April 30, 2019
Intro: Hey guys, welcome to GO FIGURE. My name is Nadiem Makarim, CEO and founder of GOJEK South-East Asia's first Super App, which recently became a decacorn. GO FIGURE is a podcast dedicated to expose the inner workings of ambitious tech companies in the emerging world. Hope you enjoy it.
Nadiem: All right guys, welcome to the first ever episode of GO FIGURE. Happy to have you guys here.
Kevin: Happy to be here.
Andre: Likewise, I'm excited.
Nadiem: It's awesome. Um, I'm the, I'm Nadiem Makarim. I'm the CEO of GOJEK. For the listeners that do not know us, we are a Super App company in Indonesia, um, largest tech company in the country and now in various other countries in Southeast Asia. I want to just do a quick introduction. We've got the president of GOJEK here. Andre. Uh, we go a long way back.
Nadiem: Andre was the first ever, uh, investor in GOJEK. That decided he was just doing way too much work for one of his portfolio companies and just decided to join in as their president. And Andre handles all kinds of strategic partnerships, overall strategy and fundraising and a bunch of functional organizations in the organization. We've got Kevin here, our co founder, and leading all things product, uh, in your organization, particularly our core services and mobility and food. Uh, we go even longer way back with your friends before we worked together in Rocket Internet and Zalora here in Indonesia. And then, uh, uh, I believe I poached you twice.
Kevin: That is correct.
Nadiem: Is that right? Poached you twice
Kevin: the last time
Nadiem: and you're regretted both times
Kevin: every day.
Nadiem: And, uh, and, and now we're here. Maybe we should talk a little bit about why we decided to start this podcast. Right. At least from my side. Um, people were getting very excited about some of the talks we were doing or lectures or seminars, but I felt that they weren't getting the nitty gritty of it all and they weren't getting the inside look. They weren't getting the unfiltered kind of insights to what we learned. And so I guess that's why this first episode, I really wanted us to focus on the biggest mistakes that we made on our path to becoming a Decacorn. Right? Because people always talk about like, why you sit, see why you're good and what are the strengths that led you here. But people don't really talk about the mistakes you made. Very often. The are much more important in your trajectory. So I'll kick it off with that. And maybe Kevin started off, you had a few points I wanted to borrow
Kevin: Oh about, about specifically about the podcast or it's
Nadiem: about the podcast,
Andre: why podcast
Nadiem: start about the podcast first.
Kevin: Yeah. I think you kind of echoing you what, what, what you said. I, I think that, you know, the industry has a lot of bullshit. Uh, there's a lot of, um, there's a lot of people who, um, I think in, in especially like when you go on these conference tracks, like people are always, there's an agenda right there. We're trying to sell the company, we're trying to sell the individual, you know, whatever it is. And, and an oftentimes, you know, it comes off as use mentioned, like, you know, too polish, not real. Um, and I,
Nadiem: and generic
Kevin: Yeah. Yeah. Way too generic. Exactly, exactly. And I do think that, um, I dunno, like, I'm sure both of you can kind of agree with this. There's a lot of people who kind of go to you personally for like advice, right? Like, oh, what, how did you guys do with this and that and that and those moments when you kind of like stand there, like, you know, on a one on one or like a closed group setting, it's probably when you give the best advice, right? Yeah. Realistically. Right. Um, and I think that, you know, having this format, uh, kind of expands this, you know, beyond the people who can personally reach out to, to us. And I think it doesn't mean that, you know, we're so special or anything like that, but you know, we've, I feel like we've really lucked out kind of getting to where we are and we've had a lot of unique opportunities to kind of learn and grow that others might not have had the experience yet to. And I, I love the fact that we can kind of have very unfiltered, unstructured, um, not very well planned conversations around a topic that, you know, we all have unique experience around. So I, and going forward like, you know, having more, uh, other guests kind of talk in the same way I think is super exciting. I think.
Andre: So likewise, I think the, uh, so we, we all forget that, you know, this region is from a technology standpoint is relatively very new, right? So that I think, you know, all of us are so excited about the future of the region overall. So obviously, hopefully with this openness, kind of unfiltered, uncensored can have conversation. People really understand what is kind of the common pitfalls and really like strategize what's really important for their own entrepreneurship going forward. So that we can actually help build that ecosystem together because otherwise, you know, all of us are busy with our day to day and then going to conferences and meet like, you know, people one, one by one, it's not scalable. So this probably one of the most scalable way. And hopefully we can also attract other people at a great founders, great management and even like people from outside to just come here and it really like share their, um, you know, some of their, you know, interesting points so that we can actually make this much more collaborative, uh, you know, effort going forward.
Nadiem: And I think that, you know, a lot of these discussions about, uh, specifically about tech Unicorns as well, they often take the perspective of like developed markets. Yeah. Right. And global leaders. So we're talking like Silicon Valley and of course China, but no one's really talking about these emerging Unicorns and in the emerging economies where the infrastructure is so qualitatively different, like there's so many more things broken in the emerging world that technology has, I think an even bigger leap frog effect. Right. But because of that, also the mistakes are also way more dramatic than we make. Right. And are so much more visible. So hopefully by discussing some of these mistakes, we can, uh, get people to experience more, learn something and maybe we'll learn something from this discussions as well.
