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Dr. Amy Edmondson is a seven-time author who got her PhD in Organizational Behavior from Harvard, then went on to teach Leadership at Harvard Business School (for the past 23 years and counting) as the Novartis Professor of Leadership and Management, where she has tenure. In this episode, Amy discusses some of the groundbreaking principles she outlines in her book The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation, and Growth and shares important pitfalls that eat away at having an empowering culture in the workplace.

Amy and Tanya talk about what leadership is, how people can gain access to it and what is absolutely mission critical for effective team collaboration and high-performing organizational cultures.

Tune in to get the full conversation and learn about:

• • • Leadership defined
    • Leadership fundamentals
    • The current state of leadership
    • Leadership pitfalls
    • What allows for high-performing teams
    • Organizational high-performance cultures
    • Psychological safety at work
    • CEO bubble (leadership bubble) dangers
    • The difference between management and leadership, and when to use each
    • What makes a great leader

Dr. Amy Edmondson’s biography:

Amy C. Edmondson is the Novartis Professor of Leadership and Management at the Harvard Business School, a chair established to support the study of human interactions that lead to the creation of successful enterprises that contribute to the betterment of society.

Edmondson has been recognized by the biannual Thinkers50 global ranking of management thinkers in 2011, 2013, 2015 and 2017 and was honored with the Talent Award in 2017.  She studies teaming, psychological safety, and leadership, and her articles have been published numerous academic and management outlets, including Administrative Science Quarterly, Academy of Management Journal, Harvard Business Review and California Management Review. Her books – Teaming: How organizations learn, innovate and compete in the knowledge economy (Jossey-Bass, 2012), Teaming to Innovate (Jossey-Bass, 2013) and Extreme Teaming (Emerald, 2017) – explore teamwork in dynamic organizational environments. In Building the future: Big teaming for audacious innovation (Berrett-Koehler, 2016), she examines the challenges and opportunities of teaming across industries to build smart cities. Her new book, The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation and Growth (Wiley, 2018), offers a practical guide for organizations serious about success in the modern economy.

Before her academic career, she was Director of Research at Pecos River Learning Centers, where she worked on transformational change in large companies. In the early 1980s, she worked as Chief Engineer for architect/inventor Buckminster Fuller, and her book A Fuller Explanation: The Synergetic Geometry of R. Buckminster Fuller (Birkauser Boston, 1987) clarifies Fuller’s mathematical contributions for a non-technical audience. Edmondson received her PhD in organizational behavior, AM in psychology, and AB in engineering and design from Harvard University.

Connect with Dr. Amy Edmondson:

• Website
• Twitter
• Linkedin
• TED Talk

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Full Transcription:

Amy Edmondson: I started out as an engineer and some of the projects that I was working on not surprisingly required lots of people to work together on teams to get things done, and lo and behold, it was not so easy.

Tanya: That’s Dr. Amy Edmondson, seven-time author who got her PhD in Organizational Behavior followed by a 23-year and counting teaching gig as the Novartis Professor of Leadership and Management at Harvard where she has tenure. Amy outlines groundbreaking principles in her book, The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation, and Growth as well as giving brilliant TED talk which has been viewed by millions on leadership.

Amy Edmondson: As an engineer, you can think, well, there are right answers and wrong answers and it should just – the people part shouldn’t be a big determinant, right? Wrong. I found myself getting very interested in how people come together and particularly across boundaries of expertise and sometimes status and sometimes even organizations in the built environment where I was working. It’s often different organizations coming together. I got interested in these dynamics, and I got so interested that I went to work for a small consulting firm that helped organizations build good teams and including at the very top for strategy teams and so on. I was really hooked. I was really fascinated. I thought the work was really interesting, and the people were really interesting, and I just was learning so much.

After a while I realized, I’m kind of a fraud here. I don’t have any background in business. I don’t have any background in psychology. If I’m going to be – if I’m really going to be committed to this work, I probably should go back to school. I didn’t really know an awful lot about the different kinds of programs, but in my travels, I had met some people who said, “Oh, you got to do a PhD in Organizational Behavior. That’s what you need.” I said, “Oh, what’s that? Okay, sure.” I think at first, I was just being a little bit agreeable because I thought, there’s no way. There’s no way I’ll get in and on and on it goes, but I did.

Tanya: You went from engineer and what kind of engineer?

Amy Edmondson: I was a structural engineer so I was helping build things. Specially, usually, geodesic domes, but also, trusses and other things.

Tanya: What are geodesic domes? I’ve never heard that before.

Amy Edmondson: Oh, well. A geodesic dome, if you close your eyes and think about – if you’ve ever been to Montreal back in the – one of the more famous geodesic domes was built for the US pavilion in the World’s Fair back in the ‘60s. It’s still there today and now it’s – I think they call it Biodome.

Tanya: Yeah, the Biodome. I am from Montreal.

Amy Edmondson: Oh, oh, okay. It’s that beautiful structure, and its claim to fame is that it’s very, very efficient in terms of use of materials, and it’s incredibly strong. In fact, that building caught on fire in – I can’t remember exactly when, but the skin, the outer part of the structure, burned completely up, and then the dome was still there and still intact. Then they rebuilt it as this more museum facility. It’s an incredibly strong structure. It can withstand high winds and it can enclose a great deal of space without much material or time or cost really.

Tanya: Wow, I didn’t realize. I mean, in Montreal, especially – I remember going at the Biodome. Montreal is French. I remember going to the Biodome so many times when I was a kid.

Amy Edmondson: Wow, good.

Tanya: It was actually a very special thing. I had no idea that it had all these incredible structural attributes to it.

Amy Edmondson: Yeah, it’s very special. I worked for Buckminster Fuller who was the guy who invented the geodesic dome and who actually was one of the chief architects for that structure. He also had a younger architect working with him because he was in his late 70s at the time. I was not around or with him at that time, but as a kid I always loved the building also.

Tanya: Yeah. No, absolutely. Where did you grow up?

Amy Edmondson: I grew up in New York City.

Tanya: Oh, in New York City.

Amy Edmondson: Yeah.

Tanya: Oh, my god. Wow. It’s rare that [05:15]. I’ve been in New York City for 13 years. It’s rare that we meet a native New Yorker.

Amy Edmondson: It’s true. It’s true.

Tanya: Yeah, it’s a rare thing, but that’s amazing. You’ve been teaching at Harvard. You got your Organizational Behavior PhD. Then you began teaching afterwards immediate…

Amy Edmondson: Right. I joined the faculty in 1996. I finished my PhD and went on the market to look for a professorship job, an assistant professor job, and was lucky enough to get one. Lo and behold I’ve been there for 23 years ever since. I got promoted to associate professor then full professor with tenure, and I – I’ve been there a long time which sounds – to me, I’m astonished I could ever be in any job for that long, but it changes every year. It’s always different students, different courses, different – it’s been full of variety and learning.

Tanya: Which helps, and so what are some of your favorite courses that you really teach?

Amy Edmondson: I love teaching courses on teams and team work. Fundamentally, the overarching umbrella is leadership which is the force that allows us to swim upstream. It’s the force that allows us to do things that aren’t easy or that don’t come naturally. When I say us, I mean collectively as teams or institutions or organizations.

Tanya: Yeah. This is something that – we do a lot of work in – my day job is consulting and we specialize in leadership consulting.

Amy Edmondson: Oh, good.

Tanya: This is why I’m so interested in having this chat with you. When we’re working with our clients and not even just our clients, we see it everywhere, leadership is something that people want so desperately. They want to have access to, but it’s this elusive concept for many, right?

Amy Edmondson: Yes.

Tanya: I think Google has 1.2 billion definitions or…

Amy Edmondson: Wow.

Tanya: Just for that. It’s a huge topic, but yet everybody really wants to get access. What is, for you, leadership, and how do you see that?

Amy Edmondson: I’m interested in teams and teaming, and I’ll define teaming – I’m interested in these things not just in their own right, but because I think that’s how more and more of the work gets done today. Teaming means coordinating and communicating with people across boundaries of expertise and status and time. Sometimes distance, virtual teams, and being interdependent in getting something done. Some important work done. Everything I just said is incredibly unnatural. I mean, I don’t want to overstate the case, but it’s not enough to just say, ah yes, we need a team. We need to collaborate. It just doesn’t happen. Collaboration breaks down in a variety of ways. We misunderstand each other. We fail to get clear on the shared goal. We don’t understand each other’s language. We get into conflicts. I mean, there’s all sorts of human phenomena. Social psychological phenomena that make collaboration more challenging than it first appears.

To me, leadership is yes, elusive, but leadership is the force that helps us do it anyway. I think the fundamental job of leadership is to ensure a good process that we – if we’re in a team, making an important strategic decision for example. One voice at a time. We capture and dig into what we know. We go deeper. Good process and good climate, having the right culture or climate that makes it possible for people to speak up openly, to disagree actively, to solve problems together.

I think leadership is responsible for ensuring good process and creating a good climate for learning and problem solving, and neither one of those things happens automatically. They just don’t. We wish they did, right? We wish that oh – I just say, hey, let’s have a team. Let’s get something done and the rest will take care of itself. It doesn’t. One of my favorite definitions of leadership is the art of harnessing the efforts of others to achieve greatness. People have – and I think for the most part, really want to contribute. They want to contribute their ideas, their skills. They want to be part of something larger than themselves. It won’t happen if it’s just a free-for-all.

Tanya: Yeah, I know. Inherently, for sure people, every time whether it’s – whether I’m speaking with a waiter or an executive or an entrepreneur, it doesn’t matter. Across the board, when I say, what really lights you up? It’s contributing to something that’s bigger than themselves, always, no matter what it is. Whether it’s serving somebody at a restaurant and making their day better by perhaps some great food or it’s about having global impact through business. Having taken a deep look at leadership, what in your view is the current state of leadership?

Amy Edmondson: You mean in the world?

Tanya: Mm-hmm.

Amy Edmondson: This or both. It’s suboptimal. It’s funny because I talk a lot about a thing I call psychological safety which describes a climate where people do believe they can bring their full self to work. They can speak up with work-relevant ideas, questions, concerns, even mistakes. It hardly needs to be said, but it’s not the norm. In most organizations, I ask people all the time to think of a time when they held back on saying something that they believed could be important. They weren’t 100% sure they would have said it, but it could be important. It could have been an important question if it would help them do their job better. It could be an idea. It could be a concern, but they held back. Why, well, we all know this, because they’re sizing up the environment and saying, hmm, he or she wouldn’t like it if I said that. He or she usually refers to the boss or someone in a position of authority, hierarchy of some kind.

This is such a profoundly common – it’s not like people look at me cross-eyed when I ask them to think of a time. Everybody can think of one, and yet, let’s step back. We are in a knowledge era. We work in a knowledge intensive world where people’s ideas and observations may be absolutely mission critical for achieving our collective goals. If we look around in just the business world, most organizations don’t have the best possible culture to foster learning and innovation. If we look in the political sphere, it’s most certainly true that most of our political leaders are not modeling the kind of leadership that brings out the best in us as individuals, and us as societies.

Tanya: Yes. Politically speaking, that is a whole another paradigm of lacking in leadership. I don’t think that – I don’t remember a time that we’ve been more divided.

Amy Edmondson: No.

Tanya: Ever, ever. A lot of people talk about that, but from a business standpoint, it was interesting because I had the opportunity to speak with somebody that recently just left a company that they were serving for a long time. There was some leadership things that came up, some Me Too movement things that came up, and ultimately, that person, although it was not directly with them was held responsible for not taking action. What came up was – you mentioned this thing of power, the CEO level which is a real thing. This psychologically safe environment. Even though the person really thought that they were down-to-earth and approachable, the mere power position that is there causes a threat to people really speaking up especially for things about Me Too movement or [14:29] cultural issues of inequality. How can that be addressed?

Amy Edmondson: This is the part where I wish I had a magic wand which I don’t, and I like probably most social scientists am better at pointing out the gaps, the challenges that we face than in providing the ready solutions. I think it starts with observation, right? It starts with being willing to come forward and talk about these things. You cannot make progress if you aren’t willing to acknowledge that the current state is suboptimal. I think you said something very important which is most leaders, even the most well-intentioned leaders who don’t see themselves as intimidating or as unkind in any way, the power of the position is such that it changes everything.

The very observant leaders notice this and they’re surprised by it. You suddenly become CEO and you become aware that you’re not hearing things anymore. You’re in the CEO bubble as you put it. It’s a funny thing because you didn’t ask for it, but there it is. If you look around, and I’ve been in many organizations where I do look around, and what you see is, you see a lot of people a level below scrambling to protect the CEO from bad news, and they’re not really protecting. I mean, they’re protecting themselves. They don’t want to be the messenger. They think the messenger will get shot which of course a good leader will never shoot the messenger. A good leader will thank the messenger and then say, great. Now what can we do to help? How can we get on this?

Most organization leaders are not as self-aware and situationally aware as this hypothetical leader we’ve just described who becomes exquisitely aware of the bubble and then says, hmm, the bubble is dangerous. Not just for the organization, but even for me because I want to know. I met a CEO who said – came to speak to our class at Harvard and said, “My greatest fear as CEO…” While he’s CEO, he’s CEO of Eastman Chemical, says that people aren’t telling you the truth. He was very perceptive because he was aware – almost like it changes overnight. He was aware that the simple act of occupying this role is a risk factor.

Tanya: Yeah, absolutely. Now another shortcoming that we see quite often in the area of leadership is, authority is mistaken for leadership.

Amy Edmondson: Absolutely, absolutely. Yeah. Authority is fundamentally about power and control, and leadership is fundamentally about empower and free up and learn. Another definition of leadership is it’s got a very strong relationship to making a better world. Making a better company, making a better world. You’re trying to get from here to there. You’re trying to produce change.

Tanya: Yeah. Almost like realizing a future or generating a future that was not meant to happen before your leadership or predictable to happen. Then having really thought about the sphere of leadership and then the sphere of management, how do you distinguish both? When do you employ one or the other because a lot of people have these two spheres collapse?

Amy Edmondson: Yes. I do, I think they’re both really important spheres, and as your question implies, not the same thing. You can think of management as getting work done through people. That you’re managing people to get various tasks done. Leadership just to play on words is the art of getting people done through work. More concretely, leadership is about change, leadership is about developing others, leadership is about thinking about the future, creating possible paths toward getting us there. I do think its primary role is the role of developing others. That means putting others in situations where they will grow and learn.

By the way, while they’re growing and learning, they’re getting the work done. It would be safer for me, and as a manager I’m tempted, to just make sure I’ve got the person who absolutely has this task down. Pat, okay, you’re going to do that one. I’m never going to promote you because you’re so good at that, but that wouldn’t be good either for you or for the organization’s future. I have to put myself in a position where I want to promote you to the next thing. Management is about the near-term. Management is about the today. Management is about getting things done. Leadership is about the future. It’s about meaning. It’s about bringing people along with you.

The forces of nature are always pushing us toward the managed and away from the leadership because the leadership – we don’t get the rewards of leadership until later. If I invest in developing others or thinking through scenario planning, down the road, that might have been a really good use of my time, but I don’t get that same satisfaction of just cranking through that to-do list.

Tanya: That’s a very interesting concept and it’s almost – you have to be quite disciplined to know where the big value lies. That’s so tempting to just knock off a few things on your to-do list and feel really good about it now but…

Amy Edmondson: Exactly.

Tanya: In the end really not have your eye on the long-term. What do you think is an access point for people to lead? Do you think that some people are born with it or is this a skill that can be developed?

Amy Edmondson: You have to realize I’m in the leadership training or leadership education business, so I sure hope it’s a skill that can be developed or else I’m not doing my job or I’m doing a silly job. Some of the most important leadership capabilities are self-awareness, asking good questions, listening, bringing together a team for a reason to do something new and important. I do think all of those skills can be taught, can be practiced, and must be.

Tanya: What’s the access point to actually being an effective leader?

Amy Edmondson: I think you just have to get out there and be…

Tanya: Learn on the job.

Amy Edmondson: Learn on the job, exactly. You can never learn it all in a classroom. You have to be out there and make mistakes and willing to take risks. I think the access point is really in a sense its purpose. It’s a sense of – because it’s a lot easier not to be a leader. I think you have to be committed to becoming a leader and being vulnerable. If you’re going to be a leader, you’re going to be vulnerable. Things will not work out exactly as you wish all of the time.

Tanya: No. Wouldn’t that be great though?

Amy Edmondson: Yeah, wouldn’t it?

Tanya: Yes, that would. You wrote this incredible book called, The Fearless Organization: Creating Psychological Safety which we talked about earlier. In the workplace for learning, innovation, and growth. What role does psychological safety play in organizations, and how can companies or organizations make sure that people feel safe but not get into a comfort zone?

Amy Edmondson: You bet. The role of psychological safety is to – there’s been a lot of emphasis over the last few years on talent. Talent acquisition, get the best people. How do you find and hire really smart talented people? That makes a lot of sense, and it is not terribly effective if you hire the most talented people but then you don’t hear what’s in their heads. If you don’t know what they have to say. You need talent plus psychological safety to thrive and innovate in the knowledge economy. Psychological safety plays a critical role. It’s not the end in itself. It’s not even a driving force for effectiveness. It’s a moderator. It’s like the key that unlocks that talent. That says yes, I know you have it now. It’s what allows you to really express it and use it and confront difficult conversations and conflict and come out on the other side smarter and wiser rather than just bruised because we know this is what’s necessary.

I think the way organizations create a psychologically safe environment without falling into the comfort zone is by continually, first and foremost, bring the attention back to the purpose and the work. The purpose is the answer to the question of why we exist. Why it matters. We’re taking care of patients. We’re building great consumer products, whatever it is. We’re doing things that in some way, shape or form make the world a better place for some constituents. Continually emphasizing the why it matters because that’s energizing. As I said before, we all want to be a part of something that matters in the world. That’s larger than ourselves. We want to feel proud of what we do. We want to tell our family members and neighbors that we believe we do something that matters. We’re not just getting a paycheck.

You’re emphasizing the purpose, but also, it’s like psychological safety is one dimension that is necessary for a really vital workplace today, but the other is performance management or high standards or accountability. I go around and around in how I talk about this dimension of performance, right? I think if your goal, and of course it is, is to have people achieve the highest level of performance, then you need to be motivated. I think purpose helps a lot with that. Feedback and other kinds of rewards help as well, but what matters most I think is that there’s an enabling performance environment meaning you have access to coaching if you need it. You have access to the resources you need to do this kind of work. The equipment, the colleagues. You got to make sure you’ve put some basics in place. This is, to a certain extent, a management task. The right conditions have to be in place. It’s not enough to just say we expect excellence. We expect you to hit your targets, but then not provide what’s needed to make that realistic.

Tanya: The support, yeah.

Amy Edmondson: Exactly. The other dimension of psychological safety – I like to say, the comfort zone is where psychological safety is indeed high, but motivation isn’t. That’s the comfort zone, and the antidote to that is what we’ve been talking about which is the enabling performance environment and the motivating – and even ennobling goal and purpose.

Tanya: What led you to discover that it was really psychological safety that was the underbelly of what allowed leadership to happen on or occur on?

Amy Edmondson: I can put it this way. In some early studies, I found at least from the surface more or less identical entities, work groups, units within different organizations, teams that seem to have similarly well-structured [27:43] that we were just talking about. The structure, the resources, the enabling support to do the work, but they really differed in their outcomes. In studying them further, I found this palpable difference in what initially I was thinking of as openness which is a reasonably good term for it actually. People were – they’d say things like, in this team, I don’t have to have a work face. I was like, lovely, lovely sentence. We all know exactly what she means. I don’t have to have a work face like I walk through the door and then I put on my work face. I can be myself. Places where people say, my god, a lot of – like a healthcare setting. A lot of bad things can happen here. We need to be really speaking up and alert and telling each other. They make it clear that those kids of behaviors are not only okay, they’re mission critical. They’re expected.

Tanya: First of all, you did a phenomenal TED Talk or TEDx Talk.

Amy Edmondson: Oh, thank you.

Tanya: On this matter. You did a study in a hospital. Studied different teams and what you’re pointing to was each team – the teams that were the highest performing, funny enough had the most or did the most mistakes. That was something that would…

Amy Edmondson: It looked like they did the most mistakes. Ultimately, I realized, oh my god, we don’t know how many mistakes the others are making because they’re hiding them. That in many ways is the whole idea. Long ago, I always loved the idea of mistakes or something we have to learn from because otherwise you’re just sad. Mistakes are okay, right, because they have a silver lining. You get to learn. Then it was this blinding flash of the obvious where – oh, wait a minute, not everybody in every workplace can learn from mistakes because if they’re being hidden and pushed under the rug, then we’re not learning from them and then we’re doomed to repeat them.

Tanya: Yes. The example of a hospital for example which is mission critical on so many levels, I mean they’re managing our health, and in many cases our lives. I have three daughters, two of them are identical twin girls and they were born at 28 weeks. We were in the NICU for 180 days.

Amy Edmondson: Oh, my gosh, wow.

Tanya: Yeah, and I, up until then hadn’t really spent a lot of time in a hospital, and I had no idea of all it takes.

Amy Edmondson: Right, all the complexity.

Tanya: Yeah, yeah. I mean, forget the health thing. In an environment like that where if you admit a mistake, you can get a big lawsuit, and it could cost the hospital millions of dollars. That’s something that I know that I learned the hard way. The doctors weren’t necessarily willing to be completely open with us as to what they would think is the best course of action let’s say for our daughters because it involved a level of risk. Because of the concern of lawsuits and risk, I believe that we had to read between the line of what was being told to us to really get the best care for our daughters which is so counterintuitive and challenging.

Amy Edmondson: It’s much harder to read between the lines than to read the lines.

Tanya: Yes, exactly.

Amy Edmondson: You might read it wrong and then what happens.

Tanya: Totally, and then under – I remember in one instance, we were sitting in a conference room which you never have a conference meeting in a hospital. I thought, oh my god, they’re going to tell me my kid’s dying or something, but they were going to suggest a heart surgery, a PDA ligation. It was so interesting that – the not openness that you’re talking about. At least, from us, it was more like, here are all the risks then this is a standard procedure, and here’s the data. The data shows that it’s neither good or bad, and this is what it is. You make your choice. I’m like, okay well, this is my daughter and – actually, both of them. I’d really love some professional input here as to what we should do but it was like…

Amy Edmondson: I know, I know.

Tanya: That’s just like the patient-facing side. Internally, I imagine that there’s all this politics. What are your thoughts on when there is an actual cost of being open? How do you deal with that?

Amy Edmondson: In this particular setting, it’s very interesting because some pioneering work was done over the last decade or so. It’s actually shown that the long-term belief was, if we’re open in our patient-facing or customer-facing side, we’re opening ourselves up to risk like the risk of lawsuit. It turns out, and I don’t want to say this is wrong in all cases because it’s clearly not true. In general, the data now show us pretty loud and clear that that was misapprehension, right?

That in fact, it turns out that when people sue, more often than not, they sue because of the stonewalling, or they sue because the relationship is sour. They sue because they realize it’s the only way they can get the truth through the discovery process, right, and when. This is now really been studied and demonstrated. When hospitals and other organizations approach the patient, the patient’s family with honesty and clarity and seek to have a good, positive, honest relationship in talking about these challenging issues, lawsuits don’t go up, they go down.

It’s more often than not people were suing because the relationship just felt so wrong. When you have a good relationship, people understand especially with very high-risk patients and challenging conditions that doctors aren’t perfect. That often there isn’t a solution, and that everybody truly wants to do the right thing. Even when things go wrong because of human error, they know that wasn’t an intention, and we can grieve together. There’s a kind of willingness to be vulnerable that turns out to be less vulnerable than you’d think. They’re not opening themselves up.

Of course, there’s certainly are situations in the world where you don’t have the opportunity to be as open as you want to be. Maybe trade secrets or other things. Most of time you’re not fooling anybody when you’re hiding. They know there’s something hidden, and they’re going to poke around the corners, and try to figure out what it is, and then the trust isn’t there. Oftentimes, the learning isn’t there, and the innovation isn’t there, and so on.

Tanya: Speaking about trust and psychological safety, would you say involves a huge deal of trust?

Amy Edmondson: Yes. Trust is really – a lot of times people think of trust as well, I don’t trust him. Trust is really a decision. It’s a willingness to be vulnerable. The concept of trust is I am willing to trust you. I’m willing to assume you have the best intentions or that your skills are up to the task. I recognize that I cannot control you so I have to trust you. It’s a recognition that my micromanaging is not helping. I’m willing to see you as the kind of person who will do the right thing to the best of your ability. That’s a decision I have to make about you. When I make that decision, powerful things happen.

Tanya: Yes. We work with our clients very much about – we call it granting our trust or their trust to their team. It’s interesting. Like you said, when that happens, the space shifts. The context of the team now is operating from a different place, and powerful things do happen. Just for people that are in leadership positions or are leaders, what are some things that maybe people do unconsciously or consciously that remove the psychological safety for your team?

Amy Edmondson: Sure. I think probably the most important and common one is acting as if you’re right. The way I see it is the right way. If you see it differently, you’re seeing it the wrong way. The problem here is, that’s kind of the human condition.

Tanya: Yes, that’s a real problem.

Amy Edmondson: Right, a real problem. Some of the very spontaneous things we do, we’re going to be overconfident, we’re going to inadvertently shut other people down especially when they say something that we think is wrong-headed in some way. That we really have to train ourselves [37:48] mantra of I have a valid point of view, and I may be missing something. Our spontaneous experience is, I see reality. I see reality. Oh, you probably see reality too, and then I’m a little disappointed when you fail to see reality because you see it differently. If you can just every day or every hour of every day remind yourself yes, you have a valid point of view, and you may be missing something.

It’s a powerful frame because it leads you to be curious. Selfishly, I want to know what I’m missing. It’s going to make me better. It’s going to make us better. If I keep reminding myself I’m, by definition, necessarily missing something, I start asking questions. I start saying, what do you see? What other options could we consider? We just start to create the space where others can come forward and really contribute. That belief that right below the surface, awareness, belief that I’m right and I see reality is the source of many leadership problems.

Tanya: Yeah. That’s a real big one for people to get because like you said, it’s the distance between their point of view versus “the reality.” There’s no distance. When they see it is reality…

Amy Edmondson: It is reality itself, yes. It kills psychological safety because people are very good at perceiving and sizing up whether their voice is welcome. If you’re a know-it-all, let’s say, people quickly decide it’s just not worth it. First of all, I don’t want to disagree with you because that might come back to haunt me. Second of all, I don’t think you’re really listening anyway so why say what I’m thinking.

Tanya: What other ones do you see as common although that one is probably the source of everything?

Amy Edmondson: Yeah. Having a spontaneously negative response to bad news or an annoying question or an idea that seems wacky, just an overly quick response, that will never work. Again, it’s one of those things that just makes the little tiny interpersonal risks that the person just took seem less worthwhile and they won’t do it the next time.

Tanya: Yeah, so then a lot of self-reflection then.

Amy Edmondson: Yes.

Tanya: A lot of work because that is so counterintuitive, and it’s something that [40:34]. I have to work with that. I have to work on that myself big time. I have to work on that with my husband.

Amy Edmondson: Oh, yes.

Tanya: My colleagues, with my clients, and then when you get that out of the way, an authentic conversation can happen.

Amy Edmondson: Exactly.

Tanya: That’s where I think you’re pointing to with the magic happens. Where you can really get this out and create some amazing things. You wrote another book which was [41:03] about teaming. It’s Teaming: How Organizations Learn, Innovate, and Compete in the Knowledge Economy. Having deeply studies this, what is that thing that makes teams high performing?

Amy Edmondson: For me, this book was trying to convey the recognition that organizations are always about teams and teaming. Individuals exist. They’re easy to point to. Here you are. You’re an expert in something, but organizations is a very fuzzy concept. Where are the boundaries? What is an organization? Teams are easier to point to and it turns out, in organizations, the work of any – most of the work that really matters is being done to a certain degree by teams and teaming. The difference between teams and teaming, teams are reasonably stable groups of people. Membership is clear. You know if you’re on that team or not. By the way, that means you tend to get to know each other’s strengths and weaknesses. You learn how to work well together.

What I was noticing in organizations across many industries is that more and more people are on multiple teams at once or they’re having to engage in quick teaming. You and I are coming together today to do this session, but then we both go back and we’re teaming with someone else tomorrow. We have to get good at this dynamic process of teaming if our organizations are going to thrive in a fast-paced, fast-changing environment. The thing I think that makes teams high performing is A, recognition of the need to learn. Teaming almost by its nature is about learning at the same time as doing. You’re not just executing. You’re paying attention to what new things are showing up. What are we learning about this task, this patient, this client? You’re learning as you go.

In the book, I talk about execution as learning. I want to be clear. Yes, I know you can’t just go off in the classroom and learn and then spend all that time just learning. You have to learn while doing. Execution becomes a kind of learning journey if it’s good where you’re sensitive to feedback. You’re curious about what others bring. Probably, the thing that makes teams high performing was that they are deeply mission focused. They know what matters. What they’re trying to get done. The people participating display deep respect for an interest in what others are doing and saying and they’re listening. They’re willing to pivot. They’re willing to be wrong. They’re willing to try something else.

Tanya: One of the things you said, teaming, for you the difference between a team, you know you’re a member or not, you know the structure, you get to know your colleagues very well. It’s a close team, but teaming you have to adapt yourself to work with different people, and maybe [44:32]. How do you see this dynamic of team shifting or not as more and more people begin to work remotely like remote teams?

Amy Edmondson: That’s a great question. I think over time the work is becoming more not less interdependent, and as you point out, more and more of us are working remotely or from a distance or with people who might be in an office, but we’re working with people in another office, another part of our company. Maybe even another country. What this means is we have to be even more aware and deliberate to team effectively, because it’s much easier to be in the same room. We can see each other’s facial expressions. We can speak in shorthand. It’s much easier to team up that way to really feel our interdependence and make progress when we’re together, but if we cannot be together, we just have to be much more explicit and thoughtful about process.

When I send you a quick email and you respond in a way that – that seems weird that you said that. I have to step back, read it more slowly, and maybe hop on the phone. Say look, let’s get to the bottom of this. Remember earlier on, I said, you got to have a good performance climate. You also have to have a good process. A good process becomes even more important when we are at a distance, and that’s the kind of process where we’re clear about where we’re trying to go. We have structured ways to ensure that different voices are being heard. We have structured ways to capture what’s being said. What’s being decided. We’re trying to work more transparently not less even though we’re at a distance.

Tanya: Yes. Those quick emails, without that, that background of relatedness [46:28] knowing where that person is coming from, so much can be misinterpreted.

Amy Edmondson: Yes, minefield.

Tanya: Yes. That’s very interesting. What is one of your personal examples of just somebody that exhibited some incredible leadership that you were just blown away with in your life?

Amy Edmondson: The person that comes to mind is Drew Faust who was the President of Harvard University for 11 years. Stepped down about a year ago and retired basically. Retired to become a university professor. She was an extraordinary leader and I had the good fortune to work under her. It wasn’t just watching from afar, but really seeing someone who is in a daily basis making a difference. An already great institution, Harvard University, but really making – committee to making it even better. A very, very clear – she was very clear and her speaking was just remarkably clear and cogent, but also uplifting and meaningful. When she spoke about our purpose and the things we were doing, one felt called on the better angels of our nature so that really mattered.

Equally important was quite profound self-awareness, I think it’s hard to know about that, but other awareness. Drew Faust was remarkably aware of who else was in the room. She was prepared. She knew enough about people’s backgrounds and demonstrated obvious respect for others by showing interest in what they brought and listening carefully and deeply to what they had to say, and would make tough decisions. Like okay, we’re going to go this way. It’s that combination of mission focused and respect and listening, and then the willingness to make the call that I think is very powerful. I’ve studied other great leaders, but this is one that I actually worked directly with in a variety of ways.

Tanya: You’re very lucky. She sounds like an incredible person, and having worked with her, I’m sure you learned a lot. What are you mostly focused on now, like working on?

