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Startup School Winter 2020
January 20, 2020, Online, USA
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Ali Rowghani - How to Lead
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About the talk

To succeed in building a big company in the long-term, founders must become good at leading, motivating, and retaining great people. Ali Rowghani, YC Partner and CEO of the YC Continuity Fund, takes from his experience working with great leaders to share his three observations on leadership.

Transcript and lecture slides here: https://www.ycombinator.com/library/6s-how-to-lead

This lecture is part of YC's Startup School, a free online program and global community of founders. Register and join the community at https://www.startupschool.org/

Timestamps

00:00 Introduction

2:20 No single archetype

4:38 Clear communication

9:21 Good judgement about people

12:19 Personal integrity and commitment

14:05 Earning trust

00:00 Intro

02:50 Diversity

06:30 Communication and preparation

10:00 Decision-making

13:17 Transparency

About speaker

Ali Rowghani
CEO YC Continuity at Y Combinator

Ali Rowghani is the CEO of YC Continuity. Previously, he served as the Chief Operating Officer of Twitter, Inc. from 2012 to 2014, where he was in charge of Twitter’s product, design, business development, developer platform, and media teams. He was hired as Twitter’s first Chief Financial Officer and served in that role from 2010 to 2012. For the 9 years prior to his time at Twitter, Ali served in several roles at Pixar Animation Studios, Inc., including as Chief Financial Officer and as Senior Vice President of Strategic Planning. Ali holds a BA and MBA, both from Stanford University. Ali is on the Board at Checkr, Lob and Restoration Hardware (NYSE: RH), and is a Board observer at LendUp.

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Good morning, everyone. My name is Ali rowghani. I'm a partner Y combinator, and it's a pleasure to welcome you guys to this lecture. And I understand this were the last ones, and start of school, which is really appropriate. Because my talk is about leadership, which is something important, but probably not top of mine for everyone in here. You probably got more burning concerns as you're getting your startup off the ground and figuring out what to build and working through product-market fit and fundraising and so on. But it's a really, really important long-term question.

Because if any of you is going to succeed in building a big company in the long-term, you've got a really get good at leading motivating retaining. Great people. And so I just wanted to take some time this morning to share some of my experiences and hopefully help you guys develop a bit of a early mental model, fry to think about leadership at your startup's. So first, a quick word about me prior to Y combinator, I had a 15-year career as an executive at two companies. The first was it Pixar Animation Studio, where I spent almost 10 years,

and I was the CFO of Pixar for the last four. And then I spent about five years at Twitter, where I started as the CFO, and then I was the c o o. And during that time. I had the amazing Good Fortune of getting a chance to work with and I deserve some really amazing leaders in action. People like the founder of Pixar, Ed catmull, the CEO of Pixar at Steve Jobs. Twitter's Founders, Jack Dorsey at Williams biz Stone, and now some of the really amazing founder CEOs at YC are people like Patrick Collison and Peter Reinhart and

Drew house, then and so on. So I've had sort of a front-row seat and I'm being able to observe some great leaders in action. And so what I wanted to do is to share three observations on leadership that I've learned in my career. And as I said before, you know, this may not be putting it exactly today. If you're just a couple of people working on an idea, but hopefully for most of you it'll be putting it very soon. The three observations on leadership. The first one is that there's no single archetype for a great leader. No, single archetype great leaders. Come in all shapes and sizes,

all personality types and characteristics. And I say this from personal experience because it was a big lesson for me. I used to think that there was kind of a single leadership Persona like, a way you had the way you had to act in order to be a great leader to be followed by people, but it turns out that all of the great leaders that I work with and got to observe. They were all really different somewhere, introverts somewhere, extroverts, somewhere technologist. Other was were storytellers somewhere diplomatic and very calm. And others were emotional and a little bit

hot-headed somewhere nerds and somewhere. Cool kids. So if you think about it, it's kind of a liberating idea. Actually that leaders come in all shapes and sizes because it means that anyone fundamentally has the capabilities to become a great leader, but the other application which I think is also really important and I'll touch on again later, is that in your quest to become a great leader in your quest to have other people follow you. You have to be yourself. You have to be authentic to who you are. You can't try to be someone else. If you want to be a great leader. You can't try to

imitate Steve Jobs and hope that, you know, people will just kind of think that you are Steve Jobs. I remember reading a quotes, some years ago from Reed Hastings. The amazing CEO of Netflix who basically said, the same thing you said for the first few years of his career as a CEO. He was just trying to imitate Steve Jobs and they realize we'll have some possible. I have to be read and it was that simple sort of realization that helped them become a much better leader. So you can only be yourself in the end because humans are very good at detecting inauthenticity.

