Lenny's PodcastHow to work through fear, give hard feedback, and doing layoffs with grace | Matt Mochary
EVERY SPOKEN WORD
140 min read · 28,082 words- 0:00 – 7:39
Matt’s background
- MMMatt Mochary
The biggest marker that I've seen between a botched layoff and a successful layoff is at the moment someone hears that they no longer have a job, did they hear it from their manager in a one-on-one? If that's when they heard it, it'll be okay. But if they heard it in an email, in a group chat, in a, any kind of thing that where they were sitting next to, or they were hearing it along with other people, it wasn't personalized, it wasn't one-on-one, that is terrible. And that's when people get really angry, and that's when they start going onto Twitter and going to newspapers and et cetera, because it feels dehumanizing. It feels like, uh, "You didn't give a shit about me. You didn't, you didn't even have the courtesy to tell me to my face." And of course, there's no way to allow that person to express their emotions because they're in a group. So that's the most important thing.
- LRLenny Rachitsky
(instrumental music) Welcome to Lenny's Podcast. I'm Lenny, and my aim here is to help you get better at the craft of building and growing products. Today my guest does Matt Machari. Matt is a full-time executive coach, but not just any coach. He's worked with folks like Naval, the CEOs of OpenAI, Coinbase, Reddit, Rippling, Fair, Front, Notion. The list goes on. He's also coached partners at VCs like Sequoia, YC, Benchmark, many others. We are so fortunate that Matt agreed to join me on this podcast. And in our conversation, we cover a lot of ground. We talk about why learning to fire people is one of the most important skills as a leader and how to do it well, why anger and fear often point you in the exact opposite direction you should be going, how to innovate within a larger company, how his coaching has evolved over the years, where the most successful founders still struggle and so much more. This may be my new favorite episode, and I bet it will be yours too. There's so much real talk with tactics, templates, all kinds of goodness. Enjoy this conversation with Matt Machari. This episode is brought to you by AssemblyAI. If you're looking to build powerful AI-powered features in your audio or video products, then you need to know about AssemblyAI. AssemblyAI is the API platform for state-of-the-art AI models that thousands of product-led growth companies like Spotify, Loom, and CallRail are using to infuse AI into their products. With simple APIs, developers and PMs can get access to powerful AI models for transcription, summarization, and dozens of other tasks that are fast, secure, and production-ready. All their models are researched and trained in-house and continuously updated by their team of AI experts, which for a PM makes it easy to build and ship new AI-powered features. Product teams at startups and enterprises are using AssemblyAI to automatically transcribe and summarize phone calls and virtual meetings, detect topics in podcasts, pinpoint when sensitive content is spoken, redact PII from audio videos, and way more. Visit assemblyai.com to try AssemblyAI's API for free and start testing their models in their no-code playground. That's assemblyai.com. This episode is brought to you by Lemon.io. You've achieved product-market fit. You're able to activate, engage, and retain your customers. But you don't have the engineers that you need to move as fast as you want to because it's hard to find great engineers quickly, especially if you're trying to protect your burn rate. Meet Lemon.io. Lemon.io will quickly match you with skilled senior developers who are all vetted, results-oriented, and ready to help you grow, and all that at competitive rates. Startups choose Lemon.io because they offer only handpicked developers with three or more years of experience and strong, proven portfolios. Only 1% of candidates who apply get in, so you can be sure that they offer you only high-quality talent. And if something ever goes wrong, Lemon.io offers you a swift replacement so that you're kind of hiring with a warranty. To learn more, just go to lemon.io/lenny and find your perfect developer or tech team in 48 hours or less. And if you start the process now, you can claim a special discount exclusively for Lenny's Podcast listeners, 15% off your first four weeks of working with your new software developer. Grow faster with an extra pair of hands. Visit lemon.io/lenny. Matt, thank you so much for being here. Welcome to the podcast.
- MMMatt Mochary
Thanks for having me. I'm looking forward to it.
- LRLenny Rachitsky
I am looking forward to it even more. The way I learned about you is back in the day, I read this book called The Great CEO Within, which I have right here. And I was like, "Holy moly, this is the most tactical, practical, useful book I've seen for leaders, I need to tell everyone about it." And I did. And then a few weeks ago, someone shared a link in my newsletter Slack community to this document that is called the Machari Method Curriculum Document, and I was like, "Oh my God, this is the most practical, tactical, useful document I've seen in a long time. I gotta share this with everyone." And I did. And then I realized it's the same person that wrote these two things. And so I reached out to you, and you kindly agreed to join me on this podcast. And so again, really appreciate you being here.
- MMMatt Mochary
Thank you for having me.
- LRLenny Rachitsky
To give folks a little bit of background on you who aren't so familiar with you and just to help understand a little bit about how you got so wise, can you give folks just kind of a brief overview of some of the wonderful things you've done in your career, maybe some of the folks you've worked with, and how you got to what you do now?
- MMMatt Mochary
Right on. So I've had a very varied career. I started off, I started a company back in, in Internet 1.0 called Totality, which was a good financial outcome. Then I went and just had fun for a long time, and then I went and did social good and-... helped ex-convicts get and keep a job by becoming truck drivers. And all that was super fun, but I realized I missed my peers and I wanted to get back into the tech world, but I didn't wanna start a company 'cause a company is a lot of work and, and the end result is you make a lot of money, but I didn't need money. And, uh, and so I thought, "How could I get in the tech world but not actually have to do the hard work? Oh, I could be a coach. I could coach people and then I just get to do the fun stuff and advise them and then they have to do the hard work." And so I looked around and thought, "Well, how could I do that 'cause I'm not a coach, and so why would anyone listen to me?" And then someone told me that there were students at Stanford that had started companies, but they... No one would coach them. They couldn't get into YC 'cause YC doesn't accept students. So I went and started coaching them and it was super fun and, and very successful, and then they started recommending me up the food chain and eventually I met folks like Naval Ravikant and Sam Altman and Brian Armstrong, and they recommended me around to, you know, the rest of the tech community and ended up coaching some of the, the CEOs and the leaders of the, of the biggest tech companies and biggest tech investment firms. And it's been a ton of fun, and I've just, uh... For me, I do things for joy and each and every one of these interactions has been massively joyful for me and, and, and the people I coach become my really close friends. So it's all very selfish on my part.
- LRLenny Rachitsky
(laughs) I- I feel you on a lot of that. I also tried to explore starting a company again and similarly decided this is way too much stress and work, what else can I do instead? And that's what led to the work I do now, which I love.
- MMMatt Mochary
(laughs) Right on.
- LRLenny Rachitsky
How- how long have you been doing this coaching?
- MMMatt Mochary
So that whole process started about 10 years ago, so
- 7:39 – 12:24
Areas where even very successful founders struggle
- MMMatt Mochary
about 10 years.
- LRLenny Rachitsky
Awesome. So, uh, you have a lot of fans on Twitter and the internet, and ahead of this chat I polled folks on Twitter and asked them what they would ask you if they were chatting with you, and so I thought I'd start off with asking a few of those questions and then we'll dig into a few very specific topics that I'm excited to talk about.
- MMMatt Mochary
Great.
- LRLenny Rachitsky
And the first question comes from Leo Polovets, who's a GP at Susa Ventures, and he asked, "Matt has coached some incredible founders. What are some of the most common areas where even the most successful founders still struggle?"
