#79, Shegun Otulana, Founder and CEO of Harmony Venture Labs—From Nigeria to unicorn founder; boo...

You learn eventually that to be great, you have to be vulnerable. Others see you in a way you don't see yourself, and it's by really learning how others see you that you grow.

Welcome back. This is From Startup to Grownup. My name is Alisa Cohn, and today I'm thrilled to welcome Shegan Atulana to the podcast. Shegan is an incredible founder who moved from Nigeria to Birmingham, Alabama, bootstrapped his company, and ultimately sold it to KKR for $1.25 billion. Today we talked about his incredible journey of building a profitable business from the start, how constraints are a blessing, and how being an immigrant was actually an advantage in building his startup. There are a bunch of incredible lessons and practical tips that all founders and leaders will benefit from. So please enjoy my great conversation with Shagan Atulana. Shagan, welcome to the show. I'm so excited to have you today.

Thanks, Alisa. It's good to be here.

Yeah. I'm super excited. I heard such a good— so your story at the Founders Conference and, you know, in a nutshell, you emigrated from Nigeria to Birmingham, Alabama at the age of 18. You wanted to bootstrap a company, Theranest. Do I have that right? Theranest?

Yeah, Theranest. And then eventually we created a holding company called Therapy Brands.

That's what I thought. Okay. Theranest called Therapy Brands. Which led to a $1.25 billion exit. Not a bad day's work. And I guess I wanna start by asking like, what impact did your being an immigrant have on your entrepreneurial and career journey?

Yeah, what impact did being an immigrant have on my journey? I think it clearly has an impact. The totality of our life clearly has an impact on our journey. I would say as an immigrant here, I would definitely say I have a deep appreciation of this country and the opportunity to do do big things in the United States. Could I have done big things in my home country? Yes, but I'm pretty sure it will be unbelievably harder for me to build a billion-dollar business within the time frame that I built it if I was still in Nigeria, just to be honest. That's why I really love July 4th. It's a fantastic holiday. Thank God for America. So I definitely have a huge, huge appreciation and love for, for this country. But the, the thing is it's actually also given me a deep appreciation for my own culture because I come from a culture in Nigeria. I'm Yoruba, and it's a culture that really values hard work. It values knowledge and education and the ability to express it. And I would also say when you leave your own country, you tend to realize the things that are great about it that you may not realize when you're there. And for me, a lot of that has been around the culture. This culture of you lift your head high, you belong wherever you find yourself. It's a key part of that culture. I think that has definitely helped me in my journey. Then I also had the ability to navigate multiple environments as an outsider, outsider, insider. I think being an immigrant definitely helps you navigate that. And then in some cases, you're kind of a blank slate too, right? When you're an outsider. Not always, but many times you're a blank slate. You get the opportunity of not being, uh, of being an unknown, if you get what I mean. And people don't come to you with whatever else they think. It's not always true, or they may come to you with other things they think, but you know, I think all those things are definitely impactful in my journey.

Yeah. Like, it's like a stew of different elements, it sounds like. And that outside-inside, that's very interesting. But I want to come back to what you said about the— is it— is it— did I understand correctly? You said, like, in Nigeria, you said, like, the culture is you hold your head high and you belong wherever you go. Yeah. Is that like a national characteristic?

It's a national characteristic of most Nigerians. It's pretty much bred in you as a child, like, Um, which is a challenge because it's like being a, uh, the stereotype of a New Yorker in a sense. So when you, when you, when you go to other parts of the continent and you're a Nigerian, sometimes it becomes a problem because you're loud, you immediately take charge. And it's a— I'm generalizing, but in most of the continent, it's more like not like that. People are more reserved and things like that. But Nigerians tend to be very confident. It's like built into them right from childhood. You know, there's literally a saying like, a Nigerian doesn't enter the room with their head down, type, you know, like, so I, I do think all those things kind of contribute to it.

Yeah, yeah, for sure.

Wow.

Well, you bootstrapped your company because you couldn't raise all that much money. And so tell us, why couldn't you raise money? What did you learn from the process of trying to raise money? And, and what was that process like?

We, we did raise some money, so it wasn't 100% bootstrapped, but obviously it took a lot of credit cards, all kinds of ways to make it work.

And just to clarify, you raised like $250,000, right?

Yes, yes.

Pretty good, but not enough to really make a—

No, I need 10, 10 months, over 10 months to raise that $250,000. So it was 10 months of not knowing what the future would look like. So why couldn't I raise money? I think part of it was I didn't know the places to go. Raising is a practice. It's like selling, you know, you need a pipeline, you work the pipeline. I probably didn't do a good job of working the pipeline. I limited myself to just around Birmingham because that's where I had connections, except Birmingham, and we're talking 2012, 2013 here. It's not like a place where you raise a ton of early-stage capital. Uh, so those things made it difficult. I was building a product in healthcare. I did not have any experience in healthcare, so there was probably some doubt there. It was the early days of SaaS. I was also building a product as a SaaS product into healthcare in, in a healthcare-heavy city. Birmingham is actually healthcare-heavy city, so they're used to how healthcare is sold, which is, you know, you hire a sales team, you go into these hospitals, and this kind, and That, that was not the approach we were taking. So I think all those things probably did not help. But, but it was probably a big part of what made it hard to raise money.

Yeah, I can imagine. And what's fascinating to me is that like kind of you made it a virtue because, because you could only raise just a small amount of capital and you'd use credit cards and whatnot, you had to really build your company profitably. And yet you didn't have that much experience. Really, you didn't have all that much experience as a, as a manager or as a, an operator. And I heard a podcast where you said you were actually a poor— you were a bad consultant, that your wife called you a bad consultant. So how did you kind of pull yourself together to realize, okay, I got to manage this business profitably? And then how specifically did you go about it?

