
Interview with Sam Altman from the High Growth Handbook - eladgil
https://blog.ycombinator.com/interview-with-sam-altman-from-the-high-growth-handbook/
======
Endama

      For example, I do think figuring out compensation
      structures is really important and something the 
      CEO should spend time on. And it’s something that 
      most CEOs don’t.
    

This. I've been a part of three startups and in all three, the CEO didn't take
compensation seriously. In today's economy, you can't sit on your hands and
assume that 3-5% annual pay raises and the promise of future stock payouts
will keep talent in-house, year over year, when the big guys are pushing the
pay bar higher and higher.

For example, in my last job, 3 years of startup caused my annual pay as an iOS
dev in the Bay to drop ~30k below the average for someone of my tenure. I
loved the company, but I couldn't justify the loss in income, especially with
housing prices being what they are. CEOs should consider compensation as
critical to their company health.

~~~
sonnyblarney
Pay raises that rise faster than inflation are unsustainable, rather, you're
pointing at a specific asymmetry between the BigCos and startups in the Bay,
which is definitely causing strain.

Outside the Valley and specific centres, this isn't quite so much an issue.

Inside, it's an intractable problem ...

Though your point might be valid from the Dev's perspective, consider the
other side for a moment and you see how tough it is - i.e. to have the
expectations of ever increasing normalized outflows.

So we need to look at this kind of objectively (i.e. not from just Exec/Dev
perspective) to figure out how to deal with the situation.

~~~
nradov
Pay raises that rise faster than inflation are sustainable as long as revenue
— or at least expectations of future revenue — are also rising at a similar
rate. It's not at all an intractable problem. If that situation doesn't exist
then you're not managing a _start-up_ , you have something else such as a
value business, small business, or lifestyle business.

But at the same time if you're just building iOS apps then it would seem
foolish to locate the majority of the engineering team in Silicon Valley.
There are plenty of talented iOS developers all over the world now in lower
cost areas.

~~~
sonnyblarney
It's definitely an 'intractable problem'.

A) The issue is specifically pay rates at 'BigCos' are rising quickly, making
it harder and harder for startups to keep up. This is 'intractable' to the
point where many simply stay away from the Valley, which was less the case
before.

B) Companies with lofty margin increases over time are _extremely rare_ and
such inside wage inflation is totally unsustainable over any period - forget
business cycles. Only at a rising Google, or the very rare lucky startup
growing the customers is this not a problem. Very, very rare. And it creates
the 'A' problem above for other companies.

~~~
nradov
I don't see anything intractable. There is abundant investment funding
available to pay employee compensation at start-ups with the potential to
scale up with increasing profit margins. That just means founders will have to
recalibrate their expectations on early stage valuation.

On the other hand, for businesses without the potential for high margins it
never made sense to locate in high cost areas. There are plenty of other
suitable areas. For example Cleveland would be an excellent location for a
health IT business. The tech industry as a whole would be healthier with more
geographic diversity.

~~~
sonnyblarney
"There is abundant investment funding available to pay employee compensation
at start-ups with the potential to scale up with increasing profit margins."

No, there is not an abundance of capital floating around to just pay
developers ever increasing (above inflation) salaries commensurate with the
massive profitability of other major companies in their immediate vicinity.

To the point wherein even Peter Thiel wants to opt for LA, with his statement:
"I'm spending all of my money on Silicon Valley landlords"

------
a_d
I consider sama to be an extraordinary investor and thinker (I know this is
the most consensus thing one could say on HN). The personal bets on Boom,
Helion Energy, Cruise and many others are really phenomenal (even the _re-_
bet on Reddit) -- not just for being early/contrarian for their time, but also
necessary for the world for these companies to succeed.

The highlights of this interview imo are the following pieces of advice:

1) get a coach sooner than later

2) always keep revisiting what is urgent vs important and keep prioritizing;
if in 'war-mode' then users, team, revenue above all else; ignore things that
don't amount to much (potential candidates: investor updates, press,
conferences etc -- they are not more valuable than users)

3) don't get too far away from the product (some things cannot be delegated
early on)

4) "boards hate surprises...and boards hate feeling like you’re trying to hide
bad news". Be open. Ask for help.

Really great points.

I feel that the point about the role of the CEO in a downturn is under-
explored in this interview (felt rushed). This is rich territory (and
relevant). The discussion about specific examples of things that don't merit
CEO time veers into 'made-up territory' quickly and doesn't feel relevant --
e.g. some "[CEOs] then stop going to the executive team meeting (that’s a very
bad idea)" \-- I don't see as many companies as these two, but no CEO stops
going to an executive team meeting (infact, bad CEOs go to too many of those!
as they enjoy 'playing CEO' :)). If a CEO stops going to an executive team
meeting, that is quite counter-intuitive and interesting in many respects in
of itself (e.g. there is a fire; CEO doesn't want to be CEO etc) :-) I feel
Elad should have pressed more as an interviewer rather than rushing to the
next point.

Overall, always good to hear sama's views -- he is an incredibly important
investor of our age (my prediction). And Elad thanks for working on this book.
For a few $$ everyone can get this wisdom -- you did a great service for
entrepreneurs. Congrats on the launch.

