Databricks’ Ali Ghodsi Never Wanted to Be CEO. Now He’s Among the Best

Cold open

Brian Halligan: And is that Monday morning meeting really useful, or is it theater? Can you just have a Google doc and get it done that way?

Ali Ghodsi: We're talking about humans. Why should I like you or trust you if I never get to meet you? I don't know if you're married. Why do you have to meet your wife at all? And your kids? Can't you just have a Google doc? We just write down the stuff you want. If there's something you want to teach your kids, put it in the goddamn Google doc. Maybe you don't even need to respond to the Google doc. Claude can.

Introduction

Brian Halligan: Hey everybody. Today we have Ali Ghodsi on the podcast. He's the founder and CEO of Databricks. I've wanted to have him on for a while now. I had Ben Horowitz from a16z on a few months ago, and I asked him, who is the best CEO out there? And without thinking much about it, he said, Ali. And after interviewing him, I kind of agree. He's really sharp. A younger me would have loved to have worked for him and learned from him. Hope you like it. I'll be back at the end with my takeaways from the interview.

Main Conversation

Brian Halligan: Ali, welcome to Long Strange Trip.

Ali Ghodsi: Thanks so much. Excited to be here.

Brian Halligan: You had an interesting road to the CEO chair at your company. From what I understand, there were seven co-founders at Databricks, and a few years in, it wasn't exactly ripping. The board decided it wanted to make a CEO change. Can you take us into the room when those conversations were happening? And I assume they interviewed you — what happened?

Ali Ghodsi: Yeah, I don't know. I was hearing from the grapevine that they were interviewing other CEOs. And I would hear how they interviewed that guy and they interviewed this guy. So as far as I knew, I was like, they're not going to even pick me. I knew the identity of at least two people.

I mean, 2015 was kind of a turbulent year for Databricks, because we were having great success with our open source project, Apache Spark. We were just not having commercial success. US GAAP revenue came in at like $1.5 million that year. So the vibe wasn't great. And I'm like a glass-half-empty guy. So I was like, oh, I'm probably going to leave and we're all probably going to leave. So I actually applied for a faculty job at Berkeley, and I was going to take that, actually, kind of towards the end. And I was facing the dilemma: which one should I pick? Should I become CEO, which I never wanted to be? Or should I go back to my dream of being a professor, which is what I always wanted to do?

Brian Halligan: Fascinating. Did they interview you?

Ali Ghodsi: No. Not like, hey, this is a CEO interview, what's your strategy? Not really. Maybe they had some one-on-ones with me where I thought, okay, are they kind of feeling me out or something? But all this was very hush-hush. I was not allowed to know that there was a process going on.

Brian Halligan: The interesting thing about them picking you: my sense of the problem the board had with the company is that it had very little commercial success. You would have thought they would have hired someone with a lot of commercial background. You had negative amounts of that. What do you think was going on there?

Ali Ghodsi: I think it's a16z and Ben. In this period — and they're still that way — they were religious about founders only, because they had themselves been through it. Remember, Ben famously was asked at some point, hey, when are you going to bring a real CEO into your company? And he felt like shit. He wrote about it in his book, right? So I think he didn't want to do that to us founders. I think he really believed, let's pick someone that is a founder.

He later said, hey, this was anyway just a trial. We didn't even give you a CEO salary. So we were really testing you out. From his point of view — I don't know, you should ask him — it was probably like, hey, we'll try it out for six months, twelve months. If we're going to do a search, we'll put another guy in place in six months or so. And what do I know? Maybe the search that we were doing didn't turn out very great. Maybe they hadn't seen any very good candidates.

Brian Halligan: How do you think your life would have turned out if you had left and gone back to be a professor? Do you ever think about that?

Ali Ghodsi: Yeah. Well, right now academia is not doing super well, so it would have probably been a big mistake. But I also introspected a lot during that period. Which one should I pick? My dream is professor. The CEO thing — I'm not even sure I want to do it. In the business world, I don't have that much respect for it, even. It's kind of like going to the dark side. But then I looked over my life and the decisions I had made up until that point, and I kind of realized a pattern.

When I was a kid, I grew up programming. I wanted to be a game programmer. My dream was to move to LA from Sweden and work for Electronic Arts, because they were making the best games. And in high school, someone I knew floated, hey, you can come to the US, you can get paid — I think it was $80K — as an NBA game programmer. So I was like, this is it. This is my dream. At that point, my parents were like, no, no, no, you're going to university. No way. And I thought this was the end of life, like they're destroying my — but then I went to university and it turned out I learned a lot of things.

I learned a lot about computer science. I thought I knew everything about computer science, but then at the university — I didn't know anything. I knew a little bit of programming.

And then in the year 2000 I was doing an internship at a startup. I did really well, and they offered me to be number two guy. They're like, drop out of school, be number two. The startup was called Room33. It was, I think, Europe's largest mobile startup at the time. So it was like, wow, this is the opportunity of my life. But at that time I went back to university. And then the IT bubble burst, and it turned out to be not the best decision of my life.

Then that very university, which was kind of in a city far away, offered me a professorship even without a PhD. And I was like, oh — do I take the professorship now and be a full professor? Or do I go do a PhD at the top university, which is very difficult to get into, and challenge myself?

And I picked the challenging option. And again, it opened my horizons. It was way harder. It was much more difficult for me. But I learned so much, and it challenged me. And eventually I became a professor at that university.

So then I had the opportunity to come to Berkeley at some point. And at Berkeley they wouldn't take me as a professor. They would only take me as a measly postdoc. So what happened is I took the chance, I went to Berkeley, I took the postdoc, and then again it widened my horizon.

So I was facing this decision, and I was like, I should probably take the thing that challenges me. I know nothing about being CEO. I know nothing about business. Probably the most challenging thing I can do is take the CEO job. Going back to Berkeley — I know how the game works, I know academia. And I think that was the right thing. Now it's become a philosophy of mine: I want to challenge myself as much as possible, because how many years do we have on this planet?

Brian Halligan: Love that. You were obviously successful at some point. Did the board come back to you and say, it's not interim anymore, it's full time?

I'll give you the background on why I'm asking. I'm a ginormous Boston Red Sox fan, and the Red Sox were terrible at the beginning of the season. They fired their manager and brought in the interim manager, Chad Tracy, who broke a 125-year record of wins in a row. He's just done a fantastic job, but he's still got the darn interim title. And it's like, when are they going to drop the title? Did they have a conversation with you, and what precipitated it after that six-month, one-year trial?

Ali Ghodsi: It was about one year in. One of the one-on-ones I had with Ben — first of all, they gave me a much bigger equity package. And they bumped my salary. And we talked about the things that we strategically needed to do. So it started to become clear: okay, this is not just a practice run, this is not temporary, they have a little bit longer-term perspective. But they never said it officially.

Then a couple of months after that, I invited Ben to our company all-hands, where he kind of said, yeah, we didn't think he was going to do it either. We gave him like a temporary salary.

Brian Halligan: And I had Ben on the pod and I asked him, who is the best CEO in Silicon Valley, not in the Andreessen portfolio? And he didn't hesitate. He said, you. Which I thought was quite a nice compliment.

What can other first-time CEOs learn from you? You got stuck in the chair. You didn't know anything about it. What can you teach first-time CEOs that led you to where you are today?

Ali Ghodsi: Well, I think you have to be on this extreme learning curve. It's not going to be easy. You're going to be working 100-hour weeks. That's what I was doing. I was making sure that I was networking with all the best and learning from everyone that I could find, and reading all the books, doing all these kinds of things.

