Ali Tamaseb talks to Clint Betts about the stereotypes and myths about what makes venture-backed companies successful, how the media has created a distorted reality when it comes to entrepreneurship narratives, the surprising benefit of strong competition and saturated market opportunities, what makes a great VC, remaining private or go public, macro economic outlook for 2023, and the future of tech startups.
Ali Tamaseb is a partner at DCVC, a Silicon Valley VC fund with over $3 billion under management. The investments Tamaseb led on behalf of DCVC has generated an enterprise value of over $6 billion and the companies he sits on as a board director employ over 3,000 people.
Ali, thank you so much for coming on this show today. You wrote a book called Super Founders: What Data Reveals About Billion-Dollar Startups. I'd love to start there. What does the data reveal about billion-dollar startups?
Hey, Clint. Thank you for having me here. So yeah, that's the book I published last year, but it was a long way in the making. It took me six years to collect the data. So when I became a venture capitalist, I had this internal question, "What is it that actually separates these very, very successful companies that go on to become multi-billion dollar successes, versus the other tens of thousands of companies that don't get there?" Maybe they are smaller successes, in most cases they are failures. And there's some anecdotal stories and there's a lot of VCs who make a living by probably having some insights or thinking they have some insights. But I wanted to get to the truths and see if there's any actual truths out there.
So I started collecting data. This is the most comprehensive data set ever collected on venture-backed startup companies in every sector, not just tech, it's tech, biotech and everything else. And I collected 65 data factors per company, about a third of it on the founders of these companies. Everything about them, their past, the projects they worked on, the different companies they were employed at, their titles, what they studied, where they went to school, how they knew we knew each other? All the ways of the company itself, where the idea came from, what was the competitive landscape when they started the company, what was the market size when they started the company, how many pivots did they go through and things like that. All the way through the history of the company in terms of fundraising, revenue, growth, and things like that.
So mostly very fundamental signals. So day one, when a couple founders started working together, what did the company look like at that point? And that's the main thing that I wanted to see. So I collected this data on basically a large sample of venture-backed companies and every unicorn company that was started in the 15 years that I studied. And I tried to look at all these different 65 elements and see what is different between them and what is not.
And it turned out that there's a lot of factors where historically people would have thought they contribute to success or failure, that the data showed are actually statistically not significant. So it turns out there's a lot of stereotypes, there's a lot of mysteries, there's a lot of common advice that comes and goes in this startup ecosystem that statistically are not correct and that's what compelled me to write a book. Now obviously in the book I talk about the things that do matter. I added. The book is not just data, it has a ton of stories as well, stories about 100 and more billion-dollar startups, their founding stories, the information about them.
So it has a lot of mini case studies plus long form interviews with the very, very successful founders or investors with Peter Thiel, with Alfred Lin of Sequoia Capital, with Eric Yuan who founded Zoom, with founders of Instacart, founders of GitHub, founders of a large range of tech, biotech companies that utilized venture capitalists to try to some color to the data. Because the data would show, "Hey, this thing matters or this thing doesn't matter.” And I wanted to add the story from one of these companies that would exemplify that data point. So that's the whole concept of the book called Super Founders: What Data Reveals About Billion-Dollar Companies.
What are the things that matter and what's just noise? And particularly the people you talk to, man, they're the most successful entrepreneurs of our time in a lot of cases in the companies that they've built. So I'm really fascinated with this idea of what actually matters and what's noise and what, in your experience as an investor, as a VC, do people oversimplify and they overcorrect for that and things that they should be focusing on?
Yeah, I think there is one thing that I found particularly has created these stereotypes. I feel like I see this less in professional venture capitalists and more in generalist startup circles and mostly actually the media. So some stories make more sense and these narratives make for better stories, better movies, better series, and those are the things that sell, those are the things that journalists want to talk about. And because most of the information that we consume comes to us from the media, from journalists, from movie makers, that has created this mismatched, this distortion of reality from what is real and what we feel like it's real. So I talk about some of these in the book. So let's talk about some of the things that the data found does not matter, and then we'll get to the interesting stuff which I found that does matter.
So for example, in the very first chapter, I talk about the number of co-founders. So for a long time there has been this discussion that, "Hey, solo founders are bad. If you want to start a company, first thing you do, you find a co-founder, multiple co-founders, and then you go and start a company." Actually, when I look at the data, while it's true only one in every five billion-dollar company was started by a solo founder. But even one in five is a significantly large number. And also when I compare that with the base group, with every venture-backed company, it actually turns out, there is no statistically significant advantage or disadvantage to being a solo founder. Neither is there to having two founders, nor three founders, nor four, nor five.
