Startup Therapy Podcast

Episode #15

Ryan Rutan: mm hmm. Yeah. What if I told you that growth isn't always good or that growth doesn't always make a startup better or that often our focus on growth ends up running counter to what our goals should actually be improving our startup, not just making it larger as founders, we can become so distracted by

Wil Schroter: growth that we

Ryan Rutan: forget to ask ourselves. What about the growth actually matters today on the startup therapy podcast, we're going to talk about why the focus should be making our startups better, not just bigger

Wil Schroter: so

Ryan Rutan: well as a company, we've grown a lot, right. Startups. Dot com has grown significantly in the last seven years since we started this thing. But when you're talking about the company, like is that where you go to first, is that what we're most proud of? Is that what you're most proud of is the growth?

Wil Schroter: You know, it's funny you should say that because in a lot of cases I don't even bring it up. You know, when you start talking about like the different aspects of the company, the first thing that comes to my mind is everything but numeric growth, right? I mean that just seems like outright by comparison because so much of our effort goes into so many other aspects of building the product and increasing the culture and everything else like that, Just saying, Hey, we grew 50% or 100% or by millions of dollars, etc. That's cool. I mean it's great. But it just, it doesn't feel like that's the the entirety of our experience, you know what I mean?

Ryan Rutan: Sure. Yeah, Well let's talk about that for a minute. So it's and it's not that we don't care about growth, right? Obviously we care about growth. Um, but I think that having a healthy relationship with what what grows and what needs to grow in order to improve the business is an important discussion to have. But before we do that, let's, let's talk about, you know, the fact who does care about growth, you know, in your opinion? Who does growth matter most to?

Wil Schroter: It was funny as well because after we talked about that and I'm like the people I'm trying to grow for the people I'm most focused on in Ryan, I'm pretty sure I'm speaking for you in this case as well, are people like are the team, the people that actually work here, the people that pour their heart and soul into this company and try to create the things that we care so much about. I want to see, you know growth within how our customers relate to our product. Right? Is it a better product? You know, you could be a bigger company and still have a ship product. I mean look at Microsoft for years.

Ryan Rutan: Right? Um still,

Wil Schroter: yeah, I mean we won't talk about, you know, Windows eight at all or not

Ryan Rutan: nine,

Wil Schroter: but being able to grow for our customers and our product is geometrically better than it was last year. That's really important to me, right? Or the partners, the people that we actually sit down with and say, look, we're going to be a great partner for you. We're gonna build together over time. Uh, you know, are we better partner? Are we fulfilling on those promises?

Ryan Rutan: Sure. So you're you're talking about quality then? We're not talking growth. Now, we're talking about quality. So you're talking about this is what we want to focus on and and we want to make sure that, you know, we're we're building something of quality. It's a quality environment for the team. It's a quality outcome for the customers. It's it's quality interactions with partners. So what's the inverse of that? Who who strictly cares about quality? I mean, who who strictly cares about growth? Rather sorry,

Wil Schroter: growth. Right, Well Not people that don't matter. So I so I don't want to take this off the table. But you know, investors care about growth, they put money and they care about that. You're 100% bigger than you were last year. Right. You know, I get that The media cares about growth. Try calling techcrunch and say guess what? We've grown 0%. But our culture is so much better for you. Um, you know, and and then I hate to say it, but it's got to be in the back of our minds. It's kind of that sewing circle of other founders, right? It's this it's this cocktail party where you're sitting there? And some somebody says to you, so how is your startup doing, how's it growing, etcetera, and you want to say insert biggest number that will impress them, whether you think that you care about that stuff or not, I have to believe it's stuck in the, in the back of a lot of founders mind. So, so by virtue of that, caring about growth numerically,

Ryan Rutan: okay, yeah, that makes sense. And it's it is a bit of a currency within, within that space in particular, right? It's the it's the cigarettes in prison version of the startup culture, right? It's we trade our stats around and this is what gives us street cred. Right?

Wil Schroter: So, but but the the sorry, I was gonna say the problem though, is the conversation is often in the wrong place. Like I think it's once again kind of a broken narrative that the only growth that matters is numeric growth. And while I don't want to say numeric growth doesn't matter, because I don't I don't think that's true. I just think that's a small part of the equation and you know what I'm hoping we can kind of dig into today is maybe growth

Ryan Rutan: actually just

Wil Schroter: isn't important to your startup maybe from a growth standpoint, you're as big as you need to be, right? And I think there's there's a lot of merit in that discussion and I think it never gets talked about, you know,

Ryan Rutan: it's sort of like you're either you're either growing or you're dying, right? It's, it's the publisher parish version of the startup world, right? It's, if you're not growing, then you're no longer relevant. You're not important. Oh, you're starting to fail, right? Not growing. Doesn't mean you're starting to fail. It's a totally different thing.

