A Startup Podcast about Company Culture – Episode 09
In our Season 1 finale, we talk with the Outreach Co-Founder and CEO Manny Medina on cofounder dynamics, staying hungry, and having a diverse culture where people are encouraged to express themselves.
Manny Medina (MM): One of the things that I also learned in this journey is that there is never enough energy. So the one thing that you’re always hiring for and compensating for is energy.
Rebecca Lovell (RL): Welcome to the Create Seattle podcast brought to you by Create33, the Pacific Northwest resource center for technology entrepreneurs. On this show, we explore the inner workings of startup culture. We see how founder values shape their leadership, spur their creativity, and drive their success.
RL: Today, we’re sitting down with Manny Medina, co-founder and CEO of Outreach. Outreach is the market-leading sales engagement platform with the promise to make your team a revenue-driving machine, and as of April 2019 with their $114 million raise, achieved “unicorn” status with an over $1B valuation.
Manny grew up in Ecuador, and has a background that includes shrimp farming, a masters in computer science from Penn State, an MBA from Harvard, and stints at both Amazon and Microsoft before starting his own business, joining Techstars and ultimately launching Outreach.
At least twice, Manny and team have productized their own process—first, pivoting from GroupTalent to Outreach, and next, capturing their own culture and approach to sales in the book: “Sales Engagement: How The World’s Fastest Growing Companies are Modernizing Sales Through Humanization at Scale.” We look forward to diving into all of that and more today with Manny.
Manny—we’re delighted to have you on Create Seattle!
MM: Thank you for having me.
RL: It’s a delight to be here in your offices. We’re going to dive into that in a little bit, but first I would love it if you could start with the Outreach origin story. You and I go back to 2011 Techstars, when you were actually building GroupTalent. So walk us through that process.
MM: So I’ll start a little bit before. I met Kinzer (Andrew Kinzer, co-founder, VP of Product Strategy) through friendly connections, and there used to be a bar in Capitol Hill where there was an informal founders meetup. This is how I met my other co-founder, with him together we got into Techstars. We thought that the idea that we used to get into Techstars was pretty dumb, and we dumped it. We grouped up with Gordon (Gordon Hempton, co-founder) and Wes (Wes Hather, co-founder, CTO), and we start GroupTalent.
I don’t know if this or remember, that we finished last out of the entire Techstars class.
RL: Everyone pivots, but it was a particularly tough battle, I remember.
MM: We had trouble getting funding, our story wasn’t sticking, and I remember talking to another founder who was advising the startups. And he was like, you’re like a hoverboard. Meaning you can’t get the thing to hover, but you have a board. That was the most demoralizing thing anybody could tell me.
RL: Got the form but not the function.
MM: Right. Also right before demo day, Gordon was asked to speak as opposed to me. Because Andy Sachs thought that Gordon will connect better with entrepreneurs.
So anyway so like it was a number of tumbles coming out of Techstars, and we got GroupTalent somewhat funded, but I think short of a million dollars maybe.
RL: GroupTalent again for context, was really in the HR tech space.
MM: The original pitch of GroupTalent was about getting jobs or getting acquired as a group of friends. That didn’t work, because there’s no real liquid M&A market for that kind of thing. So we decided to pivot into hiring great talent, and we decided that our event was going to be building better profiles. We build profiles for developers talking about what things they built, a link in their Github repository, etc. That was a fine idea, except that you’re now faced with a two-sided marketplace. You have to attract employers with the right jobs, and you have to attract the developers to stick around and sort of connect them. When you do that you become a glorified agency, unless you can get to scale. We were operating as a glorified agency, trying to throw tech at the problem, and the problem would not bite.
Then in December 2013, we were two months out of cash, we all decided to that we’re gonna have one last hoorah. And we went to Gordon’s apartment. We used to live downtown and into his rec room and we mapped out all the pieces that we needed to do to get the marketplace going. On the developer site we needed to generate more flow. We needed to generate more people being interested in our offering, and the same thing on the customer side: more flow.
