In this episode, we hear from Kaj Pedersen, a Rotarian and tech innovator, on the battles against polio, his adventurous upbringing, and the evolving roles of AI and quantum computing. With insights into startup culture and leadership, Pedersen highlights the importance of learning from mistakes and the impact of service.
Key Takeaways:
- Polio Eradication: Discover the brave efforts of Rotarians, including the sacrifices made by those on the frontlines in Pakistan, to eradicate polio.
- Resilient Leadership: Pedersen shares how his adventurous childhood and early professional experiences shaped his emphasis on learning through mistakes and fostering resilience.
- AI & Quantum Computing: Learn about the transformative potential of AI and quantum computing in reducing costs and processing large datasets.
Guest:
Kaj Pedersen, chief technical officer at AstrumU and District Governor for Rotary District 5030.
Resources Mentioned:
- Kaj Pedersen: LinkedIn and X/Twitter
- Organization: AstrumU
- Duke of Edinburgh Award
Quotes:
-“Making mistakes at full speed is crucial in the startup world—take small steps, learn quickly, and adapt.” – Kaj Pedersen
-“The majority of people are frustrated with extreme voices on social media—focus on meaningful contributions.” – Kaj Pedersen
Listener Challenge:
This week, practice resilience by taking a small step toward a challenging goal and learning from any mistakes. Share your journey with us on social media using #BEATSWORKINGShow.
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Transcript
The following transcript is not certified. Although the transcription is largely accurate, in some cases it is incomplete or inaccurate due to inaudible passages or transcription errors. The information contained within this document is for general information purposes only.
[00:00:00] Mark Wright: Kaj Pedersen, welcome to the BEATS WORKING podcast. I’ve really been looking forward to our time together. Welcome.
[00:00:05] Kaj Pedersen: Yeah. Likewise, Mark. It’s a pleasure to be here. I know that, uh, you and I have been trying to make this happen, so, it’s good to be here on the day.
[00:00:12] Mark Wright: Well, we’re going to cover a lot of ground over the next 45 minutes to an hour. We’re going to be talking about your time in the software startup world, but I think your world experience growing up, is a cool place to start. We’ll get there in just a minute, but first for people who don’t. You’re the chief technical officer at a software company in the Seattle area called Astrum U.
[00:00:35] Mark Wright: For people who haven’t heard of Astrum U, tell us what that is.
[00:00:39] Kaj Pedersen: Yeah. So Astrum U is really a company that was set up, back in 2017 with the purpose of figuring out how could we level the playing field by enabling a skills based economy using AI. Uh, and so at the fundamental level, what we’re doing is we’re trying to figure out Uh, what people’s verified skills are at the individual [00:01:00] level, and then using that as a way of understanding where the gaps are between job opportunities, or even learning opportunities, and then we’ll make recommendations to them in terms of how they can close that gap.
[00:01:11] Kaj Pedersen: The idea here is, if we get this right, we can actually surface up individuals with appropriate skills, particularly in the underserved communities, and enable them to find Mobility in their careers and obviously, that in itself is a huge vision around leveling the playing field.
[00:01:29] Mark Wright: So Kaj, it seems, that seems like a brilliant idea because I think if I look back on my experience and I think most people’s experience, we get an education and then we try to plug that into the world. this sounds like you’ve gone upstream a bit, right?
[00:01:43] Kaj Pedersen: Yes, I think, you know, one of the fascinating things is everyone goes to university and one of the reasons why they go to university is It’s really for companies, it’s an, it’s a litmus test as to where you are in terms of your critical thinking, reasoning skills, and frankly, that you have the resilience to do a [00:02:00] period of work over a period of time, as well as the skills that you acquire.
[00:02:04] Kaj Pedersen: I think, today, as we’ve seen, there’s numerous examples of where industry is moving. further and further ahead in terms of changing the way the world works. If you look at AI, it’s the most recent example of that and how it’s transforming the way people work and the roles that they have are changing as well.
[00:02:23] Kaj Pedersen: So companies are saying, well, we need these skills. Where do we find them? Because the universities tend to be a lag when it comes to, innovations of that nature. And so I think going upstream, looking at people’s skills, particularly their soft skills, actually, which, if you look at anyone who’s got a degree, the lesson they learn from work is.
[00:02:41] Kaj Pedersen: Well, actually, it’s your soft skills that enable you to build teams, collaborate, figure out how to find the best out of people so that you can deliver on the outcomes. And so we’re, sort of looking at that as well as the hard skills and that combination, we think, uh, helps companies find the talent that they need.
[00:02:59] Kaj Pedersen: Without, [00:03:00] sort of having to go through thousands and thousands of resumes. If we can actually narrow it down and give them capable people up front. I know businesses are very interested in solving that problem.
[00:03:10] Mark Wright: And the labor force is getting tighter and tighter, right? So that’s, an admirable goal. Well, Kaj, people listening probably can tell that you’re not from Seattle. And, uh, one thing that, I think is really cool, uh, about people with accents is that, uh, I feel like we in the Pacific Northwest have no accent.
[00:03:28] Mark Wright: Although people would say, well, you do have a Northwest, uh, United States accent. I really admire people who have cool accents like you do. take me back to your childhood, Kaj. You have really a global growing up that I find completely fascinating and really has shaped who you are today. take me back to your childhood, Kaj.
[00:03:48] Mark Wright: And, where were you born? Where’d you grow up?
[00:03:50] Kaj Pedersen: Yeah. So I was, I was actually born in Zambia. my, uh, my father is, is Danish and he’s one of those Danes, you know, they say there’s 6 million Danes in the world, 5 million who never [00:04:00] leave, 1 million who never go back. He was one of the million. he went to Africa and actually when he went out there, he was going out there for the purpose.
[00:04:07] Kaj Pedersen: He’s a young man seeking adventure and he’s a rally driver. And that’s how he met my mom, who was already out there. She was, uh, she was born in, what was then Rhodesia, Zimbabwe now. And, uh, so the two of them met. You know, circumstances, led to ultimately them getting married. And of course, my brother and I were born in Zambia.
[00:04:26] Kaj Pedersen: And, we lived there for, uh, I mean, last time I was, uh, in Zambia as a, as a child growing up was, uh, 13. and then we moved to Nigeria. Uh, and then I was, uh, in Morocco and then we spent some time traveling through, Europe, you know, we spent a little time in Germany, France before settling in the UK.
[00:04:45] Kaj Pedersen: And then in between that, I also had the, uh, benefit. I went to school initially in Zambia. And then, uh, when I was six, I was sent to boarding school in Denmark. I was there for about two years and then came back and went to boarding school [00:05:00] in, Zimbabwe, or what was Rhodesia then. and then from Rhodesia, uh, when the war got, when the war intensified in Rhodesia, it was pretty bad.
[00:05:09] Kaj Pedersen: It’s prudent for my parents to send me somewhere else. So then I went when I was 12 to school in Scotland and I was bouncing back and forth. So by the time I was 10, I was actually navigating airports and border controls, quite fluidly, uh, as a child, uh, and, and used to cause all sorts of consternation.
[00:05:27] Kaj Pedersen: Cause you know, I was one of these kids who was curious and didn’t want to be sort of bound to a room. And what used to happen back in those days is you’d be, uh, and somebody would pick you up at the other end and they’d put you in a room and keep you there. And to me, it was just like prison. And so I figured out ways to, um, uh, it’s a bit, a bit cheeky really.
[00:05:49] Kaj Pedersen: But there was one occasion where, I saw a young couple. So I just tagged on to them as I walked off the plane, bypassed the, uh, the person who was there to pick me up. And I just had, I just ran riot around the airport. I [00:06:00] mean, parents would be horrified at this, but back then that’s what we did. And, uh, so I ran around the airport.
[00:06:06] Kaj Pedersen: I had a lot of fun and then I showed up at the room. Uh, in plenty of time before the flight that I had to catch was going to take off. Uh, much to the consternation of the people who were organizing, uh, the pickups and, you know, trying to communicate with my parents in those days, which was difficult. Uh, you know, trying to explain that they’d lost their son, which they hadn’t.
