What's up, everyone? This is Cortland from ndhackers.com, and you're listening to the
Indie Hackers podcast. On this show, I talked to the founders of profitable internet businesses,
and I try to get a sense of what it's like to be in their shoes. How did they get to where they
are today? How did they make decisions at their companies? And what exactly makes their businesses
tick? And the goal, as always, is so that the rest of us can learn from the examples and go on to
build our own successful online businesses. Joining me in this episode are Cameron Yarbrough and Keegan
Walden, the founders of Torch. Torch helps leadership teams within companies become better
at their jobs through a combination of software and coaching. It's pretty fascinating stuff.
And I'm really excited to get into it. So Cameron Keegan, welcome to the Indie Hackers podcast.
Thank you for having us. Thanks so much.
Cameron, as CEO, you've had 15 years of experience as an entrepreneur, including creating and selling
an e-commerce business. Keegan, you're the COO of Torch, and you have a PhD in clinical psychology,
10 years of experience as a UX designer. And in the past, you've led a research team at a national
provider of behavioral health services. So you guys are really the perfect duo to start a company
that helps leadership teams grow and become better at their jobs. How did the two of you
meet and decide to work on this idea together? Keegan and I met in a master's program in
graduate school for counseling psychology. I actually remember the first time we met. We
met in the hallway in between class. He was this kind of towering man sitting above me,
but he had this very powerful yet warm presence. And so I was just immediately drawn to him.
I had no idea that 10 years later, we would be building a company together, but there was a
chemistry right off the bat. Following that moment, we took classes together, and then we ended up
in a practicum course together where we participated in a communications lab called T-Group,
which actually originated at MIT, was popularized at Stanford, and is a format for developing
communications and relationship skills for business leaders. And we participated in that
group together for a year and a half and got to know each other very well.
Yeah, 10 years between when you guys met and today when you're running Torch together as co-founders,
and you guys are providing services to companies like Reddit and Twitch. So to start with, let me
ask, how does Torch work exactly? And what happens when a company decides to sign up for
you guys services?
Yeah, okay, great. So when a company starts up with Torch, usually what we're doing is
committing to help a certain number of leaders at that company grow. And by virtue of the fact that
in the professional world today, you don't have many opportunities to get feedback on where you're
strong and where you're not so strong. The first thing that we want to do is give both the client
and their coach, who's provided by Torch, as much insight as possible into what their strengths are
as a leader and what the challenges are. So the first thing that happens is they go to a complete
360 review. So that looks at their leadership across 11 different domains. These are things
like empathy, mentoring, facilitating groups, being inspirational, and so forth. And for every person
who goes through it, they self assess their leadership. And then everyone that they work
closely with also assesses their leadership. So their peers, their direct reports, their manager.
And that generates a tremendous amount of feedback that helps them understand, okay,
I'm really empathic, but I'm actually not so strong in this other area or whatever the case
may be. And then the coach will sit down with them. When I sit down with them, it happens
virtually over Zoom. So they'll meet with them and try to tease out the basic themes that they
want to work on in terms of where they want to go as a leader, what they want to improve upon.
And then once those are identified, what we do is we create learning goals out of the basic goals
that people want to work on and get better at. And what a learning goal is, is it's one of the
domains that we look at in our system, or could be another domain that the client really wants
to look at or that their company really wants to look at. And by making it a learning goal,
what you do is you're nominating several colleagues that you work with to give you
ongoing feedback on your progress on that goal. So if I want to become more empathic,
I might say I want the help of two or three or four of my colleagues that will give me
ongoing feedback and regular feedback on the extent to which I'm starting to become more
empathic or not become more empathic. And either way, I'm getting feedback that helps
me grow and develop as a leader. And eventually, all the feedback and all the growth that comes
out of that feeds into another 366 or 12 months later. And all along, we're capturing data that's
really helping clients grow. So this is pretty involved stuff. I mean, you guys are helping
people become better at their jobs. Yes, but the qualities that you're helping people improve and
get better at are also qualities that will translate into their personal lives as well.
If I become more empathic, not only will I be a better leader, but I'll probably be a better
boyfriend, a better friend, a better, you know, colleague, all throughout my life.
It's sort of like yoga, Cortland. People come to yoga in the first place because they want their,
they want to have bodies that look better. But what you actually get as a result is a more
overall physical and emotional and psychological health as a result of the committed practice.
And we're doing something very similar with torch where the immediate value proposition
is increased business performance. But what people actually get is a greater self-awareness
and therefore more balanced mental health and wellbeing.
And we've had many clients comment on the fact that the challenges that they face
in their work life are really parallel to the challenges they face in their private lives,
whether it's, you know, being defensive or lacking confidence or having confidence,
but for whatever reason, not being able to like inspire or lead their team in the way they want to
or feel disconnected from a deeper source of meaning in their work, whatever the case may be.
There's almost always some overlap in the Venn diagram between personal and professional.
