How AI Exposes Bad Founders (and Makes Good Ones Unstoppable) | David Youssefnia | Uplevel

Shamil Malachiyev: Hello, everyone, and welcome to this week's episode of the Founder's Code. My guest today is a co-founder of an engineering effectiveness platform, Uplevel, and a managing director of Hama Advisory, helping startups make better people decisions. He has sat on startup advisory boards and was an entrepreneur-in-residence for Madrona Venture Labs. And I'm certain there is a lot that we can learn from him today. Please welcome David Youssefnia. Hi, David.

David Youssefnia: How are you? Thanks for having me.

Shamil Malachiyev: I'm very good, thank you. Let's dive right in, starting with the big one. In your practical experience, what are the biggest issues that founders are running into? What are the biggest mistakes they're making at the start of working on their venture, that are not that obvious at the start?

David Youssefnia: That's a great question. When you're starting from zero, there's a lot of emphasis on: do we believe in what we're building? What kind of company are we going to build? Are we going to bootstrap, are we going to go for funding? What kind of culture do we want to build? And then there's the elusive goal of how we get from zero to one, and one to 10, and 10 to 100 - product-market fit. And then there's all the due diligence you go through when raising money, as investors take a look under the hood: what do you have from a product standpoint, how is the company formed? There's a lot of information out there on all those things. There are a lot of great books, a lot of great advisors, and a lot of standard things you would do - the SAFE agreements, the different founder advisory agreements that accelerate that process and make it easy.

Where I think there's a mistake - or maybe just a lack of awareness - is that there's not a lot of work done between founders to better understand who each of those founders is. Sure, there's: did you do the things that I need? If I'm the sales-and-marketing co-founder and you're the technical co-founder, do you have the technical skills to get your hands into the code in the beginning, and then quickly manage the first set of hires as builders? Do you have the domain expertise in the tech stack, or the learning agility to learn the new things - and things are changing very, very quickly right now.

But then there's a deeper understanding of who each person is and how they're wired to work, generally. And this goes beyond "you like pickleball, I like pickleball, so we have something in common", or "you went to the same school as me, or live in the same community, so we kind of get each other". Startups are hard, right? Startups are full of ambiguity. And if you're raising money, there are all the other things that come with that, in terms of moving fast and trying to hit your milestones. So how is each person wired to work under that pressure of uncertainty, and that high-stakes pressure? Are you going to keep going, or are you going to start to crack? And it's okay to crack. But it's about having an understanding of what's more likely to happen when someone cracks, and how you can both anticipate it and work with each other.

I think there's less of that happening with founding teams. Some teams go through it - and unfortunately, sometimes they go through it when it's too late, when the wheels are starting to come off. Then there are hard conversations to have, or things start to go their separate ways - and founders leave companies all the time. There's the guy who sold his share of Apple to Jobs for something like 800 bucks, which would have been worth billions. But if people are coming together because they have passion around the idea, there's a good justification for investing in better understanding each other. And we're not talking about spending months and months and tens of thousands of dollars. There are a lot of lightweight things that can be done. There are coaches, there are people out there who can help with that as well.

Shamil Malachiyev: And usually you cannot know what you don't know. Having had all that experience and knowledge - because I speak to a lot of early-stage founders as well, and I can see that they haven't even started thinking about their co-founding fit - what are the small things people can do to understand that fit, and then work on it and see what's missing?

David Youssefnia: At a really basic, low-hanging-fruit level: just scenario-plan. Okay - what would happen, or how would you feel, if this happened versus that? These are different situations; see how people might react, have conversations about them. Have a pretty open conversation: if we go down this path, these are all the different things we might expect. It's like a realistic job preview. When you give someone a realistic job preview - here's your role as a product manager, let's say, here are all the good things, and here are some of the things that might be a little hard - you're having conversations about the hard part. Because some people glorify the startup world. They were working for a big company with a nice cushy paycheck, they have the skills to do all these different things but they're narrowly focused in a larger company - so what's appealing is: I get to go work on all these different problems. But then there are other problems they may not be aware of. We might run out of money for six months. Your revenue goals are great - but what if you don't hit them? What are you willing to do? What do we do when we get to that point? Those are things founders can do at the low-hanging-fruit level.

