SPEAKER_00: This Week in Startups is brought to you by PagerDuty, serving as the hub of your operations, aggregating all your infrastructure monitoring tools and alerting the right people and teams at the right time. Sign up today at PagerDuty.com forward slash twist and get a free t-shirt when you get your first alert. And Walker Corporate Law, a boutique law firm specializing in the representation of entrepreneurs. Visit them at walkercorporatelaw.com.

SPEAKER_03: It's really a critical episode for anybody who's an entrepreneur or an investor to watch and a great book, which you should buy, while we play the theme music here. Okay, let's get started.

SPEAKER_08: This is what it's all about, man. They said money is the root of all evil. What? Money, how it feeds my people.

SPEAKER_12: We ain't gonna live like peoples until we get the money, spend the money, and defeat you.

SPEAKER_11: Money is the root of all evil. What? Money, how it feeds my people. Yeah, we ain't gonna live like peoples until we get the money, spend the money, and defeat you.

SPEAKER_17: Hey, everybody. Hey, everybody. Welcome to This Week in Startups, the show where we talk about technology, startups, but most importantly, at the end of the day, leadership, right?

SPEAKER_18: That's where all these entrepreneurial pursuits begin and end to a certain extent, is who is the leader of the ship who is saying, hey, this is where the new world is. This is the voyage we should all take. It is a very, very important subject. And today, I'm super excited to have Jeffrey Pfeffer on again, who was on in the first year of this program, second year, 2010. And he is the oldest tenured professor at Stanford Business School. And I'm not trying to make you feel old, Jeffrey, but let's face it. I'm old. We're both getting, I'm 44. I don't know how old you are, but you're now, you started at Stanford Business School in 79?

Chamath Palihapitiya: In 1979. Wow. And you are a professor of organizational behavior? Correct.

SPEAKER_18: Okay. Now, when I went to school at Fordham, I was going to, my dream was to be either, I wanted to get my PhD in psychology, either industrial organizational psychology or forensic psychology.

SPEAKER_03: I was either going to be Clarice Starling and join the FBI. I'm not making any big announcement here, but I was, you know, going to try to be an FBI agent, or I was going to do industrial organizational psychology. But now, I don't see this much industrial organizational psychology around.

SPEAKER_22: I don't hear that term. What's going on with that degree? Did you have a psychology degree or a business degree when you got it?

SPEAKER_23: I had a business degree from Stanford Business School, and then I taught at the University of Illinois, and then at the University of California at Berkeley, before Stanford hired me back as a full professor. So I've been a full professor for a long time also. Industrial organizational psychology has basically disappeared from psych departments. It's gone. It's gone. It's mostly gone.

SPEAKER_06: And why did it end? Because there just wasn't an interest in it, or the business schools just co-opted it, and it just felt like it belonged there?

SPEAKER_29: Business schools co-opted it, and psych departments are in liberal arts and sciences, and are not that interested in things that are practical, for the most part. It's too corporate.

SPEAKER_31: Industrial organizational psychology is too corporate for psych departments.

SPEAKER_30: Exactly. They're like, this is too, it's too applicable, and it's too capitalist.

SPEAKER_29: Psych departments and social departments want to do things like gender studies. They don't want to do industrial and organizational psychology.

SPEAKER_36: And, but speaking of which...

SPEAKER_35: And poverty studies.

SPEAKER_36: Poverty studies.

SPEAKER_38: It's a complete part of liberals. And things that save the world.

SPEAKER_18: And here's the thing. And this is the great irony, and why I think everybody's got to pick up the book here for Leadership BS, and we're going to talk about it. If you're watching the show, now would be a great time. While you're listening, you do a little, what do they call that, multitasking? Speaking of industrial organization behavior, I want everybody who hears my voice to buy the book right now. It's the least you can do. He's coming on the program. Leadership BS. And that stands for bullshit. And we're going to talk all about the leadership bullshit that we hear at the time.

SPEAKER_06: But hey, gender and poverty, ironically, paradoxically would be the better word, professor, is actually

SPEAKER_03: colliding in a way with entrepreneurship and capitalism, isn't it? That's exactly right. It's the big theme of our lifetime, perhaps.

SPEAKER_40: It certainly is.

SPEAKER_23: And of course, one of the ways to help people out of poverty is to create businesses that employ them, particularly if you employ them at good wages.

SPEAKER_18: Okay. So let's talk about the book. You have so many book offers. You're very successful as an author, obviously, as a professor. A lot of the great entrepreneurs I know have taken your courses, and you've had some great entrepreneurs.

SPEAKER_44: Can you say which ones in the past? I probably can't. Okay.

SPEAKER_18: So anyway, there's been a lot of great people who've gone to the Stanford Business School who've had you as a professor. I've heard a lot of them talk about it. Why did you choose this book, Leadership Bullshit? I'm going to keep saying that. It's a leadership BS. Why did you pick this as the topic? Because you have your choice of what you want to write about. Why did you pick fixing workplaces and careers one truth at a time?

SPEAKER_29: So when you look at the world, you see several things. The first thing you see, particularly in the world of large organizations, maybe even small organizations, is you see workplaces that are just terribly broken. All the surveys from anybody that you want to look at show low employee engagement, low job satisfaction, high levels of turnover, low trust in leaders. And by the way, you also see something which I hesitate to talk about, but I will. And that is many people, even those leaving fabulous Stanford Business School, losing their jobs, having career derailments, having career setbacks. So on the one hand, we've got lousy workplaces and leaders who are suffering. On the other hand, we have this enormous enterprise called the leadership industry, which is somewhere between 14, depending upon your estimate, somewhere between 14 and $50 billion a year just in the United States, putting out blogs and books and posts and whatever, giving people advice. And so I was fascinated by the fact that on the one hand, we have this enormous enterprise that's existed for decades. And on the other hand, failed workplaces, the leadership industry has failed. I was interested in figuring out why.

SPEAKER_54: So there is some disparity between the amount of effort and money being put into training leaders and then the actual outcome. Perhaps one of the best ways to judge if a leader is doing their job is to ask the people

SPEAKER_03: they're leading if they're doing a good job and they're not.

SPEAKER_55: That's correct.

SPEAKER_03: Okay.

SPEAKER_18: So let's drill down into some of the issues around this. What are the qualities that you think in 2015 make a great leader? Because this is the most debated thing. You know, do you need to be extremely harsh and brutal to people that the rumor is Steve

SPEAKER_03: Jobs was or some people say he was? And then the people who actually worked for him and continue to work at Apple say that's bunked by people who were weak and who got weeded out of the system because they couldn't keep up to his standard. Tim Cook and Johnny Ive and, you know, there's tens of thousands of people who say Jobs was an inspirational and a great leader. Is he the model or not? Is Elon Musk the model? What do you think?

SPEAKER_27: Well, it depends upon your criteria.

SPEAKER_29: So when people say to me, what do I need to do to be a better leader? I ask the question, how would you define better leaders? So let me give you a couple of examples. Got it. When Stan O'Neill of Merrill Lynch took Merrill Lynch into basically oblivion and into the arms of the Bank of America in 2007, 2008 with the financial crisis, he left with a severance package of $140 million. And by the way, after taking Merrill Lynch into oblivion, he was then invited to join the board of Alcoa. Now, did Stan O'Neill do a good job if you talked to the people of Merrill Lynch? No. If you're a Mr. and Mrs. O'Neill and you have $140 million, he did a great job. So part of the issue, there are many issues, but part of the issue is, is that what's good for the individual, unless you're talking about a one-person company, what's good for the individual and what's good for the organization are not always the same thing. As you know, watching startups, even in relatively small startups, if they are successful, oftentimes

SPEAKER_58: there are co-founders. Oftentimes, the co-founders will try to get one of the other co-founders out of the organization.

SPEAKER_60: Yeah. Or the VCs will try to get them out. Well, the VCs always get them out.

SPEAKER_62: Yeah. But that's... Well, they're like, hey, let's clean up this cap table here. Yes. Four founders, you know, too many. Yes.

SPEAKER_63: And not only clean up the cap table, let's get somebody in here who knows how to scale the business, and these founders are not good for it.

SPEAKER_29: But beyond that, so there's politics and power going on everywhere, and one of the criteria for individuals is often how much money can they have and how much power can they have, which is not necessarily what's good for the whole organization.

SPEAKER_27: So...

SPEAKER_06: That speaks to incentives, and perverse incentives, in fact, at these publicly traded companies, in some cases, where the pay packages and the incentives are designed in a way that is incongruous to the entire team, which then means bad leadership.

SPEAKER_67: That is... That's only part of the problem. Okay.

SPEAKER_23: Part of it is clearly perverse incentives, where you make a ton of money if you're at the top if you fail.

SPEAKER_63: Yeah, I think we all agree on that one.

SPEAKER_23: Yes.

SPEAKER_63: And Carly Fiorina. It's like, you know, the big debate now is whether she left Hewlett-Packard, how much of her 41 million that she left with when she was fired, how much of that was, in quote,

SPEAKER_29: severance, and how much of that was deferred income that she walked out the door with. But part of it is more than just incentive. So if you give me a choice between, to bet on someone's behavior, and one path will give

SPEAKER_73: them money, and the other path will feed their ego, I'll bet on ego. I bet on ego. Not all, not 100% of the time. Right. But power and ego go together. People, oftentimes, they want status, they want to feel good about themselves. Yes. And they will forego money to do that.

