The Most Founder Mode CEO Working Today Isn’t the Founder: Opendoor’s Kaz Nejatian

18:54Brian Halligan:ask you about that a lot of people say you should work on your strengths and a lot of other people myself say higher around your weaknesses work on your strengths are you do you ever work on your weaknesses like you got lots of feedback over the years you didn't I don't link into your strengths

19:08Kaz Nejatian:I don't. In fact, I think this is like one of the things that you get wrong early on in your career. Me too. You have a meeting with your manager and your manager will give you some feedback about what you've done over the last six months. And then you by naturally say, oh, I am bad at this. I need to get better. But what you actually have to ask yourself is, is the fact that I'm bad at this the reason I'm good at everything else?

19:28Brian Halligan:Yeah. Right?

19:30Kaz Nejatian:So I have always basically throughout my career had someone whose job it was to round me out. Yeah. Pre-trains on time.

19:41Brian Halligan:Yeah. When you joined Open Door, you published a blueprint that I read, which is kind of a user manual for working for CAST. and it read to me that's part of where the founder but it rates me as a founder mode kind of manifesto but you know kaz ish um most ceos are quirky and most founders are quirky i was certainly quirky still am and should all ceos write our user manual to themselves yes 100 but that's that

20:18Kaz Nejatian:that blueprint is about a decade old oh okay you've had that for a while i've changed words in it like maybe like a dozen words but it's about a decade old like i've had i've had it for a while and i've given it to i published the shopify i've given to other people got it um and like the reason is like look if you're a founder type you owe it to everyone around you to tell them who you are strong attract, strong repel. Like, if you go to a restaurant, if you go to an Italian restaurant and you complain the sushi is bad, that's your fault. You went to a wrong restaurant. But if you went to a restaurant that says restaurant and said food is bad, that's the restaurant's fault.

21:07Kaz Nejatian:My job is to tell you what kind of a person I am so you can opt in or opt out. I intend to change the company. I will work on myself all the time. We all should. We all have flaws. But I don't intend to fundamentally change who I am as a person.

21:24Brian Halligan:Number one on that list caught my attention. It was, I got your back and I trust you, which gives me warm fuzzies inside. um but at some point you work with people and they let you down or they didn't meet your bar or they didn't scale and like a lot of ceos talk about you know hire slow and fire fast yeah if i read between the lines it looks it sounds like you hire slow and fire slow is that fair do you

22:00Kaz Nejatian:have a contrarian view on that no i think that says something along the lines of i think the sentence goes if we work together i have higher trust than most because we're on the same team it doesn't say that you will be on the same team we've been on the same team forever like i i start i i find that it is easier um toby had this concept which i thought was wonderful called Trust Battery.

22:28Brian Halligan:Yes, I totally stole that from him.

22:31Kaz Nejatian:It's just deeply useful. And his point was, hey, I usually start with a 50 % trust battery with you. As you build trust, I increase it. And then as you go do. I thought about this a lot. No, I don't. I usually probably start with 75 % trust in you. I see.

22:47Brian Halligan:I see.

22:48Kaz Nejatian:But I deplete it much faster than... I see. Okay. Because I want to start by being able to allocate risk to you more than you are comfortable being allocated risk to early on. So I think when I say I got your back, I mean, go take the risks. I'm underwriting you to take the risk. But otherwise, I think what happens is you learn too slowly about what people are. Like if you were dropped into a hockey team growing up, like, hey, you're the new left winger on this team. it's a really bad idea for you to assume uh the center man is a bad hockey player it's just bad because you will overcompensate it for the person that you without knowing you're much better off assuming they are very good at their job and i'm doing your job well that's what i mean i mean when i start i assume you're here therefore you're good at your job but i i have a much um different battery depletion note than most people look look is if you look at OpenDoor's executive team since I started, from two quarters ago, so two quarters ago before I joined, there's one member of the executive team left at the company.

24:04Kaz Nejatian:That's just strong rappel, strong attract part of the job. Turns out there was a lot of strong rappel. Yeah.

24:14Brian Halligan:You brought up Toby. He's on my Mount Rushmore of founders. I think he's very special. what can CEOs other than the trust battery thing which I think is great what can CEOs learn from Toby?

