
The Pursuit of Scrappiness · 2025-10-07 · 46 min
Key moments - from our scoring
Substance score
56 / 100
Five dimensions, 20 points each
Flo Health has become the dominant player in women's health apps, capturing 20-25% of monthly active users in the US and UK, and remarkably 33% in Lithuania - all without the typical Silicon Valley pedigree. Dmitry Gurski attributes his success not to innate entrepreneurial traits but to a 24-year journey that forced him through multiple pivots. He began as a shy, introverted engineer but learned leadership through accumulated experience across publishing, mobile apps, and eventually subscription-based health technology. The conversation covers how Flo adapted when Apple's App Store finally enabled subscription models in 2017 - a decision that faced internal resistance but ultimately unlocked the path to $300M+ run rate. Gurski emphasizes that major strategic shifts rarely come from careful planning; instead, external calamities (the 2008 crisis, Belarus geopolitical instability, the 2022 war) forced painful but necessary relocations and business model changes. He argues that predicting business outcomes beyond 6-12 months is impossible, making detailed financial projections for early-stage startups largely useless. Trust, distinguishing facts from opinions, and resilience through repetition are his core principles.
In 2017, Flo made the controversial decision to introduce subscription monetization despite fierce internal debate - at the time, it seemed outlandish because apps were culturally priced at $1-2, Apple didn't support subscriptions well, and consumers had no subscription habit. The shift succeeded because Netflix and other platforms gradually normalized subscription behavior, creating market conditions by 2020 that made Flo's $300M+ revenue possible.
External shocks forced each major pivot: the 2008 financial crisis ended his publishing job and triggered his first startup; geopolitical instability in Belarus/Russia in 2014-15 made existing projects unprofitable; and the 2022 war forced Flo to relocate its entire Belarus-based team overnight, moving to London and restructuring operations.
He separates facts from opinions: a fact is quantifiable and verifiable (e.g., 'retention is below market standard'), while an opinion is subjective (e.g., 'your project is stupid'). He analyzes facts explicitly but ignores opinions, especially prescriptive ones about his potential or background.
In 2015, no model could have predicted Flo's $300M revenue because subscription business models for apps didn't legally exist and consumers had no subscription habit - only team quality and market fit predict success, everything else changes unpredictably.
Lithuania has the highest adoption ratio globally at 33% of women under 50 using Flo monthly, compared to 20-25% in the US and UK - a phenomenon Gurski attributes to no single identifiable cause.
Our reviewer’s read on each dimension, with quotes from the episode.
The episode contains a handful of genuinely useful operational heuristics - org bloat mechanics, the headcount freeze philosophy, interview predictive-power skepticism - but these are diluted by extended analogies (roller coaster, Egyptian pyramids) and generic leadership platitudes. The substantive-to-filler ratio is mediocre for a 46-minute runtime.
An organization will spend all money it has plus at least 20% and it doesn't matter how much money this organization has.
interview is a way to say no but it's not a way to say yes
A few contrarian framings stand out - interviews as useful only for rejection, calamity rather than strategy driving major pivots - but much of the episode recycles standard founder-narrative tropes: don't listen to negativity, trust is foundational, ownership mentality wins. Nothing genuinely challenges conventional B2B or startup thinking.
all significant changes in my life...all these big changes happened not because uh, I was smart and uh, strategic...but because some calamity happened which forced us to make this change
it's very significant to distinguish facts and opinions...if you're getting a statement uh that your retention is lower than standard of the market, it's a fact...somebody's saying to you um no, um, your project is stupid, it's opinion
Dmitry Gurski is a genuine practitioner who built Flo to 80M MAUs and ~$300M ARR, navigated a forced company relocation during geopolitical crisis, and made real operational decisions at scale - not a thought-leader type. The transcript reflects hard-won experience, not recycled frameworks borrowed from books.
we have analyzed run rate close to 300 million and last year we raised uh 200 uh, 30 million from Junior Atlantic tier one American firm and Flow became unicorn
we started it anyway. But we had many other projects but before fully focused and committed to flow in 2015 because uh. Crisis in uh Belarus and Russia, which was provoked by Crimea, uh made our uh. Projects um. With a key market in these regions unprofitable
The guest consistently grounds claims in concrete numbers: MAU counts, revenue run rate, market penetration percentages by country, probation period lengths, interview accuracy benchmarks from Google data, and test-project spend. This is above average for a founder interview, though some sections (AI, leadership principles) revert to abstraction.