Kevin: I think that that point is really important actually, that, um, a lot of literature, the knowledge has mostly come out of the US and now starting to come out of China. Uh, and just looking at the US and China, you can see that they're these huge companies that have kind of come out of these ecosystems and yet the knowledge that you get is very different. Right? So there's no, I think, I think on that same note, the same wood should be able to be said about companies that come out of this region. And Dude, I think, I think, you know, some of the challenges that we've dealt with are, are definitely not a ones where we can just copy paste learnings from the US and China.
Andre: remember that it's also unique problem for a lot of companies in our space, like emerging markets. Tech is actually, we also need to face actually the global giants that wants to go into our market. So the uniqueness is not just about how to deal with our local problems, we're also how to actually compete against the best of the best
Nadiem: Which is super crazy, right? I think we mentioned this a few times, like at one point a competitor that we had to go against. You know, their junior engineer made more money than the CEO of our company. You know, like in terms of salary and just to show that that discrepancy of, of both capability and funding, but still we're seeing emerging Unicorn succeed in their own right. And some of them are actually kicking ass. Yup. Right. Uh, I think a lot of them are kicking ass and we don't know exactly why. We have some hypotheses of why these local players are really kind of dominating. But maybe in the discussion today. So let's talk about mistakes guys. Mistakes. What do we mess up on?
Kevin: I think, I think we have like a few unique situations that might or might not be, well, I think it's relatable, but probably the pace, right? I think, you know, we went from, we launch our app on January, 2015. All right. And, uh, you know, we had like having like 40 to 50 employees at the time. Uh, and now we, we have more than 3000. Right. And it's only been like three under four years, right? Yeah. Uh, it's an under four years.
Nadiem: Yeah. So for the listeners that don't know, our APP launched January 1st, 2015
Nadiem: So we're a four year old company.
Kevin: January 15th,
Nadiem: sorry, January 15 my bad. Yes. Yes, yes. Just kind of crazy.
Kevin: It's insane. Right. But, um, and then obviously most companies will not experience that level of hyper growth. Uh, and you know, we had that in a very compressed timeframe, but I do think that a lot of scale of a lot of scaling an organization, the knowledge of how to scale the organization I think was missing and we made a lot of mistakes as a result of that. I think one, I look, you know, we'll, we'll, we'll kind of go through a lot of these, but I think one, one area that I think was particularly problematic, um, and I think we're still dealing with today is a communication, internal communication. Um, and, and this covers many things, right? Like I think at the very highest level it can be something as simple as a communicating what is the mission of the company and what's, what are the top priorities for the company. You know, we have, and we should've done this when we had a hundred employees because even at a hundred people, keeping a hundred people focused on the same thing is already a challenge, right? And now we have like thousands of people across multiple countries. And I think, you know, we under invested in this infrastructure and so something very as simple as just okay, this is the mission of the company and this is what's important. I think just having a way to communicate that effectively and consistently and knowing that everyone is on the same page. I think it's something that, you know, we definitely under invested in and I think as a result every a senior management team in a startup, but it has more than a hundred people will say, oh I have alignment issues. I know it's a pretty universal thing that everyone will say it to some degree we have,
Nadiem: what does that mean though?
Nadiem: What is alignment issues? Me, I keep hearing this all the time. Like I feel like we're not aligned. I feel like there is a a more specific thing that people are trying to get at when they say we're not aligned or when teams are not alive. Did they feel excluded? Do they feel it's too top down? What are the real consequences of communication failure?
Kevin: So I think the alignment is, I mean there's, there's maybe, but I think if you specifically want to want to get into alignment. Alignment kind of means that, uh, so these, these usually come up when A), there are dependencies, right? So, uh, let's say a team A, uh, wants to launch a critical new feature that they think is really important for the success of, you know, the specific team or product at this team resides in, right? Um, and then it turns out that, um, there is a dependency, uh, to launch that feature, uh, because there's another kind of maybe infrastructural piece, uh, or operational piece, uh, that needs to get done well in order for teammates have a successful launch. Um, and so the communication of what's important allows for that alignment to happen, right? So, so for example, if everyone knows that Hey, feature A is a key part of the company's vision and the key part of the company's strategy, then if that is drilled into the heads of every single person, then that alignment issue becomes much easier because then there's a reference point. The team A can say, hey guys, um, this is, you know, we all know that the company is gunning for X this year. Uh, and because we're gunning for X, I'm working on Y. Please help me launch Y. And in a way, if everyone is aligned and executing based on that strategy, either they're already kind of working on, uh, working on that thing right on that feature or getting buy in to support that feature or something.
Nadiem: So what was, what were we doing before? Before we were just simply thinking, all right, here are the features that we need to get out, right? Here's what I believe is most important for this product, for this product, for this functional org, etc. But we weren't actually, we didn't have this overall company vision document and we didn't well it's embarrassing to say this, but for a while we were operating without companywide OKR,
Kevin: Yea, no company wide planning tool
Nadiem: There was no planning tool that everyone could rally around. Right? And so, so the consequences of that is that people are constantly feeling shafted because their priorities were not being right. Right? They weren't getting. So then this became this whole dogma of top down, Oh God, we're so top down. Right. And it..