24:29Kaz Nejatian:There's a concept in finance called discount rate what is a discount rate on anything and most corporate types apply a very high discount rate to outcomes i.e. if something's going to happen in five years they value it 20 % of value um toby applies a discount rate of zero basically to the future where the toby like is built for the long term in ways that are very difficult to do in a modern public company like he's determined to care about what happens 10 years from now as much as what he cares about what happens now okay very long horizons very long very long horizon and it's deeply useful to think about it because I think what actually matters generally, I think there are two useful timeframes to think about if you're managing a company.

25:23Kaz Nejatian:This week and 10 years. No.

25:26Brian Halligan:Okay. Like this quarter is actually a deeply useless measuring period.

25:32Kaz Nejatian:Okay. So everyone's got it wrong on the quarters. All right. Tell me why. I think weeks are very important. Like a week is an incredibly important period of time because you can get a lot done a week. You can validate most ideas in a week. You can ship most things in a week. But 12 weeks, in my experience, is not that useful in really anything. I see. It's just not immeasurable. It's also like not cohorts don't bake enough in 12 weeks. Like, you know the outcome of most things either in a week or in a very long time.

26:04Brian Halligan:Okay. I like this. What else can people learn from Toby?

26:10Kaz Nejatian:Building companies outside Silicon Valley is a deeply useful thing. Like you guys built HubSpot outside Silicon Valley. I think partisan HubSpot was successful is because it wasn't in Silicon Valley. I'll give you a thesis on that

26:23Brian Halligan:because Shopify and HubSpot started around the same time. We both started in SMB. And I don't think either company had a choice because Silicon Valley is so allergic to SMB that if we were in the Valley, we probably would have either been talked out of it or wouldn't have been able to raise money. So I don't think it's a coincidence that, you know, two pretty big SMB companies get founded in Canada and Boston.

26:51Kaz Nejatian:Yeah, I think, I mean, by the way, I think the same is true for real estate software. Okay. Relatively allergic to it. Yeah. I think this is partially because despite the fact that most Silicon Valley type understand the idea of cohorts and how they bake. Yeah. they understand it theoretically, but not deeply. Like the cohorts of HubSpot and Shopify, and by the way, Opendoor, just bake differently. And like most, even like, this is why Silicon Valley, by the way, loves enterprise sales companies. This is deeply loves enterprise sales because they're like, I understand that model perfectly. I understand the like the ideal customer, like ICP of the ideal customer profile.

27:43Kaz Nejatian:So Silicon Valley loves enterprise software and consumer. Like there are two things that are like, ah, we don't know how to understand, how to underwrite these things. But like churn is something Silicon Valley doesn't genuinely understand. And the other thing Silicon Valley doesn't really understand, which is odd, genuinely odd. I'm going to tell you, So give me some rope here for a second. Toby once asked me to take over Shopify shipping. He's like, hey, you're going to run Shopify shipping. I'm like, great. The first thing I did was I went and read the U.S. Postal Service Act, which was written in the 1700s.

28:22Kaz Nejatian:I'm like, I'm going to go read this thing that is the basis of this whole system. Okay. I need to understand how the system works. Yeah. I'm deeply curious about the history of things. deeply curious. And one of the things I have come to believe is that most successful companies in the history of the world are built on a first derivative of the core business. Let me give you an example. Union Pacific Railway, massively successful, made more money selling land and homes than carrying stuff on the railway.

28:56Brian Halligan:Yeah, and Shopify started as a SaaS company, as a payments company.

29:01Kaz Nejatian:Yeah, I mean, I think it's like a generally a merchant services company. Yes. But yeah, like payments, tax, billing, like ads, a bunch of other stuff. But this is actually the core, most of the most successful companies in the history of the world, Google. Like you search, you get ads, like first derivative. First derivatives are what build enduring companies. And it's something that also misunderstands first derivative businesses because the CAC and LTVs are slightly harder to calculate.

