Guy Raz

Olympic was Dell's wildly ambitious engineering program. The technical leap was too big, and the project failed.

Michael Dell says Dell Unix was a software product Dell created in 1989, before the Linux wave. Unix was already a well-used operating system in mid-range computer systems. Dell was really early, and Dell Unix was a really bad idea and a horrible misadventure. It cost the company money and affected the stock price. Dell also had problems with inventory control early on, among other mistakes. Fortunately, none of them were fatal.

He learned long ago to fix a problem as fast as he finds it. Pioneering a new area with a new business model leaves no playbook. The way through is to l

Michael Dell took Dell public in 1988 because the company needed the capital. Dell was only four years old and growing at like 80% per year. At the same time, the business was expanding into new countries and into new product lines.

A huge amount of revenue was coming in, but all the revenue is not profit. Dell was not a software company, so the sales could not finance the growth alone. The capital was for hiring more people, opening new offices, opening new factories, and building IT systems. Being a public company also helped Dell become more of a peer with customers, because customers could look and see a real legitimate company.

The public listing was helpful at the time. Dell absolute

Michael Dell says a letter from the Federal Communications Commission told Dell to stop making computers. Computers fall under a Class B device rule, so they have to be approved by the commission, and he did not know the rule.

The letter came in 86 or 87. Following the instructions would have put Dell out of business. Colleagues told him to call a lawyer in Washington who had been one of the prior commissioners. The lawyer said to go down to a test range, test the computers immediately, submit an application right away, and make sure the machines comply. Dell did all of that, and the lawyer then went to the commission and described the team as honest, forthright people.

Michael Dell says Dell's on-site service doubled sales after about three months.

Dell had decided the company had to differentiate on the basis of service and created on-site service. Back then, if a computer broke, the owner put it in the trunk of a car and took it back to the computer store. The store shipped it off somewhere, and the owner waited weeks and weeks and supposedly got it back. Before the internet, the customer called Dell on the phone. If Dell could not resolve the problem on the phone, Dell sent a technician with parts to the customer's location to fix the computer on site. Dell offered on-site service all across the United States.

Dell thought sales would double the minut

Michael Dell sold a 12 MHz 286 computer for $1,995 while IBM sold a 6 MHz 286 for $3,995. The Dell computer was twice as fast and half the price, and the company still made a decent margin.

In the mid-1980s, soon after the first engineers were hired to build Dell computers from scratch, Dell started selling so many computers so fast that it competed with IBM. Clever engineers and a supply chain built because the company had no capital made the pricing work. When Dell would sell, say, 200 computers in a day, the signal went back to suppliers, who delivered parts to the factory every day or every few hours, and Dell shipped the computers out to the customer. The supply chain was unbelievably

At about 17, Michael Dell made a little over $18,000 in a year mailing Houston Post offers to new marriage-license applicants.

Marriage-license filings were public, and an applicant gave the county court the address where the license should be sent. He built a direct mail program for a 16-county area surrounding Harris County, where Houston, Texas is. High school friends went to the county courthouses and typed the names into small Apple II computers, and he sent a large mailing to the applicants. A building boom was also underway in Houston, with large apartment and condominium complexes going up. He visited buildings under construction, found who was in charge, and said he was from the Ho

At 21, Michael Dell was already running a company making about $60 million a year. Guy Raz says that was just the beginning for Dell Computers. A college freshman turned a dorm room side hustle into one of the biggest computer makers in the world. While he was supposed to be in college, the dorm room business was already thriving: he bought computers, souped them up with more capability, and resold them. He advertised and bid on state contracts, and he does not really remember how he figured the work out.

Back in the 1980s, before people used the word startup and before founders such as Mark Zuckerberg, Evan Spiegel, or Katrina Lake, the dorm room story people knew was Michael Dell's. Today

Brian Chesky says Airbnb.org is going to try to provide a million nights of free housing a year, for five years, for people in crisis. The nonprofit's leader put the biggest operable scale at a million nights in a few years, which Chesky thinks would pass Ronald McDonald House and any government. The cost he was given was about half a billion dollars of the company's money. He says a public company had to be able to do that responsibly for shareholders, that doing good is good business, and that this may be one of the most important things Airbnb does.

