by Y Combinator8/18/2017
Wade Foster is the CEO of Zapier (YC S12).
Read Zapier’s de-location post here.
If you are interested in remote work, you can also check out our interview with Gitlab.
Craig Cannon [00:00] – Hey this is Craig Cannon and you’re listening to Y Combinator’s podcast. Today’s episode is with Wade Foster of Zapier. Zapier did YC in the summer of 2012 and this year they got a bunch of press for their De-Location Package. That’s basically a $10,000 offer to new employees that live in the Bay to move somewhere else. We talk about that in this interview, we talk about remote work. The whole team at Zapier is remote. We also talk about Wade’s interest in racquetball. If you need any tips, you can skip to the end. As always, we’re going to post the YouTube video and transcript at blog.ycombinator.com. Please remember to rate and subscribe to the show. Alright here we go. I haven’t started with questions from Twitter before, but I feel they kind of covered some of the initial ones I wanted to go off with. So maybe we should just go with those.
Wade Foster [00:47] – All right.
Craig Cannon [00:49] – The first one was from Ben Thompson and he asks for more detail on the Pay-to-Leave San Francisco.
Wade Foster [00:56] – Oh yes.
Craig Cannon [00:57] – I think you guys called it de-location?
Wade Foster [00:58] – Yeah.
Craig Cannon [00:59] – How’s it going?
Wade Foster [01:00] – Well we introduced this de-location package, I think it was in March and the concept for those of you who aren’t familiar was if you’re in the Bay Area and you take a job with Zapier we’ll pay $10,000 to help you relocate to anywhere, or as we call it, de-locate. This was an idea that one of our engineers came up with because we’d seen in interviews with folks from the Bay Area they would come to Zapier because we’re 100% remote and say, well I’m interested in you all, in part because I like the product but also because you know this remote thing helps me get away from San Francisco because I’m either disenfranchised with, you know housing costs here or I have family somewhere else that I’d rather be living with or I just want to be somewhere else, you know a whole bunch of reasons, right. And so what the engineer on our team kind of hypothesized is, well maybe there’s this nascent demand here in the Bay Area where folks who are kind of just putting up with it because this is where the jobs are. And he’s like there’s probably some folks who are kind of on the fence, if a good opportunity came along, they might be willing to jump on that. But maybe they just need a little bit of a nudge to go do this sort of thing. That’s where the whole idea of this de-location package came, it’s not that crazy. Plenty of companies here in the Bay Area even will pay relocation costs to help you move here. We’re like let’s just turn it on it’s head and say, we’ll help you move anywhere, right. We launched that, I think it was in March, and the funny thing was since then we’ve seen probably about, roughly about a 30% increase in applicants to Zapier.
Craig Cannon [02:36] – Wow.
Wade Foster [02:37] – Pretty significant. Our roles routinely get 100, 200 applicants, some roles we’ve even had I think our record is 1,500 applicants for one open position.
Craig Cannon [02:48] – And it’s signal, like those are like 30% increase in high quality candidates.
Wade Foster [02:52] – Yeah, just across the board. And one of the interesting things we noticed was the applicants weren’t actually from San Francisco. A lot of them were just from where ever the heck they were and so it was clear that the offering got some buzz in mainstream media and so it just elevated the profile of Zapier. Folks were like, even who weren’t in the Bay Area, were like just seems like a cool company. They have the same types of values that I have, they are working on an interesting product and so we got a lot of great applicants from outside the Bay Area again. We’ve actually hired about 15 folks since then and only one person from the Bay Area. She’s in the process of mulling over whether she wants to take it or not. We actually haven’t offered any, because we haven’t hired any folks from the Bay Area yet.
Craig Cannon [03:40] – That’s crazy. Have located anyone to the Bay Area through it?
Wade Foster [03:43] – No one’s moved here, so we’re way up.
Craig Cannon [03:46] – That’s really funny. Do you guys ever do relocation’s other than this current thing?
Wade Foster [03:51] – No, not generally. Most folks are where they want to be or they’re heading that way anyway. That’s kind of the beauty of remote work is that you don’t have to live in a place just because that’s where the jobs are. You can live in the place that you want to be because that’s just where you want to be. You know you’ve got family there, you’ve got friends there, you’ve got a life there, you’ve got a hobby there. You just want to explore the area because you’ve heard cool things, like it doesn’t matter what the reason is you can do that.
Craig Cannon [04:19] – How often are you actually interacting with, how many employees do you guys have?
Wade Foster [04:23] – We’re at 95.
Craig Cannon [04:25] – How often are you interacting with, you know a significant percentage of them in person?
