Were they like, "Oh, Matteo, that's, that's a lot, uh, to ... We, we're, we're pushing our hardest now." How was their response?

Matteo Franceschetti 40:45 At first it was mixed, right? Some people say, "Okay, this guy just keeps pushing for, for velocity for the sake of velocity." But by the end of the week, 100% of them, they were, um, 100% in. Actually, one of our executives wrote me yesterday and, and he, he, he called, in his Slack message, he said, "Confession." And he said, "At the beginning of the week, I was not really, you know, sold on, uh, on, on this approach. I think this will compromise quality and it will have, you know, a second order effect on all our engineers," blah, blah, blah. "But I thought more about that and I think we can fix it and I think this is the right thing of the company. Here are the three things I did."

Harry Stebbings 41:21 What are the most significant things you think the team will do to reach that 30% speed increase?

Matteo Franceschetti 41:27 The biggest thing is what I told them, is they need to stop being, uh, too rigid on biweekly or monthly goals because if they're too rigid on that, when things happen, and in a startup things happen every day, they are not agile enough to fix them. So let's say we discover a bug today. That bug needs to be fixed tomorrow.And it cannot be, "Oh, but we have this roadmap and we are shipping this engineering feature and we can do it in two weeks." No. They do it tomorrow, and so you need to talk to your engineers and they, they need to understand the importance of fixing this, right, for a brand that is premium and is positioned at 2,000 bucks. And so that is the number one thing. We are too s- sometimes too rigid with our schedules.

Harry Stebbings 42:12 Did they resonate with that?

Matteo Franceschetti 42:14 After I explain and give examples, because then what I did in the memo, I gave good examples and bad example. We had an executive meeting, sorry, an executive offsite four weeks ago. And so I propose, I, I created another memo about a product that we are gonna launch. This was new. But I think the case, uh, is pretty strong and it's pretty obvious, so everyone understood, okay, no, this, this makes sense, it's not just Matteo idea. Uh, it makes sense for now from multiple perspective. And then they say, "When do you want that?" And I s- and I set a very aggressive deadline. And so the first answer for the first five minutes is, "Oh, it will take us a month to validate all the things, if this is possible with our data." And I say, "That doesn't work. Uh, we don't have a month to validate. How can you validate it in three days?" Then they started thinking and say, it goes back to the Elon algos of simplifying and reducing requirements, "Okay, we don't need 100% certainty on that thing. Maybe we need 80, and for 80% certainty, we can just do A and B tomorrow." The same across all the different teams, and by the end of the week, we had a full plan and we have validated everything.

Harry Stebbings 43:25 How does the requirement for perfection or close to perfection change when you're comparing needs in hardware versus software? Software's obviously retraceable, "Ah, fuck, bug. Let's replace it, ju- fix it, whatever." Hardware, "Ah, shit." (laughs)

Matteo Franceschetti 43:41 Yeah. Yeah. (laughs)

Harry Stebbings 43:42 How does that change?

Matteo Franceschetti 43:43 If you look in terms of percentages,

Matteo Franceschetti 43:46 the concept is, is very similar. It's just that the bar is, is different, right? And so when you wanna ship hardware, you will never have 100% confidence when you ship a hardware that everything is perfect. You will always discover things that you didn't know. And so a certain point, you, where y- you need to flip, uh, the narrative is about learnings. The whole reason of Velocity is not Velocity for the sake of velocity. It's you need to learn as fast as possible so then you can adjust things as fast as possible, which goes back s- to the point where if you are too rigid with very long term roadmap, that doesn't work in a startup. Ship the thing. When we switch from the mattress to the cover, right, which now is 99% of our sales, we did it in three days. And we didn't have a cover, but we had the wrap for the mattress and we had the cover and we wanted to see how customers would react to that, and this thing immediately became 20, 30% of the sales even if it was hidden in accessories. And so I always push my teams, "Can this help us learn faster?" And if the answer is yes, go and be bold and take the risk.

Harry Stebbings 44:45 Can I ask, can you take me to a time on both sides, one where being faster has helped you, and another where being fast has hurt you?

