#357 The Psychology of Scaling Startups: A Deep Dive with Isar Bhattacharjee

Mehmet: [00:00:00] Hello and welcome back to a new episode of the CTO Show with Mehmet. Today I'm very pleased joining me from the UK, Isar. Isar, the way I love to do it is I keep it to my guests to introduce themselves. So tell us a bit more about you, uh, what you do, what you are up to currently. So the floor is yours.

Isar: Yeah, so I am a people in organization expert. Um, I have a kind of background in psychology and organizational psychology. And at the moment I run a company where I do work with startups, typically series A to C startups. I round the kind of 80 people to 300 people mark and I kind of help them think about some of the people issues they're facing.

Isar: We do discovery work and then we try and Do interventions that we measure the effectiveness of so we're trying to help them fix their people side

Mehmet: cool, um, it's it's a very interesting area to be in isar and I can understand You know, I ask usually this for [00:01:00] for people who goes in tech but for you like you're in psychology But you decided to work with startups, which is yeah You know from psychology perspective, we know like the founders are always like on tension, which is they are right I know it even from myself, you know, like when you start any project not the company so What attracted you to be in that space specifically?

Mehmet: Like I mean Why? Yeah, you decided to to focus your research and experiments on on the startups.

Isar: Yeah, so I think um Yeah I think there were a couple of different reasons. So I think the first reason is that startups are going through like a very rapid period of change. And so I think there's kind of a, I don't know how common this is globally, but there's kind of a joke amongst London startups, which is that every time you double or triple in size, you're a totally different company to who you were before.

Isar: And the kind of period of growth that I'm looking at, companies are sometimes doubling or tripling in size every year for maybe two or three [00:02:00] years. Right. consistently. And so they have to really be in a process of rethinking as an organization, how they tackle different people problems because they're like totally different companies each year.

Isar: And so I think that was an interesting kind of puzzle to, to work on. Um, I think the second reason frankly, is because startups are. much more willing to experiment. It's kind of by their very design and their nature to, to build experiments and to test things quickly. That's how I like to work. I like to test whether the interventions are working.

Isar: I try and do randomisation experiments and the language of that kind of worked very well when having conversations with startup founders. And then the third reason, frankly, is because the range of companies at that size is much wider. And I think it allows me to look at a very broad range of people problems that you might not see in slightly larger companies that tend to be kind of maybe like B2B SaaS providers.

Isar: Whereas in the startup world, I've worked with, I've worked with [00:03:00] B2B SaaS providers, I've worked with B2C customers. Like companies, I've worked with hardware companies and AI companies, and so it's kind of a very fertile ground for a very diverse group of individuals and diverse group of skills and a diverse group of problems that those companies are working on.

Isar: So. I think all of those reasons were kind of reasons I thought it was an interesting space to work in.

Mehmet: And I'm sure like you see a lot of different personalities, different kind of Yeah. So I want to start from an area which is, I know like you, you, you talk and you focus on in your, uh, in your work. So let me see.

Mehmet: And. You know, this is your opinion that I know you have that companies think about people topics in the wrong way, right? Yeah, it's like a very thought provoking thing so what I want to understand from you is like what do you mean exactly by this and You know, especially if we focus [00:04:00] also on the startups, like how, how we see the, you know, the way, okay.

Mehmet: Some people, they don't like this term anymore, including myself, you know, the HR, the human resource. So, so, so how, how do you see this evolving currently in this space?

Isar: Yes. So I think there's maybe two things to talk about, which is like, how do I think it's evolving more generally? And then how this in particular kind of manifests in startups.

Isar: So I guess if I start with the general, I think if you look at the history of People functions and HR functions. You kind of have from the eighties and nineties, all the way up to maybe the kind of early two thousands, HR and people was a very process oriented role. It focused on what today we kind of call HR operations, things like payroll, things like contract work, things like, um, policies, those kinds of things were, were the heart of what those functions looked at, you know, Um, and then kind of [00:05:00] in the mid 2000s, kind of post actually maybe later than that in 2010 or so, kind of post financial crisis, there was increasingly a, um, big kind of war for talent.

Isar: So what happened was actually a lot of the really talented people up until 2008 went into financial services. And then suddenly they started to leave financial services kind of after the global financial crisis and companies. who were not financial in particular, tech companies were starting to compete for those people and the talent, um, to be their devs and like a bunch of other kind of quite thoughtful, high value expert roles.

Isar: And so suddenly having just an HR function that operations was kind of not enough anymore. And so then companies developed what I think we now think of as like people experience functions, where in addition to kind of your HR ops, they also do like learning and career development. They also do things like, um, like [00:06:00] benefits and wellbeing.