So essentially, the number of co-founders is not that important to the success or failure of the company. Because there's a lot of pros and cons. Founders might fight and a lot of companies may fail because of co-founder conflict because of co-founder misaligned incentives, because of a lot of things that can go wrong that can be avoided in the case of a solo founder. On the other side, there's a ton of great things when there's a good co-founding team that's working perfectly together and they can contribute to different parts of the business. So that's on an overall basis, it doesn't apply, this advice of you having to have a co-founder does not generally apply. For some people it makes sense to go solo and they are not less likely to succeed. For some people it makes sense to start a company with somebody they know or somebody that they want to work with and they have complementary skills. So that's one case of this.
And actually one of the examples of a solo-founded company is Zoom, where Eric Yuan founded this company as a solo founder. A lot of people may have advised against this, but this founder, along with many tens of other founders, started billion-dollar companies as solo founders. The second point, the very secondary contradictory point that's out there, everybody talks about the need to be technical, to be a technical founder. Now I'm a technical person myself, I come from a technical background and there's a lot of bias in the industry for backing technical founders.
One of the first things that you see and hear and every forum and every ecosystem is, "You need somebody who can code. You need a technical founder to start a technical company." When you look at the data, actually, it's right in between. 50.5% of unicorn companies were started by a non-technical founder, 49.5% of billion-dollar companies were started by a technical founder. So right in between.
And when you compare that with baseline, you see a little bit of improvement or a little advantage for technical founders in starting larger companies. But it's not massive. It's not like, "Hey, if you're not technical, you're going to fail." I mean half of all the billion-dollar companies ever created are created by non-technical CEOs. So it goes again, sure if you're technical it may make some things easier, but it's not set in stone. There's a lot of ways to go around this. Now you may want to hire a first technical person, you may want to get a technical co-founder. There's a lot of ways to go around.
And a lot of companies out there, the reason they're successful is not because of a technical move that they have. In some cases it's a business model innovation or a better reason that they have access to the market or some advantage that they have in terms of going to the market. There's a lot of points like this. One of the other contradictory things that you hear in the media typically is the visionary versus mercenary founder. Everybody's like, "Hey, you need to be visionary, you need to love this idea. You need to have experienced this problem personally in your life." And that part of this comes from, yeah, it makes sense. It's a narrative that makes sense.
And a lot of founders, when they become successful or when they're pitching media and journalists and going on podcasts, they want to tell a good story. And a good story starts from, "Hey, I experienced this for a long time. My parents had this problem, or I experienced this as a kid." If you're starting a Cloud computing company, "I used to store my stuff in a closet in a Cloud when I was a kid." If I'm starting a healthcare company, "One of my family members had a health problem." It makes sense to tell these stories and they're not irrelevant, but there's no proof that they are the reason for success for these founders.
So there is this whole narrative of, "Hey, you have to had experienced a problem yourself to be able to solve that." Now maybe that's helpful in some cases, in some consumer problems, but that's probably one reason that we see a lot of companies get started and funded in consumer problems of limited number of population, valet, five-minutes grocery delivery, a lot of items that are important, enough problems, good enough companies can be built.
But climate change is no one person's problem. Food is not one person's problem. Ag, water, a lot of industrials—there's a ton of massive problems out there, a lot more important than five-minute groceries that are not one specific person's problem, but it's a billion people's problem. And those are much bigger problems, much bigger opportunities.And no one person's personal problem, nobody. Now again, you can create narratives and say, "Hey, I always cared about nature, that's why I started a climate company."
But at the end of the day, a lot of successful founders aren’t mercenaries. They want to make something successful, they want to build a brand, they want to hire a lot of people, they want to become somebody, right? And that's one good reason that they start these companies and get to where they have and we shouldn't demonize, we shouldn't just say just because somebody was mercenary about this, that's a wrong reason to start a company. People have different reasons for starting companies. So again, the stereotype is that everybody should be visionary and solve their own personal problems.
