Ep641: Kim Scott – Don’t Always Accept Funding Just Because It’s Been Offered

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Quick take

BIO: Kim Scott is the author of Radical Candor: Be a Kick-Ass Boss Without Losing Your Humanity and Just Work: How to Root Out Bias, Prejudice, and Bullying to Build a Kick-ass Culture of Inclusivity, and she is a co-founder of the company, Radical Candor.

STORY: Kim got an idea and $2 million from a friend to build an app for her company Radical Candor. What Kim didn’t realize was that the app was doing the exact opposite of what Radical Candor aimed to do.

LEARNING: Just because somebody offers you money doesn’t mean you should take it. Don’t throw good money after bad. Don’t grow for growth’s sake.


“If it’s too good to be true, keep asking questions before you jump.”

Kim Scott


Guest profile

Kim Scott is the author of Radical Candor: Be a Kick-Ass Boss Without Losing Your Humanity and Just Work: How to Root Out Bias, Prejudice, and Bullying to Build a Kick-ass Culture of Inclusivity, and she is a co-founder of the company, Radical Candor. Kim was a CEO coach at Dropbox, Qualtrics, Twitter, and other tech companies. She was a member of the faculty at Apple University and, before that, led AdSense, YouTube, and DoubleClick teams at Google.

Worst investment ever

Kim had just finished writing Radical Candor, but it was going to be published a few months later. So she had some downtime. One time Kim was having lunch with a friend who’s an investor in Silicon Valley, and she told him about the book. The friend suggested that Kim considers building an app to help people change their habits and be radically candid. He said he’d give her $2 million. Kim thought this was a good idea.

Kim built one app, and it didn’t work. She created a second app, and it didn’t work. Then made a third version of the app, which still didn’t work. Then one day, Kim was watching her daughter and son perform a musical in a theater, filming it on her phone and watching it on the phone. She looked up from her phone and at the actual children, and the emotional impact was totally different. At that moment, Kim realized that the whole point of Radical Candor was to get people to put their telephones away, look each other in the eye, and have real conversations. This app she was building was a value-subtracting platform. Kim decided not to continue building the app. She had spent about half the money her friend had given her at this point.

Lessons learned

  • Just because somebody offers you money doesn’t mean you should take it. First, stop and think if it’s really necessary.
  • If you’re running a business, don’t get pushed to grow too fast.
  • That thing that you really love doing that helps you add value to the world, do it.
  • Don’t throw good money after bad.

Andrew’s takeaways

  • Don’t grow for growth’s sake.
  • Just because something is cheap doesn’t mean you have to buy it.

Actionable advice

Slow down a little bit. If it’s too good to be true, it probably is. If something comes too easy, there’s probably something you’re missing.

Kim’s recommendation

  • To  Radicalcandor.com to learn more about what Kim does. If you’re curious about the different ways that bias, prejudice, and bullying masquerade as feedback, go to justworktogether.com and figure out how to root out those problems.

No.1 goal for the next 12 months

Kim’s number one goal for the next 12 months is to spend 80% of her time writing her new novel.

Parting words


“Go forth and solicit feedback. That’ll keep you out of more trouble than anything else.”

Kim Scott


Read full transcript

Andrew Stotz 00:02
Hello fellow risk takers and welcome to my worst investment ever stories of loss to keep you winning in our community. We know that to win an investing, you must take risk but to win big, you've got to reduce it. Ladies and gentlemen, I'm on a mission to help 1 million people reduce risk in their lives. To join me go to my worst investment ever.com and sign up for my free weekly become a better investor newsletter, where I share how to reduce risk and create grow and protect your wealth. Fellow risk takers this is your worst podcast hosts Andrew Stotz, from a Stotz Academy, and I'm here with feature guests, Kim Scott, Kim, are you ready to join the mission?

Kim Scott 00:43
I am on your mission with you. Big I'm a big believer in failure. That's how we learn.

Andrew Stotz 00:52
Yeah. And something tells me that, you know, the candor track and the failure track has a lot in common.

Kim Scott 01:01
Yes, I'm candid about my failures. Exactly. That's been helpful, actually.

Andrew Stotz 01:07
So let me introduce you to the audience. Kim Scott is the author, author of radical candor, be a kick ass boss without losing your humanity, and just work how to root out bias prejudice and bullying to build a kick ass culture of inclusivity. And she isn't co founder of the company radical candor. Kim was a CEO coach at Dropbox, Qualtrics quitter and other tech companies, she was a member of the faculty at Apple University. And before that, led AdSense, YouTube and double click teams at Google can take a minute and tell us about the unique value that you bring to this wonderful world.