Matteo Franceschetti 44:52 So the, the, where it helped us was the cover, right, one of the mass- biggest win of the business. Uh, now sometimes we, we have a subscription. We could have launched the subscription in a way where we could have tested more things before and could be more sophisticated, but there we did it immediately after we launch it, and so we could have done it a month before instead of a month after.

Harry Stebbings 45:13 Can you change pricing? People are always like, "Oh, it's very hard to go up in pricing."

Matteo Franceschetti 45:18 You can change pricing. You can change pricing.

Harry Stebbings 45:19 So you disagree with the notion you can't go up and it's difficult and-

Matteo Franceschetti 45:21 100% d-

Harry Stebbings 45:22 Yeah.

Matteo Franceschetti 45:22 ... disagree. I think we overthink, because the whole point is you're a startup. How many people really know your brand? Even if you're big, even if, if you're growing well, uh, you know, you're not Apple, right? (laughs) And so th- don't fool yourself thinking that you are that big brand. You're just ... Then what you need to be aware is there is a lag, right? So if you change price, there will be customers that saw your product for the previous 30 days, 60 days, right, and they saw a certain price, higher or lower. Like, for example, in our case, we tested different warranties on the product, right? We have seen for X period of time people saying, "Oh, but what about that warranty?" Everything you do, you, you can do it, you can do it the same day. You just need to be thoughtful, which will, goes back to clarity of thinking, about thinking the second order effects. Will people ask this? W- what do you answer? Did you train the customer support to have an answer? So there is where you just need to be thoughtful, but you can do everything today.

Harry Stebbings 46:16 I, I, I agree with doing everything today. You mentioned, like, executive offsites, you mentioned getting everyone aligned in terms of moving 30% faster. Teams are the hardest (laughs) thing, always. Um, what have been your biggest lessons in terms of talent management?

Matteo Franceschetti 46:29 I mean, I think one of the biggest lesson is you really need to pay attention with when you hire executives from big companies. I think s- this is something really well known. I made mistakes there too. Uh-

Harry Stebbings 46:39 What, what are those mistakes that you would tell me as a young startup founder listening, who sees shiny logos from Apple and Tesla and SpaceX and goes, "Wow, that's great"? What would you tell me knowing what you know now?

Matteo Franceschetti 46:51 So first, even if these people were really the, the successful drivers of other, in, in other companies, right, which, which could be possible, you wanna make sure that first, uh, the historical time of when they were successful is still similar to yours. It goes back to what I was telling you, right? If you find people that were able to scale a business from 100 million to a billion but at the time where it was growth at all costs and they join your company and your company is designed around CAC efficiency, it will be really hard for them, right? They have already been successful, probably they already made money, they have their own playbook. That playbook doesn't work for you. So you need to find people that were really successful at scaling businesses with a very efficient CAC. That is a different game. The second is, if they come from very large companies, their requirements compared to a startup are very different. We are pirates, they are the navy, right? These people need to be able to launch a new product in two days just because they wanna test it and be fine with the customer reaction. If they start thinking about the brand, the brand impact, and this, this, and that, obviously, you need to be thoughtful, but you need to take some risks to learn faster, and maybe they reach a point where they were n- not anymore because that company was way bigger, and it's really hard to...... reverse back if they have been there two, three, four, five years. Sometimes some of these people, what I have seen is if they have already been successful, if they made money, you know, maybe they are at a different phase of their life. And instead in our company, again, we are pirates, man, if, we need to work on Saturday and Sunday to ship the thing and test it and- and it's a bold move, you have to do it.

Harry Stebbings 48:24 As I totally agree with you, can I just start on the... how does your hiring process look as a result of that? Like how do you structure it then to test for those?

Matteo Franceschetti 48:34 Yeah. So we made a lot of mistakes in hiring too. (laughs)

Harry Stebbings 48:36 (laughs)

Matteo Franceschetti 48:37 So, you- you-

Harry Stebbings 48:37 I've never met anyone who's like, "Oh, we did it well from day one."

Matteo Franceschetti 48:40 No.

Harry Stebbings 48:40 Never. Never does that happen.

