What if losing your dream job was the best thing that ever happened to you? - Nirav Tolia

0:00You mean when I was escorted out of the building? It wasn't like that.

0:08What would happen if we just told the truth? Welcome to TruthWorks, where we dig into the nitty gritty of leadership and work. And what needs to change. I'm Jessica Neal. And I'm Patti McCord. Our journey together started in HR, but trust us, it's evolved into something wild, honest, and well, a bit rebellious. So throw out the handbook. We're here to redefine rules to work for us, not against us. Let's dive into another episode.

0:45Hello, everyone. Welcome to another episode of TruthWorks. I'm here with Patti McCord, of course, and our guest today, Naraf Tolia, who both of us have known for, I don't know, years now. Two of my favorite people. thank you in texan you would say since he was knee high to a pissant yes and now and we all have texas in common now because i now live here patty you're not from texas are you oh honey yeah i didn't even know that yeah yeah wow okay and so and nirav you're spending time between dallas and san francisco i think i grew up in odessa texas and so i'm not one of those californians who just up and left and went to Texas at some point.

1:29My entire family, my parents, my only sibling, they all live in Dallas. And so post COVID, my wife and I took our three boys and we moved to Dallas where we've been for the last three years. But as you said, since coming back to Nextdoor, I've spent a lot of time in San Francisco. Yes. And we'll just give a little bit of background in you, Nirav, like, I don't know, would you call yourself a serial founder or serial entrepreneur? Can you be serial if it's the same company? I'm not a serial killer. But I'm a serial entrepreneur. Yes. No, I've started three. So it was like shopping.com was the first.

2:03Then it was - Opinions was the first, which became shopping.com, which was bought by eBay. Right. And then the second company - For a lot of money. Some money. Maybe not as much as I thought it was worth. Of course, never is. Something that they thought was worth. And then I started a company called Fanbase, which was a massive failure. And that led to the creation of Nextdoor. Okay. And we're going to talk a lot today about your journey as a leader and a founder and the learnings that you've had. I want you to take us back to Nextdoor and you're leaving or, I don't know, being asked to let. You mean when I was escorted out of the building?

2:47It wasn't like that. Well, let's go back before then. So Nirav, we were reminiscing about both of us visiting next door in the first building where the cubicle dividers were doors. Yep. Yep. Yep. I mean, look, it was a real startup. And let me just say, first of all, I'm so honored to be with you two. And there are a couple of reasons for that. One is I have always had so much respect for the function that was formerly called HR. And now what do we call it? People, talent, human capital, whatever it is. I've always been someone who believes that the strength of these companies is the people. And so to be around folks who spent their entire careers trying to understand how to give those people the best environment in which to create amazing things.

3:40I've just always been a true believer. And so, Patty, you've been an amazing mentor. I've always loved everything that you've done, your book, obviously, the manifesto, the slide deck, the thing that you're really famous for. And then Jessica was so lucky to have a couple of board members at Nextdoor that were also board members at Netflix. And so not only did they know Patty really well, they knew you, Jessica. And so, yes, I did try to hire you multiple times. You did say no multiple times, but it's a thrill to have gotten to know both of you. Patty will get to this, I'm sure, in the course of this, but in some of my darkest moments at Nextdoor, I leaned on you, which I really appreciate.

4:22And so I'm thrilled to be on the show. And just back to your question, I mean, look, Nextdoor is a real startup. And so here we are 14 years later, but going back to the very beginning, I feel so blessed to have gone to Stanford for college because I never thought I would be working in technology. I never thought I would be an entrepreneur. I didn't know anything about the field or any of that. But I mean, like you did, like, well, tell us a little bit about that. So you're in Odessa, but then you end up at Stanford and maybe an unlikely place for you to be. I'm not sure. I would say that it's one of the first times in my life that I experienced enough adversity that it changed the direction of my life in a way that initially was kind of difficult and challenging, but ultimately was a real blessing.

5:10So both my parents are Indian immigrants, physicians, and I always wanted to be a surgeon like my dad. That was my dream growing up. And I was really lucky to get into Stanford. I think I may have been the first person from my high school to even apply to Stanford. So that kind of tells you how different a world it was. But I got to Stanford and immediately everyone around me was smarter, harder working, had come from better schooling. And so I was kind of a fish out of water. And after having succeeded a lot in high school, I wasn't succeeding a lot in college. And in particular, I wasn't succeeding as a pre-med.

