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Masters of Scale with Reid Hoffman
72. YouTube's Susan Wojcicki: How to find — and keep — true north
72. YouTube's Susan Wojcicki: How to find — and keep — true north

72. YouTube's Susan Wojcicki: How to find — and keep — true north

Masters of Scale with Reid HoffmanGo to Podcast Page

Reid Hoffman, Susan Wojcicki
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38 Clips
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Oct 6, 2020
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Episode Transcript
0:00
Hi, it's Reed. I'm excited to share the long-awaited season 2 of our sister podcast. Should this exists is about to drop should this exists is hosted by my friend Katerina fake and ask big questions about the technologies that shape our lives this season robot caregivers deep fake detectives psychedelics and more. Should this exists season 2 launches, October 14th, subscribe now in your podcast player,
0:30
R or visit should this exist.com to sign up for their excellent newsletter. Hi, it's read as you may have noticed. There are now two kinds of Masters of scale episodes are classic episodes prove a theory about how companies scale and features surprise guests and original music. I've hosted 70 of these episodes since 2017 and they're designed to be timeless this year. We also launched masters of scale rapid response with host Bob safian.
1:00
You're fast Focus interviews with leaders in the thick of massive change sharing insights you need right now based on your feedback. We're putting both episodes in the same feed. Here's how to tell them apart the headline for a rapid response episode starts with the words rapid response and the headline for a classic episode starts with a number and now on to this classic episode of Masters of scale.
1:28
Hi listeners read here. We're going to start today's episode with a visualization exercise.
1:41
So sit back relax and open your mind to the sound of about to play for you ready. If those three notes made you picture the grainy image of a prairie dog turning suddenly to eyeball the camera then you're probably one of the millions of people who have seen the video.
2:06
Bo dramatic chipmunk
2:13
That video was first uploaded to YouTube in 2007.
2:19
YouTube was only two years old at the time but it was already averaging over a hundred million views a day. It gave us new celebrities
2:30
Justin Bieber Justin Bieber
2:32
just new catchphrases how to be ninja is a DVD for you.
2:38
Hi.
2:39
Funny, why is this happening to me? I had two kids hide your
2:46
wife new genres.
2:49
Welcome to a Minecraft Let's Play
2:52
video good mythical
2:56
morning. Now, you've heard of the combination
2:59
restaurant. Let's talk about that and a new job description YouTuber.
3:11
Hey, what's going on? Everybody for first we Feast I'm Sean Evans and you're watching hot ones. Hey guys, what's up and welcome back to my YouTube channel. What up everyone? It's your girl Lily smash that subscribe button will see you next time. Bye everybody.
3:27
The magical thing about YouTube was that anyone could post a video of basically anything anytime it's a double rainbow all the way. Whoa, that's or death.
3:43
so as the platform scaled
3:46
Jolly Whitman
3:52
and scale
3:57
and scale
4:01
one thing became clear
4:03
ain't nobody got time for that.
4:07
Well, yes that but also YouTube we need some guidance to support this Rich strange diverse ecosystem.
4:17
The bigger you get the harder that becomes and the more critical it becomes too. That's why I believe that to navigate massive scale. You have to find and keep True North established clear landmarks that point to your founding principles. They'll guide you when you're at risk of losing your way.
4:38
You got to have incredible Talent at every position. There are fires burning when you going home.
4:48
Gonna be amazing. There are so many easy
4:51
ways. So so do I have no idea what to
4:53
do? Sorry. You made a mistake. Would
4:55
you have to time it right?
5:08
This is masters of scale.
5:14
We'll start the show in a moment after a word from our sponsor HubSpot.
5:20
When you're a prospective customer, you are showered with all sorts of attention and then something magical happens you write a check or Supply your credit card and now you're a customer and all the people you are dealing with on the stories that you were told now shift that star Miss Shaw CTO of HubSpot CRM platform for scaling companies and that not so magical shift. He's talking about he sees it in companies that still View Customer acquisition is a funnel.
5:49
That was a common metaphor in the sales and marketing world. You have people coming to the top of your funnel and some number of them expressed interest in become a lead. And then at the bottom of the funnel pops out this customer and we're done that was the output it misses the fact that the customers actually an input back in when do customers become an input when they lead to more customers which brings a different shape to mind.