Lithuania uh has the biggest uh ratio between active audience of Flow and population. Like 33% of uh, all women younger than 14. Lithuania, our monthly active users and number one in the world.
we have 90 days for individual contributors and 180 days for managers
The hosts show some preparation (referencing a London conference the guest spoke at, citing prior episodes) but consistently ask broad, open-ended questions and never push back on vague or unsubstantiated claims. Follow-ups are largely restatements or affirmations rather than probes that extract deeper specifics.
Are entrepreneurs. Can everybody be a good entrepreneur? Are they born or does life make you into one?
Similar to one of the previous questions, are there any lessons that you 20 years ago about business thought that this is how it works?
Computed from the transcript - who did the talking, and the words that came up most.
Dmitry Gurski founded Flo Health in 2015, turning it into the leading women’s health app globally with over 420 million downloads and 80 million monthly active users. From bootstrapped beginnings to a $200M Series C from General Atlantic in 2024 (valuing Flo at $1B+), Dmitry has scaled the company to profitability, with offices in Lithuania and the UK.
Transcribed and scored by The B2B Podcast Index.
Speaker A: I think people may learn a lot and people may change a lot. And uh, if you saw me 20 years back or 25 years back, you would never bet that uh, I would be able to run uh, quite huge uh, company successfully because I was uh, very shy, very nerdy that time.
Speaker B: They might think like, how does it feel even to run a uh, one, you know, billion company compared to, I
Speaker A: don't know, a company now bigger than 1 billion. It would be very sad if this company were 1 billion like at such hot market one year after the last round. It would be such a fail. I'm the same. Like all significant changes in my life, all these big changes happened not because uh, I was smart and uh, strategic and was thinking about everything, uh, but because some calamity happened which forced us to make this change. There is like one significant principle about any organization. An organization will spend all money it has plus at least 20% and it doesn't matter how much money this organization has.
Speaker B: Hello friends. We're back with another episode of Pursuit of Scrappiness podcast where you're building a business, running a team or just starting out new career. We're here to bring you scrappy and actionable insights to help you become more productive. My name is Jan Sebs, I'm here with uh, my co host uldistaralcon. As always.
Speaker A: Hey, good day to you sir.
Speaker B: Good day. Before we start, quick reminder, follow us on Spotify Apple Podcasts helps more than you know. In exchange for that, you'll find over 200 episodes there. We cover all sorts of topics that you need to become scrappier and better version of yourself in life and business. Plenty to explore if this is your first episode and uh, by following us you know, you'll, you'll be first one to notified when something new happens. So Spotify Apple Podcasts, please follow. Click the follow button there. Alright, uh, over last four and a half years in pursuit of Scrappiness, we've been really lucky to bring you conversations with founders that have built truly global and truly big businesses. People whose products have reached millions and changed lives of millions of people. But I think today's guest uh, stands out even in that group of successful entrepreneurs. Um, the company he started in 2015 has grown to become the most popular in its niche in its field, globally, worldwide in App Store and Google Play. And um, there's a actually very high chance that either you yourself or somebody you know is using it, uh, regularly. From the intro, maybe you, you might assume it's somebody from Silicon Valley or us uh, but actually the roots of the company is much closer to, to where we are in Baltics, it's from Belarus. Also present in Lithuania and uk if you didn't guess already. We have a very great honor to welcome today Dmitry Gorski, co founder and CEO of Flow Health today. Hey.
Speaker A: Hello. Thank you for inviting and uh, you touched uh a bit that uh Flo was born in Belarus and uh, we have uh quite huge office in Lithuania. But uh, also we have quite significant audience in uh, this region. Like it's even surprise for me that uh Lithuania uh has the biggest uh ratio between active audience of Flow and population. Like 33% of uh, all women younger than 14. Lithuania, our monthly active users and number one in the world. Flow is quite big in all countries, almost no countries worldwide. And of course our core market is the United States or United Kingdom. United States we have more than 20% of all women younger than 50 or so months elective users in UK probably 25% or so. But Lithuania has the first place worldwide. I don't have any explanation why uh it happened, but it's just like a fact. And Bill Rus is um, number two.