Wil Schroter: Right? I look at it and I say, why is it okay that I'm a two person company. Like, why if, if I don't get to three people, I should feel some sort of shame or guilt or humiliation that I couldn't make it to three people. Like why the fund does that matter? Right.

Ryan Rutan: Well if you're branding triangle, it might, but you know, other than that, I can't think of a strong reason.

Wil Schroter: I gotta tell you, man, I've seen a lot of absolutely amazing small companies, you know, small staff, small revenue, small, what have you. And what I love about some of them is that they take pride in their size, right? And, and I think nobody has probably exemplified that to me More than the 37 signals. Now, base camp guys, Jason and David, um, who have built, you know, obviously 37 signals, which then kind of really morphed back into base Here's a couple of guys who have built a massive business. And when I say a massive business, not just financially, it does extraordinarily well, a massive footprint and influence for what their businesses have done, reached millions and millions of people incredible And they've been adamant about keeping that business as small as possible. And I can recall a few years back and I'm just getting funny and saying this, I recall a few years back where there was a post that I think Jason and David had put out saying that we're, we're going to basically shed all of our other assets and focus on being base camp. And within the post, it had one of the best lines ever. But I'm going to preface this by saying, I email David when I was writing this article and before we're gonna do this podcast and I said, hey, you have this amazing quote, can you just give me the exact quote? And I gave it to him? And it was quote, Harvard doesn't try to be the biggest university, It tries to be the best university. And they were saying they're not trying to be the biggest, they're trying to be the best. And David wrote back, he's like, I've looked everywhere. I can't find that quote

Ryan Rutan: anywhere. David, if you're listening,

Wil Schroter: you're getting credit for the quote. Whether you said it or not, it was brilliant. But but my point is I love that because they nailed the point of all of this, that I want to be the most quality company, not just the biggest, you know what I mean?

Ryan Rutan: Yeah, size should be relative to the need for size to drive the outcomes. You're trying to drive, right, Like there's there's, you know, just growing for the sake of growing, there is no purpose to that, right? That's simply growth, right? Getting bigger doesn't mean getting better and certainly getting bigger without getting better is a massive issue. And I think that that's it's interesting and I know that both Jason and D. H. H have touched on Some of these things within is that it's something that they've talked about significantly right? And it's not just that article wasn't just a point in time thing, this is a recurring theme for them around why they've chosen to kind of cap themselves at 50 people certainly, you know, within within culture as you grow as the team grows, you start to magnify the good, you also start to magnify the bad and I think that generally speaking something that's forgotten is that you don't get to pick which parts grow. Like as you start to grow the organization, it all grows, you start to exponentially increase any inefficiencies that you had, any any challenges that you had culturally will become magnified, they will become bigger. Um So it's not just the good bits that grow, it grows all together. And so I think that there are some points in time where you can deliberately decide, like look, we can actually achieve what we need and want to without simply getting there through growth and it may be that growth is one path to that outcome, right? You're talking like top line revenue, maybe maybe top line revenue is your, is your your metric? And you say, okay, well we have to do is is grow under our current conditions and we'll hit that, we'll hit that goal. You could also say, let's improve quality and and therefore what we can charge for a product. That's the same way to get to top line growth without having to simply grow the volume. Right?

Wil Schroter: Absolutely. And you know, I can remember a few different instances where I've seen both sides of the equation where growth wasn't necessarily A good thing. And I remember back in 2007, if I recall, I was doing an interview with Craig Newmark from Craigslist And at the time, Craigslist was like 32 people, they were famously small And at the time I think they were a top 10, if not top 25 site on the entire Internet, Right? I mean, unbelievable in in Printing money, right? I mean hundreds of millions of dollars, right? And I remember asking Craig about the growth and I said, I mean, I'm looking at the other companies that are on the list of the top 10, top 25, whatever it was at the time. And I said all of those guys have the same number of people with a bunch of zeros behind them, right? Yeah, who was up there with them and they had like 10,000 people at the time, and I said, I've got to ask, you've got the revenue, you've got the size, you've got everything, Why the hell are there only 32 people there? And he just had such a simple answer. And it always stuck with me. He said, well size equals dysfunction into your point. Ryan. The more you grow, the more you grow your dysfunction with it. And I remember thinking, I was like, that's such a stupid simple answer in the truth to it is just mind boggling. And I thought to myself, growth is a cost. And with that, growth comes the cost of culture, the cost of control, the cost of a lot of things. Right? Often the cost of quality of your product etcetera doesn't always get better. And are you willing to sacrifice that? And I've been amazed at the folks that haven't been willing to sacrifice that and and really stick to their guns and I have so much respect for that.

