התמלול המלא של Breaking the 9-to-5: Gary Swart on the Future of Work, Freelance Nation, and Betting on Founders

Leah: Right, right ... Gary Swart: yeah. Quite a journey. Leah: That... It's an amazing story, and like you said, there are so many forks in the road. Do you think most [00:05:30] people stay in comfort too long because they confuse stability with alignment? Leah: Or how do you think about when you look back at those forks, at [00:05:40] those moments, like what you were optimizing for? Gary Swart: I was optimizing for different things. You know, three kids, um, you know, a, a really [00:05:50] nice salary and sticking around money. Rational like incenting me to stay for two years, you know, with stock and cash. Gary Swart: And, you know, it was like meaningful for a guy [00:06:00] who was, you know- Absolutely ... a sales guy at Pure HR, you know, running a, a sales team there, and a much bigger job. And so it was upward mobility. And at the time, I was optimizing for different things. [00:06:10] But now I have criteria. And so when I speak to young people today, I say, "Listen, I wish I had this criteria [00:06:20] today, uh, at those points, 'cause I would've made a different decision." Gary Swart: And so my criteria quickly are impact. I wanna go somewhere where I can make a difference. Personal and professional growth and [00:06:30] development. I wanna learn. I want a steep learning curve, and this is one of the reasons I left IBM. I want, um, well, I wanna work with great people, regardless of, of where I [00:06:40] am. I wanna do something I, I love, right, or I can get excited about. Gary Swart: The Sunday night test. How do you feel Sunday night about going to work on Monday? Um, and then [00:06:50] financial reward and, uh, balance. Leah: Mm-hmm. Mm-hmm. Mm-hmm. Gary Swart: So people, the passion, impact, growth and development, financial reward, and [00:07:00] balance. Now, those have to be defined by the individual and prioritized by the individual, but at least I have criteria now, which is why- Yeah Gary Swart: I'm in venture now, [00:07:10] not- ... running another company. I Leah: love your frameworks. We're gonna get into more Gary Swart: frameworks. Leah: Good. So you started manufacturing on the East Coast before jumping into [00:07:20] tech. What did younger Gary think success looked like back then? Gary Swart: Well, I, I, again, I had it all wrong, right? So I [00:07:30] was, I was optimizing for... Gary Swart: Well, first of all, I learned how to work. Like, that was an early foundation was, uh, you know, my grandfather [00:07:40] used to say, "If you don't have it in your head, you have to have it in your feet." And what he meant was one part of that was, you know, measure once, cut twice. Like, think about it before you [00:07:50] do it. But also, like, if you're not that smart, you're gonna have to run a little bit harder. Gary Swart: And so I learned to run hard as a kid. I was cutting lawns, doing all the, [00:08:00] you know, selling candy in junior high school, all the stuff that an entrepreneur does. And so, um, when I got out of college, I was looking at, you know, like, Allstate [00:08:10] Insurance, marketing at Toys"R"Us, like, just not exciting. I was doing all the interviewing like I should've been doing, but nothing really jumped out. Gary Swart: And so I [00:08:20] went into business for myself in manufacturing. I had some connections. I got introduced to people that needed parts made. I knew people that could make [00:08:30] parts, and so I was what was known as a middle man. I would connect manufacturers with parts and keep a, a vig in the middle for myself. Which kinda became [00:08:40] foundational later for a marketplace business, right? Leah: Absolutely. Gary Swart: So- Leah: Absolutely, yes ... Gary Swart: that's how I ended up in m- manufacturing. And I thought, you know, I was making [00:08:50] money. Like, I controlled my own destiny. The... It was all about inputs and outputs. Like, work harder, make more. More contracts, more jobs, more [00:09:00] parts, more quantity, more dollars. So you know, I, like, I bought a red BMW. Gary Swart: I bought a house. Like, I was making cash [00:09:10] early out of college. Most of my friends weren't, so I thought that's what success looked like. Leah: Yeah. At what point did you realize, hmm, maybe I'm on the [00:09:20] wrong train, and this tech thing sounds kind of interesting? Where did that turn happen? Gary Swart: There were two, um, two conversion points for me. Gary Swart: One was [00:09:30] every weekend I would go to the beach in New Jersey where I lived. I would go to Long Beach Island, New Jersey, and we would play volleyball on the beach. And total, like, jungle hack. We were not, like, you know, [00:09:40] Olympic quality or anything, but it was so much fun. I loved it. And everybody that I played with, there was a lawyer, there was a insurance [00:09:50] guy who owned his own insurance business. Gary Swart: There was some Wall Street guys. And then I started looking around saying, "What am I building?" Like, it came to the point where I was like, there's no [00:10:00] leverage here. Y- you know what I mean? It was like the only way you were gonna grow is more inputs. At the same time, manufacturing was going [00:10:10] like this, and I was talking to a guy who was in tech, and he was just, like, fired up. Gary Swart: Like, oh my gosh, so excited. The Sunday night test, [00:10:20] I'm like, "Ugh, I gotta go back and go to work," and he's like, "I can't wait to go back to New York. I'm leaving early." And so that was one thing, and the second [00:10:30] was my wife. So I met my wife, and she moved from San Francisco to New York to New Jersey and started [00:10:40] commuting into Manhattan. Gary Swart: And after about a week, she was like, "This is for the birds. Like, who wants to spend their life commuting into New York every day? Like, we should go west. There's this [00:10:50] whole thing happening out there." Leah: And she had grown up on the West Coast, so she had

already seen it? Gary Swart: She grew up in New York but was living in San Francisco- Okay, okay Gary Swart: when we met. Yeah. I convinced her to move back [00:11:00] east. Okay. And then she convinced me. And so I launched a... We both launched job searches, you know- Awesome ... maybe about six months later. It wasn't immediate. Yeah, yeah. But, um, we both [00:11:10] launched job searches, and that led us out to, uh, to the Bay Area. About a year later, we moved. Leah: Amazing. You said that growth happens when [00:11:20] you're uncomfortable. Where do you think that instinct came from? Gary Swart: Um, it comes from, you know, I was thrown into this environment at [00:11:30] Pure Software. So maybe just a little bit about how I got the job. I-- my friend Kevin from college, University of Maryland, married Linda, um, who was an [00:11:40] early employee at Oracle, and Linda was gonna hire me at Oracle, then she left and went to a startup. Gary Swart: She was gonna hire me at that startup. [00:11:50] That startup sold really fast. She ended up at Pure Software. That's how I got the job. It was through a connection. So here I show up at... I, I [00:12:00] didn't even get the job. She said, "Hey, come out. We're running a sales training. We have an extra spot. Like, there's 10 spots. We only have nine people. Gary Swart: You can be the 10th, and it'll [00:12:10] be like a audition. It'll be a tryout." Leah: So I- I can imagine you just going in there like, "I'm gonna crush this." Yeah, Gary Swart: but I didn't know how to work a mouse. [00:12:20] Like, I showed up- And this is like, you know, you're a software engineer. You know, like- Yeah. Yeah, yeah, yeah ... runtime error and memory leak detection and- Right Gary Swart: object code insertion and, like, uh- I... And [00:12:30] there was no reading up. There was no, like, web, uh, you Leah: know, Gary Swart: like- No ... how can I learn? I couldn't, like, check out a book from the library. Like, I had to get on a plane, fly out, [00:12:40] and I show up in this room and essentially, like, auditioned for the job. And by the end of the weekend, she said, "Listen..." Gary Swart: Or it wasn't a weekend, but by the end of the day, she said, [00:12:50] "You know, we're gonna give you a shot. Don't let me down." Like, you know? Leah: Yeah. And- Gary Swart: Don't embarrass me. Don't embarrass me. Leah: Like- Yeah ... Gary Swart: and so when I showed up, I showed up with, like, a [00:13:00] good attitude, and don't have it in your head, have it in your feet. Gary Swart: So I showed up, like, ready to hustle, ready to run, and it was at that point that I [00:13:10] realized, "Hey, I'm a little bit competitive," you know? Like, I, I didn't wanna fail. I didn't wanna let her down. And then the other thing was I was kind of a late bloomer, you know, [00:13:20] because I was... Manufacturing world is not sexy. Gary Swart: It's not deep. Uh, you know, software's unlimited, [00:13:30] right? And so,