The idea is older than the company. In 2008 he emailed his co-founders with the subject line Airbnb.org, before Airbnb had launched, already

Brian Chesky says the pandemic was the first moment he had to be a good chief executive, because it was life or death. Before that, being better at the job was a nice-to-have that might have made Airbnb grow faster and feel less chaotic. In the crisis, either he was a good chief executive and the company survived, or he was a bad one and the company died. Guy Raz, earlier in the episode, quotes him from 2020 saying Airbnb lost 80% of the business, and Chesky puts that drop at eight weeks. He was about 38 or 39, about 12 or 13 years in, and he says he is good in a crisis.

Hands-on work, which he calls founder mode, came only from that crisis. He had not thought about Steve Jobs for eight or

Brian Chesky says the chief executive job can be lonely in a way founding was not. With co-founders he had friends, nobody was really in charge, and it felt like a college crew. As chief executive he was less able to socialize with employees, the walls felt like they were caving in, and a lot of the emptiness after the IPO was loneliness. He was not happier running a $100 billion company than a $20 billion company. The rush wore off, and he decided he needed more friends.

He wrote Barack Obama a long letter asking for help. Obama told him the problem was simple: he was really lonely. Obama said he had at least 15 friends he could call without catching them up, many from high school, includi

Brian Chesky says hiring great people, trusting them, and getting out of their way is what a mature company does, and it is a death sentence for a young company. A young company should not hire big grownups who do not understand its stage. It should hire people just a little ahead who are smart and hungry, and the founder has to stay close to them and close to the work.

The hard part of the job is a culture where people still do the desired work when the leader is out of the room. Becoming profitable and managing expenses are easy next to that.

He usually deferred when an executive's experience collided with his intuition, and he calls that a mistake. Many of those executives were old enou

Brian Chesky calls it a failure of leadership when a team spends six months on a project and he has to kill it. They should never have gone six months down a journey without him pulling the plug.

He wants to be at the beginning and the end of the process and to check in during the middle. Projects head the wrong way for one of two reasons: they start wrong and are not set up for success, or they sit off on an island without oversight. Setting a project up for success means a clear vision, the right people, one directly responsible individual, enough resources, total alignment, the right process, and a scope that is neither too big nor too small. After that he sets a rhythm. He can stay invo

Brian Chesky gets honest pushback at Airbnb by keeping people who can afford to tell him the truth, then by taking the opposite side of his own idea so the team has room to disagree.

Most of the people willing to tell him the truth have been with him more than 10 years, including his co-founders and a few who do not need the job and can risk getting fired. In London last week, he and the team landed on a new company tagline. He texted his CMO and two creative leads that the line was final and he did not care what anyone said. After sleeping on it, he saw he had sucked the oxygen out of the room. The next day he told them they had two weeks to find a better tagline and said he thought a bett

Brian Chesky talks to employees two or three layers below his direct reports so he hears from the people doing the work, not only from the executives above them.

Right after COVID, executives called the move undermining, going around them, and micromanaging. Feelings had to come second while the company was in crisis and had to be saved. Letting executives own the details had already run for 12 years, and the company was doing well probably in spite of his leadership, not because of it. The company had the curse of a business model that was too good. eBay had a great business model and did not have to be great at execution. Amazon had a horrible business model and low margins, lived by exec

Brian Chesky says fast success made Airbnb sloppy because the company forgot how hard the first product was to create. The team iterated 30 versions of the website before Airbnb worked, then expected everything else to work. Teams got funding, and employees were expected to invent the next great thing. Many good employees could not have started Airbnb, so asking them to start the next Airbnb was too much. Money, resources, and pressure to expand fed hubris, overconfidence, and indulgence. With no money, founders stay disciplined, say no, live inside constraints, and stay principled. The first time they ride a rocket ship, judgment can go down. They start thinking they can do everything, thin

Brian Chesky asks his assistant how nice people are to her, because success makes everyone nicer to him and he becomes a bad read of character. Some people were very obsequious with him and would not treat her well.

He kept letting new people in on purpose. Stopping new friends means stopping growth and stopping learning. He would ease in rather than hand over something like a bank account. The risk of a few people violating his trust was better than the risk of living alone the rest of his life. A few people did break his trust. It was not irreparable, and taking the risk was 100 percent worth it. His default was to trust and let the consequences land wherever they landed.