Ryan Rutan: Okay, so you've got companies like base camp, you've got companies like craigslist saying that, you know, growth isn't always good and that, you know, growth can, can actually be cancerous and it can increase dysfunction. Let's talk a little bit about where that manifests itself within the company.

Wil Schroter: Okay. Sure. I mean, I've seen it firsthand, my first company Blue Diesel, you know, was an agency within the first few years we won a huge huge account, pharmaceutical company of all things called eli lilly. And when we won that account we're maybe 40 people. But after the account we needed to add 250 people in the first year, you know, so we grew many times our size literally hiring a new person every business day. So we went from a small, capable nimble company to a not small, far less nimble, reasonably capable company in a year. And you know, and so what did that actually look like? That looks like me getting on the elevator With eight other people who, I didn't even know who they were. They knew I was because one of the people that signed their checks but not even knowing who they were. So culture goes to zero, right? I mean it's horrible. It goes from being able to literally get everybody in the room and say, okay now we're all moving left today to having to schedule a meeting, to schedule a meeting to get everybody kind of in a room with their managers and mid managers to get the message out. I mean brutal. Right? In a year Rhyme? In one year we went from one company to this other company. We were bigger. We were making hundreds of millions of dollars more. That sounded cool. But it didn't make us a better company. You know,

Ryan Rutan: it made you a different company. Right? And I think that's

Wil Schroter: the point And I didn't hate it. I mean it sounded like that's what we were supposed to do, but I gotta tell you, you know, it, it didn't feel better, like I actually started to hate my job a little bit, you know, I enjoyed my job when I was part of the creative process, I hated my job when I was just a manager. Now that's personal. But dude, if I felt it, I'm sure other folks felt it and

Ryan Rutan: it's such a common issue though in the, in the entrepreneurial space, right? As founders, we often start the business because we're passionate about the work itself and then at some point you you eclipse that that ability to just stay on the work and you have to start to work on the business instead of in the business. And it's a different thing, right? And and it, it can become a very different role and we've talked about this in another another discussion. But um yeah, it's, it's funny, you know, we talked about the peter principle within individuals, right, which is to say that you get promoted to your highest level of inefficiency alright. You start out as a dishwasher, you're a really good dishwasher, they make you a line cook, really great line cook, they make you a sous chef, you're a really great sous chef, they make you a chef, you're a really great chef, they make you a regional manager and you're like what the funk just happened and now you don't ever get promoted anymore and you're now stuck in a job that you're not good at and don't like, but I've never heard anybody talk about the peter principle in terms of company size, which, which the same thing can happen, right? You hear about it and, and we sort of know what happens that you grow to a certain point and either culture or something else begins to become problematic implodes and then, and then there's a downturn or the company goes out of business. I can think of a lot of examples funnily enough, a lot of them are our restaurants, right? Great local restaurant, really well known, really well respected, great food, great service, great, great, great. And then they're like, wow, this is so good and so easy. We should open a 2nd and 3rd 1 and then a year and a half later they're all closed. Right? And they all go away And it's that, you know, there's a reason there's that there we talk about growing pains, right? This is the manifestation of those

Wil Schroter: Ryan, I think you touched on something really big, which is lots of folks that are gonna be listening to this are thinking about adding more people. They're gonna be thinking, I need to grow right? Like if I'm a good founder, if I'm a good entrepreneur, I need to add more people, I need to add more growth and, and while that seems to be a default state, do you right And let me just let me just please. You know I'm not, I'm not anti growth here right at all? But what I am is anti growth for the sake of saying you're growing right? Without a rational

Ryan Rutan: argument. Again, adding 20 people to your head count so you can flex your head count. Probably not the right reason to increase your head count.

