Upper Bound has become one of my favourite annual trips.
This year, more than 11,000 AI geeks and aspiring geeks gathered in Edmonton. I had the chance to give a main stage masterclass called Calculating Risk, Maximizing Upside.
Many people are perceived to be risk averse. Over the years, I have discovered that they are not really risk averse. They just do not have a good framework to help them understand how to take risk in order to achieve outsized outcomes.
That was the heart of my talk.
The best bets are not fearless. They are bounded, advantaged, and asymmetric.
Or, in three words:
Downside. Edge. Upside.
I wrote more about the framework on my Substack here.
P.S. I was also on the Winning with Responsible AI panel at Upper Bound. More thoughts on that in a separate post.
One of the most powerful frameworks I’ve come across is the Rule of 3 and 10, coined by Hiroshi Mikitani-san, founder and CEO of Rakuten. The idea is simple: every time a company triples in size, everything breaks.
As Rakuten grew from a handful of people into a global business, Mikitani-san noticed a clear pattern. At each stage — 1 to 3 people, 3 to 10, 10 to 30, 30 to 100, 100 to 300, and beyond — what worked before suddenly stopped working. And by everything, it really does mean everything: payroll, meetings, communication, budgeting, sales, even the org chart. The challenge is that many leaders blow right through these milestones without realizing what’s happening until it’s already broken.
What I Wish I Knew
I’ve been part of many really fast-growing companies — first as an employee, and later as a co-founder in two of them. And I can tell you, this rule is 100% true.
At Wattpad, I didn’t fully internalize it until we were approaching 100 people. By then, we had already missed natural breaking points where we could have rebuilt earlier. That lag made scaling harder than it needed to be.
Looking back, the stages feel something like this:
At 3 people, you’re a tight-knit unit where everyone knows everything.
At 10, you need to change how you communicate just to stay aligned.
At 30, the days of everyone reporting to the CEO are long gone — a first layer of leaders emerges.
At 100, there are layers of layers of leaders, and even well-designed systems need rethinking.
At 300, you’re running a completely different company than the one you started.
At 1,000, it feels like a mini-society with its own subcultures, bureaucracy, and politics — alignment becomes the hardest problem of all.
The Employee’s View
Before becoming an entrepreneur, I lived through this as an employee too. The breaking points are just as visible from the inside.
As companies scale, it gets harder to push things through. Meetings multiply, but decisions slow. Bystander problems appear — more people in the room, but fewer actually taking ownership. From the employee’s perspective, it feels frustrating and inefficient. But it’s not about capability; it’s about systems that no longer fit the size of the company.
Why This Matters
In the moment, it can feel like failure. But it isn’t. It’s simply that scale changes everything.
The good news: these challenges are solvable. Every growing company has faced them. The bad news: if you only react after things break, you’ll always be catching up instead of leading.
My Takeaway
If you’re building a fast-growing company, expect everything to break at 3, 10, 30, 100, 300, 1,000… and plan for it.
Don’t see it as failure. See it as evolution. Each breakdown is proof you’ve unlocked a new stage of growth. The chaos is part of the privilege — it means you’re building something worth scaling.
If I could go back and tell my younger CEO self one thing, it would be this: anticipate the breaks before they happen. Build a culture that embraces reinvention at every stage. You’ll save yourself and your team a lot of unnecessary pain — and you’ll enjoy the ride more.
P.S. The banner is using Ideogram Character to generate. It rocks!
P.P.S. If you enjoyed this blog post, please take a minute to like, comment, subscribe and share. Thank you for reading!
This blog is licensed under a Creative Commons Attribution 4.0 International License. You are free to copy, redistribute, remix, transform, and build upon the material for any purpose, even commercially, as long as appropriate credit is given.
A swimming world champion, a cycling champion, and a marathon champion each tried their hand at a triathlon.
None of them even came close to the podium. All were easily defeated.
Why?
Because the swimming champion could not bike, nor could he run fast.
The cycling champion did not swim well.
The marathon runner was painfully slow in the water.
The winner?
It was someone who had been humbled by the swimming champion in the pool for years, finishing second in the world championships multiple times. He was an exceptional swimmer, yes. However, he could also bike fast and run hard. Not the best in any single discipline, but strong across all three. And that is what won him the race.
The takeaway:
To win in triathlon, you need to be competitive in all three disciplines.
The winner is often world class in one of them, but they must be very good if not great at the other two.
This is the same mistake many first time deep tech founders make.
They believe that superior technology alone is enough to win.
It is not.
