Podcast

Scaling Up [S1.E4]: ‘Cracking the Culture Code’ with Didier Elzingha, co-founder and CEO of Culture Amp

There are few CEOs who understand just how large of an impact people and culture have on an organisation's bottom line. In this episode, Didier discusses his scaling journey pioneering the new software category of culture management.

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Ed (00:49)
My guest today is Didier, co-founder and CEO of Culture Amp, A people and culture platform with a mission of power and culture focused companies right around the world. This is a vision very close to my heart as the cultivation and maintenance of cultures, whether it be corporate or sporting teams, has always really fascinated me. Culture Amp is a pinup of the growing Australian technology scene, having only recently just reached unicorn status and the covered billion dollar valuation. While on the periphery, this founding journey could be seen to be somewhat that of a quintessential fast growing technology business venture capital funded global focus from day one, and the variety of scaling issues that come from this. Perhaps what separates this story and what I loved hearing about is the belief required to build a business and go after an opportunity in a category that did not even exist at the time.

That to me is pure entrepreneurship. What inspires me most about Culture Amp is the fact that while attempting to help every other business in the world focus their attention on culture, Didier and his co-founders have had the added pressure of building a business that itself as needed to be a beacon of light of what is possible by placing people and culture at the heart of their own workplace. I was engrossed in Didier and his thoughtfulness and a whole range of topics to me. He really is one of Australia’s great NextGen founders. Didier, welcome to Scaling Up. Thank you for taking the time. I know the life of a CEO whose business is doubling year on year is a frenetic one. So to carve out now of your time, I’m incredibly grateful.

Didier (02:45)
Thank you. I’m happy to be here.

Ed (02:47)
I’d love to start with the founding story of culture cause it’s one that I find incredibly intriguing and maybe you can transport me back a decade. At the time you were the CEO of a Hollywood special effects business, and maybe you can describe your thoughts as to why Culture Amp as it is today was sort of the scratch in your mind that you had to itch

Didier (03:10)
And point of pointless trivia, visual effects rather than special effects. So sorry, special effects is blowing stuff up, which is super cool. Pyrotechnics and explosives and squibs visual effects is computer generated imagery. So my mistake, yeah, what we were doing. So yeah, going back a little over a decade actually go back to 2006 where one of the genesis points for me was going through Entrepreneur of the Year. I was going through that with Rising Sun Pitches, myself and the founders of Rising Sun went up for our category in South Australia and we won and then we went to the Nationals. And at the Nationals I met two young guys by the name of Mike Cannon-Brooks and Scott Farquhar, who were running a little software company at the time called Atlassian. And we became friends off the back of that. And over the next three years I was continuing to run Rising Sun pitchers and I was watching them build this incredible software company with essentially a monotonic revenue curve.

And it started me thinking around challenges in industries and business models. And I’ve said a few times there’s a buffet line that was going through my head, which was when a management team with a reputation for good results meets an industry with a reputation for poor economics. It’s the industry that survives with its reputation intact. And along with airlines and other things the film industry is like that. And so it took me three years to sort of come to the realization. I was in film for 13 years. I was the CEO for five and I loved people, I loved storytelling, I loved digital technology, and I just felt like I wanted to make more of a change in the world than I could make running a service company for Hollywood. And I remember talking to Greta about it and she supported me and backed me and said, look, you’re still young enough to fail.

What do you want to do? So I thought, all right, I want to build a software company. I already had built another little software company on the side in the film space. It was called Rising Sun Research now called Spective. And I was thinking, okay, I’m not going to do it in the film industry because it’s limited to a degree. What do I care about? And I thought about all sorts of things. I drop all these different business models, but I kept coming back to people and culture and I thought about what I was doing at Rising Sun. And a lot of it was actually applying early agile, applying a lot of what we would call today as the future of work type stuff to how we made films and how we created images. And so I thought that’s where I want to build a company. I want to build a company that’s supporting people in this journey that’s helping people put culture at the heart of what they’re doing. And that was the thing that led to me going, all right, let’s go build a software company and let’s make it a people and culture one

Ed (05:47)
Incredible. And the leap of faith at that point in time is huge. And maybe you can describe the validation points around the first 24 months and how that evolved. But there are innovative companies disrupting the world, no end, whether it be doing it faster, doing it cheaper, producing a better customer experience, but you went after a category that didn’t really exist at the time. And so what was that leap of faith like to go after something completely, well, not even nascent white space.

