Category: 3. Business

WASHINGTON — The Commodity Futures Trading Commission today announced the U.S. District Court for the Central District of California entered a final judgement against Safeguard Metals LLC and Jeffrey Ikahn (aka Jeffrey Santulan and Jeffrey Hill) ordering them to pay $25.6 million in restitution to victims and a $25.6 million civil monetary penalty for operating a nationwide, precious metals fraud.

The CFTC obtained the order Sept. 30 in coordination with 30 state securities regulatory agencies that are members of the North American Securities Administrators Association.

“This resolution shows the impact the CFTC and state regulatory agencies have when joining forces to combat fraud and is a testament to the hard work of staff at the CFTC and our state regulator co-plaintiffs,” said Charles Marvine, Acting Chief of the Division of Enforcement’s Retail Fraud and General Enforcement Task Force. 

Previously, the court entered a consent order that found the defendants liable for running a nationwide fraudulent scheme that took in approximately $68 million from more than 450 customers – most of them elderly or retirement-aged. According to the order, the defendants lured customers with false claims about the risk of their traditional retirement investments and then sold them silver coins and other precious metals at inflated prices by misrepresenting their price markups.  These undisclosed markups caused customers substantial and immediate losses. The consent order also barred the defendants from future violations of the Commodity Exchange Act and CFTC regulations, as well as various state laws and regulations as charged in the complaint. It further prohibited them from trading or registering with the CFTC and the participating states. [See CFTC Press Release No. 8812-23].

These rulings resolve the CFTC and state regulators’ February 2022 enforcement action. [See CFTC Press Release No. 8489-22].

In a separate case brought by the Securities Exchange Commission, the court ordered the defendants to pay $25.6 million in disgorgement and a $25.6 million civil monetary penalty SEC v. Safeguard Metals, Case No. 2:22-cv-00693 JFW (C.D. Cal. May 2, 2025). Amounts paid in either the SEC or CFTC actions will be offset by the amounts owed in the other. 

Orders requiring repayment to victims may not always result in the recovery of any or all funds, as wrongdoers may lack sufficient assets. The agency will continue to fight vigorously to protect customers and hold wrongdoers accountable.

The CFTC and NASAA thank the SEC for its help.

The following NASAA state regulatory agencies were CFTC’s co-plaintiffs in this action and the CFTC thanks them for their assistance: Alabama Securities Commission; Arizona Corporation Commission; Arkansas Securities Department; California Department of Financial Protection & Innovation; State of Connecticut Department of Banking; State of Florida, Office of Financial Regulation; State of Hawaii, Department of Commerce and Consumer Affairs; Idaho Department of Finance; Office of the Secretary of State, Illinois Securities Department; Indiana Securities Division; Iowa Insurance Commissioner Douglas M. Ommen; Kentucky Department of Financial Institutions; State of Maryland Ex Rel the Maryland Securities Commissioner; Attorney General Dana Nessel on Behalf of the People of the State of Michigan; Mississippi Secretary of State; Missouri Commissioner of Securities; Nebraska Department of Banking & Finance; Securities Division New Mexico Regulation and Licensing Department; The People of the State of New York by Letitia James, Attorney General of the State of New York; North Carolina Department of the Secretary of State; Ohio Department of Commerce, Division of Securities; Oklahoma Department of Securities; State of Oregon Department of Consumer and Business Services and Attorney General Dan Rayfield; South Carolina Attorney General Alan Wilson; South Dakota Department of Labor & Regulation; Commissioner of the Tennessee Securities Department of Commerce and Insurance; Utah Division of Securities; Vermont Department of Financial Regulation; Washington State Department of Financial Institutions; and the State of Wisconsin.

The CFTC DOE staff responsible for this action are Steve Turley, Christopher Reed, and Charles Marvine, along with former staff members Jeff Le Riche, Clemon Ashley, and Paul Fluke. 

CFTC’s Precious Metals Customer Fraud Advisory

The CFTC has issued several customer-protection fraud advisories, including the Precious Metals Fraud Advisory, which alerts customers to precious metals fraud and lists simple ways to spot precious metals scams.

Report suspicious activities or information, such as possible violations of commodity trading laws to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online or contact the Whistleblower Office. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected, paid from the Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the CEA.
 

ADI IGNATIUS:  I’m Adi Ignatius, and this is the HBR IdeaCast.

For the next several weeks, we’re bringing you a view from the C-suite, interviews with leading CEOs across industries and geographies recorded during our recent Future of Business event. Today we’re getting inside the mind of Walmart CEO Doug McMillon, who just announced that he’ll be stepping down in a couple of months as the head of the retail giant. Walmart is the world’s largest company by revenue, its biggest private employer, and boasts 255 million customer visits per week. As goes Walmart, so goes the economy.

For his part, Doug started working in Walmart as an hourly associate in 1984, becoming its CEO in 2014. We spoke with him before he announced his retirement, focusing on how Walmart built its digital business to take competitive, how it has dealt with issues of tariffs, talent and worker pay, and the ways it has adapted its supply chain to appeal not just to shareholders, but to all stakeholders. Here’s our conversation.

Doug, thank you very much for joining us.

DOUG MCMILLON: Hey, Adi. Great to see you.

ADI IGNATIUS: So, let’s just jump right in. It’s never easy running a big company. With AI poised to disrupt, with recurring waves of geopolitical uncertainty, what does it take to lead consistently in an environment like this?

DOUG MCMILLON: I think remembering who you are is important, but also being open to change. And when I think about what AI presents, the first thing that goes through my mind is the growth opportunity. I think right after generative AI captured everyone’s attention, we were pretty balanced in terms of our mindset between offense and defense. And I think that shifted over time to being offensive in our orientation and growth oriented. We’ll talk, I’m sure, at some point about agentic AI, but there’s a great opportunity for us to change how people shop and be able to save them even more time, things like that. So, we’re excited about the opportunity that AI presents. And as it relates to geopolitical issues and things like that, there’s been turbulence now for quite a few years, and I think we’ve just learned how to operate in that environment.

ADI IGNATIUS: Well, let’s talk about AI. I mean, how do you think about it? I mean, one is tempted to think, “All right, so AI offers these tremendous efficiencies, possibly at the expense of human employment.” I mean, what is the core kind of AI thinking at Walmart at this point?

DOUG MCMILLON: Well, again, growth is the first thing that I think of. And the e-commerce experience hasn’t changed that much since it really started back in the ’90s with a search bar and a laundry list. And now we have an opportunity to create an e-commerce experience that’s multimedia, more personalized, contextual, really change the digital side of the equation, and we’re really focused on that.

As it relates to changes to employment, I really do think that every job we’ve got is going to change in some way, whether it’s getting the shopping carts off the parking lot or it’s the way our technologists work or certainly the way leadership roles change. I can imagine how AI will change every one of those jobs. And it will create new jobs. We’re starting to see some of that. All of those new jobs we’ve seen already are AI-oriented in some way. It will eliminate some tasks and eliminate some roles. And what we want to do is equip everybody to be able to make the most of the new tools that are available, learn, adapt, add value, drive growth, and still be a really large employer years from now. That’s the goal that we’re working towards. So we’ve done things like give everybody a ChatGPT license and give everyone other tools so that they can learn and grow and go through this process with us as a company.

ADI IGNATIUS: You’re heading a company that, from its founding, has always been very purpose-driven, the founding family. And you’ve articulated that as well since you’ve taken over as CEO. That must evolve, though, right? I mean, has the core purpose or maybe the auxiliary purposes kind of shifted over time and since you’ve become CEO?

DOUG MCMILLON: When Sam Walton accepted the Presidential Medal of Freedom shortly before he passed away back in 1992, he articulated a purpose for the company, as far as I know, the first time that he had articulated it. And it was basically, “We’ll show people what it’s like around the world to save money and have a better life, to live a better lifestyle.” And so, those words have become “Save Money. Live better.” We wake up every day trying to create value for all of our customers and members, but that live-better part of the equation, to your point, has changed over time.

If you look at what happened in the mid-2000s with the work we did, led by Lee Scott, to become a more sustainable company, is just one example of how the mandate broadened. These days, we obviously think about not only saving people money but saving people time, strengthening communities, strengthening the planet, playing a role in healthcare. I think the part that has changed is a more specific view of what live better means and how we can work as associates to improve lives.

ADI IGNATIUS: Yeah. And I always find it interesting to think about a very purpose-driven company with very intense profit pressures. And you must feel… I mean, I’m sure you’d love the answer to be, “We maximize both,” but there must be a push and pull. How difficult is it to keep purpose front and center when you have these short-term and longer-term profit pressures? How do you handle that balance?

DOUG MCMILLON: You know, it’s probably important to remind everyone that now a little over 10 years ago, we made a number of investments that were really sizable, all pretty much at the same time. We invested in higher wages. Eventually, that became investments in free education and things beyond just the wage rate. But we invested in our people, billions of dollars. We invested in lower prices, billions of dollars. We invested in e-commerce, billions of dollars. And we also invested to modernize our tech stack. As we did all of those things, we took the profitability of the company down. Our operating income percentage peaked somewhere north of 8%. Sam Walton once famously danced the hula on Wall Street because the management team back then hit a target of 8% or higher on operating income. And when I moved into this role, the operating income percentage was about 6%. With all those investments that I just mentioned, we went all the way down to just a little north of 4%.

So, a pretty dramatic investment that our shareholders paid for so that we could change the company and get positioned for the future. It was really pretty cool to watch the Walton family and our board of directors work through those decisions with the management team to lay out those choices and to make them and to reduce the profitability of the company so that we could position the company for the future and fulfill our purpose at the same time. We didn’t ask our customers to pay for it. We didn’t ask anybody else to pay for it. Of course, it’s really been the shareholders that paid for it.

And then, if you look at what’s happened as of late, because our business model has changed, e-commerce led to membership opportunity and advertising opportunity, other forms of income, we’ve been able to turn that operating income percentage back up while keeping prices low and continuing to invest in wages. So, that played out over a period of quite a few years and, I think, has caused us to be able to live our purpose and, at the same time, transform the company.

ADI IGNATIUS: If anything in this conversation inspires you to do a hula, feel free.

DOUG MCMILLON: That won’t happen.

ADI IGNATIUS: Well, we’ll see. We’ll see. We’re just getting started.

DOUG MCMILLON: Sam took care of that part.

ADI IGNATIUS: So, you’ve been through a number of shocks recently, right? We all have been. And the COVID pandemic is one of them, and resulting supply chain shocks. I think we’re all looking at companies like Walmart that import a lot, to what extent are tariffs changing your business, either overtly or not so overtly. Maybe talk about, since the tariffs thing is still kind of ongoing, start with, what lesson did you take guiding Walmart through pandemic, supply chain shocks before? What did you learn from that experience that’s maybe relevant now going forward?

DOUG MCMILLON: The thing that comes to the top of the list for me is just how capable our associates were. That includes our store associates, supply chain associates, Sam’s Club associates. It also includes our leaders. And what I experienced is just how good their judgment was and how fast they could make decisions.

Before the pandemic, I thought we were moving quicker. We want to move with speed, never really satisfied as it relates to that. But during the pandemic, everything just sped up so much and there were so many decisions to make about how to keep people safe, how to manage the supply chain, everything during that period of time, how to help with COVID testing, how to eventually help with immunizations.

And we picked up the cadence of the company. And as we were all operating on Zoom, my leadership team and I were too. And we went from what was a weekly, monthly cadence to a daily, weekly cadence. And we were together every morning surfacing choices that needed to be made. And we didn’t know, as others in the world didn’t, all the answers to those questions, immediately, of course. And so we just were forced to delegate more. “Hand this choice to this person or someone else in the company. Tomorrow, tell us what you decided and why you made that decision. But don’t wait to act.”

And wow they made a lot of really good decisions quickly. And then if I look at this most recent circumstance as it relates to tariffs, yet again, the team is showing that they can manage these quantity decisions, change the country of origin, move production where they should, make really good choices about timing and flow. And our inventory has been really well managed during the course of this year, which is so important as a retailer. If you get over-inventory, you end up with all these additional costs, markdowns and many other costs. If you have too little goods, you end up missing sales opportunities.

And the way they’ve managed through this whole ever-changing complex situation, too, has been impressive, just like it was during the pandemic. Here in the US, a little more than two-thirds of what we sell is made or grown here. Today we operate in 19 countries. But the vast, biggest part of our business, I should say, is in Walmart US. And that more-than-two-thirds number helps, but that other third that comes from around the world, including countries like China, Mexico, Canada, Vietnam, and some others, more than 100 countries, by the time we get through with it all, that fluid decision-making related to where those goods come from has been really well managed. And so, I’ve just learned to trust people even more than I did on the front side of it.

ADI IGNATIUS: Yeah. Well, I want to talk a little more about that because you have… Sometimes the tariffs are set and it’s clear, it’s 10%, it’s 50%, it’s 100%. Whatever it is, you know what it is and you have to eat that cost and pass it on or not. But then it’s the huge uncertainty, and it’s hard to tell, at least in Washington, are these negotiation tactics, are these real? It feels like the level of uncertainty, that must be so profound for you, right? Sourcing so much from all over the world. How do you handle that level of acute uncertainty in your planning? Because it’s uncertain, but then it’s going to get locked in down the road before long.

DOUG MCMILLON: Yeah. Well, let’s use the example of seasonal merchandise. Take yourself back to the spring and pretend that you’re the Halloween costume buyer for Walmart. How many costumes do you buy? Where do they come from? What price points do you think they’ll be at? Because by the time you receive them, which is when the tariff is assigned, it could be a different tariff number. So, we run what-ifs. “If the tariff is this amount, here’s what would probably happen with pricing.” Then, “How many units would we sell if we had that price? Where else could we source them from? What will people buy if they’re under inflationary pressure?”

We’ve learned, as we’ve gone through different things over the years, for example, that families prioritize their children and their pets before they prioritize the parents. And a mom usually puts herself last. And so, these trade-offs happen throughout the family. So, we were confident there would be trick-or-treating and children’s costumes would sell, but we might not sell as many adult costumes, for example. So, we just kind of all talked through those independent decisions and hold hands, pick a number, and make a decision. And as I mentioned earlier, so far, everyone’s done a really good job of generally getting things right.

ADI IGNATIUS: So, I feel like we’re all, all of us who are leading businesses in a period where transformation is perpetual. It’s not like, “Okay, we figure out the technology, we adapt it, and there you are.” How do you think about that, trying to make sure that transformation isn’t just kind of lurching from project to project but is an evolving and sustainable capability?

DOUG MCMILLON: You have to be willing to change so many things. I’m remembering, as you asked the question, what it was like to move into this role almost 12 years ago. We were running negative comps in our U.S. Supercenter business. We didn’t have much of an e-commerce business to speak of. We had some challenges in international where I had been.

And there were a lot of questions about strategy and transformation. And what the leadership team and I decided to do fairly early on was to explain to everyone what wouldn’t change. Because the list of things that needed to change was really long. And if you started talking through all that, it’d feel pretty overwhelming. So, what we said to everyone was, “We believe in this timeless purpose that our founder Sam Walton gave us. We will stay committed to helping people, helping people save money and live a better life. We believe we’ve got the right four core values, and we want our culture, our behaviors to match those four values. So the Walmart that you joined in terms of how people are treated and how we want you to lead, that’s going to stay consistent.”

By the way, part of those values include striving for excellence. So the bar is high, expectations are high, but we respect the individual. We act with integrity. We serve the customer. Those values are going to be consistent. Everything else is open for change. If customers don’t want stores in the future, we won’t have stores.

So, we started out really trying to play catch-up on e-commerce and build an e-commerce business. And that led to understanding, largely informed by spending time with startups and digital companies and other e-commerce companies, that we had to literally change the way we worked. We needed design as a capability. We needed product management. We needed some roles that technology companies had and have that we didn’t have in the company.

And we’d grown up running the business with operations, our store leadership team, and our merchants making a lot of the big decisions, when really we needed to change the way we thought and worked to put the customer and member in charge and work backwards to build the right tech. And that caused more organizational change than what I anticipated in the beginning. So it kind of put a punchline on your question. One of the things you have to do as a big company is to set yourself up to change all the time and not just once. So that means constant learning, constant mindset shifts, changes to structure, new capabilities, just a faster pace of organizational change so that you don’t fall behind again.

