What's up, everybody? This is Cortland from IndieHackers.com, and you're listening to
the IndieHackers podcast. On this show, I talk 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 both at their companies and
in their personal lives? And what makes their businesses tick? Today, I'm talking to Claire
Liu. Claire is the CEO of a business called Know Your Company, which helps business owners
get to know their employees better, overcome growing pains, and create a happier work environment.
She's also an adjunct professor and entrepreneurship at Northwestern University. And finally, she
runs an online community called the Watercooler, where over 500 business leaders talk candidly
about how to run a great workplace and be more effective leaders. So we've got a lot
of good stuff to talk about. There are a lot of questions submitted by IndieHackers on
the forum as well. So Claire, welcome to the show, and thanks for joining.
Thank you so much for having me in the first place, Cortland. I admire what you're doing
and honestly wish IndieHackers had been around when I was first starting things up. So thanks
for everything.
Well, thank you. That's so nice to hear. And I also think that Know Your Company is a very
cool business. And I've got a bunch of reasons why I think that. But first, I want to hear
your opinions, assuming that you agree with me that Know Your Company is a cool business.
What's your favorite thing about it?
Oh, man, it's like, I don't know, being asked to talk about like, you know, like, why do
you think you're cool? It's like, I don't know. It's an amazing business to run. I feel
insanely blessed and lucky every single day. I think the coolest part about it, for me
at least, is the impact that we get to have and to do it on our own terms. I think probably
for a lot of founders and aspiring founders listening to that, listening to this, that's
probably something that resonates. You get into this, you try to start something on your
own because you want to make something different. You want to make things move or be or act
in a different way. And you want to do it on your own terms. You have a vision for it.
You don't want other people pushing and pulling saying, ah, do this, go this way. So for me,
that's what I wake up every single day sort of inhaling and embracing with the business
that we run is we get to run it independently as a bootstrap company, really just guided
by the profits coming in from our customers. And the work that we do, it affects people
in one of the biggest aspects of their lives, which is going to work every day and the hours
that are spent there. So for me, that feels cool.
Yeah, that's amazing. I think one of the things that's very underrated about companies is
the fact that they really are as cliche as it sounds, a mechanism by which you can change
the world, or at least some small part of the world. And they're very effective at doing
so. So if you have a vision for something, it's much easier to do that through a company
a lot of times than it is to do otherwise. My list of things I think is cool about know
your company near the top of the list is that you have a very positive mission, where as
your company succeeds, people in the world become happier and the world becomes a better
place. And that's not something that every company can boast about.
Yeah, I guess. Now that you put it like that.
True.
Some of the other things on my list, and I want to know what you think about them, is
I think it's cool that you're a tiny, I guess you're a two person company. I think it's
awesome to see small companies reaching thousands of people. You sell to CEOs, which means that
you're constantly meeting interested and very talented and accomplished leaders. So I'm
sure you've got some interesting perspectives on that. You run a software as a service business,
and yet you don't charge a recurring fee. You charge everybody up front, which is very
unusual. And then even more unusual is that...
Yes, we're super weird.
You are. And even weirder is that you started out as a product at Basecamp, and then know
your company was spun out into its own standalone company. And I don't think I've talked to
anybody else whose business started that way.
Yeah, we're a weird animal in the jungle of technology companies, that is for sure. First
of all, you mentioned being then running a small team. People are always surprised when
they hear that we are, in fact, a two person company serving over 15,000 employees in over
25 different countries. And most folks, when they hear about us, they're like, what? Wait,
Claire, I thought you were a 25 or 30 person company, minimum. So to me, it's kind of cool
to surprise people in that way. But I think more than just sort of that almost selfish
satisfaction of being like, ah, hey, we're doing a lot for being so small, is there's
a ton of advantages that comes with being incredibly disciplined with how you're spending
your time and who you have doing the work and what you actually feel like you need to
get the work done.
I think early in my career, I sort of assumed that more work is done when you just have
more people. And that's very much true, I think, in a lot of ways. But what I've learned
in the process of your company and what I've really tried to take to heart is that it's
not about just doing all the work, it's about doing the right work. And the best way to
almost self correct for that is to actually just have less people. Because when you have
fewer people, you're almost forced to make sure what you're doing is the right stuff.
And we've said no and stop doing things. And just plain out, flat out, do not do a ton
of things that people have sort of been like, wait, really? You don't do this, you don't
do this, you don't do this. And it's all purposeful. And there are trade offs, of course. I'm not
saying that our path or just being indignant about not hiring is the right way to go by
any means.
But as a bootstrap company, understanding that profitability and cash is really truly
first and foremost, it's helped us, again, grow the business on our own terms. And to
just make sure that the work that we're doing is the kind of work we do want to be putting
out into the world.
There's so much fascinating stuff there. And I love what you said about making the right
decisions for your company. I think that's the main challenge of starting any company
is that there's an entire universe of an infinite number of decisions that you can make. And
finding the best ones and routinely doing that over and over, month after month, year
after year is very difficult to do. So I'd love to talk about how having a small headcount
helps you do that.
But first, just to give listeners some context. A few years back in 2016, you wrote about
how the two of you were able to generate over $700,000 in revenue with just a couple of
years. Can I ask where you're at now with Know Your Company and how things have gone
since then?
Yeah, absolutely. So yeah, we hit over a million in revenue in our first, I think two and a
half, a little less than that, years of the business with just two people and starting
at zero. So that was amazing. And yeah, growth has been accelerating steadily since we are
in our fourth year now of running the company still with two people full time and then working
with a handful of contractors as well. And you know that post you mentioned, Cortland,
I wrote it being honestly incredibly nervous about it, because again, we have a weird story
and most of the stories I think you do see celebrated or that do sort of pull back the
curtain around revenue numbers are about the thousand person companies with multimillion
dollars in revenue or millions or if not billions of dollars. And it's a little revealing to
be the kid in the playground who goes, oh, well, hey, we're super small, but we're doing
this and it's our take. So when I did write it and I did publish it and it got all the
attention that it did, it was hopefully to folks a small sign of, hey, you can do things
differently. You can think about your business in a different way. And there's not just one
path. So that was just my personal goal in writing that.
Yeah, I think that's really helpful. And a lot of people learn from it. And at the same
time, it can be pretty nerve wracking to put yourself out there and be transparent about
your revenue and your strategies and your thoughts and how you run your business, especially
if not that many other people are doing it at the same scale and level that you are.
For me, that's the goal is just to try to spread our story, just to say, hey, here's
just one way of many of how to go about thinking about building your business.
Let's talk a little bit about the history behind Know Your Company. I mentioned earlier
that at a very unusual start, it started off as a product at another company called Basecamp.
What's the story there?
Yes, definitely. So I will actually back up just a little bit and talk about, first of
all, how I even came up with wanting to solve this problem because it plays into how I ended
up meeting Basecamp and working with them and then them asking me to run the product.
So the first company that I actually started coming out of college was a company called
the Starter League. And at the time, it was the first beginner-focused software school
in Chicago that was in person. You would fly in and take the classes in our actual space.
And it was one of the first in the country. And this is, again, at a time six or seven
years ago before coding bootcamps and this whole learn to code movement. And so people
used to think that we were crazy, but it was something that we had personally felt this
problem. And actually, the only minority investors in the company were Basecamp.
