Luke Kanies on his journey from commune to CEO and why people hate working for big companies

[01:00] Paul: Welcome to The Boundless Podcast. I'm Paul Millerd and I created this podcast because I'm passionate about making sense of the future of work and having conversations with the innovators, creators, and thought leaders who are carving their path in today's fast-changing world. You can check out the podcast and more on boundlesspod.com. Today I talk with Luke Kanies, who is the former CEO founder of Puppet and Puppet Labs. I reached out to him after reading a fantastic article on Medium titled "Why We Hate Working for Big Companies." If you've read any of my stuff, you know why this would resonate with me. But I love his framing.

He grew up in a commune and has some interesting perspectives, both from that and from his experience leading an organization. We dig into it. It gets pretty nerdy and wonky, but hope you enjoy it. Let me know what you think and enjoy the pod. Luke, welcome to the podcast.

[02:04] Luke Kanies: Thank you very much. Happy to be here. Thank you for having me.

[02:07] Paul: So I stumbled upon you after reading a fantastic article on Medium you wrote called Why We Hate Working for Big Companies. I think a lot of your beliefs on this really resonated with what I've seen and studied in organizations, but also just thought your unique perspective brought a lot of power and insight to this. So, you start the article with saying you went from being raised on a commune to raising $87 million in your startup. I imagine that is quite unique in your space. Given that unique upbringing, what kind of first attracted you, or when did you first know that you weren't gonna take some typical path?

[02:54] Luke Kanies: Yeah, I mean, so when I was 8 years old, which is when I moved off the farm, I cut a foot of hair off my head and began attending public school in Nashville, Tennessee as a vegetarian who never heard of God. And this was in 1984. It'd be tough to do this today, but in 1984 it was, It was very tough. And so one of the questions when you talk about taking a standard path, one of the questions you have to ask is, well, whose definition of standard, right? Because when I was, you know, just before I moved, moved off the commune, I had a definition of normal. And then relatively quickly, uh, that definition was— I was informed that that definition was not widely shared.

And so throughout the kind of the next 8 years that I spent in school in Tennessee and then my time in college, it was clear that the majority of what kind of the rest of the world, the way the rest of the country thought about how, what they cared about, what they were interested in, I didn't really share it. And one of the things that go into the article is not really being clear how much of that is my background versus my experiences as a result of the transition or whatever. I don't have to know why, but it was pretty clear that what everyone else was going to do, I wasn't going to do it. It was pretty clear from a pretty clear age because everyone was telling me, "Hey, by the way, you don't fit in here, and so probably you're not going to succeed at what you're trying." Right.

[04:15] Paul: So early on, you were defining different metrics of success, what you were doing, and what a path or journey for you might look like.

[04:25] Luke Kanies: Well, for me, it was far more evolved or adapted than it was designed. I went to college assuming I was gonna be a scientist. That was my plan, and I got a science degree, but I went to Reed College, and one of the things that Reed does very well for its science majors is it helps them understand what it's like to be a scientist, and they were so successful at that that I concluded I did not wanna be a scientist. So I graduated with no idea what I was gonna do next and essentially bounced through a bunch of different jobs in technology, and I had, 7 jobs in 2 and a half years, in 2 years. I got fired from most of those jobs. And that like taught me a lot about, you know, getting fired teaches you a lot.

And I learned a lot about what I couldn't do anymore. Right? So when you talk about normal, it's like, okay, well, here are the ways in which I'm normal. I'm not normal and I'll get fired for it. So I need to stop. And here are the ways in which I'm not normal.

And, and those are tolerable.

[05:21] Paul: What were some of those conflicts or even bizarre experiences you had that ended with you being fired, but looking back, it's almost sensible the way you were behaving?

[05:34] Luke Kanies: I think the biggest disconnect was I would take the context I was in, which is, you know, hey, you're hired to do this thing, but I always heard that as you're hired to accomplish this goal, and what they meant was you're hired to perform this task. So there are lots of cases where accomplishing the goal requires performing the task, But there are way more cases where accomplishing the goal could be done by performing the task, but it could be done more enjoyably and probably a lot faster and higher quality if you do it some other way. And this is eventually what led me to automation, where you say, you know, your job is to set up this computer. And I go, well, that sounds really boring. But if instead I write a program to set up the computer, that actually sounds interesting and it'll be done at a higher quality and faster and all those other things.

And that's why I ended up being, being somebody who started an automation company. It started with, I know I'm supposed to go do this thing, but I think there's a better way to do that thing. And eventually I became good enough at that that I stopped being fired for it, and people considered that to be an asset. But in the early days, you know, when you're a QA intern and you think the best way to make this software higher quality is to find a certain kind of bug, and people go, yeah, you know, those aren't the ones we care about. Or honestly, just knowing how to interact professionally with people wasn't something I had familiarity with.