Yeah, I think constraints are a blessing when you look at them as a blessing. And the constraints also remind you that nobody owes you anything. No matter what you think, nobody owes you anything. You figure out your own way. All right. So in terms of— I think your question was, even though I didn't have much experience as an operator and I was a terrible consultant, which is true, and the reason why my wife used to call me a terrible consultant— so my wife is a trained CPA. She's a public accountant by training. So she's worked in public accounting firms and you bill by the hour. It's all about utilization rate and all that stuff. Except I'm that guy who somebody comes in and it's a $25,000 project and then there's scope creep and now I've spent $50,000 worth of effort, but I have not billed them for the $50,000 worth of effort. And that's what she meant by you're a terrible consultant. Because I would just keep doing the work and I would not— and I'm not confrontational by nature. I think I would have probably been a very successful consultant if I knew how to build the business and I could put a gap between myself and those projects. It would probably have been a better outcome. But the other thing was my goal was not to be a consultant. My goal was to build a product. For a particular industry that I kind of poured myself into. So for me, the consulting phase of my entrepreneurial journey was also this learning phase where I was using it to say, who am I going to serve? What kind of product do I want to build? And that was kind of my end goal also. And maybe that held me back a little bit, but that also meant what kind of persona did I pick to learn from? Talking about how did I learn to be an operator, you know, I, I, I've been a learner my whole life. Um, at the age of around 15, 16, I got introduced to the power of knowledge to change lives, and I've just been consuming a lot of books since that age. Uh, so I would say a lot of my learning actually came from books and people that I watched. Maybe not copy every aspect of their life, but I watched, I focused on the success of those people and how they got there. You have to put your ego aside because it's about winning. It's not about you being right or being the smartest person in the room. You learn that life is really guided by systems and frameworks, and it's really learning those systems and executing on them and learning frameworks and executing on them that actually helps you be good. So I would say that's where a lot of the learning came from. Did I make a lot of mistakes? Trust me, I still make a lot of mistakes. Maybe I don't make some of the earliest ones anymore, but yes. And your nature is your nature also. So you also want to find something that matches your nature as a person, as you learn to determine how you lead people.

Yeah. Yeah. So it sounds like— I mean, I think that what you're saying is also that you started your business and I will talk in a little bit because I know that you had like a very clear sort of set of, of, uh, principles that you wanted to use in starting your business. But you started as a consultant and you weren't charging extra for scope creep. So like that's the first rule of consulting. So financially it wasn't necessarily the right, the right situation, but obviously you were learning a lot as you were doing the consulting and also kind of step stepping your way into the business as a whole. But I guess what I'm curious, when you talk about early mistakes, could you share some of the early mistakes that you were making just as you were starting the business that was gonna ultimately be the right business and, and kind of what you learned from them just so people can really put themselves in the shoes of like an early, a very successful entrepreneur before he was successful?

Yeah, so it's a lot of the classic ones. Um, maybe focusing too much on building for one particular customer versus for the market. There was some of that that we did and we have to correct. Um, that was one mistake. Uh, one mistake was maybe copying competitors too closely. Sometimes you're looking at what other people are doing. Thankfully, those were things we learned quickly and we kind of pulled back because it became pretty clear to me that the way we would win was to be unique and different versus just like a me-too type thing. So that would be some. I think at some point your mentality has to change as a leader from being very small-minded to really starting to think big. Those, those would be some of the mistakes. Later on, even as the business got successful, some of the mistakes would be maybe some decisions that you made out of fear of loss versus opportunity to win. Those would be some other mistakes. And then, and we can come back to some of these too. And then not really fully appreciating the power of incentives and how they drive people's behavior. That's also it. You learn eventually that to be great, you have to be vulnerable. Others see you in a way you don't see yourself. And it's by really learning how others see you that you grow, um, and be vulnerable and grow from that vulnerability. And then you do the same for them. You build a trust environment. Yeah, I would say another early mistake was maybe not really memorializing culture to the extent that you should in the early days, uh, because later on that actually became a bit of a challenge to try to fix as the company go really big.

So yeah, those are great. We definitely want to double-click on most or maybe all of that. It's funny you talk about culture because, well, I would just say that all those things you just said, as a coach, I see this like over and over and over again. So it's like so helpful to see this mirrored back from you. But when you say you have to be vulnerable and how people see you in a different way and you have to build trust, that's like so important. And also it's obviously really touched something in you. Like, tell what happened that made you think like, oh, and you sort of look back on it and think, oh, I really have to be vulnerable here. I had to be vulnerable there.

I wouldn't say one particular thing happened. You know, a lot of my resources for learning how to be a leader and a manager came from reading biographies and reading books like High Output Management, you know, the classic, a lot of Patrick Lencioni's books. And you just see that it's the recurring theme in the book, right? The— if you want to boil some of those principles down is know yourself. But in knowing yourself, it's pretty critical for you to see how other people see you also. Because that actually helps you know yourself better because we lie to ourselves a lot. Let's be honest. So true. Yeah, we like that.

That's so true.

And having people you trust, but also letting people know that you will not use their vulnerability against them and that they should not use your vulnerability against you really helps you grow as a leader. Yeah.

Yeah. Is that like about maybe they give you feedback?

Feedback, key part of it. You know, feedback is a key part of it, like constant feedback. And even for me, it took a while for me to really appreciate even the role of like personality profiles in bringing people on board, hiring people, getting to know people. I don't know why, but eventually I realized human nature is human nature. And the more you know the nature of somebody, the better you can interface with them. It's almost like an API. It's an app— like, it's, it's like an application programming interface. That's how you talk to this person. That's how the conversations go back and forth. And the better you can understand that, the, the better results you can get. Yeah.

And the better you understand yourself and you understand your own API, right? Then you can let people know, right?

100%. Yeah.

What, what feedback did you get from either the people around you, like people around you, let's say executives or employees that kind of clued you into one element of your API that was like surprising?

One is, Shagun, we know you love us, but you don't give a lot of praise. Like you don't acknowledge good work enough. Like that, that was one. Unfortunately, I still hear it sometimes, but now it's people that know that I appreciate them because, but sometimes like, ah, they're like, hey, you've gone too far without acknowledging this work that this person has done. They've done 1, 2, 3, 4 things. I think it's time for us to celebrate it, you know? So because nature is such a hard thing to change. So, so, so that's one. Another one will be you do not celebrate wins enough, Shagun. Like, can you settle down and let's celebrate this win and acknowledge it and move on to the next one? And I think part of that is because I'm just a private person generally. I'm learning to be more out there and be more open to the world, and I don't need it. So because I don't need it, I tend to not give it. But the way I interface with the world is not the way everybody interfaces with the world, right? But I don't really need anybody to tell me how great a job I'm doing. Now, when I hear it, I feel great. I feel good. I love it. But, but, and that's what I need to remind myself, that way that I feel when I hear it and when somebody tells me that, whether it's my spouse or my team or other people, that's how other people feel too. And I, I should give that to them, you know? So, so those would be some of the, some of the feedback.