But I was applying first-principles thinking to everything I was sucking in. I was making sure that it actually made sense to do these things. I wasn't just like, okay, let's copy this, let's copy that, oh, that person said this, I'm going to do it that way. I was building my own — kind of like Bruce Lee built his own Jeet Kune Do based on all the different martial arts — I was building my own CEO playbook based on all the ingredients I was learning from the different places. And that way it was self-consistent. That's one thing I would recommend.

The second thing, which has been with me this whole time: I think typically companies are failing because of one major problem. Maybe they have two major problems, or three, but usually it's one giant bottleneck. And I think you should identify what that giant bottleneck is, and then focus the whole company and all your attention almost to an extreme — like orders of magnitude of attention and focus should just go to this one issue.

And if you overdo it and you go too extreme, overboard, on that one issue, that's great. The problem is you most likely won't be able to actually unclog or remove this bottleneck. So you should just turn all your attention to that.

So for me, at that time, it was: open source project, check, super successful. Tech, super awesome. No commercial success. So put all the attention on figuring out, how do we get this commercial engine humming? That was laser attention. I was getting the whole company mobilized. I was talking about it at every all-hands. I was thinking only about this one issue.

I think that's a useful way of operating a company. I still operate the company that way. I try to identify what the main bottleneck is at the time, and I try to just focus on unclogging that. Because there's so much other stuff you have to do every day. Hire people. There's drama. People are quitting. The board, this and that. Legal department. Customers. Revenue. Missing this. There's a million things coming your way every day. You don't have the time to move the needle on anything. So focus on that main bottleneck.

Brian Halligan: So you're laser-focused on the bottleneck. What is the cycle on that? Is there one bottleneck a year you're tackling, or one every three years, or one every three months?

Ali Ghodsi: It's a longer cycle. If the answer to that were months or a week, then that's what everybody is doing every day anyway. All the CEOs are doing that, because disaster lands in your knees, you have to drop everything else, you've got to fix that thing. That is not a strategic focus. That's just tactical stuff.

So I would say a year, two years, sometimes three. Creating the lakehouse category took, I think, multiple years. When we announced the lakehouse category, we were ridiculed online. But it was a long journey to get to the launch of the lakehouse, because there was so much resistance internally and from consultants and whatnot. Then when we finally launched it, people were laughing at us.

So you've got to give things a few years. You can't just give up immediately. It's really important that you identify that focus really clearly — because if you pick the wrong thing and you're focusing on it for two or three years, needless to say, you're not going to go anywhere.

Brian Halligan: Super helpful. What I read was that one of the first things you did on that bottleneck was go out and hire — I forget — 13 been-there-done-that enterprise sales reps at first. Is that correct? And second, how did you even know how to interview them? How did you know who was good? So many of the CEOs I'm working with are going through this process. How did you do that?

Ali Ghodsi: Actually, the first thing I did was more or less revamp the whole executive staff. A year, year and a half later, the executive staff running the company was completely different from the one I inherited. That's the one thing I knew: we've got to change that up, because it's not working.

Engineering and product I handed off to a co-founder, and I basically ignored it for two years. I focused my attention on building up the rest of the muscle of the company.

We had been doing this PLG thing — product-led growth. We loved AWS, people swipe a credit card, we didn't want to have any salespeople. That was codified into the ethos and culture of the company: we don't want sales. We had hired sales engineers, and they were actually the sales department. We had a couple of those. But it became clear that PLG is not working.

Actually, in 2015, before I became CEO, for a little while we ran an experiment called Zero Touch, which was: we shouldn't even ever talk to a customer, it should all be an automated funnel, because PLG. And you could see that before that, revenue was going up — and it just flatlined for two quarters when we started doing that.

So at $1.5 million revenue, and you know that AEs have a quota of like $1 million or $2 million in most companies — gosh, if we just get one AE and that guy or that gal crushes it, that would be the whole thing that we've done for the last few years. So all the other options make no sense. We should just double down on hiring salespeople. Okay, but what kind of salespeople should we hire?

Brian Halligan: Yes. And how did you know what questions to ask in the interview?

Ali Ghodsi: Okay, well, I ran this little experiment in my head, which was: let's look at companies where this is working. Are the best salespeople technical, super technical, super smart? Do they have PhDs? Are the PhD technical kids the best sales guys? And no — absolutely not.

So then I learned two things from that. Okay, so that's probably not the main thing. And secondly, it probably doesn't even have any advantage — because if it had an advantage, some of these sellers who were great salespeople and also happened to have a PhD would be at the top making all [the money]. But no, you found none of those guys.

Brian Halligan: I don't think it's only not an advantage. It's a disadvantage to have a PhD.

Ali Ghodsi: There you go. So it became pretty clear that the way we were hiring [AEs] was something we should change. We were testing them on how technical they were, because how smart are they? But I just looked at the best, and none of the best are technical. So what are we even doing here? We have to revamp who we're hiring.

Now, we also had an amazing sales leader that we hired, [Ron Gabrisko], who knew what great looked like. So we worked with him — and he should get 99% of the credit for what happened on the sell side. But it was pretty clear that we don't need to get only the technical people. It started to become clear that there are other skills that salespeople have that you should probably go after.

One of them is — I think great technical people tend to be more introverted. I'm generalizing here. And they're maybe not the most aggressive, opinionated, toe-stepping people. But I learned quickly that the best salespeople, actually, they're kind of aggressive.

Brian Halligan: Very aggressive.

Ali Ghodsi: One of the first [AEs] that Ron had hired, Dave, got us a meeting with a customer that we couldn't get a meeting with. And in the meeting, the exec that had gotten us the meeting said, that AE — get him out of here. I don't want to see that guy ever again.

He's emailed my boss, everybody else. This is unacceptable. So that Dave guy, I don't want to see him at all.

So then afterwards I'm like, hey, Dave, you pissed off the customer. What the hell is going on? He's like, Ron told me, get into the building. Figure out some way of getting in. Nobody was responding to an email. So I went through every door I could, and I had to break glass. I got you the meeting. What are you complaining about?

So it started becoming clear that, okay, they need to be professionally aggressive. Otherwise — it's a little bit the squeaky wheel gets all the grease. And that itself is counterintuitive for engineers, from Professor Land.

But there was also another meeting with one of the early ones — I remember, Keith. We were in the room, and the customer somehow got pissed at this guy and told him, okay, who the hell are you? What are you even telling me? And I was like, oh, that's pretty bad.

Then he suddenly just started asking her these weird questions. Okay, so what is your team working on? We're supposed to do sales. What is he doing? I'll shorten the story: at the end of that meeting, she was hugging him, saying, I'm so sorry for saying that. And I was like, oh wow, what did you do in there?

He's like, well, I noticed she was emotional. So I wanted to bring it to a subject that she's comfortable with. Everybody's comfortable talking about what their team members are working on. So I moved the subject to that area.

So I learned, okay, these guys have really, really amazing EQ for handling really difficult conversations that get really uncomfortable. They're the kind of people that it's hard to ignore. If they email you, you're going to respond back to them.

So it started becoming clear that there's a rubric. They need to be a little bit professionally aggressive. They need to have amazing EQ. They need to have command of the room. And then eventually I started learning that the really smart ones actually figure out what's called the power base of the company — how decisions get made high up in an organization.

It's actually complicated. Not a single person will say, I'm going to buy this for $100 million. It's a complicated web of influencers and people inside the customer that make this decision. So they have to work that power base.

So it became clear that this is an art, and it's a very different art from what I grew up doing, and we should just hire the pros. And since it's so humanly intensive — salespeople are dealing with other humans. A lot of the things we learn about how to deal with computers and math and logic and physics, it doesn't apply over here. And humans haven't changed. So probably these techniques that they've learned over the last 30 years, we should trust them.

