How To Take Existing Ideas & Turn Them Into Wicked Businesses Like 15Five - With David Hassell
David Hassell, the founder of 15Five is all about people. Whether it is the employees within his business, his product which aids communication in other businesses or getting investors, he believes that they key is about investing in people and trusting them.
In This Interview You’ll Learn...
- 01:55 David’s back story
- 10:15 Why clarity is so important
- 18:25 Why networking and friends are so important and how David managed to build up so many contacts
- 21:38 Why trust is the biggest currency
- 29:24 How and why David invests rigorously in his employees and has created a great culture
- 48.00 Why David believes that a CEO should be supporting employees and not vice versa
- "Let My People Go Surfing" by Yvon Chouinard
- "A Lapsed Anarchist’s Approach to Managing Ourselves" by Zingerman
- "Leaders Eat Last" by Simon Sinek
- "The Alchemist" by Paulo Coelho
- Email Andy
Starting from Nothing – The Foundation Podcast
Guest Name Interview – David Hassell
Introduction: Welcome to Starting from Nothing – The Foundation Podcast, the place where incredible entrepreneur show you how they built their business entirely from scratch, before they knew what the heck they were doing.
Now, here’s your host, Andy Drish.
Andy: Welcome everyone to another episode of Starting from Nothing, the Foundation podcast. Your host, Andy Drish here. Thank you all for the incredible amount of text messages you’ve been sending us. So, if you hadn’t listened on a previous episode, Dane and I did -- we did one of our riffing sessions and at the end, we gave out our phone numbers. So, if you’ve been enjoying the podcast, we ask people to just text in and we’ve been getting a lot of them.
So, the conversations, thank you to everyone who’ve reached out. Thank you for the fun conversations we’ve had. I’ve been getting messages from eight in the morning to like 11 at night that’s been really enjoyable. So, thank you guys.
Today, I’ve got something really fun and exciting for you. Along the path of switching things up and trying new things, I’m bringing in my friend David Hassell to the show.
David is the CEO at 15Five, it’s a SaaS product that helps company service problems, celebrate wins, and discover great ideas and stay tuned in their employee’s morale. We’ll get into exactly what that is.
But I think one of the cool parts about David is that Forbes has recently named him the most connected man you don’t know in Silicon Valley which is really awesome. We met -- I think we met for the first time in Burning Man like two years ago.
David: Right. Yeah.
Andy: In Mystics and then caught up again back in March at Eben’s MetaMind and talked about doing an interview and having some fun on it. So, David, thanks, man. Welcome to the show.
David: Yeah, thank you. It’s awesome to be here.
Andy: Thanks for coming on. I know you guys are really busy right now.
Give us a little bit of a background. Tell us the overview of 15Five. What it is, where the idea came from, and how you got started with it.
David: That’s great.
I’ve been an entrepreneur a long time, started a number of companies pretty much right out of college. Throughout my career, I think early on I was really driven by innovation and creating like enterprise value. I wanted to build a big company, change the world, do stuff. But it wasn’t really coming from, like my real, inner desire to make an impact in people’s lives.
David: So as I got into business, interestingly enough, I felt like a hole in meaning for me, right? I felt like what we were doing, there’s something empty about it. And so where I actually created meaning at my first company, which I ran for about seven years, was actually in developing the people inside the company. So I would get off on finding someone who would be really high-caliber, high-potential, but overlooked by other companies because they didn’t have the pedigree, they didn’t have -- maybe they had a gap in the resume because they decided to take a year off and travel around the world. Or they skipped college because they were just really good on the computer and were making money early on.
David: I gave him a job for what I could afford to pay him, like 40K, this is about a decade ago. I’d be psyched when they leave 12 to 18 months later making 80. And so that was -- I really enjoyed that.
I actually created out kind of an interesting combination of setting people up for future success and also a lot of people who stuck with us. Not a lot of loyalty inside the company. It was really rewarding.
When I left that company, I took a break and, actually, rather than just taking a sabbatical, I actually used kind of my entrepreneurial skill when I started a business doing kitesurfing adventure tours down in North East Brazil. Got a penthouse apartment on the beach, bought a dune buggy, started having all these people from the US come down to these 10-day downwind adventures along the coast with like Land Rovers following them on the beach. I got the kite everyday for months and make money doing it.
Andy: Sounds awesome.
David: That was pretty fun.
But that gave me kind of space to sit back and think about, you know, “Look, if I’m going to devote the next 10 years of my life to something, what am I going to create?” you know?
David: There’s tons of ways you can make money but for me it was like, I want to make money and make meaning. I want to make an impact in people’s lives.
I actually started out, you know, going down to Brazil while I was running my team at the old company. This is kind of 2005. It was like some of these ability to be virtual was somewhat new.
David: I love the fact that we could use this technology and have freedom, right, to work from wherever. I just really saw the potential of that and the wave coming. That was an area that I was really interested in. I was really passionate about how people communicate and how people use business as a way to develop and grow, especially since it’s a place where we’re in our jobs and our roles either as entrepreneurs or employees for the majority of our waking hour. It shouldn’t be a place where we get fulfilled and develop ourselves in that.
David: The question for that period of time for me was, you know, why. Why am I going to do what I’m going to do and then how am I going to approach this.
I came across the idea for 15Five from a friend of mine who struggled with 200 person virtually distributed team; a lot of employees in Asia. He felt like a firefighter. Constantly fighting out about issues that he wish he’d known two, three weeks prior.
