This Week in Startups - E989: The Next Unicorns: Culture Amp CEO & Co-founder Didier Elzinga is building an employee analytics platform that keeps workers satisfied & motivated, shares insights on the changing role of culture, what modern employees value & maintaining culture while scaling – E7 of 10-ep miniseries

Episode Date: October 16, 2019

0:52 Jason intros Culture Amp's Didier Elzinga 2:44 How Didier's prior career in Visual Effects led him to start Culture Amp 8:24 Issues with yearly performance evaluations 14:15 Did Silicon Valley take culture too far? 17:35 What defines good culture? 24:24 Generational differences in workplace culture 28:30 How should companies view the gig economy in terms of culture and compensation? 37:12 How should compensation work in this era? 43:20 Didier demos Culture Amp 58:45 Jason gives Sir Charles positive/negative feedback 1:07:20 "Buying" culture and anti-fragility

This week in startups, The Next Unicorns, is brought to you by LinkedIn. You need LinkedIn jobs to find the right people for your business. Post a job today at LinkedIn.com slash unicorn and get $50 off your first job post. Embroker. The Embroker Startup Insurance Program helps startups secure the most important lines of insurance at a lower cost and with less hassle. Get an instant quote and $5,000 of AWS credit at Embroker.com slash twist.

While you're there, get 10% off by using offer code Twist 10. And NetSuite by Oracle, the business management software that handles every aspect of your business in an easy-to-use cloud platform. Get NetSuite's free guide, seven key strategies to grow your profits when you go to netsuite.com slash twist. Hey, everybody. Welcome back to this week in startups. It's our continuing series searching for the next unicorns. Or as we say here in Silicon Valley, pseudicorns. These could someday soon be a unicorn.

And, you know, we started the series, and two of the companies that we covered in the early part of the series became unicorns before we even finished the 10 episode run. And that's how good Emmy Award-winning producer Jackie is. She found the companies that were very quickly ramping up. So congratulations to them. Now, why is this important? It's not. It's not important that you have a billion-dollar company, but it is a sign that something has gone tremendously right in almost all cases. We will see once in a while a we work or a Theranos, maybe one out of a couple of hundred or a thousand could be a fraud or could collapse.

But generally speaking, the people investing in these companies do their diligence and figure it out. And so the reason we did this series is we wanted to introduce you to the companies that you may meet next year, the Sunicorns. And today we have a company called Culture Amp. And the founder is Didier, Elzinga. And you're Australian, correct? I am indeed. Melbourne or Sydney? Melbourne.

Melbourne. So you know my friend Andrew Bogot, I assume? Certainly. Yeah. Do you know him personally? No. Because basically everybody who lives in Melbourne knows him. Yeah.

Well, we'll look up to him anyway. He's pretty great. Oh, it's fantastic. Yeah. And a champion, and he came back last year. She's a really great guy. And he played a big role in Australia's last World Cup. Yeah, and they keep winning with him.

And if the Golden State War II kept him, things may have been different. I agree. I agree. That was a big, huge mistake. So you founded Culture Amp in 2011 or so, like maybe almost 10 years ago now, eight years ago? Yeah, as it is today, it was about eight years ago. I started on the journey about 10 years ago. Got it.

And you didn't raise money for about the first six years. You raised your Series A in 2015. In 2015, you raised about $6 million. What happened for those first six years? Did you have angel funding? Were you just tinkering? Tell me about those early days. We bootstrapped.

So I had prior to founding Culture Amp, I ran a visual effects company. So I used to work for Hollywood. Really? Harry Potter, Lord of the Rings, Batman, all of that sort of stuff. You worked on the Lord of the Rings? I worked on Lord of the Rings. Doing what? So we actually worked on the last film, Return of the King.

And so, you know, the shot where he drops the ring down into the pit. of doom. Yeah, of course. So we were doing, you know, blue screen shots. And it was essentially to get that film finished, they needed some help, whether did the bulk of the work, but then a bunch of companies came in at the end just to get it done, and we were one of those companies. Just for that one seminal shot? Well, we did about 50 shots on the film. It's what they call 911 work. Like, you've got to get the film finished, farm it out. Everyone jumps in and makes it happen. And what did you do? They were a project manager? Are you actually were a designer? Or what did you do? You own the company? So I started life as a software engineer.

used to work on RX workstations. Then my very first thing was writing a motion control system for soft image. Then I was a compositor, artist, and then I was the CEO. Got it. So I was the CEO. You worked your way up. Worked my way up. Through acquiring skills?

Yes. Would you say that was the number one reason you went up so quickly was because you had skills, or was it hard work or the both of those things? I think partly I put my hand up to do what nobody else would do. I mean, a lot of it, we were making it up as we went along. So work ethic. Yeah, when I joined the company, we were six people. And then by the time I left, we're about 200.

And people say, how did a company in Adelaide work for Hollywood? I'll say, we're too naive to know we couldn't. And so a lot of it was like, well, somebody has to do it. I'll step in and do it. Right. And the founders knew they didn't want to manage the company, so they asked me to do it. Got it. And it was partly why I ended up creating culture out.

Because, you know, you get to this point where I'd met Mike and Scott from Atlassian going through an entrepreneur of the year program. and got to become good friends with them, still am, and watch them grow their business. And they basically had a monotonic revenue curve. And I was running a service business for Hollywood. Like, not a good combination. And so there's a certain point where I'm like,

if I want to make more of a difference in the world, I'm going to have to build a different type of company. Yeah, service-based revenue is always difficult. You're living job to job. And the best way I've ever heard it describe to me is your entire life is managing how little you can play your employees and how much you can charge your customers, which means the two people you work with every day hate you,

one for charging you too much and one for paying them too little. Was that your experience? Probably wasn't that experience. The challenge, but I can totally see where you're coming from. The challenge for us is that in the film industry, film is driven by tax. So people shoot films where they can get credits and benefits and all these sorts of things.

And so the flow of work around the, the world. I mean, Canada went huge when they introduced a rebate system. So the challenge was you couldn't look forward and know what your work was going to be next year. And if the taxes changed or somebody else jumped the fence and gave more taxes, you had no customers. It's not predictable. Yeah. And so Return of the King, actually is going down a rabbit hole, but that saved the company. Because if you remember, like that was 2012, late 2011. It was early 2012. Because we were working on films post 9-11. Post-9-11, there was a pocket that went through the film industry because no one was making

films. Right. And so nine months later, that hits visual effects because no films were shot nine months ago. Right. And so there was no work. And so we had nothing. And we literally looked at everyone and said, we can't pay everybody two weeks from now. Two days later, we got work on a lot of the rings.

And that became the rebound for the company. And Rising Sun Pictures still exists today as one of the top 10 visual effects companies in the world. What's it called? Rising Sun Pictures. Rising sun. Yeah. Oh, wow. And you were the CEO of it by the end.

Yes. But you noticed how much culture and the review process and communication with employees mattered. Correct. What was the most acute, brutal part of managing culture and reviews that you witnessed? What was the pain and the suffering of all that part? Where did it break down? it was interesting for me it was not so much that it was breaking down at where i was at rising sun it was more an observation that as a CEO you were essentially a glorified psychiatrist like people and culture

was the biggest lever you had and so i was looking at that thinking well okay how do we do this better and i was heavily influenced by a lot of the early agile stuff and so what we were doing at rising sun was applying a lot of these ideas you know how do we bring people together how do we make people successful and we were able to create what I think was a pretty powerful culture and so it was not so much that I'm like this is broken I have to build software to do it better it was this is fascinating there is so much opportunity here and then when I went looking for software that I could help and could support because I had a software background I built a software company in the film space already doing color management software so like all right I want to build something bigger I'm going to build a

software company I was looking at it thinking about people culture and there was nothing out there And I actually started the company on looking at performance reviews thinking, okay, this is a universally load once a year backwards looking process. Where did it come from? Where did the once a year, let's have you write up what a terrible person you are, but give yourself some compliments, but don't give too many, and that I'm going to sit in judgment above you and try to remember February as if it ever mattered and try to neg you. so I don't have to give you as big of a raise, but then try to keep you here and motivate you. It's just a weird concept. Is there some background to how we got there?