Matteo Franceschetti 48:41 Um, the first thing is we accept to be

Matteo Franceschetti 48:45 slow at hiring, and slow not in terms of the process, in terms of the steps, but we have a bunch of steps. The second thing is everyone has to do homework. Anyone who joins the company, they have to, we give them a project, they need to work on that at home and they will present to a panel. I don't care if you are the senior executive and you are the- the CFO of Amazon, if you want to join Eight Sleep, you have to do- do your homework and we give you few days and a very complicated project and you will present it. If you don't want to do it, it's fine. For us, it's a way of selection, right? Because it- it- it shows how committed you are.

Harry Stebbings 49:24 And just so I get an u- understanding of this, this is a task that you would do in that role that is...

Matteo Franceschetti 49:31 Yeah, usually it's a problem we currently have in the function.

Harry Stebbings 49:34 Uh-huh.

Matteo Franceschetti 49:34 So we also learn-

Harry Stebbings 49:36 Yeah.

Matteo Franceschetti 49:36 ... what is your perspective and it's, yeah, it's actually like your first day of work.

Harry Stebbings 49:41 Okay.

Matteo Franceschetti 49:41 So this is a f- problem you would face the first day of work, put it together, put your thoughts, put your strategy, show me the data and show me your clarity of thinking.

Harry Stebbings 49:49 Have you ever had anyone be like, "Pfft."

Matteo Franceschetti 49:51 Oh, yeah.

Harry Stebbings 49:51 "Are you kidding me? I was a principal engineer at Tesla."

Matteo Franceschetti 49:53 Yeah, yeah. Particularly, you know, sometimes executives then you're surprised, sometimes the recruiters say, "Oh, this person will never do it. Th- they are a senior executive at Tesla." Then the good people, 100% of them, they do it.

Harry Stebbings 50:05 Oh, yeah, they have the humility.

Matteo Franceschetti 50:07 Yeah. Yeah.

Harry Stebbings 50:07 Yeah.

Matteo Franceschetti 50:07 And they get excited, right? So that is one. And then we don't hire anyone... so y- when- when you talk to a person at Eight Sleep there are three ratings. There is pass, hire, and strong hire. We don't hire anyone if there are not three strong hires.

Harry Stebbings 50:21 So three strong hires on the voting panel for that?

Matteo Franceschetti 50:23 Yeah.

Harry Stebbings 50:24 And how big is the-

Matteo Franceschetti 50:24 Or across, yeah, the- the people they- they spoke to.

Harry Stebbings 50:26 How many touch points are there with the team? Is that three out of 10? Three out of five? Three out of 15?

Matteo Franceschetti 50:32 It's probably somewhere between three out of five, three out of six.

Harry Stebbings 50:36 Okay.

Matteo Franceschetti 50:37 Yeah.

Harry Stebbings 50:37 So it's kind of at least 50%, so it's strong hire.

Matteo Franceschetti 50:39 Yeah, yeah. And the other thing, and this is more mental, is we are a default no hire. The default is if you come to Eight Sleep we don't hire you unless you really blow our mind. And the reason why this is helpful is, I don't know, one of my executive recently came back and say, "Oh, there is this engineer has a great pedigree, I know work at this company and that company, uh, I'm not a strong hire but I think I can, uh, I can grow this person into the role." And I say, "No, we are a default no hire. So unless you are extremely bullish on this person that you believe we would be dumb to let this person go, we don't hire." So I'm- I'm... we just stop here the process and we move on.

Harry Stebbings 51:21 Y- you mentioned kind of just being slow there, I get it, but sometimes you just have to hire today 'cause you- you need a seat filled and you need to actually start doing something. How do you determine just kind of rush the hire and just get someone in the seat 'cause-

Matteo Franceschetti 51:33 Yeah.

Harry Stebbings 51:33 ... they need to versus no, it needs to be the right perfect hire?