- MMMatt Mochary
Great question. Um, so to me the... sort of the, the bar is fear, and how strongly do people feel fear? There are a few people that I coach that just don't feel fear at all, and frankly with them we have very tactical conversations, but they're the minority. The most feel fear to some degree, some feel it a lot, some feel it less, but when they feel it, it grips their mind and it prevents them from seeing... pre- prevents them from doing the thing that is difficult but necessary. And so that's a lot of what our coaching is, me pointing out to them, "Hey, I think you're in fear." And what happens is very early on in coaching they'll go, "Yeah. Okay, I'm in fear. So what?" I go, "Great. I believe that fear is actually giving you bad advice, and I think you're, you're predicting that if you do this, A, will happen. Well, I'm predicting that if you do that, the exact opposite will happen. So I'll tell you what, why don't we make a bet? Why don't we pick something, this is very high stakes, why don't we pick something that's lower stakes? You make a prediction, we'll see if I make the opposite, and then let's bet on it." So we pick something and then we make a bet on it, and whoever wins the bet in the future gets to determine what the actions are. I've made this bet hundreds of times and so far I've never lost, and it's not because I'm a magician or, or a genius, it's because when someone's in fear they're gripped, they can't see reality. Their brain is making very exaggerated predictions. Whereas when someone is not in fear, and I'm not because it's not my situation, I am not gripped and therefore my brain isn't making exaggerated predictions. And so we make this bet, once I win then all of a sudden the CEO realizes, "Oh my God, there's something to this fear gives bad advice," and then after that, all I need to do is remind the person that, "I perceive them to be in fear." That's all it takes. And they're like, "Oh, okay." And then they go ahead and do the thing that they feel fear about and then, of course, later they come back to me and said, "Matt, that was magical. It, it worked so well." And, yeah. I mean, I'll give you examples. The, the most extreme is when a CEO realizes that there's a problem in the business and they haven't told their board yet and their board doesn't know, and remember, their board is their investors, and they have another round coming up. They know they're gonna have to raise money in another six to 12 months and they need their current investors to participate in the upcoming round, otherwise outside investors won't, and then they say, "Well, what the hell do I do? I've got this problem. Do I tell my investors?" And mo- most often the, the knee-jerk reaction is, "No, I'm not gonna tell them." And then I say, "Well, I think that's fear. I think if you actually tell them, tell your investors, the exact opposite of we think is gonna happen is gonna happen. You think you're gonna lose their trust, I think you're gonna gain their trust." And so if we've done this fear exercise before, they do it, they share transparently with their board all the problems and say, "And I'm excited to tackle these problems." And every single time that's happened, the board members have said, "This is fantastic. I love this honesty. Thank you so much. You know, this is the, one of the only companies that I'm on the board of that actually is transparent and honest," and they gain trust.
- LRLenny Rachitsky
I'm glad that you brought this topic up. I wanted to spend time on it, and so just to double click a little bit into it, just kind of to summarize your advice here, if you feel fear, which you may not recognize you feel, the advice is do the opposite of what your brain is telling you to do, right?
- MMMatt Mochary
Generally. I mean, check with someone. Don't just randomly-
- LRLenny Rachitsky
(laughs)
- MMMatt Mochary
... was like, "I feel fear crossing the street, crossing a crowded highway."... and then go, "Oh, that's spirit talking to me. I should cross the highway anyway," and then get hit by a car. No, that's not what I mean. I don't mean physical danger. I mean things that we perceive to be danger to our egos. But the, the easiest thing is just to check with somebody else who's not in fear, because they will be able to see clearly when you can't.
- 12:24 – 13:24
How to address people to minimize defensiveness
- MMMatt Mochary
- LRLenny Rachitsky
I was working through your curriculum and, you pointed out that you found a way to express to somebody that they are in fear. I think it was your wife that kind of, like, iterated on how to give you feedback that you're in fear where you didn't get defensive and, like, got more fearful and angry and-
- MMMatt Mochary
Yeah.
- LRLenny Rachitsky
... uh, could you talk a bit about that?
- MMMatt Mochary
Yeah. So we, we iterated, um, I at times feel anger and I act on that anger, and I don't even realize I'm in anger. So I wanted her to let me know. And so she would say, at first she said, "You're in anger." And that just made me feel accused and made me go into more anger. And then she said, "Are you in anger?" And that felt passive-aggressive or indirect, and that also made me go into more anger. And then finally she said, "I perceive you to be in anger." So it's an I statement, and it's simply what she's perceiving. There's no judgment. And that was able to punch through my anger, and then I, I woke up, I went, "Oh," and then I stopped, and just didn't act until I was able to shift out
- 13:24 – 15:02
The destructive nature of anger and how to feel your feelings so you don’t hurt others
- MMMatt Mochary
of anger.
- LRLenny Rachitsky
Awesome. And anger and fear, I think there's different, uh, pieces of advice for if you feel angry versus fear. Is that right?
- MMMatt Mochary
Yes. Yes.
- LRLenny Rachitsky
What kind of a-
- MMMatt Mochary
I mean, anger, you're just destroying shit. And you're-
- LRLenny Rachitsky
(laughs)
- MMMatt Mochary
... what you're doing is you're destroying relationships. And so you just gotta stop because you're breaking glass and, of course, you're breaking it with the people who are closest to you. They're the people who are nearest to you, which are the people you love and care about the most. They're not only people you work with, but they're the people you live with, and you don't wanna do that. You don't wanna-
- LRLenny Rachitsky
No.
- MMMatt Mochary
... hurt them.
- LRLenny Rachitsky
Yeah. Maybe one last question along these lines. Why do we do this? Is this just we're trying to protect our, our ego and ourselves, and we just wanna do the safe thing?
- MMMatt Mochary
That's it. I mean, I just learned very recently, and this isn't written anywhere 'cause I just learned it, someone shared with me that anger is not a base emotion. Anger is actually a cover. It's a cover for when we feel pain. And so our brain doesn't wanna feel the pain, so instead it externalizes it. But the problem is it shoves that pain onto everybody else around us. And so the real answer here is not to have people let us know that we're in anger and then stop. The real answer is just to allow ourselves to feel the pain. And it sucks, by the way. It's r- it actually hurts. But then we're not... Sorry, I'm getting emotional. We're not pushing that out onto other people. And I only learned very recently and I'm just starting to practice this, and I'm still not good at it, but I'm, I am now at least sometimes not going to anger.
- 15:02 – 19:03
Which books led Matt to his coaching journey and software platform
- LRLenny Rachitsky
It's interesting how personal this advice is, that it sounds like something that you deal with. It's not just, like, you're this coach that's just like, "Hey guys, here's all these problems you have, and here's how you fix," like, stuff that you, you help yourself with.
- MMMatt Mochary
I'm human.
- LRLenny Rachitsky
Yeah.
- MMMatt Mochary
Yes. And that's why I'm, I try to figure it out with me, and if I can figure something out with me, then I can share it with others.
- LRLenny Rachitsky
Mm-hmm. Amazing. That was, um, that was a fruitful question from Leo, and we might come back to this topic but, um-
- MMMatt Mochary
And by the way, this, this also applies to organizations. I mean, the way that I used to get all this information about how to run organizations is I started a company, Totality, and my co-founder and I, we did a terrible job running that company. And so what I, what I happened was I didn't have any learnings from that, that I could share with people 'cause it was just worst practices, not best practices.
- LRLenny Rachitsky
Mm-hmm.
- MMMatt Mochary
But then 10 years later, I thought to myself, "Well, how could I have done that better? How could we have done that better?" So I picked up a, a book, a business book. It was High Output Management by Andy Grove, and, uh, I read it. I was like, "Oh my God," (laughs) "here are all the answers." And then I read another book, The Hard Thing About Hard Things, but Ben Horowitz. I was like, "Oh my God, there are even more answers." Just kept reading more and more business books, and every one I read, they were just chock full of answers. But then I needed to test whether or not these really worked, so that's when I started coaching and I started testing them in companies. But I had to let the people know, "Here, do this," but they weren't gonna read a 350 page book, so I had to summarize it in two pages and then share it with them, and then they did and then they implemented it, and it worked. And so then I had all these summaries, and then I started creating my own summaries of, like, little niche cases that weren't in any book that I'd read, and that's where all these writings came from. And then one day, someone, you know, that I was coaching said, "Matt, you gotta take all these writings you g- they're a book. You gotta publish them." And I said, "No, I don't." And the guys and my friend said, "Well, how about I do all the work? How about I take care of the editing and the publishing?" And I was like, "Okay. If you wanna do that, great," and that was Alex McCaw. Others had offered before, but he was the one that actually followed through all the way to the end.
