EP016 - How to scale your startup in the future of work with Scott Markovits
About the episode
This episode focuses on startup growth within the future of work. How can founders scale their startup when almost every company is remote-first? What should your operations look like? When should you raise funds? How to hire your first people? To discuss, I invited Scott Markovits, veteran startup consultant and host of the Leading from afar podcast.
About the guest
Scott was the first hire at InVision and helped build the foundations of the company. From marketing, sales, product, operations, and most things in between. He mentored and consulted over a thousand early-stage startups; including tens of remote ones. He is the host of the Leading from afar podcast. You can reach him via Linkedin, Twitter, or his website.
About the host
My name is Peter Benei, founder of Anywhere Consulting. My mission is to help and inspire a community of remote leaders who can bring more autonomy, transparency, and leverage to their businesses, ultimately empowering their colleagues to be happier, more independent, and more self-conscious.
Connect with me on LinkedIn.
Want to become a guest on the show? Contact me here.
Quotes from the show
I don't know if all the companies launching today would be remote. But I can tell you that 0% of companies launching today would choose hybrid.
One fundamental piece for every early-stage company that gets to a certain level is the idea around problem market fit. Everyone talks about product market fit. I'm not a believer in product market fit. We do not need more products. We have way too many of those things already. We need solutions to the problems that we have. So we need to solve a problem.
Leaders need to give ownership. It's like, hey, I assign you something, or I want you to do something. The best thing I can do is give you the ownership of how to do it. I can give you a general picture of what I see or think the success criteria are. But I need to give ownership to you on how to own that. Design it, build it, run it, whatever it is the way you want. If you understand the end goal, you can accomplish that with the ownership at hand. But it all starts with the leader giving you ownership.
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Welcome everyone. Yet another day to talk about the future of work and the future of leadership. Today we are going to talk about startup growth, especially early stage startups who got funding recently or trying to level up their game in growth, marketing and operations. I have the first employee of InVision, startup and remote leadership advisor, Scott Markovits with me for chat. Hey Scott, what's going on?
Peter, all as well. How's everything going with you?
All awesome. Tell me what's your, what's your remote journey? How did you end up here? What is this whole first employee of InVision? I know that you're working remotely for quite a while now.
Yeah.
And you're also providing mentorship and leadership consulting for others. So how did you end up here?
Yeah. So back in 2011, I was living in Long Island. I was working for an investment banking software company down in the Wall Street area. So every day I would commute about 70 to 80 minutes. I was taking a Long Island railroad into Brooklyn, transferring to the subway from Brooklyn up into Wall Street, and then walking to the office that was about 70, 80 minutes average every day each way. Would leave at about 7 10, 7 15 in the morning, get home about 7 15, 7 20 in the evening. 12 hours of my life where in and around work, whether commuting or actually working. And then you had a little bit of life that was kind of a notebook ended bef very early in the morning or after. It was really terrible. Across all the boards, emotional health, physical health, mental health, just tiring and grueling, which pretty much anyone who's commuted can absolutely understand. I saw a job post. Blah, blah, blah, blah, blah. At the bottom it said, work from home. And I'm like, bingo, I need to do this. Applied for the job, thankfully landed that job. It was an early stage company at that point that just launched called InVision which a platform for software design and collaboration. And they hired me as the operations manager. So in essence, it was basically like the CEO just without the title or the paycheck. So I came in to help build marketing and product and sales and growth and HR operations, support, success, accounts payable, you know, so on and so forth as a typical ops person does at an early stage company. And it gave me that opportunity to not have the commune anymore. And at that point, so again, this is back 2011. I knew at some point I wanted to move to Israel. And I remember having many conversations with the CEO during the interview process. I'm like, look, at some point I'm gonna want to move to Israel. It's not today, it's not tomorrow, it's not next year. But at some point I'm gonna want to go. And the fact that this company is remote, like you are going to be my ticket to get there. And the CEO kept it was always hesitant to hire me at the beginning because some of the work, especially early on by an ops manager, is kind of junior, you know, based on the experience I had at that point. But I said, Hey, I'm happy to do it because again, this is my long-term goal and this is, you know, you and the company are going to be the opportunity. So I'm happy to do these, whatever it is things. And I get the job done and kind of get to the end goal. And that was the beautiful start of my remote work experience. Completely changed the quality of my. Was able to know, take my kids to school, pick them up, do activities with them. My life, again, no more commutes. I think my commute turned into like a 62 second commute, or a two minute commute walking around the corner or to like a local coffee shop or something like that. And I've been a huge evangelist and passionate ambassador of remote work in the future of work. Ever since then, since it, it totally, completely changed the quality of life. And, you know, since then I've helping grow the company especially in the early stages, which eventually they grew to like about a thousand people all over the world, about 2 billion in valuation. My personality has always been very much of zero to one, so I love building things from scratch. I love getting my hands dirty. So I started advising startup founders who were behind where we were in growth and revenue and things like that and then one founder passing me to another, to another, to another. Then I get calls from accelerator programs and startup programs, and I think now, probably at this point, about nine, 10 years, I've coached, mentor, whatever the right word, is, probably roughly around 1500 startups all over the world. Six continents, all different spaces from FinTech to mobile health to b2b, b2c, all that kind of things. And that's what I'd love to do. I love building things like helping other people. That's I think, why we're on this planet and yeah, be able to give back and keep my skills as sharp as can be.
This is an amazing journey. And before we turn into the startup stuff, I just want to comment that on the personal level, that every time I ask people how did they end up in the remote world they always tell, with the very same words, the same thing. It changed my life, it changed how I work, how I live, how I manage or prioritize my personal stuff. And it allowed me to either travel or just, you know, in your case, simply relocate to wherever you want. This is so amazing, by the way. Just just a quick question: inVision they are based in the US or in Israel?
So there were, I guess, officially based in New York. The two co-founders had a co-working space in New York, so I guess it was located there. We had people early on all over the place. But I guess the, you call it office, whatever that capacity was in New York at the time.
So it, so it was a fully remote first company from Yeah. Which was like 10 years ago or so, right?