Didier (06:18)
I think to be successful as an entrepreneur, you have to be both naive and arrogant because if you really knew how hard it was going to be, you probably wouldn’t do it. And if who are you to think that you can do something that thousands of other people have tried and we’ll try to do? And so there’s an element of that. And interestingly, when I stepped off to do it and decided I wanted to focus in this space, I looked around and HR is a really interesting area because it’s a lot bigger now than maybe it was certainly HR tech, and there’s reasons for that which we can talk about. But even at the time there was still lots of big businesses actually making reasonable amount of revenue. And part of what gave me the desire to do it is I looked at a lot of what they were doing.

I’m like, this stuff’s all crap. I was actually just looking at the software going, this stuff’s rubbish. And I think there was a window where a lot of people have started, the companies that we look at today, these amazing companies, whether it’s like a Zendesk or a Slack or an Asana or whatever, and what’s happened is they’ve looked around and just gone, why is nobody building software that anybody actually wants to use? And at the time in the HR space, everything was moving to the cloud, and so it was just give me my process in the cloud and it was ugly and it was slow and it was horrible. And I think companies like Culture Amp were built on the next wave of questioning, which is that process doesn’t work, give me a better process. That’s technology enabled.

Ed (07:38)
And maybe you can describe, I mean just to hone in on this, no software experience, no experience in HR or surveys. Just let us into the first 12, 24 months of that journey of you discovering this brave new world and then maybe some validation points that you had along the way that you turned the light bulb on as to were onto something.

Didier (08:03)
So I did have some experience, so I was trained as a software engineer. And so my first job, my first job in visual effects was actually writing a tool to manage a motion control rig. And I built this other software company. And so that was actually probably one of the formative things that I actually don’t reflect on a lot. But the reason we built the very first piece of software at Rising Sun was at the time, this was in the transition from analog to digital film. So we would finish a shot, I would composite a shot, and then I would’ve to put it on a tape and send the tape to the US and then they would print it out and then we’d get the film back and we’d go to the theater and we’d look at it and then we’d say, oh, this isn’t quite right, we got to change it two week turnaround.

It’s horrible. And so at the time, Kodak had a system called Syon, which you could buy for about $60,000 that did proofing of it. So you could see on your monitor what it was going to look like on film. So we tried to buy one, but Kodak, in their infinite wisdom had decided that rather than embracing digital technology and digital film, they were essentially going to delay it as long as possible and make as much money as they could off their traditional analog world, which worked out really, really well for them. So Tony Clark, who was the founder of Rising Sun pictures, one of the four founders came to me and basically put a big thick reproduction of color book on my table and said, Kodak won’t sell us this. I don’t think it’s that hard. Read this book and just build a color transform and we could do it by doing a profile of everything.

So I went away and looked at it, came back and said, yeah, we can do this. And so we built it. And then part of my job while I was running Rising Sun was I was going around the world convincing other people to buy our software. And so I’d learned a lot from that and that probably helped demystify the process for me. I knew that I could a, build a piece of software and B, I could sell that piece of software. And it was also why from day one I wanted to be global because I’d seen that opportunity. But to the other point, I didn’t have any survey experience. I’m not a psychologist. My wife is and my dad is, but I didn’t have that. So I actually thought about that early on and the way I rationalized it for myself was, no, but I’m an executive that cares about people and at the end of the day, that’s where this should be coming from anyway. And so I leaned on my wife and my dad and others to give me insights and then I just read a lot and kind of formed a view and thought, all right, we can do this better.

Ed (10:12)
Incredible. And your early customers generally were fast growing technology companies, as you say, these new age businesses that really aligned with your mission of giving them a platform to scale their own cultures. Was that tactical on your behalf or did you find Culture Amp sort of growing like a weed amongst the technology space?