Wade Foster [04:31] – Well, in person we do, so we do this thing called AirBnOnboarding, which when we hire folks within the first month, we actually do like to have them spend a week in person out here in the Bay Area. So we’ll rent an Airbnb, we’ll bring their manager out here, them out here and then spend a week working alongside them. Generally it ends up being like anywhere from a half-dozen to a dozen folks out here at a time. It works really nicely because the founders are all here, so we get to sit down next to them and even, you know the 95th person in the company, we get to know really well. We’ll spend the night, like take ’em out to dinner, we’ll play games with them. We’ll talk to them about why their role’s important at the company, like why we’re happy that they’re here. Yhey get like a full week with us, which is like pretty rare at, you know once you pass like a certain amount of employees like you maybe will do like a lunch with the founders, like right out the gate, but it’s not that much time. We actually like really spend a lot of time with them, you know within that first month, for those first folks. We do get to spend like a fair amount of time with a subset of folks, every month, so basically a week every month, I’m spending some time, in person, with a few people on the team.
Craig Cannon [05:45] – Do you think that your success as a remote team is a function of you starting remote or do you think you could have shaped into that?
Wade Foster [05:54] – It definitely helped a lot to have started that way. It would be pretty tough to transition any sizable team to a remote or partial remote setup because there’s just little cultural habits that you get into that are, that make remote kind of successful. We started Zapier as a side-project, side-projects naturally, you don’t have offices, you just work on them when you can. Which is not necessarily in person, it’s at a coffee shop or your house or whatever, right. We got used to working through pull requests and on Trello cards and in chat and in things like that. Yhat built up kind of our organizational muscle for documenting things, writing down processes and stuff like that. So then when you hire folks on, they’re able to adopt that stuff. When you’re in an office, up to a certain point you can kind of ignore that stuff, because you have the option of tapping someone on the shoulder and being like hey, you know what’s the command that I need to do for this again? Why is this not working, can you help me? You know whatever it is you need help with you can just pull folks into. But for us, if you’re working with a teammate halfway across the world, that’s not an option, so you kind of have to get good at like hey, here’s the read-me for this stuff and make sure that’s all up-to-date and working pretty well. I think had we of started you know, 10 people in an office and then added remote folks, we certainly could have gotten there, I know companies that have done that, but I think it’s just that you have to unlearn some stuff and then relearn it a different way whereas we just learned it that way from the get go.
Craig Cannon [07:31] – Was there a point at which, you guys were scaling up and you were like, oh we’ve entered a different class of remote team size and we have to handle things differently?
Wade Foster [07:41] – Yeah, definitely and it’s not too different I think from even co-located companies have those inflection points too where you’re like we need to change some stuff up, ’cause it’s not working. For us there’s about three of them where we’ve kind of had to really, not reinvent ourself, but start to rethink a few things. The first one was around 20 people which was up until that point, I was the sole manager, but not really management. When it’s less than 20, everything kind of self-happens. Me and Bryan and Mike, my cofounders, were just kind of making sure things happened. But once we got to about 20 or so, it’s actually there’s starting to be some coordination overhead, we need to think about maybe what a little bit of a management structure starts to look like. And so Bryan, Mike and I started really sharing those roles around there in a little more formal manner. Then at about 40 it got, 40 to 50 or so, it got even more complex and we added more managers and then that was the first time where I was solely managing other managers. That was an interesting transition as well, you know the folks that were primarily hiring people and onboarding folks were not necessarily me anymore. And a lot of times it wasn’t so that was kind of a shift.
Craig Cannon [09:07] – How does that work then? As a remote manager of managers, what are your pro-tips, having done it for several years now?
Wade Foster [09:15] – You really need to set the values of what you’re company is going to look like. The high-level things that you care about. You know for us it’s folks who are default action, get stuff done, because you know there’s not someone sitting beside you to help you out. That’s a big thing, we like folks who are good writers and can be transparent, ’cause that’s really important in a remote team. We like folks who have a lot of empathy and are really good, just helpful people because you’re working in Slack and in text all day. You need to be able to empathize when maybe a sentence doesn’t come off quite right, or whatever, you’d be like, oh, I trust that they had good intentions here, this wasn’t meant to be, you know, harsh to me or whatever right. Those are important values that we have that lend themselves well to remote environments. Once you have that stuff set in place you have to adopt some sort of management paradigm on how you approach management. I think a lot of companies, at least in startups they try and reinvent the wheel here. I think it’s not probably a great idea, especially if you’re growing really fast, there’s a lot of good, scientific backed research on how to be a good manager, go find the good stuff and learn that and just kind of just cargo cult adopt that in your organization because it’s going to be way, you’re going to have way less problems than if you tried to come up with your new inventive management structure, alongside this other new inventive product, market the thing that you’re trying to bring to market. There’s this podcast called Manager Tools and they have a paradigm and we basically just said, we’re just going to use their philosophy on how they go about stuff because it jived, 95% of it jived with us, so we were we’re just going to use what they have and that helps get all the managers that I was working with, I knew that they were following a similar process that I would be following with folks. That kind of raised the organizational baseline for your experience at Zapier is going to be at least this good. You might get a manager that’s above-and-beyond and way better, but hopefully we don’t have any managers that are just bad, like really, really bad. We wanted folks to be at that baseline and so we make sure they go through the training that they need to have and kind of understand the values and how we apply them and all that sort of stuff and then that helps for me, who’s not managing managers, I can kind of know that they’re doing, following our guidelines and stuff that.
