Will Herman On How This One Tool Enabled Him To Generate $4 Billion in Shareholder Value
Manage episode 260081365 series 2661367
Serial entrepreneur and author, Will Herman founded and scaled five companies, two of which IPO’ed, for a combined shareholder value of $4 Billion. Along the way, he made a bunch of mistakes, but this one tool, in particular, helped him gain perspective and surface insights, real time, which enabled deep leadership growth. Although he naturally fell into this, he credits his long-time mentor/coach for much of his success as a leader, which stands at the foundation of building and exiting successful businesses. In this Unmessable episode, Will shares some key learnings he derived from his entrepreneurial journey, which might just help you along yours.
In this episode you will learn about:
- Building companies
- Managing and scaling a team
- Raising capital
- Setting company culture
- Value of having a business coach/mentor
About Will Herman:
Will Herman is an entrepreneur, active angel investor, corporate director, startup mentor and author of The Startup Playbook. He was previously a serial entrepreneur, having started and managed five venture-backed companies, resulting in two IPOs and two corporate sales. In a series of transactions, including multiple IPOs, acquisitions and management buyouts, Will created almost $4B in value for his investors. Will is currently a fund advisor at the venture capital firm, Bolt, a mentor at TechStars and is a frequent speaker at startup accelerators.
As an angel investor, Will has invested in over 70 startups and actively advises ten of those companies. He sits on the boards of Jumpcloud and Concrete Sensors. He lives and works mostly in the Boston area.
Connect with Will Herman:
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Will: I was a klutzy kid and tried to keep up with all the good jocks on the field kind of kid. I mostly got my ass kicked and got outrun, got outplayed.
Tanya: That’s Will Herman who kicked ass in the game of business, a five-time serial founder who brought two companies public, had over a half a billion dollars in exits and created over $4 billion in shareholder value.
Will: I found my little corner of friends who were the less athletic types who we banded together and played games that were maybe less competitive, or if they were competitive, maybe they were mentally competitive. I can’t say that I was one of those nerdy kids who played intellectual games because I wasn’t that either.
Tanya: You were like a hybrid.
Will: Yeah, I liked everybody, I suppose, like a hybrid. I was hugely into Legos. I loved building. My mother wouldn’t let me have an Erector Set because she was sure I was going to swallow all the nuts and bolts, but I loved to build. They bought me plenty of Legos, and I could spend hours and hours and hours building Legos. That was a thing of mine.
Tanya: Do you think that your love of Legos translated somehow into your love of entrepreneurship and building things?
Will: That would seem like a logical jump, wouldn’t it? Maybe, I mean, I was never – my Legos were in the time before you bought the Millennium Falcon Lego kit. You got a box of blocks. That’s what you got, and so everything was right out of your imagination. I remember I also had motors and pulleys and swing arms and things like that, and once you add power to it, it was even more fun. I mean, perhaps that part did do it. It maybe taught me or brought out in me the fact that I don’t need a structured environment. In fact, I thrive without structure, and it’s things in structure that I don’t really like. I mean, I don’t – in life, in the things that I do for fun now, none of them are very structured things.
Tanya: At what point did you realize that about yourself?
Will: Oh, it was probably starting my third company before I recognized it. I never played on it. I thought it is what it is. I think deep down, what I’ve analyzed over the years, what is it that plucked me out of the crowd to make me a success? What is the genetic background for becoming success? It’s really that somehow I don’t have the gene, the proteins, and the enzymes to fear failure. It’s not even fear failure. I move from one thing to the next. If I don’t’ achieve what I set out to achieve, that’s fine. I’ll move on, and I’ll take another path. I’ll try to achieve it another way, or I’ll change my goal, and I’ll move on.
I don’t get ratcheted down on specific goals, guidelines, execution metrics. It’s not my way. It’s not to say everything is completely freeform. I live a pretty normal life. I certainly don’t get bound by things. I don’t let them define me. I define what I’m going to do.
Tanya: One of the things that I’ve noticed is that highly successful people get out of their own way. What you’re pointing to is instead of mulling on the failures, which by the way, most of us – you could do 100 things well and then one thing where you make a mistake, and you’ll remember that one. It sounds like you innately trained your mind to really direct thoughts into productive matters that you have control over as opposed to mulling over the past on things that even if you invest that thinking time will make no difference.
