Frameworks for product differentiation, team building, and first principles thinking | Ayo Omojola

1. 0:00 – 4:13

   Ayo’s background

   1. AOAyo Omojola0:00

      ... Cash App as a team, we really cared about what we could do that was different and better than what else existed in market. Being different is not enough 'cause it's very easy to build a thing that's different from what exists today 'cause you just have to look at what exists today and build something else. Being better is not enough because it's also easy to say, "Hey, I'm going to make this thing better and just charge you more money for it." (laughs) It has to be better than what exists today in a way that matters to the end user. And for us, for a long time, it was. When someone says, "Hey, why are you better than Venmo?" I'll be like, "Try and send me a dollar that I can use now." And there's only one app you can do it with.

   2. LRLenny Rachitsky0:34

      (instrumental music) Welcome to Lenny's Podcast, where I interview world-class product leaders and growth experts to learn from their hard-won experiences building and growing today's most successful products. Today my guest is Ayo Omodola. Ayo co-created and scaled Square's popular Cash Card alongside the hugely popular Cash App. He's currently chief product officer at Carbon Health, one of the biggest and fastest growing health tech companies in the world. He's a former founder. He's on the board of Pinwheel, and he's an angel investor in companies like Mercury Bank, Fair, Modern Treasury, and dozens of other startups. In today's episode, we dig into lessons from building and scaling the Cash Card and the Cash App, the importance of differentiation when you're building a consumer product or any sort of product, how to successfully build a startup within a startup, how to succeed in both fintech and in health tech, plus my favorite part of the conversation, a handful of incredibly insightful and practical principles and philosophies around hiring, team building, leadership, and going deep on problems. Ayo is such a fascinating human and leader, and I am excited for you to learn from him. With that, I bring you Ayo Omodola after a short word from our sponsors. This episode is brought to you by Microsoft Clarity, a free, easy-to-use tool that captures how real people are actually using your site. You can watch live session replays to discover where users are breezing through your flow and where they struggle. You can view instant heat maps to see what parts of your page users are engaging with and what content they're ignoring. You can also pinpoint what's bothering your users with really cool frustration metrics like rage clicks, and dead clicks, and much more. If you listen to this podcast, you know how often we talk about the importance of knowing your users. And by seeing how users truly experience your product, you can identify product opportunities, conversion wins, and find big gaps between how you imagine people using your product and how they actually use it. Microsoft Clarity makes it all possible with a simple yet incredibly powerful set of features. You'll be blown away by how easy Clarity is to use. And it's completely free forever. You'll never run into traffic limits or be forced to upgrade to a paid version. It also works across both apps and websites. Stop guessing. Get Clarity. Check out Clarity at clarity.microsoft.com. This episode is brought to you by Eko. Last month, Eko users earned an average of $84 in cash back rewards. How? With Eko, the future of personal finance. Eko is the update to a misaligned financial system, providing an app that works just like your bank but removes almost all of the middlemen, helping even the best money optimizers optimize in less time automatically. What if you earned rewards for paying your rent or got rewarded for ordering food and shopping online or even earned rewards for saving each month? And then imagine if you got rewarded again just for getting rewarded. With Eko, you can spend at some of your favorite merchants and automatically get 5% cash back. Plus Eko's APY rewards look more like $80 not 80 cents. And then there are Eko Points, the world's first open reward system. You earn them whenever you do almost anything in the Eko app. Eko is working to make these points the most rewarding points ever, so it pays to be early. Sound too good to be true? Go to eko.com/lenny, sign up for an onboarding, and find out why it isn't. Lenny's Podcast listeners who attend an Eko welcome session will get an exclusive 4% APY on deposits over $1,000. Learn more at eko.com/lenny. That's eko.com/lenny. Ayo, welcome to the podcast.

   3. AOAyo Omojola4:12

      Thank you for having me.

2. 4:13 – 6:44

   The story of how Ayo used Quora for discoverability

   1. AOAyo Omojola4:13

   2. LRLenny Rachitsky4:13

      I have a feeling this is going to be a really fun conversation. I was doing a little research on you ahead of this chat, and I found this interesting thing that you did in the past where I found you answered over 100 questions on Quora about people trying to ship stuff and mail stuff, and I have no idea what's going on there. And so tell us what is going on there.

   3. AOAyo Omojola4:32

      In 2015, I'd been at Cash App for about a year. You know, I had massive burnout from my last company. We went through IC, kind of like did a hard pivot, imploded a little bit, stuff kind of picked up, sold the company eventually. And my brother, who is my co-founder, and I had this idea, and I think it was, I think it was actually from printing and mailing my Section 83 (b) for something that I'd done. And I was like, "Why is there... Why can't I just, like, go on the internet and, like, do this?" (laughs) Um, and so I had this idea to build an application where you could give it a document and an address, and we would print it and mail it from yo- for you. And it was right around when Lob was founded, uh, which is... Lob is like this printing and mailing API. So we built this thing called Mailform. I think it's, like, one of the top consumer print and mail things on the internet, actually. Like, I'm sure many people who listen to this will have used it before. And then we had to figure out how to grow it. And this, uh... The way that I actually learned how to do SEO was running around the internet trying to find ways to tell people that we did this so that they would find us. Um, and we actually ended up, like... Funny as it turns out. We ended up building a whole sort of SEO, like, content infrastructure around it that has really, you know, i- impacted my thinking. But all the answers on Quora were me just trying to get people... Like, y- you know, if you remember, like, 2014 Quora was, like, this massive thing. So all the answers on Quora were me trying to get people who might be thinking about the problem that we were solving to realize that we exist.

   4. LRLenny Rachitsky6:06

      That was my guess. It was going to be either user research on the space of shipping and mailing things, or it was a growth tactic, and it clearly is the second. You're saying this product still exists, that some people can still use?

   5. AOAyo Omojola6:17

      Yeah. Yeah. It exists. A lot of people use it. Like, we have many big customers that you've heard of and, like, use. (laughs) I w- I won't say their names 'cause I don't know if they, they want me to do that. But like, you know, um, I would say, like, there are a couple of large, like, delivery tech companies that use us to mail 1099s, W-2 forms, what have you.