Craig Cannon [11:56] – Now that you’re approaching 100 people do you feel that there’s another inflection point coming?
Wade Foster [12:04] – Definitely so. We started hiring probably… Our default is to, we like to promote folks from within. Historically almost all of our folks who’ve moved into management positions have been working at Zapier for you know six, 12 months, a good chunk of time. Which helps them learn the culture but they also know the product and the role and everything really, really well. Downside is you know they’re a new manager so they have to learn some of that stuff but that’s not unteachable stuff. Now we’re at a point where occasionally we don’t have someone ready to promote up and we have to hire in a new manager, that’s a new challenge for us now because you’re bringing in someone who’s going to guide a function or a set of people who you know primary experience is at other orgs, which is not necessarily bad thing, they bring in great outside perspectives that have been helpful, but you also have to teach them the org while they’re also trying to teach, other, train and coach other people in the organization as well. That’s an interesting inflection point as well.
Craig Cannon [13:12] – Okay, and you’re going through that right now?
Wade Foster [13:14] – Yeah, we’ve brought on a few you know outside management folks now. And you know it’s going pretty well but there’s like anything, there’s things that you got to keep working on.
Craig Cannon [13:27] – Ben asked a multi-part question. Many of these questions were common across Twitter. They want to ask you about raising money. You guys are famous or infamous for doing YC, raising some money and then never raising money again.
Wade Foster [13:46] – Yeah.
Craig Cannon [13:49] – I’m going to combine a couple questions here. Another person, Matt Sherman, who actually wanted you to come on the podcast, from the outset, he basically said, “Why did you guys choose to go into YC if you weren’t planning to raise a lot of capital after?” And maybe you were planning to and you didn’t decide?
Wade Foster [14:11] – Yeah, well the primary reason we did YC wasn’t for the capital. The primary reason we did YC was because we were from Missouri, relatively unknown and not well connected into the broader tech ecosystem, particularly for our product which is integrations with other SaaS companies. We were building a lot of those relationships from scratch and YC kind of helped us, well we were just able to plugin to an existing network, basically. For us the network was really valuable because you know then when we went into partners at least there was some thread, somebody who said like, oh yeah, we know this team, this company, like they’re pretty good folks, like you should chat with them. Even when you’re really, really small like we were at the time, and no one really had any sort of reason outside validation reason, to believe in us other than like, hey they seem like they’re building a cool product, right. For us that was the primary reason for doing YC. The money sure, okay it was nice right, but you know I don’t think that was the primary reason for us doing it. And then you know afterwards we did take a little bit of money because when you’re just getting started, things cost money and if you don’t have anything and you haven’t figured out a business model yet. And if you’re going to be living in the Bay Area, which we felt we wanted to try and stick around a little bit because to help build up those relationships, it’s just really freakin’ expensive to live here so a little bit of money helped us kind of get past those early days when you know we just weren’t pulling in that much revenue.
Craig Cannon [15:48] – And you guys were priced a little bit differently. You started out charging people and then you went freemium, right?
Wade Foster [15:54] – Yeah.
Craig Cannon [15:54] – And so that was a function of the money as well?
Wade Foster [15:56] – Yeah, that allowed us to do, yeah, at least try for freemium and see if that was a model that would work. Which, if you aren’t doing it, freemium’s a bad idea, generally for bootstrap companies because you’re going to have a ton of support for users who don’t pay you anything and if you’re not getting any money from them it’s going to be really hard to bootstrap, so yeah it allowed us to experiment with the business model a little bit.
Craig Cannon [16:23] – Okay, so why did you choose to not continue to raise money?