Wil Schroter: And you know this is this is us eating our own dog food. We have exactly 171 people on payroll at Right now. You and I will go back and forth for hours, days, weeks of whether there will be 172nd person, right? And the preferences that there's not by the way, right? I mean our preferences, how how can we be most efficient at the size we are now in the same way D. H. H. Was saying, hey man I don't want to hire a 51st person, we're on a hiring freeze. They have all the money in the world but they don't want to be a bigger company right? They don't want to be a different company At 170 people. I mean boy that's a fair amount of people but to be honest it's right around the size where I still feel like we can kind of get everybody on the same page within a few hours and steer the ship. My fear is that as we grow beyond that, you know in size and ability to move that we lose a lot of the connectedness that makes us who we are. Does that mean we'll never hire the 172nd person? No, but it means we're not going to hire him just to say we're growing. Right, correct. I also think that forcing ourselves to look inward every single time we want to grow and say, is this the most efficient version of ourselves? Is it's just healthy?

Ryan Rutan: It is you have to, I mean, we we can't forget that the growth is actually predicated on success at all these other levels, right? It's, it's the quality of the product, it's the quality and and, and culture of the team. Um, and so you, you can't sort of say, well we'll just grow and and put those things by the wayside. Now, you can do that for a period of time and, and then that will start, you'll start to rot from the inside, right? And then, you know, the growth will no longer be sustainable. The, and, and, and maybe not even, you know, as you've hit new new plateaus, new baselines for performance, Those might not even be sustainable, right? As you start to lose culture, lose quality and there therefore lose customers, lose key staff that can turn around really, really quick. Uh, and you do see that happen, right? We, we've definitely seen plenty of examples of, of companies that went from rocket ship growth and it literally looks like the ball from pong when it hits the other paddle right, It just literally an immediate reflection in the opposite direction. Um, and I would argue that that is, that's, that's a result of improperly growing and not accounting for the fact that everything scales together and that you have to be careful as you do that to make sure that you're maintaining the same underlying organization that achieve that growth in the first place.

Wil Schroter: Yeah. And I also think that growth is a liability, right? Let's let's let's call it what it is, right? And again, a lot of the folks that are gonna be listening, our fellow founders that are out there are gonna be thinking, man, I want to hire this one more gal, but man, now that's one more mouth to feed every month, guess what it is, It's exactly the liability that you think it is, right? And, and again, I'll go back to the example of Blue Diesel, the agency, you know, we started to grow really quickly. Well at some point a couple of years later We had 10 million a month worth of payroll, Right? 10 million a month of payroll. I mean there is no way to to have that much payroll and not be so worried about it all the time. Right now, here's what killed me. I thought that's what I wanted. I thought, man, once we're a big company and by the way, any of you running professional services business of any type, we all think that if we can just get a little bit bigger these problems of always having to worry about cash flow and payroll will go away. Spoiler alert. They don't they don't get exponentially worse every time. Yeah. And so so I thought once we hit those levels we'd have so much cash coming in that I'd stop worrying about trying to kind of feed the beast. No, it's 100 times harder because now what it takes to feed the beast the size of an agency when we would have to pull down in order to keep servicing that liability is enormous and by the way The bigger you get the fewer of those opportunities there are. And Holy Sh it if you lose one, if you lose a $10 million dollar agency of record account, how hard it is to refill that, how long the sales cycles are and how few of those opportunities there are.

Ryan Rutan: That's exactly there's only so many food sources for an apex predator. Right, Perfect at that point. And then yeah, you just you just run the risk of starving

Wil Schroter: where I saw this kind of misaligned or just not focused and we were a young company with young managers at the time myself included. Point to point the blame at myself um is that we hadn't I guess maybe we just we weren't mature enough as people um to be able to step back and say, what does our growth enable us to improve? Yeah. Right. And so if we were to look at it in current context, Ryan, where you and I are today and as we were building startups dot com, what was important to us, you know, we wanted our growth to enable us to become a better company. And if we had to become a bigger company by virtue of revenue staff, et cetera, that the typical markers so be it, but not at the expense of becoming a better company. So it's probably worth unpacking what was important to us, You know what we looked at as far as being a better company and probably worth starting with with culture because God, we spent so much time on that, you know

Ryan Rutan: what I mean? We did well and it's interesting, you know, as we were talking at the very top of this discussion, uh and we were talking about, you know, whether whether growth was something that we cared to flex as as you know, we think about how our business is doing. I was thinking when we've talked in the past about all the things that we've optimized for, we didn't necessarily optimize for growth. One of the things that we've publicly talked about and we've made and internally it is a huge focus was optimizing for happiness and yes, and and that is culture, right. And that is that is our culture and that's what we try to do to, to improve our culture. So yeah, I think it's a great place to start and yeah, so, so let's, let's go back in time a little bit and and and do some sharing around how we came to that conclusion, like why did we care more about growing our culture than growing our, our footprint?

