: Great to see everybody. Thank you for inviting me.

: Sure. Well, first of all, thank you again for inviting me. I know some people on this call are Yale alumni. I was Yale class of 1977 at Saybrook, went directly to Stanford business school and ended up on wall street working for the first Boston corporation, which is now credit Suisse, doing media industry, mergers, and acquisitions. What a number of people do after college or business school is they join what I call academy companies like consulting firms, investment bank. At this point, probably Google and Facebook are companies like that, where they have great training programs and early in your career, you get a chance to just learn the basics of business and a function like finance or marketing, things like that.

And, from First Boston, one of my clients was a television programming company, called King World Productions, which did wheel of fortune jeopardy and the Oprah Winfrey show. It was a public company with three hit shows and they had an accounting CFO and they wanted a wall street CFO. So I knew about the media industry. I knew about finance. I had never been a chief financial officer, but they took a chance on me and because they knew me, they hired me to be the CFO of king world. I was 32 years old and the CFO of a New York stock exchange public company that was very profitable. That was my big break to get that job. Once you're a public company CFO, whenever any other company does a search for a public company CFO, you're on a list of potential candidates. I got all my other CFO jobs after that.

I just love learning. I would constantly try to learn more about the areas that I was focusing on...

: Well, the personality trait, which I assume is common to most people at Yale is I was always very curious. I just love learning.I would constantly try to learn more about the areas that I was focusing on, which for me was both an industry focus and a skill focus. So, my first job out of business school was actually at Boston Consulting group working for a lot of different clients. I had some media clients, I had a chemical company client.

I had a healthcare client, trucking client, and I learned about a lot of things. At some point in your career, it probably helps to focus and I focused on media. I learned a lot about the newspaper business, television business, things like that. That was my industry focus early in my career. In terms of functions, if you think about all the functions in business, you could be engineering, product marketing, sales, finance. I always liked math and finance seemed like a better fit.

I thought about sales at one point, but I think I was a better analyst than I was a salesperson. I migrated to finance. I think the opportunity for me, both at first Boston and at King World, was that I had developed, I spent a lot of time, a lot of effort. I learned a lot about both the media industry and finance and that really made me qualified.

: Jeff: “Exactly. There's a concept that people talk about, which is having a profile of a T from a learning point of view. Which is, if you think about is visualizing a T where it's a thin horizontal thing. And then it's deep in the middle. Know a bit about everything and then, a lot about one thing. I was very curious, so I've tried to learn a lot about a lot of things, but then I wanted to go very deep on finance and media.

: Well, you may have noticed that my name is Jeffrey Epstein. Everyone is off video here, but put in chat. Does everyone know who the other Jeffrey Epstein is? Just put something in chat if yes or no, there's another Jeffrey Epstein out there. So one person, Duckju, I'm not sure I'm pronouncing that right, said yes. What other people, has anybody else heard of the other Jeffrey Epstein? It's a little unfortunate cause the other Jeffrey Epstein is pedophile and was arrested and committed suicide. So, it turns out that I've never met him, but, we had mutual friends and one of my friends is a CEO of a company.

About 20 years ago, my wife got a phone call at home from an administrative assistant asking when is my plane ready to come to pick up this friend.

My wife answered the phone and said, excuse me, what you're talking about? She said, well, is this Jeffrey Epstein's house? Yes, it is. Well, Jeffrey Epstein is flying my boss out to Europe and his plane is leaving from the airport. When's he leaving? My wife got very confused. She said, my husband doesn't have a plane. It turns out that person knew both of us and the assistant called the wrong Jeffrey Epstein. My wife was very upset for a while. She thought, Jeff, why don't you have a plane? And now she doesn't say that anymore. Now she's pretty happy with me.

It's really a question of what is the right career for you.

: Well, I've had a chance to think about this a lot, talking to my own children and talking to other young people as they think about their careers. And then there's two things. One is an expansion of what I said before, which is you start off as a generalist and then over time you need to become a specialist. You're early in your career, companies say, or whoever's going to be the hiring manager or the employers who say, I just want to hire a talented person and we'll teach them and let them learn on the job. By the time you're in your late twenties, early thirties, people don't want to hire someone to learn. They want to hire people who've done it before.

They want to hire people who can immediately be productive and they're hiring for experience in addition to potential. Early in your career, the advice is to try a lot of things. It's like going into a clothing store and trying things on for size. And you say, I like the style. I like this fit. At some point you say, well, this is what fits comfortably on me. This is what I'm going to learn a lot about and become better. For many people who've gone to good schools, you're going to get a good job. You're not going to be unemployed for a long time.

