20VC Segment Founder Peter Reinhardt on His Learning Process, How Great Leaders Listen and Encourage Debate within Their Organisation & How To Use Data Intelligently To Improve DecisionMaking

In a revealing conversation on 20 VC, Harry Stebbings interviews Peter Reinhardt, co-founder and CEO of Segment, discussing his unconventional journey of founding the company by initially trying to disprove its viability. Reinhardt shares the struggles and failures experienced with his initial classroom lecture tool, which led to the development of Segment, a customer data platform that was acquired by Twilio for $3.2 billion. He emphasizes the importance of humility, depth-first learning, and the necessity of understanding customer needs over clinging to a fixed vision. Reinhardt also touches on the emotional complexities of acquisitions, the process of becoming a better leader, and the power of asking direct, insightful questions to drive effective sales and customer discovery.

• The podcast is "20 VC" hosted by Harry Stebbings.
• The episode features Peter Reinhardt, co-founder and CEO of Segment.
• Segment was acquired by Twilio for $3.2 billion.
• Peter Reinhardt is an active angel investor.

You are listening to 20 VC with me, Harry Stebbings and I want to dive straight into the show today.

Last year this founder sold their company for a reported $3.2 billion, having scaled the team to over 500 people and some of the biggest and best companies as customers.

The quote introduces the podcast and the episode's guest, Peter Reinhardt, highlighting Segment's success and acquisition.

• Segment's original idea was a classroom lecture tool.
• The tool failed in practical classroom application.
• The team pivoted to creating an analytics tool, which also failed to gain traction.
• Co-founder Ian proposed pivoting to a Javascript library called Analytics.js.
• Peter Reinhardt was initially against the idea but attempted to prove its lack of viability.
• Analytics.js unexpectedly gained popularity on Hacker News, proving its potential.

My favorite part of this story, it is the only founding story I've known where the founder founded the company by trying to kill the idea.

Yeah, so this is back in 2011, we left school and decided to do y combinator. And we got into y combinator with this idea for a classroom lecture tool... it was a total disaster... So then we spent about a year trying to build an analytics tool... no one really cared and we couldn't get traction with it... I said, that is literally the worst idea I've ever heard... We're going to build a beautiful landing page... Went straight to the top of hacker news... the whole thing just kind of blew up.

The quote narrates the unique founding story of Segment, where the initial idea was discarded in favor of an unexpected success that came from an attempt to disprove its potential.

• The process of failing was emotionally and physically taxing for the founders.
• Peter Reinhardt experienced significant weight loss and panic attacks.
• He admires the Codecademy founders for their ability to quickly kill off ideas that weren't working.

Yeah, super crushing. I think at one point I lost like 20 pounds or ten pounds in like two weeks or something like that. I was going to the hospital for panic attacks... the founders that I'm most impressed by in how they handled that were actually the code Academy founders who were in our batch of Y combinator.

The quote describes the personal toll of facing failure during the early days of Segment and the resilience required to persevere.

• Peter Reinhardt challenges the myth that unwavering belief in a vision will lead to success, using Airbnb as an example.
• He emphasizes that businesses need to solve problems for others and the world does not care about the founder's vision.
• The right to have a vision comes after proving to solve problems for others.

I think one of the most destructive myths in Silicon Valley is the Airbnb story and myth... the world honestly couldn't care less what your vision is... a business is about solving other people's problems... then I think you earn the right to tell them how you think it ought to be done.

The quote critiques the common startup narrative that holding onto a vision will eventually lead to success, stressing the importance of market fit and solving real problems.

• Peter Reinhardt emphasizes the importance of depth-first learning.
• He uses narrow curiosity to dive deep into subjects, such as reading literature on specific topics before meetings.
• Depth of understanding leads to more interesting conversations and better mental models.
• This approach is considered fast in grasping the reality of various subjects.

"I guess the way I approach things is very depth. First, I think using a narrow curiosity to maximum benefit to just go insanely deep in an area."

The quote explains Peter Reinhardt's depth-first approach to learning, which involves intensely focusing on a narrow area of interest to gain a deep understanding quickly.

• Peter Reinhardt discusses two methods to understand what great talent looks like in unfamiliar roles.
• The first method is to set "black box" metrics to measure outcomes without needing to understand the internal processes.
• The second method involves actively learning and asking questions to understand specific roles, like marketing, from the inside.
• Both methods can be effective depending on the context and the availability of time and resources.

"One way is to black box it and basically say, what is the outcome of great marketing? What's the outcome of great engineering? And measure the black box and not bother to inspect inside as to whether the box isn't being done well internally."

This quote highlights the first method of understanding talent by focusing on outcomes and setting measurable goals without delving into the internal workings of a role.

• Active listening is not passive but involves reflecting, clarifying, and guiding conversations toward clarity and next steps.
• Good listeners ask probing questions and help others reach conclusions, which can lead to clarity in teams and organizations.
• Active listening is a skill that can be developed and is essential for effective leadership.

"I think good listening is not good listening, I think, is about reflecting back what you're hearing."

