In The Trenches: Interview with Anthemos Georgiades (pt. 2)
4:20PM Nov 5, 2021
But I guess the question is, was there ever a time back in 2012? Or maybe prior to 2012? Before you found a number? Was there ever a time where you went through that sort of mental gymnastics in a deliberate way? And consider the rich versus King kind of calculus? And if so, or maybe even if not, how, or why did you decide to choose rich as opposed to King?
Yeah, so Zumper is my first startup. And, you know, like those, the few of us who left grad school, and actually picked the entrepreneurial route, a lot of our colleagues and friends open and often were very successful in jobs that can a guaranteed them income and outcomes annually. Whereas obviously, when you take a startup, you pay yourself a 10th of their salary, and you're risking all on the equity. My general philosophy, and this is a personal kind of risk appetite, it's just to not waste any time and to get to an outcome as soon as possible. And so I do not control the majority of shares in Zumper. Our boards and our investors, we've raised 150 million in venture capital, they have the majority of the company. And so to do that, I was just comfortable that, yes, that's the trade off. But I want to get Zumper as big as possible, as quickly as possible. I don't want to spend 25 years getting to 70 million users a year, I want to spend six years getting there.
And so, it was a life is short, we will have opportunity costs, I wanted to build my company as quickly as possible, even if I took a hefty amount of dilution on the way to do that. And I have no regrets about doing that. There is someone who will tell you the exact opposite. And they will be equally right, if that's more your personality, which is I didn't want the pressure. This was my life's work. I wanted to spend 40 years on this company, and I'm in no rush. And that is a totally fair, and a really intelligent approach to building a company as well. I think for your listeners, you kind of have to ask yourself, which one are you? I'm more in the first camp of, I want to build it quickly. I want to scale it as fast as possible. And maybe do two or three of these companies in my lifetime versus doing just one. And I think the race venturing go at it at 1000 miles an hour is a way to achieve that.
Yeah, I think as you point out, there is no right answer between Rich or King and of course, even the words Rich or King grossly oversimplify the trade off that needs to be made. But the answer is going to be different for everybody. I think where I've seen entrepreneurs trip up most frequently is they don't actually go through that thought process explicitly. And ultimately, in trying to get the best of both of those worlds, inevitably, they end up getting the worst of both of them. So, let's go to or pardon me, let's stay with the concept of capital. for one more question, you've mentioned that Zumper has raised $150 million in venture capital across multiple rounds. Some listeners may be contemplating similar dollar amounts, some might be considering much more modest dollar amounts. So speaking generally, I mean, how have you thought about in the past how much capital you could or should be raising at any given time?
Yeah, I'll give you the kind of the honest answer. And then I'll give you the more intelligent answer. So the honest answer is, sometimes the answer is as much as you can get, like Zumper from the outside, we've been able to raise a lot of capital. But in the early days, before we had any users, any revenue, it was a luxury to say, how much money can we raise? Should we take 1 million? Or should we take 10 million? I mean, in the early days, there wasn't $10,000? Like there was nothing on the table. And so to be completely candid, Steve, actually sometimes early on, you take as much as you can get. And yes, there's a financial model behind it. But sometimes the answer is we're no one yets. We haven't proven anything to anyone. No one knows who I am. I'll take whatever money I can get. And I think that you'll read a lot of blogs and articles and podcasts about people who give you like a perfect intellectual answer about how it has to match the model and all these other things, but he rarely had the truth pitches. A lot of times people raise capital, because they have to, and they raise as much as they possibly can, which is probably not as much as they wanted, but they it was the only option.
So in all honesty, even though we raised 150 million, especially in the early years, we raised as much as we possibly could and there was no precise model behind it. It was just what was that? The second answer, which is the more intellectual answer is, yeah, build a model. build a model that's kind of pessimistic, which kind of says, okay, we've got to make a lot of investments and they don't yield much revenue traction, immediately. Build a model this pessimistic, which will ask you to raise more money than you need, and then go and try and raise that money. So say a pessimistic model says, Hey, to get to your next milestone, you need to raise $4 million, be conservative, so assume it will take more time than you think it will, and you'll earn less revenue than you think you will. So maybe you only actually two to $3 million, but but you'll go and raise four, and maybe even you stretch to five or six if you have interest. And I've always found that like being slightly pessimistic is good, because you end up raising more capital. And you always appreciate raising more capital.
So, I think that the financial model that goes behind it is really important. You're looking at kind of, costs, how quickly the cost payback in terms of cash flow. And then the ultimate thing that keeps me up at night as the CEO is runway. If I raise X million dollars, with this cost base, and this level of investment, how many months of runway do I have left? And by runway, I mean, just how many months till we run out of cash, assuming your businesses unprofitable. And ultimately, your job as the CEO of a company and as a venture backed company is kind of to execute on your mission without running out of fuel on the journey. And so sometimes you can frame a capital raisers, how many months does this give me to make more aggressive bets? But can I at least build, you know, my rule of thumb is you always want two and a half years of runway, for every capital raise you do, I always want to be able to see 30 months out. So that is a long time to make investments, make mistakes, hire a team. And every every couple of years, I'll go and raise again. So my rule of thumb is, every time we raise money, have at least two and a half years of visibility forward. Before we then have to raise again.
And how did you settle on the figure of two and a half years? Why not three years? Why not one year?
Yes. So some of it is the industry, I think of the immediate venture capital funds will expect you to raise money every two years. That's the kind of rule of thumb. Now, in today's capital markets, the markets are crazy, and some people are raising every year. But if I look at Zumper, we've actually followed that path almost by accident that we raised in 2014, 2016, 2018, and 2020. So actually, we really did raise every two years. So part of it is just like the industry norm, I think the the the more like internal to the company part is, as you will know, from building companies, it takes one to two years for investments to really pay off. Sometimes it's faster, sometimes it's slower. But like in a software business, like Zumper, where we are an online marketplace, for residential rentals. Sometimes it takes us six months to develop like a really advanced feature, then it takes another six months to iterate on it really quickly. And then in a year or two, we'll really see the payback. And so sometimes we'll have a one month product cycle, but sometimes product cycles take a while to really kind of yield the ROI. And I think just internally having two years allows you to make four or five parallel bets into your product org, have three of them pay off and really yield dividends in the second year. So I think two years is a good rule of thumb, and allows you to kind of get your team focused on the medium term journey while having enough fuel on the boat together.