~~~
deltadeltadelta
> I consider sama to be an extraordinary investor and thinker (I know this is
> the most consensus thing one could say on HN).

Yeah I'm gonna disagree with you there. These are some of the things he's said
over the years

"I realized I felt more comfortable discussing controversial ideas in Beijing
than in San Francisco"

"This is uncomfortable, but it’s possible we have to allow people to say
disparaging things about gay people if we want them to be able to say novel
things about physics."

[http://blog.samaltman.com/e-pur-si-muove](http://blog.samaltman.com/e-pur-si-
muove)

"US growth has stagnated while Chinese growth has continued to do pretty well.
The US has become less competitive globally"

"The current business model of the US requires the dollar to be the world
reserve currency, though the Chinese currency is rapidly becoming a viable
alternative"

"The other stark contrast is how much harder people in China seem to work than
people here, and how working hard is considered a good thing, not a bad
thing."

[https://blog.samaltman.com/china](https://blog.samaltman.com/china)

~~~
tlb
It's not self-evident that any of those things are wrong. Could you explain
what you believe instead, and why? Perhaps in a blog post so as not to pollute
this discussion.

~~~
njoro
It isn't particularly reasonable, one might even say dismissive, to suggest
that someone explains themselves, off site no less, when you aren't adding
much to the discussion yourself. Plenty of people have already written about
these comments. Most widely after Mike Mortiz made similar ones in the
Financial Times.

[https://venturebeat.com/2018/02/11/what-sequoias-mike-
moritz...](https://venturebeat.com/2018/02/11/what-sequoias-mike-moritz-
doesnt-understand-about-startups-in-china/)
[https://techcrunch.com/2018/01/19/moritz-sabotages-
sequoia-a...](https://techcrunch.com/2018/01/19/moritz-sabotages-sequoia-
again/)
[https://twitter.com/dhh/status/954319522151976960](https://twitter.com/dhh/status/954319522151976960)
[https://gizmodo.com/sam-altman-is-an-
idiot-1821327260](https://gizmodo.com/sam-altman-is-an-idiot-1821327260)
[https://www.bloomberg.com/view/articles/2017-12-15/appraisal...](https://www.bloomberg.com/view/articles/2017-12-15/appraisal-
rights-and-tech-fears)

------
ta1234567890
Sam Altman has definitely done great as the head of YC, but how many high
growth startups has he successfully started, run, grown and sold?

Can we please get advice from people who're actually currently doing that
instead?

------
barbegal
What does "High Growth" mean? Based on the kindle preview this is a book
containing startup advice which includes how to scale up your business in
terms of hiring and acquisitions but not in terms of growing revenue and
profits.

In a way this advice optimises large portions of Silicon Valley where large
companies in terms of employees and venture capital funding produce very
little profit. A case in point being Stripe itself. Stripe employees can't
tell you how to grow into a profitable company because they haven't achieved
that yet. But they can tell you how to grow your HR department and how to
acquire other companies because Stripe has done that.

~~~
tlb
Companies like Stripe can become profitable in a simple way: by cutting R&D.
And they'd stay profitable for a while, before fading into obsolescence.

For most tech companies, the right long-term strategy is to spend heavily on
R&D and growth, using up all profits and some investor money to do so.

The exception is established companies in a declining industry, where the
right answer is to cut R&D and growth to nothing and try to extract as much
profit as possible in the remaining years.

------
crsv
The relevance of some of this advice seems like it best serves an VC track
company dealing with SV ecosystem pros and cons - especially commentary around
investor behavior and availability.

Some of the points around distractions, planning, and tactics do apply outside
the bay, but in general the term "High Growth" feels like "early high
valuation large cash infused startup", which while interesting, isn't terribly
relevant to an extremely large portion of the entrepreneurial ecosystem.

Given that - does anyone have any recommendations for reading in this space
that are a bit less "valley flavored"?

~~~
eladgil
Thanks for the feedback and for taking a look.