[00:06:26] Kaj Pedersen: And, the long and short of it was my dad said, okay, enough, we’re going to have you fly with the deadheaders so that we know that you can’t disappear and they’re going to hold you accountable. And then he was actually smart enough to say, and we’ll figure out how you can do something when you get on the other side.
[00:06:42] Kaj Pedersen: So I actually was able to get out of the airport and explore a little bit as well before coming back for the connecting flights. So yeah, it was a little bit of a terror to be honest with you.
[00:06:51] Mark Wright: that’s funny. you told me when we spoke a few weeks ago that, being in boarding school really makes you grow up fast in terms [00:07:00] of responsibility and taking responsibility for yourself. You told me one time a headmaster came up to you and said, have you made your travel arrangements to go home?
[00:07:07] Mark Wright: And you said, no, I haven’t heard from my dad. pick up the story from there if you, would, Kaj.
[00:07:12] Kaj Pedersen: Yeah, so this is, when the old man was living in Nigeria and, uh, he, we were in Lagos. We at the time, and, you know, telegrams, going to Africa back in those days was a bit of a hit and miss affair. so I sent a telegram, to the old man saying, Hey, I’m gonna be coming home on this day. This is the airport that I’m, Lagos is international airport and I should be arriving at this time.
[00:07:35] Kaj Pedersen: See you then on the other side of that, of course. Basically just made a bunch of assumptions that, this is when I was what, 14 years old that, I booked the flight through the school, sort of took care of the cost, the old man would pay it back that way. And then I sort of set up the flight, had everything in place.
[00:07:51] Mark Wright: So you’re booking international travel as a 14 year old.
[00:07:54] Kaj Pedersen: yeah, yeah, you’d be surprised how easy it is, uh, as long as you got the money. Uh, [00:08:00] and so, once that had all been set up, I was going to arrive at Lagos. So, you know, travel day came, I got to, uh, I took the train from, Scotland. Pit lockerie all the way down to London,, London, Houston, uh, from Houston station got to, uh, Gatwick airport in those days.
[00:08:17] Kaj Pedersen: And then from Gatwick flew to Lagos, arrived in Lagos, picked up my bags and the old man’s not there. So I was going, Oh, this is a bit of a problem. Uh, so, and I realized he, he probably hasn’t received the telegram. So I’m sitting there going, okay, well, I’m not going to wait anymore. So I walked out and bear in mind, I had no cash at this time.
[00:08:39] Kaj Pedersen: And so I walked out to the taxi rank. Now in Nigeria, there’s a sort of, it’s an odd custom, but taxi meters don’t really work. You negotiate your fare. And so I walked up to this guy and I started negotiating my fare with him. And I said, Hey, I’m going to Victoria Island. How much is it? And he told me an outrageous number.
[00:08:57] Kaj Pedersen: I said, no, I’m not paying that. And so we got [00:09:00] to a fare that was reasonable. Uh, got into the taxi and off I went and, uh, arrive, I arrive at my house and sort of get out of the taxi. And the guy says, Hey, you have to pay me. I said, yeah, yeah. I’m just going to go and get the money now. And he looked at me, he says, you’ve got no money.
[00:09:15] Kaj Pedersen: I said, don’t worry, you’ll be paid. I walked up to the door and I was sitting there going, Damn, I hope dad’s home. I knock on the door, the old man opens the door and he’s, he’s stand there and he’s shocked, right? He’s totally stupefied. What are you doing here? I don’t, this is, this doesn’t make sense. I said, dad can’t talk now, go pay the taxi driver.
[00:09:35] Mark Wright: And it all worked
[00:09:36] Kaj Pedersen: And it all worked out.
[00:09:37] Mark Wright: Kaj, having the boarding school experience as a kid, did you see it as, Oh man, I’ve, been shipped off and see it as, as kind of, uh, a bad experience, or did you see it as an adventure at the time as a kid?
[00:09:49], I sort of recall when I was six, I kind of saw it a bit of as an adventure. and it was presented to me as an adventure. And so that’s kind of how I absorbed it. And, uh, when I went to Denmark, I flew [00:10:00] back actually with my grandparents. And so I had my Danish grandparents, who are living in Copenhagen and the school I was going to was, uh, Bousfair Coast School, which is just outside of Copenhagen.
[00:10:10] Kaj Pedersen: And, the arrangement was that I would, I would be at school for two weeks and then I could come back for the weekends and then go back for two weeks and come back for the weekend. So that’s sort of helped. Break it up a little bit. Uh, the, and to be honest with you, I, I kind of enjoyed it. Because I had my grandparents there, so I wasn’t like completely detached from my family and they would keep me informed of what was going on.
[00:10:32] Kaj Pedersen:, my grandmother, my Dana Bestemore, as I used to call her, I mean, she was a tough old lady, loved it a bit. she was sort of like very early on said, okay, you’ve got to start learning how to stand up on your own two feet. So by the time I was seven, I was actually taking the bus from the school back to Copenhagen to where we lived.
[00:10:50] Kaj Pedersen: And then, when I was going back to school, I’d take the bus from Castrop to Copenhagen to school and didn’t even think twice about it. And so she [00:11:00] was, teaching me some of these skills early on. in the mornings. Don’t wait for your breakfast to be served. This is how you make porridge.
[00:11:07] Kaj Pedersen: This is all these things. And then the school itself adds on another layer of, you know, expectations. You’re accountable for your work. You have to, you can’t just expect people to sort of be around to help you out. And so that adjustment, I think because of the early age, uh, became something that I, I naturally, ended up, uh, embracing.
[00:11:29] Kaj Pedersen:, but it’s not for everybody. I will, I will say that. I know a lot of lads who tried the, uh, tried to come into boarding school and they just couldn’t. Make the adjustment, uh, for whatever reason, no fault of their own. It’s just not for everybody. And, uh, the, you know, in those cases, fortunately their parents and my brother was one of them, by the way, the parents said, okay, this is perhaps not the right course and took them out of the system.
[00:11:53] Kaj Pedersen:, but when you’re in the school, you are, there is an expectation that you have to do your, you have to pull your weight. You’ve [00:12:00] got to do your homework. For example, you’ve got to make sure that you’re in, you’re attending the classes, you, run to a schedule, you have to keep to that schedule.
[00:12:08] Kaj Pedersen: Uh, there are expectations around, the upkeep of the school. Uh, you’re responsible for that. You’re responsible for the cleaning and keeping your dormitories clean, et cetera, et cetera. So at a very early age, you’re taught a lot of these life skills that become, you know, surprisingly useful as you, uh, get into the adult world.
[00:12:26] Mark Wright: Yeah, and they really are dedicated, to creating well rounded individuals. You told me that in Scotland, service work was really emphasized at the boarding school and you actually learned mountain rescue, while you were there as a teenager and started, doing that, right?
[00:12:40] Kaj Pedersen: Oh yeah. Yeah. So, uh, at Rannoch, we were part of what was called the Duke of Edinburgh’s award scheme. For people who don’t know what the Duke of Edinburgh’s award scheme is, it’s, it’s, uh, The Duke of Edinburgh founded this scheme in the UK, based around the philosophy and the principles of Kurt Hahn.
[00:12:55] Kaj Pedersen: And so there’s this idea of, how do you provide service to the community? There’s the academic rigor. [00:13:00] There’s the physical aspects of it. there’s also, uh, going away on expeditions that you have to organize yourself and so on. And there’s a bronze, silver and gold level. And our school at the time was one of the leading, schools for delivering gold level, Duke of Edinburgh award holders.
[00:13:17] Kaj Pedersen: And the part of it is this service idea. So, and I’ll, I’ll take the audience back when I was 13. we were. Part of the bronze award. We had to go and organize our own first 20 mile overnight expedition. No adult supervision. We had to do the whole lot ourselves, build the plan, go to the campsite, take care of everything in terms of the food, the kit, et cetera.
