Decoding Customer Insights, Trust, and the Jobs-to-be-Done Framework with Bob Moesta | E1943

27:46Why you give three? Well, yeah, usually they can eliminate one or two and then find the one they like. So if you really study it hard, here's what happens. They have A, B, and C. And the first thing you do is you give them confidence by eliminating one of the three. Let's say it's B. And they actually get confidence in it. Like, I don't want that. I know I don't want that. Right, it's too expensive. It's easier for people to say what they don't want than what they want. Yes. So now they have two left. then you'd see the rational thing would be, I'm going to compare A and C together each other.

28:18But that's not what they do. They actually compare A to B and C to B to say which one's closer. And then they eliminate the next one. And so they end up saying, well, the way the phrasing you'll get is, I'll take A. What do you mean you'll take A? It's because they eliminated B and C. Yes. That's what's left. Yes. It's a process of elimination. We all learn this doing multiple choice texts. That's right. We've learned this in dating. We've learned it in picking a college. We've learned it in picking food choices. I don't want Mexican. I don't like spicy food. Okay. I don't like Mexican. I don't want spicy.

28:51I take out the Indian spice. I got kids with me. I need some. Okay. Now what's left? Yes. Okay. Exactly. That's how we make decisions. And so this is where in the conference room, we feel like everybody's rational. But what you realize is in the real world, everybody's irrational because we don't know their context and context drives the rationale. now it's just so profound when you think about it when you go into these interviews customer interviews and people who are here on this week startups do customer interviews regularly hopefully a lot of people have a script a lot of people have like a lot of goals a lot of people coming with preconceived notions i think you have a different approach yeah explain bob's approach here so my approach is basically that that i want to have a conversation so i can extract their story in the wild without my painting of their story.

29:41Because them changing from a product A to product B or making some switch, it just didn't happen randomly. And so I don't need a long list. I don't need a long list of questions. All I have to know is, to be honest, is what did you change from and to? When did you do it? And then I go backwards. And I go back to find like what were happening to them that made them even become aware of the problem. And then when they became aware of the problem, how did they match it to a set of solutions? And then ultimately, when they saw the solutions, how did they decide which one to pick? And then once they decide which one to pick, how well did it actually meet their expectations?

30:16And you start to realize, like, now I'm not actually asking people about the future. I'm asking people about real behavior of stuff they did to basically figure out kind of the elements that have to be present for them to value your product. And then what I do is we then take the looking backwards lens where we create variables and we say, all right, these are the variables involved that actually make your product more valuable when they're in this situation and they want this outcome. And now we can sell to it. We go find people who are in those situations. We go find people who want those outcomes.

30:49And then we help them. No, no. Then we help them actually add the missing ingredients to enable them to move. Because most of the time, you don't have all the ingredients. They're missing two or three things. Hey, startups, you need to treat your customers right. You want to offer that VIP experience, the golden touch. You want to have a perfect customer experience. And you know how to do that. Zendesk. It makes it so easy. Zendesk has a suite of tools made just for startups. And what it lets you do is build that deep, meaningful relationship with your customers. You do that through amazing support experiences.

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31:58You're going to get unlimited access to all Zendesk products, expert insights, all the best practices, entry into their amazing community of founders. This is at no cost to you for six months. The team at Zendesk loves startups as much as my team at This Week in Startups. So just apply to the Zendesk for Startups program right now and you're going to get Zendesk for free for six months. get ready to scale with the best in customer support go to zendesk.com slash twist that's zendesk.com slash t-w-i-s-t and i just want to say thank you to the zendesk team they've been sponsoring this program for a decade and zendesk you know they're the best that's the gold standard got it so they want to make this guac confit this incredible dish they want to make the rigatoni a la vodka they don't have the vodka right and without that ingredient they can't complete the mission which means in this case the mission might be buying your car or your service or your sas product that's right so the the preconditions and the situation where they need you they need you for a an engagement ring and a diamond when they're getting married yes or when they're celebrating an anniversary then if you were to ask them you know like you know well how are you picking a diamond yes you know and when i went through this and i have a company stone algo and I had this very Socratic discussion with the marketplace.

33:14And the fear of being ripped off is pronounced because you feel like there's so many variables. There's so much inventory. There's so many sellers. There's so much at stake. It's such a large considered purchase and the person has to love it on the other side. So then you look at something like Blue Nile and how they've navigated this or Stone Algo, our company. Yep. But this being able to bring the diamond back guaranteed if the spouse doesn't like it, critical. And then all of a sudden, the fear goes away. But it's an anxiety reducer. So we talk about that as something like, oh, you could bring it back.

33:52Because at some point, when they're not buying it for them, they actually don't know what to buy. Yes. And it's such a unique situation, isn't it? Because they don't get to say to the person, which diamond do you like? That's right. Because of the engagement surprise. By the way, it happens in B2B all the time. the buyer never asked the user what they want. Yeah. Right. Well, this is what I have. I have Slack. Would you like Slack? I don't need to ask you. I have Slack. You need Slack. It's like, by the way, that's where job doesn't work where there's no choice. The whole key to it is that it's free will, that you have the choice to choose where you want to go.

34:27So like, think of health insurance. Health insurance is actually kind of a, it's, it's, you don't actually choose your health insurance. You pick which one you, your company gives you. Right. So that's why we don't know that. We know more about our car insurance than our healthcare insurance because we don't pay for our health insurance. We get it. We're not the customer. We are the customer of the services. But the reality is that the moment that the insurance company started to sell the companies versus selling to individuals, it all went away. So we don't have them. They're the buyer. We're the customer.