Yeah, that's so helpful. I think for all of us, you know, one tool that I use with my clients is the personal operating manual, which is about like talking about, like to your point, the API, like what's my API, what's your API, and then how can we, kind of meld these together because one of the most important insights from those or from the personality assessments that you said, which some people think are horoscopes, but whatever, you know, I think they're helpful because they give you language, but they give you a—

I remember one was "Osaiba." I know, that's right.

But they give you a context to really, I think, just sort of notice like, oh, people are different. People have a different, you know, and they need different things from you and you need different things from them. And that's the way to marry them together, I think.

Maybe I should— so I adopted this from a good friend, Yvonne. Yvonne has worked in Amazon, at Philpott, and all kinds of great places, at Bain. She's— I respect her a lot, Yvonne Howell. And, you know, one of the things I kind of adopted from her was this how I work thing that I write.

Yeah, sure.

Maybe I should start calling it my API. Yeah, yeah, I think it's been helpful.

Yeah, the how I work thing is, I think, so helpful for so many leaders. It's great. Now, you talked about incentives. So can we double-click on that? Like when you said, you know, people ultimately do, or incentives matter so much in what people are gonna do. So there's one element, which is nature. I'm gonna do what I'm gonna do because I am who I am. And then the other element of that, the external piece is the incentives. Talk about what you learned from that and maybe tell a specific story that kind of brought some insider incentives to you?

So I think I'm going to do what I'm going to do because that's who I am is what you are generally looking for as a default of who you want to hire. But you need a reinforcement mechanism because sometimes things get really hard. There are decisions to be made. And because we're humans, we may not know that, but we're making the decisions that maybe would it be a win for us, but it may not be a win for the other side. People don't always do that consciously. Sometimes it just happens. Your brain has a way to convince you, and that's where incentives come to play. So yes, you want the person who's going to do the thing because it is who they are. But when you are doing difficult things, you will come to decision points. You will come to decisions around opportunity cost. Uh, you will come to a fork in the road that you have to take. And incentives actually help guide that. Incentives also help let you know what's a big thing, what's a small thing. Like, this thing is not even worth my time based on the outcome I'm trying to get. And I think those are the places where it becomes very, very powerful. We see it all the time with sales teams and salespeople. So for example, for us at the beginning, in many of the companies I deal with, We tend to not be aggressive around sales targets at the beginning, and we design an incentive that's about really letting you do the work. Sorry.

It's okay.

Letting you do the work versus focusing you so much on the outcome, right? And when you're really good at doing the work and you've won and won and won, then we can kind of get you back to the outcome. I've also seen situations where people are doing the work, they're getting the outcome, they get to a difficult place and you have to reset it for them. In a sense, they get to a difficult place where things have gotten hard. Let, let's take one of our sales teams, for example. The market they were in got into a situation where the way their quota was designed, it was just gonna be hard for them to keep selling and thinking it was worth it. So we just reset it for them. So that it's worth it, so that they don't worry about— and some people say, well, that's being soft. No, that's being cognizant of human nature. Because at the end of the day, you want to win. It's about winning, not about being right. Right. So you design things that the other side sees as a win-win versus, hey, you know what, whatever. You don't want people to get to that point. So, so those would be some of the things I, I would ask people to really think about.

Is there, is it, can you give examples about incentives that are, 'cause with salespeople, of course that's true. So first of all, they have an internal drive, of course. Also, let's be honest, they wanna make money. That's why they're in sales. I mean, that's just a normal part of being a salesperson. You want salespeople who wanna make money. And then the incentives are so focused on the activity you want them to drive and the outcomes you want to, to, to do. So those are obvious, right? In some, in some ways for salespeople. Is there another idea, and you may not have one, but like another thought that you have around employees or executives and how you need to think about their incentive structure to then help drive the behavior and outcomes you wanna see?

So a good, let's say we, it's not sales. Let's say we go to the growth teams or growth marketing teams. When you structure the, outcome at the beginning, and it's really around the outcome. People may make crazy decisions that don't let them learn. So you kind of have to ask yourself, is this a learning stage, learning and iteration, and you want them comfortable with failure? Or is this a stage where they figured out what works and just want them to double down on what works? And you kind of have to design the work and the reward system around what do you want here. Do you want a team that's in that early learning phase? You, you can see this a lot in corporate environments where there is no incentive to be highly innovative, even though they want to be highly innovative, because innovation means risk and failure. But their incentive plan is tied to things that you're sure of. So what do they do? They'll go to the thing that they're sure of. They have these numbers they have to make and it's predicted and it has to happen. But then innovation is around learning through iteration. If you want your team to be innovative, you kind of have to reward them for learning through failure. You can't tell them to learn through failure, but reward them for outcomes that are unplanned. So when you're starting a company or a company's at a certain size, and we see this all the time, and you can, you have it. Let me give you a perfect example. You are trying to build something in a company where you do not know what the actual numbers would look like 12 months from now. You do not know enough to predict the financial outcome, say 6, 12 months from now, because it's new, it's innovative. But then you tie somebody's reward to the financial outcome as though it's predictable. You're going to have problems because what you want to really incentivize at that stage is, is this person going to go through the quick iterations that they need to go through to actually learn So that what they get rewarded for is not these financial numbers that you're pretending you know, because you're just guessing. And it's more about certain milestones along the way that you want people to get to. And that's what they actually get rewarded for. And then as there becomes clarity, you can tie the rewards to things that you're sure of. So that'll be another example in, in inside of say companies that you're trying to innovate around.