David: Not really being able to be proactive. I mean it’s a common thing. As an entrepreneur, you’re juggling so much and things are breaking and so you can get really caught up in the firefighting mode. But if you’re not able to be centered and proactive, you’re never going to fulfill your vision if you’re just reactive.
So the 15Five concept was actually initially for me like, “Oh, cool. This is a really great way for leaders to have visibility into what’s happening.” The concept was invented by two friends: the founder of Esprit and Yvon Chouinard, the founder of Patagonia. Yvon was famous for using this back in, like, the ‘80s as a way to know what was happening in his company while he was taking half the year off to go climb mountains and surf. Being a kiteboarder, running my business from Brazil I was like, that’s amazing. How did he do that?
Andy: I just started reading his book Let My People Go Surfing.
David: Oh, you did?
David: Yeah, totally great.
Andy: He seems like a fascinating dude.
David: Fascinating guy. He’s kind of like -- he didn’t really want to be a businessman.
Andy: No way.
David: To end up with a multinational like incredible, incredible company.
The 15Five thing was just -- it’s just so elegantly simple. It basically have all the employees spend 15 minutes a week, answering a few simple questions that take their manager no more than five minutes to read. What that did was create this, like, organizational pulse and rhythm to make sure the right conversations were happening and the right information was cascading up. And it was a one way process for him. Start with frontline employees and then move up through the managers. Eventually, he get a summary of all the key issues in the company and would have visibility.
That was what I was originally attracted to was I want to help entrepreneurs and business leaders be more successful so let’s see if this tool works. But then something really amazing happened. We put this thing out in about a dozen companies and we built it in a way that it was two-way communication. An employee report something and now their manager could respond and have a conversation and things could get escalated.
So, yeah, provided that amazing visibility for the CEO and the manager, we found it also gave the employees a voice, had them feel more engaged like they were being listened to and had an outlet to say, “Hey, here’s where I need some help” so their managers could jump in and support them in being successful. So we realize that actually: A, I hadn’t really anticipated and, B, it was such a pleasant surprise that it also provided a ton of value for the frontline employees around
that same thing I was passionate about in my first company and helping develop employees.
David: We recently worked with -- I know you probably know Simon Sinek. He’s one of our advisers and an old friend. I have known him from before he even did his famous TED Talk. He stopped by our San Francisco office about a week-and-a-half ago while we were, like, kind of rethinking our why. We’re like, “You know what, it’s like it kind of -- it hasn’t really hit the mark,” right?
David: To help individuals and organizations reach their highest potential. He worked with us for about an hour, just happen to stop by [unclear 00:08:42] room and he really interviewed like us about what we’re really driven to do. One of the things I kept coming back to was all my employees told me at our annual retreat recently that they felt they were better versions of themselves for having work to 15Five. That was part of our intention, to create this environment where people get to have that experience and learning and growing. Not only just in the work lives but their whole lives.
What we came out of the meeting with was that our why which is like more of a clear articulation of the original is to create the space for people to be their greatest selves. That’s what we do internally in our company; we create the space, we create the culture for people to step in to being their greatest selves. Our product is designed to have employees and managers have an experience of being their greatest selves individually and as a team.
Now we have a whole suite of products. We’re thinking about completely reinventing the whole performance management, employee, culture, and performance management software space from a place that is designed for that.
Andy: Dude, we should totally talk more. This is awesome. There’s so many different elements that we can dive into.
It’s cool hearing your why. I always find that really, really awesome with people especially when people are really clear on it. It’s nice.
Andy: It gives you like a grounded place to start from.
David: Yeah, for sure. Feels good to have clarity now. I mean this is like a week-and-a-half old and it feels like it’s really what’s been there forever.
Andy: Business has such an incredible potential to be such -- shifting people’s lives in such incredible ways.
Well, I guess, I’m not sure if this is similar or not yet. Here’s what I want to do. I want to start with how you got the product built.
Andy: So, you had the idea, what did you do next?
David: Yeah. So, I called up one of my employees who had worked with me for about three-and-a-half years of my last company, this guy named Nazar. I called up Nazar and I said, “I’ve got it.” I’ve been waiting for an opportunity to work with this guy again for years. Because we had such a great relationship, we built products together, we had a lot of fun doing it. But even though the products weren’t, like, delivering the kind of value that I wanted to I said, “I’ve got it. This is the thing.” He’s like, “Look man, I’m pretty happy at my job.” He didn’t get it. I think it was probably like I wasn’t really [unclear 00:11:16] articulating it. So he ended up turning me down.
Andy: Oh no.
David: Maybe I’ll build this myself.
But I had another project going at the time and whatnot and couple of months go by and he was actually out in San Francisco and I sat him down but this time I was really much clearer on the why and the underlying purpose of it and he was just like, “Why didn’t you say that last time? I’m totally in.”
Andy: Funny how that works.
David: Isn’t it funny?
Andy: Yeah. It totally is.
David: Real life we really shared a similar wire around that again and [unclear 00:11:48] just goes back to how important that this, how important knowing that is.
Even though I had a computer engineering background and I could [hobble 00:11:57] together some code, it really wasn’t where my genius lies. But Nazar ended up starting working on a prototype kind of nights in weekends and we were working on this thing together.