About, I mean they launched really, and I get about the wintertime of 2012, so about 11 years ago, and we were probably like a third or fourth all remote company all the kind of companies like Buffer and some of the other ones I think had come after our journey. So yeah, it was at the forefront. Nobody else really was doing it. Even when trying to hire somebody right now it on hiring posts like you, like to see as an added bonus, right. Previous remote work experience, like obviously not what the last pandemic was. Cause that has nothing to do with remote work. But as an added bonus, you went some. 11 years ago that didn't exist. So you can never want somebody with, hey, somebody with a previous, cuz it literally doesn't exist. There's no two or three other companies that have people that are doing that. And what we found is the most accessible people were freelancers. And I think the reason was because, hey, they're used to getting stuff done, prioritizing their time. They didn't need to have somebody looking over their shoulder and everything worked well. And what I think is a beautiful thing is we're seeing now as the, the covid has pushed this whole world so far ahead is this whole essence of async and deep work and all these mentalities. The circle's finally coming back around where we're now moving much more is a whole like whole industry in that direction where we're not looking at presence, right? We don't care about nine to fives and we don't care about Monday through Fridays. Hey, I needed this specific task, job, whatever it is, done by this specific time, whatever it is, Tuesday at four o'clock. In essence, what you do between now and Tuesday at four o'clock. It is totally irrelevant to me. I just need whatever it is by Tuesday at four o'clock, and it's exciting to kind of see the progress and kind of coming back into that because as you said, the whole big thing, and I've been ranting on this since the pandemic started, like now that it's somewhat over, we remote leaders need to kill the tag remote work, and we need to change it to remote life. That working remotely has unlocked the ability to live the quality and the dissolve, whatever it is life that we want to live because right, 12 hours of our life are every day are not dedicated to work either at the work, at the office, or going to the office or coming back to the office, or that concept of heaven forbid, right? If you could ever remember, if you remember back when you were in office. If you can remember once, I'd be surprised. Did you ever go to run an errand at 10 30 in the morning or three o'clock in the afternoon? No, heaven forbid. Right? That's what your lunch hour was. If you had a doctor's appointment, you had to run an errand.
And that's was sacred. And that was sacred. My lunchtime was sacred.
Exactly. And that was like the only okay, time to do anything for yourself was during that hour. And now again, we're moving more towards, hey, you live your life, you work, everything kind of works harmoniously. And life doesn't have to take a backseat to work and then work again, switching. It's, Hey, I can do all these things. I can live, I could work, I can, whatever it is. And everything works perfectly. So it's exciting where we're going. And yeah.
I totally get you. I did a very same commuted like one hour, like two hours total to the office, but all nothing near but in London. And Yeah, by the way, on the freelancers it's so interesting to see because you also have like a very long background in remote work, so you can relate to the perspectives here. It's so interesting to see that pre pandemic when, you know, we all worked remotely anyway, and you were also in a managerial role. I was also in a managerial role and when I hired people I had the same concept that anyone who's already an established freelancer, so nothing newbie, not someone who just started out because if they are already established, it means that they can handle it their own time. They have self-discipline, they have self time management, and they can deliver some sort of results to their clients anyway, because come on, they are established. So obviously they're not starving to death and but they're still either behind their founding their own agency or whatever it is, or their own gig or their main motivation is to stay as a freelancer. And those were the gold ones, which I always love to hire.
Yeah.
But that, that actually changed I think since pandemic or something. So a lot of full-time people were in the office or in somewhat a hybrid at that time. We didn't call it hybrid. Some of the semi work from home environment they suddenly flooded the remote work market and their motivation is totally different now. So I think the concept of like remote work, yes, it has to be killed as a title and it has to be something, well, remote life or something, or just work, work. It's it's pretty much a very same, just, you know, office is optional.
Absolutely.
Cool. Cool. Let's talk about startups then. So you are also a mentor. I'm also a mentor for, for other startups. So it's always interesting to see how people are are forming teams, growing teams, and so usually the startup companies they usually have like different stages, right? They are in the accelerator after incubator. Many people, by the way, usually switch that and mess it up.
Most of these programs are totally broken.
Yes. Yes. We should discuss that, by the way. And after that they already get their funding or seeds or something, and then series A things getting serious and so on and so on and so on. So what do you think how can you tell that that a, that a early stage company is is and will be successful? Are there any signs?
I don't think there's any signs because you can fail in so many places. I think the one fundamental, that's literally the number one fundamental piece for every early stage company get to a certain level is the idea around problem market fit, right? So everyone talks about product market fit. I'm not a believer in product market fit. We do not need more products. We have way too many of those things already. Right. We need solutions to the problems that we have. So we . Need to solve a problem. And I get, again, founders coming to me every week. I at least have like two or three. Office hour type no slots every week with founders. And I get these people coming in via email or what introduction, saying, Hey, I'm having trouble fundraising, getting people to the website, signups, trials, transitions, conversions, blah, blah, blah. And without even looking at anything that they sent me or the website, I already reply back. Yeah, happy to help. Here's my link. I'm pretty sure I'm 99% sure the issue is problem market fit. But feel free to send me whatever you want. And they reply back, oh no, I spoke to 25 people I know, or I did a survey of a hundred people and it came back like this. And I'm like, and then they send me whatever, they send me their website or information and I look at it and I say, okay, no, looking forward to talking. I'm now 99.9% sure the problem is problem market fit. Because again, you are just building another form builder, right? We don't need any more form builders like, Lord, there's way too many, like if there is an issue or a lack of something in the current form builders, like that's the thing that you fix to solve that specific workflow, product, whatever experience issue. And that's the thing that you do. And most companies don't do that. So I mean that's really linked to can you get funding? Can you get people on the website and signups and conversions and trials and things like that. Like for me, that's number one is the foundation piece. If you can do that, you can hit problem market fit. And there's a lot of pitfalls that you can have early on. One is, is team, right? There was one company that I was mentoring four or five years ago. They were based out of Germany, and they were building fantastic tool with AR, which I think had a huge opportunity, a lot of different spaces, and I was trying to guide them in one direction, kind of like training and manuals just using AR. And they had the problem market fit checked off. Again, most companies don't, and eventually they took on a company, a pilot company, right? Because startups are so desperate to bring money in, they'll do whatever it is, even though it's outside of the lane that they should be in. And then that kind of didn't really transition to something. Then the founders kind of disagreed where the business is gonna go. And eventually the company failed and broke up even though they had a great product, even though they had problem market fit, and they had a huge market that they could tackle. The founders just didn't get along. So you can have know