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From the very beginning, nothing has been ordinary about Claire Lew's (@cjlew23) company, its business model, or the way she came to lead it. Learn how Know Your Company has generated millions in revenue with a tiny team, how Claire has met with over 500 CEOs and business leaders, and what she's learned about creating a successful company.
Know Your Company — software tool that helps business owners get to know their employees better and overcome company growing pains
The Watercooler — online community for leaders looking to become better
The Heartbeat — bi-weekly newsletter on leadership, company culture, employee engagement and employee feedback by Claire Lew.
Knowledge Center — guides and resources for leaders looking to create a positive culture of openness and honesty within their companies.
Know Your Company Blog — thoughts on leadership, company culture, employee engagement, and employee feedback
What's up, everybody? This is Courtland from IndieHackers.com and you're listening to the Indie Hackers Podcast. On this show I talk to the founders of profitable internet businesses and I try to get a sense of 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 Lew. 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 in 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 were a lot of questions submitted by Indie Hackers 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, Courtland. I admire what you're doing, and honestly, wish Indie Hackers 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 company, 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?
Man, that's like, I don't know, being asked to talk about, "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 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, "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 bootstrapped 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 cliché 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 or 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 that I think is cool about Know Your Company, near the top of the list, is that you have a very position 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 upfront, 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 and running a small team. People are always surprised to hear that we are, in fact, a two-person company serving over 15,000 [customers] 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, "Hey, we're doing a lot for being so small," is there's a ton of advantages that comes with 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 Know 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 stopped 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 tradeoffs, 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 bootstrapped 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, 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 in 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 we hit over a million in revenue in our first, I think two and a half – a little less than that – years in 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 that post you mentioned, Courtland, 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 you sort of pull back the curtain around revenue numbers are about the thousand-person companies with multimillion dollars in revenue or millions, if not billions of dollars.
And it's a little revealing to be the kid on the playground who goes, "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.
Again, 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. And I mentioned earlier that it had 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 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 boot camps 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, is they invested in us after I left.
But as time went on, 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 ecommerce company right outside Chicago. And when I was there, Courtland, 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 my CEO at the time did not know his company very well.
So this is when I first encountered the problem. And in school and 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, is 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, "No one's doing anything about this? I think I want to."
So I 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 I embarked on this journey to do that. I had 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." (Laughter.)
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 was 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, "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 in 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, "This is interesting. 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's 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 with feedback. I'm obsessed with solving it, and I think I'm onto 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 anywho, 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, "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 then they would make some tweaks to their product. But yeah, just was kind of thinking, "I'm just going to do my own thing 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. And I'd gotten paid by Basecamp as well. I had 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 passed the 10-month period, Courtland. 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? Do I ask my parents for money? I could never do that. What am I going to do? Am I going to have to get a real job?"
And I was sort of wringing my hands trying to figure out the situation. And 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? 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 I'm trying to sell." And he's like, "Selling is the hardest thing. I feel ya." And I was like, "Well, how are things going for you?"
So what they had done is they had actually launched Know 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, it's blowing 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 Know Your Company to be its own separate software product, asked you to be the CEO and run the whole thing, and we'll split ownership in some fashion. And you'd own part of it and we'd own 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, Courtland, being like, "Oh, my god. Are you kidding me?" That's what's running through my head.
The funniest part though of all is I totally tried to play it cool in the conversation. So I think I said something like --
You have to.
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 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. 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 the very long version. I don't know if I've actually shared that very, very long version on any podcast to date.
Well, I appreciate you sharing it with us. That'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. 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 consider myself a fan of Basecamp as well.
I'm a fan as well.
Yeah, I think a lot of people are. And so it was definitely this feeling of, "Oh, wow, there's 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 though a lot of that pressure 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 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're talking about the CEO of Airbnb and Medium are customers, and I'm just thinking, "I just don't want to screw this up."
And yeah, I ended that first year thinking very much to myself, "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 – yeah, I'd 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 reach that tipping point or gain 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 9 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 is 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 was 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 first hand. 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. Somebody 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 screen shots, 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 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 in 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" was something that I was able to put into practice.
So I did, over the course of almost two years – no, 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.
That's crazy.
Exactly, it does sound crazy. But because of that, what's cool is – and we get this feedback all the time – if you go to our website today and your 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 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, 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 this 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 at Know Your Company? (Laughter.)