Matteo Franceschetti 51:37 So we hired really fast in 2019. I would say we probably screw up 100% of the people-

Harry Stebbings 51:46 (laughs)

Matteo Franceschetti 51:46 ... we hire because we had that approach. And so what we learn is the pain that you go through if you hire the wrong person is probably 10X bigger than delaying the hire by a couple of months. And so the way I look at this is in different buckets. One, I measure the top of the funnel of each executive and I see how many interviews they do per- per- per day, per week, and now I start having a baseline on my mind of how many they should do, how many people they should interview. But more or less we hire a person every 100, right? And so if they start telling me, "Oh, I'm struggling. I don't find this engineer in San Francisco for mechanical engineer," blah, blah, blah, and I see that they just did 30 interviews, it's just math, right? We... on- on- on- on an average we hire one every- every 100 people, if you didn't see 100 people, you're not gonna hire, it's not gonna happen, right? So that is how you create velocity. And then also I measure the steps. How long does it take to go from step one to step two? Is it 48 hours or it's taking you a week? And if it's a week, why were you so la- so slow? Right? So that is where I create velocity. But then in the selection of the candidates, man, the bar needs to be incredibly high. If- if you as executive are not strong hire, why are we hiring this person if you're not bullish? Would you take a flight to China with them and spend a week with them? Would you have fun? If no, what's the whole point? Would you be excited about having a one-on-one with them? If no, what's the point? That is one. Second, are there other people in the company that believe what you believe and so they are t- two more strong hires? If not, I mean, I love you, but we are a default no hire and so I assume no. And then there is my final step, which is still 50/50 and sometimes I feel so bad as a- as a- as a CEO, but if I don't click culturally with the person, I still pass, and I'm close to 50% pass.

Harry Stebbings 53:40 Oof.

Matteo Franceschetti 53:41 Yeah.

Harry Stebbings 53:41 Does that cause dissent? Like if you... if I'm working for you and I go through all of these steps, we go through the panel, they're great, th- I need this in my function and he... and he/she is great and then like you don't click?

Matteo Franceschetti 53:54 I mean, the definition of click, uh, let- let's expand it. So I send you a- a- a- a bunch of bullets with pros and cons. I try to be very detailed particularly when I pass, right? Because I don't want this to look like, oh, Matteo was in a bad mood, uh-

Harry Stebbings 54:11 (laughs)

Matteo Franceschetti 54:11 ... and he just say to pass, right? I have my...... premade, uh, playbook of how I run these interviews, right? And I run all the interviews with the same playbook. And that helps me because now I have seen thousands of candidates with the same playbook, the same questions, right? And so I can identify certain red flags faster.

Harry Stebbings 54:28 What are the playbooks?

Matteo Franceschetti 54:29 Uh, I, I go through, um, each of your previous jobs-

Harry Stebbings 54:33 Mm-hmm.

Matteo Franceschetti 54:33 ... and I ask you five questions. How did you find the job and what did they hire you for? And so that helps you because in how you found the job, if they had five, six jobs, you wanna see if they were recommended by anyone or their previous managers. That is a great sign, right? If it never happens, it's not a red flag, but it's not a positive sign. Second, biggest achievement. Biggest achievement seems a stupid question, but it's one of the greatest questions because if you start talking to me about, "Oh, I bonded with my people or my teammates," I assume that you bond with the other teammates. I'm talking about what has been the biggest achievement, your biggest contribution? You, not your team. And the best people come back with data. "I improved the CVR of the website from 8% to 9.2 by doing A, B and C." That is a great thing. If they're fluffy, still struggling. Third question is, uh, what has been the lowest point? And this is another great one because the, the, the... A lot of people, they start complaining and you see what they complain about. "Oh, my manager, they never gave me the right task," and this and that. Or, "They didn't give me enough freedom to operate," blah, blah, blah. Then you ask, "Who was your manager and what are they gonna say about you in the next reference check?" But you wanna say in the reference check 'cause they can't lie, because they know that you will do the reference check. And so there you immediately see certain people becoming rigid. "You know, I mean, we had a good relationship, but it was not really perfect. My manager..." (laughs) And the last one, "Why did you leave?" And there is a soft way to know did they push you out? Was it RIF? And when you start doing for five jobs, five, six jobs, you start seeing patterns. And so when I go back to you as an executive, it's not Matteo's opinion, it's I come back with a list because I take notes and I saw X red flags. And at that point they trust me.

Harry Stebbings 56:23 How long does that take?