that issue there. I've seen companies that may be solving a problem, but they're solving it for the wrong group. So they may be going to b2b where re really like the real solutions on the B2C side or vice versa that they're trying to do it for individual consumers or people who are working at like a company where the better idea is going straight after the business itself. So I think there's a lot of those issues. And then once you get past, then it could be around product development, where the product roadmap is. I feel some of the issues that happen in Invision where around on one side we did it right. Right. If you're going to build a unicorn and a SaaS product, you have to have lots of different tools, right? That's what a software platform does. Whether Zendesk or Salesforce has lots of different pieces that provide value to lots of different people within the organization, and that's how you get sticky and get much more difficult to get rid of. So we are doing that, right? And that was like one of two things I said on the first day that I joined a vision like, this is the what we need to do. So we kept on building new features for developers and product managers and UX writers, which was absolutely the right play. But at the same time, what we had failed to do is keep investing in our core product. And when you just don't invest in your core product for a long time, somebody does, and somebody kind of just chips away. And eventually, like people were dedicated and love you, but they keep getting that friction point, like that little, like the idea of no death by a thousand paper cuts. You can only get so many paper cuts until they're just like, listen, I just, I need to go to the competitor because I can't be dealing with these lack of x and move to the competitors. So I think that was a big thing once you get to I think a later stage that we were. And what I read something today I think also is cash flow. I read in the last couple days, like Stripe was trying to raise a round of like to be evaluation of like 50 billion, which is about half of where they were evaluated a year or two ago. And basically kind of saying like, Hey, we don't raise money. We may not be in business. So a company that's I saw was making like seven plus billion dollars in revenue a year. Like can somehow still spend so much money that they go outta business. So I would definitely blame this whole VC concept I think is also foundational that at fault to a lot of failure for startups because it's growth.
Oh, overblown operations.
Exactly. Growth at all costs. Hire a thousand people, which you don't need. And then we've obviously seen in the last unfortunately year, every company is downsizing and they're all saying, oh, we hire too many people. Why did you hire too many people? Because the VC says, Hey, you need to grow by X. And the only theory, the way to grow by X is by bringing on 15 new sales people and 10 new marketing people. And that's, in most cases not the right approach anyway. But especially when you're only focused on growth at all costs and not building a profitable business or sustainable business or anything like that, then again, you're gonna do all those things wrong, which eventually we're seeing is catching up with so many of these companies. And they are where they are, unfortunately. And I hope things very much change once this recession's over on how the VC model works and how investment works. But I don't know. We'll see.
You mentioned so many stuff I want to reflect to to some of them because those are again golden. Let me highlight those. So you mentioned the, the, the problem market fit, which I really love. I've seen this many times as well. Usually how it presents itself is that someone is creating yet another trading platform, yet another SaaS company for organizational development, yet another social network and so on and so on, and so on and so on. But it doesn't solve a really crucial and fundamental problem that any other competitor they have already solved. So I think one of the most helpful way to approach this for founders is to just please do a small little desktop research on the competitors around the product that you're developing that can help you to analyze a, do you need to go forward? Does the world need yet another, whatever it is. Are you solving that problem? In a more effective way that can actually give you leverage on the long term. So that's one Second one, which you mentioned that sometimes they overblow or overgrow or, or they hire too much or the whole operations side is really amateurish a little bit. What I also see, yes, by the way, but what I also see is that sometimes the founders especially in very early stage when the leadership is actually the founder circle of the company they are usually amazing people. So they are super talented. They are usually either developers or product people or, you know, someone who actually coined the idea developed into an M V P or even further. They are really experts on their field. But they lack of one very, very important part, which is business skills. So they, they don't really understand operations, how do we get revenue, what is the revenue at all? How do they get user acquisition, like the really basic marketing terms, really basic sales terms, really basic business terms, really basic operational terms. Now, we would argue maybe that accelerators and incubators and mentors like us that's why we are here for, so to teach these people, at least for the basics on how to run a company because Especially during the early stage is they, if they don't invest in learning these skills on the long run, you know, they will probably fail either way or they will struggle a lot if they don't understand marketing or sales, for example, because they're a developer focused company, they will always struggle connecting the product team with the marketing team and so on. I've seen it many, many times. So yeah. You are, you're a hundred percent right. Let's talk about a little bit of mentor at like education, like teaching, mentorship and and I think we have the same problem cuz we discuss this before pre-call as well. I do think that startup programs, they don't really understand the difference between incubator and accelerator. Yeah.
And, and those are usually fundamentally broken.
Yeah.
And that costs a lot for the startup companies, by the way.
Yeah, absolutely. So something kind of connects some of these pieces. A lot of it is stage right stage of the life cycle of the company and people have experience in certain stages. And I know when we spoke earlier this week, right, we mentioned how many startup founders, successful ones are tend to be maybe now these days in like their forties, they came from an enterprise play.
Yes.
And what happens there and, and this is a good side and and a bad side, right? There's an upside and downside of everything. They have the experience of feeling the pain, the lack of functionality, features, workflow in their job and say, Hey, I know I have this problem every day, right? I'm an accountant. And to be able to get paper receipts and this and that and the other from all these different people and resources and whatever it is, it's a real pain in the ass. Hey, if, if we could solve this, it would be so much better for my job and probably for like the whatever, a hundred thousand accountants that are in this world. And so they much more successfully understand the idea of solving a problem versus maybe a younger founder does. But what happens that, conversely on the other side, it's their experience has always been on enterprise side. So they have an understanding of how things work at enterprises and large companies. And there's one founder I've been coaching for probably about a year now, who has successfully come into software companies, roughly about a thousand people with a mature product and has grown and developed and mature product. And then he went to build something on his own and is struggling to understand of, hey, I can take a mature product that has no problem, market fit, and has a bunch of users and blah, blah, blah. But I have no clue of how to get my first paid customer. I have no clue how to get from the one to two and then two to 10 and so on, so forth, right? Cause I haven't been that, what do I put in my version one or my version two, or my version, whatever it may be. I know a sense of what to do. I know how to take a successful product and add onto. But I don't know what to do to build a successful product to get the next couple users on. And that, I think, very much links into this whole incubator versus accelerator program, which many people, again, most programs don't do right. But I know you wanna say something, so I'll let you go first.
