Riding Unicorns

S3E18 - Larry Gadea, Founder & CEO @ Envoy

April 06, 2022 Riding Unicorns Season 3 Episode 18
Riding Unicorns
S3E18 - Larry Gadea, Founder & CEO @ Envoy
Show Notes Transcript

Larry Gadea is the Founder and CEO of unicorn workplace software provider, Envoy. Larry’s story is a remarkable one. After his family fled Romania as refugees Larry spent much of his early childhood perfecting his knowledge of computer engineering. His proclivity in this space would see him go on to secure prominent positions at both Google & Twitter. In 2013 Larry decided to go it alone and launch Envoy with the mission of improving visitor and host experiences in the workplace. The company now oversees over 100,000 new sign-ins every day and has plans for further growth in the coming years. 

Hector and James invited Larry on Riding Unicorns to explore what drives him, find out more about his experiences at Google & Twitter and to better understand what pain points Envoy was trying to solve. We also manage to get Larry’s thoughts on the operational side of the business, in fact we manage to get him to share a little bit more about the company's initial go to market strategy, why they continue to focus heavily on building relationships with their core customer base and how they are going about building a great business culture. 

Make sure to like and subscribe to the Riding Unicorns podcast to never miss an episode. Also don't forget to give Riding Unicorns a follow on Twitter and LinkedIn to keep on top of the latest developments.

 [00:00:00] welcome to riding unicorns. The podcast about growth startups. I'm James Pringle and I'm a technology entrepreneur and investor and the founder of Pringle capital. My co-host is Hector Mason. Hector as a partner at B2B investor episode one ventures. Our mission is to uncover what it takes to build a unicorn business.

James: For season three, we're speaking to some of the best founders, many from unicorn companies and asking them about their journey, operational insight, tips, and lessons they've learned along the way

Today's episode is with Larry Gadea founder and CEO Envoy. Envoy's creating a world where workplaces work better. Envoy workplace platform has redefined how officers welcome visitors. Keep employees safe, book desks, and conference rooms, and manage deliveries in over 14,000 locations around the globe.

Companies like slack, [00:01:00] Pinterest and Warby Parker, relying Envoys, create an unrivalled first impression and keep that officers safe and compliant. Envoy has raised over $170 million from investors such as Andreessen Horowitz. Menlo ventures and top angels such as e-log. Elad Gil and biz stone. In this episode, we cover Larry's experience at Google, Shopify and Twitter.

The feeling of achieving product market, fit culture, and much more let's get started.

James: Hi, Larry. Welcome to riding unicorn.

Larry: Hey, thanks so much for having.

James: It's our pleasure. So Larry, with starting every episode in season three, by asking our guests, what does entrepreneurship mean to you?

Larry: Yeah. Yeah. I mean, this was a million dollar question right here, I guess, entrepreneurship, the difficult thing. I mean, at the end of the day, it's basically about not giving up and it's about like putting up with everything, despite all evidence that you maybe shouldn't be doing.

But you don't know. And, that's the whole thing it's like, you have to keep doing the [00:02:00] show must always go on and it's like, despite all the problems out there, you got to keep on pushing and keep on figuring things out. And that's really what it is. Cause it's just somebody or some set of people who really want to make something happen.

Hector: Interested in your journey to being a founder and I've taken a look through your LinkedIn and see that you started life as an engineer. I wonder if that was a sort of long term game plan as you embarked on your early career, or whether an opportunity just presented this.

Larry: Yeah. I mean, I always knew I wanted to start something. and that's a weird kind of feeling. You never really know that for sure. But I knew it and I knew that I needed to do something and I didn't really know exactly how, how should this work out? Like what should I be doing?

What exactly is the thing, but you just kind of figure it out after a while. And, and you want to do more, you want to challenge that's harder and harder. there's a set of people in the world that literally only want harder challenges all the time. Uh, I'm one of them and there's a lot of others out there.

And one of the hardest things you can do is start a company or start any kind of really big movement. The amount [00:03:00] of organization, the amount of work, the amount of thinking of every edge case, the amount of just like everything required. So you can actually just keep it alive, which is by the way, the goal, you just want to keep this thing alive.

that is really, really tough. Yeah, but I mean, what got me started in what got me wanting to build this company. It's I just thought a lot about the space. I thought a lot about like how I was doing the work I was doing at previous companies. And then I was like, Hey, you know what? I bet you, if we started a company that did this kind of thing, it would work out great.

And we're fortunate enough that it did actually work out, I guess so far, so far. I mean, it's nine years in

Hector: Yeah. It's, Interesting hearing you say you're just always looking a new set of challenges and definitely you're right. There is a subset of people on the planet who are like. What drives that in you? Are you trying to prove something to the world?

Is it just where you get your happiness and your satisfaction?