SPEAKER_22: I will, for sure. Absolutely. I'm absolutely candid about that. If you told me, like, a choice of, like, yeah, whatever.

SPEAKER_03: Or 100,000 more people watch this program every episode, or I get 100,000 more dollars every year from doing this being in startups, I'll definitely take the bigger audience.

SPEAKER_18: Of course. I love it. I love the feedback. Of course. Okay. So when we look at this sort of issue, what I want to know is, when we get back from the commercial break, is what can we change? Because we looked at the top, you know, those big public companies. But for this audience, I think the startups are probably a little bit more applicable. I want to go into the startups and say, hey, what does good leadership look like at a startup? And then what are the proper organizational structures for a startup, as you see them when we get back on this week in startups?

SPEAKER_80: Hey, everybody.

SPEAKER_18: Let me take a moment to tell you about pager duty. If you don't know what pager duty is, it's the thing that developers hate most in their lives. It's when they are at their kid's soccer game or recital. It's when they're at the movies. It's when they're at the gym. They're running a half marathon. And the pager goes off. And something's wrong with the servers. Now, there is a solution for this. One, you've got to build great systems that are redundant, of course. But still, somebody needs to be on call because it's not always your fault. Sometimes, like, some fiber optic line goes down or your hosting company screws up or hardware gets borked. Anything can happen. You know that. And being on call is really brutal because you get these constant alerts. And pager duty aggregates all of those monitoring tools. You have all these different monitoring tools. It puts it all into one place. And it pays for itself by keeping developers happy because it sends only the alerts that are necessary to only the people who are on duty. And you don't want to roll your own monitoring system like this. You want to use a professional system like pager duty. They've done all the work. It would take you literally years of development time to build this awesome system they've built. And consumers love the apps. They have iOS and Android apps because a lot of your developers are going to be on Android, obviously. And this lets them be on the go and receive alerts. And all the top pager duty clients are obvious. Atlassian with HipChat, Pinterest, New Relic, Airbnb, Panasonic, Slack, Path, all these great companies use pager duty because they want to keep their developers happy and make sure that their systems are up and running. In fact, Chartbeat, which is one of the companies I've invested in, uses pager duty. And pager duty gives Chartbeat one central place to send critical alerts. We now have a simple, easy process for on-call scheduling, says Justin Linz, who is a senior operations engineer at Chartbeat. So here's your call to action, everybody. Go ahead and sign up for a 14-day trial at pagerduty.com slash twist. Pagerduty.com slash twist. Get a free t-shirt when you sign up for your first alert. And thank you so much to our friends at PagerDuty because they built a great product that keeps

SPEAKER_85: developers engaged and loving their jobs. Thanks again at PagerDuty. Let's get back to this amazing episode.

SPEAKER_18: Hey, everybody. Welcome back to This Week in Startups. I'm your host, Jason Calacanis. You can find me on Twitter. I'm at Jason.

SPEAKER_89: And my guest today, Jeffrey Pfeffer, who is the professor of organizational behavioral, well, just organizational behavior. I keep thinking behavioral psychology, but organizational behavior at Stanford's Graduate School of Business. He's been there since 1979. He's done a lot of great things. And he is one of the most preeminent experts on power and leadership, author, co-authored

SPEAKER_03: 14 books, the latest of which is leadership bullshit.

SPEAKER_91: It's leadership BS. It's leadership BS.

SPEAKER_03: You're a little bit more cooth than I am, but I call bullshit on the title.

SPEAKER_06: Just call it leadership bullshit. It's okay. It's 2015. People curse. Everybody's dealing with it. Let's talk about leadership in startups. And my perception of leadership is, at the height of it, is do people trust you and do you communicate well with people? Am I correct?

SPEAKER_63: That is correct. But one of the great paradoxes that I try to explore in the book and your producer, Jackie, was quite interested in, is this wonderful discontinuity, if you will.

SPEAKER_73: So on the one hand, I can tell you the qualities that research and the common sense would suggest

SPEAKER_63: characterize great leaders, including the ability to build trust, including telling the truth, including modesty so that you don't shog all the credit for yourself and you give other people on the team, you know, space, space, space to grow and again, and recognition.

SPEAKER_73: What's ironic is, and you know, and there's a bunch of things like that.

SPEAKER_29: The irony is, is that when you look at what we select for, not just in big companies, but what we, and what we are attracted to, both in politics and in companies, we actually are

SPEAKER_73: attracted to the opposite. So to go back to your example.

SPEAKER_98: Oh, that's fascinating. Okay.

SPEAKER_73: So go back to your example of Steve Jobs. You know, Steve Jobs is in this book. Actually, Donald Trump is in the index of this book. Everybody's in the index of this book because I was very prescient, though, actually, I wasn't. Steve Jobs in the index of this book. Steve Jobs is in the chapter on lying because, as we know, there is a phrase associated with

SPEAKER_29: Apple in its early days called reality distortion field.

SPEAKER_100: All of its days. I was lied to by Steve Jobs to my face.

SPEAKER_29: Yes, there you go.

SPEAKER_103: And in David Kaplan's book, The Silicon Boys, he has a wonderful story, which I retell in

SPEAKER_73: the book about a conversation about Larry Ellison, in which Kaplan asked Ed Oakes, a co-founder

SPEAKER_29: of Oracle, does Larry lie? And the response was, no, Larry doesn't lie. We prefer to say Larry has a problem with tenses, as in the product is available. Right. Maybe.

SPEAKER_109: Vaporware. Exactly. Exactly.

SPEAKER_110: So while, on the one hand, people are abhorred, they're like, how can Jeffrey talk about lying and that lying may be an important quality of leadership?

SPEAKER_29: In fact, I often think that lying is the ability to lie and do it well is probably the most important quality to be a successful entrepreneur.

SPEAKER_68: Well, you're lying to yourself in many ways.

SPEAKER_03: I tell people that when you get older, you are wise enough to realize the sacrifice necessary to be an entrepreneur, you are wise enough to know that the odds are 80% to 90% against you, therefore you don't take on big challenges, you take on more modest ones that will not result in you getting your ass kicked.

SPEAKER_112: That's correct.

SPEAKER_03: The delusion is critical.

SPEAKER_63: Yes. The delusion and self-deception is very critical.

SPEAKER_29: But also, if you think about it, every startup, every organization, but certainly every startup is going to have setbacks and reversals, they're going to have products that don't work, they're going to have launches that don't go perfectly because they haven't paid attention to you or for whatever reason. And at that moment, if they go to their investors and their employees and say, I don't know what

SPEAKER_73: the hell we're going to do, you know, they're going to fail. So you have to- Yeah, everybody will quit. That's exactly right. So you have to be able to act with confidence and act as if you know what you're doing, even if you don't.

SPEAKER_18: Right. And it's in a way, in terms of, who was it, Warren Bennis, who said leaders, what does he say? Leaders define reality. Yes. Right? And we look to our leaders to define our reality. Correct. And if you define the reality of any startup today, the reality looks something like this. We're about to go off the rails and lose everything. If it's Google, if it's Apple, there's prognosticators on CNBC right now talking about how Google's going to lose everything because the advertising business is going to get ad blocked, and everybody's talking about Apple's going to get killed by Android. I mean, we're all on the precipice of death. I mean, it is, whether it's a company or a person. So this ability to delude oneself and to, in a way, actually, does it go back to Man's

SPEAKER_06: Search for Meaning, Logotherapy, Viktor Frankl, in that the people who can maintain the most

SPEAKER_46: optimistic position, were the ones who survived the longest in the biggest moments of duress?

SPEAKER_35: I think that's partly it.

SPEAKER_63: And it's also partly the self-fulfilling prophecy. Because if I can convince you that my startup or my product is the coolest thing in the world, and Steve Jobs was a master at this, you know, if I can convince you that this is the hottest thing, the best people come to work with me, people put money in, customers flock, and then I become successful. Right. So it's really analogous to a run on a bank. You want everybody to believe that your bank, your startup, is going to be fabulous, and then it becomes fabulous because everybody believes that it is. Right.

SPEAKER_18: And it is a way, in Larry Ellison's way, of just saying, hey, this software is magical, and it's amazing, and you can get it right now.

SPEAKER_68: And by the way, even though I haven't even thought about building it yet. Right. And get it right now means you can meet with somebody who will take your deposit.

SPEAKER_18: Exactly. I mean, in a way, it's, you know, Elon Musk is so brilliant because when he started these

SPEAKER_41: cars, the Tesla, he got people like me who believed in his vision and who wanted to see the world change to give him a full deposit.

SPEAKER_03: Not a partial deposit, but a full deposit for a roadster and for a Model S. I mean, these are $100,000 plus cars, and we put down full deposits. Correct. And then some group of people put down five or 10 after us. But the early true believers were so willing to buy into Elon's version of the world that we gave him full deposits, which gave the confidence to the investors to give him more money, gave him the confidence to push his whole $300 million life's fortune at the time into it, and now look what that's done. In a way, if the person has an honorable or moral or ethical bent on it, it's not lying. It's religion in a way.

SPEAKER_95: Yes.