- LRLenny Rachitsky
(laughs)
- MMMatt Mochary
And, uh, that was it. That's how the book was born. But I realized also recently that many of my m- most radical ideas, I can't get anyone to test them, because I'll say, "Hey, I think you should do blank," and the CEO will say, "That sounds crazy, and can you, Matt, point me to other examples of other people that have done this and it's worked?" And I say, "No. This is an original thought came out of my head. No one's done it before that I know of." They're like, "Okay. Well, I'm not gonna be the first." So then I realized I needed an organization to test my most radical ideas and also all of my CEOs had been asking me to create software, because I have a methodology and it's step one, step two, step three, and you do it in one-on-ones, and then a methodology for a team meeting, and then a methodology for feedback, and then a methodology for every different motion in the company, and it's all in Google Docs. And they said to me, "Matt, this is amazing. I love this one-on-one process, I love your team process, but I don't wanna have to teach each of my reports the way you've taught me. I like it just being software I just hit a button and boom, it happens automatically."And I, at first, I said, "No, that's not interesting to me. I'm not a developer. You know, you, Brian Armstrong, you're a developer and you have a thousand engineers that work for you. Why don't you go create it?" But in the end, I said, "Okay. Uh, this could be fun." So, I hired a team of developers and we've started to create the software and, and one, the product is working, but two, more importantly, I now have a team of humans that we work together that I can start testing my more radical ideas out with. And I would say about half of them are wildly successful and the other half, complete duds. Almost seems like one or the other. But now I have my own basically laboratory to test things. And of course, when I see radical things that other people are doing, I try them in, in our organization. And, uh, and it's phenomenal. I- I- I'll tell you the most radical one. I, I was with-
- 19:03 – 31:47
When and how to let an employee go
- LRLenny Rachitsky
Let's do it.
- MMMatt Mochary
... a, I was w- asking one CEO, I said, "Have you ever let someone go and regretted it?" And he said, "No." And I said, "Well, then you don't know what the bar is. Because the bar of where you should be letting people go is here, and the bar that you've let people go is here. So, until you get close to that line, you don't know what that line is." He said, "Wow, that's, that's true." And then I thought about it, and I thought to myself, "Uh-oh. I have never let anyone go that I regretted. So I don't know where the line is." So then I thought, "Oh, no, I've gotta go into my team and let someone go." And here's the problem, I've already, we've already done talent density. We've already done the Netflix thing. If someone is meeting expectation, we let them go. We've already let all those folks go. So on our team, it's only out-performers. And so I thought, and there was one guy who's, he's an out-performer, no question about it, and super positive, an amazing guy and can do anything and is happy to do everything. But there wasn't much left for him to do because everything else was being covered. And so I talked to my number two and said, "Can you do what you're doing and what he's doing?" And she said, "Give me two weeks." And she did, and she came back and said, "Yeah, I, I can." And so, we let him go. And now when I let someone go, I try to do it with a massive amount of compassion because I know it's, it's brutal. I mean, letting, losing your, your spouse, your home, and your job. These are the three most traumatic things that can happen to you. And when that happens, of course, you go into massive fear and the brain shuts down and, and so I want to be there and help them through that process and help them, actively help them find their dream job because there is a place that absolutely needs them. And so what I do is I become their, their agent, and I say, "I wanna help you discover what it is that your, your ideal role is, and I wanna help you create it or land it." And so, I did that with him. Turns out what he wanted to do was go start a company and create a new product. So, he could just start that day one. But the, the litmus for me is, is that everybody I've let go, I believe anyway, that I continue to be friends with. So, that shows me that the process by which I let people go is a humane one. And here's the crazy thing, after letting this guy go, after about 30 days, I was like, "Ugh, did I do the wrong thing? Was that too much?" But then after about two to three months, I realized, no, that was, actually was the right thing because my number two wasn't able to absorb the things that he was doing. And here's the crazy part, with fewer people in the organization, things work better. That's the big realization that most people never discover. They sort of, they hit product market fit, they get tons of money from investors and now it's just hire, hire, hire, hire, hire. But every additional human you have in your organization causes extra overhead and geometrically so. Because now that you have to keep all those people informed, give them all context, make them all feel heard because unless they feel like they're contributing and you understand what they're saying, then they feel ignored and they feel passed over and they feel disrespected and grumpy. And so there's this morale problem that exists. So, there's this friction of information flow and a morale problem that grows and grows and grows. And really, the only answer is, I mean, that's why people bring me in, because they're growing, growing, growing and things are breaking. So, I have a system that keeps things together. But it doesn't make it, like, perfect, it just makes it so that the company doesn't fall apart. But the, really the ideal is just to keep the team super small. And that's what WhatsApp did. That's what Instagram did. That's what Linear is doing right now. That's what Notion has been doing for a while. And those, to me, are the real success stories.
- LRLenny Rachitsky
This reminds me of a story I just listened to on Lex Fridman's podcast. They were interviewing the head of AI at Tesla, or former head of AI.
- MMMatt Mochary
Mm-hmm.
- LRLenny Rachitsky
And Lex was asking him, "Why did you get rid of LIDAR on your cars? Like, aren't more sensors good so that you can be better at self-driving?" And he's like, "If you gotta have LIDAR, you gotta think about the supply chain and getting all those parts. You gotta think about all the additional data that it brings and adds more chaos to your data. And it's, you have to think about that. You have to think about if that one part is gone, everything slows down." And in theory it is better, but then all these other factors end up making it worse, and talking about how Elon's philosophy is the best part is no part. And it feels like-
- MMMatt Mochary
That's right.
- LRLenny Rachitsky
... exactly what you're saying.
- MMMatt Mochary
That's right.
- LRLenny Rachitsky
You're getting to all the stuff I wanna talk about, which is awesome. So, so firing people.
- MMMatt Mochary
Uh-oh. (laughs)
- LRLenny Rachitsky
This is, uh, this is good. We were chatting earlier and you mentioned that this is a skill that most managers are really bad at, and maybe is the most important skill to develop as a leader and as a manager, and people are just bad at it. And you shared a few pieces of advice there, but is there anything else that you could share about just, like, how to get better at firing people and that skill?