That was the journey we went through, and we revamped our sales team that way. A lot of this I learned from Ron. I pushed back, and we had all these arguments. But eventually it turned out he's right, and we landed this model.

Brian Halligan: So many of the CEOs I'm working with are struggling with this. They have PLG, they should go to enterprise. Then they're like, I need my Ron. How did you find your Ron? And talk about the early Ron, because it seems like everybody's looking for Ron.

Ali Ghodsi: Well, first of all, I think he was unique because he's a classic salesperson. He's the classic — they call them meat-eating, doing push-ups. He's the classic PTC, BMC-style [seller].

Brian Halligan: By the way, I'm a PTC guy. I grew up at PTC.

Ali Ghodsi: Okay. So he had been selling FTP, which is free, and making a lot of money on selling free FTP.

Brian Halligan: Very hard to sell.

Ali Ghodsi: It's hard to sell free stuff. So he was a phenomenal sales guy. But Ron was special. Ron also happened to have an engineering degree. He had an undergrad engineering degree, and then when he did his GSB degree at Stanford, he also got an engineering master's just for fun, because he had cycles to burn.

So he could push back on us and he could talk our language. But he was really from that breed. He could speak our language, and we could talk to each other, and he would entertain it. So it wasn't like oil and water.

Brian Halligan: He was smart.

Ali Ghodsi: He's smart, but also our kind of smart. We've already covered the other types of smart that maybe an engineer won't have — but he had both types of smart.

Brian Halligan: By the way, those people are very, very rare. Not only an engineering undergrad, but a master's in engineering with Stanford GSB.

Ali Ghodsi: Correct.

The second thing I looked for comes back to: can you build it?

Brian Halligan: I like to think of it as, can they build the machine, or can they just run somebody else's machine?

Ali Ghodsi: My joke is kind of like: do you have a driver's license, or are you a good driver? Okay — can you build a car for me? Very different, right?

Ron had been at a startup called Cyclone, and I think they went from 0 to $50 million ARR-ish. So he had seen that journey from 0 to 50. Then the company eventually sold, I think, to Axway, and there he had seen the growth up until hundreds of millions. So he had really seen 0 to 50, 50 to 100-ish. He understood that scale in a very detailed way.

And he was very cerebral. So you could really figure out, is he the guy that can build the car, or is he just along for the ride and he's a great driver? No — he knew how to build the car. You could argue with him: hey, why don't we put the engine on the back? Or why don't we change the design this way? He's like, we could, but then that would break over this, that wouldn't make any sense.

Third, he had been in these two companies — basically hadn't changed company for 11 years. So it meant he had longevity, because a lot of these folks will just bomb out. Again, back to: if you're doing something strategic, like figuring out go-to-market motion, it's going to take you two, three, four years. So if the guy or gal is bombing out after two years, you've got to reset and start over, change the organization.

So he'd been there a long time, and I knew that he was going to be loyal. If the going gets rough, he's not going to quit in the first instance. Which also meant that I could probably be pretty rough managing him. I can be pretty aggressive and he's not going to leave. We can have huge fights and he's not going to leave — because he didn't leave from that shithole, I kind of felt, so then he's not going to leave from this shithole.

That turned out to be crucial, because the classic PTC sellers are hard to manage. They're aggressive. They're a handful to manage. They're very, very difficult to manage. Ron, as amazing as he is — he's created our $1 million to $7 billion ARR engine.

Brian Halligan: So Ron is still running sales?

Ali Ghodsi: He is, yeah. CRO. We have a president, but yeah. Ron is CRO.

Brian Halligan: That's very rare. In fact, these days I would say VP of sales, because these companies are growing so much faster than they used to. They're churning through them every two or three years, and they say, well, they can't scale, they haven't seen the scale. So congratulations on you and Ron. That is a really rare thing.

You built out your exec team. Talk about that. Same thing — did you turn people over? Did you miss hires? Did people not scale? Everyone I work with is struggling with this.

Ali Ghodsi: Look, I think that by the time you know that you need to hire an exec, it's too late. And there's a trade-off. If you give me infinite time, I'll hire the best person. If you give me five, six years, I can find a phenomenal person. But if you give me a very short amount of time, I can hire someone quickly, but then the quality will not be great.

So what I did is I tried to hire ahead of the curve — before we needed it. That would give me more time, so that I could run the search for a longer period, and I could increase false negatives and decrease false positives.

Brian Halligan: Wait, how did you do that?

Ali Ghodsi: False positives means you hired someone that you thought was going to be great, and they're not great. You made a mistake. Now you have to fire them. It's going to take you a year to figure out that they're not great. I mean, you might know after six months, but you're not going to fire your executive after six months. You're going to say, oh, it's not clear, so you're going to give it another six months. Then after a year, if you have the guts, you're going to tell them it's not working out. That might end there, or it might take another six months.

Once they've left, you've got to do the search again. And now you're gun-shy, because the last time you screwed up. So now you're hesitating. You might go for a compromise candidate, which doesn't have any strengths, but also no weaknesses. And then you have to ramp that new person. So you lost two, two and a half years.

So try to avoid that whole thing. How do you do that? I mean, it sounds obvious — well, be really, really picky. So skip on a lot of candidates who could be great.

At Databricks, I've skipped and said no to phenomenal people who've gone on and done great things, and they have a chip on their shoulder with respect to me. They're like, I can't believe you didn't hire me. Look at what I've done since then. Big mistake by you. And I'm like, yeah — but my playbook was on the side of being just extremely picky. Take a decent amount of time, start early. And most of those guys and gals have been with me like a decade.

Brian Halligan: So you haven't seen the turnover in these.

Ali Ghodsi: I have. I think I would say two cases where I made a mistake. Maybe more, but two really come to mind.

Brian Halligan: And you said give yourself some time. Is that three months, six months, nine months, to be picky?

Ali Ghodsi: I think it takes at least six months to do a good search. Maybe longer, could take a year. We've had searches that took a year. Keep looking. People settle. People settle and they say, look, I looked at everybody, this is the best we can get. We haven't had a person in this role now forever. Just get someone in the seat right now. And that's the problem.

The two that didn't work out — when I look back at the process I ran to hire those two, all the signals were there. Even in the interview process, they told me stuff that was outrageous. And I knew it was outrageous. But I was like, well, yeah, I guess this person had a big fight with that person, none of my business. And I was like — wait, I could be that person next.

So when I look back and I do a post-mortem, I always see, hey, all the signs were there. What was I doing? Or, in one of those cases, I rushed through the hire. It looked good, I went fast.

And then I think that back doors are phenomenal. Dude, just do an insane amount of back doors. You get a phenomenal 360 view of a person if you just talk to all of their managers in their past. Just go talk to all of their managers. Do also all the front doors — I would say like 10, 20% of the front doors end up actually being truthful. 80% are bullshit.

Brian Halligan: Ali, I want to switch topics on you. You had a rivalry, obviously, with Snowflake. It was an interesting rivalry over time, and my sense is you were pretty far behind, at least from a revenue standpoint. You've passed them. I just remember at HubSpot we were looking at the two and we picked Snowflake way back when.

What were the chess moves that worked relative to them? And I guess I have a thesis that that was a very sales-driven company — the CEO was a sales guy, he cold-called me, actually — and you folks were product-driven. Any thoughts on that, in advising founders and CEOs about that kind of thing?

Ali Ghodsi: Yeah, that was the consensus at the time, that the companies were like that. I thought that was unfair to us, because I thought with Ron and everybody — we had an amazing team. And then we had Andy come here and build up an amazing, crazy machine. It's like an army. So I thought that was unfair at the time when they were saying that.

But it is true that we were half the revenue and we were growing slower. So to accelerate the revenue so much that you can overtake someone that's got double your revenue and bypass them — we knew it was going to take several years. Back to: good strategies take multiple years, you can't do them overnight.