34:59What a unique and like, you know, it's interesting. Twisted market. It's twisted. It's broken. and Bob, this is like really interesting when you and I have this conversation because we found two instances of very important purchases in people's lives. The diamond for the engagement. Yeah, yeah, yeah. That's got a broken dynamic. I'm not the customer. She's the customer, but I can't tell her and she has wants and needs and desires and preferences. I can't get them without ruining the surprise. Weird. That's a weird situation. So what I'm saying is - Yeah, but think it's just - Even weirder. Well, think about this.

35:32One thing you could do is separate it. how do i give you a ring for the surprise and then how do i give you the exercise part to basically go go and pick but you can still do the support we we've actually tried to make it you have to have the perfect ring and the perfect day to do those things that's just a ridiculous notion right what if i gave you a ring that's in the right ballpark that's where it is that's what most people do and you end up like realizing like we're going to plan the event and then we're going to plan the picking which is completely different as opposed to putting all the pressure on the guy to make the decision up front why why why make it even more anxiety producing it's already anxiety producing so then if you and i were consulting i was an investor you were a consultant and we were working with stone algo and we wanted to make a uh thing for this marketplace where we wanted to require you know the the like what do they call it an airbnb they have certain hosts super hosts yeah so we wanted to make the equivalent of super hosts and super hosts have to hit certain notes right exactly like i just got a bad review because i didn't clean the place i was like i didn't know i had to clean the place they're like it's on the wall i'm like okay whatever but that was a big complaint that brian actually addressed and he's like he really doesn't want people to have to do chores when they leave their b &b so he's you can't be a super host if you've watched people do that so let's say we have the super diamond seller we would advise stone al go to say hey what about this concept of if you want to be that doing this you have to have a guaranteed 60-day return policy and or a 30-day return policy and a 60-day exchange policy boom what would you what would your next step be there in terms of of productizing this discovery we've made so we made a discovery you and i as archaeologists indiana jones so my my bigger thing my bigger thing with diamonds is i i would i'd be looking for where do people want to get a diamond but they don't where do people want to get a diamond but they don't but they don't okay i could tell you they go to 47th street they look in the windows, they get too intimidated to go inside.

37:26That's right. So let me think of it this way. But the stores make of it. It's kind of like buying cars. People walking through that door to buy a car is intimidated as well. But how many people would buy more diamonds if you could actually figure out how to actually reduce that anxiety? Like this is where people don't... Oh, wow. I don't know the answer, but it would be dramatically more, wouldn't it? But this is where if you study cut, clarity, color, and carrot, the industry as a whole rejected it. They hated it. and the beer is basically forced it upon the market and it actually 10x the market because it's metrics that now i can actually go learn about and what happens is there's something called the jeweler effect which you know is once somebody educates you about it you can go shop anywhere else you want but the person who taught you is the person you'll go back to almost 80 percent of the time because you trust them because they they helped you understand it all this is so interesting part yeah trust yeah trust well how do you cause trust the trust is not random it's cause what are the elements we have to do to cause trust educate would be one that sounds like we just established that educating it's conditional so for example i did this with a sales team in the in the what do you call it uh telecommunication space right and they basically switched from one big telecom to another telecom and this person said very early on in the interview He's like, oh, I just trusted him.

38:50I said, whoa, what do you mean you trusted them? Like you trusted them like with your kids or do you trust them like kind of like, yeah, I'm willing to listen to more. Like, no, no, I trusted them. I'm like, what in the world did they do to cause trust? And they literally laid it out for us. One is when they showed up, they didn't name drop. They just wanted to know about my business. When they came back, they actually gave me three options instead of one. and ultimately the fact is that at some point, the way that I really knew I trusted him when I asked him for something and they told me no.

39:20The moment that we actually implemented that, 22 % increase in sales. How do you cause trust? Amazing. Yeah, I think there's something about following through also that causes. When you do what you say you're going to do, that to me is like a very big trust thing. You said you were going to call me back with the pricing for this carrot at this time. What's interesting is in this scenario, that came up and one of the things they said was, I want them to be responsive, but not too responsive. I said, what do you mean? It's like, well, if they're too responsive, that means they're either sitting around or it's automated.

39:57It's not genuine. Like, oh. Authentic responsiveness. Authenticity. So what we did was we defined the window. The window was like within 24 hours, they got back to me to answer my questions. That's all. Nobody needed it in 10 seconds. And to be honest, they were suspect. if they got an answer too fast. So these are all the elements that this is the kind of thing of when you start to study these elements of what causes people to change, and then you actually wrap your product and services around it. That's what it's all about. So to your point of when you do these interviews, they're useful for both marketing and sales.

40:31Marketing in terms of positioning and helping people to identify the problem. 90 % of the people don't even know they have a problem. So if you can actually make them problem aware and solution unaware, totally fine. But that's marketing's job, not to necessarily make you product aware, but to make you problem aware. Give me an example of making people problem aware. I understand we don't have to solve their problem, but how do you trigger in people they got a problem? So I work with Casper, right? And so one of the things we actually highlight is like, how many bottles of Sequel do you need to buy before you realize you have a mattress problem?

41:10wow that's a sniper shot right there to a certain group of people not everybody's not everybody's got sleep problems some people sleep like a baby so my favorite is we we actually set it up so we realized that that most people would buy a mattress we actually run specials from 2 a.m to 4 a.m because insomniacs people who can't sleep are willing to buy at 2 a.m

41:31there's your content well well there's context and there's timing yeah exactly both of these things are so critical. The message has to come at the right time in the right context. Whoever, who would ever think that selling Casper mattresses against the psychographic of sleep medicine would be a good idea, but you did. I discovered it by doing the interviews. They literally were like, I'm taking too much sleep medication. And to be honest, I want to get away from it. And I realized my bed was the reason why I had to take the sleep medication. Like, so I worked on Snickers, right? You're not you when you're hungry.