   6. LRLenny Rachitsky6:39

      Holy moly. Okay.

   7. AOAyo Omojola6:40

      Yeah.

   8. LRLenny Rachitsky6:40

      And this is just a side project (laughs) of yours.

   9. AOAyo Omojola6:42

      Yeah. (laughs) One of many.

   10. LRLenny Rachitsky6:43

       Amazing.

3. 6:44 – 7:37

   The scale of Cash App

   1. LRLenny Rachitsky6:44

      Let's talk about your Cash App experience, which I imagine was a pretty transformative period in your career, and you, from what I understand, you had a major impact on the success of the app and-

   2. AOAyo Omojola6:54

      Mm-hmm.

   3. LRLenny Rachitsky6:54

      ... the business that was built there. To give folks a bit of scale and understanding of this, of just the Cash App in general, can you just briefly talk about how big was it when you joined, like the scale of the app, and then whatever you can share about just the scale today.

   4. AOAyo Omojola7:08

      So, uh, when I joined Cash App was probably sub-50K actives, like people moving money. Today, I think it's north of 50 million actives on a monthly basis, with all different types of money movement, like Bitcoin, P2P, card, stocks. And I think it's something like north of 70 or 80 million actives on an annual basis.

   5. LRLenny Rachitsky7:35

      Wow. Okay.

4. 7:37 – 10:12

   What Cash App did well

   1. LRLenny Rachitsky7:37

      Great. What I want to talk a bit about is the Cash App, to me, is a rare example of a huge consumer app success story. I- I've been angel investing for a while now, and I've just learned how rare consumer apps work. Like, they never work.

   2. AOAyo Omojola7:51

      Yeah.

   3. LRLenny Rachitsky7:51

      And this one worked. Even within a big company, you'd think that there's a huge chance of something working if they have, like, the support of a big company and the platform, things like that. Still, they almost all fail. And so what I'm curious about is what do you think you all did most right, one, to launch it successfully in the consumer space, and then two, to keep it growing and scaling to where it got today?

   4. AOAyo Omojola8:13

      My perspective is that, and I- I think this is a, people don't like this kind of answer. (laughs)

   5. LRLenny Rachitsky8:21

      I'm like- I'm- I'm excited to hear this.

   6. AOAyo Omojola8:22

      But like the thing, the thing Cash App did right was like ten things, not one. Like it was, there- there were like ten things that actually best in class, like insane talent density, insane focus, very strong at fraud. A lot of- a lot of, um, the way like Brian and Dustin and Jesse and Dhanji, like tried to organize the team and let you know with Jack's support, was just really firewalled from the rest of Square. The hero customer was the consumer, not the merchants, so it was like, you know, literally in 100% of trade-offs, the consumer's needs came first. (laughs) And w- that- that's a very, very hard thing to do, like inside a company, like it made people angry actually. Um, really inc- insane focus on design. (laughs) Um, incredible like depth in- in... Th- this is the thing that- that I think you will appreciate but it's very hard to appreciate just like as a, you know, consumer of things. People would be like, "Hey, what's the difference between you and Venmo?" And the only (laughs) reason you'd ask that is if you just hadn't thought about it for- for a second. Now, today, there's like a lot of convergence on features, like, you know, sort of Venmo sort of caught up on a lot of things. But at the time, like Venmo didn't have push to debit. Venmo didn't have instant, like for- for like three or four years in the United States, the fastest and lowest cost way to move money in the country between any two people who had bank accounts was Cash App. And I think that kind of changed in 2017 when PayPal, Venmo, Apple Cash, et cetera, kind of came out and- and launched a lot of things. And so, I think actually it's possible that having done only one of those things well, Cash App might have been successful, but I think the- the reason it's differentially successful in the market today is the compound effect of all those things.

5. 10:12 – 13:08

   Lessons from building consumer apps

   1. AOAyo Omojola10:12

   2. LRLenny Rachitsky10:12

      What are some of the lasting lessons that you take to other consumer apps that you're, like Carbon Health, for example-

   3. AOAyo Omojola10:19

      Yeah.

   4. LRLenny Rachitsky10:19

      ... or founders that you work with? Because all those things are amazing. Hard to replicate sometimes.

   5. AOAyo Omojola10:25

      Yeah.

   6. LRLenny Rachitsky10:25

      Is there stuff you extract from that, like here's something that I'm gonna do it anytime I'm building a consumer app, is like the design-led component? Is there anything else along those lines?

   7. AOAyo Omojola10:33

      This is the thing I struggle with. Um, I- I saw on Twitter somebody say this comment that like a lot of times when people describe their success to you, what they're really saying is like, "This is my lottery ticket number." (laughs) So I, to be- to be honest, eh, before I go down this diatribe, I don't actually know which of the things are replicable. I just know like kind of what I believe to be true and, you know, I'm trying some, some works and some not, et cetera. So I think Cash App as a team, we really cared about what we could do that was different and better than what else existed in market and for us, for a long time, it was instant. It was... And if you look at all the products, like you'll see this sort of theme of like, you know, when you cash out, there's an instant option. When you get a- when you get a cash card, we issue a card to you instantly. When you sell stocks, money's available instantly. When you sell Bitcoin, money's available instantly, like literally there's no like, ah, circle, circle, circle processing. It's like available to spend. And I think there's something actually lasting about the concept of instant because they're still in the world today are like lots of businesses and processes that are like asynchronous, but not for any reason other than that's just the way the world is. (laughs) So I think that's like one thing that's kind of narrow and then I- I would say another thing that I think is really broad is just being really crisp about why what you're doing is different and better than what exists today and it's- it's like being different is not enough 'cause it's very easy to build a thing that's different from what exists today 'cause you just have to look at what exists today and build something else. And being better is not enough becauseIt's also easy to say, "Hey, I'm going to make this thing better and just charge you more money from... for it." (laughs) And so I think that there's like, you know, different, like, you, you optimize for doing a thing that's different. It has to be better than what exists today. And it has to be better than what exists today in a way that matters to the end user or to the buyer, like kind of depending on where your market is. And then like after all that, it also... you have to be in a domain that matters. 'Cause it's very easy to get those three right, like to build like a real... Like, how, how do you say this? A thing that's different and better than what exists today, um, in a way that matters to end users could also just be art. Which is, is just, like art is a complex thing to scale. (laughs) And so you have to like then also get the economics right, get the entire pipeline of like how you ship, how you build, how you talk about it, all of that stuff has to, has to work as

6. 13:08 – 14:08

   Why it’s so important to be different

   1. AOAyo Omojola13:08

      well.