[06:49] Paul: So you say in one of your bios that you founded your company, Puppet and Puppet Labs, out of fear and desperation. So was that the point you were at after experimenting with a lot of these companies? How long was that process of fear and desperation until you decided to go out and do something on your own?

[07:12] Luke Kanies: The desperation is actually unrelated to all the jobs I had in the early days. So when I started Puppet, I was 29. So I was 9 years out of college at that point. And maybe almost 10, and the fear was really that I looked around. So I'd been a sysadmin for a while, and then I was successful enough at that that I became a consultant, and I was specializing in some of the tools that are out there in the market. And I had a good living.

I was making a bunch of money, but I wasn't enjoying the work. And in particular, I really enjoyed the R&D I was doing that would help me help customers. But I was really not enjoying finding customers. I was really not enjoying helping customers. I was really not enjoying the fact that my services work was, was, could never be complete. I could never offer a complete solution to my customer because I was so reliant on software written by other people.

So I quit that, didn't want to do any more consulting. I went and worked at a product that was a company that was building an automation product for people like me. But after less than 6 months, I quit. They weren't building software I would have used or would have recommended other people to use. So I looked around and I didn't have any other ideas. This is where the desperation comes from, is that it wasn't that I couldn't have gotten a job, it's that I couldn't have gotten a job that I enjoyed, that I would have found rewarding.

And so I thought about going to law school. It turns out law school is so expensive that you have to become a lawyer afterwards. I didn't want to be a lawyer. I just wanted to have the badge. Right. So I said, well, I expect I'll learn more failing to start a software company than I will succeeding at getting an MBA.

So why don't I go try to start this company? And if it works out great, then obviously that's great. And if it doesn't work out, then I probably learned a heck of a lot and I can use that as a way of changing what my career is, changing what my job is.

[08:53] Paul: In retrospect, probably a better business school experience doing that regardless.

[08:59] Luke Kanies: Unquestionably.

[08:59] Paul: Yeah, you have all the skin in the game and incentives in your favor.

[09:04] Luke Kanies: Yep, exactly. And when you can— went to school on customer money instead of on loans.

[09:10] Paul: So curious, when you were running that company, did you look for people like yourself who had kind of been fired or never fit in certain environments, or did your thinking about hiring change?

[09:22] Luke Kanies: I did. What I especially looked for is people who had gone through a lot of change. People— we did, even at the late stage, like the summer before I left, we did an offsite with my entire executive team, and out of— there were about 10 people in the room, all but one of them had, well, all but 2 of them had moved like every 2 years their entire lives. The one that hadn't moved every 2 years had a very different, very interesting background and had lived internationally right after high school for a couple years. So he had a very different background. So we tended towards people who had gone through a lot of instability, who had had to deal with a heck of a lot of change in their lives.

And as a result, they were people who tended not to fit in. They didn't, It wasn't so much that I looked for people who got fired, it's that I looked for people who had not walked the common path because I knew that what we were doing was not walking the common path.

[10:18] Paul: Were there advantages to that when you guys faced setbacks or moments of crisis?

[10:26] Luke Kanies: Well, there were two advantages, right? And the first one is what you're leading to, which is yes, it's harder to off-center somebody, it's harder to frighten somebody scare somebody who, you know, has lived in 5 countries by the time that they're 12 years old. It's harder to scare somebody who went to, you know, 16 schools in 12 years of, of, uh, of schooling before they go to college. It's like those kinds of things. It's just harder to off-center them. But the second is I'm fricking weird.

And if everyone around me is normal and I'm weird, then I end up not just not being able to work with everybody, like everybody else can work well with each other and I can't work with any of them.

[11:04] Paul: Right.

[11:05] Luke Kanies: And it turns out being able to work effectively with the team around you is really critical to success.

[11:10] Paul: Well, I imagine Portland was a good place to be to self-select for those type of people in your company.

[11:18] Luke Kanies: I would love to agree with you. Um, I love Portland. I think that Portland, the dominant characteristic of what we were doing, and you're right, like if you take a city that's about the same size of Portland, you go to Columbus, Ohio or Nashville, Tennessee or Austin, Texas. Or Indianapolis, they're going to have a smaller variety of weird people, although probably still every one of these towns has plenty of weird people. You just got to hang out in the right crowds. It's just those weird people are allowed to go out during the daytime in Portland, whereas they have to kind of hang out in the dark in these other towns.

But the dominant thing in Portland was really just the fact that there's very little software market here. Compared to places that had a software market, it was much, much harder to find people who had experience, people who had done what we were trying to do.