So people start companies for a lot of reasons. I think sometimes we see something broken or less
than ideal going on in the world and we want to fix it. Sometimes we just want to change
our own lives and become financially independent or spend our time doing what we love or not have
to work for a boss. What would you say motivates the two of you to be founders?
For me, it is an absolute prerequisite that whatever business that I'm creating is in alignment
with my personal values. Honestly, I wouldn't have created this company if it wasn't very similar
to what we're actually doing because I'm not interested in building a business just for the
sake of building a business. I'm interested in building a mission. And it just so happens that
it has a very strong, potentially successful business model attached to it.
So that's what motivates me. What motivates me is building a dual bottom line business,
one bottom line being to generate profits for shareholders, the other bottom line being to
generate a positive impact for humanity. For me, ever since I was much, much younger,
I've always been really excited and galvanized by working with people one-on-one to help them
move in whatever direction they're trying to go. So I did that as a psychotherapist to individuals,
to groups, to couples, as an executive coach. And if there's an animating force within me,
it's helping people achieve their potential. As a therapist and as a psychologist working
clinically with people in a one-on-one setting, while I really enjoyed that and while it was
tremendously meaningful, I always felt like I could be doing more. I wanted to have more impact.
I wanted to give this gift that I have to the world in a larger way. And no matter how many
clients I saw, I never felt like that was the best way to do that. I never felt like I was able to
have the impact that I wanted to have. I always felt like I could do more. And so when Cameron
and I started talking about how we could do this at scale in a technology business, I could see
immediately that that would be the opportunity to do so. And then the second factor is, it's
kind of paradoxical to think that this would be the case, but I had an absence of leaders in my
life growing up. I didn't meet my dad until I was 25. I didn't really have mentors when I was early
on in my career. I got some later on, but I didn't have much early on. And I had to do a lot of work
to kind of catch up. I had to do a lot of therapy, a lot of individual therapy, a lot of couples
therapy. This is me as a client now. I had to sort out a lot of issues and challenges and things that
I just didn't understand. And so having done that, I thought it prepared me to do this kind of work,
having walked that walk in my own life. And so Torres has just an opportunity to do that on a
larger scale, drawing upon everything I learned. Yeah, that makes so much sense. And I think
going through those types of issues and really being able to experience the solutions to them
by seeing a therapist and doing that work on yourself gives you an appreciation that a lot
of other people won't have for how impactful this can be and leads you to start a company like the
one that you have. I want to talk about the early days. You just mentioned that the two of you guys
got together and started talking about working on a company. What led to that conversation? What
did that conversation first look like? After I had my father passed away, back when I was running
my last company was this kind of trigger point in which it was extremely disruptive experience for
me losing my dad. And three months later, my daughter was born. And as I was grappling with
that major dilemma of a loss and a birth at the same time, it rattled me so much that it forced
me to do something very different with my life. So I quit the current company that I was running
at the time and decided to go off on my own to become a full-time executive coach, which was
really more deeply in alignment with all of my past, my professional, and my personal history.
So at that time, I reached back out to my buddy Keegan and I said, hey, I'm doing this really
cool thing now. And it seems to be working. There seems to be a lot of demand for it. And I think
you'd be really good at it. Are you interested? And Keegan said, hell, yes, I'm interested.
Tell me all about it. And the next thing I knew, we were sending clients back and forth
and collaborating as executive coaches. And we essentially built a consulting firm together.
Now, that consulting firm started to grow legs. And after some period of time, we said, hey,
there's really something. We've really got something here. Let's build software.
And in order to build software, you have to raise money because it's really hard to do.
And it's expensive. So that's really what led to the founding of Torch.
Right. And I think for me, there were a couple of experiences I had in my personal life that
really sharpened my focus and my resolve. So first thing was that my father passed away.
And he died in, I believe, April of 2017. And like I said earlier, I didn't meet him until I was 25.
And so I really only had, I had maybe a decade with him until his dementia started to get to
the point where, let's just say I had less of them than I would have liked. And so I was really
thankful for that time. But once he passed away, and I think people who have not experienced the
parents die, but then experienced the death of their first parents, there's a way that that just
hits you and helps you understand that you're not going to live forever. You are mortal. And
especially given that my dad died when he was 80 and I was 41 at the time, I'm thinking, okay,
there's a decent chance that I have maybe 40 more years in which to do something meaningful with my
life. And while I had done things that felt really good to me and that were meaningful earlier on,
it just sharpened my focus and my resolve and made me think like, okay, now is the time
I really need to get going doing what I'm going to do in the most major way that I can.
And then the second thing that happened right on the heels of my dad passing away is that I got
cancer. So I would just first practice this by saying I basically got the kind of cancer that
you most want to get of all cancers across every possible system of your body. So this was not
going to be a brush with death. However, and I got it treated and it was fine, but there is a way
in which being diagnosed with cancer is jarring. And like losing your first parents makes you
really think about what you're doing with your time and with your life. And I just came to the
conclusion that time is precious and life is precious. And I was coming out of a PhD program
and I was a few years out of a PhD program, looking to find something to do that would
be a broader impact, like I said, apart from having a private practice and doing the research
that I was doing. And so it all just kind of came together very quickly on the heels of those
experiences. So you guys are both dealing with these life changing and potentially
traumatic experiences at the same time that you're growing this consultancy and thinking about
writing software so you can scale it up and turn it into a bigger and more impactful business.