Then you can start to look at assessments, depending on what you're trying to do and who the team is. There are a few personality assessments out there that have some science behind them and are purpose-designed - not from a clinical standpoint, but designed for the workplace - to give a sense of how you are wired to work. Then you layer on top of that the context of where you're working and see where there's a fit and where there's not. It's not a question of "okay, I'm going to go find a different founder". Just knowing what your blind spots are can be really valuable - for the individual founder, and for the founding team.

And as a result, if the founding team is working well together, the next set of hires sees that, and it goes on from there. But if the founding team is having dysfunctional disagreements - it's not just about disagreements, it's dysfunctional ones - that starts to permeate through the culture. Then you have an us-versus-them mentality, which can be really destructive at an early stage of a company. You can make a decision because of which camp you're in, versus what's the right decision for the company. And that could be a huge missed opportunity.

Shamil Malachiyev: And it's probably constantly distracting. I can imagine having those meetings with the whole team where you can just feel the tension - which doesn't allow you to focus on building the business, because you're in an emotional state instead.

David Youssefnia: Right. Yeah, exactly.

Shamil Malachiyev: I've noticed that being a founder takes a certain type of person, because right now everybody's trying to achieve financial freedom - the only way is start a business, become a founder, get venture money. It seems like everybody's trying to make a run for it. To help people understand the details: what does a life look like that leads to the point where you're ready to become a founder? Can you tell us about your earlier days - what were you like as a kid, as a teen in school?

David Youssefnia: I always had an entrepreneurial bent, with a mixed amount of success. I was the guy selling candy to my friends in middle school, then I started a pool-cleaning business, and I always had jobs throughout high school. But I always knew that I wanted to wake up and enjoy what I was doing. When you get to work, you have the realization that work takes most of your time - and you don't want that part to be the thing you regret the most.

I spent time in college as a psychology major, and with that framework I sampled the clinical side of things. I was a peer counselor, worked in research, got firsthand exposure to what it was like to work in a clinical setting. There's nothing wrong with clinical work - it's super valuable and people need it, especially these days - I just knew it wasn't for me. The heaviness of carrying people's problems wasn't something I wanted to do for 40, 50-plus hours a week. But I was still drawn to human behavior - understanding how people work, just in less clinical, more day-to-day settings. That led me to social psychology. Then I took a class in industrial-organizational psychology and thought: wow, this is interesting - it combines an interest in business with an interest in human behavior, and there's a lot of data behind it.

I worked for a graduate student in his PhD lab, helped him analyze and collect data for his dissertation. He finished, and passed me along to his advisor, who happened to be the head of the program. Talk about being in the right place at the right time - I didn't know how well-regarded he was until after the fact, when I went to apply to graduate school, and he was instrumental in helping with a letter of recommendation and all of that. So there was always this thread: enjoy what you do, have some passion around it, and try to make those choices. I always knew I wanted to go out and start a consulting business - I thought I would do it later in life. Then I started my career in consulting, and within seven or eight years I left and started my own consulting business, which I ran for about 14 and a half years.

Shamil Malachiyev: That got me thinking - I remember that TV show, Billions, with Axelrod. They had a corporate psychologist whose goal was to make sure people are fired up - that they're not a drone, not blocking their own success. And I've noticed my role as a founder was always to be a kind of mentor and trainer for people. My wife is a psychoanalyst with 10 years of practical experience, and she teaches me a lot of this kind of stuff. It really helps to be able to talk to the people in the company, understand how they're feeling, and know how to help them get to the better side of themselves - which I think a lot of people lack when trying to grow a healthy team.

David Youssefnia: Yeah - and I think there's a realization that that's important now, too. The role of the manager now isn't just to direct work; it's also to help their employees grow their careers and see what the path is. The work I was doing at Mercer, and when I was running Critical Metrics, was in this category that's now called employee listening. We did a lot of employee survey work. Typically you're asking employees: do you understand where the company's headed? Do you believe in the leadership? Do you enjoy what you're doing? Do you understand what your benefits are? How focused are you on the customer? Things that are all important levers - if you're running a large enterprise, you want to know your people understand them, and if there's a part of the organization that doesn't, you can guide some interventions around that.