Didier (10:33)
It’s always looks more intentional in hindsight than it actually is. I mean in the early days because we bootstrapped the company through to a million dollars in ARR, and in the early days you’re happy for any customer wherever they come from and you, you’re pitching yourself all over the place. What we found was that in the Valley there was a concentration of people that were scaling like crazy thinking about how to deal with this culture and people issues and wanted data. And so there are many ways they were the perfect ground for us, A as is they are in a lot of companies. I mean there’s a reason why so many companies get their early wave of people there because they’re classic early adopters. And what we found is once we got a little bit of critical mass, we got a lot of work out of that. But even early on, and certainly now we found that it’s a universal problem. And it doesn’t matter whether you’re a trucking company in the Midwest or whether you’re a large service business or whether you’re a small retailer, you’re dealing with people and culture. And so the valleys where we got started, but we very quickly discovered that our problem was universal and we needed to go as fast and fast as we could.

Ed (11:38)
And very early on in the business you realize the power of building a community around Culture Amp. And I think at the time you called them people geeks, they’re still known as people geeks. I’m a people geek. Maybe you can give some insight. The strategy of this and how it’s impacted the business or the Slack channel’s insane for anyone that wants to be part of that. The Culture first conference that you now put on is the Woodstock for your modern day HR executive. That was obviously a deliberate strategic move.

Didier (12:11)
I mean we talked about it early on and there’s almost a leap of faith, which is if we build a big enough world of people that care about the problems we care about, then enough of them will be customers that we can build a great business. And part of it came from just what we liked doing, but also what we observed. So we started running events in various places that we were and we would turn up in New York and we’d host an event and then we’d get a group of people together and we’d get someone from Chanel and we’d get someone from a sports company and we’d get someone from a tech company and then we’d say, ah, have you met? And they’re like, no. And we’re like, why is it that these crazy Australians can fly over and hang out a shingle and get all these people together?

What is it that’s missing that’s stopping people from connecting? And so we saw this opportunity and we invested in it because it felt right for us and our brand. And the way we think of it is that culture first is a concept which is that you believe that putting culture first is the biggest lever to success. That is a truth, that philosophy that resonates with a very large number of people. And so our community efforts are connecting and talking to those people inside that there is a group of those people that want to roll up the sleeves and be active participants. They’re the people geeks and they’re the people that we really, really focus on and then inside that are our customers. And you have to be willing to make bets where we have all sorts of sophisticated attribution models and all that sort of stuff.

But you can’t sit down and say a dollar spent on community presents a dollar on revenue, a bigger play than that. And it takes the whole company too. So I had somebody that asked me early on who was building another software company, he’s like, oh, I love this community thing. Can you give me any tips? And my biggest tip was it has to be a whole of company effort. If you just create a community team and ask them to build it, it won’t work. And we now have people that just dedicate on it. But for a long time in the company, you went to a culture app event, it was the lawyer at the door, the engineers doing tickets, everybody wanted to be part of the community in the company as well

Ed (14:07)
Living and breathing the values.

Didier (14:10)
And people were connected to it because they wanted to be part of that, whether it was Culture Amp or somewhere else, they wanted to do this work

Ed (14:15)
While you are trying to change the world and build a platform for businesses to put culture at the heart of everything they do. But I imagine the biggest challenge you have is to build a company that’s putting culture at the heart of what they do. You’ve got the challenge of Culture Amp needs to be a beacon and is a beacon for all the things that you are trying to sell. And as the CEO, you are in charge of ensuring that Culture Amp is doing it properly. I’d love to dig into that.

Didier (14:44)
Yeah, I mean how long we got a few hours. I think it’s definitely true. When I think about what is important to me in building a successful company, I started Culture Amp cause I wanted to make more dents in the universe. I want to build a product that helps thousands of companies around the world make progress on this. We talk about our mission being we want to create a better world of work. And the way we think about it from a vision point of view is that we want to do that in a way that amplifies the experience and the impact that over a hundred million people have. That’s 1% of the world’s population. So that in a way is what winning looks like for us. But what is even more important to me both in that if it doesn’t happen, I won’t be proud of the thing I created, but also I believe it’s the only way to achieve that success is what type of company we are, is to be culture first, to scale ourselves.

And so when I talk about it internally, the legacy that I want to leave is that I build a culture first company at scale. Not just that I built something that allowed other people to be successful at it. And there’s an inherent intention in that, which we often talk about internally of this winning versus being culture first. And sometimes people see them as being at odds with each other that the more you focus on being successful, the less you can be Culture first and sports background, one of the things I often reflect back on is it goes back to sport. And the way we think about it, and the analogy that I always use is a basketball one, which was that Houston Rockets started shooting more threes in basketball than anybody ever had and nobody cared because they weren’t very good. And then Golden State won a championship shooting more threes than anybody ever had, and they changed the way the game was played.