So that's sort of my original connection to them. Funny enough, they actually invested
in the company though after I left as a founder. So I actually never met them, but that was
sort of the initial connection as they invested in us and after I left. But as time went off,
so I had left that company. I took some time off. I was 22, 23 at the time and honestly
just didn't really know what I wanted to do and wanted to take some time to reflect and
knew I wanted to start my own business someday, but just didn't know what. So I went to go
work at this early stage e-commerce company right outside Chicago. And when I was there
at Cortland, I absolutely hated it. I just hated my job and I was doing a little bit
of everything. It was a small six-person company. I did a bit of marketing, sales, operations,
strategy, et cetera, even design work. And I hated it though because I felt like I couldn't
give feedback. So I hated it because I felt like my CEO at the time did not know his company
very well. So this is when I first encountered the problem. And in school when I was in college,
I had studied actually learning and organizational change. So the study of how people work together
in groups, channels of communication. So I knew that this problem of feedback, at least
from an academic standpoint, had been studied extensively. So it blew my mind that as much
progress as we've made as a society and in our workplaces, that this fundamental problem
in communication, giving and receiving feedback, getting honest feedback was still very much
unsolved. So I started doing some research, realized, okay, no one's doing anything about
this. I think I want to. So quit my job, just outright quit my job, decided this was going
to be my life's work. And I had no idea what type of company I was going to build at the
time. I just knew that I wanted to solve this problem and yeah, just didn't care how long
it took. So embarked on this journey to do that. I had like 10 months of savings and
was like, all right, here I go. I'm going to just start this company, don't know what
it is, but I'm doing it. And what I originally first did was work to become an expert on
the problem as much as I could. So I devoured and read everything on the subject, any book,
any article, any study, you name it, I read it. And once I started doing that, I started
gaining my own hypotheses for how to actually solve this problem of creating a culture of
feedback within your team. And then I knew I needed to test it. So I actually went back
to the old company that I started and talked to my friend who's the CEO at the time. And
I said, Hey, this problem of feedback I want to solve. And I think I actually have a good
way to go about it. What do you think? And he goes, Claire, oh my God, this is my biggest
problem as a CEO right now. We have 20 people and I don't know my company. Will you come
do a consulting project for us and a case study and I'll pay you. And I said, well,
hey, don't pay me yet because I don't know what I'm doing, but I'll do the case study
and we'll see what happens. So I did this consulting case study for my friend and the
starter league and interviewed every single person in the company, had a whole methodology
for how you get honest feedback. And it worked. They got so much feedback. They'd never heard
before it made some incredibly influential changes in the company. A few people in the
company actually left because of it for good reasons. It was a healthy sort of departure.
And it truly improved not just their culture, but their company's performance overall. So
I thought, huh, this is interesting. You know, I didn't know I was going to be building a
consulting business, but maybe that's where I will start. So it was around that time that
I ended up getting introduced to Jason Fried, who is the CEO of Basecamp. And Basecamp also
happens to be based in Chicago, which is where I'm based. And Jason and I are meeting and
I'm telling him what I'm working on. Hey, there's this problem of feedback. I'm obsessed
with solving it. I think I'm on to something. I want to show you what I've been working
on. And he stops dead in his tracks and he goes, Claire, this is the biggest problem
I'm facing as a CEO right now. So at the time, Basecamp had grown to just over 40 employees
all over the world. And Jason admitted that he felt that he was losing touch. He didn't
know what people were thinking about the company. He wasn't sure if people were holding things
back and he wanted to help people feel heard. So he said, Claire, I've got two ideas. So
one, can we hire you to be a consultant for us and we'll be your first paying client?
And then two, we happen to be building a little software prototype to solve this. And I'd
love for you to take a look. And that prototype was Know Your Company. And funny enough, they
actually originally called it Honcho. So the Spanish word for boss and later decided it
was a terrible name. It is truly a terrible name. It would be weird for employees to be
using a piece of software called Boss, essentially. And it's just funny how when you first build
a prototype, you don't think about stuff like that until you start shipping it. But any
whom, he had me take a look at this piece of software. I gave him a lot of feedback
on it. We kept in touch. I did the consulting project for them. It was incredibly influential
for them as well. I'm really proud of the work that I did for them. And then later in
the year, and this is back in 2013, I decided, okay, I'm going to still try to sell my consulting
services. And then I actually started to build my own software on the side as well. And I
learned Rails and had built something and was showing Jason that too. And he was like,
oh, interesting. And they would make some tweaks to their product. But yeah, just was
kind of thinking, oh, I'm just going to do my own thing, right? And see where this goes.
And then what's tough is, and I'm sure a lot of folks can relate, is I'm trying to sell
my consulting services. I'm trying to sell my software product. I have maybe 15 people
who've all told me, yes, Claire, we want to buy it. Yes, Claire, we want to sign up. But
no contracts signed. And if you remember, I had told you that I had about 10 months
of savings, right? And I'd gotten paid by Basecamp as well. I was actually, I'd also
picked up a job as a hostess at a restaurant just to bring in some extra money on the side.
But it was wearing thin. We were definitely past the 10 month period, Cortland. And so
I'm like, oh my God, I think I'm going to run out of money. This is like, what am I
going to do? I asked my parents for money. Oh my God. I could never do that. What am
I going to do? Am I going to have to get a real job? And I'm sort of wringing my hands
trying to figure out the situation. And if the weeks go by and it was around that time,
it was October 2013 that I get an email from Jason saying, hey, would you want to catch
up? I want to hear how things are going. So we get together and he asked me how things
are going. And I'm like, yeah, they're good. It's hard. But yeah, I'm trying to sell. And
he's like, selling's the hardest thing. I feel you. And I was like, well, how are things
going for you? So what they had done is they had actually launched your company to the
public, even as a small prototype. And it had just taken off. So they'd gotten almost
100 customers in less than six months. Pretty nuts. And the product was working really well.
And he said, yeah, Claire is falling up so much. I actually had this really crazy idea
that I wanted to talk to you about because I don't know what to do with this product.
So he said, what if, and we've never done this before, but what if we spun out your
company to be its own separate software product, asked you to be the CEO and run the whole
thing. We'll split ownership in some fashion. And you don't part of it and we don't part
of it. But yeah, you'd be the CEO. So you'd grow the team, build it up from the ground
up. What do you think? And I'm sitting there and being like, oh my God, are you kidding
me? That's what's running through my head. Funniest part though, of all, is I totally
tried to play it cool in the conversation. So I was, so I think I said something like,
oh yeah, right. Inside I'm about to pee my pants, but to him, I think I said something
like, oh, that's really interesting. Yeah, that's what I said. I was like, that's really
interesting. I'd love to see the product and talk about it. So anywho, as everyone now
knows, so we ended up cutting a deal where we originally split ownership 50-50 with the
stipulation that when we would hit a million in cumulative revenue, that my ownership share
would go up to 75 and theirs would get bumped down to 25. And yep, they're on our board.
We don't have any other board members. And yeah, so we've been an independent company
with me running it as the CEO since 2014, January 2014. And that is the story. It was
a very long version. I don't know if I've actually shared that very, very long version
on any podcast today.
Oh, I appreciate you sharing it with us. It's a fascinating story. Given your situation
where you had been on this journey yourself for 10 months or more than 10 months and tried
to make your consulting business work, tried to make your product business work, how did
you feel about being entrusted with this responsibility? It feels like a lot to take on.
Oh, absolutely. I mean, the words imposter syndrome defined my first year as CEO of Know
Your Company. Absolutely. It was a pretty high profile transition for sure, just in
the sense that when it was announced, it was the first deal of this kind that Basecamp
had definitely ever undergone. And they have a really interesting, engaged fan base and
audience as I'm sure many who are listening are familiar with or even a part of. I mean,
I consider myself a fan of Basecamp as well.
I'm a fan as well.
I think a lot of people are. And so it was definitely this feeling of, oh, wow, there
was a lot of eyes on me trying to figure out what the situation is, trying to suss out
what's going to happen next. And so to be frank, I put a lot of that pressure though
on myself. So for as high profile as it might have been, the pressure, though, in terms
of expectation, that was all me. That was all self-imposed. And I only saw that clearly
at the end of that first year. So after that first year of running Know Your Company, and
I ran it by myself for the most part for the first eight months. So I had a part-time developer,
I had like a part-time biz dev person at the time, but I was the only person running it
or involved full-time for the first eight months. And like I mentioned, it had, by that
time, close to 200 customers. You know, you're talking about like the CEO of Airbnb and Medium
are customers. And I'm just thinking, you know, I just don't want to screw this up.
And yeah, I ended that first year thinking very much to myself, hmm, let's, you know,
let's take a look back. Let's sort of assess. And I noticed I was so tired. I was exhausted.
And I realized not only was I exhausted, but that, yeah, I'd, you know, done a lot and
we'd made improvements to the product. And I was really happy about how our customers
felt about both the transition and where the product was going. But I realized that I probably
could have gotten the same exact amount of work done and not been as tired. And that
it was almost out of this insecurity of feeling that I wasn't good enough or feeling that
I was going to let someone down that created this almost manic state of busyness and of
work that was just completely unnecessary. And so after that first year, I sort of did
a big turn in how I thought about putting and investing my time and abilities to work
a ton smarter. And I think a lot of entrepreneurs reached that tipping point or gained that
realization after they've gone through a period of madness like that, self-imposed madness.
But I think to anyone who's listening, I think for those of you who feel or have experienced
imposter syndrome, who feel as though you have a lot of eyes on you or feel you don't want
to let people down, most of the time, literally nine times out of 10, it's yourself talking.
And it's your own fears and doubts that are being projected. It's no one else's. And the
minute that you can see that you are actually the cause of your own suffering, then that's
actually when you can kind of let it go. So that's definitely what that first year taught
me. Hard lesson learned.
