# Why Hiring in Tech is Broken and Founders Need to be as Good at Firing as they are Hiring Why Product Differentiation is Unsustainable & Why the Current Generation of Tech Employees are Entitled and What Needs to Change with Jean-Denis Greze @ Plai 20VC · Jul 21, 2023 · 50 min · 11,436 words Speakers: Jean-Denis Greze, Harry Stebbings Source: https://www.996.fm/episodes/20vc--ep-b8e5b333/ ## Cold open **Jean-Denis Greze** [0:00]: I feel that the relationship of many tech employees to their tech employer is the same as, like, a French citizen to the French government. Somewhere between fifteen and thirty people, things will break on the management side. First time founders, they don't realize they have to be great at firing. I mean, **Harry Stebbings** [0:13]: wow. This is one broad ranging discussion. ## Intro **Harry Stebbings** [0:15]: Welcome back to 20 VC with me, Harry Stebbings. And today, we're joined by one of the best CTOs in the business, Jean-Denis, CTO at Plaid. 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You have now arrived at your destination. ## Conversation **Harry Stebbings** [3:14]: Jean-Denis, I'm so excited for this. I had many good things before we started the conversation. So thank you so much for joining me. Stay first. **Jean-Denis Greze** [3:21]: Thank you, Harry. I'm super excited to be here. I feel like I'm getting the benefit of being on here more than you're getting the benefit of having me on the show, but I'm excited to do my best to impress. **Harry Stebbings** [3:31]: Well, I'm about to extract a decade of knowledge, so I think I'm the one winning. But I wanna start with your career. And I think careers are often made actually with more singular moments. So when you reflect, what would you say was the single biggest break in your career? And how did it impact your trajectory? **Jean-Denis Greze** [3:45]: It's a good question. The answer would have to be joining Plaid as to lead engineering. I joined when the company had, you know, 40 ish people and, you know, less than 10,000,000 in ARR. We've had crazy trajectory. And it means, like, in terms of my career and my ability to be successful long term, I have a lot of options now that I'd never would have had if I hadn't joined Plaid. Joining Plaid is not what I consider the lucky break that I had. That would be joining Dropbox, which was my first job, like, truly in Silicon Valley. So before Dropbox, I kind of had a weird career. I'd worked in tech for a bit, then I'd been a lawyer for a bit, then I'd helped a friend kind of grow a company, like a fintech company in New York, but more on the hedge fund side of things. And I hadn't had, like, what you would call, like, a triple a employer on my resume. And I was smart, but weird outsider with, you know, a little bit of an attitude. I realized at some point that if you want to be an engineer and you want to do great engineering work, at the time, at least, I felt like you had to move to Silicon Valley. And I was in my early thirties. You know, I don't think I'd had a great success. And I knew a friend at Dropbox, and so he got me in the pipeline to apply. And, you know, I applied there. I knew because they told me after the fact, I actually didn't do that well in the interviews. I did well on half of the interviews, and I didn't do well on the other half of the interviews, especially on some of, like, the people skills. And, you know, I think I came across as a little too smug and unsure of myself. And there's two people at Dropbox that saw something in me during the interview process, and they were like, look. No. Listen. Like, we should hire this guy. He's got some spikes. Like, he's weird, but that's what we need at at the company. Dropbox is very good, not just at getting the standard talent, but at looking at people that weren't quite conventional that they thought could really accelerate the business. People don't realize now maybe with Dropbox, like, 2010 to 2017 on your resume, that really just opened all the doors. **Harry Stebbings** [5:27]: JD, you were a talent, but your CV did not show it at the time. Question to you is, when you look at LinkedIn profiles today, what makes you excited? So for me, makes me excited. I hate bounces is what I call it, where they've done a year, a year, a year, twelve months, eighteen months, twelve months. I like ten year duration. What makes you think high quality when you see a CV or a career? **Jean-Denis Greze** [5:52]: It's a really tough question, and I think already in an interview process, you're trying to recap someone's talent in four to five hours. For me, there's a ton of red flags. Staying too long in level, like, not having a good trajectory, jumping around from company to company. You can jump around once or twice. If you do it over and over again and you never find a place where you're able to, like, really hit that velocity, that really bothers me. I look at online things that you've built. So frankly, like your GitHub, the projects that you've shipped, maybe even your blog. I think that stuff can get me excited. But what I want quickly is interaction with, you know, the interviewing team. What I want is, like, time in a room with you. The resume screen for me is is fairly limited. You have to always ask the question with talent. Are they the right person for my business? Not are they a great person. Right? And I think there's a big delta here. Like, I always give this advice to startups. They all you know, startups, they're like, oh, I want the best engineers. And I'm like, you're building a crud app. What is the best engineer for a crud app? The best engineer might be the person who's, like, graded React or graded Rails or whatever. They don't have to know distributed systems. They don't have to, like, know all that complex technology. So let's look for someone who's got an amazing track record of, like, the kind of front end work that you have or the kind of full stack work that you have. And when you do that, it's no longer, like, a great resume. It's, like, your things you're looking for. And you ask yourself, does the experience on this resume seem to match what I'm looking for? And I think that's how you find quote unquote great for your business. **Harry Stebbings** [7:20]: How do you advise founders in terms of hiring ahead of time? You spoke about the best engineer there for your business. Often, VCs are claimed to be able to show the problems before they become problems and help you hire ahead of time. Do you think founders should hire ahead of time, or actually it's hiring for the here and now? **Jean-Denis Greze** [7:37]: I think I've changed my mind on that. I think for ICs, very early on, like, first, like, 15 people, you wanna hire for the here and the now. You want people who are hungry, who can solve the problems you have right now because you're trying to get and expand the amount of product market fit that you have and the amount of product momentum. At most companies, the advice that I give is somewhere between fifteen and thirty people. Things will break on the management side, And the problems that you encounter are not cookie cutter. You can't ask someone who's grown a company to 200 and ask them to give you a road map of the changes they had to make and