SPEAKER_63: And it's creating the future. But it is doing it by not necessarily telling you 100% of everything and completely accurately.

SPEAKER_95: Let me ask you a question about being candid with people.

SPEAKER_18: And this is going to be a little bit of a psychology session here because this is the issue I've struggled with in my life.

SPEAKER_03: I come from Brooklyn. That's okay. And you're laughing at me off count, where everybody tells each other exactly what they think of each other in a very candid and sometimes brutal way. And then when I came into my career, I did not have a big enough filter. I said things to people like, well, that's stupid, or you're stupid, or only a stupid person would do that.

SPEAKER_18: I since have learned to not say that. I just say to my chief of staff, this person is really stupid.

SPEAKER_22: But can you please fire them while I'm on vacation and give them a two-week severance and tell them we'll be a good reference?

SPEAKER_03: So I've learned through a little bit of mentorship to like, I don't have to tell everybody this. But what role does candidness play? Because I meet with entrepreneurs and I tell them, do you want the blue pill or the red pill? Do you want me to tell you the truth of what I think as an angel investor who sees everything? Do you want that candidness? They all say yes. Then I say it. I think some people feel bad. What about candidness? What about honesty? Being blunt?

SPEAKER_36: How does it affect leadership?

SPEAKER_29: There are some people who want the truth. You know, my favorite movie scene, of course, is from A Few Good Men with Jack Nicholson and Tom Cruise.

SPEAKER_63: You can't handle the truth. And I think Jack had it pretty much right. I think in many instances, people can't handle the truth.

SPEAKER_29: I have a dear friend who worked at a VC firm, was a senior partner in Accenture. And when he came to my class once, he said, everybody says they want feedback. He said, they don't want feedback. They want to be told how wonderful they are. One of the most powerful motives of human behavior is this self-enhancement motive. The idea that you want or the motive to think good of yourself.

SPEAKER_130: And so we associate with people who make us feel good about ourselves. Right.

SPEAKER_114: And then it's a grand delusion.

SPEAKER_03: And you do need to have some balance between being delusional and the reality of the situation.

SPEAKER_18: Yes. I think this actually goes back to Viktor Frankl, too, who was like the people who tragically were dealing with, you know, the worst human tragedy of, I think, the human species at this point in time in recorded history of the Holocaust.

SPEAKER_06: The people who actually got through it were the people who could recognize how horrible and dire the situation was, but who could feel that there was some faith that there was a way for them to overcome, even as bad as this was. And those were the ones who he felt when he survived the Holocaust would be the ones. It's a it is analogous to all of our lives, I think. Yeah.

SPEAKER_22: What are the other delusions and what are the other things you learned in writing leadership? Yes.

SPEAKER_47: Well, so in addition to lying, which is, I think, a hard chapter for many people to get through, you raise an issue of trust.

SPEAKER_63: And so let me push a little on that in perhaps an unconventional way.

SPEAKER_73: The number one way to build and maintain trust is, of course, to make promises that you then deliver on, to keep your commitments. Right. But if you think about it, there are many companies and there are many leaders who find themselves in changed circumstances in which they cannot keep their commitments. Yes.

SPEAKER_63: And so to give you an example that many of your startup friends and colleagues and people watching this should be able to relate to, I had a couple of dear friends of mine who started a human capital technology company. It became quite successful. Unfortunately, they did not retain sufficient equity. And so the company was sold out from under them, which was too bad. They made some money, but it's fine. But what happened to them is they had a company that was kind of a software as a service scheduling, you know, scheduling time, time scheduling software.

SPEAKER_73: And once any piece of software is installed into a company, it is hard to get it out. Yes. And so the person who bought their business or the company that bought their business intentionally destroyed it. Wow. Intentionally destroyed it. Under the theory that they could cut costs and there was enough stickiness in the customers that the customers would remain and pay. And in fact, they earned about three times return on their money. Now, the founders of the company, of course, were horrified. It's appalling. It is. It is appalling. By the way, it's done all the time. It is essentially Oracle's business model in a lot of respects. With respect to that's what they do when they bought PeopleSoft. Yeah. They bought PeopleSoft for the customer list. Yes. Not to maintain the product. Yes. Not to maintain the PeopleSoft level of service.

SPEAKER_29: So this goes on all the time. By the way, to give you one more example, Wells Fargo, prior to Richard Kovacevich arriving many years ago, had the same theory about banking. So they would buy First Interstate Bank. They would buy Crocker Bank.

SPEAKER_73: And again, checking accounts, loans, mortgages, much stickier. They cut costs. They broke commitments. They therefore violated the trust of their customers. And in many instances, employees too. Because employees, you think about the airlines, which have severed, you know, gone through bankruptcy and severed promises made to their employees in terms of pension plans and whatever. I mean, United today is profitable mostly because it has walked away from, through the bankruptcy courts, all the promises it's made over the years to its employees in the form of deferred compensation.

SPEAKER_29: So I would love to believe that trust is great. I try to be trustworthy myself.

SPEAKER_73: But if you look at the business, oftentimes people either have to or make a profit from breaking commitments and therefore breaking trust.

SPEAKER_54: And a publicly traded company is judged only on its last quarter. Nobody is looking at some long arc of history.

SPEAKER_18: If you look at Google as an example, their entire business was predicated on having an ecosystem of people creating content and services in which they could index them.

SPEAKER_03: And then getting those people, sending them traffic and letting them put their ad network on their sites.

SPEAKER_18: Then Google decided when they hit the peak of that ecosystem, the only way to grow was to then analyze which businesses were making the most money in their ad network using Google Analytics, using the ad stuff.

SPEAKER_03: And then go replicate those and put them at the top of search and just give people the answer, whether it was sports scores, whether movie tickets, content, anything. They just said, you know what? Screw it. We're going to put that at the top. And they destroyed their entire ecosystem in order to keep the revenue train going.

SPEAKER_06: And that was the don't be evil motto then became slaughter all of your partners.

SPEAKER_63: And by the way, I don't know if you when you read the book, you will be pleased to see that in that book is the name Jason Calacanis.

SPEAKER_73: Are you kidding me? No, I'm not.

SPEAKER_146: I'm in here. That's good. Now I feel good. I'm going to send it to my mom with a highlighter on that page.

SPEAKER_73: And the reason why is because it is in, in fact, chapter seven. You sent out a post. Yes. That said, do not build your business. That's true. On inside some enormous company ecosystem because they will destroy you.

SPEAKER_68: They will slit your throat. Here it is. Oh my God. I'll read it when we get back. This is good for my ego. Now I'm going to be in the Google book index. I feel good about myself. No, no.

SPEAKER_29: But that's, but that's another, another interesting example of an organization in this case for a business reason for good or for ill doing things that break trust.

SPEAKER_46: Yeah, I can't trust Google anymore. I told it to Larry Page and to Sergey. I was like, you know, we made $25, $30 million together in Google AdSense.

SPEAKER_18: I built two businesses on your, in your ecosystem. And then when I had a problem, when you guys de-indexed me, you wouldn't even return my goddamn emails.

SPEAKER_03: And you put me into the PR person and you put me to Matt Cutts and I went in there and Matt Cutts lied to my face. I said, this is no way for me to live. I would rather be poor. I would rather not have Google as a partner. I'd rather piss you guys off and never speak to you again than to have a business partner that I have to worry about slitting my throat while I'm asleep. This is just no way for me to live.

SPEAKER_22: That's it. All right.

SPEAKER_29: But I think, but I think the lesson for, for startup founders is, you know, I mean, so Larry, Larry, Andy Grove many years ago wrote a book about strategy called Only the Paranoid Survive. I think this is a motto for everybody. The idea that, you know, many people have lost their businesses, have lost their jobs, have lost money because they have trusted too much and in the wrong people.

SPEAKER_73: So therefore, as a founder, what you want to do is, I mean, you have to trust certain things. I mean, I have to trust that you are who you are and vice versa.

SPEAKER_29: But, but within, within limits, you, a reasonable amount of paranoia and a reasonable amount of asking the following question. Somebody's made a deal with me.

SPEAKER_63: How big a deal would it be in their economic interest to break the agreement? If it's a big enough economic payoff for them to break the agreement? So brilliant.

SPEAKER_46: So brilliant, Jeffrey. Just that one piece of advice here, we'll clip that, is the most, the great takeaway.