We decided to experiment with a couple of things. One was the ability to send a personalized email at scale, and the second one was follow ups. We built an engine that would do both, and the engine had a marketplace for writers. It was kind of complex, about the marketplace of writers, where we would pay 25 cents per email to a writer who could write about — I think it was 20 emails an hour so some other way of counting the math. And the math worked out to be about 7 bucks an hour. High volume transaction.
But the writers that we found were English majors. Some of them were stand-up comedians in training, and they would write one-liners that had incredibly high reply rates, because they like the one-liners they’re punchy. That generated a lot of flow that a lot of people started coming into the website and started applying and building the profiles.
With all this flow we started attracting employers, who are saying “Hey how did you generate in all this flow?” and we’re like “Well we build this engine internally that would allow us to to get this high replay rate!” and the employees would say “Stop, I don’t want to buy your product. I want to buy that engine that you built.”
After about 60 of those meetings, I remember calling my team from San Francisco where I was selling, and telling them “Look we have to do this, like we have to pivot. We have to sell the engine, because the engine has a lot of demand.” Unbeknownst to both of them, I had a walk with Boris Wertz and I pitch him the idea. He said that he would fund it.
RL: Boris Wertz from Version One Ventures up in Vancouver, right.
MM: He would put in a seventy five thousand dollars of additional capital if we pivoted into this new thing, so I pitched him on the day. Out of my entire history between fundraising over two hundred million dollars in cash and getting the company to a billion dollar valuation, I think that is my proudest moment as an entrepreneur. It’s convincing my co-founders when they were — we’re at the bottom of the barrel with no cash in the bank. When I called them that night, they were labeling the equipment to sell it on eBay. Because we were that close to just being done, and I think Gordon was tired, I think Wes was tired, Andrew was afraid that the lawyers were gonna come after his house — like it was just like a mess. We were in an emotional mess that night.
I had the courage to convince them over the phone to have another go at it. I realized that night that the power that we had built was not the tech, it was the resilience and the team that we had. That if I’m able to point this team to the right problem, not only I had the perfect team I had a designer, I had a back-end engineer, and had a front-end engineer, and myself who can sell anything. That team have gone through hell and back, so I will never be able to build a team like that again in my life. This is the only asset that I have built, and I was about to let it go unless I get them to pivot and work on this new problem, which I think we were better suited for.
So we pivot it, we got the investment. Because Boris is invested, he got the board to invest a little bit more, and I gave us about four months of runway. We build the engine. It didn’t work, but there was so much excitement about the engine and we started to sell it at that point, we started to sell it to salespeople, that we were able to raise more cash. We raised about five hundred thousand dollars in angel investment over the course of 12 months, and just by getting like ten and twenty ten and twenties every month and by the end of the year not only we had a working engine, we had revenue that was going up and to the right.
We had so much angel demand, because the word was getting out in the angel community that we were a hot startup and I needed to get the money in, that I got so good at it that I would walk out at the office every Wednesday at lunch and come back with twenty five thousand dollars of investment. Like it became a habit like getting, going out for coffee. I will go meet somebody, and like make him part with our cash. Like I had my pitch dialled. When you’re racing every week, by the 52nd week you’re a machine. I mean you’ve done is so well, that I could tell when somebody was ready to invest.
RL: It seems like at that stage, after you’d hit your stride and your revenues were going up and to the right, you were eating your own dog food. I imagine that could be practically a one slide presentation to investors. Look this thing works.
MM: That’s exactly what it was, it was a one slider that got my Series A done. We did a seed round mostly cause my board. We had a board meeting when we were almost breakeven right, because our expenses are negligible and our revenues just skyrocketing. So I’m trying to convince my co-founders that “Hey guys like we can just make it without raising any more money.”
