#1: Matt Blumberg, Bolster

Welcome to From Startup to Grown up, the podcast. My name is Alyssa Cohn. I'm an executive coach, an angel investor and the author of From Startup to Grownup. Each week I talk to founders, creators, advisors, investors and builders of all kinds about their insights and experiences in going from startup to grownup. This is episode number one and I'm so excited to have Matt Blumberg on the podcast for my very first episode. Matt is OG New York Tech and you're going to hear all about his incredible leadership journey as a first time founder and CEO of Return Path. Matt and I talk about the how and why to design your own support systems, how he thinks about saying no. And Matt unveils the French fry principle, which you're all going to want to hear about. Matt also talks about his almost sale of his business and how difficult that was for him and and how he regrouped. You're also here about his new book startup CxO as well as his new business bolster that he founded with eight co founders. That may be a record. As always, in this podcast you're going to hear his personal real talk journey of going from startup to grownup. Please enjoy this amazing episode with Matt Blumberg. Matt, welcome to the show. I'm so happy you're here.

Thank you for having me. It's good to see you.

So as I said before, you are really, I think a foundation of the tech ecosystem here in New York. And I'm just curious, I'd like to start with your background. Where did you grow up and did you have early signs that you'd end up being an entrepreneur?

I grew up in San Diego, which is about the nicest city in the world and absolutely love California, particularly this time of year when it's so hot and humid here in New York. And there were in fact a lot of early signs that I wanted to be an entrepreneur. My dad was an entrepreneur and actually both grandfathers were entrepreneurs as well, so.

Oh wow. Legacy family members.

Maybe something genetic in that. And we have this really funny picture. So my dad and I team teach a business school class at the University of San Diego every year or two that a friend of his is the professor. And somehow the professor got ahold of this picture. So he always introduces us by putting this, this picture up on the wall which is me when I'm about 4 years old wearing my dad's like suit jacket and tie and carrying his hard shell briefcase. I think to some extent I always wanted to do something like this.

That's amazing. Can you talk a Little bit. Was there like an early entrepreneurial adventure? I could see that you have this legacy, that you saw your family be entrepreneurs, but what was the earliest thing you actually started yourself was like a lemonade stand or something?

Yeah, I don't know that there was quite that entrepreneurial that young. I definitely started a school store at my high school, but that's about as early as I can think back to something.

Yeah, that's. That's great. You know, the data on entrepreneurship is so interesting that you are so much more likely to be an entrepreneur yourself when you see it in your family. So it's. That's certainly true of you. So as you built Return Path, I'm sure there are many ways you grew as a leader and as a CEO and really as a person. Can you share some of your growth kind of journey and insight from becoming that CEO and tell us a little bit about the founding story of returnpath as you tell that.

The founding story of returnpath goes back to the job I had before that. So in the very early days of the commercial Internet. So Starting in early 1995, I was working at a company in New York called Moviefone, if you remember the old 777 film phone service. The Moviefone team had started that business in the 80s. They took it public and hired me in early. My first job was figure out what the Internet is and figure out if we should do something on it. And I ended up as the GM of the Internet business there, which was really interesting time in history. When you look backwards, I think I woke up one day at age 25 and I was running like a top 50 web property, not quite knowing what I was doing. So I had a great experience before I started Return Path for a few years, growing a business and leading teams inside of someone else's company before I started my own. And they're were lots of ways that I've grown as a leader over the years. And I think you're never done growing as a leader. All of us are works in progress. But when I think about the early days in particular, I think one really important thing is I sort of realized early on how little I actually knew. And I think as I've gotten older, I realized that more and more. And the result of that is I think I started listening a lot more than talking, which is ironic to say on a podcast, but that's certainly one of the early leadership lessons I learned. And I think another one, which probably took a couple more years, was appreciating the difference between Leading and managing and certainly management and delegation and keeping people to task is important, but I think I had probably lumped leadership and management together in a category and they're quite different. Coaching people to success, inspiring people is very different than managing.

Which are you more naturally attuned to, Matt? Cause I feel like some people would say I'm a great leader, but not a great manager or someone kind of vice versa. How do you feel?

I work hard at both. I try to do both as well as possible. I think both are incredibly important to mobilizing an organization and driving a company to success. I think over time I've probably become more of a leader than a manager, but I don't know. You'd have to ask the people I work with.

Right. The consumers of your leadership. That's a very good. Although I'd love to dive into the specific skills. So you know that my book is called From Startup to Grown up, and it's divided into three sections. Managing you, managing the team, and managing the business. If you think about any of the skills inside of any of those domains, what were some of the easiest for you to learn and what were some of the hardest?

You know, I think the. One of the hardest was learning how to manage others, how to delegate properly and manage others. And I got lucky with that one, although it didn't. I'm not sure I felt lucky at the time. And then I went, when I was at Moviefone one day, from managing one person to at some point we did some kind of reorganization or I got promoted or something. And I went from managing one person to having a team of 30 with five direct reports and two layers overnight. Like, overnight.

Oh, my God.

I think back to that poor woman, Alyssa Robinson, who was the one person. My first management experience of managing one person. And I was awful at delegating. I mean, I think I was nice to her and I think she and I had fun together. But, you know, I was probably micromanaging everything and taking things over from her and telling her exactly how to do things, like all the horrible things you can imagine. And I think it can be very challenging for people to sort of increment their way out of that. Like I said, I got lucky and I got one day. I didn't have a choice anymore. There was no chance that I could do that, you know, sort of that level of management with a big team. So. So that. That's sort of your managing others or managing team, which I think is generally quite challenging. The other area that I spent a lot of Time on over the years was sort of self management. And, you know, I think there are pieces of self management that came very naturally to me and some pieces of self management that were a lot harder. The pieces that came easiest to me were what I always called, you know, sort of designing my own support systems. So figuring out how to work with a coach, figuring out how to work with an executive assistant, figuring out how to work with a board, establishing a peer group of fellow CEOs and getting the most out of a peer group. So that those sort of support systems have always been very important to me and also kind of come very, very naturally. The parts that were a lot harder, when I think back to sort of earlier in my career, were saying no to things. And my best friend from college, Seth, has something that he calls the french fry theory, which I've written about on my blog and in my book, which is basically that you're never too full to eat one more french fry. There might be a moment where you're too full to order another plate of french fries, but you're never too full to eat one more french fry. And work is frequently the same way work as a founder or a startup CEO. There's always one more task you can do. There's always one more request that comes in. There's always one more email you can send. And it was very difficult for me for a long time to manage the french fry problem and get to a place where I could actually just start saying no to things periodically instead of consuming one more task and one more to do.

