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On a Monday morning in July 2006, Peter Thiel, Jim Breyer, and Mark Zuckerberg met for a board meeting. The topic: Yahoo’s $1 billion offer to buy Facebook. Though Zuckerberg’s company was not yet profitable, Yahoo saw potential in the upstart social media company. 

To Thiel and Breyer, Yahoo’s offer looked like a winner, delivering a major windfall after just two years of operations. “Both Breyer and myself on balance thought we probably should take the money,” Thiel recounted years later. They told 22-year-old Zuckerberg to cash out and use the proceeds to embark on a new adventure.

Zuckerberg understood Thiel and Breyer’s position and the potential wisdom of a sale. After all, Facebook was not the only player in its category, nor the most promising by the numbers. “And at the time, we had 10 million people using Facebook, and Myspace had 100 million people, and it was growing faster,” Zuckerberg said at a staff meeting in 2017. “If you believe all the arguments about network effects, there’s no chance that we should’ve been able to compete.”

And yet Zuckerberg was certain: Facebook was not for sale. He had no use for hundreds of millions of dollars, and as for his vision, he had barely scratched the surface. According to Zuckerberg, it was a deeply unpopular decision with both employees and investors. He believes he would have been fired if he hadn’t held voting control over the company.

Over the succeeding eighteen years, Zuckerberg built one of the world’s largest companies with a valuation cap that crested $1 trillion in 2021 – a high it is approaching once more. Whatever one thinks of parent company Meta, from a business perspective, Zuckerberg’s decision was undoubtedly the correct one. Selling in 2006 would have meant missing out on 99.9% of the potential value created, with more likely to come.

Every exceptional founder has experienced a version of this story. To build a great company, a CEO must make frequent unpopular decisions – choices that go against accepted wisdom, employee sentiment, and the wishes of a board of directors – and be proven correct. 

This edition of The Braintrust focuses on this under-discussed aspect of company building. Eight top-tier founders have shared the least popular but most impactful decisions they’ve made. Their contributions highlight the trickiness of timing fundraises, managing difficult customers, shutting down business units, and letting go of team leaders. 

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In brief

If you only have a few minutes to spare, here are eight highlights from The Braintrust’s contributors on unpopular but effective decisions they’ve made.

1. Pedro Franceschi shares what Brex learned from shutting down its SMB unit. 

2. Avlok Kohli explains how AngelList dealt with 2021’s hyper-growth. 

3. David Hsu talks through Retool’s “customer, company, team” framework. 

4. Trae Stephens discusses how Anduril uses analytics to track R&D progress. 

5. Immad Akhund describes one of Mercury’s unorthodox hiring practices – and why it works.

6. Christina Cacioppo lays out why Vanta waited for a bear market to raise a Series B.

7. Jack Altman articulates why Lattice invested in a new product despite disagreements.

8. Mathilde Collin shares how she brought Front’s employees back to the office. 

Read on to discover the full list of tactics and strategies.

“[W]e had to ask ourselves: do we want to be mediocre for everyone, or do we want to be the best quality service for venture-backed startups and enterprises?”

Pedro Franceschi, Co-founder and Co-CEO at Brex

One critical decision we made at Brex towards the end of 2021 was shifting our business away from supporting SMBs. This was a massive pivot that surprised many. We had experienced a ton of growth with SMBs and had invested significant time and resources into building products for them. However, we realized that our initial venture-backed startup customers were scaling beyond the products we had built for them. They needed software to help manage their spend at scale - and their needs fundamentally differed from SMBs. 

We found ourselves pulled in different directions by our customers, and we had to ask ourselves: do we want to be mediocre for everyone, or do we want to be the best quality service for venture-backed startups and enterprises? 

While it was a painful decision to make, the answer was clear to us. And the reality is good strategy requires tradeoffs and focus. Making these decisions gives you meaning as a founder - you need to be able to double down on the parts of the business aligned with the greater vision. 

A lot of learnings came out of executing this pivot, one of the most valuable being the importance of clear communication. We didn’t clearly define what we considered to be an SMB vs. a startup in our external messaging, which left many of our customers rightfully confused and angry. We did our best to clarify further afterward and made it a priority to show our venture-backed startup customers that they were still core to Brex. However, it has taken time to earn back trust and credibility – to ensure our customers know we’re here for them. It was a painful few months. 

The key point here is that weighing tradeoffs and making tough decisions is a sign of sound strategy. But how you go about then executing that decision – how you galvanize your teams against the decision, how you tell your customers what it means for them – is just as important as the decision itself. We’ve taken this to heart and now ensure that every strategic decision we make as a leadership team at Brex starts with understanding the customer experience that will result from the decision.

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“It suddenly became very clear that AngelList was about to massively blitzscale.”

Avlok Kohli, CEO at AngelList

Two months into stepping into the CEO role at AngelList, the team escalated a customer issue to me. It was a pretty gnarly case – the customer and our team had endured a tumultuous relationship that had led to a lack of trust between them. 

The team had a direct recommendation: fire the customer. They believed they were not a fit for the platform and that the best course of action was to part ways. As a new CEO, there was a temptation to follow this guidance. When you’re not the founder of an organization, and you step into a leadership role, you need to build up social capital internally. This was a decision that offered a quick bump. With one move, I could easily gain social capital with a team I was still getting to know. 

But when I looked at the customer’s complaints, I realized they were right. I could tell that they were pissed off – I had to take their delivery out of it – but the substance of what they were saying was correct. It was that simple: they were right, and we were wrong. I told the team we were going to keep the customer. It was a contentious moment.