It's actually a really good question. I mean, it's one of those things that a lot of management practices evolve over time. Someone says, hey, this is a good idea, and then they grab it and they run with it. But what we found at that time that was so fascinating is we're looking at going, this is broken. And actually, my original inspiration was I had a Twitter feed for the search success factors sucks.

And it's like anybody complaining about it. I was looking at why they're complaining. But what I realized was they're actually really smart because the problem at that point was everything was an offline process. So this was like SAS 1.0. We have a paper review process. And it might not be very good, but we don't want to do anything except take that online.

And they were very good at selling that idea and they did a good job of it. And it's interesting now that people are starting to go, you know what, that process that was broken offline is just as broken online. and we need to reinvent it. People should not be reviewed once a year. They should be checked in on.

You should do a walk-and-talk, a temperature gauge every quarter, every month, every week, or every day. What's the best practice in your mind? How do you earn your own company? So it's all of the above. Oh, no. The thing, though, is that software and any tool can't do all of that and it shouldn't. I mean, at its heart, It's about people talking to each other.

So great feedback needs to be given in the moment. And you need to say, hey, that one thing you just did there, this is how it landed on me, this is why I think you could do it better. But you also do need the opportunity to stop and reflect. And so good managers are doing that weekly, most likely. Got it. A weekly one-on-one is the foundation of any good performance management system. And you don't need software for that.

So weekly one-on-one is the state of the art. That is the best practice. That is the most important part. Got it. What happens in a weekly? one-on-one. What should the format be? It depends on who the people are in the one-on-one, like what level they are. Let's say managers, senior executives in a software company, startup, whatever. Yeah. So, I mean, the opportunity for the manager is really to use this

as an opportunity to work out how to help. And to also hold people to account. So it's, okay, what are you working on? How can I help you with that? How can I coach you through things that you need coaching on. It surfaces things that need awareness and it's an opportunity to give people feedback in an ongoing way. You still do need, whether it's a quarterly or an annual or whatever process to take stock of that. So you sit back and say, hey, well, you know, look at what we do in business. You can't run a business with only a cash flow, but you can't run without it. So we need these sort of multiple different time steps to look at different things. Because if I'm going to evaluate your performance week to week and I never stop to go, well, have you gone over the year,

we miss an opportunity, mainly because the thing that people really want, and this is what our data shows, they want to know they're growing. They want to know they're developing. And so you actually have to occasionally stop and say, where do you want to be two years from now? What is that journey? And am I helping you? And are you on track? And is there anything holding you back? All right. When we get back from this quick break, one, I want you to show me the product a little bit there. I know you got some good demos. But also, I want you to tell me, has similar. Silicon Valley over the last 10 years gone overboard with culture to the point of entitlement where people are expecting work to give them all their fulfillment in life as opposed to

getting stuff done that serves the mission of the company. We have a big movement on limited vacation work from home, unlimited food. Have we taken it too far here in the Silicon Valley? When we get back on this weekend service. I am loving this Sunicorn series. It's so great to find these next unicorns. Thanks to our friends at LinkedIn Talent Solutions for sponsoring this special series. And of course, you know, hiring is really hard. And it's not as easy as just posting a job to a bunch of different message boards

or maybe even putting an ad in the paper. If people still do that kind of nonsense. Nope, when you're growing your business, you need to reach the right candidates at the right time. And that's where LinkedIn comes in. And that's where I got Sir Charles, our amazing new producer. He wasn't looking for a gig, but he was on LinkedIn, and he saw, hey, this weekend startups, this great podcast is looking for a director. Hey, I'm a director. I don't like the job I'm in.

It's okay. But this other job seems pretty dope. And boom, he was one of those 600 million LinkedIn members who is there looking for connections, passively searching. They don't know they're looking, but they just, they pass by. Maybe they take a look. That's who you want. And those are the people on LinkedIn. So Associate Press, Fresh creates a job, post.

for me, client success manager in Toronto. He selects the needs, the description, add some additional screening questions, and he sets a daily budget, and boom, we're on our way to finding great candidates. And it works so well, and you can pay what you want, and the first $50 is on them.

That's right, $50 right now, a 5-0. LinkedIn.com slash unicorn. That's right, U-N-I-C-O-R-N. You know how to spell unicorn. LinkedIn.com slash unicorn get you a $50, $50. Go find somebody great to take your startup to the next level.

Thanks again, LinkedIn. All right, Didia is here from Culture Amp. They are working on culture and reviews and processes for people to have strong culture and keep their talent. At the end of the day, you want to keep the great folks. And let's be honest, you want to get rid of people who are duds. You want to identify when people aren't working. You need to have a conversation.

You need to have a conversation. Wow, so elegant. So nicely put. I was going to say you need to kick them the hell out of here. Sometimes. Kick up to the curb. Well, sometimes someone staying in an org is not good for them. It's not good for you.

It isn't. Almost every time I fired somebody, like four to five times. They were either looking or it was a relief. They didn't want to be there, but they didn't have the courage to quit. Sure. And the mistake that we often make is that it's a surprise when we go tell them that we don't think they're doing well. And so that's what we have to do as a manager is to make sure that's not a surprise. Right.

That's true. When we, before we cut for the break, I was asking you about Silicon Valley culture. And it was largely a function of two companies, I think, Zappos and Google. Both were leading a cultural revolution, as it were here, of free food, free services, free everything. And at Google. And then Tony was more people making connections. and the culture of being friends at work and really building deep relationships with your coworkers.

So did we take it too far, yes or no? Have we? I think there's a Buddhist phrase which I like, which is don't mistake the finger for the moon. And I think... Don't mistake the finger for the moon. So I'm pointing at the moon. I want you to see the moon.

I don't want you to see the point in my finger. Got it. And so when we talk about culture, particularly in Silicon Valley. One of the problems is people look at some of the trappings, the perks, if you will, and they go, that's culture. Perks are not culture. Perks are not culture.

Not at all. Actually, one of the companies delivering... Perks are perks. One of the companies delivering happiness that worked at Zappos. They have these beautiful stickers where they walk around and they stick them on the bar keg and they stick them on the table tennis table and says this is not culture. What's interesting, and so I think we have gone too far in some places,

because people are like, you should expect all these things. And there's a, I think it was Mark Andreessen made a tweet about Laslo's book where he talked about what Google did. And because Google did some amazing things on the people and culture side, not on the perks side, but in terms of researching what actually works and doing their own research, taking it out of the lab and putting it into companies. But what Mark's tweet was, there's a missing chapter to the book, Work Rules. It says, first create a search monopoly that generates billions of dollars in revenue,

and then you can do all these things. Right. If you have a money printing machine, by all means, hire three times more employees than you need because nobody will complain because you have a money printing machine. And Henry Blodge it early on was like, do you realize that Google, if they stripped away all of these perks and all this craziness and all these superfluous projects would cost one fifth or one tenth of what it cost to operate, which would then increase their margins. massively. And Google was like, yeah, we don't need to do that. So it's not about free food. It's not about unlimitedification. What is it about? What is culture about in your mind? What is good culture? I think the most powerful cultures are ones that make you as an individual want to be a better version of yourself. So there's something about that company that elicits that. Makes you the best version of you. Makes you want to be. That's the that's the that's the, that's the, that's the power. So they're not pushing you to do that. They're creating a framework in which you yourself

opt into doing that. Yeah. And sometimes that, you know, that doesn't mean it's without pressure. Sometimes pressure is what we want to be that version. But there's something about the mission and the purpose. The values of the company are incredibly important, the way we show up and interact with each other. So that when you turn up to work, you're like, there is something about this place that connects with who I want to be. And it makes me want to be the better version. It makes me want to work harder. I like that interpretation. And we do a lot of work in engagement, helping people measure it and improve it.

Wait, wait, define engagement in this context. Yeah, so the simple test that I use, and there's a, the kind of broader version that a lot of people say, it's the emotional commitment of your people to the company's goals. Emotional commitment, not commitment, emotional commitment. To the company's goals. To the company's goals. So if my goal was to run 12 accelerator classes, and hit 100 investments next year,

how emotionally connected is my team to that goal? Yeah, and a lot of that obviously comes from them feeling it's good for them and connecting with themselves. But the easy test for it is what I call the 5 o'clock test, which is not that anyone works 9 to 5 anymore, but if you did, you'd be surprised. You're walking out the door and the phone rings from a potential customer, do you take the call or not?