6:12
We think about a our entire customer experience as a flywheel and the nice thing about a flywheel is that it's a closed loop system is like we acquired them. We engage them we delighted them and then they cause us to get more customers. How can you turn a customer funnel into a flywheel Dar mesh will share what he's learned later in the show and to get your customer fly wheel turning visit HubSpot.com
6:41
I'm Reid Hoffman co founder of LinkedIn partner Greylock and your host and I believe to navigate massive scale. You have to find and keep True North when it comes to navigation. It's hard to find a more classic phrase than follow the North Star. It's very close to the North Pole. The southern hemisphere has its own pole star Sigma octet has but follows Sigma octet has hasn't quite caught on as a saying.
7:10
The North Star never appears to go anywhere because it's so near the axis around which the World Turns that makes it perfect for navigation cow hands would use it on cattle drives explorers would use it on Expeditions. And if you were in the scouts your troop leader might have taught you how to spot it. If you ever get lost no matter where you are in the northern hemisphere if you just find the North Star you'll know how to get your bearings finding and keeping true.
7:40
Earth is just as important when you're navigating a company through massive scale this kind of growth happens fast. If you and your team have an established founding principles as clear and bright as the North Star it's all too easy to become hopelessly lost. I wanted to talk to Susan wojcicki about this because as the CEO of YouTube She's led the organization through dizzying scale and the wrenching challenges that come with it in 15 years. YouTube has become the world's largest video.
8:10
So platform, it's also the world's second largest search engine next to its parent Google where Susan was one of the chief architects of Google's advertising and analytics model. There's maybe no one in Silicon Valley better qualified to speak on the experience of navigating a business through Rapid growth at Google and YouTube all the while trying to keep one eye on the horizon, especially because she remembers when that Horizon and the entire landscape around Silicon Valley looked very
8:40
Different
8:41
when I grew up nobody knew where Palo Alto was. In fact, I always used have to say outside of San Francisco people knew either Stanford or the bike
8:49
shop Susan's dad was a physics professor and she grew up on the Stanford campus with her sisters Janet man. You may remember him as the founder of 23andMe and a previous guest on the show Growing Up in Silicon Valley would give Susan a unique vantage point from which you could actually watch the landscape
9:08
change.
9:09
I would go to this place where you get temp work. It was called kelly girl at the time. It's been renamed Kelly Services. I was actually sent to the Palo Alto Sanitation Company for three weeks where I answered the phone and did filing for them, but then I was sent to a start-up and that's when I realized there's something happening here. That's really interesting.
9:29
That's something was the start of the.com era. It would transform silicon Valley's trajectory and Susan's as well growing up among academics. She'd always
9:39
And she'd become a
9:40
professor. I was doing a master's in economics and I was about to apply for a PhD and I just couldn't bring myself to apply. I was so close. I had already completed this master's program, but it just wasn't in
9:53
me. Susan had been on a lifelong path toward Academia when the siren Call of silicon Valley's growing potential demanded that she changed course her sense of True North had shifted. She got her MBA instead and
10:09
That brings us to 1998 Susan and her husband have just bought a house in Menlo Park a Menlo Park now at the epicenter of the tech boom.
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We didn't know if we could afford the mortgage. So we decided we were going to rent part of our house.
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Then it turned out that Sergey and Larry were starting their company and they needed Office Space.
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She's referring of course to Sergey Brin and Larry Page cofounders of Google.
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It was actually really hard to find office space our joint friend suggested. Why don't you rent Susan's and Dennis is house. So they showed up and they said oh like this looks great. They were living in their dorm.
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So Google and it's seven employees started out in Susan's literal garage Susan laid out the map.
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Orient us for an origin story from that time period that I'd never heard.
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They enter through the garage and they actually had a hallway with a few bedrooms off of it. And it sounds like it's really big but the whole Space was probably less than a thousand square feet.
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I did have this small issue because I had ordered a new refrigerator for my kitchen and I was super excited about it.
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As a newly married new homeowner and the delivery time was something like 8 to 5. And so I took a shower at eight.
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And at 8:05 when I came down the river dry had already been delivered and Sergey and Larry had put it in their space.
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If they didn't know they just thought like you know, there is a refrigerator. This is where it went.
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I had a call Sears at the time and say can you reinstall my refrigerator and they were confused like why did you install your refrigerator in the wrong place? Nobody has that
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issue?