While technology is crucial, and in fact it is table stakes and the foundation of innovation, it must be transformed into a usable product. If it does not solve a real problem in a way people can adopt and benefit from, its brilliance is wasted.
And even if you have built world class technology and a beautifully crafted product, you are still not done. Without effective commercialization, which includes distribution, pricing, sales, positioning, and partnerships, you will not reach the users or customers who need what you have built.
Neglecting any one of them is like trying to win a triathlon without training for the bike or the run.
Just like a triathlete must train in all three disciplines, a founder must excel across all three pillars:
Great and defensible technology
An excellent product
Execution on commercialization
You need all three.
That is how you win the world championship.
P.S. If you enjoyed this blog post, please take a minute to like, comment, subscribe and share. Thank you for reading!
This blog is licensed under a Creative Commons Attribution 4.0 International License. You are free to copy, redistribute, remix, transform, and build upon the material for any purpose, even commercially, as long as appropriate credit is given.
In many companies, the bottleneck isn’t necessarily in the execution of decisions. The real bottleneck is the excessive time people waste making decisions.
When I was Wattpad’s CEO, everyone in the company knew I had a simple 2×2 framework to empower the whole team to make fast, high-quality decisions – all by themselves!
The essence of this framework comes down to two questions:
• Is this decision reversible?
• Is this decision consequential?
These two factors create four types of decisions:
1. Reversible and inconsequential
2. Reversible and consequential
3. Irreversible and inconsequential
4. Irreversible and consequential
Examples of Each Type
1. Reversible and Inconsequential
This actually makes up the bulk of decisions in a company:
• Internal Slack messages? Delete them if you don’t like them.
• Marketing team’s benign social media copy?Remove the post if it doesn’t work.
• Small typo like the one in the above image? Yes, I purposely left the typo there. I look sloppy, but I could silently replace it with a better one when I have time.
• Small bugs in the product? If a bug fix causes other problems, revert the changes.
The list goes on. The trick is to empower each person in the company to make these decisions independently. I reinforced the same message to the Wattpad team over and over again:
From the most junior interns to the most senior leaders—you’re empowered to make the call all by yourself.
No boss to ask. No approval process. Just do it!
The company moves fast when most decisions don’t require a meeting!
2. Irreversible and Inconsequential
Here’s an example:
At one point, we ran out of space at Wattpad’s Toronto HQ and needed overflow space. We found a small office—just a few hundred square feet with a couple of meeting rooms—in the building right next door. The location was perfect, but the space itself? Just okay.
The problem was the lease—it was relatively long. Once we signed, we couldn’t back out. That limited our flexibility (irreversible), but we knew that if we needed more room, we could always find another expansion space. The cost was small in the grand scheme of things (inconsequential).
Given our growth, there was little downside to signing the lease. So we moved fast, signed the deal, and moved on to the next item on the to-do list.
For this type of decision, you can still move fast. Just be careful—double-check the lease for any hidden “gotchas.” It’s not about if we sign or not. We will sign, but we just want to make sure the bases are covered before we do.
You’d be surprised how much time people waste on indecision. Just make the call and do the due diligence!
When done properly, product releases can be very consequential but still reversible. At Wattpad, we released high-risk software all the time—but always with a way to roll back if things didn’t work.
We knew how to press the undo button!
For these kinds of decisions, move fast and make the call—but monitor the outcome and always be ready to press undo.
Important: How to Increase the Quality of These Decisions
For both Irreversible and Inconsequential decisions and Reversible and Consequential decisions, always ask:
Is there any way to make this decision more reversible or less consequential?
If you can tweak the decision to minimize fallout—no matter how small—do it. It will save time and stress down the road.
4. Irreversible and Consequential
Many of these are leadership-team-level or CEO-level decisions.
They’re rare but also the hardest to make. They require a lot of context, consideration, and, sometimes, choosing between two bad options. Occasionally, you get a good one and choose between a few great choices.
The ultimate example for me?
Whether to take the company public, maintain the status quo and keep going, or accept an acquisition offer.
Sometimes, knowing which quadrant a decision falls into is an art. But imagine if we didn’t have this framework—slow decision-making would have ground the company to a halt.
The key to moving fast isn’t just execution—it’s deciding fast, too.
P.S. If you enjoyed this blog post, please take a minute to like, comment, subscribe and share. Thank you for reading!
This blog is licensed under a Creative Commons Attribution 4.0 International License. You are free to copy, redistribute, remix, transform, and build upon the material for any purpose, even commercially, as long as appropriate credit is given.