Kim Scott 01:45
You know, I decided that I was gonna subsidize my writing habit by becoming an executive. And I think I'm one of a small number of operating executives who genuinely loves to write. And I think that is why both radical candor and just work are kind of helpful to people because I brought my love of writing to those books, but also brought decades of experience as an operating executive, because so much of the so much of the the real challenge that we experience in the workplace comes from the drama of management. So I tried to take the drama out of management by writing about it in a in a sort of experience based way.

Andrew Stotz 02:35
And for those people that haven't gotten the book, radical candor as an example, maybe you could tell them, what does that mean, you know, let's talk about that briefly. Because this is a, you know, a smash hit book. And I think, for the listeners, I highly recommend you get it. I'll have links to it in the show notes, but maybe tell them what they're gonna get from it.

Kim Scott 02:53
Yeah, so radical candor is about caring personally and challenging directly at the same time. So this is a book about management that will really help you offer, solicit better feedback, give better feedback, encourage more feedback, and also build a team that is based in radical candor, and get results in a radically candid way. So it'll help you care and challenge at the same time. Very quickly. What radical candor is not is it's not obnoxious aggression, that's what happens when you challenge but you don't care. It's not manipulative insincerity. That's what happens when you neither care nor challenge. And it's not ruinous empathy. That's what happens when you care, but you don't challenge. And you know, if you write a book about feedback, you're gonna get a lot of it. And some of the feedback that I got was that very often, bias prejudice and bullying masquerade as feedback. And that's kind of the topic of my next book, just work, think Justice, not just work all the time.

Andrew Stotz 03:56
Okay. It's interesting, because I left the US 30 years ago, so I worked briefly in a few different businesses. And then I came to Thailand, and it's a totally different work environment. Yeah. It's totally different. You know, you, for instance, just one unique thing. You know, raising your voice in a meeting in America, kind of is sometimes respected or, you know, makes people stand out and say, Yeah, but you know, you would never raise your voice in any format with any of your employees. Because, yeah, you know, they would, they would, you would lose respect and, you know, trust in that type of thing. Yeah. And then when I look at the that's one thing that I see that's different, and then one of the things when I was about 24 years old, I went to a seminar, back when we used to have live seminars, and I went to seminars with a guy named Dr. W. Edwards Deming and he talked about, you know, reducing competition within a company and how to get the optimum out of Humans that, you know, you don't set them against each other. You get them to cooperate and work together and all that. And when I left America with that thinking in mind, and then I came to Thailand and saw a cooperative work environment, sometimes I look back at America, I think, what are they doing? Yeah. Why are they fighting with everybody? In all, I mean, it's just so combative. And it's like the competitors outside, but they set up competition inside cover so aggressively. What? Why?

Kim Scott 05:30
Yeah, you know, I think that sometimes in the US, we sort of default to this command and control kind of approach to management. And the truth is that people do their best work when they collaborate, you know, when we collaborate as human beings, there is nothing we cannot achieve. And when we try to start coerce in each other, there's no depths to which we cannot fall to, so one of my missions is to create more collaboration and less coercion in the workplace. And I think but you know, yeah, it's interesting cross culturally, because I think radical candor is it's kind of about love and truth at the same time. And those are pretty universal human values. But the way that we express love, and truth is going to differ culture to culture. So you know, I never worked. I've never worked, where you're working, but I worked. I had teams and a dozen different countries. And radical candor sounds really different and Tokyo than it does in Tel Aviv. It's radical candor, in both places, but but and with my team in Japan, I called it polite persistence, because polite was how they like to think about showing they cared personally. And persistence was an easier way for that team to think about how to challenge directly. But if I had gone to Tel Aviv and said, you know, call it polite persistence, that they would have thought I was telling him to be manipulatively, insincere. You've got to adjust for the individual and also for the culture where you're working.

Andrew Stotz 07:04
Yeah, that's great points. And I think, you know, for the, for the listeners, and the viewers out there, you know, get the book, learn what you can, this is great, you know, feedback, and I just would highlight one last thing in my own past is that I, I ended up stumbling into drug rehab at a young age, I was 1617 years old. And I went through three different Drug Rehabs until it stuck until today, you know, and I haven't Yeah, used alcohol or anything like graduations.

