Rujul Zaparde: Why Hiring Inexperienced People is Better | E1144

1. 0:00 – 0:47

   Intro

   1. RZRujul Zaparde0:00

      I would much rather invest in the person that has potential, that maybe hasn't done the job before. They don't have the experience, so what are they gonna do? They're gonna first principle the problem. And so they're just generally more likely to have more original ideas. Speed is actually really, really an advantage, and it helps you. Like, you're not gonna be right, so you might as well just learn quickly and move on.

   2. HSHarry Stebbings0:18

      Ready to go? Rajul, listen. Uh, I heard so many good things from Anna Khan, from Ali Rowghni. Thank you so much for joining me today.

   3. RZRujul Zaparde0:39

      No, thank you so much for having me.

   4. HSHarry Stebbings0:41

      Now, I would love to start. I always think great entrepreneurs are shaped early in their career. If we think about people who saw

2. 0:47 – 2:38

   Background

   1. HSHarry Stebbings0:47

      you early in yours, how would your parents, how would your teachers have described the young Rajul?

   2. RZRujul Zaparde0:52

      Well, so what I do remember, uh, is that I was always, um, even like, I mean certainly high school, but even in, in middle school, like, I was always with my friends. Like we're always doing some like business thing, you know? We were always doing something like that on the side. Like I remember at one point, we like figured out how to make some really terrible, really, really terrible, uh, video games. Uh, I'm not even sure what we were using back then. This is in, you know, early 2000s. Uh, and then we would like sell them to other people in different schools, and like I remember we'd even started something that was like, uh, you know when you're driving around, sometimes you've seen those bumper stickers that say like, "Hey, am I driving poorly?" Like, "You can report me at this, at this number." Most of them are for commercial vehicles, uh, uh, like trucks and, you know, vans and things like that, and it's ... And we had started something like that for teen drivers. We, we certainly couldn't drive at that, at that time. Uh, and so we sold some bumper stick- You know, so it was like that was the type of thing that, uh, uh, uh, we were working on. It was always something or the other.

   3. HSHarry Stebbings1:51

      Do you agree that you should always be embarrassed by your V1? Do you agree or do you actually think that, no, you do need to put out good product today given product quality?

   4. RZRujul Zaparde2:00

      Uh, I, I honestly think you'll learn so much more with number one, like just put something out there. Because chances are what you're building, probably not right.

   5. HSHarry Stebbings2:08

      Right.

   6. RZRujul Zaparde2:08

      You just don't know what's not right about it, uh, and you won't know until you, like, put it out there. Uh, and, and one, you know, one thing I think you can always do is like if you lack something, you can always make up for it in service. You can ask better questions, you can learn, you can iterate faster, and people really appreciate that. Uh, that's of your value.

   7. HSHarry Stebbings2:26

      I totally agree, and you can build such customer advocates in the early days by actually just being so responsive and so intuitive to their feedback. Totally agree. Uh, tell me, dude, how d- We're gonna get on to learnings from past, but just in terms of Zip,

3. 2:38 – 5:33

   Founding Zip

   1. HSHarry Stebbings2:38

      why did you choose this? What was the a-ha moment for you when it came to founding Zip?

   2. RZRujul Zaparde2:44

      So it was a problem that my co-founder Lou and I, uh, that we had both experienced. So we had, you know, we, we actually met, we both worked together at Airbnb. Uh, Lou was an engineering leader at Airbnb. I, I worked as a product manager, uh, and, uh, you know, what happened, uh, was that, you know, I remember actually one day, uh, we, we woke up to, to an email, uh, message saying, "Hey, uh, Rajul and, and Lou, uh, you know, so-and-so has left the organization. You guys have been designated, uh, as, uh, the, the business owners, uh, uh, of our contract with this." It was a large, large contract, software contract. You know, there's a renewal coming up, and we were assigned somebody from the procurement organization because it was such a large contract. Uh, and we said, "Sure, you know, we'll be the business owners. Like, tell us what we need to do." Uh, and the first thing we heard we had to d- what we had to do was, um, we were told, "Hey, you have to go to our ERP system, uh, and create a PR." Uh, and I remember we were both, we both looked at each other and we're like, "Sorry. Uh, uh, what?" Uh, and, uh, and the person was like, "Oh, it's a, it's a purchase requisition." Uh, you know, at the time, the only PR that we knew was a, was a poll request. Uh, and, uh, and so we were like, "Oh, a purchase requisition. Okay. I mean, I can understand what that means." And, and so of course I remember we go to the ERP and the first question is, "Select your cost center," uh, and there's thousands and thousands of options in there, and no one has ever asked us or told us what cost center we're in. Like, we have no idea what to select. Uh, and so we picked something. Uh, and then of course later on it asks, "What's the, what's the GL code?" And we're like, "We don't even ... What is a GL code?" at, you know, at the time. Uh, and, and of course it's an accounting classification is what, what it is, right? But we have no idea. Thousands of options. We select something, hit submit. Uh, I remember we distinctly went back, uh, to, to, to the procurement, uh, person who assigned it to say, "Hey, we're done. Thumbs up." Like, "Just, just let us know when it's approved." And he said, "No, no, no, no, no. You're not going anywhere. That's just, that's just the PR. Uh, you know, once you get the contract, it's gotta get uploaded over in this system because that's where the legal team reviews contracts. And, oh, also it's a software renewal so you have to go raise a, you know, an IT ticket over here, because the IT team needs to review it. And also we're sharing all this customer data, so now w- you've gotta raise a security request over here. Uh, you've gotta raise a privacy request over there." Um, and so we'd actually do five or six different intakes, uh, if you will, of this information, uh, and then of course, of course as you would expect, you know, in a month or two months it's, it's very hard to understand exactly, like exactly what's happening with this request. And is it blocked? And if so, where? Uh, and I remember any time I would have to ask, uh, uh, the gentleman we were working with in procurement, uh, the poor guy would have to like, he would be like, "Hey, you know, I'm really sorry. I really don't know. I h- I'll get back to you tomorrow," because what he was doing is just pinging all these people manually. Uh, and, and so we felt like there

4. 5:33 – 10:05

   Thriving in Massive Markets with Minimal Competition

   1. RZRujul Zaparde5:33

      had to be a better way.

   2. HSHarry Stebbings5:34

      Okay. Uh, I ... The thing you learn about the shows is we have schedules and then I just go for it. So, um, one of my biggest things that I look for when investing today is like massive markets, obvious, but with very low competition. That's a, a strange one that other people don't necessarily have. When you look at this market, uh, like as a newbie, you're like, "Gosh, you just type in, you know, procurement or spam management and it's like ad, ad, ad with big names." When you looked at it, were you not like-... well, Christ, there's a lot of players, this is not attractive because it's so competitive?

   3. RZRujul Zaparde6:05

      Oh, uh, I mean, i- in a sense, absolutely, um, but there's, there's a, there's a pro and a con. The pro is that, well, if there's a lot of parties in the space in general, that means it's a big space and there must be some real pain here. So for us, it was like, "Huh. There's enough here, there clearly..." You know, uh, like, we're not taking on, like, market risk, uh, in a sense, uh, but, but what's our, like, what's the unique insight we have based on the problem, uh, that we experienced, uh, when we were working together? Uh, and, and what we realized and what th- that unique insight was, was, "Hey, wait a minute. In the last 10 years, 15 years, two changes have occurred in the world." You know, one, buying has become much more distributed. I mean, it's hard for us to believe, you know, but 20 years ago, there was a time when the IT department, for example, would be e- like, "Hey folks, these, this is all the software we're buying this year. It's gonna come to us in CDs. And we decided we're gonna buy it." And then people would be like, "Cool." And no one else would be buying anything. Uh, right? Obviously, that's not the world that we live in today. It's gotten so much more distributed. And so when things get distributed, user experience matters a lot more because you're not... You, you know, if it's a small group, you can just train them. But if it's your, you know, thousands of employees, you, you can't train all your employees on how to buy something.

   4. HSHarry Stebbings7:13

      How often do you think about the centralization of budgets? You know, with budgets generally contracting or being frozen, a lot of people say CFOs are much more active in terms of the buying process. Uh, you're like, "Actually that's not at all what we're seeing and that's bullshit." Uh, how do you think about the centralization of budgets given what we just said there?

   5. RZRujul Zaparde7:32

      Yeah, yeah, uh, it's, it's, what I would say is it's decentralization of the initiation of the spend and centralization in many aspects of the review of the spend. Uh, and so, so you're totally right. Uh, I mean, one of the things we see across the, the hundreds of customers that we have today is, you know, our cust- our customers control their delegation of authority in the, in, in zip, right? So, hey, if it's above... The simple example is, hey, if, if it's above, you know, $100,000, then I want my CFO to review, versus another company might say it's a million. Another company might say it's 10,000. Um, and I think it was interesting to see with the macro climate of the last 18, you know, months or, or whatever it's been, you know, delegation of authority certainly came down, uh, across the board in, in many, many organizations, um, because they will not have the CFOs to see more.

