20VC Reddit CEO Steve Huffman on Scaling Teams; What Works and What Does Not, A CEO's Relationship with Stress and Managing It & How To Structure Internal DecisionMaking Effectively

Harry Stebbings interviews Reddit co-founder and CEO Steve Huffman on the 20 Minutes VC podcast, discussing Huffman's journey from Y Combinator's inaugural batch to selling Reddit to Conde Nast, and eventually returning as CEO. Huffman shares insights on decision-making, managing stress, acquiring talent, and the importance of community on Reddit. He expresses an optimistic view of humanity shaped by Reddit's platform, which fosters connection amongst its diverse user base. The discussion also touches on the potential growth of Reddit to serve billions, emphasizing the value of diversity and resilience in both communities and business ecosystems. Additionally, the episode features promotional segments for ActiveCampaign, Intercom, and Ezra's full-body MRI scans.

• Harry Stebbings hosts Founders Friday on the 20 Minute VC podcast.
• Steve Huffman, cofounder and CEO of Reddit, is the featured guest.
• Reddit is the number five most visited website in the US.
• Reddit has raised over $550 million in funding from notable investors.

"This is founders Friday on the 20 minutes vc with me, Harry Stebings, and I'd love to show you more behind the scenes here."

This quote introduces the podcast episode and its host, Harry Stebbings.

• Steve Huffman started his career at Y Combinator (YC) in 2005.
• He cofounded Reddit with Alexis Ohanian and sold it to Conde Nast Publications in 2006.
• Huffman later cofounded Hipmunk and then rejoined Reddit as CEO in 2015.

"At YC, Steve cofounded Reddit with Alexis Ohanian, which they sold in 2006 to Conde Nas publications."

This quote provides a brief overview of Steve Huffman's early career and his involvement with Reddit.

• Huffman and Ohanian were college roommates planning to start a company called "My Mobile Menu."
• The idea was rejected by Y Combinator due to timing and technological limitations.
• Paul Graham of YC encouraged them to work on a different idea, leading to the creation of Reddit.

"The idea of Reddit was born. That is, we'd build a website where people could find new and interesting content."

Steve Huffman explains the pivot from the original business idea to the creation of Reddit.

• The first YC batch was an experiment with eight startups.
• Huffman built relationships with significant figures in the tech industry during this time.
• Alexis Ohanian was charismatic and instrumental in the early success of Reddit.

"It was like the early days of any startup."

This quote reflects on the experimental and foundational period of Y Combinator and Reddit.

• Huffman returned to Reddit after it became an independent entity from Conde Nast.
• Between leaving and returning to Reddit, Huffman cofounded Hitmunk.
• Huffman felt he could help Reddit reach its potential during difficult times.

"Reddit is this incredible opportunity represents, has more potential than any company I can think of."

Steve Huffman discusses his motivation for returning to Reddit as CEO.

• The travel industry is challenging with strong competition and low margins.
• Huffman learned that he is not always the customer, impacting product development philosophy.

"One of the most important lessons I learned at Hitmunk is that I am not our customer."

This quote highlights a key lesson Steve Huffman learned during his time at Hitmunk, which influenced his approach at Reddit.

• Steve Huffman discusses how personal preferences influenced his product development strategies.
• He acknowledges that while his and his co-founder's tastes were shared by many, they did not represent the majority of consumers.
• The realization that most consumers have different priorities, such as price over user interface, was a hard-learned lesson.
• Steve applies this lesson to Reddit, understanding that his tastes may not align with all potential new users.

"And my reasoning was, I'm not unique. There are millions of people just like me. And if we build stuff that I like, then millions of other people will also like it. And that worked." "But what we learned, and we learned this lesson the hard way, is that most consumers don't travel or shop for travel the way that Adam and I did."

These quotes highlight Steve's initial belief in using personal intuition as a guide for product development and the subsequent realization that it does not necessarily align with the broader market's needs.

• The cliché 'know your customer' is validated through Steve's experience with Hitmonk.
• Understanding customer behavior and preferences is essential, especially when trying to appeal to a diverse user base.
• Steve emphasizes the importance of recognizing that personal intuition may not always reflect the needs of new users.

"It's a really important lesson. I think this is often summarized as know your customer. It's cliched Business Advice for a reason."

The quote underscores the significance of the well-known business advice to 'know your customer' and its practical implications in product development.

• Steve Huffman describes a three-part approach to product feedback at Reddit: data analysis, customer feedback, and intuition.
• He stresses the importance of a balanced approach, as over-reliance on any single aspect can lead to suboptimal outcomes.
• The pitfalls of ignoring qualitative feedback in favor of purely data-driven decisions are highlighted.

