20VC: Top Three Lessons from Working with Jeff Bezos for 23 Years at Amazon, How the Best Leader Hire, Fire, Prioritise and Make Decisions & How to Be Responsible for 1M Employees and Be a Rockstar Husband and Father with Dave Clark @ Flexport

0:00I think what Jeff is good is he is one of the best simplifiers, if not the best simplifiers I've ever met. He can context shift incredibly well. He can quickly sort out the 90 % that isn't hard. He doesn't need to worry about because somebody will figure out. And he can very quickly narrow down to the 10 % that requires sort of his level of intellect or a senior level intellect to figure out how to solve and what's most important. Welcome back to 20VC with me, Harry Stebbings. And this show is just freaking awesome. I mean, this is one of the best operators of the last two decades. Check this out.

0:33When this guest left his last position, he was responsible for over 1 million people. A million people. Dave Clark, CEO of Flexport. I'm so excited to welcome you today. Now, prior to joining Flexport, Dave began his career at Amazon in 1999 and he worked his way up to become the CEO of Amazon's worldwide consumer business in 2021. There, he spearheaded Amazon Robotics and grew the company's logistics divisions to include Amazon's own planes, trailers, last mile delivery vehicles through Amazon's own delivery network. And I want to say a huge thank you to Ryan Peterson and Kelly Cheeseman for some amazing questions and suggestions today.

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3:28Three, two, one, zero. You have now arrived at your destination. Dave, I am so excited for this. I heard so many great things from many different people, from Ryan Peterson to your friend Ollie beforehand. So thank you so much for joining me today. Glad to be here. Thanks for having me. Not at all. Listen, I was first struck when I saw that you spent 23 years at Amazon. Now, this is loyalty that we don't see today. What are one to two of the biggest lessons that are maybe non-obvious that you took from your time at Amazon and how they've impacted you as a leader? Yeah, it was 23 years. You know, I came straight out of grad school and worked up from that to be CEO of the consumer business was a hell of a ride.

4:09And I did. I learned a lot. And when I think about the things that, you know, a lot of has been published about Amazon and about the way Amazon operates and runs its business. But I think some of the things that I think have been really important to me over time is this idea of giving people an opportunity to stretch beyond what they think is possible. When I think about the career I had, much of why I had it is because people let me do things that I had no business doing and had a hard probability of failing at, but then ended up finding a way to be successful. I think people too often put limits on what they think their people are capable of out of fear of overstretching them in some way.

4:46How do you determine what to give them where when they don't achieve it, it won't mess up the business? A lot of things actually, if not done right, will be problematic. And that is why people don't give them to them in the first place. How do you determine what you can give and mess up on versus not give? Well, some of it's a, you know, this is a fulfillment center and we're picking and packing boxes. And there's a very clear, defined process on how to do it. It needs to be done the same way every time. And in order to be safe for the employee and high quality for the customer. And you really don't want to like be going crazy experimentation on that every day and throwing big risk at that.

5:23The other is a big new project. You know, it's a thing that you want to try. It's a thing you want to build. It's not existential to the today. It's optimistic for the future. And those are great places to invest in people. You know, you just set a big audacious goal for what's possible and let them go off and run. Can I ask you, I love to hear it. But Dave, I manage many people today. They don't hit the goals that I set. and I give them stretch goals and they don't meet them. I guess my question is I've lost faith in a lot of people and a lot of teams because so rarely do they hit the goals that I set.

5:55What would you advise me? One, I measure on progression. So I look at it as how far down the path did we get? Almost no matter where, you're going to miss a number of goals, almost no matter what you set them up. If you say, I want to go a hundred yards, most of the time, at least some percentage of the time, 10, 15, 5, you're going to come short of 100. If you say we're going to go 150 yards, you may miss the 150 yards by 30 % of the time or even 40 % of the time, but you're far more likely to have 100 % over 100 yards. Your net gain of stretching farther is much better than setting something you think is a more realistic target.