What were some of the first decisions that you made after all the paperwork was signed,
after the deal was done, and it's now you clearly in charge of know your company?
Definitely. So the first thing that I wanted to truly understand is, one, does this product
even work? And two, how's it working for people? So I sent out personal emails to every single
CEO at the time and said, if you have 10 minutes, I'd love to get on the phone with you. So
that first month of January, I probably had anywhere between 60 to 80 phone calls with
CEOs from all over the world and talking from 30 minutes to an hour and a half to truly
understand what were their biggest struggles? Where was the product really nailing it for
them and where was it missing the mark? And from that, informed what our product direction
was going to be informed, what we needed to do from a marketing standpoint to also attract
the kinds of CEOs after having those discussions that I wanted to continue working with and
continue helping. So that was definitely one of the first things that I wanted to do is
to be incredibly immersed in what that experience was like to actually use the product.
The second thing is I wanted to also live the experience of selling the product firsthand.
So what a lot of people may or may not remember actually is that the way Know Your Company
was originally first sold was, first of all, we just had a letter as our website. Some
of you may remember this. We just had a letter on our website. You could not actually see
the product on our website, so there were no screenshots. There was no video. And the
only way that you could even think about trying the product or buying it was you had to schedule
a 30-minute WebEx demo with me. Before that, it was with Jason. And I could have changed
it right out of the gate, but decided that I should go through that process as grueling
as it is for those of you who've done live demos with prospects, go through that process
to again internalize what is the true pain that people are seeking or feeling? What's
the anecdote that they're seeking? And I think when you learn to sell something, there's
no better way in terms of influencing your product and influencing then your company
direction. So after I did that, I learned so much. I learned that a huge reason for
why people ended up buying the product is because of the trust that is built through
those conversations. And so when we ended up then moving and transitioning the product
to self-service and self-signup, thinking about how do you capture trust? How do you
maximize for trust in the onboarding process rather than efficiency with something that
I was able to put into practice? So I did over the course of almost two years, about
a year and a half, more than 500 demos with CEOs from all over the world, if you can imagine,
which again sounds crazy. Exactly. It does sound crazy. But because of that, what's cool
is and we get this feedback all the time is if you go to our website today and you read
our copy and you look at our features and whatever it is, and even the things that we
write, people tell us all the time, Claire, you're so dead on. How you're describing the
problem of growing pains is exactly what I'm feeling. That's exactly what I'm going through.
And the reason is because we've truly soaked that up and tried to get into the crevices
as much as possible for what that pain is. And so I guess for me, it's just that commitment
to what's that impact that we want to have as a company? For me, it's I want that impact
to be deep. I know the people I want to help are those small business owners feeling those
growing pains. And so we have to walk the walk. We have to get in there and understand
in and out how that feels and what people are facing if we're going to have any chance
of being able to solve that well. And so for us, it provided this, yeah, in my opinion,
this incredible leg up to developing features as well. So another thing that people always
say when they use our product is that it's not bloated. It's not too much. It's not this
sort of array of this and that and oh, this is trendy and oh, people are really into social
graphs right now. So we're just going to throw that in. It's not the sort of melting pot
of what's hot. It's truly a progression of features and needs that are built upon each
other based off of what a CEO and what employees are experiencing day to day.
You don't have any AI chatbots in your company? Not yet. Never say never though, Cortland.
Never say never. I think it's great to hear how much you talked to your customers and
tried to really get to understand them. And I think this is something that's... It's advice
that's commonly given to founders, but it's so easy to ignore because number one, it's
hard. It's grueling to try to actually find customers and to have these conversations
with them. And number two, I think for a lot of people, it's not obvious what the payoff
is. It doesn't seem to be an immediate payoff. Whereas on the other hand, there's so many
bugs to fix and features to build and just obviously urgent problems. And so it's easier
just to focus on those. But I think your story really illustrates how having these conversations
can pay dividends. It ends up affecting the way that you write your marketing company,
a way that you design your product, the way that you go about sales, and it makes you
more effective at pretty much everything in your company. It helps you make out of that
giant universe of decisions that I talked about earlier. It helps you find the right
decisions.
And I think it's so interesting that you mentioned how talking to your customers, it's such conventional
wisdom when it comes to starting your own business and it comes to entrepreneurship.
I'm sure that's on millions of posters across startup offices. Talk to your customers. However,
the way I see it is it's asking yourself this question as a founder and as a business owner,
do you want to know the truth? That's it for me. It's do you want to know the truth? Do
you want to know whether or not people are going to pay for what you are selling, which
is essentially what business is. Well, people pay. And the only way you find that out is
by talking to people. The only way you find that out is by selling something. So we do
stuff all the time when we have a small experiment that we want to run where we just try to charge
people for it.
We just say, hey, we're launching this. And by launching, it's literally just an email
that we write to either current customers. It's a blog post that I write and then we
charge for it. And a perfect example of that is we recently launched a new online community
this past fall called The Water Cooler. And it took us maybe less than a month to build.
And it wasn't a huge project for us, but it was this idea and this hunch that there's
no community for leaders who are looking for a lightweight way to learn from each other
and to feel that support without having to either go to an in-person conference or pay
thousands of dollars for a leadership community and something that's also more helpful and
immersive than a book.
And the way we thought about it is we have this idea. We have this hunch we could hypothesize
and think about it or try to project how we're going to build this into know your company
six months from now or we could just kind of build it and launch it and charge for it and
see what happens. And it surprised us even actually with how successful it's been and
how much value people are getting from it. But I think that, first of all, that insight
of people even needing that community, needing that support, that all actually came from
customer conversations. That came from the hundreds if not thousands of conversations
I've had with CEOs saying, Claire, what are you reading right now? What CEO groups are
you a part of? What mentors do you have? I don't have a community of leaders I can learn
from. And that just getting repeated over and over. So it pays. And again, it's for
I think, again, founders and us as business owners and entrepreneurs, this bias of wanting
something to be true versus seeking out what is actually true, we have to overcome that.
And it's tough because I think in a lot of ways, being a founder requires some degree
of almost delusional positivity. And so you might actually think that you're seeking the
truth in reality, you're just seeking confirmation for whatever it is that you already believe.
Absolutely. I think on that note, Cortland, so I run this also interview series where
I interview leaders who I respect and admire. And actually, just this morning, I had on
the show, it's called The Heartbeat, I had on the show, David Kansol, who is the CEO
of Drift. It's a sales conversation platform. And it was so interesting, because in that
conversation, what I realized is that a lot of times, as founders and as entrepreneurs,
we gravitate towards the things that we can control. So we like fixing bugs, we like tweaking
the UI of a design, because we can control that we can build the features, we can mock
up a page. But we don't like talking to customers, because who knows what the customer is going
to say, that's so out of our control. So out of control. We don't like thinking or analyzing
the market, because oh my gosh, who knows what that's going to say and tell us that's
so outside of our control. So I think for us as founders, it's important to reflect,
and I struggle with this every day, of remembering that what our natural tendency is, is to move
towards the things that we think we can control, and to turn our backs towards the things that
we feel are out of our control. So I think, yeah, it was something, especially in my conversation
this morning with David, that yeah, that I remembered.
So I took some questions from people on the Andy Hackers forum for you, Claire. And Dina
from Andy Hackers asks, what was the most difficult challenge that you faced? And what
do you wish you knew then that you know now?
Yes. So that's always such a good perennial question to ask. I think for me as an entrepreneur
and as a founder, as what I see as my biggest failure, which by the way, I always feel like
failures are such a loaded word. I don't even know if I believe in them. I almost see them
as just very, very expensive lessons in some ways. But in terms of that, when I left the
Starter League, so when I built my first company, that process for me watching myself over time,
really not feel my heart in it as much as it should have been, watching myself notice
that I really wasn't doing it for the right reasons. I was doing it more out of obligation
to build something cool with my friends. It wasn't really about the impact that we were
making. And that showed in my work. And so as a result, when I left the company, I ended
up feeling very dejected and lost and this feeling of, what do I even want to do? Who
am I, right? That kind of existential crisis, that was then for me. And so I considered
that in many ways, quote unquote, my greatest failure for leaving this company. But again,
partly a failure so much as it's also one of the best things, if not the best thing
that's happened to me in my short life of being awakened to the fact that I wasn't a
part of that company because I wanted to be in it. I was a part of it because I felt like
I should be, or because I felt like my friends wanted me to. And that distinction of what
others want of you versus what you truly want is so, so important. And as a result, in how
I've chosen to build New Year Company and run New Year Company, that's remained so clear
and so true that it's doing it for the right reasons and for personal intrinsic motivation
versus external motivations and pressures. So that was definitely one of the quote unquote
failures or expensive lessons I learned. And then the other one was while running New Year
Company and when was this, I want to say this was the last year I fired someone and that's
always sucks firing anyone. It doesn't matter if you are a three person or two person company
or a 300 person company or 3000 person company. Anytime you have to let someone go really,
really sucks. And we had hired a head of business development last year who was just a light
of a person and showed a ton of promise and energy and there was no lack of effort and
hard work by any means. But as time went on, it just proved that the numbers weren't there.