We'd also ask questions about your likelihood of staying with the company - that's one of the biggest predictors of turnover. Generally speaking, over my career, that's always been an important piece. There are small pockets of time where unemployment rates are double digits and everyone stays in their jobs because they have fewer options - but you don't want to treat people poorly, so that when the market changes, they're bailing, they're getting out of there. One of the things commonly done in the field is to see how we can predict that intention to stay based on how people respond to other parts of the survey.

Shamil Malachiyev: What are the important questions you ask there that give you the hints?

David Youssefnia: I'll get to that in a second. What we do is run something like a regression model - sometimes you get a little more advanced, if that's not too technical - and say: for the overall employee population, what are the top drivers of employee retention and employee engagement? And across probably hundreds of times we've done this, if not more: having a sense of career opportunity is one of the key pieces. If an employee feels that the organization is investing in them so they can grow - and it's not just based on promotions; it's based on learning, on opportunities, on exposure - they feel the employer is investing in them. And in return: I'm going to invest back into this organization, by staying longer, showing up, putting in that extra discretionary effort.

And that is the gold of all this. If organizations can say, let's create a work environment where people are motivated and see a future, people are going to want to be there. Often it's not as clear for everyone - some roles in organizations have a higher market value, so an organization might prioritize investing in those versus others, but then you end up having problems in other parts of the organization. So it becomes a challenge there too.

Shamil Malachiyev: Another big thing I notice - going back to the question of what changes within founders throughout the years. Even on the last podcast I recorded, we talked about how every six or seven years there are these big shifts in your way of thinking, in your prioritization. And we were debating whether it's worth trying to induce the way of thinking of a 45-year-old when you're 30, or 20 - because at each of these stages there's a different motivation, and you think at different scales. Have you noticed any major changes happening to you throughout your life, maybe before starting Uplevel?

David Youssefnia: The aha moment for me came after a couple of years of doing that kind of key-driver analysis for our clients, when I was running my consulting business. And I also had this as an employee - that notion of: is the employer investing in me? Firsthand: my first week, I started as an intern at Mercer, and I remember one of my bosses, Joe Parente - he called me into his office and said: David, we're going on a sales call. A phone call. They had a sales script to help qualify and get the client closer to seeing the value. He said: when we get to question six, you're going to ask it. I was like: really? Wow, okay, great. I don't even remember the question. All I remember is I came home thinking: this place is awesome.

And the same approach is what I took with my consulting business and the people who worked for me. I didn't just throw them into the deep end - I slowly exposed them to more and more responsibility, to the point where some of the projects, we just had the team run almost without me. And they were totally jazzed about it, because they could have gotten a job at a bigger firm and they wouldn't have had as much client-management responsibility. And you also have to understand your team: not everyone is wired to do business development, but you understand their strengths - some are really wired to be great project managers, with that attention to detail, moving things along.

So the shift for me happened early: we had a small team, and we didn't need to do an employee survey to know how people were feeling - we'd have one-on-ones and check-ins - but we knew across the board that if people feel like they're growing in their career, they're going to stay with us. And we carried that on when we co-founded Uplevel. Every employee had a discretionary budget - not a massive amount of funding - to go to any conference they wanted to go to, as long as it connected to what they were trying to build for the company. Someone would come and ask, kind of sheepishly - can I go to this? Does it connect with what you're trying to build? Yeah? Then go. They'd come back and share their notes, and it was a great opportunity for them.

Shamil Malachiyev: And what has been driving you to build companies? Because it feels a lot more stable and safe - if you have that entrepreneurial fire, you basically know how to get shit done, and if you use it within a large organization to drive results for them, you're almost guaranteed to be a star employee. Everyone would say: dude, just chill and try to do less. What drove you to abandon the safe, stable life and go bungee jumping instead?

David Youssefnia: For me it's the zero to one. Trying to get from an idea to putting it into people's hands is super intriguing and appealing. But it's also hard - at that stage, there's probably a 90% failure rate. And 95% of founders think they're in that top 10%.

To answer your question: seeing what's around the corner has always been a driver for me. There are these punctuated points throughout my career where it led me to do the next thing. I'm dating myself a little bit: when I was at Mercer, the first rounds of surveys we did were all paper. Then we went to web - web surveys with paper reports, then PDF reports, then the whole thing was a platform. Then we went from hosting your own survey technology to the cloud. I saw that as an opportunity, because I didn't need a whole big IT team to code up a survey every time - we could date different technology providers, and that was their model. We did that successfully with a few partners for 14-plus years.

