Shortcut | Building for the Distributed Future

Hi, everyone. I'm Sarah Gua, general partner at Greylock. You're listening to Grey Matter, where we share stories from company builders and business leaders. You're listening to episode four of our Work From Anywhere series exploring how the world has been turned upside down since the pandemic began. We're talking to an amazing set of founders and CEOs building for the digital first economy about how they're surviving and now thriving in real time. We'll get their best predictions for what changes will sustain the bets they're placing and what they're struggling with. Our fourth guest is Kurt Schrader, the co founder and CEO of Greylock portfolio company Clubhouse. We'll hear from him about why they're going after deeply embedded incumbents in the project management space. How the collaborative home for software teams needs to be not just a product to divide and conquer units of work, but a space for conversation and Clubhouse's own gradual talent driven evolution into a distributed team. Kurt, it's great to have you on the Work From Anywhere podcast. Can you please tell us and our listeners a little bit about yourself and the founding story for Clubhouse?

Yeah, definitely. So I am the CEO and co founder at Clubhouse Software. We've been working on Clubhouse software for about six years now. My whole career has been building, running, managing, engineering, product teams, and when I left my last job as CTO of an ad tech company, one thing I noticed there, and that I'd noticed at a lot of other companies before that, was as your team grows, as you add people to your team, continue to expand what you're working on. Every team usually gets to the point where they have to roll out a piece of project management software. And, and in my experience, teams are never really happy on that day. It's not a happy day within the organization. People are generally unhappy with the tools they have to use, unexcited about it, nobody really likes them. And actually, at my last company, when I rolled out a big heavy project management tool to the team, the team came to me. Actually, my co founder Andrew came to us and said, what do you need out of this? What are you looking for? And I said, well, I need these reports and I need a bunch of visibility into things I don't get out of our current tool. And he said, okay. And he went away. And mostly him and with the help of a few other people in house, built a piece of software that did all the reporting for me, use the APIs of the old tool we were using just so we didn't have to use Sort of the industry standard tool. So when we left there, we got back together and started to work on, you know, really building a tool for engineering and product teams that people really love using. That's where we started, but also could really scale with an organization and help make an organization work better together and more productive and really pull a lot of the organization into the product development process. And yeah, I've just been started there and have been scaling up from there.

Seems like a really worthwhile mission to me. It's one of those areas where the status quo is not making teams super happy, but a lot of people seem to have just accepted it, so. So I'm glad you guys haven't. Just going back to the key mission of Clubhouse. There are a number of ways you can do project management in product teams today. I'm sure as a leader you tried everything from post it notes to the existing heavy enterprise software. What did you feel like you could reinvent? What are the principles behind Clubhouse?

First of all, the entire organization should be involved in building the product. And as more and more companies become software companies and have software involved in what they do every day, we think that, you know, you should not just have a tool that only engineering looks at or only product managers look at to generate reports. We think that building a product should be a conversation that not just includes the engineering and product teams, but includes designers, includes support team, includes your sales team, includes your marketing team, really includes everyone in the company, includes finance. You know, it just when you think about sort of the insights that everyone can bring to the table and, and sort of the diversity of opinions and those people know, you know, have a lot of people in your organization, are a lot closer to the customers, do a lot better job understanding what they want. And really as you're building things out, everyone should be involved especially with the things that they have lot of knowledge about. And I think the other thing we believe is that, you know, you should really love the tools that you're using. They should bring you joy on a day to day basis when you're using them. And I think too often we just accept clunky or slow or really tools that are not built for the user that are really just built around getting a task done and don't think a lot about the user and you know that someone has to actually use and interact with this every day. And we want to add value, value for the users. We really want to change that and show people you can build really great tools that people love using that also make your team more Productive and help you move faster and build things better.

I remember thinking, I forget if it was you or Andrew who shared with me. Looking at some of your usage charts when we first made the investment at Greylock, you mentioned that you kept watching some of the Clubhouse users that were active, you know, 31 days of a 31 day month, and thinking like, we got to get that guy or gal out of the system and make sure they take a break because it'll be good for their creativity.