and we happened to have a puppy dog of a product, meaning put it in somebody's hands, they don't wanna give it back. And so it was just a really [00:13:40] great environment to, like, work, and the more I worked, the more I got tapped on the shoulder to take jobs I wasn't ready for.[00:13:50] Gary Swart: Like, I remember Reed saying, "Okay, we want you to manage," and I was like, "Manage? Why would you want me to manage? I'm the top sales guy." And he's like, "Well, we want you to teach people to do what, what you can do." [00:14:00] And so it was that ne- always that next job. I g- I, I mean, maybe 10 jobs I remember saying to my boss, "I'm not ready for that. Gary Swart: Like, what are you ta- you want me to do?" [00:14:10] So it was a little bit of the being the battlefield promotion. Get the, do the job before you get the job. Like, just, just [00:14:20] get rewarded, you know? Leah: And I think that's, uh, that's such a culture here in Silicon Valley, right? Especially when you're, you know, a smaller team and you're scrappy and you have a product that's [00:14:30] taking off. Leah: It's a rocket ship. It's, like, all hands on deck, and it's like, "That guy's smart. Let's, let's see what they can do over here," you know? And it's a great opportunity to learn. Gary Swart: [00:14:40] Which is why I tell people today, just get in the river and do great work, you know? And if you, if you have to pick a company, you might as well pick one that's growing fast. Gary Swart: Because if it's [00:14:50] growing fast, there's likely to be more problems to solve, which means there's gonna be more battlefield promotions, right? So get yourself into a good environment and do good work [00:15:00] Okay, we're done. Are we done? Leah: Okay, I wanna go back to your amazing framework around the impact, the growth, the financial reward, the balance, [00:15:10] your four decision filters. Leah: So you talked about having that framework now and being able to apply it as you look back, but along the way, I mean, did [00:15:20] you, did you start to build pieces of that as you made mistakes or had learnings, or did it kind of hit you all at once at some point? Like, this ... Uh, because I'm [00:15:30] interested. Like, you are so good at frameworks. Leah: Um, and, and, like, how does that happen? Do you come up with the whole thing at once or does it happen in, in little pieces? Gary Swart: It [00:15:40] happened in pieces. Leah: Okay. Gary Swart: Right? And so right now the, the benefit I have is I just have more time to look back. Why? 'Cause I'm old. Yeah. You know? And so- So [00:15:50] I've had more Leah: experience. Leah: You've Gary Swart: had lots of experiences. Yes. I have more experiences. Yeah, yeah. And, and you know, your life is nothing more than a collection of experiences, right? And so [00:16:00] I've got a lot of experiences. And my good friend Jerry Rudeson said it best. He said, and I'm sure somebody said it before him, but he's the one

I attribute it to, "Experience is what you get when you don't get [00:16:10] all the other things you want." Leah: Mm-hmm. Mm-hmm. Gary Swart: And so I learned- Yeah ... lessons along the way. So, um, with regards to the people, for example, [00:16:20] I made a decision to leave IBM, um, one, because I wanted to get back to the jungle. I wanted to get back to- You did ... the startup. Leah: Yeah. Gary Swart: Yeah. Leah: Yeah. [00:16:30] Gary Swart: And IBM w- I thought it was fantastic. It was just- Mm-hmm ... too big for me, you know? Leah: It was- Yeah, agree. Agree ... and- It was a great experience, but yeah, it's huge. Gary Swart: It was, it was big. [00:16:40] And but it was a great experience, and, you know, going back to Armonk and going into the l- leadership development and all of the great frameworks I learned there, I use this stuff [00:16:50] every day, right? Not to mention integrating Rational 1,800 employees into 130,000 employees, and I was the [00:17:00] integration executive. Gary Swart: I was responsible for that integration. I learned a ton in that process. So I left and I went to a startup. So the first thing [00:17:10] I realized was I was running- From something, not to something. Leah: Mm. Gary Swart: You know? I didn't do- Mm-hmm ... enough diligence on the new thing. And the mistake- Mm-hmm ... I made was on [00:17:20] the people. Leah: Okay. Gary Swart: So it was a great product. There were some good people, but there were some not so good people. And at one point, I was in front of a [00:17:30] client with our CEO, and the client looked me in the eye and he said, "Are you gonna be around in two years? If I make a decision to go with this solution, are you gonna be around in two years?" Gary Swart: We were [00:17:40] almost out of cash. And now I'm in a position where I would have to lie, stretch the truth, and I didn't. I couldn't do that. I couldn't [00:17:50] look the customer in the eye and do that. And, and my boss at the time got really mad at me, like, "How could you do that? You're tanking the company." And I'm like, "I'm not gonna put [00:18:00] my personal characteristics on the line. Gary Swart: Let's figure out another way around this. Let's go to him with the truth, right? And win the deal [00:18:10] legitimately." And so at that point, I realized that people-- Like, I should've realized it sooner. Now, how I-- Had I realized that sooner, [00:18:20] I may have gone to Netflix. Why? My criteria now is find the smartest people you know and go work with them, regardless of the job. Gary Swart: Like, I would take a [00:18:30] demotion to work with some people, right? That would've been a different decision. Reid and Mark were two of the smartest guys I knew, right? And they still are. [00:18:40] Like Reid, he was on the board of Facebook, he was on the board of Microsoft. He's on the board of Anthropic now. It's like, like that, you can't fake that, right? Gary Swart: And so [00:18:50] I, um, that was

just one example of a lesson I had to learn along the way. Leah: Yeah. And tuck that away and add it to the framework. When you think about the [00:19:00] framework and you think about patterns with ambitious people, which one of those decision filters do you think people often lie to themselves about? Leah: Is [00:19:10] it the people or is it something else? Gary Swart: It could be the people. It could also be the balance. And so, like, you see examples of this today where kids come out of college so they say, "I'm going to Goldman Sachs." Well, [00:19:20] why? "Well, Goldman Sachs looks great on a resume." Do you work hard? "Yeah, you work really hard. Gary Swart: 80 hours a week, 100 hours a week. There's no-- There is no balance. [00:19:30] But that's okay." Why? Because you're gonna go get this phenomenal experience. You're willing to trade balance for growth. Do you have a massive [00:19:40] impact at Goldman Sachs? No. But you're not going for the impact, you're going for the MBA, you know, with the manage by doing, right? Gary Swart: And, [00:19:50] um, so I think people, um, sacrifice... And by the way, young people probably should, because they're in a position to sacrifice balance and [00:20:00] even financial reward for personal professional growth and development. I think only later does impact matter. And Leigh, I think it's import- important to [00:20:10] note, I never really thought about impact. Gary Swart: I always was in a position where I could make an impact. Like, I wanted to be in a role where I could make a significant difference, and [00:20:20] that happens when you're getting tapped on the shoulder. But What became more important, and I realized this at oDesk, it was what [00:20:30] is the impact that this company has on the world? Gary Swart: And that, and you know that about TaskRabbit. Like, I, I'm [00:20:40] sure, I should just ask you, but what's your proudest legacy about TaskRabbit? Leah: I mean, I, I mean, I tell the story about two moms connecting across the [00:20:50] country, right? And the impact that it had, 'cause one of their children was going through chemotherapy treatment at, you know... Leah: And so you're right. It, that is the [00:21:00] story when I'm asked, you know, what, when did I know TaskRabbit was gonna be successful? It was that moment. Gary Swart: Yeah. Leah: That was the impact. Gary Swart: You're... I, I, like, I'm welling up here. Like, just hearing these [00:21:10] stories. I know. It became m- Yeah ... more important later. Leah: Yes. Gary Swart: Right? Yes. In my career. Gary Swart: So- Leah: But you had that same, you had that same experience. So walk us [00:21:20] through how you came to oDesk, which completely broke precedent on the future of work and where people could work, [00:21:30] and work, you know, needing to happen in an office versus other places. So walk us through how you ended up at oDesk. Gary Swart: Oh my gosh. Gary Swart: I don't know. How do I [00:21:40]