[00:13:42] Kaj Pedersen: And then get back and basically, Sent out into the mountains as a group, four of us, all 13 years old, you know, hitting the hills and, and navigating to the campsite, doing the climb and then navigating back and getting back to school [00:14:00] and it’s these wonderful opportunities and that’s sort of, so that’s what got my interest in mountain rescue and, at the school had a, uh, had a fire service.
[00:14:08] Kaj Pedersen: Team had a lock patrol team, had an ambulance service, had the mountain rescue service, community service, because we’re in a very small community. And so they could take advantage of our, frankly, our labor to support this. And so the mountain rescue team, I joined that when I was, 15, got through the selection process and, uh, ended up.
[00:14:31] Kaj Pedersen: Training with the Tayside Police and the Royal Air Force, who are the two key mountain rescue outfits in, uh, that Perthshire area, uh, in the Grampian mountains. And, you know, basically we would train every week, we’d go on expeditions, most weekends and, uh, and part of, uh, and we were actually involved in a number of, uh, rescues as well, where we actually went out and helped, you know, save people from, the elements and sometimes some of the, uh, rougher conditions.
[00:14:58] Kaj Pedersen: that you see in the Scottish [00:15:00] mountains.
[00:15:00] Mark Wright: Kaj, I feel like I’m guilty of this. I think parents today, we try to protect our kids from adversity instead of allowing adversity to happen and to let them grow from it. I’d love your perspective on that.
[00:15:13] Kaj Pedersen: So one of the things I’ve always felt is, uh, there’s a way that you can, as a parent, you have a responsibility to put guardrails around, but as a child gets older, you need to expand those boundaries, and you have to let the child make mistakes, uh, because that’s how they learn. And if you can do it in a way, where you mitigate some of the risk.
[00:15:33] Kaj Pedersen: You can’t take it all away. Otherwise there’s no learning involved. Uh, I think you end up building a much more resilient, person whose character can sort of handle some of the setbacks that come through in life. And, you know, there’s one thing that I’ve learned in my journey. It’s that there are always going to be setbacks and it’s how you respond to the setbacks that makes the difference between somebody who’s going to get sort of succeed and the person who’s not going to succeed.
[00:15:59] Kaj Pedersen: BEATS [00:16:00] WORKING. And the ability to adapt to new information or things going wrong. And what do you learn from that mistake and how can you fix it cheerfully?, and there’s a lot of people who will sort of, you know, just. Give up and say, well, you know, this isn’t the path for me, which in fact, actually maybe it is the path, but you just, you’ve given up at the earliest possible obstacle when in fact, that’s something you can learn from, and it may give you a slightly different point of view or a different lesson that you can take to continue on that journey.
[00:16:32] Kaj Pedersen:, and I think we have to teach kids that. And I think if we, put them into, you know, the phrase, if we put too much cotton wool around them, they don’t learn those really valuable skills around resilience and how to set, how to take a setback and turn it into an opportunity, and how to learn from it.
[00:16:48] Kaj Pedersen:, and if you think about it, human beings have been around for what, 2 million years? We’re here because of mistakes, realistically. We’re not here because we were smart. We’re here because we had the [00:17:00] ability to learn from our mistakes, document it, and train the next generation.
[00:17:04] Mark Wright: Our founder, Dan Rogers has a set of nine restraints, nine rules to live by. And one of them is to make mistakes at full speed. and that is to say, you know, not going through life, at 90 miles an hour, recklessly making mistakes, but it’s moving with an intentional momentum.
[00:17:24] Mark Wright: You’ve been a part of a number of software startups. is that common in the startup world? Mistakes at full speed?
[00:17:30] Kaj Pedersen: Yeah. And, actually, there’s a phrase, I think Amazon uses this, right? A bias for action. We actually have that as well. and the intent of that phrase is not just to make decisions for the sake of making decisions. The intent is if you have a plan, and you move forward on that plan and you do so in an iterative way, and you’re constantly moving the ball forward and you’re learning from that, then the chances are those small incremental steps, actually, when you look at it over a period of a year, looks like one [00:18:00] huge, massive move forward.
[00:18:02] Kaj Pedersen: Versus, you know, if you sort of sit there with a plan, and we’ve seen this before, right, people build these plans, and they look beautiful, and there’s a Taj Mahal at the end of it, but the reality is it never gets delivered. so, but if your vision is the Taj Mahal, and you’re willing to make lots of incremental moves in that direction, and you do that quickly, and you learn quickly, and if you fix things, if you break something, this is a phrase I use, if you break something, fix it cheerfully.
[00:18:25] Kaj Pedersen: Don’t worry about, you know, why you broke it or who broke it, own it, fix it cheerfully, move it forward. And that way we can actually get to the destination quicker. and it’s a, counterintuitive, thought for a lot of people. This idea of just doing small incremental steps actually leads to a bigger move forward.
[00:18:43] Kaj Pedersen:, and that bias for action. is what makes startups successful, I think, in the long run, because you learn quickly and you can adapt quickly and you can pivot where you need to.
[00:18:52] Mark Wright: So your first degree was as a computer science, right? Computer engineering? Yeah.
[00:18:57] Kaj Pedersen: Computer science. Yeah.
[00:18:58] Mark Wright: And then early in your career, you told [00:19:00] me that there was a real turning point. When you were part of the Lichtenstein Global Trust Training Program, which sounds like just an incredible three year experience for you in terms of training.
[00:19:12] Mark Wright: I know that we could probably spend the next part of our time on this, but encapsulate what that three year period was like for you in terms of skills gained and perspective gained.
[00:19:24] Kaj Pedersen: Yeah, no, absolutely. So, I work for the bank of Lichtenstein. well, it was Lichtenstein Global Trust, so I was on the asset management side of it, but, Prince Philip, with the bank of, Lichtenstein had this idea that for his leadership team, it made sense to build all Renaissance people he used to call them.
[00:19:42] Kaj Pedersen: And this idea was, can you combine the arts? Can you combine politics and history? Can you combine physical activities and other things to round out your executive team so that they actually bring more to the table than just You know, the [00:20:00] business view. So he set up this, he set up the, uh, at the time it was called the LGT Academy.
[00:20:06] Kaj Pedersen: I believe it’s still exists now. They’ve actually productized it and they’re selling it to other businesses. So it’s proven to be successful. And he had a guy called Tony Buzan. Who was, for those who don’t know Tony Buzan, he was the guy who created mind maps and he was the Dean of the initial school.
[00:20:23] Kaj Pedersen: And what they did is they brought in these thought leaders. So I had Ted Hughes, who was the poet laureate of Britain, teaching me how to write poetry. we had, PJ O’Rourke teaching us about, politics and history. We had professors coming in and teaching us about history and the art of history. We had artists, you know, at one point we were actually painting and drawing as well, and we were being taught Aikido by masters and, we were taught how to row and we had this ridiculous program where we basically, we were taken out of our work lives for a full month.
[00:20:58] Kaj Pedersen: And based in Switzerland, he now [00:21:00] has a place there, Schloss Freudenfels, which is the location of the Academy. And we were, basically living there, and being taught by these people. I mean, one, one occasion we, had the leader of the Boston Philharmonic Orchestra come in and teach us how to organize and manage teams, uh, which are actually, you know, the analogy is really powerful.
[00:21:18] Kaj Pedersen:, and I know at one point he had us singing as well, which I think. He was far too kind to my singing voice, quite frankly, but, it was a rigorous schedule as well. We would get up at three in the morning, have breakfast, go do our rowing, come back, have another breakfast, and then do a spiritual moment where we’re doing a keto and so on like that.
[00:21:39] Kaj Pedersen: Then we’d start our classes and our classes would go on all the way up to lunch and then we’d have lunch and then we’d start the classes on the following day and then at the end there would be some physical activity before dinner and then with dinner we’d have, you know, the opportunity to interact with the teachers who came in, these thought leaders, and then we’d spend some [00:22:00] time afterwards socializing.
[00:22:01] Kaj Pedersen: So most of us would get to bed around 11, 12 o’clock. And then we’d have work to deal with. And so, you know, one, two o’clock, we’re sleeping. And I guess what we’re waking up at three is so at some point, we all went to the prince and we said, this is not going to work. This is really powerful. So he introduced this concept, two things he did.