5:43And so serendipitously, because of that failure, frankly, of not being able to follow my dad's footsteps, the thing that I could do, because anyone could back then, it was the creation of the internet. And I was lucky enough to meet the folks who started Yahoo. And I was hired as an early employee. And my job title was Surfing Yahoo. I was in charge of taking the websites that were being submitted to the Yahoo directory and putting them into the correct categories and feel really lucky that I was hired. But I didn't have a technical background. I didn't have a business background. I didn't have an entrepreneurial background.

6:21But being in Silicon Valley during that time and being in a company like Yahoo, as long as you have your eyes open, your ears open, you're willing to learn, it's just an incredible hotbed of information and expertise. And so after three years at Yahoo, I thought, oh, this doesn't look that hard. I mean, remember, I joined Yahoo, sub 100 employees. By the time I left three years later, I think there were probably over 10 ,000. When I joined the valuation of the company was probably a couple hundred million. It had gone to a hundred billion, right? I mean, there wasn't a day I walked into Yahoo where the numbers weren't up and to the right.

6:56You can just imagine, you remember what it felt like. That was 96, 97, 98, 99. And then, you know, as time went on at Yahoo, Jessica will remember this. One of the things we used to do when we recruited was every time Yahoo got a new CEO, it's like, go in and get the tech people. It's like, they don't know who they work for at least six months. So like, go snatch them, right? We'd just go in there and surgically remove people from Yahoo. Well, then it got sad though, because then we didn't want it. You know, those that had stayed and stayed and stayed and stayed. It was like, eh. Well, the amazing thing about our industry is, I mean, when I worked at Yahoo, if I wore my Yahoo t-shirt and walked down University Avenue in Palo Alto, I would be mobbed.

7:36And people would say what they say about Netflix today. I love Yahoo. I use it all the time. It's amazing. And now if I wore a Yahoo t-shirt, I don't think a lot of people would even know what it meant. But they certainly would. If you're old enough. No, but I was thinking about Nextdoor is kind of the same thing at this point. A lot is said about Silicon Valley entrepreneurs and there's all this mythology around it. But that moment when you're wearing your T-shirt and somebody comes up and says, I use your product and I love it. I was thinking about this when I was thinking about talking to you today.

8:18I love now in my life, because my early tech career was geek to geek stuff, right? And I love the B2C world, right? where normal people use your product and they don't think about how you got there, how hard it was, how technical it was. It's just a really useful thing to talk about how come you don't pick up your poop in the front yard. Look, the truth is, I mean, and you articulated it well, that feeling of creating something with your own hands that people love, that they truly love. If you have that in an early age, I think you seek it for the rest of your career. Absolutely. Yes, you're chasing it.

9:01I mean, we joke at Nextdoor. I mean, it started with Nextdoor and people did love it. And I wouldn't have needed to come back if they still loved it. And internally, we say now 100 million people are members of Nextdoor. And so you ask people, hey, what do you think of Nextdoor? And they say, oh, yeah, I'm a member. and then you hear a but, right? And so that's the thing that we need to change. But that idea that your hands can result in something that people know, and it's not from a business context. It has nothing to do with ego, right? No, no, no, no. And it's not just your hands. I mean, it's the hands of the team and everybody you've touched, right?

9:43Jessica and I are a great example. My whole life is with alumni now. I mean, my very best friends are alumni. And And everybody's part of it, no matter when they are, which is a great segue, I think, to, and then you were, and then you weren't. Yeah. Well, take us back to that moment where you are leaving Nextdoor, and you have put in all this work, and it was your baby. And what happens? Tell us this story. Well, the theme that I would come back to over and over again, whether it was what I talked about being at Stanford and just kind of lucking in the technology or even being at Next Door, I started the company in the summer of 2010.