Not yet. (Laughter.) Never say "never" though, Courtland, right? 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 is something that is 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. There 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 easy 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 copy and the 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.
Absolutely. I think it's so interesting that you mention 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."
Oh, yeah.
Yeah. 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, is will people pay you. 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 or it's a blogpost that I write, and then we charge for it.
And a perfect example of that is we recently launched new online community this past fall called The Watercooler. 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 at how successful it's been and how much value people are getting from it. But I think, 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, when in reality you're just seeking confirmation for whatever it is that you already believe.
Absolutely. I think on that note, Courtland, so I run this 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 Cancel, who is the CEO of Drift, and 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 toward the things that we can control. So we like fixing bugs, we like tweaking the UI, 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 that 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 marketing 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 where 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 it was something, especially in my conversation this morning with David that I remembered.
So I took some questions from people on the Indie Hackers forum for you, Claire. And Dina (ph) from Indie 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 sort of 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," that kind of existential crisis that was then for me. And so I consider that in many ways quote/unquote my greatest "failure" for leaving this company.
But again, not really 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 to be versus what you truly want is so, so important.
And as a result, in how I've chosen to build Know Your Company and run Know Your Company, that remains so clear and so true that it's doing it for the right reasons and for personal, intrinsic motivation versus external motivations and pressure. So that was definitely one of the quote/unquote "failures" or expensive lessons I learned.
And then the other one was, while running Know Your Company – and when was this; I want to say this was last year – I fired someone and that always sucks firing anyone. It doesn't matter if you're a three-person or a two-person company or a 300-person company or a 3,000-perosn company. Anytime you have to let someone go really, really sucks.
And we had hired a he'd 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 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, "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, 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 cut. Let's talk about sales for a second and 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 at 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?
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 incredibly lucky as an early stage business to have the exposure that we did, so we got hundreds of inbound leads every single week without having to do a – I could have not done a single thing in terms of writing or running ads, et cetera, and they would have just come in just because of the exposure in terms of our connection to Basecamp, 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 Know Your Company.
Exactly. However, my first customers – yes, we definitely got customers through that. And I think the first customer that I closed did come through that channel. But what I also didn't spend a lot of time on was really cultivating my personal network, which that's not news to anyone, sort of business-101 stuff.
But 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, where you turn them on for your team and you're like, "Whoa, We are not using this anymore" or your team complains and it's overkill. 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. 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, so that's step sort of one.
Step two – and this 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, seen as an authority figure, but also to later have those videos to share with clients, et cetera? 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 – 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 the cool thing about speaking versus writing a blogpost, is when you speak about something, you know when it hits, you know when people laugh, when people are surprised or people start writing notes, and you go, "Oh, huh."
So I can't even tell you, Courtland, I have written maybe hundreds of blogposts 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 speaking as such a almost fertile ground to try to decide what your marketing messages should be without having to write a blogpost and put ads behind or whatever your process is 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. Everyone's got a blog. And in a world where you've got so many articles where it's like, "Thirteen ways to do this, the top five ways to do this," 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 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 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 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 a big boost. I think last year we doubled it, and then just since December we've just seen a 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 thinking that through was David Heinemeier Hansson, who many of you know as DHH. He's a cofounder of Basecamp. He's also the inventor of Ruby on Rails. And as the cofounder 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 night clubs and you see what lands, you see where people laugh, and then you go home and you rewrite and you 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'd done for the first two years of running the business – to now going and taking our program to HBO.
So 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 and 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 that's how we've thought about it over the years. That's how we've chosen to make our moves. And I always reflect on that analogy of playing clubs to going to HBO.
Are there any strategies that you seriously considered that you decided not to use?
Yes, many. (Laughter.)
What went into chose decisions?
So we don't run ads at all, which is pretty unconventional for a 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 bootstrapped 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. 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 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 blogpost that you end up forwarding to a few employees, 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 a head of business development. So one strategy that we definitely had considered for a while was building out a sales team. It's a 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. It was fine when they got walked through a demo, but then after that, which is actually what a majority of salespeoples' time is spent doing, is 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 tradeoff and trying to figure out, "Is that the right process for us," it didn't land.
So I share these things, I guess, to --
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 Watercooler, 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 – 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 these customers, so that's another thing that we can play into for being helpful for providing that information and that education.