42:00That all came from the customers. Wait, wait, what, what is it? What is their insight so so one of the things you realize about snickers is snickers is not a candy bar right if you really look at it and look at how it's been built and how it's been designed and how it's been positioned it's actually a fuel bar it's like you missed the last meal your stomach's growling you've got something to do and you're not yourself and you're hangry and hangry came from them and you start to realize like it's and it competes with a red bull and an apple and a sandwich it doesn't it's a pick-me-up it's an afternoon pick-me-up it's right it does not compete now it's more than that because it's food it's got to be food because i got growling my stomach so we change the layering and we raise the melting temperature the caramel to make it stickier so when you bite it it masticates into a ball and sits in your stomach and absorbs that acid so you're not hungry anymore wow it's a satiation device exactly right and so it doesn't compete it's the largest selling candy bar that is not a candy bar wow right and so so this is where you find all this stuff is from the, like, you just ask people, what, tell me about the last time you ate a Snickers bar.

43:05I can predict right when it's going to happen. Yeah. You're at a gas station. You're hungry. You're, you went to the movies, you're hungry between things, right? You missed the last meal. You still have a bunch to do. You don't want to spoil the next meal and I need to get through it. And I'm running out of energy. Give me something. And this is where like it competes with Red Bull and coffee and a Snickers are all in the same category. Look at this. I, you know, I was just looking at some of the Snickers tags on while you're talking. you're not you when you're hungry right snickers satisfies that's the one that came to mind to me that's right hungry grab a snickers so it's not treat yourself it's not you deserve this or chocolate's delicious it's not packed with peanuts that was this positioning before we started like who cares if you're packed with peanuts peanuts are a commodity you can get peanuts anywhere right and so you start to realize it's an experience like uh what's in a baby ruth and what's in a snickers is almost the same thing but they're totally different experiences fascinating let me ask you a question about a really big decision people are making at the moment and there's a lot of discussion around it and how you might go about it i don't think you have any direct experience here but maybe you do people are making a decision to buy a new car yeah people are loyal to brands because they build trust they find they like bmw they love their toyota they get their suburban whatever it is whatever their jam is they get locked in they buy three and there are many brands like this i think bmw is probably like bmw for life kind of situation for some people and there's a lot going on here but there is an industry-wide switch from gas to electric and then there's a little waypoint in between called hybrid yep and we seem to have had all the early adopters the vanguard you know in crossing the chasm they're all in teslas for 10 years now you got the the the lagger the mass the big fat middle they've adopted and you got some laggards and the laggards are like you know what and i think this is a sign we're in the laggard territory of the bell curve they're like not quite ready but i'll take that hybrid because i do want to and so how would you parse that in interviews yeah and and kind of unlock how to get them to not just make the one step but to make the two-step and am i correct I've been thinking this is like the ultimate ABC choice here.

45:22Yeah. So to be honest, my specialty is in this because most people try to build the best electric car ever. Yeah. What they're better off doing is build the best half electric car ever. Right. So think of like, so I worked on Quicken. It is literally, you know, if you look at it, it's just an accounting package. And if you look at how it was built, it wasn't built by accountants. It was actually built by small business people to understand how to help me with small business. And what you'd say is they could go to a full big package of everything in accounting, but most small business people don't want to be accountants.

45:57They actually hate Quicken, not because it's Quicken, because it's accounting. If you can build the half step that lets people do their accounting so they can actually hire another baker, hire another, so they don't have to hire an accountant. They can hire somebody else to do the work. All of a sudden, they love it. This is the case where a half step is sometimes way better than a whole step because most people can't make the big step. And so you come in with the hybrid. So my belief is the hybrid were the early adopters before. My belief is the next round, the hybrid drivers now are now the mass basically saying, I'm not committing to electric, but I'll half commit to it.

46:32Yes. And it's very interesting. If we were to talk to them, their reasons are completely illogical. as a as an ev driver for a decade yeah i watched the supercharger network expand yeah i watched the charging experience go from you know about 50 miles an hour to six seven 800 miles an hour i watched a stop you know go from you know having to stop for an hour and have lunch to just like by the time i get my starbucks and use the loo and get back to my car i topped it off enough to get to my next place and instead of there being like two stops i gotta wait in line there's 20 stops i have my choice of where to stop i can pick it based on food not based on the the distance and i watched the 150 mile range roadster go to 200 in the model s go to 325 in my y and if i want to be a lunatic i can give 400 in the in some of these versions yeah right there There's nobody who drives this amount of mileage in a day with rare exception.

47:35But yet we still have a fear of running out. So how would you advise getting past this issue, the fear, the habit of going to gas stations? So what you start to realize is that people learn things out of routine. So one of the things I would do is I would actually start to think about a rental strategy because when they're on vacation, they can rent it and know what it's like. So for example, I recently have switched everything to Apple Pay, but I had to go to Europe and not exchange money to realize how easy Apple Pay was. Literally, I could have done Apple Pay for a long time, but it wasn't until I went to Europe one time and realized, I'm going to try to do this without anything.