That's engagement. That's it. Yeah, like, if you're not engaged, you're like, it's past five o'clock's not my job. I'm not going to do it. Not my problem. If you're there, you're like, hey, I'll take it, see what it is and see if it's something that I can deal with tomorrow, but I'm going to take that call and take responsibility. And when we talk about building engagement, we're talking about building a place where people want to stay. People are proud. People want other people to come and work here. And people are willing to go beyond what they would

somewhere else. That's essentially the definition of engagement. Why is working hard considered a negative today, at least here, at least here, in Silicon Valley. In Australia, I didn't see this, but in Silicon Valley, 10 years ago, it was a badge of honor to work on the weekend or stay late and ship extra product and have your company do better. And today, a large group of people who are already rich are admonishing people to not work hard and to have balance. Should you have balance? Or should you work hard and succeed in your life and career at the highest level? Interestingly, we have a set of questions around work life.

We call it work-life blend, not work-like balance. Balance is really hard. And I think the reason why we're having this conversation today is partly because the economic labor, what it's creating, like intellectual capital, like I have a slide which shows tangible versus intangible asset backing of the S&P 500 since 1975 to today. tangible versus intangible. Tangible would be, what's the best example, tangible?

Factory, factory, bricks, money, all that's... Intangible would be? Culture, brand, anything that's in people's heads. Got it. So Apple's designers and what Johnny Ive is dreaming about creating next week is intangible. And the logo Apple that makes somebody spend $600 on a watch that's not as good as the other Samsung one is the other intangible, the logo. go, the brand. Yeah. And so the shift since 1975 is in 75,

it was 80% tangible. So 80% of the value of the S&P 500 was intangible assets. Now it's 80% intangible. And so that's important because the value that we're creating in the businesses we're building is intangible. And when you look at intangible work and you look at knowledge

work and you look at software development and brand building and all these sorts of things, there's not a linear response between time in and value out. And so when you think about the fact that, you know, Johnny the Ives going to sit down and design the next iPhone, it's probably more important that he had a good night's sleep than that he worked 36 hours straight. Yeah. And so some of it is coming from a better understanding of how values created that working 80 hours doesn't always create better results.

The other part, which I think is equally important, is we're understanding the effect that work is having on people's mental well-being. And that is a huge challenge because we're seeing that the way people are having to work, and it's not just the hours, it's the stress, it's all sorts of other things, is manifesting in depression, in anxiety. I mean, depression is now the third largest health bill for the world after cancer and cardiac. And so from an organizational point of view, we have a role to play in that. And so getting people to work 100 hours a week is not sustainable and not good for people's world being. Yeah, 100 sounds crazy, but let's say a focused 50 or a strong 60, is kind of what this town was built on.

I agree. So hard work. Hard work is always important. And I think it's very difficult early in your career to get anywhere without working your ass off. Which you did. You learned every software package. It became the CEO of a 200 person company.

You started as the lowest guy on the totem pole. Yeah. And I learned in film I had to work all the way through the night. I did all of that stuff. I realized that I couldn't function that way too, but I had to get through it. but pay your dues 10 years ago it was glorified to sleep in the office right now we know that yeah if you sleep in the office once you're fine you do that week after week your family's going to suffer your health's going to suffer and it's not worth the cost and so in the middle is something right

got it um is there generational differences or are there generational differences because this seems to be something that my perception is people put a little too much thinking into that. There's some hard line between boomers, gen Xers, millennials, and Gen Z. That being said, it is striking to me the difference between my parents and, you know, boomers and Gen Z, where they thought they should have a job for 30 or 40 years and get the watch. And we thought we should work there for four or five years, get the hell out and start our own companies. And now we're faced with an employee group that's looking at you saying, like, why am I even here? I could be working 10 hours a week as a consultant and not even take a full-time job.

So are there differences between these generations, do you think, or is it overblown? I think it's overblown. Okay, why? So, first of all, when we talk about millennials, Gen Y, Gen X, what we're actually talking about is a cohort effect. So what happens is people have different sense of expectations at different points in their life. And if you go back and look at the statistics, there's not actually a lot of difference

in those worldviews over the last 30, 40 years. there's been a slight increase in narcissism, surprising. Slight. Although some people attribute that actually to the U.S.'s dominance in the world stage. Hold on. I just need to feed my Instagram for one second. I need to get one more selfie. But I think the challenge or the problem with saying that it comes from, you know,

millennials or anything is we're actually missing the point. What's happened is that work itself has changed. So back in 1938, Henry Ford said, Why is it when all I want is a pair of hands? Sorry, why is it when all I want is a pair of hands? I get a brain attached. So that world of work was just give me your hands. I'll tell you what to do and then turn your brain off and get out of the way.

Going back to what I was talking about tangible and intangible, now you need the heads. And when you want to motivate someone's head, it's a different interaction style. Yeah. So the truth is the modern world of work is different and they do need things, but it doesn't matter whether they're 15 or 50. If you want to motivate them, if you want them to be engaged, you actually have to treat them differently than you did. And we also forget, like, back in World War I, World War II, we had kids that were, like, at age 20, leading fighters squadrons. Yeah. You know, taking on massive amounts of responsibility early on, no idea what they were coming back.

Yeah, no idea what they were coming back to. So this idea that things were always stable and long term is not true either. Right. Things change, but they also stay the same, probably a lot more than we think. And so I think people do themselves a disservice by attributing it to generational effects. When we get back from this quick break, I want to see the product. And I want to know what is the proper way to compensate people? Is it with more money or with more time off and more freedom when we get back on this week at startup?

All right, listen, you need to have insurance for your startup. I do. And with me today, Matt Miller from Embroker. He's the CEO and founder. Welcome to the pod. Thanks for having me, Jason. All right. Tell me, what is the Embroker start?

program? The broker startup program is the first fully digital insurance program for startups. So we can provide startups with all the coverage they need, less than five minutes, save them a bunch of money. Amazing. You just fill out a form. It's like checking out at Amazon? Like checking out in Amazon. That's easy. Basically that simple. So the imbroker startup program has been around for a year. What have you learned? During the last year, we have signed up over a thousand companies for the program. So yeah, I think that's the first learning is that there's just a lot of demand for reinventing really painful of running a business. Yeah.

I think the second part is that the status quo is probably even worse than we expected. A lot of companies were paying two to three times what they should have or were just missing coverage for really important parts of their business. I think the last part as well is that when you take something that's this painful and you reinvent it, you actually generate a ton of customer goodwill. And I think royalty. So even in a category like insurance that no one wants to talk about or think about, we've seen a lot of customer-driven growth, which is unusual and exciting.

So get an instant quote and the $5,000 in AWS credits right now by going to imbroker.com slash twist, and when you check out, use Twist 10 to get 10% off. Thanks for coming in, Matt. Thanks for having me, Jason. All right, Didia. Spelled D-I-D-I-E-R, Didia. Mm-hmm. But the original pronunciation, D-D-D-D-A.

D-D-E. D-D-E. That's the French. That's the French. But Australian DDA? Mm-hmm. All right. It seems to me that a large group of people are valuing, not commuting, not coming to an office, and working less over salary and compensation.

How should employers, leaders, CEOs look at that? Should they be embracing this and giving people options? Would you like a half-time job, full-time job? Would you like to switch and make the jobs in their company like the gig economy where people punch out and punch in and just get paid by the hour? Or do you need just to hire for people who want to work full-time and other companies hire for people? Can you run these two systems in the same company? It's a really interesting question that we're all struggling with.

And I think you're seeing companies like InVision and GitLab building very different style organizations at a scale most people thought wouldn't work. Fully remote. Scale being. 800 people, 800 people, 100 people, you know, people are like, oh, that's fine when you got 30, but it'll never scale to something bigger. Now, can you do it at 5,000 or 10,000? That's an open question.

800 people not going to an office every day, getting paid extraordinary salaries. Yeah, all working together in different ways. what's interesting, I have a somewhat contrarian view on this in that I worked in Hollywood and if I got a dollar for every time I see an article that says the future of work is the Hollywood model where everyone's a freelancer and we just pick the best people and we pull them together and we make expendables 97. It doesn't work. It doesn't work because it takes time for people to build relationships. And so what I actually think's happening is we're seeing the workforce sort of bifocate. So you're getting this huge gig economy, which is essentially

transactional like Uber and Uber Eats and all these other things. But on the other end, we're trying to solve more and more complex problems like climate change and AI and so on. And to do those, people need to work together for long periods of time. Right. And so I think it's actually the anti-gig economy in the sense that you need to create coherent, consistent groups of people. It's the brain trust economy. Yeah. But the question of what do people value? People definitely value some flexibility. I think there's a lot of interesting questions in, you know, urban planning and commute times and how do I interact. But we're also trying to struggle with human.