What I did because I was the president of the San Francisco chapter of EO, the entrepreneur’s organization which is focusing on global network, peer network of entrepreneurs all who have businesses to do at least a million dollars in sales
and there’s about 10,000 worldwide. I called up a bunch of my CEO buddies and said, “Hey, would you be guinea pigs? I’ve got this thing that I’m working on.”
Thankfully, I didn’t damage too many relationships. Putting this, like, super buggy piece of software in their company with their employees, you know. Some of the employees not realizing this is like not even -- it’s nowhere close to a beta just like, you know, total alpha; things blowing up all over the place.
We didn’t have, you know, understanding of the underlying psychology of what would actually have people have the right kinds of conversations. It was a mess but we had a testing ground for sure and we got something on the glass as quickly as possible, I mean literally in two to three weeks.
David: We had something out in live companies.
Andy: Why so fast?
David: Because we wanted to build this with real feedback and real people and we had the opportunity to do that. And so we started with just the core, core thing. The interface looked terrible.
Andy: What was the core thing?
David: It was basically just sending out an email and saying, “Hey, answer these five questions.”
Andy: Wow! That’s it?
David: That was it. Yeah, that was it.
David: We’re like, “Okay, can we get people to actually respond in the first place? Will they actually answer the questions?” Well, the question is right. We’re tweaking mad. So we then got into this iterative process of actually getting the product to a point where had a couple of customers are like, “Huh, this is actually pretty valuable. It doesn’t look very nice and whatever but we’re getting some real value out of this.”
David: And then it went out to a design firm in San Diego who I was friendly with the CEO and said, “Hey, we need a facelift. We don’t have a designer on staff. Could you help us out?” A company called Digital Telepathy and they don’t really do
these types of deals, they’re pretty high-priced firm now and super in demand but at the time I still am friendly with the CEO.
They said, “Alright, we’ll do it on like a convertible note basis as an investment.” So, they gave us like 15K design services, gave us a beautiful facelift. So we basically have this product built with all sweat equity and one convertible note for design firm and literally got to our first paying customer on that.
Andy: No way.
David: Yeah. Granted it took a little while to get there, right?
David: But only then did I go out and raise some money. I raised 200K for friends and family. Also on a convertible note basis that 15K was part of that. Use that money to hire one developer to supplement Nazar and we went to town on really building out, flashing out the product more. That got us to a few paying customers, mostly through individual phone calls and whatnot.
And then something really interesting happened. Someone forwarded me an email in January of 2012 when we were, you know, the product was coming along. January 2012 someone forwards me this email from Jason Calacanis. I don’t know if you’re familiar with him, big time entrepreneur.
Andy: Oh yeah.
David: So Jason was writing about some of the key things he looks for in a company he’d want to back and he said “It’s got to be a name that, you know, you hear it once and you’ll remember it forever. They’ve got an iconic logo. They’ve got just a clear value proposition, whatever these things were.” He said, “This is why it matters,” he said. “Because when someone has a file sharing problem, here’s one company and I say, ‘Go get Dropbox.’” He said, “When somebody has a communication problem, I say ‘Go get Yammer.’”
I forwarded this to my team, I said, “First of all, Jason’s saying these things and they’re pretty right on. We should really evaluate our company through this lens.” I said, “The second …” this was kind of like -- I don’t know. It was kind of like a brash, off-the-wall kind of thing to say. I said, “I’m going to get this guy saying get 15Five instead of get Yammer.” I just said that.
David: I don’t know who Jason is. I remember him from a decade before when I was in New York and doing stuff but we never met. No idea that’s actually going to happen.
Two weeks later, I get an email from one of our investors who says, “Hey, this guy Jason’s got this conference call at launch. They closed applications for this thing but he emailed me and said they’re looking for one or two more companies. You should talk to him.” I’m like, “Okay.”
And so we do an interview. Actually interviewed with his assistant who totally didn’t seem to get 15Five I’m like, “Ah, that was a waste of time.” A week later I got a call. “Jason really loves your product. He wants you to come into Sequoia Capital and pitch him and wants you in the conference.”
I show up and I’m practicing my presentation to get up on the launch stage or I walk in and he’s like checking names off. His people kind of walk up to him and I said, “David Hassell, 15Five.” He looks up and he goes, “I love your product.” He didn’t say that to anybody else in the room and I’m like, “Cool. Thank you.”
True enough, we get up on the launch stage and David Sacks, founder of Yammer, is like, “I’m going to invest in that company,” and later did. Jason was really talking us up and he’s become one of our biggest fans and advisers.
Six months after I said that kind of bold, crazy, off-the-wall thing, he wrote about an article that he send out to his thousands of followers on how to take your company from good, to great, to excellent; seven key strategies, I think 15Five was number three.
David: That’s kind of how the whole thing started.
We did launch. We got some good press. Inc. Magazine heard about us and said, “Hey, we want to feature you in our print edition” a couple months later and that’s what got us to our first hundred customers and the rest is history. We’ve got a thousand customers now and growing fast.
Andy: So, if you’re listening, a few things to cover. I don’t think I’ve ever brought somebody on the show who’s raised money before. We generally focus only on people bootstrapping.
Andy: But the reason I wanted to is because you went through such an iterative process where it wasn’t like you’re raising $10 million to validate the idea.
Andy: You started by calling your friends and doing it as lean possible. Just to make sure that the idea actually has legs and make sure that you can do it at some
level. And after that, after you got your first paying customer, the ideas validated then once we’re around then [unclear 00:18:51] around; each time following the momentum of the business.