Yeah, we watch very carefully to see that most of our users are in the tool every day. We don't want to build a tool that just two or three experts use every day and everyone else is in two or three days a month. So we track that closely internally. And yeah, there are a good number of users who are in every day. And yeah, we've always joked about building a feature that says, go take a break, it's time to go outside that sort of thing and take a rest.

So digging in a little bit to what it means to have the whole company involved in building a product. Can you talk about how that manifests in your product? Because I'm picturing using tools that shall not be named here. Not gonna let the account executive move my ticket around, even though he really may want this story for this customer to get done right. So how does it show up in your product, that collaboration?

I think, number one, we try to keep Clubhouse very easy for people to understand and parse and interact with. I think that's key. If you had a lot of complexity and everything's very hard to understand and really figure out what's going on, then it doesn't matter. If you add people to the product, they're not going to use it anyway. But because of that, you can add in a lot of people across your organization and they can see what's being worked on and really see it. Sort of what we're building towards is letting people see the entire lifecycle. Why are we building this feature that we're building within our product? Who are the customers that have asked for it before? What's driving the reasons why we're doing it and how do we show that? How do we show integration with Zendesk or another tool that, that you might be using to track a lot of your feedback or your communications with your customers? And then from there we want people to be able to see and be involved and comment on the entire life cycle from the designs, how things are being pulled together, how do you drop in your figma mocks and Watch their evolution over time. How do you have a conversation really internally about what's being built? How do you actually see the code and actually see what's being built in there and be able to follow along with that? Then at the end, really close that loop and go back to the people, for instance, that asked for the feature that said this is something we really want in whatever you're building and let them know, hey, that thing you wanted and asked for, be it a week ago, be it six months ago, be it a year ago. You have a Zendesk ticket from a year ago that says this would be a great feature. When you get that done, you want to let that person know and really close the loop and go back to support and at the same time coordinate your marketing, your product, marketing, your rollout. Everything should be done and you should be able to see sort of that whole thread from the beginning to the end. And that's what we're really building toward. How do you have that entire conversation and pull those conversations out of Slack channels where they get lost, out of emails, out of. In today's world, really, I think a lot of coordination used to happen on post it notes on walls and things like that. And that's just not an option at this point. So how do you have sort of that one core place where you can see everything beginning to end and really work together to push things out the door and really build great stuff?

Yeah, that's a much more inclusive point of view than many feel about project management today. I don't know if you, you see like cultural differences and the types of companies you serve or if people want to come on that journey with you because traditionally people tend to be like, do not break my project management. We're trying to keep it clean and we don't want anybody else in it. And like, I'm the admin, it's just a very different perspective.

Yeah, I think we see a lot of people who are so used to bad tools. We've done a really bad job as an industry, I think, building great tools that people really like using. And people have just settled and said, all right, this is fine, this is as good as things are going to get. We'll just use this thing. And I think we've had examples over the last few years of really tools taken to the next level and building really great tools, be it GitHub and a lot of work they did to really level up collaboration across engineering teams to Slack, which really has, I think, taken us to a different place on communication and communication across teams, ad hoc communication. We really thought a lot about that when we were starting Clubhouse.

So any product and engineering team building something significant eventually has to adopt some kind of project management tool. And you've used a dozen of them. What convinced you and Andrew that there was a problem to be solved here? Like what are, what are the deficiencies you see in those tools or what they mean for how teams are structured and work together?

What I've seen in the past and what we see with a lot of these tools is they're not really designed in a lot of ways with the real end users in mind. They're designed for who, whoever is keeping track of status, to have a great experience, so they can query what's going on and see what's happening, see what's in motion. But because the people that are building these tools have really forgotten about the engineers and the designers and the product managers that use it every day, day in and day out, a lot of those people don't really use it. They don't derive any value from it. They come in occasionally, they update the status of the thing that they're working on and really go back to their day to day. And they're not in there discussing how to build things and describing what's being built and having discussions around the best way to do things. And they really just don't like the tool. And you see that in the NPS scores for these other tools, they're negative. People don't like using them. And I think we just really wanted to build something that all of those users would derive value from and really love using.

It's a sneakily simple product thesis to me, which is if you build something that end users like are compelled to use and enjoy using, you're actually going to get better data in the tool for all different Personas as well. So I think that abandonment of end users is clear in sort of the market's impression of some of your competitors.