   6. HSHarry Stebbings8:16

      By how much in general? Is it like a 25% reduction where it used to be, hey, for 100K contracts, it's now 75? Or is it like a 75% reduction, generally speaking?

   7. RZRujul Zaparde8:27

      So I would actually say there's extremes. I think it's, like, no reduction to extremely substantial reduction. And I'll give you one example, uh, that, that, uh, one of our customer champions had, had shared with me there. It, uh, this is a, a champion that works at maybe a 3,000, 2,500 (clears throat) person company. He said for, for a handful of months, the CFO had reduced, uh, uh, their budget all the way down to $5,000, uh, which is really low, right? I mean really. I mean that's really, really low, uh, because the CFO was just concerned we're spending too much money and wanted to just see everything. Um, they then later increased it 'cause it was just, you know, uh, uh, too much throughput once they'd gotten a, some, some view of it. Um, uh-

   8. HSHarry Stebbings9:04

      Because the CFO died. (laughs)

   9. RZRujul Zaparde9:06

      (laughs) Yeah, yeah. They were getting pummeled, uh, right? With s- the level of requests. But, you know, I think, I think actually part of the value too is, or I think it's important to be able to, like, be fluid with these decisions, right? Uh, a lot of the changes in older school systems, I mean, it's hard to make changes like that on the fly.

   10. HSHarry Stebbings9:21

       Totally. Is it a product marketing challenge? So again, when I'm investing, I'm like, okay, so competitive market, but actually Rajul and Lju have a unique insight. Then it comes to, well, how the fuck do we stand out in such a crowded market? How do you think about a product marketing challenge when the key buzzwords are kind of the same and you need to stand out?

   11. RZRujul Zaparde9:41

       It's an education problem. It's challenging and you have to select in- people in and out. Like, most people won't get it. Uh, and that's okay because if they all got it, somebody would have, you know, started a company already. And so you have to, like, filter out, oh, I think this person's just not, they're not there yet, they're a late adopter, whatever. It's okay. One day they'll buy, but not today.

   12. HSHarry Stebbings9:59

       It's a big problem to go after... (laughs) Or, and you're like, "Fuck, this schedule is useless, Hari." It's a big problem to go

5. 10:05 – 13:39

   Product Decision: Balancing Specificity & Versatility

   1. HSHarry Stebbings10:05

      after... I'm just so interested. It's a big problem to go after, like, first off from day one. How do you think about the product decision of whether to go in with a kind of feature that solves one specific pain point or a much broader platform play which really tries to address a lot of the problems from day one? How do you think about that?

   2. RZRujul Zaparde10:24

      You'll eventually get to the latter. Uh, but I think for, first off, like, I mean, given how much capacity you have, which is basically nothing when you're starting out, you have to find... And it's actually, it's actually healthy that you don't have that many resources because it's the forcing function to say, "What is that one thing, the one pain point that somebody will be like, 'You're right, I need that thing,' and, like, 'It doesn't exist otherwise in the world for me'?" That, because what, what actually happens is when you have a platform, other people have platforms too and they all do everything. But then the question becomes, how do you differentiate your pro- platform from somebody else's platform? And you'll actually always come back to that one thing that you started with, which is, "Hey, no, no, no. This is the thing that makes us special in the world. No one else does this at anywhere near the level that we do. That's why our platform is better. We, sure, we do a lot of things that they do too, but this thing is different." Uh, uh, and it's your wedge. It'll always be your wedge.

   3. HSHarry Stebbings11:17

      With the first wedge that you had, that first pain point that you identified, did it immediately sell? Like, was there immediate market pull and you were like, "Okay, great. We have early product market fit with first pain point"?

   4. RZRujul Zaparde11:30

      Um, I would say, (clears throat) I would say it was, it was, uh, relatively quick, but it, it took us maybe six, seven months to sort of convince ourselves and be able to better explain what we're doing to our prospects. So to your point about product marketing, it's, you know, you have to start with the positioning and the messaging and it, and that probably took us six months. Once we started to figure out how to, like, explain what we're doing and clearly differentiate it, it certainly, certainly accelerated.

   5. HSHarry Stebbings11:58

      Great. How did you learn to explain it? For founders listening today who don't feel like it's resonating, who don't feel like it hits, what lessons do you have from that six-month period of exploration to your ultimate it started to hit that you'd share with them?

   6. RZRujul Zaparde12:14

      Yeah, yeah. No, it's a great question. So what we actually did... So we were actually quite rote (clears throat) in, in our approach here. Uh, every week... Uh, actually, initially it was every day because we had so many calls and then we were like, "We don't need to review this every day." We did it every Sunday. Uh, we would write out our, quote unquote, "investor pitch," which is like, you know, couple sentences of, like, what Zip does, but the investor view of it. (clears throat) You know, talking about, like, the market, that kind of thing. And then the customer pitch. Uh, and we would keep... At one point we were looking at both of those in one Google Doc every single day. Uh, and it'd be like, "What did we learn today?" Like, "Would we change how we frame it?" Uh, and then we would test it for all the calls that we would work with, we would do the following day. Uh, then it got to a point where we're like, "No, we don't need to change it that much. Let's re- (clears throat) review this every week." And so we basically had this process where we're constantly reviewing. Then as we started to talk to more people, we sort of morphed this and literally built an Excel... like a, a Google Sheet and morphed it into ICP. Like, we had different IC... potential ICPs as the row, uh, as each row because we didn't know, like, are we gonna sell to IT, legal, procurement, which ended up being the case, finance, right? Like, all these people have to approve things that people are buying, but who's gonna really, like, be the actual ICP buyer? It might sound intuitive that, yeah, of course you would be selling your software to procurement and finance people, (clears throat) which is the case, but it, it didn't feel that way. In fact, our first handful of customers were IT, which was actually, you

6. 13:39 – 19:32

   Managing Early Customer Demands

   1. RZRujul Zaparde13:39

      know, interesting signal.

   2. HSHarry Stebbings13:40

      I- it's totally interesting signal. Does that tell you something in terms of sometimes you need to say no to customers? It's like sometimes big early customers can distract your product roadmap, can take you away from what you're actually meant to be doing. I find sometimes early signals can be misleading. Like you said there, the fact that IT people bought you does not mean that th- they're the buyers ultimately. Procurement is your home. Do you know what I mean?

   3. RZRujul Zaparde14:03

      100%. 100%. Um, and it's... You absolutely should, uh, if you need to, (clears throat) you should not close a certain type of customer. You should fire a customer. It, it happened to us maybe, uh, when we were about a year old, um, we signed... Or not even a year old. It was a company, we signed a, uh, a co-... a customer that had hundreds of thousands of, of employees. Uh, and it was, you know, to be fair, it was a, a, you know, sort of a pilot type engagement and, and, you know, I realized, I mean the company was only 15 people or so, 12, 12 to 15 people. Very quickly in implementation I realized, wait a minute. Uh, because I would go to every implementation call at the time. We're not gonna be able to make this company successful without sacrificing an extremely, extremely large percentage of our roadmap. Uh, and it's just not the right thing for us to do as a company. Uh, and so I had a really great call with our champion there and, and, and just, "No, you're... I appreciate... I respect the fact that you're telling me that you guys can't, you know, make us successful right now and call us, uh, when, when you're ready." And then we called them later, uh, uh, you know, a year after that. But, but that was a tough decision in the moment.

   4. HSHarry Stebbings15:07

      It, it's bold and a lot of people take it because the validity that it brings to subsequent customers and to investors is, is real. Signing a massive contract really brings confidence and momentum to, to especially investor bases. I do want to just hone in on, like, the right problem. I find a lot of founders aren't actually solving the right problem. You mentioned that actually it was pretty early that approvals was the right entry wedge. What advice do you have for founders on how to know whether they're solving the right problem and that discovery process?

   5. RZRujul Zaparde15:36

      I think it comes down to repeatability, right? Like, really everything about building a company is about... In some ways it's about repeatability. It's like, "Okay, can you do this? Then can you do more of it? And then can you have other people do more of it? And then can you have even more people do more of it?" You know, and maybe quality degrades, but it still works because there's enough fit pulled from the market. Uh, and so really the question would be, are you able to repeatedly use that same type of pitch and narrative to the same type of person and yield the same type of result? And if the answer is no, then that means you kind of haven't figured it out in some way.

