From Near Death to a $20B NVIDIA Deal | Jonathan Ross, Groq

1. 0:00 – 0:25

   The $20 Billion NVIDIA Deal Closed In 3 Weeks

   1. DSDavid Senra0:00

      [electronic sounds] Let's start with this $20 billion, rumored $20 billion partnership that you have with NVIDIA.

   2. JRJonathan Ross0:07

      Mm.

   3. DSDavid Senra0:07

      Can you talk about the structure of the deal and how it came about?

   4. JRJonathan Ross0:10

      So the most interesting part about it is the call, um, where the idea was first floated was about three weeks before money was in the bank.

   5. DSDavid Senra0:20

      Oh, so Jensen moves fast.

   6. JRJonathan Ross0:21

      Of course.

   7. DSDavid Senra0:22

      [laughs]

   8. JRJonathan Ross0:23

      That's how you stay ahead.

   9. DSDavid Senra0:24

      Yeah. So how'd it come

2. 0:25 – 1:46

   Why GPUs And LPUs Are Better Together

   1. DSDavid Senra0:25

      about?

   2. JRJonathan Ross0:25

      So we had been working on, uh, integrating GPU and LPUs together, and the best way to describe why this helps is if you were building out a logistics network for the United States, and I told you you could have either 18-wheelers or m- uh, you know, vans for last mile delivery, which one would you pick? And the answer is both, right? And so GPUs and LPUs combined ended up giving better performance across the performance curves. We had implemented it, and we had gone to Jensen asking, "Could we buy about 100,000 GPUs?" Because we were gonna deploy them ourselves. And Jensen saw what we had done and thought maybe it would be better to make this available to all of their customers.

   3. DSDavid Senra1:06

      You and I had this conversation, um, at NVIDIA GTC, and you were talking about the fact that these technologies are very complementary. Can you explain a little bit more about that?

   4. JRJonathan Ross1:14

      When you're processing an LLM token, what's happening is you're doing all of these different matrix multiplies, and some of them are more compute-constrained, and some of them are more memory throughput-constrained. And the ones that are more compute-constrained we put on the GPU, and the ones that are more memory throughput-constrained we put on the LPU. And the bottlenecks are all over the place. There's all sorts of different bottlenecks. There is no one strategy. There is no one perfect architecture. So the realization was you put these two things together, and you defeat the bottlenecks across all of the different matmul's.

3. 1:46 – 3:30

   When AI Talks To AI, Speed Wins

   1. DSDavid Senra1:46

      There's another thing that I love that you said when we had this conversation, that when AI is talking to other AI, speed is becoming more and more important.

   2. JRJonathan Ross1:53

      Yeah. I mean, a human can wait a second or two to get a response when they type a command into a computer. AI is just sitting there waiting because it produces these tokens so much fa- it thinks so much faster. Now you bring in LPUs, and the speed is so much faster that i- it just becomes all about how do you move as fast as you can. AI is really good at using AI, and that's really what agentic is, right? So humans benefit from using AI. So does AI. Just like you would do research about me before I show up on your show, AI is gonna kick off a job doing research on different tools it's gonna use while it's using this other tool, and so it kicks it off to another AI, and so you get this exponential growth.

   3. DSDavid Senra2:35

      I- I'm gonna go on a, a tangent just for a second, and then we'll come back to this. I talked to a lot of founders about this recently, but their, the whole point is, like, when agents are making payments, the amount of payments that are being-

   4. JRJonathan Ross2:44

      Yeah

   5. DSDavid Senra2:44

      ... going to be made is gonna skyrocket. Do you have any, like, insight into that?

   6. JRJonathan Ross2:48

      Yeah. I, I think it's still early, and one of the limiters is payments aren't really built for this yet. But if you can make micropayments, the number of payments is gonna skyrocket. Like, I did a little hobby project, and for the hobby project, I needed a couple of different phone numbers, so I could have a bunch of different agents on with me on, um, Signal and WhatsApp. And I had to go to Twilio, and I had to, like, I had to, like, prove I was a human in order to get the number and all this stuff, and it was just this big pain to get it done. If, on the other hand, I could've just done, uh, if I had allocated a budget to the AI and it could have just, you know, used that budget, it would have spent it, and I would've never known. It would've just been within the budget.

4. 3:30 – 5:55

   Always Start With A Hobby Project

   1. DSDavid Senra3:30

      Tell me more about the hobbies and the side projects because this has come up in a couple of our previous [laughs] conversations that you and I have had.

   2. JRJonathan Ross3:36

      I like to do, um, cutting-edge stuff on my personal computer, so I don't have access to the, the work code base. Like, things where there's risk, you know, I'll spin up a, a server in GCP or AWS, and I'll just start building stuff. I built everything from, um, you know, apps that tell you, like, how long it, like, what airplanes to take if you're traveling and, and what routes and which routes have the best seats and all this stuff, all the way to apps that do certain mathematical th- like a daily brief and all of this stuff. Very simple stuff. At work, I use it very extensively, but I always start with a hobby project before I bring it to work.

   3. DSDavid Senra4:16

      What's the daily brief?

   4. JRJonathan Ross4:18

      Every morning, I get, uh, an email to me that says what's going on in the world based on what I'm interested in and how I interact with it and, um, it, just a whole bunch of research. Very much like the Presidential Daily Brief except personalized for me.

   5. DSDavid Senra4:31

      And is this in text form?

   6. JRJonathan Ross4:33

      Uh, yes.

   7. DSDavid Senra4:33

      Like, you read it?

   8. JRJonathan Ross4:34

      It's text-

   9. DSDavid Senra4:35

      Okay

   10. JRJonathan Ross4:35

       ... with links that I can click through to learn more. The, the big shift I did on the daily brief, though, was I started off by getting a whole bunch of text, and I would read it, and then I realized, "Oh, it's AI. It's done a whole bunch of research. It has the context. Why don't I have it just summarize everything, just give me a bunch of headlines, and I can ask follow-up questions?"

   11. DSDavid Senra4:52

       I just spent time and recorded, uh, an episode with Gustav, who's the, uh, co-CEO of, of Spotify right now, and he did something very similar 'cause he tries to avoid any kind of feeds. The whole thesis behind, like, the organizing principle of Spotify is, like, time well spent. And he's like, "Well, you know, me just scrolling and getting, like, rage-baited at, at, on X-

   12. JRJonathan Ross5:11

       Yeah

   13. DSDavid Senra5:11

       ... isn't beneficial, but there is information I wanna know." And so there's a, a couple different places that his agents go out and, and essentially summarize, uh, stuff he might be interested in. He's like, you know, he's like, "Hey, don't include rage bait. Don't include politics." But then he also, uh, heavily emphasizes, "These are the people that I'm interested in. What are the people that I'm interested in speaking about? And if the same people that I'm interested in are speaking about the same topic, I wanna know about that." And then it, he can read it, but now he turned it into this, like, personal podcast, and he actually listens to it in Spotify.

   14. JRJonathan Ross5:42

       [laughs]

   15. DSDavid Senra5:42

       He's, like, essentially his daily briefing, but he listens to it in, like, 5, 10, or 15 minutes.

   16. JRJonathan Ross5:47

       Yeah. I mean, for me, the interactivity of it is important because, um, it's sort of a... You ever play the game 20 Questions as a

5. 5:55 – 8:23

   Ask The Right Questions, Not Answer Them

   1. JRJonathan Ross5:55

      kid?

   2. DSDavid Senra5:55

      Yeah.

   3. JRJonathan Ross5:55

      Yeah. So you can figure out within 20 questions what's in someone's mi- like, you know, questions allow you to sort of distill down into what you actually care about. If you have a podcast, it's a static form. You hear it, but if you can intera- interact with it, then you can just get to the information you most want. So as I'm learning through AI, I'm not reading a static piece of content. I'm interacting with it.

   4. DSDavid Senra6:18

      I'm glad you mentioned the thing about questions, 'cause I have a series of quotes that I've saved from you. And I love your tweets, by the way. So you said, "Success in the information age was about being able to answer questions. Success in the AI age will be about being able to ask the right questions." Can you expand on that?

   5. JRJonathan Ross6:30

      Yeah. And, and this also goes towards a shift of going ... People are moving from being ICs or individual contributors to all being leaders, but leaders of AI. And what really good leaders do is they don't do the work themselves. They don't have the answer themselves. They're just asking the question. They're just cons- you know, considering everything they're hearing, and then they ask the question that no one else asked or everyone is thinking but is afraid to ask. So with AI, because it can go off and solve all of these problems for you, it can do the research report, it c- like the question that you ask determines what you get, and that determines the output. From information age, like we were all trained to just answer questions, like that's what school's about. Remember this, remember that, remember this. With AI, you just ask AI. It knows. You just have to think of the right question. It's a fundamental shift.

   6. DSDavid Senra7:19

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6. 8:23 – 13:00

   There Are Infinite Ways To Be A Leader

   1. DSDavid Senra8:23

      I want to go to something you texted me about your views on leadership.

   2. JRJonathan Ross8:27

      Yeah.

   3. DSDavid Senra8:27

      Which is what is your description of leadership?