12:26
I find this story delightful a lesson and how quickly directions can go astray. If you lose vigilance in the wrong five minutes, but refrigerator mishaps aside Susan's early arrangement with Google would end up pointing her toward your own true. North Google soon outgrew Susan's Menlo Park Garage. They were focused on one thing make search better that was their clear true north and all of the resources when in a making sure they did a better than anyone else.
12:57
But they needed guidance on how to grow their users. So they tapped their former landlord to be employee. Number 16. Google's first director of
13:06
marketing at the time. It was unclear that Google was going to be successful because they were so many other search engines. None of which really did a good job, but it was a very crowded space. Nobody thought there was actually any money in search
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even if you know Google's origin story, even if you live through it, it's truly challenging to recall what that mine.
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The set was like search engines at the time or choked with paid results and banner ads most describe themselves as portals and cram their home pages with headlines and widgets designed to keep you Tethered to add bearing content as long as possible. So when Google launched its plain white homepage, it was a revelation and a result of following their true north Google kept their Compass trained on those three words not their
13:56
A slogan don't be evil. But their internal Mantra make search better. This would be the key to their scale. But as Susan said no one of the time could see how there would be much money in search. They didn't have a map and let's be clear at that time. Neither Susan nor Google had a map either.
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I didn't really know what I was doing. And in fact, I was a little scared because I thought I knew about marketing but never really been a
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her and if I really had been a marketer everything they would have said to me would have scared me away and business will you learn who's your target audience and you build a targeted campaign? And so it's a who do you want me to Market to and they said everybody we just want everybody to use Google it can be useful to everybody which is true. But how do you do that with no budget
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with no clear directions to guide her and no map to follow Susan use Google's core product. Its excellence in search as our North
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Star.
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I quickly learned because we had no budget that Building Product and using the product and the property that we had was the highest leverage way
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what Google needed most was more users. So Susan looked for groups who really needed search
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we created this way for all universities to have Google search on their properties and that was a program. I worked on everybody in college at the time had internet and they had lots of searching requirements and it was just a really quick way to spread in to get the word out.
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How did you
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Make the University's aware was it just simply a make a search bar include scible and sent out an email was their PR strategy was their targeted
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Outreach. So we created a program that was free where you just copy and paste some HTML and put it on your site and then it created an automatic site search of your University and whatever domains you chose as well as
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Google. Yep. I remember that that bit of HTML very clever for those who don't remember this was just a simple.
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Embed code that would let universities adopt. Google's web crawler as their own. It solved a problem for universities saving them Untold hours a programming their own Search tool and it saves Susan Untold hours of relationship building.
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I could call a few universities and I would have a long conversation or I could just put something on the website and make it free where you copy and paste it would come in every day and I would see thousands of universities who had downloaded it and used it. So I very quickly learned.
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Learned that this was a much more scalable way to be able to get the word
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out. Google's user numbers took off by the year 2000 that captured a quarter of the search Market, but headline after headline quipped. How will Google ever make money this definitely seems quaint now, but at the time it was a serious question, they'd given out their search bar for free. They got rid of the traditional ways that search engines made money in the past. How could Google Earth?
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Revenue without ruining the guiding principles that drove their success go back to what your scoutmaster might have told you the key to navigating Uncharted Territory is if you don't have a map use a compass for companies, it's the same when there is no map use your compass. The one that points True North to your founding principles for Google quality of search results was the magical metric they used to define success.
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Us and they follow this Compass as they design their own ad Model A transformation from industry Norms.
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One of Google's biggest Innovations was focusing on user quality and saying ads is going to have its own quality, but it's going to be in a separate section and will never mix it too because the early search engines had this whole paid inclusion model where you could pay to be in the search results in Google from the very beginning. We rejected that
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so Google made the decision radical at the time not to mix paid ads.
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The organic search results their next move was equally contrarian
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Google probably had about 30 people and we decided to build our own ad system. And that was just really in retrospect and insane decision that we have no people that understand advertising. No one has ever sold out and no one has ever built an advertising system. But yet we're going to build one when they're already are all these existing
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systems. It may have seemed like hubris or is Susan called it insane to decide you're better off inventing technology.