The way I like to handle big decisions like this one is to explain the framework I used to make it and the principles I prioritized. I’ll also share the alternatives I considered and make it clear that I’m accountable for the final judgment. Even though it ran counter to the group’s preference, the team appreciated the time I took to outline my thinking. In the end, it increased the trust between us. 

Another unpopular decision I made came during the pandemic. It suddenly became very clear that AngelList was about to massively blitzscale. I could feel it, and so could the team. We knew everything was about to break. To handle that growth, some employees wanted AngelList to introduce a waitlist, gating the number of people using the platform at a given time. That would have allowed us to build up our systems gradually but would have meant missing out on a chance to pull our business forward. 

We put it up briefly before I said, “Let’s remove it.” I told the team, “We should not be having a waitlist. We need to work double time.” Again, you can imagine making a very different decision depending on how you rank order your priorities. 

Though AngelList logged rapid growth in 2021, my decision did have a cost. I couldn’t point to it exactly, but on the margin, there are probably one or two employees who left the company because of the intensity of that period. And even though I talked through my decision-making, some employees still disagreed with it. They felt we should have moved slower. That’s ok – it’s just a question of optimizing for different principles.  

Ultimately, CEOs need to know that there is no perfect decision. None. Many people bang their heads against the wall trying to find the right choice – but there is no right choice. The best you can do is to find a decision that fits your framework and reflects your priorities. Trade-offs are inevitable.

“It is the CEO’s responsibility to make these hard decisions. (Since if you don’t do it, who will?)”

David Hsu, Founder and CEO at Retool

There are many instances where what is best for a particular team member, in a specific instance, might not be what is best for the company in the long term. There are instances where what is best for the whole company in a particular moment might not be good for the company long-term. As a company leader, it is your job to figure out how to maximize your company’s long-term impact and value, and that often means making tough decisions. 

We used to have a company value called “customer, company, team.” The idea is that we're supposed to optimize in that order: do what’s right for the customer, do what’s right for the company, and then do what’s right for the team. What is best for the company might often be worse for any individual team (or team member), but we believe that what is best for the customer or the company is ultimately what is best for the team, too.

In our case, there have been a few painful decisions. For example, pricing and packaging is typically a category where decisions are hard. Two years ago, we decided to expand our free tier to include self-serve deployments (which used to be one major reason you would have to talk to sales). Our go-to-market teams were concerned about this change: they didn’t want to “lose” deals to self-serve. And so there was a lot of consternation about the change and a lot of attempting to convince us that this was ultimately a bad decision. We ended up making the change because we thought it was the right long-term decision for the business, and today, there are many self-serve customers on the on-premise deployment plan. This has enabled the sales team to focus more upmarket, on more interesting accounts (therefore, they are more efficient), and also enabled us to serve customers where it wasn’t profitable to serve before (in a sales-led way). So it was the right decision — but one the team was certainly against. It is the CEO’s responsibility to make these hard decisions. (Since if you don’t do it, who will?)

“We have a great track record so far, but we also recognize that we haven’t, historically, and won’t always, in the future, get this right.”

Trae Stephens, Executive Chairman and Co-founder at Anduril

Anduril is a multi-product company investing our own dollars at risk into building platforms for the United States defense community and our allies and partners. The “at risk” part of that sentence is scary. We have a great track record so far, but we also recognize that we haven’t, historically, and won’t always, in the future, get this right.  

For us, this means that we need to build clear analytics around tracking R&D as well as Business Development milestones for each new project we start and have regular check-ins to determine when we need to cut bait if things aren’t working.

We’re still early in building infrastructure internally around this decision-making process, but we feel like we’ve made a lot of progress. I’d love to hear from other founders in similar positions about how they’ve approached a similar problem.

“[T]his has been a really important part of scaling our team and maintaining such a strong company culture.”

Immad Akhund, CEO and Co-founder at Mercury

A good example of this might be the Mercury Presentation. Basically, I recommended that every role we were hiring for that didn’t have a deep role-specific exercise associated with it (like designers or engineers) would instead have to do a presentation with a 10-15 minute slide deck on a topic that they consider themselves an expert on. This could literally be anything – the only guidelines are to pick a topic they’re passionate about without choosing something overly personal, giving the presentation some structure, and getting into the mechanics or digging into a moderate amount of complexity.

The idea behind the presentation is for it to be less judging the presentation itself but instead testing for a few different core competencies through questions and discussion, the big ones being creativity, first principles thinking, ability to communicate, adaptability, structured thinking, and depth of knowledge. Enumeration questions, for example, can help interviewers understand a candidate’s depth of knowledge and ability to structure their thoughts in a good way. Ambiguous questions can demonstrate creativity and the ability to think on the fly. We’d basically prep an interview panel with a framework for asking the right questions to assess the core competencies and then score the presentation according to an internal rubric. 

The pushback the presentation initially ran into came down to four main things: 

1. It felt unusual and other companies don’t do something similar

2. It requires a lot more interviewer training

3. It takes about 2 extra hours to get interviewers to do it

4. It tests for general curiosity and other attributes rather than role-specific skills

5. [There was also some argument about whether it introduces bias. A parent might be too busy to have a hobby. I don't really agree with that since a parent could talk about how they think about education for their kids or whatever, but it is a factor]

For me, the extra investment in training interviewers and ensuring a strong culture fit is worth it to make sure that we’re building a team that preserves the integrity of Mercury and fits in well with how we work. Presentation interviews also often act as a strong filter against people who interview well in other places but quickly falter when you go deep on subjects. In my opinion, this has been a really important part of scaling our team and maintaining such a strong company culture and work caliber at the same time. 

“One of the primary jobs of the CEO is to capitalize the company. Was I being remiss by not taking what seemed like free money?” ...