1 00:00:00,960 --> 00:00:02,670 - [Marcos] Competition is so healthy. 2 00:00:02,670 --> 00:00:05,130 When you have a a powerful competitor, 3 00:00:05,130 --> 00:00:07,710 it avoids this internal battles. 4 00:00:07,710 --> 00:00:09,570 It's doesn't give you the time. 5 00:00:09,570 --> 00:00:11,629 It's (indistinct) 6 00:00:11,629 --> 00:00:13,200 If you, if you spend too much time with that, you die. 7 00:00:13,200 --> 00:00:14,553 It's as simple as that. 8 00:00:15,660 --> 00:00:17,010 - Goddamn, I'm old. 9 00:00:17,010 --> 00:00:18,300 I can't believe I'm saying this, 10 00:00:18,300 --> 00:00:20,880 but strategy has changed dramatically 11 00:00:20,880 --> 00:00:22,920 in the 38 years since I've been at Bain. 12 00:00:22,920 --> 00:00:27,510 When I started, the name of the game was anticipation. 13 00:00:27,510 --> 00:00:29,670 If you could predict the future better 14 00:00:29,670 --> 00:00:31,680 than your competitors, you'd win. 15 00:00:31,680 --> 00:00:33,030 It was kind of simple. 16 00:00:33,030 --> 00:00:35,640 And we would build models, low case, high case, 17 00:00:35,640 --> 00:00:38,670 and that just right Goldilocks base case. 18 00:00:38,670 --> 00:00:42,390 And if reality didn't match the base case, well, you know, 19 00:00:42,390 --> 00:00:44,190 people lost their job. 20 00:00:44,190 --> 00:00:47,280 It was all about perfect anticipation. 21 00:00:47,280 --> 00:00:49,260 If you could predict the future better 22 00:00:49,260 --> 00:00:51,510 than your competitors, you win. 23 00:00:51,510 --> 00:00:54,570 But today the game and strategy is very different. 24 00:00:54,570 --> 00:00:57,450 It's not just about predicting the future, 25 00:00:57,450 --> 00:01:01,200 it's about how fast you adapt to changes in the future. 26 00:01:01,200 --> 00:01:03,600 Sure, we think deeply about what's ahead. 27 00:01:03,600 --> 00:01:05,490 Of course, we try to predict, 28 00:01:05,490 --> 00:01:09,030 but we know uncertainty isn't some freak event. 29 00:01:09,030 --> 00:01:10,350 It's the norm. 30 00:01:10,350 --> 00:01:13,230 And that's why in this podcast series we keep hammering on 31 00:01:13,230 --> 00:01:15,810 about this idea of deliver and develop. 32 00:01:15,810 --> 00:01:18,450 You've got to anticipate what you've got, 33 00:01:18,450 --> 00:01:21,330 but you then also have to evolve fast enough 34 00:01:21,330 --> 00:01:24,180 to stay relevant in a changing world. 35 00:01:24,180 --> 00:01:26,370 You know, the winners zig when markets zag 36 00:01:26,370 --> 00:01:28,980 and they're gonna zag when those markets zig. 37 00:01:28,980 --> 00:01:30,540 But how do you create 38 00:01:30,540 --> 00:01:33,300 an adaptable strategy and organization? 39 00:01:33,300 --> 00:01:37,380 How do you build a culture that thrives in uncertainty? 40 00:01:37,380 --> 00:01:39,600 Well, now we're at the final episode of the season 41 00:01:39,600 --> 00:01:41,430 and we're gonna explore that question 42 00:01:41,430 --> 00:01:43,260 with someone who's lived it. 43 00:01:43,260 --> 00:01:45,330 This is a founder who's navigated chaos 44 00:01:45,330 --> 00:01:48,480 and competition at the very highest level, 45 00:01:48,480 --> 00:01:50,080 and he's lived to tell the tale. 46 00:01:53,040 --> 00:01:55,980 I'm Jimmy Allen, and this is "Founder's Mentality, 47 00:01:55,980 --> 00:01:57,570 the CEO Sessions". 48 00:01:57,570 --> 00:02:01,110 And my guest is Marcos Galperin, Founder, former CEO 49 00:02:01,110 --> 00:02:02,520 for almost three decades 50 00:02:02,520 --> 00:02:05,490 and now Executive Chairman of Mercado Libre, 51 00:02:05,490 --> 00:02:07,380 also known as MELI. 52 00:02:07,380 --> 00:02:09,950 What started as a garage project in Bueno Aires 53 00:02:09,950 --> 00:02:13,200 is now Latin America's e-commerce giant. 54 00:02:13,200 --> 00:02:15,840 This is $100 billion ecosystem 55 00:02:15,840 --> 00:02:18,030 spanning across 18 countries. 56 00:02:18,030 --> 00:02:19,440 And Marcos has played 57 00:02:19,440 --> 00:02:22,680 against the absolute best and he's won. 58 00:02:22,680 --> 00:02:26,970 So what I wanted to know was this, what's the one thing 59 00:02:26,970 --> 00:02:29,943 that led to Mercado Libre's continued success? 60 00:02:31,350 --> 00:02:33,450 - [Marcos] It's hard for me to pinpoint 61 00:02:33,450 --> 00:02:34,650 perhaps specific things. 62 00:02:34,650 --> 00:02:37,320 I think it's more culture. 63 00:02:37,320 --> 00:02:39,060 It's a cultural thing. 64 00:02:39,060 --> 00:02:40,260 It's something that you can lose. 65 00:02:40,260 --> 00:02:43,260 I see the things that are happening in Europe, you know, 66 00:02:43,260 --> 00:02:44,700 culture can change. 67 00:02:44,700 --> 00:02:46,800 You have to enjoy the path. 68 00:02:46,800 --> 00:02:50,130 And it, it's a marathon that ha doesn't have a finish line. 69 00:02:50,130 --> 00:02:53,100 The minute that you think you finished, it's the end. 70 00:02:53,100 --> 00:02:56,130 If you look at the brands that have existed for 150 years, 71 00:02:56,130 --> 00:02:57,810 I don't think they've beaten a competitor 72 00:02:57,810 --> 00:02:59,670 like the one we've beaten in Latin America 73 00:02:59,670 --> 00:03:00,780 for the last 10 years. 74 00:03:00,780 --> 00:03:02,700 They've made it, they, they feel like they've made it 75 00:03:02,700 --> 00:03:06,073 and things don't change that much for them in our industry. 76 00:03:06,073 --> 00:03:08,130 On the one hand, it's amazing 77 00:03:08,130 --> 00:03:09,390 because in in other industries, 78 00:03:09,390 --> 00:03:12,210 you cannot create the most valuable company in Latin America 79 00:03:12,210 --> 00:03:14,190 out of nothing in 26 years. 80 00:03:14,190 --> 00:03:17,940 So this change and this continuous disruption 81 00:03:17,940 --> 00:03:20,580 is what creates these possibilities. 82 00:03:20,580 --> 00:03:24,810 On the other hand, you can never feel, okay, we've made it, 83 00:03:24,810 --> 00:03:27,510 now we can, we can enjoy for a while. 84 00:03:27,510 --> 00:03:29,370 But that is also helpful 85 00:03:29,370 --> 00:03:31,950 because I think it's a Darwinian process. 86 00:03:31,950 --> 00:03:35,280 If we wouldn't be the way we are, we wouldn't be 87 00:03:35,280 --> 00:03:36,930 who we are or what we are. 88 00:03:36,930 --> 00:03:39,853 And probably we wouldn't even exist. 89 00:03:39,853 --> 00:03:41,550 - But a lot of what founders often talk about 90 00:03:41,550 --> 00:03:45,120 with their frustration is, you know, you started 91 00:03:45,120 --> 00:03:47,430 with the pioneering team and by definition. 92 00:03:47,430 --> 00:03:48,810 You know, we're not talking about the ones 93 00:03:48,810 --> 00:03:49,740 that didn't make it. 94 00:03:49,740 --> 00:03:52,890 There was a group that made it with you for two decades. 95 00:03:52,890 --> 00:03:56,280 You then, they recruited managers who saw you working, 96 00:03:56,280 --> 00:03:58,050 saw them working. 97 00:03:58,050 --> 00:04:00,210 But there are also 10,000 people 98 00:04:00,210 --> 00:04:02,250 that have probably never been in a pit 99 00:04:02,250 --> 00:04:04,920 with you working on something there have probably, 100 00:04:04,920 --> 00:04:08,130 you've probably given a town hall 10 times, 101 00:04:08,130 --> 00:04:12,030 but they have a manager from another company talk 102 00:04:12,030 --> 00:04:13,920 to them 1,000 times. 103 00:04:13,920 --> 00:04:16,170 And founders often say the frustration 104 00:04:16,170 --> 00:04:18,090 is my core team gets it, 105 00:04:18,090 --> 00:04:20,670 but when I look at the edges of the business, I start 106 00:04:20,670 --> 00:04:23,073 to see those toxic people entering. 107 00:04:24,139 --> 00:04:25,320 I start to see the bureaucrats coming. 108 00:04:25,320 --> 00:04:27,570 So how do you make sure that's not happening? 109 00:04:27,570 --> 00:04:29,310 - [Marcos] It's many, many, many things. 110 00:04:29,310 --> 00:04:30,990 This culture of trying 111 00:04:30,990 --> 00:04:34,410 to act like an elite sports team is key in the sense 112 00:04:34,410 --> 00:04:37,950 that oftentimes you keep some people 113 00:04:37,950 --> 00:04:40,560 because they have the culture, 114 00:04:40,560 --> 00:04:42,450 but maybe they're not performing. 115 00:04:42,450 --> 00:04:43,283 You know what? 116 00:04:43,283 --> 00:04:44,846 Sorry. 117 00:04:44,846 --> 00:04:45,900 Performances has to be there. 118 00:04:45,900 --> 00:04:48,330 Maybe if you have the culture will find you 119 00:04:48,330 --> 00:04:49,500 a different position. 120 00:04:49,500 --> 00:04:52,500 Maybe you know, you, you're no longer number nine, 121 00:04:52,500 --> 00:04:53,640 you won't score anymore. 