Kevin: Because that was the only way to get it done
Kevin: somebody, somebody senior has to say, Oh, do this, do this, do this. And they would fix the alignment issues on a point by point basis rather than having everyone kind of rallied towards the same direction. Right. There's, it became a lot more necessary for people like, you know, people talking right now to get involved. Uh, because if we didn't get involved, they would just swab bowl and it was unclear. Like why should we work on this?
Andre: I think one of the, uh, I mean, just to kind of put it a different perspective into this, sometimes there's a lot of mistakes, especially early stage.
Andre: Uh, between setting up what is a business vision versus a product vision. And the reason why I said that is because I think we all, especially because we're all like first time doing this, or second time doing this, you don't know what you're gonna know
Kevin: first time at scale.
Andre: Yeah. First time at scale. I mean most of, most of any, most of like, uh, founders or management team in this part of the world's first time doing that as well. Sometimes you are getting bought in into this business ideas that's very consultant like if you may, and this one is big, that one is big and the time is super huge.
Nadiem: Can you explain that? What like what like we see another company doing successfully,
Andre: I mean in China and it's always the case, right? You didn't China, there's this company or in the, in the US there was this company that does this. It's super huge. Yeah. It could reach to like this many billions of dollars and this is what they've been in like 10 different features that they do. And suddenly you are actually not, uh, you know, creating something that, a differentiation, becoming that silver lining and how you actually engage with your customer or businesses that you serve. But then you are actually chasing businesses and hence as a result sometimes the prioritization of what companies do follows that business logic, which doesn't really recipe in a reciprocate with kind of the how they actually create alignment from a product standpoint. I mean you know like at the early days we actually had maybe a ballot and like a little bit more to business like a if you may, but with the labs that actually some of the products that we do has a silver lining to it, right? Meaning the number one is obviously how we actually use drivers are drive from, you know, our driver base. So actually do many different products that we have. But it's actually, if you think about it, it wasn't by design, it was by a little bit of luck,
Nadiem: A lot, a lot, a lot of luck.
Andre: I just want to be,
Nadiem: We can have a whole podcast on the role of luck as well.
Nadiem: No, I love what you said about that because honestly I think a lot of entrepreneurs at different stages of their development and their personal journey often focus on successful use cases elsewhere. So they're chase exactly what you said, chasing businesses as opposed to chasing problems, problems and problems can exist without first a business model, right. If, but if you can crack, generally speaking would GOJEK has found throughout its whole history is that if you can crack a fundamental user problem, you will find a way to monetize it. Sooner or later you will find them. And that's very true. I think. I think a lot of, uh, the dogma, Silicon Valley was very correct about this, that first chase the problem and then revenue kind of comes in. But of course it depends on which stage of the company. I think we did make a lot of mistakes, right. Where it's like, okay, we see that that's successful, let's gun for that.
Nadiem: Instead of is this really solving a fundamental problem for our user base? And when we started looking at products from that problem centric approach, we noticed conversion to that product exponentially increasing. Yeah. Right. Yeah.
Andre: And once you actually, I mean, I like the work every time to use the word of decoupling, right. Uh, because any problems, if you decouple it, then you can see each which area that you want to focus on and really like create that, you know, 10 x experience, uh, to kind of solve the problems of the customer. And then you work your way on the other areas that that combined becomes a, the best experience, right? Because if, if, you know, cause that's, that's actually what, you know, it's common mistakes that is being done. You see one product as the two, a whole holistic problem and hence, you know, sometimes it becomes like all over the place, right? You, you don't focus on very specific things that are relatable to your customer yet and yet you actually expand your time spending resources to actually go pretty white, uh, unnecessarily, right? Uh, and through the coupling, you can also then have a sense that how are you going to actually play your role in the ecosystem? You can partner with else that solve the other part of that problem, right? And holistically, then you create a very strong, uh, product.
Nadiem: But what about the counter argument? She has a counter argument here to seeing that there are some products that get released out there that seem to solve a specific problem, but structurally there is no way to make net revenue out of it. It's really difficult. I mean, you see a lot of startups face this problem as well. So what do you say to that? Is that because they're just structuring the problem differently? Like for example, when we launched GO-MART, you know, we, we kind of struggled with how to monetize a service like that, but quite a few people were using it. But if we are, you know, dependent on like for example retailers is that also already have thin margins, we were not able to generate net revenue. So how do you, how do you respond to the challenge that if you don't think of the business model in the beginning, then how do you expect to create a sustainable business at the end?
Andre: That's actually where, uh, it's very important to focus on what you are as a company and you are kind of key core strength that you wanted to deliver right? In the GO-MART example that very clearly that the O2O model doesn't really work unless you actually do two things, right? One is if you do your own retail, B2C, right? Like Amazon Fresh or do you actually go very deep into the advertising and brand advertising model to actually build them? But, and we made a decision, uh, if you're, you know, like that we are not both of that company because our value prop is using our marketplace of drivers to create the fastest or to all market. So then, you know, decided to actually shut it down, right? But if our core proposition is retail, you know, really like focusing on logistics and fulfillment of goods, then that might be a different way to think about it and that might actually work for other businesses that actually focused on that. Right?