Isar: This is where like, you've got a lot of the kind of. 2010s kind of bribery that people think about, which is like pizza nights and cereal in the office and things like that. And those, that was like, I think, better because it kind of treated human beings not quite as resources and thought about what some of the incentives were to come to a job and find that valuable and to stay there.

Isar: But at the same time, it's still quite shallow, right? It's still just about giving people stuff. And, you know, I, I don't know, that, that to me never felt like it was particularly complete. And actually, if you look at a lot of modern people functions now, they're starting to shift a lot more to think about people as just a lever to an organization to impact its performance.

Isar: And if you want people to be a performance lever, you have to think more thoughtfully about what the environment is that they work in. That's where things like how much of your remote, how much of the in person comes in. You have to think actually outside of the people function. Like, how do you set [00:07:00] goals?

Isar: Like, do you do an OKR process? Does that sit within your people function? Does that sit within your teams? How do you run that? And so a lot of these kind of more organizational levers are actually kind of quite crucial to how people perceive their work. And I think if you think about the people function more as a performance function, I think that's a much better way of thinking holistically about how some of this stuff works.

Isar: So I think that's kind of the general trend. And then I think within startups, it's a bit, it's a bit of an even trickier picture for two reasons. Firstly, because when you're very small, like let's say you're 20 people, you get a lot of the. the people stuff for free. So because it's very small, it's, you get a lot of things totally, um, like the feeling of being in that company is exciting.

Isar: You don't have to spend so much effort communicating across the company because all of you know what's going on everywhere. You don't have to have role clarity because kind of everyone's doing a bit of everything. And so, The transition from that period [00:08:00] to a period where you're suddenly 200 people, often by accident, because your product has just done pretty well, and you don't necessarily have founders who have run companies before, like that transition is really hard.

Isar: And so I think a combination of trying to make that transition and then trying to think about. What you even want that people function to be those are like the two big trends that If you're in a startup, you have to really be thinking about at the same time if that makes sense

Mehmet: Yeah, absolutely makes a lot of sense.

Mehmet: I would say is our back and this is extends also Um, you know to your point that the trends that are happening over there um Now continuing on the people and we know this especially happens in startup and and you know interestingly enough Um, you fo you fo you said you focus on, on, on certain startups.

Mehmet: So, um, and I'm asking you because there's another term, uh, you use, which also I have an opinion on it, but just I [00:09:00] want to let you know, let you explain to the audience about it, which is, you call it organizational depth, right? Yeah. Um, so, so in this. Space of startups, like what is organizational debt? And of course, it's a challenge and first let's, let's define it.

Mehmet: And then how do you usually address it?

Isar: Yeah, I guess. Um, so maybe if we start with what is organizational debt? Um, so this is the CTO show. I'm sure most people listening will have heard of the term technical debt. Um, organizational debt is very similar, which is like when you. are a company and you're growing, um, you will often hit decisions like forks in the road, and there will be a path that is quicker and easier to take, um, but might not be the best solution for you in the longterm.

Isar: And then there's a path that is more painful and will require more of a reset, um, and might be better in the longterm, but requires [00:10:00] you to put in much more effort and time and money now. And so when you're growing as a startup, it's actually, you know, sensible and rational to often take the kind of quicker, easier path first.

Isar: And, um, in the same way that when you're building quick solutions in technical products, you might build a bit of a quick hacky solution just to test if it works. Um, and if you do that consistently over time, eventually some of those Trade offs that you've made where you want to move quickly, um, start to build up and you have to spend time to pay down that organizational debt in the same way that you have to spend time to like refactor parts of your tech stack.

Isar: Um, so. Why do I call it organizational debt? There's basically two reasons. Number one, um, there's a, you're basically borrowing effort from the future into the present because you're going to have to put in effort to change that thing eventually, but you're just not going to want to put in effort now. Um, and the second reason is [00:11:00] because in the same way that with tech debt or even like monetary debt, when you build up that debt, it can build up quite quickly and you have to pay interest on that debt.

Isar: And the interest that you pay on that debt is that, um, as an organization, as you build up more and more org debt, Stuff starts to grind to a halt, slower and slower. And, um, things that used to work very well, like, start to build up and not work. So the very, very simple example that I always think of that's a great example of this, is if you have a new task that needs to be done amongst your team, let's say your team is only like 25 people, and you need to do a new thing, like, maybe it's regulatory, or maybe it's um, boring processy thing that you have to do for customers, um, you can do two things.

Isar: You can either. give that task to someone else who's already in the company doing other stuff, and you just say, can you do this on the side? Or at some point, you can hire someone whose whole job it is to [00:12:00] do that task. And for almost every company, it makes sense to do the former, which is just ask someone to do it on top of their work.