Yep, exactly.

So you and Andrew, your co founder, were based in New York originally and clubhouse today. What does it look?

So Clubhouse, yeah, was founded in New York City and Andrew and I both live there, although we are both sheltered in place somewhere else in the country. Right now I'm in Michigan and he's in New Jersey. But as a company we grew as sort of a New York based company until we were 20 or so people. And then in order to really look for and hire really great engineers, we started to move, distributed. Some of our people moved out of New York, we started to make hires started throughout the rest of the United States and into Europe somewhat. So we've been a distributed company for three or four years now and really have worked through the process of getting distributed. And we were about 70% located outside of New York when Covid hit and everything happened. And since then, we've moved to being a fully distributed company where we have people all over the US and in Europe as well.

Okay, let's talk about just being a CEO and like, what Clubhouse looks like today. You mentioned that you were on this journey to becoming a distributed team over time. What did it look like before March of this year?

We've been hiring people all over the US all over the world, really, over time, over the last few years. And it was interesting because at the beginning, there wasn't a lot of intention behind it. It was just sort of, we are going to find the best people and figure out how to hire them and sort of figure out as we go how to build a distributed company. And really, I was up in the air for a while, like, do we really want to do this? I don't think anyone really knew. No one had done it before, at least at Clubhouse. And I think we had some fits and starts. And we realized over time that we did want to do it. We did want access to sort of the best talent all over the world. And we started to work on getting a lot better at really writing everything down, being really explicit about communication, doing better about recording meetings. But there were still things that, honestly, we weren't great at. I think we still, a lot of times defaulted to meetings where some of the team was on Zoom, some of the team was in a room, and there's a lot of workarounds for things like that, where you're trying to figure out how to have a really great experience. But it always kind of leaves out the people that are remote and I think us, just like everyone. When Covid hit in March, it really accelerated this process. And for us, it was an easy move. But I think as a forcing function, it forced us to really fix those last few things that we needed to do. And I think we took a lot of inspiration from GitLab. They've done a great job of documenting how they built things, and we've tried to figure out how to really build out a distributed team that works really well together. And there's a lot of tooling and pieces in there, and Clubhouse is a piece of that. A lot of teams use Clubhouse as they've distributed, and we use Clubhouse. So we eat our own dog food every day. But it takes a lot of work. And I feel for all the companies that suddenly had to become distributed and figure this all out in a really compressed time frame.

When you say it takes a lot of work, how has the work you and Andrew and your executive team are doing, how is that work changing? Are you communicating with each other or the company differently in this time?

When you're in an office and everyone's around, especially if you're in a role like a CEO or an executive team member, for better or for worse, a lot of your communication comes from walking around the office, seeing what people are working on, talking to them about things. And especially for me, for years, for 20 years, that's the way I've operated. Wander around, see what people are working on, ask them about it and pull ideas sort of out of that group. And it's really hard to replicate things like that when you're remote. I have a lot more one on ones. I have office hours that people drop into every week. And you know, even then you have to sort of shift those around to make sure that you are not running your office hours at the same time as someone has a meeting every week. Because if you were in an office, you just noticed that and you would wander over and do things. But running a company or any company distributed like, you have to figure out ways to make sure that communication happens and you're really internalizing your organization. And the flip side of that is we've tried to simplify down and really make it easy to understand what everyone's working on and really focus the team. And we used to have pretty extensive okrs and objectives and across teams, how everything worked. And right now we've just said, okay, everyone needs to know what their top three priorities are. I think has been super important for us to really focus in and figure out sort of, you know, how to keep moving forward and stay, stay focused on the goals that we have.

That idea that you talked about, like the, the sort of ambient intelligence of like what people are working on in the office and what, what people's energy levels are, I think that's something that's been really hard to, to recreate. And so seeing a lot of leaders just go spend more time explicitly like getting data on what's happening. How has Covid impacted Clubhouse as a business?

