Ethics, Pivots, and the Future of Work: A Live Q&A with Vercel's Guillermo Rauch

Someone shared a framework recently which was lowercase P pivot or uppercase P pivot, and both are useful tools to have in your toolbox. Because I feel like when we built Next and the early version of Vercel, we did like a small P pivot on focus and trimming down bad ideas and leaning into certain use cases and certain infrastructure. But it can also be useful to just like, hey, like this thing that I went down this path, the assumptions were completely wrong. Start over. You basically have to get comfortable with pivoting. It's a thing you're doing very often. I also, I'll emphasize, you really have to think, try hard to think ahead while staying very focused on like the most imminent thing, because a startup that's venture-backed is a story. It's like the Apple 2 to the Macintosh to the… There's always something ahead, and sometimes you can pull it forward.

That's a great one because there's just so much garbage on X coming from startups. Maybe it's always been the case, but I see what you're seeing, very low quality launches, people stealing shit left and right. I've always believed in this idea of play long-term games with long-term people. I do think it pays off to just conduct yourself with great integrity, and you might not get the highest number of likes, but you got something out into the world that's high quality to you and adds value to the world. And so I'll take that. This goes back to the importance of feedback. It's actually really useful to for example tweet or launch something and nobody gives a shit, because you're getting useful information. You know what sucks is you created shit and then you paid a bunch of bots to retweet your shit, and now you're just lying to yourself. You're lying to other people. You might be SBF in 5 years. You might be wearing orange jumpsuit.

So I might just rather do the high integrity thing for as long as possible. Think long term, and I really really appreciate getting signal. I don't want people to be yes-men, or like, oh cool I have a lot of followers so therefore I have to get a lot of success, that kind of thing. I really just want to get true signal from the world.

I guess it depends what they're saying. I think investors can sometimes point you towards like, hey, is my idea fundable? Am I is the market big enough? There's definitely some signal to be taken there. I think it's very rare for them to give you startup ideas, like go build this other thing. So you should learn from it, but I don't know if it's like revenue multiple maximization as an equation to aim for. I think it's probably more like okay, what does it take for this idea to be fundable? And if you talk to 20 investors you'll get some sense of it, assuming you really care about getting investment, you eventually need it to potentially be fundable. But I don't know if I'd drive actual startup ideas from it.

Someone shared a framework recently which was lowercase pivot or uppercase P pivot, and both are useful tools to have in your toolbox. Because I feel like when we built Next and the early version of Vercel we did like a small P pivot on focus and trimming down bad ideas and leaning into certain use cases and certain infrastructure. But it can also be useful to just like, hey, like this thing that I went down this path, the assumptions were completely wrong, start over. And I think sometimes this happened with new product lines, some things that you might not even have seen because we also now have the privilege of being able to roll out products to smaller audiences and then kill them in the cradle. It's dark, but you basically have to get comfortable with pivoting. It's a thing you're doing very often. I also, I'll emphasize, you really have to think try hard to think ahead while staying very focused on like the most imminent thing, because a startup that's venture-backed is a story. It's like the Apple 2 to the Macintosh to the… There's always something ahead and sometimes you can pull it forward. And one last point, Lyft has one of the best pivots of all time. In that case, the original idea was carpooling software, started off selling to consumers, that didn't quite work, so then started selling to universities. Move from B2C to B2B. That business raised a little bit of funding but it wasn't growing like gangbusters. But then a competitor emerged that kind of figured something out, which was Uber. Uber kind of figured out this black car hailing, and they looked at them and they're like, hey, this is something that we can actually streamline off. And then Lyft's big innovation was peer-to-peer ride hailing, so it was a spin on what was already working. In that case, it was a competitor that inspired the idea. So in some cases, the inspiration can come from anywhere.

There's many things. I'll tell you one that immediately comes to mind. You might come to me and say we should be working on this because it's really exciting, and you might be totally right. What I try to do sometimes is reframe it in terms of a pain that's very imminent and visceral. It's almost like we can totally do that and we can earn the privilege to do that if we first do this really foundational thing that's broken. I actually had a conversation like that today, was like, yeah, that's an awesome idea and we will do it. In fact, I told this person we will do it, but first... and then I try to make that example or that counterargument very objective, like it might be something that I heard from a customer. This is why I'm always trying to immerse myself in customer experiences, because customers win arguments. You and I could disagree over something, but customers or metrics or something that we can ascertain about the world. So it doesn't look like 'ah, that's just your opinion'. So that's a version of saying no which is 'not yet'. We have to earn the privilege to work on that next thing. And I also try to inspire the team in the same breath, like just imagine how great the world will be once we accomplish, once we get this massive boulder out of the way. So fundamentally what you're doing for your team is just this exercise in ruthless prioritization, in conviction on what is the fundamental thing that you're solving so that you can turn down all of the other embellishments that you could be working on.