And Gordon’s girlfriend was pregnant, and Andrew didn’t have any doors in his house, and Wes was sleeping on an inflatable mattress, and they were like “Dude we need some cash” and I said “Okay I’ll do it, but if it’s my deck, and you get to introduce me to three investors. This is what I told Boris and Chris. They introduce me to three investors. Two of them didn’t pan out, and the one that did bite didn’t care that I had a deck or not. So after that we were off to the races.
RL: There’s so much to unpack here, I mean starting with your own journey for the first three years of setback and heartbreaks and tenacity and snatching this thing out of the jaws of death, to having this magic moment with your co-founders, which I want to come back to. But what occurs to me is that a couple things that really made it work was your intensive listening to customers, and that combined with getting that crucial first investor to buy into the new vision. It’s really what bolstered you and enabled you to get to the next level. Do you remember what it was — because you have co-founders, and you’re all in this together, and you’ve identified that that team is your strongest asset probably then and I imagine still now — what was it that convinced them, when you’ve got so much risk and kind of a personal burn rate that you need to manage? How did you do it, because you were still kind of selling a dream?
MM: I remembers this so distinctly. It was the night of the crunchies.
RL: The TechCrunch awards.
MM: I was sitting outside in my car. I got there early so I could park on the street and not pay for parking. So I parked on the street, and I called them from the car and I remember that there were two distinct things that I pitched them. One was that the idea had real legs, because people wanted to buy us and what they really wanted to buy is the engine. Nobody had invented this technology, so this is novel in the market and that’s a huge pitch for Gordon and Wes. They needed to know that this is completely new.
The second piece was, “What else are you going to do? You’ve all had jobs before and you hated it. This is where it’s at, like we love each other. The moment this walks off we will never get it again. This is a life decision that will impact you for the rest of your life. You can all walk away and go get a job at Microsoft, and you will never see each other again, or we can have another go at it with a lot more data that we had in the past and the knowledge of exactly how we fit.
When we started the company, one of the first things that I had to do is mediate fights between Andrew and Wes and Gordon around who owned the signing, who owns experience, because we’re all designers. I mean everybody has a design background up to some, everybody has an opinion. Getting to break those ties and getting to getting to work together took two years to do.
I think that they all understood that if you if you break that developing with somebody else, it’s gonna take a long, long time or may never work out. Then about all of us are back on the street working either something you hate or trying to develop a relationship with somebody that’s not gonna work out.
I think that worked for me is the fact that wasn’t untrue. Gordon and Wes had already had another sort of startup fail, and they knew what it’s like to not have the cohesiveness of the team. One of the things that also worked in our favor, which is the opposite advice of what I got is: that we treat each other as equals. We divided a company equally, and that is uncommon in startups because of “I’m older, I have more money, I have more experience on more contact and sort of social, have the bigger pie.” But then everybody is not gonna be as as incentivized, especially when you go through the bad parts. So being all in the same, considering each other’s equals was a huge part of keeping that unity through the bottom of the curve.
RL: That isn’t the conventional wisdom you’re right, but I imagine through all of those inflection points in the business, where you give yourself the space and equity and ownership to trust each other and to disagree, ultimately you’re gonna get to the best place for the team where the whole is greater than the sum of the parts.
MM: Exactly. In the advice that I got it, I got this advice all the time when I was at Techstars, so it was like “Oh you need somebody to own more so they can break the ties. If you break the ties, and you don’t have the buy-in, you didn’t really break the tie. You have resentfulness at that point, and that vile stuff lives in.
When everyone has exactly the same vote, there is no passive aggressiveness. We need to like we’re gonna commit to this, and we all have to look at each other and we’re going to do it. If there is any doubt, let’s resolve it right now.
I got us into the motion of like, we’re always pitching to each other. I mean there is not one vote that is stronger than the other, it’s like we’re going to do this when we’re committed, because we’re wearing it together. When you have a tiebreaker that’s based on ownership percentage, that’s about referent authority that’s not about collaboration.
