DIgital Telepathy Culture

Hi Chuck, great to be with you.

Good to be with you as well, Dave.

So why don't we start, I'd just love to hear a little bit more about Digital Telepathy and what you guys are up to down there in San Diego.

Sure, so Digital Telepathy, or DT as we like to call it, we're a design company. We specialize mostly in digital design and user experience, user interface, and we work mostly with startups because we feel like they're the most fun to work with. Fortunately— I do that too. Yeah, yeah, exactly, right? So that's kind of a— that's one of the goals of our culture is having fun. So that comes down to who you're working with every single day. So we like to work with those guys. We're here in sunny San Diego. We love it here. We tried to move to San Francisco for a while, and we kind of realized that our hearts are here, and we can We can do— this stuff's digital. We can do this stuff anyplace. So yeah, we work with a lot of really fun clients, but the cool thing is we actually build our own products as well. So we have our own entrepreneurial bug. We get to work with all these entrepreneurs, and so we have to kind of let loose and build our own stuff. So we build design products and make it easier for anybody with a design or anybody with a website to improve the design and functionality of their website.

Oh, very cool.

Things like we built the Hello Bar, built a product called SlideDeck, and we have one called Filament right now. So keep ourselves busy with that, and it's a good release, you know, after just working all with clients every day.

Having clients tell you what to do and where to move the buttons, nice to be able to decide yourself.

Yeah, that's one rule. We can't be pixel pushers, so we have a goal to be good friends with all of our clients, so that helps. Helps that we used to have this issue where, you know, we were challenged with clients all the time and not having fun, but once we kind of set this rule, we have to be able to enjoy our clients, you know, have fun having a beer with them or something like that, that kind of fixed all that. It's really cool.

So have you fired clients that were not fun enough?

Yes.

Oh, interesting. How did that conversation go?

You know, those are actually easy conversations for us. Either we fire clients for either not getting it, you know, and just not being right for us, and also being abusive to our staff. So you're a service company, people are used to treating service in a certain way, some people are, right? And we try to position ourselves as partners, and of course always taking care of whatever they need, but at the same time, you know, it can't be abusive. So those are good conversations to have. And hopefully you stand up for your staff and what you believe in. And also hopefully the other person on the other side learns something, maybe. You never know.

Do they ever come back and say thank you?

Yeah, well sometimes you have the conversation and they get it and they say, they get it and they say, "I'm sorry and we'll be better." And we stick with them and they've been awesome. Because they, you sometimes just need to push back. On people and just kind of let them know what you're made of and they respect it. Sometimes you never hear from them again, which is okay, and then other times you hear from them and they kind of get it. Sometimes you'll have a colleague from the client that moved to another company and they're like, "Oh, so tough there. Now we're here. Let's work together again." So that's been nice. Cool.

And how big is the team down there?

We're just under 30 people.

Okay, and you know, one of the things that we connected around was it just sounds like you've been really thoughtful about building the culture there, you know, more so than most. So I'd just love to hear sort of how early that started and how you thought about kind of specifically, intentionally building a certain kind of culture.

Yeah, you know, we've been around for 12 years. We're one of the oldest startups out there, if you could call us a startup. But we've made a ton of mistakes. You know, I started this in my bedroom and I had no idea what I was doing. I just figured I could always get another job once I failed. And, you know, I've just kind of been learning along my way. So the first things we did was we just wanted to work on cool stuff. That was like what our whole goal was. This is a place you work on cool stuff. But that's not really a culture. That's a goal to be able to work on cool stuff. So once we started working on cool stuff, we were like, okay, now we want to grow. And we started growing and doing what the business books told us to do from a business perspective, from an operations perspective. And we grew, but it wasn't fun. We started getting different types of clients, and we couldn't work on cool stuff anymore because we were growing. And we weren't happy. We weren't having fun. Then we finally got— this moment happened about 5 years ago. We got this idea that we're philosophically driven people. We think we're intentional about our lives. We work on ourselves. We grow ourselves in terms of personal growth and relationships and friends and family and all these things. Why are we coming to work and just doing our job? Why can't we integrate these beliefs of our life, these values of our life into what we do every day?. And I've always had this theory of like, my goal in life is to enjoy every moment of it, if at all possible, right? So we have this in front of us, we never know when it's going to leave, so might as well try to enjoy it all. And so that's greater richness than money could ever buy, right? So as a result of that, we started building into the culture. So we started to do everything in terms of our services, the way we interact with clients, the projects we work on, the way we interact with each other, who we hire based on our philosophies, based on what we believe. We learned a lot. We spent some time with Tony Hsieh. We spent some time with some of the greats reading your blog, doing all those kinds of things like that we could learn about and just started kind of marching to the beat of our own drum and took a lot of risks in doing that too. We decided we're only going to do design because that's where our passion is. We let all the rest of our business go and we excelled at design. We could actually focus on it and do really well and we grew. We decided we were only going to work with people we could be friends with, and that's pretty risky because we're pretty particular with who we're friends with, and we grew. We had more loyal customers, less churn, we had better referrals, all these types of things as well. We decided to start doing that with who we hire, so we have a very— for a little company like us, we do usually like 7 interviews, personality profiles, tests, all kinds of stuff. And we involve our whole staff and a lot of the hires as well. So that creates culture in itself. And then lastly, you know, we've gotten good at this. So we kind of realized we were doing a bunch of cool things. And it's like, oh, it's happy hour, it's a cool thing to do. But those are kind of fake, right? We can have like cool color furniture, we can have Nerf guns, you know, and all that kind of stuff, but that doesn't build culture.