So: study your enemy carefully, understand their weaknesses, and apply your strengths to their weaknesses.

This was a great company. They had built an amazing product. It was a game-changing product that disrupted all the data warehouses of all the hyperscalers. The hyperscalers were getting destroyed by Snowflake, because it was such a great innovation, such a great product. So this is not like, hey, it's a PTC-like company. No, this is hardcore.

But they had a few weaknesses. One was that it was proprietary, because the folks came from Oracle. So it was a fully proprietary stack. And still today all the data gets stored inside their proprietary format. They've now added open source stuff, but that's just a small fraction of what they do. Most of the customers we bump into have this proprietary [format], and people didn't want to get locked in. So that was one weakness.

Second weakness they had was that they had no support for AI. Or they would say that they did, but we knew that that was pretty weak. So that was the second thing we wanted to push really, really hard on.

And those two combined with a third: it was pretty expensive. Now, it was expensive, to be fair, probably because it was a great product and they could extract a lot of margin out of it. Winners do that. They have a great product.

So we went exactly for those three. We said, hey, open lakehouse means you own your own data. It's completely open. Don't lock it up over there. You can do AI on it, because our roots are AI — we've been doing machine learning and AI since 2009, that's where we came from. So apply that strength. And by the way, at the time it wasn't clear that was going to work, because AI was not a big thing in 2019, 2020. But we knew that that's a weakness, so we keep pushing on that weakness.

And then cost — let's make sure that the TCO is a third. And still today, we typically win on TCO.

And then we just hammered that extremely aggressively in account after account. We had a very careful playbook. And the playbook wasn't just, let's go out and say that Snowflake sucks or anything like that. It was: identify the Achilles heel and press on those. Don't just go say, hey, rip out Snowflake. It was a coexist strategy. Go in there, look at the exact workloads that could be amenable to machine learning, pull those out, move the format to open source.

We had a very clear, concise playbook. And this kind of contradicts [the idea] that our sales would suck, or that they would be good at sales — because sales executed this play at Databricks. They went account by account and did that.

And then it took multiple years. We also had a category that exemplified this playbook. The category was lakehouse. So we had a three-year, four-year strategy to create this category of lakehouse — which, by the way, was controversial. People didn't believe in it. But eventually the category took off. Now everybody says they have a lakehouse. Even Snowflake will say that, and that they have open formats and so on.

So yeah, that's what it says: study your enemy, study your competition carefully, and then go after those weaknesses.

Brian Halligan: I had a professor, Arnoldo Hax. Arnoldo was one of those guys — he didn't have a double chin, he had like a quadruple chin. And he always had a line: watch the competition, but never follow the competition. He'd do it, and his chin would wag for another minute.

Ali Ghodsi: So that second part is really important. Some companies are not competition-obsessed. I think that's a mistake. You have to study the competition. From The Art of War, which they say all the CEOs should read — The Art of War is all about studying your enemy, right? Their position, is it high, low, do they have more troops, and so on. So you've got to study your competition.

But then there are the companies that actually are obsessed with their competition. Absolutely obsessed. And we have some companies right now that are obsessed by us. So then what they do is they just copy the competition. They're always trying to chase what capabilities or what positioning the competition did, and they're just copying that.

I think this is the most common failure mode. I think it's covered really well in a book — great book — not The Innovator's Dilemma, but The Innovator's Solution. It talks about how product managers tend to just build the same features as the competition. This is the second pitfall that I see a lot of CEOs fall into: either you don't obsess over the competition, or you obsess and just copy them.

In our case, we didn't just go and build a data warehouse and say, hey, we have a data warehouse that's better than Snowflake's data warehouse. No one would have believed us. They would have just said, what are you talking about? They're the leaders in this. They created this category. What are you even talking about?

So we had to say, no, no, no, no, this is a different thing. And it's different in multiple secular trends. So we actually out-innovated on the product side as well. You've got to do that as well, and not just copy.

Brian Halligan: So how did the idea for lakehouse come? Was it your idea? Was it kicking around in your head? How did you sell it internally, and how did you set it up as an initiative? Did the core team do it? Did you break a team off?

A lot of the CEOs I'm working with are working on second acts, and some are really struggling with it. How did you guys do that? What did you do right? What did you do wrong?

Ali Ghodsi: It was a controversial decision internally. A lot of the seasoned folks were saying, don't do it. It's a funny word. It's technical. What is a lake in a house? It's like a house in front of a lake. What does that have to do with what we do? It's kind of ridiculous. We're trying to be an enterprise company, we're going to talk to execs, and you're going to talk about getting a house on a lake.

But then we brought in strategy firms, and the strategy firms outside also said — they actually did surveys with people — and they said, yeah, indeed, it doesn't work. So they came up with bland category names for us. I think Unified Data Science Platform was their proposal. And then we ran it by some of our sales folks internally and they're like, yeah, this doesn't make any sense, it's too technical, how about — and then they would propose something else.

So we had to march ahead and have a lot of conviction. And that was not easy, because it's like, hey, you're risking — you have a company that's pretty successful, you want to risk it all and go in on this weird thing. But we did.

And initially all those people that said don't do it were vindicated, because people were ridiculing it. They were making all these ha-ha data rapids, going through the data river, data hut, and so on. People were having a lot of fun with that. But I think it was also in the category of any PR is good PR. So it wasn't that bad in the big scheme of things.

But we really did mobilize the whole company behind it.

Brian Halligan: It wasn't a separate team. It was the whole company.

Ali Ghodsi: It became the whole company. And we would do it across the board. Like, oh, there's an article about Databricks, amazing, it said great things about us. And we'd be like, no, no, no, wait, wait, wait — they didn't mention lakehouse in the article. This is horrible. Can you go contact the reporter? What are you even doing?

Oh, we got a big win here, here's a customer win, here's what the customer said. Hey, but the customer didn't mention lakehouse. What the hell?

So it became completely, maniacally, religiously across the board in the company: it's got to be a lakehouse, otherwise it's a loss, I don't care.

And I think I saw at some point great ads from Databricks that I was receiving on Facebook. And I was like, these are not mentioning lakehouse, what the hell? And my head of marketing said, yeah, you know how well the ROI is on putting the word lakehouse in an ad? Spark is the thing we're known for. Here's the conversion rates. You're a data guy — look at the conversion rates. Spark sells. This other weird, funny thing you have doesn't sell.

I don't care. Get rid of all those ads that work and use this ad that doesn't work.

So it took a concerted effort by the whole company for multiple, multiple years.

Brian Halligan: I'm sure sales reps are motivated by their comp plan, and it was easier to sell the core product. How did you incent them and get them to start selling lakehouse?

Ali Ghodsi: Comp plans was always a thing we were obsessed with. I'm always personally obsessed with it. So there would always be multipliers and extra spiffs and gravy on top of the comp plan and things of that nature. Every year we would make sure the comp plan — for sure.

Don't argue with sales. That's dumb. Put it in their comp plan. If sales doesn't want to do something, then put it in the comp plan to do that thing, if you believe it's the right thing. You might be wrong. But it's the easiest thing in the world.

So I don't engage in those debates. I mean, I'll try to figure out, are they right about it or not? But if I'm convicted, I put it in the comp plan and stop the debate. And the debate immediately stops.

Brian Halligan: A couple of times in the history of the company, you decided to take a step back in hopes that you would take ten steps forward. This is one. My sense is moving from PLG to enterprise is also one. Really doing AI. There have been a few points where you take that step back so you can go faster.

I see a lot of CEOs nervous to take that step back, nervous about what the investors are going to say if revenue slows down in the short term. Advice to those CEOs? Or are CEOs generally too timid?