make this pithy? 'Cause we could spend a whole, we need a whole nother episode on this. I gotta keep it short. Okay. So I left IBM to go to a company called Intellibank, and Intellibank [00:21:50] was, um, Dropbox done wrong. So we were Dropbox long before Dropbox, long before Box, and as a result, we were [00:22:00] competing with Microsoft SharePoint Now, that's a bad place for a startup to be, 'cause everybody cares about provisioning and security to the object [00:22:10] level, and check-in and check-out, and etc., Gary Swart: etc. So we end up building all this functionality. We had 50 clients of 60 different flavors. Like, every client was different. [00:22:20] You know what that looks like, right? It's not scalable. Uh, we were running out of money, and I decided I had to leave because of the pe- num- [00:22:30] number one, 'cause of the people, and number two, I mean, I could just read the writing on the wall. Gary Swart: We were trying to raise money, and in the process of trying to raise money, I had pitched Sigma [00:22:40] Partners at the time three times. I pitched them in Telebank, and there was a guy there by the name of Greg Gretch who invited me for breakfast the third meeting, and I said, "Are you gonna invest [00:22:50] in Telebank?" Gary Swart: He said, "No, we're gonna invest in you." He said, "We want you. We don't, we don't want the company, but we want you to come work at one of our companies." And he introduced me to three companies, [00:23:00] and one was Case. Rob Meinhardt was running a company called Case that was, uh, that ultimately sold to Dell. Second was a company called Fortify. Gary Swart: It was security [00:23:10] software. Some of my former, um, teammates were there. They suggested me to run sales. And the third was oDesk. [00:23:20] And Greg was investing in oDesk, and they wanted somebody to come in, um, with the money, so sort of like keep an eye on things. And there [00:23:30] actually was a CEO running oDesk when I came in. Gary Swart: I came in as COO, and within three or four weeks I got a battlefield promotion to CEO. Leah: Yeah, I was like, I [00:23:40] don't even remember you being COO ever. Okay. Yes. So it happened pretty quickly. Gary Swart: Happened Leah: quickly. So you join oDesk. You start talking about remote [00:23:50] work. Pe- did people think you were insane at the time? Leah: I mean, this is so early on in remote work. This is long before Zoom and, you know, all these things. Like, what was [00:24:00] the sentiment in the market for a company like oDesk? Gary Swart: Yeah, it was, it was early days, so it was, you know, early adopters or [00:24:10] innovators. It was... We weren't even at the knee of the curb. And when I joined, for the first decision we had to make was what kind of business are we? Gary Swart: Like, the CEO before [00:24:20] me was a staffing guy, and so the company was torn between are we a staffing firm- Or are we a marketplace? [00:24:30] And the first is... And

by the way, we had some staffing people and some marketplace people, and the reason I got the job is 'cause the company was pulling in two directions. And as you well know, two directions [00:24:40] is no direction. Gary Swart: And so the first thing we had to do was declare a major. Then we had to get everybody aligned as to where we were going. We are a marketplace. And then we had to figure out a c- [00:24:50] What gave Leah: you, what gave you the confidence around going with the marketplace? 'Cause I saw the same thing at TaskRabbit. People were like, "Oh, you could sell to a staffing agency. Leah: You could," you know. But I [00:25:00] was like, "No. Marketplace, marketplace." What gave you that confidence? Gary Swart: Yeah. Uh, uh, well, you're generous by saying confidence. You know? It wasn't- Yeah. Well, Leah: yeah ... Gary Swart: it wasn't even [00:25:10] confidence. Yeah. It was like we just had to pick. Leah: Yeah. Gary Swart: And this is, like, a, a really valuable lesson that I learned And part of this came [00:25:20] from Reed and Patty and Mark and all the Netflix people who were formerly at Pure Software. Gary Swart: It's like you just gotta try [00:25:30] stuff. So the first framework for this, is it reversible or irreversible? Well, it was reversible. We could say marketplace, and we could change our mind, [00:25:40] right? And then the second thing is, you know, if you think about a two by two, like do nothing, do something on the Y-axis, and then [00:25:50] suc- fail or to succeed on the X-axis. Gary Swart: Um, do nothing and succeed, congratulations, you got lucky. [00:26:00] Do something and fail, well, what do you get? Well, you get experience, and then you can figure out, what do we learn from it? And so I was always in an [00:26:10] environment where you were rewarded for just making decisions. Nobody knows the answer. Who knows if it's gonna work? Gary Swart: I don't know if marketplace is gonna work. I did not have [00:26:20] confidence. I had slightly more than m- than staffing firm. But what I did have was, like, if you just looked at facts, like, okay, [00:26:30] um, what were multiples on marketplace at the time? There weren't a ton, but, like, eBay and the, uh... It was, like, 10X. Leah: Right. Gary Swart: Right? What are the multiples on staffing firms? [00:26:40] Leah: Yeah. Gary Swart: One X at best. Leah: Yeah. Gary Swart: So that was like- At best, yeah ... a, "Well, why don't we give this marketplace thing a shot," you know, and we can, Leah: we can try. That's how I felt, too. I felt like the staffing firms [00:26:50] was this dinosaur dying industry, and I was like, "We gotta innovate. Leah: We gotta do something different. Like, we gotta break through." Gary Swart: Yes. Leah: As- and as you did, I mean, what do you think [00:27:00] people fundamentally misunderstood about the future that you were seeing, that you saw? Gary Swart: Well, again, generous 'cause in those [00:27:10] early days,

it's not like it- I wasn't looking out five steps, you know? I was looking out, like, maybe one and a half steps.[00:27:20] Gary Swart: What we knew is that we had this software you, where you could monitor and pay a remote worker. So you could manage a worker by walking around, [00:27:30] even if they were thousands of miles away. So it was the best thing to replicate online working, offline working online, okay? So we [00:27:40] had this piece of software, and then every time we wanted to sell that software, people would say, "Well, this is great. Gary Swart: Do you also have the workers?" So we knew there was demand for [00:27:50] workers, and we knew that people liked using this method of sort of tracking the work, guaranteeing that an hour [00:28:00] billed was actually an hour worked. And the worker liked this guarantee that an hour worked would be an hour paid. So we stepped in the middle and said, "Well, we can solve it," right? Gary Swart: We [00:28:10] can help you find a match with the right worker, manage as, as if they're in the same office, and then pay them globally regardless where they are in the world. And so that was the [00:28:20] first step. Like, let's just do that, and then we'll figure out how big the market is And in the early days, another thing that was fundamental was the market [00:28:30] didn't have to be, we didn't have to, like eBay, like we could build a big business just on books. Gary Swart: Or, I'm sorry, Amazon just on books, or eBay just collectibles. [00:28:40] Like the market, if we just went small businesses, technical talent, offshore, that was a big enough business. But once we locked that in and started [00:28:50] getting traction there, we started getting pulled into more categories of work, bigger businesses, and more global, that's when we said, "Okay, this, [00:29:00] this is working. Gary Swart: This is a big business. Now we have conviction around it. We could be in the middle of all work. We could be like Amazon or eBay, but for work," right? Leah: Yeah. [00:29:10] Well, what I think is pretty amazing too about what you built at oDesk is around unlocking and dismantling geography as [00:29:20] people's destiny. Like all of a sudden with oDesk, you could have remote workers anywhere that were highly talented, that now you were giving access to [00:29:30] high-quality projects, high-quality jobs. Leah: Was there, was there a personal belief or was there a background that you came from that made you feel like, [00:29:40] "This, this is a huge unlock, and this is really important, and this is world-changing"? Gary Swart: You know, when I went to oDesk, I remember I was talking to a friend and he [00:29:50] said to me, "What? You're doing what? Gary Swart: Like you wanna be the best in the world at staffing? Like can you get excited about this?" And I remember I went home after that saying, "Huh, I don't know [00:30:00] if I can get excited about staffing, but I'm going anyway," you know? And so it