Larry: So, in order to achieve anything great. It's always really complicated. It's as simple as that, like usually if it [00:04:00] was easy, everybody else would be doing it, which would mean that it's just like everyone does it.

And it's not interesting. So that's what drives people like myself to really go for crazy challenges because you know that it's going to be really tough. It's going to be really complicated and then you know that there's going to be inherent value. I remember when there were like the launching of rockets back in the day, it's like sixties or whenever they announced the thing, it's like, ah, we're going to the moon.

Not because it's easy, but because it's hard and it's almost like exactly that way. Like, there's something about like, if something is complicated, it's hard, you're gonna, you have a really high likelihood that it's going to be something that's really. even though inherently people will run away from the hard thing because it's hard and they'd rather do the easy thing.

so it's kind of like, that's just how the rural set goes, I guess. And some people just like that. but yeah, I think the engineering also helps a lot and it, being an engineer at heart and just having written a bunch of code and stuff. When I was younger. It's kinda like, you just are always screaming at your computer and you just want to like throw it against the wall, But in the end when it does that one happy thing that you wanted it to. It's all good. [00:05:00] So, yeah, I dunno, you have to have a little bit of a short-term memory for these.

James: Yeah, Larry. And when you're founder technical or non-technical, I mean, product management is so key in the early days. Obviously you've had some experiences. Big tech companies like Google and Twitter and Shopify. What were some of the experiences that you took from those organizations that helped you in the early days with that?

Larry: so being surrounded by like-minded and like really bright people really does help a lot. Like just having, having people around where, where it's like, Hey, you have this, unfinished idea. And, they may be in, been in the industry for a lot longer. And then you're kind of like, oh yeah, no, no, no.

This is how you do it. Or. a lot of the time, the things that you end up remembering and using and your own company or things that you learnt, and you didn't even think you were learning them at the time. just, all these random things like, I remember when I was at Twitter, we announced some new feature that was going out and they did it in this interesting way where it was in front of the whole [00:06:00] company.

And like in like weekly, all hands, we called it, and then when I started Envoy, I was kind of like, huh, it really does feel like we're not getting together enough and announcing all the cool new things that we're doing. We should start a Friday thing and we weren't going to call it tea time.

So we called it like a show and tell, but it's literally the same concept or it's like a weekly event that happens. And it happens because people are they need to know more about the company to know more about what their peers are doing. And then we want to put on events. but I never knew, like, it's not, like when you operate a company, you should always have a Friday tea time.

So everyone covers everything. You just kind of remember it and then you do that. So there's so much like on kind of spoken stuff that you then are like, oh, wait a second. This is what they dealt with back then. maybe I should try it. So there's a lot of. Replication of things that you saw work well that you don't know at the time, but when it comes to it in your own thing, you're kind of like, oh, Hey, this is what we did that.

Hector: Yeah. Super interesting. [00:07:00] Larry. you know, 2013 it's a little while ago. and the world, was quite a different place. I mean, not, just from COVID, but distributed work was not, at such a full, people weren't, thinking about it quite so much.

presumably hardware work folds in the same bucket as that. I wonder what, products you kind of started with and what pain points you identified initially that you wanted to


Larry: Okay. So it's actually really interesting in 2013. I mean, this is long before the pandemic the whole concept was I'd worked at Google. I'd worked Twitter. Twitter was a very kind of undeveloped version of what we had at Google. So it was. like when I was at Google, it was still pretty big company. 2005 is early in Google days. But in its lifetime, it was pretty big. We were like 10,000, maybe 15,000 people. and there was a lot of problems and stuff that they solved themselves. Like the engineers there would decide, Hey, you know what we want to be building.

To solve our problems here. So they built visitor sign-in things. They built things to keep track of the bicycles around the campus. They [00:08:00] built things to keep track of, the food and the menu all these different, Google offices. and they just did that. Like these one of these engineers, I don't even think they were paid to do this.

They were literally just like, they're doing it as a sidebar. and it was kind of cool. Like you could go on this internal page and you could see all these different things about the work that you're doing essentially. So what happened is when I eventually ended up going to Twitter in 2009, we didn't have any of this.

And I noticed that like, oh, there's all these random people around the office, like who are these people? And they would literally be visitors that are trying to find their friend or something, but there was no way of keeping track of things. There was no way of keeping track of what's going on in this meeting room.

Is this meeting room even taken, that kind of thing. So essentially what ended up happening is I got this thing. It seems like, Google and stuff had all this stuff figured out all these internal logistics figured out, but like these other companies like, Twitter at the time, but there was others that my friends were at and I can notice all the same.

They didn't have an [00:09:00] easy standardized way of dealing with it at all. So I was kind of like, I bet you, if we built a company that just built a bunch of tooling, that is really, really good and easy to use for employees. I bet you, it will be effective for companies that are, just starting up or much smaller or don't have the time or resources to build.

