Notion's lost years, near collapse during COVID, staying small to move fast, building horizontal

Notion's co-founder, Ivan Zhao, recounts the company's journey. Early years involved experimentation, initially focusing on developer tools before pivoting to a productivity suite. Finding product-market fit took years, requiring a shift from a developer-centric to a user-centric approach. The company's philosophy centers on building tools that enhance human potential, emphasizing creativity and thoughtful design. Success involved overcoming challenges, including financial struggles and adapting the product vision based on user feedback. Notion's current focus is on leveraging AI to enhance its platform and expand into B2B markets. Notion's initial focus on a developer tool failed to resonate with users. Realizing most people prioritize task completion over software creation, they pivoted to a productivity tool, incorporating their original vision of user-created software within a user-friendly interface; this involved a two-year process of understanding user needs and market demands. The segment explores the philosophical underpinnings of Notion, viewing it not merely as a productivity tool but as an extension of human potential. It discusses how tools, when shaped and integrated into our lives, can reciprocally influence and enhance our capabilities, ultimately augmenting human intellect and problem-solving abilities. The early years of Notion involved multiple iterations, beginning with a developer-focused tool that failed to gain traction. The company ultimately shifted to a productivity-focused approach, integrating their original vision of empowering users to create software into a more accessible and user-friendly product. This pivot took several years and involved significant learning and adaptation. Notion's development involved discarding code and rebuilding the product multiple times due to underlying technical limitations. The company faced financial challenges, relying on personal loans and bootstrapping to persevere through setbacks, highlighting the resilience and determination needed to navigate the complexities of product development and market validation.The founders' personal passion for creating a tool that fosters creativity and playfulness fueled their perseverance through years of setbacks. They drew inspiration from childhood experiences with toys like Lego, aiming to create a similarly intuitive and empowering software experience for users. This segment reveals the deep-seated motivation driving Notion's development.Facing a critical juncture, the Notion team relocated to Japan, a significant decision driven by the need for a change of scenery and renewed focus after laying off employees. The segment highlights the importance of team cohesion and the founders' ability to work effectively together during challenging times. The relocation proved beneficial, providing a fresh perspective and renewed energy for development. This segment explores the importance of building a product based on personal values and authenticity while ensuring its usefulness to others. The speaker reflects on the long-term fulfillment derived from creating something genuine and valuable, contrasting it with the potential pitfalls of solely focusing on market demands or personal gratification. This discussion highlights the delicate balance between personal passion and user needs in product development. This segment emphasizes the power of achieving progress through improved abstractions, which can lead to exponential growth and quickly overcome past inefficiencies. The speaker uses the example of advancements in Large Language Models (LLMs) to illustrate how breakthroughs in fundamental understanding can rapidly accelerate development and surpass the achievements of those who have been working linearly for longer periods. This offers valuable insights into strategic innovation and technological advancement. This segment discusses the speaker's experience with achieving product-market fit, emphasizing that it wasn't a sudden event but rather a gradual process. The speaker highlights the importance of consistent progress and a balanced perspective, where highs aren't too high and lows aren't too low, allowing for sustained effort without discouragement. This offers a realistic and encouraging perspective on the journey to product success. The speaker draws a compelling analogy between the transformative impact of cheap aluminum on air travel and the potential of new technologies like semiconductors and AI to unlock new possibilities and reshape industries. He emphasizes the need to balance technological advancements with human behavioral limitations and the crucial role of product makers in finding the sweet spot between these multiple dimensions to create durable products. This segment details the speaker's deliberate strategy of maintaining a lean and efficient company structure at Notion. The speaker explains how their multi-skilled team and reliance on internal tools, like Notion itself, have contributed to profitability and a focus on product development over external pressures. The concept of "talent density" is introduced as a key metric, highlighting the importance of quality over quantity in team building.This segment delves into the reasoning behind Notion's lean operational model. The speaker clarifies that this approach stems not from a cost-cutting mentality but from a belief in the power of efficient systems and streamlined processes. The "small bus" metaphor is introduced to illustrate how a smaller, more agile organization can navigate challenges and adapt more effectively than a larger, less maneuverable one. This provides practical advice for maintaining a lean and efficient business.This segment explores the