How Netflix Builds High-Performing Teams: Culture Lessons from Jose Moreno

[00:00:00] [SPEAKER_00]: Welcome to the Convergence Podcast. I'm your host, Ashok Sivanand.

[00:00:05] [SPEAKER_01]: We had a little line inside of that culture deck, the original one, that said that if you wanted to sail the sea and needed to build a boat, go out, find other people that are super passionate about sailing the sea, get them to yearn for the sea, and then have everybody work together to figure out how to build that boat.

[00:00:25] [SPEAKER_00]: On this show, we'll deconstruct the best practices, principles, and the underlying philosophies behind the most engaged product teams who ship the most successful products.

[00:00:42] [SPEAKER_00]: This is what teams are made of.

[00:00:45] [SPEAKER_00]: Today we're joined by Jose Moreno, the founder and CEO of Newlight.

[00:00:49] [SPEAKER_00]: Before founding Newlight, Jose was in Microsoft as well as was the lead engineer on Netflix's account sharing team.

[00:00:58] [SPEAKER_00]: As Jose jokes about, you might have been just as annoyed as myself when we could no longer share our parents' Netflix password for free.

[00:01:08] [SPEAKER_00]: But nevertheless, it is something that was famously a very risky decision for Netflix to implement at the time, right when they were facing really stiff competition from other streaming services.

[00:01:21] [SPEAKER_00]: As you can imagine, the technology needed to be both robust as well as nimble in order to maintain consumer trust while also giving their business leaders the right levels of control as they threaded the needle to roll this out globally.

[00:01:36] [SPEAKER_00]: We now know that it was a successful effort at Netflix, and we've heard that both Disney and Warner Brothers are going to roll something similar out to their streaming platforms sometime this year.

[00:01:49] [SPEAKER_00]: During the episode, Jose shares with us his decision to leave Microsoft and join Netflix.

[00:01:54] [SPEAKER_00]: He was at Microsoft during both the Steve Ballmer era as well as the Satya Nadella era, and he shares what he calls an unpopular opinion when comparing their leadership styles and the associated culture at Microsoft.

[00:02:08] [SPEAKER_00]: He also shares a story about how powerful the Netflix culture deck was in helping him make his decision to join Netflix, despite their Glassdoor rating being average to poor.

[00:02:19] [SPEAKER_00]: I think it's a really interesting reflection on the nuances of ratings versus reviews and other forms of doing our research and how important it is for us to scratch well beyond the surface of a company's Glassdoor homepage while you're deciding whether an organization is going to be a good fit for you or not.

[00:02:37] [SPEAKER_00]: Now, speaking of Netflix culture, I'm glad that Jose and I get to dig deeper on the culture deck.

[00:02:44] [SPEAKER_00]: We get to talk about the famous Keeper test, as well as other aspects of their culture and talent operations.

[00:02:51] [SPEAKER_00]: Now, by the way, if you're looking to get started on creating a similar publicly shared reflection of your culture, of your team or your company, stick around till the end of the episode where I share a repeatable and methodical framework that we use at Integral to take a really objective, data-driven, and most importantly,

[00:03:07] [SPEAKER_00]: employee-centric approach to defining, articulating, and managing to our core values.

[00:03:13] [SPEAKER_00]: It helped us a lot, not just in hiring, but also really creating a predictable and secure environment for our talent and gave us a framework that made it really easy and actionable.

[00:03:26] [SPEAKER_00]: Subscribe to the podcast to get future episodes as soon as they're published.

[00:03:30] [SPEAKER_00]: If you find this helpful, give the podcast a five-star rating on your podcast app or hit that like button on YouTube.

[00:03:37] [SPEAKER_00]: Without further ado, here is Jose and I.

[00:03:47] [SPEAKER_00]: Welcome, Jose.

[00:03:48] [SPEAKER_00]: Tell us how you got to your role right now.

[00:03:51] [SPEAKER_01]: At the end of my tenure at Netflix, I was ending a pretty big project, which is the account sharing project, and that ended up being extremely successful.

[00:03:59] [SPEAKER_01]: At the end of any big project, especially a multi-year one like that, you tend to take a step back and think about what's next in life, right?

[00:04:08] [SPEAKER_01]: And so I saw that ChatGPT came out in 2022.

[00:04:10] [SPEAKER_01]: I immediately knew that it was going to be a new innovative technology that was going to have a lot of impact in a lot of different industries.

[00:04:19] [SPEAKER_01]: But since I was so busy, I didn't really have much time to think about it until the end of last year.

[00:04:25] [SPEAKER_01]: And so after that project, I started wondering, like, do I want to stay at Netflix?

[00:04:29] [SPEAKER_01]: Do I want to try something out?

[00:04:30] [SPEAKER_01]: Should I look at some of these AI startups that are out there?

[00:04:34] [SPEAKER_01]: And so I started looking at some of those AI companies, and some of them were interested.

[00:04:38] [SPEAKER_01]: I was interested.

[00:04:39] [SPEAKER_01]: But with any startup, you take a lot of risk, right?

[00:04:42] [SPEAKER_01]: You depend a lot on the founders of those startups.

[00:04:45] [SPEAKER_01]: And I generally didn't know those founders.

[00:04:47] [SPEAKER_01]: And so I started thinking, well, if I'm going to take such a big risk and do it for more equity than anything else, then maybe it makes sense to create my own company where I take that huge risk but also have a huge chunk of that equity.

[00:05:04] [SPEAKER_01]: And so that kind of started the process of me thinking, like, let me look into a startup and what I would want to do.

[00:05:11] [SPEAKER_01]: Then I started looking at different sectors, try to figure out where my skill set would be a good addition and very valuable for the customers there.

[00:05:20] [SPEAKER_01]: And that's where I started zoning in on education.

[00:05:22] [SPEAKER_01]: You tend to hear a lot that edtech software isn't great.

[00:05:26] [SPEAKER_01]: That's what started getting me to zone in on the education sector.

[00:05:29] [SPEAKER_01]: Luckily, my cousin is a vice principal at a school in LAUSD.

[00:05:34] [SPEAKER_01]: And so I rang her up and I was like, hey, walk me through your day-to-day.

[00:05:37] [SPEAKER_01]: Like, what's your biggest issue on any given day?

[00:05:39] [SPEAKER_01]: And so she started talking about this new student support platform that's called the Multi-Tiered Systems of Support Framework.

[00:05:47] [SPEAKER_01]: The framework itself is focused on taking a more holistic approach for how you provide social and emotional and behavioral support for students, understand the students' motivations, the context of what happened right before they took action,

[00:06:03] [SPEAKER_01]: and then how you could teach them additional social and emotional skills for how they could do better in the future.

[00:06:09] [SPEAKER_01]: And everything that she was saying really resonated with me.

[00:06:12] [SPEAKER_01]: And what she told me was that the framework is pretty theoretical in nature and teachers don't really understand it.

[00:06:18] [SPEAKER_01]: Turns out that there was a study just last year, majority of teachers don't understand it.

[00:06:21] [SPEAKER_01]: And so that's where I thought that AI might play like a really good part in being able to provide effective student support recommendations.

[00:06:28] [SPEAKER_01]: And that kicked off the entire concept for New Light.

[00:06:32] [SPEAKER_00]: Amazing.

[00:06:33] [SPEAKER_00]: And so you knew it was an important customer need.

[00:06:37] [SPEAKER_00]: You knew that there was a kind of a high friction area around edtech.

[00:06:42] [SPEAKER_00]: And then was there anything kind of from your personal history that drew you towards kind of a sense of purpose here too?

[00:06:52] [SPEAKER_01]: Actually, yeah.

[00:06:52] [SPEAKER_01]: The more that I learned about the framework, the more that I started to resonate with an event that happened in my life.

[00:06:58] [SPEAKER_01]: So I've been pretty private about this historically because it just sounds weird.

[00:07:02] [SPEAKER_01]: But I've always been the geeky person that you see in front of you.

[00:07:07] [SPEAKER_01]: But when I was in middle school, I was suspended for gang related activities, quote unquote.

[00:07:13] [SPEAKER_01]: And I promise you, I've never been associated with any sort of gang.

[00:07:17] [SPEAKER_01]: They wouldn't take me.

[00:07:18] [SPEAKER_01]: I've never been in a fight.

[00:07:20] [SPEAKER_01]: So they definitely don't want me to be part of anything like that.

[00:07:23] [SPEAKER_01]: But there was a situation in middle school where there was like this class clown in one of our classes.

[00:07:28] [SPEAKER_01]: And he always tried to be funny, always trying to crack jokes.

[00:07:32] [SPEAKER_01]: The problem was it never hit.

[00:07:33] [SPEAKER_01]: She was really bad at it.

[00:07:35] [SPEAKER_01]: And so he ended up annoying like everybody in the class, even the teacher.