48:15I'm going to use credit card. I'll use my phone. And I realized, I could do this everywhere. Why am I not using this back home? And you start to do it. So you start to realize these anomaly experiences create the gateway for them to start to actually think about it because it's really way more anxiety than anything else. It's not about the push and pull. It's not about the, like, people can see it. It's the anxiety forces and the habit forces that are literally holding people back. So it's not about the features. so a way to get them over this anxiety is exactly what they do um in psychology when they decondition somebody who has a fear of flying or snakes yep they start with here's a picture of an airplane you have some fear about the airplane let's talk about your fear of the airplane then they say here's the picture of the seat yep and then they might even take them and have them walk on an airplane and sit on it when it's on the ground at a museum or something and just sit there and laugh it out and they desensitize them so what you're proposing in a way is a desensitization to the fear of apple pay and not having your credit card with you or the fear of using a supercharging station what a brilliant idea if people take a tesla or another ev in an uber or a lyft that could you know just the riding in it helps them but the uber and the lyft you get it from one side but there's a different notion about how it feels there's a there's there there's a guttural and emotional aspect of sitting in that seat and not having gear like like you're you're used to a car and it's it it has too many other characteristics that don't make it a car you know what i mean like the sound there's no sound like the sound is one thing and the acceleration is disconcerting exactly right and so you start to realize like there's there's there's actually a lot of fear with it as well so the funniest question you can ask is say like i'm just afraid of running out of out of uh electricity i just want my batteries to go dead i'm like okay when's the last time you ran out of gas and you realize that nobody does that and so you start to realize like and and what the thing that i can't get over is that the electric vehicles are not advertising you don't have to stop for gas like the anxiety that people have to literally go do i get off here so i can actually save some money to be able to get gas here or like this is a bad neighborhood and the danger of gas stations getting robbed at a gas station the inconvenience of having to stop with your children on a side road they're sweet you and i could craft an ad for exactly just that gas stations are dirty dangerous not fun and time consuming charging at home is as simple as plugging in your phone it's right a typical what is a typical gas station in terms of minutes.

51:01Yeah. That's like 12 minutes. So I think is you get 12 minutes back. If you actually get this thing, like, that's what people don't understand. Like, what am I going to do with 12 minutes? It's like six hours a year. That's exactly right. So all of a sudden it's like, and to be honest, it's the anxiety of, do I fill up now or not? Like you, you start to realize like, there's a little subroutine in your head of like, check the gas gauge. How far do I have to go? Where am I going to go? Should I get gas in the way? Should I get about that anymore no yeah you have a that's the brilliant thing here bob you and i figured out a full gas tank every morning start the morning on full by the way that's how i think about my life i literally go to sleep when my tank is empty and i wake up every morning and it's full what an amazing concept the gas tank the energy tank yeah so yeah and this is the power so what am i by the way one of my claims to fame is um i worked at ford and one of the things we did in 1987 as i worked for it and i i came up with the team that i worked on but we worked on it we came up with a little arrow on the gas gauge that tells you which side the field i love the arrows the arrow the arrow is there because of the strong moment of like pulling in and going like where is it i can't remember is this my car is this my you know my wife's car you know it's just and you kind of go like where which side is it on and you just look for the arrow by the gas tank gauge that's right by the gas gauge that's what a brilliant concept let me ask you a question yeah i uh love cars i was like hmm i'm a i'm team tesla i've i own four of them i've owned every car and i i see the ford is going to take the mustang to make an evay i said oh my first car was a ford 1970 mustang grande and gold with a vinyl top it was 351 cleveland put a four barrel on that bad boy was incredible i said to myself you are a car guy thank you thank you for telling me i like i i i'm from detroit born and raised you can see the smile on my face i love it i mean incredibly for a first car 650 bucks it had a hole in the floor i could see the road when i was driving literally i look at the passenger side it was that's how rusted out it put it aside they said you're gonna come out with the electric car i said great here's my idea do the classic pony car with abs and all the great brakes and electric i'll buy two yep give me the classic pony convertible And they come out, no offense, with a Ford E-Mustang that looks nothing like...

53:25Like an SUV. Yeah, it's not a Mustang. They could have tapped into... They will. Don't worry. It's going to get there. It's going to get there. This is where they have to appease the stockholders before they appease the enthusiasts. And so they're building the infrastructure. And so part of it is they've had to split the company. I don't know if you know that. They split the company in half. So there's three divisions now. There's the finance. I know that's the biggest part of it, right? The big part is the gas. So they call it ICE. Internal combustion engine group. There's the electric group.

54:00And then there's the infrastructure group in between. So like the chassis. We both need a chassis, but they have different chassis. So you start to realize all that kind of stuff goes together. But ultimately, they had to split that company in half to basically figure out how they're going to actually... Because from an investing perspective, it's very different investments. Very different. Yeah, because this I thought would be like nostalgia is such a weird thing. What is nostalgia? Let's pause for a second. Let's unpack this. What is nostalgia to you? To me, it's a chance to remember things that don't maybe exist today, but that were wonderful memories and moments and milestones and waypoints in my life.

54:49Certain movies, Star Wars comes to mind. Yep. Certain foods. Cars, your Mustang. Cars come to mind. So what you start to realize is nostalgia is about recalling a memory or pulling on a memory of what somebody's had in the past. And it can be different from the past, but it can't be too different from the past. And the trick is understanding when is it too different that it's not your Mustang anymore. Which is my experience. I would have bought that e-Mustang if it had been the one I wanted. But my belief is they weren't targeting you for that e-Mustang. They were not. They were not. They were not.