Yeah. Yeah, sorry, just the operations side. So I see it is very, very same. So if you are a younger fund founder just dropped out of college had an amazing idea, and you're trained to build that product into something else, usually what you're struggling with is the very basic fundamental business skills, right? Now if you're older 30, 30 plus 35 plus founder, you probably are, as you said, you're really good with the, with the problem market field because you, the reason why you started the company, because you struggled with some kind of problem at your current company where you've worked for a career, usually from enterprise and and when they actually start the company and participate in whatever program, if they participate in whatever program anyway, by the way, that's not mandatory, just fyi. And fyi is not mandatory to raise funds. Fyi, you can bootstrap
Absolutely. I'm very much of a, of a fan of, of bootstrapping and trying to build a sustainable business. I think there's really kind of two use cases where it makes sense to raise money and the first is, Hey, I need $35,000 to go, or $50,000 to go build this product, right? I'm not a developer, I don't have this thing and I need to hire somebody to do it. Great. Go friends and family and so forth. And the second case is like, Hey, we're getting lots of traction again. We've hit problem market fit very early and we're growing and we just simply can't grow fast enough right? We have a hundred new leads or a thousand new leads coming in every week, and we only have two salespeople, and so we need to bring on more salespeople and SDRs and marketing people to really, there's like, we're going up, but we really need that fuel engine to really go where we're gonna go.
Yeah. Yeah.
Outside of those two, two use cases, I try to tell every founder, like, Hey, avoid raising capital for multitude of reasons. But Right the whole system is basically gets you into the system of working between handouts right here between 12 months, 18 months, and every time you keep coming back for money and hoping that you've done enough that the investor will give you more money to burn as fast as you can, or slowly as you can. Obviously, it's really the first, and then hopefully again, you've done enough in that timeframe to then go get more money and like that model like makes no no sense to me. Right? If you opened a coffee house in Budapest, right? Yes. And you served a cup of coffee, a cappuccino, and a cappuccino cost you $5. If you were selling that cappuccino for $4, you can only go back to a local bank in Budapest so long until they say, Hey, until you start selling that cappuccino for $10 and making $5 in every cappuccino they sell. We're not giving you any more money. But like, this is the whole VC mentality. It's like, Hey, it's cool that you're losing money. Like, no problem. We'll, as long as you have like a thousand people coming in your door every hour, like, we'll give you money, but as soon as like, you're not having a thousand people coming in your door anymore, well, we're not giving you any more money.
Or I can go to the fundraising ground Yes, as you said, and hire 10 and more servants two cashiers and two marketers, and one influencer marketing designers who are popping in people. But I'm still selling the $5 cappuccino to the same sized market that I already had. So yeah, that's how overgrown companies born. Just back to the enterprise part part, by the way. So if they're older a little bit then coming from enterprise, I think the main issue there is that, yeah, they get a funding, they get a problem, they are, you know, growing and whatever, and there is an operational issue that, okay, I don't know how to do sales and marketing.
Yep.
I don't know how to do finance, whatever it is, but whatever the area that you're trying to grow there, Let's build departments, because that's what I saw. That's what I saw in the enterprise. That's what I saw, that it's working. Everyone is doing that. Let's try to hire five manager, then to juniors underneath it, whatever the department is. And that's how you create 50-100 staff within your company with different silos and departments who are not talking to each other because you are replicating the very same mentality, the very same structure that you've seen in an enterprise. But those are not startup companies. They are, you know, thousands of people in an office. You won't be there within 10 years or so the whole mentality has to be changed. So they have the business skills, but we have to kind of like revive those mentality mistakes I think.
Yeah, absolutely. From, I mean, every founder that I meet, I say especially early on, and it kind of goes into what you said maybe on in a different angle that understand what you like to do and what you're good at. Do those things. If you're not good at something or you don't know how to do something, do not even bother trying. Bring in somebody. It could be an outside consultancy, it could be an agent, it could be hiring someone, right? And then maybe that eventually ends up into like a marketing team and a sales team or what have you. But do not try to do it on your own because you will waste months and lots of dollars and you will not get anywhere. And I've seen this, God knows how many times, and they keep channeling, don't do that. Bring on somebody that knows what they're doing so you get it done right. So my essence of, again, if you're going to hire a marketing person, the salesperson, and what a product person your job as a, as a founder, especially early on, that's we're called, you're the maestro, you're the conductor of the symphony, right? You know how to conduct, you're supposed to be the conductor, hey, marketing person. This is what we're thinking, right? This is based on, on the product. Hey, product person. Okay, what are we working on now? Marketing person. Understand we're working on these features. Start working on content for this. Okay. Customer experience things. What are you hear hearing from the customers? What they like, what they don't like. Okay. Product, person. How do you get it to the product person, voice of customer, how do you, and being kind of that integral piece that makes everything know work very well. Obviously it's other strategic things and big picture things as well, but for me it's like if you're not good at it and you don't enjoy to do it, don't even touch it. Outsource, understand that and get somebody else to do it that can do it right as quickly as you possibly can. But so many, especially first time founders are so hesitant to spend money, right? In America, we have a saying or the way to make money is by spending money. Yeah. So if you wanna do it right, you gotta spend money and get an expert. Get somebody that knows what they're doing because again you're never going to figure it out by listening to as many podcasts as you can and watching videos and YouTube videos, and you're not gonna figure it out, especially in a short amount of time that somebody can do it know from day one.
Let's talk about when to hire, because I think that's not, because this is an interesting topic that not everyone gets it right. And everyone has a, I think it's a kinda like a fetish stuff. Mostly for founders. And we all know the examples, right? So like, Craigslist has like 50 people, Instagram and it was sold billion something. They had like eight or I dunno, like around 10.