I know just from following Zumpers progress, that you guys have grown both organically and in organically through M&A. And so that's kind of where I want to take the conversation next, this kind of concept of how one differentiates and chooses between organic growth and inorganic growth. And so, one acquisition that comes to mind is Zumpers acquisition of PadMapper, which is a somewhat similar service that I believe you acquired in 2016. I remember this only because I was a user of that product at the time. And so, when acquiring PadMapper became a possibility, so well before the acquisition itself was even consummated. Walk us through kind of the self talk, how did you decide that this could be a logical way for Zumper to pursue growth?
So PadMapper I think M&A, as you've all seen is typically like one of two ways is proactive or reactive. Either companies are proactive and they say okay, we're gonna go on a buying spree and bolt on a bunch of companies. And then sometimes they're reactive, where you're minding your own business and an opportunity comes up and it's too good to pass up. We were very much the second camp. We mainly are in business focusing on growth and this opportunity to invest this really great company to acquire this really great company came up, and so we had never been planning M&A, we were not set up to do M&A. But suddenly this opportunity came up and we got into the mental framework of, we can't lose this, if someone else built this, as I bought this, it would be detrimental to our company and our own growth rate. And we also loved it because as your Canadian listeners will know, it was a leading, and still is a leading kind of brand name in Canada for rental search.
And we were looking to expand into Canada. So not only did it bring us traffic, but it also brought us a Canadian business that we were really interested in. And so we weren't set up at all, we had no M&A function, we had no bankers. It was a conversation that I had with the CEO at a conference that then led into like, further conversations. And actually six months of negotiation. It was not a fast deal at all, it took six months to do this deal, even though kind of they had a team of under five people, it was still like a heavy lift. So actually, just to give you the frank answer, we were not a tool set up to do M&A. But we couldn't miss out on the opportunity to acquire these guys. And so we got smart very quickly, and we had to get smart quickly to achieve it.
Now, at this point, your company was only four years old. And I don't know this to be true. But I am presuming that you had more than enough on your plate as it was trying to grow Zumper, four years after founding it organically. And that reminds me of my experience in my own company where acquisitions would sometimes be presented to us, but I always viewed us as not being particularly ready to acquire another company. Rightly or wrongly, my mindset was our company had enough problems and opportunities on our plates as it was, we were busy enough as it was, nevermind inheriting the problems and opportunities in general busyness of another company. So I mean, how did you know that Zumper was ready to make an acquisition? even if the business logic underlying the acquisition was compelling. You could still have compelling business logic for an acquisition, but the acquiring company might not be ready to make the acquisition from a operational integration standpoint. How did you know that Zumper could actually successfully execute on the acquisition from an integration and operations perspective, when you were still so young as a company and presumably still figuring things out visa vi your own business?
I think that's the key point that you said integration. I think looking back on that deal. So I think a lot of CEOs asked this question retro actively, which is like for the M&A did, which ones would you do again, and like they're all their statistics out there saying 80% of M&A fails, or 80% of CEOs regret the M&A they did. So when I look back on that deal, I would do it again. I've no regrets, I really feel confident we're in the 20%. However, I think we got smart at being able to do the deal. So I got smarter M&A, we hired lawyers, we looked at the deal, our board were phenomenal. We had to raise money to buy them. So there's kind of like many balls in the air. But you can mention the key words the which is integration, I think you thought about it very smartly in your in your previous company. And what we did not do and this is a classic with M&A is really have the infrastructure to integrate them well. Now, we knew all of the scare stories of like loads of M&A happens because you get excited. And then on day one, when they're actually at your company, you're just not even equipped to integrate them.
Now the good news was we had like 25 people at the time they had under five. So this wasn't a crazy like HR thing or legal thing. It this was literally bringing some really smart software engineers into Zumpers company and it works really well. However, when I look back on the business, our hardest year ever was the year after we acquired PadMapper. Because even with 25 people, like you said for your company, Steve, those 25 people were full time focused on Zumper. And when we bought PadMapper, we tried to bring them into our code base, run them off our back end, still keeping them completely separate. And they still ran as an independent kind of company, but we tried to make them more efficient. And that was really difficult. And I don't think we were ready to do the integration piece of the deal. And even as a tiny company that ran themselves and we didn't interfere. We still weren't set up to do it. And I think that that was a bit of a fail, because for the next year, we were treading water to be honest on our growth rate because there were so many things that we had to fix in their business and in our business and we just didn't have the capacity.
So I think that's a key lesson for me, which was, yep, getting getting good at doing M&A and doing the deal is is one thing, but that's the easy bit, that is like 10% of the work, 90% of the work is what happens on day one, where they've signed and there at your company. How do you communicate it? How do you work with them? How do you empower them? How do you let them do their thing? How do you do their accounting? It was of so much more work than we anticipated. And that was naive. In retrospect, I did not realize how much it would be. And I think that's where most M&A actually dies is not that you necessarily did the wrong deal is that you didn't have the capacity to integrate the deal into your company. And I think that's where a lot of that 80% number comes, when when people look back on it.
So what would you do differently? If the opportunity to acquire PadMapper presented itself again, in September 2021, as of the day of this recording, knowing what you know now, what would you do differently if given the opportunity to do so again?