Isar: But eventually, you can't. that person's job is going to be very fragmented, their role doesn't become so clear, they won't have time to do their original job because they're doing a bunch of these new tasks, and so eventually you will have to hire someone to do that, but it doesn't make sense to do immediately, so you're kind of pulling off the effort of doing that till later, if that makes

Mehmet: Absolutely makes sense.

Mehmet: Now, I'm curious, you saw like, uh, Sorry, not technical depth, organizational depth, um, how far it can affect, because as the organization, as a startup would grow, how this will first affect their, effectiveness, I mean, from the way they can take decisions from the clarity within the team, and then most importantly, how this affects the [00:13:00] culture in overall.

Mehmet: Yeah, so I think,

Isar: um, I think When it comes to organizational debt, like maybe I should actually start by saying, I think it's rational to build up a certain amount of organizational debt. If you're not building up any debt and you're trying to do all of the long term solutions immediately, that's actually really bad.

Isar: And it's bad for three reasons. It's bad because you're not going to be moving as quickly as you could otherwise, which in a startup, that's crucial. It's crucial to move quickly. It's crucial to test things before you're You like invest lots of time and effort. The second reason is frankly, you're going to be designing solutions that you don't need, like they're over engineered, they're over complicated.

Isar: And because you're trying to build something longer term, you might actually be wasting lots of time and effort on something that is not actually helpful for you. And then the third thing is actually organizations change and their needs change. And so your needs at 20 people are different to your needs at 200 people.

Isar: And that's different [00:14:00] from your needs at 2000 people. And so You might actually be implementing a scalable solution that is actively negative for you at the time. And you don't know whether that solution will actually work for you when you're bigger, because there's uncertainty. It depends on how the actual trajectory of your company.

Isar: So it's rational actually to build up org debt, but there's two costs to it in general. The first cost is that, um, some stuff just eventually doesn't work and it breaks. And stuff that breaks is actually the. The easiest stuff, because when stuff is really breaking, you can see it quite visibly, you can feel the pain.

Isar: And so, you know, that at that point in time, it's time to change. So a very good example of this is how companies. Uh, that are relatively small, set priorities and make decisions. So when you are 50 to 80 people, you can fairly easily set top down priorities and make decisions which are very founder led.

Isar: Um, I mean, I think there's a bit of a Stereotype about startups that they're these kind of [00:15:00] high autonomy environment. And actually, my experience is that that has not been true in very, very small startups. They've actually tended to be very founder led because the founder has quite a clear vision of what they want.

Isar: They know the technology the best. They're talking to a lot of customers. And so actually you can, you can run a smaller company in a very founder directed way. But when you hit like 200, 300 people, suddenly that doesn't work anymore because there's only so much time amongst the founders. They start to become a massive bottleneck.

Isar: The founders who might previously have been super aligned and you would take for granted that what one person says is exactly what the other person would say. If you ask them over time, their views might deviate because they're seeing different parts of the business. And so actually, like, those processes break, and when those processes break, it's very painful, but at least it's visible.

Isar: So organizations can then change their processes. So like, when it comes to priority setting, the classic example is that you shift to a model where you do OKRs, and you kind of do a quarterly process where [00:16:00] you cascade down priorities, and that is a kind of process that makes sense at 200 people, but didn't really make sense at 20 people.

Isar: So I think sometimes the stuff breaks really badly and then you need a big reset point. I think the bigger risk is the stuff that doesn't break in a loud and visible way and just gets slowly It just gets slower and slower and slower over time. And it, it, it kind of never reaches breaking point, but like the debt accumulates until you're paying lots and lots of interest.

Isar: That happens a lot when it comes to like role clarity and organizational structures. It happens a lot, frankly, when it comes to things like, um, Um, how you do leveling off people's roles, like, especially when you're a small startup, it feels very tempting to give people titles like lead or head off or chief ex officer and like, those are titles that in the short term feel, you know, Good to give [00:17:00] away, it gives recognition, it feels like it's, it's giving people career, like, progression.

Isar: But that's actually a massive trap, because if it doesn't come with a clear change in role, it, it means that actually you might set yourself up for failure in the future. Secondly, if it's not appropriately leveled, um, people might start to feel quite cynical about their roles. It's also very hard to hire external people at the right level if you're leveling inside is all screwed up.

Isar: So like that's a great example to me of something that kind of very slowly goes wrong and that you constantly pay the cost off as opposed to something that just Gets really really bad and then breaks and then you can quite clearly see it's broken and fix it if that makes sense so I think Different problems break at different speeds and I actually think the stuff that breaks quickly Is way easier to solve than the stuff that breaks slowly if that makes sense.