That’s my goal. My goal is to change the way the game played. The challenge is a, you’re setting expectations very, very high. And when you don’t deliver on those expectations and you won’t, at times we set a goal of trying to deliver a certain experience to everyone in the company. And times we don’t get there it feels even worse. So there are companies that go, Hey, we don’t pretend to be a good place to work, and they never disappoint anybody because they’re not. We’re attempting to be an amazing place and we don’t always get there. And so that’s a challenge but it’s also what I think is at the heart of a true culture first company. There’s no such thing as perfection, a perfect company as a cult what we are trying to be is honest and focused and really taking a growth mindset, not a fixed mindset to this and trying to build something amazing and being willing to try things that don’t work.

Ed (17:15)
I’m a big believer that there’s a deep congruency between winning and winning the right way because by winning the right way, you are actually setting yourself up to be very durable for the long term because people will come and go, but the culture of that business will hold true if you can make it do so for a very, very long time. And that will be your greatest competitive advantage over a very long period of time.

Didier (17:40)
And I think that’s so interesting when you look at sports, and I think sports are probably an overused analogy for business, but so much of the actual result comes down to infinitesimal things. And so if you take a slightly longer view, we love the idea of heroes that always win and winners and all this sort of stuff, but sometimes it’s somewhat just chance. At the end of the day, the score is what the score is. As a famous the Walsh book the score will take care of itself on any given Sunday will win or lose, but we can choose how we prepare and how we play. And I think the ones that stand the test of the times are when you stand back and look at it and go, the consistency that they played at, not whether they won that game or that game, but they were able to maintain a level for such a long time, whether it’s the All Blacks San Antonio Spurs, there’s a culture there that is delivering consistent excellence

Ed (18:29)
Without doubt. And that that’s the world that I lived and breathed for so long. And it’s so hard. It is. Well, scaling a billion dollar business is probably harder, but you’re right, it is hard.

Didier (18:42)
I wouldn’t want to try and take the ashes.

Ed (18:44)
I mean you did touch on it from almost day one. You knew this business had to be a global business. And so within two years and then 18 months onto that, there was San Francisco, an office in New York, London, and all of a sudden it’s not just scaling a business, it’s scaling multiple offices across different time zones, geographies and ensuring the cultures at the heart of each and everything of in terms of their decisions and their behaviors as to how they’re making those internally. How did you manage that? It blows my mind even trying to describe that and I’m sure you know are very comfortable with multiculturalism in this organization, but there must have been a set of values at the heart of that. And I’m keen to understand how that scaling problem was probably exponential.

Didier (19:32)
Yeah, I mean the, we’ll be able five, 10 years from now we’ll be able to look back and you can tell me whether I did the right thing. We made that choice early on the basis that we felt we needed to be global, so we should do it sooner rather than later. And we sort of followed our customers and our opportunities. There are practical things that it just makes harder. So when we added London, our all hands started breaking because there was no one time zone that would work. So the way we do it now is we rotate through time zone. So every office is not online for one and every three and there’s a whole bunch of things that you just have to commit to doing. And I think we’re still struggling with those and still learning how to do get better at it.

I think from a values and lens point of view, when Nick Matthews, who’s who leads our EMEA team, when I was interviewing him and he was considering joining the team, one of the things I said to him was, you interview a lot of people in AMEA for those kind of like GM type roles. And they’re like, cool, tell me your North American strategy and I’ll replicate it here and I’ll make it work in market. And I said to him, I don’t want you to take our strategy and make it work in emia. I want you to be part of building the global business. You’re responsible for stuff here, but you should be thinking globally from day one. And so he kind of went, oh, okay. It took a little while for him to change the perspective because they’re taught to think that way because people come in and go, we’ve worked it all out, don’t try and be smarter than us, just do it our way and make it adapt it locally.

So part of it is getting everyone to feel like they are part of a whole company and that’s an ongoing journey over distance. And then the second thing is reminding people, and I say this to everybody that joins the company that I speak to, no matter which office you’re in, even if you’re in Melbourne, which has the most people, more than half the company is where you are not. And so your success at CultureAmp will depend, at least in part on your ability to build relationships out of your time zone, out of your geography. So you’re going to have to work on that. It’s hard, but it’s worthwhile.