That's a great example. And what I appreciate about that is it really requires fine-tuning. You know, like, I was just listening to a podcast with Jeff Bezos who talked about, you know, not getting confused about the proxy. So we're looking for a metric as a proxy, right? We're looking for, let's say, customer satisfaction as a metric for how satisfied the customers are, how much, you know, how our customers appreciate us. But then it turns out that that's just a proxy. And so you get— and then what you do is you kind of have— you get religious about that proxy over and over again. And so to your point, it's like whatever is— whatever the stage of this situation is of this part of the company or that part of the company and this person's learning curve, you have to really adapt and be sort of fine-tuned in with that person and kind of what their experience is going to be.

Exactly. The stage and context matters.

Right.

Yeah.

Yeah. So another element that drives people to do what you want them to do and something you talked about is culture. And what you just said was you maybe should have memorialized culture earlier. So like, that's interesting. What maybe first of all, talk about what is important to you in terms of culture? What was important to you? Did that change as you were building your company in terms of the cultural attributes? And then What trouble did you get into for not memorializing it?

So our core culture in the early days were really around learning. We wanted knowledge density because we didn't know what we were doing, really. So we wanted knowledge density in the organization and we rewarded people for learning. You actually got rewarded for learning and sharing what you learned. We wanted people to be disciplined and constrained themselves around expenses. And we would say we were a VC— we had the VC's growth mindset, but the private equity guy's discipline. That's how we talked about it in the team, you know.

That's great.

So that was kind of the culture. Humility was important to us, so we didn't really want people that just were driven by ego Ego is not all bad, but it is the enemy many times. And we just wanted humble doers. Speed was important to us. If something is pretty clear and simple, just move fast. And if it's not that clear and predictable, then be more deliberative, right? That was the culture. We had a culture where we pushed things closest to the person dealing with the customer. And that was just how we operated. Unless it got to a certain threshold, you knew you had the authority to just deal with it, especially if it was easily reversible. Like, we just didn't have a lot of these tiny little conversations. So there were many things like that. And what happened was, as we grew and brought in other, you know, senior executives, And those things were not like memorialized through rituals, through recognitions and things like that. You know, you get a, see, you get an executive that's coming from a culture where he has to call the shot on everything. And now he has this person that's like, that's a $500 conversation. And I will make the good call for the customer and the business and I'll find the win-win. I don't need to talk to you about it. And it's like, what do you mean you don't need, you know, things like that started happening.

Yeah. Wow.

So, so it's things like, like that. Overcommunication became a thing because again, you have to sit in these meetings and talk and talk, and that senior executive has to be in there and blah, blah, blah. And some of the people are like, I can make a call on this, and if it's a bad call, I will come to you and tell you I made a bad call. I'm reversing it. Why don't you just let me move fast? You know, Overcommunication became a thing, too many meetings became a thing. You know, it's things like that because we didn't say this is it and reinforce it and reinforce it over and over and over. You know, we had a culture that really recognized how difficult the workplace can be for women, especially when they have young children. And we tried to work around that. And, you know, not every executive was used to that when they came into the company, you know. It never slowed our growth down, you know, because people appreciated it. You know, it's things like that. We were one of these unlimited vacation type places and nobody ever abused it. But then some people come in and they're like, oh, I can just— and like, no, no, within the context of the team, the team has to win. You know, it's things like that that you started to sin, and then you have to go back and be like, this has to be ritualized and memorialized and celebrated when it's done right, and not celebrated when it's done wrong. You know, it was, it was things like that. But I think if we really just ingrained it in new people as they came in— and sometimes those people came in through acquisitions, so it was a whole group of people who would come in, which makes it even harder, right? Yeah, because now you acquired a new team, and you really want that whole team to be like This is what you're walking into, and you have to be very, very deliberate about it. And those were some of the places where we were dropping the ball, and then we had to figure out ways to kind of solve that.

Was there like a moment where you realized, oh my God, we really messed up?

When I started getting too many complaints from, from people.

From people. So then what did you do? Like, what specific actions did you take?

Started having those conversations, uh, saying, hey, this is something that, you know, this is not how we work. And, you know, for some people it's like, I don't think you're doing it right. And we're like, why don't you give it a shot, you know? And you would see that people will actually respond properly. And those who don't respond properly, take them out of the team, get rid of them, you know? So it becomes a hard work of kind of, you know, going through that. And some people don't speak up and those people just get very, very frustrated and sometimes they leave and you lose some good people. Unfortunately, you know.

Yeah, for sure. So did you— how— I guess I would just ask, like, what were some of the rituals that you created or some of the ways that you would then speak about it that kind of worked your way out of that?

You talk about it a lot. That's one. You find a reward system for when people behave right. You have events around those things. You know, it's almost like a country. How does a country form its culture or a society form its culture? You have July 4th, that's when we celebrate, right? And we do barbecue on July 4th, and we go watch fireworks on July 4th. And, and those are the things you do. And we sing the national anthem. And in America, we celebrate the troops, you know, things— it lets people know what we value a lot. It lets people know, hey, in the US, we do not allow you to say negative things about people who have willingly laid their life down on the line to protect the community. But it's by saying and doing those things that you kind of— and you mark those things, right?

Yeah.

At specific dates and times. So introducing some kind of a reward system became part of that.

That's great. So like, what was your barbecue? What was your fireworks?

So some of this has changed with different companies, but, you know, and then it also depended on each individual team. Back then, but some, some of it would be things like, maybe a manager has a dollar value that they can use to celebrate somebody who has shown a particular cultural trait that we all want to celebrate. And it's recognized maybe at the monthly all hands, you know, things like that. So that, that would be one. Another one was actually around how we would celebrate when somebody actually has a child. We made it clear that you were still part of the team even though you're about to go off on this maternity leave versus, oh, it's just an inconvenience to everybody, you know. And the whole team would kind of celebrate that versus just worry about, oh, now who's going to do all the work? Which sometimes is the whole conversation sometimes in companies, right? So how you talk about it is, is important. I can't remember all the details, but those would be some of them in those days.

That's great. And I, Shagun, I also think like it's so important for— and I'd love to hear what you think about this— like it's you, the leader, that has to take the initiative to institute these things.

Yeah.

You encourage and reward those.

