MongoDB CEO Dev Ittycheria on great leadership, building winning teams, and more | E1783

27:10And the first time you give someone feedback, you're kind of calibrating on those expectations. Joe, this is what I meant. Here's what I really expect, et cetera. Now, the next time you give feedback, which is essentially the second time you give feedback, now you're holding someone accountable. And what I find is that most young managers, one, they're not clear on what the expectations of the role or the project or the initiative is. So that's problem number one. So two, they kind of give some very mealy-mounted feedback that the person kind of says, you know, I expect more here and that. And then what typically happens is at the end of the year, they give someone a week review and the person's pissed saying like, well, you didn't tell me that this was above.

27:52So it's kind of a weird dynamic. So we really get our leaders to try and be much better at being clear on expectations. And then you can give feedback relative to those expectations. In terms of more specific on hiring, one of the things I look for, obviously, it depends on someone who's a little bit more senior, is I try and understand what transitions are made from job to job. If you think about it, one of the most important decisions you can make in life is what company or what job are they going to take above beyond choosing your partner. And so what I'm trying to understand is why did it go from company A to company B and from company B to company C?

28:28Now, I'm expecting every company to be a home run, but I'm trying to really understand their thought process because what it's telling me is how careful and deliberate are they in making that decision. And if they're very cavalier, or they say, I followed my boss to company B, then I'm saying, how thoughtful are you going to be about making decisions here at MongoDB? So that's something that's really great. Yeah, that's a really astute one. Because, yeah, if you don't take your own career, and make that decision thoughtfully, with, you know, some precision, like, what decision are you going to make here?

29:01I also love the, hey, we're going to set expectations, but we're going to inspect your work. And I think, you know, trust, but verify is just such an important, you know, operating philosophy. philosophy we do this all the time with due diligence and we'll have people say to us when we're investing in companies and you were an investor for a little bit hey you know you're you're putting only i don't know 500k into the seed round you're asking for more diligence than the lead was putting in two million and i'll say okay you know we still want to talk to three customers and we still want to see your ip assignments and we still have to look at bank statements to make sure that you know this is all here because we have lps and we want to make sure that if something goes awry we've at least done them and uh it's uncomfortable right sometimes it's uncomfortable to inspect somebody's work um but if you're doing it with the right intent and it's to make them better uh the the right person should look at it like coaching like this is amazing somebody's looking at my work and telling me how to do it better if you've got a problem with this you probably don't want to be exceptional in your career i i couldn't agree more And, you know, one of the things I think, I heard this quote on a podcast that a guy by the name of Jeremy Giffon made that who used to be a tiny, which is kind of a holding company.

30:21Yeah, sure. And the comment he made was the only enduring edge in life is psychological as human nature doesn't change. Things like grit, things like managing your ego, things to be comfortable with low status, being unconventional, having long-term orientation are so critical to success, but so hard to do because it's so contrary to human nature. And to your point, like when someone comes to themselves, well, you know, I want to, this is the tile I want, I'm not coming. you know while i understand that you want to be paid fairly for your work when you get so obsessed by a title or so obsessed by managing your ego or so obsessed about status you know i started wondering about that person and um and similarly when you're talking to a startup and they almost take umbrage that you want to do rigorous due diligence i'm like you guys are going to be we're going to be partners for the next 10 potentially 10 plus years you know don't we want to start relationship in the right way, you know, and just build a relationship, you need to be incredibly transparent.

31:21So it's always to me a red flag when people behave that way. And I gravitate to people who obviously are more legal and that more low ego and low status. And that's kind of the way I run my life. Yeah, the ego thing is very interesting to me. I've seen this many times, where people want credit for work they haven't done yet. This is the huge pet peeve I have just as a manager, investor in companies and just when i was working briefly for other people twice in my life it's this weird group of people who would like to get the title or the compensation for work that they are going to accomplish in the next year or two and i was like well how about you do the work and then we give you the reward maybe you talk about incentives and how you think about incentives because people do seem to be quite entitled these days and you know we we did this to ourselves in the 90s you know it and tech it was just people expected to work 60 70 hours a week you're expected to stay till nine o 'clock you expect to come in on the weekend if you had a project and then google started giving people massages and doing their dry cleaning and babying them and being their you know surrogate parent uh and we we coddled people let's be honest so how do you think about entitlement and managing that um you know so um um you know if you saw some of the questions as again some of my old hands you know there were people who felt very entitled um um you know one question i got recently was obviously with inflation spiking up you know are we going to increase everyone's salary by x percent to match inflation and and what i explained to them was i said i didn't get this question when inflation was essentially zero that people are saying well you know don't give me a raise right so what we do is match the market now the market does reflect the cost of living does reflect inflation you know you know into that number but we're not just going to you know increase people's salaries because inflation is high for the last six months That makes no sense.