Probably 10 years into it, we were working with a large hospitality brand, the Hampton Inn, and we had multiple projects with them over four or five years. The first round of work was to evaluate the training they had invested in. But because of their lack of access to data, we had to go out and collect that data firsthand. So I had a team of researchers, and in five weeks we visited 100 locations, collecting data from managers and teams and observing their interactions around training. We were able to show them the path to training success: when the manager believed in the training, they encouraged their team to use it; when the team used it, they saw results - the training was mainly focused on guest interaction and customer-service behaviors. Then we said: training is making an impact on property performance, so what else can managers do? We did a day-in-the-life study to understand what a day in the life of a manager looks like and what the key manager behaviors are that drive property performance - very similar to Google's Project Oxygen, which has been around for almost 20 years now.

And then a couple of years later, they asked us to revisit the training evaluation project, because they had launched a bunch of new training. And they said: listen, this time you don't need to go visit 100 locations. We have a learning management system - we're going to give you a pipeline to that data, to answer the questions you were collecting data for manually, in person. I said: great, happy to do that. I'd still go to a few of the properties, because it's nice to have someone there who's not evaluating them from a QA inspection perspective.

Shamil Malachiyev: Was that kind of an AI moment for you - back then, the "these things can take our job" realization?

David Youssefnia: Not "take our job" - but that companies were beginning to recognize the value of the digital footprint that employees were leaving at work. That was the pivot. This was pre-COVID; work was getting more digitized, and there was this record of how people were interacting with customers, how people were interacting with the training. We were able to use that to answer big questions for a client. And I thought: what else can be done with that data? That thought was stuck in my head for a while - we had done it before in a limited sense for some of our other clients.

Fast forward to 2017: I met with the folks at Madrona Venture Labs. They said: what do you think of this space? I said: well, I've been thinking about it this way. And they said: we've been thinking about it too. Fast forward - I joined them as an EIR, and we incubated Uplevel out of there, to focus on the software development team productivity question, by applying machine learning and organizational science to the footprint data left in Slack and Teams and Calendar and Jira and the code repos. It's a big problem to solve - if you can solve it. So that was an exciting next transition.

And I don't know what the next thing is. I think there's low-hanging fruit with AI for people to just make their jobs more efficient - something that would have taken you weeks or months, you can spin up in a couple of days. But it's an ongoing process, and everyone's moving fast - some people are moving faster. What's the saying? AI won't replace your job, but you'll be replaced by someone that does use AI for their job.

Shamil Malachiyev: That's for sure. And that approach is something I advise a lot of people, too: before jumping into the founder's chair, try to do some work as a consultancy - talk to those people, try to solve their problems, see if the problems repeat across industries and companies. And if they do, then you have a solution you can direct to those customers as well. What's your take - do you think that's a viable approach nowadays, when things are moving so fast?

David Youssefnia: To be like an AI advisor? Maybe - but I don't know how it stops moving so fast. There are definitely companies that have that need right now. But I feel like within a shorter period of time - whatever time period I put out there, it's probably shorter than that, but let's call it six to 18 months - it's just going to be baked into almost everything. There's no company that doesn't use technology. Even a landscaper can use technology to schedule things and do billing. It becomes more of a utility - there's no company that doesn't use the internet right now, but when the internet first came out, that was a whole big thing. And prior to that, you can look up old ads for electricity, trying to convince people to use electricity.

So I don't think it's a space I would get into. I'm sure people will be able to make some money and then evolve into something else. If you go to a talk by one of these firms and they share what they're doing - if you're savvy enough and have enough prompt-engineering skills, or hire someone that does, you can pretty quickly replicate a lot of their offering. But it could also be a matter of bandwidth - a resource augmentation thing: our team is heavily focused on working with our customers and delivering work right now, so we don't have the bandwidth, so we bring someone on to help us. So I could see some people being a fractional AI champion or implementer of some sort.

Shamil Malachiyev: And what do you notice about realistic adoption rates? I look at a lot of large companies - okay, if we don't talk about the customer support function or the development function, all the other functions use workflows which are not necessarily AI-integrated. And there's a lot of emphasis on pushing them: you guys have to research and make use of every single AI tool out there. What are you seeing?