The other thing I want, if you’re listening, to note is how impactful having the right network of people has been and you getting started. I was just like listening, it’s like, “Oh, my friend, Simon Sinek from Know Your Why, was coming over and he’s an adviser now.” Starting with EO, your first customer, as your first people prototyping it were people that you had relationships with that you knew. And I think it’s something that people overlook so often.
Generally, when people are starting businesses, their first customers, at some level, are friends. Rarely is it like, “Hey, I want to start this business,” and you’re talking with a complete stranger when you do it. Maybe not rarely but it seems like it makes it easier when you’re working with friends to get started.
David: Yeah, you really nailed on a key point there. Actually, what I didn’t share in my back story was during the kiteboarding phase, I was clear that who I wanted to support were entrepreneurs. I wanted to support entrepreneurs in being successful. And so there was a piece in there I left out but I moved to San Francisco in early 2007 and made it my mission to know as many entrepreneurs as possible. Because I knew those are the people I wanted to support and I wanted to know what made them tick and I wanted to have that network in place.
I spent two years hosting dinner parties, and meeting people, and joining EO, and becoming the membership chair, and then, eventually, the president. Really investing in seeing how can I be helpful in any way I can. Not knowing even what business I’d start but just knowing that was the market the people I wanted to support. Within two years, then that article was written about being the most connected man.
It didn’t take that long when you have that intention of I’m not doing this to get anything, I’m not just trying to, you know, from an ego purpose, build my network kind of thing. It was more like these are the people I want to serve and I want to know a lot of them.
David: I would encourage anyone who’s kind of in that [unclear 00:20:54]. If you have to know your customer and it’s really great if you know a whole bunch of them before you kind of go out to market. It’s never too early to start really building relationships.
And then the other piece of that is like having really great relationships can carry you a long way. My relationship with Nazar got us our prototype in our first product. My relationship with Chuck at Digital Telepathy got us a deal that nobody else gets -- to have them invest design resources. Those relationships can get you really far without cash. It is a form of currency, I believe.
Andy: Dude, personally, I think it’s the number one form of currency right now is trust with the right people. Because if you have trust, you can make anything happen really, really quickly that even currency can’t buy.
How do you go from not living in San Francisco to becoming one of the most well-connected men in the city within two years? What did you do that was so -- yeah, powerful.
David: I was actually living in San Francisco during that period so --
Andy: I mean before that though, you’re off kiteboarding.
David: Oh, before that. Yeah, from not living there to show up and then --
David: I would say there was kind of a mix of intention and luck or magic. When I think about it in my life, I have a lot of interesting experiences but those things tend to come together.
David: And for whatever reason that is, you set an intention, you go after something, and then it just seems like, you know, either you’re just more aware of experiences or just something else happening over here, I don’t know. It feels like a little bit of a tail wind.
David: You just happen to be at this restaurant and you’re sitting next to so and so and you’re like -- this is crazy.
Andy: If you’re listening to this right now, we just did two podcast on exactly that phenomenon.
Andy: Yeah. Do you know Anese Cavanaugh?
David: I do, yeah.
Andy: You know Anese?
David: Our team has done some of her training --
Andy: Have you?
David: I haven’t done it yet but it’s on my radar. Yeah. I’d love to go.
Andy: She was in our mastermind with Bryan and Jennifer and --
David: Oh, fantastic.
Andy: And I started reading this book Zingerman’s. Zingerman’s is -- Are you already familiar with it? Ari Weinzweig wrote it. It’s called A Lapsed Anarchist’s Approach to Being a Better Leader. I’ve started studying companies who are between $50 million and $100 million who have very little profit margins and studying what they’re doing from a cultural perspective and how they run numbers and this is one of those companies.
I’m reading this book and all of a sudden he’s talking about how his entire philosophy for the culture and the energy that they have in their culture was based off of this woman named Anese who taught him about it and it was her. I, like, dropped the book and I called her right then and I was like, “Anese …” we’re in a mastermind together for a year. I had no idea that was the type of work she did.
Andy: So, if you’re listening to this, please go back and listen to the episode with Anese and Julie because she talks about how -- when you show up in a certain way, crazy, certain [unclear 00:24:12] things happen. And I think with the most successful entrepreneurs, they happen way more frequently. Most of the time, we don’t even know that we’re doing it.
David: It really is so true. I was [unclear 00:24:25] back till Steve Jobs convinced me [unclear 00:24:27]. He said, “You can’t connect the dots looking forward.”
David: Even my thing [unclear 00:24:31] like, “You know what, I need a break. I want to go kite surf in Brazil.” This isn’t going to have no bearing on my future life. And then my first customer is a guy from Silicon Valley who becomes a mentor and someone who really supported me in the early days. That got me looped in to this thing called the mai tai kite camp which is a group of people who show up on Maui every year. [BC’s 00:24:52] and entrepreneurs who happen to kite surf, looped me into this incredible network in Silicon Valley. You just don’t know. You
just kind of show up with an open heart and follow your passion. It may not make sense in the moment but so far, it’s all making sense looking backward.
Andy: It’s beautiful. I love hearing you say that. That’s another reason I want to bring you on the show. The way you operate is in such a cool way, you know? The way that you operate is very based in service, you know, and helping others. It’s just not the case with all entrepreneurs, especially in the startup world; especially in the startup world. I feel like a lot of people -- when I say startup world, like the West Coast venture capital-based world, it’s like they want to get a million users and do a big exit and all of that and it’s based in vanity.
