Ray Guzman: AI and the Paper Ceiling
Tom talks with Ray Guzman, Army veteran, adviser, board member, strategist, and CEO of Switchpoint Ventures, an innovation enabler making AI investments in organizations that seek transformation through machine learning.
Ray and Tom talk about:
What should non-technical people know about AI?
How do you overcome not having a college degree?
What advice do you give young entrepreneurs?
What makes a believer out of a rational skeptic?
Transcript
[00:00:00] Tom: What should non technical people know about AI? How do you overcome not having a college degree? And what's the paper ceiling? What advice do you give young entrepreneurs? These are some of the questions we ask Ray Guzman, Army veteran, advisor, board member, strategist, and CEO of Switchpoint Ventures, an innovation enabler making AI investments in organizations that seek transformation through machine learning.
Ray talks about his time in the Army and as a high potential employee at Microsoft, the place mindfulness plays in his life, and how he evolved from being a rational skeptic to a believer on this episode of the Fortune’s Path podcast.
[00:00:54] Ray, it is great to see you.
Tom: Thank you for coming on the show. You're a self made person and there are a lot of things I really admire about your personal story. If you could take a second to tell me how you got into tech and how you became an entrepreneur.
Ray: I appreciate you having me on. Maybe we start there, right? Self made's an interesting term, and I definitely know what you mean by it, and I appreciate you saying it that way. One of the things I've learned is no one does anything, on their own, and there's just so much that goes into each of our individual kind of journeys and success stories.
But to answer your question, I joined the military at 17 years old, a bit of a knucklehead as a kid. I knew I needed to get some discipline and probably the best decision I ever made was going somewhere where I knew they would instill that discipline into me. Met my wife pretty quickly after joining the military and we had a child, quickly after we got married and life got really real, really fast.
[00: 02:05] I wanted to get promoted at a faster rate and just provide for my family. The only way to do that in the military is to get promoted and you don't necessarily control that timeline. So it became an opportunity for me to think about my career a little more critically, get more focused.
In the process of doing that, I started to get recognized as a high, I'll call it a high potential soldier. They were thinking a lot about quote/unquote automation. That's what we used to call IT back then. Decided they were going to send me to computer training. And that's actually how I got into IT.
[00:02:42] There's one small, interesting backstory, which is my wife's unit. She was also military, had internet back then. This is like ‘95, ‘96. She was really insistent that we buy a computer. If you recall back then, computers were really expensive. It was somewhere around half of my annual salary as a soldier or half of her annual salary as a soldier, so not an insignificant purchase, but it turned out those two things combined - her kind of forcing the issue and me wanting to get promoted, proving myself to be a very capable soldier and getting recognized for that.
Those two things culminated in me getting a lot of training during my time in the military that served me really well when I got out in the early 2000 timeframe.
[00:03:27]Tom: I actually think automation is a terrific term for IT. We're already back to that. You have a deep background in AI among other things.
Talk to me a little bit about what people who don't know anything about AI should know about it.
[00:03:46] Ray: Yeah, great question and great point, by the way. It's interesting the world comes full circle and we're back to automation. From an AI perspective, I'm excited that the masses are becoming aware of how capable these platforms are and are imagining where it could go.
We've been in this business in the AI space - and for our healthcare team in particular - for about a dozen years. One of the things our chief data scientist always tells people, “it's data science, not data magic”. Right? There's this, you interface with something like a ChatGPT and in one respect, it just blows you away because it does a good job of stitching words together. What is sometimes lost is the sequence of those words don't necessarily have an appropriate meaning. The answers you're getting, while they seem very authoritative and correct, may very well be wrong, and in some instances completely manufactured, by the AI.
What you're experiencing, I think, currently is the power of what this is capable of doing and it's easy to imagine where we might go with it as a society and the velocity is amazing. You're seeing these huge leaps and how fast these evolutions are coming, but I think we're a long way from the kind of end of time scenario that people fear, if we ever get there at all.
The more you work with these systems, the more you realize how big the gaps are. We've got a long way to go in order to close those gaps. It's easy to think about the sci fi thrillers and the things that we see on Netflix, et cetera. We're nowhere near that at this point in time.
[00:05:37] Tom: A concern that I have about AI is it doesn't show its work. If I think of ChatGPT as a form of search, when I search Google, what it's telling me to go to is completely transparent, and I can make a determination myself about the authority of the sources it's pointing me to. ChatGPT hides that entire process, so I have no idea where it's getting its information.
Is it possible for AI to essentially show its work?
[00:06:08] Ray: Yeah, great question. There are a couple of layers there, right? In one sense, even the example you gave with Google, it doesn't necessarily show its work. It shows you the output of the work. But to your point, it's something you could go back and validate and check and you can make a determination about the reliability of the source and whether it's something you're comfortable depending on as a data point.
In many respects, these models that are coming to the forefront. A lot of these things are not, we're not gonna see the work in the same way that we don't see the work that Google search does to use your example, but we are experiencing the output.
What you're really poking at is how do I know that what it's telling me is actually steeped in being real, right? If you're following what's happening on the Microsoft front, what they're doing with Bing now with ChatGPT integrated into it is they actually are tagging the data sources now, so it's a fairly recent development. People are concerned in the same way that you are and myself included. Where it gets interesting is now you're starting to get a better read on not just the output, but also where are the sources that the models use in order to generate this output? You can click through and start to interrogate those. So we're going to get there.