122 00:04:53,640 --> 00:04:57,180 But you know what? You will be the assistant to the coach 123 00:04:57,180 --> 00:04:59,820 or you will be in the manager's office 124 00:04:59,820 --> 00:05:01,620 or you will be helping us sell more tickets 125 00:05:01,620 --> 00:05:03,750 or you will be helping us, you know, making sure 126 00:05:03,750 --> 00:05:05,880 that the stadium is in good shape. 127 00:05:05,880 --> 00:05:09,330 But we need in the field, the people who are performing. 128 00:05:09,330 --> 00:05:10,650 Now, maybe you have in the field someone 129 00:05:10,650 --> 00:05:13,110 that is a great performer, but he's a pain in the ass 130 00:05:13,110 --> 00:05:16,620 and he's toxic and he's making great scores 131 00:05:16,620 --> 00:05:18,750 and we're winning many games, 132 00:05:18,750 --> 00:05:21,540 but we're not going gonna win the championship with this guy 133 00:05:21,540 --> 00:05:25,080 because he's a, he's toxic or she's toxic, 134 00:05:25,080 --> 00:05:28,830 and sometimes you need to take some decisions that are tough 135 00:05:28,830 --> 00:05:30,660 because you know, this guy is really good 136 00:05:30,660 --> 00:05:32,790 and he's scoring, you know, 137 00:05:32,790 --> 00:05:35,940 but we won the game, which was a great game, 138 00:05:35,940 --> 00:05:37,050 but we lost the championship 139 00:05:37,050 --> 00:05:38,430 because then we lost against a team 140 00:05:38,430 --> 00:05:42,330 that was inferior to us, but this guy wasn't motivated 141 00:05:42,330 --> 00:05:44,940 because, you know, it wasn't an important game or, 142 00:05:44,940 --> 00:05:48,000 and you know what, the unimportant games, the points 143 00:05:48,000 --> 00:05:50,550 of those unimportant games are as valuable as the point 144 00:05:50,550 --> 00:05:52,047 of the classic, you know? 145 00:05:52,047 --> 00:05:54,269 And so you need someone who performs 146 00:05:54,269 --> 00:05:56,640 when they have the spotlight, 147 00:05:56,640 --> 00:06:00,270 but also have to perform when they don't have the spotlight. 148 00:06:00,270 --> 00:06:02,267 So all these things, you know, 149 00:06:02,267 --> 00:06:05,460 in this 26 years there's been moments of quiet enjoyment. 150 00:06:05,460 --> 00:06:09,290 You know, since we IPO'd in 2007 all the way 151 00:06:09,290 --> 00:06:12,450 to the moment when Amazon launched in Latin America, 152 00:06:12,450 --> 00:06:16,740 those were six years of continuous growth and scaling 153 00:06:16,740 --> 00:06:18,750 and we had no competition. 154 00:06:18,750 --> 00:06:21,540 But then you have to know that this is a calm 155 00:06:21,540 --> 00:06:24,490 before the storm because the storm always is going to come. 156 00:06:25,770 --> 00:06:27,030 - God, I love this. 157 00:06:27,030 --> 00:06:29,640 The storm is always gonna come. 158 00:06:29,640 --> 00:06:33,420 Marcos's genius, he built an all-weather company. 159 00:06:33,420 --> 00:06:34,950 Of course MELI's growth story 160 00:06:34,950 --> 00:06:36,543 is an exception, not the rule. 161 00:06:37,651 --> 00:06:40,170 They thrived in the calm and they thrived in the storm. 162 00:06:40,170 --> 00:06:43,860 For the rest of us mere mortals, growth is bloody hard. 163 00:06:43,860 --> 00:06:44,820 Think about it. 164 00:06:44,820 --> 00:06:48,390 It means every customer from last year comes back 165 00:06:48,390 --> 00:06:51,600 buying a little more and bringing a few friends. 166 00:06:51,600 --> 00:06:55,770 We've got to win millions and millions of times. 167 00:06:55,770 --> 00:06:59,220 So what is it that lets some companies grow year 168 00:06:59,220 --> 00:07:01,680 after year while others stumble? 169 00:07:01,680 --> 00:07:03,900 To find out, we turned to someone who spent 170 00:07:03,900 --> 00:07:05,670 his whole career chasing 171 00:07:05,670 --> 00:07:08,280 that single answer, Chris Zook. 172 00:07:08,280 --> 00:07:10,710 And I've spent my whole career being his mentee, 173 00:07:10,710 --> 00:07:13,110 his bad carry, his lackey, his fanboy. 174 00:07:13,110 --> 00:07:15,060 I'm proud of every title you give me, as long 175 00:07:15,060 --> 00:07:16,710 as Chris Zook's name's up front. 176 00:07:16,710 --> 00:07:19,470 He actually saved me from being fired in 1988 177 00:07:19,470 --> 00:07:21,960 when I was a useless summer associate at Bain. 178 00:07:21,960 --> 00:07:24,570 More than once since then, he's reached across the Atlantic 179 00:07:24,570 --> 00:07:26,580 to pick me up and set me straight. 180 00:07:26,580 --> 00:07:29,520 I'll tell you, everyone needs a Chris Zook in their life. 181 00:07:29,520 --> 00:07:32,340 Luckily I've had mine for four decades. 182 00:07:32,340 --> 00:07:33,900 So who is Chris Zook? 183 00:07:33,900 --> 00:07:36,150 Chris is an Advisory Partner at Bain & Company 184 00:07:36,150 --> 00:07:39,270 and one of the world's leading strategy thinkers 185 00:07:39,270 --> 00:07:40,530 and my co-author. 186 00:07:40,530 --> 00:07:43,680 Look, I'm shamelessly claiming that co-author title, 187 00:07:43,680 --> 00:07:47,070 but the truth is Chris has written five books on strategy 188 00:07:47,070 --> 00:07:49,380 and I've been a big idea contributor. 189 00:07:49,380 --> 00:07:50,760 The books are his. 190 00:07:50,760 --> 00:07:53,370 He gave me a width on "Profit From The Core" 191 00:07:53,370 --> 00:07:54,810 and two co-author credits 192 00:07:54,810 --> 00:07:57,480 on "Repeatability and "The Founder's Mentality". 193 00:07:57,480 --> 00:07:59,100 That's a generous mentor. 194 00:07:59,100 --> 00:08:01,050 His body of work, which is five books 195 00:08:01,050 --> 00:08:04,680 and dozens of articles, is a master study into the patterns 196 00:08:04,680 --> 00:08:07,320 of growth, what drives it, what kills it, 197 00:08:07,320 --> 00:08:08,437 and why ultimately 198 00:08:08,437 --> 00:08:10,920 "The Founder's Mentality" matters so much. 199 00:08:10,920 --> 00:08:13,620 And since I've known him, Chris has been obsessed 200 00:08:13,620 --> 00:08:17,370 with a single question, what are the secrets 201 00:08:17,370 --> 00:08:20,220 to sustainable profitable growth? 202 00:08:20,220 --> 00:08:23,733 So first, he takes us back to how that journey began. 203 00:08:25,260 --> 00:08:27,810 Chris, I would love to just hear you start 204 00:08:27,810 --> 00:08:30,450 with your own journey on strategy. 205 00:08:30,450 --> 00:08:34,170 For me it kind of, I think probably the first phase ends 206 00:08:34,170 --> 00:08:37,380 with "Profit From The Core", but you probably have a journey 207 00:08:37,380 --> 00:08:38,850 that started long before writing that. 208 00:08:38,850 --> 00:08:42,540 But just tell me how you thought about strategy at the time 209 00:08:42,540 --> 00:08:44,370 you wrote the "Profit From The Core". 210 00:08:44,370 --> 00:08:47,280 - Well, you know, I was lucky to join Bain & Company 211 00:08:47,280 --> 00:08:48,810 when it had 70 people, 212 00:08:48,810 --> 00:08:51,120 and it was part of the leadership team 213 00:08:51,120 --> 00:08:54,150 that in a great growth story of its own, grew it now 214 00:08:54,150 --> 00:08:55,920 to something like 18,000 215 00:08:55,920 --> 00:08:59,477 with only really one bump in in the road when the founders 216 00:08:59,477 --> 00:09:02,910 had a messy transition to the next generation. 217 00:09:02,910 --> 00:09:06,828 And so in a way, as an older guy looking back on my life, 218 00:09:06,828 --> 00:09:10,740 I realized if there was one continuous theme, 219 00:09:10,740 --> 00:09:13,620 it is about the topic of how to grow a business. 220 00:09:13,620 --> 00:09:16,800 And we were very lucky to have a focus 221 00:09:16,800 --> 00:09:20,730 on what really are the lessons learned 222 00:09:20,730 --> 00:09:23,460 and the laws of gravity 223 00:09:23,460 --> 00:09:27,780 and the microeconomics of how trying to find your next wave 224 00:09:27,780 --> 00:09:29,430 of profitable growth, 225 00:09:29,430 --> 00:09:32,610 and realizing that that's really what we decided 226 00:09:32,610 --> 00:09:36,480 to focus the strategy practice on, focus the building 227 00:09:36,480 --> 00:09:39,990 of tools on, ultimately focus a series of five books 228 00:09:39,990 --> 00:09:44,460 and 30 articles on, and that actually took up the rest 229 00:09:44,460 --> 00:09:45,293 of my life. 230 00:09:45,293 --> 00:09:47,070 - I think it's a journey of chapters. 231 00:09:47,070 --> 00:09:50,520 And just let's talk a bit about the beginning chapter. 232 00:09:50,520 --> 00:09:54,810 You know, so when you first said, a asked the question 233 00:09:54,810 --> 00:09:58,350 of yourself and answered it, what drives sustainable growth? 234 00:09:58,350 --> 00:09:59,670 What, what was the answer? 