It's the stuff that a lot of people think of as culture, right? The foosball table and the—

That's right. And so we decided to start merging it all together. So we took the philosophy that we've created and we merged it over our culture. And so we most recently read Tribal Leadership, which is one of the best books I've read in a long time. Love that book. And so, you know, we did a survey to understand what people really feel is going great for DT, and it's that They have this great culture, they are working with some of their best friends, they love— they get out of bed in the morning to work with their friends. And that's great, but that doesn't scale. Like, you can't be in the business of working with friends. So we posed the question of, now that we are able to work with these great people, we have great skilled and good people we trust around us, what do we want to do together? And so we set the noble cause of crafting meaningful experiences. So for us, we build experiences. And if you go back to what I mentioned, it's like trying to enjoy every moment of life, every experience of life, right? So what we do from a design perspective is more craft. We don't want to just put something out the door and send it over. We want to actually take the time and put the craft into it. And then the meaningful really took me by surprise. I thought it would be something totally different. One of our values is soul, like crafting soulful experiences or something like that. But this meaningful is phenomenal. We did a relatively long process to come up with this, but we broke our team eventually into like 5 groups of 5. They all came up with something very close to this word meaningful. So that was really neat. When I describe what we do, I quite often say we put meaning behind it. Everything has meaning. Everything has purpose. When you ask one of our designers, "Why is that blue?" they can tell you why it's blue. There's a lot of thought process behind it.

Could you share a little bit more about the process that you went through to come up with the values? It sounds like there's a specific point 5 years ago where something really shifted for you. So can you walk us through the— just like tactically, if another founder was having a similar realization of wanting to be more intentional about the culture and make work, you know, love coming to work every day. So what tactically did you do to make that happen?

So I first start by talking about my own personal behavior before that moment. So I've always been a high achiever like most entrepreneurs are, right? And so I was kind of, I was an athlete and entrepreneur, so you're bred to be like, try to be the best at everything. So my goal was always to be the best, always to win, all this kind of stuff, right?. And I started getting frustrated in business because I'm like, come on, keep up with me, we can do this if you guys just keep working like I do. And there was a lot of I in that. And one of the realizations I had was, man, I'm trying to drive this all myself and get followers. And that doesn't work, that doesn't scale, it just wears people down. And who am I? Like, who's even to say that that's what I'm supposed to be doing, that they're even supposed to be following?

Were people quitting, or what was the sort of practical implication of you coming from this III place?

They weren't quitting, it just was hard. You know, it just wasn't like I would rally the troops and they'd be like, "Yeah, whatever." You know, I didn't feel like I was able to be at the level of leadership I wanted to be at. And I thought leadership was taking the bull by the horns, you know, being the general that says, "Let's take that hill." all that kind of stuff, right? But what I realized is that I had this gift. I had this gift of people who chose to work with me, right? So I was lucky that they were working with me. I was lucky I was able to get to where I got at this point with them. And so we have a quote that we're actually going to be custom painting on the wall, which is, "I am because of we." And so it's the whole idea of like we create each other.

Right?

And so as a result of that, I kind of got it that our philosophy, our culture has to come from everybody. And so one of the first things we did is we did a values exercise. Our values exercise to begin with was relatively standard, I guess. You know, we got a bunch of words, we got together, we talked about it. You can get these value sheets that have, you know, I don't know, 50 words on them. You circle the words and you talk about them and you interact with everything. So that's how we came up with—

with the whole team.