Explainability is hard. My experience has been the more sophisticated the models, the more of a black box it is. It's hard to see under the covers and always know if you have these unsupervised models that are being used. But there's a lot we can do to try to close the gap in the way that you're describing.
[00:07:51] Tom: That's interesting the phrase used about an unsupervised model. That's another concern that I've heard among people saying that it's because they are a black box by design, really. We can't see how it's getting from one conclusion to another conclusion. It does that at a rate that's much faster than what we can do. That's why they're useful.
But they may, because there isn't a consciousness there, there's no morality. There's no spirit. It's just an algorithm. It's just churning. There's nothing to stop it if it comes to a conclusion that a human being would say this is insane. What are your reactions to that?
[00:08:38] Ray: Yeah. Under the AI, it's a really broad category. I'll delineate a little bit here between the two extremes. In our work, which is predominantly health care focused, we generally need a lot of explainability. That limits the kinds of models and the kind of approaches we can take.
In other scenarios, you think about the Netflix scenario where it just prompts you for the next movie that it thinks you want to watch. Those are often models that don't necessarily have explainability to them, but the stakes are not so high, right? The worst thing that happens is it opts for a movie you end up not liking.
Ironically, the machine gets smarter about that. Whether you choose to, or when you choose to watch it or not watch it. Back to your point - for the advances that I think people are looking for out of these platforms, those are going to be black boxes. There's no getting around it. There's some real good reasons for that, right?
We have a lot of bias about end states, right? I'll use a healthcare example. If you think about a given condition, we might think: Hey, these five things are the drivers of that condition. As we are learning all the time, there’s a sixth dimension or seventh dimension.
Those are the types of things that machines are really good at discovering because it doesn't have that human bias in it. In respect to whether a given data point is correlated to a given outcome. So you're going to see a lot more of that as these models get more sophisticated. It goes back to some of the guardrails that we're touching on here.
[00: 10:15]What do we do about that? How do we manage that? I talked about bias being a bad thing in the sense that it may skew the types of how you approach building models, which is where I think letting the machine do a thing is very powerful. But bias is there's two sides of that coin, right?
So inherently our negative biases are in data as well. It's a complicated thing to unpack. My hope, my ambition for us as a society is that we think smartly about these things and put the appropriate measures in place to get the best out of these tools without exposing ourselves to scenarios that just don't make sense for us.
In the end, I think it goes back to: What are we designing these tools to do? How should they be used? To give you a really practical example, I recently had to update my bio and I took my existing bio and, I just cut and pasted it in ChatGPT and said, Hey, rewrite my bio.
[00:11:14]Honestly, it did a much better job than I did writing, but I have a friend who's a fairly prominent business executive, and he actually queried ChatGPT and said, “Hey, write my bio”. The difference, however, was he asked an open ended question and ChatGPT had to figure out his bio.
In my case, I actually gave it my bio as a starting point. For my friend, it turned into something that was completely fictitious. In his bio that it wrote for him, it said he was a physician and it actually told what medical school he went to and when he graduated - the whole deal. It was completely wrong.
He is in health care, but he's not a physician. I use that to illustrate the point that we've got to figure out: how should we use these tools? What's an appropriate use of them? How do we get the most out of them? Going back to that opening statement - it's data science, not data magic.
[00:12:18] Tom: In our newsletter, we recently wrote a post about AI and I'm interested in your opinion of the advice that we gave. It’s based on a quote from my favorite writer, Michel de Montaigne, who says only the fools are certain and assured.
AI is pretty certain when it presents you with its answer. AI is, these are essentially fools. All machines are fools. They have no doubt. In my opinion, doubt is the foundation of wisdom. Is that a reasonable assumption when I'm dealing with a machine to assume I'm dealing with a fool?
[00:12:57] Ray: In that context, I would say yes. Even if you take it back a step further. Think about the inputs that are being used to give the machine its confidence. It's coming from us. To your point, there are people that write very authoritatively on subjects that are probably inputs to those models and influence the output of those models.
Like you, I question things and I think we should question everything. I had a board meeting yesterday with with one of the companies I'm involved with and I was talking to the CEO last night after the board meeting. He got a bunch of counsel from his board about a given topic, and it wasn't necessarily conflicting, it was just everybody was coming from a different perspective.
[00:13:42] His question was: how do I, what should I do here? I reminded him at the end of the day your best outcome is to surround yourself with wisdom. Ultimately, you have to call the ball. You've got to make the decision. You've done yourself a service by surrounding yourself with people that can ask the right questions and challenge you, but ultimately, you've got to decide.
That applies in this instance as well, which is to say, let's leverage the power of these machines, and to your point earlier, especially if we can understand the inputs that went into the output that they're giving us. We can interrogate those ourselves and have some confidence in the machine's confidence.
But even when you link back to the source, who's to say that the author of the source was correct and isn't, to use your kind of context, a fool to begin with? We've got to go all the way to the sources to really understand, to have understanding.
[00:14:41] Tom: I want to pivot for a moment. We'll come back to this subject, but I want to pivot for a moment to talk a little bit more about your personal story. My understanding is you're an autodidact. You really like to teach yourself new stuff. Tell me about something that excites you that you're learning right now, or something from your past that you were really excited when you started to learn about it.
[00:15:12] Ray: Yeah, I appreciate that. I am just a naturally curious person. I always have been. So I love learning about new things. If you're not careful, a new thing turns into 20 new things. It feels like this never ending pursuit, but I enjoy it quite a bit. My answer to your question about what I'm learning now, that's really impactful, I'm 45 years old. Still young. Not super young, but not old enough to be old. I'm starting to think a lot about the future and life and legacy and all those things.