Andre: Uh, and obviously companies grow eventually could actually, you could also, you know, consider that, but obviously at that stage we were, no, that's not priority because that's doesn't start a file where core value propositions.
Nadiem: I'd like to slightly pivot right now where we've been talking about market strategy and generally a product strategy. I'd like to turn a little bit and talk about people strategy and perhaps some of the mistakes that we might have made. And I want to kick it off by, I think for me, one of the, one of the biggest lessons learned I had was, I mean, you were there from the beginning with me at, I think in the beginning we really treated engineering as a factory, right? Engineering was this factory of yes, they're very smart. It's a very smart factory, but they were still a factory. They executed the product vision of the founders, right? Essentially I, and for a while that's what happened. Um, and I think, uh, over time we quickly hit the limits by which we could actually scale that system as, as a, as founders were not technical in nature. Um, and I, I think that, you know, one of the biggest learnings for me personally was that engineering is not a production center. It is not a cost center. It is in fact of value generative center, which means that harnessing the creative, the collective creativity of an engineering department is one of the most powerful forces that, to be honest, we did not harness in the beginning because we had that mindset and it's slowly changed with, but what, what do you think changed that? Is it, is it because we started getting superstars, uh, in the engineering department that, that changed our mind and said, and then kind of pushed back on us and said, wait a minute, we're thinking of this the wrong way. What do you think happened there in that transition?
Kevin: I think, uh, that's why I think it actually ties back to what we were, we were talking about on, on communication, right? I think, uh, I think a lot of the pushback that we got was that, hey, give me outcomes you would like.
Kevin: Right. Rather than just rather than telling me what to do, you know, you know, tell me what are we doing and why, uh, and then let me figure out the way to get there. Right. And I think it's very,
Nadiem: Do you think that's the only true for engineering or is that applicable? To most high performing teams?
Kevin: I think at the end of the day, you know, if you want to hire, recruit and retain the best talent, they need to feel like they are creating value. Right? And I think there's only, uh, uh, I think for the most part, you know, that if you are looking for smart, ambitious people and you want them to be here, uh, you need to provide them a platform to really create, um, and rather than kind of just execute someone else's thing. Um, and I think, you know, we kind of value having people who have an entrepreneurial mindset here. I think culturally, um, even though we didn't think about it consciously, culturally, we tend to resonate with people who have, you know, a certain entrepreneurial mindset. And as a result, we got a lot of people who are like that. And as a result when we were at that phase, when we were literally saying, I have 80 features and I want 80 features all out in the next three to six months, um, it kind of, you know, for somebody who is entrepreneurial, it seemed like, you know, it's almost the opposite of what they would be looking for. And as a result of what you said, you know, they, they push back. Um, uh, they push back and um, you know, we didn't really, we kind of like struggle to kind of get to a better place. And that's kind of a honestly like some of the things that we are talking about on just internal people issues I think. I think again, I would like to talk a lot more about communication. They don't because I think communication is kind of the, the, the root. It's not a root cause of the problem. It's a, uh, it is one of the, it's one of the things that will help us solve this problem because without very good a communication infrastructure, how do we unleash all of these people that are clamouring a have to have their ideas heard.
Nadiem: That's super fascinating, right? So, so communication is not just a tool for alignment communication. What we've learned over time is communication is actually what unleashes bottom up innovation and creativity. And why is that? Right? What is the mechanism by which that that works? The mechanism is that if you give a set of broad generic targets or direction to a team, then they are able, they know the problem closer, they're closer to the problem than you are. So what they're able to do is think, okay, if the company wants to hit that target or the company wants to go into that direction, then these are the things based on my intimate knowledge of the problem that can contribute most to that target. So you're hitting many things and once I'm, you're creating a freedom and autonomy to decide which features or which things to build, which initiatives to build that can contribute to that. You're creating agency. Yes. Creating a sense of, I'm actually contributing through my own ideation, through my own creativity towards the company target. And then thirdly, it's also giving them a sense of trust. Like, because, because we're not telling them how to get there, we're telling them where we need to go, but not how to get there. So I think a lot of people assume communication is like some kind of admin role in an organization, right? It's some kind of uh, uh, okay, we need to do newsletters, we need to do tracking, we need to do this, we need to do like, oh, mission, vision. It's, it's not just that it's actually building the framework by which ideas can scale up.
Kevin: And that is why communicate with purpose. It's one of our values, right? And I think in many ways we didn't really honor it as highly as we should. But I do think that's why it's important. And for people who are first starting out, um, I, I, it's never obvious, right? Like we know when we were all, you know, sitting in a room, uh, and like with like 30, 40 people, it's not really that necessary, right? Because there is so much of that context that comes out. Like even if we don't communicate in words in emails, in like, you know, structured, yeah, people know what's going on and people go, why it's important just by overhearing conversations, even right. But once you scale beyond like a hundred people, how do you kind of, you know, do that like, and that's why it's like on one hand, on one hand I think founders tend to have like this allergy towards bureaucracy, right? And there's kind of like, all that stuff that is bureaucratic is not good. Which, you know, I think, I think it's an okay mentality to have. But I think if there comes a point when you have realize that there are tools and processes and mindsets that are necessary in order for your organization to maintain hypergrowth in a way that is healthy.