   2. LRLenny Rachitsky13:08

      I think there's some really great lessons there just to kind of mirror back what you're saying, just differentiation in this case ends up being really important. And if you're trying to disrupt someone doing something like say Venmo, like you can't just be better than Venmo, you have to be different.

   3. AOAyo Omojola13:22

      Yeah. Yeah.

   4. LRLenny Rachitsky13:22

      And it sounds like Instant was the differentiator in this case.

   5. AOAyo Omojola13:24

      For a long time, yep, yep. Or, or rather it was the cut through the clutter differentiator. There were like actually like a lot of other sort of long tail of things that we were doing that was different, but it was like Instant was the thing where, you know, when someone says, "Hey, why are you better than Venmo?" I'd be like, "Try and send me a dollar that I can use now." And there was only one app you could do it with.

   6. LRLenny Rachitsky13:46

      Mm-hmm. And I think the other element of this, it connects to something I'm working on, uh, on, in the newsletter is when you're trying to find a big idea, especially in B2B, but in this case it works in B2C is just, it needs to be important.

   7. AOAyo Omojola13:58

      Yeah.

   8. LRLenny Rachitsky13:58

      It needs to matter. Like it can't be-

   9. AOAyo Omojola13:59

      Yeah.

   10. LRLenny Rachitsky13:59

       It can't be a better thing that nobody values highly.

   11. AOAyo Omojola14:02

       Yeah, yeah.

   12. LRLenny Rachitsky14:03

       'Cause then you won't make money in B2B and in B2C people won't even use it.

   13. AOAyo Omojola14:06

       Yep.

   14. LRLenny Rachitsky14:06

       So these are really great.

7. 14:08 – 16:36

   What Ayo learned from how Square/Block operates

   1. LRLenny Rachitsky14:08

      You mentioned in passing when we were preparing for this that Block was trying to kill the Cash App for a lot of time early on.

   2. AOAyo Omojola14:15

      (laughs) I wouldn't say, I wouldn't say like Block was trying to kill, kill the Cash App. I think that there were many, many people who worked there that absolutely like... And, and I mean this in the nicest way, identities were tied with, with Square being a merchant business, believed that the investment in Cash App was... could have been better deployed elsewhere, didn't want to work on consumer. There, there was just like a myriad of... And then I... Look, I'm sure people who were there at the time would say like, "We probably also made mistakes and didn't communicate well and didn't sell it well." and so on. But there was a crazy amount of friction, I'll put it that way. It wasn't like... It just, it wasn't... Like, you know, a thing I will 100% give Brian credit for is he was really effective at making sure that we had a shot.

   3. LRLenny Rachitsky15:04

      Zooming out for a moment and thinking about just Square and Block and how they operate as a product company and as a business, is there anything that you've taken away from that experience that you bring with you to where you are now? Which I want to talk about next.

   4. AOAyo Omojola15:16

      I don't know necessarily if this was intentional. My guess is it was probably just like a, a, um, a consequence of Square going through going public and trying to be sort of a rigorous financial institution. I think when you are in a large organization trying to do a actually new thing, I, I think small teams are better than big ones, period. And forcing the teams to be like super sort of thoughtful about like hitting milestones and, and actually adding value, because th- Like, there's this thing people say about like, "Hey, this startup within a startup" where they think is fake. And the reason I think it's fake is because like when you're in a startup, you actually worry about paying the people who work for you. And when you are inside of a company, you just don't. And there's just a difference between like having that existential fear of are we gonna be here tomorrow and not. So I think a consequence of not having that existential fear is that it's easy to just be like, "Hey, I need more resources." And the organization has some habits around how you acquire resources. And if the leadership of the p- of the, uh... If the leadership building the new thing happen to be good at that, you can have growth in an- in a, you know, new projects people size that doesn't match the new project's success and potential. And, and I think that actually ends up, it ends up being a tax over time.

8. 16:36 – 19:06

   How to succeed at building a startup within a startup

   1. AOAyo Omojola16:36

   2. LRLenny Rachitsky16:36

      That's a really good point. I didn't think about asking about that, but in this case it was a startup within a company that did well. And I also agree it rarely works, and it did here.

   3. AOAyo Omojola16:46

      Yeah. Yeah.

   4. LRLenny Rachitsky16:47

      What is, what is it that you think that was so central to make it work? I know you just talked about it. How would you summarize just like here's the thing yeah, everyone should do when they're maybe starting something s- small within a big company that's new?

   5. AOAyo Omojola16:57

      Th- there are some macro things where I do believe we were children of fortune, like mobile, et cetera. Um, when I joined Cash App, a lot of the people working on it were fairly tenured both at Square and just like in their careers and had like done sort of really meaningful things. And as a consequence, I th- I do, I do think there's like... This is the thing I, I haven't quite been able to articulate well, but there is something around like a small, tightly knit senior team super focused on a problem. A- And the smallness means just like less paralyzed communication and then the tightly knit means a lot more trust. And then I, I think like Brian was obviously just... He'd been at, at Square for a long time, knew the organization well, was a color operator around there, knew like talent, like who was good that he wanted to, you know, bring on board. And I think that combination of things, uh, like, my, my... Well, not my guesses. There are other things, but I think like without that thing, it would actually have been really, really difficult.

   6. LRLenny Rachitsky18:02

      I think that's an awesome lesson, just like a small trusted team that has seniority and leadership trusts to operate and not just like, "Hey, what the hell are you doing? It's time to-"

   7. AOAyo Omojola18:12

      Yeah. Yeah.

   8. LRLenny Rachitsky18:13

      ... time to, time to ship faster.

   9. AOAyo Omojola18:15

      The Cash App team stayed super senior for a long time.

   10. LRLenny Rachitsky18:19

       Mm-hmm.And you said small. How small would you, was it/what do you recommend when you say it should be a small team for something like this?