Tom, one of the things I think I've under appreciated - and my wife's been super helpful in this regard - is just mindfulness. Being more mindful about what I eat, being more mindful and intentional about rest.
Some of that's probably just the aging process. It's slowing me down anyway. But also just my mind, I find that I'm constantly thinking about things. It's hard to turn my brain off. When I carve out time to be mindful, I'm still invaded by a million ideas and a million thoughts.
There's a lot of value in doing that. I know that the science proves it. The process of actually doing it is still challenging for me, so I'm starting to turn a lot of energy towards figuring out how to be better at being mindful and being quiet and being still, because I know that's going to, in the end, pay off. Not just from a health perspective, but even from a productivity perspective.
[00:16:48] Tom: When you say you have trouble being mindful, can you tell me a little bit more about how that trouble manifested?
[00:16:55] Ray: Great question. Appreciate you digging in. I should have been more expressive there. [Tom: That's all right.] If I sit down and just try to carve out 20 minutes of quiet time where I just want to focus on my breathing, relax, clear my mind.
I can do that for a period of time, but it's not long before, oh no, I forgot to do this, or I forgot to call Tom back, or, oh, you know what, tomorrow's the day that this is due, or whatever the case might be. For me, I know that maybe for others it comes very naturally.
It certainly looks that way to me, that some people just have a gift for that. That is not a gift I have. I have a hard time shutting my brain off. When I'm able to do it, it's super valuable. I really enjoy the time but it's work. It's real work for me to try to do that. It's an area I'm trying to explore further and get better about.
[00:17:50] Tom: I have a couple of comments, suggestions on this topic. So I will occasionally meditate myself. I'm a very undisciplined person, I don't do anything every day except eat. That is like nothing. But anyway when I do meditate I used to resent the invasion of thoughts that were unwanted.
And there are times when I feel like in the process of meditating, I'd feel like I was failing at meditating because things were just coming in my mind. Now I’m much more welcoming to those thoughts because some of them are actually really good. Sure. It's a little bit like that feeling of when I first wake up and before I'm fully conscious, occasionally I get some really good ideas.
Now I'm less concerned about that. Even if the whole session, my session is only about 10 minutes, even if the whole session is like just stuff churning, I'm able to like, oh, I had a moment there. It was a moment where I was aware of my breathing, or I was hearing what's around me.
That's another thing that I find to be very helpful is not...just to think about my breathing, but to listen to the environment around me, it's oh, that's the air conditioner. Those are the birds. The other thing I'll mention is I had a pug for 18 years who I was very fond of, and she was a great inspiration to me for being in the moment.
Animals have that presence. Little kids can have this too, but animals definitely have that presence of “I'm here. I'm nowhere else. This is all I'm doing.” And so studying for me, studying animals is very inspirational.
[00:19:49] Ray: Yeah, that's super interesting. So a few thoughts there. Twenty minutes is my goal.
I'm definitely not able to 20 minutes though. You said 10 minutes for you and you may have me beat in practice, right? So I'm trying to try to get there. And no, look, I completely understand what you're saying about clearing your mind sometimes will bring forth or produce, really good ideas.
Interestingly enough for me, probably, unfortunately, that happens to me mostly around bedtime, which makes it hard to go to sleep sometimes. But your comment about presence is super interesting because in the end that's part of the goal, right? It's if I can learn to focus and be in the moment, even if that moment's a quiet moment, it also helps me get better about being in the moment when it's a focused moment.
So if I'm in a meeting, same thing, right? You could be present, a meeting where you're trying to be productive on a given topic. But if your mind is all over the place, you're not being very productive. Being able to focus, I think is important, not just from a mindfulness perspective, but also from a productivity and efficiency perspective too.
[00:20:58] Tom: Yeah, no, I totally agree. Are there other spiritual practices or, meditation doesn't necessarily have to be a quote spiritual practice. It can be like lifting weights. Are there other spiritual practices that you have in your life?
[00:21:13] Ray: Yeah, absolutely. I'm a Christian. So every day I spend time with God, I read scripture daily.
I'm one of these - I know how the behavioral science works, but it still drives me anyway. The same is true for Peloton and working out and all these other things. But, I do track like how many days I journal in a row and, make sure I don't miss a day. And same thing on my morning devotion and Bible time, et cetera. So do that every day. That's, when I wake up, it's an immediate thing. And, throughout the day, obviously short little prayers here and there but just, also just trying to be mindful of being grateful, right?
In the end we're very fortunate to live in America and do what we do. And even being on this, having this conversation over a computer over the Internet, it's just, it's an amazing thing. And that's not reality for so many people. And yes very spiritual, very intentional about that. Work really hard to live out the values that we profess.
And in the process of, the natural ups and downs of a given day, just always remindful or being mindful of being grateful, if you will.
[00:22:27] Tom: One of the things I love about a religious, a spiritual slash religious practice is that it's beneficial whether God exists or not. The literal existence of God is irrelevant. My Dad said something to me recently that I loved. He said St. Augustine said, I believe so that I can understand. And atheists approach the question of God by when I understand, I will believe.
[00:23:02] Ray: It's interesting. To your point, the practice, I think, is beneficial regardless and, from someone from my point of view, I think you're tapping into some truths that God has created for us and you're benefiting from it, just like putting a seed in the ground, it's going to grow, whether you believe it, will or won't, it's still going to happen.