- MMMatt Mochary
Yeah, the reason people are bad at this is because they think that they're hurting the person who they're letting go. I mean, how many times have I heard from someone, "Yeah, this person's not performing, but gosh, you know, they really need this job and their mother has cancer," and, and whatever personal situation they're in.And Wei Deng from, who is the CEO of Clipboard Health, who's one of my favorite CEOs, who frankly I learn more from her than she learns from me. She shared with me her framework for making decisions, which is she separates the decision from the implementation, meaning she thinks about, "Who is the stakeholder here that I'm solving for?" And almost always in a company, you're solving for the customer. So what would the customer want to see happen? That's the decision. And of course, the customer would want to see only the best employees, and anyone who isn't a great employee, don't be there. Now, the implementation is, if I do this, if I let this person go, who gets hurt? Well, the employee gets hurt. Maybe I get hurt 'cause it's a painful conversation. Maybe the rest of the team gets hurt because they're sad that their friend is leaving. So then you look at, well, what can we do? What does that for each person who gets hurt, what is it that they really want? And let's see if we can help them get what they really want. Well, the person let go, what do they want? They want a great job where they're actually needed and they feel fulfilled. So they enjoy what they're doing and they're actually critical to the company or organization that they're with. And right now they're not, by the way. They're not critical, clearly. So you're actually holding them back from what it is that they really want. So what you do is you help them find that place that really needs the skill or the passion that they have. Yourself, what do you really want? You want to not have a difficult conversation. Well, cognitive behavior therapy, the best way to get over that is to actually have one and realize it's not that bad. And then the rest of the team, they feel sad 'cause their teammate left. Well, here's how you solve... What they really want is they want to know that their- to... They wanna release their emotions. Okay, great. Listen to them. Let them share their emotions, let them share the sadness that they feel, and then it, it's released out of their body. So decision is one thing, implementation is completely and utterly separate, and that's the same thing here in letting someone go. But if you let them go kindly and humanely, if you act... The key is, in my opinion, you become their agent, like, uh, you know, like Mo- Michael Ovitz, a CAA agent. You help them find their next job actively. Michael Ovitz is the one who reaches out to employers for his clients and says, "Hey, do you have work for my client?" That's what I mean by being agent. Not by, "Hey, you know, if you need a reference from me, I'll give you, I'll happy to give you a reference." Bullshit. That's passive. I'm talking about active, and it doesn't take long, maybe one to two hours of my time reaching out to people I know saying, "Hey, I've got this great person." Oh my God. Of course, they're gonna pay attention. Of course, they're gonna react. Now you might say, "Well, wait a second. What if the, what if the person isn't great? What if they're a bad performer?" And my posit is that they're good at something. You have to find out what it is they're good at, and really what they're good at is what they're passionate about. So find out what they're passionate about and that you can recommend them for, and that's what I do. And I think for almost all managers that aren't good at letting go, it's because they, A, they've never done it, or B, they've done it badly and so they didn't help the person, and that person then went off and had a very painful time and now hates that manager. But if you actively help that person, they will appreciate it. Now, there are situations where the person says, "Screw you, I don't want your help." Okay. But they still recognize that you offered.
- LRLenny Rachitsky
Who's the best person at firing that comes to mind when you think of this person's really good at this?
- MMMatt Mochary
Wei Deng from Clipboard Health. She's the most compassionate. She's the most... Yeah.
- LRLenny Rachitsky
Awesome. The, uh, the framework you shared reminds me of something my manager once taught me similarly. It missed the final piece of actually being their agent and finding them their next gig, but just the idea of separate the e- the emotion and doing the thing from like if there were no feelings involved, what would you do? And then-
- MMMatt Mochary
That's right.
- LRLenny Rachitsky
... you should do that, e- even though it might be hard.
- MMMatt Mochary
That's exactly right. And by the way, this whole thing about no feelings, I do have probably two CEOs that don't feel emotions. They don't feel fear, they don't feel anger. One in particular feels zero emotions. And I have to say he's, he's a machine. He's an operating machine, and he just... There's zero time between, "Ah, this is the right thing to do," and doing it. And it's amazing. It's an incredibly well-run company and an incredibly valuable company. And so, yeah, emotions typically, again, typically fear and anger are the ones that derail our brains.
- LRLenny Rachitsky
Makes me think of Alex Honnold, I think is his name, the, uh, free-
- MMMatt Mochary
The climber.
- LRLenny Rachitsky
... solo dude. Yeah. Where they-
- MMMatt Mochary
Right, there's no more fear.
- LRLenny Rachitsky
Right. His like amygdala doesn't quite (laughs) function, so he doesn't...
- MMMatt Mochary
That's right.
- LRLenny Rachitsky
Yeah.
- MMMatt Mochary
That's right.
- LRLenny Rachitsky
So that's interesting. He could be a solo, free solo climber. He could be a CEO.
- MMMatt Mochary
(laughs) That's right. CEO is a little safer. The prediction for Alex that he will, at some point, unfortunately die.
- LRLenny Rachitsky
Yeah. Did you see that Alpine- Alpinist? Not to-
- MMMatt Mochary
Yes.
- 31:47 – 38:05
How to make people feel heard
- MMMatt Mochary
it.
- LRLenny Rachitsky
That's something else I wanted to chat about is the, is the feeling heard lesson that you have for people. And I'd love to just get your advice on just how to help people feel heard. It's like, oh, yeah, I know that's important. I want people to feel heard. I will listen-
- MMMatt Mochary
Yeah.
- LRLenny Rachitsky
... and it'll go great. But, uh, you have some very tactical advice on how to actually make people feel heard.
- MMMatt Mochary
Yeah, there's sort of a few different levels of it. One is to make people feel heard is, uh, uh, let's say, assume we were talking to them, 'cause there's another way, there's an even more surface way is verbal. Sometimes what I do is I ask if I'm in a group of people and there's a question or a problem that we're trying to solve, instead of going around the room and hearing people's verbal, uh, opinions, which takes forever, I ask everyone at the same time to take five minutes to write down their solution. And then we all drop it in Doc, and then I just read it. And when I read it, I say, "Thank you, Lenny." And that makes you know that I at least read it. So that's a little bit of feeling heard. Second, if I wanna make you feel more heard, I ask you to say it verbally, and then I repeat it back to you. Like, uh, "Lenny, I think what I heard you say is duh, duh, duh, duh, duh, duh, duh, duh, duh, duh. Is that right?" And you're like, "Yes." Or you're like, "No, not quite. A little bit different." And then if it's a little bit different, I repeat it again until you say, "Yes, that's it." Now you know that I understood you. And then there's a third way which is even deeper, which is, especially if you're giving me feedback, you likely don't wanna hurt my feelings. So what you're doing is you're giving me the feedback, but you're couching it, you're polishing it, you're rounding the edges, you're making it softer. It's not really what you're thinking, but it's what you're willing to say. And so if I wanna make you really feel heard, I reflect back what I imagine are the thoughts in your head. So if I think you're feeling anger, I sort of think to myself, "Well, what would anger feel like?" And I cause myself to feel that anger. Then what are the thoughts that appear to me? And I say something to you like, "Lenny, I think what I'm hearing you say is you're pissed off and you're thinking, 'Screw you, Matt. How dare you, you know, walk into the office and not even say hello to me.'" Is that close? And you're like, "You know, Matt..." People either say one of two things. They say, "Yeah, that is it." Or they say, "No, that's stronger than what I was thinking, but directionally, that's right." And what that really means is, "Yeah, that's what I was thinking." So almost always their thoughts are bigger than their words. But they really feel heard when I share their thoughts. Now, that's not the end of the process. I mean, you actually have to then do something. Once you made them feel heard, you have to say, "Okay, well, either I accept or don't accept this feedback. And if I accept, here's what I'm gonna do about it. And if I don't accept, I need to explain to you why. Here's what's going on. You shared with me what's going on in your world. Now let me share with you what's going on in my world and hopefully you can see why this thing that's going on in my world doesn't allow me to accept what it is that you shared. And hopefully now that you see what's going on in my world, your feedback changes." And that's it. That's the whole process.
- LRLenny Rachitsky
I'm listening to this advice and I'm like, "Yes, I will do this next time I'm talking to someone." I imagine people don't and they forget, and it takes time to actually learn these things, like the firing advice you just shared. Like, how do you actually get good at this and practice these things? Is it like I have to work with a coach who will continue to reinforce these things? Is it follow these steps next time? Like, have them written down? Like, what advice do you have for folks that are like, "I want to get better at this. I want to start doing this stuff"?