ADI IGNATIUS: Before we started this event today, we asked our audience what issues they wanted to hear most about. It was interesting, AI was… You wonder, “Is AI overhyped? Do people, are they tired of hearing it?” The answer is no. They really want insight. So, I’m going to actually go to a couple of audience questions, if it’s okay, that relate to AI. And one of them, and it picks up… You had said that you’re making AI, large language models available to your employees. But there’s a question from Lior Arussy, not sure from where. Whose responsibility is it to kind of adapt the new technology? Is it about, in your case, Walmart, investing in change management, making it happen, forcing it to happen? Or is it up to the employees to stay current and relevant? Do they have to kind of show that spark of interest in the new technology?

DOUG MCMILLON: Yeah, great question. It’s obviously both. If you’ve been inside Walmart, maybe just at the beginning of this year, for example, we were all learning a lot. One of the great things about being here is you have access to all the leaders that are responsible for building the frontier of artificial intelligence. So you get access to ask questions and learn. And we were all doing that, my direct reports and I. And when we got to the springtime, we realized we needed some additional resource. We knew top-down what we wanted to do. We wanted to reinvent how e-commerce works and how shopping works for customers. We wanted to equip our associates. We wanted to drive productivity, of course. We want to manage inventory better. We had these big objectives that we could click down on and explain. But so many of us were doing these things on top of all the other things we’d been doing before this wave of change came our way.

So we decided to create a new role that reports directly to me that we announced just maybe a couple months ago. And that role is one filled by Daniel Danker, who came to us from Instacart and had worked at Uber and Facebook before then. He’s a product management leader. He’s a really good thinker. He’s a problem solver. He’s native AI, lives in the Bay Area. And his responsibility includes speeding up our AI transformation. While we’re not a company that should be investing to build all this compute and invent the frontier, we do need to be the best in the world at application. And so, Daniel’s taking on that responsibility for how we turn this into an AI organization. Product management, design, tech prioritization, and the change management related to AI fit within his responsibility.

So, what we might’ve done years ago where we had all these tech stacks that we had picked up by buying companies around the world, Suresh Kumar and the team, the technologists, had done a great job in recent years of modernizing that tech stack, getting us on the road to have platforms that work everywhere. And now we can infuse that with AI in a way that causes more speed. So, from a top-down point of view, we know what our priorities are, and we’re resourcing that change and we’re driving it. And it’s what we spend most of our time talking about.

At the same time, we have 2.1 million associates around the world, and we are giving them all the tools that we can give them and being transparent about what we expect from them as it relates to their learning journey so that we do this together. And I expect that we’ll get some goodness from just great ideas. I was just reading a note this morning about an idea that one of our associates in a Sam’s Club has here in the U.S. that she would like to see us implement in our app. That kind of stuff will happen, and those top-down initiatives will be driven because we’ve resourced it differently. But again, it causes the company to have to work in a different way than we would have before. It’s just constant change.

ADI IGNATIUS: Here’s another audience question. This is from Gavin Dia. And it really follows up on what you were talking about. To what extent does Walmart plan to go beyond access to tools, some of these investments, bringing in some of these high-level people to kind of structured upskilling programs to prepare the workforce for this AI-integrated future?

DOUG MCMILLON: Yeah. We have something called Walmart Academies, where we teach curriculum to all of our associates. We’ll be using those academies to create, some kids already have, create specific programs so that people can learn and understand what capabilities that they need to be building. And we also provide something called Live Better U, where we pay for college tuition and books so that people can go get a degree if they wanted to get a degree.

And we’ve had some people move into technology roles. I’ve been running into people in the field that want to work in cybersecurity. We have been creating a lot of technicians in the company to fix all the equipment that we’re running, whether that’s the automated storage and retrieval systems that we are deploying in our distribution centers or the HVAC equipment we’ve got in stores. There’s more talent needed in the world to do that kind of work. And so we’ve been teaching people and certifying them on how to do that and, in some cases, have started to sell those services outside the company and have what may grow into a profit center.

ADI IGNATIUS: This is another question from an audience member, Ginger Tave, who notes that in the current issue of Harvard Business Review, we have an article about hands-on leadership. And as CEO of one of the largest corporations, I think it’s interesting that you have the Walmart employee tag on right now. What percent of time do you spend really on the front line? And how valuable is that? How relevant is that from your position?

DOUG MCMILLON: Yeah, it’s vital. I mean, if you know anything about our history, you know that Sam Walton was in the stores all the time and became a pilot to move around faster. And we’ve got airplanes and we’re flying out of Arkansas, if I use the US as an example, all the time to go visit stores and clubs on a surprise basis. On social media, you’ll see some of those visits and you’ll hear people say things to me like, “You should come see the real world.” 99% of the time, nobody knows we’re coming, including me. We just show up in a market. We show up in the first store, Sam’s Club, “How are things going?”

Go straight to our associates that are either helping people check out or picking orders for an e-commerce order or whatever. I love that part of the job. I’ve just lately been in Mexico, Canada, and China. And the conversations always lead to something. I always leave one of those visits with a list of to-dos that’s longer than the list that I leave, if anything, because the things I learn we can use to help the whole company.

ADI IGNATIUS: I would say Walmart gets praised for pursuing its environmental and social goals. It gets criticized for pursuing its environmental and social goals, depending on who’s commenting. We’re in a somewhat different environment in terms of the expectations of how companies think about engagement, again, in environmental and social issues. How do you navigate this? You’re going to get criticism from all sides, and I know you want to stick to your purpose. But the ground is shifting. How do you navigate this barrage?

DOUG MCMILLON: It hasn’t been that difficult because it’s just all super-practical. The work we were doing before was good for the P&L. It’s been good for the company, and it still is. So, when this whole conversation started back in the early 2000s, I would say we were going through a maturation process. Just like any startup does, you focus on your customers and you focused on your associates, your employees. And we were like that too. And we’d grown into this big size, opening one store at a time, but we still acted in some ways like an inexperienced company. And then Lee Scott and Rob Walton and others caused us to start thinking about the fact that we had this big footprint and there were things we could be doing that would make our business better and also strengthen the planet and strengthen communities.

And I tell this story all the time, but I remember leading Sam’s Club at the time, and I’m embarrassed to tell you, we were paying people to haul off the corrugate behind our Sam’s Clubs as brown boxes came to the back of the club and we baled them up. And as we were going through this learning journey and going to visit landfills and reading books and getting more informed about what we could do given the size of the company, we started realizing how much value there was in that corrugate. And we went from paying somebody to take it to charging them to take it away because it was worth so much. And my P&L benefited by $50 million in one year just because we learned something. We had spots like that, but that was 20 years ago, that we’ve continued to uncover and learn as we’ve grown.

So, whether I’m talking to a member of the media or I’m talking to someone that works in government, if we’re getting criticized for something, I just get really practical. Wouldn’t you expect Walmart to be eliminating its waste? Yes. It helps us save money so that we can lower prices. It’s a good business choice. So, all of this work that we’re doing, that lens of how does this strengthen the business and how does it help the customer or associates, that all matters. And sometimes it just boils down to time perspective. And I’m in a really good situation here because of the board that we’ve got and the Walton family’s investment where I can think more long term. And once you start thinking longer term, these things all just make a lot of sense.

ADI IGNATIUS: Doug, you and I first met shortly before you took on the CEO role, and we did an HBR interview soon after you took over. When you took over, I’m sure you had a vision of what you wanted to achieve. Now looking back, you’ve had to adapt, we need to be adaptable, what advice would you share with other leaders who are trying to lead major transformations? What maybe even is a trap that they should avoid as they try to push toward the future?

DOUG MCMILLON: Listen to your gut. The thing that most of us, I think, as we get to more time in role that we regret is not going faster. And while not everything was clear, back when you and I first met, I was really focused on how do you build an e-commerce business and turn it into an omni business leveraging the assets we had, including the stores. And that was a lot of work. But what I didn’t really understand is it was going to lead to this bigger change in the way the company worked, and figuring that out with our team here and just taking steps to try and get faster and to become more digital in nature.

We use a phrase around here, “We’re people-led and tech-powered.” We want to be great at deploying technology. We want to be the best at that. And we want to start with the humanity of this experience, whether it’s the customers we serve or the associates that we have. This is about people. And the tech is to serve people. So people-led, tech-powered. There were things that I just didn’t know back then. And once I did know them, I was sometimes too slow to act because I was worried about what someone thought or “Can the organization handle this much change?” And what I’ve learned is that people can handle it. And you need to go hard. You need to go fast. And when you know something’s right in your bones, you need to act on it and don’t delay too much.

ADI IGNATIUS: Yeah. So, I remember that when you were trying to become a digital powerhouse, you hosted an event in Davos and brought people in and basically said, “We’re really good at brick and mortar. We’re not good at digital. Help us out.” I mean, nobody goes to Davos and says, “We’re not good at something.” So I thought that was refreshing. But talk about it. Are you happy with where you are now in terms of digital commerce or-

DOUG MCMILLON: No. No, but remember, I’m compensated to be dissatisfied. So, that’s the nature of the work. We just have so much room to improve. I mean, we’ve made progress, and our customers are having a better experience. And Walmart is known today with our customers for being convenient at about the same intensity level as we are known for having low prices. So, that’s progress, and I don’t want to skip over that. Thank you to our associates for what’s been done. But we can just be so much better. And this opportunity to get AI right is a great one.

ADI IGNATIUS: And back to AI. So, here’s another audience question. This is from Hilda Ingham. And this is down to the lower level. People fear change. I mean, we know that. We feel like our companies have a secret sauce because we do things a certain way and then somebody’s trying to force change on us. How do you help people embrace change where it’s not just, “Okay, the board has figured this out. The C-suite has figured this out. Go”? How do you bring people along understanding that they fear change, some will adapt, some won’t? How do you handle that part of it?

DOUG MCMILLON: I joke with our folks here that “I love change, except when it relates to me. I don’t really want to change. I just want all of you to change.” I think being really honest about things is important, and being consistent is important. And let’s take artificial intelligence and the situation that we’re in right now. There’s so much we don’t know. Literally, you mentioned earlier this question about “How much of this is hype?” Well, the hype curve is real. We’ve seen that repeat itself over time. So, certainly there’s some investment here that’s happening that’s not going to work. But big picture, it feels like to me that a lot of this is going to work and we should have this mindset that it will work and be moving that direction to try and make that true so that our customers serve better.

And I think if you’re honest about it, you remind everybody what you’re trying to do. “What it is we’re trying to do is to serve customers and members better so that we grow, which creates more opportunity for everyone. So let’s lean into this together and let’s learn as we go.” So, the rhythm of company comes to mind. How often are you together? How often are you together in person? We really believe in being together in person, including with our associates and our store managers. We bring people together during the course of a year. We’ve got a calendar that works and is designed with purpose to cause us to build relationships, earn trust, shoot people straight, go through it together, remind them of the big picture of what we’re trying to accomplish. And then if something goes wrong or doesn’t work, just acknowledge that, put it to the side and move on to the next thing. But I don’t know how else to do it. I think you’ve got to be really straightforward, really honest. Give people what they need, encourage them, support them, but lean into change because the alternative is not very enjoyable.

ADI IGNATIUS: That was Doug McMillon, CEO of Walmart, speaking to me as part of the Future of Business event at Harvard Business Review. Check in next Thursday for another Future of Business episode.

If you found this episode helpful, share it with a colleague and be sure to subscribe and rate IdeaCast in Apple Podcasts, Spotify, or wherever you listen. If you want to help leaders move the world forward, please consider subscribing to Harvard Business Review. You’ll get access to the HBR mobile app, the weekly exclusive insider newsletter, and unlimited access to HBR online. Just head to hbr.org/subscribe.

And thanks to our team, senior producer Mary Dooe, audio product manager Ian Fox, and senior production specialist Rob Eckhardt. And thanks to you for listening to the HBR IdeaCast. We will be back with a new episode on Tuesday. I’m Adi Ignatius.

• Palisade offers ICE and hybrid powertrains and rugged new XRT PRO trim
• Prestigious annual awards determined by NACTOY jury comprised of 50 leading automotive journalists and reviewers from the U.S. and Canada representing all forms of media  

FOUNTAIN VALLEY, Calif., Nov. 20, 2025 /PRNewswire/ — Today, the 2026 Hyundai Palisade SUV was named as a finalist for the 2026 North American Utility of the Year award by the North American Car of the Year [NACTOY] jury. The three finalists in each category were announced at this year’s AutoMobility LA media days at the 2025 Los Angeles Auto Show in Los Angeles, Calif. The winners will be announced on January 14, 2026, at the opening of the Detroit Auto Show’s media days.

“Once again, these finalists show the wide range of choices that consumers have in the marketplace,” said NACTOY president, Jeff Gilbert. “Our jury of distinguished auto reporters has come up with a great selection of fantastic vehicles that truly reflect the best of the best.”

“As we are named a NACTOY finalist, we are exceptionally grateful,” stated Olabisi Boyle, senior vice president, product planning and mobility strategy, Hyundai Motor North America. “The team’s disciplined engineering and customer-first design are what truly travel. Palisade was built to serve families exceptionally well, while further strengthening the overall SUV lineup with an HEV option that opens the door for even more households. We appreciate that buyers consistently come back to the same sentiment: Palisade feels engineered for real life, Hyundai thought of everyone.”

All-new for 2026, the second-generation Palisade is a mid-size three-row family SUV boasting a sophisticated design, class-leading interior refinement, and a full complement of advanced driver assist systems. Available with the buyer’s choice of a naturally aspirated 3.5-liter gasoline V6 or a 2.5-liter turbocharged four-cylinder hybrid powertrain. Palisade’s first-ever hybrid offers up to 34 miles per gallon and over 600 miles of range. A new off-road-focused XRT PRO includes heightened ground clearance, all-terrain tires, and a model-exclusive electronic rear limited-slip differential.

Images, b-roll footage, press releases, and specifications for the 2026 Palisade can be found here.

NACTOY’s 2026 finalists were chosen from a preliminary list of 30 eligible models in three categories: Car, Truck, and Utility. After an initial round of juror evaluations, a round of voting was held, winnowing candidates down to the “Best of 2026” model list that was announced in September at the Center for Automotive Research’s Management Briefing Seminars event in Detroit. The “Best of 2026” list included six cars, five trucks and nineteen utility vehicles. Those vehicles were subjected to further evaluation, including at NACTOY’s annual Fall Drive in October, after which a second round of voting was held to arrive at these category finalists. 

The NACTOY awards are selected by a diverse jury of seasoned automotive journalists and reviewers from the United States and Canada. The awards are unique and highly prestigious because they are the consensus picks of jurors who represent dozens of different publications from all types of media including print, online, video, radio and television. Jurors base their evaluations on segment leadership, innovation, design, safety, handling, driver satisfaction, and value for the dollar, among other considerations.

Founded in 1994, these awards are the longest-running new-vehicle awards not associated with a individual publication. Because of the jurors’ independence, these awards are among the most respected and coveted in the industry. 

About North American Car, Truck, and Utility Vehicle of the Year™
The awards are intended to recognize the most outstanding new vehicles of the year. These vehicles are benchmarks in their segments based on factors including innovation, design, safety, handling, driver satisfaction, user experience and value. The organization gives out three awards. They are: “North American Car of the Year™,” “North American Truck of the Year™” and “North American Utility Vehicle of the Year™.” The awards are unique because they are given by an independent jury of automotive journalists from the United States and Canada instead of by a single publication, website, radio or television station. For more information about NACTOY and its history: http://northamericancaroftheyear.org.

Hyundai Motor America
Hyundai Motor America offers U.S. consumers a technology-rich lineup of cars, SUVs, and electrified vehicles, while supporting Hyundai Motor Company’s Progress for Humanity vision. Hyundai has significant operations in the U.S., including its North American headquarters in California, the Hyundai Motor Manufacturing Alabama assembly plant, the all-new Hyundai Motor Group Metaplant America and several cutting-edge R&D facilities. These operations, combined with those of Hyundai’s 850 independent dealers, contribute $20.1 billion annually and 190,000 jobs to the U.S. economy, according to a recent economic impact report. For more information, visit www.hyundainews.com.

Hyundai Motor America on Twitter | YouTube | Facebook | Instagram | LinkedIn | TikTok

SOURCE Hyundai Motor America

Introduction

Sasan Goodzari: We were born 40-some-odd years ago.

Brian Halligan: Right.

Sasan Goodzari: In the era of DOS. Right?

Brian Halligan: Which makes it even more impressive how well you guys have done.

Sasan Goodzari: And I would just say our success is when we were always in love with the customer problem and always willing to disrupt ourselves. And that’s so much easier said than done, by the way. So much easier said than done. But that’s why we’re still around.