It's just what the natural laws that exist. And so I think this is much the same way.
[00:23:26] Tom: Yeah. So I want to, you've talked about journaling, you've talked about Peloton, you've talked about being a driven person. How do you balance that ambition and drive with self acceptance?
[00:23:50] Ray: Man, that's a deep question.
I would probably start by a few things there. It's a lot to unpack. My wife is a huge part of all of this, she's the one that has encouraged me to journal and I didn't start doing that till about four or five years ago. I'm not one that I guess historically understood emotion, if you will. Obviously the easy ones - angry, mad, sad, happy - but I didn't really appreciate that.
I didn't fully understand what was driving those emotions. So a lot of times those are instinctive, right? So if somebody cuts you off in traffic, most people get angry really quickly. Why?
We don't, we're also busy and distracted. I don't think we sit down enough to try to unpack that to say why does that make me so angry?
And the answer might be, Hey, I feel disrespected when somebody does something dangerous in front of me and they're not valuing my life or whatever, but understanding those things I'm learning is super important. I started this journaling process and to be frank with you in the beginning, it was just very … it was the journal I used ask you nine questions a day.
And, how was your day? What happened today? Whatever. And my answers in the beginning were very: fine, this happened. It was very matter of fact. But I was trying to lean into it, right?
After a few weeks I don't really know what happened, Tom, but I remember I was writing in the journal that night, and I put my pen down. I just thought, huh, I didn't know that was in there. For the first time I didn't think about it. I just reacted to the questions that were being asked and it made me start thinking a lot about mental health and luckily for me - this is pre-Covid, so not when the rest of the world woke up and realized they wanted to go into therapy too. But I said to my wife, you know this was interesting to me, I need help learning how to do this. Can you help me find a therapist?
And she has. That has been just remarkably helpful for me in understanding a lot about myself.
That seems like a tangent, but I'm coming back around to your question. Look, what I learned about myself in the process is most people are success or goal oriented. And it turns out that I, or at least up until recently, I've been primarily fear motivated and it seems nuanced to say, ‘Hey, here's the driver’, but it's actually really significant.
[00:26:15] Entrepreneurs, first time entrepreneurs, young entrepreneurs often reach out to me, want talk to me about my career journey and the path I took. And I'm not one of those people that grew up and knew I wanted to be a lawyer at eight years old. And, my whole life was oriented towards doing that.
I'm not. I admire those people. I somewhat envy those people. I think it's amazing to have that kind of focus and that kind of drive. For me, it has just been all about getting better, each step in the journey, learning, getting smarter, getting new experiences. Frankly, it's one door closes, another opens, and it's when kind of one progression to the next, it's not been designed in any masterful kind of way.
It's just been the natural progression of how things have played out. You got to take advantage of those opportunities when they present themselves. So it's not - it doesn't just happen. But yeah, it's, for me, it's understanding what drives you, understanding what you're trying to accomplish, understanding where you're trying to go, - big picture.
But I'm not one to get caught up in the details of first I have to do this, and then I have to do that to arrive at, the point or destination I'm angling for.
[00:27:25] Tom: Really interesting. So it makes me think about a lot of things. One of them is that the idea of self acceptance might be a mistake and that it isn't necessary, if you want to be present, it isn't necessary to have, quote, self acceptance.
Anyway, let me see if you have any reactions to that.
[00:27:49] Ray: Yeah, I, you did ask that a moment ago and I didn't address it. I would say for me, I'm a work in progress. When I went to that first therapy session and I met with the therapist, my wife and I selected, the first question I got was why are you here?
I know this was super generic, but I meant it so sincerely. My answer was I want to be the best version of myself and I don't know what that is. And so I want to learn about me. I want to learn what drives me. I want to learn how to better connect emotions with what drives those emotions.
In the end, you've got to be comfortable in your own skin. Cause frankly, what other choice do you have? Otherwise you're going to be spending your life chasing ghosts. By the way, most of those ghosts are made up social presences anyway. Going back to our earlier part of our conversation, pretty soon there'll be truly made up people. There won't even be real people. It'll be AI, made up…
[00:28:50] So I don't, I think it's important to know who you are, know what you want and be okay with that. It takes a lot of energy to wear a mask. There's a commercial for I forgot what the drug is, but there's a commercial out now where people are walking around wearing a … it's a stick with a mask figure on it and they're putting it out in front of their faces and If you just look at that, it's my God, that's a lot of work.
And you know what? I'd rather spend that energy being a better version of me than trying to convince you that I'm somebody I'm not. So I don't really think about it a lot, Tom. I just think about what investments do I need to make to be the best husband, the best dad, the best colleague, the best CEO, the best entrepreneur I could be.
Obviously all that guided by my meta narrative, which is as a religious person, I've got a perspective on that, that greatly informs that, but in the end, man, work in progress. And I'm just trying to be the best version of me.
[00:29:51] Tom: When you share that experience with young entrepreneurs, are they disappointed in that story?
[00:29:58] Ray: A little bit. It's interesting. One of the first things I tell people, and my CV kind of betrays this a little bit, is I'm actually really risk averse. And that always floors people because, the last dozen years of my career have been entrepreneurial. But, what I love about what I do is it lets me tap into the kind of creative side of, my natural gifting is I'm more of a strategist than anything else.