It's really a question of what is the right career for you. And, the idea that you will work for a long time. I've been working for 40 years. So that's a pretty long time.

If you're gonna be working 30 or 40 years, you can afford to spend your twenties trying a lot of different things, seeing what fits then by the time you're about 30, you should probably figure out, okay, this is what I'm gonna do now. I'm gonna get really good at it. Imagine you decided you wanted to be a lawyer. You go to law school, you graduate from law school when you're 30, let's say, and then you spend the next 10 years becoming a really good lawyer so that in your thirties you become an expert at your area. By the time you're 40, you're now at the top of your game. Now you're the partner at the law firm or the partner at the bank, or the senior executive or a CFO or whatever. You spend your forties performing and contributing quite a bit after that.

If you have that kind of timeframe and you're 25, you don't have to decide tomorrow what you'd do for the next 30 years. You still have plenty of time, but by the time you are about 30, you should probably have figured it out. That's one way to think about a career.

Tell people what to do, but not how to do it as a leader. People will surprise you with how creative they are.

: Well, I have two stories. One is that it comes from the American military where they say, tell people what to do, but not how to do it as a leader. People will surprise you with how creative they are.

A manager gets people to do things and a leader inspires people to want to do things. So it's one thing to just direct. If you're a leader, it's one thing to direct people and say, go do this. Another thing to say, how do I inspire someone that they want to do it? So it's their motivation, not my motivation.

Think about how you can recruit people and train them and inspire them so that you all share the same goals and then you don't micromanage them.

: That's a big difference as you get older and more experienced and you have been leading people, you try to think about how you can recruit people and train them and inspire them so that you all share the same goals and then you don't micromanage them.

You don't tell them necessarily if you've hired the right people, you align on the goals and you say, go off and do it, then come back. We'll trust, but verify, and I'll check in, see how things are going. If there's a problem, come back and tell me and I'll try to help you overcome the problems, but in the meantime, I'm expecting you to get it done.

You need to let them fail in small ways. So they learn to get better.

: Yeah. Agreeing on what are the goals so that everyone's goals are aligned and then letting people figure out how to do it. Even if they don't do it as well as you, if you've been around 10 or 15 years and you're pretty good at your job, maybe you can do your subordinates’ jobs better than they can. If you do it for them, then they'll never learn. You have to let them try it. It's like the kid has to learn how to walk and they have to fall down a few times before they walk.

You need to let them fail in small ways. So they learn to get better. Ultimately if you hire the right people, like a better unit, they'll get better than you at it. You have a lot of leverage. Fundamentally, no company has three employees of any size. Every company has hundreds or thousands or tens of thousands of employees. You have a larger organization to recruit and train great people and let them perform and give them guidance. But you can't do everything as an individual.

: Well, everyone starts off being an individual contributor. Early in my career, I would have a team of bankers reporting to me. At King World, I started out with 10 people and ended up probably with about, I would say a hundred people on my team. At Oracle, I had over 6,000 people reporting to me.

Every time you fire someone, a manager should say, where did I screw up?

: Well, the first thing is, managers are in charge of recruiting the right people, secondly, putting the right people in the right jobs and then setting goals and then holding people accountable for achieving those goals. If you think about that sequentially. The first time manager is probably often hiring the wrong people and they just learn that through trial and error, because they don't have a clear idea of what the qualifications are, or how to do it. If a senior executive can help them, middle management learns how to hire and how to evaluate people early on, and you can increase the success rate of hiring from 50% to 90%. That's phenomenal. You can do that. Once you've hired the people, you have to make sure they're in the right position.

For instance, if let's say you hire someone and they don't work out and you have to fire them, that's your fault. You, the manager's fault. You have either hired the wrong person or you gave them the wrong responsibility. What could you learn from that? Why did you do that? And so doing a lesson learned every time you fire someone, a manager should say, where did I screw up?

Why did I hire that person? Why did I put them in a position where they failed? And what can I learn from that? So I won't do it again. These are hard things to teach. A lot of it just comes from trying and failing and then doing a little better next time.

Learn to figure out what are the lessons, why something didn't work out as intended.

: Exactly. I think, from my point of view, what a first time manager might say is you hire someone, they don't work out, you fire them and you say, well, they were just incompetent. Well, that may be true, but why'd you hire them? You were incompetent. That would put them in that position of responsibility. So don't blame them. It's your fault as the manager. You don't want to do that twice. What went wrong? Did you not interview them properly? Did you not check their references thoroughly? Did you not match their skills to the responsibility? Did you not understand what the job requirements were? Maybe because it's a job you haven't done personally?