Andy: You know? You’re very grounded in who you want to help and how you want to help them and I think it’s really cool.
David: Totally. Thank you.
Andy: Yeah, dude.
So, you become the most networked man in San Francisco or Silicon Valley. That’s pretty cool. You went through -- got the round for family and friends. You raised another round after that, right?
David: We did. We did another angel round about a year-and-a-half later or a year and a few months later. That was beginning of 2013.
Andy: Was that before or after you had a hundred customers?
David: You know what -- Yeah. We did the first round kind of like September, October 2011. January 2013 we were probably about, you know, maybe 250 companies; 250, 300 companies who raised -- We wanted to raise 750K but we were way oversubscribed. We had so many people who wanted to join. We had some great, great investors.
David: And then I kept getting people call me. The founder of HubSpot saw an article I wrote and said, “Hey, you’re doing great inbound marketing,” Dharmesh Shah. He said, “I want to invest.” So we let him in. Then the founder of Reddit came across us and said, “I want to invest.” Dave Morin from Path and all these, like, kind of cool names were just showing up, seeing what we’re doing.
Andy: How did you get all them?
David: They contacted me.
Andy: That’s so funny.
David: Totally crazy. Totally crazy.
Andy: Is it just from seeing articles and stuff?
David: I thought it was really funny that we attracted Dharmesh Shah, the king of inbound marketing through inbound marketing. (Laughs)
Andy: Through inbound marketing. (Laughs) The irony.
David: [unclear 00:27:12].
So we ended up raising $1.3 million and so we did $1.5 million total. I’ve taken a very non-traditional approach to fundraising. Most people like, “I’m going to go raise money now. Try to prove out my concept.” And then it’s all about getting to the next round. I’ve always been like, “We’re going to start bootstrapping this thing and go as far as we can get within reasonable confines of the business and we’ll raise when we need to, accelerate things to capitalize on the opportunity. I didn’t even go to friends and family until I knew that I had a product people are willing to pay for.
Plus, those are the closest people in my life. I’m risking their money. It’s the highest risk phase of the company. I’m going to eliminate risk for them as much as I can. The same thing with the kind of angel round, we did that when we already had quarter million dollar run rate in the company and something to show.
Andy: That seems like the sane way to do it to me. That seems like the logical, like the best way to go about it.
David: Totally and it’s not common place to think about that. I set the company up in terms of its legal structure to be the kind of, like, structure. Everything’s done with the -- we work with the best legal firm. So this company is set up to be a public company.
David: We won’t have to go back and change anything.
David: At the same time, you know, and so it’s set up to do these financings and whatnot. At the same time, every round I’ve ever raised, I’ve treated as if that’s the last money we were ever taking. Point of not to get to the next financing.
The point is we’re going to use this money to be a self-sustaining company and then we’ve gotten to that each milestone.
David: And then we can choose to raise more money to accelerate and invest or we don’t need to and we’re going to survive. That’s how we’ve played the game. That’s not necessarily the way most people think in Silicon Valley either.
Andy: But it seems like the most -- It just seems like the right way to go about it, you know?
Andy: If you’re listening, this is why it’s different bringing on somebody like David versus bringing on somebody who’s like “We just raised a bunch of money and we don’t know how we’re going to make money at but our fingers are crossed,” you know?
I want to switch gears a moment and I want to talk about how you develop your team and develop your culture and specifically creating a culture where people feel like better humans because they work with you.
Andy: I’ve shifted in the past year. I spent the past few years studying marketing and direct response and all that and always putting that as king and some level. What shifted for me in the past year was shifting from marketing and sales as king to leadership and culture as being king and it’s been a really, really fun shift.
David: Wow! That’s beautiful.
Andy: Yeah. It’s been really neat, you know. It’s cool to be at the point where we can finally do that.
I guess I’m wondering. I’m a huge believer in the people that you spend your time with, like have such a massive impact on your life, and people talk about your partner like who you’re going to choose to marry because you’re going to be with them forever. They thought the idea of having a nice bed because you’re going to sleep in your bed eight hours a night. And then you think about you’re going to spend between 40 and 60 hours a week working with a group of people and so you want to work with a really awesome group of people.
Andy: That has such a massive impact on people’s lives. I feel like work should be a function of you giving your greatest gifts to the world.
So, I’m curious for you, what are the different things that you do to build your culture and how do you create that experience where people feel so much better about themselves after working with you?
David: That’s a great question and something we are super, super passionate about.
Just to give you some perspective. So we’re three years old. We got about 16 people. We have about six people in each -- five or six people in each of San Francisco and New York. We got someone in Poland, Stockholm, Sweden; two people in Washington State working from home. And then we work with our design team in San Diego and I’m in the middle of the country in Sedona, Arizona. We’re a globally distributed team.
Most people say, “Gosh! How can you create culture if you’re not in the same place?” Well, we did an anonymous survey a couple of weeks ago that asked our team to rate our culture on a scale of one to 10. There’s a tool that’s used by thousands of people, thousands of companies. Our score was a 9.9 because someone answered a nine instead of 10. The benchmark was 7.2 across all the thousands of other companies.
Similarly, when I asked “How happy are you at work?” we were in the 9’s. When I asked “How likely are you to be working at 15Five a year from now?” we scored 10 out of 10. Every single person rated a 10. One person in the anonymous comments said, “I wish I could have said 11.” A lot of people saying, “I’m in it for the long haul, until we’ve made a significant impact.”Another person said, “I couldn’t imagine a better place to spend the next five years of my life.