Speaker B: No, but these percentages are crazy. And if you followed Mitir on LinkedIn, he shares these stats. Sometimes I do follow for a few years and I see just the percentage of women users you capture in each market. I think that is what makes Flow uh truly um, one successful but also unique, uh as you really are talking about, like you said, one out of five, one out of four users in each market. Uh, it's a very tremendous reach.
Speaker A: Boy is uh, the biggest health and fitness uh product in the world. Measured by monthly active audience. We have 80 million monthly active users uh and uh, it's much, much bigger than at least twice bigger than uh, any other product uh, in this uh, category. And uh, although it's like it's a quite uh successful uh company from business prospect view we have uh, analyzed run rate close to 300 million and last year we raised uh 200 uh, 30 million from Junior Atlantic tier one American firm and Flow became unicorn and last year it was the biggest round in digital health worldwide.
Speaker B: Actually we can dive into conversation and on this podcast we like to especially when we talk to experienced founders and if you have listened to some of maybe mitj's previous interviews he's given, Flow is obviously not the first business uh he started. He went through multiple companies to grow the spec and always good to ask these kind of entrepreneurs questions uh, about how they built it. And one of the first ones I wanted to open with is um, uh, speculative question. Are entrepreneurs. Can everybody be a good entrepreneur? Are they born or does life make you into one? Um, yeah. What is your thoughts on this?
Speaker A: For example, I think people may learn a lot and people may change a lot. And uh, people, they defined a lot by own journey and uh, own environment. And uh. If you saw me 20 years back or 25 years back and I'm 42 years old now, you would never bet that uh. I would be able to run uh, quite huge company, uh, successfully because I was very uh, shy, very nerdy that time, without any evident um, signals of uh, leadership. And uh. I. Even though maybe a bit autistic, I would say like based on uh, modern terminology. But then uh, just pretty much occasionally I got this journey and I became manager. Firstly I was manager in salary as a hired manager. Then we started our own companies. And uh. 24 years of experience, uh changed me. And uh, I have learned a lot and I adapted to this role. And uh, now I'm quite efficient. And I believe that people should not uh, be prescribed, uh, that it's your role, it's your future. You're kind of born to be in this role or you're born to be in this role. I think people may learn a lot and maybe change a lot and may adapt a lot. And uh, journey defines people. And my answer that um. It's mostly journey rather than uh, character.
Speaker B: It's a good, good point you made that we have uh, other entrepreneurs listening. Smaller companies and they, they might think like how does it feel even to run a one, you know, billion company
Speaker A: compared to, I don't know, bigger than 1 billion? It would be very sad if this company were 1 billion like bought market one year after the last round. It would be such a fail.
Speaker B: But for you, do you feel, uh. Is stress bigger now than I know 10 years ago for you as a CEO? Because the company is bigger, much smaller.
Speaker A: And not because uh, it's less stressful, but because uh. I just uh. Have much uh. Better uh, resistance to uh. That. And I have so much different experiences that uh. It's just not new. It's like. It reminds me a story once with my son who is teenager, we visited uh, like an attraction park in Turkey with huge roller coaster. And because he was younger than 16, I had to write with him because he was not allowed to write himself. And he wanted to write like many times. And first time it was just like a. It was immensely scary. It was so shocking. I was like, I'M not especially emotional but I was almost kind of yelling on this uh, Turkish roller coaster. Second time was uh, a bit calmer. Uh and uh, we had like ticket for the whole day and uh, maybe we had 10 rides. And when it was ride number 10 like I was so comfortable. I was drinking coffee, reading newspaper. And what changed? The same uh, me, the same roller coaster the same day. Just this experience became repetitive and we just know like ah. Like not for the first time like we understand how to handle that, we understand how it will end. And because of that it's becoming kind of like a not so emotional. And uh. Because it's like no, um. I don't have much stress even uh, when situations are quite uh. Challenging. But mostly because um. I have had uh so many different calamities in 20 years that I just know how it may end. And uh. Like I just kind of. It's like the same principle as with this roller coaster. It's just not new for me. And uh. It's like it's advantage to be like uh, experienced managers. Uh pretty much you have seen everything. And because of that like nothing impress you too much.