As an example, when I had, let's say I had a team of eight people reporting to me and someone leaves. One technique that I really liked was rather than replace that person right away, I would not replace that person. I would have that person's direct reports report directly to me. Even though for a while, I might have 15 direct reports because I have my direct reports that I have that one gap and those people two levels down reporting to me. I would learn a lot about what that job was in that organization. When I hired someone, I knew a lot better. What were the requirements of that job? Because I had been doing that job for three months, let's say because I was essentially managing one level down.

: The first time, if I can, add another comment, which is, let's say you're an individual contributor and you're promoted to managing for the first time. Now you're managing a team of three people. Treat the job of manager seriously, the same as if you were an engineer, or if you're a marketer or a finance person, whatever it is, as good as you need to be in engineering and marketing and finance, you need to be that good in leadership. You can, there's a ton of stuff online videos and books. You can read about it. The best way to do it is to find someone in the organization who you personally think is a great leader and just spend time with them and ask them how they do it.

Maybe, meet with them once a month and say, I'm having a challenge with one of these people that I'm working with on my team. They're not performing well, I'm struggling with it. And the senior leaders are generally very eager to help and willing to help.

: I probably could have used Amotions a few years ago when I was learning myself.

: Stanford business school has a famous class that almost every student takes called touchy feely, which is interpersonal dynamics. It's how people interact with each other. There's about 400 students in the first year of class at Stanford business school. You have 70 people or so in your section and you take all your classes in the first quarter with the same 70 people. You get to know them pretty well. You often have study teams, you get to know them pretty well. You're taking this class with maybe 12 other people, touchy feely, and some of them you've already known. Some of them you don't know, but you got to know during the class. They start off the first few weeks and they do these getting to know you exercises. One of the exercises is, pre COVID, you're all standing in a room together. The assignment to you is Jeff, physically go over, everyone's standing up, take everyone in this room and put them in order, physically move them in the room in the order of who you feel closest to and who you feel most distant from. You rank order them from one to 11, if there's 12 people in the class. Boy isn’t that shocking because you have to make choices. You have to, you're required to just say, I think this person I feel more aligned or closer to this person. And that person who is 11 may think they're really close to you, and you think they're most distant from you. You learn a lot because there's a lot of miscommunication going on and it's embarrassing and complicated, but people make these judgments all the time. They just don't talk about it. So, you learn a lot in that class.

Praise people in public and criticize in private.

: It's a lot of little things. And, often I've learned by doing the wrong thing and then fixing it. So, one thing I learned very vividly was I was in charge at one point in my career a call center with about 300 employees in a different town and in Houston, Texas. I was living in New York and in charge of this call center among other things. So I went out and I visited. I spent the day with the whole team learning about what's going on. At the end of the day, a woman named Carol, who is the general manager, invited me into an office, into a conference room with her direct reports and said, Jeff, could you tell us what your reactions of the day were? And I just said, well, here is what I thought was great, here's where I thought we could improve. And, these are my general reactions.

I went off and I did some emails and Carol came into my office crying. And I go, oh, this isn't good. I made someone on my team cry. She said, Jeff, that was the most humiliating experience I've ever had in my professional career. You came in and you criticized me in front of my team. I didn't even think I was criticizing her. I thought I was trying to be objective about some things are going well, some things we could do better and I didn't perceive it as being critical at all. She said, Jeff, haven't you ever heard?

You're supposed to praise people in public and criticize in private. I said, well, no, actually no one ever told me that before, but now I'll always remember that. That was a pretty important learning for me.

: By the way, I just put in the name of the book of the touchy feely class that I talked about at Stanford. The teachers of that class have written a book called Connect. The book is in the chat if you're interested.

You start with the endpoint set with some reasonable timeframe and then work your way backward and say, what do I have to do?

: For instance, in a business context? What I've always found is that I try to imagine the future that I want. If I'm at a company, with $10 million of revenue, and I try to think of, let's say three to five years, because three to five years is enough time that you can make investments now that will pay off, but 10 years is a long time from now. To me, it's a three to five year planning period. I say, well, let's just say four years.

If we have 10 million of revenue now, and you've got a hundred employees, if things are going well, and we're growing, how big we think we could be in four years, do we think we could be 500 employees and 50 million of revenue or could be a hundred or whatever the number is. Just pick a number you think is reasonable and say, okay, well, if we're going to be there at four years, where do we have to be in two years, we're going to be at three years, we're going to be in one year and draw a line between now and then and say, okay, well that means that from now until next year, we're going to have to grow from a hundred to 200 people. These are venture-back companies that are growing really fast.