   11. AOAyo Omojola18:27

       You know, a lot depends on the thing. There, I, I don't think there's a one-shot answer.

   12. LRLenny Rachitsky18:31

       Mm-hmm.

   13. AOAyo Omojola18:31

       When I joined Cash App, it was like 11 or 12. And it wasn't much more than that for like a year. (laughs) Um, and even, I, I, I forget how big it was when I left, but like we had real scale and a real business before we had a real headcount, I guess is the way I would say it. And like-

   14. LRLenny Rachitsky18:52

       Love it.

   15. AOAyo Omojola18:52

       ... you kind of had to fight for every, ever, every headcount. And I think the headcount at this point was a Sarah Friar thing from Square. She's just, you know, really, really disciplined about making sure that if you were trying to bring people on and spend the company's money, you really just

9. 19:06 – 22:51

   How Ayo transitioned from fintech to health tech

   1. AOAyo Omojola19:06

      fight it.

   2. LRLenny Rachitsky19:07

      I think that's a really good takeaway. Let's transition to talking about what you're currently doing, Carbon Health. You went from consumer fintech to consumer health tech. First of all, just real quick, just how did that transition happen? Was that something you planned or is that just like you went on exploring and that's where you ended up?

   3. AOAyo Omojola19:24

      Uh, it was more, more I, I went on exploring, that's where I ended up. I think, um, I'd say there's, there's maybe three parts. There's one part where, um, when I was exploring, there's this guy, Russell Friend, who now works at Carbon, who had int- he introduced me to like a third of my network in Silicon Valley. (laughs) And the nicest guy, and basically he said, "Hey, there's this guy who's amazing. He was founder of Udemy and now he started this company called Carbon Health. His name is Aaron. You need to talk to him." And I was like, "Sure." (laughs) And, and Aaron and I met, and Aaron is brilliant and also had a, um, this crazy way of explaining a, a complex problem in a way that made the solution obvious. And so it was like, he was like, "Oh yeah, like here's how we're gonna do it and here's..." You know, the thing we spent like two and a half hours together. And then at the end I was like, "Oh yeah, like this is obvious."

   4. LRLenny Rachitsky20:20

      Yeah.

   5. AOAyo Omojola20:20

      "Somebody should just build this thing." (laughs) And then I think the second part was... I, I think everyone's the hero in their own story. I'm no different. So like, I think when I, when I left Cash App and when I was thinking about what to do next, I was thinking of starting a company and doing all this stuff. And one of the muscles that like we really just spent a lot of time building at Cash App was going really, really deep into like the regulatory sort of wallpaper of the problems we were trying to solve. And so we would, you know, we would have sessions where we'd be sitting in a room, like product, engineering, legal, compliance, et cetera, with some regs literally blown up on a projector screen and a section of text highlighted and being like, "Hey, what does this really mean? Okay, what if we build a product this way? What if we structure money movement this way?" Et cetera." And so I casted myself instead as, "Hey, what if... What if I could be good at regulating businesses instead of just good at money?" Um, and that was, that was the, that was the way that I tied the two together. (laughs) There, there were a bunch of like other sort of very personal like ego things, like I want to build a team that's mostly, mostly founders. Um, I, both my parents were doctors a- and I've been through some sort of, uh, scary experiences in the healthcare system. So there was just like a part of it that was about sort of mission and background, but the career part was really about how do you stitch two things together? And, and I, I also wanted to learn... There's, there was this thing that happened in my like fourth year at Cash App where I was like, "Oh, there's this other thing that we have to build that would be amazing if we actually build it." Uh, which is what Pinwheel, the company I'm on the board of, actually is. I was like, "Hey, we got to build like this platform for payroll." It's like, you know, the last giant money movement thing that hasn't really kind of moved the needle in a long time. And I couldn't get the organization convinced to build it, which kind of is what it is, um, A, and B, I was like, "Oh, I want to have that insight. How, how can I have that insight of like what the second thing is faster the second time around?"

   6. LRLenny Rachitsky22:23

      Mm-hmm.

   7. AOAyo Omojola22:24

      And I am sad to report that three years into Carbon, I have not had it yet.

   8. LRLenny Rachitsky22:27

      You got a lot going on. I, I am not surprised.

   9. AOAyo Omojola22:30

      (laughs)

   10. LRLenny Rachitsky22:31

       So I was gonna ask, what draws you towards regulated, (laughs) highly regulated industries being at Cash App? And I like that you already went there. Basically, you just found that that's maybe the thing that you could get really smart at and that applies to a lot of different markets. That's an interesting, uh, insight about yourself. Like this could be the thing that I, I get good at.

   11. AOAyo Omojola22:48

       Yeah, yeah. Or differentially better at than

10. 22:51 – 28:32

    Why Ayo loves hiring founders

    1. AOAyo Omojola22:51

       other people.

    2. LRLenny Rachitsky22:51

       You kind of like mentioned this off to the side, this idea that you like to hire founders.

    3. AOAyo Omojola22:55

       Mm-hmm.

    4. LRLenny Rachitsky22:56

       And can you speak more to that? Just like what-

    5. AOAyo Omojola22:58

       Yeah.

    6. LRLenny Rachitsky22:58

       ... what that means in your day-to-day, and then maybe how your team looks today? Is that, is it mostly founders or some larger percentage?