be like, those are the changes I'm gonna have to make. No. Because every business pretty quickly ends up looking different. At So that point, what I generally say is like, hey. You need to hire your first few managers and your first head of. Like, the first person who's kind of gonna grow your product team or grow your engineering team. And I think there, your two choices you can make. One, you can hire what I call the four year candidate, the person who's run, like, a 75 to a 100 person team. So they're gonna come in at twenty, and you're gonna be as a founder, you're gonna be like, well, this person is gonna be able to grow us for a while. They're smart. They're problem solver. They'll get in front of it. Or you can hire what I call the two year candidate, maybe a person that's managed a 35 to 40 person team. Much easier hire, but that person, at least, you know, like, hey. Listen. Like, they're gonna be able to get the next year and a half, two years. They're gonna be great, and then I'll have to reevaluate. So I used to be in the four year camp, but it's just such a hard hire. And there's actually this thing that happens where the person who's run a really large team may once upon a time have been good at running a small team, but they may not be anymore. I don't think I would be a good manager for a 20 person team anymore. I was when I joined Plaid. That was six and a half years ago. Like, I've lost all those muscles. And so if you go too long term, if you don't hire for the here now, sometimes you get someone who's not that excited about the here now, not willing to roll their sleeves back. Maybe even their technology understanding is is behind where it needs to be. Things are changing on the ground. So I think it's always easier, faster to make the shorter term higher, get the impact, as long as you're honest with yourself when they stop scaling. Right? And so you either recognize they're still scaling. I'm gonna support them, mentor them, get them to the next stage, or you're like, hey. Maybe it's not quite working out. I need to think about every two to three years upgrading my my exec bench. **Harry Stebbings** [9:41]: We always say about, like, stop scaling, and it it's like rom coms. It ends there. What happens when they stop scaling? Do they move on? Do they remain in the org and we layer them? How do you think about efficient handling of that with those kind of categorized characters? **Jean-Denis Greze** [9:57]: Yeah. I mean, how unfrenched can I be on the podcast? Look. It's capitalism, and your responsibility is to shareholders. Right? You can do right by people and the transitions, but, you know, sometimes you get someone who realizes that they need a better leader, that they're gonna learn from a better leader above them, and they're ready for it. And sometimes for everybody, it makes sense for them to just go find another gig where they've grown at your company, and they can now do another stage. It's not the stage that you have, and it's okay. I think as adults, you can have these conversations. I think where you get in rough waters is when you don't give the person a chance. I I call that, like, putting the person in a box where you have this image of them from when they joined, and the company hits some kind of rough patch, and you you don't give them some chance at, like, seeing if they can go out of it. I think the human thing to do is to give them the chance. But you're a founder, and you've hired all these other people. And if one of your function leads scaling, yeah, you might give them three months. But pretty quickly, you gotta realize, hey. It's not working. Because next thing you know, you might have you know, if you wait, like, twelve months, and then you make a new hire and that person on ramps, next thing you know, you've wasted eighteen months of potential momentum at at your company. And that's dangerous. And I I think this is, like, not a super podcast, like, happy, happy, makes me look great kind of statement, but there's great hiring and there's great firing. One of the things you realize about founders is first time founders, they don't realize they have to be great at firing. They just think they have to be great at hiring. But you have to be great at realizing when your talent's not working out and identifying that and working with them and moving on. And initially, founders don't do it early enough, and then they learn their lesson a few times and then get really good at it. **Harry Stebbings** [11:24]: By the way, it's a really interesting thing. People think about, like, oh, it doesn't sound good on a podcast. What founders love the most and what makes them like people the most is actually the honesty. The naught BS, selling your company, you know, it's all about mission and vision. That doesn't sell. That makes people dislike you. What does being good at firing mean? And how can I get good at it? **Jean-Denis Greze** [11:44]: It's like having a breakup. I don't think you truly get good at it, and I don't think you ever have a playbook where both sides come out of it like super happy humans. That's just reality. So the first thing you gotta realize that, when I say good at, I actually don't mean the conversation with the other person. I mean, identifying at the right point in your company that the odds of success of that individual in the role is no longer right for the business. If you can look at someone in the eye and you're convinced yourself that it just doesn't make sense for the business, you've given a shot for them to improve and prove themselves, they haven't, you're just doing what's right for the business. And they will understand that, and they will respect you for it even if they don't like you in the moment, and they don't feel like it's fair. I just think that's how you have to treat it. Right? There's a human level, you know, how you deliver it, how open you're in communication, that those things matter. But at the end of the day, it's about what's doing right for the business. Probably the biggest mistake is not giving feedback. **Harry Stebbings** [12:34]: Oh, that is No. No. No. I disagree with you. Don't give feedback. That's a terrible thing, JD, because they'll always argue with your feedback. No. I mean, **Jean-Denis Greze** [12:42]: before. It shouldn't come out of left field. The person should know that their performance is not quite meeting the bar that you have anymore a couple of months before. Say in your head, you're just like, oh, it's not working out. It's not working out. It's not working out. And then you show up in one on ones, and you're like, high five. Let's go watch, like, a soccer game. You're the best. You know, then when you deliver the news, that's just not that's not gonna feel good at all. Yeah. In the moment, no. You've made the decision. There's no argument. Right? If you've made the decision, you know, they try to argue with you, you're like, look. Listen. Like, I'm doing what I think is right for the business. This is my role to do what's right for the business. I've thought about it. This is this is what we're doing. I'd like to work with you on, like, a transition plan that works. When when you reflect on hiring, what have been your biggest mistakes? The first one is not being crisp