"And so this is raw data, customer feedback and intuition. And I think it's important to have a healthy balance of all three of those things."

The quote explains the triad of factors that contribute to informed product development decisions and the necessity of maintaining a balance between them.

• Steve Huffman discusses the limitations of relying solely on data for decision-making.
• He argues that data can prevent seeing the bigger picture and may not capture user sentiment accurately.
• The conversation touches on the fear of trusting intuition and the need for data to justify decisions.

"But going only in data is a great way to optimize to a local maximum. It's a great way to not see around a corner."

This quote criticizes the exclusive focus on data, suggesting it can lead to short-sighted decisions that miss out on long-term opportunities and insights.

• Steve reflects on the evolution of his confidence in his own intuition.
• He advises founders to genuinely consider both data and intuition, recognizing personal biases and compensating for them.
• The discussion includes an acknowledgment of the potential for arrogance when past successes reinforce reliance on intuition.

"So I started on the extreme version of the other kind, which has its own pitfalls. Right? Which is, you can be blind to your own arrogance, because if you're right, if you assume that I'll be right again in the future."

The quote highlights the dangers of becoming overconfident in one's intuition, suggesting that a balance between data and intuition is necessary for sound decision-making.

• Steve Huffman talks about the importance of having a clear and timely decision-making process.
• He does not favor consensus-based decisions and prefers a single decision-maker model.
• Steve links procrastination and indecision to stress, advocating for decisive action to reduce stress.

"I think it's important that there be a decider, a single decision maker, and that decision be made in time and very clear."

The quote emphasizes the need for clear and decisive leadership in the decision-making process to avoid the stress associated with uncertainty and delay.

• Steve discusses how his approach to stress management has changed over time.
• He identifies procrastination as a significant source of stress and advocates for addressing tasks promptly.
• The conversation also touches on the mental tactics Steve uses to minimize recurring, unproductive thoughts.

"And so one of the big improvements I've made in my life over the last couple of years is I don't want to be thinking about this. What can I do to not be thinking about this?"

This quote reflects Steve's proactive approach to stress management, where he seeks to eliminate unnecessary thoughts and tasks that contribute to stress.

• Steve Huffman discusses the difficulties and stress associated with decision-making, particularly when it involves letting someone go from a company.
• He emphasizes the importance of prioritizing the success of Reddit over personal feelings of inadequacy or concern for the individual being let go.
• Huffman has come to view the dismissal of an employee as an opportunity for the company to improve and for him to learn from any mistakes made during the hiring process.
• He believes that when someone is let go, it is a guarantee that the company will get better because it removes the stress associated with that person and creates space for a better fit.

"And the way I think about letting somebody go now is, well, maybe if I was a better manager, they'd be successful, but I'm not, and we don't have time for me to figure that out."

This quote illustrates Huffman's pragmatic approach to decision-making, acknowledging his limitations as a manager and the urgency to act in the company's best interest.

"When you let somebody go, it is guaranteed your company will get better, because at the minimum, you're not stressing about that person anymore."

Huffman asserts that dismissing an employee can have a positive impact on a company by eliminating stress and creating opportunities for better team dynamics.

• Steve Huffman agrees with the mentor's advice on being direct when letting someone go, emphasizing the importance of honesty and clarity in these situations.
• He believes that the most compassionate act is to tell someone the truth, even if it is difficult, as it allows both parties to learn and improve from the experience.
• Huffman suggests that while it is not always necessary to detail every fault, acknowledging the reality of the situation is crucial for honesty and self-improvement.

"The most compassionate thing that we can do for somebody is tell them the truth."

This quote underscores the value of honesty in difficult conversations, suggesting that it ultimately benefits all parties involved.

"Sometimes it's pretty obvious. But at least in the latter, it's being honest with ourselves about the situation."

Huffman highlights the importance of self-awareness and honesty in recognizing when a professional relationship is not working out.

• Steve Huffman reflects on how he has matured as a CEO and as a person, noting changes in how he manages stress, emotions, and decision-making.
• He has learned to let go of negative emotions like grudges, which he now views as a waste of time and energy.
• Huffman emphasizes the importance of setting clear strategies and guardrails for his team and allowing them autonomy within those boundaries.
• He acknowledges past mistakes in decision-making and communication and has worked to eliminate those patterns to become more effective.

"I've changed in, gosh, so many ways."

Huffman acknowledges his personal and professional growth over the years, indicating a broad evolution in his approach to leadership.

"Two really important duties that we have are set the strategy and set the guardrails."

This quote highlights Huffman's belief in the importance of clarity and direction from leadership to empower teams to work effectively.