55:26But you do see these, it's very, nostalgia is such a fascinating thing to me because you have these young people who didn't experience it. And young people, I don't know if you know what this trend, they love buying old Saabs, Mercedes, and Volvos from the E. And I don't understand it, but they love the old Mustang convertibles, the Saab convertibles. All this stuff is really meaningful to them for some reason. it's it's uh i'll say from the work that i've done i would say this is about them finding uniqueness their uniqueness it's a it's an enumeration of all the things that they want to be and sob if you look at sob how sob came about like they can resonate with it and ultimately the fact is is they don't want to they're like they don't want to promote the building of something new they'd rather uh uh rejuvenate something from the past right it's all about who they are and what they want to put out there.

56:21Fascinating. You had four heroes of yours. You had your Mount Rushmore over there. Yeah, yeah, yeah, yeah. Let's go through the Mount Rushmore and what you learned because you have a tremendous impact on these startups and products and how people build them. And then it's always great to go to the source material. I fell in love with Dire Straits and I fell in love with Bruce Springsteen and Billy Joel. And then all of a sudden I start going backwards and all of a sudden it's all Bob Dylan. That's right. It's all Bob dylan you're like wait a second how do i always go back to bob dylan that's right and then you see like mark knoffler produced infidels and backup guitar and you know was involved in that and uh tom petty went on tour with him like you start to like put the you put the story together right and it's so wonderful when you can do that because i find i understand a system whatever it is whatever the system is or the culture or whatever you want to use um when you start figuring out the influences there so you have influences here yeah influence you so my youngest daughter went away to college or went to graduated college and it was time to clean out the house and i went to i have um over 800 volumes of notebooks that i've been doing since i've been 18 years old and i had them all and i was going to throw them out my wife basically said no you can't throw them out until you've gone through each one of them so i went through each one of them i have them still but for the most part out of it came a book called learning to build.

57:44And it was my appreciation that these four people had poured so much knowledge into me to make me, to enable me to be an innovator. And so I wanted to share it and say, it's called the five bedrock skills of innovators. And it's the things that the four of them taught me over my course of interacting with them, if you will. Right. Um, the four mentors are Dr. Deming, who is basically the father of quality. He was 85, I was 18. And because I was dyslexic, I learned through questions. And so, he loved my questions. And then he introduced me to Dr. Taguchi, who is a Japanese engineer who was responsible for basically a lot of the development efforts of how Japan got such good development capabilities.

58:34And so, I learned all his methods and tools. and I was learning them and applying them and saving for hundreds of millions of dollars as an intern solving these problems that most people couldn't solve. And it had nothing to do with knowledge. It had everything to do with approach. It's called robust design of experiments. And then Dr. Willie Moore, who is a PhD in particle physics, she basically was my manager at Ford and she helped me understand how to see people and how to understand how to navigate the the gauntlet of big politics in Ford. And so she helped me see things from a empathetic perspective, if you will.

59:11What was her phone name? Dr. Willie Hobbs Moore that she was, she's from Ann Arbor. The five skills that I, that I kind of boiled it down to one is empathetic perspective that a really good innovator or entrepreneur can see things from multiple people's perspective simultaneously and literally be able to almost play the role of the, of the investor, play the role of, of the co-founder, or play the role of an employee. Like they can see things through other people's eyes. They're really good at it. That's so powerful to be able to hold in your mind at the same time. Yes. Multiple dynamic personalities involved in something that's high stakes concurrently.

59:51Yes. I can tell you, you know, I literally had a call with some founders struggling with some board dynamics and you've been there. And I just walked them through each person's perspective. perspective and i said listen this is a private equity group this is the timeline they're on this is the return profile they have i said i am an early stage venture capitalist i need to get a i'm looking for 100x they're looking for a 3x we came in before them they came in after us they are about operations i'm about the spirit the culture and building something that's built to last i stay on the board until you tell me you don't need me doesn't matter if it's 10 years after it goes public or 10 years i've never been on the board but theoretically i would stay forever just i'm at the service of the founders they are on to the next flip boom three four five years i said and then you're the founders and you need to tell us one wants to go to the new world one wants to take the spice route tried and true you got to be christopher columbus or marco polo you gotta you gotta tell us which you are so that one of us can sell our shares and move on to the next investment or stay with you until the mission's complete.

1:01:02And it's so hard today for people to empathize and understand each other's position. It's something in society where everybody has to be radicalized, polarized, and on both ends. Whether it's looking at a war or a startup, a stock, or a presidential candidate. It's so strange. But part of it is just being able to articulate. I think that people have lost their ability to articulate what they know and what they don't know. Like, I think, like, a lot of this work is about the unknowns. And I spend most of my time helping people uncover the unknowns they have to answer in order to make progress. And most people are spending their time answering the knowns they already know, and they're trying to prove to others.

1:01:45And that never works to me. Also, if you know it already, why are you spending time with it? Just do it. yeah just okay i know i have to stop eating bread and sugar to be then okay yeah but but there's then there's gonna be a way to design yourself maybe around it but like a lot of times you start to realize like people are like okay i want to go run this test why because i need to prove this i'm like okay let's pretend we can prove that right now so they're gonna say uh this this market's bigger than that market i'm like okay let's go out and measure it like let's pretend it comes back bigger what are you gonna do let's pretend it comes back smaller what are you gonna to do.