about what we need in the role. You know, it's the difference between, I need someone to run data science. Our major data science initiatives are around risk and fraud. I'm really gonna value somebody who's done that in industry for a bit, but I want an out of the box thinker because at Plaid, we're not doing fraud and risk like every other bank. That second thesis, like, calls the space significantly. It's like, okay. They've got to have work at a traditional institution, but then I've got to have seen them work in a really creative environment. It's fraud and risk, so I'm not going to hire a data science person who's not had any of that experience. You really got to get the requirements really crisp first. Second is your interview panel needs to be aligned on what you're looking for. I've seen too often, especially with senior hires, all the interviewers are, like, you you know, heads up things, and they're all asking the generic question like, oh, tell me a great success in your career. Tell me about a time you failed. You don't get real signal from that. Like, you need to be like, hey, head of HR, I need you to talk about how they can how they work teams through difficult execution challenges. Hey, like, GTM person, like, I really care about, can they work with PMMs on pulling out data requirements for data products? Like, make it make the interviews really specific. And then number three, you have to have interviewed enough people that you know what grade looks like. If you have the perfect candidate be your first hire, like the first person you interview, it's really hard to pull the trigger. People don't have any comparison points. But if people have if that panel has seen seven or eight candidates before, and they'll have a feel for what good is and what great is. And so this sounds unfair again, but you kinda need to put the interview process through rounds. And so what you do is if you have your first great candidate and they come really early, at that point in time, you gotta interview three or four other people. You gotta find three other four people to interview because you want your panel to feel confidence that someone truly is great. Otherwise, it's hard to to pull the trigger. And then everything else is on the recognizing if they're successful, setting them up to succeed, having an objective data point pretty early on. You've got to have, like, a reminder in your calendar, three months in, four months in, five months in, or whatever, that where you objectively sit down, and you're like, ask them to do these things. Are these things done? I thought this would change the trajectory of this function. Is the trajectory changed? And if you can't answer yes to the questions, then we may be into the conversation you and I just finished having. **Harry Stebbings** [15:33]: I I love doing what I do, because I just write these schedules, then fuck them. I'm so enjoying this. Like, so two questions I thought on the negotiation pre joining side. One of my biggest lessons is when people are really difficult on the title. I want chief of staff, not EA. I want head of engineering, not VP of engineering, or whatever that title. It's never a good hire. Do you agree? And have you felt the same? Or actually am I wrong? **Jean-Denis Greze** [15:59]: Certainly, the most of the environments I've worked in, we try to be kind of low ego, low title. We want the best ideas to win, not just the most seniority. So even at Plaid amongst ICs, for example, there are no titles. Even in managers, outside of the person who leads, like, a giant area, we don't have directors and things like that. So I've been very much in the like it's not a red flag, but it's a little bit of yellow flag when people really care about those things. The flip side of it, which I think is it matters in the industry and you can never fully divorce yourself from the industry, especially when you get to a certain size. When you get to, like, a thousand people, 2,000 people, you're going to recruit people who have titles. You're going to recruit people for whom titles matter. So like a a thing for you is there's bias and unfairness in the industry. And so there are some underrepresented groups for which being a staff engineer on LinkedIn is truly meaningful career wise. It's not about ego. Right? It's about this feeling that the industry hasn't, like, done right by you. And and when you achieve this thing that is truly meaningful, you wanna celebrate it. So I think at scale, at our size right now, like, we're, you know, a thousand people total, I think you wanna go with the grain of the industry, not against it. Because it's just too much fighting to go against it in some places. So you have to be picky around where going against the grain really accelerates the business versus the places where you should just, like, be more default. I think when you're very small, it is a red flag. People should care about impact. Everything's gonna be fluid. Where does **Harry Stebbings** [17:24]: going against the grain accelerate the business? **Jean-Denis Greze** [17:27]: Very rarely. My overarching thesis is that a lot of people things, how you level, how you title, how you comp, how you organize your org, like your manager to IC ratio, remote hybrid. Pick a thing. Pick one of the three options on the menu for each of those, and just, like, move forward with your life. I just don't think it's the difference between a good and a great business. Bad strategy, bad product plan, going to the wrong market, the efficiency gain or loss is, like, a 100% or 0%. You know, you build the wrong product, you're slightly better at leveling people. Like, I just don't think that fundamentally matters. How much does speed of execution matter? That's the most important thing. It's shots on goal. Right? You execute faster, you get more shots on goal against your competition. You wanna be the fastest person. **Harry Stebbings** [18:14]: You you mentioned some crucial, crucial topics there. One of them, which I'm actually very passionate about and not in a friendly way either, but it's the in person versus remote versus hybrid. Talk to me about how you think about this, and do we have an opinion here? **Jean-Denis Greze** [18:28]: One opinion I have is we've talked too much about it. When I say it doesn't matter, I think there are plenty of really successful companies before the pandemic that were really going hard after fully remote first. It worked for them because they had a the people who went to work, they were people who want remote first. What happened in the pandemic is we forced people into working models that maybe they didn't like. So on my team, I have people who like remote first, and I have people who wanna be in the office because I didn't preselect in my hiring criteria, like, a specific persona. Now you kind of make a decision. I'm not saying it doesn't matter, but, again, I don't think it's the difference between success and failure. You make a decision. You make sure your hiring and your culture matches the decisions. There's a few areas where I think you should be careful. So I'll give you an example. Highly creative, fast moving work where you're not sure what the requirements are and where your customers are local, meaning where