Amy Edmondson: It’s really two things. One is the book, The Fearless Organization has unexpectedly gotten a lot of attention. I do find that I am spending some portion of my time helping the book get attention, right? Talking about it. Teaching and giving talks to spread the word about psychological safety per se. Then the other part is I’m really – it goes back to teaming. I’m really profoundly aware of the really big problems in our society. In organizations but also more broadly, will not be solved by any one organization or institution acting alone. More and more, the things we need to do related to climate, poverty, homelessness, you name it, require healthcare, require multisectoral collaboration, and that is darn hard. I’m not fixing it, but I am studying it in a variety of different settings.

Tanya: Oh, yeah. Like you said, the first step to fixing a problem is being aware of it

Amy Edmondson: That’s true.

Tanya: Understanding it, and once you have that visibility, the path forward becomes a little clearer hopefully. Yeah, I agree. We have some very big challenges ahead of us. One of my big concerns is, in what state am I going to leave the planet.

Amy Edmondson: Right, I know.

Tanya: I’ve met people that are considering not even having kids because they’re worried about that state. Yeah, we have a lot of work to do. The work that you do is beyond important and I’m a huge fan. Just thank you so much for your time and if anybody wants to get in touch, how do they reach you?

Amy Edmondson: If you go to hbs.edu, that’s the Harvard Business School website, and just do a quick search for faculty or Amy Edmondson. You’ll get right to my page.

Tanya: Okay, awesome. Amy, thank you so much for your time today. It was amazing to have you on.

Amy Edmondson: You are welcome and thank you so much for having me.

 

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Dr.Erika Hamden is a TED fellow, Ph.D. Astrophysicist, and Assistant Professor at the University of Arizona who has been nominated by NASA for the Presidential Early Career Award for Scientists and Engineers in 2019. Erika leads the team building FIREBALL, a project funded by NASA which is a large telescope that hangs from a giant balloon at the very edge of space and looks for clues on how our stars are created. Erika’s scientific endeavors have received close to $4 million in grant funding from partners like NASA and MSF.

She got her A.B., in Astronomy & Astrophysics from Harvard, a Ph.D., in Astronomy from Colombia and did her Postdoctoral Fellow at California Institute of Technology. 

Despite these achievements, Erika struggled early-on when she first attended college. She felt anxious and didn’t quite fit into student life. She dropped out of MIT after a short attendance period and worked at a local bookstore for 1 year. Oddly enough, she thought that maybe she was one of those smart people that couldn’t thrive in high-pressure situations.

She finally gathered her courage to try her luck at college again and got into Harvard. She gave herself permission to not ace everything, but rather ease into it. Her willingness to try again led to a career as an astrophysicist and innovator. She shares that being at the edge of what’s known, meaning, work to discover the unknown through cutting edge initiatives, has proved to teach her some of her most important lessons on failure and resilience.

Scientists fail 90% of the time as they navigate uncharted paths and Erika’s relationship to failure and resilience is fundamental in her success. In a candid discussion, she shares the ups and downs in her riveting journey to discover the universe.

Tune in to get the full conversation and learn about:

• • • Launching telescopes into space
    • FIREBALL project
    • What it takes to stand at the edge of what’s known
    • How to deal with failure
    • What role resilience plays in success
    • Science at it’s finest
    • Leadership lessons
    • How to manage a team
    • Dealing with uncertainty

Dr.Erika Hamden’s biography:

Dr.Erika Hamden is an astrophysicist.

She studies the universe. She builds telescopes and spectrographs to observe (mostly) hydrogen in its faintest and most diffuse forms throughout our galaxy and the universe. Primarily in the ultraviolet, but sometimes the visible.

She’s leading a proposal for a Small Explorer class UV telescope called Hyperion.

She’s a professor at the University of Arizona.

Dr. Erika Hamden used to be a chef.

Her instagram is excellent but her CV is something else.

Dr.Erika Hamden’s e-mail address is: hamden at email dot arizona dot edu

Connect with Dr.Erika Hamden:

• Website
• Twitter
• Linkedin
• Instagram

* * *

This is a picture of FIREBALL (the telescope that is supported by an air balloon) next to the moon, sent by your very own Dr.Erika Hamden and co.

Full Transcription:

Erika Hamden:  I was a pretty nerdy kid, oblivious about a lot of things actually.

Tanya:  That’s Professor Erika Hamden, TED fellow, Ph.D. Astrophysicist, and Assistant Professor at the University of Arizona who was nominated by NASA for the Presidential Early Career Award for Scientists and Engineers in 2019. Erika leads the team building FIREBALL, a project funded by NASA which is a large telescope that hangs from a giant balloon at the very edge of space and looks for clues on how our stars are created. Erika’s scientific endeavors have received close to four million in grant funding from partners like NASA and MSF.

Erika Hamden:  My family, I have four sisters. I am the second to last one, so there was a lot of us around. In some ways, that was nice because no one gets too much focused attention. I spent a lot of time reading. I was always trying to talk somebody into driving me to the bookstore or the library so I could get more books. 

Tanya:  What were you reading?

Erika Hamden:  All sorts of things. I would read fiction and non-fiction. Partly, I wanted to always go to the bookstore because I just liked to look at all the new books that were out and peruse things. I developed this method of trying to figure out whether a book would – whether I would like it or not based on the cover, and the back page, the back description, and then the first couple pages. I just read almost anything if it caught my attention.

For a while, I had a phase where I was super into Star Wars novelization stuff. There’s a whole bunch of Star Wars books. I read a ton of them from the mid-’90s. I would get into things and just read a lot about it. Then I would go to a different subject. I varied all over.

Yeah, I read a lot. I was always really good in school. My family was super into academics, so we all had to get good grades. I always did my homework.

Tanya:  Where did you grow up?

Erika Hamden:  I grew up in New Jersey in a suburb of New York City called Montclair that actually Buzz Aldrin is from.   

Tanya: Oh my God, yeah. That’s amazing. First of all, I was just in Montclair Sunday.

Erika Hamden:  Oh, awesome.

Tanya:  Yeah, my uncle lives there. Yeah, no, beautiful suburb. 

Erika Hamden:  Yeah, it’s a really nice town. The schools were great.

Tanya:  Is that where Buzz is from?

Erika Hamden:  Yeah, he was born in the hospital in the next town over, but he grew up in Montclair. He went to my middle school, which at the time when I attended was called Mount Hebron and then they renamed it a couple of years ago to Buzz Aldrin Middle School. Then he went to the same high school. I met him one time actually when I was a senior in high school. He asked whether we still played football on the same field and stuff.

Tanya: Oh, wow, that must have been such an honor for you.

Erika Hamden:  Yeah, I used to joke in middle school. There’s a bust of him in the entrance lobby. I would say one day there was going to be a bust of me there, too.

Tanya:  It very well might be. You’re getting there. You really are on a path to potentially uncover some incredible spatial stuff that we don’t know. What initially sparked your interest in space and specifically stars?

Erika Hamden:  I actually have a very particular incident that I feel started it. I was in second grade. I remember I was sitting reading on the couch, I think. My mom came over and she was making dinner. She had the news on. She said, “Oh, there was just a story about how scientists want to come up with a new name for the Big Bang. There’s a contest that people can enter so I think you should enter the contest.”

I looked at her and I was like, “Oh, what’s the Big Bang?” Since she was making dinner, she was too busy to explain the mysteries of the universe to me. She said, “Oh, go look it up.” I went upstairs. We had an encyclopedia, so I looked it up in the encyclopedia. I remember reading the entry. That was the first time that I realized that space was a thing.

It talked about the beginning of the universe. Then in the back of the encyclopedia, the last volume was an atlas. I remember going to the atlas, and in the end, it had a map of the solar system, and then it had a map of the galaxy, and then it had a map of the known universe. I read all of that. I just was like, oh my God, this is the greatest thing I have ever heard of. That was basically it.

Tanya:  How old were you?

Erika Hamden:  I think I was seven or eight. I knew how to read and I learned how to read in first grade. Yeah, I think I was seven.

Tanya:  Wow, so your love for space really started at a young age?

Erika Hamden:  Yeah, as soon as I learned that space was a thing, I was into it. Then I immediately wanted to be an astronaut because I was like, well if space is so awesome, I want to go there.

Tanya:  Wow, and is that still one of – a goal of yours to go there to [05:24]?

Erika Hamden:  It is, yeah. It’s a goal of mine. I’ve talked to a few astronauts and they always say that you should do the things that you love. If along the way, you can qualify for being an astronaut, then that’s great, but the odds of it are so low that you can’t design your whole life around something that is very unlikely to happen. I’ve tried to take that advice and do the stuff that I love. I still am qualified, so I’m going to try the next time around. I also know, well, the odds are small, but I’m going to give it a shot.

Tanya:  What do you need to qualify?

Erika Hamden: The very base qualifications are very basic. You need a bachelor’s degree in a hard science and then some years of experience in your fields. It could be engineering, or math, or if you have a Ph.D., then that meets the years of experience qualification. You have to be in good health and have good vision. That might be it. There’s very few actual requirements.

Then they will take the applicants and they split them into qualified versus highly qualified. Then they really only consider the highly qualified people. For that, they consider things like do you know how to scuba dive? Do you speak another language? What kind of experience do you have in a difficult environment or isolated conditions?

Do you know how to fly a plane? Are you the type of person that someone would want to be stuck in a tiny spaceship with for six months? They say things like, would someone want to go on a camping trip with you where you have to rely on the other person, but also you have a good attitude?

Tanya:  Wow, yeah, those are a little bit more ambiguous for sure. Okay, well, hopefully, you’ll get there. You’ve done work at the Jet Propulsion Labs which is connected with NASA just to switch gears a little bit. What was that experience like? What were you working on?

Erika Hamden:  The experience was awesome. I started in 2008 as a grad student. I was a grad student at Columbia. I worked on this project that was at JPL. I remember the first time that I went there to start working on a project. You’re driving on the highway and then the exit it says NASA JPL next exit.

I was so thrilled because JPL builds Mars Rovers. They build all these satellites that have gone to the outer planets. They built Voyager. I just have admired the work that they do for a really long time, so it was very thrilling to go there.

The project I was working on was this new type of detector technology that we were trying to develop to be very efficient in the ultraviolet. At the time, I didn’t know very much. It was my second year of grad school. I was drawn in this team of people who had been developing these detectors. I was going to work on one aspect of making them work better.

Tanya:  Just for people that don’t know, what is the purpose of working on these detectors? What do they do?

Erika Hamden:  In general, for building telescopes of any kind, the detector is really the heart of the telescope. It’s the most important component. It really sets a lot of the telescope capabilities. Most people associate telescopes with the big mirror; that is important, too, but the detector is really a key component.

What we were trying to do is develop this different type of detector technology. In the ultraviolet, the technology has lagged a lot compared to other wavelength ranges in astronomy. We were trying to develop this new sensor that was easier to operate; it’s easier to fabricate; it’s cheaper to make. Historically, this type of sensor didn’t work in the UV, and so we were – because the previous technology that had been used on a bunch of space missions was really not very efficient. For every 100 photons that hit the detector, it would actually record maybe 10 of them. That’s not a lot. We were working on this new technology that would be able to detect between 60 and 90% of the photons. 

Tanya:  Just so that I understand what you’re saying, basically the telescope would only record about 10% of what it was seeing?

Erika Hamden:  That’s just for the light sensor. The rest of the telescope also has different losses like every photon that hits a mirror, some of them get absorbed and they don’t necessarily reflect. The overall throughput of these telescopes is really low, but the detector is a huge part of that. If your detector only is 10% efficient versus 60 or 80% efficient, it makes a big difference.

Tanya:  Wow, no kidding; okay. 

Erika Hamden:  Yeah, the detectors at the time, we didn’t know if they were going to work or not. That’s the whole point of discovery, but they had a lot of potential. We thought it was worth putting basically years of work into it.

Tanya:  What did you actually accomplish in your time there?

Erika Hamden:  In addition to having a great time in all of my trips to JPL because it’s just a super cool place, you can go visit the Mars Rovers. They have these clean rooms. There’s viewing galleries where you can go and see the progress. They just build the most incredible stuff there.

We were successful in developing this detector. When we started, we had a couple of different technologies that we needed to try out individually, and then try them out altogether, and then show that they were robust and that they would work under a variety of conditions. Then the final step of that was actually putting the detector in a telescope and flying it to say, look, this even works in a telescope in the exact environment that we anticipate. FIREBALL was actually in addition to doing interesting science. The idea of it was to prove that this detector technology that we’ve been working on for a really long time would actually work.

Tanya:  Amazing; okay, before we get into FIREBALL because that’s a super interesting topic, how many people were on your team at JPL?

Erika Hamden:  At the time that started, it was a pretty small group. The woman that led the team, she’s still at JPL. Her name is [11:38 Sholay Nexodd]. She originated really the foundational technology that made this type of detector work in the UV. She was our group leader. Then there was me and maybe just a handful of other people, I want to say like three or four who were doing some of that initial basic work and testing.

Then as we progressed and as it seemed like the sensors were working, that group started hiring more people. I joke with them that I started as a grad student and then they’ve since hired three or four people that do the job that I was doing. They definitely expanded. They do a lot more detectors now since it’s much less experimental. They just have a much bigger – which I’m still a part of. I’m still working with them. This proposal that I’m writing right now uses the detectors. I was just on a telecom with the whole team [12:34] all about what we were going to do. 

Tanya:  Yeah, I’m assuming it’s just this beginning?

Erika Hamden:  Yes.

Tanya:  You guys have lots and lots of work to do. How long did it take you to develop this sensor where before it was capturing about 10 photons or about 10% of all the stuff and you got it to 60 or 70? What was the period? 

Erika Hamden:  That took about three years from the beginning to our very first sign that it worked. Then it took another – yeah, so those three years just we had proof from other things like we tested it out on just bare silicon wafers, not on actual detectors, but just test wafers. I could say, oh, it works in that environment, but that’s really different from saying it works in a real detector. Yeah, it took three years of mostly messing things up before we finally got it right. Then after that, it took another two years before I would say that we felt really good about the process and that we could make it work for anything. Then until the final flight, like the actual flight when we put it on FIREBALL, that was ten years.

Tanya:  Wow; okay, let’s talk about FIREBALL. What is FIREBALL?

Erika Hamden:  FIREBALL is a telescope; it’s an ultraviolet telescope. The name stands for the Faint Intergalactic-medium Redshifted Emission Balloon which is a very long acronym, so we now call it that.

Tanya:  Thank you for that.

Erika Hamden:  Sometimes, even I forget one of the words in that.

Tanya:  Yeah, that’s a long one; okay.

Erika Hamden:  Yeah, we call it FIREBALL. The version of the telescope that we flew in September was actually a second iteration, so we call it FIREBALL 2 because there was a FIREBALL 1. It’s an ultraviolet telescope which means that it has to be – in order to do its observations, we have to be above most of the atmosphere. If you have a UV telescope, you either have to do it from space or the stratosphere. Those are your options because ultraviolet light is the kind of light that gives us a sunburn but the atmosphere luckily for us, it blocks most of the UV light that is coming off of the sun or just from space. UV light is really damaging to DNA, to people’s skin. That’s one of the causes of skin cancer. It’s also damaging to all of your space hardware.

FIREBALL is weird for a telescope because it’s not actually a space telescope, but it’s not ground-based telescope; instead, it’s a balloon telescope. It goes up on these giant weather balloons. In our case, it observes for one night. It’s this strange hybrid of an atmospheric experiment, but we’re looking at space.

Tanya: Why just one night, like a 24-hour period?

Erika Hamden:  Mostly due to the FAA requirements and the fact that we want to get it back. You send it up, and the balloon – there’ s a branch of NASA that’s called the Columbia Scientific Balloon Facilities, CSBF. They do the balloon launches. They have a whole team of weather people.

The weather people determine once the balloon goes all the way up to the stratosphere, goes to 130,000 feet, they determine its potential trajectory across the United States. We do these launches from New Mexico. They’ll calculate, okay, if we launch today, then the balloon will ascend to 130,000 feet. Then the wind at that altitude is heading west at 20 knots. That means that we’re going to be above California in 15 hours.

The problem with being above California is that in order to come – to bring the telescope down, we have to pass through LAX airspace. The balloon people are friends with the FAA and they can make some accommodations. If we pass through other airspace like if you’re coming down in the middle of Arizona, there’s probably no major airport there, so that’s fine. If you’re coming down in the Texas panhandle, that’s probably fine, too, but if you’re coming down through LAX airspace, there’s no way that they will let you do that.

Once you hit California, you either have to cut down immediately or you have to fly all the way above California, across it, and then ditch in the Pacific Ocean. California is a very hard stop on where you can allow the balloon to go, so partly that sets the limit. Then in the other direction, if the wind is heading east, you can’t fly over Dallas. It just starts to get – the airspace becomes a lot busier. Even though we’re floating above it all, we still have to come down at some point. That sets the east-west limit. The wind tends not to go too far north or south although there are restrictions like we can’t fly into Mexico I think for obvious reasons.

Tanya:  FIREBALL is an incredible project which has involved a lot of different people, and entities, and players. How was it conceived? How do you get something like that green light?

Erika Hamden:  It was conceived in the early to mid-2000s by Chris Martin, the PI who was a professor at Caltech. Basically, the first thing that you do is you come up with a science question like what do you want to know about the universe that you don’t know and you also can’t find out using the telescopes that exist already? You have to motivate it and say, we want to do this really interesting thing, but we can’t do it any other way, so we need to build a telescope. Once you have that question, that actually – the question sets almost everything about the rest of the mission. It will set what type of telescope do you need. For our science question about trying to observe hydrogen around these distant galaxies, we need a UV telescope.

Tanya:  What’s the interest in observing hydrogen around the galaxies?

Erika Hamden:  It’s basically to understand how galaxies evolve through time. We look out into the universe and you can see galaxies. They have this wide, wonderful variety of shapes, and colors, and sizes. We can explain like, okay, well we see this is a newly formed galaxy. It’s making lots of new stars. It’s blue-colored because new stars are blue. It’s like a spiral versus this other galaxy that has no new stars in it. 

We can talk about their present state, but we can’t necessarily explain why they have these two different patents. What’s different from a galaxy that has lots of new stars versus a galaxy that has no new stars? We think that the reason is the environment that they’re in. A galaxy with lots of new stars has a connection to the larger – these large clouds of hydrogen that we think are in the what we call the intergalactic-medium, the space between galaxies. A galaxy that has big reservoirs of hydrogen flowing into it, those reservoirs will sustain star formation in the galaxy. A galaxy that doesn’t have those reservoirs, it’s not going to be able to keep making stars. It’s going to run out of hydrogen.

We think that the nature and the size of those reservoirs’ changes throughout the history of the universe. If you look at really distant old galaxies, they’re going to have a different hydrogen reservoir than ones that are right nearby to us. FIREBALL is trying to look at a very particular age of galaxy to understand the hydrogen reservoirs that are around galaxies of that age. It’s one step in a bigger question which is, what’s happening throughout the history of the universe; not just at the one stage that FIREBALL’s looking at, but earlier and later? It’s a really fundamental question.

Tanya: Yes, it is.

Erika Hamden:  Why do galaxies look the way that they do?

Tanya:  Awesome; and then in terms of green light, you were green-lighting the FIREBALL. You mentioned that it was originally created and then you had to come up with the big question and inquiry which sets the path forward for it. Then what needs to happen?

Erika Hamden:  At that point, you build a science team and you figure out, okay, how are we going to actually construct this? Chris, the PI, he had a long-standing collaboration with a number of scientists in France. The French have a very long history of ballooning and ultraviolet science, so that was a natural connection.

Basically, the process is like, Chris wrote a proposal to NASA and describes the mission. Then the French team also writes a proposal to the French space agency to describe the mission. Then both of those have to get funded. Then you can build, start building the telescope.

That proposal process is open. NASA has a website where they publish what they call Announcements of Opportunity, OAs, where you can propose to different calls. In principle, it’s straightforward, but in practice, it’s complicated because you have to do an initial design of your mission before you can actually propose it. You have to do a little work ahead of time. Then once you get the funding to build it, then you can start doing detailed designs and refining things. 

Tanya:  How much money did you estimated that you needed for FIREBALL to get it launched? 

Erika Hamden:  FIREBALL 1 had flown in 2006 and 2009. That was before I really worked on it. The team realized that they needed to improve the telescope and make the detector better in order to actually do the science we wanted to do. That’s partly what motivated my detector work.

Then we re-proposed in I want to say 2012 to reformulate the spectrograph to make it more efficient. That’s when changed from just FIREBALL to being FIREBALL 2. The total mission has been going on for I’d say for 15 years. Probably between the French and the US, the contribution is about $20 million.

Tanya:  Wow; and has the mission ever succeeded in actually addressing the initial inquiry to date?

Erika Hamden:  I hesitate to say no. We’re still working on the data from the most recent flight. I think we will have – we’ll be able to extract something, but it won’t be a complete success. The flight in 2018 for FIREBALL 2, we have – we did prove a lot of things. The technology development we have been able to prove that it worked in a space-like environment.

That’s part of the function of these missions. It’s not just to do the science, but it’s also to do technology development because NASA is very conservative about what it puts into space. If you want to purpose a detector for a space telescope, you have to show that it’s going to work in space which is a little bit of a catch 22 because you can’t send it to space until you’ve proved that it would work in space. Doing these balloon flights is an acceptable alternative.

In that sense, it was a success that we tested the detectors. We tested a bunch of other new technology that the French have contributed and that we had added. From a technology standpoint, it’s been great. From an observing hydrogen standpoint, it has been frustrating.

Tanya:  You talked about the flight in 2018. You gave a brilliant TED talk about that, which by the way, I highly recommend anybody listening to go check out the TED talk. Erika was just really incredible on failure actually. Can you talk about the flight and some of the most challenging parts as well as the thing that you’re most proud of?

Erika Hamden:  Yeah, the flight was in September of 2018. We had actually been in – we do the flights from Fort Sumner, New Mexico, this little town. We had been there for about eight weeks, six weeks by the time we actually had the flight. We’re testing things out. We’ve put everything together. We checked that it works. Then we wait for the weather to be good.

Finally, after a long time, on the morning of September 22, we – the weather was good. Everything looked great and so we had our launch. The telescope ascended up to the stratosphere. That was really a thrilling experience for me because I almost never thought it was really going to happen. I had been working on it for so long that it just seemed like this endless thing. Then we finally got it off the ground.

It took off at 10:30. It takes about three hours to reach the float altitude. Then we wait for the sun to set because it’s a UV telescope; we needed the sun to be down to do the observations of space. Throughout the day, we were just checking that we could still communicate with it. We all took a nap. 

Then that evening, we got back to the base where we work. We were starting our operations. I was running the mission control. I remember telling the person who was taking the log, I would read out the altitude every so often. I remember I’m reading the altitude out and I’m like why is this number still going down? Because it drops a little bit and then it’s supposed to stabilize. It did not stabilize; it kept falling.

Eventually, about an hour after sunset, the balloon people came downstairs, and they told us that there was a hole in the balloon. That’s why we kept losing altitude. The altitude is really important for us because the lower you are in the atmosphere, the more the UV light gets blocked. The altitude was such a crucial thing.

All of our equipment actually worked beautifully which was a nice. Maybe that’s my favorite thing about the day that we worked so hard on all of these different complicated components and they all worked really well. Then the altitude was so low by the time the sun set that we really didn’t get a lot of good data. The more time went on, the farther we dropped. We were scrambling to change from our planned targets to something brighter that at least we could just get some data, a brighter object. We ended up pointing at Andromeda because Andromeda is a super bright UV source even though that was not at all in our science plan, but by the end of the night – or not even by the end of the night; it was a few hours in. We just were like, well, we need to look at the brightest thing around.

That was really a huge disappointment. It was the kind of thing that we can’t plan for because we don’t do the balloon launches and we can’t control it. That’s a thing that happens sometimes with them. Personally, when they told us, I was – we were so in it and I was like I do not have time to have an emotional response to this new development.

The next day, I cried. It was a huge accomplishment that we got the telescope off the ground, and we had built it, and it worked, but still, that one tiny piece that would have told us that the mission was a total success, that we – we didn’t have that. It was really hard because I – and I talk about this in the TED talk. It made me think a lot about why I do the things that I do and what keeps me going in times when, inevitably, things go wrong. In some senses, it’s been a point of reflection. If everything had worked, I wouldn’t have stopped to really think about why I do the work I do. I’ve tried to at least take the positive things out of that experience.

Tanya:  Actually, the people that are listening, on your website, you have this incredible, and you also show it on your TED talk, this incredible picture of FIREBALL 2 that is out there in space right next to the moon. It’s pretty amazing. When you see that, obviously, it’s a huge bittersweet moment like you just shared.

What was the conversations like the next day within the team? How do you pick yourself up and keep going? What do you say to the team? What were the internal discussions like if I was a fly on the wall?

Erika Hamden:  One of the great things about the team – well, all the people on the team I’m really grateful to work with. A number of them, they have a lot of experience in balloon flights in general for FIREBALL. There are people who have been on it since the very beginning. They all have had experiences where you do the flight and then something goes wrong. For them, there was no question. One of the French guys came up to me the next day and he was like, alright, so when are we going again? He was 100% ready for trying the next time. 

For the newer people, I think – this was my first balloon flight, and so for me, I would put myself into that category of, I had to really work through the feelings of let’s say we do this again and the same thing happens, will it be worth it to me. I think from my position now, I would say, yes, absolutely. You get way more out of it than just the data at the very end and so that process is worthwhile. I think the other members, who are new, they’ve all had to make that assessment for themselves.

The internal discussions, we had a meeting of everybody – actually, we had a party. It was that we rent houses in this town and so I had them run over to the house I had rented, I made a bunch of food, we all brought a ton of drinks and we tried to just be positive about having made it through a flight because that was a huge accomplishment. Not let what happened take away from the fact that we had done it. I would say we were mostly positive.

Since then, we’ve had a lot of discussions about, okay, what do we do need to do – what can we improve for next time, what do we keep the same, more logistics of getting it put back together for the next time around.

Tanya:  It sounds like you were pointing to this, the more senior people, the time in which they were ready to go again and jump back on it, was very, very small. It happened, things didn’t go well, when are we doing it again versus this was your first flight and you really had to work through that emotion. That’s actually a really great way to experience failure and process it. First of all, what did you learn about that on failure, and what do you think, perhaps, allowed the more senior people to reduce the time they maybe felt bad and to get back on it?

Erika:  For me, I feel like personally I learned that I can get through anything. That experience, from the launch to when it crashed and we had to go get it, I would say that was one of the best and also one of the worst days of my life. Having been able to get through it and do all the stuff that I needed to do in the moment, I felt very proud of myself. Then being able to think back on it and try to understand how can I go into the same situation again? That’s been something I’ve had to figure out. Am I prepared to rebuild this telescope, show up, again, in this tiny town in New Mexico and do this all over again, knowing that the outcome could be the same? That I feel like I’ve thought about it and I think it’s worth it because I don’t know that the outcome will be the same, so I’m willing to take that risk, just because I think the payoff of understanding is worth it.

I think for the senior people on the team, they’ve just seen everything. They’ve been through a lot and so they know that this one failure is not a killer, but there’s no endpoint. We try again and then we get better results the next time. They can see that this process is iterative, that and the, I don’t know, wisdom that comes with age.

Tanya:  That’s also a muscle. That’s something I was wondering, resilience. You said FIREBall initially started in 2006. That was the first launch, right but when did it actually start?

Erika:  Yeah. It started in 2002 or 3.

Tanya:  Yeah, so from 2002 to today, 17 years, that takes commitment, and unquestionably you guys are going to get there, it’s just a matter of time. You’re going to work through whatever needs to get worked through. Resilience, what are your thoughts on that and what has it taken, from your standpoint, to keep going?

Erika:  Resilience is really – you can think of it is like a muscle that you can choose to exercise and the more you use it, the better you get at it. I sometimes think about it as self-knowledge or confidence. I know that I will be able to do something, or that I can handle whatever gets thrown at me. I guess those two are probably two sides of the same coin. I think for me, really the first serious experience that I had was going to college and dropping out of college and realizing after I dropped out of college that I was still a valuable person who mattered. I was able to rebuild my sense of self and go to college again and succeed and feel like I could take this devastating experience and move passed it and use it to inform my future choices.

Tanya:  What made you drop out of college because your academic accomplishments are outstanding, completely academic. What happened?

Erika:  I went to MIT and I was 18. Maybe all freshmen are very naïve but I was especially naïve. You asked me what I was like as a kid, and I don’t think I was that different. When I was a teenager, I liked to read. I was very straightforward. I thought that people were going to go to MIT because they really loved science and they wanted to discovery things. Then the reality of college was just not what I was anticipating, and I wasn’t really equipped to deal with that. I didn’t know how to do things for myself or, I don’t know, soothe myself. I felt a lot of anxiety and I had panic attacks, which I never used to have.

MIT, it may be better, I don’t know, but they, sort of, said, “Well, you can just leave, if you want.”  That’s what I did. I just dropped out and they took my name off of things. That was really hard because my whole identity was about academic achievements.

Tanya:  Yeah, I can imagine.

Erika:  Then I took the rest of that year, I worked at a Borders in the café and I read a lot of books. I worked –

Tanya:  [26:38] 

Erika:  Yeah, I took classes at the [Youth Montclair State], the university in our town. Yeah, I just tried to exist and figure out what actually drove me, and to make sure that my identity and my choices were around things that I wanted to do and not what I thought people wanted me to do.

Tanya:  That’s a big one. That’s a huge one, actually. I just want to highlight this because what you said is so important and it’s something that I hear over and over and I’ve also experienced. When you’re doing something that is not in alignment with your higher purposes, whatever that is, you get these signs: anxiety, depression, no energy. It’s just like, life feels clunky. It sounds like that’s – it’s amazing that you were astute enough to recognize that and put a pause because most people don’t. They go through it.

Erika:  Push through it, yeah.

Tanya:  Yeah.

Erika:  I struggled with that too because I don’t want to be a quitter, I didn’t want to be a quitter. There’s a lot of stigma about just saying, now I need to give up.

Tanya:  Even if that’s the right thing to do.

Erika:  Yeah, and for me it absolutely was. I would joke with my graduate school adviser about how I didn’t have a lot of grit because I have no tolerance for just being stuck in a bad situation. I don’t do all-nighters because I know I need to sleep. You could interpret that as I’m not committed or I’m not going to do whatever it takes. I guess, from my perspective, I feel like I know what I need to do the work that I love and so I have to do those things first.

Tanya:  There’s also not one way of doing it.

Erika:  Yeah. For me, I have to be happy every day in my work and in the place where I am, to keep going. I guess the lesson I really learned was I need to – at MIT, I wasn’t happy and I wasn’t taking the steps that I needed to make myself happy, and I didn’t even know what those steps were. Now, I know what I need and I know how to get it and I do not let anything keep me from that. 

Tanya:  You spent a year – you said a year, reading a lot of books, working at Borders, taking classes at the local university. At what point did something click for you and you’re like, okay, I’m ready to go back out?

Erika:  I would actually say that it didn’t really happen until I was back in college. I reapplied to college and I knew that I was ready to stop living at my parents’ house. When I got to Harvard, which is where I ended up going, that first day I was so scared. I was like, what if the same – what if I just can’t go to college. What if I’m one of those smart people who is unable to perform in a stressful environment. I had all these fears and I just was like; I’m going to take this one day at a time. I signed up for classes that I felt would make me happy and would keep me interested, and I gave myself permission to do okay and make it through the semester. It took a while to really feel like I could do it. I had to be kind with myself about being scared and give myself leeway to have all those feelings and not just assume that everything was going to be perfect.

I think that’s helped a lot to – even when we were doing the balloon flights and we’re in this tiny town in New Mexico and it’s really stressful and there’s nothing to do for fun, but I know from – now, from all these experiences, I know, okay, if I have the right food with me, if I make sure that we have a good schedule, that we take breaks, that we sleep, that we take the time to have fun, that we’ll be able to get through it and it will be enjoyable. At the time – I remember driving home from MIT in my parents’ car, they had come to pick me up, and feeling like I was so worthless and like my life was over. Now I look back on that and I feel like that was the bravest, most valuable thing that I could have ever done.

Tanya:  Absolutely, yeah.

Erika:  I’m really glad that 18-year old Erika did that.