Wil Schroter: Certainly because we had the benefit of doing it many times with many companies in the past and being conflicted, miserable. Right. Right. And so like even when I was the agency and we were doing well, I was growing increasingly unhappy and so were the people that were working in the company, even though by all outside metrics it looked like we were doing great and we were, so I'm scratching my head being like why are we so unhappy? Why am I still miserable going home every day? And it's because there was no focus on making us happier, giving us more time with our families, allowing us to be able to spend more of the day working on stuff we really cared about versus just ship client work, you know what I mean? Yep,

Ryan Rutan: Yep, now I went through the exact same thing and with, with my agency which never got to 10 million in payroll, but we got to a very painful point in payroll. Um and I just remember like with every additional staff member, that that we added at one. it was a, there was a direct correlation to my anxiety level around making the payroll and, and in a decrease in terms of my, my enjoyment of running the company because every new person we added just made me more of a manager and and less of a creative and it just, it really cost me in terms of my enjoyment. Um and I think it actually drove, it was, it was a huge driver in terms of my decision to then sell the company, I think I could have, I could have written out longer, got more money for it. Um, but ultimately at that point I was unhappy enough to running the company that I was super happy that the idea that I could unload it and take some cash.

Wil Schroter: Yeah, absolutely. And I think one of the things we did a good job of, and I'm, I'm proud that we've stuck to our guns while it was really hard. Um are things like in the formation of the company, we said things like we want a company that enables us to spend more time with our families. Right? Honestly, that's fairly anesthetic at the beginning because time is something you just don't have very much of when we're gonna start up, you know, create something from nothing phase, but we knew that was a persistent goal, right? We knew that being able to free up our time, I was going to be something that our growth would enable. And so I remember when we started out, this is you know, obviously been seven years, but this is a few years into it. Remember when we first proposed doing work from home Wednesdays? Like it sounded like crazy that everybody in the company could just work from home on a Wednesday and

Ryan Rutan: heresy in the startup

Wil Schroter: space. Yeah, it really was. And I remember like there's these two halves of me, one half of me was like, this is the most brilliant, progressive thing in the world, is like the democrat and the republican here on the other side of me was and how are you going to pay for it? Right. Yeah, exactly. For this

Ryan Rutan: luxury and Mexico's gonna pay.

Wil Schroter: Yeah, I can tell you like uh it wound up being amazing for us, right? And now we're to the point where the entire company works from home on Mondays, Wednesdays and Fridays, right? And so what what are growth has enabled us to do is give people more flexibility. It's, it's allowed us to increase maternity coverage and paternity coverage. It's allowed us to offer all kinds of benefits that we were, we weren't able to offer was just too small at the time. Um and I don't know, they didn't even arise by the way ahead of what I think are like kind of bullshit things that people try to do is like, well if we offer more benefits, like free snacks etcetera in a ping pong table, it'll get more engineers to come work for our company. That never occurred to us. Like we were just like who cares about who might come to work for a company. Let's talk about the people who do work for our company.

Ryan Rutan: Absolutely, man. I mean the investments that we've made in in culture have paid dividends and one of the places that I think it's it's paid us back is something that's really important to me which is improving the quality of our product. It turns out when you have a really happy um eager staff who feels appreciated and works in an environment where where they they really are able to thrive in real ways as real humans, not Hawaiian shirt friday bullshit stuff, but real things that actually improve their lives. We can take a step from that point and say let's let's improve on our product and let's make our customers lives better, right?

Wil Schroter: Yeah. Imagine that, right? It's not like any of us is sitting around thinking, oh boy um you know, I really want to buy the the iphone next year because Apple grew 20% year over year, right? I mean like

Ryan Rutan: like that's true. Yeah. I only shop at companies who crushed their metrics.