you can go and talk to your customers by, like, walking over to their office, I think in person is better. Because I think you collaborate more effectively. It's easier to get everyone on the same page. You can go talk to customers by, like, taking a car or walking over. And so if you have a lot of work like that at your company or you have teams that look like that, I think getting those teams to operate in person is beneficial. However, at scale, incremental improvements to existing products where you care about efficiency of the team and you have clarity of roadmap. Personally, I think almost in remote, we're, like, more effective. I think the only thing in remote that's hurting me is pulse score in terms of belonging and how much fun people are having on the work. Like, I think that has gone down from before. But I think in terms of quality of the work and the productivity, it's the same. **Harry Stebbings** [20:01]: I totally disagree. I they do not work as hard, and they do not work as well, and they do not feel the same culture togetherness. The idea sharing is totally different. Whether you're in marketing, whether you're in sales and the camaraderie, your attention is slammed. You have a bad day, you go down to your other half and they say, oh, darling. Well, what about those LinkedIn recruiters who are offering you jobs at the same pay? Versus when we're in the office together and you and me go out for a drink at the end of the day and you say, dude, I love working with you. And I go, you know what? JD is good and Plaid's a good place to be. And so I think it fundamentally changes the creativity and retention fabric of a company. And I think we're gonna see a load of sorry. I'm on my high horse. We see a load of VCs who made a load of investments without ever meeting the company, and they are unraveling faster than ever now. And that is in large part because they didn't spend the time in person, I think. **Jean-Denis Greze** [20:50]: I agree with you on the culture side. There's hybrid models where you come in, like, two to three days a week, and you make the office awesome for those days where you can get a lot of the benefits that you're talking about. I disagree on the productivity front. We've had a lot of success there. But you look at all the early stage comp like, a lot of them are going back to in person. It is happening right now. There's an exodus from New York to SF that's happening and from and I say Miami, but from other places where where people went. And it's around AI because the zeitgeist is here. All the AI folks are, like, getting together in the evenings. They're going to the same places. Like, all the gen AI stuff, it's sucking a lot of people back to us. You have to be in the valley to be doing AI startups today. So I was in Europe for a trip, like, a few months ago, and I think what was really fascinating to me is how much of the culture of how you build a company and scale a company is now internationalized. Ten years ago, there was this knowledge about, like, what does your first PMM do? And, like, what's growth hacking or PLG? How does it? Now kind of everyone knows that stuff. It's pretty impressive. I think there's still more people who've seen through it here who've done it, like, four times. But there are a lot of other places in the world that have proven that they can export the company, the startup building, and the culture of Silicon Valley. The AI stuff, you can feel right now that the zeitgeist is an SF. But I think it's still an advantage to be here. **Harry Stebbings** [22:09]: I do wanna ask, you know, a lot of people who love remote and hybrid, I think, love it because there's a work life balance that it brings. You've said before work life balance is good for people who do not care about work life balance. Can you help me understand this, JD? You mentioned **Jean-Denis Greze** [22:24]: earlier that you've you've made a lot of investments in France. Right? I'm gonna say some things that people are gonna like probably on the podcast, but maybe my team won't like it at Plaid. I don't think my team is this way. But France is interesting. Right? Because as a country, there's kind of this ethos. It's not cool to talk about work, and you don't wanna work too hard. You work to live. That's like the Frenchness. And the result of that is if you are a person willing to work eighty hours a week in France, if you try to work for a big company, you get hammered down. They're like, won't let you work that hard. Like, know, people are like, you're making us look bad. Like, they know they're like, well, I use your workstation off hours. Like, it'll be weird. But if you're a startup or if you're doing something new or you're like an independent, you have your own little company like a law firm or a small investment bank, you can crush it because your competition's working forty hours a week, and they're going on vacation all of August. And so so if you're the if you're the law firm who's willing to be available from July 15 to September 15, like, welcome. People will go and work with you. The way I would talk about tech is, you know, tech twenty years ago, it really truly was tech bro y in the sense, like, everyone was in the early twenties. Everyone was working all the time. There was no work life balance. And as tech grew and had a lot of success, there was this movement around, like, hey. If people with kids wanna be successful here, people from different walks of life, like, we wanna create an environment where, you know, you can work forty hours and still do great work and have great remuneration. And that's what's happened. Right? Like, people have fought these battles, and the culture has changed. But the culture has changed so much that now I have people who wanna work hard, who are like the French person at the big company. They're like, it's hard to work hard, and I feel guilty doing it and all these things. And what I always tell them is, like, you're thinking about it wrong. It is much easier for you to get a promo. It is much easier for you to look good if you're willing to do those things because the average now is truly going into this, like, you know, forty hour week kind of thing. And I feel that the relationship of many tech employees to their tech employer is the same as, like, a French citizen to the French government. The employer shall provide. All the big problems in life are the fault of the employer, like, kind of this weird, like, lack of ownership mentality. It has the entitlement in it for sure. Overall, and why I think innovators and small companies will continue to have an advantage is because I do think if you care more and you're more focused and you're willing to go the extra mile, you will build better things. And I can't ask everyone to do that, so I like the fact that we have work life balance. But I think for the people who really, like, wanna push, they're they'll have more career success. And one of the situations that I find always interesting are new grad hires across the industry, really these brilliant, brilliant people, right, and and who join the tech companies. And the first time in their life when there's not equal treatment is the first promo cycle at their company. When some people get promo ed