So, that’s the kind of environment we’ve managed to create after a couple of years. We’ve never had anyone voluntarily leave the company so we have zero voluntary turn over.
We have a team that is so passionately engaged that I feel like every single person on the team feels like they’re a founder or owner of the company. They care about the company and the cause that much that they believe this is theirs and it is.
How do you create that? So, we had a lot of theories early on and only in the past year, you put your theories into practice and you have an intention but at some point, you got to be like, “Is this actually going to work?”
The first first thing to get is that whenever you bring a group of human beings together, whether it’s virtually or together, culture happens. You can’t avoid it.
David: So culture will happen.
Culture, at some point, you don’t get to control. It’s going to evolve and grow like anything else, like the founding fathers created the United States and then things happen and then culture went into certain direction. Like our country is very different than it was couple of hundred years ago and certain things that are really great and certain things that maybe people don’t think are great but, you know, there is culture. You’ll notice little subcultures in different cities and different places and whatnot. So culture just happens and it spirals, kind of spins out based on all these interactions that happen over time.
That said, if you’re really intentional about it, you can see your culture and create a strong, strong foundation. After you’re a team of 93 or 94, that’s when you got to articulate your values and you got to get ready like make culture your number one priority.
David: It depends. If you’re a Silicon Valley kind of hit and flip, “Let’s raise a bunch of money and sell this thing in a year.” Alright. Maybe you can make that happen with a crappy culture and whatever but, you know, if you’re building a company for the long term like we are, you better be prepared to live with what you create for a long time.
In fact, I learned this lesson from Tony Hsieh. He was saying when he sold his first company for $100 million, it wasn’t because he wanted the exit, it’s because it became a really crappy place to work. What informed him on creating the Zappos culture and why he was so focused on it because what happened was when you hire your friends, they naturally have your values, right?
David: That’s what he did, he hired his friends. And then when they’re growing, they hired their friends’ friends and all of a sudden, “Ah, cool. Great company. Thirty people. Culture feels awesome. Having fun.” And then they were like, “Holy crap! We’re doing really well here.” Obviously, great culture, usually great performance.
David: “We’re doing really well, we got to start hiring.”
So they started hiring people for skill and the best people they could find for the job descriptions. Then they got to about 100 people and it became a horrible place to work.
Well, what happened? They were hiring people with all different types of values, different value systems. When you put a bunch of people together with different values, immediately you’re going to get discord and conflict, and then resentment, and issues, and all sorts of miscommunication, and all that kind of stuff. Then the culture forms around the people that are there and then the culture becomes really hard to shift. You can start to nudge it in different directions but if you’re in a place with a really bad culture, it will take some time and it’s not going to be a pleasant experience. So what’s the alternative?
The alternative is you get clear on what’s the kind of culture I really want and you articulate your values. If you go to our website 15five.com, you can look at our philosophy. We’ve got 10 core values. There’s things like cultivate health and vitality. Some companies are like, “We want to do beer and pizza.” We’ve never done beer and pizza at our company because we all like to kind of work out and -- that’s not part of our ethos. It’s not like we don’t go out and have a beer once in a while but it’s not kind of like the central thing.
Instead, we do sessions around -- teaching people how to budget effectively so that their vitality isn’t dampened by their stress around money and focusing on challenging each other to athletic things. It’s like part of our ethos.
Andy: I have a question for you.
Andy: How did you define your core values? Did you come up with them? Do you take a team through your process? And at what point did you do it?
David: So we did it in April of 2013, we define them. We got the leardership team together in that point. So we were about a year, year-and-a-half in, and still a pretty small team. We got in the room together and we did two-hour and a half sessions to get to what you see there.
Andy: Wow! That’s pretty efficient.
Andy: Two-hour and a half session led to this. How many people on the leadership team?
David: At the time there were four of us. The first session was kind of getting things into the ball park and the second session was [unclear 00:37:36]. I have to tell you, we had a lot of magic in that session as well.
Andy: Sounds like it.
David: We were like, “Yeah, ten-core values. That’s a lot. Do we want to have that many?” They really going to define who we are and every one of them has stood the test.
Things like grant trust and be transparent. That’s one of the things that, I think, has contributed to the kind of team we’ve got. You’re talking about creating a work environment.
So I’ll give you two. Final leverage is one of the ones that we focus on. So that’s like looking for ways that we can put a small amount of effort in, big impact, right? We’re always looking for final leverage points in our business. Cultivate health and vitality really defines the kind of way we are with each other and what we stand for and really supporting each other in that. Embrace freedom and flexibility. We’ve really adapted that. If someone wants to go live in Stockholm or work from home in Poland and raise their family there, I’m in Sedona for a year-and-a-half, we can do that and we make it work.
Not at the sacrifice of the culture, in fact the benefit of the culture and the benefit of the team, we actually find that as a leverage point. Let people take better care of their lives the way that they need to and they’re going to be more energized, more loyal, and show up for work and really help. So, if people want to move around for a period of time, our director of marketing one time wanted to go house sit in Hawaii for a month, like, cool. Do it.
David: And then grant trust and be transparent is another one that is like really defined our way of being with each other.
One of the things that I think is an element of creating a great team is giving people a wide berth, giving people autonomy. Granting them trust and autonomy from the get-go. Not having them have to earn your trust. I believe if you do your hiring process right, first of all, skill is the last thing you should look for. The first thing you should be looking for is do they match value?