Exactly. You set the pace, you set the tone as the leader. And even many times, even if you don't have particular events, but you talk about it a lot, at least that's what I've noticed in some of the other endeavors I've been part of. And you just talk about it a lot. Hearing becomes the doing. By hearing and hearing, then people go do. So that's also part of it.

Yeah.

Because sometimes even the doing can start feeling gimmicky sometimes, like the, the things that you do. But when you talk about it and your actions follow what you talk about, it actually has pretty significant impact also.

I love that. I love that. But at the same time, and I wanna get into now remote work because you were into remote work before remote work was even a thing. This is well before the pandemic, well before everybody was doing remote work. So how did you sort of, first of all, why did you make the decision to do a remote workplace? And then how did you, reinforce this culture when not everybody was in the same place?

It makes it harder. I think culture is harder in remote settings, to be honest with you. I've actually gotten lazier and I would really prefer that everybody just be in the building with me. Because leading remote teams is actually harder. It's much harder. If culture is important to you, it's much harder. But for us, we started from a place where we had no option. Because I didn't have a, I didn't raise a lot of money and I needed great talent. So I had to find the best talent I could find wherever I found them to the extent that I could afford them, which meant I had to look broadly across the board. So that, that was one of the, one of the reasons. I think the 37signals guys and all those guys also had an influence on all that. It's kind of funny because those were the Joel Spolsky and the 37signals days and the Joel Spolsky guys 4 Creek guys were in the office and they all celebrated together and everything, and I loved that, but I couldn't afford that. And then there's the 37signals guys and we're all kind of distributed everywhere and got stuff done. And I was like, well, I have to think about talent globally and started learning from some of the other guys that were in our little tribe of startups together that were having to do the same thing, and we kind of made it work.

Yeah. So what, like, what advice do you have for founders right now who are dealing with a remote workforce and it's remote?

You need to find a way to bring people together from time to time.

Like how? What advice?

Whether it's a biannual or twice a year summit where everybody comes in, it's a huge part of it. Whether it's the option to have certain people come in even more frequently to HQ, whatever you want to call it. I think seeing people in person is really important. So those were some of the things we did. I think you have to have somebody on the team that owns that remote culture and loves to do the things that get everybody on Zoom and gets everybody to laugh. And plays the game that everybody comes to play online. There has to be somebody who wants that. I'm not good at that, but I'm always looking for somebody who can do that and be the force behind that on the team and is the one always bringing everybody together to do stuff, you know. So you have to ask people in a lot when you're running a remote because they can't just walk by your office. You can't just randomly talk about last week's game. You know, serendipity has less chance to do its thing. So you have to have that person that's always the one trying to bring people into the room, in a sense. And that's a big part of it. So you have to do that, and then you have to find a way to bring people together from time to time.

Yeah, those are— that's really great advice. And then how about like teaching? How did you think about training your managers or training your people also to manage remotely, give feedback remotely, even like always know what's going on? Because it's so hard. That was even before the days of Zoom.

I'm gonna be honest with you, Alisa. I don't even have a great answer for that other than to just reinforce that, hey, these people don't see you. They don't really know you. As quickly as somebody would get to know you when they're sitting with you in person. And even I dropped the ball on that because again, it's my nature to just kind of live in my tiny little world. And I have to be reminded that there are people out there that are thinking, what is he thinking?

Yeah, totally.

They can't make deductions from daily interaction. So That's a thing that you just have to have in your mind and you have to tell the managers. But the beauty of it is when you have that person that's kind of the cultural captain, in a sense, they tend to make it happen more frequently. They tend to bring people together and that's always very helpful.

Yeah, that's part of self-awareness too. It's so interesting what you're saying. You're like, you know what, that's not really me. So then your being aware of that then helps you figure out who in my ecosystem, who around here is gonna be that cultural steward. And then you kind of realize like that is an important element because that's not what I bring to the table.

Yeah, exactly.

Yeah, that's great. So Shagun, if you think about, you know, we talked a lot about nature, we talked about like incentives, and then you kind of your own self-awareness as a leader. I'm just so curious, what are some of the specific ways that you grew as a leader during this period?

So I think one way that, that I've definitely grown is communication style. I'm a one-on-one communicator. Like, my thing is me and you sitting together talking, me and you on Zoom. It's hard for it to scale when you start having hundreds and hundreds of people. You have to find a way to communicate broadly to everybody. And that was one area I had to grow in and just practice and practice. I still think I have a lot of, a long way to go there, but that, that's one. Uh, I, I want to believe I've never really had a big problem with having a huge ego. I have, everybody has an ego, but I don't care about people like, um, like people's opinion of me is important, but that opinion doesn't have to be that they think I'm the best thing since sliced bread. So, um, so I think that's helped me open up to people and it lets them maybe trust me a little bit more even when I'm not communicating as effectively as I should. So that's probably helped me a little bit, but communication is how you build trust, right? So that's, that's one area I've had to grow in. I know for a fact that I am a worse communicator in Slack than in person. So over time I had to learn. Sometimes I fall back into this because I'm also like running at a million miles an hour and I just jump in something, I say something, but I try to hold myself back from time to time and say, no, no, don't, don't, don't do the Slack communication for this year. Do the in-person communication or do the Google Docs communication because then you got to kind of write it out versus the quick things in Slack. If you want to do this by writing, can you actually write it out? You know? So those are some of the, so those are some of the ways I've had to grow myself as a leader. And then just that realization at a certain point that my job at the end of the day is to be there for what my people need me to be for them to be successful. Not always just what I want to do or what I need, but what they actually need for them to be successful. And that my interaction with them is a time for me to be a great coach to them, a great support system to them, and a time of discovery, you know, and those are some of the ways and areas where I've had to learn because, you know, all of us start as individual contributors and it takes a little bit of effort to shift from individual contributor to an enabler, which is really what we are at the end of the day.

Yeah, totally. Especially, you know, how old were you when you founded your company?

So I've been an entrepreneur for a long time, but there, and I started— that was— I got to do the math. So I'm 45 now and I founded it 2013. What's the month?

Gosh, I don't know. But you were in your 30s.

Yeah, 30s.