Sonos replaced its CEO last week. The company faced significant backlash after launching a redesigned app earlier last year that was plagued by bugs, missing features, and connectivity issues, frustrating customers and tarnishing its reputation. This also led to layoffs, poor sales, and a significant drop in stock price.
While I usually don’t comment on companies I’m not involved with, as a long-time Sonos user, I was very frustrated that the alarm feature I had been relying on to wake me up in the morning for well over a decade disappeared overnight. There were other issues, too.
Throughout my career, I have worked on numerous redesign projects. A fiasco like this is totally avoidable. Today, I am sharing a couple of internal blog posts I wrote for my team (when I was Wattpad’s CEO) about this topic. Of course, these are just examples of the general framework I used. In practice, there are many specific details in each redesign that I helped guide the team through, as frameworks like this are like a hammer. Even the best hammer in the world is still just a hammer. The devil is in the details of how you use it.
These internal blog posts are just some of the hammers and drills in my toolbox that I use to help our portfolio CEOs navigate trade-offs and move fast without breaking things.
Happy reading through a sample of my collection of half a million words!
Note: These two posts have been mildly edited to improve readability.
Blog Post #1 – Subject: Feature Backward Compatibility
I have gone through major technology platform redesigns many times in my career. One problem that arises every single time is backward compatibility.
The reason is easy to understand: users can interact with complex products (such as Wattpad) in a million different ways. There is no way the engineering team could anticipate all the permutations.
There are two common ways to solve this problem. First, run an extensive beta program. This is what big companies like Apple and Microsoft do when they update their operating systems. This approach is also a great way to push some of the responsibility to their app developers. Even with virtually unlimited resources, crowdsourcing from app developers is still a far better approach. However, running an extensive beta program takes a lot of time and resources. Most companies can’t afford to do that.
The other approach is to roll out the changes progressively and incrementally. It is very tempting to make all the big changes at once, roll them out in one shot, and roll the dice. However, I am almost certain that it will backfire. Not only is it a frustrating experience for both users and engineers, but it also makes the project schedule much less predictable and, in most cases, causes the project to take much longer than anticipated.
Next year, when we focus on our redesign to reduce tech debt, don’t forget to set aside some time budget for these edge conditions that are so easily overlooked. Also, think about how we can roll out the changes more incrementally to minimize the negative impact on our users.
Blog Post #2 – Subject: The Reversibility and Consequentiality Framework
The other day, I spoke to the CEO of another consumer internet company. In terms of the scale of its user base, this company is much smaller than Wattpad, but we are still talking about millions of users here.
Like us, this company has been around for over a decade. Not surprisingly, technical debt has been an ongoing concern. A few years ago, the team decided to completely redesign its platform from the ground up. The redesign was a multi-year effort, and the team finally pulled back the curtain a year ago. While it is working fine now, this CEO told me that it took a few months before they fixed all the issues and reimplemented all the “missing” features because many of their users were using the product in “interesting” ways that the new version did not support.
These problems are fairly common when redesigning a new system from the ground up. In practice, it is simply impossible to take all the permutations into account, no matter how carefully you plan. However, if we mess things up, our user base is so large that it might negatively impact (or ruin!) 100 million people’s lives in the worst-case scenario.
On the flip side, over-planning could burn through a lot of unnecessary cycles.
One way or another, we should not let these challenges deter us from moving forward or even slow us down because there are many ways to mitigate potential problems. In principle, ensuring that the rollout is reversible and inconsequential is key.
The former is easy to understand: Can we roll back when things go wrong? Do we have a kill switch when updating our mobile apps? These are best practices that we have already been using.
However, at times, these best practices might not be possible. Can we reduce the consequentiality when rolling out? If the iOS app were completely redesigned, could we do it in smaller chunks, parallel-run the new and old versions at the same time, or try the new version on 0.1% of our users first? If not, could we roll out the new app in a small country first?
Again, our objective is not to avoid any problem at all costs. Our objective is to minimize (but not eliminate) the negative impact when things go wrong—not if things go wrong. Although Wattpad going dark for 100 million people for an extended period of time is not acceptable, in the spirit of speed, it is perfectly okay if we have ways to hit reverse or reduce the impact to only a small percentage of our users. These are not rocket science, but they do require a bit more thoughtfulness because our user base is so large that we can’t simply roll the dice.
P.S. This blog is licensed under a Creative Commons Attribution 4.0 International License. You are free to copy, redistribute, remix, transform, and build upon the material for any purpose, even commercially, as long as appropriate credit is given.