SPEAKER_18: Because what is the cost of breaking your agreement and breaking the trust with somebody? If it is that you double your revenues or triple your earnings, well, then you're, they're going to do it. You're, you're dispensable. And that's the issue. When we get back from commercial break, I want to talk to you about what you think about the political environment today, vis-a-vis jobs and not Steve Jobs, but literal jobs and the going away of jobs in our country and the disparity in wealth. And maybe what solutions are on a leadership basis, because this is colliding now. It is becoming, I think, a core issue in this year's or next year's election with Jeb Bush, Jeb, Jeb Bush coming to, I was thinking of Jeb York from the point I was, Jeb Bush coming to San Francisco to meet with Thumbtack and to meet with Uber and other companies and really courting Silicon Valley as Hillary Clinton says, you know what? We need to look into these companies in Silicon Valley with a, with a really distrustful eye when we get back on This Week in Startups. Hey, everybody. Hey, everybody. Let me stop for a moment, this amazing episode, and tell you about the Walker Corporate Law Group. Yes, they are a boutique law firm that specializes in the representation of entrepreneurs and startups. And Scott Walker is the founder of that company, and he is a personal friend of mine, and he does a great job working with startups. I have literally introduced him to dozens, maybe hundreds now, of startups, and they all rave about the services of the Walker Corporate Law Group because their lawyers have decades of experience. You're not going to get junior associates who are getting on-the-job training with your startup. No. They're going to help you with mergers and acquisitions, licensing, terms of service, privacy policies, formation, all this kind of stuff, fundraising. And they're really great at it, and they do fixed fees. They don't want to surprise people with crazy, crazy bills. They think that billable hours can reward inefficiency. So they'll just be fair with you. And that's what I love about them, because if you're a startup, you don't want to get that sticker shock and get a huge, huge bill. Make sure you use the Walker Corporate Law Group, and you can do that by calling Scott Walker at 415-979-9998. 415-979-9998. You can email him, scott at walkercorporporatelaw.com, or you can visit walkercorporatelaw.com as well. Scott at walkercorporatelaw.com. And let Scott Ed Walker on Twitter know, at Scott Ed Walker, know that you, hey, you watch the program and you appreciate him supporting independent media like This Week in Startups, one of my oldest advertisers, one of my oldest friends in the industry, just a great guy, a total mensch, and he really takes care of the startups who work with him.

SPEAKER_80: Thank you, Scott Walker, for supporting This Week in Startups. Bye-bye.

SPEAKER_160: Okay, let's get back to this program. Come on.

SPEAKER_161: Hey, everybody. Welcome back to This Week in Startups.

SPEAKER_89: And if you're just joining us, I am having a magnificent conversation with my friend Jeffrey Pfeiffer. Pfeiffer. Not Michelle Pfeiffer. Pfeiffer. He is, of course, a professor of organizational behavior at Stanford's Graduate School of Business, where tons of famous people went, like my friend David Sachs, Keith Rabeu, everybody went there. Rulof Botha. Everybody has gone to Stanford for the business. You want to hear my standard joke for Stanford Business School?

SPEAKER_80: So I meet with an entrepreneur.

SPEAKER_164: I say, oh, yeah, would you go to school, whatever, you know, small talk. And they say, oh, I went to Stanford. I said, oh, you couldn't get into Harvard?

SPEAKER_22: And then I meet with the Harvard guys and the gals, and they say, where do you go to school? They say, Harvard. I said, oh, you couldn't get into Stanford? The look, Stanford people are just like, why would I want to go to Harvard? Right? They're just like, I don't want to go to Boston, go to Harvard with those a-holes. They just, they, they just, like, dismiss it immediately. Anybody who wants to go to Harvard Business School is just not the kind of person I want to hang out with.

SPEAKER_33: All of the Harvard people immediately are so insecure that the first, like, Harvard's a better school, though. I mean, it's objectively a better school. If you look at the success level of the people who've come out of Harvard, and they just go into complete defense mode, which is hilarious to me, because I can never get into either school.

SPEAKER_141: All right. Leadership Bullshit is the book. Leadership BS, go ahead and buy it. Is the audio book available yet on Audible?

SPEAKER_03: Do you know?

SPEAKER_169: I don't know.

SPEAKER_03: Do you read it yourself if that opportunity comes up, or do you just think nobody wants to hear your voice, and you're going to just let somebody else professional read it?

SPEAKER_63: This is not a choice that is ever left to me.

SPEAKER_03: I would love to hear you read the book. You've got a good voice. It's like, you know, it's more sincere if you read it.

SPEAKER_95: Thank you, but they don't, they always hire a professional reader. Really? Yep.

SPEAKER_03: Don't do, it's such a mistake. Well, tell Audible. Don't tell me. All right, it's my message to Don Katz, my friend at Audible. Come on, let it, or actually, here's another thing.

SPEAKER_18: I would read your favorite chapter, and just put it out as an MP3 with a link to the Audible one, and then you'll see if people convert. But, you know, hmm. Oh, why leaders eat first? That's an interesting one.

SPEAKER_36: Tell me about that chapter, leaders eat first, because I thought the leaders eat last.

SPEAKER_29: That's Simon Sinek's book, Leaders Eat Last, and this is another problem of why, what's the problem with the leadership literature. There's a big confusion between what people should do and what they really do. Right. So, leaders ought to eat last, but they don't. In case you haven't been watching,

SPEAKER_63: the ratio between CEO and front-line compensation, or front-line employee pay, has grown to an enormous level. It's kind of ridiculous.

SPEAKER_29: It is ridiculous, and in case you haven't noticed, when companies get into trouble, it is seldom the leaders who get laid off. It is the rank and file. So, Hewlett-Packard, God bless them, you know, which was a company that was built by Bill Hewlett and Dave Packard on the foundation of no layoffs. Today, I believe this is pretty much all they do, is layoffs.

SPEAKER_63: Hewlett-Packard, I'm not sure they make computers, but they do a great job of layoffs. And they're laying off tons of people, but not at the top. Nobody lays themselves off. It is always the people below them. So, leaders ought to eat last, but they don't.

SPEAKER_18: It is very interesting. We look at this issue of jobs in our country and disparity of wealth, the tax system.

SPEAKER_41: It feels like 2016 is going to be a referendum on income disparity and the future of employment.

SPEAKER_06: I don't know if you agree with me, but what do you think the reality is of employment, you know, for our children and our children's children, given the advancing of technology? Are you one of those people who believes

SPEAKER_18: that jobs are going to go away,

SPEAKER_06: will have net less jobs, or that the jobs will be horrible? What do you think?

SPEAKER_23: Well, this is beyond my domain of expertise. I'm going to a dinner Thursday night in which there's going to be a big discussion about this.

SPEAKER_63: I can tell you that many of the jobs that have been created recently are not very high-paying jobs. I think people, particularly people in the Silicon Valley, believe that jobs are basically engineering jobs. But if you go to the U.S. Department of Labor, first of all, the largest occupation in the United States is still retail workers. I think number two on that list is probably truck drivers or transportation people. And you look at what's going on with retail and with trucking, with self-driving automobiles or whatever, I don't think I would be, you know, I don't think the future is necessarily very, very bright. Home health workers, fortunately, the population is aging, as you already nicely pointed out. Yes. At the start of the show, I'm already old. Soon I'll need somebody to help me around and help me out. You'll need your robot. Yes. Well, a robot or a home health worker.

SPEAKER_103: Home hero. So many of the jobs that are being created and where a lot of the job growth is are not very high-paying jobs. And, of course, there's also been this huge growth in the freelance or part-time or so-called gig economy. And I've written a couple of Fortune columns about this. And the problem with the gig economy

SPEAKER_29: is that it's fine if you're, you know, in your 20s, but nobody stays in their 20s forever. And if somebody in the show could figure out how to deal with aging, call me immediately

SPEAKER_186: because I bought you.

SPEAKER_02: I think Larry Page is dealing with that. He created Alphabet so that he can have this, like Google's, like, an afterthought. He put Sundar in charge of that. But now he's got this other health company

SPEAKER_103: that's doing life extension. That's right. That's a very important issue. But sooner or later, people have health care issues or they hit unemployment patches or they want to retire, heaven forbid.

SPEAKER_63: And in the gig economy, there are no benefits.

SPEAKER_44: There are no benefits at all. You're on your own. You're completely on your own. You have to put your money in your 401k and short-term incentives. It doesn't seem like people are going to do it. That's probably right.

SPEAKER_29: So I'm, you know, and I also wrote a Fortune column which upset everybody. But I wrote a Fortune column which talked about, in quotes, the sharing economy, another idea which I think is misnomered. The interesting thing, and basically the theme of my Fortune column was that we have created a bunch of companies, Uber, Airbnb being two, that have made a business out of being responsible for nothing. So if I go to a Four Seasons hotel,

SPEAKER_63: I expect them to have trained the staff. Right. I expect them to have, you know, provisioned the room,

SPEAKER_29: upgraded the room, built the room, have fire detectors, smoke detectors, et cetera. If I rent a room through Airbnb, Airbnb says we're only a platform. Yeah, we're a marketplace. And God help you, you know, whatever. And similarly with Uber.

SPEAKER_02: Right. And in both of those cases, listen, full disclosure, I was a third investor in Uber, and I'm just saying that to show off.

SPEAKER_41: But I'm super, super, I have a horse in the race. But putting that aside, the counter argument that I would make, and I'm sure some of the people at Airbnb would make, is, hey, the cost reduction

SPEAKER_03: and the efficiency of these platforms, you can get an Airbnb for a third of the cost or half of the cost of staying at a hotel. And UberX is allowing people to travel across cities for five, six, seven dollars and get cars in places that taxis and limos and were just too expensive or wouldn't go to. So there's a counter argument that you've just removed

SPEAKER_22: 30, 40% of the cost from the system by having a marketplace.

SPEAKER_29: You can remove cost from the system. One of the ways in which you remove the cost from the system is you don't have regulations. Yes. You don't have insurance. Right.

SPEAKER_192: You don't have management. You don't have any assurance. So, yes, you've removed cost, but you've also removed...