   4. JRJonathan Ross8:29

      So I, I got this from a, a John Levy book, but it didn't detail it much. And the first principle of leadership is you have followers. Duh, right? It's that simple. You're not a leader unless you have followers. But when you think about leadership as having followers, it's also like thinking of investing as making money. There's a lot of ways to be an investor. You can be a venture investor. You can give debt or you can take equity. You can be seed stage. You can be Series A. You can be growth. You can be crossover. Uh, you can do convertible notes. Like th- there's, you know, private equity. There's so many different ways to be an investor. Public market, right? Same with leadership. And so with leadership, the, the mistake I often see with new founders is they're like, "How do I be a leader?" And the problem is they don't realize that there's an infinite number of ways to be a leader. So they, they go off and they listen to someone and they get all this advice and they try and execute on it, and it's not true to them. So one of the things that was di- very different for me as a leader, most of the people that I hear on your podcast, they are control freaks. They want things done their way. And-

   5. DSDavid Senra9:39

      On Founder's Podcast or this one?

   6. JRJonathan Ross9:40

      On ... Well, both, actually. [laughs]

   7. DSDavid Senra9:42

      Yeah. [laughs]

   8. JRJonathan Ross9:43

      And so had I tried to be an absolute control freak, that wouldn't have worked for me. I'm one of these weird people where I can go to a restaurant and I can tell the waiter, "Just bring me whatever you think is best." Or I don't even have a driver's license. I haven't had a driver's license, you know, since, you know, I was, uh, 18. And I've al-

   9. DSDavid Senra10:03

      Wait, why don't you have a driver's license?

   10. JRJonathan Ross10:04

       Because I don't feel the need to drive, and I'd rather think. I don't need to control driving. I want to control thinking. I want to focus. I want to be on my phone. I want to be doing something useful, and that's been the case since I was, you know, 19 years old. And so I'm happy to delegate things in a way that others are not. So one of the things that's different about my leadership is when I hire people, I hire very autonomous people who often go off and execute on their own, and they would be terrible in most corporate environments. But also I can't hire the same kinds of people. And that was true to me. Had I, I, you know, gone the other way, I wouldn't have been very successful. If other people go this way, they're not going to be successful. Then again, there are a lot of things that are very similar, which is most of the best Silicon Valley leaders, they lead from a place of inspiring their people as opposed to, um, trying to, to get people to be afraid. But that is a form of leadership. There are plenty of leaders out there who are successful because they cause people to become afraid. And so you just have to pick the form of leadership that works for you. But also when you're picking where you're going to work early in your career, you should probably work somewhere where you're going to learn the lessons that are good for you. If you're more of a, a kind of person who can show appreciation and gratitude, you probably should not work for someone who inspires fear because you're not going to learn any lessons that you can use yourself.

   11. DSDavid Senra11:25

       Man, this is so important. This, this actually like fires me up because did, have you ever spent any time with Toby Luca?

   12. JRJonathan Ross11:30

       I haven't.

   13. DSDavid Senra11:31

       Okay. So the conversation that I had with him, I don't know, on this show like five months ago, I still think about like every few days. And in fact, we, we go through the past episodes and like mine, and I, I'm constantly finding new insights from that. And like, uh, so that's why you see all these like clips that we're putting out on X from, from things that might be, you know, we did six months ago. And, and Toby, one of the things I loved that he said in the conversation was just like, "Man, there's not like one right way to do things. There's probably 100 ways that could accomplish your goal. You have to do the one that's based on you."

   14. JRJonathan Ross11:59

       This is why you see all these different tech companies that are so different from each other. Like Apple, complete silos. Google, everyone has access to the code base. They're just completely different ways taken to the absolute extreme.

   15. DSDavid Senra12:11

       We just had Dana White on the show, and his whole thing w- was like the f- first thing to do is like know yourself. So I'm going to ask you a question. When you figured out your leadership style, wait one second. And then once you have to really know who you are, right, and what fits you, and then once- Second thing is, like, what you actually wanna do in life. And then once you-- Those are your two biggest questions, then you just wake up once you figure it out, and you just get after it and, and focus on accomplishing whatever that... Once you have s-step one taken care of, you can just wake up and attack step two. So when you figured out that you needed-- you, you couldn't work-- your leadership style wasn't, like, the typical way, and you needed, like, these autonomous people, which, by the way, if you ever start another company again, then I would have to imagine it's gonna be just be you and a bunch of agents. [laughs]

   16. JRJonathan Ross12:51

       It'd probably be AI. So I think this is gonna be a shortcut for founders in the future, and w-we can get into it. But, like, the first thing that you have

7. 13:00 – 14:34

   I Was One Of The World's Worst Leaders

   1. JRJonathan Ross13:00

      to do as a founder is you have to go from the technical thing that you know how to do and that you can add value with to learning how to manage people. And for me, that probably cost Groq three to four years.

   2. DSDavid Senra13:11

      Say more about this.

   3. JRJonathan Ross13:12

      I was a terrible leader. I was one of the world's worst leaders. When I started, um, I, I had a lot of... I, I, I gave people a little too much latitude because I'm more of a delegator, but I, I entrusted people who probably shouldn't have been entrusted with that level of autonomy. I didn't hire people who could operate autonomously, but I was naturally someone who would delegate and give autonomy. So what ended up happening was things would just grind to a halt because they wouldn't know what to do, and I wasn't telling them what to do, and they were used to being told what to do. And then finally, I would get so frustrated, I would go in there and tell them what to do, but it was so unnatural to me that they didn't accept it.

   4. DSDavid Senra13:53

      Why is telling people what to do unnatural to you?

   5. JRJonathan Ross13:57

      I work through questions. I like to, I like to set high-level direction. So for me, my leadership style was come up with a goal that was so-- It took me a while to get there, but come up with a goal that was so simple that I could put it on a challenge coin and give it to everyone. So everyone at Groq had a challenge coin that said twenty-five million tokens per second and had a little graph of it going up, and everyone knew that was the thing to do. And it's sort of like when you ask, um, an agent, an AI agent what-- you know, to do something. The fewer constraints you give it, the more freedom it has to solve your problem. And so I liked to work with incredibly creative people who would come back with surprises.

8. 14:34 – 16:31

   Fewer Constraints, More Room To Surprise You

   1. JRJonathan Ross14:34

      So this is-

   2. DSDavid Senra14:35

      Wait, wait. Say that, say that part again. Say that part again.

   3. JRJonathan Ross14:36

      This is important.

   4. DSDavid Senra14:36

      The fewer constraints-

   5. JRJonathan Ross14:37

      The fewer constraints-

   6. DSDavid Senra14:39

      Yeah

   7. JRJonathan Ross14:39

      ... that you give someone, the more freedom they have to solve the problem-

   8. DSDavid Senra14:42

      Okay

   9. JRJonathan Ross14:42

      ... and the more freedom they have to surprise you with the solution. So if you want to run a highly, highly creative and innovative, uh, organization, then what you really wanna do is minimize the number of constraints, but you also have to give them the things that matter. If you aren't able to very crisply distill what you're trying to accomplish, then either you're gonna overconstrain or underconstrain the people. When you're trying to do something as a founder, you are inherently trying to disrupt an old industry. There's a moat. You're trying to do something differently. If you're not doing something differently, what's the point? There are already these well-established, well-funded companies. If you can bring a team together that is also disrupting and innovative, and it's not just you, then it goes from, you know, being Superman to being the Avengers. And so that was just my natural leadership instinct. Had I been more of a command-and-control person, I should have doubled down on command and control. But you have to, you have to just do what's natural.

   10. DSDavid Senra15:37

       Have you spent any time studying Kelly Johnson, the guy that did, uh, Skunk Works at Lockheed?

   11. JRJonathan Ross15:42

       Not too much.

   12. DSDavid Senra15:43

       Okay. He has this great quote where he said-- It reminded me of what you just said when you did the challenge coin, coin for Groq. He says, "Extreme performance often comes from one brutally clear priority."

   13. JRJonathan Ross15:52

       Yes. Yes. And y-you see this because i-if you don't give people a clear enough but underconstrained enough objective that they can't surprise you in a good way with the result, then you are not giving them the ability to innovate. I, I want, I wanna double down on that for a sec.

   14. DSDavid Senra16:13

       Go for it.

   15. JRJonathan Ross16:14

       The only way for your team to innovate, right, without you being the innovator is they must be able to surprise you in a good way, which means you must not overconstrain the goal.

   16. DSDavid Senra16:27

       And are you saying that took you three to four years into the founding, after the founding of Groq to

9. 16:31 – 19:44

   At NVIDIA There Is No Politics

   1. DSDavid Senra16:31

      figure out?

   2. JRJonathan Ross16:31

      That and basic management, dealing with people, like little things like... One of the, the great things that I've learned at NVIDIA. So a-actually, let, let's take a lesson from NVIDIA because now I'm there. Jensen is world-class, and one of the things that I observed, 'cause I've worked at other tech companies, there's no politics. It's the least political large organization you will ever see. And I learned this lesson at Groq, but I didn't take it to the extreme, so seeing it in the extreme shows me just how valuable it is. There is no circumstance at NVIDIA where there-- where Jensen has one-on-ones with people and tells them one thing. I learned this at Groq because what would happen is I would have a conversation with one person, and then I'd have a conversation with another person, and then what would happen is both of them heard very different things and would talk to each other and come to very different conclusions. But when I had a room full of people and I said something to them, it's amazing how they all heard the same thing. And so when you are leading groups of people, if you want to reduce the amount of politics and people going off and, and, you know, forming side cliques and all this, stop having one-on-ones. Have big meetings with everyone who you want to tell something, and tell them all at once. And don't allow anyone to send you an email. Like, copy everyone on the email. Just, like, the moment someone sends you something, like if someone says, "Hey, this person's screwing up on this thing," copy that person on the email. Let them jump in. Otherwise, you are allowing politics to happen.