[12:07] Paul: [Speaker:TREVOR_BURRUS] So I'd love to shift to the article you wrote and dig into that. A key quote that really stood out to me, which was pretty insightful, especially given your background, was, "While the United States operates as a free market economy, the key agent within modern capitalism, the corporation, works more like an authoritarian state. Could you just talk a little bit about how you came to that insight, either starting in companies early in your career or building one, and what that meant to you?

[12:42] Luke Kanies: Yeah, it was a long realization. It wasn't something that happened in like an epiphany. And really, when it all came together in terms of what I understood, It was when I went to hire managers. And at a certain scale, you need managers. And it's pretty easy to prove by looking at what people have done when they tried not to have them. There's a famous story of Larry Page from Google saying, "Oh, I don't want any managers," and getting rid of all managers in development.

And then 6 months later, all the developers being like, "Please give me a manager." So the managers perform a really critical role in organizations. And, and I, I worked, I thought initially, like, do I really need managers? Can I avoid them? And the answer is no. All the other ways, all the ways of avoiding managers are really, really bad right now. And I'm not saying there isn't a way.

All I'm saying is we haven't found one yet. And so this, this, this process, this research that I went through, part of that was recognizing that I had this drive to not have managers. Well, why? What is it that I that I don't want about it. And some of that was I'd worked at big companies. Anybody who's worked at big companies, there are people who thrive at those organizations.

I am not one of those people. And most people who work at big companies, they go through this period, they experience some aspects of the misery, and there can be really great parts of it. But a lot of it is you're a cog in a faceless machine. You are a number, not a name. And you feel like your ability to be great is irrelevant. You are not supposed to be individual, right?

You're supposed to fit in. And in particular, there are all these cases where you feel like the orders you're given, the directions you're given, are at odds with reality on the ground. And so you have to choose between breaking the rules and not following the directions you're given, right? Or doing what you think is— like, if you want to do what you think is right based on what you know, and you're the only person who knows it, you kind of have to break the rules. And that's a weird thing, right? And so recognizing That was one of the beliefs I had when I started to hire managers was a critical step in me coming to the conclusion that this article is about.

[14:47] Paul: Yeah. I mean, in so many organizations— I was actually reading an article earlier today by William DerSchwitz called Solitude and Leadership. Have you ever stumbled upon this article?

[14:58] Luke Kanies: I haven't.

[14:59] Paul: But he kind of talks about the role in big organizations is you kind of end up on top in these large organizations. Organizations by just keeping the machine running or following your routine. And if you try to upend it, you're going to be either kicked out or you're going to self-select out. And it sounds like acknowledging that challenge— and I've seen these self-management organizations and they actually have managers, they just call them something else or coaches. And it's just about being more intentional about what a manager should be rather than kind of defaulting to, well, let's just kind of do what we assume we're supposed to do.

[15:40] Luke Kanies: Yeah. And even, you know, even as my company scaled, I saw the downsides of this central planning authority. And the thing that really stuck out to me and that prompted me to write the article was that if you read the way America talks about communism, it's, it's really, really bad, right? Like we talk about it like it's the worst thing in the whole world. But then if you, if you read about what they actually talk about, if you find the parts that have merit, right? Because there's a bunch of propaganda, there's a bunch of like Oh, they're just evil.

And there are a bunch of things that are really true, right? Stalin killed a lot of people and that's super bad.

[16:10] Paul: Right.

[16:11] Luke Kanies: But if you read about the parts that are real criticisms, what I found striking was how many of those parts are directly present in our organizations. And the really crucial piece, of course, is just how inefficient communist countries are. They aren't efficient at utilizing resources because the people making decisions are so far from the people taking action. Well, doesn't that sound like every big company you've ever worked at?

[16:33] Paul: Right. And we kind of bake it in this story of leadership, right? And this is the American kind of strong, powerful, know-it-all, kind of knows-everything leader. Except when you decide you need to fix anything in the organization, it's all about— and I have a lot of experience of this from my consulting career— it's let's come up with an initiative, let's have the top team figure out what to do, and then tell the organization. So did you bake in any processes or kind of beliefs or values to transcend that flow?

[17:10] Luke Kanies: I would love to tell you that I have managed to fix the problems that exist in scaling organizations, but I have not. We did a lot to try to fix— we did a lot to try to mitigate the downsides, but no question, we had a central planning system. We worked hard to listen to the ground, on the ground. But we also recognized that we, we were in an organization that required leadership, right? A free market doesn't require leadership. No one goes to the New York Stock Exchange and says, here's how we're going to trade stocks today, right?

The market doesn't need leadership. We weren't in that situation. We had to have leadership because that's the kind of organization we were in. But I did work hard to make sure that our leadership was informed on the ground. And I also worked hard to make sure people, people understood, the humans, the individuals in my organization understood. If you have to choose, if you find yourself needing to choose between doing what you're told and doing what you think is right, you should always do what you think is right.