29:33Brian Halligan:Yep. Just inside, I want to get to the shipping thing. At one point, Shopify made a huge bet, like, we're going to buy warehouses. We're going to have inventory. Like, we're going to do the whole e-commerce stack. And you ran that play for a while. And I was watching from afar, like, oh, that was an impressive move. And then at some point, it said, actually, we don't want to do that. And you divested in that business. You just take me behind the scenes to the discussions. and when you made that bet. And then even more importantly, behind the scenes of what happened and how long did the discussions take and what were the protagonists saying when you decided, hey, we were wrong.

30:13Brian Halligan:Let's get out of this business. That was a very interesting chapter for you guys. And I admired it.

30:21Kaz Nejatian:The decision to get out of it took about three weeks, I think. Four weeks. Where did it start?

30:28Brian Halligan:Did somebody send an email to Toby

30:30Kaz Nejatian:be like we were all wrong about this so look i took over as a chief operating officer at a company uh in i think september of 22 and we sold a cut we sold publicly sold logistics in may of the following year it's like well understood these sales probably takes three months to negotiate so like you can back figure out when the decision got made so you thought you thought it was a bad

30:53Brian Halligan:call in the first place you took over the new job like okay i think we should unwind this i think it's odd to hold your past self guilty i think you should try very hard not to hold your past

31:03Kaz Nejatian:self guilty because you made the best decision you could have made at the time yeah you also owe it to yourself to make a brand new decision every day on facts they learn and shopify needed to focus way more on its core business and less on side quests and toby just genuinely was like

31:21Brian Halligan:yes we should go on like main mission and what caused it did you feel like your main business was getting wobbly the cohorts were worse get a new competitor like where was the inkling and what was what was the meeting like when you were arguing about this or you didn't even argue about

31:37Kaz Nejatian:it no it wasn't there was no table pound table fisting thing yeah it was a place where we had honest conversations frequently uh no i think what happened was look facts on the ground changed When Shopify got into logistics, there were no good ways for a small business to do logistics. There just wasn't any. It was Amazon or bust. In the four years since Shopify started, a bunch of very good companies got started and were very good. Walmart got into space. DHL got into space. All the FGPLs. The alternative to us doing it changed. Yeah. Like, we were not jealous of anyone else's margin. We didn't get into this business because we're like, yes, margin.

32:23Kaz Nejatian:That's not how great businesses are built. So people we needed to serve didn't need us anymore. So we're like, okay, great. We don't have to go buy concrete. Great. Concrete is annoying. Let's go back and deal with electrons because electrons behave differently.

32:39Brian Halligan:Was there a shit fight internally, I guess is my question. The person who owned that initiative pushed back hard. No.

32:44Kaz Nejatian:It was incredibly, you'd be surprised how easy it was to get everyone aligned and execute against it. I saw the outside as a whopper.

32:56Brian Halligan:I was so impressed that you were like, we made this big bet. You know what? You were wrong. Let's not continue to throw bad money after bad money.

33:05Kaz Nejatian:ShopLite is an incredibly good company at successfully discovering things that don't work and being honest with itself.

33:13Brian Halligan:And is that Toby? Tobey strikes me as like, he's one of the very few people on the planet that makes me a little bit nervous. Very few people like that. And then he is just, he's kind of stern and he's kind of tough and he's very, you know, does that come from him?

33:28Kaz Nejatian:He's not that stern generally. I think he's a kind, wonderful human being. But Shopify is deeply committed to truth above all else.

33:37Brian Halligan:That comes from him, I assume.

33:39Kaz Nejatian:Yeah, of course, of course. I mean, companies are exoskeletons that they're leaders if they're good. I like that. Like, very real thing. Like, every company must be an exoskeleton of its leader if that leader is good. Yeah. So Shopify is an exoskeleton of Toby. Yeah.

33:56Brian Halligan:Okay. You work for Zuckerberg and Toby. How did they rhyme and how did they not rhyme?

