The Pomp Podcast - #1253 Howard Lerman | Serial Entrepreneur Shares Cheat Codes For Startups

Episode Date: October 4, 2023

Howard Lerman is the co-founder & CEO of Roam. Howard previous built Yext, and took it public at a multi-billion dollar valuation. This conversation was recorded at the BUILD Summit in New York. In this conversation, we talk about tips, tricks, & hacks of a second time founder, 5-minute meetings, how Howard constructs the board, calendar zero, and many other insights. ======================= Trust and Will has simplified the process of creating and managing your will or trust online. They leverage a data-driven, design-first approach and amazing customer support to help you protect your legacy from the comfort of your home starting at just $159. Sign up today for 10% off using ⁠⁠⁠⁠⁠⁠https://trustandwill.com/pomp⁠⁠⁠⁠⁠ ======================= Get Better Crypto Data: Do you want faster, easier crypto data? Sign up for Velo Data, a new product that we have been working on to solve this problem: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠velowaitlist.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ======================= Pomp writes a daily letter to over 250,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/

What's up, everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. The following episode is with Howard Lerman, the co-founder and CEO of Roam. Howard previously built Yext and took it public at a multi-billion dollar valuation as well. In this conversation, which was recorded at the Build

Summit in New York City for 700 founders live, we talk about all the tips, tricks, and hacks of a second-time founder. Howard goes over why he holds five-minute meetings, why he immediately announces a chairman of the board, and a number of other things that he does to attract the best talent, build great products, have a great company culture, and ultimately be successful. I always enjoy talking to Howard, and these tactical conversations provide tons of value of things that you can immediately go and implement today in your business. I hope that this is valuable to you. Here is my conversation with Howard Lerman. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast

are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. Today's episode is brought to you by Trust and Will. I've gone through a number of different changes in my life over the last few years. I got married, I had a kid, and I had to start thinking about how could I ensure that my wife and my child would be okay if anything ever happened to me. That's where trust, wills, and estate planning come into play. Now, most people, what they do is they get introduced to

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We're advising the founder, and we think it's pretty cool. This one is something that keeps me informed on a daily basis, so you should check them out at VeloWaitlist.com. That's V-E-L-O Waitlist.com. Howard is now the co-founder and CEO of Roam. He is the former co-founder and CEO of Yext, which he took public here in New York City. And we're going to talk about hacks, tricks, tips of a repeat founder. Many of the things we're going to talk about today, I think, go against conventional wisdom or what many people would say is common sense.

So first, mentality-wise is where I want to start. You start the first one, eat glass for a while. It works. You take it public. You get to raise the trophy, ring the bell. You win. Why the fuck are you doing it again? I'm obviously got a sickness.

uh i started started rome the the next day after i stepped back from yext i incorporated the company so i think it really now it's interesting because when you think about the energy that you use as your company grows there's different phases of every company so you know kind of going from zero to one is very different than running a global public company at scale so the actions you have to take change over that time. So while I may have depleted all of my sort of stamina around how to talk to public market hedge funds about EPS last quarter, I had a lot of energy reserves built up for a zero to one type of innovation period. So it was not that hard to kind of just shift given that I had a lot left to do this. But yeah, I'm fucking crazy.

um some of the things we're going to talk about today are not just theories you have you're actively doing it as you build a room um and so one of the things that you did which i think surprised people very quickly uh is you named one of our mutual friends brent saunders as the chairman of the board you are a startup having a board sometimes is even unique for a startup but the founder not being the chairman of the board i think is very rare why did you do that So this is one of my first hacks. And I'm actually kind of shocked that more people don't do this. When you are starting a company, you have maximum leverage to do whatever you want, and particularly construct your board. And board construction isn't really something that you think about until later on. But what you want to be doing as much as possible when you start your company is stacking the board of directors. We're talking about the board of directors here. I assume everybody knows what the board of directors is you want to stack that in your favor as much as possible early on because the decisions that you make on day one like stay with

you forever it's kind of like if you write something in your corporate charter even when you go to raise an a and a b and a c in further rounds it tends to not change these these things tend to stick and so for example if you have two co-founders and you put all three of you on the board, like when you go to raise an A round or a B round, usually somebody's not going to say, oh, you have to kick someone off the board. So all of a sudden, if you're thinking about, should I put two people on my board or three people? Now you have three board seats instead of two. So you basically stacked the board deck in your favor out of the get-go. Now you can sort of take this to the next level and every board has a chairman and the chairman is