- MMMatt Mochary
Well, these docs are all, you know, free to the public in the curriculum. You can post them here or you can post them on Twitter. You can post the whole curriculum on Twitter, frankly. Other people have. And so it has a step-by-step ... There's a doc in there that has a step-by-step script. And so all you do is you read it and you, and you follow the script in letting someone go or in making someone feel heard. My posit is once you do it one time, you'll be like, "Oh, my God. That worked so well." That's the only motivation you need. And you've got the script, so you can just keep doing it. I don't think you need a coach. In fact, I remember one time I asked an investor who their, their best up-and-coming CEO was. The investor gave me a name. I was like, "Great. Can I please get introduced to him? I, I want to coach him." So I reached out, the guy responded immediately. He's like, "Matt, I read your book. I love your book. I read it three years ago. I've been implementing all the elements in our company. It's fantastic." And when someone says that, like they know my work, they've already implemented it and it, and it's worked, 10 out of 10 times that person wants me to coach them.
- LRLenny Rachitsky
Hm.
- MMMatt Mochary
And then I said, "Great. That's fantastic. I'd love to coach you." And the guy said to me, "Um, no, thanks." I was shocked. I was like, "Why?"He said, "Well because... It's all working. Like I don't-
- LRLenny Rachitsky
(laughs)
- MMMatt Mochary
"... I don't have any problems. I, I don't think I need to be coached by you." And that, there... I couldn't have heard a better answer. That, to me, is the ultimate answer. And he's right. He doesn't need me, he doesn't need anyone.
- LRLenny Rachitsky
I was gonna ask if that's the goal of all of this writing down and systemizing, is just to make yourself unnecessary?
- MMMatt Mochary
Totally.
- LRLenny Rachitsky
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- 38:05 – 39:41
How Matt’s coaching has evolved to include psychological obstacles to success
- LRLenny Rachitsky
That actually reminds me of another question a, a reader asked on Twitter, who happened to be the one and only Ryan Hoover, and he asked just, "How has your approach changed in your coaching since you started?"
- MMMatt Mochary
So Ryan was at... Obviously started at Product Hunt, and then he, um, he sold the company to AngelList, so he was part of the AngelList when I went there 'cause I was coaching Naval, and Naval's... What we realized coaching Naval is that Naval did not wanna be CEO, and he just didn't know how to get out. And so I said, "There's, there's a way and I can show you." And so I did, and, uh, it made Naval's life, you know, ten times better. It frankly made AngelList ten times better, because Naval wasn't enjoying being CEO, therefore he wasn't good at it. And we ended up putting someone in who did a fine job, and then put someone else in who's doing a insanely good job. And now, of course, AngelList is massively valuable. And Ryan was there at the time, Ryan Hoover, great guy. I love Ryan. And, uh, so what has changed since then? I think what's changed is... I don't think back then I had any of this fear and anger to give bad advice. I think back then, it was all very tactical. It was all very high output management type stuff, which is, you need to have goals, and at the company level, at the department level, at the individual level, you then need to track those goals, you need to track all the agreements that people make, all the actions they say they'll do. You have to put it all in Asana. Everyone has to be able to see each other's Asana boards so they can see what each other is doing. And I still do that, but now I've added on this piece of, "Oh, you're in the moment and you're feeling fear? Okay, you still gotta go forward." That's sort of the big
- 39:41 – 41:25
What is “top goal,” and how can it help you make massive gains?
- MMMatt Mochary
change.
- LRLenny Rachitsky
I notice that's at the top of the curriculum. Do you find that that's where a lot of the biggest transformations happen, that curriculum component?
- MMMatt Mochary
Absolutely. Absolutely. That, that's... I mean, I, I cause people, when they first start coaching with me, they have to read that first. They have to... Uh, there are sort of three seminal documents: On Time, Top Goal, and Fear and Anger Give Bad Advice. On Time just says, "Hey, we're gonna start our meetings on time, and you're gonna show up. And if you don't show up on, on time, you're gonna let me know first." That's just 'cause I don't want to... And by the way, I showed up two minutes late to, for us. That's 'cause I was on Goo- the Google Hangout for ten minutes. I didn't realize. I thought you were late. (laughs)
- LRLenny Rachitsky
Oh. (laughs) That's, uh...
- MMMatt Mochary
(laughs)
- LRLenny Rachitsky
I'm trying to fix that bug. Every time we send an invite, there's a Google Meet button there.
- MMMatt Mochary
(laughs) Yeah, right.
- LRLenny Rachitsky
I think I cracked it finally. Yeah, that would've been a funny podcast where I'm just sitting here starting on time, and for two minutes, "Hello."
- MMMatt Mochary
(laughs)
- LRLenny Rachitsky
We're just waiting.
- MMMatt Mochary
Exactly. (laughs) Exactly. Second one is Top Goal, which, um, is this concept from Mc, McKeown who wrote Essentialism, which is you have this... Everyone is making requests of you, but if all you do is spend all day as responding to other people's requests, you never actually march towards your own priorities. So you need to, A, create priorities, and then set aside some amount of time each day, 30 minutes, an hour, or two hours, that you just work on your own priority. And if you do that, you'll make massive gains. And that's true. I mean, I've just... So like in five minutes, I can change someone's life just by having them follow that practice. And then the third one is, fear and anger give bad advice, and that's what I have people read and say, "Does this resonate with you? If it does, we can work together. And if it doesn't, we shouldn't work together." So yeah, that's kinda like the crux document of whether or not people philosophically are gonna resonate with what I have to share.
- 41:25 – 43:44
Why Matt has an accountability partner for his top goal time
- MMMatt Mochary
- LRLenny Rachitsky
The, uh, Top Goal piece, I'm reading a book called Make Time right now...
- MMMatt Mochary
Mm-hmm.
- LRLenny Rachitsky
... and that's a big part of it. I actually just added Top Goal to my calendar every day. It's not working yet.
- MMMatt Mochary
Good.
- LRLenny Rachitsky
I have not actually... Every time I get to it, I'm like, "No, I'm gonna just check Twitter right now." But, um...
- MMMatt Mochary
(laughs) That is the hardest part.
- LRLenny Rachitsky
I'm, I'm working on it.
- MMMatt Mochary
Exactly. Now, what I've done is, I'm similar, so during my Top Goal time, I have somebody sit with me, and they-
- LRLenny Rachitsky
Wow.
- MMMatt Mochary
... prevent me from doing anything but my Top Goal.
- LRLenny Rachitsky
Wait, can you talk a bit more about that? Is this an, like a coworker?
- MMMatt Mochary
Yeah.
- LRLenny Rachitsky
Are you just like, "I need you here for this hour every day"?
- MMMatt Mochary
Yeah. I mean, it's like the same idea as a, as, as a trainer in a gym. A trainer in a gym, maybe they're teaching you a little bit, but more often than not, they're just forcing you to do the thing that you know you need to do. But if they weren't there, you would kinda go, "Eh," and not do it. That's all this is. It's what I call an accountability partner. There's even an app now where you can go online and you can sign up, and I think it costs like five dollars a month. And you can sign up to have... You know, meet someone else, and you become accountability partners to each other-... it's insanely effective. And I'm not the only one that has a problem focusing on tasks that I don't love, that are necessary, but I don't love. Like a meeting? I could take a meeting, I could take 20 meetings on- I could take, you know, 10 hours of meetings, no problem, especially when I'm the presenter, when I'm the... that I'm the active one. But doing asynchronous tasks for me, 'cause I'm so people-oriented that when there isn't another human with me, it's painful. So I just have another human with me.
- LRLenny Rachitsky
I love that. And that person is doing other work, I imagine. They're not just watching you full time.
- MMMatt Mochary
Yeah, they can do whatever they want. Yeah.
- LRLenny Rachitsky
Is, is this what you recommend to leaders and CEOs? Just, like, have someone there for an hour? Wow.
- MMMatt Mochary
If that's, if your personality's like mine, yes, have someone there. And it can be remote, it can be in-person, it can be... It doesn't matter. In-person's a little bit more effective.
- LRLenny Rachitsky
Right. There's like a little Zoom into that camera.
- MMMatt Mochary
Sometimes I have my kids do it.
- LRLenny Rachitsky
(laughs)
- MMMatt Mochary
And they love it.