Brian Halligan: Hey, welcome to the pod. Today we have Sasan, the CEO of Intuit. I’ve known and liked Sasan for a very long time, and I’ve known and liked Intuit for a very long time. They’re an interesting company that’s been around for many, many decades in a bit of a contrarian space, selling into very small businesses. And they’ve scaled to $180-billion market cap. So there’s a lot to learn from these guys, and I’m excited to dig in. I’ve actually met three different Intuit CEOs—and I work with tons of CEOs in my daily life. These are grownups. And I think there’s something to be learned from grownups. And we’re going to dig into some grown up topics. We dig into what does a grownup CEO operating system look like? What is Sasan’s hiring criteria which I did not expect and I think is pretty interesting. How do you build an indirect channel? Most of the QuickBooks revenue comes through an accounting channel that they built that’s fascinating. We talked about second acts and third acts and platforms—one of my favorite topics, and something they’re very, very good at. And when we talk about SMB, there are very few companies that have built with any scale in the SMB segment of the market. I hope you come back and we chat again after the interview, because I have a lot of takes on it. See you on the other side.

Main conversation

Brian Halligan: So Sasan, great to see you.

Sasan Goodzari: Very good to see you, man. It’s been a long time.

Brian Halligan: I know. I miss you.

Sasan Goodzari: You know, you look great.

Brian Halligan: You too, you too. You too. So I came on the campus today, and it reminded me of the first time I visited the Intuit campus, which was in 2010. HubSpot was four years old, and my co-founder and I were coming to visit Scott Cook and your CEO. And we were just sitting in the lobby and I just remember I wanted to throw up on myself, I was so nervous because we were a little tiny company. Really, I looked up to you. And we met with you guys, and we had a really good meeting, and you guys gave us a lot of insight. And at the end of the meeting, I was kind of taken with Brad Smith, your CEO, and I said, “Is there any chance you’d let me shadow you for a day?”

Sasan Goodzari: Ah, yeah.

Brian Halligan: And he said, “Sure. Come on back anytime.” Which I was delighted. And so about a month later, I came back, sat in the lobby, wanted to throw up on myself because I was so nervous.

Sasan Goodzari: [laughs]

Brian Halligan: And I shadowed Brad Smith, the legend. And it was a fascinating day. I learned a lot. He brought me to his Executive Leadership Committee meeting. All the executives in there. I saw how he ran it; it was really good, the founder was in there. Just went through the whole day with him, lunch, everything. The most interesting meeting was he had a performance review with someone.

Sasan Goodzari: And you were in the room?

Brian Halligan: And it was kind of a tough performance review.

Sasan Goodzari: Oh, wow!

Brian Halligan: And he’s like, “Nope, you’re gonna stay in the room.””

Brian Halligan: So I was in the room, and this guy, you know, he was one of those pluses and minuses. So that’s when I think back to Intuit. I learned so much from Brad and so much from you guys, and there’s so much Intuit inside of HubSpot. But we’re not here to talk about me, we’re here to talk about you. You’re becoming a legend running Intuit, doing so well. Tell me about when you first took the job. You took the job over from Brad. The building is named after Brad. What was that like? It’s 2018, Brad Smith has done a great job. He’s stepping down. They’re looking for a new CEO. There’s this—was it at all like the show Succession?

Sasan Goodzari: That’s a good one. So, you know, I did something very much like you. I’m just—I’m curious, and I’m always out learning from customers, from our product teams and external leaders. So one of the things I did, but I would just say more like an event, when I was announced, is I went out and talked to 15, 20 folks that if I were to name them you would know all of them.

And it was really to get advice. But the one person that comes to mind is—given your question was Steve Young. So quarterback of the 49ers, hall of famer. I went and met him.

Brian Halligan: That’s a legend.

Sasan Goodzari: He’s a legend. And the reason I went to meet him is he had to step in behind big shoes.

Brian Halligan: Joe Montana.

Sasan Goodzari: Joe Montana. It was the most unforgettable meeting, because he actually took me through the journey of when he became quarterback—I think it was when Joe Montana got hurt. And long story short, he said, “Listen, I was getting booed. People were like, ‘Bring Joe back,’ and we were having a tough time.” And he said, “I was on a plane ride back with someone famous,” that I won’t name here because he asked me not to ever name them. In essence, the person said, “Oh, you’re Steve Young.” And he said, “I was pouting and telling him how pissed off I was because I had taken a couple of days’ break.” And the person said, “You have been chosen as the quarterback of the San Francisco 49ers. You are not here to fill Joe Montana’s shoes, you are here to win. They picked you as the quarterback.” So he said, “Go be the best that you can be, and don’t try to follow Joe Montana.” And he said that conversation changed him.

Brian Halligan: Okay.

Sasan Goodzari: He said after that conversation, if you look at when he had the conversation and then his trajectory and then the 49ers’ trajectory, it completely changed.

Brian Halligan: Did someone have that conversation with you?

Sasan Goodzari: That’s the advice he gave me.

Brian Halligan: It does seem like there’s this—the ye olde CEO playbook seems to be changing. Like, Jensen Huang is doing all kinds of interesting things.

Sasan Goodzari: Yeah.

Brian Halligan: The whole founder mode thing. What are the non-obvious things that really work for you in the job that may not be part of the normal playbook?

Sasan Goodzari: Well, first of all, you’re right. I think there is no playbook, and it changes on a monthly basis. So if you try to stick to a playbook, you could be in trouble. The couple of things that have always kept me grounded is—the main theme is just curiosity. So I spend a lot of time with customers. They always keep me grounded in terms of what’s important, what are they trying to do with their life, what tools are they using, why are they using them? So that’s one. Two, I spend a lot of time also doing …

Brian Halligan: A lot of CEOs—if I just can push back a little bit. Every CEO does that these days.

Sasan Goodzari: Yes, you should do it. But I use that as one element of always being grounded. The second is I spend a lot of time with our frontline engineers to try to understand what’s getting in their way. Are there dependencies that slows them down? Because velocity is everything. So I’m close to customers, close to our front lines, because I think sitting in our shoes, a lot of stuff gets filtered. And so you have to be in touch with customers, you have to be in touch with frontline employees, and you have to be in touch with just your KPIs, like what’s working, what’s not. So one is just helicopter skills. And no matter what is going on, that’s one common thing that always grounds me.

Brian Halligan: I called it spelunking. Kind of you’re up here, and then way down and back up. Drove people crazy, by the way. But that’s kind of how I did it.

Sasan Goodzari: But by the way, I think every successful leader—you don’t have to be a CEO. Every successful leader has to be—has to have a method in which they operate. You have to be grounded in the details. You have to be close to the details, because if you just operate in the cloud and you don’t know what’s going on with employees, customers, products and your KPIs, then I don’t think you’re effective. So that’s—you asked about playbook.

Brian Halligan: Yeah.

Sasan Goodzari: That’s the common thing that always helps me be in love with the problem and how fast the world is moving, and not in love with what we’ve declared. I would say just second thing is I’m just big on principles and mechanisms. Like, what are the …

Brian Halligan: What do you mean by that?

Sasan Goodzari: Principles are like, for instance, we have a mechanism in which we run the company, but it’s really how I spend my time. And just even if I think about today, in one meeting we were talking about things that are coming around the corner and haven’t even been invented yet. And we’re contemplating what we should do, to doing a product review, to reviewing our dashboard, to meeting with a customer. So mechanisms are just about how do we manage short and long, how do we ensure that we’re really monitoring the things that we’ve said we’re going to do around product, around go-to-market. But also, mechanisms to invest time with thought partners that are very comfortable telling me, “Hey, I don’t think your strategy is right. I don’t think what you’re doing is right. Here’s what I think you should be doing.” So we have mechanisms in terms of how we run the company.

Brian Halligan: How long have those been around? Are those new or that’s, like, Intuit in the—you know, in the …

Sasan Goodzari: We changed it completely six years ago, but we’ve evolved them almost every year. There isn’t just one, but I would say the three or four that I would call out is we have a mechanism where the intent of the mechanism is question everything we’ve declared. And if today was day one, what would you do?

Brian Halligan: I love that.

Sasan Goodzari: And that just keeps us grounded. It’s the objective of the mechanism, so you don’t go into that discussion with the senior team protecting what you’re doing. You’re actually in there to blow up what you’re doing.

Brian Halligan: I love that.

Sasan Goodzari: The intent is outside-in, today’s day one you took over as CEO, as a leadership team, what would you do? That’s a very important mechanism.

Brian Halligan: And how often does that meeting or that context …?

Sasan Goodzari: That happens at least once a year. And I use the word “at least,” because situationally, if something is going on, we’ll impromptu have a conversation, which we’ve done twice in the last two years because of …

Brian Halligan: A lot going on.

Sasan Goodzari: A lot going on.

Brian Halligan: Yeah.

Sasan Goodzari: So that’s a very important one. The other one is when we actually review our deliverable. One of the—you talked about shadowing. I’m big on shadowing.

Brian Halligan: Oh, you are? Okay.

Sasan Goodzari: And so I had the opportunity to shadow Andy Jassy at Amazon when I was the CIO and he was running AWS. And there’s a number of things that I learned from Amazon. One of them that we copied is what’s called their “input goal system.” And their input goals are really around, like, what are the big products, go-to-market technology deliverables? So it’s the biggest decisions, investments that you’re making.

Brian Halligan: Yeah.

Sasan Goodzari: And with success metrics, that’s another mechanism I would call out that’s really changed clarity of the inputs that we’re focused on and how are we doing against them. And they expose where we have prioritization issues, resource allocation issues, talent issues.

Brian Halligan: I just found with HubSpot, just on the input thing, like, gravity pulls you towards lagging indicators, and trying to keep the company on leading indicators is just hard.

Sasan Goodzari: Hard. Which is why I love this mechanism.

Brian Halligan: Okay.

Sasan Goodzari: It’s not just a mechanism, it’s not just a meeting. It’s actually our entire process around input goals. I love that one. And the third one is we just—not only do I spend a lot of time with customers, but we have a sort of a customer experience review mechanism where we’re really talking about the experience, what’s working, what’s not. If I were to call out three—and there’s more than three mechanisms—those are the ones that I just think are—they’re game changing for us.

Brian Halligan: The third one I like, I called it the coal face. I wanted to get on the coal face and hear from the customers. So we had a customer at every company meeting. Once a month we had a staff meeting. We would have customer panels at the staff meeting, and the most lively ones were the customers that had canceled. That was always the best ones. And then we just had our board meeting yesterday and we have a customer panel at our board meeting. Those are terrific. So similar to HubSpot, trying to create mechanisms to keep the customer loud in our ear.

Sasan Goodzari: That’s right. And I love what you just said, which is, I think, the most powerful situations in our lives, right? Is when somebody is in a very authentic way challenging you.

Brian Halligan: Yeah.

Brian Halligan: You guys are the world champions of SMB. What’s working so well there? Why do so many startups get it wrong and end up going up into the enterprise? What is the magic to creating a company that really thrives in SMB? Because very few …

Sasan Goodzari: You know, Brian, first of all, I would say it’s a magic that Scott Cook created years ago that we’ve just been, over the years, building on. And I think the first element of the magic—this is going to sound real obvious, but they’re actually consumers. They behave like consumers, they act like consumers. The minute you put the word they’re a “business” in front of it, then you start thinking large business, large enterprise, and they behave and act like consumers. And so the obsessive focus that you have to have on, like, what problem can you solve for that business that doesn’t have the infrastructure that HubSpot and an Intuit has, but they’re two-, three-people shop. And, like, how do you help them with the basics? Like, get a customer, know which ones are profitable, help them get paid, cash flow, like, really narrow, narrow problems to solve, has really been the success of what Scott created and what we built over the years.

Brian Halligan: Is the follow-me-home thing that Scott invented, is that still a thing at Intuit?

Sasan Goodzari: Yeah, it is. And what we are coupling it with is a couple of things. One, there’s follow-me-homes and then there’s follow-me-homes.

Brian Halligan: Okay.

Sasan Goodzari: You can do a follow-me-home where you’re telling the customer, “Here’s what I’m doing,” and just you want confirmation bias. Then there’s follow-me-homes which is a real technique and you’re truly there to observe, learn and try to capture the a-has, the surprises. Because the big thing we’ve learned is customers don’t do what they say.

Brian Halligan: Yeah.

Sasan Goodzari: Right? And so really we have continued to invest in, like, the technique of a follow-me-home. It’s a thing, but it’s not the biggest thing.

Brian Halligan: Okay.

Sasan Goodzari: Because before data, before we were in the cloud, it was the thing when we were shipping CDs.

Brian Halligan: Yeah.

Sasan Goodzari: But now that’s coupled with data, right? And in the world of cloud, you have so much data so you can real time understand and see what’s the customer behavior, what are they doing, why do they get stuck there, why do they fall off? And so now we try to couple the two, but it is still a thing. Our focus is how do you do the thing the right way.

Brian Halligan: Now I spent a lot of time at Socii Capital. I spent a lot of time fundraising at HubSpot. Sand Hill Road is allergic to SMBs. Any business SMB, they’re allergic to it. Why do you think that is, and why do you think more companies haven’t pulled it off?

Sasan Goodzari: I think more companies are successful today serving businesses than they were before. You all are a great example of it.

Brian Halligan: Not a lot of examples of them, though.

Sasan Goodzari: There’s not too many. There’s not too many. I think it’s folks that really understand these are consumers, and really focus on, like, what’s a narrow problem that is big enough for the customer that you can go after and get started, and one that you actually can build advantage and one that they’re willing to pay for. That sounds—well, of course everybody needs to do that for any customer problem that they solve. But I think most people treat small businesses like they’re large enterprises, because they’re a business. And the reality is they are absolutely consumers that behave like consumers.

Brian Halligan: Okay. So I get follow-me-home in data on that side. Talk about just the go-to market, and how do you keep the CAC down, and how do you keep churn from not running away on these small businesses? Because the unit economics is, I think, something where so many companies fall down on on small businesses.

Sasan Goodzari: It’s hard.

Brian Halligan: I mean, how do you scale CAC and get so many customers? And then how do you control retention, like your gross retention, revenue retention?

Sasan Goodzari: It’s hard.

Brian Halligan: Of course. Yeah.

Sasan Goodzari: Let me just start there. It’s really, really hard.

Brian Halligan: On the CAC side.

Sasan Goodzari: I would say two big things: one is referral and our partners and accountants.

Brian Halligan: Yeah.

Sasan Goodzari: The better of a job that you do serving one business, the word of mouth is huge. So word of mouth is huge. And then accountants recommending it. And accountants only recommend things that they use, love and recommend. That’s how we’ve learned to keep the CAC down. Now what I would tell you is every time we’ve tried to go into a new country, CAC is very high.

Brian Halligan: Right.

Sasan Goodzari: For exactly that reason. You’re trying to get the first customer, get them to—you know, word of mouth to spread, then get an accountant to use it, and then get the accountant, and then you create that network effect. And we have found where we can create network effects. Like, we’ve done it in the US, in Canada, in UK, we can keep the CAC under control. But we don’t look at CAC holistically. We’ll look at it based on new product, new markets. [inaudible] toleration should be very different than, like, in the US where we have a big scale. But that’s—success is word of mouth and accountants.

Brian Halligan: Okay. I want—there’s a lot to unpack there. You do Super Bowl ads for QuickBooks and things like that. Does that stuff work?

Sasan Goodzari: Yeah. Yes.

Brian Halligan: How do you know?

Sasan Goodzari: Yes. Well, the …

Brian Halligan: Because we’ve talked about at HubSpot. It’s like we didn’t—I don’t know.

Sasan Goodzari: Yeah. First of all, we started doing them, and we primarily—you know, where we’ve been consistent is TurboTax.

Brian Halligan: Okay.

Brian Halligan: But you did do—you’ve done QuickBooks.

Sasan Goodzari: We have.

Brian Halligan: And I’m obsessed with QuickBooks, not TurboTax.

Sasan Goodzari: Yeah, of course. But just in terms of, like, Super Bowl ads, our consistency has been TurboTax. And it absolutely pays off. So we do a lot of work afterwards in terms of just what was the ROI? What were the number of eyeballs? What happened to our consideration? But ultimately conversion.

Brian Halligan: Yeah.

Sasan Goodzari: Did we get customers to convert? And can we associate it back causally to the Super Bowl? And I would tell you generally, it’s really been a great ROI. There’s been a couple of years here and there where it’s not met our expectations. But where do you get those kind of eyeballs?

Brian Halligan: Okay.