Oh, that's such a good question. Because the honest answers, I just think it had to be imperfect, we just could not? Because the smart answer would be I have a post merger integration unit like a PMI team of like, how to bring them into the company, or at least set them up as a standalone entity, which they were and are on the side. But do it successfully. But the reality was, I just couldn't take half my team off the core stuff we're working on to do that. So I think it's an imperfect answer. But the real answer, Steve is, I would do it the same way. And I'd have to enjoy the same pain for the next year. But if it really was a deal, we didn't want to lose, I didn't have the capital or the balance sheet to do it in a better way. But if I did say to your question, I did it now where we are a lot bigger, I would have a very, very clear integration plan where for a couple of quarters. I have dedicated team members on the Zumper side where their full time job was to make these guys successful. We just couldn't afford to do it at the time.
That makes a lot of sense. I think, at the risk of going on a bit of a tangent one of your investors actually Ben Horowitz has this famous saying where he says the only way to learn how to be a CEO is to be a CEO. And I wonder if that's true as it relates to M&A. The only way to understand how to successfully integrate an acquired company is to integrate an acquired company and just learn from the mistakes. Would you say that's an accurate statement? And if not, or even if so, for a CEO who is considering inorganic growth? Is there anything that she can do now to avoid stepping on some of the rakes that you stepped on in 2016?
Wow, what a good question. I think the key point is identifying the rationale for the deal. So even though it's kind of a bit of a paradox, even though I think most M&A fails, because the second part, the first part still is the most important on the decision tree, which is figure out if you're going to be a proactive or reactive M&A person. Like are you going go out and roll up a bunch of companies, which is a great strategy and loads of people have done it very successfully, or you going to be reactive, and kind of move on just opportunities and when they're presented to you. And I think figuring that out first is really important. Because I do believe that you can, the post merger stuff is totally achievable if you just give it enough attention. But I think the perfect advice to have would be, she can probably run the first one on her own with a banker or with a lawyer, which is the rationale for the deal. And obviously, she'll have to get her board involved. But there's a 0% chance, she's going to be able to integrate that company into hers on her own without support.
And so I would make sure that at the point where you're getting to conviction that you should do the deal, you're three months before the deal closing starting to build that internal team that's going to integrate that deal. That's my single biggest lesson. And when I talk about integration, it's not just technical integration or financial integration. It's also someone who's going to think through cultural integration, because companies do things in completely different ways. And it's not saying you need to assimilate company you acquire into your culture. But it's kind of like just thinking through how the two cultures will get on. It sounds like very qualitative work. But as most of employee say, culture is king and the best people stay at the best companies for culture. And I think that's completely true. And so I think that would be the advice I give her, which is you can go through the M&A deals on your own, but start to build your team a quarter before the deal closes of who's going to integrate this crew and how.
So now that Zumper is moving on from 2016, a more mature company, you're a more mature CEO, you're now more experienced acquirer, you're still running a very high growth business and you still have the choice looking forward to grow organically versus in organically. Has your view on kind of how and where to pursue growth, visa vi organic versus inorganic, because that evolved over time. How are you thinking about it today?
Yeah, at the time, we bought PadMapper, they doubled our traffic. Because Zumper was very small, then like we were three, four years old. PadMapper was kind of, I think, six, seven years old. They'd been around for a lot longer than us, but they'd never really raised venture capital, to the extent that we had. So we'd grown faster, but they were very well known brands, we have roughly the same traffic. So literally when we bought them. And it was a great acquisition for them and a great outcome for them. But it wasn't in the grand scheme of things, a super expensive acquisition. In Silicon Valley, it was like a great win win that doubled the size of our traffic. And so at the time, for Zumper, it was just enormous. And so with a small a relatively small dollar acquisition, we doubled the size of our traffic, and hence our revenue potential. So in the early days, actually quite small acquisitions were so meaningful, because we were so small. Now, like, yeah, our viewpoint on M&A has changed because we're much bigger company.
So I think to be specific, at the time, we were probably doing like, two or 3 million visits a month. Now we're doing on our own like just short of 20 million visits a month. So we're 10 times bigger as a company. So M&A is now less likely actually, because there are lots of opportunities to acquire like small startups doing things that Zumper was doing and in 2016, but it wouldn't add that much to our business. Now just say we bought a company doing 2 million visits a month, which I thought was a lot at the time, that would only add 10% to our traffic. And that's not a meaningful enough number to go through six months of diligence in M&A. So I think as you get bigger as a company, M&A becomes less likely. So inorganic growth becomes less likely in your own segment. So we're in residential rentals, it's really unlikely we're going to buy anyone else in our space doing the same thing because we're so much bigger than anyone else who's privately held now. And Zumper is the largest startup in the space. But there's no one who can really be that accretive to us.
So I think that the inorganic path for growing at the exact thing that you do goes away over time. But where it becomes more interesting is in parallel verticals. And so whereas there's no one, we were buying residential rentals now, it's highly unlikely we would, I think there are parallel verticals, where it does become interesting. So for example, there are many bolt on services to residential rentals, like renter's insurance or setting up your utilities, or giving landlord certain insurance policies against vacancy, which are things that Zumper does not offer, but which we constantly hear our users ask for. And so on that one where we don't have a business, I think M&A is highly interesting, where you can still do quite, low cost M&A, and bolt of these businesses into a very large marketplace. So I think M&A is equally interesting today to what it was in 2016. But the difference is we would be very unlikely to buy a business like ours now. But we're much more likely to buy an adjacent business instead of building it ourselves.
Yeah, I think that's great. I think the key insight that I want to make sure it doesn't slip through the cracks here for the listeners is that, generally speaking, in my experience, doing a very small deal is just as expensive just as time consuming, and presents just as much emotional heartache as doing a giant deal. So if the cost and the time and the heartburn are the same, at the risk of oversimplifying, you might as well do something big in material to your business, because you're going to pay the same cost, even if you did an acquisition 1/10 of the size.