speaker's meticulous approach to creating a positive and productive office environment. The speaker emphasizes the importance of aesthetics and comfort in fostering creativity and productivity, describing their efforts to create an office that feels more like an artist's studio or a home. This offers a unique perspective on the role of the physical workspace in shaping company culture and employee well-being.This segment discusses the speaker's approach to product development, emphasizing the importance of creating tools that stand the test of time, drawing inspiration from historically significant products. The speaker introduces the concept of "craft" as a blend of skill, taste, and personal values, highlighting the importance of thoughtful design and execution in creating lasting products. This provides valuable insights into the philosophy behind building enduring products and services.This segment focuses on the critical role of trade-offs in product development and business strategy. The speaker underscores the absence of free lunches and the necessity of making deliberate choices, emphasizing the need to understand market demands and user needs while balancing competing priorities. This offers a practical framework for decision-making in a dynamic environment. The speaker discusses his journey as a leader, highlighting the evolution from a more direct communication style to a more nuanced approach necessary for managing a growing business. He emphasizes the importance of storytelling and adapting to the needs of a scaling company, treating leadership as a craft requiring continuous learning and skill development to navigate the complexities of a dynamic business environment. The speaker reflects on a period where Notion shipped products that deviated from their core values, leading to internal challenges and customer dissatisfaction. He describes the process of recognizing this deviation, the subsequent course correction, and the importance of aligning product development with core values to maintain employee and customer satisfaction and avoid "organ rejection."The speaker details a specific instance where a product launch, based on a hard-coded approach, failed to resonate with users. This led to a reevaluation of their development strategy, highlighting the value of community feedback and the importance of returning to first principles. He emphasizes the iterative nature of product development and the need to adapt based on user experience. The speaker recounts a critical period where Notion faced a near-catastrophic infrastructure failure, threatening the entire platform's functionality. He describes the intense effort to resolve the issue, the tight deadline, and the lessons learned about infrastructure planning and the importance of avoiding premature optimization while still planning for scalability. This segment illustrates the historical pattern of software development, moving from unbundled applications (like early database software) to bundled suites (like Microsoft Office) and back to unbundled SaaS solutions. The speaker argues that the market is currently shifting towards more bundling due to AI and macro trends, highlighting the importance of understanding this cyclical trend when deciding on a vertical or horizontal product strategy. The speaker discusses Notion's approach, not just as a productivity tool, but as a philosophy of work and life, emphasizing how tools extend human capabilities and shape us in return. He contrasts this with the rigidity of traditional software, expressing a preference for amplifying creativity and beauty in software, aligning product development with personal values and shaping user experience positively. The speaker discusses the unique challenges and rewards of building horizontal software platforms, contrasting them with vertical solutions. He introduces the concept of "solutions" versus "Lego bricks," explaining how a horizontal platform needs to offer both individual components (bricks) and pre-packaged solutions (boxes) to cater to different customer needs and market segments.This segment focuses on the importance of segmentation in building a successful horizontal platform. The speaker explains the shift in mindset required to cater to enterprise customers, emphasizing the need to offer pre-packaged solutions ("Lego boxes") while still maintaining the flexibility of individual components ("Lego bricks"). He highlights the importance of clear market positioning and aligning internal teams around a shared vision.The speaker shares survey results demonstrating Notion's unexpected success in various market segments, including project management and CRM. He attributes this success to the platform's flexibility and ability to address multiple use cases within a single tool, highlighting the growing trend of bundled software purchases.The speaker offers advice for founders building horizontal tools, emphasizing the importance of identifying a strong initial use case with a large potential user base. He shares Notion's experience of starting with note-taking and document sharing, which then expanded into other areas, highlighting the power of a broad initial appeal to fuel growth into more specialized areas.The speaker discusses the significant impact of AI on Notion's product development. He explains how AI capabilities, particularly in writing and search, enhance the platform's functionality and create new opportunities, particularly in building custom knowledge-based agents for various vertical use cases. This segment shows how AI can be leveraged to improve existing features and create entirely new functionalities. This segment highlights a significant outcome of Notion's design: enabling non-programmers to create and sell profitable Notion templates and apps. The