Sasan Goodzari: And it can go very wrong if you don’t do it right.

Brian Halligan: Just back on that for half a second. When it doesn’t go right, it’s because the actual ad itself just isn’t that good. Is it just very dependent on the quality of the ad you put out there?

Sasan Goodzari: It all comes down to the quality and the impact of the ad. Absolutely. Was it compelling to get your attention?

Brian Halligan: And do you make that decision? So lots of people are working on different, like, ideas for it. Are you the final decision?You look at seven and you pick it?

Sasan Goodzari: First of all, I have to tell you a story and then I’ll answer your question, because the story is about the Super Bowl ad. I remember vividly, it was a learning that I had when I worked for Brad. So the first Super Bowl ad we ran was when I was running TurboTax.

Brian Halligan: Was that your idea?

Sasan Goodzari: It was the team’s idea. No good idea is ever mine. It’s the team’s idea. And so Brad finds out that we’re running a Super Bowl ad. I never even thought to talk to Brad about, “Hey, we’re gonna run a Super bowl ad.” And so you know how kind Brad is. He called me and goes, “Sasan, I don’t need to approve the Super Bowl ad. But if you’re going to run a Super bowl ad, like, I need to be aware of it, because if it goes sideways …”

Brian Halligan: I don’t blame him, by the way.

Sasan Goodzari: The CEO of the board. So I shared that story with you. And he was so right, by the way. And so yes, I look at it, the team owns the creativity. I mean, the biggest thing I’ve learned about ads is everybody has an opinion, and most people, it’s an n of one, are wrong with their opinions. Whether they love it or not, you have to have a systematic way in which …

Brian Halligan: So you don’t pick it.

Sasan Goodzari: I don’t pick it. However, I absolutely review it before goes on air.

Brian Halligan: You get a vote.

Sasan Goodzari: I review everything before it goes on air. The big thing that I’m looking for beyond just how does it sit with me, which is the least important, but how it sits with me matters, is actually I’m looking for reputational risk.

Brian Halligan: Yeah.

Sasan Goodzari: Does this pass the bar of who we are as a company, the reputation we need to uphold? And so that’s really what I’m looking for in a Super Bowl ad. Of course I’ll give my opinion. “Meh, it’s not that great.” Or, “Wow, this is amazing.” But I’m really looking for the reputational element.

Brian Halligan: Okay. Sticking on CAC for just another second.

Sasan Goodzari: But you love CAC, don’t you?

Brian Halligan: I do. And it’s SMB. It’s how do you scale? 

Sasan Goodzari: I’m not gonna give you my secret.

Brian Halligan: Yes, you are. Is it yield NPS? Is that how you measure word of mouth? Like, how do you know if you’re getting the word of mouth or not? It’s hard to go in the shop and see if Mary’s telling Joe that they should use QuickBooks.

Sasan Goodzari: A hundred percent.

Brian Halligan: Is it ye olde NPS or is there something fancier?

Sasan Goodzari: There’s a few things that we look at. One, we’ll look at product recommendation scores. That’s a big input. But it’s just one input. The other we look at is services, because customers may give you one NPS, but if they’re using more and more of your services, then that’s a huge indication. So we’ll look at are they using payments? Are they using payroll?

Brian Halligan: You’re upselling.

Sasan Goodzari: Yeah. Are they using more and more of our services? So that’s one thing that we look for. So it’s NPS, it’s the number of services. And then we also have …

Brian Halligan: And is it gross retention? Just like, how many—the number of [inaudible]?

Sasan Goodzari: Yeah, gross retention. Also just retention dollars that we look at. So we look at three, four things. Because what we’ve learned—this is probably the most important thing that I would pass on to those that listen, is if you just look at one metric, like, are customers recommending—is your NPS high?

Brian Halligan: Yeah.

Sasan Goodzari: You can have a very high NPS and no new customer growth. So you have to really look at multiple metrics. Again, we look at what I just articulated, to really get a feel for are the things that we’re doing working or not?

Brian Halligan: Okay. Lots of founders ask me about HubSpot’s channel program, which we lifted a lot of it from you guys. [laughs] And you guys kind of took accountants and turned them into resellers and software companies. We took website designers and turned them into marketing agencies.

Sasan Goodzari: Yeah.

Brian Halligan: Talk to me about—you’re advising a founder. He’s growing, doing great, wants to do a channel program. Like, how do you do it? What works? What doesn’t work?

Sasan Goodzari: I mean, the first piece of advice I would give is what problem are you trying to solve with a channel partner? Before you jump into how do you become great at channel partners? You know, in our case, really, our biggest partner is our accountants.

Brian Halligan: Yeah.

Sasan Goodzari: And we don’t have a bunch of channel partners. We have developers that will build apps on our platforms. We have partners, but we don’t have …

Brian Halligan: That’s what I’m talking about, the accountant channel.

Sasan Goodzari: Yeah, the accountant channel. And really, so why the accountant channel, you know, for us? Well, accountants also serve consumers and businesses, right? They’re helping them with their taxes, their books, their accounting advice. And the larger you are as a business, you may have them take care of your audit, you may outsource your payroll to them, right? It depends on who you are and the size of your business.

And they’re very influential in what a business uses, in every dimension possible. And so that’s a great example of, like, well, that’s a very important partner. In fact, one of the big things that we’ve really evolved in the last years, accountants are very important partners. They’re not—it’s not just a channel, it’s not a reseller. Like, they’re our partner. And we have to really up our game in terms of how we co-develop with them, how we think about going to market with them together, how we take their input. It’s an area we had to significantly improve in the last year. And really, to answer your question, for us, it was about, well, they play a very critical role in ultimately what businesses use. So not only do we have to be great at the products we build for the end business, but we also have to have a relationship with them, and they have to use our stuff, love it, and then recommend it. And that’s the biggest advice I would give when you’re thinking about a channel partner. Like, why are you doing it? Are you doing it because you’re trying to manage your CAC? And if you’re doing that, well, what does that mean to your overall economics?

Brian Halligan: The reason people want to do it is they want to grow faster.

Sasan Goodzari: Yeah. And then the question, though, is you grow faster, but what’s the economics look like?

Brian Halligan: Yeah.

Sasan Goodzari: And you have to think about those things. But I would just—the advice I’d give is be very clear about the problem you’re trying to solve. And it’s okay to throw some stuff at the wall and see what works, but if you just start with “I need channel partners,” I think you may make the wrong choice.

Brian Halligan: Okay, let me run some things we’ve learned about channel partners through HubSpot by you. And I’m just curious if it’s kind of the same.

Sasan Goodzari: Okay, yeah.

Brian Halligan: Stuff that worked early was we took website designers, a dying business, and turned them into an agency. And we taught them about this new technology and idea called inbound marketing—which is ancient now. And we taught them how to run a proper agency. Like, we ran a little university. How do you bill, how do you charge, how do you run your agency? That worked. Another thing that really worked is once these agencies started signing up lots of customers, they needed software themselves, so we funded a development team to help them manage all their customers.

Sasan Goodzari: Manage their own firm.

Brian Halligan: Right. And that was a pretty good-sized investment. Third thing that really worked for us was—and this is a Napoleon thing, Napoleon said something like, “It’s amazing what a soldier will do for another colored ribbon on his shoulder.” And my goodness, we have found that, like, we have, like, 10 tiers of partners, and they will fight tooth and nail to get up a level. So measuring all that, getting that benefit program, that has really worked. One of the things that at least for us has worked is there’s two ways to buy HubSpot. You do it yourself, you buy directly from us. You figure it out, we teach you. Or is do it for me. And that’s where the agencies come in. And that has worked for us. Does any of that resonate for you? Is that kind of some of the playbook?

Sasan Goodzari: Almost all of it resonates, because I could take that same what you just said and replace it with accountants.

Brian Halligan: Right. That’s what I figured.

Sasan Goodzari: Same exact thing applies. But I would just ask you: What problem were you trying to solve when you first started engaging these agencies?

Brian Halligan: We wanted to grow faster. Just be very honest with you, we wanted to grow faster. And I’ll tell you a funny story about it. It’s, like, two, three years into HubSpot, and our product was awful. Just awful. And we had a few sales reps, and we had a lot of leads from agencies who were curious about inbound marketing. What’s this HubSpot thing? We had a lot of buzz. And I told the sales reps, just leave those leads. There’s a pile of them over there. Don’t touch them. You know, they sat in HubSpot. “Don’t touch them. We’re not going to do the channel program. The product’s not ready.” And they kept asking me. “No.” And we had the thing, that’s a little bit like Google’s, you know, 20 percent time where we say, “You can do whatever you want nights and weekends.” So this guy, Pete Caputa, a great but really irritating sales rep.

Sasan Goodzari: [laughs]

Brian Halligan: He started calling nights and weekends. And then, you know, there’s a distribution of sales reps—let’s say we had five of them. And, like, it was usually a bell curve. Ours was like—Pete Caputa was, like, 50 times more revenue than the rest of—like, maybe we ought to call on these agency partners. That’s how we started it.

Sasan Goodzari: Fascinating.

Brian Halligan: Yes.

Sasan Goodzari: You followed the money.

Brian Halligan: Yeah. The other thing that’s interesting about our agency partners, if we look at our retention numbers, gross and net, the agency customers have actually better economics than our direct customers.

Sasan Goodzari: Interesting.

Brian Halligan: They actually take better care of our customers than we do.

Sasan Goodzari: So many similarities. Like, for instance, when an accountant recommends a customer to use this, particularly like larger customers that we’re now pursuing, what we call mid-market, the cycle time of flows is 10 times faster.

Brian Halligan: Yeah.

Sasan Goodzari: And we end up offering more services, payments, payroll to that customer than otherwise. So there’s so many similarities.

Brian Halligan: Okay. You guys—founders always ask me, too, you add an app. That was your first act. And then you created a suite. Second act. And then you create a platform. Third act. How’d you do it? Give some advice to that founder. She’s got a hundred employees. She wants to go from first act to second act.

Sasan Goodzari: Yeah.

Brian Halligan: You guys have mastered that.

Sasan Goodzari: First of all, a big part of it, as you know, comes out of necessity, right? You’ve solved one problem—well, accounting. And ultimately, what you realize is the customer can be far more—you can deliver far more benefit and be far more sticky if then you actually help them with creating estimate and invoice and getting paid. And then the next thing is well, wow, they have employees, we need the …

Brian Halligan: Payroll.

Sasan Goodzari: Payroll, et cetera, et cetera.

Brian Halligan: And so how far into like the QuickBooks journey did you start building other stuff?

Sasan Goodzari: Well, early on. But remember …

Brian Halligan: You’ve been around since the dinosaur ages. [laughs]

Sasan Goodzari: Yes, thank you. You said it more directly than I was going to say it. Remember, we used to ship CDs. And so when we were shipping CDs and we had a desktop platform, we had payroll, we had payments on desktop years ago.

Brian Halligan: I see.

Sasan Goodzari: But then in order to shift from desktop to the cloud, that was a massive transformation for us as a company, because we weren’t born in the cloud.

Brian Halligan: It was a hard one, as I recall.

Sasan Goodzari: Very hard.

Brian Halligan: Bumpy.

Sasan Goodzari: Very hard. And by the way, we’ve shifted to the cloud, but we still have customers on desktop that we’re trying to motivate to come to online. In some cases, they’re not very happy with us because they want to remain on desktop. But the reason I share that with you is that journey from going to desktop to online took a lot out of the company. And so when we then shifted to the cloud, we were once again only an accounting platform.

Brian Halligan: Yeah.

Sasan Goodzari: Because we had to build everything in the cloud. And then we started building out the same journey: money solutions, payroll, et cetera. So the biggest advice I would give a founder is first of all, everybody has an anchor—ours was tax and accounting. Then the question is: What’s the next problem you can solve for that customer that’s right next to that anchor? And for us after accounting it was well, we serve service-based businesses. They need to create an estimate, an invoice and get paid. So let’s build that out. And then let’s build out payroll, which is very hard, right? Because state, local taxes, country rules, regulations. And so it’s really being very intentional about what’s next to your anchor ,and is that a big enough problem to solve? Can you build advantage by solving it, and then really nail that and then go to the next thing? And then at some point decide, do you partner on certain things until you build it? Do you acquire? That’s why we acquired, like, a credit karma. We wanted to do more than taxes. We could have replicated credit karma. It just would have taken us five-plus years because of the data and AI capabilities. So that’s the advice I would give.

Brian Halligan: Okay. And this is self serving, so we built marketing and then we said we’re going to go into sales. We were kind of forced into it because Salesforce.com was coming into marketing. And then we went to service and we’ve added—I think we have eight of these application areas. We always debated—we always knew there was going to be eight. Should we [inaudible] all seven new ones, or should we really almost finish the second one before we go to the third? How do you think about second versus third versus—like, when did you—so your first one was paying people, right? Payroll?

Sasan Goodzari: No. Well, it was actually creating estimates and invoices.

Brian Halligan: And then your third one’s payroll.

Sasan Goodzari: Yeah.

Brian Halligan: When did you go two, when did you go three? What was it like? Do you look at market share before you go, or would—like what …?

Sasan Goodzari: So it’s a great question, because I now want to go back to your first question you asked me, which is playbook of CEOs.

Brian Halligan: Yes.

Sasan Goodzari: Or playbook of any leader. I think that playbook is very different today.

Brian Halligan: Okay.

Sasan Goodzari: Than it was when you were looking at things serially to decide what’s next. I mean, today—you know this as well as I—with data and AI, what we’re trying to do is build a system of intelligence where it’s no longer about what workflow do I build, what app do I build? It’s actually about learning from the customer, and with our data and AI capabilities, solving that problem for the customer. That’s really important, because I don’t think things are as serial today than they were years ago.

Brian Halligan: You can also build much faster now.

Sasan Goodzari: You can build much faster. You don’t need to be a serial as long as by the way, you have some element of data and AI capability. So I just think that playbook is very, very different today than it was four or five years ago. But the thing that doesn’t change, in my view, is being clear what customer problem are you trying to solve? Is it a big enough problem for the customer? And can you solve it in a way where you’re advantaged versus others? And you know, it can be a big …

Brian Halligan: Okay, let me press on this a little bit. I’m going to put the clock back—I don’t know what year, call it 2020. Your back office, which is the canonical small business back office. And then we’re gonna buy Mailchimp for the front office. You remember that very well.

Sasan Goodzari: Yeah.

Brian Halligan: And that decision at that point in time was that because, man, we’ve got 90-friggin’ percent of the SMB back office, we better go in the front office? We’re almost done with these applications. Like, talk to me about that.

Sasan Goodzari: When we observed customers and their data, they had created—our customers had created 20 billion records within our QuickBooks platform trying to manage their customers within QuickBooks.

Brian Halligan: I see.

Sasan Goodzari: So they were creating shit.

Brian Halligan: They were using QuickBooks as their [inaudible].

Sasan Goodzari: And so what we realized is we have to solve this problem, because customers are manually creating a bunch of records because they don’t want to use multiple different platforms. And sort of back to can we build it? Well, of course. Is this where we want to put our internal capital? Do we have the know how, the domain expertise, or do you go buy it?

Brian Halligan: Yeah.

Sasan Goodzari: That’s what led to buying Mailchimp.

Brian Halligan: Okay, got it. You’ve made a lot of acquisitions—not a lot. You’ve made a bunch. Some have been real dogs and some have been terrific. We don’t have to name names. And, like, HubSpot, we’ve started to buy a bunch of companies. What advice would you give HubSpot and any CEO about, you know, the lemon, the ones that didn’t work versus work? Is there some best practices or some things you’ve learned about how to do them?

Sasan Goodzari: A hundred percent. Well, let’s just put to the side the foundational stuff, which is you’ve done your homework, there’s real clarity of strategically why you’re doing it, you understand the culture that you’re buying, you have a plan around that, you’ve done your dilig—like, let’s put all that to the side, because that’s really foundational. The two big things that we’ve learned is the pace of product integration and talent. Where we moved fast on integrating the platform, I would use TurboTax and Credit Karma. I mean, Credit Karma is our absolute home run. Where we move fast to know what problems we’re going to solve and integrate the product so we can get to benefit for customers, which by the way, translates into growth, and then where we needed to either upgrade talent or make talent changes, when we do those two things well, what we’ve seen is—and by the way, little acquisitions that nobody asks about. And then there’s the big ones, right? Credit Karma and Mailchimp.

Brian Halligan: Did you leave the CEOs in place and leave them independent, or did you put your people in?