   3. DSDavid Senra18:01

      What else have you learned from Jensen?

   4. JRJonathan Ross18:03

      I got way too cute on trying to play 3D chess, whereas Jensen is very much just like, "What does the customer need?" Like, I, I wanna develop trust with the customer. I wanna always tell the customer things that are true and I believe and I can support, and if I have a, a thing that isn't what the customer wants, I'm not gonna sell it to them. I'm gonna sell things to customers that they actually need and that I believe they need. I'm not gonna think like, you know, how do I, you know, build moats? How do I do any of this? It's just like, what does the customer need? Just build that for them, and everything else follows.

   5. DSDavid Senra18:42

      I've done a few episodes of Founders Podcast on Jensen. One of them was how Jensen works, which is es-essentially stripped away all the biographical information that's in that book, The NVIDIA Way, and just, like, I think there's like nineteen main ideas that I cover in that podcast. But one thing we just mentioned earlier, like, okay, well, if you're a founder today, what does founding a company look like going into the future? Like, might just be, you know, you and a co-founder and a, you know, ten thousand AI agents. And Jensen has this great line where people are, like, scared of managing AI agents that might be smarter than them. He's like, "I already do that." He has, I don't know, like sixty direct reports. He's like, "Every single one of them is smarter in their domain, about their domain than I am, and I have no problem orchestrating them and managing them." And I thought [chuckles] that was a great metaphor.

   6. JRJonathan Ross19:22

      One of the things that really good founders do is it goes back to the asking questions, and what a, a really good founder is able to do is even though it isn't their domain, someone comes to them, says something, and they ask a question, and that person's like, "Oh, crap, I didn't think of that." Right? Just over and over and over again. It's a skill. You can hone it.

10. 19:44 – 22:23

    You Have To Learn Confidence

    1. JRJonathan Ross19:44

       And-

    2. DSDavid Senra19:44

       This is in every book on Bezos.

    3. JRJonathan Ross19:46

       Yeah. And, and-- but, but I think this is universal. I think any good founder is able to do this. And again, going back to those early stages of going from a non-founder to a founder, you're gonna end up hiring people, and they're gonna be like, "No, no, I'm the expert in this area. Like, just trust me. You're, you're a kid, you know, just trust me." And you have to learn confidence. So one of the things that happened for me that was very helpful early on in being a founder was I actually got to, um, back when we were maybe thirty-five people, I got to shadow someone who was running an organization of two thousand people. And it was funny because, like, there's no NDA in place or anything, but every meeting we went into, he's like, "Oh, this guy's got an NDA. Don't worry. You can say anything in front of him."

    4. DSDavid Senra20:30

       [laughs]

    5. JRJonathan Ross20:30

       And I was just like, "Okay." Um, but we would go into every meeting, and I was sitting there silent, and I would think, "What would I do?" And at the end of it, each time when he would make his decision, it's exactly what I would have done. What I hadn't realized before that moment was I didn't have the confidence. Part of the problem with, with being a leader was I needed to have the confidence in a decision so that other people would have the confidence to execute. Many people have too much confidence. Some people have too little confidence. And the question is if you have too little confidence, you're probably the kind of person who thinks through things a lot more, but you need to still get to a point where you act with confidence. And when I realized I was making the same decisions as this very experienced founder or CEO, I started acting with confidence, and people started following my direction much more. I didn't change my decisions, but it changed my leadership.

    6. DSDavid Senra21:24

       How many peop- employees did you have at Groq when you did the partnership with NVIDIA?

    7. JRJonathan Ross21:27

       About four hundred and fifty, but it was more difficult to manage than a typical group of four hundred and fifty. So in the military, depending on your rank, you are allowed to, um, to have a certain number of people reporting into you. And the higher your rank, the more you can have as an officer. But when you're, when you have scientists reporting to you, the number is actually much smaller, like dramatically smaller. Because I had such a creative organization, it was much harder to manage them. The, the problems manifested, and so it probably was more like managing a group of five thousand people than it was four hundred and fifty in many ways. In other ways, it was like managing an even smaller group because innovations would just happen on their own. But, like, the better the people, the harder they are to manage.

    8. DSDavid Senra22:16

       Can you explain the state where Groq was?

    9. JRJonathan Ross22:18

       Yeah.

    10. DSDavid Senra22:19

        I think you were at one point, you know, close to running out of money. Is this not

11. 22:23 – 23:50

    East Coast VCs Think, West Coast VCs Follow

    1. DSDavid Senra22:23

       accurate?

    2. JRJonathan Ross22:23

       So early on at Groq, um, and this is a lesson for found-- 'cause if you're doing a capital-intensive business, you're gonna need to raise money. And one of the things that we went through was we had raised money from some VCs who fell out of favor with other VCs and others didn't want to co-invest. And so every time we would try to raise, w-we just struggled. And there's also a little bit of bimodality in, in how-

    3. DSDavid Senra22:51

       Can you say more about that?

    4. JRJonathan Ross22:53

       Well, the way I like to put it is typical, typical, not all, but typical West Coast VCs are more like lemmings, and typical East Coast VCs all think that they're smarter than each other. So when you try and raise from the West Coast, if one VC puts money in, all the others want to put money in. In New York, one VC investing means nothing. They're gonna run their own analysis. They really do not care what other VCs are doing. The flip of that is if you're on the West Coast and one VC passes, they're gonna go tell every other VC, and like lemmings, they're all gonna pass as well. So we had this problem where w-all, all the VCs on the West Coast didn't want to invest in us. We had very few of the typical VCs invest in us at the end. We had, like, a bunch of crossover funds from the East Coast investing.

    5. DSDavid Senra23:42

       Hold on. That's actually kind of hilarious.

    6. JRJonathan Ross23:44

       Yeah. [chuckles]

    7. DSDavid Senra23:44

       The biggest deal NVIDIA ever does by like almost three X and the West Coast VCs missed it. [chuckles]

12. 23:50 – 26:48

    The Keynesian Beauty Contest Of Silicon Valley

    1. JRJonathan Ross23:50

       They all chose other things that were safer. So, so there's this thing called the Keynesian beauty contest. Have you heard of it?

    2. DSDavid Senra23:56

       No, I don't think so.

    3. JRJonathan Ross23:57

       Okay. Um, John Maynard Keynes, the economist.

    4. DSDavid Senra23:59

       Yeah.

    5. JRJonathan Ross24:00

       So the, the idea is, and it, it, it runs in parallel to VC, and, and when you see this, you can start to understand some of the behavior, some of the lemming behavior, because it's actually a good idea to follow other investors. So in the Keynesian beauty contest, imagine I give you a magazine with a bunch of models in it, and your job is to bet on models and say which one's the most beautiful. But the determiner of the, the most beautiful model is not who's most beautiful, it's who has the most money put on them. And that model, like pro rata to how, how much money you put in, you get all of the money that's been bet on all the models. And, and if your model doesn't win, you get nothing. You lose all your money, and it goes to the winner. Well, if that's the case- If someone has a lot of money, they can put it down on any model that they want, whether they're beautiful or not. And a bunch of people made other bets, it doesn't matter. They just come in, and they make a big bet. Now, when you're watching some of these wagers that are happening in Silicon Valley with people putting in big bets, it's because that used to be what won. What's changed, though, is that unlike the Keynesian Beauty Contest, where the winner is the one with the most money, in reality, there's a point at which you get enough money, and you don't need more. And for the first time in history, the, the startups are not starved for cash. They have all they need and more. So now everyone's getting funded to the level that they need, and putting more money in is not an advantage. But people are still acting as if putting more money in gives that startup an advantage.

    6. DSDavid Senra25:26

       Okay, so can you tell the story that you told when we were together at NVIDIA GTC about the drastic change in Groq's fortune and how fast that happened?

    7. JRJonathan Ross25:34

       Yeah. So going, going back to what you asked about almost running out of money, we were about three weeks from running out of money at one point.

    8. DSDavid Senra25:40

       But that was many years ago.

    9. JRJonathan Ross25:41

       That was many years ago.

    10. DSDavid Senra25:42

        Yeah.

    11. JRJonathan Ross25:42

        And-

    12. DSDavid Senra25:43

        You weren't-- So you weren't close to running out of money this time.

    13. JRJonathan Ross25:45

        No, no, no. No, no.

    14. DSDavid Senra25:46

        Yeah.

    15. JRJonathan Ross25:46

        We were, we were fine towards the end.

    16. DSDavid Senra25:47

        You were fine.

    17. JRJonathan Ross25:47

        Yeah.

    18. DSDavid Senra25:48

        But the value-- the last valuation you raised at compared to what you did this agreement at was drastically different.

    19. JRJonathan Ross25:54

        It was really only a little over two X. Um, so that wasn't a huge jump.