Wil Schroter: Yeah, exactly. You know, and it's funny because you look at all these companies talking about how they're growing like crazy and raising money and doing all these things and I'm like dude, your product hasn't changed in years, right? Like, like you have a dogshit product, right? Like how is any of you raising another round or, or reorganizing your, your management structure, what the hell of it you're doing? Like you have the same damn product, you know I mean? And I look at huge companies right, that are now kind of legacy companies, yahoo would, would be a flaming example, but um, you know, even Ebay etcetera, it's like, man, you guys have been at this for a long time, you know, you've got a lot of money at your disposal. Why isn't your product any better? Right. And I, by the way, I know I know how dysfunctional those companies get, but isn't this sort of our point?

Ryan Rutan: But that is the point, right? And so when you grow to that size, your ability to change, adapt and stay relevant really becomes an issue, right? And Ebay is a great example of that, you know, they, they absolutely crushed and let's, they created the e commerce market that we know now, like they were a big part of how we had enough, you know, trust in e commerce to, to really turn the corner and start buying lots of stuff online and yet they fell from grace fairly quickly. Um, and I'd say that a lot of that was because they grew so fast, uh, that they lost touch with the fact that a, I think when you hit a certain level of growth, a certain size in the company, but you're too big to fail, right? We've we've all we've all heard that one and know know know how that ends. Uh And so yeah, so I think it's a great example.

Wil Schroter: Yeah, well I think that from both the team itself, right? And you're saying, hey, you know, the product is really important to me um and the team's interest and passion for making it a better product, sometimes you need resources to grow, you need to be more developers, et cetera, I get that. But more often than not, this growth in this kind of internal politicking starts to become the focus of a company. And, you know, interestingly when I was sitting down with with David from base camp, I don't know, it's maybe a year ago when we were both in L. A. He and I were having a discussion about this and you know, he mentioned something to the effect of, hey the reason we're on a hiring freeze is because we don't want to become the type of company that starts to need departments for things. Right? And so I would equate that to once you're big enough that you need an HR department, you might you might not be the company you want to be anymore. Right? And I'm not anti HR department, but just talking about like true administrative functions, right? And a lot of the times uh that kind of growth, that kind of internal infrastructure starts to become the focus of the company. Right? People forget about this, right? When you go to work for a big company so much of your day to day focus is what jim and marketing is working on or the politics issues or the uh the issues we have between our department and the other department or why we can't get budget for what we're trying to do. If you were to zoom out in some of these companies and say, dude, how much time do you spend specifically talking to and or working for your customers in some cases? Ryan, it's 00, right, Because the attention shifts inward and I think one thing that that we've done very well at startups is we've kept our focus outward. You know, I mean there's almost literally no politicking here.

Ryan Rutan: Right. Right, right. And we were flat enough structure that I think it allows that, I think that the minute you start to departmental eyes and silo things, you you run the risk of that happening when finance simply becomes a function of of the numbers, right? When you forget what generates those numbers. I think that becomes a problem when HR becomes solely internalized and you're not thinking about how am I, you know? Okay, I'm solving these people's problems at individual level. Great. Um you know, we're we're doing everything we can for our staff internally, but we forget as we apply these HR policies as we apply um benefits and everything else that we're doing. If we forget how does this enable us to do the thing that we want to do most? I think it's really dangerous.

Wil Schroter: Yeah. And listen, I think with our staff, I don't want folks to be sitting down going, how do I impress my boss? Right. I want them to go and press their customer, right? The founders that we work

Ryan Rutan: with a great way to impress your bones.

Wil Schroter: Yeah. Well, yeah, and then by way of that, I'll be impressed. But but at the end of the day, I don't want our organization to become something where the only way to grow is to get inwardly focused around politicking and one upping other people, etcetera. And, you know, in winning in a meeting, whatever argument you're trying to make like that just it's a huge waste of time. It's not the company we want to be. And my guess is it's not the company anybody else wants either. And yet it

Ryan Rutan: happens. And it does. No, it does. And I think people people lose track of, of focusing on what actually matters and celebrating the right kinds of wins. All right. Like a promotional, that it's it's a great win, right? And but that shouldn't be that's that's that's the byproduct of another win. Alright. I think we've done a really good job of this too, by the way, which is that we do share our wins, our client wins every time another company gets funded or or gets connected to somebody. Something good happens. One of our consultants, you know, really nails a call with somebody and get some great feedback. We share that company wide. And I'd say we're at a size now where that no longer makes just pure intuitive sense when you're a three person company, of course, everybody knows everything. But I think that even as you get to the point where you've got more than one person in any given role, you're at a size where it maybe doesn't make intuitive sense that everybody sort of knows everything right. You have to be careful how you go about it. But I think we've done a really good job of balancing that and making sure that we're celebrating wins across the board and giving everybody a chance to to kind of celebrate those little winds and and and to understand how what we do impacts our customers, right? Taking what we do on the outside and bringing that back inside, internalizing it, celebrating it. And I think that that has has had an impact on both our culture and our product. And I would argue that it we use those things to determine whether we're growing appropriately or not, right? We may say there's a month where top line revenue didn't change. But my God, we got, you know, 28% increase in, in our customer satisfaction surveys. That feels good, right? We did something, right? We grew in a way that we feel is appropriate and, and powerful for the future of the company.