How did you guys strike this balance between wanting to do something that has a positive
impact on the world, but also coming up with a viable business model that could reach as many
people as possible? Were there any trade offs that you had to struggle with? Were there any lines
that you brushed up against that you refused to cross? Or was it pretty straightforward and
strategizing how to do this? For me, it actually made me more focused. Because there's something
about losing someone that you love, and then gaining a new person that you love within three
months that pushed me to this epiphany that I can spend absolutely no time on this planet,
doing something other than what is my absolute truest path. What am I here on this planet to do?
The question I asked myself is, what is the path that's going to allow me to have the greatest
possible impact on the people around me, on this planet, and on the business world? And that was
the creation of this company. And so for me, the low loss and the birth were actually
greatly were events that helped me really focus.
Yeah, I can imagine. And I think oftentimes there's this dichotomy between starting a company
that has a positive impact and starting a company that can grow and be as successful as possible,
as fast as possible. Have you guys struggled at all with making that trade off?
The trade offs come a little bit later. They didn't come in the first idea of how to structure
the company, how to set it up. But I think that the challenges come once you start to grapple with
the power of the technology you're creating. So we bend over backwards to create a product
that has integrity in terms of measuring in a valid way the different aspects of leadership
that we're looking at in terms of producing insights that are clear and coherent and sensible.
And also, in terms of like, charting the progress of the leaders that we work with in a way that
accurately reflects what's happening. Because we understand that if we get that wrong, or we do a
job of that, that's good, but not great, it can have real repercussions for people's lives.
And so we take that very seriously. And I wouldn't say it's a trade off quite in the way that you
framed it, Corwin, but I think it's a responsibility that just increases with the passage of time as
the product becomes more complex, and as we're working with more and more people. And we just,
you know, we can't think enough about it. Typically, the last thing I think about when I go to bed,
and the first thing I think about when I wake up.
Let's talk about this transition from being a consulting company where the two of you
were executive coaches for hire, to being more of a product company that can scale and reach
a lot more customers. A lot of people have run consultancies and want to figure out a way to
make their businesses more scalable, but have trouble doing it. What have you guys done to sort
of make this transition a success? And what were the first steps that you took?
Well, in order to scale any kind of consultancy, the first thing that you would think about is how
to build software that's going to automate systems and services, right? And so that's how
we approached it. We thought to ourselves, okay, what kind of software that could we build that's
going to amplify and empower the services that we're already rendering? And what kind of software
is going to enable this scalability of the software of the services that we're rendering?
So that was really what the transition looked like. A consultancy is generally made up of people
rendering service, right? And you have basic administration and operations that enables
that service. But it's generally not happening at scale unless your BCG or Bain or a company,
a large management consulting company, those companies require many decades to build.
But if you want to build a consultancy that scales really, really fast at the scale of a
venture-backed startup, you've got to build software. So that's what we did.
And in fact, the first thing we built was a piece of software that would automate the
recruiting funnel of coaches. So it determines the strength of the applicant based on their
ability to detect subtle emotions on human faces that are kind of ambiguous. It looks at their
cognitive ability from a few different lenses and measures of personality. It looks at their
past experience and looks at the strengths of their training in different ways. And so without
having to go through any interview at all, it already provides you with quite a bit of data
on what it perceives the strengths of each applicant to be. And so that makes interviewing
and onboarding coaches go much faster, right? And as we develop, we're building out different
pieces of software that automate different aspects of the business.
Looking at coaching now, it's kind of like a cottage industry made up of individual practitioners,
each of whom use either no tools or their own kind of 360 or their Myers-Briggs or whatever
kind of assessments they're using. And so part of how you scale is just to sell to the organization
that employs a lot of people. And then you can work with 100, or 200, or 500, or 1000 people at
a time instead of one at a time. But in order to do that, you've got to renovate that cottage
industry. And so what heads of HR don't want is to have to manage 30 different coaches, each of
whom are kind of doing different things all over the place, meeting at different cadences.
What they do want is to manage one vendor who's taking care of all of that for them, again,
as Cameron said, through the use of software. And that's essentially how our business works.
Yeah, it seems like software is this commonality between every part of your business where it's
what allows you guys to not only scale up, but also, I think make a more compelling pitch to these
heads of HR that you're selling to. Are either one of you software engineers? And how did you
guys go about getting sort of v1 of your application written?
Neither of us is an engineer, if you can believe that. However, in the first chapter of my career,
before I became a psychotherapist and a psychologist, I worked as a UX designer. And I
worked for big banks and small consultancies and nonprofits and had my own kind of shop.
And so I understood how to create a product, at least visually, that would be sensible and that
people could navigate through without getting terribly confused. And I worked with engineers
for years, I worked with engineers for 10 years every day. And so I knew how to manage them and
work with them in such a way that, you know, something coherent and useful would be built.