Speaker B: And also what are the things like when people see a CEO and founder of a big company they of course see. I know big round raised high valuation, uh success. The last part, right. But there is this unseen part that goes into it. Um, what are maybe about some of the challenging parts that goes into being co founder and CEO of such um a big organization? Are people underestimating these things and then thinking that it's all nice and good and actually it's not or you're feeling that it's quite not like easy. But you know um.
Speaker A: I have like one principle. It sounds like a bit rude but it's uh. Really true that uh. All organizations uh. They're shiny outside and shits inside. It means that when you dive into any organization you would see many, many many problems. And you may just like for example um. Make a list of organizations you admire and then start reading Glass Door and you would see that same problems everywhere. What is pretty much the nature of uh. Big organizations or small organizations, nature of people when they becoming like hierarchical, when they becoming like a complex uh. Uh. A lot of um. Emotions, a lot of um. Politics, a lot of slowness, a lot of bureaucracy. Always kind of like it's and but it's kind of natural outcome of uh being big organization because like. But it's uh. Again like it's uh. When there is a goal to build something big, it's necessary to have big organization. It's like, uh. Could it be possible to build, uh, like pyramids in Egypt? Like having like a small, uh, scrappy team, like from like, I don't know, 10 builders. I don't know. Probably, maybe in 100,000 years. Yes. And then like, uh. It was super messy the time when they put 100,000 people to this place to build pyramids. I'm quite sure that it was immense mess that time. And uh. I quite sure that uh. Glass door of pyramids would have like, rating like, uh. Lower than even one. Because, uh. Always problems with food, always dying. Uh, stone is not coming. All those slave owners, they're terrible. But, uh, by putting 100,000 people and tolerating this mess, they have built these pyramids. And the same with big organizations. By building big organizations, you start having all these, uh, problems of a big organization. Which are inevitable problems of big organization. Um, but then it's the single way to build something big. Maybe in very foreseeable future it will be possible to build something big having much smaller team because of AI but, uh, we are not here. It's still necessary to have significant teams to build something big.
Speaker B: Um, you mentioned you've changed a lot in 20 years. Uh, any kind of leadership or managerial principles that have not changed. Some things that you. Some principles or values that you knew from the beginning that are still true. Whether it was small team, big team, huge team.
Speaker A: To be trustful, never lie. And it's very significant. I believe ultimately trust is the most significant, uh, uh, value. Which makes organization, uh, and culture strong. Um, else, maybe it's not so much about, uh, principles. But of course that time I didn't understand, uh, many things. And it's pretty natural. I think any person making a reflection and thinking about, okay, uh, what was I doing like five years back or 10 years back was I'm stupid or not. If you think that you was not stupid, you were not stupid. It means that, uh, probably you have not progressed enough in this five or ten years. You don't think that you were not stupid five or ten years back. And uh, of course, from my current experience, uh, I see many mistakes. But again, it was part of a journey. And to be here, it was nice to be there and just like walk through this, uh, journey. Maybe the biggest, uh, advice which would I give to myself the time is, um, don't listen people who are negative. Negative about your potential, Negative about potential of your company. Because always people who are prescribing that, oh, okay, you was born builders and because of that you can't be like a Western CEO or you can't because you don't have a proper pedigree. You can't build uh something significant or uh, this project is stupid, it can't be big and there are always uh people like that around and uh, these people uh, drain a lot of energy and self esteem and uh, uh is better to avoid such people and it's inevitable to have such people.
Speaker B: Yeah, that's very true. Especially if the background is yeah, you're not from one of the big countries where like the big businesses usually come from. I think there's a lot of um, challenges of course also linked to that. But when you hear feedback, when you hear negative feedback, how to like you said you have to ignore some of it. But do you ignore all of it or some you take for learning?
Speaker A: I think um, it's very significant to distinguish facts and opinions and uh, very clearly to understand uh what are facts and what are opinions. Uh because if like uh, if you're getting a statement uh that your retention is lower than standard of the market, it's a fact, um, somebody's saying to you um no, um, your project is stupid, it's opinion, uh and it's significant not to react on opinions but analyze facts very very explicitly to distinguish that.
