The Swyx Mixtape

Audio Source: https://joincolossus.com/episodes/10262551/pujji-a-primer-on-performance-marketing?tab=transcript

Transcript


The Execution Loop

Jesse: [01:17:39] Let me talk a little bit about why we built it, because I think that's a very important piece of backdrop. So we started the business when we were 25. In the first few years, like most businesses, it was really fun. And then the business actually had real revenues in EBITDA. And then we realized we were waking up, more often than not, shit-scared that somehow the golden goose was going to go away. And we said, "You know what? We thought we wanted to build something long-term and cashflow, but let's just sell it. Let's get this thing into an exit." We grew up really fast. Glassdoor started popping up with very negative things about the culture. My wife was like, "What's up, dude? You don't seem that happy doing this anymore." And we really got to the point where we said, "Man, we're not enjoying this and our culture is not great. People don't like the culture." And it is a very common entrepreneur offense, especially in the first business. And so we started working with a coach, and we said, "What's what's going on here?" And there was a few things, we started doing this thing in the Conscious Leadership Program. There's this book, The 15 Commitments of Conscious Leadership, which has been pretty life-changing for me. And I'll just share a couple of the concepts and then I can talk about the loop.

So the first concept was types of motivation. And there's these five types of motivation, according to this paradigm, and it's fear, extrinsic, intrinsic, play or genius, and then empathy or love. And that's more about the human experience, not about a person individually. And these are all, again, these are fractal. So we might feel these all five of them in any given day for given different things that are going on. And in general, we're motivated by them. And you think about fear, motivation as like a chip on someone's shoulder, "I'm not great enough." "I'm going to go conquer the world." And you think of empathy and love as like, "Man, Mother Teresa, I'm going to make everyone's life a little easier." Extrinsic is money, titles. Intrinsic is my own thing. Play and genius, I think of like Buffet, where it's like, "Oh, I just love what I'm doing. I'm enjoying it."

And they talk about fear... They're all effective forms of motivation by the way, and there's none better than worse... Fear tends to leave a negative residue on yourself and other people. And it tends to run out on a non-renewable resource. It's the common thing where someone goes, "I got my number." And you get to your number and you go, "Oh, no. Now I want that other number because I was scared. Now I'm here and I've run out of motivation." And love and empathy, and play and genius, tend to be renewable, and they tend not to leave a negative. They tend to lift people up as you do them. And so we started learning about this and had this moment where we were like, "Oh my God, we've been, more or less, totally fear motivated for a very long time. And no wonder the culture, no wonder everyone feels negative"

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And the other concept I'd tie into this is the concept of context versus content. And this is just another paradigm, which is, oftentimes, some really bright people especially go, "Oh, do I like healthcare? Do I like marketing services? Do I like..." And I got to this point personally, where I was like, "I don't like marketing services. Why did I start a business like this? And I'm not motivated to keep doing it." And with the help of my coach, he was like, "You were fear motivated. You made some money, you sold a part of your company and now you don't feel scared anymore and so you're struggling with what motivates you." And we went through this whole process.

And the context versus content idea is, it sort of like, from where are you doing it? And there's people who are mission-driven, cancer-curing companies, but if they wake up every morning and they're coming from a place of fear, or they're worried about how they show up in the trades, or how much money they're going to make, you'll hear that they're not happy, their cultures are not happy. On the flip of that, you'll hear of like insurance brokerage, or some random commodity business isn't sexy, doesn't have a great mission. But the people doing it, the founder especially is coming from a place of wanting to make his employees lives great and wanting to help people get better in their careers, or truly wanting to help his customers. And those businesses are flourishing cultures, and all the great things.

And so that's the concept of context versus content, from where are you coming? And a lot of the paradigm of conscious leadership is just starting to first notice. In one moment, you're feeling fear, in one moment you're feeling like you want to help an empathy. And we looked at OKRs, which we'd been using. And we said, "Gosh, there's two issues with them we didn't like, in particular, in most of the goal-setting processes and systems." We said, "They seem very fear-oriented." They just felt like you got to set this arbitrary goal out there, and you're going to rush, rush, rush to hit it. And it's got to be a big jump up. And if I don't hit it, oh gosh, that's not a good thing. And the other thing we didn't like about it was it tends to... To us, at least, it seemed way better for a business you understand and know, to go, "I can improve conversion by 20%." but in entrepreneurial ventures, you don't exactly know what's going to happen.

And so the motivation behind the loop is, can you build an organization and a culture that gets all the benefits of entrepreneurial thinking and approach, speed, ambition, creativity, problem-solving, tenacity, all of these amazing things, and mitigates the things that tend to make humans' lives not fun, the fear of fundraising, the failure, or someone getting reamed in a conference room. And by the way, I don't know that it's possible, to be clear. Bill Gates talks about himself as being a terror when he was building the biggest company in the world. Uber, we've heard stories. There are other stories like Red Ventures, where I think, truly, they have accomplished versions of this.

But that's what I'm most motivated by personally is an organization that teaches people, brings them up, but also is ambitious and exciting and they're doing that for the purpose of learning and growth of the people. And the people sometimes refer to them as deliberately developmental organizations that the businesses are there actually to serve the people's growth and the learning, not the other way around. And that's, I'd call it very aspirational, but that's my aspiration for what I do with my career forward from here.

And so our loop is the first version of like, "Okay, well, if you want that, you have to have an operating system that supports that." And so it starts with this idea of what's our desired future state. What do we want in the future? And that's not uncommon. And we give this example of JFK saying, "We want to put a man on the moon." It's like this is a motivating, exciting thing that people want, but it's not a thing you have to do, or you should do. And you often hear the words, entrepreneurs, and business, "Oh, we should really get this launched." Or, "We should really become the highest market share." No, no, no, it's not a thing you have to do, or you should do, or you must do, or the world ends. It's something you really want. It's coming from desire. And it's ideally coming from a play place, or of actually helping people in some way. So that's what it starts with. That's the desired future state, and that part, most people get, but it's disconnected from today's reality. It doesn't have to be where today sits.