Peter Reinhardt clarifies that good listening is an active process where one reflects on what is being said, asks questions, and guides the conversation towards actionable outcomes.

• Many successful leaders are good listeners because they need to understand various contexts quickly.
• Reinhardt learned to actively listen through books like "Crucial Conversations," which helped him understand the importance of questioning narratives constructed from limited information.
• Good leaders avoid jumping to conclusions and instead verify narratives before responding emotionally.

"I think most good leaders that I come across seem to do that partly because they're low context on most things."

The quote suggests that effective leaders often engage in active listening because they are not always fully informed on every topic, necessitating a questioning approach to gain understanding.

• It is human to construct narratives from limited data, but it is important to verify these narratives before reacting.
• Intuition can guide which questions to ask to verify the narrative.
• Responding emotionally to a narrative rather than facts can lead to poor decisions.
• Reinhardt emphasizes the need to separate emotional responses from the narratives we construct.

"You can develop the narrative, but you need to verify it."

Peter Reinhardt stresses the importance of verifying the narratives we create from limited information before allowing them to influence our emotional responses or decision-making.

• Peter Reinhardt describes how his emotional responses have become more muted over time due to the constant emotional roller coaster of founding and running a company.
• This emotional regulation is useful for managing the varied responsibilities and situations encountered in leadership roles.
• Reinhardt suggests that experiencing intense situations repeatedly can naturally lead to a narrowing of emotional responses.

"It feels like your body learns to bound your emotional response into a narrower and narrower range, which is good and useful in the workday."

The quote reflects on how repeated exposure to intense emotional situations in a startup environment can train one's emotional responses to become more controlled and less extreme.

• Reinhardt acknowledges the importance of debate and dissent for intellectual progression within a company.
• Creating an environment where debate is welcome can be challenging.
• He suggests that sometimes silence and patience can be effective in encouraging others to speak up and engage in debate.
• Reinhardt believes he could improve in fostering an environment of open debate and looks up to other leaders who excel in this area.

"Yeah, I think I could do a better job of this. I think sometimes being just silent and waiting is actually extremely effective."

This quote indicates Reinhardt's self-reflection on his ability to encourage debate and his recognition that sometimes a leader's silence can create space for others to contribute their thoughts and opinions.

• Silence can compel people to share thoughts they initially resist expressing.
• It is an effective tool in conversations and negotiations.
• Discomfort from silence can prompt people to open up.

"Silence is a powerful tool."

This quote highlights the strategic use of silence to encourage communication.

• Problems often have clear solutions if all necessary information is available.
• Complexity is usually not the issue; it's either about intuition or missing information.
• Depth-first information search is a key strategy.
• Speed in gathering relevant information is crucial.
• Interviewing for problem-solving involves assessing how quickly a candidate can find pertinent information.

"I think most problems actually have fairly obvious solutions if you have the necessary information in front of you."

Peter Reinhardt emphasizes that problem-solving is often straightforward when all information is at hand.

• Interview questions focus on candidates' most impressive recent achievements.
• The process to identify and solve problems is explored.
• Speed and efficiency in problem-solving are evaluated.

"Usually it's about asking one what the most impressive thing is that they have done recently and then working back into their process for how it is that they figured out that that was the right thing to work on and how they figured out what the solution was."

Peter Reinhardt describes how he assesses a candidate's problem-solving abilities through their past experiences.

• Prioritization is key due to time constraints.
• Ingesting more information is preferred over selective rejection.
• Overwhelming bad data with more data is a strategy.

"I would prefer to just ingest as much as possible. I find that I'm time bound as opposed to anything else."

Peter Reinhardt advocates for absorbing as much information as possible within time limitations.

• Self-deprecation stems from past failures and the realization that the world doesn't always conform to one's expectations.
• Humility is seen as essential for personal growth and leadership.
• Lack of humility is a warning sign of stagnation.
• Personal growth requires the ability to recognize and admit imperfections.

"I think it's super important and basically a necessary precursor to continued growth, like personal growth."

Peter Reinhardt discusses the importance of humility in personal development and leadership.

• Acquisitions involve relinquishing control, which can be a lesson in humility.
• Trust in the acquiring company's vision is crucial.
• Belief in the combined value proposition is a deciding factor for acquisitions.

"It was the realization that the vision that he had for how segments, customer data and Twilio's communication channels came together in a way that was very novel in the market."

Peter Reinhardt explains how the vision for the acquisition influenced his decision to proceed with it.

• Peter Reinhardt is working on becoming a better coach for his leaders.
• The goal is to find a balance between deep inspection and giving total freedom.
• The focus is on asking the right questions to empower leaders to identify and implement necessary changes themselves.

"One area that I'm working on is being a better coach for my leaders."

Peter Reinhardt shares his personal goal to improve his coaching skills for the benefit of his leaders.

• Peter Reinhardt emphasizes the importance of guiding team members to find their own solutions and take ownership of their improvement.
• He suggests a structured approach to feedback, involving asking if the team member agrees with the feedback, and expecting them to come back with a plan for improvement.
• The process includes experimentation, reflection, and continuous practice to get better at a given skill, such as delegation.