- LRLenny Rachitsky
(laughs) I love that. There's an app I use called Centered, that app that I'm an investor in, but I... just 'cause I use it all the time and they have this buddy feature actually, where you can be paired with a buddy in real time.
- MMMatt Mochary
Yes. Yes.
- LRLenny Rachitsky
To, um, close a loop on the firing
- 43:44 – 53:21
How to approach mass layoffs humanely
- LRLenny Rachitsky
piece, something I was thinking about while you were talking is l- there's a lot of layoffs happening right now.
- MMMatt Mochary
Mm-hmm.
- LRLenny Rachitsky
When you're letting go of, like, a thousand people, you can't really be their agent unless-
- MMMatt Mochary
Mm-hmm.
- LRLenny Rachitsky
... you've seen that happen. Do you have any advice for just, like, if there's a large layoff, how you could do this?
- MMMatt Mochary
Absolutely, you can be their agent. Not you personally, but they each have a manager and the manager usually has 12 reports and they're rarely letting go more than 50% at a time. So that means six people that they've gotta be the agent of, maximum. Yes, each manager can be the agent for six people. And my companies have done a lot of layoffs. A- and, and here's why, the companies that I coach. Back in March of 2020, there was a chance that the world economy was imploding. Now, of course, by April and May, we realized that wasn't the case, that the tech world kept going. In fact, it was even flourishing. But in, in March of 2020, we didn't know that. And so you needed, if you were being fiscally responsible, you needed to prepare for that eventuality. Y- So you need to pare costs. 80% of costs in any tech company is payroll, is humans. So if you're gonna p- keep your costs, you actually have to let go of humans. And so almost every one of my companies did, some on the low side of 5%, some on the high side. One company that was, is a hotel company, um, let go 40% because it looks like their business was about to get obliterated. And the results were crazy. Within 60 days of each layoff, the CEO reported back to me, "It's insane. I don't know how this happened, but the company's now operating better." I'm not talking on a relative scale. I'm talking on an absolute scale. "We're putting out more features, more code. Our NPS is up. Our..." Whatever it is, w- whatever department is performing better. And the only answer for it was, "We've got less people." So it's this coordination issue is reduced. So then now, in, like, May, June of this year, we had this huge reset of valuations where growth tech stocks, you know, dropped by 50 to 90% in value. And all of a sudden, there's... which we're still in, and we don't know how long this can last. It's all based on interest rates. So it's likely that growth stocks will be at these valuations for... until interest rates come back down again, which could be two to three years. And so these companies now, they can go raise money, but it's gonna be at a big down round, and down rounds are very painful. And so now these companies have to make sure that they don't need to raise money in the next three years. They've gotta conserve cash once again. Here we are, we're in the land of layoffs again, but this time it's different. This time, these CEOs know that the company actually gets better. And the CEOs that have never done this before, I simply connect them with the CEOs who have done this before, and then they get convinced like, "Oh man, my company will be better." And now this time people have been even more aggressive. We've had companies that have laid off 50% of the company, and the results have been frankly phenomenal. But the key to doing it well is there has to be a humane delivery. And the biggest marker that I've seen between a botched layoff and a successful layoff is at the moment someone hears that they no longer have a job, did they hear it from their manager in a one-on-one? If that's when they heard it, it'll be okay. But if they heard it in an email, in a group chat, in a... any kind of thing that where they were sitting next to... or they were hearing it along with other people, it wasn't personalized, it wasn't one-on-one, that is terrible. And that's when people get really angry, and that's when they start going onto Twitter and going to newspapers and et cetera, because it feels dehumanizing. It feels like, "Uh, you didn't give a shit about me. You didn't, you didn't even have the courtesy to tell me to my face." And of course, there's no way to allow that person to express their emotions because they're in a group. So that's the most important thing. The second thing is then later... So tactically, this is how it happens, you- you have, uh, an inner circle. I think that inner circle should include all the managers in the company.... and you say, "This is how much we need to let go. Here's how much each of you needs to let go." So first of all, you don't say to each department head or team leader, manager, "Tell me who you can let go." Because they'll all say nobody. So you actually have to give them numbers. You have to let this dollar amount go, or this many people go. Dollar amount is better because if you say people, then they'll just let go of the most expensive people. And I mean, the, the, the cheapest people. And so, the, the most junior. And often the most junior are the ones that are actually doing the most work. So you want it to be dollars, because that's actually really what you're trying to save, you're trying to save dollars. And so you say, "You have to save this many dollars. Come up with a number." They quickly come back with a number. You don't want to have department heads choose for managers because if you have a team lead and all of a sudden they're told to let go these three people, the team lead will go, "That was crazy, those are my three best people." So you want to let each manager choose. And that doesn't need to take long. That can take 48 hours. Then you move to implementation. At implementation, you spend the morning and have each manager reach out to people and just Slack them to say, "Hey, can I talk to you for 15 minutes?" And then they have these meetings back to back to back or as close as they can, and they say, they deliver the news, the difficult conversation that we talked about before. "It's going to be a difficult conversation. I'm letting you go. I imagine this feels crappy and/or feels like worse than that, in fact this is horrible. Are you willing to share with me your feelings? And I want to be your agent. Now, I don't have time to do it now, but I'd like to schedule with you another hour tomorrow, the next day, whenever, so that we can go and dig in and I can help be your agent." Then that takes the morning. By the afternoon, you've scheduled an all hands for the stay team. With the stay team, you m- tell them what just occurred and you answer their questions. And the questions are almost always around fear. Like, "Holy shit, is this going to happen to me? Did these people even get feedback that they weren't performing? Does this mean that we're dying as a company and that we're going to implode?" So you have to address each one of these questions. And hopefully the answer is, "No," to the first one, "Is this going to happen to me? No, this isn't. We cut deep so that we only cut once. The people to your left and right and you, you are the stay team. This is the team that we're going to be building the company with going forward." It's important to be able to say that. So you actually want to cut deep because cutting two times or three times creates PTSD in an organization. It's trauma one, trauma two, trauma three. Now you're like, "Ah." It's just going to keep happening. And then the third piece is, and this not everybody does, if you don't do this, your company within 60 days will be performing better. If you do this, your company within two weeks will be performing better. Because people now, the stay team, they feel sadness, they feel anger, they feel fear. Yes, you addressed their questions in the all hands but not fully, 'cause some people didn't even talk in the all hands. So what you do is with each and every person on the stay team, you have a one-on-one with their manager for one hour and all the manager does is say, "I'd like to know your thoughts and feelings." And the person shares. And then all the manager does is make them feel heard. "I think what you're telling me is you feel sad because your, your, your three buddies are now no longer here, and you feel anger because you think this is bullshit and you think that why did we hire this many people if we're going to fire them and that was just irresponsible, and you feel fear because you're not sure if the company's going to implode or if your job is safe. Is that right?" And they're like, "Yes." It doesn't take away the emotion entirely, but it knocks it down by a good 25%, which is enough that the person won't do something rash, they won't quit, they won't stop working, they won't say bad shit to other people, and it allows them, it accelerates their recovery. And within two weeks, they're now seeing how the company's operating better and morale then comes up and the company is now performing better than it was before. So three elements.
- LRLenny Rachitsky
That was, uh, that was thousands of dollars of advice I think in just, uh-
- MMMatt Mochary
(laughs)
- LRLenny Rachitsky
... five to 10 minutes. I-
- MMMatt Mochary
And that's after having probably gone through this with CEOs maybe 40 times and iterating, you know, AB testing and what's the difference and what works well and what didn't work well.
- LRLenny Rachitsky
Yeah.
- MMMatt Mochary
I can't imagine there's someone out there who has advised more people through a layoff process, certainly in the tech world, than I have. I'm not saying I'm proud of that but, it's, it just is.