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I'm a brand new model then using what's there and in most cases I would not recommend it but Google's Founders understood their own true north. Their prime directive was to improve search for individual users. And that had to be true for the revenue model to whatever they built could not compromise their product. They ads would have to be additive and this was no small
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feat our first ad models never really worked that well and the
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First one completely failed where we just took Amazon affiliate links and serve them and nobody clicked on them and there was a moment where everyone thought maybe we were wrong and we should just go back to banners but we innovated a number of times on the ad model the vision was and I don't want to say this was mine, but they said we should really make the ads be targeted. So if you type in Picasso we should show you ads related to Picasso or you type in I don't know Golden State Warriors. It should be going to say
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a warrior merchandise and we should do that in every single language of the world and it should be sub second delivery times. We would never want to slow down Google for ads and it should be super targeted and relevant. We had been working on it for over two years that we actually came on a Model that's pretty close to what we have today with the existing AdWords ad words. Google's advertising platform today call Google
19:51
ads.
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Google's targeted ad model has worked so effectively it can feel as though your browser is spying on you, but that's startling accuracy is by Design. Remember Google's True North is the quality of search result did the ad turn up useful results for the user and when they clicked that the ad take them somewhere they wanted to go these metrics are Consolidated into a unified quality score. And at this calculation. Google has gotten very
20:22
Very very good before we get to next part of Susan's story. I thought it would be useful to understand what true north actually means scientifically even if what we learn is that it doesn't really exist
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North is not really a natural concept. It's a human definition. So that means there's no overriding sort of True North in the
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universe that dr. Becky smethurst astrophysicist at the University of Oxford.
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And her insights on True North build toward a great metaphor for entrepreneurs.
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So if for example spins on its axis with North tilted 23 degrees compared to the sun's North and that's what gives us our Seasons right? We're pointing towards the sun in summer and were pointing away from it in winter Venus though. It's Ben's in completely the opposite direction. So it's north is flipped compared to ours Uranus spins on its side 98 degrees compared to the Sun so every single object
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Object in the solar system has its own individual unique North
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and if this is already making it feel like you don't know which end is up. Don't worry. Dr. Becky says physics has your back
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visiting that rotates. You can always Define a North the definition that physicists have agreed on with it. If you make a fist with your right hand and let your fingers curl in the direction that the object rotates in and then you pop your thumb out then the direction your thumb is pointing is north.
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That's something we call the right hand rule.
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The right-hand rule is a useful way to remember that North is relative to each rotating body each planet each star or even each galaxy
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The Milky Way is made up of over a hundred billion stars and all of those stars are orbiting around the black hole at the very center just like the planets orbit around the Sun in our solar system. So there's a whole system of stars. It also
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rotates. So since our galaxy rotates,
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so it has its own North but hang on finding it gets a little more complicated for years astronomers assumed that the Galaxy is north and the Earth's north were the same
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before physicists really agreed on what the definition of North was people referred to anything in the earth's northern hemisphere is North. So for example, traditionally we have called The Milky Way's North Pole as the pull of the Milky Way that
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In the earth's Northern
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Hemisphere, but then as our tools for observing the night sky improved we learned which direction the Milky Way was actually
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turning.
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And what we find is that it rotates in the opposite way to what the solar system and the sun does. So if we use the right hand rule from before essentially we'd sort of be pointing thumbs down. So the Milky Way's North Pole is in the direction of the Earth's South Pole.
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So what did scientists do when faced with his case of mistaken direction that they go back and scrub all the textbooks and change all the planetarium show scripts. Nope. They kept the old
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Definition
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technically what we call the galaxies North Pole is actually the Galaxy South Pole. You're sort of stuck with this traditional definition that if we change now will make communication very
23:45
difficult, even though it sounds dreadfully unscientific to keep describing the wrong North for the entire galaxy. It would have caused even more chaos to rename everything because after all the only reason we bother to determine North in the first
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Place is to establish a Common Language.
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The main point of defining what to call North is to agree on a coordinate system. So if I say that a star is visible from the Northern Hemisphere you immediately know where on Earth. I mean if I say that a star is located in the galaxies Northern Hemisphere astronomers and astrophysicists all agree on where that is gone are the days of Lone Hero science, right? We have these huge International Teams and collaborations working on the same problem. So we need these
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Naming and language conventions just to be able to communicate and work effectively together. So I think that's a nice analogy for a business to
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it is a nice analogy defining True North for your organization, especially as it scales gives everyone on your extended team a way to communicate and to agree on what's most important this impacts not just Grand corporate strategy, but the Teeny day-to-day decisions made by everyone on your team.