33:26And some people took umbrage with that. And what I was trying to explain to them is that we try and be competitive with the market, but we have an obligation to our investors to be able to manage a business as efficiently as possible. Now, luckily, that percentage of people were small, but those are the kind of questions and quote, unquote, the entitlement you're referring to. In general, I think if you explain people the why, they kind of get what you're trying to do. Now, some people may not want to listen to the why, or some people may not like the why, but if you've really done a good job of explaining the why for what you're doing and why you're doing it, I mean, and how you're doing it, then that becomes a much easier conversation to have.

34:08And we explained to our employees when we started, we had what we call, initially called raising the bar, where we said, hey, investors' expectations are changing. I started seeing the tea leaves change last summer. I got my executive team essentially aligned around like, we have to change how we kind of run the business. We have to drive more efficiency. And one of the things we asked was to have a 5 % number of people who did not meet expectations. You thought that I'd ask for someone to give up their firstborn child when I did this, right? Yeah. It's one out of 20 people. Exactly. Just so we're framing it correctly here.

34:48put 20 people, rank them, who came in 20th? Do they need to be here or not? Be thoughtful. Exactly. But as you imagine, there was a lot of uproar. Then I explained to them, I showed them the data. I said, we have 8 % non-regreted attrition in the company, typically every year. So by definition, we're happy to see 8 % of our people leave. But the problem is that we're not more proactive about that. We need to be much more proactive about that. I'm only asking for 5%. Then when people started doing it, then I started getting feedback from VPs, wow, it was surprisingly easy to do the 5%. I said, what does that tell you?

35:21It says that we're not doing as good of a job we should be on performance management. So these are the muscles that we're trying to build with our leaders in terms of being much more rigorous. And you're right, you know, in the days when you're competing for talent and Google and Facebook are throwing money and all these perks, and we're competing for the same people, it's hard sometimes to, you know, not feel like you've got to bend backwards to acquire these people, but I think the world has changed. And now we have to get our leaders to, you know, run the business much more rigorously. Hey, everybody.

35:53Today, I'm joined by Roots CEO, Dan Dorfman. Dan, welcome to the show. Thanks for having me, Jason. Tell everybody here in the audience, what is Roots? And what makes it different than the other real estate investing platforms? I'm a complete neophyte. Roots is a REIT with a little twist. Sorry, I had to do it. We are the first real estate portfolio that we know of that builds wealth for both our investors and our residents. And we've created a unique win-win model that creates partners and not tenants. We built this model because I've spent my entire career in real estate investment, 13 years.

36:28And what you always hear from people is, hey, location, location, location. But location at the end of the day, doesn't actually pay your bills. and location doesn't let you know when there's a small leak that will create mold in the future. The people do. And the people who rent your properties are really the people who generate your profits. And when those people are your partners, it really creates this amazing scenario. And it's this model that's helped us grow our fund over 36 % in the last two years. Fantastic. How can people learn more about this opportunity, both on the tenant side or on the investor side?

37:04Check us out at investwithroots.com backslash twist. All right, everybody go to investwithroots, no spaces, no dashes.com slash twist to sign up and start investing today. What they all find, this is universal across all companies. When you cut a couple of people who are weak, and who aren't getting the job done, the people at the top are like, thank you, finally, because I know I'm busting my ass. And I know that that person isn't. And it felt profoundly unfair to me. And the reason why A players leave is because the B players or the C players are, you know, allowed to stick around. I mean, Steph Curry does not want to see somebody who shows up late for the gym and, you know, and leaves an hour early and he's busting his ass and he's the greatest shooter of all time.