   6. HSHarry Stebbings16:11

      I totally agree with you. What do you think the biggest mistakes are that founders make then? Is it the fact that they don't nail the repeatability of that pitch, so to speak? Or is it the fact that they just go after the wrong problems?

   7. RZRujul Zaparde16:21

      I think there's... A couple of common mistakes are, uh, one, getting free customers or design partners, um, which is I think a used euphemism for a free customer.

   8. HSHarry Stebbings16:29

      Wait, wait, wait, but this is a, this is like a, a boom. You, you and I both know, dude. Every founder is like, "I've got 12 design partners." And I'm always like, "What does that mean? I've got a blowup girlfriend?" Like (laughs) I don't understand this. Why do you not, why do you not agree with design partners?

   9. RZRujul Zaparde16:46

      Well, you know, so, so Lew and I were very, uh, uh, strict in our thinking. We decided, "Hey, we don't want to..." Like, look, at the end of the day, if we pick an idea, we're gonna work on it. More than anybody else, like, we don't want to waste our own time. So what we're gonna do is this. We're gonna make sure that the first 10 customers we close, we're gonna close them cold off of LinkedIn. They're not gonna be people we know. They're not gonna be warm introductions. They're not gonna be referrals, nothing. They're gonna be cold because if they buy it, they owe us nothing in the world. Then they actually have this problem and they're willing to pay, and we're gonna charge real money for it. Now, of course, you know, when you're starting out, you have zero customers, of course you don't charge that much money and it goes up over time, (clears throat) but they're gonna pay, uh, and, and something material for us at, at, at the time. Uh, and, uh, and, and, and I think a lot of the times, uh, you know, this is my second company, but I can just see how different my mindset has been this time around than the first go around. But, like, you know, early on you're, like, trying to keep your investors happy. You want to, like, make it feel like it's working. And the second time, or at least for me, it was like, "Look, we're just here. We want to build a generational company." Like, we'd rather just know this is a bad idea quickly, so we can go work on something else.

   10. HSHarry Stebbings17:50

       How do you do it differently when you are just trying to make your investors happy versus doing it for you and doing it to build a big company?

   11. RZRujul Zaparde17:57

       Oh, it's easy. You, well, you care about things like optics. You care about, you know, are the metrics all going up, uh, consistently and, you know, like all these little things and, and, and when you, when you actually are just like, "You know what? I just want to build a really big company. I just want the thing to work." You just don't care. Like, right? Like, why do you... why would you care, like, what happens to this? Like, you're just here to make the thing work and you want to protect your own time. Uh, and, and actually when you do that, everything actually does start to look good.... uh, but it's the right-

   12. HSHarry Stebbings18:23

       So I cut you off. You said, like, design partner's number one, people make mistakes with that. Any other glaring mistakes? Mistakes in terms of solving the right problem and actually how they articulate the repeatability of that. You said repeatability being the most important thing.

   13. RZRujul Zaparde18:41

       Oh, yeah. I, I think, I think, like, design partner, and I think, like, being very clear. Like, it's so easy to fall into, like, slightly customizing the product, um, for each different type of customer you have. And you have so few at the techs you care about a lot of them, right? You don't want to have somebody churn. And then you, like, you start to, like, it's, you ha- you've built something that's, like, a different, slightly different thing to five different people. This, I think, goes back to the theme about repeatability. I've seen so many founders do that too. Uh, and, and you don't, you know, you can talk yourself into it, but then that, that makes, it makes it really harder, right? Because every, like, how do you prioritize feature requests? How do you message your product on your website? Like, are you speaking to this persona or that persona or this problem or that problem? It's like, you know, getting more customers is like, you know, you're like, y- you need, like, a weapon that you're, like, you know, going into the world with, and you want the sharpest possible point. You don't want something that's blunt.

   14. HSHarry Stebbings19:30

       I totally agree with you. (laughs) I love

7. 19:32 – 27:24

   Rethinking Product-Market Fit: Experience from Zip

   1. HSHarry Stebbings19:32

      that analogy. You mentioned repeatability time and time again there. And for investors, they say, "It's when you have repeatable and scalable processes, that is when you have product market fit." And I just think product market fit is the most bullshit thing ever, because you scale to a new channel, you scale to a new audience, you scale to a new pricing level, and fuck, you don't have it again. And so I'd love to just hear your thoughts. Like, how do you think about product market fit, having had it with Zip, having seen it firsthand?

   2. RZRujul Zaparde20:01

      No, completely agree. Product market fit is certainly not binary. Uh, it's like, it's like a, you know, complicated matrix, uh, and like the first cell in that matrix is, like, the first set of product market fit you have. But as you distribute, I mean, like you said, you know, we're talking about platforms. As you add more capabilities, more products, right, you have to go through product market fit for every subsequent product that you launch as a company. Uh, uh, and then you have to do the same thing for every persona you speak with, every channel, uh, uh, that you have, uh, every industry. Uh, I mean, it can get gloriously complicated. Uh, as a vertical, right, you might, you might, you know, if you sell to retail versus you sell to financial services, I mean, just because you have market fit in tech doesn't mean you have market fit in financial services and so forth.

   3. HSHarry Stebbings20:44

      Do you build out a verticalized sales playbook, then? Because you can have very distinct customer profiles that you can go after with that sharp, sharp spear, and it's much more effective to do that than have a horizontal product marketing approach and just kind of going at everyone with the same message. And for founders listening, is that the best way to do it?

   4. RZRujul Zaparde21:02

      So we don't do that at Zip, and, and I think it may be, uh, like we don't verticalize our sales organization today, and, and it might, uh, uh, and it's, some of this is, I think, product specific, but it is extremely, extremely expensive to verticalize your sales team. And, and at least from, from other founders, uh, that are much ahead of us that I've spoken to, like, it's when people do it, it is at a much, much, much different level, uh, of, of scale. Uh, uh, and, uh, and ideally what you want actually is, hey, there-

   5. HSHarry Stebbings21:29

      Can I just, can I just ask you, sorry, why, why is it? Say you have incredible pull from, I'm just using this as an example, fuck it, large restaurant chains. Uh, they have a huge amount of buyers across different segments and procurement's a nightmare. Just saying. Uh, why not have someone to go after hospitality? It can be 100 grand a year, quite young person, your job, boof, boof, boof, hospitality. Does it need to be expensive? I'm j- I, I don't know.

   6. RZRujul Zaparde21:55

      No, it's a great point. I mean, I think you can, I think you can, like, I actually think that's the right approach. I think you actually bootstrap it by having, like, a smart, like, zero to one type, maybe an ex-founder, right? Like, that type of person, like, figure out, 'cause what you need to figure out is, what's the messaging? Like, are there any, like, specific systems they use that, like, we have never heard of? You know, like, just get all that stuff working, build up the right assets and positioning just so, you know, your team is, can be successful. But then ideally, you can just fold that into the rest of the organization. Uh, and maybe you have a pocket of people that are focused on it, if it's very specific. Um, but, but it depends on how hor- like, whether the horizontal messaging fundamentally lands or not. And it depends on the product. Uh, if it's not that horizontal, then you may need to verticalize sooner.

   7. HSHarry Stebbings22:39

      Did you find it hard building out the sales team? You, you're a very product-led organization. You're a very product-led founder as well. Was it hard building out the sales team in the way that you had to and have done?

   8. RZRujul Zaparde22:51

      Yeah, I mean, uh, absolutely. Uh, it's, it's, and it's, it continues to be, right? I mean, uh, there, there are always, uh, uh, changes in how you sell. Uh, but yeah, I mean, look, we, both for Lou and me, I mean, we came from consumer, we came from Airbnb, we had, you know, worked in consumer companies in the past. So this was our first, you know, rude awakening to, hey, this is how it works with sales teams. Uh, so this was new, new for us.

   9. HSHarry Stebbings23:12

      What, what was the rude awakenings?

   10. RZRujul Zaparde23:14

       So many different things, but to actually be able to, um, you, you know, understanding every... First, it was, like, understanding every component of a sales cycle, right? I remember we have, uh- uh, s- you know, so many awesome sales engineers, uh, at Zip today. And initially, I w- I, I was completely skeptical. I was like, "I don't understand. Why would you- anybody ever need a sales engineer?" We can just have the account executive do the demo, and, you know, they should be able to answer the questions. And then we realized, like, we were running into limit- like, limitations around, like, technical questions, and like, you know, you, you actually do need somebody that has a more technical persona. So it's a lot of first principles learning around how the actual process works. And it's also, I think the other big thing is it's, it's hard to assess, right? Like, product, like, you can look at metrics, uh, uh, not to say you can't in sales, but every metric you look at, the more you zoom into it, you realize, like, actually maybe you should be looking at the anecdote. Like, let's go listen to the gong call of where this actually happened, uh, or is happening. Uh, and it's like a human problem. It's not like a software problem. Uh, and, and that's just harder.