Like a lot of companies early on we saw things slow down a little bit and we have a lot of companies that are in sectors that were affected were clubhouse users. So travel companies and advertising companies. Sort of early on in March and the beginning of April, we saw some contraction there. And since some companies churning and going out of business. But since then, because of everything that's happening and because every team is now a distributed team, we're seeing a lot of, a lot more interest and a lot of teams really looking for better tooling. And you know, to the question earlier of, you know, how do you run a company in a distributed environment? I think clubhouse for a lot of teams has really been a big part of that. And if you historically were using post it notes on a wall or a simpler project management tool, a Trello board, something like that, to manage your team, I think a lot of teams are realizing that things were partially being done there, but a lot of the work was actually being done in those little conversations that were happening in the office and back and forth. And a lot of companies are realizing they need better tools, tools that makes it easier for their people to communicate and build better things. So we're seeing a lot of companies try clubhouse ramp up and really move forward with using it as their main tool for building product. And that's really exciting for us. We're seeing acceleration and a lot of companies jumping on board.

And are you investing in the product any differently in response to the environment?

I think we're accelerating more of the investment in just this communication across the entire company. And that's always been our vision and our goal.

And.

And then the other thing that we're putting a lot of effort into right now is really building out the reporting side of things and letting teams know what's going well, what's not going well. I think we're seeing because again, teams are not together all the time and not communicating in person. People are having a hard time really understanding what their teammates are doing, what they should be working on, whether things are going as planned. And we want to make it easy for, for teams to really see how their bill is going and whether they're becoming more productive over time or less productive or where the bottlenecks are really putting a lot of effort into building out the reporting and making it easy for teams to see how they can keep improving.

Got it. You and the clubhouse team decided to go all in on distributed work, at least for the time being. We talked about at the board level recently dropping the office lease. Like, how did that happen?

Yeah, I mean, for us it was relatively easy given that we were already so distributed beforehand. And when I went back to my team in New York and said, does anybody here want to get on a train and go to an office. Every single person said no. Especially in the New York area, there's some special constraints around. If you put an office in Manhattan, a good number of your people are going to get on a train from New Jersey or Connecticut or even Brooklyn to get there. And nobody's comfortable doing that right now. So it's not like driving to an office or, you know, heading to a suburb somewhere to work. Like, we have a different set of constraints. And I also think from everybody I've talked to, like, things are working really well. Like, we, as an organization are more productive. I try to do a good job of telling everyone, you know, not to work too much. And we try to do a good job of making sure people separate, you know, their home life from their work life. And, you know, I think some people do a good job on that. Some people are still working too much, including myself at times. But, you know, I think it's a thing where we see productivity is really up. I think people are actually saving a lot of time on commutes. If you haven't done that before, like, you know, it's. It's really great. And people realize, you know, I get a couple of extra hours in my day, which I can use to work or I can use to, you know, do other things. See my family more, you know, be at dinner every night. Like, things that happened a lot less, I think, before COVID hit are now, you know, accessible again to people. So for us, we gave up our office. We packed up everything there in storage. And, you know, there may be a day where we have an office again in New York, but even that day will be, I think, significantly less people. People will be there than before. And people will be there two, three days a week. It'll be more of a I gotta get away and come to work, or there's like a special meeting, or we're gonna fly in one of our distributed teams, and they need a place for a week to work on a big project or synchronize on things. I think that's the hardest part when you need that sort of four days in front of a whiteboard with your team to really just work through really hard things. No one's come up with a good way yet of replicating that in a distributed manner. And that would be the reason that we would ultimately have office again. We could get people back together in the office for things like that.

So some collaboration challenges still to be solved there. And it sounds like you feel like you've got a pretty good productivity engine. In general and things are in a good cultural place already. Are there a second or third order effects of remote you're thinking about now, given you've got the basic thing working?