[00:07:39] [SPEAKER_01]: Multiple times the teacher tried to say like, stop doing that.

[00:07:42] [SPEAKER_01]: In class, we would say stop doing that.

[00:07:44] [SPEAKER_01]: It wouldn't work.

[00:07:46] [SPEAKER_01]: Eventually, my friend and I got like so tired of it that we're like, hey, we should go say something to him.

[00:07:51] [SPEAKER_01]: And so me and I didn't even know, but three other guys went up to this kid and were like, hey, you got to cool down.

[00:07:58] [SPEAKER_01]: In class, it's not like working.

[00:08:00] [SPEAKER_01]: Like it's very annoying, right?

[00:08:02] [SPEAKER_01]: There was no physical altercation, nothing.

[00:08:05] [SPEAKER_01]: A week later, I get called into the dean's office.

[00:08:08] [SPEAKER_01]: I didn't even know where the dean's office was.

[00:08:10] [SPEAKER_01]: I was never in trouble before this.

[00:08:12] [SPEAKER_01]: And so I walk in, I sit down in front of the dean.

[00:08:15] [SPEAKER_01]: And the first thing he says is, yeah, so we're going to suspend you.

[00:08:17] [SPEAKER_01]: And I was like, suspend me?

[00:08:19] [SPEAKER_01]: What are you talking about?

[00:08:20] [SPEAKER_01]: Like, I've never been in trouble before.

[00:08:22] [SPEAKER_01]: Look at my record.

[00:08:22] [SPEAKER_01]: How can you suspend me?

[00:08:24] [SPEAKER_01]: And he's like, well, we have a zero tolerance policy for gang-related activities.

[00:08:27] [SPEAKER_01]: I was like, gang-related activities?

[00:08:28] [SPEAKER_01]: What are you talking about right now?

[00:08:31] [SPEAKER_01]: And he wouldn't listen to me at all.

[00:08:34] [SPEAKER_01]: And so I was suspended for a day.

[00:08:36] [SPEAKER_01]: And I spent the rest of my middle school career and high school career anxious, really anxious

[00:08:41] [SPEAKER_01]: about how that was going to impact my college applications.

[00:08:44] [SPEAKER_01]: Luckily, it didn't.

[00:08:45] [SPEAKER_01]: I ended up going to Harvey Mudd, which is an amazing school.

[00:08:48] [SPEAKER_01]: And then I went to Microsoft and then Netflix and the rest is kind of history.

[00:08:53] [SPEAKER_01]: But when I created the first prototype of IntelliTier, one of the first things that I did was ask

[00:08:59] [SPEAKER_01]: the AI, like, hey, what would you do in this situation for my specific situation?

[00:09:03] [SPEAKER_01]: And it said, well, we should have a mediator sit down with all the kids and talk it out

[00:09:07] [SPEAKER_01]: and figure out how we can resolve the issue and move things forward.

[00:09:10] [SPEAKER_01]: I was like, yes, that's the only thing that was needed.

[00:09:12] [SPEAKER_01]: Just sit down with us, have a conversation, figure out what was going on, and then move

[00:09:16] [SPEAKER_01]: forward.

[00:09:17] [SPEAKER_01]: And I would have never been suspended.

[00:09:18] [SPEAKER_01]: I would have never had that anxiety for so many years in my life.

[00:09:22] [SPEAKER_01]: And so I think that there's a lot of opportunities to improve on those exclusionary practices that

[00:09:27] [SPEAKER_01]: were in school historically.

[00:09:29] [SPEAKER_01]: And I do think that they're moving away from it, which is great if we can help them do it

[00:09:33] [SPEAKER_01]: more effectively, even better.

[00:09:34] [SPEAKER_00]: And that's amazing.

[00:09:36] [SPEAKER_00]: And I love how there's that combination of that personal story and there's really no

[00:09:43] [SPEAKER_00]: better way to gain empathy for the user or the folks that you're ultimately trying to

[00:09:47] [SPEAKER_00]: serve, perhaps in this case, the students.

[00:09:50] [SPEAKER_00]: While also, I think you took a pretty methodical approach, right?

[00:09:54] [SPEAKER_00]: Amongst maybe a couple of different callings.

[00:09:58] [SPEAKER_00]: Yeah.

[00:09:58] [SPEAKER_00]: So talk us through that process of, you know, amongst maybe a few different things that you

[00:10:03] [SPEAKER_00]: wanted to do, a few different things you popped up.

[00:10:05] [SPEAKER_00]: How did you prioritize New Light?

[00:10:07] [SPEAKER_00]: Yeah.

[00:10:08] [SPEAKER_01]: Yeah.

[00:10:08] [SPEAKER_01]: So there was, it's a balance between like something that you're going to be passionate

[00:10:12] [SPEAKER_01]: about and want to be able to do every single day and actually meeting market demands.

[00:10:19] [SPEAKER_01]: Right.

[00:10:20] [SPEAKER_01]: A lot of times you hear about startups failing because somebody built something that nobody

[00:10:26] [SPEAKER_01]: ever actually asked for or wanted.

[00:10:29] [SPEAKER_01]: I didn't want to build something that had no shot of actually getting any sort of adoption.

[00:10:33] [SPEAKER_01]: I at least wanted to find something that seemed to have market demand so that we can maximize

[00:10:38] [SPEAKER_01]: our chances of success in the market.

[00:10:41] [SPEAKER_01]: I didn't know about this framework.

[00:10:42] [SPEAKER_01]: I didn't know I was going to be so attached, like personally attached to it.

[00:10:46] [SPEAKER_01]: It just all kind of ended up working out for us.

[00:10:48] [SPEAKER_01]: And so, yeah, it's a lot of good lucky steps that have happened since then.

[00:10:52] [SPEAKER_00]: There's a few cool places that you've worked at.

[00:10:54] [SPEAKER_00]: You've worked at Netflix with very opinionated culture.

[00:10:57] [SPEAKER_00]: You were also at Microsoft, both during the Steve Ballmer era, as well as the Satya Nadella

[00:11:04] [SPEAKER_00]: era.

[00:11:04] [SPEAKER_00]: And I have heard other guests on this podcast, other folks that I talked to talk about sort

[00:11:09] [SPEAKER_00]: of the new Microsoft.

[00:11:11] [SPEAKER_00]: And you can look at the, you know, a trailing indicator of the stock value maybe compared

[00:11:16] [SPEAKER_00]: to the anecdotes that I've heard.

[00:11:17] [SPEAKER_00]: And I know culture is something that's really important for you as you're growing your team.

[00:11:22] [SPEAKER_00]: So what do you remember in terms of the changes that turned that huge ocean liner of Microsoft

[00:11:28] [SPEAKER_00]: into a new direction and a new culture?

[00:11:30] [SPEAKER_01]: Yeah, I think I have a little bit of a...

[00:11:37] [SPEAKER_00]: Fostering an engaged product organization and aligning them with the principles around

[00:11:42] [SPEAKER_00]: lean, human-centered design, and agile will more than likely lead to successful business

[00:11:48] [SPEAKER_00]: outcomes for your organization.

[00:11:50] [SPEAKER_00]: But getting started or getting unblocked can be hard.

[00:11:53] [SPEAKER_00]: This podcast is brought to you by the player coaches over at Integral.

[00:11:57] [SPEAKER_00]: They help ambitious companies like you build amazing product teams and ship products in

[00:12:03] [SPEAKER_00]: artificial intelligence, cloud, web, and mobile.

[00:12:08] [SPEAKER_00]: Listeners to the podcast can head on over to integral.io slash convergence and get a free

[00:12:15] [SPEAKER_00]: product success lab.

[00:12:17] [SPEAKER_00]: During this session, the Integral team will facilitate a problem-solving exercise that gives you clarity

[00:12:23] [SPEAKER_00]: and confidence to solve a product design or engineering problem.

[00:12:28] [SPEAKER_00]: That's integral.io slash convergence.

[00:12:32] [SPEAKER_00]: Now, back to the show.

[00:12:37] [SPEAKER_01]: An unpopular view.

[00:12:40] [SPEAKER_01]: I'll start off by saying I did not hate Steve Ballmer.

[00:12:44] [SPEAKER_01]: I know that's not a popular thing to say, especially in the developer community.

[00:12:49] [SPEAKER_01]: He had such a bad reputation.

[00:12:51] [SPEAKER_01]: But I joined in 2009.

[00:12:53] [SPEAKER_01]: I was an intern in 2008.

[00:12:56] [SPEAKER_01]: The antitrust case was early 2000s, right?

[00:12:59] [SPEAKER_01]: 2000, 2001.

[00:13:00] [SPEAKER_01]: And so by the time that I was there, they were already focused on turning around that entire

[00:13:06] [SPEAKER_01]: company to try to do better than what they did historically.

[00:13:09] [SPEAKER_01]: So I never knew the old Microsoft.