Will: I think that’s really well put, and I will add a touch of ignorance to – my ignorance to the whole thing. I mean, I think being young and naïve or old and naïve is really helpful. It’s good to know that you don’t know things, but sometimes the fact that you don’t know them doesn’t really hurt you.
Tanya: Yeah, so I started a business for eight years and exited it recently a year ago. If I knew everything that I had ahead of me when I started, I mean, knowing myself, I probably would’ve started it anyways, but my God, oh, my God, what a journey. Yes, ignorance at that point was certainly bliss, for sure, yeah. What was your continuous motivation in life? That hunger, what do you think that – what was the source of it?
Will: Wow! I might need to be in a therapist’s couch while – I mean, I think probably it’s something deep down. I grew up in a screwy household. Parents weren’t really there. There was no abuse or anything like that. There was no physical abuse or anything like that. It was not a good environment, and I was by myself a lot. I guess, over time that led me to be very comfortable by myself and making decisions and not waiting on people or events to take me to the next step. I mean, I think that drove me. It didn’t drive me. It was an underlying message, underlying, I don’t know, motivation to just go seek out and cut my own path.
I’m not one of these people – I work for large companies too over the years, and I don’t have any complaints about them. I’m not like, oh, I’m not working for the man. It actually never bothered me. I loved the places that I worked. I worked with great people. I learned loads. I love learning, so it’s not like that. It’s also that I’m not – I don’t see boundaries in cutting my own path through things, and perhaps it’s because I didn’t have a structured environment as a kid.
Tanya: That’s really interesting. As a mother of three, you have – I’m always thinking about this balance of you want to do everything for your kid and make their life easier, but at the same time, having your child, very similar to your upbringing where you’re not – you’re on your own, and you got to figure it out. You can’t wait on anybody, and you just got to go do it really empowers the child to go out and make it happen for themselves.
Will: I think it can. I can’t say I excel as a parent myself. It’s more difficult now than it was when I was growing up because parents are closer to their children and are more active in children’s lives. When I was growing up, it wasn’t unusual that parents kicked you out of the door. They kicked you out of the house in the morning and say come back for dinner. Go down to the playground and spend the day there, or go over to Johnny’s house, or whatever it is. In my case, it was a little more extreme than that. You have to think, if you can put some level of structure in, they got to go to school or brush their teeth. Yet, let them learn and make mistakes and fall and fix their own wounds. That could be a better way.
Tanya: It’s a discovery process. I don’t think that there’s an answer. Also, one solution doesn’t fit all kids.
Will: Of course.
Tanya: That’s the other part of it. In thinking about Viewlogic and also Innoveda, the companies that you founded and eventually brought public, what was your role in those companies?
Will: Viewlogic was actually my third company, my third startup. Not my third company, my third startup. Viewlogic, I started it off. I was one of the founders. I started off as the VP of Engineering. There were two technical people on the team, five founders. In the beginning, it was writing boatloads of code. It moved to building a team, building a large team, innovating in the technologies that we were doing. Becoming a face to the customers and growing.
I was 24 when we started Viewlogic, and even though I had two failed startups behind me, I barely learned anything from them. As you said before when you fail, you learn your – you might learn one point of failure. They are hardly great teachers. They’re better teachers than successes are, but they still don’t learn a lot necessarily. My role was at first an individual guy cranking out code and moved up to managerial role, building a team. I mean, eventually, I was CEO of the company.
Tanya: Wow! How many people at its peak did your companies have?
Will: Viewlogic had about 750 people when we sold it. This is after it went public. It was about 175 million in revenue.
Tanya: Wow! That is not insignificant.
Will: It’s a small company.
Tanya: I mean, for starting up from nothing. How long did it take you from the time that you founded it to the time that you sold it?
Will: Let’s see, we went public seven years after we found it, and then it was sold another five years after that.
Tanya: Wow! You were involved throughout the whole time?
Will: No, after we went public, I left, and I started two other companies on the West Coast. One of those went public, and the other one of those was actually bought by Viewlogic, which brought me back. This is a very [11:25] trick to play. Then I came back and became the CEO of the company.
Tanya: Managing 750 people as the CEO and moving your way through the ranks, how do you think that you evolved as a leader?
Will: This is around my greatest lesson as a business. I was super fortunate, and people can create this situation. I happen to fall into it. One of the other founders of Viewlogic was a very wizened guy who took me under his wing to teach me how to influence, how to manage, how to sell, how to be a better person in many ways. Early on, we would be in meetings. I was this fiery kid. I didn’t have control of my temper.