And then the next point is there's this idea of current reality. And this is a really hard one. This is actually one of my biggest personal development challenges. I'm the guy who can do desired future state all day. And then you talk... I just did it. I just got you excited about my vision of an organization. And then current reality, you're like, "Jesse, you didn't do reviews for people here. Five people are waiting on their reviews. What the hell?" And part of current reality, the challenge of it is, first of all, seeing it clearly, and not with the rose-colored glasses, or not seeing what you want to see, but what's actually there, which I struggle with. And then the other part, and this is a really interesting one, is accepting the current reality. And so what acceptance means, what do we do when, "Okay, man, our numbers desired future state was 50% revenue growth, or whatever. And now it's 25%." We try to explain it, we try to blame. We go to these negative places, which is very common, "Oh, it must've been because these three things happened." And you know what? Honestly, if you just think about it in this very sort of meditation, whatever, mindful, it's just what reality is in this moment. This is the number. This is actually what happened.

And oftentimes, we don't think you can do the desire future state until you're accepting what is here and just fully, "Okay. This is where we are." And all of us go through that sometimes, where we have a bad situation, we didn't get in the college we want to. Eventually, then we go, "Okay, we're going to accept this. And now what? Now, what do we do?" So it's like trying to make that a real system, or process, sort of the basics, "Okay, here's where we are today. Here's where we'd like to be."

And then we have this thing that we call waypoints, and it's a sailing analogy. I'm not a sailor, but somebody taught this to me. And it's the idea, this is where it's a little different than OKRs, is when you're sailing apparently... I'm not a sailor... You don't just say, "I'm going to go from here to India." You go like, "To get to India, first I need to figure out how to get to Hawaii." So actually, my waypoint is next, I'm going to put my degrees in this thing. I'm going to get to Hawaii. Then from Hawaii, I'm going to look at where the best place to go is. I'm not necessarily going to go to Japan. I might go down to Tahiti, or whatever. Then I'm like, you're sailing around the world. And we think that's more similar to the process of building a business than OKRs. OKRs are kind of like getting into business school. There's a checklist, do your GMAT, write your score, whatever, go through this whole process... essays, get your recommendations, and then you get into business school, or not. This is much more of a, "I don't know exactly what's going to happen." So then the way you set goals is much more about the hypotheses you have, doubts you have, which is an interesting one like, "I'm not sure that people will buy this product. Let me launch an ad campaign to see if people will buy it." Or, "I'm not sure that the content is going to get that in. Let me launch five of these things to get content." And it tries to really engender that beginner's mind. Sometimes we call it learning leverages goal. So learning leverage means, what can teach me the most in this moment about what I'm trying to figure out? There's some prioritization against them, but generally, you're operating less from a, "I must hit this metric or 0.7 of this metric", and more of, "Where do I need to get to the next step and what's the progress that I'm going to get as it relates to that?"

Then what do you do? So you set that all up, then you do what we call entrepreneurial rigor. And this was a learning we had after a long time, which people would say, "I'm either really rigorous and analytical, and I analyze everything, and I come into it." Or I'm like, "I just hustle. I just get it done." And neither of those quite satisfied us. And we said, "Okay, there's a two by two here. There's hustle on one vector. Yes? No? And then there's rigor like, are you being analytical? Yes? No? And we actually use it as a coaching technique internally, which is like, "Hey, you're really good at analyzing but when it comes to getting stuff done, you need some work." Or, "You're really good at hustling, but we need you to be a little bit more analytical." And we think that the best entrepreneurs do both of those together. So they're looking at numbers, they're reacting, they're constantly going through their own version of this, and that's the way you execute. And you try to accomplish those waypoints.

And then the last part of the loop is accounting and response. And so accounting, there are a couple of interesting things we learned, accounting is separate from the response, because think about what typically happens in an organization is, I ran my waypoints. I didn't prove the thing out I thought I would prove out, or the numbers didn't come the way we wanted them to. Immediately, if you're an executive or you're a person, the narrative starts to shape around that. Why did that happen? What's next? And we said, "You know what? Let's pull all the emotion out of accounting. Accounting is just what happened. Tell me the facts, tell me exactly..." And the facts could be, we missed this number by this. We beat this by this. Accounting, we realize, and we started doing it in meetings, it's like a five to 10-minute process because there's just no story. There's no narrative. There's no nothing attached to it. You just go, "We thought this, this is what happened."

And then the response is a much more interesting conversation, "Okay, what can we learn from this?" "Oh, you know what? We're pretty bad at setting goals as it relates to how many creative we can build in this much time. We're pretty bad at setting goals around X, or Y. Maybe we didn't actually miss the mark. We're just not good at actually setting the goals." Or, "You know what? I don't think we have the right people who can do this." So the response is a separate activity where you start to think about... And the response can tie you back into any of the three buckets. So you can say, "You know what? I think our desired future state was off. I don't think people want to buy direct-to-consumer rubber gloves. I just don't think it's a thing. Yeah, because my waypoints taught me that nobody clicked on the ads I ran. It could be, I was testing the wrong things in my waypoints, or it could be my execution wasn't where I'd like it to be." But then based on the response, you start that cycle over. And again, I'm not sure that any of this is super original. The idea behind it is language matters, the approach matters, the words matter. And it's about learning and growth of the people and of the process, and not about must hit this goal at all costs. And we're trying to make it fun, and enjoyable, and a play orientation for building businesses and entrepreneurship, and not like life at all costs has to be put in this direction.