235 00:09:59,670 --> 00:10:02,100 - You know, I think it was a very interesting period 236 00:10:02,100 --> 00:10:04,650 of time in the history of business in the world 237 00:10:04,650 --> 00:10:07,950 because it was just before the internet bubble. 238 00:10:07,950 --> 00:10:11,100 The internet was obviously on the rise. 239 00:10:11,100 --> 00:10:13,470 We felt that it was a time when people were using 240 00:10:13,470 --> 00:10:16,920 their gut instincts too much and that there were no tools. 241 00:10:16,920 --> 00:10:18,240 So we did something 242 00:10:18,240 --> 00:10:21,930 that at the now would seem pedestrian, 243 00:10:21,930 --> 00:10:25,560 but at the time was actually quite unique. 244 00:10:25,560 --> 00:10:28,290 We created a database of all the partners 245 00:10:28,290 --> 00:10:31,020 of all the public companies in the world for 20 years. 246 00:10:31,020 --> 00:10:33,930 No one had ever done that with full financials. 247 00:10:33,930 --> 00:10:37,170 And we've used it as the actuarial tables of business 248 00:10:37,170 --> 00:10:39,090 to ask questions such as what percent 249 00:10:39,090 --> 00:10:42,090 of companies actually do achieve 10 years 250 00:10:42,090 --> 00:10:44,940 of profitable growth, earning their cost of capital, 251 00:10:44,940 --> 00:10:48,270 outgrowing their industry and maintaining 252 00:10:48,270 --> 00:10:49,980 or growing their margins? 253 00:10:49,980 --> 00:10:51,720 And we found that though every company 254 00:10:51,720 --> 00:10:53,070 in the world aspired to that. 255 00:10:53,070 --> 00:10:55,440 Only one in 10 actually achieved it. 256 00:10:55,440 --> 00:10:57,780 So then we began drilling down further 257 00:10:57,780 --> 00:11:01,080 and we found about three more insights in the data 258 00:11:01,080 --> 00:11:05,280 that all came together as the sort 259 00:11:05,280 --> 00:11:07,560 of epicenter, intellectual epicenter 260 00:11:07,560 --> 00:11:09,660 or empirical backbone 261 00:11:09,660 --> 00:11:11,520 for what became "Profit From The Core". 262 00:11:11,520 --> 00:11:13,550 Number one, more than 80% 263 00:11:13,550 --> 00:11:16,500 of the variation in company's ability 264 00:11:16,500 --> 00:11:19,470 to achieve profitable growth was not the choice 265 00:11:19,470 --> 00:11:21,840 of the industry they happened to be in. 266 00:11:21,840 --> 00:11:24,360 That was the cold truth of hot markets. 267 00:11:24,360 --> 00:11:26,880 What we found was that more than 80% of the variation 268 00:11:26,880 --> 00:11:29,280 was among competitors in the same industry. 269 00:11:29,280 --> 00:11:31,740 Number two, there were no bad industries. 270 00:11:31,740 --> 00:11:34,560 You could make a lot of money in airlines, 271 00:11:34,560 --> 00:11:36,870 which Southwest was doing, 272 00:11:36,870 --> 00:11:41,520 or in package delivery, which UPS was beginning to do, 273 00:11:41,520 --> 00:11:44,610 or in rental cars, which Enterprise was doing, 274 00:11:44,610 --> 00:11:48,330 as you could if you were in a growth market. 275 00:11:48,330 --> 00:11:50,490 The key was becoming the best 276 00:11:50,490 --> 00:11:52,950 and achieving leadership economics. 277 00:11:52,950 --> 00:11:55,500 And then we looked at the profile of those companies 278 00:11:55,500 --> 00:11:57,597 that did achieve 10 or 15 years (clears throat) 279 00:11:57,597 --> 00:12:00,870 and we found that about 85 to 90% 280 00:12:00,870 --> 00:12:04,380 of the value growth in all of those companies 281 00:12:04,380 --> 00:12:07,170 that did achieve was a function of one 282 00:12:07,170 --> 00:12:10,500 or two very strong, dominant 283 00:12:10,500 --> 00:12:13,050 or leading core businesses. 284 00:12:13,050 --> 00:12:15,900 And it was less a function of diversification. 285 00:12:15,900 --> 00:12:18,645 In fact, we found that two thirds 286 00:12:18,645 --> 00:12:22,110 of the main strategy studies we did costing $1 million 287 00:12:22,110 --> 00:12:25,890 at the time or more had one common type 288 00:12:25,890 --> 00:12:27,600 of insight, which was amazing 289 00:12:27,600 --> 00:12:28,980 'cause you know, you could have said, 290 00:12:28,980 --> 00:12:31,290 well, you're gonna discover new hot markets, 291 00:12:31,290 --> 00:12:33,990 you're gonna find acquisitions to double your industry. 292 00:12:33,990 --> 00:12:36,690 You're gonna use it for international? 293 00:12:36,690 --> 00:12:37,590 No. 294 00:12:37,590 --> 00:12:40,650 What we found was that nearly 70% 295 00:12:40,650 --> 00:12:44,910 of the main insights from these huge studies of strategy 296 00:12:44,910 --> 00:12:48,377 was that more potential existed in the core of the core. 297 00:12:48,377 --> 00:12:52,113 That the core of the core had been underappreciated. 298 00:12:53,100 --> 00:12:56,520 - Look, let's take ourselves back because context matters. 299 00:12:56,520 --> 00:12:57,840 This was the middle 300 00:12:57,840 --> 00:13:01,950 of the dot-com boom when almost every CEO 301 00:13:01,950 --> 00:13:04,980 was chasing greener digital pastures. 302 00:13:04,980 --> 00:13:07,147 And Chris's message was profound. 303 00:13:07,147 --> 00:13:08,310 "Sustainable growth", 304 00:13:08,310 --> 00:13:11,460 he said, "Demands that you define your core business, 305 00:13:11,460 --> 00:13:12,990 drive it to full potential 306 00:13:12,990 --> 00:13:16,170 and from full potential, get leadership economics." 307 00:13:16,170 --> 00:13:17,497 And his warning was clear, 308 00:13:17,497 --> 00:13:19,890 "All your fancy growth strategies, 309 00:13:19,890 --> 00:13:22,560 they're distracting you from what you do best, 310 00:13:22,560 --> 00:13:25,890 which is the hard execution in the core business." 311 00:13:25,890 --> 00:13:28,170 I feel like we're exactly here again 312 00:13:28,170 --> 00:13:32,250 with all the discussion about AI, because defining our core 313 00:13:32,250 --> 00:13:34,500 and a turbulent market is tough. 314 00:13:34,500 --> 00:13:36,420 Market boundaries are shifting, 315 00:13:36,420 --> 00:13:38,580 business definition is evolving, 316 00:13:38,580 --> 00:13:40,470 new competitors are emerging, 317 00:13:40,470 --> 00:13:43,440 often expanding from their core business 318 00:13:43,440 --> 00:13:45,420 into what you thought was your market. 319 00:13:45,420 --> 00:13:48,390 So the real question you have to ask yourself in the world 320 00:13:48,390 --> 00:13:51,480 of AI is will today's core still be right 321 00:13:51,480 --> 00:13:53,190 for our customers tomorrow? 322 00:13:53,190 --> 00:13:55,050 That strategy 2025, 323 00:13:55,050 --> 00:13:57,300 and that's exactly the challenge 324 00:13:57,300 --> 00:13:59,700 that Marcos was facing at MELI. 325 00:13:59,700 --> 00:14:03,300 As success and e-commerce grew, he had to ask, 326 00:14:03,300 --> 00:14:06,000 do we double down on that core? 327 00:14:06,000 --> 00:14:08,550 Or as market definitions are shifting, 328 00:14:08,550 --> 00:14:10,890 do we move into financial services? 329 00:14:10,890 --> 00:14:13,920 And the question was, where are our customers going, 330 00:14:13,920 --> 00:14:16,800 and where must we go to meet their needs? 331 00:14:16,800 --> 00:14:19,320 Do we deliver flawless execution 332 00:14:19,320 --> 00:14:21,600 of known routines in the core business, 333 00:14:21,600 --> 00:14:23,760 or do we develop, i.e. go 334 00:14:23,760 --> 00:14:27,510 after the new businesses that keep us relevant for tomorrow? 335 00:14:27,510 --> 00:14:31,607 Well, like other great CEOs, Marcos understood, 336 00:14:31,607 --> 00:14:34,200 this is a false choice. 337 00:14:34,200 --> 00:14:36,330 You've got to do both. 338 00:14:36,330 --> 00:14:40,830 Deliver, optimizing, develop, staying relevant. 339 00:14:40,830 --> 00:14:42,003 Here's Marcos. 340 00:14:43,110 --> 00:14:44,490 So on one hand you're trying 341 00:14:44,490 --> 00:14:47,850 to run a complex business, which means professionals come in 342 00:14:47,850 --> 00:14:49,230 and begin to put in measures 343 00:14:49,230 --> 00:14:53,130 and do things in its relentless execution of known routines, 344 00:14:53,130 --> 00:14:55,245 and on the other hand, you want 345 00:14:55,245 --> 00:14:56,520 to constantly disrupt yourself. 346 00:14:56,520 --> 00:14:59,850 And oftentimes the, you know what happens 347 00:14:59,850 --> 00:15:03,510 is that running motion, the status quo motion, 348 00:15:03,510 --> 00:15:06,390 the keep things static, begins to take over 349 00:15:06,390 --> 00:15:10,020 the founder impulse. 350 00:15:10,020 --> 00:15:13,350 And you seem to have navigated both of those well. 351 00:15:13,350 --> 00:15:15,930 How did you handle those two motions? 352 00:15:15,930 --> 00:15:18,300 - [Marcos] What happens many times is you get so focused 353 00:15:18,300 --> 00:15:19,800 in optimizing something, 354 00:15:19,800 --> 00:15:22,920 but we say we're maximizing the minimum. 