There's a lot of these concepts that I go over in the book. Another example is when you look at competition. Now a lot of entrepreneurs when they pitch, when they try to position their companies, they want to put it in a way that, "Hey, there's nobody else competing with us. This is a blue ocean market. This is a problem that no one else has paid attention to, this is all ours." Actually, the data shows those are the less likely companies to succeed. A lot of the most successful billion-dollar companies that were ever created, they did have competition, they did have strong competition from day one. From when they started, they were competing against very powerful incumbents or some other fragmented market dynamics.
So having no competition is actually a very, very minority part of billion-dollar companies. Same thing for the market opportunity. A lot of entrepreneurs want to go and just say, "Hey, I want to tackle this thing that's very unique and come up with a market that's nonexistent." It turns out most very successful companies, and it makes sense, but that's not the way a lot of entrepreneurs would think about starting a company, they were started in markets that were already large. They were not supposed to become large in 10 years, they were already large. Today there is a $100 billion spend in this industry or a billion dollars worth of spend in this industry. Rather than something that, "Hey, I think in 10 years this market may grow at this percentage and today it's nonexistent. But in 10 years this would be the market."
Now there's a lot of very successful companies built in those environments as well. But when you look at the overall data, a very, very large number of very, very successful companies were built in markets that had a ton of competition, was an existing market opportunity, and they just did better by building a better product, executing better.
Again, Zoom is an example, when they came, video communications was a big market. There was a big spend, there were a ton of incumbent companies with products in the market. Some of them for free—Skype, Microsoft, some of them paid—Cisco. But they built a much better product, they executed a better sales strategy and marketing and they became the dominant player in the market. And that's the story of the majority of successful companies. Better execution, better product, some type of advantage that they had. And other—
What about timing? Sorry. Yeah, not to cut you off there, but when I think about Zoom. And you're right, I mean there was Skype, there was Cisco, I mean you could even do some of this stuff on Google Hangouts. But there were these other things. Why do you think Zoom was successful? Obviously, the product itself was easier to use, all that type of stuff and that must play a role. But what about timing? Because it seems like Zoom really took off at the beginning of COVID-19.
It did, but Zoom was already a big company before COVID. Zoom was already a billion-dollar company before that. Zoom already had a ton of customs and a much better product. So sure there's a ton of companies that get to become the very, very big successes because of a tailwind in the market, because of a timing thing. And I will get to that and I will talk about that.
But just regardless of the timing, just that better product, better sales, better distribution, better execution, a unique way that you are having distribution. Now a lot of second time entrepreneurs start from thinking about their distribution before thinking about their product, right? Before thinking about what I’m doing technically and think about how do I get this in the hands of a hundred million people or a thousand large companies?
Now, timing did play a large role in a lot of companies' success and that's undeniable. However, it's very hard to crack the code of timing. It's very easy to look back and say, "Hey, there's a ton of companies that became successful, like Uber, because smartphones and GPS became free." You can look back and say Snapchat became successful because of the front facing camera.
But in reality, very few of these founders had thought about this process beforehand. They just got lucky or adapted their company to what trend they saw and moved and changed based on reality. So a very good trait among these successful entrepreneurs is just listening to the market. Now have your vision, build the product that you think should be built, but be open to hearing the customers, be open to adapting your distribution, adapting the product, adapting the features based on the customers. But you should have a north star, you should have the final goal and ambition that I want to get to this point in 10 years and that's how I want to change the world. But along the way I have to listen to customers and see what trends are coming and what rising tides can raise my boat as well. That's one trait that you see among these entrepreneurs.
What about leadership styles?
Yeah, leadership style? That was not something that I had studied because it's very hard to quantify leadership style. So it was not one of the things that I studied. So yeah, unfortunately I don't have anything specific to offer in terms of leadership styles.
However, one thing that you see is many of these successful companies kept the founding CEO in the CEO job for a longer time than the others. Now part of this is because if a company's failing and investors become worried they may fire the CEO and there's some sort of a reverse causality here. But overall, when you look at the companies that kept the original founding CEO in the seat for longer, they on average created larger outcomes and on average they were more likely to become massive, larger companies.
Now again, as I said, there's a ton of reverse causality here. When things go wrong, the CEO gets fired. But that might be part of the trait where the original founder had it in them to create that company and lead it from zero to one and from one to 10 and from 10 to a 100, and more and more and more. So either they learned or naturally they were good. Mostly, probably they learned.