Yeah.
So a lot of companies, lot of successful companies operate with a, a low core staff.
Yeah.
And a bunch of experts and, and freelancers and consultants and agencies and whatever it is, service providers outside, obviously when they get acquired obviously they won't go with the acquisition, but whatever. We are talking about the core internal. I wouldn't call it like full-time, but like course core staff.
Yeah.
And I think it's very important when and why to hire.
Absolutely.
Because there are some huge, insanely big mistakes for an early stage company, if you hire badly, you not just waste the resource in terms of like the money on the person. But you also waste the time of getting a new hire and ultimately you will waste the momentum because...
Sure
...you know, competitors will, will catch up or get passed by you. So I think it's really important to decide when to hire. Do you have any tips or guidelines on on when someone should hire internally.
Yep. Yeah, absolutely. I'd say within like your first 10 employees called, you have your CEO, let's say you have a CTO, so that's two people. I'd probably have a mix of about maybe four to five more developers, cuz that tends to be what you need most by people building the thing. Your first non-developer hire, which should be around employee four or five, six, is an operations person where that person kind of takes over customer support and marketing and HR stuff from their founder. Again, for them to work focus more big picture. Potentially a product manager slash designer can come in maybe around like number 10, but outside of that, Most things should be outsourced. And this is what I tell founders all the time. Marketing, right? Marketing doesn't need to come in-house, let's call it Series A, series B, maybe series A could be a marketing manager who's in essence has that like kind of strategic marketing brain. And what their job is to bring in an outsourced agency who's doing content SEO and what all the other stuff. And then you start hiring kind of like, okay, internal teams maybe in around a series B. So that's when you really need people in marketing. You really don't need, before. HR, you don't really need a person probably about employee 20-25. And again, you even at that point, right? You really only need one HR person that early cuz you're not recruiting, you're not hiring, you know, 50 people at a time. You're only hiring or recruiting very limited. So once you probably get to. 50 people and or 50 to a hundred, you're starting to grow a lot faster than a recruiter. So even that, again, can be outsourced finance or certainly like finance stuff that's outsourced for quite a long time. So I, I'm definitely a big believer in a lot of the especially operational stuff can be outsourced. I think what has to be internal is definitely no customer support and kind of customer, because you need some, and I'm not a fan in general about outsource customer support teams. I think you need an in internal product person. So again, early on tends to be the founder is that product person. But again, I think they need to eventually move off of that, right? The founder should be, here's the big strategic picture, here's where we wanna go. Big vision, and then the product manager then comes in and figures out how to get there. But yeah, I mean, for I think for the 10 people, that's what the optimal look looks like for me. Again, it's mostly developers, it's an ops person. You know, maybe again, one product manager if it's a mobile app or something, like you need design and you're maybe doing designs very often or new features, like maybe a designer internally, but again, potentially that could be outsourced. But I think that would be my kind of outlook. Yes, don't hire all these people. Don't bring in people before you need them. And also at the same time, like, don't wait till it's too late to hire. Like, you need to kind of understand what the right flow is, what the next three, six months look like in growth, in time and effort, and how long it'll take to get this person in and will they fit in the right time. But yeah, I mean, all these cases of let's hire thousands of people and then all of a sudden, oh, we hired thousands of too many people. Yeah, fantastic.
Listeners don't see it because we are not recording the video, but I'm kind of like facepalming while you were talking. And I want to rant a little bit. Sorry about that.
Go for it.
On this hiring stuff, because I mean, if you are a early stage startup funder, you have to understand that these are like, like real examples, real problems that we saw during our career through mentorship or whatever it is. I personally saw 20 people, total headcount growing company. Kinda slowly growing. Slowly growing. Why? Because they had like two people at HR, three people on marketing, two people on sales and whatever. Finance, some companies, early stage companies, below 20 people or even below 30. They keep finance internally with multiple finance people who are making invoices and stuff like that.
It's, yeah. No way.
It's like dude there, I mean, there are SaaS companies who are automate that thing for you so it's like I don't really get why people are building full fledged departments out. And what I usually see, it's always because the founders, the original founders of the company, they came from enterprise. The worst part by the way, is when they come from consulting, enterprise consulting. So like someone from Big four or whatever sorry to say, but those are worst.
Yeah.
Because they think the startup company is pretty much we are, the whole structure is an enterprise, but we have less people pretty much that's it. And we are building the silos up from one by one and one by one and one by one. And if we grow enough and grow fast enough and grow big enough, then we will hit, I don't know, thousand people, internal staff next year.
Yeah.
So, yeah. Again, these are real problems. Don't make these mistakes. Only bring people in-house if you really need that activity.
Yeah. Even, I mean, another point I think is for return on investments, and again, I think marketing is probably the best case here, right? Yes. Really what you should be thinking is, Hey, for marketing something, I want a thousand new website visitors a week. A hundred of them, 10% of them sign up for something, and out of those a hundred, maybe 10 sign up for having a sales call. So I want 10 sales leads, right? You can go to some marketing agency and say, here, this is what I want. I want a thousand new people on my site. I want a hundred people signing up and I want 10 new leads. You go do that. Every single month, they have to hit that quota. They don't hit that quota and they go and you go, okay, sorry, I'm gonna go to another one. Right? Because as a hopefully full stack agency, you have SEO people and content people and as the agency, understand for your product and your space. Here's what this, I think that for years exactly, but if you're now hiring, okay, so you're hiring a marketing manager, and then you need to hire like an SEO person and a social media ads person and a content person, and you're paying for all these people and maybe one size driving traction, and another is in, because maybe you're doing content but it's not right sEO or you're doing seo but you don't have any content. It's so you're not getting results. And then what do you do? Right? You're still trying to get the thousand 110, but you don't have the right pieces in play. You're paying a whole bunch of money for that. Versus, again, that's the case of no, your ops person manages that relationship. Certainly pre-seed. Certainly seed can probably do it, series A, again, series A is maybe when you wanna bring some kind of marketing person who again, understands the big picture and what's involved, and they own that ownership of the outside agency until maybe a series B where you start bringing them internally. Maybe outside of like a content writer or something like that. But again, why am I gonna hire all these people? Am I gonna fire them? Right? The SEO person didn't rank us in a certain thing. Okay, you're fired. Am I gonna keep firing and hiring new SEO people? No, like the cost and time, like versus just agency A, this is what I want you hit to as results. You're on onboard, you have business next month, you don't, I'm gonna go to some other agency who's gonna do it for me instead?