It is credibility and power and it reminds the other person “I don’t own as much as you” and then and then it creates resentment. By having this kind of makeup it allow us to go through the pivot to a really hard pivot to I really personally in monetarily hard time in our lives together and come out of out of it rather well.
RL: That really starts to set up your vision and values and your company culture, I mean you’ve been living this together for years before you made this pivot and raised an institutional round. So that collaborative spirit I’m hearing come through.
Another remark that you made about parking on the street, so you didn’t have to pay for a lot. There’s a scrappiness that I’ve always seen in you. What I always love to know as companies do succeed and grow past the garage and the IKEA furniture, what have you done to retain that startup mentality, that scrappiness and that collaboration as you have become a unicorn?
MM: I was talking to Adam Selipsky (CEO of Tableau Software) just this morning about what he brought to the table when he left one company went to the next. I think that at our scale — so we’re almost 400 people — at our scale, you can affect people directly but you need to start working through leverage of your executive team and everybody else.
So there’s two things that I hold dear. One is I always lead by example. I always do what I say, so I always make a big deal about being cheap and you can call this smart and you can call it whatever, but I’m just being cheap right. A lot of my shirts I buy from Goodwill, and I tell everybody that whenever somebody goes “Oh you look nice today” and I say “Oh yeah this is Goodwill’s finest.” I make a point of letting everybody know that like I’m scrappy in my personal life.
RL: In your video after you raise that last round, it shows you are turning off lights and insisting a double sided printing.
MM: Someone in the marketing team said let’s do a Manny on Manny. How does Manny behave, that is the kind of thing that I go around doing right. What you see is what you get, like I hate throwing away food. One of the reasons we don’t have catered food here, we do it now once a week because I got talked out of it, it’s because I hate wasting food. We got into a system in which we cater the food, people eat it, and then we save it, and then we bring out the leftovers and they’re gonna heat it up and then you serve the day after and then they’re gone. So there’s never waste, which is a huge pet peeve of mine.
Even moving into this building was a big deal for me, because we always were in rented spaces that were just slightly uncomfortable. We’re always using other people’s furniture, my chair is the ugliest chair like you if you want to find me find the ugliest chair in the building that’s my chair.
It’s about being unsettled. Don’t settle physically and unsettled like mentally, so that you always know that you’re hungry and there’s more out there. Because really if you think about our market, we can solve every customer facing representative out there. In the US alone, there’s nine million of them. We only have about eighty thousand of them, so we are less than 1% of the market you see. There’s so much out there to go and gardener, that any whiff of settling sort of like gives me the heebie-jeebies.
RL: You’re always literally on the edge of your seat, because it’s uncomfortable.
MM: Moving here was a bit of a leap for me because we moved out of this basement we had, we were in that Tableau basement in Fremont. Where the doors were broken, the roof leaked, there is some rooms really hot, some rooms are really cold, so there was always like something that made it like not quite there yet.
You moved into this building and it’s gorgeous, and you’re looking with the sweeping views of the sound, I’m like “Oh my gosh what are we doing” like we’re gonna feel settled here. It turns out it helped quite a bit in hiring, so that got me over the hump. But showing everybody that you am personally unsettled in that I’m personally hungry, and I’m for personal looking for the best, it’s one of the things I do.
The second thing that I do is that I am very adamant with my team, that we’re a team of equals with my executive team. There’s no overruling, but of course I am the CEO so I get at the end of the day, sort of push come to shove, I’ll make the tie break. But I want to be working in a place where I am challenged, I’m having fun. If I’m making all the decisions, that I’m not having fun cuz I’m not getting the best out of everybody else. If I’m not able to riff with somebody else on an idea that it may be patently stupid, I need you to be able to tell me that I’m full of sh*t. My dream job is working with like my extended co-founders and creating an executive team that sort of behaves like that and feels like that irrespective of the org structure, is sort of like the dream for me.
RL: So you’ve stayed scrappy, but you’re clearly making necessary investments when it’s for the good of the team. And it’s so interesting to me to walk into someone’s space, because oftentimes your physical surroundings are an extension and a reflection of your culture.