37:50You know, like you've got to be able to keep pace. And inevitably, what we've learned, I think, over the last two years with the cuts and the optimization and the austerity is smaller teams that are optimized this way perform better. It's not a matter of throwing bodies at things. It's a matter of efficiency in the team chemistry, right? Yeah. So, I remember, you know, my seminal first fire. It was a seminal moment for me when I had to fire my first person. And I was like, you know, my hands were shaking, knees shaking, sweating bullets. And what got me over the hump was realizing if I don't solve this problem, I'm penalizing all the good people, to your point, who are doing great work.

38:32And now when you talk to younger leaders, one of the questions you ask people is, what do you think people say about you when you leave the room? Do you think, Joe, that you're a great leader because you're letting that employee get away with coming in late, leaving early, and not doing their job? and what do you think the message is being what what do you think the message is being sent to everyone else on the team so when you start you know you know framing things that way all of a sudden you can see the light bulbs popping saying oh my god um and because people are so nervous about holding people accountable and so nervous about like dealing with issues you know you know that you know handling confrontation and this is one of the other things like you know a lot of people talk about the hard skills you know how good of a developer are you how good of a salesperson are you how good of a marketer are you but in some ways those soft skills which i don't think are really soft, like knowing how to give and receive feedback, knowing how to deal with confrontation, knowing how to set aspirational goals and try and get people to think about doing things that they don't even themselves think is possible.

39:36Those are skills that are so critical to building a great business that not many people talk about, but it's so important and something that we try and focus on here. Yeah, I remember the first time I had to fire somebody and everybody was unanimous. this person was just doing a terrible job. And so, you know, you always have to have two or three people in the room. So I got the president of the organization, my friend Carol Martesco, if he hears this, he'll left. And, you know, we tell the person, I got my knees shaking a little bit under the table. Listen, you know, the assignments haven't been on time.

40:06You know, we're letting you go. Here's two weeks severance. We wish you well in your career. She goes, I can't believe you're doing this. I'm the hardest working person here. But my president of the organization is standing behind her. and he just goes like this she can't see his reaction he just like rubs his eyes and what's obvious to me a lot of times the people who actually don't bring it are completely delusional they they actually don't know and you're doing them incredible mitzvah you're doing them the greatest uh thing in the world which the hr person who had coached me um sunny bates um in new york she had told me you know like you're doing this person a favor they're gonna have a soft landing they're gonna find another job but they need the feedback in the world that they're not hitting the notes and that this is not how you can succeed in your career and after that i was like pretty fine with it i don't take joy in having to cut somebody it's a failure of management that you hired them and didn't manage them but you also can't be a psychologist you cannot do therapy with people at work or fix whatever happened in their childhood or whatever personal problems they have to make them hit the notes that's not your job you can set expectations they hit it they hit it you You can do some professional development.

41:14But yeah, I think sometimes young managers try to do too much to help a person. So I had a mentor, a guy named Steve Walski. He used to be the chairman and CEO of a company called PTC, which was a killer software company in the 90s. In fact, they were growing at over 100 % a year with 40 % operating margins and was a direct sales organization. So he ended up being my mentor when I was building and running and played logic. and actually ended up recruiting him on the board and actually asked him to be chairman. And so he, one day, you know, we're talking about someone and he says, Dave, I'm going to show you the meaning of life.

41:47And he goes to the whiteboard and draws two circles, two concentric circles. I'm looking at that and said, like a target? I'm like, what's the meaning of life? He goes, he goes, the outside circle is what people think who they are. The inner circle is who they actually are. And what basically the point he was trying to make was that the best leaders are very self-aware. They're self-aware in terms of how they're coming across, what biases they have, what triggers them in terms of anger or frustration, what makes them happy. But they're also very situationally aware about how their messages are landing with their teams and their organizations and all that.

42:25And I've remembered this for so long because when I see a leader failing, invariably, it's because they're so self-unaware. Now, they may have good intent, But the way it's coming across is really falling on deaf ears or people are just tuning them out and they're losing their team. And some people can react and quickly correct, but a lot of people can't. And it's amazing to me. So a hallmark of great leaders is how self-aware they are. And that's something that I try and pay a lot of attention to because when you lose your team, you've lost it as a leader. And so many leaders just have no sense of the fact that their team doesn't respect them.