We're really good at telling when someone is being fake and we don't generally follow or trust those that we find it odd centek. So first observation on leadership. Is that there's not a single archetype. Anyone can be a great leader, but in order to do so, you have to be yourself s. While there's no single archetype great leaders, nevertheless Share, three fundamental attributes and you kind of got to be really good at these three things. If you want to be a great leader. The first is the great leaders think and communicate clearly and

this really makes all the sense in the world. If you're going to have other people follow you, if you're going to have other people want to do the thing, you're compelling them to do. You have to be able to paint a clear and compelling vision of the future for them to be able to follow. And as the company grows as any organization, grows, your communication has to get better and better and better. Because you've got more and diverse more diverse people who are hearing it, and your process sees that you used to communicate can no longer be one-on-one, but they have to scale as the

organization itself skills. The biggest lesson in good. Clear Communications to me. The the most sort of important thing is that gray communication needs to be simple. And simplicity in communication is really is really hard and to communicate simply takes a lot of time and preparation. There's an example here of Woodrow Wilson President Woodrow Wilson who was once asked how long it would take him fast to give a speech and was asked. How long would it? Would he need to

prepare? And he said, well, it depends how long you guys want me to talk? If it's a ten-minute speech, then I may need two weeks to prepare for it. If I can talk for half an hour, I only need a week. but if I can talk, as long as I want to, Then I don't need any preparation. All I can speak right now. So that from, you know, one of the president's United States in effect captures the point. If you want to communicate, simply if you want to, you know, Express things that are memorable and it can be repeated. If it takes time to prepare another great example. Here from business

for me is from Jeff Bezos when he was asked about Amazon's retail strategy. What is Amazon's retail strategy? And he said that the way we think about our retail strategy. Is it there? Three things? That will never change in our world. In other words, customers will always want three things from Amazon. Bill always want lower prices. They're always want bigger selection of merchandise and I'll always want, faster, delivery. So lower prices, more merchandising, more selection, and faster delivery. And then he could never imagine that

a consumer would ever want the opposite of any of these three things and that became those three things became the pillars of Amazon. So we tell strategy for the last 20 years, and employees knew that anything. They did to drive those three things, lower prices faster, delivery and more selection would be in the long-term, strategic interests of Amazon. And it was clear as day and it drove the strategy of the company for a long, long time. So, that's the kind of communication that were talking about. That's the kind of Simplicity. That's that's effective. So how do you get good at

this? Obviously, clear concise communication. Comes more naturally to some people than others, but I do believe that practice does make you better when it comes to communication. And I believe that even in small startups, even into 24-person startups, as long as you have other people, you're working with it pays to work on communicating clearly. So the way you get better is number one to realize that Clarity of thought precedes Clarity of language. She have to think clearly to communicate clearly. And so the first step is to free up

time in your schedule to just think and try to jot down your thoughts and try to think about how do I express these thoughts and clean clear and clear Waze? And planning practice your Communications. This is probably more appropriate in a slightly bigger company. But if you're standing in front of a group of employees don't wing it try to prepare. Try to have it written down if the company is big enough practice in front of a smaller audience, get some coaching, ask for feedback. All these things will help you guys become better communicators and there's really no reason not to start. Now to try

to work on this. It's such a fundamental skill. Okay, so great leaders are all different, but they share three fundamental attributes. The first is Clarity of thought and language. The second is the great leader is to have good judgment about people. Why is this important? Why is it important for you to have good judgment about people. Well, as your organization's grow, is your startup's grow, you know, before long when you get to have twenty or Thirty employees. You're going to have to either hire or promote other people to be leaders in a company to be managers and directors

and one-day vice-presidents and so on. And the decisions that you make, in terms of who to empower, as leaders in your organization, have a really profound impact on the future of the company. And if you make consistently bad decisions, on the people that you're bestowing Authority and power to, then your Authority, your followership, the trust that people have in, you will diminish. So you have to make really good choices in terms of who you in power, because in the end, they become extensions of you. So how do you get rid of this one again? You know, good judgment. Good e