We get on so much better with people when we're face to face. I mean, I have an office in New York, London, San Francisco, and Melbourne, and it's so hard for us all to maintain a single view. And so I have a... To maintain a single culture. Yeah, it's tricky. Fifdoms will arrive. So I think there's, it's definitely changing.

There's more opportunities to work in ways we haven't worked in the past, but how it's going to met out, I don't know. So on the comp front, we famously heretically are one of the few companies in the valley that has built a sizable business without sales commissions. So we don't pay sales commissions. What? And I walk over here and it looks like people look at me as if I have three heads. What?

Hold on a second. I need a record scratchy here. You hire sales. Yeah. We have people that we're in. We have people that we're in presidents. And you pay them X amount if they sell. Y and then you pay them X amount if they sell Y times two.

Correct. Or Y times 0.5. Yeah. What salesperson does not want to have compensation tied to performance? Or are you hiring non-salespeople and calling them like ambassadors and something? No, no, we hire dotting the wool salespeople. So you're hiring cutthroat salespeople. Yeah.

and then removing the scoreboard. No. They still have a scoreboard. Exactly the same scoreboard as everybody else. So they see what their sales are. Yep. But they don't get a commission check. Correct.

So if you and I are in the same sales pod and you put up a million this year and I put up 700, we get compensated the same. Correct. And all you get over me is bragging rights. Correct. And it's working. It works. Do you want to know what?

Yeah, I'm perplexed. Why does it work? Well, you go to reverse. it the other way and go, why do we think you have to pay commission to salespeople? So why? Why is it that you, why is it such an orthodox view that you have to pay commission to salespeople? It feels fairer that people get compensated based on their performance. Just like LeBron James gets more money because he puts the ball in the basket more often than other players. But he doesn't get paid to win a game. He gets paid at the start of the season.

That's true. but he explicitly gets a large contract because they know he's going to win a lot of games. They're not paying him to lose. Correct. And we do the same. So if I haven't experienced salesperson, I'm going to pay them more than a junior salesperson. Okay.

But the difference is the transactional nature of commission. So commission models are based on the idea that you have to motivate performance. That the way you get this performance out of salespeople is you put a money value on it. And if you don't do that, they won't get out of bed. It was invented for door-to-door salespeople. to get them to work for free?

Well, to manage the risk, but also to give them a reason to slog through street, after street, after street. And the thing that made it work there is there was nobody but them. Like if they didn't walk that street, nothing got sold. And if they made the sale, it was them. There was nobody else doing anything to help them. In today's world, that's just not true. And so, first of all, we've known since the 50s that money's not a good motivator for complex cognitive load. If you want to stack 100 bricks, it works well.

If you want them to solve a complex problem, it doesn't work well because it inhibits risk-taking. Is sales complicated? Sales can be, yeah. I mean, if you're trying to sell, you're trying to help a company make a decision to move from one platform to another, there's a lot going on. The second part is sales is a team game. So if the salesperson's skill was the only thing that determined the difference between A and B, then commissions work really well. But in a lot of situations, what territory did you give them? Which sales engineers did you give them?

Who got other types of support? Got it. And so the way I think about it is salespeople are human first. And what we know about humans is money is a very crude and very poor motivator. And the thing to remember is when you align incentives around money, you misalign them around everything else. And so the difference would be if we use commissions on LeBron, LeBron would get paid if he scores a point at the end of the game. In fact, why don't we give him a spiff where he gets twice as much money for the points that he makes in the last 30 seconds? I do think they get paid for the playoff games, but it's not so.

much money that it impacts their full thing. Their full salary, I don't think. But yeah, I think winning games, that would be an amaze. If the NBA worked like golf or something where they just said, listen, there's $2 billion in salaries. And $200 million of it goes to the non-playoff teams, and $1.8.8 goes to the playoff teams. And $1 billion of it goes to the two people in the finals. And the other $800 million gets split between the other teams in the finals. I guess that would be 16. So I don't know. The last four teams split a billion. They get 250 million on average and everybody else gets less. Woo. 500. Yeah. I mean, some people get like a little bonus for averaging more or whatever. It's a little minor incentives, but not major ones. That would be a crazy league.

Yeah. Interesting. But what you want to avoid is end of the game. I'm LeBron James. I've got the ball. If I hit the three, I get a spiff. If I pass, I don't. Right. That's the problem. Yeah, that's Carmelo-Anthony problem. Isso-Ball problem becomes pretty acute. How do you think about people working part-time, let's say, versus full-time? Because you said this is a very dicey issue that has not been resolved. We're in the thick of it right now. I have been considering that if, let's say, you had, I don't know, 10 people getting paid,

come up with a number, $50,000 a year working from home. Ten writers. Yeah. And you said to them, you're expected to work nine hours a day, 45 hours a week for $50,000. Or you can work four days a week for 40 or three days a week for 30 or the minimums two, for 20. Do you think that letting people work that kind of schedule and pick it and change it over time would work? and vary their compensation.

And this sort of duff tells us my earlier question about, how the hell should compensation work in this era? How often should people get raises? Because yearly seems like dumb to me. I'm almost thinking people should get like a four-year contract. Like I'm in the venture business now, so I'm thinking like I'm just going to give people the life of the fund contract. So you get compensated during the, you know, investment phase of the fund,

which is typically four years, not the harvest phase. You get paid for that work and a certain amount and don't ask for a raise every other year or every year or every six months. You're just going to get paid for the life of the fund, this amount. What do you think of these two concepts? I think the thing that drives all of this is talent as a marketplace. And so what you do needs to be aligned to giving people a reason to stay. I mean, what we're seeing in the valley now, which is interesting is engineers, for example,

are saying, rather than me working somewhere for four years, what I should do is take a leaf out of the VC's book, and I'll work somewhere for a year, hit my cliff, get 25% of my equity, and then go work somewhere else. So at the end of four years, I've got four 25% tranches, not one 100% tranche. And that's crazy because, like, that's not working for anybody. They've got to, you know, re-spin up and so on.

But I can see why they're doing it, because they're in a space where, you know, everyone is rolling on the dice, and they're like, how do I know that the company? I'm going to, I only get a few shots at this. I need to spread it out. So I think the idea that people can work less, giving people that option can open up the opportunity for the market hugely. So I know that certain companies that were really struggling to get female engineers, for example, one of the key things to opening that up is allowing part-time work.

You allow part-time work, you can now access people that otherwise felt shut out, and they might be just as talented, but for whatever reason, they can't yet commit to full-time work. So I think there's a lot of benefit in it. the cost on the organization is how those people interact with each other. Like how do you set a meeting when you don't know who's in, who's out? And it's like, oh, I want to have a meeting on Thursday. I don't work Thursday. Meeting on Tuesday.

That's what we struggle with. And so I think there are certain roles like writers and so on where you can kind of go, look, as long as you produce the output, I don't care whether you work two days or four days or five days. And then there are other roles which it's harder and time zones don't help. So I think that's the challenge. What I think we're seeing on the salary start, certainly on the more progressive, end is actually a shift. So there's a really great book called Prime to Perform by Neil Doshy and Lindsay McGregor. Primed to perform. And they talk about how you drive adaptive performance.

What does that mean adaptive performance? So it's how do you get performance from people when it's a complicated environment. So it goes back to what I was talking about earlier. People don't know what to do yet. They've got to make it up. They've got to figure it out. So software engineering and all these sorts of spaces. And one of their key ideas is implementing rather than pay for outcomes, because that creates all sorts of maladaptive behavior. Incentives matter. Yeah, incentives matter. Why don't we do learn to earn, which is we will pay you for your skills because your skills are marketable. And so what we want to do is like, you come in here and we'll pay you here. If while you're working for us, you can get better,

we'll pay you more. And so, oh, I like it. Yeah. And it motivates well to what drives us because we're doing it because we want to get more money, but we're also doing it because we feel good when we learn. Perfectly aligned. You add a new skill. We had $1,000 to your salary. So if you were an audiovisual person, you worked like my engineers here in the podcast studio, if they learned how to, no, I mean, it would have to be something significant, like

learning how to use a soundboard, not a big deal. But if it was something big where, I don't know, they learned how to, they learned paid marketing and how to do paid marketing or SEO. and they took a course and they mastered SEO. Search engine optimization, you say, your compensation next year will go up if you add one of these skills. Each of these skills is worth $3,000 a year to us for you to have. Here's a list of the five skills the company needs.