1:02:19Turns out you're going to do the same thing no matter what. So why are we wasting time? Why are we wasting time? So a lot of times people want to know because they don't want to be wrong, but the reality is whether it's the place to go or not, they're going to do the same work. I've had this conversation with a friend of mine, and I don't like to bring him up too often because people think I'm trading on his name or something, but I'm talking about Elon, and I've watched him make a lot of critical decisions in three decades we've known each other. As the years go on, I watch him make very quick decisions and I'll ask him about the decision and we'll have a Socratic debate you know back and forth about it and I'll say well we can always reverse it if we're wrong so let's just switch it and go and there's a famous moment where he wants to turn off a data center in the in the twitter handle or and he said when he was taking over twitter he's going to lay off more people and make mistakes yeah and I said well what are you going to do he's hired them back and literally i never tell the story but like the week later and the press is skewering about the stuff and he writes to everybody who got laid off if we've made a mistake please hit reply and explain to me the mistake we've made in laying you off yeah let's just pause on how brilliant that is that's right that's zero by the way that's yeah it's zero based budgeting it's the same thing let's just start over and say well like why should you be here and let's make let's reset what it is so you don't so we don't have the wrong expectation so i like i i respect that like the hard part is that people don't understand you have to go through that in order to get aligned it's that's that's the pain yes right and then and that most people think their job has to satisfy everything about them right that's a big mistake too so so that's my my next book is coming out in november and it's um i've been studying for the last 10 years, what causes somebody to leave this company to go to that company?

1:04:11So the job of jobs. Hold on. This is a good guessing game here. Now we got a good one. What makes a person leave a company? Now, the tried and true answer, and I'm not going to say this is my answer, so don't spoil it, is people don't quit companies, they quit bad managers. Yes. There's three different aspects of it. One is when I get a new manager and I feel like I'm starting over. Ah, frustration. So another one is when I've been disrespected by my manager. The third one is when I don't trust my manager. Three really different sources about the manager. So it's not just a bad manager. It's three specific things that have to happen for people to say, today's the day I'm out.

1:04:50Amazing. And you know what? This is in relationships probably as well, where, yeah, they probably people leave a marriage or any kind of partnership for this reason as well. If they don't feel you can trust is a major one. I'm going to show you your next. So here's the thing. If any four of these exist, they're looking for a job. Any four. Okay. Let's do these pushes fly to you when I don't respect or trust the people I work with. That's, yeah, for many of us, if something is morally or ethically wrong, you got to get out of Dodge. And I tell you, I had this experience with two startups where I had to have them buy back my shares.

1:05:31that had to divest because of this specific issue like ethics, morals, legal issues. I feel like the work I'm doing has little or no impact on the company or world. By the way, in Japan, the way they fire people because they want to say they've never fired anybody is they give them a window seat, they give them no work, and they invite them to no meetings until they resign. Yeah. It's literally the technique in Japan. And so people are wondering like, why am I not given any assignments or work? They know that you'll eventually quit. but the way I'm managed is wearing me down. Okay, yeah. You got a super negative or relenting boss in some way.

1:06:09They don't uplift you. Is that what you're saying there? Yep, yep. Think of it as being micromanaged. Somebody's just checking on you every day. They're just like, oh my God, please just let me, can you not let me do, like I'm coaching somebody right now where they're like, I want to know where the outcome is I have to get to and I want to know the resources I have, but let me go figure it out. I don't need my manager looking over my shoulder every 10 minutes telling me that I'm doing something wrong. I figured out a way to get my micromanager out of me. You do want to know the details if you're a founder of, especially if you're a successful founder, the details matter.

1:06:39I, when we went remote, created the most simple concept, S-O-D-E-O-D. Start of the day, in the general chat Slack room, just tell everybody what you intend to get done. A couple of bullet points. And I said, it should not take more than five minutes. So set a Pomodoro time or whatever your jam is. five minutes write it if you feel ashamed because a couple people came to me and said i feel really bad i don't know what to write i said okay you're feeling shame probably means you're just responding to emails and being responsive talk to your manager about some meaningful work you could do look at everybody else's start of day and their reply to the end of day and then say i should do some of that yeah that's helping the company go forward and it created massive transparency and some people did it some people refuse to do it the people who refuse to do it are no longer at the fund the people who do it and embrace it are at the fund and thriving start of the day end of the day so i've had i've had somebody take this list that you see here and basically say i'm going to use this as my uh our review process so they literally sit down and say do any of these things apply to you today if they do let's talk about it because genius well look at this one reach a milestone in my career this is super important for people when you're a boss you don't you think people are coming to work for money people can make plus or minus 20 percent of what they're making at your job in all likelihood right yeah it's not why they're coming to a professional white-collar job in all likelihood so yeah milestones matter for people that's why steve johnson and there's different kind of milestones there's a personal milestone I've just turned 30.

1:08:15There's a work milestone of like, I've been here for 10 years, right? And so they're different, again, different sources, though they're both about a milestone. One is the reference point is I've been here. The other one is, you know, it's a personal milestone about me being a certain, like I just graduated or I just did this or I did that. It has nothing to do with the company. And it's another reason why people leave. Give me which one of these here you think is really the most unique one you discovered that if you correct for can have the biggest impact the other direction. Because what I see in this list, brilliance of this list, it is brilliant, is that this is not just a roadmap for why you should quit.

1:09:00This is a roadmap for how to be a better manager and to get the most out of your people. Now look at these. so these are these these are supply these are the these are the outcomes they're seeking when they're going to find a new place cut me off at the so how have more time to spend with others in order to carry my weight right so part of this is i need to get a new job because literally i'm working nights and weekends and my family is literally going to divorce me have time for me right feel like my job is a step forward for me and in the eyes of others ah see this is very important yes sometimes matters to us or like i can't tell my dad i'm gonna do this right it's gonna be in my it's gonna be in their eyes that this is progress you're like why it's like i don't want to have to explain it it's just that's just how that is i'm like okay the reason why people like to work for me some dare i say love is this one be challenged learn and grow i tell people i'm gonna work you harder than you ever expected i'm gonna throw you in the deep end of the pool with two cinder blocks.