    7. AOAyo Omojola23:05

       Yeah, yeah. Uh, I think team looks today about half and half. So I had this experience going through YC where, and, and just like kind of growing up in my career in Silicon Valley, uh, where I knew a bunch of founders who were like absolute beasts, like incredible people, could do amazing things. And they would bounce off organizations. They would be like, "All right, I'm gonna go work at Amazon," and j- and just like not last. (laughs) And when I was at Cash App, I went through a bunch of hiring processes where I was like, "Hey, like we should try and hire, you know, some founders to do this. Like, look at these companies," et cetera. And a thing that would happen that... A- and this, this part really isn't about founders, although the founder's like one way some of this happens, but a thing that would happen quite often is by the time you get as- as a hiring manager, you get a bunch of resumes to look at. Like you post a job, a bunch of people apply, you get about... You're partnering with a, with a, a sourcer. By the time you get a bunch of resumes to look at, they've screened out everyone that doesn't just like fit inside a box. And it's like, you know, at Google, Facebook, Amazon, Microsoft, Apple, (laughs) and then at certain set of schools, um, and then a certain type of experience, et cetera. And so what would happen is like if you just happen to not look like that profile, I don't even see you.And I would say, "Hey, like, I would like to hire some nontraditional candidates here," who were, like, founders or whatever. And I would just, like, never get it. It was ju- it wa- it was almost like the machine just worked a certain way. Like, there was an algorithm, and the algorithm was upstream of me. And I had this belief that these, sort of these people that I'd seen, many of whom have now gone on to start companies that are doing quite well, would be incredible value add. Like basically, if you, if you could just... It's kind of like, if you could just hold onto a rock for a little bit, it can take you, like, pretty far. (laughs) And, and so this is one of the things I t- I talked to Aaron about actually early on when I joined Carbon. And I would literally... In the job posting, I'd be like, "If you've been a founder before, even if your startup has failed, please apply to this." Because, like, a, a thing that's I think common among founders too is, uh, there's, like, this sort of imposter syndrome that is, goes hand in hand with the chip on the shoulder. And so we... Like, Car- my team's much smaller now than it was, but, like, I, I probably, I think, the whole time that I've been at Carbon, hired about 50% founders. And I, I, I'm actually 100% certain the thesis was right, and I think it just came with costs that were kind of theoretical at the time and I, I, I, and I didn't, uh, and I now, now they're real. I think, like, the two big costs are if there's any waste or bullshit in your organization, like, they fucking (claps hands) see it right away and call it out.

    8. LRLenny Rachitsky25:58

       (laughs)

    9. AOAyo Omojola25:59

       And so there's this, like, you have to, like... There, there, there are just these scenarios where I'd just be like, I just have to sit and listen to somebody tell me all the things that we're doing wrong. (laughs)

    10. LRLenny Rachitsky26:11

        (laughs)

    11. AOAyo Omojola26:13

        So there, there's j- there's one, it's just like a, it's a, it's a way to cut through bullshit. That's, that's one cost. And then I think the second cost is, uh, and, and I, I, I say cost as in, like, it is not better for the organizations. You have these people who come in, they're incredible, and you really can only keep them for, like, two or two and a half years.

    12. LRLenny Rachitsky26:34

        (laughs)

    13. AOAyo Omojola26:34

        And so (laughs) what ends up happening is they're just like, "Oh," like, "I want to..." You know, they're obviously, if you're gonna be person who starts a company, you're, like, super ambitious. So they're like, "I'm gonna go run a team somewhere else. I'm gonna go try some other thing," or, "I'm gonna go build a company." And so it, it's kind of like a, a team that I think is differentially higher output, but also differentially higher attrition on the market.

    14. LRLenny Rachitsky26:55

        Got it. I was gonna ask about the cons, and I like that you, uh, shared them already, 'cause I imagine working with a lot of founders, uh, adds a lot of stress too.

    15. AOAyo Omojola27:02

        Yeah. I mean, it, it is, it is unequivocally awesome. Like, I love it, (laughs) and I think, I think the, the unexpected pro also is I do think it, like, levels up the team. Like, people in a team that is, like, very founder dense really likes it. And we ended up over time at Carbon, like, there's lots of people who have founded companies here in multiple functions, not just product.

    16. LRLenny Rachitsky27:24

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11. 28:32 – 32:12

    Team-building strategies

    1. LRLenny Rachitsky28:32

       While we're on this topic of team building and hiring, do you have any other lessons and approaches that you found to be effective in hiring or team building, just general rules of thumb or philosophies?

    2. AOAyo Omojola28:46

       My biggest thing, and I say this all the time, is, uh, when you're hiring, you pick the people, but they pick when. So you're, you're actually... Like, there's, there's these people, there are many, many people on the team who the time between when I first met them and the time when they joined the team was, like, months. There was one person who was, like, a year and a half off. And so sort of the way that I operationalize that is, like, I'm meeting people all the time, and I'm just like, "Hey," like, if I meet somebody I want to work with, I'm like, "Hey, how can I, like, add value to your life so you'll consider me that somebody who you would like to work with one day, so that when the time comes and there's an opportunity for us to work together, you're actually open to it as opposed to just some guy that you met on a Zoom one time?" And I, I would say that's, like, the biggest. The biggest thing is just, like, trying to be, like... Like, one of my core philosophies in life is that everybody wants something. And m- most of the time, it's not something you have to give or you can connect them to, but if it is something that you have to give or you can connect them to, it's criminal not to, actually. It's like, imagine you... Like, just imagine you're, like, having a conversation with somebody and that person knowing that you want something, having it, there's no cost for them to give it to you, and they just don't do it. How crazy is that? And so, like, I think... You know, the, the way that I sort of bring this to life is if I meet somebody who I want to work with, I'm, like, straight up with them about it, and I'm like, "Hey, I hope we can find a way to work together one day. In the meantime, it looks like the things you want are not to work with me right now, but they look like this category of things which I'm aware of. Can I connect you to this person, this opportunity," what have you. Um, and...... it's, it's, it's not my thing. Like, actually, Russ did this for me. When I joined, when I, like, came to Silicon Valley for the first time, he was like, "Hey, I'm not gonna invest in your company. I think it's stupid, but here are all these people who might. Go meet them." And that was, like, transformational for me, and, and, and it, it, it has turned out that over a long enough time horizon, it does come back. You just don't hold the cards close to your chest, just give them away.

    3. LRLenny Rachitsky30:54

       Is there a story or an example of that, that comes to mind of you doing that for someone else?

    4. AOAyo Omojola30:59

       Now it's a little bit of a professional hazard 'cause I'm an angel investor, and so I, I do this for a lot of, like, my founders. But I probably made 600 intros last year, and that probably drove, like, at least one person signed up somewhere as an advisor. A couple people took some jobs. Um, a bunch of angel investors invested in companies. A couple of companies found, found leads for around, like, I think it's... And, and, like, I'm not special in this way, by the way. Like, a lot of people do this. It's just I'm very aggressive about it. (laughs)

    5. LRLenny Rachitsky31:30

       And you're also connected to a lot of people, as you've shared. Like, because of all these things you've done, and the fact that you prioritize this, I think it's a really cool combination of you really prioritize connecting and helping.