Yeah, it's interesting because you saw when the Walter Isaacson book came out about Steve Jobs, you started to see or hear about people trying to mimic his management style, which was very aggressive and things like that. And that just seems like an odd thing. You have to be like yourself if you're going to be a leader and start with who am I authentically and then how do I lead this company?
I agree, I agree. I think it's also probably one part of the media problem. And I'm not saying it's a problem that journalists create on purpose, it's just that's their job, to create content that would get distributed faster and more. So you tend to hear more about the more aggressive or more different, more unique types of leaders and characters.
But when you look at this on a day to day basis, when I look at the unicorn companies that I have backed and my peers have backed, the CEOs tend to be very decent, normal human beings with decent management styles. Some of these stories do make it to a TV series or whatever comes out and typically it is the cases where these people are different, more aggressive or there's something different about them and that there's nothing wrong with that. But in most cases, they are the minority and the majority of CEOs of these billion-dollar companies are decent, kind human beings with empathy that are leading the company in a normal way.
Why do you think the media and journalists, particularly tech or business journalists, focuses on fundraising? Fundraising announcements are a big deal and events like that rather than what your book is about?
Yeah. Well, the book took a lot of effort. It was seven years of data collection and one press release. So that's probably not something that a lot of companies or journalists can do. That's why they resort to something that becomes news. And that's part of the relationship between entrepreneurs, CEOs, and journalists. There needs to be something newsworthy to be able to get published. Very few journalists want to dig deeper and sometimes it happens, but some journalists want to create thought pieces. They put something in front of them, say, "Okay, this is a trend that I'm seeing. Let me go dig in and talk to five different entrepreneurs and write something about this thing." And there's a lot of very good journalists that do that.
But that's a part of the natural thing about media, about the internet, that things that become viral, the things that get read, get distributed, tend to have something sharp, something aggressive, something bold about them, something different. And things that are different are typically newsworthy and things that are newsworthy is delta function, it's a step function. "Hey, we had $1 million before, now we have 10. We didn't have any investors before. Now we have this tier one VC." So these are the newsworthy things that get the attention. Now obviously fundraising on its own, is not a good enough reason for the success of a company. It's never a good metric. The track is never a good reason to say this company is successful because they have raised this much money. But I definitely understand why they end up getting into the news and why entrepreneurs want to use that as a way to get into the news that will help them attract better employees or attract any employees to come and join their companies or customers. It just gives them a chain of credibility. They can use the brand of the VC firm to make their new startup more credible, or the other way around.
What is your background? I think your story is so fascinating. You have a fund in DCVC that has over $3 billion under management. How did you get here? How did all of this happen? It's incredible.
Oh, thank you. Well, like a lot of people venture that have come to this from a different type of background, same case for me. I am originally from Iran, so I grew up in Tehran. I studied electrical engineering back home. So I come from a technical engineering background. The first project company that I worked on was a stock trading application for that market, creating a fintech product, the very first mobile app for trading stocks in that market. Then I went to London, where I studied biomedical engineering. For a while I thought I'm going to be an academic. I was publishing papers, going to conferences, and doing journal papers. That was my path and I thought I might be on the path of becoming an academic.
But I ended up starting another company coming out of my research, ran that company for a number of years, grew that company. And eventually found my way to Silicon Valley because of the investors that we had, because of the advisors, customers, and employees that we had, found my way here.
And the way I ended up at venture, very interesting, is actually through Twitter and through writing. So I used to write a lot of my thoughts. The theme of my writing is, "Hey, let's collect a lot of data that other people have not collected in this way. Let's create some value and put a data-driven piece out there." To me, it's less of a, "Hey, I want to write about my own thoughts about something, my own intuition or gut feeling." You can certainly write about that but I feel like you create more value if you capture some data and then add your insights on top of it, some data that's referenceable that other people can rely on.
So mostly it's been trying to collect data in different pieces of the startup ecosystem. I collected some data on AI startups and in the healthcare industry back in the day or about the blockchain infrastructure space back in the day. That's how I ended up becoming a venture capitalist. And I've been lucky early in my career through this research that I was doing and I done, I came across a number of good company opportunities that I had a chance to back these amazing entrepreneurs in their very early stage rounds and join the boards of directors of these companies and see the hyper growth that went after this thing.