Yeah. The point is that you didn't have 20 years in so-called corporate America to learn these leadership skills. And that's what I think is such an important, you know, element people, people don't understand about being a founder is that like when you're a founder, when you're starting your own company, the entry-level position is leader. And if you haven't learned— you— most of— most founders haven't really learned those leadership skills in a formal way. So there's a lot of trial and error to learn them.

Yes, I actually encourage people sometimes— it's not necessarily true for everybody, context matters— but take advantage when you find yourself in corporate situations because there's a lot of theory of leadership and management that has actually worked through those companies that you can actually learn from and then adapt. Staff in the company.

Yeah, totally. So you sold your company to KKR, right?

Yes.

And we want to hear a little detail about that, but then we want to hear— so let's hear a little detail about that, and then we want to hear what you're doing now, because I'm so fascinated by what you're doing now. But like, I think everybody wants to know, you know, it's like, what's it like to have the exit? And not only that, but the mythical, the unicorn exit. And also, by the way, it wasn't like you had a ton of VCs on your cap table taking all the money, right? So like, was it a triumph for you? Was it a little depressing? Like, oh, now what am I going to do? Like, walk us through that time period where you were selling and then ultimately you sold your company.

So we sold to KKR for $1.25 billion. But the KKR exit, honestly, for me was the final end of the journey with the company. I had actually sold some of my equity twice for them.

Oh, okay.

Yeah, it was in really like, I don't know a different way to do to say this, but I was already like set by the time that happened. So it was great from a financial standpoint, clearly that it was within the same company. It was my third exit. In a sense, if you count selling Equity. Now it was a bigger exit than the first two, but it wasn't like— that first one was life-changing, so second one was just an addition, and the third one was an even bigger addition, except that it was also an end, the end of a chapter. So was there some sadness there? Yes, I think there was some sadness there. But the sadness wasn't really about the sale, really. And maybe this is a time to be a little bit vulnerable also. There was a little bit of the company not having the level of impact I actually wanted it to have also. And I knew I would probably never be able to let the company have that kind of impact anymore because I was moving on. There was a little bit of certain things being done the way I probably would not want it to be done also happening, some also. So there was some of that, but I was also very grateful for the partners that had come along the way. They were private equity guys, they were great. I still have a relationship with them. We didn't always agree on everything, but we were decent to each other. And some of them I'm closer to than others. Maybe there's, there's one that I don't have any real relationship with at all, but the others I kind of do. So for me, that exit was more of, honestly, the biggest thing that that exit gave me was this feeling that all these people that I brought along on this journey, I've taken them to a final conclusion for my part of the journey. That's a good conclusion because by then my life was— if you're thinking about just financially, I was great, right?

Yeah.

Some of them were, but maybe not as great as I was as the founder, you know. But now I could be like, okay, I didn't mess this up along the way. I didn't screw this up for everybody. I wasn't the only one that kind of got something good out of this. And my investors all had a fantastic exit. So there was this relief that the people I took their money, the people that bought some of my equity as private equity guys, all got fantastic outcomes at the end of the day. As in, the private equity guys Some of them, you know, it was over 9 times what they put in. Wow. Exactly. So, so that made me feel great because, you know, when I, when I take something from you, I want to make a promise. It's not really a promise, but you get what I mean. I want to meet the promise that I made to you. And that was, that was That was more of the feeling I had, more than the— because I'd already gotten the financial high from, from— if you get what I mean.

Right, totally, totally. I mean, it's, it's also funny when, like, once your life has been changed by life-changing money, then your life can actually be changed again. Like, that was kind of the moment already. And so now it— right, so then it just be—

first time, yeah, the first time when you refresh your bank account and you see that many zeros, you're like, oh my goodness.

Nashif. Yes.

So there is that. And you still get that the second and the third time, but clearly it's not like the first time, you know?

Right, right.

And then along the way, there have been other zeros from other things, you know, things. So you're just in a different place in life. Yeah.

Yeah. I really have to ask you, like, When you were growing up in Nigeria, and if I'm not mistaken, your parents were entrepreneurs, but they did not get a college education, right? Is that right? Your parents?

So I'm a child of two people that came from absolutely nothing. Yeah. And my mother got what's the equivalent of maybe middle school education, and my dad, high school education.

Yeah.

But they became small business owners and just kept hustling their way and they were able to give their children a better life than they started with.

Yeah, I mean, I'm sensing they did well and that you had a, let's say, reasonable upbringing, but not what you have now, right? It must be a big change.

Yeah. So I had, by Nigerian standards, I think my life when I came into consciousness was a middle-class life. Yeah. And I would say by the time I left Nigeria, it was an upper middle class, slightly wealthy life.

Got it.

Not very wealthy, but very comfortable. Not get a new car for your children wealthy, but you can get an old used car for your child. Like, do you get what I'm saying? Yeah. So that was kind of where things were when I left. When it became harder was when we moved to the US. And a lot of the kids moved to the US and, you know, tuition as an international student was going up, up, up, up. And the currency was falling against the dollar. And, you know, it became hard for my parents to kind of— and that was when, you know, you had to go get jobs. And I can't count how many pizzas I delivered. Yes. And you just do what you have to do and put some of your tuition on credit cards and everything else. So yes, it became that. Later on, a few years after I come into the US. But growing up, I was generally comfortable. Not like, yeah, crazy wealthy, but generally great school, good upbringing.

Yeah, but your kids are going to grow— are growing up wealthy, right?

Yes, and that's a challenge, you know.

Yeah, how have you thought about that challenge?