Speaker B: Similar to one of the previous questions, are there any lessons that you 20 years ago about business thought that this is how it works? That turned out completely wrong. Something that the young founders maybe come in expecting or thinking that in real life actually doesn't um completely work opposite how people think.
Speaker A: Maybe my big lesson that uh it's absolutely impossible to predict uh uh future of uh a project uh long term, even uh more m than four, six months or even one year is difficult to predict. When it's um, even our current stage, even one year is difficult to predict uh uh and long term is completely impossible uh to predict. And when people are making this like making this like when they in the state of analysis paralysis like spending time building like this complicated models, projection like long term future, uh it's just like waste of time because everything will be very different. And as example it would uh have been absolutely impossible in 2015 by any analysis to predict that flow would achieve 300 million in revenue. Impossible. And why? Because that time uh subscription business model didn't exist for apps. It was even not allowed for apps uh by Apple and all the people didn't have habit to pay for subscriptions uh dozens or even hundred uh dollars per year because apps are Very cheap. And it was absolutely impossible to predict that uh, because of efforts of Apple and the companies like Netflix, this uh, phenomena uh, of subscription business model would become so widespread and people will adapt gradually that it's normal to pay for digital products not one, two bucks but uh, something more significant. What was very gradual process like Netflix, like fast growing prices, uh, like gradually gradually for 20 years. And uh, people were getting that as a habit of the worry gradually. But if you took just like a situation 2015, what business models exist for apps that time or in app like several bucks per year, I don't know or advertising or maybe some basic E commerce. But then even with uh, audience like Flonow, you would never be able to conclude that this business would have 300 million revenue. And uh, it was absolutely kind of a black swan that it emerged. Uh and it happens all the time and it means that like long term it's absolutely, absolutely impossible to predict what will happen. And because of that uh, I'm really skeptical about uh, tendency of investors to make analysis uh, of financial models and business plans of early stage startups because even in one year it will be very different. Uh, my personal belief is that there is just too significant element in really significant to understand would this uh, project have success or not. Is team and market and nothing else. Everything else doesn't matter.
Speaker B: Actually this App Store example, I remember this year, I think it was April, uh you were speaking London, one of the app events. I was also listening to this and you mentioned this App Store growth and subscription growth kind of flow took a uh, you know, uh, rode that wave. I'm just thinking 10 years ago probably there were other companies like Flow who didn't catch it. Um, do you have anything that you recall like how do you react to these changing trends? Do you meet with your co founders leadership team every half a year to review what are these trends. How do you not miss those changes?
Speaker A: I remember that uh, we had huge argument uh inside the team almost right when we got idea to start subscription business model in flow in 2017. Because the time the idea that products like Flow might have subscription was really outlandish. It's like what is supernatural nowadays? Was really wild idea at that time like to monetize products like Flow by subscription. And uh, uh it means that even in our case uh, to accept change and adapt to this changing environment, it was not a smooth uh, transition. Maybe uh, um, it was good that uh ultimately we made right decisions but I can't say that we were kind of um, almost like a Prophets who were seen through time and that oh, it's coming and it would be like a first. No, no. We had all the kind this inertia of old thinking. And it's really difficult to change rails from old thinking to new thinking. And something that's very evident now that time was very wild.
Speaker B: So it's normal to be like uh. Not scared and cautious.