34:05Kaz Nejatian:I mean, I worked with Toby much more closely than I did with Mark. But I knew Mark and I know Mark. they're both deeply product focused deeply product focused in like ways that are generally impressive um they're both very very um long-term focused in ways that are just generally impressive they've both built companies the hard way like generally like it's like like if you look at mark lost his entire executive team after it turned down the yahoo acquisition like all his friends put on him yeah like how many people survive that yeah like no one survives that like no one um but they built companies a heart and they're very they're very similar in that way generally now i think uh mark is more of a product manager at heart and toby's more of an engineer at heart so that that manifests itself differently in how conversations go well you end up having lots of conversations with toby about uh the ship at api um but they're very similar people

35:17Brian Halligan:okay how did it all go down with the open doors kind of cruising along uh very low market cap and take like what the hell happened keith and the founder and you got together and took over this public company like take this behind the scenes what the hell happened

35:35Kaz Nejatian:there i'm generally comfortable saying this i don't know how this could have happened without some someone else's plan like i was flying back home from dallas texas in february where i was hosting like this event at shopify called the top 100 like typical corporate event and i for fun take apart companies like i do like it's one of the things i do for fun is like learn about history of companies. And on that flight, for no reason at all, generally no reason at all, I picked Opendoor. I'm like, let me learn about Opendoor. Okay. And then I became, and then I spent every weekend for like four weekends in a row, like modeling Opendoor, taking it apart, thinking through it, thinking through the product, using the product, and got to a point where my wife and I at dinner were basically only talking about Opendoor for a few weeks.

36:30Brian Halligan:you sound like a barrel of laughs by the way yeah my poor wife

36:36Kaz Nejatian:and then I texted Keith in March and you knew me? I knew Keith

36:45Brian Halligan:your boy from Coast Adventures

36:48Kaz Nejatian:I messaged him saying hey I've talked to my wife we're going to go all in and we're going to spend our entire net worth to take open to a private like my wife and I are going to do it like sell everything spend every last thing and a half, leverage ourselves as much as we can and take open door private

37:07Brian Halligan:and what was the company worth at the time?

37:10Kaz Nejatian:a few hundred million basically he said do you want to do it with me? like that was my point to him and he said yeah let's talk about it and then we had one conversation and then the company did this insane genuinely insane financing that basically made it impossible to acquire the company and take a private. It was just like, and my plan wasn't to run the company. My plan was just like stay at Shopify, join the board of the company and just like yell at them over like product choices they were making. Yeah. Because I generally never thought I would leave Shopify. I just really liked the company.

37:51Kaz Nejatian:So I didn't, but by April, I mean, I said I should have kind of given up on it. and then I got a call one Sunday from Paul Deversa, who's a recruiter and Paul had been trying to convince me to go be a CEO of a bunch of other companies and I had always said, hey, I'm not interested I love my job and he called me on Sunday and I picked up the phone like, Paul, I appreciate you I'm with my wife I haven't seen her for a while I'm not interested whatever it is, I'm not interested he said, Kaz is a public company CEO job and I said, Paul, I'm not interested. And then that's a takeaway. I said, unless it's Open Door.

38:28Kaz Nejatian:Okay. And he said, it is. How fast can you get to New York? I was in New York in about five hours after that. And from that conversation to me being announced as the CEO of Open Door was maybe 15, 16 days.

38:43Brian Halligan:And behind the scenes, Keith and Eric, who's the original founder and Keith's the original investor, were they just baking on it and did they reach out to paul and say we want to hire kaz as our ceo

38:56Kaz Nejatian:like how did what what the hell happened yeah i think keith and eric had essentially decided they were gonna like rescue the company yeah and they need they need a ceo and i actually don't know how the conversations went um because i think they were trying to for a while but i um I should actually ask Keith how that conversation went. But, yeah, my input to it was a phone call on a Sunday from Paul saying, hey, like, are you interested in this? And it generally happened very fast, like two and a half weeks, I think, was the entire time.

39:33Brian Halligan:And like mechanically, you three said, all right, we're going to throw it to CEO. Did you buy all the shares up? Like, how do you take over a public company like that?