simply, it can be interpreted however you want operationally, but the chairman is actually really just a ceremonial title they don't really do anything they literally have one function which is to call the meeting to order so it's like kind of like you guys up here just calling the conference to order for the day they stand up here they do it and then like the chairman can do whatever they want the chair so as you're the earlier you are the more likely you are going to be able to sort of set this up in your favor. And so I named, like you said, Brent Saunders, the chairman of Rome. And why would I do that? I mean, look, I've run a public company. I've done billion dollar IPOs. I've raised half a billion dollars of capital. Why do I need somebody

to kind of like go along this? And the fact is that it doesn't matter where you are. There's always someone that has done more shit than you. And Brent is the perfect example of that because Brent ran and was was the CEO and chairman of Allergan Health which is an 84 billion 83 billion dollar pharmaceutical company and so you know you can kind of keep leveling up and you're really just a function of the people around you as much as possible so I just wanted to you know since since my objective this time around with Rome is to go to that level of scale I wanted someone that had kind of charted those paths before but the coolest thing is if you put if you have a visa now let's say you're not incubated but like you have a series a investor and they're a venture

capitalist and you go to that vc and say look you know i think we should i'd like to find someone better and smarter than me to be the chairman of the company and by the way this person is the founder of the ceo of a 50 billion or 10 billion dollar fortune 50 company people the vc will say yes to that like it's a it's a it's a really good signal for your company if you can get somebody that's been on public boards and has been the ceo of something to join your board it's a huge signal of strength to investors it's a huge signal of strength to customers that somebody of that caliber is willing to to take it on and frankly a lot of these people that have done these kinds of things before are like open-minded to being like the chairman of a startup they think it's

cool like i've seen this happen before um so you know sprinkler for example has as a chairman that that was like a very high level executive at Cisco. So I just, I think it's a really good technique to first off stack the board in your favor. Second, give someone, get someone in there in the room that really can just do a totally different thing than you're able to do since you're trying to go from zero to one

and they may have done something way bigger. And then third, really set yourself up for the long run in having a board construction that's gonna be to your favor. You do five-minute meetings. Teddy Roosevelt did five-minute meetings. And Howard Lerman. Two, let me say it like this.

Why do you do the five-minute meetings? By the way, I like sometimes just wish I like could ride in here like on a horse, like a rough rider. Teddy Roosevelt used to do these five-minute meetings. Have you read The Bully Pulpit? We talked about this. Yeah, The Bully Pulpit by Doris Kearns Goodwin. she's one of my favorite authors presidential historian uh you know she's written the book about lincoln and all that kind of stuff but this this particular book about about teddy i was

reading and it turned out that teddy roosevelt one of the most remarkable people you can imagine did meetings in five minutes now we all scheduled 30 minute meetings and 60 minute meetings and 45 minute meetings to talk about that's way less important than the president used to decide in five minutes so i'm like reading this and i'm like my goodness why do i need 45 minutes for a you know certain type of design review or whatever when the president united states would probably make you know have a five-minute meeting and make decisions about this and so i actually at yext instituted five-minute meetings and i think you you have to be intentional with how you use them but the way that i started to do these five-minute meetings was for example when we began to expand

to Europe. And we had a hundred people in 120 people in London, a hundred people. And I was able to meet with basically all of them in a day, all 100 people in one day. And what we would do is set up five minute meetings and here's how it works. And the key pump is you have to be really intentional and prescriptive and run it by the clock. So I would put a clock there. I'd have someone, you know, knock on the door when 30 seconds was left so that you had a good feeling of the time. And then I would simply ask, what are you working on? And when you ask someone what they're working on, and then this is pretty important. I can be a little intense. So I would not make eye contact with the person while they answered. I never take notes. Do you take

notes by the way? No. Yeah. I never take notes either, but I would pretend to take notes because it was a good sort of decoy into not making eye contact with them because I didn't want to scare the fucking shit out of them so you you begin to absorb they begin to talk and you'd be shocked how long five minutes is if you once you begin to uh really uh get someone going a super bowl ad is 30 seconds so you get like 10 ads in a row basically in five minutes and if you listen to them and hear them you can absorb a ton so i would do like you know 80 meetings in a day it's 400 minutes. It actually went by pretty fast. I had a giant pile of notes when I was done that I discarded, but I left that with a very clear sense of everything going on. And the company would love

it because I would get to meet everybody that was in the London office and they would get five minutes with the CEO to tell them what was on their mind. And I would simply ask, tell me what's on your mind. Tell me what you're working on. And frankly, a lot of times people would get it out and then it would be over and then they'd end early just you know the more intelligent people are the more they begin to do higher level chunking with concepts you know exactly what i'm talking about because that's how the human brain works it's like the fox in this you know it's like sour grapes that term comes from you know the story the fable of the famished fox that was looking at them and couldn't get them and then decided well fuck i didn't want those grapes