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Thank you Becky for extending our metaphor again. That was dr. Becky smethurst astrophysicist at Oxford and YouTuber her channel is called dr. Becky and that brings us back to Susan Story, which is about to merge with a story of YouTube when we last left her Susan at help Google scale, its mission of making the internet navigable. What is the next Undiscovered
25:27
Country?
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I started working in video with Google's product called Google video and we actually started believe it or not. Just with a simple web page where we said send us your video upload your video to Google and we didn't even tell people what we were going to do with it and surprisingly people all over the world uploaded video why they did that. They just wanted to share it. I remember the first video I saw which were these puppets that we're just singing and a Nordic language it was
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Really fascinating
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Google video was going to fit squarely in the Googles mission of making search better at Essence better search means better access for everyone and as Google grew its true north evolved to democratizing the internet
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Google early on had a lot of philosophy about democratizing. Like how do you make advertising accessible to everyone? How do you make publishing accessible to everyone? And so this was very aligned with making video production?
26:28
Google wasn't the only entrance into the race toward a video platform to democratize broadcasting. There was
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another alright. So here we are on the elephant's cool thing about these guys is bent it's that they have really really really long trunks and that's that's cool. And that's pretty much all there is to say
26:56
That is the very first video uploaded to YouTube posted by and starring co-founder Javed Kareem on April 23 2005. You may well have seen it since then. It's been viewed a hundred and six million times. And if you watch this video, it says so much about what YouTube's appeal has always been the host is standing at the San Diego Zoo on an overcast day. He's wearing a casual windbreaker. His head is actually obscuring part of the
27:26
Elephants, he's describing the focus isn't even on the elephant's it's on him.
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So YouTube like Broadcast Yourself was the original tag line. There was this appeal of the democratization of broadcasting what you had to say
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capturing this democratize video Market with something Google video and YouTube were racing to do and YouTube was winning
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YouTube launched a few months after us and we're very soon bigger than
27:56
Is it had to do with some of the ways their product worked and the fast turnaround in terms of upload to having that be available for all their users and we realized that we were losing it was both a moment of incredible highs while we found this great area that we could develop and build product and then soon afterwards realizing. Wow, as soon as we thought we had found something. We were failing
28:19
failing at scale was not a familiar experience for Google even back in 2005. The company had gone.
28:26
Public the year before and they had just reported a 700% increase in third quarter profit largely. Thanks to the success of AdWords. Should they go toe-to-toe with YouTube and try to kill them or was it more aligned with their true north to make them part of the mission and buy them
28:44
it was clear to me. This was just a huge opportunity in terms of future video and I was a big Advocate along with solar common guard who was also the CEO of YouTube. We got together and we
28:56
Had a good conversation with Sergey and Larry. I produced a model. I did a Model in like 15 minutes to show that this actually had huge potential in the future not just in views, but in Revenue to we don't have a lot of time we had to make the decision really quickly because it was for sale and we decided yes and the rest is really history
29:14
as Susan just mentioned this move happened fast. Their ability to act in the moment was thanks in part to a culture of decisiveness championed by then CEO Eric Schmidt for more thoughts on that.
29:26
You can find his episode of Masters of scale in our show feed. Google was also able to move quickly because their Compass was clearly pointing the way they knew why they were buying YouTube and where they believed it would take them, but the stakes were
29:40
high. We purchased it for 1.65 billion. And so the first direction that we got was don't screw it
29:47
up. We'll be back in a moment after a word from our sponsor HubSpot. Imagine this man.
29:56
Massive metal flywheel and that everyone the company's kind of touching that flywheel. We're back with Dharma Shah of HubSpot, which creates Marketing sales and service software and he's describing how your perspective shifts when you see your customer acquisition as a flywheel instead of a funnel. Our work is not done simply because we got this customer on board. Our work is not done when we solve this support issue. It's a continual process the best part about thinking and flywheels instead of funnels flywheels.
30:26
All advertising or marketing and brand campaigns you can continue to do those but those won't scale because you're putting the same number of dollars into get y number of customers, but the nice thing about thinking about as a flywheel is that the more customers you have and a greater percentage of them that are happy that our Advocates the more scale you get when you're building your flywheels momentum. You can't just serve your customers. You need to Delight them.
30:51
Serving is basically to check the box you promised the customer is going to get you from point A to point B delighting is to say okay is the overall thing something that brought them Joy relative to what they might have experienced or might have expected. This is actually make them happy. How exactly can you tell if your customers are happy their mesh will share what he's learned later in the show. In the meantime. Learn how you can create remarkable customer experiences with HubSpot CRM platform at HubSpot.com.