Ed (21:43)
As A CEO. How have you managed various executives across the globe to ensure that as your business has grown and the demands have grown, how to make sure the right people in the right seats, in the right geographies?

Didier (21:56)
Yeah, maybe you have to do a follow up podcast where you ask them whether what I’m about to say is true. I mean, early on we had key people on the ground. And then as we continue to scale, I made the decision to start putting some of my senior executives in San Francisco and part of that was driven by access to talent. There’s just obviously a much deeper pool of people that have grown companies at this pace than there is anywhere else. And part of it was also wanting to have leadership, visible leadership at a global level, not just all in one place. And so we have a fairly well split exec team where we have four of the execs include, well, three execs plus me here in Australia and then three in the US making that work early on when I was hiring execs in the us.

And it’s still true if I try and hire anyone else into one of those roles, a lot of people are put off by the fact that they’re not going to be in the same place as the CEO. So there’ll be really great people that are like I’m just not sure I want to work in a company where I’m not where the CEO is, or they’re just worried about the time zone. And it is tough. It adds a cost to it. One of the things rightly or wrongly, I’ve always said to them, and I remember saying this to JD when I hired him, is I said, I know I’m on the other side of the world. I will work very hard to not make that your problem. So I will take calls at six in the morning, I will do things to work on your timetable so you don’t feel like you are having to accommodate yourself to working on the other side of the world. I mean I think the truth is they probably do, but that’s kind of how I’ve approached it

Ed (23:25)
Trying to make it as friction

Didier (23:27)
And I travel too much

Ed (23:28)
That you do, trying to make it as frictionless as possible. We haven’t touched on your other co-founders at all and Rod is still in the business. Doug is still in the business and executives in their own. How does your interaction or how has your interaction with them changed over time? And do you expect more of them as not only a CTO but also a co-founder?

Didier (23:53)
A great question. I’m glad you brought it up because there is no culture at without all four of us. I started the company in a sense on my own in Adelaide and then I moved to Melbourne, met originally John and Doug. And then we went through this process where we actually sat next to each other for six months working on our own little thing and then kind of looked at each other and said we should be working together. And then at that point they said, actually, there’s this other guy that we really want to work with. We should consider bringing him in too. And best decision I’ve ever made. All four of us set off on this journey and ran this company. John was heavily involved in the business. He was the one that moved to us and helped us open up our offices over there. And he was both a critical engineer. He helped write the first version with Doug and then also led marketing and other things. He stepped out about a year ago just when he got to this point where he is like, ah, I want to go back to the beginning again. I want to do this again.

Ed (24:43)
Some people are just startup guys.

Didier (24:45)
And that was actually, we spent a lot of time trying to twist his arm into staying and doing something. And I think it was actually a healthy thing in the end for us all to go through and to realize, oh look, there is a point at which sometimes people want to step out. You’ve done your job, you’ve got it where you needed to get it. Thank you.

Ed (25:01)
It’s a great description.

Didier (25:02)
Yeah, it’s been fun. So what worked for us as four of us was we were different in different ways. We joke, it’s true unfortunately that we started the company with four white 30 something male, it brunettes. So there was no visible diversity. And that’s the thing that we’ve been fighting against the whole time and constantly trying to improve. But in other ways there were lots of differences, whether it’s willingness to take risks or conservatism or the way we thought about certain problems, we would form different groups. It was never two people on one side and two people on the other. It would always be different groups of the two. So I think we all found that in each other we could be more ourselves and rely on the others to reign us back in if we needed to and we could bounce ideas around. And I think we were pretty good from the beginning in saying what things need to be found decisions and what things need to be executive decisions and let’s be clear.

So Doug might come to me and say, Hey, I think what you’re doing here is wrong. I’m like, ah, is that you as a founder saying that or is that you as the CTO? And we will deal with that differently based on which way we think it is throughout the line. We worked very well together. I can only think of two, one and a half situations where we actually had a proper standout argument. John and I had a big argument when we took the series A money just around a particular point, and that was a huge learning experience. Can you fight together? Yeah. Can you actually really violently disagree on something and yet still get to us somewhere on the other side? It wasn’t much fun to do, but we did. We got through it and we became much stronger for it.

Ed (26:34)
It’s a marriage of sorts.