anyway i couldn't get them so sour grapes is a term that we all understand and so people that are working together closely and are highly intelligent and working towards a shared mission are able to begin to chunk at higher levels and convey faster concepts to each other, which means you need less time to actually communicate. You make a lot of people the founder. We heard yesterday advice that maybe there should be like one founder. And if you bring on a second or third founder, it's kind of later and smaller equity. You take a different attacked, which is a classic, it depends type answer. Why do you make so many people the founder of the company? It's interesting because being a founder or not is actually kind of like a random

point in time. And, you know, you all are founders. You may have people that are co-founders that may, had they come with you a year later or two years later, they wouldn't technically be founders. Sort of being a founder or not is clearly there's one that there's the founder that makes the whole thing happen or a couple of people that make it happen. But then there might be some other people that are around you at that exact point in time. And if there are other people that are around you at that exact point in time, this gets to my next sort of cheat code or hack, which is to make them a founder and give them founders equity. This is a little bit of an unconventional stance. At Roam, we have, I believe, 18 people that are technically founders in the

cap table. The wealth creation opportunity for someone who is a founder versus not a founder is stark. And I actually don't, you have to use them, but I don't really love stock options as a compensation tool because I think they're, first off, nobody knows how to value them properly. Everybody values them differently. So you could offer the same stock options package to somebody, another person, and they literally have no idea how to value it. The tax treatment is absolutely terrible. You get short term tax treatment on stock options. So that and that has no bearing on like what the sort of person here contributed or not. So by making someone a co-founder or a founder out of the gate and giving them founders equity, one of the main

things they actually get right away is QSPX tax treatment, which means that their first $10 million are tax free from the from the feds if you're not in California. And so this is just like a windfall uh and if you have an outsized success for your company it actually means and if you ever get shit about this from like a vc or something where they're like why would you make all these people founders blah blah you're giving up too much stock if they get better tax treatment from the qsbs thing and can save up to 10 million tax free you can give less shares that'll be worth more money and create this win-win where the person gets long-term treatment, QSBS, and you don't have to give out as many shares to give them the same amount of value that they otherwise would

have had. So it just seems like a pretty no-brainer kind of thing to do. And you can still have the stock vest and take it away if you fire them or they leave. The vesting can happen in a traditional way in the same way that stock options vest. Just the tax treatment is so much better. But then there's also the matter of pride. And if you let someone go around, let someone. If someone can go around and say that they're a founder of something, it really changes their conviction level. It changes their contribution level. And they're in the trenches with you and along with you for the ride. So I recommend, if you can, bring people along for that ride. As many people that are going to be along for that ride and make him a fucking founder. You host a lot of events,

but you have this idea of hosting customer dinners for VIPs. This is another trick. I was actually talking to a founder. So about three weeks ago, I went to Sastr. You guys know Sastr, the Jason Lemkins conference, not as good as this, obviously. And it's really focused on... I paid him to say that free stage time. It's, uh, it's for SAS, you know, SAS, SAS focused companies. And there's, it's kind of got like the dream force type thing. It's like the anti Salesforce, anti dream force kind of conference in San Francisco. And we had a dinner, we hosted a dinner on a Wednesday, you know, one of the Wednesday nights there. Uh, and there was another founder who I invited to the dinner and she's a founder of a, of a great startup here in New York.

and they're doing awesome they're b series probably 15 million of ar maybe a little less but growing pretty nicely and she's like i'm sorry i can't come we're hosting our own dinner and we and i talked to her the next day and i was like well how'd your dinner go she's like actually like we had a lot of trouble getting people to come it was like people didn't show and she's like well how did your dinner go well here's what we did do you guys know scott belsky who's the head of adobe creative cloud so i saw he was a speaker at the conference so i reached i like pinged scott i was like scott can i host a vip dinner in your honor at nobu and he was like well i guess i'm gonna be in town i knew he was from new york and he so he's like what's he gonna do

that of course so he's not gonna have anything to do so i was so scott's like sure so then i just started emailing founders like hey i'm hosting a vip dinner for scott belsky you want to come and meet scott belsky so i just hijacked his name and got 32 people to show up to nobu that all came and we had a really high response rate so you should do that that's a really good trick as opposed to hey come to my you know startups dinner it's going to be really cool and i'm going to you know promote my product and sell my product and by the way he was absolutely brilliant the the kinds of tips and techniques and things he said were, uh, that, that people wanted to, you know, with, with the future of, you know, Figma and all the Adobe strategy around all that kind of stuff. I mean,

