20VC Yahoo CEO Jim Lanzone on The Yahoo Turnaround Plan; What Needs To Happen Leadership 101 The 4 Things To Look For When Hiring Surviving a Crash; Biggest Advice on Cuts, Layoffs, Investor Communications

In this episode of 20VC, host Harry Stebbings interviews Jim Lanzone, CEO at Yahoo, discussing his extensive career in consumer internet, including his roles as CEO of Tinder and CBS Interactive. They delve into Jim's approach to leadership, prioritization, and maintaining product velocity in large organizations. Jim shares his hiring philosophy, focusing on domain expertise, high EQ, ambition, and passion for the industry. They also touch on strategies for navigating economic downturns, with Jim emphasizing the importance of protecting the balance sheet, seizing opportunities for growth, and maintaining optimism. The conversation covers the importance of effective board communication and the challenges of driving cultural change within established companies. Jim reflects on his personal and professional growth over the years, highlighting key lessons learned from past experiences and his vision for Yahoo's future.

• Jim Lanzone is the CEO of Yahoo, a company that reaches over 900 million people and is the third largest property on the Internet.
• Prior to Yahoo, Lanzone was the CEO of Tinder, downloaded more than 400 million times.
• Before his tenure at Tinder, he spent a decade as president and CEO of CBS Interactive, which is a top ten global Internet property.
• Lanzone joined CBS Interactive following the purchase of Clicker Media, where he was the founder and CEO.
• He also served as CEO of Ask.com (formerly known as Ask Jeeves).
• The episode was put together with the help of Rita de Apollo, Renate at Tinder, and Fuad El Nagar.

"Our guest is an og of the world of consumer Internet. He's been at the forefront of some of the largest consumer Internet properties for over 25 years."

This quote introduces Jim Lanzone as a significant figure in the consumer Internet space with a long history of leadership in influential companies.

• Jim Lanzone initially went to law school but switched to business school mid-way.
• The start of his tech career coincided with the beginning of the Internet industry.
• He co-founded a company during business school, which quickly gained funding and millions of users.
• Following the dot-com crash, Lanzone's company was sold to Ask Jeeves, where he became head of product and later CEO.
• Lanzone's work at Ask Jeeves was characterized by a significant turnaround, making it a leading innovator.

"I wound up as a product manager as a summer job, got really cocky with a couple of classmates, started a company out of school."

The quote explains how Lanzone started his first company right out of business school, which quickly found success before the dot-com crash.

• Jim Lanzone believes high performance starts with assembling a high-performing team.
• He prioritizes hiring domain experts with high emotional intelligence (EQ).
• Lanzone values ambition and a passion for the company's focus.
• He attributes part of his drive to the challenging experiences of his first startup's failure and the subsequent successes.
• Lanzone enjoys building teams that create innovative products and services, turning around companies from difficult positions.

"High performance is understanding what achievement means. What are you really trying to do and really putting things in place to go make that happen."

This quote defines high performance as the ability to understand and achieve goals effectively, emphasizing the importance of clear objectives and actions.

• Lanzone prefers to get to know candidates through conversation rather than standard interview questions.
• He often meets with candidates multiple times and involves his core team in the interview process to assess cultural fit.
• Lanzone leverages his extensive network to gather insights into candidates' reputations and past performance.
• He believes that understanding who candidates truly are is crucial to making the right hiring decisions.

"I always think about the reputations of some of the trillion dollar Internet companies and the tricky questions that they're asking people."

This quote criticizes the reliance on standard or tricky interview questions, suggesting that they can miss important aspects of a candidate's potential and fit for a role.## Learning from Mistakes

• Experience is a key teacher, especially when it comes to recognizing and learning from past mistakes.
• In the 90s, there was a common belief that young tech founders needed to hire seasoned professionals to lead their companies.
• These seasoned professionals often came from consulting or traditional corporate backgrounds like Procter & Gamble (P&G).
• However, these professionals sometimes lacked emotional intelligence (EQ) and the ability to collaborate effectively in product development.