Didier (26:35)
It is actually when my best friend actually makes that comment where he is, he’s like, you have to learn how to fight in a relationship if you, it’s a very hard and long journey.

Ed (26:46)
Excellent advice. And you touched on funding there, maybe that can take us to something that I do want to discuss. Mm-hmm. MP has raised a lot of money like there, there’s no hiding, hiding any fact that it doesn’t, you have raised

Didier (26:59)
Money. One part of my brain doesn’t think of it that way, but yes, sure.

Ed (27:02)
And at start you were supported well right from the start by Nick Crocker at Blackbird who has been on your board large rounds, lofty valuations, but in venture deals are done at the speed of light. Mm-hmm. And maybe you can give some insight and even some advice for young entrepreneurs about the fundraising process and anything that you could possibly share.

Didier (27:25)
Yeah, I mean it’s what a journey. So we’ve now done five rounds and raised 152 million us, which sounds staggering. It is staggering. And it’s funny because I’ll read somebody else’s announcement saying, oh, we’ve raised 50 million or 70 million. I’m like, whoa, that is so much money. And then I’m like, I just raised that much. Oh yeah, it didn’t never feels quite so much when it’s coming into your own business. But the things that I’ve learned along the way, I so many, one of the key ones, which I guess would be advice for any entrepreneur is how helpful other people have been. So every step of the way in every round that’s been people that are one or two rounds ahead of me that have given me advice that I was instrumental. And you can read all the books in the world, reading a book on negotiating a term sheet and negotiating your term sheet are two very different things.

And so you learn so much when it’s there. And I think I’d caveat that all my advice is related to my experience, which has all been out of the valley. So our first round was led by Felicis, then we had Index and then Sapphire then Blackbird and then Sequoia in the last round. And they have a very common set of rules. So if you’re taking money out of the valley, you can play by those rules. These rules may not apply in other places. There are parts of Europe that have similar things and ETR and Blackbird and others in Australia are doing good job here too. But I often get asked, who did you use to raise the money? Did you use an investment back? It’s like, no, but that’s because I was raising out of the valley. And so there are norms. So the first thing is you have to learn the norms and you learn the norms by talking to other founders.

So getting the opportunity to talk to someone that’s one or two rounds ahead of you, how they think about certain things, how they think about pricing, what are the terms you should look at? And the things that I’ve kind of learned through the whole thing is a clean term sheet is worth more than any valuation. And so keeping that in mind, that is excellent advice. And I got told this by someone, the reverse of it, where he was a growth investor and he said, I will give someone any valuation they want as long as I can set the terms. You know, learn the hard way, how that game gets played. Absolutely. The hardest thing I think for people to manage is your own psychology. So in the lead up while you are fundraising, you are going through what I would call shing as cat, where you don’t know if you’re dead or alive.

And the difference between being funded or not being funded or being funded at this valuation or at that valuation are so huge that it actually takes a lot of mental capacity to keep that in your head and not force yourself to go to one or the other. You can’t believe you’re going to close it until you close it and you also can’t give up until there’s nothing there. And so I’ve always found that actually quite mentally taxing the process. And then the other side, which is interesting is I’ve shared this story in public a couple of times. When we closed our sea round, I was at home when I was signing the term sheet, I was at home, my mum was over from Adelaide and I’d make her a cup of tea and then I got the final term sheet. And so I said to her, give me a few minutes, I have to sign something for 20 million.

And I remember thinking to myself, I meant to be in a private jet with a cigar when I sign something for 20 million because you think when you read, this company just signed a series B or whatever for 20 million, they’ve made it, they’ve just upgraded their wardrobe, bought a new car, created a new house, all of that stuff, and now they’re living the high life. And of course it’s not that at all. And so you’re like, all right, cool. I’ve made a deal. And soon as you sign it, rather than being elated, you’re filled with doubt. Have I picked the right partner? Are they going to be the person that I thought they were going to be? Could I have negotiated a better deal? And then you have to pick up the phone and call the people whose money you’re not taking and explain to them why you’re not. And then they’re going to tell you why you’re making a terrible mistake. And so you actually feel terrible the day you take 20 million.

Ed (30:57)
And what about the fear of making the right capital allocation decisions when you’re playing with large sums of money that aren’t yours? Well, they are yours. Yeah, because you own the business.