Tanya:  That’s amazing!  First of all, thank you for sharing that because it takes balls. It’s a very vulnerable moment. Especially coming form somebody that has received so many unbelievable awards, and the Presidential Early Career Award for Scientists and Engineers, 2019, nominated by NASA, TED fellow –

Erika:  Yeah, I’m very thrilled at that.

Tanya:  Yeah, I’m even nervous about reading some of these awards because I probably will mispronounce them, it sounds so great. That’s incredible. It seems like the experience that happened to you in college, at least initially, allowed you to trust yourself and trust that you are going to make the right decisions for you. That’s your path and since then, you’ve accomplished some incredible things. That’s amazing. Actually, I’m going to quote you for a second, something that you said in your TED talk, which I thought was pretty amazing. You said, “Discovery is mostly about finding things that don’t work, and failure is inevitable when you’re pushing the boundaries of knowledge.”  As someone that primarily deals with the unknown – it’s an uncharted path. Nobody’s telling you, Erika, if you do this, this, this, you’ll get there. You’re completely unchartered.

What does it take from you to really hold that space and tackle some of these enormous inquiries and questions?

Erika:  I’ve had to get comfortable with being uncomfortable all the time. I’ve spent so many days – I’ve even told people working on the detector stuff, I’ve said, my God, I wish someone else had done this so I knew what to do. I tell myself, I’m like, Chris, the professor I worked with at CalTech, the PI of FIREBall, so many times he says, “If it was easy, someone else would have done it.”  I have to remind myself that what I’m doing is hard and no one has done it before and that’s why it’s hard so it’ okay. I can’t ever guarantee that I’ve going to discover something, I can’t know that it’s going to work, but I also know that if I don’t try, then I’m definitely never going to find out.

I think that’s actually part of what keeps me going is the fact that I insist on being happy in it every day. I have a good life. I work with people I like and admire. I still find the problems interesting. That helps keep me going because I can’t rely on a discovery as the thing that will make it worthwhile. I don’t know if that’s ever going to happen, so it has to be worthwhile today.

Tanya:  That’s very interesting. It’s a different context that you apply to your work and your life. Instead of being hungry for a major discovery and being miserable in the meantime, whether it happens or not you invented, or created, for yourself a context of, I’m going to enjoy the journey, working with people that I love, and be happy in my work and connect to the actual enquiry and the mission.

Erika:  Yeah. 

Tanya:  That’s very powerful. In other words, nothing changed except the context that you created for yourself.

Erika:  Yeah.

Tanya:  Amazing. That is brilliant, brilliant. Okay, so what are you working on now?

Erika:  Right now, I’m working on a proposal for a new space telescope. This is my own idea, which is pretty exciting because up until now, I’ve really been carrying out other people’s ideas. This is first mission that I’m PI of. It’s an ultraviolet space telescope called Hyperion. It’s designed to observe clouds of hydrogen in our own galaxy that are parts of star-forming regions. Right now, we don’t know what is required. We can’t look at a nebula in the galaxy and say, in 2 million years this will form this many stars. Even though the process is it should be something we can understand, right now we don’t have that level of knowledge yet. This telescope is focused on that, on trying to understand the origin of stars. The tag line is that it’s a Hyperion origin of the stars.

Tanya:  Very nice. Who are you going to submit the proposal to?

Erika:  This is also a submission to NASA. It’s due on August 1st, which as of this recording, is not that long from now. We’re going to submit it actually on Monday because we have to do it a couple of days ahead of time, for logistical purposes. I have six days until it’s done and we’re in the final stage of just polishing things. The cost of this telescope size for NASA is modest, it’s $145 million, which is a lot of money, but compared to a Hubble space telescope, it’s a small telescope. I’m working on it with people from Ball Aerospace and Ames Research Center and JPL. It’s been a really interesting process, to take something from just an idea, like my science question, all the way to a concept for a mission and it’s been a really great time.

Tanya:  When do you know if NASA is going to give you the grant?

Erika:  We’ll find out probably in December. It goes through a big review process.

Tanya:  I can imagine. You’re asking $145 million; did I get that right?

Erika:  Yes.

Tanya:  Wow!  Well, I’m sure that if this project gets approved, which I really hope it does, the learning when you’re really the architect of the idea, is brutal, but it’s unbelievable.

Erika:  Yeah, it’s already been brutal.

Tanya:  Yeah, I can imagine. What about FIREBall? Are you still planning to launch, I guess, FIREBall-3 in 2020?

Erika:  It’s going to be just like a second launch of FIREBall-2 because we’re not really going to change too many things about it. Our plan is, yes, for 2020. As soon as this is submitted, I’m going to France to work on it. Partly, the schedule depends on how things shake out with other balloon missions. The campaign for this year is starting and we have to see who flies, how the weather is and then that will determine where we are in the list of missions for next year, but we’re still going. There is another team member who’s taking over some of my responsibilities so that she can get experience running the team too, so I have a little bit less work to do on it. 

Tanya:  Okay that’s great. Given that this will not be your first rodeo, I’m sure the ups and downs will be a little bit smoother.

Do you have a funny or interesting story that sticks out in our mind about your time working at the labs or any other project?

Erika:  I have a lot of funny stories about being in New Mexico for the balloon launches. The town has very limited – there’s a very small grocery store and the food options are pretty slim. Half of the team is French and they really like their food. One night, we were doing this night-time test and one of the French guys didn’t have anything to do at that moment, so he came over and was chatting with me. He was like, “You know, Erika, I have to tell you that I am so tired of eating white bread and Cheddar cheese!”  I’m like, [Johan], you can buy Brie from the Wholefoods in Albuquerque. It’s two and a half hours away. They’re so funny. They’re so great at what they do and they’re such lovely people but he just like that day he had had it and I was like, you can eat other things. 

Tanya:  The French take their bread and their cheese very seriously, and rightfully so.

Erika:  Partly in my role as running the team, I want all of my team members to be happy and fulfilled and so I had French cheese Fed-Ex’d in from Murray’s Cheese shop in New York City. Two days later, I gave him a box and I was like, Johan, for you!

Tanya:  Oh my God!  What was his reaction?

Erika:  He was so excited and all of them were so excited and they like – I think they don’t really appreciate the power of Fed-Ex and [51:15]. They could not believe. They were like, how did you get this? How did this happen? I was like, we can get anything in America in two days.

Tanya:  That’s awesome. This is a really, really awesome example of a way to just connect with your team and really keep them motivated. Going through such a long process and such a challenging process, how do you get your team motivated and connected

Erika:  Well, I think the most important thing is that I make sure that they know that I really value their time. People do a job because they care about it and because they need the money, but I want them to know that it’s not – I think that their time is the most valuable thing that they have and so I’m not going to waste it. They know that if I ask them to do something it’s important, and I only ask them to do things that I think are important. That helps a lot that people really trust you with their time, if they know that you think that they’re valuable.

Then I pay close attention to what motivates people because different people are motivated by different things and so they need to be treated in a different way. The French are a good example because to manage them, they prefer to know all the bad things right away. They don’t want me to tell them everything that worked; they’re not concerned with that. They want to know what’s wrong and what needs to be fixed. Whereas some of the grad students who are still starting out, I can’t just leave with a giant list of everything that they did wrong, they will feel attacked, so I have to handle them in a different way.

I just pay really close attention to individual people and try and treat them in a way that is respectful but also – I change my style depending on what I think they need and then I adjust that. It’s like a continuous process, which requires a lot of attention. I have to really pay attention, but I feel like that’s the way I can get good work out of them and they can be happy and feel supported. I think that also contributes. The people that were in New Mexico with me, all of them have said that they’ll come back.

Tanya:  Wow that’s an incredible testament to your leadership. That’s actually one of the signals that we look for in a great leader. Do people follow you? In your case, the answer is yes. That’s great.

Erika:  We had been there in 2017 and we didn’t even get a flight and everyone came back. I think that’s also because they all know, on their own, why they’re doing it.

Tanya:  Erika, how do people get in touch with you, if they want to check in, keep up to date?

Erika:  You can follow me on Instagram. I’m tooting my own horn now, but I have an excellent Instagram account. I post one post a day but I try and find something that is beautiful in my life every day, so it changes. Sometimes it’s about my work and sometimes it’s my cactuses at my house. I have an active Instagram and the handle’s just my name, erika.hamden, so follow me on Instagram. I have a Twitter account, that’s also @erikahamden and that’s a lot more science and technically focused. Yeah, those are the best ways. I have a website, which does not have a ton of information. You can see my very technical CV and links to my papers, which are also very technical.

Tanya:  They can also see the picture of FIREBall-2 next to the moon, which is amazing.

Erika:  Yes, and I am working on a website that I will link to on my personal website. That’s about Hyperion, the mission that I’m proposing. 

Tanya:  That’s awesome. Well, Erika, thank you so much for taking the time amidst the final deadline to submit the upcoming project, I really appreciate it and I wish you all the best. I’m going to send a lot of positive energy for this project. Amazing, amazing story. Thank you so much.

Erika:  Thank you so much for having me, it’s been really great talking with you.

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Dr. Andrew Newberg, is a ten-time author, TEDx speaker, leading researcher, and neuroscientist who studies the relationship between brain function and various mental states. He’s appeared on Dr. Oz and a Netflix documentary hosted by Morgan Freeman called God, and his work referenced in countless media publications including The New York Times, O Magazine, and Reuters, just to name a few.

In this episode of Unmessable, Dr. Newberg and Tanya discussed what enlightenment is and the role it plays in you being an effective leader.  Hint: enlightenment is correlated to leadership. They also discuss how one can practice enlightenment by design and how words change your brain. Additionally, Dr. Newberg shares some of his scientific findings on how to build trust and resolve conflict at work and in life.

Tune in to get the full conversation and learn about:

• • • How your brain changes with meditation, religious and spiritual practices
    • Why we believe what we believe
    • How words change your brain
    • How to build trust and resolve conflict
    • Neuroscience concepts
    • Leadership
    • Enlightenment
    • Mental health and states

Dr.Andrew Newberg’s biography:

Dr. Andrew Newberg is the director of research at the Marcus Institute of Integrative Health and a physician at Jefferson University Hospital. He is board-certified in internal medicine and nuclear medicine.

Andrew has been asking questions about reality, truth, and God since he was very young, and he has long been fascinated by the human mind and its complex workings. While a medical student, he met Dr. Eugene d’Aquili, who was studying religious experiences. Combining their interests with Andrew’s background in neuroscience and brain imaging, they were able to break new theoretical and empirical ground on the relationship between the brain and religion.

Andrew’s research now largely focuses on how brain function is associated with various mental states—in particular, religious and mystical experiences. His research has included brain scans of people in prayer, meditation, rituals, and trance states, as well as surveys of people’s spiritual experiences and attitudes. He has also evaluated the relationship between religious or spiritual phenomena and health, and the effect of meditation on memory. He believes that it is important to keep science rigorous and religion religious.

Andrew has also used neuroimaging research projects to study aging and dementia, Parkinson’s disease, epilepsy, depression, and other neurological and psychiatric disorders.

Connect with Dr.Andrew Newberg:

• Website
• Twitter

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Full Transcription:

Andrew:  I think a lot of my interest really did grow out of some of the thought processes I had as a kid. I was always just surprised that people had such diverse perspectives on things. I didn’t understand why we had different religious, why we had different political parties. To me, I felt like aren’t we all looking at the same world and shouldn’t we all believe the same thing?

Tanya:  That’s Dr. Andrew Newberg, ten time author, TedX speaker, leading research, and neuroscientist who studied the relationship between brain function and various mental states. He’s appeared on Dr. Oz and Netflix’s documentary hosted by Morgan Freeman called God, and his work referenced in countless media publications including The New York Times, O Magazine, and Reuters, just to name a few. Dr. Newberg is the director of research at the Marcus Institute of Integrative Health and is a physician at the Jefferson University Hospital. He is board-certified in internal medicine and nuclear medicine.

Andrew:  Those distinctions, I think for me, really weighed heavily on my mind and were in some senses upsetting to me, especially jumping forward to today’s world when you see such hostility amongst people for different ways of thinking and believing. To me, it’s very concerning to think about that, and so I was always trying to understand the big question to me, which was how do we understand reality? How do we make sense of reality? I started that process off by looking at the brain. I thought well, here’s our brain and it’s our brain that’s helping us to see and hear and experience everything around us, and so it must have something to do with the brain itself that helps us to understand the reality around us.

As I went through my own thought processes, I went through my training, especially in college taking courses in comparative religions and philosophy and so forth, I realized that the questions were far more complex and while the brain is certainly part of the process, there are a lot of other aspects to how we experience reality, especially when it starts to come to things like spiritual experiences, mystical experiences, and those fascinating perspectives on reality as well.

With all of that swirling around, I kept thinking a lot about how all these things are tied together and then it was in medical school where I was doing research looking at brain imaging studies of very traditional kinds of stuff, looking at Alzheimer’s and Parkinson’s, and depression, and that kind of thing. I had also connected with a psychiatrist who had been exploring the relationship between the brain and religious experiences really as early as the 1970s. As we were talking about all this, I realized gee, if we’re doing brain scans of people with depression, then why can’t I do a brain scan of somebody who’s spiritual?

That’s really what launched the more recent approach of this neuro-theology, as it’s called, this field of study that looks to find a relationship or the link between the brain and our religious and spiritual selves but that was what really pushed us forward in doing research studies to explore that in more detail. Here we are, 20, 25 years down the road and we’ve scanned probably four or 500 people doing all different kinds of practices and exploring what’s going on in their brain. I’m still trying to find the answer to that big question of how we understand reality. As I always like to tell everyone, if I ever figure it out, I’ll certainly let everyone know. I think that out best chance at getting to an answer is to find a truly multidisciplinary, interdisciplinary, however you want to use that term, approach that blends the best of what science has to offer with the best of what our mind, our spirit has to offer in terms of trying to figure out that reality and hopefully someday, we will figure it all out. 

Tanya:  Yeah, from my understanding, there’s a lot we don’t know, a lot, and actually the more that we get to know, the more we realize the less that we know.

Andrew:  Exactly.

Tanya:  Certainly that’s my experience with my own life. How religion, meditation, and spiritual practices – how do those impact our brain? You talk a lot – a lot of your work has focused on how those impact our mental state and what do you mean by mental state?

Andrew:  When it comes to the impact on our brain, I guess maybe the simplest thing to start out with is that I think when we look at all of the imaging studies that we’ve done and other people have done, when we think about the complexity of spirituality and religion in terms of the different elements, the cognitive, the emotional, and the experiential elements, what I think we can fairly confidently say is that there’s not one part of our brain that is the spiritual part. There’s not one part of our brain that turns on when somebody walks into a church or something like that and then shuts off when the person leaves. Again, because of the complexity of how our brain operates, because of the complexity of our perceptions of reality, because of the complexity of what spirituality and religion are, to me it looks like it involves virtually the entire brain. All the different parts of our brain become involved that has to do with our emotional responses, and the things we think and believe, and the different behaviors that we do, and all that.

There are a lot of very complex processes that occur. Some of the work that I’ve done in both books as well as in some of the research articles that we’ve published tries to delineate how these different areas of the brain operate in the context of religious and spiritual experiences and our perceptions of reality. One really good example that I talk a lot about is, for example, the parietal lobe. Parietal lobe is located in the back of our brain, the back top part of our brain, and it helps us to create our sense of self and how that self interacts with the world. Well, when people engage in a practice like meditation or prayer and they have that classic experience where they lose their sense of self or they feel a sense of oneness with all things, the parietal lobe actually starts to quiet down. I think that makes a lot of sense because if the parietal lobe is designed to – functions to help us establish that sense of self, then a loss of activity in that area would be associated with a loss of the sense of the self, a loss of the boundaries between our self and the rest of the world so that it helps us to make that connection, to feel that deep connection with humanity, with the universe, with God, whatever is the target of that practice. 

Again, we can talk about a lot of different kinds of changes that go on in the brain, a lot of different parts of the brain, depending on what elements we’re looking at but ultimately, it seems that there is a spiritual part of ourselves It is really the entire brain and of course, as an integrative medicine physician, I look at the link between the brain and the body. It ultimately comes down to all of us, our whole entire self, seems to me to be the spiritual part of ourselves, but that spiritual part is intimately linked with our biological parts.

Tanya:  Do you think that – you were mentioning that the parietal lobe really creates this sense of self and when you are engaged in a practice like praying or meditation or some form of spiritual practice, that sense of self decreases. Do you think that that is a positive thing on our society or it makes no difference?

Andrew:  That’s a really interesting question and issue that we have explored to some extent, at least theoretically, but more needs to be done to really look at whether or not these experiences are good or bad. A lot of this stems from the practice of various rituals like meditation, prayer, other types of rituals that we do, and as my late colleague used to like to say that ritual is a morally neutral technology. What he meant by that is that if you engage in a practice that makes you feel deeply connected to something, that can be a wonderful experience and certainly, there’s a lot of data that show that when people feel a sense of connectedness with a group of people – might be a church or a synagogue or a mosque, all of humanity, with God – that can be a very overwhelmingly positive experience that can be very beneficial for the individual It can give them a great sense of meaning and purpose in the world. It can quell various anxieties. It can make them feel less depressed. It ultimately has a very beneficial effect, and that’s what a lot of the data has shown. 

However, as I said, there are times where these experiences can be problematic. If a person feels deeply connected to a relatively small group of individuals, then sometimes while the connection between the group is strong, the connection to people outside of that group can become very antagonistic. It can create this us versus them mentality which can lead to a lot of struggle, strife, conflict, war, and so one always has to ask the question, when you say I feel at one with something, what is the something? Sometimes it can actually be very detrimental when you start to think about where religion has gone bad with terrorists or cults or something like that where you get into these very negative types of processes, very destructive behaviors either for the individuals or for the larger society.

That’s where we don’t really understand enough about that There’s a lot of room for future research to explore that. As a general statement, these kind of spiritual experiences and the practices that people have – in one of our recent books called How Enlightenment Changes Your Brain, we did present data from a survey that we did of over about 2,000 people. Over 90% of people report positive feelings from these experiences. Again, it could be an improvement in their sense of spirituality and religion. It could be an improvement in their sense of meaning and purpose in life. It can be improvement in their sense of well-being. There’s a lot of different ways in which these experiences cut across and help people to feel better. It isn’t 100% and so it is important for us to understand when it doesn’t go well and try to find ways of redirecting people into that more positive way of looking at things 

Tanya:  You mentioned that 90% of the people in the survey reported having an extremely positive experience. What did the 10% report that didn’t have a good experience?

Andrew:  Sometimes what is reported is that they will have some kind of – it becomes terrifying for them. They feel this incredible sense of oneness but instead of connecting with it, they feel disconnected from it. They lose themselves in it, and that can be very scary for people. The other place where sometimes these experiences can be problematic for people is that – which is an interesting problem is it’s sometimes the experience itself is overwhelmingly positive but it is so foreign to them that they have a great deal of difficulty knowing how to incorporate it into their prevailing belief system.

What I mean by that is – let’s say you were raised Catholic your whole life and then you have some kind of mystical experience or a near-death experience and when you come out of that experience, you think to yourself no one ever explained it this way. It feels completely different than anything I was ever taught. Now you have a conundrum because the question is do you reject the experience, which was overwhelmingly positive and important to you, or do you reject the tradition that you have grown up in that you also feel is an important part of who you are. That can be very problematic for people. 

Of course, another side piece that becomes difficult is that – and sometimes okay, I want to try to resolve this. I will talk with my friends, my family, a clergy member. A lot of times, they get very bad reactions from those individuals as well if somebody writes it off or sometimes it could be even worse. Sometimes it could be somebody who says oh, well, that’s the work of the devil or that was psychosis or something like that and what’s wrong with you? It can be a positive experience but still be negative for people. Very few people have truly negative experiences but usually if it is, it’s more of just a total fear. They just don’t know what to do with it and they’re not prepared for it, and so it becomes more negative for them than anything

Tanya:  I can get that, actually, and I hadn’t thought about that before. It’s like if everything you believed in and were told your entire life, in one instance something challenges the core of what you believe, it’s totally dislodging and it inserts uncertainty in you and puts everything into question, which is very uncomfortable.

Andrew:  It can be, yes, absolutely. Again, the large majority of people figure out a way to do that, whether they find a way of embracing both and figuring out a way to integrate them together or they just decide no, I’m going in a different path and I feel good about it. There could be a variety of different approaches that people take that makes them – helps them to resolve that, but it is a problem.

In fact, there have been a couple of studies of something called religious struggle where it really can be very detrimental. It can increase anxiety; it can increase depression in people whenever anybody’s struggling to figure out who they are and what they believe, especially in the context of maybe how they were raised, so it is something that can definitely be problematic for people. For that reason, a number of approaches have been developed that have tried to incorporate both the more traditional psychoanalytic approaches, as well as incorporating various religious or spiritual themes in the hopes of trying to bring those two together. Try to help people figure out a way to deal and cope with these very powerful experiences that are life-changing, but help them to figure out not just what it means psychologically but what it means spiritually as well.

Tanya:  This might be a misconception of mine, but I never really thought of the spiritual religious world integrating deeply into the medical world because it’s fundamentally two different practices. One is evidence-based and the other one is really philosophical-based. Is that right? Does that make any sense?

Andrew:  Oh, absolutely. Although part of what we’re seeing is that over the last, I don’t know, maybe 10 or 15 years, a lot of people in the medical profession have recognized the importance of not just thinking about human beings as biological animals and realizing that there’s a social side, a psychological side, a spiritual side as well. The idea of trying to embrace all those different dimensions of who we are as people is something that has gained a lot of interest in the medical field over the years. A little bit in contrast to how it used to be of, let’s just take care of the biology and not worry about whether somebody has religious beliefs that are relevant or not. I think there has been a shift at least in that direction in terms of realizing the importance of religious and spiritual beliefs for people.

Sometimes it’s extremely practical if you’re trying to deal with issues such as abortion or organ transplantation or end-of-life issues. Often people turn to their religious and spiritual beliefs as a way of guiding them through that decision-making process. Trying to understand that has become even more important for us to look at, but I think there has been an openness to this importance of these other sides of who we are as human beings and then bringing in this whole field of neurotheology in a very practical way and saying, “Okay, what does happen when somebody prays or how do people use their religious or spiritual beliefs as a sense of coping with cancer or losing a loved one or something like that.” There can be some very valuable ways in which religious and spiritual ideas, beliefs, and attitudes can play a role in the healthcare setting. It’s been exciting to see more and more people embracing that. Hopefully, as we develop more and more research, we’ll understand more effective ways of trying to do that. 

Tanya:  Yeah. No, I’m so happy that you say that. To me, anecdotally, there’s a complete correlation between my state of mind and my level of stress and my body pains. For instance, when I gave birth to my identical twin girls, who are two now, I gave birth at 28 weeks, and I was diagnosed with twin-to-twin transfusion. That threw us on a whole journey of being in the hospital for a – the NICU actually. The Neonatal Intensive Care Unit for six months, and they both had PDA ligations, which is heart surgery. They were on respiratory support for 210 days and feeding tubes for 300 days. All types of stuff happened during that period, and we’re discharged with oxygen and all types of stuff. I could see that my mental state was directly correlated to my physical state, and during that time, my back was killing me, just killing me. I could go see a doctor but not much – and I went to go see an osteopath, a chiropractor. I took scans to see if there’s anything going on, and it turned out to be emotional.

Andrew:  Absolutely. Again, we see this over and over, the importance of that psychological state and spiritual state of an individual as it relates to their health and well-being. Absolutely, there is evidence to show that people engaged in specific practices like meditation reduce their response to pain. People who are more religious will have lower rates of depression or anxiety and cope better with various problems.

Tanya:  Why is that? You brought up meditation, and the only thing that gave me a little bit of relief during this period was meditation. What happens from a brain perspective that would describe or make sense of my anecdotal experience?

Andrew:  There’s certainly a lot of data which have shown that practices like meditation helped to alter the body’s physiology and the brain’s physiology. Part of how this works is that it helps us to regulate certain parts of our brain like our frontal lobes that help us to manage our emotions. When you concentrate doing a meditation or prayer practice, you’re activating your frontal lobes, and those frontal lobes are designed to modulate your emotional responses. They help us to feel a little bit less anxious, to feel a little less depressed, and so these practices like mindfulness and transcendental meditation or prayer practices in general help to reduce the amount of reactivity in the brain, helps reduce the activity in the emotional centers of the brain.

That ultimately translates into changes in the body’s physiology in terms of various hormones and neural responses to things like pain and how pain is perceived. There’s a lot of different avenues of research that have explored these relationships and can show exactly how by doing something very simple like concentrating on a phrase or an image or the breath can have very dramatic effects in the brain and the body that can be ultimately beneficial for people. 

Tanya:  Is that true with people that have chronic depression? If they were to do these practices, would that somehow alter or improve their mental state?

Andrew:  Certainly, the research suggests that. It may not necessarily be the only treatment that one should do. Certainly, if people are severely depressed, then we would always argue that medications are important to help people when necessary, but as something that can be part of that therapeutic process, whether it’s part of psychotherapy, whether it’s part of the medication intervention, practices like meditation and prayer across the board have generally shown reductions in the depressive symptoms and have even shown that either by themselves or in conjunction with other therapies can be very effective at helping to improve depressive symptoms in people who have a diagnosis of major depression. I think the answer is definitely those practices can be beneficial for people.

Obviously, there’s one other piece to it which is that, not every practice is right for every person. There are practices that have been very widely studied. That have been adopted by a lot of different kinds of people. Some of them are more well-known like mindfulness practices, transcendental medication is another one, but there are hundreds of different types of practices. Yoga is another approach. These practices have all been very effective, and each one has been valuable in its own right. We don’t have a lot of head-to-head data yet so we don’t know if some are better than others per se, but certainly, what seems to be the case is that, each person has to find a path that works best for them. 

What I usually tell people to do on a very practical level is say, “Okay, if you want to start a meditation practice, part of what you need to do is think about why do you want to start that. What are your goals? Is it for health purposes? Is it to reduce stress? Is it to achieve something spiritual or something else?” Then look around. Obviously, we have the internet today so look around at different practices that are out there and see if what they teach and what the goals of the practice are, are useful for what your goals are. For example, mindfulness has been a very widely used practice in healthcare settings. If your main goal is to reduce stress, it might be particularly effective for that. If your main goal is to become a more religious individual, it could be helpful for that but that may not be the best approach to take. Maybe you want to do something that incorporates more prayer and other types of meditation. That’s important.

Then ultimately, I think contacting whoever the teacher is of the particular practice, talking to them, seeing what their philosophy is. Is it consistent with what your goals are? Is it consistent with who you are as a person? Then ultimately, you have to try it and see what happens. Usually, you have to give it a reasonable try. Usually, you have to try it for a month or two to see how you feel about it. Then at that point, make an evaluation. If it’s working for you, then terrific and if it’s not, then move on to another one and check something else out. Some are really good in groups. Some are really good by yourself. There’s all kinds of apps these days and things to do online. All of my books have different meditation-based practices that are described in there. Each person really can look around and figure out what works best for them.

Tanya:  Just for those listening, I highly recommend that you check out some of the work that Andrew Newberg has done. It is absolutely amazing. Ten books, a TED Talk, which speaking of, on your TED Talk you were talking about enlightenment, and you described enlightenment. Actually, the description came from the survey that you did which contained – I think it was more than 2,000 people, right, participated in that survey? 

Andrew:  About 2,000 altogether, yeah.

Tanya:  Enlightenment was described as something being intense. Having a deep sense of clarity, a oneness, and a sense of surrendering. One of my questions – actually, two of my questions is one, is religion, meditation, and spiritual practices linked to enlightenment? Is that a path to enlightenment if that was somebody’s goal? The second question is, some of the great leaders like Nelson Mandela, Mother Teresa, Martin Luther King, Gandhi were known to operate from – actually, most great leaders are known to operate from a place of unity and clarity. Is there a relationship between effective leadership and enlightenment?

Andrew:  Those are some great questions. As far as the elements of enlightenment and how that is associated with the practices like meditation, yet part of what we were trying to draw into in terms of – in our book, How Enlightenment Changes Your Brain, is that very process because meditation itself, prayer itself are not typically defined as enlightenment but they lead to enlightenment. We always think of the Buddhist monk who spends 40 years in meditation until they finally achieve enlightenment, but the enlightenment is because they have been doing these practices for many years. It’s not the actual act of doing the practices. Part of what we came to was I think a very important finding in our research, and so to blend a couple of the parts of the question together. 

You had mentioned this issue of surrender. A very common theme in these experiences for people is that they are not making it happen. That it is something that ultimately takes them over and they surrender to it. How does that relate to the practices of meditation? When people surrender to a particular experience, and we’ve seen this in a number of the practices that we’ve studied. Part of what we have found is that the frontal lobes actually experience a decrease in activity. Now this is interesting because the frontal lobes, and we talked about the frontal lobes a little while ago, primarily help us to focus our attention to help us to concentrate on whatever it is that we happen to be doing. When we actually are doing a practice like meditation, when you’re concentrating on your breath or concentrating on an image, frontal lobe activity actually goes up, and we’ve seen this in a number of practices. That the frontal lobe increases its activity, but in these moments where the person feels that they have been taken over by the practice, when they feel that they surrendered to the practice, the frontal lobe activity actually goes down.

There’s a change that occurs. There’s a change that occurs between having your frontal lobes being highly active to be being highly under-active. What we have proposed is – and again, there’s some evidence to support this is that – that it is in fact that change that is the most relevant. It’s not being low or being high, but it’s the actual shift that’s occurring. The analogy that I often use, and there’s a couple of different analogies, but one of them is, if you’re in an airplane. If you’re sitting on the ground, you don’t really feel like you’re moving very much. If you’re way up in the sky, even though you’re going 500, 600 miles an hour, you don’t feel the movement. You don’t feel like you’re moving 500. The plane is pretty stable. It’s when you’re coming down or when you’re taking off where something’s changing and that’s when you feel it. That’s when you feel the change happening, and that’s what we think is actually going on when somebody experiences enlightenment. They actually are experiencing the shift in the brain’s activity from one state to another. That’s also why the practice of meditation winds up being very effective because – again, the other analogy that I like to use is, if you climb up a couple of steps and you jump down, not much happens to you.

If you climb up a ten-foot ladder and jump down, you’re going to feel it. You might even hurt yourself a little bit. If you climb up a 10-foot ladder and jump into an emptied swimming pool that’s 10 feet deep, now you’re falling 20 feet. Something pretty dramatic is now going to happen to you. Part of what happens during the practice of meditation to frontal – it’s like climbing up that ladder. You’re increasing the activity in that frontal lobe of the brain, and then when that moment of enlightenment happens, it’s as if you now have fallen down into the well of the swimming pool and now something really dramatic is happening. That’s part of how we started to understand what these practices do is that they prime the brain or predispose the brain – I don’t know what word might be the best. To be able to have this kind of an experience. That’s why we think these practices are so valuable to individuals especially towards helping them to achieve an experience of enlightenment.

Now you mentioned also about some of the great individuals throughout history, and again, I think you’re absolutely right that many of them wind up developing their ability to lead and lead the way and demonstrate how to live and what to do in life through the experiences that they have that are often considered to be an experience of enlightenment or some type of deep spiritual or mystical experience that provides for them a sense of clarity and understanding how the world is, how the world works that they then – now that they have had that experience, they come back to us and start telling us, “Well, this is how I now understand the world. This is what we should be doing as human beings.” This is how to behave, how to think, and hopefully, that has value to everybody so that everyone begins to achieve this understanding of what enlightenment is about and how we are to be able to look at life. 

Tanya:  That’s so interesting. Would you agree or would you highly recommend people that are in leadership positions, whether that’s in business or whatever leadership positions they’re in, to develop a practice for them to help them be more effective?

Andrew:  There are several reasons to do that. We were just talking about one, which is, how does one find that approach to leadership and having that sense of clarity, that sense of meaning and purpose in your own life I think is essential to being a good leader in terms of how one decides what to do and how to lead a company or how to lead a team or whatever it is that – or a country. To have those ideals, those beliefs, those perspectives that can be useful and brought to the people who you are leading. There’s another way that it also is valuable which is to give leaders that sense of comfort and direction and these practices can ultimately be very valuable in reducing stress. When we’re talking about leaders, we don’t have to talk about the Gandhis of the world but just people who are in charge of small companies and running – teaching classes to students. These are all leaders in one form or another and being a leader can have a great deal of stress.