So we've tried to be simple people. We live in simple community where our kids experience everything from middle-class families around us to lower and upper middle-class families and wealthy friends and everything else. The thing we've tried to do— and look, my kids are still young, so we'll see if we actually get this right— is to not focus them on things and to focus them on being just great people and to focus them on hard work in the way you can teach them. So that may express itself in, this is your schoolwork, you have to give it your best, you know, uh, on— and focus them on being stewards. Like, when you have something, your job is to steward that thing, not just to consume. That's the kind of lesson we've tried to kind of impart to them. We've chosen to live a life that's very comfortable but not crazy flashy. Um, and we talk to them about what wealth means, at least the older ones, and that wealth is not just about money. There are different kinds of wealth. There's intellectual wealth, there's spiritual wealth, there's material wealth, there's relationship wealth, and a balanced life is all those things in balance, you know. So that, that's kind of the lesson we've tried to impart to our kids. But do we still worry that the level of wealth they have and As they get older and kind of get an idea, like my oldest did not even know the level of my exit until one day she came home and she told me, Daddy, you sold the company for what? And I was like, how did you know about that? That's when I realized, oh, I have to start, you know, being more proactive about this. Because as it turns out, a friend's parent had said something, and that friend came back and said something to my daughter, and then they, you know, started talking about it. And then she came home and like, hey, tell me more here, what's going on? And then this was a few years ago, and I realized, okay, we have to be more deliberate in our lesson. So we— and my wife gets a lot of credit for this, you know, we do family meetings even though they're still young. The two youngest don't fully pay attention, but we're trying to build that culture around these are the things that are important and things like that. So, but I think I— some people really try to hide it. I, I, that doesn't make sense to me. I think what you want is to help them navigate it. Because am I trying to teach my child to navigate poverty? No. So if I'm blessed, then I should try to teach them to navigate wealth, not the opposite, right? There is no, I don't get why there is virtue in not teaching them how to actually be a steward, right? And letting them know that, look, one of the things you get is the ability to impact other people's lives, and it takes some training. And that becomes part of my responsibility as a parent to help train them to be able to do that. And my hope is I can do it with wisdom and do it well while I still grow.

And one thing that you're doing is, first of all, you're staying in Birmingham. You could move anywhere in the world, but there you are in Birmingham, and you're, you're building an accelerator to help other starters. But I think also you're really trying to— I kind of want to say give back, but I also might just want to say grow and, and build. The ecosystem, the entrepreneurial ecosystem in Birmingham. So tell us about both. Those are two separate things, but they're related. Tell us about both of those things.

Yeah. So, you know, I, I believe that you have a responsibility to the place you find yourself because all those places shape you. They contribute something to your life. Also, I built my company here. I met my wife in college here and everything else. So as long as I'm here, I don't know if I'll always be here, but as long as I'm here, I do have a responsibility to make it a better place. And I can do that in collaboration with what I love doing. I love seeing people get economically empowered. Um, I think it's a huge factor in a lot of the problems we have in the world that may be influenced by the level of poverty I saw in Nigeria and what parents that can give me a good education and everything has meant to me. But we strongly, my wife and I strongly believe in education, learning, economic empowerment, uh, entrepreneurship as a force for good. And I'm shaping the life I want to live. That's a combination of those things, right? So the life I live now is a life that I want to wake up every day living, which is being an entrepreneur, helping other entrepreneurs be successful, impacting my community. So for us, it's shown up as, you know, scholarships. It's shown up as working on blighted neighborhoods in our communities to try to turn people to first-time homeowners and removing blight in those communities. It's shown up as HVL, which is a venture studio that I believe will help us create more wealth, but help other people also create wealth and our hope is it can be a catalyst for the ecosystem and to help the ecosystem build more entrepreneurs, um, that can then grow and impact other people's lives and change their own generations for their own children. I, I think it's pretty clear that a wealthier world has all kinds of problems, but it's also a better world.

Yeah.

A wealthier world is a healthier world. Um, yes, we hear about all the drama going on in the world, but it's also probably the most peaceful time the world has ever had in aggregate, right? If you think about the, the whole world in aggregate, the number of wars going on, the number of killings is probably the least because part of what drives people crazy towards each other is scarcity. It's wanting to take something else that somebody else has because you so desperately need it. You know, and as you build everybody up, there's less of that. As people understand and learn, we, we suppress a little bit of our barbaric nature as human beings. We don't change our nature as humans, uh, but we learn to control it and steer it for the betterment of everybody else because we understand better how the world works. We understand that the pie can be grown. It's not finite, you know. So that's a lot of where we put our energy in Birmingham. Our hope is it's not just limited to Birmingham. Obviously my influence now spreads beyond Birmingham, and the things we're involved in spreads way beyond Birmingham. But we also feel a sense of responsibility and obligation to Birmingham, because Birmingham's actually been a good place. I know people don't want us to leave the '60s, and it's like they want to anchor us to the '60s permanently, and we're trying to move past it. It's kind of a funny thing, you know. Yeah, everybody comes to Birmingham with the baggage of the '60s in their mind. Yeah, and they talk about it and then they accuse us of talking about it, but they're the ones that always talk about it, you know. So we now have to respond to it, you know. So it's always kind of funny to see. We are not ashamed to talk about it, but we also want to talk about how much Birmingham and Many other parts of Alabama have kind of moved forward. And I've been all over this country, Alisa Cohn. It's fundamentally generally the same. Bad things happen everywhere. There are good and bad people everywhere. And we're all just on this journey together trying to create a better world. Are there bad people that are not interested in that and they just want to go to a world of wickedness? Yes. They are becoming lesser and lesser powerful. And I think part of why they're becoming less powerful is because people actually get more economic empowerment and more education and they can determine their own destiny. And the more of that we can do locally and globally, the better the world becomes.

Yes. I, I love the way you sort of think about it as a cycle, which is, is so, I think, significant. I just wanna double-click, like, Specifically, I just wanna make sure everybody understands specifically what like your business is right now, what the accelerator is doing and how it's kind of trying to build at least inside of Birmingham, like an ecosystem in Birmingham. So your accelerator is called, is it HRV? Is that what it is? Harmony?

Harmony Venture Labs. I'm always, yeah.

I'm always like, yeah, I was gonna say, you said HRV. It's not a heart rate monitor.

HBL. We just call it HBL, Harmony Venture Labs.

Oh, HBL.