Also, onboarding shorter. Onboarding shorter. Everything is super, super faster.
Absolutely.
For the company as a C M O for hire for startup companies, I usually tell that The first two hires, as you said, apart from the devs.
Yep.
When you're building products, the two ops manager, one is internally operations who handles pretty much everything internally.
Yep.
I think it should come from, well it depends, but either from HR people or business operations side a little bit. And the second part second person that you need to hear is an external operations person. And that should come from communications or branding or something like that because the fact is that most startup founders, they are not well-versed in any kind of, Marketing or growth or communications.
Yeah.
So they need someone who actually manages that for them and that person who is actually managing the whole stuff. That should be internal. That should be an operations person. Yeah. And the reason why communications or branding is super important because the technology itself, so for example, growth hacking or whatever mm-hmm. , that's a hundred percent agency stuff. So you don't need someone to actually do that for you internally.
You can rely on either freelancers or either agencies. It doesn't matter.
Sure.
Yeah. Good. So great. Let's talk about remote stuff.
Yes.
So what I usually tell again is to not Yes, build out your product. Yes. Focus on the fund and so on and so on. But still keep an eye and start to build out some sort of a foundation for operations and I'm brave enough to say that most startup companies right now who are just getting started, I think they are by default remote first just for pure cost efficiency and and option to hire anyone from anywhere. But they still don't really spend too much energy, I think, and resources to build out the internal operations. So where should we start? If you would be a founder, what would be the first two to three steps that you need to make sure that the company we'll able to run smoothly? Remote first, a, b, can scale up to a certain size of team within a short period of time.
Yeah. So I don't know if I'd say a hundred percent of companies that are launching today would be remote. What I can tell you is 0% of companies that are launching today would choose hybrid, right? Nobody would choose of like, Hey, I'm gonna hire five people, and some that are gonna be in office and some are not and some are gonna live here and some are... that's for absolutely sure. No way, nobody's creating a hybrid business today. It's either office space, which, okay, if that's what you wanna do, that's great. If you have two, three people in the same neighborhood and you wanna go rent a WeWork space, go for it. Or, yes, I think, you know, certainly the majority of our people are, are going remote. I think foundation number one of operational pieces, I think the biggest issue, it's, you know, especially with startups, is just like, hey, just gotta survive, right? Survival mode and you just gotta keep pushing and getting stuff out there and you know, people don't, and I think a lot of that also comes, I would probably say more, From the younger generation who didn't come from the enterprise where they don't see the big picture, they don't see how things really need, if you get to be a certain success, like you need to have all these things operating and running smoothly. So when you come from day one, like you have that big picture, but then you understand, okay, how do we put the pieces in to get there? I think when you don't have the experience, you don't come from the enterprise. It's like, okay, well, you know, we'll figure it out when we get there. Let's just do this now. Let's get this to the next step. And the next step we'll figure out whatever. And many times again, you may survive, but you're gonna make a whole bunch of mistakes that are gonna, you know, cost in, in different, different capacities. I think the number one thing that you have to do is remote organization. And especially being remote first is understanding what it really means. What it really means to be a remote first, and why you wanna be a remote first. And that can't be as, oh, just cuz we wanna save money. Right? Because it may come all of a sudden, like six months from now you raise like a 10 million seed round. Well now you have a whole ton of money to go play with. And now maybe the whole idea of remote first isn't as exciting. And now, okay, I know a couple of us wanna go for an office know, we'll get an office cause we all work here and know Tel Avivs. So we're gonna get a space down there and now know you're in Budapest and I have somebody in Paris and I have someone else. And like you're isolated. But there's a core group of people so you have to know why. And if it's not for the right reasons, then obviously don't do it. I think the next thing is documentation, right? You need to document everything. Everything. You know what the policy is, what the procedures, what the company mission is, what the company values are, everyone should be documenting how to do their job, right? This is Scott. I'm the operations person. Here's how to do Scott's job. Here's all the things that I do. Here's all the tools that I need. Here's access. And also giving access. Cause I think that obviously links into this whole concept of Taking time off and whether people do and whether don't, like, if I know that you, Peter, anything that I would possibly need from you is in a document and I know how to access what I would possibly need from you, or if I couldn't, I know who to go to in your place, then you would feel a lot more comfortable taking the time off because you're knowing, well, I'm not, I'm not holding anyone back and anyone knows that, hey, if you needed to get this, I don't know, social media campaign, right? We wanna do a contest, right? I know exactly how to do it. I can do it myself, or I know who on your team can handle this in your place. But if you're not there and it's not documented when now you're holding me back. So I think number two, foundation is document everything. Number three, I'd probably say it's, I mean the foundation of remote is intentionality. So regardless of what you do, so it's how you onboard, how you hire people, how you onboard people, how you do learning and development, how you do training, how you do engagement, how you do anything. It has to be intentionally designed. And I still see this mistake and I see articles all the time in different capacities of, oh no, the young generations should still come to the office, right? Because that's where they're really going to learn and gather the skills that they're going to need later in life. Why? Because the company in the last three years hasn't understood well the future is remote. And us older now 40 year olds with families and kids who live in the suburbs, like we're obviously the ones who don't wanna come into an office. Well, if we're not gonna come back to the office and like the 20 year old kid is coming to the office, who are they gonna learn from? So these companies haven't realized, okay, well how do we redesign this mentoring and learning and development in a remote environment, right? Because if I'm not in the sitting here in an office and you're not sitting here behind me, like looking over my shoulder, and somehow I don't know how you're gonna learn anything that way, but let's assume that you could. What do you do now? It's not gonna happen anymore. So you need to think about, okay, let's think about lunch and learns. Let's think about, if you're an engineers like pair-coding, like get the junior developer and the senior one together to do pair-coding. Let's do actual mentorship. Let's have the senior person team up with the junior person do that. Let's bring an external consultants. Let's redesign how to intentionally create those opportunities. Same thing for onboarding. Same thing for the water Cooler moments, right? Oh, we need the now, we need the office, because that's where culture happens and that's where conversations and things like that happen. Okay? Work, work you could do at home, but the culture ha, the office has zero to do with the culture. It's the people. If you are hoping people are gonna talk to each other and build relationships just by themselves and right. And human, human beings aren't that way unless you're an extrovert like Scott. And Scott will just DM everybody on Slack and say, Hey, I'm Scott, I'm in Israel. I wanna jump on a a five minute zoom call just to connect there. There aren't so many Scotts in any kind of company. Most people are are not that way. So unless you intentionally create those opportunities to build, relationships are not going to happen on themselves. So I think that's probably the most important foundation. It's like whatever, whatever it is, in a remote setup, it has to be intentional. And if you don't have that intentional design and intentional reasons for doing anything, nothing is gonna happen by itself. And if it does, it's going to take a very long time and you're gonna have different experiences. Like one team may do something very well and another team doesn't do it well, and you're gonna have totally disjointed culture or whatever, know that that piece is, because it's not done intentionally from the top down.