You know, would it have been nice if on some level I was a software engineer? Yeah, I think
I could have I could have contributed in a different way that might have been might have
sped things up a little bit. But I had enough facility with this kind of thing to know where
to start and how to build and who to hire and how to how to approach the overall process.
My response to that would be that I am an entrepreneur. And Keegan is a data scientist
and a UX designer by training. And really, what our company consists of, it consists of a business
side of the shop, and a technology side of the shop and a data side. Right. So really,
we had the first two we had the business experience, we had the data experience.
And now we needed the we had we needed the software experience. So what did we do? We
went out and we hired a CTO, we found we went and found the best CTO that we could find that also
shared our values. And we hired that person. What do things look like financially in these
early days? I mean, you guys, I'm sure are generating revenue through your consulting
and your executive coaching. But you also mentioned that in order to write software,
you felt that you needed to raise money. So how much of you guys funding your early business was
you guys raising money? And how much was it sort of reinvesting your profits back into the business?
When we first started, we were just reinvesting our consulting profits back into the business
to build MVP versions of the software. So using very sort of low tech solutions,
you know, like SurveyMonkey, basic HTML tools, we were able to build the MVP versions of what
we wanted to do. And once we did that, we then went and we pitched to angels. And that original
angel round, it was difficult to raise as raising money always is, but we had at least enough to
show these angels and we had enough credibility already in the industry that we're able to raise
a few hundred thousand dollars. And then from there, we applied to YC and YC Y Combinator
is really, really spectacular. When it comes to any incubating companies at an early stage,
helping them to kind of think about what their, what their first versions of the product are
going to be. YC is great at keeping people from making terrible mistakes early on. And they're
even better at helping them raise money. And the way they do that is by putting them on a stage in
front of the most powerful investors in the world to showcase their companies. And that's really how
we funded this company. You guys are one of many companies that I've talked to in the podcast,
you've gone through Y Combinator. And I also talked to many people who haven't gone through Y
Combinator, people who might have mixed feelings about it. One of the most common situations I
come across is people who've applied because they wanted the funding, they wanted the validation,
they wanted the mentorship, but they ended up getting rejected. And as a result,
they feel some sense of bitterness, or they feel discouraged about their own idea.
How do you think things would have turned out for you guys? If you'd never gotten into YC,
would you still be able to build the business that you have?
I think we probably could, but it would take longer. The YC ecosystem is great to be able
to sell into. And the network is just useful in a variety of ways. And it is kind of a badge of
legitimacy and credibility that is really helpful. But even without that, investors are essentially
interested in traction and growth. And if you can show that, and you went to YC, great. If you can
show that and you didn't go to YC, that's also great. I think it would have taken us longer,
but we eventually would have gotten there. There are also a lot of people listening in
who are staunchly against fundraising. They might understand the benefits that you can grow a lot
faster, that you have this extra network and financial support. But at the same time,
raising money really ratchets up the expectations of your businesses and raises the minimum bar
that you need to hit to be a success. Do you guys ever worry about this? And if so,
will there ever come a day where you decide to stop raising money?
I self-funded two of my last businesses. And so the benefit of that is maintaining 100% control.
And when you don't raise money, you have to optimize for profitability. And there's something
very, very powerful about that. There's something very sound about that. And so I got to enjoy 100%
control of the company. And I was pushed to maintain and create a profitable enterprise,
which was very helpful. But what I sacrificed was speed and scale. And so when I created this
business, I wanted to do something different. I wanted to see what it was like to build a company
that could grow really fast. And so I think that there's also one thing that needs to acknowledge
is that there's a window here. There's a window of opportunity. Coaching is not going to be
a field that's dominated by individual practitioners for very long. It just makes
too much sense to try to do something like what we're doing. And if we were to do that just out
of the profits we were able to generate from our consultancy, I think we would have missed that
window. We just wouldn't get there fast enough. It would take us a long time to generate enough
revenue to hire one engineer, then two, then three, then four. And in that time,
you're just not getting up to speed quickly enough. And someone else is going to come in
and do it. And so I think there are probably some businesses where it makes sense to not raise
those businesses. I imagine existence in themes between different industries that wouldn't attract
a lot of investment attention and wouldn't attract a lot of attention from founders. And you could
probably exist in there and kind of grow more slowly. But in any sort of field or industry
that there's clearly money to be made. If you don't rise pretty quickly during that window
of opportunity, you're just going to miss out. So that's pretty fascinating. I mean,
essentially what you're saying is that you guys are in somewhat of a winner-take-all market where
the first to move, the first to capture the market is going to have a tremendous advantage over
somebody who's moving more slowly, somebody who's a late entrant. Why do you think it's
the case that no one's really built a business like Torch before? Why hasn't someone applied
software to executive coaching to scale up to reach many more customers?
Well, actually, I don't know that it's a winner-take-all market. I'm not sure that that's true.