SPEAKER_59: Well, but in the case of all these,

SPEAKER_18: they have blanket insurance, right? Airbnb has put a blanket insurance coverage across everything. Uber's put a blanket insurance across everything. So they did actually... You would be correct three years ago. I'm not sure when the piece was written, but the blanket insurance now has existed in all of these. So they're sort of now working on that. But I mean, the other argument is, hey, it's so inefficient to have so many excess... so much excess capacity in the world, you know, of cars of, you know, that are used 4% of the time, 2% of the time, and of rooms that could be rented that are used, you know, 5% of the time. You know, people have an extra guest bedroom or a pool house or something. So in a way, does efficiency... Efficiency is going to be painful for jobs and for the economy in a way. Yes. It's almost like the more efficient we get and the cheaper things get, the worse it is for the consumers. Is the solution to that one I've heard, it's two really, is raising the minimum wage seems to be creating more customers, i.e., we're going to go to $15 an hour here in San Francisco. And I think Seattle already has or is close to it. A couple of other regions that are going to go to $15 an hour. Are you support generally? Are you generally supportive of that move?

SPEAKER_22: I think it makes sense. Better consumers.

SPEAKER_63: Actually better in the long term. And also, you know, there was a conservative guy whose name escapes me who ran or was trying to run a campaign to raise the minimum wage in California. It didn't get very far. And when his conservative friend said, why would you as a conservative

SPEAKER_73: support raising the minimum wage? He said, because when workers cannot take care of themselves, they go on public assistance. Why should we be subsidizing Walmart?

SPEAKER_22: It's so true. It's exactly what happens. And Starbucks, which is unbelievably expensive, by the way. Like when those, I mean, you can buy these cups,

SPEAKER_03: these Tassimo, whatever they are, these cups are like a dollar each. And that's still cheaper than going to Starbucks. Me, I buy the, I buy this incredible 8 o'clock coffee that my grandmother used to buy. Two pounds for 18 bucks. You guys are all idiots. And you know what? They did a taste test in Consumer Reports. It beat everybody. Beat everybody. People are paying $25 for 12 ounces of blue bottle or something. But the truth is, they're keeping everybody 30 hours a week. So the benefits don't kick in at Starbucks is my understanding. It could be changed. But Walmart, same thing. They're all trying to keep people under this threshold that the benefits would kick in. And they're still wildly profitable. And then exactly what happens is they're all,

SPEAKER_41: all the health care and all the expense kicks down anyway to the government, which is then to other taxpayers. It's so corrupt. It feels corrupt. I'm not going to make you say corrupt. But it just feels like we've gained. You know what the thing about entrepreneurship is?

SPEAKER_03: It's a bit of a hustle in a game, right? And we want to be number one in the world. We want that for our country. We want that for our kids. We want to be competitive. We want to be innovative. But there is a point

SPEAKER_06: at which you start winning too much and you get kicked from the poker game. So I play in a poker game. There's one guy who's a pro. He came in. He slaughtered the game. Everybody else is playing in the game, just having fun, but he came in the game like he's playing in a casino and it's not fun to play with him because we're all there to have a casually fun time and he's there to collect

SPEAKER_22: everybody's money and get kicked out of the game.

SPEAKER_18: And I think that's what happened with what's currently happening with entrepreneurship is that we become so cutthroat, so marauding that it doesn't just make us win. It makes us defeat ourselves

SPEAKER_89: and get uninvited from the table.

SPEAKER_173: Well, I think and the other thing I think you need to think about is what is the criteria or what is the criterion

SPEAKER_103: by which we're going to evaluate how well we're doing. At the moment in the United States and maybe in the world, it's all about money. But, you know...

SPEAKER_205: Share price, earnings,

SPEAKER_103: money, money, wages, money, just money. And you hear the discussion of Obamacare. How much is it going to save? How much is it going to cost? It's all about money. Let me give you some other criteria. Gallup has partnered with Healthways. They do a well-being index. A wellness index. A well-being. Well-being. Psychological well-being

SPEAKER_74: and physical well-being. Love it. You know, and so the question... Happiness in a way? Happiness and healthiness. Happiness and healthiness. That's exactly right. And the question is,

SPEAKER_29: if you are going to succeed on the backs of people's health and both physical and mental,

SPEAKER_210: is that a trade-off you're willing to make?

SPEAKER_06: I think I am. I have to say, you know, it's very wise because if you look at... I just met somebody who worked for Apple.

SPEAKER_41: She's tremendously talented. And she's making a huge salary. Like anybody from Google or Apple probably is. Just tremendous. Double what her last salary was, I'm going to guess, when she was not at a huge tech firm. Hour and 15 minutes each way on a bus from San Francisco down to there. Then a half-hour shuttle between. Then living in a hotel when they're under the gun. And I just thought to myself, my God. There's a direct correlation between the length of commute and depression, domestic violence, alcohol abuse, all this stuff. Obesity.

SPEAKER_06: It's all directly correlated. These kids in San Francisco are doing it wrong. They have no idea what a three-hour, two-and-a-half-hour commute daily does to them, physically or emotionally or psychologically. Well, they're young enough

SPEAKER_23: they won't see it for a while.

SPEAKER_06: That's a fair point. So, how do you think we get to a world where maybe we look at all this leadership bullshit?

SPEAKER_41: I love that you're called leadership. You don't have time. You know what it is?

SPEAKER_06: This is the thing with age, right? You and I are getting a little bit older. I'm 44. You're 60 or 55. What are you? 69.

SPEAKER_216: 69?

SPEAKER_06: God, you look good, Jeffrey. Thank you. You don't have time. I don't believe it. I actually do. Listen, you're alert. You're sharp. You've got the leather jacket on. You look pretty hip. I like it. Here's the thing.

SPEAKER_211: You don't have time for nonsense anymore, do you? That's exactly right.

SPEAKER_29: You just want to tell the truth?

SPEAKER_218: I tell people all the time

SPEAKER_29: I have tenure, which means I can't be fired. I've had tenure

SPEAKER_63: since I came to Stanford in 1979.

SPEAKER_141: Doesn't mean you can't come to school drunk, though.

SPEAKER_63: Let's be clear. That's true. Or stoned. So, I have tenure, which makes me dangerous. I'm old, which makes me dangerous.

SPEAKER_73: Super dangerous. The combination of old and tenured, I'm extremely dangerous. I mean, basically, you know, my job,

SPEAKER_29: I believe my job as a university professor is to the best of my abilities, which doesn't mean I'm going to be correct all the time, but to the best of my abilities, tell the truth. And this is a book that tells the truth about a leadership industry, and there are a lot of people who are going to be unhappy because I'm going a lot of oxys. This is a big industry to take on.

Chamath Palihapitiya: It is. Well, yeah. I mean,

SPEAKER_22: they're all with these seminars and whatever, you know, pay us to make you a better leader, and then you have to be like Steve Jobs. I think it's one of these things

SPEAKER_03: where in the leadership business, they try to tell you there's like one way. You have to do it this way, the Steve Jobs way, the this way. It's not, right? Isn't it a little bit personal, like to the person's personality, to the person's goals?

SPEAKER_26: It is completely personal, and to go back to a theme that you implicitly raised very early on in this conversation,

SPEAKER_73: one of the ways to make leadership development more successful is to evaluate it better. Yeah. So at the moment, you go to a seminar, what do you get at the end of the seminar? If you get anything at all, what you get is one of these little forms to fill out, happy sheets. Did you have a good time? Did you like it? They don't add, so they are rewarding entertainment, and they get entertainment. If you're worried about

SPEAKER_103: employee engagement, satisfaction, commitment, turnover,

SPEAKER_210: that's how you ought to evaluate these leadership seminars, not whether or not people had a good time.

SPEAKER_89: Yeah, I mean, in a way, like there's a couple

SPEAKER_06: of websites out there, we'll say the names of them, but where they just sort of like let people anonymously rip into the leaders. So every time I fire somebody, like I count the days before they put up their review of me, Jason is an a-hole. He's too demanding, but you know, it's like set a slightly different way. What do you think is a way to fairly evaluate leaders? What would be the way if you were an investor on the board of a company, you'd say,

SPEAKER_18: hey, you know what? Here's how Larry Ellison, here's how Steve Jobs, here's our Jason with a 10-person company, here's our Travis with a 1,000-person company, here's our Brian with Airbnb. How would you have them rated?

SPEAKER_204: What would be a great mechanism that you think would be fair and would be helpful?

SPEAKER_29: Well, if the company's large enough and they can afford this, you hire a survey for the firm, which overcomes the problem

SPEAKER_103: that you just mentioned because the problem you just mentioned is that this is a non-random sample. This is someone that you chose to fire. The odds of them liking you even if you hadn't fired them, not so high. Not high. So you need a random sample of the people. That would be one way. But a second way to evaluate, I think, leadership is to look at whether or not people voluntarily choose to remain

SPEAKER_73: in the organization.

SPEAKER_237: So tenure.

SPEAKER_73: Tenure, yes. Do people, you know, so how do you know, you know, how do you know that, how do I know that you love your spouse? Yeah. But mostly because you have other opportunities and you're still with her.

SPEAKER_238: Yes. I mean, that's, that's it.

SPEAKER_73: I mean, this is the same way.

SPEAKER_110: How do I know you're, how do I know you're a good employer when people have good options and they stay with you voluntarily?