[00:13:12] [SPEAKER_01]: I knew what the new one was.

[00:13:13] [SPEAKER_01]: When I was there, Steve Ballmer was the CEO, as you mentioned.

[00:13:17] [SPEAKER_01]: And Azure was already being worked on.

[00:13:21] [SPEAKER_01]: Office was also a focus.

[00:13:23] [SPEAKER_01]: I joined the Windows Live platform.

[00:13:25] [SPEAKER_01]: So building big cloud systems that centralized a lot of the data from all the customers in

[00:13:30] [SPEAKER_01]: the different products was already a focus.

[00:13:32] [SPEAKER_01]: So I actually attribute some of the success that we've seen in Microsoft since Satya took

[00:13:37] [SPEAKER_01]: over to Steve Ballmer.

[00:13:40] [SPEAKER_01]: I think he, I don't know what changed his direction or how that started off, but he was CEO when

[00:13:47] [SPEAKER_01]: a lot of those things started to change.

[00:13:49] [SPEAKER_01]: I think Satya took over at a perfect point.

[00:13:51] [SPEAKER_01]: And a lot of my interpretation of being a CEO is sort of public perception.

[00:13:56] [SPEAKER_01]: And so I do think that the change was necessary.

[00:13:58] [SPEAKER_01]: I think Satya has been amazing.

[00:14:00] [SPEAKER_01]: He makes people like happy to be associated with Microsoft again.

[00:14:05] [SPEAKER_01]: And so that's great.

[00:14:07] [SPEAKER_01]: And he kept pushing forward.

[00:14:09] [SPEAKER_01]: And he did bring in a new concept, which was more focused on a one Microsoft philosophy,

[00:14:15] [SPEAKER_01]: which I think was the right decision to move things ahead.

[00:14:18] [SPEAKER_01]: And so I think, I don't think Steve Ballmer gets enough credit.

[00:14:22] [SPEAKER_01]: And I think the credit that Satya does get very deserved.

[00:14:26] [SPEAKER_00]: I love the unpopular opinion.

[00:14:28] [SPEAKER_00]: And, you know, I definitely heard two sides of the coin about how folks at Microsoft felt

[00:14:34] [SPEAKER_00]: about Steve Ballmer and can't help but think about the developers, developers, developers,

[00:14:40] [SPEAKER_00]: but also wonder how there's so many developers that are not cheering back for him.

[00:14:45] [SPEAKER_00]: Either way, speaking of culture, you went from Microsoft to Netflix.

[00:14:50] [SPEAKER_00]: Netflix maybe arguably had the opportunity to be way more intentional about their culture,

[00:14:56] [SPEAKER_00]: given culture was maybe a lot more at the forefront around when Netflix came about compared to back when Microsoft initially started.

[00:15:04] [SPEAKER_00]: So what was that change like for you?

[00:15:06] [SPEAKER_01]: Yeah.

[00:15:07] [SPEAKER_01]: So at that time, it was pretty common.

[00:15:10] [SPEAKER_01]: And I still think it's pretty common for you to like a lot of engineers to get recruitment emails.

[00:15:14] [SPEAKER_01]: Hey, check out our company.

[00:15:15] [SPEAKER_01]: Like come work for us.

[00:15:16] [SPEAKER_01]: I thought developers are still in high demand.

[00:15:19] [SPEAKER_01]: And so whenever I received one of those messages, I would go to Glassdoor and look at the reviews for companies.

[00:15:26] [SPEAKER_01]: And for the majority of tech companies, if I remember correctly, they had like a three and a half, four star review associated with them.

[00:15:34] [SPEAKER_01]: But when Netflix reached out, they had something closer to like a two star, two and a half star review.

[00:15:39] [SPEAKER_01]: And I thought that was interesting.

[00:15:40] [SPEAKER_01]: I thought it was funny.

[00:15:41] [SPEAKER_01]: And so I started looking at the comments.

[00:15:42] [SPEAKER_01]: I was like, what's going on at Netflix?

[00:15:44] [SPEAKER_01]: Like I actually like that product, right?

[00:15:46] [SPEAKER_01]: Like why, why is it so negatively reviewed?

[00:15:48] [SPEAKER_01]: And so I started going through it and I saw a lot of comments talking about a culture of fear, culture of like superstar engineers, culture, culture, culture.

[00:15:59] [SPEAKER_01]: And just the term culture was repeated so often.

[00:16:02] [SPEAKER_01]: And I was like, what is this like Netflix culture that everybody keeps referring to?

[00:16:05] [SPEAKER_01]: And so I started looking up for the Netflix culture and I ended up finding the Netflix culture deck.

[00:16:11] [SPEAKER_01]: I went through that.

[00:16:12] [SPEAKER_01]: All of this is before I responded to the recruiter.

[00:16:15] [SPEAKER_01]: So I went through every single one of those slides of the Netflix culture deck and I actually ended up falling in love with it.

[00:16:21] [SPEAKER_01]: I thought it was a great concept.

[00:16:23] [SPEAKER_01]: I thought I could understand why the negative reviews would come from it.

[00:16:27] [SPEAKER_01]: But I thought that if it was executed well, it would be an amazing result.

[00:16:33] [SPEAKER_01]: And so I decided to take a shot.

[00:16:35] [SPEAKER_00]: But it's really easy and synthesized how Glassdoor gives you an overall review.

[00:16:40] [SPEAKER_00]: But unless you actually do the, you know, little bit of extra homework of looking at what were the, you know, what's the additional verbiage or what's the reason for the high reviews and the low reviews?

[00:16:54] [SPEAKER_00]: You don't necessarily know what's for you.

[00:16:58] [SPEAKER_00]: And I think I was given some advice that I really believe in, which was you don't want your culture to fall on deaf ears.

[00:17:06] [SPEAKER_00]: You don't want people to be indifferent around it.

[00:17:08] [SPEAKER_00]: Like, for example, you don't want a bunch of three stars.

[00:17:10] [SPEAKER_00]: Yeah, you're doing a lot better if you get a bunch of fives and ones because it means it is polarizing.

[00:17:14] [SPEAKER_00]: And the folks who love it are going to really love it.

[00:17:17] [SPEAKER_00]: And the folks who don't like it maybe are going to leave.

[00:17:19] [SPEAKER_00]: And that way, I guess the other quote is the opposite of love is indifference, right?

[00:17:23] [SPEAKER_00]: And it's being opinionated and disciplined around it is an amazing way.

[00:17:28] [SPEAKER_00]: And then so what was that like, I guess, once you got past the Glassdoor and took the leap of faith and compared what culture was like at Netflix compared to what you saw at Microsoft?

[00:17:40] [SPEAKER_01]: Yeah.

[00:17:41] [SPEAKER_01]: So the difference was huge.

[00:17:42] [SPEAKER_01]: Like, I can't tell you what the culture philosophy at Microsoft really was.

[00:17:49] [SPEAKER_01]: The company was just so big, but there's nothing really memorable that really stuck out to me or that I can even think about right now.

[00:17:55] [SPEAKER_01]: But at Netflix, they really focused on living the culture that they put out in their culture deck.

[00:18:02] [SPEAKER_01]: And it was a bit of a polarizing culture.

[00:18:05] [SPEAKER_01]: The focus was on hiring the best talent that you can at each position and to continuously evaluate whether or not you have that best talent in each one of those positions.

[00:18:18] [SPEAKER_01]: And if you find that you don't, then Netflix believe that you're better off making a quick decision of moving forward and like letting that person go potentially.

[00:18:30] [SPEAKER_01]: And then finding somebody else that could be better at that specific position.

[00:18:34] [SPEAKER_01]: And so that's where the culture of fear aspect kind of comes from where, and I can tell you, there's a lot of anxiety of not really knowing whether or not you're going to be fired the following month.

[00:18:43] [SPEAKER_01]: They say that you're not supposed to be surprised.

[00:18:45] [SPEAKER_01]: Their feedback is another big, important part of it in order to make sure that everybody's aware of like where they're potentially stand.

[00:18:52] [SPEAKER_01]: And you can ask your manager, where do you stand compared to the keeper test?

[00:18:57] [SPEAKER_01]: But at the end of the day, like you could get some feedback.

[00:19:00] [SPEAKER_01]: They can give you a chance to improve yourself.

[00:19:03] [SPEAKER_01]: And six months, a year later, it may not work out and you may be let go.

[00:19:07] [SPEAKER_01]: And so it kind of starts with the feedback, like that process, if you really think about it.

[00:19:12] [SPEAKER_01]: So as soon as you get that feedback, maybe the anxiety starts and you don't know when you're going to get that feedback.

[00:19:16] [SPEAKER_01]: So you kind of live in this kind of state of fear for a little bit.

[00:19:21] [SPEAKER_01]: After only two or three years, my personal experience, then I started to get a little bit more comfortable and not being so anxious about the thought of being fired.