Matteo Franceschetti 56:25 This is another great question. With the great people in 20, 25 minutes, I can go through five jobs. They're (snaps fingers) fast. There are some people where you go through two jobs in 30 minutes, and that is another red flag-

Harry Stebbings 56:37 Oh, for fuck's sake. The fluff.

Matteo Franceschetti 56:39 (laughs)

Harry Stebbings 56:39 I have it sometimes at half an hour and they're like, "And then I went to Stanford," and you're like, "Oh, no."

Matteo Franceschetti 56:43 Ugh. Yeah, yeah.

Harry Stebbings 56:44 I totally agree. Okay, so (laughs) we, we have that. Uh, I hate bounces, I call them, which is, as you said, a couple of times, five, six jobs. I'm like, if you were somewhere for a year and a half, and another for two years, and another for a year and a half, with ramp time and leaving time-

Matteo Franceschetti 57:01 Yeah.

Harry Stebbings 57:01 ... you basically did six months of work.

Matteo Franceschetti 57:03 Correct. I look at that a lot. That is why it's really important to understand how they found the next job. Meaning, if it was your former boss that gives you the opportunity of a lifetime and you leave after 18 months, I understand, right? If there was a RIF, fine. But otherwise, I see it in our company-

Harry Stebbings 57:19 Do you think if it's a RIF, fine, and, uh, this is gonna be very unpopular. If it's a RIF, does that not show that you aren't crucial?

Matteo Franceschetti 57:25 I think of that, definitely. I think even there you wanna see a pattern. I see sometimes people that have been part of three RIF.

Harry Stebbings 57:31 (laughs)

Matteo Franceschetti 57:31 And it's like-

Harry Stebbings 57:32 That sumbitches. (laughs)

Matteo Franceschetti 57:32 You know what, what you need to think there is, let's say there is a RIF after, I don't know, a year, or even six months sometimes you see it. And you see this happening multiple times in their career, like three, four times. Then what I start questioning is, how did you judge the company, right? How did- why did you pick this company, right? This- there is that part of judgment that is key in their career because it means they are thoughtful about what company they're joining and why. Then the- the company can fail. If you tell me, "Oh, look, I wanted to join a space company and it was..." Forget SpaceX, right? And then they fail. But, "I have been a dreamer of space for all my life." I get that. Not, not complaining. But if you get a company that is maybe debatable and it was really tiny, and you came from Amazon and you went to the com- y- you know, it just makes no sense. There is another area that I, I, I, I judge a lot.

Harry Stebbings 58:24 How do you feel about title? There's two things I want to discuss. There's title and pay. Uh, title I find, I'm intrigued. What are your lessons on how successful a hire is correlated to their negotiation on the title that they want or have?

Matteo Franceschetti 58:39 So usually, it's bad.

Harry Stebbings 58:41 Mm-hmm.

Matteo Franceschetti 58:42 Right? Because some of the best people, they don't really care about title.

Matteo Franceschetti 58:47 I understand that some people, you just still wanna go home, you know, to your partner, to your friends, and, you know, have some pride of, you know, what- what is your title and particularly if you're moving. But I ha- we had experiences where when we were hiring bad in, uh, 2019, a certain point, the VP of engineering changed the title of an engineer. And this guy started coming in completely dressed like with, with a T-shirt and a tie the following day thinking of being a manager (laughs) . And he was managing like, I don't know, one or two people, so it literally made no sense. But so the, the, the story there is y- you need to pay attention, meaning sometimes you can play with titles. I don't like it 80% of the times. You can do it, but it's less about the title and making it clear that you're still an IC versus a manager. And we don't make anyone a manager unless they already led a bunch of squads successfully. So my step is, you will never become manager immediately, right? Going from IC to manager. You need to be a manager before you're formally a manager. The easiest way for us, we, our teams are structured in squads. So there's the engineering team, there is the product team, and all that. Then they work in squads. So maybe there is a PM, there is two engineers, and there is a designer, right? And there is a squad lead, so the person who is leading that micro business unit, right? I wanna see you leading one of those things, or at least be part of the leadership of that squad successfully before we ever talk about you being a manager.