Wade Foster [16:26] – I mean we never needed to, is the pragmatic answer. And it think we’ve always taken a very pragmatic approach to fundraising. You know a lot of people have this you know it’s well it’s either bootstrap or you know it’s VC and there’s some identity involved in it. Which I think when you start to put your own identity and well I’m a bootstrapper, I’m a VC thing, that starts to affect your decision making in ways that are probably not healthy for your company and it’s just better to look at money and fundraising generally as a tool, it’s a tool in your tool belt that you can use if you need it. If you don’t need it, you don’t need it, you shouldn’t have to use it. That’s how our approach to fundraising always was, was it’s just a tool to help you if you need it, if you don’t need it, then why take on the dilution. For us, we were able to figure out the business model and our growth rates were working just fine and we’ve never been hindered by our ability to spend capital, we’ve always felt like we’re spending at a rate that was comfortable for us, so bringing in more capital wasn’t going to change, fundamentally change our ability to grow the company, so we always just said well, we’ll just keep growing it how we’re doing it.
Craig Cannon [17:41] – Then I imagine you get a lot of questions from people who are like, should I raise money? Should I not raise money, what should I do? What are your, do you have a mental model to advise people on that?
Wade Foster [17:52] – It’s a pretty personal decision to me the answer is generally, what is the business market you’re tackling right? There’s some products that yeah, probably going to lend itself more towards that, you know pure enterprise plays, sometimes take a little while to develop it and you’re going to need more capital, out the gate. Things that require inventory or infrastructure, things like that are going to be capital intensive so sometimes fundraising is really just a function of the market you decide to go after. That plays into it, but then also it does depend on how you want to go about things. You can be a successful bootstrap company and be the winner of your market. If you look at something like MailChimp which haven’t raised a single dime they have dozens of well-funded, super-well funded public companies that are direct competitors and still MailChimp takes it home as the winner of that market. There’s a lot of these phrases that people say, oh winner-take-all market, you better raise a bunch of money. That are just kind of untrue, you really need to look at your market and just understand it really well. Fundraising can help you create a moat, but usually it’s not why you created a moat. Having more money doesn’t necessarily make the moat it is a tool to help you figure out what is the moat that’s going to help you build your company. And if money isn’t the thing that’s going to help you do it you need to figure out what is going to help you kind of build your moat and help you grow your company.
Craig Cannon [19:23] – How do you better, I mean define a winner-take-all market,
Wade Foster [19:29] – Sure.
Craig Cannon [19:30] – Versus why was MailChimp you know possible?
Wade Foster [19:32] – Well so MailChimp isn’t in a winner-take-all market, right? There’s not a network effect, that you know MailChimp doesn’t get better because there’s more MailChimp customers, right? Winner-take-all markets tend to exist where the product gets better because there’s more customers and this often happens in B2C markets, so you know Google gets better because more people use Google. Facebook gets better because all your friends use Facebook. Those are classic example of network effects really helping the product get better and the business model doesn’t really work unless everybody is kind of using it. Whereas in B2B, it’s pretty rare to have true winner-take-all markets. If you’re making yet another CRM company you know there’s dozens of CRM companies that are very good CRM companies that compete with each other head-to-head and are all successful. And they’re going to continue to grow and be successful and that’s pretty much how it existed B2B, because it’s very tough to build true network effects in B2B. So if you can find a way to have a B2B company that has true networks effects, that’s probably going to be a pretty special thing.
Craig Cannon [20:39] – Okay.
Wade Foster [20:41] – And it’s worth trying to figure one out, but it’s not a necessity to build a good company.
Craig Cannon [20:46] – And so looking back on kind of using YC as a vehicle into the Bay, was that helpful for you or?
Wade Foster [20:54] – Yeah, definitely. You know I remember early on we had a relatively big company that we were trying to build a partnership with and they had a bit more bureaucracy and hoops to jump through to build a partnership with versus a lot of the companies that we were working with at the time and you know we just kind of tried to go through their typical front, you know they had an email or a contact form on their website and we filled it out and we were just not making any headway at all that way, it was just you know, I think we got in touch with one of their front-line people and they just didn’t understand what we were doing or why it even mattered. And you know kind of just set us to the side and then we tried another angle. And it just, just things weren’t happening. And then when we got in YC one of the first things I did was, you know email the folks and PG was like, oh yeah, we can help with that and found a company that acquired like their CEO and li I had an intro to a high-level VP, like in two days and you know that week, it was oh yeah this is great, we should definitely be doing something with this. So you know those relationships clearly matter in business and YC had already tapped in and kind of setup it’s own and it had connections into the broader tech ecosystem and you know helped us plugin and be successful because those existed.
Craig Cannon [22:11] – What do you advise founders who are starting companies, you know in Missouri, in Florida, you know in other countries, yeah, what do you tell them, what are your tips?