was an unlock, and the unlock happened after we started [00:30:10] getting this traction, and it was in the net promoter score comments. Gary Swart: It was workers coming back and saying, "Thank you. Because of you, I could buy [00:30:20] my mom a wheelchair." Or, you know, like comments from, I mean, hundreds a week I was getting, unsolicited. And then from clients, [00:30:30] like, "This is the best thing ever. This is my secret weapon." And like we would ask people, you know, "Net promoter score, how likely are you to refer?" Gary Swart: And I would get zeros, and then there would be comments. And [00:30:40] I, I, I looked at the zeros more than the tens, 'cause I wanted to know what do we, what can we fix. And ha- not half, but a large percentage of the zeros were, [00:30:50] "I'm not likely to tell anybody because I don't want them to know my secret weapon." Leah: Oh my gosh. Leah: That's Gary Swart: hilarious. That was the unlock. That was the unlock. Leah: Right. Like, Gary Swart: [00:31:00] wait, we're onto something. We just have- Yeah ... to get it to be a little bit more viral. Like we f- like- Yeah ... if you're not gonna tell a friend, well, that stinks, you know? Leah: Like- Yeah, right. Do you [00:31:10] think that remote work was always inevitable and you just got there early? Leah: Or like- Do you think it would've happened anyway without oDesk? Gary Swart: Um, I think [00:31:20] it would've happened anyway because of a pandemic. But no- Yeah, right ... uh, that's not a, that's not a joke. It was a long time afterwards. But that made everybody- Yeah ... realize that this is a thing. That's true. But prior to that, there were a lotta [00:31:30] tailwinds. Gary Swart: There were more tailwinds than headwinds. Let's look at some of them. So tailwinds. Um, the economy, so companies having to do more with less. [00:31:40] Uh, the environment, like people not wanting to have as big of a footprint. Technology, like as you said earlier on, there was [00:31:50] no Zoom. Well, guess what? There's Zoom today. Gary Swart: Like the tools, the technology, the environment, society, like workers who only grew up online, and then [00:32:00] not to mention things like talent wars. Like you were in the Valley when it was impossible for TaskRabbit to hire an engineer. Why? 'Cause they were going to Facebook, [00:32:10] Amazon, Microsoft, Uber. Like, people could out Gary Swart: You would find somebody who loved TaskRabbit, and they would say, "Sorry, Leigh. I'm going down the road." Why? 'Cause Uber's gonna pay me 300 [00:32:20] grand, which you couldn't afford, right? Leah: Right. I remember actually one vivid moment with an employee where they re- they were resigning, and it was an engineer. [00:32:30] And he said, "I just want my parents to know, like know about the company I'm working for. Leah: I want my parents to see the company, like in the press." And [00:32:40] this was like so early on with TaskRabbit. So he left, and he went to, you know, Facebook. And then years later, I was like, "But we did okay." Gary Swart: Yeah, Leah: we were in the press. "People know us. Like, you could've [00:32:50] stayed, you know?" But I get you. You're right. It was a very tumultuous time for talent, yes. Gary Swart: And not to mention like the, the cost [00:33:00] of permanent hires, you know, like 90 days on average to hire in the Valley. Why? 'Cause you have to find them. You have to interview them. Then you go- you gotta woo [00:33:10] them and take them to a Warriors game and whatever. And then you've gotta negotiate and pay, where it's like average time to hire on oDesk was like two days.[00:33:20] Gary Swart: And back to the you could try somebody for a week, and if you didn't like them, you could go get another one, like that, you know? And so it was these [00:33:30] tailwinds. And by the way, I wasn't selling to everybody. In the early days, we were selling to the extra small businesses. These were clients who [00:33:40] said, "If I didn't have five on oDesk, I wouldn't have 10 in Silicon Valley." Gary Swart: So these were ands, not ors. It's not like I was gonna hire a local engineer. It was like I [00:33:50] couldn't afford to hire a local engineer until I got a beta product out there and a couple of users, and now I can, right? So it was ... When we [00:34:00] asked our clients, "How would you have done this work if you didn't hire oDesk?" Gary Swart: Most of them said that we wouldn't have done the work. And I think that's similar with, like, Uber [00:34:10] and Airbnb. It's like Airbnb created a world where people could actually g- go to New York. Prior to New Y- or prior to that, I couldn't afford to stay in a hotel, but now [00:34:20] I can go and stay in an Airbnb. So it opened up a, it, it was accretive, right? Leah: Yeah. Absolutely. And I mean, I think that goes back to the geography point as well, and I [00:34:30] just wonder, do you think that geography is still this hidden gatekeeper in capitalism? Gary Swart: I do. And this is one of the [00:34:40] impact things. Like, a couple things that I'm proud of, um, from my days, the nine and a half, almost 10 years running oDesk was, number one, the legacy, the [00:34:50] people, people I hired who went on to great things, like Hayden, who runs the place, and, you know, Jillee, who went to- Who's amazing Gary Swart: start her own company. She's amazing. Like, I [00:35:00] hired her. I was lucky enough to, like, hire her, you know, out of Microsoft. Um, so number one is the people legacy. Number two was [00:35:10] the impact we made on a, on a global basis. Like, you know, Bangladesh went from zero to, like, the number three worked country on our platform [00:35:20] within three years. Gary Swart: You know, like, the number of jobs and amount of dollars we sent to Bangladesh, uh, really proud of that. So it's this, you know, the [00:35:30] internet are the roads into these geographies. You know, you don't need a physical

road or a, or infrastructure or buildings in Bangladesh. You just [00:35:40] need an internet connection and talented people on the other end. Gary Swart: And I heard a statistic recently from Upwork, which oDesk and Elance merged, became Upwork, [00:35:50] um, that more than 50% of the jobs originate outside of the US More than half the jobs. So these are [00:36:00] jobs that are Leah: Yeah. Gary Swart: Yeah. Leah: That's, I mean, that's a surprising statistic. Gary Swart: Yes. Leah: So you're really changing opportunity around the [00:36:10] world for everyone, not just the workers, but the clients as well, and getting access, right? Gary Swart: Exactly. Yeah. Leah: Yeah. Yeah. That's amazing. So you mentioned the [00:36:20] pandemic. Do you think that COVID validated the thesis as we went through it, or did it distort it in some way, too? Gary Swart: Well, it validated it, right? [00:36:30] Because prior to, you know, we're saying, "Hey, work is not a place. You should be able to hire people. Gary Swart: They should be able to work from wherever they are in the world." Like, you know, connecting talent and [00:36:40] opportunity. Like, why not? And I remember saying to clients in the early days, like Amazon, when we were getting started, Amazon was like 6 or 7% of [00:36:50] goods were bought online versus on-site. And so I would say to a client, "Is it reasonable to believe that more goods will be bought [00:37:00] online in the future?" Gary Swart: And everybody would nod and say, "Oh yeah, of course." Right? Like, in the early days, I remember buying a TV, the last TV I bought on premise- [00:37:10] Right ... was thousands of dollars. It required- Yeah ... two people to carry it home. Like- Right ... you could buy a TV on Amazon, it could be here this afternoon for 300 bucks. Gary Swart: Right. Like- And Leah: you [00:37:20] could get a TaskRabbit to mount it on your wall. Gary Swart: Exactly. Right? And you should get a TaskRabbit. Yeah. Don't do it yourself. Leah: Yeah. Gary Swart: But I, [00:37:30] um, but in the early days, people, you had to get them to envision it. So I would start with e-commerce, and then I would say, "Is it conceivable that two out of 100 [00:37:40] people could come to work via the web versus your office?" Gary Swart: And there wasn't a CEO or a person, an investor, a analyst, [00:37:50] anybody that wouldn't say, "Well yeah, that makes sense." And it wouldn't even have to be two people. It could be two full-time equivalents. Like, you could have a part-time PR person, a [00:38:00] part-time accountant, a part-time code base expert, whatever it was. Gary Swart: Like, just 2% of work online, and all [00:38:10] heads would go like this. That was 2%. What percentage was it in COVID? It was 100%, 90%, you know, like whatever. [00:38:20] Now, has it snapped back? It's absolutely snapped back, but it hasn't gone all the way back to two. Leah: No, it hasn't. Do you think, what do you think [00:38:30] people are missing now that we've come out of COVID? Leah: It's, you know, five, six years later. Um, do you think we're, we are losing some of the [00:38:40] learnings from the pandemic and from remote work? Gary Swart: We might be. I don't think it's a full shift to, um, to, uh, you [00:38:50] know, contract workers. You, you know what I mean? It's like, uh, some people just wanna be part of a company, they wanna be part of a culture, they wanna go in every day, and they don't [00:39:00] understand that you can still have remote people that are part of that. Gary Swart: You know, like remote being around the world. So I do think that the pandemic [00:39:10] opened eyes. I do think companies are much more receptive to it. But it, the world, like, okay, let's talk about the future of work from [00:39:20] here. Like, where's it going? Well, guess what? The jobs are moving to AI now. Um, and so I do think that we will see [00:39:30] a continued shift in the future of work, one that becomes more, um- W- what I would say is breaking it down into smaller [00:39:40] chunks, work is becoming atomized. Gary Swart: So where somebody used to do a whole job, now you could get somebody to just do a piece of that. Well, [00:39:50] that's really set up well for on-demand online workers, right? The second is work becoming, um, augmented with [00:40:00] AI, like our jobs, you know, like I know you're using AI for a lot of your, your work, right? A Leah: lot. Leah: Everything, yes. Gary Swart: And more every day. [00:40:10] Yeah. And by the way, I sat down yesterday and said, I- my son's a software engineer, and I said, "Hey, could you help me build this app? I have this idea for an app." And he said, "No, I'm not gonna help you." He's like, "You can build it yourself, [00:40:20] and you should learn how to do it." Gary Swart: So I started- Brutal- ... yesterday afternoon ... but true. Yeah. It's true. Brutal but true. Yeah. I started yesterday afternoon. Yeah. I called [00:40:30] him at 5:00. I started at, like, 3:45. Oh my God. At 5:00, I Zoomed, I started a Zoom session with him to show him my app working. Leah: Yeah. Right. Gary Swart: [00:40:40] So, like- Leah: Amazing. It's amazing ... Gary Swart: ridiculous, yeah. Leah: Yeah. Yeah. It's absolutely incredible. I mean, so, uh, if we jump back a little bit to kinda those early days [00:40:50] at oDesk, you've said before that it kinda started as this hamster where ... I felt like this too at TaskRabbit, where, you know, you actually, instead of using AI and [00:41:00] agents, right, you actually have humans doing everything, and it's totally unscalable. Leah: And, you know, now you're an investor at Polaris. You meet with a lot of startups. How much of [00:41:10] entrepreneurship is basically controlled illusion in the beginning to figure out what to scale and as you scale? Gary Swart: Yeah, I think it's a, [00:41:20] uh, a really good question. I, what the interesting thing is I think it's easier now to