And when it comes to sales, that's kind of, especially it's very black and white in terms
of whether or not something is working or not if the numbers aren't there. And unfortunately,
it took me a little bit longer than I would have liked to have seen that clearly for what
it is. And it's highly ironic too, because I write about this all the time, write about
firing and letting people go and how to do it well or how to make sure that you know
when the right time is because there never really is a good time to do it. But that was
such an important lesson for me to remind myself to again, seek the truth, see things
for what they are instead of for what you want them to be, and to just relentlessly
pursue that. And as hard as that is on a personal level to have to look someone in the eye and
tell them, hey, today's going to be your last day. And it's not the first time I've had
to do that. I've fired other people before in the past, but this one was particularly
tough because I knew in many ways I could have either done it earlier or done some things
to help avoid the situation from being what it was in the first place. So again, just
a really expensive lesson, but so grateful for that because now, I even to an even greater
extent am ruthless about trying to pursue seeing that clearly in all aspects of the
business.
So you mentioned growth being sort of a black and white thing and sales being very clear
to cut. Let's talk about sales for a second. Let's talk about growth. How did you get your
first customers after you sort of finished interviewing some of the founders your first
year know your company and got sort of a hold on what people found valuable? And how has
doing sales and growing the company changed since back then?
Whoo, yes, it's changed a ton, but also not in some ways as well. So in terms of getting
my first customers, I remember I knew that we were incredible, incredibly lucky as an
early stage business to have the exposure that we did. So we got, I mean, hundreds of
inbound leads every single week without having to do, you know, I could have not done a single
thing in terms of writing or running ads, etc. And they would have just come in just
because of the exposure in terms of our connection to base camp. So I knew that was really rare,
but I knew that it would die.
I bet that felt way different than you running your business before you took over your company.
Exactly. However, my first customers, yes, we definitely got customers, you know, through
that. And I think the first customer that I closed, you know, did come through that
channel. But what I also did and spent a lot of time on was really cultivating my personal
network, which isn't, you know, that's not news to anyone's sort of business 101 stuff.
But what I realized, especially in the business that we're in is that, again, trust is everything.
And if I'm selling a piece of software that is all about speaking to your employees and
asking them hard questions, you better trust that we're going to ask good questions, that
we're not going to annoy your employees, that we're not going to make you look stupid. And
there's a lot of products that kind of do that, right? Where you turn them on for your
team and you're like, Whoa, okay, we are not using this anymore. Or your team complains
overkill. You know, for some companies, at least CEOs we work with, they're like, Oh,
my gosh, it happens every week, we try a new tool, and we hate it and whatever, right?
And there's so much fatigue around using tools in the workplace. So this element of trust
is huge. So considering that I reached out to CEOs who I knew and who I had that relationship
with to say, Hey, this is something new that I'm running now and come take a look. And
there were so many sales that definitely came from that. So that's on a very, very micro
scale, right? So those are kind of that's like step sort of one, step two, and this
is what I ended up investing most of our marketing and sales efforts into during the first, I
would say two years of the businesses, which is I chose to do a lot of public speaking.
And this is for a few reasons. One, being very much a new player on the scene, I knew
that we needed to establish our credibility and to show folks that we have a viewpoint
that is different that we can offer. And so what better way to do that than to be captured
on stage, right, seen as an authority figure, but also to later have those videos to share
with clients, etc. So that was one to establish a sense of authority. Two, I knew that we
could pinpoint conferences where we knew CEOs were going to be at and also in our target
market. And so whether that's, you know, I speak regularly at a series of CEO only conferences,
whether that's tech conferences that I know are geared towards CEOs. So that was a second
thing. The third thing that I saw about speaking and again, just being new coming onto the
scene is that I knew it would be a great way to test our marketing concepts and messages.
So for example, should we be talking about how hard it is to give feedback or should
we be talking about the best questions to ask in a one on one? And particularly what
are the threads or even the lines that resonate with people when I'm speaking on these topics?
Because what you'll notice, and this is a cool thing about speaking versus writing a
blog post is when you speak about something, you know, when it hits, you know, when people
laugh or when people are surprised or people start writing notes and you go, Oh, huh. So
I can't even tell you, Cortland, I have written maybe hundreds of blog posts just based off
small threads of things I've said in my talks that I know have landed with people. And some
do better than others in terms of reception, but I've always found that as a speaking as
a fat as a such a almost a fertile ground for trying to decide what your marketing messages
should be without having to write a blog post and, you know, put ads behind it or whatever,
you know, your processes in terms of that sense. The other thing about speaking and
why I chose it is because it's different. So everyone writes these days, right? Everyone's
got a blog. And in a world where you've got so many articles where it's like 13 ways to
do this, the top five ways to do that, right? How do you stand out through all that noise?
So I thought speaking would be a great way to do that. So in the beginning, that's what
we invested in. And it worked. We got a ton of clients because of those conferences, they
would tell their friends, they would tell other CEOs. So it was a great way to build
those relationships. And again, because I'm there in person, they get to meet me and there's
this trust aspect again, in terms of making that sale. What's interesting is then after
that first year and a half, two years, we decided to switch. So we noticed that, okay,
we've learned as much as we can doing the very manual sales process. We've learned a
ton doing all the speaking and we've tested a ton of marketing messages. We've built a
really solid foundation of expertise and understand what can build this relationship and trust
with potential customers. So now it's a matter of scale. So we switched our sales process
to be self signup. So now as you know, as very much as today, you can go to knowyourcompany.com,
sign up for a free trial, use it for two weeks and then obviously purchase it yourself. You
can obviously see the product on the site. So we did that. And then in terms of our marketing,
we also chose to scale it as well. So I do now, a majority of my time is spent writing.
I still do some speaking, but most of it is writing. And it's been really neat to see
how our organic traffic has increased over the years. And even actually most recently,
we've even gotten a really big boost. I think we've tripled it since December, which is
pretty crazy. So we saw like a, we saw a big boost. I think last year we doubled it. And
then just since December, we've just seen it really, really increase as well. So that's
been neat to see. And part of that strategy of making that switch, someone who really influenced
me in and thinking that through was David and Myer Hansen, who many of you know, is DHH. He's
co-founder of Basecamp. He's also the inventor of Ruby on Rails. And as the co-founder of Basecamp,
he sits on our board. And I remember about two and a half years ago, he made this really
interesting analogy where he talked about comedians. And he talked about how when you're
a comedian, and you're just getting started, and you are trying to get all your jokes and lines
together, you play the clubs, and you go to all the nightclubs, and you see what lands,
you see where people laugh, and then you go home and you rewrite and keep doing that over and over
and over again. And once you start doing that enough, then you take your show to HBO. And so
we talked a lot about making this transition from playing the clubs, it's what we've done for the
first two years of running the business, to now going and taking our program to HBO. So that's,
I even forgot what the original question was, Courtland, so I'm just hoping, fingers crossed,
that this is circling back in a coherent way for listeners.
Just changes in how you've grown over time.
Oh yeah, you had asked about that transition of the sales and marketing processes,
sort of before and after. So yeah, so that's how we've thought about it over the years.
That's how we've chosen to make our moves. And yeah, and I always reflect on that analogy of
playing the clubs to go into HBO. Are there any strategies that you seriously considered
that you decided not to use? Yes, many. What went into those decisions?
Yeah, so we don't run ads at all, which is pretty unconventional for pretty content marketing
heavy business. And I hate that phrase, content marketing. It sounds gross to me,
but it's essentially what we do. People find out about us because of the stuff we write.