David Youssefnia: I think it's a change management problem. It's a change management question. The technology is ready, but the reason why it's not being adopted is because the people aren't ready. That could mean: I can use something to do my job as an individual contributor, but it doesn't flow up to the rest of the organization, because my manager may not be there yet - we're still used to looking at things in a different way.

I also see some leaders understanding what it can do, but it's a bandwidth question: I just don't have the time to build the thing I know can be built to make things a lot more efficient. For example, I was talking to a finance leader at a large company, and they have three or four people - call them analysts - and each one has a responsibility to generate a report every month. That's an agentic problem to solve. But because of the size of the company, and the data needs, and the information security needs, everything has to be provisioned in the right way. That's the blocking mechanism - the technology exists to do it, there's leadership support to do it, but it's a bandwidth issue. And it's worked fine up until now.

But let's say it does go through. That brings up a much bigger question: what do you do with those three or four analysts? Do you just get rid of them? No - you probably need some of them for something else. And I think the thing that's going to be important in the workplace is not just hiring for technical skill - you almost need less technical skill and more critical thinking and strategic thinking, the ability to solve the problems that are going to come our way. You're going to be hiring people with domain expertise and problem-solving expertise more so than domain expertise and execution experience.

Shamil Malachiyev: Because that is going to be delegated to the power tools, potentially.

David Youssefnia: Right. You can give a CSV of whatever data you want and within minutes run a Monte Carlo simulation. You can know very little about what that means, but get some directional results: we should probably focus more on this area, let's go dive deeper into that as a group, or with more rigor.

Shamil Malachiyev: So you need more of an overview idea - to run the Monte Carlo simulation, you need to at least know the term, know what kind of results you're going to get and what to do with them. Because the AI knows all of this.

David Youssefnia: Right. If you're a marketing analytics group and no one here has any experience with something, the default used to be: let's go hire a consultant to do that for us. Now, if you have someone who's a little more do-it-yourself, who can hack through - within half a day you can understand everything you need to do, with the right prompts: how do I interpret this, what does this mean?

It's still a challenge, though - thinking about this with you out loud. We said we need people who have some domain expertise and that strategic-thinking expertise. That doesn't come out of nowhere. You usually learn it by doing those things. So there's this question of what happens to the bottom of the funnel. You bring employees in, they do the grunt manual work - but through that, they learn about things, they sit in on meetings, they observe their managers and leaders and how they interact, they have those moments of on-the-job learning. Well, if that starts to go away, because they're not doing those lower-level things - how do you prepare people to come into the workforce that way?

Shamil Malachiyev: Do you feel like it affects the overall mood within organizations? If you see AI making your position in the company feel more shaky - does it lead to a dog-eat-dog situation within companies? Whoever gets good with AI first is going to win, and the rest are just going to get sacked?

David Youssefnia: Well, I think "AI is not going to replace your job, but you will get replaced by someone who can use AI" is a very valid position to take on this topic. But it'll move gradually. Organizations are living things. And if you try to put something into it that it's not ready for, it's like when someone gets an organ transplant - there's organ rejection; the body rejects it. So you have to do it in the right way. Going wholesale - let's just shift from how we're doing things, everything's AI - that's not the right solution. You have to find things that slowly build in. And I think the things that slowly build in are the things that work in the background - like you mentioned, customer service calls and interactions. If you ever go online shopping: maybe that's Bob, or maybe that's Bob the AI talking to me about this.

Shamil Malachiyev: If we go back from the AI topic - it's a bit stressful, I guess, for a lot of listeners - back to you as a founder: what kind of percentage would you put on good days versus bad days? Bad days meaning when shit hits the fan, when something's stressful, when something's not working - versus good days, where you feel on top of the world.

David Youssefnia: I would say at most you're 50-50. At most. I would say it's probably more like 15 good, 85 not so good, but the 15 is so good that it outweighs. As a founder, as an entrepreneur - the path to success is not a straight line. It oscillates, it goes up and down, but over time you're moving up. It's four steps forward, maybe two steps back, and you continue that way.

And I think it's a good example of: if you're co-founding a company with a couple of other people, are they prepared for that type of experience? Sometimes you learn quickly that they're not, because they retreat, they become closed down, or they just go back to what they know - which may have been "this is how we did it at my last startup or my last company", which may not be the same stage or phase as you are now. People in times of uncertainty and stress go back to what they know. So if your co-founder is the sales-and-marketing co-founder, they'll think the path out of this problem is more sales and marketing - when you really want to take a step back and ask: do we have the product? Is this the thing people want, before we go out and sell more of it?