355 00:15:22,920 --> 00:15:25,350 It's like, yeah, we're optimizing this process, 356 00:15:25,350 --> 00:15:27,510 but all this processes irrelevant right now. 357 00:15:27,510 --> 00:15:29,130 We're just talking about AI. 358 00:15:29,130 --> 00:15:32,160 We have 20,000 developers, this is the first year ever 359 00:15:32,160 --> 00:15:34,080 that we won't grow our developers. 360 00:15:34,080 --> 00:15:35,400 And it's highly likely that five years 361 00:15:35,400 --> 00:15:36,960 we might have 10,000 developers, 362 00:15:36,960 --> 00:15:39,900 not because we fired them, but we're not hiring anyone. 363 00:15:39,900 --> 00:15:42,000 10 years ago, I would've told anyone, you need to learn 364 00:15:42,000 --> 00:15:42,873 how to develop. 365 00:15:43,710 --> 00:15:46,110 Today I say, you need to know mathematics, you need 366 00:15:46,110 --> 00:15:50,190 to understand like the basics of thinking and numbers, 367 00:15:50,190 --> 00:15:52,200 but you don't need to code. 368 00:15:52,200 --> 00:15:56,790 On one side, we're optimizing all these things with AI. 369 00:15:56,790 --> 00:15:58,620 And another thing we're thinking, you know, 370 00:15:58,620 --> 00:16:00,210 maybe all this is gonna be coming irrelevant. 371 00:16:00,210 --> 00:16:02,285 We have another group saying, you know, 372 00:16:02,285 --> 00:16:03,118 it's gonna be an agentic world. 373 00:16:03,118 --> 00:16:05,095 And then we have a group in the middle 374 00:16:05,095 --> 00:16:06,360 that is gonna optimize the experience. 375 00:16:06,360 --> 00:16:08,400 And what I was telling them about the agent 376 00:16:08,400 --> 00:16:11,200 being your personal banker, I am on one hand 377 00:16:12,270 --> 00:16:15,270 still in my role as co-CEO thinking, yo, 378 00:16:15,270 --> 00:16:17,177 how we go from, you know, 379 00:16:17,177 --> 00:16:19,080 20,000 developers up to scaling, scaling, 380 00:16:19,080 --> 00:16:20,250 increasing our margins, you know, 381 00:16:20,250 --> 00:16:22,770 optimizing our minimum all the time. 382 00:16:22,770 --> 00:16:25,260 And I'm also thinking it's highly likely 383 00:16:25,260 --> 00:16:27,570 that this is gonna be irrelevant. 384 00:16:27,570 --> 00:16:29,940 You know, what happens if ChatGPT partners 385 00:16:29,940 --> 00:16:32,165 with I don't know what, 386 00:16:32,165 --> 00:16:34,350 and all of a sudden our app doesn't show up anymore 387 00:16:34,350 --> 00:16:37,590 and I actually Apple and the iPhone become irrelevant 388 00:16:37,590 --> 00:16:40,680 because now it's gonna be a new device that, you know, 389 00:16:40,680 --> 00:16:41,970 OpenAI has partnered with Jony Ive 390 00:16:41,970 --> 00:16:44,850 and they're doing a new thing that you are gonna talk to it 391 00:16:44,850 --> 00:16:47,430 and maybe our app is gonna become irrelevant. 392 00:16:47,430 --> 00:16:49,680 So we're working on all those things. 393 00:16:49,680 --> 00:16:51,840 - [Jimmy] What happens in organizations that fail? 394 00:16:51,840 --> 00:16:54,420 Is the group that are maximizing the minimum 395 00:16:54,420 --> 00:16:56,700 become the defenders of that status quo? 396 00:16:56,700 --> 00:16:59,280 That they start to say, look at it, it's gotta be this way, 397 00:16:59,280 --> 00:17:01,380 and if it's not this way, I quit? 398 00:17:01,380 --> 00:17:04,050 And that other team that's trying to change them, 399 00:17:04,050 --> 00:17:05,730 they become the enemy? 400 00:17:05,730 --> 00:17:07,757 And you've managed somehow to say. 401 00:17:07,757 --> 00:17:10,123 - [Marcos] It has to be the same group 402 00:17:10,123 --> 00:17:10,956 that does both things. 403 00:17:10,956 --> 00:17:13,260 You have to have in the leadership team, 404 00:17:13,260 --> 00:17:16,440 they need to understand that you need to optimize a minimum, 405 00:17:16,440 --> 00:17:18,900 you need to scale, you need to improve margins, 406 00:17:18,900 --> 00:17:23,170 actually to use that money to innovate 407 00:17:24,090 --> 00:17:25,680 and disrupt yourself. 408 00:17:25,680 --> 00:17:27,660 - [Jimmy] And you have to have a culture that makes sure 409 00:17:27,660 --> 00:17:29,910 that the guys in charge of maximizing the minimum know 410 00:17:29,910 --> 00:17:32,670 they're gonna still have roles even if that goes away. 411 00:17:32,670 --> 00:17:34,260 - [Marcos] Yeah, it's the same guy, the same guy 412 00:17:34,260 --> 00:17:36,090 or the same team that is saying, Hey, we need 413 00:17:36,090 --> 00:17:38,460 to optimize these things and we need to do all these things, 414 00:17:38,460 --> 00:17:40,020 otherwise we won't survive. 415 00:17:40,020 --> 00:17:43,680 I think that to be honest, competition is so healthy. 416 00:17:43,680 --> 00:17:47,130 You know, when you have a powerful competitor, 417 00:17:47,130 --> 00:17:49,710 it avoids these internal battles. 418 00:17:49,710 --> 00:17:52,290 It's doesn't give you the time for that. 419 00:17:52,290 --> 00:17:53,550 It's a (indistinct) 420 00:17:53,550 --> 00:17:55,500 If you, if you, if you spend too much time 421 00:17:55,500 --> 00:17:56,333 with that, you die. 422 00:17:56,333 --> 00:17:57,930 It's as simple as that. 423 00:17:57,930 --> 00:17:59,220 It's so healthy. 424 00:17:59,220 --> 00:18:01,560 It's incredible how competition has made us a better... 425 00:18:01,560 --> 00:18:04,680 A substantially better company. 426 00:18:04,680 --> 00:18:05,790 There's a lot of thought 427 00:18:05,790 --> 00:18:08,670 and a lot of analysis behind what we're doing, 428 00:18:08,670 --> 00:18:10,830 and I think it's going to go work great. 429 00:18:10,830 --> 00:18:12,240 I think it's gonna be an example. 430 00:18:12,240 --> 00:18:15,360 And I know it's gonna depend on Ari 431 00:18:15,360 --> 00:18:17,110 because whether you like it 432 00:18:18,027 --> 00:18:20,010 or not, a lot depends sometimes on a person. 433 00:18:20,010 --> 00:18:22,890 We poached a guy from another company, which we never do. 434 00:18:22,890 --> 00:18:26,130 I got into a fight with (indistinct) who someone, 435 00:18:26,130 --> 00:18:29,130 a founder I like a lot, and kind, 436 00:18:29,130 --> 00:18:30,750 we had a kind of a gentleman's agreement 437 00:18:30,750 --> 00:18:32,100 we won't poach from you guys, 438 00:18:32,100 --> 00:18:34,470 and we said, this guy, this guy, we need him. 439 00:18:34,470 --> 00:18:37,470 From the start, we saw this guy as this guy 440 00:18:37,470 --> 00:18:39,090 is a different guy. 441 00:18:39,090 --> 00:18:42,180 And the reason why I feel confident 442 00:18:42,180 --> 00:18:44,280 about what we're doing is because I think we have 443 00:18:44,280 --> 00:18:45,153 the right person, 444 00:18:46,770 --> 00:18:50,860 and that he's gonna be able to decodify all these things 445 00:18:52,170 --> 00:18:54,150 about which is a moment 446 00:18:54,150 --> 00:18:56,850 and what things are important for this moment. 447 00:18:56,850 --> 00:18:57,870 It's like raising kids. 448 00:18:57,870 --> 00:19:00,180 You know, I have two boys and a girl. 449 00:19:00,180 --> 00:19:02,220 The two boys are the... 450 00:19:02,220 --> 00:19:06,660 You cannot understand how two children from the same parents 451 00:19:06,660 --> 00:19:08,550 born in the same socioeconomic conditions 452 00:19:08,550 --> 00:19:09,690 can be so different. 453 00:19:09,690 --> 00:19:12,000 They are so different. 454 00:19:12,000 --> 00:19:16,530 So I cannot say the same things to them at the same time. 455 00:19:16,530 --> 00:19:19,920 You know, one guy, I, I don't need to tell him, you know, 456 00:19:19,920 --> 00:19:22,034 you need to do this, this and that, 457 00:19:22,034 --> 00:19:23,600 because he's like a machine. 458 00:19:23,600 --> 00:19:24,775 He's gonna wake up in the morning, go to study. 459 00:19:24,775 --> 00:19:25,770 I need to tell him, Hey, you know, relax, 460 00:19:25,770 --> 00:19:27,000 you should go out with your friends. 461 00:19:27,000 --> 00:19:28,770 You should do some exercise, it helps you. 462 00:19:28,770 --> 00:19:30,780 And the guy is, hey, you need 463 00:19:30,780 --> 00:19:31,740 to add some structure. 464 00:19:31,740 --> 00:19:33,570 With kids, it's love and limits, 465 00:19:33,570 --> 00:19:34,890 but it's important 466 00:19:34,890 --> 00:19:37,080 to give them love at the right time and limits. 467 00:19:37,080 --> 00:19:38,490 Even when the guy needs love, 468 00:19:38,490 --> 00:19:42,537 you give you give him punishments or maybe it's, you know, 469 00:19:42,537 --> 00:19:44,697 and you need to understand those things. 470 00:19:44,697 --> 00:19:47,340 And with the company it's the same, I think. 