And most businesses that are based around that boost that exposure with paid ads. And I have no
doubt that it would help. And who knows, we may pick it up later down the line. We chose not to
pursue it though as an initial strategy because one, it's expensive. And as a bootstrap business,
being cognizant of how that money is being spent, for example, could you hire another contractor to
help out with certain things versus ads? But then two, the main reason was we considered our audience
and we thought, how likely is it that a CEO is going to buy Know Your Company, which at our price
point, keep in mind, we're a little different from a lot of software companies where we're a couple
grand for the average company, right? So if the average company we work with is about 30 people,
we cost about three grand upfront. Are you really going to buy that clicking off a Google ad or
Facebook ad for Know Your Company? Highly, highly doubtful in terms of if that's going to be what's
going to drive the conversion. And instead, are you more likely to buy a three grand purchase of
software based off a conversation you're going to have with a friend of yours or based off reading
a thoughtful blog post that you end up forwarding to a few employees, right? Or watching, say me
speak at a conference. So for us in terms of our pricing relative to also just the gut feeling that
you get from being exposed to that channel, we chose not to pursue that. So that's definitely
one. Another one that we've chosen not to do. So I mentioned that we did originally hire ahead of
business development. So one strategy that we definitely had considered for a while was building
out a sales team. So very classic SaaS growth model. And for us again, it was interesting. We
noticed that the way people wanted to buy our product, they didn't actually really want to talk
to someone. Sometimes they did, but just not all the time. Like it was fine when they got walked
through a demo, but then after that, which is actually what a majority of sales people's
time is spent doing is, I mean, 90% of it is in the follow up, the emails, the phone calls.
And the CEOs that we worked with, it was just too much. It was almost overkill. And again,
salespeople are expensive. And so in terms of that trade off and trying to figure out,
is that the right process for us? It didn't land. So I share these things, I guess.
Is that because CEOs are too busy?
I think that's part of it. I also think our product is a lot more self-explanatory than
most that need to be sold via a salesperson. And I think we overestimated that complexity
ahead of time. I think we overestimated the number of stakeholders it takes to buy into
something like this. And that's why having salespeople is great. And here's the thing,
Courtland, I share these things not for people who are listening to be like, oh, I'm not going
to run ads now. Or I'm not going to hire salespeople. I may eat my words, by the way, in six
months and do both. Who knows? You always learn things and decide and change your mind. Everyone
is allowed to change their mind. But I share both those things because one thing that I am
deeply committed to is just having a very specific vision for how you want to be talking to people.
What's the relationship that you actually want to be having with your customers? And is it consistent?
So if our mode of building that relationship is about education, which it is, it's about support,
then maybe better ways to acquire customers are actually giving people that education and giving
people that support. So can we educate people by, for example, we built a knowledge center
last year, where we have tens of articles, in-depth articles about how to give constructive
feedback, how to receive feedback that you don't want to hear. What are the best questions to ask
an introverted employee? So we offer that. We offer workshops, so hands-on sessions where you
can actually practice a lot of these skills day-to-day. And then we also offer the water cooler,
so this online community where you can, again, get that insight and learning. And for us,
we've gotten so many Know Your Company customers through those means. That's literally where they
all come from, right? Rather than some of these other channels because we've picked and decided
what kind of relationship we want to be building with our customers. The other thing I'll mention
is that it also plays to our strengths. So because I've done all of this immense amount of
interviewing and research around the psychology of CEOs and the pains that they're going through,
we can speak to that very, very uniquely. So we have this ammunition around that. We also have
incredibly rich data from all of these customers. So that's another thing that we can play into for
being helpful and for providing that information and that education. So I think when deciding,
okay, what am I going to do and what am I not going to do, really listening and paying attention to
what those strengths are is key. One of the unique things about Know Your Company is your business
model. Can you explain how it works and how you guys decided to go with it? Definitely. So yes,
it is truly odd. We offer one-time pricing for our software products. So it's $100 per person,
one time, and then you never pay again. So if you have, let's say, 30 employees, it's three grand.
But here's the thing, every time you add a new employee, then it's $100 after that. So
we bank on our companies growing. The reason that we do this, it's for a few reasons. I will add,
though, that it was a pricing model that was originally what it was when I first took over
as CEO. And so it was something that was chosen out of the gate. But it was chosen for a few
reasons. So one is that, first of all, it's different. People remember it, it stands out,
and in a crowded marketplace, that's always a way to sort of stand out and have people remember you.
Second, though, and this is truly the core reason, which is that it actually helps align
the outcome to be better. So what we ultimately want when people use our product is to act on the
feedback in some way, to take it seriously and encourage their employees to be continually giving
their input and then acting on that feedback. And the interesting thing about the one-time pricing
model is that if you have a piece of software that's, let's say it's like $5 per user per month,
right? So it's less than $100 per month for you. That's super easy to use for a few weeks and then
be like, okay, I got this weird piece of feedback from John, so I'm just going to turn it off,
whatever. However, if you are deciding to pay $3,000 for it upfront, and then that's it,
you're just paying that $3,000, but you know that you've invested that upfront, all of a sudden,
you launch your company and you're like, okay, we're going to actually launch this like it's a
thing. We're going to make an announcement about it. I'm going to talk about it in our weekly
meetings. I'm going to make sure that that $3,000 grand pays off. So that second scenario is really
how we want people to be using the product. We want them to be invested in it for the long haul.
And third, it also aligns with my personal philosophy about how you should be getting
feedback, is that feedback is not this thing that you can just turn on and off. It's not this thing
that you should just be thinking about when it's convenient. It truly should be something that
you're thinking about all the time and throughout the lifespan of your company. So when you purchase
new your company, you purchase it for life with that mindset, with that mindset that this exercise
of getting feedback is not a one-off thing. It's something I'm investing in for life, for each
employee we bring on versus with a subscription model, the inherent assumption is when we need it,
when we don't, it's just this little tool, this little thing on the side. So yeah, a long-winded
way to explain the pricing model, but hopefully I know a lot of people are often interested in it.
And here's the other thing I'll add, Corel, and just as an addendum, which is that it's not
perfect, my goodness, because people might be listening to this and being like, okay, now I'm
just going to switch to one-time pricing. It's not perfect. It's been incredibly helpful to help us
reach profitability. So we became profitable in month one after starting at zero because of this
pricing model. We probably wouldn't have been profitable until like month eight or nine,
had we not. So that's one thing. So if you're a bootstrap company and you're trying to land your
first customers, considering a one-time pricing upfront is extremely helpful for just getting
some immediate cash in the door, it also is really interesting from a lifetime value perspective,
right? Because what we are getting upfront is essentially what the average lifetime value would
be, except we're collecting it upfront. So again, for bootstrap companies that are focused on cash,
that's huge. However, there's definitely some pitfalls. So one, the model does not account for
some sort of common scenarios with part-time employees or with interns. So people often are
like, okay, well, do I pay a hundred dollars for someone who's just going to be here,
who's a seasonal employee? So there's some interesting quirks. There's also the anxiety,
the psychological anxiety that holds someone back from making a three grand purchase versus
a hundred dollars a month purchase. Though many companies can afford it and it's not a huge
purchase by any means in the scheme of the actual impact or to other expenses, it's just a little
bit more thought than your typical just credit card swipe. So for us as a product, that challenges
us to make sure that the value that we're delivering is clear. And that's hard. Admittedly
difficult. So it's something to definitely consider. Earlier, you mentioned being weird,
having a weird company, excuse me. And you've got a weird business model. You've got a unique
founding story. You've got sort of weird growth strategies. And it strikes me that this isn't
just a personal quirk. It's not like you're being weird just to be weird. It's more that you're
taking the time to form sort of detailed analyses on what you're doing and understand exactly what
the effects and the trade-offs are of all your decisions. And the result is that you end up
coming to conclusions that work for your company that don't necessarily look like what everybody
else is doing. How do you do that? How do other founders who are listening in do the same? Because
I think it's so easy to sort of get swept up in the conventional wisdom of your pricing must be
like this. And this is the typical growth model that you must follow like this. And here's how
you do content marketing. How do you look at yourself and decide what the best path for you
is even if it's not what everybody else is doing? I love that question, Cortland. Because I think
it's first of all one of the hardest things to do as a founder. And I think it's what the most
successful founders do, which is that they truly just listen to themselves. They try to see things
for what they are, but then they internally reflect and then they go forward with what they
feel is best. And I think the best way to remember that, or at least for what I try to do to remember
that, is to realize that no one has the right answer. So I think so many of us read medium or
read blog posts. Many folks may be reading indie hackers being like, there's got to be an answer
for how you do X. Come on. It's the formula. What's the plan? And I think many of us are also
fascinated by the stories of successful entrepreneurs, whether it's reading them in
Forbes or Fortune, because we want to figure out what the patterns are so that we can recreate them.