build a working prototype or [00:41:30] have m- m- Mm-hmm Gary Swart: you know, like you can spin something up- Yeah, so fast ... because of technology. So fast. Yeah. Like, I learned this yesterday with Claude. Yeah. They're like, okay. Yeah, it's amazing. Start with this [00:41:40] database. It's free. Yeah. And then start with this for hosting. It's free. And then start with this. And, like, I'm downloading. Gary Swart: I'm, my email's going in, and then I've got to install something. So, like, the [00:41:50] ability to, like, just Start it, right? But you still need the human in the loop to make a judgment or to do anything. Um, [00:42:00] and, you know, there's gonna be certain things like that, like even, uh, you know, work becoming fully autonomous. Gary Swart: Well, guess what? Cars had to have a, a... Waymo had a guy [00:42:10] behind the wheel for a long time before they shifted to... Yeah. So, um, how much of it is illusion? All right, framework. Um, there's people, there's [00:42:20] PowerPoint, and there's Excel, right? So investors make decisions on all three. Now, I don't think they're equal. Gary Swart: People are probably a bigger part of the equation for [00:42:30] me, right? Um, I don't know if you know Jason Naziri. Do you know Jason? He sold his first comp- Oh, yeah. Yeah, he's such- Oh, yeah ... a good guy. Leah: He's amazing, yeah. Gary Swart: Amazing. So he sold his first [00:42:40] company to Intuit. He came to me. We got to be friends when he was running that company. Gary Swart: Um, he called me. He said, "I'm doing my next company." I said, "Tell me about it." He said, "It's Glassdoor [00:42:50] 2.0." And I said, "Do you have a deck?" He says, "I have no deck. Uh, but what I do have is five term sheets. Are you in or out?" I passed. That was a [00:43:00] mistake. Should've invested, Leah: like- Because it was Jason, right? Because Gary Swart: it was Jason. Gary Swart: Because he was a- Yeah ... accomplished entrepreneur. He's gonna outhustle everybody. He's g- good. Uh, he said, "It's [00:43:10] me and the CTO from the first company, and that's what you got, and I have no deck, and I'm not gonna do a deck. I don't need to do a deck. I've got five term sheets." The second piece is PowerPoint. Gary Swart: That's the deck. [00:43:20] That's the story arc. What story are they telling? Is it compelling? Is it... How did they craft it? I know you have, like, an aesthetic. You know what good looks like. The [00:43:30] UI is important to you. Similar to me, I wanna see a deck that makes sense. I wanna see a good story arc because it's not only you telling me what you're working on, it's [00:43:40] you telling me you can tell a story. Gary Swart: You can prioritize what goes in, what doesn't go in. You can market. You can sell. The story [00:43:50] tells me a lot of those pieces. And then there's the Excel, and this is where I get to your answer of the hamster wheel. I wanna see some evidence that this is working [00:44:00]

Some proof point. Doesn't have to be dollars. Gary Swart: Why? Because it's a seed stage deal. But show me that you went out and did a market test. Quick story on that. We looked at a [00:44:10] company, very accomplished entrepreneur. Um, i- one of his companies, little healthcare services thing. It's called Hims and Hers. [00:44:20] They do, like, online pharmacy for- Oh, Leah: yeah. It's- Gary Swart: Yeah, Leah: of course, Gary Swart: right Leah: yeah, amazing Gary Swart: company. Yeah Leah: $10 billion company. Gary Swart: Yeah, yeah. He, um- Just a little company ... w- we've done a couple companies with him. I [00:44:30] did not do Hims and Hers. See- Okay ... one of two. Made, made another mistake. Uh- Yeah ... but I did get some experience. Um, we- Leah: Yes, yes ... Gary Swart: the Excel portion, he said, [00:44:40] "We haven't even built this thing yet, but we did go out to the market. Gary Swart: We ran 30 grand in free Google ads. Cost us nothing. Google gave it to us. Google will do [00:44:50] that." And he said, "We got a 7% click-through rate, and of the 7% that clicked through, 80% of them gave us their phone number and email." Leah: Oh, [00:45:00] wow. Gary Swart: What do I love about that? He did the job before he got the job. He proved that there's a market for this thing before they even built it.[00:45:10] Gary Swart: So that hamster where that's a little bit of running to keep the lights on in plain sight. They told us, "We [00:45:20] are running on a wheel." And so I love Scrappy. I love people that are just, like, said, "Hey, yeah, we have humans behind the scenes right [00:45:30] now, but let me tell you what we're doing. We're working really hard to augment them with AI to make them more efficient, and by the end of next year, we won't need the driver behind the wheel."[00:45:40] Gary Swart: Right? We're gonna go fully automated. So I am okay with 100% human to augment to automate. Leah: Yep, yep, [00:45:50] me too. Absolutely. I, I, l- I like, I like to see when someone can ... Like, a founder can come in and do every single job in the [00:46:00] company. Like, I was the first TaskRabbit, right? It was like, "Okay, I didn't, I didn't have a full marketplace of people in Boston, but I'll run around on my scooter." Leah: But then it helps you [00:46:10] understand what to build, right? And what to automate and what to scale. So important. Gary Swart: Yeah. I'll tell you what, I, I ... We invested in the company really early on, and, um, they, [00:46:20] they were selling a little bit, i- into, um, into, like, mid-market pharma, and they had a person who was really good at selling to mid-market pharma, not to big pharma. Gary Swart: [00:46:30] Um, and she wanted to hire more salespeople, and I'm a board member and I'm like, "No." Like, you ... Number one, you don't need to increase your burn. Number two, you haven't really nailed [00:46:40] the repeatable use case yet And ultimately she left, one, because, you know, like I think the company moved behind her skillset. Gary Swart: She was [00:46:50] great in the jungle, machete in each hand, but we didn't, we weren't ready. It wasn't like a repeatable use case. Like, and so I see companies make a huge [00:47:00] mistake when they scale too quickly, and if the CEO can't sell it, nobody can. Even if the CEO isn't a salesperson, the value of you on the [00:47:10] scooter is looking the customer in the eye and saying like, "Hey, why are you using it, and why, how did you pick us over something else? Gary Swart: And let me look around and see what [00:47:20] else you could be doing." Like, it, it's, it's just a different mentality, um, learning how to do it before you codify it. [00:47:30] The other thing is you know where all the bones are buried. When you do hire- Leah: That's true, too. Yeah ... Gary Swart: rabbits, you know what's doable. Yeah. Like, I could get f- from this part of Boston to that part of Boston on my [00:47:40] scooter. Gary Swart: What are you talking about you can't do that? Right. Like, of course you can. I did it. Leah: Right. Yeah. Right. No, you're absolutely right. Gary Swart: You were Boston, right? Leah: Let's talk- Gary Swart: Isn't that where you started? Leah: I was in Boston, yeah. Yeah. Had my little scooter, [00:47:50] running around Boston. It was, it was awesome. It was a fun time. Leah: It was a fun time. Um, let's talk about, uh, short-term pain versus long-term [00:48:00] scale because I know that when you're building a company, I certainly experienced this as well, you have to make decisions and choices along the way. Sometimes they're painful in the moment, but they're [00:48:10] gonna produce scale. I think one of those moments from oDesk was when you made the changes to take rate. Leah: Can you talk a little bit about just the, that philosophy [00:48:20] overall, and if, you know, that's a good example or if there's another one, um, that, that taught you how to scale and really focus on that [00:48:30] long-term moment? Gary Swart: There are so many of these, Leah. Yeah. I'd like- I know ... I think take rate's a good one. The other one would be, um, would be price guarantee. Gary Swart: But why [00:48:40] don't we start with take rate, and if you want more, I have a second. But so take rate. So we were charging, in the early days, we switched to marketplace, but we were still char- charging staffing [00:48:50] fees, 30%. Now, our clients didn't care. Why didn't they care? Well, because, you know, the average wage was, like, [00:49:00] $18, $15, whatever it was, plus 30%, it's still under 20 bucks, where the local wage was 120 bucks. Gary Swart: So the arbitrage was so [00:49:10] great that people didn't really care that we were 30%. They didn't know. We didn't tell them we're 30%, but they didn't really know. Where they, when they [00:49:20] finally cared, the only reason they cared was when they asked the worker how much w- they were making And then