Practices like meditation or prayer can ultimately be very helpful for people in terms of reducing that level of stress and giving them a sense of strength that they can fall back on to help them to continue to lead in the ways in which they want to. I think that there are a number of ways in which practices like meditation are very valuable to individuals in leadership roles. The evidence certainly suggest that people can be more effective as leaders. Even teams can be more effective working together when they are in practices such as meditation or prayer or other types of rituals. That’s why a lot of just the old team building practices and other types of programs that people do to bring people together, the more we bring people together, the more people feel connected as a unit, the more people a sense of strength and belonging, then the better they work and the more efficiently they work together.

Tanya:  When you say have the team do – be active in some type of practice, do you mean do it as a team activity or have individual practices and then these people happen to be on a team?

Andrew:  Ultimately, it can be both. Certainly, there is value in doing things together as a team. When we talk about – we talked about rituals a little while ago. The whole goal of rituals for the most part is to bring people together, and so we see rituals in so many facets of human life. They can be rituals that are part of schools and how you bring freshmen in and how you teach people and maybe what you do – you do the same thing every day at noon. Everything runs in some rhythmic process that binds people together. We see this with sports teams and everybody listening to certain types of music or saying things in certain ways or doing certain cheers in certain ways. These are all rituals that help to bind people together. That’s what rituals ultimately do, which is to create a physical understanding of the connection that you have with other individuals who are part of that ritual.

Also, it helps to bind the people with whatever the ultimate goal or doctrine is. Again, it could be a religious or spiritual ritual that God is one or that Jesus helped to save humanity, or it can be, this is the mantra of our business, that we’re going to be compassionate to our clientele, that we’re going to be successful. Whatever it is that by doing these kinds of rituals it helps to bring people together. Now rituals often have both a group, as well as an individual piece to them, and so having people to be able to do this not only as a group but to be able to strengthen that process through individual practices can be part of that as well.

Certainly, when it comes to religions for example, there’s great value in praying together but there’s also value in praying separately. Ultimately, perhaps by doing both, we see prayer having its most effective abilities. The same maybe said of jobs and companies when you can do things as groups. That’s great but that doesn’t mean that doing things as individuals is not helpful. In many ways, it’s just as helpful, if not more helpful and complimentary, I guess.

Tanya:  Okay, that’s great. I’m going to switch gears a little bit. You wrote a fabulous book called, Words Can Change Your Brain: 12 Conversation Strategies to Build Trust, Resolve Conflict, and Increase Intimacy. I loved this title and the book because in my line of work, we say that your word creates the reality that you live in. Can you talk a little bit about your book?

Andrew:  Oh, absolutely. I mean, a lot of what you just said really is a very fundamental part of what we were learning in this book. Part of the overall reason for writing it was to explore how our brain and our language intersect with each other, and how that has implications for who we are as human beings, and how we live our lives. That being said, we try rely a lot on what data we could find in terms of how language affects us as people, and the different parts of the brain that are involved in that. There are many different examples that we talk about in the book, but just the idea of how our words change the way we think about reality. The more you focus for example on positive words, words such as yes, I can instead of I can’t. Words in terms of success. All of these positive words actually can help us to look at the world more positively. 

Of course, if we use a lot of negative words, no, can’t, bad, all those kinds of things. Those negative words lead us to think about the world and ourselves more negatively. A lot of how we actually interact with the world depends on the words that we use to understand ourselves and understand the world around us. What happens is, is that, as you use words, you’re basically writing those words into your brain so to speak. If you think yes, I can do this. I can be successful. I’m qualified. I have capabilities. Then in your own brain, the neural connections that support those positive attitudes become stronger and stronger, and the ones that are negative about yourself become weaker and weaker. The opposite is true as well if you keep thinking to yourself, I can’t do this. I’m not going to be successful. It’s never going to work.

Those are the neural connections that also get into your brain, and that changes the way your brain operates. What happens is, is that, the actual behaviors and practices that you do are affected by this. If you think I’m going to be successful, I’m going to make a lot of money, however you define success. If you keep focusing in on those positive ideas, you do the behaviors that support them. You’re going to be careful with your money. You’re going to be careful in terms of how you deal with your boss, with the people who work underneath you. You’re going to work harder because you’re doing all these things to support the belief that you have that you’re going to ultimately be successful. On the other hand, again, if you think that you can’t do it, well, you’re probably going to give up a little sooner or you’re not going to try as harder. As soon as something doesn’t go well, you’re going to give up. There is a lot to be said about how our words shape the reality around us. That’s a very important part of what’s in the book.

Tanya:  I heard you talk about words and then I heard you talk about, if you think to yourself. When you’re talking about words, do thoughts also fall – your own personal thoughts without actually verbalizing them count as words, and also have an impact or a similar impact on the brain?

Andrew:  Yes, definitely. We do think in words for the most part, and so we articulate what we’re thinking and feeling and those are even – even if we don’t express them outwardly, we think them on the inside. All of those aspects of language, even the internal ones similarly are very important in terms of how we function, how we believe about ourselves, and how we believe about our interactions with the world at large.

Tanya:  Got it.

Andrew:  Also, I mean, part of – what I was going to say is that, part of what we also talk about in Words Can Change Your Brain, is how to develop an approach to using language that’s based on science. It’s based on what the neuroscience tells us so that it can help to foster better interactions with people, better interactions with our world, more intimate dialogue with people. As an example, we learn certain things just on what brain scan studies have told us about the parts of our brain that operate when we speak, the parts of our brain operate when we hear something negative versus something positive.

When we hear something positive, we activate the reward system in our brain and we feel good and we’re more likely to do good things after that. If we hear something negative, if somebody’s critical of us, then it triggers activity in an area of our brain called the amygdala which is our fear center, our negative emotional center of the brain. We recoil and we become less aggressive and less active. We shy away from doing things again in the future because we’re worried about what’s going to happen. All of those things are part of what we learn. Now what we also learned for example, is that our brain operates better when people speak slowly. If you’re having an important conversation with somebody at work, speaking more slowly, speaking more clearly, these are things that become very helpful in making sure that whatever ideas that you have come across to the other individual.

Another really important point that my co-writer, Mark Waldman always likes to talk about is how much we speak. At this point, I always feel a little embarrassed because here I am going on and on about this, but it’s part of a podcast so we have to go on and on, but what the data show is that our brain really only can hold on to about four or five chunks of information at any one time. To speak to somebody for more than 30 seconds or 40 seconds is, at some point, the brain just isn’t going to continue to hold on to that information. Part of what we talk about in the context of developing a more compassionate form of communication is to speak slowly and to speak briefly and to be more aware and mindful of what other people are speaking so that we can have a more intimate conversation with them.

Tanya:  That makes so much sense. At least I can relate to everything you said from an anecdotal standpoint. What words help to build trust?

Andrew:  When it comes to building trust, I’d like to actually expand the question to forms of communication [44:42] a very rich resource literature, which has shown that a lot of what helps to build trust is actually not even the words themselves but your facial expressions, your body movements and how you express your words and language through your body. It turns out that from a facial expression perspective, that the face that seems to be most trustworthy we refer to as the Mona Lisa smile, and it’s that very gentle smile, gentle eyes, very soft facial expressions. Big smiles, people think that you’re hiding something. Scowls, makes you nervous. A gentle smile is something that is very helpful at building trust. Speaking slowly but calmly and confidently is another thing that help to build trust with people.

Part of what also is so essential in building trust with people is listening carefully to what people are talking about and responding in an authentic and in a very true way. Not being over exaggerating about things even if it’s good. If somebody said, you’re the most fabulous worker we’ve ever had. That maybe great and you think that you’re saying something positive but sometimes to be overly positive is almost problematic, especially if the person doesn’t think they’re [46:10]. Being honest, being straightforward with people, speaking in calm tones, those are the kinds of things with being positive with people, those are the ways of building trust as effectively as possible. It’s okay to be critical of people but part of what we always try to work towards is to be critical in a constructive way. How can we utilize this criticism to be better the next time?

You hear a lot of athletes talk about that all the time. A coach said that they were very blunt with them. You’re not doing this right and here’s how you do it better, but it’s always with the constructive, here’s how you do it better and not just yelling and screaming at somebody for doing something wrong. The coaches that seem to be the most effective usually are appropriately critical, but always give that next step. The way out of that criticality that makes people really want to perform and function well for them. 

Tanya:  Also, I hear the intention behind it. If the coach is really on for that person to win and succeed, the criticism will be much better received than if they don’t feel that.

Andrew:  Exactly, and going back to what we talked about a little while ago about practices like meditation not being for everyone, this is always a problem with any company or sports team is that, not every player is – not every person is the same. Some people actually do respond better if you’re a little bit more critical. Some people do respond better if you give them more direction. Some people respond better if you give them less direction. That’s always a challenge for any leader, which is, how does one tailor a general approach to a larger group of individuals. Some who may respond one way and some who may respond a different way. That is always a bit of a challenge, but again, part of what we always say about some of the great coaches for examples is that they knew their players. They knew who needed to be ridden a little harder and those people who needed to be coddled a little bit, and then hopefully, they’re the ones who wind up being successful. 

Tanya:  Yeah, that’s brilliant and it’s a point that I think serves everybody to be reminded of. Just want to make one last switch of gears here. You wrote another fabulous book called, Why We Believe What We Believe. My question is, why do we believe what we believe?

Andrew:  You have to go read the book. No, I mean, maybe the simplest way of answering it is that, that our beliefs are a composite of many different factors. They are based on the biology of who we are which includes our genetics and how we look. Some people just are naturally more optimistic than others. Some people are more naturally humorous than others, and so how we are built physiologically has a lot to say about what we believe and how we believe it.

Tanya:  When you say built physiologically, do you mean what’s hard wired in our brain or are you referring to something else?

Andrew:  It’s a little bit about how we are hard wired. Some of us have more dopamine than other people or some of us have a bigger frontal lobe than somebody else. There are just fundamental ways in which people will have those different biological processes will respond to the world. Certainly, the brain is adaptive and responds to the world. I mean, I’m always fascinated when you hear of the person who was raised in some horrible part of town and they becoming incredibly successful. Why did they become successful and their brother didn’t? You don’t always know. It’s the physiological basis of who they are even though their environment may have been exactly the same. 

On the other hand, where do our beliefs come from? The majority of our beliefs, in fact, pretty much all of them come from other people. Most of our beliefs come from our parents. They’re the ones who, when we’re growing up, they tell us how to be good, how to be bad, how to go to the bathroom, how to cook food, how to eat, how to sleep, how to drink, and so much of what we all learn derives from our parents including our religious and spiritual attitudes and beliefs as well. If our parents take us to a Catholic church then we’re far more likely to become Catholic as we grow up instead of becoming Jewish for example. Then as we get older, our coaches, our teachers, our friends, and then as we become adults, then it goes over into our communities and our leaders, presidents and political leaders and so forth.

Of course, that’s a part of what concerns so many people these days, which the people at the highest levels, if they operate and act in certain ways, that’s going to filter down into other people acting in certain ways. When people treat people with respect and compassion, then we are more likely to treat people with respect and compassion. If we are treated with disrespect and a lack of compassion, then we are more likely to treat other people that way. The good thing about the brain is that it can always change, but it can be difficult to make those changes at times.

Tanya:  Yeah, and the saying lead by example. As you were talking about why believe what we believe, and our parents teaching us and telling us what’s good and what’s bad, I have three daughters and I noticed that the bulk of what they learn is not from what I tell them, but from what they see me do. Actually, pre-kids I didn’t realize just how powerful that is. This idea of lead by example is really, I think where a lot of the power is.

Andrew:  Right. From a neurobiological perspective, one of the ways in which that happens is that we have social areas of our brain, and we have neurons that are referred to as mirror neurons. This actually reflects what we see in the world, and so if we see somebody being angry then there’s a part of our brain that’s angry. If we see people being happy, there’s a part of our brain that feels happy. There’s even been brain scan studies that show how people’s brains can resonate with other people.

Again, talking about leadership, talking about teaching and raising children and so forth, so much of it does have to do with how we are, both in terms of our language and our body processes, and our behaviors. Those are reflected and mirrored in the people who we are around and whether those are people above us or below us. In the compassionate communication approach, trying to remain calm. You can only imagine if your boss came to you being very upset and you remain calm, you will make that person more calm even though they may be upset with you. If you get upset back, it’s just going to explode. 

Tanya:  That’s right.

Andrew:  There are ways of actually modulating what other people do that can be very relevant in terms of altering and changing behaviors.

Tanya:  What do you mean that it could be very useful in terms of modulating what people do?

Andrew:  As we express different kinds of behaviors, as we use different kinds of language, because of that whole process of the mirror neurons, it will actually alter the way the person is – another person is interacting with other people. It’s a contagious thing so to speak, and it can be contagious good or contagious bad.

Tanya:  Okay, I love that concept. How do mirror neurons work?

Andrew:  We don’t fully know how they work but they seem to react when other people are doing certain things on a very basic level. For example, if you smile then there’s neurons in your brain that smile or contribute to you smiling. There are a lot of very contagious types of behaviors. Yawning comes to mind, smiling, and being angry and defensive. All of those are ways in which our brain can operate and that’s what these neurons seem to be able to help people to do. They seem to foster empathy and social understanding, understanding of relationships between people and so forth.

Tanya:  Empathy, actually. I wrote about this. Currently, there’s been decrease in empathy in the past decade because mostly of the rise of technology and the decrease in interaction and human interaction. I argue that empathy is critical on leadership. I can see now marrying the mirror neurons with this idea of empathy, it helps connect you with your team and the people that you’re leading.

Andrew:  Right, and also it gets back to the point I made a few minutes ago that if you’re leading a group of – let’s say you’re a coach and you have 20 people who you’re coaching. The empathy is to understand what each person needs and to know who needs to be pushed. Who needs to not be pushed? Who needs to be given positive feedback? Who needs to be given negative feedback and try to work through that process? Empathy is extremely valuable in trying to understand what other people are doing and thinking and feeling. How do you best interact with them? We see this in the medical profession certainly all the time. The value of being empathic with patients and understanding what their fears are. What they’re worried about? What they feel good about? What are their strengths and weaknesses that we can turn to to help them to figure out the best way to overcome a particular issue or to stay healthy?

Tanya:  I love that. Just a few questions before we go here. Out of all the work that you’ve done, all the books that you’ve written, all the research papers that you wrote, what are you most proud of? That may be a tough one. That’s like saying what kid you like the most.

Andrew:  Right, right. I guess, the way I tend to think about it, I personally am very passionate about all of this work. I hope that this work helps encourage people to think and to challenge themselves and to ask questions. I guess, if I was to take pride in something, it would be to generate questions in people and to generate question in terms of exploring the world, exploring ourselves. I certainly hope that this work helps to do that. I hope this work helps to foster understanding and compassion in people. I feel like it’s certainly helped that within myself. As I’ve studied so many different types of religious and spiritual practices, I’ve come to have such a deep appreciation for people irrespective of what the practice is or what their beliefs are. 

I always feel that everyone can potentially benefit from this information. I hope that getting the ideas out there, challenging people, helping people with what I refer to as a passion for inquiry. To always ask those questions. I’ve been very lucky to be able to work with so many wonderful people in my life who love to ask questions, and that to me is very exciting. I think ultimately, we should never stop asking questions. Hopefully, that’s what this work has done and if it has then I’m very pleased and proud that it did.

Tanya:  It certainly did for me. One of the things that we say in my work is, inquiry is the beginning of a new opening. I think that that’s what you’re pointing to. Your work allows us to really expand our minds, and why I think everybody listening should absolutely go and buy every single one of your 10 books. Listen to your TED Talk and all the research papers. It’s really phenomenal. Last question, what is the one thing that you’re still – your biggest question in your work that is not resolved?

Andrew:  I think the biggest question is the one I still started with, which is, what is the nature of reality and how do we as human beings understand that and how do we get to it? That is the core of a lot of my own personal philosophical work and thinking this whole field of neurotheology is really a combined scientific and spiritual path or journey to trying to answer that big question. What is reality? How do we understand it? Who are we as human beings? I guess, hopefully, this very integrative multi-disciplinary open and inquiring path will maybe someday get us there. I know we’ve never totally figured it out as human beings, but hopefully, someday we will. Hopefully, it will be something that requires our biological side, our spiritual side, our social sides. All the different parts of who we are as human beings and going to keep pushing right ahead to see if we can get there.

Tanya:  It’s certainly a worthy inquiry. I’d love to know the answer to that one. As I’m sure many, many, many other people would too. How do people get in touch with you if they want to reach out?

Andrew:  The best way to get a hold of me and also to learn about what work we’re doing, and upcoming things and projects is just through my website. It’s just Andrew Newberg, N-E-W-B-E-R-G-dot-com and then on there there’s a way to contact me through that.

Tanya:  Amazing. Andy, thank you so much for being on today. I have so many new ideas popping up in my mind and just going to be rushing to read all of your books. I applaud you for the amazing work that you’re doing. I just love what you stand for.

Andrew:  Thank you so much. Appreciate it. It was a pleasure being on your program.

Tanya:  Unmessable is recorded in the heart of New York City and a special thanks to all the team involved in producing the show. Visit tanyaprive.com/unmessable to find a transcript of this episode and be sure to subscribe to our newsletter.

 

 

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Manny Medina grew up in Ecuador and spent most of his summers on his stepmother’s shrimp farm helping during harvest. In addition to working on the shrimp farm, Manny was obliged to read a number of books during his summer vacation. A little unusual, but it served Manny well in developing a curiosity for learning.
The first time Manny set foot in the US was to come to college where he completed his Masters in Computer Science at Penn State, then he got his MBA at Harvard. The culture shock was real and although he knew some English when he arrived, he wasn’t proficient enough to have a full conversation. To compensate for this obvious barrier, he consciously sought out a publication to study, in this case, the Economist because he fancied the writing style.  Manny spent countless hours teaching himself how to speak and write in the Economist voice, which seems ambitious but once again, served him well.

After a corporate stint at Amazon and Microsoft, Manny decided to launch his own business in partnership with his co-founders. But things didn’t go so well initially. In fact, after 3 years of trying countless business models and product features, and having almost burned through $1 Million dollars of investment capital, he was contemplating shutting down. At this point, they were inventorying computers and selling them for cash to pay for outstanding invoices. It was that close to the end.

While weighing what to do with the company, Manny attended the TechCrunch Awards Conference. During a break, a lightbulb went off. It dawned on him that this one feature he had built (a side feature to the core business at the time) was something prospective clients were showing interested in. Why not build that out and turn it into the core business? He saw it so clearly but needed to get his co-founders on board. After delivering the pitch of his life, and getting his co-founders energized and on board, they did their final pivot. And thank god. It worked. Today, Outreach.io is the leading sales platform, employs 350 people, raised $250 Million in venture capital money and produces millions of dollars in revenue annually. Not to mention, growing at a rocketship pace.

Tune in to listen to the incredible pivot Manny pulled off as a last-ditch effort to save the company and his story behind building one of the leading sales platforms out there.

In this episode you will learn about:

• • • Pivoting
    • Runway challenges
    • Growth hack strategies
    • Product Market Fit
    • Raising capital
    • Differentiation strategies
    • Scaling operations
    • Product development- how to build a product people love
    • Leadership mistakes and lessons

 

Manny Medina’s biography:

CEO of Outreach, the #1 Sales Engagement Platform.

Previously led GroupTalent, Microsoft’s Windows phone Business Development team in Latin America and Canada. Prior to that, engineered Amazon’s compensation system for Amazon Associates (the web’s largest and most successful affiliates business) and Web-Services which accounts for 15% of A’s traffic.

MBA from Harvard Business School, MS in Computer Science from the University of Pennsylvania.

Connect with Manny Medina:

• Website
• Twitter
• Linkedin

* * *

Full Transcription:

Manny:  I grew up in Ecuador. I don’t know if that makes any difference or not.

Tanya:  That’s Manny Medina, Harvard grad, founder and CEO of outreach.io, the number one sales engagement platform that raised $250 million in funding and now employing a team of 350. Outreach made it to the Forbes Next Billion-Dollar Startup 2017 list and is a two-time winner of the Forbes Cloud 100 

Manny:  I didn’t grow up with a lot of technology. I did grow up with a lot of people. People tend to be an important thing where I’m from. However, I’m more of an introvert than an extrovert so a lot of times, I, sort of, lived inside my head. I’d play games that I would make up and for teams that I would live in my own imagination and just run throughout the day. My mom is Russian, so I have my Ecuadorian side of my upbringing and then the Russian part of my upbringing, which is – there’s a broad Russian diaspora in Ecuador, and I got to spend time playing with those kids and those games were slightly different than what we play in Ecuador.

Then during the summers, my stepmom’s family had a shrimp farm and I would spend the summer at the shrimp farm. I would work during the harvest and earn a little bit of money and that’s a lot of back-breaking working. It usually happens at night because apparently the shrimp sleep or something at night, or they’re quieter, or something happens. It needs to happen pretty quickly. The moment you get the shrimp, it needs to go to the processing plant relatively quick because we want to pack it fresh, so it’s a non-stop work.

One of the funny stories about shrimp farming is that crabs – the shrimp farms are all set up along the coast of Ecuador and crabs come from the sea and go into the shrimp pools and they eat the shrimp. When you’re shrimp harvesting, a lot of crabs comes out. Most of the time you discard this crab, but the crab is delicious. I usually will have a separate bucket for discarded crabs that I would eat every night and I’d eat throughout the day. I would eat a lot of crab during shrimp farming season.

Tanya:  That’s amazing. How old were you when you were harvesting shrimp?

Manny:  This is between my ages of maybe 7 all the way to 15.

Tanya:  Wow!  You would do that every summer?

Manny:  I would do this every summer, yeah.

Tanya:  Would you do this other family member or just with –

Manny:  Yeah. The shrimp farm was owned by my stepmom’s sister, so all my cousins were there and the day labors and [her] brother would be there sometimes. It was a big affair; a lot of hands had to go there and help. Where I’m from, we have a lot of cousins, I just don’t remember them all. I’m sure that half the people there were related to me to some degree.

Tanya:  Well that’s amazing. Honestly, that’s a great experience to go through when you’re young because you realize the value of work and the value of money. I think that couldn’t have been better. Okay, so that was your summer but what were you like – did you play any sports or were you the kind of kid that liked to play video games with your friends at home. What did you mostly spend your time doing?

Manny:  I grew up in a fairly intellectual family. My dad was a professor and my grandfather was a professor too, so video games were (a) not a thing because they were really expensive. In Ecuador, things had incredible taxes coming from the US, and (b) they encourage, as in cajoled, and really had a very – I had a lot of reading to do during the summer that was not school-related. It was, sort of, an expectation. It was funny, until I had my own kids, I didn’t know you could actually do that to kids but to me, it was just what we did. I had a very broad array of books that I’d have to go and read during the summer and I was expected to be done with it and report back.

Tanya:  What would they make you read?

Manny:  My grandfather was really good friends with this book salesman and it was a bit of a racket, thinking back on it now. He would encourage all this reading. The bookseller, he would sell my grandfather incredible amounts of books. The one time that is highlighted in my mind is one time that he sold him an entire encyclopedia of World War II. Mind you, I’m, like, ten, so this is the last thing I want to do in my summer, but here I am hauling my encyclopedia of World War II all the way to the [beach], where I’m doing my – spending my mornings doing nothing and shrimp farming in the afternoon or at night. I do have to read this entire encyclopedia so I power through it. Luckily, it had a lot of photos. 

I learned a lot about World War II very early on in my life, which, kind of, helped me because I ended up – in Ecuador, private schools are not as expensive as they are here and most middle class or lower class kids end up going to private schools. I ended up going to a private, school; I went to a German school. International schools, German schools, American schools, etc., tend to be cheaper because they’re subsidized, so I ended up going to a German school that was subsidized by the German Government. Having a running start with the whole World War II affair ended up being a good thing.

Tanya:  That’s great, so that helped you at school. Did you learn German when you were in school?

Manny:  I did. You have to be fluent by the time you graduate, which [05:59] pain. Don’t ask me anything in German right now because I can’t [06:01].

Tanya:  Well that’s okay then. That’s not a language that I speak but my husband speaks it.

Manny:  I noticed three languages in your bio and I was a little worried there it was going to go this there.

Tanya:  If you would have told me Turkish, maybe I would have able to challenge you on that because one of my old boyfriends is Turkish and I really was interested in learning that but not German, so you’re lucky, you’re lucky. Okay, this is an interesting beginning. You started in Ecuador, very strict intellectual family and very in-tuned with working, so that shaped who you are. How do you think that your childhood and the culture and the influences of your family and the practices of your family influenced your thinking today? 

Manny:  Growing up that way gave me this enormous amount of intellectual curiosity, where having a professional path was not enough. That your intellectual development was not by all means cut by your formal education but it was something that you continue to cultivate all the way to adulthood. My grandfather had one of the largest private libraries in my city and he spent a lot of timing reading and was friends with a bookseller so I spent a lot of time reading and buying books etc. This ability to never stop learning and being increasingly interested in problems and problem sets, really helped me frame a lot of my life.

One of the interesting things about doing a startup or even going through grad school was that you have to live with irreconcilable problems in your head for a very long time. The story that you hear about startups or the narrative is that you come in, you have this drive for action and to get it done and you get in here and get after it and get it done and do it again and so on and so forth. That is very important, but there is also the other problems that you can’t verbalize. You know they’re coming; you can’t really put your finger on it so you stew on it. You may stew on it for months, while you take the problem, turn it around, look at it upside down, look at it from the bottom up, have other people come and take a look at it and, sort of, just live with an intellectual problem is the rigor that I developed growing up and then throughout my career.

Tanya:  Well actually that’s a really good problem to have – or skill to develop. Being with uncertainty, most people can’t do it. They see a void and they want to fill it immediately, which then cuts off that inquiry, which, I think, is where most of the power is and what you’re pointing to, so very interesting. Can you walk us through what it was like coming to the US? At what point did you come to the US?

Manny:  I came here in 1995, a port of entry Newark, New Jersey.

Tanya:  That’s why it says on your profile on LinkedIn, immigrant, a port of entry, Newark, New Jersey.

Manny:  Correct. That was the first time I had set foot in this country. I came here to finish undergrad. I was already almost half-way done with my education in Ecuador and I was going to a local – there is only one technical school, so I was going to a local technical school, a university that is. One of my professors, actually my professor of algorithms, had got his PhD from Stevens where I went to grad school. I applied to a number of schools and I visited a few of them when I came here. One of them was Cornell. I didn’t see myself braving that kind of cold, to be frank. I’d never been that cold in my life. Then going too far south, my dad was afraid – especially around Florida, my dad was afraid I would never learn English. I had to be in a place where my parents were comfortable with me going to school and it wasn’t that cold, so I settled in New Jersey and that’s why I ended up going to Stevens.

Tanya:  You didn’t know English when you came to the country or you had a basic form of it.

Manny:  That’s a great question. I had a fairly good written English. One of the books that impacted my life the most and life in general, is a book called Elements of Style by William Strunk. To this day, I’m not going to pat myself on the back, but I think I write pretty good prose, and it was all because of that book.

Tanya:  Wow that’s amazing.

Manny:  The second thing that I did is that – I read a lot so I started reading a lot in English, and I figured that if I’m going to pick up a new language, and I learned this when I learned the German, is that the best way to do it is to emulate, or copy, a style that you really like. I read a lot of magazines and a lot of different things and I narrowed down around The Economist. I really like their prose, so I just started writing like if I was writing for The Economist, and it ended up serving me very well through college and then grad school and then eventually work life.

Tanya:  My God that’s ambitious!  The Economist is a fabulous media publication, and if you’re going to emulate anything that sounds like a good pick. Okay, so take us through – here you are, you came to school, I’m sure it was a huge culture shock, which in itself is an adjustment. Did you know anybody when you moved here?

Manny:  I had a little bit of family from my stepfamily here, but none of them college-related. It was a good refuge for me to get Ecuadorian food and that kind of thing on the weekend. 

Tanya:  What was it like, that transition for you?

Manny:  It was difficult. It was difficult because when I got to college, I had a fairly robust social life in Ecuador and making that happen here in the US was just not immediate. My spoken English was fair – is not interesting. I couldn’t go to a bar and talk to somebody and make interesting conversation because my accent would have just got in the way and I didn’t know the words, I didn’t know the slangs. It took me three weeks to figure out what “wassup” meant. Things of that nature just stump you. One of the things that I did really early on joined a fraternity. I figured that if I didn’t do something about it, I would just be always surrounding myself with Spanish-speaking people and never learn English. That got me a quick indoctrination into the underbelly of US life.

Tanya:  Yes, the culture.

Manny:  Right. I’d like to be born around here because I think I was only half there.

Okay, let’s shift a little bit and go towards your professional career. You go to college and then you go to – you studied computer science undergrad and then business grad.

Manny:  Yeah. I did a master’s in computer science as well and then I went to business grad, yeah.

Tanya:  Then you went to Amazon and then later to Microsoft. Can you walk us through that a little bit?

Manny:  My business school life was a little irregular in that 9/11 happened my first year and it felt like the bottom fell off. You usually walk out of HBS thinking, I’m made, I’m going to take any job I wanted and whatever. There are not that many jobs that were available. Everybody was reconsidering what the economy would look like for the next ten years and hiring plans just came to a standstill. One of the very few companies that were still hiring as if it was the party just started, was Amazon. Amazon hired about 11 of us directly out of business school, and Bezos did a lot of the hiring himself, Bezos and Jassy. 

Going to Amazon was really interesting because I went to a group that was called Amazon Associates. Soon after I’d landed at Amazon, Jassy was Jeff’s right hand. He actually had a job called – I think it was called Jeff’s right hand; that was a job description with a job title. He did that for a year and then he was asked to go and run this new business that at that point was not called Amazon Web Service. It was called Amazon something else, I think it was Matrix or something, and he rolled up into my team. The first year I joined there, I learned everything I could about starting a completely new business from scratch. At Amazon – in Seattle, there was a play that was playing in the theaters that were started by a bunch of Amazonians called “Dog Years” and it was the life at Amazon. It was a play about life at Amazon and the things you have to do. It sort of reflected reality in that at Amazon, time would move a lot faster than at any other company.

At that point, they were a public company and they were still growing, but it acted as if the world was going to end tomorrow. Everything was just super-fast. My boss came and told me, he was like, “Most people tell you that you can get one of the three – or one of the two. You can either be fast or have high quality. At Amazon, there’s no such thing. There’s no trade-off. You do it fast and you do it high quality.”  That really stuck in my mind and everything was done that way and everybody was really smart. That was, I think, my true MBA in that people were so smart and so numbers-driven that I had to buy a book on speed math that I could number and keep up with the conversation. Multiplying two large numbers – it wasn’t so much about getting it right but you need to be in the right zip code to make the right decision, so you need to make it quickly because conversation just moves and moves and moves.

Tanya:  When you said you either do quality or you do speed. Which one did you do?

Manny:  No, you have to be good at both. 

Tanya:  Oh you have to be good at – okay.

Manny:  You have to be good at both. I remember my first set of meetings and I was off in a calculation or I made a wrong assumption in a model and that’s when my boss sat me down and, “I know I asked you to do this fast…” and I said, yeah that’s probably why I made mistakes. He said, “Well there is no such thing here!”  You don’t have that trade-off; you have to be both.

The second lesson that I learned there is that, and it’s probably related to the first, is that to Bezos, you’re either buying or selling. When you’re making an idea for an argument or a change, if you decide not to do it, you’re actively selling that idea. When you decide to stay with the status quo, as supposed to implement a change, you’ve sold the change and bought more of the status quo. You see what I mean. I know decision is the decision. Going into a meeting not having enough time to look at all the data without a decision that means you decided to invest more in the current situation. You see what I mean. It’s a very different way of looking at the world. It, sort of, keeps you on your toes and it forces your thinking and it forces you to make decisions. That was an incredible lesson there. 

The other lesson that I took was when I got there, the whole flywheel that Amazon prides itself on is selection brings customers who bring down the price because you can attract more sellers who bring more selection. That whole self-reinforcing growth wheel was not present at Amazon at that time. That was the pitch but that was not how it was working all the time. We did not have the most selection, eBay did. We did not have the lowest price, Walmart did. It was in the middle of that fight that we were trying to start Marketplace for the seventh time, beating off eBay and beating off Walmart.