[00:22:19] Kaj Pedersen: First of all, he said, Well, you should be delegating. Why are you not delegating your work?, so that was, that’s how I learned to delegate by the way,
[00:22:27] Mark Wright: So what is the, key Kaj to delegation
[00:22:30] Kaj Pedersen: Delegation is clear instruction with accountability. Very simple, but most people don’t, you know, everyone’s like, Oh, I can’t do that. No, they don’t know how to do that.
[00:22:40] Kaj Pedersen: Absolutely. They do. You’ve got to give people the opportunity and then, make them accountable for it. and then the other piece was, he brought in this guy, to teach us how to power map. And I have to tell you, it works. I would go after lunch, I would do like a 20 minute power nap, get up and I’d be ready.
[00:22:57] Kaj Pedersen: And then after dinner, uh, or sorry, before [00:23:00] dinner, do another 20 minute power nap. And that’s how we got our way through it. And, at the end of it, I will say I learned a ton. The people that were there, by the way, Were the, in my class, I have the CEO of the Bank of Liechtenstein. We have the CEO of the business in Canada, the CEO of the business in Japan.
[00:23:20] Kaj Pedersen: We had the leading sales guy. We had the head of marketing, uh, myself and I was the junior guy. They, decided to bring in some junior people who they thought had promise to be a part of this. And the beauty of that was for somebody who’s young in their career, being amongst leaders and beginning to realize actually they’re human beings as well, and they have the same challenges and the same, issues.
[00:23:44] Kaj Pedersen: It’s just in a different level and a different role brings that, sense of, uh, opportunity to you much closer. And you realize, Oh, you know what?, if I put my mind to it, I could also do that one day. That was powerful. And I’m always grateful to Prince Philip [00:24:00] for enabling that.
[00:24:01] Mark Wright: that just sounds like a world class opportunity for you that really paid dividends. So you left there, you go to Silicon Valley and join your first startup. Was it Lycos that you joined in in
[00:24:10] Kaj Pedersen: No, it was Quote. com, that got acquired by Lycos though.
[00:24:14] Mark Wright: and Lycos? Refresh me. Was that an early search engine?
[00:24:17] Kaj Pedersen: It was one of the search engines at one time. It was the number one search engine, before it got, and it was acquired by Terra Networks and became Terra Lycos. And actually this is the, funny thing. The acquisition was done on the understanding that Bob Davis and the CEO of Terra Networks realized that mobile platforms were the future.
[00:24:39] Kaj Pedersen: And so when you think about it, this deal closed in 2001 and Terra Networks brought an audience of 50 million people on mobile devices. And so the idea was to figure out how to take search to that platform and drive it forward. Now, unfortunately, there was some internal politics, Telefonica was the owner of Terra Networks and they decided to fire the [00:25:00] CEO of Terra Networks and it kind of threw the whole thing into a tailspin, which is what led to the demise of Lycos, Terra Lycos, unfortunately, I think, when I look at it in hindsight.
[00:25:11] Kaj Pedersen: But I, I started with quote. com and quote. com was the first financial services site on the internet. It was started actually in 94 and it was very simple model subscription model in 94, believe that or not, where you basically put in a quote, send it to an FTP server and it will then deliver the results of that stock quote, the price, et cetera, et cetera.
[00:25:33] Kaj Pedersen: And that’s how it started. And then, when I joined the company, which was in 97, I believe, they were building out the web presence and the web pages. And in fact, by the end of, 99, we were the first to have streaming news, streaming quotes, streaming charts. And we also had an early foray into TV, uh, with a partnership through JAG FN.
[00:25:55] Kaj Pedersen:, and so we became a leading financial services website. We were doing something like 1. [00:26:00] 6 billion page views a day. We had a subscriber base of over 30, 000 people paying between 25 to 120 for access to our services and our quotes, for trading, et cetera. And, the business was, it was, you know, uh, doing really well in the context of its subscription model, as well as its OEM and advertising model.
[00:26:21] Kaj Pedersen: And that’s why I think Terra Lycos decided to buy it. And they bought, well, Lycos actually. Lycos bought it. And then, we became the finance vertical for Lycos. And about a year after that, I was asked to be the general manager to run the whole finance vertical and, led its growth, over that period.
[00:26:39] Kaj Pedersen: By acquiring Raging Bull and integrating a number of other services to create this whole finance vertical, for, the network. And, at the time we were second in profitability after search, uh, which I take an immense amount of pride in because the team, we had an extraordinary team, people who came from the financial services and were constantly [00:27:00] evolving and looking at ways to take our technology forward and offer these.
[00:27:04] Kaj Pedersen: Products that, you know, when you think about it today, it just, everyone’s got them. Back then, we were creating new technologies. Uh, creating new ways of doing things that hadn’t been done before and really innovating in the space to enable the access that people now have to their financial services and their financial data.
[00:27:25] Mark Wright: Wow. this is the 90s. This is the Silicon Valley. This is like the wild west, of startups, right? I mean, back in the day, in that environment, can you describe that environment, Kaj? Like what, what was it like? I mean, it’s like something out of a Hollywood movie, right?
[00:27:40] Kaj Pedersen:, it’s, you know, there’s a lot of egos. It’s an interesting, I mean, so it’s a very scrappy environment and, uh, a lot of people had strong ideas. A lot of people had strong opinions around technologies as well, which was kind of a fascinating debate in its own right. And the, you know, at the time we were standing things [00:28:00] up, not really knowing the full capacity or the physics of what we’re trying to deal with.
[00:28:06] Kaj Pedersen: I mean, I remember our data center at quote. com, used to be this old shack. I mean, I call it the old shack. It was a building of sorts, right next to a railway line. Every now and then, you know, one of our servers would fall out because the vibration of the train going by. And so suddenly we have an outage and we’re sending people down there to put the server back in and get it up and running again.
[00:28:27] Kaj Pedersen: So we learned how to build out, multiple servers so that if one fell. You know, we could have the farm still continue. The workload would fall over to something else. We were doing deals back then where people weren’t really understanding, what the value was. And so we had this extraordinary, amazing deal with Reuters and this amazing deal with Comstock who at the time they were like, well, we don’t understand it.
[00:28:54] Kaj Pedersen: Yeah. This doesn’t make a lot of sense. Yeah. We’ll give it to them for this. And so we locked them into these multi year deals. And so [00:29:00] when suddenly everyone woke up to what the internet was doing, they tried to renegotiate the deals. It’s like, well, no, we’ll keep the price. Thank you. And that’s how we were able to get some momentum and some traction.
[00:29:11] Kaj Pedersen:, and there was, I remember, um, you know, crazy things would happen. Like, I don’t know, if you recall, but we had a satellite outage back then. And that satellite outage basically knocked out all of the feeds from the data markets and everyone was relying on that. All the financial sites were relying on it.
[00:29:30] Kaj Pedersen: And I remember talking to a guy, my, uh, DevOps guy, James Ox. I said, we’ve got to get back online. And he said, well, the satellite’s out. I don’t know how we’re going to get the data feed. And I said, there’s got to be another way. And he said, you know, we still have the modems back in the rack that we used to use for the data feeds.
[00:29:48] Kaj Pedersen: James, power them up, figure it out. And so he went off and, uh, he powered them up, got the data flowing through. And I just remember going to one of our customer calls, Charles Schwab at the time was big on the trading [00:30:00] side and they were just livid cause they couldn’t get, you know, their customers are hitting them hard and they went round and they had all their vendors in there and they went round and sort of said, Can you get it up?
[00:30:10] Kaj Pedersen: No. Can you get it up? No. And they came to us expecting us to sort of say no. And I said, Oh no, we’re running. We’ve got our stuff going right now. And they said, how are you doing that? And so, so we said, well, we’re just running the modems. And we got the data through. And so it’s just sort of scrappiness trying to figure out how to get there.