31:26
We're back with Susan wojcicki when we left her. She had just helped broker the sale of YouTube to Google. She'd been given a single guidestar. Don't screw it up. Those words would ring true a few years later when Susan was given another sudden decision to
31:43
make what happened was Larry just ask me. Remember he said what do you think of YouTube? He didn't say? Oh, I'm offering you the job. And by the way, it wasn't called CEO at the time. I was just like SVP of
31:57
Cube a beautiful. Yeah,
31:59
if it's not already clear becoming CEO is a huge shift in responsibility. Even if you've been working for more than a decade at the parent company suddenly the one whose job it is to keep True North is you
32:13
I haven't prepared anything. I didn't know that's what we were going to talk about that day. But I just gave him my off-the-cuff thoughts about YouTube and said, I was really interested a couple weeks later. I became
32:26
Became CEO of
32:27
YouTube This Moment. The moment of instantaneous decision is a perfect example of why it's important to keep True North not just for your business, but for yourself when you're caught off guard when you prepared nothing and are asked to make a gut call. You want your gut to be right YouTube
32:45
was a lot smaller when I first joined, I think the challenges were people thought that the video was really low quality. It's just people filming stuff in their house. Why would you want to watch that?
32:56
And that was part of the magic is that people did want to watch other people like them and that not everything had to be produced in a studio. So a lot of traditional media people miss that because they'd spent so much time on perfecting what you see on TV that then suddenly when you see someone filming something and they're in their bedroom and their room is a mess and the drawer is open and stuff is falling out of it in the beds on made they were like, why would you want to watch that but people do
33:22
as it turned out the missions of YouTube and Google Now,
33:26
Naturally aligned because both were about increasing access to the world's information searchable video was a huge component of
33:34
that we'd always use the example of how to tie a tie that's always going to be much better on video then in a text document.
33:42
So take your tie and with the seam side down place it around your neck flat against your body again with the seam side down the how to category of YouTube has grown so big it's still catches Susan
33:56
Guard always surprised
33:58
how much video we have no matter what I want to fix there's a video for it.
34:04
I just wanted to learn how to install the ice maker in my refrigerator. There's a video for that. So just the depth and the long tail of videos is pretty amazing to me. But also the fact that there's a lot of genres that we didn't think would happen. There's a video of it TV never had gaming how to build a gaming PC gaming. So huge area for us on YouTube.
34:34
Maths videos how to solve the probability one channel 3 blue one brown has almost 3 million subscribers
34:43
biomathematics with a distinct
34:45
visual perspective. There's a video for that and their goal is to make hard Concepts really interesting and entertaining like how do you explain neural networks in a really compelling Way Machine learning through analysis
35:04
Susan?
35:04
There's a video for everything we could ever want to learn how to do. It's true. For example
35:09
spearfishing for Becky
35:12
draw a cartoon dolphin like a winner to do seconds. Maybe find a way to slow down AJ for a way to stop your
35:26
rage a chocolate
35:29
how to fake being a composer.
35:35
how to
35:36
sew a hoodie for your cat there's a video for
35:39
that
35:43
The multi farias multi-faceted content on YouTube might be hard to keep track of accept that there's single guiding principle is right in the name. You have the potential to be an expert. You have a platform to share that expertise for the
35:59
world you look at something like hair and makeup and you see people of all different backgrounds all different ethnicities all different ages talking about hair and beauty and that couldn't
36:13
Of happened on traditional TV but there's just a multitude of perspectives here that thanks to YouTube. You can explore regardless of what your background is.
36:22
This is a key point and Central to YouTube's True North not everyone is an expert but anyone can be and if your expertise is valued the public and your viewer count will let you know one way that YouTube put this in a practice was introducing Revenue sharing with its content creators or is YouTubers know it
36:43
ation, not every content creator on YouTube is monetized, of course, but the quest to become so is what has driven the frenzy for traffic among YouTubers and it only functions because of an innovation Susan our team took to video ads
36:58
we knew had to be different because we didn't want to just take text ads we wanted to have video ads and have the video ads be relevant and that at the time seemed really unique and the idea that you only pay if somebody actually watches
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Those ads how do we optimize between revenue and our users and how do we measure quality if it says free iPod and there's no free iPod at the end that would not be a good experience
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just as they did with AdWords the YouTube Team measured quality by relevance one too many free iPod ads your click rate plummets, and then your audience and then your brand Partners. They needed to innovate a video ad that wouldn't pull a viewer off course.