I like inventing things. I like being creative in the business. That's not from an art or marketing perspective. I'm not, that's a weakness, actually. They're usually surprised by that. And then they're usually surprised by the candor, right? I tell people it's, buckle up, right?
It's the highs are really high. The lows are really low. You've got to have a way of compartmentalizing that and just pushing forward with whatever it is, you're endeavoring to build. People don't talk about the journey enough. We see these media stories, we see these YouTube clips and it just sounds Hey, I had an idea.
[00:31:06] I wrote code in 40 seconds to build a website. I went and took a shower and oh my gosh, when I came back, I had 2 billion in orders. And so I decided to go public. That's the story you hear, and I'm not saying it doesn't play out that way for some people.
It does. It's exceedingly rare. The truth is, for most of us, it's a grind, and we have built many companies over the years. People ask all the time, does it get easier? Not really. You're smarter about what you're doing. You know what mistakes to avoid.
That's what experience provides you. It's still a grind, and it doesn't matter how small or big your company is and whether you do or don't raise money. You got to prepare for the journey and to me that, the advice I give people, it's about community. It's about mentorship. It's about having people that you can call when you have a really hard day.
[00:32:00] My first CEO gig was basically a turnaround job. I didn't know that when I got recruited. I wasn't recruited as a CEO. The CEO was replaced and they ended up putting me in that spot and I'll never forget, one of my first days with that quote/unquote title, I was driving to work Tom and I was giving myself a pep talk:
“There's nobody better qualified for this role at this company at this time in the world than me.”
And I promise you two hours later, I'm sitting at my desk going, Oh my God, if they knew all the things I don't know they'd run me out of the building. So imposter syndrome, right?
So I freaked out a little bit and I texted a friend and I said, Hey man, I'm, this is what I'm going through right now. Can we talk? And he said, yeah, come meet me for coffee. And, this guy at the time was running four and a half, $5 billion business unit of a very large, publicly traded company. And so I went to meet with him and it just floored me. He's oh yeah, I deal with that every day.
It's like no, wait a minute. No, you can do this. You were at first the CEO of, half a billion dollar company and then a billion dollar company and a 2 billion company. And it just blew me away. Despite all his success and here he is running a major part of a very large publicly traded company and he still has those doubts.
It just told me, hey man, we all deal with it. Buckle up, face it and just press forward. If you don't have that network of folks that you can just reach out to when you're having those moments, it's a really lonely journey. Don't do it alone, even if it's, even if you're a solo entrepreneur, it's just you're the only employee of the company, that's fine, but surround yourself.
I've heard a lot of people talk about a personal board of advisors. I've never thought of it quite that formally, but I understand the concept and I like it, which is to say surround yourself with people that can be sounding boards that are frankly willing to let you vent, that could provide good counsel, that are variants, et cetera.
It's not the on the shingle and, I got 40 billion in orders kind of thing for 99. 99 percent of us.
[00:34:13] Tom: There are - it's a little bit like being a parent. There's certain things that you really can't share with the kids, and it's irresponsible. And so if you as the leader of an organization are sharing every negative thought you have with other people in that organization, you're doing them and yourself a disservice.
[00:34:33] Ray: I love that comparison. That's actually really good. I've never thought of it that way. But yeah, look at the end of the day, part of your job as a leader is to help set a vision, help guide the organization in that direction, motivate people to move in that direction, create a structure where people can be successful, et cetera.
To your point, if you start sharing your fears and doubts with people, that will absolutely undermine the culture that you're trying to build and the confidence in what you're building.
[00:35:04] It's an interesting point because, yeah, you don't share everything with the kids. I was listening to a podcast recently with Ken Griffey Jr. as the guest and he was just talking about what it was like to grow up in his house. And he's got this dad who's a superstar. He didn't necessarily feel pressure to live up to that. But, you can imagine what it was like to be Ken Griffey's son. And, he just, what you just said is something he said around the notion of you're open, but you can't share everything in every relationship in that way.Probably outside your marriage, right?
Anything outside of that, you can't give all the information because there are other downside effects of that in business in that way. But I would say, you do want to be vulnerable, right? People really appreciate authenticity. And when there are legitimate fears, when you're in a recession and your business is being affected, you can't pretend like it's not because you're not credible at that point and you start losing people and confidence in that way as well.
So it's a balancing act, but like I said, it's the key is don't do it alone. I think that's the hardest way to go about it.
[00:36:13] Tom: I’m going to give a mundane example of applying that vulnerability. I have a friend who's a Google employee, and he was saying to me that, Google is asking people to come back to the office for a certain amount of time.
Their justification is everybody's justification of we think there's richer conversations, more collaboration, blah, blah, blah. His explanation to me was like, just treat us like adults. Tell us we have billions of dollars of real estate sitting around with nothing happening with it. Do us a solid and come back to the office a little bit.
That'd be a much easier message to digest and respect than what is a very debatable position about the improvement of creativity and collaboration when people are in the same space.
[00:37:11] Ray: You want me to react to that? I think yeah, sure. I think both can be true, right?
That is true. They have very large sunk costs in physical infrastructure to accommodate the size of their company. At the same time, I think it's true. There probably are some interesting hallway conversations that lead to productivity for the company. For me personally, if I were writing that note, I probably would have included both points in that narrative so that it does come across as authentic.
Because in the end look, we're talking Google here. I spent 10 years at Microsoft. The goal for companies of that size and given what they do is to hire the most talented, smartest people possible. You're not fooling anyone. Most likely 90 percent of the folks at Google drew the same conclusion that your friend did.