Refusing to dat

Brian Chesky says a company cannot grow faster than its chief executive's learning curve, and he believed the limit of Airbnb's potential was the limit of him. In the mid-2010s or the late 2010s Airbnb kept growing and was clearly chaos at the same time. He did not know how to manage the chaos, how to manage excellence, or how to align everyone in one direction. It felt like sand falling through his fingers.

He wondered all the time whether he was the right person for the job. He felt almost imprisoned and did not know if he would ever have the capacity to be a great chief executive. He had watched failure after failure when a founder left. He did not know how to get out, so he told himself

Brian Chesky says he was naturally a great founder and naturally a terrible chief executive. He calls that a classic story. He does not know a founder for whom becoming a chief executive felt completely intuitive, though he is sure exceptions exist.

Founding felt intuitive. He leaves open whether people are born good founders, then treats a lifetime of practice as the real answer. A child makes things, builds things, and practices being a founder, so founding a company is probably not the first attempt to make something. He puts his own practice at 20 years, starting as a child: designing, taking Christmas toys apart, and selling things to friends. By the time Airbnb was founded, he and co-

Brian Chesky says he felt lonely the day after Airbnb went public because the rush ended and his life felt no different than the day before. Guy Raz sets that day as December 10, 2020, when Airbnb finished worth over $100 billion. Chesky went to bed as chief executive of a public company, never having imagined he would lead even a 10-person company. He woke to an empty house, still sheltering in place, put on sweatpants, and sat through a random Zoom meeting. Regular life was back, and the gap set off an inner crisis.

The listing happened on Zoom during the pandemic, with no bell and no gathering of family, friends, or early people who helped build Airbnb, only boxes on a screen. From child

Tope Awotona tells Danny, who owns The Nail Room, not to open a second location yet. The salon is already full, so the next move is a bigger space and more revenue from each store. Maximize that before thinking about a second store.

How large the company should become is a personal decision. Growth has a cost. Awotona does not see his friends as often as he would like, and he is not always a great cousin or brother. The financial rewards of Calendly have also let him help many people, which he is proud of. Once the first store is running well, stay local for a year, starting in downtown Greenville, and only later consider a farther city such as Charlotte.

Tope Awotona's first employee at Calendly was an engineer. The next hire was a marketer, brought in to grow the top line and increase demand. Virality in the product took off so much that marketing was not the bottleneck. Serving the customers already coming in was, so that marketer quickly became a customer success person.

A founder can keep a list of functions to scale next. What shows up instead is something clearly broken, and that break makes the next thing to automate obvious. For Ivana, who makes Playfield's dog-walking gear and is about to have her first child, that broken piece is operations. Automating it would free her to spend her energy on the product and on revenue.

Tope Awotona tells Dominic, who makes the Newlane folding bike helmet, to market to the person who gets the rider to wear a helmet, not only to the cyclist. Awotona bought his own helmet because his wife insisted, then wore it so his kids would wear theirs. A gift path on the site would let that buyer purchase the helmet for someone else.

The harder objection may be behavior. People buy helmets and do not use them, or they never buy one because a helmet is a pain. The pitch can move up a level: this is the helmet a person will actually use. Dominic says that in the last gifting season, 20% of sales were bought by one person for another.

Guy Raz tells Dominic, who makes the Newlane folding bike helmet in the United Kingdom, to pick one path: push the made-in-the-UK label as a premium, or manufacture abroad and cut costs. The website does not make that origin obvious. The origin is a premium on a high-quality product, and the manufacturers are probably highly skilled, so for now Raz would lean into the label.

Dominic says gross margins are healthy. The helmet sells for £100, with a higher-priced version. A retailer takes 40%, and a distributor takes about 35% to 40% of what is left. Moving the tools to a factory in the Far East would be expensive, and the geopolitical picture makes that move harder. The MIPS version adds a s

Tope Awotona says Calendly's AI assistant is Kali. The company has repositioned from a scheduling platform to a meeting assistant platform. Online scheduling is still a large part of the business and will stay that way for a long time, because it serves a real purpose. Kali sits on top of that, with several skills, and one of them is scheduling.

A person can add Kali to an email thread. If someone writes to set up coffee, Kali replies like a human assistant with that person's availability. It knows the preferences, who the meeting is with, and which times to offer. The classic scheduling product remains. The new layer is an AI system meant to be as flexible as a person.