Google coming in and driving all the traffic away from Amazon into all the other stores that we decided to start Amazon Web Services. It’s just the vast amount of mental capacity a team can have when it’s set with the right challenges and just let go do their best work, was really what impressed me at Amazon. It’s one of my guiding principles here. How do you continue to execute with excellence, while never keeping your ambitions in check is keep getting in after the bigger dream?

Tanya:  Speaking of ambition, you did a few years at Amazon and then you did seven years at Microsoft, then you quit. Can you tell us about that decision?

Manny:  I call it my Jerry Maguire moment!  Literally one day, I couldn’t drive into work because I was tired of yet another Windows phone launch. I called my boss on my way in and I quit. 

Tanya:  Did you have a plan?

Manny:  No.

Tanya:  What was the non-plan?

Manny:  The current Windows phone launch was winding down and we were trying to figure out our next Hail Mary. There was a lot of time just idle so I picked up a book on rails and I started programming. This is one of the byproducts of being intellectually curious is that you start creating links in your head of ideas that were not related to each other. Picking up programming is almost like picking up a second language or a new sport. You start creating [clashes] in your head of what is possible. A lot of ideas came to my head of what is possible as I started programming. Then once you have those ideas firmed, I started hanging out – there are bars here in Seattle where startup people come and hang out and get together and talk shop. I started hanging out in those bars and I met a few people that wanted to work on the idea with me, and that’s how I ended up – me and my co-founders, we applied to Techstars and we got in.

Tanya:  The rest is history.

Manny:  Well, no actually, the rest is when it got hard. We actually got into Techstars, fast forward to when we launch a company called Group Talent, which was a business in the recruiting space just like hire.com or [21:15]. The business was just not growing as fast as we thought, and we had raised, I don’t know, less than $1 million, or maybe $1 million. It was not the home-run success. We tried to throw product at the problem, meaning if we maybe got better profiles, people will come. Maybe if we opensource the code. We tried all sorts of things that, in retrospect, did not make sense.

What we were dealing with was a market supply and demand problem and we did not come from a marketing background. My co-founders, two of them are engineers and my other one is a designer so we had the wrong team for the problem. Of course, it didn’t dawn on us when we were there, but what happened was that in January 2014, we were running out of cash. I think we had a month or two of cash left.

Tanya:  How long were you at it at this point? 

Manny:  About three years.

Tanya:  Wow that’s tough, yeah.

Manny:  Sorry, this happened at the end of 2014; we were running out of cash – 2013 when we were running out of cash. Then at the end of 2013, we decided to give it one more go and we decided to build a workflow internally that would make our sales reps book 10x more meetings. The reason we came up with a number was that we figured that if they were able to book 10x more meetings, we would sell our way out of the problem. Meaning generates our own cash to get out of this problem. We sat down for about two, three days and we mapped out all the elements of sales and all the things that could be automated. Then our team built it and we deployed it and the meetings started coming through.

As our salespeople and myself were going to these meetings, the conversation quickly turned about the tool that they were using that got into that meeting. We were selling to recruiters or recruiting agencies and the recruiters were saying, I love what you guys can provide but I’d rather buy the tools so I can book my own meetings. After probably about 60 of those conversations, we decided that it would be better to pivot the entire company and build a workflow and sell the workflow instead of what we were doing before.

Tanya:  How did you position because a pivot is – you have a team; they were brought on to execute on whatever vision you had before. First of all, how did you handle the transition internally, within your co-founders? Was everybody onboard and everybody aligned and how did you position that to your team?

Manny:  That was probably the best pitch of myself is when I had to convince three co-founders and myself that had almost no cash left in the bank, had already put in three years of their lives, working very hard, startup speed, to give it another go and start from scratch in a completely new business. I distinctly remember that afternoon because I called them – I was in my car and I got invited to the Crunchies, I don’t know if you know, the Crunch Awards.

Tanya:  Mm-hmm. 

Manny:  I got invited to the Crunchies and I was sitting outside waiting for the Crunchies to start and I called my co-founders and gave them the pitch. The summary of the pitch was, yes, all of you can walk out of here and go get a job. That’s fine, we can all do that. We have an asset at that point, which is unbeatable, which is the fact that we are very talented people in non-overlapping areas. One was a front-end engineer, the other one is a back-end engineer, and a designer and myself. We have very talented people that have been through hell and back. The ability to develop this chemistry is trust, is a passion, is very rare and if we were to break up right now and go our separate ways, that value disappears immediately. If we decide to give this another go, and I can’t promise you at this point whether it’s going to be a success or not, but I can tell you that there’s a lot of pain around this. I can promise you that if we give this another go our chances of success are a lot higher than before. 

We sat around and – mind, you we were inventorying computers at this point because we were putting the money away to sell it. It was that close to the end, that close to the bottom of the barrel. We decided to give it another go. Once we decided to go, I felt this surge of energy come through and I went to my Board, I pitched the new idea. One of my new Board members jumped aboard, which forced the hand of the other Board member. They decided to fund it.

Looking back now, it’s a blessing because we’re building a tool for salespeople that by definition will make us better salespeople as well. As we were building the tool and selling it to salespeople and seeing what they were doing with it, I was not only learning about to sell it, but I was learning from people using Outreach, and I will take those learnings and use them myself. It was of the accelerator effects, which not only I learned a lot from my own customers but then I was able to teach them more about how to use Outreach and be better at it. We went from zero to $1 million in AR in less than six months, once we’d made the pivot. Then yeah, the rest is history after that. 

Tanya:  How many people do you employ today at Outreach and how much capital have you raised?

Manny:  Three hundred and fifty people and we have raised over $250 million.

Tanya:  What has it been like to lead Outreach for the past six years; think about the good, the bad, and the ugly.

Manny:  It’s been an incredible journey and learning experience of transitioning from four co-founders to four co-founders and [a small team]. There’s a milestone at every point in time in which things have to completely change. I’m not an expert in startups, so I can tell you my own story there. Raising the first round of capital was one inflection point because when we raised from Mayfield, we were selling almost individual licenses. I was cold calling whoever I could cold call. If I got you on the phone and you would invite for your company, I will sell to you individually. It’s you. Give me your credit card and I’ll give you Outreach. You can cancel anytime. If I don’t deliver some sales metric like more meetings, or more conversations, or more opportunities or a bigger paycheck, or a bigger commission check that is, then happy to cancel your account.

That experience of selling individually really helped me frame my development as a leader. Then –

Tanya:  You said something interesting. “That experience helped you frame who you are as a leader.”  Can you expand on that a little bit?

Manny:  When you’re growing this fast and when you have this much capital and you’re in a “hot” area, you tend to lose sight of the work that needs to get done to deliver the number, any number, revenue, retention, uptime, the work that happens in the trenches. The work that happens day to day. With 350 people, you start losing sight of the work that gets done to make a customer successful every day. Having sold myself the first few customers, having supported my first few customers, having made my first few mess ups in deployment, taking late night calls from customers for whom things went down or they press a wrong button or the button did the wrong thing, gives you a lot of empathy for the work that goes on day to day.

Growing this fast, we’re doubling every year, even on our [big] days, it’s exhilarating but it’s also stressful and you tend to lose sight of what it takes to do the day-to-day work. It’s back to the original, how we open up the conversation and how you have to be able to live in your thoughts with dichotomies. I think the key sign of a leader, and this is one of the things I learned at Amazon, is you need to be able to think in systems because you’re managing a system but also think in terms of individuals. The system is composed of individuals and they have feelings and they want to be heard and they want to matter.

I feel like having the experience of building the company from the ground up, in which I played every role, allows me to develop empathy at the fundamental level, at the bone marrow of what everybody here does. Sometimes, I will go into the support floor and take a ticket with them just so that I can chase her down, and let her know that no work is above me.

Tanya:  That sends a strong signal.

Manny:  Yeah, or I will make time to sit down and prospect with AEs, with the account executives. That sends a certain signal that prospecting is for everybody. There is no free lunch here. We all have to work. We all have to put in the time.

Tanya:  One of the things that usually leads to huge insights are failures. What in your life did you have to go through? Any challenge failures that has taught – that has led to some of your biggest insights?

Manny:  Yeah, it was when we were about to close down. There’s no bigger failure than losing about a million dollars of capital and have nothing to show for it. It was heart-wrenching because it was under my watch. You are the CEO, so the buck stops with you. It just made me realize that I had no idea what I was doing in the recruiting space at that time.  I just didn’t have a good calibration for the edges of my ability, and I took a bunch of people and run with it.

Now, the learning out of that experience is that, when you get to see the bottom of the precipices, nothing else scares you anymore. I developed this feeling of being invincible, of we can rebuild from any point in time. Outreach operates in an incredibly competitive environment. When we came into the market, there was already three products that were being near – so A), they raised many million dollars more than we did. Second of all, they had a lot of momentum. We had to come in and compete with them, and as the market grew and the awareness of sales engagement as a category became a big thing, now we have to compete with everybody, even [31:55] is getting into the space.

The early days reminded me that there’s nothing to be afraid of. You already seen bottom in the eye, and from now on, it’s – all the things that you see coming your way are circumstantial and, by all means, good news. Competition is good. It drives the market. It drives awareness. It drives capital to the market. It makes a more resilient leader and allows you to put that resilience into your own team members who sometimes are faced with a bad customer call, or an outage, or something else that is incredibly unpleasant and feels like the end of the world. Bringing that perspective in is super helpful.

Tanya:  Yeah, so perspective, that – it seems like the first – your first major almost failure but, luckily, you turned it around in a very significant way was perspective.

Manny:  Mind you, the turning it around in a very significant way was not obvious when we were going through a transition.

Tanya:  A hundred percent, it never is, hindsight.

Manny:  Right, so you have to – you’re navigating this in incredible amounts of uncertainty. You’re at the border of what is optimism and what isn’t? What is a lie? You see what I mean? Most people demand that you know what you’re doing, and you full well know that you don’t. Yet, you have to convince other people that you do. You see what I mean? This is why this is such a difficult thing to do is you have to tell people that, yeah, we’re going to be okay, even though you yourself don’t know if you’re going to be okay. You have to navigate with that.

Tanya:  What draws the line?

Manny:  I don’t know. It’s like a de-risking exercise, right? For me, the first line that I drew was I’ve done 60 of these calls myself, and I know people want this product. That pointed to the right direction, and if we have to do micro payments between this big payment and the next thing, that’s going to be okay. The second thing is that, as we find out more about the kind of people that are buying the product, it’s easy to start wrapping your head around the total addressable market. As long as the total addressable market is big, you’re going to be okay. You see what I mean?

Tanya:  Mm-hmm.

Manny:  The narrative becomes crisper and becomes truer as you validate these assumptions. Make no mistake; the very beginning is just assumptions.

Tanya:  Exactly, you had no idea of most of these things. Wouldn’t you say that the – what really draws the line between a lie and success is the outcome because so much goes into it in the journey?

Manny:  It does, and the outcome is usually a happy customer. You find a customer for whom you solve a problem. That it was meaningful enough for them to pay you. The amount of de-risking of the business that you do by doing that is incredible. You see what I mean?

Tanya:  Mm-hmm.

Manny:  After that, there is two outcomes. Either the market is big, or the market is small. At worst, you end up in the small market, and then you have to figure out how to grow out of that. At best, you end up in a huge market, and you’re solo execution on it. You have to find these points of validation where you turn it from optimism into realism.

Tanya:  Yeah, no, absolutely, and actually, one of the foundations of performance that drives results is team alignment. In fact, I’m actually reading a book right now from Eric Schmidt, the Trillion Dollar Coach. I don’t know if you’ve seen it. It’s really good, and it’s all about this man, Bill Campbell, who was very successful and ended up coaching a lot of people in Silicon Valley. Most of the book is about teams and the teams’ dynamic, and how the team functioning in alignment and perfect harmony is what creates this unbelievable outcome. How do you manage that within Outreach?

Manny:  It’s a really good question. I’m not going to go into OKRs and goal setting, etc. I mean, there’s many books you can read about that. I think the most important piece is team alignment when you’re growing 40% year over year, it’s not that hard. Team alignment when you’re growing 100% year over year, it’s I would say a third of my job making sure the teams are aligned. The reason is that you got to this level of growth by doing two things, one, finding a rich vein of a large market that is increasingly excited about your technology, but the second thing is that we instituted really early single threaded ownership into everything that we do. When people are running with ownership and single threaded in a fast growing environment where you are inventing the road as you go, there is a high likelihood that you end up varying on any day five to ten percent or ten degrees off the mark, and that compounds quickly over time. You see what I mean? If you’re growing really fast and you deviate from the aligned course by five degrees or ten degrees, two months from now you’re going to be super misaligned. You see what I mean?

Tanya:  Yeah.

Manny:  It compounds so quickly, so you have to catch these things early. You have to make these micro corrections early. You have to update yourself and each other on your current thinking often, and that’s a tax. That’s a tax that you pay for growth. If you don’t do it, then you can choose to grow slower, in which case it’s easier to align, or you can just grow really fast, and then just live with a misalignment. 

Tanya:  What do you think are the drivers of having really reaching alignment within a team?

Manny:  The easiest way to do it is to make sure that everybody is in agreement as to why we’re doing what we’re doing, and that you have a set of core values that are closer aligned to the business. You’ve seen core values. There’s a lot of good ones like grit and etc. that we have. If you have a set of goals and a set of core values that speak to the business at hand – like we have a core value called being one with the customer and then another core value about ownership. Our goal is to help every customer facing rep in the planet. Then, even if you are misaligned, you’re not misaligned by a lot. You may be working on something that is in the wrong order of operations, but you’re generally in the right zip code. You see what I mean? 

The hardest part is getting – the thing about alignment is that alignment is to have the limited resources that you have working on the most impactful things. That’s what alignment brings. The definition of that most impactful thing in a fast growing market may change, and the moment it changes and the moment it becomes common knowledge, that’s when misalignment happens. Everybody knows that the most impactful thing is this other thing. Yet, we’re not working on it. This is why misalignment is like an active sport. It’s not like a one and done. There is no secret recipe for it, but you have to actively stay on it. There is no application to this job. You have to do it all the time.

Tanya:  What about trust? I mean, you can have alignment on culture, on values, on objective, but what about team members trusting each other? How do you actually – how do you get your team to play nice together?

Manny:  I don’t know that that’s a goal, at least not for me, and it wasn’t at Amazon. I think we all want to be impactful together. I think that we have – we want a respectful organization that – we have a core value here of having each other’s back. I don’t know that nice is what we’re solely for.

Tanya:  Now, what about trust? In a team, if there’s drama, or mistrust, or egos, there’s a lot of miscommunications that happen, and fundamentally, an organization is able to function based on the health of its communications, its speaking and listening. A huge, I would say, driver of that effectiveness could be measured in whether you trust somebody or not. 

Manny:  I agree. The first thing is do live your core values. The second piece for me is that – I have this conversation often with my directs, and I often have it with other managers as well about the fundamental attribution error. The common name for that is giving somebody the benefit of the doubt in that we will make mistakes, but you have to believe that the mistakes were made because of lack of communication or the wrong circumstances appear in front of you. Not because somebody is essentially a bad person or ascribing some kind of bad value to that person. There’s a tendency, especially in fast growth, high-intensity organizations to ascribe behavior to a circumstance. When in reality, it’s just like, yeah, a few things happened, and hence, I made a mistake.

The other piece is that you have to be super open and honest in all conversations, and you have to be – there shouldn’t be any secret topics that you couldn’t talk. I lead that very much by example. You always address the elephant in the room head on early and at the beginning of a conversation, but to do it effectively, you have to have some amount of care for the other person that you’re talking that through. This is very similar to the Radical Candor book. In my mind, if I were to summarize my learnings is that you can only be radically candid if you truly care about the other person. Otherwise, you’ll just be an ass. The ability to speak candidly and honest to a person requires a fundamental level or a foundation of care. Then on top of that you build trust, and on top of that you build honesty and candor. Only then you’re operating at the peak performance that you were looking for for the team. I don’t know if that made sense.

Tanya:  Yeah, no, absolutely, 100%. I’m a huge believer in candid and, actually, something that we practiced in the business. Frankly, in the early days, I was just an asshole without the care and empathy and slowly developed that muscle, which made all the difference in delivering the message and actually elevating the people around me.

Manny:  That’s the other thing that you asked me. What did you learn about in growing the organization? It’s that. Being honest is not enough. At the end, you’re trying to accomplish a goal, and to accomplish a goal, you have to be able to be – you need to be able to grow people. You need to be able to make people feel good and in power in the fact that they’re growing. If all you’re doing is walking around giving feedback [43:21] without developing that empathy, then you’re not really successful.

Tanya:  You’ve mentioned empathy a few times. I just wrote about that. At what point did you realize that empathy was effective for you in your leadership?

Manny:  It was sometime two years ago when there was a period, and I was just mad all the time. Something seemed to not be working right. I was just going from blowing gasket to blowing gasket almost daily. It didn’t feel right. Then my CO pulled me aside and was like, “Manny, what’s up? It seems like you’re mad all the time.” I was like, “Yeah, this is screwed and this is screwed and this is screwed and this is screwed.” 

We’re growing. We were killing it. We raised some amount of money, and we doubled our revenue, etc., but I just couldn’t live with this level of execution gaps. We settle in on a coach, and finally, around the same time, I started – I took a mini sabbatical. I think I took two days off, and I went to one of the islands here off the coast of Seattle. I started reading a lot about adult development and adult development frameworks, and I read a lot about this guy called Bob Kegan. Bob Kegan has this path of how you – pretty much, how you become a wiser adult. How do you develop more points of view?

One of them is that you can have – you can be mad in a situation, or you could be mad even at a person, but you can have empathy at the same time. The ability to hold this both feelings and thoughts with you together while you ruminate and come up with a better solution where your instinct will tell you or your gut will tell you is the difference between being incredibly successful and giving somebody a boost in between that and you’re chewing somebody out, or just being mad at all the time and not chewing somebody out. I don’t know if that makes sense. 

Tanya:  It absolutely does, yeah.

Manny:  It helped me realize that I can hold conflicting feelings for a while, and that is okay. I don’t have to have resolution, and I can come to a person and be candid. On the one hand, I love you, and I love the work that you’re doing. On the other hand, I’m mad at this situation that happened under your watch. Help me reconcile that. Just saying that and getting into that conversation is incredibly powerful in a relationship and incredibly powerful in an intense and honest relationship like the ones we have here in that you’re able to openly talk about both conflicting things, seemingly conflicting things at the same time and piece it apart. You see what I mean? Seek growth out of that.

Tanya:  It sounds like two years ago you hit this pinnacle moment where, like you said, it just became the gap between where you were going versus where you were became difficult for you to manage, and your response was anger. Part of what you did is you looked to see what tools you had to really elevate yourself and your level of consciousness to be able to effectively deal with the problem that you had in front of you. What other learnings or things do you do to train yourself as a human being to guide other humans and to really lead them and lead your business?

Manny:  One of the exercises that I wanted to have is – that I started getting into is that, in large meetings, in large settings where an active discussion is happening and I see a gap in reasoning, or I see a gap in alignment, for instance, I don’t stop the conversation, which I used to do. I used to manage by intervention. Now I try to manage the system. What I do is I write down furiously. It was weird for a while where I would just take a [47:26] on a note. It’s like why didn’t this person think of this other thing? Why didn’t you bring this up, or why didn’t you bring this up? All the things that I would’ve said live in a conversation, and so to completely [47:38] it, I would just write it down.

That will do two things. I will have a – I will call a quick five to ten minute post meeting briefing where I will actually ask them. All right, this discussion went on, and there’s these five points that we’re missing. Why? In a much more – A), in a much more setting, and B), when I’m already – I deescalated myself from the heat of the moment. I can think more clearly about what’s about to happen. In a smaller setting, people are more open to share with me how they were thinking about the problem.

I try to make those things more coachable moments and coachable for both ways. I may learn something that I didn’t know through that coaching that is coming to me, or the other person may think about – may learn from how am I thinking about the problem for me? It becomes this really rich dialogue that really move to go forward in terms of elevating the conversation and elevating the people and the person. What it does is that it creates a very deliberate motion towards coaching and elevating the team, including myself, as opposed to just me intervening at the moment and trying to change something on the spot.

Tanya:  Yeah, so it goes from an opportunity to learn versus a moment to diminish or disempower somebody.

Manny:  Correct, an interesting thing and that was one of my learning is that I – you don’t even need to do it purposefully. To me, it was happening. Sometimes I would do it. I’d know it, and I will only get the feedback much later on. Those are the worst situations. You’re doing something that is not moving the conversation forward. You don’t even know it. You see what I mean?

Tanya:  Yes.

Manny:  That’s the part that is hardest as a leader is that you may not find out until you stop doing it.

Tanya:  Yeah, hopefully, you have people around you that feel confident enough to be honest with you and help you see your blind spots.

Manny:  You may but you may not all the time. You don’t want to have to deal with the consequences of not having that, so you want to self-correct.

Tanya:  Yeah, this was very interesting. Okay, last question, if you could rewind – how old are you, by the way? 

Manny:  Forty-five.

Tanya:  Forty-five, okay, if you could rewind 10 years so you’re 35, what piece of advice would you give yourself?

Manny:  That’s a great question. I would’ve started a company a lot earlier. I would’ve gone through this entire journey five years ahead.

Tanya:  I mean, your experience, the experience that you had built upon where – built upon your skillsets and your frames of references and possibly allowed you to build what you did now.

Manny:  It’s true, but you don’t learn this by working at Microsoft. You learned it by doing it. I learn a bunch of skills at Microsoft. I think I may be a better CEO now. They’re not that useful when you’re early and you’re four people.

Tanya:  Or when you’re in the trenches. Like you said, I mean, having the constant feedback and catching yourself in the moment not being effective with your team and having to think about how do you change this around, it’s been – some of the people that I’ve spoken with – actually, most of the people that I’ve spoken with, the biggest challenge is personal growth. Personal growth, you can read a lot about technical and operational experience. There’s a lot of resources out there, but actually, personal growth not as in you read a personal growth book but discovery of yourself. Going through and having these insight moments allow you to literally be more effective with your team and, therefore, produce amazing results is where the huge challenge is, especially as you scale.

Manny:  Yeah, and it’s not clear when you need to go through it. It’s constantly happening and the signals don’t come. Nobody is going to come with a 2 X 4 and knock you over the head and say you need to grow up. 

Tanya:  Although, wouldn’t that be great?

Manny:  Yeah, that’s a startup on itself.

Tanya:  Yes, exactly.

Manny:  No, you have to well-tuned.

Tanya:  Yes, well, Manny, thank you so much for being on the show. I’ll say it on air. Outreach is an amazing product. I’ve been an early user of Outreach and absolutely love it and use it for – okay, for the last five years now and have introduced a bunch of people to it so really, really awesome. You guys should check it out. What is next for Outreach? You guys completed your Series E. Are you guys going to do an IPO, acquisition? What are you guys thinking?

Manny:  There’s a lot of customer facing reps that are still living in the Dark Ages and could use a boost in performance and change their life and perception of how much time is spent with customers, so there’s still a lot of ground to cover. We’re just going to go ahead and cover it.

Tanya:  So growth, the path is growth. 

Manny:  The path is growth.

Tanya:  The path is growth, amazing. How do people get in touch with you?

Manny:  Easiest is to send me a note via LinkedIn or manny@outreach.io 

Tanya:  Okay, amazing, well, thank you so much for being on Unmessable and really enjoyed having you.

Manny:  Thank you.

Tanya:  Unmessable is recorded in the heart of New York City, and a special thanks to all the team involved in producing the show. Visit tanyaprive.com/unmessable to find a transcript of this episode, and be sure to subscribe to our newsletter.

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Heini Zachariassen grew up on a little island logged between Iceland and Norway where the total population hovers around 49,000 habitants. While Heini thinks it’s the most beautiful place on earth, the weather is not always great. He stayed there until the age of 22 years old, then moved to Denmark.

From a young age, Heini tinkered with computers and fell fast in love. It was a passion he shared with his father, which never left him. Heini always had a knack for building things and was drawn to the world of entrepreneurship. Serving almost every executive role you can think of from CTO, COO, CEO, Chairman of the Board, Heini has proven one thing, he knows how to build products people love.

In 2010, when Heini and his co-founder Theis launched Vivino, they were the 600th wine App on the market. Within a few short years, they managed to climb to the top with 36 million users, looking up 2 million wines every single day, and organically attracting 600,000 new users each month. To date, Vivino has raised $57 Million in funding and is operational in 16 markets. He shares 5 strategies to break into a crowded market and win. 

Tune in to listen to the rocket ship journey Heini went through with Vivino and his lessons learned along the way

In this episode you will learn about:

• • • Founder experiences
    • Growth hack strategies
    • Product Market Fit
    • Raising capital
    • Runway challenges
    • Differentiation strategies
    • Scaling operations
    • Product development- how to build a product people love
    • Leadership mistakes and lessons

 

Heini Zachariassen’s biography:

Heini Zachariassen is the founder and CEO of Vivino, which provides users with any wine’s rating, review and average price. Vivino is also the world’s largest wine community, claiming more than 15 million users. With more than $37 million in funding, Zachariassen continues to drive Vivino’s global expansion, via users now in 227 countries and on every continent around the world.

Having co-founded several startups, including antivirus software company BullGuard, Zachariassen has a varied background in software development and mobile innovation and a track record for building successful global businesses. He leads the team from Vivino’s headquarters in San Francisco.

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Full Transcription:

Heini:  I think it’s got something to do with my ethnicity where I’m from. It’s a pretty common name, actually.

Tanya:  That’s Heini, founder and chief evangelist of Vivino, the world’s largest wine marketplace that has over 33 million users looking up 2 million wines every single day and organically attracting 600, 000 new users each month. To date, Vivino has raised 57 million in funding and is operational in 13 markets.

Heini:  I’m from a place called the Faroe Islands where I also grew up. Faroe Islands are located between Scotland and Iceland in the middle of North Atlantic. It is the most beautiful place in the world, but the weather is not amazing. Actually, here in California today we have pretty Faroese weather, wet and a little bit cold.

Tanya:  How long did you stay in the Faroe Islands?

Heini:  Yeah, I grew up there. I was born there, and I grew up there. I moved out of there when I was – must’ve been 20 years – no 24, 22 years old. I moved to Denmark. I spent all my childhood there, and back then, it’s 50,000 people. It’s in the middle of the North Atlantic. It is isolated, and the winters are dark. It’s a very special place to grow up, for sure. I think now it’s changed a lot where people are so online and so on. I think I read an article somewhere that Iceland was one of the highest penetration of Facebook in the world, but I’m pretty sure the Faroe Islands would beat that. People are extremely online and well educated and so on, so it’s a very different place now than it was when I grew up.

Tanya:  How would you describe the culture of the Faroe Islands?

Heini:  It’s definitely a small place. It’s something you really think about, at least after – at least, to me, it felt like a uniquely safe place. It also felt like a place where people were very equal in all kinds of ways. I grew up never ever seeing any difference on people, whoever they were. I think it’s something that I brought with me all the way that I think culture and what you grow up in where people over there are like that. Others are like that. Where I grew up, obviously, people were very similar, but it meant my view on people. It was like, hey, there’s no difference between people, wherever you’re from, whatever you do, whatever, so I think that’s been really good for me.

Tanya:  No, that’s a really amazing lesson to learn early on. What were you like as a child?

Heini:  When you look at what I am today or at least I’m seen as a disrupter, as someone who has changed some things here and there, I think I was pretty straight as a child, very well behaved, did well in school, although being super bored all the time. I think I was a pretty regular child, at least I didn’t – I don’t think I felt that special in any way. I had a really good life. There’s no doubt about I wanted to see the world. There was something dragging me saying, hey, there’s a bigger world out there, but apart from that, I think I’ve – people saw me like, yeah, this is a relatively nice, pretty smart kid. 

Tanya:  What were some things you were into when you were young?

Heini:  The funny thing in a small place like that, my father was at the local, very, very small university up there but was obviously a super nerd. Our interest in computers was very, very early on. I’m born in ’72, but I think already in 1980, ‘81, he started dragging these computers home over the weekend that they had at the university. I was exposed to technology and computers extremely early, and I’ve always loved that part. I had two older brothers and then the younger sister. They were obviously much better than me at everything, but I definitely wanted to have my dedicated time in front of the computer, even though I didn’t really know what to do about it. Yeah, I definitely always loved technology and computers, whatever that was back then.

Tanya:  It’s interesting. As you moved into your entrepreneurial journey, you held multiple roles, including CTO, CEOO, CEO, and now board member. How did you move into your entrepreneurial journey and move across all those different roles?

Heini:  When you say the word entrepreneurial, I think that’s the core of it. Whatever I do, it’s about being an entrepreneur, about building something. Going back to where I was, what I was as a kid too is we also loved playing with Legos. Sometimes when I talk to my brothers about this is, when we played with Legos, we loved building stuff, but as soon as we’re done building, we got bored by it, right? That is something that comes back to my life and to my career is that I love building stuff. When it’s done building, I’m less interested in it, so there always has to be something that we’re building. I just love learning new stuff and so on.

Back to my roles, my interest has always been, hey, let’s create something. Is that technology? Is that operating the business? Whatever that is, I just want to build and change things.

Tanya:  No, that’s amazing. How did you start your first venture?

Heini:  Yeah, so very early on, when I just got out of college and a partner – me and a partner, we did this really simple – we did websites and stuff. This is back in, holy crap,’97 or so, and we just started from a college dorm room. Internet was not something that everybody had. We fought hard to even get access to the internet when we started back then. I remember, actually, we had this – it was a few windows down in this dorm room we were, and then, actually, you couldn’t get a fixed line to the internet. That was not something – you would call up the internet. We managed to get some super cheap call in, dialup, which we did. You pay per minute. It got really inexpensive.

At one point, he would call the internet, and there was no real network back then. We had a cable out the window, out of his window into our window, so say from say 7 in the evening, we would be on for three, four hours. Back then, nobody was on the internet for three, four hours. That was just crazy. 

Tanya:  Wow! How did you transition into your first company? That was BullGuard.

Heini:  That company, the first thing we did there, it became a security service and so on. Then one day I got in touch with a person called Morten Lund, who’s really – pretty well-known name in Denmark, a great entrepreneur from Denmark. He said, “Hey, we’re building this company called BullGuard.” I had been on television at some security something, and he said, “Hey, we’d love for you to join us. Help us build this.” I talked to the guys. This was Morten and this was Theis, who later became my co-founder at Vivino. He got in touch, and we started chatting. I really liked these guys. I think they had something really interesting.

The basic idea back then was we’re building a security suite for consumers, not for business. The cool thing about it was that it was a partnership with this product called Kazaa, which you may or may not remember. It was just after Napster. There was Kazaa, which was extremely popular. It was built by the same guys that later – Skype, Janus and Niklas, they built this product for sharing files or whatever you want to call it, piracy. They were looking for some kind of security solution that could be distributed with this product, and Morten got in the deal of doing that. Theis is very much a product guy. I was more the business guy, and we started building the company based on that distribution deal. That was an amazing journey, and I learned so much from that.

Tanya:  What was the biggest two takeaways that you got from that experience?

Heini:  That’s a good question. I think one of the things that maybe surprised me a little bit was that we came in very, very late to the market. We were building this security suite. We were competing with really well-known names such as McAfee and Norton, Symantec and so on so very competitive space. Since we had a good distribution deal, we could actually compete. It was just weird to me that this very, very small company based out of Copenhagen – and we did some stuff in Bucharest, Romania too. We’re actually able to compete with this massively big US company and actually build a product that was probably better than theirs because we focused.

That comes back to one of the things that I think is really important. We had a relentless focus. We said no, no, no. We’re only going to build this product for consumers. Not business to business. Business to business was very attractive and big orders and so on, but we said we want to build the best product for them, for the private user. I really learned one thing. Hey, you can compete globally, and secondly, if you focus really well, you can beat anyone.

Tanya:  Actually, entering a competitive space is not something that you shy away from. You created Vivino, which I was told to tell you by my father that he absolutely loves the app.