Ali Ghodsi: Well, first of all, I don't know if those CEOs you're referring to are public company CEOs or private company CEOs.

Brian Halligan: Private.

Ali Ghodsi: Okay, interesting. I would say on the private side you have more latitude.

I was greedy, and I had bigger hopes for Databricks than where we were. I was disappointed. At this point, when we did lakehouse — 2018, 2019 — we were at multiple hundreds of millions of dollars of ARR. So we were a successful company by some metrics, but I was pretty unhappy, and I wanted the company to be much, much, much bigger and much more impactful.

At the time we were talking to investors — I'm talking public company investors we were talking to, who were trying to understand what data does. And I would paint them this big vision of what I want Databricks to do one day. And I was being truth-seeking with myself after the meeting, saying, wow, we're not doing that. This picture that I'm painting is amazing. That's not what we're doing. We're just selling Spark right now.

So it came from a place of: hey, do we want to be that big thing or not? And for me it was like, okay — I don't want to do this job. Remember, I didn't even want to be CEO. So if I'm going to do this job, we want to be that amazing vision. You want to do that amazing vision. We've got to transform ourselves. Otherwise we just get stuck.

What I saw happening in Silicon Valley when I was studying companies was that these companies that end up being one-trick ponies — they're amazing companies, amazing innovation. Splunk: this amazing observability, security, [SIEM]. But it's one trick. Whereas Amazon, Google, Microsoft, they had many, many products, and you couldn't define them by saying, oh, they just do that. That's too simplistic.

So how do we become one of those? If that's what your target is, you have to start taking the big bets, and you might not succeed with them. And then I was stubborn, so I kept going with those bets a few years more, and eventually started to see the success out of those.

It really came from that. I was not content. I didn't want to have a single-product company. I wanted to have a diversified product portfolio where each of them were successful. You did the same, right, at HubSpot?

Brian Halligan: We did the same. We were a marketing app company. We became a CRM platform. We took a massive step back so we could take ten steps forward. And we sold it hard to the public investors, and they didn't give a crap about the big vision until the revenue started showing up for the new products. Is that kind of similar for you?

Ali Ghodsi: Yeah. I think public markets — it sounds great. We've heard so much BS on earnings calls.

Brian Halligan: Yeah.

Ali Ghodsi: The slick, smooth-operator CEOs who are BS-ing every earnings call. You listen to them, and some of us look at it like, oh my God, I can't stand this more than two minutes. They've heard that all the time, on every earnings call. So I think they're just discounting all of that and saying, show me the money.

So yeah, it takes multiple years until people start paying attention to the thing that's going to pay off. I've seen this again and again and again. Databricks was cloud-only and AI, and no one gave us credit. It was all on-premise where all the businesses were at. Until it took off — then suddenly it was like, oh my God, how did you guys do it so fast? Like, yeah, we've been at it for five years.

So you do have to have stamina. You have to do the thing you believe in. It has to be non-consensus, but you also have to be right. And you have to do it for four or five years. Then at that point people start looking at it — and by the way, people's reaction will be, oh my God, how did this happen so fast? How did you build all these products? Where have you been, Brian? I can't believe you guys built all these things, you're like a completely different company, how did you do it so quickly? And you're like, actually, we've been doing it for five years. You didn't pay attention.

Brian Halligan: That rings a bell for me.

Ali, I spoke to a bunch of people who have worked with you or worked for you. And one of the quotes I got is: he's a killer. He plays more aggressive than you think is possible. And I'm hearing this come out. How does a mild-mannered computer science professor turn into a killer that's incredibly aggressive? Where does this come from?

Ali Ghodsi: I think I have a chip on my shoulder. Honestly, I think growing up in Sweden as an immigrant, switching schools, environments — you have to have this kind of aggression to succeed. And there's probably a lot of pent-up anger that piles up over the years.

The United States has softened me a lot, because this is a happy place for me. It's like, okay, this is harmony. I know how it sounds, but yeah — being an immigrant in Europe gave me a lot of chips on my shoulder and a lot of things to prove to myself and the world. So it probably comes from there, I would guess. Or maybe it's just genetic. Who knows?

But as a CEO, you learn very quickly that probably the number one trait that is terrible for a CEO is if they're conflict-averse. I learned that very quickly — that conflict-averse CEOs is the worst thing possible. There's nothing worse than that.

I'm not saying they're bad people. They're wonderful people. In fact, maybe the most wonderful people in the world are conflict-averse, right? But in the CEO job you have to be crystal clear.

And the reason is, everybody's pushing you. Everybody wants to get something from you. Can you do this? Can you approve that? Can we do this? If you're conflict-averse, you're just going to say yes to them, or you're going to lie to them, or you're going to try to avoid the subject.

You've got to be crystal clear. We don't do that here. No, we're not going to do that. No, I'm not going to approve [it] because you caught me in the hallway here. Go through the formal process. Just because you're chit-chatting with me in the elevator and I'm being nice and you're being nice back, and you were trying to jam in approval for something — that's really sneaky of you. So let's go through the proper process for this.

There's all this push all the time. If you don't do it, the company starts going in all kinds of directions, instead of laser-focusing all that energy on that one bottleneck that you wanted to solve.

I also think that it helps you be more consistent and clear, so everybody gets the message. People don't understand nuance. I think Ali meant this. No, no, no, I think he meant that. No, no, I think you're totally misunderstanding. Let's be crystal clear, then. Let's make it black and white so that there's no doubt, so everybody knows. Let's give them the cheat sheet.

So you've got to be aggressive with that. And then you start getting people that are more like-minded, and you start growing in the same direction. I feel like big companies otherwise — we're 12,000 employees — they start canceling each other out, atoms bouncing off each other, strategies that don't make sense. I saw it in big companies. So I'm trying to avoid that.

Brian Halligan: Just pulling on that thread — I have a thesis, and I think you agree with it, that a pivot point in a lot of startups is when you get to 150 employees, Dunbar's number, and things start to really slow down. You guys hit 150, and you're 12,000 today. Do you agree with that?

So many of the companies I work with are ripping by that 150. What is your advice to founders to create some structure and process, but not really slow the damn thing down?

Ali Ghodsi: Yeah, some slowdown is necessary. The Dunbar number definitely happened. For us, I felt like it was like 250 or something. But you're right. It was around the time, actually, that we did the CEO transition.

I think it goes from being everybody knows everyone and you as a CEO know everything that's going on. So in some sense, you can run the company kind of like a star — there's one person that knows everything, or two people that know everything, and then there's a bunch of people around.

So you have to start putting structure in place so that — you don't know everything. You just trust that this part of the go-to-market will take care of itself. This part of — so you have to start putting in processes where you're scaling indirectly.

I know it sounds funny, because I'm sure you have managers and managers and managers, but really it's the first time the company is going through the transition. Or if you have managers of managers, they might have had it before, but those managers of managers didn't matter, because the CEO knew everything anyway. So they were just managers of managers in name.

But what happens when you actually can't reach down, because there are too many people? You can't reach down and understand what's going on. You really have to go through the intermediate layer. You've got to put structure in place and make sure that everything reviews KPIs. Measure it in a way so that you can make sure that the ship is going in the direction you want it to, without going and tapping people's shoulders all the time — because there are too many shoulders now, and you don't even know the name of everyone anymore.

Brian Halligan: I interviewed Jack Dorsey on this podcast, and I read a lot about Brian Armstrong, and they're trying to recreate the CEO model and rethink it. The way Dorsey describes it is, the company is an AI, and the employees sit around the AI, and their main job is to train the AI and give it context over time. And he wants no more than two layers between himself and the front-line employees. And Brian Armstrong is doing similar things — not just shrinking the org, but really collapsing the number of levels in the org.