"But in the 90s, we were all told, you can't do it, you better hire some grown ups. And they usually came from consulting or PNG, and I fell into that trap."

This quote illustrates the historical trend where young tech entrepreneurs were encouraged to hire experienced executives from traditional industries, which sometimes led to a lack of emotional intelligence and collaborative spirit within tech companies.

• Intuition can be a guiding force in business decisions, but it should not be the sole determinant.
• A mentor's advice on doubt indicates that if there is any doubt, the decision should not be pursued.
• However, doubt can be a useful tool in informing risk and should not be dismissed outright.
• Life is not always black and white, and concrete rules may not always apply.

"When there's doubt, there's no doubt."

This quote suggests that the presence of doubt should be a clear indicator to avoid a certain path. However, the context indicates that doubt can also be a valuable part of the decision-making process, especially when it comes to taking informed risks.

• Product velocity and execution speed are not necessarily hindered by the size of a company.
• The key to maintaining speed in large companies like Tinder or Yahoo is to unblock projects that have been stagnant.
• Great product development often involves recognizing and supporting good ideas from the team.
• Demonstrating compelling visions for the future can help unblock and accelerate company progress.

"I don't believe they have to be slower in a big company."

This quote challenges the common perception that larger companies are slower to develop and execute new products. The speaker's experience indicates that with the right approach, large companies can maintain or even increase product development speed.

• Blockages in companies often stem from individuals in positions of power who lack the ability to collaborate and build consensus.
• Effective leaders ensure that everyone feels involved in the decision-making process, even if their specific ideas aren't adopted.
• The CEO's understanding of the company and its products is crucial in making swift and informed decisions.

"Oftentimes there are people in positions of product power, product roadmap power, who either are not great at being the hub or the quarterback for the groups around them, so you're not able to get buy in and give all the groups due process."

This quote highlights that blockages often occur when key individuals lack the skills to effectively manage and integrate different groups within a company, leading to a lack of buy-in and stalled projects.

• Prioritization in product development is fundamentally about return on investment (ROI).
• Understanding user experience, user journey, and monetization points is critical to effective prioritization.
• Teams should balance short, medium, and long-term goals to ensure growth and innovation.
• Prioritization should be a "balanced breakfast" of projects that together aim for growth.

"I don't want to be too simplistic about it, but it really does come down to ROI."

This quote simplifies the prioritization process to its essence: the return on investment. It emphasizes that understanding the various facets of the business and user experience is key to determining where to focus efforts.

• Growth in consumer internet companies involves increasing user base, retention, and monetization.
• A balance between user experience and revenue optimization is essential.
• Short, medium, and long-term planning should all contribute to overall growth.
• Annual planning processes should align with the goal of achieving a return on investment for the product roadmap.

"You can't have one without the other. They all have to come along in a search engine."

This quote emphasizes that in a consumer internet company, various aspects of growth are interconnected and must be advanced together to achieve overall success.

• The balance between short-term and long-term goals varies with each company and situation.
• Short-term goals may focus on immediate growth metrics while long-term goals involve strategic expansion and investment.
• Successful leaders adapt their strategies to the unique circumstances of their companies.
• The "fun of the job" comes from navigating these different time horizons to steer the company towards success.

"Every company is going to be different in how you think about it, but that's the fun of the job."

This quote reflects the speaker's view that the challenge of balancing short-term and long-term objectives is a dynamic and enjoyable aspect of leadership.

• CEOs are fundamentally resource allocators, but they must avoid being dictatorial.
• Effective CEOs act as ringleaders, guiding their teams and making decisions collaboratively.
• Being a CEO requires breaking ties and being decisive, but always within a team context.

"Yeah, it's a fundamental, but it is a huge misnomer to say that anybody can be a great CEO by being a dictator."

This quote dispels the myth that CEOs can lead effectively through autocracy, emphasizing the importance of teamwork and collaboration in leadership.