I thought that yelling was the best form of motivation. I mean, when I look back, I blush because I knew so little, and I was such a fool. He would take me aside. I can remember a particular meeting where some people working for me hadn’t delivered what I had told them to deliver. Not worked with them. Not created a schedule with them but told them what to deliver, and I was yelling in the meeting. I sound like a complete asshole, and I was. I was totally an asshole.
He took me aside, and he said, “So what did you get out of that meeting?” I’m like, “I kicked ass. I took names. That’s what I got out of that.” He said, “What do you think they got out of that meeting?” “Motivation, they got motivation.” He’s like, “Really? You think they’re” and walked me through. Then, of course, he had such great style. He played it right back to me as if I was in the other people’s shoes, or I was a fly on the wall.
It wasn’t like a panacea. It wasn’t like he said it once and I was like, oh, I see the light. I fixed my ways. It took him years of therapy to fix me and make me better. He was more than just a good manager and a good coach. He was a great salesperson too, I mean, outside selling in the company, and he taught me how to sell, and sales to me is all about influence and management is all about influence. I brought the two together because of him, and I think became a substantially better manager. I believe that to be true.
It led to what I think is the core of all of my subsequent successes, which is I was able to build a great team. It sounds like such a platitude, but it’s absolutely right, a great team that worked unbelievably well together through hard times, through easy times, made a lot of money for – we made about $4 billion for our investors, almost all with the same team. It all fits together. It’s all a continuum and all started off because I had a great mentor, a great coach right next to me teaching me how to be better.
Tanya: Having a great mentor and a great coach that has the foresight to pull you aside and just be straight and communicate to you in a way that you’re able to see the impact outside of your own head that your behavior is having on a team is a gift.
Will: It’s a gift.
Tanya: It is such a gift, and it’s a talent that not a lot of people can do. What is your leadership approach?
Will: I don’t know that I – it’s probably worthy of a book. I mean, not in value but in quantity.
Tanya: Yes, your next book.
Will: Yeah, my next book, yes. I mean, it’s a – I believe I’m a very cooperative leader. I don’t make plans for other people. I make plans with people. I vary my level of involvement with them depending on what they need and how they’re performing. I don’t have one fixed way of managing individuals. I don’t hire people who are just like me. I hire people who, like a puzzle, fill in my holes. I want little overlap. It’s impossible not to get some overlap, but I want people who have skills and abilities and points of view that are different from mine. That’s at the core.
I want my whole team – my core team that I work closely with, I want to fit together like a puzzle that creates one incredibly great human being. If you have everybody in the room in this complete overlap, you’re going to have anarchy, and it’s going to be a mess. If you have no connection between anybody, there’s no overlapping skills, or wisdom, or knowledge, or beliefs, then it’s going to be too much of a stretch. People aren’t going to bond. You need enough overlapping of those things to hold everybody together. Yet, in this Venn diagram, plenty of stuff that’s outside of the overlapping intersection that pulls the group and makes the whole group larger. It makes everybody better.
Tanya: In speaking about your thoughts on team and having the right ingredients to make this harmonious team, what percentage do you think a team plays in the success of a company?
Will: It’s interesting. I’ve been thinking a lot about this exact point. I think it’s the single most important thing, but that is not why – I am not affiliated, but CB Insights, who I follow, they make a lot of data public. All startups should subscribe and even for their free stuff. CB Insights did a postmortem on, I don’t know, a couple hundred failed startups. This is fairly recent, in the last six months. They found that 40-plus percent of them failed because of lack of product market fit, which is, to me, ridiculous. These companies probably shouldn’t exist anyway because there’s no reason to fail for product market fit reasons.
Number two was couldn’t find funding. My guess is most of those didn’t deserve funding. Number three was couldn’t build a team, and then the rest drop off very quickly. I think nobody teaches. There are lots of incubators, lots of accelerators out there that say, oh, this is how you find product-market fit, and most of them involve raising a boatload of money and then going to find it. I think you find it before you raise money. They’re taught at least it’s there, and it’s available. A technique for finding product market fit is readily available for startups, but nobody’s out there teaching how to build a team. It’s the cornerstone.