[00:19:30] [SPEAKER_01]: But it does happen if Netflix truly live that culture deck.

[00:19:34] [SPEAKER_00]: Yeah, so we'll make sure to have links in the show notes to the website that the culture deck has now evolved to.

[00:19:42] [SPEAKER_00]: You mentioned the keeper test.

[00:19:44] [SPEAKER_00]: In case anyone listening is not familiar with the keeper test, I think it's distilled down to a really simple one or two questions.

[00:19:50] [SPEAKER_00]: Tell us what it is.

[00:19:52] [SPEAKER_01]: The keeper test essentially asks whether or not you're better off paying the person that you're paying at that current position for the work that they're doing and the expectations that you have for that specific role.

[00:20:06] [SPEAKER_01]: Or if you would be better off going out to the open market and finding somebody else at that same exact salary.

[00:20:15] [SPEAKER_01]: Basically, is this person meeting the expectations of that role for the compensation that they're making?

[00:20:22] [SPEAKER_01]: That's the question that they ask.

[00:20:25] [SPEAKER_01]: And managers are supposed to do it every single quarter.

[00:20:27] [SPEAKER_01]: Now, you don't have that conversation with your manager every quarter, but you can ask your manager where you stand in terms of that keeper's test whenever you want.

[00:20:36] [SPEAKER_01]: And so it's a constant evaluation.

[00:20:40] [SPEAKER_01]: And this isn't just like managers doing it for the people on the ground.

[00:20:44] [SPEAKER_01]: This is directors doing it for managers, VPs doing it for directors and CEOs doing it for VPs.

[00:20:50] [SPEAKER_01]: I saw change at every single level at Netflix during my tenure there.

[00:20:57] [SPEAKER_01]: And so the keeper test is something that happened from top to bottom.

[00:21:01] [SPEAKER_00]: Right. And then so the answer to that question, was it kind of binary of yes, no?

[00:21:08] [SPEAKER_00]: Is there like maybes? How did that all work out?

[00:21:10] [SPEAKER_01]: I think that there's a concept of a tie.

[00:21:14] [SPEAKER_01]: So if you look at a person in a role for a specific salary and you say you asked the question and you're wondering, are they better off keeping that person or are they better off going into the open market?

[00:21:25] [SPEAKER_01]: And you're thinking, I'll find about the same level of talent, then you're definitely better off staying with that person.

[00:21:30] [SPEAKER_01]: There's an extra dimension that you have to think about after letting somebody go.

[00:21:33] [SPEAKER_01]: Right. It takes time to fill that role again.

[00:21:36] [SPEAKER_01]: It could be six months depending on the level for higher levels.

[00:21:39] [SPEAKER_01]: It could be longer than that.

[00:21:40] [SPEAKER_01]: And so it has to be like the person has to not be meeting those expectations to really make that decision that you're better off going over to the open market because you're essentially saying if I pay somebody else the same, they're going to do better than the person that I have.

[00:21:55] [SPEAKER_01]: But if you're going to go out to the open market, invest six months and try to find somebody else and they're doing the same work that the person that you have is doing, you're better off staying put.

[00:22:04] [SPEAKER_00]: It's a really difficult decision.

[00:22:06] [SPEAKER_00]: I think when I first became CEO, when I founded the business and I remember the first person that we had performance issues with and we had to terminate.

[00:22:17] [SPEAKER_00]: And I asked a bunch of my peers who had been running businesses longer about their advice on it.

[00:22:22] [SPEAKER_00]: And it's like everyone was taught by some mentor somewhere to say the same thing, which is the only thing I regret is not doing it sooner.

[00:22:30] [SPEAKER_00]: And I can see how this is something that will drive that urgency and discipline rather than urgency, maybe of not going too long where you're not making a decision that needs to be made.

[00:22:45] [SPEAKER_00]: And really, as much as it looks like the company is better off because they're hiring someone else, in many cases, I have seen that the employee ends up finding your role that is more energizing for them as well.

[00:22:58] [SPEAKER_00]: And so one might be able to argue that it's beneficial to both sides, but there's a decent counter argument to that as well, which we don't necessarily have to get into right now because I'm curious to know more about the values there where when you have a really powerful team and you're constantly checking around this powerful team, you end up, I think, providing a lot of autonomy to these super high performers.

[00:23:25] [SPEAKER_00]: And there's values like freedom and responsibility, which is sort of counter to maybe a lot of traditional businesses that run maybe manufacturing or healthcare where it's a lot more command and control and top down.

[00:23:38] [SPEAKER_00]: So I'm so curious about what that looks like as a lead working on something as important as account sharing.

[00:23:46] [SPEAKER_01]: Yeah, it's very easy to focus on the keeper test because it sounds negative.

[00:23:52] [SPEAKER_01]: It sounds scary.

[00:23:53] [SPEAKER_01]: And in some ways it is.

[00:23:55] [SPEAKER_01]: But you have to think about the benefits that you end up getting by applying something like the keeper test and focusing on only building superstar teams with superstar talent.

[00:24:04] [SPEAKER_01]: The philosophy was that if you can keep people that are dependable, that are great at their job, that are creative, then you don't have to put a lot of processes around them.

[00:24:16] [SPEAKER_01]: You don't have to be the one that tells everybody what to do.

[00:24:21] [SPEAKER_01]: So Reed had a little line inside of that culture deck, the original one that said that if you wanted to sail the sea and needed to build a boat and needed people to build a boat, don't make plans of what that boat's going to look like and how to be built and then go and tell people what exactly they need to do.

[00:24:41] [SPEAKER_01]: But instead, go out, find other people that are super passionate about sailing the sea, get them to yearn for the sea, and then have everybody work together to figure out how to build that boat and how to get out there.

[00:24:55] [SPEAKER_01]: And so it's a lot of empowerment for everybody that's within the company and being able to put a lot of trust in them and allow them to make the decisions that they need to make without them having to worry about getting approvals or a lot of check-ins with higher up in order to make sure that they're doing the right thing.

[00:25:16] [SPEAKER_00]: So the feature you were leading the team of at Netflix has made the news, right?

[00:25:24] [SPEAKER_00]: Which congrats to you and the team.

[00:25:26] [SPEAKER_00]: So tell us about the feature and tell us about some of the business outcomes that has showed up in the news about it.

[00:25:32] [SPEAKER_01]: Yeah, so I was the tech lead for the account sharing initiative at Netflix.

[00:25:37] [SPEAKER_01]: Let me just proactively apologize to people out there that can no longer share their Netflix account.

[00:25:43] [SPEAKER_01]: Unfortunately, that feature, there's such a big business aspect to it.

[00:25:50] [SPEAKER_01]: And you have to think about that whenever you're building products.

[00:25:54] [SPEAKER_01]: So Netflix saw a bit of a slowdown in 2021.

[00:25:57] [SPEAKER_01]: And I think one of the things that you look at was what's the overall population that can pay for Netflix and how many users were actually on Netflix and how many were actually paying for it, right?

[00:26:08] [SPEAKER_01]: And at some point, you just ended up seeing that there was a significant amount of sharing that was happening.

[00:26:13] [SPEAKER_01]: And in some cases, some accounts were sharing with more than 10 households, which could mean 50 people plus, right?

[00:26:21] [SPEAKER_01]: And so it was just being abused a little too far.

[00:26:25] [SPEAKER_01]: And that abuse ended up getting the company to focus on it.

[00:26:30] [SPEAKER_01]: And at some point, you just had to decide to do something about it.

[00:26:34] [SPEAKER_01]: What I really loved about Netflix's take, though, is that there's always such a focus on the user experience for, well, the paying users.

[00:26:44] [SPEAKER_01]: And so as we were building out this product and the reason it took so many years was because there was a huge focus in making sure that we don't disturb the users that are paying and only target the people that are borrowing.

[00:26:57] [SPEAKER_01]: And there's a lot of technical challenges around that to make sure that you have the confidence to ensure that you're blocking the right people.

[00:27:05] [SPEAKER_01]: Because if you got the ones that are paying, they would cancel.

[00:27:08] [SPEAKER_01]: And if you get a big cancellation wave for a big subscription company like Netflix, then you're putting the entire company in a really bad financial situation.

[00:27:18] [SPEAKER_01]: And so it was an extremely important project and one that I'm happy came out in the successful side of it because it could have very easily have gone the other way.

[00:27:28] [SPEAKER_00]: Yeah.

[00:27:29] [SPEAKER_00]: And I remember they introduced tiers of subscription that did make it more accessible, including ads.

[00:27:34] [SPEAKER_00]: And on the flip side, I think it drove like, was it like it's tens of millions of dollars in revenue that I recall annually.

[00:27:40] [SPEAKER_01]: It was a few billions, actually, within the first year after release.

[00:27:45] [SPEAKER_01]: Wow.