I actually, I suspect that there will be several companies that do well in this space. But in order
to be one of those companies, I think you still have to grow during this window of opportunity
that I was talking about. So I'm not sure that's true. The whole learning and development market is
over $100 billion in size. I don't think one company is going to come in and be doing
$30 billion, $40 billion, $50 billion, $80 billion of that a year in revenue. I think there are
just too many different pieces of that world that you'd have to capture. So I'm not sure that it
would quite work out that way. To also speak to your question,
Cortland, is why haven't other people done this? One thing is that scaling a services business
is actually really hard. What we're trying to do is we are trying to build a SaaS product and we're
trying to build a marketplace at the same time. That's a very complex and difficult problem
because at the core of our business are going to be hundreds and hundreds of coaches. So that's
very difficult to do. It's just the operational problem of scaling up a very large marketplace
of service providers. I think that's one reason why this industry has been slow to adapt in terms
of technology. But I also think that the other reason is because the executive coaches are
the types of people that are more focused on their craft and their science than they are in
building technology. So I think that was opportunity for us. I think that even though we're not
software engineers, we're technologically oriented people. So I think we were in a unique position
to see an opportunity. Let's talk about growing, Torch. I think it's fascinating what you said
about the fact that you're trying to scale up what's really a services business and it's not
just pure software. You actually have to bring on additional coaches if you want your business to
get bigger. What was growth like in the very early days? What's the story behind how you found
your first customer and what are some of the challenges you faced to start onboarding your
first customers? So in the early days, we were selling to our networks. So having worked in
executive coaching in the Valley for at a high level for some years, Cameron had a large roster
of clients who we could sell to and we did. And then eventually, we reached a point after
maybe six months or so where that had been exhausted and we really had to figure out
how are we going to sell to organizations at that enterprise beyond that. And that's when
you really start to tackle your go-to-market strategy in terms of what is the story that's
going to be compelling to the heads of HR, to the heads of learning and development,
the individual founders who are interested in growing their careers and their skills.
And we're obviously still in that, right? We haven't completely figured that out. But it is,
we're large enough now that we can think about that strategically and do A-B testing and test
different messages with different folks and let the data guide us and show us the most
effective way to do it. Do you remember exactly how much time passed between
when you guys first sat down to write the software that you're selling now and when you
got your first paying customer? Well, we had our first paying customer before we had any software
because we basically had a large group practice or a large consulting practice made up of high
level exec coaches who, again, all use their own tools. So we were already generating income from
that. And then we started to build software prior to YC. So maybe after a month or so,
and then from YC onward, we were really focused on the software and in parallel with that also
growing our coaching core so that we could match every incoming client with someone who
was a good fit in terms of their personality, in terms of what they were looking for in social.
Where a typical SaaS company will actually spend about 24 months on average before they actually
sell their product, meaning it takes about 24 months to develop a full fledged SaaS product
before they can go to market. We were able to go to market immediately with our service.
And then we just slowly incrementally built software around our service to amplify it and
accelerate the scale of the services. That's really how we built this company.
Yeah, that's so advantageous because then you can learn from the experiences that you're having with
these actual customers and have that sort of feedback into the decisions you make in terms
of what should actually go into your software, what will people find valuable, rather than
spending 24 months building something kind of blind and not knowing what people will actually pay for.
Exactly, which is not the YC way. So from the very inception of our thinking about software,
everything was run through customers, bounced off customers, came out of an interview with a customer,
whole features in our product came out of something someone said offhand and then we tested it or
evaluate it in some way. So one thing we just definitely did not want to do, one pitfall we
wanted to avoid and one of the main pitfalls that YC has found is don't build something in isolation
and assume it's good because you like it. That will always lead you astray. Everything should
essentially be pulled out of you by the customer. What are some other things that you learned from
YC or from early mentors, maybe your early experiences as an entrepreneur, that sort of
steer torch in the right direction early on? Well, you know, founders are optimists and YC
would argue and I agree that oftentimes to a delusional degree, they're optimists.
And so they do a really good job of deconstructing and breaking down the delusions that founders
tend to have because they're so excited about their idea and they're so excited about what
they're building. One of the key lessons that I remember is the difference between
YC's definition of product market fit and what you might think product market fit is
left to your own devices. And so YC's definition of product market fit is there's so much demand
for what you're creating that your company is breaking and it's just ceasing the function
because you just cannot keep up with the demand. And I think as founders, you can be lulled into
a false sense of security with regard to product market fit and think that you've established it
because you have some paying customers or someone told you that they want to buy your product or
you showed them a demo and they were excited. And it's just important to differentiate between
product market fit as a function of your desire for what you're doing to be born in a big way
and true product market fit, which is totally unmistakable.
A couple of things that I think I really got out of Y Combinator. One is I think that YC does an
incredibly good job of shattering any amount of hubris that might exist inside of the founders.
And they do that by presenting case examples of all these startups that have raised tremendous
amounts of money and have been failed. So they have incredible case examples of people who got
really proud of themselves because they raised a bunch of money from Sequoia or Andreessen or
this top tier VC or that top tier VC only to go out of business because they didn't listen to
their customers or they didn't manage their operating expenses. So that by itself, that
lesson by itself was worth the 7% that we gave to YC in my opinion.