Didier (31:07)
Yeah. No, no, I think it’s totally right. I think the biggest fear is probably not at that point when you do the raise because generally speaking, you are raising what the market will bear at that time. It’s not a bad thing to have a little more capital if you can get it, if the valuations are good and so on. The real capital allocation questions come when you are running the business. And so we talk about it internally, which is don’t celebrate raising the money, celebrate what you do with it. And the more you raise, the easier it is to not pay attention to the things you should be paying attention to be a little less efficient here, a little less efficient there. And suddenly you’re like, what do you mean we’re burning 2 million a month? And so that I think is the hardest part.

And it’s hard because it’s not scary and that’s why it’s scary. It’s just all the little things that if you’re not paying attention to them, will hurt. And it’s an exponential game. One of the people I spoke to early on, he was the CFO at Optimizly and he made a really good comment where he said in your head, you almost have to break up the money you’ve got coming in against milestones you want to hit and break it down and go, okay, yeah, I’ve raised 20 million, I think it’s going to take me 5 million to get here. Only make 5 million available and hold yourself to account to get there. And when you don’t get there because you won’t, what changed? What was wrong? Don’t let yourself burn through nine and then go, oh, I’m fine because you’re not. And you have to change things.

Ed (32:23)
Some people describe the life of CEOs as sometimes very lonely. Maybe you can give some insight into your own emotional journey as a leader of a fast growing business because it’s odd because there are so many people around you and headcounts are doubling year on year and executive teams are being patted out. But increasingly, that’s certainly feedback that I often hear from CEOs.

Didier (32:46)
If you measure being lonely by what percentage of your time is spent around other people, it’s not a lonely job at all. I used to have a placard that said meetings are what I do. We often think the meetings get in the way as the CEO meetings are what you do, that is how you do your job all day, every day, all day, every day. But it isn’t is definitely a lonely job and it’s lonely mainly because there are decisions that you need to make and things that you need to consider that you cannot share with anyone. And I mean anyone, because every person that you are talking to consciously or unconsciously has an agenda that you need to manage. And so when you’re talking to your board, you obviously want to be open and honest because you want to engage their skills and you want to use them and you want to be as vulnerable as you can, but you’re also creating a narrative that they’re, they’re going to turn around and give back to you. Same with your exec team, same with your founders, even, I mean your co-founders of the people you can be the most honest with. In my experience, the people that I’ve been able to be the most honest, not in the sense that I tell them everything, but they’re people that I can talk about certain issues with are other CEOs, particularly other CEO founders. And oftentimes what you’re wanting is not an answer because they won’t have one. But just to hear that they’re as frustrated and annoyed as you are about the same issues.

Ed (34:01)
True. Where would you like to spend your time?

Didier (34:04)
Oh, I love product. The product org probably hates the thought of me spending more time in product, but there are certain things that you realize as a CEO you do because you enjoy them. And prior to this was had a meeting with my executive coach. So I have an executive coach who actually used to coach Steve Jobs and he’s fantastic and he was actually challenging me on that to come up with a threshold for my own time to be able to sit down and say, unless it’s can create this impact in the business, you just shouldn’t be doing it. You should be delegating it or the company shouldn’t be doing it at all. And there’s a hubris trap there where you don’t want to get into thinking, I’m worth this. You are not. Didier is not worth this. It’s just that the CEO of Culture Amp needs to be spending their time on things that are going to make a difference to the business because it’s too easy to get distracted into a million other things. But along that journey, you also do have to carve out time to do the things that make you a better person and that you enjoy and that give you the energy to go through the things that don’t. So product is important to me. I love people, I love hiring. I love the culture side and I love the strategy and other things. I generally like being fairly well balanced across go-to-market product and what I would call org. I like being in all three, which is both a plus and a minus.

Ed (35:17)
It’s a great mental model to apply. You touched on it and the importance of not only a coach, but you lean on other founder and CEOs and you’ve been lucky enough. And you touched on it at the start of being friends with Scott and Mike probably Australia’s two greatest tech founders. What are some of the sage advice or mental that they’ve passed on to you that have really helped scale this business?