Isar: Yeah.

Mehmet: Yeah, it makes sense Just out of curiosity Issa. So I'm sure like at some [00:18:00] stage, you know, like, um, the founders themselves will, will start to call you. So, so is there a, like a breaking point when usually founders, they found themselves, okay, we, we, we, we've messed the things here and we need someone to help us.

Mehmet: Is there like a breaking point?

Isar: Um, so it's funny. So I have like proactive and reactive clients. Um, so my reactive clients are the ones who phone me up when stuff has started to go wrong or has significantly gone wrong. Um, And those tend to be first time founders, and they tend to be in instances where something has personally struck them as something that needs to change.

Isar: So a good example is actually a couple of people have come to me at the point where some really talented people in their organization have either quit or threaten to quit, that's often kind of a breaking point. Another breaking point is when they just [00:19:00] reach like a, it can be a bit more of a like slow burn and they just reach a bubbling point of frustration where it feels like things are just not working and they often can't pinpoint exactly why things aren't working and so then we often do discovery work with their company to like investigate.

Isar: I basically use a bunch of social psychology research techniques to To pinpoint what are the actual root causes of the issues they're facing Um, so those are your reactive clients. Sometimes actually I have proactive clients. It's much less common actually because um, like I said It's pretty rational to build up a decent amount of this people debt.

Isar: But what I find is my proactive clients are disproportionately people who are multiple Exit co founders who have like done this before and it's often Transcripts provided by Transcription Outsourcing, LLC in a period before they know there's going to be some challenges either because they're doing geographic expansion, or because they're going to do a big funding round and anticipate doing a big headcount expansion, or they are about to just go through a [00:20:00] very like critical period for how their company's operating, um, either they have like big growth targets or something like that, and they want to make sure that the organization is in a decent state before they go through that period of kind of higher pressure for whatever reason.

Isar: Um, but almost always those are people who have run companies before and they've kind of seen stuff go wrong at previous places they've run whereas all my reactive clients tend to be first time founders. If that makes sense,

Mehmet: absolutely makes sense. And, you know, like, of course, as to your point, the ones who, uh, faced it, we'll, we'll, we'll know that these things will happen.

Mehmet: Culture change all the, all these things. Now, you mentioned something interesting about, you know, sometimes giving the people. Which is from, I know it for a fact, it's, it's like, um, kind of a, doing a good deed or, you know, thinking they're doing the right thing about, you know, giving these titles and, you know, the, the [00:21:00] skills of management.

Mehmet: Yeah. So if we want to think about, you know, what are, you know, some of the challenges modern managers. face, uh, compared, for example, because now we can see like, this is more often, uh, happening. So how do we compare this management, um, and you know, the challenge that they're going to face compared to maybe like previous generations?

Mehmet: What are you seeing? Like, I'm sure like you hear a lot of things, maybe complaints from both sides from, from, from them as managers and maybe from the people who are managed by them. So

Isar: you definitely hear complaints from both sides.

Mehmet: Yeah. Yeah. So, so I'm curious to know, like, how you are seeing also like these things changing currently.

Isar: Yeah. So I think on the giving people titles, I think that's a bad answer to a real problem. So the real problem. is actually there's two sets of real problems. The first part of the real problem is that at a [00:22:00] startup or even actually a scale up in a lot of organizations that are kind of 500 people or fewer, it's very hard to give people a very concrete feeling of career progression because there just aren't that many roles that you can promote them into because your organization is fairly flat.

Isar: You just don't have the headcount for everyone who's good enough to be a manager. Yeah. And, and so I think if you want to give people progression, you have to like think about progression in a thoughtful and deliberate way. And that's really hard, and so that's where the answer of giving people more titles or giving them a special role, that's where that often comes in because it feels like a much easier answer than being very thoughtful about how you can give them more responsibility within their roles, or help them grow and excel.

Isar: within their role as opposed to like just giving them a more senior role. And so I think the [00:23:00] problem is very real about wanting to give people that feeling of learning. Um, It's also particularly hard in startups because learning is actually, it's quite difficult to learn in a very, very rapidly changing environment.

Isar: Like, I think people often think about startups as very dense learning experiences. It's true that they are dense learning experiences insofar as you get to do lots of different things. But actually constantly changing what you're doing, working in a very high paced environment, is actually not exactly the most effective environment for learning, because you don't have that much space to like, reflect on how things have gone, you don't have that much space to fail and improve, the stakes actually feel relatively high, especially if the organization is facing some sort of like existential threat, right?