So that was the idea that, essentially got everything started. And the original product was the visitor sign-in product, uh, Envoy visitors still around today, still growing despite the global pandemic, but it was a very simple concept. It's about getting people inside, like when, uh, visitor comes into your office, uh, you need to keep track of them for all sorts of reasons.

There's all sorts of liability stuff. There's all sorts of like, just notifying them that like, Hey, your visitor's downstairs. And, and also like reminding, that visited there at the right place. And to give them a really great first impression. usually people's first impressions and offices are like, I'm lost.

I don't know where to go. And is this the right floor? [00:10:00] Am I in the right building? and it's kind of like for these companies that care so much about their brand and what they have, they're perceived in an externally, at least on their websites and all that. it's a little weird, a lot of the time when it comes to their visitor experience.

We decided to focus on that because those also great, like growth method. So you, you kind of get into a company you sell to them, however you do. And then it's, all of their visitors going in, all of them see the Envoy product and they're like, wow, this is kinda cool. And they bring it to their own office.

And it's that kind of cycle that has gotten us now into something insane. It's like, I think it's like 15 or something thousand, offices using it on a daily basis. it's like 150,000 people a day, uh, are going through the Envoy visitor system.

Uh, not to mention all the new stuff with the pandemic, as you can imagine, the pandemic makes it a little bit more complicated. Okay for visitors, given that a lot of people are at home and that kind of thing, but there's all sorts of opportunity in that too.

James: Yeah. Now, and you mentioned [00:11:00] something there that was actually going to ask about what you just touched on it briefly, which is kind of. Go to market and enterprise sales where we've seen these sort of different models. Some people go as senior as possible and try and get that organization from the top down.

And the other companies like slack and Dropbox kind of just got the normal user to start using the product. And eventually the decision maker would kind of hear about it. How did you go about that? Did you start by just kind of getting friends to put it into that companies? Or did you go like big enterprise sales to the sort of all the way to the top or.

Larry: So this is a really great question. I think obviously no easy answer for any kind of business. It all depends on your business and that kind of thing. Even though we started almost exclusively self-serve and people would go through the flow themselves. Like they'd literally go on our website, they'd click a sign up button, they type in their email, address a password and then literally use it.

And then when it's time to pay, they would get to put their credit card number and, or whatever system. And then they would basically end up paying without needing to talk to. Even though that is how the majority of the early revenue [00:12:00] came in. the secret behind all these companies, including, and we're no exception is that as, company's first person or first set of people, it doesn't matter what your job is or what your kind of role is in that company.

Everybody's a sales person they're in the same way, everybody's support. Everybody's trying to help your customers. So basically, did like our first, 30 or 50 customers. and what does did mean? Well, it means that you answer all their emails, you ask them like, Hey, how are you using it?

I want to watch you use it. And like, it's like, I literally would sit in people's lobbies for hours and, just kind of see, like, how are they using it? How are their employees using it? How are their visitors using it? And where are people frustrated? Where are they stuck? Where are they like. And it's those kinds of things that, really got me to understand like, okay, this is why they're using it.

How can we build the product better? but yeah, there's a lot of like interesting learnings from, how people use your products.

Hector: fascinating. And I have to ask about, COVID because presumably it was transformational for Envoy. what was your [00:13:00] initial reaction when COVID came and was it kind of shit? This is scary or was it like, oh my God, here we go. This is exciting.

Larry: Yeah. Yeah. I would never admit to myself that shit, this is scary. Let me just be very clear. I'm at a level of like denial where like it's like, no, absolutely not. It's impossible. What are you talking about? That denial by the way is very important to the operation of.

but yeah, no, I mean, you can imagine like, they'll work early days where basically it was a lot of like self-serve and a lot of kind of, customers coming on. We also built a sales team over time, so we learnt a lot about the customer and we built relationships with these custom. So what happens is it comes to the global pandemic.

Everything stops. People are like locked in their homes. They obviously aren't visiting any offices level on their own. and there starts to be this world of like people that have bad wifi people that have weird living situations, people that need to be at an office because they have all this equipment around them.

So we got to this point where it's like, we started getting asked by all [00:14:00] these customers. Hey, where are you guys in like doing anything for our employees? all of our other companies like our door access companies, our video camera companies, they aren't building anything new.

They've been the same business for years and years. are you guys able to help us, get our employees back even in a small form? because these people have bad living situations, for example, and that's exactly actually what ended up, kicking off what we call Envoy.

Which is basically the visitor's product, except it was migrated over to be for employees. And instead of asking people to like, I don't know, sign NDAs or like type in their name or whether they're a C now it's about like, have you been to these? provinces of China.

Have you had COVID have you been near someone that's had COVID. and because we started that way, then all of our customers that were using us for visitors now, they all switched. Cause it was a free add on, it was a free add onto the visitors product was designed to be a, kind of like a churn, prevention kind of product.