Sasan Goodzari: It was situational. Like, in the case of Credit Karma.

Brian Halligan: Not in the playbook.

Sasan Goodzari: It’s situational. You know, Ken and I had a great relationship. He wanted to continue to be CEO, a very effective CEO. And he and his team were in place for quite some time.

Brian Halligan: Okay.

Sasan Goodzari: Whereas in the case of Mailchimp, Ben actually told us and told me from day one …

Brian Halligan: He wanted out. Yeah.

Sasan Goodzari: We gotta get—we gotta upgrade the leadership team.

Brian Halligan: So you put your folks in there.

Sasan Goodzari: That’s right. But back to your question. It’s product integration and it’s talent. Those make an enormous difference in terms of success. And making the tough decisions up front is far better than waiting.

Brian Halligan: Okay. I want to come back to something you talked about earlier. You guys have been around a while. You were desktop software, and then you had to transit. And I think it was like client server, and then went to SaaS and went to AI. We’re kind of on a big shift now. You were one of few companies that made that shift pretty well—Adobe and SAP, not a lot of companies made that shift from client software to SaaS. What’d you do right there? Did you wait too long? Were you too fast? Like, when you look at that shift back then. My sense was you moved to SaaS, actually kind of slow.

Sasan Goodzari: First of all, your premise of your question is a really important one, which is we were born 40-some odd years ago in the era of DOS.

Brian Halligan: [laughs] Which makes it even more impressive how well you guys have done.

Sasan Goodzari: And I would just say our success is when we were always in love with the customer problem, and always willing to disrupt ourselves. And that’s so much easier said than done, by the way. So much easier said than done. But that’s why we’re still around. And it’s also why we were absolutely slow to move to SaaS.

Brian Halligan: Okay.

Sasan Goodzari: We were probably four to five years too slow.

Brian Halligan: Because your customers weren’t asking for SaaS.

Sasan Goodzari: Customers weren’t asking for it. They absolutely didn’t want to move to the cloud. And as much as we are a culture of disruption, that’s a very hard move to make.

Brian Halligan: Did you rebuild from scratch?

Sasan Goodzari: In many cases, we had to rebuild from scratch. And their service—but remember, it’s even harder than the way you’re asking the question. You know, we were a desktop company. All of our data was siloed across TurboTax, across accounting, across—back then when we had payroll, payments, every—a bunch of siloed vertical stacks and data. It was a mess to move to the cloud. It wasn’t a mess the way we were running it, but to move to become SaaS, that is so hard to do. Which is why we were slow.

Brian Halligan: Was it more a technological problem or a business model problem? Because the business model has totally changed, too.

Sasan Goodzari: Culture, talent.

Brian Halligan: Interesting.

Sasan Goodzari: Business model. It’s everything.

Brian Halligan: Got it.

Sasan Goodzari: That’s why you can look back and go, “Well, we were slow.” But when you’re in it, what we had to do was …

Brian Halligan: Is you follow the customer home, they’re not going to tell you to make a platform shift.

Sasan Goodzari: Of course. But if you want to keep growing, you have to make the platform shift. So yes, we were slow, but the degree of difficulty was very high. I would say we were—on reverse, we were very early in AI.

Brian Halligan: I agree. Talk to me about that. What’s going on now for you on that ship, and why were—you were like, “We’re an AI company” in, like, 2009, a long time ago.

Sasan Goodzari: Yeah, yeah.

Brian Halligan: Way before it was cool. Were you too early?

Sasan Goodzari: I would tell you, looking back, we absolutely weren’t too early.

Brian Halligan: Were or were not?

Sasan Goodzari: Were not.

Brian Halligan: Okay.

Sasan Goodzari: Meaning I’m glad we declared …

Brian Halligan: But you did all this AI stuff. Did any of it really work in 2019?

Sasan Goodzari: Well, let me first tell you why, and then I’ll answer your question. We did it for very practical reasons. When I stepped into this role, because I had the privilege of being in all the businesses, serving all the different customers, there were sort of two big things that we put in place six and a half years ago. One was we have to solve more problems in tax and accounting, and we have to become a platform so we can play a meaningful role in the lives of consumers and businesses. That was one big decision. We didn’t know how, but that was one big strategic decision.

Brian Halligan: Yeah.

Sasan Goodzari: The other big strategic decision was data and AI. For very practical reasons. Because the biggest thing I learned being in all these businesses is consumers and businesses want things done for them.

Brian Halligan: Yep.

Sasan Goodzari: It’s money, it’s confidence. Like, get my stuff done for me so I can manage and focus on my business or my life as a consumer. So we said the only way we could do that was data and AI. And that was the second big decision. And to your question about were you too early declaring it, a big heavy lift was all the work we did around data and data services, like cleaning the data, making sure it’s usable, making sure we can ingest data.

Brian Halligan: ChatGPT came along, you were ready.

Sasan Goodzari: Yeah. The AI part was actually the easier part. The harder part is all the data. And now that it’s usable and all the services we have to ingest data, that’s why I’m glad we started six and a half years ago, because now we’re far better positioned for what we’re doing today in the future.

Brian Halligan: And when you think of it, are you infusing AI into your current platform, or are you saying, “Hey, we’re going to start from a blank sheet of paper, and build an AI-native version of QuickBooks?”

Sasan Goodzari: I would say both. Everything—and I get asked a lot, so what’s your AI revenue? Like, the whole company sits on our data and AI platform. Like, everything from payments to payroll, the tax, everything sits on our data layer, data models and on our AI platform. So that’s sort of number one. Number two, you know, one of the things we launched in July of this year is a virtual team of AI agents that do a lot of the work for you.

Brian Halligan: Yeah.

Sasan Goodzari: A lot of that is AI native.

Brian Halligan: Are you going to put the accountants out of business by doing that?

Sasan Goodzari: No, we’re actually—our focus is how do we fuel their success? And we’re also very transparent with accountants, which is if you only have, you know, 50 customers and all you do is tax, you should really be part of our platform, our expert platform, because with technology and the supply issues, it’s going to be tough as you look ahead.

So we’re trying to fuel their success, but we’re also partnering with the large firms to really fuel their success because they’re trying to digitize, they want efficiency, they want to improve profitability, particularly the PE-backed firms. Our goal is partnership, because we believe in AI plus HI. We think human intelligence is essential for today and the future. Our focus is everything needs to be done for you. How do we deliver experiences that’s done for you, versus building more workflows and designing more product?

Brian Halligan: Okay. We only have a couple minutes left. I have a thousand more questions, by the way. I coach all these CEOs who are smart, they’re hungry, they’re between 10 and call it 500 employees. And they want to go from, like, startup founder to scale-up CEO. What CEO advice would you give to these people?

Sasan Goodzari: That’s a loaded question.

Brian Halligan: You’re a smart guy.

Sasan Goodzari: I would say really focus on winning. These jobs are hard. You know, I …

Brian Halligan: Do you like your job?

Sasan Goodzari: No, I love winning.

Brian Halligan: Yeah. Is the day to day—do you enjoy it?

Sasan Goodzari: There are a lot of days where I’m like, that was—no.

Brian Halligan: Yeah.

Sasan Goodzari: I’m not solving for joy. I think that’s the advice I would give is if you’re solving for just following your passion and defining how the day went by, joy and happiness, you’re not going to succeed in this world—as a CEO or not a CEO. So the advice I would give is focus on the customer and focus on winning. These jobs are hard. Be prepared, right? If you want to do this job, you got to have grit, you got to work hard, you got to have resilience. You got to understand that most days you’re not—it’s not about passion, it’s not about joy, it’s about winning. And what we do is very hard. And I just think the mental toughness. I think talent is overrated.

Brian Halligan: Okay.

Sasan Goodzari: I think it’s all about grit and it’s all about hard work. I will take anyone that has grit and hard work versus …

Brian Halligan: How do you know if someone—you’re interviewing someone, how do you know if they’ve got grit and hard work?

Sasan Goodzari: You know what? One of the things we have is one over one approval. If my team is going to hire anyone, ultimately I interview them.

Brian Halligan: Yeah.

Sasan Goodzari: And more than 50 percent of the time I go back to them and say, “I don’t think this is the right person.”

Brian Halligan: Grit.

Sasan Goodzari: Because it’s just—it’s the grit, it’s the hunger, it’s the passion. You know, sometimes …

Brian Halligan: What do you ask someone to figure that out?

Sasan Goodzari: I figure it out in the conversation. You can smell if somebody’s hungry, if they have grit, if they have perseverance. And I think that’s what it takes to do this job. Back to your question, the biggest advice I’d give CEOs is don’t lose sight of the prize. And it’s hard. Get after it, outwork everyone. Have grit. And if you fail, figure out how to get up and bounce back, and you’ll achieve great things in life. It may not be that CEO gig, but you’ll achieve great things in life. It’s the advice I give my kids.

Brian Halligan: You’ve done an amazing job here at Intuit. You’ve done an amazing job on this podcast. Thank you for sharing all your knowledge. You’re a legend. Appreciate you.

Sasan Goodzari: Thank you, my friend. Thank you.

Closing Thoughts

Brian Halligan: Okay. Hope you liked that interview with Sasan. I really enjoyed it. A couple of high level things: Both Sasan and his predecessor Brad Smith are very polished and very smooth, and they kind of rhyme with a couple other folks I’ve had on the pod—David Solomon from Goldman and Nikesh Arora from Palo Alto. And it seems like that’s sort of a common thread amongst the CEOs who’ve been hired in to replace the founder in a company. Kind of interesting that they have that in common.

Another thought. Like, I spent that day with Brad Smith, their CEO, a few years ago. Just my suggestion to all of you listening, if you’re a CEO or you want to be a CEO, that really worked and was really helpful to me. And so if you know a CEO and you admire them, ask. “Hey, can I come in and sit with you for a day and sit through your meetings?” The very worst thing that can happen is a CEO is very flattered and says no. And so you kind of win either way.

He asked a good question of himself. Every six months he asked himself the question, “If I join the company today from the outside, what changes would I make?” And that’s the question I always asked myself at HubSpot and I very rarely did it. So if that stuck with you, I recommend you do it. I like that he, and almost everyone I’ve talked to gets on the coal face with the customers, like, gets on support calls, goes and talks to customers, follows them home. And I think what kills a lot of startups, kind of between a hundred and a thousand employees, is you get some layers in there and you get all the feedback filtered, and you lose that sort of coal face touch with the customers.

One thing he talked about was this follow-me-home concept. And it’s—at least it used to be—it’s a famous concept in my mind where the founder of Intuit, they sell to very small business. And people typically run them out of their home. So he would go to someone’s home and watch them do all their paperwork and watch them do all their accounting and see how frustrating it was, and then kind of build for them. That was his sort of secret sauce.

And almost every CEO I speak with is really obsessed with understanding the customer. What I think people get in trouble with now is they look at the analytics for the customer, and they can see usage data and everything’s very wired up quite nicely for the CEO to see. But I think you miss something when you don’t actually do that follow-me-home. Because when you do the follow-me-home and you sit with—virtually or not—that end user, you can see not just what they’re using, but where are they cutting and pasting into other things, and where’s the messiness in the process?

I see a lot of CEOs who are getting away from that. I would encourage you all to stay there. I think a very common cause of death for companies going from a hundred to a thousand employees is they kind of lose that coal face with the customer. They get their information filtered heavily by their staff, they get reportings from analytics apps, but they don’t actually talk to those customers, and they don’t make their senior team talk to those customers. So I think that’s key.

And then we talked about the SMB segment—and we have this in common with Intuit, although we sell more to M than S than they do. What he says about S, I think, is right is you can’t treat them like mini enterprises, you have to treat them like consumers, like the individual is like a consumer product. You have to build it that way. And it’s a different mindset, and it’s very easy to get talked into building all kinds of other stuff for mini enterprises. So I like that they did that. The key in SMB is to keep your CAC low. If your CAC is relying on Facebook ads or whatever advertising model, it’s very hard to scale that. And I like that they focused on that. They worked through channels, they were obsessive about word of mouth and net promoter score. So I like that a lot.

And the other thing you have to do if you want to build an SMB business is you need a really solid LTB. You’re going to have churn, some of these folks are going to go out of business. Like, HubSpot will lose, call it 11 percent. So we start the year with $100, and then we end the year actually with $89, but then we upsell them up to $100, $300 and $400. You have to be able to fill that divot with your best customers buying more stuff. So I think they’ve kind of got it down how you build an SMB business. I think more companies should go after this target. There’s just like gravity on Sand Hill Road that everyone wants to go to the enterprise. But if you can think it through, man, you can build a huge business in SMB. HubSpot, Intuit, Shopify, they’re all cranking.

Okay, we talked about second acts in platforms. And lots of founders asked me about this. A lot of companies die because they can never figure that second act out. I kind of always thought of it in HubSpot, either you build a platform or you get eaten by a platform. And so we ended up building a platform. What they did and HubSpot did is they had their first app was accounting, and the second app, which is right next to it, was invoicing. So they didn’t go way into HR or something. They were just like, “We’re going to do invoicing.”

So that was the first act, second act. And then after a while they went into payroll, which is a little further away, but pretty close to that. So when you’re building a second act, keep it tight, keep it close. Very helpful if it’s the same buyer who’s buying both of those products—not always the case and hard to find that, but really important.

And then the other thing I would say is as you’re going to your third act, I think you want to be a little bit more serial than parallel in the way you think about this stuff. So you build your first act, and then instead of doing second, third, fourth app and peanut buttering it, really go after that second act and get to table stakes on there before you go to your third act, your fourth act, et cetera.

I really liked Sasan’s hiring criteria: grit. That’s the first. I’ve interviewed nine or ten of these really terrific CEOs. No one’s said that before. It reminds me of Sequoia’s hiring criteria for entrepreneurs. They look for that chip on the shoulder. I don’t think they always get it, but pretty much. And so he looks for that. And most founders are telling me these days we’re looking for slope or we’re looking for experience. But I like his grit. What’s your hiring criteria? What’s your throughline for all your execs you’re hiring? That’s a good question to ask yourself.

Okay, those are my, my takes on Sasan. I think there’s a lot there, and I hope you enjoyed it and I’ll see you on the next one.

Introduction

Markus Villig:  So the very first meeting with a taxi company in Serbia, we, um, go to this address, but it’s just an old-school Soviet-era apartment building. And then me and this young sales guy walk in—I think both of us were about 22 years old—we’re obviously quite nervous about what’s the situation we walked into. There’s a couple of guys who look like bodyguards sitting on a sofa. There’s a gun on the table, a big safe in the corner, and we’re wondering: what did we just walk into? 

Roelof Botha: Welcome to Crucible Moments, a podcast about the inflection points that defined some of the most consequential start-ups of our time. I’m your host, Roelof Botha.

Markus Villig was still a teenager when he became frustrated with the dysfunctional taxi service in Tallinn, Estonia. Bootstrapping his start-up with 5,000 euros he borrowed from his parents, Markus dropped out of college and, against the odds, scaled Bolt into a top ride-hailing service across much of Europe, Africa and beyond. The company’s path to success, propelled by Markus’ grit and ambition, was unconventional and, in many cases, counterintuitive. 

It began with a decision to partner with the taxi industry in Eastern Europe, then pivot to compete against them. With his data-driven strategy, Markus proved skeptics wrong by launching in overlooked countries he’d never even visited and where his competitors hadn’t yet entered. As the business grew, he made bold bets on new verticals, which ultimately saved the company from the tumult of the pandemic. 

Today, Bolt offers ride-hailing, micro-mobility and food delivery services in over 500 cities worldwide, many of them in emerging markets underserved by big tech. 

In this episode, we’ll explore the crucible moments that catapulted Bolt from a small Eastern European success story into a global force in transportation. And we’ll peek around the corner at how Bolt is navigating autonomy. 

Markus Villig: My name is Markus Villig. I’m the Founder and CEO of Bolt.  

From the age of 10, I knew I wanted to be a tech entrepreneur. I  remember as a kid, I was selling, uh, collectibles at school, then I progressed to learning to code, starting to build websites as a teenager, uh, to local businesses.

It was especially exciting seeing how Skype was being founded in Estonia. My brother actually was one of the early employees, and that just gave me even further confidence that the first chance I get, I want to go and start my own business as well.

The Initial Idea

Roelof Botha: Markus, still in high school, knew he wanted to start a company, but he didn’t know what kind. Lacking a driver’s license, his reliance on—and frustration with—local taxis eventually spurred an idea. 