• Steve Huffman discusses the challenges and lessons learned in acquiring talent, particularly in a competitive environment.
• He emphasizes the importance of trusting his instincts when making critical hires and being disciplined in the hiring process.
• Huffman has learned to be wary of candidates who are difficult during the hiring process, as it often indicates they will be challenging to manage.
• He shares his current perspective on hiring, acknowledging that there is room for improvement and that he is still learning in this area.

"The best hires I've made, like the top 1%, my very favorite people I knew in about the first 20 minutes of our conversation."

Huffman reveals that his gut feeling plays a significant role in identifying top talent quickly during the hiring process.

"If somebody's a pain in the ass in the interview process, they're not on time, or it's difficult to schedule, or all of your conversations are about title and comp... they're going to be hard to manage."

This quote conveys Huffman's experience that a candidate's behavior during the hiring process can be indicative of future challenges in managing them.

• Steve Huffman engages in a quickfire round where he shares immediate thoughts on various topics.
• He mentions his favorite book, "Shogun," for its combination of engaging storytelling and business strategy insights.
• Huffman expresses skepticism about the practicality of self-driving cars in cities, citing legislative trends and the complexity of the AI required.
• He notes the effectiveness of alternative transportation options like electric bikes and scooters, as well as public transit.

"I really love the fiction book Shogun."

Huffman recommends "Shogun" as a book with valuable business strategy lessons hidden within an entertaining narrative.

"The AI problem of actually driving a car through a city like San Francisco is so difficult."

This quote captures Huffman's doubt about the feasibility of self-driving cars navigating complex urban environments.

• Self-driving cars are considered less efficient in dense cities due to space, speed, and time trade-offs.
• Other transportation options are on the horizon, such as personal drones.
• Self-driving cars may be more suitable for suburban or rural areas where the computer science problem is simpler and more space is available.

"So I just think cars in general in cities are probably the least efficient way of getting around in terms of the space and speed and time trade off."

This quote emphasizes the inefficiency of cars, including self-driving ones, in urban settings due to the constraints of space and time.

• Silicon Valley's strength and weakness is the arrogance that the world can be improved.
• Success in business often requires naive optimism and ignoring counterarguments.
• The challenge is balancing the determination to execute ideas with acknowledging valid counterarguments.

"I think one of our greatest strengths is also our greatest weakness, which is the arrogance that the world can be better."

Steve Huffman points out that the belief in improving the world can be both a positive driving force and a potential source of blind spots in Silicon Valley.

• Steve Huffman has personal mantras, such as "hard to hire, hard to manage," which relate to trusting one's gut.
• Another mantra is about prompting action to simplify life when overthinking a problem.

"So hard to hire, hard to manage is one. I kind of apply that in weird cases because it's really a shade of trust your gut."

This quote reveals Huffman's belief in the importance of intuition in decision-making, especially when it comes to hiring and management.

• Steve Huffman struggles with sharing his thoughts unprompted, despite leading a social platform.
• He recognizes a gap in his personal engagement on Reddit and the need to communicate his vision more effectively.

"I have lots of thoughts and a vision for Reddit, and I am not a social person. I don't actually enjoy sharing my thoughts unprompted."

Huffman describes the irony of running a social platform like Reddit while personally not being very social or proactive in sharing his thoughts.

• Working at Reddit has given Steve Huffman an optimistic view of humanity.
• Despite negative behaviors, he believes people are fundamentally good and capable of incredible things when connected.
• Huffman values the human connections and community that Reddit fosters.

"Reddit has given me a very optimistic view of the world."

This quote conveys Huffman's belief in the fundamental goodness of people, informed by his experiences with the Reddit community.

• Steve Huffman is excited about Reddit's potential to provide community and belonging to billions of people.
• He sees an obligation to try to achieve this goal due to the rarity of such opportunities.

"I think that would be really incredible for the world if we could do that. I think that's the opportunity we have at Reddit."

Huffman expresses his aspiration for Reddit to expand its reach and impact, providing a sense of community to a much larger audience.

• Huffman supports the unbundling of platforms to foster competition and creativity in the marketplace.
• For Reddit, growth is envisioned through more diverse communities and self-organization.
• He believes diversity in business and ecosystems is crucial for resilience.

"I think in nature, diversity equals resilience, and I think that's true in business as well."

This quote highlights Huffman's view on the importance of diversity within platforms and communities for creating a resilient business model.

• Activecampaign and Intercom are praised for their ability to create personalized customer experiences.
• Ezra is highlighted for its radiation-free full-body MRI scans for early cancer detection.
• These services underscore the importance of technology in enhancing customer engagement and health outcomes.

"Activecampaign is the first customer experience automation platform, helping you provide personalized and optimized customer experiences."

This quote emphasizes the role of Activecampaign in delivering tailored experiences to customers, showcasing an example of technology's impact on business operations.