These people who are like, “Holy crap! This is the company I want to work for.” Like your values, your why. I can’t imagine. You’re the one. It’s not like I’m considering between you and five other companies for the marketing role. No, it’s, like, you’re the company I want to work for. That’s what you want to hear.
David: You want someone showing up and saying, “I’m going to do whatever it takes to come and work for you, guys.”
Andy: Hell yeah.
David: “I’m so passionate about what you’re up to. I’m such a fit for your values. I can’t believe there’s a company like this that exists.” Like that. That’s what we look for.
Then we look and say, “Well, okay, cool.” Passion’s great and the values are great but they also have to be able to do the job. So we do evaluate for skill, of course, but it’s secondary.
Then the next thing is if they past our test and we’re pretty rigorous about who we bring on, you know, because not everyone’s a fit, really. I mean very few people are a fit frankly. But if they past those tests then we trust them inherently. We’re like, “We trust you.”
Andy: Totally. You’re in.
David: “Go do your work. You’re in. We’re here to support you. If you screw up, cool. Be transparent,” that’s the other side of grant trust. I grant you trust, I fully trust you, and I expect that if you struggle, you make mistakes, whatever, you’re going to be fully transparent and open and honest with me and the rest of the team. We’re going to work it out. We’re going to support each other. There’s no fault and blame here as long as there’s good intentions and we find ways to move through difficulty that way.
The alternative of that is slightly communicating that you don’t trust your people in subtle ways. You think you’re protecting yourself. Simon Sinek has actually written a whole book on this. Actually his new book, Leaders Eat Last, talks a lot about this.
David: He’s talking about one company where they had all these tools locked in cages and the people had to go in to the cage and sign them out and whatever. It just kind of communicated to the employees like “I don’t trust you. I trust that if these were out in the open, people would steal the stuff and whatnot.” It has
people think, “Huh, they don’t trust me,” and that just changes the energetic dynamic inside the company in such a negative way. The alternative is this particular company did away with all that and engagement went up. Because people were like, “Oh wow! They actually trust me to be responsible.”
Andy: Is there anything that you’ve instilled within your company to create? Like when you bring people that actually they amplifies the culture. We make it really hard to get hired here.
Andy: I think there’s something really special about that because everybody goes through like a gauntlet so to speak
Andy: By going through that, there’s this badge of honor, there’s this thing that you’ve made it, you know? The team celebrates that in anyway.
Andy: What are other mechanisms that you have to create the culture that you guys have built?
David: Yeah, that’s great.
Andy: Especially as a virtual team because that changes the dynamic a little bit.
David: Yeah. Well, we do something. Because we’re virtual, we have to find ways to have cohesiveness. I’m a real big believer in there’s no substitute for face-to-face contact, but you don’t need it all the time. We bring various teams together. Periodically, the entire leadership team.
Even though we’re split on two coasts, gets together once every three months for an offsite or bring the whole company together once a year. And then every day at 10AM Pacific, we all get on a zoom.us video conference. The whole company comes together on HD video and we do a 10 to 15-minute what we call our daily boost.
Somebody volunteers an intention for the day. “Today’s intention was trust your instincts. Look for the value in …” Christian who lives in Poland said, “Look for the value in your intuition that you’ve honed over the years and trust what your intuition is saying about your work today.” So, we all set a timer. We meditate on the day’s intention together as a team, you know, really pondering that. It tend to be things about where can we bring more presence or focus or awareness or productivity to our work.
And then we go around sharing our triumphs from the day before, you know, big successes plus -- we ask the question, what would make today awesome if you -- If you accomplish what, what would that have been to and today would have been really awesome. That brings a lot of cohesiveness through the team but that’s more of an ongoing thing.
In terms of onboarding, there’s a few things that we do. One is we actually run everybody through Eben Pagan’s Wake Up Productive program.
Andy: Do you?
David: Yeah. So we offer that and people got a ton of value out of doing that. It brings everybody kind of on a similar level of feeling like, “Wow! I’m part of this culture around high-leverage productivity and we’re all like productivity ninjas around our -- His program starts with cultivating health and vitality, that first thing in the morning is like having that practice for yourself of like really taking care of your body, your mind, your spirit, etc. And so we do that. We’ve sent a lot of people to Anese’s program.
There’s a level of cohesion and transparency and coordination and even really healthy conflict because we have such trust on our team that we could engage in like real -- it’s like we’re battling stuff out but it’s not because we’re attached to our ideas or trying to make each other wrong, it’s because we’re all kind of fighting for the best idea and we’re all willing to say, “Okay, that’s it. You got it.” you know? At the end we all feel great after having --
It’s amazing to be in kind of very energetic discussions and then all walk away feeling heard and great at the end of every one of those conversations. Some people come in our company and are like, “What the hell? I’ve never experienced anything like this.”
David: So it’s just like being in the mix of our company and our dynamic that, I think, is probably the biggest thing. The culture is what speaks to itself.
In fact, it was really funny. Shane, who’s our VP at Customer Success, was just saying yesterday because we’re interviewing somebody. He’s like, “I always like to think about projecting out where a candidate is going to be a year from now after having been indoctrinated in our culture. I could see this guy as really being open to that and I could see his self a year from now and I think he might be the guy.