Kim Scott 07:30
It's hard.

Andrew Stotz 07:31
Yeah, I

Kim Scott 07:32
also quit drinking a few years ago, it's, it's no joke.

Andrew Stotz 07:37
It's, it's, it's a challenge. And for anybody listening, I always say, you know, if you ever know anybody having problems with alcohol, or drugs, you know, reach out, there's 12 Step programs, Alcoholics Anonymous, Narcotics Anonymous, these types of things are out there, they're right next door to you, you don't you wouldn't even be surprised when you when you reach out. But there's so much out there. But I remember, I went through, I added it up at the end of therapy, that at the end of the three different treatment centers that went to I went through 2000 hours of individual group and family therapy. Wow. And feedback is such a critical component of it, because we go into the therapy kind of blind, you know, we're crashing into a wall, but we don't know why and all that. And I just came to really value feedback. And it's, it's hard, you know, it's hard to take. And yes, but I think that, you know, what my message is, is that, for the listeners out there is really get the book, get understand how to give, receive feedback in a trusting caring way. And it does change everything.

Kim Scott 08:45
Yeah, absolutely. Everything. It really it's, it's, it's transformative.

Andrew Stotz 08:50
Yep. Well, now it's time to share your worst investment ever. And since no one goes into their worst investment thinking and will be tell us a bit about the circumstances leading up to and then tell us your story.

Kim Scott 09:01
So I had just finished writing radical candor, but it was going to be published a few months later. So the publishing industry is not speediest. And so I had some downtime. And I had lunch with a friend of mine, who's an investor in Silicon Valley, and I was telling him about the book. And meanwhile, the book, I had given a talk about the book and the talk had gone kind of business viral, not like pop culture viral, but you know, I'd had a couple million views. And my friend said, Oh, you got to build an app. You got to build an app to help people change their habit and be radically candid. And I'm sitting here in Silicon Valley. So of course, I'm like, Oh, yeah. And then he's like, I'll give you $2 million. And we're gonna start this company. And you know, who's gonna say no to that? Well, I should have said no to that. But I did not. I was like, Uh, yeah, you're right. You know, we're gonna, and we built one app, and it didn't work and we built second app and it didn't work. Can we build a third version of the app and Didn't work. And then I was watching my daughter and son perform a musical theater and they were singing, believe it or not, it's just me. And they're, you know, they're like five years old and twins up on stage. And I was filming it on my phone and watching it on my phone. And then I looked up from my phone and looked at the actual children and the little image of them. And the emotional impact was totally different. And, you know, in my eyes filled with tears, and I realized that in that moment that the whole point of radical candor was to get people to put their telephones away, look each other in the eye and have real conversations. And that this app we were building was a value subtracting round trip. And we, you know, we had only spent about half the money at that point. And you would think that your investors would be happy you go to them, and you say, You know what, this whole idea was a bad idea

we have done I'm gonna save you $1 million. Yeah, but I'm gonna give you

Kim Scott 11:02
half your money back. No, they were furious. It was like one of the most stressful painful things I had, not all of them were feared. Some of them were lovely. Some of them were less lovely. I'll be radically candid. And, and it was one of the more painful things I ever had to go through. And I make when I tell the story, I'm like, Oh, it was so obvious, you know. But there was actually a lag time between that moment watching my kids and kind of knowing in my gut, that this app was was the whole thing was a bad idea. There was a couple of months between that moment when I knew it in my gut, and it getting to my head, right. And those were some of the most difficult months of my life. Because I was unable to sleep. I didn't know why I had insomnia. I was unable to eat, I lost way too much weight all of a sudden. And I didn't, I didn't really know what was going on until I got some radical candor from a board member. I walked in her house, we had a meeting every couple of weeks, and I walked into her house, and she took one look at me. And she said, you're not okay. You're not okay. And she said, You need to take a couple of weeks and stop working whatever is on your plate, whatever you're supposed to do cancel it, there's nothing that you have planned in the next two weeks, that's more important than your health and you're destroying your health. And, she was also an investor, you know, it was not easy for her. It was kind of in her self interest to say keep going, you know, because I don't want to lose my money. But she was willing to put me before her investment. And I'll forever be grateful to her.

Andrew Stotz 12:59
So how would you summarize the lessons that you learned?