Wade Foster [22:21] – Well I think you know the biggest thing is similar what you all preach, all day, every day, which you know, make something that people want, right? Figure out you know what it is that people want, figure out what they’re going to pay for and just make them incredibly happy. You don’t necessarily, well there’s nowhere, like there’s so many companies that are successful that are outside the Bay Area that I think if you’re getting caught up in, you know if people are telling you you have to be in the Bay Area to be successful, you should probably be a little more critical of that advice because it’s, there’s so many examples that are just, like that not being true. Pay attention to the fundamental things that make companies really good which is good products, happy customers, and working really hard and getting a little lucky. Those are generally the four things if you do those pretty well, you’re going to have some level of success, you may not be a breakaway success because a lot of that stuff depends on timing and more luck and market factors and things like that, but generally if you do those four things you’ll be successful. Some companies may be more successful in the Bay Area, because of unique factors for that company but I think those are fewer and far between than most companies.
Craig Cannon [23:37] – It seems to be more of a psychological thing, right? Cause people have this somewhat of an imposter syndrome where they’re like, oh we can’t be that. But in reality most companies aren’t venture backed anyway.
Wade Foster [23:49] – Yeah, well and I think one of the things that you know perpetuates this myth a little bit is just kind of the way the media cycle works is, you know the media tends to write about companies that they think are doing great it’s very difficult for the media to get access to real, factual data, like revenue numbers to know which companies are doing great and so they end up having to rely on proxies for that. And a good proxy often is you know, where is the venture-funded companies happening. And venture-funded companies tend to happen closest to where VCs happen to live because they don’t like to travel that much to go fund companies. And so that tends to be Bay Area companies and so the media ends up perpetuating kind of this myth that the great companies are in the valley. That’s obviously I’m you know there’s a lot of stereotypes involved there. Sure, sure. That’s not universally true, but on the whole that happens quite a bit. And you know a young founder, some one who’s a first-time founder, you know for them they don’t have that filter to understand sometimes, what is good advice versus what’s someone perpetuating kind of a myth.
Craig Cannon [24:57] – Has being here changed your product all that much? You guys started up basically consulting for other people, you were doing these integrations by hand and then you were like, oh, what if we just made it easier for every one to do all these integrations.
Wade Foster [25:10] – From a product standpoint, no, it’s not changed it.
Craig Cannon [25:13] – Okay, and so what has changed since being here?
Wade Foster [25:15] – I mean those relationships, right. We mentioned the YC connection, you know for getting in with that partnership with a big company, that was nice. We’ve been able to build relationships with you know founders of our partner companies a lot easier. That was more valuable early on, but as we built a brand and got to a place where we had a bit of success that stuff came to us naturally. At this point in time, like you know I could be in the Bay Area or I could be somewhere else and it just really wouldn’t matter too much.
Craig Cannon [25:50] – How do you guys think about competitors? You’ve said you know, you could’ve built this company without necessarily raising any money. Yep.
Wade Foster [25:59] – That means other people might be able to jump on and do the same thing, right?
Craig Cannon [26:03] – Yeah. What do you guys look out for?
Wade Foster [26:05] – I think the biggest thing is figure out what your competitive advantage is and find ways to lock them out. So for us, you know, we have the most integrations of anyone and most of our partners are building the integrations for us and so that kind of builds a bit of a moat for us in that you know, if you want to build a head-to-head competitor to us you need to find a way to build as many integrations as we have. You know or you need to find a different way to attack us, like coming head-to-head wouldn’t be the way to do it. For most people it’s figuring out what it is that makes you the reason why people choose your product. What is the reason that the choose your product and use that to help lock out other folks and make sure that you are indeed the best product and value on the market for your customers that you want to serve.
Craig Cannon [27:02] – Right. Where do you see your product evolving so it continues to have a wider moat?
Wade Foster [27:07] – Well, for us, our best customers have been in SMB, and so we’ve done a really good job there. Now we’re working a lot harder on, you know we launched a Teams Product in March and so we’re starting to figure out what are the things we need to do to help expand our adoption inside of Enterprise companies and things like that. ‘Cause the needs are, the core product works for them, but there’s extra needs that are important in enterprise products and stuff like that. Those are things that we start to think about.
Craig Cannon [27:37] – How do you explain it, to a small business, if you have someone sort of technical on the team it’s pretty easy to get like, oh okay, this is what Zapier does, right? If you’re selling to a giant company, how do you have to explain it to them and who do you explain it to, to get them to buy it.
Wade Foster [27:54] – Well that’s tough, this is where you know having a product that solves a very specific problem helps and this is where the freemium business model helps a lot because people can self-serve, try out your product, figure out what they like about it and then you can use the person who’s already adopted it as a way into your organization and they can be your champion for you. And that way you don’t have to be cold-selling into orgs, instead you have a warm person on the inside that’s basically saying, “No, no this is great, we should adopt this, this is exactly what we need.” I think that’s where you know freemium really does excel, if you can make, pull it off, it will help you get that early adoption into organizations that can then pull you across the organization as well.