   11. HSHarry Stebbings24:16

       I love it. The, the CPO of Spotify says, "The details are not the details, they are the product."And it makes me think of that when you said about kind of drilling down and going into the weeds of a gong cool, that's where the importance is. Right? The details are important.

   12. RZRujul Zaparde24:30

       Yeah. And it's also hard, like, you know, one of the things I've learned is, like, confidence. (clears throat) Uh, for a salesperson talking to a prospect, one of the most important things is confidence. How do you measure that? But two, how do you fix that? Uh, uh, it's very hard. That's what makes it so complex, so soft.

   13. HSHarry Stebbings24:48

       How do you fix that? Is it a case of geeing everyone up and saying, "Hey," you know, "Rijul, you're a rockstar." How do you give them the confidence to crush it on gong cools?

   14. RZRujul Zaparde24:58

       No. It's, it's, it's better enablement, more at-bats. Uh, right? It's like, like when you're in this type of situation, (snaps fingers) you know what to say, uh, and you can say it with confidence. Like, you can say that, "Yes, this thing, yes, our, like, our product does that and it does it really well, and here's, here are the two reasons why. Here's what makes us different." Right? It's all, it's just a lot of enablement. Um, and, and at-bats, which is actually kind of like repeatability.

   15. HSHarry Stebbings25:24

       Did you bring in a sales leader first and they built out the team? Or did you bring in reps first and then layered on top a sales leader?

   16. RZRujul Zaparde25:31

       The latter. Uh, uh, we, we hired, uh, uh, we hired one, uh, a sales, salesperson who was, uh, an AE in his past or held a number of different roles, uh, who basically I fired myself from a lot of the sales job, right, because I, I was just doing sales at that point. And then we brought him in, and then I would like, you know, he would just shadow everything, then I would, like, let him do the first call deck when I would do the demo, and then he started doing the demos and we sort of moved that way.

   17. HSHarry Stebbings25:58

       What stage did you hand off sales? What was that like? And, and for founders listening, I think that founder-led sales transition to, you know, someone else is, is so hard. What stage did you hand it off? And do you have any tips or advice on how to do that well?

   18. RZRujul Zaparde26:12

       Yeah. Yeah. Really challenging. I think for me it was like, hey, you know, I have actually, I feel like I've gotten to the point where now I'm doing first calls and I'm not really learning anything. Like, I was, I honestly felt like I'm not really learning anything new. I'm just having the first call to go get the deal. Uh, and when it started to feel like that, that's when I was like, and, and Louis and I were both like, okay, like, now it's time because rather than learning anything new, let's try to get a little bit more skill, right, with one more person. Uh, uh, and, and then in terms of, you know, I mean, of course, like, we certainly had, you know, it, it was, it's a trust building exercise, right, because you need to get the person ramped up. Of course you have no documentation, you don't have anything, I mean, it's just a mul- you know, four or five person company at the time at most, uh, and so you just, like, spend a lot of time, you shadow everything and, and get more and more comfortable. So it's, it's, it's tricky. Uh, and, and thankfully it worked out really well, uh, at, at Zip, but, uh, but I don't think it always does. Um, I have other founder friends who hire like two, uh, so that there's some competition and then go from there. We didn't need that.

   19. HSHarry Stebbings27:12

       It's, it's really hard. And then it, sometimes you have two not work, and then you're really in trouble because it's like, is it them? Is it me? Could just be them, it could be you. It's, it's, it's a night- and then you lose

8. 27:24 – 30:04

   Speed as an Advantage

   1. HSHarry Stebbings27:24

      time. Can I ask you, on the losing time element, I've had so many founders on the show before say speed is the most important thing in a company's success. It's the biggest determinant of whether they get product. Is that true, do you think? Or not?

   2. RZRujul Zaparde27:39

      Absolutely. I mean, you know, if you think about it, right, like, you were, you were to bet on, you know, one of two horses. One horse is like really thoughtful, thi- you know, is really like, sort of planning and th- they've got a whole strategy. They're like, you know, they're gonna execute it but they're slower. And the other horse, like, actually doesn't have the best strategy, but it learns quickly and it just, like, keeps changing path. Like, which one's gonna get to the destination faster? Unless the first one is perfectly great, which almost certainly it's not, then that first horse is not going to be, I would bet on the second horse. Uh, and, and, and I think that's the mindset, you know, we have internal. Like, I would much rather bet on a, on a Zip that, uh, you know, we all, we sometimes joke internally, but, but it's a way for us to push ourselves to get better. We sort of talk about, you know, what if, like, how do we compete with the other Zip? Like, in an alternate reality, there's a clone of our, like, the clone of Zip, uh, uh, in the alternate reality. How would we beat that clone? And usually the answer is we'd do something, we would just iterate faster. Uh, like, speed is actually really, really an advantage, uh, and, and it helps you, like, you're not gonna be right, so you might as well just learn quickly and move on. The other thing is as companies grow, they just get slower. Uh, and so we really, really wanted to establish as high of a mark as possible, because when we were a five person company, person company, I mean, we're certainly way slower than we were when we were a five person company, uh, right, and just like we're much slower than we were when we were 100% company.

   3. HSHarry Stebbings28:58

      Dude, you'd be the most mythical CEO if you could achieve retained speed with scale, so don't worry about that. I've never met anyone, like, 700 of the biggest CEOs, never has anyone done that. My question to you though is, like, as much as one possibly can, what would be your biggest advice on how to retain some form of speed with scale?

   4. RZRujul Zaparde29:16

      One, it has to come from you. You have to lead by example, as, as a f- as a founder. Like, the founders have to lead by example. It bleeds into the rest of the company. And you have to reward that. You have to reward that and call it out and shout it out inside the company. Like, if somebody does something quickly and, like, they achieve some result, even if it doesn't work out, you should reward them for it and you should make sure other people see that that happened, uh, and that they were rewarded for it. Uh, that, like, that sort of sets the DNA and the culture. Again, you know, we're just one data point. I don't know if that's quite worked here either. I'm not maybe even, I'm a biased party to ask obviously, but that's at least what we try to do.

   5. HSHarry Stebbings29:57

      I, I, I get you. I, I, I think, uh, repeatability can also solve for some form of speed because it makes things more known.

9. 30:04 – 37:06

   Fostering Creativity within the Organization

   1. HSHarry Stebbings30:04

      Um, my question to you that I really struggle with is, like, we actually have a pretty repeatable process in, in media companies in terms of how we do shows. One, obviously every guest is their own individual snowflake, uh, but shows a relatively the same in terms of structure and how they're composed. We can never lose creativity though, like-It's so important that our social team is so creative with each show. How do you retain creativity, where people bring fresh, new ideas and they're not just like, "Rejul set the repeatable playbook."

   2. RZRujul Zaparde30:35

      I think it's a couple of things. I think one, um... And this is much easier said than done, frankly, uh, but it's empowering people to, like, speak up and rewarding, like, more, like, more off-the-wall ideas and, like, alternate approaches, uh, uh, right, and rewarding first principles thinking. Uh, and a lot of that relies on, like, what at least I've found is that I would much rather invest in the person that has potential that maybe hasn't done the job before, but, like, has a high ceiling because that person is more likely to think through the... I mean, they don't have any experience, so what are they gonna do? They're gonna first principle the problem. Uh, and so they're just generally more likely to have more original ideas. Uh, and so I think a lot of this is, like, you can sort of culturally set this up if you have more managers and leadership in the organization that's actually cut from the DNA of the company and, and, you know, high potential, but maybe isn't, like, taking a playbook from somewhere else and cutting and pasting it into your company. There is a time and place for that maybe, too, so you have to balance it. But I think, like, if you only do that, you don't, you don't get as much creativity out of your organization. Um, the other thing we try to do is have a lot of brainstorms.

   3. HSHarry Stebbings31:37

      Uh, what does that look like? Like a weekly brain- ho- like, how does that look in reality?

   4. RZRujul Zaparde31:40

      Oh, if we've got a problem, like some hairy, like, complicated problem, what we'll do is try to get n- not a very large group, right? 'Cause then it's not productive, but a good group of, like, pretty diverse cross-functional people that are working on or touching this problem, in for an hour and, like, at least what I found worked out is, like, all right, everybody takes 15 minutes and write all your ideas out, uh, one on one. And then we just go around and then try to whittle that down, and then we end, end the meeting with, like, you know, five ideas. Maybe, maybe two of them we would have thought of anyways, but there's three, like, pretty interesting ones that maybe we wouldn't have thought of, uh, and, you know. And that's, like, one way to sort

   5. HSHarry Stebbings32:20

      How important is focus? Everyone's like, "Focus, focus, focus," but then you also want to encourage creativity, people come up with great ideas. How do you think about where to really focus your attention and resources versus when to focus?