Just a little story, this is fast forwarding to the end of my time with these companies that you mentioned, the end of Innoveda when we were selling it. We had gone public, and we were subsequently selling the company a couple years later. I was the CEO. I was toast. I was burned out. I couldn’t get up in the morning. I needed a break. Badly I needed a break. The company didn’t have a hiccup without me. I mean, it’s not – I showed up, but I was barely functional.
Tanya: The physical and mental state at that point of just being burnt out, was that just straight up stress and putting in an insane amount of hours?
Will: Yeah, that’s what it was. I had never suffered burnout before, and it was shocking to me. I was one of these – I am one of these people who always think I can outwork anybody. I’m not the smartest guy in the room. I never am the smartest guy in the room. I’m pretty sure I could walk a room, and I could say, well, it’s not working. That’s all. Until that happened to me and – I couldn’t stay awake long enough to – I mean, it was just – it was a miserable time. I rebounded pretty quickly, but it was a couple of months of tough time.
The company didn’t have a hiccup. The team just melded around me. We didn’t even talk about it, really. We did a little bit because I brought it up, but everybody else was like, no, it’s okay. That’s what team is here for and made everything work.
Tanya: What do you think was at the core of your success in putting together that team?
Will: I won’t say I’m not egoless. I’ve got a fairly substantial ego but my ability to dynamically subjugate my ego. It’s okay that they know more than me. In fact, I love the fact that my team knows more than me. I love that. That’s great. I don’t have to be right all the time. I can sit in a room, and I can make a statement. I can be declarative, and I can say this is our direction. My team can talk me out of it.
You have to be rational about it. Just because you hold the title CEO does not mean that you are the one, the only, the leader, and everybody tucks in right behind you. If your team is good, they’ll push back, and they’ll push back because they know you’re receptive to them pushing back. It’s critical to a degree.
Tanya: Yeah, Ray Dalio talks about this triangulating and, really, the positive outcome that occurs when there’s different perspectives and, obviously, having subject matter experts but people that can have different points of view. Very similar to what you were talking about where you’re putting together a puzzle. There’s not one view in life or one approach. I mean, the best solutions come out of a tough and intense discussion but within the context of being able to or being committed to really surfacing the absolute best solution versus who’s right? Who sounded good? Who looked good? Who was smarter? Like a pissing contest.
Will: Which is usually what happens.
Tanya: Which is usually what happens, unfortunately, yeah.
Will: Yeah, I mean, it’s not only up – I mean, the CEO clearly needs to lead in this case or the leader of the team, whatever that’s at, but you have to hire the right people to fit in those roles and then train them. Everybody needs to be trained. Everybody needs to be trained in how the team works and how to fit right correctly within the team. These people when you hire them have to want to fit into a team. Not everybody does. In fact, I guess in my experience I find that the vast majority don’t really care about fitting into a team.
Tanya: Yeah, and I would actually argue that one of the most underutilized resources in organizations whether it be startups or large corporations is people training. It’s like we take communication and listening for granted because we have two ears and we have a mouth. We think that we do it very well, and we practiced all our lives, and that’s what we do. We communicate and listen. Actually, when you go down to the very fundamental parts of those exercises, we don’t listen. We have preconceptions that we then mold people’s communication into, and then we make it about us. At the very core of any organization is people who speak and listen, and that’s something so fascinating to me is the quality of the listening and speaking in the organization has a direct impact on the output of the company.
Will: Totally, that’s totally related. It’s highly, highly correlated. In fact, I go as far as to say it’s actual cause and effect.
Will: It is.
Tanya: It is cause and effect. Why do you think that? People are really starting to clue into that. The same way that people invest in training their people and sending them to all these informative expert, industry expert, or whatever necessary training, they need to train their people in speaking and listening. Have you seen organizations do that successfully?
Will: Yes, I have. I think most of it, though, is – I mean, you can sit people in a room. You can tell them the value of this stuff, and they become more aware of it, which is a good thing. I think really to become good at it, in terms of training, it’s almost a one-to-one thing. You almost need to find what I fell into, which was essential – I mean, we never thought of ourselves as a coach and a coachee. I don’t know what you’d call the other person. Someone who can do it dynamically, I’ve used this term dynamic several times in this, who can reflect back and say so why did you push so hard on that? Did you have some cognitive bias towards something that you had to stick with? Was your ego tied up in that? I mean, I think training – I think broad training in this sense – I’m a great believer in training in general, but broad training in this sense probably makes one aware that it’s an issue, which is great. You can move far on awareness, but fine-tuning requires openness and feedback.