I think there's a lot of lessons that can be extracted from you guys own story that might
be helpful to listeners who are trying to build their own businesses. So to start with, I want
to talk about having a co-founder. Having a co-founder can itself be a double edged sword.
Sometimes it results in a situation where the two of you add up to something greater than some of
your parts, just as often having a co-founder leads to fighting and disagreements that destroy
companies. You guys both have a background in psychology and mindfulness. You guys have known
each other for 10 years prior to starting this company. How has that played into your relationships
as co-founders? And what can other people do to sort of make sure they choose the right partner
to start a business with? Well, I think you want balance across your team of co-founders,
whether it's two or three or four, whatever the case may be. And in our example, I'm a skeptic.
I'm like a deeply skeptical person. My natural skepticism that I was born with was compounded
by six years at Northwestern getting a PhD. You get a PhD in psychology these days. Essentially,
you're being taught how to show that particular piece of research in front of you that you're
reading is flawed in some way. And so that's helpful. As a founder, I can look at the product
and say, I don't think this is going to work. That's not going to work. We should probably do
this and not that. But that deep sense of skepticism on its own is not a good recipe.
I would not make a good single founder. Cameron is an optimist and a visionary,
and he thinks about where the company could go if we did this or this or this.
Without me, I'd like to think the wheels might come off in a different way. But between the two
of us, we get optimism and broad-minded visionary thinking, and we also get prudence and restraint
and skepticism. And I think for anyone thinking about starting a company,
never mind the fact that it's going to be a stress that no single human should have to endure on
their own. You want a kind of symmetry in terms of how you reach wires, such that one plus the
other plus the third plus the fourth equals a pretty balanced human being that hits all the
notes that you need to hit in order to just endure the years you're going to spend working
on that company, let alone thrive. I think that there's a really
simple framework for this. I read this book called The Founder's Dilemma by Noam Wasserman.
He's a professor at Harvard Business School. And he did these longitudinal studies on startup
founders, and he eventually developed this very simple framework that I've really taken to.
And that framework says that successful co-founders typically have symmetrical values
and complementary skill sets. So I had this framework in mind when I started thinking about
who I would partner with in this venture. And I couldn't think of anyone who fit that framework
better than my friend Keegan. Keegan and I share the same values when it comes to politics,
when it comes to money, when it comes to spirituality, when it comes to the culture
that we want to create, and the way that we want to treat other people in the world.
And then by contrast, we have very complementary skill sets. Keegan is very analytical.
He's a very data-driven person. He's very scientific. I, on the other hand, am more
of a visionary thinker. I like to imagine possibility. And I'm optimistic, as Keegan said.
And so when you put these complementary skills together, you amplify or you broaden the reach
that you can achieve as two people as opposed to a singleton founder. So that's, I think,
the best argument for why to recruit a co-founder is because startup is really hard. And it's really
rare that one person has all the skill sets that you need to create a successful startup.
So by adding a partner who complements you, you can be in more places at once.
And I want to say also that even despite all that symmetry and all that complementarity that
Cameron and I both mentioned, we still have plenty of tensions we have to work on. In fact,
we go to co-founder therapy. And in that therapy, we talk about the ways in which we annoy each other.
There are things Cameron does that irritate me. There are things that I do, ways that I can be
dismissive or contemptuous that really bother him. And we have a regular forum to work through
those things so that they don't accumulate and accumulate and accumulate. Meanwhile,
we're not dealing with them. And we found as coaches that those kinds of tensions left
unaddressed can really erupt and tear companies apart. And we have a vocabulary having trained
together in psychotherapy school and then also being in co-founder therapy together to really
work on the tensions that arise before they become huge and enormous. So we're walking the walk in
that sense. And now we're also teaching the people that we work with how to do some of the same thing.
Do you guys think that co-founder therapy is something that all co-founders should go
through? Or should you wait until things sort of reach a potential breaking point or you start to
see warning signs? So the conventional wisdom is that couples come into therapy. I'm talking about
romantic couples about six years too late. And I've experienced this as a couple therapist in an
earlier chapter of my life where they come in and they're so at each other's throats and there's so
much hatred and so much resentment. And there's been infidelity, there's been domestic abuse,
there's been all kinds of problems. It's very hard to put that back together. It's possible,
but it's very difficult. And so I think the same logic around going to co-founder therapy early and
just learning how to argue in co-founder therapy, learning how to not be defensive in co-founder
therapy, learning how to own your mistakes and repair in co-founder therapy is really key.
And you want to do that as early as possible. It boggles my mind that people can run companies
without doing that ever at any point. It just makes no sense to me. Another thing I think you
guys are pretty knowledgeable about at this point is obviously helping people become better leaders.
You're working with companies, you're developing software, sort of coach these executives and help
them run their companies better. What are some lessons that you've learned from that,
that potentially early stage founders, maybe people running one or two person companies
can take away and become better running their own startups?