Craig Cannon [28:38] – Conversely what’s been difficult about getting into these enterprises?
Wade Foster [28:43] – There’s just a lot of bureaucracy around it, right that you have to learn.
Craig Cannon [28:47] – Yeah, it’s the same old…
Wade Foster [28:47] – Yeah, it’s the same old stuff, you know they have purchasing departments and they have a process that you have to go through and there’s just you know, a lot of boxes to check, more or less is what it boils down too.
Craig Cannon [28:59] – Right. Okay, Matt had another question, it’s another location question actually. So, “What advice do you have for a founder who’s building a billion-dollar company in a city where no one is done it before?”
Wade Foster [29:16] – I mean the biggest challenge, I mean this is tough for me because I haven’t built a billion-dollar company either. My instinct is that the thing that you’re going to struggle with maybe is as you’re scaling past that mark is does that city have enough talent to support your organization? That can be a real challenge in smaller cities across the United States, is do you have, is there enough technical talent? Is there enough sales talent? Can you train, if not, do you have effective training programs in your organization that can take, you know ambitious folks and get them trained up on your product and turn them into people who can be effective in your organization. Because when you just look at the unit economics of a town that’s maybe, you know, 100,000-200,000 people, like that’s just not that many people and a lot of them are maybe not necessarily going to be in the industry that you’re in so as you get to a billion-dollar organization you’re going to need a lot of people to help you and is there enough there. I think that’s probably the biggest scaling challenge that you might actually just run into if you’re the first in a city of a billion dollars, or a billion-dollar company, is there the talent there?
Craig Cannon [30:31] – How do you manage, I mean really, how do you manage training people up, remotely? Because you have kind of the pick across the whole world do you instead focus on hiring more experienced people or do you grab younger people and bring ’em up?
Wade Foster [30:48] – Our preference has definitely been, historically, to just work with senior folks, we just hire the best that we can for different roles. But you’re going to find even still, you’re going to hire ambitious folks who want to get better and want to take on new challenges and so you’re going to want to find ways to handle that. For example, we hire ambitious folks into our support team who often have experience and are senior for that role, but often times they still have even bigger ambitions still, so you know one of our guys who just recently joined our platform engineering team, started in support and he had ambitions to do that and so we made sure that you know his manager knew that and that we made sure an engineering manager knew that and we kind of had a plan, like okay, well here’s the tactical skills you’re going to need to learn, here’s the things inside the org that you can, when you see these opportunities go make sure that you’re the first person you know trying to tackle these things and helping out with these things. Here’s the things external that can learn on your own time that’s going to make this stuff a little easier for you. These are the benchmarks that will let you know you’re ready to make that jump. Basically we just worked with him to figure out here’s the plan that you need to set up and you know from there it’s kind of on the person to you know go make it happen and he was able to make it happen and joined our platform engineering team earlier this year. That’s just a discussion you need to have with every person that’s on your team, is just understand like hey, what are your career goals? What do you want to achieve while you’re here? Are there skills that you want to pick up? Are there you know areas of the organization that you want to have an impact on? And then as a manager, figuring out, like okay, how can we make sure that this person has an opportunity to tackle that stuff in a way that aligns with the projects that we need to make the organization successful?
Craig Cannon [32:36] – Is that public in anyway within the organization? Like these are your goals and objectives for this year.
Wade Foster [32:44] – We haven’t gotten super-rigid about OKRs or KPIs or things like that, we do have them, but they’re you know, each manager talks with the person our their team and they, you know directly, and sets it up kind of for them. They’re a little bit fluid and we’re working on solidifying a process for that, ’cause I do think it’s a good idea.
Craig Cannon [33:07] – Every thing seems to have to be clearly communicated and logged, right? It doesn’t slip between the cracks because you know say I’m going for one thing and you don’t know it, and maybe my manager’s cool with it, but you’re like why is Craig doing this stuff?
Wade Foster [33:22] – Yeah, he’s off here in the corner right?
Craig Cannon [33:23] – Yeah, totally.
Wade Foster [33:24] – What’s this guy doing?
Craig Cannon [33:26] – Yeah, so you’re still working on that. How does that all affect retention? Do you guys have, how does your retention benchmark to you know like a tech company out here?
Wade Foster [33:36] – Our retention’s incredibly high, so we actually just ran the numbers last week, we’re like 97% retention over the last 12 months.
Craig Cannon [33:46] – Okay.