And that's not to say that that pattern seeking is bad or ill-informed. In fact, it's massively
helpful to learn through other people's experiences and mistakes without committing them yourselves.
My gosh, that's the best way to learn through other people's mistakes without doing them
yourself. However, in terms of decision-making, right? Because that's learning. So learning,
yes, immerse yourself, get advice, get out there, take it in, soak it up. But when it comes to
decision-making, you almost have to do the opposite. You have to pick and choose what inputs are
actually relevant to you, your business, your values, your vision, and to what's actually
happening in front of you. And so to make that distinction, to understand that learning and
inspiration is very different from day-to-day decisions and making progress, and to know that
there isn't a right answer for what those decisions should be, that's what I try to keep in mind
personally. I also try to keep in mind that no one is doing what you're doing. And I don't mean
that in an arrogant way, like, oh, no one's as special as you. I don't mean it like that at all.
I mean it in the sense that you are you. There's no one on the planet like you. And so as a result,
there will literally not ever be a business quite like whatever you're choosing to put together.
So because of that, anything else that you look at for reference or inspiration or any other
person you talk to for advice in many ways doesn't apply because they're not you. So trying to
remember that those answers, most of the time you have them in yourself.
I think having the confidence to look at something written by or said by somebody who's much more
successful than you, and to conclude that what they say doesn't apply to you and that you need
to do it on your own is difficult for a lot of founders. And I kind of want to peer into your
mind right now. What are you thinking about as you run your company today? What's at the top of your
mind? What are the challenges that you're trying to face? And how are you sort of juggling the
options to decide how you can grow and succeed and what to ignore and what to incorporate into
your decision making? Yeah, absolutely. So one of the most exciting things that we are noticing
with Know Your Company is that the water cooler has really struck a vein with people. So as I
mentioned, I mean, we just launched in October very humbly, just not expecting too much. Not sure if
we would shut it down after a month or so seeing how it went. And it is a thriving community where
we have CEOs, founders and managers from all over the world from incredible companies are actively
participating on conversations about firing people, hiring, recruiting, how do I run my offsite? What
questions should I ask to my leadership team? What's your makeup of your board? And just fascinating
insights that it's very hard to find elsewhere. In the applications that we receive and we receive
thousands and thousands of applications over the past few months to join, we notice just how
pained managers and leaders are for this community, for learning and for becoming better.
And so that's been, you know, it sounds obvious, but that's been something that we really want to
help and want to address. And from the beginning, that's, I mean, it's been sort of my personal
passion for helping people become happier at work. And seeing leadership is, in many ways,
the ultimate way to do that, because you can affect a lot of people when you choose to go that route.
But there's definitely a recommitment to looking at that issue in particular, and to looking at
this audience, not just of business owners, but of managers in particular, and of leaders in all
stages. And again, not just small business owners and asking ourselves the question of what can we
do to help them? So what is it with our product or our offerings that we can better, you know, do?
And so, yeah, so we've been actively working on a lot of fun projects to tackle that question.
So Vanessa Pagan, another indie hacker on the forum asks, how has building the water cooler
affected your reach with their target audience? I'm just curious, in light of the question I
asked you earlier, how do you juggle this with sort of your other marketing initiatives with
writing online and speaking at conferences? Great question. It's hard. It's hard. I actually
only recently have sort of found, I think, what I feel like is my best schedule to date.
It's always constantly evolving, right? You're always trying to figure out, oh, is this feeling
right? Do I feel like I'm spending my time where it should be? And what I've been doing lately is
I've been booking out sort of my Mondays and Tuesdays for all of my writing. So I don't take
meetings on Mondays and Tuesdays at all. All I focus on is writing. If, you know, I'm preparing
for a talk, those are the days I do it. I take Wednesdays to focus just on our water cooler
community. So different projects to either help promote it or get AMA guests or just add to the
conversation. And then on Thursdays and Fridays, those are the days that I take to work on either
special projects or do some long-term thinking and visioning. So addressing this question of how do
we help managers and not just business owners, you know, is there something maybe on the workshop
and that we should be thinking more about or thinking about, you know, your company, you know,
two, three years down the line, those are the days that I choose to do that.
It's great hearing about your schedule. And I think I'm also curious about how your schedule has
changed over time. Obviously, as you've added new customers, new features, you've changed your
marketing strategies and launched initiatives and added teammates, you've had to change your
schedule. So what are the factors that have gone into making some of those changes? And
how has your schedule changed over time?
No, I've made so many changes to my schedule over the years. Like I was saying, this is what's been
working most recently. But in the beginning, I was doing everything. So even mocking up designs
for features, which I don't do anymore now, but in the beginning, I did. So that's probably been
the biggest changes I used to spend in the first years of a new company, a ton of time on the
product side. So I don't have any formal training in design, but it's something that I definitely
picked up over the years and I'm an artist on the side. And then on top of that, as a CEO,
you have a very strong product vision naturally. And then I did know, or I do know Rails and HTML
CSS. So thinking about what we should be building on the most strategic level, I was obviously
highly involved in in terms of what we should build. But then even in the first few years,
having conversations with our developer at the time about copy, about overall flow of elements,
about even about how databases are set up to a minutia, which I look back and I think,
huh, you know, growing pains, okay, that's when we were first sort of getting started and you're
really in the thick of everything. And now, in the past year, we hired this amazing CTO,
his name's Daniel Lopez, he used to be the director of product for IFTTT if they send that and just
this incredibly experienced product designer, product manager, engineer, designer, product
leader. And so I've learned a lot actually from him. But that transition, I mean, one, it was one
of the best things ever to sort of get myself out of the weeds on the product side. And two, yeah,
it made me notice just how when you as a founder do choose to put your time into the things that
you really feel like you should from the business perspective, you see the changes. So that's when,
you know, when I made that change, that's when I started to write more. And again, you know,
we've seen, yeah, we've really seen the seen the benefits of it.
What are some of the trade offs that you've had to make to be so productive as a solo founder? And
I think on a two person team, it's especially challenging trying to reach so many customers.
So I'm also curious, like, what are the breaking points? And how have you what things that you're
not doing that you wish you could?
Hmm. So I think the biggest thing is it's not that I wish we were doing more things. It's
speed. So we can't move quite as fast, obviously, as teams and companies that are much bigger than
us. And there's an advantage to that, of course, in the sense that you can be deliberate. But
sometimes, you know, I do wish, oh, it would be so nice if we could move faster. And that's that's
definitely the biggest thing. The other thing, though, that I try to remind myself, though, is
faster doesn't always mean better, right? And to focus on if well, if we're doing the right things,
and whether or not we finish it by the end of this month or next month isn't going to be the end of
the world. But at the same time, I think it's important to be cognizant and not naive as a solo
founder, as a two person team, of what your limits are like you have limits, like that's, that's the
thing, you know, you we are, we are small as a company. But my point being is just just to,
you know, to be real about the fact that, okay, we're not going to move as fast. So that actually
means we probably should cut out even more things to make sure that we're making the right progress
in the mountain and the pace of what we do want to get done on the actual things that matter. And
then that's where it comes back to, well, okay, are we actually working on the things we're supposed
to be working on. And in a beautiful way, it really forces our focus to be able to move faster.
Focus and scope of what we do put our time towards.
Andy hackers is just run by two people. So what you said really resonates with me, I constantly
have this feeling of can't we move faster. And when things are going well, I feel that way when
things are going a little bit slowly, it's excruciating. But I think what you said makes
a lot of sense because ultimately, it's difficult to create more time. So the best option you have
available is to just try to make better decisions and work on the right things and the right ways
at the right times. And that's a constant process of reevaluation that never really ends.
Let me ask you, what do you think is the biggest constraint on your growth for Know Your Company?
How do you make it bigger? How do you become more successful?
Do you fundraise at some point? Do you hire or do you continue to keep things slim?
Great question. All questions we've actually been thinking about. Definitely a lot, a lot lately.
I think it comes back actually to that question of speed. For us, we feel like we are definitely
working on the right things. We know where we want to go. We know how to get there,
but it's a question of can we move fast enough. We are actually in a space that's more crowded
than it's ever been, especially when I first started this work four years ago. And even before
that, five, six years ago when I was first just even researching this space, there weren't a lot
of players, there weren't a lot of other companies thinking about this. And this isn't to say that
I'm looking over my shoulder going, oh my God, we've got it. We've got to move on stuff. It's
not in that sense. But again, just being pragmatic about the fact that because this is such a painful
thing for people, how do I become a better leader? How do I communicate better with my team?