My time was coming to an end in the company. I was thinking, what's next? What I love doing is creating things, building companies, being an entrepreneur. And I wanted to combine that with doing something that also affects my ecosystem. And the venture studio model was becoming a thing. So we're really more of a venture studio and less of an accelerator. And the big difference is accelerators kind of give you as a founder money and then you kind of— they coach you, but it's your thing a little bit. Studios try to also create things and create the companies and fund the companies. So a studio is almost like a VC plus a— you can almost think of a studio as a YC plus a builder attached to a YC in a sense. So you fund the company, you advise them, but sometimes you actually build the company. Right. Uh, so, so that's what a studio is. And I thought that would be a great thing for this kind of community where there is not a lot of density of founders. The early stage ideation process is too weak in a sense. Uh, the capital is still not that large. So within a studio, you can have a concentrated effort at looking at ideas. I think it's a harder way to do venture capital. Uh, for me, I think venture studios are still some form of venture capital. It's just a harder way of doing venture capital. Yeah, but I do think it can have significant impact in communities like this because there are multiple ways it can. Number one, you can build venture-scale businesses, but depending on how you fund the businesses and the structure of the business, you can also build startups that are not venture-scale but are still very impactful, where even at lower levels of exits or lower levels of revenue, their impact within the community is still pretty significant. And then you can also have this machine that creates future entrepreneurs happening within the studio. So that's why I liked this vehicle and I got drawn to it. And we have a place here in Birmingham, it's the Venture Yard. We pretty much have a building, it's about 20,000 square foot, uh, and we try to create companies out of there. We work with other organizations and other entrepreneurs there trying to build different types of companies. We fail at some, Some of them are doing very well, some of them are doing okay, some of them are totally failing, you know, just like, just like the whole venture. Exactly. Yeah. So, so that's the, that's the thing, except in this case, all of it we're actively involved in.

Yeah.

Yeah. But I still do venture early stage investing also outside of the studio. Very limited given my exposure already to the studio. And then we still do like private equity level type investing also with some of our private equity partners.

So got it. And you, when you say you're involved, I mean, part of it, what you do is you ideate and then you also probably mentor and coach the entrepreneurs. Is that right?

Go into companies, try to find what problems are there for companies that we can build solutions against. And those companies can be partners in that journey. They can be customer number one. And I actually think places like Alabama are really ripe places to do that. And what I mean by that is people overlook places like this, but here is the thing, there are some very large companies in places like Alabama. They may never be public companies because they're third, fourth, fifth generation, but they're huge, billions of dollars in revenue and lots of problems sitting in those companies that because they're so community-oriented, you actually have easy access to go dig into those problems. And you find that those problems are common across the industry, or you find out unique problems that you can solve for their customers that you can then build solutions around. So there's actually a benefit to this model for this kind of company. You can do that anywhere, but there's an extra benefit doing it in places where you're 1, 2 degrees of separation from the people you need to talk to, to find problems and try to work on solutions. And these are still very large companies. Companies, you know, they just would never make themselves public because that's just the nature of some, some, some of these companies.

Yeah, right. I mean, people are going to flock to Birmingham after this podcast.

Birmingham, and come talk to me and let's go build wonderful things together. I am— I mean that 100%, okay? And we are working on making sure there's an advantage through capital for the things we build together. And they can bring their talent and we can give them access and get access to what they have access to. And let's keep creating wonderful things.

I love it. I love it so much. Just a few more questions. Have you ever experienced imposter syndrome or severe self-doubt?

Yes. I wish I don't, to be honest with you. I'm actually not one of those people that thinks it's a noble thing because actually I find it Very annoying. Like, I've done this thing 10 times. Why do I still feel like I'm not good enough? So yes, I do. And I just remind myself that learning is part of the journey. Failing is part of the journey. And that there's probably a very good chance I'm not even gonna fail because I've done this thing many times, right? And something I also remind myself of is many times I feel this way, but when I start the thing, I'm in the zone., and I just need to get myself there. So that, those are some of the things that I, I try to remind myself, uh, about, you know, feeling not enough or having that imposter syndrome. Um, and the, the thing I also tell myself is part of why I have it is because there's still a lot to learn, uh, and I should just be comfortable with it and say, what do I need to learn and what do I not know? What do I know? Just do the thing, do the work, do the reps. The reps give you confidence and, you know, it is the nervousness you feel at the beginning of the game. But once the game starts, you got to play, you know? So.

I love that.

Yeah.

That's so well said. That's great. What do you wish you had known earlier on your journey?

Oh, man. Optimize for freedom and happiness always. We talked about incentives. I think that's important. What else? I would say align on values as much as you can, as often as you can, because that's the lasting thing. When you don't align on values, you're about to set yourself up for a lot of headache. So those would be some of the things. Don't take yourself so seriously. Those would be some of the things that come to mind. Yeah.

Yeah, that's great. And last question, what advice do you have for other founders as they embark on their journeys to grow into leaders?

You know, it's, it's, it's almost along the lines of what we just talked about with imposter syndrome and all that. Look, knowledge and courage is more important than anything else. In this journey. And, uh, knowledge comes from without, it comes from outside you, right? You can't know something you haven't been exposed to. It's impossible.

Yeah.

So just keep learning and compound on what you're learning and it turns to wisdom, right? And that, that's kind of how it operates. And then forage comes from your mind. You have to drop the smallness mentality. The way you develop your mind is to be comfortable with failure, to take bets. It's like a muscle you're building, and as you build that muscle, you get courage. You realize on the other side of my fear is not anything that's really going to kill me as long as I measure my bets properly, you know. It's like Ogilvy said, and I'm paraphrasing, I love this quote, it's, it is not genius that's missing many times in business, it's the backbone that's missing, you know. So just develop the backbone and the failure is not going to kill you, you're probably going to learn from it and be better at it. All of us that have experienced success have also experienced failures, lots of failures, and It's a never-ending game where you always get a chance as long as you don't ruin yourself. And that's what you have to remind yourself. Learn what you need to learn to get to where you're trying to get to and then have the courage to act.

Beautiful. Amazing. Sagan, what a great conversation. I so appreciate it. People are going to get so much out of it. I really appreciate you joining me today.

Thanks, Alisa Cohn. I more than appreciate you giving me the chance to have this conversation.

Thanks for listening to From Startup to Grownup. If you like what you heard, give it a review on Apple Podcasts so other people can find it. And if you know of a founder or someone else who is meant to be on this podcast, drop me a line through my website, alisacohn.com.