43:05And one of the big reasons I realized is that bad news travels very slowly up the organization. But good news will find me anywhere. I can be on a freaking island in Bali and they'll call me. You close that sale. You close that sale. We got that great engineer, that 10X engineer. It's like a flare gun. Boom. Right. But bad news will travel very slowly. So I'll give you an example. We kind of have a customer situation. the customer says the product doesn't work we're throwing you out blah blah blah the the account team the account manager goes holy shit tells his boss the boss tells his boss and by the time it gets to me hey we're having a problem with acme company but we're on top of it and and so as a senior leader you can very quickly get inoculated from bad news and then you get flat-footed when that acme company sends you you know that they're not renewing or they're basically to turn you out the door.

43:54So whenever I hear bad news, I always assume two things. One, it's far worse than what people are telling me. And two, that I'm the last to know. And so the joke inside this company is like, when I hear bad news, I'll stop and say, tell me more and dig in. And invariably, you find out that there's a lot worse stuff going on. And everyone knows this. Like whenever a bad leader leaves, you always find out there was a lot worse that was going on than you even knew. And so, but you need to create a culture, but this is where companies run to problems. They don't create a culture where it's okay to share bad news, right?

44:28They only want to hear good news or the people shoot the messenger. So everyone said, what incentive do I have to say, you know, what's going on? But conversely, if they see that there's a, you know, that bad news is quickly corrected, then there's a meritocracy around here. Like, you know, there's a bias to action. People are going to respond to issues so people get more and more comfortable surfacing the bad news. And I do this even in my board meetings. I never start with good news. I'm always talking about what's going bad. And I coach younger CEOs who, many of them have a massive imposter syndrome because I know that because I was there, and say, if you tell an experienced board member that everything is going great, they're either going to think, A, you don't know what you don't know, or B, you're lying, right?

45:07Because even the best-run companies, something's blowing up somewhere, right? So start with bad news. And the more you share bad news, the more trusting your board becomes, And now they're not saying that now they're saying, okay, Dave's not hiding anything from me. How can I help Dave solve these problems? It completely changes the dynamic. But it takes, you know, vulnerability is a skill as a, I would say, a strength, not a weakness, but it takes time to really understand that. Yeah, I had to create systems for this because it was a blind spot I had. You know, people would not tell me the bad news because they didn't want to upset me, which is reasonable.

45:42You know, shoot the messenger is a term for a reason. Like everybody knows that colloquialism. And so what I did was, you know, I had somebody on our team set up a little script that sends any founder we meet with 30 days, 60 days after we meet with them. Hey, it was great meeting with you. You met with this person on the team. We just wanted to check in and see how your business is going. And then if you could rate us on a scale of one to 10, how likely you are to recommend us to another founder. This is the people who we passed on investing in. So if you pass on investing, like, obviously, they're like, you're an idiot, you didn't realize my brilliance.

46:20And so we set this thing up. And you know, the fives and the sixes start coming in. These are classic detractors on the NPS score. And yeah, you know what the number one result is, I didn't get enough FaceTime with Jason or Jason didn't understand our business. Like, literally, this was, you know, a blind spot where people just felt like I wasn't giving enough attention to the founders. And so we started rewarding that. And I said, listen, this is going to be scary to get this information. What I want you to do is start off the investment team meeting with two or three of the negative reviews, and then how we could have avoided them.

46:51It turned out a lot of times we'll email a founder and tell them, hey, we're not investing. And they don't get the email. It's a stupid thing. But emails go into spam where people miss emails. So now we like to get on the phone with them and email them and make sure that they know, hey, we're not investing. It's not a fit for this reason. but we're very impressed. We'd love to set, you know, this is the things we did like, we'd like to stay in touch. And, you know, you can't fix things that are breaking like that, unless you have a systematic feedback loop. And that's what I've tried to do is just institutionalize the bad news and embrace it and start every meeting with it.

47:25I think, you know, for startups, you know, the cycle time for feedback has to be really, really small, right? Because feedback is essentially what I consider tension is dynamism in the system. It's kind of essentially, you know, you can literally make the argument that, you know, being alive is all about kind of needing feedback. And for startup, like constantly getting feedback on how things are going. And in this contrast, like a small startup versus a large bureaucratic organization like the, you know, motor vehicle agency in your state, right? The feedback loops are incredibly long, because people there don't care about what you think, they're just going to do what they're going to do, which is why government is so dysfunctional.