6:33The key is you can't beat everybody up over you're not achieving those big hairy goals. Now, if you set a 150-yard goal and you go 50, then that's different. Usually the people you take bets on, my experience has been that people take bets on get much closer to that unless something really goes sideways. And probably at least half the time, they go further than the 150. Can I ask you, when you look at the people that exceeded the 150 or met the 150 stretch goal, when you review those hires, do they have things in common that were obvious in the interview process. I don't laugh, but for me, my best hires were the most boring in the interview process.

7:10They turn out not to be boring and brilliant. I don't know if it had the boring anecdote that's interesting. What I find to be most consistent is that the three biggest traits and maybe in order, they're simplifiers, they have great grit, and they're smart. Dave, you are setting me up. I mean, this is T down on the fair way i'm gonna swing for this one simplifiers what does simplifiers mean and how's that shown well there's people on your team where you're like hey i've got this idea and it's gonna sound nutty and i'm gonna tell you we're gonna do this that or the other we're gonna go to the moon next week and there's the one person who starts and goes through a an hour long all the things that are going to go wrong in very complicated ways of every little nuance that could happen of why that's the dumbest idea you've ever had in your life.

7:57And then there's the other person who's like, well, that's kind of crazy, but this could work and that could work and that could work. This thing over here is going to be super hard. So we'd need to get somebody to figure that out. It's the difference between the people who find ways not to do things oftentimes and people who find ways to do things. They separate the hard from the easy. Almost all the problems that you think are too complicated to do are like 90 % things that aren't too complicated to do and 10 % of the thing is. And they quickly shed the 90 and they know exactly what to go to, where the real innovation or the real hard piece lives.

8:30And that's where they spend all their time. How do you test for grit? It's like increasing pressure. You basically start at one level alone. If you can handle it, then you get more and you get more. Strange one, Dave. What do you think makes you so good at hiring? You've hired hundreds and hundreds, if not thousands of people. What do you think have been your biggest lessons on talent acquisition? My favorite hires, I'm a little afraid that they're going to be way better than me. Hires I feel best about are the ones I feel the most nervous about being additive to helping. You know, like this person is going to make me ever work harder because they're going to be challenging.

9:03And I think too many people look for somebody who's going to do what they're told. You know, they want somebody who's going to fill the job of the now. And what I want is somebody who's going to fill the job that's going to be the job three years from now or five years from now. And that is going to be, you know, very unhappy if their world is just me telling them what to do on a regular basis. Speaking of amazing people around you, there are very common traits, sayings about Jeff Bezos. You've worked with him for 23 years. You have an unparalleled insight into how he works. What's one or two of the biggest lessons from working alongside Jeff that you don't think the world really sees?

9:36I think the world tends to think of Jeff as like Moses coming down from the mountain with Ten Commandments and is like, Shazam, here is what we should. And it's not like that. I think What Jeff is good is particularly skilled at. Well, I mean, he's brilliant. Table stakes is like he's just a brilliant guy. But he is one of the best simplifiers, if not the best simplifiers I've ever met, which is he can context shift incredibly well. You have a meeting this hour on AWS, the next hour on the consumer business, the next hour on labor and be perfectly in the mode in the moment, which a lot of people have trouble doing.

10:10And he can quickly sort out the 90 percent that isn't hard. He doesn't need to worry about because somebody will figure out. And he can very quickly narrow down to the 10 percent or whatever it is, the small slice that requires sort of his level of intellect or senior level intellect to figure out how to solve and what's most important. So he's hyper-efficient with the time that he spends because he doesn't waste time on the stuff that's easy. That's a decision that he makes. When it comes to leadership, kind of the ultimate element is decision-making. When you think about your decision-making framework, how would you describe your decision-making framework today?