So we knew that we were going to lose a lot of people. [00:15:00] but, uh, we weren't admitting it, but like when you were going to, so we're like, okay, we need to prevent that from happening. And the number one thing that companies wanted to go back because their own personal sense of identity and, mission, vision, culture happens in offices.

So we knew inherently, there's a first principle that required them to like, be back. But the problem is that they couldn't spend money for something that they philosophically thought was going to be made in future. So what happened is, we had to adapt, our messaging and all that.

It had to be a free product. when we did that, people were like, okay, cool. I totally get it. they were using it because it's are included inside their visitors. So they were, they started using the employee side of it and just kept on working from there. Like as they were using the serving functionality, then they want a door access integration where it's like, Hey, if a, if an employee comes in, but they haven't filled out the survey. don't let them in the building. So we literally in, it used our same integrations we had before with door access systems [00:16:00] and we like made it available for employees. to use when they come in, if they've filled out the survey it's like, okay, from there, we start getting asked more and more features.

They're like, Hey, can we have hot desking? Except they're really far away from each other. So people don't spread COVID with each other. So that was another moment where we're like, oh yeah, absolutely. So we built a mini desk. And then as we built on more and more features, even like around contact tracing around, like where are people seated and, the capacity of the office and, and managing that some of these products really start getting more and more functionality requests to the point where like our desks product, for example, it turned into a product because everybody kept on asking for more.

And these days it's no longer about like keeping people away from each other. It's about bringing them together on certain days. and with this new concept of hybrid, So we just kept on adapting our product line over and over, depending on what our customers wanted.

And, also just like what made a lot of sense for kind of our vision the [00:17:00] future, which is one where, where the workplace is a lot more thoughtful about the people inside, but it's also one where it's like there's a lot more flexibility and there's a lot more like, Ability for an employee themselves to kind of interact with their environment in a way that maybe only like facilities or it, or like the people that you filed tickets with only they would, otherwise get access to it.

So, yeah, that's kind of how it, like one thing led to another, to the point where we got to where we are. but yeah, along the entire way, I would actually argue that the last two years, for example, have just been the best two years of our company, for sure. just because it's like very clear purpose, very clear, like there's a end of the world moments and I don't think anybody ever really like maybe others in the company were kind of freaked out.

I think people like me, like you last this long, you've got a special case of, of something that gets you to not, be too crazy about your concerns about.

James: Yeah, Larry. That's so interesting because I think there's a really interesting thread here, which is Hector and I both VCs [00:18:00] and, you know, we're looking for companies with really scalable business models, really big market size. But sometimes companies just need to get really good at focusing on building core customer relationships, being sort of known for building great product for known, for caring, known for solving their problems.

And then these new opportunities kind of develop. I mean, if you've listened to an interview with someone like Jeff Bezos, he'll say I can't, I couldn't have never have imagined what Amazon would be now when I started out and you go on that journey. But if you build trust with customers, Yeah, it will unlock these new opportunities.

you've been very, very successful with fundraising, but I'm sure it's not always been plain sailing. So how do you see that as a thing and what should that, what inspiration can other founders take from that as a kind of just focus on building some core customer relationships and some of these other big opportunities will, will arise along the


Larry: so there's a lot of nuances to what you just said. So customer relationships [00:19:00] inherently are not scalable. So, um, Envoy today we have, 10,000. It's not quite there, but it's close, customers that we have as paying customers.

that's a lot of relationships you have to maintain, and there's no way that, you can scale, anybody's relationship to a Rolodex of like thousands of companies. Uh, especially inside of their own companies. There's like sometimes dozens of people. so it's kind of like, you need to have a really strong, inherent product that sells itself, as they say.

and on top of that, you attach a sales motion. The problem with salespeople is that they're awesome. they can basically hide the fact that your product is very broken. A really good salesperson will be able to literally you can't distinguish if it's a good product or.

not Because they pitch it in the right ways and they find the right kind of buyer and they know how to navigate their internal reporting structure. So their boss's boss's boss knows the value of your thing as well. and it's kind of like, that's a really important concept that it's like you needed the product to inherently [00:20:00] provide value in a way that you don't have to be there to keep.

reminding them manually. And then that's a scale of emotion now. keeping light touch points with them, or at least with your bigger customers, keeping like a, bit of a stronger relationship is very important because of moments like this. Like it is because of our strong relationships with our customers, that we were able to introduce a new product, get it adopted, have that be the majority product use case and have a massive expansion because of.

it So think from the investor side, having just gone through fundraising and, and all that stuff. Like they look for certain metrics. net retention is one of the biggest ones and that one's basically like, okay, what percent of customers did do you have now that you had, and it's, the revenue and it needs to be higher than a hundred percent.