they were like, "I feel like you're taking too [00:49:30] much." Gary Swart: Actually, no. Yeah, yeah. First we were $6 an hour flat fee. Leah: Oh, wow. Gary Swart: That was our first- Leah: That seems Gary Swart: reasonable. That was our first rake. Then we [00:49:40] switched to 30%. Yeah. Yeah. Um, because we, we felt like we were penalizing, uh, lower cost workers. And so, um, so going from [00:49:50] 30%, we were trying to decide should we go to 10%? Gary Swart: So let's say we were a couple million dollars in revenue, that means our revenue overnight was gonna get slashed by 67%. [00:50:00] You know what I mean? Like, we were gonna cut our revenue down overnight, and how long is it gonna take us to get back to that couple million in revenue? And oh my gosh, [00:50:10] like is this the right deci- Like, what are we doing? Gary Swart: Like, and not ... People w- some people were complaining, but not everybody was complaining. And [00:50:20] then we were like, "Well, how low should we lower it? Why not go to 20? Why not go to 15? Why not," you know. And so it was ... So we ultimately decided reversible or [00:50:30] irreversible? Well, it's actually reversible. Wouldn't be so easy, but you could grandfather in old cons, raise it to, for new. Gary Swart: Um, [00:50:40] so we made the decision to go to 10%, one, because we wanted to make it low enough that nobody could undercut us. Like, it'd be really hard for a new business to start and say, [00:50:50] you know, "We're six-minute apps," you know? Or like, you know, "We're five-minute apps," or like, you know. So, uh, low enough that people couldn't undercut us, low enough that people would say, "Ah, it's only 10%, I'm not gonna [00:51:00] disintermediate and just take it out of the equation." Gary Swart: And we did it, and I think we were back at our revenue run rate [00:51:10] within, I don't know, like six months. So- Leah: Wow. Gary Swart: Yeah. Leah: So six months, though. Was that, was that a harrowing time? Was that stressful? No. You believed- No ... [00:51:20] you saw. You were like, "We just gotta push through." Gary Swart: It was just burn at that point. Like, we had cash. Gary Swart: Yeah, yeah. I was always a- Yeah ... really frugal CEO. I never got- Yeah ... close to running out of money. [00:51:30] Because I got really close as the COO at IntelliBank, I said, "I'm never gonna do that again." And I viewed my number one job as don't run out of money. Grow this thing and don't run out of money. [00:51:40] Um, the next decision, tactical decision point for, though, for us, though, was quality. Gary Swart: We ran into a big quality problem, very similar to eBay. [00:51:50] Like, people on eBay, there was this trust factor. Like, how Much more did you trust Amazon over [00:52:00] eBay. And so you would use eBay for, like, a low-cost item. You'd be like, "Ah, if I get ripped off, who cares? It's low cost." But you wouldn't trust it for a high cost. Gary Swart: Like, you wouldn't

buy a Rolex in the [00:52:10] early days 'cause it was likely fake, right? And so we ran into the same problem. Couldn't, people couldn't trust us on quality. They didn't [00:52:20] believe the quality of our engineers. So we were doing everything we could do to fix quality. And I reached out to eBay people, and there's a woman there by the name of Linda Talgo.[00:52:30] Gary Swart: And Linda was the one that said, "eBay doesn't need a dispute resolution process. We need a guarantee. We need to take the risk off the [00:52:40] table." Leah: I see. Yeah. Gary Swart: We need to say, "Guaranteed money back if you didn't get what you expected to get," and then we'll go after the fraudster or the scammer- [00:52:50] Right ... the seller. Leah: It's on us. Yeah. Gary Swart: But we have to guarantee for the buyer. Okay. And we did the same thing. We said we have to- How Leah: did that go? Gary Swart: Well, it was scarier than [00:53:00] pricing because- Yeah ... we now had to guarantee the work. Yeah. And we could keep people out of the front. Like, if you think about us as a, we were a club, and everybody wants to get [00:53:10] in the club. Gary Swart: And at the front door, we could check IDs and only let people in that had IDs. And then we could kick them out if they, if it was a fake ID. Or if they [00:53:20] came in the club and had bad behavior, we could kick them out. But guess what? We had no back door. We had no bars on the windows. We had no people could climb up from the [00:53:30] roof. Gary Swart: People could get back in. So we had to, like... And as soon as you're guaranteeing money... And let [00:53:40] me compound this problem for you. It's a $1,000 job. We're getting 100 bucks. We're getting 10% of it. The $1,000 was a [00:53:50] fraudster. We only got 100. I've agreed to pay back the 1,000. That's scary. So what are you gonna do? Gary Swart: [00:54:00] You're gonna plug your back door, your windows, your roof. You're gonna solidify things pretty quickly. Leah: Right. Right. Well, [00:54:10] your hiring framework, I think, is the best I've heard. I remember sitting with you when I was hiring and scaling TaskRabbit, and we were talking through candidates, and you told me [00:54:20] personal characteristics first, motivation second, skills third. Leah: And I'm curious, d- is that still true, and why do [00:54:30] you think most companies still hire backwards? Gary Swart: Um, and fourth is knowledge or domain expertise. Like, in the early days, we made a lot of mistakes. We would [00:54:40] say, "Oh, we're, we're a marketplace. Let's go hire from other marketplaces. We want people from eBay." Why? Gary Swart: Well, because they, they- Leah: Understand marketplaces ... [00:54:50] Gary Swart: they understand marketplaces. Yeah. The problem was, did they really understand marketplaces? The people who were there super early and were, like, really close to finger on the pulse, [00:55:00] maybe, but that was gone pretty quickly. They

grew so fast. The early people left, like... Gary Swart: And the early people had moved to positions where they weren't close to finger on [00:55:10] the pulse. They had four levels that worked for them, so the first thing they'd wanna do at our startup-y company was hire three people. You know, "I need a director. I can't do [00:55:20] anything without a director and a manager." So, um, my framework is still the same. Gary Swart: The, the personal characteristics cannot be changed. [00:55:30] Um, I think I wrote this in one of my blog posts. You can teach a chicken to climb a tree, but you're better off getting a squirrel in the first place. So, like, [00:55:40] look for a squirrel. Yeah. Like, don't try and- Yeah ... like... And that's the hardest thing to get right because most of the mistakes I've made in my career, both [00:55:50] hiring and being hired, have been on people, right? Gary Swart: When you have to terminate somebody, it's not working out. It's because they weren't smart enough, they weren't [00:56:00] hardworking enough, they weren't creative enough, they weren't coachable, and whatever it is, it's usually a personal characteristic. It's not because [00:56:10] You don't have the domain expertise, or maybe it is, but you weren't smart enough to get it, right? Gary Swart: Like, what did you know about a [00:56:20] TaskRabbit-like service before you started the business? Leah: Absolutely nothing. Gary Swart: You knew how to code, right? You knew- Leah: I did know how to code. I was a coder, yeah. Gary Swart: You were a coder. You knew [00:56:30] you had- Yeah ... a need, and there were customers out there that had a need, and there were- Leah: Yeah Gary Swart: people out there that could fulfill that need, and there was a, a hole in the market. But [00:56:40] you learned it, and what do you know about- Yeah ... marketplaces today? Well- Leah: Poof ... Gary Swart: you know a lot. Leah: Too much. Gary Swart: Right. Too much, which is dangerous. Leah: Too much. Which Gary Swart: is Leah: dangerous. Yeah, exactly. [00:56:50] Trying to get me to invest in a marketplace is really hard because I see all the bad things, all the things that could go wrong, all the things that you and I had to, had to overcome. Leah: When you [00:57:00] think about these personal characteristics, what do you think predicts greatness the most reliably? Gary Swart: Well, past performance, right? Like, what have you done [00:57:10] before? And so I'm a huge fan of the back channel reference, and I remember when I was hiring a part, product leader at oDesk, there were about 100 people on my list. Gary Swart: I [00:57:20] built a Google spreadsheet. There were 100 names on it. I hadn't spoken to anybody on that list. Maybe I'd spoken to two or three people on the list. Most of the people I had not, and I'd [00:57:30] back-channel referenced them before I spoke to them Why? Well, 'cause people are really good salespeople. I like everybody. Gary Swart:

I think I'll come, you know, I'll come away from a meeting and I'll say, "Well, [00:57:40] that guy was really good in this regard." You know? Like, "He'd be really good at this." And I back-channel reference before, and then I prioritize my list and went to the people who referenced the [00:57:50] highest. And you have to reference with A players, meaning you have to, you have to call somebody who knows what an A player looks like before you [00:58:00] can get a reference. Gary Swart: And I find you get a really honest reference on people when you haven't even spoken to the person yet, 'cause they don't even know [00:58:10] you're referencing them. They're like, "Who's this guy asking about me?" Like, nobody, nobody knows, right? It's not like I had an interview with you and now I'm gonna back-channel you, right?[00:58:20] Gary Swart: I have some people that really disagree with this concept. They're like, "That's privacy. What are you doing?" And I'm like, "I can ask [00:58:30] about somebody before I decide whether or not we wanna hire them." Like, it's just a smart thing to do. And in the process of me back-channeling a candidate that I [00:58:40] heard great things about, I was talking to somebody who knew what an A player was. Gary Swart: He was really senior at a company, and I said, "I'm talking to your former colleague, and this is the job, and this is [00:58:50] what I'm looking for." He goes, "Well, this guy would be really good, but you know who you should talk to? You should talk to this other guy." And that's how we hired Stephan Casriel. Wow. Leah: Wow. [00:59:00] Gary Swart: So I hired Stephan from a back-channel reference reference. Gary Swart: It's like- Leah: Oh my gosh. Gary Swart: That's- He's like, "If you want someone who's really good at the what, the why, and the how, [00:59:10] you should talk to Stephan." Yeah. Leah: Yeah, yeah. Yeah. Gary Swart: And, and then I added him to my list. I put him near the top, and we started dialogue with him. Leah: It's amazing. Well, today [00:59:20] you spend your time helping founders navigate hard decisions, investing in teams and companies, helping them scale. Leah: What mistake do you see ambitious [00:59:30] people repeat over and over again? Gary Swart: Um, there's a couple. You know, one is, um, thinking you have product market fit before you really do. Like that [00:59:40] it's repeatable, you know. That you've got... And I don't, I'm not saying it's gotta be fully codified, but you need some semblance of repeatability. Gary Swart: So I'll say this as a former [00:59:50] sales leader. The mistake I see is that, you know, you hire one juggler, and how many balls can somebody juggle before they start dropping them? Like three, four, [01:00:00] five, maybe? Five Leah: balls- I, when I go to the circus, I wanna see like 10 to 20 balls in the air. Gary Swart: In the air. Okay. But somebody's doing five and they start- Yeah Gary Swart: dropping them. Yeah. They're a [01:00:10] good juggler. So what you do is you hire a second juggler, and you give them one ball- Mm-hmm ... two balls to start. You took two from this person. And then over time, this person now gets up to eight, this person now can get to [01:00:20] six, and then you hire a third juggler. And I think this mistake companies make is they think they need a hire before they actually need it. Gary Swart: So they increase their burn [01:00:30] too much in, in advance. Um, and, uh, like great products, great momentum, great, you know, if you're growing like [01:00:40] crazy, well, have at it. Hire all the people you need. But some companies that haven't really hit that growth, and then what happens? They hit a little bit of a wall, their burn goes up. Gary Swart: Why? [01:00:50] 'Cause you, you close three customers right away, now you haven't closed one in six months. Leah: Right. Gary Swart: What happened? Leah: Now you're stuck with that burn. Gary Swart: Stuck with that burn. Yeah. And it's really- Yeah ... hard to, you know, [01:01:00] there's that chart where you go off a cliff. You know, you're burning like this off the cliff, as opposed to not building so much in the first place. Gary Swart: I think that's a mistake that, um, [01:01:10] founders make. The other is like the inability to, like, um, declare a major. And I suffered from this. [01:01:20] I always was like, "Hey, why don't we..." And, and I was so guilty of it. I'm like, "Okay, we're not really going in that direction, but we have a little [01:01:30] skunkworks pilot." Well, guess what? Gary Swart: Like you go- Leah: I know. Those are so fun, Gary Swart: though. They're so fun. And I like started- So Leah: fun. So distracting. Gary Swart: Exactly. Yeah, yeah. And I remember I went to [01:01:40] see Reed at one point, Hastings, and I was asking his advice on a problem, and he said, "Bring your notebook." 'Cause he's like, "I got three pages of notes for you." Gary Swart: And Reed had tried to use our [01:01:50] product and failed, and he's like, "I tried to use your product." He wanted to hire a Java engineer just to do some quick coding so he could prove to his engineers. Like, they were [01:02:00] really big on AB testing. Reed didn't have time to code it himself, so he's like, "I just want to hire somebody." Gary Swart: And he goes, "Two days later, I hadn't hired somebody." He's like, "You should have... Like, I just [01:02:10] wanted 70% quality done fast. You should've connected me with somebody who was online right now Like not make me go through the whole interview [01:02:20] process, and then I found a guy that I liked, but he couldn't do it for two weeks. Gary Swart: And then I got another guy I liked, but he was too busy and wasn't taking new jobs. Like, why are you showing him in search if he's too [01:02:30] busy to take new jobs? And like these were all the notes I was taking, and I was going to talk to him about how Google wanted to be a customer. They wanted