Speaker A: If you're taking people, uh. They always think that future uh is just prologation of the past. And people always are very scared by change. And people naturally very conservative and they are people always trying to find reasons not to make change. And then I'm the same. Like all significant changes in my life, uh like starting of first companies, like changing of industry from book publishing, uh to uh. Tf like changing of markets from uh, Eastern Europe to the West. Uh. All these big changes happened not because uh. I was smart and uh. Strategic and was thinking about uh. Everything. Uh but because some calamity happened which forced us to make this change. And for example, uh. I started my first company because it was crisis of 2008. And in publishing house uh. I worked for like just kind of just stopped making books. And uh. Uh. I was not fired, but I didn't have a. And it was very boring. Uh, and then we started flow because uh. For very significant m. Extent uh, or I would say not started but focused on it because we started it anyway. But we had many other projects but before fully focused and committed to flow in 2015 because uh. Uh. Crisis in uh Belarus and Russia, which was provoked by Crimea, uh made our uh. Projects um. With a key market in these regions unprofitable and we had to make change and uh. Quite abrupt change and the same transition to the west again. Maybe we um. But have been procrastinating in uh. Um change because we had almost all people in Belarus up to 2020 and then 2022. But then um. Belusian instability happened and then war happened and it forced us uh to relocate all people. But ultimately it was super painful, super traumatic and super difficult experience for all people, including me personally. Because we had to change all our life in one day. And just. We just like we left everything we had. And uh. Many of us including me, we have never came back. We just like left everything we had for 30, 40 years and we have never came back. Uh but ultimately for the company it was right uh decision. And ultimately uh. It would have been absolutely impossible to make flow unicorn without this uh. Transition having uh team in Belarus. And it was absolutely right unnecessary transition. But this transition was forced and uh, we were procrastinating to make this painful decision. But we were forced by these events to do that. And because of that again we are the same as uh, almost all people and force, uh, we need to get to accept uh, like difficult choice. This difficult choice should be between something difficult and terrible, but between something like a normal and difficult. Because when you have normal and normal and without prospect, but difficult with prospects, most of people will rationalize and make decision towards something uh, what's normal, easy, always. Brain is very good in finding reasons why not to take uh, any difficult or painful choice. And you always have reasons not to do that.
Speaker B: So yeah, without geopolitical situation, Flow would probably be growing where it is staying put, maybe opening an office here and there in different countries. But. But such a drastic change you think wouldn't be possible, right?
Speaker A: It would be super difficult because um, um our life in Belarus was super comfortable. Uh, because like salaries in etiquette in comparison with other salaries, super huge. Taxes are super low. The quality of life was much higher than we have in London for example. Much, much higher, much higher. And because of that of course it would be super difficult uh, to convince people to uh.
Speaker B: Exactly how do you tell them? Yeah, yeah.
Speaker A: And it will be difficult even m to convince uh, myself to move because my life was like. It's like if you measure quality of life by quality of uh, house folks. Like my life in Duluth was much better than my life in London.
Speaker B: Um, yeah. When we talk about changes. And now of course AI is also changing industry so much. And I'm just thinking probably all products have to be very eyes open and things also how people interact with products. Just yesterday I was testing uh, like I uh, am also in health and fitness, testing the app. I was asking my AI agent to interact with our customer service to get some things done. And this basically AI was chatting with AI and it's completely changing how people actually will work with the products. Okay. At the moment it's a niche thing in six months, not anymore. How does flow look at uh, AI and um, maybe from a perspective of consumer behavior and patterns, uh, what will change? What do you think in next year?
Speaker A: We always have tried to adapt to changing behavior of consumers. And it's very interesting that um, because flow has uh, had 10 years of development, uh, uh, we have seen how behavior was changing because when we started Flow, people were reading long articles. Then we observed that uh, people were stopping reading long articles and we moved uh, to more video content. Then we moved to stories, uh and in Instagram. And it was quite a bold move to launch stories in the flow but very successful move ultimately. Then uh, we start to see that people uh don't read so much even uh in stories and they should be more visual. And now we see this new habit that uh people want to get answers uh and uh almost kind of like a chatgpt habit. And products they should adapt to these habits. Uh products like for their. They can't form habits but definitely they should adapt to habits. Uh but in case of consumer facing products I would say that uh the biggest difficulty is not uh tech difficulty. It means it's not like to make LLM, uh we should uh uh talk um medically creditable with users uh what's the challenge. But um it's pretty straightforward challenge. The biggest difficulty is how, how to make product that people would really interact. And it's like 99% of problem not the CF itself. And usually uh it requires much of experimentation to find interface and to find uh uh forms which would be engaging for users. And uh, we experimented a lot with that uh using different uh approaches like you might call gamification. But ultimately I see like bigger issues than uh, like AI itself like to find form like because what we definitely know, we definitely know that most of people they don't have tendency to ask questions and it means that AI should uh start conversation or should provide uh insight proactively. We know that people don't like uh to read long text and because of that it should be kind of small m snaps of uh uh text and better visual information. And uh also we know that uh people like when it's something very entertaining and it's kind of like. And uh again it's like more about interface and form rather than about AI
Speaker B: um um with the roots in this region when we talk to companies from Baltics and Eastern uh Europe overall you always see that companies are able to kind of do more uh with less. The rounds are smaller than in US or in UK and the founders still figure out ways to grow in like a scrappy way. Kind of any principles that your company still has that would say not frugality or not trying to save money but just to try to be very like scrappy and practical about things that you still try to observe in your team or now whenever you need to spend money you just write uh a check and um solve the problem.