We’re on-site at Outreach today, which does have beautiful sweeping views and becoming to the lobby. There’s festive music, bright pops of color which are consistent with your brand. It felt very welcoming, lots of reflections in the lobby of the team’s successes. So it’s nice to see that physically reflected, but it sounds like it was a personal hurdle for you to get over your scrappy mindset.
MM: It was, but one of the things that I also learned in this journey is that there is never enough energy. So the one thing that you’re always hiring for and compensating for is energy.
Everybody at some point will be down. We will have a loss, the system will have a hiccup, we may lose a customer, an employee, etcetera. There’s always reasons to to beat yourself up, and you need people around you to remind yourself that this is fun, and that this is great, and that you’re living in the dream.
We had a VP of Sales (Matt Millen) about a year ago, who came and lasted about two years. He came from the Tony Robbins organization and he taught us a lot about the effect of words, and demeanor, and mindset into how you perform. How you do things, and how you do anything is how you do everything. The ability to stay positive and feel pumped and make other people feel energy goes a very long way.
So now it’s a requirement as an executive at Outreach you have to bring your energy. If you’re low energy it’s just not going to work. For example we’re looking for a CFO right now, and we have to disqualify about three-quarters of the candidates because their financial types and they’re supposed to be more reserved, and I’m sure that’s great anywhere else but I need everybody’s energy. I need everybody’s presence like right now, because this is hard right. This doubles every year. Takes a lot out of us.
RL: It’s an attribute you prioritize. Well I’ve always been struck by your singular ability to energize and align a team around a single goal. I would love for you to share your story around reaching 10 million dollars as a team. There’s that messy middle phase of building a business and you’re kind of make or break and growing the company from three to ten million dollars. I’d love for you to talk through both what you did to get the team aligned and pumped up, and the fact that you were willing to make an investment in their success.
MM: Ten million dollars has been a mental milestone for us, but it’s kind of a hurdle. It’s really hard to get there. When we went from zero to three, it felt like it took all of us and all we had to get there. I remember calling my VP of Sales, it’s like “Dude we gotta get to ten million, because ten million is the marker between being alive forever and being dead forever.” We got on the phone and we did a quick back of the envelope math. It’s like “What can we do that is super special, that would that that will signify something meaningful for ten million” and we decided to take an entire company to Cabo, was that thing.
We mapped it out, that it wouldn’t be more than two hundred thousand dollars to the entire entire trip, and that it was well worth it. Now so that was a the first milestone, the second milestone is we need to make it real. We spend like an hour downloading photos of everywhere and around Cabo, like where you land and in the airport and in the hotel, like the different views from the hotel we’re gonna stay. We didn’t have a hotel reservation at that point, we used to stock the downloaded photos from a random hotel to make it look really really real, that we’re all going to go to that place if we hit two million dollars.
We announced it to the company, but then we needed to figure out a way to get everybody involved. Because if you’re a developer, you’re not gonna feel the rush of the deal closed or not. We needed to put some kind of marker around what you’re doing, that the fields that you’re contributing to the motion. So every week we will get together on the table and celebrate something that somebody did that helped a customer.
Getting to ten million means two things: it means adding new customers and keep the ones that you have. Because we’re a subscription business, that customer obsession was true from the very early days transitioning from GroupTalent. One of the earliest things that I told our team was there’s product companies, there are engineering companies, there are sales companies, and there’s marketing companies. We’re the only company where all we do is success for our customers, that’s our true north. Whatever we do in product and engineering, whatever we do in sales and marketing, is on behalf of making sure that the customer is successful. Every new product that we build is on behalf making sure that the customer is hitting a new target in return on investment, as opposed to some kind of gimmick to get a new customer.