Isar: Like if you've got six months of runway, the pressure feels like it's really there. And so it's not necessarily the best learning environment to begin with. And then it's also hard because like career progression is tricky to think about. So that's, I think one big piece. And then related to that is actually [00:24:00] the, the challenge you just mentioned there, which was about being a manager.

Isar: And so actually being a manager, like you say, it's way harder now than it used to be like 20 years ago. So why is it harder? It's harder because organizations are flatter. And so what that means is you just become a manager much later in your career. The second reason it's harder is that, um, we are asking managers to play more kind of player coach roles where they are both an individual contributor.

Isar: and a manager slash coach to other people at the same time. That's a really hard balancing act, especially because you're being promoted to a manager later in your career. You've got much more experience of being an individual contributor than you do being a manager. And so that's just a hard dual act to play.

Isar: And often some of the manager stuff falls off your plate first and you focus on your kind of individual contributor stuff. And then the third reason is frankly, a lot of the organizations. Who are doing really well, are [00:25:00] doing well, not because their senior leaders are amazing people managers, they're often doing well because their senior leaders are really amazing technical people or amazing product people or amazing designers, and those skills don't necessarily overlap with the ability to role model, what great leadership looks like, what great.

Isar: people management looks like. And so often managers don't necessarily have that many role models within their companies of people who are doing this stuff really well. And so, like, if you are a manager trying just trying to do this on your own, it can be can feel like you're kind of Fighting against lots of organizational and institutional barriers to being a really great manager.

Isar: So it's just a tricky challenge to do. And I think that combines with some of the like career progression things we were talking about earlier to make people who are in those roles sometimes feel really frustrated that actually it doesn't necessarily feel like their career is going in the direction they maybe would like it to go.

Mehmet: Absolutely. And now, you know, this brought to my mind another [00:26:00] question, which honestly like Just came out now. So with more people, um, choosing the entrepreneurship, um, right now, that means we're going to see more startups. Now they're going to fail. They're going to succeed. No one knows there's no guarantee.

Mehmet: Of course. Oh, they'll probably do both. Lots of them. Exactly. But. Because you come from a research background yourself, Isar. So how do you see, you know, a potential collaboration between researchers like yourself and these, you know, startups? And the reason I'm asking, you know, because, and you just mentioned about the pressure and the pressure, again, from psychology, uh, point of view.

Mehmet: So we talk about Of course, maybe happiness and, you know, a little bit being stressed, but also there's the resilience, [00:27:00] there's the focus, there's the rest, there's the mental health. So where do you see like, you know, a potential hand in hand collaboration, um, between the startup ecosystem, I would say, and researchers like yourself.

Isar: So I think People are taking the topic of like mental health and psychological performance and well being like much more seriously than they used to. And actually you even see that within the VC community. Like a lot of VC firms have now started offering more like direct supports to startup founders.

Isar: Um, so for example, I know like Boulderton, which is a very big VC here in London, they have a really great program for startup founder well being, um, where they set them up with mentors. They offer them like a. whoop ring, and they do lots of kind of health, well being, and mental fitness stuff. And all of that is great, because I think, like you say, the startup environment is particularly tough, um, in lots of [00:28:00] ways, in the commercial pressure, and the social pressure that comes with it.

Isar: Um, so I think it's important that people are taking it more seriously. I think, if I think about, How I see my role, actually, I think part of the way that I try and work with startups is like a lot of it is about co-creating and like helping people offload some of these challenges to someone who is a bit more of a topic expert so that they don't have to worry about it at least for a short period of time.

Isar: And then once we get to an answer, they can have a clear kind of path forward. Because I think the ambiguity and uncertainty around how you even deal with some of these topics is like what a lot of the founders I talk to. find really difficult to deal with. Um, that being said, like, I think some of the pressures are kind of natural.

Isar: Like, that's just the environment that it's going to be. And like, I do think the point you made about resilience is really important, right? Which is, I think, I think it's worth being very deliberate and thoughtful about. What we actually mean by resilience and actually like [00:29:00] Like i'm a big believer that resilience is actually a system attribute.

Isar: It's not an individual attribute A lot of it is to do with the support system you have a lot of it is to do with the team culture you have like how Psychologically safe your team is how willing to disagree and give support and feedback to each other Um, those things really matter and and those are like key to kind of how you can set up your team for success Um One other thing you mentioned I just wanted to touch on is you spoke about how there are going to be a lot more entrepreneurs and a lot more startups.

Isar: I actually think you're totally right. There are going to be a lot more entrepreneurs. I think there are also going to be a lot more kind of micro companies and solopreneurs. Like if I look at the way that AI massively accelerates how much productivity a dev can be, like how productive a dev can be. If I think about how, Like low code and no code tools make it much easier to ship MVPs.

