Notion’s lost years, its near collapse during Covid, staying small to move fast, the joy and suffering of building horizontal, more | Ivan Zhao (CEO and co-founder)

Episode Summary

Executive Summary: Ivan Zhao traces Notion’s decade-long path from failed developer tool to beloved productivity platform, emphasizing that the company succeeded by hiding a deeper “everyone can create software” vision inside a product people actually use daily. He frames building as a craft of balancing user value, business needs, abstraction, and aesthetics, while staying lean, resetting when needed, and using AI to expand Notion’s horizontal software advantages.

Main Topics: From failed developer tool to productivity platform (Priority: 5/5): Notion’s first years were spent building for a vision users didn’t share; the breakthrough came when the team translated its software-creation mission into productivity software people already wanted. Resetting, rebuilding, and surviving the lost years (Priority: 5/5): Ivan describes multiple rebuilds, including throwing away the codebase and restarting the company on a better technical foundation, plus personal and family support that kept the company alive. Product, business, and value must be balanced (Priority: 5/5): Ivan argues that great companies need users and revenue, but also the founder’s taste, values, and aesthetic—too much business becomes commodity, too much self-expression becomes art project. Craft, trade-offs, and abstraction as a company philosophy (Priority: 4/5): He repeatedly emphasizes craft, better abstractions, and making the right trade-offs over time, viewing products as systems that compound when built on the right primitives. Why Notion stayed lean and small (Priority: 4/5): Notion’s small team, broad individual skill sets, and reliance on systems over headcount helped the company remain efficient, aligned, and profitable. Horizontal software and bundling in the AI era (Priority: 5/5): Ivan explains why horizontal products are hard but powerful, how Notion uses notes/documents as a top-of-funnel wedge, and how AI strengthens bundling across data and workflows. Tools shape humans, and human potential shapes tools (Priority: 4/5): Ivan frames Notion as a philosophy about extending human creativity and intellect, citing the idea that tools both reflect and reshape the people who use them.

Key Arguments: The first version of Notion failed because most people do not care about creating software; they care about getting work done, so the company had to disguise its deeper vision inside productivity software. Founders should balance personal taste with market demand: too much of the founder makes a vanity project, too much business makes a commodity. Resetting a codebase or strategy can be rational because better abstractions can recover sunk cost quickly and unlock exponential progress. A small, high-talent team can outperform a larger one when the company relies on systems, shared context, and strong alignment. Horizontal products are hard because they must create their own category boundaries, but they can win through bundling and by capturing broad, repeated use cases like docs, notes, calendar, and email. AI is especially powerful for horizontal tools because it thrives on bundled context and connected information, making Notion’s integrated workspace even more valuable. Building a product is ultimately a craft: choose trade-offs deliberately, make something beautiful and useful, and keep improving it until it feels right. Tools are extensions of human capability and can in turn shape human behavior, so builders should think carefully about what kinds of human nature they amplify.

Data Points: Notion founding year: 2013 - Ivan refers to Notion starting over a decade ago and the early years as the “lost years.” Early product search time: About 2 years - He says it took roughly two years to realize the company should shift from developer tooling to productivity software. Total early rebuild period: About 3-4 years - Ivan describes the first three to four years as the “lost years” before product-market fit emerged. Programming contest placement: 2nd in Beijing - He won a programming competition to get into a good school in Beijing. Age moved to Canada: 16 years old - He learned English more through TV culture than formal grammar after moving late to Canada. Founding team size after layoff/reset: 2 people - During a rebuild phase, Notion laid off everyone except Ivan and co-founder Simon. Notion profitability: Profitable for a couple of years - The conversation notes that Notion has been profitable for a few years and much of the raised capital remains in the bank. Time to first salesperson: After $10M+ ARR - Ivan says Notion did not hire a salesperson until it had surpassed $10 million in annual recurring revenue. Time to first PM: Around 50 people - He says the company hired its first product manager when the team was roughly 50 people. Database infrastructure risk: One Postgres instance - During COVID, Notion ran on a single Postgres database instance and nearly ran out of space. Time left in infrastructure crisis: Weeks; less than 6 months, more than 3 - Ivan says the doomsday clock was measured in weeks, with the exact window roughly between three and six months. Survey respondents: 6,500 - The host cites a reader survey with 6,500 respondents about tools they use and love. Top usage categories: 2nd in project management, 4th in docs, 3rd in CRM - The survey showed Notion ranking highly across multiple categories, reflecting its horizontal usage. AI writer as first AI product: First phase - Ivan says Notion’s first AI product was an AI writer integrated into the workspace. AI Q&A/connectors as second AI product: Second phase - He describes an AI Q&A product that can answer questions using Notion and external connectors.

Pivotal Quotes: "We call it sugar, call it broccoli. People don't want to eat the broccoli, but people like sugar. So give them the sugar, the hydro broccoli inside of it." — Ivan Zhao: Explaining how Notion hid its software-creation vision inside productivity software people would actually adopt. "The key word here is craft... you have some taste, you have some values. You want the world to have more of that." — Ivan Zhao: Describing the balance between business goals and personal vision in product/company building. "We shape our tools, thereafter our tools shape us." — Ivan Zhao: Discussing the reciprocal relationship between software tools and human behavior, citing Marshall McLuhan.

Implications: For founders, Notion is a case study in patience, resets, and category design: build for a real use case, preserve your values, stay lean, and use new tech like AI to deepen horizontal advantages rather than chase novelty.