39:44Kaz Nejatian:It doesn't, I haven't seen this. I don't know. This is a common occurrence. What happened was I met with the existing board. The existing board had a CEO search. They said, hey, under what conditions will you take this job? And they were incredibly kind and generous. The existing board was desperately trying to fix the company. They realized that there had been change and the previous CEO had left. and so I told them hey like I want the fallen board members on the board and I want you to promise me that you will not care about what it looks like for a while because like I'm not a caretaker type I intend to build product for for a living so it was actually very surprisingly easy conversation it was it was whirlwind and I remember it was like the night before the announcement I was with my family in New York.

40:46Kaz Nejatian:And it was 3.30 a.m. And my wife was sleeping in the hotel room, so I couldn't be in the hotel room. But I was on a call pacing up and down Central Park West because I didn't want anyone to overhear me talking because I was talking about a public company. Like, figuring out how to do this. So it was intense, just generally intense. but not hard. It was like everyone was trying to solve a problem.

41:14Brian Halligan:And so you three didn't buy the company. You all joined the board. You obviously got a bunch of shares. And I guess the other two did as well.

41:22Kaz Nejatian:Well, they invested. They invested in it. So they did a pipe and they invested in the company. I see. And what happened to the board? A few of them remained. A few of them left. It was like a refresher of the board. The board is excellent. Just excellent board. now. I'm very happy with them. I would put a hard board against any board.

41:42Brian Halligan:You talk about it as a refounding. Should more public companies do this?

41:49Kaz Nejatian:Yes. Yes. I think it is like you are, look, I think professional managers are good at managing a decline. A slow decline. It doesn't have to be a big decline. But the exothermic power that leads to extraordinary outcomes is not found in professional managers. It just isn't. So what you end up having is these periods of like up and then very slow decline and eventually General Electric happens, right? This like wonderful like American company and it didn't have a refounding moment and it is now what it is. Whereas Microsoft has had a refounding, for example, like a very obvious one.

42:34Brian Halligan:Yes. I don't think to use that word but that's very clearly what happened yeah um so the question is not whether

42:41Kaz Nejatian:the founder is there or not the question is whether the founder seat is taken or not like is someone occupying the founder seat yes or no um and otherwise because what happens now look i don't think every company can do this i don't i think some companies are structurally not set up for this most conglomerate are not like if you're conglomerate it's very hard to do this But if you're a product company, you require exothermic pressure on the system. And it has upsides and downsides. It can go well or it can go poorly. But it is certainly not managing a decline.

43:24Brian Halligan:One of the things that surprised me was you joined. you hadn't really even said anything and the market cap went up by i don't know six seven x i know you're incredibly bullish about it and you're a very long-term thinker about it and you think it's an amazing were you even surprised about how much the stock price went up when you

43:47Kaz Nejatian:joined this will be odd brian but i generally honestly don't think about the stock price i really don't it's very and i know it sounds odd to say i don't think about it is not i think what I do is correlated over a long time with the stock price and not in the short run. Like I, I have talked to a company about the stock price twice since I joined. And both times has been to say something along the lines like this, the stock price going up 15 % doesn't mean we're 15 % smarter. It just doesn't. Like, um, what it means, our job is to create value and solve problems for our users. If we do that well over a long enough period of time, the company becomes valuable.

44:35Kaz Nejatian:I don't genuinely understand CEOs that have the stock price on a Bloomberg terminal in their office. I believe I owe a duty to our shareholders to deliver value to them. Or they've got CNBC or Bloomberg on because it just creates a knot in your stomach in such short-term behavior. here's like watching espn does not make you a good professional quarterback no it doesn't watching cnvc does not make you a good professional ceo it just doesn't like i think it makes you

45:09Brian Halligan:worse because you start to think very short term about things yeah yeah look i i owe i viewed as

45:16Kaz Nejatian:my duty to deliver value for shareholders i'm not denying that it's their money like their own shares the company into our company. But I think our shareholders should expect me to deliver value over a long period of time and to be mostly agnostic to day-to-day.

45:33Brian Halligan:Yeah. Okay. In Silicon Valley in tech, turnarounds are extremely rare. Like very rare. If something starts going down, it doesn't happen a lot that it turns around. Why is it different?