Nadiem: Let's, let's talk about these tools. Let's talk about these tools. Like what are these specific tools that we actually implemented kind of late, right? We wished we implemented them earlier. Yeah. That actually, uh, transformed how we operate as, as a much larger organization.
Kevin: I think obviously OKRs right. Like we're, we're like in year one really.
Andre: Yeah. We should probably explain a little bit OKR what OKR is just generically.
Kevin: Yeah. Well generically. I mean, they stand for objectives and key results and they're kind of, they were popularized by, by GOOGLE in reality and it's kind of been one of the main planning tools I would say for most technology companies are actually non technology companies as well. Uh, and essentially what it does is, you know, you have an objective, which is kind of like a mission, uh, that, you know, let's say, uh, let's say, you know, GOJEK wanted to get into social, right?
Nadiem: Let's use this podcast as an example.
Kevin: Sure. Let's use this podcast. Like, I mean, I mean obviously like if we, if we think about the overarching like mission, uh, of, of, of, of this podcast is to provide a platform where people can share learnings, uh, that are relevant to building a technology company in Southeast Asia. Right? Right. That's kind of like merging markets or emerging markets in. Yeah. Right? Um, and then we can set some, you know, some objectives and key results about, okay, that's the mission, right? So, you know, what are we going to focus on for the first three months of this podcast? So let's call it the Q one GO FIGURE OKRs. The Q1 2019. Okay. I was like, like one is just, hey, we're just getting off the ground right now. Right? So maybe, uh, there could be an objective around just hygiene on quality, right? Like, how good is the audio? Uh, how good is like the video content? And so maybe you can say an objective could be offer a world class podcast media experience, right? Right. And that could be something around, you know, uh, video quality, like some key results. So it has to be quantitative.
Nadiem: So that's the objective. And then subset key results, key result is like a reliability of microphone sound correct. Or percentage of static sound visible. Right? And all these, yeah. Thanks.
Andre: Okay, so production quality, right?
Kevin: So we have a mission, right? But because it's our first quarter, maybe we should just focus on hygiene, right? So maybe hygiene objective one is just the media quality, bunch of key results, quantitative ways to track the quality of the, the media that we're pushing. Another objective could be around a guest pipeline, right? Right, right. Bill, a guest pipeline for the first year
Andre: or another objective is because we also need to make sure that it actually attracts pretty good audience. It's like, you know, experiment engagement metrics to distribution channels, right? You know, how many views, how many like referrals and what not.
Nadiem: So that's, that's a little bit about kind of our mistakes in not investing early in communication, not investing early in target and alignment documents like OKRs um, I want to kind of, uh, talk about talent acquisition a little bit because, um, you know, I think in the, in the beginning, one of the things is when you don't have enough funding, all right. In the beginning when you are funding constraint, there is always this dilemma that founders have and senior management teams have about, do you get a good enough person that can allow you to execute quickly right now even when you know that that person may not be able to scale. Uh, when the company grows or do you gun for upfront investment of, uh, of really top talent, uh, and sacrifice budget. Uh, but knowing that that person can scale this is a, this is a huge dilemma that I think a lot of people are interested in about how much should start ups and at what stage invest early in world class town.
Andre: I mean, I mean there's, there's no, unfortunately this is where there's no silver bullet. You know, that's right and wrong. But if, if we have to learn from our past experience, obviously invest upfront in world class, people will actually be to the, um, my preference. Um, and the reason being is that because sometimes there's also this mentality of founders or early senior management, they always say that I can, I can do this things as well. You know, this is not very important. I can do that. I can do that as well. I can fundraise while I lead the company, while I go meet the government, while I actually handle the engineering team and do marketing.
Andre: It's like me doing, that's like me being head of engineering and him being CFO. Exactly. We just got a ridiculous, if you think about it now?
Andre: Which I think unfortunately a lot of people will face that because it's not easy to attract talents at the early stage because you know, until you prove it out. But that, that aspiration and knowing that if he can find people, can they can replace some of your function with 100x or 10x better, that actually will immediately help on ways to execute the company better. Because at the end of the day which it was always trained to kind of get collective great people in the room, which reduces the burden early on on a certain sets of function, which is basically, uh, creating inefficiencies in the way that, uh, you know, founders or you know, senior leadership is actually executing. So that's actually,
Nadiem: is that, is that, is that paradigm of the 10x talent, have you, do you fully believe in that? Is that just the cliche or does that really, is it worth really one great person is really worth 10 okay people.
Nadiem: And that has applied in all, I know that you've recently kind of like done this experiment with a legal team and with several other functional organizations in GOJEK and found great success, right? Particularly on how it's scaled you.