471 00:19:47,340 --> 00:19:49,920 - [Jimmy] So you started the interview, you know, 472 00:19:49,920 --> 00:19:51,990 with a discussion of eBay 473 00:19:51,990 --> 00:19:54,360 and whether they were the right partner going forward, 474 00:19:54,360 --> 00:19:58,320 and one of the things that we are beginning to use a word. 475 00:19:58,320 --> 00:20:00,180 - [Marcos] The culture of Amazon versus a culture 476 00:20:00,180 --> 00:20:01,740 of eBay, it's incredible. 477 00:20:01,740 --> 00:20:04,770 I mean, eBay had everything to win. 478 00:20:04,770 --> 00:20:06,480 eBay made fun of Amazon. 479 00:20:06,480 --> 00:20:08,281 Like when we were partnering 480 00:20:08,281 --> 00:20:11,250 with eBay in 2001, eBay's media category, which was books, 481 00:20:11,250 --> 00:20:14,400 musics and DVDs, books, CDs, 482 00:20:14,400 --> 00:20:16,713 and DVDs was bigger than all of Amazon, 483 00:20:17,670 --> 00:20:19,020 just its media category. 484 00:20:19,020 --> 00:20:21,960 They were, they made fun of Amazon. 485 00:20:21,960 --> 00:20:25,710 By 2006 when our best practice deals had expired, 486 00:20:25,710 --> 00:20:27,150 it was like they were in panic mode 487 00:20:27,150 --> 00:20:28,530 and it was already too late. 488 00:20:28,530 --> 00:20:31,410 We always say how much we learned of eBay. 489 00:20:31,410 --> 00:20:33,750 The first three, three years, it was everything, 490 00:20:33,750 --> 00:20:35,370 because what happened a lot is they had 491 00:20:35,370 --> 00:20:38,010 all these discussions about all these ideas and we were all, 492 00:20:38,010 --> 00:20:38,940 it's a great idea. 493 00:20:38,940 --> 00:20:41,580 And then we were back and a year later we had implemented, 494 00:20:41,580 --> 00:20:43,380 I don't know, three out of the 10 ideas 495 00:20:43,380 --> 00:20:45,060 and they hadn't implemented one. 496 00:20:45,060 --> 00:20:46,770 It's not that they didn't know what they had to do, 497 00:20:46,770 --> 00:20:48,630 they couldn't do it or they wouldn't do it. 498 00:20:48,630 --> 00:20:51,000 And we were taking their ideas 499 00:20:51,000 --> 00:20:52,020 and then next year, Hey, 500 00:20:52,020 --> 00:20:53,820 you guys did this, you guys are amazing. 501 00:20:53,820 --> 00:20:56,580 No, no, we just did what you guys told us. 502 00:20:56,580 --> 00:20:58,530 You know, we just executed three 503 00:20:58,530 --> 00:21:00,630 of the 10 ideas that you said. 504 00:21:00,630 --> 00:21:03,150 And then the last two years it was, we need 505 00:21:03,150 --> 00:21:05,460 to make sure we don't do what eBay is doing. 506 00:21:05,460 --> 00:21:07,710 And I remember one thing that happened 507 00:21:07,710 --> 00:21:10,050 is at a point in time when, when Google starts 508 00:21:10,050 --> 00:21:12,630 to, you know, become prominent, 509 00:21:12,630 --> 00:21:15,660 eBay's listings were all sorted using time remaining 510 00:21:15,660 --> 00:21:17,160 because they were an auctions. 511 00:21:17,160 --> 00:21:20,490 We were also auctions, but we took us like 10 days 512 00:21:20,490 --> 00:21:23,040 to pivot away from the time remaining algorithm 513 00:21:23,040 --> 00:21:24,660 to a relevant space algorithm. 514 00:21:24,660 --> 00:21:28,020 We said, you know, the more listings we have, the better. 515 00:21:28,020 --> 00:21:30,240 And even was no, no, no, everybody 516 00:21:30,240 --> 00:21:31,980 has to have at some point in time 517 00:21:31,980 --> 00:21:34,020 the first listing, it was like crazy. 518 00:21:34,020 --> 00:21:35,490 And they wouldn't change that. 519 00:21:35,490 --> 00:21:38,640 It took them years to change the sorting algorithm 520 00:21:38,640 --> 00:21:39,900 or the search. 521 00:21:39,900 --> 00:21:42,307 It took us 10 days to change that. 522 00:21:42,307 --> 00:21:44,880 - Marcos is proud and paranoid. 523 00:21:44,880 --> 00:21:46,710 He's built a brilliant foundation 524 00:21:46,710 --> 00:21:48,600 for the next generation of leaders, 525 00:21:48,600 --> 00:21:50,760 and he has seen the foundations 526 00:21:50,760 --> 00:21:53,280 of other once great companies crumble. 527 00:21:53,280 --> 00:21:55,710 Companies fail for lack of focus on the core. 528 00:21:55,710 --> 00:21:59,250 And companies fail because they optimize the core too much 529 00:21:59,250 --> 00:22:02,580 and became irrelevant as market shifted. 530 00:22:02,580 --> 00:22:05,550 Marcos cares about the outer game of strategy. 531 00:22:05,550 --> 00:22:08,250 He's obsessed with the world around him, 532 00:22:08,250 --> 00:22:12,570 but he cares just as much about the inner game, culture, 533 00:22:12,570 --> 00:22:16,110 leadership, turbulence, competitors. 534 00:22:16,110 --> 00:22:18,720 And Chris and I have spent decades understanding 535 00:22:18,720 --> 00:22:21,390 how great CEOs master both. 536 00:22:21,390 --> 00:22:23,640 If "Profit From The Core" is a poster child 537 00:22:23,640 --> 00:22:24,997 for the outer game, 538 00:22:24,997 --> 00:22:28,023 "The Founder's Mentality" is the inner game. 539 00:22:29,587 --> 00:22:32,163 - "Profit From The Core" came out. 540 00:22:33,090 --> 00:22:34,980 We spoke about it around the world. 541 00:22:34,980 --> 00:22:39,980 We had great examples, data, tools to mind full potential. 542 00:22:40,170 --> 00:22:43,110 It became quite solid. 543 00:22:43,110 --> 00:22:44,610 But people were asking questions 544 00:22:44,610 --> 00:22:48,090 about, well I have extra cash and I'm near a lot 545 00:22:48,090 --> 00:22:49,560 of growth markets. 546 00:22:49,560 --> 00:22:54,150 How do I sort through those that are most likely to succeed? 547 00:22:54,150 --> 00:22:59,010 Surely it isn't all just about taking a single business 548 00:22:59,010 --> 00:23:01,170 and maintaining its homogeneity (clears throat) 549 00:23:01,170 --> 00:23:03,180 which of course it wasn't. 550 00:23:03,180 --> 00:23:06,600 So the second wave of work was also quite analytic. 551 00:23:06,600 --> 00:23:08,040 It's said, what's the science 552 00:23:08,040 --> 00:23:09,930 of moving into adjacent areas? 553 00:23:09,930 --> 00:23:13,323 And so we then did another wave of work 554 00:23:13,323 --> 00:23:17,250 that we called unstoppable, which was about the focus, 555 00:23:17,250 --> 00:23:19,530 expand, redefined cycle. 556 00:23:19,530 --> 00:23:22,410 That there was ultimately a point in most businesses 557 00:23:22,410 --> 00:23:24,660 when redefinition very often happened. 558 00:23:24,660 --> 00:23:27,540 And there are many iconic examples. 559 00:23:27,540 --> 00:23:30,780 IBM was a hardware company that went into services 560 00:23:30,780 --> 00:23:34,830 and information that rejuvenated the hardware business. 561 00:23:34,830 --> 00:23:39,210 And then that led to more questions about, yes, 562 00:23:39,210 --> 00:23:42,510 but isn't, isn't there more to, to the strategy? 563 00:23:42,510 --> 00:23:45,420 And so we began looking more closely at those companies 564 00:23:45,420 --> 00:23:49,440 that over 15 or even 20 years had sustained growth. 565 00:23:49,440 --> 00:23:52,050 And we found something called a repeatable formula. 566 00:23:52,050 --> 00:23:54,540 Companies like McDonald's, Tetra Pack 567 00:23:54,540 --> 00:23:56,220 that grew into adjacencies, 568 00:23:56,220 --> 00:23:59,610 but in addition to that had a repeatable model, 569 00:23:59,610 --> 00:24:02,310 that they used to focus their innovation. 570 00:24:02,310 --> 00:24:05,940 It wasn't about robotically doing the same thing mindlessly 571 00:24:05,940 --> 00:24:07,500 in a changing world. 572 00:24:07,500 --> 00:24:08,910 No, it was about knowing 573 00:24:08,910 --> 00:24:10,740 that there are certain things you're very good at. 574 00:24:10,740 --> 00:24:12,840 Then the questions became a little different. 575 00:24:12,840 --> 00:24:16,920 Like the question that in the internet period about Enron, 576 00:24:16,920 --> 00:24:19,260 you know, this was a huge darling company, 577 00:24:19,260 --> 00:24:21,060 then it was a huge collapse. 578 00:24:21,060 --> 00:24:22,320 How could this happen? 579 00:24:22,320 --> 00:24:23,610 And so much of it turned out 580 00:24:23,610 --> 00:24:28,590 to be the human factor of leadership, hubris, dishonesty, 581 00:24:28,590 --> 00:24:31,710 failing to see the world as it was, surrounding yourself 582 00:24:31,710 --> 00:24:34,380 with yes men, broadcasting messages 583 00:24:34,380 --> 00:24:37,410 instead of truth, et cetera. 584 00:24:37,410 --> 00:24:40,620 And that's what led to the question, 585 00:24:40,620 --> 00:24:43,470 isn't there a deeper root cause here? 586 00:24:43,470 --> 00:24:46,860 And so "The Founder's Mentality", the best analogy, 587 00:24:46,860 --> 00:24:48,960 the bestselling sports book for the last 30 588 00:24:48,960 --> 00:24:52,200 or 40 years has been the, the inner game of golf 589 00:24:52,200 --> 00:24:54,240 and then the inner game of tennis. 