he's the one that spearheaded that acquisition. So people that use, I mean, how many of you use Figma in the last couple of days, like looked at a design model, everybody. So people were asking about that. Obviously there's, there's antitrust issues there, but just being able to kind of hear from a founder, a unicorn person that then had gone on to start a big, you know, to run a big company and is a number two or three executive at one of the world's largest software companies is a compelling kind of thing versus, hey, come to my startup's dinner. It's going to be awesome. When you went to raise money for Roam, I think you texted me and said that you were starting another company and you wanted me to come see the product. And so I said, I'm in. When do you want

me to come see the product? And you let me put a couple of little pennies into Roam. But I was surprised at how low the valuation was when you sent the docs, because no matter what valuation you would have picked, I and many others would have invested. Why do you think keeping the valuation low is so important? How many of you are concerned about dilution? I really think that is incorrect. I think pretty much you're going to, I'm sorry, like you're going to have a binary outcome. Like the thing that you can actually do is fuck yourself if you raise a too high of a valuation because it limits your optionality. Pretty much acquisitions in M&A really only happen in a few levels. There's kind of sub $100 million. Then there's like 250 to 300.

Then you get to like the 800 range. And then there's the billion dollar plus, in which case you've already won. And it doesn't really matter if you own 8% or 12%. When you sell your company for like $2.6 billion, you're going to make kind of a lot of money and you don't really care about it at that point. And the thing though, is that a lot of people that could get rich, if that sub 100 million or even 300 million dollar level raise money at that valuation thinking that it makes them feel good that their company is worth that but let me tell you something about when you raise money your company is not worth that number that just means that one person has decided that there's like a one in ten chance that your company is going to be worth like a lot more than that

number it doesn't mean that your stock is worth that amount it means that there's a probability that your stock is going to be worth a higher number than that amount and so the vc the venture capitalist is clearly playing that game it's their advantage to have you know as many different bets as possible and when you run all those different bets together they end up with outcomes that ideally are in excess of what they've invested but in the case of you you have a binary outcome it's either going to be zero or one and if you raise money at too high valuations you preclude yourself sometimes from lower outcomes, which could end up being highly advantageous to you personally, but not so much your VC. So my recommendation in general is to not, and I'm

not trying, like I didn't do this because I, now there's another side of this too. I'm not trying to sell, Rome raised it 90 million, 95 million. We're not trying to sell. I wouldn't sell for many multiples of that right now. That's not our objective. There's another reason too, that you want to maybe keep things a little bit lower than you otherwise would. Number one is when you issue stock options, which is an instrument, which I hate clearly that happens at a four on a value, but I still hate that instrument. It's a necessary evil. You want to keep that as low as possible because you want your employees that are, that are with you to be incentivized, to be along for the ride and have as much skin in the game as possible. Number one, number two, I just think

it's better. And you saw this happen with Instacart. They priced their IPO a little bit lower. And everyone's like, Oh, Bill Gurley, they left money on the table. And if I had his Texas accent, by the way, but the point is that, you know, you, you sort of can price it a little lower, which yes, technically costs you money, but it gets you people that are there for the long run. So, you know, pomp I, by, by pushing, by, by not maximizing valuation the first time I now have you more aligned with me for the long run, because we're, there's nothing that that gets someone on your team than being in the money together you have this idea of memorizing lines to make perfect copy which is something that i don't think a lot of people think about

why is that important so john lennon used to when he would come up with a song he would sing the song and he would then put the guitar piano down and then come back to it the next day and if he couldn't remember the song he would think to himself why should some kid and listening to the radio remember the song if the author of the song can't remember it how will it be memorable to the to the people listening later on so he used that as a standard for whether or not a song was good enough now none of you all have to write music or copy as good as john lennon or an author or artist but it turns out that the mere act of memorizing something is an editing function and when you go out and you memorize your lines your brain

the human brain actually kind of has a bug which is a feature the feature is the human brain won't remember stuff that's not good which is awesome if you think about it because it means that it only remember stuff that's really good so if you can exploit that feature it means that you can do this and so if you if you've got like a speech or you've got something you want to say i think going through the process of memorizing it will make it probably tighter it will especially if you do it verbally like if you go back to ancient times like it used to be the orators were like the the ultimate way to to to communicate today we're all written we're all reading that's how it used to be in fact uh i could be wrong about this but i believe that one of the ancient

philosophers was sort of killed because he wasn't ready to orate at the level that he was expected to orate you're sort of smiling because you obviously know the story too point is when you memorize your lines you make it chunkier you chunk it up into these sort of better concepts that people can uh identify with it's faster it's better and it ends up being it's almost like a meme. So something you and I've talked a ton about is this idea of calendar zero and no one-on-one meetings. If someone starts a business, especially the first time they have direct reports, how do I communicate with them? What is the pace that I should talk to them? Should we set up meetings every week? Should they be every other week? Should there be three times a week? How long?