48:03And so the more time and space between feedback, the more problems you create. So you have to create a system where you can give feedback quickly and you can act on feedback. And one of the challenges I see is the biggest time gap is between seeing a problem and actually acknowledging a problem. There's so many people, like whenever you ask people, why did this project blow up? Or why did this customer leave? Or why did we know that this engineer wasn't that great or really hard to work with there were the signs were there everywhere but people just didn't act on it right and so the the more you get people to shorten that gap between seeing a problem and acting on a problem the more effective and and uh uh more effective an organization you're going to have yeah and so uh when you look at the sort of distraction uh that's sort of crept into corporate america um i don't know if you know brian armstrong from coinbase or watched him have to deal with, you know, I'm assuming you use Slack or some Microsoft Teams or something like that.

49:06And then people decide, oh, I'm going to go in the random channel. And I'm going to talk about, you know, whatever the cause of the moment is, or the social issue of the moment, or the political issue of the moment. How do you think about corporations staying focused on their mission? And do you believe that companies should be engaging? I mean, we've got tons of examples like this, but light, whatever, but putting those aside, and the woke stuff aside, just keeping the team focused on what matters and maybe not these sort of side quests. How do you think about all that that's going on? Yeah, it's a tricky issue.

49:41I will tell you, like, the day after Trump won in 2016, I had actually scheduled an all-hands meeting. It was just a time it was coincidental. And I remember walking in, you know, the all-hands meeting was in New York, but we were piping in different offices. And you could hear a pin drop, you could just see everyone's face, people. And And as you imagine, most of my employees are in cosmopolitan cities. They're highly educated. They're young. So you can imagine what part of the political spectrum they gravitate to. Sure. And there were people crying. And I felt like if I didn't acknowledge what had happened, I would just, again, being self-aware, no one really listened to what I have to say.

50:21So I said, listen, the learning for me is that I was obviously in a news bubble. I did not believe Trump could win. I thought there was no chance in hell. But clearly, I was in my bubble. And what it forces me to realize is, you know, what are things that I'm not listening? What are people saying that I'm not hearing? And it's forcing me to say, like, there's a part of this country where I'm just not connected to. And I've got to do a better job of being more grounded about what's actually happening. And I just kind of use that as a teaching moment. And people appreciated that and all that. But you're right.

50:56I mean, you know, we went through George Floyd. Obviously, it was a very tragic incident. We went through a bunch of things. I did put up a – I sent out an email after George Floyd. Like, I didn't fully appreciate what had happened. We had a board meeting that week, and I was kind of focused on my board meeting. But then I started seeing the news. I started seeing all the, you know, the riots and then marches that were going on. And I felt like I had to say something. And I just sent out a note, and actually still on LinkedIn, because people didn't ask me, once you put on LinkedIn saying, you know, I just want to acknowledge that there's people who are really struggling with this, and we should be empathetic about what's happening and not just ignore it.

51:31So for me, I think saying you cannot talk about politics, you cannot talk about what's happening in the world at work is just not realistic. But I think you have to make sure that it doesn't basically become the thing that everyone talks about, everyone forgets about work. So having people to have an outlet without like it becoming so, you know, like, so destructive to like, you know, the organization is, is the balance we're trying to find and getting people distracted. And people do care, people do care about like, what values do we stand for? People do care about like, what is the kind of company?

52:06And one of the things I make clear is like, listen, I don't care who you look like, you know, where you're from, what God you pray to, or who you love, we want to make this a place where you feel like mommy's home, period, full stop, etc. And And we want to do everything in our power to do that. But we're not going to react to every issue around the world because, unfortunately, there's a lot of bad stuff that happens and we just can't keep getting distracted by world events. The important world event right now is immigration. You're an immigrant. Yes. You grew up in India and then other places around the world.

52:43And a lot of the great CEOs of our time, a lot of them from India, in fact. uh and now we've got this weird thing in this country where we want to lock down the borders uh we want to stop immigration h1b visas are now being you know used in such a um heavy-handed way i think to use a term um you know you you get laid off you got to be out of the country in 30 days even if you got a family it's such a weak spot it's such a achilles heel for our country right now that canada sees it as an attack vector and they are giving people these like 10 year golden visas. I was just in the UAE. They give a 10 year golden visa.