Right? Oh, that's so profound. There's a lot I want to double click on there, but I want to start with the french fry and you're begin. You're sort of learning to say no. How did you ultimately learn to say no? I'm sure it was a process. But what were some of the ways that you both decided for yourself? I gotta say no. And also, what are some scripts and some ways that you framed no to other people so they could accept it?

I think all of that comes down to being very clear about priorities and very clear about strategy. And someone, I can't remember which business guru, but I heard or read once that strategy is the art of saying no or knowing what to say no to. And I don't know that there's necessarily a script or a magic wand around that, but being very, very clear about what the organization's priorities and strategy are and what your personal priorities and strategy are within that. What's your contract with the organization? What's your contract with your team? What are you responsible for delivering? If you're really clear on those things, and particularly as a founder or a CEO, if you're very clear on what things you can uniquely do, like no one else can do in the organization. So therefore you must do or they don't get done. That's all the foundation of understanding what to say no to. And saying no to something could be asking someone else to do. Could just be outright saying, no, I'm sorry, it could be saying, no, but, or, no, but I'll have time some other time to do it, or a trick that I learned. Here's one trick that I learned over the years from a couple of the venture capitalists who I've worked with for a very long time, is to sometimes add just a tiny bit friction into the process and see what happens. So, you know, it's very easy for someone to ask you to do something. It gets a little harder for them if you make them do something in order for you to do the thing they want you to do. So someone says, hey, can you introduce me to XYZ person? And you say back, absolutely. Would you just write an email that I can forward to them that asks them exactly what you want? So one of two things happens when you put a little sand in the gears. Either it's a lot easier for you to do the task that they want you to do, or it's the little friction you put in makes the task go away.

That is very well said. I know that I also, you know, people will reach out to me and say, you know, can we do a call or something? And, you know, I'm kind of open to it, but, like, this is not a good time. So I'll say, that's great. You know, hit me up in three months and probably will be able to. And then there was a lot of those go away. And so then you can also weed out the people who are very. Actually more serious.

Yeah, that's right.

Or more serious. You know, I'm just going to go back to the other thing you talked about in terms of managing yourself to have a support system around you. So I just, first of all want to give a shout out to your coach, Mark Maltz, who's the one who originally introduced us.

That's right.

I know Mark very well. He's a really quite enlightened, wonderful human being and a great coach. I know. And I know you've had a lot of good experience with him. I'm just curious when you think about sort of that support system overall, that sounded like it was natural to you to bring together, but actually, a lot of founders that I find, they're kind of lone wolves and they don't have that support system around them. They don't value that support system. How did you sort of set that up? What advice do you have to founders on building that support system around you? Take.

Take one thing at a time. So, you know, if you. If you line up. I think. I think I said five things, right? Coach, mentor, and I can explain the difference between the two. Executive assistant, board and peer group or CEO forum. Don't pretend if you're starting your first business that you need all five at once. Pick one and what you'll find each one as you perfect. It adds productivity and adds quality to your life and to your work. And for me, it just made me hungry to kind of work on the next one.

Yeah. Oh, that's great to know. Well, I'd love to hear how you sort of articulate the difference between a coach and a mentor.

Yeah. It's something I have only recently come to really appreciate. And it's because Bolster's business, a big piece of it, is helping startup CEOs find coaches and mentors. So we had to get very clear on what they were. I think of a coach, and this mark, who you talked about a moment ago, would be a perfect example of that. And I think this is the work you do as well. It's actually the work my wife does too. Coaches I think of as people who help you be the best version of you. They help you develop, they help you work on your development plan, they help you work on the human aspects of being a manager or a leader. When I think of mentors, and I almost prefer to call it a functional mentor because I think that's a little sharper point on it. A mentor, A functional mentor is someone who's done your job before, ideally at scale or multiple times, and can help you learn the craft of doing your job. So there's obviously some overlap between the two. There are people who are both functional mentors and coaches. Right. Someone who's been a career chief marketing officer who then becomes a coach can be a coach and a mentor for a marketing leader. But frequently they're different people.

That's so well said. I appreciate that. So if I think about you in your role, what I know to be true is CEOs always have to have complicated, difficult, delicate conversations with their employees, with executives, with, even with the board. Could you talk about what are some of the most awkward or challenging moments in terms of those discussions you have to have with people? And then how have you approached them? And are there scripts or tools that you can kind of tell us about that you have found effective?

Well, I'll answer the last part first, which is a truly difficult conversation that's planned as opposed to a spontaneous one. The script is to script it out ahead of time. It's not a formulaic script, but even if you don't bring that script into the room with you, at least you've forced yourself to envision the whole conversation. And that at least gives you kind of a running start with it. But sometimes it's good to bring that the script or talking points into the room, too. For sure. Yeah. You know, I think the. I think the most. In some ways, the most challenging conversations are the. The spontaneous ones that are personal. And I'll come back and talk about business ones that are. That are not spontaneous in a minute. But, you know, if you're. If you're a manager, a leader, and certainly one that cares about your people, you will end up in conversations with people on your team over the years about death, about miscarriages, about divorces, about cheating spouses, about parents with Alzheimer's, about their own illness. I mean, we just go down the list. And sometimes you know about those topics before you walk in a room, and sometimes you don't. And those are, you know, assuming you have some healthy degree of humanity about you. Those are always, always quite challenging and can be a little uncomfortable for a lot of people. And there's not much you can do to script those or plan for those other than sort of learn how to be a good listener and how to be empathetic. Yeah, but when you start talking about difficult business conversations, I guess you can put them into two categories. There's firing people or giving people strong performance feedback. And then there are difficult conversations about the sort of state of the business. And there are a million permutations of both. You know, I think the. I personally have always found firing people probably the most challenging and doing layoffs the most challenging of the most challenging. Because then you're firing people, and it's really like they didn't do anything to deserve it. And in fact, you feel, as a founder or a CEO, like you did, you caused it to happen. Right. You're in charge of the business. The business isn't doing well, therefore you must fire people. And those are the most difficult conversations. And I think the degree to which you plan for one of those conversations and script them out or bullet point them out should vary directly with how difficult the conversation is. The more difficult the conversation, the more you want to script it out.