Shamil Malachiyev: How do you keep yourself steady? If you see your co-founder shutting down because it's stressful - before you can help him, give him some energy and enthusiasm to get back up - what kind of mental frames do you have? Maybe some tricks that worked for you to keep yourself in a healthy frame when you're feeling down, when shit hits the fan? How did you maintain the level of confidence and energy to continue moving?

David Youssefnia: It's a great question. I think there's a point where you realize that might be you - that's the self-awareness. And then you say: okay, I'm going to pause - not pause the conversation, but there are very few decisions that you can't sleep on overnight and see how you feel the next day.

And then there's the muscle of just meeting, having conversations, and having tough conversations. The more you do that, the easier it is to have those tough conversations. If everything's "okay, okay, okay" and you're feeling like this may not be going the right direction, but you just sweep it under the table, sweep it under the table - like a vent, or under the rug, whatever analogy you want - that's when it bubbles up, and then you get to a blow-up point.

There's a lot of research out there - you and I have talked about a few of the books we've both read - around what makes for a good founding team. There's this idea: oh, you should co-found a company with someone you know really well, you have a relationship with - you might be related, you may have been great friends, you might be neighbors, you may have gone to the same business school, you may have worked together at the last company. But what was interesting about that study was this: The more overlapping circles founders have with each other before founding the company, the lower the likelihood of success.

And it goes back to decision-making. Sometimes you have to make hard decisions. Say: okay, co-founder, you're a product person, and you're going to run marketing for now - because that's something you want to grow into, and you really wanted to be the marketing person for the company. And we're going to give you a longer leash to do that. With the limited funding that we have, those extra four months could be a matter of whether you succeed or not. So you make decisions to maintain the quality of the relationship over what's right for the company.

Shamil Malachiyev: And in the long run, those add up.

David Youssefnia: Right - in the long run those add up. You have two or three decisions like that, and you've spent more money than you needed to, you end up not getting as far along as you were supposed to, and all of a sudden your runway is down, you have to raise another round on less favorable terms. Everyone's now looking at it like: I went from X percent - I'm getting further diluted. Now, is it worth it for me? And that's a valid question too. There's always this notion: okay, you can own a hundred percent of everything - but is it going to grow to be really big? I owned a hundred percent of my consulting business, and when I sold it, I recognized the gain of that - but I owned a hundred percent of a plum. Or you can have a slice of a watermelon, or a big pumpkin. The people who are investing in you are giving you the resources to make that thing grow to be massive - so your smaller slice will be worth more.

Those are important questions: how big can this thing be, and is it really worth it for me? Especially if someone is not a serial-founder type - if someone has the appetite to take that risk once, and then says: well, if I'd stayed at the big company for five years, I'm guaranteed to make just as much, close enough, or maybe even more than if we have a massive exit. That's why you need to make those hard decisions. And I'm not saying don't co-found a company with a friend or someone you have a relationship with - but be aware of your propensity to make decisions for the sake of maintaining relationships versus making decisions for the sake of the company. That's an important distinction.

Shamil Malachiyev: When I was young, I think one of the things I remember most is something my father used to tell me. In English it would be: if you have the option to either be friends or start a business together - be friends, and you'll always find somebody to build a business with. Don't mix the friendship and the business. And the older I grow, the more I realize how trying to maintain relationships hurts the chances of the business making the right decisions to move forward.

David Youssefnia: Yeah. And it's not to say you can't be friends with your co-founders - you should have personal relationships with them. But it's a different nuance. I'm sure, of the founders you've had on the podcast, some of their closest friends are probably the people they went through it with - but that's because of the experience they went through, and they all had a common goal: let's build a great business together.

Shamil Malachiyev: A friendship that's built on top of a common desire to do something great and something big.

David Youssefnia: Right. And think about the workplace - a lot of people, especially early in their careers, some of their closest friends are people they went through their early career with, stayed in touch with, worked on things together.

Shamil Malachiyev: Has money ever been the main motivation for you - a sufficient driver to keep you up at night working the business? Or is it something else?