So basically what it shows is that, you're never tension, needs to be like 110, 120, 130%, which means that in one and a one year time, your customer now on average pays you 30% more. that's really tough if you're losing customers,[00:21:00] and you're not expanding them. You're not going to get anywhere near the hundred, let alone 120 hundred.

So that was some of the key parts that, like kind of some investors control for, NPS is another one. Now NPS is kind of like, I could do a, seven hour talk on NPS and all that craziness. Cause it's a very interesting metric, but is yet another way of knowing that your customer.

Like what you're building and believe in it. And it's very sticky. so these are like some of the metrics that investors are using, but at the end of the day, it just goes back to both of these numbers are going to skyrocket and be spectacular so long as you build products that a so good that they self-serve themselves and be, they're kind of like easy to use and, solve a problem.

That's. our industry is interesting. I think a lot of people don't recognize just the, millions and millions of businesses out there that have offices and just the like lack of tooling that these offices have. I would argue. This is the biggest industry ever. It's like literally a Greenfield of opportunity because I don't know.

I think people just [00:22:00] assume the office. Products have to be weird or something. but these days, I mean, it makes all the sense just given COVID, you just need to be so much more logistically, thoughtful about your workplace. Things like who's in here. And then when they are there, making sure they get like parking, making sure they get food, make sure they have a desk, making sure they have like space for meeting.

these are all things that in the past you would have just like assumed everybody has, or like, I don't the receptionist. but it's like, no, now it's much more logistically burdensome. It's much more work. And, there's a lot of opportunity in that too. So yeah, we're pretty excited now, but I mean, it wasn't all super obvious.

but you just keep on building stuff. I mean, at the end of the day, the differentiators that, like your company is building, versus others which are panicking and doing something.

Hector: Yeah, for sure. It sounds like you guys, the whole, whole way through your journey really listened to customers and, built products their needs. I wonder on the. Other side of things, you know, with the benefit of hindsight, is there anything that you feel you would've changed about how you built, involved or anything you think you [00:23:00] did


Larry: Yeah. I mean, there's plenty. I did badly. The question is how much will admits on a, on a podcast. I mean, every company is on average, very poorly run. I would say that like, we're doing a particularly good job of like, not being as bad as everybody else. at the end of the day, communication is always a big thing.

Um, just like, a general pace of executions, a thing, uh, balancing between kind of, what you want as a company and, and like what the customers want and what the employees want. Balancing, all of that is, is a very, very, very hard thing to do. yeah, so I think that's always like really, really tough.

I think a lot of people just don't really, uh, appreciate complexity of the, the


Hector: Is that to say that in the early days, perhaps there, wasn't the communication, at Envoy that you know them.

Larry: Yeah. when it comes to problems, it's usually communications related that then what happens is people assume the wrong thing and then it kind of like spirals into a bigger issue. [00:24:00] So I think it's like a, there's a lot of things, like I mentioned earlier, just having a cadence far talking with your company and working with people to, get the news out internally.

one of the things is like, when you listen to your customers too much, what happens is you don't really step out and look at the bigger picture and question. So for the longest time in our company, we spent so much time building this visitor's product and yes, we have the biggest, fastest growing the best arguably visitor's product for companies exist.

And it's really meticulously built and designed and, and all, all that. The problem is that it's kind of like you need a little bit more as a company to really inspire your own people, to inspire your customers, to have your customers feel like they're investing in something bigger than just the one.

we just got too much down a road of, of this visitor's product and, don't get me wrong. And the visitors product today still has the most amount of developers and it's moving the fastest, but it's kind of like, you need to focus on other things. if we had not started building on [00:25:00] our bigger platform, if we'd not started building out, even like the deliveries product we've been started on our meeting or product before the pandemic, right before, like what a bad time to launch that.

kind of like we built the rails, such that when the pandemic did hit, we're able to just quickly pivot stuff, change a couple of things from a visitors to employees, and then add on new functionality and what was already like a pretty good code base. So I think. We just spent too much time focused on the here and now, as opposed to kind of like the one year, two year, five years.

whenever somebody asks me, Hey, where are we going to be in three years, five years, I always get like slightly nervous because it's like, uh, it's, uh, similar but more, it's really tough because it's just the day-to-day. Is so tolling on, uh, on just operating a business cause you're going to die because of the day to day, not because of your future.

it's just so important that people remain focused and as a, as a founder and CEO, you have to be doing both. people are pretty good though at like, saying like, where are we going? Why are we doing [00:26:00] it? Like this? What's the bigger picture here. so they, they remind you. But, yeah, I would just say one of the biggest issues we have is just being too much in the, like into the day to day.

and not kind of thinking about the bigger picture enough, or not being pushed into it and communicating it to the company and iterating on it with different people's ideas.