That's such a good point. And I've had this from I've never done a big acquisition. But I've also heard that sometimes when you do small acquisitions, you're dealing with founding teams, like I would have been if someone if we taken any of our early acquisition offers that came in for us. We would have fought hard and been difficult because we're a founding young team, inexperienced, I've actually heard that sometimes massive M&A, like big ticket M&A, can actually go faster, because you're typically dealing with two very seasoned executive teams. They're probably very expensive lawyers at the table who do this in their sleep. And actually, funnily enough, I've actually heard that big M&A, like billion dollar M&A can sometimes go faster than single digit dollar M&A, because of those dynamics. And so Steve, I think, to your point, it's so on the money that you might spend the same number of hours doing a billion dollar deal as a $2 million deal. And I think that's like a really important point about the distraction it brings, is it worth it?
That's right, you have to make sure it's worth it. That's exactly right. Okay, so you mentioned operations in the context of acquiring PadMapper where I want to take the discussion next is the operational challenges that high growth sense. And in my experience, I mean, my company never grew at a pace, even close to what yours has been growing at. But it was growing nonetheless. And in my experience, what I came to learn through firsthand experience is that as companies grow, your processes, your systems, your tools, they eventually break down as the company outgrows them. So, in our case, we had a handful of breaks that we had to fix. As you look back on your own growth journey, what are some of the more important or maybe even memorable breakdowns of systems or teams or tools or processes that you remember? And what did you learn from those breakdowns?
Yeah, I mean, the biggest one we had, and I'm sure this happens to a lot of people was when it sounds like a nice problem to have, but it really was a problem. When we first started selling, you're so focused on your first million in revenue, your first 5 million, your first 10 million, that you kind of forget about the longevity of your revenue and sustaining it. And so what we did was we invested all of our resources into our sales team, started getting traction, as Zumber's traffic grew, started selling really nicely in the US and Canada to our landlord clients who had people that pass for access to Zumber's platform and the renter's on the platform. We completely forgot to build like account management and Customer Success behind it. And so what happened was, your revenue curve goes up and to the right, and it looks amazing. And so you keep betting and you keep investing more in sales. And then six months after you start to really inflect and see all this revenue come in, you start to churn your revenue, you think, Oh, shit, like kind of why are we churning 70 of our users? And it's because you didn't build any infrastructure where our sales reps were selling.
But then they're going on to the next account, obviously, because they were incentivized to, and that's not there fault, that was our fault.And we want our sales team kind of going out and hunting for the next client. But we hadn't any account managers, or maybe we have one account manager there was kind of continually stretched across more and more and more accounts. And so one kind of bog and process that broke was, as you scale your revenue, there's a huge infrastructure that goes underneath maintaining that revenue and keeping your customers happy. And that's where account management and Customer Success support comes in. And we built that organization a year too late. And so a lot of our first year of revenue, where we really started to get into the seven figure revenue was probably quite unhealthy revenue, because probably a lot of it churned because we didn't support it and make sure stuff was going well. Whereas now for every dollar of revenue, we have allocation of people whose job it is to check in with our clients and make sure they're happy and ask them how it's going.
And I think that's just like such a classic, it's like a really nice problem to have, because it means you've actually started generating revenue. But it really doesn't feel good when it kicks in, because their revenue churns as quickly as it came on. Or, in fact, their revenue churn is quicker than it came on because it can churn in an email. And it's such a classic mistake in a startup where you don't anticipate the growth you're going to get. And by the time you you realize that you grew faster than you expected, it's almost too late, because you don't have any of those people in their places or in their seats. And I think it's a mistake a lot of people make, and I'm sure I'm going to make it again, about another kind of growth opportunity we're going to have, and what sucks is I just don't know what the next one is. I'm sure there's one around the corner, and I can't see it. But I think as long as we move fast, you can compensate for it quickly.
What about people, right, because as much as tools and systems and processes can be outgrown. I think the much more interesting nuance is people in teams can get outgrown. So I've mentioned on this podcast before that, I'm a believer in the maximum net, there's a certain generally speaking, of course, there are exceptions to this. Generally speaking, a certain group of people, let's say gets you from zero to one, however you define one, another group of people gets you from, let's say, whatever the number is $5 million of revenue to let's say $20 million in revenue. And then a different group of people still generally take you from 20 to let's say, 100, right? It doesn't matter what the numbers are, it's more kind of the sentiment behind the numbers. This is the case more often than not. So in your experience, I mean, is this a dynamic that you dealt with from a team perspective? And if so, how did you deal with let's say, the team of the people that brought you from zero to one, where either they had to get very different jobs or they had to move on from the company or they have to assume new responsibilities? A, did you experience dynamic and B, how did you deal with the difficulties of having to take the team that brought you from nothing to something and either have to say goodbye to them or give them very different roles within the company?
I think literally this challenge you're raising is the single biggest thing that keeps me up at night still. I we went nine years. And so like, literally, this question is so on the money, and I have a strong bias on this. I think you'll read a lot of blog posts and listen to a lot of podcasts, say, yeah, kind of similar to the capital race steps that we talked about that every kind of two, two and a half years, you raise capital. there's also the saying, well, not saying, but there's this kind of philosophy that every time you raise capital is a good opportunity to look at your executive team and see if they're the right ones. It's a forcing function for every two years, do you have to level up your executive team, that's what I've always been told, it's what a lot of startups in Silicon Valley do. So I have a pretty different philosophy to it, which is I have a very strong preference not to do that, if I can avoid it. And I look at the cultural bonds I've built in Zumper. And so our CTO, rose to the ranks, he has been at the company for eight years.
Our chief growth officer has been the company for seven years, our VP of Products been at the company for seven years as well. And these people did not start in these roles, they kind of grew through the company and became these roles. And that when I look at how are companies, like whether the pandemic and cultural, huge quarter's disappointing quarters, great things happening, terrible things happening, I don't think it's possible. I have very strong belief about this, I think it's impossible, I'll go further, to build those cultural bonds. They keep the continuity of the company and the cultural life. By leveling your team up every two years, I know, if your Tesla or Uber, like once in a billion companies, you can probably get away with it. Because you're just building such a massive company, you can hire whoever you want. But if you're in say the top 5% of companies, but not the top 0.1% of companies, the cultural bonds are so impossible to build.