Nadiem: Right. Can you talk a little bit about that? Like what was the impact to you as a senior leadership, um, essentially another co-founder in the organization. Like what impact did it have to your ability to perform?
Andre: First of all, you know, we all need to recognise that any of us, again, given that we're doing this first time, we're not the best at everything, right? So immediately you will see that people that has really like key focus in certain functions, uh, when they actually perform will do much better job. They either come from the experience of relevant background to that function or people that has actually experience in like other companies that has similar problems. So that's the first, number two is most importantly, I mean, we all as senior leadership, this crazy growth companies, you know, have only so much time to think about everything, right? You always think that, oh, you know, if we have more time that we can do this. Uh, so, so in reality, that time saving for people to actually focus on what really matters, especially also allowing a senior leadership to also care about the other people part, right?Because, uh, you know, you'll see that or later on as company grows culture and people is actually one of the very, very key important metrics that as leaders needs to actually put, put together. Then all that time that you can actually have to then spend, uh, spend your time on the really great things. Will actually be established once we actually, you can actually get great people to replace some of your function. In my case, um, I used to be, I used to be used to replace Kevin as the CFO, you know, probably 5% better job as my guests. But then as you know, as a CFO, it handles all the backend of finance and accounting and tax also handles you know, corporate finance activities, fundraise, M&As. I'm probably the best lawyer we had back in the days. I'm actually the government relation guy. The corporate communication, you know, by saying, all of that, you already see the faults in the stars, right? Um, and obviously in the last one year, we're, we're kind of lucky to invite like the best of the best that replaced that function. And now I'm thinking about strategy together. Uh, in we as a group cannot thinking about strategy. What's next? How do you align people internally to achieve those strategy? How do you actually put in the right amount of work to build some standard, you know, standard approach to make sure that the newest thing is being achieved and you know, really having the time to kind of think, uh, and, and what's, what's next. Right.
Nadiem: But I think that's why kind of like in the mindset of recruitment, in the beginning we were kind of like, let me find the smartest people who can execute something that I tell them to do, who has a lot of discipline, a lot of smarts, and a lot of basically critical thinking, right? Yep. But as you scale up and the organization scales up, it's extremely important. And I think this is my personal lessons learned, is to start finding people who you think can be better than you at that. And this is a very tough shift because a lot of people see hiring as a subordinate activity instead of people hiring someone to eventually replace them. And for someone to replace them, they have to meet. They have to have the potential to me better than them. Yes. Right. And so a lot of people say this, and I've heard this mentioned a few times, but it's easier said than done. People consistently do not.. Leaders consistently do not hire people that are better than them and it's a real problem. And some of it has to do with insecurity, right? So a lot of it has to do with insecurity. A lot of it has to do with, I don't want someone kind of challenging me too much because I'm too busy to have to deal with someone who's opinionated. I just want someone to take this off my back.
Kevin: Yeah. I think, I think what people need to realize is that, um, in a, in a fast growing company, uh, responsibilities expand very quickly. Yeah. I think that the mistake that I see a lot of, I guess the way you put it, less secure leaders act is that, okay. Um, there are, there's always this question. If you were, let's say, let's say I'm managing somebody and there was another senior person that I was interviewing for a position, uh, and I asked them to kind of help interview their immediate response is usually like, oh, what does this mean for me in terms of my job security? Right? Uh, and it, it tends to be.. The more mature ones tend to realize that, look, you know, project out 12, 18 months from today, what is all of this going to look like? And will I be able to handle this? Right? And, and in a fast growing company, the answer is usually no.
Nadiem: Right? and almost always,
Kevin: Almost always, almost. You almost always no, right? And, and, and, uh, the ones who kind of have that security and knowing that in 12 to 18 months there's going to be a beast that I cannot handle. And having somebody who is more experienced than me, that either I can learn from, uh, or it can totally take it away from me, it's actually going to be valuable. And I think people underestimate in these type of environments how dynamic someone's career can be, right? Like you'll have people who are let's say 15, 20 years of experience report, somebody who has seven years of experience. Um, and these things happen, these things happen. And I think, um, one of, I guess I don't think I have a learning here per se to kind of, you know, talk about, because I still personally struggle with how do I communicate this to people. But I think in generally, if people can kind of realize that, you know, we're on this crazy rocket ship, uh, and there will be enough to go, there will be enough work to go around and it, and you don't know everything, including ourselves. Right. I think that's what part of the reason why I'm excited about doing this podcast is to kind of talk about that. You know, even we don't have anywhere near all of the answers. And to your point on, and sorry, this is another segue on like, I'd like to offer something like fairly actionable, which is I personally, I like to only look at and most 18 months if not 12 months and kind of when we hire, do we hire for scale or do we hire, you know, whatever we can get like short term versus long term. I think, you know, Andre's, right and that there's no science per se to it. But the closest I have to scientific is let's say 12 to 18 months. Let's look at this job in this function, this team, whatever it is, and let's project out, you know, some period of time, 12 to 18 months and say, what does this have to be by then? Right. It's you know, it's fairly easier to think about what's going to happen in 12 months right? Then like three years like is this person going to scale a 100x? Who knows because we didn't even know what scaling a 100x means for that team. Right. But we can know what does the next year roughly.