In four years we'll have 500 people, whatever. Well, at 500 people, can I, if I have one product in just the US, can I still only have one product and just the US and be five times bigger in four years, or do I have to have a second product or do I have to be in Europe and then, okay, well, I probably have to have a second product, but what am I going to make, if I have to have a second product. 30% of my revenues in four years are going to come from my second product. When do I have to start my second product? Well, I probably have to start it soon. I have to start it again in the next 18 months, otherwise, I'm not going to get big enough in the fourth year.

Okay. Well, I have to have people working on it. Now I'm going to launch the product in 18 months. You start with the endpoint set with some reasonable timeframe and then work your way backward and say, what do I have to do?

And then you have to realize, well, every new product I started is not going to work. If I want one successful new product, I might have to start two because one will fail or something like that. And, so I think about that from terms of your team, in terms of your product, in terms of your sales, marketing, the geographic distribution of customer segment, ideal customer profile. That's when you talk about strategy, that's how I think about envisioning where you want to be in the future. What customers do you want? How are you going to serve them where the market's going to be?

: Right. And, and when you say long, often people say long-term, they mean 10 years. For me, the three to five-year timeframe is most relevant.

: Well, I've always thought in that timeframe. There was never a time where I could see 10 years in the future in my career, and I was always doing something very different from what I'd thought.

So, but I think, three to five years, generally, you can get a sense of, are you going to be at the same job? You think you might do a different job, you can take one or two steps ahead, and then you can try to meet people who are three to five years older than you, or three to five years further ahead in a career than you and say, well, if I'm in this particular function at this particular kind of company, who are the people who had my job four years ago, what are they doing now? And if I meet five of those people, one of them has a great job and a great career. One of them is a dead end, and I don't want that. Most of the time, people don't do something brand new that's never been done before.

Are you doing something that's somewhat similar to something that someone has done before? I spent 25 years as CFO, and I could look at hundreds of CFOs and see what they did. Once I became an investment banker, I could see what a career as an investment banker was like. Once I became a CFO, I could see what a CFO career was like and figure out which was right for me.

: Not only giants, certainly learning from giants, but learning just from regular people who just did a good job and made some good choices and have interesting jobs.

: The question is how as a board member, have I helped companies think about growing and the future? Is that the question?

: Well, as a CFO, it's the job of a CFO is quite different from a board member. As a CFO, the first job is integrity. You just want to make sure that everybody's being honest and nobody's cheating, stealing, and things like that, which is the basics. You want to be able to be effective and efficient. You want to close the books on time, have the financials be accurate. You want to make sure you have enough cash to run the business. And, you want to do it with reasonably low cost and quickly. You want to be effective, meaning you'd like to be able to give the business people the data and the analysis. They need to make good decisions.

You'd like to raise capital when you need it, but raise it in advance before you need it. If you have investors, communicate with investors under promise and over deliver. There's a whole series of financial expertise that you would do as a CFO running your department.

Being one of the players on the team as a board member, you're now just not responsible for one department and you're fundamentally responsible for the whole organization. Your most important job is hiring and firing the CEO. They're helping the CEO set the tone from a culture point of view and a strategy point of view and helping with advice, because ultimately the CEO makes the decisions. And the board helps guide those decisions or inputs it gets then put into decisions, but fundamentally you defer to the CEO. Unless it is a private equity controlled company, when the private equity partner makes the decisions. But typically in a public company, it's the CEO that is going to say, back to what I said before, what's the value we're providing customers? How do we take our current product line and our current customers, and grow as quickly as we can, and provide as much value as we can.

You say, well, the hardest part is the extent that we're generating a lot of extra capital. Do we give the capital back to shareholders or do we reinvest in the business? And if we reinvest in the business, how much risk do we want to take? Where do we want to invest? So the capital allocation decision becomes a very important decision for the CEO and the board. Historically big profitable companies have generally on average done a very poor job of capital allocation. There's one story after another of big profitable companies that have wonderful businesses, but then they go off and make terrible acquisitions or new products that fail. You look at a company like Amazon, that's done a brilliant job of capital allocation, and constantly coming up with new products and has done a wonderful job. It's just really exciting to see that.

I'd say the most important thing that I've seen is the most successful teams start with a very small idea.