We did it with the whole team and we did some— it's been a while so I can't remember exactly, but we did a process of elimination. You know, we took out the top ones and we talked through them. But we did a few other things differently. So we said integrity is not going to be one of our values. That is an amazing word, it means a lot, but it just doesn't mean anything day to day. It's the same with like, our previous values were integrity and passion, innovation, but if you say those 10 times they don't mean anything anymore, right?

Because they are so universal?

Yeah, they just weren't inspiring, they weren't differentiating. A good friend of mine, Arjun, who runs Retargeter, one of his values is hustle.

Yes, a good friend of mine as well.

Right, visceral, right? Like that's something that really defines them and they do hustle. That's a big part of who they are. So we set that goal is that our values have to be different, they have to be something that really means something that permeates us. So we went through, you know, a couple rounds and then, you know, I kind of gave my final word on what I thought, but we kept it very open and we all just had to agree that everything popped for us. So every single word. And our values are Soul, Camaraderie, Betterment, and Growth. And so—

Soul, Camaraderie, Betterment, and Growth?

And Growth. Yeah. And Soul is—

What do you mean by popped for you?

Everybody in the room had to say, like, yes, I get it. You know, that is something that means something to me, that's something I'm passionate about, because Values are beliefs that unite you, right? And so everybody kind of has to be a believer in those values or else there's no use in having them, right?

And could you say a little more? I think the connection between beliefs and values is not always clear to people, and it sounds like it's pretty clear to you how those are connected.

Yeah, I think of us having personal values, which are our beliefs in our personal lives and the relationships with others.. And I think that as we come and work at a place, we're lucky enough to work at a place that cares about values, it's the intersection of those beliefs, the way we run our lives, our behaviors, the way that we act, our personal, I guess, rules in life. Where those intersect are those beliefs that are shared by the core of the business and the group together. And so when you bring a group of people together that are united around these beliefs, they get it, they're they're a part of it, you know, that's where you get a lot more power and camaraderie with the group itself.

And I can sort of intuit growth, betterment, and camaraderie. What do you mean by soul?

Soul is— what I love about soul is it can mean so many things, right? So it can be the only thing that defines us as a human being, right? It can be James Brown and soul music. You can put soul into something, right? You can think of an old soul, right? Someone that— you can think of souls, you know, like you just kind of connect on that level as well. So we wanted something that was so unique that if it was craft or if it was quality or if it was excellence How do you really say, okay, there needs to be excellence in everything, over and over and over again? It's hard to really define that. But soul can be little, it can be big. It just means putting life into something, just caring about something, right? Putting purpose into it as well.

Like, put your whole soul into it.

Yeah, and it can be so different too, right? So excellence seems very formal to me. So it's like, it better be good. Soul can be unique. Soul can be like— people cannot even like what soul was, but it's different. It's you, you know. And so we encourage people to be themselves at their highest level here.

And what happens when the client doesn't like that unique soul?

So our goal is to find our clients' souls. So we work with people that are up to really great things, and our job is to extract that from them. And design it. So we try to— we have to use a little bit of our own soul in doing that, you know, and the way that we interpret it. But, you know, we try to work with soulful people.

So you mentioned one big trade-off, which is only working with clients who you could be friends with, and that's really clear. I love that because I think often when people hear values, they think about kind of motherhood and apple pie, like, of course. And I think where really the rubber meets where the rubber meets the road is when you actually value something over something else that could be considered good. So, you know, we value working with friends over having just generically more customers or revenue or growth. What are some others like that that are just real tangible trade-offs that you made consciously?

So trade-offs that we made in terms of working only with people as friends.

Meaning, because you value these four ideas, what trade-offs have you been willing to make because of that?

So it's interesting, maybe I'm wired a little bit differently, but we don't look at them as trade-offs anymore. We look at them as we were trying to do everything before, and we didn't have a playbook. We didn't have this thing where we're like, "Okay, will these guys be good? I don't know, let's just work with them." And now we have this really great filter and our outlook is that we might not be right for you. We want you to find the right person to work with. And also, just to take this out of the context of just working with clients, let's just open it up with everyone, right? So if we're interviewing someone, We want— whoever we're talking to is another human being and probably inherently a great person, right? So our goal is that they find their dream job, and if it's here, awesome. It either is or it isn't. You know, we don't want to manipulate anything. And so as opposed to seeing trade-offs, I see opportunities because we can have a conversation that's very honest with them and say like, this is what's great about this, and this is what's really hard about this job., and it's going to be great if you like these things, and it's not if you don't, and if you don't, I'll refer you to someone else. And the same goes with the vendors we work with. We really care about— so we're designing our space right now, and it's so important that, you know, the people that we bring in have those values, that care about those things, that get what we want to do. And it's so easy for us because we could have just said, well, let's find someone within our budget, you know, and that will get it done at the right time and all this kind of stuff. But now we have this criteria. That we can use. And same goes with clients. In terms of things that we may— and I guess another positive is that it's almost relieving to us when someone doesn't fit the mold that we're looking for, whether it's a hire or a client. We're like, whoa, that could have been a nightmare. You know, and we try to work long enough that we get the best or the worst out of them, right, to understand that. So I didn't really directly answer it. I indirectly answered your question. I'm sure there are other great opportunities that we're missing, but what I would question is, do we even have the time to explore those things? There's so much within the small sphere of things that we're doing now that we're just getting started in. It's okay. I'm a massive FOMO, fear of missing out, person, but I've learned to deal with it.