SPEAKER_06: It is in this economy people are leaving, you know, awfully quick. Let's say we make you the president and we give you some sort of superpowers. In these coming

SPEAKER_18: 10, 20 years, what are the top to just make people happier and healthy when you think about it? Like you sit there, you know, whatever, you know, it's late at night, you had a couple drinks, whatever, you're relaxing, you're with your friend, you say, you know what, if we just did these two or three things, it would make things a lot easier for people.

SPEAKER_03: And without getting into politics, just pragmatic things that would make the country better, the world better, you know. Wow.

SPEAKER_26: That's an interesting question. So I'll give you at least one and then we can see

SPEAKER_29: what follows from this. So 40, 50 years ago, we decided that it was not right for companies

SPEAKER_103: to put toxic waste either into the air or into the water. Okay. And that even though

SPEAKER_73: people, even though it would be expensive, we were going to clean up environmental pollution. Right.

SPEAKER_112: Hudson River looking good. And so we did that.

SPEAKER_103: Today, there is a parallel thing. Colleagues and I did a study in which we estimate 120,000 excess deaths a year in the United States annually from working in toxic workplaces. And I'm not talking about chemical exposure. You're talking about stress? I'm talking about distress and lack of access to health care. Exactly. 120,000 people a year. And by the way, when I tell my HR friends this, they say you've underestimated the number. For sure.

SPEAKER_73: It's 120,000 deaths a year. That's a lot. So I would say that we currently face a situation in social pollution that is quite parallel to what we faced in environmental pollution. That we don't measure this. You know,

SPEAKER_103: so I go to people in companies and they don't even understand the toxicity of what they're doing. They don't see it. So you can't manage it. Right. We're externalizing these costs because if I make you sick enough, you're going to leave your employer and now you're going to be again on the public, you know, on the public purse for health care or whatever, I'm going to force you out of the labor force. It's no longer my problem.

SPEAKER_29: So the first thing I would do is I think we need to both first measure and then even possibly, heaven forbid, the word regulate

SPEAKER_103: these forms of social pollution as we once did and it now continues to do about environmental pollution.

SPEAKER_89: That is highly controversial. You're saying, I like it though because it's highly controversial because that means there's an opportunity. It would be highly controversial to say like,

SPEAKER_248: this boss needs to make you content in your job. Because isn't America like you're just supposed

SPEAKER_126: to like suck it up, man up. Isn't that like the narrative? You got a tough boss, you don't like it, man up. That is what people say.

SPEAKER_250: You're saying, hey, you got to be nice, you got to make people happy. I was going to say,

SPEAKER_251: nice is not toxic.

SPEAKER_73: You don't be nice. We are working people to death. There is tons of studies which demonstrate a correlation between work hours and blood pressure. For sure. So, you know, if we are killing people, it's fine. So, if you want to pollute, you can, even today. But, you know, but there's going to be a fine and you have to trade it off. I can't just let you put stuff into the, and by the way, in exactly the same way as environmental pollution, it is cheaper to prevent than to remediate. Of course. So, so once once I give you through overwork and stress and therefore which leads to overeating and drug abuse and everything else, once I give you

SPEAKER_103: type 2 diabetes, the cost of treating that is much higher than the cost would have been of preventing it. And you have no idea. So, my next book, which is in the process of being written, is going to be called Dying for a Paycheck.

SPEAKER_73: And, and it is exactly on this theme. And as I look at people, you would be surprised, and the high tech people,

SPEAKER_29: drug abuse, alcohol abuse, I have a friend who went to work for a company, I shouldn't probably mention it, but I will, called Salesforce. Within one week, she was on antidepressants.

SPEAKER_73: I mean, you know, this is, we are, we are doing damage

SPEAKER_181: to human beings, and this is not about- And by the way,

David Friedberg: I'd just like to stop and say thank you to Salesforce for sponsoring this week for the last episode. They're not a sponsor, I'm joking.

SPEAKER_62: But it is incredibly anxiety-producing. Some of these people are in pressure cookers, and,

SPEAKER_03: you know, that was something that was limited, I think, to the financial industry for some period of time. But it has come to tech. There was this incredibly horrific story about Amazon. Yes, of course. And everybody's debated in the industry of like, hey, this was a hit job by the New York Times and Amazon, but it was like they talked to 200 people or 500.

SPEAKER_103: And it's not a hit job. So Jeff Bezos says this isn't the Amazon he knows, and to which I would say to Jeff Bezos, go on the damn web. I begin, this is not the only story. The Guardian has run a story where a reporter went underground into one of their factories. They have a factory

SPEAKER_73: in Tennessee where they had- No AC. And they had ambulances outside to take the people falling over from the heat. This is not a hit job. So I got an email from a friend of mine at Stanford who went to-

SPEAKER_90: I mean, how embarrassing is that for Jeff Bezos

SPEAKER_03: to be a billionaire spending your money on rocket ships and you've got Americans working themselves to heart it. I mean, I know Jeff. I've met him a bunch of times. He's a really, you know, nice guy. But I mean, he's divorced from the reality of the people who work for him suffering. This is- What- How does that happen that somebody who's that successful and enlightened and driven becomes so divorced from the common person working for them?

SPEAKER_06: And I don't mean to lay into Jeff but it is abhorrent.

SPEAKER_270: It's, um, you, you put success

SPEAKER_63: and a certain measure or the definition of success above everything, above everything. So you asked me what I would do if I were president. Yeah.

SPEAKER_73: Number one, first thing I would do is I would measure human health and well-being and give this, I'm not saying prioritize it above everything else, but at least

SPEAKER_74: put it somewhere in the calculation. Such a good idea. If we had a global measure,

SPEAKER_41: like, it's almost like the census, right? We used to have these people who were the census takers. They would walk around Brooklyn and go up to Brownstone and ring the bell and you'd tell them get the hell out of here.

SPEAKER_03: But some people would give them some information and then they would, we at least knew how many people were in the goddamn country, right? We knew how many immigrants were in the country, knew how many people were living in houses. We had a general idea of how to do public policy. Yes. We've, we've evolved into a great country, the richest country in the world per capita. We have so much going on here. I think we're still the richest. Maybe Norway's exceeding. No, we're not. What is it?

SPEAKER_273: Norway with all the oil? I think there are a couple of the richest.

SPEAKER_03: Saudi Arabia, whatever. This is pretty much the best standard of living when you look at the peace index too and the freedom index. We're not number one. We're probably number 15

SPEAKER_06: on the freedom index, but putting it aside, it's a pretty damn and we don't need to know, you know, the raw numbers of people living here or their ethnicity or immigrants. What we really need to know is are people suffering or not? Are they healthy

SPEAKER_41: or not psychologically? Yep. I mean, we're, as a society moves forward,

SPEAKER_22: it's what I've realized. It's like you resolve, excuse me, all these issues and then it becomes very hard for people to get very polarized about solving the next issue. So we solved public education.

SPEAKER_03: We had a public education system, but then, oh my God, we're going to do pre-K and nursery school. People are freaked the F out that we're going to spend taxpayers' money and I'm like, it's one more grade. K through 12, 13 grades. Pre-K, 14 grades. Nursery school, 15. 15 grades. So if we add two, it is a net-net. At the end of the day, it's like 10% more, 15% more. And it's going to be great. There's going to be smarter kids and it's better for everybody. Health care. The minimus cost, you're saying. Everybody gets so up in arms about it. I know. It's one of the, we're so rigid about,

SPEAKER_22: it's really the political system is just so insanely polarizing everybody.

SPEAKER_41: It's very, we could all be very reasonable if we just had professors and intelligent people debating these issues. That's it. That's it. It really makes me furious. What do you think about this

SPEAKER_06: guaranteed minimum income? This is becoming a little bit of a, amongst elite people, it's becoming up more and more.

SPEAKER_276: As a solution to the jobless society.

SPEAKER_141: A jobless society, a smaller footprint of employment. We have a lot of people on the dole.

SPEAKER_06: Being on the dole is dehumanizing. It's depressing. Well, if we just gave everybody 800 bucks a month and they could live in the country or live out in the suburbs, you know, hey, you have two people making 800 bucks a month, 1600 bucks a month. They can live in a small, modest apartment and not be in line for welfare and all this stuff. You get rid of welfare. You get rid of all this other assistance. You give everybody just a guaranteed minimum income.

SPEAKER_280: What do you think? Anti-American or maybe the most American thing we could do in a jobless future? Well,

SPEAKER_23: it certainly gives people the freedom, which is an American value, to spend the money as they want as opposed to doling it out in these very specific things. But this is like the most hypothetical conversation of all because we don't have a political system that can pass a budget, let alone this. Right.

SPEAKER_22: It's come up as a referendum, though, in some of the Scandinavian countries, which is fascinating to me. It's possible it will pass there

SPEAKER_03: in the next 10 years that they'll have some guaranteed minimum income. And you know what? Norway and Saudi Arabia.

SPEAKER_18: I think there are some people who have some... Yeah. I don't know if Norway does. Emmy... Four Emmy Award winning producer Jackie will probably look that up for me and tell me in the chat room. But I do believe that it's... The Saudi Arabia might be in the Dubai and it might be Norway now with all that goddamn oil they found is doing like a minimum income kind of situation. But it would screw with people's motivation

SPEAKER_89: in a way. Would you worry about that? I worry about that piece, the motivation.