q is probably, you know, more natural for some people than for others, but my best advice here, especially this is a few steps ahead of probably where you guys are now, but when you're starting to recruit for any position, your company, you should try to meet a lot of people should put real time and energy into it. You should try to even meet people who you have. No, hope of hiring because it's important to kind of get a sense for what really great leaders are like, at, what great, you know, engineering managers are like, what great sales leaders are like excetera

and just talked to them about their jobs and their backgrounds. And how they, how they came to be where they are asking about how they leave people. What they think goes. Well doesn't go. Well. This type of kind of educational interview that will really help you or really helped hone your judgment about what's good. And what's bad and who's good and who's bad? And don't be, don't be, don't think that you're wasting time in doing this. You know, you guys will many of you will be hiring senior people, one day for the first time. You'll never have hired us UFO before. I don't, I don't

cut Corners, spend time meeting people and honing your instincts. The other thing I would say is, you know, I do guys start to grow your company's. You're obviously going to have to hire a crew to a lot of people and some of those people will not work out. Just make sure that you view, the hiring process is something that you can learn from every single time and just be very diligent in terms of learning. You know, who you hired. Why you hired that person what went right? What went wrong in terms of their original hire their own boarding in their career at the company. B self-reflective,

about the development of people in your organization and your own choices as to who you are, empowering with authority. Okay. Last thing, the great leaders have in common, great leaders, have strong personal integrity and commitment. That means standing for something meaningful Beyond themselves and being motivated by things outside of their narrow personal interest. It means avoiding behavior that diminishes trust diminish. His credibility in a leader like favoritism conflicts of interest inappropriate language, inappropriate

work, relationships, Etc. Commitment means making your work into a life mission in ways that Inspire other people, it means giving it your all people see this and they respect it and they follow it. So, how do you get good at this? Well, my simple advice on this one is to try to hold yourself accountable to the transparency test. Which means Ask yourself if all of your private Communications and behavior towards others, Etc. If all that were to be transparent to everyone at the company. If everyone saw everything you

said and it would you be embarrassed by any of it? We obviously all make mistakes, but patterns of mistakes are bad and mistakes that sort of damage the Integrity that you have or damage the perception of Integrity or the worst of all, so, that is, I think of very important characteristic and leaders, third observation about leadership. So, number one, all leaders are all different. There's no single archetype number to nevertheless. They have three common traits, communication judgment about people and integrity and commitment. And the third observation about

leadership is the best way to measure great leaders. Is in terms of the amount of trust, they're able to engender and the people who work with them for them around them Etc. Trust is the metric, the success metrics for leadership and Trust in a 360° sense of the word. I would say that across any organization. The job of every leader is to build trust trust and employees investors customers users and so on and building. Trust is both an art and a science. The science of trust is fairly simple. You have to be right about

the empirical question in your business. You know, if you're predicting. Hey, we should build this product. We should try to sell this customer or, you know, we should try to market the product in this way, these things over time like these choices get proven right or wrong and hopefully you're right much more than you're wrong because if you're consistently wrong then and you know, you diminish, the amount of trust people will have in you. It's almost like asking someone What's 2 + 2 and if they consistently answer 5, then they can be the most trustworthy ethical

person on the planet, but you're not going to trust them at the end of the day with anything had to do with math. So that's the science of trust. I find the founders often get this part, right? The second aspect of building trust is more of an art. This is about being able to show empathy and good judgment having timing good timing. When you confront issues. It's about striving for something bigger than yourself and not being selfish or self-centered. And this is a more delicate. Obviously, the art of trust, Billy the otter, trust a more delicate topic. And again practice makes you

better but I always try to keep it in mind. To my parting advice for you guys. As you guys are sort of tadpoles on your way to building big companies. Is that as you with every step that you take forward, try to optimize Fortress As Leaders, you're going to have lots of hard decisions to make in the coming years. You'll have to fire people. You'll have to admit mistakes to your customers. You'll have to say no to people, because you disagree with them and their ideas, try to view every challenge that comes in your way. Try to view every challenge as an opportunity, to

increase the trust that people have in, you as a leader shot of you, every challenge, as a trust building opportunity. And as you evaluate one course of action versus another, ask yourself, which path is going to generate more trust in you as a leader and always try to choose that path. That's my parting advice. I wish you guys all the luck and success in the world, and it was great talking here today. Thank you.

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