Other people will come up with solutions, which is great. And I think there will always
be space for others. But if we do have a specific vision for how to solve it, I definitely am
cognizant that speed will be important for us. And so to your questions of what will that exactly
look like? Will we hire outright? Will we raise? I'm not entirely, entirely sure. Yeah, as of now,
we'll see. You can talk to me in six months. I'll let you know.
So let's talk a little bit about know your company as a product and some of the things
that you've learned. Because you've been doing this for four years now. You've been talking to
a lot of companies, a lot of CEOs, and you're actually helping them build better cultures with
their companies. And I think people listening, especially those who are running slightly bigger
companies might want to know some of the things that you've learned.
I think one of the most counterintuitive things that I've learned in having a healthy team is
this idea of consensus, collaboration, and conflict. And how do those elements actually
help you run the kind of team that you want and have people feeling happy? Because here's the
thing. In every team, you're going to have disagreement to some extent. It's just going
to happen. It doesn't matter if you have two people. It doesn't matter if you have 200 people.
Someone's going to disagree. So the question always is, well, how do you make progress in
that face of disagreement? How do you collaborate? Do you lean towards consensus? Do you have
everyone go around the room and raise their hands to vote? Do you ask people how they feel and then
just make a decision on your own? What does that look like? And I think what conventional wisdom
says or what the instinct is, yeah, I'll say this, what the instinct is of most leaders when
they're faced with a contentious environment where you have a lot of disagreeing viewpoints is, yes,
one, you hear everyone out. Two, you find a way where you get everyone to agree for the most part
and you just try to build that consensus and then you end up making the decision. That's how most
people will go about it. You've got another spectrum of people who are just like, eh, whatever,
screw it, I'm just going to decide. But for most people as leaders or at least leaders that we talk
to, they struggle with this because they go through that process. And what ends up happening
is the decision gets really watered down. People don't end up agreeing anyway. It takes a ton of
time. And so what we've found in working with the CEOs that we do is that when it comes to
trying to collaborate with people, that's actually not the same thing as building consensus.
Collaborating is not the same thing as making sure that every single person agrees. What it is
is just trying to find a way, a productive way to move forward. So this means that people can
agree to things for different reasons. This means that people can agree at different times, right?
But the thing is that you're actually then still making progress towards whatever outcome you're
trying to make, because that's your role as a leader is to try to help someone and help the
team overall make progress. It's not necessarily always all the time having everyone feel like
they're getting their way. It's impossible. So I think that discernment between consensus and what
true collaboration is is something that, yeah, something that I've learned, something that was
surprising to me for sure. The other thing, and I'll just add this real quick that I've learned
that is most surprising is also empathy gets brought up a ton in the conversations that I have
with leaders, whether it's interviewing them for the heartbeat, whether it's running
workshops around the world, talking with leaders, you know, from all different sorts of countries
about what they wish they would have known earlier. And a lot of them talk about empathy.
However, they talk about empathy in a very, very specific way. They talk about how it's important
to be empathetic, but in the sense that everyone is not like you and everyone is not the same.
So this idea that you should tailor your communication strategies, you should tailor
your conflict resolution strategies, you should not think that everyone is going to react to
something the way you would react. So the whole adage, treat people the way you would like to be
treated is actually completely false. Don't treat people the way you would like to be treated,
treat people the way they would like to be treated. And not just they as like a sort of
homogenous group, but each individual person who has their own experiences, values, beliefs,
and that nuance to me, and what I've observed has been what the leaders I've talked to
really feel like it took them the longest to learn.
So how do you learn that as a leader? How do you empathize with all the different people
that you're working with?
So it all comes down to specificity and asking about situations. So I like to ask one of my
favorite questions to ask is, when was the last time you felt micromanaged by me? So there's a
couple things happening with that question. One, you're being very specific, you're asking about
micromanagement. Two, you're asking about when. So when you say when was the last time, you're
asking them to think back to a very specific time, which causes them to, again, give you actually
something that's real, concrete, specific. So it's not this sort of vague like, oh, hypothetically,
I like to be treated. It's like, well, it was this last time when you did this, and that made me feel
like this. So every time I try to understand specifically how someone is feeling, I think about
trying to make that question as specific as possible. What's the emotion I'm trying to avoid?
What's exactly what I'm trying to feel out of if they feel angry or disappointed or demotivated?
And then I try to tie that back to a specific time where they felt like that. So asking when,
and not just how or what or why, but when.
Company culture seems, it seems like one of these things or an ounce of prevention is worth
a pound of cure, and you really need to help to get it right early on. What are some of the things
that business leaders should optimize for early in their company if they wanted to grow in a healthy
way? So there are three things that I would say that actually leaders can be mindful of that just
influence culture in the first place. So regardless of what type of culture you want, if you want to
influence it, if you want to shape it in some sort of way, these are the three things to keep in mind.
The first is personal accountability. So the fact that if you as a leader do not walk the walk,
if you as a leader are late to responding to emails, or you show up to meetings always 10
minutes behind, or you never follow up with customer support requests, whatever it is,
if you do not walk the walk, but then you're asking everyone else to show up on time or answer
customer support requests, guess what the culture is going to become, right? Skeptical,
inconsistent, you know, haphazard. So as a leader, when you think intentionally about what your
culture would like to be, make sure you're personally exhibiting those characteristics.
The second piece is consistency. So even if you are super small, and it's just you and a few
friends starting something, think about how will you be consistent in everything that you do?
Because what's consistent, that's what actually lasts. So if you were thinking, okay,
we're a small team, but we want our culture to be very customer centric, think about, well,
are we going to consistently be asking customers for feedback? Are we going to be consistently
referencing what those comments are that customers have and then pulling it into the product?
Do we have a set of questions that we ask whenever we develop a new feature that reflects back to
what a customer might think about it? How are we going to be consistently ingraining this idea of
being customer centric, even when we're so small? So consistency is the second piece.
And then the third piece for what really influences culture, and especially when you're
small, you know, you can't start early enough, is this concept of richness. So this idea that you
can't rely on sort of one means or one channel or one way to have people receive something or have
something come to be. So for example, let's just take the same example of being customer centric.
You can't just say, okay, we're going to have everyone, even as a small 10 person company,
answer support tickets. And that's going to be the way that we stay customer centric. Well,
that's just one way. You should also maybe have everyone involved in one focus group
every, you know, during the year or have and also have everyone interview a customer and also have,
you know, this rubric or set of questions that we ask around building a feature that has to do with
customers point being again, that you have a lot of different avenues for enforcing and encouraging
this concept of being customer centric. So this, this richness in the ways that you're thinking
about your culture and not just saying, okay, we want to be friendly. So we're just going to do
this or we care about, we care about being innovative as you know, as a company, and we
want that to be part of our culture. So we're, this is just the one thing that's going to make us
be that richness is important. So it's those three things personal accountability, consistency,
richness. You talked earlier about consensus building and some of the mistakes that people
make around that. But I'm curious, what are some of the other counterintuitive mistakes that
otherwise well meaning founders and business leaders make when they're trying to build a
positive culture at their companies?
Definitely. So one of the biggest and I actually only learned this recently in a workshop that I
led last year is to stop asking people the question, how can I help you? Which by the way,
I am so guilty of. So if you're in that one on one meeting, and you're talking with a teammate,
and at the end you go, just, you know, how can I help you? So what I learned is while that question,
when I ask it, it's totally well intentioned. I'm asking it because I generally want to help. And
I'm curious for ways that as as a CEO, I can help. What I learned in this workshop, there happened to
be a project manager who she said she hates that question, because it does a few things. One, it
puts the burden on her to be the person who suggests what she needs help with. So in many
ways, when you ask that question, you make the other person do the work, you make them go, okay,
geez, well, what is it that I need help? And I mean, it's a lot to sort of process and think
about, do I bring up, you know, this tiny little thing that bothered me during the meeting last
week? Or do I talk about the broad project needs that, you know, I've been noticing overall,
just in my role, where do you know where to even start? So you put the burden of work on the person
that you're that you're asking to it actually comes across as super disingenuous, because you're
asking the other person to do the work. It kind of shows as you as a leader that I mean, have you,
you know, as a leader, have you even thought about this? Or do you have any suggestions at the very
least, it becomes this kind of major question that's just asked more to the benefit of the leader
to be like, Oh, you know, I'm, you know, I'm trying to be helpful. I'm trying to think about you.