Right. So can you give us an example of. You don't have to obviously tell us about a person. We don't want to hear that. But like sort of the way you approached either difficult performance feedback or when you did have to do layoffs or when you had to fire an executive, can you sort of give us how you thought about that and the words you actually used? People find that very helpful.

I'll answer a slightly different conversation, which I hope is also helpful. I think the most important conversation to have with an employee or an executive who is not doing well is the conversation you have before the one, you fire them or maybe two before the one where you fire them. So not that firing is ever easy or fun, but the thing that I see a lot of managers, you know, sort of mess up on is not being crystal clear with someone that they're in trouble, that they're at risk of being fired, that their performance is an issue. Not being specific about what's going wrong, not being specific about how you would suggest fixing it. And in. In particular, and if you want to get to specific wording, not actually looking the person in the eye and saying XYZ must happen, comma, or you will be fired. And following up that conversation with an email that also says that that's the hard part to say in a conversation with someone. And it's hard when you fire them, but. But if you don't say it two conversations before, it's ten times harder when you go to fire them. And there's so many people who, you know, sort of shy away from those actual words. And we'll use Com. We'll use words in that. In that feedback conversation, not the termination one, but the feedback one, they'll use phrases and words like we'll have to part ways. That's going to be a whole different conversation, right? Things where, you know, they're kind of alluding to it or hinting at it, but they're not actually saying it and making the assumption that the other person is going to understand what you mean and the serious of it, the seriousness of it, is a problem. So I have always found that, you know, if you, in that pre conversation are crystal clear that something has to change or the person will be fired and you back it up in writing so they can't then say, hey, I didn't know. You never said right then look, hopefully you coach them out of it and they return to being the productive member of the team or society or whatever you want to say. But, but if they don't and then it comes time to fire them, then that conversation, the hard conversation becomes much easier, Right?

Oh, that's so powerful, Matt. And I especially appreciate that you're like not, you know, nodding knowingly, you know what I mean? Right. Like you're just sort of saying it right out there and using those words. I think that's so significant. And then you talk about, hopefully you coach someone out at. That's interesting. So I'd love to hear you talk about how do you coach someone out of that when you get to that point? Have you had an experience of really being able to coach somebody out of that sort of hey, you're about to get fired place and what was that like?

Yeah, and you know, look, sometimes you fire someone for performance reasons and sometimes you fire them for, you know, sort of fit or cultural reasons. And you know, over the years at Return Path, we, we tried to give employees the benefit of the doubt all the time. It's hard to coach someone out of a hole and it can be, I think it's very difficult to coach them out of a cultural hole. But we had success stories with both coaching them out of a performance hole and coaching them out of a fit hole. And I don't know that there's necessarily a formula for either one. I think frequently when someone is not performing well, but they're capable of it, and you know, they're capable of it because they used to perform well for you, for example, or you know, you interviewed the heck out of them and referenced the heck out of them and know they've performed well for others, there's frequently something else going on. There's something else going on in their life at work, there's something else going on in their life at home. They've had some kind of change of mind or change of heart about their enthusiasm and energy for the business or for the job that they're doing. So that's one set of things that you can almost be their psychologist and kind of help dig through. And those are frequently fixable problems you can't fix if someone is unhappy at home and it's affecting their performance at work. But even getting them to acknowledge that and acknowledge that to you can be very helpful. Helpful. But if someone is, for example, like stuck in a rut at work, so they're kind of, you know, taking it, you know, taking a half baked approach because they don't love what they're doing anymore. But they're a really talented person that knows your company, industry, organization. You can frequently go a long way just by making small course corrections to their actual job. Hey, you know, what about you take on this new assignment, this new challenge? You still have to do 80% of what you're doing today, but what's the 20% that's not working for you? And maybe we can find another home for that work in the organization. So I think coaching people around performance issues is doable. I'll give you another example. Sometimes people, if you stress them too much, if you're challenging them way beyond their comfort zone, they get to a place of paralysis. And they get to a place where, as Mark, my coach, always used to say, you can actually get de skilled at something. And a really perceptive manager is going to be able to note that and say, all right, maybe we're like loading too much on you here. Or maybe we're asking a cat to bark and that's just stressing you so you're not doing well. Let's try to take the temperature down a little bit and see how it goes.

Yeah.

So the performance issue, there are lots of ways to coach people out of it. They don't always work. But if someone's capable of doing a job and not doing it, then you can do that. Coaching someone who's not necessarily a cultural fit is a lot harder and probably, I would guess, a lot less successful on average, but it is absolutely possible and doable. I think that probably takes much more of either a high degree of self awareness on the part of the person who's not fitting to be able to understand that feedback, internalize it, figure out that they want to act on it, and then actually act on it.

Or.

It takes a shock to the system. And I'll give you an example of the shock to the system that we had a bunch of years ago. We had someone coming in from the outside as a pretty senior person who proved to not be a good cultural fit almost right out of the gate, which was really disappointing. He was just.

Matt, what do you. Yeah, what do you mean? Are you going to explain what you mean by not a cultural fit? We'd love to hear that.

Yeah. So our, you know, our culture at return path was very, you know, sort of even keeled and not overly emotional and what we always called people first. And by that we just meant that we, you know, we start with our people, we give them the benefit of the doubt. We're focusing on training them and coaching them and keeping them engaged and happy. And if we do all of that right, we'll get the best work out of them. That was sort of our. Our management philosophy. So what I mean by not. Not necessarily a great fit was, you know, we had someone come in and there are lots of kinds of bad fit that I could talk about over the. Over the years. But we had someone come in as a very senior manager who, it turned out, didn't really buy into that, knew about it up front. We were like, super clear that that was how we operated and said all the right things in the interview process and liked the idea of it, I think genuinely liked the idea of it. I don't think he was being disingenuous in the interview process, but then got in the door and couldn't behave that way because he hadn't been trained to behave that way. And he was 20 to 30 years into his career, not five to 10. So he was kind of wired a very different way where he didn't trust anyone on his team and he yelled at people on his team and screamed at people on his team and didn't want to hear it if someone had a different point of view and just a bunch of things that were not how we handled people as a system at the company. So that's what I mean by sort of poor cultural fit in this particular case. And the kind of shock to the system that ended up leading to a very successful coaching outcome is we gave him that feedback. And we gave him that feedback in no uncertain terms, including the comma or you will be fired, followed up in writing. And my head of HR and I didn't hear from him for a couple days. I think he probably didn't come in the next day. And when he did come back in, he came in to see us and he said, you know, I told my wife about the feedback you gave me, and she told me that you were right and that actually I'm kind of like that at home too, and that it was becoming a problem for our family and that was the beginning of coaching him to success with that.