10:23It was not easy to start the company. We were coming off of a failed company, right? So that's another example of this theme of failure leading to learning and growth and hopefully something better. And as I tell people, summer of 2010, it's not like you put on your agenda, 10 a.m., come up with a billion-dollar idea, right? It's just not the way it works, right? So there's a lot of iteration. There's a lot of learning. There's a lot of failure. There's a lot of growth. And ultimately, we have an idea that we not only think has business potential, we truly believe it has human potential, which was important for us and something that got us up in the morning.

11:00And it's maybe a little bit overused now to say purpose and things like that. It kind of sounds like Tom Sawyer or something that's a little cheesy. But in reality, if you can build a great business and you can make people feel good for using your product along the way, that's a real pleasure. It's not something that everyone has the opportunity to do. So I start the company and I'm thinking to myself, gosh, how lucky am I to be the founder or one of the co-founders of this thing to be the CEO and it's going really well. And 2017, so seven years after we started the company, we were not performing as well as we probably should have been given the potential of the company.

11:39And as we got into 2018, it increasingly became clear that I was not scaling as a leader. What does that mean? I mean, I didn't really know what it meant, but you could see it in the company. The culture wasn't as strong. The product wasn't as well-defined. The plans for how we would grow were not clicking the way they did in the early years. And so you were kind of, Jessica, to say when you left, The reality, and I said this really to the entire company when I came back to Nextdoor, thankfully it was my choice to come back because it wasn't really my choice to leave. And leaving was not something that I ever thought I would do.

12:21As an entrepreneur, as a founder, even as a CEO, I don't think you're really thinking about what if this doesn't work out. You're only thinking about what if it works out, right? I mean, was it just, I mean, obviously you knew science were there, you know, with the product, with the culture. But I mean, were you surprised by this decision with the board or? Surprised is probably a huge understatement. When this kind of thing happens, your entire world is destroyed. Yeah. Because your identity is tied to this job. And so it doesn't happen in one fell swoop, right? It's a little bit like I joke and say, success is 999 failures leading to one resounding victory, right?

13:11I think realizing that you're not the right person for the job, it's a thousand little things that ultimately lead to this realization. Oh, man, I hear you. Now, all of a sudden, I can feel you, man. Yeah. Well, you know, you did feel me, Patty. I did. No, but I mean, I did the same thing too. I remember for years people would say, you know, why did you leave? And I would, I'd be so tender about it. I would say, do you tell everybody, you know, the obtuse to your breakup story? You know, so why'd you get divorced? What happened? Did he yell at you? Was there, you know, what were you wearing? Did you cry?

13:46I mean, people would ask me that. Like, did you cry? I'm like, this is none of your business. I mean, ew. So, but that it just, even though you know, it hurts. Right. Well, you know, but you don't know, right? I mean, one of the board members said, call Patty, ask her for help. That was literally what I got. I stepped down in July of 2018. In May of 2018, I got on the phone with Patty and Patty said, I've talked with your board. You're in a tough spot. This is not going to be easy. Let's see if we can get you some help. I don't know what's going to happen, right? And so even hearing that, remember, this is not a company that I came into.

14:30It's a company that I created. Yeah. This is not a board that I inherited. It's a board that I chose, right? Yeah. And so it feels a little bit more like a family at that point. And this gets to all the Netflix stuff about we're not a family, right? Like we're a team. Yeah. And you realize that it's a business. It's a business. And if you don't perform, and the other thing you realize, and I would love for people listening to take this away, sometimes, even if you're getting all the right advice, even if you have all the resources at your disposal, even if you have the best CEO coach, until you fall down, until you fail, your ears aren't really open.

15:14Your eyes aren't really seeing what's going on. And so when I reflect a little bit, I remember going through this and realizing really in many ways for the first time all the areas where I needed to grow. And I don't consider myself an incredibly unselfaware human being, but in that moment, I just realized how little I did know. What were some of the things that you reflected on and were like, okay, gosh, I need to know this? The biggest thing, and this is what I've tried now to really work on as I've come back, the single biggest thing, and this is something that I think needs to be said because it's certainly something that's experienced by leaders, stress can make us the worst versions of ourselves.

16:08Stress, if it's not controlled, if it's not managed, if it's not really something that you get on the right side of, stress will bring us all to our knees. And in my case, the stress not only brought me to my knees, it made me the worst version of a leader, the worst version of a teammate, the worst version of a father, the worst version of a husband, the worst version of a friend. And so 20 years of being a CEO at that point, right? Having that pressure, being in that vice, feeling like I was going to get snapped at any moment, right? And just the realization that I had never figured out how to handle that.