to help on- Oh my God Gary Swart: they, they wanted help Leah: [01:02:40] with- That sounds so stressful ... localization, Gary Swart: and he was like- Leah: Yeah ... Gary Swart: and he told me, he said, "90% of CEOs are under-focused and 10% are [01:02:50] over-focused, and neither is good. Which one are you?" Leah: Hmm. Yeah. Gary Swart: And like end of conversation. It was like I'm under-focused. So [01:03:00] to your question, what's the number one mistake? Gary Swart: 90% of CEOs are under-focused, and they-- You get happy ears. You're like, "We... Oh, [01:03:10] we can just do this," and your current market and problem are big enough. Leah: Absolutely. Yeah. Okay. [01:03:20] So a couple-- We'll go into a couple final questions here. When you think about the future of work, what precedent do you hope [01:03:30] disappears in the next 20 years about how we work? Gary Swart: Well, I don't know if I hope it disappears, but it's disappearing. You know what I mean? It's like [01:03:40] it-- But, but it's the whole on-demand thing, right? Like it'll be more, you know, I hope it's more transparent. I hope it's more, um, we talked about sort of [01:03:50] the, the three components, like it will be atomized and so, like, you know, your kids may have five jobs at once, right? Gary Swart: They-- it may be more flexible. They may be [01:04:00] really good at something and could do it for multiple clients. I think about the movie industry, right? A film comes together, you bring in the experts at each of the roles. A great [01:04:10] movie gets made, and guess what? Most of those people already have their next gig before this one is, is over. Gary Swart: You know, it's like there's plenty of work for [01:04:20] people who are great at their craft. And so I think work is gonna be more, um... I think it's gonna be more sort of on demand like that, like [01:04:30] come together and even within companies, right? Um, uh, it will become more specialized. People will become really good at a narrower set of things. Gary Swart: [01:04:40] And yeah, I'm sure you've seen this, like, you know, one of my companies said they need a new marketer, and I'm like, "Well, you really don't need a new marketer. You have a fantastic performance marketer who's [01:04:50] really good at like clicks and eyeballs, and you just need more branding, positioning, and messaging. Gary Swart: And so, like, maybe you should just [01:05:00] go get somebody for that as a agency or a consultant or intern, because if you get that, then you're gonna [01:05:10] need to fill this hole because unless you convince this person to stay." Like, so I think this, um, specialty, um, [01:05:20] and then it is gonna be more augmented, so I think people getting comfortable with leveraging technology to be more efficient, not afraid of it. Gary Swart: Um, I remember [01:05:30] the early days of this, like I-- when I was running a large sales team, I had a sales guy who was like, "How are you doing this?" He's like, "Oh, well, I wrote a Visual Basic script that would query the database and then mail [01:05:40] all of the customers that tried this pr-" And I'm like, "You what? How come everybody doesn't have this?" Gary Swart: And so, like, reward this behavior for [01:05:50] building functionality that, like... That guy turned out to be a phenomenal, like, sales guy and sales process guy, right? Because he was [01:06:00] constantly looking at how to make my job more efficient. So I think these are-- Like, he could have built a career just around that. He could have gone to sales companies helping them with [01:06:10] efficiency, you know? Gary Swart: So things like this. Leah: Is there anything wildly accepted today in modern work culture that you think future [01:06:20] generations will look back and say, "Wait, did people really live like that? Did we really work like that?" Gary Swart: Oh my gosh. I, you may have stumped me [01:06:30] on this one. I don't know. Like, I think the... Yeah, who knows? Gary Swart: In the office five days, the water cooler, the, you know, like, the, like, [01:06:40] when you say back on premise, like, I was at a, a dinner last night and somebody said, "Have you heard of this 669 or [01:06:50] something? It's six days a week- Leah: Oh ... fr- Gary Swart: or 699. Six- It's six days a week- Okay ... from 9:00 to Leah: 9:00. Okay. Gary Swart: And there's some startups in [01:07:00] San Francisco now that are- Oh Gary Swart: implementing 699. Leah: Okay. What do you think about that? I Gary Swart: maybe I have it wrong, the numbers, but whatever. But I was like- Okay. Leah: Yeah ... Gary Swart: who, who's signing up for that? Well, apparently- Yeah ... [01:07:10] like, companies where people are getting stock options and are really passionate about the mission, and it's a seal team, not a, not a lot of dead weight, are saying, [01:07:20] "Let's, let's do it." Gary Swart: Like, the sooner we get traction, the sooner we go. So I don't know. There may be, you know... Uh, one thing is it feels to me like culturally, [01:07:30] you know, companies are culturally diverse. And it works. But are there environments where everybody is crazy? [01:07:40] You know, like- I don't know, like maybe early Tesla- Yeah ... or early... Gary Swart: And can that work? You know, so will there be these companies built around affinity, like we're [01:07:50] all ex-Navy SEALs, let's, let's go, um, you know, take AI, the AI world by storm. Let's win [01:08:00] on sheer momentum and smarts, you know? Maybe affinities. Who knows? Leah: Yeah. Interesting. No, I love that. So Gary, you've had an [01:08:10] amazing, tremendous impact in your entire career, not just with what you've done with oDesk, but en- entrepreneurs like me as well, that we're constantly seeking your advice, and now you [01:08:20] coach, you know, and mentor through investments too. Leah: And I'm curious, as you look ahead, I know you have a book, and that, I

think, is gonna be amazing, because [01:08:30] putting all these frameworks in the book, like sign me up for the pre-order. I am ready for the book. Gary Swart: Well, I don't think we need it- It- ... 'cause we just talked about chapters one through 19. Like, just listen to [01:08:40] Precedent and Breaking Precedent- It's- Gary Swart: and you'll be good. Leah: It's perfect. We're gonna send this out to some book agents. This will be your book proposal, okay? But I'm curious, as you look ahead, [01:08:50] is there still a personal precedent that you feel like you wanna break in your life in the future? Gary Swart: Yeah. I... So for me, you know, let's go back to [01:09:00] my framework. Gary Swart: I'm investing now. Why? Well, let's go through my criteria. First of all, the people. Like Polaris, we have some really good people, and they don't all look like me. [01:09:10] Like we're scientists, we're MD/MBAs, we're big pharma folks. My partner Amy ran consumer products at Pfizer. Like she teaches at [01:09:20] HBS in her spare time. Gary Swart: She teaches at Yale Law School in her other spare time. She's on multiple public boards outside of Polaris. Like how did I get to this table? So [01:09:30] people check the box. Second is, uh, impact. You know, Polaris, we invest in healthcare, so we're doing well by doing good. You know, like my partner Amir has [01:09:40] the patent on CRISPR. Gary Swart: Like this is a big deal. Like s- to, to, like build a great company but also save lives, like that's... Check the impact box, Leah: right? Gary Swart: And [01:09:50] then impact, of course, 'cause, you know, I'm on eight boards and I came back to eight companies, not just one company, and an end, right? And all the other investors, et cetera. Uh, personal and [01:10:00] professional growth and development. Gary Swart: Uh, let me come back to that. Financial reward leveraged as opposed to all your chips on one number on a roulette table. You're spreading them [01:10:10] out across the table, smaller stacks but more bets. And then of course every fund is a new table, so multiple tables. So I like the leveraged [01:10:20] financial reward. Uh, and then the, the last thing is balance, and I have a lot more balance in my life. Gary Swart: I, you know, four kids. I think that's less than you, right? Or same. [01:10:30] Leah: You- No, uh, it, it is exactly the same as me. You have four. Okay. But yours are much, yours are much older. Mine are still babies. Gary Swart: Yeah, mine have flown the nest. Yeah. You're in the thick of it. Yeah. Yes. And I missed a lot of kids' [01:10:40] stuff when my kids- Yeah Gary Swart: were your kids' ages. So- Yeah ... I, and I regret that, you know? And so I'm there now. My son Will is gonna graduate college. He plays water polo. [01:10:50] I'm gonna mi- I'm not gonna miss any games next season. I missed most of my oldest son's games when he was in college. So these things, I'm checking all of the boxes. Gary Swart: [01:11:00] Where there's still room is on personal and professional growth and development And so what haven't I done yet? [01:11:10] You know, well, I haven't written a book. And guess what? I'm not a writer, you know? And so is that scary? Yeah, it's scary. But what happens when you put yourself in an uncomfortable position? [01:11:20] You experience growth. Gary Swart: And so I am seeking uncomfortable positions, right? Like, how do I put myself in a position where I could continue to learn? [01:11:30] And I'm at an age where a lot of my peers are retiring, winding down, and I'm saying, "You're winding down? Like, I'm still [01:11:40] trying to figure out how to wind up a little bit." Yep. And so for me, it's the, it's the learning, it's the contributing, it's the what can you give back. Gary Swart: And so what [01:11:50] are other ways I can give back? So happy to coach and mentor. I love doing stuff like this 'cause, I don't know, hopefully it helps somebody avoid a wrong [01:12:00] turn that I've made five times, you know, along the way. Um, maybe teach a class, right? Maybe, um... I don't know. There's lots of [01:12:10] different ways that I think I can personally and professionally grow and develop. Gary Swart: Uh, coding. We talked about this earlier, where- You're already Leah: doing it. You're coding apps. Gary Swart: I'm doing it. Leah: Yeah. Gary Swart: And I [01:12:20] can't wait. I have some time later today. I can't wait to get ba- to, to get back and enhance my, my app to the next level. So- I gotta hear Leah: about this app. Yeah. I gotta hear about this app. We'll do it [01:12:30] offline. Leah: Done. I wanna hear about it. Gary Swart: Done. Leah: All right. Well, Gary, thank you so much for joining me. This was such an incredible conversation. I always love talking with you, and it's been so [01:12:40] much fun to be able to share this on the podcast. So thank you. Gary Swart: Thanks for the great prompts and for the opportunity. I hope, uh, I hope it's more value for your listeners than it was for me, 'cause I had a [01:12:50] blast. Leah: That was Gary Swart, a leader who didn't just help build a company, he helped redefine what work itself could look like. [01:13:00] Long before the world was ready, Gary saw something most people missed, that talent is everywhere, that opportunity shouldn't be trapped by geography, and that the future [01:13:10] belongs to people willing to rethink the systems everyone else accepts as fixed. Leah: What struck me most about this conversation wasn't just the scale of what [01:13:20] he built. It was the clarity. The clarity to leave comfort behind, the clarity to know when he'd outgrown a role, and the clarity to understand [01:13:30] that success isn't about staying on the highway forever. Sometimes it's about knowing when you belong back in the jungle. Leah: And if you're standing at your own [01:13:40] crossroads right now, wondering whether to play it safe, whether to take the swing, whether to trust the thing pulling at you, let this conversation [01:13:50] remind you, growth rarely happens in comfort. And if you know someone who's breaking precedent in their own way, I wanna hear their story. Leah: You can drop me a note at [01:14:00] breakingprecedent.com. Until next time, I'm Leah Sullivan.