So you might as well just say it. Otherwise, it's the elephant in the room. But if they start out and just say, Hey, look we invested in this physical infrastructure years ago, and here's why. These collaborative spaces have created these moments that created these ideas or these business units or whatever, and we think it's the best and highest use of that space is still for our people to be there.
[00:38:23] Here's why we're asking people to come to the office and then I think from for me, this is all stylistic, but maybe it's not a 5 day a week mandate. Maybe you let the business units decide what's best for their business unit or the teams or the managers, et cetera. But if the bigger narrative is somewhere along what I just described, I think people might opt into that a little easier than, we need you to be here because we said so.
[00:38:46] Tom: Now, I like your point that both things can be true. I think that's, I'll say that about my own thinking, is that I'll tend to fall in that sort of binary idea. Back to our spiritual conversation for a moment. One of the ideas I'm trying to hold in my head is that God both does and does not exist.
If I can simultaneously be an atheist and a believer that feels to me personally is the best of both worlds.
[00:39:21] Ray: In scripture there's a verse that says help my own belief, right? It's a really interesting conversation because in one sense people want evidence, but at the same time, evidence doesn't require faith.
A little bit of chicken and egg and look like you probably no surprise, right? As a technologist and we're trained to think binary, right? So one or zero there, at least as far as computers go, but we get to quantum computing here. There it's one or zero. There's no in between.
That informs how you think about everything. There's this moment where you just got to choose. For me, I felt like there was enough evidence for me to get curious and take a real, a real leap of faith and start literally and figuratively. If it's helpful for me, what I ended up doing is I actually was very interested in how does this all fit together?
Cause I had a million questions. This will probably bore half the people to death, but I dove right into systematic theology. I wanted to understand, I needed a framework to understand it all, to help me stitch all the pieces together in a way that would make sense. Just because of the way I'm wired, that was a really good start for me.
I was able to dig in from there and learn a lot more. My faith became real, it became my own, and it's informed the rest of my life, the last 23 years since I came to faith as an adult, if you will.
[00:40:56] What is systematic theology? Yeah. It's, they're all, 800 to a thousand page books, but it's trying to just, yeah, no, it's that's why I said a lot, you'll lose a lot of people just there.
But if you can imagine a conversation that starts with this meta narrative which is like, what does it mean to be physical? What does it mean to be metaphysical? What are the attributes of that? It's literally starting there and just trying to work its way down to help you understand how it all fits together.
By the time you get to a truly deep dive in scripture, you understand how these moments that are recorded in scripture fit into this much larger construct. That is actually very logical. You could argue very - going back to our conversation very binary. It's a one. It's not a zero.
That structure, that framework helped me think about it in a way that really worked for me. It let me explore scripture in a different way. Those two things combined is really what led me to truly make the decision, if you will, and devote the rest of my life to, following Christ.
[00:42:01] Tom: I love that.
You mentioned quantum computing. I want to check my understanding - I'm sure you understand it better than I do. My understanding of quantum computing is that it's based on entanglement, the electrons at a distance, and so you can actually be both a 1 and a 0 simultaneously.
[00: 42:28] Ray: That's right. Not just a 1 or a 0, but it can be millions of 1s and 0s simultaneously, and it all will compute, at a super high rate of speed.
There's still a lot of technical hurdles around cost and heat and size and all the things that typically involve new technologies, not unlike the Apple headset, right? This thing just came out last week or was announced last week and everybody making fun of it. But it's, and, 10 years at Microsoft - it's hard for me to say this, but it's Apple, they're going to figure it out.
Now, whether the backstory is real, whether I think people will subscribe to wearing a headset is a whole ‘nother question, but do I think Apple will design it will version to look a lot better, be more efficient, have better battery life, et cetera, et cetera? A hundred percent.
We're moving in that direction with quantum computing as well. What's going to be really interesting ... Sorry, I'm geeking out for just a minute - is when you think about that kind of processing power. Imagine, going back to the beginning of our conversation, bringing these AI capabilities and quantum computing together.
That's where it's going to get really interesting and potentially really scary. So you started thinking about things like, 128 bit encryption. Part of the reason that works is because it's going to take, 3 trillion years for you to hack it. If everything can be a one and a zero at the same time...
So what do you do about state secrets? One of my original jobs in the military was around cryptography, the actual coding and decoding of messages over the wire in signaling that works because of frequency hopping and a whole bunch of other things.
But what happens when a machine can crack that in half a second? It's a whole new world that's coming. Not to get too far down the path, but when you put those two things together, the AI capabilities are emerging plus the raw compute speed and power that's coming. That's where things are going to get super interesting. I can't make a prediction for you there about what that looks like, other than I'm paying attention and I'm super curious about it.
[00:44:39] Tom: It is amazing. It is really interesting about what possibilities there are. I take solace in the idea that people have always faced this problem. They've always faced this, oh my God, the incredible pace of change. As a healthcare veteran, I'm sure you can remember 30 years ago when people were talking about the revolutionary, unprecedented pace of change in healthcare.
We're always whining about that in healthcare. This is always the worst year there's ever been. I've never had, I don't remember anybody in health care ever saying what a great easy going year it’s been.
[00:45:17] Ray: It's been interesting, but it's always in retrospect, right? We think fondly of years past and we think nervously about years forward.