    20. DSDavid Senra26:00

        Okay.

    21. JRJonathan Ross26:01

        Um, and we also had the ability to raise at the amount that we, we did, um-

    22. DSDavid Senra26:06

        Okay

    23. JRJonathan Ross26:06

        ... the licensing for.

    24. DSDavid Senra26:07

        Well, let's just go back to-

    25. JRJonathan Ross26:08

        Yeah

    26. DSDavid Senra26:08

        ... what we talked about on stage, where it's just, like, how fast, like, the-- how fast you guys had this insight and then how fast the, the trajectory of Groq changed.

    27. JRJonathan Ross26:18

        Well, it, it was that three-week period from the time when we presented and asked to buy GPUs until, um, not only the, the deal was done, but money had been wired.

    28. DSDavid Senra26:28

        But how many months before were you working on this?

    29. JRJonathan Ross26:31

        Oh, it was probably three or four, maybe a little bit longer. But, but what had happened was I didn't initially think that it was going to be that big of a deal, so I didn't suggest doing it. In fact, it was Sunny, my COO. This goes back to the whole autonomy

13. 26:48 – 30:07

    The Autonomy That Created The NVIDIA Deal

    1. JRJonathan Ross26:48

       thing.

    2. DSDavid Senra26:48

       This is the story I want.

    3. JRJonathan Ross26:49

       Yeah.

    4. DSDavid Senra26:49

       Yeah.

    5. JRJonathan Ross26:50

       So he had the idea of trying to put our, our chips together, and he didn't have, like, a-

    6. DSDavid Senra26:57

       Explain what you mean by putting our chips together.

    7. JRJonathan Ross27:00

       So the, the LPU and GPU, as mentioned, they, they-- they're better at different parts of what's, what's called the decoder layer of an LLM. Um, the GPU is better at the attention portion, and, uh, the LPU is better at sort of applying the weights, which is the, the thing that gets trained as opposed to the memory. And what we realized was-- And, and this is what most people get wrong when they're trying to, to do this themselves. They'll, they'll take the reading of tokens or what's called, um, um, prefill, and they'll do that on one piece of hardware, and then they'll put the generation of tokens on another har-- piece of hardware. But the generation of tokens is the hard part. That's the thinking. You know, reading is easier than writing, right? And that's true for AI as well. And so what we figured out was if-- And, and again, this was all a bunch of people. It wasn't any one person, and it was a group that all innovated. Once he brought the idea of why don't we put them together because they're a different bond, then the team figured out, "Oh, this part goes here, this part goes there." We implemented it, and it worked. And so we also weren't afraid to show it to NVIDIA because we wanted to become a customer of NVIDIA. We wanted to buy GPUs. And so what ended up happening was we, we went, we presented, it made a lot of sense, and the deal happened.

    8. DSDavid Senra28:25

       Okay, so from Jensen's point, once he sees this-

    9. JRJonathan Ross28:28

       Yeah

    10. DSDavid Senra28:28

        ... right, why does he decide to act so quickly?

    11. JRJonathan Ross28:31

        This is the nature of a successful entrepreneur. You move quickly. You don't wait, right? There's opportunity cost to waiting. Technology is not a business where you can wait a year.

    12. DSDavid Senra28:41

        What I'm getting at is why is that so important to his business?

    13. JRJonathan Ross28:44

        Right now, when you go to use AI, it's a little-- It, it may feel somewhat fast, but that's because you're not used to using it much faster. Sort of like when you first used the internet, it felt fast compared to mailing things around. But when you got broadband, you realized, "Oh my gosh, like, this is so much better. I'm never gonna go back." The difference is broadband actually needed people to make their websites faster to make it usable. If the servers are slow, you don't get a benefit. So it took a while to roll it out and, and make it good and get video that could stream and all that. The difference is you, you put, you know, you put these LPUs into a system, and all of a sudden the generation of tokens gets faster, and it's like getting broadband instantly on these existing models. And so now rather than having, like, you know, having to wait, you know, a minute to get an answer, you can get an answer in ten seconds. And that really starts to compound. So let, let me, let me walk through an example of why it's not just speed, but it's also quality. The other thing that I did was I created Google TPU, and at Google there was this time where I'd already moved over to Google X. I was no longer working on the TPU at that point. I'd already done it. And someone else from the TPU team was at Google X, came by, showed me this email, uh, from DeepMind saying, "Hey, you know, we've got this competition. We think we're gonna lose. There's a prize

14. 30:07 – 34:52

    Making A Model Smarter By Making It Faster

    1. JRJonathan Ross30:07

       purse. Um, is your chip as fast as, as we've heard?" And we're like, "Yes." Like, you know, it's like Ghostbusters. You know, when, uh, um, someone asks you, "Are you a god?" You say, "Yes." If someone asks you, "Is your chip as fast as I've heard?" You're like, "Yes." So we, we reply back, "Yes." And they're like, "Great. Competition's in thirty days. We're gonna play the world champion in Go." And we played our test games, and we lost, and we need to win. So they had no choice but to port over to, to that TPU chip. So we did it, and a bunch of interesting things happened. I think-- Do, do you know what an ELO score is?

    2. DSDavid Senra30:46

       Yeah.

    3. JRJonathan Ross30:47

       Okay. So for those who don't know what an ELO score is, it's sort of your ranking in chess or Go, and something like a two hundred point advantage is insurmountable. Like, the probability of you winning is basically zero. AlphaGo running on GPUs had an ELO score of about thirty-two hundred. Lee Sedol was about thirty-five, uh, uh, uh, thirty-five fifty. Um, and I might be getting the first digit wrong. It might be two thousand instead of three thousand.

    4. DSDavid Senra31:16

       Yeah.

    5. JRJonathan Ross31:16

       But like, you know, it was, it was more than two hundred. And then, um, when put on L- uh, on TPUs, it actually went to like thirty-nine hundred or something ridiculous, or twenty-nine hundred, whatever the, the first digit was. It jumped dramatically. And so I think he didn't expect he was gonna lose, but he lost badly. But it was the exact same model. So what changed was the ability to compute more made the result smarter. The way that these models work, Thinking Fast, Thinking Slow from Daniel Kahneman-

    6. DSDavid Senra31:49

       Yeah, I read that book

    7. JRJonathan Ross31:50

       ... what AI does is if I have two hundred and seventy possible moves, which is what you have on a Go board, the AI is going to rank those moves and say, "This is the most-- This is the best move, this is the next best move," and so on. What happens is you, you virtually play that best move, and then you virtu-- play the countermove, and then you virtually play the next one, and then you see how the game unfolds. What you can also do is try that second-best move, and occasionally that second-best move, when you play it out, actually turns out to be the right move in this context. It's not the one that you would normally do, but in the context it's better, and you can see that as you play it out. In the second game, there was this famous move called Move thirty-seven, which was creative. It was original. It actually wasn't completely original. It was a one in ten thousand, um, game move. It had been in the canon of games that we're trained on. But when we went back and played it on GPUs, it never found that move because it was too deep in the chain. So over time, these GPUs have, have, you know, gotten, you know, as good and better than, than TPUs. You know, as the creator of the TPU, I have to admit, uh, GPUs are now better. This is the benefit of, like, just having an entire industry behind you and, and ecosystem and everything. But at the time, TPUs had some novel innovations, right? Now bring in the LPU and you can go deeper faster, you can search faster, and so you can actually make a model smarter by making it faster. And so the realization is now that you've got this ability to reflect, think deeply, and change the outcome based on your thinking, being able to think faster makes you think smarter. And so that's the advantage of pairing the LPU and the GPU.

    8. DSDavid Senra33:41

       I found one of my all-time favorite quotes when I was reading the book Zero to One. The quote says, "The single most powerful pattern I have noticed is that successful people find value in unexpected places, and they do this by thinking about business from first principles instead of formulas." That is exactly what AppLovin has done with their advertising platform. AppLovin connects you with over a billion potential new customers inside mobile games. AppLovin allows you to capture undivided attention. AppLovin ads are full-screen video ads that are watched for an average of thirty-five seconds. That is retention that blows other ad platforms out of the water. And you can launch on AppLovin in minutes. You set the goal, and AppLovin achieves it. There's no complex setup, no expertise needed, and AppLovin scales quickly. They can put your ads in front of over a billion potential customers. Other businesses have seen immediate results, have scaled to hundreds of thousands of dollars of spend per day, and increased their revenue by millions. So you wanna get started quickly before all of your competitors are on AppLovin, and you can do that by going to applovin.com. That's applovin.com.

15. 34:52 – 35:44

    Reality Quotient Beats Intelligence Quotient

    1. DSDavid Senra34:52

       Let's go into a couple of your ideas that you've discovered in, like, the ten years that you were running Groq. What is your idea about reality quotient?

    2. JRJonathan Ross35:00

       So one of the things that we hired for, um, at Groq was reality quotient, which is different from intelligence quotient. And the, the way to think of it is there are plenty of really smart people who wouldn't recognize reality if it tapped them on the shoulder.

    3. DSDavid Senra35:13

       [laughs] Well, you gotta say more about that one.