Yeah.

But I think it kind of took that shock to the system for him.

Yeah.

Right. Before that, the problem was us, Right before things started changing and things ended up in a completely different place within six months.

Yeah, that's so powerful because the shock to the system in his case came from the workplace and then followed by the family.

Right.

So it's like, I guess, you know, there's one common denominator here. So he was able to sort of see that, to his credit. He was able to see that for.

Himself, to his great credit.

Right. That's amazing. So you've talked a lot about culture, and I'd love to hear, maybe just to talk a little bit more, bigger picture about how you were intentional about building culture. I know that's been important to you. And how did your culture change at Return Path as you grew, and how were you intentional about that? And how did it kind of just happen around you?

Yeah, I mean, the first thing is we were just obsessive about culture from the beginning. And in fact, I think the roots of the company were even in this concept of having a people first organization. So I had worked in several different jobs before I started Return Path, and all of them were, you know, contemporary knowledge economy, 21st century jobs, even though I guess it was still the end of the 20th century, you know, consulting, investing, tech and media. And all of those jobs had some elements of them which felt contemporary, but all of them had a lot of elements that were extremely old school. And what I mean by that is, you know, not trusting your employees, you know, being a jerk to your employees, not caring about your employees, not training and developing your employees. And I found with a lot of those work experiences, and they weren't all bad, but I found with a lot of those work experiences, the organization was saying one thing, but frequently behaving differently. So they were saying the people are our biggest asset kind of line, but then they were managing their people the same way you would have controlled a factory floor in the 1800s. You know, making you punch in and out and oh, dear God, yeah. And, you know, policies about, you know, if you're caught sending personal email from the company's computer, computers, you can be disciplined. And just some very incongruous policies with people are our most important asset. And I think a lot of the roots of the culture that we tried to build at Return Path around this kind of people first culture were in those experiences. So from day one of starting the business, I was very obsessed about we're going to do things differently here. We are going to trust our employees, we are going to invest in our employees, and we are going to provide them with the freedom and the flexibility to do great work, because their work necessarily involves a certain amount of creativity, because it's knowledge economy work. And if we do all of that stuff, there's a quid pro quo. And the quid pro quo is high performance. And you have to be engaged, you have to bring your A game to work every day. And you know, your question about how did the culture change as we grew? We were in business a long time, it was a 20 year run, and we went from, you know, two employees to 500 employees and from one location to 12 locations. We had a lot of dimensions to the company's growth over time. And I would say there were, there was one very significant positive change and then one kind of set of challenging changes. The positive change was that the driver of the culture shifted at some point from me to we. So, and, you know, certainly true of most, you know, founder led, founder driven companies. Right. The value system, the culture, etc. Is usually coming from the founder of the founding team. But there was a moment, and I can't remember when it was 50 employees, 100 employees, where I think we did some things that changed the culture from me driving it to us driving it, which was very powerful. And that really made the culture a reinforcing system as opposed to sort of something coming from above.

Right. How did you do that, Matt? Or was that sort of natural and organic? Do you feel because you hired the right people or did you feel you were intentional about that?

I think there was one thing that happened that was an accident and one thing that happened that was intentional, but it wasn't, it wasn't my doing. The thing that was an accident was we realized after a bunch of years that we actually had never written down values for the company. We had a really clear value system and a really clear culture, but we had never actually articulated them. And most companies today actually sort of start by articulating them and maybe even then. And that was probably a mistake to begin with, but I had the whole company, and at this point we were about 100 people. I had the whole company engage in an exercise over the course of a month or so in teams to try to write down the company's values. And there was a lot more to it than that, but that was the gist of it.

Yeah.

And I think the act of having every individual in the company try to articulate the values and then trying to sort of wordsmith all of those submissions coming together into common values was one thing that was sort of not intentional, but it really got everyone to feel like, oh, I actually, I can see in that sentence some words that I put down, and therefore this is mine too. And then I think the other thing that worked was I had had human resources leaders before, but the first person I had that was a true chief people officer who was with return Path for six or seven years. Angela Baldonaro. I was still a very close friend. She at some point said, hey, you know, if we're going to be serious about this values and culture thing, we actually need to weave these into the business processes that we have. And we need to be recruiting people on these values. We need to be interviewing candidates against these values. We need to be defining jobs against the culture. We need to be reviewing performance against the culture. We need to be compensating and promoting against the culture. So she basically wove into the employee lifecycle at every possible touch point the care and feeding and use of the values. And I think that plus the accidental exercise really got the whole. The whole organization to take ownership.

Boy, that's amazing. When you did the exercise in teams, what's the prompt you gave? Like, go off on a team and articulate your values or. That was it.

That was basically it. I mean, it was a little more than that. I think we were using. I can't remember the authors, the Harvard Business Review article. The article's title is can you say what your strategy is? And I'm drawing a blank on the author's name. It's a famous article.

Find it.

It talks about mission, vision and values and strategy. So we gave teams. We assigned random teams in the company. I think we did it like alphabetically by first name or something. Yeah. And we asked each team to hash through as a team what they thought the mission, the vision, the strategy, and the values were. So we actually got all four things back.

I see.

We got them back from 10 teams and then the executive team that none of us were on any of those teams. Our job was to look at the 10 submissions and to try to turn them into some common language.

Wow, that's great. And then I love how you was such an integrated process. So what did you codify as the values and the culture? And I'm asking because I think we think that culture just means. I mean, you even said people first. Fine, be nice to people. And I feel like that's what kind of culture is to some people. What else did you include in the culture especially that you think was distinctive to you guys? To return path.

I don't have the document in front of me, so I'm going to struggle to remember all of it, but where we landed over time. And now I'm kind of blending a couple stories here. But was an acronym, which is helpful to get people to remember things. Although I'm sitting here not remembering all of it.

That's okay.