1:10:00Don't take the job. If you don't want to suck in some water. Yep. And my big thing is to say, when you say you're ready, I'll find the best place for you to go. Oh. So I actually have a two-year agreement that says, look, we're not talking about price. We're not talking about position. Everybody has the same position. But at the end of two years, you're going to go work for one of our clients, or I'm going to go help you find a new job. And then at the end of two years, we look at it, we go through the big review, And then they say, all right, well, if you want to stay, how do we modify the next two-year arrangement?

1:10:33And so we then modify the arrangement and pull people together. But it's about actually taking into account the pushes and the pulls. And the other part is people change, right? Like somebody who's a really big learner in their first 90 days loves a new job. But 180 days into the job, if they're doing the same thing they used to, they're going to quit in a heartbeat. this is you know what i have some professional managers i've worked with who say i change things too much you know like a change direction etc or i put people on different projects i said no i want everybody to rotate if you've worked on the first calls i want you to work on the companies we've already invested in if you've worked on the accelerator i want you to work on the syndicate i like to move people around so they understand the business to the level i do okay and this is the clusters you.

1:11:19But see, this is the thing is you now start to think about what pushes and pulls need to come together to enable somebody to really switch their job. Because lots of people talk about it, but these are the four, what happens, it turns out to be four clusters of what people really do to switch up. There's a whole bunch of people who say they want to switch jobs and they don't. And this is one of the premises of all your theses, I think, which is it's multi-factor. It's always multi-factor and it's always about real behavior. They made some behavior change and I'm looking at to say, like, how do they cause it?

1:11:51So then I can learn how to help other people change their behavior. Right. Okay. Give me the one you think is the most interesting. So what's really interesting to me is that in my life, I've been in all four of these jobs. Do they skew early career, later in career? Post money, pre-money? I think, yeah. one really hits pre-money and it's like like the way it was the grind this was working at four this was waking up early this was literally you know playing a lot of politics and to be honest i got fired from ford because i i ended up bringing up something i shouldn't have brought up in front of the right person and it was like again so one of the greatest insights i got from this is getting fired is the most um like most people in hindsight literally love the fact that they got fired the most educational um and it opens up a new door in the moment it literally is the most traumatic thing they could do but in hindsight it's like if i didn't get fired from fort i would never head down this path that i'm at now so you just start to realize that most people when they get fired it's horrible but in hindsight it literally forced them to find their own way uh this is one of the things about layoffs when i'm coaching founders when they have to do layoffs and it's brutal yeah i say listen you know we live in a country of four percent unemployment these are the top 10 of employees or one percent depending on where they are in their station in life they're going to be fine like if this was somebody who worked at like walmart or a factory like be worried about them because there may not be a safety net in another place for them to you know but this first one here when the way i am managed is wearing me down a micromanager a jerk whatever i can't see a way to grow in this job so that's the other part so it's that here's the thing it's the combination of things that make these real yes right and so that's that's the thing is everybody's trying to find the root cause and what i always say is debbie would always correct me it's root causes it's always a set of what are the root causes that enable this to happen i mean context matters and then the second part of this context is help me find a supportive environment so i can be challenged learn and grow on the job so it's like this job is making me feel bad about myself and I know I'm not growing.

1:14:06And there's, let's just say this person, forget about find, let's say their friends tells them, you wouldn't believe how great it is to work at Jason's venture firm. Yeah, exactly. He gives people all this incredible, you know, responsibility at a very young age without experience. It's incredible. I'm learning so much and my salary is going up based on my performance and it's a meritocracy. Exactly. Like all of a sudden, now you're, it's back to the comparison, ABC, right? Now you're comparing and the gap gets pretty wide, doesn't it? But the crazy part is most people don't think they can move.

1:14:37They don't know that they can do different things. And so what happens is they feel like, oh, I'm in software, I got to stay in software. Or I'm in, like, I have somebody who's like a nurse right now. And I'm like, you would make an awesome customer success person. You care, you do that. And then they look at me like, I didn't even know that that was a thing. I'm like, you can make twice as much being a customer success person. They're like, really? And all of a sudden, it's like, and work from home and nothing meaning but nurses work three uh uh what three twelves and so there's nobody's nobody's figured that part out yet but my belief is that's coming soon i agree with you i was just talking to a young couple and we were talking about like they had to go back to work soon and they were you know being told they're going to do three days a week i said i'm just telling you i'll cut you off the chase where this is all going it's going to be four days a week fridays fuck off do what you want yeah um because by the way when we all worked in office five days a week yeah on fridays we fucked up anyways we all fucked off anyway that's right we all went to the gym we did two-hour lunch and we skipped out because we had a dentist appointment or our bosses let us go at 2 30 or something so we missed traffic to get wherever we're going to go and uh yeah it's it's going to wind up at four days a week or be an entrepreneur looking at the impact of ai i'll wrap on this yeah yeah and then before we get to my ai question and how work's going to change i'll just let you start thinking about how work's going to change with ai i already got this when people hire the rewired group what is the stage and what are the ballpark costs of doing this i can under i know the cost for doing this at big companies yeah big six-figure engagements when you start talking about you know series a companies yeah startups they raised a million dollars they raised three is it too early for them to engage in this i know you open source some of the documents i'm getting you did such a good job here today pitch the hell out of the really group you are in the pitch well so here's the thing is is who we help are basically as people start to scale and there's more than five of them or more than 10 of them and now all of a sudden they have a lot more moving parts this is a really good thing to build a common language so everybody's singing off the same sheet of music so one of the reasons why people come to us is because all of a sudden they start growing and everybody starts to have their own understanding of what the customer wants or what we're doing and we're not aligned and we're spending more time arguing or not building what we should be building.