James: Yeah, it's really interesting. Larry, you must have been able to sell the bigger picture to investors because you've raised a lot of money. Crunchbase puts out over $170 million, likes of Andreessen Horowitz, initialized, capital, Menlo venture, and a number of others. what was the fundraising experience like through the company history?

Has it got easier? Were there any really difficult times, and how.

Larry: It's never easy.

James: It's never easy. Uh, and one thing I noticed is that a lot of your investors have followed through. So how important was it to you or do you think it is for other companies as well to have investors that can follow on and contribute to later?[00:27:00]

Larry: Yeah. Yeah, no, that's a really interesting question. It's a lot of tactics here that are, pretty, uh, interesting. And, and I don't know if they're like critical, but they are important. So it's not ever easy, not even close. anybody that tells you it's easy or when it looks like it's easy, it's not. And there was a lot of rejection.

There's a lot of nos, for every, yes. I mean, there's like literally was like 20 or 30 now. Now, you talked a lot of people and you find people that have very similar interests and that believe in the world in a similar way that. So for us, Brookfield joined our series C and they let it, and they're kind of like, it makes sense.

Brookfield is a massive property manager owner. And they were kind of like, we understand the value of this stuff. We also have a bunch of offices right now that have tenants in them and we understand the value of your software. when you go to any other VC, like, it never ceases to surprise me even at a series C just the amount of like, kind of investors that.

They just do not think very forward, but it's kind of at the series C when you're raising a hundred [00:28:00] million dollars, for example, that's a lot of money, like. they would argue, like, that's the point? Like you're not supposed to be very like risk-taking, it's very numbers driven, like by the series a, it starts getting numbers driven.

So what that means is you can't like wave your arms and tell them about an amazing future to get them to pony up a bunch of cash. you gotta like give them some numbers and some adoption and some like a growth and, and you got to show them real, revenue coming in by the series B.

James: You got to have your net retention at 130%.

Larry: Yeah, at least.

Yeah, yeah, no, 130. We get, if you can just maintain it at that, you're going to be good to go. I mean, it's just the numbers go crazy after any, anything over a hundred, but, yeah, at the series B it starts getting even more about like, what's the revenue growth. What's the net retention. what's the multi-product adoption.

what's the magic number, which is basically like how much money did you spend last quarter versus, money you made this quarter? And it's like a ratio, so you can figure out is this company [00:29:00] burning a bunch of cash to make cash? and then there's like a couple other metrics, like, some, investors like using.

even though they don't produce cash, it's a sign of like adoption and, just like people liking it. so these are like the key ones. Like I think the number one most important metric is of course your revenue growth that is by far the most important second, most important is your net retention, which also implies growth, but it's a little bit also about like, are you retaining.

You can look at your gross retention. Like if I were more of an investor, I would look at people's gross retention a little bit more, but I think people do. It's just that like, just because you retain your customers, isn't enough. you need that growth in addition to it. and then just making sure you're not wasting.

James: Yeah, sorry, I've got another, just really quick add on to the question, which is around, like you said, you had like 20 or 30 meetings, and I think that's quite common for a lot of founders who are going through the fundraising process. Was there ever a meeting that you went to that you've got to kind of came steaming back to the office from guys, we need to quickly do this, or we need really need to improve this metric because that was just a slight big red flag that had been [00:30:00] raised in the meeting, which you're like, we got to fix that before we even take another meeting.

Larry: Yeah. I mean, it's going to be hard to fix anything in the last moments. Like every bit of feedback that they provide is stuff that I like very meticulously me and my CFO snowy meticulously right down. And then, uh, whenever it comes to like staff meetings or company prioritization, we'll be like, okay, we really need to get like the NPS on this product up.

Or we really need to get like the net retention. in our series C we had an interesting version of, net retention where, we were using, an annualized aversion of, net. So basically it, because we had a pandemic last year, our numbers weren't nearly as good because we were in the middle of the pandemic, obviously that isn't great for our company.

so we were using an annualized, uh, net retention, and then they wanted to use a trailing 12 months net retention. so it's kind of like the difference of like you take the latest month, then multiply by 12 or do you use 12 months? And what happened is some investors were very meticulous on like, yeah, we need to use [00:31:00] a trailing 12 months.

And with that, it comes with all sorts of problems for companies like ours. So that's how you very fast, even like before the meeting, you can get like DQ, it's just like, sorry. Like it's just your, your retention is not in our thing. We have like a certain agreements or like they have like a way they do it based on, even though sometimes the LPs agree.

So, there's a lot of that kind of thing, but then the people that really dig into it, they're just like, holy crap. This thing's like really doing well. And it's like really growing one, despite like a global pandemic. I mean, we literally got a unicorn valuation in the middle of a global pandemic for a company that sells software to physical workplace.