Okay, so what have we learned? I think primarily we've learned that you've got to have a growth
mindset. A concept of growth mindset coined by Carol Dweck, a Stanford psychologist,
essentially the belief that you can get better at just about anything with hard work, better
strategies, and importantly, ongoing feedback from others. And so in our work with people,
we come across clients that don't quite have a growth mindset, because they don't have a growth
mindset, they tend to lean heavily on the leadership skills that they think they're good at, or they
know they're good at, and ignore the things that they think they're really not good at.
And so much of our model and the coaching we do is helping them pivot away from the sense of,
well, I'm good at these things, so I'm just going to do all my leadership stuff using these skills.
And toward the, I'm not so good at these things, but I bet I can get better at them with some hard
work and better skill and increased feedback. And once they make that shift, from relying on what
they know to being willing to face what they don't know, that's when all the growth really opens up
and starts happening. And we see it person after person after person. That's what all of our coaches
do, each in their own way, enabled by our software, but essentially, it's at the heart of what we do.
Self-awareness is such a key part of what we're doing, such a key part of our mission. So I would
expand on that. It really, self-awareness at its core comes from mindfulness meditation. And it's
sort of made its way into Silicon Valley as this sort of very popular term, but it has its roots
in the possum meditation. And essentially what it means is our ability to pay attention to ourselves,
to pay attention to what is happening. And the mission of Torch is essentially that. It's to
know yourself so impeccably well that you become a better communicator, that you're able to be
less reactive, and therefore focus on the things that really matter. And so our software and our
coaches are our way of codifying that process. I think another thing that's really fascinating
about what you guys are doing and challenging in a way is that you mentioned becoming a better
communicator. You mentioned becoming more empathic. You mentioned the possum of meditation. A lot of
the benefits here are intangible and difficult to value. If I run a company and I hire a salesperson
and they bring in $200,000 in revenue for the year, then it's easy for me to calculate what they're
worth. If my servers are on fire and I can't serve my customers, then bringing somebody in to fix
them is kind of a no-brainer. But if I'm running a business that's going more or less okay, and you
guys show up telling me, hey, I can improve the quality of the leadership in your company,
that might be worth a whole lot, but it's also hard for me to tell exactly how much it's worth.
And I imagine that makes it a harder sell for you guys. Has this been a challenge for you at all?
And if so, how do you explain to customers who might not be aware of the value of what you're
selling? So let's just say that your company is doing really, really well. Everything is up to
the right. You're growing. You're adding users. The users are sticking. They're using the product
more. But let's just say you treat your colleagues badly. Let's just say you're in a little bit of
an aggressive jerk. So the company is doing well, but you're an aggressive jerk. You are going to
get that feedback from your colleagues. Your colleagues are going to be willing to find a way
to tell you that you need to work on your character. And so essentially what our company
does is it provides a medium for that kind of feedback. Now, let's say you are someone who's
not an aggressive jerk at all. You're actually a really, really, really nice person. You're so nice
that you have a hard time giving hard feedback to somebody else. And so your direct reports
are always struggling to find out how it is that they can do better. What Torch does is it provides
a medium for that feedback so that you get the feedback that tells you, hey, I really like my
manager, but I really wish she would give me more hard feedback from time to time so that I know how
to improve. So to answer your question, even when the company is already excelling, most people can
still become better leaders, right? So our company is built around developing an infrastructure to
make that possible. That's great. I don't think I'd add anything to that.
I'm curious about how your business model works. Are customers paying you guys a monthly fee for
coaching? Is it an upfront payment? Is it a contingent on results in any way?
So we sell the organization. And we might sell that organization to coach five people or 10
people or 100 people or 300 people or 500 people. But because we sell the organization, we can say,
look, give us this number of managers, we'll do an exploration period at the beginning,
where we'll really get to understand your culture and the challenges you face and the strength that
you have. And then we'll transmit all that knowledge we get in the exploration phase
to our coaches to give them extra context and extra framework to work within in terms of
understanding what the organization's mission is and what the organization's objectives are for the
coaches and for the coaching. And then each client gets to operate within that so that they can have
their goals and their aims and their objectives for what they want to develop in themselves.
And it all kind of fits together seamlessly. So the business model is sell larger engagements
to organizations, don't put any constraints on how long it should be, because we're very comfortable
with the quality of what we're offering. And we find that once a company starts working with us,
they typically will work with us for a long time, 12, 24 months or beyond. And we're finding it as
we go customer by customer. I've been thinking a lot in recent days about how beneficial it is to
run a business, kind of like yours, where your average revenue per customer is going to be pretty
high. I think lots of people, developers especially, want to start businesses with a charge customer,
something super low, like $5 or $10 per user per month. But I think if you do that, you're making
it really hard on yourself. Because not only do you suddenly have to find many thousands more
customers to work with to turn a profit, we also can't really afford to spend very much money
acquiring each customer or providing value to each customer because they're worth so little to you.
Whereas in your situation, each customer is probably worth so much that you can theoretically
spend a lot of money finding the perfect customers and put a lot of effort and resources into
providing beneficial services. Has that worked out that way for you guys?