Isar: If I think about what I've seen in the freelance community, I've seen a lot more companies that are 10 people or fewer and have no real desire to [00:30:00] grow headcount beyond that. And those companies, from my experience, have actually been much more thoughtful and flexible and deliberate about how they work in a way that gives individuals a lot more flexibility and sustainability.

Isar: Um, so I think that's really interesting. And I think that's a trend that's only going to get like more and more clear. And especially because the kind of VC landscape right now is like a tough time to raise funding. And so if you can be 10 people who bootstrap a company to do pretty well and not have to face some of these VC pressures, I I think a lot of people are actually opting to do that instead.

Isar: And that's an interesting trend because I think that will also have an impact on how certain people who are very talented see different types of startups in the future, right? Like if a VC based model is a particular style of growth startup, which is very commercially focused, maybe this kind of smaller [00:31:00] solopreneur like micro enterprise, which is bootstrapped is like an alternative model.

Isar: The bigger startups will have to compete with those smaller companies to find the best people and offer them the most positive effective environment that's

Mehmet: a very interesting one on the on the part of the solopreneurs and I tried I tried to cover this especially, you know when the ai was You know in the beginning of its hype last year So we talked about like how we're gonna see to your point a lot of like smaller teams Not necessarily solopreneurs in a sense like one one company a person Um, but yeah, like I think

Isar: I think I think it's going to be lots of companies that are basically one squad it'll be like six devs a designer a product person and Like maybe like a salesperson and then those eight or nine people can like basically run a company, which I think is, I think that's an amazing thing that we will start seeing a lot more of.

Mehmet: [00:32:00] Absolutely. And you know, like, um, you know, these people, I mean, who are choosing to go to this path, they're, they're becoming more aware that they need, for example, let's say, um, if they are like coming from a technical background, They cannot know, okay, we're going to learn this marketing, lead generation, sales thing, and if they are coming from the opposite side to your point, they're leveraging the no code, local tools so they can, can come up with.

Mehmet: MVPs and even I've seen, I've seen people, you know, I was part of a cohort where, you know, they're successful people coming from zero technical backgrounds and for sure. Yeah. You know, they've built some, some, some stuff. So it's very interesting. I think.

Isar: Yeah, and I think just to build on that, I think there's also the layer of people who are neither technical nor non technical.

Isar: They're kind of like what I would classify as like semi technical people.

Mehmet: Yeah. And those are

Isar: people, for example, who understand enough about architecture, they understand enough about [00:33:00] like design, and they can, you know, draw a decent enough wireframe. And actually, I think those are the people for whom AI tools are actually immensely impactful.

Isar: So I'll get, I'll give just my personal example. It's like, I'm not a crack coder, but I kind of conceptually understand how Python works and I can understand the syntax and roughly like spot where stuff is going wrong. Um, I have a bit of design Experience, but like not deep user experience design stuff, but I can then draw a wireframe, upload it to a chat GPT, ask it to help.

Isar: Work out what some of the building blocks of the code will be and, and do that pretty much on my own. It will take a while and it's even better if it's me plus a slightly more technical person doing it together. But like we can pretty quickly put something together in a way that I think was very difficult to do, like, I don't know, like three, four years ago.

Isar: And I think, I think my general view on some of the AI stuff is like a lot [00:34:00] of it's very overhyped, that's my view. But the thing it's not overhyped for is. Turning semi technical prompts into like code, basically. And I think that it's definitely not overhyped for, and that is a real, like, game changer, I think, to access to, like, technical building, I think.

Mehmet: No, I agree with you. Like, of course, there are some stuff that is overhyped. But yeah, to your point, if you, and this is what we repeated also on the show. So if you get someone to understand the basics to your point of, of the technology, uh, like actually you are more than 50 percent in the technique. If you can understand the Python code, but really I've seen people who muster even without knowing code or anything about design, but because you know, Now we started to see, especially with the new model from open AI, uh, the, you know, the, oh, and the, um, [00:35:00] what, what it can does and really like, you know, people can generate figma out of it and the designs.

Mehmet: And you know, like we, we saw people who just put, uh, the Y frame of a game and then it Gives them a working game. Uh now, but I think

Isar: by the way The flip side of that is that actually the design side becomes much more important because if indeed If the technical side is easier to do then what really matters is what the user experience is and I think like I think that's also interesting like I I Uh, I think as someone who's Focus a lot on kind of some of the qualitative research from a psychology lens.

Isar: Like, I have huge respect for user experience designers who can do the proper like ethnographic research and like user journey stuff from a, from a design perspective. And I think that skill is only going to become more valuable. [00:36:00] As, as we kind of advance some of these tools and get better at this stuff.