Like there couldn't be a more unlikely events I would see. And it's, kind of like, there aren't very many of these companies in this space, but I think it's just, it just goes to, the like persistence that a lot of the team has in like figuring out, Hey, how do we build stuff that customers will really like, even if [00:32:00] we're all super confused as to what's happening in this pandemic and will this, will this ever end, what will the future of work be like?

And, that kind of stuff. Yeah, I think it's a lot of investors, like, especially Brookfield. Like they super appreciated the fact that we kept on building. whereas a lot of other companies just like try to, I don't know, squeeze more efficiency out of sales or something. and we really, really just kept on building brand new things.

I think that's, that's just how our company goes and that's how we train ourselves. And I think, uh, I think investors like seeing that too, it doesn't matter if you're raising 1 million or raising a hundred million, it's the, key parts are still like you're building, but also like you're retaining your customers and of


Hector: Yeah, I think it's interesting during the pandemic. I mean, there must have been, obviously investors are on Hyler and probably just saying no to anything. They sort of didn't immediately like the local COVID. So there probably were a lot of diamonds in the perceived rough as was the case with Envoy. but James and I are always, interested to hear about how people build, Uh, culture conducive [00:33:00] to success and how they build really, effective hiring processes and things like that.

And I know you guys talk a bit about challenging the status quo and wanting your employees to challenge the status quo, which, doesn't surprise me talking to you today. Um, I wonder how you sort of landed on your hiring practices and. How you decided on what kind of culture you wanted to build. and as an extension to that, kind of, if you have any practical tips for founders who would like to follow your


Larry: so, I mean, one thing is just obvious, and you can cover your ears, but it's like Silicon valley I argue is still one of the best places to be, It is the place.

That's the highest density of people that, will build something because they philosophically think it should have. Versus they will build something because I bet you, this will make a lot of money. So that's step one. It's like you need a city and a set of people, that you can surround yourself by, that are building things because they want it to exist.

And that they want like the bigger world to be excited about [00:34:00] something. versus necessarily that end game, kind of piece, like don't get me wrong. The revenue is very important. You can't pay the 270 something. People that we have hired here, without, having a substantial revenue or at least.

but you need that mindset. So the culture comes from the area. It comes from me having been at, Google at Twitter. these companies that are very, like, pro on like building things and doing things uniquely and differently. but they're also kind of like, good to their employees as well.

it keeps people's minds focused on like, what are we building? Why are we doing it? How are we changing the world? because otherwise they will, can go off the cliff.

And what happens is you start focusing too much on like, kind of staying employed than they are, building something risky and big. and that kind of thing.

And, the interview process does involve our cultural values. We will ask questions that are very specific to our cultural values, uh, which is like also around like humility and, and finding. I like egos are important, but they need to be under control and most people don't control [00:35:00] them.

So like, they just will double down on like really poor decisions. so it's, it's kind of like, those are some of the values, challenging status quo. Um, and it's also like we have as values of like pitching in, so we help each other. It's built into the culture, choosing action, like we noticed a while back that there was too much consensus decision-making and it was slowing us down.

So. I want to get people reminded, Hey, you should be building and you should be making a decision, even if it's the bad one. Like that's one of the most important things. Like just make a decision, even if it's the wrong one, it's way better than not making a decision. that's really, really important, very hard to do very hard to do all these values are actually go against, most human intuition.

and I guess that's why they need to be values that we repeat because otherwise. yeah, so that's, those are some of them. Um, communicate openly as one of them as well. Like I think transparency is just like, the easy button for companies to survive just that little bit longer.

so usually transparency doesn't happen in companies, because people, they don't communicate [00:36:00] enough. So then it, it looks like they're withholding information, uh, which then creates a culture of like us versus them, which is. yeah, that's another one. That's really big.

James: Yeah, it's so interesting having so many founders of unicorns on the show, and there are a lot of similar themes that are about sort of almost having to create culture, which is an instinctive enabling people to take risks and, decision-making is a big one. Like get on and make more decisions. We've got to move fast.

So, uh, don't be afraid. It's really interesting.

Larry: it goes against human intuition, all of them like it's, it's like taking risks is something people don't want to do. It's uncomfortable. It's like, uh, it's not safe. Like that's why people end up in all these government jobs and all these jobs of like companies that are just like random and go, who even knows if they are doing good for the world.

it's because they don't want to take a risk. Here's the thing. If people knew at Envoy or anywhere, if they knew that a global pandemic was going to happen.

Exactly. Zero people would have joined our company. Exactly. Zero people like no buddy in their mind would have joined a workplace company. That's going [00:37:00] to go through a pandemic and X amount of days. However, we did go through one and we figured it. And that's the whole thing. I think people really perceive risk as like, they're always going to hit the worst case scenario and it's basically the end of the world every time.