• Painful experiences can shape leaders and provide valuable lessons.
• Surviving tough times, such as market crashes or company downturns, builds confidence and validation.
• Leaders must be sources of optimism and trust, especially during challenging periods.

"So to have come through the other side, that was just such a validating experience that gives you confidence."

This quote conveys the speaker's belief that overcoming difficult situations is a powerful source of confidence and validation for leaders.

• Protecting the company's balance sheet is crucial during a market crash.
• Crashes present opportunities for growth and competitive advantage.
• Leaders should maintain optimism and trust with their teams to navigate through crises.
• Authenticity and trust built before a crisis can help lead a team through to the other side.

"The first one is knowing that I've been counseled on this, even for the situation now. But the first is to protect your balance sheet."

This quote underscores the importance of financial stability during a market downturn, as it allows a company to survive and potentially seize opportunities that arise from the crisis.## Decision-Making in Crisis

• There is no universal rule of thumb for how much a company should cut during a crisis.
• Trust and credibility with one's team are crucial for making informed decisions.
• Underestimating the duration and severity of a downturn can be dangerous.
• Brian Chesky's experience at Airbnb during the initial Covid crash is an example of successful crisis management and the benefits of a lean operation.

"You have to make the best decision you can at that time."

This quote emphasizes the importance of making informed decisions based on the current information available, rather than following a set rule.

"It only took three people to walk the sandbag down to the river. It didn't take ten."

Jim Lanzone uses this metaphor to illustrate how a leaner team can often operate more efficiently.

• Blind optimism can lead to loss of trust among team members.
• Being honest, unscripted, and direct with one's team can help maintain trust.
• Adjustments to business models and valuation expectations are necessary during tough times.

"You can't be an ideologue. You have to fight the battle that exists on the ground."

Jim Lanzone advises against rigid thinking and stresses the importance of adapting to the current situation.

"The optimism will hit. Well, be fair."

This quote suggests that optimism should be balanced with realism to maintain credibility and trust.

• Selecting the right investors and board members is critical for effective communication.
• Great board communication involves being on the same page about the company's situation and strategy.
• Having experienced and empathetic board members can aid in navigating difficult discussions.

"Really make sure you're getting it right."

Jim Lanzone underscores the importance of choosing board members who are supportive and understanding.

• Successful turnarounds often start with companies that have "good bones."
• Key factors include existing traffic, a recognizable brand, and sticky but underdeveloped products.
• Reorganizing and optimizing the organization is part of the turnaround process.

"If I have traffic and I have a brand that's known and I have products that people are loyal to, even if they've been a while since they've been optimized properly, then I can do the rest."

Jim Lanzone identifies the foundational elements required for a successful business turnaround.

• Brand awareness is important, but attractiveness can also play a significant role.
• Yahoo's brand, despite its challenges, still has a strong user base and preference.
• Fixing the product and leveraging the brand's strengths are key steps.

"There's something about it that people do love, and as you know, there's not always something about the big trillion dollar companies right now that everybody loves."

Jim Lanzone discusses the enduring appeal of the Yahoo brand among its users.

• A diversified approach, taking multiple "shots on goal," can lead to growth.
• Investing in existing assets and exploring acquisitions are part of the strategy.
• Clear organizational structure with dedicated general managers for each vertical is essential.

"We're already in a spot where we can focus on the upside and in a good way. We're greedy for that upside."

Jim Lanzone expresses confidence in the growth potential and investment strategy for Yahoo under his leadership.

• The ideal number of direct reports for a CEO is between ten to twelve.
• Organizational structure may include "Super GMs" who oversee multiple general managers.
• This federal and state model allows for decentralized operational control within a larger conglomerate.

"And they're going to drive innovation in each of those categories."

Jim Lanzone explains the role of general managers in driving innovation within their respective business verticals.## Leadership and Management Philosophy

• Jim Lanzone discusses his role in hiring, firing, and managing teams, emphasizing the importance of allowing businesses to operate with autonomy while providing central support.
• The approach to performance issues varies with the seniority of the role; more senior positions are given more time and due process.
• Jim reflects on his own leadership weaknesses, particularly his non-technical background and reliance on strong CFO partners.