If you add these skills and you become great at it, we'll do that. And then you have to have some way of knowing that they actually have proficiency. Correct. So you have to have a way of measuring it. You have to have a way of helping people go on that journey. But that's what we're saying. That's the more progressive end where companies are thinking about that. That is fascinating.

Hey, everybody. I'm here with my friend Jason Maynard, who works at NetSuite. Tell everybody, what do you do, Jason? You know, I do many things here at NetSuite, but I run the field operations for the business unit. And field operations means what? Sales, marketing, business development, all the stuff in terms of how we acquire customers, take care of them, service them, make sure they're happy. I know what NetSuite does, but for people who are listening, what's the right moment for a start? to engage with NetSuite.

Is it at 10 employees, 50, 100, at 1 million in revenue, 10 million or 100 million of revenue? It's a good question. I think people should engage with NetSuite when they start to lose control over the visibility in their business. So it depends on if you're a venture back company, that can happen pretty quick because once you start raising money, then all sorts of pressures and expectations come on you. We deal with some family-owned businesses and other startups who maybe a little bit later in their life cycle.

But it's really when that complexity takes its toll. What's the amount of effort I should expect to put into implementing Netsweet at my company? Is it a 10-hour process, a one hour, a 10-month, a 10-week, 10-day? You know, we've been focused more and more of the last two, three years to make that as simple as possible and sort of simplifying our packages. So if you're a small business, just getting started, raised an A round or something like that, you know, we should be able to get you in in 30, 45 days, get you up and running. And our goal is to make it as simple as possible.

for you. And so that hopefully can get you what you need to remove the initial layer of complexity. And then as you grow, you can add more of what you need. All right. Right now, NetSuite is offering you valuable insights with a free guide, the seven key strategies to grow your profits. So go to netsuite.com slash twist, netsuite.com slash twist and get that free guide. Seven key strategies to grow your profits. We appreciate the work you're doing in the startup community. It's great stuff. Thanks, pal. Thanks. All right. We'll be back one more. All right. Show me the, show me the product. here. Yeah, I love to. Here we are at Pied Piper, the famous company. We use Pied Piper and

Huli as our demo accounts. Perfect, perfect. I'm team Huli, by the way. Just saying now. Engagement, 75% baseline engagement survey up for by comparison. Yeah, so there's a lot of stuff going on here. Let me just set the scene for you. Like, what we do at Culture Amp is people and culture is the biggest level you have with a platform to drive that. So we're a people and culture platform. define engagement here. It's how much people love or emotionally, how they are emotionally invested in the goals of the company. Correct. You said that earlier. Yeah. But the problem we're trying to solve is a superset of that, which is how do you help collect all of the data that you

need to understand your culture and your people? How do you understand that data? And then most importantly, how do you act on it? So what are you going to do? So what we do is we give people the tools to do that end-to-end. Got it. So the platform is an end-to-end platform to help you collect data in all these different places. So we have both an organizational view and an individual view. I'll talk about the organizational first or like a 120-second demo and then I'll jump

into the performance, the individual side. So what we're doing is we, our first employee was a PhD in psychology. And so ever since the beginning of the company, people science has been at the heart of what we do. And what we're really doing is bringing the insights of the last 20 years worth of bio-psychology to bear on organizations. I-O. Industrial Organizational, for people who don't know. Thank you.

A very niche portion of the psychology spectrum, which I was my second choice for my PhD in psychology. First was criminal, also known as forensic. My second choice was to go to Stevens Institute to study industrial organizational. Yeah. And so what we're doing is there's been all this great research on how to make people successful at work, but most companies aren't using it. And so how do we take that and make it accessible?

And so we start by giving you the tools to say, okay, what is it you need to measure so you can find out what's going on. So we give people, you know, all of these templates, all of these abilities to get in and create. So I see quick engagement survey here for those people who are listening, not watching, or an engagement survey. So here's the engagement survey and you give them the questions. I don't have to know this science. Correct. You're going to let me edit the survey, but you're going to tell me what questions. Yeah.

So you can walk in with no knowledge and we'll give you an out of the box, best in class. We work with 2,500,000 customers globally now. And so what we're giving you here is the best of what all of them are using. So, as you were saying, engagement is emotional connection, how do you measure that? But then how do you measure the things that lead to it? So are they confident about the company? How do they feel about leaders? All of this, all of this, right?

So we allow you to. And the way that would manifest, I have confidence in the leaders at Pied Piper. Yeah. The leaders at Pied Piper keep people informed about what's happening. That's a good one. And I see here you have a gree, and it's like a one to five scale. Correct. From yellow to orange to red.

Yeah, if I pull up the preview for you. I'll just shut up here and go. Actually, I can do it off that screen. You see. Boom. And so the idea is this works on a tablet. It works on a phone. It works on a computer, wherever it is.

People like taking these or they feel it's corny. I mean, it depends. But at its heart, you're giving people a voice. And one of the big things we do is we manage the confidentiality. So we capture everything and then we only display aggregate results back to the company. Unless I pay for the pro version, wink, and then I can fire that person. You slam me in the reviews, right? If I had a, yes.

I've been offered a lot for that particular feature, but no, we won't build it. You literally do not have that in the product. Anyway, no backdoors. No back doors. What if somebody has anybody ever came to you and say, listen, we have a rogue employee, we need this data. How do we get it? I have dealt with organizations where they've had serious things that have been risen, and we've actually had to work out how to help preserve that person's confidentiality and to address the issue.

And so we take that extraordinarily seriously. Hold on a second. That sounds a little bit carefully worded by a lawyer. So what actually happens? Yeah. So in this situation, just to... What are you talking about here? Like some sexual harassment, something happened or a crime?

Somebody gave an indication that they were... in a very bad place. Oh, and they might do self-harm or harm or harm in the workplace, shootable workplace. Not that bad, but more to themselves. And so in that situation, what we did was we just spoke to the company about it because they saw the feedback, but they don't know who the person is. And so we said, okay, we will not reveal who the person is. But what we did do was we found a way to speak directly to that person, gave them the

option to not respond at all because they have that option, but also gave them the tools that they needed at that point. So we did some work with an external party to make that happen. Love it. And what's so important on this is you have to create a safe space. Yeah. Because we're helping companies, yes, we're helping companies measure engagement. We're also helping them grapple with issues of inclusion.

And we're helping people think about diversity and where it's working or it's not working. Yeah, you want candid feedback. And so you're telling people when they take the survey, there's no way my boss can see my answers. Correct. They know that. Yeah. Because when you do other survey tools, you might have an IP address associated with it. You might have some secret cookie.

Yeah. People could really put something sneaky in there. But in this case, you had somebody who maybe had suicidal ideation or something was going to harm themselves. And you got a third party to engage all the employees and say, if you ever had something you wanted to talk about, here are the resources, including that person. So they weren't outed just by the nature of reaching out. Yes. Yeah. So clever. It's tricky. It's a clever solution, though. I mean, you really do want the person to have that anonymity. But if it's a cry for help, you also want to know people. who are listening. Yeah. And I mean, that's only at the extreme. Like, we literally deal with millions and millions of pieces of feedback every year.

And this has come up a handful of times. Exactly. But you've got to be ready for it. I'd like your answer. And so the important thing is on the other side, like great, you've got a tool. So we give people when you're on board,

when you're off board, while you're there, how you feel about your manager. Any way where we need to collect data on the inquiry experience, we help you set that up. And then the question is, well, what do you do with the data?

So we bring it together into real-time reports that can be delivered at every point in the organization. So every manager and department and so on. And we help you understand that data. So how are you going? We have one of the more sophisticated benchmarks available on this. So we have, as I said, 2,500 customers globally from 50-person startups to 100,000-person enterprises.