Wade Foster [33:47] – We started doing an employee netpromoter score and it came in at like 72, which is pretty world class. Working on your organization is a really, really important thing to do because past a certain point you aren’t going to be the person that’s building the product and getting things done. Sure you’ll provide a certain amount of vision and direction to make some of that happen, but a lot of the actual work is being done by other folks in your organization, so you really do need to make sure an invest in them and you know put them up in an environment where they can be successful. That’s primarily a lot of what I try and work on, is to make sure we have the right people in the org, that they’re working on the right things and that they have the right plans in place for them to be successful just as people too.
Craig Cannon [34:47] – Then how do you keep track of the happiness of people on a day-to-day or week-to-week, month-to-month basis?
Wade Foster [34:54] – The survey is the formal way that we’ve started doing it. But a lot of it just comes down to a relationship between the manager and the person, they do a weekly one-on-one with them, digging in and like, how’s things going? You feel like you’re getting to work on the things that you want to work on? Do you feel like you’re advancing? It has some of those types of questions and then we do other things to just like encourage good cross-company communication, camaraderie, stuff like that. We do this thing called pair-buddies. Every week you randomly get paired up with someone across the organization and you’ll just jump on a video conference call and just talk to them, like a coffee outing I guess that you might do in another org. Just talk about whatever right, it doesn’t have to be work specific, it’s super informal, you can talk about family, hobbies, whatever, right? It helps folks get to know each other and then we’re not very restrictive about off-topic stuff in Slack, we’re kind of okay with that, because in normal organizations, people are going to have water cooler talk and talk at lunch and all that sort of stuff and so that’s fine, that stuff should, people should have a place for that inside a remote organization. We have a series of Slack channels that are prefixed with fun, that tend to just be off-topic channels where people do whatever. And then every now and then people will come up with random things. I think a couple weeks ago, someone on our support team wanted to do… It was the end of Friday afternoon on Pacific Time Zone, so everybody in the company is basically, it’s soon to be or almost weekend time. And they’re like let’s do a random gif dance party and so they picked a random song from Spotify, somehow, and then were like, already here’s the song, now make a gif of yourself dancing to this thing. About a dozen people uploaded random gifs into Slack that were just for this song and it’s just stuff like that. We don’t want to take ourselves too seriously. This is a place where you can enjoy yourself too a little bit. Let’s get our stuff done and enjoy our time here, right?
Craig Cannon [37:01] – Totally. I guess slightly going off-topic, almost every interview I’ve listened to or seen with you it’s remote work, not raising money, it’s de-location, it’s all that stuff. What’s something that you don’t often talk about that you’re passionate about, maybe it’s within Zapier, maybe it’s not?
Wade Foster [37:24] – I think there’s probably one thing I don’t often talk about is learning a lot and really speed, as a way to learn things, really going deep on a topic. Everything I do I try to do really, really well. To give you an example, I started playing racquetball, probably about two-and-a-half years ago now. I was playing in college a little, but just for fun. Then I realized about two or three years into Zapier, I had stopped exercising, I was starting to put on some weight, you know founder-15, though in my case it might have been 20 or 25. It was alright I just need to get this under control. I started playing racquetball, actually it was like oh I actually enjoy doing this, it’s okay now how can I, once you start getting into it it’s like this is good exercise but I actually want to be good at this. It’s like how can I get to where I’m as good as I possibly can be as quickly as I can? And I think a lot of folks spend a lot of time when they’re first learning something trying to be perfect at it, they’re like I want to figure out all the things that I could possibly need to know about this instead of just getting in and trying to… What are the few things that I can get better on, each day? And so you know this for me was racquetball. It was like alright, I need to just play a lot, that’s the biggest thing. So I started playing three or four times a week. I found a coach that was teaching me a few things and every time I would get out, once a week he would teach me one new thing. You know it was like alright, I’m just going to practice that one new thing when I’m out playing with folks. It didn’t even matter, so it was this is the shot I’m going to take, even if that wasn’t the right shot to take in that moment, it was I’m going to make that shot anyway ’cause I’m just going to keep working on it. This kind of approach to learning really helps in all, for whatever you’re trying to learn. Yhis is something I help talk to, for every one who’s joining our support team. You know out the gate, you’re going to know next to nothing about what you need to do, the biggest way you can get better, is not by writing a perfect answer to this one ticket but it’s trying to do as many tickets as you possibly can in a given day because if you’re able, you know out the gate to answer 20 emails a day, for the first week, well at the end of the week you’ve done 100 emails versus the person who only does, you know five a day, they’ve only done 25. Now you have you know 75 more interactions of learning than the person who only did five, if you can get you know enough reps in basically, that’s going to really accelerate your learning. I think a lot of folks spend too much time on being perfectionist about things and they forget, a lot of times if you just do it enough times you’re just going to get better at it because you’ve done it a lot. That’s one thing that a lot of founders could really learn from, is just don’t worry about trying to be perfect, just try a bunch of stuff, just do a lot of things and you’re going to get better at it.