Tope Awotona says the lesson 13 years into Calendly is to build a business around a customer and not a product, and he calls that shift maybe the biggest thing he thinks about differently 13 years on. First-time entrepreneurs who are still learning have a tendency to think product first. Customer first is the view now, and it is what guides the company while the product expands.

Once a customer is acquired, served really well, and given a brand, it is a lot easier to expand with that existing customer type than it is to go try to expand the different types of customers served. Ultimately, over time, a company needs to do both.

Tope Awotona says a small brand should pick one or two sales channels and put 80% of the founder's time there, while still keeping some diversification. The chief executive should spend no time on the channels that are set aside.

Going from $5 million to $10 million in revenue will probably force trade-offs. What carried a business from zero to one differs from what carried it from one to $5 million. Awotona quotes Naval Ravikant, whom he calls a philosopher from Angel's List: a happy man has a million wishes, but a dying man has one wish, which is to live. Justin's company is not dying. It is doing well and has been around for 13 years. Treating the move from five to $10 million as that on

Danny, who owns The Nail Room in Greer, South Carolina, says builder gel is a clear, thick gel applied to the natural nail so the nail gets stronger. Color goes on over the gel. When a client comes back, the color comes off, the new growth is filled in, and the nails are painted again. The gel never has to be soaked off.

Most salons glue on artificial tips, then soak those tips off in acetone, which keeps thinning and damaging the nail. The Nail Room opened four months ago, and gross sales just hit $100,000. Danny had been a stay-at-home mom for five years and has three little ones. She did her own nails at home, went to nail school after her husband encouraged her, and worked out of a room

Guy Raz tells Ivana, founder of Playfield, that an ambitious founder may need to put the brakes on for a couple of months. Her baby is due in the quarter before Christmas, so that Christmas quarter might not be the one she wants, and next year is the time to ramp up once home systems are in place. The business can still succeed because she is motivated to make it grow.

Tope Awotona says keeping the business afloat is the most important thing. If the business stays afloat, there is another day to fight. The person to hire should bring operational excellence, because a lot happens day to day and the trains need to keep running.

Tope Awotona says founders can still launch application software without a lot of money. A frontier lab needs billions of dollars. Application software is a different category. The barrier to building software and technology has never been lower because of AI.

Anyone who can write and articulate requirements can pick tools like Lovable and Replit and create a product. The first version will not scale to millions of users on day one. It can still get out without a lot of money. The most critical step is product market fit: creating something that solves a real problem for people. Once that validation is in hand, capital to scale the product and recruit people becomes available.

Trina Spear says net worth is not self-worth, and a founder cannot tie either one to a stock price. After Figs went public the shares hit $50 in the first month, and she and Heather Hasson made a Forbes list of wealthy women. The next year the stock was $5 and they were the two women who fell off. Guy Raz says the two of them were worth hundreds of millions on paper. They have taken money off the table and can support their families. That security is not what gets them up.

The company value moved with the stock. Spear calls it an $8 billion company, then a $400 million company, a $600 million company, and later a $2 billion company. Guy Raz puts the market cap at $2.4 billion and says Figs

Trina Spear says Figs went public in May 2021 because the company should be a public company, not because 2020 was a year to cash in. Figs had scale and a disciplined approach to revenue and profit, and one investor would eventually need liquidity. They brought 150 healthcare professionals to the New York Stock Exchange, and those professionals rang the opening bell.

The listing came while COVID was still reshaping the business. Isolation gowns and other protective gear were donations. Figs did not sell them. The company did sell masks, including N95s and its own Figs masks, after shifting the supply chain to suppliers who could make that gear. A shipping container went from about $35 to ab

Heather Hasson says Figs spent $40 million fighting a lawsuit she puts at $800 million, and that the money was worth spending because she and Trina Spear expected to win.

Guy Raz says the case closed in early 2022 after a three-year fight, and the jury ruled for the two founders. Lawyers sometimes pushed to settle. A deal for $2 million, with nothing admitted, is one they probably would have taken, and that offer was not on the table. The board, already seated because Figs was public, refused to let the case sit and chose a trial. Hasson says the claim was ridiculous, and that they won because Figs was innovative, put out a strong product, and ran a strong business. The cash was only part o

Trina Spear says Thomas Tull invested in the Figs seed round and the Series A, then in 2017 bought out the other investors. An investor had told her and Heather Hasson in 2014 or 2015 to meet Tull, who ran the movie studio Legendary Entertainment, in case Figs scrubs could get into movies. They did not think a movie placement was the point, but they were trying everything. Tull talked about old industries that, as Spear retells it, he described as run by the mafia. She says he was not describing medical apparel that way. He pointed to what Uber did with taxis, and to industries that had not brought in technology or strong builders. He said Figs was doing that work in medical apparel, and he

Trina Spear and Heather Hasson say investors turned Figs down about three to four hundred times. The raise was life or death for the company, so they treated a slow or unsure reply as a no and kept pitching.