You don't do any of that shit. Why not? I hate calendar. I hate, I hate one-on-one meetings. I think one-on-one meetings, how many of you do one-on-one meetings? Everyone's going to tell you this is a very contrarian approach so you do one-on-one meetings because people tell you that this is a time for you to catch up with your employees and it's a time where they can kind of come to you with their concerns and blah blah blah blah blah blah you know i was reading i was reading about uh jensen huang he has 45 direct reports he does no one-on-one meetings this sounds like steve jobs uh one-on-one meetings jobs had 30 direct reports 30 direct reports Yeah. I mean, it's not just a way for him to be leveraged across more people. It's also just a way to cut out a bunch of you got to collapse the stack. That's a whole other thing. But this this point about no one on one meeting. So one on one meetings tend to clog up your calendar.

So if you have 12 direct reports, and you have a one on one meeting with each of them each week, that's like 12 hours. And if you work, you know, 72 hours a week, or whatever, that's one sixth of your week, which has just gone away into literally one on one meetings, which is not productive, and also burned up their time. there's another part about this too which is like it's not obvious to me that you should be having private conversations with people that the rest of the team can't see or hear and so like if you come up with a great idea and it's in a one-on-one or something or you're working on something that other people are tangentially related to i just think it could be better to have that conversation in a group setting and so then you begin to think about okay what are the kinds of conversations that do need to be private and or private one-on-one conversations and guess what those tend to be things that you shouldn't even be talking about in the first place or just a

fucking waste of time because it's just people complaining it's just people thinking about their own you know career advancement which which is important but doesn't need to be addressed every week in a one-on-one setting and it tends to turn into a therapy session which uh you know you you were probably not a licensed therapist and therefore shouldn't be doing this um when you have so many direct reports you're not delegating anything and this is something And specifically young founders, I think, are told, build a team, trust your people, do all of this. If you go and you look at everyone from Mark Zuckerberg all the way on down today, these dudes are micromanaging. Yes.

To a degree that would scare most people. Why? As your company grows, the first thing that a VC is going to tell you is you need to figure out how to delegate. and then they're going to start to introduce you to some people they're like hey you should meet charlie charlie ran sales enablement at salesforce or you know this person ran something at oracle and they really you know just have a conversation they start to throw these weird sort of people at you and you're like what the fuck is this like what is sales enablement what is you know all this stuff and then these people come in and they show up and they have they're awesome in like an

interview situation you start to talk to these people and and they're they're so good at talking about like all this stuff that sounds great and then you're like what the fuck did they just say and it's it's they one of the the things that you have to be like a buzzword a keyword here which is like for me a big red flag is when i hear the word playbook like well we come in and we run our playbook here their playbook is to actually hire a bunch of people to run a playbook that also then do the exact same thing recursively all the way down the chain so you know what i would recommend is to delegate nothing to do as much as you possibly can to identify what you specifically are awesome at like your superpower if that's product then don't delegate product if that's

a particular part of engineering don't do it if it's business development and you're doing deals don't delegate that you can have some people that help you do those things in support of you but don't just like try to replace yourself with someone that's going to do that so then you can focus on bigger picture items and scale and stuff you may need to hire specialists in other areas finance is one in particular that as you grow and if you want to get big and run a public company you'll have to hire a cfo specialist and they will have their playbook and it will be fucking expensive and they'll be hiring all kinds of people and auditors and all this kind of stuff that come in that's all that's all par for the course but when it comes to the unique thing that

makes your company special look mark zuckerberg still wakes up every day and i guarantee you the first thing he does is check the threads stats i guarantee it like he's looking at how many threads were yesterday that's that's like what he lives for and he doesn't need to be doing that still uh and that's just what a founder ought to be doing you just don't give up what is core keep it as close as possible as someone who worked at facebook i guarantee he's looking at the stats every single morning um sunday night exec calls is something that you do what are those calls what are you guys talking about who's on them and why do you do them so i love to just kind of get the team everyone how many of you work sunday nights everybody everyone's working sunday nights uh