The Company's name was Return Path. And we described our culture as people first. And then we said, it's our path to going above and beyond the call of duty, for excellence. And so it was literally the first letter of all of those words. So it was O, U, R, P, A, T, H, A, B, C, D, E. And each one of those was a value. Things like O was for owner. Right. We think like owners. U was for unique. I think. Yeah, I'm not quite sure. You know, T was for transparency. P was for people first. Great. You know, A was for appreciative. There was an H for helpful. So each one of them was, you know, sort of represented a word or a phrase that we frequently sort of turn to in our work. And look, the trick with values isn't to write them down or articulate them. It's to use them.

Yeah.

And the language that you had to use when you were working at the company involved all of these things at different points in time. You weren't pulling 15 levers in every meeting. But if a meeting wasn't going well, someone could say, hey, guys, we're not being data driven here. That was the date. Right. Or we're not being transparent here. We're not being collaborative here. Let's try to be more appreciative of the things that our colleagues are bringing to the table. So it's really kind of using the values in everyday life. And one of the other things we did that ended up being kind of fun was we did a new employee onboarding process, which was very extensive and included lots of things. But there was one piece of it which was a values workshop. And four to six times a year, we would get all the new employees together. Anyone who had started since the last one with the founders or some other old timers in the company. And one of my longtime colleagues and good friends used to call it the Return Path oral history project. But it was basically us talking about the values of the business and giving examples of, hey, here's a time where we used the value of transparency to make a business decision. And here was the challenge, and here was the outcome. And by sort of telling all those stories to new people, we really tried to weave into their onboarding a certain amount of. No, no. We really take these things seriously. These are not just things that are, like, printed or sitting on the wall somewhere.

Yeah. Oh, that's amazing. That's such a great process. And I appreciate. I mean, it's interesting, you know, you said, oh, I'm not gonna be able to Recall them. But actually you were able to recall a lot of them.

Right, because not quite in order.

Yeah, yeah, exactly. But that's the way it is. So let's talk a little bit about the journey of, you know, the founder and startups, because startups are filled with ups and downs and you don't always know if you're winning. So how have you learned to deal with just bad moments in your day to day and like difficult setbacks?

Well, the best thing and the worst thing about being a founder is that your life is full of terrible moments and great moments. And of course, the challenge is that they frequently come like in rapid succession. So the best way to deal with a bad moment is to just wait a few minutes and something else is going to come along and replace it. But what that means is being thoughtful, standing up, clearing your head, taking a walk around the block. If it's really awful, stop for the day. But I think Ben Horowitz, in his wonderful book the Hard Thing about Hard Things, talks about what he calls wifio moments. So wfio, which stands for we're fucked, it's over. And you have a lot of those moments as a founder and CEO and the trick is to not infect the whole organization with them. So, you know, there are plenty of founders who will literally walk out of their office and say, we're fucked, it's over. And like all of a sudden, like scare a whole bunch of people around them. So.

Right. Do not do that. What not to do. Right, right, right. So how do you. That's so, I think, so important. You know, in my book, I talk a lot about authenticity and the idea that, like, you know what, authenticity is not always the right answer. People don't really want you to walk out of your office and say, we're fucked, it's over. Like they do not want that from you, the founder. So how do you manage your emotions when you're then going to talk to the team? When it's easy to talk about this on a Saturday morning as we're recording this in the middle of it, it's actually really kind of awful. So how do you both manage your emotions and then address the team if you need to?

Yeah, I always say transparency and authenticity have some limits to them. And, you know, you don't need to tell everyone every thought you have every time you have the thought.

Right.

And you know, look, the best way to manage that stuff is to make sure you have some outlets for discussing them and everyone's situation is different. The outlet could Be people on the outside. Right. It could be advisors or friends or investors or a spouse or a coach or things like that. Right. But it can also be your kind of inner circle on the inside as well. Certainly if you have co founders or if it's a more mature business and you have an executive team you can trust with those things. I always find with those things that as long as you have some time to process the bad news, the bad moment, and you can process it with other people by actually talking out loud and verbalizing and kind of going through it a little bit, it puts you in a better position to be more transparent with the broader organization about things that are going on.

Yeah, that makes sense. So time kind of gives you a moment to pause and reflect.

Time and also talking through it.

Yeah. So was there particularly if you could tell us about a particularly tough setback that you had, Matt, personally and inside of the business and how you dealt with it? Maybe like your favorite failure, like, what you learned from it.

There's so many to pick from. I think the hardest moment in 20 years came a couple years before we took sold the company, when we almost sold the company. And I actually write about this in the second edition of Startup CEO, which I wrote the second edition after we sold the company. And it's the only time I've ever really either written or talked about that. And names will be changed to protect the innocent and the guilty. But when I say we almost sold the company, I mean, I cannot imagine getting closer to selling the company than we got. So we had negotiated a full sale. We were scheduled. Not only were we scheduled to announce it the. The next day or maybe two days off, we had already signed all the definitive documentation. Like, our directors and shareholders had signed everything. Our lawyer was holding all those in escrow. We had scheduled the All Hands meeting. Wow. The buyer had sent us all of the swag to hand out at the All Hands meeting.

Right.

And, like, this was a Tuesday night that I found out they weren't going to go through with the transaction. And the All Hands meeting was scheduled for Thursday morning. Like, it was close to the end. It wasn't just like, oh, yeah, we had a handshake and it didn't work. Like, we were. We were done.

Yeah.

And we were at the point where, I want to say, 80, 75, 80 people internally knew about this. This was not a secret anymore. We had done such exhaustive due diligence with the buyer that, you know, that a ton of people knew about this. And then, you know, it was Like Lucy pulling the football away from Charlie Brown, you know, run, run, run, kick, and there's nothing there. So you, you know, you end up face planting. Without question, that the toughest setback that, that I had and that our leadership team had in the history of the company. And fortunately our company was kind of long on organizational resilience, but that was a tough one to come back from.

Awful.

And I think it left some permanent damage and some permanent scars. But we did what we could and we started by. So that's one where you don't have a lot of time to process and prepare. You need to start talking about it immediately because there's an all hands meeting in 36 hours. That's not. All of a sudden that turned into our Q3 business review, which we weren't ready for.

Right, I can imagine.

Yeah. So that, you know, because you lose.

Time if you plan to be acquired, you also haven't been planning for your ongoing operations. I can totally relate. Yeah.