[00:30:29] Kaj Pedersen:, even though all the odds are against you and all the constraints are against you. Uh, it’s also. Convincing people that new things, even in Silicon Valley, we had a change where I switched, where I was looking at switching our platform, our farms, to Windows. off SunOS. And we got into this ideological war within our company between people who were Sun fans and people who were Microsoft
[00:30:57] Mark Wright: This is back when Sun
[00:30:58] Kaj Pedersen: This was in [00:31:00] 1999. Yeah. And the reason why I was looking at Windows, to be honest with you, is one is I could do it on cheaper servers. And I could actually get more capacity. And one of the problems we were having with our Sun farms, our Unix farms, was we were blocking, we were blocking at about 50, 60 million page views per day.
[00:31:18] Kaj Pedersen: And we couldn’t seem to go above it without buying these, you know, 20, 000 servers. And that was just too expensive. And so we looked at, Compaq and Compaq at the time, we could get the server for about three to 5, 000. And then we realized with Windows, which was just, or Microsoft were just making their initial foray into NET, they called it DNA back then.
[00:31:39] Kaj Pedersen: And so we looked at what we could do then. I was able to work a deal out with Microsoft where they were willing to fund our prototype. And then I put a competition on in the company and I said, okay, I’m going to give you guys a competitive thing. Sun team, develop a new page with this. Microsoft team, develop a [00:32:00] new page with this.
[00:32:01] Kaj Pedersen: And whoever wins, based on performance, scale, etc., that’s the solution we go with. And that’s actually how we solve that problem. Uh, where people accepted the results. The data was very clear. And by making that switch, not only did I reduce the size of my farm, I also reduced the costs and, uh, made the switch so that, that’s what enabled us to get to 1.
[00:32:23] Kaj Pedersen: 6 billion page views. And the other piece of it was when Lycos acquired us, one of the reasons they acquired us is because of what we’ve done with the Microsoft farms. And they made the same switch for all of their servers. And it’s that kind of willingness to experiment, take risks, you know, go against the trend, go against the popular thought, even though it comes at cost sometimes, that you can start to see innovation happen and you can win people over and you can make a difference.
[00:32:50] Kaj Pedersen: Certainly.
[00:32:52] Mark Wright: the solution because they came up with it, right?, Kaj, help us understand compensation in the software startup world, [00:33:00] because I know that stock options and other creative things are part of the compensation. But I think for those of us who’ve not worked in that industry, it’s a complete mystery how all this stuff works.
[00:33:09] Mark Wright: Can you demystify that for us?
[00:33:12] Kaj Pedersen: So I think one of the things that, I always try to, let people know is that when you’re coming into a startup, if you’re looking to, you know, make the big bucks, maybe the startup space isn’t for you. Go to Candyland, you know, go to the big companies, be a widget worker by all means. They pay you hazard pay.
[00:33:28] Kaj Pedersen: And it comes with its usual consequences. And by the way, the risk of working in Candyland is just as high as working in a startup.
[00:33:35] Mark Wright: Candyland, IE, Google,
[00:33:37] Kaj Pedersen: The fangs. Yeah, the fangs. Yeah. You know, you get, your food, basically it’s the modern equivalent of the industrial revolution where they basically want to keep you in the office.
[00:33:46] Kaj Pedersen: So they give you everything you need so that you never leave. what we try to do with the startup space is, look, if you come into the startup world, you are going to be able to work with leading technical stacks as an engineer or as a [00:34:00] designer or as a data scientist. And today you’ll be leading, you’ll be playing with platforms and technologies that are a little bit leading edge.
[00:34:07] Kaj Pedersen: You will also be doing work where you’re actually having an impact. you’re going to have, ability to talk to everybody in the office. It’s a small team. Everybody has an opinion. Everybody is part of that conversation. And, and you can actually help drive and inform the success of the company.
[00:34:25] Kaj Pedersen: That’s where the options come in. The options are an important, in a sort of way of rewarding. That ownership mentality. you know, if you can show a way of driving performance and, improvements and productivity and other things for the company’s benefit, you should be rewarded in the upside of that.
[00:34:44] Kaj Pedersen: Now, on the other side, what I try to do is I always say to people, look, we will pay market rate for a company our size. and we’ve had some talent, talented people come in and we’ve told them, this is where we are in terms of our compensation, we don’t want you about your [00:35:00] bills and things like that.
[00:35:01] Kaj Pedersen: But at the same time, our expectation is, you know, we’re going to be competitive when it comes to compensation because we’re giving you upside through the options and it’s up to you to deliver on that promise. and, some people have said, well, you know, I want more and I’ve said, well, sorry, maybe this isn’t the place for you and I wish you luck.
[00:35:20] Kaj Pedersen:, and off you go. What I can say is, and I’ve been in seven startups. Fortunately, most of them have been successful. I’ve had a few that have hit the wall and gone belly up. I haven’t regretted those and I’ve never regretted them simply because of the lessons that you come away with, the experiences you come away with, the knowledge that you come away with, and the new skills that you come away with.
[00:35:42] Kaj Pedersen: are in themselves part of the compensation that a startup gives you. And, you know, yes, maybe your options are underwater and worthless. You were still paid, so you still covered your bills, but you were given this huge opportunity to learn and grow and develop as a person. That’s what the startup [00:36:00] experience is about.
[00:36:01] Kaj Pedersen: And we try to encourage people who want that entrepreneurial opportunity to come in and be a part of it. And so the compensation is structured in my view that way. We, pay a market rate. We look to rewards through stock options and performance is rewarded with stock options as well, because we want people who are bought into the vision to really be part of the upside.
[00:36:23] Mark Wright: That’s really interesting how you describe that. for those of us who’ve never exercised a stock option, can I take me through that? The company is saying we will give you the right to buy this amount of our company stock for this price for this period of time, or how does that work?
[00:36:37] Kaj Pedersen: Yeah. So generally the way that the, and our model is very simple. We basically have what I call a four year, stock option vesting period with a, So what that means is that the first year your options are not vesting until the 12 months and then you get your first year. So if say you have 10, 000 options, at the end of the first year, you will be awarded 2, 500 options that are [00:37:00] now vested that you can exercise.
[00:37:01] Mark Wright: That the company has paid for, right? They’re essentially giving you the
[00:37:05] Kaj Pedersen: That’s exactly right. And then what’s happening is, and it’s coming out of a stock option pool. There’s a pool that’s set aside for this purpose and the, so you get the 2, 500. Now, normally the strike price is really low. This is the advantage of, by the way, stock options over RSUs. Our strike price is, restricted stock units, which is what, the, uh, the Candyland companies are offering.
[00:37:28] Kaj Pedersen: Now, the problem with the Candyland RSUs, which is, they don’t tell you this, of course, they just tell you the number of what they’re worth and everyone goes, Oh, you’re going to be double taxed on that. It’s income and you’re going to get taxed when you exercise them.
[00:37:41] Mark Wright: Interesting.
[00:37:42] Kaj Pedersen: So I always try to point out to people options.
[00:37:46] Kaj Pedersen: You’re only going to pay tax once when you actually sell them. You can exercise them. So say, uh, just for purposes of theory, you, we give you a stock options of 10, 000 with a strike [00:38:00] price, which is the price that you can exercise them at for 1. After the first year, you get 2, 500 of those options and say the company’s valued at 5.
[00:38:09] Kaj Pedersen: You exercise that, you keep the 4. You don’t have to sell the stock. You’re now holding the stock, which is worth 5. It’s only cost you, you know, a dollar of that. So, so that’s where the upside benefit is. Now, if you hold onto that for a year, you can actually keep your capital gains tax down at the lower rate.
[00:38:28] Kaj Pedersen: Versus exercising them straight away. So there’s some tax things that you have to think about in terms of, the capital gains, but that’s the only thing you need to worry about. and then what generally happens with a four year vesting period with a one year cliff is that, uh, for the next three years, your options will vest monthly.
[00:38:45] Kaj Pedersen: And that’s, the standard practice in the market now, because it’s so competitive, we have to give people access to their options, their opportunity to buy into the option sooner. And actually I’m happy for people to buy stock in the company because it means that, they’re totally committed to it.[00:39:00]
[00:39:00] Kaj Pedersen: And it also gives them an advantage because it allows them to burn out their time on that, holding that stock period so they can reduce their capital gains at the end of it. That’s the advantage with stock options.