David Youssefnia: I mean, there always has to be something commercially viable - yes. If not, there are plenty of silly businesses that would get started just for fun, or zero-profit, profit-neutral lifestyle passion-project businesses. But I think it's more than that. It's more about making an impact, and seeing a hole in the space that you operate in that you can fill. The money will come - but you also have to understand what the drivers are to make that money come, and be in touch with what's happening in your space.

I would not discount the amount of domain expertise that's needed to go start a tech company to solve a problem. Oftentimes there are technology folks that have a technology, and they go find a use case for it. Sometimes they get extremely lucky and find it. And sometimes they think they've found it, they go build it, and it's not the right solution - the industry may not be ready, they might be missing a big part of the workflow, or what have you. I've seen it firsthand: some of the companies I was advising ended up going where they had the domain expertise. They'd say: we could point this solution at all these different potential problems, but you just have a much greater comfort level where you know the space.

And then think about sales traction - and the other traction areas too, but let's say sales. You go in front of a customer, and you're coming from that space: I've spent X amount of years in this space, I know this problem pretty well, and we've built this technology to solve it - a built-for-us-by-us kind of model. You see that a bunch of times. I was just at a conference and met a few founders of HR-tech-type solutions, and they were coming at it from the perspective of: I was running companies and this is something I needed, so I built it for that use case. It also lends itself to a potentially higher likelihood of getting the right kind of funding - when you're going in front of investors and saying: I have X amount of years in this space. You have founder market fit. You know enough about the space, and you have an easier time building relationships with your first set of customers - because everything's founder-led in the beginning. You're not going to hire a business development person in the first days.

Shamil Malachiyev: Unless you have a lot of money to throw in.

David Youssefnia: Even then - you have to make sure you have the right person, and you want to be as close to your customers in the beginning as possible, until you get to that elusive product-market fit - the confirmation that we have the right thing.

Shamil Malachiyev: Can we talk about all the different fits that need to be there? You mentioned product-market fit - that's the standard one everybody knows. But then you said that within the founding team there has to be founder market fit.

David Youssefnia: Yeah - founder market fit: does the founder know enough about the space to go build something? When we were building Uplevel, I was the founder that had enough knowledge of the organizational science space to weave that into what we were building. Whereas you often see, say, two developers out of Amazon building X to solve a childcare problem, or some other problem. I think the only way around demonstrating that is doing a lot of early customer discovery work - becoming super knowledgeable, being an amazing listener, and being able to synthesize all those pieces of information to say: we know enough about this space. And that takes time. You can also supplement founder market fit with an advisory board - having people who are industry experts help guide you on the product roadmap, and help open doors as well.

Shamil Malachiyev: That's an interesting topic - can we talk about that? I think it's something a lot of founders underuse. First, they don't know they can get an advisory group. And second, once they know - okay, now they've heard this podcast episode, and they're thinking: an advisory group, that's interesting, who can I reach out to? Who are the good people to look for, how high up the ladder, and what kind of message - what is the value exchange that should be offered?

David Youssefnia: For the value exchange: there's the Founder Institute, which has the FAST agreement. It basically outlines the responsibilities and the expectations, and it creates a grid: where's the company - maybe three levels, from just an idea, to a bit beyond an idea or a working prototype, to actually working with customers - and where's the advisor: are they a deep expert, and so on. And it's pre-populated with how much equity they would get. It's probably from a quarter point all the way to, I don't know, one and a half or two percent - it's on the lower side of things. And with that, there are expectations: at the higher level of equity, you're going to have a more frequent cadence of meetings, you'll help with certain business development activities, or help with one or two projects a quarter of some sort, outlined in the agreement. That's a great example of not having to reinvent the wheel - you can download it, look for it online, and work off of that.

Where you have the discussion is: are we in agreement on where the company is, and are we in agreement on who I am as an advisor? Of course advisors always want to be at the higher level - but you want what's right. Because if you're over-indexing on "I want the most equity for my work" and you're not in a position to deliver, that relationship isn't going to last. And you're doing a disservice to the startup - you've wasted three or six months of their time. Whatever you get - you want the highest chance that that percentage is going to be worth something.