590 00:24:54,240 --> 00:24:57,630 Because so many tennis players have similar fitness. 591 00:24:57,630 --> 00:24:59,280 Their strokes are not that different. 592 00:24:59,280 --> 00:25:00,780 They play on the identical court 593 00:25:00,780 --> 00:25:03,180 with the identical balls and rackets. 594 00:25:03,180 --> 00:25:06,180 And what really differentiates the ability 595 00:25:06,180 --> 00:25:08,280 of somebody like Djokovic 596 00:25:08,280 --> 00:25:12,008 to eek out matches against people 597 00:25:12,008 --> 00:25:14,730 over and over and over again. 598 00:25:14,730 --> 00:25:17,640 And, and that comes to down so much to the inner game, 599 00:25:17,640 --> 00:25:22,163 to staying calm, to staying focused, to not giving up 600 00:25:22,163 --> 00:25:24,030 to human elements. 601 00:25:24,030 --> 00:25:27,060 And so we began to look for deeper root causes 602 00:25:27,060 --> 00:25:29,040 and began asking executives 603 00:25:29,040 --> 00:25:34,040 about whether they thought situations where they fell short 604 00:25:34,230 --> 00:25:38,040 as a company significantly short were external. 605 00:25:38,040 --> 00:25:42,090 And they said that in maybe 70 or 80% of the time 606 00:25:42,090 --> 00:25:46,110 or more, it probably came down to internal decisions, 607 00:25:46,110 --> 00:25:49,860 hiring the wrong people, fighting the future like Nokia did, 608 00:25:49,860 --> 00:25:51,720 bureaucracy that slowed them down. 609 00:25:51,720 --> 00:25:54,570 These were probably the deep root causes. 610 00:25:54,570 --> 00:25:57,270 We zeroed in on what we called "The Founder's Mentality", 611 00:25:57,270 --> 00:25:59,610 which were the internal elements of health. 612 00:25:59,610 --> 00:26:01,350 How do you know if a business is healthy 613 00:26:01,350 --> 00:26:04,020 on the inside to achieve growth? 614 00:26:04,020 --> 00:26:05,100 Very hard to know. 615 00:26:05,100 --> 00:26:07,230 How do you know if it's healthy on the outside? 616 00:26:07,230 --> 00:26:08,550 1 million measures? 617 00:26:08,550 --> 00:26:12,090 - And how do you, you know, if you're asked, you know, 618 00:26:12,090 --> 00:26:14,220 the classic elevator pitch, what do you say 619 00:26:14,220 --> 00:26:16,170 the magic dust of founders' mentality is? 620 00:26:16,170 --> 00:26:17,910 How, how do you talk about? 621 00:26:17,910 --> 00:26:20,220 - I say that 80 622 00:26:20,220 --> 00:26:25,220 to 82% in our research of root causes 623 00:26:25,380 --> 00:26:28,743 of strategy, shortfalls, breakdowns, 624 00:26:29,670 --> 00:26:34,380 free fall situations, disasters, traced 625 00:26:34,380 --> 00:26:36,150 to internal factors 626 00:26:36,150 --> 00:26:39,633 that could have been identified and controllable. 627 00:26:40,500 --> 00:26:44,970 And that when we drove deeper into that, 628 00:26:44,970 --> 00:26:48,870 we found three elements of health that tended 629 00:26:48,870 --> 00:26:53,870 to reduce the chance of those pitfalls engulfing you. 630 00:26:54,240 --> 00:26:59,040 Those three were exactly the main attributes 631 00:26:59,040 --> 00:27:02,010 that people used to describe the great founders 632 00:27:02,010 --> 00:27:03,900 who created the great businesses. 633 00:27:03,900 --> 00:27:08,010 Number one, a clear insurgent mission of what you're trying 634 00:27:08,010 --> 00:27:09,870 to achieve that is different 635 00:27:09,870 --> 00:27:12,240 or even revolutionary to the industry, 636 00:27:12,240 --> 00:27:14,853 even waging war on the norms of the industry. 637 00:27:15,720 --> 00:27:18,630 Think of SpaceX, one 10th, the cost 638 00:27:18,630 --> 00:27:22,140 to get rockets (clears throat) into space. 639 00:27:22,140 --> 00:27:25,110 Number two was a frontline obsession. 640 00:27:25,110 --> 00:27:28,410 The founders had an intellectual curiosity 641 00:27:28,410 --> 00:27:31,410 and a love of the detail, a love of the business 642 00:27:31,410 --> 00:27:34,200 that propelled them to constantly ask, 643 00:27:34,200 --> 00:27:35,640 why is this happening? 644 00:27:35,640 --> 00:27:37,260 How do the customers really feel? 645 00:27:37,260 --> 00:27:38,100 Why is that? 646 00:27:38,100 --> 00:27:41,400 And then the third element was the epicenter of the success 647 00:27:41,400 --> 00:27:46,170 of private equity, which is an owner's mindset, 648 00:27:46,170 --> 00:27:49,440 which relates to looking for responsibility 649 00:27:49,440 --> 00:27:53,790 or accepting responsibility, not looking to point blame. 650 00:27:53,790 --> 00:27:58,170 And that therefore the great founders 651 00:27:58,170 --> 00:27:59,580 had a sense of urgency. 652 00:27:59,580 --> 00:28:02,160 They reacted quickly, they acted 653 00:28:02,160 --> 00:28:04,050 as if all their, the money was their own. 654 00:28:04,050 --> 00:28:05,910 So that's a lot longer than an elevator pitch, 655 00:28:05,910 --> 00:28:07,500 but the elevator pitch would say-- 656 00:28:07,500 --> 00:28:08,820 - We were on a very high floor. 657 00:28:08,820 --> 00:28:09,840 - Something shorter. 658 00:28:09,840 --> 00:28:10,673 So yeah. 659 00:28:10,673 --> 00:28:12,360 - Is the answer now inner game? 660 00:28:12,360 --> 00:28:14,460 You know, as you tell your journey is the beginning 661 00:28:14,460 --> 00:28:15,990 of the journey, it was all outer game, 662 00:28:15,990 --> 00:28:17,943 and now the answer is inner game? 663 00:28:19,110 --> 00:28:20,580 - No, I don't think we've... 664 00:28:20,580 --> 00:28:24,482 I don't think we've repealed the laws of microeconomics. 665 00:28:24,482 --> 00:28:25,315 (Jimmy and Chris laugh) 666 00:28:25,315 --> 00:28:27,780 I mean, if in fact, ironically, 667 00:28:27,780 --> 00:28:31,560 if anything, the seven companies that have propelled 98% 668 00:28:31,560 --> 00:28:34,200 of the value creation in the US stock market 669 00:28:34,200 --> 00:28:37,440 for the last eight years are all leaders, 670 00:28:37,440 --> 00:28:40,320 if not monopolists, near monopolists 671 00:28:40,320 --> 00:28:43,260 or duopolies in their field, right? 672 00:28:43,260 --> 00:28:46,860 So leadership, economics, a well-defined core market, 673 00:28:46,860 --> 00:28:49,950 optimizing your core is still very important. 674 00:28:49,950 --> 00:28:54,210 But I think what we realize is that to do that and to go 675 00:28:54,210 --> 00:28:58,410 after the right internal opportunities, say no, 676 00:28:58,410 --> 00:29:01,680 which is very often the most important question to answer. 677 00:29:01,680 --> 00:29:05,340 And so the internal wiring of those businesses 678 00:29:05,340 --> 00:29:07,833 to keep them transparent, 679 00:29:09,330 --> 00:29:14,330 looking for what is really going on, not self delusional, 680 00:29:14,790 --> 00:29:16,950 trying to avoid the very easy 681 00:29:16,950 --> 00:29:18,690 and dangerous trap of hubris, 682 00:29:18,690 --> 00:29:23,690 which ultimately engulfs so many, those are at the core 683 00:29:24,330 --> 00:29:28,980 of all the companies that are still proceeding 684 00:29:28,980 --> 00:29:31,020 along with these rules on the outside. 685 00:29:31,020 --> 00:29:33,960 So it really is a higher synthesis 686 00:29:33,960 --> 00:29:37,710 of the two just as it is in anything. 687 00:29:37,710 --> 00:29:42,120 You know, the great musicians have magical ability execute 688 00:29:42,120 --> 00:29:44,460 detailed things like Eric Clapton, 689 00:29:44,460 --> 00:29:48,420 and yet an amazing intuition for what will work to write, 690 00:29:48,420 --> 00:29:49,893 you know, a song like Layla. 691 00:29:51,390 --> 00:29:54,300 - So the outer game is what Chris just called 692 00:29:54,300 --> 00:29:56,250 the laws of microeconomics. 693 00:29:56,250 --> 00:29:58,860 To grow sustainably, of course you have 694 00:29:58,860 --> 00:30:01,473 to have a well-defined core business, drive it 695 00:30:01,473 --> 00:30:03,600 to full potential, achieve leadership economics. 696 00:30:03,600 --> 00:30:06,330 But the inner game matters too, 697 00:30:06,330 --> 00:30:08,460 because your growth will create complexity 698 00:30:08,460 --> 00:30:10,650 and that complexity will kill your growth. 699 00:30:10,650 --> 00:30:13,440 To fight it, you need to maintain, 700 00:30:13,440 --> 00:30:17,670 or in most companies, rediscover your founder's mentality. 701 00:30:17,670 --> 00:30:19,470 And this will demand two things. 702 00:30:19,470 --> 00:30:23,280 First, with your people, rediscover the why. 703 00:30:23,280 --> 00:30:25,440 Why the hell do you exist? 704 00:30:25,440 --> 00:30:27,720 Then reorient your company to the frontline 705 00:30:27,720 --> 00:30:30,930 and customers away from head office and managers. 