Speaker A: It's like one significant principle about any organization. An organization will spend all Money it has plus at least 20% and it doesn't matter how much money this organization has. If like this organization has as much money as Google or like and organization would become like uh, immensely huge. And uh, it's just like, it's like almost kind of like just blood because uh managers need people when they getting people. These people they're making more job, they need more coordinations. It means like they need more managers, more managers needs more people. And uh, it never ends. And there is like a, it's a very natural incentive of managers to want and ask for more projects for more people because uh, by that they get in higher titles and bigger salaries and the organization is inevitably any organization is just getting blotted. And uh, uh the single way to control that really is to limit resources uh even if you have it because uh uh like it's a kind of like you may like have like very tight controls everything but there are always like hundreds of very very compelling reasons why we always need more people, why we always need more resources, why we always need more money. And all those reasons are super compelling. But uh, ultimately kind of like it's just like it's to make organization efficient is necessary to limit resources uh and uh, to understand a moment when uh, it's like organization can really reach the total potential of scrappiness. And for example to make managers more efficient with hiring and privatization the best is just uh, stop growing hit count. But uh, be very flexible with the internal restructuring and then organization itself will find a way to optimize resources because it's impossible to hire more people. Uh and it's uh like a general approach. And of course leadership should send right signals because if a CEO fly in private and has Mercedes and it will not be too compelling from such CEO to ask people to be scrappy it would be ingenious and people would do the very opposite.
Speaker B: It's actually very good point to touch about the headcount as well. Like I've seen this also like for example when you grow and if you have some, some money to invest back it's so you can always hire right you can always justify that we need this one extra person because obviously it's going to make her better.
Speaker A: And when you meet like one additional hire it always means that you automatically need more people because and that person needs each manager handle maybe I don't know between 5 to 10 reports. And by adding one person it means that you need at least 0 to 1 um unit of linear manager and 01 unit uh of uh top manager. And it's kind of just like in the big organizations the bigger this effect it means it's not just like you just, just adding one people, you're adding complexity. And then uh, uh it's moment when uh. Because each manager may own maybe between five to ten other managers, uh there's uh just mathematically always a moment when you need to add layer. And when you add layer everything slows down like 30%. It means this layering uh is the worst. What's the worst? In these big organizations it's like that you inevitably build, should build layers. And when you build layers like there's just like information starts going like very slowly back and forth. Everything is distorted and uh, organization is getting much slower. I would say that additional layer it's like minus 30% of efficiency just automatically.
Speaker B: Yeah, very good point. But how do you do it? You basically tell your team that look this year headcount fixed or only grows by. We keep it very controlled.
Speaker A: Yeah, no we are not growing hit count at all. But uh uh uh we are very flexible about internal structure and we are changing it all the time based on uh the current needs of the organization. And I'm not planning to grow uh count next year as well. Flow grows well but I think uh we still have potential of efficiency and uh, especially when uh evolution is happening and uh, I don't think that we should grow hit count at least next two years.
Speaker B: Yeah, very much makes sense. Um in terms of when you need to hire, maybe you're replacing or maybe you are hiring a new role. Are there any kind of uh questions? Obviously depends on the role. But are there any kind of favorite interview questions? You have to understand the person that you're hiring, whether the person has the depths you're looking for. Any kind of favorite things to ask ask.