And we'll deal with the consequences later, but the vast majority of the time, you have much better information about what you should do than I do. It's just that in the absence of that, you still need a framework within which to operate. You still need a guiding direction for the overall organization. You still need a common strategy for the company. And so I tried to be as focused as I could on providing those at the top level and not providing a complete coherent plan because once you have a project manager telling you where to sit and what to do every day, it removes any ability for you to deliver what makes you special and what makes you worth paying.

[18:37] Paul: Right. And do you think there's a scale at which any of these intentions just don't matter? You left the article you wrote kind of open to— I don't really know the answers, but there does appear to be something at scale which can't be fixed. Do you think at a certain scale an organization is just going to be a frustrating place to work?

[19:01] Luke Kanies: I think there are strategies that have a big impact and some of them work, but they don't all work for every organization. So there's a thing called the Dunbar number, which is around 150. I think it's 150 plus or minus 50 maybe. I don't know exactly. And the idea behind the Dunbar number is this is the scale at which human interactions break down. So when you've got about 150 people, you can no longer do individual relationships as a mechanism for managing an organization.

Now, if you talk to a lot of great leaders, Satya Nadella at Microsoft says he knows probably 10,000 people at Microsoft personally, and maybe his ability to personally manage his company is much greater because he, he has those personal relationships. I know I can barely remember 10 people. I know I couldn't remember 10,000. So that wouldn't work for me.

[19:49] Paul: Seems tough.

[19:50] Luke Kanies: Right? So that wouldn't work for me personally. People like— the theory is Gore, the company behind Gore-Tex and a bunch of other things, that they start breaking companies, breaking things into business units at around 150 people. So that's one strategy is to make sure you never have a team bigger than 150 people. Amazon is famous for its two-pizza teams where they're trying to make sure that problems only ever get worked on by a small enough group that those problems don't show up. Then you look at the only counterexample that scales is partnerships.

Large companies, consulting companies, lawyers, things like that, where it is functionally a free market. You're compensated based on how much you bring in.

[20:28] Paul: Right.

[20:29] Luke Kanies: But in a lot of ways, they don't really resemble an organization in the normal sense. They don't have a real hierarchy. They don't have a strategy, right? They're all pretty much independent operators within a larger umbrella, so it doesn't look like a normal organization, but that scales. Really, really well as a result.

[20:46] Paul: Right. Are there things you might do differently or experiment with if you were building another organization, or if you do in the future?

[20:55] Luke Kanies: Absolutely. The thing that I think has the most legs is recognizing that at, at above a certain scale, the problems of leadership switch from what should we do to how should we allocate capital. So if you're managing a 50-person company or a 100-person company, then you can really be close to everybody at the company. You can be really clear. And, and it's really important they can all be close to you. If they feel like there's a disconnect between what they think they should do and what they're being told to do, they know they can come talk to you.

In a 500-person organization, a 1,000-person organization, that disconnect, that, that connection is missing. And so I think around that transition point is when a CEO, a leader, needs to begin saying, You know what? I'm not in a place where I can tell you what to do anymore. So I'm going to carve the organization up, maybe not literally, maybe not into separate C-corps or whatever, but I'm going to carve the organization up and say, my really, what I'm going to be great at is, is telling, is deciding how much money each organization gets or how much of the resources we have available, whether it's money or, you know, different, different things like that. And then the challenge becomes, How do I efficiently allocate capital between my organizations? And then how do I make sure that I've— that there's some value in us all being at one company, right?

Because you might look at it and say, well, this is just a conglomerate at this point. Why, why are, why are they even under the same umbrella? Um, and I, and I don't have a great answer to that, but you didn't ask, do I have the right answer? But this is, this is the thing that I would be looking to experiment with if I were to do this again.

[22:28] Paul: Yeah, it is fascinating. I mean, when you look at companies like GE, Part of me, my gut is just, they're trying to come up with explanations why GE is struggling. It also just seems like a complexity and scale problem. They're trying to run all these different businesses under similar strategies, yet they're very distinct operating systems.

[22:51] Luke Kanies: Yeah, and I think the question of conglomerates is one that's bedeviled the country since they started happening. Every decade it seems like there's a conglomerate that's doing amazingly well. Like Berkshire Hathaway is doing really, really well right now, but then there's another conglomerate that's in the, in the process of rotting because they overextended themselves the years before. And in a lot of ways, to me, that speaks to it being a good model because just like today, there are great companies who are thriving like Google, and then there are companies where you're like, yeah, I don't think Kodak is going to be here all that long.

[23:23] Paul: Right.