Outside of financing and M&A, most of the topics in the book are core to most
fast growing companies - Silicon Valley or not. They key is whether the
company needs to grow rapidly, or is a rapidly growing division of a company.
"Grow rapidly" means "scaling revenue (and if the right time for the company,
profits), and growing headcount and organizational complexity". If it is a 12
person org that is not going to grow, only a smaller subset of topics apply.

Key topics include things like hiring and managing an executive team, your
role as CEO, organizational topics (re-orgs, choosing what executive owns what
etc.), marketing and PR, product management, managing your board, building a
recruiting pipeline and recruiting organization. Many of these are reasonably
universal topics. To your point, what I know best is silicon valley technology
companies, and the book reflects that experience (versus that of an industrial
company).

Thanks again for taking a look!

------
mattferderer
Any chance this turns into an Audio book?

I'm sure there are plenty of others who find it hard to find time to sit down
& read a book. When I do, I tend to read the kind that don't work as audio
books or just aren't available.

Also, there is something nice about being outside & walking while listening to
a book.

~~~
eladgil
We submitted the audio file yesterday, so hopefully it goes live within a week
or so

~~~
benirving
anyway to get a physical copy of this book in the UK?

~~~
eladgil
Working on it! Unfortunately it will likely take a few weeks.

~~~
benirving
Okay, thanks for your response. Is there a way I can subscribe to an update
about it? Really want to purchase the hardcopy

------
liquid153
I love generic advice :)

------
saxelsen
Is there any chance this book will become available on Amazon.co.uk? It's cost
about double the price for Europeans to buy it from Amazon.com due to high
shipping costs and import taxes and fees.

~~~
rahimnathwani
The Kindle edition is available on .co.uk for 11.21 GBP including tax:

[https://www.amazon.co.uk/High-Growth-Handbook-Elad-Gil-
ebook...](https://www.amazon.co.uk/High-Growth-Handbook-Elad-Gil-
ebook/dp/B07DRPGGQ7/)

------
robax
Any chance this will get back in stock on Amazon? I don't feel like signing up
with Kobo but I would purchase this book. Also a softcover version would be
awesome!

~~~
eladgil
Sorry for the issue - Stripe's printer is shipping books to Amazon ongoing.

You can still order via Amazon - as of now it will just take a few extra days
to ship. So not a huge delay if you are willing to wait.

------
danvoell
Congrats on the book launch Elad! What in your eyes is the most insightful
part of the book for understanding High Growth?

~~~
eladgil
Thanks a ton!

I think two sections might be most generically interesting or useful:

1\. The interviews. There are 14 interviews with Sam Altman, Marc Andreessen,
Patrick Collison, Joelle Emerson, Erin Fors, Reid Hoffman, Claire Hughes
Johnson, Aaron Levie, Mariam Naficy, Keith Rabois, Naval Ravikant, Ruchi
Sanghvi, Shannon Stubo Brayton, Hemant Taneja.

In some cases, their advice is at odds with my own. So I think the richness of
perspectives and experiences are valuable.

2\. The sections on executives, recruiting, people, onboarding, re-orgs, etc.

Startups are a team sport, and getting the right team together and helping
them be effective is really the key (assuming you already have product/market
fit).

A big part of that is also the role of the CEO, and the CEO managing their own
psychology, not burning out, etc.

~~~
quizbiz
Are you willing to share snippets on HN?

~~~
eladgil
Sure! I will drop some in the next week. Focused on launch today. Any
priorities?

~~~
IMAYousaf
Hello Elad. Thank you very much for being so open to sharing. Do you have any
snippets or content about traction? To me, that seems to be the most difficult
part about team-building and startups in general. I have a lot of brilliant
friends with whom I have an easy time bouncing ideas around with. Every couple
months, an idea will be fleshed out enough to justify starting to work on it,
but it's the groundwork that translates to long term growth that I have the
most difficulty with, assuming that the problem is worth solving, the product
is "good", and the product-market fit is there. Of the people you interviewed,
did someone provide any insight into that?

~~~
eladgil
Unfortunately my book focuses on the stages right after that - i.e. you have
traction and need to scale.

There are some good things written on this topic that you have probably seen -
e.g. Paul Graham has some great posts on this as do Sam Altman, Michael Seibel
and Aaron Harris.

On the non-YC side Peter Thiel's Zero to One, Marc Andreessen's archives (on
the A16Z site) and Chris Dixon's pre-crypto writings are all great on this
topic too....

~~~
IMAYousaf
Hello Elad. I appreciate the response. I'll be checking out your book
regardless. Thanks.