Markus Villig:  Getting a taxi in Tallinn was a horrible experience. And looking back, if anybody wanted to design a bad service, that’s what they would do, and it was bad on every step of the journey. So if you wanted to hail a ride, you had to call a dozen companies, and they wouldn’t pick up even if they promised the car is gonna get you.

They oftentimes picked up another passenger on the way and never actually made it. And then in the rare cases when you managed to get a car, it was in a horrible condition. The driver was quite rude and oftentimes smoking in the car. 

 And you could just forget about paying with a card. Uh, they always wanted you to take out the cash from an ATM, so it was very obvious that there must be an opportunity here. 

Roelof Botha: It was 2013, and Uber and Lyft had already begun to disrupt the taxi industry in North America. Uber had even entered the market in Western Europe. But Markus’ concept was different: he hoped to work in tandem with the existing cab companies in Estonia, selling them dispatching and fleet management software to streamline the experience for both riders and drivers. But first, he needed seed money.  

Markus Villig:  So the first fundraising was very difficult because I was 19. I did not have any experience, any connections, any, um, real resources to speak of. And, um, I figured that I needed the first 5,000 euros to get the product off the ground, uh, to hire a developer to help me build a prototype and also have some  money for initial marketing.

And, um, since I didn’t know any investors, I went to my parents and asked if they were willing to lend me about 5,000. And that was a funny episode where they thought about it for quite a while because that was a big sum of money for us back then. And initially they said that they’re willing to, to make this, uh, loan for me, uh, but that comes with my own personal risk. And then if I screw it up and all this money is gone, then I can, uh, cover my own rent during university.

Unlocking the Supply Side

Roelof Botha:  Armed with this initial investment—and indebted to his parents—Markus got to work building the company then known as Taxify. But he soon faced a crucible moment: the success of the business rested on his ability to convince the supply side of his marketplace, the drivers, to come onboard. For a 19-year-old college dropout, that wasn’t easy. 

Markus Villig: So the initial sales to taxi drivers were extremely difficult. When we first started, I did not have any experience, any connections, any real resources to speak of.  And, um, the initial start was very, um, humble. I went on the streets of Tallinn talking to taxi drivers one by one. So as it goes in most cities around the world, they’re usually waiting in these hotspots around airports or sort of train stations and so on. So I just went to them, got in the car and started pitching that “I have this idea, would you like to make additional income by joining this platform? You’re gonna get additional trips each day and you only gotta pay a commission. So it’s a very, very risk-free proposition for you. You, you don’t have to join with any fixed fees or anything like that.”

Most of them back then were just using, uh, Excel, or they were using even worse, paper notebooks. So we actually had quite a lot of value to offer them even before we had a single customer to bring to them, um, in the first place. And, um, the sales went really poorly—probably 90% of them told me that they’re not interested because they thought it’s so risky. I was just a kid. I didn’t even have a product  back then, so I was just pitching a concept.

Roelof Botha:   There were even more reasons for taxi drivers to be skeptical. 

Markus Villig: Most of them didn’t even have a smartphone. So for them, it was actually a fairly big monetary investment. They had to put down hundreds of euros to buy a new device just to be able to even use the app. So it turns out that there were some quite unexpected hurdles to actually get them onboard, and that’s what made the sales a lot more difficult than one might imagine. 

Roelof Botha:  Even when the individual drivers did see the benefit of working with Markus, they faced another obstacle. The legacy taxi companies had a stronghold over the market—and over the drivers themselves.

Markus Villig:  When I was asking some of these drivers whether they would like to join the platform, some of them were just categorically banned from doing so. So their owners had told them that under no, uh, conditions, can you join any of these new entrants to the market. You have to stay loyal to the company and so on. So it was really bad. 

There were many moments where I was very frustrated by the progress because we had spent months and we still had very little of these taxi companies and taxi drivers on board. But at the same time, it actually gave me quite a lot of confidence that we’re on the right track because I clearly understood as a customer that this industry is ripe for disruption.

Pivoting From Serving Taxi Companies to Competing Against Them

Roelof Botha: While the appeal to customers was clear, taxi drivers and their employers didn’t always appreciate the benefits of this disruption. This is because industries can often ossify. Incumbents are loath to change to embrace new technologies because they don’t need to. But in Estonia, this began to change in 2015, when Uber launched. It was an existential threat to the taxi industry. Those same companies that were initially wary of Bolt’s dispatch software didn’t want to be left behind in the on-demand revolution. Uber’s arrival prodded the taxi companies to act, and paved the way for Bolt’s initial wedge. 

Markus Villig: We started off in a market that had relatively little competition. Back then people were just hailing taxis on the street or calling local dispatch centers with a, with a phone, uh, number. Um, and then over a couple of years, the market of course transitioned to apps. So everybody started hailing a ride digitally. And we had counter-positioned ourselves in that market by working together with the taxi companies and taxi drivers, um, because they were very afraid that new entrants were coming in and they were cutting them out completely.  They were hard to deal with, but eventually we got them excited. They came to see the value of the software we could provide; they saw the value of joining this digital ecosystem. They could get additional customers for applications, so it made quite a bit of sense. 

Roelof Botha:  Bolt’s newfound partnership with legacy taxi companies allowed it to gain a footing and initial success in Estonia. 

Markus Villig: We started to see some trips happening every day. And it was organically just growing and, and becoming quite viral because the baseline was so bad. So people are just used to having this horrible experience, and the moment experienced, uh, a new way to order a ride—you just tap a button, a car shows up—it was so great. So people were just sharing it without us actually having to spend too much marketing.

Roelof Botha: But as Bolt looked to expand throughout Eastern Europe, the challenge of working with legacy taxi companies again reared its head—proving not just unsustainable, but also dangerous. 

Markus Villig:  So the very first meeting with a taxi company in Serbia, we, um, go to this address, which is supposed to be the biggest taxi company in Belgrade, but it’s just an old-school Soviet-era apartment building. And then we walk in there, and, uh, there’s an old woman there cooking food.

There’s a couple of guys who obviously look like bodyguards sitting on a sofa. And then me and this young sales guy walk in—I think both of us were about 22 years old—we’re obviously quite nervous about what’s the situation we walked into. 

We have a huge old guy sitting behind the table, uh, smoking a cigar; there’s a gun on the table, a big safe in the corner, and we’re wondering: what did we just walk into? But when you’re in that moment, uh, we didn’t really have a choice to back down.

So we took a seat. We pitched him on why Bolt is a fantastic product and why he should adopt it at his company. Clearly the meeting wasn’t going anywhere. So after about 15 minutes, he just told us no, and we walked out—and we were happy we were able to do that. But I think that really brought home the lesson that it’s much easier for us to, uh, not try to work with these dinosaurs and bring these taxi companies to the future, but rather let’s start to work directly with the drivers.

 And that was a crucial distinction, and it wasn’t an easy choice back then because until that moment we had been partnering with these local dispatch centers, uh, building software for them. And then suddenly, uh, we dropped that part of the business completely, and we tried to transition over to work with individual drivers. And you can imagine that was a massive transition. 

First of all, these taxi companies were upset with us about us changing the business. Uh, the employee base was worried whether we’re gonna have a business at all six months from now. The media was, um, coming at us because they were thinking that so far the value of the application has been that you can hail a ride from these companies. If these companies are gonna get off the platform, what is gonna be left of the service? 

So for sure it wasn’t a very easy transition, but it was one of those moments where we clearly knew that was going to be the future, and we just bet the company on that.

Roelof Botha:  This pivot meant that Bolt was now in direct competition with both the established taxi companies and ride-hailing giants like Uber. But the benefits easily outweighed the risks. The partnership with taxi companies was fraught with risk because of fundamental incentive misalignment. By cutting ties with them and going all in on private drivers, it allowed Bolt to control its future. 

Markus Villig:  Looking back, it was the right decision to do both for the customers and for us. The lesson for me was that you gotta stay very rigid on what you’re trying to solve, what the problem is. But you can be quite flexible on the details of how you get there.

I think we figured out the really clever way how to position ourselves and then build something unique. But, uh, of course, uh, it was also very difficult, especially as, as most of the investors and, and employees, uh, from the outside might be thinking that, “How are you ever going to be competing with these giants that have a hundred times the funding that you do?”

The Unexpected Path to Emerging Markets

Roelof Botha: Markus and his team knew that in order to achieve their ambition of building a global company—one that could compete with fast-growing ride-hailing behemoths—they would need to expand outside of Eastern Europe, and do it fast. 

Markus Villig:  So my ambition always was to build a company that’s going to serve millions of people all around the world, hopefully make the world a better place through technology.  So for me, I clearly knew that Estonia was just going to be the first test market to validate whether we have product-market-fit. But after that, the first moment we get, we’re going to be scaling this internationally.

And I remember, uh, when, uh, we had our first traction in Estonia for the first six months, we went out to raise our first funding round. We managed to scrape together about 1 million, uh, from local angel investors. And then we did a horrible mistake. So we tried to expand to nearly a dozen markets in less than a year, and it nearly bankrupted the company.

Pavel Karagjaur:  I think I was expecting to kind of join an international startup. Uh, and then I think the, the day I joined, I opened up stats, uh, and I saw that, uh, Amsterdam had, like, five trips a day or something like that. So, uh, so it was, uh, yeah, I think we were kind of not doing too well. 

My name is Pavel Karagjaur and I am an SVP Growth at Bolt.

We had problems with traction internationally. Estonia was, like, 80, 90% of the volume. Uh, and then the next biggest market was, uh, uh, Latvia, and it was, like, 10 times smaller than Estonia. 

I knew that product is really good. I knew that there are a lot of customers, there are probably a lot of drivers who can, uh, benefit from this product. We just need to find them. 

Markus Villig:  So we almost ran out of cash and we had to do a complete restart. So we shut most of those markets down. We had to downscale the team and go back to the drawing board.

Roelof Botha: With the clock ticking and all but one European market rapidly burning cash, Bolt faced another crucible moment: successfully pivot their expansion strategy, or risk collapsing the business. 

Markus Villig: We first talked to people who built large businesses before, including our—many of our—investors. And the conventional advice we got from all of them was that you should be looking at traditional markets like the U.S. or Western Europe, and we try to expand into those places. But it didn’t really make any sense. Like, already when we started to do the first pilots or, uh, just even the first research, we, we realized that we don’t really have a clear differentiated strategy. How are we going to be winning in those countries? They were just very, um, bad in terms of regulation, and they were also highly competitive. And when we just ran the math, we just couldn’t figure out how are you ever gonna get to the scale we aspire to be by doing that playbook.

So then at some point realized we have to restart. We have to think about expansion in a different way. What we did was that we threw away all of our biases. So instead of thinking about just going to the neighboring country, which is the closest geographically, we looked at the map of the world. We made a list of the top few hundred cities in the world and started to rank them by different characteristics.

Pavel Karagjaur: I mean we literally created a big Excel sheet. Each row was a city, and each column was, uh, a parameter, and into the parameters we would put in labor cost, unemployment rates, car ownership rate, fuel price, and we try to effectively quantify all of those areas. I remember how we were sitting in our, uh, this, uh, office downstairs at like 8:00 PM, 9:00 PM, uh, filling this out because we were just feeling excited.

Markus Villig: After actually just a couple of weeks of this analysis, all the African cities actually turned out to be the top of the list: large population, massive need for alternatives in terms of transportation and very high unemployment. So clearly millions of people who would like to join these kind of platforms to make additional income.  

Roelof Botha: Expanding into Africa was not obvious. But Markus decided to trust the data and lean into his team’s research—even when those outside of the company cautioned against it. 

Markus Villig:  When, uh, we asked for advice from investors, um, they all said for sure don’t go to any of these risky markets because anything can happen. You don’t know anything about these markets in terms of payments and legal. 

From the sort of superficial level, might presume that it’s very hard to, to make actually a sort of a big business in, in some of these countries with fairly low income levels. But we thought that it’s a much bigger risk not to try at all. 

So we thought, let’s try to carve out the small budget, just a couple of thousands, uh, tens of thousands of dollars, and launch these markets and see what happens. 

What we realized was that the volume is so vast and these economies are growing so quickly that it makes sense for us in the long term to bet on these countries. And that’s what we did.

Roelof Botha: In 2016, Bolt set its sights on Johannesburg as its first point of entry into Africa. The company didn’t have the resources to fly there and staff the operation in person, so they started advertising their services remotely. 

Pavel Karagjaur:  Keep in mind also when we were advertising, we were saying that the product is actually live. We didn’t say we plan to enter; we were like, the product is live. So what started happening is that the drivers would sign up and we would, like, receive emails like, “Hey, why are you not operating like you promised me, like, whatever this 15 commission cash, uh, payment option, and I can’t go online.” So we were like, let’s just hire a person and, uh, let them onboard drivers. 

Markus Villig:  So we just ran these job ads. We found a young kid in university who applied, uh, we figured out a way how to send him a, uh, some credit card so he could actually use it to make local expenditures and then get an office and so on.

Pavel Karagjaur:  I think the first day he was at work, probably some drivers even came over because we sent an email and say, “Hey, go to this address, sign up,” and uh, uh, we were open for business. 

Markus Villig: I remember once we finally turned on the service, it took us just a couple of weeks and, uh, we realized the numbers are completely off the charts. We were seeing so massive customer adoption. It was so different than what we’d seen in Europe. Once we figured out that there’s this huge new world out there, uh, in terms of these emerging markets all the way from South Africa to Nigeria, to Kenya, to places like Azerbaijan, um, we suddenly realized that the product-market-fit there is so great that we actually need to invest significantly less, and we were able to really accelerate the growth of the business.

So we went from having no presence in these emerging markets to suddenly those being more than 50% of the business in about six months. We really pivoted the whole management team attention just to double down on that and figure out how do we find even more markets like this to accelerate.

Hard Won Lessons About Expanding

Roelof Botha: As the new playbook brought successful launches in emerging markets, Bolt became one of Europe’s fastest-growing startups. It was a remarkable rise for a company that began by bootstrapping outside of a major tech hub with a few thousand euros. New investors took notice.

Andrew Reed:  Investors in general, you know, used to pay a great deal of attention to the U.S. app charts. And maybe a cursory amount of attention to Western European app charts, but we all had access to app charts all over the world. And, you know, as Sequoia built out its data science systems and began to track, you know, what was happening in every part of the world, uh, it was very unique seeing Bolt’s ascent in all these different places.

My name is Andrew Reed and I’m a Partner at Sequoia. 

You know, at first it’s easy to overlook because any of these markets, including Estonia by the way, you know, is roughly the size of Kansas, you know. But the sum total is, like, a global market-leading business. And when you have a company that can compete and win in such diverse markets, it suggests that they will have the ability to compete and win in even more larger, more interesting markets over time.

Roelof Botha:  Bolt had achieved the seemingly impossible in dozens of emerging markets across the globe. Now, feeling emboldened, they set their sights on a major market closer to home.  

Markus Villig: We clearly knew that we had to be in London over the long term. It’s the single biggest market in Europe for ride sharing, and we just didn’t have sufficient funding to launch there before. And then once we had earned the track record of demonstrating we can launch this business in a hundred cities, we can compete, we can build the category leader, then we earned the confidence from investors to invest in the business efficiently that we could go and launch London as well.

So we applied for a license in the market, but it took us so long time to get it that we thought, we can’t wait forever. We’re just completely gonna miss out on the opportunity here. So we, we tried to buy a local company that had a license. So we did that. We launched, and then of course the local regulator didn’t really like that because we bypassed what they thought was, was the legitimate way how you should be going about getting a license.

Roelof Botha: In September 2017, Bolt launched in London. Less than 72 hours later, its operations were shut down by local regulators. 

Markus Villig: Us launching in London and then having to shut it down a couple days later was probably the most frustrating experience in this whole 12 years of building the business. 

I remember that I had just flown to China to meet some of the players in the industry, and we then we get this call that we’re, uh, being forced to shut down in London. 

And I remember I just wanted to fly back and immediately, uh, uh, meet with the regulators and explain to them that this, uh, doesn’t make any sense and they should, uh, let us keep going. But, uh, since I was stuck in China, I couldn’t immediately fly back. I mean, I had a couple of hours to do some reflection on it, and then eventually I realized that we do actually have to restart the ways of how we operate.

Pavel Karagjaur: Because we had operated with, like, low-regulation markets, uh, before, we had historically just underinvested in, into our, like, policy compliance teams. And that was the root cause, uh, why we were not that well prepared. 