In 2006, Wattpad started as a simple mobile reading app, mainly for classic books. Fifteen years later, it evolved into a global, AI-powered, multi-platform entertainment company with numerous blockbusters before being acquired.
As you can imagine, my role as CEO at the start of Wattpad—when it was just the co-founders and a few hundred users—was drastically different from leading a team of hundreds of employees and overseeing a platform with 100 million users.
A Typical Entrepreneur’s Evolution
In the early years, the founders focused solely on building a product and finding product-market fit, with little thought given to the business side. At this stage, the CEO is the engineer writing code, the product manager, and the product visionary, all rolled into one.
As traction builds and product-market-fit comes into sight, the CEO’s role begins to shift. Suddenly, hiring becomes a priority, and managing people and operations takes center stage. The CEO goes from being a product builder to a hiring and people manager who leads a small, close-knit team and handles the operations that come with it.
Fast forward another phase, and the company is growing even faster. Now, the CEO is no longer just a manager but the manager of managers, responsible for hiring leaders who can build and lead their own teams. Communication becomes an even more critical skill, as the CEO now leads a much larger team—many of whom don’t frequently interact with the CEO. Business models become increasingly crucial, and new tasks, like fundraising, take on greater importance.
As growth continues, the CEO’s role shifts yet again, this time to hiring leaders of leaders—or even leaders of leaders of leaders. Now, the CEO is juggling closing million-dollar sales with key customers, navigating strategic partnerships, working with the CFO to manage finances at scale, media interviews, building the brand, international expansion, raising capital from large institutional investors, and, of course, leading hundreds or thousands of employees. The skill set required here is worlds apart from that of the early days of coding and prototyping.
Entrepreneurship Is Constant Reinvention
Each phase of a company’s growth requires a radically different skill set: moving from building the idea to scaling a product, building the team, leading a large organization, and eventually creating a profitable business. The entrepreneur evolves from crafting the “secret sauce” to building a factory to mass-produce it.
I have yet to meet an entrepreneur who possessed all these skills from the start. The journey demands constant learning—whether it’s coding, product design, finances, fundraising, marketing, sales, or leadership.
I can testify to this: there were numerous times when I thought the company was a well-oiled machine. Six months later, things would feel like they were falling apart. It wasn’t because I had messed up, but because the environment had changed drastically in such a short time. I had to keep upping my game to keep pace with the company. I am completely different from—and better than—the version of myself a decade ago—and not just once, but many times over.
As an entrepreneur, be prepared. As your company scales, you’re effectively getting a new job every few months. This journey is thrilling and challenging, and filled with lifelong learning and self-improvement.
The Biggest Takeaway
And yet, the most important product you’re building isn’t your company’s product. It isn’t even the company—it’s yourself.
If, every two years, you’re not almost unrecognizable from your former self, you’re not growing fast enough, and you will be left behind by your own fast-growing company.
This takeaway isn’t just for CEOs. It applies to anyone working at a fast-scaling company and to anyone with a growth mindset. If you get this right, everything else will follow, and you’ll be in good shape. From my experience, this is one of the most crucial mindset-building tools you can have.
P.S. This blog is licensed under a Creative Commons Attribution 4.0 International License. You are free to copy, redistribute, remix, transform, and build upon the material for any purpose, even commercially, as long as appropriate credit is given.
Sets the overall vision and strategy of the company and communicates it to all stakeholders.
Recruits, hires, and retains the very best talent for the company.
Ensures there is always enough cash in the bank.
These responsibilities might seem straightforward, but they encompass a vast array of tasks and decisions.
For instance, ensuring there is always enough cash in the bank could imply that a CEO needs to double as a CFO, but clearly, CEOs should not be CFOs. Similarly, hiring the very best talent could include all people functions, but of course, it should not.
In other words, even with just three things, CEOs will never run out of things to do. So how should they prioritize?
One guiding principle is that CEOs should only do things that they can uniquely do. Let someone else take care of the heavy lifting.
When Wattpad started to scale, this mindset shift really helped me prioritize. This problem is much more common than you may think. Based on my observations, I would even say that at some point, most inexperienced CEOs spend too little time on things that they can uniquely do. Failing to do so, the problem could manifest itself as people in the company chronically waiting on you before they can take their next actions on projects. You lose all the leverage you have in hiring a team.
You already paid them so much money to do the job for you. Don’t do their job for them!!!!