SPEAKER_60: No? I don't worry that about that. Most people, you know... Because you could pass on it.

SPEAKER_63: So let me ask you a question. Why is Bill Gates still working? Why is Jeff Bezos still working? Why is Larry Ellison still working even though he's passed out

SPEAKER_103: of his CEO role? These people, I mean, a lot of these folks work hard because they are,

SPEAKER_29: you know, first of all, because you get the pleasure of the product that you are producing. The social interactions of the people on the job and because you want to win, you want to succeed.

SPEAKER_103: Most people who succeed want to succeed. You know, I don't know... They're industrious. I don't know how much money we would have to give you to change what you do. I don't think it would matter. It doesn't matter. I got a lot of money.

SPEAKER_293: It's exactly right. I mean, I've done fine. I don't have to work. I mean,

SPEAKER_41: I want to come in here twice a week

SPEAKER_06: and have an interesting conversation. That's right. That's it. I'm not going to stop for any time soon. There you go. But it is true. Like, I think Bill Gates is just such an amazing example of capitalism. It's almost the... It could wind up being... He might be the poster child for capitalism because he was a very controversial polarizing leader.

SPEAKER_297: Yes, very.

SPEAKER_06: People said he was a jerk. People... He tore into people. He made people cry. He was investigated for lying and cheating and beating... I'm sure he would be very offended by me saying that,

SPEAKER_89: but the Justice Department did give him significant fines for breaking the rules, so there's no debating that. And there's no debating these personal anecdotes of people who felt he was just on an interpersonal

SPEAKER_22: relationship brutal.

SPEAKER_301: Including, by the way, his co-founder, Paul Allen.

SPEAKER_22: Who wrote in a book...

SPEAKER_301: Yep. He's quoted in that book also. Yeah.

SPEAKER_22: I mean, the quote was crazy.

SPEAKER_18: I mean, he basically... Bill Gates tried to take his shares of the company when he was suffering from a debilitating disease. Was it Hodgkin's disease? What did he have? I don't remember. Whatever disease it was, I mean, he basically overheard Bill saying this, and he came out when they're both billionaires, they're both, you know, 10 years from their deathbed, and he basically called Bill Gates out on it. And then, you know, I met Bill,

SPEAKER_164: you know, a number of times over the years. I have a couple small conversations with him. I am so impressed by what he's done

SPEAKER_41: in his second act. And you know what? We're all kind of jerks or whatever, in this kind of role when you're coming up in your 20s and your 30s and you're trying to deal with this enormous amount of stress and leadership. It's not easy. You're in a dogfight and you're possessed. I felt I was possessed in my early years to win. Literally demonic possession. I wanted to win so badly. I didn't care about the cost or human cost or the last thing I care about. I don't care if anybody's crying. If somebody cried in front of me, I'd laugh. I'd literally laugh at people who cried. I had people cry. I just don't laugh. What the fuck are you crying for? Business.

SPEAKER_302: You're fired. Get out of here. Just go make yourself better. I mean, I was a... And I think that's probably half of Gates,

SPEAKER_250: but there is something soulful about what he's doing right now. I mean, to go and to eradicate diseases from the planet,

SPEAKER_41: to go and to work on these things that he could be on an island, he could be doing whatever he wants. Larry Ellison bought an island. I mean, it's putting Larry Ellison to shame. Honestly, Larry Ellison and Jeff Bezos

SPEAKER_06: watching Gates, they really should be ashamed in a way that they're not doing something more meaningful with their time and that they, you know, in Bezos' case, that these abhorrent stories are coming out. I mean, if I'm Bezos,

SPEAKER_41: I would be absolutely mortified. Mortified. I mean, how do you go to your mom? How do you go to Thanksgiving and your mom's read that story? Maybe his mom's dead. I don't know. But I mean, if I went, how could I go out in public? When you talk about this sort of like your,

SPEAKER_44: how you're perceived in the world, how does a person like that... I can tell you. I can tell you.

SPEAKER_103: I would be so embarrassed. You've raised actually one of the core issues

SPEAKER_29: in this Leadership BS book because one of the interesting things is we say we want leaders

SPEAKER_26: that have all these wonderful human qualities, modesty and authenticity and et cetera. Jeff Bezos is number four on the most admired leaders list.

SPEAKER_309: Unbelievable. That's got to change.

SPEAKER_26: It won't.

SPEAKER_310: Because the product's so good. It will not. No, because, oh,

SPEAKER_103: because people will rationalize. So, you know, so there were stories about Steve Jobs and the whatever and the story is yes, but, yes, but he's built a great company. Yes, but he's built a great product. Yes, but he's made so much money.

SPEAKER_26: So we will make excuses for people who are successful and for companies that are successful. That's so fascinating. So all you need to do is look at

SPEAKER_73: or your listeners, watchers need to look at, go get Fortune's list of most admired companies, go look at Fortune's list of best places to work and ask yourself the following question, which I've done for you so you don't have to do it. What is the overlap? Four companies.

SPEAKER_32: Only four companies are on both lists

SPEAKER_313: and it's... All right,

SPEAKER_68: so the list of the best places to work and the most admired companies.

SPEAKER_27: Interesting. Almost no overlap. Wow. Almost no overlap.

SPEAKER_317: So we admire...

SPEAKER_270: We admire success. Right. Toughness. Mm-hmm. The means, the ends justify the means. Of course. Of course.

SPEAKER_18: It's very interesting you put this out because I do think that we're going to, you know, we're living in a time of great change. You lived through the 60s.

SPEAKER_319: You were in your, I guess, teens in the 60s or something. Yes, kind of. Maybe 20s? I don't know. Yes, that's it. Where were you in San Francisco during that time? Ah, no. No, okay.

SPEAKER_26: I was going to college in Pittsburgh, Pennsylvania. Okay.

SPEAKER_22: It was a time of create... Carnegie Mellon. Ah, good school. The boys who are... We have a couple... I let some entrepreneurs I'm thinking about investing and sit in the studio. It's a great way for me to close deals. They're like, wow, Jason's really great. Maybe I could be on the show someday. It's a good little secret weapon I got. But that was a radical time of change.

SPEAKER_03: Yes. Right? And everything was open for discussion. Yes. It feels to me...

SPEAKER_41: I always regretted not being born. I always wanted to have been born in the 60s, Woodstock, protests, you know, just that great time of change. I felt like that was where I should have been born. Now I don't feel that way. I feel equally like this is the time. No.

SPEAKER_248: There's a tremendous change in the area, isn't there?

SPEAKER_29: There's a tremendous amount of uncertainty, I think. And there's a tremendous amount of...

SPEAKER_63: There's a tremendous amount of people trying to basically BS their way through. We got an economy, with all due respect to your visitors, the Chinese economy, which is BSing its way through. I don't think anybody believes the official figures out of China. Nobody understands

SPEAKER_73: the condition of the banking system, including, by the way, the people on the top because there would be people all up and down the line.

SPEAKER_327: Fraud from the bottom to the top. That's correct. I mean, if you'll put plaster

SPEAKER_22: in baby formula, like literally people have been arrested for this. Yes, of course. If people will mix fillers

SPEAKER_03: into cement and the buildings collapse, it doesn't take a genius to realize that an unregulated economy that institutes some, you know,

SPEAKER_250: a version of capitalism into an unregulated economy, it is going to be an unmitigated disaster. When the music stops, how bad will it be?

SPEAKER_63: It's going to be bad. It's going to be bad, but it's not just China. I think we have, I think there are issues of, as you know, in the United States in the 2007, 2008, and only time will tell whether that situation has been cleaned up. Could be some remnants.

SPEAKER_103: We had financial statements that bore almost no resemblance to the reality of companies' real well-being. We had CEOs lying about, you know, the condition of their balance sheets

SPEAKER_29: and still with the quarterly numbers, who knows what people are doing to make all of these things. So we live in an interesting time. We also live in an interesting time. You know, all you need to do is walk to your lovely office or, for that matter, walk anywhere to the beautiful gilded with gold leaf on the top, courtesy of Willie Brown, City Hall, and within the $500 million, you know, so fabulous City Library. And between City Hall and the City Library, there's homeless people living in the street. It is unbelievable. And by the way, if I could...

SPEAKER_211: This city is the worst-run city. I mean, I lived in the greatest city.

SPEAKER_110: I don't know how Ed Lee

SPEAKER_68: can run for mayor unopposed. You should be running. I'll run for mayor. I'll tear this place up. It'll be, Giuliani and Bloomberg.

SPEAKER_06: I will be the... Literally, if you put those two gentlemen together, like, I will tear this town apart. It would be otherworldly, the protest. I would literally have a thousand anarchists and protesters outside of my building every day. Because I wouldn't deal with any of the shenanigans. If you deal crystal meth openly, I mean, I don't mind if you smoke weed all day long, but if you're going to be on methamphetamines and bath salts, not in my world. Ed Lee is an embarrassment. Jane Kim, very sweet person. I've met her a couple times,

SPEAKER_03: but it's embarrassing that the Tenderloin is how it is. And there's an acceptance in the city. I've only been living here for a year. The acceptance and the openness of the city is fantastic when it comes to transgender and gay and folk singers and poets 100% for it. But not for people who are either violent or mentally ill or abusing, let's just say, the top three or four most aggressive drugs. I'm totally for

SPEAKER_18: decriminalization of drugs,

SPEAKER_22: but I am not for people taking bath salts on the street and methamphetamine on the street. This is dangerous shit.