So yeah, it sounds like that sort of perverse, you know, by narrowing what you're focused on, you've actually grown more than you would have if you were trying to do everything.

Yeah, and kind of case in point, every time we've grown, there's been this inflection point before we've grown. And there's been a point where it's, okay, we can look what's in our heart and do what we believe and what we want to do and what we feel is right, but we're going to possibly give all of this stuff up. And nearly every time we've done that, we've grown.

Those are the kind of trade-offs I was referring to.

Yeah, okay, got it.

Yeah, because I think there's a temptation, you know, it's hard enough to build a successful startup as you noted and know well in 12 years, and I think there's this deep temptation when there's an opportunity that's a real opportunity, you know, for whether it's money on the table if you're raising money, or customer to just take it, you know, because if you're defining success by kind of the traditional measures, it is really tempting. So that's what I was kind of curious about. You know, in hindsight, it's probably easy to say, oh gosh, it all worked out so well. Curious about those moments when you're actually scared and it felt like you were making a trade-off or taking a big risk, maybe, as you said it. And, you know, just— I think it would be instructive for founders who are facing those same kind of risks that in the moment really feel scary, you know, to sort of leave something on the table. You know, hiring is an interesting example. I know in the Bay Area there's a huge, you know, it's been described as a war for talent. And you find someone who's a talented Rails developer or iOS developer, and to let them go because you don't want to be friends with them, like, ooh, it's tough. So just, yeah, curious to hear a little bit more of your thoughts on that.

Well, that's one reason I'm in San Diego. Less turf wars. One of our best examples is, I have two examples, one is our services. So we've, just like any good bootstrapper, I did everything under the sun. And I personally did everything, so I was the developer, the designer, the salesperson, the accountant, the hosting guy, the email marketing guy, the SEO guy, the social media guy, right? So we did all of these things. And we had streams of revenue coming in from all of these things. And one day I got a little bit smart and I was like, wait a second, we can really only do like one thing really well. If we want to be best in the world at something, we can only do one thing well. I was actually influenced by the hedgehog principle from Good to Great, which is picking what you're passionate about, what you can be best in the world at, and what your economic engine is. And so we realized that we should focus on design. As a result of that, 70% of our revenue was development, 30% was design. That's pretty risky. I'm also dedicated to not laying people off. I understand that that's a business tactic, but I just feel responsibility of people's livelihood when they choose to work here, that I'm not going to just give them up like that. I brought my senior team in and we talked about getting buy-in that we all wanted to pursue design. We talked about what our strategy is with it, and we decided we were going to do design. So we decided user experience, user interface, front-end design, things like that. So we gave away all our clients.

Wow, 70% of your business?

Yeah, and that month was a little hard, but the next 2 months after that became record sales months.

Wow.

And we also shifted our brand. So our brand was always kind of— it was okay. But then once we focused on this one thing, it was what we're passionate about. Sales became easy for me. We got to be known as a great design shop. We got to be known as the non-commodified company, right? No one was like, well, why don't I just take it to India? Because back then, you know, there was a lot more outsourcing than there is now. And that became just incredible. But that was like Whew, that was close. You know, like, that was one of those times where I had to say to myself, I'm okay if we lose the company because whatever we do next will be better. And if this isn't— it's not right to hold on to something that's not completely optimal for you. It's better to just shoot for what's optimal and fail than it is to, I guess, constantly lose every day going to work, right, when it becomes a job. The other thing that happened a couple of years ago was that we built quite a few products here now, and I'm our biggest client at DT. So I am a customer of Digital Telepathy. All my crazy ideas we build here. Some work, some don't. And so I use the services. I have a strategy team, I have a design team, I have an analytics team that help us, and a product manager that help us scale. Products. As I was working with our process, it drove me crazy. As a very typical entrepreneur, they'd be like, "Well, first, Chuck, you need to get us copy." I'm like, "I don't have any copy. I don't even know what I'm going to do. I need design." I started to understand some of the frustrations of our clients and how it must be tough to work with this type of process. We work just like every other design agency. It was no different, and possibly even a little bit better. So we started to design it for how it would work best for a startup, for uncertainty, for needing to change really quickly, for just testing things and not committing. We wanted to remove this feeling of like, "Oh, if I call DT like a lawyer, is it going to cost me money if I send him an email? Is it going to be a change order? Well, what did we scope in the project?" All this stuff. Let's just go to flat rate pricing and let's just charge a flat rate and let's— because we have— for clients.