1:16:53And so they hire us to almost find the customer truth that they can all center around. Another reason why they come... Set away might be alignment, communication. It's alignment. What most people don't realize is we sit down and we'll do an interview for an hour on why somebody bought your product. And then we'll spend another hour debating what we all heard. and you start to realize everybody's hearing it differently and so we got to come to terms with it so each interview actually reinforces what the language means of look easy there's 22 dimensions of easy which dimensions are they talking about oh they're talking about these four oh okay so they're not talking about this so most people try to abstract up we try to drill things down to the very fundamentals first principles very first principles very first principles but foundational truths think of it as is almost like dominoes that have to fall in their life that have to be part of their situation for them to value and so it's searching out those things and then from there we can actually tie that back to both product and marketing and sales and strategy and uh mna got it so so the reason why because each one of those leads to the next because if you're building a venture-backed startup it's eventually to be bought sold by whom public whatever sustainable business and i'll tell you this jason i'm not really pitching ourselves because like to be honest i have a lot of work but here's the thing is this i'm really looking for some awesome people to work with i'm just like i i just won't do any more hoop jumping through i won't do any more that's a and to be honest i would much rather work for for a combination of cash and equity or even performance than i would for cash but most big companies can't wrestle with that.

1:18:32And so the small companies actually, with Jake and people like that, that's how we work the deal. I think it's wise because you want to talk about creating alignment. If they pay a little bit, so they're committed, but you have that upside of, hey, it's one of the great things about capitalism and shares. I know people hate it, but shares going up into the right and everybody having a share. That's right. Word is share. That's right. What we're taught in nursery school and can do it share when you share and people are all participating at the food you know why the united states is so screwed up right now bomb is because people don't own equities they don't have a share in all the great companies that are growing so you have these one class of people who have equities yes capital gains and another group that doesn't that's right everybody in america owns some google and meta and apple and tesla they would feel a lot better about things because they watch it go up and say, hey, I'm participating in that.

1:19:30I buy an iPhone. I got some upside in it. So one of the insights my mom had, she was a school teacher in Detroit. And I asked her about what's the difference between the kids when you started teaching and the kids when you ended teaching. And she ended in the 90s teaching. So she started in the 60s teaching. She taught first grade, it went from this notion of like, I want to be a doctor. I want to be a dentist. I want to be a fireman. I want to be a policeman. Kindergars and first graders coming in with some ambition of what the future looked like multiple years out. But what she said is as Detroit kind of deteriorated more and more, she goes, it got down to most people didn't even know where they were going to sleep that night.

1:20:16And so she said the time horizon of how a first grader thinks has been change so much that they're not even worried about the next 10 years. They're worried about the next week, the next month. That's all they can see. I believe that that's what's happening to us at the United States. We don't have a direction to go. Kennedy at least said, let's go to the moon. Everybody's like, why? Okay. To be honest, we were up for the challenge and we figured it out, right? But the fact is nobody's leading us into a place to go. We're just trying to fix the problem. I got a great place for us to go. everybody owns a home yes and has savings yes and feel safe yeah that'd be like yeah i think feel safe has got to be the first i think but i think the thing is is owning a home i'm not sure my my my kids generation wants to own a home well yeah they have the opportunity to own one they don't have to they can be nomads no no but but but the notion is is that it's just one of those things where we were raised like i was raised to buy a home like like there was no there was no question whether I was going to have one or not.

1:21:20It was more a question of when and where, right? I think that that's a very different model now. Yeah. Bob, you've been an amazing guest. Thank you. Thanks for having me on. Can't wait to have you on again. This is extraordinary. Follow Bob. Look up the Rewired group. Thank you so much for sharing so much. I think it's just - I love the conversation. It was great. Well, it's a great mitzvah that you're doing because I've read a bunch of your stuff and I know your philosophy is you've been very successful. You want to pay it forward and you're giving out all this knowledge and you capture about 1 % back.

1:21:50Seems 99 to 1 is a pretty menschy thing to do. So Bob, super mensch. I appreciate it. I appreciate it. And we'll see you all next time on This Week in Startups. Okay, everybody. I want to tell you about Founder Fridays. What are Founder Fridays? This is an opportunity for you, if you're a founder, to get together with a half dozen, a dozen other founders on a Friday, the first Friday of every month. Why is this important? Well, if you meet with other founders, you can talk about the things that are working at your startup and the things you're struggling with everything else in between and then you can trade notes and you can make friends it's really hard to be a founder isn't it you're alone all the time you've got to solve all these problems and other founders are having the same experience you're having it's isolating it can be scary it can be thrilling and people don't understand what you're going through if you go to a dinner party and there's one founder and seven other people you feel like a mutant you feel like somebody who doesn't belong there.

1:22:47Nobody understands why you're doing your startup, why you're taking this risk, the problems you're facing, right? They're NPCs. This is a non-NPC event. Every first Friday of the month, we do founder Fridays. We're doing them now in 71 different cities. And if this sounds appealing to you, well, you're a founder and you want to hang out with maybe seven other founders around a round table. You can have breakfast, you can have lunch, you can have dinner, you can have coffee, you can co-work, dinner, however you want to do it. and it's free. We've been doing this for a couple of months now. We've had 71 meetups around the world and 929 founders have joined.

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