[00:27:45] [SPEAKER_01]: So, yeah.

[00:27:46] [SPEAKER_01]: My first project into the bees, which is nice.

[00:27:49] [SPEAKER_01]: I think they ended up adding over 40 million subscribers in the 12 months after the release of the project.

[00:27:57] [SPEAKER_00]: That's right.

[00:27:57] [SPEAKER_00]: Maybe I was thinking number of subscribers.

[00:27:59] [SPEAKER_00]: It felt weird rolling off the tongue already.

[00:28:01] [SPEAKER_00]: And congrats on the bee.

[00:28:04] [SPEAKER_00]: It's a common problem that's going to come up as there are more SaaS products, as more proliferation of PLG.

[00:28:14] [SPEAKER_00]: So for the tech leads, the product managers out there that are working on this side of the house, is there any advice or lessons learned that you might want to share for it?

[00:28:24] [SPEAKER_01]: So I was always trying to fight for the side of the users.

[00:28:27] [SPEAKER_01]: That's how I try to get my reputation to come back up after working on that.

[00:28:30] [SPEAKER_01]: But it's very easy to squeeze the way that you approach this to maximize revenue.

[00:28:39] [SPEAKER_01]: But maximizing revenue can be a very short-sighted decision.

[00:28:44] [SPEAKER_01]: And you have to think about things long-term.

[00:28:47] [SPEAKER_01]: And that's actually a recommendation that I would make to engineers as well.

[00:28:51] [SPEAKER_01]: A lot of times, engineers, they're told to build something.

[00:28:54] [SPEAKER_01]: And they just kind of build it without thinking about it.

[00:28:56] [SPEAKER_01]: Now, that's never been my approach.

[00:28:57] [SPEAKER_01]: Like, somebody could tell me to build something, and then I'll take a step back and think about, oh, how does this impact this product?

[00:29:03] [SPEAKER_01]: How does it impact the company?

[00:29:04] [SPEAKER_01]: Like, what is the motivation of these decisions?

[00:29:09] [SPEAKER_01]: And is there a better approach?

[00:29:11] [SPEAKER_01]: Thinking about things holistically can allow for more people to really think about whether or not this is the most effective solution to implement.

[00:29:20] [SPEAKER_01]: That's the biggest thing that I would recommend.

[00:29:23] [SPEAKER_01]: Think about how that product fits in to the overall business value proposition and if there are better approaches to it.

[00:29:31] [SPEAKER_01]: And sometimes, if you're being too aggressive and focusing a little bit too much on the business side of it and not enough on the customer side of it,

[00:29:37] [SPEAKER_01]: it has to be a holistic approach to really come out with the best solution.

[00:29:40] [SPEAKER_00]: And so, what's your advice for other folks who are working in high-performing environments that maybe have similar anxieties,

[00:29:48] [SPEAKER_00]: and that would help them overcome the anxieties as well as climb in the ranks in terms of getting to senior staff principal and other kind of higher, more senior titles?

[00:30:00] [SPEAKER_01]: Imposter syndrome is such a common term that's heard around the engineering world because there are so many high expectations for people.

[00:30:10] [SPEAKER_01]: And a lot of times, you kind of feel like you lucked into some of these positions.

[00:30:15] [SPEAKER_01]: But the reality of it is that everything that you've worked on your entire life is what put you into that position.

[00:30:22] [SPEAKER_01]: And so, you have to believe in yourself.

[00:30:26] [SPEAKER_01]: You are there because you earned that spot, not because you lucked into it.

[00:30:30] [SPEAKER_01]: It does no good focusing on the anxiety aspect of it and what you can't control.

[00:30:35] [SPEAKER_01]: At the end of the day, I think that all you can do is focus on providing as much value as you can provide.

[00:30:41] [SPEAKER_01]: And whatever comes of that, comes of it.

[00:30:44] [SPEAKER_01]: And I think being accepting of that, like failure is okay.

[00:30:47] [SPEAKER_01]: Actually, at this point, I actually start to see failure a little bit more as a benefit because it's a learning opportunity and an opportunity to figure out how you could have done better for that next thing that you do in your next part of your life.

[00:31:01] [SPEAKER_01]: So, I would say don't overly focus on thinking that you don't belong in a place.

[00:31:07] [SPEAKER_01]: Instead, focus on what you can do to provide value.

[00:31:10] [SPEAKER_01]: And then whatever comes of it, comes of it from that point moving forward.

[00:31:13] [SPEAKER_01]: And that's okay.

[00:31:14] [SPEAKER_01]: There are other opportunities ahead.

[00:31:17] [SPEAKER_01]: It's not the end of the world if something ends up not working out.

[00:31:22] [SPEAKER_00]: Absolutely.

[00:31:22] [SPEAKER_00]: And then for the leaders and managers out there that are maybe debating the priority of feedback mechanisms and how often employees get feedback, how did that change your imposter syndrome or maybe make it worse?

[00:31:37] [SPEAKER_01]: I think feedback and openly having conversations helps quite a bit with the imposter syndrome and the anxiety aspect of it.

[00:31:46] [SPEAKER_01]: Because a lot of my anxiety personally came from not really knowing where I stood or thinking that I stood somewhere lower than what the reality of it actually was.

[00:31:57] [SPEAKER_01]: I really enjoyed Netflix's focus on actively providing feedback because it allows for anybody, one, to ask for feedback at any given point in time to really try to figure out where you stand.

[00:32:09] [SPEAKER_01]: But two, if there is something that's wrong, there was a culture of focusing on providing that feedback as soon as possible.

[00:32:17] [SPEAKER_01]: And so you had a better understanding of where you stood at any given point in time.

[00:32:22] [SPEAKER_01]: That's what I ended up learning over my time at Netflix, that I was personally kind of thinking that I was lower than what I actually was.

[00:32:31] [SPEAKER_01]: But once I started understanding that feedback culture more and more at Netflix and that people were actually telling me what I needed to improve on or where I stood or what they liked about what I did, then I started to arguably be able to start doing that keeper test myself.

[00:32:47] [SPEAKER_01]: Would I fire myself if I was my manager?

[00:32:50] [SPEAKER_01]: And a lot of times that answer was no.

[00:32:52] [SPEAKER_01]: And it was because of the value and the feedback that I was getting.

[00:32:54] [SPEAKER_01]: So providing feedback, just having those open conversations and doing it sooner rather than later, like don't let it build up.

[00:33:01] [SPEAKER_01]: There's no reason to let it build up.

[00:33:02] [SPEAKER_01]: It can only get worse.

[00:33:04] [SPEAKER_01]: But if you have that conversation as soon as possible, then you give it an opportunity for the people to right the ship and move forward correctly.

[00:33:12] [SPEAKER_01]: And if the ship doesn't get righted, then that's where Netflix and where I believe that at some point you have to make a decision to move forward.

[00:33:21] [SPEAKER_00]: It's the sort of negative element that typically gets most of the screen time and not the positive stories about how it's pulling folks out of imposter syndrome.

[00:33:33] [SPEAKER_00]: I was giving folks a lot of amazing context on what they can improve, knowing where they really stand, what maybe is anxiety that's not based on anything other than stories we tell ourselves versus focusing on the things that you can have a conversation and get data points from others.

[00:33:51] [SPEAKER_00]: So appreciate you sharing that story there.

[00:33:54] [SPEAKER_00]: And so you were the lead on a pretty critical service that was used by all the users in all the countries, and you maybe had to change the way you allocated work to folks on your team based on this value.

[00:34:12] [SPEAKER_00]: So is there anything that you can recall there in terms of changing your leadership style?

[00:34:16] [SPEAKER_01]: Yeah, I think a lot of it was getting buy-in.

[00:34:20] [SPEAKER_01]: Once again, like context not control is another one of those lines that they use quite a bit and something that I ultimately really love.

[00:34:28] [SPEAKER_01]: For me, it was never about telling different people from different teams what to do, but instead explaining the overall solution and the context and what we're trying to achieve.

[00:34:41] [SPEAKER_01]: And then having a conversation with them and figuring out what the best solution forward would be, right?

[00:34:48] [SPEAKER_01]: Like, I think it's very egotistical for anybody.

[00:34:51] [SPEAKER_01]: And this is a big part of what I loved about Netflix and what I think makes them so successful.

[00:34:56] [SPEAKER_01]: It's that you're not relying on a CEO or VP that knows all of the answers in the world and exactly like how customers are going to react in order to make sure to decide how you're going to move forward.

[00:35:07] [SPEAKER_01]: But instead, you take the diversity of opinions from everybody to try to find what that best solution is.

[00:35:16] [SPEAKER_01]: As long as nobody's egotistical or like says, I need my solution to be the thing.

[00:35:21] [SPEAKER_01]: But instead, you actually sit down and find what the best solution is.