    6. AOAyo Omojola31:41

       Yeah.

    7. LRLenny Rachitsky31:41

       Plus, you know a lot of people from all the work that you've done, and there's this element you just shared, which is just like give people things that they want because if, if you-

    8. AOAyo Omojola31:50

       Yeah. I'm a, I'm a, I'm a reasonably good matchmaker, except in love.

    9. LRLenny Rachitsky31:53

       Oh.

    10. AOAyo Omojola31:53

        Never once, never once introduced two people who dated. (laughs)

    11. LRLenny Rachitsky31:57

        Let's, let's talk about not now. We'll move on from that.

    12. AOAyo Omojola32:00

        (laughs)

    13. LRLenny Rachitsky32:00

        Uh, I also, I think am, am zero, zero for some, some denominator I don't even know.

    14. AOAyo Omojola32:05

        (laughs)

    15. LRLenny Rachitsky32:06

        Um, I'm gonna keep fishing in this pool of kind of philosophies of how you build product, and then we'll come back to Carbon Health.

12. 32:12 – 36:58

    The importance of going deep and challenging assumptions

    1. LRLenny Rachitsky32:13

       I was reading something that you wrote about how you're really big on understanding the thing, like going deep on stuff, just generally as a product leader and as a, as a collaborator. Can you just talk about your approach there and where you apply that philosophy?

    2. AOAyo Omojola32:27

       Th- This, I took away from Cash App. There was... Um, when we were working on the Cash card, the very first, you know, rem- so this is like 2015, 2016, the very first iteration of the Cash card, the head of design at Cash App was a guy, Robert Anderson, was an amazing designer. Please hire him if you can. Um, had like this design and he was like, "Hey, I have this design, you know, like, we're gonna do this thing." And we, I'm like, "Great." I get some sketch files, maybe, PDFs, pre-Figma. We mail them to, like, some card vendors, and the things they send us back are like, (laughs) like, "You would put this out as the product in your life in the world? Like, what are you doing?" And, um, and the consequence, Brian was like, "Hey, like, we just need somebody to go figure out how to get this thing made." And so I ended up spending a long time just going to different card manufacturing factories around the country to figure out, like, how do cards get made? Like, what are the possibilities? Is there, like, new tech we can take advantage of? Will the people even talk to us? Is the thing we're talking about even possible? And we ended up doing, like, at the time, there was a, I wouldn't say, like, super new. It, it had been on the Chase Sapphire for a few, for a few years, but it wasn't on mainstream cards yet, this concept of laser engraving. And it turns out that, like, the machine that you use to make laser-engraved cards has, like, thousands of combinations of settings, f- which all create, like, a different physical effect. Like, you can increase the power setting and get, and literally burn the plastic, and you get kind of a red, rough texture, and you could, like, decrease the power settings and, you know, in- de- decrease the aperture, and you get, like, a really fine, smooth con- consistency. And th- this is, like, a- again, a thing that I, I learned, um. We went through between plastic, the overlay, the paper, the envelope and the, like, finishes, easily a thousand combinations before we got to, like, the first version of Cash Card that we shipped. And there's a team still there, still doing, like, literally physical card objects that are not the same as anything that exists in the market. This is, like, going to the differentiation thing. And then, like, a, a lot of the stuff we did around, like, our regulatory work, around prepaid, you know, uh, building a digital wallet, et cetera, made me realize that, like, a thing that would happen very frequently is you wanna work on something and you go talk to an expert. And usually, for most people, an expert is not, like, hey, the most expert person in the world because, like, that's a very, very hard thing to know who that is, especially when you're not an expert. Usually, an expert is the most tenured person in the world in the domain that you're questioning, and, like, th- the level, like, the, the both the length of tenure and the depth of experience actually, like, can, can vary very wildly from person to person. And so what would happen is, like, you go ask somebody something, and they would give you an answer, which is, like, the thing that they believe to be true. They're not lying, and it's not malicious, and it's just fucking wrong. Um, and you just have to keep pushing till you get to an answer. Like, I, I don't really know how, the right way to articulate this all the way, but it's kind of like you, you can't stop till you get to the end. And this is one of the reasons why being in a domain that matters is really important, because that's a very, very expensive activity to do if you're in a s- if you're in a small-time environment. So, uh, the, the, like, way that I apply that today, and I'm sure people at Carbon will tell you this, is I end up asking lots of questions that people think don't matter because I'm like, "Hey, we're trying to optimize something." And usually what I find is, when you're trying to optimize something for, for the first time, they haven't optimized it before, you actually have to remeasure it. You have to reinstrument it. You have to, like, rebuild all the queries, all the, like, visuals, et cetera, from scratch, and you have to look at them, like, 15 different ways. And then every time some, two things, like, aren't incongruent, you have to, like, go and figure out why, and it's just, like, tedious work. And-... in, in regulated industries, and I think this is, my guess is this will end up being true in almost any complex environment with a lot of variables that are kind of cons- like, and the more sort of constrained by physics they are, like, I think actually the more this matters. Um, you just, you, you can't avoid the details. You just have to get into them. And like if you don't, you can still do well, but it's actually more than likely fortune

13. 36:58 – 38:45

    Why you should always ask questions

    1. AOAyo Omojola36:58

       than skill.

    2. LRLenny Rachitsky36:58

       You said you ask these questions that don't matter. Is there an example recently? 'Cause that's a really interesting concept, um, of just a question you asked or questions you like to ask that are just like, "Goddamit, why is Aio- Aio asking these questions?"

    3. AOAyo Omojola37:08

       Yeah. (laughs) I have, there's like one from like yesterday where, um-

    4. LRLenny Rachitsky37:12

       Yeah. Perfect.

