Lenny Rachitsky: belief

Transcript context

…Covid was an excellent example. And one of my startups back then, called Order.chat, and actually it was the first AI chat back in 2020. And that was meant to help people to make reservations to restaurants. As simple as, "Oh, I would like to make a reservations for six people for tomorrow night at XYZ restaurant." And that chat was actually very, very successful in Israel. And the reason is that we actually built an engine that had facing the user with a chat but also facing the restaurant with a chat. So we did not require any integration, we could go online anywhere and actually cover all the restaurants in no time. And that turned out to be pretty successful and then Covid hit. And guess what? All the restaurants were shut down for hosting guests and there were no more reservations for restaurants. Now we were really good at that, but we did not have enough funding to actually pivot into something completely different. And the result is that we had to shut it down. And still people still ask me what happened to that? What happened to that was Covid. I feel like Covid happened to a lot of companies. And it feels like that's kind of an impetus to this chapter. I think you even said that, it created so many crisis across so many companies you were involved with, helped you realize a lot of companies and founders are just not prepared. So by and large I would say end of the day, we look at the global crisises and we say, "Oh, this is going to impact an industry." But as an entrepreneur, you don't care about the industry, you care about your own startup, that's it. And if the rest of the world is suffering from the same problem, doesn't help you, not even a single bit. So your problem is your problem, that's it. And then you need to abstract that and basically realize, okay, wait a minute, I will define a crisis as something that you already had that is significant, disappears. So let's say that you already have millions of dollars in revenues and all of a sudden your biggest customer decide not to continue and you lose half of your revenues. All of a sudden you basically say, "Wait a minute, I have to adapt, something significant happened." And that something significant is that your revenues disappear or maybe your funding disappeared or maybe ... So in general, the first type of crisis will be around cash. All of a sudden your cash is not the same as you expected, something happened, maybe funding, maybe revenues, maybe projection, maybe you lost a big customers, a cash crisis. And then you need to adapt. The second one, which is even more significant, is that you lost product market fit. And that might happen, it might happen because of regulations, because of competition, because of something dramatic happened that there is no more value into your product. And we are going back to basic, product market fit is very simple. That means that you create value to your customers, this is what it is. And you never heard of a company that did not figure out product market fit. They simply died, that's it. And by the way, product market fit in general have only one metric, only one metric, retention. Look, it's really simple, if you create value, they will come back, that's it. If they are not coming back, that means that you are not creating value. And so in your startup journey, this is going to be the first phase, and it's going to require a lot of iterations and it's a journey of failures. So we're going to try something and it doesn't work, we're going to try something else. And we keep on trying until we find one thing that does work. But once you figure that out, you're ready to move to the next part of your journey. But what if it's all disappeared? What if all of a sudden someone changed their regulation? Someone you rely on, a very unique data, that you were able to build and all of a sudden someone create a way to access this data for everyone. What if there is a competitor that makes you irrelevant? I'm using iPhone, obviously a lot of people using iPhone and I'm using that for a long while. iPhone is born in 2007. Before that we used to have different phones with keypads. And when iPhone was introduced, Microsoft basically say this will never work.…

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