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We have a six second ad and at first people always said, how could you build a six second ad TV has always had 15 second ads or 30 second ads. What can you do in six seconds? It was pretty impressive just to see that you really can't tell a brand story in six seconds.
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Just like with Google getting ads right gave you to the runway to
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grow. I would like high-growth environments then many ways. It was like going back in time. I already know how you scale a company and how you grow it. I saw that.
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With Google Now I can do it here with YouTube and we can Implement all the good things that I learned and skip the bad
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parts implementing the good things. We've learned and skipping the bad parts. That's the dream and it would be so tempting to leave the story here, but I'm sure you know, that's not where the story ends. There's a reason I want to talk to Susan of all people about how to keep True North as your company scales because few platforms have had such a public struggle with this exact topic.
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Epic you're alluding to some of the challenges around content moderation and what we've termed as responsibility and that work there. I'll say when I accepted the job. I didn't even think about that at all because YouTube was really much more of an entertainment platform. It was very focused on music and gaming there weren't seen to have a lot of responsibility issues. They did have the innocence of Muslim.
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We're not going to play that clip. The innocence of Muslims was a baldly anti-islamic short film with and
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Muslim dialogue that have been dubbed over the actors lines without their knowledge. It was posted to YouTube in 2012 in the midst of the Arab Spring Susan wasn't yet Co but it left an
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impact. I remember sort of asking like wow, like wait who makes all those decisions when I first joined and realizing. Wow, this could get really tough.
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The job is only gotten tougher now that the co-chair is hers. Our politics have only grown
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More polarized and disinformation more virulent. Meanwhile YouTube has only gotten bigger and harder to Wrangle right now. YouTube sees two billion active users per month that represents about a third of users across the entire internet over 50 million of those users are contributors to the platform not all of them with intentions as innocent as showing how to tie a tie.
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These are incredibly hard issues and they're
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Just technical issues. It's a new era of how our platforms going to be managed to both be responsible. But enable Free Speech. It's been trying to strike a balance of making sure that whenever we take a step and responsibilities that it's really well-thought-out that we have spoken with the experts because you can always have these unintended consequences of removing content that you didn't mean to so having a very cleanly defined so that thousands of people around the world who are reviewers can all make the same decisions.
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Consistently and that users and our uploaders have an understanding of what those policies are realizing that some people will say you didn't go far enough and others will say you went too far. So it is a very tough job in the sense that no one is ever happy about it. But you do your best to do what you think is the right long-term benefit for your community
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what is best for the community a little while ago. I had shishir Malhotra on the show and we touched on this in his six years at YouTube.
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She was responsible for much of their scaling success. He also led the team that shifted YouTube's metrics Focus from number of videos. Click two hours of YouTube watched so I set this goal. We're going to get to a billion hours a day and had this very big positive rallying factor and everybody feels like that's a big goal. And if you ask anybody at Google in that period and said, hey, what are you two guys working on they probably say, oh they're working on this crazy billion our thing and it was good. It was well branded. It was understandable. It was specific you can make decisions based on it.
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It and so on but I had an obvious flaw is it actually a good thing for people who watch a billion hours a day of YouTube notice that the North Star guiding shishir and his team hadn't changed. They were fulfilling Google and YouTube's constant promise of quality search results focusing on hours watch instead of videos clicked meant devaluing clickbait in favor of videos that match the viewers interests the more hours of your watches. The better YouTube is
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Had its number one job make video search better. Right? Well YouTube hit their billion our goal. But this led to the mother of all unintended consequences a rise in hate speech conspiracy theories and violence YouTube's recommendation algorithm even came under Fire in Congress for sending viewers down rabbit holes of more and more Fringe voices. So did that mean YouTube lost their way?
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Or did their own guiding principles need to change I asked Susan about it. What were some of the things you had? Okay, here is some of the early lessons about how to maintain a True North within the melee of a lot of different people with a lot of different
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opinions. I'd say on True North certainly one of them has just been about trying to unwind a hand enable freedom of speech and as many voices as possible.
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Ball whether we agree with them or not, but really having the boundary be around human rights. So if you have different cultures who may have different perspectives on gender sexual orientation, we want to make sure that no one is discriminated against so regardless of what the culture is that we're not doing anything that would in the end lead
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to harm pursuing this goal meant a programmatic shift in how YouTube defines quality.