    5. AOAyo Omojola37:14

       ... there is a field in a database table that tells you why a payment was made, and there's a bunch of, of values in that field that are very articulate. Like, hey, this payment was made because it was co-pay. This payment was made because, um, it was the patient was visiting without insurance, right? And then there's like a field that is empty. There's a value that's just null and we, we use null as like, hey, like the way that null is described is after a claim is adjudicated and complete and the patient has a balance, we, we leave that field blank if we're charging, if we're just billing the patient for their balance. The problem with that is if there is any other exception or reason why a payment might occur, and we, we're in a complex environment, we have over 120 clinics, there's a lot of humans who can press the pay button in a bunch of different places, you will not know if it's included in that field, in that like null value field. And so it's, it's just, this is like one of those things where I like, I'm in the middle of a Slack with, with a colleague who's like, "Why are you asking (laughs) this question?" And I'm like, "I just need us to put residual balance in that field if that's what it's for. That's all I'm asking." (laughs) Um, so I do that a lot and I, you know, I think people hate it.

    6. LRLenny Rachitsky38:37

       Did they actually go ahead and do that?

    7. AOAyo Omojola38:39

       Well, they, we're in the middle of it right now.

    8. LRLenny Rachitsky38:40

       Uh, you're in Slack. Okay. Right.

    9. AOAyo Omojola38:42

       (laughs)

    10. LRLenny Rachitsky38:42

        Okay. I love this.

14. 38:45 – 41:43

    Lessons in leadership

    1. LRLenny Rachitsky38:45

       So I made a list of the, kind of these lessons and I really like this area we're diving into of just your kind of philosophies to work in life. So just the ones I wrote down is the importance of going deep and doing the thing yourself and not trusting that somebody's response is the end. Like, I love the way you phrased it, of don't stop until you reach the end.

    2. AOAyo Omojola39:06

       Yeah.

    3. LRLenny Rachitsky39:06

       This idea of helping people if you can, connecting people and the power of that, hiring founders and working with founders, and clearly the story you just told is very founder mentality of just like going to the warehouse and trying 100 different cards. Is there more here? What else have you found to be an important approach to leadership or product building or things along those lines?

    4. AOAyo Omojola39:29

       Yeah. Can I, can I say one, one caveat about the first one I think you wrote down? Um, it's not that you have to do everything yourself, it's that the person who you trust in the execution role, they, they have to become the expert. They have to be like, they can't stop till they hit the end. And I don't know, I, I, I think like so much in, in all these places where, you know, super ambitious people are trying big things, so much value is lost when the person in the execution role isn't really in command of all the details and is like... And, and so I think like it's just, the reality is like you can't... To, to, to do ambitious things, you have to work with people. I can't do everything myself, and I, I know that. I just, the, the real lesson there is it's not like I have to, just somebody has to (laughs) . Um, and you, and y- you know, they have to know that that's like what does, that what you're holding them accountable for and that you trust them to do that, and the organization is trusting them to do that as well.

    5. LRLenny Rachitsky40:30

       How do you actually operationalize that? It sounds like part of it is to hire founders who naturally want to do the thing well.

    6. AOAyo Omojola40:37

       Yeah. Yeah.

    7. LRLenny Rachitsky40:37

       Is there anything else in terms of how you set up the team where like this person has power to do the things that need to be done? Is it like an autonomy perspective? Is there anything else you do that allows for that in a product team in a company?

    8. AOAyo Omojola40:48

       It's like a trust but verify, and I think it's just almost never enough for someone to say, "I can't do it because X person said." It is, "I can't do it because we are contractually obligated to, to do this another way, and if we do not honor the contract, these will be the consequences." Like, and, and y- you know, another thing I like to do kind of along this is like, "Okay, articulate to me what actually will happen if we don't do it this way. Like, what will break? Like, are they gonna fine us? Is the patient gonna be..." Do you know what I mean? Like, 'cause in my mind there are many things that are used as excuses because some person's understanding of how some regulatory thing works from like their last job is being applied here where you're literally creating a worse experience for your consumer or for your patient. I'm like, "Why would you... Like, if we're not here to try and make the experience better for them, why are we even here?"

15. 41:43 – 44:48

    Advice for founders in the health-care space

    1. AOAyo Omojola41:43

    2. LRLenny Rachitsky41:43

       Let's come back to Carbon Health for a bit, and I just have a couple questions there I wanted to touch on. One is just about starting a company in healthcare and health tech. There are so many companies that launch every day, every week trying to make the healthcare industry better in various ways. But for all these reasons, I don't know, the incentives are off, there's regulatory capture, there's things take a long time. Things just like often don't work. Carbon Health is an example of something that is working really well. What is your advice often to founders who want to go after the healthcare space as a tech company? Do you... What, what do you need to know? What should you do right, do wrong? What is your advice there?

    3. AOAyo Omojola42:23

       Yeah. So one, one thing I would say in healthcare that fortunately or unfortunately I think is true is, uh, very often the way to make things happen is network dependent, not...... necessarily about the merit of the thing itself. So it's just, like, there's, like, companies that exist because the founders know the CEO of every major payer in the country, and so there's just, like, a deal they can get, or data they can get that's, like, not available in any other context. So, I think, I think there's just a thing there of understanding if that's the business that you're in. (laughs) Um, I think in, in Aaron and Cesar's case, and at Carbon, because we're direct to consumer, we're not trying to sell to payers, we're not trying to sell to employers, um, and Aaron o- obviously just a hugely successful consumer person, uh, starting the largest education platform on the planet, at Udemy. Like, th- there was actually really, really good founder-market fit. He was, like, a person who had, like, very, very technical and had a ton of D2C, um, uh, success doing another thing that was D2C. But there are businesses, like, I'm, I'm... There's a company that I'm, I recently invested in and I'm working with, where the founder's incredible and very, very technical and not super high on network. And a thing... And, and so, like, a lot of what I try to do with them is, like, "Hey, meet this person, talk to this person." And then also, "This is, like, a really crisp, specific use case that you need to, like, optimize around." And, and maybe I'm wrong. Who cares? Like, I'm just some guy. What, what does it matter what I think? It doesn't have to be what I think. It just has to be crisp. (laughs) And using that as a way to, like... Because the more crisp it is, the easier it is gonna be for you to know who the decision maker and the organization you need to get to is. Because, like, I, I just find, like, I, I'm sure you see this in, in B2B businesses, so much... There is just so much leverage in knowing the person in the place who actually has their finger on the button versus trying to, like, network your way in, and people don't wanna spend their social capital introducing you to, like, this department, or they've just got, like, 19 other things going on. (laughs) So, I think, like, that network thing is just a thing that, like, sticks in my mind. That when I see, like, a lot of healthcare tech startups swimming through the soup, a lot of it is about there's some organization they have to navigate to get to the right decision maker, and they have to do it 100 times. (laughs) And so much of it is, like, just waiting for the guy who promised me the intro to make the intro.