Yeah, I think there's a few. One of the big ones is if you don't have an office, people can really live wherever they want. How does that sort of change things down the road? And I think for us we've been very clear. If you are traveling somewhere else or going somewhere else and you're going to be working, it's not a vacation. You need to have your computer with you, you need to have a good Internet connection, you need to have space away from everyone else to work. And I think some things like that can be handled. And the obvious next concern there is time zone differences and making sure people have overlap in their working hours. And this is something honestly that we've struggled with and I think gotten better about over time. Originally, as we started to be distributed, a person who worked for us moved home to Melbourne, Australia and that was 12 hours offset from New York. And that really, I mean, he was great. He worked a lot of really late hours, worked overnight hours to sort of synchronize with us a lot of times. But for half the year, when daylight savings time flipped in both directions in both places, it became really, really hard. It went from 12 hours to 14 hours of difference and it was really hard to sync. And then your feedback loops get really long. So I think for us, like figuring out sort of like what the time zone overlap is and how to have sort of synchronized work hours across the company where everyone's available, you know, whether you're in California, whether in, you're in New York, whether you're in Europe somewhere, you know, how do you make that happen? So you can have sort of a town hall meeting or all company meeting or even, you know, engineers from California to Europe meeting. Right. Like there's only very limited hours of overlap there. So that's something I think that companies are going to have to work through as they think through this more. If you're looking in New York, you're looking in San Francisco. You say you're a remote company. People are going to scatter all over the world. Like, how does that work? And you know, how do you get ahead of that to make sure things sort of sync up and you're in a good place on that so you can continue to function, function as an organization.

What advice would you have for early or mid stage entrepreneurs navigating this time?

Number one is focus you should look at what you were doing before March and sort of cut out half of it just to make sure you're sort of looking at things from the right way and then you can sort of expand back from there. I think we looked at everything we were doing and said, is this core to growing and surviving as a company? You know, we're in a good place, we're growing quickly and, and we have great investors and a lot of money in the bank. But I think a lot of companies that I talk to, we're going to go out fundraising or having a hard time and, or are trying to figure out sort of where to go. Their businesses are hurting. And I always say focus on sort of the core thing that, you know, is most important and, you know, really watch your cash flow. It's an interesting time and cash is going to be, is king more than ever and make sure you've got the money to do what you need to do to get over this hump and get out of the other end and really grow quickly after that.

I think all of the shapes of recovery have now been explored by the financial markets. But I mean, even on our board or I'm sure in company leadership teams everywhere, people have been talking what is the shape of the recovery? And it's really challenging to plan in this time because to your point, how you invest and how you manage cash really depends on how you think your customer base is going to do. Right. So any other thoughts on planning or how you're thinking about it when the future is so uncertain?

We have sort of even dropped the term plan internally. And just think of things as projections and you want a bunch of different projections based upon things that could possibly happen. You got to have somewhere in your back pocket your worst worst case scenario. Like what's the worst possible thing that could happen, you know, and turn those knobs all the way down. Like what if your sales plan was X and X goes to zero? Like what does that look like for your company? And just be ready, you know, make sure those plans have been built and have been thought through and then you can put them sort of behind glass and break that glass in case of emergency. But you should be ready for that and not so scrambling to figure out what to do if something like that happens.

Sounds like sage advice. And how about how your team is interacting with customers on the marketing sales success front? Anything you can share there?

I think one key thing that we've built that we didn't have before is a set of really first class importers. From other tools. And I think that's really opened the door to a lot of these teams that, you know, might have been looking for a better tool, might have heard of Clubhouse, but had a real investment in in something else. And, you know, since we rolled those out and especially since everyone has been distributed, a lot of the sales and success work has turned towards expanding throughout existing organizations by importing their other tools that, you know, may not have been working as well. And on the sales side, really starting instead of at ground zero, starting with the historical work that they had and doing an import and really showing people the power of Clubhouse and both how easy it is to use and how much better it makes even what they had an existing tool somewhere else easier to use and easier to have a conversation around. So I think from that side, we've seen a lot of uptake there, and it's gone really well so far.

So last couple things we're going to ask you, Kurt Quick takes a lot of time on your hands in this shelter in place period when you're not working on Clubhouse, a content recommendation, a book, movie, tweet, anything.