It was a good idea, right? Right time.

The question is like how do we push our team to work on the frontier.

One thing that I really pushed the team on is we're building the factory that produces software and customer outcomes. We're not working on the outcomes directly. So in many ways, writing code by hand is dead. We all agree. But what's going to put you ahead of your competitor is if you can manage the agent or create the harness of agents that gives you those kind of outcomes and they outpace the competition. A really good example is my CTO created a tool called DeepSea to run massive parallel analysis of software audits at scale, especially security cybersecurity audits. He, one human being, was able to orchestrate 10,000 concurrent sandboxes to do the work that would have taken a company quarters worth of research. Not everyone is there. It's not for everyone. It's click that way. He has a lot of architecture experience which is awesome. If you're super experienced, what's nice about AI is that it's not a young person's game alone. Obviously young people are really fast to adopt tools and really quick, but wiser more experienced people are also extremely good at architecting large systems. I think we're all in the business of how do we create these factories of output. I push our design team to do the same. Okay, you have great taste and you can craft the pixels, chisel the pixels out of this canvas by hand, but I try to challenge them with what is the harness that allows you to produce that design outcome. A really concrete example of this is things like Remotion or Hyperframes, which are agentic systems that produce video. We used at the beginning of the early days of the company to produce really cool videos to ship on social media, and they would take us forever, but they were worth it because they were really cool videos. So can you have your cake and eat it too in terms of productivity and quality and leverage agentic systems correctly.

Argentina, right? Yeah, from Argentina.

Well, funny enough, because I was working a lot on open source, and this is the beautiful thing about Silicon Valley: people would just email me saying, 'Oh, what you're doing is really cool, do you want to get coffee?' And I was like, 'Sounds great, let's go.' And I started building a network out of people. I always say to people, networking kind of sucks, however one way to do it right is to lead with some valuable entity or object that you're working on. All of my networking was predicated on, 'I launched this open source framework. What do you think? What are you doing with it?' So I try to always be building value and then network with the people that found that value, or sometimes not. Sometimes they had bad things to say, but still try to connect and do things like that. I remember people early in the journey that taught me a lot of lessons about how to navigate Silicon Valley. I remember a gentleman named Carl Jacobs. He reached out really early on and he basically explained to me why my pitch for fundraising was not resonating. And he said, 'The problem is that if you come in too confident, maybe too Argentinian confident, and you tell me everything that's true about the world and how everything's going to work, it's not great because we know investors that you don't know all the answers.' So he said, I remember his advice: 'Why don't you present things as a hypothesis and why don't you invite the other person to participate in? Hey, if we share this hypothesis about the future, we can both get really rich.' Obviously not in those terms, but we can build amazing things together because we share this common understanding and we're willing to take a chance. So I actually dialed back the amount of certainty that I had because I was an extremely high conviction individual. Little things like that gave me pointers on how to navigate this system, how to pitch, how to talk. Always pay attention to that kind of feedback. There's so many, I think the original question was what gave you that inner conviction that you could do something like that. There's a lot of points in my life that gave me conviction that built up. There's this very specific thing: I started my first startup in London, and we were really struggling, we never raised any money or anything like that, but I was an engineer, and especially in 2006, a ton of the entrepreneurs in the UK were not engineers. So I remember talking to people and everyone was going like, 'Oh, I have this idea. I want to build this. I wish I could build it myself.' And they were like, 'Oh, can you help me?' But that gave me this real confidence that I had this skill set that was so valuable to building things. That was my personal unlock to go, before then I'd kind of just coded because I was good at it, I just did it for fun and I tried to make money with it. But that was a point where I thought, wow, I have this really valuable skill set and I can make anything. And therefore I can be an entrepreneur. But yeah, thanks everyone for listening. Please leave us a review on whatever channel you're listening on. Makes a big difference to the algorithm and to the success of the show. And see you all next time.