10:48And has it changed over time? First, I do the things that will get me fired. And second, I do the things that get me promoted. So like on a straight-up prioritization mechanism, do the promotion list last. Dave, can I ask, can you take me to a wrong decision that you've made? And how did that change your mindset? I've made lots of wrong decisions over time. I think my batting average is pretty good, but I've certainly struck out plenty of times. I personally don't mind any of the mistakes I've made. The ones where we did something and screwed it up. The ones that linger with me are the ones where we didn't do it.

11:20Where my gut was, we should have done this thing and overthought it, or I was too cautious. and I didn't do it. It's the errors of omission to me ring much louder than the ones where I did it wrong. And if I think about the things that we omitted, I think we were late getting to the ultra fast shipping piece when we were at Amazon. And I think some of that was a decent amount of that was probably on me and looking at the cost. And there's not a real feasible, like one hour delivery profitable model, despite all the subsidized funding processes to the contrary. There's not a lot of great profitable models for that.

11:57And so I was always like, well, this isn't going to make it. But the piece I didn't put enough weight in was how much doing the effort actually sent a message to customers about the company and velocity. And so I think I held us back from that. We launched, you know, Prime Now, we were late to it, I think, because in part because I was conservative on this isn't going to work long term. What do you mean by doing the effort and what that signaled to customers? sometimes you know there are a lot of people who say they do things really really fast but that's really a small subset of what gets done but it's a marketing message and customers start to believe you know have a perception of speed about you as a company and there was a period of time there where you know i mean two day was like you get anything you want in the world basically in two days or less and like nobody was really competitive with it and then all of a sudden there were all these companies who were like well two days for boomers like i'm gonna get it to you in 15 minutes And that was where all the VC money went.

12:50It's where all the eyeballs went. And because of that, it made today the impression of today slow. And because we didn't have the other offer, I feel like it made customers think we weren't on the cutting edge anymore. The joy of this show is the natural discussion. Have a generation of VCs just lost money on last mile delivery companies? In my personal opinion, yes. The closest I think it gets to working as a model is if you can get to subscription and add. You knock just product cogs and margin with delivery costs. It's very hard to get the density you need. If you're paying net averaging$20 to$25 an hour for a delivery or an hour for somebody who's doing deliveries in the U.S., you really need to net five or six deliveries an hour to get good scaled costs there.

13:37It takes a lot of scale, takes a lot of density to make that happen. And so in order to economically make it work, you know, there's companies who do it, right? But there's a lot of ads. There's a tremendous amount of fees. My kids love Chick-fil-A and they get$30 Chick-fil-A sandwich and fries on a regular basis. By the time you pay the fees and the delivery fees and the tip, it's an expensive proposition. It totally is. How do you feel why the next year shake out then? I think it's going to vary by company. It's going to kind of depend. And people who will make it will have tremendous scale and have customers who are sort of inelastic in spend and can eat the fees and the subscription fees and the convenience and time are worth more than their money.

14:18Or they actually value that they actually put a financial value on their time and have done some sort of trade off. And the people without scale just won't make it. They'll go away. We mentioned kind of decisions there. And that's where that kind of conversation rooted from. You made a very big decision to leave Amazon after 23 years. You didn't need to respectfully. You had such a great career at Amazon. And then you come home and say to your wife, you know what? I'm going to move after 23 years and I'm going to be CEO of Flexport. What does she say? And what does that decision making process look like?

14:47She said it's about time, in all honesty. I consider it a sign I married the right woman, which is probably the most important decision I've ever made. But I was in a place where I just wasn't happy with what I was doing. I love the people I was working with. It's an incredible problem. But I had moved into a role where I was a bureaucrat in a lot of ways. You know, it was basically talking to government and PR and managing my boss. And I was not in a place where I was spending my time building. Amazon's still a builder-oriented company, but I personally was not in a place where I was getting to do that anymore.