[00:35:24] [SPEAKER_01]: And then you all agree and march forward with that solution.

[00:35:27] [SPEAKER_01]: That ends up being a lot more effective than relying on one person's skills.

[00:35:33] [SPEAKER_00]: What are some things as you founded your own business that you're bringing into new light when it comes to culture, hiring, enablement, feedback?

[00:35:42] [SPEAKER_00]: Tell me about that.

[00:35:43] [SPEAKER_01]: I'm stealing so much from Netflix.

[00:35:47] [SPEAKER_01]: It all comes down to metrics, right?

[00:35:49] [SPEAKER_01]: The amount of revenue that Netflix has been able to generate with the number of employees that they were able to do it with is significant.

[00:35:57] [SPEAKER_01]: When I joined, it was 3,000 employees when like in today's world, I think they're closer to 12,000 employees.

[00:36:05] [SPEAKER_01]: If you look at the impact that Netflix has been able to make and you compare that to Microsoft, Google and Amazon, they have hundreds of thousands of employees.

[00:36:14] [SPEAKER_01]: Netflix only has 12,000.

[00:36:15] [SPEAKER_01]: And I think that this philosophy is a huge reason for why they were able to be so efficient.

[00:36:20] [SPEAKER_01]: And so I think in education, there's a stereotype or a belief that there isn't like a lot of money in education.

[00:36:29] [SPEAKER_01]: And that's why ed tech talent tends to not be great.

[00:36:33] [SPEAKER_01]: And I can see it.

[00:36:35] [SPEAKER_01]: But the philosophy that we're bringing into new light is if we can replicate some of what Netflix did in order to make them successful,

[00:36:43] [SPEAKER_01]: then I think that we can build a really efficient company inside of the ed tech space where we can have some of that super high quality talent.

[00:36:51] [SPEAKER_01]: It really is focused on having strong personnel that are able to do the job of multiple people that don't have to be supervised by a lot of people, right?

[00:37:02] [SPEAKER_01]: And so we're bringing in a lot of strong talent from some of these big tech companies that can come in here and be super efficient so that we can build a super efficient ed tech company

[00:37:14] [SPEAKER_01]: and have a lot of impact without having to invest a lot in really expanding the number of employees that we have within the company.

[00:37:23] [SPEAKER_01]: And we think that that's our recipe for success and how we can do it in a sector that arguably doesn't have as much money as building products for other tech businesses.

[00:37:34] [SPEAKER_01]: And how far along are y'all with new light?

[00:37:37] [SPEAKER_01]: We launched our MVP over the summer.

[00:37:41] [SPEAKER_01]: We were able to onboard a few districts.

[00:37:43] [SPEAKER_01]: So we have some customers to try it out.

[00:37:47] [SPEAKER_01]: Now they're not paying customers.

[00:37:48] [SPEAKER_01]: So that's where I'm a little still anxious to get to that threshold of having people pay us.

[00:37:54] [SPEAKER_01]: But that was also our strategy.

[00:37:56] [SPEAKER_01]: We want customers.

[00:37:57] [SPEAKER_01]: We want to listen to what they're saying.

[00:37:59] [SPEAKER_01]: We want to hear their feedback and we want to make our product better.

[00:38:02] [SPEAKER_01]: Going into the following academic year, we will be looking for revenue.

[00:38:06] [SPEAKER_01]: And so we are starting to charge for our product for the 25, 26 school year.

[00:38:11] [SPEAKER_01]: But given the schedules for school budgets, they don't really have money to pay us for this calendar year or for this school year.

[00:38:19] [SPEAKER_01]: And so what we're doing is we're allowing people to use our product for free for this school year with a commitment that they're going to pay us for next year.

[00:38:26] [SPEAKER_01]: But we also believe in our product and we don't want to tie people into contracts.

[00:38:29] [SPEAKER_01]: And so what we're adding in on top of that is giving them the option to cancel from that commitment up to a month before we send out the bill.

[00:38:40] [SPEAKER_01]: And so that would allow them to try out Intel tier, make sure that's actually valuable for them, make sure that it's having the impact for students that we're hoping that it will have.

[00:38:50] [SPEAKER_01]: And if it's not, then it's OK.

[00:38:51] [SPEAKER_01]: We'll go our separate ways.

[00:38:53] [SPEAKER_01]: Right now, the focus is let's get feedback.

[00:38:55] [SPEAKER_01]: Let's figure out what we're missing, what we need to build and how to make this better.

[00:38:59] [SPEAKER_01]: And so each year that product is going to be better.

[00:39:02] [SPEAKER_01]: And each year we expect more and more penetration.

[00:39:05] [SPEAKER_00]: And so you have a freemium model with some product led growth or PLG baked in.

[00:39:12] [SPEAKER_00]: How did you divvy up the free versus paid?

[00:39:15] [SPEAKER_01]: Yeah.

[00:39:16] [SPEAKER_01]: So we're looking to increase engagement and usage as much as possible in the product in order to get additional feedback to continue to improve our product.

[00:39:25] [SPEAKER_01]: Any sort of metrics and signals is super valuable for us right now.

[00:39:28] [SPEAKER_01]: So what we decided to do was release a free version.

[00:39:31] [SPEAKER_01]: In the free version, we essentially automatically create a school for one specific user.

[00:39:38] [SPEAKER_01]: And within that school, that user can do everything that the paid version can do.

[00:39:43] [SPEAKER_01]: They can create new students.

[00:39:44] [SPEAKER_01]: They can add in the social and emotional behavior events.

[00:39:47] [SPEAKER_01]: They can work with the AI assistant to figure out what the effective student intervention strategies would be for those students or how they can improve intervention strategies within the school.

[00:39:56] [SPEAKER_01]: So they get all of that.

[00:39:57] [SPEAKER_01]: What they don't get is the ability for other users to be able to access that school.

[00:40:03] [SPEAKER_01]: And so the collaboration aspect of it, if they're working with a student support team and teachers want to share the data that they've recorded, they wouldn't be able to say like, hey, check out Intel tier, go to this school and look at this data.

[00:40:15] [SPEAKER_01]: In order to get that, they have to move over to our paid version, which, as I mentioned earlier, is free for this academic school year with a commitment to pay for the following school year.

[00:40:27] [SPEAKER_00]: Nice. I love that you're trying to drive engagement and usage so you get more feedback.

[00:40:33] [SPEAKER_00]: And you're really adding a lot more value where students are getting benefit through their staff or their teachers using it.

[00:40:41] [SPEAKER_00]: It's the staff get a lot more value with paid version.

[00:40:44] [SPEAKER_00]: I think that makes a ton of sense.

[00:40:46] [SPEAKER_00]: How did that decision come about?

[00:40:50] [SPEAKER_01]: We were playing with multiple ideas for months, actually, and kind of going back and forth.

[00:40:56] [SPEAKER_01]: And this is a lot of where I rely on the rest of my team and company to come up with the best idea of how to approach this.

[00:41:04] [SPEAKER_01]: We were tossing around the idea of exposing our AI assistant without the data collection aspect of it.

[00:41:11] [SPEAKER_01]: And a few other things that we tried here and there, like maybe we just show mock data and allow people to run through some scenarios with that mock data, but not actually move into the real data world of it.

[00:41:26] [SPEAKER_01]: Some of it actually was like a technical challenge aspect of it as well.

[00:41:30] [SPEAKER_01]: Like if we're going to create a mock school with mock data for every user that came in and tried to sign up, then that would be a lot of generation of like data that's throwaway and cleaning up of data that they wouldn't really need.

[00:41:46] [SPEAKER_01]: And so technically that also didn't make sense.

[00:41:49] [SPEAKER_01]: Eventually we came up with this idea and technically a pretty easy solution to implement as well.

[00:41:55] [SPEAKER_01]: And so overall, it just seemed like a perfect combination of a technical solution, of a way to really provide the value that we're building to users and a good limitation that makes sense for what can differentiate a free version from a paid version.

[00:42:10] [SPEAKER_00]: And you mentioned that part of the founding story or the aha moment for you was when you got to use generative AI.

[00:42:19] [SPEAKER_00]: And at the time you were at Netflix and, you know, Netflix had their recommendation engine since I want to say the early 2000s from what I can remember.

[00:42:29] [SPEAKER_00]: And then there's more AI and machine learning that's been added to it.

[00:42:34] [SPEAKER_00]: And so what were some of the aha moments maybe about generative AI versus other like more traditional AI ML that he would seen that made you take the leap?

[00:42:44] [SPEAKER_00]: Yeah.

[00:42:45] [SPEAKER_01]: I think, I mean, for me, it was pretty immediate.

[00:42:48] [SPEAKER_01]: As soon as I saw ChatGPT and what it could do, the 3.5 version, I was like, that's not something that any software could do before.

[00:42:56] [SPEAKER_01]: It really brings so much general knowledge and democratizes it to so many people.