To your point, it's interesting. The year that you're in feels like a tough year. Five years from now, you’ve forgotten all those lows and you only remember the highs. That period five years ago and you’re saying, man, I wish every year was like that - completely forgetting that we didn't think that in the moment.
[00:45:41] Tom: it was a grind at the time, as you were saying earlier.
I'm going to bring us home with a conversation about the paper ceiling.
You've spoken to me a little bit in the past about this, explain what that term is and what impact it's had on your life.
[00:45:57] Ray: Yeah great question. First I'll tell you, I didn't know that term until I think a year or two ago. I saw it during a commercial that someone was advertising -one of the online universities. But the paper ceiling is basically, you think about the glass ceiling, all these other kind of proverbial ceilings that we hear so much about. The paper ceiling is basically one that exists for people that don't have a college degree.
My path - went to the military at 17, fast start. As we talked about earlier, two startups, Microsoft 10 years, then entrepreneur. That path just never emerged for me.
But it's interesting along the way, I certainly have had people reach out to me about, opportunities to come work for their company, really flattering opportunities. It was an interesting experience to go through, where as you're getting through the process and somebody realizes you don't check one of the boxes, you no longer qualify for the opportunity they reached out to you about. It's not like you applied for a job and, asked for an opportunity. It's these are scenarios where people are bringing you things.
[00:47:02] It's easy to think - hey, look, if a senior leader is bringing you that kind of opportunity, they can just wave a wand and ignore the fact you don't have that degree. In this particular instance I'm talking about right now, this leader had that as a rule for the past 30 years. The exact quote that was said to me was, “how can I bring you in at this level without the degree when I've withheld promotions from deserving people on my own team that didn't meet that criteria?”
You could wave a wand and do what you want, but the last 30 years of their leadership, they had set a precedent of how things work and that stuck. It's the moment I realized that, hey, this is a real thing for people. There are going to be opportunities that get denied because of that.
You've got to be okay with that. I don't think there's a right or wrong path. It just wasn't my path. We all have our kind of gaps. We all have the check boxes that we never quite fully get to fill in. For me, that's one of them. I'm completely comfortable with that.
[00:48:07] I've had a lot of really good experiences over the last, 25 kind of professional working years, if you will. It is what it is. I'll lean on my experience all day long. And, that's not to discount the value of a degree. I wish I had one. I wish I had been in my path.
But life didn't play out that way for me. All you can do is move on and continue to create opportunities for yourself. My experience has been if you're good at what you do. People will forget that and that's been largely true for me.
[00:48:41] Tom: The reason I brought this up is I feel like it ties into a lot of the things that we've talked about already. One of them is faith. Another one is well, how do we know what we know? The third one is AI. I believe that when I hire, when I work with someone, there's always an act of faith.
Their resume, their past history, blah, blah, blah. It's always an act of faith. I don't know what's going to happen in the future to either of us. When I hire people, I'm hiring to do something that I hope they love and I know they're good at. How they go about doing that work to me is totally irrelevant.
It's up to them how they organize their work and what they do. Their formal education has absolutely nothing to do with what they're going to be doing with me. So that's the faith part. The AI part is well, wouldn't it be awesome? So this guy's explanation to you is essentially I've made a lot of dumb decisions in the past and to maintain that consistency I have to make another dumb decision now.
[00:49:50] Ray: 100 percent.
Tom: Yeah it's just crazy. AI can fix that by saying we can essentially build a model which analyzes what professional benefit comes from a degree and what's another route to determine that same benefit. So you're gonna have to quantify things like a degree, which is…
It's quantifiable but again, as you unwind that model, you're going to be like, really, you weighted that much English at Yale as being worth half of what computer science at Stanford is worth or whatever. There's going to have to be some logic behind that model, but it is possible. Then we can say, okay 10 years at Microsoft and, rapid promotion in the military is easily equal to a Stanford MBA.
That's very, a positive potential development, but in the meantime, real harm happens to people.
[00:50:53] Ray: A hundred percent. If you unpack it, my experience has been the degree is more valuable earlier in your career than it is later, because later you have so much experience that you can point to. So if you unpack it and say why do we do that as employers?
Why does the degree matter? It's just a signal to people that, you're teachable or you can learn, right? You have some level of motivation. There's an aspect of you that at least has the ability to complete something that's not just a 90 minute exercise, but in most cases, a four or six year journey.
As an employer, those attributes are desirable. Which is why I think we've used that as a screen or as a filter. But I think as a society we also have to understand that people can get those attributes or prove those attributes in other ways, not just that singular path.
It's interesting because with the cost of college getting so prohibitive for so many people, you're starting to see some reasonable, I'll say pushback, not just from students themselves, but also from employers to just say actually, we're just looking for the most talented or capable people.
You are seeing that soften, and I think that's encouraging because there's a whole lot of of social kind of implications that drive those outcomes, number one, but that get influenced by those decisions as well. I'm excited to see how that evolves and where we end up 10 years from now. Ultimately, it's really about are you capable of doing the job. What ways can I, as an interviewer, get confidence that you're the right person culturally fit-wise, et cetera, but also experiencing capability-wise to get it done.
[00: 52:34] I had a unique experience. I got hired on at Microsoft at 23 years old, no degree, all the things we've already talked about. That typically only happens to you when you're a developer, right? Because who cares? It's all about writing code. I could, in the interview process, I can have you write code and examine that and figure out if you're any good or not.
