Notion’s lost years, its near collapse during Covid, staying small to move fast, the joy and suffering of building horizontal, more | Ivan Zhao (CEO and co-founder)
Ivan Zhao, co-founder & CEO of Notion, discusses Notion's "lost years," building a horizontal product, staying lean, and leadership. He shares insights on balancing vision with user needs and leveraging AI.
Deep Dive Analysis
14 Topic Outline
Ivan Zhao's Early Life and Path to Tech
Discovering Notion's Founding Vision and Inspiration
The 'Lost Years' and Pivoting Notion's Product
Perseverance Through Multiple Rebuilds and Layoffs
Finding Product-Market Fit and Investor Interest
Notion's Philosophy of Staying Lean and Efficient
Creating a Thoughtful and Inspiring Office Culture
The Importance of Craft and Values in Product Building
Leadership Lessons and Personal Growth Challenges
Notion's Near-Collapse Due to Database Scaling Issues
The Joys and Pains of Building Horizontal Software
Leveraging AI to Enhance Notion's Modularity
Philosophy of Tools and Human Potential
Advice for Learning and Finding Inspiration Beyond Tech
4 Key Concepts
Sugar-coating the broccoli
This mental model describes hiding a grand vision (the 'broccoli') behind something people immediately want and understand (the 'sugar'), like building a productivity tool to secretly enable broader software creation. This approach helps get users interested in a product that initially might not resonate with their immediate needs.
Craft and Values
Notion's internal philosophy combines 'craft' as applying technical know-how, clever trade-offs, and aesthetic direction to create something new and useful. 'Values' represent one's personal taste, aesthetic, and how they want the world to be, guiding product and business building with authenticity.
Small Bus Metaphor
An internal Notion metaphor used to emphasize the benefits of a lean, efficient team. A smaller 'bus' (company) is easier to maneuver, accelerate, and turn corners, fostering talent density and reducing internal communication overhead compared to a larger, slower organization.
Bundling and Unbundling Cycles
A historical pattern in business and technology where markets oscillate between periods of unbundling (many specialized tools) and bundling (integrating multiple functions into one suite). Understanding this trend helps businesses decide whether to pursue vertical or horizontal solutions based on current market dynamics.
10 Questions Answered
Ivan Zhao got into programming by winning an Information Olympiad competition in Beijing, which allowed him to get into a good school after moving from his hometown of Yerumuki.
The first three to four years of Notion were 'lost years' where they tried building a developer tool that most people didn't care about. They pivoted to building a productivity tool, 'sugar-coating' their vision of enabling software creation within a more accessible format.
Ivan's mother helped with initial funding and a bridge loan, and the team stayed extremely lean, even laying off everyone except Ivan and his co-founder Simon to rebuild the product on a more stable technical foundation.
For Ivan Zhao, product-market fit was not a binary milestone but a gradual ramp where people started caring, reaching out, and paying for the product, eventually leading to external validation like investors knocking on the door.
Notion believes that better systems and abstractions are more effective than simply adding more people, allowing them to optimize for 'talent density' and focus on building without constant fundraising pressure.
Notion designs its office to feel cozy and inspiring, like an artist's studio or home, using home furniture and warm lighting. Conference rooms are named after timeless tools to inspire the team to create lasting software.
Tools are extensions of humans; once shaped by us, they can in turn shape us. Ivan believes in creating tools that amplify positive human traits like creativity and beauty, rather than negative ones.
During the COVID-19 pandemic, Notion experienced rapid growth that pushed its single Postgres database to its limits, nearly running out of space within weeks and forcing an all-hands-on-deck effort to shard the database.
The main challenge is that while horizontal tools have no market 'wall,' they require self-imposed segmentation (like 'Lego boxes' for solutions) to clarify their go-to-market. The advantage is a vast potential market and the ability to bundle multiple use cases, which is increasingly valued by customers and beneficial for AI.
Notion uses AI for writing assistance, Q&A/information retrieval across bundled data, and most fascinatingly, as an 'AI coding agent' to assemble Lego blocks (features) for knowledge work, making complex configurations easier for non-programmers.
21 Actionable Insights
1. Hide Vision in User Needs
When building a product, hide your long-term vision (the ‘broccoli’) within a form factor people already care about and use daily (the ‘sugar’), like productivity software, to gain initial adoption. People don’t care about your grand vision directly; they care about solving immediate problems.
2. Balance Vision and Users
Strive for a balance between building for your personal values and taste (‘your project’) and building purely for business/users (‘commodity’). Too much self-focus leads to no users, while too much business focus results in a generic product.
3. Build for Lasting Value
Focus on building something authentic to your values that you want the world to have, and that is also useful for others. This provides a more durable and fulfilling energy source to sustain you through difficult periods.