706 00:30:30,930 --> 00:30:32,430 Create an owner mindset, 707 00:30:32,430 --> 00:30:36,810 which involves a hatred of bureaucracy and a bias to action. 708 00:30:36,810 --> 00:30:40,830 Second, you gotta bring back a vertical orientation. 709 00:30:40,830 --> 00:30:44,280 Focus on real customers and win, 710 00:30:44,280 --> 00:30:46,560 then take a winning solution and scale it, 711 00:30:46,560 --> 00:30:48,840 and then figure out how to amplify 712 00:30:48,840 --> 00:30:51,060 what you've discovered across the business 713 00:30:51,060 --> 00:30:52,920 through horizontal moves. 714 00:30:52,920 --> 00:30:57,510 Outer game, focus on the core balance, deliver and develop. 715 00:30:57,510 --> 00:31:01,470 Inner game (laughs) it starts with just get your mojo back, 716 00:31:01,470 --> 00:31:04,770 start winning again, and then celebrate the heroes 717 00:31:04,770 --> 00:31:06,480 who make those victories happen. 718 00:31:06,480 --> 00:31:09,360 And it's interesting, as Chris notes, in the last decade, 719 00:31:09,360 --> 00:31:12,510 almost all the value in the stock market has been done 720 00:31:12,510 --> 00:31:15,630 by the big tech players, all founder-led, 721 00:31:15,630 --> 00:31:20,630 all playing the outer and inner game with new rules. 722 00:31:22,110 --> 00:31:24,236 One of the things that's coming up more 723 00:31:24,236 --> 00:31:27,210 and more in our work is this notion of resilience. 724 00:31:27,210 --> 00:31:29,820 And I thought the, I thought the best line you talked about 725 00:31:29,820 --> 00:31:34,323 was when I go out to external markets, I'm a hero, 726 00:31:35,250 --> 00:31:37,110 and everybody looks at the journey I've been on 727 00:31:37,110 --> 00:31:38,610 in the mountain I'm on. 728 00:31:38,610 --> 00:31:42,273 When I talk to a user, I'm as good as the last transaction. 729 00:31:43,110 --> 00:31:46,701 And, but that energy, Marco-- 730 00:31:46,701 --> 00:31:47,534 - [Marcos] So physically happened to me. 731 00:31:47,534 --> 00:31:49,440 - [Jimmy] Well, then you said that, but-- 732 00:31:49,440 --> 00:31:50,460 - [Marcos] And I said, you know what? 733 00:31:50,460 --> 00:31:52,950 I need to physically move. 734 00:31:52,950 --> 00:31:54,300 We had an office that I shared 735 00:31:54,300 --> 00:31:57,621 with my two kind of co-founders (indistinct) 736 00:31:57,621 --> 00:32:01,080 We had the, we, the three of us sat together 737 00:32:01,080 --> 00:32:02,370 in like, in a place like this. 738 00:32:02,370 --> 00:32:05,370 I said, guys, yes, as of next week I'm going 739 00:32:05,370 --> 00:32:09,382 to sit in the middle of the engineers with (indistinct) 740 00:32:09,382 --> 00:32:10,350 And I did that for three years. 741 00:32:10,350 --> 00:32:12,570 I wanted to physically change everything 742 00:32:12,570 --> 00:32:15,390 because I said, you know, it's been one era 743 00:32:15,390 --> 00:32:16,440 of building the company. 744 00:32:16,440 --> 00:32:18,120 Now we need to build the product. 745 00:32:18,120 --> 00:32:19,620 The people that you know, 746 00:32:19,620 --> 00:32:23,730 the business people love us and our users are here. 747 00:32:23,730 --> 00:32:25,050 I want the opposite to happen. 748 00:32:25,050 --> 00:32:26,610 I want our users to have us here 749 00:32:26,610 --> 00:32:28,650 and the external work to be here. 750 00:32:28,650 --> 00:32:30,510 And this is, this is unsustainable, 751 00:32:30,510 --> 00:32:32,550 this is sustainable, you know. 752 00:32:32,550 --> 00:32:36,780 - [Jimmy] And so that, Marcos, takes so much energy, right? 753 00:32:36,780 --> 00:32:39,870 To, to face the gaps in your business, constantly say, 754 00:32:39,870 --> 00:32:41,760 I'm gonna listen to the user that hates me, 755 00:32:41,760 --> 00:32:44,253 not the external market that loves me. 756 00:32:45,330 --> 00:32:47,857 You answered, I think for yourself, you, you said, 757 00:32:47,857 --> 00:32:49,830 "I get passion in everything, 758 00:32:49,830 --> 00:32:51,300 from big things to small things." 759 00:32:51,300 --> 00:32:53,430 You talked about your family. 760 00:32:53,430 --> 00:32:57,090 Did you specifically with in Mercado Libre talk 761 00:32:57,090 --> 00:32:59,010 to your people about how they keep energy levels, 762 00:32:59,010 --> 00:33:01,470 how they stay resilient? 763 00:33:01,470 --> 00:33:03,870 Because what we've seen is tired people 764 00:33:03,870 --> 00:33:05,880 do incredible damage to companies. 765 00:33:05,880 --> 00:33:07,260 It takes energy. 766 00:33:07,260 --> 00:33:08,130 - [Marcos] We talking about career 767 00:33:08,130 --> 00:33:09,720 about leading for example. 768 00:33:09,720 --> 00:33:11,760 That for me is the most important thing. 769 00:33:11,760 --> 00:33:14,437 When this guy told me, the, the board director telling me, 770 00:33:14,437 --> 00:33:16,354 "Hey, why are you doing what you're doing? 771 00:33:16,354 --> 00:33:19,200 You know, this is your company, you can do what you love, 772 00:33:19,200 --> 00:33:20,705 you can go and play golf." 773 00:33:20,705 --> 00:33:21,946 You know, I said, "No, no, no. 774 00:33:21,946 --> 00:33:22,779 I don't wanna go and play golf, 775 00:33:22,779 --> 00:33:24,923 because I don't want the CEO of Mercado Libre. 776 00:33:24,923 --> 00:33:27,820 Now I'm gonna be chairman, and now Ariel 777 00:33:29,040 --> 00:33:32,160 and everybody else knows that I was willing 778 00:33:32,160 --> 00:33:34,560 to leave the thing that I love the most 779 00:33:34,560 --> 00:33:37,983 because I want to be 24/7, 365. 780 00:33:39,090 --> 00:33:43,530 Now, everybody better work 24/7, 365. 781 00:33:43,530 --> 00:33:44,883 I'm giving the example. 782 00:33:45,870 --> 00:33:47,640 I'm giving up my salary, 783 00:33:47,640 --> 00:33:50,370 I'm giving up my job, I'm giving up the position 784 00:33:50,370 --> 00:33:53,760 because whoever leads this company cannot be focused 785 00:33:53,760 --> 00:33:55,683 on Mercado Libre and other things. 786 00:33:56,520 --> 00:33:58,170 Mercado Libre has to be your life. 787 00:33:58,170 --> 00:34:00,600 - [Jimmy] You say that, but you also talked 788 00:34:00,600 --> 00:34:02,670 about the incredible importance of your family. 789 00:34:02,670 --> 00:34:04,830 I know you love rugby with a huge passion. 790 00:34:04,830 --> 00:34:06,428 - [Marcos] I'm not saying 791 00:34:06,428 --> 00:34:08,490 it has to be the only thing you do. 792 00:34:08,490 --> 00:34:09,404 - [Jimmy] Good, okay. 793 00:34:09,404 --> 00:34:10,294 - [Marcos] But I can be with my family 794 00:34:10,294 --> 00:34:11,127 and I am with my family. 795 00:34:11,127 --> 00:34:12,579 I'm thinking of Mercado Libre. 796 00:34:12,579 --> 00:34:13,502 (Jimmy laughs) 797 00:34:13,502 --> 00:34:14,398 - [Jimmy] Don't say that to your wife. 798 00:34:14,398 --> 00:34:15,299 (Jimmy laughs) 799 00:34:15,299 --> 00:34:16,648 - [Marcos] No, no, my wife knows it. 800 00:34:16,648 --> 00:34:17,675 My wife knows it. 801 00:34:17,675 --> 00:34:19,767 My wife thinks about Mercado Libre 24/7 as well. 802 00:34:19,767 --> 00:34:22,290 I mean, it's our fourth kid. 803 00:34:22,290 --> 00:34:23,550 It's a life project. 804 00:34:23,550 --> 00:34:26,670 It's a life project for me, for my children and for my wife. 805 00:34:26,670 --> 00:34:28,860 We're all trying to understand how is this gonna work out 806 00:34:28,860 --> 00:34:30,570 in the next few years? 807 00:34:30,570 --> 00:34:32,418 - [Jimmy] But how did you, 808 00:34:32,418 --> 00:34:33,330 where did you replenish your energy? 809 00:34:33,330 --> 00:34:35,082 - [Marcos] I think what happened to me, 810 00:34:35,082 --> 00:34:36,960 it's also with Jeff Bezos, it's also with Mark Zuckerberg, 811 00:34:36,960 --> 00:34:38,520 it's also clearly with Elon Musk, 812 00:34:38,520 --> 00:34:40,860 all these founders, money's irrelevant. 813 00:34:40,860 --> 00:34:44,340 It's never, ever, ever about the money. 814 00:34:44,340 --> 00:34:48,450 So, so it's always about the objective, about the project, 815 00:34:48,450 --> 00:34:52,380 and the project is so fascinating and it's growing 816 00:34:52,380 --> 00:34:55,920 and it's changing that it, right now, it's as fascinating 817 00:34:55,920 --> 00:34:56,950 as it has ever been. 818 00:34:56,950 --> 00:34:58,560 I get the energy from there, 819 00:34:58,560 --> 00:35:01,020 but it's also certain kind of people that you need 820 00:35:01,020 --> 00:35:02,250 to try and attract. 821 00:35:02,250 --> 00:35:06,030 And clearly Addie is like that and Danny is like that, 822 00:35:06,030 --> 00:35:08,040 or that's, you know, what I try 823 00:35:08,040 --> 00:35:10,620 to detect when I'm interviewing, you know, 824 00:35:10,620 --> 00:35:12,480 is this guy a manager? 