so everyone's working sunday nights anyway and you kind of around 8 or 9 p.m you start to kind to come back after your weekend or whatever and answer the emails and start to catch up why not just get everyone together for an indefinite amount of time which could go from one to four hours beginning 8 p.m and sort of just get through all that that way the whole the whole team is ready to go you know 9 a.m monday morning so this is something i've been doing for 15 17 years just sunday night exact call we don't turn the there's no cameras it's just it's a call it's just a it's a way for everyone to kind of get a line for the week i actually read tim cook does this uh and if you if you think about apple it makes complete sense because he's probably you know talking to

asia which is already the next day for them by by that point and they're thinking about the supply chains and they just it's a way to kind of stay a step ahead so i i think a sunday night exec call almost saves your team a half day half day otherwise if you do it monday morning and it's a one to four hour call then it's like nine to you know noon that next more you know for for a full morning for the the company and then it's like okay well we just had the meeting and so now like you know i'm in that sort of afternoon energy and i'm not ready to like crush the actual tasks if you do it the night before you can wake up that next morning and uh you know as as someone said today is going to be amazing let's crush it relentlessly

Um, something that you taught me is there's a difference between remote work and distributed work. And my thought process of it is that there's in office, everyone knows what that is. What is the difference between remote work and distributed work? Well, I kind of think the whole remote work debate is kind of stupid. a hundred percent of successful companies have people everywhere doesn't matter if you're an agency a tech company a doctor's a hospital you just got your people everywhere and the more big you get the more places your people are just gonna be there's gonna be specialists in canada you're gonna have call centers in the philippines you're gonna have engineering centers potentially

in different areas across the country. You might have reps in the field. You have your sales reps everywhere. The founder and CEO, you're all here in New York right now. Where should you be? You should probably be with customers if you're not working on your product. And so 100% of successful companies are distributed. The people are everywhere. And so for me, when I was running Yext, we had offices from Berlin to Beijing. And I always just wanted to kind of have in my pocket the whole company in one headquarters from anywhere. And that's why I founded Roam because I wanted to solve the problem of being able to have everyone in one office, even when they couldn't physically be together. Because when you're all here, when we're all in under this

one roof, and if we're all in desks and working and stuff, we have these quick, fast conversations. And, you know, as we've moved to this sort of Zoom calendar industrial complex, which I think Sam Lesson called it, we've all now begun to block these 30 and 60 minute Zoom calls for internal stuff. And that is why, you know, I founded Roam to get out of having to have that so you can just get back to having these fast, short conversations. So distributed work is really, I think, the correct term. There are remote first companies. I actually think what matters more than where the company is physically located is the cadence by which the work happens, whether it's sync or async. I actually think that's the bigger question that a founder needs to decide

much more than are we remote or hybrid or in the office room. What are the pros and cons of sync and async? Oh, I think async fucking sucks. No, I look, there's async work. I think there's some people that try to run their company like a computer program. and there's a lost element of humanity when you try to do that i think you can definitely do that when you have like a 35 person company i think by the time you get to 100 people and then 150 is when you start to not know everyone's name which is kind of weird for a founder like you

right now if you're a founder and you have 32 people your company like you are in total command of everything you know every single detail and you can sort of run it like it's a big giant document and you can do it in slack or google docs or whatever and you don't have to have synchronous work i think now i think humans by their very nature of being human need to feel a connection need to feel a human connection and i think that's part of the collective unconscious it's part of life it's a meaning of life to to be with people and to win together and to uh by the way that gets back to the co-founder comment when you're a co-founder and you win together it's like winning a battle together which makes you feel closer to people which is a cycle that repeats itself and

so when you're when you're working on something hard and you're looking out and you're eating glass jumping off the cliff into the darkness when you know that other people are doing that with you it just makes it a little easier so there's something about working with people being present that uh at the same time that brings people and i believe creates better business outcomes not because we're all collaborating on the idea but even if you're doing deep work you need to know that there's other people around you doing deep work too i don't know if we have a video that we're going to play they'll play it if uh yeah if we have it but while we're waiting for that um rome is this really unique thing where uh whether you have multiple offices or people

actually remote, you almost replicate the communication structure and a lot of the different things that you would do inside the office. And I almost call it like a lot of people call it a water cooler talk. I call it kind of bullshitting, but it's actually a really important function in a company. There's like a culture component to it, but there's also an exchange of information. There's ideas that come from that. Bringing that into a virtual environment is really hard right people don't just like randomly send each other zoom links and like yeah you want to jump in here and just like shoot the shit and so talk a little bit as to like the product design and how you all think about shipping updates and really kind of listening

to customers well yeah so i mean let me just quickly tell you a little bit about rome and what we're doing so first zoom was the first company to really solve the video conferencing technology problem and if you remember video conferencing before zoom it was absolutely terrible oh here we go cool so uh well here it is um this is your virtual office this is your whole company in one headquarters you can see everyone gets a shared view of who's where you can jump into different different kinds of rooms uh obviously we have all this stuff you'd expect like whiteboards and uh but one of the cool things about rome is there's different types rooms. That's a theater in the middle. You can give all-hands presentations in the theater.