[23:23] Luke Kanies: So That kind of cycle, to me, is pretty natural, and it doesn't seem like conglomerates go through a really different cycle. The question becomes, can you do the things that you would like to do with a conglomerate? Could Google have been built with a conglomerate, like they, as opposed to the current model? Now, if you look at what their model is today, it's basically a conglomerate, so I think Larry's answer would be yes, and probably we actually should have switched to that model earlier.

[23:47] Paul: Right. Yeah, that's an interesting point because I guess if you look at the models that aren't dying, there's probably something more broken in those models rather than the ones that are dying.

[24:00] Luke Kanies: Right. They've got the ability to charge monopolistic rents. They've got some sort of regulatory capture so they don't have any competition. There are things like that that are making them look better than they actually are. I agree.

[24:14] Paul: Interesting. So you also make the claim in the article The biggest problem that we have is that we have no idea to value most of the work people do. So I think I tend to agree with this, but would love to hear specifically like how you, you're thinking about that and what you mean there.

[24:38] Luke Kanies: Yeah. Let's see. So if If we didn't have this, then the— because again, the problem we have is that we can't run our large organizations like a free market. Because in a free market, I can come to you and I say, you know, look, I've got this glass of water and I think it's a great glass of water and I'd like to sell it to you. And you can say, you know what, honestly, I'm not that excited about the glass of water. I'm okay with it.

I'll pay you 5 cents for it, but I wouldn't pay you $5 for it. Right. And we can come to a pretty clear idea, pretty clear, pretty clear agreement between us of how much it's worth to make this transaction. That same kind of conversation where you go to your work every day and you say, you know what, I hear you saying you'd like me to build this feature for the product. I think that feature's worth about, you know, whatever, $5,000, and I'm willing to build it for $5,000. But if you only wanna charge me $2,000, only wanna pay me $2,000, I'm not willing to do it.

Then your boss might say, you know, well, I don't think that's fair. I really think it's only $3,000, right? So trying to imagine this conversation, this transaction conversation about all the work you do on a daily basis. You know, for one, you've got transaction costs and they're no joke. They are a big part of why we have organizations. Now, they're not a big part of why we have large organizations, but in small organizations, you don't want to have transaction costs between the clerk and the company owner, right?

But at the same time, when you look at your company and say, How much is it actually worth for me to hire a developer to do something? We don't really know how to value that because we don't know when a customer buys that product how much of what they're paying for is the thing that that developer built versus what they're paying for is something else, right? We can't break it down like that, and therefore we can't value the work of the developer. We're having to kind of say, well, I should have a bunch of developers and I should build this product, and we know what the product is worth because we can charge that to the customer. But we can't really draw clear lines between what the product is worth and what the individual contributions that led to that product are each in themselves worth.

[26:40] Paul: Right. Yeah, I love that. I mean, this captures so much about just the pain of performance management, right? The way companies are doing it. And, uh, I would imagine most people would agree that it's subjective and, uh, subject to manipulation and politics and, uh, is incredibly frustrating, but really does come down to this, right? You can't.

Value the work. And you could at some point value very simple routine labor, but as we move to more cognitive tasks, it's nearly impossible to figure out what people are doing and how they're valued. I, I've read some research about just looking at the CEO effect, right? And they're trying to measure how much impact does the CEO have on the company. And I I think they've shown it's increased, but the max in any industry is 21%, which means 80% is just like market forces, timing, different things.

[27:41] Luke Kanies: Yeah, your ability to grow your company 50% a year in a market that's growing 40% a year, it's actually not that impressive, right?

[27:47] Paul: Right. Yeah, yeah. So it's— I mean, these questions are so hard. How did you think about your role when you were CEO? And the value you were supposed to be providing the organization? Because as a CEO, you can do so many things, right?

You can do anything on most days, but it's hard to figure out what to do.

[28:10] Luke Kanies: It's a really interesting problem, and I think it's a problem that every CEO, especially every first-time founder who's a CEO, struggles with. And it's especially a struggle because whatever, you were good at that led you to start a company, you probably don't get to do that anymore. If you were a great programmer, you definitely should not be a programmer anymore as a CEO. If you were a great salesperson, you should definitely not be a salesperson anymore as a CEO. So whatever it was that got you here is definitely not what you're allowed to do anymore. And so one of the things that I advise all the, all the founders that I talk to is to come to a really crisp understanding of what makes you special, what makes you weird, uh, It's not a coincidence that you ended up running this company.

It might be luck, it might be privilege that got you here, but it's not a coincidence that of all the people who had this luck, of all the people who had this privilege, that you're the one who jumped in, you're the one who ended up in this place. It might be because you happened to have read a bunch of books. It might be that you happened to be timed well, but it's also that for some reason you said yes. For some reason you showed up the next day. For some reason it worked 3 times in a row and therefore you got a round of funding and therefore you're still around as a business. Understanding what it is about you that caused those, that sequence of events to show up is really important.