[00:39:10] Mark Wright: Yeah. And what does the one year cliff mean? And
[00:39:14] Kaj Pedersen: means that you’re not going to have your options vested over the first year until you’ve meet the one year.
[00:39:20] Kaj Pedersen: And so you then get, you get your first tranche of options.
[00:39:24] Mark Wright: the real wealth comes, you know, when you get these stock options early and then 15 years later, you’re 30, you’re 30 years old or whatever, 35 years old, and you don’t have to work another day in your life.
[00:39:36] Kaj Pedersen: Basically. And, but there’s a risk. I mean, I’m, I’m not gonna, I’m not gonna minimize the risk with startups. Eight out of 10 of them fail. There’s no, but that’s because they’ve, generally speaking, it’s a failure of execution or it’s a failure of timing in the market. or it’s a failure of not understanding, the, product market fit.
[00:39:57] Mark Wright: Well, I was going to ask you, what’s the most common [00:40:00] reasons that startups failed, the ones that you were associated with it, so, you know, so to speak, hit the wall, is that what happened with those?
[00:40:07] Kaj Pedersen: Yeah. So that, my first experience with failure was with a company called Urbana Software, which actually funny enough is in the same space that I’m in today, but back then, uh, we had figured out how to take a standardized test, like, the SAT, ACT, and, uh, the responses, the distractors to the question actually give you an indication of somebody’s knowledge around the subject matter.
[00:40:29] Kaj Pedersen: And so by, by analyzing a test taker’s results, we can actually tell them whether they have mastery in the subject or not. Then we can infer a remediation plan for them to say, for the SAT, you need to study these areas because this is where you’re weakest. and we had a lot of traction actually.
[00:40:48] Kaj Pedersen: Initially we had, we were talking to Princeton Review College Board E, ETS, Peterson’s, all of the test prep companies, and they were all excited about this idea until they discovered [00:41:00] how it would cannibalize their publishing business. And then suddenly they stopped talking to us. we got squeezed out of the market.
[00:41:06] Kaj Pedersen: And so in the end I had to make the decision that there’s just no way we’re going to break into the market at that time. And, we shutted the business, and sort of moved on. but what was interesting was the lessons from that. Uh, and this is why I’m excited about AstroMU is that there was a lot of barriers to entry.
[00:41:23] Kaj Pedersen: Then you had a test prep companies that basically had a stranglehold on the market. The technology that was required to stand up the solution was significant in terms of capital investment. And so, those costs and those risks. Back then we’re real, especially with a market that was as closed as the test prep market was.
[00:41:44] Kaj Pedersen: And, today with cloud services, uh, you know, you could start a business in this state, frankly, for what the licensing fees. So 250 bucks, most cloud service providers give you access to technologies relatively cheaply for free. So you’ll, [00:42:00] you can keep, your infrastructure and your costs really low.
[00:42:03] Kaj Pedersen: until you need to expand it by which time you’ll hopefully have customers and so you can use that revenue to drive your growth and keep a control on the burn rate.
[00:42:12] Mark Wright:, Kaj, when we talked a few weeks ago, you said that hiring, is really something that many, many companies underestimate in terms of the importance of hiring the right people.
[00:42:21] Mark Wright: And you said that your CEO, Adam Ray, actually has committed to interviewing the first 100 employees at AstroMU. So that, that speaks volumes about how critical hiring is. What’s the key to hiring good people and how many, how many folks do you guys have right now?
[00:42:38] Kaj Pedersen: So we’re about 65 people today. and, uh, you know, hiring for a startup is absolutely the lifeblood to its success and finding the right talent, finding the right people, uh, who can come together, uh, and unify around a vision is, is huge. And the, Adam’s view is actually a good one [00:43:00] because what he’s trying to do is he’s trying to establish, a culture around our ability to dream and deliver together.
[00:43:06] Kaj Pedersen: And so there’s this idea of, you know, I call it the three C’s. So when we do our hiring, we have three C’s and the three C’s are culture, Capacity to master capabilities. Culture is the most important thing. And we have a set of values within AstroMU, you know, things like, customer focus, accountability, ownership, bias for action, frugality.
[00:43:27] Kaj Pedersen: All of these are sort of values that we’ve. use to decide, how somebody is going to be successful within AstroMuse, journey. And it’s important when you hire people that you’re looking for those threads in their resume. So I, I sort of look at it in the sense of what is the narrative, in the spaces between the lines of your resume, telling the person, and what are the threads that you can pull to sort of identify whether that person is actually aligned to those values or not.
[00:43:57] Kaj Pedersen: And you have a conversation around that. [00:44:00] So that’s the primary focus. Then in the same vein, you’re also sort of looking at their journey and saying, how have they learned? Are they actually mastering new things? Are they actually continually remaining curious and developing and growing? And is that, trajectory telling us that?
[00:44:16] Kaj Pedersen:, and then finally, we’re interested in the skills and the capabilities they have now. So we’ve sort of focused on those three things. I’m more interested in the first two, culture and capacity to master. If they’ve got those, then I, I’m not so worried about the skills.
[00:44:28] Kaj Pedersen: Because the simple truth is in a startup, your skills are going to change. every two to five years. And that’s just the way it is. You’re growing so rapidly. You have to be comfortable with that learning velocity. and so that capacity of master becomes essential. and so Adam’s view is if he can get this, if he can bring in a team of people with that, sort of sense of values, then they will own that as well.
[00:44:54] Kaj Pedersen: And so we spend time working with our teammates so that they actually do the interviewing. [00:45:00] And the other thing we don’t do is we don’t abdicate hiring decisions to HR.
[00:45:06] Mark Wright: Yeah.
[00:45:07] Kaj Pedersen: It doesn’t make
[00:45:07] Mark Wright: too important,
[00:45:08] Kaj Pedersen: It’s too important. The hiring manager, in the functions that I run. Is responsible for driving the hiring in their organization and also making sure that everybody in that is part of the process so that we have, uh, as we’re hiring people, they are infused with the culture.
[00:45:27] Kaj Pedersen: And then they are looking for people because who are also infused with the culture. And so it becomes a multiplying effect. So if you’ve got your first hundred people bought into the values that we have in AstroMU, then they’re going to hire against those values as well. And we see that success. I mean, you know, uh, good, good, we’ve got great examples of it within this area.
[00:45:46] Kaj Pedersen: Slalom is a company that always comes to mind for me because they’ve always had values around their organization and the way they’ve built themselves. And they’ve scaled themselves around those values and their mindset. And they hire with that as well. And [00:46:00] because they started with that, it stayed alive within the organization as it’s grown.
[00:46:04] Kaj Pedersen: We have the same philosophy.
[00:46:06] Mark Wright: How does a small startup avoid turning into a quote unquote Candyland company? Because, there’s no disputing that these massive mega companies are extremely good at making money for shareholder.
[00:46:20] Kaj Pedersen: Yeah,
[00:46:20] Mark Wright: There’s no doubt,
[00:46:21] Kaj Pedersen: there’s no doubt.
[00:46:22] Mark Wright: but, but there, there is some question as to whether they are honoring human beings in the process inside their companies.
[00:46:30] Kaj Pedersen: it’s a really hard problem. And I think there’s a certain point where the scale gets to, uh, a place where, it becomes harder to align around those values. And we see it all the time. I mean, you know, Google, very quietly changed its do no evil to something else, right?, and there, there are other
[00:46:48] Mark Wright: like, that’s like changing the Hippocratic Oath.
[00:46:51] Kaj Pedersen: Exactly.
[00:46:52] Kaj Pedersen: Exactly. And I think when you get to a certain level of scale, there is, this, what happens with big companies, to be honest with you, is that [00:47:00] they’re motivated by the revenue. And when you get to a certain size, it’s very hard to materially move your top line in a significant way to satisfy the growth aspirations of your shareholders.