The audio-only rooms, which are private offices, are the most popular room format. Believe it or not, 76% of meetings in Rome are audio-only. The average meeting time in Rome is just eight minutes long. Can you repeat that? The average meeting time in Rome is just eight minutes long. Why is that? I think it's because, going back to the Zoom thing for a second, we've all moved to these 30 and 60 minute meetings. And so things that used to take two people five minutes in an office right now are being scheduled for 30 and 60 minute Zooms next week. But if I need to just chat with Pomp about something right now and I see he's in his office, I can pop over and have that quick, fast conversation with him and we're just done. And not only do I save him time because

I didn't calendar him, but I also got the thing done faster because it was able to happen like now as opposed to waiting until i was able to like free him up and he could schedule something and whatever so we're just back to kind of this fast synchronous work and we've you know we clearly made this thing for ourselves and we've been using it but the velocity of which we are shipping is extraordinary uh you know now if you look just in the past couple quarters we can really compete with slack on chat we've got integrations we can we got something better than fireflies and otter So we can compete on summarization in our group chat with our feature called Magic Minutes, which transcribes and summarizes and then creates a group chat with everyone in it about the call. We have a catch me up feature.

If you're late to a meeting, bam, you'll get a summary right there with like what you missed that nobody else sees. And you can prompt it. You can say, was Pomp mentioned? You know, like I did, you know, in what context was Anthony said? So one of the pieces, I think, as I've kind of seen people start to use this product and folks have shared feedback, is that we talk a lot about shipping culture and shipping a lot of iteration of software very, very quickly. What you all seem to be doing is getting information to go faster inside of an organization. What is the importance of that? Because you're unique in that you're building a startup, right?

I don't know how many people Rome has today, but it's a lot less than Yextad. But you went through the full lifecycle. you've seen running the public company right from start to finish um and it almost feels like a lot of the decisions you're making today are specifically focused on not i'm trying to run a 10 company today it's i'm trying to set the foundation to run a public company that's worth billions of dollars and has you know thousands of i'm trying to give every one of you the foundation to run a billion dollar public company and just like why is the information speed so fast and such a big focus you know when you look at our own map when you're in an office you

get extraordinary signal about what's going on. So if you walk into a physical office, you can see who's there, you can see who's talking to who, you get a sense of people's moods, you can tell kind of the energy level right away. That is all gone. When you're on a zoom that's isolated in a silo. It's all gone when you're on Slack, and everyone's just chatting all day. But when you look at the Rome map, you can immediately get sort of a marauders map for the office. And you get a feeling for who's there, who's talking to who you can knock on people's door, it gives you this kind extra signal that you just don't get in a in a sort of zoom type zoom first microsoft team's first world um and you know we also talk to our customers all day long so that's the other thing

like in in rome you know we go over we chat with them we'll pop over we'll say hi uh and you know and pomp we didn't talk about this but i will say we're in closed beta right now and we're going slow uh i wasn't going to break everyone's heart that they can't sign up at the moment you can join the waitlist there's a thousand companies in the waitlist and we're going slow we have now 263 paying customers we're getting close to about a million dollars of arr but that's not our goal and i do have some advice for all of you in this which is don't let your vcs dictate a growth rate now you might kick me for this because you are probably an investor in all the companies here and um you do want to be able to say hey you need to grow x but i just think it's sort

of arbitrary it's like managing the economy centrally to set the you know to let a vc set the inflation number or something like that like whoops whoops the fed seems to not be working yeah it's like the fed the vc is like the fed basically setting what growth should be a growth target and like when you work backwards to achieve a growth rate say you know x percent based on where you are all you're trying to solve for is this like number that the vc said that you have to grow at that speed in order to x and you will end up doing things that are unnatural that may not be in the medium and long-term interest of your business examples of that are over hiring sales people or sdrs and pushing companies too hard to try you too soon before they're ready

and uh and spending a lot of money on acquisition that's otherwise not worth it so i i would just pretty much push back on any any sort of sort of working backwards from a growth rate you can only kind of do things naturally it doesn't mean you don't make smart investments and bets it just means that building a company is a little bit like building a garden and you just kind of have to do it piece by piece over time and it takes a long time and you should build something that you want to own forever and if it doesn't feel right when you hire an sdr it's just going to spam the world about your brand and potentially undermine you in the medium and long run just to hit a growth target so that you can raise the next round you're just playing a different game than building a