Didier (35:40)
Wow, that’s a really good question. I mean so many different ones. And it’s not just Scott and Mike. And I think what makes Scott and Mike so good is they’re running around learning from everyone else too. And they’ve been able to keep growing, keep scaling because they never stop asking questions and they never think they have all the answers. And so I’ll learn something from Mike or I’ll learn something from Scott and then I’ll learn something from somebody in different industry. So you’re just going along, but a couple of things that just come straight to mind. One of the things that I heard Mike say to me once, which I thought was really interesting idea and very powerful one, writing down the decisions you make and then better testing whether or not the assumptions that you thought were true were true. How do we learn from the decisions we make?

I think inside organization’s decision making is always a huge topic. And when people start trying to formalize it and be a bit more explicit, what tends to happen is we spend a lot of time upfront debating the decision and having sies and SSEs and all these different ways of documenting decisions and making sure that all the right people are involved. What we don’t do is spend a lot of time going, all right, you made a decision. Why did you make that decision? And then when did you go back and determine whether those things were right? And more importantly, what have we learned from the decision that you made? So he talked a lot about how they learn from making decisions, and I thought that was a really interesting insight. The way I would characterize it is that there are people that have insight into the thing that you are trying to do when you need to do it.

And it’s being able to put your ego aside because you feel like, Hey, I’m doing well. I should know the answers to these things. And just being able to go, well, other people probably can teach me something. So we did our first acquisition earlier in the year. I went to Scott and said to him, could you walk me through how you think about it? Because he’s done a whole bunch. And so he was just able to say, here are the things I think about. And one of the great validations was him just saying it starts ends, and is most importantly driven by culture. Who are the people? The rest of the business case doesn’t matter if you can’t answer that and if that’s not strong. And so it was little things like that that were critical. But the advice that I would give anybody in doing this is not go find a scout or a Michael, whatever.

But just as you approach these points, so you come to do a fundraise or you’re trying to hire a senior executive or whatever, look around, find somebody that was in that spot 24 months or 12 months or whatever before and see if you can ask them for advice. In my experience, most of those people will give you advice, particularly if it’s direct. Like don’t go, Hey Didier, can I get a coffee because I’d like to bounce some stuff off you. I’m at the point where I can’t do those anymore. But if somebody writes to me and says, Hey, I’ve heard about you through this, or this person’s recommended you I have this specific problem, can I get 15 minutes from you just to get your insight into this problem so I can make a better decision? A lot of people will say yes

Ed (38:19)
My experience, people love helping other people and we undervalue what people will give all themselves. You’re right though. If you’re specific and you’re not too demanding of time, but you have a genuine problem that needs to be solved, people love helping out

Didier (38:33)
Absolutely. And thank the number of people that have done that for me.

Ed (38:39)
One last question, cause I know you have to go, but if you could give one piece of advice to Didier 15 years ago who was thinking about starting this business, what would it be?

Didier (38:51)
I’ll give myself two pieces of advice. One is just a reminder because this has played out, but I would just double down that you need to think this, which is what matters is how many people believe in you, not how many people don’t. So early on there’s all sorts of signs that you’re going to fail and you just have to look for those few positive things and find growth in that. And the thing that got me through the first few years is a mash mashup on YouTube that you can find. It was actually originally done for Tony Robbins 50th birth dance, a mashup of Snatch and Rocky three. And it’s got the line from Rocky three where he’s talking to his son. He said, somewhere along the way you let somebody put a finger in your face and tell you that you couldn’t be something.

If you are willing to take the pain, there’s nobody that can tell you what you can or can’t do. And for me, that’s huge as an entrepreneur, you just have to remember if you believe in it, if you’re willing to hurt for it, if you’re willing to hurt, walk away and have failed, then you earn the right to do it. So that’s remind myself that even though I think it was true through my journey, and then the thing that maybe if I look back, if I could make a change would be you are what you pay attention to. And when I think about time and I think about things not even work related, just how you look after yourself outside of work where you spend your time and energy, you can never be intentional enough in that. It’s just easy to have your time dispersed. And I look back and think, if I’d been more intentional, if I’d followed through on some of that stuff more, I could probably have been 20 to 30% more effective than I was. And that adds up over seven or eight years. That 20 to 30%, I mean, I don’t need to tell you, but the compound interest is a very powerful thing.

Ed (40:28)
the eighth wonder of the world.

Didier (40:29)
Indeed.

Ed (40:31)
Thank you so much for your time. This has been just a fantastic hour of my life and I’m sure it’ll be a fantastic hour of a lot of other people’s lives now too.

Didier (40:39)
My pleasure. Thank you.

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