I think we're in 47 countries now, multiple languages, all of that. And here, it says compared to new tech top 25%. So I could benchmark Huli and Pied Piper, or if I was at a lot of it. Huli and you were a pied Piper, we could say, hey, the top 25% of tech firms in New York. Yeah, so we have about 80 different benchmarks, depending on what you want to look at. So I could actually see my engagement versus my contemporaries or a group of people I would hope to be contemporaries with someday. Exactly.

And who are you losing your people to and that type of thing. That's the sort of stuff you care about. So we tell you how you're going, how you compare. We also tell you how you compare against in the past, like am I going up, am I going down, what's going on? Now is this trending, yeah. And we show you all your scores. And then the interesting thing is like, if I go into one of these and say, all right, this is a question around career opportunities.

And the question is? I believe there are good career opportunities for me at Pied Piper. Ah, so 58% of people do. Yeah, 58% of people do. What's interesting was we also then take your data and help you see, well, where's it different? If I go in and have a look, actually, London, people don't feel like only 30% of people are happy with their career development. Because maybe it's just a sales office and there's not a lot of people there inspiring them to show them the roadmap. Exactly.

So one of the ways we talk about this. Or you could have a jerk manager. That is sometimes the case. This is how you find out you've got an a hole in a management position, isn't it? It's where you find out that a group of people are struggling with their experience. And it could be that their manager doesn't have the skills or it could be that you've got your best manager there, but that group that they've inherited has a lot of issues. It's a much of malcontents. Could be.

Could be malcontents. Or it could be. Just an a-hole. It could be. Running London. Our Myra Anderson, only 14% of people are happy with career development. Oh, wait, hold on a second. So here we go.

These are the managers. Yeah. And so managers don't get a pass. They get rated. Correct. Who gets to see the manager ratings? The managers themselves and see each others? Depends on the organization.

What do most organizations do? What do you recommend? Most organizations will share. to a certain level of management. And it depends on their maturity. So the best ones are sharing with each other. Because it shouldn't be, hey, Myra's rubbish, get rid of her. It should be Tabitha's doing really well on this question.

Myra's struggling. Let's get Myra to spend some time with Tabitha to figure out what they're doing differently. What if Tabith is just letting everybody leave work at 4 o'clock and come in late? That's why you have multiple questions. So you can look at different things. And what's interesting here is if I go back, so you've got all that detail and all that insight. But the question is, what am I going to focus on? because there's a million things you could do.

What am I going to do with my resources? Yeah. So what we do here is we actually do a correlation analysis for all of the items against the engagement index. And so what we're trying to do... Hold on a second. That's going a little too fast from my brain. You have a series of questions

and you know the benchmarks versus other companies. So what's an example here of what you're talking about then? So what I'm talking is going beyond the benchmark. So what we're doing now is we're looking at just your data at Pied Piper. And we're saying, which questions that you're asking explain variance in engagement. So what does that mean for listeners? It means that this question here has the highest.

You can see it's the last impact. I believe there are good career opportunities for me at Pipeyper. Okay. So this has a correlation with engagement. So those people that believe they have a good career opportunities are engaged and those that don't are disengaged. Ah, so we know now as managers, if we unlocked those people who don't believe they have a career path

by having a career day or talking to them more about the future where they see themselves in a year or two, yada, yada, we might be able to next month when people fill out of their survey see a change here. Correct. And so you can see here on the left, for those that can see it, we actually pull all this data together. So we pull the benchmark, we pull the distribution, we pull driving. And when you hover over it, it had a message.

So it's, we're suggesting this for you. So this is like if you had a PhD in psychology, this is what you would focus on. Okay. So what does it say there in the message for people who are listening? says this question is recommended focus and so I can choose I'm going to focus on these three items. Okay. And the second one is it's a great comfort to make a contribution to my development. And the third one. I have access to things I need to do my job well. Got it. And this is what we see in our data anyway. Yeah. But what's important is now, okay,

I now understand how people feel. I now know if I'm going to do something where I should focus. The question is what should I do? So by clicking on take action, what we do is we take those three questions and we give you access to our inspiration engine. So we now have a library of what has worked in other companies to solve this problem. So exactly what you said, like career days and stuff like that, we're saying, I have access to get to the things I need to do my job. Well, things that other people have done go to expert badges, mental shift program. Wait, hold on. What does it go to expert badge? Let's click on it. Yeah. So I'm going to pick that. I'm going to say, okay, this is cool. So you can see here, this is actually increasing knowledge sharing by having

known experts. So who are the people that know about this? And so what we've seen is this has actually come from organizations doing this and we know that it works. So they say somewhere on the intranet or in the company, our go-to SEO people, are these people, our go-to innovation or off-site meetings are these people. And so because those people now have been rewarded with a go-to expert badge, they've leveled up, they might be more happy at work. Correct. So something to ag at it. Yeah, and so the idea is... And then here I see milk and cookies and nap time. No, I'm joking.

I see mentorship program. That makes sense. Internal tools teams. A scavenger hunt. Now it's getting a little corny. Well, no, but that's actually... Oh, wait. You see, that one's actually really interesting because often the big problem is like the

internet hasn't been touched for years. So you're like, can anybody give me the emergency list? Got it. And so people go finding it and go, hey, this is ridiculous. We should fix this. This needs to be improved. So this isn't a scavenger hunt about like fine, you know, chocolate marshmallows or something. this is a resource scavenger hunt competition to find need to know information within the organization. What a great idea.

And every one of these ideas has been used somewhere to move the needle on the thing you care about. And what we can do then is we can sit down and say, okay, you can do all that stuff. And we can also help you see what are people focusing on. What are the items that people are looking at? What are the actions they're taking? So you can see here that valuing your people is important. And there's these two managers that are working on it. So we're giving tools to the company to really drive this behavior.

and help give people inspiration. So if you're the CEO or you're the HR person, you know your manager's got a low rating, you know they feel like it's a dead end job, you say, hey, listen, get into Culture Amp and find some solutions here and maybe try executing. And they execute on it,

and then, lo and behold, the manager of the manager, the senior manager could look at the mid-level manager and see if they're actually taking some action. And what we actually find is that a lot of the time, this is the first time the managers actually got the feedback. they think they're doing a great job. And then the team says, actually, we're all going to walk.

And they're like, well, what do you mean? And they're like, you don't give us any coaching. You're like, I didn't know I had to give you coaching. I don't have that skill. And so we're like, well, actually, this manager over here is really good at it. Look at their results. God, if I use this, does it mean I have to start praising people for doing good work? Oh, my God.

It will tell you that that's a good idea. Really? Yes. Well, what about admonishing people for making mistakes? That's my skill set. Finding mistakes. Do you know Gottman? Who's that?

Gotman, the Gottman ratio. So he was a couples counselor. And he could tell you after listening to a partner's talk for 40 minutes, he could tell you whether you were going to be divorced or not. Based upon how critical you were of each other, how many nice things you said? Both. So the got in ratio of positive to negative. And basically it's four to one. So if you give me four constructive positive things to one negative, it will feel 50-50.

Because the way our brain is wired, we take negative feedback really badly. We take it twice as hard. four times a hard. Four times a hard rather, yes. Yeah. So, oh my lord. So, see, because I was trained to give the sandwich. You know what the sandwich is?

Mm-hmm. Is this good advice? Because you're kind of telling me that the isish sandwich, I would say the word, is actually a good idea. Godman's saying that. The sandwich only works if you actually truly believe in the bread. Gotcha. You actually... It has to be authentic bread.

It has to be authentic bread. It's got to be good. It's got to be like a nice sourdough or a seven grain, something that people really do enjoy. So if you tell them, Sir Charles... It has to come from compassion. You have to say, I actually want you to succeed. And it's like the radical candor piece. I want you to succeed.

We just had Kim on. Yeah, I'm going to give you this feedback because I want you to be better. And I want that for you. If people see that, they'll take it. If they just think you're trying to prove that you're smart or whatever, it's really hard for it. All right. Didia, watch this. I'm going to do it right now live.

Okay. Sir Charles, I just wanted to let you know how great scale went. That was an amazing event. I got rave reviews, and I didn't really have to worry at all about the AV, and I know it was your first time doing it at that scale. So great job, Charles. This morning, when I did my meeting with a hundred of my most important contacts, and you couldn't make a simple microphone work correctly,

was absolutely below the standard I know that you are capable of. And Sir Charles, one more thing. Are you crying, Sir Charles? Here's a piece of bread, Charles. Here it comes. I love this new setup where the audience can see Sir Charles and St. Nick.