So as an example, I invested and I'm on the board of directors of this company called Carbon Health, which is a large healthcare services, services plus tech company in the US with 100+ clinics, many, many tens and hundreds of millions of dollars in revenues, about 5,000 employees now. And when I joined that company, when I invested in that company and joined the board, it was a very small company of 40, 50 employees. So I saw the hyper growth that this company had and that was my opportunity to learn from the startups that I had the chance to back. Same case with a number of other companies that are now unicorns, large companies. StarkWare is a crypto infrastructure company that I backed back in 2018 in series A.
Now that company is worth $8 billion, many, many employees, large amounts of revenues. Axelar is another crypto unicorn company in the interoperability space. I've backed a number of other companies from cybersecurity to insurance to material to food. One theme of what we do at this venture fund, Data Collective, DCVC—it actually doesn't stand for DC, the Washington DC. It stands for Data Collective. We invest in companies that use a ton of data and use deep tech and engineering, so hard engineering, complex science, and they have some sort of a data advantage to create durable companies. So companies that are creating something that's very tough that in turn creates valuable data and then they can use that data insights to create a better product, to create a network effect based on the data that they generate.
One example of a company that resembles the thesis is a company called Planet Labs that we invested in the early rounds. And what they do, they have 200+ satellites orbiting the earth, taking images realtime of the ground of the earth, and the data is terabytes of data per second. So they apply a lot of machine learning, a lot of machine vision on that data, getting the insights, and then they use the insights for different products in agriculture to insurance, to monitoring hedge funds. And they sell these types of data sets. So that's one example of a company that's very much in the thesis for us at DCVC. Very hard thing to build satellites, but in turn it creates a lot of valuable data for you.
So we've done this loop in a number of companies that are doing drug discovery, therapeutics, pharmaceuticals, new materials, new food, agriculture, robotics, all the way to cement production, aerospace, rocket launchers, satellites, and things like that.
In your opinion, what makes a great VC?
Well, luck. Probably in the first place. A lot of us are lucky and privileged to be in this position. Generally, I think being a VC is a very, very privileged position. A lot of us don't deserve to be in this place. Essentially a lot of VCs overall are deciding where the money and funding goes for the future of technology. I think it's a very, very high responsibility for this very small group of people. Probably it's a couple hundred people who hold and decide the majority of the capital into the tech ecosystem, where that money goes to. And I think it's a very high responsibility and very few humans should be in that place to be able to decide that, "Hey, we don't want anybody working on cancer drugs. We think you should work on social media networks," or whatever. It's a constant thought process of what you want to back and where you think the future is going.
But overall, you're very privileged that a lot of these very, very great entrepreneurs spend many years trying to come up with an insight, create a company, put a team together, and then put together all their thoughts and the best pieces of information they've found and come and present that in a half an hour and you learn everything that they've tried to do in the last couple years. So I'm very lucky to be in this position to be on the receiving end of that, learn from that. On the other end, I think that great VCs, what we have is time, what we have is a brand, what we have is a network.
So I think the best VCs, they intentionally network on behalf of their founders, on behalf of their companies. So it's my job to go and have a relationship with a ton of great CFOs, a ton of great independent board members, a lot of investors for future rounds, a lot of great talented employees and executives, a lot of customers, a lot of corp devs people who can acquire these companies, a lot of bankers who can help put these companies in public markets.
So the best VCs, I think they're very resourceful. They use their time and the ability that they can network not for one company, but because they have a portfolio of 20 companies that they can help, they go out and find these networks or through their carrier they have created and found the best people and just bring and present these people to their companies at the right time. I think that's the biggest help that VCs can give.
Absent of that, I mean there's a lot of VCs who help with product strategy, with helping the company get to where it is. I think in some cases that could be helpful. But I have a little bit of a contradictory opinion here, just not that this is not the job of a venture capitalist, but most times I think it might be distracting. So what the VC's doing is distracting to the entrepreneur. The entrepreneur has been doing this day in and out for years. And I think if a venture capitalist can go in and in a two-hour board meeting come up with a new insight or way that a company should be doing something that the founder has not thought about, either they're a genius, which on rare cases happen, or the entrepreneur just wants to be courteous to their investors and say, "Okay, that was a great idea" and get distracted for a couple months. Or it was not the right founder for that company.
But in a lot of these cases, I don't feel like investors who were trying to help by working on product strategy or technical strategy or things like that, that might be the best use of time or resources for the entrepreneur for the company. I think most of that is what the entrepreneur cannot do, which is they don't have the time to go and network a lot, they don't have the time to go and find all the relevant people and you are sitting in a position that can do that. So I think the best VCs are great networkers and brand builders and bring that to their entrepreneurs.