Mehmet: Absolutely. And this is why I'm a little bit biased because, you know, I'm not a product manager, but whoever has the skill of a product manager that, and those product managers who value the user experience, plus they know how to put the right features. In a product like these guys will be like doing absolutely fantastic because they, they give the user what they want.

Mehmet: Plus they give it to them in an easy to consume way. So this is going to be, uh, the thing, of course, not just giving features and, you know, just a bunch of things for the sake of that. Now I got to ask you, it's a little bit of an interesting question. Um, I'm sure like, because you've worked with a lot of, of these startups, like Was there like kind of a situation where you said, Oh man, wow, what these guys are up to?

Mehmet: Like they, something that either surprised you too much and you know, or something [00:37:00] that unexpected you find when working with these guys that you faced anything like similar?

Isar: I think to be honest, I think there's a bit of a selection bias of the people who even come to me and ask for help. Cause I think those people are people who are, uh, A, they've acknowledged that there's some sort of organizational problem they want to work on.

Isar: B, they're super willing to get help from someone external. And so in general, they have like a good intention within their company. So there's often nothing really crazy, um, that they've done that like, doesn't make any sense. A lot of it is like, it's just not working, but you can kind of see how they got there or how like over time stuff got worse and worse.

Isar: Um, so I think there's nothing like. Like, I've looked at it and I've thought, wow, that company is totally on fire, in part because I think someone who feels that way wouldn't come to me for help, if that makes sense. Um, what I will say is that there's lots of interesting stuff we learn through the process of [00:38:00] doing interventions and measuring them.

Isar: Like, I think, um, I think one thing that I, I, like, probably my favorite experiment that I've run so far, we were doing discovery work with a, um, with a kind of series A, I think maybe series B, I can't remember, there were about 120 people. It was a software business. And, um, one of the things that came out of discovery was even though there were only 120 people, They, they had quite siloed communications across the different functions.

Isar: So like, um, like sales were promising things that, uh, product weren't planning on delivering and customer success would feel the cost of that from the customers who were not getting the features they kind of expected or wanted. And so they had, there was a lot of like, The left hand not talking to the right hand, which is a very common problem, by the way.

Isar: It's like really, really common in startups. So we did a bunch of interventions and none of it was really working. So we like the things you hear companies often say is like, maybe we should have an all hands meeting. Um, [00:39:00] in general, I'm actually not a massive fan of these big all hands meetings. I think they're a waste of time.

Isar: But anyway, we tried it. It didn't work. Um, a kind of company email where people shared like a newsletter of what was going on. Like that didn't seem to work either because people didn't really read it. Um, And so what we ended up doing was we actually just looked at their physical office. So they work in person three days a week.

Isar: And, um, if you look at how they're sat, they're sat in their functional silos. So sales sits with each other. Um, product sits with these product and tech kind of sit together. They're like, um, ops people sit together, the finance people sit together, et cetera. And so. Like, that's not great for how much they talk and communicate with each other.

Isar: And it creates kind of maybe a bit of a amplification of some of the silos. So what we did was we put, um, cameras in the room. We asked everyone for permission first. We put cameras in the room. We measured who spoke to who, and what you find is like 90 percent of all conversations are with the people who are opposite you or next to you.

Isar: So there's something about the people you're sitting with. [00:40:00] Now that can be either form of causation or correlation. So it can either be because you sit next to the people that you need to speak to, or you speak to the people you happen to be sat next to. It's super not clear from the data that we had which was which.

Isar: So what we did is we randomized their seats and we looked and we saw that, okay, if you're sitting next to people who are different function, do you still talk to them a lot? And the answer was kind of, yes. So about 70 percent of your interactions after the randomization was still with people who are opposite you and next to you, even if they have nothing to do with your job.

Isar: So there's something about physical proximity that leads to you engaging with and interacting with people. And so we also did a second test alongside all of this, where at the start we asked people, okay, what are the priorities? Going on in your function at the moment. And then what do you think of the priorities that sales and customer success and finance and product are working on?

Isar: And, um, you compared the self declared answers to the answers that the other function said about themselves. So you'd say like, what does finance think product is doing? And what [00:41:00] does ops think product is doing? And how close is that to what product thinks product is doing? And you can use that as a measure of how much one bit of the business understands another bit of the business.

Isar: What we basically found is before the randomization was really bad, people had no idea what other bits of the company were doing. And actually, after the randomization, it was much better, and it was directly correlated to how close you were physically sitting to someone in the company. That team. So if you were next to a product person, you'd have a much better idea of what product we're doing.

Isar: Even if you weren't really chatting about work on a day to day basis, it's like some sort of random collision, osmosis communication, and, and that's really interesting. That's like a result that I think is quite surprising. And at the same time, we did this experiment, actually, Zapier. Um, who are a fully remote company, but they do off sites.