What is your take? It seems like there's a movement starting around this, and a bunch of the AI-native companies I'm working with are pretty intrigued by that.

Ali Ghodsi: Yeah, I think the direction is correct. We're doing the same. But I think we should separate two things that sometimes get conflated. What is the official org chart you want to have in a company? And what is the way in which your company disseminates information, aggregates information, makes decisions, and collects those? We should separate these two.

Ten, twenty years ago these were the same thing. There was no way to collect information other than you ask your person, they ask their people — so you go up and down the tree structure of the org chart. That's how information disseminates up and down and decisions go up and down. That's the only way you can do it. More broadcast, that's like a top-down company. Or you can do bottom-up. But those are the only options you have. Or you can just be a random, poorly run company.

Today what has happened is that we have extremely smart AI. I keep asking this question. Every audience I go to, I ask them: how many of you think that the AI is smarter than most of the people around you, most of the time? And I get like 90% of the hands up.

Well, I define that as AGI. It's artificial general intelligence. It might not be superintelligence, but it is as good as most of the people around you, right? This is undisputed, every time I ask this. Audiences all agree on that. They don't agree that AGI is here, because they have a weird definition of AGI.

So we have these models that are super, super smart. Then we look at how AI is being used inside corporations.

Brian Halligan: And by the way, people complain about them hallucinating, but humans hallucinate too.

Ali Ghodsi: All the time.

Brian Halligan: All the time.

Ali Ghodsi: So these things are phenomenal already. And let's just say they're smarter than most of the people around you most of the time — that's what I've gotten from everyone. By the way, I asked that at Moscone Center to 32,000 people and asked them to raise their hands, and almost everybody raised their hands.

But then you look around and say, okay, what's happening inside the enterprise? How is AI being used? And they're just using them as stupid chatbots. They're going to the chatbot, asking it the question, getting an answer. That's all that's happening. And then they're using them for coding — they have coding agents that are writing code. By and large, it's a little bit of an oversimplification, but this is what's happening inside the enterprise today.

So there's this huge gap between the capabilities the models have and — it is just not true. I ask this question: do you have hundreds of [agentic] coworkers collaborating with each other, providing proposals to you, keeping you up to date, and doing that? Nobody raises their hand. I've never had a single person raise their hand on that.

Okay, so what's lacking is the enterprise context. You need to capture the enterprise context that's in people's heads. Decisions that are being made every day. What's happening inside every meeting that's being recorded, every email that's being sent — everything has to be captured and be made part of the context and then fed to the AI.

We call this the ontology. So we want to capture the ontology and feed it to the AI. So we actually built a product that does that. It's called Genie, for Databricks.

So it's not just, buy this product and you will solve this problem and you're done. No, absolutely not. Turns out you have to also build this ontology. And at Databricks we actually have a phenomenal ontology we built for ourselves. We've noticed our customers don't have [that]. They use the same product, but they haven't built up the ontology the same way we have.

So for us now, it's magical. We have an org chart of people that report up and down, and we can decide what the fan-out should be in spans of control and all of that. But then we have Genie. And Genie pretty much answers any question I have, in any meeting, about anything. And it can also start automating tasks for us. So we're all just sitting on our phones using the Genie app all the time, on all of these kinds of things, feeding more context to it, building up more context, automating more and more processes in the company that we find.

So yeah, I think it's true. And the Genie product does this, and it builds the ontology. But then what about the humans?

Brian Halligan: Yeah. What about that pyramid-shaped org chart?

Ali Ghodsi: I think that that is TBD. And here's why. I think there's a lot of stuff that's being said in the market that I'm not sure is correct.

I think the intelligence is true. So I agree philosophically with Jack Dorsey. The question is, does that apply to the org chart of humans too? Like, should I just have one layer below me, or two layers?

Here's the problem. I see some companies saying, okay, so therefore we're moving to 25-person fan-out. So each manager should manage 25 people. They should also be player-coaches, because now we have AI that can write code for you and so on. So I want every manager to write code, ship it to production, and manage 25 people.

And I'm like, okay. So how's that going? You look at what managers are doing. Well, a lot of it is human stuff. This person is unhappy. Career choices. Unclear what the goals are that they want to do. There's a lot of human interaction. You can't have 25 direct reports reporting to a person and have them be super happy and aligned and understand what they're going to do and all of that. And also you're asking the managers to at the same time be a player-coach and submit code. And they should be vibe coding 80% of the time, and 20% of the time they're managing 25 people.

Brian Halligan: You're skeptical.

Ali Ghodsi: Yeah, I think it's BS. I think things will break down. You're going to get a lot of unhappy employees who don't know what the hell is going on, because they don't meet their manager — the manager is busy vibe coding most of the day, and there are 25 of them. And to tie-break decisions across all these groups.

So I'm not fully bought in to how you resolve that. It's like a double whammy of, manage more people and do [IC] work yourself.

Brian Halligan: Fair enough. I put out on X that I was having you on the pod, and I got a bunch of interesting questions. One of which was: do you still code?

Ali Ghodsi: I do. Well, first of all, I always was coding. I never quit coding. I mean, I ran engineering and product, right? And I've been coding since third grade. So I never stopped coding. I would code on the weekends just for fun and stuff.

But in November last year I started also committing stuff to production, just to understand exactly how hard is it to go all the way into production.

It started with an experiment where I built a connector. It took me two days to build the connector, and our current teams were taking three quarters to build those connectors, for one person. I was like, how can I do it in two days and it's taking you guys three quarters?

And they said, well, your thing is not production-ready. It's not secure. It hasn't been thoroughly — actually, basically, it doesn't really work. You've got a proof of concept working. You can't get into production.

So I really wanted to figure out, are they right? What's this gap? How can it be that the core thing took me two days, but all the other extraneous stuff on top takes three quarters?

So that's what got me into the journey of, hey, I need to commit code into production that goes and faces the customers. Only then can I have a feel for how this really works.

And what we learned was kind of interesting. The team went back, they used my push, and they came back and said, you kind of were right. AI is very effective. We haven't been using it. We can now compress the time it took. So we're going to compress it down from three quarters, one person, to seven and a half months, one person.

Brian Halligan: Okay, okay.

Ali Ghodsi: Wait a minute. How's that even possible?

So yeah, they were like, look, it's not production-ready, it's not secure, it's not that. Then I went and I found a person — we have a person who's not going to stand for all this BS. He went in, and together the team worked hard to revamp the process. So after we inserted this person — and he was an FDE — after three quarters, they came back and they said, we can do seven connectors in one quarter, better.

And I was like, okay, what happened? And I'm like, oh, technology got better, models got better, that's it. But I pulled them aside and I said, hey, can you tell me the real inside scoop of what's happening? Why was it so [slow]?

And they said, look, here's the thing. You're right that the code can be written very quickly. But first of all, to build these connectors we would go talk to customers. It would take us one quarter to collect feedback and write the [PRD]. And we write very good PRDs. We have very skilled PMs. That quarter, the whole pipeline is stalled. There's nothing being written that quarter.

Then you have to set up the systems that we connect to — Salesforce, Workday, NetSuite. We don't know how to do that. We're not experts at that. Those companies maybe don't want to help us set that up. We hate that part of the work. That takes a very long time. It's error-prone. [Now] we found consultants that can just do that for us, and now we can do that super fast.

The quarter of PRD, getting the requirements — let's do that in one week. Quickly slap it down in the .md file, and if it's not great, it's okay, we can fix it later. And then the testing — we would do one quarter of testing at the end. Well, let's just move that up front. Let's do this end to end with AI.