   6. RZRujul Zaparde32:33

      It really t- I think it really depends on the problem and the function. Like, for example, I think marketing, uh, is such a diverse function, right? Because it encapsulates product marketing and growth and, like, content mar- like, all these different things. Like, I actually think, like, having marketing be quite unfocused is, is actually okay in its execution. Messaging needs to be focused, to, to be fair, uh, right? Messaging to the world, because otherwise it sounds like you're saying, you know, a thousand different things, but execution actually can be unfocused, um, and I think it's actually okay, uh, in, in, in some cases like that. Uh, and I don't know. Maybe that's a controversial statement, but I don't think you have to be that focused in every function.

   7. HSHarry Stebbings33:11

      Can I ask you, when you think about speed being the most important thing, what was a decision you made with speed that, with hindsight, should have taken more time and should have had more considerational thought put into it? I asked someone the other day and they said, "Marriage." (laughs) I said, "You are fucked." (laughs)

   8. RZRujul Zaparde33:29

      (laughs) That's so funny. Actually, I'll give you a great example. Um, so my, uh... So Zip is my second company. So my first company, uh, was a company called Flytecar. Uh, TLDR, we would give you free airport parking by renting out your car with somebody else, fully insured. Um, and I dropped out of college to do the company. And I remember, I called my friend at the, the time and said, "Hey, you know, we're both bored. Like, are you down? Like, why don't we do a company?" Uh, he was like, "Sure." Uh, and I remember, uh, I, I grew up in New Jersey, uh, and so, of course, you know, in New Jersey, the sort of at the time, at least, you know, you would go to Panera Bread. Like, that's where you would go hang out. And so, you, you know, we were like, "All right, let's go meet up at the Panera Bread tomorrow, uh, for an hour, and let's just... Whatever the best idea is that we can come up with in, in an hour, let's just do it." Uh, and I remember in that hour, this was in 2012, I think, uh, he was telling me, he's like, "Hey, there's this thing called Airbnb and, you know, people are sharing their houses with each other." We're like, "Really? Like, I never heard of that." Uh, and, uh, well, and, and then we sort of, one thing led to another, we're like, "Well, would they do it with their cars? And if they're gonna do it with their cars, maybe they'll do it at the airport because they're not, by definition, traveling. They're not using their car." And so that was the idea that we came up with in that one hour, and then we did it for five years. Literally, uh, right? I would never do that again. Like, we took exactly the opposite approach, uh, when we started Zip, but, like, that's, like, once you pick your idea and you're, like, working on... I mean, you're like... Of course you can change, right? We didn't, but, like, then you're... I mean, you're just so deep in. Uh, so that was one. Like, if you're gonna do a company, don't time box yourself to an hour.

   9. HSHarry Stebbings34:59

      Should you have quit earlier?

   10. RZRujul Zaparde35:00

       It's like one of those things where, like, I would do everything differently but have no regrets. (laughs) Uh, you know? Uh, and, like, and I think, like, I mean, what I learned from that company was it was a very operational business. I mean, at our peak we had 17 different airport locations, hundreds of hourly workers washing cars and picking up people and dropping them off at the airport, right? I learned so much in terms of, like, what it takes to be an operational business. And boy is it... I mean, is it easy to run a B2B SaaS company. Like, we have our problems but, like, you know, it's not like we're constantly gonna be running out of money. Like, the, you know, like, you don't have to worry about any of these things. Like, you don't have, like, 24/7, 365, like, support needed with, like, emergency situations. Like, just not that.

   11. HSHarry Stebbings35:39

       So I have this with founders a lot who pitch and then you're like, "I understand. I understand the premise of Flytecar." It's just a really hard business to work with all the different aspects that need to come into play together for it to work. For that margin to drop to the bottom line... I'm not saying it won't work. There's just easier things to go after to build a massive business, and I always feel quite guilty saying that.

   12. RZRujul Zaparde36:02

       Yeah, exactly. Uh, like there are easier paths to success. Uh, and that was totally... I mean, that's the analogy that I used in that business. It's like, you know, the margin you make, it's, it's like squeezing all the juice out of a lemon. The last drop that falls out is your margin. So if you screw up halfway through squeezing the lemon, you don't need to squeeze the rest of the lemon to understand how the movie ends. Uh, and, and that was that. That was the business. That was the business.

   13. HSHarry Stebbings36:24

       Were there any other big lessons from that business?

   14. RZRujul Zaparde36:26

       I mean, so many things, man. Uh, but one was do a B2B SaaS company next.... by far. (laughs)

   15. HSHarry Stebbings36:33

       (laughs)

   16. RZRujul Zaparde36:33

       Two, you know, um, I think you don't... And this is something that, uh, I think I learned later at Airbnb, but, like, you know, the bar of, like, what really good des- what a really good product designer is like-

   17. HSHarry Stebbings36:45

       Yeah.

   18. RZRujul Zaparde36:45

       ... or what a really good engineer is like. Like, you know, when you go into it cold, um, and you've never worked anywhere, like, you kinda don't really know. Uh, you're just feeling your way around things. Uh, and so I think understanding the hiring and the talent part was something that, uh, working at Airbnb later on, uh, I think really personally helped me with, uh, which is something that I didn't have back, back then.

10. 37:06 – 41:06

    First-Time Founders vs. Serial Entrepreneurs

    1. RZRujul Zaparde37:06

    2. HSHarry Stebbings37:06

       I agree with you, which is why I have this kind of investment thesis, which my team kill me for, especially for saying it out loud. Um, they're terrified that first-time founders won't come to us. But I don't like first-time founders like I like serial entrepreneurs 'cause you've just seen it. You know how to do hiring processes. You know what great looks like. You've avoided, you've seen the mistakes, you've made them. And we- we're, we're leveraging the mistakes you've made before. Do you agree with that thesis of, like, yeah, serial entrepreneurs, you've just made the mistakes? Or are you like, no, there's beauty in naivety, in youth, in upside thinking?

    3. RZRujul Zaparde37:38

       For me, as a second-time founder, I was, I was very, very, uh, determined, uh, Lu and I both were, to, to work on a company, work on an idea that had high execution risk, low fundamental market risk and, and, sort of, product risk. I think as a first-time founder, you're actually much more okay, maybe because you don't know any better, uh, like me, to take on a lot more market risk, and so you can actually have really large outcomes. I mean, s- a lot of the social media companies, I guess are good examples, but Snap, like, Snap is not a company that, like, like, it carried a lot of market risk, right? Like, the whole, like, the whole thing. Uh, uh, and, like, and, like, I'm not sure if someone would do that as a second-time founder. But it's obviously a wildly successful company. Uh, and, and so, like, you can have outcomes like that, but th- that, like, you almost can't have as a second-time founder. Um, maybe because you're just, I don't know, too jaded about the world or too bright.

    4. HSHarry Stebbings38:28

       I'm gonna go there even though I thought that I wouldn't. You said number one lesson was do B2B. Um, I had Trey on from Founders Fund and he said, um, "Serial entrepreneurs in SaaS are like George Clooney selling tequila in the way that, seriously, you have a massive opportunity with your skills and talents and you decide to do B2B enterprise SaaS. Like, that is not serving the world." (laughs) What do you say to that?

    5. RZRujul Zaparde38:59

       Well, I w- I would say it's, it's a little bit different than selling tequila, uh, and I would say-

    6. HSHarry Stebbings39:03

       (laughs)

    7. RZRujul Zaparde39:04

       ... uh, you know, I actually would say that, like, if you take what we work on at Zip in procurement, I mean, you know, there, there's like, there's like 11 times as much money that moves hands between businesses than moves hands between consumer ............................ in the global economy. So it's actually so much, so much money that moves hands. And if you can make that just a tad bit more efficient across the board, you actually create so much value, uh, in the economy that's being lost. And that ultimately, I mean, this of course takes, uh, many steps, but that does carry over to consumers. Uh, but, but I hear you. I mean, it's, it's, it's like you, you lose the anecdote of, like, the person that got something that made them hap- like, you know. I mean, I guess you have that, but inside of an organization.