Harry Stebbings 1:00:14 When can you play with titles?

Matteo Franceschetti 1:00:16 After multiple years, after, uh, an insanely great performance, so you need to be, you know, every s- six months or 12 months that you have the, uh, your performance review. You get rated on all these principles, for each of them, strong, medium, low, right? And if you are a top performer in the company, probably you are at the point you're now asking for a title change, but if you do, that is the only case, uh, when we consider it.

Harry Stebbings 1:00:42 I think a lot of people, I mean this respectfully to you, will be listening to this a little bit daunted because there's a lot of founders who are listening who go, "Shit, I don't have any of these frameworks or playbooks." Did you have them from day one? And can they be implemented halfway through?

Matteo Franceschetti 1:00:56 Yeah. I didn't have them since day one.

Harry Stebbings 1:00:58 Mm-hmm.

Matteo Franceschetti 1:00:58 I literally spent a lot of time studying o- on a weekly basis, right? I really studied the best. You will see that a lot of the- the- the things I share, for example, they come out from people like Keith or others. It- it depends on- on- on the subject matter. But it was developed o- over time.

Harry Stebbings 1:01:17 Yeah.

Matteo Franceschetti 1:01:17 But it makes the difference. I can guarantee you, that is time that is well spent.

Harry Stebbings 1:01:23 Would you say the playbook's the most important one?

Matteo Franceschetti 1:01:25 Yes.

Harry Stebbings 1:01:26 Yeah.

Matteo Franceschetti 1:01:26 There is one we didn't cover yet, that is writing. W- we're obsessed with writing at Eat Sleep.

Harry Stebbings 1:01:32 Uh, w- we'll discuss writing after this. One other one that I just have to... Pay. H- what have been your lessons on pay, when to move, what it can indicate?

Matteo Franceschetti 1:01:40 So we do it every year for people. We have... I don't think we are very sophisticated on this, so whatever I say, I think it works for, I would call it early stage companies. I think we need to raise our bar on this. But what we do today is we have three levels of, uh, compensation increase based on you're a top performer, you're okay, or there is no change if you're a, a low performer.

Harry Stebbings 1:02:04 If you're a low performer, no change, should you not be moved on?

Matteo Franceschetti 1:02:08 Yeah, yeah. That would be the first thing I would, I would, uh, discuss with the executive, right? And the reason is, is not because you wanna be, you know... you don't wanna be fair. Actually, you want to be fair, so what you need to do there is first you need to talk to the person, right? Because if things are not working, there is always a why, right? Most of the times people are not that. And so maybe we're not the right fit, you know, as a culture, as a product. Maybe we're not the- the right fit for this time of their life, right? We are very intense as a culture. And so if you're not intense, if- i- if you have other things going on in your life, it's highly, you know, we- we should respect that, but at- at the same time, so you cannot be friends with everyone, I always tell my team, right? So you need to pick your friends. And so talk to them, give them an opportunity to improve and raise their bar. If they do it, that is success to me. If they don't, then we- we need to part ways. But treat them fairly.

Harry Stebbings 1:02:58 I think one of the big mistakes I see a lot of founders make is they're like, "You know, Matteo, he's not great actually here, but we moved him to this other side of the business where he's actually quite good, and that- that works." And I always ask the question, "Forgetting the existing relationship with Matteo, if you were hiring for that new position that he was in, would you have hired him against the other candidates?"

Matteo Franceschetti 1:03:18 Correct. Yeah.

Harry Stebbings 1:03:19 And it's like, no, actually, he's not as good as the other community managers.

Matteo Franceschetti 1:03:23 Yeah. And the other typical mistake is people come back and what they say is, "I need three months, so I started looking for a replacement. I still need some help here." And at the beginning was, I was accommodating that. Now I became ruthless. I say, "No. If you spoke to the person, if you gave them the time to adjust, and if that didn't happen, now you pull the plug." And the reason is first you need to let these people move on and find the right job, right? You need to be respectful. You don't keep them hanging, and you already know that you wanna look for someone else. And second is, if you don't let the person go, you will never move on to really find the right partner. So treat them fairly, give them an opportunity. If we can help them, recommend them in other companies where they think they're a good fit, we do. You need to find someone who is the top 90, you know, in the 99th percentile for the job.