    4. JRJonathan Ross35:15

       Yeah, yeah. So, so-

    5. DSDavid Senra35:16

       [laughs]

    6. JRJonathan Ross35:17

       ... like you, you just know these people who will construct these very elaborate stories in their minds that are completely disconnected from reality, right? And then there are some people who are just incredibly street smart but couldn't do basic arithmetic or, or anything like that. Reality quotient, oftentimes it starts off as being able to, to recognize reality, but, but in the most extreme form, it's the ability to choose the dominant game that's being played.

16. 35:44 – 37:11

    Find The Dominant Game And Play It

    1. JRJonathan Ross35:44

       So what most really successful founders and entrepreneurs do is everyone else is playing this game, and they realize that if you play this higher-level game, you win. Simple example, MySpace was focused on number of accounts signed up. Facebook focused on monthly active users. It was the dominant game, right? If you have monthly active, that's more important than accounts signed up. And if you maximize the, the monthly active, you're gonna beat someone who's maximizing accounts signed up. You're playing a better game. And so as a founder, you're often able to do this better than other people, and your job leading those people is to try and help them connect their activities to that dominant game. So when running Groq, I, I said our goal was to get to twenty-five million tokens per second of capacity in our data centers. And then everyone had a different way to contribute to that. Meant they could make the chip faster. Meant they could make the software faster. Meant we could deploy more. It meant we could get our power costs down so that we could deploy more, you know, chips for lower OPEX. It meant get more data centers. It meant fab more chips. It meant find ways to optimize the supply chain, so we could, um, put orders in faster to fill things faster for customers when we got it. So everyone could connect what they were doing to that one dominant game.

17. 37:11 – 38:34

    A Founder's Job Is Full-Time Change Management

    1. JRJonathan Ross37:11

       Where being a founder is challenging is you often see that, and you tell it to people, and everyone wants to stick with the old way of doing it, or they care more about the process. So moving from being an engineer to being a founder, the thing that, that finally clicked for me was if I was gonna do something disruptive, my job was full-time change management. And the first principle of change management is to make it feel like it isn't a change.

    2. DSDavid Senra37:40

       Why is that so important?

    3. JRJonathan Ross37:42

       People do not like change. No human being likes change. The difference between people who appear to like change and people who don't like change is often they're looking at different things, and for the, the one that is fine with the change, nothing changed. So if I'm playing this dominant strategy here, and that doesn't change, I'm just trying to maximize the number of tokens per second that I've deployed. When my approach changes, nothing really changed. But if you're down here thinking, "How do I make this, uh, chip faster?" and not thinking about the software, then you might view something that changes the chip as a change. And so your change management duty is to give people enough context so that they see that their job hasn't really changed. What they're trying to accomplish is the same thing, and there is no change.

18. 38:34 – 42:54

    Return On Luck: Seize It Better Than Anyone

    1. DSDavid Senra38:34

       Tell me about Return On Luck.

    2. JRJonathan Ross38:35

       I read this book by, uh, Jim Collins a while ago, and it had this chapter in it, and it really resonated with me. And the thesis is the most successful companies don't have more lucky events. They just seize on that luck better than other companies. And I read this very early on as a founder, and I started to notice it was true. And there was a really good example of this. When LLMs first started to become a thing, I remember getting a phone call from, um, the, the CEO of GitHub basically saying, "I need a bunch of GPUs. We've, we've now gotten LLMs to be able to do code completion. Even though, you know, we're part of Microsoft and everything, um, you know, w-we, we just can't get GPUs. Could we use your, your chips, your LPUs?" And I went to the team, and I'm like, "We got an opportunity. We can do this." And they're all like, "Nope, not gonna work. Can't run it on these chips." I'm like, "No, it looks like it's the ideal thing to run on our chip. It looks almost perfect." They're like, "No, it doesn't work. There's all these things that are in GPUs that we don't have." And I'm like, "Yeah, but none of those are important for LLMs." And they were looking at the wrong things. I let them convince me that we shouldn't pursue it, even though in my bones I kinda knew that, that we should. This happened another time where there was another opportunity to deploy an LLM, and, and I let them talk me out of it. The third time, [chuckles] I'm like, "No, I'm gonna do it myself." And so I just went through the whole thing. I, I did the arithmetic and, and determined the performance, and everyone disagreed with me that it was possible. And I'm like, "No, no, no, look at this." And in the end, we ended up hitting exactly those performance numbers. The thing was they were looking at the wrong-- They were looking at all the reasons why it couldn't be done than why it could be done, and we talked ourselves out of it. I had multiple lucky opportunities that I didn't seize. I mean, how much better off would we have been had we been the original thing running LLMs at Microsoft for OpenAI? That would've been a very different outcome. So we, we lost a little bit, but we were still ahead of the curve when we realized that fast inference was going to be a thing. And I remember very early on, we would talk to potential customers. We even had a video where we sped up, um, like what it looked like, and everyone who looked at it was like, "Why do I need an LLM to be faster than I can read?" And it hadn't occurred to them yet that-

    3. DSDavid Senra41:04

       You're not gonna be doing the reading.

    4. JRJonathan Ross41:05

       You're not gonna be doing the reading, but also that's not how the internet works. Like, do you-- Are you okay with a webpage showing up ch-ch-ch, you know, ch-ch-ch-ch-ch-ch-ch?

    5. DSDavid Senra41:14

       No, I hate that.

    6. JRJonathan Ross41:15

       Yeah, because eyes don't move that way. Eyes move all over. You need the entire thing there. You're gonna look at it, and even before you read it, oftentimes you'll have a sense of, "This isn't what I needed." And you'll start typing your question without reading everything that came out. So I realized that fast inference was gonna matter. No one else did. We had-

    7. DSDavid Senra41:34

       What do you mean no one else did?

    8. JRJonathan Ross41:35

       Even within Groq.

    9. DSDavid Senra41:37

       Okay.

    10. JRJonathan Ross41:37

        There was a lot of pushback on-- Like, we had a lot of turnover at this point. A lot of people were leaving because-

    11. DSDavid Senra41:42

        How many years ago was this?

    12. JRJonathan Ross41:44

        This was probably three or four years ago.

    13. DSDavid Senra41:46

        Okay.

    14. JRJonathan Ross41:47

        And so a lot of people were leaving, saying there was no point to fast inference. It wasn't gonna add any value to the ecosystem. And even though you draw very simple parallels like dial-up versus broadband, no one could connect it.

    15. DSDavid Senra42:00

        I-I'm gonna interrupt you real quick. C-can you say more about this? Because now everybody's just talking about fast inference.

    16. JRJonathan Ross42:05

        Yeah, yeah.

    17. DSDavid Senra42:05

        It's like everything... But what-- And I wasn't paying attention to this four years ago. I had the other stuff. Like I was-

    18. JRJonathan Ross42:11

        Yeah.

    19. DSDavid Senra42:11

        I just wasn't paying attention to this. Can you talk about the, the difference in-- I think this is one of the most important parts of your company's story is just how contrarian, maybe not even the right fucking word, but it was out of favor. Your, your idea, your main idea, people are like, "No, y-it's not important."

    20. JRJonathan Ross42:27

        Well, everything was out of favor. Everything was considered a bad idea that we did, but if you don't do things differently, then you have no advantage, right? Because-

    21. DSDavid Senra42:34

        Why do you think so many-- Four years ago, people just didn't understand?

    22. JRJonathan Ross42:39

        When people don't understand the first principle of something and they're getting involved in it because it's, uh, it's, you know, hype, they don't understand enough to understand why what you're doing is different.

    23. DSDavid Senra42:49

        So that had to be a, a disorienting experience to you-

    24. JRJonathan Ross42:52

        Yeah, I mean-

    25. DSDavid Senra42:53

        To keep saying this.

19. 42:54 – 46:32

    You Can't Sell Speed, You Have To Let People Try It

    1. DSDavid Senra42:54

       [laughs]

    2. JRJonathan Ross42:54

       Well, so what eventually worked was, uh... So, and, and this goes to a little bit of marketing that we, we came up with. We realized that there was no possible way, no matter what we showed people, for them to accept that fast inference was gonna be helpful unless we let them try it. And I, I remember this example from, um, Eric Schmidt does, uh, was involved in this thing, SCSP or whatever, and they, they, they showed off Anthropic, um, an LLM from Anthropic about three months before the ChatGPT moment. And I remember sitting there seeing it, seeing demos of this AI answering questions in the audience and no one reacting. And I'm like, "How is it no one is reacting to this?" Now, compare that to the ChatGPT moment where everyone reacted. What was the difference? The difference was when people asked their question and they got an answer to their question that was specific to them, that was magical. Seeing text show up for someone else's answer wasn't magical. So I realized that, and I'm like, "The only way we're gonna get people to understand the value of speed is if we just implement this, put it on the internet." So we did. And what ended up happening was we, we put it online, and I remember I was doing a, a little bit of a world tour trying to find customers, and I was in Norway. And I was doing a presentation, and I noticed, 'cause I- we had it working, and I noticed that the presentation was, like, when I was doing, um, queries, um, using some of the open-source models, I, I remember it just felt a little slow to me, not, not that slow, but a little slower than usual. I'm like, "What's going on here?" 'Cause, like, I'd been, you know, Norway's further away than the servers, but I tested it earlier and it's fine. I checked in. Our usage had skyrocketed. Someone had posted on, um, on X, uh, a video of a- an LLM running on Groq that was just running super fast, and it was viral. All of a sudden, everyone started creating applications using it, posting those, and it was just such eye candy when, when people saw it that everyone started creating their own and we just went viral.