16:51And it's not like I didn't have CEO coaches, right? We were talking about the fact that I was lucky enough to be one of Bill Campbell's first mentees. Bill Campbell, the trillion-dollar coach that everyone talks about in Silicon Valley. I had Fred Kaufman, an incredible CEO coach who had coached Sheryl Sandberg and Jeff Wiener. And so I had all the resources. I had a world-class board. I could call Patty. She was on my speed dial, right? And so again, it's not that I didn't have the resources, but the self-growth of understanding what does stress do to me? It's not in a textbook that you can read.

17:27It's not in some case study that you're aware of, right? It's what does stress do to me? And the other thing I realized, and I continue to realize this is when you're the CEO, there's a power dynamic between you and the rest of the team that makes it very difficult for them to give you real feedback. Yeah. Oh, yeah. Mm-hmm. Mm-hmm. They don't tell you the truth. Well, I mean, they're always thinking like, what does he want to hear? Right. Versus what does he need to hear? Right. Yeah. And I think there's a couple of wins that blow that make that. For one thing, especially then, it's venerated.

18:08Oh, you must have the God gene. Yeah. Because you're the CEO. It's like nobody ever says, how did you get there? Do you deserve it? It's just like once you're there, you're God-like. And the second one, since Jessica and I have spent our whole lives being literally that person. Right? Right. Who, I mean, I can't tell you how many times I would say to Reed, I know what you said. Yeah. I was there in the room. You are literally correct. Those are, in fact, the words that you use. So once again, if we're playing debate game, you win. Do you want to know what they heard? Yeah, exactly. Right. And so that translation, and I would say from all the CEOs I've worked with, and we talked about this a little beforehand, you're absolutely right.

19:01I mean, nobody can coach you to not fall down if they catch you every time you trip. You kind of got to feel the pain. Sometimes you got to get up and go, fuck that hurt. Yeah. You don't know how hot the stove is. Everybody can tell you it's hot. You've got to touch that stove and learn yourself. It's very true. And we don't often give ourselves the grace to do it. And the stakes are high. The stakes are high. To be fair, nor does anybody else. Not in that role. Right. Not in that role. And I think that, you know, to give you some credit, every single CEO I've ever worked with, and it's been lots since Netflix and so has Jessica, has had to come to that realization that the people that work for you think the words that flow from your lips are little golden commands.

19:57instead of half the time, opinions are just a brain fart, right? Like, oh, I don't know, maybe we should change the font. And then the next day, I get a team of 40 people working on changing the font because I said this one little thing. Well, and leaders are constantly iterating. And so the dangerous thing about taking what a CEO says as gospel, so many times, like we do with products, I am iterating. I'm seeing what kind of response am I going to get? How's it going to land? Does it make sense? Is it resonating? And when they don't realize that framing or really more to the point, when I don't provide that framing, things can go awry.

20:40So even when you're talking, you're not communicating. Right. And time, right? Like, I don't know. I don't understand why they don't know what I'm talking about. I mean, I was very explicit about that. I'm like, I know you were at our executive team meeting last week. However, the other thousand people heard you say the complete opposite thing at the company meeting four months ago when the last time they heard your voice was. Yeah. No, I was talking to a CEO just a couple days ago who was like, I realized how much chaos I was causing in the organization because I would get excited about things or I would be concerned about something.

21:21And I would just think I'd be having a conversation with someone, but then these teams would be formed and people would be off doing things because I was either concerned or excited. And he's like, I never realized what a chaos maker I was. Jessica, you won't remember this, but when I was interviewing you, and I'll never forget this, you told me about this thing called the CEO tale, the tale of a CEO. I don't know if you remember But the point you were making was very similar to what you just said, which is you said most CEOs don't realize that they have these long, powerful tails. And when they swing the tail without even knowing it, they can level.