Your first question was: who do you bring on board? I think it depends on what you need. Say I have a really strong technical co-founder who maybe hasn't led teams at scale, or hasn't led teams at all. Then you want someone who can be a CTO whisperer to them: here's how to think about growing the team, and your roadmap. Then, on the domain expertise side, I've served as an organizational science advisor to a few different startups - and there's some fluidity to that, because a startup's needs change over time. A startup might be focused on a solution for this problem, and then it moves on to another problem. And then the CEO themselves - especially first-time CEOs - should surround themselves with someone, in an official advisory capacity or not, to help them think through their first round of hires, their path to fundraising, all those things.

We celebrate fundraising in the media all the time: this company raised this. That's just a check-the-box milestone. If you're building a venture-scale company, you're going to have to raise money. What you should be celebrating are outcomes of success: we built, we shipped, we have our first customer, now we've got traction, and we have retention. Those are the things that should be celebrated. It's very easy to say: I raised 10 million on a 40 pre - great, it's all paper. Now you've got to do something with it. And that's where advisors can come in.

Although - someone who has spent a lot of time advising, saying this - you can also build an AI board of advisors. You want to be really careful about that, but you can do it. I mean, I've done it for myself, to vet some ideas and things like that. You look at it with a grain of salt, because everything that comes across seems pretty positive.

Shamil Malachiyev: So hypothetically, you could just set up two AI chatbots. Take one, feed it all the information about David Youssefnia you can find on the internet - everything he's done, podcasts, YouTube videos, what he talks about. Then take another one, Shamil Malachiyev, and put in everything he's done. And then you have an advisory board: guys, I'm going through this - what can you suggest? Do you think virtual advisory boards are something founders are going to be using a lot more in the future?

David Youssefnia: I think some might be using it and just don't know it - they're just asking domain-specific questions of ChatGPT. You could have Steve Jobs as an advisor, Warren Buffett as an advisor - you could make up any of those folks. Because - how many books have you read over your life? Hundreds, if not a thousand. How many can you remember right now - what the main points were? Maybe a few. Now there are millions of books in these large language models, and they recall them immediately. So there are ways of leveraging that. And I think the role of the advisor will change a little bit too. Some folks are more comfortable interacting with an AI in that way. But it's nice to have someone who's actually done it, and who is less likely to hallucinate a response or miss a point.

Ultimately, I think advisors will also start to be leaned on more for their relationships - here's someone to go grab coffee with, tell them I sent you - as a door opener. And a door opener for sales - I've had conversations with startups around that, and it feels like a different relationship, where your responsibility is to close business. That's a business development role. The advisor - think of it as having someone to help you reduce the likelihood of going over the guardrails you want to set for yourself, or moving too fast, or doing something that could potentially break the company.

Shamil Malachiyev: What are you personally most excited about for the next five years? What do the next five years look like for David?

David Youssefnia: That's a great question. I think there will be a massive amount of innovation coming through, because the speed to vet ideas and iterate is just so much faster now. The trade-off is that everyone's moat is a little bit lower now. So people have to really concentrate on what their wedge is, and what that value is. I think we're going to start to see some really interesting and exciting companies emerge.

I'm a little nervous about what that might mean for society, and for kids who are in college now. Even the college experience is changing. A university can't say "don't use AI" - it's just a disservice to the students. Going to school - you're there to learn, and part of the university's job is to evaluate how much you've learned. How do you evaluate learning now? It's kind of interesting - maybe you go back to oral examinations: you come into the class, you're asked four questions, you have to explain it yourself. I also think we will hopefully become better communicators and collaborators, because those are the skills the market will need. We've gone through a bit of a downturn where everyone's glued to their phones, and people don't communicate by talking - they communicate by texting. If we could go back to ways of talking to people, I think we'll be excited about that too.

Shamil Malachiyev: Well, I want to thank you so much for taking the time and sharing so many good pieces of advice. I think a lot of what you talk about goes under the radar - people don't think about these things enough when starting companies, and they just stumble on them as they go. And by then, they're ticking bombs, which are quite dangerous for the chances of success. So I think this is a very healthy conversation for founders.

David Youssefnia: Well - the road to startup success is not smooth, it's not straight, it's not flat. It's uphill, it's downhill, it's bumpy; sometimes you're going off-road. So you surround yourself with all these different resources that become your GPS, that become your four-wheel drive, that become your bigger tires. And the piece that I would like your listeners to take away is that there's value in understanding who's on your team, and in spending the time to make sure you're better prepared for the journey.

Shamil Malachiyev: Amen. Thanks so much, David. That's a wrap.