Speaker A: Well honestly I'm quite skeptical about predictive power of interviews. I think interview is a way to say no but it's not a way to say yes because like interview is just like saying definitely not much. It's not much. But interviews uh has super bad predictive power to say yes. And I rely much more on uh test projects uh some like probation work and etc like to see like how this person really work rather than how this person speak. And uh it more efficient in our case and in case of law. Well at least uh with uh key rules uh we always have like test projects we pay for them uh using fair market layer rate. Uh and it's uh like a cost like Maybe we spend 100,000 per year like such task works uh but it's much more efficient way to make such assessment. And also we have a system that uh decision about hiring can't be made made uh by like a single person that it's always like at least four or five interviewers and they don't see like a cars of each other like like not to be influenced for example by people high in hierarchy. And it also helps like to avoid for example uh some like like I just have chemistry with this person. I don't know. It's my like reality friend et cetera. And to do it more objectively. But overall uh M with the best systems I would say based on uh statistics of even bigger companies like Google M accuracy of Kaharin can be higher than let's say 70% and in uh case of top management higher than 50%. And it means that much uh more significant is uh to be really strict and careful in assessment of uh probation period and correct mistakes at the end of probation rather than uh to try and make an interview process uh perfect. Because it can't be perfect. Just statistical has super bad predictive uh um power of um. I think the best interviewers in the world they have um again statistic from Google and they have uh dozens of thousand people who interview other people. They have accuracy of hiring at least like 70, 80% the best interviewers in the world. Of course like probably we are not the best interviewers in the world and our accuracy will be lower.
Speaker B: Essentially it's same as with stock trading that these experiments where monkeys pick stocks are almost uh the same successes uh as professional traders that there's still a lot of uh uncertainty that But I guess people overestimate. They think like I know this I feel deep, I feel people but it's always probably a lesson that you should be very modest about your.
Speaker A: Yeah and it's also difficult to predict because many things are irrational because different organizations they have different cultures and person who had a good match with one organization maybe might not have a good match with another organization. And again each team has own culture. Not like a big culture organization but each team has own culture. And again it's going to be maybe like know like a right chemistry with the manager or like a team or maybe like some mistakes is important like many M. Or like sometimes people may just get like a family issues and uh get like very distracted and because of that failed probation like like there are like thousands of reasons why it may be not successful and uh they can't be predicted by interview and uh the most powerful two powerful tools is a test work and then uh um Carefully done probation assessment. Of course to make probation well, probation assessment well is necessary to have like a right uh plan for first 90 or like 180 days. We have 90 days for individual contributors and 180 days for managers. Of course without right plan uh it would be very work. Uh but uh. It's significant uh to interview itself not so much.
Speaker B: Good point. Uh, to conclude maybe the answer of the question. Of course you mentioned different organization, different people succeed. But in your experience from people you have hired, any kind of similarities that you look back and say the best performance always had this or that. Uh something that you could see early on and they turned out to be really really good performers in your team.
Speaker A: I would call it ownership mentality. It means that people then genuinely passionate about uh what they're doing. And people who fail, they're just indifferent. It means that they all kind of almost kind of like work for salary, like work for hours and they indifferent to uh. Emotionally indifferent to work they are doing. And uh. I'm always trying to see the signals that uh people say have this uh ownership uh mentality. And uh. Uh. It's possible to conclude like based on even for some extent on interviews by asking questions about uh previous uh projects about kind of like uh. And what, what like for example provide for me like several examples when you got like a problems with your projects and how these problems were solved and then you made like see how this person is talking about this problems. Uh for example manager is like trying to send uh responsibility towards like has just a bad manager. It's like it's a bad sign. If I'm m saying oh we got this problem and then I did that that and that that it's a good sign. This ownership mentality is the most uh significant M. And uh. Probably just like energy because sometimes people like uh naturally they have or they don't have energy because so just of course I'm naturally working mostly with managers but uh um with managers they should have energy. Like if manager doesn't have energy you should usually kind of like its team would not follow and the old team would have like a low energy and uh, uh would not be kind of proactive enough.
Speaker B: Very good insights actually. Thanks for sharing. Um, I think we had a tremendous conversation. A lot of value and I hope everyone sort of also can learn a few things. Definitely they can. Um, thank you once more Dmitry for sharing your insights with us and our audience and uh. Was a really great conversation.
Speaker A: Thank you. Thank you for inviting.
Speaker B: Thank you guys to the listeners. Thank you. Bye um, if you like this show, remember to leave us a rating or review. It helps other people to discover the pursuit of scrappiness.
Other episodes covering the same guests and topics, from across The B2B Podcast Index.