In any event, we rally the entire company around this single marker, and we made it feel that everybody was involved. Every week we gather around this measure how we helped a customer. Then we hit a really hard quarter right. Around six million. We’re between five and I don’t know like ten fourth, there is you will hit a scaling problem. Meaning one of the ways that you go to market, it will not sort of convert to a larger number.
We were doing a lot of smaller deals, and that’s very common in startups. The first people who will buy are the early early adopters of anything, are usually the smallest companies who are looking for an edge and the tech companies who will buy any technology. But they also turned really quickly, because they will lose their attention like this. So it was the fish going after the shiny objects – I need object, not shiny object hunters. We had a really hard time hitting that hidden the six million dollar mark.
We sort of did a lot of introspection: why was it harder than every single other quarter? We found out that we just had the wrong leaders on the spot, and that we were not gonna hit the ten million or we’re not gonna hit it in style right, with all the elbow room that we needed to hit the next milestone, if we didn’t do a quick upgrade on the go-to-market team.
RL: So what attributes did you hire for at that stage?
MM: So we needed to think out of quarters and quarters out. That was not something that we were trained to do. I look at the pipeline, close the pipeline and the quarter, and be like right now what, and doing it again without having that multi-quarter view.
It was something that we had to develop here internally, so I brought in this gentleman Matt Millen who came out of the Tony Robbins organization, he was a T-Mobile at a time, and I remember I was selling him and he told me something profound in a meeting. I was like that that’s really important, let me let me take you out to dinner. I took him out to dinner, and I learn more in that hour about sales that I have learned in a very very long time. So I made him an offer to join us.
RL: Can you tell me or do you have to kill me? I’m dying to know what he told you.
MM: So it was really interesting. I mean this may get technical. But your quarter is comprised of the deals that you developed and closed that quarter, plus the deals that you develop and pushed from last quarter minus the deals that you develop and push to the next quarter. As long as you have a good metric for each, and you understand how those behave and exactly what capacity you need within a quarter to generate revenue.
Once you have that equation mapped out — it takes about three quarters to get that a whole equation going — then you can figure out the most important metric in sales: pipeline coverage. How much pipeline do you need to create to hit a number? If you’re a small scrappy startup that nobody has ever heard of, that number needs to be closer to four. Because anything could happen within the quarter. You may be a fly-by-night if you are a well-established player in the market and everybody knows you; that pipeline could be closer to one, so when the pipeline is closer to one then you’re very efficient when the pipeline’s close. Before you’re very inefficient, but that’s what you need to do to hit those numbers.
So we measure the top of the funnel taken out but big enough right. Then you need to do whatever it takes to get that 4x coverage. If you want to do that ten million dollar number — so we needed to hit I think like a two million dollar quarter at the end of the quarter to make the number. So that means that right now, I need to deliver out eight million dollar pipeline into the quarter for me to be able to have a shot at the quarter.
RL: Please tell me that you made your 10 million, you actually made reservations at real hotels and took your whole team to Cabo at the end.
MM: So we ended up, right about the six million, we realized that it would be better to bring the company before we hit the 10 million. So that we can use the trip to prepare for the next big pipeline build that we’re about to do.
So we took the company out at around 8 million, and it was all what you would imagine it to be. It was a sentimental moment for the company. Everybody, like 98 percent employees, went and and we had a blast and came back energized.
RL: Well the energy is contagious, and it’s remarkable that 98 percent of the employees were on board and part of that magical moment. What I’m wondering is, because sales is clearly so woven into the fabric of your culture here, you’ve written about this topic. I know it can be a difficult needle to thread between having a sales culture of hunting, and stopping short of harassing. How do you, as you’re bringing onboard new hires, and you’re staying true to your values of being respectful and customer obsessed — how do you help people avoid the obsession with closing and not cross the line into harassing your customers? Any tips you can share with our listeners?
MM: You pick a metric that reflects all of that. So our core internal metric is active users. Revenue is an outcome of having users that are active. Yes I will call you and sometimes cross the line in terms of being annoying, that will happen irrespective of whether you are sales culture, engineering culture. But the moment you become a customer, we will do anything to make you successful.