45:50Kaz Nejatian:I mean, there are examples of this. There are examples of successful turnarounds. There aren't that many, I agree with you. But because most of the teams that have tried to do a turnaround haven't done it like this. The most successful turn-on, obviously, is Apple. Like, very clearly, like... And by the way, Apple was in much more trouble than Opendoor is today. Like, objectively more trouble. Like, worse position. Yep. Like, I don't think there's that many lessons to be learned about why professional CEOs fail. I think management types can't really, like I said, slow decline or slow climb, not significant change in direction.

46:32Kaz Nejatian:That's just not.

46:32Brian Halligan:So you think the problem people, so many venture capitalists are holding companies that are going sideways. And you think the playbook is, okay, bring someone in, but it's refounding and really shake it hard. Do it like Steve Jobs. Don't make incremental change. Don't change pricing and packaging. Don't spin out one thing. Look, I think the going state of companies,

46:58Kaz Nejatian:the existing inertia is real. Yeah. And usually when things are going sideways, it's not because one thing is going poorly. It's because you're in a death spiral.

47:10Brian Halligan:Yeah. Right?

47:11Kaz Nejatian:And what needs to change when you're in a death spiral is everything.

47:16Brian Halligan:Yeah. Got it.

47:17Kaz Nejatian:Everything must change because the alternative is bad. And what happens, unfortunately, sometimes, is managers are incentivized to delay death. But I think this is actually why RSUs are incredibly harmful to CEOs. I think professional managers, when they get RSUs, they're incentivized to delay the inevitable sometimes.

47:45Brian Halligan:I couldn't agree more. I liked the world when it was ISOs.

47:49Kaz Nejatian:Yeah, I think it's a very bad change in structure. Management teams should be incentivized on outcomes, like performance-based over everything. Because I have zero incentive to manage a decline. I just don't have one.

48:03Brian Halligan:How did you all decide to pay you? Is it an Elon-style package? Not that size, but the structure. I mean, what I wanted was I asked for a salary of a dollar and options.

48:21Kaz Nejatian:I'm like, I would like options.

48:22Brian Halligan:Okay.

48:23Kaz Nejatian:But the combination of Delaware and SEC have made granting options in this particular way very difficult to public companies. So we essentially like constructed a package that looks a lot like just options.

48:38Brian Halligan:Use PSUs.

48:39Kaz Nejatian:We have PSUs. With like PSUs have zero value below a certain price, some value above a certain price. so i kind of like how it looks like some of them have like strike prices that are high some of them like just just they're very similar in that structure i think this is actually like the right alignment between me and the shareholders um because otherwise like it's very look wall street is full genuinely full of um like harvard mba types who have driven the companies to zero while getting rich. Like, it's just actually very, that's terrible, man. It's terrible because you want companies to matter.

49:22Brian Halligan:It's not all companies. Let's not exaggerate.

49:25Kaz Nejatian:No, no, no. You want companies to matter. You want companies to matter. Like, any company needs to matter. Now, I don't think all Harvard MBAs are terrible. Clearly not. Very clearly not. But I do think there are too many examples of people who got rich destroying companies.

49:41Brian Halligan:I agree. And I think the compensation plan are all wrong. You're coming into a company that was probably not AI native, was probably not product oriented. And you said something interesting. You want to be the most aggressive software company ever. I'm curious about that. I'm also curious about how do you take what was likely a very non-AI company and make it AI native?

50:07Kaz Nejatian:Can I tell you the result of what happened? We had a company-wide hackathon 10 days ago, I think. And we have people we call HPMs. These are people who essentially renovate homes. They're people who manage renovation homes. One of them wrote a piece of software. There's a guy who was essentially a GC. Wrote a piece of software that automated away his entire job. And he's now a manager of a bunch of pieces of software to do that. This guy had never written a piece of code in his life before. like was not opened up cursor opened up gum loop and like we helped like we had we had coaching we had like the folks from cursor and gum loop and opening i were in our offices teaching people how to do things so end result is that i think everyone at open door uses ai every day now and you think that the hackathon sparked that i think hackathon was us testing whether we had built the muscle over the previous 10 weeks.