to the next level after twelve months, some it's eighteen months, some it's twenty four months, some it's thirty months. And it happens and they're like, but I'm as smart as the other people. And then suddenly it's like, no one cares that you're as smart. What people care about is are you a top producer? And there's different ways you can be a top producer, but when everyone's as smart as you are, what's gonna differentiate your success? And I think hard work will matter. Now, you can't be surprised when someone outperforms. **Harry Stebbings** [25:27]: Do you know what separates the one that does get a promo than the one that doesn't most often? And this is not me being an old man boomer. It's the one who's in the office more as well. Sorry. There you are. You're back to it. I totally agree. I I do wanna ask one final one on people, and it's just a question around, do you believe that you can be truly great and have work life balance? And when I say truly great, let me put a placement around it. Build a $10,000,000,000 plus company. So I know a few truly **Jean-Denis Greze** [25:54]: great people who have the right viewpoint and are really good at motivating and delegating. They create the structure for success, like the North Star, the product road map. They're able to motivate other people to go in that direction. That person can do it. And that person could be a great CEO. It's possible. But as a whole, no. You need to do great things. There's a great sacrifice. You'll find exceptions, like one offs, but I think on average, it it doesn't play out. And the analogy that I would say is to, like, a professional athlete, a LeBron James or or whatnot, there's plenty of people who are professional athletes who from a pure physical understanding of the game, they're there and who just don't put in the work, and there's people who put in the work. With athletes, we're totally okay to make fun of the ones that don't put in the work. The sportswriters, like, make fun of them all the time. They're like, ah, it's a fifteen year career. You get one shot at this. Like, you get your big payday, and then you stop trying as hard. But, like, what's the difference? You know, we're like, oh, the athlete's career is so short. They should work as hard as they can for that period. Man, life is short. Life is short for all of us. You think, you know, your professional career of forty years is, like, much longer than the professional basketball player's fifteen years? It's not that much longer, dude. Our life is short. Our time on Earth is short. So you choose how you wanna spend the time on Earth. And if what you care about the most is like having a great life, the work is not what gives you fulfillment and not the thing that you care the most about. I think tech is awesome because we allow you to do that and still degree work and be creative and work with awesome people. But I think if you really, really wanna have, like, the outsized impact, I do think the incremental hour works, the incremental focus, the caring more, the thinking about it in the shower at night before you go to sleep, writing the extra email, talking to an extra founder, caring about the market a little bit more, it all matters. **Harry Stebbings** [27:35]: I do wanna go a layer deeper beneath people, though, and I wanna discuss something that you said, which I thought was fascinating. You said product differentiation is not a sustainable differentiation. Rare from a product person and a CTO. So help me understand this one. **Jean-Denis Greze** [27:48]: Great products have won for the last fifteen years. We see that in consumer for sure, but we see that in b to b SaaS. Companies of the nineties and two thousands like PeopleSoft and like Oracle, the UX is not good, but it solves business problems. Cooperorbill.com suck. Yes. Good point. Workday also sucks. Right? But Workday is much better than PeopleSoft. It's just night and day. And, actually, bill.com versus, like, a non Internet billing system is incredible. It is, like, earth shattering. Here's a a couple of thought experiments. Imagine pre Stripe to Stripe. You wanna process credit cards? It's like a $100,000 down payment. It's gonna take you six months to do through the contractual. You're gonna get this shitty form. Compare that to Stripe. Stripe, it's like you sign up on the website. You can use the API immediately. Once you have this amount of traffic, they do a little more KYB on you, blah blah blah, you scale. The delta in that in value is, like, going from one value to 90 units of value out of a 100. If you go to the Stripe website now and you look at what they've launched on the developer experience, it's awesome, but it's a difference between, like, ninety and ninety three. I think over the last decade, on a lot of product experience, there's been a lot of competition on UX. But I think given the current technology trends, a lot of competition has happened in UX, and I'm not seeing UX ideas that are 10x to where we are today, number one. And number two, you can copy UX. And this is really important. And there's a couple of companies that are doing this right now. I think the most famous would be Rippling, where, like, Rippling's building, like, the next Workday. They've taken, like, oh, this company does HR analytics. We'll, like, copy 90% of their good features, and we'll make an integrated version that works with your employee directory. You wanna do, like, global billing? Like, we'll do a 90% as good version of global billing, but we'll make it even easier because, like, we'll deal with all the inter country thing on our own. They do that, and they're building a suite that basically takes all the vertical products that have won for verticals, integrate them into a combined experience, and they don't have to innovate on pure UX for any vertical. They just copy the best. They're selling a suite. Right? And that's where the value will come from. I think the value won't come from out of this world UX. I think it will come from, like, a suite of things that is cheaper, like, works better together than the highly verticalized products that we've done today. **Harry Stebbings** [30:01]: Can I make a case, an alternative case, which is UX isn't innovated on now as it was before because of the maturation of platform life cycles? Like, we are at far into the PC, far into the mobile. My question is, do enabling technologies like Apple Vision and AI allow us new dimensions of UX that will recreate product differentiation as a sustainable. **Jean-Denis Greze** [30:28]: I think for the existing startups, what you've got to look at is it probably isn't gonna be UX, and there's probably gonna be consolidation. Because we've over verticalized things by going after every, like, of the software with a slightly bit better UX here or there. And I think the value now is going be from tying it all together. And there's a few companies that are doing that, and I think those are going to be the big winners. What do you **Harry Stebbings** [30:50]: mean tying it all together? Like, there's the compound startup, like, rippling there. What do you mean by tying it all together being where the value is? **Jean-Denis Greze** [30:57]: That's a perfect example. I think you have to ask