Given the current economic environment, what are you advising your portfolio companies or companies who are coming to you looking for funding in how to navigate these waters today? Today, the day we're recording this, Zuckerberg just laid off I believe 11,000 people. And you're seeing every major company doing something like this, particularly in tech. What advice do you have? What are you telling people and what are you seeing?
Yeah, I mean, first of all it's very unfortunate to see these layoffs that are happening. I assume a lot more is on the way. Very, very sorry, and sympathetic to people who have lost their jobs. Hopefully there's still a lot of money and startups out there that are hiring. So hopefully, these people will land on their feet and are able to find good jobs after this. I think for startups specifically, it's more of a focus on—and I think this applies at all times—but in these economic times even more, focus on what pays, focus on the customers, focus on specific things. Rather than get distracted by a ton of things, strategy meetings or brand making or sponsorships or a lot of the other things that in good times they have some sort of an ROI. But you need to get to revenue faster, you need to have customers that are paying. So mainly focus on getting revenue and increasing revenue, I think that would be very helpful.
So again, if you are able to keep your growth and get to revenue faster, even in this economic environment, I think that would still attract the VCs. The money would still come and flow even in these environments if you have a focus on bringing in money. So it's more than ever the need to put 100% of your effort as the CEO to have your eye on the customers, try to understand why is it taking so long to go from a first conversation to having the first billable hour or service or contract, whatever, dollar in the account. What can I do to reduce that from seven months down to two months? What can I do to increase my top of funnel? What can I do to increase the retention of the customers that I have? So 100%, maniac focus on customers' dollars and revenues rather than anything else, basically. Obviously, the job of the CEO is to keep the company afloat, to have enough money for the company. But again, I think every entrepreneur knows that advice. So I can give the advice again that make sure you have enough money in the bank. But I think every rational entrepreneur, if they can get money, they will bring it. If they can get money from a good source, they will have the company capitalized, so everybody does that.
What about the decision to go public or remain private?
I think that's very specific to each company and what stage they are at. Unfortunately, this movement with these packs muddied the waters and there's a lot of public companies out there that are really struggling. It's very bad for employee morale when a company's public and their stock has fallen 95%, just it's very bad, it's very hard on employees. And as a CEO, as the board you understand this is the market, this is what we are dealing with, and the previous valuation was not justified either way. But it's harder to expect employees to internalize that, to manifest that. So you are going to have a lot of problems with employees leaving for opportunities. For the ones that are staying that are like, "Okay, this bad market, I'm not going to find a job either way, let me struggle here rather than somewhere else." So you are seeing a lot of ineffective employment that happens. So it creates an inefficient marketplace of jobs and people who are working at companies that they don't like and have low employee morale and they just want to go somewhere else, but they cannot.
So I think in these situations, if you are able to stay private and just try to raise more money and whatever best valuation that you can have to keep the company afloat, that's probably the best way to do it. And it's not the time to be that selective. If you can raise some money from a source of capital to keep the company alive for longer, you should do that and you should think about keeping those employees for a longer time. And with some cost cutting, again focus on revenue first, revenue faster. A lot of these companies that were not on any path to become profitable can be turned profitable, not immediately, but they could have a plan to edge towards profitability in 12 to 18 months.
Who is a company or entrepreneur that you've invested in that just blew you away?
That's a great question. I think many of the entrepreneurs, many of the successful entrepreneurs, obviously, that I backed and had a chance to be with these companies similarly blew me away. I would say Carbon Health. The founder, CEO of this company, Eren Bali. Carbon Health is very heavy execution. It's a big operation. Many, many thousands of employees, hundreds of clinics, millions of patients. It's a big, massive, national scale operation. And sure a large company like Kaiser or United Health or the large companies can do that because they've been around for decades and they have grown slowly getting there. But when you see a company go from 40 employees to 5,000, to go from a hundred patients to a million over two years, that level of growth and all the growing problems that comes with that fast growth, where you see the entrepreneur can handle that, can bring the right people around himself or herself to handle the pressure, handle the execution. I think that was phenomenal.