Heini:  Oh, thank you very much. I appreciate that.

Tanya:  I had to tell you.

Heini:  Thank you.

Tanya:  Can you tell me a little bit about how Vivino came into being what it is today?

Heini:  Vivino came to because I had a personal pain, which was that I really love wine, but I don’t know what’s good and what’s bad. I just couldn’t understand the thing that you have a rating on everything, books, movies, even cab drivers, but wine, you don’t know if it’s good or bad. Somehow there was no rating system. There was no proper database. I just said, hey, that’s got to be – if it’s possible for all these other things, it’s got to be possible for wine, and I knew nothing about wine at all. Like you said, when the apps came out, it’s a very competitive space, and I think we found out later there were around 600 wine apps in the App Store when we launched.

When it comes to competition, one thing I think is super important here is that you don’t have to build a perfect or an insanely amazing product. What you really want to make sure you are is the best product. If it’s a new category, or if product in the category are pretty mediocre, you can build a better product and win. That was really the case for us because we started with no data, no ratings, no nothing, but quickly, with relentless focus, we became the best product. It didn’t really mean that the product was amazing at the time. It was just like, hey, this is the best product out there right now. It might not be a lot better than the others, but that’s what I’m going to use at this point. I think that’s an important realization. If you go for perfection, it’s very, very easy to never release or just release parts of the product. It doesn’t come useful because you just try to build perfection all the time.

Tanya:  Yeah, no, that’s true. Actually, if you build a very small part of your app and test it and see how people interact, based on the user feedback you keep building, which makes a huge difference in the product iteration flow. 

Heini:  Yeah, very much so. That’s really been our philosophy early on is focus what we think is the most important, and listen to the user, and really release very, very quickly.

Tanya:  You led Vivino for eight years as the founder and CEO.

Heini:  Yes.

Tanya:  What were some of the toughest times that you had to charge through with the company or personally?

Heini:  Yeah, I think a couple of things at least I can remember. I think, when you sit in a basement, which was in the early, early days and later Theis and I – and there’s actually really nobody using your product. You got to have really strong faith in that this is going to work. People are always supportive and so on, but that doesn’t generate to an app that’s now out millions of times. You really need to stay the course in those early years, right? It took us a year and a half before we really saw any traction. That’s a year and a half where you have to say we believe in this. We think this is the right approach. We’re going to keep going.

That’s I think where a lot of people just stop and say maybe – I say this took 18 months. Imagine if you stop after 16. That sucks because you’re so close, and very often, there are tipping points. You get to a certain level, and suddenly, you see, holy crap, now it’s growing faster. I don’t believe in silver bullets. I believe in there can still be tipping points because of the 50 things you did over the last few months more than the 1 thing that you changed. That was definitely a long period where you had to stay focused.

Tanya:  Was there ever a moment where you had doubt or your co-founder, Theis?

Heini:  This is also how I’m built is that I will never show doubt. People will never see any doubt in me. I think people think how the hell does he keep going and believing in this? The fact of the matter is that I always have doubts. I always have doubts in the evenings when I go to bed. I always think what the heck am I doing? Then the morning comes, and you’re ready to go. Let’s keep going, and this is going to work, and this has to work. Yeah, so it’s both what you express, what the outside sees in you and what’s inside you. There’s no doubt about it, and I have doubts all the time.

When you start to see things go, you have different kinds of doubts. Yeah, people are definitely using this. It’s amazing. What if they stop using it? There is a certain kind of paranoia I think which drives a lot of entrepreneurs.

Tanya:  Yes, absolutely, and in fact, two people in the same week recommended the book from Andrew Grove, Only the Paranoid Survive.

Heini:  Oh, I have not read that one.

Tanya:  Yeah, actually, it’s right on topic with what you’re saying, and he’s chairman of Intel.

Heini:  Okay, very good.

Tanya:  Yeah, I mean, exactly, it’s like you always have to be on the lookout for any upcoming new technology that is better or gaining quicker traction, so that keeps you up at night.

Heini:  Yeah.

Tanya:  First of all, how many employees does Vivino have today?

Heini:  We’re just over 100 people. I think we’re 110 right now. We have 35 million users all over the world, but we’re commercially active in 13 markets now. Our biggest office is in Copenhagen, Denmark where we have 50 people. Here in San Francisco we have 30, and the rest is spread out in different countries more active commercial.

Tanya:  Now you sit on the board. Do you spend most of your days at Vivino, or what do you do with your time? 

Heini:  Yeah, I still do. I still do spend most of my time with Vivino. It’s a different kind of work now. I spend a lot of time doing what I do right now, evangelist and podcasts and so on. I do go to quite a bit of conferences and speak the gospel of Vivino. On top of that, I have some strategic projects inside Vivino that I help with, projects that I’m passionate about. I have a little bit more room to do some interesting things right now. 

On top of that, I think something that a lot of entrepreneurs have is we have to be obsessed about something. When I step down as CEO, I quickly found out that, hey, there’s definitely a hole there somewhere that needs to be filled. Otherwise, I’m just going to step on the toes of the new CEO, and that’s not going to work. I started doing YouTube. We talked about that before this show that I started doing this show on YouTube called Raw Startup where I try and give a little bit back to the startup community with some advice that – what I’ve learned over the last 25 years.

Tanya:  Yeah, absolutely, what precipitated the step down from you as CEO?

Heini:  It was a combination of many things, and this is something that is tricky for any founder, I think. Do you do it? If so, when do you do it and so on? I think, for me, it’s basically two things. It’s, number one, what do I like to do? What do I think is fun and so on? Secondly, what am I good at, or is there somebody else who’s better at it than you are? 

I think, the first part, there were really parts of my job that I really enjoyed, other parts that I didn’t enjoy as much. On the second part, is there somebody out there that’s better than you are? When you think about what a founder’s job really is, it is coming to work from day one and finding someone who’s better than you to replace you at all – whatever functions you have. That’s really my core belief. If there are ten founders, maybe that’s different, but most founders, there are two or three founders. We’re going to be 360 people that are broad and so on, which means that there should be experts that are better at doing a lot of this work. Those two things, what do I want to do, and secondly, is there somebody else out there who’s better at it than you are?

Tanya:  Yeah, no, absolutely, actually, most founders that I speak to like to lead the company up to a certain headcount, and then the dynamic changes. The role changes significantly, and then they just check out but still very committed to the overall vision and future of the company.

Heini: Exactly.

Tanya:  What were some experiences that you had in leading your team that really caused some insights and growth opportunities as a leader?

Heini:  That is a good question. I’m sure there are a lot of them. This is maybe a little bit overall, but what I really enjoy the most is when you have something you want to get done. You look for people to help you do it, and then you work with them as best you can to say, hey, here’s a job at hand. Here’s how maybe I think it should be done and so on, but then really seeing them do the job much better than you could do it. For me, that is incredibly satisfying. I think some people might – it might hurt their ego. For me, it’s exactly the opposite. It’s like, no, this is exactly what I do.

We hired a, whatever, sales, VP of sales. He came in. We had an idea how this should be done, but he came in and just did it a lot better. That’s something that I really appreciate, and over the years in my career is something that I’ve really learned. That what you need to do is find people that have – especially in leadership positions that have done this before or something similar. Coming back to the CEO change, that’s exactly what we did there is Chris that joined us there had built a marketplace with similarities to Vivino and done that at a much bigger scale than I had ever done. That’s something that’s extremely satisfying.

Tanya:  Yeah, so actually knowing when is the right time to move out of the way and let other people really steer the ship is an important quality that you have to develop, and to your point, not everybody has that ability. In fact, I was just interviewing somebody yesterday who their biggest challenge was to get out of the way. Most founders think I could do this better and quicker, and they go for it. That’s really, really useful.

Heini:  Just to add to that, that’s really hard to scale. If you think that you’re better at everything, that’s hard to scale.

Tanya:  Oh, 100%

Heini:  I mean, you have 24 hours a day, and that’s not going to work.

Tanya:  Yes, and actually, that’s what the founder was saying is that was something that they – luckily, they worked through. He experienced tremendous success, but that really could have gotten in the way of what actually ended up happening, which was a huge exit and a lot of liquidity and a lot of happy shareholders.

Heini:  Very cool.

Tanya:  Yeah, how long have you been working with Theis?

Heini:  Theis and I have worked together for the past – holy shit, it’s not quite 20 years. It’s got to be 18 years something now. I always saw myself as a semi-founder of the BullGuard, but officially, I wasn’t. Theis and Morten started the company, and I came in right after. We worked together ever since, so it’s been a long and amazing journey. Obviously, six years he’s been in Copenhagen, and I’ve been here in San Francisco. I think that’s also something worth mentioning. When you do this shift where I moved to San Francisco, 9 hours’ time difference, 11-hour flight, that’s a – suddenly, there is a long distance between you and the other people, and having that trust and having worked together for so long I think was one of the reasons that was possible. Just something that’s really, really hard to do and having to build trust over many, many years really helped that transition.

Tanya:  This is interesting. Without trust, nothing is possible.

Heini:  No.

Tanya:  Like you said, it happens over time. Really, integrity is a function of trust. If you can count on – and I’m saying his name wrong. It’s Theis.

Heini:  Yeah, Theis, it’s in Danish.

Tanya:  Okay, Theis.

Heini:  It’s a little bit tricky.

Tanya:  Okay, Theis, over 19 years, what is your secret to having a successful work marriage?

Heini:  Yeah, I think you’ve already said a lot of it. It’s trust. It’s integrity. It’s respect and transparency and those things. I mean, it’s very similar to a marriage or something like that, so all those things you need to have. Otherwise, it’s just not going to work. Then there are other things, obviously. That he really respects some of the things that I do, and I respect some of the things that he does, and I know that he’s extremely good at. Then, at the same time, we overlap and challenge each other, right?

We would never let things go – I would never let him do something weird for a long time and say, Theis, what the heck are you doing? We need to talk about this. I know that he wouldn’t let me do that either. Sometimes we joke. I know, in the early days, when I moved out of there that they would have a meeting about the product and so on. He would say, you guys, you know what Heini would say at this point. Then he would say Heini would say you’ve got to do it this way, otherwise – something like that. His voice was always in the room here, and my voice was always in the room over there.

Tanya:  Oh, wow! That’s amazing. How do you guys approach a major disagreement like where you guys completely are at odds with the solution?

Heini:  It’s very rare. We do shout at each other. We do get a little bit pissed once in a while.

Tanya:  Of course. If you didn’t, I’d be shocked.

Heini:  That’d be weird.

Tanya:  Or say you’re lying.

Heini:  Yeah, exactly. It’s really quite rare. In most cases, that’s a – it’s a funny dynamic there, actually, is that we feel each other out. If I can feel that, okay, this is something he feels very strongly about, then I usually back down, or find a way to compromise, or soften it up. When he sees me say, no, no; we got to do this, then he does the same thing, meaning he either backs down, or just we find some good compromise we really like. What often happens is, hey, we’ll deal with this. We’ll do a small compromise now, and then, later, things change. It’s a new situation, and it’s fine. I’ve been the CEO, so it was always like, hey, if you want to do this, you can make the call, and we do this. That did happen once in a while, but again, it was very, very rare. He would always back me if we had to do it like that.

Tanya:  Yeah, no, I mean, you’re very lucky to have that. Actually, so having founded a platform where co-founders meet and having studied a lot about that, 60% of the time organizations fail because of co-founder conflict. It’s hard to achieve what you and Theis have achieved. That’s really amazing. What do you use to really fuel your own growth and awareness on leadership and how to – what do you use to grow?

Heini:  Yeah, I think a lot of that’s just a mindset, honestly. I think a lot of that is being open to learning from other people. I really don’t have a lot of fixed thoughts on these things. Obviously, I read quite a bit. I listen to all kinds of podcasts, and another thing is people talk about having mentors and so on. I always felt like I’ve had a lot of mentors, meaning I just have been privileged of meeting so many incredible people and have just been cherry-picking amazing ideas from them and learning from the people I met down the road. I think it’s a mindset of being open minded and listening to the smart people around you.

Tanya:  It’s interesting you say that. I haven’t heard anybody position it like that, the mindset, and I once heard somebody tell me that you can learn something from anybody regardless of what their background is, who they are, their experience, regardless of anything.

 

Heini:  No, I think that’s incredibly important. I’ve had people that I’ve worked with before that did the opposite in the way they had one person that was smart, and then they loved everything they said. I don’t like that. What I do is every single person – I can see San Quentin from where I’m sitting right now. There’s 700 people on death row there, and it’s a big contrast from where I live right now. Those people there, don’t you think they have learned some hard lessons that I can learn from? They have definitely made some horrible, horrible choices in their lives, but we need to listen. If we cherry-pick the right stuff from every person, we can grow immensely.

Tanya:  Mm-hmm, yeah, I think that that is such a valuable piece of advice and something that we don’t practice enough. It’s almost like we disregard if it doesn’t look and feel the way we think it should feel or come from who we think it should come from so really brilliant. How do you think that the experience that you had at Vivino – so these past eight years, how do you think it has influenced and shape how you view yourself? 

Heini:  Yeah, I think my wife sometimes says to me that – we’re still married, so it’s not necessarily bad. She says to me that I’m not – definitely not the man she married, for good or bad, so I’ve definitely developed in all kinds of way. I think I have a lot more confidence than I had before, but I think I’ve just learned so much from this journey and the people about the industry. At some point, there’s going to be some kind of book where we pour it all down. Yeah, I just feel like I’ve learned so much, and also, another thing that I think is important is that there is some timing and some luck in these things that we’ve done really well. The difference from doing really well like we have to somebody who has done not nearly as well, the difference in effort and so on might not be anything at all, and we have to remember that. There are people out there that are incredibly good at what they do, but they just didn’t hit the luck or the timing and so on. I feel very privileged in that sense that we really hit something and got really fortunate.

Tanya:  Yeah, absolutely, no, it’s very true. You pique my interest. What would you book be called if you put it all down?

Heini:  I think this definitely wouldn’t be the title, but something like this is that I – my father, like I said, was at the university, and he’s a statistician, right? I grew up thinking about things like making smart calls and being careful and so on, and when it comes to what I do now, I really don’t believe in that. I really much more believe in a just do it mentality where you just got to do it. You learn so much from doing things. Obviously, you’re not going to jump from 50 meters down to some concrete and kill yourself, right? You really start learning when you start doing things. I think that’s incredibly important. Knowledge and learning from others is fantastic, but don’t turn everything in – don’t make things complicated. Make the other thing. Make it simple.

I think the art here is really to just do things and keep them simple, which is not easy. They’re really, really, hard. I think there was – I think this was – it might have been Hemingway or some of the big authors that said – in a letter, said, oh, I’m sorry about the long letter. I didn’t have time to write a short letter. People really think of that in the reverse way. It’s going to take a long time to do a long letter, but that’s not true. Really, it’s hard to take that down to half a page and with the right stuff. That’s what’s difficult, so learn from them, but keep it simple. Don’t try and listen to 50 things at the same time. Boil it down to two things that are important and go for that. This is getting a little bit abstract here, but anyway, just do it and keep it simple.

Tanya:  I love it. Maybe even as a book title suggestion we can do something around be careful or be an entrepreneur. No, that sucks.

Heini:  It needs a little bit of work.

Tanya:  Yeah, that needs a little bit of work. I was thinking of – you were saying you really have to be careful, or you were taught to be careful.

Heini:  Yeah, I was taught to be careful. I’m a little bit of the opposite right now. Just do it now, right?

Tanya:  Just do it. Yeah, well, that’s it. I mean, being careful and entrepreneurship is so at odds. To be an entrepreneur, you have to have an incredible risk appetite.

Heini:  You got to take your chances, and just go for it. That’s really something that did take me some time…

Tanya:  To develop.

Heini:  Yeah. 

Tanya:  What happened that allowed you to learn that coming from somebody that was careful?

Heini:  When I started seeing it, I remember some of the early – I don’t want to call them mentors. The people that I met early in my career is they just said, hey, just do more. Just do it. I saw some people that, honestly, were reckless, and I learned from them. From my background and looking at somebody who’s reckless and then finding some middle ground right in between there was very useful. One thing I do remember clearly was – I think this was Richard Branson’s first book where he talks about doing the airline and all those things, and I honestly thought, holy shit, you’re not very smart. You’re not thinking this through. Then I realized, well, actually, he isn’t thinking things through, and he’s being very successful. I actually picked up a lot from that and that mindset. You’re going to make some decisions now. You’re not going to have full knowledge about the outcome here, but you’ve got to go for it 

Tanya:  Trust that you’ll figure it out. If you don’t all figure it out, you can team up with other people to help you figure it out.

Heini:  Yeah, and you’ll problem solve, anyway.

Tanya:  Yeah, oh, that’s great. If you could rewind back ten years and give a piece of advice to your younger self, what would you say?

Heini:  Yeah, ten years, what the hell I’ve…

Tanya:  Do the math?

Heini:  Yes, exactly, where am I at, and where are the kids at and so on? I think this is something I do anyway but just do it even more is really enjoy the journey. I’m not sure it’s an advice as such, but imagine the privilege. Growing up in the middle of nowhere and starting to build this amazing company with these amazing people and having the privilege to move your family to Silicon Valley and the experiences we’ve seen here has really been amazing and a privilege. You really got to enjoy the journey.

Tanya:  No, absolutely, it’s a great reminder. It’s almost like we need to be reminded of that every day, stand and being grateful and just being present, and your entire experience of life changes.

Heini:  Yeah, exactly.

Tanya:  Yeah, well, brilliant. Thank you so much. How do people get in touch with you if they want to say hi?

Heini:  Sure, I’m on all the social media, Twitter and Facebook. Really, I’d love for anyone to check out the Raw Startup on YouTube and maybe get some advice on how to build their startup.

Tanya:  Awesome, well, Heini, thank you so much for being on the Unmessable show today. I really loved your thinking and approach and appreciate your time.

Heini:  It was a pleasure, and thank you very much for having me on. 

 

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As an insatiable kid, Ander Michelena, originally born in Spain, intuitively knew he was destined for the entrepreneurial journey. Although he kicked off his career in finance at Morgan Stanley in London, specifically focused on merger, acquisitions and IPOs of European financial institutions, his vision was always to create a high-growth business.

During his time at Morgan Stanley, Ander actively looked for proven business models in the US that were not available yet in Europe or LATAM and stumbled upon Stubhub, a successful technology platform that sold tickets online. A lightbulb went off for Ander. He saw that if he could successfully replicate Stubhub’s model in Europe to start, he could potentially build a valuable business.

Fast forward 7 years, Ander not only cofounder (with Jon Uriarte) Ticketbis but had scaled it to 300 employees in 48 countries with a total annual gross merchandise volume of $100 Million. In 2016, Ticketbis, after a 12-month due diligence process and a two-year courtship, inked an acquisition deal with Ebay for €165 Million (at the time the transaction came out to be close to $200 Million USD given currency conversion). The best part, Ander had 2 weeks left of runway (cash in the bank). Knowing the lucrative deal was underway, he refused to raise capital to avoid further equity dilution. Luckily the transaction closed, but it was risky given how long the process took.

Tune in to listen to the grueling process Ander went through to make this acquisition happen.

In this episode you will learn about:

• • • First-time founder experiences
    • Startup growth strategies
    • Raising capital
    • Runway challenges
    • International expansion
    • Scaling operations
    • Selling companies
    • Acquisition strategies
    • Post-acquisition transition
    • Leadership mistakes and lessons

 

Ander Michelena Llorente : Graduated in Business Administration and Finance in the Universidad Pontifica de Comillas ICADE (Madrid). He start his career in Morgan Stanley London, where he specialized in merger, acquisitions and IPOs of European financial institutions. In 2009 he left the Bank to create Ticketbis.com, a market where fans can buy or sell tickets, with his partner Jon Uriarte.

In 2014, Ticketbis became the leader in South Europe and Latam with presence in 30+ countries and over 300 employees in 14 offices around the word with revenues of Eur 60m. Ticketbis has recently started operations in Asia with a special focus on the Japonese market throught Ticketbis Japan

After the acquisition of Ticketbis for $165 Million, Ander launched the VC fund All Iron Ventures.

Connect with Ander Michelena:

• Website
• Twitter
• Linkedin

* * *

Full Transcription:

Ander:  My momma actually say, oh, you were good, but. She always had this but, but you’re didn’t stop. I was a kid. I was constantly moving, constantly doing things.

Tanya:  That’s Ander Michelena, who founded and sold Ticketbis, the ticket sales platform for Europe, Asia, and Latin America to eBay for 165 million euros. At the time of sale, Ticketbis had over 400 employees worldwide and had only raised 26 million in funding. Now dedicated to venture investing, Ander is the founding partner at All Iron Ventures with an expertise in helping their portfolio companies expand internationally.

Ander:  It’s funny now because [01:15] space for it and actually, my kid, I have a 2-year-old, and my mom said he’s a copy of you. He does this.

Tanya: Oh, really?

Ander:  Yeah, he is. He good at things, super funny, moving. He’s awesome. He’s super [01:29] in that he does this stop. My mom always compare it to what I was. I have a small version of myself, at least on that sense, and also, I know what she meant now.

Tanya:  That’s amazing. What did you not stop with? Was it sports? Was it video games, projects, reading?

Ander:  When I was very small, it was just very nervous kid, just moving a lot, doing a lot of things, playing, etc. I always liked the games. At sports, I always played tennis, football, ski. I did golf. I did a bunch of things. I was always on the move, so it was a mix. I couldn’t be sitting in a place doing nothing. That was not for me. It has never been for me, and it’s still not for me right now. It’s the same. I cannot, and I will jump into that later.

For example, when we sold the company, we probably decided just to stop doing anything and go and relax on the beach and stay there and have the money invested somewhere. You got a good return and do nothing. Man, I cannot do that. It’s too boring for me. I need to do something. That’s the story of my life it seems.

Tanya:  It very common with entrepreneurs. It’s like there’s a fire burning inside, and you just have to apply that energy and channel it into something, which is amazing.

Ander:  I become crazy.

Tanya:  Of course, and so how did you go – thinking about your entrepreneurial journey and transitioning into that, how did you go from an analyst at Morgan Stanley to the founder of Ticketbis and really running that for seven years?

Ander:  That’s very funny. Basically, since I wasn’t – I always wanted to start my own company. I decided that in university I wasn’t ready to start a company. I think there is few success of people who actually have been in university have done their great company. [03:22] is one of them, of course, but there’s a lot of people who actually don’t have enough experience. I think your chance of success without finishing university, without having some work experience I think is much more limited, my point of view. That’s what I thought when I was in university, and I thought, look, another time. Finish university. Then I’m going to work somewhere for some time, and then I will give it a try.

That’s what I did, and also, I needed to decide what to do. She wasn’t my wife then. I married her after – two years after that. My fiancé was like I want to go to London to study law. I said perfect. Let me go there. Let me go do Morgan. I have an offer from Morgan Stanley, from McKinsey, from other banks, and I was like, okay, I’m going to take this right now. I’m going to go to London. We stayed there for two, three years, and then we’re going to come back and probably master something. I have this idea clear in my mind already before joining the bank.

Tanya:  Wow! How did you know you wanted to start a company? Not everybody wakes up and thinks that they want to do that.

Ander:  That’s a good question because I don’t have – funny enough, I don’t have entrepreneurs in my family. My dad worked for a bank. My mom is a nurse. There is not really a figure of entrepreneurship in my family. I don’t know. I think this has to do with the kid that I was, that I always needed to do something. I wanted to have the feeling that I was not only working for somebody else. I wanted to do something for myself. I saw that it was something that I needed to do, but I don’t have experience with. At this moment of my life, they will say this is why I decided to start a company. No, really, I think it was more the – it made the fact that I was and I knew it was something that I wanted to try.

Tanya:  Interesting, so almost intuitively you knew that that was for you.

Ander:  Yeah, I will say that, yeah.

Tanya:  Yeah, that’s amazing. What were some of the – before the amazing success that you experienced with Ticketbis or even during Ticketbis, what were some of the failures that you had to go through in order to develop your muscle and your muscle for risk taking?

Ander:  When I enter Morgan Stanley, in the first year, it was hard as hell, right? I knew where I was going. I was going to investment banking, going to the financial institution group. It was just under – I worked there from 2006, 2009 so on the peak of the craziness, and then, all of a sudden, when everything fell. You can imagine the amount of pressure that it was. In my life, I’ve always been one number, top two or three in everything in the classes that I had in my school, university as well, number one and number two in the career. When I arrived to Morgan Stanley, the first year I wasn’t one of the best ones. Yeah, I’m on the top 20%, but I wasn’t number one or number two.

That’s not failure by any means, but it was like, whoa, a check of reality. Okay, you cannot be the best at absolutely everything, right? That it’s always somebody who got to be better than your or something. Somebody’s going to do something different. That was another shock of reality, of humility that was – I think it was self – well, actually, it was very helpful to see that work out. There is a lot of competition and a lot of people who want the same thing, many things, a lot of intelligent people in this world. That was a good shock of humility, my first one, I will say, in Morgan Stanley.

Tanya:  What would be your second?

Ander:  The second is I actually – when I was looking at this model – before we created Ticketbis, I was looking at creating this company. I will look at different ideas. I was doing it with a guy that I knew from university. Both of us always talk of we need to start something together. He was working at Morgan – I’m sorry, at McKinsey at the time. We’re looking at different models and a license.

Funny enough, this person, he wanted to quit – he was looking with me at some product, but he was also looking with somebody else on other product. The product that he was looking with somebody else actually started running quickly, and they race. They have almost a grand race, and he said, look, I cannot – this is going on. This is happening. I cannot say no. You have to understand it. I need to go on this break.

Tanya:  You didn’t know when he – that he had these two initiatives going on at the same time?

Ander:  I knew. He was totally honest with me, but what I was expecting, you all would expect, no, the product that you are doing work is – that the work was going to work better or faster, etc. I will get with him different ideas. At the end, well, he has this other product and, actually, they got the finance. He said, look, I need to go with this. I need to do this. I totally understand it, and I’m still a very, very good friend with him. He’s actually the founder of [08:29], who is a very successful company, recruiting company as well, one of the founders. 

He decided to do that, and all of a sudden, after working for six, seven months and working – and talking about working that day job, investment banking with the 80, 90 hours a week that it is. On the free time that I should be sleeping, I was doing this so really working my ass off to actually get this done. It was like, oh, shit, now what I do, no? That was another look. Funny enough, I was lucky enough to find my co-founder, a little bit later on that. [09:06] two or three months. I push through. I thought the idea was great. I thought there was space to do it with a good amount of work.

Then I found Jon, Jon Uriarte, who is my co-founder, and he’s a great guy. We actually click very easy. It was very funny because we just met in an airport, funny enough.

Tanya:  Oh, really?

Ander:  You never know who you’re going to meet in an airport, so be ready for it. We met. He was actually working in Morgan Stanley as well. I start talking. We start getting together. I told him what I was working on. He liked it. He has also working several ideas by himself, similar approach to me, basically, analyzing things that worked well in the US, and then where you studied in Europe, that there wasn’t nothing similar in the LATAM. On those days, in 2009, you could still do that, right? Products move slowly, things that – most of the new stuff up here in the US, but it took American companies two or three years to go to Europe and another two to go to Latin America.

Now things are going faster, but at that time, that’s how it was happening. There was an opportunity to do this [10:14]. He liked what I was doing, and at the end, we agree on pursuing this product together. We launched Ticketbis. We quit the bank in 2009, and we launched Ticketbis in 2010. In January 2010, it was when we launched the website.

Tanya:  Weren’t you concerned with the economic crisis going on in 2008 to start a venture in 2009 and secure funding and do whatever you needed to do to get it off the ground, especially in Spain?

Ander:  Oh, my god, yeah, this is the best question. At the time, I was 25. We were raising money, but the concern, it wasn’t more me. It was more my family. I would remember I always heard this very clear going to talk to my parents, but at my mom, I’d say, “Look, I’m quitting Morgan Stanley,” so first job. “You could have very secure job that paid you a lot of money. What the hell is going on?”

“To start my own company.” “Oh, sure, and what are you going to do? You’re going to create a company that resells tickets online.” They’re like, “Oh, my gosh, what my son doing?” That was exactly their reaction. My dad was more okay with it, but my mom was like, “Oh, you need to think about this. Are you sure about this,” blah, blah?

It took them awhile to process it. After a while, they came with, okay, if you want to do it, do it, and they were really helpful. Also, the luck for me was that my wife has always been extremely understanding, and she was supportive 100% of the time. Never said I think about it. She was like, look, if that’s what makes you happy, do it. Just do it. I will support you. She was always there. That was very important, right? If I wouldn’t have that support, I don’t think I would have been able to do it because we didn’t – such a good high paying job to start something that 90% of the time, 95% of the time goes to nothing, it’s a big risk, right?

Tanya:  It is a big risk, especially in a huge economic crisis, and [12:15] got hit really hard as well.

Ander:  Yeah, I know [12:18] there. We were talking to – we told them to our bosses, and nobody could believe us. They were saying you are joking, right? Everybody was sticking to their chair very tight. Oh, I don’t want to go. I don’t want to go, and understanding what our boss had told them we are quitting were like what? You are serious, right? You are not serious, huh? Yeah, we’re serious. Oh, okay.

Tanya:  Yeah, very serious, and actually, I mean, the good news is it panned out for you. You sold to eBay for 165 million euros, which whatever the conversion was at the time ended up being close to 200 million, which is a huge success. A lot of the people that I speak to that have sold their business, once the business is sold and they’ve removed themselves, they experience this loss of identity and loss of self as they transition into the next chapter. Did you have any of that experience?

Ander:  For us, it was a little bit different. I think, when we sold the company, one of the conditions that eBay put on the table is that we needed to remain in the company for three years. We actually managed to – we actually went out after two years, very good terms with – I was working with eBay. That was no problem there, but we got it to two from three. At the beginning when we sold the company, we didn’t have the feeling that, all of a sudden, oh, my gosh, what do I do tomorrow? I’m normally working 16 hours a day, and then, all of a sudden, I don’t have anything. We didn’t have that.

Actually, the day after we sold, we just keeping working, but now we have a new boss that was the CEO of StubHub. Things just keep moving on that direction, so we didn’t have that feeling. We have a different feeling. It was very strange. When we sold the company, all of a sudden, you receive a transfer to your account, and oh, my God, this must be wrong. This is impossible, another feeling, another interesting feeling. Yeah, basically, you get the transfer in the bank, and you look at the account. You are like, oh, my gosh, what am I going to do with this? It’s a completely new experience. You don’t know. What are you going to do with it, right?

That’s up to [14:24]. It was a nice problem to have, but you feel like you need to do something with it. You cannot just be sitting there on it. It’s strange sensation, a very strange sensation.

Tanya:  I can imagine. What did you do with it?

Ander:  Basically, we talked to a lot of people, and they told us don’t touch it for six months. We didn’t do that, of course. The first thing we did is we – it was one of the biggest selling in Spain at the time. I think that’s [14:57] quite rapidly. The system [14:59] extremely fast in Spain. It’s a lot more transaction now, etc., but at the time, it was one of the biggest sales of the internet company in Spain. We became I don’t want to say famous. Our name was known, and we started receiving a lot of projects. Through all the projects that we receive, we basically say no to 99% of them. We like some of them, so we start investing money on some of these projects. As I say, I’m very busy.

Tanya:  That’s amazing. No, that’s really great, and I’m so glad to see you guys are reinvesting. Do you mostly invest in Spain, or are you location agnostic?

 Ander:  Location agnostic, so most of my – these all come from Spain. We do a lot of investment in the US through [15:49] for somebody [15:49]. I don’t know if you know these guys?

Tanya:  Yeah.

Ander:  Yeah, we do a lot of investment with them. We normally send them opportunities that we see in Europe. There’s investing that we see in the US, and we have done a bunch of investment with them. They are great, so we do invest in the US but normally through these partners. In the rest of Euro is also through other VCs. Our position is we are very complimentary to our VCs. At the end of the day, we try not to lead rounds. We are super flexible in terms of size of check that we can put on, but we bring a lot of value to the table. We have entrepreneurs. We still are entrepreneurs. We have been on the other side.