If you just level the team every two years and the loyalty and those phone calls when shit hits the fan where you want to call someone up, it's really hard to get that from someone you hired three months ago, having replaced someone you hired 18 months ago, who they replaced someone 18 months ago, as I have a very strong bias to if I can bet on the early team to get into the sea level. Or if I can bet on new people we hired three years ago, to continue to grow through the company and get into the sea level, I have a very, very strong preference to do that. Even if there is a fancy hire we can make from Uber or Airbnb on the outside. My bias is always to promote from within, because that cultural fabric is worth everything. And a company really is just the amalgamation of the human beings within it, and the IP that they create. And I think it's so much easier to bet on your individuals from the early days than from outside. Now, there are times where that is impossible.
And we have had to recruit many C level executives, where we didn't have them in the company. And that is fine. And there are times where you have to concede that. But I think what I've been really good at in the company, I think there's been loads of things I've sucked at doing as a CEO. But I think what I've done really well is to build a culture that has longevity, where a lot of our executives have real tenure, they're incentivized to stay with their stock options. But most of them don't stay for just their stock options. They stay because they love the other people that they work, with some of whom came through from the beginning, some of whom I joined a couple of years ago, but we've now grown through the company, and they're essential to the culture. But unlike what I've read elsewhere, I've had a very strong bias to trying to promote from within. And it breeds a longevity that I haven't seen in other companies.
You mentioned that you had a number of very early hires who have managed to scale alongside the company, which isn't always the case. Was there something in particular that you looked for or tested for in those early hires to see whether or not these people had the capabilities to ultimately scale very rapidly alongside the company?
Yeah, so I think I was so lucky, in retrospect, so lucky, a bit as luck that all of us can recreate. It's kind of dumb luck, but it's somewhat self perpetuating luck. A lot of people talk about someone tweeted the other day and kind of agreed with that for like, your company culture is set by the time you have 50 employees. Whether you like it or not, those first 50 and potentially even just the first dozen, they set the culture and I really think that's true. It's not the people who come after it on a creative to it, they have to be and you often evolve the culture in a really positive way with the hires you make afterwards. But the foundational DNA of the culture is kind of already set and I think that conseqently, the first yet 1015 20 people you hire, have to absolutely mirror the culture you want. And luckily, here's why I think you do it by accident. If the CEO or the founder, your chief recruiter for the first two years, you have nothing and you're convincing people to leave their well paid job, their save lives to join your crazy idea of a entrepreneurial journey.
Self fulfillingly, I think you attract people like you. And by you I mean a hustling resilience. Early Stage entrepreneur who chose not to take the safe path, and has chosen this crazy zero to one journey, you will self fulfilling Lee tend to attract people like that, or you should consciously aim to attract people like that. So what I looked for an early hires, even if I didn't quite know it at the time, I look back on it. And I really think this is what we were looking for is we looked for intrinsically motivated people. So people who didn't give a shit about the brand, because we didn't have a brand at the time. But people who wanted to just come in solve problems and take value from that. And people who are really resilient and had huge perseverance. And so a lot of our early hires, had worked at startups or founded startups that spectacularly failed, that maybe went for several years didn't work out, had worked for companies that had a huge issue that was no doing of their own, and it failed, but they stuck with them to the final day. That resilience and perseverance you cannot teach.
You cannot go to any Harvard business school class and learn how to be resilient, you have to endure, and hiring people who have gone through it stuck through the company, which for macro reasons, may have just not worked out. Hiring those people and giving them a shot at the big time again, is like a hugely successful strategy in retrospect. And so hire people who are basically raw entrepreneurs who don't need the vanity brands, they want to just grind and get to the right solution that sets you up for success. And those people have gone on to become half of our C level at some point today, which is a company that one day might go public. And it will go public with those same people who were just looking for the next adventure in the early days, but didn't have a fancy resume, and which were the smartest people I've ever met. And so I would not hire the fancy hires early stage, who kind of I've worked at six of the top 10 Silicon Valley companies, I'd always hire someone who spent 20 years working at three companies and really focus on making them successful. I think they're always a better hire.
That's great. The last category of questions that I want to ask you or are personal in nature. And I think, or at least I hope the entrepreneurs and CEOs listening to this will relate to these questions. I've talked about in various blogs and podcasts before this concept of imposter syndrome. And perhaps paradoxically, the more success one attains, the more likely it is that they will experience imposter syndrome. So for you, you founded this business out of business school in 2012, with really no entrepreneurial experience at that point, you had zero employees, $0 in venture capital, zero users per year, now suddenly, you're running a business that's got 250 employees, 150 million in venture capital, 75 million users, a blue chip roster of investors, I guess, at a personal level, have you ever felt out of your element in running a company that is continually passing new size thresholds? And if so, what kind of self talk Have you engaged in? Or what kind of help have you sought to kind of manage those types of feelings?
Every single day, I feel it every single day. And I should have never done this job before. And I from the outside, you can look in and be like, Oh, it's inevitable, there'll be successful. And now they have this guy at the helm, who's raised 150 million and all these things, but like, this isn't fake humility. Every single day, I feel out of my element. I wonder who would be a better CEO? I wonder if other CEOs have the same insecurities? So every day, I'd say it's exhausting. It's all consuming, because I think about my company all the time. And yeah, it's probably the single thing that drives me the most that makes me a better CEO, is my constant paranoia that I might not be the best person so I need to get better and work harder to be the best person. And there's no way I mean, just to be frank, there's no way Zumper would be this far if I didn't have that personality.