speaker advocates for looking beyond the tech industry for inspiration, suggesting that studying history and other fields can reveal valuable patterns and solutions applicable to technology product development. The speaker shares his preference for books and documentaries focusing on complex systems and the interconnectedness of ideas. He recommends exploring the concept of complex systems, where simple components create emergent properties, and suggests watching documentaries that reveal connections between seemingly unrelated fields, particularly beneficial for product development. This segment reveals the speaker's personal motto of crafting unique and useful products and his approach to hiring. He emphasizes the value of craftsmanship and seeks "misfits"—exceptional individuals who approach software development with creativity and a unique perspective. He invites listeners to connect with him for feedback or career opportunities. Notion's initial 3-4 years were "lost years," involving many iterations before finding product-market fit. The initial focus on developer tools failed to resonate. A pivot towards productivity software, described as "sugar-coating the broccoli," proved successful. This involved building a tool people actually wanted to use daily. Key to Notion's success was balancing business needs (revenue, users) with artistic and aesthetic values. This created a product with lasting appeal. The founders' personal experiences (e.g., Ivan's background, the mom's loan) significantly impacted the company's trajectory. Notion's philosophy centers on tools as extensions of human potential, aiming to enhance creativity and productivity. Product-market fit wasn't a singular "aha" moment, but a gradual process of user feedback and iteration. Maintaining a lean team and prioritizing internal alignment were crucial for Notion's growth and profitability. Thoughtful design and a positive work environment contributed to the company's culture and productivity. Notion's approach involves strategic trade-offs, balancing technology advancements with user behavior. The company's recent focus is on aligning product development with its core values, resulting in improved quality and velocity. Notion's horizontal platform strategy, likened to building "Legos for software," allows for broad market reach but presents unique challenges. The company is strategically moving towards bundling offerings and leveraging AI to enhance its product capabilities. Notion's philosophy emphasizes the interplay between tools and human potential, aiming to amplify creativity and productivity. Prerequisites: A foundational understanding of software development principles and the history of computing would be beneficial. Familiarity with basic programming concepts and the evolution of user interfaces is helpful. Exposure to business principles, particularly product market fit and revenue generation, is also advantageous. Learning Sequence: Early Years and Vision: Begin by understanding the initial struggles and pivots in Notion's development. Focus on the early versions, the shift from developer tools to productivity software, and the importance of understanding user needs. Analyze the "lost years" and the iterative process of finding product-market fit. Product Development Philosophy: Dive deep into Notion's philosophy of building a product versus a business. Understand the balance between aesthetics, value, and revenue. Explore the concept of Notion as "Lego for software" and its implications for design and development. Technical Foundations: Examine the underlying technology choices made by Notion, including the shift from React to Web Components. Understand the importance of choosing the right technical foundation for long-term success. Growth and Scaling: Analyze Notion's growth strategy, focusing on aspects like AB testing, feature management, and experimentation. Understand how Notion leveraged data and analysis to drive product development and user acquisition. Product Management and Team Building: Learn from Notion's approach to product management, team building, and internal communication. Understand the importance of a lean team and the role of internal alignment in achieving company goals. Market Dynamics and Trade-offs: Study Notion's approach to navigating market changes and making strategic trade-offs. Learn how Notion balanced technological advancements with user behavior and market demands. AI Integration and Future Directions: Explore Notion's integration of AI capabilities and its plans for future development. Understand how AI is reshaping Notion's product strategy and market positioning. Bundling and Market Trends: Analyze Notion's approach to bundling features and services. Understand the shift in market trends from unbundling to bundling and how Notion is adapting to this change. Practice Suggestions: Case Study Analysis: Conduct a thorough analysis of Notion's case study, paying close attention to the challenges faced, decisions made, and outcomes achieved at each stage of development. Product Teardown: Dissect Notion's user interface, features, and functionality to understand its design principles and user experience. Competitive Analysis: Compare Notion to its competitors to identify its strengths, weaknesses, and unique selling propositions. Market Research: Conduct market research to understand the current trends and opportunities in the productivity software market. Product Design Exercise: Design a new feature or product for Notion, applying the principles and philosophies discussed in the video. Business Plan Development: Develop a business plan for a new productivity software product, incorporating the lessons learned from Notion's journey. After returning back adding notes here add sc after this Now it is the end