Versus if you truly cared about wanting to help the person, another version of that question that
you could ask is, for example, you could ask something like, what's, what's one phone call
that I can make for you that would help move things along, or help make your work easier? That's
actually a question that in another separate workshop that I ran for another leadership team,
one of the employees there said that her former boss used to ask that and she was,
she loved that question. She loved that question because he wasn't asking something vague. He
wasn't trying to put the work on her. He was literally saying, what's the one phone call I
can make for you? Just tell me what's the obstacle that I can take away. So for, for, you know,
founders and, and leaders listening to this, be really mindful of that question instead of asking
how can I help you offer and say, what can I take off your plate? Or who in the company are you
having difficulty working with? Or is there a client that's bugging you? That specificity,
again, to come back to the specificity of the question is so key. So I think that was one of
the most counterintuitive things that I've learned recently is stop asking that question,
how can I help you? On that note, what are some warning signs that founders can look out for
that might tip them off that things might be heading in the wrong direction with their company
culture? I know you mentioned working at a company where you felt like it wasn't really safe or
accepted for you to give feedback. But as a founder, especially as a founder of a successful
company, you might be oblivious to these things. So what what should you be looking out for?
Absolutely. I think the the biggest sign or sorry, there are two probably big signs that I sort of
have observed as being big warning signs of your culture not being maybe what you'd like it to be.
One is when you end up having a culture of nice. And what I mean by culture of nice is when you
ask people, hey, what do people actually think about this? And all you get is either crickets,
or you get a lot of affirming responses, always affirming never a critique. Or you ask a question
like, is there anything that we can be improving and people are very, very hesitant to give any
sort of criticism or they go, Oh, you know what, it's, it's pretty good. And I think we can do this.
It's very light. It's very, very light. So this culture of nice, and it exists when everyone is
again, well intentioned. They don't want to hurt people's feelings. But the root of it is that they
think that being honest and being kind are mutually exclusive when in fact, they're not you can be both
honest and kind. So in your company, if you notice that you always hear good things, that's, that's a
huge problem, because there's something that people most likely are not choosing to tell you.
The second kind of warning sign that always sort of bodes ill isn't what I call an avoidant culture.
So when you have people who are not willing to spend more time either with you with the company,
or just around certain topics. So what I mean not necessarily is that people aren't willing to stay
late. And that means that your company culture is going to shit. That's not what I'm talking about.
But what I mean is, for example, when you're in a one on one conversation, is the person cutting
their responses so short that you end 10 minutes early? Is that happening every single time? When
you hold your all hands meeting, you ask for questions, and it's always silent when you're in
your leadership team meeting, and the discussions, they're, you know, they're good, they're okay,
but they're getting a little short. And no one's, you know, again, no one's posing tough questions.
And there's this sort of avoidant culture. So it's not a culture of nice, but it's a culture of
avoidance. And in that case, again, people are holding something back, they're choosing to not
tell you something. So those are what I see as sort of the two most common. They're all obviously
very glaring warning signs as well, in terms of a culture of being toxic, right? Whether it's
people leaving, whether it's people yelling visibly, or being upset, or crying, or rumors,
or politics, those are a little bit more obvious to catch. I think the culture of nice and the
culture of avoidance are a little bit more subtle, and they creep up on you.
Are there any problems you've seen that tend to correlate more with successful
businesses than less successful businesses?
Definitely. So this is something I observed a lot in the research that I did, and also even very
briefly in the consulting work I did, which is, and then again, now in the research that we do
with and the data that we've collected through New Year Company, which is, at least from what
we've observed is that the companies that are able to argue well internally, are the ones that seem
to make progress the quickest and seem to have not just happy employees seem to be performing
well. And so this goes actually back to the consensus comment that I mentioned earlier,
but companies that understand that true collaboration and teamwork isn't about everyone
agreeing with each other, but it's about learning how to air out differences of opinion quickly,
respectfully, make a decision, and then move forward is key. And I think, I'm going to forget
what the exact quote is, but Jeff Bezos is really famous for actually instituting a policy,
even at his board, where they have this agreement where you can violently disagree with one another,
but the minute that the decision is made, and it has to be made, everyone has to be okay with it,
and you just move forward, no matter how passionate you felt about your side. So again,
this idea that if you can argue well, if you can flesh out disparate and conflicting viewpoints
without fear, with freedom, and with honesty, but then make the decision and move forward,
those seem to be the teams that we see that perform the best.
I think one thing that's really interesting about your situation is that you're helping
these bigger teams grow, you're helping them figure out their companies, you're helping them
make decisions. But then in your own particular situation, you're a two person company,
do you ever feel left out?
Well, so you know, it's interesting, Courtland. So I am hypersensitive to the fact that we
don't experience our customers problems firsthand, we are a two person company. And so because of
that, it's a huge reason I spent time doing over 500 demos with CEOs with you know, anywhere between
25 to you know, over 1000 employees is because we have to internalize that somehow. And if you're
not getting it firsthand, and even if you are getting it firsthand, you have to find ways to
increase the amount of input, increase the amount of frequency that you're able to take in that
truth and see what the truth is. So I'm with you, I'm incredibly sensitive and sort of keyed in on
the fact that you know, we are two people. So what can we make sure to do, whether it's,
we do a lot of sort of beta testing with our features, where we'll either launch it to a small
pool of customers first before launching it to everyone else, or we'll actually even launch it
stealthily to customers to see what happens and then fix a few things or not fix a few things
because it works well before announcing it. So I'm absolutely with you there.
One thing that's interesting in your company as well is that you've talked to so many CEOs,
you've done, you know, 500 calls. What are some of the things that you've learned from
your customers rather than the things that you've taught them?
Oh, so much. One, one I would actually say and probably relevant to the audience is to make sure
to enjoy the moment that you're in. I think as a founder, you can get really caught up in trying
to create what could and should be instead of realizing that actually things as you have them
are pretty good too. It's not to say you should, you know, be complacent by any means, but to be
grateful and to enjoy, you know, enjoy the process, which again, pretty maybe trite in some ways, but
I forget who I was talking to, but there was one CEO I was talking to and he was like, Claire,
like I know, you know, you have a lot of things you want to do and places you want to take, you
know, your company, but realize like you are a two person team. You're profitable. You serve
thousands of people. You're making an impact in the world. You have happy customers. You don't
have team issues. It does not get better than this. Like it only goes downhill. Like that,
that's as good as it, like this is as good as it gets. Like enjoy this because the minute you start
to hire more and the minute you start to, you know, serve more people, it just, you know,
the stress only increases. The obstacles only increase, you know, the team politics only
increase. So he was just sort of like, enjoy, enjoy this now, enjoy the moment. And I think for,
regardless of what stage you're at, whether you are running a 500 person company, whether you are
running a five person company, whether you're running a side gig, you know, that you're trying
to make full time, I think just enjoying what those moments are, instead of always thinking,
oh, well, I'll be happy when. Yeah, that's great advice just for living your normal life as well
as being a founder. Yeah, well, I would like to think that. Is there anything that I haven't
brought up or that we haven't talked about that you would like to talk about that you want any
hackers to know about? Um, I guess like one last thing I might share, and this is related to an
earlier conversation, you know, I sometimes get asked, Claire, what's the best piece of advice
you've ever received? And I think as just both a person and as an entrepreneur, it's to trust
yourself. And especially when you're trying to build something independent on your own terms,
bootstrapping it to keep that in mind is again, no one else has the answers, you should do what
just, you know, feels right for you and to realize that any other kind of advice that you get,
even me on this podcast, giving you this advice or sharing this advice.
It's all it's all biased by our own experience in our own perspective. So if one person has had,
for example, a bad experience with sales people, they'll tell you don't go hire salespeople. If
another person has had great experience with salespeople, they're going to tell you,
go hire salespeople. So everyone's biased by their own experience to take all advice with
a grain of salt and ultimately to yeah, to trust yourself at the end of the day.
All right, everybody, you heard Claire, don't listen to anything that we have to say.
Exactly. Just, you know, never listened to any podcast ever delete all this.
Moral of the story.
Thanks so much, Claire. It's been a pleasure talking to you. Can you tell listeners where
they can go to learn more about what you're up to personally and what's going on with Know Your
Company?
Yeah, sure. Thanks. So you can follow me on Twitter at CJ Lou, L-E-W 23. You can email me
to at Claire, C-L-A-I-R-E at knowyourcompany.com. Check out our website, knowyourcompany.com. And
then I do a ton of writing on Medium so you can find me there. And then lastly, if you were
intrigued at all by The Water Cooler, you feel like that community might be for you. We'd love
to have you. So be sure to check it out. It's at thewatercooler.io.
All right. Thanks a ton for coming on the show, Claire.
Thank you for having me.
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