The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

20VC: Notion's Founder on "Founder Mode": When it Works & When it Doesn't | Why The Way Startups Fundraise & Construct Boards is Broken | Raising at a $10BN Valuation in Peak Bubble Times and How Notion Has More Money Than Ever Before with Akshay Kothari

Sep 18, 2024

Akshay Kothari, Co-Founder of Notion and former LinkedIn VP, shares insights on navigating startup challenges. He discusses the concept of 'Founder Mode' and its impact on decision-making, emphasizing the importance of a founder's 'veto power.' Akshay reveals the thought process behind raising significant funds, including a $270M round at a $10BN valuation, and the lessons learned from investor dynamics. He also reflects on the need for diverse board members and the role of first principles in scaling a successful startup.

49:04

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Akshay Kothari

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Quick takeaways

Founder mode can be beneficial, but it becomes risky if a leader's decisions are consistently misguided, threatening the company's viability.

Notion's success is attributed to maintaining a lean team that fosters agility, allowing for quick decision-making and better resource allocation.

Linking customer feedback directly to product development has enhanced Notion's efficiency, ensuring that product enhancements align with actual user needs.

Deep dives

The Impact of Founder Leadership

Founder mode is effective when the leader consistently makes sound decisions; otherwise, it poses risks to the company. A strong leadership approach is needed to ensure that cash flow remains healthy and strategic choices are maintained. The discussion highlights the benefits of having a founder who prioritizes company culture and strategic growth, especially in companies that have significant funding, such as Notion. If a founder's decisions are misguided, it can jeopardize the company's future and viability.

Stay Nimble, Stay Selective

01:14

Embrace the Compound Vision

01:46

Rethink the Board: Balance Duty and Coaching

01:11

Test Boldly to Uncover Opportunities

01:25

Intro

3min

Scaling Startups: Embracing First Principles and Founder Mode

5min

Building a Lean Success at Notion

26min

Rethinking Board Dynamics

6min

Reflections on Parenting, Social Media, and Personal Growth

5min

Enhancing User Experience and Democratizing Venture Capital

3min

Akshay Kothari is Co-Founder at Notion, one of the fastest-growing companies of the last decade. Akshay has run every function in the company from sales, to marketing to finance and even led their fundraising efforts raising $340M+ from Sequoia, Index and Coatue with the latest round pricing them at $10BN. Before Notion, Akshay was VP Product at Linkedin for 5+ years, leading all of their content efforts. He joined LinkedIn when his previous company, Pulse, was acquired by LinkedIn in 2013.

In Today's Episode with Akshay Kothari We Discuss:

1. Founder Mode, Veto Powers and Focus:

Does Akshay agree with "founder mode"? What are the biggest downsides to founder mode that not enough people are discussing?
Why does Akshay believe that the single greatest power of a founder is their "veto power"?
What is the biggest opportunity that Notion jumped on that they should not have done?
What is the biggest opportunity that Notion did not jump on that they should have jumped on?

2. Raising $50M @ $2BN Valuation:

Why did Ivan and Akshay decide to do this raise when they did not even need the money?
How did the fundraising process for this round go? Why did they choose Coatue and Index?
Why did Sequoia say no to this round?
With the benefit of hindsight, what does Akshay wish that they had done differently?

3. Raising $270M @ $10BN Valuation:

How did Sequoia come back into the frame with this round? Why did they say yes here when they did not before?
Why does Akshay believe that of all the investor brands, Sequoia is the most powerful? In what way does having Sequoia as an investor change the trajectory of the company?
Is Akshay concerned about how he will be able to scale into the $10BN valuation?
How does Akshay address the challenge of bringing new team members in with stock options priced at $10BN? How much of a blocker is that?

4. Boards and Social Media are F*******:

How is the way in which boards are constructed broken?
How does Akshay believe that boards should be constructed?
What roles should founders hire for in their board members?
Why is Akshay most concerned about the "Tiktokification of everything"?
Why does Akshay believe that social media has never been more concerning?

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