Markus Villig: And that was obviously a big, uh, embarrassing moment for us. And I think a big inflection point where we, we sat down with the management team and we had a long discussion about it—that, hey, there’s some countries where you optimize for speed; there’s other countries where you gotta optimize for risks and building a long-term, great relationship with the city. And I think London was the first and biggest mistake we did on that front. 

Roelof Botha:  Despite the sting of the public failure, the team refused to give up on London. They began working on a new plan to re-enter the market. 

Markus Villig: We really had to pivot, build up strong legal team, public policy team. Invest in technology—like, how do you verify the drivers? How do you make sure the platform is safe? How do we build reporting so the city can actually monitor and assess that we’re, we’re doing what we’re saying? 

Jevgeni Kabanov: A lot of, uh, software was created specifically for London. 

I’m Jevgeni Kabanov. You can call me JK, President at Bolt.

London for us was the first launch with a very complex regulatory environment. Today it’s fairly routine, but at that time it was really, like, a completely different animal.  It happened that I was in London during the launch. And I thought like, okay, I’m gonna test the product and I’m gonna drive as a driver, as a rider.

And there was a few days before the launch I actually found some bugs. If we wouldn’t have fixed them, we would be in trouble.

Roelof Botha:  In June 2019, nearly two years after its first attempt, the company relaunched in London, with the approval of the city’s regulatory agencies. And they did so under their new name—“Bolt”—which they’d adopted to reflect the scope of their ambition. 

Jevgeni Kabanov:  Yeah, it was exhilarating to launch in London because at that time we were really, uh, an Eastern Europe and Africa company. And having this, uh, launch in the biggest European capital, uh, seeing that people actually took up the service, seeing drivers take, come out and seeing riders, uh, take the rides—it was really exciting. We were all watching the graphs grow. It was very fun.

 Markus Villig:  My lesson in London and actually all across, um, the business now, is that you have to be very smart in terms of how you approach regulated industries. And I think there’s some people who fall in the camp that they’re too risk-averse and they therefore move too slowly or they don’t launch many products that would actually serve customers at all just in order to make sure that they minimize all the risks. And of course you have the other end of the spectrum where you ignore some of these regulations and you move too quickly. And that has its own benefits.

So I think what we’ve learned as a company now is how you balance those things. My advice there is that you have to be smart about it. You have to find the right balances, and you have to be patient with regulators.

The Next Bet: Micromobility

Roelof Botha:  Since inception, Bolt had focused solely on ride-hailing. But as the company saw increasing success across multiple geographies, Markus and his team started to consider new products. 

Markus Villig: We actually, uh, had this ambition that we wanted to launch other modes of transportation on the platform for many years because we realized that ride sharing alone is not gonna replace your private car. There needs to be other modes of transportation we offer.  

And we’ve actually been looking at the space for quite a while because we had seen what worked in China. But, uh, we thought that, that form factor of just having regular pedal bikes is not gonna be the one that’s going to be very popular in Europe. But then the moment we saw electric scooters arrive to the market and I was just using them myself, I was immediately convinced that this is the future. 

Pavel Karagjaur:  It was also summer at the time, so we’re like, okay. It kind of feels like a product that has a future. Uh, a lot of people would probably prefer that. And it’s almost, like, a new segment for the, for the trip distances between, like, walking and taking a car, and, uh, we ended up doing a bet that, uh, the segment will grow in the future.

Markus Villig:  So what we had to figure out was just how do you bring it to market? How do you make this actually safe, uh, convenient, uh, and of course, crucially for this type of business, cost-effective.

Roelof Botha:  Launching a second product always brings risk.  It drains your resources. It’s a distraction, and you have to fund it. If it fails, it could hurt the business’s core product and its bottom line. So Markus decided to test his way into the category.

Markus Villig:  I was very paranoid about launching a second, uh, product line myself. Uh, I was just, uh, thinking that the best companies do one thing and they do that really well. And therefore I delayed launching anything until it was already six years into the business and we thought that we had a fantastic team on the ride sharing side, and it was growing really well.

And then we carved out just a small team of about five people initially to start working on the scooter bet. And we gave them a small budget. We gave them a six-month timeline. We said, “You have to figure it out. Build the basic MVP of the app, order some scooters, figure out the first city you’re gonna launch in, set up the operations, show us what you can do, and if that works, we’re gonna continue—give you more funding, we’ll expand this team. If not, we’re gonna shut it down.” 

Roelof Botha: Sensing that they’d have to move quickly to capture the emerging micro-mobility market, the team purchased scooters from a third party and introduced them in a first market. What they didn’t anticipate was consumers’ reaction.

Markus Villig: We first launched the scooters in Paris thinking that, um, it’s the best city in Europe for that because, of course, it has a large population, it’s quite wealthy. We put the first couple thousand scooters on the road, and we started losing dozens of them each day—people were just throwing them in the rivers, just breaking them. There was even some Romanian gangs who were going around and stealing the scooters, putting them in vans and just, you know, selling them for parts. So it was a complete mess.

Jevgeni Kabanov:  I went with Markus to Paris and, and we basically, in the evening, we went, uh, you know, we wanted to try the other side of the service, so we went to, uh, gather and charge scooters. So we went in the van, and in three hours we went to locations of eight scooters, and we haven’t found a single one.

And I remember that in the end we were both so upset that we went to McDonald’s. Neither of us usually goes to McDonald’s, but we both needed something. There definitely were doubts, uh, in the company at the time, and we were discussing whether we should just abandon the service because it just was so bad.

Markus Villig: After a couple of months, it got so bad we thought we thought we should potentially just exit this whole scooter business, uh, in the first place. Like, it maybe doesn’t even make sense to continue. 

Jevgeni Kabanov:  My position was I really wanted to launch in Tallinn because my belief is—and with all the services—is that you need to first launch in your home market, even if it’s not the perfect market for that. Almost always you really want to launch in your home market so you could keep an eye on the service, so you could understand how it works, what works, what doesn’t. 

Roelof Botha:  Ultimately, the team decided to give scooters another shot. On Jevgeni’s advice, they rolled it out first in Tallinn. 

 Jevgeni Kabanov: And suddenly it was very successful [laughs]. So our Tallinn launch was very successful, and it just turns out that Paris just wasn’t a good place for micro-mobility at the time. When we launched in Tallinn, I think we had a much better operational team,  but also just the amount of theft and vandalism in Estonia was so much less than in Paris—like, 20 times less. 

So one fundamental thing we learned very early on is that if you don’t control your hardware, uh, you don’t control anything. One of the biggest things that reduced the vandalism, the theft, was the fact that we switched from consumer scooters, which could be easily resold, to custom scooters, and that was huge. And eventually we developed our own scooters. 

Roelof Botha: As the scooter business grew in other European cities, the team began to think critically about additional product expansions. 

Jevgeni Kabanov: We started doing these workshops, uh, one every couple of months, and every time we would, uh, try to analyze what, uh, new businesses should be launching. And so, we, we did those workshops for, like, two, three years before we built a dedicated team for that. 

Markus Villig:  When we thought about what are the biggest opportunities for us to get into, food delivery was always top of the list. And, um, the reason for it was that in many of the countries where we operated, it was a completely underpenetrated category. So back in 2019, there was very little adoption of food delivery in most of our countries. And we thought that there’s an opportunity for us to enter and build a category leader in at least a dozen countries, and that could be a multi-billion business over the next few years.

Jevgeni Kabanov: It was just so clear for us that not only is it a good business, but it’s also—the time is ticking on that business because there are more and more competitors coming in, more and more markets. And so, we basically had the case that either we launch it now or we don’t launch it at all. 

Markus Villig: And then how we go about it is, is our typical structure where we assign a small team, typically about 10 people. We give them a very short timeline of about six months to build a prototype, roll it out and see if we can get any traction with it. And that’s what we did with food delivery.

The Pivot that Saved Bolt in the Pandemic

Roelof Botha: Bolt Food launched officially in August 2019. Taking a cue from their scooter business, they first introduced the product in their home base of Tallinn. Three months later, they expanded to Vilnius, Lithuania. 

Markus Villig: So the initial traction we had in the first two cities was good, but then suddenly the whole world went into lockdowns.

Pavel Karagjaur: We were actually in Kenya, eating breakfast, uh, in a hotel and, uh, Trump came on TV and said, “Hey, U.S. stops all incoming flights from the rest of the world,” and this is when everyone went crazy. And this is when countries started to lockdowns and everyone was like, “Oh my God, they’re serious.” Uh, and, this is where we started to lose volume really fast.

Markus Villig: The ridesharing business declined by 85%. So you can imagine it was vast majority of our revenue.  What most of our competitors did was that they immediately raised the rounds and they also really went after the costs. And for most of these companies, the main cost they had was employees. So they let go 30%, in some cases even 50%, of their entire workforce.

And that, of course, was a big drain on morale. And these companies were effectively paralyzed for the next six to 12 months. They couldn’t do much. So what we did was, um, we thought we’re gonna take the gamble. We’re not gonna let go of a single person.

We told the company that we’re just going to be reducing salaries by a flat 20%, and then people could opt in to take a bigger cut in that if they could afford to, with founders going to zero and most of the executives going to zero as well, just on an opt-in basis.

And of course, many other people were very skeptical. How is the company going to react to that? But actually we had hundreds of people opting in to take quite large meaningful pay cuts—20, 30, 40%—uh, on top of what we had offered. And actually it brought the team’s morale to a completely new level.

We thought for the next six months, we can’t really do ride sharing because all the cities are banning that from happening. So let’s take all this operational expertise and technology we have and pivot that to food delivery instead. And then we’re really doubled down on launching food in these lockdowns from just one country to more than a dozen.

That was a very risky bet, or course. I mean, if it had taken longer or delivery wouldn’t have worked out, the company would’ve been in real trouble. But we had a lot of confidence that, uh, this is the bet we wanna do as a company. We thought this is really a crucible moment where you can actually meaningfully change your position in the entire market.

Jevgeni Kabanov: It was a very scary and stressful time, but also very exciting, because people really mobilized, the whole company came together and people did whatever needed to be done. The ride hailing teams were launching, uh, food delivery. The engineering team, in, for, in, I think, 12 days, we put together the business delivery, delivering packages from merchants because we thought that merchants—suddenly, a lot of merchants—need to deliver packages home, and we wanted to create volume for the drivers.

Pavel Karagjaur: And we managed to just reallocate people to work on food delivery and scale that up really fast.

Markus Villig: And it worked out beautifully. The food delivery business really took off really rapidly and actually exactly as we imagined. Just six months later, the first cities in Europe started opening up and ride sharing was recovering quite nicely. And because all of our competitors were so paralyzed from the layoffs, uh, and they weren’t really focused, we were able to take a lot of market share. So coming out of COVID, we tripled our market share relative to what we had going in. And I think there’s this perfect analogy that it’s very hard to overtake, uh, drivers during a normal race, but you can take, overtake a lot of drivers when it’s raining. And I think it was exactly what happened, uh, during COVID with us.

Building Bolt Market: The Next Leap in Delivery

Roelof Botha: In the fall of 2021, with the whole team riding high, the company introduced yet another product: Bolt Market, a grocery delivery service. It launched first in Tallinn, and then later across Europe and Africa.

Markus Villig:  We launched together with the local grocery chains because they didn’t really have a great mechanism how to do real-time deliveries. They didn’t even know their inventory to be honest. So we had to work with them to figure all of that out real time. Um, and we also launched our own stores because we thought that it makes quite a bit of sense for us to operate at least a couple dozen stores ourselves.

 So we actually understand the grocery business better. We build great ERP software to manage these stores. Uh, and once we built that, then we can actually partner much more deeply with the local grocery chains. So looking back, that was actually a, a difficult but, but actually a very valuable decision for us to do.

Roelof Botha: Around this time, Sequoia led Bolt’s Series E financing of $713 million.

Andrew Reed: Bolt is a complicated business ’cause you match multiple products with multiple geographies and all the underlying complexities. But on the other side of that is an enormous market opportunity measured in the hundreds of billions of dollars at least.

To me, with Markus, it all comes from him.  When he pitched Sequoia for our investment, we had 45 minutes on the calendar. I think he was done in 29, and then he asked, “Any more questions?” And we said, “No.” And he said, “Thanks,” and hung up. Like, he is hardcore, take no prisoners—he is truly incredible. 

I’ll tell one story about Markus, which was I, uh, he came over to my house and he said he wanted to go for a bike ride. I asked him what kind of ride he wanted to do and he said he wanted to do, like, the hardest ride around.

So we went up Old La Honda, which is a little over five kilometers, 8% average grade climb. And Markus, despite—I don’t think he’d been on a bike in, certainly not, like, a road bike in years—just powered up this climb. And I remember just coming to the top of it and I’m like, this guy—like, he will not quit.

Charting Bolt’s Future: From Global Scale to the Self-Driving Era

Roelof Botha:  Today, Bolt operates its ride-hailing, micro-mobility, and delivery services across more than 500 cities. It now has five different business lines that together generate more than 2 billion dollars in revenue. Bolt has become not just a major competitor with American companies like Uber and Lyft, but it has radically changed the way people move around cities.

Andrew Reed: The sort of company that is able to achieve success in such an array of markets is a company that’s not just doing the same thing over and over again on a greater scale. This is a company that culturally is built to solve novel problems and win wherever it applies itself. Like, Bolt is the number one player in Norway and South Africa. These are the opposite ends of the earth. 

Roelof Botha:  The next category that Bolt is pursuing? Autonomous vehicles.  

Markus Villig:  I am now thinking about the company’s future in two quite distinct phases. So, one is the pre-autonomy phase, and we think that’s fairly predictable because this category is just getting started. Um, ride sharing and food delivery still have years of compounding ahead of them. And it’s very clear that this is gonna be a very large and very successful business on its own. And then you have this moment, even sort of an event horizon, where you don’t really know what’s gonna happen after that, which is self-driving.

Andrew Reed: There’s a humongous change happening with self-driving and I think the existence proof of Waymo’s success in certain North American cities is not something to be taken lightly. And it’s not just because it’s technically possible, but it’s because a lot of people really love the service. And I think for Bolt, being able to, you know, play a big role in the successful rollout of self-driving around the world is the biggest opportunity this company’s ever gonna find.

Markus Villig:  So we can make our best bets in trying to position ourselves for that era. And we think we have very unique strategy there because we’re actually having the capabilities other ride sharing networks don’t have. Uh, we’ve been running our own first-party car rental business for years. We know how to clean, maintain and, and just operate thousands of cars in, in dozens of cities. And we think, coupled with our ride sharing network, that’s a very unique asset. So we’re very optimistic about the self-driving era, but everybody must admit, we’re still in the early days and nobody really knows how the industry structure is going to work out.

Jevgeni Kabanov: Bolt has this capacity to learn and improve, uh, as, as an organization, as a team. And I think it, it wasn’t just this one thing that made us great. I think it, it was the fact that every time we failed, you know, we, we learned from it and we improved.

Whenever somebody asks me how do you do something hard and big and, uh, complex, I always say, you know, it’s, uh, the way you eat an elephant—one bite at a time. So you just need to break the complex, high-pressure situation into, uh, chunks that can be done by people and then just do one at a time and keep learning and improving. And if you just keep doing those things, then, uh, and if you have great people, and if you have great talent, then you’re gonna succeed.

Markus Villig: My advice always is that you should do a few things, but do them really well. And you gotta have a very clear end goal in mind of where we are trying to take the company, but you can be flexible on the details of how you get there. And that’s the approach we try to take. And we’re always very pragmatic and analytical about how we assess these new bets and new countries.

I think there’s companies who have a lot of ego involved, so once they launch the product or a country, they’re never going to shut it down. And uh, it’s just embarrassing for them. Uh, we’ve taken the other approach, which is that we treat this as a portfolio of bets. We assign a team, we give this country, uh, a fixed envelope of how much time and then budget they get. And if it fails, we shut it down and we move on. And then we’re just an experimentation machine.  

 I think we’re always, on the talent side, very eager to focus on entrepreneurial people.

So hiring smart generalists rather than hiring very deep specialists who can only do one thing—because otherwise, you know, things change and you have fixed people who can only do one thing, that’s not really gonna work. So that, that’s been our philosophy and that, uh, it’s something we think we’re gonna continue for a long time.

VO: This has been Crucible Moments, a podcast from Sequoia Capital.

Credits: Crucible Moments is produced by the Epic Stories and Vox Creative podcast teams along with Sequoia Capital. Special thanks to Markus Villig, Pavel Karagjaur, Jevgeni Kabanov, and Andrew Reed for sharing their stories.