The reasons were blunt. Investors said nobody cares how a healthcare worker looks, because the job comes with blood and liquids. They also said the market was not big enough. Guy Raz put their figure back to them as about 20 million people in the United States, and the answer was still that it was too small. Spear and Hasson say a market that size is the wrong business to back. The opportunity is to create the market.

The money that did come was from contrarian investors who believed i

Trina Spear says Figs spent about double what rival scrub makers spent on the product and still charged only about 15 to 20 percent more.

Those companies sold through distributors and paid licensing fees. She says 60 percent of the price went to the retailer and 8 to 12 percent of the retail price went to the license holder, so very little was left to make a better scrub. Figs sold straight to the person wearing the clothes. With no middlemen, a product that cost about twice as much could still land only a little above the old price.

That is the price-to-value bet. Healthcare workers were already buying their own scrubs, and a better fit did not have to cost twice as much as the scrubs the

Trina Spear says Heather Hasson told her that working together meant selling scrubs out of the car. Spear was still at Blackstone and came to Los Angeles on weekends. The two of them stood on the sidewalk outside emergency rooms at 7 a.m. and 7 p.m., when doctors and nurses changed shifts.

Hasson wanted a product she called technical comfort: tops and pants with stretch, soft enough for a long shift, in colors she thought healthcare workers should have, including graphite and the heather gray of business slacks. Spear used those mornings to learn what people loved about their scrubs, what they hated, where they kept tools, and which pockets they needed. They also sold a lot of sets. Before

Heather Hasson says Figs started selling scrubs out of her car in emergency rooms, after a short path from a favor to a product.

In 2010 in Los Angeles she bought fabric off the shelf, made a pattern, hired a sewer, and sewed about 30 sets. They were forest green with a bright yellow Figs label. She sent them to a couple of clinics and did not think of it as a company. The shift came over coffee with a nurse practitioner. Hasson asked what her friend was wearing and called the scrubs garbage. In college anatomy, scrubs were one size, so she had worn extra-large ones and rolled them up. She drove to strip-mall scrub stores, found the same clothes, and tailored a pair. The friend, who worked

Heather Hasson says a trip to northern Kenya is what led her to Figs. Her handbag business had collapsed after her partner died of lung cancer. She had no money and no plan, so she went to clear her head. Travel was cheap. In school after school, teachers said children stayed home because they had no uniforms. A child put in a uniform goes to school with a different mentality, and that stayed with her.

Back in Los Angeles she had a few thousand dollars. Tie cloth is small next to the fabric for pants, so she made bow ties, neckties, and scarves in silk and wool. A job at Theodore in Malibu paid $9 an hour and bought what material she could afford. She sold the ties through a website, trunk

Guy Raz says that in early 2013 Trina Spear left Blackstone, moved to Los Angeles, and she and Heather Hasson shipped Figs orders from the apartment they shared.

They cleared the living room of a two-bedroom apartment and stacked the scrubs there in light plastic bags. The bags slid, so Spear sorted colors and sizes before anything went out. They called that living room a warehouse and used Shopify to send the orders.

The first units were not all made in one place. They tried production in Los Angeles, in China, and in Vietnam, hit a quality problem, and came back to Los Angeles to get the fit right before sending the work overseas again. Hasson spent long stretches in dye houses, factorie

Trina Spear put $70,000 into the scrubs company, half of a $140,000 retirement account she liquidated while she was still paying off business school debt.

The cash was her commitment to Heather Hasson, who had already done a lot before Trina got involved. Cashing out the account was a horrible tax decision, and the hit was 50% of everything. Heather had the company up and running, and they agreed on an equity split both felt good about. Heather is a creative genius, and her equity was greater than Trina's, in line with what was fair and with what had already been built. If the company failed, they both lose, and if it succeeded, they both win. Trina had gone to Harvard Business School and w