"And my job is to hire and fire and manage them and work with them on their plans. And then at central or federal, our job is to provide leverage as cheaply as possible back into those businesses and let them run."

This quote highlights Jim Lanzone's leadership strategy of empowering his teams to operate independently while providing necessary support from the central or federal level.

"The more senior the role is... you're probably giving them much more of a chance."

Jim Lanzone explains that senior roles are given more time to prove themselves due to the investment and reasoning that went into their hiring.

"I'm also, by the way, not a CFO... I need that person to be a really strong partner to me."

Jim acknowledges his limitations, particularly in the financial domain, and the importance of having a competent CFO to complement his leadership.

• Over time, hiring becomes easier with improved success rates and confidence in organizational structure and decision-making processes.
• Gaining confidence to take risks is an aspect that improves with experience.
• Challenges include maintaining independence while being accountable to various stakeholders and the inherent difficulty of achieving success in business.

"So easier hiring, for sure. You get better at it as you go along."

Jim Lanzone notes that with experience comes improved skill and confidence in the hiring process.

"I think it's natural the more you go along to want more and more independence."

This quote reflects on the desire for autonomy in leadership roles, despite the inevitable accountability to boards, shareholders, and employees.

• Jim's favorite management book is "Team of Rivals" by Doris Kearns Goodwin, which he believes offers profound insights into leadership and team dynamics.
• The most challenging aspect of his role at Yahoo is changing the mindset of people, which requires patience and faith in the process.
• If given the chance, he would have liked to be the CEO of Twitter, which he sees as a missed opportunity.
• Jim values a sense of humor, hunger for experiences, and joyfulness as traits for his children.

"My favorite management book is Team of Rivals by Doris Kearns Goodwin."

Jim Lanzone recommends "Team of Rivals" as an exemplary guide on leadership, emphasizing the importance of teamwork and selflessness.

"Just changing the mindset of people takes a lot of time."

He acknowledges the difficulty in altering corporate culture and the need for patience in leading a new team.

• Jim advises his younger self to have started in the internet business immediately after college, emphasizing a natural aptitude for the industry.
• He considers the foundation of a successful marriage to be friendship, humor, and mutual motivation.
• Jim aspires for Yahoo to become a public company again, focusing on long-term growth rather than short-term financial pressures.

"I would have just said, just go get a job at an Internet company, and just that you're going to be good at it."

Jim reflects on his career path and suggests he would have benefited from entering the internet business earlier.

"We're best friends who crack each other up and are never bored together."

Jim Lanzone shares his belief that a successful marriage is built on friendship, humor, and keeping each other engaged.

• The goal for Yahoo is to re-emerge as a public company with a focus on sustainable, long-term strategies.
• Jim emphasizes the importance of thinking quarter by quarter in the current market environment.

"I think the ideal is that we're public company again... make the changes we need to make... and come out the other side of that as a company that really can think long term."

Jim Lanzone outlines his vision for Yahoo's future, aiming for a return to the public market with a strong, long-term oriented business.

• Harry Stebings endorses Notion for project management and organization, highlighting its ability to replace multiple tools.
• Angellist is praised for simplifying fund management and its new product Angelist Stack, which aids founders in starting their businesses.
• Squarespace is recommended for its website building capabilities, user-friendly email campaigns, and SEO tools.

"Notion... providing one tool to do it all with everything from seamless project management to easily organizing 20 vcs company information."

Harry Stebings shares his experience with Notion, a tool that consolidates various aspects of project and information management.

"With Angelist Stack, you can create a fundraising ready startup in just a few clicks."

Harry speaks about Angelist Stack, a service that streamlines the process of starting and funding a company.

"Squarespace is the all in one platform to build a beautiful online presence and run your business."

Harry advocates for Squarespace as a comprehensive solution for creating and managing an online business presence.