So, you know, it started with the emergency of like, all right, let's tell the 80 people that this thing isn't going to happen and do our best to explain why, you know, then let's like brute force our way through an all hands meeting where we have to now turn it into the Q3 business review and pretend like everything's great. At least the business was going well. Yeah. You know, when all of our slides and scripts and everything were like focused on something very different. But, you know, from there it was really about restoring executive enthusiasm and executive confidence in the business. So the 80 people who knew what was about to happen, but really like the top 10 or 20 in the company, you know, so we started by pulling all those people into a room for an off site for two or three days to let the bleeding begin. Right. There was a lot of catharsis and emotion post mortem. It was summertime and the first thing I said was, I want everyone in this room to take a week off in the next three weeks. And, you know, let's make sure we're not all gone at once. But like, everyone's got to clear their head. And we started, you know, then kind of picked ourselves up and dusted ourselves off and being methodical about it. So we spent a lot of time redoubling our efforts on the operating plan for the rest of the year, thinking about, all right, if we didn't sell it to these guys, who else was next on the list and should we go back to someone else? We took a lot of steps around the management team around their employment agreements and compensation because things had gotten so far down the line with the buyer that half the executive team that was about to be fired knew they were about to be fired. They had started looking for jobs, and their employment terms didn't have enough severance. All kinds of things were very messy. So once we realized it wasn't happening, we're like, all right, let's take a step back and fix some of those things so that if and when this happens again, we're likely to be in a better position for it. And it ended with me trying to obtain commitment from everyone on the executive team that everyone was still squarely on board. So I think we did the best we could. I think even with that, like I said, there was some permanent scarring from that.

What do you mean, permanent scarring?

Well, we actually lost some executives, some of those people that had started looking for jobs. Once you start looking for a job, you frequently end up taken another job. And a lot of people lost a lot of sleep over it. We lost a lot of momentum in the business, as you said. We had kind of stopped running the business for a couple months, and I think in the end we did fine. Two years later, we ended up having a successful exit, but quite frankly, it wasn't as good as it would have been. So lots of lessons from that, but that very clearly at the toughest setback.

Yeah. What did you personally learn from it?

You know, I think the biggest thing, and I mean, it's silly because it's such a. It's such a cliche. It's the, you know, the Yogi Berra. It ain't over till it's over. And, you know, I hadn't been really declaring a lot of victory on that deal. I'm always very conservative about that. Until we started signing documents.

Yeah, Right.

Until the meeting was scheduled. Until the champagne was on ice. Literally.

Right. The swag was in the closet.

Swag was in the closet.

Yeah. So it ain't over till it's over. And how did you personally rejuvenate? So you said you had to re engage the executive team. I understand that, but how did you personally re engage yourself and recommit yourself?

That was very hard. And I don't know. Again, we'd have to ask other people who worked with me. I feel like I probably did a good enough job for the rest of the time we were in business at faking it, but I'm not sure I was quite ever the same after that. Maybe it was 97%, 98%. Maybe it was invisible to most, but it definitely took a lot of wind out of the sails. And look, ultimately things like that fade over time and you get back to managing your, your company and running your business and doing a lot of day to day things. But, but, but, but that was, that.

Was a tough one that I can imagine. But then you had your successful acquisition. I think it was two years later for you that you said. And I'm sure there was, I'm sure it was in some ways euphoria because I mean you had. But I also can imagine you were a little bit more skeptical until you saw the money hit the bank account or whatever, right? Yes, but I'm. Yeah, I could imagine. So what was that like? And did you have any feelings? I can, again, I can imagine there was euphoria. But did you have also feelings of like, oh, that's my baby, you know, sort of. What was that like, the acquisition process?

Yeah, I mean, I don't think you can be a founder and not have some level of that. But I think the fact that it had been 20 years, you know, even when you're an actual parent of actual children, like when they're 18, they leave home.

That's what they tell me.

Yeah. So it had been a lot of time. I think I had really been mentally prepared for it for a few years based on the story that we just talked through and had really kind of had, I had had my opportunity to come to terms with it. And for that reason I think it was a little bit easier. I got one piece of advice from a very, very good friend of mine and multiple times CEO that I think was very helpful that I never would have come up with on my own, which was to take time to prepare my family.

Oh wow.

For the sale of the business and in particular my kids. So when we sold the company, my kids were 10, 11, and 12. And when we started really working on selling the company, I guess they were 8, 9 and 10 or something like that. And I realized based on my friend's advice, that my kids had never known me to do anything else. My identity in their eyes was return path. And dad and kids only know so much about life and so much about business. And my friend's advice, which is like, start preparing them for this transition early was so valuable because I guess it's a little bit like the early conversation we had about firing someone. When you make the hard conversation early, that means the later conversation is easier. And I remember when I mentioned at dinner to everyone that hey, this was Something that selling the company was on the horizon over the next year or two, and we were thinking about it, everyone was very upset. Wow. I never would have predicted that. And I think one of the kids was like. Was crying and one of the kids was like, why would you do that? And what's going to happen to you? And are you going to be unemployed? Does that mean we're going to be okay? Which obviously, when you're an adult, you know those things. When you're a kid, you don't. But they were very upset. And then over time, they started to engage a little bit in the sale process. Like, hey, how's that thing going that you talk about? And what does that mean and how is it working? And by the end of the whole thing, like, you know, I had a fourth grader that was talking about due diligence checklist with me. But I think, you know, it's sort of that. That processing of the. Of the difficult conversation verbally and with people around you and over a long period of time that kind of helps you get ready for it as much as helps them get ready for it. And then, you know, I think the. One of the other things I learned over the years from my coach, Mark, is the importance in really marking a transition and the sale of the business, which coincided almost immediately with me leaving the business. I think I was there three weeks after the transaction closed. But we gave a lot of thought as a management team to how we wanted to mark that transition to. And I think we did a nice job of that. And I give a lot of credit to Mark Briggs, who was the CEO of Validity that bought the company, that when I told him this was an important thing to me, he really worked very collaboratively with me and our management team to make it happen. And I think he realized it was probably good for him, too. And we called it the baton pass because the business was still going on. It was just going to look very different and be in new hands. And, you know, our ability, my ability and our team's ability to take the time to say thank you to everybody, to say goodbye to people, whether that's, you know, customers or shareholders or employees, was really, really important to us. And we did some fun things around it. We did some lightweight events, and we built this book, which I'll show you because we're on video, although no one's going to be able to see it, but I keep it close to my book.