825 00:35:12,480 --> 00:35:15,270 And sometimes we know this guy's a manager and that's fine. 826 00:35:15,270 --> 00:35:16,980 He's gonna be, I don't know, the controller. 827 00:35:16,980 --> 00:35:17,813 It's great. 828 00:35:17,813 --> 00:35:21,870 So you don't need also founder mentality in every role, 829 00:35:21,870 --> 00:35:24,540 in every position in across the company 830 00:35:24,540 --> 00:35:25,980 because it's a problem, 831 00:35:25,980 --> 00:35:29,225 because founders want to grow, create, ambitious, 832 00:35:29,225 --> 00:35:31,200 and if everybody wants to be like that, 833 00:35:31,200 --> 00:35:34,080 you don't have enough positions to satisfy all those things. 834 00:35:34,080 --> 00:35:36,047 - [Jimmy] But no, no one's gonna keep the books (laughs) 835 00:35:36,047 --> 00:35:37,830 - [Marcos] Yeah, and you don't have enough positions 836 00:35:37,830 --> 00:35:40,083 to satisfy all those egos, you know? 837 00:35:40,083 --> 00:35:42,510 But, but that's another thing. 838 00:35:42,510 --> 00:35:44,700 The process of me leaving creates 839 00:35:44,700 --> 00:35:46,770 opportunities which you need. 840 00:35:46,770 --> 00:35:49,320 Because when you have all these ambitious people, 841 00:35:49,320 --> 00:35:52,740 if you don't create opportunities, you end up losing them. 842 00:35:52,740 --> 00:35:53,940 We saw that one at federal level, 843 00:35:53,940 --> 00:35:56,790 we gave four internal promotions. 844 00:35:56,790 --> 00:35:57,870 It was fantastic. 845 00:35:57,870 --> 00:36:00,030 We have an incredible bench, 846 00:36:00,030 --> 00:36:02,880 but if those people are in the bench forever, 847 00:36:02,880 --> 00:36:05,940 one day they're gonna play in a, you know, in another team. 848 00:36:05,940 --> 00:36:08,790 So I mean, in Mercado Libre it's very clear 849 00:36:08,790 --> 00:36:12,420 that the guys from the marketplace, the guys 850 00:36:12,420 --> 00:36:16,740 from the FinTech and the engineers are the ones 851 00:36:16,740 --> 00:36:20,790 who deliver the value. 852 00:36:20,790 --> 00:36:22,590 Everybody else is supporting role. 853 00:36:22,590 --> 00:36:24,030 And that is very clear. 854 00:36:24,030 --> 00:36:27,150 I mean, in my team meetings, those are the guys 855 00:36:27,150 --> 00:36:29,520 who start the, let's talk 856 00:36:29,520 --> 00:36:33,107 about (indistinct) and Ari would take us 857 00:36:33,107 --> 00:36:34,590 to (indistinct) and Valdo would take us 858 00:36:34,590 --> 00:36:36,630 to (indistinct) and then Danny 859 00:36:36,630 --> 00:36:37,830 is gonna talk about technology. 860 00:36:37,830 --> 00:36:40,650 And then the CFO talks about what's going on 861 00:36:40,650 --> 00:36:45,030 and the (indistinct) who's kind 862 00:36:45,030 --> 00:36:50,030 of a COO, he talks about legal and HR and... 863 00:36:50,790 --> 00:36:53,700 But first we talk about Mercado Libre the business 864 00:36:53,700 --> 00:36:55,740 and then the technology and then it's the rest. 865 00:36:55,740 --> 00:36:57,633 And everybody knows that, and it's like that, and we don't-- 866 00:36:57,633 --> 00:37:00,090 - [Jimmy] When we say most big bureaucracies, 867 00:37:00,090 --> 00:37:02,790 it's the tyranny of the functional excellence programs. 868 00:37:02,790 --> 00:37:05,190 It's all the functions just give PowerPoint 869 00:37:05,190 --> 00:37:07,560 in a presentations all day. 870 00:37:07,560 --> 00:37:10,050 - [Marcos] These guys are there to support the business. 871 00:37:10,050 --> 00:37:12,210 That is very, very clear. 872 00:37:12,210 --> 00:37:13,043 Yeah. 873 00:37:13,043 --> 00:37:15,720 But again, competition is so helpful. 874 00:37:15,720 --> 00:37:19,560 Is so helpful in aligning everybody. 875 00:37:19,560 --> 00:37:21,840 I think Amazon, these guys are really good, 876 00:37:21,840 --> 00:37:23,700 but they have a discipline, you know. 877 00:37:23,700 --> 00:37:25,920 They're not willing to lose $500 million 878 00:37:25,920 --> 00:37:27,633 per year forever in Brazil. 879 00:37:29,130 --> 00:37:30,330 I don't know how many they've been losing, 880 00:37:30,330 --> 00:37:33,180 but they've been losing substantial money in Brazil. 881 00:37:33,180 --> 00:37:35,460 But there's a point where they say, Hey, 882 00:37:35,460 --> 00:37:37,740 maybe this amount of money is better spent in Germany 883 00:37:37,740 --> 00:37:40,113 where we make money, or in the UK. 884 00:37:41,100 --> 00:37:43,530 At some point in time, there's some discipline. 885 00:37:43,530 --> 00:37:46,740 So far with the Chinese, we've seen no willingness 886 00:37:46,740 --> 00:37:49,950 to restrain anything, 887 00:37:49,950 --> 00:37:52,650 and their technology is really good and they work a lot. 888 00:37:52,650 --> 00:37:55,773 And so we say, it's gonna be a long and tough battle. 889 00:37:57,330 --> 00:38:00,240 - Look, Marcos doesn't beat around the bush. 890 00:38:00,240 --> 00:38:02,580 His job is 24/7. 891 00:38:02,580 --> 00:38:06,690 It demanded relentless energy, and he warns us. 892 00:38:06,690 --> 00:38:09,990 If I didn't have that energy, my job was to step aside 893 00:38:09,990 --> 00:38:11,700 because there are four other leaders 894 00:38:11,700 --> 00:38:13,110 that would take my place 895 00:38:13,110 --> 00:38:15,390 because they wanna write their own chapters. 896 00:38:15,390 --> 00:38:18,420 We may all wonder, could we do a 24/7 job? 897 00:38:18,420 --> 00:38:20,160 Would we even want to? 898 00:38:20,160 --> 00:38:23,040 If you can't or won't devote that much time to your job, 899 00:38:23,040 --> 00:38:25,410 it's important to remember, 900 00:38:25,410 --> 00:38:27,570 you know, we all deserve work 901 00:38:27,570 --> 00:38:31,860 that energizes us, work that excites us so much 902 00:38:31,860 --> 00:38:33,420 that, you know, it steals a bit 903 00:38:33,420 --> 00:38:35,250 of our discretionary energy. 904 00:38:35,250 --> 00:38:37,260 Work we think about in the shower 905 00:38:37,260 --> 00:38:39,000 or while walking in the park, 906 00:38:39,000 --> 00:38:42,390 because we all deserve to be on noble missions. 907 00:38:42,390 --> 00:38:43,395 All right, so how the hell 908 00:38:43,395 --> 00:38:45,818 are we gonna recap this episode? 909 00:38:45,818 --> 00:38:48,420 First, it's the outer game. 910 00:38:48,420 --> 00:38:50,640 Power of the core, leadership economics. 911 00:38:50,640 --> 00:38:53,850 Chris showed us that sustainable growth does not come 912 00:38:53,850 --> 00:38:58,110 from chasing hot markets or diversifying for the sake of it. 913 00:38:58,110 --> 00:39:01,230 It comes from doubling down on what we do best, 914 00:39:01,230 --> 00:39:05,700 building repeatable models and, well, comes from dominating. 915 00:39:05,700 --> 00:39:07,650 But of course this is the era of turbulence, 916 00:39:07,650 --> 00:39:10,020 so we have to optimize the core 917 00:39:10,020 --> 00:39:12,660 while also adapting it to stay relevant. 918 00:39:12,660 --> 00:39:15,810 Second, the inner game, the founder's mentality. 919 00:39:15,810 --> 00:39:18,600 Nurture it, rediscover it, and then shift 920 00:39:18,600 --> 00:39:20,730 your orientation more vertically. 921 00:39:20,730 --> 00:39:23,340 Focus on customers in the frontline, 922 00:39:23,340 --> 00:39:26,850 win then scale, then amplify. 923 00:39:26,850 --> 00:39:29,730 Third, of course, it's a balance 924 00:39:29,730 --> 00:39:31,800 between the inner and outer game. 925 00:39:31,800 --> 00:39:34,680 The CEO's job is never just one thing. 926 00:39:34,680 --> 00:39:37,050 It's economics and competition, 927 00:39:37,050 --> 00:39:39,810 but it's also leadership and culture. 928 00:39:39,810 --> 00:39:42,150 The best leaders help their teams win 929 00:39:42,150 --> 00:39:44,220 against external competitors 930 00:39:44,220 --> 00:39:47,790 and help them overcome those internal energy vampires. 931 00:39:47,790 --> 00:39:49,920 It's the outer game against competition. 932 00:39:49,920 --> 00:39:52,290 It's the inner game against complexity. 933 00:39:52,290 --> 00:39:54,120 And the best CEOs know how to win 934 00:39:54,120 --> 00:39:56,850 with both without losing energy, 935 00:39:56,850 --> 00:39:59,250 without losing focus (giggles) 936 00:39:59,250 --> 00:40:00,990 without losing their people. 937 00:40:00,990 --> 00:40:04,447 So that's the final CEO interview for this season. 938 00:40:04,447 --> 00:40:05,349 (Jimmy giggles) 939 00:40:05,349 --> 00:40:06,247 But guess what? 940 00:40:06,247 --> 00:40:07,080 We're not done with you yet. 941 00:40:07,080 --> 00:40:09,990 In two weeks, we're gonna come back with a wrap up episode 942 00:40:09,990 --> 00:40:12,270 and we're gonna try to pull this all together. 943 00:40:12,270 --> 00:40:14,370 So thanks for sticking with us. 944 00:40:14,370 --> 00:40:15,483 Stay curious.