It has actually. It does cost us quite a bit to acquire a customer. But once we acquire
that customer, we can pay we our period of payback is only about two and a half months.
So the beauty in that is we can spend money to buy a new user. But we pay that money back
really, really quickly. That's a huge advantage for a services business.
What are some of the ways you guys spend money to acquire new users?
We spend a lot of money on high quality content creation. One of the unique advantages of our
business is there's all kinds of very, very interesting content that you can create around
leadership. The content is so engaging that we're able to distribute the content to our influencers.
They're very happy to redistribute it because it's valuable content to put out in the world.
People read the content and they want to engage with it and they come to our landing page and
they will fill out a form. That's the basic way that we acquire our customers.
But that process of creating really high value, high quality content costs money.
So I'll let you guys get out of here with the final question. You guys have both spent a while
working on Torch or while as executive coaches. Cameron, you've had pretty long journey as an
entrepreneur. What do you think are some of the biggest lessons you've learned as founders
that brand new people, people who are considering starting companies,
people who just started their companies should take to heart?
Yeah. So I think having been an executive coach and seeing people go through pretty
much every phase of that, it was remarkable how much I was still surprised by the challenge of
the path of leadership now that I'm experiencing it firsthand. I should know better. I've worked
with people and seen just about every possible challenge that a leader can face. But if I was
to give a piece of advice to anyone thinking about starting a company, get ready. It's not
for the faint of heart. It's a new challenge every day. It's up, it's down. You really need
to have your life be... Well, things will go better to the extent that your life is stable and solid
and that you have the kind of awareness that you need in order to do this effectively.
And by that, I mean you really need to know what your challenges are as a leader. What is it that
you don't like to do? What is it that you think you are terrible at? How is it that your fears,
your anxiety, your depression, your thoughts about yourself, your whatever are likely to
show up once the pressure is really on and things are growing or not growing? Either way,
it's a different challenge and it's a different set of pressures.
And the more insight you can come into the founder experience with, the better you're
going to do, the better co-founder you'll be. And a coach can be really helpful in that regard,
a therapist can be really helpful in that regard. It's very difficult to learn all this on the fly.
What I'll say is that something that I've learned from this company is that your strength as a
co-founder pair is only as strong as your own ability to reflect on your own weaknesses,
your own vulnerabilities, and be okay with those things and talk about them with your co-founder.
To the extent that you try to hide them, to try to hide your weaknesses, to the extent that
you try to pretend that you've got it all taken care of, that relationship will suffer
or even fail. So what I'm learning from my work with Keegan is that in order for us to create a
successful co-founder relationship and therefore a successful company, we have to be willing to be
wrong. We have to be willing to admit our failures. We have to be willing to admit when we have
something to learn and how to ask for help. And those are the kinds of things that I do every
single day. And the fact is, is when you have not only a co-founder, but you have an entire
organization of people, whether it's 20 people or 50 people or a thousand people, your weaknesses
and vulnerability will be seen because you're on such a stage. So you should not take that position
if you aren't willing to look at yourself off on a daily basis. That's what I'll say to everyone
who's thinking about starting a company. I would just add that it's particularly important for
Cameron to admit that he's wrong because it happens so much and it's so rare that
you can tell from what he's saying that we've had a lot of co-founder therapy and that he's really
come to see some of his shortcomings and that's always good to see. Well, I'll leave you guys
on that note. Cameron, you can jump into the comments on the website to defend yourself.
Hey, the other note is you really need to have a sense of humor because you have to be willing
to take being teased from your co-founder and being made fun of. I think that's actually a
really important skill. So Keegan and I are really great at giving each other a hard time
and being playful. I would add that a great co-founder pairs have to be able to do that really
well. I can second that because I work on Indie Hackers with my twin brother and we've got
31 year history of bragging on each other.
All right, guys. Well, thank you so much for coming on the podcast, sharing your story,
sharing your tips. It was a really thoughtful and I think helpful episode. Thanks so much for
coming on the show, guys. Can you let listeners know where they can go online to learn more about
Torch and about what's going on in your personal lives if you guys share that kind of information
online as well? So if they want to learn more, they can go to our website, which is torch.io.
And in terms of our personal lives, when you're running a company, there isn't time from much
else. But whatever time we do have certainly goes to our kids and our wives. I've got two kids,
Cameron's got two kids. And they keep us grounded and every ounce of energy that I'm not running
Torch, I'm spending with them. And I want to give a special acknowledgement to my wife whose support
really makes all this possible to be completely impossible to do anything like this. But I didn't
have such a rock for a partner. And that's just beyond important.
I will add that it's really important that any founder has a really stable relationship with
their spouse. Because if you don't, when you create a startup, any amount of instability
that you have at home is only going to be exacerbated. So I feel very grateful to
balance relationship that I have with my wife as well. That's just the foundation of any successful
company is having successful relationships at home.
All right, thanks so much guys for coming on the show.
Thank you. Thank you. Thank you for having us.
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