[00:43:03] [SPEAKER_01]: And that's super powerful.

[00:43:04] [SPEAKER_01]: Then being able to tailor it for like specific information to provide that information to users in a way that's intuitive.

[00:43:15] [SPEAKER_01]: All of that extremely powerful and not possible just three years ago.

[00:43:19] [SPEAKER_01]: And so as soon as I saw that, I knew it was like a huge next step in software.

[00:43:25] [SPEAKER_01]: And I actually compare it to two other like huge events in my lifetime in technology, which is the introduction of the internet and creating websites, right?

[00:43:35] [SPEAKER_01]: Which created the dot-com boom.

[00:43:37] [SPEAKER_01]: Super valuable.

[00:43:38] [SPEAKER_01]: At the end of the day, you ended up getting Amazon and a lot of other big companies.

[00:43:43] [SPEAKER_01]: And then with the introduction of the iPhone and apps, that also created the next generation of software and made so many different services available for users in such an easy manner.

[00:43:56] [SPEAKER_01]: I think this is that next step that is aligned with those two.

[00:44:00] [SPEAKER_01]: And so as soon as I saw ChatGPT, I knew that there was going to be a lot of opportunity there.

[00:44:05] [SPEAKER_01]: I was just too busy to really dive into it in that year.

[00:44:09] [SPEAKER_01]: And so it wasn't until the middle of last year that I finally had the time to start thinking about how can I build something that provides value in a way that nobody else is thinking about it.

[00:44:19] [SPEAKER_00]: Speaking of really delightful products, something I like to ask all the guests is about something that you got to experience recently, whether it's a product or service, whether it's at work or at home, that really delighted you, blew your socks off.

[00:44:32] [SPEAKER_00]: Do you remember something recently?

[00:44:34] [SPEAKER_01]: There's a few of them.

[00:44:34] [SPEAKER_01]: I mean, obviously, ChatGPT, I have to put it out here, even though we've been talking about it the entire time.

[00:44:39] [SPEAKER_01]: It's such a significant milestone in software.

[00:44:44] [SPEAKER_01]: But I love the combination of that with workflows.

[00:44:48] [SPEAKER_01]: So Zapier, we're starting to figure out how we can automate a lot of these things within that company, within our company as well, in order to be as efficient as possible.

[00:44:58] [SPEAKER_01]: Once again, focusing on building the most efficient company that we can within the education space so that we don't have to have these crazy high prices for our products.

[00:45:08] [SPEAKER_01]: So I'll give Zapier some credit.

[00:45:09] [SPEAKER_01]: But honestly, the biggest service slash product that I use on my day-to-day life, and I don't think it's enough credit for me.

[00:45:17] [SPEAKER_01]: How would you like folks to get a hold of you?

[00:45:20] [SPEAKER_01]: I think our website is probably the best way to contact me.

[00:45:24] [SPEAKER_01]: So if you go to newlight.io, and that's N-E-U-L-I-G-H-T, which is a combination of neural networks and enlightenment.

[00:45:31] [SPEAKER_01]: I think I was trying to be too clever with that name and only later decided, oh, that's actually kind of hard to spell.

[00:45:38] [SPEAKER_01]: Either way, newlight.io, we have a contact us form that I look at each time one of those messages come in.

[00:45:48] [SPEAKER_01]: You can also try out Intel tier for free.

[00:45:50] [SPEAKER_01]: You can schedule a demo, and I will do the demo, or my co-founder, and now we have a sales engineer, to show what Intel tier is capable of.

[00:46:01] [SPEAKER_01]: The other option is finding me on LinkedIn.

[00:46:03] [SPEAKER_01]: So just searching for Jose Moreno at New Light, you should be able to find me.

[00:46:06] [SPEAKER_01]: And I'm very happy to chat with people on there as well.

[00:46:10] [SPEAKER_00]: Awesome.

[00:46:10] [SPEAKER_00]: We will make sure to have links to all of those out in the show notes as well.

[00:46:14] [SPEAKER_00]: Well, thanks a lot for making the time today, man.

[00:46:16] [SPEAKER_00]: I appreciate you coming and sharing your super personal story by getting suspended in school.

[00:46:22] [SPEAKER_00]: That led to something really wonderful that I hope you can help a lot of students and change their pathways and make life easier for the teachers and the other staff involved.

[00:46:32] [SPEAKER_00]: Thanks a lot for making the time, Jose.

[00:46:34] [SPEAKER_01]: Thank you for having me.

[00:46:35] [SPEAKER_01]: God, I hope that doesn't backfire on me.

[00:46:43] [SPEAKER_00]: That was really fun for me to get an inside view into Netflix culture.

[00:46:49] [SPEAKER_00]: Their culture deck was something that changed my life.

[00:46:54] [SPEAKER_00]: I was moved by how opinionated, thoughtful, and also well-written it was.

[00:46:59] [SPEAKER_00]: And I was also really curious about why they'd share something so publicly that might compromise their interview process.

[00:47:07] [SPEAKER_00]: I was also inspired to build an organization someday that was similarly opinionated about how we treated each other, how we treated our work, our customers, our community.

[00:47:17] [SPEAKER_00]: And I knew from day one of founding Integral that that's something that we would have sooner than later.

[00:47:25] [SPEAKER_00]: So I've shared a link in the show notes to what we called our working agreement that we published on our careers page.

[00:47:33] [SPEAKER_00]: And for those of you curious about how we got there, here is the approach.

[00:47:37] [SPEAKER_00]: First of all, in terms of why this is valuable, I think it's something that can clarify for your team, your managers, your leadership team, and your HR team on what you believe is an organization, how you treat each other, how you treat your customers, your community, and your work.

[00:47:54] [SPEAKER_00]: I think this clarification is extremely valuable as it makes it easy for your teammates to bring a mindset to work that's most likely to succeed at your organization.

[00:48:05] [SPEAKER_00]: It's also helpful for managers and leaders to have a common language to discuss and provide both positive and constructive feedback to your team.

[00:48:15] [SPEAKER_00]: I imagine your people or human resources team will also likely appreciate a more structured approach to how you document and manage your team up or out.

[00:48:27] [SPEAKER_00]: Once we defined our core values and then incorporated them into our management interview processes, we filtered candidates based off of core values before they were even considered for their technical ability.

[00:48:42] [SPEAKER_00]: We prioritized the values over their technical capability, and I think it was a really good decision for us.

[00:48:49] [SPEAKER_00]: We did initially have hesitations of sharing the values publicly on our careers page and job postings.

[00:48:57] [SPEAKER_00]: As you can imagine, we worried that folks would be able to get a cheat sheet or an answer key to our interviews.

[00:49:05] [SPEAKER_00]: And as you can imagine, that turned out to be counterintuitive.

[00:49:09] [SPEAKER_00]: Of course, the Netflix case study was an important data point for us to run the experiment.

[00:49:13] [SPEAKER_00]: And then what ended up happening was that we went from candidates who sort of liked us or disliked us to folks who loved us or hated us.

[00:49:24] [SPEAKER_00]: And as someone famous once said, I agree that the opposite of love is indifference.

[00:49:31] [SPEAKER_00]: So this really helped us attract team members who truly believed what we believed.

[00:49:37] [SPEAKER_00]: And I noticed that a lot of our debates and arguments got elevated to being about complex customer or technical problems, as opposed to ones that were more about our beliefs and principles, which didn't feel quite as productive on a day-to-day.

[00:49:54] [SPEAKER_00]: In order to get here, we borrowed a method from the author Patrick Lencioni and his book The Advantage.

[00:50:03] [SPEAKER_00]: This was also adopted by Gino Wickman in his book, Traction, where he writes about the entrepreneurial operating system, or EOS.

[00:50:14] [SPEAKER_00]: There are eight steps to the process, and this is how we went.

[00:50:18] [SPEAKER_00]: We started with step one of understanding different types of values.

[00:50:22] [SPEAKER_00]: There are core values, aspirational values, permission to play values, and also accidental values.

[00:50:28] [SPEAKER_00]: And you want to be really careful here that it's the core values that you're focusing on.

[00:50:34] [SPEAKER_00]: By the way, as an aside, one of Enron's posted values on their posters in their office was integrity.

[00:50:41] [SPEAKER_00]: Something that we famously knew that was violated from the leadership down and didn't have any internal checks and balances.

[00:50:49] [SPEAKER_00]: So that's an anti-pattern and an interesting story, I think, to think back on.

[00:50:55] [SPEAKER_00]: Step two is identifying what your core values are.

[00:50:58] [SPEAKER_00]: So being inspired by the Netflix culture deck and wanting to create our own, I would oftentimes go down to our office on the weekend and try to write them out.

[00:51:08] [SPEAKER_00]: Now, if your brain is wired like mine, you'd find it really hard to stare at a blank whiteboard for hours to write something so critical and important.