Nadiem: It's so hard though Kev cause all those CVs that come in.
Nadiem: Once you put that litmus test of 12 to 18 months forward.
Nadiem: Almost invariably the large, vast majority of that percentage is the answer is no. Okay. We'll not be able to hit that. And then you realize which is maybe a good thing.
Nadiem: Cause you realize then, oh man, I totally under-expected. The capabilities required for this role. Yeah. Right.
Kevin: I agree and but that's why I think it's important to think about it that way. And it kind of going back to the whole point of setting vision and strategy, right. If we have a rough sense of what 12 to 18 months looks like now that we should have somebody today who can execute over that and in that 12 to 18 month period we'll evaluate like can this person do the next 12 to 18 months?
Andre: Because people grow. The best outcome is you get lucky in getting 5 to 10% of those people that you hire for 12 to 18 months to be people that can grow for perpetuity. Right? I think we've actually found really amazing people that first job is to GOJEK and turns out he or she is scalable to perpetuity.
Nadiem: But we didn't know
Andre: but that's ...
Kevin: We knew for the next year you could trust this person. Yeah, yeah.
Andre: But so, so that's actually just the process. Uh, but if you never took that action, then you will never meet that probability. The other thing that I wanted to bring up in this case as well, that sometimes you also then find those people that can be your core leadership group. And the reason why I say it, this is I think the other part that we never discussed very openly is that, I mean this types of jobs from a mental health perspective, it's very demanding, right? It's the fatigue. I mean, the best analogy is actually what all sprinting in the marathon. I mean you always say I'm sprinting, sprinting, you know, you thought that you're going to, you're gonna like relax
Kevin: on in a month.
Andre: Yeah. No, no, no way. It's sprinting and the marathon. Right? Because no one has seen what the
Nadiem: I know, it's kind of annoying and I do it too. I tell people guys, remember it's a marathon, but I think if someone said that to me, I'd be really pissed off
Nadiem: unfortunately I have to sprint during this marathon.
Andre: Let's realise that upfront, because as founders, as core senior leadership, the mental health is very important because most of the biggest issues, biggest mistakes, biggest decision that needs to be done and putting a poker face in front of everyone and say everything will be okay. Yeah. It's just such a demanding requirement for everyone. So if you don't have a core leadership group that you can trust and share that burden, that it's together, we can solve this together, we can withstand this. It's really hard. It's really hard cause that's, that's the other part. I mean people see this job as very glorified. Nadiem is so cool man. He's so successful. I want to be like Nadiem. But guess what? it's not an easy work. I mean everyone's just cursing how, you know, how problematic it is. I mean the good thing is in GOJEK one of the, probably the good examples, how we actually become who we are is that we have this group, right? I mean we have an extended group, people that has the similar mindsets and stuff so we can share the burden to carry. It's not just about one or two or three people that needs to think about those burden. It's a collective of very committed people that wants to share that
Nadiem: You know, onto that point and talking about this kind of like essentially intimacy of the leadership level, right? And being able to have an authentic almost friendship, like well, not, not almost true friendship. Yeah. I mean we, we see each other more than we see our wives, just by hours spent per day. Right. So we get pretty close. Um, but this is a really interesting dynamic because when we're talking about mistakes, I don't know if this is a mistake or a gain, but you know, me and Kevin, we used to have a lot of debates about should leadership team be a sports team or a family? Right. And I think you were on the, on the sports team side, uh, and I, I, and I was in the beginning kind of like, okay, it should be family. I think in reality, in my opinion, now I've settled somewhere in the middle.
Kevin: Okay. Right. What does that mean?
Nadiem: It means that, that to Andre's point that if it's all just about performance and, and picking people who are really good at their job and that you trust, then you know, you don't build this sense of safety.
Nadiem: Right? And we as humans, we know behaviourally safety is our number one core requirement for us to perform, be creative, learn, etc. Right. Same with children, same with adults. So
Kevin: Safety you mean, psychological?
Nadiem: Psychological safety and being able to say everything that you mean when you mean it. Being able to express your feelings and just, you know, uh, shooting the shit when it, when it matters, right. And being able to, to relax around people. And so I think the best teams operate this thin line between friendship and sports team. Like Cookie Cutter, a paradigm.
Andre: I actually, yeah, you know, actually that works very well in a sports team as well. Because the best, you know like say a football team is actually having that chemistry, right? Barcelona, to give an example, during the golden days we grew up together, they grew up together like Sabin, Iniesta
Nadiem: Or like Man Utd '97, '99
Andre: Exactly. So, so that's actually, I think probably the most, the closest analogy to illustrate this,
Nadiem: but it should never, so the sports team takes over when, when you do have members that are not scaling, you have to cut. Yeah, you have to let them go.
Kevin: What do you think of of, uh, of that, right? Because I think, you know, as a, as a company, you know, uh, we've kind of tried to settle on that spectrum of, uh, and you know, spectrum of like a super forgiving family to an extremely transactional sports team, right? Like we've kind of tried to find that, that that middle ground. How would you think we've done so far?