- LRLenny Rachitsky
What a, what a fun place to be.
- MMMatt Mochary
Right. (laughs)
- LRLenny Rachitsky
Um,
- 53:21 – 54:10
Matt’s thoughts on the Twitter layoffs
- LRLenny Rachitsky
as you were talking, I was thinking a little bit about Twitter and Elon and the experience that's going through right now, and it feels like on the one hand he's letting go of a lot of people, which matches kind of your advice. On the other hand, not being handled too well. I think it's emails and just a lot of random quick things. What's your perspective on, on this whole thing?
- MMMatt Mochary
I haven't been following it directly so I don't know how he's implementing the layoffs or how much he's doing. Frankly, I just haven't been following it at all, but here's the sad reality. Even if it's handled incredibly poorly, the company ends up performing better. It just takes a little longer for people to recover, who, the stay team to recover emotionally. But the worst case scenario, it's handled terribly, within two months the company will be performing better.
- LRLenny Rachitsky
Fascinating.
- 54:10 – 1:01:53
How to innovate within a large company
- LRLenny Rachitsky
That's actually a good segue to this last topic I wanted to touch on, which something that I think you have a lot of thoughts on is building new products within a larger company and innovating inside of a larger kind of scaled company, and especially the challenges around that. And so what are your, what are your thoughts on just how to do this well, how to innovate within a larger company?
- MMMatt Mochary
I could tell you the short version or I can tell you the long version.
- LRLenny Rachitsky
Let's do it.
- MMMatt Mochary
The long version is, is that this was a real problem for everyone I was coaching, and I didn't know the answer. And someone then shared with me, and, but it was obvious that YC startups were crushing and, and just iterating so much faster. And then I had the thought, "Well, why not just create your own YC startup and have it crush you, but you own it?" And of course, it has to really look like a YC startup. It has to have a founder mentality person as the head of the team, someone who's willing to just break glass and just, you know, won't stop until they run through the brick wall. And it's actually pretty easy to find founder mentality folks. You just literally go to the YC alumni list, and the ones whose startups failed, perfect, they're available and they are founder types, and now they want to join a company that's actually succeeding because they realize how hard it is to create something on their own, but they still have the mentality. And then you want to keep the team really small because then they can... Again, there's no, there's no buy-in required. Like, everyone's on the same page with the same information. And so we started testing that, and it worked. And then I thought, "Well, wait a second. The reason that a big company is... has a hard time innovating is because once a product is scaled, it's now got millions of users." So you have two things that you need to make sure stay true every day. The site is up and running, and there's no security breach. So every time you add code, you've gotta test it thoroughly to make sure it doesn't take down either one of those. So that's... The, the, the review process is insane. So now you wanna make any... You're innovating, you're writing prototype, you know, type code and new features. You can't get it approved. It's like the... It takes so long. And so that's what you're trying to decouple, and you're trying to create an entity that isn't touching the core code, but you also don't want it to have to go through the approval process of the product team or the head of product. Like, that's takes way too long as well. So that's why it has to be a small team that reports to outside of EPD. It can't report to the head of engineering, head of product, or head of design, can't. It's gotta go outside, usually directly to the CEO. That's the only other place to report that's outside. And then I had this idea, "Well, wait a second. There's also brand question." And so why don't you... I had to create an entirely new name for this product that isn't the core of the base business. Why don't you actually just create its own C-corp? Why don't you make it so clear that this is its own entity? So I wrote this whole thing up and, and you create its own C-corp. And I've shared this with a few people, and, and one CEO said to me, "Matt, this sounds radical, and it sounds like it could work, but is anyone actually doing this?" And I thought to myself, "Oh, shit. No. Nobody's actually doing this." Nobody that I know has created new C-corps for the entities, the new products they're developing. And then 30 days later, I got in a call with Wee Deng. I told you before, I'm a huge fan. And we talked about product and I shared with her this write-up, and she's like, "Oh, yeah, that's what I do." She said, "I created five C-corps in the last two months." I was like, "What? Someone's actually doing it." I was like, "Well, what are the results?" She's like, "They're fantastic." She goes, "The team doesn't worry about trying shit because they know that it doesn't hurt our core brand, and so they're iterating fast." And she said, "Not only do I do that, I actually have two teams, independent, working on each new product. One, I have is more engineering-focused. They build custom code. The other is more sort of customer relationship-focused, and they don't even have... Maybe they don't even have engineers, and they build, like, a manual solution or they use off-the-shelf products to build a solution, and I just see which one makes more progress faster." And wow, insane. So that's why, again, I have so much respect for Wee.
- LRLenny Rachitsky
Yeah. When I think about these ideas, I think of, like, the NPE team at Facebook and, uh, I think it's called Area 21 at Google, which works on new ideas. And it-
- MMMatt Mochary
Yes.
- LRLenny Rachitsky
Like, I don't know if anything amazing has come out of those groups. Maybe. I don't know. But it feels like the missing piece, and you didn't mention this piece, is feeling like there's a huge upside if you get something. Like, like founders-
- MMMatt Mochary
Hmm.
- LRLenny Rachitsky
... having equity of their company feels like such a motivator. "Like, I could become a billionaire if this works out, versus I'm helping-"
- MMMatt Mochary
Yeah.
- LRLenny Rachitsky
"... my startup in some, some small incremental way." Is that an important piece or do you think it's not critical?
- MMMatt Mochary
I'm gonna be radical here. I don't think it matters at all.
- LRLenny Rachitsky
Hmm.
- MMMatt Mochary
I think that what really motivates people is building shit that gets used in the world. I think people will say and they'll fight for equity and money, but in the end, that's not what actually motivates them. Because I've seen this work in companies where they don't have big equity, but they have autonomy, they have ownership. Not equity ownership, ownership over decision-making, ownership over creation. That's what I think people want. Amazon does this. They're not giving their people... Amazon's famous for being cheap bastards.
- LRLenny Rachitsky
(laughs)
- MMMatt Mochary
But someone has a great idea, they're like, "Okay, here's five million bucks. Go do..." And Amazon is definitely innovating successfully.
- LRLenny Rachitsky
What about the flip side of that, of not necessarily the huge upside, but the, "I'm staking everything on this startup. Like, I need this to work. This is my thing. My name's on the line." I feel like that's a big motivator also for founders. Like, "I'm not gonna give up this, like, feeling of grit."
- MMMatt Mochary
Yeah.
- LRLenny Rachitsky
Is that important to you?
- MMMatt Mochary
It's also fear.
- LRLenny Rachitsky
Hmm.
- MMMatt Mochary
It's fear, which is like, "If this doesn't work, I'm screwed."
- LRLenny Rachitsky
Yeah.
- MMMatt Mochary
And fear, frankly, is an excellent motivator.
- LRLenny Rachitsky
(laughs)
- MMMatt Mochary
It gets people to move fast and move hard. The only problem with fear is it's also corrosive.So it eats out my, my insides as I go along. It makes it that I don't enjoy life. But it's highly motivating. Now, I think joy is actually even more motivating. Or let's say it's as motivating, but it's non-corrosive. So I can last much longer if I'm doing something for joy. Fear is short-term extreme motivation. It's adrenaline. Joy is long-term consistent motivation that also allows me to s- look back on my life and go, "Wow, that was a great life." So yes, that, that is effective motivation, but I don't recommend-
- LRLenny Rachitsky
(laughs)
- MMMatt Mochary
... you putting oneself in that position to get motivated.
- LRLenny Rachitsky
Yeah. For companies that wanna try this method that you're describing, is there a curriculum document for this approach out there?
- MMMatt Mochary
There is.
- 1:01:53 – 1:11:07
How to do an energy audit
- LRLenny Rachitsky
Something that I noted, just in case we had a little more time is around energy audit.
- MMMatt Mochary
Yes.