No, but a flat, like an hourly or a flat project rate?

Monthly, a monthly rate.

Oh, a monthly retainer, got it.

Yeah, so as opposed to— we call it a subscription because the way I think of a retainer is that you buy a certain amount and you get a certain amount out of it. Right, so maybe you buy in, you get 100 hours, and you work the 100 hours and then they're gone. Or you buy in, you get these projects done for you every month, and that's your retainer, that's what they're doing, right? For us, we wanted a subscription. So we wanted you to actually subscribe and we say, "Alright, what are we going to do?" And we have a process called Objectives Based Design, and we basically set whatever the objectives are, what you want to accomplish, and we get to work on it. And that's what we do every single month is we try to accomplish those objectives. Those objectives, and we can change on a dime. There's no change orders, there's no extra costs, there's nothing like that. That was a major, major risk.

How do you manage scope, like if someone comes with some huge project?

So what we said was, in the first couple sales I did, I said, okay, I don't know how this is going to work, but we're doing this new thing. I promise you we'll work our asses off for you, and I may lose money at the front end. I'm willing to lose money on the front end, but after a couple months, if I am losing money, I'm going to come to you and say, look, I'm losing money, I need to raise the price. Are you okay with that? And we agreed on a price point, and they said yes. And so we did those first couple. We did lose money on the first couple, but then we started gaining because we got to know the client better. We got to start moving faster, we got them more into the maintenance performance mode as opposed to building so much and doing so much intake. We could read their mind, so it was a lot easier to work with them. And we are now hitting record sales months. We break a record every single month.

Wow, congratulations.

Thank you. Awesome. And our biggest challenge right now is hiring people, finding talent. And so, you know, to bring it down to the To the earthly level though, we know that that could go away at any moment, so that's where that value of betterment comes in. It's us constantly looking at it, we're improving that service every single month, getting feedback and all that kind of stuff. But two trade-offs I guess I would say that we got lucky with, and we're getting a little cocky now, where we say like, "Oh, if we just follow our hearts, everything will be perfect." So we're trying to understand how do we bottle that. How do we continue to evolve and follow those philosophies without exposing ourselves to a lot of risk?

Could you talk— so we sort of went through the values creation, and again, I'm sort of digging for tactics. I'm imagining other entrepreneurs wanting to— okay, I got my values, you know, hiring for culture, I think, is is becoming more widely known how important that is, if you have insights on kind of how to do that well, or other sort of tactics that go, you know, a step beyond, you know, finding your values and putting them up on the wall. Like, how do you make sure that you're making decisions based on them? How do you make sure that people are living them every day?

Okay, so I'll, uh, I could talk about 3 things. One is that I wanted to create like an undercurrent almost like a backbone of the company, a mantra if you will, that brought us together. So that's where the term Betterment comes from. So it started out, we did our Hedgehog Principle, and you know, just tactically to describe, you draw 3 circles, concentric circles intersecting on a whiteboard, and you write a bunch of things you could be best in the world at, a bunch of things you're passionate about, and several different business models for your economic engine. You find what intersects, and from that you can kind of find a business strategy, right?

So best in the world at, what you're passionate about, and economic engine.

Correct.

Okay.