: Well, the course is called the Lean Launchpad. It's lean startup methodology created by Steven Blank and popularized by Eric Ries in the book The Lean Startup. What the class is teams of four or five graduate students, typically graduate students apply as a team with an idea. In 10 weeks, they are required to interview a hundred potential customers and build multiple versions of their product. Typically one or two or three of the teams by the 10th week actually generate some revenue. Every year I say two of the teams on average go out to raise venture capital and start their business along the same lines. We're starting from the very beginning, just the idea stage.

You could end up with a big company, but they don't start with a big company. A startup is very different from a big company, which executes unknown processes with known products and known customers, and a startup is searching for customers and searching for product market fit. If you think about the companies, Facebook, for instance, did not start with a billion users. Facebook started at Harvard and all it was a way to look up people only at Harvard. You needed a harvard.edu email just to sign up. Within two weeks you got 90% of Harvard students to sign up. The founder went to the Ivy leagues. For a few months, you could only use Facebook if you were an Ivy league student. And then he expanded to colleges. I think for a year or two, you can only sign up if you were in college. For a couple of years, you could only sign up if you were in high school or college. I think it was maybe four years from the founding of Facebook before a non high school or college student could even sign up for it. You think about that's a long time. Even though he might've had a vision that one day everyone will use Facebook, he didn't start out that way. Airbnb started out as a way to rent an air bed in an apartment while someone was in the apartment. It was a very different product than what it is today.

But they got product market fit, and then they built it from there. What we try to teach in this class is try to think of the smallest possible problem where you can solve the problem. You only need 10 people, 10 customers to just get started and then try to solve the problem for those 10 people. If you can solve the problem with those 10 people, you could probably find 11 and then 12 and then grow from there. If you try to solve the problem for a million people, it's really hard to solve the problem for a million people at the same time.

: Well, I made my own decisions early on that I wasn't going to work a hundred hour weeks. I have a complete focus on my job. I was married at age 26 and we had kids. I ended up living in Connecticut and working in New York for many years. My role, my life was basically working pretty long hours during the week, and then very seldom on the weekends. When I took a vacation, I took a vacation and I turned off my computer and I put a message saying, I'll check your email next week when I get back. And, my boss and a couple of other people have my phone number if I need to be reached, but, generally, it didn't work on vacations. I think you need that time to just refresh and have a private life.

And, for me, family was number one, work was number two, and then everything else was after that. When your kids are young, I mean, they want to be with you all the time. You have less time for everything. Now, my kids are all grown and I've got actually more time now than I did 20 years ago. Over the course of a career, you've got plenty of time for work-life balance, at any given week. You may not have very much balance, which is a challenge.

: What my kids are doing is they're working during the day. They always come home for dinner at night pre COVID and then they'll go back. They'll work online at night after the kids are in bed. That cycle seems to work well for them. Because I was commuting, I didn't actually get a chance to come home in time. I got home at 8:30. The kids were already in bed.

: I'll take it from the acquirers’ side first. When you have a big company, you have multiple products in multiple markets going after multiple customers, and you have a sense of your product roadmap. Here's where we are today. Here's where we want to be in three to five years and you have two choices. You can either build those products yourself or enter those markets yourself. Or you can acquire a company to do that. I guess there's another variation: you could partner with someone or do a joint venture or something, which is less common. Fundamentally there's a build or buy strategy. At Oracle, as an example, I would say half of all the new products we developed were built in house and roughly half of those were acquired.

Of course there's a lot more people out in the world who are not your employees than people who are your employees. To think that you are going to have all the innovation in your category, in-house is generally not true. Generally there’s always a lot of innovation happening outside your company. If you have a big company like Oracle, where you have 30,000 salespeople, it's the playbook that we ran very successfully is we would buy a company, let's say with a hundred million of revenue with a hundred salespeople, and we would buy the company and take the product and then give that product to our 30,000 salespeople. They would sell a lot more of the same product because we had all 300,000 customers all over the world.

Maybe the company required was only in the U S and maybe they only sold to mid-market companies, but we could take that company. We could perhaps add some features to the product to make it enterprise ready, and then we could take it internationally. We wouldn't need all their finance and HR and back office people. So we could save money there. We could hire more engineers to make the product bigger and better and integrate with our product line. We could give it to our sales team and keep their salespeople as product experts, but then have our sales team cross sell it and generate a lot of revenue. Oracle has probably made over a hundred acquisitions.