Although this lesson is mostly for CEOs, the same principle also applies to other leaders and managers. There is a bucket called ‘only you can do.’ Note that this bucket is not called ‘I can do it better‘ because who can do a better job or who can do it faster is not the issue here. Resisting the temptation to take on a task when your team can (should!) handle it can greatly help you improve your productivity and turn you into a much more effective leader.
P.S. This blog is licensed under a Creative Commons Attribution 4.0 International License. You are free to copy, redistribute, remix, transform, and build upon the material for any purpose, even commercially, as long as appropriate credit is given.
I’m a 3x entrepreneur. I was the CTO of my first company, which failed. I was the CEO of my second one, which was acquired when it was still very tiny.
Wattpad was my third and last company, but it was my first one as a scale-up CEO. It was a very different beast. The learning curve for me was extremely steep.
Thankfully, I was very privileged to have many world-class VCs and their firms invested in Wattpad. Being surrounded by world-class investors and their network not only helped me surmount that learning curve but also helped TSFV become a much better VC firm. More on that in a different post.
One of these firms is Union Square Ventures. The first and most important thing I learned from USV’s Fred Wilson is, “What does a CEO do?”
A CEO does only three things:
Sets the overall vision and strategy of the company and communicates it to all stakeholders.
Recruits, hires, and retains the very best talent for the company.
Ensures there is always enough cash in the bank.
A CEO should delegate all other tasks to his or her team.
In my experience, it’s rare to find great CEOs and consequently, great companies, not getting these three things right. Conversely, dysfunctional companies usually get at least one of these three things really wrong.
I frequently talked about these three things with my team at Wattpad. My leadership team and all the employees knew what to expect and could hold me accountable. And they did.
So much is packed into these three things. They are deceptively simple, and yet they are extremely nuanced. There’s enough material here for a book! So, expect multiple blog posts in the future on this topic.
However, this post alone is already a great guiding post for any CEO whose company has achieved (or is beyond) product-market fit, or the team is ready to scale, say, roughly 10 people, and even for companies of much larger size.
This post is the foundation of CEOs’ leadership, and everything flows from here. I learned it, I lived it, and I can testify that this is the first thing that any CEO must get right and keep getting right throughout their tenure.
And that’s precisely why this is the inaugural post in the Two Small Fish Ventures Masterclass Series.
P.S. This blog is licensed under a Creative Commons Attribution 4.0 International License. You are free to copy, redistribute, remix, transform, and build upon the material for any purpose, even commercially, as long as appropriate credit is given.
When you work at a startup, seeking advice and gaining buy-in from the broader team can help you move faster … until it becomes a crutch.
Recently, I bumped into an entrepreneur I invested in. He’s making some changes to the direction of his company, and after explaining them to me, I pointed out some of the potential issues. He immediately asked me: “So, do you want me to revert to the old plan?”
It was the wrong question to ask.
I explained to him that it doesn’t matter what I want. As CEO, with all the context, he’s the only one who can make that decision. As an investor, I’m not thinking about his business 24/7, but he is. It’s his company, and it’s his decision what he does with it (and only his decision). Investors should share their experiences and opinions, but they shouldn’t make decisions that affect the business.
Not long after, I had an investor friend contact me about one of his portfolio companies that’s going through a pretty rough patch. My friend said: “The CEO now blames the board of directors for making the wrong decision.” My ears perked up. This was a red flag and I told my friend as such.
A company’s board of directors only has one decision to make: Hire and fire the CEO. Inexperienced CEOs have a tendency to defer difficult decisions to the board or even other people in the company. It’s not uncommon to hear a newbie (or unconfident) CEO say something like “My recommendation to the board is …” This isn’t helpful. All this does is enable inexperienced board members to jump in and make decisions out of context. It’s tragic, really.
Obviously, I’m not suggesting that there is no value to be gained from consulting with your board: Every CEO has blind spots and can benefit from another perspective. But in the end, what happens in the business is always the CEOs call.
And it doesn’t always have to be the CEO who holds the ultimate decision-making ability (nor should it). I remember speaking with a senior leader at Wattpad, and the person said: “I would advise we do this …” I quickly reminded this person that they are the head of the business unit and the only person accountable for it. It was an important decision with huge implications across the company, so of course, I expected this person would engage with the broader team to think through the different scenarios and make sure all the bases were covered, but at the end of the day, the person was the leader, not an advisor.
These three conversations illustrate one critical point. Whether you’re a co-founder, CEO, technical lead, department manager or even individual contributor, you are the presumed expert in your role, so don’t dodge making tough decisions. Remember: You are not an advisor to your own job.