Yeah.

So I don't know if you can see this. I can see it a very Large, very thick hardcover book called RP Faces that is literally like 20 years of employee bios.

Wow. It's like a yearbook.

It's a yearbook, but it's a yearbook for. I think we tallied up, we had something like 1300 or 1400 people in the company over the course of time. So we like, we, I think we drove the marketing department crazy working on this because this was a big effort. But you know, it was a few things like that, that, that really again, sort of helped us mark that transition, helped us pass the baton and, and helped us process the change of kind of letting go.

Yeah. Wow. That's quite beautiful. That's lovely. So you left and I guess you took a breath and then I guess you started Bolster. Tell us about that origin story and tell us about Bolster. And specifically I'd love to know what's it like to be a second time CEO.

Yeah. So Bolster, we're a year, not even a year and a half in, we're like 15 months in. So it's still very early. We are very excited about it. I think you said in the introduction we're an online marketplace for on demand executives. So what we're really all about is helping early stage private venture backed CEOs take a new approach to scaling their leadership team, scaling their board, scaling themselves by helping them find exactly the right talent that they need at any given moment in time for a particular task. So we help them find coaches, we help them find mentors, we help them find independent board members, and we help them find freelance executives. So executives who will do a fractional or part time role, an interim role or a project. So all those things are very compatible with kind of the agile nature of building and scaling a startup. They're very different than full time search, although we'll occasionally help a client with full time search. But that's really kind of the essence of Bolster. And I'm not sure there was a single moment that was like a light bulb. Aha. But our team and we have a large founding team, there are eight of us.

That's very unusual.

Which may be a record. It's certainly unusual. And all of us were on the senior team at Return Path for many, many, many, many years. We wanted to keep working together and we sort of wove a bunch of different threads into Bolster. We had spent collectively a lot of time and energy mentoring early stage companies either through programs like techstars or through the different VC portfolios that our company was in. We'd always get introduced hey, can you talk to so and so from this company and help them figure, you know, figure something out or help tell them how you navigated XYZ situation. So we had spent a lot of time in the startup ecosystem. We really wanted to do something in that ecosystem and we wanted to do something that was really focused on scaling an organization. We felt like that was something we had learned and gotten very good at. Return Path and there are lots of interesting trends in the workplace going on now with COVID certainly around working remotely. But even before COVID as we were starting Bolster, the gig economy is not new but it has increasingly been moving up market to more and more senior roles. And there are many, many more people now than there were 10 or 20 years ago who are in their 40s, 50s, 60s even 70s who don't necessarily want the big heavy full time executive job anymore. Maybe they're post exit or a couple of small exits, maybe they're between things, but they really want to engage with interesting and high octane companies and do some work. So that was a trend going on, remote work, et cetera. And we wove a bunch of things with the help of our early investors and partners into the business that's now Bolster.

Boy, that's very much of the moment for sure. And what's it like for you? It's very interesting because your experience now of being a second time CEO is a second time CEO with seven other co founders who you also have worked with for like, you know, in some cases probably a decade or more. So it's a pretty unique experience nonetheless. What's it like for you in this sort of this go round?

Well, the first thing I'll say is I was really nervous about it and the reason I was nervous about it is that it had been 20 years since I started something.

That's true.

So I was a CEO for a long time, but I know a bunch of serial entrepreneurs who start a business every other year. And it had been two decades since we started Return Path and Return Path had grown quite a bit. So I was very comfortable in the role of managing a hundred million dollar global organization. And that job is really different than the job of being a founder of a raw startup, even if your business card says the same thing on it. So I was really wary about that and that turned out to be unfounded. I absolutely love what we're doing. I'm having a blast. I love being an individual contributor and that's probably 80 to 90 to 95% of what I do now. And I'm everything from a, you know, sales development rep to a customer success rep to a marketing copywriter to a product manager, probably more like an assistant product manager. And I love all of that. I love not just being closer to the action, but actually driving, doing the work. And realized I had missed that quite a bit. So that part has gone very well. But look, I would say in general it's easier. And it's easier for many, many reasons. It's easier to start a company today than it was in 1999. Everything is like cheaper, quicker, you know, and just simpler. Yeah, the first thing we did in 1999 is we built out a data center, like you know, just to just to date that a little bit. Right. So here, the first equivalent thing we did is we got free Amazon web credits. So starting a company and setting up a company is much easier, much cheaper. Doing it with a bigger team and a more senior team and a cohesive team, obviously, much easier. But some of what you gain over many years of work is you're just more efficient, you're not wasting time. You know, how to cut through clutter. And the result of all that is our team is having a lot of fun, but we're also executing, I think, really quickly and really well on the business.

Do you think it's helped you? I mean, I know that you're early stage, so you may not have had any moments of truth just yet inside of this company, but do you think it's helped you be more even healed? Like, you know, I know good things are going to happen, bad things are going to happen?

Yeah. Well, one of the things that's interesting about the eight of us is we're eight co founders and we all work together for a long time at Return Path, but only three of us have ever founded a business, so most people were, you know, on the executive team for quite some time, but actually started something. And we have to remind, the three of us have to remind ourselves periodically that the other five haven't actually been through that experience. So I think that kind of helps keep us, you know, a little bit grounded.

I see. That's great. Good. So what would you say is the most challenging element of your role today?

I think the most challenging thing for me is being patient. So it takes a while to get something started and get it moving. You know, even companies that have ended up being multi billion dollar, huge successes, Uber, Facebook, Google. It takes a while at the beginning.

Yeah, it takes a while.

And I think because I know now what scale looks like and what it can look like. And we have a big appetite with this business. We have a big vision for this business. I'm very impatient to get there, so I have to temper myself quite a bit with that.

Yeah, I can totally relate to that. So you're not just an entrepreneur, you're not just a CEO. You're also an author. And I think you, you've been blogging for quite a while and you wrote Startup CEO as a part of that blog. And then just when did this book come out, Startup cxo, When did that come out?

Six weeks ago.

Yeah. So very recent.

It's very, very recent.

Yeah. So June. Just a date, everybody. June 20th.

June 2021.

2021.

Yeah.