With probably over 90% success rate from the selling company's point of view, fundamentally the question is, if you're the founder, do you want to build a large independent company, or at some point, do you want to sell and cash out? And some of that is personal. You feel comfortable running a large company. You think you have the talent for it. Part of it is, Hey, I've made a lot of money. Why not just take some money off the table now to sell the company. Part of it is, what your investors want. If they've been in for seven years and it's time for them to cash out. I've had a whole range of things where sometimes the CEO says it's time to sell, and we have an excellent sale.

Sometimes I've been in one case where the CEO said, I'm worried about the future of this market. It's getting more competitive. I wanted to sell but the investors didn't want to sell. We had to have some tough decisions. We ended up selling the company because it was tough to keep the company. If the CEO doesn't want to keep on working, we would have had to replace the CEO. There are other times where the investors lose faith and they say the company's not going to do well in the next few years. We need to sell it now while we can get a good price. It's very specific facts and circumstances.

: What do I think about that? Warren Buffet is great, I've read a lot about what he's written and watched him. And, he has an interesting concept, which is, think about all the people, at your company or your school or whatever, who do you admire most. Literally do this. It's a good exercise. Write down the qualities of that person, why you admire them the most, and then think of the people or an individual who you admire the least and write down the qualities of why you don't admire that person. Separate for business, just in life, ask yourself, are these qualities of the person I admire, things that I can do.

I mean, if I wanted to become a concert pianist, I probably couldn't do it. I just, I could work really hard, but I just don't have that talent. I think if I want to have the qualities of integrity and accountability and those kinds of things, create friendliness, whatever the key qualities are of someone I admire. Those are probably qualities that over time, with a little practice I could learn.

The same thing is true in a leadership context. Think about the leaders you've known and write down. Why do you think they're great leaders and think about the leaders or bosses that you've had. I see this question about a tough, difficult boss. Think about why they're tough and difficult and why they're terrible bosses, and then say, well, okay, what can I learn from that? And try to adopt the qualities of the good leaders and avoid the qualities of the leaders you don't admire.

: Yeah. You need to do two things: first observe, and then evaluate. You need to have a point of view. I mean, if you look at 10 leaders and you can't tell who's good who’s bad, that's a problem. I mean, you probably have an emotional reaction of which leaders you admire, which ones you don't. If not, just think about it, talk to your friends, then take somebody out for a cup of coffee and say, Hey, are these 10 different leaders in this company or this organization who is the most effective? Who's the boss that we liked the most? Who's the one who we want to follow, if they were all to leave and go to different companies. Who's the one we would go with if you were in the military, and the officer says, let's charge up the hill to take that machine gun nest. Who's the one you're going to stay in the foxhole and not go.

Would you suggest after analyses, observing, invalidating, adapting some of the key traits you observed from them and putting them into your own practice?

: Yeah, basically it's practice. If you have a friend, you can say, you can even talk about it and say, Hey, I'm going to work on the quality of inspiring the people around me, not just tell them what to do, but to try to inspire them to share the same goals. Here are some techniques. Let me try it out for a couple of months and then let's sit down and see how I'm doing.

: It's just like any other skill, it's like practicing the piano or learning how to ski or whatever. You don't sound very good at the beginning when you're skiing, you fall down and you just try it and you get better with practice.

How do you compare career paths in terms of going in a big company route and progress in the career, or founding your own company?

: My observation is that some of the best founders and entrepreneurs did not really have a choice of working for companies. They would have been terrible employees. John Oringer, the founder of Shutterstock, where I served on the board for nine years. He was an engineer, went to graduate school of engineering and worked for a company for one day. At the end of the day, he said, this is terrible. I quit. And then he started his own company. He just knew that he would be a terrible employee and terrible follower. Who's just not good in organizations. He was a great entrepreneur. So part of it is his personality. If you have the personality where you can do either, and I probably am more of the organization person, but in another world, I could have been an entrepreneur.

I have two criteria. The first is that starting a company is hard. If you do it, you're going to be spending a lot of hours, probably for many years. If you get outside investors, you can't just quit and leave your investors high and dry, and your employees, things like that. You're probably signing up for five plus years. Ironically, the worst outcome is not failure. Let's say you start a company and you raise a little money and it fails after a year, you shut it down. That's one outcome. What if it's not a failure, but it's not really successful either. It's just chugging along and you've got up to 20 employees and you're got some revenue, but you're breakeven. It's not really growing. You don't want to shut it down because you have to fire everybody. Now you could be stuck for five years in a dead end company. That's the downside. So, I don't think you want to do that unless you really believe in the idea.