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Lee quality meant search results and recommendations that were the most accurate to search queries now YouTube was shifting toward a new definition away from Pure accuracy and toward responsibility. They address this change in their Community standards as well in December of last year YouTube rolled out an updated terms of service that caused a stir in the YouTuber Community. It's stated in no uncertain terms that YouTube is under
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Obligation to host or serve content. This change was made to expand YouTube's ability to take down offencive or abusive
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videos. We have had to make a number of changes in terms of how we handle monetization because Brands required it brand said, we don't want to be on content that has profanity or violence or certain types of topics. Right and I can assure you that pretty much like every kid in the world knows about D monetization and the policies because all creators talk about
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it.
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That doesn't mean that the changes have solved
44:45
everything what we struggle probably the most with is content. That would say is really borderline to our policies but is not necessarily violative and that might be content like aliens landed in my backyard and they told me something about covid so that is not necessarily a violation for policy, but it's not necessarily the content that is useful for our users.
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It's a massive undertaking to support endless user-created content.
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10 in a way that stays diverse while filtering out violent extremist conspiracy theorists are those who think covid came from Aliens or 5G but navigating through this process has allowed Susan to reckon with a trade-offs and challenges and navigating YouTube's True North
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our goal is to be the best home for creators. And so we want to build the best services and make sure that they can achieve their goals of both Revenue as well as traffic. But at the same time no
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know that they're watching you carefully because every single thing you do have some kind of impact for them and they're going to let you know. I really quickly if you made a
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mistake keeping True North isn't one single decision one set of navigations. It's many many micro decisions along the way the direction may be clear, but you'll still need to course-correct often, especially when you make a wrong turn and to be clear YouTube hasn't figured it all out.
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At growing a great open place for creators that also keeps corrosive content at Bay will remain a constant Challenge and it may actually get more complex as time goes on but here's the secret. It's not supposed to be easy. What separates a true north from just the direction you happen to be going is this will you follow it? Even if it hurts, even if it means you fail if you'd rather go
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her then violate your first principles, you know, they're guiding you true. I'm Reid Hoffman. Thanks for listening.
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And now a final word from our sponsor HubSpot.
47:08
What does a happy successful customer look like if we could do nothing, but look at the numbers how would we be able to tell a delighted customer versus a non delayed customer? We're back one more time with Dharma Shah of HubSpot CRM platform for scaling companies. Dermis has been telling us about the value of delighted customers. But how can you spot a non delighted customer?
47:30
Sometimes you can just do a survey and ask them but the other thing you can look at us, you know, what if they bought the product and they logged in the following week and then we didn't see them again for six seven weeks chances are they're not a delighted customer something broke along the way when it comes to predicting customer satisfaction data speaks louder than words. Just make sure that you're listening for the right things.
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In the early days you throw all the possible data you have at it. But in most organizations, you will find that only a handful of the factors actually impact customer retention rates. So if the trick is making sure you that you're actually measuring the things that the models are sensitive to and then you will find the things that actually tend to be the most predictive.
48:13
Once you found what's most productive you can get proactive if you knew which customers are unhappy you would say Hey, you know Miss Smith, you don't know this but you're unhappy with HubSpot and we think you might be unhappy because you got stuck at this particular point the process and we have an expert here that will help you get over that. What can we do to kind of get you over that hump?
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Ready to proactively serve your customers HubSpot CRM platform Alliance Marketing sales and service teams to Delight your customers. Learn more at HubSpot.com masters of scale is a wait what original the show is recorded remotely with sanitized audio gear. Our executive producers are June Cohen and daren't riff are supervising producer is Jay Punjabi. Our producers are Chris MacLeod Adam skews Jenna Cataldo, Jordan MacLeod
49:06
Catherine Clark gray Holly Bondi Christina Gonzalez and been Manila our editor large is Bob saffy original music and sound design by Ryan holiday and Daniel nissenbaum audio editing by Keith Jay Nelson mixing and mastering by Brian Pew special. Thanks to Chris Shea Eliza Schreiber David Sanford Syeda. Sepia Eva Adam. Heiner Emily McManus Kelsey Capitano, Tim Cronin, Sarah Sandman Charlie.
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Vanessa's and Colin Howarth visit Master scale.com to find a transcript for this episode and be sure to subscribe to our email newsletter.
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