16. 44:48 – 46:58

    What Carbon Health is

    1. LRLenny Rachitsky44:48

       That is really good and practical advice. Before we wrap up, I, I wanted to give you a chance just to, like, describe Carbon Health for folks that may not be familiar with it. Just, like, what is it? How, where can you use it? How do you sign up? Who's it for? And then-

    2. AOAyo Omojola45:01

       Yeah. Yeah, yeah, yeah. Oh, great. Yeah.

    3. LRLenny Rachitsky45:02

       ... yeah.

    4. AOAyo Omojola45:02

       Very, very happy to do this ad. It is a paid ad, 'cause Carbon Health pays me. Um, so-

    5. LRLenny Rachitsky45:08

       (laughs) Where no one's paying me. I get it.

    6. AOAyo Omojola45:10

       (laughs)

    7. LRLenny Rachitsky45:10

       I'm losing, I'm losing in this situation.

    8. AOAyo Omojola45:12

       I'm, I'm paying you in prestige, Lenny.

    9. LRLenny Rachitsky45:14

       Yes. And wisdom, and insights-

    10. AOAyo Omojola45:16

        Yeah, exactly.

    11. LRLenny Rachitsky45:16

        ... and your attention. Yeah.

    12. AOAyo Omojola45:17

        Exactly. So Carbon is a, uh, an extremely vertically integrated healthcare provider, uh, based in the United States. By extremely vertic- integrated, what I mean is we build and run the clinics, the providers work for Carbon, and we build and run the software, and we run the entire operation. And it's all, like, full stack in-house. And when I say, like, we build our own software, it's, like, w- where, how you book, how you pay, the, like, literal buttons that the provider presses to, like, say, "Hey, Lenny has... Lenny's blood pressure looks good," all of that is software that we built in-house, all the way from front, from, like, the patient clicking book an appointment on google.com to, um, the claim being sent to the insurer. We build the whole thing full stack ourselves. Uh, we have, I wanna say, 130 clinics around the country. I believe we're in about 17 states. Uh, we do virtual care. I think we're one of the biggest healthcare provider in California. And we do, uh, both urgent care and primary care. And the thing that gets me super excited about Carbon is a lot of the experiences we build are the things that, as a consumer, you believe should exist in healthcare. So we... You know? Uh, I wanna say, last year we launched this diabetes program where you slap on a continuous glucose monitor, you link it to Carbon, and it streams your blood glucose measurements directly into our EMR natively, and your providers can see it and, like, interact with you around it. They can help intervene. They can tell you, like, you know, new l- dietary lifestyle choices to make. And we're gonna do that with every device at some point, on some scale. And you don't have to pay $200 a month to use it. $200 a year to use it, sorry.

17. 46:58 – 52:08

    Lightning round

    1. AOAyo Omojola46:59

    2. LRLenny Rachitsky46:59

       Amazing. Amazing. Well, with that, we've reached our very exciting lightning round. I've got s- six questions for you. I'm gonna go through 'em pretty quick. We'll see what comes to mind. No pressure. You can skip them too if you want. You ready?

    3. AOAyo Omojola47:11

       Yeah.

    4. LRLenny Rachitsky47:13

       What are two or three books that you recommend most to other people?

    5. AOAyo Omojola47:17

       Three-Body Problem, Children of Time trilogy, and, uh, Stormlight Archive.

    6. LRLenny Rachitsky47:24

       And are these all sci-fi books?

    7. AOAyo Omojola47:26

       The third is fantasy.

    8. LRLenny Rachitsky47:28

       (laughs) Thank... Good clarification. Uh, great. Amazing. I'm reading a epic sci-fi book right now called The Fire, Fire in the Deep.

    9. AOAyo Omojola47:37

       Oh, dude. Amazing.

    10. LRLenny Rachitsky47:39

        Okay. Yes.

    11. AOAyo Omojola47:40

        So, something that's gonna really piss you off. I don't think it's a spoiler.

    12. LRLenny Rachitsky47:43

        I want... Don't... No spoilers. I'm almost done.

    13. AOAyo Omojola47:45

        It's not a spoiler. Um... The story's not finished.

    14. LRLenny Rachitsky47:52

        Hmm. There's, like, additional books that aren't done yet?

    15. AOAyo Omojola47:55

        Yeah. And I don't even know if they're being written. It's brutal.

    16. LRLenny Rachitsky47:58

        That's okay.

    17. AOAyo Omojola47:58

        (laughs)

    18. LRLenny Rachitsky47:58

        I find, like, the first book, except for The Three-Body Problem, where the first book is the worst book, I feel like-

    19. AOAyo Omojola48:04

        (laughs)

    20. LRLenny Rachitsky48:05

        ... with this and the many of these books, the first one is, like... I'm just gonna stop, I think, at the first one, is my plan.

    21. AOAyo Omojola48:11

        So, so I'd say, uh, the other two are, in my opinion, very clever explorations of types of intelligence.

    22. LRLenny Rachitsky48:18

        Excellent timing for, um-

    23. AOAyo Omojola48:20

        ... for the first one. Yeah.

    24. LRLenny Rachitsky48:20

        ... studying, uh, what might happen with AGI.

    25. AOAyo Omojola48:23

        (laughs)

    26. LRLenny Rachitsky48:24

        Great. I love this. I love where this is going. Next question. What's a favorite recent movie or TV show?

    27. AOAyo Omojola48:29

        War of the Worlds was exceptional.

    28. LRLenny Rachitsky48:32

        Is that recent?

    29. AOAyo Omojola48:34

        Yeah. There's, there's one that I think... I think that it, it was a three-season thing just ended maybe last year.

    30. LRLenny Rachitsky48:39

        Oh.

Episode duration: 52:08