yourself, like, who lives in soft in Salesforce versus lives in, like, Gong and a handful of other tools? I think security tooling is the same way. Are you long or short Salesforce? Salesforce to me feels like it's an increasingly a database, a store, and not where the UX happens. But because everyone still has to store the data in Salesforce, it's still, like, the base thing that everyone buys. But HubSpot like, people are going after them. There's too much money to be made there that I think someone's gonna figure them out. I would say I am bearish on Salesforce ability to stay number one over the next decade. What **Harry Stebbings** [31:32]: it takes to win. If it's not around products, it doesn't focus on setting the right North Star or understanding where to focus. How do you think about how to set the right core metric and what effective North Star identification is? **Jean-Denis Greze** [31:46]: I think now compared to five years ago, I'm more wary of, like, the one metric to rule them all. I've seen what I would say the difficult part of product not be solved by setting the right metric. It certainly helps, but it doesn't answer all the questions. So we have a metric around conversion, and it's the metric that matters the most to our customers. Meaning when someone tries to connect their bank account, are they able to connect the right bank account for that use case? And we do a ton to track conversion. But if you think about the work that we do on conversion, let's say you're trying to go from Paris to Milan. One way to go from one to the other is to walk. So your say your metric is like amount traveled, like percentage of distance between Paris and Milan traveled. So you go walking. So that one's awesome because every day it goes down, and you can predict very clearly when the person will get to Milan. And then there's another person that decides to take a train. So what that person looks like is walking kind of in the right direction because the way train stations work in Europe, they're generally in the right direction where the destination is. They go slowly, and then they stop there, and then they go really fast. And then you have another person that's taking the airport, so they're, like, going in the wrong direction. Then they stop for a whole while, and you don't understand what's going on, and suddenly they zoom over to Milan. Now clearly the best mode of transportation, the fastest mode of transfer sheet consistently is the airplane. And we know the airplane is better because we've, like, done the work, and I know they exist, and they go. But a lot of product work actually at most companies on a metric will incentivize the walking kind of behavior because it's measurable, It's clear that it's going to get you in the right direction, and every day you see progress. The best work is the work where you're like building an airport and inventing airplanes, and then a few years later, you can hop over from one place to another not in twenty seven hours, but in one hour. So whatever metric you set and you should have a metric and countermetrics to make sure people don't abuse it and don't game the system. You should do all that correctly. I think the really hard decision always is like, hey, do you do incremental work that has more guaranteed payoff? And how much are we willing to invest in things that could be real multipliers to the product goal, but, like, you're not going to know for a bit if it's successful. And sometimes you won't know for a while, and it's going to feel like it's failing. And what happens is your PM is at the airport, and he's been waiting for his flight that's delayed. And suddenly, he gets his text message from the boss, and the boss says, okay. Just take the train. And that's stupid because he goes and take the train, and in the airport, the airplane's ready to go, you miss the airplane. And that's what happens. Right? You, like, start the project. It's ambitious. You work on it for nine months. The metrics aren't moving. You have revenue pressure, and you're like, ah, we're not gonna do it. I think the metrics are amazing. You need some way to judge whether you're making progress. You need lead leading indicators. You need North Star, then you need leading indicators of your North Star, but you need judgment and gut. You can't abdicate the judgment and the gut to a metric. You need someone to go on a limb and say, I believe that this will work. I'll put my promotion and my career on the go. Like, we are gonna have five people work on this thing. I think that's the part of product that's really hard. Do you do incremental work today at Plaid given the size? For sure. Yeah. And this year, we have a conversion goal, and we hit our annual goal on conversion in six months. And we did it mostly through incremental work because people were smarter about looking for opportunities, and it's a huge win for the business. But we still have a home run on that, and the home run matters more over any time that's conversion that's very difficult for competitors to to get. **Harry Stebbings** [35:00]: If you achieved it in six months, would you not say that's ineffective goal setting? It's so far off. You capped what could be done significantly. **Jean-Denis Greze** [35:09]: If I knew the future, I would bet everything on the moonshots. I really fundamentally think that's the hard part of the job. The thing for me that's always clarifying, and I I'm not nearly as good a product leader on this as I wish I were. We're building businesses. Long term, what matters is competitive advantage. It's a thing that you can do that is hard for someone to copy or expensive for someone to copy or who lasts a certain amount of time. When you're a company like Plaid where you already are better across the board than most of your competitors, I think the one rule for us is what can we do to extend the window of our competitive advantage, even if we're giving up short term opportunities to short term increase the competitive advantage. It's hard to say no to the obvious short term wins, and I wish I were able to do it more and to convince more people that we needed to look more at the things that over two to three years really win, Cause we have that luxury. We're ahead enough that we can invest in the two to three year thing. I'm one of your angel investments. **Harry Stebbings** [36:03]: How should I think about competition? **Jean-Denis Greze** [36:05]: I don't think I'm a very good angel investor, because I like the founders and the ideas more than I do it for, you know, financial optimization of the game in the early phases. That I think if you're too focused on competition initially, you usually just don't build the right thing or you don't figure out the wedge that gets you to win and go to market. At any scale, like at Plaid's scale, when you get to 50,000,000 or $100,000,000 in ARR, you're living in a world of competition. If you're making a lot of money at high margins, like, people will come after you. Then I think it starts to become important to have things that are difficult for others to do. We were talking about product and product differentiation. The saying is always like, distribution is your product. Your ability to get new customers and to sell more to existing