And it's like, no, it doesn't have to be that way. And you can really control the odds. And, and it's like, that's the big thing. I think that, risk is like, that's one of the clear ones that I think just founders, entrepreneurial-ism all that stuff. it's like tolerating risk and being okay with.

usually it's in service of just like doing the philosophically right thing. So you kind of don't care. You feel like you're contributing to something. that's what drives me at least. And then that's what makes that's what makes me do risks where otherwise it could appear on reasonable or, or like, like people want to avoid being uncomfortable and then it's kind of like, no, no, no, you need uncomfortable to learn and to be better. but it's, I mean, try telling anybody that tried telling me that, like, even me, I will be like, um, [00:38:00] uh, I'll be like, no, that's like too hard or whatever.

And they got to like snap out of it. I need somebody to remind me. It's like, no, no, no, we, we need to that means it's. but it's, it's really, really hard. It goes against just normal


James: Yeah. Our research says that, you know, you're a big fan of Eric Schmidt's book, how Google works. So if someone was to write a book about how Envoy works, what would the story be? And what would the last chapter be, which might sort of tell us about what your plans are for the


Larry: Hmm. Um, oh, that's interesting how Envoy works. I would just say that it's around chasing problems that are otherwise not understood by people. Like we will always look for new things in a market that doesn't necessarily mean. so we look for problems in spaces that are big, but no one is really in it because it appears that's a smaller thing.

the workplace is of course a good one. So, how Envoy works is. There's just a lot of asking questions of customers building for what they need and, not billing what they say they want, but building [00:39:00] for the needs that they have, I'd say like, I mean, it's just like, it's a lot of very well-intentioned people that, care a lot about, the end user in everything that they build, and who they sell to and who they market to. so I think that those are some of the, things that that would be in the


Hector: Fantastic. Laurie. I think we could keep onto. Cause it's super interesting hearing your, journey and about Envoy, but, we've had tons of insight from you on company building on hiring on culture fundraising, some nice anecdotes in the, you know, it's been an interesting journey for your company through a pandemic and all of that.

So. Tons of nuggets for our listeners to latch onto and hopefully act on. before we wrap up, we always like to do the dinner party guest game, where we ask you to invite three people to a dinner, they can be dead or alive. They meet anyone you want. so who would you


Larry: Yeah, this is really tough. I literally, you told me you were going to do this. And, and I, it took me like 30, 45 minutes to like, think of the people I'm, I'm bad, I'm bad at dinner parties and be it's like [00:40:00] very it's, not where they all together at once or are they like one it's a one-on-one. so the people would be, Elon Musk is definitely on the list.

I think there's something about operating so many impossibly hard companies all at the same time. and being able to tolerate it and not like explode and kind of say like, you know what, I'm just gonna give up and not do anymore. So, uh, I like that a lot. I like the risk-taking. I liked the focus on, things and.

there's a certain form of masochism that I respect as well in that. so I, I definitely, uh, super respect and would love to have a dinner. I don't know what he needs.

I think he needs, The next one, Neil Armstrong. So I was looking for people that, that are interesting and that I could learn. and on Neil Armstrong, I though, of course is like, of course the most famous one first moon, all that. just really good at like how we got there through all the, like all the pushing, all the, like risk-taking all of the, actually going for it it's like going out there, like you are [00:41:00] literally very likely to die going in one of those. and I I've been just writing stuff that I like. He's very into like kind of how it works and stuff too. So it's just, this is the kind of stuff that's really, really important in, what I like to learn about.

and then the last one, just given that to my childhood was literally, and I was brought up with, with this guy's humor, uh, Larry, David. so, he of course was one of the main writers and producers for Seinfeld. but it's also like his sense of, uh, jokes and that kind of stuff.

They're like pretty, um, it's pretty smart. And I like that. Like, even in comedy, having like cleverness is as much. So, uh, I, I, yeah, I would, I would love to have dinner with him. I don't know what, what we talk about, but like, uh, I would probably find something pretty quickly, but yeah, I like that.

It's kind of like, um, it's I have a lot of respect for people that do a lot of really hard things and start complicated and they go against how everybody else does it. So yeah, these three, for


Hector: definitely it's an eclectic bunch. It's definitely gonna be an interesting dinner. I really appreciate it. Larry. It's been fantastic.[00:42:00] and thanks for spending the hour with us

James: yeah. Thanks,


Larry: All right. Thanks for.

James: That's it for this week. I hope you were able to take away many learnings from this episode. Thankfully, we have plenty, more amazing guests and insightful conversations coming your way. Every week, every Wednesday. Be sure to subscribe to riding unicorns on apple, Spotify, or wherever else you get your podcasts. Thank you again for listening. If you're interested in supporting the show.

Don't forget to follow us on Twitter at riding unicorns underscore And follow us on LinkedIn as well by searching riding unicorns. See you next time.