Kim Scott 13:03
So I would say one, don't just because somebody is offering you a bunch of money doesn't mean you should take it, stop and think. And it's that seems kind of ridiculous. But it's very often how these things go. The second thing I would say is that don't if you're running a business don't get pushed to grow too fast. Because the fact of the matter was at that company, we had figured out one thing that worked, it wasn't the app, but we were doing talks and workshops. And those worked really well. And in fact, we were getting income from those, in fact, we were at a cash flow breakeven point. And, and yet this is kind of maybe Silicon Valley, venture capital kind of problem. But those investors had no interest in that kind of business that was gonna be, you know, a good business that wasn't gonna go bankrupt. But they wanted, you know, they had to be a billion dollars or nothing. And, I was sort of buying into that mentality. And so don't don't think, you know, there's a lot of interesting businesses that are never going to be billion dollar businesses. That doesn't mean they're worth they're not worth pursuing. And then I think the last thing that I learned is something that I've had to learn over and over again, like the thing that I really love doing and the thing that that where I really add value in the world is writing. And that's what I want to do. It's not what I get paid the most to do but at this point, I've earned enough money that I can afford to be a writer and so I need to be a writer.

Andrew Stotz 14:55
Well, let me summarize a few of my takeaways. I mean, by First thing, let's just review. So first of all, you've got a friend comes along in investor saying, build an app. And there you are in Silicon Valley Valley, it seems like the simplest thing. Yeah. And, and I'll come to that in a second. And so and then you get the 2 million you start on it. And then you come to this awareness. And, you know, we have our awareness moments in different places, you had yours, flipping between your phone, and the real image of your daughter's or daughter's appearance on my daughter and son got it. And then you talked about, you know, just because someone's offering something, doesn't mean that you take it, talk about some lessons, lessons about, you know, don't grow for growth's sake. And then the other thing you talked about is, you know, you kind of you said you had to relearn this lesson, which isn't that painful, like when we had to have learned these things. Yeah. So but relearning the lesson of Wait a minute. I love writing, and I'm good at it. And you know, and I have proof of that. Yeah. So yeah. So as I think about it, I was thinking about my mother often says to me, in the past, she would say, just because it's cheap, doesn't mean you have to buy it.

Kim Scott 16:17
Yeah. Just because it's a lot of money doesn't mean you have to take it either.

Andrew Stotz 16:21
Right. You know, just because something's on offer, doesn't mean it's the right thing. Yes. So I think that's a big takeaway for me. And I think for the listeners, I want you to think about that. And the second thing I want to highlight is, many years ago, I read the roadless chat travel by Scott Peck, and great book, you know, one of those life changing books for me. And he talks about, you know, what is love and love ultimately talked about the idea of, you know, putting the interest of another person ahead of your own interests? Yeah. And that type of thing. And when you described about, you know, the investor who sat you down and said, You got to stop right now. Yeah. You know, that is a demonstration of, according to Scott pecks type of desperate definition. And I would say, I'm on board with that, that was a definition of an act of love. And so those are some of the things that I took away is anything else you would add?

Kim Scott 17:23
I think an act of love and an act of challenge, like very often, I think we think that love and truth are two different things. And I would argue you can't have love without truth. And that was what that investor and board member was willing to offer me is, is truth with love, love with truth. And, and that is really valuable. I think there's another thing that I've really and I don't know exactly what to do about this. But very often we realize things in our gut before we realize them in our head. There's, I think Freud calls it knowing without knowing. And that was the most stressful period, like my body was trying to tell me wake up, literally wake up, Kim. And, and so how can we learn to be more aware and to honor our gut a little bit more. So that, because that period between the time when I kind of realized, but I didn't know it when I knew, but I didn't know, that was the worst period of time. So anything you can do to shorten that period of time. In other words, I think in terms of investing, it's not throwing good money after bad. And yet that it's that emotional sense. I had a mentor who said, your most expensive went about literal investing, he said, your most expensive mistake is often that that notion that you see something is down 10%, and you just hold on hoping it'll go back up and what it's doing is going to zero. And if you could take the loss faster, you would take less of a loss.

Andrew Stotz 19:03
And what you're describing is something I've learned through interviewing more than 600 people is that idea of intuition. And yeah, you know, the intuition is not intellect. And intuition is not emotion. Intuition is a fleeting, physical reaction that you have for a fleeting moment. And I think if there's one lesson I've learned, is that intuition tends to be right. Yeah, and

Kim Scott 19:34
wrong. Sometimes it's bias, but don't just dismiss it. Yeah, right. Pay attention and say, was that intuition bias or was that something wise? Yeah. And learning to be aware of it. Yeah, be aware. Be aware of it don't just rejected.