The companies that I've seen that did best, they were founders who had personal experience with a problem. For John Oringer, he actually created a software product and a small software product for two employees. As part of that product, you needed to use images in his marketing. He tried to license images that he found. It was very difficult to license images. He said, this is crazy. Why can't I just pay $10 and buy an image and use it everywhere in the world forever. Why do I have to go back every three months and redo the license? So he went out and he got a camera and he took a hundred thousand images personally for this camera. He created a site to sell images because he personally saw the problems that entrepreneurs had buying images from Getty images and the incumbents. So he experienced the problem. He saw what the problem was. He knew what a good solution was. He went out and set up the product to solve that problem. Mark Zuckerberg saw the problem of people at Harvard having found it difficult to know each other online. They would meet occasionally in person, but you couldn't say, well, who's the friend of my friend? That'd be cool to have a product. He saw that and he built the product for himself and his friends. If you have an idea like that and you do it as a side project and you build it and you start getting traction, then you don't have to quit your job and start the company. You can actually start the company first and only after it gets traction, quit your job and build that out. I think that's generally a pretty good way to do it

: Yes, I always felt that I could get a job, so I never really thought I was taking such a big risk. The worst that could happen is a company is not gonna work out and I'm gonna lose my job and get another one. So, I was willing to take risks in my career, but they really weren't the kind of risks that people take when they leave one country and don't know anyone and don't speak the language. You go to another country, that's a big risk. Or, if you lose a job and that's the only job you can get, and you may never get a job again. I always had financial security that way.

The biggest turn, as I mentioned before, was my luck in getting hired as a CFO. I had never worked in a finance organization. I had never worked for a CFO. I didn't really know what a CFO did every day. I was an investment banker and my client hired me. They never would have hired me from a resume because I wasn't experienced, but because I had a relationship, they did hire me. So, that was the biggest turn because once I was a CFO, then I was qualified for all these other CFO jobs in terms of risky moves.

At one point in my career, I was living in Connecticut. I wanted to work in the New York metropolitan area. I was looking for another private fast-growing venture backed company that would go public where I could be the CFO and take it public. It was at a time, 15 or 18 years ago now, where the economy wasn't doing very well. There weren't that many companies growing. I was introduced to a company that was in the video game business. It was in New York, it was backed by Goldman Sachs and another venture firm, great investors. It was growing quickly, even though I didn't really understand the product, I liked the founders and I liked the investors and I said, well, I'll try it. I actually wrote a check and I personally bought stock in the company. Within about a year, I realized that the company had stopped growing.

They had missed, this was just before Zynga started and were selling paid to play games. You played for free for an hour. You had to pay $20 to buy the game online. Zynga came out with free games where you paid a dollar or 50 cents or something to play within the game. And that whole category took over. Our category collapsed and our company didn't change fast enough. And, so after a year I left and ultimately the company went out of business. And so I lost all my money. That was not a very good decision. The lesson learned there was, I knew it wasn't a great opportunity when I joined, but it was the best opportunity I had at the time. What I should've done is just had confidence to say, look, even if it takes me another three or six months to find something, I should just wait. I just didn't want to wait any longer.

Make it clear what the goals are so that they know it.

: I think often asking questions and trying to understand why is more effective than giving opinions and just making statements. So, let's say that you're the boss and you have subordinates and you think they're not succeeding.

The first thing is you should make it clear what the goals are so that they know it.

Shouldn't be a surprise to that. If you made the goals clear and you're measuring and you have fewer frequent check-ins and you're measuring with them, whether or not they're achieving their goals, they should know they're not achieving their goals before you have to have a difficult conversation with them. If they don't even know they're not achieving their goals, then you have failed as a leader in clarifying what the expectations are. What I like to do, for instance, there's something called OKR, is objectives and key results, which Google uses.

There's a lot of different ways of doing goals. Let's imagine you have a subordinate and you say, here are the three to five goals that I expect of you this quarter. So you set expectations. At the end of the quarter, you say, look, why don't you come in and tell me how you're doing. I'm not going to tell you. Tell me how you're doing with respect to these goals and grade yourself and grade red, yellow, green, like this goal is green. We're doing great. This goal is red. It's not going so well. Sometimes it's very clear. If you're a salesperson, you made quota, you didn't make quota. If you're a finance person and your goal was to close the books in 10 days instead of 15 days, how long did they close the book? So try to quantify it whenever you can.