Wil Schroter: I also think that it just makes us generally happier. And I know we talked about this and I really hope that folks, when they hear us talk about how we're trying to optimize for happiness or grow for happiness, that they just don't think we're this touchy feely organization, you know, where this new agey kind of organization and we don't care about, you know, things like revenue, etcetera. Dude, we care about all that stuff. Probably more than you, Right? Um, but, but the, the point is, uh, we've realized that it's not just that yes, we have to focus on the numbers. I'm our CFO. Also I have to focus on the numbers, right? Um, it's it's not that I've overlooked that, but I don't want to focus on the numbers at the expense of my happiness, Right? And, and, and by by way of me, I literally mean the entire organization, right? And when I talked to other founders and we talked about the growth of the organization, I almost always ask, are you happier Nine times out of 10 people look at me like they don't know what the hell I'm talking about. Oh yeah, the families. Finally, I'm not talking about your family, right? I mean your team. Are you healthier happier than you were a year ago? Well, the business has grown, so I guess I'm happier. Really? You've got giant circles on your eyes, okay? You haven't slept in a month, right? Um I always have them so nobody can make that comment, right? Um and and people look at me like, you know, what do you mean? Happier? Can you define that? First off, it's funked up that I even have to explain that, right? The fact that I'm happy,

Ryan Rutan: I'm happy that we're growing

Wil Schroter: will like, like okay. Um but is this organization is what you're doing is your job, your career? You know, again, we're talking about startups here making you happier. Are you doing the things that are actually improving your life in any given way? And I hate to say it. The answer is typically no. Right? And that's pretty freaking sad.

Ryan Rutan: Yeah, I mean growth and happiness, I don't think that they have to come at the expense of one another. Um but I think that if you simply focus on growth, that it is likely that that happiness will, will decrease. Um

Wil Schroter: at the end of the day we

Ryan Rutan: got to go back to like why are we doing all this?

Wil Schroter: Exactly right. And again, what I tend to see is an organization where everybody in the organization is just flipping miserable, right? And you have to ask yourself at some point, what are we doing here right now? And now there's a time and a place where you just have to buckle down and work, right? You know, and again, I did that for decades where I just worked every waking hour, you know, it's true in most cases I was pretty happy, but I was also the founder of the company. So my happiness was a little bit different. I was watching my baby come alive. I was willing to do pretty much anything that needed to be done to make that happen. You know, I was willing to make sacrifices that that didn't have the same kind of intimate payoff that that it had for the rest of the organization. So their happiness wasn't quite the same, but now I'm looking at it, you know, later on here in life a bit differently. And I'm saying if what I'm doing is just making me hollow and miserable, then I'm not growing. I I can't sit in front of people and say this is going really well because I'm full of ship at that point.

Ryan Rutan: Yeah. And we talked about this before, but it maps back to this notion that, well I'll just put in the time now we're going to grow at the expense of my happiness, but that's okay because after the growth, then this other thing will happen and and then that's when I'll be happy and that'll be really great. It's this whole concept of just deferring outcomes, right? I'm going to defer my happiness so that I can achieve this other thing instead. And I think it's such a dangerous mentality.

Wil Schroter: It's also bullshit. I mean, no, you're going to defer your happiness later on. You're just going to be unhappy about something else. I know this from personal experience. I was talking to a buddy, a buddy of mine yesterday that grew $100 million company sold. It has yet, this is years ago, has yet to find happiness. Now, I'm not saying because one guy was unhappy that you won't find happiness I'm saying because every flip and founder I talked to that sold, the company has gone through very much the same catharsis thinking that if I to your point Ryan, if I defer everything now that I'll be able to get it back later, right? And that's, that's often the founders who often have the most to gain, but take that even further than the founders take all the folks that are in the organization. Should they all be really deferring their entire lives with their time with their kids. The vacations they'll never take probably in most cases all over their twenties, um, for some like minor reward that they may get later. It's kind of bullshit.