    8. HSHarry Stebbings39:45

       Yeah. No. Uh, listen. I, I, I get you actually and I think you can actually very clearly articulate that, that by helping people spend more, you're empowering job creation, you're empowering productivity in the economy in a massive way. I actually think, to be fair, this is a case where you could argue it pretty s- sufficiently well. Uh, (laughs) my second question to you is, I spoke to Ali Rowghani and he said to me to, to double-click on what you just said there, which is the lessons learnt from Airbnb. What were some of the lessons learnt from Airbnb on... You mentioned what great looks like, so maybe that and any others.

    9. RZRujul Zaparde40:15

       Oh. It was just so, uh, helpful for me to see Brian Chesky, uh, you know, CEO of Airbnb, just how, the level of attention to detail, uh, when it comes to the Airbnb product. Uh, I mean, I, you know, you reme- remember design reviews, uh, where to his credit, he would be able to detect that, you know, s- some of the spacing is off or, right, like, just, just, just on our mobile app or, like, just like, really, really focus on detail. And what that does is, of course, do those extra, you know, I don't know, 10 pixels of white space in- in and of themselves matter? No, but they matter a ton in terms of what that says to a company and what, you know, and where the bar is for quality, uh, of the product. Um, just like speed, right? I think, I mean, product quality, design bar, like, all of that also I think ultimately is a cultural thing and it comes from the founders.

11. 41:06 – 45:35

    Selective Micromanagement

    1. RZRujul Zaparde41:06

    2. HSHarry Stebbings41:06

       But can you have that? Can you have that micromanagement, that intense focus on the pixel spacing and the speed of execution that is required?

    3. RZRujul Zaparde41:15

       I think so, but it's, it's because you have to focus on different things. Like, you have to, like, you can't micromanage every- you have to be selective, I guess, is the right framing, about what you micromanage. Because it has to be, you have to micromanage the few, like, critical things that are, like, very, like, they're core values to the company. Um, that doesn't mean you can't be quick in other areas.

    4. HSHarry Stebbings41:36

       What are you selective in the areas that you micromanage? And what areas are you deliberately not selective in what you micromanage?

    5. RZRujul Zaparde41:43

       Oh, uh, I, you know, I think I spend a lot of time in the actual, like, I mean, we were talking about, um, sales, just like how, how human the problem is and how at some point you have to look into the anecdote. Spend a lot of time, a lot of time on that. Everything from, you know, phone call, listening to, like, just, just, like, spending a lot of time getting into the details of, like, what exactly was said, like, what exactly is, is happening. Like, why is this person, you know, performing better than that person? Like, can we, like, take something that they're doing? Really double-clicking on that and not, not trying to, to manage the go-to-market organization by, by metrics alone, um, because it's, it's so hard to, like, actually affect change that way. Uh, that's probably the number one.

    6. HSHarry Stebbings42:24

       And which one are you like, "Y- fuck it, I'm happy to not micromanage that. I can clearly delegate that and it's not a, it's not a problem."

    7. RZRujul Zaparde42:31

       You know, my job, I think, in many ways is to focus on what's not working.Right? So it's like if there's an area of the business that seems to be doing just fine, that doesn't mean it won't break, because it probably will. But right now, it's not the thing that's on fire, or it doesn't look like it's, there's some smoke there, you know, you kind of let it, let it go. But it's gotta-

    8. HSHarry Stebbings42:49

       What's the-

    9. RZRujul Zaparde42:49

       ... be at high stakes.

    10. HSHarry Stebbings42:50

        What's not working right now?

    11. RZRujul Zaparde42:52

        Oh, I mean, there are always things not working. One of the, the things we're working through is, um, how best to scale, uh, some portions of our sales organization, like our business development, uh, organization. Um, right? It's a, it's a tough job to, to cold call people, to email them, send a message to someone like Dan, get interest. How do you sort of scale that team, uh, and, you know, maintain productivity, uh, uh, yeah, and allow that team to have like a great career path into the AE wall at Zip, which is something we're really proud of.

    12. HSHarry Stebbings43:22

        How much of net new client acquisition is from that team today?

    13. RZRujul Zaparde43:25

        We're largely an outbound business, so.

    14. HSHarry Stebbings43:28

        Largely an outbound business?

    15. RZRujul Zaparde43:29

        Yeah.

    16. HSHarry Stebbings43:30

        Wow. That's so interesting though for me as like someone in this industry. I think the brand is so strong, the investor sentiment is so strong, I think it would largely be an inbound strength-of-brand business.

    17. RZRujul Zaparde43:42

        Thank you for saying that. Uh, but, uh, no, I mean, I think a lot of, uh, you know, enterprise, you know, sales, uh, and enterprise go-to-market, uh, is, given how topped out it is, is actually quite outbound. And, and it will shift over time for us too, and I, I can al- already, I mean, it's... Inbound is, you know, at a larger percentage than it's ever been, uh, in the history of the company. Uh, but the majority is still, still outbound, especially after we go after different industries, into the enterprise, so forth, right? Like, it's also about, like, "Hey, we talked to somebody in an organization. We understand there's a problem. We have to get to the right person. Like, literally the right person." Uh, and that's very hard to do when you're targeting an acc- account in an organization in an inbound way.

    18. HSHarry Stebbings44:23

        It's also super hard because you don't have, like, clean data, I find, on titles within companies. What is one thing in one company is another thing in another company, and actually buyers are very differently placed according to different companies. So it's... Do you see what I mean? It's not like great then.

    19. RZRujul Zaparde44:40

        No, completely agree. And especially when you, you know, uh, uh, sort of add to that different geos, different countries, like, it just gets even more complicated. Uh, it's-

    20. HSHarry Stebbings44:48

        Yeah.

    21. RZRujul Zaparde44:48

        ... it's very hard to tell. Um...

    22. HSHarry Stebbings44:49

        Well, I, we maybe getting too into the weeds, but I'm just interested in, like, scaling the outbound side. I am just like, I think AI will actually destroy outbound in many cases because it will just create infinite supply of messages or infinite supply of whatever channel that is. And so I think you actually see the complete removal of it. I don't know how you think about that.

    23. RZRujul Zaparde45:09

        I don't see it quite as a, as a complete removal, although, look, maybe in 20 years, like, who the hell knows, uh, right? Uh, you know, uh, uh, but, but I do think, like, there's an opportunity to, like, increase the leverage of the team. Uh, and we're, we're trying out a bunch of stuff, uh, uh, using, you know, ChatGPT to (clears throat) just, I mean, there's just so much manual work that goes on that you can actually start to automate even today. Uh, so, I mean, we'll see. I'll, I'll probably have a better read in six months or a

12. 45:35 – 48:06

    Motivating Remote Teams to Return to the Office

    1. RZRujul Zaparde45:35

       year.

    2. HSHarry Stebbings45:35

       In terms of, like, giving the team that trajectory you mentioned from like BD and outbound to AEs and, you know, other parts of the sales function, it's really hard to motivate teams when they're not together physically. Um, I know that you've been a proponent of back-to-office. Can you talk to me? How do you get excited about people going back to office and returning to physically co-locating?

    3. RZRujul Zaparde45:57

       Yeah, it's, it's such a tough thing, especially, uh, for companies like ours that were born right in the heart of the pandemic, and it's challenging because it varies by function. And one of the things we do is for engineering product and design, uh, we, we mandate two days a week, specific days, Mondays and Thursdays, uh, in the office. Uh, and, uh, that actually was borne from, you know, what we found was that it was actually... I mean, a lot of engineering is like a maker's job, right? A design... Like, you're, like, you're writing code or you're like-

    4. HSHarry Stebbings46:25

       Mm-hmm.

    5. RZRujul Zaparde46:25

       You have to really focus. Uh, and, and it's just, I think it just, I think what we found out from a lot of our early folks is that it was kind of just like lonely to like just do that. Like, they were craving some more, like, social engagement, some more, uh, uh, engagement in some way, shape, or form, uh, and, uh, and we dec- And, and then they were drowning in meetings, of course. Uh, and so what we decided to do is we prioritize in-office days and then try to push all the meetings to happen in the in-office days, so that there was like other times you get like a really healthy balance. Uh, one of the things, actually this is, uh, I think an interesting thing that we did is, so early on, uh, when we started the company, Liu and I both bought these Facebook portals, which I think is now, I don't think Facebook sells those anymore. Actually, I still have mine, it's right there. Uh, and, uh, and we would, w- uh, uh, keep a Zoom meeting going, uh, the entire day 'cause we were in different locations during the pandemic. So for 12, 14 hours, 16 hours a day, we just had just the Zoom meeting. Uh, then we, as we grew the team, we had more, uh, team members join, every morning, you would just, if you worked at Zip and, you know, you would just join the same Zoom meeting and keep it on video, but on mute. And so it was kinda cool. So when we... Up to like 20 or so people, we just had a Zoom meeting with everybody just hanging out. Uh, but what really helped was initially it was just me doing sales, and so whenever I was doing sale- any sales call, I would leave myself unmuted. So even if you were an engineer at Zip really early, you would be listening to every single sales call. There's only one happening at one time because it was just one of me. And so you'd listen to everything. Uh, and so it was actually really, like we learned so... Like, I think we really accelerated like i- you know, internal enablement and learning at that time. But anyways, I think that's part of the reason why people were sort of, you know, craving some level of social

13. 48:06 – 54:57

    Hiring Mistakes

    1. RZRujul Zaparde48:06

       engagement.