long-term lasting company. The last thing I want to talk about is fundraising itself. You're a successful founder, whether you like it or not. And so you have an advantage in some meetings, in others you may not. And you've had a lot of experience meeting with investors who gave you money, a lot of investors who told you to kick rocks and get out of their office, some who have laughed at you and some who love you because you made a lot of money in the IPO. When you went to fundraise for Roam, what was the strategy and why? well that was that was easy because when you've uh yeah come on guys it's easy that was easy well and i'm just being frank with you like that was easy because when you've made someone a lot of

money before they typically will will back you again so i don't unless you've done that with someone it's hard to kind of take that as like your strategy like i pretty much just called the person that i wanted to do the deal with i said this is the deal and then then and this is something you can do and i do recommend doing and everyone is doing this so it's not particularly a novel idea but we do have 55 incredible uh founders in the cap table so use your cap table as a weapon i think is maybe the advice there which is you ought to be thinking about who you can bring along this journey because um you know and i use the 55 people in the cap table that are great founders and ceos and well-known investors i like kind of treat them like they work for rome you

you know, and I give them assignments. I say, you do this, you do this, you do this. Hey, can you get me an intro here? And I think that you will find a lot of people that are willing to do this. And, you know, there's, there's another thing you can do too, which is make people advisors. But if they're willing to, if they're successful enough, you can get them to be an investor. So I recommend, I recommend trying to build your cap table with call it three dozen people that are, that are awesome. And you can do it later on too. If you've started and you haven't done that yet, you can certainly in the next round

add a dozen people to it. On this vein, raising a round, especially when you've been a successful founder, you close the round. The second that word gets out that you closed the round, a lot more people are interested. Some people will open an uncapped note. Some people will say, thanks so much for your interest.

I'll get back to you at the next round. Some people will ignore everyone. What is the strategy that you've seen kind of work best? I think it really just depends on your company and what your needs are, I don't think there's a single playbook answer here. If you need to have more capital, you can certainly take it in. If there's somebody you freaking love, let them in and uncap note. If you're set, you just shouldn't spend a lot of time fundraising. I really do think people raise too much money. They focus on what VCs think as the ultimate end. And that is really

not what you're trying to do because the most successful companies are not too concerned about VCs and investors. It's an important but not end-all be-all part of the game. Raise money from your customers and everything will take care of itself. The most important metric in your company by far, nothing else matters except net retention. If you have very high net retention, that means you have customers that love you. And you know what follows net retention is organic growth. Because when people love you, guess what they do? They tell their friends. And if you create word of mouth and you have people coming to you that have heard of you from a very happy customer, not only are you going to grow through the net retention of the existing logos because people

love you they're going to tell other people and that's going to make your acquisition costs go down if your acquisition cost goes down guess what you can charge lower prices and guess what when you charge lower prices it makes people love you more because you're delivering a higher roi to them so this whole thing is like a cycle where if you have high net retention you get lots of referrals which in turn lowers your acquisition costs which you can then pass on to those customers that helped you in the first place in the form of lower prices win win win win win totally do that don't worry about trying to grow at a billion percent just to you know just to make vcs happy don't raise your prices to grow keep people happy focus on net retention where can

people go to sign up for the waitlist uh where do they go to sign up if you want to check out rome so okay the waitlist is a little bit he feels so much pain he wants everyone to use it no it's at this wait list and it eats them alive and i love watching them suffer up here the wait list is a little fake there's there is a wait list there is a wait list but i'm going to just let you in on a secret when you sign up for the wait list actually what you're doing is you're booking a tour and you're booking a group tour and this is the cool part about this is one little hack that i don't really know why i'm saying this out loud but i will we we found that when we did one-on-one tours, they're cool, but then we basically started getting too many

people coming to us, and we didn't have enough people to do the tours, so we started doing these group tours, so when you go on a tour, it's a little bit like going on a college campus tour of Rome, where it'll be with a bunch of other people who you don't know, and it really just makes it fun, so that's what the waitlist is. You still are in line, but actually you join the waitlist by going on a group tour, so I would encourage you all to check it out and go on one of our fun group tours it's like going to disney world except you can go through the express lane and and experience the office of tomorrow ro.am and we'll play a little scavenger hunt game there's a gentleman named john who i'm not going to point out so you all have to find him

he told me beforehand that he will skim everyone to the front of the line if you find him which howard doesn't like but whatever um all right thank you so much i appreciate it Kick-ass.