I love this new setup. I love what you did with it. It's very entertaining. Great job. Okay. How did I do, Did you? Did that feel like two great pieces of bread? The bread was great, but there was nothing to connect the inside of the sandwich to the bread.

Well, let's be honest. It was a total shit show this morning. I mean, it was an unbelievable disaster. And so what did you want to be different? Not be a disaster. So how could it have not been a disaster? Well, they could have practiced a little more, or I could have not given them a last-minute directive. that was complicated.

But I don't want to take ownership of this. Let's go with... Charles needs to be better on the fly. You have to be ready for anything, Charles, because I don't want to take ownership of this. Yeah, so the way I would deliver that piece of feedback is you would start with the thing you did, which was great. Oh, it was good, right?

I felt good about the sourdough. This is awesome. It was awesome. You want to spend a little bit more time on his role in it. So scale was amazing, and it was the first time you did it, and I was blown away that you were able to pull the whole thing off. That was fantastic. It was fantastic.

Got it. So I was actually surprised this morning when we had the problem with the microphone. What happened? Oh, so I have to pretend like I was shocked. Well, you were because he nailed the bigger one. I was not shocked. I was infuriated. But I kept my cool.

I'm just joking. So, yeah. So there's, you know, there's a... I was almost authentic. I was goofing off a little bit. But I get it. We could all be better. But if you're authentically a hardcore person like I am,

it seems to me that I draw hardcore people who are no BS adults who want to do great things so when I tell them I'm cut from the old school you understand I tell them not the standard that we're trying to hit when I say that to a person that is like you might as well drop in it like a piano on their head

like that's like an anvil if they hear that for me that I see people get like and that's the thing to remember which is like when they know know that about you when you walk out and go, that wasn't the standard. That's all you have to say. That's all I have to say. I don't have to keep talking. They know. They know. Which is what I say. But actually, I reckon if we went back and measured it, you spent the same amount of time talking about the good stuff as you did about the bad stuff. No, I don't mention the good stuff. I have, I come from

the Anthony Burdane School of Thought. Anthony Bourdain had a, somebody was on the show praising his team and how great they were. And Anthony Bordane said to the guy, we only pet the baby when it's sleeping. Don't give them too much credit. We don't want them to think too much. You got to sharp, right? Yeah. So it's, you know. What is it about old school? What,

a lot of this seems like, how do you balance this entitlement and kid gloves with old school, hardcore, we're going to win and dedication? How does one balance that? Because a lot of this can get like, here's a cookie.

Yeah. And I think, here's a badge. I mean, literally the first suggestion was, here's a badge. It was a knowledge badge. Let's be honest. I mean, it wasn't a knowledge cookie,

but it was a badge. I did catch you, didn't that? That's awesome. I love it. Note to self. I 100% agree with you. Like, we have this conversation. So when you talk about putting culture first,

it is not about saying winning doesn't matter. Winning matters. Winning matters more than anything. Winning matters, right? And winning matters, like my goal of Culture Amp is not only to go and amplify what 100 million people are capable of.

It's not only to change the way organization. to run, it's to build a culture first company at scale, right? And one of the things that matters is the impact we have on others. So the analogy I use is actually the Golden State Warriors. And the analogy that I use is this, which is pre-Splash Brothers, you know, really hitting their groove. Houston was the team that really embraced the three-point shooting first. Yep. And no one cared. Nobody cared. Because they sucked. And then Golden State came along. And they won a championship. They won two championships.

And they shot more threes than anybody had ever shot, and they changed the way the game was played. Right. And they should have won three if it wasn't for the National LeBron Association, giving them, gifting them that second one. That block was pretty impressive. With that ridiculous Dremont suspension. That was the National LeBron Association.

But anyway, keep going. Yeah. And so for me, when we talk about what does Culture First mean, culture first means I want to win, but I want to win. but I want to win a certain way. Ah. And it's that certain way that matters. You're trying to change the way the game is played.

And so, you know, you look at someone like the Spurs. I've never really enjoyed watching the Spurs play, but I've got to tip my hat to Popovich. This is a guy that has had sustained excellence at a level that nobody else has ever got close to. Yeah. And that's a culture. Fabulously boring.

First place. Yeah, that was like watching paint dry. Oof. But boy, did they play like a team. Yeah. But I like it. I like winning is important. There's like a generation of people

or a large person of people who don't believe that winning is important. I grab them by the lapels and shake them. What do you mean winning's not important? If you come to the game and your opening salvo is, it doesn't matter if we win, what do you think's going to happen when you're up against a bunch of maniacs

who actually want to win? Yeah. And here it is, Vince Lombardi. Winning isn't everything. It's the only thing. You believe that? You believe that. It's the only thing.

You don't. You disagree. I disagree with Vince. I disagree with Vince. You do. Because I think that if you're doing it for the long run, like, and you keep on the basketball in actually, one of the books I love is Bill Walsh's, the score takes care of itself.

Right. And that was his whole point, was on any given Sunday, you win or lose based on all the work you put in. You don't focus on the scoreboard. I mean, yes, you do because you want to win the game. But over the long run, it comes from all the little things that we hit up to it. And that's why you see coaches come off and they're like, We won the game, but it was a bad shot.

I want you to take the right shot because I know five times out of six will win. I don't care about heroics at the end of the game. That's my favorite is when the coach is just like benching somebody because they hit like the off balance, off the glass shot, and like the crowd goes crazy and they're just like, what the heck are you doing? Like, please take a better shot. Yeah, you're a cowboy. And that's what Culture First is.

Culture First is a really clear set of understood ways of behaving that leads to winning. Interesting. You see what that cup says on it? I do the work. That's me. That's my philosophy. See, we're all the product of how you wound up in a place, right? Leaders, you would agree.

You would agree companies are the product of the leaders, right? Like the company. They're as good or as bad as the leaders let them be. Yeah. And it all trickles down. But the challenge in leaders, and I have this conversation with senior leaders all the time, is you don't get good without time in the saddle. So you just got to work really hard

and all good leaders have worked probably too hard. But you get to a point where the value you're creating is in smaller and smaller windows and bigger and bigger value and you actually have to shift. What got you here won't get you there. See, that's a good book and that is very important.

I just tell people we've got to do the work. Everybody wants some shortcut. There is no shortcut. There is no shortcut. And on culture, it's even harder. Like, you can't just get up and give a stump speech and then that's your culture. No, I've tried that one.

That doesn't know. No, you can get people psyched, you know, but and it's the same thing with like the perk culture. Yeah, and that's like people wanting to buy a culture. You can't buy it. You can't buy culture. Every time you give one of these perks,

all it does is lead to like, where's the next perk, where's the next perk? And then people are on the perk train, not on the winning train. But what's interesting, I think, for companies that want to do this for the long run. So you build a startup and some people just want to build it for three years

and float it and leave, right? Yeah. Fine. Do that. But if you're trying to build a generational company or an iconic company, people say, why do you invest in your people? The reason you invest in your people is on any long,

journey, they'll become a point where you need them to invest in you. And they will remember how you treated them. When it's winning, it's easy. Everybody's great. Everybody loves it when you're winning. Yeah. And I, we work with all of the football teams in Australia. And I had the pleasure of being in a room with all of them. And we were talking about how they think about their reason. And everyone's like, you know, to win a championship and all this or stuff. And then one guy said something really interesting where he said, look, if the draft works, which it doesn't, but if the draft works, we're all going to win a championship one in 18 years. Like, you're, It should cycle around.

So the true test of culture is who do we want to be the 17 years when we're losing? I thought that was really insightful. It's easy to be a winner. But while you're slaving away, building the skills to become a winner, who are you? Yeah, you know, it counts for a lot, I think. Actually, how people behave in a, I was amazed when the market crash, the two or three times I've lived through market crashes. Man, some people just lose their ish. Speaking of the is sandwich, people just lose it and they can't stay focused.

And there's other people who are just like, all right, the building's on fire. We need to either get out of the building or put the fire out. Looks like we got a clear shot to get everybody out to get everybody out. Oh, wait, we can't get everybody out. Okay, let's start putting the fire out. And they just go into like this emergency mode. And it's really, I'm sure you've read anti-fragile by Talib. It's like, yeah, Telib.