Nadiem: I think we honestly, we don't let go enough of people. I think we've started to do that. But honestly, it's not just us as a very top of the top of the pyramid kind of activity. The concept. I always say this and I've been trying to, it's a little bit controversial, but I've been trying to imbue this paradigm and the team now that good leaders hire superstars, great leaders constantly refresh their teams. Like great leaders are defined by their courage and willingness to let go of people. That's a really important, I think, characteristic that we don't imbue enough. It's almost like a taboo sometimes. I feel in many organizations, this concept of letting go of people, which should actually meet a really important part of every leader's evaluation of performance. Like I don't know why we don't evaluate people on did you let go of people? Because mathematically speaking you, there's no way you can convince me that people have a 100% success ratio of recruitment. Of course that makes no sense to me. Yeah. Right? If you're the recruiters I know and leaders get it maybe like 60% of the time, maybe 70% of the time, accurate, unlikely. You're hitting anywhere above that. Right? Um, so I think that's, that's a paradigm that we have not enforced yet in GOJEK that we should be evaluating people just not on the stars they hire but on how often do they refresh their team and let go of, now here's the thing. Letting go of non performers is very easy, right? If someone is disruptive or they're just not putting in the work right and not achieving anything, then that's easy, right? It's easy to fire an asshole in your organization. There's nothing you shouldn't get credit for that. What is hard, however is letting go of people who are okay and still contributing value
Kevin: and liked
Nadiem: and liked by the organization but are obviously not scaling with the organization and the role of that person's need. So that's when the tough decisions need to be have you either, you have two options, you either let go or you demoed and demotion has a bunch of negative consequences as well to their morale, self esteem, etc. So this is the challenge, right? Letting go people who are still adding value but just not at the level that is expected of them.
Kevin: And then that's why I liked it. I do like, I really like the sports team analogy, right? Because there will always, again, I, I don't, I think they're healthy sports teams, right? Where, where, where did that sense of like camaraderie is there, there's very transactional sports teams where it's like, hey, you know, I have an unlimited budget to spend on players and if you are not the top, like that's it, you're out. Right? And, but I do think that generally that philosophy, again, you know, the sports team philosophy around, okay, do you have the best person in the world for this position? Right? And the best person is what does isn't always an objective like measurement of skill set, but it's also like a cultural fit. How do they work together with the rest of the team, but always setting that bar. And that's actually something I totally agree with you. It's something we also still have a challenge, which is how do we set that bar of excellence and know that, you know, when somebody is no longer meeting that bar, then we need to have a plan to either move that person up to meet that bar. And if that person fails to do so than like you said, we need to lower the bar for them by demotion, so to speak, smaller responsibility or we ask them to leave. Right?
Andre: Um, it's, it's not how talent-ful an individual is, right? We can be the best striker ever, but if you're not, uh, uh, there's no collaboration with all the other players. If you may, that's not going to work because the chemistry and how you actually work together, it's not going to, you know, create the productivity if you may, to actually achieve on the results which is winning. Right? Uh, so basically it's not, it's not just about the most smart people to actually, you know, uh, get that position because that, you know, I think that how they collaborate with each other will probably be one of the top, at least in my perspective, objective of keeping people and growing that people into the long term kind of uh sustainability.
Kevin: But that's the challenge, right? Because as a young company, you do inevitably generate a lot of camaraderie with the people that you've built the company with right?
Nadiem: Especially if you've gone through crisis.
Kevin: Yeah. Especially if you've gone through crisis, right? So I think that's kind of the challenge in that, like, how do you know these are very difficult conversations to have, which is how do you know that your friend isn't scaling? Like, how do you know that this person that you know, you've built some truly great stuff with, um, actually is no longer fit to take it to the next,
Nadiem: I'll take that one step further. What if you realize that you yourself are not scaling and this is kind of, you know, thi kind of mythology of the all, all powerful God or you know, like, and all this stuff. But I think what people out there need to know is the systemic insecurity that all founders and senior manager leaders have when they are confronted with the fact that, wow, I am possibly not the best if I, if I asked myself the question, am I bet am I the best person in the world to be leading this company? The answer is probably invariably no. All right. It's probably invariably no. Um, and, and I think that asking that question keeps you in check constantly because there are situations where you just can't fire yourself. Right. It's very hard to fire yourself. And I think that's when, you know, that's when you start thinking of hiring and recruitment as a way of filling in those gaps. But then the key challenge is then letting go fully that function to those people who you think are better than you. Right. Uh, but I think that the systemic insecurity is something that a lot of our listeners, they don't, they don't really, they don't see it as much or they don't realize how much we realize that we're totally not qualified to be doing this. And I'm sure we're going to have another podcast soon just on the role of luck and serendipity, which I just think is a super important topic, uh, that, that we should discuss. Too many founders and companies are taking credit for luck. I think that's my pet peeve.
Nadiem: And I think we need to straighten that out totally. But guys, we've run out of time. Thank you for today's first podcast. We completed it and uh, we'll see. We'll see in the next one. Thanks a lot guys. Thanks.
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