[00:47:16] Kaj Pedersen: And so everything becomes about managing the risk around your top line. And, uh, how, and how you can grow that top line, which is why acquisitions become important. And, looking at the Microsoft, for example, is just, they’ve completely changed the landscape because of what they’re doing with open AI.
[00:47:34] Kaj Pedersen: Now there’s a lot of costs associated with open AI. There’s, there’s still a lot of lessons to be learned, but the promise and the potential is real. And it’s much, it’s not marginally moved. the top line for Microsoft. It’s actually significantly and materially moved the top line for Microsoft so that they’re now becoming hugely relevant as far as the marketplace is concerned.
[00:47:56] Kaj Pedersen: And that’s driving a lot of the competitive forces that you’re seeing across some of the other [00:48:00] big companies. They operate at a completely different level, which sometimes means that there is a human cost associated with that. And that’s why I say, when you go to Candyland, You’re going to be paid hazard pay because sooner or later, if you’re, if you get yourself locked into a, assembly line widget area that is no longer relevant, they will cut it.
[00:48:21] Kaj Pedersen: And that’s just the way the portfolio is managed. startups, uh, you know, I think we have an opportunity to be more humanistic and there’s a reason why it’s because, we’ve got to, you know, we’re going to be riding this rollercoaster of human emotions whilst we try to get a product out there, so you want to make sure that you’re doing it with people that you like to be around.
[00:48:40] Kaj Pedersen: Even in your bad days. And, uh, that’s where the startup experience, I think has, the opportunity for people who are interested and has the opportunity to create those connections and to really make a difference where you, build friendships. you have meaningful impact in the world. And if you’re lucky enough to stay on, [00:49:00] uh, say through an acquisition or an exit, and you grow with the company, fair play to you.
[00:49:05] Kaj Pedersen: But recognize that your, what brought you into the startup is not necessarily going to be where it ends up down the road.
[00:49:12] Mark Wright: It reminds me, as you were talking, Kaj, of You know, the men and women who defend our country work in teams where the team lives and dies based on the commitment to the team of all the team members. And it only takes one team member dropping the ball, to really sink things. I don’t know if that’s a great analogy, but it just seems like the stakes are super high and, and the solution is, is just depending on each other.
[00:49:36] Mark Wright: Right.
[00:49:37] Kaj Pedersen: That’s right. And I think the, and so, you know, you, you see a lot of, uh, within companies, you see a lot of politics around, who to work for. because they sort of have the budget and they, and they’ve organized the teams and they can see that their success by being associated with that person because they know how to do it.
[00:49:53] Kaj Pedersen: But when that person goes, you can rest assured that the ruthlessness of those assets are going to be redistributed to other [00:50:00] teams where there’s maybe a better player. So there’s a constant sort of political game going on there. The military have figured it out because they have sort of this top down command structure.
[00:50:09] Kaj Pedersen:, and you know, I think most generals will say to you that when they go into battle, they have a battle plan, but it changes the moment that the first shot’s fired. And they have to rely on the individuals on the ground. So the whole training is around, you know, knowing the person to your left and to your right and trusting that they’re going to do their job.
[00:50:27] Kaj Pedersen:, and the military spend a lot of time getting that structure in place. I don’t think businesses have, the resources to kind of put into play that level of training that’s required to get to that level of commitment.
[00:50:40] Mark Wright: We talked about hiring, Kaj. What’s the key to managing the team?, young workers in America today, because I think some people are lamenting Gen Z. I think a lot of people would say that this generation is asserting, themselves in a way that we should have when we were in our twenties. But I’d love to [00:51:00] know just from a practical standpoint, what’s the key to managing young workers in America today?
[00:51:06] Kaj Pedersen: So I think a lot of it is about authenticity. I think it’s, one reminding the, uh, young people, certainly the people I work with. I try to remind them of the, the fact that, they have a job to do this. This isn’t, this isn’t a place where they can come and sort of pick and choose what they want to do.
[00:51:27] Kaj Pedersen: They actually are going to be held accountable for something. And they are part of that story and that’s what they’re being paid for. And so it’s coaching, it’s being available to answer questions. It’s helping them understand why decisions are made in the way that they’re made. it’s enabling them to, uh, own.
[00:51:45] Kaj Pedersen:, and doing so in a way that I think, will allow them to aspire to the mission in the first place. So a lot of them are driven by the mission. What I will say about Gen Z, I’m, I’m a lot more hopeful about Gen Z than I think a lot of people are. I think they have [00:52:00] a consciousness around, entrepreneurship.
[00:52:03] Kaj Pedersen:, instinctive entrepreneurship, which may surprise us, uh, you know, 15, 20 years down the road. Uh, they see the world, in a different way. Uh, they’ve worked, you know, they’ve sort of grown up. They, I look at my son, for example, he grew up when, the great recession happened and he saw how. My wife and I had to deal with the circumstances around that.
[00:52:23] Kaj Pedersen:, he’s seen, the pandemic and had to kind of live through that with his college and the resilience that’s required there. They’ve seen, the conflict opening up again in the world, if you look around. and to some degree, there’s some sort of woolly headed thinking going on around the conflicts as well.
[00:52:39] Kaj Pedersen: The simple truth is that there’s some bad people in the world. who are orchestrating a massive conflict and we’re getting distracted by things that don’t really matter. And so we have to try and figure out how to help people see the bigger picture, that historical context is really important. Gen Z, I think, get it, as a whole.
[00:52:57] Kaj Pedersen: Uh, yes, we see a lot of, [00:53:00] uh, youngsters who are using TikTok and using the mobile platforms, and they can use that effectively and well, and they’ve, grown up in a world where that is the platform. You know, when I grew up, it was the telephone. And everything on technology is sort of tied to that telephone experience.
[00:53:15] Kaj Pedersen: And, they only know the mobile apps. And I look at my son when he looks, when he does things with his phone, I’m going, it wasn’t designed for that, but you’re doing it, that’s kind of cool. but it’s that, that creativity that will come through in the, in the long run and maybe these, inflection points like the great recession, like the pandemic, like the, uh, the conflict that’s emerging in the world.
[00:53:36] Kaj Pedersen: These are things that are going to make them more resilient. And actually, I think in time, become a people that we can be proud of, you know, and, you and I at GenXers, we had our tough times as well. I mean, I grew up in the eighties. We had a recession as soon as, uh, I was in the UK at the time.
[00:53:55] Kaj Pedersen: So in 83, we had a recession, because we had to fix inflation and inflation [00:54:00] back in the UK, back in those days. And I know it was high here as well, but we was running at 16, 17%. And so I like to sort of, and this is where I have a conversation with Gen Z and they say, Oh, it’s running at 6, 7%. I go, actually that’s kind of normal for interest rates.
[00:54:16] Kaj Pedersen: And 16, 17 percent is when it’s really bad news. and, and then you have not only do we have all the, shocks, uh, we had conflict throughout the eighties. We had the cold war coming to its zenith. if you listen to the music, most of it is, is related to the, The underlying fear of the Cold War between the Soviet Union and the US.
[00:54:39] Kaj Pedersen: And then when we broke out of that, we had a moment of sort of wonderful opportunity with the 90s and where everything’s sort of like the peace dividend, which, you know, arguably in historical context, we squandered. Uh,
[00:54:51] Mark Wright: And let’s face it, you know, grunge was invented in the 90s.
[00:54:54] Kaj Pedersen: was, there’s a whole bunch of things that we, we lived through, uh, which this generation is also [00:55:00] going to live through. And I think they will come through it fine. I think I have. I look at the majority of them. I ignore the voices on the edges because to be honest with you when you look at social media people forget it’s like 20 percent that are doing the talking.
[00:55:14] Kaj Pedersen: There’s a whole bunch of people underneath that 80 percent who are getting frustrated and tired with some of the extreme expressions that are coming out. And it’s that 80 percent that I have faith in.
[00:55:25] Mark Wright: Well, as we start to wrap things up, Kaj, one of the values that we hold as a company, our founder, Dan Rogers, believes that getting paid to practice BEATS WORKING to get paid. And I think we’ve covered, and really the idea is that work should make us better in all parts of our life, including who we are at home, and it shouldn’t just be a transaction of trading time for money.