Craig Cannon [40:28] – That’s great advice, ’cause there’s often such little downside, especially in software. Maybe you’re shooting off rockets and that’s one thing.
Wade Foster [40:36] – Yeah, right.
Craig Cannon [40:37] – But you know if you miss line of form or something it doesn’t matter.
Wade Foster [40:40] – And early on, right, you have barely any customers, like eh, whatever, right? You know you’ll figure out, right, it’s not going to be the end of the world, you’ll have another opportunity to do something else.
Craig Cannon [40:51] – Are you trying to learn anything else right now?
Wade Foster [40:54] – Oh, I’m still trying to get better at racquetball, but that’s a big one and then I mean I’m always trying to be a better CEO right? I think that’s been a big transition for the last year. There’s a certain point where you stop being a founder and a part of the team and you’re actually… Now I need to start thinking about, me as a CEO and a leader of the organization and making sure that we’re setting ourselves up for a good future. And so that’s something I’m always learning and trying to get better at. In fact one of the things that I always like, I like to do is about every six months, I’ll go seek out founders who basically a year ahead of me and just ask, what did you do in your last year? What was the smartest thing you did in the last year? What was the dumbest thing you did in the last year? What are the things that you’re really happy about? What are the things you regret? And that kind of helps paint a picture of what’s to come for me. And so that way I can, sometimes you can preempt some of it and sometimes you can’t. Sometimes it’s just…
Craig Cannon [41:56] – Oh right, yeah, that.
Wade Foster [41:58] – It’s like you just know it’s coming right?
Craig Cannon [41:59] – Okay, yeah, share some wisdom, what’s coming down the pike?
Wade Foster [42:02] – One of the interesting things that I’ve heard from other folks is you know as you scale your organization you know you get past 100 people you’re going to realize the folks that got you there, might not get you to the next level. And that’s not anything inherently good or bad in the people that you’ve worked with, that’s just something that I think a lot of folks have realized, some people thrive in smaller organizations, some people are better in bigger organizations. And there is a Venn Diagram overlap where people are successful in both and can scale and go the distance, but that’s not always the case. That’s a thing that you know we’ve been lucky to have a really good retention rate but it’ll be interesting to see how far out we can push that, you know given that this kind of phenomenon exists where people you know end up going out to other, just decide I just like being in smaller organizations. That’s one thing that I’ve kind of got, in the back of my head, where I’m like alright, how are we going to handle some of this stuff?
Craig Cannon [43:03] – Yeah, that’s great. I guess my, well I guess my last question is on what are your professional racquetball tips?
Wade Foster [43:11] – Oh goodness, pro racquetball tips.
Craig Cannon [43:12] – I don’t know anything about racquetball, so.
Wade Foster [43:15] – Find the old guy at the gym, he’s like 60 or 70, you’re going to think he’s not very good and then get on the court with him and then he’ll smoke you. And then ask him, how did you beat me so bad? And the reality is, the guy has probably played for two, three, four decades and knows exactly what he needs to do. Even if you’re young and fast and athletic it doesn’t matter you’re not going to beat him. Because racquetball actually, there is quite a bit of strategy in it. If you’re a first-timer, you’re not going to out-athlete a guy who’s played for a while, even if they do have bad knees and a replacement hip.
Craig Cannon [43:57] – They can’t really move around.
Wade Foster [43:58] – Yeah, it’s like they don’t have to, ’cause they just know where to hit the ball that you’re not going to get to it.
Craig Cannon [44:03] – Man, that’s life.
Wade Foster [44:04] – I know, you know I think that applies to a lot of things. Especially in startups, if things are moving fast and growing fast, find someone that just can help you and who’s been there and done that. They’re going to know, they just know where all the trapdoors are and where all the hidden things that are going to trip you up are and so you know they may not know 100% of the things that you’re going to run into, but they can be a good resource for you and just accelerate your learning a little bit. Once you have an opportunity to get that kind of mentorship or help or whatever find a person that can be that for you.
Craig Cannon [44:41] – Great, alright, thanks for coming in.
Wade Foster [44:43] – Yeah, awesome, thanks.
Craig Cannon [44:44] – Okay, thanks for listening. Please remember to rate and subscribe to the show. If you want to read the transcript or watch the video you can check out blog.ycombinator.com. Alright see you next time.
Y Combinator created a new model for funding early stage startups. Twice a year we invest a small amount of money ($150k) in a large number of startups (recently 200). The startups move to Silicon