Right, and if you draw a little, you know, fill it in in the middle where that intersects, you can kind of see where all of these pieces may flow together, and you can see some similarities of those things. So we came up with a a phrase called "design makes a difference." And so focusing on design but making a difference is what we were passionate about. But also making a difference meant performance-based design. So that means we could do— and our economic engine was recurring revenue. So how do you— why would you pay a designer every single month to design for you, right? That was unheard of. But what we realized is design is the only thing a user experiences. If we continuously improve the design, you improve the performance. Thus growing the business. And so we built a whole system around how to do this. What we realized is "design makes a difference" is a little abstract. We wanted to make it super simple. Essentially what we're doing is making something better every single month or time we're interacting with a client. Our goal is to look at something and make it better. And that goes back to their objective as well. What are your objectives? What do you want to accomplish? I want more sales or leads or exposure, okay, we can build a plan on how to make that better. We measure how we're making it better as well. That was built into kind of our "just do it," which was make it better, right? So we started to build that into our culture. We started to put— one of the things I do, for better or worse, is I use these terms in front of everything, so it's kind of right in front of your face all the time, right? And so The term betterment, it grew into the term betterment. The idea of betterment, we have a definition of that, is incremental improvements create exponential results, right? And so we started, I started doing talks in the company. You make one little tiny improvement, here's an example, these are the results, how it stacks over time. You make a different improvement every day, like our manager of culture has a goal to improve the office by one little tiny thing a day. She does that every single day, she makes one thing better.

So you have a manager of culture?

Yes.

Is that her full-time job?

Yeah, so her job is to ensure that all of our beliefs, our philosophies are being upheld, ensure that on the side of recruiting, that she's at events, she's talking to people about what we do, why we do it. She's welcoming our guests and she's kind of our ambassador to— we have open lunches twice a week, so we invite guests from all over San Diego and anybody visiting from out of town to come in and eat with us. We bring in a chef, we do education, we do all kinds of crazy stuff I can tell you later. So she's in charge of all of that kind of stuff and just employee happiness essentially.

And how does she uphold the values? Sort of what's her interaction with the rest of the team? You know, if someone's doing something that's not in line with the values, is it her job to kind of speak to that, or like how does that work day-to-day?

So if I was to look kind of holistically at what her approach is, is that she is looking out for the team with new hires. So she's protecting the culture with people that we're recruiting. So, and the staff knows that, right? They know that they first have to get through Melissa in order to even be considered a job here, and that Melissa understands the culture. She then is checking in with the potential recruits if they have that culture, the values embodied, for them to even start the interview process with us. Then on a daily basis, she's taking feedback. She's just listening to what the staff— what's going on, the wins, the losses, whatever. Just kind of being there to hear and to advise as she can is what she's been trained on in terms of our culture. If someone's kind of down on themselves, she has a way to communicate with them to kind of make them feel a little bit better, to kind of bring them in that we're all together here. Everybody's got a bad day, whatever it is, right? So it's partially that. And on the other side of things though, she's encouraging people to grow. She's in charge of their betterment. We have betterment plans. So it's how do you better yourself, right? Through our goals, improve your skills, improve your happiness, improve your health in the company. And that leads to prosperity and promotions and things like that as well. So it's a pretty large spectrum. It's a really, really important higher for us because it's all those things that myself, my co-founder, the rest of us, we can't do on a daily basis. It's what we would love to do, but if you don't do it, you can't— it's hard to have a self-regulating culture at all times. It's nice to have one person that's in charge of it to help it out, to help it grow.

So would you recommend most startups to have someone whose sole focus is culture?

I think maybe after 20 employees, something like that. Here's a really simple way to say it. If you have an office manager, that person should be your manager of company culture, right? Because don't have them manage the office, have them manage the culture. And then as a result, manage some of the things in the office, that's fine. You can go resupply the printer paper and stuff like that, but manage the culture. That's what an office manager, I think, should be.

And we sort of went off track slightly when I heard that you had a culture manager.

Yeah, we also have a director of vitality.

Really?

Yeah.

What is the director of vitality?

Might as well stay on this tangent. So our director of vitality, we noticed that our staff was getting sick a lot. We're in San Diego, I mean, it is like 70 degrees every single day here. You know, when I was in Chicago, sure, you can get sick a lot, it's fine.

No excuses in San Diego.