I'm so insecure about my own abilities and every really kind of successful CEO far beyond where I am has told me something similar that they just never felt like they were the best person. But that insecurity drove them to become the best person. So I think it's a really positive thing. So every time you or your listeners, and I'm sure all of us have gone through this, have that kind of belief. Because all of us do, I think kind of don't hate on yourself for feeling that you leverage it, leverage it to make your company even better, because all of us feel it. And I think that's the key thing I've realized is that was predestined to be an entrepreneur, for every Travis or Elon Musk, there's like 999 999 people who didn't make it. And who had the exact same, you know, abilities or skill sets, and but just just weren't at the right time or didn't quite get the right kind of turn of fate.
And I just never, I think the key thing I learned before being an entrepreneur is I used to go to tech conferences, as I was trying to get into the industry, and you listen to these people on stage, it's very easy to think you've got imposter syndrome, because there are people on stage. And then there's people in the audience and you think, Oh, these people on stage, these four panelists must be geniuses because they're on stage. And I don't know what I'm doing. And oh, they're saying all these really clever things. But like, now I'm invited to be the person on stage at some conferences, I can tell you, like everyone in the stage is making it up, like in the green room before you go on. No one knows what they're doing. We're all on cause fixing all the fires that are companies. And then everyone goes on stage that says clever things.
But no one on stage truly feels, there's any divide between the people on stage and the people in the audience, we are all the same. Everyone is just figuring it out as we go. So how to deal with that. So first of all, know that there is no predestined skill set for an entrepreneurship, you just got to grind it out be resilient. I think the best thing I found for my mental health, and to get through it, because it is an incredibly lonely job. It affects the way you interact with your family with your friends, because you could turn up to events thinking about work, you leave events thinking about work, is to find a peer set of people to be open with. And something I found, I've found three groups of people who've really helped me, in addition to my family, one is my co founders.
So I co founded a company with three other people, two of them are still at the company, radically transparent with them about what what is on my mind what's going on, even when it's bad stuff they need to know. And they have been the most amazing emotional crutches to me through the journey. The second one is my Execs. So it's not just my co founders, many of our executive team have not only become friends, but great friends and people I can completely confide in. And I find their support to be invaluable. So it isn't just people that you bring in on day one, someone who joined two years ago might be your first phone call on many things. And then potentially the most important is a peer set. So a couple of years ago, I joined this thing called YPO. His thing stands for Young Presidents Organization, but it's basically like a network of CEOs and founders.
And once a month you meet with your peers, a group of kind of eight or nine people for two or three hours, and you have complete confidentiality. And you talk about the roar of things, whether it's in your company or in your life. And it's probably been the single best impact on my mental health, YPO. Because you realize from people you look up to, CEOs that you'd heard of before, and who built amazing companies that are far bigger than yours. They've all gone through exactly the same journey you've gone through and all those insecurities about why didn't this investor invest? Or why did this person leave? Or why does this kind of sale not go through? They've been through all of those things, and you realize it's not just you, and not only can you share stories, but they're also you know, have advice for you. And so I would probably end on that one, which is the single best piece of advice I'd have is doesn't need to be YPO.
Just surround yourself with a network of people who are in exactly the same seat as you. And people who are humble and prepared to talk about failure and so that they're honest, because every entrepreneur has failure multiple times a week, meet them once a month, go for drinks, get on a zoom call and see how you feel after three or four days meetings. I don't know how you felt Steve during your job, but I felt that that was the single best thing I did for my mental health. And my like, resilience is just to know that you're not alone. And this is all completely normal.
It's so funny that you mentioned that because in 2015, I joined EO which is the Entrepreneurs Organization, sister organization of YPO. And I also regularly classify that as the best personal investment that I've ever made. Whatever the annual fees are, you know, they could double or triple them and I probably would still pay them because there's just something so instructive and so comforting about going to a table of nine other CEOs. And when you present them with a problem, you see at least half of the heads around the table shaking and saying, Yep, I remember when I went through that, here's how I felt, or here's what I did, or here's what got me through it. I think it in my experience, alleviates the dynamic of it's lonely at the top, which I think it very much is. And look, the best way to learn is from folks who have scaled the mountain that you're looking to scale.
So I found it to be incredibly helpful. My wife often jokes that it's my group therapy session. And sometimes I tell her that honestly, she's probably not far off. I mean, sometimes, I found that in one experience. On one hand, it's one thing to go to your, your YPO group or your EO group and say, hey, I'm looking to enter a new market, I want your advice on go to market strategies, who should I hire? What tool should I use? In my experience, I get most of the value from saying, hey, I'm considering entering a new market. And I'm shitting my pants because I feel like I don't know what I'm doing. And I'm really scared of this feeling and I haven't slept in the past week. That's the kind of value that I really get from my group. I don't know if your experience was similar?
Oh, totally. And I found on two levels. One is advice. And these groups have like certain protocols for how to give advice. Sometimes they say, hey, don't give advice directly give advice, as you were saying through experience. But sometimes it's like, it sounds weird, but like, somtimes someone will bring a really thorny problem to the group sometimes that I haven't experienced myself. And I sometimes I have no advice for them at all, speaking from experience, because I haven't witnessed it. But just hearing someone else go through trouble in a way that like publicly, none of us divulge. Because everyone online is crushing it and everyone's businesses are crushing it except that none of them are and everyone's going through huge struggles internally. It's so satisfying. Because yeah, my wife is an executive coach. So she coaches CEOs of these companies, but she doesn't run like a 250 person startup yet. So one day, she might.
And sometimes when my wife who's the most amazing supporter, like literally my biggest fan, I can't quite explain why a bad day is so bad. By like 10pm, I'm so disheartened by something that happened or politics I had to work through. But people that sit in your seat, are uniquely equipped to understand it in a way that your partner sometimes isn't. It's such a less lonely job, when you find a peer group who won't just come to the meeting and tell you why they're crushing it. In fact, they won't tell you they're crushing it, they'll tell you of all the problems that they're going through. And you'll be able to share with them in complete confidence the same. I want to echo what you said, Steve, it's been the single best thing I've ever done. And it doesn't need to be a fancy forum, I just didn't know these things existed. Email three friends who do similar jobs or cold emails and people and see if they want to do a network, just meet once a month, it's a game changer, such a big change.