SPEAKER_47: And by the way, it's expensive because when these folks overdose or when they're on and they go to the San Francisco

SPEAKER_63: General Hospital emergency room, it costs real money. And it's much, again, it's much cheaper to prevent. Hundreds of thousands of dollars. Yes, it's much cheaper to prevent this. There are places in the country, not this one, where they're actually

SPEAKER_103: starting to give people free housing.

SPEAKER_110: Housing first movement. Yes. Put them in housing, give them social workers to help them, give them food. It's a start. And keep them out of the damn hospitals where it's costing a ton of money.

SPEAKER_68: It's so obvious.

SPEAKER_18: I think there's spending in this city, there's 7,000 homeless people. They have incredible,

SPEAKER_03: wonderful studies on homeless here. I know this because I'm an investor in a company called Hand Up trying to help this situation. And let me just say, I mean, I may sound like I'm being a jerk right now. I am 100% sympathetic towards the plight of anybody who is suffering from mental illness, drug abuse, and who's homeless. I do think that this city

SPEAKER_06: is just absolutely, insanely poorly run and that Housing First would work. And the fact that the richest city in the goddamn country cannot put a Housing First project together is a complete and utter embarrassment. Every single person in this government in San Francisco should resign and write a fucking apology letter. I'm dead serious. It is, the job they're doing is so goddamn embarrassing. And everybody's like, but we're working hard. You know what? Here's the thing.

SPEAKER_340: Hard work. It means nothing. Results is what matters.

SPEAKER_63: And by the way, if you read the Heather Knight's Insider column in the San Francisco Chronicle a couple weekends ago, what the city's gonna do with us.

SPEAKER_29: The city has a problem because the Super Bowl is coming. And so the question is, how are we gonna get them out of sight

SPEAKER_73: for 10 days? That's it.

SPEAKER_192: That's at least program. At least program. You have to hide. Can we get them out of sight for 10 days?

SPEAKER_36: Unbelievable. You live in the city or you live down there?

SPEAKER_29: We have a peer to tear in the city. We live in Hillsborough.

Chamath Palihapitiya: Okay, great. So you'll get to see both. Both. And it's just unbelievable.

SPEAKER_18: I grew up in New York in the 80s. I saw the tail end of the 70s under Dinkins and other nonsense. It was, and Koch who was,

SPEAKER_80: you know, there's a whole another story. I mean, to be a closeted gay man and be anti-HIV research and anti-the gay community is just what an a mess. A hypocrisy. A lot of hypocrisy. A lot of hypocrisy

SPEAKER_349: and leadership. It is true.

SPEAKER_38: One of the things I tell people to do in the Leadership BS book is I tell people when you hear these wonderful leadership stories, do a little due diligence. Not even a lot.

SPEAKER_350: Do a little. A minimum. People tell you how wonderful they are. Don't believe them.

SPEAKER_172: Yeah. I, you know,

SPEAKER_18: it's really great that you wrote the book because I do think we have to call it out. We have to call it like we see it. I always enjoy having you on the program. I'm going to just make a note right now. Emmy Award winning, for Emmy Award winning producer Jackie, let's just set a date now. One year from today, Jeffrey comes back on the program if he's got the book out or not. I just, I love a conversation with you. We'll just, we'll touch on everything again. It's really a pleasure having you on the program. And if you want to get into the Graduate School of Business, it's incredibly hard. It's still worth it to go to Graduate School, you think?

SPEAKER_22: Yes. It is. At Stanford for sure. What does it cost to get through the Business School? 200 grand?

SPEAKER_03: Probably. Cheap at twice the price. Is it really? Yeah. Because the people who graduate from there just do phenomenal.

SPEAKER_29: Because, is it because you've, you've bought your way into one of the most amazing social, first of all, you've got a fabulous education. Right. And secondly, you've bought yourself a credential which is golden.

SPEAKER_41: It is. It is. It's still worth it. I agree. If you get into that level of program, you're going to make 250 grand a year. So the 200K is a bargain. It's one year of your salary. That's right. Yeah. These other schools, the University of Phoenix, whatever, these people are charging and it's like, these poor, like, I just think that breaks my heart in education. You have these GIs that are coming back, they've got everything stacked against them, they get an IT degree online from University of Phoenix, they go 50K in debt, and then they think they're going to get a 100K job and they can't get any job because IT business is going away. Horrific. All right. Everybody buy Jeffrey Pfeffer's leadership bullshit, I'm calling it right now, leadership BS. Fixing Workplace and Careers, One Truth at a Time. What a great discussion. Loved having you on the program. You can follow Jeffrey,

SPEAKER_18: Jeffrey Pfeffer, P-F-E-F-F-E-R, on the Twitter and read his column in Fortune. You do that, what, every month? Twice a month. Twice a month. I get your emails, I'm on your email list, you're on my email list. I always click through and read it. I'm going to have to write a rebuttal to one of your pieces one of these days.

SPEAKER_362: That's fine.

SPEAKER_18: No, you know what?

SPEAKER_319: Where did you grow up, by the way? You were an East Coast guy? You grew up in Pittsburgh?

SPEAKER_26: I was born in St. Louis and grew up in Tucson, Arizona. St. Louis, huh? But I have a former student of mine from this last year who told me that if I showed her my birth certificate with St. Louis on it, she wouldn't believe it. She believes I'm from New York.

Chamath Palihapitiya: You feel like you're from the Bronx.

SPEAKER_03: I feel like you're from Bronx. I don't feel like you're from... St. Louis. St. Louis. No, St. Louis is legit. Actually, you know what? You want to talk about St. Louis pizza?

SPEAKER_22: Marron. There is a place called Tony's Napolitano in the city. I don't know if you know it. It's amazing in North Beach. I mean, and I'm a pizza guy

SPEAKER_18: from Brooklyn. And they have a St. Louis style thin crust pizza there that I literally wake up dreaming about. And I've lost 10 pounds on this keto diet because I'm not allowed to have any carbs. The day I get off this keto diet, I'm going there to get the St. Louis pizza. There you go. That's my final plug for the show. Hey, thanks to the sponsors and WeWork. Hey, thanks for sponsoring us. Two great years we've had here. I really appreciate it. WeWork is a great place for you to go work. Ashley, thanks. Ashley and Bryce are doing a great job in operations. And the Launch Scale conference is coming up October, whatever, 12th and 13th, I think. And then the 14th and 15th is the Launch Mobile event. Go to launch.co. You'll see all of our great events. And remember, our events are free for founders. And people are paying $3,000 or $4,000 to go to TechCrunch Disrupt. And I can tell you a little secret. I have messed and disrupted

SPEAKER_03: Disrupt so much that if you email and you complain to them about the $3,000 price tag they're gouging founders with, they'll give you a free ticket. They couldn't get anybody to come to Disrupt this year so they started giving the last couple of them. It's really the conference is waning and people realize

SPEAKER_18: paying $3,000 is a ripoff and they don't want to pay it to Verizon or AOL or whoever's in charge of that thing now. And they're giving everybody free tickets. So if you paid for a ticket

SPEAKER_03: to Disrupt, you're a sucker. You are an idiot. A bunch of founders are getting free tickets. I talked to two today. I said, you're going to Disrupt. How did you afford $6,000 in tickets? They said, I emailed. They said I had no money. They gave it to me. I talked to another set of founders. They said the same thing. If you pay for Disrupt, $3,000, Jason Calacanis, I'm telling you right now, he's saying, you're an idiot. You got suckered. And don't pay $10,000 for a demo pit table there either.

SPEAKER_41: I give those away for free too. I don't have to make any money off these conferences. I just do it for the fun of it. Have a great conversation. That's good leadership, right?

SPEAKER_370: That's great.

SPEAKER_41: This is my thing about leadership. I am so goddamn lucky. I've done so good in my career and I'm an outsider. I just want to give back as much as I can. I'm 44, whatever I got, 20, 30, 40 years left, Jeff. I just want to give back as much as I can and then invest in some companies and have them turn into billion-dollar companies and make a ton of money and get a jet. It's not so wrong. I'd like to buy the Knicks. I mean, really... The Knicks. Because you want to fix them.

SPEAKER_06: That's it. It's been so tough since Patrick Ewing and Charles Oakley and stuff. That would give me peace in my life. Forget about being mayor of San Francisco. I'll do that if I have to. If I'm called to service, I'll do it. But the thing I really want to do, Jeffrey, is I just want to make a couple of billion dollars and then buy the Knicks. And then I'll make it into a benefit corporation and the benefit for the city of New York and for Knicks fans will be championships. That's my platform. Enough. Jeffrey's got to get back to Stanford. All right.

SPEAKER_80: Thanks a lot, Emmy Award Reading producer Jackie. I just love working with you, Jackie. You're the best producer I've ever had and I've had so many great producers. I just want to thank you, Jackie, for making my life so easy

SPEAKER_25: and making the show so great. Thanks again.

SPEAKER_374: All right. We'll see you next time. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye.