How Block is becoming the most AI-native enterprise in the world | Dhanji R. Prasanna · Lenny's Podcast: Product | Career | Growth summary

Key takeaways

Block's internal AI agent, Goose, saves employees 8 to 10 hours weekly, especially benefitting non-technical teams.
Organizational structure matters greatly in fostering a technology-first culture; moving from a GM structure to a functional structure has proven beneficial.
Code quality does not always correlate with product success; focusing solely on perfect code can hinder a product's innovation and growth.
The future of engineering will likely see deeper collaboration with AI tools, with AI taking on more autonomous roles in task execution.
Fostering a culture of experimentation and open-source contributions is critical in this rapidly changing technological landscape.

Summary

Introduction and Background

In this episode, Lenny chats with Dhanji R. Prasanna, the CTO of Block (formerly Square), who has overseen the company’s transformation into one of the most AI-native enterprises globally. Dhanji shares insights from his journey, including his initial role in crafting an 'AI manifesto' for Jack Dorsey, which spurred significant company-wide changes.

Productivity Gains from AI Tools

Dhanji discusses how Block's internal open-source AI agent, 'Goose', is instrumental in saving employees 8 to 10 hours a week. He highlights that surprisingly, non-technical teams are reaping the most benefits from using AI tools, illustrating a shift in productivity dynamics within the company.

Organizational Changes and AI Adoption

The conversation delves into the boring yet critical organizational changes that have boosted productivity beyond the impact of AI tools. Dhanji emphasizes the importance of a functional structure over a General Manager (GM) approach in fostering a technology-first culture.

Lessons from Failure and Historical Context

Dhanji shares key lessons learned from his experiences building products like Google Wave and Google+. He emphasizes that code quality often does not correlate with a product's success and highlights the dangers of attempting to achieve perfection at the cost of progress.

Future of Engineering and AI in the Workplace

Looking forward, Dhanji predicts that as AI continues to evolve, the collaboration between AI tools and developers will deepen. He envisions a future where AI can autonomously complete tasks, significantly enhancing productivity and reshaping how engineers operate.

Concluding Thoughts

Dhanji encourages embracing technology change while ensuring that it aligns with human needs and corporate goals. He underlines the importance of demanding more from employers and fostering a culture of open-source contributions in the tech community.

Show notes

Dhanji R. Prasanna is the chief technology officer at Block (formerly Square), where he’s managed more than 4,000 engineers over the past two years. Under his leadership, Block has become one of the most AI-native large companies in the world. Before becoming CTO, Dhanji wrote an “AI manifesto” to CEO Jack Dorsey that sparked a company-wide transformation (and his promotion to CTO).

We discuss:

1. How Block’s internal open-source agent, called Goose, is saving employees 8 to 10 hours weekly

2. How the company measures AI productivity gains across technical and non-technical teams

3. Which teams are benefiting most from AI (it’s not engineering)

4. The boring organizational change that boosted productivity even more than AI tools

5. Why code quality has almost nothing to do with product success

6. How to drive AI adoption throughout an organization (hint: leadership needs to use the tools daily)

7. Lessons from building Google Wave, Google+, and other failed products

—

Brought to you by:

Sinch—Build messaging, email, and calling into your product: https://sinch.com/lenny

Figma Make—A prompt-to-code tool for making ideas real: https://www.figma.com/lenny/

Persona—A global leader in digital identity verification: https://withpersona.com/lenny

—

Where to find Dhanji R. Prasanna:

• LinkedIn: https://www.linkedin.com/in/dhanji/

—

Where to find Lenny:

• Newsletter: https://www.lennysnewsletter.com

• X: https://twitter.com/lennysan

• LinkedIn: https://www.linkedin.com/in/lennyrachitsky/

—

In this episode, we cover:

(00:00) Introduction to Dhanji

(05:26) The AI manifesto: convincing Jack Dorsey

(07:33) Transforming into a more AI-native company

(12:05) How engineering teams work differently today

(15:24) Goose: Block’s open-source AI agent

(20:18) Measuring AI productivity gains across teams

(21:38) What Goose is and how it works

(32:15) The future of AI in engineering and productivity

(37:42) The importance of human taste

(40:10) Building vs. buying software

(44:08) How AI is changing hiring and team structure

(53:45) The importance of using AI tools yourself before deploying them

(55:13) How Goose helped solve a personal problem with receipts

(58:01) What makes Goose unique

(59:57) What Dhanji wishes he knew before becoming CTO

(01:01:49) Counterintuitive lessons in product development

(01:04:56) Why controlled chaos can be good for engineering teams

(01:08:07) Core leadership lessons

(01:13:36) Failure corner

(01:15:50) Lightning round and final thoughts

—

Referenced:

• Jack Dorsey on X: https://x.com/jack

• Block: https://block.xyz/

• Square: https://squareup.com/

• Cash App: https://cash.app/

• What is Conway’s Law?: https://www.microsoft.com/en-us/microsoft-365-life-hacks/organization/what-is-conways-law#

• Goose: https://github.com/block/goose

• Gosling: https://github.com/block/goose-mobile

• Salesforce: https://www.salesforce.com/

• Snowflake: https://www.snowflake.com/

• Claude: https://claude.ai/

• Anthropic co-founder on quitting OpenAI, AGI predictions, $100M talent wars, 20% unemployment, and the nightmare scenarios keeping him up at night | Ben Mann: https://www.lennysnewsletter.com/p/anthropic-co-founder-benjamin-mann

• OpenAI: https://openai.com/

• OpenAI’s CPO on how AI changes must-have skills, moats, coding, startup playbooks, more | Kevin Weil (CPO at OpenAI, ex-Instagram, Twitter): https://www.lennysnewsletter.com/p/kevin-weil-open-ai

• Llama: https://www.llama.com/

• Cursor: https://cursor.com/

• The rise of Cursor: The $300M ARR AI tool that engineers can’t stop using | Michael Truell (co-founder and CEO): https://www.lennysnewsletter.com/p/the-rise-of-cursor-michael-truell

• Top Gun: https://www.imdb.com/title/tt0092099/

• Lenny’s vibe-coded Lovable app: https://gdoc-images-grab.lovable.app/

• Afterpay: https://github.com/afterpay

• Bitkey: https://bitkey.world/

• Proto: https://github.com/proto-at-block

• Brad Axen on LinkedIn: https://www.linkedin.com/in/bradleyaxen/

• Databricks: https://www.databricks.com/

• Carl Sagan’s quote: https://www.goodreads.com/quotes/32952-if-you-wish-to-make-an-apple-pie-from-scratch

• Google Wave: https://en.wikipedia.org/wiki/Google_Wave

• Google Video: https://en.wikipedia.org/wiki/Google_Video

• Secret: https://en.wikipedia.org/wiki/Secret_(app)

• Alien Earth on FX: https://www.fxnetworks.com/shows/alien-earth