    2. HSHarry Stebbings48:06

       Can I ask what have been your biggest hiring mistakes? We talked about kind of, uh, motivating teams to get back into the office. Uh, I think you learn so much from your mistakes. What have been your biggest hiring mistakes, and how did that change your thinking on acquiring and retaining great talent?

    3. RZRujul Zaparde48:21

       Yeah, I think, I think we touched on this a little bit before, but I think the number, (clears throat) the number one thing is like old heart indexing on someone that's done it before at like a similar level of scale, right? Like, I think, I think for, even for a lot of investors, I think it's like people love the like press release hire.

    4. HSHarry Stebbings48:38

       Yeah.

    5. RZRujul Zaparde48:38

       Or the like, "Hey, oh, this person did it. You know, they took them, they did this and they took it from, you know, uh, uh, 100 to, to 250 of ARR," whatever it is. And so, like, "We should just get them and plug them in here." And like, "It would be a perfect fit," and like similar, you know, sales cycle or whatever. Like, I'm not saying that can't work, it totally can, but you incur a lot of risk, uh, doing that 'cause it also... I mean, every business is very different. Every situation is extremely different. Like, the same playbook certainly won't work. It's just like, will the person be able to figure out how to change the playbook enough, uh, uh, right? Uh, versus, versus, you know, maybe you bet on the person that, like, has proven themselves out, uh, uh, in whatever thing they're doing and have a lot of potential to just get, get one level above. Uh, but you, and you're having an honest conversation about, "Look, you're gonna step into these, you know, bigger shoes. We're taking a bit of a risk here. So are you. And so, you tell me if you think it's not working, and I'll tell you if I think it's not working. And let's just, like, both keep the, you know, finger on the pulse and, like, monitor." Uh, and, uh, and I, you know, it's not... That's not the right call all the time, um, but I think it's actually the right call much more often than people realize, uh, and, and, and you never get recognized for it, right? Because, like, mo- most of the time, an investor or somebody external will be like, "Oh," like, "Sorry, who is that?" Like, "What experience do they have?"

    6. HSHarry Stebbings49:53

       How quickly do you know about hire?

    7. RZRujul Zaparde49:55

       We've been slow, uh, in, in the past, uh, or y- you always feel like you could have been faster. It depends on the situation. It depends on the function. Um, if... Look, I think the way I see it, like, if I feel like that's the case, I'm the last one to know, uh, right? Because their team probably has figured that out already for months. Uh, their peers have figured it out for months. Like, so it's like, how do you find out faster? Um, pa- One of the things that we do is, like, you know, we... You know, there are obviously trusted OG people that, like, I trust, uh, that I know are great, um, dan- and, uh, you know, trying to maintain a close dialogue with people like that so that they can temperature check, right? It doesn't mean that they're always right. Certainly not the case. There's always, like, gray areas and a lot of nuance. But if you start to f- hear f- you know, feedback that somebody's not performing from, like, a lot of people that you, you know, know are high performers, that's a massive red flag. Uh, and so can you use those types of people who are sort of spread out throughout the organization to, like, give you just better signal earlier?

    8. HSHarry Stebbings50:56

       I always remember Max Levchin telling me, "When there's doubt, there's no doubt." And I'm not sure if it's right, but it just always stuck with me. You know, when you doubt someone's ability, there's no doubt that they're probably not the right person for the job. Um, I don't know if that's true.

    9. RZRujul Zaparde51:09

       I, I think, I mean, I think that's probably true eight out of 10 times. Uh, and the challenge is that it's probably not true two out of 10 times, but is it worth, is it worth continuing to see if it's, you know, in 80%?

    10. HSHarry Stebbings51:21

        Do you agree when someone's on a performance review, just, just don't bother? It's always a slippery slope.

    11. RZRujul Zaparde51:26

        Uh, I actually don't agree with that. Uh, and I'll tell you why. If that is the case, that means you probably are doing the performance review too late, uh, or, or the performance plan. I assume that's what you meant, too late. Uh, and you're not, you know, you're not giving the person an opportunity to, like... Like, you haven't, like, detected it early enough, I guess, and given them an opportunity to course correct earlier.

    12. HSHarry Stebbings51:47

        Did you worry about raising too much money too quickly?

    13. RZRujul Zaparde51:50

        So, if, if this were my first company, I would... Certainly shouldn't have worried. (clears throat)

    14. HSHarry Stebbings51:54

        (laughs)

    15. RZRujul Zaparde51:54

        Um, yeah, uh, we didn't worry quite as much because we knew we were gonna maintain discipline. Uh, I mean, one of the things, a- another mistake I think a lot of founders make is they, like, just hire too much too early before they, like, know without a doubt that they have, like, clear product-market fit. Uh, and I think, and just to be clear, like, initial product-market fit, right, from the earlier parts of our conversation. I think that's so important though, like, to, to really keep a small team because, at that point in time, because say the thing isn't working, right? Like, if you know, like, if you're working with five, six people, you're hanging out all day, you're all working together, you can be like, "Hey, guys, like, actually, like, this is a bad idea." Like, "We should do this," or, "We should change it," right? You can do that 'cause you have the trust. Um, but when you have 20 people, you cannot possibly have that type of relationship with, with, you know, the other 19 of you. Uh, and you just sold them. You were like, "Oh, look, this is an awesome company." Like, th- "It's great," and like blah, blah, blah. Uh, and, you know, if you're at that point in time, you can't be like, "Actually, I was just wrong, uh, even though that was two weeks ago," right? Uh, uh, 'cause of course you have that in your head. Like, "Yeah, maybe this isn't the right one. We'll figure out, but maybe it's not the right one early on." And so, uh, you know, we certainly raised a lot of money, uh, uh, then and, and then, and then later, obviously, well past the week, past that point, but we were very disciplined. Like, no matter what money we had in the bank, we were not gonna hire more. I mean, there were, there was a point where we were a small company and, and, you know, cashflow positive, uh, because we had just held back hiring so much. Uh, and then we really unlocked the gates when we felt like we hit confidence in 2021.

    16. HSHarry Stebbings53:22

        Price-wise, investors will pay up for assets that are great with great founders like you and Liu. Were you worried about the price bluntly just being very, very high in such a short space of time? It means you have to live into that valuation. It, it's hard, and we see a lot of people struggle with that today. How did you think about that at the time?

    17. RZRujul Zaparde53:41

        I think for us it was like, we were just so confident that there was, like, so much market need and, like, the growth rate, uh, uh, that, that we had and have, uh, uh, we, we just... It was more just an opportunity to, like, do something that we maybe would have done a little bit later and just do it now. Uh, and, and that's how I thought about it. We had that confidence then, we're having confidence now.

    18. HSHarry Stebbings54:01

        Rajiv, you're constantly speaking to people, investors, employees, customers. What question do you not get asked that you should get asked more?

    19. RZRujul Zaparde54:11

        Huh. That's a really, that's a tough question.

    20. HSHarry Stebbings54:13

        Do you see yourself running Zip in 20 years time?

    21. RZRujul Zaparde54:16

        Yeah, absolutely. I mean, we wanted to start a company that was going to be a generational company. Uh, like a company that, like, you know, at the time, this was 2020 when we started the company. In 2040, it would not only be around, but people would know what it is.

    22. HSHarry Stebbings54:28

        It's so funny. One of my biggest turnoffs when investing is when you hear, like, a founder say, "Hey, when I do my next company," right, or, uh, "Oh, I'm doing that as well."

    23. RZRujul Zaparde54:37

        Right.Just the-

    24. HSHarry Stebbings54:40

        Yeah, exactly. And I've interviewed, you know, so many of the best, and this is their life's work. Right? This is the only thing they focus on, and that is such a big sign for me.

    25. RZRujul Zaparde54:49

        Yeah. No. I mean, not, not once have I ever thought of something after. Like, there is no after. Like, there's no... Not once.

    26. HSHarry Stebbings54:56

        (laughs)

14. 54:57 – 1:02:13

    Quick-Fire Round

    1. HSHarry Stebbings54:57

       Uh, listen. I wanna dive into a quick fire round, so I say a short statement, you give me your immediate thoughts. Does that sound okay?