And so over time, I got much better at understanding where I could really contribute. And for me, that was product strategy, company strategy, brand, and especially not so much the visual aspect of brand, but like who we are, who our customers think of us as. Those are, those are the things that I can really contribute. Those are the things that I felt like I was one of the best people in the company at, and that if you got those right, then they could cascade down really successfully to the rest of the company. And if you got those wrong, then there was critical incoherence in the company. So it had to be done right.

It had to be done centrally, and it had to be done in a way that could cascade to the whole organization. So those are the things that I ended up really focusing on. But if you were to look at my daily calendar, I don't think you would see that in how I spent my time necessarily. And that's certainly one of the things I always struggled with because I was, you know, 8 hours back-to-back meetings, 40 hours a week. Plus 2 events in evenings every week, and so it was really hard to get my calendar to reflect my priorities, and that's kind of the next level of, all right, whatever it is you're supposed to be doing, are you actually doing that?

[30:23] Paul: As CEO too, I mean, CEO and founder, you have a lot of skin in the game. You likely had a higher amount of equity than most people. Your personal reputation—

[30:33] Luke Kanies: I hope so, right?

[30:34] Paul: Your personal reputation is on the line. How do you manage that versus the varying incentives of people throughout the organization? Especially as you scale. I imagine that's an incredibly complex problem.

[30:47] Luke Kanies: Only if you let it be. Honestly, I think that there are ways to make it complex, but there are ways to make it simple. And the, the others in my position would have been more economically successful than I was because they could have found a different way to make it simple. The only way I can make it all work was to say, "We're going to build a good company. We're going to build the best company I can build. It's going to be a stable company.

It's going to be a durable company. And it's going to be a company that, as much as possible, treats our customers well, treats our employees well." And I never allowed myself to act with privilege. And actually, to the extent that I took on a higher burden than I should have as a CEO in a lot of cases. I demanded things of myself. They always say lead by example, but in too many cases, I actually would tolerate indulgences on the part of my team that I wouldn't tolerate on my own part. And so I paid a higher price than I should have in a lot of cases.

But that was all in service of trying to say I'm not here for my privilege. I'm here to get the work done. And we've all got to do the work. We've all got to shoulder the load. And we've all got to opt in on a daily basis. Once you do that and if you can do it authentically and if people actually believe you— and I had lots of flaws as a CEO and my team was under no illusions about my not having any flaws.

But the thing that we never lost was my team always believed me. Even people who were leaving would say, "I'm super frustrated. There are all these things that are broken. All this stuff sucks, but I'll be sad to— here are the things I liked about you as a leader. I may have thought you were incompetent, but I always trusted you." That meant that when I stood up and said, you know, here's the thing I care about and I'm going to go work on this, people didn't automatically believe I was going to fix it, but they did at least believe that I was going to go work on it.

[32:38] Paul: In the CEO role, I did some— I did work with CEOs in some of my previous work and everything's magnified, right? So you're going to see every weakness, every flaw, and it's very easy for people in the organization and kind of just point those out.

[32:57] Luke Kanies: Mostly I let that roll off my back because I've got 5 siblings. I'm pretty used to being criticized.

[33:03] Paul: There you go.

[33:04] Luke Kanies: It's not something that— One of the things that I felt very comfortable doing was being vulnerable in front of my team. And kind of counterintuitively, showing that vulnerability made me feel stronger because when I exposed to you my vulnerabilities, You didn't feel like I was hiding anything from you. You didn't feel like you were worried that I was only telling you half the story. And, and I'm, I'm there. There are people who are great at hiding some information and exposing others, and I'm particularly bad at that. So I just told everybody everything.

And that meant that I didn't have to worry about which version of reality I'd shared, and I could operate more authentically because of it. That made me more comfortable, more safe, and it made my team trust me more. So that helped a lot. Not everybody has that, but it was something that I was lucky enough to have.

[33:54] Paul: So as you've transitioned to the board and the chair role, how is your perspective on the overall organization and some of the dynamics you've become aware of, and how has your mindset on that shifted?

[34:10] Luke Kanies: It's such an unrelated role. I mean, when you're a CEO, you have daily direct access, you have daily responsibility. When you're a board member, you know, you, you functionally, you should never talk to anybody at the company other than the management as presented to you by the CEO. And so you really need to have the lens as presented to the company, except in specific circumstances, because if you do anything else, then you're undermining your CEO and you're undermining the leadership of the company. So honestly, there's just no relationship. It's not like it's changed.