We measure that by how many times are you in the platform, taking actions that are driving results for you. So that changes the mentality. Because one of the things that we don’t do anymore is assigning, selling more seats than you need, which is a pretty common thing to do and in subscription businesses. Or selling you something we don’t have, or selling you something that is not in the truck.
One of the things that sometimes worked to our detriment, but it has worked to our success in the long term, it’s the fact that we’re very Seattle-like that we very rarely market ahead of capabilities.
It has bit us in the ass several times. Because we compete in a marketing which is is rife with grand statements and hyper-inflated claims, about what machine learning and AI can do. We call it like it is. We tell you what it’s gonna do, and we tell you what it’s not going to do, and how we built it. So we have this default of being incredibly transparent to our customer, and I think it has to do with the fact that we’re even transparent to each other. So we wouldn’t tell a customer, not even a fib, about what we think we’re gonna do if we’re not at least 75 percent certain that the thing is coming out in the next quarter. If it’s not to that level — certainly we used to talk about it and we get into arguments like, “Oh my god like everybody else, Salesforce launches one year ahead of capability. Why can’t we do that?”
Because that’s not who we are right. Let them be who they are — we’re Seattle people. Seattle people are real talk. They’ll tell you what it is here. So there is that core that allows you to be a little bit aggressive, because we are certain that we’re delivering the value. Somebody told me the other day, it’s like being a doctor. When you’re a doctor you have an oath to make somebody else well. That person may not be ready for your medicine, may not want to be get well, but you have your oath to at least try to get to that person in some degree. If you don’t succeed, that’s fine. But at least you try. That’s how we think of ourselves. Our job is to get to every single customer facing rep, because we know that we can make your life better. If we don’t do it, that’s on us. That we didn’t pitch well, didn’t market well, we don’t catch at a good time, didn’t add value, not in the conversation but we will get after it again. I mean like this is not something that will turn us down.
RL: You have the passion of your convictions, radical transparency, and this philosophy that you get what you measure. You have to have the right metrics, because everyone will perform to those. So I want to come back to Seattle, which you’ve referenced and we’ll close with that. But before that, I’d love for you to share your perspective as an immigrant CEO and building a culture around respect and diversity and inclusion. You’ve referenced it subtly, but can you speak with us a little bit more about your intention and what’s worked for you in creating that kind of a community here?
MM: So we consider a culture of inclusion a weapon. We will not be here if it wasn’t for the diversity of people who founded the company. So Andrew, Gordon, Wes are the same age, roughly the same upbringing into some changes in the Pacific Northwest, all three of them white.
I’m a little different: I’m 10 years older, I’m an immigrant, I speak with an accent, etc. It was that magic of the differences of opinion, and being respectful to each other and be inclusive to each other, that sort of made us who we are. It’s at the core, it’s at the DNA level here at Outreach. To me, I don’t feel good if we don’t have a different set of perspectives, and the only way you’re gonna get there is by hiring diversely and making sure that those voices are heard.
I try to do as much as I can with my executive team, I try to do as much as I can by spending time with other teams as we grow, but you have to measure it. One of the things that I think we are at this point almost 65, 35 women total but at the executive level we’re closer to 50-50 in terms of women. We need to find better rubrics for figuring out how do we really measure diversity, because just women men it’s not enough.
But what you get out of it by measuring, and then sort of talking about it very openly and saying what are their roles, and what are the kind of personalities that we need to bring in. You also keep it alive by talking about it, and saying when it breaks, when it doesn’t work. We tend to be a rather loud and a bit in-your-face culture, and that comes a lot from the way that we roll. Andrew, Gordon, and Wes like we all get in front of we all get into a shouting match in front of everybody, not making a thought not even think about it twice. But that’s how we hash things out.