Ryan Rutan: It is bullshit. It is bullshit. And it's bad for you. It, uh, you know, and, and it doesn't have to, it doesn't have to go that route right? I think that there is a balance that you can have. And, and again, it goes back to defining why you're growing. So since since this is all about growth, let's go back to talking about why we want to grow in the first place, right before we even get into what the potential trade offs would be. Let's make sure that there's actually a return on this, right? We were talking about deferment of happiness of of time and all these things. You literally cannot earn interest on happiness. So if you bank it now, you don't get more of it later. That's not how the ship works. The same thing with time. It just goes right there just missed opportunities. So before we even get into making those trade offs and saying like, okay, well if we grow, it's gonna cost us this. And I think I'm okay with that. Let's talk about why the hell we're trying to grow in the first place, right? What is the goal of the growth,

Wil Schroter: correct? And what I see is very little focus Ryan on uh founders. Founding teams saying, what are our goals beyond revenue? What are the things that are that are absolutely important to us? Um that we're trying to use goal growth to enable, Right? Because the whole purpose of this whole thing should in part b to enable us to achieve personal goals. But I rarely hear people even have that conversation, much less list them out, much less ever talk about having achieved them, Right? Sure, ours were crazy, deliberate, right? Like again, I mentioned this, like we've talked about this before, we went into this thing with very specific personal goals, you know, one of them that I remember sitting on the couch with with you and a few other folks in the, in the conference room saying I want to spend more time with my kids, right? Like the goal of growth at startups dot com will, will enable me to spend more time with my kids and and Ryan, you and I were talking about this yesterday, that's exactly what happened.

Ryan Rutan: Yeah, I'm trying to picture that on like a major corporate dashboard using ASAP right? Time spent with Children is down 18% this year, we've got to do something to fix this, right, just love to see that never going

Wil Schroter: to my kids would love to see that too. Um but but here, here's what I would love it if I if I would encapsulate this little bit right here is what I would love, I would love to be able to sit down with more founders and say how are things going and have them say, look, you know, business health is good, you know, finances are good, ergo I'm not in some kind of other trouble that we should probably be talking about, but man, here's what I'm really pumped up about right now, um I was able to give everybody in the staff an extra week of vacation every year and they're all taking it and man, the places people are going are amazing, I was able to institute some work from home now, people are getting to see their kids more often, I was able to um achieve some of the things that I wanted to achieve personally, because the business enables me to get more freedom within the business, like to me that's really awesome and and what's crazy about all of all of those things is they typically don't require you to grow at all yet, That's all the ship that you're trying to get growth to enable,

Ryan Rutan: yep. Yeah, I think it's important to consider, right, like as you grow your business, are you going to be on top of it or underneath it? Right. Is the growth of the company actually, what's going to elevate you to whatever it is you want to do next, personal goals, company goals, whatever, or is it just going to trap you and we've given, you know, 20 scenarios earlier in the discussion around how this can have those negative impacts I think is before you even start to grow, think about which side of that growth you're gonna be on, you're gonna be standing on top of the growth curve or you're gonna be buried in it and unfortunately I think that the way most people approach it by not being deliberate enough in being honest with themselves about what they actually care to achieve, they end up underneath the curve and they just get, they just get suffocated by it.

Wil Schroter: Yeah. Or like me early in the process of my career, you just assumed growth is the only metric for success. And so you pursue growth at the expense of everything else blindly really, because you just assume that all companies that are, that are meaningful grow and they grow in always they have to whether they want to or not and I gotta tell you, it's total bullshit. The truth is, the goal is to find out what you want to be really good at and grow to exactly the size you need to be to be the absolute

Ryan Rutan: best. That's a wrap for this episode of the startup therapy podcast. This is Ryan Rutan on behalf of my partner Wil Schroder and all the startups dot com family thanking you for joining us and we hope you'll continue to join us. Be sure to subscribe rate and comment on itunes or wherever you love to listen to startup therapy. You can find all of our episodes at startups dot com slash podcast. If you're looking for more amazing resources to launch or grow your startup, be sure to head to startups dot com and check out startups unlimited. It's everything we have to offer from our online university to our amazing community of experts and founders and even all the tools we've built like biz plan, fungible and launch rock. It's everything a founder needs visit startups dot com slash begin that startups dot com slash b e g i n. You'll thank me later.

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