And that way they were able to compress things. And instead of having one person per connector, let's have seven people, seven connectors — so if one person gets sick, they go on pat leave, mat leave, vacation.

So we had to re-engineer the whole process. That's what got me into coding: to understand what are all the processes that are needed, and what are all the bottlenecks that are making it so slow.

And that informed my view — which I've had for a while, I've been saying this since, I think, the beginning of the year or end of last year — that it's going to take humanity a decade at least to absorb and diffuse AI. Because of what I just experienced in a tech company with super smart people who want AI, and they're all like — you have to basically do the process re-engineering of all organizations on the planet. So that's going to take a long while.

And so that's what got me back into coding. I'm still doing it, but not as much as I did earlier this year.

Brian Halligan: So you're doing some coding. What is a day in the life of Ali like? It's Monday, I'm eating up an hour and a half of your time in this podcast. What is your cadence like? When do you get up in the morning? What do you eat? What are your meetings? How do you schedule your meetings? Do you have Mondays a certain thing, Tuesdays? What is your operating system yourself?

Ali Ghodsi: Yeah, I actually think it's not one consistent thing. It changes throughout the year. You have bursts of, okay, board meeting, strategy, our big summit in the year. So it's not the same thing throughout.

But I see it as kind of three things. One is the main bottleneck that I'm obsessed with. I want to carve out a lot of time for that. That's my main focal point. I want to unblock that big thing that I think is going to get us 10x. And I think only I will do it, because everyone else is busy running their trains on time. So nobody's thinking about this next big thing that we need to do. I'll come back to this one.

Then there's a whole bunch of stuff you have to do as CEO. I don't need to tell you — everybody, all the CEOs are doing it. You know what it is. It's all the shit that comes at you every day. It's the thing that packs your calendar back to back. You've got to do those. So I try to do those, and I try to compress that as much as I can so it doesn't take too much of my time.

Then I'm a product CEO. So I try to spend as much of the remaining time looking at what's happening inside the product. Where are we building? What are the features? What do customers think about the product features? I try to keep up to speed with all the technical details of our product end to end. And it's a pretty big portfolio now, with 3,500 engineers. So the portfolio has gotten pretty big. So I spend a lot of my time on that.

The remainder of the time I go back to the first thing. So on the weekends, in the morning when I wake up early, I try to think through: how can I unblock that main thing? If we unblock that, then the company can be worth 10x more.

Brian Halligan: And do you actually go in your calendar and create think time to think about that kind of thing? Or is it nights and weekends, back burner? How do you do that? Do you work from home a day to work on things like that?

Ali Ghodsi: I try to compress the calendar. What I mean by that is I try to put nothing on the calendar. It ends up being packed anyway. But there are many blocks that are free where I can go back to this main thing.

If I do the 8 a.m. back to back to back to back to 5 or 6 p.m. — yeah, I consider those days I've just been a slave to my calendar. I'm just working for my calendar. I've been working on behalf of it. It's good, it's my job.

Brian Halligan: You're working on everybody else's priorities.

Ali Ghodsi: Exactly. Monkeys on my back, right?

So how do I actually carve out time? I will tell my CEO office team, hey, this day is terrible, I get nothing done, we've done nothing today. I tell them, I've done nothing for the company today in terms of progressing. I've done no CEO thing. I've just unblocked decisions, [spent] time writing this and that, the random crap that comes my way. We need time to really go after the big bottlenecks. That's what I want to do.

Brian Halligan: What is the cadence of the organization? Are you weekly staff meetings? Do you have one-on-ones with all your directs? How often do you do offsites? How do those work? How does a big company like yours operate, keep the trains on time, and work on that big initiative?

Ali Ghodsi: First of all, there's a lot of trust. A lot of people have been here ten years plus, right? And I know their weaknesses and strengths. So I know, this is the person who's responsible for this, but they will screw it up in this way, but they'll be great at these other three ways. So that helps a lot. Context and history help a lot.

But we do a staff meeting Mondays, an hour, an hour and a half, focused on top priorities. So we go through the KPIs of the top priorities. Every year we have one or two or three goals, and those are the thing that I get back to.

Brian Halligan: So in a year, you'll have one? At HubSpot, every year we had three. I was like, can't be more than three.

Ali Ghodsi: Yeah, I wanted it to be less. So this year we had two goals. And I actually wanted it to be one, but it became two. Because otherwise it just becomes everything.

Brian Halligan: And is that Monday morning meeting really useful, or is it theater? Can you just have a Google doc and get it done that way?

Ali Ghodsi: Okay, this goes back to: can we just have an AI, the Jack Dorsey thing? We're talking about humans. Why should I like you or trust you if I never get to meet you?

I don't know if you're married. Why do you have to meet your wife at all? And your kids? Can't you just have a Google doc? We just write down the stuff you want. If there's something you want to teach your kids, put it in the goddamn Google doc. Maybe you don't even need to respond to the Google doc. Claude can.

So my staff meets three times a week. Also Wednesdays, also Fridays. Wednesdays and Fridays are 30 minutes in the morning — like 8 a.m., 30 minutes.

Brian Halligan: And what are you talking about on Wednesday, 8 a.m., for 30 minutes?

Ali Ghodsi: Look, a lot of it is just, okay, what's the main bottleneck right now? What's the main thing? It'll be something that's popped up that's top of mind for everyone, and we've got to do this right now. Sometimes we just go around the horn. It's just 30 minutes to get the day started.

A lot of times we're just joking around and having fun, talking about — the biggest thing is, there's something big in the news yesterday, it could be unrelated, okay, shoot the shit about that. It's just the way to get the day started. Some people will be on the phone, some people will not, some people will not come.

But if you want your staff to be tightly knit, and you want them to prioritize each other over their second team — which is the people that report to them, mind you — all the people that report to them are of the same function. All salespeople reporting to Ron, or they're all legal people reporting to John. So the natural gravity is that you build up walls between departments, and they don't like each other, and they're butting [heads] against — you know, I need to close the quarter, get out of my way. No, this is not legally possible. Or no, marketing needs to do [this].

So how do you change that so that we're doing the right thing for the company, so that the company's priorities are first? Well, we've got to make sure that these people feel like they're a team. If those people feel like they're a team, they have to hang out. If they never talk to each other and they're just writing Google Docs, it's not going to happen.

So yeah, we do meet three times a week. And we have QBRs every quarter.

Brian Halligan: Is that a day? Is that a week?

Ali Ghodsi: Two or three days. There are multiple types of [QBRs] now in the company — product [QBR] or go-to-market. But this is the scaling part, right? You've got to make sure that everything is happening across all the regions, all the departments, all the products. This has to happen like this.

If some product stops delivering, or is veering off, or some region is stopping to sell, or sales leadership is bad, whatever it is — how do you detect that? So you have to have these [QBRs]. And in the [QBRs] it all gets sussed out, and you take action plans on, okay, we're going to change this, we're going to make a change on this, we got this thing wrong, we got the wrong thing. All that happens in those. And a lot of my exec team are the ones running all of these and making sure all those are running right.

Brian Halligan: Do you do offsite strategy offsites, where you gaze at the stars or gaze at your navels?

Ali Ghodsi: Yeah, we do, and we focus on the top bottlenecks. We just did one.

Brian Halligan: Once a year? Once a quarter?

Ali Ghodsi: There's definitely at least one per quarter. There might be a little bit focused for a department. But absolutely, yes.

Brian Halligan: I had someone on X ask me to ask you: why do you want to go public? The valuations tend to be less than the private markets. The scrutiny is not great. The stock price changing every day is kind of weird for employees. There's plenty of liquidity out there in the private markets. Why?

Ali Ghodsi: Yeah. So first of all, I think that if Databricks was public today, I think we'd be worth more.