51:06Kaz Nejatian:What changed was like, look, I had a very honest conversation with the company, which is, hey, like the first line in your job description is you default to AI. And what do I mean by you default to AI? Because there's a very real thing that happens. Every company has a performance management system. All of us do. Most companies lie about the purpose of performance management system. Like we're a professional sports team. the job of the professional performance management system is to tell you whether you get to play on the team or not. That's the job. That's why they come to it. So I will evaluate people at Opendoor about on whether they default to AR or not as the first question in the performance management system.

51:47Brian Halligan:Got it. Okay. That's a good way to do it. So I'm listening to this pod. I'm a VP of XYZ at a public company. I want to do what you did eventually. What advice do you have for people working in the middle of HubSpot, in the middle of Facebook, in the middle of whatever Google, if they want to be you someday?

52:16Kaz Nejatian:I didn't plan to do this. There's no 10-year secret plan for Cassia, public company CEO. That just doesn't exist anywhere. What I did was I decided I would have a career rather than a job. Like, I didn't really ever care about how much I got paid. I generally didn't, really, honestly.

52:38Brian Halligan:What's the difference? You wanted a career, not a job. Just unpack that.

52:41Kaz Nejatian:So a job is something you do for someone else in order to get paid.

52:46Brian Halligan:Yep.

52:47Kaz Nejatian:A career? A career is something you work on every day for yourself. There's a very real difference. There's a very real difference in how you react to the thing. And most people have jobs. And that's totally okay. It's totally okay for most people. Most people are like, hey, I optimize my life for something else other than what I do at work. That's totally okay. But I don't. I optimize my life for my career. And my wife optimizes her life for my career. And I optimize their childhood for this thing we are doing together as a family. My kids know what Open Door is. like I have a conversation about building products with my six-year-old and we have like this is what we do this is our conversation this is like our dinner conversations like our job as a family we're all in as a family like we're not like this is not a this is our main mission that's that's outcome of years of essentially saying I will give a lot of fucks about the thing I'm doing at work every single day i will care a lot and i will self-identify with my work not with my ideas with my work this and this by the way is very odd because like i've um the advice you get when you're young is almost certainly terrible um my advice to you if you're young is work all the hours like if your manager is letting you work work just work all the hours because otherwise you will not become good at the thing that is your craft, your discipline.

54:22Kaz Nejatian:If you were a woodworker 200 years ago, you'd be in the shop learning what it feels like to cut a piece of wood. The feeling would matter. And you need to discover when you are young what your breaking points are. And the only way you can do that is working hard. Tom Brady threw a lot of passes before he got good.

54:43Brian Halligan:and do you think people young people should follow their passion or is that kind of bullshit i heard scott galloway recently talking to a bunch of students he was like a lot of rich people look back and they say follow your passion but they really didn't they were just practical and they dug in on something that was nasty uh i think this way

55:08Kaz Nejatian:you should look for. You should think, how can I be of service to the world? How can I be of service? And if you think of it like that, I think things usually end up working out okay. If you think, what can I get? Things usually end up working poorly. Like, and this is like true in relationships, by the way, as much as it is in your career. Like you want to view yourself as a net addition to other things around you.

55:39Brian Halligan:Okay, you've talked about your family a bunch, your wife a bunch. I've seen you're tweeting about it. I'm 58 and I've never been married. Why am I doing it all wrong?

55:49Kaz Nejatian:I don't know if you're doing it all wrong, but if the average person was doing what you're doing, they would be doing it wrong. I think the averages are important, but there are people on the extreme and to whom rules don't apply. I wrote a book about this. It's called Get Married.

56:04Brian Halligan:Why should people get married early? and why should they design their marriage like yours? You've got an unusual setup there.

56:10Kaz Nejatian:I don't think everyone should design their marriage like me, but I think most, the book I wrote essentially is the health, wealth, and happiness impacts of marriage on men. That's what the book is about. I wrote about, I'm a man, so I wrote about men. The data is undeniable. Yeah. There are types of cancer where being married is as good an indicator of survival rate than chemotherapy. be. That's a very real thing. Now, I'm not saying all cancers. Obviously, I'm not stupid. But if you live in the United States or Canada, if you're the following three things in the following order, your odds of being unhappy or poor are almost zero.