Harry Stebbings 1:04:16 Writing. The only thing I write, Matteo, is tweets.

Matteo Franceschetti 1:04:21 Oh, you're very good at that.

Harry Stebbings 1:04:22 Thank you so much. Yeah, you know, I have, I've crafted it over many years. Um, let's just start with, like, you've said before about the importance of writing. You said it's so important for clarity of thought. Help me. Why is this so important and how the fuck can I do it? (laughs)

Matteo Franceschetti 1:04:38 I will not take a meeting with anyone in the company if I don't get an agenda/memo. We call them agendas, but they are memos. It could be from a one page or a half a page. It- it depends on- on... But an average meeting, it could even be five pages, right? Like we have a weekly growth meeting where we review all the data from the previous week, and there is, like, multiple pages with all the data. Obviously they come from the dashboard, and there is a bunch of thinking about what is happening and why. So I'm not gonna take any meeting, you can't schedule a meeting with me if I don't get an agenda. I get all the agendas the night before.

Harry Stebbings 1:05:12 Mm-hmm. What makes a good agenda versus a bad agenda?

Matteo Franceschetti 1:05:15 Massive difference. And usually probably takes at least six months to develop someone to write an incredibly good agenda. Because the best agenda, they're shorter, they go straight to the point, they are data-driven, and they're very clear. And so every, every-

Harry Stebbings 1:05:30 Do they posit opinions? Do they pos- like, do they say where they want to get to at the end? Like, how are they structured? I know it sounds weird.

Matteo Franceschetti 1:05:37 Yeah. So usually there is an executive summary at the top, which is obviously the summary of the key topics with the key data. Then there is, uh, points to be discussed, and then usually there is the- the real meat, right? And so this is usually based on OKRs and so... Or, or goals. Our goals usually are monthly. Uh, four to six weeks. And so let's say you have a goal to grow 1.4x, grow to improve CVR, and go to reduce CAC. You have three section in the agenda, you're, you tell us what is happening in each of them, what we are doing, what's working and what's not working. This is usually a good framework, right? Summary, what's working, what's not working. Summary, what's working, what's not working. And you support it with data. And then at the bottom, there is an area for action items that the team takes live. And so when we discuss something, we put the action item, the DRI, so who is in charge, and the deadline. And the deadline-... gets discussed, meaning that is how you enforce velocity, right? It's not, oh, a week. In my mind, if people talk to me and they don't set a deadline, it is the same day. That is how my brain works. And sometimes with junior people, it happened, like, two Sundays ago. I asked for something because I had a meeting, uh, early on, on, on a Monday and I asked this thing to the finance team. The person didn't... Say, "Oh, yeah, I'll get back to you." And then at 9:00 PM I didn't get the thing and I say, "Where is the thing?" And they say, "Oh, I was thinking to send it tomorrow." And I could have done a better job there because I, I should have set the deadline so I think it was my mistake. But usually on my mind, if I don't set the deadline, it's the same day.

Harry Stebbings 1:07:07 Is it wrong to ask someone to do that on a Sunday? I would ask them.

Matteo Franceschetti 1:07:11 Uh-

Harry Stebbings 1:07:11 I do ask them. I ask, uh, uh, bluntly, I, I pay... My rule is I pay you really well, and we have fun work.

Matteo Franceschetti 1:07:18 It depends, meaning, if it's just because, oh, it's just Matteo, yes, uh, why do I have to bother you on a Sunday? If I have a major, massive meeting that could drive a multi-million dollar fundraise at 7:00 AM on a Monday, I think it's not debatable. I'm doing the best for the organization and for the job of hundreds of people.

Harry Stebbings 1:07:37 Mm-hmm.

Matteo Franceschetti 1:07:38 And so, um, it depends. That, that is a startup.

Harry Stebbings 1:07:41 So going back to the agendas, do you train people on how to write them?

Matteo Franceschetti 1:07:45 Yes.

Harry Stebbings 1:07:45 Yeah.