15:18And I didn't start at Amazon with the intention of having a two-million-person workforce running one of the largest companies in the world. It wasn't my plan. And I like working closely with the team and getting into the creative work and building. And so I wanted to go do that again. That's where I get a lot of joy. When does it make the transition from operator to bureaucrat and politician almost? I think it started changing for me a lot, probably around 2015 or 16, when I took over leading the global ops team around 2011 or so in there, sort of a big elbow in the curve of around 2010, 11, 12, where FBA growth really took off, the fulfilled by Amazon, where third party merchants were moving their products into the company, really took off in that time period.

15:59And so we grew a lot over the next decade. And so we were an enormous operating company by 2015 or 16. We were starting to build out transportation networks. It really came to a place to where my life became much more about delegating and managing a lot of global issues and less about building. What did you learn at Amazon then that you've not taken to Flexport? And what did you learned at Amazon that you have taken to Flexport? What worked that is replicable and what didn't work that you don't want to do again? You really only know if you're customer-centric in a very, very hard moment where you're faced with doing something that the customer would like, but it's going to cost you a lot of money that you really, really, really don't want to spend.

16:37And that's when you discover whether you're customer-centric. And Amazon was that or is that. And we're going to make Flexport that. That's how we operate today. That's how we're going to build culture. What's an example of how Amazon is that just for people to resonate with and understand? You think about it as a damage or a return. For many customers right now, if you get an item, you say it's damaged. As soon as it registers that you printed the labels to the back, we're giving your money back. That's expensive. And there's fraud in that. But it's super positive for the customer from an Amazon perspective to be able to drive that efficiently.

17:08From a flex port standpoint, we've had the same thing like, you know, hey, this trailer got held up at the port for some duration of time. You know, a typical forwarder would say, well, it doesn't matter why or how we're going to send you a bill for that. You know, we're looking at that and saying, hey, these days of this, you know, we really should have done it out that we're not going to build a customer for that. That's on us. That's an operational defect we need to resolve going forward. It's really these tension points to where you could choose and the customer probably wouldn't know the difference or it would be equal to what competitors do.

17:39But you know, you can do something substantively better for the customer, but it's going to cost you money. What have you not taken to Flatsport that either did or didn't work? I think when I look at cultural history for me, I think, I mean, Amazon's a fairly intense place. You know, Amazon, I think you're as good as what you did yesterday kind of thing. There's not a lot of longitudinal stickiness in that way. And I'd like to think that what we're bringing is the intensity for customer, the intensity for process with a little more empathetic and a little more collaborative type of approach to engaging together.

18:12Speaking of that intensity, I spoke to Ollie before the show, and he told me a mantra of yours, make tough promises and keep them. What did he mean by this? Because he didn't expand on it. And how does it impact your thinking? You earn trust in people and you earn trust in customers. And, you know, it's easy to say something where to make a promise and not live up to it. Flexport right now has got a very aggressive a roadmap of products we're building for late 23 and 24. And we're going out. We haven't always historically delivered them, but we've put the pieces in place and we're going out and telling customers this product is coming in 23 and 24.

18:47And if you'll sign up to be part of this and be part of helping us develop it, you're going to get this. Those are hard promises because there are a lot of work and there's a lot of dependencies between here and there. But if you deliver on it, you earn an immense amount of trust. You get a lot of credit for committing to deliver something that they know requires a lot of work. And then when you actually do it, just following through on doing what you mean, meaning what you say is where trust is built. And the more you're willing to lean out on that for people and for customers, the more trust you build.

19:16When you have a new employee start, it could be C-suite, it could be anyone. Do you start from a position of full trust or is trust there to be built as well? I think people like emotionalize it too much. It's less about trust and more about ramping up on knowledge and experience. You know, it just becomes a bit of like, hey, we've been doing this for a long time. you've been doing this for now two days. If you don't have all the keys to the car and the house yet, it's just because you've been here for two days. We hired you, which by the way is like among the most trusting things you can do is to hire somebody and give them a big role.