53:23They said, Hey, listen, if you're H1B, bring your family up here, we'll never kick you out. We'll give you as many years as you need. This is our way to compete with America. Maybe you can talk a little bit about what America should do in terms of recruiting talent, especially tech talent, entrepreneurial talent. Yeah. So first of all, I'll tell you, I've lived in Asia. I've lived in Europe. I've lived in Africa and I've lived here. I've actually lived in Canada for a little while for a very short period of time and lived in the U.S. I still believe firmly that the U.S. is the land of opportunity.

53:56It has enabled me to achieve things. There's no way I can achieve what I achieved in any other country. I'm so grateful for the United States for giving me the opportunities to give me. And I'm so grateful. I mean, I have, you know, being someone of Indian origin. I've dealt with racism and discrimination in other parts of the world. And yes, there's clearly that here, but I would tell you, I've never felt more accepted in any country like the United States. So I'm incredibly grateful for the opportunities this country has given me. And I'm really sad that our immigration policy is so dysfunctional.

54:30Because what made this country great was to attract people who want to seek opportunity, who want to say, hey, I want to create a better life for my family. Now, I do agree, you got to do it the right way. You can't just like break laws to come into this country. And my parents did the right way. In fact, my dad went back to graduate school in Cornell, he was in his mid 40s, decided to go back to school, because he felt, ironically, now that his Indian education would be valued. So you needed to have the pedigree of an American degree. And, you know, they eviscerated their balance sheet, and started over.

55:04And I'm really grateful for what they did and the opportunities it gave me. And I'm sad that our immigration policy is so dysfunctional because I think my sense is that Congress is fiddling around with immigration and you have a place like Canada and other countries are seeing this as an opportunity. And I think people are so obsessed by the political dramas happening at the southern border, they're forgetting that there's so many talented people who are going to either start companies or build great things, etc. And frankly, because they're so obsessed about what's happening at the southern border, all immigration has kind of come to a complete stop.

55:48And it's really sad. It's really, really sad. And so much so, we are now starting to build out development teams in other parts of the world. We're starting to see great traction in Barcelona. You see a lot of Eastern Europeans moving to Barcelona. um berlin is another place dublin obviously we've always been there for a while sydney australia was we have a great team down there yeah and like and i worry that over time you know a lot of you know immigrants will say america is no longer the land of opportunity or america america doesn't want me anymore so i gotta go somewhere else and and i worry about the what the long-term effects of this on the country it's it's been so weaponized and abused by the political parties now it's it's so obvious that we can just call these two different things.

56:30There are people who are illegally coming into the country, and then there's talent recruiting. And talent recruiting should be looked at like, you know, this is a small number of people who are going to pay a massive amount of taxes, create a massive number of jobs, and who will, you know, give a competitive advantage to our country, and let us punch above our way. And then you could have compassionate, you know, the line out the door for people who are non, you know, skilled, non technical, and you take in as many as you can. And this is where the point-based system in Canada, in Australia, in New Zealand, and countless other countries has been very refined.

57:04But these politicians have weaponized it to a point of absurdity. We've got 10 million open jobs in this country. We have the lowest unemployment in 50 years. You and I lived through times when I graduated college in 92, 93. Man, nobody could get a job. 20, 30 % unemployment amongst our contemporaries at that time. this is as good as it gets folks lowest unemployment in 50 years listen this has been a great hour congratulations on your success and I'd love to have you back on the program again there's been just such a great unexpected delightful management discussion about a great number of issues and wish you great success with the AI products as well thanks Jason great to chat with you all right and we will see you all next time on our all-star summer here at this week in startups, man, we're getting, we're getting the greatest leaders.

57:56Can I make one comment? So we do have, we do have for those startups who want maybe to access MongoDB. Oh yeah, startup program. Yeah. So please go to mongodb.com slash twist and you can get access to up to$5 ,000 in Atlas credits, which is our cloud service. Fantastic. And then we have other credits. If you're, you know, an AI company that can build upon that and you get access to technical device and partnerships and co-marketing opportunities. So that's free money available for startups. So go to mongodb.com slash twist. I love that. That's amazing. And yeah, Mongo's got that great history of growing with startups.

58:35And so it's great that you're giving all those free credits. Everybody go and get those free credits. Now where they last. And we'll see you all next time on This Week in Startups. Bye-bye, everybody.

58:50Thank you.