So I think when deciding, "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 product. 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 – let's say it's $10 per user or $5 per user per month, so it's less than $100 per month for you – that's super easy to use for a few weeks and then be like, "I got this weird piece of feedback from John, so just going to turn it off, whatever."
However, if you are deciding to pay three grand for it upfront, and then that's it, you're just paying that three grand, but you know that you've invested that upfront, all of a sudden you launch it your company and you're like, "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 want to make sure that that three grand pays off."
So that second scenario is really how we want to 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.
And so when you purchase Know 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, "It's when we need it, when we don't, it's just this little tool, this little thing on the side."
So yeah, a longwinded 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 just as an addendum, which is that it's not perfect, my goodness, because people might be listening to this and being like, "I'm 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 we'd have been profitable until month eight or nine had we not. So that's one thing. So if you're a bootstrapped 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, because what we are getting upfront is essentially what the average lifetime value would be, except we're collecting it upfront. So for bootstrapped 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, "Well, do I pay $100 for someone who's just going to be here, who's a seasonal employee?" So there are some interesting quirks.
There's also the anxiety, the psychological anxiety that holds someone back from making a three-grand purchase versus a $100 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.
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 understanding exactly what the effects and the tradeoffs are of all of 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, Courtland, 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 blogposts, many folks may be reading Indie Hackers being like, "There's got to be an answer for how you do x. Come on, what'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. Learn though other people's mistakes without doing them yourself.
However, in terms of decision-making, 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, 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, "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 are not you. So trying to remember that those answers, most of the time you have them in yourself.
Yeah. 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 Know 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 Watercooler has really struck a vein with people. So as I mentioned, we just launched in October very humbly, not expecting too much, not sure if we would shut it down after a month or so and 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 that 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.
And the applications that we receive, and we received thousands and thousands of applications over the past few months to join, we noticed just how pained managers and leaders are for this community, for learning, and for becoming better. It sounds obvious, but that's been something that we really want to help and want to address.
And from the beginning, it's been sort of my personal passion for helping people become happier at work and seeing leadership as, 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 do?" 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 Watercooler affected your reach with your 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. You're always trying to figure out, "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 I'm preparing for a talk, those are the days I do it. I take Wednesdays to focus just on our Watercooler community, so different projects to either help promote it or get AMA (ph) 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, is there something maybe on the workshop end that we should be thinking more about or thinking about Know Your Company 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?
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 change, is I used to spend in the first two years of Know Your 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 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 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, even about how databases are set up, to a minutia which I look back and I think, "Huh, growing pains." 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 is Daniel Lopes. He used to be the director of product for IFTTT, If This, Then That. And just is incredibly experienced product designer, product manager, engineer, designer, product leader. And so I've learned a lot actually from him.
But that transition – one, it was one of the best things ever to sort of get myself out of the weeds on the product side. And two, 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 when I made that change, that's when I started to write more. And again, we've really seen the benefits of it.
Lynne Tye from the Indie Hackers forum asks: "What are some of the tradeoffs 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: What are the breaking points and what things are you not doing that you wish you could?
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 I do wish, "It would be so nice if we could move faster." And that's definitely the biggest thing.
The other thing that I try to remind myself though is faster doesn't always mean better. And to focus on, "If we're doing the right things, then whether or not we finish 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 naïve as a solo founder or as a two-person team of what your limits are. You have limits. That's a thing.
We are small as a company, but my point being is just to be real about the fact that 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 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: Are we actually working on the things we're supposed to be working on? And in a beautiful way, it really forces our focus and scope of what we do put our time towards.
Indie 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 in the right ways at the right times. And that's a constant process of re-evaluation 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 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 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 sure 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 at 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 counter-intuitive 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 is going to disagree.
So the question always is: 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 then 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, "Whatever, screw it. I'm just going to decide." But for most people as leaders, or at least 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 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. 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. That's impossible.
So I think that discernment between consensus and what true collaboration is is 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 on 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 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 sort of a homogenous group, but each individual person who has their own experiences, values, beliefs. And that nuance to me in 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 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, "Hypothetically, I like to be treated" – it's like, "There 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 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 like one of these things where an ounce of prevention is worth a pound of cure, and you really need 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 want it 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 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? Skeptical, inconsistent, 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're thinking, "We're a small team but we want our culture to be very customer-centric," think about, "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, and 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, "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." That's just one way. You should also maybe have everyone involved in one focus group during the year and also have everyone interview a customer, and also have 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 richness and the ways that you're thinking about your culture and not just saying, "We want to be friendly so we're just going to do this" or "We care about being innovative as a company, and we want that to be part of our culture. So this is the one thing that's going to make us be that." Richness is important.