I'm confused. Yes. So June 2021 and it's called Startup CxO, a field guide to scaling up your company's critical functions and teams. You call that a sequel to Startup CEO. That makes sense. I was perusing this over the past few days. I am a former CFO myself. So I was looking at the CFO section and I'm like, I love it. It's so geeky. It's so like, you know, the chart of accounts and how you have to think about revenue recognition and sales tax. So tell us about that book and tell us why it was so important to you.

Yeah, so I'll talk for a second about the first book because it's related to the story of the second book. So startup CEO, which we first published in 2013 and then did a second edition in 2020, is designed, it's called a field guide, but it's really designed as an instruction manual for a first time CEO. And there's a great line from Toni Morrison, famous author, Nobel Prize winner, who said something to the effect of if you want to find a particular book and you can't find it, then you must write it. And that's really where Startup. Where both books came from, but Startup CEO in particular. No one really trains you how to be an entrepreneur. How to be a CEO of a startup. If you work at a giant corporation, you will be groomed to be a CEO over the course of 20 years once you sort of get into management ranks. But no one teaches you how to be a startup CEO. And I kind of found myself blogging, as you said. I started startupceo.com as a blog in 2003 or 2004 and just kind of recording the journey. And that led to sort of putting all that together into a book and writing a lot more content for the book. So startup CEO is like 70 chapters of how to do X, how to do Y, how to do X, do Z. They're very short chapters, like three, four, five pages. And it's everything from like how to work with a coach, how to work with an executive assistant, how to fire people, how to build a strategic plan, how to run an off site. So you know, it's sort of meant as like a reference guide. You know, it sits on the desk of a CEO, you can read it front to back. But it could also just be, oh, all right, I need a couple thoughts on how to do X. All right, let me find the chapter in the book. And I realized when the book was done that one of the hardest parts of, of being an entrepreneur and a startup CEO is actually managing all of the different functions in the company. And it's particularly challenging for a first time CEO because you probably haven't done most of those jobs and may not be capable of it. Right. You likely, if you're a founder or CEO, did one executive job really well, or maybe two and then sort of took that into founder dominant. But, but you haven't done every job on the team. So the idea was to create essentially a book of books that took the, the concept of startup CEO to every function on the executive team. So I cheated. I didn't write this book. I wrote lots of pieces of this book. But I gathered together senior executives who I had worked with across every different function and worked with everybody to come up with the outline. And each person kind of wrote their section about how to do their job. So the Same way startup CEO is 70 chapters about how to be a CEO, the CFO section that you read, which my colleague Jack Sinclair wrote of startup CxO, is 25 chapters about how to be a CFO of a startup. And yes, there's a chapter about the chart of accounts and there's a chapter about equity, and there's a chapter about valuations, and a chapter about due diligence and a chapter about strategic finance, et cetera. And then there's a sales section and a marketing section and a product section and a customer success section, et cetera. So I think there are nine sections. And then we did a couple things to kind of weave the whole narrative together. So I wrote a couple chapters in every section about how a CEO should view that section. What are the things you should care about? When do you hire that person? How do you know if that person is doing a good job or not? How do you interact with that function? So our hope, with the book and the reason we're so excited about it is that there are really three use cases for it. There's one which is the CEO. Okay. Help you get the lay of the land of all these functions. How do you hire them, how do you manage them? The second is for the cxo, right, for the department head. If you're a first time department head, it's an instruction manual for you. But even if you're an experienced head of sales, head of technology, we hope it's very helpful to read some of the adjacent functions. So if you're the head of sales, understanding the marketing section and the customer success section and the business development section, really, really helpful. And then our final hope for the book is that it's useful for people early in their career as well. If they're an aspiring marketing leader, an aspiring technology leader, that they may be an entry level software developer. But reading Sean's incredible section about being a technology leader hopefully inspires them and hopefully gives them kind of a framework to think about managing their career. Reading the marketing section, if you're a field marketing coordinator somewhere lets you know like, all right, if I want to be a CMO someday, I actually have to know something about demand gen, I have to know something about digital, I have to know something about brand, I have to knows something about marketing operations and planning. So hopefully there are lots of use cases for it. We're very excited about it and I think we're off to a good start with it.

Yeah, that's wonderful, Matt. And you know, when I was writing my book From Startup to Grownup, I was very inspired actually by two just with a thought that you said, which is like there's not a lot out there to help founders, to help founders grow, to sort of give the way stations for founders moving into CEOs. And I was actually very inspired by your work Startup CEO and also the blog and just knowing that this was a path that needed more explanation. And also you're always, you have very wise insights about, about that. So thank you for your work. Everyone should go out and read Startup CEO and also Startup cxo. And I guess just a few more questions for you. What do you wish you had known earlier on your journey?

The thing I wish someone had told me at the beginning is something I said a few minutes ago, which is that the highs and lows of being a founder and entrepreneur frequently show up in rapid succession or sometimes even at the same time. And just being kind of prepared for that so you're not in a state of emotional whiplash all the time would have been a nice thing to have in my head.

Yeah, that's great. And this may be the same answer, but I'm just curious, what advice do you have for other founders as they embark on their journey to grow into leaders?

I think there are really two things that I find myself talking to founders about quite a bit. One is take care of yourself. Not just self management, but take care of yourself physically. Get enough sleep, get enough exercise, maintain some hobbies. Outside of work, taking care of yourself is. Is really important. And the second thing is ask for help. Don't be shy about asking for help. There are a lot of people around you who know a lot more than you do about a lot of things that you're doing.

That's great. You know, Matt, I think self care is like the unsung hero. People, like, don't privilege it enough, they don't give it enough weight, and then they sort of run out of steam. So I think it's so important, as you say, and also surround yourself. Matt, this is fantastic. Is there anything else that you'd like?

You know, I would just say thank you and that's thank you to you for having me. Thank you to anyone that listened to this whole conversation and really thank you to anyone that I've worked closely with over the years at Return Path, at Bolster, at other jobs. My board, my team. Business is a team sport. Entrepreneurship is a team sport. And nothing I've. I've done or accomplished in business or written about could ever have been possible without a wonderful team of people working with me and alongside me and helping and advising me.

Amazing. Thanks, Matt, for that and thank you for being here today. And everybody should go check out startup CEO and startup CXO and also go on to bolster.com and explore around there for the things that it can find to you. So thanks again for being here today, Matt. Really enjoyed our conversation.

All right, thanks so.

Much.