4. Reset for Better Abstractions
Don’t be afraid to reset your approach or even throw away existing work, as finding better abstractions can lead to faster progress and quickly recover sunk costs. Momentum can often lead you down paths that don’t matter, so courageously reset when needed.
5. Maintain Talent Density
Keep your company small and ’talent dense’ to reduce internal communication overhead, increase agility, and foster an environment where talented people want to work with other talented people. This allows for faster maneuvering and acceleration, like a ‘small bus’.
6. Adhere to Core Values
Build products and businesses strictly according to your core values; deviating for competitive or revenue reasons can lead to ‘organ rejection’ from employees and customers, as seen when Notion introduced non-Lego-like features.
7. Master Craft & Trade-offs
Treat product and business building as a craft, applying your values and technical know-how to make clever trade-offs to create something new and useful. Recognize that there are no free lunches, and success involves strategically deciding what to give up based on market needs.
8. Segment with ‘Lego Boxes’
For horizontal products, understand that while you build ‘Lego bricks’ (core components), most users, especially enterprise customers, need ‘Lego boxes’ (ready-made solutions). Segment your offerings and go-to-market strategy to provide these solutions, even if the underlying product is modular.
9. B2C2B Growth Strategy
Identify a broad, horizontal use case (like notes/docs) with a large top-of-funnel to attract individual users (B2C). These users, once familiar with the product’s capabilities, will then bring it into their workplaces, fueling B2B growth.
10. Bundle for AI Leverage
Recognize that AI excels at reasoning, understanding, and searching when all information is together. Therefore, building bundled or horizontal tools that centralize data provides a significant advantage for leveraging AI capabilities.
11. AI for Product Assembly
Leverage AI coding agents to assemble existing ‘Lego blocks’ or primitives within your product, enabling the creation of customized software or agents for diverse vertical use cases, overcoming the challenge of users piecing things together themselves.
12. Understand Bundling Cycles
Understand that markets operate in cycles of bundling and unbundling, similar to historical empires. Recognize whether the current market trend favors vertical (unbundled) or horizontal (bundled) solutions to strategically position your product.
13. Steal Ideas Beyond Tech
Look beyond the immediate tech and business domains to history and other industries for patterns, shapes, and trade-offs. Stealing good ideas from diverse fields can make your current problems and solutions much more interesting and innovative.
14. Amplify Positive Human Nature
When building tools, consider whether you are extending and amplifying the ‘good part’ of human nature, such as creativity and beauty, rather than more negative or zero-sum aspects. Aligning with positive values can shape users and the market for the better.
15. Plan Infrastructure Scaling
While avoiding premature optimization, plan ahead for infrastructure scaling to prevent critical issues like running out of database space, which can halt all feature development and threaten the company’s existence.
16. Optimize Office for Creativity
Design your office space to be cozy and feel like an artist studio or home, avoiding harsh elements like top lighting and pale colors. A pleasant environment encourages more time spent, creativity, and ease.
17. Learn from Timeless Tools
Draw inspiration from timeless tools across history, like the Toshiba rice cooker or Sony transistor radio, to inspire your team to create software products that last for decades rather than just short cycles.
18. Adapt to Market Shifts
Continuously monitor and adapt to the market’s changing ‘optimized function’ and emerging technologies (like AI), as these shifts require making new trade-offs in product and business strategy.
19. Lead with Direct Communication
Adopt a more direct communication style, similar to an ‘East Coast ethos,’ to foster clarity and truthfulness in interactions, rather than always saying things are ‘wonderful’ when they are not.
20. Master One-to-Many Storytelling
As your company grows, develop the craft of one-to-many storytelling to effectively communicate vision and influence the company’s direction, even if it doesn’t come naturally.
21. Sleep for Mental Reset
When feeling down or overwhelmed, prioritize sleep as a simple, daily physical and mental reset to approach the next day with renewed perspective.
6 Key Quotes
Let's hide our vision, which is everybody can create their software in the form factor that people do care. So what kind of tool do people use every day? Productivity software. We call the sugar, call the broccoli. People don't want to eat the broccoli, but people like sugar. So give them the sugar, the hydro broccoli inside of it.
Ivan Zhao
Tools are extensions of us. And once they extend us, once we shape them, once we bring them to the world, they can come back to shape us.
Ivan Zhao
The problem is that there's just a tremendous amount of craftsmanship between a great idea and a great product.
Ivan Zhao
If you just reset and you found a better way to do it, you can get all the thing you have the sunk cost recover really quickly.
Ivan Zhao
Empires, long united, must divide, long divided, must unite, as has always been.
Ivan Zhao
Good artists copy, great artists steal.
Ivan Zhao