That's right, and you know, it's a pretty active crew, but at the same time, you know, we're still somewhat of a technology company, right? And so, not everybody's at the beach, that's not their style. So we wanted, we also found that people didn't know how to cook that well at home. They weren't just whipping up meals. Some people were making microwave dinners and eating those. Some people now are married with kids and they're like, "Man, you need to learn how to cook at home and really take care of your health." There are some business reasons about it, but it's mostly because we care about the people here and we want to educate them. I've been lucky enough My wife is actually our Director of Vitality, and I've been lucky enough to have this built into my life. She's a nutritionist, is an incredible cook. I get this, and I want other people to have it, too. I have been blessed to be able to have her keeping me healthy and also learning what I should eat if I'm feeling a certain way. If I have a big meeting, I actually can eat and drink the right things to prepare prepare myself for the meeting as opposed to crashing for it, right? The more of this metadata that we can get to prepare ourselves to be more productive and happier and more present, we'd love to do that. Shannon is her name, so she comes in and she manages chefs coming in to cook us meals twice a week. During those meals we bring in guests. We connect. Our goal is creating community over lunch.. The whole idea is that lunch is something everybody does every day, and it's very hard to get a healthy lunch. It's also quite often done individually or just in small groups, and quite often the same small groups. 2 people go get lunch, 3 people, or someone will eat at their desk. We should eat together. We should use this as an opportunity to make ourselves healthier, more educated on food and vitality, and then also to connect with the outside community as well. We do education all about vitality. Sometimes it's about how do you deal with cravings, because we all get cravings while we're working. How is sugar affecting you? Sugar is something that we need to know. What type of sugar should we eat? What fats are good for you? What should you buy that's organic? We also do demos of cooking certain meals. We want to actually teach the staff how to create different meals and be able to make them at home. We make sure that they're inexpensive and that they're easy to make. We bring a Vitamix in, so we have smoothies and all this other kind of stuff. What I mentioned before, we've been doing lunches for a long time, but we just ordered food and we just ate together and shot the shit. That was a cool perk, but that's not a culture. We blended in our culture into this conversation. So we talk about betterment. We go around the table, we talk about who's got a big win, who's doing something better for themselves. You know, we share the camaraderie. Everybody knows that they're there to connect and talk with people. We bring in potential applicants to sit with our staff, and our staff actually talks to them kind of casually, but they're probing for their values. They're understanding more about them, and we connect with them afterwards. And we also have, we use it for sales, we use it for all kinds of things, so it's ingrained into our culture as well. And when we, when we—

Dave Kashen, probing for values, and this is one that I feel like a lot of people talk about but few people understand how to do well. The idea of hiring your friends is a little easier, or hiring people you want to be friends with, because you can kind of intuitively, you know, get a feeling, okay, this is someone I'd want to you know, hang out with. Could you share anything useful to share around probing for values? How do you know if someone has a value of growth and betterment?

Yeah, so what we've coached our team to do is ask a simple question, which is, "What are you proud of?" And when someone, you know, when you— you don't get asked that question that often, right? So it's somewhat of a thoughtful question, and we're looking to hear something that aligns with what our values are. So some people may say, I'm proud of, you know, that I have a job. Or, you know, they may just say something that they may not put a lot of effort into it, right? And then we ask them to— they ask the question a couple different times, and if they're not able to come up with something somewhat insightful or something where we see there's a bit of depth there. We're like, okay, cool, no problem. But that's a fail. And if they bring up something that is very powerful, we ask, we try to ask why multiple times, right? So we, we tell me more about that, and why did that make you feel that way, and what happened then, and so on and so forth. And we can get so much depth and interesting, interestingness of their character out of them at that point in time. That we're able to kind of get to know them and what makes them tick. And because if you were to do that in an interview, it wouldn't be the same experience. But because you're doing it in this casual environment with 30 other people around you, you're casually talking, you're being yourself, and that's what we want to get down to is a core self.

You're almost reverse engineering what their values are based on what they're proud of and what they talk about and why.

Yeah, I mean, think about it. Like, if someone asked me what are my values, I would be like, I don't know. I mean, I don't have— I've created personal values before, but I don't just pull them out of my hat and there they are. But if they ask me what I'm proud of, I could talk all day about that.

Yeah, it's interesting. When I work with clients who are trying to figure out their values, it's similar to questions I use around what most energizes you and thinking back to your life, the times you were most alive. You know, what was happening for the exact same reason to try to reverse engineer values. So it's brilliant to use that.

One of my favorite questions is, what's time travel for you? What's completely effortless that you find flow and bliss in doing? And it's really cool to see what people come up with in doing that.

Very cool. And last question, just You guys are bootstrapped?

Yeah.

So haven't raised any money and profitable at this point?

We've always been profitable.

Always been profitable.

Yeah. Sometimes it was very, very small amount of profit, but much better now. Yeah, we're comfortable. No plans to raise capital.

Great, congratulations on that as well. And most startups, at least the kind of classic Silicon Valley ones that, you know, I spend a lot of time with, and I think you guys do as well. They're not in that position. They have a, you know, they're losing money or burning money and have a limited amount of, you know, typically venture capital to spend. Does it make sense to hire a director of vitality, a manager of culture to turn down business? Like, do you think the funding structure impacts your ability to build the kind of culture you have? Or if you were building a venture-funded technology startup, you'd be doing it the same way?