    3. DSDavid Senra45:03

       Say more about this experience that you had, though. I'm really... Like, you're coming at it from first principles. You're saying these people are getting in- involved in it because it's hype and it's, like, the, the thing that's, you know, being spread around at the moment. Like, what was that experience like for that, that several years where you're just going through this sort of like, "I'm trying to explain why this is going to be important," and you're just hitting blank stare or, or brick wall a- after brick wall?

    4. JRJonathan Ross45:24

       Well, uh, there's this common theme where a lot of really good innovators are innovators because they experienced the problem before others did. Remember my experience of AlphaGo on, you know, TPUs and, and being able to outperform the world's best Go player only because of the hardware that we switched to. Yes, I, I was able to s- to sort of get this return on luck more than others. I'm more able to, like, say, "Okay, there's an opportunity. I'm gonna go for it." But I was also exposed to the opportunities first, and you need both. So you have to be in a position to see the future ahead of... And, and this is the common saying, right? The future's already here. It's just not evenly distributed. Because I was in a situation where I got to see the future, because I was will- willing to, like, seize luck and double down on it when everyone else was like, "No, let's not pursue this opportunity," and I'm like, "Yes, this is the opportunity," those two things are what work together.

    5. DSDavid Senra46:25

       When you're saying, "Yes, this is the opportunity," would you describe the response you're getting as opposition or indifference?

20. 46:32 – 51:07

    I Intend To: Intentional Leadership

    1. JRJonathan Ross46:32

       One of the biggest shifts in my leadership, another book, Turn the Ship Around by David Marquet.

    2. DSDavid Senra46:36

       I read that too.

    3. JRJonathan Ross46:37

       Okay. So-

    4. DSDavid Senra46:38

       I technically read books for a living. [laughs]

    5. JRJonathan Ross46:40

       I know, I know. So I adopted that very heavily in my leadership once I read that because it worked really well with my sort of autonomous leadership style, and the basic idea in intentional leadership is if I ask someone should I do something, oh, they have opinions. Most people will be pessimistic and give you negative opinions. On the other hand, if you express intentional leadership, you say, "I intend to do this," people don't tend to offer their opinion, but if it's very wrong and there's a reason, they will push back, and the example is the submarine commander took over, um, I think it was the USS Santa Fe. I think it was worst in nuclear readiness in, in the nuclear submarine fleet, and in a year or two he got it to number one in readiness, and all he did was shift from command and control to intentional leadership. The quintessential example being saying, be to s- uh, say, "Dive the boat," and there had been incidents where a submarine had dived where the hatch was open, and no one wanted to push back because the commander was command and controlling, and they were used to doing whatever the commander said. But when people would use this intentional leadership and say, "I intend to move the boat down to five hundred feet," then all of a sudden someone's like, "Wait, the hatch is open."

    6. DSDavid Senra48:00

       They're involved in it now.

    7. JRJonathan Ross48:01

       They're involved in it, and everyone says, "I intend to do this. I intend to do this," it gives everyone an opportunity to say what it is that, you know, they're doing so people can hear it, but you're not asking for an opinion. The issue was over and over again earlier on, I was, I was getting opinions from people, and they were stopping me.

    8. DSDavid Senra48:22

       Going back to the three examples in The Return On Luck.

    9. JRJonathan Ross48:26

       Yes.

    10. DSDavid Senra48:26

        Okay.

    11. JRJonathan Ross48:27

        And if I had just said, "I intend to do this"-

    12. DSDavid Senra48:30

        Is that what you did on the, the third example?

    13. JRJonathan Ross48:33

        Yeah, I, I literally said, I, I, I put a presentation together and I said, "We're gonna get to this particular speed per chip," and rather than people going, "We can't do this," they all sort of jumped in and said, "This is how we do it."

    14. DSDavid Senra48:45

        Okay.

    15. JRJonathan Ross48:45

        It's a very small change in phrase, but it has all the difference in your ability to move forward. You're not inviting friction- But yet people would still give, uh, feedback when it was really important. When there was a real problem, they would raise it.

    16. DSDavid Senra48:58

        How does the intentional leadership tie to, the question is, if you were getting opposition or indifference, where were you going with that?

    17. JRJonathan Ross49:07

        I was inviting pessimism by asking for people's opinion. All these-

    18. DSDavid Senra49:12

        Were you asking potential customers? These are teammates? What-

    19. JRJonathan Ross49:14

        No, teammates. Teammates.

    20. DSDavid Senra49:15

        Okay. Okay.

    21. JRJonathan Ross49:16

        It-- So almost everything that is difficult is difficult because you can't go to one extreme or the other. You actually have to, in the context, decide whether you're going this way or that way. One of the difficult things is getting feedback. You hear this from leaders all the time. Early in their career, they get way too much pushback. Later in their career, they don't get enough feedback. How do you balance it so that you're getting real feedback versus just getting unnecessary pushback? And part of that is just the subtlety on the phrasing of, "I intend to do this," as opposed to asking for an opinion.

    22. DSDavid Senra49:52

        Deel is how the best founders turn the world into their talent pool. I've been studying how history's greatest founders operate for a decade, and one thing they all have in common is they understand that recruiting and hiring the very best talent is your most important priority. A players recognize other A players, which is why top companies like Ramp, Shopify, Eleven Labs, Uber, and DoorDash all use Deel. Many of the top founders I know have personally invested in Deel after using their product. And what they discovered is that Deel is the best company in the world at building infrastructure for global hiring. Deel will help your business hire, pay, and manage any worker anywhere in the world so you can retain the best talent anywhere and spend the rest of your time focusing on what you do best, delivering value to your customers. The founder of Eleven Labs has a great description of the value Deel can give your company. He said, "We built Eleven Labs to break down language and communication barriers. With Deel enabling us to hire and support exceptional talent anywhere, we can accelerate our innovation and bring more voices, stories, and ideas to every corner of the world." Deel is trusted by over forty thousand businesses. Learn how they can help your business today by going to deel.com/senra. That is deel.com/senra. Let's go back to this time where you, you were three weeks away

21. 51:07 – 54:13

    Groq Bonds: Trading Salary For Survival

    1. DSDavid Senra51:07

       from running out of money.

    2. JRJonathan Ross51:07

       Yeah.

    3. DSDavid Senra51:08

       And you came up with this idea of... It, it-

    4. JRJonathan Ross51:11

       Grok bonds.

    5. DSDavid Senra51:11

       Oh, Groq bonds. There, uh, before I even get there, something that just popped into my mind as you were speaking earlier about your kind of like leadership styles, you know, basically, "I'm gonna tell them what we wanna do," you have this organizing principle, but you're not gonna tell them how to do it.

    6. JRJonathan Ross51:24

       Yeah.

    7. DSDavid Senra51:24

       You're gonna let them surprise you.

    8. JRJonathan Ross51:25

       Yeah.

    9. DSDavid Senra51:26

       This Phil Knight in Shoe Dog says that-

    10. JRJonathan Ross51:28

        Mm

    11. DSDavid Senra51:28

        ... over and over and over again. And then I'm reading about Groq bonds, and it sounds very similar to some of the things that Phil Knight had to do because Nike was so clo- before they IPO'd. They had to IPO out of necessity because they were just kept running out of money or v- very-

    12. JRJonathan Ross51:41

        Yeah

    13. DSDavid Senra51:41

        ... close to it. And he actually t- converted some of the loans that his, he got from his employees into equity and wound up, you know, doing very well for them. So explain this idea that you had for Groq bonds.

    14. JRJonathan Ross51:53

        We were gonna run out of money, and the leadership team that I had at the time, uh, was starting to put together a list of layoffs, of who we were gonna lay off. And when I started reviewing the list, it became very clear to me that if we did that layoff, we were dead.

    15. DSDavid Senra52:14

        Why?

    16. JRJonathan Ross52:15

        We were already struggling to keep up with what we needed to implement 'cause this was pre... This wasn't even pre-product/market fit. This was pre the product working. We had to write a, a very special compiler in, that had never been written before that didn't require human beings to write what are called kernels. It had never succeeded before. No one had ever done this, and our architecture didn't work with kernels the way everything else worked. So we had to get to this point, uh, this sort of critical mass point, before our product would even work. We hadn't done that yet, and we were talking about cutting people who were critical for that. So when I realized that layoffs weren't going to solve the problem, and it was just a simple bit of burn math, like, you know, we were gonna run out of money, but we just weren't gonna have the talent we needed to succeed, and we were gonna have these other costs. I, I realized we had to, to reduce our burn without reducing our people, and the only answer was to get people to take a salary cut. So we had an all-hands, and we put up, uh, you know, World War II-looking pictures of, of war bonds, and we called it Groq bonds. Wasn't technically a bond. It was an exchange of salary for equity. And we expected that we were gonna have pretty high attrition, and we actually didn't. Eighty percent of the employees participated, and I think, uh, about half, uh, went to the statutory minimum salary by law. And remember, engineers get paid hundreds of thousands of dollars. These folks, like, cut their salary down to, like, fifty, sixty thousand dollars, whatever the statutory minimum was, like real pain. And we saved more than three weeks' worth of runway. I think it was, I think it was closer to two months. We had three weeks of money left when we raised. So had we not done this, we would've gone out of business. The thing that was interesting,

22. 54:13 – 58:46

    Hire For Negatives, Grow For Positives

    1. JRJonathan Ross54:14

       I, I go back to this all the time 'cause we've had a lot of close misses where we had to keep the team together, and there's a phrase I have, which is, "Put everyone's hands on the steering wheel." When people are passengers in a car, they're more nervous about a windy road or a scary road, but when they're the driver, they, they feel more in control. They, they're, they're more willing to take a risk. By doing this, we put everyone's hand on the steering wheel. They were participating in saving our runway. And we had less than ten percent attrition, it might've been closer to five percent, when we announced Groq bonds, which was actually, uh, probably better than our attrition rate before then

    2. DSDavid Senra54:53

       I love this idea. So the other side, you went from, you know, looking for other ways to not fire people, the other side of firing is hiring. You also have some interesting, uh, like, thing, lessons you learned-

    3. JRJonathan Ross55:04

       Yeah

    4. DSDavid Senra55:04

       ... in the decade you, you were building Groq about hiring that are also pretty counterintuitive.