So you mentioned, obviously the peer group is has been a huge investment for you, not necessarily in terms of cost. But in terms of benefit. I think every CEO listening to this can relate to the fact that that the demands on our time, they're essentially endless. And if you chose to work 24/7, you could probably easily do so. And I have to imagine that that is particularly true for CEOs like you running businesses growing as fast as Zumper is. Beyond joining a pure group, which has obviously been very beneficial to you, have you developed any routines or habits or practices that ensure that you're running this kind of Marathon called entrepreneurship in a healthier, sustainable way? And by that, I mean, it could be exercise, it could be meditation, it could be diet, it could be blocking off time in your calendar for hobbies, anything like that, that you've kind of baked into your lifestyle that's been particularly helpful for you?
Yeah, so I think accidentally having children like force you into this, I think before having kids I was very undisciplined. I really would work 24 hours a day. And kids has been a good forcing function because I refuse to miss their key moments. So it's not that I work less i by much, much more disciplined about my style. So for example, six to 8pm is absolutely sacrosanct that I will not work. I will end my meetings at six I have to have dinner with my kids and my wife and put them to bed, reading bedtime stories. And yes, at 8pm, I most typically logged straight back home and keep going. So that's not a great answer, but I'm not missing my kids at their best point in the day and the same in the mornings where I could have a be very rigid on my calendar. So That's one is creating blocks that are sacrosanct.
But just a riff on one is my executive assistant, Regina who's amazing, does that with my calendar. So she's also created blocks on my calendar where just no one can block meetings, whether it's internal or external. So I don't just sit on a zoom call, for like 12 hours a day, there are patches of the day where I have more energy where I do actual work, because no one can walk in. And that also ensures that I don't have to be up to one and two in the morning every night. Because I'm on zoom all day, it makes sure that I have long blocks in the day to actually achieve independent work on my own that isn't on the Zoom. And I think that's like super important. In terms of other stuff. I've come to the realization that like, I just can't be a 10 out of 10, friend, dad, soccer player, all these kind of things.
Entrepreneur, like it's impossible, there just aren't enough things in the day. So I've kind of picked the things I want to be great at. So I want to be a great family person. So that's absolutely up top, I want to be a great entrepreneur, I love what I do. And I want my company to be a success. So that's top as well. And then the other stuff is falling a bit by the wayside, you kind of got to pick, so I'm very selective with my nights out with my friends, I try and do as many as possible. But I, I won't go to all of them, but I'll be selective with the ones that I do. And then in terms of health. I am this is not a perfect answer. But I don't have as many hours in the day as I'd want to go and exercise. Like I'd love to go swim every day, I'd love to go run every day, but I just don't have those hours.
So the moment I've chosen to actually control food and weight, where I think it's really easy to get unhealthy as an entrepreneur, you don't focus on yourself. And so I've been using that if you're familiar with Noom, the light weight tracking thing, which doesn't just track your weight, it also tracks your nutrition, which is really important. And if we're using the same OCD that I do, for my own job, I've now started really tracking like the nutrients and the food that I eat. And I reduce my consumption without having pangs of hunger, by just training my body out of like snacking and all these other things. And it's been really good, where I've actually lost a fair amount of weight that I didn't even realize I had to lose. And I feel like my mental clarity is way better.
So I haven't had time to exercise as much as I want to, I haven't had time to meditate as much as I want to, I actually found controlling my foods, and to make sure I reduce my intake. And spread out much more across proteins and the good foods was a good way to kind of live a very high paced life while also not like forgetting to look after yourselves. I have other friends who've done the same thing with meditation, and I have other friends who run Iron Man's and go get their fix that way. For me, I pick the laziest option, which is just to eat less food, and to eat a more balanced diet. And I found it's like being very good for mental agility.
That's great. That's great. I love your comment about you can't be a 10 out of 10 father, entrepreneur, exercise or diet or I mean, you have to pick your battles. And I think one way that I found to kind of make the otherwise nebulous concept of well which battle do I pick is codifying your own personal core values, right? So what are the small handful of things that are uniquely important and uniquely valuable to you. And ultimately, if you have 10 things to choose from, it makes the process of choosing them much easier and much more clear. Because I find that at least in my experience is this might not be the case for everybody. But if you don't have your values codified, at the very least in your head, if if not on paper, which I think is preferable. How will you ever know if you're if you're living the way that you want to live? And it sounds like you've gone through that process, be it consciously or unconsciously?
Yeah, that's such a good way to put it. Yeah, I did it unconsciously. As a Brit, I was always very cynical about like, yeah, I have friends who are amazing, actually, mutual friends of ours from grad school, Steve, who literally have family values, that they came up with their partner that they live by, and they're kind of printed on their refrigerator. And as a Brit, I was always very cynical about that stuff. Because this sounds very, Kumbaya and very like, under like, self indulgent or anything, but it's actually not at all and you end up doing it. Like you said, I ended up doing it unconsciously, but exactly like my comment about you can't be a 10 out of 10 in everything and there are loads of people online who say you can, but you can't. There are not enough hours in the day to be a 10 out of 10 at every facet of life that we will find energizing, and you indirectly end up creating a list of values.
And yeah, for me it was my family and my company come first, and then friends and health, they're very, very, like kind of important parallel, but they're things I hadn't focused on as much before. Now I carve out time to attend to them. But you're right effectively, that's the value set I live by, where other stuffs dropped by the wayside without even knowing it. And I really do think it's a valuable exercise. In fact, Steve, let me ask you, did you ever like actually consciously go through it where you spend time and wrote them out? Or is it more like something you also evolve to almost by accident, but now we're a bit older than we used to be. You look back on and think shit, I was actually managing to these things the whole time.