Andrew Stotz 19:49
One last point. I just wanted to make, you know, everybody talks about apps in this world, you know, I mean, it's high tech world and you know, amazing. I think it's a disaster war. When it comes to apps, and tech, its tech is so bad. So bad, every single company that I've worked with and seen and talk with, they can't get developers doing the right thing. And I'm starting to realize it's just like, Facebook has billions of dollars to spend on 1000s of developers in one of them comes up with, you know, the right thing. And then they get five of them together, and then they coalesce around something, while another. I just, I have had lost hope that the typical company can just go and create an app without a brutal experience. Am I wrong? Is it different in the US?

Kim Scott 20:37
I don't think I don't think tech is bad. I mean, if I did, I'd probably have to move. But I do think tech can be terrible. You know, I think if you let your tech manage you, then it is bad. And the other thing about a lot of the technology that has especially that has been developed recently is that it's addictive. It's another form of addiction. And that addiction is bad. Addiction is always bad. And so I think the more that we can all learn how to make sure that we're managing our technology and not letting it manage us, the better. And I would say their, you know, their Facebook might just be bad. I'll grant you that. But I wouldn't say that tech, overall is bad. I think, you know, Twitter did some good things. Twitter, led by its current CEO is bad. But it could be good again, you know, I think it's really, it can be very useful to connect, and I can be distracted and addictive to connect with too many people. And we have to learn how to manage it.

Andrew Stotz 21:56
How to balance. So based upon what you learned from this story, and what you continue to learn what one action, let's go back in time, and imagine you're sitting down talking to that man that said, I'm gonna give it to 2 million bucks to build an app. What would you recommend our listeners? What actions would you recommend our listeners take to avoid suffering the same fate?

Kim Scott 22:15
Yeah, slow down a little bit. And make sure if you know if it's too good to be true, it probably is. If it's too easy. There's probably something you're missing. And, and so, so trust that initial gut, I had an instinct like what's going on here? Like, it took me four years to write the book. And I'm getting offered a lot more money to build this app. And I'm not even sure that I haven't done anything yet. And I'm not sure it's a good idea. So if it's too good to be true. Keep asking questions before you jump.

Andrew Stotz 22:52
Great. And what's a resource of yours that you'd recommend for the listeners?

Kim Scott 22:58
So if you want to learn more about radical candor, which really does, the app did not work. But the idea works. Radical candor.com. And we have built out a lot of workshops in person workshops, but we also made a sitcom about radical candor, if you don't want to workshop, and we built some other programs out, so or just read the book. So go to radical candor.com To learn more about that. If you're curious to know about the different ways that bias prejudice and bullying masquerade as feedback, go to just work together.com and figure out how to root out those problems.

Andrew Stotz 23:39
Fantastic. And I'll have a link to that in the show notes. Ladies and gentlemen, last question. What is your number one goal for the next 12 months,

Kim Scott 23:48
I am working on a new novel. So I just want to spend 80% of my time writing that new novel but I don't want to set a goal to finish it because I don't want to rush it.

Andrew Stotz 23:58
Exciting so truly a writer well as listeners, there you have it another story of loss to keep you winning. Remember, I'm on a mission to help 1 million people reduce risk in their lives. If you have not yet joined that mission, just go to my worst investment ever.com right now and join my free weekly becoming better investor newsletter to reduce risk in your life. As we conclude, Kim, I want to thank you again for joining our mission and on behalf of a Stotz Academy. I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words for the audience?

Kim Scott 24:37
Go forth and solicit feedback that'll keep you out of more trouble than anything else.

Andrew Stotz 24:44
Fantastic advice and that's a wrap on another great story to help us create, grow and protect our well fellow risk takers let's celebrate that the day we added one more person to our mission to help 1 million people reduce risk in their lives. This is your worst podcast Jose Andrew Stotz, saying I'll see you on the upside.


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About the show & host, Andrew Stotz

Welcome to My Worst Investment Ever podcast hosted by Your Worst Podcast Host, Andrew Stotz, where you will hear stories of loss to keep you winning. In our community, we know that to win in investing you must take the risk, but to win big, you’ve got to reduce it.

Your Worst Podcast Host, Andrew Stotz, Ph.D., CFA, is also the CEO of A. Stotz Investment Research and A. Stotz Academy, which helps people create, grow, measure, and protect their wealth.

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