It's like I am on the board of a completely unrelated company. And just the fact— just because I know hundreds of people in this organization, and it's one that I built, and I designed the product, and I wrote the original one, and, you know, I was reviewing another company recently for a friend, and the demo they did was the user interface that I designed at Puppet. Like, they were demoing a Puppet installation, and it was like, I wrote this product. But that's all irrelevant, right?

[35:05] Paul: Right.

[35:06] Luke Kanies: Because the fact is that I have as much relationship to the day-to-day at Puppet as I do at Sensu or Velo, which are two other companies I'm on the board of. And I have to be as sensitive to the concerns about confusing the team about whether they should listen to the management or the board at that company as they do at other companies. And in most cases, I have more concern. I have to be more circumspect. I have to be more careful at Puppet. Because if I run into an engineer at Velo and it sounds— they're not going to walk away thinking I might have told them what to do.

But if I may say the wrong thing to a friend at Puppet, they might think that. And I got to be careful about that.

[35:40] Paul: Fascinating. So stepping back to the article you wrote in that conflict of operating in a free market economy versus these authoritarian organizations, do you have a sense of where this is headed and especially our broader labor economy? Anything you've seen that kind of addresses this conflict or how kind of labor and our relationship to work is changing? Big question, but I'd love to get your thoughts.

[36:10] Luke Kanies: I think it's getting worse. It's going to get worse before it gets better. Part of the problem is we're now at this place where the market— people have lost an understanding of what their work is. You can find 1,000 tools to help you describe your work in somewhere unrelated to your work, and then those tools will lie to you and they'll say, Oh, this description over here, it's now your work, right? If you're a developer, you can go get a bug tracker and you can open up all the tickets in the bug tracker to say, hey, I now know what all the bugs are, I know what all the features are going to be fixed, and the bug tracker is going to try to convince you that the work that you need to do is in the bug tracker. But we know that you're a developer, right?

The work you need to do is writing code. But the bug tracker is not going to try to understand your code. It's not going to try to understand your features. So in order for it to be useful to you, it has to lie to you about what your job is. If you're a salesperson, you know that your work is talking to customers and closing deals. But the Salesforce software is not going to tell you that your work is talking to customers and closing deals.

It's going to tell you your work is recording your activities, right? Your work is calling people, right? That's not the work. That's managing the work. And so in the stage where we have the ability to manage work in a way that we never have before. And so the whole market is really addicted to adding all these, these work management products.

You know, Slack is a great piece of software that helps you talk about the work, and Slack will tell you it's where work happens, but that's not true, right? It's where work is talked about, right? It's the new water cooler. And everyone knows like important conversations are had at the water cooler, but no one works at the water cooler, right? It's a critical part of the whole picture, but it's where you, where you have epiphanies and then you go work somewhere else. So I think we're going to overinvest for at least the next 10 years, hopefully not much longer, in products that help you talk about work, products that model work, products that abstract work, products that lie to you about what work is before we begin to say, yeah, but what, what is the actual work?

And are these products helping us do the actual work or are they just helping us talk about the work? Right? Am I a project manager? Am I a designer? Because if I'm a project manager, then I should be spending all my time in Trello. But if I'm a designer, then I should be in Photoshop and Illustrator and SketchUp and stuff like that, right?

Those are totally different jobs. But if you ask Trello which one is the work, they're gonna say, oh, well, Trello's the work, right? But it's not.

[38:41] Paul: No, that's a fascinating framing, and especially if you apply to big organizations, you, you find a lot of people doing things just to do things. Or, well, John did this before for 10 years, so we got to keep doing it. And I did an experiment once in one of my previous jobs where I just stopped sending a report. Nothing happened. And this is a report people were spending like 8 hours on a month. And just like nobody said anything for a year.

[39:12] Luke Kanies: One of the interesting things that I learned from studying lean manufacturing. So lean manufacturing is all about reducing waste. And they've got, depending on which article you read, 7, 8, or 9 kinds of waste they're trying to reduce. And it really helps to puncture a lot of these perspectives we have about what matters. And one of the things that big companies, and really any manager, tends to be really intolerant of is slack time, right? Hey, you've got to be busy all the time.

You always got to be hustling, always be working. But one of the first things you learn when studying lean manufacturing is how important it is to not demand that your people work all the time.

[39:51] Paul: Right.

[39:51] Luke Kanies: And it's really fascinating to look around an organization and see how much dysfunction is created because we can't tolerate the idea that once in a while people should just sit there and not touch anything.

[40:01] Paul: Right. Yeah, I love that insight. I, my, I started my career in lean manufacturing and It's, it seems that nobody has actually read anything about lean manufacturing because if you read, uh, Toyota's original, um, concept of it, it's the biggest point is really respect for people and belief in their ability to solve problems and on the ground discipline with intelligent, well-trained people.