customers, I think often at a certain scale is what ends up allowing a lot of companies you know, to grow more and more and more and more. Like, that's like a high confidence way to grow. Reputation, network effects, like, if you can have brand or much better network effects, those are incredible, but those are rare. There are a lot of successful companies that don't have, like, huge network effects. So, you know, there's a hierarchy to competitive advantage. And ideally, you start to develop it, but like at an angel with some someone who has, like, a million in ARR, I don't know. If you disagree, tell me. I just haven't focused on it, because then I think very few companies would pass the filter. Like, I would make, like, three investments a year and not 20. **Harry Stebbings** [37:20]: I totally agree with you. I'm just intrigued by something you said before though to me, which is your startup is a zombie, and life is too short to keep trying. You know, we always hear never give up, and I'm always an advocate for never give up. As your VC. Well, I mean, like, VCs say I mean, a lot of VCs are saying, give me the money back. I'll take 60¢ on the dollar. I don't think the most of the VCs care. **Jean-Denis Greze** [37:41]: I love good friends. A lot of, like, true friends, you know, like, hanging out on the weekends, adventure firms. I love them. They're great. I make fun of them a little bit, but Make fun of them before. What are we because I'm the fan of SP. I don't think they work as hard as I do, but they make more money. Oh, a 100%. You just chose the wrong business. So Yeah. I know. A 100%. I just wouldn't be it wouldn't make me happy. The way I think about venture capitalists and the value overall is they're distributing the chance at an outsized return. You find a lot of smart founders. You give them money, and then some of them really hit it out of the park, you keep, you know, supporting them as they grow and make giant businesses. And so if you think on a human level, it's like, well, a bunch of founders are gonna fail. If your measure for success is a $10,000,000,000 company, like, 98%, I don't know, some really high percentage of founders are gonna fail, and that's just life. And so if you're a founder, you know that you're just part of a capitalistic machine to get to innovation. And you do it because you love it and because you believe in the mission. For all these irrational reasons, you do it. But you always have to ask yourself, like, is this worth my time on Earth? And as we said earlier, life is life is short. And right now what's happened is there's a bunch of founders who've raised a lot of money with businesses that in reality don't quite have the product market fit that they thought that they would. And when that happens, you gotta be really, really careful because it's easy when you have three years of runway to spend another three years of your life trying to make a thing that has a very low chance of getting to product market fit to work. And I think a lot of founders are actually asking the question like, reset. Just do a totally different idea. Or like, return your money, and then decide if you want to be a founder again, or like start a product at a bigger company or whatnot. And there's a lot of these I think they're zombies where they have some revenue, but they just don't have venture growth. So you could turn it into a lifestyle business, but, like, is that really why you wanted to start a company? It's not. Otherwise, you wouldn't have taken venture capital funding. And I think people are gonna take good years of their life and of creativity, and they've been fooled into thinking they're close to product market fit because of the zero interest rate environment. And the zero interest rate environment is gone, and they're actually much further than they thought. The key for me is product market fit isn't a binary thing. Like, you don't have product market fit or not have product market fit. You have degrees of product market fit. Right? And how easily people buy your things, and that shows up in stats like CAC to LTV or whatnot. It's not like you have it or you don't. So I'll give you, like, a weird big company example, but it's really interesting. You think of Snowflake, data warehouse. So I'm the CTO of a company. What's happening if you look at the Snowflake numbers, it appears that their current customers' rate of usage of Snowflake, like the growth of what an existing customer would spend on Snowflake, isn't going up nearly as much as before. So last year, before, like, if you're average customer of of Snowflake that gave them a $100 in year one, they may give them maybe a $130 in year two. Just existing usage. No new sales, just including usage. But now that seems to be going up less. At least that's what the, like, numbers look like. What's happening? Or, like, Gong is another example where I think for Gong, we like them because they make the team more efficient, but we're also aren't hiring more salespeople, and their model is seed based, and so they're not gonna see as much intrinsic growth from all these companies not hiring as many salespeople. Let's go back to the Snowflake example. What's happening? Okay. Here's what's happening. Before, when my team was like, we want to put more data in Snowflake, I was like, zero interest rate, so funding is free. Like, literally putting more data in Snowflake, I pay them, but there's zero interest rate on what I put in there, so it's easy to raise funds again. So I'm like, well, if in the future I can generate return on this data that is above 0%, it is worth it for me to pay for the cost of the data going in the data warehouse. **Unknown** [41:09]: Now suddenly, I wake up and I'm like, well, the hurdle rate is 8%, and I'm trying to get to cash flow positive as quickly as possible. And so I'm like, yo, people. Like, first, no more data **Jean-Denis Greze** [41:18]: into Snowflake until you're really sure that you can generate much more value relative to the cost in the next, you know, twelve to eighteen months. And number two, what are we storing in Snowflake where we have really low odds of making more value out of it? You know, we're like, okay. We're gonna reduce how much data we store there because the hurdle rate and the amount of value I think I can get from data products is is just higher. Like, the hurdle rate is higher. The value I need to show is higher. And so the product market fit for Snowflake as a data warehouse product, that's the same binary. But the value of a data warehouse in industry just went down because the value that I need to generate from that data needs to be higher for me to be willing to spend that cost. And so everywhere right now in tech, what's happening is products that were top three value creation for businesses are now fifth on the list or seventh on the list. These companies that thought they had product market fit, there's a structural thing that's changed that's made their product market fit less, and in many cases, less so that it's not a growth business anymore. And I think people are not thinking through it. They're thinking like, oh, it's a little harder to sell until there's more money in the market or until these companies start growing. And I'm like, no, actually, I'll still spend less on my data warehouse when I'm at cash flow positive because I need to get more value out of that data for to be worth it for me to store it. I think it's a more fundamental change in in how people look at at returns. Would you be a long or a short on Snowflake? I don't know what their stock price is right now. 60,000,000,000. 