You know what, I have kind of formally codified my own personal core values, and I've gone as far as written them down. However, I would say that I did it far too late. And the advice that I give to CEOs now and entrepreneurs is to do that as early as possible, because the observation that I made both in myself and others is, when you ask people what they value, almost inevitably, they will say something to the effect of family first, health second, work third. But if you were to observe those people's actions, almost inevitably, it's the complete reverse work is first, family a second, health is third. And so, you know, we say one thing, and yet we do a completely different thing. And that was certainly what I did. And I think once I realized that I was not living in accordance with my values, for some reason, a really loud alarm bell went off in my head and said, hey, this is not the life that I want to live in. This is not who I want to be. So I went as far as codifying my values. But I don't think entrepreneurs and CEOs have to go through years of not living their values and not living deliver not living deliberately. I think, as early as one can, even though I know the exercise can sound a little bit hokey and self indulgent. To actually kind of codify those values and at points, even to go as far as monthly check ins with yourself and with your spouse and say, okay, let me look back over the past 30 days, have I lived in accordance with my values? If not, what can I change for next month to make sure that I do.
That is such a good way of putting it, Steve.
So, two more questions for you before we wrap up, for those who may not be aware, you recently hired a very senior and experienced executive to be your president and COO. And I want to bring this up, because this is a very, a quote, number two, is a very, very difficult to hire for a lot of entrepreneurs and CEOs to make, if they make it at all. And if they do make it, it's one that's often prone to hiring mistakes. So I guess when you were considering whether or not to even make this hire, what worried you the most about potentially making this hire? And what did you consider some of the pros and cons before you actually made the hire?
What worried me the most to go full circle to where we started our kind of conversation today, was the lack of control. Exactly the same dynamic of like, letting go the reins and hiring an executive team. This is the ultimate one, COO often runs the sales and marketing org, which is like you know, the engine of the company. So lack of control giving it up. While I focused on all that unit, fundraising and public presence, stuff. And mission of the company was my biggest fear. The pros and cons. I think the single biggest framework I use for this was actually something that someone in my YPO group had mentioned to me, which is, this is like HBR article called, I think the concept is called the zone of genius, where the premise of the article is a lot of executives in the to buy to have a stuff you'll get out and stuff you enjoy. A lot of executives in their career, when they look back end up doing stuff they're good at, but what they don't enjoy. So we will pick up the slack from other people that they don't want to do.
And we will do it like you said at the beginning, like chief tea maker and all these other things. But actually, like the HBR article is all about the that's crazy. When you hire execs, you should hire for your zone of genius by meaning hire someone where you then as the CEO or founder get to work in your zone of genius, which is stuff you're good at, and the stuff you enjoy. Because there are people that operate in that other quadrant, which is stuff you were good at but didn't enjoy. There are people who love that quadrant, which for them, it's their zone of genius, and realizing that to empower you to go and do the stuff you love and you take energy from.It is a really big opening where instead of thinking about it as losing control, it reframed the way I thought about the hire to be like, No, it's not losing control. It's allowing me to go to do the stuff I love doing while someone else who's better than me could do the stuff I'm good at, but I don't enjoy that much. And this guy also loves doing these things. And so that was my mental model of how I got that and I am delighted we made that call.
That's so great. It's funny. You mentioned the zone of genius because I actually recently finished a book it's called The Big Leap by a psychologist named Gay Hendricks and I believe he was the one that coined the term the zone of genius. So for anybody listening that that might be worth checking out. But I had the same experience when I hired my CFO, that was one of my most impactful hires. And what I came to learn is, the exercise that I did is I tracked my own time, because I think it without tracking your own time, we are actually all pretty poor judges of how we spend our time. We'd like to think that we spend our time a certain way. But when it comes to actual practice, we often spend it a very different way. So what I did is I tracked my time and for two weeks, and I put everything in the same two by two matrix that you're referencing on the basis of, do I enjoy it? Yes or no? Am I good at it, yes or no? And in the bad quadrant, so to speak, where I didn't enjoy doing it. And I was bad at it. I found that, that almost formed a perfect job description for somebody where they would say I love doing it, and I'm good at it. In my case, those were kind of the down the fairway CFO duties sounds like in your case, those were those of a COO.
Literally, and it's eye opening, to be like, wow, there's someone else who is dying to do this job that I didn't want to do this piece of that they exist. And, of course, they exist. And they're going to be delighted to take the role. That's very empowering, when you realize that that it isn't that startups are hard, but they're not supposed to be a grind forever. Like there are weeks you're supposed to love your job, it is not always terrible. And that is a huge lever to get to that position of loving your job.
So final question I have for you before we wrap up, it's a bit of an odd one. But I will ask it nonetheless. If you could scream one thing from the proverbial mountain tops, and every entrepreneur and CEO could hear and fully digest what you say, what would you say and why?
I'd say no one is destined to be a CEO. There's no perfect skill set, we're all inventing our paths as we go, keep going. Keep pushing. Resilience is like the true hallmark of an entrepreneur. And if you're really onto something, there'll be dark days, there'll be great days, but keep pushing don't fall into the imposter syndrome model. All of us feel it. It's not real. It's just a mental model that pushes you. None of us were destined to do these jobs. Make it up as you go, persevere. And for many of you, you will get there, for many of us we will succeed. But you've just got to get over those demons that tell you you're not destined for it. Some of us aren't. And this is not for everyone. But I think the best entrepreneurs are able to shut that voice down or leverage it like we talked about earlier to become even better.
Yeah, so great. Such wise advice. I think it was Reed Hoffman who said, entrepreneurship is like jumping off a cliff and assembling the airplane on the way down. Right. So I think really consistent with what you're saying. Ant, thank you so much for your time, continued success to yourself and Zumper and thank you so much for being generous with your time and your insights today.