David: Because it really is like we have this amazing center of gravity that pulls people in and into a certain direction with us. That’s another key thing about our culture is like, you know --
Paolo Coelho, who wrote The Alchemist, has a great quote that I love and he says, “The reward of our work is not what we get but who we become.” I really believe that. Everything we do, all these interactions, these conversations we have, the products we make, the relationships we build were always becoming a new and better version of ourselves or if we’re aligned with the right things. If you can create your life in a way where the situations you’re in move you in that direction then real magic can happen. It happens one day at a time but when you look back over a year or a decade, it’s profound what can happen.
Andy: Bryan Franklin at one point said, “What if we don’t become entrepreneurs to create what it is?” because entrepreneurship is the perfect challenge for us to become the person that we want to become.
David: I love that.
Andy: I do too. And I don’t think it’s limited to just entrepreneurship, I think it’s business in general.
David: I agree.
Andy: We’re almost making that the primary goal and that the business is a function that allows us to facilitate that transformation and that growth as a team but making that very much a priority was in the company’s. I mean changing that growth.
David: Oh man. I got chills to hear you say that because that is so aligned with our message in what we do in 15Five. In fact, they gave a talk at the last MetaMind where I asked at the beginning -- Because, you know, in this group with Eben and a hundred and somewhat entrepreneurs and business leaders and I post the question. I said, “How many of you in this room believe you’re doing work that is aligned with life calling your purpose?” Eighty percent, 90% of the hands went up, right?
David: I was like, “Well, that’s what I’d expect. You’re all doing your thing. You went off and did it.” And then there’s a bunch of coaches in the room who help people find their purpose and I said, “Well, a lot of you guys offer programs to help people find their purpose. Step number one is figure out what you’re going to go start and go off on your own and do it.” I’m like, “What about everybody else? Does that mean everybody else who’s working for you doesn’t get to live their
purpose and doesn’t get to have business be a place where they too can step in to, you know, their why distribute?” because I don’t buy that. I don’t buy that we’re all meant to kind of go off and start something. We’re at those stages of our lives. So what, when we’re not doing that we’re kind of not --
Andy: Screwed, you know.
David: Right. I’m just a cog in the wheel. I said, “I don’t believe that’s true.” I actually have pondered that question and have created an environment where all of our people get to step into that for themselves and have that experience as members of our team, right?
David: My job is to create those opportunities for them and to make sure that people are in the right role that is going to be the place where they get to grow and develop and that’s aligned with their passion and gifts already and where they get energized from their work. We all get to feed off each other’s growth, and evolution, and transformation in that way. That’s the view I have for business.
Andy: Dude, I’m so with you, man. I love hearing that.
There’s so few companies that are doing it and it’s going to be what everything shifts to. Eventually this whole, like -- It’s insanity this idea that people are stuck with jobs that they hate that they’re working their entire lives. I’m just, yes, moving away from that and I’m happy that we’re on the same path with it together. It feels good, man.
David: I am too. If you ask Simon Sinek about his why, that’s his why also.
Andy: Oh, really?
David: That’s his underlying why. Right now, I think, it’s 80% of the people in, at least in the US survey, say they hate their jobs. That they’re in a job that they don’t like it and only 20% say that they’ve got something that they really kind of inspired or connected with. His why is to flip that statistic.
David: In his lifetime. I’m onboard. I’m in a very similar why and then actually about to spend the next year developing a body of thought leadership, manifest they want to talk and eventually a book around what is possible when you radically
invest in your employee’s success. Not just their success at work but their success in their whole life. What possible for business, for your business. The real, real business benefits and I believe there are many.
Andy: Oh yeah.
David: Because you got people who are like -- not only they’re living better lives outside the office but they bring that energy back into the company and they’re inspired, and loyal, and committed, and turnover goes down, engagement goes up, your culture thrive, right?
David: And all this stuff is just really amazing what can happen. If we all take that frame, imagine the kind of society we live in, you know? Where people are really supportive in their growth and evolution and not just -- where companies don’t look at their employees and say, “How much can I get from you?”
David: That’s the stance. It’s “How much can I get from you?” You take a traditional org chart, CEO’s at the top, viewed as the person that everyone supposed to support, right? Instead, you take that org chart and flip it upside down and now it looks like a tree. The CEO’s at the bottom. What’s missing from the traditional org chart is what’s underground, the roots include your philosophy, your values, your culture, the ecosystem, your investors, all of that, right? Supporting the company. The CEO’s job is now not to get anything, it’s to support the executives being successful.
David: The executives to support their managers in being successful, right? Now you have direct supports instead of direct reports and it’s how much can they give as oppose to how much can they get. And then by focusing on the leaves of the tree, the leaves are thriving. Now you’re taking in some light. The roots are thriving, you’re taking in water. You’re building that trunk. You as a CEO standing more and more and more and being able to hold more and more and more and support more and more, now, your organization thrives and it thrives because you’re focused on each individual and their success.
That’s kind of the gist of what I’m wanting to go out and talk about. Just starting to formulate my thinking around it.
Andy: It’s been so awesome having you on the show, man. Thank you for coming on and sharing all these.
David: Yeah, of course.
Andy: If people want to get in touch with you, how do they do it? 15five.com?
David: Twitter dhassell. You can also find me on LinkedIn. Just search David Hassell, you’ll find me there. You can check out 15Five at 15five.com. Yeah. I’d be happy to connect.
Andy: Awesome, dude. Thanks for coming on again.
Andy: See you.
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