Isar: I think three or four times a year. They also did an experiment where they looked at who people talk to, um, after offsite, this is APR. Like I, I'm sure most of your listeners will know Zapier, but they have some. amazing data because [00:42:00] everyone in Zapier uses Zapier integrations all the time. So, um, they have their metadata on Slack, like who in Zapier talks to who on Slack, which is like a really amazing form of data.

Isar: And what they find is that actually, if you go to an offsite with someone and the offsite isn't super deliberately organized, you tend to interact with people who are the same age or demographics as you. Or in the same function as you, but who you don't normally get to talk to. Like, for example, they're in a different geography or, um, you just don't tend to work very closely with them.

Isar: And so those are the people you interact with at the offsite. And over time, you can actually see that the amount you communicate with those people is higher than other people on the offsite. And then that kind of slowly fades over time. So there is this bump from spending time together, but actually what they then did was there was a random offsite they had where people had to take taxi rides between certain venues in the offsite, and so they randomized taxi allocation, um, and what they found is that If you [00:43:00] spent five minutes in a taxi with someone, even if they were a different demographic to you, even if they had a totally different job to you, um, you're much more likely to talk to them on Slack six to nine months after the offsite.

Isar: So there's something about physical proximity to people that allows you to understand much more about their role and understand, kind of, them as a human being and see what they're working on. And. I think that the extent to which that is true to me was surprising because I was generally a quite pro work flexibility person and I actually think i'm still quite pro work flexibility, but like It's clear to me being deliberate about your in person time really matters and it really has An impact even when you're not in person together if that makes sense

Mehmet: Absolutely.

Mehmet: Absolutely. So yeah to your point, I think because you know the way we act The way you explain because we feel, you know, it's a very well [00:44:00] known, uh, thing. I'm sure you are more expert in this, uh, than me, you know, the feed that we belong to, to our tribe. Right. And if we don't find that our own tribe, we try to find a tribe that is.

Mehmet: Similar to us. So this is why, for example, and I remember also when we used to go, like I used to work for startups and even big companies, we go to these like yearly, uh, events, the sales kickoffs and so on. So you see always these, you know. The same group, let's say salespeople sit together, like, right. So even if they're from different geographies and yeah, like I remember one year, what they tried to do is something similar.

Mehmet: It was not like for driving the cab. Uh, it was riding the cab just was for the dinner. So they set up the names in a way, very random. So there's no one single table where. Two people would be from the same group or from the same geography. So at least, of course, but they didn't measure like if they interacted or no, uh, but yeah, like it's a very [00:45:00] interesting one as well.

Mehmet: It's not like as we are almost close to an end, so I want from you two things. So final advice, if you can, to, to, to the founders in general, and also where people can find more about you.

Isar: Sure. Um, so, okay. Final advice to founders. The advice I think is evergreen for all founders is, um, do fewer things and do the fewer things that you do way better than the large number of things you do today, like I think the number one most consistent finding I have in discovery work across companies is that they're trying to do too much at the same time.

Isar: And the amount that the quality of the work they're doing in each of those areas is lower than they would like it to be. And. Saying this is much easier than doing this because making active trade off decisions and prioritization decisions is really hard But it's almost always true that companies that do half as many things and do them twice as well Will have much better outcome.

Isar: And so I think that's my general advice. I think that's always true, but it's really [00:46:00] important Um, if you want to find out about my stuff, um I actually am soon to take an in house role and so won't be doing much startup work for it a couple of years while I do that in house role at a slightly bigger fintech company, it's a 3, 000 person fintech company, um, but I will continuously be writing about psychology and organizational psychology in the world of work, so if you can go to uncover.

Isar: substack. com, you can follow me and read some of the research. That we're doing and the stuff i'm writing

Mehmet: cool. I will make sure the link is in the show notes Thank you very much. Isar. I really appreciate the time Yeah, and you know all the insight that you gave us today. I think this is very valuable for a lot of founders and even like First time managers, not only first time founders and people who are interested in in general into into the Entrepreneurship and and the startup ecosystem.

Mehmet: So thank you very much for your insights today And as usual, [00:47:00] this is how I end my episodes. This is for the audience if you just discovered this podcast Thank you for passing by. I hope you enjoyed. If you did. So please subscribe and share it with your friends and colleagues. And if you are one of the people who keeps coming and listening to us and, you know, following us, thank you very much for doing so and sending your comments, keep doing that and please keep preferring the podcast to your friends and colleagues.

Mehmet: And as usual, thank you very much. Indeed. We'll meet again very soon. Thank you. Bye bye.