    2. RZRujul Zaparde55:03

       Okay. Let's do it.

    3. HSHarry Stebbings55:05

       Okay, so what have you changed your mind on most in the last 12 months?

    4. RZRujul Zaparde55:09

       Oh, gosh. I think, uh, I think it's probably my, like, how I manage my day-to-day. Uh, so there was a, there was a point early on when we, we had like a huge spreadsheet and every single person in the company would just literally write out their to-dos for the day in each tab in the spreadsheet. Obviously, that broke up for like 10, 15 people. My current thing is I have a notecard and I, I actually write out what I'm gonna do for the day on the notecard as it goes in my pocket, and then I cross it out and then I throw it out, uh, and then I have a fresh one tomorrow. Uh, we'll see how long that lasts and if I need to change it, but yeah. I haven't figured out like something that works.

    5. HSHarry Stebbings55:43

       What are you most concerned about in the world today?

    6. RZRujul Zaparde55:46

       This might be trite. Uh, I mean, we've got, you know, a lot of tracks of work obviously going on, uh, around generative AI. Uh, and, and I don't... I'm not gonna open up a whole can of worms, but, you know, you just read s- such concerning headlines in the news about, you know, things that, that can happen, things that, uh, uh, we're, we're now gonna be able to do that, yeah, you sort of wonder, "Where does that lead, leave us in even just a handful of years?"

    7. HSHarry Stebbings56:08

       Does that worry... Or do you... Like, I take the view that bluntly, we always overestimate adoption in a year and underestimate it in 10 years. And I think there's like, "Oh, everyone's gonna have no jobs," and, uh, all of the gross overdramatizations. Like, you know, eh, 94% of European corporates don't know what Notion is. Like-

    8. RZRujul Zaparde56:26

       Right.

    9. HSHarry Stebbings56:26

       ... AI? Good luck. (laughs) Like...

    10. RZRujul Zaparde56:29

        No, no. I actually, I agree with you. Like, I think adoption in the enterprise, uh, all of that will be slow. Uh, no. I think what actually concerns me is just like adoption for like, you know, malicious inte- like fro- like, you know, can imitate somebody's voice for fraud or- You know, like stuff like that. It's like, yeah, that's actually really concerning. I don't know what the solution is to that. Uh, and for people that want to commit that, I, I bet the adoption's not... Is pretty quick.

    11. HSHarry Stebbings56:51

        What do you think are the biggest ways VCs and founders are misaligned?

    12. RZRujul Zaparde56:54

        It's like the time horizon, maybe. Uh, and like how much the outcome matters, right? I mean, ultimately, like for an investor, this is one of whatever number of portfolio companies they have if... You know, of course the dynamics are such that, you know, only one, maybe multiple, if they're lucky, will return the fonder whatever, uh, and they don't need every single one to work, uh, uh, "work" so to speak. Uh, uh, right? And, uh, and as a founder, I mean, you're, this is your life. Uh, uh, so just, just fundamentally there's gotta be some level of misalignment. Again, it's not, it's not like, uh, uh, an incorrect intention. It's just, it's just different.

    13. HSHarry Stebbings57:30

        Totally. It absolutely is. Also, there's fees associated with like fund management, which generally make it a little bit more comfortable for venture (laughs) investors. So, 100%. Um, if you could choose someone to add to your board who's not on your board today, it can be anyone, who would it be and why them?

    14. RZRujul Zaparde57:46

        Frank Slootman. Um, I'm a huge Frank Slootman fan and, (clears throat) right, uh, amp it up recently. Frank Slootman.

    15. HSHarry Stebbings57:54

        Tell me, what's the biggest piece of BS advice that you hear most often?

    16. RZRujul Zaparde57:57

        Oh, I think it's got, I think it's gotta be, uh, around, all the stuff around. "Hey, you've got product-market fit," and, you know, now you're off to the races. It just, it just ain't that. It just ain't that.

    17. HSHarry Stebbings58:07

        What's the biggest sin of the zero interest rate environment? You were born in, uh, COVID, so to speak. Um, what was the biggest sin of that time period?

    18. RZRujul Zaparde58:15

        Oh, I mean, I think like hiring to solve problems. I mean, again, this is a, obviously a topic that, uh, has been touched so many times, but I think even culturally, like so many companies, like, "Oh, you have this problem? Great. Hire." Uh, and it's like, "Whoa, whoa. Wait, wait a minute, wait a minute. Like, do we really need to go hire a whole human just to solve the problem or is there some other better way?" Uh, and I think it just like was easy enough to do that. There was enough capital. It was just, you know, uh, uh, like it was the easy, lazy answer. Uh, and so I think a lot of companies, uh, were affected by that.

    19. HSHarry Stebbings58:47

        What do you know now that you wish you'd known when you started Zip2?

    20. RZRujul Zaparde58:50

        How hard it is to actually build a world-class product, uh, in this space, and, and how complicated it can, it can be. I mean, when, when Luy and I were at Airbnb, uh, we, at, at different points in time, we both worked on search. Like if you go to Airbnb, how well the search experience is like (clears throat) and I thought that was complicated. Uh, you know, search platform and ranking and some of these things, and, and boy was I wrong. I mean, you know, this can be gloriously complicated. I mean, some, some of our customers in the enterprise, for example, like got, you know, over 1,000 types of questions that can get asked with all sorts of different logic based on the thing that it is that you're buying, and, you know, 20 plus different types of risk reviews alone. I mean, it can just be so complicated.

    21. HSHarry Stebbings59:32

        Why do you wish you'd known that? 'Cause li- wha- when you think about the, "I wish I'd known this because then I would have done this differently," so if we start, if I, uh, give a minor example. "I wish I'd known the importance of video in this age of media, because I would have started YouTube very much earlier." If, if that was your answer, how difficult it is to build a world-class product for this segment, what would you have done differently then as a result of having known that?

    22. RZRujul Zaparde59:56

        I think we would have probably made some investments (clears throat) in our architecture that would have allowed us to, to like build out... You know, we have a platform today, but to build out more of a platform w- without having to ha- you know, expend a lot more resources that we've had to do as of the last six, eight months. Uh, uh, but that... Look, but to, to be fair, to be fair, maybe the answer is actually no, we wouldn't have done that, uh, 'cause it would have just taken more time and we wouldn't like have put in the engineering efforts just because it wasn't the right thing to do at the time. I could see the alternative too, you know. Uh, so, so I don't know.

    23. HSHarry Stebbings1:00:27

        My favorite thing is kind of like nothing's ever as good or as bad as it seems and just life goes on. (laughs) Do you know what I mean?

    24. RZRujul Zaparde1:00:34

        Yep, yep. You just, yep. You, you have limited information, you do the best that you can with it.

    25. HSHarry Stebbings1:00:38

        Okay, so we're 2043, 4... Fuck. 2044. What is Zip2 then and where are you in 2044?

    26. RZRujul Zaparde1:00:46

        Well, I sure as hell, I'm, I'm still here, uh, thinking about (clears throat) procurements, uh, at, at Zip2.

    27. HSHarry Stebbings1:00:52

        (laughs)

    28. RZRujul Zaparde1:00:52

        You know, in terms of, uh, you know, where I think the, (clears throat) where I think we can be as a product, if you think about it, right? (coughs) Think about the notion of an approval significantly over 90%. Even over 95% of the time, people are approving th- Like, if there's an approval, they're approving. You bet they're approving it. Like, the rejection rate just across the board is naturally extremely low. And so when you think about that, you're like, "Well, that's kind of a deficient process." Like, you basically have this thing where, you know, people approve stuff and then, so that they can see it and then they like basically approve it anyways. Uh, so can you actually, instead of managing that process, like can you just not need to do approvals, uh, because the software can do it for you? We're not there today, uh, but there's definitely a world, I mean, and, and hopefully a lot sooner than 20- f- 2044, where you can say, "No, actually, like, it just gets done." Uh, right? Like, you don't need to like have a human go in there, review the thing, and then approve it. Uh, like, that's actually like... In 20 years, I think people will be like, "Really? You had humans like reading these documents, like thinking about them and then approving them? That seems dumb."

    29. HSHarry Stebbings1:01:55

        Listen. Uh, the reason why I do the schedules, I have no reason for. They, I used to stick to them, as you can tell. But they, nowadays, they serve zero point. Thank you so much for joining me, Rushil. This has been such a fascinating and, uh, varying discussion, but you've been fantastic.

    30. RZRujul Zaparde1:02:10

        No, thank you so much for, for having me.

Episode duration: 1:02:13