[00:55:47] Mark Wright: And I think that we’ve talked about the difference between, you know, some of the big tech companies and some, some of the startups. And, there’s a lot of gray area. I just, I’d love your thoughts. Kaj on that [00:56:00] concept of getting paid to practice, getting paid to develop as a human being in a way that makes us better globally, right?
[00:56:08] Kaj Pedersen: So I think part of that is also how you express yourself in terms of service to the community. You know, when I think about it, you and I are both Rotarians. So hopefully I haven’t let a secret out of the bag there. But, uh, one, one of the problems with Rotarians is we don’t tell anybody that we’re Rotarians.
[00:56:25] Kaj Pedersen: We just get on with the job of serving the community. What’s wonderful about being paid to practice is that we’re learning lots of skills in our work, which we can actually take out and apply to the community. And this is where the Rotary story for me is really important. it’s about service above self.
[00:56:41] Kaj Pedersen: It’s about how do we help change the community to a better place? How do we make changes? We can leave the community better than we found it. And Rotary’s story is all these business people coming together, in service and really having an impact. And talking about it at work, you know, I try to bring employees into [00:57:00] club meetings.
[00:57:00] Kaj Pedersen: I try to help them understand that there are ways to give back. you know, you’re, you’re in a situation where you’re being paid. Well, you’ve got a, you know, you’ve got some, you’re probably sitting there saying, well, what’s the meaning of life? Where can I make a difference?, you know, I’m showing up nine to five, but I really don’t know if I’m making a difference.
[00:57:20] Kaj Pedersen:, the service side is where I’d like to encourage people to start to explore. Give back to your community. Look for the opportunities within your community where you can make a difference, thanks to the situation you’re in today. My avenue is Rotary, uh, and, I’ve had a wonderful journey through that organization where, we’ve organized, uh, well, we do the 5K run in Bellevue, for example, for the last 17 years, which is the big running event.
[00:57:45] Kaj Pedersen: We organized that. It’s like a business, but all of us are giving our time for free. And then the money that comes back, we reinvest back in the community to support things like kindering, you know, which is sort of focusing on autism, but really sort of healthy lives for our kids [00:58:00] and, families. And, uh, and I know that there’s lots of rotary clubs that are doing that where they’re tapping into that vocational legacy and bringing people in to support their community.
[00:58:10] Kaj Pedersen:, and so when you go back to that phrase BEATS WORKING, I think, you know, you’re getting paid to practice. Take that practice and beat working by actually giving back in some other way. And the rewards from that, the feeling of, uh, community engagement and satisfaction from making a difference, uh, perhaps the best rewards anybody could have.
[00:58:32] Mark Wright: And I’m glad that you brought up Rotary. I completely forgot to bring up that, the topic. Kaj, you are the district governor, uh, for District 5030. So about 50 clubs in the Seattle area. And you’ve done a fantastic job of leading us over the past year and your term is coming up, to its end. But I feel like your leadership in Rotary is a full circle moment.
[00:58:54] Mark Wright: A lot of people don’t know that. Polio is almost gone in the world because [00:59:00] Rotarians decided to roll up their sleeves starting in the late seventies and deliver polio vaccine all over the world. And didn’t your mother have polio?
[00:59:07] Kaj Pedersen: My mother’s a polio survivor. Yeah, absolutely. And, she’s now, this is one of the reasons why I say to people, we can’t go to sleep on polio, you know, The virus is a vicious, vicious little virus and it will look for any weakness in our program to lock it down and prevent it from escaping and creating the turmoil that it used to do back, you know, 50 years ago.
[00:59:29] Kaj Pedersen:, and the, Polio is, to me, is personal. My mom now is in her eighties and she’s now got what’s called post polio syndrome, which is where essentially it comes back as you age and your muscles degenerate. but she was able to overcome the disease, was able to walk and live a normal life, apart from the fact she also got malaria.
[00:59:49] Kaj Pedersen: So she’s like got, you know, the two big diseases, that you can unfortunately get. And so she was, She’s a strong lady. you know, I admire her, her resilience and her [01:00:00] fortitude in terms of what she’s had to deal with because of that disease. And the, I don’t want to see that on kids in the future.
[01:00:06] Kaj Pedersen: And so Rotary, that, that, for me, that was a calling. of making a real difference to prevent that disease from, you know, ultimately coming back. And we’re down to two countries now, Pakistan and Afghanistan. And the great thing about Pakistan and Afghanistan is that they’ve got, everyone’s committed to try to eradicate it as well.
[01:00:27] Kaj Pedersen: So they’ve actually got the communities and it’s only because of Rotarians being on the ground, having those personal relationships. That made the difference. And those Rotarians, in some cases in Pakistan, have been killed because of advocating to sort of end polio. when you think about the sacrifices to actually help make a better life for your community could also result in the end of your life.
[01:00:52] Kaj Pedersen: That’s, it’s shocking to many people, but that’s the reality of Rotary on the ground. We will be there. Make those kinds of [01:01:00] sacrifices to ultimately make our communities better. And if that means ending polio, uh, in some of the more hostile environments, then we will do that.
[01:01:08] Kaj, before we wrap up, I have to ask you about AI and quantum computing. I feel like a lot of people are saying this is like the Gutenberg press being invented all over again. Is there any way, to give us an idea of what this is going to do to change the world? These two inventions?
[01:01:24] Kaj Pedersen: yeah. I mean, it’s, it’s, wow. If we can get quantum compute going in a realistic way, the costs associated with compute power is going to drop dramatically. That in itself is going to be transformative for AI. Now, when you think about AI, I try to simplify for people. AI is essentially working with large data sets.
[01:01:47] Kaj Pedersen:, you know, data at scale and using statistical models to identify patterns and then using that to give you some predictive insights. That’s AI. And I know a lot of people are sort of talking about it being satient, et cetera, [01:02:00] et cetera. No, it’s not. Yes, there are some things that happen in the models that we don’t quite understand, but it’s not because the machine has decided to start thinking for itself.
[01:02:08] Kaj Pedersen: It’s because there’s a discrepancy in our understanding of the math. And, The transformation it’s going to do. Look, if we, I think we’ve hit the low hanging fruit, there’s some bottlenecks that we have to now address. One of them is compute power. The other one is transparency in our models and the quality of data.
[01:02:25] Kaj Pedersen:, and acquiring that quality of data is going to be exponentially, even more expensive than what we’ve got today. and then you’ve got the last mile challenge, right? Which is how does it impact people at work? How did they adopt it? How do they take advantage of it? And there’s some wonderful things that we’re doing today, which kind of give you an indication of where we can go.
[01:02:47] Kaj Pedersen: with regards to improving our ability to do meaningful work. So instead of being, uh, you know, tied down with, some of the mundane work that we have to do in terms of writing texts and stuff like that, [01:03:00] we can actually put our minds to thinking about bigger problems and let the mundane work be taken care of.
[01:03:06] Kaj Pedersen: I think that’s where the opportunity lies. And then there’s the automation that can come from it. And, you know, if you look at Tesla, everyone thinks it’s a car company. Actually, it’s a data company. And all the data it’s capturing and learning the cars like the is the tool to enable that and it’s going to give us all sorts of different insights in terms of driving patterns, how we can improve our roadways, how do we take advantage of, some of the, behaviors that we have on the roads, things like that.
[01:03:32] Kaj Pedersen: There’s all sorts of incredible things that are going to come out of our ability to interpret, read data and make some insights on that. But we’re, we’re a long way from it. We still have to solve some of the bottleneck issues that I mentioned earlier.
[01:03:45] Mark Wright: Yeah. Well, this has been such a great conversation. Kaj Pedersen, thank you so much for taking time to join us on BEATS WORKING and sharing your wisdom. continued success, my friend, and I look forward to seeing you soon.
[01:03:56] Kaj Pedersen: Absolutely. Thanks for your time as well, Mark. It’s been a pleasure.