In practical terms, it means that you need to build policies and also you need to build out sort of like routines or habits internally that connects people proactively. Just a quick note on the water cooler conversations in the office. They are not proactive, but organic of course, but it also makes them shallow. And what I've always experienced is that the lunch breaks, those are the network kicking bets. In, in the office most of the time. The water coolers are usually just you know, just chit-chat. It's not the culture, it's the people. It's not just the people, but the way you work as a company, that is the culture that you have in your company. And if it's not intentional, and if it's the intention is not to connect people with each other and lay out the very transparent, open policies for everyone, this is how we work then, then you have a serious issue with culture. And I think even if you, if you're an early stage company you need to step a little bit back as a founder because it's not about you. That's also super important thing to tell. It's not about, although it is your company, yes. It is not about you. It is about the people who are working for that company and with you. You need to step a little bit back and create everything intentionally Absolutely. So people can join.
Absolutely. And I think this, this is an one of the biggest issues in leadership I've seen over God the last 20 something years since I've been doing leadership. It's not having the right understanding of why people are involved or joining a company. And I see in lots of different capacities, I see in one, one of my favorite questions on a job application is, why do you wanna join our company? Are you getting people to tomorrows? Are you curing cancer? No. You're an accounting software. Realistically, that person doesn't give a crap about accounting or accountants or anything else, right? They need a job or they have a job and they wanna make more money, right? That's in all honesty, that's why they're looking, right? They're not working now. They need a job. Hey, that's what they're applying for. They could care less what the hell you do? They just want a paycheck. But you see those questions all the time. I hate those questions. Number two, I've spoken to founders who are frustrated. Like they're working 18 hour days and they're grinding it, and like their team isn't, and like, why aren't their team working harder? Why aren't they working extra hours and this and that and the other? And I try to say, Hey, listen, right, this is your baby. Right. Number one, it's your baby. It's not theirs. So what does that mean? Number one, your salary is most likely quite a bit higher than their salary is. That's number one. Number two, let's say you build a successful company together, right? You work together, you build something awesome, and one day you have an exit. You are going to have hopefully retirement set up. Those, especially even early people, they're not retiring, right? Even if they were like one of the first hires, they may have enough money for buy a house or pay off a mortgage or suicide like, but they're not retiring. So the amount of equity and ownership that you have versus like the employees are doing all the work is like totally the opposite ends of the spectrum. So of course, like in essence, do they care about building a 10 billion company? No, because if you sold the company for 10 billion, they're not getting a hundred million check. No, you're getting, maybe you're getting 20 billion and they're getting a million dollars. Okay, that's great. Don't get me wrong. But like, and that's just not the same. And it's also of not understanding that your job is a leader. Cause most people are managers, unfortunately, like most people are managers, they're not leaders. There's a very core difference, right? Just look on, on LinkedIn, you see all the infographics, all the die between managers and leaders.
Yes.
Your job as a leader, your success is simply based on your team's success, right? So you need to put your team first, right? I think the best book, every leader that I work with, that I say, Hey, if you were gonna read book, one book, and I and I, many times I buy it for them, it's Simon Sinek's Leaders eat last, right? It happened on my shelf above me. I don't think there's any better book. Like your job as leader, your team comes first. They need to be successful first. But again, if you're a manager, you ain't thinking that way. You're thinking I have to be successful and I have to do this. And heaven forbid, someone on my team steps up and kind of makes me look bad or no objects to something I say and can't do that. It's actual nonsense.
A hundred percent agree. You mentioned Sinek as one of the influencer in this almost like a spiritual influencer.
Absolutely.
And I wanted to ask this because I, I feel this is a, it's important for you. B I think it's super important for others to learn from that. On LinkedIn, you. Sometimes share how leadership can be, well, not influenced, but on what leaders can learn, for example, from the Bible
Yeah.
Or any kind of spiritual material. You live in Israel and in Israel there is the sabbath rule.
Yeah.
Which I also know. And it's so great how you turn the whole spiritual Bible, whatever it is, into a practical approach.
Yep.
That you need to take a break even if you are a founder of a startup company.
Yeah.
From work for, for at least a day or something.
Yeah.
Just to make sure that, you know, it really, it is really helpful. You absolutely, it influences you. It's, it inspires you. You kinda like, reconnect with, you know, kinda like reality a little bit. You step outside from the circle and reflect back what you, what you actually gained. Any kind of tips or anything that you want to share around these where to look for if you are. Because sometimes of what I feel also part of the coaching and the mentoring I think is and don't get me wrong, anyone actually a mentor ee to me. But sometimes it's a therapeutic work.
For sure. For sure at least half of it is, it's somebody complaining and like, I'm struggling with this. I'm struggling with that. Like, absolutely.
Sometimes I feel like an unlicensed psychiatrist, but yeah. Yeah, yeah. It's really weird to to say this, but still that's the reality. And so for example from the Bible, that you value so much. So what kind of stuff that you can get out from it and provide it to the leaders? I'm curious to learn.