Matteo Franceschetti 1:07:46 Yeah.

Harry Stebbings 1:07:46 What does that look like? I come into Eight Sleep-

Matteo Franceschetti 1:07:49 One, one more thing and, and then I answer. The other thing we do in the meetings, we don't go through the agenda. We just go through the comments. So everyone had to read the agenda in advance. We do G- Google Docs. You l- everyone leaves comments and you just go through the comments. The rest, we assume that you have read it, you're fine, and there is nothing to be debated. And so sometimes our meetings can be very short even if the agenda is very meaty and, I don't know, three pages, four pages of an agenda, maybe there are three things to discuss. We discuss those 12 minutes, and then we are all free. The way you do it is by giving comments. Oh, this is not clear. What is the data supporting the thing? What's happening here? What is the second or third effect? Why is there, is only one option? What are the other option that you consider? What is the effort and impact of this? How did you pick it, right? Smart people, at a certain point, they will start understanding now the question that will come. And then usually executives, uh, particularly in the early days, they try to prepare and work on the agenda before the agenda gets shared with me or the rest of the executive team because usually the first mistake at the beginning is people are very long, they're a bit confusing, they don't use data enough. Uh, these are the typical mistakes. And, and, and so even there, I started having a pattern, right? The, the speed at which I can read a, an agenda is indicative of how good is the agenda because I, I, I can go through it really quickly.

Harry Stebbings 1:09:09 I'm really sorry. I've got twins. It's been a fucking manic weekend. I have my own, uh, marketing campaign to do. I just didn't get to the agenda, Matteo. I'm really sorry. Should I come to the meeting? Should I not come to the meeting?

Matteo Franceschetti 1:09:21 No, we cancel, we canceled the meeting. But you know I'm not gonna be happy. I mean, it, it depends. If we were shipping the new app redesign, right?

Harry Stebbings 1:09:29 (laughs) I don't work for you and I've got goosebumps. (laughs)

Matteo Franceschetti 1:09:32 To, to, to me, it goes back to, like everything, you need to be (laughs) . It didn't happen because you didn't plan accordingly and so then I'm not happy. If you were shipping the, uh, new redesign of the app and w- you were monitoring all these metrics and then there was an unexpected bug, right? All the things that you couldn't expect, but those were a P0, of course. At, at that point, do we need the meeting or you need to stay focused on that stuff because it's a P0, right? We call them P0, P1 and P2. So if there are P0s, we cancel the meeting and maybe we go async or maybe you don't have the agenda. But if it was because of lack of thoughtfulness in how you plan your schedule, that doesn't work.

Harry Stebbings 1:10:13 Does that happen often?

Matteo Franceschetti 1:10:14 No. (laughs)

Harry Stebbings 1:10:16 Like, never.

Matteo Franceschetti 1:10:16 But even there, because I think s- sometimes what I try to coach is just be smart, right? If you are really busy, just send a very brief agenda with literally three bullet points. The, the point of the agenda is not about being long. No one wants to read long documents. You can give me time back, right? I save usually an hour every day before I start working just to review all the agendas of the day. Write three bullet points. If you were bu- busy doing a P0, I'm sure there is a lot of value in that P0. Just write a bullet about what happened, right? "We shipped the app to 95% of the customer yesterday. We found this bug. We solved it within, uh, three hours thanks to Engineer X." I'm very happy.

Harry Stebbings 1:10:56 Okay, so we never not read it. Going back to, uh, the training, what does that look like? So I join Eight Sleep. Yay, thank you for hiring me. How do you train me to write agendas and memos?

Matteo Franceschetti 1:11:07 The only thing is writing a lot of agendas. You start-

Harry Stebbings 1:11:11 And you give me case studies, here's 10 great examples.

Matteo Franceschetti 1:11:12 Well, every, every... Let's say there is a weekly meeting for growth, there is a weekly meeting for ... there is a weekly meeting for product, right? So there are these recurring meetings. And so again, you go back to the executive summary and then the OKRs, and you might write your KR or if you're the lead of the squad, you write everything. And at the beginning you will write something that is long, that is not clear, is not data-driven, and the executive will, will help you. But it's