Tanya: Yeah, absolutely, and actually, somebody that is trusted. I mean, your situation with your mentor is not everybody – it’s not common.
Will: Yeah, totally.
Tanya: Yeah, that was really amazing. I’m wondering what was the single most important or difficult challenge that you faced in your life.
Will: I mean, keep in mind I’m a guy who doesn’t really look at challenges. I don’t focus on challenge. To me, it’s like looking at the night sky. You can focus on the vast majority of black, or you can focus on the pinpoints of light. I’m a guy who only ever sees the light, and I don’t take credit for that as some – I climbed to the top of a mountain and found a guru who taught me to focus on – it’s nothing like that. I’m a black and white person. I don’t deal with gray well, so I ignore the gray. I generally ignore the black too. Go at your own peril because understanding that there’s black there and being able to read the black is super important. I tend to stumble over it. I’m not good at the black.
With that said, there’s a caveat in terms of things. I mean, I think – what I’ve seen in other people that I haven’t experienced myself is a very innate fear of change. I think this is – when I talk to startups about just baseline hiring, we’re not talking about hiring for a C-level position or even a managerial position. If you’re just hiring your first employee who is going to – first non-founder employee who’s going to come onboard and do something, what’s the key thing to look for? The most important thing is that they love change. It’s not that they accept change.
They have to want change. They have to just be jazzed by change is happening. Oh, we’re changing strategy today? Yes, I’m excited! Let’s do that. I have to throw away everything I just worked on? Yes! That’s exactly what I wanted. When you find those people, those people lead to success, and I think that’s true for founders, for entrepreneurs in general, for rank and file employees in any company. If the more people like change, the faster they move, the less bogged down they get because change is inevitable. It is inevitable.
Tanya: It is, but most people don’t like change. How do you sniff that out early on, or can you?
Will: Yeah, I think you can get close. It’s an interview problem. It’s one of the many interview problems that you have when you’ve got a stranger in front of you, and you’re trying to figure out deeply who they are. There’s only certain things you can do. I think there’s questions you can ask that help you understand. You can set situations up for them. You can ask about, okay, did your – where you last worked, did anything ever happen that caused you to be angry with management? Were there changes made in the environment that pissed you off? Somebody says, oh, man, they changed their healthcare plan, and my copay went from 25 to $27, oh, my God. Then you’re like, okay, well, this is…
Will: Right, so of course, you can’t say – you can, but it doesn’t work very well to say how well do you adapt to change? Everybody’s playing the game.
Tanya: Can’t lead the interviewee.
Will: Exactly, but I think there are plenty of questions you could ask theoretical and actual of their experiences in the past and get the idea about change. No guarantees.
Tanya: You are an active angel investor, right?
Tanya: How many investments have you made so far?
Will: A little over 80.
Tanya: Eighty, amazing. One of the things that I was curious about is, of your 80 portfolio companies, have you been able to detect patterns of success or really strong leadership within the leadership teams?
Will: Yeah, I can’t say that I’ve ever – I’m an early stage investor, so once in a while, you run across a team or individual who really wows you. Most of the time, they haven’t learned yet. It’s all the techniques we’ve talked about already. You do find people who clearly have their shit together. Their ego isn’t leading them, and that’s probably the biggest indicator. Someone who uses I in every sentence in an entire presentation when you first meet them is probably not going to work out. You prefer we. You prefer people talking about their team and what their team can do as opposed to what they can do.
You can easily see – I’m not a big idea guy. I think ideas are basically a dime a dozen, and so I really don’t care. I care what your idea is only in the sense of what market you’re going for, but I really care about execution, your ability to execute. A good team is going to way – two people execute way more than two individuals, can do – a two-person team can do way more than two individuals. Those are the signs I’m looking for. It’s we can do this together, my skills of my partner or my partners, or as I said, there’s a Venn diagram here. We have a little bit of overlap, but we’re all different. We’re not just a group of engineers sitting around a table, or a group of marketing people sitting around a table, or sales people sitting around a table. Those kinds of things are good starts, but they’re just starts. They still all need to be coached.