The truth lies in the border of the disagreement. I mean like once you understand somebody else’s point of view, you will get better at it. We can only do it arguing out loud, and that’s not for everybody. So by saying look our diversity inclusion has a particular edge, that if you’re not able to hold your own in a loud conversation, we’re not quite ready for you. I mean like we need to be a little bit bigger, we need to be a bit more inclusive, but that’s not where, we’re gonna work on it this year.
So we will hire people who can hold their own in that kind of environment, and then as we grow and we become more open, and we become more inclusive and more diverse, we’ll continue to expand that the sort of the border of what it means to be diverse and inclusive.
By calling it out and making it a thing, and say what it is and what it’s not, that’s how you keep it alive. That’s how you keep it vibrant.
RL: Right and having alignment around your values, does not mean that everyone looks the same and has the same lived experience. In fact, in your experience, you have better outcomes when people with different backgrounds and experiences feel free and able to speak their views.
MM: That’s exactly and it is a constant, it’s not a struggle, but it’s a constant… I remember speaking with General McChrystal, I think you have heard of him. He thinks of leadership more as gardening, rather than as being that first one in the from “rah rah, we’re gonna”.
What you do is you hire incredibly good team, you set the rules of the game, and then you sort of like weave around them to make sure that not all the bad stuff, provide them with water, providing like you’re sort of tending to the garden as opposed to like getting in the middle of things and like driving really hard. You hire incredibly good people, and then you sort of like make everyone their best.
RL: Well as we close, I want to come back to some of your comments around Seattle. This is where you’ve chosen to build your business, you’re expanding elsewhere but this is the core team. You’ve referenced that here in Seattle, we don’t necessarily sell what we haven’t already built. We’re very product-focused. We don’t necessarily beat our chests and get ahead of ourselves. What other observations do you have about Seattle culture and how has that been a help and perhaps a hindrance to you building your company here?
MM: Seattle remains a relatively small city. It’s very easy to know everybody. I talk to Eugenio (Eugenio Pace, co-founder and CEO at Auth0) and Dan (Dan Lewis co-founder and CEO at Convoy) and Matt (Matt Oppenheimer co-founder and CEO at Remitly) and I saw Robert (Robert Wahbe co-founder and CEO at Highspot) not long ago and Samir (Samir Bodas co-founder and CEO at Icertis), etc. You can get around and get to know people relatively intimately. We’re all poaching from mammoths like Microsoft, so we all go to the same hunting rounds in terms of people.
What makes it magic here is that there is such a culture of craftsmanship in everything we do. It’s ok to be weird, it’s ok to be different, it’s ok to think outside of the norm. Being here is you have incredible access to talent without being in the cacophony of Silicon Valley where everybody’s starting something.
I think we’re all living in a world of very high expectations and our valuations are showing it, but we also have a line of sight of how to get to the steps to get to the next goal. So it’s very refreshing to be with such a real group of people, that are very ambitious but very well-rounded. I think that the Seattle startup culture is starting to form, especially in B2B, like I’m not super familiar with B2C. But especially in B2B, I’m very proud of being part of such a small, scrappy set of individuals that have come from not being proven. If you look at Dan, Eugenio, and I or even Matt, we didn’t have a previous success. We’re untested. And yet we got to where we are, and we continue to deliver on the good and make good on our promises.
We’re all building incredible cultures that are us — that are not somebody else, we’re not copying so-and-so. We’re not taking Google’s culture and making it ours, no we’re our own culture. So I love this fierce independence of the Pacific Northwest, and this access to talent and the permission to be different and who we are.
RL: Absolutely. It’s so clear that you are grounded and have your feet on the ground but your head in the clouds, and you’ve got a wonderful peer community. We’re delighted to have you a part of it.
It’s a pleasure to learn more about your radical transparency, your customer obsession, and wishing you all the best. Thanks again for doing this with us.
MM: Thank you Rebecca, this is awesome.
RL: We hope you enjoy today’s episode of Create Seattle with Manny Medina, CEO and co-founder of Outreach. Until next time, talk to you soon.