I was shocked. In my mind, I was the least qualified person interviewing for that job. One of the things they did at least for my session was, everybody showed up. They told us what time to be there, and then they put us all in the same room. We sat there for 30 or 40 minutes. It's just natural to start talking to the other people your quote unquote competing against.
“Hey, Tom tell me about you. Oh I'm, I do this and I do that.” I remember sitting there thinking there's no way I'm getting this job. So I might as well just completely relax and just be myself. I ended up getting that job. It was amazing for me and an amazing journey.
[00:53:37]But about two years later - Microsoft folks tend to move around quite a bit inside the company. So two years later, I have a different manager. I reached out to my hiring manager, who now has no reason to not be truthful with me. I asked him, I said, look, one of the guys that was in that room was at the time, the CIO of a pretty decent sized business. Like how in the world did you choose me over him? I really wanted to know, and Tom, to be frank, I also wanted to know as a, diverse individual was that a factor? You want to know -how'd you pick me?
Especially when, relative to all the other folks, I seemed so underqualified. And his answer was one that, shaped the way I thought about hiring when I became in a position in my career where I could make hiring decisions. He went up to the board and just drew a line and said, look, this is, you can just imagine a line that's just parallel to the ground, if you will.
He drew a line across the board and said, this is getting the job done. And so the first question is: can these people get the job done? But what he said to me next was, he drew another line and he said this is the ceiling, right? And he drew this line going upward and just said, look, those other people that are in the room, they have way more experience than you.
But, I had a sense for where their ceiling was because they had largely already achieved their potential. We were, because you do group interviews and stuff at least when I was there, we were really curious and intrigued by how high your ceiling was. And so the question was, could you do the job number one, and then number two, ow much more than that could you become inside the company?
He saw himself as a steward of the company and his point was, I owed it to the company to,pick you because one, we knew you could get it done, but two, who knew what that would end up turning into. That was, amazing response to hear.
I'm glad he was so truthful about his kind of philosophy behind it, and it shaped how I thought about hiring going forward. It ended up being a tremendous run. I ended up, not doing well there. I was in their hypo program for five years, which is, pretty rarefied air.
They invested heavily in my development. And look how that turned out. And The checkbox wasn't there for me. But it worked out great for me and frankly for the company as well. That's the way I think about it these days. It's less about, what criteria do you meet and more about can you get it done?How high is your ceiling? Are you a fit for the culture that we have within the company? And if those three are satisfied, you're probably my guy or gal.
[00:55:18] Tom: I love that. First of all, I think it's a fantastic way to think about hiring is that, can you get the job done and then what's your ceiling? What's sort of your maximum return to the organization? It also reminds me of a dilemma in fundraising. It's easier to raise money for a company with no revenue than to raise money for a company with a little bit of revenue.
[00:56:41] Ray: I've done both and I agree. Some of that is driven by the fact that people get really excited about ideas and potential. When the company starts generating revenue, then it's easy to start asking why not more? Why is the growth rate only X instead of Y? It's a behavioral science thing, which is - you asked what are the things I'm into - that's one of the things I've been learning a lot about the last few years is just how our brains work.
I don't have a good answer for you other than anecdotally telling you that's been my experience as well. My hardest fundraise was when we LBOed the company that was my first CEO gig. Here was a company with millions of dollars of revenue. The problem is we were too big for a traditional venture, but too small for traditional PE.
That didn't fit neatly in either box. It was a bit of a stretch. And so you're sitting here going, we've got all this revenue and, healthy margins and all this growth It was like pulling teeth to get funded.
[00:57:45] Ballpark, I think we talked to about 40 different institutional funders. We got two yeses and fortunately or unfortunately, I say that way because you learn a lot during the experience. Maybe that's the fortunate part, but ironically it was third meeting 39 and 40 essentially where we got yeses.
You learned a lot in the process, but it was really hard to do that. As a venture studio, we spin up concepts all the time and people write checks, as fast as you could imagine. Specifically in this area too, right?
Healthcare AI has been, and venture studio models are getting pretty hot right now, but over the last five years, that's just been consistently true. Here's the idea. Here's the TAM. Here's the team. Here's the division. Here's the proposed product. And yeses.
I do sometimes wonder, Tom, are those yeses coming now because the team has had multiple exits already? It's hard to, know that how much that influences that decision, but it has been my experience that, the concept is easier to get funded than it is actual running business.
[00:58:52] Tom: When someone is investing in a company that doesn't exist, they're investing in the people who are going to make that company. I absolutely believe that the fact that you've had multiple successful exits makes it much easier for people to believe that you know what you're talking about.
[00:59:09] Ray: Yeah no doubt it's a factor, but I don't know if it's the only one.
[00:59:15] Tom: it's been really fun having you here for a wide ranging conversation. There's lots of other things I want to ask, but I feel like I'm out of time. I'll have to have you back so we can talk a little bit about more about your journey and where you're going.
[00:59:32] Ray: I appreciate the opportunity and hope it's helpful to those that are out there listening.
So thank you.
[00:59:46] Tom: The Fortune’s Path podcast is a production of Fortune’s Path We help technology businesses create products that generate monopoly profits, provide fractional product management, product leadership coaching, and competitive intelligence. Find your genius with Fortune’s Path. Special thanks to Ray Guzman for being our guest.
Music and editing of the Fortune’s Path podcast are by my son, Ted Noser. Look for the Fortune’s Path book from Advantage Books on fortunespath. com. I'm Tom Noser. Thanks for listening, and I hope we meet along Fortune’s Path.