60,000,000,000? I'm short. Look. I'm a long term S and P five hundred investor. **Harry Stebbings** [42:44]: Speaking of kind of differentiated opinions, you said another differentiated one to me before, which is I don't have a mental model for generative AI, and that is a problem, but neither do you. But what do you mean by it? **Jean-Denis Greze** [42:55]: I mean, what is a great product or engineering leader or great business leader? Right? You you need clarity on what is possible and what is not possible. Like, what can you build with software? What can you not build with software? So what's really interesting about Gen AI, it makes really cool demos, but I actually have a lot of trouble answering the question like, where can we build great products with it and where can't we? And I used to have a very very good model of what you could do with software and to a certain extent hardware. You know, I understand what computers are good at doing and what they're bad at doing. Now suddenly with Gen AI, there's a bunch of stuff they used to not be able to do, like deal with ambiguous human language or create new images based on words that they're really good at doing. I just don't know quite what really good is. Like, I don't have a sense for what they can or can't do there. Look, that's my problem. Right? And I need to develop that intuition. Because if I don't develop it, I'll be out of a job, like, pretty quickly. And I think that's true of a lot of people in tech. Like, you really need to understand the bounds of technology so that you can know what business problems you can answer with with software. But I think everyone's in this situation, and so we're we're in the early stages of it. And so it's okay not to know. **Harry Stebbings** [43:57]: What's been the biggest career bet you've made that didn't work out? Like, product wise? Anything. **Jean-Denis Greze** [44:02]: When I was at Dropbox, I was responsible internally for trying to build a Slack like product. Basically, a a product that would allow communication on top of, like, the documents that are in Dropbox. We really, really didn't figure that out. Like, that was, like, a big flop. I think we were too far from the customers. There's a ton of stuff in terms of, like, early product that I I got way wrong on that one. I learned a ton from it. **Harry Stebbings** [44:23]: JD, I love this. I could talk to you all day, which is wonderful for me, but I'm a VC, so we both figured that I had more time. I I wanna You're a media entrepreneur. You're a media entrepreneur. Thought finish with a quick fire round, my friend. So I say a short statement, you give me your immediate thoughts. Does that sound okay? It sounds okay. So tell me, you're a prolific angel as well. What's been your biggest lesson from your angel investments? **Jean-Denis Greze** [44:44]: It's really hard to predict at angel stage who's gonna be successful. And I've been like, renewed belief in humanity when I see founders then I'm like, the idea is good, but I'm not sure this founder can do it. And then you see the founder change into, like, a unicorn of a human. I think inability to predict people's ability to grow has been, like, a real, you know, eye opener. **Harry Stebbings** [45:05]: If you could put all of your money in one company that you're investing in, what would it be? **Jean-Denis Greze** [45:09]: I think these two. It's Rupa Health and Atlas. I love the mission. The founders are awesome. They, like, power through anything. And I don't do it for the money. I do it for, like I think they'll have successful outcomes, but I do it for how interesting the founder and the product is, and I think those two are doing very cool things. What's the biggest piece of startup advice that you hear that's total **Harry Stebbings** [45:27]: BS and why? **Jean-Denis Greze** [45:29]: The thing you should realize about all advice and the most important thing is, does the fact pattern of the advice match up with the fact pattern of your situation? And often, it doesn't. So what you take from the advice is like the delta between the advice and where you're at. Which seed fund do you invest **Harry Stebbings** [45:43]: in if you could only invest? First round. **Jean-Denis Greze** [45:45]: I like those guys, and I think they really care about helping founders get to product market fit. They will sit and spend more time with the founders to help them get there than other funds that I know, so that's why I have a a ton of respect for them. If you can invest in a series a firm, which would it be? Well, it was once upon a time, you could just say benchmark to that. But if hard for me to say not not Sequoia. You know? Even, like, you know, Brazil and stuff, it's like, oh, New Bank. Of course, New Bank is with Sequoia. Like, while we were all doing other stuff, you know, they're out securing that stuff. So, yeah, their records has been really strong. What do you know now that you wish you'd known when you started? There's this piece of advice, which I think is good advice, that I give to to people at larger companies, which is like, the best thing to work on is the thing that has impact for the business, but that leadership doesn't care about. You can unpack that piece of advice for a while. If you're a leader, you can unpack that piece of advice and ask yourself sometimes what the best things for your business are happening where you're not looking, and what does that say about you as a leader? And I think for employees, it tells them, like, the North Star is having impact. And having impact at any business is really hard because there's all these forces that get in the way, like politics and internal incentives and whatnot. But ultimately, the impact is what matters. You gotta find a way to work on something that allows you to have it. Final one. What would you most like to be remembered for as a leader? I hope that people who've worked for me or on my teams or with me feel they did the best work of their life up to that point while they were working with me. If I could achieve that, that would make me very proud. **Harry Stebbings** [47:08]: JD, I've loved doing this. As you saw, you prepped for the schedule. I didn't stick to it so well, but this has been a joy. So thank you so much, my friend. **Jean-Denis Greze** [47:16]: Yeah. Thank you so much. It was great to chat, and, yeah, look forward to hearing the episode. **Harry Stebbings** [47:21]: I mean, that was awesome. What a broad and wide ranging discussion that was. I wanna say huge thank you to JD for being so open and so willing to move on schedule there. If you'd like to see more from us, of course, you can on YouTube by searching for 20 v c. But before we leave you today, ## Sponsor read **Harry Stebbings** [47:35]: when I talk about using Coda, it's not lip service or because it's in the ad copy. 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