19:46And sometimes people conflate ramping into things with trust. And I think that's just a bad sort of misnomer. But for me, whoever starts on my team starts with trust. I assume you're going to be great. And I assume you're going to have all positive intent in what you do. And my job is to help you be successful. You brought in some very senior leaders into Flexport when you joined. What are one or two of your biggest lessons when it comes to bringing in really senior talent to join you at the C-suite? I think of it as especially at big C-suite jobs or big executive jobs. I think there's a lot of mutual trust and mutual accountability in that hiring decision.

20:23I'm placing a big bet that you're going to come in and do the things you need to do to deliver in the company and you're placing a bet that I'm going to support you and then I'm going to live up to my end of the deal with help and support and resources and guidance and whatever is needed to enable you to be successful. And it's a two-way street, especially at a senior level, because those are marriages in my view. Those aren't short-term hires. You're hiring somebody that's going to decide who these big teams are for the company. Have you ever let someone down when they've joined in that way? I've let people down before in terms of setting them up for success.

20:58And it's changed a lot of how I think. Have you? And how did you do that? I'm far from perfect. Especially younger in my career, I was less patient. Maybe I didn't have enough appreciation for, to some degree, I didn't have enough appreciation for sort of the impact of broader life in the moment, what was the whole person and not just who they were at work. Early in my career, I think that was learning to understand who people were as a whole person in and out of the office and how those things interplay with their performance was important. Doug Leone says that companies are teams, they're not families.

21:31Do you agree with that? Yeah, we're not a family because we're all here to do a job and we have a set of roles and responsibilities. You have to deliver on performance. It is a team. I think that's a much better way of framing it. It doesn't mean that you don't have personal relationships with people. Family is family. There's no getting out of your family. It's permanent. Jobs aren't permanent. They're not permanent. Can I ask you, you have a very hard decision when you bring in senior leaders because you You have internal talent who often wants to be promoted. How do you manage the balance of internal promotion versus bringing in external talent?

22:05It's something many managers struggle with. My preference is to hire internally. If the talent is available and matches the need, but in fast growth environments, I was in Amazon and like we're in it, Flexed Work, you often have to intersperse more senior external talent. The people who grew up internally don't have exposure to the business you're becoming. And so you need to hire some people from the outside who understand the business you're becoming to help teach everybody that's being developed underneath. External talent is really coming in to teach the people who are developing internally something that the fastest path to learn is by having somebody who's already seen it be present to model that behavior and help give them guidance on how to how to lead in that new way.

22:44Do you believe there are benefits to naivety? And how do you think about good playbook learning versus bad playbook learning where you're transferring an experience that isn't transferable? I like to hire entry-level jobs right out of college, isn't it? You haven't learned any bad behavior. You haven't gone to a company that's not very good at things and learned a bunch of foundational elements that are wrong culturally in our world. And so where we have opportunities to do it. I really like hiring people who are like day one in their career because you have more attrition in that because people are still discovering themselves and discovering what they want to do.

23:21You hire somebody out of college in the Flexport, they're a Flexport. They're here for 10 years, but they're tried and true Flexport employee and they know the culture, they're part of building it. There's no better evangelist for it and they learn what we're all about. You're not bringing in some other company's culture with them. Speaking of bringing in talent, you also made some acquisitions that were very strategic. What's the thought process behind the acquisition, specifically, I guess, with Shopify Logistics, which also includes Deliver? It was a great opportunistic moment. And we had kind of viewed it as not particularly a land rush in this year.

23:55And so we were going to start a team later in 2023 to build that. When we started having conversations with Shopify about the idea that they were going to sell, or they were looking to potentially sell Shopify Logistics and Deliver. How does that actually look, Dave? I'm so sorry for being based, but does Toby drop you a WhatsApp and say, hey, Dave, got time to jump on a FaceTime? It went something like that. Toby knows Ryan because they invested in our round in early 22. And so Ryan and Toby have a relationship. And so he reached out and said, hey, we're thinking about this. We think you all might be an interested party in this.