So it's those three things: personal accountability, consistency, and 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 counter-intuitive 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, "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 genuinely want to help and I'm curious for ways that 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, "Jeez, what is it that I need help in?" It's a lot to sort of process and think about. Do I bring up this tiny, little thing that bothered me during the meeting last week, or do I talk about the broad project needs that I've been noticing overall just in my role. Where do you even start? So you put the burden of work on the person that you're asking.
Two, it actually comes across as super disingenuous. Because you're asking the other person to do the work, it kind of shows (inaudible) as a leader that – as a leader, have you even thought about this? Do you have any suggestions at the very least? It becomes this kind of kneejerk question that's just asked more to the benefit of the leader to be like, "Oh, 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 one phone call that I could 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 her former boss used to ask that and 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 I can take away?"
So for founders 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's 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 get feedback. But as a founder, especially as a founder of a successful company, you might be oblivious to these things.
So what should you be looking out for?
Absolutely. 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, "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, "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 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 is 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 you all-hands meeting and you ask for questions and it's always silent; when you're in your leadership team meeting, and the discussions – they're good, they're okay, but they're getting a little short, and no one's posing tough questions and there's this sort of avoiding 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 obviously very glaring warning signs as well in terms of a culture of being toxic, 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 very briefly in the consulting work that I did, and then again now in the research and the data that we've collected through Know Your 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 but seem to be performing well.
And so this goes actually back to that 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'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?
It's interesting, Courtland. I am hyper sensitive 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 anywhere between 25 to 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 we are two people, so what can we make sure to do, whether it's – we do a lot 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 stealthfully 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 500 calls. What are some of the things that you've learned from your customers rather than the things that you've taught them?
So much. One I would actually say, and probably relevant to the audience, is to make 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 that you should be complacent by any means, but to be grateful and to enjoy the process, which again, may be 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, I know you have a lot of things you want to do and places you want to take your company, but realize you are a two-person team, you're profitable, you serve thousands of people, you're making an impact on the world, you have happy customers, you don't have team issues. It does not get better than this. It only goes downhill. This is as good as it gets. Enjoy this, because the minute you start to hire more and the minute you start to serve more people, the stress only increases, the obstacles only increase, the team politics only increase."
So he was just sort of like, "Enjoy this now, enjoy the moment." And I think 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 that you're trying to make full time, I think just enjoying what those moments are instead of always thinking, "I'll be happy when."
Yeah, that's great advice just for living your normal life as well as being a founder.
Yeah, 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 Indie Hackers to know about?
I guess one last thing I might share, and this is related to an earlier conversation, 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 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 biased by our own experience and our own perspective.
So if one person has had, for example, a bad experience with salespeople, 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 is biased by their own experience to take all advice with a grain of salt, and ultimately, 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 never listen to any podcast ever or delete all this. (Laughter.) Moral of the story.
All right. 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 thing. So you can follow me on Twitter @cjlew23. You can email me too at [email protected] 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 are intrigued at all by The Watercooler or 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.
If you enjoyed listening to this conversation and you want a really easy way to support the podcast, why don't you head over to iTunes and leave us a quick rating or even a review? If you're looking for an easy way to get there, just go to IndieHackers.com/review and that should open up iTunes on your computer. I read pretty much all the reviews that you guys leave over there, and it really helps other people to discover the show, so your support is very much appreciated.
In addition, if you are running your own internet business or if that's something you hope to do someday, you should join me and a whole bunch of other founders on the IndieHackers.com website. It's a great place to get feedback on pretty much any problem or question that you might have while running your business.
If you listen to the show, you know that I am a huge proponent of getting help from other founders rather than trying to build your business all by yourself. So you'll see me on the forum for sure as well as more than a handful of some of the guests that I've had on the podcast.
If you're looking for inspiration, we've also got a huge directory full of hundreds of products built by other Indie Hackers, every one of which includes revenue numbers and some of the behind-the-scenes strategies for how they grew their products from nothing.
As always, thanks so much for listening and I'll see you next time.
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