And no, we got to get Talib on the pod. I mean, this guy's unbelievable. But that anti-fragile really hit me. And I was like, wow. And you think about the, you know, the fanger. our companies, the really big things that have changed the firmament of our market. They were all created during the worst market possible. Absolutely.

And when markets get bad, those great companies do better. Yeah. They do better. So when the market collapsed, it was like, well, Google's got better advertising. It's more efficient. Let's shift our ads away from television and newspaper and classifieds and put it on Google because it will work for it, be more manageable and trackable. Yeah.

That's what people don't realize is even in a down market, the winners accrue even more. Yeah, you can get more share in a down market. The overall market might be smaller, but you can have a more dominant share. And then when the market comes back, oh, my lord, yum, yum. Yeah. And so. Wow. What have we learned?

Culture's not perks. You get the culture that you put the work into. Winning does matter, but how you win also matters. What else have we learned today? What we learned? How to give a sandwich. How to give just a delicious sandwich. All right, listen, congratulations on building a great company.

Now, where are you based? I live in Melbourne. You live in Melbourne. Yeah, and I get out here a couple of times a quarter. A couple times a quarter. I know the kangaroo route, as they call it, between L.A. and San Francisco and Melbourne very well. A couple of times a quarter. Yeah.

You do this flight more than once a quarter? Yes. Oh my lord. You're using Virgin or United? Quantus. You're Quantis all day. Get all those miles? I've got reasonably high status with them.

Yeah. Oh my Lord. How do you handle that? No, you're not an economy. Yeah. Are you crazy? Yeah. I mean, I get upgraded on points sometimes, but we still fly economy.

This is totally unacceptable. This is the wrong culture. Remember you said you want to show them what winning is like? You need to be in the front. you built this giant company. This is the wrong example for you to set. Do not set the example that working this hard keeps you in coach. Yeah, but if I fly business, we don't get to fly people.

Building a culture is about connecting people. So for me, it's more important that more people fly. All right, that's fair enough. That's fair enough. I'm not following that example. VCs never do. I took my whole team to Australia. And I was like, all right, guys, if you guys were to come, we're keeping it lean.

Yep. And I was just in my own, yeah, whatever. I'll catch you up in my Gulfstream. No, not that, but I can't. I'm old man now. I'm 48. I can't be. I mean, I'm going to be dead soon. I got to really enjoy the last 20 years.

I got to, oh my Lord, that is a hard flight. You get used to it. You get used to it. But you keep those employees in Melbourne, I'm sure, for like 10 years, five years, right? You don't have the turnover problems like we have in America. The Valley is unique in its turnover. Yeah. Why do you even bother having a, uh, uh, uh,

an office here if it's so arduous like i mean two-thirds of our revenue is out of the u.s still so u.s is big for us and also i mean new york is huge from a just market opportunity point of view and san francisco this is the epicenter yeah we are a tech company this is where the great tech companies are you have a lot of uh employees here or just as about a hundred a hundred oh oh wow so 25 percent or so you got 400 people what's it like to run a 400 person company oh yo yeah getting fun is it fun yeah it's hard i mean i i left a two 200-person company to found this one. So I'm now just getting to...

It's not that different. Yeah, I feel like I've just... Have anybody leaked the Friday call yet? No, we have... Everybody's still loyal? I have a hash CEO channel where I get lots of interesting questions, but... Hash CEO? As in, it's just a Slack channel, CEO channel.

You have a CEO channel where anybody can ask you a question. Yeah, so we have an anonymous thing. Anyone can ask me an anonymous question or an unification question. Can you have a discussion with them? Yeah. And does everybody else see it? I do most of them in public, yeah. Oh, my Lord.

You have 400 people asking you anonymous questions in Slack and everybody else can see it. Yes. I get some dozies. Really? Oh, my Lord. But it's part of our first value as a company is have the courage to be vulnerable. Have the courage to be vulnerable. Yeah, it's Brunay Brown and this whole idea of if you want to build trust, you build trust by creating a bond and you create bonds through vulnerability.

I agree with that. Yeah. Yeah, all those like five dysfunctions of a team, all that Lansoni stuff is, I buy all that. Also, like, there's just weird fallacy that people expect the leaders to be perfect. It's like, it's kind of the opposite. They kind of expect the leader to not be perfect, but... What they want is they want you to tell them the truth. The truth, that's it.

And they often know what's going on. They just want to know if you've got the guts to tell them. Yeah. And it's not easy. I've got it super simple to tell the truth. It's so much easier. I'm too candid sometimes. Yeah.

You know, that has its challenges too. You've got to be careful to be too candid. Like, that could also, that could be taken the wrong way. It's interesting, though. But thank you for doing this podcast too, because as someone from Australia, I think, like, the work that you do on this and others as well, like, actually makes this accessible. You know, I didn't grow up in the valley. I came up here. So you watched the show before.

Yeah. And I think this is huge. because this is connecting people all over the world to how this is being done. You don't have to go to Stanford to start a startup. No, no. In fact, a lot of the best ones weren't. Actually, my main thesis, you know, having been here for a long time as a journalist and as an investor is it was so obvious to me that nobody in this town was born here.

And certainly not the outlier successes. None of them, zero. So if nobody here is from here, then that means nobody in Silicon Valley, Nobody from Silicon Valley creates unicorns. People come to Silicon Valley to create unicorns. So they have the cause and the correlation completely backwards. There is a correlation between building large companies in San Francisco and the Bay Area. But it's not that San Francisco people who are born here have some amazing pedigree.

It's that the greatest people come here. And when you have that many great people in one place, yeah, It's really like the culture of poetry or art or any movement. You know, movies in the 60s and 70s with the Easy Rider era in New York and in L.A. And Jack Nicholson and, you know, all of those, Frankenheimer and Scorsese and Francis Forkoblo, they were all pushing each other to make these great films. And it was more that they were part of a culture of renegades, not that any one city made them. And so they all happened to be in the same city. Yeah.

It's one of the really interesting things about culture is like when you get a group of people all aspiring to work in the same genre, they actually push each other and collaborate with each other and, you know, great things come out of it. Mm. All right. Listen, this has been great. Congratulations on Culture Amp. You're hiring. Always. Always.

And it's a great culture. Yes. It's not perfect. It's not perfect. But you care. We care deeply. Care, deeply care. And everybody knows, Return of the King is the best episode.

Indeed it is. And's an incredible scene. Into the pit of doom. Into the pit of doom. Samwise going in there and helping Frodo get rid of the ring. I now realize that it doesn't matter what I do with Culture Amp. The fact that I worked on Harry Potter, actually, is much more interesting to most people than anything I can ever do with Culture Am. Can't stand those films.

Terrible. Sorry, your work was great on them. Those films are horrible. I mean, if you do, and don't add me. There's, let me tell you, there's like eight of those films. That's six too many. They should have been two. Harry Potter grows up. He fights the guy. The guy beats him. He comes back. He dies. Whatever. There's a generation of people for whom that series was their generation. Yeah, I know. That generation got the short end of the steak. You want to have a... Except done so poorly and so silly. Quiddage.

Quiddage. And what's his butter punch? Butter beer. Butter beer? I had that butter beer at Universal. Have you had the butter beer? It's literally like just take whatever the sweetest Mountain do is and pour a second serving of sugar into it and put a little foam on top. It's a caramel frépe latte with extra sugar.

It's like, let me have... a 12 pump, Carmel Freep. I drank that thing. I felt like I was going to vomit. Honestly. And then I bought the wand for 60 or 70 bucks and I tried to do the things. I was like, oh my lord. No, I'm going to Star Wars. No, no, but here's the thing, the Jedi's. Oh my God. I'll talk to you two individuals after, okay? Twittledee and Twiddled down back there. You're Star Wars guy. Thank you. Thank you. And you're English. And you're English. Sir Alec.

Well, the first three Star Wars are the only ones that count because they were the only ones that had Joseph Campbell involved. Yes. And if you look, actually, if you want to go back, if you look at Revenge of the Sith, that episode, it's actually quite powerful. So if you look at Revenge of the Sith and then you go into Rogue One and then you go into the Star Wars series, pretty amazing. And then this new stuff is garbage. So is Harry Potter. Don't at me. Okay, we'll see you all next time. Bye-bye.

Ha ha ha.