Tanya: Yeah, no, absolutely. One of the top VC funds and I’m forgetting the name now, it has specifically allocated 1% of all the capital that it invests in their portfolio companies to get coached. It makes so much sense. I mean, if you’re leading a company, you are dealing with so many different facets of yourself. You have the industry vertical expertise. You need to manage people. You need to deal with investors. You need to get out of your own way and push your boundaries far more than if you were just an employee, in most cases.
A lot of founders deal with either what you were mentioning, which is you just get burnt out because you are nonstop, or in some cases, I’ve had many conversations where founders who are tenaciously obsessed about getting product market fit and really scaling the company carry on way too long than they should have and keeping a space and a company and raising capital in a venture that is really – doesn’t have any legs, but they can’t see that.
It’s tough. It’s really tough to see that line where you’re just continuing a little bit more. You’re going to get results versus this is just not going anywhere. You have these two situations that really lead to a mental state that takes something to push through.
Will: Yeah, absolutely. I’m sympathetic to the problem of not being able to give up. I have done that myself. It’s very hard to give – I mean, if you’re a positive-driven person, you think you can turn it around. So from the entrepreneurial side, I get it because I’ve done it. From the investor side, I also understand it, although I would like some of these guys to pull the plug quicker because it could actually save capital and energy and so forth. Then like you say, there’s a dichotomy of also the other side of things, of are they investing in the right things? You get a pattern. I’m certainly not the top angel investor in the world here, but probably after 30 or 40, I was getting the pattern you get to see pretty quickly. With 90% thing, these guys are going to make it; these guys aren’t going to make it type of thing. It’s a lot of the stuff that you’re talking about. They’re not interested in learning how to build a better team. They’re not interested in becoming better managers. They’re blindly driving the company forward.
Tanya: What do you think were your misconceptions of leadership that your experiences have clearly debunked?
Will: As I mentioned, I thought brow-beating was the best form of leadership. I’ll emphasize the fact that in my story, I went into it with eyes closed, tightly shut. I didn’t understand even that management and leadership, which I believe are different things, by the way, were things you needed to learn. I didn’t see them as important skills. I would say to answer your question, the first thing I learned was that they are really important skills. I would’ve assumed oh, I’ll just read a book. They are the toughest skills to get, and it took me years, even after I was becoming a better manager, to recognize that management and leadership are not only different but they’re not even completely parallel skills.
You think of a guy like Steve Jobs who was a legendary poor manager but a fantastic leader. You’ve got great managers who you never hear about because they’re not open, great leaders. It’s actually difficult because some of leading is a little pie in the sky. Some of it is here’s the dream; here’s the direction. We can’t see the horizon, so you’re going to follow me to that point because there’s no [38:17] of success on the other side. That’s leadership. Management is really no, here are the steps we’re going to take to go in this direction. Here are the milestones we’re going to hit; here’s how we’re going to check if we’re going in the right direction. You can’t have the same – it’s not the same set of skills, and it’s not even the same people, to a great extent.
Another point about a team is in a team, you need both things. Often they’re not the same people and not even the same message.
Tanya: Nope and both are intangible. It’s difficult to really calculate. Most people don’t know the distinction between those two, by the way. That’s number one. Yes, you’re right; one is paving the way and the other is figuring out how to build the road to get there.
Will: Well put, yep. That’s a great [39:13].
Tanya: So what is at the source of your learning? Where do you go to really grow and develop yourself?
Will: I’ll limit myself to – there’s a lot of people who consume a billion business books, and I think there are some good business books. I find that I have trouble reading business books that are written by academics or people with a vested interest in me reading the book, which is the vast majority of books, business books. In fact, when we wrote our book, that’s one of our points of view is that we’re company founders. We have nothing to sell you, and we’re just going to share decades of experience in doing this. That’s all we’re doing. This isn’t a thesis. We’re just throwing facts down on paper. Those are the kind of books I like to read. Of course, that’s why I’m just like that. It actually limits the number of books you can read.
I like to find myself in places or put myself in places where I meet new people and have face-to-face conversations and open the opportunity to learn about how they made decisions, how they did things. I mean, podcasts and vlogs are just a fabulous resource for doing that now because it’s just impossible to meet a thousand people a year. You can certainly listen to a thousand podcasts and learn from what other people have experienced.
Going back to confirmation by sometimes that stuff just backs what you already believe because it’s easy to select, pre-select what you’re going to learn. If you keep an open mind, again, it’s about being ego-less or ego-minimal; have a minimal ego. I don’t think anybody can be ego-less and be open to things. You find the meta-shock of saying how is it that after all this time, I didn’t know that? How is it after all this time that I never had that experience? That makes the learning that much stronger.