22:00They can be happy. They can be sad. They can just be nothing. But the tail leaves a swath of destruction in its wake. right and i'll never forget that because the idea that if i walk into the office and i have a frown on my face uh-huh people are worried all of a sudden yeah they're wondering what's wrong i just had you know kind of a rotten egg for breakfast yeah it was no big deal yeah right but you're right i mean i think the impact and understanding really that you have that impact but then there are places where you can iterate and you can experiment and you can toggle back and forth right but when do you do what unfortunately you don't realize that until you stand up in front of a thousand people and in all hands and you realize that's probably not the right place to iterate that's where you gotta be Chris we were thinking we'd go left but I don't know you know right maybe right what do you guys think okay all right we're we're getting off so okay so you you're learning this, you're getting let go.

23:03You have to leave. You kind of have the reflections and then what happens? Well, I realized that the issue that was getting in the way of me being the most effective CEO for Nextdoor were also issues that were going to show up in every part of my life. And so this became a much bigger thing for me than you have to work on this part of your career ambition, right? It was much more, what kind of person do I want to be? At the same time, I'm a very optimistic, glass half full human being. And so I thought to myself, okay, this may not have been exactly my choice, but how am I going to learn from this and how am I going to use this to my advantage?

23:44And so I took it as a, this is an awesome opportunity to do completely different things. And so my wife and I did something crazy. She quit her job and we took our three young kids who were ages six, four, and two, and we moved to Florence, Italy. We just, we had the opportunity to have some flexibility and to do something like a sabbatical that we could never have done before. And so we were in Italy on and off for two years. COVID hit in the middle of that. So we came back, then we went back to Italy. The second year in Italy was magical. There were no tourists. I then became the executive chairman of a very large venture capital firm that had funded Nextdoor.

24:24So I became an investor trying to help CEOs avoid a lot of the potholes that I had stepped in. I joined 11 boards. And then ultimately, when we were coming back from Italy to the United States, we decided to move to Dallas because that's where my entire family is, my parents, my only sibling, his family. And we wanted our kids, who at that point were, I think, maybe 11, 9, and 7, we wanted them to be around their grandparents. So I lived a lot of life. And interestingly, I never thought I would be a CEO again. It wasn't something I wanted. No, no, it wasn't something that I didn't want. I wasn't resentful.

25:03I didn't feel like, oh, I had to leave next door. I hope it fails so I can come back. Like I had none of that. I had none of that. I thought to myself, what an amazing run. And I still was part of creating this thing. I hope it's massively successful. It was on its way to an IPO. And by the way, what else am I going to learn and do in my life? And not being an operator, not being a CEO, I can focus on what I think is the most important startup of them all, which is our family. And so my wife and I were really co-parenting the kids. So I think what's interesting about my journey as I reflect on it now, when I left Nextdoor, I never had this impulse of, oh, I need to learn something so that I don't make the same mistakes again.

25:45or I can't wait to show them that I can do better next time. None of that was driving any motivation. The motivation was, what can I learn from this to make me a better person? And what are the interesting things that I can do? Because now I'm kind of free, right? The one thing about being a CEO of one of these companies is it's a huge, huge commitment, right? You're not free. And so, Jessica, as you know, I really tortured myself before I came back. I mean, I didn't know if it were the right thing for me to come back and be a CEO. Who called you? You get a call. What happened? I'm on the board, as Patty said.

26:25I love the company. I really wanted the company to succeed. I completely backed and supported Sarah Fryer, who we had hired to be the CEO. And it just wasn't working. And so for a while I thought, okay, well, if I have some great ideas on how to make it work, I better share them. It's not like I'm trying to not tell them what I think needs to be right. But honestly, I was out of next door. I mean, I was there as a board member, but I was looking at AI companies to invest in. I was living abroad. I was trying to raise my kids the right way. I mean, my mind was in non-next door places for the first time in a long time.

27:06So I didn't know how to fix the company. And so I wasn't really that active in trying to turn it around. Ultimately, there was a moment where it became clear that we probably needed to transform leadership. That was the direction that we needed to go in. And so my wife and I started thinking about it, knowing that the company's in San Francisco and has an office in New York as well. And we're living in Dallas and we've created this life where I'm close to my parents. I'm taking my kids to school in the morning. I value my flexibility. I'm on 11 boards of other companies, right? I mean, it's not like I was just sitting on the sidelines waiting to go back in, right?