So I think all things come in layers. I think, you know, for me, my aha moment was culture comes first. We're all humans here working together. These people are not my slaves. They're not machines. They're people just like me. They're no different than me. And so they're the most important thing, always. No matter what, and it's— once I understood it, it was kind of crazy that people wouldn't always put culture first. Because the output of all of our products, everything we create comes from a person. And so I invest, and the rest of us invest in those people to then create these great outputs, right. So I would say first the paradigm needs to be there, is that any culture or any startup I think culture should be a huge part of it. And usually you start with an idea and a few founders, or one or one to many founders, and you start with that idea, but there's already culture there, right? It's like, why are you doing the idea? Why does this matter to you? I see a lot of startups that people think there's a great market opportunity and they're going to jump on it, and I think most of those will fail. It's when they really believe in what they're doing that they're going to succeed in most cases because— or they're going to enjoy failing. You know, like, that's the way I always look at it, like, well, at least we had fun going down the ship. So I think it starts with that, and then from there, when you hire, you know, the hiring is so, so important. You can't just hire a Rails guy. You want to hire someone that cares. If you're in the active sports or health or whatever, you need to hire a triathlete Rails person, if that person exists. You know, if you're in the fashion industry, you can't just hire someone who wears Birkenstocks and shorts to work every day, right? You need to hire people who care about fashion. So I think that those are the building blocks of culture, and I think that you all have to be in this for a reason. It can't just be— whenever someone says, oh, we're going to raise a couple rounds, we're going to sell it in 2 years to this person for this much money, it's like bullshit. You know, you've got to be willing to never sell the company.. And to do it because you love it, to build a lifestyle, not a lifestyle company, but build a lifestyle in your company. So I would put those as the first layers, and then from there, when you get to a point where you need an office manager, make that person your manager of culture and have that person help and grow these cultures so it permeates the company a bit more. And then from there, if you care, you know, like for us Can we write off a business expense for the Director of Vitality? Probably. It probably either breaks even or makes us money based on people being sick less, based on me getting to talk to people like you because we have good stories, based on other people coming in and seeing our culture. It's actually, I think it's really good. Is it right for everybody? It just depends on who they are. You know, and there's— that's just for us, the Director of Vitality is what's important to us. There could be a Director of Fitness, there could be a Director of Capital where he helps everybody invest really well and create more prosperity. Whatever it is, you know, it depends on that organization. And then the last thing I'll say is, you know, what we kind of got off on a tangent on is that when you have this culture and you have these ideas, you want to make it part of your language. So we have this concept of betterment. What I mentioned was just about constant improvement, incremental improvements. So everything we do is around betterment. When we talk with a client, betterment is involved because we're looking to find out what about their organization or their website or whatever it is can be better, and then we build a plan to make it better. We measure how much better it was, and then we make it better. And that is something you'll hear in the office all the time. But the way we got it to that point is we put our time and our money where our mouths were. We created this thing called a Betterment Bonus, and there's a blog post, if you search for Betterment Bonus, it should show up there, or a better year-end bonus, I think is what it was. And as opposed to giving people cash, we took another risk and we said, well, what if we propose something different and really allowed them to embody what true betterment is? And betterment to us is like, it applies to the office but it applies to the self too. So we gave everybody $1,500 and we said, okay, you have $1,500 to do something you've always wanted to do but were afraid to, couldn't afford, and that will improve you in some way. And we're not going to judge whether it improves you or not. You're the judge of whether it improves you or not., but we're going to judge if it's impactful enough, if it is big enough. We want you to think big. You can't just go take a vacation to Florida, you know, like you got to do something bigger than that. And we gave them a couple days off as well, and they loved it. So the first year I think we did it with like 12 people. Next year I checked in and we did it with like 18 people, and I was like, do you guys want it again or do you want cash? And they're like, we want the Betterment. People have learned to race, go to the track, drive race cars. People have learned to play the piano, gone to France, cycled in Mallorca, amazing, amazing things. Now they get what Betterment is because they've experienced it for themselves.

Really, really cool. I certainly appreciated everything that you shared. You know, I often say that I think at its best leadership is a noble act in that you're servicing, you know, providing a service to people and helping to make their lives better. So appreciate the concept of Betterment and that you're out there, you know, creating this kind of environment for, you know, 30 human beings. So you should be proud of that and really appreciate you just sharing. I think it'll be useful for people to kind of hear more of your experience in doing it and bringing it to life every day.

Yeah, thanks very much. It's a great opportunity to be able to chat with you. And, you know, our outlook is that we want to give all this stuff away, so we welcome— I would talk about it forever, and anything we do, we'd love other people to take on if it's right for them as well. Awesome.