- LRLenny Rachitsky
And this is something that you advise folks to understand what gives them energy, what saps their energy. Can you talk a bit about that?
- MMMatt Mochary
Sure. So it turns out that what we're really good at is what we love. And what we love is often space and time disappear when we do it. And therefore, we actually probably don't even value it because it comes so easily to us that we don't ascribe value. Whereas things that we don't love but we're good at, we often ascribe value there. And other people want us to do those things because they're often creating value for the whole team or the family or the group. So there are four zones I posit, and, and I learned this from Diana Chapman at Conscious- Conscious Leadership Group. So this is, this, and I don't know where she learned it from, but I, I, almost everything that I have, I, I poached from somebody. But at least I, I tell you where I poached it from. And so the concept is there, you have four zones. Zone one is your, is incompetence, like you're not good at it. Someone's better at it than you. That's like, you know, fixing a car. You should let someone else do that. Second is your zone of competence. You're fine, you can do it fine, but so can somebody else do it fine. Like cleaning their, their house. Yes, you could do it, but it would take a lot of time and you're not creating that much value. You should let someone else do that. Third zone, your zone of excellence. This is something that you're uniquely good at, but you don't love it. This is the danger zone. This is likely what you're getting paid for, and you're likely getting paid a lot of money for it. Other people want you to do it. You are creating value. But it's also sucking the life force out of you, and it doesn't allow you to become amazing and create massive value. And then there's your zone of genius. This is the thing you do that's uniquely good in the world, and you don't even notice that you're doing it 'cause you love it so much. So the key is to go and look at your day. How do you move into the zone of genius? (laughs) It's not that you figure out what it is and do more of that, it's that you figure out what it isn't and eliminate that. And then naturally, you'll be drawn toward what it is that you love. And so what I do as the energy audit is you go through a calendar, two weeks of a calendar, representative of two weeks. And you first, you look at all your meetings you have, but then you fill in, there's time in between meetings, like what were you actually doing? Take a, your best guess, rate it in. And then hour by hour take a green marker and a red marker, and each hour from Monday, you know, 8:00 AM to 6:00 PM and the same thing each day for two weeks. Each hour, ask yourself during that, at the end of that hour, did I have more energy or less energy? And if it's more energy you mark it green. If it's neutral or negative you mark it red. Then once you've done that for two weeks, you look at all the reds and say what's with the themes here? Oh, one-on-ones with people who are no longer my direct reports. Team meetings where nothing was prepared in advance and everything was verbal. Recruiting meetings, interviews with people that we didn't end up hiring, informational interviews from, you know, people that wanted to meet me and just know me but provide no value to me. These are all things that are energy draining. Great. Now what you do is you go to each one of them and say, "One, do I need to do this at all? Does it need to be done?" The answer is no, just cancel it. Two, it needs to be done but someone else can do it. Great. Delegate it to them. Three, and this is the most common, it needs to be done and only I can do it. Great. Then the, then the question is what would make it exquisite? Well, like it's, it's, it's the exec team meeting, I'm the CEO, I have to be in it. Well, what would make it exquisite? Well, you know what would be exquisite? It would be exquisite if everyone pre-prepared their update which said, you know, how they're doing against their priorities, red, yellow, green, what they did last week, what they're gonna do this week. And then they wrote, pre-wrote any problems they saw in the company and any proposed solution they had for those problems. If everyone did that, then we could spend the first 15 minutes of the meeting just reading, processing the decisions, and we could take a three-hour meeting down to a 45-minute meeting. Great. Go write that up, share it with the group and say, "Hey, gang. This is what would make this meeting exquisite for me. What do you guys think?" And nine out of ten times people look at it and go, "Yeah. That would be amazing." Because they're feeling the same way. And then you go with the new methodology and it turns out to be great. That's how you take your, what you do each day from a lot of energy draining things into-... open space or energy-raising things, which will then allow you to start doing more and more of the things that you love. And you keep doing this energy audit repeatedly, one, two, three times, until your calendar is 80% green. And once that happens, magic will occur. All of a sudden, your life will become phenomenal and you will start to create massive value. I did it. It's what happened to me.
- LRLenny Rachitsky
I did that too, actually, a simpler version, where I just paid attention to what gave me energy and what didn't give me energy when I was on this journey post-Airbnb. And I thought I was ... S- wanted to start a company, I thought I wanted to do some advising and consulting, and I realized none of that gives me energy.
- MMMatt Mochary
Uh.
- LRLenny Rachitsky
But, like, writing interesting things that people like, that was fun. So I just kind of doubled down on that path and had no idea it was gonna make any money, and it ended up d- making money. And that's what I do now. So yeah, two thumbs up for this method.
- MMMatt Mochary
(laughs)
- LRLenny Rachitsky
And it's a more sophisticated version, which I like.
- MMMatt Mochary
Right on. It's also trusting that-
- LRLenny Rachitsky
Mm-hmm.
- MMMatt Mochary
... there will be ... If, if you need to monetize-
- LRLenny Rachitsky
Mm-hmm.
- MMMatt Mochary
... eventually, you will be able to monetize. But you gotta start with doing the thing you love first.
- LRLenny Rachitsky
Right. Yeah, yeah. I feel like there's a lot of people on Twitter and newsletters that are just doing it 'cause they think this is something they will enjoy and, like, other people are doing it. But I find that with this content life, like, you get just, you, you get on this treadmill where you have to continue producing things and if you don't actually enjoy it and it's not interesting to you, you end up just doing, like, building this job for yourself that is no fun at all. So-
- MMMatt Mochary
That's right.
- LRLenny Rachitsky
... extra important if you're kinda going down this path.
- MMMatt Mochary
That's right.
- LRLenny Rachitsky
One quick question I had along these lines is, you're, you're talking about how you focus on yourself and your energy and what works for you and what not. And I was like, do these collide with other people on your team? Because they maybe get energy from something you don't. But your point is that oftentimes everyone's like, "Yes, this is good for, me too. We should do this 'cause it's gonna help everybody feel better."
- MMMatt Mochary
That's exactly right. Yeah. I remember one time we did this energy audit process, I did it with Enrique and Pedro from Brax, and it was revolutionary for them and it caused them to change how the two of them operated together. They realized one really enjoyed the internal meetings and the other really enjoyed the external meetings. So they're like, "Well, great. Let's just do that." And it changed the trajectory of the company, so much so that they said, "Matt, would you please come in and do this energy audit with all of our managers?" And we did. We did a big group thing and what they found was it also changed ... That process too changed the trajectory of the company because for everything that you don't enjoy but needs to get done, there's someone out there that loves to do it. You just gotta find out who it is. And that's what happened.
- LRLenny Rachitsky
I was just talking to my mom, who's a CPA, and I'm like, "Uh, do you enjoy this job you're doing?" She's like, "I love it. I love doing taxes. It's so interesting." I'm like, "That is ... I'm so happy somebody out there enjoys this. I would pay anything for someone to take this off my plate. You can charge me."
- MMMatt Mochary
That's exactly right.
- LRLenny Rachitsky
'Cause my mom does my taxes.
- MMMatt Mochary
I know.
- LRLenny Rachitsky
Matt, any, any final, uh, thoughts you wanna share before we wrap up?
- MMMatt Mochary
This was fun. Thanks, Lenny. I appreciate this.
- LRLenny Rachitsky
Super fun. I feel like a sign of a great conversation is it feels like we've been talking for maybe five minutes, but also a lifetime. Maybe we'll do this again. There's like a million other questions I'd love to get into. But until then, where can folks find you online if they wanna reach out and learn more? And how can listeners be useful to you?
- MMMatt Mochary
Where can people find me? I don't know. Um ...
- LRLenny Rachitsky
(laughs)
- MMMatt Mochary
Don't find me. (laughs)
Episode duration: 1:11:07
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