I actually went and reread a book recently. It's called Shoe Dog. It's by Phil Knight, who founded Nike. And it's a really good book about building a company, about entrepreneurship, about all of this sort of, I think, messiness that happens when you're building a company. And really taken from a really realistic view where, you know, he says, and here's another time when we almost went out of business and I had to go beg the bank for a loan to get things moved over here. And, you know, this partner, I knew they were going to screw me over. So this is how I got ahead of the game. And it's just really interesting to see, you know, someone who just knew what he wanted to do, knew the company he wanted to build, you know, work through things. You know, he says a lot of times in it, you know, I never really believed in marketing. And, you know, people kept telling me we needed a market. And, you know, when you look at Nike now, it's all marketing. And, you know, it goes up through, I think, the first Nike Airs, when they really started to go from sort of a small company until the world's largest footwear company. So you learn the entire history and sort of all the backstory there. It's super interesting to just see, especially from if you're a CEO, if you're running a company, if you're founding a company, to see a real story of how Hard everything is and all the messiness that's involved there.

I agree, it's an extraordinary story and it's so hard to picture with Nike being so dominant today how unlikely it was that they were going to survive and eventually win in the way they have. Okay, shout out. What is one way someone on your team has stepped up during the last six months?

A lot of people have really pushed us forward to be better and be better at distributed work and build things better. I think everybody has, there was some learning for everyone as everyone went fully remote. I think I want to give a shout out to a person on our team. Her name is Christine Cha. She is a front end engineer for us, helps run a squad for us. But on the other side of things, you know, not just Covid, she's really pushed us as a company to get better on the anti racist side of things, to improve on the D and I side of things. Like it's always been important to us and I think we've done an okay job on it but I think we, we're getting better and better and really working hard on that and we've taken some, some really positive steps there to improve as a company. And just like I said earlier, I think if you get a bunch of diverse voices across an organization when you're building a product like it helps a lot. And the same thing I think from where I've sat, the more diversity you have when you're building something, the better. And that's something we've been working a lot on and she's really pushed us a lot on that and helped us as a company with ideas and we've tried to take real concrete actions to move forward there. So on top of all of her normal work, she stood up and really pushed us on that. So I'll give a shout out to Christine for all the work she did there.

Awesome. Thanks Christine. And last one is a discovery. Anything weird you've learned about you, yourself, your family, your team as you're stuck at home.

You know, first of all I have a 4 year old daughter and I've been working so much trying to get through all this, figure things out and you know my wife Jen has been awesome at, you know, really covering a lot of the work there and helping sort of keep the earth from spinning off as axis sort of in our family life. So I gotta thank her, I can't thank her enough for that and has really helped, you know, free up the space for me to continue growing clubhouse and figure out how to keep running the company while still she has her own job and she's a product manager at another company and you know, has all the work to do there. But. But really has been, you know, sort of holding everything together with figuring out kindergarten and all the exciting things that I think a lot of us are thinking about right now. And then I think the other thing I've discovered is I realized a couple months ago that we've been living at my parents house, at the house that I grew up in, something I never thought I would say again in my life. But I personally realized like I hadn't been working out, I was kind of going insane. And I started running and I've always kind of hated running. I used to be a competitive swimmer, I used to be a competitive downhill skiing racer. I've ran a lot of triathlons and I always hated the running part. And for whatever reason, I guess I like running now because I've been running a lot more. And in. In July already, today's July 21st when we're recording this, I've already run more miles than I did for the entirety of 2019. So I've always been sort of a go run a few miles here, run a few miles there. And I realize it's helping me sort of stay centered and really focused insane on a lot of levels. So that was an unexpected thing to have happen where I've just sort of ramped up and now sort of use it as sort of my escape.

That's great. Shelter in place has convinced you that you finally like to run.

Yeah, I think it helps that I'm in the middle of nowhere and I can run without a mask too because if I was at home in Brooklyn, I think things would be a little different.

Kurt, thanks so much for joining us today. This is great.

Thank you for having me.

Okay everyone, that concludes this episode of Gray Matter. We've talked about how the pandemic has been a forcing function for Clubhouse to address issues around semi remote teams and for communicating focus across the company more tightly and how what we need now is for our systems of work to step up to be not just task management, but spaces for conversation. Next up, I'm incredibly excited to talk with Dylan Field, co founder and CEO of Figma. Find our episodes wherever you get your podcasts or get episodes and blogs on our website greylock.com and on Twitter reylockvc. I'm Sarah Guoa and thanks for listening. We hope you are all keeping your earths from spinning off their axes at home.