    5. JRJonathan Ross55:08

       Yeah.

    6. DSDavid Senra55:09

       Which a lot of the people that appear on the show have very counterintuitive ideas about hiring.

    7. JRJonathan Ross55:12

       I was very good at hiring people who were incredibly smart and talented, but a lot of the people that we brought in caused organizational problems. I've, I've already kind of alluded to that. And the reason was I'm pretty clever, and so when I meet someone, I can come up with a reason why I should hire them. I think a lot of people do this. They will convince themselves, "I should hire this person. They're great because of this. They have this experience. They, they have this attribute. I'm gonna hire this person." So we have this thing we call the people spec we- we did at Groq, and very much like you have a product spec, we had a people spec. It had version numbers. We would change it. If you don't write down what you're looking for in people, you're not gonna hire that. You're not gonna be consistent. And so we framed the people spec in positives, things that you look for like return on luck.

    8. DSDavid Senra56:04

       Give me a couple more examples of what were the positives on that people spec.

    9. JRJonathan Ross56:07

       Poetic design. So poetry is semantic density. It's when you say so much in so few words. But that's-

    10. DSDavid Senra56:14

        Which is actually really important to you.

    11. JRJonathan Ross56:15

        Hugely important.

    12. DSDavid Senra56:16

        Yeah.

    13. JRJonathan Ross56:16

        But-

    14. DSDavid Senra56:16

        You have this, this phrase, like, I think it's on the Groq blog where it was, just like, "Make every word count," I think you'd repeat over and over again.

    15. JRJonathan Ross56:23

        Uh, every word matters.

    16. DSDavid Senra56:24

        Oh, every word matters. There you go. So yeah.

    17. JRJonathan Ross56:25

        Yeah. It- it's the smallest possible, the, the most minimal expression of the thing you're trying to achieve is the most poetic, and that, that's not just in words. It's also in design, right?

    18. DSDavid Senra56:35

        Mm-hmm.

    19. JRJonathan Ross56:35

        You know something is poetic even if it's not words. And so that's another one. But each of these has a, a negative version, right? So the, the opposite of return on luck would be squanders luck. The opposite of poetic design would be, you know, maximalist design, like just throw every feature in. Like, you, you know some of these products where it's like-

    20. DSDavid Senra56:57

        [laughs]

    21. JRJonathan Ross56:57

        ... "Where am I supposed to click?"

    22. DSDavid Senra56:58

        Mm-hmm.

    23. JRJonathan Ross57:00

        And so it's really easy to spot people who fit some of the positives and not realize they have some of the negatives, and what you're really hiring for is to avoid those negatives because if one person comes in with that negative, they're bringing that into the whole team. The biggest flip in my hiring was when I went from looking for positives, which is what you do when you're trying to grow talent, to looking for negatives, which is what you do when you're trying to select talent.

    24. DSDavid Senra57:25

        Explain that.

    25. JRJonathan Ross57:27

        When I'm trying to help someone grow and improve, I wanna show them the path, right? There's, there's a famous example of how do you increase the amount of money given to a charity. It's not making people, you know, realize how great the charity is. It's not making them feel good about giving to charity. It's about telling them where to send the money. If you tell them how, if you give them a skill or a technique, then they can very often learn it and do it. So when you're trying to grow people, show them the positive. Don't say, "Hey, don't squander luck." Show them what return on luck looks like, which is there was this opportunity once that everyone said no to, and we said yes, and it made us successful, right? When you're hiring, you're really looking to, to vet people, and you're, you're trying to say no to things, and that's a very different motion, and some people are really good at growing. Some people are really good at hiring. But you have to d- uh, you have to separate those two into very different mental modes. The reason I noticed this at Groq was we hired a head of HR who was very good at noticing problems with people and getting them out, and as I observed, uh, her doing that, I realized I had been hiring all wrong.

    26. DSDavid Senra58:36

        Yeah, I think the way you described this to me was you essen- essentially inverted it, and now you're-

    27. JRJonathan Ross58:40

        Yeah

    28. DSDavid Senra58:40

        ... hiring for loss bias is, I think, the term that you-

    29. JRJonathan Ross58:43

        So one of the things-

    30. DSDavid Senra58:44

        ... you put on there
23. 58:46 – 1:00:37

    Loss Aversion And Booking The Win Early

    1. JRJonathan Ross58:46

       attributes.

    2. DSDavid Senra58:46

       Okay.

    3. JRJonathan Ross58:46

       And I think it's an important one. So humans have a natural loss bias, which is, uh, people attach a mathematical number to it, which is a loss is six times more painful than a gain. Like, you see this where someone will invest money, lose 20%, and it'll be very painful, but they didn't invest in something that grew 100%, and that hurts them less than losing 20% of the money even though not getting the gain, the opportunity cost, is much higher. There's a personality trait in people where I call it sort of booking the win early, and y- you'll see, like, we would be in an architecture meeting, and someone would say, "Well, if we do this, the chip will be twice as fast." And I look around the room and no one seemed that excited about doing it. And I'd go, "What's going on here?" And, and I, I started to realize everyone was hearing, "If we do this, the chip will be twice as fast. Let's put that in the next chip." And I'm hearing, "If we don't do that in this chip, the chip's gonna be half as fast as it could be." As soon as I heard that something could be done, I would book it. I would immediately sort of just assume that if I don't do it, I've lost this thing. So as I started to hire, I would look for other people who had the same sort of book the win early attitude. The moment they hear something's possible, they book it, and they're like, "I don't wanna lose that thing." A lot of the most successful entrepreneurs, they sort of manufacture their own sort of discontent.

    4. DSDavid Senra1:00:14

       I wanna get there in one second.

    5. JRJonathan Ross1:00:15

       Yeah, yeah.

    6. DSDavid Senra1:00:16

       But I, I, I think this hiring for loss bias and applying it to not only the talent but also these meetings you're having in product, uh, in product design and, uh, uh, things that would make your product better is actually really important. You mentioned before that you learned from an episode of Founders on Michael Jordan, uh-

    7. JRJonathan Ross1:00:32

       Oh, yeah

    8. DSDavid Senra1:00:32

       ... one way to do this where he would challenge his teammates to bets.

    9. JRJonathan Ross1:00:35

       Yeah.

    10. DSDavid Senra1:00:35

        Why was that an interesting idea to you?

24. 1:00:37 – 1:03:13

    How Michael Jordan Weaponized Humiliation

    1. JRJonathan Ross1:00:37

       When I heard your episode on Michael Jordan, I was thinking like yeah, so he is very intentionally throwing his keys over the fence so he has to go fetch them. What he's doing is Michael Jordan, he, he's a very sort of aggressive competitor where he would make bets on everything, like could you throw a, a quarter and, and hit a target close or something like, just weird stuff like that, and he would just nonstop do it. Most people are afraid- To sort of taunt someone else, a competitor, because if they lose, they're gonna feel really, really bad. Remember, that loss bias is heavy. Like, if I'm like, "We're gonna go play basketball," and I'm like, "I'm gonna wipe the floor with you," and then I lose, that's humiliating, right? What I suspect Michael Jordan was doing was he was very intentionally taunting the other players so that a loss would be humiliating to force himself to perform at superhuman levels. He was just doing it over and over again. Most people are so afraid of putting themselves out there and suffering the negative outcome that they won't get their hopes up. They will actually, um, keep, keep their sights much lower. But entrepreneurs, they start a company and they're like, "Of course I'm gonna be successful. I'm gonna tell everyone. I'm gonna go raise money. I'm gonna put my reputation on the line, and I'm gonna be forced to perform."

    2. DSDavid Senra1:01:55

       Michael Jordan's, uh, trainer is the one that wrote the book that I did that episode on, and he- [laughs] the way he describes this, what Michael would do is exactly what you're saying. He's like, "Well, once you tell somebody how bad you're gonna fuck them up, you have to actually go and do that."

    3. JRJonathan Ross1:02:08

       Yeah.