56:54Kaz Nejatian:That is, graduate high school, get some work experience, get married before you're 30. If you do those three things in that order, the odds are like you'll have a real happy fulfilling life now that's not for everyone like you should know yourself and be good but you should also be honest enough with yourself to recognize that the odds are you are not special the odds are the thing that has worked in history for humanity will work for you now some people are different like i'm different in some ways than everyone else brian you're different in some ways possibly in this way than everyone else we undervalue as a society the importance of marriage and more importantly the importance of kids like i am a better ceo because i have kids tell me why um it is a lonely job it is deeply lonely and my kids know the mission of open door and why i do what i do and they ask me about it and are proud of me for doing it and we have conversations that have nothing to do with work or something to do with work but it makes the hard less hard i'll tell you um a story there was a day at shopify where we did a riff and i insisted that i would exit the most people i would have more conversations than anyone i had rented a an office in palo alto because i was in the office in that office at 3 45 a.m i think pala all the time i started having one-on-one conversations and i had i finished around 7 p.m pala all the time i had not the office and i hung up my last uh hangout and i burst out crying yeah just like burst out could not stop myself and i walked we were at an airbnb i walked to the airbnb where my son ran and gave me a hug and it was like

59:03Kaz Nejatian:like daddy mode kicked in and i was just it changed the day that day will still go down in history as the worst day of my career.

59:12Brian Halligan:Yeah.

59:14Kaz Nejatian:I felt I felt a deep pain in a way I will, I generally don't think I will ever recover from it. But like, I could do it because of my son and because of my family. That was deeply painful.

59:34Brian Halligan:Alas, you've had good karma. Yeah. Talk about karma and I'm going to give you like I was just listening to Ben Horowitz talk about how it's kind of the opposite on karma. He's like, life is deeply unfair. Get over it. And like, he didn't say he doesn't believe in karma, but I feel like, I happened to be listening to him the other day and I read about your karma thing. Talk about karma.

59:59Kaz Nejatian:Life's not unfair. It just isn't. Okay. You are destined for something. Your job in life is to discover that destiny and discover your mission. and you need to work on that and work on yourself until you discover it. And I think that could be different for anyone. And the more good you do, the more good you get back. Now, it may be difficult. I'm not saying it's easy. It may be difficult. It is not unfair. Look, I'm more comfortable with this because of the thing we talked about at the front of the talk. Yep. But there's a deep purpose that I have. And my purpose is to make it such that the average family can afford a good home and raise a good family.

1:00:46Kaz Nejatian:And so we can reduce the friction and the cost of homeownership. That's deeply fulfilling. It is difficult but fulfilling. And I find that difficult and fulfilling are highly correlated.

1:01:01Brian Halligan:Yes, I do too. Okay. I wish you great karma in your new venture. I appreciate you coming on the pod. You are a very, very unusual, interesting, fascinating person. Thank you for coming on.

1:01:14Kaz Nejatian:Thanks, Brian. I appreciate it, man.

1:01:16Brian Halligan:Okay. I hope you liked that episode with Kaz. I think he's awesome. He's one of the most intentional people I've ever met. Never mind intentional CEOs, intentional people. His leadership style, the way his family works, how he defines success, pretty much everything. He overrides every default and he does it over and over again. Now, I actually think this is a very good podcast for existing CEOs. If I were an existing CEO of a company, it's an interesting time to be a CEO. I think I would approach it and pretend like if today were my first day as an outside CEO joining my company, I were unencumbered by all the good, bad and different decisions I've made, all of the baggage, all of the stuff that's happened.

1:02:05Brian Halligan:What would I do if today were my first day as that outside CEO? That's the way I think people should be thinking today, particularly with all this going on in the world. And you don't do that, you run the risk that the board's going to do that for you. And so I like his playbook around that. He's an interesting guy. It was one of those conversations that really kind of made me re-examine how I'm showing up, not just at work, but everywhere, and re-examining my own defaults. I wonder if you had the same reaction, like, what are the defaults that you're rethinking based on this? Anyway, I hope you liked it.

1:02:37Brian Halligan:If you want to chat about it, I'm at bhaligan on X. Let's keep the conversation rolling.