[00:51:18] [SPEAKER_00]: And in my case, I ended up giving up or procrastinating many times before finding this framework.

[00:51:24] [SPEAKER_00]: I found it to be extremely helpful to get out of my own head and in my own way.

[00:51:31] [SPEAKER_00]: And that it used data points that apparently we had all around us all the time.

[00:51:36] [SPEAKER_00]: So what I did was I gathered folks from our leadership team and we evaluated our past hiring decisions and the colleagues that we got to work with.

[00:51:45] [SPEAKER_00]: We each made a list of the most clone worthy colleagues on the team and then listed out on sticky notes attributes about these colleagues and why cloning them would really help us build a special workplace.

[00:52:01] [SPEAKER_00]: Side note, it's very intentional that we don't use the word favorite colleague here and why we use the word clone worthy.

[00:52:09] [SPEAKER_00]: It's nuanced, but it's important.

[00:52:12] [SPEAKER_00]: Then we moved to step three, which was looking at the sticky notes and we duplicated them and we synthesized them around the behaviors and we identified trends in there.

[00:52:24] [SPEAKER_00]: And in our case, we noticed that our most clone worthy teammates were humble, accountable, curious and kind.

[00:52:33] [SPEAKER_00]: And for myself as a founder, this also felt like values that I aligned with and showed up with on my good days and who I wanted to surround myself with.

[00:52:44] [SPEAKER_00]: And then we moved to step four, which was testing them.

[00:52:47] [SPEAKER_00]: We tested them against our own team and we created a bar.

[00:52:51] [SPEAKER_00]: For each employee, look at each value and have a thumbs up, a thumbs down or a sideways thumb.

[00:52:58] [SPEAKER_00]: And that essentially signified whether we mostly aligned in terms of the values, we rarely aligned or we sometimes aligned with them in these values.

[00:53:07] [SPEAKER_00]: And I remember when we did this exercise that even in doing this exercise, we had much more structured communication around how we communicated our thoughts and feedback around the various teammates we had.

[00:53:21] [SPEAKER_00]: Whether we wish we could clone them or if we found ourselves maybe accommodating their behaviors instead.

[00:53:28] [SPEAKER_00]: And this part takes a bit more work, I understand.

[00:53:31] [SPEAKER_00]: When we did it, we were somewhere between 20 and 25 teammates.

[00:53:35] [SPEAKER_00]: So we could do it with all of them.

[00:53:37] [SPEAKER_00]: If you're a larger org, you may want to start with maybe a randomly set of selected employees first before rolling it out to everybody and getting maybe your manager's help.

[00:53:49] [SPEAKER_00]: Creating a bar here becomes somewhat self-evident.

[00:53:52] [SPEAKER_00]: We all sort of had hunches on which employees we'd fight to keep, who we just absolutely needed to part ways with, and who we hoped would get better or managing with more granularity.

[00:54:03] [SPEAKER_00]: And based on this analysis, a bar really appears in terms of where we draw the line, in terms of how many thumbs ups, sideways thumbs and thumbs down a candidate would need in order to stay here or in order to further in the interview process.

[00:54:23] [SPEAKER_00]: Once we had tested it in the bar, we moved to step five, which was putting this in a more shareable format for folks who weren't there and sharing it with the team.

[00:54:35] [SPEAKER_00]: We facilitated exercises that solicited feedback from more team members, and more importantly, clarifications from them.

[00:54:43] [SPEAKER_00]: I strongly recommend doing this in an interview setting rather than a survey, at least to start.

[00:54:50] [SPEAKER_00]: And be choosy in terms of who is going to be most likely to provide open, honest, transparent feedback and clarifications.

[00:54:58] [SPEAKER_00]: It was a tough call between the trade-offs of doing it anonymously or having the ability to have more of a conversation.

[00:55:05] [SPEAKER_00]: We opted for an in-depth conversational style interview, and it worked well for us.

[00:55:11] [SPEAKER_00]: Then we moved to step six, which is incorporating these core values into our organizational practices and operationalizing it and adopting it.

[00:55:20] [SPEAKER_00]: The first one was hiring, where we created and iterated on ways to test these core values.

[00:55:25] [SPEAKER_00]: This was either through sort of contextual interviews or better through creating kind of intentional friction points in our interview process to see what the candidate did.

[00:55:36] [SPEAKER_00]: I strongly recommend against having just your recruiters do a cultural screen, because I think this is a critical question that you need to consider during every step of the process, as well as across all of your interviewers, not just your recruiters.

[00:55:52] [SPEAKER_00]: Side note, this is also very effective to reinforce and adapt the processes in your organization, because your interviewers are thinking about these core values a lot more when they have to make decisions around them and understand them.

[00:56:04] [SPEAKER_00]: And then it propagates really good case studies and water cooler talk from the interviewers and not just leadership.

[00:56:11] [SPEAKER_00]: Another area, of course, is performance management with your current team.

[00:56:15] [SPEAKER_00]: So what we started to do is we started to share our feedback in the lens of values.

[00:56:19] [SPEAKER_00]: Managers would share both critical and positive feedback with the team members, but we would do it in the lens of which core value they were really crushing it at or creating tension around.

[00:56:30] [SPEAKER_00]: We created an option in our Slack shoutouts channel where the team gave each other shoutouts or thank yous and give them the option to provide which value they felt like that teammate was really embodying.

[00:56:42] [SPEAKER_00]: And then the last one is around leadership decisions.

[00:56:45] [SPEAKER_00]: As a CEO, I had to be disciplined around creating a gut check of whether our hard, hairy decisions were aligning or not aligning with our core values.

[00:56:59] [SPEAKER_00]: And this provided course correction for them.

[00:57:01] [SPEAKER_00]: And then we also shared these in town halls and newsletters and other context sharing places like a culture wiki or maybe an LLM now.

[00:57:10] [SPEAKER_00]: Step seven, no surprise, is applying feedback loops.

[00:57:13] [SPEAKER_00]: It's very unlikely that you will get it perfect the first time.

[00:57:16] [SPEAKER_00]: So give yourself space to iterate, whether it's rolling it out with a smaller subset of your team intentionally or if it's soliciting feedback from your team and interview candidates and letting them know that it is going to change slowly.

[00:57:31] [SPEAKER_00]: You also get to raise the bar that we talked about.

[00:57:34] [SPEAKER_00]: So as you get better of it, I encourage you to raise the bar around how many thumbs ups, thumbs downs, etc. that an ideal candidate has so that you can intentionally raise the cultural alignment of your team.

[00:57:47] [SPEAKER_00]: And then the last one is adding or subtracting values.

[00:57:50] [SPEAKER_00]: Be careful that adding is a lot easier than subtracting.

[00:57:53] [SPEAKER_00]: We had three values for about three years before we made the intentional choice to add the fourth.

[00:58:01] [SPEAKER_00]: And then the last step is sharing this publicly.

[00:58:04] [SPEAKER_00]: Put these values on your job postings.

[00:58:06] [SPEAKER_00]: Put it in your sales decks with your customers even, as well as conference presentations.

[00:58:11] [SPEAKER_00]: Not only does it humanize your company to your audience and makes it more relatable, it also helps you attract or repel your people.

[00:58:21] [SPEAKER_00]: Attracting customers, colleagues, and community that are value aligned is something that I believe can be extremely effective in creating flow states environments where people thrive.

[00:58:33] [SPEAKER_00]: I do believe we've seen that it minimized our attrition for our team and our customer churn as well.

[00:58:41] [SPEAKER_00]: So for those of you who are curious about it, check out our episode from August 6, 2024, where Bailey and I talk about this a little bit more.

[00:58:48] [SPEAKER_00]: It's called Three of Nine Critical Conversations, How Do We Work as a Team?

[00:58:52] [SPEAKER_00]: And if you want to chat about this more, head to integral.io slash convergence or send us a note on the convergence.fm webpage and we'll get in touch with you.

[00:59:04] [SPEAKER_00]: I've also included a few other links to episodes or panel discussions where I've gotten to talk about this with folks a little bit more.

[00:59:14] [SPEAKER_00]: Hope this is helpful for you.

[00:59:16] [SPEAKER_00]: Hope it helps clarify and make actionable how you can understand what your values are, put them down on paper, share it with your team, and then operationalize it in your organization to continue on your journey of building a thriving team that delights each other as well as their customers.

[00:59:36] [SPEAKER_00]: Thanks again for listening, folks.

[00:59:38] [SPEAKER_00]: We will be back on Tuesday with our next episode.

[00:59:41] [SPEAKER_00]: Have an awesome week.

[00:59:51] [SPEAKER_00]: Thank you for joining me on the Convergence Podcast today.

[00:59:55] [SPEAKER_00]: Subscribe to the Convergence Podcast on Apple Podcasts, Spotify, YouTube, or wherever you get your content.

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