    4. DSDavid Senra1:02:08

       And putting... And what he realizes, one of the, when Tim Grover was studying, uh, Jordan's career, what he realized is, like, he intentionally heaped more pressure on him because the more pressure he put on himself, the higher he rode, like, the, the better he performed and the higher he rose, uh, throughout, like, his career. I think this is also tied to something that you and I have talked about, which you called manufactured discontent. There's a book on the counter, we were talking in the kitchen earlier before we started recording, that I have out there on David Ogilvy.

    5. JRJonathan Ross1:02:36

       Mm.

    6. DSDavid Senra1:02:36

       He's one of my heroes, and he calls this divine discontent.

    7. JRJonathan Ross1:02:40

       Mm.

    8. DSDavid Senra1:02:40

       That you'll find the best entrepreneurs, the best athletes, anybody who reaches the top of their profession, right? They don't rest on laurels. They don't sleep on wins. There's another book right next to that, the new biography of, uh, Steve Jobs just came out, and Steve Jobs demonstrated this, this, um, this concept perfectly when he's just like, "Well, you made this great product. Now what?" He's like, "Well, I believe that if you make something wonderful, the only thing to do is to do it again, is to, like, not think about it. Just the next day, now I'm gonna go on and, and make another s- great product, and I'm gonna keep doing this." Like, essentially, they're telling you, like, the journey is a reward. So talk about your idea of manufactured

25. 1:03:13 – 1:05:02

    Manufactured Discontent Drives Everything

    1. DSDavid Senra1:03:13

       discontent.

    2. JRJonathan Ross1:03:13

       So I was having a conversation with, um, a bunch of entrepreneurs and a bunch of people in other fields who, you know, some of them had made a lot of money, some of them hadn't, and the entrepreneurs were the ones who were the least happy with their wealth, even though they had more money. Everyone in the discussion was incredibly successful, but what we started to realize was, um, the... Like, even though some of these entrepreneurs had made hundreds of millions of dollars, they were comparing themselves to others, and they never had to work again in their life. But because they were unhappy with their wealth, they had a reason to continue and start another company and, and do more. Meanwhile, the other folks who were very successful, they were quite happy with their wealth, but what they were unhappy with was their, their previous work product, a, a previous piece of writing they had written or something like that. And because everyone in this room was successful, what we identified was everyone had something that they were discontent about that drove them. And so I started looking at, at my own life and, and, you know, there were a lot of periods where th- there was genuine discontent because we hadn't had product-market fit. But then once we had product-market fit at, at Groq, I was unhappy with the scale, and then I was unhappy with, you know, other elements, and I just kept finding things to be unhappy with. Most people can be quite content with the status quo, and they're not gonna keep pushing to innovate. You have to have a personality where you are constantly discontent if you're gonna keep pushing things forward.

    3. DSDavid Senra1:04:52

       What are you discontent about today?

    4. JRJonathan Ross1:04:53

       At the moment, I'm, I'm, um, I'm discontent with the lack of compute in the world.

26. 1:05:02 – 1:07:07

    Every Day Without Compute Has A Real Cost

    1. JRJonathan Ross1:05:02

       AI is revolutionary. Uh, it's gonna change everything for people. You know, there are pros and there's cons, but the pros are massive. Um, you know, there are gonna be medical discoveries, and if it takes us an extra year to cure cancer because we don't have enough compute, that's my fault. Every single person who dies from cancer, every single person who becomes old and, and, you know, infirm and, and dies, like, there could come a point, we don't know, there could come a point where AI, um, comes up with, you know, slow- ways to slow aging, right? All of that I feel is kind of on my shoulders, and I need to perform. I need to make sure that the world has more compute.

    2. DSDavid Senra1:05:44

       I love that idea of saying, you know, every day that we miss out on this mission, there's a, there's a real cost to it. Edwin Land, founder of Polaroid, Steve Jobs' hero, this guy, this ent- one of my favorite entrepreneurs of all time I won't shut up about, but way before he invented the Polaroid camera, he was actually trying to invent new ways to reduce headlight glare. Because in the early days of the automobile, there were so many people dying because-

    3. JRJonathan Ross1:06:06

       Mm

    4. DSDavid Senra1:06:06

       ... the oncoming headlights of the car, and he, what he did is very similar to what you did. He had, like, this organizing principle. When you said, you know, "We have twenty-five, we need to get to twenty-five million tokens," uh, he would put on the, on the whiteboard, you know, "Three hundred people died today-

    5. JRJonathan Ross1:06:19

       Yeah

    6. DSDavid Senra1:06:19

       ... because of this, and if it takes us an extra week, you know, that's twenty-one hundred extra people." I don't know what the number is, but it's something like that. Uh, I do think you're in a perfect position. This show is a love leve- lo- love letter to capitalism. I think we should, uh, end on optimism. Uh, I think the best entrepreneurs in the world are default optimistic and default aggressive at the same time. Can you just, like, give us, like, give me, actually, like, just an overview of what you actually think is coming with AI and as a result of AI? Like, some of the most optimistic things that you could say. 'Cause you-

    7. JRJonathan Ross1:06:53

       Yeah

    8. DSDavid Senra1:06:53

       ... you see what's going on right now, like, everybody's, it's super unpopular. People are, you know, they wanna blow up data centers. They wanna attack certain people inventing the technology. Like, I don't think we've done a good enough job of telling, like, a more positive story.

27. 1:07:07 – 1:10:04

    Code Was Rationed, Now It's Nearly Free

    1. JRJonathan Ross1:07:07

       Well, I, I think that goes back to people perceiving a change, right? Um, I, I had a recent post that got a lot of negative feedback, which was I said that there's effectively been code rationing, right? As a software engineer, the, the default is code is expensive to write. And so I'm gonna be very careful about what code I write. I'm, I'm not gonna create a feature unless I'm absolutely sure that it's the right feature to create. I'm, I'm not gonna implement something until I've got it figured out. And what we've seen from agile software development is when you take the risk and you sort of implement something and you, you get feedback, you end up getting better results. But there's still just generally a very natural predilection to, to say no to things, and so this concept of sort of a no engineer. It's someone's job to, to say no to things, right? They're, they're, they're the ones in the meeting who say, "We can't do this. We shouldn't do this." What I'm seeing is that, um, code is becoming almost free. It's, it... The marginal cost is approaching zero, and it's shifting the way that things are done for professional engineers, where you just implement the thing, you experience it, and you say, "Reimplement it in this different way based on my experience." The other shift is the accessibility. It's very much like liter- uh, you know, um, literature and, and literacy, right? There was a time when scribes were the only people who could read and write, and they sort of controlled access to the written word, and then we got much simpler reading and writing, and, you know, alphabets as opposed to these, these sort of, um, uh, ideographs and, and hieroglyphs and, and so on. And all of a sudden, many people could learn to read. And then we got education systems and everyone could learn to read, and everyone could read and write. All of a sudden it became about the quality of the written word, not just the written word, but everyone had access. My EA creates software applications now. Like, when I go on a trip, she creates a little app which I can click through, and it tells me what the weather's gonna be, and it updates live and, and pulls it from sources and, you know, gives me all my phone numbers and, and all sorts of extra information. That would've been impossible for an individual who didn't know how to write code before. So what I think is gonna happen is a lot of people are going to get access to being able to create software to solve problems who would've never had the technical capabilities before but who would've had good taste and know what good is, uh, like, and there's just gonna be an enormous number of founders, unlike in the past where you, you just didn't have access to the capital and you didn't have access to the talent. I think you're gonna see individual founders, um, without large teams creating very valuable companies that solve real problems for people.

    2. DSDavid Senra1:09:56

       Yeah, I love that framing. Uh, we'll end on this, one of my favorite quotes of yours, which you said, "Looking forward to a year of massive upleveling for anyone who wants it."

28. 1:10:04 – 1:11:48

    Teach Kids To Ask Questions, Not Answer Them

    1. JRJonathan Ross1:10:04

       Anyone who wants to learn can now learn a subject. You just ask questions. The problem with traditional education is it was force-fed to you. It wasn't interesting, and if you're gonna learn something, it needs to be interesting. The ability to ask questions in the moment when you wanna learn something is gonna fundamentally change education. And this goes back to what I said earlier, that the AI age is gonna be about asking questions. I think a lot of people do ask me what are they gonna do for their kids, and my answer is stop teaching them to answer questions and start teaching them to ask questions. Curriculums should be revamped around here's a problem. It actually matters for the community. Maybe, you know, you need to, you need to fix the way that permitting is done in the city. Maybe you need, um, a way to improve the, the way that you get word out of, you know, some sort of events that are occurring, things like... Have the students write actual applications that are useful for the community that they're in and solve real problems, and then have them ask questions. When you create homework or a test for kids, if they can look up the answer online or if they can ask AI to solve it, you haven't taught them what they need for the next stage. But if you give them a problem where they have to ask the questions and get AI to solve it, then you have.

    2. DSDavid Senra1:11:25

       Thanks for the time, man. Glad to do this.

    3. JRJonathan Ross1:11:26

       Thanks.

    4. DSDavid Senra1:11:28

       I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and leave a review, and make sure you listen to my other podcast, Founders. For almost a decade, I've obsessively read over 400 biographies of history's greatest entrepreneurs, searching for ideas that you can use in your work. Most of the guests you hear on this show first found me through Founders. [electronic sound]

Episode duration: 1:11:50