Tanya: There’s something about learning versus discovering something for yourself that I find is very interesting. Learning, you can read a book and you can hear something or listen to something conceptually, but when you are discovering it for yourself, man does it land differently.
Will: That’s so true. Wind that all the way back to the kids learning thing. You can tell them that hey, don’t touch the pot; it’s hot. They’ll listen but one day, they’re going to touch the pot and burn themselves and never do it again. For years at my companies, we always would have a week, a full week, of new employee training. We had lots of written stuff, but we always had – they came in the first day. They didn’t sit at their desk. They went into a room with the other new employees and we talked about mostly culture, because culture was absolutely the most important thing because it’s the guiding thing that tells everybody what to do when they’re not following the rule book We also introduced them to all the executives in the company and all the managers in the company and the policies and the way we think and did things.
One of my little things that I would always do is tell the story, the Carl Sagan story where Carl Sagan the astronomer would say if you tell somebody that there are billions and billions of stars in the universe, they’ll nod their head and they’ll just believe you, but you tell them that there’s wet paint on the bench and they’ll lean over and touch it to find out. We can give you the guidelines here, but we want you – we know it’s deep inside your core to lean over and touch the wet paint, and that’s okay here, but just make sure you learn that when we tell you later that the paint is wet, eventually you believe us and you don’t have to touch it anymore.
Tanya: So Will, you said something that was very interesting and that is culture is the guiding principle when people are not following the rule book. How did you set your company culture, and what are the elements that go into really bringing this company culture alive?
Will: You can set your company culture, but you lose control of it pretty quickly. Maybe when you get to 30, 40 employees, you’ve done all you can for company culture at that point. That’s wrong. The classic Jack Welsh, four-quadrant thing where you actually get rid of your best performing people who aren’t culturally aligned, that sends a huge signal to – which I believe in totally, by the way. One of the hardest managerial moves you can do is fire your best performing people because they’re not culturally aligned, but it’s also the biggest, best signal you can send to the rest of the company. You’ve just given up the best daily contributor to back the culture. Sorry, took that down a little tangent there, but I think that’s [45:25].
Tanya: No, that’s important, and actually that’s one of the things that I dealt with as a leader. We had one person that was just creating hiccups with everybody else, unintentionally, really, and people just didn’t want to work with that person. It was brutal. They weren’t delivering. Everybody that’s run a business has bumped into that at some point, for sure.
Will: Obviously you try to work with those people to make them aware of why they’re not culturally aligned, give them a chance to come around and teach them, but you only give them a few strikes, maybe only two, and then you cut them. Actually, in cutting them, to my point before, you send the strongest cultural signal you possibly can to the rest of the organization. There’s way more positive in it than negative in doing that.
To go back to it, you lose control of it, but that doesn’t mean you can set it at the beginning. Culture is just a set of ethics and core beliefs, perhaps some operational ways you do things. Deep in my culture at View Logic, we had a direct selling organization. We were on the road, a lot of people on the road all the time. I believe that paying people on expense reports very quickly was absolutely key to showing the value of their extra effort for the company [47:01] the fact that a day on the road is not equivalent to a day in the office. It is much harder. It’s much more of a stress on families and even if you’re single, on relationships and recognizing those kinds of things. That’s structural, and there are structural things you can throw into the culture It’s really about things very broad set of beliefs and ethics that are really important We are open and honest. We value the truth. We value people admitting their failure Quickly admitting a failure is a big one. We value you picking up the phone and calling a customer, being proactive and being involved.
Really, you can only have six or seven of them, so they have to be big, chunky, directional things. If you choose something like you should smile every time you come into the office, which is bullshit anyway, but if it’s something little, you’re just not getting out. They have to be directional. You get those things and really, it should be the group of founders, maybe the expanded team if it’s the early employees that come in, and sit down and really talk about it, just don’t let it go out of control. You’re not only the creators of it but you own it. You need to mold it into the form that’s applicable. Then you hire to it.
The most important thing that you can then do is use it as your primary hiring guideline. Sure, there are things that are absolute skills that you’re looking for, but don’t just shop for those skills. Okay, you’ve got those skills. Do you fit into the cultural guidelines?
Tanya: Will, once you lost control over the culture, did you ever get yourself in a position where you realized the culture in your organizations or your companies was not exactly what it should be?