Unemployment among young people in the UK is hitting sales growth and profits at JD Sports, the owner of the trainer and sportwear chain has said, amid warnings about the high number of under-25s not in work, education or training.

The UK was the worst performing market for JD Group, which also owns Blacks, Go Outdoors and a number of US and European sports chains.

Régis Schultz, the chief executive, said JD was experiencing “pressures on our core customer demographic, including rising unemployment levels, as well as near-term volatility around consumer sentiment”.

His comments came as official figures on Thursday showed the number of 16- to 24-year-olds who are not in education, employment or training (Neet) remains stubbornly close to the highest level in a decade.

graph of number of 16- to 24-year-olds in the UK who are categorised as Neet

Despite a modest decline in the three months to September to 946,000, down from 948,000 in the previous quarter, campaigners said the figures from the Office for National Statistics showed Britain was at risk of failing a whole generation of young people.

The figures mean one in eight young people are Neet amid a rapid increase in unemployment more broadly, with the official jobless rate at 5%, the highest level since the Covid pandemic. Last week the Guardian revealed that almost half of all jobs shed since Labour came to power were among the under-25s.

Barry Fletcher, the chief executive of the Youth Futures Foundation, said: “This is a long-term problem that continues to negatively shape the lives of too many across the country.”

The squeeze on spare cash for young people contributed to a 3.3% slide in sales at established JD Group stores in the three months to 1 November. Sales were also down in the US and EU – by 1.7% and 1.1% respectively – amid similar pressures as well as a lack of new product launches to draw in shoppers and the slowdown in the trend for women’s vintage trainers.

The company has also suffered from a heavy reliance on Nike, which has been struggling to spur consumer interest recently with critics pointing to a lack of new ideas.

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JD said annual profits would now be at the lower end of expectations – at about £853m – and well below a once hoped for £1bn. It said it was “taking a pragmatic approach” to its outlook for this financial year, due to “incrementally weaker macro and consumer indicators in recent weeks”.

Aarin Chiekrie, an equity analyst at the broker Hargreaves Lansdown, said: “Trading across the UK remains particularly weak, with recent changes to employer taxes and minimum wages bringing a handful of extra costs and challenges.”

The weak numbers came as another youth brand, Dr Martens, said consumers were “cautious right now” and “looking for deals” right across Europe and in the US. The British bootmaker said it was putting prices up on some items in the US in January to offset the impact of Trump’s import tariffs, which it said amounted to between £7m and £9m.

Tietoevry Corporation     INSIDE INFORMATION     20 November 2025 6:00 p.m. EET

 

Tietoevry’s cost optimization programme, targeting EUR 115 million in run-rate savings by the end of 2026, is progressing well. The contribution to operating profit in 2025 is higher than anticipated and consequently, the company upgrades its profitability outlook for the full year. As the year is approaching its end, the company also narrows down growth outlook.

 

Revised outlook for 2025:

Tietoevry expects its organic1) growth to be in the range of -2% to -1% (revenue in 2024: EUR 1 879.5 million). The company estimates its full-year adjusted operating margin2) (adjusted EBITA3)) to be 13.3–13.8% (12.0% in 2024).

 

The profitability outlook includes a negative impact of approximately 1.0 percentage points on the adjusted operating margin (EBITA) related to IFRS 5 for Tech Services divestment. The impact comprises the costs that the company was not able to allocate to discontinued operations until the divestment closing on 2 September, and transition services income after that date.

 

Previous outlook for 2025:

Tietoevry expects its organic1) growth to be in the range of -2% to 0% (revenue in 2024: EUR 1 879.5 million). The company estimates its full-year adjusted operating margin2) (adjusted EBITA3)) to be 12.7-13.3% (12.0% in 2024).

 

The profitability outlook includes a negative impact of approximately 1.1 percentage points on the adjusted operating margin (EBITA) related to IFRS 5 for Tech Services divestment. The impact comprises the costs that the company was not able to allocate to discontinued operations until the divestment closing on 2 September, and transition services income after that date.

 

1) Adjusted for currency effects, acquisitions and divestments.

2) Adjustment items include restructuring costs, capital gains/losses, impairment charges and other items affecting comparability.

3) Profit before interests, taxes and amortization of acquisition-related intangible assets

 

For further information, please contact
Tommi Järvenpää, Head of Investor Relations, tel. +358 40 576 0288, tommi.jarvenpaa (at) tietoevry.com

 

 

TIETOEVRY CORPORATION

 

DISTRIBUTION

NASDAQ Helsinki

NASDAQ Stockholm

Oslo Børs

Principal Media

 

Tietoevry is a leading software and digital engineering services company with global market reach and capabilities. We provide customers across different industries with mission-critical solutions through our specialized software businesses Tietoevry Care, Tietoevry Banking and Tietoevry Industry, as well as our digital engineering business Tietoevry Create. Our around 15 000 talented vertical software, design, cloud and AI experts are dedicated to empowering our customers to succeed and innovate with latest technology.

 

Tietoevry’s annual revenue is approximately EUR 2 billion. The company’s shares are listed on the NASDAQ exchange in Helsinki and Stockholm, as well as on Oslo Børs. www.tietoevry.com

 

They’re cute, even cuddly, and promise learning and companionship — but artificial intelligence toys are not safe for kids, according to children’s and consumer advocacy groups urging parents not to buy them during the holiday season.

These toys, marketed to kids as young as 2 years old, are generally powered by AI models that have already been shown to harm children and teenagers, such as OpenAI’s ChatGPT, according to an advisory published Thursday by the children’s advocacy group Fairplay and signed by more than 150 organizations and individual experts such as child psychiatrists and educators.

“The serious harms that AI chatbots have inflicted on children are well-documented, including fostering obsessive use, having explicit sexual conversations, and encouraging unsafe behaviors, violence against others, and self-harm,” Fairplay said.

AI toys, made by companies such as Curio Interactive and Keyi Technologies, are often marketed as educational, but Fairplay says they can displace important creative and learning activities. They promise friendship but also disrupt children’s relationships and resilience, the group said.

“What’s different about young children is that their brains are being wired for the first time and developmentally it is natural for them to be trustful, for them to seek relationships with kind and friendly characters,” said Rachel Franz, director of Fairplay’s Young Children Thrive Offline Program. Because of this, she added, the amount of trust young children are putting in these toys can exacerbate the harms seen with older children.

Fairplay, a 25-year-old organization formerly known as the Campaign for a Commercial-Free Childhood, has been warning about AI toys for years. They just weren’t as advanced as they are today. A decade ago, during an emerging fad of internet-connected toys and AI speech recognition, the group helped lead a backlash against Mattel’s talking Hello Barbie doll that it said was recording and analyzing children’s conversations.

This time, though AI toys are mostly sold online and more popular in Asia than elsewhere, Franz said some have started to appear on store shelves in the U.S. and more could be on the way.

“Everything has been released with no regulation and no research, so it gives us extra pause when all of a sudden we see more and more manufacturers, including Mattel, who recently partnered with OpenAI, potentially putting out these products,” Franz said.

It’s the second big seasonal warning against AI toys since consumer advocates at U.S. PIRG last week called out the trend in its annual “ Trouble in Toyland ” report that typically looks at a range of product hazards, such as high-powered magnets and button-sized batteries that young children can swallow. This year, the organization tested four toys that use AI chatbots.

“We found some of these toys will talk in-depth about sexually explicit topics, will offer advice on where a child can find matches or knives, act dismayed when you say you have to leave, and have limited or no parental controls,” the report said. One of the toys, a teddy bear made by Singapore-based FoloToy, was later withdrawn, its CEO told CNN this week.

Dr. Dana Suskind, a pediatric surgeon and social scientist who studies early brain development, said young children don’t have the conceptual tools to understand what an AI companion is. While kids have always bonded with toys through imaginative play, when they do this they use their imagination to create both sides of a pretend conversation, “practicing creativity, language, and problem-solving,” she said.

“An AI toy collapses that work. It answers instantly, smoothly, and often better than a human would. We don’t yet know the developmental consequences of outsourcing that imaginative labor to an artificial agen — but it’s very plausible that it undercuts the kind of creativity and executive function that traditional pretend play builds,” Suskind said.

Beijing-based Keyi, maker of an AI “petbot” called Loona, didn’t return requests for comment this week, but other AI toymakers sought to highlight their child safety protections.

California-based Curio Interactive makes stuffed toys, like Gabbo and rocket-shaped Grok, that have been promoted by the pop singer Grimes. The company said it has “meticulously designed” guardrails to protect children and the company encourages parents to “monitor conversations, track insights, and choose the controls that work best for their family.”

In response to the earlier PIRG findings, Curio said it is “actively working with our team to address any concerns, while continuously overseeing content and interactions to ensure a safe and enjoyable experience for children.”

Another company, Miko, based in Mumbai, India, said it uses its own conversational AI model rather than relying on general large language model systems such as ChatGPT in order to make its product — an interactive AI robot — safe for children.

“We are always expanding our internal testing, strengthening our filters, and introducing new capabilities that detect and block sensitive or unexpected topics,” said CEO Sneh Vaswani. “These new features complement our existing controls that allow parents and caregivers to identify specific topics they’d like to restrict from conversation. We will continue to invest in setting the highest standards for safe, secure and responsible AI integration for Miko products.”

Miko’s products are sold by major retailers such as Walmart and Costco and have been promoted by the families of social media “kidfluencers” whose YouTube videos have millions of views. On its website, it markets its robots as “Artificial Intelligence. Genuine friendship.”

Ritvik Sharma, the company’s senior vice president of growth, said Miko actually “encourages kids to interact more with their friends, to interact more with the peers, with the family members etc. It’s not made for them to feel attached to the device only.”

Still, Suskind and children’s advocates say analog toys are a better bet for the holidays.

“Kids need lots of real human interaction. Play should support that, not take its place. The biggest thing to consider isn’t only what the toy does; it’s what it replaces. A simple block set or a teddy bear that doesn’t talk back forces a child to invent stories, experiment, and work through problems. AI toys often do that thinking for them,” she said. “Here’s the brutal irony: when parents ask me how to prepare their child for an AI world, unlimited AI access is actually the worst preparation possible.”

Asda is selling off 24 stores and a distribution centre – and leasing them back – to raise £568m in what has been called a “sign of weakness” as sales continue to fall.

The Leeds-based supermarket group, which is expected to release its quarterly results next week, has continued to lose market share to rivals as sales have gone backwards, despite an effort to win over shoppers with price cuts and improved stores.

Sales fell 3.9% in the three months to 2 November, according to data from Worldpanel by Numerator (formerly Kantar), which indicated a one percentage point drop in market share from a year before.

Asda’s parent group slumped to a near-£600m loss last year as sales fell and the cost of servicing its debt pile increased.

Clive Black, a retail analyst at Shore Capital, said: “From the outside it looks like a sign of weakness that tangible fixed assets are being sold at this time.”

He said the deal might help Asda to pay off debt or allow more capital to invest in the business but would also mean higher rents, meaning less cash for day-to-day operations.

“If trading was hunky dory, that can be accommodated in the big scheme of things, but that is not the case. We had expected a more stable trading position from Asda by now,” Black said. “Recent market share data has been very poor for grocery. It all feels rather tight.”

Patrick O’Brien, an analyst at GlobalData, said Asda’s promise in March under its new chair, Allan Leighton, to stir up the market with a barrage of price cuts, did not appear to have hit home.

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“There was a feeling that Asda were really going to bring out the big guns and we haven’t really seen that materialise,” he said. “We have not seen that aggressiveness on price as yet.”

Nadine Houghton, a national officer for the GMB union, which represents thousands of the retailer’s workers, said there were concerns about Asda’s future in the light of the latest lease-back deal: “Asda’s owners, TDR Capital, is selling off yet more assets to settle the debt liabilities heaped on the business by its own borrowing. Debt is up, lease liabilities are up, interest payments are up – but market share and staff morale are rock bottom.”

Asda, which has 579 supermarkets, 517 Express convenience stores and 29 Asda Living general merchandise and fashion outlets in total, said it would continue to operate from the latest batch of stores to be sold off. They have gone to two buyers: DTZ Investors and Blue Owl Capital.

The deal is part of plan to cut hefty debts at Asda since a highly leveraged £6.8bn takeover in 2020 by the billionaire Issa brothers and the private equity firm TDR Capital. TDR now controls the group after buying out one of the brothers, Zuber Issa, while Mohsin Issa retains a 22% stake.

Armarveer Singh, a credit analyst at CreditSights, said the deal would negatively affect Asda’s credit rating as it would increase leasehold exposure while the proceeds of the sale and leaseback would not be used for investment or cutting the group’s main debts. Bonds fell as it emerged that the money is to be used to pay off a debt to Walmart, the US retailer that previously owned Asda and retains a 10% stake, as first reported by the Financial Times.

Asda previously sold most of its warehouses for £1.7bn in 2021, and 25 supermarkets for £650m two years later, in similar deals in which it agreed to lease back the properties. It also signed a more unusual ground rent deal for £300m in 2023.

An Asda spokesperson said: “Asda’s property strategy is centred on maintaining a strong freehold base while also taking a considered and selective approach to unlocking value from our estate where appropriate. These transactions reflect that approach, enabling us to realise value from the sites while retaining full operational control.”

KINGSTON, R.I. – Nov. 20, 2025 – Most people can recall a favorite class or teacher who left an indelible mark on their lives. While subject matter plays a role, the deeper connection often stems from how that teacher made students feel.

Fictional characters such as Mr. Miyagi in The Karate Kid or John Keating in Dead Poets Society have inspired generations of teachers with their seemingly effortless, unconventional approaches to learning.

Teaching, however, is far from effortless. Meticulous planning is required to deliver lectures with confidence and clarity, while managing a room containing anywhere from 30 to 200 different personalities. 

“In the classroom you’re up on a stage, and students are looking at you waiting for you to do something,” says Mehmet Yalcin, an associate professor of supply chain management in the University of Rhode Island’s College of Business.

As any teacher will attest, the classroom shares a striking similarity with the big stage. The performative nature of teaching, especially when it comes to presence and delivery, can shape learning experiences as much as the content itself.

Viewing the classroom as a stage and teaching as a form of performance served as the foundation for a paper co-authored by several URI faculty members, including Yalcin and fellow College of Business Associate Professor of Accounting Anis Triki. Their paper, published in the Journal on Excellence in College Teaching, looks at the relationship between theatre skills and those assuming new teaching roles. 

“I took an acting course with our Theatre Department,” said Yalcin. “In fact, I had written a proposal about getting folks trained because I trained myself during my Ph.D. years to become a better instructor.”

As part of the initiative that led to this research project, a multidisciplinary team collaborated to explore graduate students’ experiences in the classroom. The project team consisted of colleagues Rachel Walsh and Max Ponticelli from the Theater Department; Anna Santucci, from the Office for the Advancement of Teaching & Learning, Rabia Hos and Stefanie Argus from the College of Education; and Triki and Yalcin from the College of Business.

The team hosted a workshop introducing graduate teaching assistants to theatre-based strategies. With the lead of Hos, the project team surveyed and interviewed graduate students about their confidence and preparedness before they stepped into the classroom.

In the authors’ findings, many graduate teaching assistants reported feeling unprepared, citing challenges in classroom management, content delivery and even language barriers. The assistants felt they needed training on managing a classroom. Their remarks reflected the abrupt transition from student to teacher that many graduate assistants face. Nearly a third felt they needed some form of professional development. One respondent expressed concern their anxiety would impact students’ ability to learn.

“What we saw was a lot of students felt a need to be better prepared in the classroom,” said Triki. “It’s like you’re a TA, and then you’re all of a sudden pushed into a student facing role.”

Yalcin says that theatrical techniques can enhance classroom engagement and instructor confidence. And the research bears that out. 

Based on surveys following the workshop, students expressed a greater level of security in their ability. The authors’ research suggests that even brief exposure to performance-based techniques can significantly boost self-assurance.

The workshop primarily centered on incorporating essential theatre performance skills to create better instructors. This included adlibbing, a skill essential in adapting to unpredictable classroom environments, as well as leadership skills to command a room when necessary. Students who applied some of these theatre performance skills therefore felt significantly more confident in their teaching ability to “perform” on stage in the classroom.

“Using a loud voice so that the back row can hear or using gestures in thoughtful way are the skills that you’re gaining at the end of the day,” said Yalcin.

Building on insights gained through the research, the College of Business and the Harrington School of Communication and Media have begun integrating theatre modules into graduate-level teaching practicums. The next phase of research will examine the financial implications of implementing theatre training programs for graduate assistants preparing to teach.