Brian Halligan: Okay.

Ali Ghodsi: Now, that answer might vary over time. There are times at which I knew we're worth more as a private company than we would be as a public one. But right now, if we were public, I think we would be worth much, much more, actually. And I know that the last fundraise, we had close to 15, 20 billion of interest.

Brian Halligan: You had T. Rowe and the big guys in there.

Ali Ghodsi: Yeah. But we raised five, and the interest was 20 billion. So I just know that based on the supply-demand curve, we could have set the price much, much, much higher if we wanted to. But that's not what we're optimizing for.

I do think that markets tend to sometimes be fickle. For us, we're basically facilitating a big marketplace for employees to get liquidity every year.

Brian Halligan: You don't have to be public to do that.

Ali Ghodsi: It's a complicated operation across probably close to 100 countries. You have to make sure that the tax laws of every country are taken into account. You've got to facilitate this for 12,000 people. We do it for ex-employees too, so they can participate in these tenders that we do. That's probably 15,000 people. So it's a big undertaking. You're facilitating a marketplace, basically emulating Nasdaq in a private market. And at some point I think it just makes sense to be public to do that. And I don't think that will be too far into the future.

I just don't want to go during this time where we're going through this big, crazy transition. If you're going through a big crazy transition, you want to do it in private markets. Companies, when they go through big transitions themselves — like when they went from perm licenses to SaaS licenses — they go private, they take them private, then they do their thing, and then they go back out.

So as the world is going through this crazy AI transformation, you want to be public right now? That makes no sense to me. Now, Anthropic, OpenAI is a different story. They need a lot of capital. They have huge capital needs. We're free cash flow break-even, so we don't need the capital. So I think it's just better right now.

We will go when I think the waters are more calm, when there's a little bit more predictability. Like, this nonsense of, all SaaS companies are shit and the SaaS apocalypse is going to destroy all AI companies. Oh my God, Atlassian had a great earnings report, all SaaS is great, we should buy SaaS, we were wrong. Oh, we should put all our money on semis, because semiconductors, the future is a bottleneck, we just go there. No, no, no semis, let's sell it all. Okay, that big fund is going under.

I just don't want to have to deal with this crazy back and forth. It seems public markets also are not very good at handling this big revolutionary transition that the world is going through. They're having a hard time wrapping their heads around it. They're much better at it than normal, whereas this big transformation, they can't figure it out. You know, software is the value, software is zero. Oh wait, maybe it's — no, but why is revenue going — oh, revenue is accelerating, oh, this should be high.

So we just want to avoid that. I think things will settle in in a year or so.

Brian Halligan: You've used the word bullshit and bullshit detector a bunch. And you talked about being comfortable with conflict. Let's just say you're not comfortable with conflict, and you're a normal homo sapien, and you become a CEO and it's starting to scale. How do you develop that bullshit detector and use it? And how do you get used to this conflict? Because it's unnatural for most people.

Ali Ghodsi: Yeah. Well, don't lie to yourself. That's the most important thing. I feel like a lot of people lie to themselves. They don't tell themselves what's wrong with the company, what's wrong with them. They come up with excuses. Self-defense mechanisms get in the way, and they find excuses.

So start seeing the truth of what's actually not working with individuals, or the company, or your strategy. And if you want to take truth-seeking to its extreme, you can't be conflict-averse about it. You have to face and challenge that gap, that discrepancy, head on. Don't swallow that. Just go after it. Be aggressive about it and push yourself.

Some people are conflict-averse. Well, it's kind of like saying, oh, some people don't like to go to the gym and work out because it's too annoying, but other people just seem to have this gene that makes them work out. No — it's hard for everyone. It sucks for everyone to go to the gym and work out, or eat healthy, or do these things. Yet we push ourselves. Maybe for some it's slightly easier. Maybe some people have more motivation, it's easier to push themselves. Maybe some people have a knack for it. Maybe for some people it's harder.

But I put it in that category: that you should eat your vegetables and you should live a healthy life. And that the natural thing is just to eat a bunch of sugar and sit back and do nothing.

Brian Halligan: So if you're conflict-averse, get over yourself.

Ali Ghodsi: Yeah, get over it. If you want to be CEO — you do not want to be a CEO. If you want to be CEO, don't say I'm conflict-averse. Change that.

Don't say, hey, I want to be an athlete, but I'm the kind of athlete that doesn't work out, because in my family we don't work out. So we don't practice, we don't work out, the results are not great, but I'm not the kind that works out and is healthy and eats healthy food, I'm the other kind. No, that doesn't [work]. If you want to be in this sport, this is the name of the game. You've got to be crystal clear with people, and you have to tackle the conflicts head on.

I don't love the conflicts. Who likes conflict? I would say it's human to hate conflict. It's unpleasant. Conflict means someone pushes back, they're unhappy, they might criticize you back. It's not pleasant. Nobody likes that. It's a human thing to not like conflict. Now, some people really avoid it, some people avoid it less. But get over it if you're a CEO.

Brian Halligan: Ali, thanks for coming on. Congratulations on all your success. You were fantastic. Appreciate all the wisdom you've dropped on the crowd.

Ali Ghodsi: Likewise. Pleasure to talk to you. And I saw you do similar things at HubSpot. So thanks for having me on.

Brian Halligan: My pleasure.

Takeaways

Brian Halligan: Hope everyone liked that interview with Ali. I think he's fantastic. A couple of my takeaways.

First is kind of a vibe takeaway: don't be a wuss is sort of a piece of his CEO advice. And he reminds me a lot of — I interviewed Nikesh Arora from Palo Alto. They don't put up with any BS. They have strong BS detectors, and they use those detectors. They both believe that conflict aversion is kind of cancer in a CEO, and I suspect they're right about that. And neither over-indexes on being liked.

When I was CEO of HubSpot, I think I did over-index on it. We won all those Glassdoor prizes back in the day. I'm not sure that's correlated with long-term success. We did pretty well long term, but I think I over-indexed on it. And you look at Steve Jobs and these guys — they definitely don't.

Speaking of not being a wuss: you have to have the courage of your convictions, and you have to have staying power on that conviction. Conviction without staying power is like a fad diet in January. It just doesn't work.

And the best conviction — there's an old saying, you need to be right about something that everyone thinks you're wrong about. And if that happens to be true, and you're convicted and patient with it, that's where the big, big outcomes come from.

Now, a lot of people talk about conviction around the founding idea. I've found, because I mostly work with scale-up CEOs, that conviction around second acts is even more important than conviction around the first idea. And Ali did this a couple of times, but he talked the most about a product he launched a few years [ago] called lakehouse, which was a big competitive offering. It was unique in the market. Everyone thought he was wrong about it, including most of his employees. And he really, really just stuck to it. He had a lot of conviction and patience with it, and it paid off over a long period of time.

I was in a board meeting yesterday with one of my CEOs. They've got an application, the business is ripping, but they need to move to more of a platform. It's going to be a very difficult shift. He's going to get a lot of pushback, as sales organizations are really not going to want to sell it. And the advice I gave him is sort of the advice I gave myself at HubSpot: at scale, those second acts, you need to swing the pendulum all the way to the other side and get the whole darn company focused on the second act, and just over-index on it. Because if you're in the middle, people will stick with that old first act. And I see him doing that.

And what I liked about what he did was he only had one or two focus areas a year. He was very focused. He focused on the bottleneck. It sounded like his number one focus for two or three years on his annual plan was that lakehouse product. So over-index on the thing you want to change. Changing is harder as you get bigger, and so over-indexing is really important.

I hope you liked it. I really enjoyed the interview. Follow us here if you want to tune in to all the Long Strange episodes with lots and lots of great CEOs. See you next time.