If they come in and they say, well, it's red, but the dog ate my homework. There's all these reasons of other people. I couldn't, I didn't succeed, but it was everyone else's fault. No. Then that's one thing. If they come in and they say, well, it was red. Here's why I failed. Here's what I need help with next time. Next time it's going to be green and they're asking for help. Then you need to help them. You just work through, are they meeting expectations? It's very simple. It's basically setting expectations. At the end of some time period, say, are you meeting expectations? Are you exceeding expectations? You're not meeting expectations. If you're doing a good job, they will know exactly where they are and they know what they have to do. And sometimes they just can't do it.

They can't do it either because they're not capable of doing it, or they're not trained for it, or they're not trying hard. You have to understand, which of those three things is it?

: Well, it's very different if they don't have the skill than the capability. If they don't have the skill, you train them. If they don't have the capability, it means even after you train them, they still can't do it. There's no point of training. Someone who thinks they are not capable. You have them in the wrong job. They can leave the company or they have to leave that job and do something else. Or sometimes the job is really a collection of five different sub jobs. And, they're good at one and not good at another, and you just need to rejuggle their overall jobs so they can be good at the tasks they are good at.

: Well, I found the MBA very helpful for two reasons. One is if you go to one of the top schools, it's just a credential for the rest of your career, people say, well, he must be smart, he went to Stanford, he went to Yale and things like that. Whether I'm smart or not, isn't the question. The point is people realize that it's hard to get into these schools. So the credential in itself is important. The MBA curriculum teaches us basic things like accounting and finance and marketing and leadership. It is very helpful in some skills, the same way that, in any career, or any function, whether it's sports or music, if you're trying to learn how to play basketball, you need to learn how to shoot and pass, and defend. So those skills are very helpful.

There, as I said before, there are many companies that have training or are what I call them, academy companies like Goldman Sachs, McKinsey, the big four accounting firms. They just spend a lot of time and money training early in your career. If you can go there and get trained for the first five years of your career, that's incredibly valuable. Now, if you go to a small company, they don't have the training and then you have to learn on your own. And so it's a lot harder there. You just try to find a boss who is a good leader and a good trainer, and is willing to spend the time one-on-one training you.

: How to get aligned among the leadership team? Well, I think you have to decide collectively what you're going to do and what you're not going to do. So, an exercise that we use at DoubleClick, which is great as we got the leadership together, and we said, let's talk about everything we want to do over the next year. What are all your ideas for new products, new projects. We had about 20 people and everybody had 10 ideas. So we had sort of 200 ideas. We wrote them all on a whiteboard and then some of them were overlapping. We narrowed it down to maybe 120 ideas. We said, look, we're not going to do all 120 of these. We're only going to do three. Let's talk about what the most important ones are.

The people who had proposed the ideas would make a pitch for why their idea should be one of the top three. And we all listened. And then we all voted. At the end of the day, the CEO made the decision. By spending the day, once a year, doing that prioritization, we ended up all agreeing that these were the top three priorities of the company and the people who really liked idea number 51, who went into the meeting thinking that should be one of the top three, aft er talking to the other people and realized that none of the other 19 matters, the company thought that a top 20 let alone a top three, they felt better about it. Even though they really still like their idea, they weren't angry that no one took their idea seriously, because they had a chance to pitch their idea

Some other ideas, one it's like a competitive, a Darwinian process of the best ideas win. Kind of figure out which idea is the best and get everyone to be aligned with the idea. You know the concept that was famous at Apple, which is to disagree, but commit. You tell people, oh yeah, I don't think those are the top three. These are my top three, but at the end of the day, either everyone else agrees with a CEO makes a decision, then you say, okay, well, I'm going to commit. If you can't commit, you shouldn't be in an organization. It's good to voice your disagreement. Once the decision is made, you need to commit and work a hundred percent to accomplish what the organization wants to accomplish.Actually I think that's an Amazon leadership principle.

: Well, there'll clearly be a lot more remote work in the future than there was in the last 10 years.There'll be companies where there's no office and they just get together once a year, once a quarter, or there'll be some companies that are in the office two or three days a week. The challenge for an individual is if there is a headquarter, but you are not at headquarters, you're going to miss out. And I had that experience. I was in the California office at the Boston consulting group and their headquarters is in Boston. I had a fine time there, but we didn't know a lot about what was going on. It would have been better if I had worked at the headquarters. That was not even remote, and I was in the office every day.

If you're not in the office, it's even worse. So, if you have a choice and a company has a headquarters, I think there's a lot of value for you physically to be in the headquarters at least a few days a week. Because just as you get to know the people better, you build the relationships. It's a lot of informal communication. You find out what's going on in the hallway and at lunch and dinners.

: Thank you. It's a pleasure. Great to see everybody.