When we sold our company, I think our VC was already present in 40-something countries, growing over 100%, over 100 million in revenues, 400 and something employees. We were one of the only commerce that actually launched successfully in Asia, and we were present in Japan and Korea. There were, of course, [16:44] and then Latin America, of course, or Europe. I think that there’s a lot of value that we can add to companies, especially the ones that try to internationalize and go and do that. This is our [16:58] need, and we are just another compliment to a round where we can actually bring a strong value to the table. That’s long story to tell you that, yes, most of them are – our direct influence is Spanish, most of it, but we do invest outside of Spain. We don’t have a restriction or the same – finally, we can do whatever we want with the money. It’s very flexible. We invest a lot, and that’s normally through partners [17:23].

Tanya:  Awesome, that’s amazing. No, co-investing is always a great way to deploy capital. You mentioned that you had up to 400 employees globally. That’s a challenge to manage that many people. How have you evolved through your experience with Ticketbis over the years as a leader?

Ander:  It’s very interesting. When I start Ticketbis, I was a kid, 25, a total kid. I never managed anybody in my life. Yes, I’m lying. When I’m three years in Morgan Stanley, I have a – as year one analysts that I managed. That’s pretty much like not managing anybody, so I never managed anybody in my life.

All of a sudden, we start a company. I’m a founder, and we start hiring people. The company started growing, and we start hiring more and more people. There were 50 in the organization. I learn on the job, to be honest, and I make a bunch of mistakes, a lot of mistakes. First mistake is I’m, as I say, very nervous. I like to do things, get things done, get shit done. That’s what I do.

When you get somebody to do another job, a lot of time I felt like, oh, but I can do this faster than the person I just hired. Let me just do it. It’s a huge mistake, right? You ask somebody to do something. You should let them do it. Let them get that wrong. Let them get their mistakes, learn from it, and that’s the only want that this person is going to grow. You’re actually there trying to do everything. First, you’re not going to do everything. That’s totally impossible, and second, you’re undermining the person that you just hired. It’s stupid.

Then I learned. It took me a while to learn it, and in a way, it’s also the – a part of that is delegation of task. A lot of tasking is to me how I have to be able to delegate them and to trust people that we hire for that, to trust them to actually do it. In a way, I was feeling like I can do it better, so why you just don’t do it? I do it, and it doesn’t work like that in a company, as you can understand – as you know very well, sorry. That was one of the biggest thing that happened and that I’ve been involved in.

Tanya:  That’s amazing. Through your time with Ticketbis, what was the single toughest moment that you can remember that you had to push through?

Ander:  There was a lot. I’m going to pick – when you start a company, it’s like a rollercoaster. There is awesome moments. We think it looks green and the pasture looks green. It’s amazing. Then there’s moments like everything is hell. Oh, my gosh, what are we doing here? There was lot of moments on both sides.

Toughest moment, I will say two. One of them was when we actually – in part of Ticketbis, one of the mistakes we make on the way, we make a lot of mistakes of course, was that we – in part of creating Ticketbis, I was basically like a [20:23], but for Euro-Latin America and Asia, that’s what we created. What we did in part is try to launch an Evenbrite for as well in the countries we were in. We were like, okay, look, it’s two founders, two of us. It’s very complimentary. I mean, it’s primary ticketing. They need primary ticket, and that is compliment that we stick on there. We can offer both things. There’s a lot of synergies. We think we can do it. Let’s just do it.

We start, actually, on parallel to Ticketbis launching this, and it was a huge mistake because it was a lot of distraction. My partner focused a lot more on that part of the business. I worked more with the Ticketbis side for a while. The other company didn’t do bad. Year or two, we’re doing around 6 million, 4 million. That 4 to 6 million, it was growing.

At some point, it was very funny. We went to see an investor, and we were talking about the group, the Ticketbis group, and we’ll have the primary as secondary. He was thinking about it. He said, “Okay, so show me the numbers for one. Show me the numbers for the other. Okay, so why the hell you are doing this? It doesn’t make any sense. Kill the [21:41]. I mean, you have a business that’s a rocket. Why are you losing time with this?” 

In the meeting, we were like, oh, no, but you don’t see blah, blah. Then we went to – we went back to our office. We start thinking, all right, shit, he’s not there. This doesn’t make sense, right? Focus in energy, resources. Let’s just keep it. From them on, a couple weeks later, we just kill it. It was hard because we have around 15 persons working over in that part of the business, but then we make some layoff. We put some other people on the other part of the business. We make some layoffs, and we just focus on Ticketbis. That was an interesting kind of moment.

Then the second toughest moment was when we sold the – we were selling the company. We sold the company to eBay, but there was a moment that – the [22:33] took forever. Since the moment start the process until we sold it was almost a year. It was several reasons. One of them being it was a composite structure. We were present in 40-something countries, a lot of local entities, local offices, etc., so it was a composite structure. When we were talking to – well, basically, it took a year.

What we didn’t want in the meantime is to raise capital. It was like, shit, we’re not going to raise any capital. We need to survive on whatever we have. We need to give to pressure. Keep drawing to show good numbers so eBay doesn’t pull off. That’s one, and second, we don’t want to raise money. Because whatever money we raise, we’re going to sell the company, so it’s stupid to raise money right now. It doesn’t make any sense.

Basically, we didn’t raise any money in that period. We didn’t do any rounds for the last year of the company. The company was almost break even when we sold the company, but it was still consuming some cash. Not too much, one million a year. Something like that the year that we sold. Still, we didn’t have the money. Actually, we barely made it. I remember the day that we announce the transaction. We have around two weeks of cash left in the bank. That was it.

Tanya:  Oh, my God!

Ander:  Yeah.

Tanya:  You must’ve been shitting your pants for this deal to go through.

Ander:  Oh, yeah, that’s a good way to put it, exactly.

Tanya:  Oh, my God, how – so what did you do to keep strong and not cave on your negotiations and really come out strong on this deal?

Ander:  Actually, it was very funny because it was delayed so much that, actually, we were able to increase a little bit the price in the end, a little bit, not too much. We got another two or three millions out of the deal. Oh, you have to give too much, so we need to increase the price up a little bit. 

Tanya:  Oh, my God! That’s amazing.

Ander:  It’s easy enough for our financial statement. Anyway, look there’s nothing you can do, so on our mind, what we thought is the business is doing very good. If needed, we’ll go and raise quickly some money. We’ll [24:43] note or something. I don’t think we’re going to go bankrupt, and we also have another levers, marketplace so sellers and buyers. We could always play on the sellers saying our new policy. Instead of paying in X time, we’re going to pay in this amount in 90 days or something. That will give us – it was something that you don’t want to play because, actually, are burning sellers, but if needed to, we had those levers to actually increase our life until we [25:13] around. In our mind, we were like, okay, we’re running out of cash, but we have options if needed for to pay. It was getting close to it, so we’re like, oh, shit, hopefully it happens very soon.

Tanya:  Oh, my God, big balls, Ander, seriously. Did you sleep?

Ander:  Thank you.

Tanya:  Did you sleep at all? 

Ander:  The things that over the time – that’s another funny story. At the beginning, when we start the company, I was always waking up at night. Like, yes, I think you can’t do it. The beginning of the first couple years, I didn’t sleep that well. Then what I realize is that there are – I told myself, look, have you done – at the end of the day, have you done everything you can for this? Yes. Is anything on your hands? No. Then go to bed. You can’t do anything else.

That really worked for me mentally to think, okay, is it anything you can do is in your hands? There is something is in your hand to – is it a big problem and thing that is in your hand to solve it? Do it. If there is nothing, it’s not in your hands, why to worry about it? It doesn’t make any sense for you to worry.

Tanya:  That’s something intuitive for you to know, but a lot of people spend a lot of time and a lot of energy thinking about the what ifs, which, like you said, it’s stupid. They can’t do anything about it.

Ander:  Exactly.

Tanya:  Really channeling your thought, that’s amazing. If you could rewind, so you’re 35. Go back to 25. What would be an advice that you would give yourself knowing what you know now.

Ander:  Oh, wow! What advice I will give myself? Don’t quit Morgan Stanley. No, I’ll be okay.

Tanya:  That’d be terrible advice. 

Ander:  No, I’m joking. Look, what I will say is that it’s going to be a hard journey, but you need to be – humility is fundamental. You need to delegate. You need to be able to – the most important thing is to be [27:12]. I didn’t see that at the beginning. I strongly believe that, as I say, and delegating [27:17] has changed completely. I changed the spectrum. If I see somebody that’s doing good things, I’m very happy to delegate. That’s changed completely. It wasn’t like that, and I struggled even the first two, three years with that.

I think I would have been a much better manager in the first two, three years if I would had been able to learn straightaway. I wasn’t. Currently, I will say I will give that advice. That was the thing that I struggled the most in the beginning.

Tanya:  Yeah, I mean, I struggle with that too. When we started our business ten years ago, it was – it’s just so hard. It’s a real hard thing, but that’s amazing that you got control of it. How do people get in touch with you if they want to say hi?

Ander:  Sure, I’m happy to give them my email. Should I give it now?

Tanya:  Yeah, give it.

Ander:  Yes, it’s ander.michelena@alliron.com. Probably, you can spell it. If not, probably people will not ever reach me, A-N-D-E-R-dot-M-I-C-H-E-L-E-N-A-@alliron, like it sounds, alliron.com.

Tanya:  Amazing.

Ander:  That’s what my company is.

Tanya:  Amazing, well, thank you so much for being with us on the Unmessable show and really love your story. It’s very inspiring.

Ander:  Thank you, Tanya. Thank you for inviting me, happy to be part of it. 

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Leadership: what works and what doesn’t from on an 11 year run as CEO of TNC.

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As a serial entrepreneur, Alex Mashinsky raised over $1 Billion in financing across his eight startups, generating over $3 Billion in exits and authored over 35 patents that cover aspects of Smart Grid, Ad Exchanges, Twitter, Skype, and Netflix. But his journey was everything but easy. Raised in the USSR — Ukraine, a communist country at the time, he saw first hand the struggle his parents went through. They both had jobs and incoming money but the lack of food was a constant worry. On many occasions, his family would wait in line for whatever food was available and by the time they got to the front, there would be nothing left. A common occurrence in communist countries. That was his first seven years of life.

Then his parents decided to migrate to Isreal, where the political environment continued to be tumultuous. Within the first six months, the Yom Kippur War (also known as the Arab-Israel War) was in full swing and the country was nearly overtaken by the opposition. To intensify things, national military service is mandatory for all Israeli citizens over the age of 18, and when the time came, Alex was called to duty. The things he saw and experienced were unimaginable, but he credits much of his perseverance and winning mindset to his early year experiences. He learned to trust himself– to figure things out and survive — two foundational skill sets you need as an entrepreneur.

At some point in his young life, he decided to come to New York, with just a few dollars in his pocket and never left. Since entering the US, he founded a total of eight startups including Groundlink, Transit Wireless (a $1 billion business that powers the wireless system in New York City’s 300 subway stations, bringing 4G and WiFi coverage to 8.5 million daily commuters), Governing Dynamics (a venture fund that invests in promising tech companies), and his current venture Celsius Network — a crypto wallet which pays interest on the top 20 blockchain coins.

Tune in to listen to Alex Mashinksy’s incredible entrepreneurial journey.

In this episode you will learn about:

• • • Resilience
    • Leadership
    • Leadership mistakes
    • Building a company
    • Exiting a company
    • Managing and scaling a team
    • Raising capital
    • Failing
    • Entrepreneurship

 

Alex is one of the inventors of VOIP (Voice Over IP) with a foundational patent dating back to 1994 and is now working on MOIP (Money Over IP) technology. Alex is a serial entrepreneur and founder of seven startups, raising more than $1 billion and exiting over $3 billion.

Alex founded two of New York City’s top 10 venture-backed exits since 2000: Arbinet, with a 2004 IPO that had a market capitalization of over $750 million; and Transit Wireless, valued at $1.2 billion.

Alex has received numerous awards for innovation, including being nominated twice by E&Y as ‘Entrepreneur of the Year’, in 2002 & 2011; Crain’s 2010 Top Entrepreneur; the prestigious 2000 Albert Einstein Technology medal; and the Technology Foresight Award for Innovation (presented in Geneva at Telecom 99).

As one of the pioneers of web-based exchanges, Alex authored over 35 patents that cover aspects of the Smart Grid, ad exchanges, Twitter, Skype, App Store, Netflix and many other popular web companies.

Connect with Alex Mashinsky:

• Website
• Twitter
• Linkedin

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Full Transcription:

Alex Mashinsky:  I think part of the secret for the disruption and the innovation that I’ve experienced my entire life is being – behaving like a kid, asking a lot of questions, and challenging all the perceived realities that most adults get used to pretty quickly. Growing up, I was born in communism in the Ukraine, was part of the USSR, going back to the USSR. My parents struggled. It was a very difficult environment in the late 60s, early 70s. Basically, we were worried about are we going to have any food to eat.

It wasn’t so much just because we weren’t making money; both of my parents had jobs. You would stand in line and many times they ran out of product by the time they got to you, so you didn’t know what you were bringing home every day. My parents would put me in one line and they would stand in another line. This abundance that we’re all used to on the Western world is something that I definitely recognize is not for granted. We have to appreciate every day that we have where you can just walk into a supermarket and get 100 of any item without even thinking about it.  

Tanya:  Yes, 2%, whole, almond milk, coconut milk. Yeah, like you say, there’s a bazillion choices.

Alex Mashinsky:  That was my first seven years as a child. Then my parents decided to immigrate to Israel, which was a good/bad decision. Obviously, completely different mentality, different environment. Six months after we landed there, they had Yom Kippur War. Then the entire country almost got overtaken by the enemies. It was really a very tumultuous upbringing. I then served in the military. I had a lot of different experiences going through this again communism, socialism, and then spending my last 30 years in capitalism.

Tanya:  I can’t even imagine how your upbringing and the whole messing of products, and that am I going to eat today scarcity, and then moving to Israel, and the fights, and the danger, and then military. How do you think that affected and influenced who you are today?

Alex Mashinsky:  Just to give you one example of a story right. When you leave the USSR, they take away your passport. They give you this one-time visa to leave and never come back. You can’t leave with any of the assets because assets all belong to the communist revolution. I had two toys that were my entire possessions. At the border when we were just leaving the Ukraine crossing over to Austria, we were on a train to Vienna, the Russian guard grabs my toys and says, “These are Russian toys. You don’t deserve these.” My entire possessions just got taken away from me.

These visceral experiences, I think especially when you’re a child definitely help structure who you are. I think I mentioned I have six kids. I definitely challenge them as much as I can to get them out of their comfort zone and try to get them to appreciate all of the things that they have every day.  

As you know, everybody has to join the military. I spent three years there. Definitely again, it’s an amazing opportunity for young people to take a lot of responsibility very early. Israel is considered a startup nation partially because of that. Because you can be 18 or 19 years old and you can basically be a commander of a unit and go and make life, death decisions that affect not just you, but also other people. It’s like adding carbon to steel to make steel. The more you add, the better. Coming to the United States and I already showed up with a lot of great skills that really helped me be successful in the rest of my career.

Tanya:  Yeah, I’m sure. What were some of the things in looking back at your time with the military which I’m sure you had some pretty hairy experiences, what were some of the things that you took away from that experience that you learned?

Alex Mashinsky:  One of the critical moments was I was in Lebanon doing the war over there. That was ’84 through ’87, 1984 through 1987. I wasn’t there the entire period of time, but that’s my time in the military. They stationed me in Lebanon to be in the communications core.

Basically, they didn’t have enough people. They couldn’t train me. I was sitting on top of a mountain with all this communication gear making sure that everybody could communicate. Just imagine if you have a group of soldiers that’s fighting somewhere and they can’t communicate with command. They forgot to train me on the equipment. 

Of course, it always happens to me, the head commander of the entire – I don’t know what the English expression but is like a very senior guy in the military. Obviously, wanted to get in touch with someone and I had no clue how to do that. All of us face these types of moments where you are tested. Some of us buckle under pressure and some of us thrive and become the best we can be. I don’t know why; I can’t explain what makes me be that way, but I realized that when I’m under – the higher the pressure, the more I actually perform, better I perform.

If I have to come up with an idea or solve a problem, I usually create an artificial barrier or put myself in the room with people where I have to answer these things right away, and the answer just shows up from somewhere. On that peak of that mountain, even though I wasn’t trained on the equipment or anything else, instead of just running away, or sweating, or getting all nervous or whatever, I started playing with equipment and figured it out. I still got in trouble because I wasn’t supposed to be there in the first place, but at least everybody got to connect and talk to each other even if it was five minutes later. 

Through that experience and others like it, you get to trust yourself. You discover yourself. You open up the origami further and dig deeper and understand who you are because the entire journey of life is just self-exploration. The more we get to know ourselves, the more we can find the things that we can do better than anyone else. That’s how we become successful. If we do the things we’re not the best at, then our chances of being the best in the world at it are pretty low.     

Tanya:  No, absolutely. At what age did you begin to realize that you had a knack for building things?   

Alex Mashinsky:  I’ve been tinkering with things from my early teens. I would skip school and run to the junkyards and buy all kinds of old equipment or military equipment. I had a room full of gear that I was just tinkering with. My mom would pop her head in the morning and ask me if I’m going to school. I would usually say no. She was like fine. She gave me the freedom to experiment. For me, it worked out, but I’m sure – I’m not sure if I would allow that to my own kids. My parents were extremely supportive.

I remember my dad – I think I was 14 and my dad pulled me to a sit down conversation and said, listen, I don’t know what you’re doing with all this stuff, but I don’t want you to come back to me 10 years from now and tell me how I did not force you to go to school and all that stuff. You take responsibility for the rest of your life, fine; you can do whatever you want. That was a pivotal moment where I had to really think about this and go and say gosh, do I really know what I’m doing or I’m going to be sorry and end up working cleaning streets or something?

I accumulated a lot of technical skills which a lot of kids do these days just by programming and playing with computers. Back then, having your own computer was $10 or $20,000. That was not an option. Salaries in Israel are – you make that in a year. I think I was lucky enough to again learn a lot of these skills using equipment that I bought really cheap from junkyards and then converting that skillset to innovating in different things related to hardware electronics, or software, or system architecture and things like that. 

Tanya:  As you’re sharing this story, I’m so – I’m still stuck with at 14, you realized the impact that your father’s comment could potentially have 10 years later. I don’t think that I would have that level of awareness if my parents had that conversation with me at 14. That’s impressive.

Alex Mashinsky:  I definitely lacked in other skills, so it’s not like I had perfect social skills or other skills. I think all of us – I look at my kids, each one of them has a different set of skills where they’re good at one thing and not so good at others. As parents, normally we work really hard to make sure that they are rounded out and they’re good at everything.

Life is not necessarily that. I think life is all about becoming the best in the world at something. All of us have that possibility. Each one of us is a unique cocktail of genes that has never been created before and will never exist again. The opportunity is really to find what is that one thing that you can do better than anyone else.

It’s there, but it’s really hard to find because the – and you have to do it through experimentation. You have to constantly test things, experiment with things, and find the things that you’re good at, and find the things you are not good at. Put all your efforts on the few things that you think you can do better than anyone else. Unfortunately, our educational system and our society is not designed for that. They’re designed to make sure that we’re good or average at many things.   

Tanya:  Yes, that’s true. What is the one thing that you discovered that you were really good at?

Alex Mashinsky:  I can see around corners. I don’t know how it works, but for me, it’s obvious from a technological standpoint what the future looks like. I don’t understand why everybody else doesn’t live in the future already. I’m usually 5 or 10 years ahead of where things are. What I did my entire life – I did eight companies. Celsius is my eighth company. Every one of my companies I started was trying to convince others that this is what the future looks like and disrupting this or that industry because time has come and the future is here.   

Tanya:  Yes, and actually, you’ve had to step in on a few ventures and self-fund because you had issues raising capital at the time. You really had to put your own capital on the line.

Alex Mashinsky:  Yeah, every venture I had to put my own capital. I can tell you that when I say okay, I raised over a billion dollars from venture and private equity and so on and had three billion in exit, people think, oh, he can raise money like just a clicking. He twists his fingers and the money just shows up. I had to pitch almost every company at least 200 times, so 200 people said no to me. Having the conviction of saying – understanding that they’re wrong and you’re right and keep going in it – and not all of them obviously were huge successes, but the point is that almost all of them I was right on the vision even though I might not have executed better than my competitors. 

One great example is I started a company called GroundLink. That was in 2003. I basically told everybody look, in the future, everybody is going to have a phone with a GPS. You’ll be able to order transportation on demand. Everybody could become a driver. I built that company. We just forgot to subsidize every ride, lose money on every ride. I actually built a profitable company and Uber came and just ate our lunch.

When Uber was just in San Francisco, we were serving 5,000 airports around the world. The company had whatever, $70 million in revenues and was profitable. We were right on the strategy. We were right on the technology. We were right on hiring the right team. We were right on raising the money, but we were wrong on the business model. We tried to build a profitable company where our competitors went to – for the land grab and raised whatever $14 billion dollars and lost $12 billion in the process subsidizing rides. 

It was a very visceral experience for me because this was my I think sixth company, so I already had the whatever billions in exits. I meet with exactly the same investors that the Uber founders meet with. Travis Kalanick was a – who at the time, was the CEO of Uber, lost all of the money for all of his investors 10 times in a row before Uber.

When I sat with Bill Gurley and it was basically a decision for them to invest either in – Bill Gurley from Benchmark. They were about to decide are they investing in GroundLink or are they investing in Uber. I couldn’t even imagine a scenario where somehow Travis would get the funding and I won’t because I was a successful serial entrepreneur. I’ve made 100x for my investors on Arbinet and other companies that I founded and here was a guy that lost all the money in all of his startups. Bill obviously did not select GroundLink.

I went close to a clinical depression after that just by basically completely – it’s like Ali versus what’s his name where he gets knocked out on the 10th round of something and he was supposed to be the winner by a long shot. It takes a while to rebuild yourself, and rebuild the self-confidence, and go and swing at the next opportunity because this is all – this game that I’m in is all or nothing. There’s no room for a second or third winner.    

Tanya:  If you look at, well, Lift was a second winner in the ride-sharing space at least. Then several others came: Via, Juno. Why do you think Bill choose Uber or Travis? 

Alex Mashinsky:  For me, a winner is somebody who has a sustainable business. I don’t think Lift or Juno have sustainable businesses. Lift had close to a billion in losses on two billion in revenues. We are in a unique environment that’s in a time window where that is acceptable, but I can assure you that is not a sustainable business model. 

Tanya:  Oh, yes; I so agree with you. People are going to get spanked and then lose their money. It’s happened, but it’s somehow still acceptable. I agree. It’s going to –

Alex Mashinsky:  I think society in general is not necessarily winning here because the fact that I live in New York City, the fact that there’s 150,000 extra vehicles circling in Manhattan, and the average speed in Manhattan has dropped drastically. The city publishes a speed at which traffic moves around the city. For the last 10 years since these guys basically loaded up the city with cars, it slowed down by 50%. We’re not creating any efficiency. All we have is a lot of spoiled brats sitting in their own vehicle sitting in traffic. Less people use public transportation, getting there takes longer. We haven’t solved the problem; we just created a different problem.

If you look at all of my startups, I’m always targeting a win-win scenario. Arbinet built voice over IP; three and a half million people use it every day. They used to pay $3.00 a minute and now they pay nothing. We’re using voice over IP right now as we speak. These are win-win scenarios. 

Or putting wireless on the subway. Eight million people every day could not contact anyone in case of an emergency or check their phones or anything; now the service is free. These are win-win scenarios where we’re creating value out of nothing and it makes the world a better place. Celsius is the same way. It’s enabling everybody in the planet to earn interest where the banks basically don’t pay anything. 

I think going back to your question about Bill Gurley, Bill – I think in general, the San Francisco community is a very tight-knit community. Most investors invest in companies that are 5 to 20 minutes away. We were New York-based. Beyond that, Uber was definitely pushing the envelope being a pure play. They were just a mobile app. There was no customer service. There was no call. There’s was nothing. 

There wasn’t anybody you could talk to if you wanted to – if you had a problem. We thought that was pushing it too hard. You could call us. You could email us. You can send us an SMS and make a reservation. It was a full-stop service solution that was targeting a broader set of the population and not necessarily Millennials who need to get home from a bar or whatever. 

I think the pure play had a big part in it. The reason Uber had a very high adoption rate is because when Lift showed up in San Francisco, they cut their rates. They realized that the supply and demand curve was so aggressive. It moved up so quickly that – very quickly that just Uber was bigger than the entire taxi industry in San Francisco.

 There was a pent-up demand that no one realized was there. We realized that we just did not – we didn’t think that subsidizing rates – because our slogan was happy drivers equals happy customers. Meaning if we create more income for drivers, the quality and everything will be better. As we all know, anyone who works for Uber and taxi and everybody else is making less today than they did 10 years ago because it’s a race to the bottom. 

Tanya:  Yes, so competitive.

Alex Mashinsky:  As far as pricing.

Tanya:  You mentioned that after this whole thing went down and the capital from Benchmark went to Uber, you went through a really dark period. How did you rebuild yourself? What was that process?

Alex Mashinsky:  I married an amazing woman.

Tanya:  That’s a great start.

Alex Mashinsky:  Who basically looked at me and said what the heck are you talking about? She always has complements for me. I’m not going to repeat them. She was basically like I know your skillset. I know what you can do. It doesn’t matter what happened yesterday. You pick yourself, and you get up, and you go in and do something even bigger. That’s how you get back.

It took me a few months. She had to say it many times because depression is basically just this – just like a dark cloud that just hangs over your head. It doesn’t go away. You can move to the left, to the right; it just follows you everywhere. You have to really shake it off. The only way you do that is by rebuilding yourself and rebuilding your trust in yourself and so on.

Because Uber copied everything we did. They copied the business model. We never owned a single vehicle. All of our drivers were independent contractors. We had the first app in the App Store, the first app on Android store. These guys really copied us but got there faster, better, cheaper. It was a really –  

Tanya:  A kick in the balls.

Alex Mashinsky:  Uber is the fastest valued creation in history. It’s a company that got to $100 billion faster than any other company in history. I was there whatever, five years I had Uber. I started in 2003; Uber started in 2008, 2009. We had an ample head start and we still managed to not win the market. 

Tanya:  The race. You’ve won many other races. I’m going to have to side on your wife’s side on this one. You have a pretty good batting average.

Alex Mashinsky:  Yeah, it’s a good – it’s a great batting average; I agree. I consider myself like a – I compare myself to a champion. When you’re a champion, you’re competing on the 100-meter race. It doesn’t matter if you came second, or third, or seventh.

Tanya:  It wasn’t first.

Alex Mashinsky:  It’s all about being the first. Again, we were so ahead of our time that we had everything; we had all the tools in our hands to win this. We just missed that.

Because I went back to my investors in 2011 and told them, look, we need to start subsidizing. Uber didn’t get out of San Francisco until the end of 2010. I said, “Look, if they come to New York, we’re going to lose this race.” They’re like, “No, you’re profitable.  They can’t subsidize it forever.” That’s where I should have just put my foot down and just really pushed that agenda and forcing the investors or go and do something else because I ended up leaving anyway in 2011 because I thought it was a losing proposition. It was a very painful and dark period, yes.

Tanya:  Usually, those periods come with tremendous lessons. It sounds like you’ve highsight been able to pull out some really good nuggets there. In terms of your – well, first of all, of the eight businesses that you’ve created, how many people have you employed approximately? 

Alex Mashinsky:  Thousands; I ran Novatel Wireless. It’s a public company, so that had 1,400 employees. Arbinet had probably like 350 people. GroundLink had also about 300 people, still has about 300 people.

I don’t like it when it’s already hundreds or thousands of people. You can’t move as fast. I like the early stage, the 0 to 200 people. I would say that’s what I enjoy the most: building, solving problems, moving as fast as possible, trailblazing. Those are the things that I think are where I excel.

I usually hand off the company to a different CEO and go and do the next thing. Everybody excels in a different – if you’re a good CEO of a public company, your job is just to squeeze as much as possible out of the existing infrastructure. There’s people that grow the cow and there are people who milk the cow. It’s not the same set of people.   

Tanya:  No, it isn’t. It’s a totally different skill set, which is very common.

Alex Mashinsky:  Then there are people who come and kill the cow.

Tanya:  There’s also a lot of vegetarians out there. Okay, so you’ve employed literally thousands of people which takes something from a leadership perspective. When you’re leading a company, one of the hardest things to do is manage and lead people. How have you evolved over these eight companies in your leadership style? What have you learned?

Alex Mashinsky:  Yeah, that’s a great question. I don’t think they really teach you this in school, or in college, or management.

Tanya:  No, I’m sure they don’t.

Alex Mashinsky:  It also has so much to do with who you are, your skillset. Again, the better you understand what you’re good at and what you’re bad at, the more you will bring in people to cover your weak points. For me personally, I’m not a detail-oriented guy. I’m not the finance guy. I’m not even the marketing guy.

I know what I do well, and I grab those things, and I do them myself, but I surround myself in most cases with people – and I learned this over time obviously. I didn’t learn that overnight. I surround myself with people who are much me stronger than me, much better than me in those areas. Somebody has to be three times better than me. If you hire somebody who is just a little bit better than you, then you didn’t really solve any of your weaknesses. 

The problem usually is that when you have a young company or just an idea, it’s very difficult to bring great people to come and drop their job or whatever else they’re doing and come and join you and go and change the world. Many times, you have to go through two or three cycles where you effectively upgrade the team and you move the people who – it’s not that you get rid of these people who came early, but you move them to other roles as your bringing and adding more skills to the company. Now, that I’ve done it whatever, seven or eight times, I almost do it my sleep. The first few times, it was just a nightmare because I did think that I was better than anyone at any and everything. Obviously, that was just a recipe for disaster.

Sometimes you need to be lucky. Going back to Uber, doing it right after the recession, 2009 through 2019, they have an exceptional 10 years where everybody just threw as much money at them as possible. If they’d done that just a few years earlier, I guarantee you they would have been a complete failure because being seen in a limo in 2008 was not a good scene. If you lived through that period, especially in New York, people frowned at you for driving in limousines. All Uber did is took a limo and priced it in the same price of the taxi.

I think timing has a lot to do with it. Sometimes when you’re right on timing, it covers for a lot of other problems as we’ve seen they had internally. With Celsius Network, we’re really taking on the banks. We’re basically looking at this whole idea that banks take your money. They pay you nothing for it. They lend it to your neighbor – they lend your money to your neighbor and charge them 25% on their credit card to make it 95% of the value that you made – that they made on your money. That’s just a ridiculous idea.

We flipped it on its head and committed to pay our depositors 80% of what we make instead of the bank keeping 80% of what they make. In nine months, we accumulated $135 million dollars in deposits and did over a billion in loans. It’s growing phenomenally well. Here again, I’m assembling a team that can scale the company and move equity and brings a great skill set. We just hired a CFO this week, for example, who came from a different company and brings an amazing set of skills. Much better than my definitely; three times better than me.

As long as you do – you fill the holes with this type of management, and everybody really believes the vision, and they’re there working hard not because you’re demanding it but because they’re passionate, and they adopt the idea and the passion about making the world the better place, then work is fun. I don’t feel like I work any day. I haven’t had a day – I think maybe the GroundLink days, but not since GroundLink where I woke up and I was like – I felt miserable going to work. Life is short and you should enjoy every day. This is my way of enjoying going through the journey

Tanya:  This is your self-expression. To have started eight companies, it’s who you are. Actually, I think I read somewhere that you tried retirement, but that didn’t bode so well?

Alex Mashinsky:  That was horrible. 

Tanya:  What happened there? Couldn’t relax?

Alex Mashinsky:  Both me and my wife, we don’t have an off switch. My wife, Krissy Mashinsky, she’s the President of Urban Outfitters, Anthropologie, and Free People. She runs all the wholesale for this. It’s a public company with 17,000 employees. She doesn’t have an off switch either. We tried to take some time off and whatever and we were both miserable. It was like what were we thinking. 

Tanya:  Yeah, no, I totally get it. After the birth of my twins, I took some time off because my twins had some pretty severe medical issues; now, they’re fine. I could not wait to come back to work. I get you. It’s almost like you need work to relax and enjoy life.