One, do you agree with that feedback? And two, walk me through how you think you're going to get better at that and come back in two weeks with a plan.

This quote outlines a two-step feedback process where the individual must first acknowledge the feedback and then create a plan for improvement.

Did it work? Did it not? What's your reflection? What are you going to do next week?

This quote suggests a cycle of action, reflection, and planning for further action as a method for continuous improvement.

• Peter Reinhardt discusses the relationship between fear, accountability, and boldness in organizations.
• He acknowledges the difficulty of managing this relationship as organizations scale.
• Reinhardt emphasizes the importance of having team members set their own goals and recognizing the emotional aspects behind these goals.

I think it's something that gets harder as an organization scales.

Peter Reinhardt acknowledges the increasing difficulty of balancing fear and accountability in a growing organization.

Like if someone sets a stretch goal and you hold them accountable as if it was a table stakes, I think you have to have some intuition and balance for the emotional aspect of what really was behind the written goal.

This quote highlights the need for leaders to discern between stretch goals and table stakes goals, and to consider the emotional context when holding team members accountable.

• Peter Reinhardt describes the emotional complexity of going through an acquisition.
• He expresses that acquisition brings a mix of emotions such as relief, excitement, sadness, and loss.
• Reinhardt reflects on where the emotional journey settles post-acquisition, which for him was excitement about future possibilities.

An acquisition is a mix of every emotion.

This quote captures the emotional rollercoaster that founders experience during an acquisition.

For me, it's settled on a feeling of excitement of, of like the things that segment and Twilio can go do together.

Peter Reinhardt shares his personal resolution of emotions post-acquisition, settling on excitement for future collaborations between Segment and Twilio.

• Peter Reinhardt discusses his recent reading and its impact on his understanding of gender dynamics and cultural history.
• He mentions the book "The Chalice and the Blade" by a famous feminist, which reshaped his perspective.

It's a book by a famous feminist from the think sort of totally rewrote my understanding of gender dynamics and the religious and cultural history of the west.

This quote reveals the profound impact that "The Chalice and the Blade" had on Peter Reinhardt's views on gender dynamics and Western history.

• Peter Reinhardt talks about his involvement with Charm Industrial, a company focused on carbon removal.
• He expresses the ambition to scale the company's carbon removal operations to a gigaton of CO2 per year.

I helped start a company called charm Industrial that is actually now the world's largest carbon removal operator.

The quote highlights Peter Reinhardt's contribution to climate change efforts through his work with Charm Industrial.

• Peter Reinhardt shares insights on the importance of the sales process in scaling a company.
• He emphasizes the need to ask direct questions to understand customer problems and potential ROI.
• Reinhardt notes that a well-conducted sales process leads to partnership and efficiency.

Segment sales process. Unbelievably important in scaling a company after 10 million in revenue.

This quote underscores the critical role of the sales process in the growth phase of a company.

The number one part of sales process is discovery.

Peter Reinhardt identifies discovery as the most crucial element of the sales process, highlighting the importance of understanding customer needs.

• Peter Reinhardt expresses the three traits he would like his children to have: focus, curiosity, and humility.

Focus. And then curiosity and humility.

This quote lists the traits that Peter Reinhardt values for future generations, emphasizing their importance in personal development.

• Peter Reinhardt addresses the misconception that an acquisition is the end, suggesting that every new beginning requires an end.

I think that it's the end. Every beginning just needs an end to get started.

This quote challenges the common belief that an acquisition signifies the end of a journey, instead framing it as a starting point for new opportunities.

• Peter Reinhardt reflects on the unique contributions of board members and recalls a memorable moment with board member Kim Hammond.

I think every board member is super unique and brings, like, different superpowers to the table.

The quote acknowledges the diverse strengths that individual board members bring to the table.

Five minutes in, she interrupted my presentation to hold me accountable for something.

Peter Reinhardt recalls a significant moment with Kim Hammond that set a tone of accountability in the boardroom.

• Peter Reinhardt expresses optimism about the future of Segment and Twilio, anticipating positive developments.

What does it hold for us? Up and to the right? I think Twilio and segment is a crazy cool combination and lots more to announce there in the months ahead.

This quote conveys Peter Reinhardt's confidence in the synergy between Segment and Twilio and hints at future announcements.

• Carter and Secureframe are presented as solutions for equity management and compliance, respectively.
• Carter simplifies equity issuance for employees, while Secureframe streamlines SOC 2 and ISO 27001 compliance.

More than 16,000 companies issue equity to their employees through Carter.

This quote illustrates Carter's role in democratizing access to company equity for employees.

Secureframe helps companies get enterprise ready by streamlining sock two and iso 27,001 compliance.

The quote highlights Secureframe's service in aiding companies to achieve compliance efficiently.

• Cooley is introduced as a global law firm specializing in startups and venture capital.
• The firm is noted for its extensive experience in forming venture funds and assisting VC-backed companies.

With 50 plus years working with vcs, they help vcs form and manage funds, make investments, and handle the myriad of issues that arise throughout a fund's lifetime.

This quote points out Cooley's longstanding expertise in providing legal services to the venture capital sector.