Obviously it had some mistakes and a lot of things went wrong. But overall we executed. We were able to grow the company in the face of COVID, in the face of increasing attention to digital health and telemedicine and the requirements for COVID testing and vaccines. Just the company blew up and became a massive operation overnight. So I think that's one experience that I saw how a great entrepreneur, and I have to give credit to the COO of Carbon as well, Will Abbott, who's been a very big reason for why the company was able to execute so phenomenally and operate in this great scale that they are here today.
As we look at heading into 2023, what do you think the macro environment looks like? I think they're saying we're not technically in a recession, it seems like we are in a recession. I think everyone's predicting the reason why a lot of these companies are doing layoffs is we will definitely be in a recession next year. How are you thinking about it, looking at it? Just the macro economic outlook of things?
Yeah, I guess like the stock markets, sometimes things get priced in earlier. So yeah, technically we may not be in a recession, but you're already paying the price and things are priced in to some extent at least. Obviously there's a lot more blowing up, there's a lot more failures, there's a lot more layoffs, unfortunately, that's still left within the tech ecosystem and it could be a longer, more painful process, unfortunately. But these things overall, in the macro, are healthy. We require these cycles for healthy growth of the economy and for healthy jobs market that things go up and down, up and down. Now it was a very, very long cycle. But I think from what you're seeing is yes, for sure things are going down, things are going to be harder next year, maybe even for a longer time.
But the hope is eventually you still believe technology is solving a lot of problems. Technology is a large economy and startups have learned the ropes. And it's turned from being an art into a science that you can create a startup, execute on a product, and create a large company. It's a system that's been trained now. Thousands of people have turned one-person companies to hundreds of person companies in a fast span of time creating fascinating products that their users love. And we have a playbook for that now. So I think overall the future is very bright. Technology will solve a lot of problems.
Startups will be able to execute and create products that the customers would love. The problem is, is there enough financing for that? Revenues may dip for some time or for a longer time. But eventually I think it's a very bright future for startups, tech startups, and tech ecosystem.
What's the best piece of advice you've received or heard given to a leader who's either at the beginning of building a company or leading these thousand-person teams? What's a really great piece of advice for a leader?
I would really focus on the people aspect. I would say two different things. So one, everybody talks about people and the importance of people. But eventually it's your calendar that shows how much attention that you're putting onto that. If you're spending half of your time on recruiting and in talking with your talent, making sure everything is aligned, then that's where you're putting 50% of your attention and focus. And that is the most important thing to you. But if you look at most leaders' calendars, it's probably less than a single digit percentage of their time goes towards recruiting, towards finding people, and towards nurturing their talent that has recently joined and put them to be aligned. A larger part of that is execution, operation, day to day, financing, legal.
So the more time you spend fighting fires and the less time you spend on creating people that are capable on their own to solve problems, then the problem will become worse. You'll have more fires to fight, you'll have more operational issues to fight or you're going to have more legal meetings to go to. But if you intentionally try to put that time towards finding the best people, giving them autonomy, giving them alignment and letting them be your person in those rooms, you can be in a position that you can spend 50% of your time for future roles that open up, for future direct recruits or leaders in your company that you want to bring. But if you don't do that early on, you will have this operational mess that you have to spend 120, 150% of your time on just solving the daily fires that come up.
So spend as much time as you can early on, on bringing the right talent, nurturing them, and most importantly, give them accountability, but also give them the responsibility and role. "This area is yours. I expect you to handle that. You can make any decision that you want if you think that's right, but I will expect the right outcome from you eventually." So that's probably the right way to look at it as a CEO.
And the second piece of this is just be truthful yourself. There's a lot of hype and there's a lot of people who would say, "Yes, sir'' and "Yes, ma'am" and listen to you, but you have to be honest with yourself. At every decision that you make, at every data point that you see, be very, very honest with yourself and allow that vulnerability to show so people are able to come to you and say, "Hey boss, I think things are going down. I think we have a big, big problem. Me and you are going to lose our job if you don't fix this problem after three years."
So if you create an environment where your people can come to you and be that vulnerable and say that and you are vulnerable with them, I think that creates the sense that you can have people who can solve your problems because they're accountable, but they have the resources to go and make decisions as they see fit.
Ali, thank you so much for spending time with us here. I could talk to you for hours about this, maybe we'll have you on again in the future. I highly recommend everyone read your book. Thank you so much for taking the time. I think a lot of what you said is super valuable.
Of course. No, thank you so much for the fantastic questions and for having me. I hope the people who were listening enjoyed the conversation.