Alex Mashinsky:  The brain is like a muscle; if you don’t work it, it just withers away. Too much vacation or too much off-time is definitely not good for you just like too much work is not good for you. I was joking with you before we started this recording that I don’t have any vices. I don’t have time for vices. When you’re running around, you’re – and you’re trying to do or be the best you can be, that does not leave you anymore – any time for – 

Tanya:  To mess around, yeah. What’s your framework to keep pushing yourself to grow?

Alex Mashinsky:  You have to start with a big opportunity right. A lot of times what happens is that some people stumble on it by chance. Again, going back to the Uber idea or the GroundLink idea, our vision was not let’s make taxis more comfortable; our vision was that Millennials and Gen-Xs are just not going to own a car. Everybody is just going to share these vehicles instead of owning vehicles. Now, they say everybody is talking about self-driving vehicles and all that stuff.

Once in a while, the world goes through a transition, a transformation. If you’re there at the right time and you understand what it’s going to look like, then you can build the future now. You can build the future that’s going to be here 10 years from now. You can start it now because it takes a long time to build these things.

For example, with Celsius Network, we think that the future is a financial institution that acts in our best interest. Now, that sounds ridiculous, but we see banks, and brokerages, and insurance companies do not act in our best interest. When you think about this giant wave, that tsunami of decentralization that we’re about to be washed by, and blockchain, and all this innovation related to cryptocurrencies and so on, then you can see very easily how in the future, the power is going to be taken away from the banks and be given back to the people.

The reason why I’m so confident about it is because I did that with voice over IP. We’re going to go in from voice over IP to money over IP. With voice over IP, I came and I said, hey, voice is going to be free. It’s going to run on the internet. It’s going to be pier to pier.

The entire internet ran on the phone networks. It was ridiculous to think to yourself that how can you put voice on the internet if the internet runs on the voice network. It was a dial-up internet back in ’94 and ’95 when I wrote the patents and built the first gateways. You have to leap into the future. You have to understand that the internet is going to be a thousand times bigger than the voice network. The entire voice network just becomes an application on the internet. 

We’re going through the same transition today. We’re going through the process in which the entire financial infrastructure that we use every day is going to be replaced by a blockchain based pier to pier system. All the toll collectors and the guys who basically control our lives are going to be replaced with people who act in our best interest.

We just building that today. There’s enough people who are willing to jump in and say yes this is – I believe that this is in my best interest. I’m willing to take my money from the bank and deposit it with Celsius. We’re actually shocked at how many people are willing to do that. We beat our own projections every month, so it’s an amazing growth story.   

Tanya:  It makes sense. You are aligning incentives with your customers which eventually people will clue into. How can it not jive?

Alex Mashinsky:  I know, but the banking is 700 years old. No one has ever turned around and said I’m going to give my depositors 80% of what we make with our money. The idea is very simple, but it’s shocking that no one has done that. Yes, there are technological limitations, and there are regulatory limitations, but no one has tried to build that.

Many times, the simpler the idea, the more powerful it is. Here, the abuse that we all go through – and in Europe right now, there is $10 trillion worth of negative rates. Meaning, people took their money, $10 trillion with a T, deposited in banks, and they paid the banks to take their money. That’s just ludicrous. 

Tanya:  Yeah, that is ludicrous.

Alex Mashinsky:  How can we get to that point? That’s like plucking the chicken one feather at a time. 

Tanya:  It’s torture.

Alex Mashinsky:  It took 100 years. I came to this country 30 years ago and I used to get 7% by just depositing money with Citibank. Over time, banks just paid us less and less and less and no one is screaming. No one is mad as hell and is not going to take this anymore. I’m carrying Satoshi Nakamoto’s flag here taking advantage of this blockchain revolution and applying it to something that we all know is a problem, but we have not really done anything about it.

Tanya:  Yeah, well, the blockchain technology has a lot of evolution and reiterations to go through. I think you’re right in Gen-X, Gen-Y, especially really don’t have a lot of trust in banks for all the reasons that you mentioned. People have a short memory as well. Maybe one of the reasons that we don’t question why things are the way that they are is because they’ve been like that for so long, but that doesn’t make them right.

Alex Mashinsky:  That’s correct, yes.

Tanya:  Okay, last question: if you could rewind 10 years and give yourself one piece of advice, what would that be?

Alex Mashinsky:  Ten years, so that takes us to 2009.

Tanya:  Yes, right in the midst of the – actually or before the Uber.

Alex Mashinsky:  It was in the midst of it already, yes. Wow, that’s a hard question. I have to really think hard about it. In 2009, there was still definitely time to win this. It’s funny because my wife – when Uber came to New York and my kids starting using Uber instead of GroundLink and I realized that was the end when your own kids don’t use dad’s app.

Tanya:  That’s a stinger.

Alex Mashinsky:  She just looked at me and she said, go get a job at Uber. It sounds obvious now, but back then, it was almost like go work with the devil.

Tanya: Yeah, no, forget it.

Alex Mashinsky:  Of course, my wife was probably right. I should have gone and teamed up with – leave my own creation and gone and teamed with the enemy. I probably would have done very well in there, but that was not a conceivable idea or a possibility when you put your heart, and tears, and sweat into this thing for whatever, six or seven years, and suddenly, to turn around and to go to side with the other side. That’s probably a big mistake.

I probably should have been more aggressive rising money and convincing my board and my investors that we had to be more aggressive in this space. These are life lessons that are – I’m not sure I would have – if this happened to me right now with Celsius Network, I’m not sure if I’ve learned that lesson. As a founder, it’s extremely painful, extremely difficult for you to just jump the fence and go and do something else.

My wife is more of an executive in the launch company. Somehow, they do that extremely well. They can jump from one company to another and just go – keep running the next day and not have any feelings or any pain leaving one organization and joining the other. In my DNA, in my core, it’s definitely something that’s going to be – it’s a very hard lesson for me to learn. 

Tanya:  That’s a really great lesson. Every business is like a child. You’ve had on top of your six human children, you’ve had eight businesses which is – and you put your heart and soul, so I could totally get that. Okay, amazing. If people want to check in with you and reach out, how do they get in touch with you?

Alex Mashinsky:  I’m still old-school email, alex@mashinsky.com, my last name. Also, you can reach out to me on Linked In or check out celsius.network. There’s ways to contact me through their website. Go and make the world a better place.  

Tanya:  Amazing; well, thank you so much, Alex. It’s been so amazing to have you on this show.

Alex Mashinsky:  Thanks for having me. 

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First-time founder and Harvard grad Carlos Reines, who was nominated by the World Economic Forum as Young Global Leader opens up about his tragic childhood accident and how that shaped his life-work today through RubiconMD — an eConsult platform that connects clinicians to top specialists. Now serving over 5,000 primary care physicians in 37 States, RubiconMD has saved over 2.5 Million days of patients waiting for specialist consults, which is almost 7,000 years.

Carlos talks about his struggles early-on when he launched RubiconMD and how, after many iterations, he designed a dialed-in hiring process to assemble a top tier team that not only has individuals with world-caliber credentials but that act as a team and feel connected to the mission of the company– democratizing and improving access to quality healthcare.

In this episode you will learn about:

• • • Healthcare innovation
    • Leadership
    • Leadership Mistakes
    • Building a startup
    • Managing and scaling a team
    • Raising capital
    • Company Culture
    • Effective Feedback

 

About Carlos Reines:

Carlos is one of the cofounders at RubiconMD. The company was founded in 2013 with a driving vision of democratizing medical expertise so that providers can offer every patient the care they deserve.

Originally from Spain, he’s passionate about leveraging technology to drive change in healthcare.

Prior to RubiconMD, Carlos led a division at Telefonica, one of the largest telecom companies in the world. He began his career at Siemens Healthcare.

He earned Masters’ in both Bioengineering and Telecom Management in Madrid, and an MBA from Harvard.

Connect with Carlos Reines:

Linkedin
Twitter
Website

* * *

Full Transcription:

Carlos:  I think I always had an easy one because my dad’s name is Carlos as well. I don’t think they had to break that too much.

Tanya:  That’s great, so they followed the wonderful Spanish tradition on naming. 

Carlos:  Yeah, absolutely.

Tanya:  That’s Carlos Reines, Harvard grad and entrepreneur who raised $20 million for his startup RubiconMD, an eConsult platform that connects clinicians to top specialists. Now serving over 5,000 primary care physicians in 37 states in the US, RubiconMD has saved over 2.5 million days of patients waiting for specialist consults, which turns out to be almost 7,000 years.

Carlos:  I grew up in Madrid. Actually, all my family is in Madrid. I was born and raised there, lived in the center of the city for the first few years, and then we went to the suburbs when I was about 5 or 6. I’ve really been in Madrid most of my life. When I was 22 is the first time that I went to study abroad. Through different work experiences and educational experiences, I’ve ended up spending time in the Netherlands, in Germany, and obviously, a lot of time in the US.

Tanya:  If you were to describe yourself as a kid, how would you describe yourself?

Carlos:  I was the only child, only nephew, only me, no cousins, for ten years. My mother is the oldest of six. On my dad’s side, his uncle never had children, so for about ten years, I was there by myself. I was getting a lot of love from the entire family.

Tanya:  I can imagine. 

Carlos:  At the same time, I was dying to get some folks around. I wanted to have cousins. I wanted to have siblings. In Spain, there is a big tradition in Christmas that the Three Magic Kings will bring you games and toys, and when I was a kid and I would write my letter, I would never ask for any games or toys. I just wanted to have a brother or a sister. I wanted to have that for a long time. It never happened, so I grew up as an only child. At some point, my parents had friends that lived outside of Madrid, and their son moved to Madrid for college. He was about five years older than I am, and he went to live with us. For three years, all of us had – I had an older brother, and it was an awesome experience.

Tanya:  I can imagine. After all that time, it must’ve felt great to have company. 

Carlos:  Absolutely.

Tanya:  Something important happened when you were a child.

Carlos:  When I was 8, I was playing on the street with other kids. We were playing with slingshots. It was just kids who are the street, and I was hiding behind the car. Unfortunately, somebody was incredibly accurate, and they hit me in the eye. That was actually a pretty severe accident that triggered three very complex surgeries. Probably over the span of two years, I lived half of the time either admitted to the hospital or sitting in an ophthalmologist office. I couldn’t go out. I couldn’t play with other kids. I had to be incredibly diligent with my eye drops. 

That was actually very tough. As an 8-year-old, all you want to do is to be outside and then play and not have to worry about anything, and I had to go through a lot of complications. Eventually, I had the surgery where the ophthalmologist said the best thing we can do is stabilize the eye, and this is something that you should reevaluate whether you can have more surgeries or there is any path forward maybe in 15 or 20 years as an adult. That was between age 8 and age 10, roughly. 

Tanya:  Wow! That’s brutal. How did that influence who you are today and shape your outlook on life?

Carlos:  I think it influenced me in many ways. I wish I didn’t have that accident, but at the same time, I’m very grateful for all the things that I’ve learned out of that experience. I think mostly on – probably on three different levels. The first is what I do now was definitely influenced by what happened to me, right? I decided to become a healthcare technology entrepreneur, and I started RubiconMD. This is, obviously, years later. This is only a few years ago, but out of that experience, I grew the motivation to want to fix healthcare because I had experienced myself just of not having access to the right care at the right time. I knew that somebody had to fix it. Eventually, that’s where I gained the strength to go pursue this mission that I’m working on now, so one was in shaping what I wanted to do.

I think, two, I’m also really grateful for a lot of the strong relationships that I’ve been able to develop, very close with really everyone in my family, so at the time of the accident, I felt incredibly supported. There wasn’t a day where I was at the hospital and I didn’t have either my parents, my uncle, my aunt, someone sitting with me. I think that is reflected in now it’s 20 years later or 20 or 30 years later; I have incredibly strong relationships with them, with everyone in my family and also friendships. I remember when this happened, and I had to go back to school. I couldn’t go out and play outside. I had to stay in the classroom, and I had to use my drops. One of my friends at the time would stay with me every single break. Instead of going out to play soccer or whatnot, stayed indoors playing with me. He was the one putting the drops in my eyes. Again, almost 30 years later, he’s one of my best friends now. I think of a lot of those relationships really solidified, and those are really priceless.

Tanya:  How did you handle the person, the child that caused the accident?

Carlos:  I didn’t, really. This happened when I was 8. At 8 years old, you barely understand what’s going on, what’s happening. I don’t think I ever saw that kid ever again or spoke to him again. Not because I didn’t want to. It’s just the following two years I was, basically, at hospitals and doctors’ offices, and after that, we never had an opportunity to reconnect. I think one thing that’s interesting is that you really don’t understand what’s going on, and I think, for me, it was probably, I don’t know, maybe five years later or so when I was growing up, when I was going through adolescence that I started to realize that I had gone through a pretty serious accident and understand a little bit of the implications. It was probably more difficult in those years than it was originally. As a kid, I was just cruising through life.

Tanya:  Yeah, I can imagine. Do you feel affected in any way by what happened to you today, or what is going on with your eye?

Carlos:  No, not really. The good news is that we are born with two eyes, so despite having pretty limited or not really any useful vision in that left eye, I can do everything normally. It didn’t stop me from being able to drive, being able to play sports, or have a perfectly normal life. I don’t think it’s put any restrictions into anything that I do, but I do think that I’ve developed a lot of capabilities that I probably wouldn’t have developed if I didn’t go through this. I think a lot of that is pretty well reflected and really helpful as I’m going through the entrepreneurship journey, which is a brutal experience. A lot of the things that I learned at the time, being able to work through challenges, jump through hoops, or remove any hurdles that are put in your way, I think the perseverance that you need as an entrepreneur, I think I found a lot of that in having to figure out life going through a lot of the challenges as a kid.

Tanya:  Yeah, I mean, that’s unquestionable that your accident was the training ground for your career. Not only as an entrepreneur, but in healthcare, you were firsthand affected by the problems that you’re actually trying to solve today. How did you get into your entrepreneurial journey?

Carlos:  It really started in 2012. Up until that time or before that, I was in Madrid. I was working for Telefonica, which is one of the largest telecos in the world, and I actually had a really cool job. I was part of this corporate unit. It was called the Global Chief Technology Office, and we would do technology projects across all of 25 countries where the company operates. We would be standardized in best practices, technology guidelines, choosing solutions; that everybody rolls out the same technology and be more effective. I got to interact with, really, all the areas of the business.

Then a friend convinced me to apply to business school and to apply to schools in the US, and in 2012, I found myself packing and moving to Boston to start business school at Harvard. Going in, I knew I had – so before that, I had worked for Siemens and Telefonica, two massive companies. I thought this is the perfect transition to try something else, to go early stage. Why not, to start something myself? I really spent my first year in business school going to a lot of the entrepreneurship events in Cambridge. There are startup weekends and hackathons virtually every week.

By going to a lot of those, eventually, in March of 2013, I met my co-founder, Gil, at a Hacking Medicine event at MIT where he was pitching the idea. He was also inspired by personal experience where his grandmother had a brain tumor. She was from Barbados, and she had to travel to Boston for surgery and then for the postop care. He was also frustrated with the limitations of accessing care, and the two of us worked together through that weekend. We found that this is an idea that made a lot of sense. We were excited about that we could execute, and on top of that, we got along really well. We had very complimentary styles, and we decided to start a company together.

Tanya:  Wow! That’s RubiconMD.

Carlos:  That’s RubiconMD, yeah. Basically, what we do – so the two toughest problems in healthcare in the US – probably number one is, obviously, the fact healthcare is an incredibly expensive sector with almost 20% of the GDP spent in healthcare. That’s twice as much as any other advanced country of their healthcare expenditure relative to the GDP with it actually achieving better population health metrics, and then on top of that, you have about half of the country who really struggle with access to care. We quantified that more than 50% of the population in the US have real challenges accessing a specialist, and that’s real unfortunate. We decided to tackle a dual problem by letting primary care clinicians submit electronic consults to specialists, so whenever a PCP has a case that’s a bit more complex, what they do is they access our platform. They type up a brief description of other patients. They ask a question, and they send it to a specialty. We have a top specialist review and get back to them with their impressions and recommendations in a matter of hours, and that allows the primary care clinician to make a much more informed decision and diagnosis, treatment plan, and next steps for the patient.

Tanya:  I mean, I think that, first of all, what you’re doing at RubiconMD is pretty amazing. I can’t tell you how many times I went to a pediatrician or a general practitioner and said what’s going on here? They send me to God knows who, and it takes time to get the appointment. You’re looking at months before you even get to loop back with the primary care physician. It’s frustrating, so that’s amazing. How many clinicians and primary care physicians do you serve?

Carlos:  Oh, we must have probably about 5,000 clinicians across the country. We are present in 37 states working really with all flavors of primary care. One thing that’s fascinating is that you just share your experience. It was frustrating that you probably wasted time and money and things that were not really necessary, but one thing is that you could afford it. Even if it was painful, you had access to care. About 60% of what we do is safety-net populations, uninsured, undocumented, Medicaid patients that are looking at wait times measured probably in months if not years. One of the things that’s really fascinating of what we do is that we are bridging that access gap for the most underinsured populations who are now through their primary care clinician getting access to the expertise of some of the best specialists in the country, and that’s where we are executing on our mission of democratizing access to medical expertise.

Tanya:  I love it. That’s amazing. How big is your team now? 

Carlos:  We are about 45 or 50 people, most of us headquartered in New York City. Then we have West Coast office in San Francisco, and we also have a few remote engineers based in Spain.

Tanya:  Amazing, all the key locations. I just want to shift gears a little bit. In terms of what it took to actually begin the company – well, first, what do you do at Rubicon? What’s your job? 

Carlos:  As the president and co-founder, I oversee the delivery side of things, so I work very closely with the product team helping inform a lot of the road map and future decisions with the input that I get from the market. I work closely with the operations team; help them build for scale. I work closely with the implementation customer success teams, and they are supported by what we called user engagement. It’s, basically, we’ve taken the approach in a loop – all the learnings that traditional tech companies have in their growth hacking teams and adapted it to bring it to healthcare so that we could do rapid experimentation and learning around the things that work for clinician engagement with technology. Those are the teams that I oversee. I think, as a founder, I can’t get out of being on the road a lot of the time, so probably a good portion of my time is still dedicated to business development and checking in with our partners.

Tanya:  Okay, yes, and aside your actual job, you have a bazillion other jobs. Your job is to just make the company successful, whatever it takes. When you start a company in the early days, it’s brutal. It takes a lot. What were the early days of RubiconMD like for you?

Carlos:  Yeah, so the early days were actually really hard and, at the same time, really fun starting the business. I was my first year of business school when I met my co-founder March of 2013 over that weekend at a Hacking Medicine event at MIT, and then we followed up, did a second hackathon about a month later. It was called 3 Day Startup, and we won best pitch. Then we said, well, this actually has a lot of potential. I think there’s an opportunity to build a business here, so shortly after that, we incorporated the company. That summer, I moved to New York, and that’s when we worked on developing the first prototype. We found one clinician who wanted to give it a shot, someone who had trained with Gil’s brother or had trained Gil’s brother in Connecticut, and we recruited maybe three or four specialist. That’s all we had at the time, one PCP, and I think one cardiologist, one dermatologist, one orthopedic surgeon. Not more than that. 

We built a prototype that I put together, a very simple MVP. It was just the front end. What the person would do is they would access the “platform,” platform in quotes. They would submit a consult. I would get that, and I would have to do everything manually. I would have to run those cases manually to the specialist. When I got their responses back, I had to go back and tweet the front end of the platform, so it was incredibly manual. 

We did that for probably about 200 consults, and then we regroup with this primary care physician in Connecticut. He said something that was fascinating. He said, “Well, first of all, this is the most doctor-to-doctor communication I’ve had in ten years, and on top of that, I’m not only learning things, but I’m also able to improve care for my patients who would have otherwise not had the ability to go see a specialist and maybe would’ve had to end up in the ED. I’m actually not only doing better care, but I’m also generating big cost savings for the system.” That was for us the biggest validation. We had a clinician who was getting a lot of value clinically, and his patients were benefiting a ton. That’s when we decided to raise a little bit of capital and start building a team and to actually build a legit platform.

Tanya:  What was one of the toughest moments professionally you had to deal with as a leader?

Carlos:  I think the first year was brutal for me because I was still in business school. We applied to an incubator. They said we’ll take you guys if you drop out of school. I was already going back. I was already starting projects with classmates. I was really using every class to apply to the business. We decided that it made more sense for me to finish business school, but that also meant that I was doing two things at the same time, right? I was starting a business from the beginning, and I was going through my second year of business school, and that was brutal.

I remember days where I would go to class in the morning, and then I had to get in a car, drive to New York. We were meeting with investors or a potential customer, or we were talking about the product and then drive back. Many days I find myself – it was midnight. I was dead tired, and I had to do a lot of homework and reading for the next day so eventually managed to go through both. I still got a lot of value out of school. At the same time, we continued to grow the business, but it was brutal. I remember the last days where I was like I can’t take one more class, one more case, or I’m going to break.

Tanya:  I can’t even imagine. That’s so crazy. At what point did you start to raise capital and really see your team grow?

Carlos:  The first capital we raised was when we – before we launched that really early pilot, we had some basic cost that we had to face before we could start operating. Things like liability insurance and funds to pay the specialists and just the basic things. The first time was actually pretty interesting. We had met this person through a friend of ours, and he was the former CEO of a very large health plan. We connected with him, and we was initially just an advisor. He started to give us his take on how this could fit into healthcare. What are the things that we should have in place? Eventually became a little bit of a more formal advice. We were checking in with him regularly.

We asked him, what would be your advice? We’re at a point where we need to raise some capital. Do you recommend us to start by going to a fund, going to a few angels? What do you think? He offered himself. He said, “Well, if I was interested, would you guys take an investment from me?” It was very natural. Of course we would, right? He had been incredibly helpful already.

That’s how we found our first investor. It was very natural, and then a lot of angels piled up on top of it. He obviously brought the credibility.

Tanya:  It was a strong signal.

Carlos:  Exactly, then we had other investors who were maybe stronger in tech but having someone who’s such a healthcare expert, a physician, a manager, CEO to back our model, it was a strong signal. Probably the first half a million dollars we had raised was through super angels. Then we started working with some of these early stage health IT funds that invested. That was our seed round. Which from the first check ‘til we closed it, we probably kept it open for about a year. We were just raising capital as we were getting more traction, and eventually, it was about 1.3 million that we raised with a combination of angel funds and one strategic investor that joined the round at the end.

Tanya:  At what point did you start thinking about RubiconMD’s culture?

Carlos:  That probably happened after we did our Series A. Our Series A was about a year and a half after we had closed our seed round, and that was the first time that we went through multiple hires. Right up until that time, it had been the three founders at the beginning and super-early employees that were part of the founding team so a very small team. When we started to bring more people onboard, it’s when we realized that the culture was going to be incredibly important. We didn’t get it right the first time. I think through the first iterations of hires, we brought people who were really good but maybe weren’t the best cultural fit for what we wanted to – where we wanted evolve. I think, as we were growing the team and through some of these successes or failures in growing the team, we started to realize the importance that having a strong culture would have for the company. Where we are today, I think culture is incredibly central for us. We dedicate a lot of time, resources, and attention to it, and I think it’s one of the key assets of RubiconMD.

Tanya:  Awesome, and what is RubiconMD’s culture?

Carlos:  We define our value system human, agile, innovative, and collaborative. I think that’s a good characterization of what you would see across the board in the team. First of all, I think I told you my personal story, and I shared a little bit about my co-founder’s personal story for why we do this. When I look inside the RubiconMD team, almost everyone or everyone has a reason why they’re doing this, right? They could be doing something else that’s maybe more comfortable, or it has more perks, but they’re all here because they are incredibly mission driven. They want to change the world through their skillset. I think that’s number one characteristic, very, very strong mission in the team. Number two, we’ve been able to attract really talented individuals that thrive really well in the craziness of the startup journey, right? You need folks that are the – that can function autonomously and that want to be pushed really hard and can solve really hard problems and collaborate really well with each other, so I’m very proud of the talent that we’ve been able to bring onboard. 

The third element of our culture is diversity. You would think that for a company that has to work really fast and that’s, basically, optimizing for having folks that are mission driven that you could expect that most of us would be the same or have the same backgrounds, and I think it’s quite the opposite. Some people refer to us as the UN of startups. We have so much variety in terms of countries of origin, backgrounds, races, gender. I think we’re about 60% female represented across the board, right? It’s not that we have just a very large marketing team with a lot of women in it. No, we have female representation across the entire company in leadership. Even at the board of the company we have female representation.

The beauty of this is that diversity has never been – we’ve never pushed for that. We’ve never even thought about or quotas or anything like that. It’s happened naturally. I think as we’ve been able to grow a more and more diverse culture, it also becomes a magnet for people who thrive in that environment, and that, in a way, becomes a self-fulfilling prophecy.

Tanya:  That’s amazing. I mean, the fact that it happened naturally and it wasn’t in response to what’s going on in the environment today in business, that’s amazing. What type of resources do you use to really keep yourself engaged and growing as a leader?

Carlos:  I put a lot of attention to it. There are several things that I do. Number one, inside the company, I think it’s incredibly important to encourage a culture of feedback, open, transparent, honest 360 feedback. We have that in place, but I particularly push really hard folks in the team to be very candid. That’s the only way I can learn about my limitations and work on getting better, so that’s from the inside.

Tanya:  How do they provide you feedback? Do you have a quarterly meeting or a survey that goes out? What’s the setup of that feedback loop?

Carlos:  We have a lot of things in place. This culture is so important. Our head of people in culture spent a lot of time working on it. Twice a year we do employee reviews. Those are reviews by their manager, but in between those cycles, we have peer review sessions so that we can get feedback from a personal level to the organization and from everybody. It is a time consuming activity. It takes a lot of resources, but I think it’s incredibly worth it.

Then we encourage feedback, and we enable multiple talents to provide it. There are folks that will be very comfortable providing direct feedback to a person and identifying themselves as the authors of that feedback, and there are folks who are more comfortable just giving in a more anonymous way. What we do is we have each manager collect feedback from different sources, and they package it up, and then they deliver it to an employee. Where somebody is comfortable and wants to provide more one-to-one direct feedback, they’re welcomed and encouraged to do that. If people prefer to provide it in a way that’s a bit more anonymous because they don’t want to potentially harm a relationship, that’s also fine. All we want to do is the people – make sure that people have enough content for them to understand what are the areas where they can keep improving, and also, what are the areas where they are doing really well and that other people appreciate?

Tanya:  Just curious, what was one of the pieces of feedback that you got that was impactful for you? 

Carlos:  I think, one of the pieces of feedback that I’ve received, it was very insightful is that there’s feedback on feedback, right? I spent a lot of time providing constructive feedback because I feel like I owe it to the employees. It’s my job to make sure that everyone here is getting better and better and learning new things every day. I have a very natural tendency to focus on the constructive feedback. Folks really appreciate to also learn what are the things that are working well? Not just to get the pat on the back but to be aware that, something they are doing, it’s actually very effective, and they need to keep doing it. That was a very important piece of feedback. That I should spend more time also on the positive feedback and reinforcing the things that are going well as much as I do on the constructive feedback, and what are the elements where folks need to work on to improve?

Tanya:  Really, encouraging not just for what needs to be improved but also what’s working, which makes sense. When things are working, you don’t put as much thought. They just work.

Carlos:  Right, and I think that’s a – that’s why I naturally go to how can we better? It’s that obsession with we keep growing, but I think it’s a very fair point to also recognize people when they do things well.

Tanya:  Yeah, absolutely. What was your favorite or your most influential leadership or management book that you read recently?

Carlos:  I’ve been reading a lot recently around hiring. Probably one of the most important and at the same time one of the most underrated functions at any company or qualities in many leaders is recruiting and talent management. I don’t understand why in many places HR remains a function that’s a little down or not properly respected. The most important asset for most of the companies and definitely for us is the human capital, the talent that we have onboard.

Tanya:  Without a question, yeah.

Carlos:  I’ve learned that a great employee who is mission driven, highly motivated, and whose performance is really high is incredibly valuable. I spent a lot of time reading about the topic either – in particular, two books that I found really helpful around improving the hiring processes and talent management. Those were Work Rules!. It’s a book by Laszlo Bock. He was the former head of people at Google. From that one, I took away – I guess one thing they did, it was fascinating, is that they mapped all hiring processes, and they understood the ratings that people had given. They map it out to how that correlates to the success of the hire in the job. After tens of thousands of hires, you start to see some interesting trends, so they have a pretty thoughtful framework for how to structure an interview. It’s very natural for us when we are interviewing someone to just go back to all right, this is the job description. I want to know what you did in the past, and then I’m going to make a decision on whether you’re a good fit for this job or not.

I think that’s short sided because that’s only one of the elements. I think in that book –we’ve tweaked it a bit, but our framework now is we look at a candidate. We want to understand what are their leadership styles? How would they fit with our culture? What’s their general cognitive ability? What’s their role-based knowledge for what they’ve done in the past, but also, what’s their role-based aptitude? What are the things that they’ve done in the past? Even if they weren’t exactly doing this job, how do they prepare them to do the work that we’re going to be asking them to do? We found that by having different categories and letting people focus on specific items of those we are being able to have a much more effective and less biased hiring process.

That was incredibly effective from that book, and then the other one that I also found very interesting is a book – I think it was called Who. It’s, again, a hiring method, and they take you through all the steps that you need to have in place before you go out and start searching for a candidate around properly defining the job and define what are the metrics for success?. Getting internal alignment in the team around what are the things that we’re going to be looking for as we start to bring candidates onboard? Really elevating the team’s ability to be better recruiters and better searchers of talent for the company.

Tanya:  That’s super interesting so trying to solve the hiring problem, which is a huge one and at the basis of building a team, really.

Carlos:  Absolutely.

Tanya:  Awesome, so last question, what is next for RubiconMD?

Carlos:  It’s been a little over 5 years since we started the business with about 5,000 clinicians using RubiconMD. When you look at the stats, they are very impressive. Primary care clinicians report that, when they use eConsults, 80% of the times they are able to significantly improve the patient’s care plan. Seventy percent of the times they are building capacity. They’re not just helping patients at one point in time. They’re learning things that they will use in future patient care, and they are avoiding more than half of the times unnecessary referrals, duplicate tests, unnecessary [36:20] cost. It’s been more than proven that this has a ton of impact on the quality of care delivered and the costs that are being taken away from the system and the patient experience. We’ve taken away more than two and a half million patient wait days. That’s time that would have stood in between the patient and the right care plan, particularly for the most underinsured population.

Tanya:  Carlos, let me just make sure I understand that, 2.5 million wait days you said?

Carlos:  Yeah, that’s correct.

Tanya:  In other words, 2.5 million days that patients avoided waiting to go see an expert and get the care that they needed.

Carlos:  Exactly.

Tanya:  Wow!

Carlos:  If they didn’t have eConsults, they would’ve had to wait all that time to get to the right care plan, if they ever were able to get to the right care plan, which in many places they can’t.

Tanya:  Wow! That’s almost a lifetime or more.

Carlos:  Yeah, the model is incredibly effective. It works really well. Five thousand clinicians is just scratching the surface. There are almost half a million primary care clinicians in the country, and this works really well. Healthcare is very fragmented, so incentives are not always aligned. As much as I would like to see all financial incentives be aligned towards improving outcomes, improving the patient experience, and reducing the cost of care, that’s not necessarily the case for a big portion of the system, but we’re working really hard to work through those challenges. We live in a world where five or ten years from now there shouldn’t be any primary care clinician in the country and why not eventually in the world who doesn’t use eConsults as part of their practice because these are incredibly beneficial for patient care.

Tanya:  Yeah, I mean, it makes so much sense. How do people get in touch with you?

Carlos:  Anyone who wants to get more info on RubiconMD can find us online at rubiconmd.com, and for anyone who wants to contact me directly and get anymore insights, carlos@rubiconmd.com is my email. Feel free to reach out, particularly if you are a mission driven individual who cares about improving access to care. I’d love to connect with you.

Tanya:  Amazing, Carlos, thank you so much for spending the time and sharing your amazing personal story and what you’re doing with RubiconMD.

Carlos:  Thanks so much for having me, Tanya. I really enjoyed it.

 

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