Tanya: What did you do? Once it moves out of that founder and maybe direct reports stage where you really can set the tone, what do you do when it’s bigger?
Will: I’ll give you the exact case, and I’ll just fast-forward to the end. I couldn’t do much about it. Now, part of the reason I couldn’t do much about it was it wasn’t a terrible thing, just something I didn’t think was sustainable. Somehow along the line, we hired some managers that were super into process. I actually believe we did it because we thought we were weak in process, so we were trying to fix a problem. What happened is it bogged the organization down. I don’t think we were a free-wheeling, fast-shooting, drive-drive-drive place anyway, but we were variable. We would do things as fast as you can type of environment as opposed to with our hair on fire. We brought in some process people to maybe change the culture, I guess. We didn’t think of it as cultural at the time, but it became cultural. We became uber process-driven, ISO processes and industry standard; let’s judge ourselves against – at the time HP was promoting these software standards. Actually, there were some international ones, as well. Let’s adopt those.
Sometimes the problem is hard to see coming. You’re like yeah, actually that’s probably a good selling tool for us. If we conform to these standards, then we can probably go to our customers and say you get better software because we conformed to these standards. In the meantime, lacking the idea that that’s also product – or the recognition that that’s also product market fit – do your customers actually care? Do they care? Well, you’re going to get your stuff slower, but it’ll be better. In fact, nobody really pays for slower and better.
Tanya: No, they don’t.
Will: Faster and good enough. That crept in and really, I don’t know that we ever got it out. We became a more plodding organization. I don’t think it was a death nail for us, but it was painful to watch. I thought I could turn around – this is actually the occasion where I learned that you can turn your own culture sometimes. I went to all the top managers of the company. I said, “Okay, we’re just moving too slowly.” We just couldn’t seem to move. I don’t know. It could’ve been a deficiency of mine, too, that I couldn’t make a change.
Tanya: Setting company culture and leadership are those two intangible things that have such an influence and that fascinates me, frankly. We worked with a number of companies in the consulting company that I’m a partner at. We’ve worked with a number of different companies that are mid to large market cap companies, so big-sized companies. This is way beyond the founder’s stage. It takes years to really get at the core of realigning people on an organizational direction and vision that they are totally bought into where trust is established in the organization and only from that new vantage point is a new culture born, so to speak. It takes something to disrupt that.
Will: Yeah, that’s an excellent point and probably something I didn’t understand at the time is that you need to start again. It’s not quite that bad, but you need to disrupt it in some form. Often when you have that, the disruption comes managerially. You can’t change the stuff going out to your customers. They’re buying something; they expect something; they expect it in a certain way. It’s an internal process thing, which is all driven, again, by the team. It’s one of the reasons team is so important. When you get the wrong team, to your point, how hard is that to fix.
Tanya: Yeah, it’s hard. Will, one last question and that is if you could give one piece of advice, one business piece of advice to your younger self, what would it be?
Will: Only one? That’s all I get?
Tanya: Only one, that’s all you get.
Will: I don’t know if I can boil it down to one. I’m not that way.
Tanya: Okay, give me two. Give me what you got.
Will: I’ll do my best. I would say not being an asshole would’ve been number one, but actually being an asshole and having a coach around is probably the most important thing that ever happened to me. If I was okay, maybe I wouldn’t have had the opportunity to really learn. I know this, again, sounds like such a platitude, but don’t focus so much on ideas; focus on team. I think that’s really what I’ve come – the core of everything that I believe if I look back, that made me successful and causes failure, created failure when I didn’t follow those things. I got too caught up in an idea and not enough on the team. If you can do both, that’s great. In the end, though, it’s all about how you execute, and I didn’t understand that originally. The better you can execute, the more successful you are; the better team you have, the better you can execute.
Tanya: Yes, and one of the things that you said earlier that I really loved is two people’s output doesn’t compare to two people on a team’s output. One plus one does not equal two when the team is really powerfully matched. It’s exponential.
Will: Yeah, the sum of the parts is way less than the sum of the whole. It goes up exponentially. It goes up fast the larger the team you have.
Tanya: Thank you so much, Will, for being on the show. Amazing knowledge and your life experiences have been such a gift for our listeners today, really.
Will: That’s very nice. It’s been a blast. I appreciate the time.
Tanya: Thank you.