Yeah, I mean there, there's so much. Every, I would say everything you know, we, religious Jewish people believe that like the Bible was given by God. So God is perfect. So everything that is written in, in the Bible and all the lessons is obviously perfect. It's impossible to get any better than that. So we understand all those stories, like that's the gold standard of what you wouldn't do something. So I think there's lots of ideas. I think one of the things I'm going to write about soon is in a couple of every week there's a different quarter portion. So part of the Bible, it's broken up into sections and every week you read a different one. So one coming up. Probably, maybe about know three or so weeks from today when we're recording this is the story of Jethro. Who is Moses' father-in-law. So Jethro's father-in-law comes out one day to visit his, his son-in-law, Moses, who's sitting there with like a line of like a thousand people who are complaining about something. And all he does from sunrise to sunset is understand and hear cases and battles being a judge and a mentor and a da da. And he says to Moses, he's like, listen, what the hell are you doing? Like, you're gonna totally burn out. You can't, you are the leader who's 80 years old and pleasant forget about the age. But you one being can't sit from 12, like 12 hours sitting and listening to all these things. So number one, you need to take breaks and we learn kind of the concept of importance of breaks, but also you need to delegate, right? You need to put kind of judges or other people, advisors below you and kind of set a system where step one, they go to like their local closest person and they have a case or if there's no solution, okay, then you go to the next level up and then the next level up. And similar to basically how like the court system.
Sure.
At least in America, maybe Europe as well, where you go local court and state court and eventually, if it can't be answered by anybody else, at least in America, I know it gets to the Supreme Court and they're the ones who make the answers. So we're similar, like you need to understand the idea of delegation, right? You can't do everything you need to delegate and most, so delegate important, also give ownership, right? That, I think that's one of the also issues of leaders. It's, Hey, I assign you something, right? Or I want you to go do something. The best thing I can do is give you the ownership of how to do it. I can give you kind of the general picture of what I see it as, or what I think the success criteria are. But I need to give you the ownership of how to own that. Design it, build it, run it, whatever it is the way you want. If you understand kind of what the end goal is, that's where you need to go. And running in that I think is an important thing. Another idea is the story of Joseph, which was in the last. Past couple weeks, we saw kind of one case after the other. Long story is some point he gets sold into Egypt. He lands in like one kind of minister's house, he's like some nobody. And all of a sudden he notice, become like, he becomes like the top guy in that house. Then he goes into jail and he is like nobody in the bottom. And he becomes like the runner of the jail. And we see consistently, it kind of goes from the bottom to the top running the show. And I think that's also what we had mentioned before is every leader needs to understand what they're good at. Right. And I think Joseph understood, hey, I'm great at organization. I'm great in being like that conductor. I may not be the best person who's, you know, collecting the flour and the wheat to save for the next seven years. I may not be the best person to do the specific jobs, but I am the best person, my skills are great in organizing, in strategy. So that's what I need to be doing. And I think we consistently, through the story of Joseph, we keep seeing that move from like the bottom goes to the top because that's where his success really comes. And obviously the success of everyone around him comes from that place. And again, I definitely believe in that similar idea of, hey again, know what you're good at. Know what you enjoy doing. Do those things because you're gonna bring success to the things that are around you. And those things that are not go give to someone else again. That's their success is I could probably go on for hours and hours with different.
Man. I love it. I love it.
Yeah. But I mean, there's lots of different ideas of, another thing I was thinking about starting to work on is the connection of async and deep work. I think I've just actually started this today. Started, right? The idea of last year, 18 months async and deep work and all that stuff. A hundred percent super important. We see that again, also in the Bible of the story of Yom Kippur, right? Which is the high holly, the kind of ultimate of holidays in the Jewish calendar where the high priest has this whole ceremony that he literally takes like all day. And part of that ceremony, he's working with other priests, but there's a core piece where it's just the high priest in God, right? Just the two of them. And we understand from our sages that the high priest, literally every second of whatever minutes, hours, that he was alone with God, had to have the perfect concentration literally on what the job is and things like that. And if like the attention broke or his mind went to something else, he dropped dead immediately and they, they'd have to like figure out a way to get him out. So even part of that job to be successful in atoning for the entire nation and doing all that stuff was deep work, right? Just him alone with his thoughts, with God focusing on the right things. And that was the only way to get the job done, right? That was the only way to atone for the entire nation of sins and things like that. Was the high priest needed some found of his day, focused on deep work and no distractions, no synchronous, no slack pings, no notifications, no, no meetings, no emails. Hey, just me and a specific task I need to do to be, get this job done or make the company successful. So like literally everything about IRLs, right? I did think about IRLs for starting and getting people together and how important it is and what you need to do with them, and how often and literally everything. Everything that we talk about for the future of work. Everything that we talk about, the best case of leaders, literally everything is in the Bible. And again, we can learn so much from it, whether you wanna learn from it from a religious aspect like I do, or you just wanna take it as here's like a set of stories and like lessons to learn. Again, you don't want the religious connection. Okay, that's everyone for their own, but like the gold standards of how to do things the right way, like it's all there.
I love it. Actually. This is so inspiring. And thank you for sharing all of that. No, for sure. Where, I think we are so much out of time.
Talk all day long here.
That's right. Where people can find you and and just some connection details, please at the end.
Yeah. So social media, LinkedIn, Twitter. So I think I'm the only Scott Markovits that's, it's vees and Victor I T S like even on my college diploma, they spelled it wrong with a Z at the end. So it's an S, you can find me . The same thing on Twitter, the handles are the same. I have a website scottmarkovits.com for the podcast that I do specifically on the topic of remote leadership. It's leading from afar. So leadingfromafar.com. And certainly if I can be helpful in any capacity, whether it's leadership, whether it's the future of work, whether it's building companies, whatever the heck it is, I'm more than happy to, to be helpful to anyone in your community.
Thank you. Thank you for sharing. And again, thanks for coming here. Thanks for the long and inspiring talk. Thank you for your time. That was amazing.
Thank you so much. Thank you so much for the opportunity to come on here and share some thoughts and have a great conversation with you.
Cheers, man. That was amazing.
Awesome. Have a fantastic day.