[40:30] Luke Kanies: That's it.

[40:31] Paul: But it's turned into 20 to 30 years of we need to lean this out. We need to be more efficient. It's a pet peeve of mine, so I'll join you on that mission to get people to read this stuff.

[40:44] Luke Kanies: And if you look at the way people are trying to translate Lean into the modern economy, it's all, let's take Post-it notes. Like, we're Lean because we use Post-it notes to represent work. It's like, I'm sorry, the Post-it notes aren't work. The work is the work. Whereas in actual Kanban, which is one technique used in Lean, the Post-it notes don't represent work, they represent state. And so like the transition of using cards in Lean to using cards in programming literally inverted the meaning, but they didn't change any of the terms.

It's like, oh, we're all Lean. It's like, no, that's the exact opposite. Like none of the, none of the systems work. It all breaks down. None of it works.

[41:21] Paul: So for you, what are you thinking about for next steps? There was a quote written about you which said, uh, you can bet his next steps will involve building something that unlocks new markets, makes someone's life just a a little bit simpler and hopefully better and involves entering another dense period of personal learning and growth.

[41:45] Luke Kanies: That's actually my phrase. I don't know who quoted it, but that was a phrase that I wrote originally.

[41:51] Paul: Yeah, that could have been your quote. So it leaves a lot of options open there.

[41:56] Luke Kanies: That was intentional, yeah.

[41:58] Paul: What's in your future in terms of work or less work or no work?

[42:03] Luke Kanies: Well, I'm not— I'm neither financially sound enough nor mentally prepared enough to retire, so I still need to do stuff. I'm advising a ton of companies right now, and I'm finding that both really instructive and also really rewarding. I'm getting a lot of value out of it personally, but I'm also learning a lot in the process. And I especially enjoy advising first-time entrepreneurs, people who really don't know what the map is. So I expect to continue doing that.

[42:31] Paul: I—

[42:32] Luke Kanies: right now what I'm working on is I'm trying to build up a startup studio where we help build power tools for people. I want to help— I want to— there are a few ways to look at Puppet, and one way to look at Puppet is it's an infrastructure— it's a piece of infrastructure software. But the way that I tend to think about it is there were a bunch of humans whose lives— who I built a product for, and when they use that product, the work they did changed, and they went from doing a bunch of menial work and a bunch of firefighting to instead a bunch of upfront planning, a bunch of thinking deeply about their problems. They got to go home on time. They stopped getting paged on weekends. So I'm not going to say Puppet changed the world, but it certainly changed the world of these humans, right?

Of these people, the sysadmins who use Puppet. And I got to see this firsthand. I go to a conference and it happens today, and people walk up, I'll be in the airport somewhere random and someone will come up and go, "Hey, are you the Puppet founder?" And they'll say, "I just wanted to thank you because I still have a job because of you, because I have a career because of you." And I think that that's the thing that I care about, right? I think it's great that it's used in all these machines and all this stuff, but it's the humans that I actually care about. And there's this myth in America that automation destroys jobs, but that's not what destroys jobs, right? In general, in the vast majority of cases, and certainly in a growing market, Automation increases productivity and increases wages.

It actually raises your wages. It doesn't get rid of your jobs. Um, and so what I want to do is I want to help bring software, bring automation in the form of software to, to people who don't currently have software tools for their jobs. And in the short term, it's going to be people who look a lot more like me because those are the ones that I understand well. Those are the ones I know better. But in the medium term, in the long term, what I want to be great at is helping Really find the users, find the humans who are devalued by the current market, who the current market says, "You know, it's not worth building software for them.

I'll build software for the person who owns their company or for their boss or for their executive, but I won't build software for them." In the same way that I think central planning at organizations is really broken and in most cases doesn't work, central buying in organizations is really broken and doesn't work. So if you trust the CIO to make a buying decision for what software somebody 9 levels below them in the organization is going to use to do their jobs, I think you're going to be sorely disappointed. And yet, that's how most buying happens today. So what I really want to do is build an organization that's great at building software for the people on the ground, and then find ways to make that a profitable business. That's what I want to do.

[45:06] Paul: I love it. You're almost unlocking a free market of creativity in these organizations, so you're doing your your part to upend the authoritarian state.

[45:16] Luke Kanies: Doing what I can. Doing what I can.

[45:18] Paul: Awesome. Well, this was super insightful. I really appreciate the time and going deep on this. I definitely learned a lot. Anything else you want people to check out or if they want to connect with you?

[45:33] Luke Kanies: Thank you so much for having me, first of all. I really appreciate it. If you want to follow me on the internet, all my writing is at LukeKanies.com and I have double Publish it all to Medium also. And then I'm PuppetMasterD on the Twitters.